Question 1: As consumers shift their support to firms that do meet their needs:
firms should increase promotional expenditure.
firms should try to attract new customers.
firms must immediately adopt their competitors' strategies.
laggard businesses are forced to either improve or get out of the way.
Question 2: A S.W.O.T. analysis
should help a manager develop a strategy that leads to a competitive advantage.
seeks to improve strategy planning by scanning for warnings, omens, and tips about competitors' plans.
is not necessary if competitors have already entered the market.
defends against potential competitive threats by planning specific safeguards, weapons, or tactics.
Question 3: The monopolistic competition that is typical of the U.S. economy:
always leads to higher prices, but it may not lead to higher consumer satisfaction.
is a problem because it does not result in products that reflect consumer's social values.
is the result of consumer preferences.
is the result of manipulation of markets by business firms.
Question 4: Which of the following statements BEST describes a marketing manager?
A marketing manager should know that most consumer complaints do not require a response because the consumer's dissatisfaction is beyond the control of the firm.
A marketing manager should recognize that many consumers who complain are troublemakers and that not much can or should be done about their complaints.
A marketing manager should assume that most customers who are dissatisfied will complain, but that people who are satisfied will not.
A marketing manager should be concerned that many of the complaints that are reported are never resolved.
Question 5: If a profit-oriented marketing manager does not know the exact shape of the firm's demand curve, marginal analysis:
is useless.
will suggest the same price as break-even analysis.
may be useful anyway since a profitable region usually surrounds the best price.
suggests that the only sensible approach is to use average-cost pricing.
Question 6: Sellers sometimes take the auction approach and adapt it by using sequential price reductions over time. When or where is this approach most commonly used?
With products that have a short life
When the product supply is unlimited
With heavy equipment manufacturing machinery
When competition is absent
Question 7: Given the following data, compute the break-even point (BEP) in DOLLARS. Selling price = $2.00, Variable cost = $1.00, Fixed cost = $150,000
$300,000
$400,000
$150,000
$200,000
Question 8: Marketers estimating the demand curve:
do not have to worry about price competition due to the nature of the demand curve.
can use marginal analysis to help it maximize profits.
will have to charge the market price which is set by the intersection of industry supply and demand.
could use marginal analysis to compare alternatives--but this would not help in pricing because this method focuses on selling one more unit and therefore ignores total profitability.
Question 9: In the development of a marketing plan, blending the marketing mix would not generally involve
predicting future behavior.
product lines.
product life cycle.
sales promotion.
Question 10: Gabriella Sax believes that customers in her dress shop find certain prices very appealing. Between these price levels, all prices are seen as roughly the same, and price cuts in these ranges generally do not increase the quantity sold (i.e., the demand curve tends to drop vertically within these price ranges). Therefore, Sax prices her items as close as possible to the top of each such price range. This is referred to as:
bait pricing.
leader pricing.
prestige pricing.
psychological pricing.
Question 11: Why do many department stores seek a markup of about 30% when some discount houses operate on a 20% markup? Identify and explain at least three reasons.
Question 12: Should a marketing manager or a business refuse to produce an "energy-gobbling" appliance that some consumers are demanding? Should a firm install an expensive safety device that will increase cost but that customers do not want? Are the same principles involved in both these questions? Explain.