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MBA 706 EXAM QUESTIONS WITH
COMPLETE SOLUTIONS 100% CORRECT
“What is marketing? Definition from AMA - CORRECT ANSWER the activity, set of
institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large."
"What is Marketing? Definition from Philip Kotler - CORRECT ANSWER CCDVTP = Create,
Communicate, and Deliver Value to a Target market at a Profit. •Create Value = Product Management •Communicate Value = Brand Management •Deliver Value = Customer Management"
"Evolution Of Modern Marketing - CORRECT ANSWER •Product/production orientation -
e.g., Ford model T -Focus on building a better gadget. •Sales orientation -Focus on convincing the customer that your product works best for them. •Customer orientation -Focus on identifying customers' wants BEFORE formulating attractive solutions."
"Measuring Marketing's Effectiveness - CORRECT ANSWER •Marketing is no longer a
function within a firm, but more of a systematic way of thinking •Marketing is everywhere •Sometimes the effectiveness of marketing programs is not easy to quantify."
"Marketing Management Framework - CORRECT ANSWER Who: 5 C's
Why & How: STP What: 4 P's"
"What are the 5 C's? - CORRECT ANSWER customer, company, context, collaborators,
competitors"
"What does STP stand for? - CORRECT ANSWER Segmentation, Targeting, Positioning"
"What are the 4 P's? - CORRECT ANSWER Product, Price, Place, Promotion"
"What must always come first in the 4 P's? - CORRECT ANSWER Product"
"What are Shopping Purchases? - CORRECT ANSWER •Medium involvement; not as
frequently purchased. •Consumers spend time and effort prior to purchase."
"What are Specialty Purchases? - CORRECT ANSWER •High involvement; occasional
purchases, often more expensive, require more thought. •Customers put much effort into the purchase."
"What are the types of Business Purchases? - CORRECT ANSWER Straight Rebuy, Modified
Rebuy, and New Buy"
"What is Straight Rebuy? - CORRECT ANSWER -Low involvement; purchase what was
purchased last time with little or no thought"
"What is Modified Rebuy? - CORRECT ANSWER -Medium involvement; something about the
purchase is altered, requiring some thought"
"What is New Buy? - CORRECT ANSWER -High involvement; purchase something that
hasn't been purchased before requiring much thought and planning"
"What are Maslow's Hierarchy of Needs? (Pyramid) - CORRECT ANSWER 1. Food, Water,
Sleep, Sex
- Safety, Security
- Friendship, Love, Belonging
- Self-Esteem, Respect
- Self-Actualization"
"sociocultural differences - CORRECT ANSWER social class, age, gender, ethnicity, and
nationality—influence consumer impressions and preferences and produce shopping patterns"
"What is segmentation? - CORRECT ANSWER •Breaking the market into more homogeneous
consumer groups •A single product, price, or promotion is unlikely to satisfy all consumers' needs."
"Market segment - CORRECT ANSWER a group of consumers who respond in a similar way
to a given set of marketing efforts or A group of customers who share similar inclinations toward a brand"
"Early cash recovery - CORRECT ANSWER Prices are set to generate a high cash flow to solve
problems of liquidity"
"Discouraging others from entering the market: - CORRECT ANSWER Prices are set low as a
barrier to entry which also signals the possibility of price war"
"Selective distribution - CORRECT ANSWER Used for consumer durables: consumers will
usually "compare shopping" ex: Home appliances"
"Exclusive distribution - CORRECT ANSWER Used when companies limit intermediaries to
one per geographical area ex: exclusively at nordstrom, exclusively at Neiman Marcus"
"Selective channel Members - CORRECT ANSWER - Economic criteria
- control criteria
- Adaptive criteria
- End-User considerations
- product characteristics
- Manufacturer's capability and resources"
"Economic criteria: - CORRECT ANSWER Cost, Revenue, Profit"
"Control Criteria: - CORRECT ANSWER Degree of influence, motivation, and conflict among
channel members"
"Adaptive Criteria: - CORRECT ANSWER Degree of flexibility in responding to the changing
environment"
"End-user considerations: - CORRECT ANSWER Where consumers would shop and buy"
"Product characteristics: - CORRECT ANSWER Complexity, special application,
requirements, service needed"
"Manufacturer's capability and resources: - CORRECT ANSWER Bargaining power and
channel control"
"3 "Soft" elements of the marketing mix - CORRECT ANSWER -People: well trained personnel
- Physical evidence: physical environment: cleanliness, decoration, how staff are dressed: should convey a message about the quality of the product or service
- Process management: how costumers experience the brand from the point of initial contact to the point of last contact
- use of new tech to provide better services at lower costs: self checkout, info kiosks etc."
"Outsourcing & Resourcing decisions Benefits - CORRECT ANSWER - Cost savings: reduces
overhead costs and investment in infrastructure
- Quality improvement: outsourcing firms (service providers) specialize in delivering services may provide high quality services
- capacity management: firms may not perform all business functions effectively by themselves
- Effecting change: good opportunity to initiate change
- time to market: Reduces the overall time to market, therefore firms are able to deliver faster at lowers costs
- time zones: tasks can be performed 24/7 because of different time zones
- Growth: potential to grow without increasing capacity"
"Two most common forms of outsourcing - CORRECT ANSWER - almost all companies
outsource in some way
- information technology 2)business process ex: apple (manufacturing, IBM (PC Manufacturing, IT) P&G (IT, facilities management employee service) Nike (Manufacturing) Banking industry (business process: customer service)"
"Offshoring - CORRECT ANSWER Offshore business operations from one country to another"
"Onshore/reshore - CORRECT ANSWER Business operation is moving to areas close to
customers"
"Two factors that need to be considered in relation to offshoring and reshoring - CORRECT
ANSWER - Consumer's concern for quality: made in USA vs. Made in China
- Deliver good customer service"
"quality: Physical goods: - CORRECT ANSWER TQM- continuous improvement in
performance to delight customers"
"Quality: service: - CORRECT ANSWER Reliability, accessibility, credibility, security,
knowledge, responsiveness, competence, courtesy, communication, and tangibles"
"New Marketing Mix (How many Ps?) - CORRECT ANSWER •Today, the 4Ps have been
extended to even 7Ps, 8Ps, ... and 20Ps. •Some examples of those additional Ps: participation, personnel, personality of a store/brand, etc."
"Why do we use the 4 P's? - CORRECT ANSWER •These Ps are the tools that firms can
use/manipulate to achieve their goals." "What does a wise firm do when in response to spatial and temporal changes in market segments,
industry structure, and competitors' behavior. - CORRECT ANSWER alters its strategy"
"What do decisions on the 4 P's Affect? - CORRECT ANSWER who buys from the firm and
how many (quantity) they buy, and ultimately affect the profitability of the firm" "What do consumers consider when making decisions regarding when and where they will shop?
- CORRECT ANSWER the benefits and the costs of shopping"
"What benefits do consumers consider? - CORRECT ANSWER -Utilities derived from
purchasing goods and services. -Physical benefits: exercising -Psychic benefits: e.g., retail therapy, satisfaction, social interaction. -Information gathering: brands, products, etc"
"What costs do consumers consider? - CORRECT ANSWER -Monetary costs: dollars
-Physical energy: e.g., driving, walking around, etc. -Psychic energy: e.g., interacting with others. -Time: time to get to the store + time spent in the store."
"What do firms attempt to do? - CORRECT ANSWER maximize their profits, subject to their
internal & external environments"
"Simple Economic Model - CORRECT ANSWER a retailer's profits = sales revenue - costs
Sales Revenue = ∑_1^𝑛 𝑃𝑟𝑖𝑐𝑒 ∗𝑄𝑢𝑎𝑛𝑡𝑖𝑡𝑦= 〗P1 * Q1 + P2 * Q2 + .... + Pn * Qn"
"What is a firms costs? - CORRECT ANSWER costs associated with selling the goods"
"what is a firms quantity? - CORRECT ANSWER determined by consumers - price (budget),
product itself (utilities), place (physical energy required), promotion (budget), competitor's offerings, & other factors"
"What does marketing do? - CORRECT ANSWER •brings in customers, and customers bring
in money. •helps to build brand equity and the company's reputation. •helps engage the customer and the company can learn from its customer relationships. •helps a company stay ahead of the competition."
"What can be Marketed? - CORRECT ANSWER Goods, Services, Experiences, Events, People,
Places, Information, Ideas, and Companies"
"Are the 5Cs, STP, and 4Ps interdependent? - CORRECT ANSWER Yes, 5Cs, STP, and 4Ps are
interdependent and marketers must understand the interdependencies"
"What are the known, reliable patterns that comprise consumer behavior? - CORRECT
ANSWER -The phases consumers go through when making a purchase
-The different kinds of purchases that consumers make -How consumers sense and perceive, become motivated, form attitudes, and make decisions -The cultural differences that influence consumers"
"What is the Purchase Process? - CORRECT ANSWER Pre-Purchase, Purchase, and Post-
Purchase"
"What is the Pre-Purchase phase in the purchase process? - CORRECT ANSWER •Customers
recognize a need/desire. -Some are heavily marketer influenced; some are not. e.g., Having trendy clothes vs. needing to eat •Customers search and evaluate products that address their needs. e.g., Conduct online search, ask friends, etc. •Customers create a consideration set. -All brands considered as candidates for purchase."
"What is the Purchase phase in the purchase process? - CORRECT ANSWER •Customers
narrow the consideration set. -Customer may delay the purchase. -Customer may decide not to purchase. •Customers decide on retail channel. e.g., retail free riding"
"What is the Post-Purchase phase in the purchase process? - CORRECT ANSWER •Customers
assess the purchase and the purchase process. •Customers determine satisfaction. -Did the customer get what was expected? •Customers' level of satisfaction leads to:
•Get attention (e.g., smelling the Cinnabon store) •Allow product sampling (e.g., perfume in magazines) •Taste can: •Distinguish one brand from another (e.g., Coke vs. Pepsi) •Touch can: •Convey brand imagery (e.g., well-designed products compared to value-designed products)"
"subliminal advertising - CORRECT ANSWER Advertisements with messages supposedly
embedded in illustrations just below the threshold of perception. •Has been debunked by research."
"Mere Exposure - CORRECT ANSWER •Repeated exposure to an ad brings familiarity and a
positive feeling."
"Perceptual fluency - CORRECT ANSWER the ease with which information is processed
•Customers may pay the most attention to the content of a message. •However, the colors, font, etc. make a brand impression as well."
"Learning, Memory, and Emotions - CORRECT ANSWER •Sensory and perceptual
impressions can become brand associations. Learning is the process by which associations get past the sensory and perception stages into short-term memory and then, with repetition and elaboration, into long-term memory"
"Why do marketers use Maslow's Hierarchy of Needs? - CORRECT ANSWER •Marketers
may identify their product with one of Maslow's needs. -Many brands are associated with a sense of belonging, social acceptance, and respect. •Marketers may identify products with aspiration groups. •Marketers may offer an extended brand line for customers at different levels in Maslow's hierarchy. •Marketers use hierarchy for positioning."
"How do Attitudes & Decision Making influence consumers? - CORRECT ANSWER -Will buy
a brand -Repeatedly purchase it -Become loyal -Recommend it to others, etc. •Attitudes are a mix of beliefs and importance weights: -Beliefs (e.g., I think Sprite has caffeine) -Importance (e.g., I think having caffeine is important) -Customer may differ on both importance and beliefs"
"What are the Differences in System 1 and System 2 thinking? - CORRECT ANSWER •System
-Automatic, unconscious -Efficient, heuristics -Routine decisions -May optimize a consumer's time •System 2 -Effortful, conscious -Reasoned, thought through -Complex decisions -May optimize certain product features"
"Segmentation falls between one-to-one and mass marketing - CORRECT ANSWER -As
segment size increases, segments become more heterogeneous. -As segment size decreases, segments become less profitable. -Marketers need the "optimal" segment size."
"Niche (Segmentation) - CORRECT ANSWER Targeting small market that firm serves well"
"Demographics (Segmentation) - CORRECT ANSWER Gender, age, household composition,
stage in life cycle, education, income, ethnicity •Demographic variables are clear and easy to recognize. -However, they border on being simplistic stereotypes"
"Geographic (Segmentation) - CORRECT ANSWER distinctions between customers can
change preferences/needs. -Cultural differences can exist between countries or within a country. e.g., residents of southern U.S. states prefers spicier food. -Urban living is different than small town. e.g., NYC residents want smaller dishwashers. -Hot climates require different products than cold climates. e.g., Minnesotans need snowblowers."
"Psychological (Segmentation) - CORRECT ANSWER •Attitudes (e.g., favorable attitude
toward "green" products) •Knowledge and awareness (e.g., don't know about the product) •Wants and needs (e.g., need for safety) •Affiliations (e.g., members of the AMA) •Traits (e.g., extroverts who want to socialize) •Expertise & involvement (e.g., new motorcycle enthusiasts) •Brand attributes sought (e.g., low price and red color) •Risk orientation (e.g., risk-adverse late technology adopters) •Aspirations (e.g., want to be a better cook)"
- this type of concentrated marketing efforts can develop a strong market position ( brand image of specialist)"
"Survival - CORRECT ANSWER Prices are reduced to below cost in order to maintain a
sufficient cash flow"
"Return on Investment - CORRECT ANSWER Prices are set to achieve a predetermined level
of return on investment"
"Market stabilization - CORRECT ANSWER Firms set prices to minimize the possibility of
market leader retaliation and to ensure market stability"
"Maintenance and improvement of market position - CORRECT ANSWER Prices are set to
increase market share and minimize the possibility of price wars"
"Pricing to reflect product differentiation - CORRECT ANSWER Prices are set differently for
each market segment and to create different perceptions of their product's value ex: car manufacturers"
"Market skimming - CORRECT ANSWER Firms enter the market with a high price nd
gradually lowers the price to gain more customer's ex: high-tech products"
"Place: Channel management - key decision areas - CORRECT ANSWER - formulate channel
strategy
- design channel structure
- select channel members
- motivate channel members
- coordinate channel strategy with the marketing mix
- evaluate channel member performance"
"Formulate channel strategy - CORRECT ANSWER - objectives: how, when, and where the
company offering should be made available to the target markets
- importance of a channel strategy depends on whether: ::distribution is important to target market ::distribution can provide a differential advantage over competitors ;; Distribution may become a competitive vulnerability ;; Channel coordination may become a competitive advantage"
"Design Channel Structure: 3 channel options - CORRECT ANSWER - Direct marketing
- sales force
- intermediary marketing channel"
"Intermediary Marketing channel - CORRECT ANSWER - merchants
- agents -Facilitators ex: P&G"
"Channel Management Design Channel structure (3 strategies) - CORRECT ANSWER -
Intensive distribution
- Selective distribution
- Exclusive distribution"
"Intensive distribution: - CORRECT ANSWER used for products of high value, low value,
mass demand Ex: soft drinks"
"Integrating all elements of the marketing mix - CORRECT ANSWER - all elements are
consistent in representing the brand
- should create a competitive advantage
- should match the resources available to the organization"
"Relationship between price adn quatities supplied - CORRECT ANSWER - as price goes up,
quantities supplied goes up
- as price decreases, supply decreases"
"Price elasticity of supply - CORRECT ANSWER % change in quantities supplied / % change
in price
- commonly affected by changes in the supply chain and technological developments"
"Theory of the firm - CORRECT ANSWER - In economics, firms are assumed as
entrepreneurs who behave rationally -Firms try to maximize their profits, when marginal cost equals marginal revenue, profit is maximized"
"Transaction cost: - CORRECT ANSWER Cost of providing goods or services through the
market: ex: search and information costs, bargaining and decision costs, and policing and enforcement costs. -Firms will decide on whether in-house production (within the firms) Vs. outsourcing (in the market)" "Transaction cost theory (Williamson)
