1. One reason why it is important for a business to coordinate the distribution and promotion of a new product is to make sure that the product is

1
1. One reason why it is important for a business
to coordinate the distribution and promotion of a
new product is to make sure that the product
is A. attractive to all customers. B. designed
to appeal to a target market. C. competitively
priced. D. available when customers want it.
2

• 1. DAvailable when customers want it. Businesses
  usually coordinate distribution with other
  marketing functions, such as promotion. One
  reason why it is important to coordinate the
  distribution and promotion of a new product is to
  make sure that the product is available when
  customers want it. If businesses promote products
  but those products are not available when
  promised, customers may decide to buy from
  competitors. Most products do not appeal to all
  customers. Businesses do not coordinate the
  distribution and promotion of a new product in
  order to make sure that it is designed to appeal
  to a target market or is competitively priced.

3
2.How can a product's unique aspects be used to
determine in what channels it will be sold? A.
Customers refuse to buy a product if its unique
aspects are sold through unexpected channels. B.
A product's unique aspects specify in what
channels the product must be sold. C. Customers
associate a product's unique aspects with
distribution to a few or to many locations. D.
Specific distribution channels can only be used
for specific unique aspects of a product.
4

• 2. CCustomers associate a product's unique
  aspects with distribution to a few or to many
  locations. When products have expensive or unique
  components, customers expect the products to be
  sold in a few locations due to their expense to
  develop. Customers would be surprised to see
  costly products being mass distributed to many
  businesses. Although a product's unique aspects
  might suggest certain distribution channels,
  businesses are free to determine where their
  products will be offered. It's unlikely that
  customers would refuse to buy a product if its
  unique aspects were promoted and sold in
  unexpected channels.

5
3. One reason a channel of distribution that has
strong leadership is often able to avoid conflict
within the channel is because the leader has
the A. capacity to regulate change. B.
personality to develop friendships. C. ability
to provide training. D. authority to demand
cooperation.
6

• 3. DAuthority to demand cooperation. Strong
  leaders have the authority and power to influence
  others and direct the actions of others. A
  channel of distribution that has strong
  leadership is often able to avoid conflict within
  the channel because the leader has the authority
  to set goals for the entire channel and demand
  cooperation, which reduces the possibility of
  conflict. The leader's authority makes it
  possible for the leader to assign specific
  responsibilities to each channel member and
  persuade members to accomplish their individual
  tasks. When each member is cooperating and
  working for the good of the channel, there is
  less chance of conflict. It is not necessary for
  the leader to develop friendships. Channel
  leaders usually do not provide training. It is
  not possible to regulate change, although an
  effective leader will help channel members adjust
  to change.

7
4.To maintain positive relationships, all
distribution channel members must A. limit
ongoing communication. B. coordinate their
efforts. C. develop competing goals D. have
equal power.
8

• 4. BCoordinate their efforts. Distribution
  channel members are the businesses or individuals
  who assist in moving goods and services from the
  producer to the consumer. So consumers get the
  products they want when they need them, the
  channel members must work together, or coordinate
  their efforts to efficiently transfer goods and
  services. This involves fostering positive
  relationships, which requires open, ongoing
  communication to accomplish the common goal of
  satisfying the customer. In most situations, the
  distribution chain has a channel leader (e.g.,
  producer) that possesses more power or leverage
  than the other channel members.

9
5. Which of the following is a true statement
about channel-member relationships in the supply
chain A. Members can often reduce conflict by
focusing on the common goal of customer
satisfaction. B. Because the producers are the
channel leaders, they usually have more
negotiating power. C. Technological
advancements have made interaction among channel
members unnecessary. D. To minimize horizontal
conflict, most wholesalers in the supply chain
charge slotting fees.
10

• 5. AMembers can often reduce conflict by
  focusing on the common goal of customer
  satisfaction. Channel members are all of the
  businesses or individuals that move goods and
  services from the producer to the end user. The
  channel members depend on each other to make sure
  the end users receive the products when they need
  them and where they need them. Therefore, it is
  important for all channel members to remember
  that their common goal is customer satisfaction,
  especially when one or more of them disagree
  about a course of action that another channel
  member wants to take. Producers are not always
  channel leaders, nor do they necessarily have
  more negotiating power. Because the channel
  members are interdependent, interaction among the
  members is necessary. Slotting fees may cause a
  channel conflict rather than reduce it.

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6. What is an important aspect of a
customer-centric business? A. Reducing the number
of touch points with customers B. Limiting the
employees' decision making C. Being satisfied
with the status quo D. Aligning business
activities with customer needs
12

• 6. DAligning business activities with customer
  needs. A customer-centric business focuses on
  customer needs and wants. To focus on the
  customers' needs and wants, the business must
  ensure that its business objectives and
  activities align with its customers' needs and
  wants. A customer-centric business must
  continuously improve its processes and products
  to accommodate its customers' changing needs and
  wantsthe business cannot be satisfied with the
  status quo. A customer-centric business allows
  its employees to provide input and make decisions
  in relation to customer relationships. Touch
  points are all of the opportunities that
  businesses have to connect with customers and
  reinforce their brand value. A customer-centric
  business is not likely to reduce the number of
  customer touch points.

13
7. Many people make the mistake of thinking that
customer relationship management refers solely
to A. people. B. strategies. C. processes. D.
technology.
14

• 7. DTechnology. Many people make the mistake
  of thinking that customer relationship management
  refers solely to technology. It involves
  technology, but it also involves strategies,
  processes, and most importantly, people. It
  combines these elements for the purpose of
  building, maintaining, and maximizing the
  long-term value of customer relationships.

15
8. Which of the following is a benefit of
customer relationship management A. The ability
to double the business's profits B. A work force
that does not commit errors C. A decrease in
customer advocacy D. The opportunity to create
targeted marketing campaigns
16

• 8. DThe opportunity to create targeted
  marketing campaigns. The opportunity to create
  targeted marketing campaigns is one benefit of
  customer relationship management. The more you
  know about your customers and their changing
  needs and wants, the more you know what kinds of
  marketing communications they will respond to.
  CRM does not provide an error-free work force. It
  should result in an increase in customer
  advocacy. It should help the business increase
  its profits, but it will not necessarily double
  them.

17
9. One action that an ethical business can take
to help build the long-term trust and loyalty of
its customers is to A. sell its customer list to
third parties without permission. B. maintain
detailed information about customers'
transactions. C. implement a comprehensive
customer privacy policy. D. send daily opt-in
e-mail messages to customers.
18

• 9. CImplement a comprehensive customer privacy
  policy. To build long-term relationships with its
  customers, a business must take steps to earn its
  customers' trust. Developing, implementing,
  communicating, and adhering to a customer privacy
  policy is one way to build the customers' trust.
  Privacy policies might include limiting the
  access that employees have to customer
  information and not selling customer lists to
  third parties. By respecting their customers'
  privacy, businesses can earn and maintain their
  customers' trust. Laws require businesses to
  maintain certain information about their
  customers' transactions for specified timeframes.
  Sending opt-in e-mail messages to customers is
  helpful in maintaining relationships with
  customers however, sending them too frequently,
  such as every day, may be annoying to some
  customers.

19
10. Which of the following situations is an
unethical action associated with customer
relationship management A. Allowing customers
the ability to opt-out of the e-mail updates that
the business provides B. Implementing a
frequent-buyers program for the business's
customers C. Collecting customer information
with authorization to develop a customer profile
D. Selling customer lists without the customers'
consent to third parties
20

• 10. DSelling customer lists without the
  customers' consent to third parties. It is
  unethical for a business to sell its customers'
  information to third parties without the
  customers' permission because it is a breach of
  privacy. When privacy is breached, trust is
  broken, and customers may defect to the
  business's competitors. Implementing a
  frequent-buyers program, collecting information
  with authorization, and allowing customers to
  opt-out of e-mail updates are ethical actions.

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11. Which of the following types of customer
relationship management software would be most
appropriate for a company that is looking for a
more efficient way to track leads, prospects, and
customers A. Sales force automation technology
B. Campaign management software C.
Personalization technology D. Matching engine
technology
22

• 11. ASales force automation technology. Many
  companies use sales force automation (SFA)
  technology to support, coordinate, and increase
  the productivity of their sales professionals.
  SFA technology, which is a type of customer
  relationship management software, can help to
  automate many aspects of the sales process, such
  as tracking leads, prospects, and customers.
  Other SFA technology features include contact
  management, sales forecasting, and sales report
  generation. Campaign management software is used
  by marketers to develop, execute, and track the
  effectiveness of promotional campaigns to
  targeted groups of potential or established
  customers. Businesses often use personalization
  technology to target certain products to certain
  customers based on the customers' purchase
  history. Matching engine technology works in a
  similar manner. Based on a particular customer's
  needs or preferences, matching engine technology
  determines the product offering that would best
  appeal to that customer.

23
12. An important aspect of using technology in
customer relationship management involves A.
allowing employees to have complete access to
customer information. B. posting customer
information on the business's web site. C.
updating customer information in the computer
database. D. providing customers with excessive
product information.
24

• 12. CUpdating customer information in the
  computer database. Customer relationship
  management (CRM) is the combination of
  strategies, processes, and policies that a
  business uses to meet or exceed customer
  expectations and to provide customers with
  outstanding experiences at every touch point. An
  important aspect of CRM is ensuring that customer
  data are current. For example, if the customer
  notifies the business about a change of address
  and the business does not update its computer
  database to reflect the change, the business's
  promotional mailings and invoices will not reach
  the customer in a timely manner, if at all. In
  another situation, a business might have multiple
  database records for one customer. If the
  business sends multiple (excessive) copies of
  promotional materials (e.g., product catalog) to
  the customer based on the data in the database,
  the customer may become annoyed. Sending multiple
  copies of a single mailing to one customer is
  also a waste of the business's money. To maintain
  the customer's privacy, the business should not
  post customer information on its web site, nor
  should it allow its employees to have complete
  access to a customer's confidential information.

25
13. Which of the following is a characteristic of
taxes A. Restricted to businesses B. Levied by
governments C. Encouraged by consumers D.
Applied only to tangibles
26

• 13. BLevied by governments. Taxes are levied by
  various levels of government for different
  reasons. One reason is to generate revenue to
  fund programs. All levels of government, from
  small cities to the national level, need money to
  operate. They obtain this money by levying taxes
  on individuals and businesses. Taxes are not
  restricted to businesses or applied only to
  tangibles. Although consumers pay taxes, they
  usually do not encourage additional taxes.

27
14. The government decides to pass a new law
requiring certain standards of air cleanliness be
met. They will levy a tax on production of
automobiles that produce gas emissions above a
certain limit. However, they provide tax
incentives to automobile manufacturers for
research and development of new cars with lower
gas emissions. This is an example of A. direct
controls. B. transfer payments. C. hidden
costs. D. rent seeking.
28

• 14. ADirect controls. The government is
  directly interfering with the normal operations
  of a free market. An example of a transfer
  payment is unemployment compensation paid to a
  factory worker who has been laid off. An example
  of hidden costs would be any unaccounted for
  effect that the new emissions-standards-friendly
  production might have on the environment. Rent
  seeking is when someone or some group seeks
  benefit to themselves or their group at the
  expense of someone else. An example of this would
  be a lobbyist pushing through a bill that only
  benefits its constituency at the expense of
  another

29
15. During economic fluctuations, taxes serve the
purpose of ___________ the economy. A. destroying
B. reducing C. expanding D. stabilizing
30

• 15. DStabilizing. Taxes stabilize the economy
  because in times of need they can provide greater
  social services but be reduced in times of
  economic growth. Taxes do not reduce or destroy
  the overall size of the economy, though taxes can
  reduce individuals' disposable incomes. Taxes
  also do not expand the economy because they do
  not create new money or wealth, they redistribute
  it.

31
16. What should an employee do if a coworker is
spreading malicious gossip about another
worker? A. Refuse to pass on the information B.
Deny hearing the rumor C. Ask for supporting
evidence D. Check out the accuracy of the message
32

• 16. ARefuse to pass on the information. Gossip
  that may hurt a person or damage that person's
  reputation or character is malicious. Employees
  who spread malicious gossip about coworkers are
  behaving unethically. If an employee hears
  malicious gossip about a coworker, that employee
  should refuse to pass on the information.
  Employees who try to stop the spread of malicious
  gossip are behaving ethically because most gossip
  is inaccurate. If employees hear malicious gossip
  about a coworker, they should not deny hearing
  the rumor, ask for supporting evidence, or check
  out the accuracy of the message.

33
17. Which of the following is confidential
information that would be unethical for an
employee to provide to others without permission
from the business A. Dates of an upcoming
special sale B. Posting of available
positions C. Well-publicized expansion plans D.
List of employees who will be promoted
34

• 17. DList of employees who will be promoted.
  Certain information is considered confidential,
  and businesses expect employees who have access
  to that information to keep it private. For
  example, information about employee promotions is
  confidential and should not be divulged until the
  business is ready to make the announcement. If an
  employee has access to this information or learns
  this information ahead of time, it would be
  unethical to tell others. Available positions,
  dates of an upcoming sale, and well-publicized
  expansion plans are not examples of confidential
  information.

35
18. Which of the following is an example of
people using persuasion in business A.
Requesting product specifications from a vendor
or manufacturer B. Delivering or distributing
goods to a customer on a timely basis C.
Distributing a report to company officers that
recommends policy changes D. Presenting the
company's annual financial statement to the board
of directors
36

• 18. CDistributing a report to company officers
  that recommends policy changes. Persuasion is the
  effort of an individual or group of individuals
  to influence the attitudes or behavior of another
  individual or group of individuals.
  Recommendations for altering established policies
  is an example of trying to initiate change.
  Requesting product specifications, distributing
  goods on a timely basis, and presenting a
  financial statement are not examples of
  persuasion because a change in attitude or
  behavior is not the primary goal.

37
19. When you use persuasion, you often try to get
people to A. agree on a plan of action. B.
express their opinions. C. ignore the rights of
others. D. understand their behavior.
38

• 19. AAgree on a plan of action. Persuasion is
  the ability to get people to see things your way,
  to do things your way, and to agree with you.
  When you use persuasion, you often try to get
  people to agree on a plan of action. An example
  is convincing your group of friends to attend the
  school play. Persuasion also involves influencing
  people to change their opinions or behavior
  rather than express their opinions or understand
  their behavior. When people are aggressive, they
  often ignore the rights of others.

39
20. Which of the following is an example of
effective negotiations A. Department heads and
staff share company goals. B. Business owners
offer workers a pay raise. C. Customer agrees to
a higher price. D. Supervisors discourage
questions regarding a policy change.
40

• 20. CCustomer agrees to a higher price.
  Effective negotiations reach agreements that are
  satisfactory to both parties. In this example,
  seller and buyer were able to negotiate a higher
  price that was agreeable to both. Each of the
  other examples represents unilateral actions or
  release of information. Discouraging questions
  would lead to ineffective negotiations.

41
21. Which of the following is a common
negotiating strategy A. Using authority B.
Speaking C. Bargaining D. Being aggressive
42

• 21. CBargaining. Bargaining often is an
  effective negotiating strategy. When bargaining,
  each person proposes solutions and uses
  "give-and-take" tactics to reach an agreement.
  Each person may have to give up something in the
  process, but each person gets something in
  return. Silence rather than speaking is also a
  common negotiating strategy. Another strategy
  involves claiming not to have authority rather
  than using authority. Being aggressive is not a
  negotiating strategy.

43
22. What type of negotiating style often involves
a "no-compromise" attitude? A. Accommodating
B. Collaborative C. Competitive D. Combative
44

• 22. DCombative. Those who use the combative
  style of negotiating are ready to fight for what
  they want at any cost. It often involves a
  "no-compromise" attitude. This style is useful in
  short-term situations, particularly if you won't
  see the other person again. However, it usually
  does not build long-term relationships. The
  collaborative style involves people working
  together to create an outcome that benefits both
  parties. The competitive style is similar to a
  rivalry in which one party wins and one party
  loses. The accommodating style often involves
  people agreeing to something they don't really
  want.

45
23. A manager is most likely to use financial
information when A. determining resources
available to fund a new project. B. researching
the demographics of a new target market. C.
calculating the number of on-the-job injuries in
the past year. D. establishing lines of
authority within an organization.
46

• 23. ADetermining resources available to fund a
  new project. Managers use financial information
  on many occasions, including when planning
  strategies, executing strategies, and evaluating
  the execution of strategies. For example, a
  manager would use financial information to
  determine what financial resources are available
  to fund a new project that s/he is planning. To
  research the demographics of a new target market,
  information gathered through market research
  would be more useful. Financial information is
  not used to calculate the number of on-the-job
  injuries or to establish lines of authority
  within an organization.

47
24. The price of raw materials used in
manufacturing a product was double what had been
projected for the year. Which of the following
could the business determine by analyzing its
financial information A. Supply and demand B.
Equipment costs C. Variances D. Errors in
forecasting
48

• 24. CVariances. Businesses analyze their
  financial information to determine the
  differences between what they had forecast and
  what actually happened. By doing this, they can
  account for those differences and improve future
  forecasts. In this scenario, equipment costs were
  not a factor. The business could not determine
  from its financial information whether the supply
  of raw materials decreased or demand increased.
  Forecasts are estimates based on information
  known at the time the forecast was made and will
  not be exactly what actually happens. In this
  scenario, therefore, the variances would not be
  considered forecasting errors.

49
25. Which of the following is a way that
businesses can use financial information A. To
identify trends B. To select selling
strategies C. To conduct focus groups D. To
create an economic system
50

• 25. ATo identify trends. Through
  financial-information analysis, businesses can
  recognize what products are selling well and in
  what colors, styles, models, and sizes. Over
  time, this helps businesses spot trends in
  customer buying habits so that the businesses
  provide more of the products customers are buying
  and less of those that are not selling well.
  Selling strategies are largely determined by the
  nature of the product being sold rather than by
  financial information. Focus groups are used to
  collect customer reactions to and opinions about
  product features or company image. Businesses
  function in economic systems rather than creating
  them.

51
26. Why does a company need a flow of money into
the business? A. To borrow B. To exist C. To
sell D. To invest
52

• 26. BTo exist. Money must flow into a business
  before it can ever exist. Entrepreneurs usually
  borrow money from a bank or obtain financing from
  investors in order to go into business. This
  initial flow of money is used to purchase the
  goods and services needed to start the business.
  Businesses receive money from the sale of goods
  and services. Entrepreneurs often obtain start-up
  money by borrowing it from investors.

53
27. Established businesses receive their primary
flow of money from A. loans. B. credit. C.
fees. D. sales.
54

• 27. DSales. Sales are the primary way in which
  money flows into an established business.
  Businesses receive money by selling goods and
  services either to other businesses or to the
  final customer. Some businesses sell on credit,
  which means that the customer will pay for the
  goods or services over a period of time, usually
  with interest. Businesses spend money to pay fees
  and loans.

55
28. What is often one of the largest sources of
money flowing out of a business? A. Payroll and
benefits B. Accounts receivable C. Profit and
loss D. Goods and services
56

• 28. APayroll and benefits. Payroll and benefits
  are often one of the largest sources of money
  flowing out of a business because businesses must
  pay employees for their labor. Many businesses
  also pay for employee benefits, such as health
  insurance, paid vacation, sick leave, tuition
  reimbursements, and retirement savings.
  Businesses bring money in by selling goods and
  services. Accounts receivable are all the monies
  owed to a firm by its customers. Profit and loss
  indicates if the business is making sufficient
  money to cover its expenses.

57
29. Which of the following is an example of
current liabilities that a business should
include in its balance sheet A. Owner's equity
B. Accounts receivable C. Employees'
salaries D. Mortgage loans
58

• 29. CEmployees' salaries. Liabilities are debts
  that a business owes. Liabilities are classified
  as current, which means that the debts will be
  paid off during the year, or long-term, which
  means that they will be paid off over a period of
  time. Employees' salaries are current liabilities
  because the business is expected to pay its
  employees for their work on a regular basis
  throughout the year. Mortgage loans are long-term
  liabilities because businesses usually make
  mortgage payments for several years. Accounts
  receivable are assets because they are all the
  monies owed to the business by its customers.
  Owner's equity is the amount an owner has
  invested in the business plus or minus profits
  and losses.

59
30. Which of the following are the categories
that businesses use to summarize information on
their balance sheets A. Cash, budget, and credit
B. Equity, budget, and cash C. Liabilities,
equipment, and sales D. Assets, liabilities, and
equity
60

• 30. DAssets, liabilities, and equity. A balance
  sheet is a financial statement that captures the
  financial condition of the business at that
  particular moment. The business summarizes its
  financial condition by categorizing data into
  three groupsassets, liabilities, and equity. An
  asset is anything that the business owns or that
  can be converted into cash. Assets include cash,
  equipment, and sales income. Liabilities are the
  business's debts. As a liability, a credit
  balance is money that a business owes to its
  suppliers or lenders. Equity is the net worth of
  the business after subtracting all liabilities
  from all assets. A budget is an estimate of
  income and expenses for a certain period of time.
  A budget is not a category of information that is
  listed on a balance sheet.

61
31. The reason why a business prepares a balance
sheet is to determine its A. estimated annual
income. B. average cash flow. C. current
financial situation. D. future sales goal.
62

• 31. CCurrent financial situation. A balance
  sheet is a financial statement that captures the
  financial condition of the business at that
  particular moment. It indicates what the business
  owns, what it owes, and its worth as of a certain
  date. By preparing a balance sheet, a business
  can determine if it has sufficient assets to
  cover its liabilities and still have money
  remaining, or if its liabilities are more than
  its assets. A business does not prepare a balance
  sheet to determine its average cash flow,
  estimated annual income, or future sales goal.

63
32. What category of an income statement
indicates total profit? A. Gross profit B.
Bottom line C. Cash flow D. Net profit
64

• 32. AGross profit. Gross profit is determined
  by subtracting the cost of goods sold/cost of
  sales from revenue. It is the total amount of
  money a business makes as a profit before all
  other remaining expenses have been deducted.
  Determining the gross profit helps businesses to
  see how much money they invested in making or
  obtaining their products versus how much it costs
  to operate the business. The bottom line is net
  profit, which is the money remaining after
  operating expenses are subtracted from gross
  profit. Cash flow is the movement of money into
  and out of a business.

65
33. By comparing the categories in an income
statement, a business will be able to determine
if it is A. earning too much income. B. paying
too little for supplies. C. spending too much
on expenses. D. acquiring goods for too low a
price.
66

• 33. CSpending too much on expenses. By
  themselves, the elements of an income statement
  are simply categories and totals. A business
  needs to be able to see how the categories are
  affecting each other and the bottom line. By
  comparing categories, a business will be able to
  determine if it is spending too much on expenses
  and not earning sufficient profit. Most
  businesses try to spend as little as possible
  when purchasing supplies or acquiring goods.
  Businesses try to earn as much income as possible.

67
34. One reason why a business compares its income
statement figures with those of competitors is to
find out how it is doing in relation to A.
industry standards. B. research projections.
C. economic forecasts. D. marketing
procedures.
68

• 34. AIndustry standards. Even when a business
  is earning a profit, it will still want to know
  how it is doing by industry standards. A
  competitive analysis of income statement figures
  helps a business to see its strengths and
  weaknesses in relation to those of the
  competition. Businesses usually do not share
  their marketing procedures with competitors.
  Economic forecasts and research projections
  indicate how businesses might do in the future.

69
35. Businesses use budgets to estimate how they
will A. spend their money. B. file their taxes.
C. calculate their assets D. depreciate their
assets.
70

• 35. ASpend their money. A budget estimates how a
  business will earn and spend its money.
  Businesses use budgets to estimate how they will
  spend the money they earn as income. Businesses
  have expenses, and budgets help businesses plan
  how to allocate income in order to pay those
  expenses. Businesses do not use budgets to
  calculate their assets, file their taxes, or
  depreciate their assets.

71
36. By regularly reviewing their budgets,
businesses are able to determine if they are A.
offering loans to employees. B. paying interest
to customers. C. following their financial
plans. D. receiving discounts from vendors.
72

• 36. CFollowing their financial plans. By
  regularly reviewing their budgets, businesses are
  able to determine if they are following their
  financial plans. With a budget, businesses are
  able to see at a glance where things are off
  course, and then make whatever adjustments are
  needed to get back on track. Businesses usually
  do not pay interest to customers or offer loans
  to employees. Budgets do not indicate if
  businesses receive specific discounts from
  vendors, although the total amount paid to
  vendors would be estimated in a budget.

73
37. Why do businesses use budgets to estimate
income? A. To increase losses B. To increase
shrinkage C. To plan purchases D. To develop
services
74

• 37. CTo plan purchases. Budgets guide financial
  decisions, such as what to buy and how much to
  pay. Businesses use budgets to estimate income to
  know how much money will be available to spend on
  purchases. By knowing when income is expected,
  businesses can plan to make purchases during a
  specific time period. Businesses do not use
  budgets to estimate income in order to increase
  losses, increase shrinkage, or develop services.

75
38. When marketing researchers code the various
responses on a questionnaire, they are __________
to each answer. A. computing a total score B.
tabulating the response C. rating the
agreement D. assigning a numeric value
76

• 38. DAssigning a numeric value. Coding is the
  process of assigning a numeric value to the
  various responses on a marketing questionnaire or
  survey. Some questionnaires contain built-in
  codes such as when the respondent is asked to
  rate agreement with a question on a scale of one
  to five. The numbers from one to five are the
  numeric codes. For other types of questionnaires,
  researchers often establish a master code. For
  example, there are six possible responses to a
  certain question and the third answer has a
  numeric value of three, but that number is not
  printed on the questionnaire. Once the responses
  are coded and individuals complete the
  questionnaire, researchers are able to tabulate
  the responses, rate the agreement to each answer,
  and compute a total score.

77
39. Which of the following is often part of the
process of reviewing and analyzing marketing data
to make them useful A. Ranking the questions
B. Designing the surveys C. Checking for
mistakes D. Searching for sources
78

• 39. CChecking for mistakes. The data collection
  process is not error free. Consequently,
  researchers usually review the marketing data
  obtained from interviews, surveys, and
  questionnaires in order to check for mistakes.
  For example, answers may have been incorrectly
  recorded or the wrong people may have been
  interviewed. These mistakes affect the accuracy
  of the marketing data as well as the usefulness
  of the data. As a result, researchers try to
  eliminate as many mistakes as possible in order
  to have accurate information that will be useful
  in making marketing decisions. Before marketing
  information is obtained, researchers design the
  surveys, rank the questions, and search for
  sources.

79
40. Which of the following is an example of a
business tabulating the results of a marketing
survey A. Analyzing the information to make it
useful to the business B. Counting the number of
respondents who agreed with the questions C.
Assigning a numeric value to the various
responses on the survey D. Comparing the results
with results from other types of research
80

• 40. BCounting the number of respondents who
  agreed with the questions. In many cases,
  processing marketing information involves
  tabulating the results. Tabulating is counting
  the number of respondents who answered each
  question with one of the possible answers. For
  example, if 100 people responded to a survey,
  businesses need to know how many of them agreed,
  disagreed, or had no opinion about the questions.
  Also, tabulating helps businesses to determine if
  some people did not answer all the questions,
  which might have an effect on the accuracy of the
  results. Tabulating does not involve analyzing
  the information to make it useful, or comparing
  the results with results from other types of
  research. Coding is assigning a numeric value to
  the various responses on the survey.

81
41. Which of the following is an example of
range A. Most consumers buy four CDs per
month. B. Consumers buy an average of five CDs
per month. C. Consumers buy between three and
seven CDs per month. D. Half of all consumers buy
more than five CDs per month.
82

• 41. CConsumers buy between three and seven CDs
  per month. Range is the distance between the
  smallest and largest value in a set of responses.
  In the example, three was the smallest number of
  CDs purchased and seven was the largest number.
  The distance between three and seven is the
  range. Range is often used to describe the
  relation between numbers, such as the variation
  between the number of CDs purchased. Mean is the
  average, such as consumers buying an average of
  five CDs per month. Mode is the most common
  response, such as most consumers buy four CDs per
  month. Median is the exact middle, such as half
  of all consumers buying more than five CDs per
  month.

83
42. What are the primary advantages of using
descriptive statistics? A. The data are not
described in numerical form and can be
transferred easily. B. You can reach conclusions
that extend beyond what the data shows. C. You
are able to make charts easily and create unbound
reports faster. D. It allows you to summarize
data and make comparisons across units.
84

• 42. DIt allows you to summarize data and make
  comparisons across units. Descriptive statistics
  are summaries of data that make large amounts of
  information more manageable. Reaching conclusions
  involves making inferences rather than using
  descriptive statistics. Descriptive statistics
  can be described in numerical form. The use of
  descriptive statistics does not necessarily
  enable you to make charts easily.

85
43. Which of the following statements is an
example of a measure of central tendency A.
Twelve members of the community swim team are
fifteen years old. B. The average U.S. male buys
frozen pizza four times every thirty days. C.
Morrow County gasoline taxes have increased 15
percent in six months. D. The distance between
point A and point B is 55 kilometers.
86

• 43. BThe average U.S. male buys frozen pizza
  four times every thirty days. A measure of
  central tendency is a term used in marketing
  research that indicates the center of
  distribution. The number represents a value
  derived by a sample taken that falls between the
  lowest and highest value rating, which can be
  measured as mode, mean, or median. A mean is an
  average. The mean is determined by adding the sum
  of the data values and dividing by the number of
  values in the set (e.g., sample size). Specific
  distances between two points, members of a swim
  team, and increases in gasoline taxes state exact
  values and do not necessarily represent or state
  data in terms of averages.

87
44. Customers are more likely to spend a lot of
time evaluating several options before buying a
product when A. the product is perishable.
C. the need is immediate. B. the product is
expensive. D. brand insistence is a factor.
88

• 44. BThe product is expensive. Because money is
  a limited resource, customers tend to spend more
  time comparing and evaluating the features and
  benefits of expensive items before making a
  decision to buy. Individuals tend to spend more
  time evaluating options when buying homes, cars,
  and computers. Businesses tend to spend more time
  evaluating items such as operating equipment and
  contract services (e.g., ad agencies and tech
  support) before making a decision. Customers are
  less likely to spend a lot of time evaluating
  perishable items (e.g., food) or things that they
  need immediately (emergency health care). If a
  customer has a high level of loyalty to a
  specific brand, then the customer will spend less
  time evaluating competitors' products before
  making a decision to buy.

89
45. When customers have low involvement with a
product, and there is little difference among
brands, what type of buying behavior are they
exhibiting? A. Habitual C. Complex B. Variety
D. Basic
90

• 45. AHabitual. Customers exhibit habitual or
  routine buying behavior when buying staple items
  such as sugar, orange juice, and toothpaste.
  These types of items are inexpensive, require
  little involvement or thought, and in most
  situations, there are few differences among
  brands. Complex buying behavior involves high
  customer involvement because the items are
  expensive and purchased infrequently.
  Characteristics of variety-seeking buyers are low
  involvement, but a higher recognition of brand
  differences. Many variety-seekers switch brands
  often. Basic is not a type of buying behavior.

91
46. Complex buying behavior is most likely
involved when the customer is purchasing A. a
car. C. socks. B. a meal. D. gasoline.
92

• AA car. Product type affects a customer's
  buying behavior. Customers who exhibit complex
  buying behavior are highly involved in the
  purchase because the product tends to be more
  expensive and risky. When the purchase is a form
  of self-expression, it affects the customer's
  status or image, and brand is an important
  factor. Because cars are expensive and vary in
  dependability and style, customers tend to spend
  more time evaluating their options before buying.
  Meals, shoes, and movie tickets are routine
  purchases, so customers tend to exhibit habitual
  buying behavior rather than complex buying
  behavior when purchasing these items.

93
47. If a business lowers the price of a product
for the purpose of taking business away from
competitors, the result of this action often is
a(n) A. decrease in cost. C. C. gain in market
share. B. increase in profit. D. D. reduction
in staff.
94

• CGain in market share. Businesses take action
  for the purpose of achieving certain results. One
  of the results that a business might want to
  achieve is a gain in market share, which is a
  business's portion of the total industry sales in
  a specific market. An action that a business
  might take to obtain this result is to lower the
  price of a product for the purpose of taking
  business away from competitors. If the price is
  lower, the business has an opportunity to gain
  market share. If the price is significantly
  lower, the business might lose money in the
  short-term, while increasing market share.
  Lowering the price of a product will not result
  in a decrease in cost or a reduction in staff.

95
48.. Morgan Health Supply Company wants to expand
its product line this year. It uses its budget
surplus to invest in new products rather than to
remodel its offices. This is an example of which
positive action companies should take A. Provide
excellent customer service. B. Align strategies
and activities with goals. C. Demonstrate
corporate responsibility. D. Utilize touch
points to reinforce company image.
96

• BAlign strategies and activities with goals. By
  investing its budget surplus into new products
  rather than office remodeling, Morgan Health
  Supply Company is aligning its strategies and
  activities with its goal of expanding its product
  line. The new product line won't necessarily
  guarantee excellent customer service, demonstrate
  corporate responsibility, or utilize touch points
  to reinforce company image.

97
49. Technological advances can help companies
provide more customer service with fewer
employees, but why must the companies be
careful? A. Technology cannot provide 24-7
service. B. Computers and telephones break down
regularly. C. Current employees may go on
strike. D. Customers may feel they are losing
their human touch.
98

• DCustomers may feel they are losing their human
  touch. Technological advances can help companies
  provide more customer service with fewer
  employees, but companies must be careful because
  customers may feel they are losing their human
  touch if they can only reach an automated
  telephone service or get online to receive help.
  Computers and telephones may break down, but not
  necessarily on a regular basis. Current employees
  may not be happy if their jobs are replaced with
  technology, but they will not necessarily go on
  strike. Technology can provide 24-7 service,
  which is one of its benefits.

99
50. The financial component of a marketing plan
helps a business to compare the projected costs
of implementing the plan with the
expected A. benefits. C. losses. B. expenses.
D. strategies.
100

• ABenefits. The financial component of a
  marketing plan includes information about how
  much it will cost a business to implement the
  plan. Businesses use this information to compare
  the projected costs with the expected benefits to
  make sure that the benefits exceed the costs. For
  example, a business would not want to spend more
  to implement a marketing plan than it would be
  able to generate in revenue. A business would not
  expect losses. The projected costs of a marketing
  plan include the expenses to perform the required
  activities and implement the strategies.

101
51. What type of information do businesses
include in their marketing plans? A. Billing
methods C. Payroll systems B. Pricing strategies
D. Accounting procedures
102

• BPricing strategies. A marketing plan is a set
  of procedures or strategies for attracting the
  target customer to a business. An important part
  of a marketing plan is the pricing strategies
  that a business will use to attract those
  customers. Businesses want their prices to be low
  enough to appeal to customers but high enough to
  cover costs and earn a profit. Businesses analyze
  a variety of information about expenses, prices
  charged by competitors, and customers' wants in
  order to decide how to price their products.
  Businesses do not include information about
  billing methods, payroll systems, or accounting
  procedures in their marketing plans.

103
52. One of the main reasons for developing a
marketing plan is to identify the strategies
necessary to achieve the marketing A. functions.
C. mix. B. objectives. D. share.
104

• BObjectives. Marketing objectives are the goals
  a business seeks to reach with its marketing
  plan, which is a set of strategies for attracting
  the target customer to the business. One of the
  main reasons for developing a marketing plan is
  to identify those strategies that are the plans
  of action for achieving marketing goals and
  objectives. Marketing functions are interrelated
  activities that must work together to get goods
  and services from producers to consumers.
  Marketing mix is the combination of the four
  elements of marketingproduct, place, promotion,
  and price. Market share is an organization's
  portion of the total industry sales in a specific
  market.

105
53. When conducting an external environmental
analysis, businesses often focus on A. previous
demand. C. marketing goals. B. industry
growth. D. financial costs.
106

• BIndustry growth. Many businesses focus on
  industry growth when conducting an external
  environmental analysis because the marketing
  strategies that a business develops often depend
  on how fast the industry is growing. If an
  industry is growing rapidly, a business needs to
  develop a marketing plan to attract and maintain
  customers and deal with increasing competition.
  If the industry is at the saturation level, a
  business can only grow if it develops a marketing
  plan to try to take customers away from
  competitors. A business conducts an environmental
  analysis to determine the current situation
  rather than to focus on previous demand.
  Conducting an environmental analysis helps a
  business to determine its marketing goals and the
  financial costs involved in meeting those goals.

107
54. An international soft-drink company that
wants to add bottled spring water to its product
mix has determined there are four major brands
that currently hold the majority of the market
share for that product. The strengths and
weaknesses of each potential competitor have been
examined. This is an example of a(n) A. action
plan. C. situation analysis. B. marketing
strategy. D. purpose and mission.
108

• CSituation analysis. Information regarding
  competitors, their products, and their strengths
  and weaknesses is collected as part of an
  external environment analysis. This type of
  analysis is one aspect of the overall situation
  analysis. Gathering such information is not an
  example of marketing strategy, action plans, or
  purpose and mission.

109
55. If you were trying to convince someone to use
quantitative sales forecasting, which of the
following factors would you stress A. Variety of
opinions C. Minimal cost B. Factual
basis D. Ease with which findings are understood
110

• BFactual basis. The primary advantage of
  quantitative sales forecasting methods as
  compared with qualitative forecasting methods is
  that they provide more exact data, because
  quantitative forecasting is based on facts rather
  than on opinion. The costs, however, are usually
  higher because the business will need to pay
  people to conduct surveys, to purchase the
  results of outside surveys, to subscribe to
  various publications, or to buy computer systems
  to assemble and analyze the data. Although a
  variety of resources can be used as sources of
  information, the data are based on facts rather
  than opinions. Individuals often experience more
  difficulty understanding numerical data than
  understanding others' opinions.

111
56. Which of the following is an example of an
internal change that could affect a business's
sales forecast A. A direct competitor is
planning a new promotional campaign. B. The birth
rate increased following the Iraqi war. C. A new
product line is to be offered by the
business. D. The economy is struggling with a
major drop in stock market prices.
112

• CA new product line is to be offered by the
  business. Internal changes are circumstances
  within the business. They include changes in
  personnel, promotion, pricing, product lines,
  distribution processes, and marketing strategies.
  The business has control over internal changes
  and can adapt its sales forecast accordingly.
  External changes occur outside the business, and
  businesses have no control over these changes.
  Competitors' actions, population changes, and
  economic changes are examples of external factors
  that can affect sales forecasts.

113
57.. A manufacturer expects product sales to
increase during the coming year. How does this
information affect product production? A. Producti
on should decrease. C. Production should remain
stable. B. Production should increase.
D. Production should not be affected.
114

• BProduction should increase. Businesses need to
  know the amount of products they can expect to
  sell in order to plan the most efficient
  production of those products. In this case,
  anticipated increases in sales should be matched
  by increased production in order to meet the
  shift in demand. By decreasing production or
  keeping it stable, the business would not have a
  sufficient supply of products available to meet
  the demand. This could result in ill will and
  lost sales for the company

115
58. Which of the following activities reflects
creativity A. Completing a sales check according
to company policy B. Replacing merchandise sold
from a window display C. Referring an irate
customer to the store manager D. Suggesting a
new use for an existing product
116

• DSuggesting a new use for an existing product.
  Creativity is the ability to generate unique
  ideas, approaches, and solutions. The other
  alternatives are routine responses or job
  responsibilities.

117
59. Which of the following personality traits is
often associated with creative people A. Acting
independently C. Preferring routine
activities B. Exhibiting low energy levels
D. Shunning recognition and praise
118

• AActing independently. Most creative people
  prefer working with minimal or no supervision.
  They also exhibit high energy levels, prefer new
  experiences and variety, and desire recognition
  and praise.

119
60. A member of a sales team said, "Our sales
always decline this time of year. We just need to
wait a few months until they pick up again." What
barrier to creativity is the sales-team member
exhibiting? A. Limiting code of behavior
C. Criticism B. Need to be right the first time
D. Stress
120

• ALimiting code of behavior. It is easy to fall
  into patterns of behavior that suffocate
  creativity. People convinced that their problems
  are unavoidable won't look for solutions. Stress
  is due to worry and fatigue. Creativity requires
  people to explore alternatives and take risks
  therefore, people who have to be right the first
  time can't take the chance of being wrong.

121
61. The essence of time management is to A. set
a fixed schedule and follow it. B. eliminate the
need to prioritize activities. C. focus on
spreading work over a period of time. D. control
events in order to accomplish priorities.
122

• 61. DControl events in order to accomplish
  priorities. All people need to learn how to
  manage their time. They need to maintain control
  over the events in their lives so that there is a
  balance among those events. This involves
  planning and organizing their personal and
  professional activities. Time management involves
  prioritizing activities, but it does not mean
  setting a fixed schedule and never deviating.
  Schedules should have some flexibility built in
  to take care of unexpected events. Time
  management focuses on making the best use of time
  rather than on spreading work over a period of
  time.

123
62. Rob wrote down the following information
1. Finish research paper Tuesday 2. Call
for dental appointment What time-management
approach did Rob use? A. Setting objectives
C. Using free time B. Delegating activities to
others D. Identifying time wasters
124

• ASetting objectives. By setting objectives, you
  define what you want to accomplish. Activities
  are delegated when you ask others to do some of
  the work. Free time is time left over after your
  tasks are completed or when a planned activity is
  canceled. Time wasters, which include
  procrastination and having an unorganized work
  area, should be identified and minimized.

125
63. An effective time-management approach for the
manager of a large staff of employees would be
to A. build flexibility into his/her schedule.
B. fill each day's work schedule
completely. C. block off six hours of
uninterrupted work time daily. D. delegate most
managerial responsibilities to an assistant.
126

• ABuild flexibility into his/her schedule. The
  manager's schedule should not be filled
  completely. The more people you work with, the
  more flexible you need to be. Blocking off six
  hours of uninterrupted work time would not be
  possible. Delegating some activities to others
  will free the manager to do other tasks, but not
  all activities could or should be delegated.

127
64. Which of the following is a technique that
many businesses use to identify product
opportunities A. Observing the competition
C. Evaluating a prototype B. Testing the market
D. Developing a brand
128

• AObserving the competition. Businesses often
  observe the products developed by competitors in
  order to identify possible product opportunities.
  For example, a business might observe that a
  competitor's new product is popular and selling
  well. As a result, the business develops a
  similar product that is somewhat more advanced.
  By paying attention to what competitors are
  doing, businesses often are able to identify
  product opportunities. Once the opportunity is
  identified, businesses often evaluate a prototype
  and test the market. One of the final steps
  before introducing a new product is developing a
  brand.

129
65. John is graduating from college and needs to
buy clothes suitable for the business world, but
he doesn't know where to start. He recognizes
that many of his friends also lack the knowledge
of what they should buy. He thinks they could
easily learn the ropes of creating business
wardrobes if there was someplace he could go on
the Internet. This product opportunity resulted
from A. recognizing what is "cool." B. changing
life circumstances. C. releasing new products.
D. purchasing a product and needing a related
item.
130

• BChanging life circumstances. John is leaving
  the educational world to go into the business
  world therefore, his life is changing. The other
  alternatives also create chances for product
  opportunities however, they do not relate to the
  scenario.

131
66. With the arrival of digital television, many
customers have purchased new digital televisions.
A marketer recognized that these customers would
want to do something with their old TVs. This is
an example of A. opportunity recognition. C. the
need to purchase related items. B. individual
development. D. the availability of new
information.
132

• AOpportunity recognition. When people recognize
  that their ideal state is changing, they may
  recognize product opportunities that would
  satisfy customers. With individual development, a
  person is growing or changing such that her/his
  ideal state no longer exists. In this scenario,
  customers do not need to purchase related items,
  and there is no new information identified.

133
67. Real market opportunity occurs when A. a good
or service can be produced efficiently.
B. entrepreneurs brainstorm ideas. C. supply
exceeds demand. D. an identified want exists.
134

• DAn identified want exists. Market opportunity
  exists when an economic want exists, and there is
  an idea for a good or service to fulfill that
  want for which people are willing and able to
  pay. Market opportunity does not necessarily
  exist because an entrepreneur brai