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A _____ is a business structure of interdependent organizations that reaches from the point of product origin to the consumer.
a. facilitating agency or place member
b. marketing mix intermediary
c. selective distribution channel
d. marketing channel or channel of distribution
e. transportation channel or channel of movement

ANS: D
This is the definition of a marketing channel, also called the channel of distribution.

McKesson Wholesalers provides health care products to pharmacies. It purchases bandages, gauze, antibacterial cream, and ointments from a variety of different manufacturers and resells them to pharmacies so that many of the items a customer might need for a cut will be available in the store. McKesson is aiding consumers by overcoming a:
a. spatial discrepancy
b. discrepancy of quantity
c. discrepancy of assortment
d. demand discrepancies
e. discrepancy of possession

ANS: C
A manufacturer may only produce one product, yet additional products may be required to actually use the first product. This creates a discrepancy of assortment.

Marketing channels make distribution simpler by reducing the number of transactions required to get products from manufacturers to consumers. This is called:
a. forward integration
b. contact efficiency
c. elimination of temporal discrepancies
d. sorting
e. reciprocity

ANS: B
Marketing channels provide contact efficiencies by reducing the number of stores customers must shop in to complete their purchases.

Marketing channels perform all of the following logistical activities EXCEPT:
a. sorting
b. storing
c. physically distributing
d. risk taking
e. breaking bulk

ANS: D
Risk taking is a transactional activity. See Exhibit 13.2

All of the following are sorting activities EXCEPT:
a. assorting
b. accumulation
c. sorting out
d. allocation
e. possession

ANS: E
See Exhibit 13.2.

Companies selling standardized items of moderate or low value to other businesses (not to consumers) often use:
a. retailers
b. industrial distributors
c. wholesalers
d. bulk breakers
e. industrial resellers

ANS: B
In many ways, an industrial distributor is like a supermarket for organizations.

Which of the following enables a company to use another manufacturer's already established channel?
a. strategic channel alliances
b. relationship channels
c. reverse channels
d. multiple distribution systems
e. nontraditional channelization

ANS: A
Alliances are used most often when the creation of marketing channel relationships may be too expensive and time-consuming.

Selfridges is the second-largest department store in Great Britain. It works with House of Frasier, one of its competitors, to reduce operating costs by sharing channels of distribution to ship goods from 1,500 plus suppliers. Selfridges and House of Frasier are engaged in:
a. vertical conflict
b. an integrated supply chain
c. a strategic channel alliance
d. an information-based distribution channel
e. a distribution cooperative

ANS: C
A strategic channel alliance is a cooperative agreement between businesses to use each other's already established distribution channels.

A situation that occurs when one marketing channel member intentionally affects another member's behavior is called:
a. channel power
b. channel control
c. channel conflict
d. channel dominance
e. channel inversion

ANS: B
Channel control is when one channel member actually affects another.

DeBeers sells most of the diamonds it produces to industry. The company controls over 90 percent of the market and has great power over its distributors. In its marketing channel, DeBeers would be considered a:
a. channel authority
b. channel member
c. channel leader
d. channel gatekeeper
e. power broker

ANS: C
The channel captain is a member of a marketing channel that exercises authority and power over the activities of other channel members. DeBeers has control over delivery, inventory, etc.

Which of the following businesses is most likely to have a problem with distribution because production and consumption of the product occurs simultaneously?
a. a company that manufacturers bicycles
b. a hair salon
c. a retailer that sells mattresses
d. a soft-drink bottler
e. a wholesaler that specializes in athletic equipment

ANS: B
A hair salon is the only service listed.

Small neighborhood florists, shoe stores, and ethnic food markets are most likely to be:
a. supercenters
b. franchise outlets
c. membership clubs
d. chain stores
e. independent retailers

ANS: E
Most retailers are independent retailers operating one or a few stores in their community.

Which type of retail store would typically have the highest labor costs?
a. warehouse club
b. department store
c. off-price store
d. off-price retailer
e. discount store

ANS: B
A department store carries a wide variety of shopping and specialty goods in several departments and provides a high level of service, all of which is labor intensive and adds to the cost of doing business.

The _____ at John Lewis, Britain's largest department store chain, selects the merchandise for his or her department and is often responsible for its promotion and for managing the personnel in that department.
a. buyer
b. purchasing agent
c. retail broker
d. merchandiser
e. franchisee

ANS: A
Each department in a department store is usually headed by a buyer who selects the merchandise mix for the department and may also choose the promotional devices and personnel for that department.

Which of the following statements about specialty stores is true?
a. Customers usually consider price to be the most important factor in their selection of a specialty store.
b. Customers at specialty stores are not concerned with the distinctiveness of the merchandise or the store's physical appearance.
c. Specialty stores typically avoid price wars.
d. Specialty stores are ineffective test markets.
e. A typical specialty store carries a wider assortment of specialty merchandise than department stores.

ANS: C
Customers usually consider price to be of secondary importance in their selection of a specialty store. Customers at specialty stores are very concerned with the distinctiveness of the merchandise or the store's physical appearance. Specialty stores provide a low-risk testing ground for new products. A typical specialty store carries a narrower assortment of specialty merchandise than department stores

Kroger is the second largest supermarket chain in the U.S. Which of the following is the most likely reason why Kroger supermarkets sell all types of foodstuffs as well as nonfood products including a wide range of eyewear and accessories?
a. consumer demand for one-stop shopping often leads to scrambled merchandising
b. the fulfillment of the wheel of retailing hypothesis
c. inflationary economic climate
d. repositioning as a discounter
e. growth of convenience merchandising

ANS: A
In many cases, supermarkets offer a wide variety of nontraditional goods and services under one roof (a strategy called scrambled merchandising) to respond to consumers who want convenience.

Safeway, Avanza (for the Hispanic market), Publix, and other supermarket chains offer a variety of nontraditional goods and services such as video rental, flower shops, dry cleaning, and banking. This practice is called:
a. convenience merchandising
b. retail wheeling
c. specialty service
d. trade-up positioning
e. scrambled merchandising

ANS: E
In many cases supermarkets offer a wide variety of nontraditional goods and services under one roof, a strategy called scrambled merchandising.

Kmart utilizes a strategy of moderate to low prices on large quantities of products and lower levels of service to stimulate a high turnover of inventory. Kmart offers a wide variety of different product lines. Kmart is an example of a:
a. factory outlet
b. mass merchandiser
c. convenience store
d. franchising operation
e. specialty store

ANS: B
Mass merchandising is the retailing strategy whereby retailers use moderate to low prices on large quantities of merchandise and lower service to stimulate high turnover of products

Which type of retailing is the selling of products by representatives who work door-to-door, office-to-office, or at home parties?
a. personal marketing
b. remote retailing
c. direct retailing
d. off-site retailing
e. primary retailing

ANS: C
This is the definition of direct retailing.

Brands that are designed and developed using the retailer's name are called:
a. signature brands
b. exclusive brands
c. generic brands
d. private brands
e. specialty brands

ANS: D
Private brands are more profitable for retailers than national brands

Why is the selection of a retail location so critical to a store's success?
a. Location affects pricing decisions but does not affect store image.
b. Customers will not drive out of their way to find a store.
c. A location decision ties up funds that will not appreciate or gain in value.
d. A location decision typically requires long-term commitment of resources.
e. Employee density is affected by the area in which the store is located.

ANS: D
One critical point about location choice is that it ties up a large amount of resources and is difficult to change.

_____ are stores that consumers purposely plan to visit. They are often built as freestanding stores.
a. Destination stores
b. Benefit retailers
c. Relationship builders
d. Lifestyle stores
e. M-stores

ANS: A
Consumers seek out destination stores.

A common practice among most retailers that seeks to broaden customers' original purchases with related items is called:
a. suggestion selling
b. trading up
c. bait and switch
d. comprehensive selling
e. interactive selling

ANS: A
Suggestion selling is common in helping customers recognize true needs

Whenever a customer opens an account at First Southern National Bank, a teller or account representative asks the customer whether she needs a CD, online banking or other services. In other words, the account representative engages in:
a. suggestion selling
b. trading up
c. bait and switch
d. customer relationship retailing
e. service-disguised selling

ANS: A
Suggestion selling seeks to broaden customers' original purchase with related items

One of the new developments in retailing is m-commerce. M-commerce refers to the ability to:
a. use unique communication techniques to send advertising messages
b. create situations in which the AIDA technique is effective
c. more efficiently manage customer demand with inventory
d. shop using wireless mobile devices
e. motivate consumers to buy more by creating more feedback channels

ANS: D
M-commerce goes beyond text message advertisements to allow consumers to purchase goods and services by using wireless mobile devices.

Wal-Mart, the world's largest retailer by revenue, announced that it will get back to its founder's roots by initiating more price cuts. Critics claimed that the giant was getting away from its original focus because it posted relatively high gross profit margins. CEO Mike Duke assuaged critics by saying Wal-Mart's $400 billion in sales will become even larger because the price cuts will attract more customers and it will lower its costs of goods sold.

____ 26. Refer to Wal-Mart. Wal-Mart's gross margin is the:
a. total sales from all of its stores worldwide
b. amount of money it makes as a percentage of sales after the cost of goods sold is subtracted
c. amount of money it makes as a percentage of sales before taxes
d. amount of money it makes as a percentage of sales after all costs are subtracted
e. net profit it earns after all expenses and taxes are subtracted

ANS: B
Gross margin is the money the retailer makes as a percentage of sales after the costs of goods sold is subtracted.

The main function of a promotional strategy is to:
a. convince the target customers that a firm's products offer competitive advantages over those of its competition
b. find a niche in the marketplace for the firm and its products
c. provide the firm with research information about the success of its marketing effort
d. create efficient distribution channels
e. guarantee control over the length of the stages of the product life cycle

ANS: A
The function of a promotional strategy is to convince the target customers that the goods and services offered provide a competitive advantage over the competition.

Communication to large audiences, usually through a medium such as television or a newspaper, is called _____ communication.
a. mass
b. feedback-proof
c. referential
d. interpersonal
e. public

ANS: A
This is the definition of mass communication.

Progressive Bank uses billboard, television, newspaper, and magazine advertising to inform consumers about their products. This is an example of _____ communication.
a. referential
b. mass
c. factual
d. interpersonal
e. public

ANS: B
Mass communication is the communication of a concept or message to large audiences.

Just as Melanie was in sight of a billboard for the McDonald's, a police car drove by with its lights flashing. Melanie was so concerned with watching where the police car went that she totally missed seeing the fast-feeders billboard. In terms of the communication process, the police car acted as:
a. media interruptus
b. negative feedback
c. static
d. explicit communication
e. noise

ANS: E
Noise is anything that interferes with, distorts, or slows the transmission of information.

Arc Promotional Agency created the first mobile blogging competition and online reality show for SingTel, a telecommunications company in Singapore. The campaign let SingTel customers pick their dream couple and follow their lives through a moblog. SingTel used _____ to communicate with its consumers.
a. a corporate blog
b. an interactive Web site
c. narrowcasting
d. a noncorporate blog
e. a market concentration strategy

ANS: A
Corporate blog are blogs that are sponsored by a company and maintained by one or more of the company's employees.

_____ is any form of impersonal (one way) paid communication in which the sponsor or company is identified.
a. Advertising
b. Publicity
c. Promotion
d. Public relations
e. Nonpaid communication

ANS: A
This is the definition of advertising.

To increase its revenues, US Airways has decided to sell space on the tray tables to companies that would like to use this unique channel for their promotional messages. In terms of the promotional strategy, the tray tables will be used for:
a. implicit communications
b. publicity
c. sales promotion
d. public relations
e. advertising

ANS: E
Advertising is a form of sponsor-paid, impersonal one-way mass communication

The marketing function that evaluates public attitudes, identifies areas within the organization that are of public interest, and executes a program of action to gain public understanding is:
a. public relations
b. advertising
c. implicit communications
d. personal selling
e. sales promotion

ANS: A
This is a description of how public relations is used in marketing

New Moon, the second movie in the vampire love-saga, has been promoted through TV, newspaper, magazine, Web sites, and merchandise. To make sure that all of the promotional messages are coordinated, the studio which produced it should use the:
a. integrated marketing communications approach
b. integrated communications management approach
c. AIDA concept
d. interpersonal and mass communications approach
e. coordinated market management approach

ANS: A
IMC is the careful coordination of all promotional messages for a product to assure the consistency of messages at every contact point

Because dishwashers are in the maturity stage of their product life cycle, which promotional mix element should NOT be emphasized in the marketing of this product?
a. public relations
b. persuasive advertising
c. sales promotion
d. reminder advertising
e. personal selling

ANS: A
During the maturity stage, persuasive and reminder advertising are emphasized, as well as sales promotion. Personal selling is maintained, while the usefulness of public relations is doubtful

The manufacturer of Robitussin cough and cold medicine provides sturdy displays for retailers, such as Walgreen's, Kroger, and Wal-Mart, to help merchandise all the Robitussin products consumers might need for the cold and flu season. Robitussin is using a(n) _____ promotional strategy.
a. kinetic
b. inert
c. push
d. advertorial
e. pull

ANS: C
Push strategy is a marketing strategy on a wholesaler or a retailer to carry and sell the manufacturer's product, and a display will encourage them to merchandise the products the way the manufacturer wants it displayed.

Kimberly-Clark uses television advertising and couponing and bonus pack sales promotions to increase sales of its Kleenex brand of facial tissues. Which promotional strategy is Kimberly-Clark using?
a. push
b. personal selling
c. pull
d. reinforcing
e. kinetic

ANS: C
A manufacturer using the pull strategy focuses its promotional efforts on the consumer.

In 2009, Verizon introduced the Droid, billed as the "anti-iPhone," targeted primarily to 20-40 year-old males concerned with functionality. The launch of the new smart phone was supported by a $100 million promotional campaign that included TV and billboard advertisements and in-store displays as well as digital media. The positioning of the brand is summed up in the promotional tagline, "In a world of doesn't, Droid does." The world of "doesn't" is an indirect swipe at the iPhone's shortcomings. One unique feature of the Droid is voice-activated web-browsing through cutting-edge Google software. In contrast to the iPhone's "There's an app for that" campaign, the ads and microsite, Droiddoes.com, look more like a sci-fi movie than traditional advertising.

____ 39. Refer to Droid. At Droiddoes.com, consumers can post questions or comments and get feedback from the company or other consumers. This site is sponsored and maintained by Verizon, which is an example of a(n):
a. Internet portal
b. push strategy
c. corporate blog
d. Web link
e. interaction point

ANS: C
Corporate blogs are sponsored by a company or one of its brands and maintained by one or more of the company's employees.

Refer to Droid. Verizon took great care in coordinating all elements of its promotional mix to ensure the same message was being sent. The science-fiction positioning includes techno-sounding music, dark colors, and a young man in the ads and the videos on the Web site and even new shirts for the employees in Verizon retail stores. This is an example of:
a. public relations
b. integrated marketing communications
c. decoding
d. promotional marketing communications
e. the AIDA concept

ANS: B
Integrated marketing communications is the careful coordination of all promotional messages for a product or a service to assure the consistency of messages at every contact point where a company meets the consumer.

Amtrak is taking the gloves off in advertisements and belittling its major competition, which is the airline shuttles. Amtrak's new name for its Metroliner is The Smart Shuttle. Gone are ads that were inner-directed and sold the Metroliner on its leisurely pace. In their place are ads showing rapid shots of the sleek train and business executives conducting no-nonsense meetings "eyeball-to-eyeball." The campaign, which includes television, radio, print, billboards, and posters in commuter railroad cars, targets business travelers, who, Amtrak says, incorrectly believe the train takes far longer than the airplane to travel between two cities. One television spot opens with a shot of airplanes stacked up in a tarmac traffic jam. Another shows a business traveler lumbering into the airport during a snowstorm. The announcer says, "Schedule a meeting. Take the shuttle. Then cross your fingers." The poor soul looks up at the departure board and sees a row of "Canceled" signs. The announcer continues, "Schedule a meeting. Take the Metroliner. Then cross your legs."

____ 41. Refer to Amtrak. The plan to optimally utilize television, radio, print, and out-of-home vehicles to target business travelers is called a:
a. promotional strategy
b. marketing mix
c. promotion goal
d. selling plan
e. publicity plan

ANS: A
A promotional strategy is a plan for the optimal use of the promotion elements

Kraft's marketing efforts for its Macaroni & Cheese include television commercial and magazine inserts. These activities are all activities associated with:
a. advertising
b. publicity
c. public relations
d. sales promotions
e. direct marketing

ANS: A
Advertising is any form of impersonal, paid communications in which the sponsor is identified.

When Gillette introduced its Venus razor for women several years ago, it spent $100 million on advertising and other promotions and successfully boosted its market share. As an advertising consultant, you would advise Gillette to now:
a. double its advertising budget in order to double its market share
b. maintain the current advertising budget and continue to focus on brand awareness and market share gains
c. slowly increase the amount spent on advertising and promotion to offset competitive advertisements
d. shift the budget dollars from advertising to sales promotion and personal selling due to a change in the product life cycle stage
e. focus on maintaining market share and spend proportionately less on advertising because additional expenditures would reap diminishing benefits

ANS: E
The advertising response function shows that beyond a certain level of spending for advertising and sales promotion, diminishing returns set in. As a mature, successful company, Gillette can choose to spend only as much as needed to maintain market share.

One method used for setting advertising objectives is:
a. campaign budgeting
b. objective and task
c. the DAGMAR approach
d. percentage of sales
e. contribution margin

ANS: C
DAGMAR stands for Defining Advertising Goals for Measured Advertising Results.

A print ad for Wydham hotels and resorts shows how different groups can benefit from their vacation whether it be playing as a family, a woman getting a massage, or a young couple enjoying some quality time together. Which executional style is being used in this ad?
a. demonstration
b. lifestyle
c. fantasy
d. mood or image
e. testimonial

ANS: B
See Exhibit 17.3.

Ads for Oreck vacuums claim that it removes 99% of allergens with its heppa filter, which is based on testing from an independent laboratory. Which executional framework is this?
a. factual
b. demonstration
c. scientific
d. rational
e. testimonial

ANS: C
This ad is using research or scientific evidence, which is characteristic of a scientific executional style.

All of the following statements about postcampaign evaluation are true EXCEPT:
a. Marketers spend little time studying advertising effectiveness because there are so many variables that shape the effectiveness of an ad.
b. Testing ad effectiveness can be done either before or after the campaign.
c. Most advertising campaigns aim to create an image for the product instead of asking for action, so their real effect is unknown.
d. Even if an ad campaign has been particularly successful, advertisers will typically conduct a postcampaign evaluation.
e. Evaluating an advertising campaign can be the most demanding task facing advertisers.

ANS: A
Even though there are so many variables that shape the effectiveness of an ad, marketers spend a considerable amount of time studying advertising effectiveness and its probable impact on sales, market share, or awareness.

Products such as surfboards, swimsuits, lawn mowers, allergy medication, and flower seeds are most likely to be advertised with a _____ media schedule.
a. flighted
b. pulsing
c. seasonal
d. continuous
e. consecutive

ANS: C
Products that are used more during certain times of the year tend to follow a seasonal strategy.

Which of the following involves the association of a for-profit company with a nonprofit organization?
a. advocacy publicity
b. lobbying
c. product placement
d. advertising
e. cause-related marketing

ANS: E
Through cause-related marketing, the company's product is promotion and money is raised for the nonprofit.

Retailers are using social media in unprecedented levels, with more than half of them using it for the 2009 holiday season. That's a monumental increase given the fact that only 4% used it in 2007. The majority focused on Facebook (76%), but they also used Twitter and MySpace. Toys 'R' Us was one of those retailers. The retailer enlisted basketball superstar, Shaquille O'Neal, in a "Join Shaq Give Back" promotion in which $1 was donated to a charity for every new Facebook fan. Shaq tweeted about his "Shaq-a-Claus" challenge to his 2.6 million followers. The Facebook site also focused on parents with the song "I don't want to grow up."

____ 50. Refer to Toys 'R' Us. By donating $1 to charity for every new Facebook fan, Toys 'R' Us is using:
a. admiration
b. cause-related marketing
c. product publicity
d. philanthropic marketing
e. ethical marketing

ANS: B
Cause-related marketing is a type of sponsorship involving the association of a for-profit company and a nonprofit organization.

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