Princ. of MKT - Midterm

Belmont University - Yang He

A firm that is the low-cost producer in its industry while maintaining satisfactory profit margins is said to have a:

cost competitive advantage

The Boston Consulting Group (BCG) matrix classifies SBUs into four categories. A business unit that is a market leader in a high-growth market is called a:

star

In a SWOT analysis, a company's outdated manufacturing equipment would be classified as a(n):

weakness

A firm that focuses its marketing efforts on a specific, targeted segment of the market and serves that segment better than its competitors is said to have a:

niche competitive advantage

In the BCG matrix, a business unit that is a market leader in a low-growth market and generates more cash than it needs to maintain its market share is called a:

cash cow

The marketing mix element that includes channels of distribution, market coverage, and inventory is:

promotion

In a SWOT analysis, a favorable trend in the external environment is a(n):

opportunity

(Ansoff's Opportunity Matrix) When a firm enters a new market with its existing products, it is using a strategy of:

market development

Which of the following describes a 'Dog' in the BCG matrix?

Low growth, low market share.

Which type of competitive advantage is achieved by providing something unique and valuable to customers beyond a low price?

Product/ service differentiation

Which of the following describes a product/service differentiation competitive advantage?

A Software company develops unique features and a user-friendly interface that customers value highly.

The strategic planning process for a firm begins with:

defining the business mission

Which of the following is an example of a weakness in a SWOT analysis for a restaurant?

The restaurant's interior is outdated and needs renovation.

Diversification is the riskiest of the four growth strategies in the Ansoff matrix.

True. 

The element of the marketing mix that includes all the tools a firm uses to inform, persuade, and remind consumers about its products.

place

A key question a firm's mission statement should answer.

What business are we in?

In the context of the Ansoff matrix, which strategy is the most conservative and least risky?

market penetration

Which of the following is an example of an external opportunity in a SWOT analysis for a bookstore?

A new movie is released based on a best-selling book, leading to increased interest in the genre.

What is the definition of a sustainable competitive advantage?

An advantage that is not easily copied and can be maintained over a long period of time.

Which of the following is NOT a source of a sustainable competitive advantage as discussed in the chapter?

A temporary price reduction

The Boston Consulting Group (BCG) portfolio matrix classifies each strategic business unit (SBU) based on two dimensions. What are these two dimensions?

Market share and market growth rate

Which of the following is the most appropriate marketing strategy for a 'Cash Cow' SBU in the BCG matrix?

Maintaining market dominance and using the generated cash to fund other SBU’s.

What is the process of dividing a market into meaningful, relatively similar, and identifiable groups?

market segmentation

A company that divides its market based on a customer's location, such as a country, city, or region, is using which type of segmentation?

Geographic segmentation

Segmenting a market based on variables such as age, gender, income, and ethnic background is known as:

Demographic segmentation

Which of the following describes psychographic segmentation?

Dividing a market based on personality, motives, lifestyle, and geodemographics.

A company that targets consumers based on how much they use a product, such as heavy, medium, or light users, is employing which type of segmentation?

Usage-rate segmentation

A firm that adopts a mass-market philosophy, viewing the market as one big market with no individual segments, and using a single marketing mix for the entire market, is using which targeting strategy?

Undifferentiated strategy

What is the primary disadvantage of using a multi-segment targeting strategy?

Cannibalization

A firm that selects one segment of a market for targeting its marketing efforts is using which strategy?

Concentrated strategy

What is the process of creating a desired image for a product in the mind of the target consumer?

Positioning

Which of the following describes the purpose of a perceptual map?

To visually display the perceptions of customers or potential customers.

A company that targets a variety of people, but with different products, is using which targeting strategy?

Multi-segment strategy

Which of the following is an example of psychographic segmentation? 

Targeting consumers who are interested in a 'green' lifestyle.

Which of the following is NOT a characteristic of a market segment?

It is inaccessible.

After a product category for study is determined, which of the following describes the next step in the market segmentation process?

Choosing a basis for segmentation.

Which of the following is a disadvantage of a concentrated targeting strategy?

The firm may be vulnerable to changes in the market.

What is a positioning statement?

A brief statement that identifies the product or brand's target market, the product category, the key benefit, and the point of differentiation.

What is the main goal of market segmentation?

To identify and serve a target market more effectively.

When a firm customizes its products and marketing mix to suit the needs of a single customer, it is practicing:

Individualized marketing

Which of the following describes the difference between demographic and psychographic segmentation?

Demographic segmentation is based on external characteristics, while psychographic segmentation is based on internal characteristics.

A firm that targets consumers based on the occasion when they use a product, such as a holiday or a season, is using which type of segmentation?

Behavioral segmentation

Which of the following is NOT a basis for effective positioning?

Geographics.

A product's position is the place it occupies in the consumer's mind relative to competing products

True.

A company that wants to understand how consumers perceive its brand of soda versus its main competitors (e.g., Coke and Pepsi) would most likely use which tool?

Perceptual map

If a company's brand is plotted very close to a competitor's brand on a perceptual map, this indicates that:

the two brands are perceived as very similar by consumers.

Which of the following is NOT a criterion for successful market segmentation?

Flexibility.

Demography is the study of people's vital statistics, such as age, race and ethnicity, and location.

True

Which generation is known for being digitally native and highly connected?

Generation Z

Purchasing power is a comparison of income versus the relative cost of a standard set of goods and services in different geographic areas.

True.

A period of economic activity when there is a decrease in consumer spending and business investment is called:

Recession

What is the primary role of the Federal Trade Commission (FTC)?

To protect consumer welfare and prevent anticompetitive practices.

What is the primary role of the Consumer Product Safety Commission (CPSC)?

To protect the public from unreasonable risks of injury or death from consumer products.

Which of the following is considered a demographic factor in the marketing environment?

The aging of the population in a country.

What is the function of the Food and Drug Administration (FDA)?

They regulate the safety and efficacy of food and drug products.

Which of the following is an example of a political and legal factor?

A new law requiring all consumer products to be made in the United States.

What is the primary concern for a marketer during a period of inflation?

The value of money is decreasing.

What is the main role of the Department of Justice in the marketing environment?

To enforce antitrust laws and prevent monopolies.

What is the main role of the Department of Justice in the marketing environment?

To enforce antitrust laws and prevent monopolies

During a recession, marketers should focus on:

emphasizing value and affordability.

The Sherman Act of 1890 was the first major U.S. law passed to address monopolies and competitive practices.

True.

Which of the following is an example of an economic factor?

The amount of disposable income available to consumers.

Which of the following best defines inflation?

A general rise in prices, which results in a decrease in the purchasing power of money.

During a period of high inflation, how does consumer behavior typically change?

Consumers are more price-sensitive and may postpone purchases.

Which of the following is an effective marketing strategy for a firm during a period of inflation?

Emphasizing a product's value and essential benefits.

The primary purpose of the Robinson-Patman Act of 1936 was to prohibit price discrimination that harms competition.

true

Which of the following is a legal justification for charging different prices for the same product under the Robinson-Patman Act?

The price difference is a result of cost savings from manufacturing or selling a larger volume to one buyer.

Which of the following business practices is a violation of the Robinson-Patman Act?

Charging different prices for the same product to different customers who are competing with each other, without a valid justification.

A firm can charge different prices for the same product to different customers if the price difference is made in a good-faith effort to meet a competitor's equally low price.

True

Country A can produce 10 tons of steel or 20 tons of wheat. Country B can produce 8 tons of steel or 10 tons of wheat. Which country has the comparative advantage in producing wheat?

Country A

Why is it possible for a country with no absolute advantage to still benefit from international trade?

It can specialize in the good for which it has comparative advantage.

The primary benefit of specialization and trade based on comparative advantage is...

An increase in the total world output of goods and services.

What is the balance of trade?

The difference between the value of a nation's exports and its imports.

Which of the following is most likely to contribute to a nation's trade deficit?

A strong domestic currency that makes imports cheaper.

A nation's trade deficit can be seen as a negative economic indicator because it suggests that the country is...

borrowing from foreign countries to finance its imports.

A tax levied on goods entering a country is known as a(n):

Tariff

What is the primary purpose of a Free Trade Zone?

To establish a single, unified government for all member countries.

A government that implements exchange controls is most likely attempting to…

control the flow of its currency out of the country.

Which of the following best describes the primary purpose of the World Trade Organization (WTO)?

To act as a forum for trade negotiations and a mechanism for resolving trade disputes.

Unlike the USMCA, the European Union (EU) has a common external trade policy. What does this mean?

All EU members have the same tariffs on imports from countries outside the EU.

One of the key differences between the EU and the USMCA is that the EU is a common market. What does this imply?

Goods, services, people, and capital can move freely across member borders.

Which of the following was a primary economic argument for the UK leaving the European Union?

The desire to regain control over trade policy and sign independent trade deals.

Which of the following is a significant change made by the USMCA compared to NAFTA?

New rules of origin for automobiles, requiring a higher percentage of parts to be from member countries.

Which of the following methods of entering a global market involves the lowest risk and lowest profit potential?

Exporting

Which global marketing strategy involves a company entering a foreign market by giving a foreign manufacturer the right to use its intellectual property for a fee?

Franchising

Which of the following is a disadvantage of licensing?

The licensor loses control over its products quality and marketing.

When a firm partners with a foreign firm to produce a product that is sold under the foreign firm's brand name, this is known as:

Contract Manufacturing

What is a 'joint venture' in the context of global marketing?

A new business entity created by two or more firms, one of which is a foreign firm.

What is the major advantage of a joint venture?

The foreign company benefits from the local partner's knowledge and expertise.

The riskiest method of entering a global market, but also one with the highest potential return, is:

Direct Investment

What is the advantage of direct investment?

Avoidance of trade barriers and tariffs. Possible tax advantage in tax haven sovereignty.

A firm that enters a new market by selling the rights to its business name, operating system, and products to a foreign firm.

Franchising

Which of the following is a disadvantage of a joint venture?

Partners may have different objectives or levels of commitment, leading to conflicts.

According to the American Marketing Association, marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have _____ for customers, clients, partners, and society at large.

value

A car manufacturer collaborates with a technology company to develop a new in-car entertainment system. The car company uses its own brand name to sell the vehicle, while the technology company receives a portion of the profits and gains brand recognition. This partnership is an example of marketing defined as a process for exchanging offerings that have value for whom?

The final customers and the car manufacturers partners.

The relationship between the benefits a consumer gets from a product and the sacrifices they make to obtain it is called:

Customer Value

A company that focuses on the internal capabilities of the firm rather than on the desires and needs of the marketplace is said to have a ____ orientation

production

A furniture company designs high-quality, long-lasting furniture. Its managers believe that if they build a superior product, customers will automatically want to buy it. This company's philosophy is best described as a:

production orientation

This orientation is based on the belief that:

people will buy more goods and services if aggressive sales techniques are used.

A new car dealership is offering deep discounts, "no-haggle" pricing, and aggressive TV ads to move last year's models off the lot. This approach is most consistent with a:

Sales Orientation