University of Texas - MKT 6301

1)Which of the following statements is true regarding integrated marketing communications (IMC)?

1. 1. According to IMC, price should not be considered as a communication tool.
   2. It uses different elements of the marketing mix to reach different targeting audience.
   3. It uses different elements of the marketing mix during different stages of the product life cycle.
   4. It coordinates different elements of the marketing mix to prevent customer confusion from conflicting messages.

2.               has traditionally been defined as any paid form of nonpersonal communication about an organization, product, service, or idea by an identified sponsor.
   1. Sales promotion
   2. Advertising
   3. Personal selling
   4. Public relations

3. Which of the following best describes any communication form that sends messages directly to a target market with the anticipation of an immediate or short-term response?
   1. direct marketing
   2. radio advertising
   3. newspaper advertising
   4. public relations

4. Which of the following is the final stage of the advertising decision-making process?
   1. setting advertising goals
   2. selecting the target audience
   3. selecting media
   4. measuring advertising effects

5. Which of the following types of appeals focuses on the functional or practical aspects of the product and emphasize facts, learning, and persuasion?
   1. social appeals
   2. behavioral appeals
   3. informational appeals
   4. emotional appeals

6. Which of the following is the advantage of public relations?
   1. the message originates from an unbiased source
   2. the sponsoring company has full control of the message promoted
   3. the message is almost always positive
   4. the message is very unlikely to damage a company's reputation

7. With reference to the three basic stages of the advertising response process, inducing trial for a product is an example of which of the following?
   1. cognitive objectives

1. 2. affective objectives
   3. behavioral objectives
   4. post-purchase objectives

8. Which of these best describes the objective of trade promotions?
   1. get channels to carry the product and promote it
   2. get customers to purchase the product through the channels of distribution
   3. get customers to promote the product to their friends and relatives
   4. obtain feedback about the product from the end users

9. With reference to the three basic stages of the advertising response process, what type of objective should be used if marketing research determines that awareness is high but few potential customers perceive the product favorably?
   1. cognitive objectives
   2. affective objectives
   3. behavioral objectives
   4. post-purchase objectives

10. Which of the following statements is true regarding sales promotion?
    1. It lacks focus on price.
    2. It is less effective than advertising in generating a measurable short-term sales response.
    3. Customers are induced to become brand-loyal.
    4. Customers are induced to become price-sensitive.

11. Which of the following statements is true regarding first-degree price discrimination?
    1. It is changing the price of a product due to inflation.
    2. It occurs when competitors charge different prices for similar products in the same market segment.
    3. It involves charging different prices to segments of the market according to their price elasticity or sensitivity.
    4. It refers to the strategy of charging a higher price for a product at the time of introduction and then gradually decreasing its price.

12. Identify the approach where the benefits of the product are put in monetary terms such as time savings, less use of materials, or less downtime.
    1. value pricing
    2. pricing to value
    3. value-in-use
    4. price discrimination

13. With regard to price elasticity, if a product's price is low to the point where there is considerable value left for the customer (a good deal), an increase in price will:
    1. decrease the market share of the product.
    2. not have much impact.
    3. decrease customer purchase.

1. 4. increase brand equity.

14. An understanding of the cost structure of the market provides marketing managers with:
    1. an idea of how low some competitors can price.
    2. the demographics of target markets.
    3. the behavioral segmentation of target markets.
    4. an accurate idea of customers' willingness to pay.

15. Purchasing a competitor's product and taking it apart, studying the cost of the components, and packaging describes the process of:
    1. outsourcing.
    2. reverse engineering.
    3. insourcing.
    4. horizontal integration.

16. Which of the following statements is true regarding a direct fixed cost?
    1. The corporate jet expenditure is an example of a direct fixed cost.
    2. These costs are not associated with individual products.
    3. These costs do not vary with sales volume.
    4. These costs are spread out over many years and sometimes different products.

17. Which of the following pricing strategies is used to gain as much market share as possible?
    1. penetration pricing
    2. skimming
    3. prestige pricing
    4. competitive pricing

18. Market-skimming prices make sense under the following conditions EXCEPT if           .
    1. there is a sufficient number of buyers with a need or want for the product
    2. the unit costs of producing a small number of units is high
    3. the product is a "me-too" and contains no new technology or points of difference
    4. the small market size and/or patent protection discourages competition from entering the market

19. Identify the approach that integrates a set of products and offers them in a package that is usually lower in price than the sum of the prices of the individual components.
    1. price bundling
    2. product-line pricing
    3. complementary pricing
    4. penetration pricing

20. The senior citizen discounts given at movie theaters and quantity discounts on personal computers given to large customers are examples of:

1. 1. price bundling.
   2. complementary pricing.
   3. price discrimination.
   4. value pricing.

21. Nike has decided to sell special high quality insoles for its line of basketball tennis shoes. It has fixed costs of $6 million and unit variable costs of $5 per pair. Nike would like to earn a profit of $2 million; how many pairs must they sell at a price of $15?

A) 100,000 kits

B) 200,000 kits

C) 600,000 kits

D) 800,000 kits

22. A wine bar entrepreneur sells cases of her private-label wine for $335 per case. For an annual fee of $300, customers may also choose to enroll in a Wine Appreciation Club, which offers private tastings and entitles members to buy cases of wine for $200. What is the minimum number of cases a club member need to purchase for the membership to be economically advantageous?
    1. 1 case
    2. 2 cases
    3. 3 cases
    4. 4 cases

23. You have been told to calculate your selling price using the same markup rate as a colleague has used, if he was selling a product that had a COG of $100 and a sales price of $320 what should you charge if your COG for this other product is $30 ?

A) $60

B) $92

C) $96

D) $120

24. If there were a loophole in the law making it legal, which of the following practices would still not be a good choice for a company to use, due to possible long term damage to the brand and ethical concerns:

1. Comparative advertising showing the deficiency of a competitor’s product
2. Skimming pricing strategy
3. Price discrimination based on volume
4. Bait and switch

25. Which of the following marketing techniques is considered to be illegal?
    1. Comparative advertising showing competitor’s products
    2. Consumer differential pricing
    3. Discounts and couponing
    4. None of the above options are illegal

26. Which of the following pricing techniques is illegal in the United States?
    1. Premium pricing
    2. Bundled pricing
    3. Every Day Low Pricing
    4. Price fixing

27. Payments made to store chains for placing a product on a shelf are known as:
    1. off-invoice allowances.
    2. slotting allowances.
    3. rebates.
    4. stocking allowances.

28. When the company and the retailer share the expense of the retailer advertising the company's products in the local market, this is known as:
    1. cooperative advertising.
    2. direct advertising.
    3. missionary advertising.
    4. integrated advertising.

29. When a retailer or distributor stocks up on a product at a discount while promotion is running and then sells the inventory at regular price, the process is called:
    1. reverse buying.
    2. forward buying.
    3. seasonal buying.
    4. promotional buying.

30. Of all the trade promotions mentioned in the text, which of the following carries the most risk to the company?
    1. price-based promotion
    2. product-based promotion
    3. sales-based incentives
    4. cooperative advertising

31. Which of the following describes a business unit that negotiates purchases or sales but does not take title to the goods?
    1. retailer
    2. merchant middleman
    3. agent
    4. wholesaler

32. Identify the individual who serves as a go-between for the buyer and seller, but is not seen as a permanent representative of the buyer or seller.
    1. broker
    2. manufacturer's agent
    3. distributor
    4. retailer

33. Walmart used its investments in information technology to create direct links between its own warehouses and manufacturers, thereby eliminating the need for independent wholesalers in its system. This is an example of:
    1. reintermediation.
    2. disintermediation.
    3. hybrid system.
    4. channel conflict.

34. When does a direct channel appear to be better than an indirect channel?
    1. When product customization is important.
    2. When one-stop shopping for many products is important.
    3. When availability is important.
    4. When after-sale service is important.

35. Identify the situation where indirect channels are more useful than direct channels.
    1. When product customization is important.
    2. When after-sale service is important.
    3. When purchase orders are large.
    4. When transportation and storage are complex.

36. In order to compete with "category killer" stores, local stores must offer        to warrant customer loyalty.
    1. lower price
    2. sufficient service
    3. higher price
    4. less service

37. Which of the following statements is true about a multiple-channel system?
    1. It reduces the cost of distribution.
    2. It is a type of a direct channel where intermediaries are eliminated through the use of information technology.
    3. It simplifies coordination and management of the channel of distribution.
    4. Loss of control is a typical problem associated with a multiple-channel system.

38. A back-of-the-envelope approach to calculating lifetime customer value (LCV) is a margin "multiple," which can be used to multiply the current margin generated by each customer to estimate the LCV. This multiple is shown by the formula: r/(1 + i + r). In this formula, "r" stands for:
    1. retention rate for the product.
    2. failure rate for the firm's products.
    3. rate of return of the product by the customers.
    4. the reliability of the product.

39. Identify the correct statement about transaction buyers.
    1. They are interested in a long-term relationship with the seller.
    2. They are interested only in the particular purchase at hand.
    3. These customers are interested in the benefits of interdependency between the buyer and the seller.
    4. Their loyalty to a supplier is based on the value of maintaining a relationship with the supplier.

40. Lifetime customer value is often described as the:
    1. cost of customers switching to another brand.
    2. present value of a stream of revenue that can be produced by a customer.
    3. cost of acquiring the customer.
    4. cost of retaining the customer.

41. Loyal customers are often more     than customers who need price inducements to switch or become a new customer.
    1. price-sensitive
    2. price-insensitive
    3. critical about quality
    4. expensive

42. Which of the following statements is true regarding a customer information file (CIF)?
    1. It is considered as a key source of industry analysis.
    2. It contains purchase history of customers.
    3. It consists of a competitor database.
    4. It consists of a supplier data base.

43. With reference to the "Net Promoter" customer loyalty metric, the "Net promoter score" is calculated by:
    1. subtracting the percentage of passively satisfied customers from the percentage of promoters.
    2. subtracting the percentage of detractors from the percentage of passively satisfied customers and then adding it to the percentage of promoters.
    3. subtracting the percentage of detractors from the percentage of passively satisfied customers.
    4. subtracting the percentage of detractors from the percentage of promoters.

44. Those points of contact between the buyer and seller that are most critical to the relationship are called:
    1. impact moments.
    2. moments of truth.
    3. judgment moments.
    4. moments of impression.

45. The expected length of time a customer will remain active is known as:
    1. win-back rate.

1. 2. survival rate.
   3. lifetime duration.
   4. retention rate.

46. Which of the following is a key difference between services and manufactured products?
    1. Services do not exist until the customer buys them.
    2. Delivered value is more for manufactured products.
    3. Place and promotion are not significant in services marketing mix.
    4. Services exist even before they are sold to customers.

47.              attributes are characteristics, the quality of which can be assessed only after purchase or during consumption.
    1. Experience
    2. Search
    3. Credence
    4. Solution

48. The reason for the existence of credence attributes is that:
    1. customer lacks the expertise to make an evaluation.
    2. the products are familiar to most of the customers.
    3. the products are intangible and customers can only feel it.
    4. customers are knowledgeable and concerned about the quality of the products.

49. The haircut you get in January is different from the haircut you get in June. Which characteristic of services best describes this event?
    1. intangibility
    2. tangibility
    3. nonstandardization
    4. inseparability

50. The excitement of a classroom discussion varies with the preparation by both the instructor and student. If the students or the instructor are unprepared, the quality of the service is diminished. Which of the basic characteristics of services best describes this event?
    1. intangibility
    2. nonstandardization
    3. inseparability
    4. no physical attributes

51. Which of the following products/services is high in experience qualities?
    1. restaurant meals
    2. medical diagnosis