Defining Marketing For The 21st Century

Chapter 1: Defining Marketing for the 21st Century








GENERAL CONCEPT QUESTIONS



Multiple Choice



1. The most formal definition of marketing is ________.

a. meeting needs profitably

b. identifying and meeting human and social needs

c. the four Ps (product, price, place, promotion)

d. an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders

e. improving the quality of life for consumers

Answer: d Page: 5 Difficulty: Medium



2. ________ takes place when at least one party to a potential exchange thinks about the means of achieving desired responses from other parties.

a. Marketing management

b. Forecasting

c. Segmentation

d. Targeting

e. Distribution

Answer: a Page: 5 Difficulty: Medium AACSB: Communication



3. Marketing management is ________.

a. managing the marketing process

b. monitoring the profitability of the company’s products and services

c. selecting target markets

d. developing marketing strategies to move the company forward

e. the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value

Answer: e Page: 5 Difficulty: Easy





4. A social definition of marketing says ________.

a. effective marketing requires companies to remove intermediary parties to achieve a closer connection with direct consumers

b. a company should focus exclusively on achieving high production efficiency, low costs, and mass distribution to facilitate the broadest possible access to the company’s products

c. marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others

d. marketing is the process of extracting maximal value from consumers to facilitate corporate growth

e. marketing is the process of aggressive selling and promotion to encourage the purchase of products that might otherwise be unsought by the consumer

Answer: c Page: 5 Difficulty: Medium



5. ________ goods constitute the bulk of most countries’ production and marketing efforts.

a. Durable

b. Impulse

c. Physical

d. Service

e. Event

Answer: c Page: 6 Difficulty: Medium



6. As economies advance, a growing proportion of their activities focuses on the production of ________.

a. products

b. events

c. experiences

d. places

e. services

Answer: e Page: 6 Difficulty: Easy AACSB: Analytic Skills



7. ________ actively work to build a strong, favorable, and unique image in the minds of their target publics.

a. Information

b. Shopping goods

c. Durable goods

d. Organizations

e. Properties

Answer: d Page: 7 Difficulty: Medium AACSB: Analytic Skills





8. Charles Revson of Revlon observed: “In the factory, we make cosmetics; in the store, ________.”

a. we make profits

b. we challenge competitors

c. we implement ads

d. we sell hope

e. we sell quality

Answer: d Page: 7 Difficulty: Easy AACSB: Reflective Thinking



9. A ________ is someone seeking a response (attention, a purchase, a vote, a donation) from another party, called the ________.

a. salesperson; customer

b. fund-raiser; contributor

c. politician; voter

d. marketer; prospect

e. celebrity; audience

Answer: d Page: 7 Difficulty: Hard AACSB: Analytic Skills



10. In ________, consumers may share a strong need that cannot be satisfied by an existing product.

a. negative demand

b. latent demand

c. declining demand

d. irregular demand

e. nonexistent demand

Answer: b Page: 8 Difficulty: Medium



11. In ________, more customers would like to buy the product than can be satisfied.

a. latent demand

b. irregular demand

c. overfull demand

d. excessive

e. negative demand

Answer: c Page: 8 Difficulty: Medium



12. In ________, consumers dislike the product and may even pay a price to avoid it.

a. nonexistent demand

b. overfull demand

c. irregular demand

d. negative demand

e. declining demand

Answer: d Page: 8 Difficulty: Medium





13. Marketers often use the term ________ to cover various groupings of customers.

a. people

b. buying power

c. demographic segment

d. social class position

e. market

Answer: e Page: 9 Difficulty: Hard AACSB: Analytic Skills



14. Companies selling mass consumer goods and services such as soft drinks, cosmetics, air travel, and athletic shoes and equipment spend a great deal of time trying to establish a superior brand image in markets called ________.

a. business markets

b. global markets

c. consumer markets

d. nonprofit and governmental markets

e. service markets

Answer: c Page: 9 Difficulty: Medium AACSB: Analytic Skills



15. Much of a brand’s strength in consumer markets depends on ________.

a. developing a superior product

b. creating superior packaging

c. ensuring the product’s availability

d. backing the product with engaging communications and reliable service

e. all of the above

Answer: e Page: 9 Difficulty: Hard AACSB: Analytic Skills



16. In business markets, advertising can play a role, but a stronger role may be played by the sales force, ________, and the company’s reputation for reliability and quality.

a. brand image

b. distribution

c. promotion

d. price

e. performance

Answer: d Pages: 9–10 Difficulty: Hard AACSB: Communication



17. Global marketers must decide ________.

a. which countries to enter

b. how to enter each country (as an exporter, licenser, joint venture partner, contract manufacturer, or solo manufacturer)

c. how to adapt their product and service features to each country

d. how to price their products in different countries

e. all of the above

Answer: e Page: 10 Difficulty: Medium AACSB: Reflective Thinking





18. Mohan Sawhney has proposed the concept of ________ to describe a cluster of complementary products and services that are closely related in the minds of consumers but are spread across a diverse set of industries.

a. metamarket

b. vertical integration

c. horizontal integration

d. betamarket

e. synchronized marketing

Answer: a Page: 10 Difficulty: Hard



19. The ________ process consists of analyzing marketing opportunities, selecting target markets, designing marketing strategies, developing marketing programs, and managing the marketing effort.

a. marketing planning

b. strategic planning

c. market research

d. opportunity analysis

e. share of customer

Answer: a Page: 11 Difficulty: Medium AACSB: Analytic Skills



20. ________ are basic human requirements; ________ are the ways in which we satisfy those requirements, and they are shaped by our society.

a. Wants; needs

b. Demands; wants

c. Needs; wants

d. Needs; demands

e. Demands; needs

Answer: c Page: 12 Difficulty: Medium AACSB: Ethical Reasoning



21. A(n) ________ need is a need that the consumer explicitly verbalizes.

a. stated

b. real

c. unstated

d. delight

e. secret

Answer: a Page: 12 Difficulty: Hard AACSB: Reflective Thinking



22. The identification and profiling of distinct groups of buyers who might prefer or require varying product and service mixes is known as ________.

a. segmentation

b. integration

c. disintermediation

d. targeting

e. partner relationship management

Answer: a Page: 13 Difficulty: Medium



23. Companies address needs by putting forth a(n) ________, a set of benefits that they offer to customers to satisfy their needs.

a. brand

b. value proposition

c. offering

d. target market

e. demand

Answer: b Page: 13 Difficulty: Medium



24. A(n) ________ need is one that motivates the consumer but that the consumer is reluctant or unwilling to explicitly verbalize.

a. real

b. unstated

c. delight

d. secret

e. stated

Answer: d Page: 13 Difficulty: Hard AACSB: Reflective Thinking



25. During market segmentation analysis, the marketer identifies which segments present the greatest opportunity. These segments are called ________.

a. target markets

b. primary markets

c. tertiary markets

d. demographic markets

e. focused markets

Answer: a Page: 13 Difficulty: Medium AACSB: Analytic Skills



26. For each target market, the firm develops a ________. The offering is then positioned in the minds of the target buyers as delivering some central benefit(s).

a. value offering

b. niche offering

c. market offering

d. segment offering

e. social offering

Answer: c Page: 13 Difficulty: Medium



27. ________ reflects a customer’s judgment of a product’s performance in relation to his or her expectations.

a. Loyalty

b. Satisfaction

c. Value

d. Expectations

e. Comparison shopping

Answer: b Page: 14 Difficulty: Medium AACSB: Reflective Thinking



28. If a marketer decides to use warehouses, transportation companies, banks, and insurance companies to facilitate transactions with potential buyers, the marketer is using what is called a ________.

a. service channel

b. distribution channel

c. brand channel

d. relationship channel

e. intermediary channel

Answer: a Page: 14 Difficulty: Medium AACSB: Analytic Skills



29. The ________ is a long channel stretching from raw materials to components to final products that are carried to final buyers.

a. communication channel

b. distribution channel

c. supply chain

d. service channel

e. marketing channel

Answer: c Page: 14 Difficulty: Medium



30. Value reflects ________.

a. the price consumers are charged for a product

b. the cost of manufacturing a product

c. the degree to which consumer demand for the product is positive

d. the sum of the perceived tangible and intangible benefits and costs to customers

e. all of the above

Answer: d Page: 14 Difficulty: Hard AACSB: Ethical Reasoning



31. ________ includes all the actual and potential rival offerings and substitutes that a buyer might consider.

a. Competition

b. The product offering

c. A value proposition

d. The supply chain

e. The marketing environment

Answer: a Page: 14 Difficulty: Easy AACSB: Reflective Thinking



32. The ________ includes the actors involved in producing, distributing, and promoting the offering. The main actors are the company, suppliers, distributors, dealers, and the target customers.

a. operations environment

b. management environment

c. strategic environment

d. task environment

e. tactical environment

Answer: d Page: 15 Difficulty: Medium AACSB: Analytic Skills





33. Many countries have ________ industries to create greater competition and growth opportunities.

a. open-market

b. deregulated

c. regulated

d. scientifically segmented

e. created mass market

Answer: b Page: 15 Difficulty: Medium AACSB: Multicultural/Diversity



34. Rising promotion costs and shrinking profit margins are the result of ________.

a. changing technology

b. globalization

c. deregulation

d. privatization

e. heightened competition

Answer: e Page: 15 Difficulty: Hard AACSB: Reflective Thinking



35. Industry boundaries are blurring rapidly as companies identify new opportunities at the intersection of two or more industries—this is called ________.

a. globalization

b. customization

c. industry convergence

d. heightened competition

e. acquisition

Answer: c Page: 15 Difficulty: Medium



36. In response to giant retailers and category killers, entrepreneurial retailers are building entertainment into stores with coffee bars, lectures, demonstrations, and performances. They are marketing a(n) ________ rather than a product assortment.

a. experience

b. customer value

c. customer delight

d. total service solution

e. intangible benefit(s)

Answer: a Page: 15 Difficulty: Medium AACSB: Reflective Thinking



37. In response to threats from such companies as AOL, Amazon.com, Yahoo!, eBay, E*TRADE, and dozens of others, established manufacturers and retailers became “brick-and-click” oriented by adding online services to their existing offerings. This process became known as ________.

a. reintermediation

b. disintermediation

c. e-commerce

d. e-collaboration

e. new-market synchronization

Answer: a Page: 16 Difficulty: Hard AACSB: Use of IT



38. Many brick-and-click competitors became stronger contenders in the marketplace than the pure-click firms because they had a larger pool of resources to work with and ________.

a. better prices

b. greater value

c. well-established brand names

d. one-on-one communications

e. direct-selling capability

Answer: c Page: 16 Difficulty: Medium AACSB: Use of IT



39. Managers of ________-oriented businesses concentrate on achieving high production efficiency, low costs, and mass distribution.

a. selling

b. product

c. production

d. marketing

e. consumer

Answer: c Page: 18 Difficulty: Medium AACSB: Reflective Thinking



40. The feasibility of companies dealing with customers one at a time has risen as a result of advances in ________, computers, the Internet, and database marketing software.

a. improved communication flow

b. information technology

c. just-in-time manufacturing

d. factory customization

e. customer-centered strategies

Answer: d Page: 18 Difficulty: Hard AACSB: Use of IT



41. The ________ concept holds that consumers will favor those products that offer the most quality, performance, or innovative features.

a. product

b. marketing

c. production

d. selling

e. holistic marketing

Answer: a Page: 18 Difficulty: Easy



42. The ________ is practiced most aggressively with unsought goods, goods that buyers normally do not think of buying, such as insurance, encyclopedias, and cemetery plots.

a. marketing concept

b. selling concept

c. production concept

d. product concept

e. holistic marketing concept

Answer: b Page: 19 Difficulty: Medium AACSB: Analytic Skills



43. The ________ concept holds that consumers and businesses, if left alone, will ordinarily not buy enough of the organization’s products.

a. production

b. selling

c. marketing

d. product

e. holistic marketing

Answer: b Page: 19 Difficulty: Medium



44. Several scholars have found that companies who embrace the marketing concept achieve superior performance. This was first demonstrated for companies practicing a ________—understanding and meeting customers’ expressed needs.

a. reactive market orientation

b. proactive marketing orientation

c. total market orientation

d. impulsive market orientation

e. holistic market orientation

Answer: a Page: 19 Difficulty: Medium



45. According to Theodore Levitt, who drew contrasts between the selling and marketing concepts, ________ is preoccupied with the need to convert products into cash.

a. marketing

b. selling

c. direct marketing

d. holistic marketing

e. service marketing

Answer: b Page: 19 Difficulty: Medium



46. Companies that practice both a reactive and proactive marketing orientation are implementing a ________ and are likely to be the most successful.

a. total market orientation

b. external focus

c. customer focus

d. competitive, customer focus

e. confrontation process

Answer: a Page: 19 Difficulty: Medium AACSB: Reflective Thinking



47. Companies that adopt and employ the marketing concept switch from being solely product centered to being more ________ centered.

a. competency

b. strategy

c. marketing

d. customer

e. sales

Answer: d Page: 19 Difficulty: Hard AACSB: Analytic Skills



48. ________ can be seen as the development, design, and implementation of marketing programs, processes, and activities that recognizes the breadth and interdependencies of their effects.

a. Niche marketing

b. Holistic marketing

c. Relationship marketing

d. Supply chain marketing

e. Demand-centered marketing

Answer: b Pages: 19–20 Difficulty: Medium AACSB: Reflective Thinking



49. ________ marketing aims to build mutually satisfying long-term relations with key parties such as customers, suppliers, distributors, and other marketing partners.

a. Holistic

b. Demand-based

c. Direct

d. Relationship

e. Synthetic

Answer: d Page: 20 Difficulty: Easy AACSB: Communication



50. The strength of the ________ depends on the mutually profitable business relationships built by the company and its supporting stakeholders.

a. sales network

b. holistic union

c. marketing network

d. supply chain network

e. integrated network

Answer: c Page: 22 Difficulty: Hard AACSB: Communication



51. One traditional depiction of marketing activities is in terms of the marketing mix or four Ps. The four Ps are characterized as being ________.

a. product, positioning, place, and price

b. product, production, price, and place

c. promotion, place, positioning, and price

d. place, promotion, production, and positioning

e. product, price, promotion, and place

Answer: e Page: 22 Difficulty: Medium



52. From a buyer’s point of view, each marketing tool is designed to deliver a customer benefit. The SIVA customer-centric breakdown of marketing activities includes ________.

a. sale, interaction, voice, and availability

b. solution, information, value, and access

c. satisfaction, intention, value, and account

d. situation, importance, variability, and awareness

e. none of the above

Answer: b Page: 23 Difficulty: Medium AACSB: Multicultural/Diversity



53. A firm can ________ only in the long run.

a. reduce its sales-force size

b. develop new products

c. change its price

d. modify advertising expenditures

e. All of the above may be done in the short or long run.

Answer: b Page: 23 Difficulty: Medium AACSB: Reflective Thinking



54. Holistic marketing incorporates ________, ensuring that everyone in the organization embraces appropriate marketing principles, especially senior management.

a. profit objectives

b. share of customer

c. internal marketing

d. the marketing mix

e. strategic planning

Answer: c Page: 24 Difficulty: Hard AACSB: Analytic Skills



55. Companies are recognizing that much of their market value comes from ________, particularly their brands, customer base, employees, distributor and supplier relations, and intellectual capital.

a. variable assets

b. the value proposition

c. intangible assets

d. tangible assets

e. customer preferences

Answer: c Page: 26 Difficulty: Easy AACSB: Reflective Thinking



56. Holistic marketing incorporates ________, an understanding of broader concerns in the ethical, environmental, legal, and social context of marketing activities.

a. safe product design

b. cultural marketing

c. social responsibility marketing

d. cross-functional teams

e. direct-sales policies

Answer: c Page: 26 Difficulty: Medium



57. The ________ holds that the organization’s task is to determine the needs, wants, and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors in a way that preserves or enhances the consumer’s and the society’s well-being.

a. customer-centered business

b. focused business model

c. societal marketing concept

d. ethically responsible marketing manager

e. production-centered business

Answer: c Page: 27 Difficulty: Medium AACSB: Analytic Skills

58. At the heart of any marketing program is the ________—the firm’s tangible offering to the market.

a. service offer

b. product

c. sales support team

d. packaging

e. auxiliary offer

Answer: b Page: 29 Difficulty: Medium AACSB: Analytic Skill



59. ________ activities include those the company undertakes to make the product accessible and available to target customers.

a. Consumer behavior

b. Market segmentation

c. Marketing research

d. Channel

e. New-product development

Answer: d Pages: 29-30 Difficulty: Medium AACSB: Communication



60. Marketing feedback and ________ processes are necessary to understand the efficiency and effectiveness of marketing activities and how both could be improved.

a. control

b. analysis

c. measurement

d. retrospective

e. consumer behavior

Answer: a Page: 30 Difficulty: Medium AACSB: Analytic Skills



True/False



61. A short definition of marketing is “meeting needs profitably.”

Answer: True Page: 5 Difficulty: Easy AACSB: Analytic Skills



62. Value marketing is the “art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value.”

Answer: False Page: 5 Difficulty: Medium



63. Services constitute the bulk of most countries’ production and marketing effort.

Answer: False Page: 6 Difficulty: Medium AACSB: Analytic Skills



64. The U.S. economy today consists of a 70–30 services-to-goods mix.

Answer: True Page: 6 Difficulty: Medium



65. “Friends Don’t Let Friends Drive Drunk,” is an example of marketing an experience to an interested audience.

Answer: False Page: 7 Difficulty: Hard AACSB: Reflective Thinking



66. Unwholesome demand occurs when consumers’ purchases vary on a seasonal, monthly, weekly, daily, or even hourly basis.

Answer: False Page: 8 Difficulty: Hard AACSB: Analytic Skills



67. When consumers share a strong need that cannot be satisfied by an existing product, they are engaged in latent demand.

Answer: True Page: 8 Difficulty: Medium



68. Companies selling goods and services in the global marketplace have the advantage of being able to sell the goods and services in almost the same way as they do in their domestic market.

Answer: False Page: 10 Difficulty: Easy AACSB: Multicultural/Diversity



69. Companies selling their goods to nonprofit organizations may charge an extra premium over their normal prices because these organizations are largely indifferent to price.

Answer: False Page: 10 Difficulty: Medium AACSB: Reflective Thinking



70. A marketspace is physical, as when you shop in a store.

Answer: False Page: 10 Difficulty: Medium AACSB: Use of IT



71. Wants are basic human requirements such as food or air.

Answer: False Page: 12 Difficulty: Medium



72. Demands are wants for specific products backed by an ability to pay.

Answer: True Page: 12 Difficulty: Easy AACSB: Analytic Skills



73. Most marketers satisfy everyone in a market—that’s how they stay in business.

Answer: False Page: 13 Difficulty: Medium



74. The customer-value triad consists of a combination of quality, service, and price.

Answer: True Page: 14 Difficulty: Hard AACSB: Analytic Skills



75. A distribution channel includes distributors, wholesalers, retailers, and agents that display, sell, or deliver the physical product or service(s) to the buyer or user.

Answer: True Page: 14 Difficulty: Easy



76. The main actors in the task environment are the components of demographics, economics, physical setting, technology, the political-legal system, and the social-cultural arena.

Answer: False Page: 14 Difficulty: Medium AACSB: Analytic Skills



77. Regulation of industries has created greater competition and growth opportunities because the playing field has been leveled.

Answer: False Page: 15 Difficulty: Hard AACSB: Reflective Thinking



78. Industry boundaries are blurring at an incredible rate as companies are recognizing that new opportunities lie at the intersection of two or more industries.

Answer: True Page: 15 Difficulty: Medium



79. The overabundance of information available on the Internet has made it more difficult for consumers to compare product features and prices.

Answer: False Page: 16 Difficulty: Easy AACSB: Reflective Thinking



80. Companies can facilitate and speed external communication among customers by creating online and off-line “buzz” through brand advocates and user communities.

Answer: True Page: 17 Difficulty: Easy AACSB: Communication



81. The proliferation of targeted media and communication channels has allowed marketers to become much more aware of their target consumers’ preferences and to customize both products and messages for individual consumers.

Answer: True Page: 17 Difficulty: Medium AACSB: Communication



82. The marketing concept is one of the oldest concepts in business.

Answer: False Page: 18 Difficulty: Medium



83. The selling concept holds that consumers will favor those products that offer the most quality, performance, or innovative features.

Answer: False Page: 18 Difficulty: Medium AACSB: Analytic Skills



84. The marketing concept stresses a customer-centered approach to marketing.

Answer: True Page: 19 Difficulty: Easy AACSB: Analytic Skills



85. The selling concept is based on the development, design, and implementation of marketing programs, processes, and activities that recognizes their breadth and interdependencies.

Answer: False Page: 19 Difficulty: Medium AACSB: Analytic Skills



86. Relationship marketing aims to build mutually satisfying long-term relationships with key parties.

Answer: True Page: 20 Difficulty: Medium



87. Attracting a new customer may cost five times as much as doing a good enough job to retain an existing one.

Answer: True Page: 22 Difficulty: Medium AACSB: Analytic Skills



88. The marketing-mix component called promotion includes such items as product variety, design, packaging, services, and warranties.

Answer: False Page: 23 Difficulty: Medium





89. When a marketer makes decisions involving channels, assortments, locations, and transportation, the marketer is making what are called place decisions.

Answer: True Page: 23 Difficulty: Medium



90. Advertising, sales promotion, and direct marketing are all part of what is called the offering mix.

Answer: False Page: 23 Difficulty: Medium



91. One of the key themes of integrated marketing is that there are very few marketing activities that can effectively communicate and deliver value.

Answer: False Page: 22 Difficulty: Medium AACSB: Reflective Thinking



92. Internal marketing is an appropriate practice to be used in holistic marketing.

Answer: True Page: 24 Difficulty: Easy AACSB: Reflective Thinking



93. In most companies, marketing should focus on the customer and other departments should focus on the business itself.

Answer: False Page: 24 Difficulty: Easy AACSB: Reflective Thinking



94. Performance marketing involves reviewing metrics assessing market share, customer loss rate, customer satisfaction, and product quality in the evaluation of the effectiveness of marketing activities.

Answer: True Page: 26 Difficulty: Medium



95. The selling relationship concept holds that consumers will prefer products that are ethical, environmentally responsible, legal, and social in the context of marketing activities and programs.

Answer: False Page: 27 Difficulty: Medium AACSB: Analytic Skills



96. The societal marketing concept holds that the organization’s task is to determine the needs, wants, and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors in a way that preserves or enhances the consumer’s and the society’s well-being.

Answer: True Page: 27 Difficulty: Easy



97. Cause-related marketing involves donating a percentage of revenues to a specific cause based on the revenue occurring during the announced period of support.

Answer: True Page: 27 Difficulty: Medium AACSB: Analytic Skills



98. Making gifts of money, goods, or time to help nonprofit organizations, groups, or individuals is known as corporate philanthropy.

Answer: True Page: 27 Difficulty: Medium



99. To understand what is happening inside and outside the company, the company needs a reliable marketing information system.

Answer: True Page: 28 Difficulty: Easy AACSB: Reflective Thinking



100. Because of surprises and disappointments that can occur as marketing plans are implemented, the company will need feedback and control to improve itself.

Answer: True Page: 30 Difficulty: Easy AACSB: Reflective Thinking



Essay



101. Marketing has been described being both an “art” and a “science.” Discuss the differences and similarities between these two marketing thrusts. Provide your theoretical response and a “real-life” example where you have seen both processes work effectively at creating customer value and loyalty.



Suggested Answer: The student should demonstrate his or her understanding that the marketer must use data to understand customer needs and translate this understanding into properly designed products and services. They should also see the “art” side of human behavior, where the customer makes decisions based on emotions, such as the perceived benefits.

Page: 5 Difficulty: Medium AACSB: Reflective Thinking



102. Marketing people are involved in marketing 10 types of entities. List and briefly characterize those entities.



Suggested Answer: The types of entities that marketing people are involved in marketing are (1) goods—physical goods, (2) services—hotels and car rental, (3) events—time-based events such as trade shows, (4) experiences—Walt Disney’s Magic Kingdom, (5) persons—celebrity marketing, (6) places—cities, states, regions, and even whole nations, (7) properties—intangible rights of ownership of either real property or financial property, (8) organizations—corporate identity, (9) information—information produced and marketed as a product, and (10) ideas—marketing the basic idea of a market offering.

Pages: 6–7 Difficulty: Hard AACSB: Analytic Skills





103. Marketers are skilled in stimulating demand for a company’s products, but this is too limited a view of the tasks they perform. Just as production and logistics professionals are responsible for supply management, marketers are responsible for demand management. Marketing managers seek to influence the level, timing, and composition of demand to meet the organization’s objectives. List and briefly characterize the eight demand states described in the text.



Suggested Answer: The eight different demand states are (1) negative demand—consumers dislike the product and may even pay a price to avoid it, (2) nonexistent demand—consumers may be unaware or uninterested in the product, (3) latent demand—consumers may share a strong need that cannot be satisfied by an existing product, (4) declining demand—consumers begin to buy the product less frequently or not at all, (5) irregular demand—consumer purchases vary on a seasonal, monthly, weekly, daily, or even hourly basis, (6) full demand—consumers are adequately buying all products put into the marketplace, (7) overfull demand—more consumers would like to buy the product than can be satisfied, and (8) unwholesome demand—consumers may be attracted to products that have undesirable social consequences.

Page: 8 Difficulty: Hard AACSB: Analytic Skills



104. We can distinguish among five types of customer needs. List and provide an example of each of those customer needs.



Suggested Answer: The five types of customer needs are (note the example from the text): (1) stated needs—the customer wants an inexpensive car, (2) real needs—the customer wants a car whose operating cost, not its initial price, is low, (3) unstated needs—the customer expects good service from the dealer, (4) delight needs—the customer would like the dealer to include an onboard navigation system, and (5) secret needs—the customer wants to be seen by friends as a savvy consumer.

Pages: 12–13 Difficulty: Medium AACSB: Analytic Skills



105. Distinguish between the concepts of value and satisfaction.



Suggested Answer: The offering will be successful if it delivers value and satisfaction to the target buyer. The buyer chooses between different offerings on the basis of which is perceived to deliver the most value. Value reflects the perceived tangible and intangible benefits and costs to customers. Value can be seen as primarily a combination of quality, service, and price (called the customer-value triad). Satisfaction reflects a person’s comparative judgments resulting from a product’s perceived performance (or outcome) in relation to his or her expectations.

Pages: 13–14 Difficulty: Medium AACSB: Reflective Thinking



106. Examine and document the factors that have brought about customers’ higher expectations of their suppliers. What are the major shifts in marketing management that have brought about these changes?



Suggested Answer: Students may not understand that our world’s capacity to produce products exceeds the needs. Therefore, customers have more choices and can be more demanding. The time crunch has allowed new providers to enter the market. For example, Netflix competes effectively with Blockbuster Video because they deliver videos to your home. It’s service like this that fits the customer needs to satisfy what money can buy—time. Students may use appropriate marketing management shifts as described in the chapter.

Pages: 16–17 Difficulty: Hard AACSB: Reflective Thinking



107. The competing concepts under which organizations have conducted marketing activities include: the production concept, product concept, selling concept, marketing concept, and holistic marketing concept. Evaluate the advantages and disadvantages of each concept as defined and presented in your textbook. Which concept do you believe is the most effective? Why?



Suggested Answer: Although students will be expected to research each concept, they should conclude the most effective concept is the holistic marketing concept, where companies need to have a more complete, cohesive approach that goes beyond traditional applications of the marketing concept.

Pages: 18–22 Difficulty: Medium AACSB: Reflective Thinking



108. Increasingly, a key goal of marketing is to develop deep, enduring relationships with all people or organizations that could directly or indirectly affect the success of the firm’s marketing activities. Relationship marketing has the aim of building mutually satisfying long-term relations with key parties—customers, suppliers, distributors, and other marketing partners—in order to earn and retain their business.



Discuss the merits of relationship marketing. Describe in detail a company who is in business today that models relationship marketing.



Suggested Answer: Students should understand the relationship between any supplier and customer is not just in the mechanics of the transaction, but more importantly how the customer is treated during the transaction. The better the relationship, the more apt the customer will remain loyal. They should pick a company that has served them well and made them feel special each and every time.

Pages: 20–22 Difficulty: Medium AACSB: Communication





109. Identify and define the four Ps and the corresponding consumer-oriented SIVA dimensions.



Suggested Answer: The four Ps are: Product (product variety, quality, design, features, brand name, packaging, sizes, services, warranties, returns), Price (list price, discounts, allowances, payment period, credit terms), Promotion (sales promotion, advertising, sales force, public relations, direct marketing), and Place (channels, coverage, assortments, locations, inventory, transportation). A complementary breakdown of marketing activities that approaches the process from a customer-centric viewpoint is the SIVA framework: Solution (How can I solve my problem?), Information (Where can I learn more about it?), Value (What is my total sacrifice to get the solution?), and Access (Where can I find it?).

Page: 23 Difficulty: Hard AACSB: Analytic Skills



110. According to Starbucks Chairman Howard Schultz, “Consumers now commonly engage in a cultural audit of [product and service] providers. People want to know your value and ethics demonstrated by how you treat employees, the community in which you operate.” Discuss the concept of social responsibility marketing and how it impacts both companies and consumers.



Suggested Answer: The societal marketing concept holds that the organization’s task is to determine the needs, wants, and interests of target markets and to deliver the desired satisfaction more effectively and efficiently than competitors in a way that preserves or enhances the consumer’s and society’s long-term well-being. Many companies actively engaged in corporate social responsibility campaigns to both motivate employees and attract consumers. As goods become more commoditized, and as consumers grow more socially conscious, some companies are adding social responsibility as a way to differentiate themselves from competitors, build consumer preference, and achieve notable sales and profit gains. They believe customers will increasingly look for signs of good corporate citizenship.

Pages: 26–27 Difficulty: Medium AACSB: Ethical Reasoning





APPLICATION QUESTIONS





Multiple Choice



111. When IKEA noticed that people wanted good furniture at a substantially lower price and created knockdown furniture, they demonstrated marketing savvy and turned a private or social need into a(n) ________.

a. market need

b. profitable business opportunity

c. product development

d. invention

e. customer want

Answer: b Page: 5 Difficulty: Medium AACSB: Reflective Thinking



112. Car rental firms, barbers, and management consultants provide ________.

a. goods

b. experiences

c. places

d. services

e. information

Answer: d Page: 6 Difficulty: Easy AACSB: Analytic Skills



113. Walt Disney’s Magic Kingdom represents ________ marketing: Customers visit a fairy kingdom, a pirate ship, or a haunted house.

a. experiential

b. services

c. event

d. celebrity

e. goods

Answer: a Page: 6 Difficulty: Medium AACSB: Analytic Skills



114. Janet is very upset that she can’t get tickets to the new Rolling Stones concert. “Why do they keep advertising the show if you can’t get tickets?” wonders Janet. Which of the following demand states applies to Janet’s situation?

a. nonexistent demand

b. latent demand

c. full demand

d. unwholesome demand

e. overfull demand

Answer: e Page: 8 Difficulty: Medium AACSB: Analytic Skills





115. When Jack purchases his air-conditioning unit in the winter to avoid the high prices found in the summer, he is exhibiting ________ demand.

a. irregular

b. declining

c. impulse

d. latent

e. negative

Answer: a Page: 8 Difficulty: Medium AACSB: Analytic Skills



116. Julia hates smoking and is willing to pay an extra tax just to help eliminate smoking in her city. She is exhibiting ________ with respect to smoking.

a. negative demand

b. nonexistent demand

c. latent demand

d. declining demand

e. unwholesome demand

Answer: a Page: 8 Difficulty: Medium AACSB: Analytic Skills



117. In a modern exchange economy, all of the following markets are likely to exist EXCEPT ________.

a. resource market

b. manufacturer market

c. government market

d. consumer market

e. class market

Answer: e Page: 9 Difficulty: Medium AACSB: Reflective Thinking



118. In a simple marketing system, if the automobile industry sends advertising and personal sales messages to prospective buyers, it expects ________ in exchange.

a. goods

b. services

c. money

d. information

e. image enhancement

Answer: d Page: 9 Difficulty: Medium AACSB: Analytic Skills



119. Automobile manufactures, new car and used car dealers, financing companies, and insurance companies are all part of the automobile ________.

a. marketplace

b. marketspace

c. metamediary

d. marketportal

e. metamarket

Answer: e Page: 10 Difficulty: Medium



120. When Frank identifies a marketing opportunity to market his company’s ski and snowboard helmets to baby boomers interested in winter sports through advertisements in enthusiast magazines, Frank is going through the _____.

a. metamarket

b. marketing planning process

c. social marketing concept

d. supply chain conglomeration

e. negative demand

Answer: b Page: 11 Difficulty: Medium AACSB: Analytic Skills



121. When a customer has a(n) ________ need, the customer might expect something like admiration from friends because he or she has purchased something that might indicate a certain market savvy.

a. real

b. unstated

c. delight

d. secret

e. stated

Answer: d Page: 13 Difficulty: Hard AACSB: Analytic Skills



122. When Volvo runs advertisements suggesting that it is the safest car money can buy, it is engaging in which of the following forms of marketing programming?

a. Technological

b. Service

c. Market segmentation

d. Public relations

e. Positioning

Answer: e Page: 13 Difficulty: Medium AACSB: Communication



123. When online dot-coms, such as eBay and Amazon.com cut out the majority of middlemen that normally would participate in the exchange process, they were advocating ________.

a. category killers

b. every-day-low prices

c. reintermediation

d. disintermediation

e. supply chain conglomeration

Answer: d Page: 16 Difficulty: Medium AACSB: Use of IT





124. Under which of the following company orientations toward the marketplace would we expect to find the “better mousetrap” fallacy?

a. Production concept

b. Product concept

c. Selling concept

d. Marketing concept

e. Holistic marketing concept.

Answer: b Page: 18 Difficulty: Hard AACSB: Reflective Thinking



125. If marketers are characterized as “gardening” rather than “hunting,” the ________ is most likely to be the concept the marketers are following.

a. production concept

b. product concept

c. selling concept

d. marketing concept

e. social responsibility concept

Answer: d Page: 19 Difficulty: Hard AACSB: Reflective Thinking



126. When 3M, HP, and Motorola practice researching or imaging latent needs of consumers through a “probe-and-learn” process, they are most likely using which of the following marketing orientations with respect to their consumers?

a. Selling orientation

b. Promotion orientation

c. Supply-side orientation

d. Reactive market orientation

e. Proactive marketing orientation

Answer: e Page: 19 Difficulty: Medium AACSB: Reflective Thinking



127. Companies that practice ________ are implementing a total market orientation and are likely to be the most successful.

a. reactive market orientation

b. proactive marketing orientation

c. both reactive and proactive marketing orientation

d. consolidation and acquisition

e. “invent and market”

Answer: c Page: 19 Difficulty: Medium AACSB: Reflective Thinking



128. In which of the following dimensions of holistic marketing might we find an emphasis on communications, products and services, and channels?

a. Internal marketing

b. Integrated marketing

c. Socially responsible marketing

d. Global marketing

e. Relationship marketing

Answer: b Page: 21 Difficulty: Medium AACSB: Analytic Skills



129. Kroger supermarkets are aggressively pursuing a strategy of capturing a larger share of the customer’s “stomach.” Which of the following shifts in marketing management is most appropriate for this example?

a. From relying on old market positions to uncovering new ones.

b. From marketing does the marketing to everyone does the marketing.

c. From a focus on gaining market share to a focus on building customer share.

d. From focusing on profitable transactions to focusing on customer lifetime value.

e. From building brands through advertising to building brands through performance and integrated communications.

Answer: c Page: 22 Difficulty: Hard AACSB: Analytic Skills



130. A number of companies—including the Body Shop, Ben & Jerry’s, and Patagonia—have achieved notable sales and profit gains by adopting and practicing a form of the societal marketing concept called ________, by which a company with an image, product, or service to market builds a relationship or partnership with a cause, or a number of causes, for mutual benefit.

a. social marketing

b. environmental marketing

c. cause-related marketing

d. benefit marketing

e. responsible marketing

Answer: c Page: 27 Difficulty: Easy



Short Answer



131. What would be a good social definition of marketing?



Suggested Answer: Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others.

Page: 5 Difficulty: Medium





132. Discuss the eight demand states with respect to bifocal lenses for glasses.



Suggested Answer: Student answers may vary, but a possible answer includes the following: (1) negative demand—many people don’t want to admit they need bifocals, (2) nonexistent demand—when bifocal lenses were first introduced, people didn’t know they existed, (3) latent demand—before they were introduced, many people thought such a product would be nice, but didn’t think it would ever exist, (4) declining demand—this will occur when something better is invented, such as surgery to repair the eyes, (5) irregular demand—the consumer perceives a need for eye care devices only periodically, possibly when they begin having trouble seeing, (6) full demand—the manufacturers of the lenses are making all they possibly can, (7) overfull demand—the manufacturers of the lenses can’t make enough and inventories are low, and (8) unwholesome demand—seeking alternatives, consumers may find that alternatives have undesirable social consequences.

Page: 8 Difficulty: Hard AACSB: Reflective Thinking



133. New terms are now being used to describe where marketing is done. Using the automobile market, describe automotive buying behavior for a: (1) marketplace, (2) marketspace, and (3) metamarket.



Suggested Answer: Responses to this question should include a reference to the following: (1) marketplace—shopping for an automobile at a dealer’s lot, (2) marketspace—shopping for an automobile via the Internet, eBay, or even designing your own car via a manufacturer’s Web site, and (3) metamarket—(a cluster of complementary products and services that are closely related in the customer’s mind but are spread across a diverse set of industries) that might include insurance companies, the racing industry, the travel industry, the customization industry, et cetera. Individual answers might vary.

Page: 10 Difficulty: Medium AACSB: Analytic Skills



134. Identify the five key functions of the CMO in leading marketing within the organization.



Suggested Answer: The five key functions of the CMO in leading marketing within the organization are: (1) strengthening brands, (2) measuring marketing effectiveness, (3) driving new-product development based on customer needs, (4) getting meaningful customer insights, (5) utilizing new marketing technology.

Page: 11 Difficulty: Medium AACSB: Reflective Thinking





135. Assume that you have been given the task of assisting a company in designing its marketing planning process. What components should be in such a process? Be specific in your answer.



Suggested Answer: The marketing planning process consists of analyzing marketing opportunities, selecting target markets, designing strategies, developing marketing programs, and managing the marketing effort. Students might also review Figure 1.6 for additional information.

Page: 11 Difficulty: Hard AACSB: Analytic Skills



136. Consumers often have many needs that are not readily obvious. Just observing their behavior inside a retail store is not enough to get a true feel for their “needs.” List and briefly describe the five types of needs that most consumers have.



Suggested Answer: The various consumer needs are: (1) stated needs—what the consumer says he or she wants—a car, (2) real needs—the customer wants a car whose operating costs, not its initial price, is low, (3) unstated needs—the customer expects good service and honesty from the dealer, (4) delight needs—the customer would like a DVD player set-up thrown in to guarantee a quick signing of the purchase agreement, and (5) secret needs—inner fantasies such as gaining prestige with members of the opposite sex or friends.

Pages: 12–13 Difficulty: Hard AACSB: Analytic Skills



137. Wal-Mart knows that to reach its target markets three kinds of marketing channels may be used. What are these three marketing channels and how might Wal-Mart use each of them?



Suggested Answer: The three marketing channels are communication, distribution, and service channels. Wal-Mart could use advertising to communicate price specials to consumers (communication channel), use wholesalers to assemble merchandise assortments to be sold in the Wal-Mart stores (distribution channels), and use transportation companies (service channels) to extend Wal-Mart’s global reach.

Page: 14 Difficulty: Hard AACSB: Analytic Skills



138. The marketplace isn’t what it used to be. List and briefly discuss what new behaviors, new opportunities, and new challenges await the marketer in the 21st century.



Suggested Answer: Responses to this question should include: (1) changing technology, (2) globalization, (3) deregulation, (4) privatization, (5) customer resistance, (6) heightened competition, (7) industry convergence, (8) retail transformation, and (9) disintermediation.

Pages: 15–16 Difficulty: Hard AACSB: Reflective Thinking



139. The digital revolution has placed a whole new set of capabilities in the hands of consumers and businesses. Consider what consumers have today that they didn’t have yesterday. As indicated in the chapter, what would appear on such a list?



Suggested Answer: Responses to this question should include: (1) a substantial increase in buying power, (2) a greater variety of available goods and services, (3) a great amount of information about practically anything, (4) a greater ease in interacting and placing and receiving orders, and (5) an ability to compare notes on products and services.

Page: 16 Difficulty: Hard AACSB: Use of IT



140. Discuss the concept of disintermediation and provide an example.



Suggested Answer: Disintermediation grew out of the rush to embrace the dot-coms and e-commerce. Essentially, the dot-coms removed many of the traditional intermediaries that brought goods and services to consumers by encouraging consumers to deal directly with the dot-coms via the Internet. “Brick-and-click” businesses eventually brought some of the intermediaries back through a process called reintermediation.

Page: 16 Difficulty: Medium AACSB: Use of IT



141. The Internet has given today’s companies a new set of capabilities. Among those capabilities is the ability to operate a new information channel. Describe how information can be used by the marketer in this new channel.



Suggested Answer: Companies can operate a powerful new information and sales channel, the Internet, with augmented geographical reach to inform and promote their businesses and products worldwide. By establishing one or more Web sites, a company can list its products and services, its history, its business philosophy, its job opportunities, and other information of interest to visitors. For additional information, see chapter section.

Page: 17 Difficulty: Medium AACSB: Use of IT



142. Arthur Jones has decided to build his manufacturing business (lawn mowers) around the production concept. If this approach is taken, what will be Mr. Jones’ primary areas of concentration as he builds his business?



Suggested Answer: This orientation holds that consumers will prefer products that are widely available and inexpensive. Managers of production-oriented businesses concentrate on high production efficiency, low costs, and mass distribution. This approach is also used when a company wants to expand the market. Students may use these facts as they design their answer.

Page: 18 Difficulty: Medium AACSB: Analytic Skills



143. Illustrate the differences between a reactive market orientation and a proactive marketing orientation. Give an example of a company that uses a proactive marketing orientation



Suggested Answer: In a reactive market orientation a company might be content to keep up with understanding and meeting customers’ expressed needs. In a proactive market orientation a company such as Motorola might prefer to make a practice of researching and imagining latent needs through a “probe-and-learn” process. Students’ answers may vary but the basic concepts of reaction and proactivity should be clear in answers.

Page: 19 Difficulty: Medium AACSB: Analytic Skills



144. The ultimate outcome of relationship marketing is the building of a unique company asset called a marketing network. What would be the parts of a marketing network for a motorcycle company such as Harley-Davidson?



Suggested Answer: A marketing network consists of the company and its supporting stakeholders. These stakeholders (in Harley-Davidson’s case) might be customers, employees, suppliers, distributors, retailers, repair services, ad agencies, lobby groups, and motorcycle support clubs. The operating principle is simple: Build an effective network of relationships with key stakeholders, and profits will follow.

Page: 22 Difficulty: Medium AACSB: Analytic Skills



145. Linda Evans has been given the task of developing the product portion of her company’s marketing mix. List the components that will likely be included in this element of the marketing mix.



Suggested Answer: Product variety, quality, design, features, brand names, packaging, sizes, services, warranties, and returns are the key elements of the product portion of the marketing mix. To see a more complete diagram of the four Ps process, see Figure 1.5.

Page: 23 Difficulty: Medium AACSB: Analytic Skills



146. Discuss how companies can use the Internet to build their brands. Give an example of a company that has done so.



Suggested Answer: Online marketing activities can be used to build brands by increasing consumer exposure to the brand and creating an interactive experience between the customer and the brand, giving consumers access not only to company-created information but also consumer-generated content. For example, Carnival Connections, an online cruise-booking site, made it easy for cruise fans to compare notes on cruise destinations and onboard entertainment.

Pages: 23–24 Difficulty: Medium AACSB: Reflective Thinking



147. Define internal marketing and its role in the company. Outline how various departments within the company outside marketing can demonstrate a customer focus.



Suggested Answer: Internal marketing must take place on two levels. At one level, the various marketing functions must work together. At the second level, other departments must embrace marketing and “think customer.” Students may use Table 1.1 to furnish various examples of customer-centric focus outside the marketing department.

Pages: 24–25 Difficulty: Hard AACSB: Reflective Thinking



148. According to information provided in the chapter, McDonald’s has been involved in a variety of corporate social initiatives. Give an example of how McDonald’s might initiate cause-related marketing, and define what cause-related marketing is.



Suggested Answer: Cause-related marketing is donating a percentage of revenues to a specific cause based on revenue occurring during the announced period of support. The example used in the chapter noted McDonald’s earmarking of $1 for Ronald McDonald Children’s Charities from the sale of every Big Mac and pizza sold on McHappy Day. Students may create additional examples but each should meet the parameters set above.

Page: 27 Difficulty: Medium AACSB: Analytic Skills



149. You have been given the assignment of justifying cause-related marketing to your board of directors. What would be your primary argument in favor of such a proposal?



Suggested Answer: Companies see cause-related marketing as an opportunity to enhance their corporate reputation, raise brand awareness, increase customer loyalty, build sales, and increase press coverage. They believe customers will increasingly look for signs of good corporate citizenship that go beyond supplying rational and emotional benefits.

Page: 27 Difficulty: Hard AACSB: Ethical Reasoning



150. Your firm is in the process of moving from focusing on a financial scorecard as the basis for running and evaluating your organization to a marketing scorecard approach. What is a marketing scorecard approach and what might be some of its components?



Suggested Answer: Top management is going beyond sales revenue alone to examine the marketing scorecard. Today, the shift to the marketing scorecard attempts to interpret what is happening to market share, customer loss rate, customer satisfaction, product quality, and other measures. Managers know changes in marketing indicators predict changes in financial results.

Pages: 26–27 Difficulty: Hard AACSB: Reflective Thinking