Test Bank for Principles of Marketing 20th Edition by Kotler, Armstrong, Balasubramanian
ISBN: 9780135413524
Principles of Marketing, 20e (Kotler)
Chapter 1 Marketing: Creating Customer Value and Engagement
1) Which of these statements reflects Amazon founder Jeff Bezos's opinion on the firm's success and modern marketing?
A) Focus on the bottom line.
B) Hire the right people.
C) Obsess over customers.
D) Sell everything to anybody.
E) Deliver savings.
Answer: C
AACSB: Analytical thinking
Skill: Concept
Objective: LO 1.1: Define marketing and outline the steps in the marketing process.
Difficulty: Moderate
2) According to management guru Peter Drucker, "The aim of marketing is to ________."
A) maximize profits of the company
B) emphasize customer wants and not customer needs
C) make selling unnecessary
D) fulfill unrealistic customer expectations
E) sell products
Answer: C
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.1: Define marketing and outline the steps in the marketing process.
Difficulty: Easy
3) Marketing is defined as a set of strategies and activities by which companies acquire and engage customers, build strong customer and client relationships, and create superior customer value to ________.
A) enhance research and development efforts
B) maintain or gain the leading market position
C) profit from the sale of products
D) capture value from customers in return
E) increase the firm's revenue
Answer: D
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.1: Define marketing and outline the steps in the marketing process.
Difficulty: Moderate
4) According to the five-step model of the marketing process, which of the following is the last step in creating value for customers?
A) designing a customer-driven marketing strategy
B) understanding the marketplace and customer needs
C) constructing an integrated marketing program that delivers superior value
D) building profitable relationships and creating customer delight
E) capturing value from customers to create profits and customer equity
Answer: E
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.1: Define marketing and outline the steps in the marketing process.
Difficulty: Moderate
5) According to the five-step model of the marketing process, a company should ________ before designing a customer-driven marketing strategy.
A) determine how to deliver superior value to customers
B) build profitable relationships with customers
C) use customer relationship management to create full partnerships with key customers
D) understand the marketplace and customer needs and wants
E) construct an integrated marketing program
Answer: D
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.1: Define marketing and outline the steps in the marketing process.
Difficulty: Moderate
6) Which of these objectives is one of the threefold goals of marketing?
A) attract new customers by promising superior value
B) extract as much profit as possible from the market segment
C) focus on growing the firm's market share
D) create new products through extensive research and development
E) partner with supply chain members to deliver low-cost products
Answer: A
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.1: Define marketing and outline the steps in the marketing process.
Difficulty: Moderate
7) Marketing is engaging customers and managing profitable customer relationships.
Answer: TRUE
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.1: Define marketing and outline the steps in the marketing process.
Difficulty: Easy
8) One of the threefold goals of marketing is to eliminate unprofitable customers.
Answer: FALSE
AACSB: Analytical thinking
Skill: Concept
Objective: LO 1.1: Define marketing and outline the steps in the marketing process.
Difficulty: Moderate
9) Marketing is a social and managerial process by which entities obtain what they need or want by creating and exchanging value with others.
Answer: TRUE
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.1: Define marketing and outline the steps in the marketing process.
Difficulty: Easy
10) List the five steps of the marketing process.
Answer: Step 1: Understand the marketplace and customer needs and wants.
Step 2: Design a customer value-driven marketing strategy.
Step 3: Construct an integrated marketing mix that delivers superior value.
Step 4: Engage customers, build profitable relationships, and create customer delight.
Step 5: Capture value from customers to create profits and customer equity.
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.1: Define marketing and outline the steps in the marketing process.
Difficulty: Easy
11) ________ are human needs that are shaped by culture and individual personality.
A) Necessities
B) Wants
C) Demands
D) Values
E) Exchanges
Answer: B
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts.
Difficulty: Easy
12) When backed by buying power, wants become ________.
A) social needs
B) demands
C) physical needs
D) self-esteem needs
E) exchanges
Answer: B
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts.
Difficulty: Easy
13) ________ are states of felt deprivation.
A) Value exchanges
B) Market offerings
C) Demands
D) Needs
E) Wants
Answer: D
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts.
Difficulty: Easy
14) Venus Williams now has the buying power to purchase an island in the Bahamas that she has wanted for several years. Venus's want is now a(n) ________.
A) need
B) necessity
C) exchange
D) demand
E) transaction
Answer: D
AACSB: Analytical thinking
Skill: Application
Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts.
Difficulty: Moderate
15) A ________ is some combination of products, services, information, or experiences provided to consumers to satisfy a need or want.
A) market offering
B) value proposition
C) brand positioning
D) market segment
E) market mix
Answer: A
AACSB: Analytical thinking
Skill: Concept
Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts.
Difficulty: Easy
16) Firm ABC's marketing team is convinced their primary products are superior to their competitors but their sales are declining. A consulting firm tells Firm ABC that they need to focus more on the benefits and experiences provided to the firm's customers and focus less on the specific products. What does Firm ABC appear to suffer from?
A) market offering dystopia
B) demand focus
C) value proposition
D) marketing myopia
E) marketing immersion
Answer: D
AACSB: Analytical thinking
Skill: Concept
Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts.
Difficulty: Moderate
17) Smart marketers look beyond the attributes of products and services. Instead, they focus on ________.
A) enhancing profitability
B) creating brand experiences for their customers
C) online buying and rapid delivery
D) developing a superior supply chain network
E) delivering a solid product at a value-conscious price
Answer: B
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts.
Difficulty: Easy
18) ________ is the act of obtaining a desired object from someone by offering something in return.
A) Valuation
B) Exchange
C) Market offering
D) Confiscation
E) Donation
Answer: B
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts.
Difficulty: Easy
19) A(n) ________ is the set of actual and potential buyers of a product or service.
A) market
B) control group
C) subsidiary
D) focus group
E) audience
Answer: A
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts.
Difficulty: Easy
Refer to the following scenario to answer the following question(s).
Rashad is the new customer relationship manager for retail Firm XYZ. Sales have been falling and no one at the firm knows why this is happening. The marketing team has evaluated the product offerings several times and is convinced the firm's products are superior to their competitors. Rashad needs additional information to diagnose the problem and then establish a plan to reverse the trend. After interviewing the entire marketing team, Rashad learned that no one really knows anything about their customers other than a demographic profile created 10 years ago.
20) After discussing Firm XYZ's current situation, Rashad learns that no one at the firm has attempted to address the problem from the customer's perspective. He believes the marketing team is suffering from ________.
A) product differentiation syndrome
B) customer value creation
C) exchange focus
D) marketing myopia
E) relationship intermediation
Answer: D
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts.
Difficulty: Moderate
21) Rashad knows that one of the key building blocks for developing and managing customer relationships is to ________.
A) focus on the product mix
B) hire a comprehensive sales force
C) create a superior marketing plan
D) create better products
E) satisfy customers
Answer: E
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts.
Difficulty: Easy
22) Why do you think sales have been falling at Firm XYZ?
Answer: The team at Firm XYZ appears to be suffering from marketing myopia. They have become so focused on their products that they have lost sight of what customers need and want.
AACSB: Analytical thinking
Skill: Concept
Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts.
Difficulty: Moderate
Refer to the following scenario to answer the following question(s).
Carol Veldt, owner of Seagull Terrace, watched her investment grow from a small, seaside motel to a thriving year-round resort in just a few years. Atop a cliff overlooking the Maine coast, Seagull Terrace had attracted thousands of visitors during summer, but then faced a tremendous downturn in business during winter. "But, given the established industries in the nearby towns, very little year-round competition, and our close proximity to Portland," Carol added, "I couldn't understand why seasonality had to hit Seagull Terrace so hard!"
So, Carol spent her first winter devising a new marketing plan. She put together a promotional package designed to attract business travelers year-round. Carol's plan also involved a seasonal promotional gimmick–to be implemented from early winter to late spring–that would attract the same numbers as the large summer crowd. Her idea worked! During her second winter, Carol greeted numerous business travelers–both satisfied repeat guests as well as new guests who had been snagged by her promotional appeals.
"We still have a long way to go," Carol admitted. "Our delicatessen offers entrees that are a part of the local cuisine, but we'd like to expand that. We provide health club privileges off-site, but we would like to eventually provide our own. These are goals I hope to achieve in a few years. Our first project, however, included a renovation of our guest rooms and I'm quite proud of the results." Carol then added, "Actually there are so many possibilities. With an indoor pool area, I will eventually offer weekend getaways throughout winter."
23) Seagull Terrace offers its customers good accommodations, local delicacies, and amazing seaside views. The overall experience provided at the motel is a part of its ________.
A) market offering
B) target market
C) market segment
D) product positioning
E) marketing mix
Answer: A
AACSB: Analytical thinking
Skill: Application
Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts.
Difficulty: Challenging
24) Carol Veldt's marketing efforts resulted in creating and delivering value for her customers as evidenced by repeat guests.
Answer: TRUE
AACSB: Application of knowledge Skill: Concept
Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts.
Difficulty: Easy
25) Explain how Carol Veldt transformed Seagull Terrace into an experience.
Answer: Seagull Terrace was a simple seaside motel but Carol's strategy turned the motel into an experience destination. She added amenities such as health and fitness options, better dining options, and renovated lodging. Her main focus was to rebrand the motel as an experience destination instead of merely a place to sleep on your summer vacation.
AACSB: Analytical thinking
Skill: Application
Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts.
Difficulty: Moderate
26) Human needs are shaped by culture and individual personality. Answer: FALSE
AACSB: Application of knowledge Skill: Concept
Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts.
Difficulty: Easy
27) Market offerings are limited to physical products. Answer: FALSE
AACSB: Application of knowledge Skill: Concept
Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts.
Difficulty: Easy
28) What is a market offering?
Answer: A market offering is any combination of products, services, solutions, and experiences that satisfy a consumer's needs or wants. Furniture, financial services, and lodging are all examples of market offerings.
AACSB: Application of knowledge Skill: Concept
Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts.
Difficulty: Easy
29) Explain how wants and resources help determine what we buy.
Answer: Consumers demand products and services that will satisfy their wants and needs and fit within their budgets. They will purchase the products and services that deliver the most value and satisfaction per dollar spent.
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts.
Difficulty: Easy
30) Companies go to great lengths to learn about and understand customer needs, wants, and demands. Explain how food delivery company DoorDash's WeDash program attempts to achieve this.
Answer: Food delivery company DoorDash's long-standing WeDash program requires that every DoorDash employee, including the CEO and other executives, serve as a "Dasher" at least four times a year, delivering orders or shadowing customer support agents. This hands-on experience helps employees understand the challenges faced by Dashers, merchants, and customers, ultimately improving the company's services. DoorDash donates money from cofounder and CEO Tony Xu's delivered orders to nonprofit organizations. Such personal involvement helps marketers shape new customer solutions based on real user experiences.
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts.
Difficulty: Easy
31) What should sellers consider if they wish to avoid marketing myopia?
Answer: Sellers should consider the particular benefits and experiences desired by their customers, and not just pay attention to the specific products they offer.
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts.
Difficulty: Easy
32) Briefly compare and contrast the concepts of needs, wants, and demands and provide examples to illustrate your answer. How do these three concepts relate to marketing practices?
Answer: Human needs are states of felt deprivation. Needs are a basic part of the human makeup; marketers do not create them. Humans have a basic physical need for food, clothing, warmth, and safety; a basic social need for belonging and affection; and a basic individual need for knowledge and self-expression. Wants are needs shaped by culture, society, and individual personality. For example, an American needs food but wants a Big Mac and a soft drink. Wants become demands when they are backed by consumers' buying power. For example, an American with ten dollars needs food, wants a Big Mac and soft drink, and demands lunch at McDonald's. Marketers conduct extensive research to understand customers' wants and demands. They then attempt to fulfill customers' wants and demands through their market offerings.
AACSB: Written and oral communication
Skill: Concept
Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts.
Difficulty: Moderate
33) Explain how and why marketers go beyond selling a product or service to create brand experiences.
Answer: Sellers are most effective when they focus more on the benefits and experiences produced by their products and services than on the specific products and services themselves. Smart marketers focus on creating a brand experience, incorporating several products and services for their customers. By doing so, marketers hope to increase customer satisfaction. Satisfied customers buy again and tell others about their good experiences.
AACSB: Written and oral communication
Skill: Concept
Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts.
Difficulty: Moderate
34) Some firms attempt to serve all market segments ________.
A) because the most profitable firms attract the most customers
B) because they understand the customer needs and wants
C) by focusing on cost cutting over other goals
D) and end up not serving any of them very well
E) and lose sight of their product mix
Answer: D
AACSB: Analytical thinking
Skill: Concept
Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.
Difficulty: Moderate
35) Dividing the market into various groups of customers is known as ________.
A) market segmentation
B) positioning
C) customization
D) target marketing
E) differentiation
Answer: A
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.
Difficulty: Easy
36) Identifying which groups of customers to serve is known as ________.
A) market segmentation
B) positioning
C) customization
D) target marketing
E) differentiation
Answer: D
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.
Difficulty: Easy
Refer to the following scenario to answer the following question(s).
Kamesha's Clothes is a retail clothing store that is considering expansion into nearby communities. Kamesha started her store four years ago and has done well focusing on providing stylish clothing to middle-income buyers. However, before she expands, she would like to understand her customers better and see if she can expand her appeal to other demographic groups. During her last buying trip, she added some more expensive items to her inventory. However, very few of these additional items have been sold. Kamesha is trying to decide whether to begin marketing the items more aggressively or whether to focus on other groups.
37) What should Kamesha do first as she attempts to expand her business?
A) develop a targeted marketing campaign
B) lower her prices on all items
C) identify the various market segments
D) hire a marketing manager
E) consider hiring a consultant to help her make this decision
Answer: C
AACSB: Analytical thinking
Skill: Application
Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.
Difficulty: Challenging
38) Kamesha's second step should be to ________.
A) lower her prices on all items
B) hire a marketing manager
C) develop a targeted marketing campaign
D) select the market segments she wants to pursue
E) abandon her expansion efforts for the current time
Answer: D
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.
Difficulty: Challenging
39) What value proposition made Kamesha's business successful and how can she build on that success?
Answer: Kamesha's initial success was based on focusing on providing stylish clothing to middle-income buyers. Instead of trying to serve another target market, she should determine if there are unmet needs or wants among her middle-income buyers and expand accordingly.
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.
Difficulty: Moderate
40) An organic farmer has identified three distinct groups that might be interested in their products: vegetarians, health-conscious individuals, and people identified as trendsetters who try out new products in the market before others. These three groups are examples of ________.
A) marketing mixes
B) market segments
C) value propositions
D) market offerings
E) marketing intermediaries
Answer: B
AACSB: Analytical thinking
Skill: Application
Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.
Difficulty: Challenging
41) Which of the following customer questions is answered by a company's value proposition?
A) "Why should I buy your brand rather than a competitor's?"
B) "What is your company's estimated customer equity?"
C) "What are the costs involved in the production of your brand?"
D) "What is the budget allocated by your company for research and development?"
E) "What is the financial stability of your company?"
Answer: A
AACSB: Analytical thinking
Skill: Application
Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.
Difficulty: Moderate
42) Which of these marketing orientations focuses primarily on the product's features, performance, and quality?
A) production concept
B) product concept
C) selling concept
D) marketing concept
E) societal marketing concept
Answer: B
AACSB: Analytical thinking
Skill: Concept
Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.
Difficulty: Easy
43) Companies that follow the ________ concept can run the risk of marketing myopia–focusing too narrowly on their own operational efficiency and losing sight of the real objective–satisfying customer needs and building profitable customer relationships.
A) customer-driven marketing
B) customer-driving marketing
C) societal marketing
D) marketing
E) production
Answer: E
AACSB: Analytical thinking
Skill: Concept
Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.
Difficulty: Moderate
44) The ________ concept is typically practiced with unsought goods–those that buyers do not normally think of buying, such as life insurance or blood donations.
A) production
B) product
C) selling
D) marketing
E) societal marketing
Answer: C
AACSB: Analytical thinking
Skill: Concept
Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.
Difficulty: Moderate
45) The ________ concept of marketing focuses on consumer wants, company requirements, and the long-run interests of consumers and society.
A) selling
B) product
C) societal
D) consumer
E) production
Answer: C
AACSB: Ethical understanding and reasoning
Skill: Concept
Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.
Difficulty: Moderate
46) Which of the following is the aim of the product concept?
A) improve the marketing of a firm's best products
B) market only those products with high customer appeal
C) focus on the target market and make products that meet those customers' demands
D) focus on making continuous product improvements
E) ensure that product promotion has the highest priority
Answer: D
AACSB: Analytical thinking
Skill: Concept
Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.
Difficulty: Moderate
47) The ________ concept of marketing takes an inside-out view that focuses on existing products.
A) product
B) selling
C) production
D) societal
E) wholistic
Answer: B
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.
Difficulty: Easy
48) Railroads were once operated based on the thinking that users wanted trains that would offer the most in quality, performance, and innovative features. The railroad managing companies overlooked the fact that there could be other modes of transportation. This reflects the ________ concept.
A) product
B) production
C) selling
D) marketing
E) societal marketing
Answer: A
AACSB: Analytical thinking
Skill: Application
Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.
Difficulty: Challenging
49) The three considerations underlying the ________ concept are company profits, consumer wants, and society's interests.
A) marketing
B) production
C) societal marketing
D) selling
E) product
Answer: C
AACSB: Ethical understanding and reasoning
Skill: Concept
Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.
Difficulty: Easy
50) The production concept ________.
A) focuses on continuous product improvement
B) operates under the premise that consumers will not buy enough of the firm's products unless it undertakes a large-scale selling and promotion effort
C) believes customer focus and value are the paths to sales and profits
D) is a customer-centered sense-and-respond philosophy
E) holds that consumers will favor available and highly affordable products
Answer: E
AACSB: Ethical understanding and reasoning
Skill: Concept
Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.
Difficulty: Easy
51) The selling concept is typically practiced ________.
A) to balance consumers' wants, company's requirements, and the society's long-run interests
B) with products that offer the most in terms of quality, performance, and innovative features
C) when the company focuses on building long-term customer relationships
D) with goods that buyers normally do not think of buying
E) by customer-driven companies
Answer: D
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.
Difficulty: Moderate
52) Which of the following marketing orientations holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do?
A) the product concept
B) the production concept
C) the selling concept
D) the marketing concept
E) the societal marketing concept
Answer: D
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.
Difficulty: Easy
53) The societal marketing concept seeks to establish a balance between ________.
A) customer lifetime value and customer equity
B) an inside-out perspective and an outside-in perspective
C) consumer short-run wants and consumer long-run welfare
D) marketing mixes and market offerings
E) customer-driven marketing and customer-driving marketing
Answer: C
AACSB: Ethical understanding and reasoning
Skill: Concept
Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.
Difficulty: Easy
54) Some fast-food restaurants offer tasty and convenient food at affordable prices, but in doing so they contribute to a national obesity epidemic and environmental problems. These fast-food restaurants overlook the ________ philosophy.
A) marketing concept
B) product concept
C) production concept
D) societal marketing concept
E) selling concept
Answer: D
AACSB: Ethical understanding and reasoning
Skill: Application
Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.
Difficulty: Challenging
55) The set of marketing tools a firm uses to implement its marketing strategy is called the ________.
A) promotion mix
B) product mix
C) marketing mix
D) market offering
E) marketing effort
Answer: C
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.
Difficulty: Easy
56) Which of the following is the most likely result of a marketing strategy that attempts to serve all potential customers?
A) All customers will be delighted.
B) Customer-perceived value will increase.
C) All customers will directly turn into customer evangelists.
D) Not all customers will be satisfied.
E) Customers will not show interest in any other company's products.
Answer: D
AACSB: Analytical thinking
Skill: Concept
Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.
Difficulty: Moderate
57) Which of these is NOT one of the four Ps of marketing?
A) price
B) place
C) product
D) profit
E) promotion
Answer: D
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.
Difficulty: Easy
58) To deliver on its value proposition, the firm must first create a need-satisfying marketing offering, which equates to which of the four Ps of marketing?
A) price
B) place
C) product
D) profit
E) promotion
Answer: C
AACSB: Analytical thinking
Skill: Application
Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.
Difficulty: Moderate
59) Market segmentation is the process of seeking fewer customers and reduced demand for profit maximization only.
Answer: FALSE
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.
Difficulty: Easy
60) The selling concept holds that consumers will favor high-quality products with the most features.
Answer: FALSE
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.
Difficulty: Easy
61) The production concept and the product concept are marketing orientations that are more likely to lead to marketing myopia.
Answer: TRUE
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.
Difficulty: Moderate
62) Healthy Veggies, LLC, believes that marketing is a tool to use in finding customers and keeping them by providing vegetables that are grown using chemical-free farming techniques and selling through small family-owned stores. Healthy Veggies, LLC, practices societal marketing.
Answer: TRUE
AACSB: Analytical thinking
Skill: Application
Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.
Difficulty: Challenging
63) What is a firm's marketing mix?
Answer: The marketing mix refers to the set of marketing tools the firm uses to implement its marketing strategy. The marketing mix tools are typically classified as the four Ps of marketing: product, price, place, and promotion.
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.
Difficulty: Easy
64) Company X, a manufacturer of office supplies, follows the selling concept. Explain how the firm may lose sight of customer relationships with this marketing orientation.
Answer: The selling concept of Company X focuses on selling its office supplies rather than making what the market wants; such a strategy creates sales transactions but not long-term customer relationships. The company would most likely have a faulty assumption that customers who are persuaded to buy the product will like it or that they will buy the product again later even if they were not really initially satisfied. Company X will not foster customer loyalty with this approach.
AACSB: Analytical thinking
Skill: Application
Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.
Difficulty: Challenging
65) Compare the selling and marketing concepts, listing the key components of each philosophy. Answer: The selling concept reflects an inside-out perspective, while the marketing concept takes an outside-in perspective. The selling concept is typically practiced when an organization is marketing products or services that buyers do not normally think of purchasing, such as insurance or blood donation. Aggressive selling focuses on creating sales transactions rather than building long-term relationships with customers, with the aim of selling what the company makes rather than making what the customer wants. The marketing concept, on the other hand, is based upon identifying the needs and wants of target markets and then satisfying those needs and wants better than competitors do. In contrast to the selling concept, marketing focuses on the customer, not the product, as the path to profits.
AACSB: Written and oral communication
Skill: Concept
Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.
Difficulty: Moderate
66) Briefly explain the societal marketing concept. Give an example of an organization that has effectively used the societal marketing concept.
Answer: According to this concept, firms will succeed if they take underlying consumer needs and society's well-being into account over the long term. A pure marketing concept can damage consumers' long-run welfare by focusing exclusively on satisfying consumers' short-run wants. Over an extended period of time, this too-narrow focus can be damaging to the company. In setting their marketing strategies, marketers today need to balance company profits, consumer wants, and society's interests. The societal marketing concept holds that marketing strategy should deliver value to customers in a way that maintains or improves both the consumer's and society's well-being. It calls for sustainable marketing, socially and environmentally responsible marketing that meets the present needs of consumers and businesses while also preserving or enhancing the ability of future generations to meet their needs. The Eco Laundry company is built on sustainability, with a mission to care for people's clothes and the planet. It uses clean energy and nontoxic cleaning products. Beyond its laundry operations, Eco Laundry works with local public schools and sustainability programs and with assistance programs such as The Laundry Truck, which provides laundry access to those experiencing homelessness or poverty.
AACSB: Ethical understanding and reasoning
Skill: Concept
Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.
Difficulty: Moderate
67) Which of these statements best describes customer lifetime value?
A) the value of the entire stream of purchases that the customer would make over a lifetime of patronage
B) the value associated with creating a brand preference
C) the component of customer relationship management that focuses solely on customer delight
D) the overall value of the firm's customer base
E) the value created when customer satisfaction generates additional sales
Answer: A
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Moderate
68) Customer satisfaction is a goal that companies strive to achieve. Companies can accomplish this goal by ________.
A) regularly putting products on sale
B) promising only what they can deliver and then delivering more than they promise
C) offering promotional deals such as "buy one and get one free"
D) creating contests with exciting prizes
E) using celebrities to advertise their products
Answer: B
AACSB: Analytical thinking
Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Moderate
69) ________ is the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.
A) Customer divestment
B) Customer-perceived value
C) The societal marketing concept
D) Partner relationship management
E) Customer relationship management
Answer: E
AACSB: Analytical thinking
Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Easy
70) ________ is determined by a customer's evaluation of the benefits and costs of a market offering relative to those of competing offers.
A) Customer-perceived value
B) Customer lifetime value
C) Share of customer
D) Customer-managed relationship
E) Brand value proposition
Answer: A
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Easy
71) Anu is trying to understand the cost-benefit analysis that customers make prior to buying his firm's products. Specifically, he wants to know why a customer would pick his firm's product over the products of his competitors. Anu is evaluating ________.
A) customer satisfaction
B) customer relationship management
C) customer-perceived value
D) customer engagement
E) product satisfaction
Answer: C
AACSB: Analytical thinking
Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Challenging
72) When customers purchase products, they typically act on ________ as they judge values and costs.
A) objective value
B) perceived value
C) customer lifetime value
D) company image
E) society's interests
Answer: B
AACSB: Reflective thinking
Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Moderate
73) The primary key to delivering customer satisfaction is to match product performance with ________.
A) the performance of competitive products
B) competitive prices
C) aggressive advertising
D) limited customer services
E) customer expectations
Answer: E
AACSB: Analytical thinking
Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Easy
74) Gerald bought a new drill from the hardware store and was very pleased with his purchase. He voluntarily left a glowing product review on the manufacturer's website. Which of these terms describes Gerald's behavior?
A) customer-generated marketing
B) partner relationship management
C) customer lifetime value
D) surrogate customers
E) share of customer
Answer: A
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Easy
75) Roberto bought a new cologne that he believes has a more pleasing fragrance than the one he has been using. When he compares the new cologne with his expectations about the brand, he is assessing his level of ________.
A) customer delight
B) customer satisfaction
C) customer equity
D) customer-perceived value
E) customer lifetime value
Answer: B
AACSB: Analytical thinking
Skill: Application
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Challenging
76) Which of the following strategies would a company most likely use to delight customers?
A) decrease the variety of offered services
B) underpromise and overdeliver
C) raise prices to establish a "luxury good" reputation
D) "fire" unprofitable customers
E) limit customer experiences with the brand
Answer: B
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Easy
77) Anil wants to make his firm's brand a part of their customers' everyday conversations and lives. Every decision he makes is with that focus in mind. What is Anil practicing?
A) customer-perceived values
B) customer satisficing
C) customer relationship leveling
D) customer-engagement marketing
E) customer brand advocacy
Answer: D
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Moderate
78) Greater customer empowerment means that companies can no longer rely on ________.
A) promoting brand-consumer interaction
B) generic market offerings
C) marketing by intrusion
D) concepts with an outside-in perspective
E) marketing by attraction
Answer: C
AACSB: Reflective thinking
Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Moderate
79) Kao Corp., a deodorant manufacturer, invited teenage girls to make an ad that would encourage other girls to buy the product. This program is an example of ________.
A) societal marketing
B) the production concept
C) the selling concept
D) partner relationship management
E) customer-generated marketing
Answer: E
AACSB: Analytical thinking
Skill: Application
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Challenging
80) Elisandra, a marketing manager at a regional chain restaurant, has decided to organize a contest calling for customers to create commercials for the restaurant. Winning entries will be posted on the organization's home page. Elisandra's plan is an example of ________.
A) customer-generated marketing
B) partner relationship management
C) customer lifetime value
D) community development
E) customer divestment
Answer: A
AACSB: Analytical thinking
Skill: Application
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Challenging
81) The fourth step in the marketing process is ________.
A) capturing value from customers
B) building profitable relationships and creating customer delight
C) creating customer lifetime value
D) understanding the marketplace
E) designing a customer-driven marketing strategy to reap profits
Answer: B
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Easy
82) "Losing a customer once means losing the entire stream of possible purchases that the customer would make over an extended period of patronage." This statement specifically indicates loss in terms of ________.
A) customer-perceived value
B) marketing offerings
C) partner relationship management
D) customer lifetime value
E) value proposition
Answer: D
AACSB: Analytical thinking
Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Moderate
83) One danger of too much customer interaction is ________.
A) too much control related to managing partner relationships
B) selling new products on multiple platforms is confusing
C) consumers can be overwhelmed with too many contacts
D) converting "barnacles" to "strangers" is much harder
E) capturing customer lifetime value is more difficult
Answer: C
AACSB: Analytical thinking
Skill: Application
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Challenging
84) The value of a customer's purchases over a lifetime of patronage for a single firm is known as ________.
A) customer-perceived value
B) share of customer
C) customer insight
D) customer lifetime value
E) induced consumption
Answer: D
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Easy
85) Apart from retaining good customers, most marketers want to constantly increase their "share of customer." What does this mean in marketing terms?
A) Marketers want to increase their market share.
B) Marketers want to increase the share they get of the customer's purchasing in their product categories.
C) Marketers want to diversify their operations and customize their products to cater to the entire market.
D) Marketers want to continuously increase their customers' levels of satisfaction.
E) Marketers want to turn satisfied customers into delighted customers.
Answer: B
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Moderate
86) ________ occurs when a firm works with others inside and outside of the firm to bring more value to their customers.
A) Targeting new customers
B) Partner relationship management
C) Customer brand advocacy
D) Customer-engagement marketing
E) Partnership marketing
Answer: B
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Easy
87) Leticia is a licensed cosmetician and she helps her clients pick out the appropriate cosmetics based on their skin tones and personal preferences. Recently, she has added jewelry to her line. What is Leticia attempting to do by adding the jewelry?
A) increase shared value
B) increase her share of customer
C) become more socially responsible
D) engage in customer-generated marketing
E) encourage brand loyalty
Answer: B
AACSB: Analytical thinking
Skill: Application
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Challenging
88) Which of the following refers to the total combined customer lifetime value of all of the company's current and potential customers?
A) share of customer
B) marketing mix
C) customer equity
D) target market
E) customer-perceived value
Answer: C
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Easy
89) In the context of customer relationship groups, a ________ is both profitable and loyal.
A) true friend
B) butterfly
C) stranger
D) barnacle
E) market maven
Answer: A
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Easy
90) Customers can be classified into four relationship groups based on their profitability and projected loyalty. Which customer type is associated with low profitability and very little longterm loyalty?
A) barnacles
B) strangers
C) butterflies
D) true friends
E) cash cows
Answer: B
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Easy
91) Seasonal shoppers and event-based customers are associated with which of the four customer relationship groups?
A) butterflies
B) shooting stars
C) barnacles
D) true friends
E) strangers
Answer: A
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Moderate
92) To propel the launch of Barbie: The Movie, Mattel launched an AI-powered Barbie Selfie Generator page. Using a smartphone, a fan could take a self-portrait, position it next to Barbie (or Ken) in either a Corvette or a Poster setting, and share the image with their social networks. This best exemplifies which of the following?
A) in-store sales
B) marketing myopia
C) artificial intelligence usage
D) customer-generated content
E) partner relationship management
Answer: D
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Moderate
93) A marketer wants to increase its "share of customer." How can they accomplish this goal?
A) decrease prices
B) cross-sell and up-sell to existing customers
C) send samples directly to customers
D) introduce customers to "brand evangelists"
E) raise prices to appear more exclusive
Answer: B
AACSB: Reflective thinking
Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Moderate
Refer to the scenario below to answer the following question(s).
Carol Veldt, owner of Seagull Terrace, watched her investment grow from a small, seaside motel to a thriving year-round resort in just a few years. Atop a cliff overlooking the Maine coast, Seagull Terrace had attracted thousands of visitors during summer, but then faced a tremendous downturn in business during winter. "But, given the established industries in the nearby towns, very little year-round competition, and our close proximity to Portland," Carol added, "I couldn't understand why seasonality had to hit Seagull Terrace so hard!"
So, Carol spent her first winter devising a new marketing plan. She put together a promotional package designed to attract business travelers year-round. Carol's plan also involved a seasonal promotional gimmick–to be implemented from early winter to late spring–that would attract the same numbers as the large summer crowd. Her idea worked! During her second winter, Carol greeted numerous business travelers–both satisfied repeat guests as well as new guests who had been snagged by her promotional appeals.
"We still have a long way to go," Carol admitted. "Our delicatessen offers entrees that are a part of the local cuisine, but we'd like to expand that. We provide health club privileges off-site, but we would like to eventually provide our own. These are goals I hope to achieve in a few years. Our first project, however, included a renovation of our guest rooms and I'm quite proud of the results." Carol then added, "Actually there are so many possibilities. With an indoor pool area, I will eventually offer weekend getaways throughout winter."
94) Carol Veldt's plan also involves a seasonal promotional gimmick that she wants to promote aggressively. This is an example of the ________ concept.
A) selling
B) marketing
C) product
D) production
E) societal marketing
Answer: A
AACSB: Analytical thinking
Skill: Application
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Challenging
95) Renovations of the guest rooms at the Seagull Terrace and plans to add an indoor pool area are examples of the ________ concept.
A) selling
B) marketing
C) product
D) production
E) societal marketing
Answer: C
AACSB: Analytical thinking
Skill: Application
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Challenging
96) Carol Veldt has decided to ask selected guests to participate in an extensive survey about their experience at Seagull Terrace and about their requirements in terms of amenities and cuisines. By implementing the suggestions she receives from guests, Carol would be following the ________ concept.
A) production
B) product
C) selling
D) marketing
E) societal marketing
Answer: D
AACSB: Analytical thinking
Skill: Application
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Challenging
97) How can Carol capitalize on the concept of "customer-perceived value"?
Answer: Carol has done well but still does not appear to truly know her customers. She needs to spend some time learning about what features attract them to the Seagull Terrace and what features she could add to enhance the overall experience. Then she can focus on learning how to attract new customers who fit the same profile. For example, she could offer discounts to repeat customers who bring a friend along or refer a friend.
AACSB: Analytical thinking
Skill: Application
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Challenging
98) Coronada believes in cultivating her customer base and doing whatever is necessary to make her customers happy. She believes it is much easier to retain a customer than it is to attract a new one. What is Coronada attempting to accomplish?
A) build customer lifetime value
B) grow her share of customer
C) harvest short-term profits
D) develop a sustainable marketing plan
E) devise a marketing strategy
Answer: A
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Challenging
99) When satisfied customers talk favorably about a brand with their friends and colleagues, it is known as ________.
A) customer relationship leveling
B) customer brand advocacy
C) customer-perceived value
D) satisficing
E) customer relationship management
Answer: B
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Easy
100) Which of these digital media is NOT a social media platform that marketers can use to engage customers?
A) TikTok
B) Facebook
C) Google
D) Instagram
E) Twitter
Answer: C
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Easy
101) In today's digital age, firms need to rely more on ________ instead of marketing by intrusion.
A) artificial intelligence
B) traditional selling techniques
C) pushing consumers to act
D) marketing by attraction
E) marketing by extrusion
Answer: D
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Easy
102) Barnacles are highly loyal and highly profitable customers.
Answer: FALSE
AACSB: Application of knowledge Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Easy
103) Customer lifetime value is essentially the combined future value of all the firm's expected sales.
Answer: FALSE
AACSB: Application of knowledge Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Moderate
104) The total lifetime combined value of a firm's customers is known as customer equity.
Answer: TRUE
AACSB: Application of knowledge Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Moderate
105) In customer-generated marketing, consumers play a bigger role in shaping brand experiences.
Answer: TRUE
AACSB: Application of knowledge Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Moderate
106) Customer-generated marketing occurs when customers play a role in shaping their own brand experiences and those of other customers.
Answer: TRUE
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Easy
107) How can a firm use customer-generated marketing to increase brand awareness? List an example of a firm using this tactic.
Answer: Customer-generated marketing often involves uninvited customer-to-customer exchanges and emerges organically. However, some firms have been able to generate this activity by hosting contests for new products or ideas. For example, as part of its "Get Crackin'" campaign, Wonderful Pistachios ran ads inviting fans and TikTok influencers to post videos showing creative ways to open pistachios–the winner received $10,000 and a 1-year supply of pistachios.
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Moderate
108) Explain the concept of "share of customer."
Answer: Share of customer refers to the fraction of a consumer's spending that a firm is able to capture. For example, a clothing retailer might add ties and cuff links to its product mix to capture additional sales from the same customers.
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Moderate
109) Explain what marketers can expect from individuals in the customer relationship group classified as "butterflies."
Answer: "Butterflies" are potentially profitable but not loyal. Marketers should enjoy this type of customer "for the moment" because they soon flutter off. Marketers should create profitable and satisfying transactions with "butterflies," then cease investing in them until the next time around. Marketers can expect transactions with butterflies when conditions are optimal, but they should not expect butterflies to become loyal customers.
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Moderate
110) Describe and compare the four types of customers classified by their potential profitability to an organization. Explain how an organization should manage each type of customer.
Answer: The four types of customers are strangers, butterflies, true friends, and barnacles. "Strangers" have low potential profitability and loyalty. A company's offerings do not fit well with a stranger's wants and demands. Companies should not invest in building a relationship with this type of customer. Another type of customer in which a company should not invest is the "barnacle." Barnacles are highly loyal but not very profitable because there is a limited fit between their needs and the company's offerings. The company might be able to improve barnacles' profitability by selling them more, raising their fees, or reducing service to them. However, if they cannot be made profitable, they should be "fired." Like strangers, "butterflies" are not loyal. However, they are potentially profitable because there is a good fit between the company's offerings and their needs. Like real butterflies, this type of customer will come and go without becoming a permanent, loyal consumer of a company's products. Companies should use promotional blitzes to attract these customers, create satisfying and profitable transactions with them, and then cease investing in them until the next time around. The final type of customers is "true friends"; they are both profitable and loyal. There is a strong fit between their needs and the company's offerings, so the company should make continuous relationship investments in an effort to go beyond satisfying and to delight these customers. A company should try to convert true friends into customer evangelists who tell others about their good experiences with the company.
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Challenging
111) Explain the concept of customer equity.
Answer: Customer equity is the total combined customer lifetime values of all the company's customers. It is a measure of the future value of the firm's customer base.
AACSB: Analytical thinking
Skill: Application
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Easy
112) How can a marketer increase its "share of customer"?
Answer: The marketer can offer greater variety to customers; in addition, the marketer can train employees to cross-sell and up-sell to market more products and services to existing customers.
AACSB: Reflective thinking
Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Moderate
113) Define customer relationship management.
Answer: Customer relationship management is the process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. It deals with all aspects of acquiring, engaging, and growing customers.
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Moderate
114) Explain why the aim of customer relationship management is to create not just customer satisfaction, but also customer delight.
Answer: Customer satisfaction cannot be taken for granted. Because brand loyalty is dependent upon strong customer satisfaction, companies strive to retain, satisfy, and even delight current customers. Outstanding marketing companies go out of their way to keep important customers satisfied. Most studies show that higher levels of customer satisfaction lead to greater customer loyalty, which in turn results in better company performance. Firms create customer delight by promising only what they can deliver and then delivering more than what they promised. They also create emotional relationships with key customers. Delighted customers make repeated purchases and become willing marketing partners and "customer evangelists" who tell other potential customers about their positive experiences with the product.
AACSB: Written and oral communication
Skill: Concept
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Moderate
115) Mobile marketing is the fastest-growing digital marketing platform, with mobile commerce sales expected to account for ________ percent of all e-commerce sales by 2028.
A) 17
B) 25
C) 48
D) 63
E) 91
Answer: D
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships.
Difficulty: Easy
116) The technology that can gather and analyze huge volumes of data and learn to perform tasks that have typically required human intelligence but perform them much faster and with greater analytical capacity is called ________.
A) big data
B) analytics
C) artificial intelligence
D) the Internet of Things
E) digital thinking
Answer: C
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships.
Difficulty: Easy
117) Chatbots and digital assistants can interact directly with customers to provide instant responses, personalized recommendations, and seamless customer support are examples of ________.
A) desktop computing
B) data analytics
C) the World Wide Web
D) artificial intelligence
E) digital learning
Answer: D
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships.
Difficulty: Easy
118) Government agencies design ________ to encourage energy conservation and discourage smoking, junk food consumption, and drug use.
A) club marketing programs
B) social marketing campaigns
C) consumer-generated marketing campaigns
D) ambush marketing campaigns
E) frequency marketing programs
Answer: B
AACSB: Analytical thinking
Skill: Concept
Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships.
Difficulty: Easy
119) As part of the rapid globalization of today's economy, companies are selling more domestically produced goods in international markets and ________.
A) taking a local view of their industry
B) purchasing more supplies abroad
C) reducing competition within their industry
D) downplaying concerns for social responsibility
E) competing solely in traditional marketplaces
Answer: B
AACSB: Diverse and multicultural work environments
Skill: Concept
Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships.
Difficulty: Moderate
120) Iceco Inc., an ice cream manufacturing company, encourages all stakeholders, including the top management and all employees, to consider individual and community welfare in their dayto-day decisions. This action undertaken by Iceco reflects ________.
A) environmentalism
B) social responsibility
C) the selling concept
D) partner relationship management
E) marketing myopia
Answer: B
AACSB: Analytical thinking
Skill: Application
Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships.
Difficulty: Challenging
121) Marketing in the nonprofit sector is applied in all EXCEPT which one of these ways?
A) to promote their mission
B) to increase memberships
C) to publicize the organization's supporters
D) to attract support
E) to encourage donor support
Answer: C
AACSB: Analytical thinking
Skill: Concept
Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships.
Difficulty: Moderate
122) A museum targeting different demographic groups to increase attendance is an example of ________ marketing.
A) affinity
B) not-for-profit
C) societal
D) evangelism
E) affiliate Answer: B
AACSB: Analytical thinking
Skill: Application
Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships.
Difficulty: Moderate
123) Your state's department of education has budgeted a significant amount of money for a radio, print, television, and online advertising campaign emphasizing the long-term benefits, both educationally and professionally, of reading every day. This is an example of a(n) ________ marketing campaign.
A) perspective
B) social
C) inbound
D) consumer-generated
E) affiliate
Answer: B
AACSB: Analytical thinking
Skill: Application
Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships.
Difficulty: Moderate
124) Which statement about artificial intelligence (AI) is correct?
A) Eventually, AI will completely replace human planning and thinking.
B) AI content is more reliable than human generated content and does not need to be checked.
C) Humans with AI will replace humans without AI.
D) AI can execute marketing concepts but it cannot generate new ideas.
E) AI is only being applied in a few select areas of marketing.
Answer: C
AACSB: Analytical thinking
Skill: Application
Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships.
Difficulty: Challenging
125) When a firm, such as Ben & Jerry's, is civic minded and socially responsible, they are practicing ________.
A) pure capitalism
B) cronyism
C) caring capitalism
D) prosperity marketing
E) mission-centered marketing
Answer: C
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships.
Difficulty: Easy
126) Which of these trends is NOT one of the major trends shaping marketing?
A) rapid globalization
B) explosive growth in digital technology
C) growth of not-for-profit marketing
D) renewed focus on selling
E) sustainable marketing
Answer: D
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships.
Difficulty: Easy
127) Which of these is NOT one of the ways firms use big data in their marketing efforts?
A) to gain deep customer insights
B) to create personalized marketing efforts
C) to increase the speed of marketing analysis
D) to improve customer engagement
E) to provide better customer service
Answer: C
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships.
Difficulty: Moderate
128) Many company and brand websites also serve as online brand communities, where customers can congregate and exchange brand-related interests and information.
Answer: TRUE
AACSB: Application of knowledge Skill: Concept
Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships.
Difficulty: Moderate
129) The Internet of Things is a new product created by multiple companies working together. Answer: FALSE
AACSB: Application of knowledge
Skill: Concept
Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships.
Difficulty: Easy
130) Organizations choose to use only a few of the available online and social media. Using multiple social media results in confused fans.
Answer: FALSE
AACSB: Application of knowledge Skill: Application
Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships.
Difficulty: Challenging
131) Social media marketing offers an ideal platform for real-time marketing. Answer: TRUE
AACSB: Analytical thinking Skill: Application
Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships.
Difficulty: Moderate
132) McDonald's is an American restaurant with limited global exposure. Answer: FALSE
AACSB: Application of knowledge Skill: Application
Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships.
Difficulty: Easy
133) What is "not-for-profit marketing," and why has it expanded in recent years?
Answer: Not-for-profit marketing is used by various nonprofit organizations such as universities, foundations, hospitals, museums, and other organizations to raise funds. This sector has grown significantly as the competition for donor dollars and grant money has increased.
AACSB: Application of knowledge
Skill: Application
Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships.
Difficulty: Easy
134) How can digital technologies help companies engage customers with more realistic customer experiences?
Answer: Augmented reality (AR) and virtual reality (VR) are opening the doors for virtual "try before you purchase" experiences. Customers can now use AR to see how a piece of IKEA furniture would look in their office or home or what a pair of Ray-Bans would look like on them before deciding to buy. A customer planning a vacation can strap on an Apple Vision Pro headset and be immediately transported to the glaciers of Alaska or the sunny beaches of Jamaica. The customer can experience a walk through of a suite in a resort, check out the view from the balcony, and even take a stroll around the pool area. These technologies can anchor customer expectations, helping companies manage customer satisfaction and, therefore, customer loyalty and profitability.
AACSB: Analytical thinking
Skill: Application
Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships.
Difficulty: Easy
135) Explain how the growth of digital technology has transformed the way in which companies conduct business today.
Answer: At the most basic level, marketers set up company and brand websites that provide information and promote the company's products. Many of these sites also serve as online brand communities, where customers can congregate and exchange brand-related interests and information. Beyond brand websites, most companies are also integrating social and mobile media into their marketing mixes.
AACSB: Analytical thinking
Skill: Concept
Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships.
Difficulty: Moderate
136) How are local retailers affected by global competition?
Answer: A local retailer might have global suppliers and customers. The retailer's goods may come from abroad, or components of those goods may be produced or assembled abroad. In addition, a local retailer may also sell goods over the Internet to international customers.
AACSB: Diverse and multicultural work environments
Skill: Concept
Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships.
Difficulty: Moderate
137) Discuss the concept of omnichannel marketing.
Answer: Importantly, online, mobile, and social media technologies should not be stand-alone marketing efforts. They must be carefully integrated with each other and with nondigital efforts. Today's consumers routinely navigate across both the physical and digital worlds. They seek omnichannel brand experiences in which their brand engagement and buying span brick-andmortar, online, mobile, social media, and other channels and platforms. Companies must integrate all of their marketing activities in an omnichannel marketing effort that helps customers to seamlessly navigate across channels at different stages of the customer journey, from initial awareness and engagement through purchase, loyalty, and brand advocacy.
AACSB: Analytical thinking
Skill: Concept
Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships.
Difficulty: Moderate
138) Discuss how artificial intelligence is currently used in marketing.
Answer: The use of AI is revolutionizing marketing by helping to automate many analytical and creative tasks that are typically done by humans but doing them faster, often better, and at lower costs. AI is being applied in almost every area of marketing. Here's just a partial list of how marketers are using AI: Data gathering, analysis, and insights; customer engagement and personalization; idea generation; marketing content creation; and customer service.
AACSB: Analytical thinking
Skill: Concept
Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships.
Difficulty: Moderate
139) What caution must be taken when using AI in marketing?
Answer: In many areas, AI will never completely replace human planning and thinking. AI responses are only as good as the queries that human planners make and their ability to turn the responses into effective actions. Also, AI can sometimes get caught up in its own "hallucinations," where its reasoning generates responses that are factually incorrect, misleading, or even entirely fabricated. In the end, marketers must assess and use what AI reveals, making good decisions based on selected insights.
AACSB: Analytical thinking
Skill: Concept
Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships.
Difficulty: Moderate
140) How do today's consumers impact the firm's social responsibility efforts?
Answer: Today's consumers are more focused on sustainability and social responsibility than in the past. Experts anticipate this focus will continue to grow. In response, marketers are reexamining their social responsibilities and their relationship with the very earth that sustains us. Some companies resist these pressures, budging only when forced by legislation or organized consumer outcries. But most companies now view sustainable marketing as an opportunity to do well by doing good. They seek ways to profit by serving immediate needs and the best long-run interests of their customers and communities.
AACSB: Analytical thinking
Skill: Concept
Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships.
Difficulty: Challenging
141) Amazon accounts for 47% of all online sales in the United States. How much were total U.S. online revenues in 2021 if Amazon's revenues for that year were $440 billion?
A) $206.8 billion
B) $936.2 billion
C) $561.7 billion
D) $1,310.7 billion
E) $749 billion
Answer: B
AACSB: Analytical thinking
Skill: Application
Objective: LO 1.1: Define marketing and outline the steps in the marketing process.
Difficulty: Moderate
142) Amazon's revenue averages $823,463 every minute of every day. Approximately how much revenue does Amazon generate every 24-hour period?
A) $600 million
B) $1 billion
C) $1.2 billion
D) $450 million
E) $823 billion
Answer: C
AACSB: Analytical thinking
Skill: Application
Objective: LO 1.1: Define marketing and outline the steps in the marketing process.
Difficulty: Moderate
143) Assume Facebook computes the value of a single user to be $1.33 each per month. How much is the value of Facebook's monthly 2.9 billion member user base?
A) $2.724 billion
B) $2.011 billion
C) $3.749 billion
D) $7.820 billion
E) $3.724 billion
Answer: E
AACSB: Analytical thinking
Skill: Application
Objective: LO 1.1: Define marketing and outline the steps in the marketing process.
Difficulty: Easy
144) Ninety-four percent of Americans believe it is dangerous to send a text while driving. How many adults recognize the danger of texting and driving if there are 208.9 million adults living in the United States?
A) 196.4 million
B) 208.9 million
C) 222.2 million
D) 211.5 million
E) 157.1 million
Answer: A
AACSB: Analytical thinking
Skill: Application
Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts.
Difficulty: Easy
145) Mahali Mzuri luxury tent accommodations during the low season cost $950 per night per person. If they are at capacity of 27 people a night, how much revenue will they generate per week?
A) $6,650
B) $51,300
C) $25,650
D) $179,550
E) $230,850
Answer: D
AACSB: Analytical thinking Skill: Application
Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts.
Difficulty: Moderate
146) Firm XYZ estimates the size of their target market in dollar value is about $450 million. They believe they can bump their market share to 11% by next year. What is the size of Firm XYZ's market?
A) $2.5 million
B) $12.5 million
C) $49.5 million
D) $58.5 million
E) $499.5 million
Answer: C
AACSB: Analytical thinking Skill: Application
Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts.
Difficulty: Easy
147) Jared's annual income is $1,834,000 and he splurged and purchased a Patek Philippe watch for $328,000. What percentage of his income did he spend on the watch?
A) 33.4%
B) 17.9%
C) 9.4%
D) 45.14%
E) 56.9%
Answer: B
AACSB: Analytical thinking Skill: Application
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Moderate
148) Firm XYZ spent $6 million on advertisement to reach 15 million people using a high profile time slot on television. How much did the ad cost per viewer?
A) 60 cents per viewer
B) $4 per viewer
C) $40 per viewer
D) 40 cents per viewer
E) $1.50 per viewer
Answer: D
AACSB: Analytical thinking
Skill: Application
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Moderate
149) Firm XYZ created a competition for the best customer-generated marketing idea for their product. The prize was a $900,000 award with the winner receiving the entire amount. However, after judging, it was determined to be a five way tie. How much did each winner receive?
A) $180,000 each
B) $450,000 each
C) $900,000 each
D) $225,000 each
E) $300,000 each
Answer: A
AACSB: Analytical thinking
Skill: Application
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Easy
150) What is the customer lifetime value of someone who spends an average of $130 week and will be a good customer for 15 years?
A) $88,400
B) $20,280
C) $101,400
D) $6,760
E) $13,000
Answer: C
AACSB: Analytical thinking
Skill: Application
Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.
Difficulty: Moderate