Marketing Management Questions and Answers

Answer: B

It is brand insistence.

Brand familiarity is described in stages: brand recognition (the consumer knows the brand), brand preference (the consumer chooses it over others when it is available but will accept a substitute), and brand insistence (the consumer wants that brand so strongly that he or she will not accept a substitute and will search for it).

Brand loyalty is the general tendency to buy the same brand repeatedly; refusing every substitute is the extreme stage called insistence.

Answer: C

The factor is fragmented markets (printed 'Fragmental markets').

Kotler lists the factors that hinder new product development: a shortage of important new ideas in certain areas, fragmented markets, social and governmental constraints, the cost of development, capital shortages, faster development time and shorter product life cycles.

Only fragmentation matches the stem: when markets split into smaller segments, new products must target smaller groups, which means lower sales and profit per product. The other three options are separate hindrances on the same list.

Answer: B

Sales rise at an increasing rate in the growth stage.

In the product life cycle, sales are slow in the introduction stage while the product becomes known. In the growth stage early adopters buy again, word of mouth spreads and new customers enter, so sales climb rapidly and profits rise.

In maturity, sales growth slows and levels off, and in decline sales fall. Only the growth stage shows sales rising at an increasing rate.

Answer: A

The form is franchising.

Franchising is a special form of licensing in which the franchisor grants an independent franchisee the right to do business in a prescribed manner: under its brand, with its product, systems, standards and support, in return for fees and royalties.

Ordinary licensing grants the right to use a patent, trademark or process without prescribing the whole way of doing business. Contract manufacturing is production for another firm, and a strategic alliance is cooperation between firms that remain independent.

Answer: D

What is needed is customer delight.

Satisfaction means meeting expectations; a merely satisfied customer may still switch to a competitor. Customer delight means exceeding expectations, giving the customer more than was expected, which creates an emotional bond and strong loyalty. Marketing writers argue that this, not satisfaction alone, is what survival in competitive markets requires.

Customer orientation, retention and relationship building are important, but the stem asks for what goes beyond satisfaction, and that is delight.

Answer: D

This is Behavioural segmentation.

Behavioural segmentation groups buyers by their knowledge of, attitude to, use of, or response to a product: usage rate, user status, occasions, benefits sought, loyalty and readiness to buy. The stem is Kotler's definition of it.

Geographic segmentation divides by location, demographic by age, income, gender and so on, and psychographic by lifestyle, personality and values.

Answer: B

This is Conditional value.

In the theory of consumption values of Sheth, Newman and Gross, conditional value is the perceived utility of a product that arises only in a particular situation or occasion, such as greeting cards at festivals or umbrellas in the rainy season.

Novelty (epistemic) value comes from curiosity and newness, emotional value from the feelings a product arouses, and social value from its association with social groups.

Answer: C

This is the Rapid-penetration strategy.

Kotler's four launch strategies combine price (high or low) with promotion (high or low). A low price with heavy promotion is rapid penetration: it aims to win the largest market share fast, and suits large markets of price-sensitive buyers where competition is likely.

Rapid skimming is a high price with heavy promotion, slow skimming a high price with little promotion, and slow penetration a low price with little promotion.

Answer: A

This is Brand equity.

Kevin Lane Keller defines customer-based brand equity as the differential effect that brand knowledge has on consumer response to the marketing of that brand. When people respond more favourably to a product because they know its name, the brand has positive equity.

Brand loyalty, perceived quality and brand associations are components or sources of brand equity in Aaker's model, but none is the overall differential effect itself.

Answer: B

The extra three Ps of services marketing are Process, physical evidence, people.

Booms and Bitner (1981) extended the 4 Ps of product, price, place and promotion to seven for services by adding people (staff and customers involved in delivery), process (how the service is delivered) and physical evidence (the tangible surroundings and cues).

Political power, people opinion and power are not part of the extended marketing mix, and price is one of the original four.