UNIVERSITYOFTORONTO FacultyofArtsandScience & RotmanSchoolofManagement

PRINCIPLESOFMARKETING
MGT252H1F-L0101,L0201,L0301,L0401 ProfessorsClaireTsaiandNinaMazar

FinalExam

Duration-2hours/Questions-62 NoAidsAllowed _____________________________________________________________________________________________________

Thisisaclosedbook,closednotesfinalexam.Pointallocationisindicatedinparentheses.Thetotalis100points. UseapenciltoanswerPartIonamultiplechoicescantronsheet.AnswerPartsIIandIIIusingexaminationbooklets.

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PartI:MULTIPLECHOICE.Choosetheonealternativethatbestcompletesthestatementoranswersthequestion.Use thescantronsheet. 1PointperQuestion.TotalPoints:50. 1) Workingwithareportertotryandgetafavourablearticleaboutyourcompanypublishedinanewspaperisa formof________. A) publicrelations B) personalselling C) advertising D) salespromotion E) directmarketing 2) Someanalystssee________asthemajorenduringassetofacompany,outlastingthecompanysspecific productsandfacilities. A) staples B) convenienceproducts C) unsoughtproducts D) specialtyproducts E) brands 3) ________fromthemanufacturerorserviceprovideristhesetoffirmsthatsupplytherawmaterials, components,parts,information,finances,andexpertiseneededtocreateaproductorservice. A) Unidirectional B) Downstream C) Bilateral D) Upstream E) Separated 4) Under________,themarketconsistsofmanybuyersandsellerstradinginauniformcommoditysuchas wheat,copper,orfinancialsecurities. A) anti-trustagreements B) monopolisticcompetition C) anoligopoly D) puremonopoly E) purecompetition 5) WhenRevlonrecognizedawomanbuyinglipstickisbuyingmorethanjustlipcolour,sheisbuyinghope, whatproductleveldidRevlonrecognize? A) theexistenceofacoreproduct B) theexistenceofimageproducts C) theexistenceofanactualproduct D) theexistenceofconvenienceproducts E) theexistenceofanaugmentedproduct 6) Aproductintheearlymaturityordeclinestagemayrequire________advertising. A) persuasive B) cooperative C) comparative D) informative

E) reminder

7) Askingforacustomersordertakesplaceduring________. A) presentationanddemonstration B) closing C) preapproach D) prospecting E) handlingobjections PartI:MULTIPLECHOICE.Choosetheonealternativethatbestcompletesthestatementoranswersthequestion.Use thescantronsheet. 8) Intermsofthecommunicationprocess,puttingthoughtintosymbolicformiscalled________. 1PointperQuestion.TotalPoints:50. A) sending B) encoding C) decoding D) message E) receiving 9) QueensUniversityorderinganothercartonofletterheadisanexampleof: A) newtask B) straightrebuy C) returnbuying D) habitualrebuy E) modifiedrebuy 10) UsinganewspapertodistributecouponsvalidonitemspurchasedonCanadaDayisanexampleof________. A) salespromotion B) personalselling C) publicity D) advertising E) publicrelations 11) Advertisersareincreasinglyshiftinglargerportionsoftheirbudgetstomediathatcostlessandtargetmore effectively.Allofthefollowingbenefitgreatlyfromthisshift,except________. A) cabletelevision B) digitalsatellitetelevisionsystems C) outdooradvertising D) networktelevision E) BandC 12) Anincreaseincompetition,attractedbytheopportunitiesforprofit,istypicalofwhichstageintheproductlife cycle? A) productdevelopment B) growth C) decline D) introduction E) maturity 13) Marketcoverage,inventoryassortmentandlocationareallpartofthe________componentofthemarketing strategy: A) price B) promotion C) product D) place E) targetmarket 14) Thesestoresusuallycarrymorespecialtygoodsforwhichcustomersliketobewaitedon.Theyhavemuch higheroperatingcosts,whicharepassedalongtothecustomer. A) i d d t t 3

A) independentstores B) full-servicestores C) nonstoreretailers D) self-servicestores E) categorykillerstores 15) WhentwoBurgerKingrestaurantshaveadisagreementoverwhoshouldbeabletosellinquantityata discounttolocalathleticteams,theyareina________conflict. A) vertical B) horizontal C) generalized D) no-win E) problematic 16) JBAutoDetailingscustomershavenoticedthatthequalityofservicesdependsonwhoprovidesthemaswell aswhen,where,andhowtheyareprovided.Whathavethecustomersnoticed? A) Serviceinseparability B) Serviceintangibility C) Servicevariability D) Servicevolatility E) Serviceperishability 17) Whenaproducerdirectsitsmarketingactivitiestowardschannelmembersinordertoinducethemtocarrythe productandpromoteittofinalconsumers,theyareusingwhichtypeofstrategy? A) pullstrategy B) pushstrategy C) inductionstrategy D) product-mixstrategy E) noneoftheabove 18) Whatdowecalladetailedversionofanewideastatedinmeaningfulconsumerterms? A) productidea B) productconcept C) productimage D) productdefinition E) productproposal 19) Nintendocreateda13minutemusicvideorepresentationofitsnewestgameandsentitouttovideogame players.Theysoldoversixmillionunitsin45days.Thisisanexampleof________. A) onlinemarketing B) directmailmarketing C) directresponseTV D) telemarketing E) kioskmarketing 20) TheBodyShopdeterminestheneeds,wants,andinterestsofitstargetmarketsandoffersconsumersproducts withoutconductinganimaltesting.TheBodyShopispracticing: A) thetargetmarketmix. B) thesocietalmarketingconcept. C) ethicalmarketing. D) greenmarketing. E) thesellingorientation.

21) Acardealercomplainstothemanufacturerthatanotherdealerofthesamecarissellingoutsideitsassigned territory.Thisiscalled________. A) verticalconflict B) customer-serviceconflict C) parallelconflict D) dealer-franchiseconflict E) horizontalconflict 22) ________areconsumerproductsandserviceswithuniquecharacteristicsorbrandidentificationforwhicha significantgroupofbuyersiswillingtomakeaspecialpurchaseeffort. A) Unsoughtproducts B) Industrialproducts C) Augmentedproducts D) Shoppingproducts E) Specialtyproducts 23) Thesalespersonwasunpreparedforthesalescall.Hehadnotlearnedasmuchaspossibleaboutthe organizationbeforemakingtheappointmentforlaterthatday.Whatstephadthesalespersonomitted? A) qualifying B) prospecting C) closing D) preapproach E) approach 24) Advertisingappealsshouldhavethreecharacteristics.WhichisNOToneofthesecharacteristics? A) Theyshouldbedistinctive. B) Theymustbebelievable. C) Theyshouldbemeaningful. D) Theyallmustshowlifestyle. E) AandC 25) Garysworkedforseveralsmallmanufacturers,yethedemonstratedtheirproductstoretailersinhisterritory asiftheywereallhisown.Heknewtheretailerswell,andheappreciatedtheircompany.Theylookedtohim asanauthorityandafriend.WhenGarytookanorderhesentittothemanufacturerwhodeliveredthegoods directlytohiscustomer.Hethenreceivedacommissionchequeinthemail.Boy,helovedbeingself -employed! Garyisa________. A) broker B) truckwholesaler C) commissionmerchant D) manufacturersAgent E) dropshipper 26) Determiningwhethertocollectinformationbymail,telephone,orpersonalinterviewisdecidedatwhichstep inthemarketingresearchprocess? A) evaluatingtheresearch B) interpretingthefindings C) developingtheresearchplan D) implementingtheresearchplan E) definingtheproblem

27) TheBodyShopisastorethatcarriesanarrowproductlinewithadeepassortmentofproducts.Itisa A) conveniencestore B) departmentstore C) massmerchandiser D) supermarket E) specialtystore 28) Toencouragedealeracceptance,RamsayWholesalerGrocerofferedeachretailclienta5%pricereductionin returnforadvertisingtheirfoodproductsinthegrocerystorefliers.Ramsaywasusinga________. A) allowance B) quantitydiscount C) promotionaldiscount D) trade-indiscount E) cashdiscount 29) Aphonecallfromaprospectivecustomeraskingabouttheproductpicturedinanadisanexampleof ________. A) noise B) counter-message C) feedback D) media E) response 30) Whichtypeofproductmightrequireamoredirectmarketingchanneltoavoiddelaysandtoomuchhandling? A) perishableproducts B) higher-pricedproducts C) productsinthegrowthstage D) productsintheirmaturityordeclinestage E) lower-pricedproducts 31) Whatisonereasonthatmarkuppricingisnotpractical? A) Bytyingthepricetocost,sellerssimplifypricing. B) Thismethodignoresdemand. C) Whenallfirmsintheindustryusethispricingmethod,pricestendtobesimilar. D) Sellersearnafairreturnontheirinvestment. E) Consumersknowtheyarebeingovercharged. 32) Ifyourobjectiveistocreateconsumerawarenesstowardyourproduct,youwilluse________ads. A) informative B) persuasive C) comparative D) cooperative E) reminder 33) Theelderlygrandmotherchattedwithhergrand-daughterabouttheRollerbladeshergrand-daughterwanted asabirthdaypresent.ThegrandmotherhadneverheardofRollerbladesandstatedshepersonallyhadnouse forthem.ForthegrandmotherRollerbladesare: A) availableproducts B) unsoughtproducts C) specialtyproducts D) convenienceproducts E) shoppingproducts

34) Thefrozencakebusinesshadbecomesocomplexovertheyearsthatthecompanydecideditneededto reorganizeitssellingefforts.Whichapproachismostappropriateforlargecomplexaccounts? A) territorialsales B) outsidesales C) telemarketing D) teamselling E) insidesalesselling 35) Mercedesemphasizesengineeringdesign,performance,qualityandsafetyinitsads.Mercedesisusinga(n) ________intheseadvertisements. A) personal B) rationalappeal C) legalappeal D) emotionalappeal E) moralappeal 36) Hallmarkadvertisesitsgreetingcardsonlybeforemajorholidays.Thisisanexampleof________. A) pulsingscheduling B) continuityscheduling C) mediaplanning D) creativetiming E) seasonaladvertising 37) Messagesthatadvocatehumourclaimthattheyattractmoreattentionandcreatemorelikingandbeliefinthe sponsor.Thisiscalleda(n)________appeal. A) structural B) moral C) entertaining D) emotional E) rational 38) Inchoosingatransportationmodeforaproduct,shippersmustbalancetheconsiderationsofspeed, dependability,cost,and________. A) fulfillment B) weight C) customerchoice D) distance E) availability 39) Whichofthefollowingmaybetrueaboutshopperswhoprefertoshopatlifestylecentres? A) Theypreferinexpensiveatmospheres. B) Theypreferupscalestores. C) Theypreferout-of-the-waylocations. D) Alloftheabove. E) Noneoftheabove. 40) Theretaileraddedastandardmarkupof40%tothecostoftheproduct.Whattypeofpricingistheretailer using? A) break-evenanalysis B) consumerdemandpricing C) perceived-valuepricing D) cost-pluspricing E) targetprofitpricing

41) Themarketerwantstounderstandhowthestimuliarechangedintoresponsesinsidetheconsumers________, whichhastwoparts.First,thebuyerscharacteristicsinfluencehowheorsheperceivesandreactstothe stimuli.Second,thebuyersdecisionprocessitselfaffectsthebuyersbehaviour. B) blackbox C) psyche D) culture E) lifestyle A) belief 42) TeriwenttothestoretobuyaSuperSuziedollforherthreeyearolddaughter.Whenshearrived,thedolls weresoldout.Shewassurprisedbecauseshearrivedearlyafterthestoreopened.Amoreexpensivedollwas availableintheplaceofSuperSuzie.Terisuspectsthatthestoreiscommitting________pricing. A) resalepricemaintenance B) bait-and-switch C) cost-plus D) deceptive E) discrimatory 43) LyallElectric,Inc.,maintainsasalesforceforitssmallappliancecustomersandaseparatesalesforceforits automotivecustomers.LyallElectricutilizesa________structure. A) complexsalesforce B) territorialsalesforce C) productsalesforce D) retailsalesforce E) customersalesforce 44) Fredisabletohelpnegotiatethepurchaseprocess,whileunitingbuyersandsellers.Theygreatlyvaluehis expertise,andhedoesnthavetobuytheproductsinordertoresellthem.Fredisa________. A) commissionmerchant B) dropshipper C) broker D) truckwholesaler E) manufacturersAgent 45) WhenCloroxwasconductingatestmarketonadetergentwithbleach,italertedP&Gtothisnewproduct. TheyinturnformulatedtheirowndetergentwithbleachandeventuallyknockedCloroxsproductoutofthe market.Thissituationisanexampleof: A) poorconcepttesting B) poorpositioningbyClorox C) apoorbusinessanalysis D) adisadvantageoftestmarkets E) thevolatilityofconsumermarkets 46) AsmarketingmanagerofSwissChalets,amountainandlakesideresort,youdiscoverthatconsumersposition productsandservices________. A) generallyafterconsultingfriendswhousethem B) basedonnearbycompetitorspositions C) withorwithoutthehelpofmarketers D) ratherreluctantly E) aftermarketersputmarketingmixesinplace

47) WhentheTwinSixCafeprovidesgourmetmenuoptionstoitscustomers,aswellasimpeccableservicewhich evenallowsthecustomertohand-selecthisorherowncutofmeat________is/areevident. A) onlyanaugmentedproduct B) onlyanactualproduct C) acorebenefit,anactualproduct,andanaugmentedproduct D) bothacorebenefitandanactualproduct E) onlyacorebenefit 48) BlackandDeckerusesanewproductdevelopmentapproachwherecross -functionalteamsofindividualsfrom differentcompanydivisionsareestablished.Thisiscalled: A) commercialproductdevelopment B) sequentialproductdevelopment C) simultaneousproductdevelopment D) internationalproductdevelopment E) lead-countryproductdevelopment 49) WhenKaoCompanyinJapanevaluatesanewproductideaagainstcriteriasuchaswhethertheproduct benefitsthecompany,consumersorsocietyitis: A) brainstormingonnewproductideas B) screeningnewproductideas C) usingthegreenmatrixtodevelopitsbusiness D) attheintroductorystageintheproductlifecycle E) developingnewconceptsbyinvolvingrepresentativesfromthecompany,consumersandsocietyin general 50) ConAgrajoinedwithKelloggstooffertheirbrandnameHealthyChoice,asanutritiouscerealmadeby Kelloggs.Thisproductiscalled: A) amultibrand B) alineextension C) aprivatelabelbrand D) aco-brand E) alicensedbrand PartII:SHORTANSWER.Writethewordorphrasethatbestcompleteseachstatementoranswersthequestion.Usethe examinationbooklet. 3PointsperQuestion.TotalPoints:24. 51) Explainbrieflythemarket-skimmingpricingstrategy,thennameandexplaintwodifferentsituationsinwhich marketerswillusethisstrategy. 52) Explainintermodaltransportation. 53) Whymightamarketeroflaundrydetergentbeinterestedinviewingaperceptualpositioningmap? 54) SomeproductsremaininthematuritystageofthePLCforlongperiodsoftime,whereasotherspassthrough quickly.Listandexplainbrieflythreepossibleconditionsthatmayallowaproducttoremaininthematurity stageforalongperiodoftime. 55) Whymightacompanyneedtohirebothaninsideandanoutsidesalesforce?

56) Amarketersfixedcostsare$200,000,thevariablecostis$8,andtheexpectedunitsalesare10,000.Iftheywant toearna30percentmarkuponsales,whatisthemarketersmarkupprice? 57) Explainwhytypicalhusband-dominantorwife-dominantproductsofthe1970smaynolongerberegardedas such. 58) -T)StudentsfromProf.ClaireTsaisclassonly-L0101,L0401-mustanswerthisquestion: Imaginethefollowingscenario:Amanager,inanefforttotestwhetheraproposedincentiveprogramwould increaseproductivity,appliedtheprogramtoagroupofworkerswhohadthelowestproductivity.Amonth later,theirproductivityindeedincreased.Themanagerconcludedthattheprogramdidincreaseworkers productivity.Whatisaviablealternativeexplanationforthisresult? -M)StudentsfromProf.NinaMazarsclassonly-L0201,L0301-mustanswerthisquestion: HowmighttheBCGmatrixrepresentaproductlifecycle? PartIII:ESSAY.Writeyouranswerintheexaminationbooklet. TotalPoints:26. 59) Namethethreekindsofappealsformessagecontent,giveanexampleforwhenyoumayuseeachofthem, andexplainwhy.(5Points) 60) Jennyistryingtodevelopatelevisionadvertisingcampaignforherproduct.Sheissellingvitaminswithall naturalingredients.Hermaintargetmarketiscouplesovertheageof45.Explaintheideabehindeachofthe followingmessageexecutionstylesandhowitcouldbeusedtomeetJennysneeds.Indicatewhichoneyou woulduseifyouwereJenny,andexplainwhy.(10Points) 1)Sliceoflife 2)Fantasy 3)MoodorImage 4)Scientificevidence 5)Personalitysymbol 61) Whenwouldpricecutsandpriceincreasesbenecessary?(5points)

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62) -T)StudentsfromProf.ClaireTsaisclassonly- L0101,L0401- mustanswerthisquestion(6points): (a)Explaintheconceptofanchoringandadjustment.Inparticular,explainwhyananchorcanbeirrelevant andwhytheadjustmentisofteninsufficienttooffsettheeffectsoftheirrelevantanchor.(b)Usetwoexamples toillustratehowonecanbenefitfromapplyinganchoringandadjustmentinpricingdecisions. -M)StudentsfromProf.NinaMazarsclassonly-L0201,L0301-mustanswerthisquestion(6points): Peoplecarealotaboutpricefairness.Coca-Colaexperiencedthiswhenpressreleasesannouncedthatthe companywasplanningtointroduceanewtypeofvendingmachinethatwouldmakeuseofdynamicpricing. (a)ExplainbrieflywhatisdynamicpricingandhowdidCoca-ColaCompanywanttoimplementdynamic pricing(2points). (b)Whatwereconsumersreactionsandwhy(2points). (c)NameandexplainoneconditionunderwhichyouthinkCoca -Colawouldhaveproceededwithitsplan(2 points).

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AnswerKey Testname:COMBINED_FINAL_4

1) A 2) E 3) D 4) E 5) A 6) E 7) B 8) B 9) B 10) A 11) D 12) B 13) D 14) B 15) B 16) C 17) B 18) B 19) B 20) B 21) E 22) E 23) D 24) D 25) D 26) C 27) E 28) A 29) C 30) A 31) B 32) A 33) B 34) D 35) B 36) E 37) D 38) E 39) B 40) D 41) B 42) B 43) C 44) C 45) D 46) C 47) C 48) C 49) B 50) D 12

AnswerKey Testname:COMBINED_FINAL_4

51) Suchpricingworkswhentheproductsqualityandimagesupportthehigherprice.Inaddition,suchpricingisused whenproductspassthroughthelifecyclequicklyandthemarketer,consequently,mustrecoupresearchand developmentcostsearly. 52) Intermodaltransportationcombinestwoormoremodesoftransportation,suchastruckandtrain,truckandplane, trainandwater. 53) Perceptualpositioningmapsshowconsumerperceptionsoftheirbrandsversuscompetingproductsonimportant buyingdimensions.Laundrydetergent,forexample,maybeplacedonaperceptualmapbasedonpriceandcleaning power;thisallowsamarketertoviewhowconsumersperceivetheirproductwithrespecttoothersproductsalong thosedimensions. 54) Whetheranewtechnologywillsoonreplacethecurrentone,whetherthecompetitiveenvironmentisespeciallyfierce, andwhethertheproductcanbemodifiedslightlyfromtimetotimeinordertokeepupwithchangingconsumer tastesmayprolongthematuritystage. 55) Forexample,largeraccountsmayrequirespecialnurturing;therefore,anoutsidesalesforcecancallonthose customers.Smalleraccountsmaybeabletobetakencareofbyaninsidesalesforce. 56) Themarkuppriceis$40. 57) Moresingle-parentfamiliesandmoredual-incomefamilieshavechangedthetraditionalbuyingrolesovertime. 58) 59) 1)Rational-arationalargumentmaybegoodforadvertisingacomputerbecauseindividualsmaybuybasedsolely onfeaturesandprice. 2)Emotional-tryingtoraisemoneyforachildrenscharityismoreeffectivewhenthecampaignfocusesonchildren whohavespecialkindsofneeds. 3)Moral-amoralargumentmayhelpwhenpromotingenvironmentallyfriendlybehaviour(suchaswater conservation,notlittering,recycling,composting,etc.) 60) 1)Sliceoflife:thisapproachshowstypicaluseoftheproductwithinthetargetmarket.Thiswouldshowamature coupletakingthevitamins,lookinghealthyandhappy. 2)Fantasy:thisapproachwouldusesomedaydreamingorfantasticoutcomeoftakingthevitamins:suchasagreat gameofgolf,orahappymarriage. 3)MoodorImage:thisapproachdoesnotstateproductclaims,butisusesvisualcuestocommunicatevaluessuchas love,beauty,peace,serenity.Thiscouldbedonebyshowingtheproductpackage,buthavingnovoices.Justhappy couplesinromantic,sun-splashedlocations,orhappyromanticembraces. 4)Scientificevidence:Thisapproachusesscientificdatatoshowthatonebrandissuperiortoothers.Thiswould work,butonlyifJennyhassuchdata,sincemakingsuchclaimswithoutsupportingdocumentationisaviolationof TheCompetitionAct.IfJennyhassuchdata,shecoulddoaproductcomparisonusingthefacts. 5)Personalitysymbol:Thisapproachcreatesacharacterthatissupposedtobeapersonificationoftheproduct.Thisis hardtodowithavitamin,butperhapsananimalcharactercouldbeused(likeTonytheTiger).Itwouldbehumorous anditmaygivethecouplestheideathatthevitaminswerelinkedwithanimalvitality. Iwouldchoosethesliceoflife.Iwouldchoosethisbecausethetargetmarketcanidentifywithit,anditisntas provocative,orsensitiveassomeoftheotherscouldbe,particularlythefantasy,mood/imageandpersonalitysymbol approaches.Thescientificevidenceapproachwouldbegreat,especiallytofocusonthenaturalaspectsofthe vitamins.ButJennymaynothavesuchinformationavailableatthistimetosupportsuchanapproach.

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AnswerKey Testname:COMBINED_FINAL_4

61) Pricecutsmaybenecessarywhenthereisexcesscapacity.Anotherreasonisthatmarketsharemaybefallinginthe faceofstrongpricecompetition.Acompanymayalsocutpricesinadrivetodominatethemarketthroughlower costs.Amajorfactorinpriceincreasesiscostinflation.Risingcostssqueezeprofitmarginsandleadcompaniestopass costincreasesalongtocustomers.Anotherfactorleadingtopriceincreasesisover-demand.Whenacompanycannot supplyallitscustomersneeds,itcanraiseitsprices,rationproductstocustomers,orboth. 62)

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