Part A: Answer each of the following questions. Be sure to show all of your work and calculations.

1) 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. customer feedback systems B. external networks C. advisory panels D. intermediaries E. sales force surrogates

2) 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. Lower prices B. Manage customer experiences C. Lower expectations D. Spend more money E. Develop marketing campaigns

3) 3M, Hewlett-Packard, Lego, and other companies use the ________ to manage the innovation process. A. skunk works B. new product “team” C. venture team D. joint- venture system E. stage-gate system

4) ________ 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 database B. A marketing intelligence system C. A promotional campaign D. A marketing research system E. A marketing information system

5) A ________ is a set of procedures and sources managers use to obtain everyday information about developments in the marketing environment. A. vertical system B. product management system C. marketing intelligence system D. marketing information system E. marketing research system

6) Most established companies focus on ________ when it comes to innovation. A. competitive innovation B. everyday innovation C. demand innovation D. continuous innovation E. incremental innovation

7) ________ 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. Competitors market share rate B. Report rating C. Customer perceived value D. Failure avoidance rate E. Perceived usefulness

8) A firm has to consider many factors in setting its pricing policy. We list these as a six-step process. Which of the following is NOT one of these steps? A. Selecting a pricing method. B. Researching reference prices in the target market. C. Selecting the final price. D. Selecting the pricing objective. E. Determining demand.

9) Marketers usually identify niches by ________. A. producing products that can be used in a variety of ways B. allowing consumers to gravitate toward product brands C. examining the demographics section of The Handbook of Marketing D. conducting VALS tests E. dividing a segment into subsegments

10) 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. bought infrequently B. priced low to begin with C. low-cost D. bought frequently

 

 

11) Which of the following is generally considered to be the last step in the marketing research process? A. Draft the report B. Present the findings. C. Analyze the information. D. Control the environment. E. Make the decision.

12) The following are considered to be advantages of online research EXCEPT ________. A. people tend to be more honest online than in other interviewing methods B. online research is inexpensive C. online research is faster D. online research is relatively free of technological problems and inconsistencies E. online research is more versatile

13) Coca-Cola’s failure in promoting New Coke was largely due to a marketing research barrier identified as ________. A. personality and presentation differences B. a narrow conception of the research C. uneven caliber of researchers D. poor framing of the problem E. late and occasional erroneous findings

 

14) The chief disadvantage to a firm that decides to follow a product specialization strategy in selecting target markets is ________. A. e-commerce becomes difficult for the company B. no synergy exists C. logistics can become a nightmare D. the product may be supplanted by an entirely new technology E. competitors can easily copy any new product introductions

15) The marketing communications mix consists of six major modes of communications. Which of the following is NOT one of these modes? A. Advertising B. Personal selling C. Direct marketing D. Sales promotions E. Packaging

16) New-to-the- world products are ________. A. existing products that are targeted to new markets or market segments B. new products that create an entirely new market C. new products that allow a company to enter an established market for the first time D. new products that supplement established product lines (package sizes, flavors, and so on) E. new products that provide improved performance or greater perceived value and replace existing products

17) Marketing communications can contribute to brand equity by establishing the brand in memory and to________ (in)a brand image. A. craft B. create interest C. communicate D. create demand

18) ________ communicates a company’s intended value positioning of its product or brand to the market. A. Physical evidence B. Packaging C. Price D. Place E. Promotion

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. full market coverage B. single-segment concentration C. selective specialization D. product specialization E. market specialization

20) Price has operated as the major determinant of buyer choice among poorer nations, among poorer groups, and with ________ products. A. commodity-type B. identical C. over the Internet D. similar

21) Major retailer types include the following EXCEPT ________.   A. superstore B. specialty store C. discount store D. catalog showroom E. the Internet

22) “Power prices” use price as a key strategic tool. These “power prices” have discovered the highly ________ effect of price on the bottom line. A. soothing B. dramatic C. abrasive D. leveraged E. direct

23) 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. aggressively pursue market expansion and diversification strategies B. aggressively “squeeze” manufacturer margins C. contend with dwindling customer bases D. dominant the manufacturers they do business with E. aggressively pursue take over strategies

24) Which of the following is NOT included in the definition of conflict? A. negative effects B. disruption of tasks C. perception D. something that is cared about

25) _____ bargaining is negotiation that seeks to divide a “fixed pie.” A. Conjunctive B. Integrative C. Distributive D. Affective E. Reflective

26) The traditional view of conflict is the belief that conflict is _____. A. neutral B. natural C. harmful D. situationally-dependent E. necessary

27) Negotiation can be defined as a process in which two or more parties exchange goods or services and attempt to agree upon _____. A. the monetary value of the exchanged items B. acceptable bargaining strategies for obtaining the goods and services C. the exchange rate for those goods and services D. effective arbitrators for disputes E. a model of the negotiation process for resolving differences

28) Which level of Maslow’s hierarchy of needs deals with satisfying one’s hunger, thirst, and need for sex? A. psychological B. physiological C. safety D. esteem E. social

29) Which of the following statements best defines a work group?   A. A work group is a group comprised of 10 or more people B. A work group interacts primarily to share information, rather than to engage in work that requires joint effort. C. The performance of a work group is generally greater than the sum of its inputs from individual members. D. A work group consists of 3 or more people from across departmental or functional lines. E. A work group consists of 3 or more people who take on self-supervising responsibilities.

30) Which of the following statements about leadership is true?   A. Nonsanctioned leadership is as important as or more important than formal influence. B. Formal rights enable managers to lead effectively. C. leaders are managers. D. leaders are hierarchically superior to followers. E. managers are leaders.

 

31) Training employees how to be better listeners falls under which of the following training categories? A. cultural skills B. technical skills C. ethical skills D. interpersonal skills E. problem-solving skills

32) Between the late 1960s and the mid-1980s, the use of written tests declined because they were characterized as _____. A. mathematically flawed B. discriminatory C. unprofessional D. invalid E. unreliable

33) Which of the following is NOT a typical written test used in organizations? A. work sample B. integrity C. intelligence D. aptitude E. personality

34) Which of the following has proven to be a particularly good predictor for jobs that require cognitive complexity? A. behavioral assessment B. integrity evaluations C. intelligence tests D. aptitude tests E. work sampling

35) Which type of skill training has become increasingly important in organizations? A. social B. technical C. financial D. interpersonal E. problem solving

36) Phrases such as “more cultural diversity,” “many new entrants with inadequate skills,” and “increase in aging workers” are all examples of what force for change? A. competition B. world politics C. technology D. social trends E. nature of the work force

37) Organizational structure has six key elements. Which of the following is not one of these elements? A. location of authority B. departmentalization C. centralization D. formalization E. work specialization

38) Whenever Jane is successful she takes full credit for what has happened, but whenever she is unsuccessful she attributes her failure to bad luck or blames one of her fellow employees. She is guilty of _____. A. self-serving bias B. the halo effect C. fundamental attribution error D. attribution bias E. distinctiveness

39) What term is used for the tendency of an individual to attribute his own successes to internal factors while putting the blame for failures on external factors? A. stereotyping B. consistency C. fundamental attribution error D. self-serving bias E. selective perception

40) The “realistic” personality from Holland’s typology of personality and congruent occupations would be well suited for which of the following jobs? A. biologist B. mechanic C. painter D. accountant E. lawyer

41) Under exponential smoothing, if we want our forecast to be responsive to recent demand, the value of alpha should be: A. zero B. moderate C. large D. small

42) Which of the following statements are true about time-series forecasting? A. Time series methods are useful for long-range forecasts when the demand pattern is erratic B. Under time-series methods, demand is divided into the time-based components such as daily, weekly, etc. C. Time series analysis is based on the idea that the history of occurrences over time can be used to predict the future. D. Time series analysis tries to understand the system underlying and surrounding the item being forecast.

43) Which of the following would NOT be classified as a time-series technique? A. trend projections B. box Jenkins technique C. simple moving average D. exponential smoothing E. regression model

44) The phenomenon of magnification of demand variability as we move from the customer to the producer in the supply-chain is referred to as the: A. Just-in-time approach B. bullwhip effect C. postponement effect D. Elasticity of demand E. price deflator

45) If the system contains a bottleneck, the _______ is the best place for control. If there is no bottleneck, the __________ is the best place for control. A. none of these answers B. bottleneck, capacity constrained resource C. capacity-constrained resource, bottleneck D. capacity-constrained resource, drum

46) A checking account is __________. A. a place to “collect” money between inflows and outflows B. an account that acts like a reservoir C. useful because you can add money in any amount D. all of these

47) Due to asymmetric information, the market fears that a firm issuing securities will do so when the stock is _________. A. being sold by insiders B. caught up in a bear market C. undervalued D. overvalued

48) __________ says to look for opportunities to invest in positive-NPV projects in foreign markets or to develop derivatives or design arrangements that enable firms to cope better with the risks they face in their foreign operations. A. The Principle of Valuable Ideas B. The Principle of Capital Market Efficiency C. The Principle of Risk-Return Trade-off D. The Principle of Diversification

49) __________ says to seek out investments that offer the greatest expected risk-adjusted real return. A. The Principle of Valuable Ideas B. The Principle of Self-Interested Behavior C. The Principle of Incremental Benefits D. The Signaling Principle

50) Which of the following statements is true? A. The Principle of Capital Market Efficiency says to consider the possible ways to minimize the value lost to capital market imperfections, such as asymmetric taxes, asymmetric information, and transaction costs. B. The Behavioral Principle suggests to look for opportunities to create value by issuing securities that are in short supply, perhaps resulting from changes in tax law. C. The Signaling Principle says to consider any possible change in capital structure carefully, because financing transactions and capital structure changes convey information to outsiders and can be misunderstood. D. all of these

51) An all-equity-financed firm would __________. A. pay corporate income taxes if its taxable income is positive B. not pay corporate income taxes because it would have no interest expense. C. not pay any income taxes because interest would exactly offset its taxable income. D. pay corporate income taxes because it would have interest expense.

52) An investor's risky portfolio is made up of individual stocks. Which of the following statements about this portfolio is true? A. Each stock in the portfolio will have a beta greater than one. B. An investor cannot change the risk of this portfolio by her choice about personal leverage (lending or borrowing). C. Each stock in the portfolio has its own beta. D. Selling any stock in this portfolio will lower the beta of the portfolio.

53) __________ says to recognize the value of hidden options in a situation, such as the foreign exchange options in some derivative instruments. A. The Options Principle B. The Principle of Comparative Advantage C. The Principle of Two-Sided Transactions D. The Time Value of Money Principle

54) “Hard” capital rationing refers to the rationing __________. A. imposed by external factors B. imposed internally by the shareholders C. always imposed by competitors D. always imposed by debt holders

55) Under capital rationing, given the choice among several equally attractive investments, the best tool to use is the __________. A. Internal Rate of Return method B. Payback method C. Profitability Index method D. Net Present Value method

56) According to the Principle of Risk-Return Trade-Off, investors require a higher return to compensate for __________. A. lack of diversification B. diversification C. less risk D. greater risk

57) The conversion price (for a convertible security) is usually adjusted __________. A. for a new debt offering. B. for stock splits. C. for cash dividends. D. all of these

58) Which of these investments would you expect to have the highest rate of return for the next 20 years? A. U.S. Treasury bills B. long-term corporate bonds C. intermediate-term U.S. government bonds D. anybody’s guess

59) The financing decision best addresses which of the following questions? A. Should we buy this piece of land? B. Should we issue common stock or convertible debt? C. Should we increase our inventory? D. Should we give employees stock options?

60) __________ says to recognize the value of options contained in derivatives. A. The Principle of Valuable Ideas B. The Capital Market Efficiency Principle C. The Options Principle D. The Principle of Comparative Advantage

61) __________ says to use derivatives to pay others to take risks. A. The Principle of Two-Sided Transactions B. The Signaling Principle C. The Principle of the Time Value of Money D. The Principle of Self-Interested Behavior

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 expect Magic Tape to close at $28 the day of the announcement. B. You would lose $4,000. C. You would lose $1,800. D. You would lose $2.00 per share

63) Which of the following is not an advantage of going public? A. Going public makes the common stock negotiable and creates a visible market value. B. Going public makes securities worth more because of their decreased liquidity. C. Going public increase the firm's equity financing flexibility. D. Going public makes it easier for a firm to acquire other firms in exchange for shares of its stock.

64) You work for ABC, Inc. in the finance department. You own shares in ABC, Inc. that are selling at $20 per share on the NYSE. You just found out they will have a new stock offering. You just found out they will publicly announce a new stock offering. The costs from the offering will be 10% of the new offering. The new offering will increase the number of outstanding share by 30%. There are currently 20,000,000 shares of ABC outstanding. Once the announcement is made public, what might be the expected impact from transaction (or issuance) costs on each share you own? A. There will be no costs because markets are perfect when it comes to new stock offerings. B. There will be no costs because there is no information asymmetry present. C. You will lose 2% of the value of the shares you own. D. You will lose 3% of the value of the share you own.

65) For what purpose is the theory of constraints used? A. To reduce product defects. B. To balance performance measurement. C. To identify and manage constraints that bottle-neck operations. D. To reduce inventory levels

66) Which one of the following managerial accounting approaches attempts to allocate manufacturing overhead in a more meaningful fashion? A. Theory of constraints. B. Just-in-time inventory. C. Activity-based costing. D. Total-quality management

67) 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

68) 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. $4,000 increase B. $4,000 decrease C. $6,000 decrease D. $30,000 increase

69) Incremental analysis would be appropriate for A. acceptance of an order at a special price. B. a retain or replace equipment decision. C. a sell or process further decision. D. all of the answers are correct.

70) Important factors considered by sales forecasters include all of the following except _____. A. past patterns of sales B. competitors’ activities C. the desired level of sales D. marketing research studies

71) Which of the following does not appear as a separate section on the cash budget? A. Cash receipts B. Capital expenditures C. Financing D. Cash disbursements

72) Effectiveness is indicated by _____. A. sales-activity variances B. flexible-budget variances C. all of these answers are correct D. static-budget variances

73) _____ is an important factor considered by sales forecasters. A. Past patterns of sales B. General economic conditions C. All of these answers are correct D. Estimates made by the sales force

74) For an activity base to be useful in cost behavior analysis, A. the activity should always be stated in dollars. B. the activity should always be stated in terms of units. C. the activity level should be constant over a period of time. D. there should be a correlation between changes in the level of activity and changes in costs.

75) How much sales are required to earn a target net income of $128,000 if total fixed costs are $160,000 and the contribution margin ratio is 40%? A. $400,000. B. $720,000. C. $320,000. D. $648,000.

76) A cost which remains constant per unit at various levels of activity is a A. variable cost. B. mixed cost. C. manufacturing cost. D. fixed cost.

77) At the break-even point of 2,000 units, variable costs are $55,000, and fixed costs are $32,000. How much is the selling price per unit? A. $43.50. B. $16.00. C. Not enough information D. $11.50.

78) A well-designed activity-based costing system starts with A. identifying the activity-cost pools. B. assigning manufacturing overhead costs for each activity cost pool to products. C. analyzing the activities performed to manufacture a product. D. computing the activity-based overhead rate.

79) Identify which of the following statements about "perfection standards" is true. A. It is generally believed that they have a negative influence on employee morale. B. They usually result in unfavorable variances. C. All of these answers are correct D. They are expressions of the most efficient performance possible.

80) The first step in activity-based costing is to A. assign manufacturing overhead costs for each activity cost pool to products. B. compute the activity-based overhead rate per cost driver. C. identify and classify the major activities involved in the manufacture of specific products. D. identify the cost driver that has a strong correlation to the activity cost pool.

81) A by-product _____. A. is individually identifiable before the split-off point B. has relatively insignificant total sales value C. receives a portion of allocated separable costs D. is treated like a joint product

82) 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. ability to raise capital for expansion B. the prestige of operating as a corporation C. the ease in transferring shares of the corporation’s stock D. desire to limit the owner’s personal liability

83) Identify which one of the following statements is false. A. Owners’ equity solely represents the profits made by an organization in the current period. B. Assets must always equal the sum of liabilities and owners’ equity. C. Liabilities are economic obligations or claims against the assets of an organization by outsiders. D. Assets are economic resources that are expected to benefit future cash inflows or reduce future cash outflows.

84) Jack and Jill form a partnership. Jack runs the business in New York, while Jill vacations in Hawaii. During the time Jill is away from the business, Jack increases the debts of the business by $20,000. Which of the following statements is true regarding this debt? A. Only Jack is personally liable for the debt, since he has been the managing partner during that time. B. Neither Jack nor Jill is personally liable for the business debt, since the partnership is a separate legal entity. C. Both Jack and Jill are personally liable for the business debt. D. Only Jill is personally liable for the debt of the business, since Jack has been working and she has not.

85) The _____ is also called the statement of financial position. A. income statement B. statement of cash flow C. statement of retained earnings D. balance sheet

86) Which social responsibility theory has been advocated by Novel Prizewinning economist Milton Friedman? A. Maximizing profits B. Corporate citizenship C. Stakeholder interest D. Corporate social audit E. Moral minimum

87) One study found that manufacturing labor costs about ___ an hour in China, compared to ____ dollars in the United States. A. Less than $1; about 15 B. $2; about 25 C. Less than $1; about 25 D. Less than $1; about 40 E. About $2; about 15

88) Diversity training programs are generally intended to provide a vehicle for _____. A. increasing awareness and examining stereotypes B. balancing work/life conflicts C. eliminating group learning D. socializing otherwise unmanageable employees E. focusing on individual differences

89) Which country does the text describe as becoming the largest producer and consumer of many of the world's goods? A. Japan B. China C. Mexico D. Ecuador E. Canada

90) 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

91) Which article of the United States Constitution deals with the judicial power of the federal government? A. Article I. B. Article IV. C. Article III. D. Article V. E. Article II.

92) Which of the following is correct about litigating commercial disputes? A. Nearly all states have specialized trial courts that hear commercial disputes. B. 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. C. A few states have established specialized trial courts for commercial disputes. D. In all states, commercial disputes must be heard in a limited-jurisdiction court. E. Commercial disputes, because of their specialized nature, are first heard at the appellate court level.

93) When movie ticket prices increase, families tend to spend less time watching movies and more time at home watching videos instead. This best reflects: A. diminishing marginal utility. B. the substitution effect. C. the rationing function of markets. D. the income effect.

94) If consumer incomes increase, the demand for product Y will _____________. A. necessarily remain unchanged B. shift to the right if Y is a normal good C. shift to the right if Y is a complementary good

95) The force behind globalization in _____ was the amount of muscle, horsepower, wind power, or steam power that a country could deploy. A. Globalization 1.0 B. None of these C. Globalization 3.0 D. Globalization 2.0

96) _____ is the integration of economic, social, cultural, and ecological facets of life, enabled by information technologies. A. regionalization B. business environment C. globalization D. nationalization

97) The costs of delivering products in the _____ channel are much higher than delivering products in the _____ channel. A. e-commerce, digital B. digital, e-commerce C. physical, digital D. digital, physical E. physical, financial

98) Which of the following statements is true concerning the applicability of attitudes in understanding behavior? A. General attitudes are the best predictors of behavior B. Behavior is affected equally by those attitudes formed via social learning and those formed via behavioral learning C. A single, global measure of attitude is necessary to predict behavior D. Cognitive attitudes influence behavior better than affective-based attitudes

99) Which source of evidence to support experimental results is most threatened by the use of a field experiment? A. Agreement between the IV and DV B. Time order of the occurrence of the variables C. Manipulation of the IV D. Control of contamination from extraneous variables E. Use of a control group

100) A ________ has been defined as being a coordinated collection of data, systems, tools, and techniques with supporting software and hardware by which an organization gathers and interprets relevant information from business and environment and turns it into a basis for marketing action. A. marketing information system B. marketing intelligence system C. database management system D. marketing decision support system E. marketing research system