Marketing Basics
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marketing_8.docxQuestion 1
As consumers shift their support to firms that do meet their needs:
Answer
firms should increase promotional expenditure.
firms should try to attract new customers.
firms must immediately adopt their competitors' strategies.
laggard businesses are forced to either improve or get out of the way.
4 points
Question 2
A S.W.O.T. analysis
Answer
should help a manager develop a strategy that leads to a competitive advantage.
seeks to improve strategy planning by scanning for warnings, omens, and tips about competitors' plans.
is not necessary if competitors have already entered the market.
defends against potential competitive threats by planning specific safeguards, weapons, or tactics.
4 points
Question 3
The monopolistic competition that is typical of the U.S. economy:
Answer
always leads to higher prices, but it may not lead to higher consumer satisfaction.
is a problem because it does not result in products that reflect consumer's social values.
is the result of consumer preferences.
is the result of manipulation of markets by business firms.
4 points
Question 4
Which of the following statements BEST describes a marketing manager?
Answer
A marketing manager should know that most consumer complaints do not require a response because the consumer's dissatisfaction is beyond the control of the firm.
A marketing manager should recognize that many consumers who complain are troublemakers and that not much can or should be done about their complaints.
A marketing manager should assume that most customers who are dissatisfied will complain, but that people who are satisfied will not.
A marketing manager should be concerned that many of the complaints that are reported are never resolved.
4 points
Question 5
If a profit-oriented marketing manager does not know the exact shape of the firm's demand curve, marginal analysis:
Answer
is useless.
will suggest the same price as break-even analysis.
may be useful anyway since a profitable region usually surrounds the best price.
suggests that the only sensible approach is to use average-cost pricing.
4 points
Question 6
Sellers sometimes take the auction approach and adapt it by using sequential price reductions over time. When or where is this approach most commonly used?
Answer
With products that have a short life
When the product supply is unlimited
With heavy equipment manufacturing machinery
When competition is absent
4 points
Question 7
Given the following data, compute the break-even point (BEP) in DOLLARS. Selling price = $2.00, Variable cost = $1.00, Fixed cost = $150,000
Answer
$300,000
$400,000
$150,000
$200,000
4 points
Question 8
Marketers estimating the demand curve:
Answer
do not have to worry about price competition due to the nature of the demand curve.
can use marginal analysis to help it maximize profits.
will have to charge the market price which is set by the intersection of industry supply and demand.
could use marginal analysis to compare alternatives--but this would not help in pricing because this method focuses on selling one more unit and therefore ignores total profitability.
4 points
Question 9
In the development of a marketing plan, blending the marketing mix would not generally involve
Answer
predicting future behavior.
product lines.
product life cycle.
sales promotion.
4 points
Question 10
Gabriella Sax believes that customers in her dress shop find certain prices very appealing. Between these price levels, all prices are seen as roughly the same, and price cuts in these ranges generally do not increase the quantity sold (i.e., the demand curve tends to drop vertically within these price ranges). Therefore, Sax prices her items as close as possible to the top of each such price range. This is referred to as:
Answer
bait pricing.
leader pricing.
prestige pricing.
psychological pricing.
Question 11
Why do many department stores seek a markup of about 30% when some discount houses operate on a 20% markup? Identify and explain at least three reasons.
Your response should be at least 300 words in length. You are required to use at least your textbook as source material for your response. All sources used, including the textbook, must be referenced; paraphrased and quoted material must have accompanying citations.
Question 12
Should a marketing manager or a business refuse to produce an “energy-gobbling” appliance that some consumers are demanding? Should a firm install an expensive safety device that will increase cost but that customers do not want? Are the same principles involved in both these questions? Explain.
