Marketing

1. Why do profits increase during the very beginning of the growth stage in the product life cycle?
a. No more promotion costs c. Competition has not yet taken sales away.
b. Fewer products are made d. Sales are decreasing

2. Price elasticity of demand measures:
a. how price responds to demand of products c. product preferences
b. how quickly prices change d. how demand responds to price changes in products

3. If the manufacturer of a sophisticated new consumer electronics product determines that many target consumers qualify as “innovators” and “early adopters”, the company should use the ________ pricing strategy:
a. price skimming b. penetration c. market holding d. cost based

4. Which pricing strategy has the advantage of being simple to calculate but the disadvantage of not being relevant to the demand and competitive conditions?
a. price skimming b. penetration c. luxury pricing d. cost based

5. When demand changes as a result of pricing changes, this is called:
a. inelastic demand b. elastic demand c. price skimming d. price penetration

6. When demand does not change as a result of pricing changes, this is called:
a. inelastic demand b. elastic demand c. price skimming d. price penetration

7. Penetration pricing works best with
a. specialized products c. products that innovators and early adopters like
b. products that the consumer majority likes d. new advanced technology

8. Choose two (2) factors that can influence price elasticity of demand:
a. color of product b. available substitutes c. new factories d. time

9. Which can describe a company’s website:
a. It is a form of distribution b. It is a form of promotion c. A and B are correct

10. Television as a form of promotion has advantages over other forms. What could you use it to achieve?
a. to reach the widest audience c. to increase sales
b. to reach a targeted audience d. all of the above

11. Which one of the four parts of an ad indicates that it’s an informative ad?
a. the image b. the body copy c. the signature d. the headline

12. When a firm adopts an integrated communications approach, this always involves:
a. coordinating its promotional mix to deliver a clear and consistent message
b. using sales promotion only, to create action
c. just creating ads using similar media with a similar message
d. using every single tool of the promotional mix

13. Each form of promotion can achieve its own types of promotional objectives. What would be the major goal when using sales promotion?
a. enhance the brand identity c. increase immediate sales
b. increase market share d. all of the above

14. Advertising is best used to achieve certain objectives. What could be the goal when using advertising?
a. enhance the brand identity c. increase immediate sales
b. increase market share d. all of the above

15. PR is particularly adept at its own promotional objectives. What would be the goal when using PR?
a. enhance the brand identity c. increase immediate sales
b. increase market share d. all of the above

16. Why is publicity a valuable form of promotion?
a. It appears to be a direct message from the company to the customer
b. It appears to be from an objective third party

17. What is proactive PR used for?
a. It’s necessary when companies recall a product or get involved in unpopular activities
b. It encourages customers to go to the store immediately
c. It’s the most effective method for companies to enhance their brand identity.
d. It informs the customer about sales

18. What is reactive PR used for?
a. It’s necessary when companies recall a product or get involved in unpopular activities
b. It encourages customers to go to the store immediately
c. It’s the most effective method for companies to enhance their brand identity.
d. It informs the customer about sales

19. Which of the following is NOT part of communications?
a. publicity b. direct marketing c. product d. personal selling

20. For the right product, market skimming can be valuable to use because
a. it attracts a large quantity of customers
b. it encourages customers to buy a larger quantity of product
c. profits can be used to pay for R&D
d. it is based on costs alone

21. This type of promotion has short term benefits only for the retailer:
a. advertising b. public relations c. personal selling d. sales promotion

22. What promotional goals could advertising achieve?
a. Increase sales c. increase brand awareness b. Enhance brand identity d. all of the above

23. What is an important reason to use informational ads?
a. To explain the social influence of the brand
b. To explain the benefits of the product
c. To create an emotional experience
d. To save money

24. What is true about Zara’s vertical integration?
a. It requires a large investment of money c. It allows for more control over production processes
b. It enables cost efficiencies to be discovered d. A, B, and C are correct

25. Why is the time of day important to consider in choosing when to run a TV commercial?
a. The competition has ads at certain times
b. Certain types of clothing are appropriate for certain times of day
c. The time of day encourages customers to buy
d. Different target markets are watching at different times

26. What is correct concerning outsourcing production to a foreign country?
a. Its quick response allows spontaneous fashion deliveries in the US
b. It allows the brand more convenient control over production processes
c. It enables cost efficiencies to be discovered in the production process
d. Costs might be lower than production in the US

27. What is the biggest advantage of using TV for advertisements?
a. It is luxurious c. It’s an unusual form of advertisement
b. It’s low cost d. It can reach the mass market

28. What is the biggest advantage of using high fashion magazines for advertisements?
a. It is luxurious c. It’s an unusual form of advertisement
b. It’s low cost d. There is so much competition on the pages

29. Which one of the four parts of an ad would be the most influential one in an ad with the goal of enhancing brand identity?
a. the image b. the body copy c. the signature d. the headline

30. Which of the following is NOT a key characteristic of advertising?
a. It can build awareness by reaching a large audience quickly.
b. With repetition, it can communicate brand positioning
c. It can’t actually close a sale
d. It is very credible as the message comes from a third party