Multiple Choice

1. The brand personality of a new product is characterized as having the trait of

________ if promotional messages consistently portray the product as being
reliable, imaginative, and successful.
a. sincerity
b. excitement
c. competence
d. sophistication
e. ruggedness
Answer: c

2. ________ is the study of how individuals, groups, and organizations select, buy, use,
and dispose of goods, services, ideas, or experiences to satisfy their needs and wants.
a. Target marketing
b. Psychographic segmentation
c. Psychology
d. Consumer behavior
a. Product differentiation
Answer: d

3. The fundamental determinant of a person’s wants and behavior is the person’s

________.
a. psyche
b. national origin
c. culture
d. peer group
e. family tree
Answer: c

4. A child growing up in the United States is exposed to all of the following values
EXCEPT ________.
a. achievement and success
b. activity
c. efficiency and practicality
d. the importance of the group in daily life
e. freedom
Answer: d
5. Which of the following would be the best illustration of a subculture?
a. A religion.
b. A group of close friends.
c. Your university.
d. A fraternity or sorority.
e. Your occupation.
Answer: a

6. With respect to facts about the American consumer, which of the following consumer
electronics is owned by the vast majority of consuming households with a 93 percent
reporting ownership?
a. A personal computer.
b. TiVo DVR.
c. A cellular phone.
d. A microwave oven.
e. A VCR.
Answer: e

7. ________ is defined as being relatively homogeneous and enduring divisions in a

society, which are hierarchically ordered and whose members share similar values,
interests, and behavior.
a. Culture
b. Subculture
c. Social class
d. The family
e. A group
Answer: c

8. Social classes show distinct product and brand preferences in all the following
areas EXCEPT ________.
a. clothing
b. home furnishings
c. leisure activities
d. automobiles
e. fast food
Answer: e

9. A person’s ________ consist(s) of all the groups that have a direct (face-to-face) or
indirect influence on his/her attitudes or behavior.
a. culture
b. subculture
c. psychographics
d. reference groups
e. demographics
Answer: d
10. A(n) ________ group is one whose values or behavior an individual rejects.
a. aspirational
b. disassociative
c. membership
d. primary
e. procreational
Answer: b
11. If a direct mail marketer wished to direct promotional efforts toward the family of
________, efforts need to be directed toward parents and siblings of the family
members.
a. orientation
b. procreation
c. immediacy
d. intimacy
e. reference

Answer: a

12. Expected to account for a quarter of the U.S. population by 2050, ________ are the
fastest growing minority.
a. African Americans
b. Asian Americans
c. Hispanic Americans
d. European Americans
e. Arabic Americans

Answer: c

13. The dominant cohort, with respect to families, for the next fifty years may very well
be the ________ cohort.
a. married-couple household
b. single adults
c. single seniors
d. married seniors
e. married-couples with parents living with them
Answer: b

14. Husbands and wives display different decision-making roles in most families. The
trend for dominant decision making in families is for ________ to be responsible for
most of the decisions.
a. the husband
b. the wife
c. joint decision making (both husband and wife)
d. holistic decision making
e. child-oriented decision making
Answer: c
15. The Disney Channel has become the company’s cash cow for its ability to reach the
underserved ________ market—8- to 14-year-olds.
a. teen
b. twixt
c. mid-
d. tween
e. young adult
Answer: d

16. People choose products that reflect and communicate their role and actual or desired
________ in society.
a. group
b. status
c. attitudes
d. beliefs
e. feelings
Answer: b

17. Consumption may be shaped by ________ (such as marriage, childbirth, or divorce).

a. the psychological life cycle
b. the product life cycle
c. the life/death life cycle
d. post-puberty cycles
e. critical life events or transitions

Answer: e

18. Product choice is greatly affected by economic circumstances. All of the following
would be among those circumstances EXCEPT ________.
a. spendable income
b. savings and assets
c. debts
d. occupation
e. borrowing power
Answer: d

19. ________ is a set of distinguishing human psychological traits that lead to relatively
consistent and enduring responses to environmental stimuli.
a. Image
b. Personality
c. Beliefs
d. Heredity
e. Culture
Answer: b
20. When the Marlboro Man was depicted in advertising as a rugged outdoor, tough
cowboy type, this was done to establish what is called a ________.
a. trademark
b. brand name
c. brand personality
d. psychological approach to advertising
e. brand reference
Answer: c

21. ________ portrays the “whole person” interacting with his or her environment.
a. Attitude
b. Reference group
c. Lifestyle
d. Culture
e. Subculture
Answer: c

22. Consumers today are experiencing a time famine because of their busy lifestyles. One
way to avoid the difficulties of time famine, which is of particular interest to
marketers, is ________.
a. to set fewer goals
b. to multitask
c. to give in to personal burdens
d. to report frustration to management
e. to develop a callous attitude toward marketers
Answer: b

23. With respect to understanding consumer behavior, there are four key psychological
processes. All of the following would be among those processes EXCEPT
________.
a. motivation
b. perception
c. learning
d. self-reliance
e. memory
Answer: d

24. A ________ when it is aroused to a sufficient level of intensity.

a. need becomes a motive
b. motive becomes a need
c. desire becomes a reality
d. unfulfilled demand becomes a crisis
e. personal demand exceeds the ability to rationally reject
Answer: a
25. ________ assumed that the psychological forces shaping people’s behavior are
largely unconscious, and that a person cannot fully understand his or her own
motivations.
a. Abraham Maslow
b. Frederick Herzberg
c. Sigmund Freud
d. John Cacioppo
e. Karl Marx
Answer: c

26. Frederick Herzberg developed a ________ that distinguishes

dissatisfiers and satisfiers.
a. trait-role theory
b. psychological constraint theory
c. probability scale
d. leadership model
e. two-factor theory
Answer: e

27. At the top of Maslow’s hierarchy of needs (shown as a pyramid in the text) are
________ needs.
a. esteem
b. self-actualization
c. social
d. safety
e. physiological
Answer: b

28. It has been estimated that the average person is exposed to over ________ ads or
brand communications a day.
a. 1,500
b. 1,300
c. 1,000
d. 800
e. 500
Answer: a

29. ________ is the tendency to interpret information in a way that will fit our
preconceptions.
a. Selective retention
b. Cognitive dissonance
c. Selective distortion
d. Subliminal perception
e. Discrimination
Answer: c
30. A cigarette ad has a picture of a young man laying on his back and dreamily looking
at clouds in the sky. Though not readily obvious to the casual reader, there is a
message in the clouds that says “r-e-l-a-x.” This would be an example of which of
the following?
a. Selective distortion
b. Cognitive dissonance
c. Selective retention
d. Subliminal perception
e. Short-term memory
Answer: d

31. A ________ is a strong internal stimulus impelling action.

a. cue
b. drive
c. reinforcement
d. discrimination
e. belief
Answer: b

32. ________ teaches marketers that they can build demand for a product by associating
it with strong drives, using motivating cues, and providing positive reinforcement
a. Demand theory
b. Learning theory
c. Economic theory
d. Psychological theory
e. Demographic theory
Answer: b

33. As Rita scans the yellow pages section of her phone book looking for a florist, she
sees several others products and services advertised. Though interesting on first
glance, she quickly returns to her primary task of finding a florist. The items that
distracted her from her search were most likely stored in which of the following
types of memory?
a. Short-term memory
b. Long-term memory
c. Middle memory
d. Subconscious memory
e. Subliminal memory
Answer: a
34. Brand associations consist of all the brand-related thoughts, feelings, perceptions,
images, experiences, beliefs, attitudes, and so on that become linked to the brand
________.
a. stimulus
b. link
c. connection
d. personality
e. node
Answer: e

35. In general, the more attention placed on the meaning of information during
________, the stronger the resulting associations in memory will be.
a. encoding
b. decoding
c. classification
d. retrieval
e. memorization
Answer: a

36. Repeated exposures to information provide greater opportunity for processing and
thus the potential for ________.
a. more profits
b. more sales
c. stronger associations
d. increased brand personality
e. more one-to-one relationships
Answer: c

37. Cognitive psychologists believe that memory is ________, so that once information
becomes stored in memory, its strength of association decays very slowly.
a. very limited
b. somewhat limited
c. fluid
d. often reflective
e. extremely durable
Answer: e

38. The five-stage model of the consumer buying process includes all of the following
stages EXCEPT ________.
a. problem recognition
b. information search
c. social interaction
d. purchase decision
e. influencer
Answer: c
39. The buying process starts when the buyer recognizes a _________.
a. product
b. an advertisement for the product
c. a salesperson from a previous visit
d. problem or need
e. an internal cue
Answer: d

40. Which of the following is considered to be a more advanced form of information

search wherein the person might phone friends or go online to secure information
about a product or service?
a. Heightened attention
b. Short-term memory processing
c. Subliminal processing of information
d. Long-term memory processing
e. Active information search
Answer: e

41. Of key interest to marketers are the major informational sources to which the
consumer will turn and the relative importance of each. Which of the following
would be considered to be an experiential information source?
a. Consumer-rating organizations.
b. The mass media.
c. Acquaintances.
d. Web sites.
e. Using the product itself.
Answer: e

42. Which of the following is considered to be biggest single source of consumer

information from a commercial source (over 40 percent of car buyers use this source
to gather information)?
a. The U.S. Chamber of Commerce
b. J.D. Power & Associates
c. Consumer Reports
d. The Better Business Bureau
e. Underwriter’s Laboratory
Answer: c

43. Brands that meet consumers’ initial buying criteria are called the ________.
a. total set
b. awareness set
c. consideration set
d. choice set
e. decision set
Answer: c
44. With respect to consumer decision making, the ________ is the set of strong
contenders from which one will be chosen as a supplier of a good or service.
a. total set
b. awareness set
c. consideration set
d. choice set
e. decision set
Answer: d

45. A(n) ________ is a descriptive thought that a person holds about something.
a. attitude
b. belief
c. desire
d. feeling
e. emotion
Answer: b

46. A(n) ________ puts people into a frame of mind: liking or disliking an object,
moving toward or away from it.
a. attitude
b. belief
c. feeling
d. position
e. stance
Answer: a

47. The expectancy-value model of attitude formation posits that consumers evaluate
products and services by combining their ________.
a. needs
b. wants
c. desires
d. brand beliefs
e. consuming attitudes
Answer: d

48. All of the following would be considered to be strategies for approaching consumers
who had rejected your company’s model of a product for another competitive brand
EXCEPT ________.
a. redesign your company’s product
b. alter beliefs about your company’s brand
c. covertly alter the qualitative data about your product
d. alter beliefs about competitors’ brands
e. call attention to neglected attributes
Answer: c
49. Customer value analysis reveals the company’s strengths and weaknesses relative to
various competitors. Which of the following would be considered to be the first step
in this process?
a. Monitor customer values over time.
b. Assess the quantitative importance of the different attributes.
c. Assess the company and competitors’ performances on customer values.
d. Identify the major attributes customers value.
e. Examine customer ratings of the company and competitors.
Answer: d

50. With respect to consumer purchase intention, all of the following would be among
the sub-decisions made by consumers EXCEPT ________.
a. emotional value
b. brand
c. dealer
d. timing
e. payment method
Answer: a

51. With the ________ heuristic, the consumer sets a minimum acceptable cutoff level
for each attribute and chooses the first alternative that meets the minimum standard
for all attributes.
a. conjunctive
b. lexicographic
c. elimination-by-aspects
d. primary
e. secondary
Answer: a

52. Even if consumers form brand evaluations, two general factors can intervene
between the purchase intention and the purchase decision. One of these is
unanticipated situational factors. What is the second factor?
a. Amount of purchasing power.
b. Attitudes of others.
c. Short-term memory capabilities.
d. Ability to return merchandise.
e. The self-concept.

Answer: b

53. ________ risk occurs if the product fails to perform up to expectations.

a. Physical
b. Financial
c. Social
d. Psychological
e. Functional
Answer: e Page: 198 Level of difficulty: Hard
54. If performance meets consumer expectations, the consumer is ________.
a. delighted
b. satisfied
c. disappointed
d. surprised
e. overwhelmed
Answer: b

55. A key driver of sales frequency is the ________ rate.

a. product consumption
b. disposal
c. refusal
d. utility
e. option
Answer: a

56. The level of engagement and active processing undertaken by the consumer in
responding to a marketing stimulus is called ________.
a. elaboration likelihood
b. consumer disengagement
c. consumer involvement
d. variety-seeking
e. low-involvement
Answer: c

57. If a consumer is persuaded to buy a product by a message that requires little thought
and is based on an association with a brand’s positive consumption experiences from
the past, the consumer used a ________ to arrive at this purchase decision.
a. central route
b. peripheral route
c. behavioral route
d. subjective route
e. objective route
Answer: b

58. With the ________, predictions of usage are based on quickness and
ease of use.
a. availability heuristic
b. representative heuristic
c. anchoring heuristic
d. adjustment heuristic
e. semantic heuristic
Answer: a
59. Ben always reaches for the bright blue and yellow box of Ritz crackers when he
visits the snack food aisle in the grocery store. He rarely even reads the box or
checks the price. Which of the following heuristics is most likely being used by
Ben?
a. Availability
b. Representative
c. Anchoring
d. Adjustment
e. Semantic
Answer: b

60. ________ refers to the manner by which consumers code, categorize, and evaluate
financial outcomes of choices.
a. Cost accounting
b. Financial accounting
c. Behavioral accounting
d. Mental accounting
e. Factual accounting
Answer: d

True/False

61. Social class is the fundamental determinant of a person’s wants and behavior.
Answer: False

62. An example of a subculture would be a person’s geographic region.

Answer: True

63. According to facts about American consumers’ habits, Saturday is the most popular
day of the week to eat out.
Answer: True

64. One of the characteristics of social classes is that those within each class tend to
behave more alike than persons from two different social classes.
Answer: True

65. One of the demographic trends that will impact consumers in the future is “America
the spacious” meaning that America’s growth potential seems to have no boundaries.
Answer: False

66. Secondary groups require continuous interaction to be effective and

meaningful.
Answer: False
67. When Mark went to college he had a burning desire to join a social fraternity; for
Mark, this would be an example of an aspirational group.
Answer: True

68. The family of procreation includes one’s parents and siblings.

Answer: False

69. Asian Americans tend to be more brand conscious than other minority groups, but
yet are the least loyal to particular brands.
Answer: True

70. A role consists of the activities a person is expected to perform.

Answer: True

71. A good illustration of a critical life event or transition that might impact a
consumer’s behavior is a divorce.
Answer: True

72. One of the five traits of a product’s brand personality is thought to be its shape.
Answer: False

73. A brand personality is the specific mix of human traits that may be attributed to a
particular brand.
Answer: True

74. A person’s personality portrays the “whole person” interacting with his or her
environment.
Answer: False

75. Psychogenic needs arise from physiological states of tension such as hunger or
discomfort.
Answer: False

76. Abraham Maslow assumed that the psychological forces shaping people’s
behavior are largely unconscious, and that a person cannot fully understand his
or her own motivations.
Answer: False

77. According to Maslow’s hierarchy of needs model, recognition, self-esteem, and

status would be among a person’s social needs.
Answer: False

78. According to Herzberg’s two-factor theory, satisfiers will make the major difference
as to which brand the customer buys.
Answer: True
79. Perception depends only on the physical stimuli experienced by the person.
Answer: False

80. People are more likely to notice stimuli whose deviations are large in relation to the
normal size of the stimuli.
Answer: True

Next Chapter

1. To create and capture value, sellers need to understand business organizations’ needs,
resources, policies, and ________.
b. demands
c. protocols
d. strategies
e. buying procedures
f. personnel policies
Answer: d
2. Webster and Wind define ________ as the decision-making process by which formal
organizations establish the need for purchased products and services and identify,
evaluate, and choose among alternative brands and suppliers.
a. marketing channels
b. organizational buying
c. demand-oriented buying
d. purchasing
e. inventory control
Answer: b

3. The ________ consists of all the organizations that acquire goods and services used
in the production of other products or services that are sold, rented, or supplied to
others.
a. business market
b. consumer market
c. e-commerce market
d. global market
e. supplier market
Answer: a
4. Business markets have several characteristics that contrast sharply with those of
consumer markets. All of the following would be among those characteristics
EXCEPT ________.
a. fewer, larger buyers
b. close supplier-customer relationship
c. professional purchasing
d. inverted demand
e. multiple sales calls
Answer: d

5. All of the following would be among the major industries that make up the business
market EXCEPT ________.
a. agriculture, forestry, and fisheries
b. manufacturing
c. construction
d. banking, finance, and insurance
e. the Internet
Answer: e

6. Trained purchasing agents, who must follow their organization’s ________, often
purchase business goods.
a. culture
b. past purchasing history
c. purchasing policies, constraints, and requirements
d. needs
e. financial budgets
Answer: c

7. Ultimately, the amount of steel sold to General Motors depends on the consumer’s
demand for GM cars and trucks. From the standpoint of the steel manufacturer, which
of the following demand forms is most pertinent?
a. Derived demand
b. Inelastic demand
c. Geographic demand
d. Relational demand
e. Static demand
Answer: a

8. The demand for business goods is ultimately derived from the demand for ________.
a. raw materials
b. consumer goods
c. electronics
d. business solutions
e. e-commerce
Answer: b
9. The business buyer faces many decisions in making a purchase. The number of
decisions depends on the buying situation. All of the following examples are
appropriate to the preceding EXCEPT ________.
a. complexity of the problem being solved
b. newness of the buying requirement
c. number of people involved
d. applicability of situation to mission statement
e. time required
Answer: d

10. The purchasing department buys office supplies on a routine basis. This type of
purchase is classified as a ________.
a. straight rebuy
b. modified rebuy
c. new task
d. secondary purchase
e. preordained purchase
Answer: a

11. There are a series of guidelines for selling to small businesses. Which of the
following should not be among those guidelines?
a. Don’t waste their time.
b. Do keep it simple.
c. Do use the Internet.
d. Don’t forget about direct contact.
e. Do lump small and midsize businesses together for efficiency sake.
Answer: e

12. The business buyer makes the fewest decisions in the ________.
a. modified rebuy
b. regular buy
c. straight rebuy
d. new rebuy
e. new task buy
Answer: c

13. Many business buyers prefer to buy a total solution to a problem from one seller.
________ is the correct term for this process.
a. Channel consolidation
b. Systems buying
c. Vertical buying
d. Horizontal buying
e. Supply buying
Answer: b
14. Xerox offers a ________ approach to prospective clients when it offers a complete
turnkey procedure, operation, and management of the client’s information and
communication need.
a. supply buying
b. primary buying
c. systems buying
d. co-op buying system
e. direct buying
Answer: c

15. If Ampex Support Systems is the single supplier for a local manufacturing company’s
MRO (maintenance, repair, operating) supplies and needs, Ampex Support Systems
would then be considered as providing ________ for the manufacturer.
a. systems buying
b. purchasing support
c. turnkey logistics
d. decision support
e. systems contracting
Answer: e

16. ________ is a key industrial marketing strategy in bidding to build large-scale

industrial products (e.g., dams, pipelines, et cetera).
a. Systems contracting
b. Systems buying
c. Systems selling
d. Solutions buying
e. Turnkey logistics
Answer: c

17. ________ is composed of all those individuals and groups who participate in the
purchasing decision-making process, who share some common goals and the risks
arising from their decisions.
a. The buying center
b. The marketing sales team
c. Strategic management
d. Engineering support
e. The logistics center
Answer: a
18. In the purchasing decision process, the ________ are those who request that
something be purchased. They may be users or others in the organization.
a. users
b. initiators
c. influencers
d. deciders
e. approvers
Answer: b

19. In the purchasing decision process, the ________ are those who have the power to
prevent sellers or information from reaching members of the buying center.
a. gatekeepers
b. buyers
c. initiators
d. approvers
e. deciders
Answer: a

20. The typical buying center has a minimum of ________ members.

a. 2–3
b. 3–4
c. 4–5
d. 5–6
e. 10
Answer: d

21. Webster cautions that ultimately, ________ make purchasing decisions.

a. only senior managers
b. individuals, not organizations
c. organizations, not individuals
d. third parties
e. systems contractors
Answer: b

22. Small sellers concentrate their marketing efforts on reaching ________.

a. approvers
b. initiators
c. key buying influencers
d. users
e. the purchasing staff
Answer: c
23. To the ________ price is everything and transactional selling is used.
a. solution-oriented customers
b. income-oriented customers
c. gold-standard customers
d. strategic-value customers
e. price-oriented customers
Answer: e

24. The strategic-value customers want a fairly permanent sole-supplier relationship with
your company. Which of the following would be the best selling format to use with
the strategic-value customer?
a. Transactional selling
b. Consultative selling
c. Quality selling
d. Enterprise selling
e. Indirect demand selling
Answer: d

25. Some customers are willing to handle price-oriented buyers by setting a lower price,
but establishing restrictive conditions. All of the following would be among those
conditions EXCEPT ________.
a. limiting the quantity that can be purchased
b. no refunds
c. no adjustments
d. no services
e. no customer advertising
Answer: e

26. If a supplier signs an agreement with a customer that states $350,000 in savings will
be earned by the customer over the next 18 months in an exchange for a ten-fold
increase in the customer’s share of supplies ordered by the customer, the two parties
will have participated in what is called ________.
a. solution selling
b. consultative selling
c. risk and gain sharing
d. strategic alignment
e. demand shifting
Answer: c
27. W.W. Grainger employees work at large customer facilities to reduce materials-
management costs. Which of the following forms of solution selling is W.W.
Grainger using?
a. Solutions to partnerships.
b. Solutions to alter corporate culture.
c. Solutions to enhance customer revenues.
d. Solutions to decrease customer risks.
e. Solutions to reduce customer costs.
Answer: e

28. In principle, business buyers seek to ________ in relation a market offering’s costs.
a. spread risks
b. obtain the highest benefit package
c. maintain everyday-low-prices
d. outsource as much as is possible
e. eliminate partners’ shares in profits as much as possible
Answer: b

29. In the past, what position did purchasing departments hold in the management
hierarchy of most organizations?
a. A high level because of their role in managing the company’s costs.
b. A moderate level because of their spotty record on controlling costs.
c. A low level despite the fact that they manage more than half of the company’s
costs.
d. A secretive position.
e. There has been no determination of this position.
Answer: c

30. The new, more strategically-oriented purchasing departments have a mission. Which
of the following most accurately describes that mission?
a. Make the most profit possible and remain independent of entanglements.
b. Approach every purchasing opportunity as means to create interdependency.
c. Seek the best value from fewer and better suppliers.
d. Outsource the supply function.
e. Abandon all strategies except for systems selling and buying.
Answer: c

31. When the purchaser’s focus is short term and tactical and they are rewarded on their
ability to obtain the lowest price from suppliers for the given level of quality and
availability, this is referred to as ________.
a. procurement orientation
b. supply chain management orientation
c. buying orientation
d. seller’s orientation
e. market orientation
Answer: c Page: 218 Level of difficulty: Medium
32. When buyers simultaneously seek quality improvements and cost reductions and they
develop collaborative relationships with major suppliers and seek savings through
better management of acquisition, conversion, and disposal costs, this is referred to as
________.
a. seller’s orientation
b. supply chain management orientation
c. market orientation
d. procurement orientation
e. buying orientation
Answer: d

33. When the purchasing role is further broadened to become a more strategic, value-
adding operation, this is referred to as ________.
a. supply chain management orientation
b. buying orientation
c. seller’s orientation
d. procurement orientation
e. routine orientation
Answer: a

34. Peter Kraljic distinguished four product-related purchasing processes. Which of the
following matches to products that have high value and cost to the customer but
involve little risk of supply because many companies make them?
a. Strategic products
b. Bottleneck products
c. Leverage products
d. Routine products
e. Commodity products
Answer: c

35. The products that have high value and cost to the customer and also involve high risk
(e.g., mainframe computers) are called ________.
a. strategic products
b. bottleneck products
c. leverage products
d. routine products
e. commodity products
Answer: a
36. Most purchasing professionals describe their jobs as more ________, technical, team-
oriented, and involving more responsibility than ever before.
a. risky
b. strategic
c. ethically difficult
d. Web-based
e. human-based
Answer: b

37. Robinson and Associates have identified eight stages and called them buyphases. This
model is called the ________ framework.
a. buygrid
b. buying/selling
c. seller-centered
d. commercial
e. buy-analysis
Answer: a

38. The first step (buy phase) in the straight rebuy buy class is ________.
a. problem recognition
b. general need description
c. product specification
d. supplier search
e. proposal solicitation
Answer: c

39. A new task buy class decision begins with which of the following buy phases?
a. Problem recognition
b. General need description
c. Product specification
d. Supplier search
e. Proposal solicitation
Answer: a

40. Business marketers can stimulate problem recognition by ________.

a. trade directories
b. direct mail, telemarketing, and calling on prospects
c. encouraging the Better Business Bureau to release statistics
d. consumer advertising
e. requesting testimonials from existing customers
Answer: b
41. When Hewlett-Packard sells such complex products as a network computer system, it
is engaging in what it calls the ________ concept because it offers information and
specific solutions to unique problems.
a. “product specification”
b. “price de-escalation”
c. “systems selling”
d. “trusted advisor”
e. “strategic alliance”
Answer: d

42. U.S. businesses spent about ________ on online transactions with other businesses in
2002 as compared to consumer online purchases of $71 billion during the same time
period.
a. $650 billion
b. $500 billion
c. $482 billion
d. $225 billion
e. $53 billion
Answer: c

43. With respect to e-procurement, Web sites are organized around two types of e-hubs:
________.
a. vertical and horizontal hubs
b. vertical and functional hubs
c. functional hubs and organizational hubs
d. supplier and user hubs
e. manufacturer and supplier hubs
Answer: b

44. With respect to e-procurement, Coca-Cola, Sara Lee, Kraft, PepsiCo, Gillette, P&G,
and several other companies joined forces to form a ________ called Transora to use
their combined leverage to obtain lower prices for raw materials.
a. manufacturer’s co-op
b. supplier’s co-op
c. middleman group
d. buying alliance
e. cabal
Answer: d
45. Business-to-business cyber buying is flourishing on the Internet. So far, most of the
products that businesses are buying electronically are ________, and travel and
entertainment services.
a. promotion services such as advertising
b. HR services (e.g., employee recruitment)
c. MRO materials (maintenance, repair, and operations)
d. food services
e. marketing research services
Answer: c

46. Moving into e-procurement has many benefits. Which of the following would not be
among those benefits?
a. Aggregating purchasing across multiple departments gains larger volume
discounts.
b. Aggregating purchasing across multiple departments gains centrally negotiated
volume discounts.
c. There is less buying of substandard goods from outside the approved list of
suppliers.
d. A smaller purchasing staff is required.
e. Purchasing gains, a significant leverage with top management because of its
management team.
Answer: e

47. With respect to e-procurement commitment, in 2003 ________ was named number
one in BtoB magazine’s annual ranking of the top B-to-B Web sites because of its
ability to generate sales (about 55 percent of the company’s total sales) and
commitment to the process.
a. Coca-Cola
b. Dell Computers
c. Hewlett-Packard
d. Cadillac
e. Boeing
Answer: c

48. In the proposal solicitation process, ________ should be marketing documents that
describe value and benefits in customer terms.
a. written proposals
b. oral proposals
c. e-proposals
d. alliance proposals
e. global proposals
Answer: a
49. Xerox qualifies only suppliers who meet the ISO 9000 quality standards, but to win
the company’s top award—certification status—a supplier must first complete
________.
a. government certification
b. an extensive ethics statement evaluation
c. the Xerox Multinational Supplier Quality Survey
d. a company training and indoctrination period
e. a Malcolm Baldridge National Quality Award entry form and then enter
Answer: c

50. All of the following are considered to be methods of assessing customer value
EXCEPT ________.
a. direct survey questions
b. exit interviewing
c. focus-group value assessment
d. conjoint analysis
e. benchmarks
Answer: b

51. According to purchasing professionals, which of the following is considered to be the

major responsibility of the purchasing agent in supplier negotiations?
a. Forming networks for future business.
b. Assuring quality conformance.
c. Being fair with all parties.
d. To use a team approach in negotiations.
e. Negotiating price.
Answer: e

52. If an industrial buyer leases heavy equipment like machinery and trucks rather than
purchasing them, the lessee gains several advantages. Which of the following would
NOT be among those advantages?
a. Higher quality products.
b. Conserving capital.
c. Getting the latest products.
d. Receiving better service.
e. Some tax advantages.
Answer: a

53. “OTIFNE” is a term that summarizes three desirable outcomes of a B-to-B

transaction: OT—deliver on time; IF—in full; and, NE—________.
a. no error
b. no emergencies
c. non-experimental
d. new entrepreneurs
e. need equipment
Answer: a
54. Corporate credibility depends on three factors: corporate expertise, corporate
trustworthiness, and ________.
a. corporate manpower
b. corporate mission statement
c. corporate likeability
d. corporate governance
e. corporate management structure
Answer: c

55. Cannon and Perreault found that buyer-supplier relationships differed according to
four factors. Which of the following would NOT be among those factors?
a. Importance of supply.
b. Complexity of supply.
c. Availability of alternatives.
d. Supply market dynamism.
e. Demand market conservatism.
Answer: e

56. According to Cannon and Perreault, buyer-supplier relationships fall into eight
different categories. Which of the following relationships is characterized as being
one that has much trust and commitment leading to a true partnership?
a. Mutually adaptive
b. Collaborative
c. Basic buying and selling
d. Customer supply
e. Cooperative systems
Answer: b

57. In the ________ category of Cannon and Perreault’s buyer-supplier relationship

categorization, although bonded by a close, cooperative relationship, the seller adapts
to meet the customer’s needs without expecting much adaptation or change on the
part of the customer in exchange.
a. contractual transaction
b. cooperative system
c. collaborative
d. mutually adaptive
e. customer is king
Answer: e
58. Vertical coordination can facilitate stronger customer-seller ties but at the same time
may increase the risk to consumer’s and supplier’s ________ (e.g., those expenditures
tailored to a particular company and value chain partner).
a. logistics channel
b. independent operations
c. specific investments
d. leverage ability
e. liquidity situation
Answer: c

59. The ________ market consists of schools, hospitals, nursing homes, prisons, and
other institutions that must provide goods and services to people in their care.
a. vertical
b. nonprofit
c. spot
d. secondary business
e. institutional
Answer: e

60. With purchases of $200 billion annually in goods and services, ________ is the
largest customer in the world.
a. Wal-Mart
b. Grainger
c. the State of California
d. the U.S. government
e. Latin America
Answer: d

True/False

61. Webster and Wind define organizational buying as the decision-making process by
which formal organizations establish the need for purchased products and services
and identify, evaluate, and choose among alternative brands and suppliers.
Answer: True

62. The business market is essentially the same thing as the consumer market.
Answer: False

63. The demand for business goods is ultimately derived from the demand for raw
materials.
Answer: False

64. The total demand for many business goods and services is inelastic—that is, not much
is affected by price changes.
Answer: True
65. In the straight rebuy, “out-suppliers” try to get a small order and then enlarge their
purchase share over time.
Answer: True

66. Over time, new-buy situations become straight rebuys and routine purchase behavior.
Answer: True

67. Most business buyers, preferring to spread their risk, reject what is called systems
buying from one seller.
Answer: False

68. Systems selling is a key industrial marketing strategy in bidding to build large-scale
industrial projects such as dams or pipelines.
Answer: True

69. The buying center is where consumers go to purchase their goods and services.
Answer: False

70. Initiators are those who authorize the proposed action of deciders or buyers.
Answer: False

71. Users perform all seven roles in the buying center because of their direct tie to the
product and what it is supposed to do.

Answer: False

72. The typical buying center has a minimum of two to three people even though large
companies may have more performing this function.
Answer: False

73. Webster cautions that ultimately, organizations not individuals make purchasing
decisions.
Answer: False

74. In the business market, small sellers concentrate on reaching as many participants as
possible because their chances of success are slim.

Answer: False
75. To gold-standard customers, a seller is wise to use what is called quality selling.

Answer: True
76. To effectively sell to price-oriented customers, a company is wise to use
transactional selling.
Answer: True
77. One of the forms of solution selling is to provide solutions to enhance customer
revenues.
Answer: True

78. Today, purchasing departments occupy a relatively low position in the management
hierarchy and answer primarily to the vice-president of marketing.
Answer: False

79. If a company’s purchasing department focus is short term and tactical, it is said to
have a buying orientation.
Answer: True

80. When business buyers work simultaneously to seek quality improvements and cost
reductions, the business buyers are said to have a demand orientation.

Answer: False

Next Chapter

1. ________ communicates to the market the company’s intended value positioning of

its product or brand.
a. Packaging
b. Price
c. Place
d. Promotion
e. Physical evidence
Answer: b

2. Price has operated as the major determinant of buyer choice among poorer nations,
among poorer groups, and with ________ products.
a. identical
b. over the Internet
c. similar
d. commodity-type
e. none of the above
Answer: d

3. Companies price their products in a number of ways. Small companies prices are set
by the boss, in larger companies, pricing is handled by division and product-line
managers. In industries where price is a key factor, companies often establish a
________ department reporting to other internal departments.
a. financial
b. pricing
c. sales
d. marketing
e. distribution
Answer: b
4. Executives often complain that pricing is a big headache. One of the common
mistakes made are: Price is not revised often enough to capitalize on market changes;
price is set ________ of the rest of the marketing mix rather than an intrinsic element of a
marketing-positioning strategy.
a. divergently
b. too high
c. intrinsically
d. independently
e. concurrently
Answer: d

5. “Power prices” use price as a key strategic tool. These “power pricers” have
discovered the highly ________ effect of price on the bottom line.
a. dramatic
b. abrasive
c. leveraged
d. direct
e. soothing
Answer: c

6. Purchase decisions are based on how consumers perceive prices and what they
consider to be the ________ price—not the marketer’s stated price.
a. current actual
b. last purchased price
c. current sale price
d. referent price
e. none of the above
Answer: a

7. The definition of ________ prices are: In considering an observed price, consumers

often compare it to an internal memory reference price or an external frame of
reference (such as a posted “regular retail price”).
a. historical
b. reference
c. promotional
d. everyday low price
e. none of the above
Answer: b
 8. Many consumers use price as an indicator of ________. Image pricing is especially
effective with ego-sensitive products such as perfumes and expensive cars.
a. status
b. quality
c. ability
d. capability
e. size
Answer: b

9. Pricing cues, such as sale signs and prices that end in a 9, become less effective the
more they are employed. Anderson and Simester maintain that they must be used
judiciously on those items where consumers’ price knowledge may be poor. Which of
the following is NOT one of these signs?
a. Quality or sizes vary across stores.
b. Product designs vary over time.
c. The store caters to low-involvement shoppers.
d. Customers are new.
e. Customers purchase the item infrequently.
Answer: c

10. A firm must set a price for the first time when it develops a new product, when it
introduces its regular product into a new distribution channel or geographical area,
and when it ________.
a. needs to increase bottom line results
b. raises prices due to cost escalation
c. rolls out an improved product
d. enters bids on new contract work
e. changes styles
Answer: d

11. Consumers often rank brands according to price tiers in a category. Within any tier,
there is a range of acceptable prices, called ________. These provide managers with
some indication of the flexibility and breadth they can adopt in pricing their brands
within a particular price tier.
a. price bands
b. price clusters
c. price groups
d. price cues
e. none of the above
Answer: a
12. A firm has to consider many factors in setting its pricing policy. We list these as a
six-step process. Which of the following is NOT one of these steps?
a. Determining demand.
b. Selecting the pricing objective.
c. Researching reference prices in the target market.
d. Selecting the final price.
e. Selecting a pricing method.
Answer: c

13. A firm first decides where it wants to position its market offering. A company can
pursue any of five major objectives through pricing. Which of the following is NOT
one of these objectives?
a. Predatory pricing
b. Survival
c. Maximum current profit
d. Maximum market share
e. Product-quality leadership
Answer: a

14. In market-penetration pricing, the company’s objective in pricing is to ________,

believing that higher sales volume will lead to lower unit costs and higher long-run
profits.
a. block competitive launches
b. maximize their market share
c. minimizes their market share
d. maximize volume
e. none of the above
Answer: b

15. Market-skimming prices make sense under the following conditions EXCEPT
________.
a. the high price communicates high value
b. the high initial price blocks competition from entering the market
c. the unit costs of producing a small number of units is high
d. the product is a “me-too” and contains no new technology or points of difference
e. a sufficient number of buyers have a high current demand
Answer: d
16. The first step in estimating demand is to understand what affects price sensitivity.
Generally speaking, customers are most price sensitive to products that cost a lot or
are ________.
a. priced low to begin with
b. low-cost
c. bought frequently
d. bought infrequently
e. none of the above
Answer: c

17. Consumers ________ to low-cost products or items they buy infrequently.

a. prefer the lowest total cost of ownership
b. remember prices of products
c. are ambivalent to prices
d. are more price sensitive
e. are less price sensitive
Answer: e

18. The concept of the lowest ________ means that a seller can charge a higher price if
they can convince the customers that price is only a small part of the total cost of
obtaining, operating, and servicing the product over its lifetime.
a. prestige pricing
b. total cost of ownership
c. convenience pricing
d. key price points
e. none of the above
Answer: b
19. If demand hardly changes with a small change in price, we say that the demand is
________.
a. equal
b. marginal
c. inelastic
d. elastic
e. none of the above
Answer: c

20. If demand changes considerably, we say that the demand is ________.

a. equal
b. elastic
c. inelastic
d. marginal
e. none of the above
Answer: b
21. Price elasticity depends on the magnitude and direction of the price change. If may
differ for a price cut versus a price increase. When the price changes have little or no
effect there might exist a ________ for your product.
a. selective price
b. price indifference band
c. substitute product
d. promotional price
e. collective price
Answer: b

22. ________ sets a ceiling on the price the company can charge for its products.
a. Government regulations
b. Market forces
c. Costs
d. Demand
e. Competition
Answer: d

23. A company’s costs take two forms. ________ are costs that do not vary with
production or sales revenue.
a. Fixed
b. Variable
c. Adjusted
d. Attributed
e. None of the above
Answer: a

24. ________ costs amounts differ greatly depending upon the level of production.
a. Fixed
b. Adjusted
c. Attributed
d. Unknown
e. Variable
Answer: e

25. ________ consists of the sum of the fixed and variable costs for any given level of
production.
a. Total costs
b. Manufacturing costs
c. Delivery costs
d. Fixed costs
e. Variable costs
Answer: a
26. Today’s companies try to adapt their offers and terms to different buyers. ________
accounting tries to identify the real costs associated with serving each customer. It
allocates indirect costs to the activities that use them and are tagged back to each
customer.
a. Cost accounting
b. Experience cost
c. Target costing
d. Direct product profitability
e. Activity-based cost
Answer: e

27. The three major considerations in price setting includes, costs set as the “floor,”
________, and customers’ assessment of unique features establishing the price
ceiling.
a. competitors’ prices and the price of substitutes provide an orientation point
b. competitors’ prices establishes a “target price” goal
c. the price of substitutes establishes a “target price”
d. the price of competitors and substitutes does not enter into the pricing
considerations.
e. none of the above
Answer: a

28. An increasing number of companies now base their price on the customer’s ________
of their products.
a. usage
b. EDLP pricing
c. everyday value pricing
d. perceived value
e. value proposition
Answer: d

29. The key to perceived-value pricing is to deliver more value than your competitors and
to ________ this to prospective buyers.
a. demonstrate
b. communicate
c. advertise
d. promote
e. convince
Answer: a
30. Value pricing is not a matter of simply setting lower prices; it is a matter of
reengineering the company’s operations to become a low-cost producer without
sacrificing quality; and lowering prices significantly to attract a large number of
________ customers.
a. expert customers
b. price-orientated
c. value-conscious
d. product-orientated customers
e. none of the above
Answer: c

31. When a firm charges the same, more, or less than its major competitors do, it is using
a pricing strategy that is called ________.
a. perceived value pricing
b. value pricing
c. high-low pricing
d. everyday low pricing
e. going-rate pricing
Answer: e

32. Auction-type pricing is becoming very popular today due to the Internet. The three
types of auction-types of pricing include sealed-bid auctions, descending bids
auctions, and ________.
a. EDLP
b. ascending bids
c. high-low bids
d. going-rate bidding
e. value pricing
Answer: b

33. Pricing methods narrow the range from which the company selects its final price. In
selecting that price, the company must consider additional factors, including the
impact of other marketing activities, company pricing policies, gain-and-risk-sharing
pricing, and the impact of price on ________.
a. other parties
b. channels of distribution
c. channel partners
d. marketing activities
e. none of the above
Answer: a
34. In ________ pricing, the company decides how to price its products to different
customers in different locations and countries.
a. specialty
b. geographical
c. offset
d. regional
e. none of the above
Answer: b

35. A ________ is offered by a manufacturer to trade-channel members if they will

perform certain functions, such as selling, storing, and record keeping.
a. functional discount
b. quantity discount
c. allowance
d. cash discount
e. none of the above
Answer: a

36. ________ occurs when a company sells a product or service at two or more prices
that do not reflect a proportional difference in costs
a. Psychological pricing
b. Loss-leader pricing
c. Product-form pricing
d. Customer-segment pricing
e. Price discrimination
Answer: e

37. When supermarkets and department stores drop the price on well-known brands to
stimulate store traffic, this is called ________.
a. EDLP
b. loss-leader pricing
c. special-event pricing
d. net pricing
e. none of the above
Answer: b

38. Companies often adjust their basic price to accommodate differences in customers,
products, locations, and so forth. Examples of these differentiated prices include all of
the following EXCEPT ________.
a. new product pricing
b. customer-segment pricing
c. product form pricing
d. channel pricing
e. none of the above
Answer: a
39. Companies sometimes initiate price cuts in a drive to dominate the market through
lower costs. A price-cutting strategy involves possible traps. One of these “traps” is
________.
a. secure target market customer
b. consistent high quality consumer
c. dependence on a firm market
d. loyal customer market
e. shallow-pockets
Answer: e

40. A major circumstance provoking price increases is ________.

a. market demand
b. profitability versus target
c. cost inflation
d. price versus competition
e. stock price versus target price
Answer: c

41. Generally, consumers prefer ________ price increases on a regular basis to sudden,
sharp increases.
a. large
b. consistent
c. small
d. reciprocal
e. trade
Answer: c

42. Given strong consumer resistance to price hikes, marketers go to great lengths to find
alternative approaches that will allow them to postpone a price increase. Which of the
following is NOT one of these approaches?
a. Reduce or eliminate some product features.
b. Reduce or eliminate some services like free delivery.
c. Shrink package sizes.
d. Demand upfront payment before shipping goods.
e. None of the above.
Answer: d

43. Your competitor has reduced prices on his entire line of products. You can interpret
these price cuts by assuming that your competitor is trying to gain market share, that
the company is doing poorly and wants to increase revenue quickly, and ________.
a. signals an end to price/promotion wars
b. signals that price is no longer a competitive advantage
c. wants the whole industry to reduce prices
d. wants you to reduce your prices below his
e. none of the above
Answer: c
44. In markets that are characterized by products that are highly homogenous, how
should a firm react to a competitor’s price decline?
a. Reduce product performance levels.
b. Enhance services.
c. Reduce services.
d. Reduce product characteristics.
e. Augment the product.
Answer: e

45. There are ways that brand leaders can respond to competitors’ price declines. These
include all of the following EXCEPT ________.
a. maintain your price
b. maintain your price and add value
c. reduce your price
d. increase price and improve quality
e. decrease price and decrease quality
Answer: e

46. Some of the considerations that company’s face when deciding to match a
competitor’s price decline include the product’s importance in the company’s
portfolio, the competitor’s intentions, and the ________.
a. reaction by the channels of distribution
b. shareholder value
c. market’s price and quality sensitivity
d. ordering time frames for the product
e. ordering ease for the product
Answer: c

47. Research on reference prices has found that “unpleasant surprises”—when perceived
price is lower than the stated price—can have a ________ impact on purchase
likelihood than pleasant surprises.
a. brand switching
b. less significant
c. greater
d. lesser
e. none of the above
Answer: c

48. To maximize market share, a firm may use _____________ pricing which sits on the
theory that as sales volume increases, unit costs will decrease.
a. market-penetration
b. market-skimming
c. value pricing
d. demand pricing
e. price bands
Answer: a
49. ________ is the result of a concentrated effort by designers, engineers, and
purchasing agents to reduce the product’s overall costs.
a. Learning curve
b. Target costing
c. Least cost producer
d. Experience curve
e. None of the above
Answer: b

50. In recent years, companies have adopted ________ where they try to win loyal
customers by charging a fairly low price for a high-quality offering.
a. EDLP
b. high-low pricing
c. value pricing
d. everyday low pricing
e. none of the above
Answer: c

51. In ________ the retailer charges higher prices on an everyday basis but then runs
frequent promotions in which prices are temporarily lowered below the EDLP level.
a. going-rate pricing
b. EDLP pricing
c. value pricing
d. high-low pricing
e. everyday low pricing
Answer: d

52. ________ is the direct exchange of goods, with no money and no third party
involved.
a. Co-optation
b. Buyback
c. Barter
d. Offset
e. Compensation
Answer: c

53. The seller sells a plant, equipment, or technology to another country and agrees to
accept as partial payment products manufactured with the supplied equipment in a
________.
a. buyback arrangement
b. co-optation
c. barter
d. offset
e. none of the above
Answer: a
54. Most companies will ________ their list price and give discounts and allowances for
early payments, volume purchases, and off-season buying.
a. list two prices
b. increase
c. reduce
d. adjust
e. none of the above
Answer: d

55. A(n) ________ is a price reduction to buyers who pay their bills promptly.
a. Allowance
b. seasonal allowance
c. dash discount
d. quantity discount
e. none of the above
Answer: c

56. When different customer groups are charged different prices for the same product or
service, it is called ________.
a. price discrimination
b. customer-segment pricing
c. illegal
d. product-form pricing
e. channel pricing
Answer: b

57. Prices that vary by time of the day, the season of the year, or the day of the week are
called ________.
a. discounting
b. time pricing
c. price discrimination
d. product form pricing
e. channel pricing
Answer: b

58. One of the traps of instituting a price decrease is when that low price buys market
share in the short term. The same customers will shift to any lower-priced product
that may come along. This trap is called ________.
a. low price trap
b. market loyalty trap
c. shallow-pockets trap
d. low-quality trap
e. fragile-market-share trap
Answer: e
59. All of the following EXCEPT _____________ are conditions that must exist for price
discrimination to work.
a. the practice must not be illegal
b. the practice must not breed customer resentment
c. competitors must not be able to undersell the firm in the high segment
d. market must be homogeneous
e. none of the above
Answer: d

60. The most elementary pricing method is to add a standard ________ to the product’s
cost.
a. target margin
b. target price
c. markup
d. margin
e. target-return
Answer: c

True/False

61. Price is one of the two elements of the marketing mix that produces revenue.
Answer: False

62. A well-designed and marketed product can command a price premium and reap big
profits.
Answer: True

63. Companies, surprisingly, price their products in very similar ways.

Answer: False

64. Traditionally, price has operated as the major determinant of a buyer’s choice.
Answer: True

65. Effectively designing and implementing a successful pricing strategy is as much

about luck as it is about understanding consumer-pricing psychology.
Answer: False

66. Purchase decisions are based on how consumers perceive prices and what they
consider the current actual price and not the marketer’s stated price.
Answer: True

67. Many consumers use price as an indicator of quality and value.

Answer: True

68. The price a firm charges for its product does not affect where it chooses to position
the product in the marketplace.
Answer: False

69. Consumers often rank brands according to price tiers in a category.

Answer: True

70. Trying to maximize market share a firm would be best served to use a market-
skimming pricing strategy.
Answer: False

71. When prices start off high and are slowly lowered over time, this is called market-
skimming pricing.
Answer: True

72. If a firm tries to become the product-quality leader then the price they charge for
their products may not be affected by consumer choice.
Answer: True

73. Customers are most price sensitive to products that cost a lot or are bought frequently.
Answer: True

74. Customers are less price sensitive to low-cost items or items they buy infrequently.
Answer: True

75. If demand hardly changes with a small decline in price, we say that the demand is
inelastic.
Answer: True

76. If demand changes considerably with a small change in price, we say that the demand
is elastic.
Answer: True
77. Price elasticity depends upon the magnitude and direction of the contemplated price
change.
Answer: True

78. A price indifference band is that section of the price increase in which the consumer
does not notice or does not have any effect in demand.
Answer: True

79. Activity-based cost is just another method to distribute attributable costs across the
product line.
Answer: False

80. Total costs consist of the sum of the fixed and variable costs associated with the
product.
Answer: True
Next Chapter

1. Modern marketing calls for more than developing a good product, pricing it
attractively, and making it accessible. Companies must also ________ with present
and potential stakeholders, and the general public.
a. attract
b. reach
c. relate to
d. advertise to
e. communicate
Answer: e

2. Marketing communications are the means by which firms attempt to ________,

persuade, and remind consumers about the product and brands that they sell.
a. inform
b. reach
c. attract
d. interest
e. none of the above
Answer: a

3. Marketing communications can contribute to brand equity by establishing the brand

in memory and ________ a brand image.
a. create interest
b. communicate
c. create demand
d. crafting
e. introducing
Answer: d
4. The marketing communications mix consists of six major modes of communications.
Which of the following is NOT one of these modes?
a. Personal selling
b. Direct marketing
c. Sales promotions
d. Packaging
e. Advertising
Answer: d

5. Every ________ delivers an impression that can strengthen or weaken a customer’s

view of the company.
a. brand equity
b. brand contact
c. salesman
d. featured ad
e. direct mail piece
Answer: b

6. Brand equity is composed of four elements. Which of the following is NOT one of
these elements?
a. Brand performance
b. Brand awareness
c. Brand image
d. Brand responses
e. Brand relationships
Answer: a

7. The starting point in planning marketing communications is an audit of all the

potential ________ that customers in the target market may have with the brand and
the company.
a. consumers
b. interests
c. interactions
d. usages
e. exposures
Answer: c

8. Marketers need to assess which experiences and impressions will have the most
influence at each ________ of the buying process.
a. stage
b. level
c. consumer
d. step
e. none of the above
Answer: a
9. Brand awareness is a function of the number of brand-related exposures and
experiences. Anything that causes the consumer to notice and pay attention to the
brand can ________ brand awareness.
a. decrease
b. increase
c. effect
d. affect
e. influence
Answer: b

10. The macro model of effective communications contains nine elements. Two elements
represent the major parties in a communication. These two parties are called
________ and ________.
a. sender/subject
b. beginner/receiver
c. receiver/starter
d. initiator/receiver
e. sender/receiver
Answer: e

11. According to the macro model of communication, the four major communication
functions are decoding, response, feedback, and ________.
a. message
b. encoding
c. response
d. feedback
e. noise
Answer: b

12. In communicating, selective attention, selective distortion, and ________ come into
play.
a. selective listening
b. noise
c. selective retention
d. selective hearing
e. selective interest
Answer: c

13. In micromodels of marketing communications the four classic response hierarchy

models includes all of the following EXCEPT ________.
a. communications model
b. innovation-adoption
c. hierarchy-of-effects
d. AIDA
e. BAMT
Answer: e
14. The eight steps in developing effective communications starts with the basics:
identifying the target audience, determining the objectives, designing the
communications, ________ , and establishing the budget.
a. selecting the advertising copy
b. managing the process
c. choosing the media mix
d. selecting the channels
e. measuring results
Answer: d

15. A major part of audience analysis is assessing the current image of the company, its
product, and its ________.
a. reputation
b. competitors
c. markets
d. users
e. management
Answer: b

16. ________ is the set of beliefs, ideas, and impressions a person hold regarding an
object.
a. Brand
b. Product
c. Image
d. Concept
e. Idea
Answer: c

17. Formulating the communications to achieve the desired response will require solving
three problems: message strategy, creative strategy, and ________.
a. market specific advertising
b. media sources
c. advertising
d. transformational appeal
e. message source
Answer: e

18. Creative strategies are how marketers translate their messages into a specific
communication. Creative strategies can be broadly classified as involving either
informational or ________ appeals.
a. branded entertainment
b. point-of-purchase
c. advertorials
d. transformational
e. individualization
Answer: d
19. Communicators use positive emotional appeals to attract consumer attention and
raise their ________ with an ad.
a. emotions
b. exposure
c. involvement
d. assessment
e. interest
Answer: c

20. Messages delivered by attractive or popular sources can potentially achieve higher
attention and recall. What is important is the spokesperson’s credibility. Source
credibility consists of trustworthiness, likeability, and ________.
a. celebrity status
b. experience
c. expertise
d. age
e. reputation

Answer: c

21. Multinational companies wrestle with a number of challenges in developing global

communications programs. These challenges include all of the following EXCEPT
________.
a. produce the ad locally or at headquarters
b. if the ad style is acceptable
c. that the market segment is legal and customary
d. if the product is appropriate
e. identifying the proper spokesperson
Answer: e

22. Personal communications channels derive their effectiveness through ________

presentation and feedback.
a. effective
b. group
c. canned
d. individualized
e. persuasion
Answer: d

23. ________ channels consist of company salespeople contacting buyers in the target
market.
a. Individualized
b. Personal
c. Expert
d. Advocate
e. Social
Answer: d
24. ________ channels consists of neighbors, friends, family members, and associates
talking to target buyers.
a. Social
b. Expert
c. Advocate
d. Professional
e. None of the above
Answer: a

25. Personal influence carries especially great weight with consumers in two situations.
The first is with products that are expensive, risky, or purchased infrequently. The
second is where the product ________.
a. suggests something about the user’s ethnic background
b. suggests something about the user’s education
c. suggests something about the user’s family
d. suggests something about the user’s financial wealth
e. suggests something about the user’s status or taste
Answer: e

26. Non-personal channels are communications directed to more than one person and
include media, sales promotions, events, and ________.
a. Internet access
b. coupons
c. direct exposure
d. guerilla tactics
e. publicity
Answer: e

27. Mass communications affect personal attitudes and behavior through a two-step
process. Ideas often flow from radio, television, and print to opinion leaders and from
these to the less ________-involved population groups.
a. media
b. advertising
c. informed
d. involved
e. none of the above
Answer: a

28. The two-step flow of information challenges the notion that consumption styles are
________ influenced by a “trickle-down” or “trickle-up” effect from mass media.
a. secondarily
b. affected
c. starts with
d. primarily
e. originates
Answer: d
29. The four common methods that companies use to decide on a promotion budget
includes the affordable method, the percentage-of-sales method, ________, and the
objective-and-task method.
a. financial method
b. incremental growth method
c. zero-based budgeting method
d. competitive-parity method
e. last year’s budget method
Answer: d

30. Companies must allocate the marketing communications budget over the six major
modes of communication—advertising, sales promotion, public relations and
publicity, events and experiences, sales force, and ________.
a. incentives
b. couponing
c. integrated marketing communications
d. Internet marketing
e. direct marketing
Answer: e

31. The ________ among communications tools explains why marketing functions need
to be coordinated.
a. significant costs
b. power
c. importance
d. incremental costs
e. substitutability
Answer: e

32. Advertising can be used to build up long-term image for a product and usually
contains the qualities of impersonality, amplified expressiveness, and ________.
a. invitation
b. motion
c. sound and sight
d. pervasiveness
e. intrusion
Answer: d

33. Sales promotions tools offer three distinctive benefits to marketers. Among these
benefits are communication, invitation, and ________.
a. credibility
b. impersonality
c. exclusion
d. inclusion
e. incentive
Answer: e
34. Personal selling is the most effective tool at later stages of the buying process,
particularly in building up buyer preference, conviction, and action. Personal selling
has three distinctive qualities. These are personal interaction, response, and
________.
a. customized
b. dramatization
c. involving
d. relevance
e. cultivation
Answer: e

35. Companies must consider several factors in developing their communications mix:
type of product market, consumer readiness to make a purchase, and the stage in the
________.
a. product life cycle
b. marketing mix
c. advertising mix
d. buying process
e. none of the above
Answer: a

36. An effectively trained company sales force can make four important contributions.
These are increased stock position, missionary selling, key account management, and
________.
a. customer contacts
b. relationship selling
c. direct sales contacts
d. enthusiasm building
e. account management
Answer: d

37. Senior managers want to know the outcomes and revenues resulting from their
communications investments. Too often, however, their communications directors
supply only ________ and expenses.
a. inputs
b. outputs
c. measures
d. ads
e. none of the above
Answer: b
38. In measuring the effectiveness of a firm’s communications investment, ultimately
________ measures capture the real payoff.
a. behavior-change
b. purchases
c. action
d. inaction
e. none of the above
Answer: a

39. Integrated marketing communications is a concept of marketing communications

planning that recognizes the added value of a ________ plan.
a. integrated
b. coherent
c. complete
d. comprehensive
e. none of the above
Answer: d

40. Many companies still rely on one or two communication tools. This practice persists
in spite of the fragmenting of mass markets into a multitude of mini markets, each
requiring its own approach; the proliferation of new types of media; and the growing
________ of consumers.
a. interests
b. splintering
c. randomness
d. time poverty
e. sophistication
Answer: e

41. Media coordination can occur across and within media types. A multiple media
campaign deployed within a tightly defined time frame can increase message
_________ and impact.
a. delivery
b. awareness
c. reach
d. impact
e. content
Answer: c
42. To build brand equity, communication effects created by advertising must be linked
to the brand. Often, such links are difficult to create because of ________.
a. consumer involvement
b. capital budgets
c. management structure
d. marketing/departmental infighting
e. none of the above
Answer: a

43. The advantages of integrated marketing communications to the firm are many.
Which of the following is NOT one of the advantages of having an integrated
marketing communications program?
a. It forces management to think about how the company communicates.
b. It forces management to think about every way the customer comes in contact
with the company.
c. It produces greater sales impact.
d. It increases consumer involvement.
e. It produces stronger message consistency.
Answer: d

44. In assessing the collective impact of an IMC program, the overriding goal is to create
the most effective and efficient communications program possible. Six criteria can be
used to help determine whether communications are truly integrated. Which of the
following is NOT one of these six criteria?
a. Clutter
b. Coverage
c. Contribution
d. Commonality
e. Complementarily
Answer: a

45. A one-time mailing offering a cookware item to a consumer is an example of a

________.
a. single-vehicle, single-stage campaign
b. direct campaign
c. single-vehicle, multiple-stage campaign
d. multiple-vehicle, multiple-stage campaign
e. none of the above
Answer: a
46. Communication tools vary in cost-effectiveness at different stages of buyer readiness.
________ and publicity play the most important role in the awareness-building stage.
a. direct marketing
b. sales promotion
c. advertising
d. publicity
e. “buzz”
Answer: c

47. Events and experiences provide many advantages to marketers. Among these
advantages are relevancy, “soft sell,” and ________.
a. dramatic
b. exciting
c. involving or engaging
d. personally involving
e. intimate
Answer: c

48. The appeal of public relations and publicity is based on three distinctive qualities.
These include, ________, the ability to catch buyers off guard, and dramatization.
a. invitation
b. “free”
c. high credibility
d. exposure
e. low cost
Answer: c

49. Many companies set promotion expenditures at a specified percentage of sales (either
current or anticipated) or of the sales price. This method of budgeting is called
________.
a. objective-and-task method
b. percentage-of-sales method
c. affordable method
d. competitive parity method
e. none of the above
Answer: b

50. Any discussion about the effectiveness of mass communication has to take into
account the dramatic changes that have ________ the effectiveness of the mass
media.
a. eroded
b. increased
c. expanded
d. supplemented
e. all of the above
Answer: a
51. Marketers must be careful in reaching out to consumers. Consumers also can resent
personal communications if unsolicited. A 2003 survey found that roughly ________
percent of the sample of consumers were very annoyed by pop-up ads, spam, and
telemarketing.
a. 80
b. 40
c. 90
d. 60
e. 100
Answer: a

52. Internet marketers are using ________ as a form of word of mouth, or word of
mouse, to draw attention to their sites.
a. event marketing
b. subliminal marketing
c. viral marketing
d. place marketing
e. public relations
Answer: c

53. Communication researchers are moving toward a social-structure view of

interpersonal communication. They see society as consisting of ________, small
groups whose members interact frequently.
a. targets
b. communities
c. liaisons
d. clubs
e. cliques
Answer: e

54. A well-chosen celebrity can draw attention to a product or brand. The choice of the
celebrity is critical. The celebrity should have high recognition, high positive affect,
and high ________ to the product.
a. interest
b. attachment
c. relevancy
d. appropriateness
e. “fit”
Answer: d
55. Communicators use ________ appeals such as fear, guilt, and shame to get people to
things or stop doing things.
a. destructive
b. scary
c. attractive
d. emotional
e. negative
Answer: e

56. John Maloney saw buyers as expecting one of four types of reward from a product.
These include rational, social, ego satisfying, and ________.
a. exciting
b. functional
c. low costs
d. sensory
e. safety
Answer: d

57. The two scales that when combined can develop insight into the nature of the
communication challenge facing marketers includes the familiarity scale and the
________ scale.
a. usage
b. favorability
c. targeted
d. selectivity
e. image
Answer: b

58. The hierarchy-of-effects model contains awareness, knowledge, liking, ________,

conviction, and purchase.
a. cognitive response
b. preference
c. interest
d. attitude
e. none of the above
Answer: b
59. Senders know that to effectively communicate they must encode their messages so
that the target audience can decode them; the must transmit the message through the
media that reach the target audience and develop ________ channels to monitor the
responses.
a. feedback
b. interest
c. response
d. decoding
e. none of the above
Answer: a

60. One implication of the concept of brand equity is that the manner in which brand
associations are formed does not matter. In other words, if a consumer has an
equally strong, favorable, and unique brand association the impact in terms of brand
equity should be ________.
a. prominent
b. identical
c. different
d. measurable
e. actionable
Answer: b

True/False

61. One implication of the concept of brand equity is that the manner in which brand
associations are formed does not matter. In other words, if a consumer has an equally
strong, favorable, and unique brand association the impact in terms of brand equity
should be identical.
Answer: True

62. Marketing communications are the means by which firms attempt to inform,
persuade, and remind consumers about the products and brands that they sell.
Answer: True

63. Every brand contact delivers an impression that can strengthen or weaken a
customer’s view of the company.
Answer: True

64. The starting point in planning marketing communications is an audit of all the brands
that customers in the target market have with the company.
Answer: False

65. From the perspective of building brand equity, marketers should evaluate some of the
different possible communication options according to their effectiveness criteria.
Answer: False
66. In the macro model of communication, noise does not affect the communication
process between sender and receiver.
Answer: False

67. Micromodels of marketing communications concentrate on consumers’ specific

responses to communications.
Answer: True

68. The “learn-do-feel” model of consumer response models is relevant when the
audience has low involvement and perceives little differentiation within the product
category.
Answer: True

69. AIDA is an acronym for attention, interest, desire, and action.

Answer: True

70. There are eight steps in developing an effective communication’s program.

Answer: True

71. Image is a set of beliefs, ideas, and impressions a person holds regarding an object.
Images are “sticky”; they persist long after the organization has changed.
Answer: True

72. Communication objectives can be set at any level of the hierarchy-of-effect model.
Answer: True

73. Formulating the communications to achieve the desired response will require solving
three problems: what to say, how to say it, and how to pay for it.
Answer: False

74. An informational appeal elaborates on product or service attributes or benefits.

Answer: True

75. Attention-getting tactics are often too effective and distract from brand or product
claims.
Answer: True

76. Two-sided messages are more effective with audiences that are more educated and
those who are initially opposed to the product.
Answer: True

77. The factors that underlie source credibility include expertise, trustworthiness, and
appropriateness.
Answer: False
78. If a person has a positive attitude toward a source and a message, or a negative
attitude toward both, a state of congruity is said to exist.
Answer: True

79. The “principle of congruity” implies that communicators can use their good image to
reduce some negative feelings toward a brand but in the process might lose some
esteem with the audience.
Answer: True

80. Companies that sell their products to different cultures or in different countries do not
need to worry about varying their message.
Answer: False