STR 581 Multiple Choice Questions

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1) ________ consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers.
A. A marketing research system

B. A promotional campaign

C. A marketing database

D. A marketing information system

E. A marketing intelligence system

2) A ________ is a set of procedures and sources managers use to obtain everyday information about developments in the marketing environment.
A. marketing information system

B. marketing intelligence system

C. vertical system

D. marketing research system

E. product management system

3) A(n) ________ is any good, service, or idea that is perceived by someone as new.
A. product

B. new idea

C. creative product

D. innovation

4) A company can take several steps to improve the quality of its marketing intelligence. If the company purchases competitive products for study, attends open houses and trade shows, and reads competitors’ published reports and stockholder information, the company is using ________ to improve the quality of its marketing intelligence.

A. sales force surrogates

B. external networks

C. advisory panels

D. customer feedback systems

E. intermediaries

5) ________ is the difference between the prospective customer’s evaluation of all the benefits and all the costs of an offering and the perceived alternatives.

A. Perceived usefulness

B. Report rating

C. Customer perceived value

D. Competitors market share rate

E. Failure avoidance rate

6) Total customer satisfaction is the general feeling of pleasure or disappointment that results from comparing perceived performance to expectations. To achieve total customer satisfaction, organizations need to_____________.
A. Develop marketing campaigns

B. Manage customer experiences

C. Lower expectations

D. Lower prices

E. Spend more money

7) Most established companies focus on ________ when it comes to innovation.

A. incremental innovation

B. everyday innovation

C. demand innovation

D. competitive innovation

E. continuous innovation

8) The first step in estimating demand is to understand what affects price sensitivity. Generally speaking, customers are most price sensitive to products that cost a lot or are ________.
A. priced low to begin with

B. low-cost

C. bought infrequently

D. bought frequently

9) In ________ marketing, the seller engages in the mass production, mass distribution, and mass promotion of one product for all buyers.
A. group

B. general

C. segmented

D. differentiated

E. mass

10) Particularly when shopping for ego-sensitive products such as perfumes and expensive cars, many consumers use price as an indicator of ________.
A. status

B. ability

C. capability

D. size

E. quality

11) The following are considered to be advantages of online research EXCEPT ________.
A. online research is inexpensive

B. online research is relatively free of technological problems and inconsistencies

C. online research is more versatile

D. people tend to be more honest online than in other interviewing methods

E. online research is faster

12) Companies normally budget marketing research at ________ percent of company sales.
A. 1 to 2

B. 4

C. 6.5

D. 10 to 12

E. 2 to 3

13) Which of the following is generally considered to be the last step in the marketing research process?
A. Present the findings.

B. Control the environment.

C. Make the decision.

D. Draft the report

E. Analyze the information.

14) Some intermediaries use the following: strategic planning, advanced information systems, sophisticated
 marketing tools, measure performance on a return-on-investment basis, segment their markets, improve
their target marketing and positioning, and ________.

A. contend with dwindling customer bases

B. aggressively pursue market expansion and diversification strategies

C. aggressively pursue take over strategies

D. aggressively “squeeze” manufacturer margins

E. dominant the manufacturers they do business with


15) “Power prices” use price as a key strategic tool. These “power prices” have discovered the highly
________ effect of price on the bottom line.
A. dramatic

B. soothing

C. leveraged

D. abrasive

E. direct

16) Price has operated as the major determinant of buyer choice among poorer nations, among poorer
groups, and with ________ products.
A. identical

B. commodity-type

C. over the Internet

D. similar

17) Marketing communications can contribute to brand equity by establishing the brand in memory
and to________ (in)a brand image.
A. create interest

B. craft

C. communicate

D. create demand

18) A company can add new products through acquisition or development. The acquisition route can take three forms. The company can buy other companies, it can acquire patents from other companies, or it can buy a ________ or _________ from another company.
A. license/franchise

B. franchise/acquire rights

C. license/receive permission

D. franchise/co-brand


19) Following the ________ approach to target market selection encompasses a strong
 knowledge of the segment’s needs, a strong market presence, and operating economies through specializing in production, distribution, and promotion.

A. single-segment concentration

B. full market coverage

C. product specialization

D. selective specialization

E. market specialization

20) The marketing communications mix consists of six major modes of communications. Which of the following is NOT one of these modes?
A. Personal selling

B. Advertising

C. Sales promotions

D. Direct marketing

E. Packaging

21) To reach Generation Y, rock band Foo Fighters created a digital street team that sends targeted e-mail messages to members who “get the latest news, exclusive audio/video sneak previews, tons of chances to win great Foo Fighters prizes, and become part of the Foo Fighters Family.” Which of the following techniques for reaching Generation Y are the Foo Fighters using?

A. Student ambassadors

B. Online buzz

C. Cool events

D. Unconventional sports

E. Computer games

22) The chief disadvantage to a firm that decides to follow a product specialization strategy in selecting
target markets is ________.
A. no synergy exists

B. e-commerce becomes difficult for the company

C. the product may be supplanted by an entirely new technology

D. logistics can become a nightmare

E. competitors can easily copy any new product introductions

23) Major retailer types include the following EXCEPT ________.

A. specialty store

B. superstore

C. catalog showroom

D. discount store

E. the Internet

61) Dimensions of risk include __________.
A. uncertainty about yesterday’s outcome

B. the certainty of a negative outcome

C. the impossibility of the same return

D. uncertainty about the future outcome

62) You do a study and find out that, on average, stock prices for firms decrease 3% for every 5% decrease in inside ownership. You are watching the nightly business report and find out that Magic Tape’s stock has announced that insiders have sold 10% of their holdings. You are concerned because you own 1,000 shares of Magic Tape and it had closed the day before unchanged at $30 per share. If markets are at least semi-strong form efficient, what would you expect?

A. You would lose $2.00 per share

B. You would lose $4,000.

C. You would lose $1,800.

D. You would expect Magic Tape to close at $28 the day of the announcement.

63) Which of the following is not an advantage of going public?

A. Going public achieves liquidity and diversification for current shareholders

B. Going public gives existing shareholders a chance to sell portions of their shares as part of the IPO giving
 them a cash return on their investment and allows them to diversify their investment portfolios.

C. Going public generally brings a lower price in the public market than in the venture capital or
private placement markets.

D. Going public enables a firm to raise additional capital.

64) Which of the following is (are) true?

A. The Principle of Capital Market Efficiency states that differences between financial assets are measured
primarily in terms of risk and return. Investors choose the highest return for a given risk level.

B. The Principle of Comparative Advantage states that people apply the Principles of Self-Interested
Behavior, Two-Sided Transactions, and Signaling to an environment characterized by similar financial
assets, low transaction costs, and intense competition leads to capital market efficiency.

C. The Principle of Valuable Ideas states that new ideas can provide value when first introduced, even in an
efficient capital market.

D. all of these answers are correct.

65) Transfer prices are _____.

A. costs of the segment producing the product or service

B. revenues of the segment acquiring the product or service

C. revenues of the segment producing the product or service

D. none of these answers is correct

66) It costs Garner Company $12 of variable and $5 of fixed costs to produce one bathroom scale which normally sells for $35. A foreign wholesaler offers to purchase 2,000 scales at $15 each. Garner would incur special shipping costs of $1 per scale if the order were accepted. Garner has sufficient unused capacity to produce the 2,000 scales. If the special order is accepted, what will be the effect on net income?
A. $30,000 increase

B. $4,000 decrease

C. $6,000 decrease

D. $4,000 increase

7) Joint products should be processed beyond the split-off point if _____.
A. incremental expenses exceed incremental revenues

B. sale of the product is guaranteed

C. additional net revenue exceeds the sales value at split-off

D. there is a market for the joint products

68) Incremental analysis would not be appropriate for

A. Analysis of manufacturing variances

B. an allocation of limited resource decision.

C. elimination of an unprofitable segment.

D. a make or buy decision.

69) Which one of the following characteristics would likely be associated with a just-in-time inventory method?

A. An understanding with customers that they may come to the showroom and select from inventory on hand.

B. A backlog of inventory orders not yet shipped.

C. Minimal finished goods inventory on hand.

D. Ending inventory of work in process that would allow several production runs.

70) _____ is an important factor considered by sales forecasters.

A. All of these answers are correct

B. Estimates made by the sales force

C. General economic conditions

D. Past patterns of sales

71) The financing section of a cash budget is needed if there is a cash deficiency or if the ending
cash balance is less than:
A. the industry average.

B. the prior years.

C. the amount needed to avoid a service charge at the bank.

D. management's minimum required balance.


72) A _____ gives the expected sales under a given set of conditions.
A. sales forecast

B. sales prediction

C. budget forecast

D. sales budget


73) Which of the following does not appear as a separate section on the cash budget?
A. Financing

B. Cash receipts

C. Capital expenditures

D. Cash disbursements


74) A variable cost is a cost that
A. may or may not be incurred, depending on management's discretion.

B. varies per unit at every level of activity.

C. varies in total in proportion to changes in the level of activity.

D. occurs at various times during the year.

75) A company requires $1,020,000 in sales to meet its net income target. Its contribution margin is 30%, and fixed costs are $180,000. What is the target net income?

A. $126,000.

B. $306,000.

C. $420,000.

D. $234,000.

76) For an activity base to be useful in cost behavior analysis,

A. the activity level should be constant over a period of time.

B. the activity should always be stated in dollars.

C. the activity should always be stated in terms of units.

D. there should be a correlation between changes in the level of activity and changes in costs.

78) A well-designed activity-based costing system starts with
A. analyzing the activities performed to manufacture a product.

B. identifying the activity-cost pools.

C. assigning manufacturing overhead costs for each activity cost pool to products.

D. computing the activity-based overhead rate.

79) An absorption-costing income statement separates cost into the major categories of_____.
A. all of these answers are correct

B. inventoriable and noninventoriable

C. product and period

D. manufacturing and nonmanufacturing

80) _____ costs relate to more than one product and cannot be separately identified with an individual product
A. Allocable

B. Joint

C. Bundle

D. Common

81) Identify which statement about "currently attainable standards" is NOT true.
A. Employees usually view these goals as reasonable.

B. They represent projections of what will probably be attained.

C. Because they allow for waste, they usually result in favorable variances.

D. They allow for normal spoilage and nonproductive time.

82) The proprietorship form of business organization
A. is classified as a separate legal entity.

B. combines the records of the business with the personal records of the owner.

C. generally receives favorable tax treatment relative to a corporation.

D. must have at least two owners in most states.

83) _____ are profitability ratios.
A. Price earnings and current ratio

B. Earnings per share and dividend yield

C. Dividend payout and rate of return in invested capital

D. Gross profit rate and return on sales

84) Which of the following statements is incorrect with respect to creditors and equity investors?
A. Equity investors are concerned about dividend payments.

B. Creditors are concerned with assessing the long term solvency of a company.

C. Creditors are concerned with assessing the short term liquidity of a company.

D. Both creditors  and equity investors are concerned about security prices.

85) A local retail shop has been operating as a sole proprietorship. The business is growing and now the owner wants to incorporate. Which of the following is not a reason for this owner to incorporate?
A. the ease in transferring shares of the corporation’s stock

B. the prestige of operating as a corporation

C. desire to limit the owner’s personal liability

D. ability to raise capital for expansion

86) Diversity training programs are generally intended to provide a vehicle for _____.
A. socializing otherwise unmanageable employees

B. balancing work/life conflicts

C. eliminating group learning

D. increasing awareness and examining stereotypes

E. focusing on individual differences

87) Although the U.S. has had a longstanding agreement with ___________, after the passage of NAFTA, _________ became the United States' second largest trading partner.

A. Canada, Venezuela

B. Canada, Mexico

C. Mexico, Canada

D. Mexico, Venezuela

E. Great Britain, Paraguay

88) One study found that manufacturing labor costs about ___ an hour in China, compared to ____ dollars in the United States.

A. Less than $1; about 40

B. $2; about 25

C. Less than $1; about 25

D. Less than $1; about 15

E. About $2; about 15

90) Which of the following is not one of the Caux Round Table Principles for International Business?
A. Responsibility of Business Beyond Shareholders Toward Stakeholders.

B. Promotion of Multiculturalism.

C. Support for Multilateral Trade.

D. Respect for the Environment.

E. Avoidance of Illicit Operations.

91) Which article of the United States Constitution deals with the judicial power of the federal government?
A. Article V.

B. Article III.

C. Article II.

D. Article IV.

E. Article I.

92) Which of the following is correct about litigating commercial disputes?

A. In all states, commercial disputes must be heard in a limited-jurisdiction court.

B. A few states have established specialized trial courts for commercial disputes.

C. Commercial disputes, because of their specialized nature, are first heard at the appellate court level.

D. Businesses generally dislike the concept of specialized trail courts for commercial disputes because the large numbers of consumers who sue businesses in these courts have led the judges to become generally biased against business.

E. Nearly all states have specialized trial courts that hear commercial disputes.


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    STR 581 Multiple Choice Questions Answers

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