Marketing Quiz 3

A U.S furniture company finds its costs rising because of tariffs on imported wood from Canada. This is an example of which trade barrier?

Tariff

McDonald’s allows entrepreneurs in India to run its restaurants using McDonald’s recipes, branding, and operating systems. This is best described as:

Franchising

BMW produces SUVs in its South Carolina plant to avoid U.S. tariffs on imported cars. This strategy is an example of:

Direct Investment

Starbucks entered India by partnering with Tata Group, sharing ownership and profits of stores. This market entry method is:

Joint Venture

Disney earns revenue when a toy company produces Frozen dolls under agreement. This is:

Licensing

Harley-Davidson markets its motorcycles in Europe using the same “freedom on the open road” messaging as in the U.S. This reflects which type of global company?

International Firm

Dove runs a global “Real Beauty” campaign but adapts ads differently for India, the U.S., and the U.K. This is an example of:

Transnational Firm

The number 4 is avoided in Chinese product marketing because it sounds like the word for death. This is an example of which global environmental factor?

Cultural Symbols

A company in Japan refuses to buy foreign-made clothing because they believe it harms local industry. This is an example of:

Consumer Ethnocentrism

A Canadian logging firm can only ship a fixed number of lumber tons to the U.S. each year under trade rules. This restriction is an example of:

Quota

If Unilever produces Dove personal care, Lipton beverages, and Comfort laundry care, the combination of all these lines represents:

Product Mix

An airline’s challenge of paying pilots and maintaining aircraft even during off-season months reflects which “I” of services?

Inventory Idle Production Capacity

For Unilever, Sunsilk Shampoo 200ml represents a:

Stock Keeping Unit (SKU)

For P&G, the Personal Care category – which includes hair care, skin care and grooming products – represents a:

Product Line

When Apple first introduced the iPhone, consumers had to learn touch-screen navigation, internet browsing, and app installation. This learning of new consumption patterns in order to use the product represents:

Discontinuous Innovation

OgX launches a new shampoo variant infused with Moroccan oil, offering additional nourishment but requiring no new usage behavior from consumers. This is an example of:

Continuous Innovation

When Starbucks introduces ready-to-drink bottled frappuccinos sold in grocery stores rather than cafés, this product would best be classified as a:

Convenience Product

Two hairstylists in the same salon give very different results to customers even using the same shampoo and scissors. This is due to:

Inconsistency

A new product called Sweet Pea earphones is expected to launch in the coming months. Unlike traditional headphones that are typically used alongside smartphones, Sweet Pea is described as an AI-powered device that can anticipate user needs in real time—for example, helping users during meetings by instantly pulling relevant context from their calendar, notes, or past interactions and discreetly providing responses. Although it still resembles earphones, it fundamentally changes how consumers interact with technology in everyday situations requiring new learning and consumption patterns. If this product gains strong adoption after launch, what type of innovation does this most likely represent?

Discontinuous innovation

Which of the following statements is true for shopping products?

They are available in large number of selective outlets

McDonald’s ran a small-scale test of McRabbit, a new burger concept made with rabbit meat. The product was introduced in a few selected stores before a potential nationwide launch. After receiving negative consumer reactions, McDonald’s decided not to proceed further. At what stage was the idea dropped?

Concept development and market testing

Target’s product development team came up with a groundbreaking shopping cart concept. The new cart could move sideways with 360-degree wheel rotation, notify shoppers of forgotten items, alert staff about unscanned products being taken out of the store, and even self-park when left outside. However, after analyzing the costs, the team realized that launching it would be so expensive that Target would have no marketing budget for the next five years. As a result, they decided not to proceed. At which stage was the idea dropped?

Business analysis

A smartwatch company keeps adding features blood oxygen monitor, ECG, GPS, sleep tracker, stress detector, but customers report feeling overwhelmed and less satisfied. This illustrates:

Feature fatigue

According to longstanding FTC guidance, for how long can a company typically advertise its offering as a “new product”?

6 months from launch

Pepsi launches a new cherry-flavored version of its classic soft drink, expanding its existing cola lineup. This is an example of:

Product line extension

In 2001, Virgin Group, originally known for its record label and airline business, launched Virgin Mobile, entering the telecommunications industry using the same Virgin name. This move best represents which concept?

Brand extension

A car company decides to include a feature that manipulates emissions data to appear more environmentally friendly. John believes this is unethical but agrees with the team’s decision because he fears being labeled a negative thinker and excluded from future projects. This situation represents:

Groupthink

A marketing team at a large company is deciding whether to launch a controversial advertising campaign. During the meeting, most team members privately have concerns about how the public might react. However, no one voices their doubts because senior leaders strongly support the idea, and team members do not want to create conflict. The team quickly agrees to proceed without critically evaluating potential risks.

Which concept best explains this situation?

Groupthink

When Tesla launched its first Roadster, sales were slow, distribution limited, and awareness low — yet pricing was premium and promotions focused on awareness. Tesla was in the:

Introduction stage

A new food-delivery start-up is doubling customers every month, new competitors are entering, and advertising now highlights brand differences rather than product awareness. Which PLC stage is this?

Growth

Sales of streaming services like Netflix and Disney+ have flattened, with most households already subscribed. Competition is fierce, and price promotions are common. This reflects which PLC stage?

Maturity

During the introduction stage, what marketing objective should dominate for a new electric-bike company?

Build product awareness and stimulate trial

A new smartphone model is launched at a high price to attract status-conscious buyers and recover R&D costs before competitors enter. This pricing approach is known as __________.

Skimming

A skincare brand notices that now it has a higher proportion of repeat buyers than new customers, and sales are expanding as word-of-mouth spreads. This trend is typical of which stage of the product life cycle?

Growth

A new video-streaming platform launches at a surprisingly low monthly price to quickly attract a large subscriber base and discourage rivals. This reflects which pricing strategy?

Penetration

For a biotech company introducing a new probiotic drink, the main marketing goal in its first year should be to:

Build awareness and encourage to try the product

Crocs saw a massive comeback years after their initial popularity declined, driven by celebrity collaborations and social media trends. Which type of product life-cycle pattern does this reflect?

Fashion product

When motion-sensor night lights were launched, customers quickly understood the benefit and adopted them without much instruction. Sales took off rapidly and stabilized once the product became a household norm. This reflects which type of life-cycle pattern?

Low-learning product

Ten-year-old American girls loved wearing rainbow loom bracelets. The popularity surged quickly, remained for a short time, and then faded away. Which type of lifecycle does this represent?

Fad Product

A new product called Sweet Pea earphones is expected to launch in the coming months. Unlike traditional headphones that typically function as companion devices paired with smartphones, Sweet Pea integrates AI directly into the device—allowing users to interact with a personalized assistant throughout their day. While still resembling earphones, it fundamentally changes how consumers use the product. If this product gains strong adoption after launch, what does this most likely represent?

It may be considered as the addition of a new S-curve for the headphone market

When Tesla first launched its Roadster, buyers paid premium prices despite long charging times and limited stations. These consumers are best described as:

Innovators

A grocery chain waits until self-checkout systems become standard in most stores before installing them. This reflects the behavior of:

Late Majority

A smartphone company that bundles its watch and earbuds with new phone purchases to stimulate sales during market saturation is practicing:

Product Bundling

Campbell’s Soup encourages consumers to use soup as an ingredient in casseroles to boost consumption in a slowing market. This is:

Creating a new use situation (Market Modification)

When a company launches a new wearable fitness tracker, sales grow slowly at first, then accelerate as more people see friends using it. This pattern demonstrates that:

Adoption occurs gradually as different groups of consumers accept the product over time.

A startup’s new AI writing app gains credibility after a few tech enthusiasts and early reviewers try it and share positive experiences. According to the diffusion of innovation model, a product’s credibility primarily depends on purchases from:

Innovators and early adopters

A shopper compares two skincare serums priced at $15 and $55. Even before trying them, she assumes the $55 one will work better. Which idea does this illustrate?

Price-quality-value inference

A company boosts the durability, packaging, and customer support of its headphones while keeping the price unchanged. This strategy primarily aims to:

Increase perceived value by enhancing benefits

A firm earns $8 million in revenue and incurs $5.5 million in total costs. According to the profit formula, its profit equals:

$2.5 Million

Which category of pricing tactics includes methods like odd-ending pricing (e.g., $19.99), price lining, prestige pricing, and bundle pricing?

Demand-oriented pricing

A new smartwatch launches at a very high price to target early adopters who value exclusivity and advanced features. Which pricing strategy is being used?

Skimming

A streaming service introduces a low introductory subscription price to quickly build a large user base and discourage competitors. This reflects:

Penetration Pricing

A luxury handbag brand charges a premium price to signal craftsmanship and exclusivity, even though production costs are relatively low. This reflects:

Prestige pricing

A superstore carries lower margin items such as milk, in the hopes that customers purchasing milk will also purchase higher margin items such as fizzy drinks. This strategy is called:

Loss-leader pricing

A bakery calculates the price of each cake by adding a fixed percentage to the cost of flour, labor, and overhead. Which pricing method are they using?

Cost-plus pricing