Foundations of Marketing

by Jonathan Groucutt

Knowledge Test Bank

Here are a series of questions to test your basic knowledge of marketing.
  • Complete these questions in your own time.
  • Attempt the questions without the aid the textbook.
  • Check your answers with the textbook once you have completed the task.
  • Check your understanding of those you did not get right.

1. STP examines the relationship between:

A) Strategy, tactics and performance
B) Service, tactics and performance
C) Segmentation, targeting and positioning
D) Segmentation, tactics and performance
E) Selling, trade and performance


2. Which of the following is an industrial product?

A) Shopping goods
B) A luxury car
C) Plant and equipment
D) An impulse purchase
E) None of the above


3. The macro factors are often described by a mnemonic. Which of the following is often used as a mnemonic for the macro factors?

A) PESTLE
B) DESK
C) PET
D) EVOD
E) QUOTA

4. The action when two companies join to form a third company is known as:

A) A strategic alliance
B) A joint venture
C) A takeover
D) A merger
E) An acquisition


5. A brand owned by a department store or supermarket is often referred to as:

A) An individual brand
B) An own-label brand
C) A family brand
D) A co-brand
E) A sub brand

6. The product life cycle is often described as having four components – introduction, growth, maturity and decline. However, there is another component that refers to giving the product a ‘new lease of life’. What is that known as?

A) Rejuvenation
B) Extenuating
C) New development
D) Repeat purchasing
E) Value added


7. A small specialist market is often referred to as a:

A) Mass customised market
B) Niche market
C) Consumer market
D) Value added market
E) None of the above

8. An example of direct marketing is:

A) A letter targeted to a named current customer
B) A mass market television commercial
C) A news story in a major newspaper
D) Merchandising
E) A buy one get one free in-store offer

9. Which of the following companies has it main activity as the provision of a service?

A) Johnson & Johnson pharmaceuticals
B) Coca-Cola
C) Holiday Inn hotels
D) Ford motor company
E) Heinz foods

10. A customer makes an instant decision to purchase a product that they have just seen, such as a chocolate bar at a supermarket checkout. What is this commonly known as?

A) A shopping purchase
B) An impulse purchase
C) An uncommon purchase
D) A high involvement purchase
E) None of the above

11. What are the original 4Ps of the marketing mix?

A) Performance, Penalty, Perception and Process
B) Product, Price, Promotion and Place
C) Probe, Participants, Position and Process
D) Packaging, Personnel, Price and Product
E) Persuasion, Positioning, Preservation and Psychology

12. What are the three additional Ps of the marketing mix sometimes called the service mix?

A) Physical Evidence, Process and Performance
B) Physical Evidence, Process and Persuasion
C) Physical Evidence, Process and People (Participants)
D) Physical Evidence, Process and Personnel
E) Permanency, Protection and People

13. Price skimming is used when:

A) The retailer seeks to gain a large proportion of the market
B) The retailer sets a variable price to reflect differences within the competitive market
C) The retailer has bundled several products together and is charging one price
D) Thee retailer sets a relatively high price during the early stages of a life cycle to attract customers in obtaining a new product
E) None of the above

14. Which of the following factors can influence pricing of a product or service?

A) Cost of production or service delivery
B) Government policy
C) The level of competition
D) Economic trends
E) All of the above

15. The macro environmental factors are normally used to identify:

A) Those factors that are internal to the organization
B) Those factors that only related to the organization’s politics
C) Those factors that are external to the organization
D) Those factors that can be fully controlled by the organization
E) Those factors controlled by the government


16. A potential market is a group of consumers who:

A) Have an interest in a defined market offer
B) Have sufficient income to purchase a defined market offer
C) Have access to a particular market offer
D) Have interest, income and access to a particular market offer
E) Have already bought the market offer


17. Brand loyalty is more likely to occur when the brand is:

A) Well known
B) A limited private label brand
C) A low-involvement purchase
D) A durable product
E) Not seen as risky


18. Which of the following is not an industrial product or service?
A) Components
B) Plant
C) Consumables
D) Business Services
E) Shopping goods


19. Which of the following is not a key factor in channel management selection?

A) Selection of the outlet
B) Motivation of channel members
C) Evaluation of the level of efficiency
D) Withdrawal from the marketplace
E) Selection of the channel itself


20. A joint venture is when one company:

A) Is granted the rights on an intangible element of a product by another
B) Combines value chain activities with another to gain a market advantage
C) Combines with another to form a new company
D) Sets up a shop within a department store
E) Acquires another and changes its brand name


21. Which of the following can be described as a barrier to trade?

A) Quotas.
B) Import tariff
C) Transit tariff
D) Buy local legislation
E) All of the above


22. In buyer behaviour what is an advocate?

A) A person or group that could be interested in buying a product or service
B) A person or group who have expressed interest in buying a product or service
C) A person or group who have purchased the product or service once
D) A person or group have purchased the product or service on more than one occasion
E) A person or group who are particularly loyal and supportive of the product or service

23. Which of the following is not an element of the macro environment?
A) Retired Employees
B) Politics
C) Society
D) Technology
E) Legal


24. From the following choose the key reason often cited for adapting aproduct for various countries.

A) Political
B) Cultural
C) Economic
D) Legal
E) Ecological


25. Which of the following does not apply to segmenting consumer markets?

A) Geodemographics
B) Lifestyle analysis
C) Demographics
D) Buyer behaviour
E) Type of Customer


26. Which of the following is not a form of advertising?

A) Posters
B) Television commercials
C) Internet banners
D) Publicity
E) Ambient


27. Why is customer loyalty so important to a company?

A) It reduces costs associated with gaining new customers
B) Loyal customers may become advocates for the product or service
C) Improves communication through better targeting
D) Helps the company to sustain a competitive advantage
E) All of the above


28. An own-label brand is?

A) One owned by supermarkets and chain stores
B) An individual brand owned by a major manufacturer
C) Part of a family of brands owned by a major manufacturer
D) Where one brand is linked to another major brand
E) All of the above


29. Which of the following is not a direct marketing activity?

A) Door to door drops
B) Inserts in magazines
C) Face to face selling
D) Telemarketing
E) Merchandising


30. Which of the following is not a sales promotion technique?

A) Free samples
B) Money-off coupons
C) Buy one get one free
D) Polling
E) Free send-away premium


31. An organization will brand their product or service to:

A) Trademark and copyright the product or service being offered
B) Create an identity for the product or service that the customer can relate to
C) Help differentiate it from the competitors
D) Use it as a means to communicate values, features and benefits to customers
E) All of the above


32. For a commercial organisation the primary driver of marketing can be considered as:

A) To sell more products/services at the highest possible price
B) Being politically responsible
C) Developing an international business
D) Promoting its products
E) All of the above


33. Social responsibility refers to companies:

A) Acting responsibly to their customers and the wider community
B) Acting responsibly to their shareholders
C) Acting responsibly to government pressure
D) Acting responsibly to the customers
E) Acting in response to economic variables


34. Companies seek to differentiate their brands in order to:

A) Be similar to certain competing brands
B) Use unusual types of promotion to communicate the value of the brand
C) Stand out from the rest of the competition in the mind of the customer
D) Be the only brand in the marketplace
E) None of the above


35. In terms of the product life cycle rejuvenation refers to:

A) Extending the life of a declining product
B) The introduction of a new product
C) A product that had reached the maturity phase of its life
D) A product that has been terminated
E) A product that has yet to be introduced into the marketplace


36. Increasingly the term ‘value added’ is used in marketing. What does it refer to?

A) A price that reflects the value of the product or service
B) The product does not have a value until it is added at the point of pricing
C) The value is added through every stage from manufacture through to after-sales service
D) None of the above
E) All of the above


37. Product placement is:

A) When a product is intentionally used or seen within a movie
B) When a product is promoted within a store
C) A poster advertisement
D) Another name for TV advertising
E) Selling direct to a customer through one-to-one contact

38. Commercial organisations are increasingly incorporating ethical policies because:

A) It is a good idea
B) Pressure from shareholders
C) Pressure from stakeholders
D) Pressure from the CEO and the Board
E) None of the above

39. A GBP £140,000 Aston Martin DB7 sports car would normally be classed as:

A) A convenience product
B) A luxury product
C) A specialist product
D) A shopping product
E) All of the above


40. Which of the following would be considered a service provider?

A) L’Oreal Perfumes
B) Marlboro Cigarettes
C) Hilton Hotels
D) Nescafe Coffee
E) None of the above

41. Which of the following companies is particularly renowned for its ethical policy known as their Credo?

A) Johnson & Johnson
B) Tylenol Inc.
C) JG International
D) Shell UK
E) Marlboro Cigarettes


42. An impulse purchase is when a:

A) Customer takes time to weigh up all the different attributes of the product on offer
B) Customer makes an instant decision to purchase a product to fulfil a need
C) Company is seeking to install plant and equipment
D) A company is in negotiation with a supplier for a proposed purchase
E) All of the above

43. Which of the following could be considered an unethical practice in many Western countries?

A) Paying bribes to win a contract
B) Using false images to sell a product
C) Hard selling or pressure tactics
D) Stereo-typing people into various categories
E) All of the above


44. Price sensitivity normally refers to:

A) A situation where a buyer has limited funds and thus carefully chooses a product based on price
B) Where the price is sensitivity to economic changes
C) Where the price is sensitive to political changes
D) A range of products that are priced higher than others
E) A range of products that are priced lower than others

45. A marketing plan is:

A) A document that details requirements for a company’s marketing activities over the short, medium and longer term. Y
B) A document that outlines a marketing research activity
C) A plan of the marketing function of the organization
D) A document that looks back over past marketing activities
E) A plan of the marketing activities within a particular industry

46. What is a major reason why some governments use a protectionist policy against foreign companies who want to market their products in that country?

A) They do not like the government of the country where the company is based
B) They want to protect their own, often inefficient, companies from potentially cheaper imports
C) There is no market for that product within that country
D) The population of the country is too poor to buy imported products
E) The country could be swamped by cheaper imports

47. Logistics refers to:

A) The efficient and effective movement and storage of goods between point of manufacture and sale
B) The storage of goods at a retail outlet
C) The shipping of hazardous materials
D) The location of a retail outlet
E) Marketing products and services through the Internet

48. Why do companies start marketing their products and services internationally?

A) The domestic market is saturated
B) There is a declining home market
C) The domestic market is too small
D) Economies of scale
E) All of the above

49. In economic cycles a recession can be described as:

A) The first signs of growth
B) The point where the economy is working at full capacity
C) A sharp prolonged slowdown in the rate of growth of GDP
D) The point where the economy is stationary – neither growing nor declining
E) A severe downturn in the economy

50. In marketing, physical evidence can be described as:

A) The tangible aspects of the delivery of a product or service
B) The assembly or flow of activities that support other element of the marketing mix
C) The intangible aspects of a product
D) The physical size of the product
E) None of the above


51. Which of the following can be used to describe the difference between business marketing and consumer marketing?
A) Type and level of purchasing knowledge required
B) The size of orders.
C) Technical expertise in terms of product specifications.
D) Price flexibility through negotiation
E) All of the above

52. Which of the following can influence the level of involvement in a purchasing decision?

A) Self-image, for example, in the purchase of fashion item
B) Perceived level of risk associated with the purchase
C) Social factors particularly where there is a links to social acceptance
D) The level of pleasure associated with the purchase of a product, for example a bar of chocolate
E) All of the above

53. Which of the following skills are important for a sales person to do their job effectively?

A) Be adaptable
B) Be self-motivated
C) Know their customers
D) Have product knowledge
E) All of the above


54. A niche market refers to a:

A) A small specialist market
B) A large mass market
C) A large mass customised market
D) A highly segmented market
E) A poorly positioned market

55. Which of the following can result in the need to adapt a promotional campaign for use in another country?

A) The country’s culture
B) The weather
C) TV broadcast technical standards
D) The number of TV sets in that country
E) None of the above

56. Which of the following can result in international marketing failures?

A) Selecting inappropriate strategic partners
B) Inability to adapt to local market conditions
C) Impact of emotive issues that may have an ethical or moral basis
D) Hiring the wrong people
E) All of the above

57. What are potentially the key elements of marketing?

A) Transaction of goods and services
B) Value Added
C) Relationships
D) The introduction and development of products and services
E) All of the above

58. When pricing a product or service would you consider:

A) The whole of the remainder of the marketing mix – the 6 remanding Ps
B) What people could afford
C) What the market could really afford
D) The dynamics of the marketplace
E) All of the above


59. Shoul d marketing be socially responsible?

A) Yes as it benefits the whole of society
B) No because marketing is a profit centred business and it should provide only for shareholders
C) Yes, but its main provision should be for shareholders thus increasing the value of their stake within the business
D) Shareholders are a company’s most important asset
  • None of the above
60. Macro factors identify:

A) Internal factors
B) Political factors
C) External factors
D) Governmental factors
E) Economic factors


61. Channel management refers to:

A) The physical distribution of goods and services
B) Pricing
C) Promotion
D) Product placement
E) People management


62. Products are most often adapted because of:

A) Political reasons
B) Cultural reasons
C) Economic reasons
D) Customer reasons
E) None of the above


63. Geodemographics can be used to:

A) Segment consumer markets
B) Influence buyer behaviour
C) Influence pricing decisions
D) Influence consumer lifestyles
E) None of the above


64. Rejuvenation of a product refers to:

A) The introduction of a new product
B) The maturity phase of a product
C) Extending the life a product
D) A declining product
E) All of the above


65. A consumer has limited funds and carefully chooses a product or service based on price. This is usually known as:

A) Price skimming
B) Price sensitivity
C) Cost plus pricing
D) Market pricing
E) None of the above

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