Marketing Practice Test

Chapter 4

1. Which of the following is NOT an example of a change in TECHNOLOGY:
A.machines are developed to assemble defect-free electronic components.
B.robots on a production line make it possible to lower cost.
C.a manufacturer of frozen food is finding that consumers prefer containers that can go from the freezer direct to a microwave oven.
D.the government passes a law that requires car manufacturers to use antilock brakes.
E.a camera producer finds a way to enable a camera to store pictures electronically--without film.

2. The Federal Trade Commission Act of 1914 focuses on:
A.unreasonable practices related to product warranties.
B.unfair methods of competition.
C.tying contracts.
D.attempts to monopolize.
E.mergers between competitors.

3. When evaluating the potential of possible opportunities (product-market strategies), a marketing manager should:
A.avoid using quantitative criteria because they tend to oversimplify the problem.
B.look at each opportunity on its own, since there is no good way to compare different plans.
C.look only at internal resources, since they are controllable.
D.evaluate each opportunity over the life of the project, since short-term losses may hide long-term profitability.
E.All of the above are true.

4. In recent years the Federal Trade Commission has been lenient in allowing mergers between firms that had been competitors. When considering a merger, companies should take this aspect of the _____________ environments into consideration.
A.cultural and economic
B.technological and legal and cultural
D.political and economic and political

5. The Robinson-Patman Act specifically aims at:
A.price discrimination.
B.deceptive advertising.
C.firms that rely on salespeople who sell "door to door."
D.attempts to monopolize.
E.unfair methods of competition.

6. The basic objective of a firm should be to:
A.engage in some specific business activity that will perform a socially and economically useful function.
B.develop an organization to carry on the business and implement its strategies.
C.earn enough profit to survive.
D.All of the above.
E.Only B and C above.

7. Regarding GDP and GNP:
A.GDP includes foreign income earned in a country, but GNP does not.
B.Both GDP and GNP are widely used measures of national income.
C.GDP income measures can give the impression that people in less-developed nations have more income than they really do.
D.All of the above are true.
E.A and B are true, but not C.

8. GE's planning grid approach really the same thing as the total profit approach.
B.overemphasizes short term profitability. superficial because it considers only ROI and expected market share, and ignores other possibly important factors.
D.could be adapted easily by another firm with different objectives.
E.doesn't work because different managers usually come to different conclusions given the subjective evaluations involved.

9. More women working outside the home and greater interest in leisure are examples of changes in the ______________ environment.
A.cultural and social.

10. Which of the following laws is primarily concerned with product warranties?
A.the Robinson-Patman Act
B.the Federal Trade Commission Act
C.the Magnuson-Moss Act
D.the Sherman Act
E.There are no laws regulating product warranties.

11. A widely used measure of income in most countries is: consumption expenditures.
B.disposable personal product.
C.population times GNP.
D.socio-economic product.
E.gross national product.

12. A Metropolitan Statistical Area (MSA):
A.contains one city of 500,000 or more. an integrated economic and social unit having a large population nucleus. a consolidated set of cities and suburbs.
D.consists of one or more counties which must contain a total population of at least 2,000,000.
E.Both C and D are required for an area to be designated an MSA.

13. American legislative and economic thinking assumes that:
A.firms must have their prices approved by the Federal Trade Commission.
B.the free enterprise system is dying.
C.anticompetition laws are needed to stop large firms from dominating small firms.
D.government planners are needed to run the economy.
E.competition among many small firms helps the economy.

14. A company would be charged with product warranty violations under:
A.the Robinson-Patman Act
B.the Federal Trade Commission Act
C.the Magnuson-Moss Act
D.the Total Quality Management Act
E.There are no laws regulating product warranties.

15. Regarding population growth in the world,
A.less-developed countries generally experience the fastest growth. will take almost five times as long for the populations of the U.S. and Australia to double compared to Kenya and Pakistan.
C.Population growth in Japan and Europe is even slower than in the U.S.
D.All of the above are true.
E.None of the above is true.

16. With regard to a firm's resources (when searching for attractive opportunities):
A.lack of financial strength is often a barrier to entry.
B.large companies always have an advantage over smaller companies.
C.a good marketing strategy will probably use new facilities rather than present facilities.
D.a patent owner has a 5-year monopoly to develop its product.
E.a manufacturer needs skilled production people more than skilled salespeople.

17. Gross national product (GNP) is the: market value of goods and services produced in an economy in a year. market value of goods (but not services) consumed in an economy in a year. market value of goods and services consumed in a year. market value of goods (but not services) produced in an economy in a year. cost of producing all goods and services sold in a year.

18. According to the General Electric strategic planning grid, a business that is the strongest in its industry: a good prospect, provided the industry has at least medium attractiveness.
B.should automatically receive a large investment.
C.should still be considered as a "no-growth" prospect unless the industry attractiveness is high.
D.All of the above are true.
E.None of the above is true.

19. General Electric's "strategic planning grid":
A.requires subjective judgments about business strengths and industry attractiveness.
B.requires that all opportunities be judged either "High" or "Low."
C.substitutes quantitative estimates for management judgment.
D.focuses on market share and market growth rate.
E.All of the above are true.

20. When setting objectives for the whole firm, TOP MANAGEMENT should:
A.set objectives that focus on the highest possible immediate profit potential.
B.stick to general objectives--in order to maintain flexibility.
C.set objectives beyond what can actually be achieved--so everyone will work harder.
D.involve the marketing manager in the objective setting process.
E.all of the above.

21. During the 1990s, the largest increase in the U.S. population occurred in the:
A.65 or over age group.
B.18-24 age group.
C.25-44 age group.
D.5-17 age group.
E.45-64 age group.

22. Which of the following is an example of the cultural and social environment?
A.Growing popularity of exercise.
B.Increased desire for satisfaction with life.
C.Growing acceptance of women in business.
D.All of the above.
E.None of the above.

23. "Consumerism" and "nationalism" are issues in the ______________ environment.

24. Which of the following is least likely a result of shifts in the cultural and social environment?
A.A toy manufacturer recalls a playpen with a defective latch and Toys 'R' Us stores remove them from the shelf.
B.Haagen-Dazs introduces a nonfat yogurt that is also "low cal."
C.Sony recruits more women graduates for sales management positions.
D.BMW builds its new plant in South Carolina because of the willingness of "Sun Belt" workers to put in a "full day's work."
E.Domino's Pizza finds that demand for pizza delivered at home has expanded as more consumers are willing to pay for more convenience.

25. Product warranties are the focus of the ______________ Act.
C.Federal Trade Commission

26. The Sherman Act and the Clayton Act:
A.were designed to limit competition.
B.were passed during the rash of corporate takeovers in the 1980s.
C.were intended to protect large producers.
D.All of the above are true.
E.None of the above is true.

27. Which of the following countries has the HIGHEST literacy rate?
A.United States

28. A Consolidated Metropolitan Statistical Area smaller than an MSA. a large metropolitan statistical area--with over 1 million population. the central city area of a large city. a group of small towns or cities that, taken together, have a total population of 100,000.
E.None of the above is true.

29. Regarding the current legal environment facing U.S. marketing managers,
A.the focus has shifted from "let the seller beware" to "let the buyer beware."
B.the emphasis is now on restricting monopolies.
C.state and local laws rarely are important because they are always less restrictive than federal laws.
D.the emphasis is now on protecting consumers.
E.All of the above are true.

30. General Electric's "strategic planning grid":
A.ignores some important issues--such as competitive structure and the environmental impact of a plan.
B.requires that all opportunities be judged either "High" or "Low."
C.substitutes quantitative estimates for management judgment.
D.focuses on market share and market growth rate.
E.None of the above is true.

31. The marketing manager for a financial services firm knows that customer preferences for mutual funds and bond accounts will differ depending on the current interest rate. She must plan her offerings with the _____ environment in mind.

32. Using General Electric's "strategic planning grid," an opportunity rated "medium" in terms of industry attractiveness and "high" in terms of business strengths would be evaluated as: no growth. growth.
D.could be yellow, red, or green--because the grid suggests that opportunities with medium ratings need more analysis.

33. A "Buy American" campaign is an example of:

34. Which of the following countries has the highest population density?
A.United States

35. Along with studying trends in the environment, a first step in looking for attractive opportunities is to:
A.decide which product-markets the firm will enter.
B.find new markets for present products.
C.estimate product-market potentials.
D.hire a marketing strategy planner.
E.understand the resources and objectives of the firm.

36. A Metropolitan Statistical Area (MSA):
A.must contain one city of 10,000 or more people. an urbanized area with a population of at least 2,000,000 people. an integrated economic and social unit with a large population nucleus.
D.usually includes several cities.
E.Both B and D are true.

37. With respect to marketing opportunities that depend on the age distribution of the U.S. population,
A.sales of products targeted at senior citizens are likely to rise between 2000 and 2010.
B.the size of the 45-64 age group will increase more rapidly between 2000 and 2010 than any other group.
C.the average age of the U.S. consumer is rising.
D.the 18-24 year old group will see dramatic growth between 2000 and 2010.
E.All of the above are true.

38. People who move to a new home (that is, "mobile" consumers):
A.are split about 70 percent for "local" (same county) and 30 percent for long-distance moves.
B.represent only about 5 percent of all Americans in any given year.
C.create opportunities for marketers only when a long distance move is involved.
D.are not good targets for most products since buying a new house usually consumes most of their discretionary income.
E.All of the above are true.

39. The Wheeler-Lea Amendment specifically aims at:
A.product safety.
B.unfair or deceptive practices.
C.tying and exclusive dealing contracts.
D.mergers and acquisitions.
E.product warranties.

40. Safety standards for products such as bicycles are set by the:
A.U.S. Department of Transportation.
B.Federal Trade Commission.
C.Office of Consumer Affairs.
D.Food and Drug Administration.
E.Consumer Product Safety Commission.

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