STR 581 Final Exam SET 1
1) ________ consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers.
A. A promotional campaign
B. A marketing research system
C. A marketing information system
D. A marketing intelligence system
E. A marketing database
2) 3M, Hewlett-Packard, Lego, and other companies use the ________ to manage the innovation process.
A. venture team
B. joint- venture system
C. stage-gate system
D. new product “team”
E. skunk works
3) ________ is the difference between the prospective customer’s evaluation of all the benefits and all the costs of an offering and the perceived alternatives.
A. Customer perceived value
B. Failure avoidance rate
C. Perceived usefulness
D. Report rating
E. Competitors market share rate
4) A company can take several steps to improve the quality of its marketing intelligence. If the company purchases competitive products for study, attends open houses and trade shows, and reads competitors’ published reports and stockholder information, the company is using ________ to improve the quality of its marketing intelligence.
A. advisory panels
C. sales force surrogates
D. external networks
E. customer feedback systems
5) A ________ is a set of procedures and sources managers use to obtain everyday information about developments in the marketing environment.
A. marketing intelligence system
B. marketing information system
C. marketing research system
D. product management system
E. vertical system
6) A(n) ________ is any good, service, or idea that is perceived by someone as new.
A. new idea
D. creative product
7) Total customer satisfaction is the general feeling of pleasure or disappointment that results from comparing perceived performance to expectations. To achieve total customer satisfaction, organizations need to_____________.
A. Lower expectations
B. Spend more money
C. Develop marketing campaigns
D. Manage customer experiences
E. Lower prices
8) Particularly when shopping for ego-sensitive products such as perfumes and expensive cars, many consumers use price as an indicator of ________.
9) A ________ consists of a group of customers who share a similar set of needs and wants.
A. market segment
B. market level
C. market slice
D. market group
E. market target
10) A firm has to consider many factors in setting its pricing policy. We list these as a six-step process. Which of the following is NOT one of these steps?
A. Selecting the final price.
B. Selecting a pricing method.
C. Researching reference prices in the target market.
D. Selecting the pricing objective.
E. Determining demand.
11) A marketing manager needs to know the cost of the research project before approving it. During which step in the marketing research process would such a consideration most likely take place?
A. Step 2—develop the research plan.
B. Step 3—information collection
C. Step 1—drafting the research objectives.
D. Step 1—creating decision alternatives.
E. Step 1—defining the problem.
12) Which of the following types of marketing research firms would best be described as one that gathers consumer and trade information which they sell for a fee (e.g., Nielsen Media Research)?
A. General-line marketing research firms
B. Non-profit marketing research firms
C. Specialty-line marketing research firms
D. Syndicated-service research firms
E. Custom marketing research firms
13) Companies normally budget marketing research at ________ percent of company sales.
B. 10 to 12
D. 2 to 3
E. 1 to 2
14) The marketing communications mix consists of six major modes of communications. Which of the following is NOT one of these modes?
C. Sales promotions
D. Direct marketing
E. Personal selling
15) The chief disadvantage to a firm that decides to follow a product specialization strategy in selecting target markets is ________.
A. competitors can easily copy any new product introductions
B. e-commerce becomes difficult for the company
C. the product may be supplanted by an entirely new technology
D. logistics can become a nightmare
E. no synergy exists
16) New-to-the- world products are ________.
A. new products that provide improved performance or greater perceived value and replace existing products
B. existing products that are targeted to new markets or market segments
C. new products that supplement established product lines (package sizes, flavors, and so on)
D. new products that allow a company to enter an established market for the first time
E. new products that create an entirely new market
17) Major retailer types include the following EXCEPT ________.
A. the Internet
C. catalog showroom
D. discount store
E. specialty store
18) Marketing communications can contribute to brand equity by establishing the brand in memory and to________ (in)a brand image.
A. create demand
D. create interest
19) Price has operated as the major determinant of buyer choice among poorer nations, among poorer groups, and with ________ products.
B. over the Internet
20) ________ communicates a company’s intended value positioning of its product or brand to the market.
C. Physical evidence
21) Following the ________ approach to target market selection encompasses a strong knowledge of the segment’s needs, a strong market presence, and operating economies through specializing in production, distribution, and promotion.
A. market specialization
B. product specialization
C. full market coverage
D. single-segment concentration
E. selective specialization
22) Some intermediaries use the following: strategic planning, advanced information systems, sophisticated marketing tools, measure performance on a return-on-investment basis, segment their markets, improve their target marketing and positioning, and ________.
A. dominant the manufacturers they do business with
B. aggressively pursue take over strategies
C. aggressively pursue market expansion and diversification strategies
D. contend with dwindling customer bases
E. aggressively “squeeze” manufacturer margins
23) To reach Generation Y, rock band Foo Fighters created a digital street team that sends targeted e-mail messages to members who “get the latest news, exclusive audio/video sneak previews, tons of chances to win great Foo Fighters prizes, and become part of the Foo Fighters Family.” Which of the following techniques for reaching Generation Y are the Foo Fighters using?
A. Computer games
B. Cool events
C. Online buzz
D. Student ambassadors
E. Unconventional sports
24) The traditional view of conflict is the belief that conflict is _____.
25) The two general approaches to bargaining are known as ________.
A. formal and informal.
B. distributive and integrative
C. legal and restrictive
D. emotional and rational.
E. affective and reflective
26) Which of the following is NOT included in the definition of conflict?
A. something that is cared about
B. disruption of tasks
C. negative effects
27) If no one is aware of conflict, it is generally agreed that _____.
A. conflict is inevitable
B. no conflict exists
C. conflict is psychologically driven as opposed to physically manifest
D. employee-employer relations will be good
E. conflict is subversive
28) Which of the following statements about leadership is true?
A. leaders are hierarchically superior to followers.
B. managers are leaders.
C. Nonsanctioned leadership is as important as or more important than formal influence.
D. leaders are managers.
E. Formal rights enable managers to lead effectively.
29) Which of the following statements best defines a work group?
A. A work group consists of 3 or more people who take on self-supervising responsibilities.
B. A work group interacts primarily to share information, rather than to engage in work that requires joint effort.
C. A work group consists of 3 or more people from across departmental or functional lines.
D. A work group is a group comprised of 10 or more people
E. The performance of a work group is generally greater than the sum of its inputs from individual members.
30) _____ bargaining is negotiation that seeks to divide a “fixed pie.”
31) Examples of off-the-job training include all of the following except _____.
A. Internet courses
B. apprenticeship programs
C. public seminars
E. classroom lectures
32) Between the late 1960s and the mid-1980s, the use of written tests declined because they were characterized as _____.
D. mathematically flawed
33) Which type of skill training has become increasingly important in organizations?
A. problem solving
34) According to a recent survey, about ___ percent of employees working in the 1,000 largest U.S. corporations receive ethics training.
35) _____ can be used to increase the perception that employees are treated fairly.
A. Multiple raters
B. Due process
C. Documenting with a journal
D. Focusing on subjective evaluations
E. Selective evaluation
36) Whenever Jane is successful she takes full credit for what has happened, but whenever she is unsuccessful she attributes her failure to bad luck or blames one of her fellow employees. She is guilty of _____.
A. the halo effect
B. attribution bias
D. self-serving bias
E. fundamental attribution error
37) A task that is subdivided into many separate jobs is considered to have _____.
A. a high degree of work specialization
B. a low degree of decentralization
C. a low degree of structure
D. a high degree of matrix structuring
E. a high degree of departmentalization
38) Organizational structure has six key elements. Which of the following is not one of these elements?
A. work specialization
D. location of authority
39) What term is used for the tendency of an individual to attribute his own successes to internal factors while putting the blame for failures on external factors?
C. self-serving bias
D. fundamental attribution error
E. selective perception
40) Which of the following is not a primary force for change in organizations?
A. decreasing skill sets
B. the nature of the workforce
C. economic shocks
E. social trends
41) Which of the following would NOT be classified as a time-series technique?
A. box Jenkins technique
B. trend projections
C. exponential smoothing
D. simple moving average
E. regression model
42) According to Goldratt and Fox, a useful performance measure to treat inventory is ______.
A. quick ratio
B. dollar days
C. current ratio
D. inventory turnover
43) According to David Maister, the most complex projects requiring innovation and creativity are called _________.
A. “brain surgery” projects
B. “grinding” projects
C. “gray hair” projects
D. “procedures” projects
44) Operations stage toolkit for the Data Analysis and Solution Development phase include(s): I. SPC tools II. Bottleneck analysis III. Computer simulation IV. Balanced scoreboard
A. I, II, III
B. I, II, III, and IV
C. II and III
D. I and II
E. II, III, and IV
45) If the system contains a bottleneck, the _______ is the best place for control. If there is no bottleneck, the __________ is the best place for control.
A. bottleneck, capacity constrained resource
B. none of these answers
C. capacity-constrained resource, drum
D. capacity-constrained resource, bottleneck
46) __________ says to recognize the value of hidden options in a situation, such as the foreign exchange options in some derivative instruments.
A. The Principle of Two-Sided Transactions
B. The Time Value of Money Principle
C. The Principle of Comparative Advantage
D. The Options Principle
47) Due to asymmetric information, the market fears that a firm issuing securities will do so when the stock is _________.
A. caught up in a bear market
D. being sold by insiders
48) Under capital rationing, given the choice among several equally attractive investments, the best tool to use is the __________.
A. Profitability Index method
B. Payback method
C. Internal Rate of Return method
D. Net Present Value method
49) A checking account is __________.
A. a place to “collect” money between inflows and outflows
B. an account that acts like a reservoir
C. useful because you can add money in any amount
D. all of these
50) __________ says to look for opportunities to invest in positive-NPV projects in foreign markets or to develop derivatives or design arrangements that enable firms to cope better with the risks they face in their foreign operations.
A. The Principle of Capital Market Efficiency
B. The Principle of Diversification
C. The Principle of Risk-Return Trade-off
D. The Principle of Valuable Ideas
51) __________ says to seek out investments that offer the greatest expected risk-adjusted real return.
A. The Principle of Self-Interested Behavior
B. The Signaling Principle
C. The Principle of Incremental Benefits
D. The Principle of Valuable Ideas
52) An investor’s risky portfolio is made up of individual stocks. Which of the following statements about this portfolio is true?
A. An investor cannot change the risk of this portfolio by her choice about personal leverage (lending or borrowing).
B. Selling any stock in this portfolio will lower the beta of the portfolio.
C. Each stock in the portfolio has its own beta.
D. Each stock in the portfolio will have a beta greater than one.
53) Which of the following statements is true?
A. The Principle of Incremental Benefits says to consider the possible ways to minimize the value lost to capital market imperfections, such as asymmetric taxes, asymmetric information, and transaction costs.
B. The Principle of Valuable Ideas suggests to look for opportunities to create value by issuing securities that are in short supply, perhaps resulting from changes in tax law.
C. The Time Value of Money Principle advises to include any time-value-of-money tax benefits from capital structure choices.
D. all of these
54) An all-equity-financed firm would __________.
A. not pay corporate income taxes because it would have no interest expense.
B. pay corporate income taxes because it would have interest expense.
C. not pay any income taxes because interest would exactly offset its taxable income.
D. pay corporate income taxes if its taxable income is positive
55) “Hard” capital rationing refers to the rationing __________.
A. always imposed by competitors
B. imposed internally by the shareholders
C. imposed by external factors
D. always imposed by debt holders
56) A key variable covered in our text for the Black-Scholes OPM is __________.
C. transaction costs.
D. the riskless APR with continuous compounding
57) The managerial decision best addresses which of the following questions?
A. How fast should we grow?
B. What size of firm do we want?
C. How should we compensate our managers?
D. all of these
58) The financing decision best addresses which of the following questions?
A. Should we increase our inventory?
B. Should we issue common stock or convertible debt?
C. Should we buy this piece of land?
D. Should we give employees stock options?
59) Which of these investments would you expect to have the highest rate of return for the next 20 years?
A. intermediate-term U.S. government bonds
B. long-term corporate bonds
C. U.S. Treasury bills
D. anybody’s guess
60) Dimensions of risk include __________.
A. the certainty of a negative outcome
B. uncertainty about the future outcome
C. the impossibility of the same return
D. uncertainty about yesterday’s outcome
61) __________ says to recognize the value of options contained in derivatives.
A. The Capital Market Efficiency Principle
B. The Principle of Valuable Ideas
C. The Options Principle
D. The Principle of Comparative Advantage
62) Which of the following is (are) true?
A. The Principle of Capital Market Efficiency states that differences between financial assets are measured primarily in terms of risk and return. Investors choose the highest return for a given risk level.
B. The Principle of Comparative Advantage states that people apply the Principles of Self-Interested Behavior, Two-Sided Transactions, and Signaling to an environment characterized by similar financial assets, low transaction costs, and intense competition leads to capital market efficiency.
C. The Principle of Valuable Ideas states that new ideas can provide value when first introduced, even in an efficient capital market.
D. all of these answers are correct.
63) You do a study and find out that, on average, stock prices for firms decrease 3% for every 5% decrease in inside ownership. You are watching the nightly business report and find out that Magic Tape’s stock has announced that insiders have sold 10% of their holdings. You are concerned because you own 1,000 shares of Magic Tape and it had closed the day before unchanged at $30 per share. If markets are at least semi-strong form efficient, what would you expect?
A. You would lose $4,000.
B. You would expect Magic Tape to close at $28 the day of the announcement.
C. You would lose $1,800.
D. You would lose $2.00 per share
64) Which of the following is not an advantage of going public?
A. Going public gives existing shareholders a chance to sell portions of their shares as part of the IPO giving them a cash return on their investment and allows them to diversify their investment portfolios.
B. Going public enables a firm to raise additional capital.
C. Going public generally brings a lower price in the public market than in the venture capital or private placement markets.
D. Going public achieves liquidity and diversification for current shareholders
65) Incremental analysis would not be appropriate for
A. an allocation of limited resource decision.
B. a make or buy decision.
C. elimination of an unprofitable segment.
D. Analysis of manufacturing variances
66) Undertaker Corporation has a joint process that produces three products: P, G, and A. Each product may be sold at split-off or processed further and then sold. Joint processing costs for a year amount to $25,000. Other relevant data are as follows:
Product Sales Value at Split-off Processing Costs after Split-off Sales Value at Completion
P $62,000 $5,000 $88,000
G 12,500 6,500 19,000
A 9,400 5,000 12,000
Product G _____.
A. should be sold at split off since processing further would only reduce profits by $6,500.
B. should be processed further to increase profits by $6,500.
C. should be processed further to increase profits by $19,000.
D. an be processed further or sold at split off; there is no difference in profit.
67) Cena Corporation has a joint process that produces three products: P, G, and A. Each product may be sold at split-off or processed further and then sold. Joint-processing costs for a year amount to $25,000. Other relevant data are as follows:
Product Sales Value at Split-off Processing Costs after Split-off Sales Value at Completion
P $32,000 $5,000 $40,000
G 16,500 7,500 29,000
A 6,400 8,000 10,000
Once product P is produced, processing it further will cause profits to _____.
A. decrease by $5,000
B. increase by $8,000
C. decrease by $8,000
D. increase by $3,000
68) A transfer price exists when two segments of the same organization sell _____.
A. a service to each other
B. a product to the same customer
C. a product in a foreign country
D. the same service to competitors
69) For what purpose is the theory of constraints used?
A. To balance performance measurement.
B. To reduce product defects.
C. To identify and manage constraints that bottle-neck operations.
D. To reduce inventory levels
70) A _____ gives the expected sales under a given set of conditions.
A. sales budget
B. sales prediction
C. budget forecast
D. sales forecast
71) Important factors considered by sales forecasters include all of the following except _____.
A. marketing research studies
B. the desired level of sales
C. past patterns of sales
D. competitors’ activities
72) Effectiveness is indicated by _____.
A. static-budget variances
B. all of these answers are correct
C. sales-activity variances
D. flexible-budget variances
73) _____ is an important factor considered by sales forecasters.
A. Estimates made by the sales force
B. All of these answers are correct
C. Past patterns of sales
D. General economic conditions
74) At the break-even point of 2,000 units, variable costs are $55,000, and fixed costs are $32,000. How much is the selling price per unit?
B. Not enough information
75) A company has total fixed costs of $120,000 and a contribution margin ratio of 20%. The total sales necessary to break even are
76) A cost which remains constant per unit at various levels of activity is a
A. fixed cost.
B. manufacturing cost.
C. variable cost.
D. mixed cost.
77) For an activity base to be useful in cost behavior analysis,
A. there should be a correlation between changes in the level of activity and changes in costs.
B. the activity level should be constant over a period of time.
C. the activity should always be stated in dollars.
D. the activity should always be stated in terms of units.
78) An absorption-costing income statement separates cost into the major categories of_____.
A. product and period
B. all of these answers are correct
C. manufacturing and nonmanufacturing
D. inventoriable and noninventoriable
79) The _____ is/are NOT a difference between the standard absorption-costing format and the variable-costing format.
A. presentation of direct manufacturing costs
B. major cost categories
C. computation of unit product cost
D. presentation of fixed manufacturing cost
80) _____ costs relate to more than one product and cannot be separately identified with an individual product
81) The last step in activity-based costing is to
A. compute the activity-based overhead rate per cost driver.
B. identify and classify the major activities involved in the manufacture of specific products.
C. assign manufacturing overhead costs for each activity cost pool to products.
D. identify the cost driver that has a strong correlation to the activity cost pool.
82) Jack and Jill form a partnership. Jack runs the business in New York, while Jill vacations in Hawaii. During the time Jill is away from the business, Jack increases the debts of the business by $20,000. Which of the following statements is true regarding this debt?
A. Only Jill is personally liable for the debt of the business, since Jack has been working and she has not.
B. Both Jack and Jill are personally liable for the business debt.
C. Only Jack is personally liable for the debt, since he has been the managing partner during that time.
D. Neither Jack nor Jill is personally liable for the business debt, since the partnership is a separate legal entity.
83) The _____ is not one of the three major financial statements.
A. income statement
C. statement of cash flows
D. statement of equity position
84) A local retail shop has been operating as a sole proprietorship. The business is growing and now the owner wants to incorporate. Which of the following is not a reason for this owner to incorporate?
A. desire to limit the owner’s personal liability
B. the prestige of operating as a corporation
C. ability to raise capital for expansion
D. the ease in transferring shares of the corporation’s stock
85) The _____ is also called the statement of financial position.
A. balance sheet
B. statement of retained earnings
C. income statement
D. statement of cash flow
86) The theory of business social responsibility that holds that a business owes duties solely to produce the highest return for its shareholders is:
A. The maximizing profits theory.
B. The corporate citizenship theory.
C. The moral minimum theory.
D. The social audit theory.
E. The stakeholder interest theory.
87) Which country does the text describe as becoming the largest producer and consumer of many of the world’s goods?
88) The centerpiece of most diversity programs is _____.
A. employee commitment
B. human resource personnel
C. top management commitment
D. employee satisfaction
89) Which social responsibility theory has been advocated by Novel Prizewinning economist Milton Friedman?
A. Moral minimum
B. Corporate citizenship
C. Maximizing profits
D. Corporate social audit
E. Stakeholder interest
90) Although the U.S. has had a longstanding agreement with ___________, after the passage of NAFTA, _________ became the United States’ second largest trading partner.
A. Canada, Venezuela
B. Canada, Mexico
C. Mexico, Canada
D. Mexico, Venezuela
E. Great Britain, Paraguay
91) Which of the following is correct about litigating commercial disputes?
A. Commercial disputes, because of their specialized nature, are first heard at the appellate court level.
B. Businesses generally dislike the concept of specialized trail courts for commercial disputes because the large numbers of consumers who sue businesses in these courts have led the judges to become generally biased against business.
C. Nearly all states have specialized trial courts that hear commercial disputes.
D. In all states, commercial disputes must be heard in a limited-jurisdiction court.
E. A few states have established specialized trial courts for commercial disputes.
92) Which article of the United States Constitution deals with the judicial power of the federal government?
A. Article II.
B. Article III.
C. Article V.
D. Article I.
E. Article IV.
93) When an economist says that the demand for a product has increased, this means that:
A. firms make less of the product available for sale.
B. quantity demanded is greater at each possible price.
C. the demand curve becomes steeper.
D. consumers respond to a lower price by buying more.
94) When movie ticket prices increase, families tend to spend less time watching movies and more time at home watching videos instead. This best reflects:
A. the income effect.
B. diminishing marginal utility.
C. the substitution effect.
D. the rationing function of markets.
95) The force behind globalization in _____ was the amount of muscle, horsepower, wind power, or steam power that a country could deploy.
A. Globalization 2.0
B. Globalization 1.0
C. None of these
D. Globalization 3.0
96) The Global, Web-Based Platform enables individuals to do which of the following?
A. access information, services, and entertainment
B. exchange knowledge
C. all of these answers are correct
D. connect, compute, communicate, collaborate, and compete everywhere and all the time
E. produce and sell goods and services
97) _____ is the integration of economic, social, cultural, and ecological facets of life, enabled by information technologies.
C. business environment
98) A _____ scale is a scale that scores an object or property without making a direct comparison to another object or property.
99) Marketing research is now about a ________ billion industry globally.
100) The use of a(n) _____ serves as a comparison to assess the existence and potency of the manipulation.
A. Control group
B. Criterion variable
C. Field experiment
D. Experimental group
E. Explanatory variable