Marketing: Creating and Capturing Customer Value

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Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
Principles of Marketing, 14e (Kotler)
Chapter 1 Marketing: Creating and Capturing Customer Value
1) All of the following are accurate descriptions of modern marketing EXCEPT which one?
A) Marketing is the creation of value for customers.
B) Marketing is managing profitable customer relationships.
C) Selling and advertising are synonymous with marketing.
D) Marketing involves satisfying customers' needs.
E) Marketing is used by for-profit and not-for-profit organizations.
Answer: C
Diff: 2
Page Ref: 4-5
Skill: Concept
Objective: 1-1
2) According to management guru Peter Drucker, "The aim of marketing is to ________."
A) create customer value
B) identify customer demands
C) make selling unnecessary
D) set realistic customer expectations
E) sell products
Answer: C
Diff: 2
Page Ref: 5
Skill: Concept
Objective: 1-1
3) ________ is defined as a social and managerial process by which individuals and
organizations obtain what they need and want through value creation and exchange.
A) Selling
B) Advertising
C) Bartering
D) Marketing
E) Negotiating
Answer: D
Diff: 2
Page Ref: 5
Skill: Concept
Objective: 1-1
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
4) Which steps of the five-step marketing process are about understanding customers, creating
customer value, and building strong customer relationships?
A) the first two only
B) the first three only
C) the first four only
D) the last three only
E) the last four only
Answer: C
Diff: 2
Page Ref: 5
Skill: Concept
Objective: 1-1
5) According to the simple five-step model of the marketing process, a company needs to
________ before designing a customer-driven marketing strategy.
A) determine how to deliver superior value
B) build profitable relationships with customers
C) use customer relationship management to create full partnerships with key customers
D) understand the marketplace and customer needs and wants
E) construct key components of a marketing program
Answer: D
Diff: 2
Page Ref: 5
Skill: Concept
Objective: 1-1
6) ________ are human needs as shaped by individual personality and culture.
A) Needs
B) Wants
C) Demands
D) Values
E) Exchanges
Answer: B
Diff: 1
Page Ref: 6
Skill: Concept
Objective: 1-2
7) When backed by buying power, wants become ________.
A) social needs
B) demands
C) physical needs
D) self-esteem needs
E) exchanges
Answer: B
Diff: 1
Page Ref: 6
Skill: Concept
Objective: 1-2
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
8) A(n) ________ is some combination of products, services, information, or experiences offered
to consumers to satisfy a need or want.
A) market offering
B) value proposition
C) demand satisfaction
D) need proposition
E) evoked set
Answer: A
Diff: 1
Page Ref: 6
Skill: Concept
Objective: 1-2
9) Which of the following refers to sellers being preoccupied with their own products and losing
sight of underlying consumer needs?
A) selling myopia
B) marketing management
C) value proposition
D) marketing myopia
E) the product concept
Answer: D
Diff: 1
Page Ref: 7
Skill: Concept
Objective: 1-2
10) When marketers set low expectations for a market offering, the biggest risk they run is
________.
A) disappointing loyal customers
B) decreasing customer satisfaction
C) failing to attract enough customers
D) failing to understand their customers' needs
E) incorrectly identifying a target market
Answer: C
Diff: 2
Page Ref: 7
Skill: Concept
Objective: 1-2
11) ________ is the act of obtaining a desired object from someone by offering something in
return.
A) Valuation
B) Exchange
C) Bribery
D) Value creation
E) Donation
Answer: B
Diff: 1
Page Ref: 7
Skill: Concept
Objective: 1-2
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
12) A(n) ________ is the set of actual and potential buyers of a product.
A) market
B) audience
C) group
D) segment
E) exchange
Answer: A
Diff: 1
Page Ref: 7
Skill: Concept
Objective: 1-2
13) Consumer research, product development, communication, distribution, pricing, and service
are all core ________ activities.
A) exchange
B) marketing
C) management
D) production
E) customer relationship management
Answer: B
Diff: 1
Page Ref: 7
AACSB: Communication Abilities
Skill: Concept
Objective: 1-2
14) The art and science of choosing target markets and building profitable relationships with
them is called ________.
A) marketing management
B) positioning
C) segmentation
D) selling
E) differentiation
Answer: A
Diff: 1
Page Ref: 8
Skill: Concept
Objective: 1-3
15) Selecting which segments of a population of customers to serve is called ________.
A) market segmentation
B) positioning
C) customization
D) target marketing
E) managing the marketing effort
Answer: D
Diff: 2
Page Ref: 8
Skill: Concept
Objective: 1-3
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
16) Which of the following is the set of benefits a company promises to deliver to customers to
satisfy their needs?
A) a money-back guarantee
B) low pricing
C) customer service
D) a value proposition
E) an attribute
Answer: D
Diff: 2
Page Ref: 9
Skill: Concept
Objective: 1-3
17) Which customer question is answered by a company's value proposition?
A) "Why should I buy your brand rather than a competitor's?"
B) "How does your brand benefit society?"
C) "What are the costs and benefits of your brand?"
D) "What kind of experience will I have with products and services associated with this brand?"
E) "What are the benefits of being a loyal consumer of your brand?"
Answer: A
Diff: 3
Page Ref: 9
Skill: Concept
Objective: 1-3
18) Which of the following marketing management orientations focuses primarily on improving
efficiencies along the supply chain?
A) production concept
B) product concept
C) selling concept
D) marketing concept
E) societal marketing concept
Answer: A
Diff: 2
Page Ref: 9
Skill: Concept
Objective: 1-3
19) Which of the following marketing management concepts is most likely to lead to marketing
myopia?
A) customer-driven marketing
B) customer-driving marketing
C) societal marketing
D) marketing
E) product
Answer: E
Diff: 2
Page Ref: 9
Skill: Concept
Objective: 1-3
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
20) According to the production concept, consumers will favor products that are ________ and
________.
A) satisfying; quality focused
B) advertised; affordable
C) in high demand; hard to find
D) segmented; convenient
E) available; affordable
Answer: E
Diff: 2
Page Ref: 9
Skill: Concept
Objective: 1-3
21) The ________ concept is aligned with the philosophy of continuous product improvement
and the belief that customers will choose products that offer the most in quality, performance,
and innovative features.
A) product
B) production
C) customer
D) marketing
E) promotion
Answer: A
Diff: 1
Page Ref: 9
Skill: Concept
Objective: 1-3
22) The product concept says that a company should do which of the following?
A) improve marketing of its best products
B) market only those products with high customer appeal
C) focus on the target market and make products that meet those customers' demands
D) focus on making continuous product improvements
E) make promoting products the top priority
Answer: D
Diff: 2
Page Ref: 9
Skill: Concept
Objective: 1-3
23) "Build a better mousetrap and the world will beat a path to your door" reflects the ________
concept.
A) production
B) marketing
C) selling
D) product
E) target marketing
Answer: D
Diff: 2
Page Ref: 9
Skill: Concept
Objective: 1-3
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
24) Which marketing orientation calls for aggressive promotional efforts and focuses on
generating transactions to obtain profitable sales?
A) marketing concept
B) production concept
C) product concept
D) selling concept
E) societal marketing concept
Answer: D
Diff: 1
Page Ref: 10
Skill: Concept
Objective: 1-3
25) Which marketing orientation holds that achieving organizational goals depends on knowing
the needs and wants of target markets and delivering the desired satisfactions better than
competitors do?
A) product concept
B) production concept
C) selling concept
D) marketing concept
E) societal marketing concept
Answer: D
Diff: 1
Page Ref: 10
Skill: Concept
Objective: 1-3
26) According to the authors of your text, the ________ concept is a "sense and respond"
philosophy rather than a "make and sell" philosophy.
A) product
B) production
C) marketing
D) retailing
E) societal marketing
Answer: C
Diff: 2
Page Ref: 10
Skill: Concept
Objective: 1-3
27) A firm that uses the selling concept takes a(n) ________ approach.
A) outside-in
B) passive
C) inside-out
D) societal
E) customer service
Answer: C
Diff: 2
Page Ref: 10
Skill: Concept
Objective: 1-3
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
28) Herb Kelleher of Southwest Airlines used the marketing concept in his successful
organization. Having a customer department rather than a marketing department, as suggested by
Kelleher, is an example of a(n) ________ perspective.
A) outside-in
B) external
C) inside-out
D) continuous improvement
E) traditional
Answer: A
Diff: 2
Page Ref: 10
Skill: Concept
Objective: 1-3
29) Though often criticized, the selling concept is particularly appropriate and effective with
which of the following types of products?
A) convenience
B) shopping
C) specialty
D) unsought
E) demarketed
Answer: D
Diff: 2
Page Ref: 10
Skill: Concept
Objective: 1-3
30) Which of the following reflects the marketing concept philosophy?
A) "We don't have a marketing department; we have a customer department."
B) "We're in the business of making and selling superior products."
C) "We build them so you can buy them."
D) "When it's profits versus customers' needs, profits will always win out."
E) "You won't find a better deal anywhere."
Answer: A
Diff: 3
Page Ref: 10
Skill: Concept
Objective: 1-3
31) Customer-driven marketing usually works well when ________ and when customers
________.
A) a clear need exists; are difficult to identify
B) customers know what they want; are loyal to the brand
C) a firm can deliver the goods desired; are thoroughly researched
D) a clear need exists; know what they want
E) a need exists; don't know what they want
Answer: D
Diff: 3
Page Ref: 10
Skill: Concept
Objective: 1-3
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
32) Marie Ortiz enjoys her work at Futuristic Designs, Inc. Her organization understands and
anticipates customer needs even better than customers themselves do and creates products and
services to meet current and future wants and demands. Marie's firm practices ________
marketing.
A) customer-driven
B) customer-driving
C) relationship
D) societal
E) social
Answer: B
Diff: 2
Page Ref: 11
Skill: Concept
Objective: 1-3
33) When customers don't know what they want or don't even know what's possible, the most
effective strategy is ________ marketing.
A) customer-driven
B) customer-driving
C) societal
D) production
E) product
Answer: B
Diff: 2
Page Ref: 11
Skill: Concept
Objective: 1-3
34) The societal marketing concept seeks to establish a balance between consumer short-run
wants and consumer ________.
A) short-run costs and profits
B) short-run ethics
C) long-run welfare
D) immediate health
E) value propositions
Answer: C
Diff: 1
Page Ref: 11
Skill: Concept
Objective: 1-3
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
35) Which marketing orientation holds that firms must strive to deliver value to customers in a
way that maintains or improves the consumer's and society's well-being?
A) marketing concept
B) selling concept
C) product concept
D) societal marketing concept
E) equity concept
Answer: D
Diff: 1
Page Ref: 11
AACSB: Ethical Understanding and Reasoning Abilities
Skill: Concept
Objective: 1-3
36) The three areas of consideration that should be balanced in the societal marketing concept
are consumer wants, society's interests, and ________.
A) human welfare
B) want satisfaction
C) company profits
D) short-run wants
E) long-term needs
Answer: C
Diff: 2
Page Ref: 11
AACSB: Ethical Understanding and Reasoning Abilities
Skill: Concept
Objective: 1-3
37) The set of marketing tools a firm uses to implement its marketing strategy is called the
________.
A) promotion mix
B) product mix
C) marketing mix
D) TQM
E) marketing effort
Answer: C
Diff: 2
Page Ref: 12
Skill: Concept
Objective: 1-3
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
38) Building, keeping, and growing profitable relationships by delivering customer value and
satisfaction is called ________.
A) customer lifetime value
B) customer perceived value
C) customer relationship management
D) database marketing
E) societal marketing
Answer: C
Diff: 1
Page Ref: 12
Skill: Concept
Objective: 1-4
39) Of the following, which is the most important concept of modern marketing?
A) customer relationship management
B) e-mail advertising
C) mass marketing
D) properly trained sales people
E) low prices
Answer: A
Diff: 2
Page Ref: 12
Skill: Concept
Objective: 1-4
40) You have just taken a new position in an organization and you're learning about the job
functions of your new colleagues. You observe that your marketing manager is heavily involved
in the process of building and maintaining profitable customer relationships. Your marketing
manager frequently speaks about the need to acquire, keep, and grow customers. Your manager
is concerned with which one of the following?
A) customer divestment
B) customer-managed relationships
C) the societal marketing concept
D) partner relationship management
E) customer relationship management
Answer: E
Diff: 2
Page Ref: 13
Skill: Concept
Objective: 1-4
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
41) Customer-perceived value is determined by a customer's ________ of the benefits and costs
of a market offering relative to those of competing offers.
A) personal assessment
B) rational expectations
C) accurate assessment
D) objective evaluation
E) emotional understanding
Answer: A
Diff: 2
Page Ref: 12
Skill: Concept
Objective: 1-4
42) It is most accurate to say that customers buy from stores and firms that offer which of the
following?
A) the highest value for the dollar
B) the highest customer-perceived value
C) the highest level of customer satisfaction
D) the most attractive company image
E) the most concern for society's interests
Answer: B
Diff: 3
Page Ref: 12
Skill: Concept
Objective: 1-4
43) The key to delivering customer satisfaction is to match ________ with ________.
A) company performance; the competition's performance
B) company performance; competitive prices
C) relationship building; performance tools
D) company performance; unique products
E) customer expectations; product performance
Answer: E
Diff: 2
Page Ref: 13
Skill: Concept
Objective: 1-4
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
44) Which of the following is the term for customers who make repeat purchases and tell others
about their positive experiences with a product or service?
A) barnacles
B) customer evangelists
C) butterflies
D) full partners
E) social customers
Answer: B
Diff: 2
Page Ref: 13
AACSB: Communication Abilities
Skill: Concept
Objective: 1-4
45) Which of the following strategies would a company most likely use to increase customer
satisfaction?
A) decreasing the variety of offered services
B) divesting
C) lowering prices
D) "firing" unprofitable customers
E) limiting customer experiences with a brand
Answer: C
Diff: 3
Page Ref: 15
Skill: Concept
Objective: 1-4
46) You are an assistant marketing director for a firm in a market with many low-margin
customers. What type of relationship would be most profitable for you to develop with these
customers?
A) full partnerships
B) basic relationships
C) basic partnerships
D) club programs
E) selective relationships
Answer: B
Diff: 2
Page Ref: 15
Skill: Concept
Objective: 1-4
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
47) A room upgrade offered by a hotel to a guest who often stays in the hotel is an example of a
________.
A) frequency marketing program
B) basic customer relationship
C) club marketing program
D) partner relationship management technique
E) structural benefit
Answer: A
Diff: 2
Page Ref: 15
Skill: Concept
Objective: 1-4
48) Pete Sanchez, a recent graduate of business school, has a different approach than his
marketing manager, who believes in keeping customers at arm's length and using mass media
advertising. Pete knows that today few successful firms still practice true ________.
A) club marketing
B) frequency marketing
C) mass marketing
D) customer satisfaction
E) market segmentation
Answer: C
Diff: 2
Page Ref: 16
Skill: Concept
Objective: 1-4
49) Which of the following has NOT contributed to the deeper, more interactive nature of today's
customer relationships?
A) e-mail
B) Web sites
C) online social networks
D) traditional advertising
E) video sharing
Answer: D
Diff: 2
Page Ref: 17
AACSB: Use of Information Technology
Skill: Concept
Objective: 1-4
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
50) Which of the following best explains why consumers have greater power and control in
today's marketplace?
A) The production concept and competition have lowered prices.
B) Implementation of the product concept has resulted in continually improving products.
C) Customer-driven marketing creates products and services that meet customers' future needs.
D) More companies are implementing societal marketing and weighing long-term costs and
benefits.
E) Through new communication technologies, customers have more access to information and
more methods of sharing their opinions with other customers.
Answer: E
Diff: 3
Page Ref: 17
AACSB: Use of Information Technology
Skill: Concept
Objective: 1-4
51) The marketing world is embracing ________ because consumers can wield greater power
and control in the marketplace through communication technologies.
A) partner relationship management
B) supply chain management
C) customer-managed relationships
D) market segmentation
E) target marketing
Answer: C
Diff: 2
Page Ref: 17
Skill: Concept
Objective: 1-4
52) Greater consumer control means that companies must rely more on marketing by ________
than by ________.
A) interruption; involvement
B) attraction; intrusion
C) socialization; information
D) producing; selling
E) inspiration; competition
Answer: B
Diff: 2
Page Ref: 17
AACSB: Communication Abilities
Skill: Concept
Objective: 1-4
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
53) Which of the following is an example of consumer-generated marketing?
A) Toyota's presence in online communities
B) Nike's Nike Plus running Web site
C) MasterCard's use of "Priceless" commercials shot by customers
D) Neiman Marcus's InCircle Rewards program for its best customers
E) The Lexus Covenant aimed at creating customer delight
Answer: C
Diff: 2
Page Ref: 18
AACSB: Communication Abilities
Skill: Concept
Objective: 1-4
54) Partner relationship management focuses on working with ________ to bring more value to
customers.
A) partners inside and outside of the company
B) competitors
C) consumers
D) interest groups
E) partners outside of the company only
Answer: A
Diff: 2
Page Ref: 19
Skill: Concept
Objective: 1-4
55) In today's world, marketing should be done by ________ employees in an organization.
A) only marketing
B) only marketing, sales, and customer-support
C) only sales and technology
D) only management and marketing
E) all
Answer: E
Diff: 2
Page Ref: 19
Skill: Concept
Objective: 1-4
56) Through ________, many companies today are strengthening their connections to all
partners, from providers of raw materials to components to final products that are delivered to
final buyers.
A) supply chain management
B) direct marketing
C) partnership relationship marketing
D) customized marketing
E) equity marketing
Answer: A
Diff: 2
Page Ref: 19
Skill: Concept
Objective: 1-4
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
57) Suzie Chan strengthens her company's connections by treating suppliers of raw materials,
vendors, and distributors as partners in delivering customer value. What type of management is
she practicing?
A) outside partnering
B) inside partnering
C) marketing
D) supply chain
E) customer development
Answer: D
Diff: 2
Page Ref: 19
Skill: Concept
Objective: 1-4
58) The final step in the marketing process is ________.
A) capturing value from customers
B) creating customer loyalty
C) creating customer lifetime value
D) understanding the marketplace
E) designing a customer-driven marketing strategy
Answer: A
Diff: 1
Page Ref: 20
Skill: Concept
Objective: 1-4
59) Stew Leonard, the owner of a highly successful regional supermarket chain, reacts adversely
to losing a single customer sale. He feels that this amounts to losing the entire stream of future
purchases that a customer is likely to make if she remains in the area. Stew Leonard's concern is
an illustration of which of the following?
A) share of customer
B) market share
C) partner relationship management
D) customer lifetime value
E) market share maintenance
Answer: D
Diff: 2
Page Ref: 20
Skill: Concept
Objective: 1-4
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
60) When an airline goes after a "share of travel" from its customers, it is attempting to increase
________.
A) partner equity
B) share of customer
C) profit margins
D) customer-managed relationships
E) customer ownership
Answer: B
Diff: 2
Page Ref: 21
Skill: Concept
Objective: 1-4
61) Beyond simply retaining good customers, marketers want to constantly increase their "share
of customer." What does this mean in marketing terms?
A) Marketers want to increase their market share.
B) Marketers want to increase the share they get of the customer's purchasing in their product
categories.
C) Marketers want to increase the profit margin with this target market.
D) Marketers want to continuously increase their customers' levels of satisfaction.
E) Marketers want to turn satisfied customers into delighted customers.
Answer: B
Diff: 2
Page Ref: 21
Skill: Concept
Objective: 1-4
62) ________ is one of the best ways to increase share of customer.
A) Targeting new customers
B) Using bait and switch
C) Cross-selling
D) Divesting
E) Partnership marketing
Answer: C
Diff: 2
Page Ref: 21
Skill: Concept
Objective: 1-4
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
63) Amazon.com leverages relationships with its 35 million customers by offering them music,
videos, gifts, toys, consumer electronics, and office products, among other items. Based on
previous purchase history, the company recommends related CDs, books, videos, or other
products that might interest a customer. This most directly helps Amazon.com capture a greater
________.
A) partner value
B) share of customer
C) profit margin
D) social network
E) customer loyalty
Answer: B
Diff: 2
Page Ref: 21
Skill: Concept
Objective: 1-4
64) Which of the following is the total combined customer lifetime values of all a company's
current and potential customers?
A) share of customer
B) customer lifetime value
C) customer equity
D) profitability
E) share of market
Answer: C
Diff: 1
Page Ref: 21
Skill: Concept
Objective: 1-4
65) The ultimate aim of customer relationship management is to produce ________.
A) customer equity
B) market share
C) sales volume
D) a reliable database
E) higher profit margins
Answer: A
Diff: 3
Page Ref: 21
Skill: Concept
Objective: 1-4
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
66) A potentially highly profitable, short-term customer is a ________.
A) true friend
B) butterfly
C) stranger
D) barnacle
E) true believer
Answer: B
Diff: 2
Page Ref: 22
Skill: Concept
Objective: 1-4
67) Customers can be classified into four relationship groups, according to their profitability and
projected loyalty. Which type of customers have the highest profit potential and strong loyalty?
A) barnacles
B) strangers
C) butterflies
D) true friends
E) big fish
Answer: D
Diff: 2
Page Ref: 22
Skill: Concept
Objective: 1-4
68) Afia, a team leader in charge of customer relationship management, is planning strategies for
improving the profitability of her firm's least profitable but loyal customers. She is also
examining methods for "firing" customers in this group who cannot be made profitable. To
which of the following customer relationship groups do these customers belong?
A) butterflies
B) true friends
C) strangers
D) barnacles
E) short-term customers
Answer: D
Diff: 2
Page Ref: 22
Skill: Concept
Objective: 1-4
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
69) Since the beginning of the Great Recession, marketers have been emphasizing the ________
of their products more than ever.
A) image
B) value
C) personality
D) safety
E) uniqueness
Answer: B
Diff: 2
Page Ref: 23
Skill: Concept
Objective: 1-5
70) Which of the following has been the most common consumer response to the economic
downturn that began in 2008?
A) spending more on luxury items
B) discontinuing any spending on luxury items
C) spending less and choosing products more carefully
D) spending less but choosing products less carefully
E) saving more but spending more on credit cards
Answer: C
Diff: 2
Page Ref: 24
Skill: Concept
Objective: 1-5
71) Which of the following is a true statement about the Great Recession that began in 2008?
A) The economic crisis caused a short-term change in consumers' spending habits.
B) The average home value increased after the stock market plunge.
C) Decreasing energy prices provided consumers with unexpected savings.
D) Consumers brought spending more in line with their incomes.
E) Consumers quickly regained confidence in the economy.
Answer: D
Diff: 2
Page Ref: 24
Skill: Concept
Objective: 1-5
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
72) Which of the following statements about the Internet is most accurate?
A) Companies are cautiously using the Internet to build closer relationships with customers and
marketing partners alike.
B) After the dot-com meltdown of 2000, fewer consumers are buying products and services
online.
C) The Internet makes it easy for consumers to view, interact with, and create marketing content.
D) Consumer e-commerce looks promising, but business-to-business e-commerce is declining.
E) Web 2.0 involves a less balanced approach to online marketing than the original dot-com
boom did.
Answer: C
Diff: 2
Page Ref: 26
AACSB: Use of Information Technology
Skill: Concept
Objective: 1-5
73) Which version of the Web has introduced small, fast, and customizable applications that can
be accessed through multifunction mobile devices?
A) Web 1.0
B) Web 2.0
C) Web 3.0
D) Web 4.0
E) Web 5.0
Answer: C
Diff: 2
Page Ref: 26
AACSB: Use of Information Technology
Skill: Concept
Objective: 1-5
74) Which of the following is currently the fastest-growing form of marketing?
A) consumer-generated marketing
B) online marketing
C) mass media marketing
D) societal marketing
E) word-of-mouth marketing
Answer: B
Diff: 3
Page Ref: 27
AACSB: Use of Information Technology
Skill: Concept
Objective: 1-5
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
75) As part of the rapid globalization of today's economy, companies are selling more locally
produced goods in international markets and ________.
A) taking a local view of their industry
B) purchasing more supplies abroad
C) reducing competition within their industry
D) downplaying concerns for social responsibility
E) competing solely in traditional marketplaces
Answer: B
Diff: 2
Page Ref: 27
AACSB: Dynamics of the Global Economy
Skill: Concept
Objective: 1-5
76) Which of the following is most essential to any definition of marketing?
A) demand management
B) the production concept
C) customer relationships
D) making a sale
E) making a profit
Answer: C
Diff: 2
Page Ref: 5
AACSB: Reflective Thinking Skills
Skill: Application
Objective: 1-1
77) Greg Williams now has the buying power to purchase the computer system he has wanted for
the last six months. Greg's want now has become a(n) ________.
A) need
B) necessity
C) demand
D) exchange
E) transaction
Answer: C
Diff: 2
Page Ref: 6
AACSB: Analytic Skills
Skill: Application
Objective: 1-2
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
78) Cathy's Clothes is a small retail chain successfully selling women's clothing and accessories
with a profitable focus on buyers who have relatively modest means. This is an example of
________.
A) convenience
B) social marketing
C) societal marketing
D) target marketing
E) value packing
Answer: D
Diff: 2
Page Ref: 8
AACSB: Analytic Skills
Skill: Application
Objective: 1-3
79) An organic farmer has identified three distinct groups who might be interested in his
products: vegetarians, people who are concerned about chemicals in their foods, and people who
consider themselves innovators and trendsetters. These three groups are examples of ________.
A) marketing mixes
B) market segments
C) value propositions
D) mass markets
E) marketing intermediaries
Answer: B
Diff: 2
Page Ref: 8
AACSB: Analytic Skills
Skill: Application
Objective: 1-3
80) Jolene's firm markets preplanning services for a mortician. She finds that most of her target
market wants to avoid discussing their future funeral needs, and she must somehow first get their
attention. Jolene's firm most likely practices the ________.
A) production concept
B) marketing concept
C) selling concept
D) social marketing concept
E) societal marketing concept
Answer: C
Diff: 2
Page Ref: 10
AACSB: Reflective Thinking Skills
Skill: Application
Objective: 1-3
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
81) Henry Ford's philosophy was to perfect the Model-T so that its cost could be reduced further
for increased consumer affordability. This reflects the ________ concept.
A) product
B) production
C) selling
D) marketing
E) societal marketing
Answer: B
Diff: 2
Page Ref: 9
AACSB: Analytic Skills
Skill: Application
Objective: 1-3
82) Railroads were once operated based on the thinking that users wanted trains rather than
transportation, overlooking the challenge of other modes of transportation. This reflects the
________ concept.
A) product
B) production
C) selling
D) marketing
E) societal marketing
Answer: A
Diff: 3
Page Ref: 10
AACSB: Analytic Skills
Skill: Application
Objective: 1-3
83) Some fast-food restaurants offer tasty and convenient food at affordable prices, but in doing
so they contribute to a national obesity epidemic and environmental problems. These fast-food
restaurants overlook the ________ philosophy.
A) marketing concept
B) product concept
C) production concept
D) societal marketing concept
E) selling concept
Answer: D
Diff: 2
Page Ref: 11
AACSB: Reflective Thinking Skills
Skill: Application
Objective: 1-3
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
84) FedEx offers its customers fast and reliable package delivery. When FedEx customers weigh
these benefits against the monetary cost of using FedEx along with any other costs of using the
service, they are acting upon ________.
A) loyalty
B) relationship marketing
C) customer-perceived value
D) social relationships
E) a societal marketing campaign
Answer: C
Diff: 3
Page Ref: 12
AACSB: Analytic Skills
Skill: Application
Objective: 1-4
85) Sally purchased Brand X lotion. In comparing her perception of how the lotion made her
skin feel and look to her expectations for Brand X lotion, Sally was measuring her level of
________.
A) share of customer
B) customer satisfaction
C) customer equity
D) demand
E) customer lifetime value
Answer: B
Diff: 3
Page Ref: 13
AACSB: Analytic Skills
Skill: Application
Objective: 1-4
86) The Niketown running club that organizes twice weekly evening runs and follow-up
meetings in the Nike Store is an example of which of the following?
A) a frequency marketing program
B) a basic customer relationship
C) a club marketing program
D) a partner relationship
E) a structural benefit provided for top customers
Answer: C
Diff: 2
Page Ref: 15
AACSB: Analytic Skills
Skill: Application
Objective: 1-4
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
87) Elisandra, a marketing manager at a regional chain restaurant, has decided to sponsor a
contest calling for customers to create commercials for the restaurant. Winning entries will be
posted on the organization's home page. Elisandra's plan is an example of ________.
A) consumer-generated marketing
B) partner relationship management
C) customer lifetime value
D) community development around a brand
E) customer divestment
Answer: A
Diff: 2
Page Ref: 18
AACSB: Analytic Skills
Skill: Application
Objective: 1-4
88) Kao Corp., which makes Ban deodorant, invited teenage girls to make an ad that would
encourage other girls to buy the product. This program is an example of ________.
A) societal marketing
B) the production concept
C) the selling orientation
D) partner relationship management
E) consumer-generated content
Answer: E
Diff: 2
Page Ref: 18
AACSB: Analytic Skills
Skill: Application
Objective: 1-5
89) At Gina's Nails, the posted policy is "Without our customers, we don't exist." Gina and her
staff aim to delight each customer, and they are quick to offer discounts or extra services
whenever a customer is anything less than satisfied. Gina and her staff strive to make every
customer a repeat customer. It is most accurate to say that instead of focusing on each individual
transaction, Gina and her staff put a priority on ________.
A) partner relationship management
B) enlisting customer evangelists
C) attracting "butterflies"
D) converting "strangers"
E) capturing customer lifetime value
Answer: E
Diff: 3
Page Ref: 20
AACSB: Reflective Thinking Skills
Skill: Application
Objective: 1-4
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
90) Ben & Jerry's challenges all stakeholders, including employees, top management, and even
ice cream scoopers in their stores, to consider individual and community welfare in their
day-to-day decisions. Actions such as this by companies seizing the opportunity to do well by
doing good reflects ________.
A) environmentalism
B) social responsibility
C) profit marketing
D) partnership management
E) myopia
Answer: B
Diff: 2
Page Ref: 27
AACSB: Analytic Skills
Skill: Application
Objective: 1-5
91) A church targeting different demographic groups to increase attendance is an example of
________.
A) for-profit marketing
B) not-for-profit marketing
C) societal marketing
D) customer evangelism
E) caring capitalism
Answer: B
Diff: 2
Page Ref: 28
AACSB: Analytic Skills
Skill: Application
Objective: 1-5
92) Your state's department of education has budgeted a significant amount of money for a radio,
print, television, and online advertising campaign emphasizing the long-term benefits, both
educationally and professionally, of reading every day. This is an example of a(n) ________
campaign.
A) ethical
B) social marketing
C) for-profit
D) consumer-generated
E) differentiated
Answer: B
Diff: 2
Page Ref: 29
AACSB: Analytic Skills
Skill: Application
Objective: 1-5
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
93) Which of the following is the most likely result of a marketing strategy that attempts to serve
all potential customers?
A) All customers will be delighted.
B) Customer-perceived value will increase.
C) Customer evangelists will become unpaid salespersons for the service or product.
D) Not all customers will be satisfied.
E) The company will need to follow up with a service campaign.
Answer: D
Diff: 2
Page Ref: 8
AACSB: Reflective Thinking Skills
Skill: Critical Thinking
Objective: 1-3
94) Which of the following reflects the marketing concept?
A) "The supplier is king."
B) "Marketing should be viewed as foraging and not gardening."
C) "This is what I make; won't you please buy it?"
D) "This is what I want; won't you please make it?"
E) "Customers need to be told where they want to go."
Answer: D
Diff: 3
Page Ref: 10
AACSB: Reflective Thinking Skills
Skill: Critical Thinking
Objective: 1-3
95) In which of the following situations has a company most actively embraced
customer-managed relationships?
A) American Airlines awards frequent flyer points to returning customers.
B) Paige Premium Denim jeans provide a superior quality and a perfect fit.
C) iRobot invites enthusiastic Roomba owners to develop and share their own programs and uses
for the company's robotic vacuum.
D) Best Buy distinguishes between its best customers, called angels, and its less profitable
customers, called demons, stocking merchandise to appeal to separate groups of its angels.
E) Toyota develops a marketing presence on social networks and other online communities.
Answer: C
Diff: 3
Page Ref: 17
AACSB: Reflective Thinking Skills
Skill: Critical Thinking
Objective: 1-4
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
96) When the economy tightens, customer loyalty and customer retention become ________ for
marketers.
A) more important
B) less important
C) impossible
D) long-term but not short-term goals
E) short-term but not long-term goals
Answer: A
Diff: 2
Page Ref: 21
AACSB: Reflective Thinking Skills
Skill: Critical Thinking
Objective: 1-4
Refer to the scenario below to answer the following questions.
Carol Veldt, owner of Seagull Terrace, watched her investment grow from a small, seaside motel
to a thriving year-round resort in just a few years. Atop a bluff overlooking the Maine coast,
Seagull Terrace had attracted thousands of visits during the summer months, but then faced a
tremendous downturn in business during the winter months. "But, given the industry in the
nearby towns, very little year-round competition, and our close proximity to Portland," Carol
added, "I couldn't understand why seasonality had to hit Seagull Terrace so hard!"
So Carol spent her first winter devising a new marketing plan. She put together a promotional
package designed to attract business travelers year-round. Carol's plan, then, involved a seasonal
promotional gimmick-to be implemented from early winter to late spring-that would attract the
same numbers as the large summer crowd. Her idea worked! During her second winter, Carol
greeted numerous business travelers-both satisfied repeat guests as well as new guests who had
been snagged by her promotional appeals.
"We still have a long way to go," Carol admitted. "Our delicatessen offers delicious entrees, but
we'd like to expand that. We provide health club privileges off-site, but we'd like to eventually
provide our own. These are goals I hope to achieve in a few years. Our first project, however,
included a renovation of our guest rooms and I'm quite proud of the results." Carol then added,
"Actually there are so many possibilities. With an indoor pool area, I will eventually offer
weekend get-aways throughout winter."
97) Which of the following groups is specifically part of Seagull Terrace's target market?
A) seasonal business travelers
B) young families
C) retirees
D) summer campers
E) athletes
Answer: A
Diff: 2
Page Ref: 8
AACSB: Analytic Skills
Skill: Application
Objective: 1-3
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
98) Carol Veldt's use of "promotional gimmicks" is an example of the ________ concept.
A) selling
B) marketing
C) product
D) production
E) societal marketing
Answer: A
Diff: 2
Page Ref: 10
AACSB: Analytic Skills
Skill: Application
Objective: 1-4
99) Renovations of the guest rooms at the Seagull Terrace and plans to add an indoor pool area
are examples of the ________ concept.
A) selling
B) marketing
C) product
D) production
E) societal marketing
Answer: C
Diff: 2
Page Ref: 10
AACSB: Analytic Skills
Skill: Application
Objective: 1-4
100) Carol Veldt has decided to ask selected guests to participate in an extensive survey about
their experience at Seagull Terrace and about their most desired amenities and vacation
experiences. By implementing the suggestions she receives from guests, Carol would be
following the ________ concept.
A) production
B) product
C) selling
D) marketing
E) societal
Answer: D
Diff: 2
Page Ref: 10
AACSB: Analytic Skills
Skill: Application
Objective: 1-4
101) Marketing is managing profitable customer relationships.
Answer: TRUE
Diff: 1
Page Ref: 4
Skill: Concept
Objective: 1-1
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
102) Human needs are shaped by culture and individual personality.
Answer: FALSE
Diff: 2
Page Ref: 6
Skill: Concept
Objective: 1-2
103) The difference between human needs and wants is that needs are not influenced by
marketers.
Answer: TRUE
Diff: 2
Page Ref: 6
Skill: Concept
Objective: 1-2
104) When backed by buying power, needs become wants.
Answer: FALSE
Diff: 2
Page Ref: 6
Skill: Concept
Objective: 1-2
105) Market offerings are limited to physical products.
Answer: FALSE
Diff: 2
Page Ref: 6
Skill: Concept
Objective: 1-2
106) When sellers focus on existing needs and lose sight of underlying customer wants, they
suffer from marketing myopia.
Answer: FALSE
Diff: 3
Page Ref: 7
Skill: Concept
Objective: 1-2
107) Only sellers of products, services, and ideas practice marketing; buyers do not.
Answer: FALSE
Diff: 2
Page Ref: 7
Skill: Concept
Objective: 1-2
108) Market segmentation is the process of seeking fewer customers and reduced demand for
profit maximization only.
Answer: FALSE
Diff: 2
Page Ref: 8
Skill: Concept
Objective: 1-3
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
109) The selling concept holds that consumers will not buy enough of the firm's products unless
it undertakes a large-scale selling and promotion effort.
Answer: TRUE
Diff: 1
Page Ref: 10
Skill: Concept
Objective: 1-3
110) Your department holds that achieving organizational goals depends on knowing the needs
and wants of target markets and delivering the desired satisfaction better than competitors do.
Your department is practicing the selling concept.
Answer: FALSE
Diff: 2
Page Ref: 10
Skill: Concept
Objective: 1-3
111) The societal marketing concept calls on marketers to balance consumer wants and desires,
company profits, and society's interests.
Answer: TRUE
Diff: 2
Page Ref: 11
AACSB: Ethical Understanding and Reasoning Abilities
Skill: Concept
Objective: 1-3
112) The marketing mix includes production, price, promotion, and packaging; they are known
as the four Ps of marketing.
Answer: FALSE
Diff: 2
Page Ref: 12
Skill: Concept
Objective: 1-3
113) For most marketers, customer relationship management (CRM) is exclusively a matter of
customer data management.
Answer: FALSE
Diff: 2
Page Ref: 12
AACSB: Use of Information Technology
Skill: Concept
Objective: 1-4
114) Customer-perceived value is defined as the customer's evaluation of the perceived
difference between all the benefits and all the costs of a marketing offer relative to those of
competing offers.
Answer: TRUE
Diff: 1
Page Ref: 12
Skill: Concept
Objective: 1-4
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
115) Value has different meanings to and is perceived differently by different consumers.
Answer: TRUE
Diff: 2
Page Ref: 13
Skill: Concept
Objective: 1-4
116) Many companies now use customer profitability analysis to identify and weed out
unprofitable customers.
Answer: TRUE
Diff: 2
Page Ref: 16
AACSB: Use of Information Technology
Skill: Concept
Objective: 1-4
117) Customer-managed relationships are marketing relationships that are initiated by and
controlled by customers, not by marketers.
Answer: FALSE
Diff: 2
Page Ref: 17
Skill: Concept
Objective: 1-4
118) Consumer-generated marketing has yet to have much impact as a marketing force.
Answer: FALSE
Diff: 2
Page Ref: 19
AACSB: Use of Information Technology
Skill: Concept
Objective: 1-4
119) To increase its "share of customer," a firm concentrates on retaining as many customers as
possible over their lifetimes.
Answer: FALSE
Diff: 2
Page Ref: 21
Skill: Concept
Objective: 1-4
120) Web 1.0 connected people with information, and Web 2.0 is connecting people to
multifunction mobile devices.
Answer: FALSE
Diff: 2
Page Ref: 26
AACSB: Use of Information Technology
Skill: Concept
Objective: 1-5
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
121) An experience such as a vacation can be defined as a market offering.
Answer: TRUE
Diff: 2
Page Ref: 6
AACSB: Analytic Skills
Skill: Application
Objective: 1-2
122) Amy's law office has developed a new format and wording for wills. The staff believes they
offer the most in quality, performance, and innovative features. Her law office is practicing the
production concept.
Answer: FALSE
Diff: 3
Page Ref: 10
AACSB: Analytic Skills
Skill: Application
Objective: 1-3
123) The production concept and product concept are orientations that are more likely to lead to
marketing myopia than the marketing concept and the societal marketing concept are.
Answer: TRUE
Diff: 3
Page Ref: 9-10
AACSB: Reflective Thinking Skills
Skill: Synthesis
Objective: 1-3
124) Fast Food, Inc. views marketing as the science and art of finding, retaining, and growing
profitable customers by providing them with the food they want. Fast Food, Inc. practices
societal marketing.
Answer: FALSE
Diff: 2
Page Ref: 11
AACSB: Analytic Skills
Skill: Application
Objective: 1-3
125) Large-scale marketing approaches that foster two-way customer relationships are made
possible by new communication technologies.
Answer: TRUE
Diff: 2
Page Ref: 17
AACSB: Use of Information Technology
Skill: Critical Thinking
Objective: 1-4
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
126) Briefly compare and contrast the concepts of needs, wants, and demands, giving an
example of each. Discuss how these concepts relate to marketing practices.
Answer: Human needs are states of felt deprivation. Needs are part of the human makeup; they
are not created by external forces. Humans have a basic physical need for food, clothing,
warmth, and safety; a basic social need for belonging and affection; and a basic individual need
for knowledge and self-expression. Unlike needs, wants are not innate; instead, wants are needs
shaped by culture, society, and individual personality. For example, an American needs food but
wants a Big Mac and a soft drink. An American with ten dollars needs food, wants a Big Mac
and soft drink, and demands lunch at McDonald's. Wants become demands when they are
backed by consumers' buying power. Marketers conduct extensive research to understand
customers' wants and demands. They then attempt to fulfill customers' wants and demands
through their market offerings.
Diff: 2
Page Ref: 6
AACSB: Reflective Thinking Skills
Skill: Synthesis
Objective: 1-2
127) In a short essay, explain how and why marketers go beyond selling a product or service to
create brand experiences.
Answer: Sellers are most effective when they focus more on the benefits and experiences
produced by their products and services than on the specific products and services themselves.
Smart marketers focus on creating a brand experience, incorporating several products and
services for their customers. By doing so, marketers hope to increase customer satisfaction,
creating a body of customers who will repeatedly purchase their market offerings and
recommend those offerings to friends.
Diff: 2
Page Ref: 7
AACSB: Reflective Thinking Skills
Skill: Application
Objective: 1-2
128) Compare the selling and marketing concepts, listing the key components of each
philosophy.
Answer: The selling concept reflects an inside-out philosophy, while the marketing concept
takes an outside-in perspective. The selling concept is typically practiced when an organization is
marketing products or services that buyers do not normally think of purchasing, such as
insurance or blood donation. Aggressive selling focuses on creating sales transactions rather than
building long-term relationships with customers, with the aim of selling what the company
makes rather than making what the customer wants. The marketing concept, on the other hand, is
based upon identifying the needs and wants of target markets and then satisfying those needs and
wants better than competitors do. In contrast to the selling concept, marketing focuses on the
customer, not the product, as the path to profits.
Diff: 2
Page Ref: 10
AACSB: Reflective Thinking Skills
Skill: Application
Objective: 1-3
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
129) Briefly explain the societal marketing concept. Give an example of an organization that has
effectively used the societal marketing concept.
Answer: According to this concept, firms will succeed if they take underlying consumer needs
and society's well-being into account over the long term. A pure marketing concept can damage
consumers' long-run welfare by focusing exclusively on satisfying consumers' short-run wants.
Over a long period of time, this too-narrow focus can be damaging to the company. In setting
their marketing strategies, marketers today need to balance company profits, consumer wants,
and society's interests. UPS has a mission that stresses economic prosperity, social responsibility,
and environmental stewardship. The company proactively seeks opportunities to act responsibly
and efficiently. For example, UPS works to make its operations "green" and supports employees
volunteering in their communities.
Diff: 2
Page Ref: 11
AACSB: Ethical Understanding and Reasoning Abilities
Skill: Synthesis
Objective: 1-3
130) Define Customer Relationship Management and explain its associated tools and levels of
relationships.
Answer: Customer Relationship Management (CRM) is the process of building and
maintaining profitable customer relationships by delivering superior customer value and
satisfaction. A company with mostly low-margin customers is likely to seek basic relationships,
using brand-building advertising and sales promotion. An organization with few customers and
high margins, on the other hand, will work to create full partnerships with key customers. To
create stronger bonds with customers, some marketers use tools such as financial benefits or
rewards based on frequency of purchase. Other tools include social benefits, like offering key
customers the opportunity to network and create communities through club marketing programs.
To retain current customers and remain profitable, companies today are going beyond
transactional marketing to customer relationship management. The key is to create and sustain
relationships for the long term.
Diff: 3
Page Ref: 12-15
AACSB: Reflective Thinking Skills
Skill: Application
Objective: 1-4
131) Explain why the aim of customer relationship management is to create not just customer
satisfaction, but also customer delight.
Answer: Customer satisfaction cannot be taken for granted. Because brand loyalty is dependent
upon strong customer satisfaction, companies strive to retain, satisfy, and even delight current
customers. Firms create customer delight by promising only what they can deliver and then
delivering more than what they promised. They also create emotional relationships with key
customers. Delighted customers make repeated purchases and become customers for life. More
importantly, they also essentially become an unpaid sales force for the firm as "customer
evangelists" who tell other potential customers about their positive experiences with the product.
Diff: 2
Page Ref: 12-13
AACSB: Reflective Thinking Skills
Skill: Critical Thinking
Objective: 1-4
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
132) In a short essay, discuss the challenges and advantages of new communication technologies
for marketers as they work to build relationships with their customers.
Answer: Through the Internet and related technologies, people can now interact in direct and
surprisingly personal ways with large groups of others, from neighbors within a local community
to people across the world. With communication technologies such as e-mail, blogs, Web sites,
online communities, and online social networks, today's marketers incorporate interactive
approaches that help build targeted, two-way customer relationships. Marketers can create
deeper consumer involvement and a sense of community surrounding a brand, making a brand a
meaningful part of consumers' conversations and lives. However, while new communication
tools create relationship-building opportunities for marketers, they also create challenges. They
give consumers a greater voice, and therefore greater power and control in the marketplace. In
fact, the marketing world is beginning to embrace customer-managed relationships. Today's
consumers have more information about brands than ever before, and they have a wealth of
platforms for airing and sharing their brand views with other consumers. This benefits companies
when views of its products are positive, but can be damaging when customers share stories of
negative experiences with a company's products.
Diff: 2
Page Ref: 17-18
AACSB: Use of Information Technology
Skill: Application
Objective: 1-5
133) Define customer equity and explain how a company can increase it.
Answer: Customer equity is the sum of the lifetime values of all a company's current and
potential customers. Customer equity is dependent upon customer loyalty from a firm's profitable
customers. Because customer equity is a reflection of a company's future, companies must
manage it carefully, viewing customers as assets that need to be maximized. To increase
customer equity, companies should work to delight their customers and establish full
relationships with their most profitable customers.
Diff: 2
Page Ref: 21
AACSB: Reflective Thinking Skills
Skill: Application
Objective: 1-4
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
134) In a short essay, describe and compare the four types of customers classified by their
potential profitability to an organization. Explain how an organization should manage each type
of customer.
Answer: The four types of customers are strangers, butterflies, true friends, and barnacles.
"Strangers" have low potential profitability and loyalty. A company's offerings do not fit well
with a stranger's wants and demands. Companies should not invest in building a relationship with
this type of customer. Another type of customer in which a company should not invest is the
"barnacle." Barnacles are highly loyal but not very profitable because there is a limited fit
between their needs and the company's offerings. The company might be able to improve
barnacles' profitability by selling them more, raising their fees, or reducing service to them.
However, if they cannot be made profitable, they should be "fired." Like strangers, "butterflies"
are not loyal. However, they are potentially profitable because there is a good fit between the
company's offerings and their needs. Like real butterflies, this type of customer will come and go
without becoming a permanent, loyal consumer of a company's products. Companies should use
promotional blitzes to attract these customers, create satisfying and profitable transactions with
them, and then cease investing in them until the next time around. The final type of customers is
"true friends"; they are both profitable and loyal. There is a strong fit between their needs and the
company's offerings, so the company should make continuous relationship investments in an
effort to go beyond satisfying and to delight these customers. A company should try to convert
true friends into customer evangelists who tell others about their good experiences with the
company.
Diff: 3
Page Ref: 22
AACSB: Reflective Thinking Skills
Skill: Critical Thinking
Objective: 1-4
135) Explain how the Internet has transformed the way in which we do business today.
Answer: The Internet links individuals and businesses of all types to each other. The Internet
allows firms access to exciting new marketspaces. In addition to the click-only dot-coms,
traditional "brick-and-mortar" companies of the past are now "click-and-mortar" companies, with
online presences aimed at attracting new customers and strengthening bonds with current
customers. Approximately 75% of American Internet users now shop online, making a Web
presence a necessity for any organization. With Web 3.0, the virtual world goes everywhere with
us on multifunction mobile devices. Because consumers are always connected, business must be
as well.
Diff: 2
Page Ref: 26
AACSB: Use of Information Technology
Skill: Application
Objective: 1-5
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
136) What should sellers consider if they wish to avoid marketing myopia?
Answer: Sellers should consider the particular benefits and experiences desired by their
customers, and not just pay attention to the specific products they offer.
Diff: 2
Page Ref: 7
AACSB: Reflective Thinking Skills
Skill: Application
Objective: 1-2
137) You are a manufacturer of tents, sleeping bags, and outdoor cooking equipment. How might
you go about creating brand experiences for your customers?
Answer: Such manufacturers should focus on the benefits enjoyed through the use of their
products, such as access to the great outdoors, shared family experiences, and relived memories
of the consumer's youth.
Diff: 2
Page Ref: 7
AACSB: Reflective Thinking Skills
Skill: Synthesis
Objective: 1-2
138) Think about suppliers and other marketing partners. A modern marketing system relies on
profitable relationships all along the way. How might Walmart rely on its marketing partners in
order to offer low prices?
Answer: Walmart must rely on suppliers that will consistently provide quality merchandise at
low costs.
Diff: 2
Page Ref: 8
AACSB: Reflective Thinking Skills
Skill: Application
Objective: 1-2
139) The marketing team at Bead Beautiful, a line of jewelry targeted at preteen girls, is meeting
to formulate the products' value proposition. What should team members consider as they define
a value proposition for Bead Beautiful?
Answer: In considering Bead Beautiful's value proposition, the marketing team should identify
the benefits and values the company promises to deliver to customers to satisfy their needs. The
value proposition should differentiate Bead Beautiful from other similar products, answering the
customer's question "Why should I buy this brand rather than a competitor's?"
Diff: 2
Page Ref: 9
AACSB: Reflective Thinking Skills
Skill: Critical Thinking
Objective: 1-3
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
140) When demand for Beanie Babies was at its highest, manufacturers purposefully maintained
strong demand by limiting supply, which drove the price of Beanie Babies up. Compare the
actions of these manufacturers to the production concept.
Answer: The production concept holds that consumers favor products that are available and
affordable. According to this concept, manufacturers work to increase production and improve
manufacturing efficiency. Beanie Babies manufacturers purposefully limited production, making
their products less available and less affordable, a technique that contradicts the philosophy of
the production concept.
Diff: 3
Page Ref: 9
AACSB: Reflective Thinking Skills
Skill: Critical Thinking
Objective: 1-3
141) Company X carries organizational and office supplies and follows the selling concept.
Explain how Company X may lose sight of customer relationships with their marketing
orientation.
Answer: The company's aim is to sell its supplies rather than make what the market wants;
such a strategy creates sales transactions but not long-term relationships. The company's likely
faulty assumption is that customers who are persuaded to buy the product will like it or that they
will buy the product again even if they weren't really initially satisfied. Company X will not
foster customer loyalty with this approach.
Diff: 2
Page Ref: 10
AACSB: Reflective Thinking Skills
Skill: Application
Objective: 1-3
142) In nineteenth-century Dublin, Molly Malone sold cockles and mussels while shouting to
passers-by, "alive-alive-oh." Was Molly taking an outside-in or inside-out perspective? Explain.
Answer: The vendor's approach was inside-out. The cockles and mussels are available. The
vendor's job was then to attract willing buyers.
Diff: 3
Page Ref: 10
AACSB: Reflective Thinking Skills
Skill: Synthesis
Objective: 1-3
143) Explain why electronics and pharmaceuticals manufacturers may use customer-driving
marketing.
Answer: In such industries, consumers do not know exactly what new products are available;
therefore, consumers rely on such firms to tell them what they need.
Diff: 2
Page Ref: 11
AACSB: Reflective Thinking Skills
Skill: Application
Objective: 1-3
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
144) Explain how storing customer information in a database might better prepare car-maker
Saturn in customer relationship management (CRM).
Answer: Managing detailed information about customers may allow Saturn to design new
models around customer demographics and desires for specific features. These "touch points"
can be the key to long-term customer loyalty.
Diff: 3
Page Ref: 12
AACSB: Reflective Thinking Skills
Skill: Application
Objective: 1-4
145) What determines whether sellers pursue basic relationships or full partnerships with
customers?
Answer: The type of relationship a seller seeks to create with its customers is dependent on the
number of customers and their profitability. A company with many low-margin customers
develops basic relationships; a company with just a few high-margin customers invests resources
to create full partnerships.
Diff: 2
Page Ref: 16
AACSB: Reflective Thinking Skills
Skill: Critical Thinking
Objective: 1-4
146) How can a marketer increase "share of customer"?
Answer: The marketer can offer greater variety to customers; in addition, the marketer can
train employees to cross-sell and up-sell in order to market more products and services to
existing customers.
Diff: 2
Page Ref: 21
AACSB: Reflective Thinking Skills
Skill: Application
Objective: 1-4
147) Explain what marketers can expect from individuals in the customer relationship group
classified as "butterflies."
Answer: "Butterflies" are profitable but not loyal. Marketers should enjoy this type of customer
"for the moment" because they soon flutter off. Marketers should create profitable and satisfying
transactions with "butterflies," then cease investing in them until the next time around. Marketers
can expect transactions with butterflies when conditions are optimal for the customer, but they
should not expect butterflies to become loyal customers.
Diff: 2
Page Ref: 22
AACSB: Reflective Thinking Skills
Skill: Application
Objective: 1-4
Full file at http://testbanksite.eu/Principles-of-Marketing-14th-Edition-Test-Bank
148) Able works in the marketing department of an international company. In what ways might
Able use modern technologies to conduct market research in order to learn more about and better
serve his company's customers?
Answer: Able could use videoconferencing to monitor customer focus groups discussing the
company's products and services in various locations. Able could use online data services to
learn more about the needs and wants of his customers, or he could create a customer database
for the company to target individual customers with tailored offers.
Diff: 2
Page Ref: 26
AACSB: Use of Information Technology
Skill: Application
Objective: 1-5
149) In what ways might even a local retailer find itself touched by global competition?
Answer: A local retailer might have global suppliers and customers. The retailer's goods may
come from abroad, or components of those goods may be produced or assembled abroad. In
addition, a local retailer may also sell goods over the Internet to international customers.
Diff: 2
Page Ref: 27
AACSB: Dynamics of the Global Economy
Skill: Application
Objective: 1-5
150) How is marketing being applied in the not-for-profit sector?
Answer: Firms in the not-for-profit sector use marketing to enhance their images, to encourage
donor marketing to attract memberships and donors, and to design social marketing campaigns to
encourage specific causes.
Diff: 2
Page Ref: 28
AACSB: Reflective Thinking Skills
Skill: Application
Objective: 1-5

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