Here are some multiple choice questions, which should help you test your marketing abilities. Click on the appropriate letter to see whether you have the correct answers. Explanations of the answers appear as well.

Good luck!

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1.    A channel of distribution

    a)    is only needed when products must be stored.
    b)    must include one or more middlemen.
    c)    is any series of firms or individuals who participate in the flow of goods and services from  producer to consumer or final user.
    d)    helps create possession utility but not time utility.
    e)    both a) and c).

2.    Choosing an indirect channel probably will be better than a direct channel if a producer wants to:

    a)    obtain a very aggressive selling effort.
    b)    adjust large discrepancies of quantity and assortment.
    c)    be more sensitive to coming changes in customer needs and attitudes.
    d)    provide special technical service.
    e)    make it easier to do marketing research.

3.    Channels of distribution

    a)    usually require longer-term planning than other marketing mix elements because channel decisions are more difficult to change quickly.
    b)    that include middlemen result in higher distribution costs than for channels without middlemen.
    c)    usually do not involve conflicts as long as each channel member has profit as a goal.
    d)    should be designed to increase discrepancies of quantity between producers and consumers.
    e)    none of the above.

4.    When planning channels of distribution, a marketing manager should know that

    a)    vertically integrated systems are seldom used, because of the difficulty of maintaining control.
    b)    a contractual system offers both flexibility and stability for its members.
    c)    the disadvantage of a corporate channel is reduced control over the distribution activities.
    d)    all of the above.
    e)    none of the above.

5.    Which of the following statements about ideal market exposure is true?

    a)    It is necessary to get almost 100 percent market exposure to justify national promotion.
    b)    As a firm goes from exclusive to intensive distribution, it loses progressively more control over price and service offered by retailers.
    c)    Intensive distribution means trying to sell through all retail stores.
    d)    A producer usually should seek maximum market exposure.
    e)    All of the above are true.

6.    A car company sent three automobile magazines some technical information and explanation about the features of its innovative new model.  One of the magazines later printed a story about the car. This is an example of:

    a)    publicity.
    b)    sales promotion.
    c)    personal selling.
    d)    advertising.
    e)    sponsorship.

7.    When a firm uses promotion, its basic objective is to:

    a)    make its demand curve more inelastic.
    b)    shift its demand curve to the right.
    c)    make its demand curve more elastic.
    d)    shift its demand curve to the left.
    e)    both a) and b).

8.    Office Distributing Co. sells frequently purchased office supplies to businesses in a metropolitan area. It is a well established company with a large share of the market. Its promotion should probably focus on

    a)    informing.
    b)    innovators.
    c)    making the demand curve less elastic.
    d)    reminding.
    e)    stimulating primary demand.

9.    Poor communication is likely if:

    a)    the encoder and the decoder are not the same person.
    b)    immediate feedback is not possible.
    c)    the source and the receiver don't have personal contact.
    d)    there is no "noise" in the message channel.
    e)    the source and the receiver do not have a common frame of reference.

10.    The AIDA model consists of four promotion tasks:

    a)    getting Attention, holding Interest, creating Demand, and obtaining Action.
    b)    getting Attention, holding Interest, arousing Desire, and obtaining Action.
    c)    becoming Aware, holding Interest, arousing Desire, and obtaining Action.
    d)    getting Attention, building Intrigue, arousing Desire, and obtaining Action.
    e)    becoming Aware, holding Interest, arousing Desire, and providing Assistance.

11.    A producer using normal promotion efforts - personal selling, sales promotion, and advertising - to help sell a whole marketing mix to possible channel members, has:

    a)    an intensive distribution policy.
    b)    a pushing policy.
    c)    a pulling policy.
    d)    a selective distribution policy.
    e)    a target marketing policy.

12.    In promotion to business customers, personal selling is often the dominant promotion method, because

    a)    purchases are typically large and thus justify the effort.
    b)    buyers are more likely to have technical questions.
    c)    there are fewer business customers than final consumers.
    d)    the sales message may need to be adjusted to the needs of different people in the firm.
    e)    all of the above.

13.    Regarding product life cycles and promotion:

    a)    persuading becomes important in the market growth stage.
    b)    in market maturity, more competitors enter the market and the promotion emphasis must now shift to building selective demand for the firm's own brand.
    c)    during market introduction, the basic promotion objective is to remind.
    d)    in sales decline, the amount spent on promotion usually increases as firms use reminder promotion to increase demand.
    e)    all of the above are true.

14.    Spiro Corp. has found that an effective salesperson should call on each account about six times a year and spend about two hours per sales call. Every salesperson works a 40-hour week and takes off two weeks for vacation each year. A salesperson must spend half of his time on travel and administration. Approximately how many salespeople does Spiro need to service 500 accounts?

    a)    2
    b)    6
    c)    12
    d)    30
    e)    There is not enough information to determine the answer.

15.    Regarding sales force payment methods:

    a)    straight commission offers the most incentive for the salesperson.
    b)    straight salary provides the most security for the salesperson and control for the sales manager.
    c)    it is common to sacrifice some simplicity to gain more flexibility, incentive, or control.
    d)    combination plans offer some degree of security, incentive, and control.
    e)    all of the above are true.

16.    A lawn care firm selling by phone to people listed in the telephone directory should use which of the following sales presentations.

    a)    prepared sales presentation.
    b)    target market presentation.
    c)    consultative selling approach.
    d)    selling formula approach.
    e)    target marketing.

17.    Which of the following is the best example of an advertising objective?

    a)     "We want to increase profits, and that will require significantly expanding sales of our product."
    b)    "We want to win an advertising industry artistic award for the creative effort on the ad."
    c)    "We want to make older consumers aware of our product, since they have the greatest need."
    d)    "We want 35 percent of our target customers to be aware of our new product within the next two months."
    e)    "We want to generate enough interest in our product that middlemen will be willing to stock it."

18.    A producer of country music CDs pays a share of local retailers' costs to get them to promote its new releases. This is an example of:

    a)    co-operative advertising.
    b)    selective advertising.
    c)    comparative advertising.
    d)    pioneering advertising.
    e)    institutional advertising.

19.    "Advertising agencies"

    a)     do little more than sell media time or space to advertisers.
    b)    are specialists in planning and handling mass selling details.
    c)    compete against the national media for the business of big advertisers.
    d)    usually require advertisers to sign long-term contracts.
    e)    prefer to work with local advertisers rather than national advertisers.

20.    Regarding pricing objectives, a good marketing manager knows that:

    a)    target return objectives usually lead to a large profit.
    b)    status quo pricing objectives can be part of an extremely aggressive marketing strategy.
    c)    sales-oriented objectives usually lead to high profits.
    d)    profit maximization objectives don't always mean high prices.
    e)    both b) and d).

21.    Which pricing policy is probably "best" for a profit-oriented, low-cost producer who is introducing a new product in a market with elastic demand and is expecting strong competition very soon after product introduction?

    a)    penetration pricing.
    b)    status-quo pricing.
    c)    meeting competition pricing.
    d)    skimming pricing.
    e)    introductory price dealing.

22.    When setting a price level policy, a good marketing manager knows that:

    a)    she can easily raise prices if its initial price is too low.
    b)    there may be little pricing choice in markets which are close to pure competition.
    c)    a "skimming" price may lead to low profits if demand is very elastic.
    d)    introductory price dealing usually does not increase sales.
    e)    a penetration price makes the most sense when there is a large "elite" market.

23.    Regarding price-level policies:

    a)     charging a lower price than competitors may not mean that a firm is selling «below the market».
    b)    meeting competition is the only sensible policy in monopolistic competition.
    c)    a firm in pure competition may increase profit by pricing «below the market».
    d)    in an oligopoly situation, pricing «above the market» usually leads to an increase in profits.
    e)    all of the above are true.

24.    A «penetration pricing policy»:

    a)    involves a series of step-by-step price reductions along an inelastic demand curve.
    b)    may be wise if a firm expects strong competition very soon after its product introduction.
    c)   involves temporary price cuts to speed new products into market.
    d)    is the same as a «meeting competition» price-level policy.
    e)    is wise when demand is fairly inelastic, offering an «elite» market.

25.    Ideally, the ingredients of a good marketing mix should:

    a)    be determined by which ingredients cost the least.
    b)    not include much advertising because it's expensive.
    c)    flow logically from all the relevant dimensions of a target market.
    d)    match the ingredients typically used by key competitors.
    e)    all of the above are true.

26.    Toshiba has developed a really new consumer electronics item - a heterogeneous shopping product with unique patented features. It probably should use a marketing mix of:

    a)    selective distribution, skimming pricing, pioneering advertising, and a «push» policy.
    b)    selective distribution, penetration pricing, persuasive adverting, and a «pull» policy.
    c)    intensive distribution, persuasive advertising, price dealing, and a «push» policy.
    d)    exclusive distribution, price cutting, reminder advertising, and a «push» policy.
    e)    exclusive distribution, penetration pricing, informative and persuasive advertising, and a «pull» policy.

27.    Which of the following statements illustrates the 80/20 rule?

    a)    «20 percent of our marketing effort is wasted, but we don't know which one».
    b)    «We don't know whether our profits are 20 percent higher than we deserve or only 80 percent of what might be easily obtained».
    c)    «80 percent of our target market doesn't respond to our marketing mix, and we only have a 20 percent market share».
    d)    «Of the hundred retailers who carry our products, the top twenty account for nearly 80 percent of our total business.»
    e)    None of the above.

28.    When involved in the control process, the marketing manager should view company profit

    a)    as the test of whether or not the marketing mix is successful.
    b)    as a gross index of performance that should be further broken down into smaller components.
    c)    as a guide to future operations.
    d)    all of the above are true.
    e)     none of the above are true.

29.    General summaries and overall marketing cost data

    a)     should not be too detailed, since detailed analysis requires allocating costs that are actually fixed.
    b)    are usually enough to reveal areas where changes are needed.
    c)    may hide problems rather than highlight them.
    d)    are usually the key to identifying how to improve the marketing plan.
    e)    all of the above are true.

30.    Marketing cost analysis shows that one of Buildco. Inc's customers is unprofitable, so Buildco should:

    a)    drop the customer and shift all fixed costs to the other customers.
    b)    assign a new salesperson to that account.
    c)    immediately develop a plan to sell more to that customer.
    d)    refuse to sell to that customer.
    e)    try to determine why this customer is unprofitable.