Marketing Management for IBA:
Midterm exam
1. Company A is a pharmaceutical company. It aims to get patents for its new drugs released in
the next 5 years. The objective of company A is best characterized as a..
A. Customer objective
B. Company objective
C. Competitive objective
D. Context objective
2. Optimal value proposition is defined as…
A. Maximum customer benefits at minimal customer costs
B. Maximum company benefits at minimal company costs
C. All of the above
D. None of the above
3. Which of the options below is NOT a benefit associated with corporate social responsibility
initiatives in fast moving consumer goods companies:
A. Psychological value created for consumers
B. Possibility of price premiums
C. Differentiation from competition
D. Increased managerial focus
4. The exclusivity principle of segmentation is violated if…
A. Identified segments only differ in terms of one segment feature
B. Some segments were not included in the segmentation
C. Some segments overlap in terms of which product attributes drive consumer decisions
D. Some segments do not create unique value for the company, while other segments do
5. Muhammad Yunus pioncered the idea of microfinance and microcredit. With microfinance,
small business owners in emerging markets, who normally lack access to traditional banking
channels, could get small loans to develop their business. In marketing management terms,
what Mr. Yunus did, was to realize that the market segmentation of the credit market was not…
A. Exclusive
B. Comprehensive
C. Relevant
D. Similar
6. Mass market strategy, where the entire market is served with a single offering, delivers
greater value compared to segmentation-based marketing.
A. From the company standpoint
B. From the customer standpoint
C. From the collaborator standpoint
D. None of the above
7. When assessing segment attractiveness, companies can assess customer equity by
calculating the net present value of the benefits and costs of a given customer, adjusted for the
declining time value of money. Which of the following statements about customer equity is
MOST likely to be true:
A. All else equal, customer equity of a late adopter is greater than customer equity of an
early adopter
B. All else equal, customer equity of a late adopter is smaller than customer equity of an
early adopter
C. All else equal, customer equity of a late adopter is the same as customer equity of an
early adopter
D. None of the above
8. According to Mahajan and Muller, to understand whether the brand should first target
innovators or the majority, companies have to factor in multiple decision criteria. Which of the
following criteria would suggest that the company should target the majority, instead of
innovators?
A. High innovator to majority ratio
B. Low cost of capital
C. Slow rate of market acceptance
D. All of the above
9. Brand A holds 80% of the market in sales and currently offers one product to the market.
Which positioning is this brand is most likely to rely on?
A. Competitive and product-line
B. Need-based and category-based
C. Need-based and competitive
D. Product-line and category-based
10. Company X runs a price promotion in two stores. In store A it offers a 20% discount, in store
B it also offers a 20% discount on its product. However, store A regularly runs other promotions,
offering discounts between 10-20%, while store B does not. All else held equal, the increase in
demand in store B will be greater than the demand in store A because of…
A. Reference dependence
B. Diminishing marginal utility
C. Loss aversion
D. Weigh-additive principle
11. Which types of benefit framing can be considered NON-comparative?
A. Competitive and need-based
B. Category-based and need-based
C. Competitive and product-line
D. Category-based and product-line
12. Alice travels to Paris and has very high expectations for her hotel - she heard that she can
find cheap (below 100 eur price), high-quality (above 8/10 rating on Booking.com) hotel rooms
in the eity. Mike also travels to Paris at the same time but has low expectations - he heard that
hotel rooms are expensive (above 200 cur price) and of low quality (below 6/10 rating on
Booking.com). Alice and Mike both consider two rooms, of moderate price and quality: room A
(140 price and 6.5/10 rating) and room B (160 price and 7/10 rating). Based on research on
context effects on attribute weights by Sokolova and Krishna discussed in the course, what is
most likely to happen in this scenario?
A. Compared to Mike, Alice will view price as relatively MORE important and be MORE
likely to book hotel room A.
B. Compared to Mike, Alice will view price as relatively LESS important and be MORE likely
to book hotel room A.
C. Compared to Mike, Alice will view price as relatively MORE important and be MORE
likely to book hotel room B.
D. Compared to Mike, Alice will view price as relatively LESS important and be MORE likely
to book hotel room B.
13. Which of the statements below is FALSE?
A. Compared to services, product evaluations are more difficult to change retrospectively.
B. Compared to services, products are less affected by electronic word of mouth.
C. Compared to services, products are less likely to be characterized by search attributes.
D. Compared to services, products can be stored more easily.
14. Anne is buying her food from Aldi, the low-cost retailer. Even though she is not sure whether
all the prices she pays are objectively lower than those at other stores, buying at Aldi makes her
feel that she is getting the best prices possible when shopping for food. In this scenario Aldi
brand is contributing to which customer value dimension of Anne's value?
A. Emotional
B. Functional
C. Monetary
D. Psychological
15. The Washington subway experiment is an example of how a personal brand of the violinist,
Joshua Bell, could.
A. Help consumers identify the offering
B. Help consumers in their self-expression
C. Serve as a performance signal
D. Serve to boost consumers' financial benefits
16. "Happy Belly" is an Amazon brand that sells snack food items. It was introduced in 2016 and
was the first Amazon brand of packaged nuts and granola mixes. This addition to Amazon's
brand portfolio can be considered…
A. line extension
B. horizontal extension
C. multibrands approach
D. a new brand
17. For companies with non-zero fixed and variable costs, when the demand for the product is
INCREASING , cost-plus prícing will suggest that the company…
A. Decreases its prices
B. Keeps the prices the same
C. Increases its prices
D. Increases its sales volumes
18. This pricing technique implies showing people a range of product prices in random order
and asking them whether they would buy the product at each given price. This pricing method is
called…
A. The Gabor-Granger method
B. The Van Westendorp method
C. The conjoin-method
D. The demand-based method
19. Company A offers subscription-based book delivery services and is planning to enter a new
geographic market. The company knows that once people sign-up, they tend to stay with the
company for at least 2 years. The company also knows that the majority of their target group in
the new market is price sensitive. Which market entry pricing strategy would be MOST sensible
for company A?
A. Market segmentation
B. Mass market strategy
C. Market penetration
D. Market skimming
20. Company A had increased its prices from curl to eur2 and saw its demand drop from 100
units to 99 units. The elasticity of demand for company A is…
A. -0.01
B. -0.1
C. -1
D. -10
21. Left-digit pricing, or just-below pricing, is…
A. More likely to boost demand among low (vs. high) frequency shoppers
B. More likely to boost demand among more (vs, less) loyal brand customers
C. More likely to boost demand for positive demand elasticity products
D. More likely to boost demand for products without (vs. with) salient reference prices
22. Below are two internet providers offering two different subscription plans: Based on Burson,
Larrick, and Lynch's (2009) study of the numerosity heuristic, what can we expect in terms of
shares of demand for the two plans for each of the companies?
A. Company A: 50/50 sales for plans A and B respectively; Company B: 60/40 sales for
plans A and B respectively
B. Company A: 50/50 sales for plans A and B respectively; Company B: 50/50 sales for
plans A and B respectively
C. Company A: 50/50 sales for plans A and B respectively; Company B: 40/60 sales for
plans A and B respectively
D. None of the above/All of the above (different across test versions)
23. Company sells two products: blender A with 1200 watts of power for $150 and a blender B
with 800 watts of power for $90. The company now adds a third blender C to the line with 1000
watts power and SI40 price (S150 price in some test versions). The new addition, the company
hopes, will boost the sales of blender
A. The psychological process that can lead for that to happen is called... A. The
compromise effect
B. The decoy effect
C. The numerosity effect
D. None of the above.
24. Below are 6 cards used in conjoint analysis with 3 attributes (price, quality, color) and 2
attribute levels: Correlation between Price and Quality: 0.33 Correlation between Price and
Color: 0.33 Correlation between Quality and Color: 0,33 These cards are…
A.
B.
C.
D.
Balanced AND Orthogonal
NOT balanced BUT Orthogonal
NOT balanced AND NOT Orthogonal
Balanced BUT NOT Orthogonal
25. Below is a conjoint analysis output. Participants saw cards with hotel descriptions. Hotels
were described on 3 attributes that had 2 levels each: price (level 1: $100 vs. level 2: $200), star
rating (level 1: 4 vs. level 2: 5), membership in a global chain (level 1: yes; level 2: no). Below is
the table with conjoint analysis results, with mean changes in conjoint card rankings when the
level of a given attribute changed from level I to level 2:
Assume the company changes from NOT being a member of global hotel chain to being a
member of a global hotel chain. It wants to keep the customer value of the offering exactly the
same as before the transition to the global chain status. To do that, based on the above
information, should the company increase/decrease its prices?
A. Decrease prices by S100
B. Decrease prices by $50
C. Increase prices by $50
D. Increase prices by $100