Marketing Boone 3e, Test Bank Chapter 1

Chapter 1Marketing: The Art and Science of Satisfying Customers
MULTIPLE CHOICE
1. What utility does Cannondale create when the company combines aluminum and other
components in the production of bicycles?

ownership utility
form utility
place utility
time utility
a.
b.
c.
d.
ANS: B
PTS: 1
DIF: 1
REF: 5
OBJ: 1-1
BLM: Higher Order
NOT: AACSB Reflective Thinking | TB&E Model Marketing Plan
2. When you purchase concert tickets over the Internet, which of the following utilities is NOT
created?
place utility
time utility
form utility
ownership utility
a.
b.
c.
d.
ANS: C
PTS: 1
DIF: 2
REF: 5
OBJ: 1-1
BLM: Higher Order
3. Which of the following must all organizations create in order to survive?
a. a variety of goods or services
b. utility
c. an environment of ethics and social consciousness
d. advertising, salesmanship, and consumer-focused sales promotion
ANS: B
OBJ: 1-1
PTS: 1
BLM: Remember
DIF: 1
REF: 5
NOT: AACSB Analytic | TB&E Model Marketing Plan
4. What is the want-satisfying power of a product called?

a. utility
b. price
c. buyers attraction
d. function
ANS: A
OBJ: 1-1
PTS: 1
BLM: Remember
DIF: 1
REF: 5
Copyright 2013 Nelson Education Ltd.
1-1
Chapter 1 Marketing: The Art and Science of Satisfying Customers
What utility does Purolator create when the company offers a variety of
package delivery services?
a. time utility
b. place utility
c. ownership utility
d. form utility
5.
ANS: A
PTS: 1
DIF: 1
REF: 5
OBJ: 1-1
BLM: Higher Order
6. What utility is created when a firm converts raw materials and other inputs into finished
products?
a. ownership utility
b. time utility
c. form utility
d. place utility
ANS: C
PTS: 1
DIF: 2
REF: 5
OBJ: 1-1
BLM: Higher Order
7. Which of the following is NOT a reason for a growing global marketplace?
a. internet technology
b. trade agreements
c. no single country can manufacture, supply, and consume all that it produces.
d. changing climate patterns
ANS: D
PTS: 1
DIF: 2
REF: 7
OBJ: 1-1
BLM: Remember
NOT: AACSB Analytic | TB&E Model International Perspective
8. Approximately how much trade crosses the CanadaU.S. border each day?
a. $1.2 million
b. $150 million
c. $500 million
d. $1.4 billion
ANS: D
OBJ: 1-1
PTS: 1
BLM: Remember
DIF: 2
REF: 8
9. When in marketing history did the production era end in North America?
a. late 1800swith the mass immigration of skilled workers to North America
b. 1920swith the improvement in production capabilities
c. 1960swith the establishment of overseas production facilities
d. 21st centurywith the introduction of robotics
ANS: B
OBJ: 1-2
PTS: 1
BLM: Remember
DIF: 2
REF: 9-10
10. What era of marketing history had a marketing philosophy that could be summarized by the
phrase a good product will sell itself?

1-2

a.
b.
c.
d.
production era
sales era
marketing era
relationship era
ANS: A
OBJ: 1-2
PTS: 1
BLM: Remember
DIF: 2
REF: 8
11. A company produces a high-quality product, with a maximum monthly output of 10,000 units.
Production levels are constant and the company relies on its marketing department to find
customers. What era of marketing history is this approach consistent with?
a. production era
b. relationship era
c. sales era
d. marketing era
ANS: C
PTS: 1
DIF: 2
REF: 9
OBJ: 1-2
BLM: Higher Order
12. Which of the following factors contributed to the transition from the production era to the
sales era?
significantly increased consumer demand
improved production techniques
increased urbanization
the Great Depression
a.
b.
c.
d.
ANS: B
OBJ: 1-2
PTS: 1
BLM: Remember
DIF: 1
REF: 9
13. What type of orientation does a company have when it assumes that customers will resist
purchasing products NOT deemed essential and, therefore, the marketing department must
overcome this resistance through personal selling and advertising?
a. production orientation
b. marketing orientation
c. sales orientation
d. relationship orientation
ANS: C
PTS: 1
DIF: 1
REF: 9
OBJ: 1-2
BLM: Higher Order
1-3
What characterizes a buyers market?

more goods and services than buyers
more buyers than available goods and services
practically no competition in the marketplace
slow economic growth
14.
a.
b.
c.
d.
ANS: A
OBJ: 1-2
PTS: 1
BLM: Remember
DIF: 1
REF: 9
15. What BEST explains the emergence of the marketing concept?

a. higher production levels
b. a shift from a production to a sales orientation
c. a shift from a sellers market to a buyers market
d. a focus on product quality
ANS: C
OBJ: 1-2
PTS: 1
BLM: Remember
DIF: 2
REF: 9
16. When did relationship marketing emerge?

a. right after the end of World War II
b. during the mid-1960s
c. during the mid-1980s
d. during the 1990s
ANS: D
OBJ: 1-2
PTS: 1
BLM: Remember
DIF: 2
REF: 10
17. Which of the following BEST applies to a strong market orientation?

a. It reflects the adoption by a firm of a sales orientation.
b. It is consistent with a production orientation.
c. It becomes necessary with a shift from a buyers market to a sellers market.
d. It generally improves market success and overall performance.
ANS: D
OBJ: 1-2
PTS: 1
BLM: Remember
DIF: 2
REF: 10
18. What type of relationships do firms focus on in the relationship era?

a. short-term relationships with customers and suppliers
b. long-term relationships with customers and suppliers
c. short-term relationships with customers
d. long-term relationships with customers
ANS: B
OBJ: 1-2
PTS: 1
BLM: Remember
DIF: 2
REF: 10
1-4

19.
What management approach would MOST likely endanger the future growth
of a company?
a. when management adopts a consumer orientation
b. when management becomes aware of the scope of its business
c. when management becomes committed to maintaining a product-oriented
philosophy
d. when management begins focusing on providing benefits rather than producing
products
ANS: C
OBJ: 1-2
PTS: 1
BLM: Remember
DIF: 2
REF: 8
20. If a company such as J.B. Hunt Trucking wanted to avoid marketing myopia, how should it
define its business?

as transportation
as trucking
as materials handling
as freight hauling
a.
b.
c.
d.
ANS: A
PTS: 1
DIF: 1
REF: 12
OBJ: 1-3
BLM: Higher Order
21. What statement would suggest that the firm has avoided marketing myopia?
a. We write computer software.
b. We make our customers dreams come true.
c. We manufacture high-quality machine tools.
d. We handle freight for our customers.
ANS: B
PTS: 1
DIF: 1
REF: 12
OBJ: 1-3
BLM: Higher Order
22. How many not-for-profit organizations are there in Canada?
a. under 100 000
b. between 100 000 and 124 000
c. between 125 000 and 159 000
d. over 160 000
ANS: D
OBJ: 1-3
PTS: 1
BLM: Remember
DIF: 3
REF: 13
23. Who often benefits from an alliance between a not-for-profit organization and a for-profit
organization?
neither party
both parties
the not-for-profit more than the for-profit
the for-profit more than the not-for-profit
a.
b.
c.
d.
ANS: B
OBJ: 1-3
PTS: 1
BLM: Remember
DIF: 2
REF: 13
1-5

24. Which of the following statements BEST applies when comparing not-for-profit organizations
to for-profit organizations?
Not-for-profit organizations cannot be impacted by contributors personal agendas.
Not-for-profit organizations may only market intangibles.
Not-for-profit organizations depend on strategic alliances with for-profits.
Not-for-profit organizations must try to find ways to market only their services.
a.
b.
c.
d.
ANS: C
OBJ: 1-4
PTS: 1
BLM: Remember
DIF: 3
REF: 14
25. What is the MOST obvious distinction between not-for-profit and for-profit organizations?
a. for-profits have more exact marketing goals
b. not-for-profits have a different view of what constitutes the bottom line
c. customers of not-for-profits have more control
d. not-for-profits market services, not goods
ANS: B
OBJ: 1-4
PTS: 1
BLM: Remember
DIF: 1
REF: 14
26. What type of marketing is an example of traditional marketing, as opposed to non-traditional
marketing?
political marketing
cause marketing
event marketing
organization marketing
a.
b.
c.
d.
ANS: A
OBJ: 1-5
PTS: 1
BLM: Remember
DIF: 1
REF: 15
27. Melissa is managing the campaign of her friend for the presidency of the student council.
What type of marketing is Melissas effort an example of?

cause marketing
person marketing
place marketing
a.
b.
c.
d.
ANS: B
PTS: 1
DIF: 1
REF: 15
OBJ: 1-5
BLM: Higher Order
28. You receive a flyer urging you to attend a rally for a local political candidate. Youre asked to
bring a can of food for the local food bank as the price of admission. What two types of
marketing is this a combination of?
a. event and person marketing
b. event and organization marketing
c. organization and cause marketing
d. cause and person marketing
ANS: D
PTS: 1
DIF: 3
REF: 15-16
OBJ: 1-5
BLM: Higher Order
1-6

29. A music star promotes her concerts, but also uses her concerts to promote a charitable cause.
What two types of marketing is this example a combination of?

event and person marketing
cause and person marketing
cause and event marketing
person and organization marketing
a.
b.
c.
d.
ANS: C
PTS: 1
DIF: 3
REF: 15-16
OBJ: 1-5
BLM: Higher Order
30. What is the basic objective of place marketing?
a. to attract visitors or new businesses to a particular area
b. to influence others to accept the goals of the sponsoring organization
c. to convince people to attend a sporting or cultural event
d. to bring to the attention of the public some charitable issue
ANS: A
OBJ: 1-5
PTS: 1
BLM: Remember
DIF: 1
REF: 15-16
31. What type of marketing do federal and provincial departments of tourism typically engage in?
a. organization marketing
b. person marketing
c. place marketing
d. cause marketing
ANS: C
PTS: 1
DIF: 1
REF: 15-16
OBJ: 1-5
BLM: Higher Order
32. Mars Inc.s M&Ms division donates 50 cents of specially marked candy sales to the Special
Olympics. What is this an example of?

event marketing
person marketing
cause marketing
place marketing
a.
b.
c.
d.
ANS: C
PTS: 1
DIF: 1
REF: 16
OBJ: 1-5
BLM: Higher Order
1-7
What type of marketing does the Coca-Cola Company engage in as an official

sponsor of the Olympics?
a. place marketing
b. event marketing
c. person marketing
d. organization marketing
33.
ANS: B
PTS: 1
DIF: 2
REF: 16-17
OBJ: 1-5
BLM: Higher Order
34. An alumni association at a university sends out announcements promoting the upcoming
football game and an alumni association function. What two types of marketing is this
example a combination of?
a. place and person marketing
b. event and organization marketing
c. person and organization marketing
d. event and place marketing
ANS: B
PTS: 1
DIF: 3
REF: 16-17
OBJ: 1-5
BLM: Higher Order
35. Some Ontario drivers have licence plates that have the logo of their university on their plate.
What type of marketing is this an example of?

cause marketing
place marketing
event marketing
a.
b.
c.
d.
ANS: A
PTS: 1
DIF: 2
REF: 17
OBJ: 1-5
BLM: Higher Order
36. What are companies able to do by converting indifferent customers into loyal ones through
relationship marketing?
minimize lifetime value
start a process by which customers become bound contractually to the business
avoid the necessity of improving customer service in the long run
generate repeat sales
a.
b.
c.
d.
ANS: D
OBJ: 1-6
PTS: 1
BLM: Remember
DIF: 2
REF: 18
1-8
The application of relationship marketing requires attention to levels of

customer loyalty. What is the highest level, as defined by this type of marketing?
a. loyal supporter of the company and its goods and services
b. advocate who buys the products and recommends them to others
c. regular purchaser of the companys products
d. shareholder who literally buys into the organization and its mission
37.
ANS: B
PTS: 1
DIF: 3
REF: 18
OBJ: 1-6
BLM: Higher Order
38. Many hotel chains offer free stays and other perks to repeat customers. What is this an
example of?
a. relationship marketing
b. transaction-based marketing
c. team marketing
d. a strategic alliance
ANS: A
PTS: 1
DIF: 1
REF: 18
OBJ: 1-6
BLM: Higher Order
39. A biotechnology company and a university medical school work to develop a new drug to
treat arthritis. What is this an example of?

a joint marketing agreement
marketing research
a one-to-one marketing program
a strategic alliance
a.
b.
c.
d.
ANS: D
PTS: 1
DIF: 1
REF: 20
OBJ: 1-6
BLM: Higher Order
40. Schwanns Foods sells its products through both grocery stores and door-to-door sales.
Selling, order taking, delivery, and limited customer service are all conducted by the drivers.
What two marketing functions overlap as a result of the drivers required responsibilities?
a. facilitation and distribution
b. exchange and facilitation
c. distribution and exchange
d. exchange and financing
ANS: C
PTS: 1
DIF: 3
REF: 21
OBJ: 1-7
BLM: Higher Order
1-9
What function is Future Shop performing when it sells a person a new

television or DVD player?
a. facilitation
b. buying
c. distribution
d. risk taking
41.
ANS: C
PTS: 1
DIF: 2
REF: 21
OBJ: 1-7
BLM: Higher Order
42. Which of the following are included in the facilitating functions of marketing?
a. securing marketing information and risk taking
b. buying and selling
c. transportation and storage
d. typing and separation
ANS: A
OBJ: 1-7
PTS: 1
BLM: Remember
DIF: 2
REF: 21
43. What is involved in the selling function of marketing?

a. making sufficient quantities of goods available in the marketplace
b. ensuring products meet established quality and quantity standards
c. securing marketing information
d. using advertising, personal selling, and sales promotion
ANS: D
OBJ: 1-7
PTS: 1
BLM: Remember
DIF: 2
REF: 21
44. What function is financing a part of?

a. exchange
b. pricing
c. commercial
d. facilitating
ANS: D
OBJ: 1-7
PTS: 1
BLM: Remember
DIF: 2
REF: 21
45. General Motors Acceptance Corporation provides credit to GM dealers, as well as buyers.
What function is this an example of?

financing
exchange
distribution
securing marketing information
a.
b.
c.
d.
ANS: A
PTS: 1
DIF: 2
REF: 21
OBJ: 1-7
BLM: Higher Order
1-10
What are the physical distribution functions of marketing?

storing and transporting
standardization and grading
financing and risk taking
buying and selling
46.
a.
b.
c.
d.
ANS: A
OBJ: 1-7
PTS: 1
BLM: Remember
DIF: 1
REF: 21
47. Why do marketers apply quantity control standards?

a. to engage in the process of exchange
b. to reduce the need for purchasers to inspect each item they purchase
c. to determine the amount an individual will be allowed to buy on credit
d. to develop channels of distribution for a product
ANS: B
PTS: 1
DIF: 2
REF: 21
OBJ: 1-7
BLM: Higher Order
48. What are moral standards of behaviour expected by society called?
a. social responsibilities
b. marketing concepts
c. facilitating functions of marketing
d. ethics
ANS: D
OBJ: 1-8
PTS: 1
BLM: Remember
DIF: 1
REF: 22
NOT: AACSB Ethics | TB&E Model Marketing Plan
49. Approximately what percentage of large companies offer some sort of ethics training for
workers?
a. less than one-quarter
b. around one-third
c. around one-half
d. more than one-half
ANS: D
OBJ: 1-8
PTS: 1
BLM: Remember
DIF: 2
REF: 22
50. Which of the following involves marketing philosophies, policies, procedures, and actions
whose primary objective is the enhancement of society?

social responsibility
green marketing
ethics
relationship marketing
a.
b.
c.
d.
ANS: A
OBJ: 1-8
PTS: 1
BLM: Remember
DIF: 1
REF: 22
1-11
What type of behaviour do Walmart stores exhibit by contributing to local

scholarships and community programs?
a. relationship marketing
b. social responsibility
c. green marketing
d. one-to-one marketing
51.
ANS: B
PTS: 1
DIF: 2
OBJ: 1-8
BLM: Higher Order
REF: 22
52. According to a Canadian group called Network for Business sustainability, how much of a
premium are customers willing to pay for sustainable products?

a. 6%
b. 8%
c. 10%
d. 12%
ANS: C
OBJ: 1-8
PTS: 1
BLM: Remember
DIF: 1
REF: 23
53. The final marketing function includes which of the following?

a. Securing marketing information
b. Financing
c. Risk-taking
d. Buying
ANS: A
OBJ: 1-7
PTS: 1
BLM: Remember
DIF: 1
REF: 23
TRUE/FALSE
1. Production and marketing of goods and services are two basic functions that create utility.
ANS: T
OBJ: 1-1
PTS: 1
DIF: 1
REF: 5
NOT: AACSB Analytic | TB&E Model Customer
2. By combining fabric, thread, wood, springs, and other components, a furniture maker creates
time utility for its consumers.

ANS: F
OBJ: 1-1
PTS: 1
DIF: 1
REF: 5
NOT: AACSB Reflective Thinking | TB&E Model Customer
3. Buying an iPod generates ownership utility; however, buying a concert ticket does not.
ANS: F
OBJ: 1-1
PTS: 1
DIF: 2
REF: 5
1-12

4.
ANS: T
OBJ: 1-1
All organizations must create utility to survive.

PTS: 1
DIF: 1
REF: 5
5. Taylor purchased a new TV at Best Buy. Later that evening he invited his cousin, Marshall, to
watch a baseball game. Impressed with the TVs performance, Marshall went home and
purchased the same TV on Best Buys website. Time, place, and ownership utility were
created for Marshall.
ANS: T
OBJ: 1-1
PTS: 1
DIF: 2
REF: 5
6. Successful marketing specialists must approach the marketplace in a three-step method:
determine consumer wants, calculate an organizations ability to service these wants, and put
in place the processes to create the goods or services to change consumers into customers.
ANS: T
OBJ: 1-1
PTS: 1
DIF: 3
REF: 5-6
7. Marketers are responsible for functions such as identifying customer needs and designing
products to meet these needs. Pricing decisions are typically left to finance or accounting
departments.
ANS: F
OBJ: 1-1
PTS: 1
DIF: 1
REF: 6
8. The definition of marketing includes the assumption that the marketing processes will be
conducted ethically and will serve the best interests of society, as well as the organization.
ANS: T
OBJ: 1-1
PTS: 1
DIF: 2
REF: 6-7
9. The expanded concept of marketing assumes the marketing effort will proceed in a socially
responsible manner and the needs of society will be addressed before the needs of the
shareholders.
ANS: F
OBJ: 1-1
PTS: 1
DIF: 2
REF: 7
10. International markets are becoming more important but less interdependent than in years past.
This trend is due to growth in electronic commerce and other computer technologies that have
simplified the way business is conducted.
ANS: F
OBJ: 1-1
PTS: 1
DIF: 2
REF: 7
NOT: AACSB Reflective Thinking | TB&E Model International Perspective
1-13
The existence of the World Trade Organization, the passage of the North
American Free Trade Agreement, and the creation of the euro are examples of protectionism
on the part of nations concerned with increased globalization of the marketplace.
11.
ANS: F
OBJ: 1-1
PTS: 1
DIF: 2
REF: 7
12. A trade dispute in Nigeria, a pipeline rupture in Alberta, or a tsunami in Asia can impact the
price of everything from cars to clothing. The increased costs can be attributed solely to the
cost of the gasoline used to deliver these goods.
ANS: F
OBJ: 1-1
PTS: 1
DIF: 2
REF: 7
13. In the global marketplace, brand standardization is the most effective way to market products.
For example, having a single product name, such as Coke, Toshiba, or BMW, allows a
company to create a universal marketing program that can be implemented to attract
consumers from all the countries in which it markets.
ANS: F
OBJ: 1-1
PTS: 1
DIF: 2
REF: 8
14. Defined in its most historical and simplest form, marketing is essentially an exchange process
in which one party, the consumer, receives something to satisfy a perceived need.
ANS: F
OBJ: 1-2
PTS: 1
DIF: 2
REF: 8
15. Studies have shown that approximately 50 percent of all new products introduced into the
marketplace will eventually succeed; most of these are the highest-quality products.
ANS: F
OBJ: 1-2
PTS: 1
DIF: 2
REF: 9
16. An increase in output, as a result of improvements in production techniques, helped usher in
the marketing era in the 1950s.

ANS: F
OBJ: 1-2
PTS: 1
DIF: 1
REF: 9
17. Production-era marketing paid close attention to the different needs of the consumer.
ANS: F
OBJ: 1-2
PTS: 1
DIF: 2
REF: 9
NOT: AACSB Reflective Thinking | TB&E Model Strategy
18. The marketing era is defined by the shift in focus from products and sales to satisfying a
consumers needs.
ANS: T
OBJ: 1-2
PTS: 1
DIF: 2
REF: 9
1-14

19. The marketing era was characterized by the phrase the consumer rules.
ANS: T
OBJ: 1-2
PTS: 1
NOT: NOT:
DIF: 1
REF: 8
20. When management shifts its focus from product orientation to customer orientation, future
growth is endangered.
ANS: F
OBJ: 1-2
PTS: 1
DIF: 1
REF: 9
NOT: AACSB Analytic | TB&E Model Strategy
21. A firm with a fully developed marketing concept is one with a company-wide consumer
orientation with the objective of achieving long-term success.

ANS: T
OBJ: 1-2
PTS: 1
DIF: 1
REF: 9
22. A focus on maintaining and satisfying existing customers and suppliers is consistent with the
relationship era.
ANS: T
OBJ: 1-2
PTS: 1
DIF: 1
REF: 10-11
23. Relationship marketing begins once the sales transaction is completed.

ANS: F
OBJ: 1-2
PTS: 1
DIF: 1
REF: 11
24. Marketing myopia exists when management fails to recognize the scope of its business.
ANS: T
OBJ: 1-3
PTS: 1
DIF: 1
REF: 12
25. Firms that narrowly define their organizational goals can avoid the problem of marketing
myopia.
ANS: F
OBJ: 1-3
PTS: 1
DIF: 1
REF: 12
26. If WestJet describes itself as a transportation company rather than an airline, it is suffering
from marketing myopia.

ANS: F
OBJ: 1-3
PTS: 1
DIF: 2
REF: 12
1-15
The public sector in Canada has a more diverse array of not-for-profit

organizations than does the private sector.
27.
ANS: F
OBJ: 1-3
PTS: 1
DIF: 1
REF: 13
28. Some not-for-profit organizations have adopted the marketing concept by partnering with for-
profit companies.
ANS: T
OBJ: 1-3
PTS: 1
DIF: 2
REF: 13
29. Not-for profit organizations can be found only in the private sectors of an economy.
ANS: F
OBJ: 1-3
PTS: 1
DIF: 2
REF: 13
30. Not-for-profit organizations are generally less concerned with the bottom line than for-profit
organizations.
ANS: T
OBJ: 1-4
PTS: 1
DIF: 1
REF: 14
31. The primary difference between nonprofit organizations and profit organizations is the
marketing of tangible goods.

ANS: F
OBJ: 1-4
PTS: 1
DIF: 1
REF: 14
32. One important difference between for-profit and not-for-profit organizations is that for-profits
often market to multiple publics rather than the single public on which not-for-profits may
focus.
ANS: F
OBJ: 1-4
PTS: 1
DIF: 2
REF: 14
33. Freedom to focus on altruistic goals, rather than profitability alone, allows not-for-profit
organizations flexibility to operate successfully without the use of recognized marketing

principles.
ANS: F
OBJ: 1-4
PTS: 1
DIF: 1
REF: 14
34. For-profit organizations are more influenced by their customers than not-for-profits.
ANS: T
OBJ: 1-4
PTS: 1
DIF: 3
REF: 14
35. A problem unique to the not-for-profit organization is the major contributor who tries to
interfere with the organizations marketing program to promote a message the contributor
believes is relevant, rather than one the organization thinks is appropriate.
1-16

ANS: T
OBJ: 1-4
PTS: 1
DIF: 2
REF: 14
36. The five major types of nontraditional marketing are person marketing, place marketing,
political marketing, event marketing, and advocate marketing.

ANS: F
OBJ: 1-5
PTS: 1
DIF: 1
REF: 15
37. Celebrities such as Sidney Crosby and Celine Dion use person marketing to increase their
value in the marketplace.

ANS: T
OBJ: 1-5
PTS: 1
DIF: 1
REF: 15
38. Place marketing is important for cities like Niagara Falls and Quebec City because it is a
useful technique to attract visitors.

ANS: T
OBJ: 1-5
PTS: 1
DIF: 2
REF: 15-16
39. Marketing efforts designed to attract visitors to a particular area or to improve the image of a
city, province, or country would be examples of cause marketing.

ANS: F
OBJ: 1-5
PTS: 1
DIF: 1
REF: 15-16
40. Marketing of sporting, cultural, and recreational activities to selected target markets is known
as cause marketing.
ANS: F
OBJ: 1-5
PTS: 1
DIF: 1
REF: 16
41. The Gaps sponsorship of the Product Red campaign to combat AIDS in Africa is an
example of a for-profit organization linking its products to a social objective in cause

marketing.
ANS: T
OBJ: 1-5
PTS: 1
DIF: 2
REF: 16
42. Surveys have shown that marketers overestimate the impact that cause marketing has on how
the customer views the company. Sales will not increase because a company is linked to a
cause.
ANS: F
OBJ: 1-5
PTS: 1
DIF: 2
REF: 16
43. A theatre group promoting a performance to raise funds in the fight against cancer is an
example of both cause marketing and event marketing.
1-17
ANS: T
OBJ: 1-5

PTS: 1
DIF: 2
REF: 16
44. The Canadian Armed Forces sending military personnel out to make a public appearance at
the Grey Cup is an example of organization marketing.

ANS: F
OBJ: 1-5
PTS: 1
DIF: 1
REF: 17
45. Virtually all colleges and universities have alumni associations that publish magazines, hold
reunions, and try to raise funds. These activities constitute organization marketing.
ANS: T
OBJ: 1-5
PTS: 1
DIF: 1
REF: 17
46. Interactive multimedia technologies have revolutionized the way people store, distribute,
retrieve, and present information.

ANS: T
OBJ: 1-6
PTS: 1
DIF: 1
REF: 18
NOT: AACSB Analytic | TB&E Model Technology
47. Interactive promotions put customers in control because they can easily obtain tips on product
usage and answers to customer service questions; they can also tell the company what they
like or dislike about a product and move on to another area of the Web.
ANS: T
OBJ: 1-6
PTS: 1
DIF: 2
REF: 19
48. Mobile marketing is a term used to describe marketing messages sent via wireless technology.
ANS: T
OBJ: 1-6
PTS: 1
DIF: 1
REF: 18
49. In todays competitive environment, attracting new customers is important, but maintaining
loyal customers is even more critical.

ANS: T
OBJ: 1-6
PTS: 1
DIF: 2
REF: 18
50. The traditional view of marketing can be described as transaction-based marketing.

ANS: T
OBJ: 1-6
PTS: 1
DIF: 1
REF: 18
1-18
Lifetime value of a customer is the measure of the revenues and intangible

benefits that a customer brings to an organization over an average lifetime.
51.
ANS: T
OBJ: 1-6
PTS: 1
DIF: 2
REF: 18
52. Relationship marketing broadens the scope of external marketing relationships to include
suppliers, customers, and referral sources.

ANS: T
OBJ: 1-6
PTS: 1
DIF: 2
REF: 18
53. The cost of finding new customers is far less than the cost of keeping old ones.
ANS: F
OBJ: 1-6
PTS: 1
DIF: 2
REF: 19
54. Under the relationship marketing concept, employees within a firm need not apply the same
high standards of customer satisfaction to internal relationships at they do to external

customer relationships.
ANS: F
OBJ: 1-6
PTS: 1
DIF: 1
REF: 18
55. Relationship marketing classifies its customers in terms of the strength of the organization-to-
customer relationship. The following customer relationship ladder outlines the type of
relationships and the degree of commitment: customer < regular purchaser < loyal supporter <
advocate.
ANS: T
OBJ: 1-6
PTS: 1
DIF: 3
REF: 18
56. Relationship marketing relies more heavily on information technologies than transaction
marketing.
ANS: T
OBJ: 1-6
PTS: 1
DIF: 2
REF: 18
57. The marketing department at Sun Oil Company uses the printing services within its own
company to design, edit, and print marketing materials. After mistakes and missed deadlines,
the marketing department hires an outside printer. Using the transaction-based marketing
theory, the Sun Oil printing department lost a customer when its own marketing department
outsourced the printing.
ANS: F
OBJ: 1-6
PTS: 1
DIF: 3
REF: 18
1-19
Buzz marketing is spreading the word about a product or service in an

informal fashion. Due to the Internet, companies can do little to control or direct this type of
consumer dialogue.
58.
ANS: F
OBJ: 1-6
PTS: 1
DIF: 2
REF: 19-20
59. A strategic alliance is defined as a partnership between a for-profit business and a not-for-
profit organization.
ANS: F
OBJ: 1-6
PTS: 1
DIF: 1
REF: 20
60. When determining product costs, marketing expenses will amount to approximately one-half
of the total cost of the product.

ANS: T
OBJ: 1-7
PTS: 1
DIF: 2
REF: 21
NOT: AACSB Analytic | TB&E Model Pricing
61. Westbrook & Co. seeks out products that will appeal to its customers and then uses
advertising, personal selling, and sales promotion to match the goods and services with the
appropriate customers. This part of the marketing process is described as the facilitating
function of marketing.
ANS: F
OBJ: 1-7
PTS: 1
DIF: 2
REF: 21
62. The functions of marketing can be grouped into three major categories: exchange functions,
physical distribution functions, and financing functions.

ANS: F
OBJ: 1-7
PTS: 1
DIF: 1
REF: 21
63. When we go to the grocery store and buy milk, steak, and a dozen eggs, whether we know it
or not, we are experiencing the effect of one of the facilitating functions of marketing.
ANS: T
OBJ: 1-7
PTS: 1
DIF: 2
REF: 21
64. The buying function of marketing involves advertising, personal selling, and sales promotion
in the attempt to match products and services to consumer needs.

ANS: F
OBJ: 1-7
PTS: 1
DIF: 1
REF: 21
65. When Starbucks makes a latte for a customer, it is performing a distribution function.
ANS: T
OBJ: 1-7
PTS: 1
DIF: 2
REF: 21
1-20

66. Manufacturers engage in risk taking when they create goods and services based on research
and their belief that consumers need them.

ANS: T
OBJ: 1-7
PTS: 1
DIF: 1
REF: 21
67. Less than one-quarter of all major corporations offer ethics training to employees.
ANS: F
OBJ: 1-8
PTS: 1
DIF: 2
REF: 22
68. Washquik Corporation recalled 200 000 washing machines that were experiencing motor
problems. Upon repair of a machine, service technicians were instructed to leave a box of
BioClean, a new environmentally friendly detergent offered by a partner company, BioCare.
The actions of Washquik show both an ethical and socially responsible approach to servicing
customers.
ANS: T
OBJ: 1-8
PTS: 1
DIF: 2
REF: 22
69. While social responsibility varies from country to country, ethical behaviour is the same
everywhere.
ANS: F
OBJ: 1-8
PTS: 1
DIF: 2
REF: 22
70. Timberland Companys charitable donations and time off given to employees who volunteer
are evidence of its social responsibility.

ANS: T
OBJ: 1-8
PTS: 1
DIF: 2
REF: 22
71. Liquid Resources, a waste management company, expands its scope of business to recycle
liquids that can be turned into fuel-grade ethanol. The decision to take the company in a new
direction is most likely based on ethics.
ANS: F
OBJ: 1-8
PTS: 1
DIF: 3
REF: 22
NOT: AACSB Ethics | TB&E Model Strategy
1-21

ESSAY
1. Define and discuss the four types of utility. Give examples of each, and explain which
functional areas within an organization are responsible for each one.

ANS:
Utility is the want-satisfying power of a good or service. There are four types of utility. Form
utility (conversion of raw materials and components into finished products) is evident with
gold, which can be used for jewelry and also in the manufacturing of electronic devices, such
as cellphones. Time utility (availability of goods and services when consumers want them) is
evident in 24-hour convenience stores. Place utility (availability of goods and services at
convenient locations) is evident in the location of convenience stores in areas that are easily
accessible and are where you want them. Ownership utility (ability to transfer title to goods
and services from marketer to buyer) is evident in signing up for a trip. Marketing is
responsible for ownership, time, and place. The production function is responsible for form
utility.
PTS: 1
DIF: 2
REF: 5
OBJ: 1-1
2. List the three steps required to create a customer.

ANS:
The three steps are: identify needs in the marketplace, find out which need(s) the organization
can profitably serve, and develop a product or service to convert potential buyers into
customers.
PTS: 1
DIF: 1
REF: 5-6
OBJ: 1-1
3. Explain the concept of marketing. What are some common misconceptions about marketing?
ANS:
Due to the continuous exposure to advertising and personal selling, many people equate
marketing with selling, or think that marketing begins only after a product has been produced.
In fact, marketing also involves analyzing customer needs, securing information needed to
design and produce products that match buyer expectations, efficiently distributing products,
satisfying customer preferences, and creating and maintaining relationships with customers
and suppliers. Marketing applies to both profit-seeking and not-for-profit organizations.
PTS: 1
DIF: 2
REF: 6
OBJ: 1-1
1-22
List some factors that have enticed marketers to extend their commerce
opportunities internationally.
4.
ANS:
Nations today do not have the ability to supply all the resources, produce the products, and
consume the output by themselves in order to maintain a viable economy. They are forced to
go outside their domestic arena to find more efficient and cost-effective manufacturing
sources and lucrative markets. Facilitating the search for these solutions are the political and
technological changes witnessed in the past 20 years. Governments are working together via
trade agreements, trade organizations, and currency consolidation to reduce trade barriers
between countries. In addition, the advent of the Internet and other computer technologies has
tapped new markets, brought existing markets closer, and improved the speed and efficiency
with which commerce is transacted.
PTS: 1
DIF: 3
REF: 7
OBJ: 1-1
5. List the four eras in marketing history in chronological order. Briefly describe the philosophy
behind each era.

ANS:
The four eras are the production era (quality products will sell themselves), the sales era
(creative selling and advertising will overcome consumer resistance and convince them to
buy), the marketing era (the consumer rulesfind a need and fill it), and the relationship era
(build and maintain cost-effective long-term relationships with customers, employees,
suppliers, and other parties for mutual benefit).
PTS: 1
DIF: 2
REF: 8
OBJ: 1-2
6. What is the major difference between the sales era and marketing era?
ANS:
During the sales era, companies assumed customers would resist purchasing products not
deemed essential, and that the task of personal selling and advertising was to convince them to
buy. During the marketing era, there was a shift in the focus of companies away from products
and sales to satisfying customer needs.
PTS: 1
DIF: 2
REF: 9
NOT: AACSB Analytic | TB&E Model Marketing Plan Plan
OBJ: 1-2
1-23

7.
Define relationship marketing and provide an example.
ANS:
Relationship marketing is the development and maintenance of long-term, cost-effective

relationships with individual customers, suppliers, employees, and other parties for mutual
benefit. Strategic alliances and partnerships among manufacturers, retailers, and suppliers
often benefit everyone. Walmart, for instance, works closely with its suppliers to ensure
products are available when and where consumers want them. These relationships reduce
costs, which leads to higher profits for the firms involved and lower prices for consumers. The
premise underlying this philosophy is that, although it is important to seek new customers, it
is still cheaper to maintain existing relationships than to continually build new ones.
PTS: 1
DIF: 2
REF: 10 -11 | 18
OBJ: 1-2 | 1-6
8. Define marketing myopia, and describe how a company can overcome a myopic view. Give
an example of a company before and after changing its view.

ANS:
Marketing myopia is defined as managements failure to recognize the scope of its business.
Firms can avoid marketing myopia through a broader focus on the benefits of their products
rather than the products themselves. A trucking company defining itself as a transportation
company, or a telephone company defining itself as a communications company, are examples
of how to avoid marketing myopia. Nokia defining itself as a cell phone manufacturer would
be a myopic view. However, Nokia seeing its mission as connecting people shows that the
creative focus of the company is on better ways to bring people together using
telecommunications.
PTS: 1
DIF: 3
REF: 12
OBJ: 1-3
9. What is the most obvious difference between a for-profit and a not-for-profit organization?
ANS:
Not-for-profit organizations are less concerned with the bottom line: the overall financial
performance and profitability of the organization. This doesnt mean, however, that not-forprofits can totally ignore financial issues. They still need to find cost-effective means of
marketing their goods and services.
PTS: 1
DIF: 1
REF: 14
OBJ: 1-4
1-24
Explain the potential challenges created by a major contributor to a not-forprofit organization.

10.
ANS:
A major resource contributorwhether a cash donor, volunteer, or someone who provides

other resourcesmay try to interfere with the marketing program in order to promote a
message the contributor believes is relevant. Major contributors might even restrict a
contribution to achieve their objectives.
PTS: 1
DIF: 1
REF: 14
OBJ: 1-4
11. List and describe the five types of nontraditional marketing. Give an example of each.
ANS:
Cause marketing is the identification and promotion of a social issue, cause, or idea to
selected target markets (Breast Cancer Research, Save the Rainforest). Person marketing is
designed to cultivate the attention and preference of a target market toward a person (a
political candidate). Place marketing is designed to attract visitors to, improve the image of, or
entice business opportunity to utilize a particular city, province, nation, or geographic area. (A
city vying for the rights to host an Olympic event will place market to the Olympic
committee.) Event marketing is the promotion of specific recreational, sporting, cultural, or
charitable activities to a specific target market (concert promotion, the Grey Cup).
Organizational marketing is the effort to influence others to recognize the goals, accept the
goods and services, or contribute in some way to the organization (Salvation Army Christmas
campaign, Mothers Against Drunk Driving, Canadian Armed Forces recruiting).
PTS: 1
DIF: 3
REF: 15
OBJ: 1-5
12. Explain interactive marketing and give an example of different interactive marketing
techniques.
ANS:
Interactive marketing refers to buyer-seller communications in which the customer controls

the amount of information received from the marketer. The buyer has immediate access to key
product information when he or she needs it.
Examples:
The Internet is an all-purpose global network through which a personal computer can send
and receive images and data. Virtual reality kiosks are another example.
PTS: 1
DIF: 3
REF: 18-19
OBJ: 1-6
1-25

13.
What is an advocate? What are the steps in converting a new customer into an
advocate?
ANS:
An advocate is a customer who not only buys a firms products but also recommends them to
others. The process begins when a new customer is acquired. The new customer is then turned
into a regular purchaser and then into a loyal supporter. Only then can the customer be turned
into an advocate.
PTS: 1
DIF: 2
REF: 18
OBJ: 1-6
14. Differentiate between transaction-based marketing and relationship marketing.

ANS:
Historically, marketing was viewed as a simple exchange process, that is, a process that
moved from transaction to transaction without any significant carry-forward of effects. In
other words, closing deals was more important than making friends. More recently, a new
concept explicitly realizes that relationships are important and maintaining a long-term
relationship between marketing firm and customer is not only satisfying, but also cost
effective. If a one-time customer can be converted to a loyal customer, more sales will be
generated over the long run. In short, its cheaper to keep a customer than to constantly find
new ones. The lifetime value of a customer is critical in relationship marketing.
PTS: 1
DIF: 2
REF: 18
OBJ: 1-6
15. Organizations occasionally form strategic alliances with one another for mutual benefit. How
would a for-profit and not-for-profit company benefit from such an alliance?

ANS:
Marketing alliances between for-profit and not-for-profit organizations can benefit both
parties by helping each other achieve their objectives. The not-for-profit benefits from the
advertising potential of the profit organization, giving it more exposure. The for-profit
organization benefits from the goodwill it generates with customers and employees alike.
Additionally, given a choice between two products of similar quality and price, the customer
will select the product aligned with a cause.
PTS: 1
DIF: 2
REF: 16 | 20
OBJ: 1-5 | 1-6
1-26

16.
List the four facilitating functions and provide examples.
ANS:
Standardization and grading can be found in the construction industry (sizing of doors, gauge
of wiring, dimensions of cut lumber, and height of cabinetry). The financing function allows
wholesalers and retailers to purchase goods and services on credit, allowing time to resell the
products before the payment is due (allowing wholesalers to pay invoices in full in 90 days).
Securing market information is collecting data on the potential customer; identifying their
needs, wants and buying habits, and competitive products in the market; and collecting
feedback after the sale (marketing research surveys at the malls and on the Internet). Risk
taking is the analysis of the cost and benefit of producing and marketing goods and services. It
measures the uncertainty of future sales.
PTS: 1
DIF: 3
REF: 21-22
OBJ: 1-7
17. Define ethics and social responsibility. Why are these two concepts important for marketers?
ANS:
Ethics consists of moral standards of behaviour expected by a society. Social responsibility

involves marketing philosophies, policies, procedures, and actions whose primary objective is
the enhancement of society. Following ethical standards and exhibiting social responsibility
often improves customer relationships, employee loyalty, marketplace success, and financial
performance.
PTS: 1
DIF: 2
REF: 22
OBJ: 1-8
1-27

MATCHING
Match each item to the statement or sentence listed below.

utility
buzz marketing
exchange process
sellers market
buyers market
marketing myopia
social responsibility
relationship marketing
person marketing
place marketing
event marketing
interactive marketing
lifetime value of a customer
one-to-one marketing
strategic alliances
not-for-profit
ethics
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
k.
l.
m.
n.
o.
p.
q.
r.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
A(n) _____ occurs when buyers outnumber sellers or product supply.

An advertisement for a political party candidate is an example of _____.
The want-satisfying power of a product is its _____.
results from managements failure to recognize the scope of its business.
A(n) _____ occurs when there are more sellers (or products) than buyers.
For-profit organizations and not-for-profit organizations often form _____.
The _____ occurs when two or more parties exchange something of value.
is a customized marketing program designed to build long-term relationships with individual
customers.
Buyer-seller communications in which the customer controls the amount and type of
information received from a marketer is called _____.
The promotion of music concerts and movies is referred to as _____.
Many not-for-profits utilize _____ in order to influence people to accept their goals or
contribute in some way.
describes the current era in the history of marketing.
An advertisement titled Discover Ontario is an example of _____.
The _____ equals the revenues and benefits a customer brings to an organization, minus
expenses to attract and maintain the relationship.
Corporations that voluntarily recycle paper, glass, and electronics practise _____.
Word-of-mouth advertising that has grown in effectiveness with the advent of the Internet is
called _____.
The Canadian Cancer Society in the private sector and the Ontario Ministry of Small Business
and Consumer Services in the public sector are examples of _____.
The moral standards of behaviour expected by a society are known as _____.
1-28
1. ANS:
OBJ:
2. ANS:
OBJ:
3. ANS:
OBJ:
4. ANS:
OBJ:
5. ANS:
OBJ:
6. ANS:
OBJ:
7. ANS:
OBJ:
8. ANS:
OBJ:
9. ANS:
OBJ:
10. ANS:
OBJ:
11. ANS:
OBJ:
12. ANS:
OBJ:
13. ANS:
OBJ:
14. ANS:
OBJ:
15. ANS:
OBJ:
16. ANS:
OBJ:
17. ANS:
OBJ:
18. ANS:
OBJ:
D
1-2
I
1-5
A
1-1
F
1-3
E
1-2
P
1-6
C
1-2
O
1-6
M
1-6
K
1-5
L
1-5
H
1-2
J
1-5
N
1-6
G
1-8
B
1-6
Q
1-3
R
1-8

PTS: 1
DIF: 1
REF: 9
PTS: 1
DIF: 1
REF: 15
PTS: 1
DIF: 1
REF: 5
PTS: 1
DIF: 1
REF: 12
PTS: 1
DIF: 1
REF: 9
PTS: 1
DIF: 1
REF: 20
PTS: 1
DIF: 1
REF: 8
PTS: 1
DIF: 1
REF: 19
PTS: 1
DIF: 1
REF: 18-19
PTS: 1
DIF: 1
REF: 15-16
PTS: 1
DIF: 1
REF: 17
PTS: 1
DIF: 1
REF: 11
PTS: 1
DIF: 1
REF: 15-16
PTS: 1
DIF: 1
REF: 18
PTS: 1
DIF: 1
REF: 22
PTS: 1
DIF: 1
REF: 19
PTS: 1
DIF: 1
REF: 13
PTS: 1
DIF: 1
REF: 22
1-29

Marketing Boone 3e, Test Bank Chapter 1

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Marketing Boone 3e, Test Bank Chapter 1

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Chapter 1Marketing: The Art and Science of Satisfying Customers

components in the production of bicycles?

4. What is the want-satisfying power of a product called?

Copyright 2013 Nelson Education Ltd.

Chapter 1 Marketing: The Art and Science of Satisfying Customers

phrase a good product will sell itself?

Chapter 1 Marketing: The Art and Science of Satisfying Customers

Copyright 2013 Nelson Education Ltd.

Chapter 1 Marketing: The Art and Science of Satisfying Customers

What characterizes a buyers market?

15. What BEST explains the emergence of the marketing concept?

16. When did relationship marketing emerge?

17. Which of the following BEST applies to a strong market orientation?

18. What type of relationships do firms focus on in the relationship era?

Copyright 2013 Nelson Education Ltd.

Chapter 1 Marketing: The Art and Science of Satisfying Customers

define its business?

Copyright 2013 Nelson Education Ltd.

Chapter 1 Marketing: The Art and Science of Satisfying Customers

26. What type of marketing is an example of traditional marketing, as opposed to non-traditional

What type of marketing is Melissas effort an example of?

Copyright 2013 Nelson Education Ltd.

Chapter 1 Marketing: The Art and Science of Satisfying Customers

What two types of marketing is this example a combination of?

Olympics. What is this an example of?

Copyright 2013 Nelson Education Ltd.

Chapter 1 Marketing: The Art and Science of Satisfying Customers

What type of marketing does the Coca-Cola Company engage in as an official

What type of marketing is this an example of?

Copyright 2013 Nelson Education Ltd.

Chapter 1 Marketing: The Art and Science of Satisfying Customers

The application of relationship marketing requires attention to levels of

treat arthritis. What is this an example of?

Copyright 2013 Nelson Education Ltd.

Chapter 1 Marketing: The Art and Science of Satisfying Customers

What function is Future Shop performing when it sells a person a new

43. What is involved in the selling function of marketing?

44. What function is financing a part of?

What function is this an example of?

Copyright 2013 Nelson Education Ltd.

Chapter 1 Marketing: The Art and Science of Satisfying Customers

What are the physical distribution functions of marketing?

47. Why do marketers apply quantity control standards?

whose primary objective is the enhancement of society?

Copyright 2013 Nelson Education Ltd.

Chapter 1 Marketing: The Art and Science of Satisfying Customers

What type of behaviour do Walmart stores exhibit by contributing to local

premium are customers willing to pay for sustainable products?

53. The final marketing function includes which of the following?

time utility for its consumers.

Copyright 2013 Nelson Education Ltd.

Chapter 1 Marketing: The Art and Science of Satisfying Customers

All organizations must create utility to survive.

6. Successful marketing specialists must approach the marketplace in a three-step method:

Copyright 2013 Nelson Education Ltd.

Chapter 1 Marketing: The Art and Science of Satisfying Customers

16. An increase in output, as a result of improvements in production techniques, helped usher in

the marketing era in the 1950s.

Copyright 2013 Nelson Education Ltd.

Chapter 1 Marketing: The Art and Science of Satisfying Customers

orientation with the objective of achieving long-term success.

23. Relationship marketing begins once the sales transaction is completed.

from marketing myopia.