STR 581 Final Exam Set 4

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STR 581 Final Exam Set 4
1) 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 prices
B. Spend more money
C. Lower expectations
D. Develop marketing campaigns
E. Manage customer experiences

2) ________ consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers.

A. A marketing database
B. A marketing research system
C. A promotional campaign
D. A marketing information system
E. A marketing intelligence system

3) 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. customer feedback systems
B. intermediaries
C. advisory panels
D. sales force surrogates
E. external networks

4) A ________ is a set of procedures and sources managers use to obtain everyday information about developments in the marketing environment.

A. vertical system
B. marketing information system
C. marketing intelligence system
D. marketing research system
E. product management system

5) A(n) ________ is any good, service, or idea that is perceived by someone as new.

A. creative product
B. product
C. new idea
D. innovation

6) Most established companies focus on ________ when it comes to innovation.

A. competitive innovation
B. continuous innovation
C. demand innovation
D. incremental innovation
E. everyday innovation

7) The value proposition consists of a cluster of benefits the company promises to deliver; it is

A. business processes
B. customer experience with the company
C. customer expectations
D. Customer loyalty to the company
E. total customer satisfaction

8) In ________ marketing, the seller engages in the mass production, mass distribution, and mass promotion of one product for all buyers.

A. differentiated
B. mass
C. segmented
D. group
E. general

9) 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 a pricing method.
B. Selecting the final price.
C. Selecting the pricing objective.
D. Researching reference prices in the target market.
E. Determining demand.

10) ________ is the result of a concentrated effort by designers, engineers, and purchasing agents to reduce the product’s overall costs.

A. Experience curve
B. Least cost producer
C. Target costing
D. Learning curve

11) 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. Non-profit marketing research firms
B. General-line marketing research firms
C. Syndicated-service research firms
D. Specialty-line marketing research firms
E. Custom marketing research firms

12) With respect to the sampling plan, three decisions must be made. The decisions are: the sampling unit—who is to be surveyed? Sample size—how many people should be surveyed? And ________.

A. sample supervisor—who will lead the sampling effort?
B. sampling procedure—how should the respondents be chosen?
C. surveyor skill—who will do the surveying?
D. sample security—how to protect the sample data?
E. sample cost—how much does sampling cost?

13) 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 3—information collection
B. Step 2—develop the research plan.
C. Step 1—creating decision alternatives.
D. Step 1—drafting the research objectives.
E. Step 1—defining the problem.

14) 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. Online buzz
B. Computer games
C. Unconventional sports
D. Cool events
E. Student ambassadors

15) A company can add new products through acquisition or development. The acquisition route can take three forms. The company can buy other companies, it can acquire patents from other companies, or it can buy a ________ or _________ from another company.

A. franchise/acquire rights
B. franchise/co-brand
C. license/receive permission
D. license/franchise

16) The chief disadvantage to a firm that decides to follow a product specialization strategy in selecting target markets is ________.

A. e-commerce becomes difficult for the company
B. competitors can easily copy any new product introductions
C. logistics can become a nightmare
D. the product may be supplanted by an entirely new technology
E. no synergy exists

17) “Power prices” use price as a key strategic tool. These “power prices” have discovered the highly ________ effect of price on the bottom line.

A. soothing
B. direct
C. abrasive
D. leveraged
E. dramatic

18) 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. full market coverage
B. product specialization
C. selective specialization
D. single-segment concentration
E. market specialization

19) Major retailer types include the following EXCEPT ________.

A. superstore
B. catalog showroom
C. discount store
D. specialty store
E. the Internet

20) ________ communicates a company’s intended value positioning of its product or brand to the market.

A. Physical evidence
B. Place
C. Price
D. Packaging
E. Promotion


21) Price has operated as the major determinant of buyer choice among poorer nations, among poorer groups, and with ________ products.

A. commodity-type
B. over the Internet
C. similar
D. identical

22) The marketing communications mix consists of six major modes of communications. Which of the following is NOT one of these modes?

A. Advertising
B. Sales promotions
C. Direct marketing
D. Personal selling
E. Packaging

23) 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. aggressively pursue market expansion and diversification strategies
B. aggressively pursue take over strategies
C. aggressively “squeeze” manufacturer margins
D. contend with dwindling customer bases
E. dominant the manufacturers they do business with

24) Which of the following statements about leadership is true?

A. Nonsanctioned leadership is as important as or more important than formal influence.
B. managers are leaders.
C. Formal rights enable managers to lead effectively.
D. leaders are managers.
E. leaders are hierarchically superior to followers.

25) The traditional view of conflict is the belief that conflict is _____.

A. neutral
B. necessary
C. natural
D. harmful
E. situationally-dependent

26) Negotiation can be defined as a process in which two or more parties exchange goods or services and attempt to agree upon _____.

A. effective arbitrators for disputes
B. the exchange rate for those goods and services
C. a model of the negotiation process for resolving differences
D. the monetary value of the exchanged items
E. acceptable bargaining strategies for obtaining the goods and services

27) Which of the following statements best defines a work group?

A. A work group consists of 3 or more people from across departmental or functional lines.
B. The performance of a work group is generally greater than the sum of its inputs from individual members.
C. A work group consists of 3 or more people who take on self-supervising responsibilities.
D. A work group is a group comprised of 10 or more people
E. A work group interacts primarily to share information, rather than to engage in work that requires joint effort.

28) John Kotter’s view argues that management focuses on coping with complexity, whereas leadership focuses on coping with _____.

A. morale
B. conflict
C. defeat
D. change
E. success

29) Which level of Maslow’s hierarchy of needs deals with satisfying one’s hunger, thirst, and need for sex?

A. esteem
B. safety
C. social
D. psychological
E. physiological

30) _____ bargaining is negotiation that seeks to divide a “fixed pie.”

A. Affective
B. Distributive
C. Reflective
D. Conjunctive
E. Integrative

31) _____ can be used to increase the perception that employees are treated fairly.

A. Documenting with a journal
B. Selective evaluation
C. Multiple raters
D. Focusing on subjective evaluations
E. Due process

32) Which of the following has proven to be a particularly good predictor for jobs that require cognitive complexity?

A. aptitude tests
B. intelligence tests
C. work sampling
D. behavioral assessment
E. integrity evaluations

33) Which type of skill training has become increasingly important in organizations?

A. interpersonal
B. financial
C. problem solving
D. social
E. technical

34) Between the late 1960s and the mid-1980s, the use of written tests declined because they were characterized as _____.

A. invalid
B. unprofessional
C. unreliable
D. mathematically flawed
E. discriminatory

35) Examples of off-the-job training include all of the following except _____.

A. public seminars
B. videotapes
C. classroom lectures
D. apprenticeship programs
E. Internet courses

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. distinctiveness
B. self-serving bias
C. fundamental attribution error
D. attribution bias
E. the halo effect

37) The “realistic” personality from Holland’s typology of personality and congruent occupations would be well suited for which of the following jobs?

A. lawyer
B. biologist
C. painter
D. accountant
E. mechanic

38) Each of the six personality types developed in Holland’s personality-job fit theory has a ________.

A. supplemental occupational environment
B. supplemental skill set
C. supplemental personality style
D. congruent personality style
E. congruent occupational environment

39) Phrases such as “more cultural diversity,” “many new entrants with inadequate skills,” and “increase in aging workers” are all examples of what force for change?

A. social trends
B. competition
C. technology
D. world politics
E. nature of the work force

40) Investors bragged about their investing expertise during the stock market rally between 1996 and early 2000, then blamed analysts, brokers, and the Federal Reserve when the market imploded in 2000. These investors were most probably guilty of what?

A. distinctiveness
B. selective perception
C. fundamental attribution error
D. self-serving bias
E. the halo effect


41) Which of the following product promotional activities would probably help make the supply chain more efficient?

A. A 2 for 1 price promotion
B. Special packaging for a specific event that occurs one time each year
C. Price promotions that expire on a specific date
D. An “everyday” low price strategy where prices are not dependent on quantity delivered with a specific order

42) Which of the following would NOT be classified as a time-series technique?

A. regression model
B. trend projections
C. simple moving average
D. exponential smoothing
E. box Jenkins technique

43) The phenomenon of magnification of demand variability as we move from the customer to the producer in the supply-chain is referred to as the:

A. price deflator
B. bullwhip effect
C. postponement effect
D. Elasticity of demand
E. Just-in-time approach

44) The ______ the percentage of contact time between the service system and the customer, the ________ the degree of interaction between the two during the production process.

A. greater, greater
B. lesser, greater
C. greater, lesser
D. none of these answers

45) Under exponential smoothing, if we want our forecast to be responsive to recent demand, the value of alpha should be:

A. moderate
B. small
C. large
D. zero

46) __________ 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

47) 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.

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) 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
B. overvalued
C. undervalued
D. being sold by insiders

50) “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

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) 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

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) __________ 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 Options Principle
C. The Principle of Comparative Advantage
D. The Time Value of Money Principle

55) An all-equity-financed firm would __________.

A. not pay corporate income taxes because it would have no interest expense.
B. not pay any income taxes because interest would exactly offset its taxable income.
C. pay corporate income taxes because it would have interest expense.
D. pay corporate income taxes if its taxable income is positive

62) You work for ABC, Inc. in the finance department. You own shares in ABC, Inc. that are selling at $20 per share on the NYSE. You just found out they will have a new stock offering. You just found out they will publicly announce a new stock offering. The costs from the offering will be 10% of the new offering. The new offering will increase the number of outstanding share by 30%. There are currently 20,000,000 shares of ABC outstanding. Once the announcement is made public, what might be the expected impact from transaction (or issuance) costs on each share you own?

A. You will lose 2% of the value of the shares you own.
B. There will be no costs because markets are perfect when it comes to new stock offerings.
C. There will be no costs because there is no information asymmetry present.
D. You will lose 3% of the value of the share you own.

63) Which (if any) statement is false?

A. The Principle of Self-Interested Behavior suggests that self-interested capital market transactions force market prices toward being fair prices.
B. The Principle of Two-Sided Transactions states that intense capital market competition to get and use information to take advantage of arbitrage opportunities eliminates such opportunities.
C. The Principle of Signaling states that information in the transactions of others can be valuable, such as providing an accurate measure of current market value, or information about expected future value.
D. none of these answers are correct.

64) 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 $1,800.
B. You would expect Magic Tape to close at $28 the day of the announcement.
C. You would lose $4,000.
D. You would lose $2.00 per share

65) Incremental analysis would be appropriate for

A. acceptance of an order at a special price.
B. a retain or replace equipment decision.
C. a sell or process further decision.
D. all of the answers are correct.


66) Which decision will involve no incremental revenues?

A. Accept a special order
B. Make or buy decision
C. Drop a product line
D. Additional processing decision

67) Transfer-pricing systems exist to _____.

A. encourage managers to purchase goods and services internally
B. maximize worldwide taxes, duties, and tariffs
C. evaluate segment performance
D. all of these answers are correct

68) 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 processed further to increase profits by $19,000.
B. an be processed further or sold at split off; there is no difference in profit.
C. should be sold at split off since processing further would only reduce profits by $6,500.
D. should be processed further to increase profits by $6,500.

69) It costs Garner Company $12 of variable and $5 of fixed costs to produce one bathroom scale which normally sells for $35. A foreign wholesaler offers to purchase 2,000 scales at $15 each. Garner would incur special shipping costs of $1 per scale if the order were accepted. Garner has sufficient unused capacity to produce the 2,000 scales. If the special order is accepted, what will be the effect on net income?

A. $6,000 decrease
B. $30,000 increase
C. $4,000 decrease
D. $4,000 increase

70) A _____ gives the expected sales under a given set of conditions.

A. budget forecast
B. sales forecast
C. sales budget
D. sales prediction

71) The financing section of a cash budget is needed if there is a cash deficiency or if the ending cash balance is less than:

A. the amount needed to avoid a service charge at the bank.
B. the industry average.
C. management’s minimum required balance.
D. the prior years.

72) Beginning cash balance plus total receipts

A. equals total available cash.
B. is the excess of available cash over disbursements.
C. must equal total disbursements.
D. equals ending cash balance.

73) Which of the following does not appear as a separate section on the cash budget?

A. Capital expenditures
B. Financing
C. Cash disbursements
D. Cash receipts

74) A variable cost is a cost that

A. varies in total in proportion to changes in the level of activity.
B. may or may not be incurred, depending on management’s discretion.
C. occurs at various times during the year.
D. varies per unit at every level of activity.

75) 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?

A. $16.00.
B. Not enough information
C. $11.50.
D. $43.50.

76) At the break-even point of 2,500 units, variable costs are $55,000, and fixed costs are $32,000. How much is the selling price per unit?

A. $12.80.
B. $22.00.
C. $9.20.
D. $34.80.

77) How much sales are required to earn a target income of $80,000 if total fixed costs are $100,000 and the contribution margin ratio is 40%?

A. $450,000.
B. $200,000.
C. $330,000.
D. $300,000.

78) There is no difference between variable-costing and absorption-costing income if there is no_____.

A. change in inventory level
B. ending inventory
C. variable overhead cost
D. beginning inventory

79) Identify which of the following statements about “perfection standards” is true.

A. They usually result in unfavorable variances.
B. They are expressions of the most efficient performance possible.
C. All of these answers are correct
D. It is generally believed that they have a negative influence on employee morale.

80) The first step in activity-based costing is to

A. assign manufacturing overhead costs for each activity cost pool to products.
B. compute the activity-based overhead rate per cost driver.
C. identify and classify the major activities involved in the manufacture of specific products.
D. identify the cost driver that has a strong correlation to the activity cost pool.

81) _____ costs relate to more than one product and cannot be separately identified with an individual product

A. Joint
B. Bundle
C. Allocable
D. Common

82) Which statements describe the principal reason(s) why investors and creditors use financial statement analysis? 1. To assess the risks associated with expected returns 2. To establish recommended dividend and interest payments 3. To evaluate top and middle level management 4. To predict the amount of expected returns

A. 3 and 4
B. 1 and 4
C. 1, 2, and 3
D. 1 and 2

83) The _____ is also called the statement of financial position.

A. statement of retained earnings
B. balance sheet
C. statement of cash flow
D. income statement

84) _____ are profitability ratios.

A. Earnings per share and dividend yield
B. Dividend payout and rate of return in invested capital
C. Price earnings and current ratio
D. Gross profit rate and return on sales

85) The _____ is not one of the three major financial statements.

A. balance
B. income statement
C. statement of equity position
D. statement of cash flows

86) Which country does the text describe as becoming the largest producer and consumer of many of the world’s goods?

A. Mexico
B. China
C. Ecuador
D. Canada
E. Japan

87) 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 stakeholder interest theory.
B. The moral minimum theory.
C. The corporate citizenship theory.
D. The maximizing profits theory.
E. The social audit theory.

88) Diversity training programs are generally intended to provide a vehicle for _____.

A. eliminating group learning
B. increasing awareness and examining stereotypes
C. balancing work/life conflicts
D. focusing on individual differences
E. socializing otherwise unmanageable employees

89) One study found that manufacturing labor costs about ___ an hour in China, compared to ____ dollars in the United States.

A. Less than $1; about 25
B. Less than $1; about 15
C. $2; about 25
D. About $2; about 15
E. Less than $1; about 40


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 statements is generally NOT true about state intermediate appellate courts?

A. The appellate court allows the parties to make oral arguments outlining their position.
B. The appellate court reviews the record of the trial court.
C. The appellate court allows the parties to introduce new evidence so long as it was not previously introduced at the original trial.
D. The appellate court usually allows the parties to file briefs outlining support for their positions.

92) Which article of the United States Constitution deals with the judicial power of the federal government?

A. Article III.
B. Article I.
C. Article IV.
D. Article II.
E. Article V.

93) If consumer incomes increase, the demand for product Y will _____________.

A. shift to the right if Y is a complementary good
B. necessarily remain unchanged
C. shift to the right if Y is a normal good

94) When an economist says that the demand for a product has increased, this means that:

A. consumers respond to a lower price by buying more.
B. quantity demanded is greater at each possible price.
C. the demand curve becomes steeper.
D. firms make less of the product available for sale.

95) The costs of delivering products in the _____ channel are much higher than delivering products in the _____ channel.

A. digital, physical
B. e-commerce, digital
C. physical, financial
D. digital, e-commerce
E. physical, digital

96) _____ is the integration of economic, social, cultural, and ecological facets of life, enabled by information technologies.

A. globalization
B. regionalization
C. business environment
D. nationalization

97) Which of the following is NOT a function of functional area information systems?

A. provides information mainly in the form of reports
B. provides analysis capabilities to middle level managers and staff
C. supports the managerial tasks of planning, organizing, and controlling operations
D. provides data from business events to the corporate database
E. provides information to managers in the functional areas

98) The use of a(n) _____ serves as a comparison to assess the existence and potency of the manipulation.

A. Criterion variable
B. Field experiment
C. Control group
D. Explanatory variable
E. Experimental group

99) Which source of evidence to support experimental results is most threatened by the use of a field experiment?

A. Control of contamination from extraneous variables
B. Manipulation of the IV
C. Time order of the occurrence of the variables
D. Use of a control group
E. Agreement between the IV and DV

100) A ________ has been defined as being a coordinated collection of data, systems, tools, and techniques with supporting software and hardware by which an organization gathers and interprets relevant information from business and environment and turns it into a basis for marketing action.

A. marketing decision support system
B. database management system
C. marketing intelligence system
D. marketing research system
E. marketing information system



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