Sample/practice exam 7 December 2017, questions and answers PDF

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Chapter 5—Business Marketing MULTIPLE CHOICE 1. A product is defined as a business product rather than consumer good on the basis of which of the following? a. its tangible attributes b. its intended use c. its physical characteristics d. its price ANS: A REF: p. 132

PTS: 1 OBJ: 1

DIF: Comprehension BLM: Higher order

2. Layton Bay, Inc. sells playground equipment to private schools and daycare centres, provincial and city governments, and families with preteen children. Layton Bay’s marketing task is to sell products that are classified as which of the following? a. business products only b. consumer goods only c. supplies d. both business and consumer goods ANS: D Products are classified as either business or consumer goods, based on the intended use of the product. Obviously, some of the computer products are sold for business use and some for personal use. PTS: 1 DIF: Application BLM: Higher order

REF: p. 132

OBJ: 1

3. Which of the following is the best example of a sale that could take place only in the business market? a. A university controller is ordering more computers for classroom labs. b. A park ranger is purchasing an azalea bush for her garden. c. A dentist is buying postage stamps to mail invitations to his son’s birthday party. d. A music store owner is ordering the newest Faith Hill CD for her mother. ANS: A When professionals buy items for personal use, these purchases are part of the consumer market. PTS: 1 DIF: Application BLM: Higher order

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REF: p. 132

OBJ: 1

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4. Business marketing includes which goods and services? a. those that are used for personal consumption b. those that advertise to consumers c. those that become part of another product d. those that are used to target consumers ANS: C Intended use is the key factor in the classification of a business versus a personal good. Use for personal consumption classifies the good or service as a consumer product. PTS: 1 OBJ: 1

DIF: Comprehension BLM: Higher order

REF: p. 132

5. Since GE began accepting bids via the Internet, the length of the bidding process in GE’s lighting division has been reduced from 21 days to 10. Since requesting the bids is easier, purchasing agents approach more potential vendors. The ability to locate more vendors has lowered the cost of goods by 5 to 15 percent. What does GE’s experience illustrate? a. how the Internet increases efficiency in data exchange b. how business marketing is using the Internet to become more efficient c. how using the Internet increases competition d. how the use of the Internet has influenced consumer markets to become larger and more powerful than business markets ANS: B Business markets will continue to be larger and more powerful than consumer markets with the use of the Internet. PTS: 1 DIF: Application BLM: Higher order

REF: p. 133

OBJ: 2

6. Which of the following is a benefit businesses experience from buying and selling their goods and services on the Internet? a. access to around-the-clock ordering b. a smaller selection of products and vendors c. higher prices due to increased competition d. less customer service ANS: A The need for customer service does not decrease even though the Internet may change the form in which it is provided. PTS: 1 OBJ: 2

DIF: Comprehension BLM: Higher order

REF: p. 133

7. What is a cooperative agreement between business firms? a. a joint contract b. a strategic alliance c. a co-marketing effort d. a global partner development strategy ANS: B OBJ: 3 5-2

PTS: 1 BLM: Remember

DIF: Definition

REF: p. 136-137

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8. Subaru and GM have been working together on the design for the new Chevy Borrego, a sporty combination of a truck and a car. Subaru allowed Chevy to use its all-wheel drive platform to build the vehicle, and the two car manufacturers worked together to develop the car’s turbo-charged, four-cylinder engine. In this example, Subaru and GM’s working together is an example of which of the following? a. a co-marketing effort b. a global partner development strategy c. a shared capital contract d. a strategic alliance ANS: D A strategic alliance is a cooperative agreement between business firms. PTS: 1 DIF: Application BLM: Higher order

REF: p. 136-137

OBJ: 3

9. Why do businesses typically enter into strategic alliances? a. to gain access to global markets b. to achieve economies of scale c. to facilitate entry of new products to old markets d. to share political risks ANS: B REF: p. 137

PTS: 1 OBJ: 3

DIF: Comprehension BLM: Higher order

10. What is a keiretsu? a. a form of relationship marketing that is illegal in Canada b. a type of strategic alliance commonly found in Japan c. an Internet site that offers its customers access to various languages which they can use to conduct their business d. a method of business e-commerce found in Asia ANS: B OBJ: 3

PTS: 1 BLM: Remember

DIF: Definition

REF: p. 138

11. In Japan, reciprocity and personal relationships contribute to the development of which of the following? a. an independent network of small retailers b. agricola c. amae d. keiretsu ANS: C OBJ: 3

PTS: 1 BLM: Remember

DIF: Definition

REF: p. 138

DIF: Definition

REF: p. 139

12. What is another name for producers? a. component networks b. original equipment manufacturers c. installers d. product providers ANS: B OBJ: 4

PTS: 1 BLM: Remember

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13. What is an OEM? a. an installer of original materials b. an originator of electronic merchandise c. a producer d. an organizational system used for inventory control ANS: C OBJ: 4

PTS: 1 BLM: Remember

DIF: Definition

REF: p. 139

14. What does OEM stand for? a. Original Equipment Manufacturers b. Organization of Electronic Manufacturers c. Organization of Environmental Monitoring d. Organization of Equipment Manufacturers ANS: A OBJ: 4

PTS: 1 BLM: Remember

DIF: Definition

REF: p. 139

15. Ranjit works for the Government of Ontario as an advocate of provincial growth and development. He devises ways to encourage businesses to relocate to the province. In other words, Ranjit is involved in business marketing. He has compiled a list of potential businesses that might be willing to relocate to Ontario. Which of the following possible clients should he include in his list? a. companies that have growing sales b. any family that takes an annual vacation c. newlyweds d. families that enjoy hiking ANS: A The other “clients” are end-user consumers, not business customers. PTS: 1 DIF: Application BLM: Higher order

REF: p. 139

OBJ: 4

16. A particular segment of the business market includes those individuals and organizations that purchase goods and services for the purpose of making a profit. They achieve this goal by using purchased goods and services to make other goods, to become part of other goods, or to facilitate the daily operations of the organization. In which segment of the business market is this group? a. reseller b. wholesaler c. producer d. institution ANS: C OBJ: 4

PTS: 1 BLM: Remember

DIF: Definition

REF: p. 140

17. What are businesses that buy finished goods and sell and distribute them for a profit? a. business facilitators b. resellers c. inventory carriers d. distribution networks ANS: B OBJ: 4 5-4

PTS: 1 BLM: Remember

DIF: Definition

REF: p. 140

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18. Rice Epicurean in London, Ontario, is an exclusive outlet for Honey Baked brand hams and See brand candies. In the spring, it markets Easter baskets and all the makings for personalized Easter baskets. How would Rice Epicurean best be classified? a. as a producer b. as an inventory carrier c. as a distribution network d. as a reseller ANS: D Rice Epicurean purchases finished goods and resells them; it does not produce the goods or change their form. PTS: 1 DIF: Application BLM: Higher order

REF: p. 140

OBJ: 4

19. Hensley Poultry is a wholesaler that buys poultry food and health products from Provini, Inc.; feeding systems from Big Dutchman, Inc.; and incubation systems from Copca Corp.; which it then sells to poultry producers and farmers’ cooperatives in Alberta. How is Hensley Poultry best classified? a. as a reseller b. as a producer c. as an inventory carrier d. as a distribution network ANS: A OBJ: 4

PTS: 1 DIF: Application BLM: Higher order

REF: p. 140

20. What percentage of the entire Canadian workforce is employed by the retail sector? a. 52 percent b. 72 percent c. 32 percent d. 12 percent ANS: D OBJ: 4

PTS: 1 BLM: Remember

DIF: Definition

REF: p. 140

21. What does MASH stand for? a. Municipal Academic Social and Hospitals b. Manufacturer and Stakeholder c. Manufacturing Aggregate Services Holdings d. Municipal Accreditation Services Handling ANS: A OBJ: 4

PTS: 1 BLM: Remember

Copyright © 2012 Nelson Education Limited

DIF: Definition

REF: p. 140

5-5

22. What is the largest single category in retail sales in Canada? a. consumer electronics sales b. sporting goods sales c. food sales d. apparel sales ANS: C Food sales in Canada are over $30 billion annually. PTS: 1 BLM: Remember

DIF: Definition

REF: p. 140

OBJ: 4

23. One segment of the business market has primary goals that differ from the ordinary business goals such as profit, market share, or return on investment. This segment includes many schools, religious institutions, and civic clubs. What is it called? a. the service market b. the reseller market c. the institution market d. the provider market ANS: C Institutions such as schools, religious institutions, and hospitals have service or activity goals, but not profit goals, yet are an important business market. PTS: 1 BLM: Remember

DIF: Definition

REF: p. 141

OBJ: 4

24. Which of the following is the BEST example of an institution market? a. a company that does not trade its stock on an international stock exchange b. Tau Kappa Epsilon fraternity c. the Canadian Real Estate Association d. a company that sells exclusively on the Internet ANS: B Institutions include schools, religious institutions, and hospitals have service or activity goals, but not profit goals. PTS: 1 DIF: Application BLM: Higher order

5-6

REF: p. 141

OBJ: 4

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25. Organon Teknina sells inexpensive equipment to detect E. coli, listeria, or salmonella bacteria in food. The company serves not-for-profit institutions that need to regularly check food quality. Organon Teknina would be LEAST likely to sell to which of the following? a. Montgomery municipality school system b. a large paediatric hospital c. a chain of Mexican restaurants d. a chain of religious institution–sponsored retirement homes ANS: C The only example of a for-profit organization in the list is restaurants, and they would not be a customer of an institutional-only food supplier. To answer this question, students will have to remember that institutions are not operated for profit. PTS: 1 DIF: Application BLM: Higher order

REF: p. 141

OBJ: 4

26. Which type of customer do business marketers serve? a. teenagers b. farmers’ markets c. private consumers d. institutions and nonprofits ANS: D Intended use, either for business or personal consumption, determines if a customer is a business customer. Private consumer signals personal or family consumption. PTS: 1 BLM: Remember

DIF: Definition

REF: p. 142

OBJ: 4

27. What would a Canadian company that manufactures the lighted signs used by various governmental departments of highways on the sides of roads, at outdoor sports arenas, for restaurant promotion, and in amusement parks use to facilitate its market segmentation and targeting if it wanted data that was readily available and usable? a. the North American Industry Classification System b. a large amount of marketing research, including scanner data and focus groups c. other competing firms as a strategic alliance referral service d. derived demand ANS: A NAICS codes enhance companies’ marketing efforts. PTS: 1 DIF: Application BLM: Higher order

Copyright © 2012 Nelson Education Limited

REF: p. 142

OBJ: 5

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28. The government uses a system called NAICS to classify North American business establishments. What does NAICS stand for? a. Non-American Industrial Corporation System b. North American Institution Code System c. North and South American Institutional Coding Services d. North American Industry Classification System ANS: D OBJ: 5

PTS: 1 BLM: Remember

DIF: Definition

REF: p. 142

29. Imagine you are the research director of a major industrial marketing firm. You need to select an NAICS code that defines the most homogenous group of companies in a particular group of highly competitive companies . Which of the following codes might you use? a. 7 b. 532 c. 19 d. 7432 ANS: D The more digits in a code, the more homogenous the group will be. PTS: 1 DIF: Application BLM: Higher order

REF: p. 142

OBJ: 5

30. NAICS data are helpful for analyzing, segmenting, and targeting markets. Who developed the system? a. the North American Free Trade Association partners b. large manufacturers in the United States and Canada that produce similar goods c. the Canadian government d. Brazil, Chile, Argentina, Canada, and the United States working together in a joint venture ANS: A NAICS is an industry classification system that replaced the standard industrial classification system in 1997 for the North American Free Trade Association. The partnership included the United States, Canada, and Mexico. PTS: 1 BLM: Remember

DIF: Definition

REF: p. 142

OBJ: 5

31. What can managers use the NAICS data to do? a. identify potential new customers b. classify consumer behaviour c. eliminate risk d. determine purchase motives ANS: A When compared from year to year, NAICS data can pinpoint which industries are growing and, it is hoped, identify market opportunities. PTS: 1 OBJ: 5

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DIF: Comprehension BLM: Higher order

REF: p. 142

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32. The demand for consumer goods often affects the demand for business products. What is this characteristic of business markets called? a. inelastic demand b. derived demand c. elastic demand d. fluctuating demand ANS: B OBJ: 6

PTS: 1 BLM: Remember

DIF: Definition

REF: p. 143

33. The demand for polyethylene film used to wrap meat ready for sale is dependent on consumers’ demand for meat. This is an example of what type of demand? a. derived b. inelastic c. elastic d. joint ANS: A Derived demand for a business product comes from the original consumer demand. PTS: 1 DIF: Application BLM: Higher order

REF: p. 143

OBJ: 6

34. When the demand for packaged beer fell by 8 percent in one year, why did the demand for aluminum beer cans and glass beer bottles also fall? a. because the demand for beer containers is an example of elastic demand b. because the demand for beer containers is an example of fluctuating demand c. because the demand for beer containers is an example of inelastic demand d. because the demand for beer containers is an example of derived demand ANS: D The demand for beer containers is driven by the consumer demand for beer; therefore, the containers have a derived demand. PTS: 1 DIF: Application BLM: Higher order

REF: p. 143

OBJ: 6

35. Bábolina Tetra is a Hungarian company that has genetically created a chicken guaranteed to produce uniform brown eggs with strong shells. The company breeds and sells young chicks to farmers all over Europe who want to sell eggs in local markets. When consumers began to worry about cholesterol content and stopped eating as many eggs, the demand for the Tetra hen also declined. This is an example of what type of demand? a. multiplying b. inelastic c. derived d. elastic ANS: C Demand for hens is derived from consumers’ demands for eggs, which has declined. PTS: 1 DIF: Application BLM: Higher order Copyright © 2012 Nelson Education Limited

REF: p. 143

OBJ: 6

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36. When will an increase or decrease in the price of a product not significantly affect demand for the product? a. when demand for a product is elastic b. when demand for a product is responsive c. when demand for a product is derived d. when demand for a product is inelastic ANS: D OBJ: 6

PTS: 1 BLM: Remember

DIF: Definition

REF: p. 144

37. Lanover Manufacturing supplies windshield wiper blades to General Motors and Ford. A sudden jump in the price of rubber and its substitutes has forced Lanover and other wiper blades manufacturers to double the price of the wiper blades. Sales volume for wiper blades has not been affected by this increase in price. Why did the price not change? a. because demand for windshield wiper blades is secure b. because demand for windshield wiper blades is elastic c. because demand for windshield wiper blades is resistant d. because demand for windshield wiper blades is inelastic ANS: D A change in price has not really made a change in quantity demanded; therefore, the good is price inelastic. PTS: 1 DIF: Application BLM: Higher order

REF: p. 144

OBJ: 6

38. Due to rapidly rising overhead costs and increases in raw material prices, Framarx Corporation was forced to raise the price of its waxed and coated paper by 35 percent. (The paper is used between frozen hamburger patties to keep the patties from freezing together.) Framarx is the leading manufacturer in this industry, and its competitors will follow suit. While the sales force for Framarx believes the price increase will result in a drop in sales, its marketing manager disagrees because the demand for the waxed and coated paper is more than likely which of the following? a. derived b. resistant c. inelastic d. elastic ANS: C A good is price inelastic if a change in price causes little or no change in demand. Paper used in packaging such as between hamburger patties is a fairly insignificant cost item in the production of hamburger and might even be considered a necessity item. PTS: 1 DIF: Application BLM: Higher order

5-10

REF: p. 144

OBJ: 6

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39. During the first years of this century, the number of packages arriving at households has more than doubled. An increase in the price of the cardboard boxes in which these packages are shipped will have little effect on the amount of shipping done; the demand for the boxes will continue to increase. Therefore, what is the demand for the cardboard boxes? a. bundled b. elastic c. derived d. inelastic ANS: D A product is price inelastic if a change in price causes little or no change in demand. Boxes are a fairly insignificant cost item in the overall costs of a product and might even be ...