Principles of Marketing, 14e (Kotler) Chapter 1 Marketing: Creating and Capturing Customer Value 1) All of the following are

accurate descriptions of modern marketing EXCEPT which one? A) Marketing is the creation of value for customers !) Marketing is managing profita"le customer relationships C) #elling and advertising are s$non$mous with marketing %) Marketing involves satisf$ing customers& needs E) Marketing is used "$ for'profit and not'for'profit organi(ations Answer) C %iff) * Page +ef) ,'#kill) Concept ."/ective) 1'1 *) According to management guru Peter %rucker0 1The aim of marketing is to 22222222 1 A) create customer value !) identif$ customer demands C) make selling unnecessar$ %) set realistic customer e3pectations E) sell products Answer) C %iff) * Page +ef) #kill) Concept ."/ective) 1'1 4) 22222222 is defined as a social and managerial process "$ which individuals and organi(ations o"tain what the$ need and want through value creation and e3change A) #elling !) Advertising C) !artering %) Marketing E) 5egotiating Answer) % %iff) * Page +ef) #kill) Concept ."/ective) 1'1

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,) 9hich steps of the five'step marketing process are a"out understanding customers0 creating customer value0 and "uilding strong customer relationships? A) the first two onl$ !) the first three onl$ C) the first four onl$ %) the last three onl$ E) the last four onl$ Answer) C %iff) * Page +ef) #kill) Concept ."/ective) 1'1 -) According to the simple five'step model of the marketing process0 a compan$ needs to 22222222 "efore designing a customer'driven marketing strateg$ A) determine how to deliver superior value !) "uild profita"le relationships with customers C) use customer relationship management to create full partnerships with ke$ customers %) understand the marketplace and customer needs and wants E) construct ke$ components of a marketing program Answer) % %iff) * Page +ef) #kill) Concept ."/ective) 1'1 :) 22222222 are human needs as shaped "$ individual personalit$ and culture A) 5eeds !) 9ants C) %emands %) ;alues E) E3changes Answer) ! %iff) 1 Page +ef) : #kill) Concept ."/ective) 1'* <) 9hen "acked "$ "u$ing power0 wants "ecome 22222222 A) social needs !) demands C) ph$sical needs %) self'esteem needs E) e3changes Answer) ! %iff) 1 Page +ef) : #kill) Concept ."/ective) 1'*

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=) A>n) 22222222 is some com"ination of products0 services0 information0 or e3periences offered to consumers to satisf$ a need or want A) market offering !) value proposition C) demand satisfaction %) need proposition E) evoked set Answer) A %iff) 1 Page +ef) : #kill) Concept ."/ective) 1'* ?) 9hich of the following refers to sellers "eing preoccupied with their own products and losing sight of underl$ing consumer needs? A) selling m$opia !) marketing management C) value proposition %) marketing m$opia E) the product concept Answer) % %iff) 1 Page +ef) < #kill) Concept ."/ective) 1'* 17) 9hen marketers set low e3pectations for a market offering0 the "iggest risk the$ run is 22222222 A) disappointing lo$al customers !) decreasing customer satisfaction C) failing to attract enough customers %) failing to understand their customers& needs E) incorrectl$ identif$ing a target market Answer) C %iff) * Page +ef) < #kill) Concept ."/ective) 1'* 11) 22222222 is the act of o"taining a desired o"/ect from someone "$ offering something in return A) ;aluation !) E3change C) !ri"er$ %) ;alue creation E) %onation Answer) ! %iff) 1 Page +ef) < #kill) Concept ."/ective) 1'*
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1*) A>n) 22222222 is the set of actual and potential "u$ers of a product A) market !) audience C) group %) segment E) e3change Answer) A %iff) 1 Page +ef) < #kill) Concept ."/ective) 1'* 14) Consumer research0 product development0 communication0 distri"ution0 pricing0 and service are all core 22222222 activities A) e3change !) marketing C) management %) production E) customer relationship management Answer) ! %iff) 1 Page +ef) < AAC#!) Communication A"ilities #kill) Concept ."/ective) 1'* 1,) The art and science of choosing target markets and "uilding profita"le relationships with them is called 22222222 A) marketing management !) positioning C) segmentation %) selling E) differentiation Answer) A %iff) 1 Page +ef) = #kill) Concept ."/ective) 1'4 1-) #electing which segments of a population of customers to serve is called 22222222 A) market segmentation !) positioning C) customi(ation %) target marketing E) managing the marketing effort Answer) % %iff) * Page +ef) = #kill) Concept ."/ective) 1'4
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1:) 9hich of the following is the set of "enefits a compan$ promises to deliver to customers to satisf$ their needs? A) a mone$'"ack guarantee !) low pricing C) customer service %) a value proposition E) an attri"ute Answer) % %iff) * Page +ef) ? #kill) Concept ."/ective) 1'4 1<) 9hich customer @uestion is answered "$ a compan$&s value proposition? A) 19h$ should 8 "u$ $our "rand rather than a competitor&s?1 !) 1Aow does $our "rand "enefit societ$?1 C) 19hat are the costs and "enefits of $our "rand?1 %) 19hat kind of e3perience will 8 have with products and services associated with this "rand?1 E) 19hat are the "enefits of "eing a lo$al consumer of $our "rand?1 Answer) A %iff) 4 Page +ef) ? #kill) Concept ."/ective) 1'4 1=) 9hich of the following marketing management orientations focuses primaril$ on improving efficiencies along the suppl$ chain? A) production concept !) product concept C) selling concept %) marketing concept E) societal marketing concept Answer) A %iff) * Page +ef) ? #kill) Concept ."/ective) 1'4 1?) 9hich of the following marketing management concepts is most likel$ to lead to marketing m$opia? A) customer'driven marketing !) customer'driving marketing C) societal marketing %) marketing E) product Answer) E %iff) * Page +ef) ? #kill) Concept ."/ective) 1'4
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*7) According to the production concept0 consumers will favor products that are 22222222 and 22222222 A) satisf$ingB @ualit$ focused !) advertisedB afforda"le C) in high demandB hard to find %) segmentedB convenient E) availa"leB afforda"le Answer) E %iff) * Page +ef) ? #kill) Concept ."/ective) 1'4 *1) The 22222222 concept is aligned with the philosoph$ of continuous product improvement and the "elief that customers will choose products that offer the most in @ualit$0 performance0 and innovative features A) product !) production C) customer %) marketing E) promotion Answer) A %iff) 1 Page +ef) ? #kill) Concept ."/ective) 1'4 **) The product concept sa$s that a compan$ should do which of the following? A) improve marketing of its "est products !) market onl$ those products with high customer appeal C) focus on the target market and make products that meet those customers& demands %) focus on making continuous product improvements E) make promoting products the top priorit$ Answer) % %iff) * Page +ef) ? #kill) Concept ."/ective) 1'4 *4) 1!uild a "etter mousetrap and the world will "eat a path to $our door1 reflects the 22222222 concept A) production !) marketing C) selling %) product E) target marketing Answer) % %iff) * Page +ef) ? #kill) Concept ."/ective) 1'4
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*,) 9hich marketing orientation calls for aggressive promotional efforts and focuses on generating transactions to o"tain profita"le sales? A) marketing concept !) production concept C) product concept %) selling concept E) societal marketing concept Answer) % %iff) 1 Page +ef) 17 #kill) Concept ."/ective) 1'4 *-) 9hich marketing orientation holds that achieving organi(ational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions "etter than competitors do? A) product concept !) production concept C) selling concept %) marketing concept E) societal marketing concept Answer) % %iff) 1 Page +ef) 17 #kill) Concept ."/ective) 1'4 *:) According to the authors of $our te3t0 the 22222222 concept is a 1sense and respond1 philosoph$ rather than a 1make and sell1 philosoph$ A) product !) production C) marketing %) retailing E) societal marketing Answer) C %iff) * Page +ef) 17 #kill) Concept ."/ective) 1'4 *<) A firm that uses the selling concept takes a>n) 22222222 approach A) outside'in !) passive C) inside'out %) societal E) customer service Answer) C %iff) * Page +ef) 17 #kill) Concept ."/ective) 1'4
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*=) Aer" Celleher of #outhwest Airlines used the marketing concept in his successful organi(ation Aaving a customer department rather than a marketing department0 as suggested "$ Celleher0 is an e3ample of a>n) 22222222 perspective A) outside'in !) e3ternal C) inside'out %) continuous improvement E) traditional Answer) A %iff) * Page +ef) 17 #kill) Concept ."/ective) 1'4 *?) Though often critici(ed0 the selling concept is particularl$ appropriate and effective with which of the following t$pes of products? A) convenience !) shopping C) specialt$ %) unsought E) demarketed Answer) % %iff) * Page +ef) 17 #kill) Concept ."/ective) 1'4 47) 9hich of the following reflects the marketing concept philosoph$? A) 19e don&t have a marketing departmentB we have a customer department 1 !) 19e&re in the "usiness of making and selling superior products 1 C) 19e "uild them so $ou can "u$ them 1 %) 19hen it&s profits versus customers& needs0 profits will alwa$s win out 1 E) 1Dou won&t find a "etter deal an$where 1 Answer) A %iff) 4 Page +ef) 17 #kill) Concept ."/ective) 1'4 41) Customer'driven marketing usuall$ works well when 22222222 and when customers 22222222 A) a clear need e3istsB are difficult to identif$ !) customers know what the$ wantB are lo$al to the "rand C) a firm can deliver the goods desiredB are thoroughl$ researched %) a clear need e3istsB know what the$ want E) a need e3istsB don&t know what the$ want Answer) % %iff) 4 Page +ef) 17 #kill) Concept ."/ective) 1'4
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4*) Marie .rti( en/o$s her work at Euturistic %esigns0 8nc Aer organi(ation understands and anticipates customer needs even "etter than customers themselves do and creates products and services to meet current and future wants and demands Marie&s firm practices 22222222 marketing A) customer'driven !) customer'driving C) relationship %) societal E) social Answer) ! %iff) * Page +ef) 11 #kill) Concept ."/ective) 1'4 44) 9hen customers don&t know what the$ want or don&t even know what&s possi"le0 the most effective strateg$ is 22222222 marketing A) customer'driven !) customer'driving C) societal %) production E) product Answer) ! %iff) * Page +ef) 11 #kill) Concept ."/ective) 1'4 4,) The societal marketing concept seeks to esta"lish a "alance "etween consumer short'run wants and consumer 22222222 A) short'run costs and profits !) short'run ethics C) long'run welfare %) immediate health E) value propositions Answer) C %iff) 1 Page +ef) 11 #kill) Concept ."/ective) 1'4

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4-) 9hich marketing orientation holds that firms must strive to deliver value to customers in a wa$ that maintains or improves the consumer&s and societ$&s well'"eing? A) marketing concept !) selling concept C) product concept %) societal marketing concept E) e@uit$ concept Answer) % %iff) 1 Page +ef) 11 AAC#!) Ethical Fnderstanding and +easoning A"ilities #kill) Concept ."/ective) 1'4 4:) The three areas of consideration that should "e "alanced in the societal marketing concept are consumer wants0 societ$&s interests0 and 22222222 A) human welfare !) want satisfaction C) compan$ profits %) short'run wants E) long'term needs Answer) C %iff) * Page +ef) 11 AAC#!) Ethical Fnderstanding and +easoning A"ilities #kill) Concept ."/ective) 1'4 4<) The set of marketing tools a firm uses to implement its marketing strateg$ is called the 22222222 A) promotion mi3 !) product mi3 C) marketing mi3 %) TGM E) marketing effort Answer) C %iff) * Page +ef) 1* #kill) Concept ."/ective) 1'4

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4=) !uilding0 keeping0 and growing profita"le relationships "$ delivering customer value and satisfaction is called 22222222 A) customer lifetime value !) customer perceived value C) customer relationship management %) data"ase marketing E) societal marketing Answer) C %iff) 1 Page +ef) 1* #kill) Concept ."/ective) 1', 4?) .f the following0 which is the most important concept of modern marketing? A) customer relationship management !) e'mail advertising C) mass marketing %) properl$ trained sales people E) low prices Answer) A %iff) * Page +ef) 1* #kill) Concept ."/ective) 1', ,7) Dou have /ust taken a new position in an organi(ation and $ou&re learning a"out the /o" functions of $our new colleagues Dou o"serve that $our marketing manager is heavil$ involved in the process of "uilding and maintaining profita"le customer relationships Dour marketing manager fre@uentl$ speaks a"out the need to ac@uire0 keep0 and grow customers Dour manager is concerned with which one of the following? A) customer divestment !) customer'managed relationships C) the societal marketing concept %) partner relationship management E) customer relationship management Answer) E %iff) * Page +ef) 14 #kill) Concept ."/ective) 1',

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,1) Customer'perceived value is determined "$ a customer&s 22222222 of the "enefits and costs of a market offering relative to those of competing offers A) personal assessment !) rational e3pectations C) accurate assessment %) o"/ective evaluation E) emotional understanding Answer) A %iff) * Page +ef) 1* #kill) Concept ."/ective) 1', ,*) 8t is most accurate to sa$ that customers "u$ from stores and firms that offer which of the following? A) the highest value for the dollar !) the highest customer'perceived value C) the highest level of customer satisfaction %) the most attractive compan$ image E) the most concern for societ$&s interests Answer) ! %iff) 4 Page +ef) 1* #kill) Concept ."/ective) 1', ,4) The ke$ to delivering customer satisfaction is to match 22222222 with 22222222 A) compan$ performanceB the competition&s performance !) compan$ performanceB competitive prices C) relationship "uildingB performance tools %) compan$ performanceB uni@ue products E) customer e3pectationsB product performance Answer) E %iff) * Page +ef) 14 #kill) Concept ."/ective) 1',

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,,) 9hich of the following is the term for customers who make repeat purchases and tell others a"out their positive e3periences with a product or service? A) "arnacles !) customer evangelists C) "utterflies %) full partners E) social customers Answer) ! %iff) * Page +ef) 14 AAC#!) Communication A"ilities #kill) Concept ."/ective) 1', ,-) 9hich of the following strategies would a compan$ most likel$ use to increase customer satisfaction? A) decreasing the variet$ of offered services !) divesting C) lowering prices %) 1firing1 unprofita"le customers E) limiting customer e3periences with a "rand Answer) C %iff) 4 Page +ef) 1#kill) Concept ."/ective) 1', ,:) Dou are an assistant marketing director for a firm in a market with man$ low'margin customers 9hat t$pe of relationship would "e most profita"le for $ou to develop with these customers? A) full partnerships !) "asic relationships C) "asic partnerships %) clu" programs E) selective relationships Answer) ! %iff) * Page +ef) 1#kill) Concept ."/ective) 1',

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,<) A room upgrade offered "$ a hotel to a guest who often sta$s in the hotel is an e3ample of a 22222222 A) fre@uenc$ marketing program !) "asic customer relationship C) clu" marketing program %) partner relationship management techni@ue E) structural "enefit Answer) A %iff) * Page +ef) 1#kill) Concept ."/ective) 1', ,=) Pete #anche(0 a recent graduate of "usiness school0 has a different approach than his marketing manager0 who "elieves in keeping customers at arm&s length and using mass media advertising Pete knows that toda$ few successful firms still practice true 22222222 A) clu" marketing !) fre@uenc$ marketing C) mass marketing %) customer satisfaction E) market segmentation Answer) C %iff) * Page +ef) 1: #kill) Concept ."/ective) 1', ,?) 9hich of the following has 5.T contri"uted to the deeper0 more interactive nature of toda$&s customer relationships? A) e'mail !) 9e" sites C) online social networks %) traditional advertising E) video sharing Answer) % %iff) * Page +ef) 1< AAC#!) Fse of 8nformation Technolog$ #kill) Concept ."/ective) 1',

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-7) 9hich of the following "est e3plains wh$ consumers have greater power and control in toda$&s marketplace? A) The production concept and competition have lowered prices !) 8mplementation of the product concept has resulted in continuall$ improving products C) Customer'driven marketing creates products and services that meet customers& future needs %) More companies are implementing societal marketing and weighing long'term costs and "enefits E) Through new communication technologies0 customers have more access to information and more methods of sharing their opinions with other customers Answer) E %iff) 4 Page +ef) 1< AAC#!) Fse of 8nformation Technolog$ #kill) Concept ."/ective) 1', -1) The marketing world is em"racing 22222222 "ecause consumers can wield greater power and control in the marketplace through communication technologies A) partner relationship management !) suppl$ chain management C) customer'managed relationships %) market segmentation E) target marketing Answer) C %iff) * Page +ef) 1< #kill) Concept ."/ective) 1', -*) Hreater consumer control means that companies must rel$ more on marketing "$ 22222222 than "$ 22222222 A) interruptionB involvement !) attractionB intrusion C) sociali(ationB information %) producingB selling E) inspirationB competition Answer) ! %iff) * Page +ef) 1< AAC#!) Communication A"ilities #kill) Concept ."/ective) 1',

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-4) 9hich of the following is an e3ample of consumer'generated marketing? A) To$ota&s presence in online communities !) 5ike&s 5ike Plus running 9e" site C) MasterCard&s use of 1Priceless1 commercials shot "$ customers %) 5eiman Marcus&s 8nCircle +ewards program for its "est customers E) The Ie3us Covenant aimed at creating customer delight Answer) C %iff) * Page +ef) 1= AAC#!) Communication A"ilities #kill) Concept ."/ective) 1', -,) Partner relationship management focuses on working with 22222222 to "ring more value to customers A) partners inside and outside of the compan$ !) competitors C) consumers %) interest groups E) partners outside of the compan$ onl$ Answer) A %iff) * Page +ef) 1? #kill) Concept ."/ective) 1', --) 8n toda$&s world0 marketing should "e done "$ 22222222 emplo$ees in an organi(ation A) onl$ marketing !) onl$ marketing0 sales0 and customer'support C) onl$ sales and technolog$ %) onl$ management and marketing E) all Answer) E %iff) * Page +ef) 1? #kill) Concept ."/ective) 1', -:) Through 222222220 man$ companies toda$ are strengthening their connections to all partners0 from providers of raw materials to components to final products that are delivered to final "u$ers A) suppl$ chain management !) direct marketing C) partnership relationship marketing %) customi(ed marketing E) e@uit$ marketing Answer) A %iff) * Page +ef) 1? #kill) Concept ."/ective) 1',
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-<) #u(ie Chan strengthens her compan$&s connections "$ treating suppliers of raw materials0 vendors0 and distri"utors as partners in delivering customer value 9hat t$pe of management is she practicing? A) outside partnering !) inside partnering C) marketing %) suppl$ chain E) customer development Answer) % %iff) * Page +ef) 1? #kill) Concept ."/ective) 1', -=) The final step in the marketing process is 22222222 A) capturing value from customers !) creating customer lo$alt$ C) creating customer lifetime value %) understanding the marketplace E) designing a customer'driven marketing strateg$ Answer) A %iff) 1 Page +ef) *7 #kill) Concept ."/ective) 1', -?) #tew Ieonard0 the owner of a highl$ successful regional supermarket chain0 reacts adversel$ to losing a single customer sale Ae feels that this amounts to losing the entire stream of future purchases that a customer is likel$ to make if she remains in the area #tew Ieonard&s concern is an illustration of which of the following? A) share of customer !) market share C) partner relationship management %) customer lifetime value E) market share maintenance Answer) % %iff) * Page +ef) *7 #kill) Concept ."/ective) 1',

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:7) 9hen an airline goes after a 1share of travel1 from its customers0 it is attempting to increase 22222222 A) partner e@uit$ !) share of customer C) profit margins %) customer'managed relationships E) customer ownership Answer) ! %iff) * Page +ef) *1 #kill) Concept ."/ective) 1', :1) !e$ond simpl$ retaining good customers0 marketers want to constantl$ increase their 1share of customer 1 9hat does this mean in marketing terms? A) Marketers want to increase their market share !) Marketers want to increase the share the$ get of the customer&s purchasing in their product categories C) Marketers want to increase the profit margin with this target market %) Marketers want to continuousl$ increase their customers& levels of satisfaction E) Marketers want to turn satisfied customers into delighted customers Answer) ! %iff) * Page +ef) *1 #kill) Concept ."/ective) 1', :*) 22222222 is one of the "est wa$s to increase share of customer A) Targeting new customers !) Fsing "ait and switch C) Cross'selling %) %ivesting E) Partnership marketing Answer) C %iff) * Page +ef) *1 #kill) Concept ."/ective) 1',

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:4) Ama(on com leverages relationships with its 4- million customers "$ offering them music0 videos0 gifts0 to$s0 consumer electronics0 and office products0 among other items !ased on previous purchase histor$0 the compan$ recommends related C%s0 "ooks0 videos0 or other products that might interest a customer This most directl$ helps Ama(on com capture a greater 22222222 A) partner value !) share of customer C) profit margin %) social network E) customer lo$alt$ Answer) ! %iff) * Page +ef) *1 #kill) Concept ."/ective) 1', :,) 9hich of the following is the total com"ined customer lifetime values of all a compan$&s current and potential customers? A) share of customer !) customer lifetime value C) customer e@uit$ %) profita"ilit$ E) share of market Answer) C %iff) 1 Page +ef) *1 #kill) Concept ."/ective) 1', :-) The ultimate aim of customer relationship management is to produce 22222222 A) customer e@uit$ !) market share C) sales volume %) a relia"le data"ase E) higher profit margins Answer) A %iff) 4 Page +ef) *1 #kill) Concept ."/ective) 1',

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::) A potentiall$ highl$ profita"le0 short'term customer is a 22222222 A) true friend !) "utterfl$ C) stranger %) "arnacle E) true "eliever Answer) ! %iff) * Page +ef) ** #kill) Concept ."/ective) 1', :<) Customers can "e classified into four relationship groups0 according to their profita"ilit$ and pro/ected lo$alt$ 9hich t$pe of customers have the highest profit potential and strong lo$alt$? A) "arnacles !) strangers C) "utterflies %) true friends E) "ig fish Answer) % %iff) * Page +ef) ** #kill) Concept ."/ective) 1', :=) Afia0 a team leader in charge of customer relationship management0 is planning strategies for improving the profita"ilit$ of her firm&s least profita"le "ut lo$al customers #he is also e3amining methods for 1firing1 customers in this group who cannot "e made profita"le To which of the following customer relationship groups do these customers "elong? A) "utterflies !) true friends C) strangers %) "arnacles E) short'term customers Answer) % %iff) * Page +ef) ** #kill) Concept ."/ective) 1',

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:?) #ince the "eginning of the Hreat +ecession0 marketers have "een emphasi(ing the 22222222 of their products more than ever A) image !) value C) personalit$ %) safet$ E) uni@ueness Answer) ! %iff) * Page +ef) *4 #kill) Concept ."/ective) 1'<7) 9hich of the following has "een the most common consumer response to the economic downturn that "egan in *77=? A) spending more on lu3ur$ items !) discontinuing an$ spending on lu3ur$ items C) spending less and choosing products more carefull$ %) spending less "ut choosing products less carefull$ E) saving more "ut spending more on credit cards Answer) C %iff) * Page +ef) *, #kill) Concept ."/ective) 1'<1) 9hich of the following is a true statement a"out the Hreat +ecession that "egan in *77=? A) The economic crisis caused a short'term change in consumers& spending ha"its !) The average home value increased after the stock market plunge C) %ecreasing energ$ prices provided consumers with une3pected savings %) Consumers "rought spending more in line with their incomes E) Consumers @uickl$ regained confidence in the econom$ Answer) % %iff) * Page +ef) *, #kill) Concept ."/ective) 1'-

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<*) 9hich of the following statements a"out the 8nternet is most accurate? A) Companies are cautiousl$ using the 8nternet to "uild closer relationships with customers and marketing partners alike !) After the dot'com meltdown of *7770 fewer consumers are "u$ing products and services online C) The 8nternet makes it eas$ for consumers to view0 interact with0 and create marketing content %) Consumer e'commerce looks promising0 "ut "usiness'to'"usiness e'commerce is declining E) 9e" * 7 involves a less "alanced approach to online marketing than the original dot'com "oom did Answer) C %iff) * Page +ef) *: AAC#!) Fse of 8nformation Technolog$ #kill) Concept ."/ective) 1'<4) 9hich version of the 9e" has introduced small0 fast0 and customi(a"le applications that can "e accessed through multifunction mo"ile devices? A) 9e" 1 7 !) 9e" * 7 C) 9e" 4 7 %) 9e" , 7 E) 9e" - 7 Answer) C %iff) * Page +ef) *: AAC#!) Fse of 8nformation Technolog$ #kill) Concept ."/ective) 1'<,) 9hich of the following is currentl$ the fastest'growing form of marketing? A) consumer'generated marketing !) online marketing C) mass media marketing %) societal marketing E) word'of'mouth marketing Answer) ! %iff) 4 Page +ef) *< AAC#!) Fse of 8nformation Technolog$ #kill) Concept ."/ective) 1'-

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<-) As part of the rapid glo"ali(ation of toda$&s econom$0 companies are selling more locall$ produced goods in international markets and 22222222 A) taking a local view of their industr$ !) purchasing more supplies a"road C) reducing competition within their industr$ %) downpla$ing concerns for social responsi"ilit$ E) competing solel$ in traditional marketplaces Answer) ! %iff) * Page +ef) *< AAC#!) %$namics of the Hlo"al Econom$ #kill) Concept ."/ective) 1'<:) 9hich of the following is most essential to an$ definition of marketing? A) demand management !) the production concept C) customer relationships %) making a sale E) making a profit Answer) C %iff) * Page +ef) AAC#!) +eflective Thinking #kills #kill) Application ."/ective) 1'1 <<) Hreg 9illiams now has the "u$ing power to purchase the computer s$stem he has wanted for the last si3 months Hreg&s want now has "ecome a>n) 22222222 A) need !) necessit$ C) demand %) e3change E) transaction Answer) C %iff) * Page +ef) : AAC#!) Anal$tic #kills #kill) Application ."/ective) 1'*

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<=) Cath$&s Clothes is a small retail chain successfull$ selling women&s clothing and accessories with a profita"le focus on "u$ers who have relativel$ modest means This is an e3ample of 22222222 A) convenience !) social marketing C) societal marketing %) target marketing E) value packing Answer) % %iff) * Page +ef) = AAC#!) Anal$tic #kills #kill) Application ."/ective) 1'4 <?) An organic farmer has identified three distinct groups who might "e interested in his products) vegetarians0 people who are concerned a"out chemicals in their foods0 and people who consider themselves innovators and trendsetters These three groups are e3amples of 22222222 A) marketing mi3es !) market segments C) value propositions %) mass markets E) marketing intermediaries Answer) ! %iff) * Page +ef) = AAC#!) Anal$tic #kills #kill) Application ."/ective) 1'4 =7) Jolene&s firm markets preplanning services for a mortician #he finds that most of her target market wants to avoid discussing their future funeral needs0 and she must somehow first get their attention Jolene&s firm most likel$ practices the 22222222 A) production concept !) marketing concept C) selling concept %) social marketing concept E) societal marketing concept Answer) C %iff) * Page +ef) 17 AAC#!) +eflective Thinking #kills #kill) Application ."/ective) 1'4

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=1) Aenr$ Eord&s philosoph$ was to perfect the Model'T so that its cost could "e reduced further for increased consumer afforda"ilit$ This reflects the 22222222 concept A) product !) production C) selling %) marketing E) societal marketing Answer) ! %iff) * Page +ef) ? AAC#!) Anal$tic #kills #kill) Application ."/ective) 1'4 =*) +ailroads were once operated "ased on the thinking that users wanted trains rather than transportation0 overlooking the challenge of other modes of transportation This reflects the 22222222 concept A) product !) production C) selling %) marketing E) societal marketing Answer) A %iff) 4 Page +ef) 17 AAC#!) Anal$tic #kills #kill) Application ."/ective) 1'4 =4) #ome fast'food restaurants offer tast$ and convenient food at afforda"le prices0 "ut in doing so the$ contri"ute to a national o"esit$ epidemic and environmental pro"lems These fast'food restaurants overlook the 22222222 philosoph$ A) marketing concept !) product concept C) production concept %) societal marketing concept E) selling concept Answer) % %iff) * Page +ef) 11 AAC#!) +eflective Thinking #kills #kill) Application ."/ective) 1'4

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=,) EedE3 offers its customers fast and relia"le package deliver$ 9hen EedE3 customers weigh these "enefits against the monetar$ cost of using EedE3 along with an$ other costs of using the service0 the$ are acting upon 22222222 A) lo$alt$ !) relationship marketing C) customer'perceived value %) social relationships E) a societal marketing campaign Answer) C %iff) 4 Page +ef) 1* AAC#!) Anal$tic #kills #kill) Application ."/ective) 1', =-) #all$ purchased !rand X lotion 8n comparing her perception of how the lotion made her skin feel and look to her e3pectations for !rand X lotion0 #all$ was measuring her level of 22222222 A) share of customer !) customer satisfaction C) customer e@uit$ %) demand E) customer lifetime value Answer) ! %iff) 4 Page +ef) 14 AAC#!) Anal$tic #kills #kill) Application ."/ective) 1', =:) The 5iketown running clu" that organi(es twice weekl$ evening runs and follow'up meetings in the 5ike #tore is an e3ample of which of the following? A) a fre@uenc$ marketing program !) a "asic customer relationship C) a clu" marketing program %) a partner relationship E) a structural "enefit provided for top customers Answer) C %iff) * Page +ef) 1AAC#!) Anal$tic #kills #kill) Application ."/ective) 1',

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=<) Elisandra0 a marketing manager at a regional chain restaurant0 has decided to sponsor a contest calling for customers to create commercials for the restaurant 9inning entries will "e posted on the organi(ation&s home page Elisandra&s plan is an e3ample of 22222222 A) consumer'generated marketing !) partner relationship management C) customer lifetime value %) communit$ development around a "rand E) customer divestment Answer) A %iff) * Page +ef) 1= AAC#!) Anal$tic #kills #kill) Application ."/ective) 1', ==) Cao Corp 0 which makes !an deodorant0 invited teenage girls to make an ad that would encourage other girls to "u$ the product This program is an e3ample of 22222222 A) societal marketing !) the production concept C) the selling orientation %) partner relationship management E) consumer'generated content Answer) E %iff) * Page +ef) 1= AAC#!) Anal$tic #kills #kill) Application ."/ective) 1'=?) At Hina&s 5ails0 the posted polic$ is 19ithout our customers0 we don&t e3ist 1 Hina and her staff aim to delight each customer0 and the$ are @uick to offer discounts or e3tra services whenever a customer is an$thing less than satisfied Hina and her staff strive to make ever$ customer a repeat customer 8t is most accurate to sa$ that instead of focusing on each individual transaction0 Hina and her staff put a priorit$ on 22222222 A) partner relationship management !) enlisting customer evangelists C) attracting 1"utterflies1 %) converting 1strangers1 E) capturing customer lifetime value Answer) E %iff) 4 Page +ef) *7 AAC#!) +eflective Thinking #kills #kill) Application ."/ective) 1',

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?7) !en K Jerr$&s challenges all stakeholders0 including emplo$ees0 top management0 and even ice cream scoopers in their stores0 to consider individual and communit$ welfare in their da$'to' da$ decisions Actions such as this "$ companies sei(ing the opportunit$ to do well "$ doing good reflects 22222222 A) environmentalism !) social responsi"ilit$ C) profit marketing %) partnership management E) m$opia Answer) ! %iff) * Page +ef) *< AAC#!) Anal$tic #kills #kill) Application ."/ective) 1'?1) A church targeting different demographic groups to increase attendance is an e3ample of 22222222 A) for'profit marketing !) not'for'profit marketing C) societal marketing %) customer evangelism E) caring capitalism Answer) ! %iff) * Page +ef) *= AAC#!) Anal$tic #kills #kill) Application ."/ective) 1'?*) Dour state&s department of education has "udgeted a significant amount of mone$ for a radio0 print0 television0 and online advertising campaign emphasi(ing the long'term "enefits0 "oth educationall$ and professionall$0 of reading ever$ da$ This is an e3ample of a>n) 22222222 campaign A) ethical !) social marketing C) for'profit %) consumer'generated E) differentiated Answer) ! %iff) * Page +ef) *? AAC#!) Anal$tic #kills #kill) Application ."/ective) 1'-

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?4) 9hich of the following is the most likel$ result of a marketing strateg$ that attempts to serve all potential customers? A) All customers will "e delighted !) Customer'perceived value will increase C) Customer evangelists will "ecome unpaid salespersons for the service or product %) 5ot all customers will "e satisfied E) The compan$ will need to follow up with a service campaign Answer) % %iff) * Page +ef) = AAC#!) +eflective Thinking #kills #kill) Critical Thinking ."/ective) 1'4 ?,) 9hich of the following reflects the marketing concept? A) 1The supplier is king 1 !) 1Marketing should "e viewed as foraging and not gardening 1 C) 1This is what 8 makeB won&t $ou please "u$ it?1 %) 1This is what 8 wantB won&t $ou please make it?1 E) 1Customers need to "e told where the$ want to go 1 Answer) % %iff) 4 Page +ef) 17 AAC#!) +eflective Thinking #kills #kill) Critical Thinking ."/ective) 1'4 ?-) 8n which of the following situations has a compan$ most activel$ em"raced customer' managed relationships? A) American Airlines awards fre@uent fl$er points to returning customers !) Paige Premium %enim /eans provide a superior @ualit$ and a perfect fit C) i+o"ot invites enthusiastic +oom"a owners to develop and share their own programs and uses for the compan$&s ro"otic vacuum %) !est !u$ distinguishes "etween its "est customers0 called angels0 and its less profita"le customers0 called demons0 stocking merchandise to appeal to separate groups of its angels E) To$ota develops a marketing presence on social networks and other online communities Answer) C %iff) 4 Page +ef) 1< AAC#!) +eflective Thinking #kills #kill) Critical Thinking ."/ective) 1',

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?:) 9hen the econom$ tightens0 customer lo$alt$ and customer retention "ecome 22222222 for marketers A) more important !) less important C) impossi"le %) long'term "ut not short'term goals E) short'term "ut not long'term goals Answer) A %iff) * Page +ef) *1 AAC#!) +eflective Thinking #kills #kill) Critical Thinking ."/ective) 1', Refer to the scenario below to answer the following questions Carol ;eldt0 owner of #eagull Terrace0 watched her investment grow from a small0 seaside motel to a thriving $ear'round resort in /ust a few $ears Atop a "luff overlooking the Maine coast0 #eagull Terrace had attracted thousands of visits during the summer months0 "ut then faced a tremendous downturn in "usiness during the winter months 1!ut0 given the industr$ in the near"$ towns0 ver$ little $ear'round competition0 and our close pro3imit$ to Portland01 Carol added0 18 couldn&t understand wh$ seasonalit$ had to hit #eagull Terrace so hardL1 #o Carol spent her first winter devising a new marketing plan #he put together a promotional package designed to attract "usiness travelers $ear'round Carol&s plan0 then0 involved a seasonal promotional gimmick'to "e implemented from earl$ winter to late spring'that would attract the same num"ers as the large summer crowd Aer idea workedL %uring her second winter0 Carol greeted numerous "usiness travelers'"oth satisfied repeat guests as well as new guests who had "een snagged "$ her promotional appeals 19e still have a long wa$ to go01 Carol admitted 1.ur delicatessen offers delicious entrees0 "ut we&d like to e3pand that 9e provide health clu" privileges off'site0 "ut we&d like to eventuall$ provide our own These are goals 8 hope to achieve in a few $ears .ur first pro/ect0 however0 included a renovation of our guest rooms and 8&m @uite proud of the results 1 Carol then added0 1Actuall$ there are so man$ possi"ilities 9ith an indoor pool area0 8 will eventuall$ offer weekend get'awa$s throughout winter 1 ?<) 9hich of the following groups is specificall$ part of #eagull Terrace&s target market? A) seasonal "usiness travelers !) $oung families C) retirees %) summer campers E) athletes Answer) A %iff) * Page +ef) = AAC#!) Anal$tic #kills #kill) Application ."/ective) 1'4

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?=) Carol ;eldt&s use of 1promotional gimmicks1 is an e3ample of the 22222222 concept A) selling !) marketing C) product %) production E) societal marketing Answer) A %iff) * Page +ef) 17 AAC#!) Anal$tic #kills #kill) Application ."/ective) 1', ??) +enovations of the guest rooms at the #eagull Terrace and plans to add an indoor pool area are e3amples of the 22222222 concept A) selling !) marketing C) product %) production E) societal marketing Answer) C %iff) * Page +ef) 17 AAC#!) Anal$tic #kills #kill) Application ."/ective) 1', 177) Carol ;eldt has decided to ask selected guests to participate in an e3tensive surve$ a"out their e3perience at #eagull Terrace and a"out their most desired amenities and vacation e3periences !$ implementing the suggestions she receives from guests0 Carol would "e following the 22222222 concept A) production !) product C) selling %) marketing E) societal Answer) % %iff) * Page +ef) 17 AAC#!) Anal$tic #kills #kill) Application ."/ective) 1', 171) Marketing is managing profita"le customer relationships Answer) T+FE %iff) 1 Page +ef) , #kill) Concept ."/ective) 1'1

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17*) Auman needs are shaped "$ culture and individual personalit$ Answer) EAI#E %iff) * Page +ef) : #kill) Concept ."/ective) 1'* 174) The difference "etween human needs and wants is that needs are not influenced "$ marketers Answer) T+FE %iff) * Page +ef) : #kill) Concept ."/ective) 1'* 17,) 9hen "acked "$ "u$ing power0 needs "ecome wants Answer) EAI#E %iff) * Page +ef) : #kill) Concept ."/ective) 1'* 17-) Market offerings are limited to ph$sical products Answer) EAI#E %iff) * Page +ef) : #kill) Concept ."/ective) 1'* 17:) 9hen sellers focus on e3isting needs and lose sight of underl$ing customer wants0 the$ suffer from marketing m$opia Answer) EAI#E %iff) 4 Page +ef) < #kill) Concept ."/ective) 1'* 17<) .nl$ sellers of products0 services0 and ideas practice marketingB "u$ers do not Answer) EAI#E %iff) * Page +ef) < #kill) Concept ."/ective) 1'* 17=) Market segmentation is the process of seeking fewer customers and reduced demand for profit ma3imi(ation onl$ Answer) EAI#E %iff) * Page +ef) = #kill) Concept ."/ective) 1'4

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17?) The selling concept holds that consumers will not "u$ enough of the firm&s products unless it undertakes a large'scale selling and promotion effort Answer) T+FE %iff) 1 Page +ef) 17 #kill) Concept ."/ective) 1'4 117) Dour department holds that achieving organi(ational goals depends on knowing the needs and wants of target markets and delivering the desired satisfaction "etter than competitors do Dour department is practicing the selling concept Answer) EAI#E %iff) * Page +ef) 17 #kill) Concept ."/ective) 1'4 111) The societal marketing concept calls on marketers to "alance consumer wants and desires0 compan$ profits0 and societ$&s interests Answer) T+FE %iff) * Page +ef) 11 AAC#!) Ethical Fnderstanding and +easoning A"ilities #kill) Concept ."/ective) 1'4 11*) The marketing mi3 includes production0 price0 promotion0 and packagingB the$ are known as the four Ps of marketing Answer) EAI#E %iff) * Page +ef) 1* #kill) Concept ."/ective) 1'4 114) Eor most marketers0 customer relationship management >C+M) is e3clusivel$ a matter of customer data management Answer) EAI#E %iff) * Page +ef) 1* AAC#!) Fse of 8nformation Technolog$ #kill) Concept ."/ective) 1', 11,) Customer'perceived value is defined as the customer&s evaluation of the perceived difference "etween all the "enefits and all the costs of a marketing offer relative to those of competing offers Answer) T+FE %iff) 1 Page +ef) 1* #kill) Concept ."/ective) 1',

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11-) ;alue has different meanings to and is perceived differentl$ "$ different consumers Answer) T+FE %iff) * Page +ef) 14 #kill) Concept ."/ective) 1', 11:) Man$ companies now use customer profita"ilit$ anal$sis to identif$ and weed out unprofita"le customers Answer) T+FE %iff) * Page +ef) 1: AAC#!) Fse of 8nformation Technolog$ #kill) Concept ."/ective) 1', 11<) Customer'managed relationships are marketing relationships that are initiated "$ and controlled "$ customers0 not "$ marketers Answer) EAI#E %iff) * Page +ef) 1< #kill) Concept ."/ective) 1', 11=) Consumer'generated marketing has $et to have much impact as a marketing force Answer) EAI#E %iff) * Page +ef) 1? AAC#!) Fse of 8nformation Technolog$ #kill) Concept ."/ective) 1', 11?) To increase its 1share of customer01 a firm concentrates on retaining as man$ customers as possi"le over their lifetimes Answer) EAI#E %iff) * Page +ef) *1 #kill) Concept ."/ective) 1', 1*7) 9e" 1 7 connected people with information0 and 9e" * 7 is connecting people to multifunction mo"ile devices Answer) EAI#E %iff) * Page +ef) *: AAC#!) Fse of 8nformation Technolog$ #kill) Concept ."/ective) 1'-

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1*1) An e3perience such as a vacation can "e defined as a market offering Answer) T+FE %iff) * Page +ef) : AAC#!) Anal$tic #kills #kill) Application ."/ective) 1'* 1**) Am$&s law office has developed a new format and wording for wills The staff "elieves the$ offer the most in @ualit$0 performance0 and innovative features Aer law office is practicing the production concept Answer) EAI#E %iff) 4 Page +ef) 17 AAC#!) Anal$tic #kills #kill) Application ."/ective) 1'4 1*4) The production concept and product concept are orientations that are more likel$ to lead to marketing m$opia than the marketing concept and the societal marketing concept are Answer) T+FE %iff) 4 Page +ef) ?'17 AAC#!) +eflective Thinking #kills #kill) #$nthesis ."/ective) 1'4 1*,) East Eood0 8nc views marketing as the science and art of finding0 retaining0 and growing profita"le customers "$ providing them with the food the$ want East Eood0 8nc practices societal marketing Answer) EAI#E %iff) * Page +ef) 11 AAC#!) Anal$tic #kills #kill) Application ."/ective) 1'4 1*-) Iarge'scale marketing approaches that foster two'wa$ customer relationships are made possi"le "$ new communication technologies Answer) T+FE %iff) * Page +ef) 1< AAC#!) Fse of 8nformation Technolog$ #kill) Critical Thinking ."/ective) 1',

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1*:) !riefl$ compare and contrast the concepts of needs0 wants0 and demands0 giving an e3ample of each %iscuss how these concepts relate to marketing practices Answer) Auman needs are states of felt deprivation 5eeds are part of the human makeupB the$ are not created "$ e3ternal forces Aumans have a "asic ph$sical need for food0 clothing0 warmth0 and safet$B a "asic social need for "elonging and affectionB and a "asic individual need for knowledge and self'e3pression Fnlike needs0 wants are not innateB instead0 wants are needs shaped "$ culture0 societ$0 and individual personalit$ Eor e3ample0 an American needs food "ut wants a !ig Mac and a soft drink An American with ten dollars needs food0 wants a !ig Mac and soft drink0 and demands lunch at Mc%onald&s 9ants "ecome demands when the$ are "acked "$ consumers& "u$ing power Marketers conduct e3tensive research to understand customers& wants and demands The$ then attempt to fulfill customers& wants and demands through their market offerings %iff) * Page +ef) : AAC#!) +eflective Thinking #kills #kill) #$nthesis ."/ective) 1'* 1*<) 8n a short essa$0 e3plain how and wh$ marketers go "e$ond selling a product or service to create "rand e3periences Answer) #ellers are most effective when the$ focus more on the "enefits and e3periences produced "$ their products and services than on the specific products and services themselves #mart marketers focus on creating a "rand e3perience0 incorporating several products and services for their customers !$ doing so0 marketers hope to increase customer satisfaction0 creating a "od$ of customers who will repeatedl$ purchase their market offerings and recommend those offerings to friends %iff) * Page +ef) < AAC#!) +eflective Thinking #kills #kill) Application ."/ective) 1'* 1*=) Compare the selling and marketing concepts0 listing the ke$ components of each philosoph$ Answer) The selling concept reflects an inside'out philosoph$0 while the marketing concept takes an outside'in perspective The selling concept is t$picall$ practiced when an organi(ation is marketing products or services that "u$ers do not normall$ think of purchasing0 such as insurance or "lood donation Aggressive selling focuses on creating sales transactions rather than "uilding long'term relationships with customers0 with the aim of selling what the compan$ makes rather than making what the customer wants The marketing concept0 on the other hand0 is "ased upon identif$ing the needs and wants of target markets and then satisf$ing those needs and wants "etter than competitors do 8n contrast to the selling concept0 marketing focuses on the customer0 not the product0 as the path to profits %iff) * Page +ef) 17 AAC#!) +eflective Thinking #kills #kill) Application ."/ective) 1'4

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1*?) !riefl$ e3plain the societal marketing concept Hive an e3ample of an organi(ation that has effectivel$ used the societal marketing concept Answer) According to this concept0 firms will succeed if the$ take underl$ing consumer needs and societ$&s well'"eing into account over the long term A pure marketing concept can damage consumers& long'run welfare "$ focusing e3clusivel$ on satisf$ing consumers& short'run wants .ver a long period of time0 this too'narrow focus can "e damaging to the compan$ 8n setting their marketing strategies0 marketers toda$ need to "alance compan$ profits0 consumer wants0 and societ$&s interests FP# has a mission that stresses economic prosperit$0 social responsi"ilit$0 and environmental stewardship The compan$ proactivel$ seeks opportunities to act responsi"l$ and efficientl$ Eor e3ample0 FP# works to make its operations 1green1 and supports emplo$ees volunteering in their communities %iff) * Page +ef) 11 AAC#!) Ethical Fnderstanding and +easoning A"ilities #kill) #$nthesis ."/ective) 1'4 147) %efine Customer +elationship Management and e3plain its associated tools and levels of relationships Answer) Customer +elationship Management >C+M) is the process of "uilding and maintaining profita"le customer relationships "$ delivering superior customer value and satisfaction A compan$ with mostl$ low'margin customers is likel$ to seek "asic relationships0 using "rand' "uilding advertising and sales promotion An organi(ation with few customers and high margins0 on the other hand0 will work to create full partnerships with ke$ customers To create stronger "onds with customers0 some marketers use tools such as financial "enefits or rewards "ased on fre@uenc$ of purchase .ther tools include social "enefits0 like offering ke$ customers the opportunit$ to network and create communities through clu" marketing programs To retain current customers and remain profita"le0 companies toda$ are going "e$ond transactional marketing to customer relationship management The ke$ is to create and sustain relationships for the long term %iff) 4 Page +ef) 1*'1AAC#!) +eflective Thinking #kills #kill) Application ."/ective) 1', 141) E3plain wh$ the aim of customer relationship management is to create not /ust customer satisfaction0 "ut also customer delight Answer) Customer satisfaction cannot "e taken for granted !ecause "rand lo$alt$ is dependent upon strong customer satisfaction0 companies strive to retain0 satisf$0 and even delight current customers Eirms create customer delight "$ promising onl$ what the$ can deliver and then delivering more than what the$ promised The$ also create emotional relationships with ke$ customers %elighted customers make repeated purchases and "ecome customers for life More importantl$0 the$ also essentiall$ "ecome an unpaid sales force for the firm as 1customer evangelists1 who tell other potential customers a"out their positive e3periences with the product %iff) * Page +ef) 1*'14 AAC#!) +eflective Thinking #kills #kill) Critical Thinking ."/ective) 1',
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14*) 8n a short essa$0 discuss the challenges and advantages of new communication technologies for marketers as the$ work to "uild relationships with their customers Answer) Through the 8nternet and related technologies0 people can now interact in direct and surprisingl$ personal wa$s with large groups of others0 from neigh"ors within a local communit$ to people across the world 9ith communication technologies such as e'mail0 "logs0 9e" sites0 online communities0 and online social networks0 toda$&s marketers incorporate interactive approaches that help "uild targeted0 two'wa$ customer relationships Marketers can create deeper consumer involvement and a sense of communit$ surrounding a "rand0 making a "rand a meaningful part of consumers& conversations and lives Aowever0 while new communication tools create relationship'"uilding opportunities for marketers0 the$ also create challenges The$ give consumers a greater voice0 and therefore greater power and control in the marketplace 8n fact0 the marketing world is "eginning to em"race customer'managed relationships Toda$&s consumers have more information a"out "rands than ever "efore0 and the$ have a wealth of platforms for airing and sharing their "rand views with other consumers This "enefits companies when views of its products are positive0 "ut can "e damaging when customers share stories of negative e3periences with a compan$&s products %iff) * Page +ef) 1<'1= AAC#!) Fse of 8nformation Technolog$ #kill) Application ."/ective) 1'144) %efine customer e@uit$ and e3plain how a compan$ can increase it Answer) Customer e@uit$ is the sum of the lifetime values of all a compan$&s current and potential customers Customer e@uit$ is dependent upon customer lo$alt$ from a firm&s profita"le customers !ecause customer e@uit$ is a reflection of a compan$&s future0 companies must manage it carefull$0 viewing customers as assets that need to "e ma3imi(ed To increase customer e@uit$0 companies should work to delight their customers and esta"lish full relationships with their most profita"le customers %iff) * Page +ef) *1 AAC#!) +eflective Thinking #kills #kill) Application ."/ective) 1',

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14,) 8n a short essa$0 descri"e and compare the four t$pes of customers classified "$ their potential profita"ilit$ to an organi(ation E3plain how an organi(ation should manage each t$pe of customer Answer) The four t$pes of customers are strangers0 "utterflies0 true friends0 and "arnacles 1#trangers1 have low potential profita"ilit$ and lo$alt$ A compan$&s offerings do not fit well with a stranger&s wants and demands Companies should not invest in "uilding a relationship with this t$pe of customer Another t$pe of customer in which a compan$ should not invest is the 1"arnacle 1 !arnacles are highl$ lo$al "ut not ver$ profita"le "ecause there is a limited fit "etween their needs and the compan$&s offerings The compan$ might "e a"le to improve "arnacles& profita"ilit$ "$ selling them more0 raising their fees0 or reducing service to them Aowever0 if the$ cannot "e made profita"le0 the$ should "e 1fired 1 Iike strangers0 1"utterflies1 are not lo$al Aowever0 the$ are potentiall$ profita"le "ecause there is a good fit "etween the compan$&s offerings and their needs Iike real "utterflies0 this t$pe of customer will come and go without "ecoming a permanent0 lo$al consumer of a compan$&s products Companies should use promotional "lit(es to attract these customers0 create satisf$ing and profita"le transactions with them0 and then cease investing in them until the ne3t time around The final t$pe of customers is 1true friends1B the$ are "oth profita"le and lo$al There is a strong fit "etween their needs and the compan$&s offerings0 so the compan$ should make continuous relationship investments in an effort to go "e$ond satisf$ing and to delight these customers A compan$ should tr$ to convert true friends into customer evangelists who tell others a"out their good e3periences with the compan$ %iff) 4 Page +ef) ** AAC#!) +eflective Thinking #kills #kill) Critical Thinking ."/ective) 1', 14-) E3plain how the 8nternet has transformed the wa$ in which we do "usiness toda$ Answer) The 8nternet links individuals and "usinesses of all t$pes to each other The 8nternet allows firms access to e3citing new marketspaces 8n addition to the click'onl$ dot'coms0 traditional 1"rick'and'mortar1 companies of the past are now 1click'and'mortar1 companies0 with online presences aimed at attracting new customers and strengthening "onds with current customers Appro3imatel$ <-M of American 8nternet users now shop online0 making a 9e" presence a necessit$ for an$ organi(ation 9ith 9e" 4 70 the virtual world goes ever$where with us on multifunction mo"ile devices !ecause consumers are alwa$s connected0 "usiness must "e as well %iff) * Page +ef) *: AAC#!) Fse of 8nformation Technolog$ #kill) Application ."/ective) 1'-

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14:) 9hat should sellers consider if the$ wish to avoid marketing m$opia? Answer) #ellers should consider the particular "enefits and e3periences desired "$ their customers0 and not /ust pa$ attention to the specific products the$ offer %iff) * Page +ef) < AAC#!) +eflective Thinking #kills #kill) Application ."/ective) 1'* 14<) Dou are a manufacturer of tents0 sleeping "ags0 and outdoor cooking e@uipment Aow might $ou go a"out creating "rand e3periences for $our customers? Answer) #uch manufacturers should focus on the "enefits en/o$ed through the use of their products0 such as access to the great outdoors0 shared famil$ e3periences0 and relived memories of the consumer&s $outh %iff) * Page +ef) < AAC#!) +eflective Thinking #kills #kill) #$nthesis ."/ective) 1'* 14=) Think a"out suppliers and other marketing partners A modern marketing s$stem relies on profita"le relationships all along the wa$ Aow might 9almart rel$ on its marketing partners in order to offer low prices? Answer) 9almart must rel$ on suppliers that will consistentl$ provide @ualit$ merchandise at low costs %iff) * Page +ef) = AAC#!) +eflective Thinking #kills #kill) Application ."/ective) 1'* 14?) The marketing team at !ead !eautiful0 a line of /ewelr$ targeted at preteen girls0 is meeting to formulate the products& value proposition 9hat should team mem"ers consider as the$ define a value proposition for !ead !eautiful? Answer) 8n considering !ead !eautiful&s value proposition0 the marketing team should identif$ the "enefits and values the compan$ promises to deliver to customers to satisf$ their needs The value proposition should differentiate !ead !eautiful from other similar products0 answering the customer&s @uestion 19h$ should 8 "u$ this "rand rather than a competitor&s?1 %iff) * Page +ef) ? AAC#!) +eflective Thinking #kills #kill) Critical Thinking ."/ective) 1'4

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1,7) 9hen demand for !eanie !a"ies was at its highest0 manufacturers purposefull$ maintained strong demand "$ limiting suppl$0 which drove the price of !eanie !a"ies up Compare the actions of these manufacturers to the production concept Answer) The production concept holds that consumers favor products that are availa"le and afforda"le According to this concept0 manufacturers work to increase production and improve manufacturing efficienc$ !eanie !a"ies manufacturers purposefull$ limited production0 making their products less availa"le and less afforda"le0 a techni@ue that contradicts the philosoph$ of the production concept %iff) 4 Page +ef) ? AAC#!) +eflective Thinking #kills #kill) Critical Thinking ."/ective) 1'4 1,1) Compan$ X carries organi(ational and office supplies and follows the selling concept E3plain how Compan$ X ma$ lose sight of customer relationships with their marketing orientation Answer) The compan$&s aim is to sell its supplies rather than make what the market wantsB such a strateg$ creates sales transactions "ut not long'term relationships The compan$&s likel$ fault$ assumption is that customers who are persuaded to "u$ the product will like it or that the$ will "u$ the product again even if the$ weren&t reall$ initiall$ satisfied Compan$ X will not foster customer lo$alt$ with this approach %iff) * Page +ef) 17 AAC#!) +eflective Thinking #kills #kill) Application ."/ective) 1'4 1,*) 8n nineteenth'centur$ %u"lin0 Moll$ Malone sold cockles and mussels while shouting to passers'"$0 1alive'alive'oh 1 9as Moll$ taking an outside'in or inside'out perspective? E3plain Answer) The vendor&s approach was inside'out The cockles and mussels are availa"le The vendor&s /o" was then to attract willing "u$ers %iff) 4 Page +ef) 17 AAC#!) +eflective Thinking #kills #kill) #$nthesis ."/ective) 1'4 1,4) E3plain wh$ electronics and pharmaceuticals manufacturers ma$ use customer'driving marketing Answer) 8n such industries0 consumers do not know e3actl$ what new products are availa"leB therefore0 consumers rel$ on such firms to tell them what the$ need %iff) * Page +ef) 11 AAC#!) +eflective Thinking #kills #kill) Application ."/ective) 1'4

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1,,) E3plain how storing customer information in a data"ase might "etter prepare car'maker #aturn in customer relationship management >C+M) Answer) Managing detailed information a"out customers ma$ allow #aturn to design new models around customer demographics and desires for specific features These 1touch points1 can "e the ke$ to long'term customer lo$alt$ %iff) 4 Page +ef) 1* AAC#!) +eflective Thinking #kills #kill) Application ."/ective) 1', 1,-) 9hat determines whether sellers pursue "asic relationships or full partnerships with customers? Answer) The t$pe of relationship a seller seeks to create with its customers is dependent on the num"er of customers and their profita"ilit$ A compan$ with man$ low'margin customers develops "asic relationshipsB a compan$ with /ust a few high'margin customers invests resources to create full partnerships %iff) * Page +ef) 1: AAC#!) +eflective Thinking #kills #kill) Critical Thinking ."/ective) 1', 1,:) Aow can a marketer increase 1share of customer1? Answer) The marketer can offer greater variet$ to customersB in addition0 the marketer can train emplo$ees to cross'sell and up'sell in order to market more products and services to e3isting customers %iff) * Page +ef) *1 AAC#!) +eflective Thinking #kills #kill) Application ."/ective) 1', 1,<) E3plain what marketers can e3pect from individuals in the customer relationship group classified as 1"utterflies 1 Answer) 1!utterflies1 are profita"le "ut not lo$al Marketers should en/o$ this t$pe of customer 1for the moment1 "ecause the$ soon flutter off Marketers should create profita"le and satisf$ing transactions with 1"utterflies01 then cease investing in them until the ne3t time around Marketers can e3pect transactions with "utterflies when conditions are optimal for the customer0 "ut the$ should not e3pect "utterflies to "ecome lo$al customers %iff) * Page +ef) ** AAC#!) +eflective Thinking #kills #kill) Application ."/ective) 1',

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1,=) A"le works in the marketing department of an international compan$ 8n what wa$s might A"le use modern technologies to conduct market research in order to learn more a"out and "etter serve his compan$&s customers? Answer) A"le could use videoconferencing to monitor customer focus groups discussing the compan$&s products and services in various locations A"le could use online data services to learn more a"out the needs and wants of his customers0 or he could create a customer data"ase for the compan$ to target individual customers with tailored offers %iff) * Page +ef) *: AAC#!) Fse of 8nformation Technolog$ #kill) Application ."/ective) 1'1,?) 8n what wa$s might even a local retailer find itself touched "$ glo"al competition? Answer) A local retailer might have glo"al suppliers and customers The retailer&s goods ma$ come from a"road0 or components of those goods ma$ "e produced or assem"led a"road 8n addition0 a local retailer ma$ also sell goods over the 8nternet to international customers %iff) * Page +ef) *< AAC#!) %$namics of the Hlo"al Econom$ #kill) Application ."/ective) 1'1-7) Aow is marketing "eing applied in the not'for'profit sector? Answer) Eirms in the not'for'profit sector use marketing to enhance their images0 to encourage donor marketing to attract mem"erships and donors0 and to design social marketing campaigns to encourage specific causes %iff) * Page +ef) *= AAC#!) +eflective Thinking #kills #kill) Application ."/ective) 1'-

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