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Chapter 1An Overview of Marketing

TRUE/FALSE
1. Marketing is defined as producing, promoting, and selling products.
ANS: F
Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and
exchanging offerings that have value for customers, clients, partners, and society at large.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel . )no/ledge
0. According to the American Marketing Association, marketing is the activity, set of institutions, and
processes for creating, communicating, delivering, and exchanging offerings that have value for
customers, clients, partners, and society at large.
ANS: ! !S: 1 "#$: %1&1
!": AA'S# (eflective !hinking )*+: '#,* Model Strategy
MS': #-""MS -evel .. 'omprehension
1. An exchange cannot take place unless each party in the exchange has something that the other party
values.
ANS: ! !S: 1 "#$: %1&1
!": AA'S# (eflective !hinking )*+: '#,* Model Strategy
MS': #-""MS -evel .. 'omprehension
2. Sara -ee .ndustries spent considera3le money and time developing a crustless 3read. rior to the
introduction, the company had not conducted market research among its customers, 3ut it /as
confident that its science and technology department had produced a successful ne/ product. #ased on
this example, Sara -ee is a good example of a production&oriented company.
ANS: ! !S: 1 "#$: %1&0
!": AA'S# (eflective !hinking )*+: '#,* Model (esearch
MS': #-""MS -evel ... Application
4. 5nlike a production&orientated firm, a firm em3racing a sales orientation focuses on customer /ants
and needs so it can develop the 3est product at the lo/est cost that /ill re6uire very little selling effort.
ANS: F
A sales orientation is 3ased on the ideas that people /ill 3uy more goods and services if aggressive
sales techni6ues are used and that high sales result in high profits.
!S: 1 "#$: %1&0 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel .. 'omprehension
7. !he focus of a production&oriented firm is on /hat it can make or do 3est.
ANS: ! !S: 1 "#$: %1&0
!": AA'S# (eflective !hinking )*+: '#,* Model Strategy
MS': #-""MS -evel . )no/ledge
8. !he marketing concept states that the social and economic 9ustification for an organi:ation;s existence
is the satisfaction of customers; /ants and needs /hile meeting organi:ational o39ectives.
ANS: ! !S: 1 "#$: %1&0
!": AA'S# (eflective !hinking )*+: '#,* Model 'ustomer
MS': #-""MS -evel .. 'omprehension
<. !he ultimate goal of most market&oriented firms is profita3ility that results from satisfying the /ants
and needs of its consumers.
ANS: ! !S: 1 "#$: %1&0
!": AA'S# (eflective !hinking )*+: '#,* Model 'ustomer
MS': #-""MS -evel =. *valuation
>. !he societal marketing concept considers society;s long&term 3est interests along /ith the satisfaction
of customers; /ants and needs.
ANS: ! !S: 1 "#$: %1&0
!": AA'S# (eflective !hinking )*+: '#,* Model 'ustomer
MS': #-""MS -evel .. 'omprehension
1%. .ncreasingly /ell informed customers have shifted the po/er from manufacturers and retailers to
consumers.
ANS: ! !S: 1 "#$: %1&0 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel . )no/ledge
11. ersonnel in sales&oriented firms tend to 3e ?out/ard looking,@ focusing on selling /hat the market
/ants.
ANS: F
ersonnel in sales&oriented firms tend to 3e ?in/ard looking,@ focusing on selling /hat the
organi:ation makes rather than making /hat the market /ants.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel . )no/ledge
10. 'ustomer value is the relationship 3et/een company profits and company costs.
ANS: F
'ustomer value is the relationship 3et/een 3enefits and the sacrifice necessary to o3tain those
3enefits.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model 'ustomer MS': #-""MS -evel . )no/ledge
11. !he /ay to achieve customer satisfaction and value is to offer the lo/est price.
ANS: F
Marketers interested in customer value offer realistic prices and try to achieve customer satisfaction
and value 3y ensuring customer expectations are met or exceeded.
!S: 1 (*F: 8&< "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model 'ustomer MS': #-""MS -evel .. 'omprehension
12. 1A Systems is a company that uses computers to generate ne/ product prototypes. .t has generated
loyal 3usiness clients 3y providing the 3est customer support in the industry. !he company also
provides direct sales consultations that give its salespeople intimate kno/ledge a3out /hat exactly its
customers /ant. !his partnership 3et/een 1A Systems and its customers is relationship marketing.
ANS: ! !S: 1 "#$: %1&1
!": AA'S# (eflective !hinking )*+: '#,* Model 'ustomer
MS': #-""MS -evel ... Application
14. "nly a firm;s salespeople need to 3e customer oriented.
ANS: F
All employees need to 3e customer oriented 3ecause in the customer;s eyes, the employee Bregardless
of the position held in the organi:ationC is the firm and may 3e the only firm representative the
customer ever sees.
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)*+: '#,* Model 'ustomer MS': #-""MS -evel =. *valuation
17. (etailers /ho give their sales clerks the authority to handle customer complaints /ithout having to get
approval from a supervisor are using empo/erment.
ANS: ! !S: 1 "#$: %1&1
!": AA'S# (eflective !hinking )*+: '#,* Model 'ustomer
MS': #-""MS -evel ... Application
18. .n the early 1>0%s, Ford promised its customers any color vehicle they /anted as long as it /as 3lack.
Ford;s management assumed anyone 3uying a car /ould accept the color 3lack, so it made products
afforda3le 3y offering only one variety in large 6uantities. Ford is an example of a market&oriented
firm.
ANS: F
A market&oriented organi:ation recogni:es that different customers groups /ant different features or
3enefits.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model 'ustomer MS': #-""MS -evel ... Application
1<. Dhile most marketing organi:ations rely on various forms of promotion to succeed, sales&oriented
organi:ations make the most effective use of their entire marketing mix.
ANS: F
Sales&oriented firms usually rely more heavily on promotion alone than do market&oriented firms.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel .. 'omprehension
1>. A local grocer recently 3egan grouping its customers into specific groups 3ased on /hat they 3ought
and /hen they shopped. !he grocer then 3egan to schedule shipments of specific items 3ased on these
customer segments and to offer different promotions to different shopper groups. !his is an example of
'(M.
ANS: ! !S: 1 "#$: %1&1
!": AA'S# (eflective !hinking )*+: '#,* Model 'ustomer
MS': #-""MS -evel ... Application
0%.Salespeople /ho /ork for market&oriented organi:ations are generally perceived 3y their customers as
pro3lem solvers and important links to supply sources and ne/ products.
ANS: ! !S: 1 "#$: %1&1
!": AA'S# (eflective !hinking )*+: '#,* Model 'ustomer
MS': #-""MS -evel .. 'omprehension
01.E Marketing is important to 3usiness, so marketing should 3e part of the 9o3 of everyone in the
organi:ation, not 9ust those in marketing.
ANS: ! !S: 1 "#$: %1&2
!": AA'S# (eflective !hinking )*+: '#,* Model Strategy
MS': #-""MS -evel =. *valuation
MULTIPLE COICE
1. "ne facet of marketing is that it is:
a
.
an approach that focuses on maximi:ing sales
3
.
a short&term oriented approach to profit maximi:ation
c
.
an approach that re6uires diversity
d
.
a philosophy that stresses customer satisfaction
e
.
independent of value creation
ANS: A
Marketing has t/o facets. First, it is a philosophy, an attitude, a perspective, or a management
orientation that stresses customer satisfaction. Second, marketing is an organi:ation function and a set
of processes used to implement this philosophy.
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0. A 3usiness is concerned /ith many day&to&day activities. Some of the most important of these
activities are the planning and development of a product, its a3ility to communicate value, its pricing
policy, and the distri3ution strategy. !hese activities are all a part of:
a a control system
.
3
.
marketing
c
.
accounting
d
.
production
e
.
human resources
ANS: #
Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and
exchanging offerings that have value for customers, clients, partners, and society at large.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model ricing F '#,* Model roduct F '#,* Model Aistri3ution
MS': #-""MS -evel .= Analysis
1. GGGGG is a set of activities used to implement a management orientation that stresses customer
satisfaction.
a
.
lanning strategy
3
.
'ustomer management
c
.
Marketing
d
.
A control system
e
.
(eciprocity
ANS: '
!his is the focus of marketing.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model roduct MS': #-""MS -evel .. 'omprehension
2. !he American Marketing Association;s definition of marketing:
a
.
is limited to promotional activities
3
.
focuses on the value of empo/erment, team/ork, and customer value
c
.
sho/s ho/ marketing 3enefits the marketer
d
.
relies on the synergy created 3y exchange
e
.
includes creating, communicating, delivering, and exchanging offerings that have value
for customers, clients, partners, and society at large.
ANS: *
According to the American Marketing Association, marketing is the activity, set of institutions, and
processes for creating, communicating, delivering, and exchanging offerings that have value for
customers, clients, partners, and society at large.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel . )no/ledge
4. Dhich of the follo/ing occurs /hen people give up something in order to receive something they
/ould rather haveH
a
.
*xchange
3
.
Synergy
c
.
!ransformation
d
.
-everaging
e
.
(eciprocity
ANS: A
*xchange is people giving up something to receive something they /ould rather have.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model roduct MS': #-""MS -evel . )no/ledge
7. All of the follo/ing are necessary for exchange to occur *I'*!:
a
.
each party is capa3le of communication and delivery
3
.
each party signs a contract 3efore exchange occurs
c
.
each party 3elieves it is appropriate or desira3le to deal /ith the others
d
.
each party is free to accept or re9ect the exchange offer
e
.
each party must have something the other party considers to 3e valua3le
ANS: #
*xchange can occur /ithout a legal contract.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model 'ustomer MS': #-""MS -evel =. *valuation
8. A pro3lem facing the tim3er industry is the a3sence of any effective /ay to prove that rain forest
tim3er has 3een legally harvested. .n places like .ndonesia, as much as <% percent of tim3er availa3le
for sale is illegally cut. 'ompanies like !he Jome Aepot do not /ant to sell tim3er from illegally
logged forests even though the demand is great for tim3er from rain forests. Dhich of the follo/ing
conditions re6uired for an exchange to occur is missing /hen a company tries to sell illegally ac6uired
logs to !he Jome AepotH
a !here are more than t/o parties involved.
.
3
.
*ach party has something of value to 3ring to the exchange.
c
.
"ne party is free to accept the exchange offer.
d
.
*ach party 3elieves it is appropriate to deal /ith the other party.
e
.
No3ody sees the exchange as producing value.
ANS: A
For an exchange to occur, t/o or more parties must 3e involved. #oth parties are free to accept or
re9ect the exchange. .f !he Jome Aepot 3elieves the tim3er has 3een illegally harvested, then it /ill
not /ant to deal /ith the loggers.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model 'ustomer MS': #-""MS -evel ... Application
<. )ellogg;s is offering free A=As to consumers /ho collect five official 'ollection certificates from the
3ack panels of specially marked packages of )ellogg;s cereals and then mail them /ith the official
order form. Dithin >% days, these consumers /ill receive the movie of their choice. ABnC GGGGG /ill
occur /hen a movie fan mails in his or her certificates for a movie.
a
.
synergy
3
.
su3limation
c
.
exchange
d
.
entropy
e
.
reciprocity
ANS: '
For an exchange to occur, t/o or more parties must 3e involved. #oth parties are free to accept or
re9ect the exchange. Furthermore, each party must have something that is of value to the other party.
*ach party is capa3le of communication and delivery and 3elieves it is desira3le to do so. .n this case,
the value for )ellogg;s is customer loyalty. !he value for the customer is the cereal and free movie.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model 'ustomer MS': #-""MS -evel ... Application
>. For an exchange to take place:
a
.
there must 3e at least t/o parties involved
3
.
money must 3e used in the transaction
c
.
each party must feel o3ligated to accept the offer
d
.
at least one party must have something of value that the other party desires
e
.
neither party must communicate /ith the other
ANS: A
For exchange to occur, there must 3e at least t/o parties, each party has something that might 3e of
value to the other party, each party is capa3le of communication and delivery, each party is free to
accept or re9ect the exchange offer, and each party 3elieves it is appropriate or desira3le to deal /ith
the other party.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model 'ustomer MS': #-""MS -evel .. 'omprehension
1%. !he concept of exchange is important to marketing 3ecause:
a
.
if all the conditions for an exchange are in place, then the exchange /ill 3e completed
3
.
exchange provides money to marketers
c
.
marketing activities help to create exchange
d
.
marketing activities are a re6uirement for exchange to take place
e
.
money is the only medium of exchange for 3usiness marketers
ANS: '
Marketing activities help the exchange to take place, 3ut marketing can occur /ithout an exchange.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model 'ustomer MS': #-""MS -evel =. *valuation
11. #arry collects anti6ue /atches and has decided to sell a fe/ of them on e#ay. Some of the /atches he
/ants to sell are rare and very valua3le. Dhat condition is necessary for an exchange to occur 3et/een
#arry and a 3uyerH
a
.
Jis /atch should have a certificate of authenticity.
3
.
!he opening 3id must 3e lo/er than other /atches 3eing sold on the site.
c
.
#uyers must provide payment 3efore the item is shipped.
d
.
Aelivery must take place /ithin 0 days of the purchase.
e
.
otential 3uyers must 3e a3le to see the /atch and understand its 6ualities.
ANS: *
For an exchange to take place, there must 3e at least t/o parties, each party must have something the
other values, the parties must 3e a3le to communicate, each party must 3elieve that it is appropriate to
deal /ith the other, and each party must 3e free to accept or re9ect the exchange offer.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model 'ustomer MS': #-""MS -evel ... Application
10. All of the follo/ing are marketing management philosophies *I'*!:
a
.
sales orientation
3
.
societal marketing orientation
c
.
market orientation
d
.
profita3ility orientation
e
.
production orientation
ANS: A
!he four marketing philosophies are commonly referred to as production, sales, market, and societal
marketing orientations.
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11. .ndonesian logging companies harvest the rain forests for tim3er and assume that a market exists for
their products. !he typical .ndonesian logging company has aBnC GGGGG orientation.
a
.
exchange
3
.
product
c
.
production
d
.
sales
e
.
environmental
ANS: '
A production orientation is a philosophy that focuses on the internal capa3ilities of the firm rather than
on the desires and needs of the marketplace.
!S: 1 "#$: %1&0 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel ... Application
12. Firms /ith a GGGGG orientation focus on the internal capa3ilities of the firm rather than on the desires
and needs of the marketplace.
a
.
sales
3
.
production
c
.
market
d
.
customer
e
.
customer&3enefit
ANS: #
A production orientation is a philosophy that focuses on the internal capa3ilities of the firm rather than
on the desires and needs of the marketplace.
!S: 1 "#$: %1&0 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel .. 'omprehension
14. A company that sets its goals and strategies 3ased on /hat its current e6uipment can produce, /hat
products engineering can design, and /hat the company itself can do 3est, has aBnC GGGGG orientation.
a
.
marketplace
3
.
sales
c
.
market
d
.
exchange
e
.
production
ANS: *
A production orientation focuses on the internal capa3ilities of the firm.
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)*+: '#,* Model Strategy MS': #-""MS -evel .. 'omprehension
17. (esearchers at K .ndustries spent considera3le time, effort, and money developing a 3luish
/indshield that /ould let in filtered sunlight 3ut 3lock out the heat. -ittle market research /as done,
3ut the scientists /ere convinced this ne/ product /ould 3e significantly 3etter than existing
/indshields even though it /as more expensive and of a different color than the current models on the
market. !his scenario suggests K most likely has aBnC GGGGG orientation.
a
.
exchange
3
.
production
c
.
sales
d
.
promotion
e
.
customer
ANS: #
A production orientation is a philosophy that focuses on the internal capa3ilities of the firm rather than
on the desires and needs of the marketplace.
!S: 1 "#$: %1&0 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel ... Application
18. A ne/spaper ad for a hospital that states, ?De have the most modern delivery rooms and state&of&the
art medical e6uipment,@ is an indication of /hich marketing management philosophyH
a
.
Sales
3
.
'ustomer
c
.
Market
d
.
Societal
e
.
roduction
ANS: *
A production orientation focuses on the internal capa3ilities of the firm.
!S: 1 "#$: %1&0 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy F '#,* Model romotion
MS': #-""MS -evel ... Application
1<. A firm /ith a production orientation is most likely to survive if:
a
.
there are many small competitors in the marketplace
3
.
demand for the product it produces exceeds supply
c
.
the needs of the marketplace are constantly shifting
d
.
supply for the product it produces exceeds demand
e
.
any of these conditions exist
ANS: #
!he production orientation can survive in the short term under a variety of conditionsL ho/ever, if
market needs change, long&term survival is difficult.
!S: 1 "#$: %1&0 !": AA'S# (eflective !hinking
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1>. A firm that adopts aBnC GGGGG orientation to marketing /ill fail to consider /hether /hat the firm
produces most efficiently also meets the needs of the marketplace.
a
.
customer
3
.
exchange
c
.
product
d
.
market
e
.
production
ANS: *
!he production orientation forces a company to 3uild /hatever it 3uilds 3estMMthat is, /hatever it has
the experience and expertise in doing.
!S: 1 "#$: %1&0 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel .. 'omprehension
0%. !oyota found that consumers /anted cars to last longer and 3e more environmentally friendly. KM,
ho/ever, en9oyed 3eing the top 5.S. car producer and focused more on ho/ many cars and trucks it
could manufacture, not on /hat customers /anted from a vehicle. KM had more of a GGGGG
orientation.
a
.
sales
3
.
production
c
.
market
d
.
product
e
.
customer
ANS: #
!he production orientation forces a company to 3uild /hatever it 3uilds 3estMMthat is, /hatever it has
the experience and expertise in doing.
!S: 1 "#$: %1&0 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel ... Application
01. !he GGGGG orientation assumes people /ill 3uy more if aggressive selling techni6ues are used.
a
.
market
3
.
sales
c
.
customer
d
.
production
e
.
exchange
ANS: #
!he sales orientation assumes aggressive selling is /hat is needed to increase demand.
!S: 1 "#$: %1&0 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel .. 'omprehension
00. Dhich marketing management philosophy is often adopted 3y organi:ations that sell unsought
products such as life insurance, retirement plans, and preplanned funeral servicesH
a
.
Sales orientation
3
.
roduction orientation
c
.
Marketing orientation
d
.
roduct orientation
e
.
'ustomer orientation
ANS: A
Aggressive selling is sometimes used 3y companies that sell products their customers do not /ant to
3uy.
!S: 1 "#$: %1&0 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel .= Analysis
01. Dhich marketing orientation assumes people /ill 3uy more goods and services if aggressive
marketing techni6ues are usedH
a
.
Sales
3
.
roduction
c
.
Market
d
.
'ustomer
e
.
Marketplace
ANS: A
A sales orientation is 3ased on the ideas that people /ill 3uy more goods and services if aggressive
sales techni6ues are used and that high sales result in high profits.
!S: 1 "#$: %1&0 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel .. 'omprehension
02. 'olorado Silversmith creates and markets silver and tur6uoise 9e/elry, /hich it sells to retailers in the
/estern 5nited States. !he company;s management 3elieves its retail customers /ill stock more
9e/elry if its salespeople use aggressive marketing techni6ues, so the company provides strong
incentives for salespeople and promotional allo/ances to resellers to get distri3ution for its 9e/elry. .n
other /ords, the company has a GGGGG orientation.
a
.
promotion
3
.
production
c sales
.
d
.
market
e
.
customer
ANS: '
!he sales orientation assumes aggressive sales techni6ues /ill sell more product, regardless of
customer desires and needs.
!S: 1 "#$: %1&0 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel ... Application
04. .f a company uses a sales orientation, consumer complaints /ould most likely result in:
a
.
a modification of the sales presentation
3
.
product reinvention
c
.
continuous market research
d
.
philanthropy
e
.
attempts to cut production costs
ANS: A
!he sales orientation relies on aggressive sales techni6ues to fuel 3usiness.
!S: 1 "#$: %1&0 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel .= Analysis
07. Fu9ifilm 'omputer roducts has improved the efficiency and productivity of its plant, /hich
manufactures printing technology. For the ne/ fiscal year, the company pro9ects a production increase
of 04 percent. .t has instructed its sales force to aggressively distri3ute and promote its printers. !he
'*" is sure the market /ill a3sor3 more product if the sales force is determined and assertive.
Fu9ifilm appears to have a GGGGG orientation.
a
.
market
3
.
production
c
.
sales
d
.
customer
e
.
marketplace
ANS: '
A sales orientation is 3ased on the 3elief that people /ill 3uy more goods and services if aggressive
sales techni6ues are used.
!S: 1 "#$: %1&0 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel ... Application
08. Dhich marketing management philosophy focuses on the 6uestion, ?Dhat can /e make or do 3estH@
a
.
roduction
3
.
Marketing
c
.
Sales
d
.
Societal
e
.
.nternal
ANS: A
A production orientation focuses on the internal capa3ilities of the firm rather than on the desires and
needs of the marketplace.
!S: 1 "#$: %1&0 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel .. 'omprehension
0<. Dhich marketing management philosophy focuses on the 6uestion, ?Jo/ can /e sell more
aggressivelyH@
a
.
roduction
3
.
Marketing
c
.
Sales
d
.
*xternal
e
.
.nternal
ANS: '
A sales orientation is 3ased on the ideas that people /ill 3uy more goods and services if aggressive
sales techni6ues are used and that high sales result in high profits.
!S: 1 "#$: %1&0 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel .. 'omprehension
0>. Dhich marketing management philosophy focuses on the 6uestion, ?Dhat do customers /ant and
needH@
a
.
Sales
3
.
roduction
c
.
roduct
d
.
Market
e
.
.nternal
ANS: A
A market orientation is 3ased on the marketing concept, /hich is the idea that the social and economic
9ustification for an organi:ation;s existence is the satisfaction of customer /ants and needs /hile
meeting organi:ational o39ectives.
!S: 1 "#$: %1&0 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel .. 'omprehension
1%. Dhich marketing management philosophy assumes that a sale does not depend on an aggressive sales
force 3ut rather on a customer;s decision to purchase a productH
a
.
Sales
3
.
roduction
c
.
roduct
d
.
Market
e
.
*xchange
ANS: A
A market orientation states that the social and economic 9ustification for an organi:ation;s existence is
the satisfaction of customer /ants and needs /hile meeting organi:ational o39ectives.
!S: 1 "#$: %1&0 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel .. 'omprehension
11. 'ompanies that rely on the marketing concept and that have implemented a market orientation strategy
recogni:e that:
a
.
price is the most important varia3le for customers
3
.
sales depend predominantly on an aggressive sales force
c
.
/hat the customer thinks he or she is 3uying is /hat is important
d
.
a company has to apply scientific management techni6ues to survive
e
.
selling and marketing are essentially the same thing
ANS: '
!he perceived product and perceived value are /hat the customer is 3uying, and the marketing
concept and market orientation have endeavored to understand those perceptions.
!S: 1 "#$: %1&0 !": AA'S# (eflective !hinking
)*+: '#,* Model 'ustomer MS': #-""MS -evel .. 'omprehension
10. A company that has a market orientation and adheres to the marketing concept does N"!:
a
.
integrate all the activities of the firm to satisfy customer /ants
3
.
focus on consumer needs and /ants
c
.
differentiate the firm;s products from its competitor;s products
d
.
fuel sales gro/th through the application of aggressive sales techni6ues
e
.
concentrate on long&term goal achievement Bsuch as profits and gro/thC for the firm
ANS: A
Aggressive sales techni6ues are part of the sales orientation and are not needed if a company is
meeting the needs and /ants of its customers.
!S: 1 "#$: %1&0 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel =. *valuation
11. Minor -eague #ase3all BMi-#C suffers from sluggish attendance. !o attract more fans to Mi-# games,
o/ners often resort to gimmicksMMfree hot dog nights, events designed to get into the Guinness World
Records, and cele3rity visits. Since 3ase3all fans are seldom asked /hat /ould make them /ant to
attend more games, this suggests most Mi-# teams do not have aBnC GGGGG orientation.
a
.
sales
3
.
empo/erment
c
.
community
d
.
societal
e
.
market
ANS: *
!he marketing concept and a market&oriented philosophy is 3ased on the consumers; /ants and needs,
and the organi:ation /ill focus its activities on satisfying these customers 3y listening to them and
revising strategies as necessary.
!S: 1 "#$: %1&0 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel ... Application
12. A company adhering to the marketing concept /ill likely take /hich of the follo/ing steps if it learned
that its customers /ere dissatisfied /ith its productH
a
.
Jire more salespeople
3
.
Aecrease its organi:ational overhead
c
.
.ncrease its advertising to underserved markets
d
.
.ncrease the num3er of outlets in /hich the product is sold
e
.
'onduct research to determine if its customers; needs have changed
ANS: *
A marketing concept and market&oriented philosophy are 3ased on the consumers; /ants and needs,
and the organi:ation /ill focus its activities on satisfying these customers 3y listening to them and
revising strategies as necessary.
!S: 1 "#$: %1&0 !": AA'S# (eflective !hinking
)*+: '#,* Model 'ustomer MS': #-""MS -evel .= Analysis
14. !he marketing concept involves:
a
.
focusing on customers; /ants and needs so that the organi:ation can distinguish its
product Bor productsC from competitors; products
3
.
satisfying management;s needs and /ants /ith the idea of maximi:ing profits in the
short run
c
.
selling as much product as possi3le under the assumption people /ill 3uy more goods
and services if aggressive selling techni6ues are used
d
.
selling as much as possi3le under the assumption consumers /ill 3uy more at lo/er
prices
e
.
focusing on production in order to increase product 6uality and lo/er prices
ANS: A
!his is the definition of the marketing concept.
!S: 1 "#$: %1&0 !": AA'S# (eflective !hinking
)*+: '#,* Model 'ustomer MS': #-""MS -evel . )no/ledge
17. !he marketing concept stresses that the social and economic 9ustification for an organi:ation;s
existence is the satisfaction of customer needs and /ants /hile:
a
.
producing a good or service at the lo/est possi3le cost
3
.
improving the general standard of living
c
.
constantly increasing sales volumes
d
.
applying scientific management techni6ues to improve efficiency
e
.
simultaneously meeting organi:ation o39ectives
ANS: *
!he marketing concept holds that the needs and /ants of 3oth the customer and the firm 3e served.
!S: 1 "#$: %1&0 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel .. 'omprehension
18. SA, the /orld;s largest 3usiness soft/are company, has pledged to put the ?customer at the center@ of
their universe. SA has captured the idea of:
a
.
the <%N0% rule
3
.
Maslo/;s hierarchy of needs
c
.
the marketing concept
d
.
the sales orientation philosophy
e
.
the societal concept
ANS: '
!he marketing concept 9ustifies a company;s existence 3y its a3ility to satisfy customers.
!S: 1 "#$: %1&0 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel ... Application
1<. Dhen a homeo/ner visited !he Jome Aepot to 3uy /hat he thought he needed to fix a leaking toilet,
he gathered up materials totaling almost O8%. "ne his /ay to check out, an employee asked him /hat
/as he trying to fix. After some discussion, the employee convinced the homeo/ner that a O4.>>
replacement part /ould fix the pro3lem 3etter than the materials he thought he needed and /ith less
trou3le. !his sort of discussion 3et/een employees and customers is commonplace at !he Jome
Aepot and indicates the retail store has aBnC GGGGG orientation.
a
.
sales
3
.
market
c
.
product
d
.
exchange
e
.
production
ANS: #
!he marketing concept, the foundation of a market orientation, holds that the needs and /ants of 3oth
the customer and the firm 3e served.
!S: 1 "#$: %1&0 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel ... Application
1>. At !he 'ontainer Store, every employee is trained to serve customers. Full&time salespeople receive
02% hours of training. !he 'ontainer Store /orks to hire people /ho are self&motivated and have a
passion for customer service. !he 'ontainer Store has a GGGGG orientation.
a
.
sales
3 market
.
c
.
product
d
.
societal
e
.
production
ANS: #
!he marketing concept, the foundation of a market orientation, holds that the needs and /ants of 3oth
the customer and the firm 3e served.
!S: 1 "#$: %1&0 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel ... Application
2%. A company that /ants to implement a market orientation /ould need to:
a
.
do research on its customers, competitors, and markets
3
.
determine ho/ to deliver superior customer value
c
.
esta3lish and maintain mutually satisfying relationships /ith customers
d
.
implement actions that provide value to customers
e
.
do all of the activities listed
ANS: *
!hese are all options that make up a successful marketing orientation.
!S: 1 "#$: %1&0 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel .= Analysis
21. Mimi 'outurier is a design company that speciali:es in formal/ear for /omen. !he company is
kno/n for challenging fashion mores. !he company;s fashion designers use computer&assisted design
soft/are to create /hat it thinks /omen should /ear. !he company regularly hires industry experts to
examine its factories to find /aste and inefficiencies that can 3e eliminated. !he company has
expanded the num3er of products it offers for sale many times. Jo/ever, for the last t/o years Mimi
'outurier has lost money, and it has had to lay off some of its /orkforce. !o avoid this occurrence in
the future, Mimi 'outurier should:
a
.
hire more retail efficiency experts to trace do/n any production pro3lems
3
.
increase its sales force to find more potential customers for the firm
c
.
have someone study its target market to see /hat needs and /ants should 3e met 3y
Mimi 'outurier
d
.
cut prices so that its prices /ill 3e at least 1% percent 3elo/ those of its competitors
e
.
design more sophisticated products that use the latest computer&aided techni6ues
ANS: '
Mimi 'outurier has 3een production&oriented. .t should develop a market orientation, /hich means the
firm /ill produce only those items needed 3y its target market.
!S: 1 "#$: %1&0 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel ... Application
20. #est #uy has 3ecome the nation;s largest specialty retailer 3y focusing on the customer;s needs and
/ants. !his philosophy is at the heart of aBnC GGGGG orientation.
a
.
sales
3
.
market
c
.
retail
d
.
production
e
.
exchange
ANS: #
A market&oriented philosophy is 3ased on the consumers; /ants and needs, and the organi:ation /ill
focus its activities on satisfying these customers 3y listening to them and revising strategies as
necessary.
!S: 1 "#$: %1&0 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel ... Application
21. At ///.mystar3ucksidea.com, customers are encouraged to share their ideas and thoughts a3out ho/
Star3ucks can 3etter serve its customers. Star3ucks customers told management that they /anted to 3e
recogni:ed for choosing Star3ucks coffee. So Star3ucks instituted the My Star3ucks (e/ard program
/ith money&saving 3enefits to their Star3uck cardholders. Star3ucks is an example of a company /ith
a GGGGG&oriented philosophy.
a
.
transaction
3
.
sales
c
.
product
d
.
society
e
.
market
ANS: *
A market&oriented philosophy is 3ased on consumers; /ants and needs, and the organi:ation /ill focus
its activities on satisfying these customers 3y listening to them and revising strategies as necessary.
!S: 1 "#$: %1&0 !": AA'S# (eflective !hinking
)*+: '#,* Model romotion MS': #-""MS -evel ... Application
22. At the -ands; *nd De3 site, a customer can chat online /ith customer service representatives /hile
shopping. !his live help allo/s the customer to have 6uestions ans/ered 3efore placing an order. !his
focus on meeting customer needs illustrates aBnC GGGGG orientation.
a
.
societal
3
.
market
c
.
sales
d
.
production
e
.
one&to&one
ANS: #
A market&oriented philosophy is 3ased on the consumers; /ants and needs, and the dealer satisfies
these needs 3y providing excellent customer service. #uilding a relationship /ith these customers is an
important key.
!S: 1 "#$: %1&0 !": AA'S# (eflective !hinking
)*+: '#,* Model 'ustomer MS': #-""MS -evel ... Application
24. After hearing his company critici:ed for its failure to respond to consumer needs, the '*" of a 3ank
reali:ed that his company needs to adhere to the marketing concept and implement a market&oriented
strategy. Dhich of the follo/ing actions /ould 3e the 3est approach to achieving this goalH
a
.
(eorgani:ing the company and making marketing its most important department
3
.
Jiring ne/ salespeople to find ne/ customers
c
.
*xpanding the advertising 3udget to make potential customers more a/are of its product
offerings
d
.
'reating cross&functional teams and instructing them to focus on creating greater
customer value
e
.
Jiring a ne/ product development manager
ANS: A
Market&oriented companies are successful in getting all 3usiness functions /orking together to deliver
customer value.
!S: 1 "#$: %1&0 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel ... Application
27. $ac6ues !orres 'hocolate is a factory and retail store in #rooklyn. .ts o/ner is /illing to try to produce
ne/ products /hen his customers suggest themMMsuch as chili&pepper&laced chocolate candy. Jis only
condition is that /hen he adds ne/ products, his customers have the final say on /hether the product
is of any value. According to !orres, ?.f something doesn;t move, that;s the last time you see it.@ #y
focusing on customer; /ants, the chocolate company exhi3its aBnCGGGGG orientation.
a
.
exchange
3
.
product
c
.
production
d
.
sales
e
.
market
ANS: *
!orres understands that a sale occurs 3ecause a customer makes a decision to 3uy.
!S: 1 "#$: %1&0 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel ... Application
28. An organi:ation /ith aBnC GGGGG 3elieves that it exists not only to satisfy customer /ants and needs
and to meet organi:ational o39ectives 3ut also to preserve or enhance individuals; and society;s long&
term 3est interests.
a
.
sales orientation
3
.
market orientation
c
.
ethical 3usiness mission
d
.
focused target market strategy
e
.
societal marketing orientation
ANS: *
!he societal marketing orientation extends the marketing concept 3y ackno/ledging that some
products that customers /ant may not really 3e in their 3est interests or the 3est interests of society as
a /hole.
!S: 1 "#$: %1&0 !": AA'S# *thics
)*+: '#,* Model Strategy MS': #-""MS -evel . )no/ledge
2<. Most companies 3ecome sensiti:ed to community issues after they;ve done enough damage to dra/
the locals; anger. Aofasco, .nc., a highly successful steel company in "ntario, tries to get ahead of
3usiness and community issues 3y annually 3ringing together representatives from the local area and
deciding /hich pro9ects to improve the local environment /ill 3e implemented. !his annual
community&/ide meeting indicates Aofasco has a GGGGG orientation.
a
.
societal marketing
3
.
sales
c
.
reciprocal exchange
d
.
production
e product
.
ANS: A
Societal marketing orientation is the idea that an organi:ation exists not only to satisfy customer /ants
and needs and to meet organi:ational o39ectives 3ut also to preserve individuals; and society;s long&
term 3est interests.
!S: 1 "#$: %1&0 !": AA'S# *thics
)*+: '#,* Model Strategy MS': #-""MS -evel ... Application
2>. -ife is good
P
no longer encloses its apparel in individual poly 3ags /hen shipping to customers
3ecause the management feels it harms the environment. !his is an example of a GGGGG orientation.
a
.
societal marketing
3
.
sales
c
.
reciprocal exchange
d
.
production
e
.
product
ANS: A
Societal marketing orientation is the idea that an organi:ation exists not only to satisfy customer /ants
and needs and to meet organi:ational o39ectives 3ut also to preserve individuals; and society;s long&
term 3est interests.
!S: 1 "#$: %1&0 !": AA'S# *thics
)*+: '#,* Model Strategy MS': #-""MS -evel ... Application
4%. rocter , Kam3le B,KC decided to address the fact that Jispanic /omen are more likely to die from
3reast cancer 3ecause they;re reluctant to get mammograms or discuss screening. So ,K 3rought
screening to the supermarket, parking mo3ile mammography vehicles in grocery store parking lots in
!exas and inviting shoppers in for free x&rays. !ie&ins /ith local hospitals assured that /omen /ith
suspicious films got follo/&up care. ,K adopted a GGGGG orientation to achieve this goal.
a
.
promotional
3
.
societal marketing
c
.
customer
d
.
marketing
e
.
product
ANS: #
Societal marketing orientation is the idea that an organi:ation exists not only to satisfy customer /ants
and needs and to meet organi:ational o39ectives 3ut also to preserve individuals; and society;s long&
term 3est interests.
!S: 1 "#$: %1&0 !": AA'S# *thics
)*+: '#,* Model Strategy MS': #-""MS -evel ... Application
41. Dhich of the follo/ing statements a3out the societal orientation is FA-S*H
a
.
'ompanies that protect the environment 3y using all&natural materials in their products
are sho/ing a societal marketing orientation.
3
.
Marketers cannot deliver all 3enefits sought 3y customers, as these 3enefits may not 3e
in the long&term 3est interests of the customers.
c
.
!he societal marketing concept is an important refinement of the market concept.
d
.
"rgani:ations have 3oth a social and economic 9ustification for their existence.
e
.
!he ma9ority of consumers support environmentally friendly companies and /illingly
paying more for these products.
ANS: *
Dhile a ma9ority of consumers report that environmental issues are important, they are not /illing to
make trade&offs for higher costs or lo/er performance.
!S: 1 "#$: %1&0 !": AA'S# (eflective !hinking
)*+: '#,* Model 'ustomer MS': #-""MS -evel =. *valuation
40. -ife is goodP developed the ?Kood )arma@ line of environmentally friendly 1%%Q organic cotton
apparel. !he production of the Kood )arma line is consistent /ith a GGGGG orientation.
a
.
societal marketing
3
.
supplier
c
.
sales
d
.
production
e
.
philanthropic
ANS: A
Societal marketing orientation is the idea that an organi:ation exists not only to satisfy customer /ants
and needs and to meet organi:ational o39ectives 3ut also to preserve individuals; and society;s long&
term 3est interests.
!S: 1 "#$: %1&0 !": AA'S# *thics
)*+: '#,* Model Strategy MS': #-""MS -evel ... Application
41. !arget shoppers can enroll in the !ake 'harge of *ducation
P
program so that !arget /ill donate 1
percent of purchases made /ith a consumer;s (*Acard, a !arget credit card. !he more money
customers spend, the larger the donation to the consumer;s school of choice. #y instituting the !ake
'harge of *ducation
P
program to help local schools, !arget has sho/n a GGGGG orientation.
a
.
societal marketing
3
.
supplier
c
.
sales
d
.
production
e
.
philanthropic
ANS: A
Societal marketing orientation is the idea that an organi:ation exists not only to satisfy customer /ants
and needs and to meet organi:ational o39ectives 3ut also to preserve individuals; and society;s long&
term 3est interests.
!S: 1 "#$: %1&0 !": AA'S# *thics
)*+: '#,* Model Strategy MS': #-""MS -evel ... Application
42. $e/elry stores /ant to provide their customers /ith the highest 6uality of diamonds availa3le at the
lo/est possi3le prices. 5nfortunately, the lo/est priced diamonds these days are sold 3y African re3els
/ho use the profits to engage in genocide. Juman rights organi:ation have asked 9e/elers to 3uy
diamonds that are ?conflict free@MMthat is, from South Africa, Australia, or 'anada. -ee#rant is one
retail 9e/elry store that sells only diamonds that are certified to 3e from these countries. -ee#rant is
exhi3iting /hich marketing management orientationH
a
.
roduction
3
.
Sales
c
.
Societal marketing
d
.
Airect
e
.
"mnipotent
ANS: '
-ee#rant has a societal marketing orientation 3ecause it is not only trying to satisfy customers; /ants
3ut also is trying to enhance society;s long&term 3est interests. !he other 9e/elers that continue to sell
diamonds purchased from the re3els are more interested in satisfying their customers; desire for lo/er
prices than in serving society.
!S: 1 "#$: %1&0 !": AA'S# *thics
)*+: '#,* Model Strategy MS': #-""MS -evel ... Application
44. Dhich marketing management philosophy focuses on the 6uestion, ?Dhat do customers /ant and
need, and ho/ can /e 3enefit societyH@
a
.
.nternal
3
.
*xternal
c
.
Sales
d
.
Societal marketing
e
.
roduction
ANS: A
!he societal marketing concept extends the marketing concept 3y ackno/ledging that some products
that customers /ant may not really 3e in their 3est interests or in the 3est interests of society as a
/hole.
!S: 1 "#$: %1&0 !": AA'S# *thics
)*+: '#,* Model Strategy MS': #-""MS -evel .. 'omprehension
47. !he sales and market orientations differ on all of the follo/ing characteristics *I'*!:
a
.
those to /hom the product is directed
3
.
the firm;s performance
c
.
the firm;s 3usiness
d
.
the firm;s primary goal
e
.
the tools to achieve goals
ANS: #
!hese t/o orientations differ /ith respect to the organi:ation;s focus, the firm;s 3usiness, those to
/hom the product is directed, the firm;s primary goal, and the tools used to achieve those goals.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel =. *valuation
48. Market&oriented firms primarily focus their efforts upon:
a
.
improving the technological skills and competitive advantages of the firm
3
.
satisfying the organi:ation;s needs for lo/ overhead
c
.
achieving the company;s societal responsi3ilities inexpensively
d
.
distri3uting goods and services
e
.
satisfying the /ants and needs of their customers
ANS: *
Market&oriented firms are focused out/ard to/ard their customers.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model 'ustomer MS': #-""MS -evel =. *valuation
4<. Dhich of the follo/ing statements a3out a typical sales&oriented 3usiness is !(5*H
a
.
!he company develops its products to meet the needs of specific groups of people.
3
.
!he primary goal of the company is profit through customer satisfaction.
c
.
!he company invests the ma9ority of its resources in promoting its products and services.
d
.
!he company is in 3usiness to satisfy customer /ants and needs and deliver superior
value.
e
.
All of these statements a3out a typical sales&oriented 3usiness are true.
ANS: '
Sales&oriented firms focus on selling /hat the organi:ation makes rather than making /hat the market
/ants.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel =. *valuation
4>. GGGGG is defined as the relationship 3et/een 3enefits and the sacrifice necessary to o3tain those
3enefits.
a
.
"pportunity cost
3
.
Marketing utility
c
.
Market 6uality
d
.
Satisfaction percentage
e
.
'ustomer value
ANS: *
!his is the definition of customer value.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model 'ustomer MS': #-""MS -evel . )no/ledge
7%. !he 5.S. ostal Service B5SSC argues that its express service is compara3le to /hat is offered 3y
Fed*x and that its prices are much lo/er. +et, Fed*x dominates /ith more than a 24 percent share of
the express&delivery market. Dhich of the follo/ing statements descri3es this situationH
a
.
!he 5SS is perceived as offering greater customer value.
3
.
Fed*x is perceived as offering greater customer value.
c
.
Fed*x and the 5SS offer the same customer value.
d
.
'ustomer value is not an issue in deciding /hich express&delivery service to use.
e
.
!he 5SS should lo/er its prices even further to increase market share.
ANS: #
'ustomer value is defined as the relationship 3et/een 3enefits and the sacrifice necessary to o3tain
those 3enefits.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model 'ustomer MS': #-""MS -evel ... Application
71. Marketers interested in offering customer value can:
a
.
offer products that perform
3
.
give the consumer facts
c
.
offer organi:ation&/ide commitment to service and after&the&sale support
d
.
avoid unrealistic pricing
e
.
do all of these
ANS: * !S: 1 "#$: %1&1
!": AA'S# (eflective !hinking )*+: '#,* Model Strategy
MS': #-""MS -evel .= Analysis
70. 'ha: loves to play a Aisney online pirate game in /hich he gets to create a pirate 3y choosing hair
color, skin color, clothing, and physical features. !hen he gets to choose from a variety of 6uests and
can sail a ship, dig for treasure, fight skeleton pirates, or fight the #ritish Navy. !his game provides
/hat element of valueH
a
.
"ffering products that perform
3
.
*arning of trust
c
.
Avoiding unrealistic pricing
d
.
Kiving facts
e
.
'o&creation
ANS: *
'o&creation allo/s customers to help create their o/n experience.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model 'ustomer MS': #-""MS -evel ... Application
71. Dhich of the follo/ing is the customers; evaluation of a good or service in terms of /hether that good
or service has met their needs and expectationsH
a =alue
.
3
.
erception
c
.
Attitude
d
.
Aissonance
e
.
Satisfaction
ANS: *
!his is the definition of customer satisfaction.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model 'ustomer MS': #-""MS -evel .. 'omprehension
72. Dhen customer expectations regarding product 6uality, service 6uality, and value&3ased price are met
or exceeded, GGGGG is created.
a
.
a value line
3
.
a 6uality rift
c
.
planning excellence
d
.
customer satisfaction
e
.
expectation satisfaction
ANS: A
'ustomer satisfaction is the customers; evaluation of a good or service in terms of /hether that good
or service has met their needs and expectations.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model 'ustomer MS': #-""MS -evel .. 'omprehension
74. Ninety&six percent of 5SAA home insurance policy holders report that 5SAA representatives meet
their commitment in calling 3ack customers 6uickly a3out claims. !he most likely result of 5SAA;s
efforts is:
a
.
management empo/erment
3
.
retailer&customer synergy
c
.
customer satisfaction
d
.
transactional marketing
e
.
disintermediation
ANS: '
Dhen customer expectations regarding product 6uality, service 6uality, and value&3ased price are met
or exceeded, customer satisfaction is created.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model 'ustomer MS': #-""MS -evel ... Application
77. Ierox emphasi:es GGGGG 3y replacing at its o/n expense any dissatisfied customer;s e6uipment /ithin
a period of three years after purchase.
a
.
management empo/erment
3
.
management&customer synergy
c
.
customer satisfaction
d
.
transactional marketing
e
.
direct selling
ANS: '
Dhen customer expectations regarding product 6uality, service 6uality, and value&3ased price are met
or exceeded, customer satisfaction is created.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model 'ustomer MS': #-""MS -evel ... Application
78. GGGGG is a strategy that focuses on keeping and improving relationships /ith current customers.
a
.
'ommitment selling
3
.
(elationship marketing
c
.
!ransactional marketing
d
.
Market engineering
e
.
"rgani:ation&customer synergy
ANS: #
!his is the definition of relationship marketing.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model 'ustomer MS': #-""MS -evel . )no/ledge
7<. Net/orkcar.com sells a plug&in device that connects to computer diagnostic ports that are standard on
cars. !he device 3eams signals to dealers /ho can remotely diagnose or spot trou3le, allo/ing car
dealerships to maintain a closer 3ond /ith their customers 3y offering maintenance 3efore a pro3lem
leaves customers /ith an inopera3le or possi3ly dangerous car. Dith the device, dealers can 3etter
engage in:
a management empo/erment
.
3
.
management&customer synergy
c
.
relationship marketing
d
.
transactional marketing
e
.
direct selling
ANS: '
(elationship marketing is a strategy that entails forging long&term partnerships /ith customers.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model 'ustomer MS': #-""MS -evel ... Application
7>. )ellogg;s gives consumers the chance to receive a free A=A. 'onsumers /ho 3uy five 3oxes of
specially marked cereal can cut out the coupons and mail in their completed official form to get a free
A=A. )ellogg;s is engaging in:
a
.
transactional marketing
3
.
sports distri3ution
c
.
relationship marketing
d
.
one&to&one marketing
e
.
customer transformation
ANS: '
(elationship marketing is a strategy that entails forging long&term partnerships /ith customers.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model 'ustomer F '#,* Model romotion
MS': #-""MS -evel ... Application
8%. Fre6uent&flyer programs are an example of financial incentives to customers in exchange for their
continuing patronage. After flying a certain num3er of miles or flying a specified num3er of times, the
fre6uent&flyer program participant earns a free flight or some other a/ard such as free lodging.
Airlines that use fre6uent&flyer programs are practicing:
a
.
commitment selling
3
.
transaction marketing
c
.
transformational marketing
d
.
marketing engineering
e
.
relationship marketing
ANS: *
!he strategy that entails forging long&term partnerships /ith customers is called relationship
marketing.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model 'ustomer MS': #-""MS -evel ... Application
81. Kreen3erg Smoked !urkey, .nc. is a nation/ide mail&order 3usiness that operates /ithout any
advertising. .t does not accept credit cards, has no toll&free num3er for customers to call, and does not
have a De3 site. !his hopelessly old&fashioned company is also very profita3le /ith thousands of
devoutly loyal customersMMsome of /hom have ordered Kreen3erg smoked turkeys every year for the
last 4% years. Kreen3erg more than likely uses GGGGG to maintain these long&term ties to its customers.
a
.
reactive marketing
3
.
synergistic management
c
.
relationship marketing
d
.
a sales orientation
e
.
management empo/erment
ANS: '
(elationship marketing is a strategy that entails forging long&term partnerships /ith customers.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model 'ustomer MS': #-""MS -evel ... Application
80. !he Keek S6uad is a tech support station located inside every #est #uy electronics retail store. #est
#uy gives intensive training to the Keeks. !he purpose of this training is to:
a
.
improve customer service
3
.
give higher education 3enefits to employees
c
.
promote the company image 3y increasing pu3lic a/areness
d
.
reduce the need of empo/erment
e
.
increase employment levels
ANS: A
-eading marketers recogni:e the role of employee training in customer service.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel ... Application
81. Some market&oriented firms give employees expanded authority to solve customer pro3lems on the
spot. !his is kno/n as:
a
.
training
3
.
deregulation
c
.
empo/erment
d
.
commissioning
e
.
mediating
ANS: '
*mpo/erment is the delegation of authority to solve customer pro3lems 6uickly, usually 3y the first
person the customer notifies regarding a pro3lem.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel . )no/ledge
82. GGGGG gives customers the feeling their concerns are 3eing addressed and at the same time gives
employees the feeling their expertise matters to management.
a
.
Management&employee synergy
3
.
"rgani:ational entropy
c
.
Managerial reciprocity
d
.
*mpo/erment
e
.
Aelegation
ANS: A
*mpo/erment is the delegation of authority to solve customers; pro3lems 6uickly, usually 3y the first
person the customer notifies regarding a pro3lem.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel .. 'omprehension
84. !he (it:&'arlton has Service =alues that guide employees in providing its Kold Standard service. "ne
of the service values states, ?. o/n and immediately resolve guest pro3lems.@ !he (it:&'arlton
management uses GGGGG to provide customer service.
a
.
training
3
.
deregulation
c
.
empo/erment
d
.
commissioning
e
.
mediating
ANS: '
*mpo/erment is the delegation of authority to solve customers; pro3lems 6uickly.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel ... Application
87. As part of instituting an empo/erment program, a marketing director should:
a
.
hire college graduates /ho have the latest training in marketing management techni6ues
3
.
create a customer service department and place a key staff person in charge of the
department
c
.
train the company;s staff to 9udge the 6uality of the products the firm produces
d
.
allo/ non&management employees to resolve pro3lems on their o/n /ithout prior
approval from their immediate supervisors
e
.
conduct a survey of the company;s marketing staff to learn a3out employee morale
ANS: A
*mpo/erment occurs /hen firms give employees expanded authority to solve customer pro3lems on
the spot /ithout having to get management;s permission first.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel =. *valuation
88. GGGGG is the colla3orative efforts of people to achieve common o39ectives.
a
.
*ffort training
3
.
!eam/ork
c
.
*mpo/erment
d
.
"$! training
e
.
Mediation
ANS: #
!his is the definition of team/ork.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel . )no/ledge
8<. !5FF SJ*A, .nc. is one of the leading suppliers of installed storage 3uildings and garages in the
5nited States. !5FF SJ*A mandates that sales, management, and construction teams /ork together to
anticipate and eliminate potential pro3lems. !hey make sure customers get the right 3uildings for their
needs, and they all are 3uilt /ell and in a timely manner. #y using team/ork, !5FF SJ*A:
a
.
operates successfully using a production orientation
3
.
provides its customer /ith a high level of satisfaction
c
.
has a high employee turnover rate
d
.
does not deliver superior customer service
e
.
has a sales orientation
ANS: #
!eam/ork is one /ay a company /ith a market orientation creates customer satisfaction.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel ... Application
8>. A sales&oriented firm defines its 3usiness Bor missionC in terms of:
a
.
employees
3
.
goods and services
c
.
customers
d
.
competitors
e
.
3enefits
ANS: #
A sales&oriented firm focuses in/ard on its products and services.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel .. 'omprehension
<%. A firm that /ants to develop a deeper understanding of its customers may optimi:e profitia3lity,
revenue, and customer satisfaction 3y focusing on highly defined and precise customer groups. !his is:
a
.
'ustomer optimi:ation
3
.
'ustomer (elationship Management
c
.
Sales "rientation
d
.
Sales Maximi:ation
e
.
All of these
ANS: #
!his is the definition of 'ustomer (elationship Management
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel . )no/ledge
<1. A market&oriented firm defines its 3usiness in terms of:
a
.
goods and services
3
.
the 3enefits its customers seek
c
.
employee empo/erment
d
.
competitive position
e
.
customer satisfaction
ANS: #
A market&oriented firm is defined in terms of the 3enefits its customers seek.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel .. 'omprehension
<0. (edefining the 3usiness mission of a mattress manufacturer as ?a good night;s sleep@ rather than
stating the mission as ?the manufacture of high&6uality mattresses@ /ill:
a
.
not stimulate an a/areness of changes in consumer desires
3
.
3e too 3road a statement to 3e of any real use in serving customers
c
.
stifle creativity in discovering opportunities to serve customers
d
.
help ensure the firm retains its focus on consumers
e
.
ensure the core products /ill 3e retained
ANS: A
!he 3roader 3usiness mission of ?a good night sleep@ /ill stimulate innovation and creativity 3ecause
not all sleep aids are mattresses. .t /ill lead the company to further gro/th.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel ... Application
<1. "ne of the reasons given for the decline of the passenger rail industry in the 5nited States is that the
industry defined its mission as trains and not as transportation sources. !he railroad industry failed to:
a define its mission in terms of the 3enefits its customers seek
.
3
.
ignore the marketing concept of serving customer needs and /ants
c
.
reali:e ?customers only /ant /hat they kno/@
d
.
have a sales orientation
e
.
empo/er the consumer
ANS: A
A market&oriented firm defines its 3usiness in terms of the 3enefits its customers seek. #ecause of the
limited /ay the railroad industry defined its 3usiness, it missed an opportunity to define itself in terms
of the 3enefits customers /ere seeking.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel ... Application
<2. Dalker Farms heard from many of its customers that they /ould like organic produce. As a result,
Dalker Farms 3ecame a certified organic farm. Dalker reali:ed that /hile not all consumers /ere
/illing to pay the higher prices for organic produce, his customers /anted the organic produce. Dalker
reali:ed:
a
.
he missed sales 3y not concentrating on the average customer
3
.
different customer groups have different needs and /ants
c
.
he is a sales&oriented farm
d
.
his 3usiness is a3out selling the cheapest vegeta3les
e
.
his aim is a goal of profit through maximum sales volume
ANS: #
"ne /ay to implement the marketing concept is to concentrate on the needs of specific groups of
customers.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel ... Application
<4. "ne /ay to identify the orientation of a firm is to examine its primary goal. .f a firm seeks to achieve
profita3ility through sales volume, it /ould pro3a3ly 3e:
a
.
promotion&oriented
3
.
price&oriented
c
.
sales&oriented
d
.
production&oriented
e retail&oriented
.
ANS: '
A sales&oriented organi:ation seeks to achieve profita3ility through sales volume and tries to convince
potential customers to 3uy.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel .. 'omprehension
<7. All of the follo/ing are 3asic marketing mix decisions *I'*!:
a
.
sales
3
.
price
c
.
product design
d
.
place Bdistri3utionC
e
.
promotion
ANS: A
!he four marketing mix decisions include product decisions, place Bor distri3utionC decisions,
promotion decisions, and pricing decisions.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model Aistri3ution F '#,* Model ricing F '#,* Model roduct F '#,* Model
romotion MS': #-""MS -evel =. *valuation
<8. !he o/ner of Maine )itchen Art 3o/ls, spoons, and cutting 3oards kno/s marketing can make his
company a success. Je /ants to rely solely on promotion as the techni6ue for attracting customers. Je
advertises extensively in cooking maga:ines and provides retailers /ho carry his product /ith
attractive displays. From this information, you kno/ that Maine )itchen Art has a GGGGG orientation.
a
.
market
3
.
societal
c
.
production
d
.
sales
e
.
product
ANS: A
A sales&oriented organi:ation vie/s promotions as the primary tool used to achieve its goals.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel ... Application
<<. Fu9ifilm 'omputer roducts has improved the efficiency and productivity of its plant, /hich
manufactures printing technology. For the ne/ fiscal year, the company pro9ects a production increase
of 04 percent and has instructed its sales force to aggressively distri3ute and promote the product. !he
'*" is sure the market /ill a3sor3 more product if the sales force is determined and assertive.
Apparently Fu9ifilm:
a
.
has an out/ard organi:ational focus on its customers /ants and preferences
3
.
seeks its goals primarily through the use of intensive promotion
c
.
directs its products to specific groups of people
d
.
is in the 3usiness of satisfying customers
e
.
profits through customer satisfaction
ANS: #
Fu9ifilm definitely has a sales orientation.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel ... Application
<>. GGGGG is the primary tool used 3y a sales&oriented organi:ation to achieve its corporate goals.
a
.
rice
3
.
romotion
c
.
roduct design
d
.
lace Bdistri3utionC
e
.
roduction
ANS: #
A sales&oriented organi:ation seeks to generate sales volume 3ased upon intensive promotional
activities.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model romotion MS': #-""MS -evel .. 'omprehension
>%. All of the follo/ing are good reasons to study marketing *I'*!:
a
.
Marketing creates consumer needs.
3
.
Marketing plays an important role in society, coordinating the huge num3ers of
transactions needed to provide goods and services.
c
.
Marketing is a key function in 3usiness.
d
.
Marketing offers outstanding career opportunities.
e
.
Marketing affects your day&to&day life as a consumer.
ANS: A
Marketing may create consumer /ants, 3ut it does not create consumer needs.
!S: 1 "#$: %1&2 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel =. *valuation
>1. Dhat is the fundamental o39ective of most 3usinessesH
a
.
employee empo/erment, team/ork, and relationship marketing
3
.
satisfied stakeholders
c
.
lo/ costs and high 6uality
d
.
customer loyalty and retention
e
.
survival, profits, and gro/th
ANS: *
!he use of marketing allo/s 3usinesses to achieve this o39ective.
!S: 1 "#$: %1&2 !": AA'S# Analytic
)*+: '#,* Model Strategy MS': #-""MS -evel .. 'omprehension
Rit!"Car#ton ote#$
'esar (it:, the founder of the original (it:&'arlton, #oston, /as kno/n as the ?king of hoteliers and
the hotelier to kings.@ !oday, there are more than 8% (it:&'arlton hotels spanning 02 countries /ith
1<,%%% employees. !hese are not typical employees, though. !hey are descri3ed as ?-adies and
Kentlemen serving -adies and Kentlemen.@ *mployees participate in an intensive orientation program
and recertification programs throughout their careers /ith the company, and many are allo/ed O0,%%%
to fix a guest;s pro3lem on the spot /ithout managerial approval. So reno/ned is the (it: /ay of
doing 3usiness that the company offers a -eadership 'enter for executives and managers of other
companies to learn and implement the (it: /ay of customer service. #ut it doesn;t stop /ith
employees. (it:&'arlton hotels recently launched ?Kive #ack Keta/ays@ in 0%%< that allo/ guests to
volunteer in locales /here they are vacationing. !he hotel also offers ?=o/ to Jelp "thers,@ /hich is a
program that donates a portion of a /edding couple;s reception costs to those in need. !he chief
operating officer;s /ords sum up (it:&'arlton;s philosophy 3est: ?.f /e really do our 9o3, /e really
don;t need sales anymore. Satisfied guests are your advertising.@
>0. (efer to (it:&'arlton Jotels. !he chief operating officer;s statement regarding sales and advertising
illustrates /hich marketing management philosophy em3raced 3y this companyH
a
.
Sales
3
.
Market
c
.
roduction
d Societal
.
e
.
romotional
ANS: #
A market orientation is a philosophy that assumes that a sale does not depend on an aggressive sales
force 3ut rather on a customer;s decision to purchase a product.
!S: 1 "#$: %1&0 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel ... Application
>1. (efer to (it:&'arlton Jotels. !he ?Kive #ack Keta/ays@ and ?=o/ to Jelp "thers@ programs offered
3y (it:&'arlton hotels are applications of /hich marketing management philosophyH
a
.
Societal
3
.
Sales
c
.
roduction
d
.
Market
e
.
(etail
ANS: A
!he societal marketing orientation is the idea that an organi:ation exists not only to satisfy customer
/ants and needs and to meet organi:ational o39ectives 3ut also to preserve or enhance individuals; and
society;s long&term interests.
!S: 1 "#$: %1&0 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel ... Application
>2. (efer to (it:&'arlton Jotels. (it:&'arlton em3odies an organi:ation&/ide commitment to service and
support so that customers attain 3enefits relative to the price they pay for this service. Dhich element
of an organi:ation;s focus is this commitment satisfyingH
a
.
*mpo/erment
3
.
'ustomer value
c
.
'ustomer ac6uisition
d
.
'reativity
e
.
rimary goal making
ANS: #
'ustomer value is the relationship 3et/een 3enefits and the sacrifice necessary to o3tain those
3enefits.
!S: 1 "#$: %1&1 !": AA'S# Analytic
)*+: '#,* Model 'ustomer MS': #-""MS -evel ... Application
>4. (efer to (it:&'arlton Jotels. 'ustomer&oriented personnel, effective training programs, employees
/ith authority to make decisions and solve pro3lems, and team/ork all /ork together at (it:&'arlton
to implement /hich type of strategyH
a
.
relationship marketing
3
.
social marketing
c
.
internal marketing
d
.
external marketing
e
.
empo/ered marketing
ANS: A
Most successful relationship marketing strategies depend on customer&oriented personnel, effective
training programs, employees /ith authority to make decisions and solve pro3lems, and team/ork.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel ... Application
>7. (efer to (it:&'arlton Jotels. A guest;s suitcase /as lost /hile in the care of hotel employees, and that
guest needed his suit for an important 3usiness meeting. !he desk clerk took the guest to a local mall
to purchase clothing and shoes totaling O<4%. !he fact that (it:&'arlton employees have the authority
to solve customers; pro3lems 6uickly illustrates that these employees are given:
a
.
authority training
3
.
customer value giving
c
.
cross&utili:ation
d
.
team/ork
e
.
empo/erment
ANS: *
*mpo/erment is the delegation of authority to employees to solve customers; pro3lems 6uickly,
usually 3y the first person the customer notifies regarding a pro3lem.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel ... Application
Cir%&$e$
As recently as 0% years ago, circuses came to to/n /ith tents, animals, clo/ns, and other performers.
An advance man arrived a3out t/o /eeks 3efore the circus actually arrived, covered the community
/ith posters, and gave out free tickets to schoolchildren. .f the advance man had done a good 9o3,
/hen the circus arrived and opened its tent doors, 1%% to 7%% people /ould fill its seats. Dhen the
largest circus organi:ations merged, the ne/ly formed (ingling #ros. and #arnum , #ailey;s Kreatest
Sho/ on *arth 3egan performing in 2,%%%&seat arenas. Attendance, ho/ever, has stagnated in recent
years. eople have stopped going to the circus 3ecause they miss the circus tent and the intimate
atmosphere it created. !he ne/est thing in circuses is a return to the tent atmosphere /ith an emphasis
on the types of entertainment that /ere popular years ago. Anti6ue circus /agons, calliope music, and
cotton candy are replacing the exotic animals and the prima donna performers. !o satisfy the needs of
this ne/ audience, the tent circus no/ sells lattes and /ine.
>8. (efer to 'ircuses. No/ circuses are trying to satisfy customers; needs and /ants and to profit through
customer satisfaction. !hey have adopted a GGGGG orientation.
a
.
societal
3
.
selling
c
.
production
d
.
market
e
.
retail
ANS: A
A market&oriented philosophy is 3ased on consumers; /ants and needs
!S: 1 "#$: %1&0 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel ... Application
><. (efer to 'ircuses. !o exhi3it a societal marketing orientation, circuses could:
a
.
rely on pu3licity and avoid any promotions
3
.
empo/er their employees to satisfy customer /ants
c
.
donate a percentage of their profits to local educational institutions
d
.
use relationship marketing
e
.
emphasi:e customer value
ANS: '
!he philosophy called the societal marketing orientation states that an organi:ation exists not only to
satisfy customer /ants and needs and to meet organi:ational o39ectives 3ut also to preserve or enhance
individuals; and society;s long&term 3est interests.
!S: 1 "#$: %1&0 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel ... Application
>>. (efer to 'ircuses. "ne of the tent venues is called #arnum;s )aleidoscope, and it is in a permanent
location /ith the hopes that people /ho see the sho/ /ill /ant to return and see it again as /ell as
3ring their friends and relatives to the production. Dhich of the follo/ing techni6ues /ould most
likely advance this strategy of referrals and repeat 3usinessH
a
.
(elationship marketing
3
.
*mpo/erment
c
.
Sales orientation
d
.
Authority to delegate
e
.
!ransactional marketing
ANS: A
(elationship marketing is a strategy that entails forging long&term partnerships /ith customers.
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1%%. (efer to 'ircuses. !he aggressive promotions used 3y advance men indicate that decades ago the
circuses pro3a3ly had a GGGGG orientation.
a
.
sales
3
.
market
c
.
production
d
.
societal
e
.
product
ANS: A
Sales&oriented organi:ations achieve their sales goals primarily through intensive promotion.
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1%1. (efer to 'ircuses. !he circus;s goal of redesigning the circus experience is 3eing completed through
the coordination of many marketing activities, such as value pricing, a product that includes exciting
performances, tent venue locations, and promotion. !hese activities make up the GGGGG for the
circuses.
a
.
opportunity analysis
3
.
value of marketing
c
.
marketing environment
d target market
.
e
.
marketing mix
ANS: *
Marketing mix elements include product, place, promotion, and price.
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)*+: '#,* Model roduct F '#,* Model Aistri3ution F '#,* Model ricing F '#,* Model
romotion MS': #-""MS -evel ... Application
Star'&%k$ Lo(a#t( Rewar)$
!he first Star3ucks opened in 1>8% in Seattle, Dashington. !he demand for its coffee gre/, and
Star3ucks added more than 7,%%% stores located in over 1% countries. .n its more than 1%&year history,
Star3ucks has never given out coupons for its coffee. Star3ucks needed only to make its coffee and
customers came. (ecently, consumer 6uality perception of the Star3ucks 3rand has started to fall.
Star3ucks started a consumer response 3log to learn more a3out /hat consumers expect from
Star3ucks. "ne of the most common re6uests /as for a customer re/ards program. .n response,
Star3ucks started My Star3ucks (e/ards, /hich offers free refills on 3re/ed coffee, free 3everage
/ith /hole 3ean purchase, 3everage customi:ation, and free Di&Fi. Star3ucks also put coupons in a
national ne/spaper for those consumers /ho love coupons and created a ne/ 3re/ of coffee for those
/ho prefer a milder coffee taste. Star3ucks is hoping that these improvements /ill restore customers;
loyalty and confidence.
1%0. (efer to Star3ucks. Dhich of the four conditions did N"! exist in the minds of the Star3ucks
consumer, resulting in declining salesH
a
.
*ach party having something of value to give to the other party
3
.
*ach party 3eing capa3le of communication and delivery
c
.
*ach party 3eing free to accept or re9ect the exchange offer
d
.
*ach party 3elieving it to 3e appropriate or desira3le to deal /ith the other party
e
.
!here 3eing at least t/o parties for exchange to occur
ANS: A
Star3ucks customers /ere not seeing the value of exchanging their money for Star3ucks products.
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1%1. (efer to Star3ucks. For more than 1% years, Star3ucks held the orientation of ?.f /e 3uild it, they /ill
come.@ !his philosophy is most in line /ith a GGGGG orientation.
a
.
sales
3
.
market
c
.
production
d
.
societal
e
.
product
ANS: '
A production orientation means that management asks, ?Dhat do /e do 3estH@ .n the Star3ucks case,
the company made great coffee and created an atmosphere /here people /anted to spend time and
money.
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)*+: '#,* Model Strategy MS': #-""MS -evel ... Application
1%2. (efer to Star3ucks. Star3ucks customers /anted more value from their coffee. Star3ucks management
responded to customers through the Star3ucks card re/ards program. Dhich element of value /as
Star3ucks management /orking to increaseH
a
.
"ffering products that perform
3
.
*arning trust
c
.
Avoiding unrealistic pricing
d
.
Kiving the 3uyer facts
e
.
'o&creation
ANS: #
.n order for Star3ucks to continue to gro/ and prosper, it needed to keep its sta3le 3ase of loyal
customers happy.
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)*+: '#,* Model Strategy MS': #-""MS -evel ... Application
1%4. (efer to Star3ucks. !he creation of a consumer response 3log is an example of GGGGG.
a
.
ho/ to increase sales
3
.
technology at its 3est
c
.
relationship marketing
d
.
good training
e
.
product improvements
ANS: '
(elationship marketing is a strategy that focuses in keeping and improving relationships /ith current
customers.
!S: 1 "#$: %1&1 !": AA'S# (eflective !hinking
)*+: '#,* Model Strategy MS': #-""MS -evel ... Application
1%7. (efer to Star3ucks. !he fact that management reali:ed that coffee drinkers had different needs,
/hether it 3e using coupons, /anting a milder 3re/ of coffee, or using free Di&Fi, sho/s that
Star3ucks is no/ using a GGGGG&oriented approach.
a
.
sales
3
.
market
c
.
production
d
.
societal
e
.
product
ANS: #
A market&oriented organi:ation recogni:es that different consumer groups /ant different features or
3enefits.
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)*+: '#,* Model Strategy MS': #-""MS -evel ... Application
ESSA*
1. *xplain ho/ marketing is 3oth a philosophy and a set of activities.
ANS:
!he first facet of marketing is its philosophy. !his philosophy is an attitude, perspective, or
management orientation that stresses the importance of customer satisfaction. !he second facet of
marketing is the organi:ation function and the set of activities used to implement this philosophy.
!hese activities include B3ut are not limited toC planning, pricing, promotion, distri3ution, selling,
advertising, and inventory management.
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0. Dhat is the American Marketing Association;s BAMAC definition of marketing and /hat does
marketing entailH
ANS:
According to the AMA, marketing is the activity, set of institutions, and processes for creating,
communicating, delivering, and exchanging offerings that have value for customers, clients, partners,
and society at large. Marketing entails the processes that focus on delivering value and 3enefits to
customers, not 9ust selling goods, services, andNor ideas.
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1. Aescri3e the concept of exchange, and list the five conditions that must 3e satisfied for exchange to
occur. .f all conditions are met, does that guarantee exchange /ill occurH *xplain /hy or /hy not.
ANS:
!he concept of exchange simply means that people give up something in order to receive something
they /ould rather have. Money, goods, or services may 3e the medium of exchange. !he five
conditions of exchange are:
1. !here must 3e at least t/o parties.
0. *ach party has something that might 3e of
value to the other party.
1. *ach party is capa3le of communication and
delivery.
2. *ach party is free to accept or re9ect the
exchange offer.
4. *ach party 3elieves it is appropriate or
desira3le to deal /ith the other party.
*xchange /ill not necessarily take place even if all these conditions exist. !hey are necessary for
exchange to 3e possi3le, 3ut unless the 3uyer and seller reach an agreement, an exchange /ill not take
place.
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2. Name and descri3e the four marketing management philosophies.
ANS:
("A5'!."N "(.*N!A!."N. !his orientation focuses firms on their internal production
capa3ilities rather than the desires and needs of the marketplace. SA-*S "(.*N!A!."N. !his
orientation assumes that 3uyers /ill purchase more of any item if aggressive selling techni6ues are
used. Again, this orientation does not address the needs and /ants of the marketplace. MA()*!
"(.*N!A!."N. !his orientation recogni:es that a sale is dependent on the customer;s decision to
purchase a product and provides increased responsiveness to customer needs and /ants. !o market&
oriented firms, marketing means 3uilding relationships /ith customers. S"'.*!A- MA()*!.NK
"(.*N!A!."N. !his orientation refines the marketing orientation 3y stating that the social and
economic 9ustification for an organi:ation;s existence is the satisfaction of customer /ants and needs
/hile meeting the organi:ation;s o39ectives and preserving or enhancing 3oth individuals; and
society;s long&term 3est interests.
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4. .f a firm has a production orientation, /hat types of 6uestions does management ask after assessing its
resourcesH
ANS:
Dith a production orientation, management focuses on the internal capa3ilities of the firm.
Management might ask: ?Dhat can /e do 3estH@ ?Dhat can engineering designH@ andNor ?Dhat is
economical and easy to produce /ith our e6uipmentH@
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7. An entrepreneur has set up a company to manufacture and market KS systems for hunters. Je has
decided a sales orientation /ould 3est suit his ne/ company. Dhat are important considerations for
this firm /hen it adopts this orientationH Dhat are potential pitfalls of this orientation the o/ner needs
to understandH
ANS:
!he most important component for a sales orientation is an aggressive sales force. !he sales force can
push intermediaries to carry products or push consumers to purchase. For the entrepreneur in 6uestion,
this is important, as hunters rarely 3uy KS e6uipment directly from the manufacturer. .nstead, KS
e6uipment is offered through specialty resellers. An aggressive sales force could help the entrepreneur
sell his product in more outlets. Jo/ever, despite a high&6uality sales force, even aggressive
salespeople cannot convince people to 3uy goods and services that are neither /anted nor needed.
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8. 'onsider the follo/ing statement: ?(elationship marketing is not possi3le in a firm em3racing a
production orientation.@ Ao you agree or disagree /ith this statementH *xplain your ans/er.
ANS:
A company /ith a production orientation concentrates on /hat it can do 3estMMits internal capa3ilities.
Sometimes /hat the company produces is exactly /hat the customer /ants, so it could 3e possi3le for
a company to engage in relationship marketing Ba strategy that entails forging long&term partnerships
/ith customersC and still have a production orientation. Jo/ever, the most successful relationship
marketing strategies depend on customer&oriented personnel, effective training programs, employees
/ith authority to make decisions and solve pro3lems, and team/ork.
!S: 1 "#$: %1&0 F %1&1 !": AA'S# 'ommunication
)*+: '#,* Model Strategy MS': #-""MS -evel = Synthesis
<. Dhat is the marketing conceptH According to the marketing concept, /hat determines if a sale /ill
actually occurH
ANS:
!he marketing concept is a simple and intuitively appealing philosophy that articulates a marketing
orientation. .t states that the social and economic 9ustification for an organi:ation;s existence is the
satisfaction of customer /ants and needs /hile meeting organi:ational o39ectives. .t is 3ased on an
understanding that a sale does not depend on an aggressive sales force 3ut rather on a customer;s
decision to purchase a product.
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)*+: '#,* Model Strategy MS': #-""MS -evel = Synthesis
>. *xplain the marketing concept and market orientation. Dhat three re6uirements are included in the
marketing conceptH
ANS:
!he philosophy of the marketing concept states that the social and economic 9ustification for an
organi:ation;s existence is the satisfaction of customer /ants and needs /hile meeting organi:ational
o39ectives. Market orientation involves o3taining information a3out customers, competitors, and
marketsL examining the information from a total 3usiness perspectiveL determining ho/ to deliver
superior customer valueL and implementing actions to provide value to customers. !he marketing
concept includes:
focusing on consumer /ants so the
organi:ation can distinguish its productBsC
from competitors; offerings
integrating all the organi:ation;s activities,
including production, to satisfy these /ants
achieving long&term goals of the organi:ation
3y satisfying customer /ants and needs
legally and responsi3ly
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1%. *xplain the societal marketing orientation, and give an example of a company implementing this
orientation.
ANS:
!he societal marketing orientation is the idea that an organi:ation exists not only to satisfy customer
/ants and needs and to meet organi:ational o39ectives 3ut also to preserve or enhance individuals; and
society;s long&term 3est interests. Students; examples /ill vary depending upon /hat commercials,
advertisements, and pu3licity they have 3een exposed to. All should select a company that exists not
only to satisfy customers; /ants and needs and to meet organi:ational o39ectives 3ut also to preserve
or enhance individuals; or society;s long&term 3est interests.
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!": AA'S# 'ommunication F AA'S# *thics )*+: '#,* Model Strategy
MS': #-""MS -evel = Synthesis
11. *xplain ho/ technology has changed the role of the consumer for today;s marketers.
ANS:
!echnology has allo/ed consumers to 3ecome very /ell informed. !hey are a3le tofind the lo/est
prices, the 3est 6uality, and the exact products or services to meet their needs. !he internet is the main
resource, 3ut mo3ile technology has changed ho/ 3ricks and mortar stores market to customers. #y
3ecoming educated, consumers are 3etter e6uipped to spend their money /here they receive the most
customer value and or satisfaction. !his mean manufacturers and retailers must understand their
customers and offer them the prices and value they /ant.
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)*+: '#,* Model 'ustomer MS': #-""MS -evel = Synthesis
10. Dhat is customer valueH Dhat are the six /ays marketers can make sure customers perceive their
companiesNproducts as sources of valueH
ANS:
'ustomer value is the relationship 3et/een 3enefits and the sacrifice necessary to o3tain those
3enefits. Marketers /ho /ant to 3e perceived 3y their customers as offering value can B1C offer
products that perform, B0C earn trust, B1C avoid unrealistic pricing, B2C give the 3uyer facts, B4C offer
organi:ation&/ide commitment in service and after&sales support, and B7C co&creation.
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)*+: '#,* Model 'ustomer MS': #-""MS -evel = Synthesis
11. 'ompare and contrast the sales and market orientations using the follo/ing five characteristics as
guidelines: B1C the organi:ation;s focus, B0C in the firm;s 3usiness, B1C people to /hom the product is
directed, B2C the organi:ation;s primary goal, and B4C tools used to achieve that goal.
ANS:
"(KAN.RA!."N;S F"'5S. Dith a sales orientation, the firm;s focus is in/ard upon the firm;s o/n
needs. Dith a market orientation, the focus is out/ard on the /ants and preferences of customers. .n
particular, market&oriented firms create customer value, maintain customer satisfaction, and 3uild
long&term relationships.
#5S.N*SS. A firm /ith a sales orientation is in the 3usiness of selling goods and services. A firm /ith
a market orientation is in the 3usiness of satisfying consumer /ants and needs.
'5S!"M*(S. A sales orientation directs the firm;s output at every3ody, /hile a market orientation
directs goods to/ard specific groups of people.
(.MA(+ K"A-. !he primary goal of a firm /ith a sales orientation is to make profit through
maximi:ing sales volume. !he primary goal of a firm /ith a market orientation is to seek profit
through customer satisfaction.
!""-S F"( K"A- A'J.*=*M*N!. A sales orientation seeks to achieve goals primarily through
intensive promotion. A market orientation achieves goals through coordinated use of a set of marketing
activities. See (evie/ -earning "utcome 1.
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12. Aiscuss the elements needed to implement successful relationship marketing strategies.
ANS:
Most successful relationship marketing strategies depend on:
'5S!"M*(&"(.*N!*A *(S"NN*-. An employee may 3e the only contact a customer has /ith
the firm, so in that customer;s eyes, the employee is the firm. Any person, department, or division that
is not customer oriented /eakens the positive image of the entire organi:ation.
!(A.N.NK. !raining is important to 6uality customer service and relationship 3uilding.
*M"D*(M*N!. .n empo/erment, delegation of authority is used to solve customer pro3lems
6uickly, usually 3y the first person the customer notifies regarding a pro3lem.
!*AMD"(). !eam/ork is the colla3orative efforts of people to accomplish a common o39ective.
$o3 performance, company performance, product value, and customer satisfaction all improve /hen
people in the same department or /ork group 3egin supporting and assisting each other and emphasi:e
cooperation instead of competition.
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14. -ist the three advantages of defining the company;s 3usiness in terms of the 3enefits customers seek
instead of in terms of goods and services.
ANS:
B1C .t ensures that the firm keeps focusing on customers and avoids 3ecoming preoccupied /ith goods,
services, or the organi:ation;s internal needs. B0C .t encourages innovation and creativity 3y reminding
people there are many different /ays to satisfy customer /ants. B1C .t stimulates an a/areness of
changes in customer desires and preferences so product offerings are more likely to remain relevant.
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17. !here are several important reasons to study marketing. Name three of these reasons.
ANS:
1. Marketing plays an important role in society.
0. Marketing is important to 3usinesses.
1. Marketing offers outstanding career
opportunities.
2. Marketing affects your life every day.
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18. *xplain ho/ marketing is important to 3usiness and society.
ANS:
Marketing contri3utes directly to the achievement of 3usiness o39ectives, including survival, profits,
and gro/th. Marketing is concerned /ith assessing the /ants and satisfactions of customers, designing
and managing product offerings, determining prices, developing distri3ution strategies, and
communicating /ith customers. Marketing is important to society 3ecause it efficiently distri3utes the
output of farms and factories to the millions of consumers /orld/ide. Marketing makes products and
services safely and conveniently availa3le /hen 3uyers /ant them, in desired 6uantities, at accessi3le
locations.
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1<. *xplain ho/ marketing affects consumers; everyday life. Jo/ /ill the study of marketing ena3le you
to 3e a 3etter consumerH
ANS:
*very person participates in the marketing process as a consumer of goods and services. A3out half of
every dollar spent pays for marketing costs. #y developing an understanding of marketing, one can
3etter understand the 3uying process, negotiate more effectively /ith sellers, and demand corrective
action /hen products do not meet performance standards.
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)*+: '#,* Model 'ustomer MS': #-""MS -evel = Synthesis