SECTION 1: True and False <TOTAL20 marks>
For each of the following, place a “T” if the statement is “true”, “F” if the
statement is false. (20 marks)
___F___1.When the price setter stresses the supply or cost side of the pricing problem,
they are using competition-orientation pricing.
__F___ 2. When a consumer learns about a new product for the first time and makes a
decision to try it, the consumer is engaged in the alternative evaluation process.
___T___3. Consumers position products in their minds in order to simplify the buying
process.
__F____4. The retail position matrix makes use of these two dimensions:width and
depth of product line.
____T__ 5. When a company chooses a target marketing strategy, its choices are
influenced by factors related to company resources, the degree of product variability,
and the product's life-cycle stage
__T____6. The purchase of a bottle of water is a low-involvement purchase.
__F____ 7. Intensive distribution seeks many outlets in a market, while selective
distribution seeks only one outlet in a given market area.
__T___ 8. The frequent use of promotional pricing can encourage customers to only
buy when a brand is on sale
_F_____ 9. Direct marketing rarely occurs on a one-to-one, interactive basis.
__F___10. In introduction stage, a company retains the product but reduces marketing
support costs.
Section 2： Multiple Choices (20 marks, 2 for each)
1. _____c_____ is the term that describes the actions a person takes in purchasing and
using products and services.
a) Marketing
b) Market research
c) Consumer behavior
d) Consumer management
e) Purchase development
2. A “quality” message may be used for the HUMmers while a “connectivity”
message may be used for the Executive Warriors. This is an example of __________.
a) positioning
b) selective marketing
c) branding
d) market segmentation
e) targeting
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Ans: a
3. The framework to relate the market segments of potential buyers to products
offered or potential marketing actions by the firm is called: d
a) Action grid
b) Relation grid
c) Product grid
d) Procuduct/Market grid.
4. To handle products in the decline stage of the product life cycle, companies often
use either __________.
a) diversification or harvesting
b) diversification or contracting
c) deletion or harvesting
d) deletion or diversification
e) building or contracting
Ans: c
5. Pricing constraints are __________.
a) barriers that must be overcome in order to set pricing objectives
b) competitive pricing advantages one firm has over another
c) different pricing strategies for each of the firm's products
d) factors that limit the range of prices a firm may set
e) another name for demand curves
Ans: d
6. When a firm distributes to two or more different types of channels for the same
product, this is called: D
a) Double channel duty
b) Dual network
c) Split distribution
d) Dual distribution
7. __________ is the marketing of two or more products for a single "package" price.
a) Packaged pricing
b) Loss-leader pricing
c) Bundle pricing
d) Tie-in pricing
e) Multi-product pricing
Ans: c
8. ___________ arises when one channel member believes another channel member is
engaged in behavior that prevents it from achieving its goals.
a) Channel conflict
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b) Disintermediation
c) Cross-docking
d) Partnership inconsistency
e) Relationship variance
Ans: a
9. Which method of classifying retail outlets would be most appropriate for describing
all franchise operations?
a) Form of ownership
b) Level of service
c) Merchandise line
d) Method of operation
e) Revenue generated
Ans: a
10. In which form of retail outlet would customers be offered convenience, quality
personal service and lifestyle compatibility?
a) Corporate chain
b) Administered system
c) Contractual system
d) Independent retailer
Ans: d
SECTION 3: SHORT ANSWERS (60 marks)
1. Distinguish between a direct and an indirect channel (6 marks). Please give an
example for each channel structure (4 marks)
Ans: a direct channel occurs when a producer and ultimate consumers deal directly
with each other. Because there are no intermediaries, the producer must perform all
channel functions. Indirect channels occur when intermediaries are inserted between
the producer and consumers and perform numerous channel functions.
2. Describe the characteristics of each stage of product life cycle. And discuss the role
of promotion in the four stages of the product life cycle (20 marks)
Ans: The first stage is introduction. The primary job for promotion here is to inform
and increase awareness of the product among consumers. (5 marks each stage)
The second stage is growth. Here the primary task is to persuade the consumer to buy
your brand rather than substitutes.
The third stage is maturity. Here, you want to maintain existing buyers and remind
consumers of the product's existence.
The fourth and final stage is decline. This is usually a period of phase-out for the
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product and little effort or money is expended, especially in sales promotions.
3. Assume you are manager of The Outback Steak House, a franchised restaurant that
has newly opened in Shanghai. Describe how you would segment the market
according to segmentation bases, using as many segmentation variables as you can
and explaining why each variable is appropriate. (20 marks)
Ans: [Students might select any segmentation variables] However, the most likely
include these: The first dimension would be geographic with segmentation variables
designed to describe those people within a reasonable draw area around the restaurant.
They could be defined by ZIP Code, census tract or subdivision. The next dimension
should be demographics, including homeowners, young adults, married, probably
with children. Also important would be household income, perhaps related to
occupations. The Outback manager would seek those people who had not only the
need, but also the means to dine at the restaurant and demographic correlations can be
rather easily made with regard to those factors. The psychographic dimension would
include variables such as extroverted, gregarious and those fond of pleasures such as
eating out. Segmentation according to the benefits dimension could include
convenience and economy relative to more expensive restaurants. As for the usage
dimension, it would be well to seek medium and heavy users including, perhaps, those
people who might dine at The Outback more than once a month, since repeat business
is the key to success in this sort of venture.
4. You will be graduating soon and have been offered "the job of your dreams". The
new position, however, requires some traveling so you will need a car. You currently
do not have one. What decision process will you go through to purchase an
automobile? (10 marks)
Ans: This purchase would require five purchase decision stages:
Problem recognition: the car is needed for the new job.
Information search: Check internal and external sources.
Alternative evaluation: objective and subjective attributes considered from
consideration set.
Purchase decision: decision made after judging the alternatives.
Post-purchase evaluation: evaluate car in terms of expectations.
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