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Marketing Exam 3 practice

B
2. (p. 423) Regarding advertising media selection, which of the following is the best advice?
A. “There is no such thing as a must buy.”
B. “Be sure the media match your target market.”
C. “Avoid the local media.”
D. “Make sure your first media choice reaches the whole target market.”
E. “Set very general promotion objectives to stay flexible.”
C
3. (p. 417) Advertising spending
A. by U.S. corporations averages about 25 percent of their sales dollars.
B. exceeded $1.5 trillion in 2010.
C. represents only a small portion of what people pay for products.
D. in the U.S. accounts for roughly 50 percent of worldwide advertising spending.
C
9. The number of different persons or households exposed to a media schedule once during a specified time period is called:
A. ratings.
B. frequency.
C. reach.
D. peach.
Advertising Lecture, Slide 23
C
10. Separating products into grades and qualities desired by different target markets is called:
A. demand stimulation.
B. demand segmentation.
C. sorting.
D. dissorting.
E. reclassification.
Channels of Distribution Lecture, Slide 7
E
11. (p. 426) Behavioral targeting
A. tries to place ads on websites that are designed to appeal to the firm’s target market.
B. decides how the messages will reach the target audience.
C. allows advertisers to pay only when a customer clicks on the ad and links to the advertiser’s website.
D. tries to reach target customers who are actually interested in what the firm has to communicate.
E. delivers ads to consumers based on previous websites the customer has visited.
A
15. (p. 420) Many countries forbid this form of advertising.
A. Comparative advertising
B. Pioneering advertising
C. Competitive advertising
D. Reminder advertising
E. Institutional advertising
A
18. Which of the following statements is true?
A. High market share brands normally requires less advertising as a percentage of sales than do brands that have a low market share.
B. New consumer products normally do not need a great deal of advertising.
C. Competitors behavior has very little impact on most firm’s advertising budgets.
D. The less a product resembles a commodity the more the firm will have to advertise.
E. Two of the above statements are true.
Advertising lecture, Slide 8
C
20. Assume the following facts are correct. The reach of the advertisement is 60%, the cost of the advertisement is $50,000, the readership of the publication is 200,000, the impact is 4, and the frequency is 4. What is the cost per thousand of the advertisement?
A. $100
B. $200
C. $250
D. $300
E. None of the above are correct.
Advertising Lecture, Slide 25
C
23. Which of the following statements is true?
A. Sales promotion involves long term incentives to stimulate long term sales.
B. Sales promotion techniques are rarely used by non-profit organizations.
C. Advertising offers a reason to buy and sales promotion offers an incentive to buy.
D. Sales promotion techniques are closely identified with public relations activities.
E. Two of the above are correct.
Advertising Lecture, Slide 35
A
27. (p. 403) The most popular sales force payment method is:
A. a combination plan.
B. the consultative selling method.
C. straight salary.
D. straight commission.
b
34. (p. 387) Personal selling
A. is important to business firms, but only about 1 percent of the U.S. labor force does personal selling work.
B. is often a company’s largest single operating expense.
C. requires only that the sales rep have an engaging smile, a big expense account, and the ability to get along well with people.
D. None of the above are true.
a
40. (p. 431) Analysis of sales increases for measuring the effectiveness of a firm’s advertising makes the most sense with ______________ advertising.
A. direct-response
B. comparative
C. broadcast (radio and television)
D. billboard
E. institutional
a
41. (p. 440) If the promotion objective is to develop a desired positioning, which type of publicity would work best?
A. Branded services
B. Direct-to-consumer press releases
C. Customer reviews
D. Case studies
E. Facebook
a
42. (p. 270) Traditionally full service advertising agencies are paid:
A. as a function of how much advertising they place for their clients.
B. 1% of the advertiser’s total sales.
C. as a function of how much profits the advertiser makes.
D. 10% of the advertiser’s total marketing budget.
Advertising Lecture, Slide 5
b
43. (p. 418) Which of the following is the LEAST appropriate advertising objective?
A. To increase sales by 20 percent this year.
B. To improve consumer goodwill and help sell the product.
C. To increase target customers’ brand awareness by 50 percent this year.
D. To increase a brand’s market share by 10 percent.
E. To obtain 20 new accounts in the Oakland Bay area.
e
44. (p. 319) Good marketing strategy planners know that:
A. transporting costs may limit a marketing manager’s possible target markets.
B. the transporting costs for some bulky or low-value products may be greater than their manufacturing costs.
C. transporting is vital for mass distribution and modern urban life.
D. the cost of shipping some “high-value” products to users is less than 5 percent of their selling prices.
E. All of the above are true.
b
45. (p. 422) The largest share of total advertising expenditures in the United States goes for:
A. Internet advertising.
B. television and cable advertising.
C. magazine advertising.
D. direct-mail advertising.
E. radio advertising.
d
46. Which of the following is not used by a media planner to determine how to adjust the cost per thousand calculations?
A. Audience quality.
B. Attention probability.
C. Editorial quality.
D. All of the above are used by media planners.
Advertising Lecture, Slide 26
a
48. (p. 419) “Competitive advertising” tries to:
A. develop selective demand rather than primary demand.
B. keep a product’s name before the public.
C. promote the competitive products of an industry rather than a particular firm.
D. build demand for a product category.
E. create goodwill for a firm.
c
49. (p. 314) Which of the following observations about the total cost approach is NOT true?
A. Includes transportation costs.
B. Helps find the lowest total cost for the right service level.
C. Focuses on direct costs and doesn’t consider the possible costs of lost sales.
D. Uses the tools of cost accounting and economics.
E. Involves evaluating each possible physical distribution system and identifying all of the costs of each alternative.
d
50. (p. 421) “Cooperative” advertising refers to the practice of:
A. producers and intermediaries sharing in the cost of advertising that is done by the producer.
B. producers doing some advertising and expecting their intermediaries to cooperate by providing the rest of the promotion blend.
C. the producer paying for all of the advertising which is done by its intermediaries.
D. wholesalers and retailers doing advertising which is partially paid for by the producer.
E. wholesalers and retailers picking up the promotion theme of the producer and carrying it through.
a
1. Which of the following statements are correct?
A. The major disadvantage of the percentage of sales approach for determining advertising budgets is that it views promotion expenditures as the result of sales.
B. The major disadvantage of all you can afford method of determining advertising budgets is that it encourages unnecessary spending on advertising.
C. The major advantage of the percentage of sale method for determining advertising expenditures is that it may reduce the chance of advertising wars.
D. All of the above are correct.
c
3. (p. 486) A low stockturn rate
A. is extremely good for profits.
B. decreases inventory carrying cost.
C. ties up working capital.
D. is usually linked with very low markups.
E. is typical of fresh fruits and vegetables.
d
4. (p. 369) To communicate a very specific message to a very select, well-identified group of consumers, one probably should use:
A. magazines aimed at special-interest groups.
B. newspapers.
C. television.
D. integrated direct-response promotion.
E. radio.
a
14. Decoding is:
A. the reverse of encoding.
B. the reduction of noise in the channel.
C. the use of feedback to inform the sender.
D. the process of transferring an abstract idea into a set of symbols.
a
16. (p. 488) Total cost:
A. increases directly with increases in total variable cost.
B. is zero at zero output.
C. is fixed in total no matter how much is produced.
D. increases directly with increases in total fixed cost.
d
17. If a retailer purchases a product for $30.00 and charges a 20% mark-up, its selling price will be (using standard assumption with respect to the definition of a mark-up as discussed in class):
A. $36.00
B. $36.50
C. $37.00
D. $37.50
E. None of the above.
b
18. (p. 492) Given the following data, determine the break-even point in units:
Total fixed cost = $120,000
Variable cost per unit = $0.60
Selling price per unit = $1.10
A. 100,000
B. 240,000
C. 200,000
D. 218,182
E. 50,000
c
28. (p. 491) “Target return pricing”:
A. is a type of demand-oriented pricing.
B. is very different from average-cost pricing.
C. seeks to earn a percentage return on investment or a specific total dollar return.
D. guarantees that the target objective will be hit because the target return is included in the total cost.
d
29. (p. 501) If a supermarket runs an ad for a gallon of milk in the local newspaper at a price that many consumers will recognize as a low price for this product, this is an example of:
A. Reference pricing
B. Price lining
C. Bundle pricing
D. Leader pricing
E. Bait pricing
c
33. Which of the following is true concerning advertising messages?
A. Two-sided messages are normally better than one-sided messages.
B. Two-sided messages work best if the audience is not well educated.
C. Two-sided messages may be appropriate if the audience is initially opposed to the idea.
D. If a two-sided message is used, the strongest argument should come last.
b
34. The basic premise behind competitive bidding is the firm wants to:
A. maximize sales.
B. maximize expected profits.
C. maximize rigs.
D. maximize digs.
E. maximize pigs.
Pricing Tactics, Slide #24
c
38. (p. 362) To encourage potential customers to buy a recently-released book, Amazon.com provides online reviews written by others who have already read the new book. This is an example of:
A. single-customer marketing.
B. advertising.
C. publicity.
D. personal selling.
E. sales promotion.
d
45. Which of the following are requirements for differential pricing to be successful?
A. Market segmentation.
B. Buyers in low price segments must not be able to resell to buyers in higher price segments.
C. Competitors must not be able to undersell the firm in higher price segments.
D. All of the above are correct.
Pricing Tactics, Slide #18
a
46. (p. 486) A firm with a stockturn rate of 4 sells products that cost it $100,000. This requires _____ worth of inventory.
A. $25,000
B. $20,000
C. $80,000
D. $400,000
E. 50,0000
b
The text says “markups”:
A) should always be stated as a percentage of cost.
B) are a percentage of selling price–unless otherwise stated.
C) are never stated as a percentage of cost.
D) should never be stated in dollar amounts.
E)
a
A retailer pays a wholesaler $24.00 for an item and then sells it with a 25 percent markup. The retailer’s selling price is:
A) $32.00.
B) $56.00.
C) $48.00.
D) $30.00.
E) None of the above.
b
Average-cost pricing:
A) always results in a profit that is less than what was expected.
B) will work out as expected when the firm’s actual average fixed cost per unit is what was estimated when prices were set.
C) sets the price at the point where average fixed cost is equal to average variable cost.
D) ignores variable costs.
E) is the only way to ensure that the firm will set a profitable price.
d
A producer with only one product has total fixed costs of $15,000 per month. In addition, it cost the producer $100 in variable costs to produce each unit of his product (raw materials and direct labor cost). The producer charges his wholesalers $125 per unit. How many units of the product does the producer have to sell each month in order to break even?
A) 450 units
B) 500 units
C) 550 units
D) 600 units
E) 650 units
d
Which of the following statements concerning “reference prices” is FALSE?
A) A reference price is the price consumers expect to pay for an item.
B) Retailers sometimes want consumers to use the manufacturer’s list price as the reference price even though their actual retail selling price is lower.
C) Different customers may have different reference prices for the same type of purchase.
D) Leader pricing is normally used with products for which consumers do not have a specific reference price.
E) None of the above is false.
d
If a supermarket runs an ad for a gallon of milk in the local newspaper at a price that many consumers will recognize as a low price for this product, this is an example of:
A) Reference pricing
B) Price lining
C) Bundle pricing
D) Leader pricing
E) Bait pricing
a
Good Health Co. has set a suggested retail list price of $40 on its new vitamin tablets on the assumption that its target market will find the product attractive at this price. From this suggested retail list price, Good Health has subtracted its usual chain of markups for wholesalers and retailers to obtain its own selling price of $17. This is:
A) demand-backward pricing.
B) full-line pricing.
C) average-cost pricing.
D) odd-even pricing.
E) prestige pricing.
e
Regarding “full-line pricing,” which of the following statements is TRUE?
A) A good marketing manager usually tries to price products in a line so that the prices will seem logically related and make sense to target customers.
B) The marketing manager should try to cover all costs on the whole product line.
C) Most customers seem to feel that prices in a product line should be somewhat related to cost.
D) Not all companies that make a line of products must use full-line pricing.
E) All of the above are true.
c
When Walgreens Drugstore advertises one price for the cost of a roll of film and the cost of processing it, it is using:
A) complementary product pricing.
B) flexible pricing.
C) product-bundle pricing.
D) a one-price policy.
E) bait pricing.
d
Total advertising expenditures by 2010:
A) were about 15 percent of all firms’ sales.
B) were larger in Europe than in the U.S.
C) were larger in Asia than in the U.S.
D) were more than $200 billion.
E) were under $25 billion.
d
U.S. corporations spend about ________ percent of their sales on advertising.
A) 25
B) 35
C) 15
D) 2.5
E) 7.5
b
An ad which offers the consumer $1.00 off on his next grocery store visit is most likely aimed at:
A) arousing desire
B) obtaining action.
C) getting attention.
D) holding interest.
E) none of the above.
b
In recent years:
A) specialists in media buying have disappeared.
B) there has been growing interest in paying agencies based on the results they actually produce.
C) almost all advertising agencies have switched to the full-service approach.
D) conflicts between creative and business-oriented advertising people have almost disappeared due to acceptance of the marketing concept.
E) more ad agencies have been adopting the 15 percent commission system.
a
Trion, Inc. recently spent $1,000,000 on newspaper advertising and obtained a 30 percent increase in sales. Which of the following is TRUE regarding Trion’s advertising effectiveness?
A) It’s hard to evaluate the ad’s effectiveness because the sales increase was the result of Trion’s whole marketing mix–not just its advertising.
B) It is not possible to measure the effectiveness of Trion’s advertising.
C) Trion’s advertising effectiveness should be evaluated by how many potential customers were exposed to the ads.
D) Trying to measure the effectiveness of Trion’s advertising is not possible unless the ads were pretested.
E) Trion’s ads produced a very effective increase in sales.
e
In the 2009 Nielsen online survey of over 25,000 Internet consumers from 50 countries, what percentage of respondents said they trusted recommendations from people they knew?
A) 50 percent
B) 60 percent
C) 70 percent
D) 80 percent
E) 90 percent
c
A music lover emailed a friend and proclaimed “You must see this video!” The email included a link to a YouTube performance by a relatively unknown British singer. What type of communication is this?
A) Must buy
B) Reminder
C) Pass-along
D) Pioneering
E) Persuading
a
Apple has a magnificent glass-enclosed multilevel store in Boston with a Genius Bar staffed with techies who are very knowledgeable about its products. Customers who have purchased an Apple product (iPad, iPhone, iPod, MacPro, etc.) can make an appointment with a Genius and get personalized information and repair services on the spot. This type of retail shop is an example of a:
A) branded service.
B) reminder service.
C) pioneering service.
D) competitive service.
E) comparative service.
c
When Intuit, a tax and financial planning software company, created a Web site where its QuickBooks customers could interact about problems facing their small businesses, this was an example of a(n):
A) branded service.
B) blog.
C) online community.
D) case study.
E) webinar.
c
The response rate to a survey affects:
A) who is in the population for a marketing research study.
B) whether a statistical package can be used to analyze the data.
C) how representative the sample is.
D) All of the above are good answers.
E) None of the above is a good answer.
a
Which of the following is NOT a good example of the observation method of marketing research?
A) The manager of a supermarket occasionally walks through the store to see what customers are doing.
B) A drugstore installs optical scanners at its checkout counters.
C) The owner of a shopping center puts a counting device at the entrance to count how many cars come in.
D) A store manager studies videotapes of consumers shopping in the store.
E) All of the above are good examples of observation research.
c
Data which have already been collected in a previous study are called __________ data, while data that are generated by a phone survey this month of key customers are called _______ data.
A) primary; secondary
B) primary; intranet
C) secondary; primary
D) secondary; experimental
E) intranet; sample
b
The first thing a marketing manager should do if one of his firm’s products drops in sales volume is:
A) conduct a survey to see what is wrong.
B) define the problem.
C) set research priorities.
D) do a situation analysis.
E) interview representative customers.
d
Which of the following is most consistent with the scientific method approach to marketing research discussed in the text?
A) “We continually survey our customers because the results give us good ideas for hypotheses.”
B) “Once we interpret the data, we can define our problem.”
C) “Our research is as precise as possible–because we want to be 100 percent accurate.”
D) “Sometimes the answers from the early stages of the research process are good enough so we stop the research and make our decisions.”
E) None of the above is true.
b
Marketing research:
A) usually requires complex statistical techniques, so marketing managers should leave planning of the research to the research specialists.
B) is likely to be more effective when guided by the strategy planning framework.
C) should gather as much information as possible.
D) begins by analyzing the situation.
E) All of the above are true.
c
An outside sales force can provide customers with up-to-date inventory levels, product prices, delivery dates, and so forth by accessing information on the firm’s own:
A) marketing model.
B) marketing dashboard.
C) intranet.
D) JIT system.
E) EDI system.
c
A complete marketing information system:
A) provides a good overall view on many types of problems, but usually cannot provide answers to specific questions.
B) eliminates the need for “one-shot” marketing research projects.
C) is organized to continually gather data from internal and external sources, including market research studies.
D) is usually too complicated for the marketing manager to use without help from data processing specialists.
E) All of the above are true.
d
When getting information for marketing decisions, the marketing manager:
A) can benefit from new developments in computer networks and software.
B) should have access to ongoing information about business performance.
C) may need to make some decisions based on incomplete information.
D) All of the above are true.
E) None of the above is true.
b
Marketing research:
A) should be planned by research specialists who understand research techniques better than marketing managers.
B) is needed to keep marketing managers in touch with their markets.
C) consists mainly of survey design and statistical techniques.
D) is only needed by producers who have long channels of distribution.
E) All of the above
b
“Promotion” is MAINLY concerned with:
A) obtaining a favorable corporate image.
B) telling the target market that the right Product is available in the right Place at the right Price.
C) obtaining maximum publicity–at the lowest cost.
D) informing the public about the firm’s offerings to maximize sales.
E) getting people to buy a firm’s product–even when it isn’t needed.
Feedback:
c
To encourage potential buyers to purchase a ticket to its upcoming concert, a rock band posts a YouTube video of an earlier performance on the Web site of its next performance. This is an example of:
A) single-customer marketing.
B) advertising.
C) publicity.
D) personal selling.
E) sales promotion.
d
Point-of-purchase materials, coupons, trade shows, calendars, merchandising aids, and sales training materials are all examples of:
A) publicity.
B) advertising.
C) mass selling.
D) sales promotion.
E) personal selling.
b
Southwest Airlines’ “Ding” widget pops up on your computer desktop to let you know of lower fares to cities you want to visit. This is an example of a(n) _________ promotion objective.
A) Persuading
B) Reminding
C) Informing
D) Pioneering
d
The AIDA model consists of four promotion jobs:
A) getting Attention, building Intrigue, arousing Desire, and obtaining Action
B) becoming Aware, holding Interest, arousing Desire, and providing Assistance
C) getting Attention, holding Interest, creating Demand, and obtaining Action
D) getting Attention, holding Interest, arousing Desire, and obtaining Action
E) becoming Aware, holding Interest, arousing Desire, and obtaining Action
a
BMW places a TV ad for its new 7-series sedan in the highly-rated Academy Awards program. In the traditional communication model, BMW is the:
A) Source
B) Decoder
C) Receiver
D) Message channel
b
Which of the following best illustrates communication “noise”?
A) A TV ad is recorded at a higher volume than is used for most TV shows.
B) A motorist doesn’t hear a radio ad because she is being stopped by a police officer for speeding.
C) A political candidate rides through town in a car with a loud speaker–asking pedestrians to vote for her.
D) Magazine sales reps telephone consumers to offer low-price subscriptions.
E) A Pepsi ad that has rap music in the background.
d
Good marketing managers know that:
A) a major advantage of personal selling is that noise can be eliminated.
B) noise in the communication process improves promotion effectiveness.
C) the trustworthiness of the source does not affect how receivers evaluate a message.
D) different audiences may interpret a message differently.
E) All of the above are true.
e
What medium is appropriate for integrated direct-response promotion?
A) telephone
B) interactive video
C) print
D) e-mail
E) any of the above might be appropriate
a
Gillette spent $100 million in its first year of advertising for a new type of razor and blades. All of its advertising was directed at final consumers in the hope that these consumers would go to retailers and ask for the product by name. This is an example of:
A) Pulling
B) AIDA
C) Encoding
D) Pushing
E) Decoding

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