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Chapter 1: The Nature of Marketing



True/False
Indicate whether the statement is true or false.
 

 1. 

Marketing is the business function that interprets customer needs to the rest of the organization and brings the offerings of the firm to the customer.
 

 2. 

Marketing is responsible for the performance of eight universal functions: buying, selling, transporting, storing, standardization and grading, financing, risk taking, and securing marketing information.
 

 3. 

The essence of marketing is the exchange process.  For example, transactions between for-profit organizations and their customers typically involve exchanging tangible goods or intangible services for money.
 

 4. 

Exchange is just as complex in subsistence-level economies as it is in highly developed societies.
 

 5. 

Effective marketing is achieved with careful planning, which begins with a thorough analysis of the laws governing market transactions.
 

 6. 

At the micro level, marketing involves the development of systems that direct an economy's flow of goods and services from producers to consumers.
 

 7. 

Utility is the want-satisfying power of a product or service.
 

 8. 

A firm's finance department is responsible for creating form utility.
 

 9. 

Ownership utility occurs when consumers find goods and services available when and where they want to purchase them.
 

 10. 

A sales orientation is what we call it when the prevailing philosophy of a firm is that a product of high physical quality will sell itself.
 

 11. 

A primary task under a market orientation is to develop ways to research and understand various aspects of the market.
 

 12. 

A market orientation is focused exclusively on understanding the customer.
 

 13. 

A market-oriented approach has all of the benefits of a production orientation and a sales orientation, plus it can identify new opportunities and help a company avoid being surprised when changes occur in the market.
 

 14. 

The fully developed marketing concept is a company-wide consumer orientation with the objectives of satisfying customers and achieving long-run success.
 

 15. 

The marketing concept is about how a firm behaves; market orientation is about the attitude or philosophy underlying a firm's behaviour.
 

 16. 

The marketing concept requires careful analysis and monitoring of competitors' actions.
 

 17. 

The difference between the marketing concept and the societal marketing concept is that the societal marketing concept only applies to major products and services of broad, long-term consequence to society.
 

 18. 

Marketing-related occupations account for 25 to 33 percent of the jobs in Canada.
 

 19. 

Marketing costs amount to between 40 and 60 percent of the price of all the products and services we buy.
 

 20. 

Public organizations like art galleries, churches and charities have found that marketing principles generally cannot be applied to their situations since their objectives do not include making profit.
 

Multiple Choice
Identify the choice that best completes the statement or answers the question.
 

 21. 

Marketing is concerned with meeting customer needs, but meeting customer needs can be difficult because there can be a gap between what producers can provide and what customers are looking for. Which of the following factors can contribute to this gap?
a.
customer perceptions
b.
time constraints
c.
cost constraints
d.
all of the above
 

 22. 

Performing the eight exchange functions of marketing reduces the size of the gap between the organization and the customer.  A reduction in this gap results in
a.
an increased likelihood that consumers will enter into an exchange relationship with the organization.
b.
a reduction in the utility that consumers associate with a product or service.
c.
greater profitability for the organization.
d.
none of the above.
 

 23. 

Which of the following is NOT one of the eight exchange functions of marketing?
a.
buying
b.
securing marketing information
c.
advertising
d.
standardization and grading
 

 24. 

The essence of marketing is the process by which two or more people give something of value to each other to satisfy felt needs.  This is called
a.
the exchange process.
b.
the marketing process.
c.
the facilitating function.
d.
marketing myopia.
 

 25. 

Marketing is
a.
the process of creating and resolving exchange relationships.
b.
the process of planning and executing the conception, pricing, promotion, and distribution of goods to create exchanges that satisfy needs.
c.
the process of planning and executing the conception, pricing, promotion, and distribution of ideas and services to create exchanges that satisfy needs.
d.
all of the above.
 

 26. 

Marketing is directly responsible for creating all types of utility except
a.
form.
b.
place.
c.
ownership.
d.
time.
 

 27. 

When the Ford Motor Company converts glass, steel, fabrics, rubber and other components into a Mustang or a Taurus, the company is said to have created
a.
form utility.
b.
business.
c.
production.
d.
resources.
 

 28. 

You stop by McDonald's for a burger and shake for a quick lunch.  The restaurant has provided you with what kind of utility?
a.
time
b.
place
c.
form
d.
ownership
 

 29. 

Ownership utility is created for high-value products such as houses when
a.
the purchaser moves into the house.
b.
the real estate agent puts the sold sign on the house.
c.
the owner moves out of the house.
d.
the owner and the purchaser sign a contract that transfers the title of the property to the purchaser.
 

 30. 

Time utility is created when
a.
products and services are available to the consumer when he or she wants to purchase them.
b.
products and services are delivered to the customer.
c.
products and services are sold during a given period of time only.
d.
marketing transactions are handled in a speedy and efficient manner.
 

 31. 

Businesses act in different ways that have been categorized as "product-oriented", "sales-oriented", or "market-oriented."  If a business is "market-oriented", it acts as if organizational success is achieved through
a.
good product design.
b.
intensive sales efforts.
c.
integrated marketing activities.
d.
achieving society's ideals.
 

 32. 

If the Pillsbury Company said, "Our basic function is to mill flour, and, of course, we must hire salespeople to sell it, just as we hire accountants to keep our books," they would be expressing
a.
commitment to the marketing concept.
b.
a product orientation.
c.
a sales orientation.
d.
the kind of orientation one would expect as a result of implementing the societal marketing concept.
 

 33. 

The statement attributed to Ralph Waldo Emerson that "if a man makes a better mousetrap than his neighbour…the world will make a beaten path to his door," reflects the philosophy of which type of business orientation?
a.
a product orientation
b.
a sales orientation
c.
a market orientation/the marketing concept
d.
the societal market concept
 

 34. 

Which of the following is NOT one of the activities that characterizes a market-oriented or "market-driven" company?
a.
generating intelligence regarding customers' current needs, customers' emerging needs, and competitive activity
b.
making this intelligence available throughout the firm
c.
using this intelligence to adjust its products or processes to better meet customer needs
d.
selling its products via an aggressive, high-powered sales organization and advertising program
 

 35. 

Students at XYZ University often complain that various offices on campus are  not very sensitive to their individual needs.  For example, the financial aid office, the university housing office, food services, and the registrar's office received low satisfaction scores on a recent student survey.  Apparently, XYZ University has failed to
a.
define its target market.
b.
adopt the marketing concept.
c.
recognize the scope of its educational activities.
d.
recognize the differences between profit-seeking firms and not-for-profit organizations.
 

 36. 

A company that practices the marketing concept holds basic assumptions in relations to its competitors.  Which of the following is NOT one of those assumptions?
a.
Competitive actions can be monitored but analysis is futile due to the ever-changing nature of the marketplace.
b.
A firm has to be up-to-date on its competitors' actions to ensure that it does not lose its competitive edge.
c.
A firm has to recognize that it has the capacity to compete and is not at the mercy of its competitors.
d.
An organization that views itself as being dominated by others is incapable of taking new initiatives.
 

 37. 

The societal marketing concept is
a.
a broader version of the marketing concept that expands the concept from a focus on individuals to consideration of society as a whole.
b.
a philosophy that maintains that the best route to organizational success is to find an unserved or underserved need in society and meet that need better than anyone else, while meeting long-term organizational objectives and also considering the long-term impact on society.
c.
useful but does not easily solve the moral dilemmas that marketers encounter.
d.
all of the above.
 

 38. 

Ethical considerations are a component of marketing planning because
a.
sometimes the success of the organization and the satisfaction of the organization's customers can be at odds with the interests of society as a whole.
b.
marketers prosecuted by the government for unethical behaviour generally lose customers and go bankrupt.
c.
our society has clear guidelines on what is right and what is wrong.
d.
the actions of some organizations, like the tobacco companies, have made it necessary for all marketers to look like they always try to do what is right.
 

 39. 

Marketing is important to
a.
companies, because it is a revenue-producing function.
b.
people, because it tells potential customers about products that are available.
c.
the economy, because it helps increase a nation's standard of living.
d.
all of the above.
 

 40. 

We need marketing planning because
a.
it maximizes the number of marketing jobs being created.
b.
it  maximizes the number of products available for purchase.
c.
serving customers well is the result of careful thought and consideration.
d.
the increased competition it generates benefits our economy.
 



 
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