Final exam pool items (Chs. 9, 11, 12, 13, 14, 15 & 17 not 18)



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ANS: B

This is an example of a communications gap.

PTS: 1 REF: 162 OBJ: 11-3 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Customer

38. If a customer expects to wait one week for a pair of shoes to be mended but is told that the shoes are ready to be picked up less than 24 hours after leaving them at the repair shop, the customer's evaluation of service quality will be high. However, a two-week wait would result in a lower evaluation. The two-week gap would illustrate a gap between:



a.

service quality specifications and the service that is actually provided

b.

the service customers receive and the service they want

c.

what the company provides and what the customer is told it provides

d.

what customers want and what management thinks customers want

e.

what management thinks customers want and the quality specifications management develops to provide

ANS: B


When these gaps are large, service quality is perceived as low. As the gaps shrink, perceptions of service quality improve.

PTS: 1 REF: 162 OBJ: 11-3 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Product | TB&E Model Customer

39. If a hospital measured the service quality of its physician care in terms of the total number of people who were attended to--even if patients appeared to want more individualized care--the hospital would be exhibiting a gap between:



a.

what customers want and what management thinks customers want

b.

the service quality specifications and the service that is actually provided

c.

what the company provides and what the customer is told it provides

d.

what management thinks customers want and the quality specifications management develops to provide the service

e.

the service customers receive and the service they want

ANS: E


There is no indication in the question that the hospital is concerned about what customers want. Rather the hospital cares more about its billable hours.

PTS: 1 REF: 162 OBJ: 11-3 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Product | TB&E Model Customer

40. Which of the following statements about developing marketing mixes for services is true?



a.

The variability and perishability of services may require adjustments in marketing mix elements.

b.

Marketing mixes for services are often different than those for products.

c.

Elements of the marketing mix must be adjusted for the unique characteristics of services.

d.

The intangibility and simultaneous production and consumption of services may require adjustments in marketing mix elements.

e.

All of the statements about developing marketing mixes are true.

ANS: E PTS: 1 REF: 162-164 OBJ: 11-4 TYPE: Comp

TOP: AACSB Reflective Thinking | TB&E Model Strategy

41. Which of the following is NOT an example of a type of service processing that can occur?



a.

people processing

b.

product processing

c.

possession processing

d.

information processing

e.

mental stimulus processing

ANS: B PTS: 1 REF: 163 OBJ: 11-4 TYPE: Def

TOP: AACSB Reflective Thinking | TB&E Model Product

42. Budget airlines are a new service in China. Neither their passengers nor the airlines themselves know what to expect from each other. Shanghai-based Spring Airlines is a start-up service with a tight budget. Spring Airlines would engage in _____ processing.



a.

people

b.

mechanical

c.

possession

d.

mental

e.

information

ANS: A


People processing takes place when the service is directed at a customer.

PTS: 1 REF: 162 OBJ: 11-4 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Product | TB&E Model Customer

43. Which of the following services is an example of possession processing?



a.

a theatrical performance

b.

an X-ray of a broken bone

c.

an advertising agency

d.

marriage counseling

e.

heating system repair

ANS: E


Possessions processing occurs when the service is directed to the customers’ physical possessions.

PTS: 1 REF: 163 OBJ: 11-4 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Product

44. TeamBuilds is a service organization that has corporate teams pay $7,500 for an all-day team-building session with a management consultant while they work together on renovating a Habitat for Humanity home. Which category of service processing does TeamBuilds offer?

a.

possession processing

b.

information processing

c.

mental stimulus processing

d.

people processing

e.

homogeneous processing


ANS: C

TeamBuilds is an education program. It is directed at customers.

PTS: 1 REF: 163 OBJ: 11-4 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Strategy

45. Which of the following services is an example of mental stimulus processing?



a.

taxi cab service

b.

insurance

c.

a professional tennis match

d.

veterinarian care

e.

a hair cut

ANS: C PTS: 1 REF: 163 OBJ: 11-4 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Product

46. Which of the following services is an example of information processing?



a.

investment advice

b.

a funeral service

c.

pet neutering

d.

the fitting of orthodontic braces

e.

attendance at a Major League Baseball game

ANS: A


Information processing describes services that use brain power directed at a customer’s assets.

PTS: 1 REF: 163 OBJ: 11-4 TYPE: App



TOP: AACSB Reflective Thinking | TB&E Model Product | TB&E Model Customer

47. An Internet company, icruise.com, sold cruises by offering a "Suntan Guarantee." The guarantee promised a full refund on a Caribbean cruise if more than one-quarter inch of rain fell from 10 a.m. to 4 p.m. for a preset number of days depending on the length of the cruise. The _____ service offered by icruise is travel. The guarantee is a _____ service.

a.

supplementary; core

b.

core; customized

c.

core; supplementary

d.

customized; standardized

e.

complementary; supplementary


ANS: C PTS: 1 REF: 163 OBJ: 11-4 TYPE: App

TOP: AACSB Technology | TB&E Model Product

48. TeamBuilds is a service organization that has corporate teams pay $7,500 for an all-day team-building session with a management consultant while they work together on renovating a Habitat for Humanity home. TeamBuilds' _____ service is improved work team relationships.

a.

primary

b.

core

c.

niche

d.

supplementary

e.

foundation


ANS: B

Core service is the most basic benefit the consumer is buying.

PTS: 1 REF: 163 OBJ: 11-4 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Strategy

49. Western Union is in the business of providing a medium for international money transfers. A Mexican working in the United States can transfer a portion of his or her earnings to family members still living in Mexico. The wire transfer of funds is the _____ service the company provides.

a.

supplementary

b.

benchmarked

c.

core

d.

primary

e.

fundamental


ANS: C

Core service is the most basic benefit the consumer is buying.

PTS: 1 REF: 163 OBJ: 11-4 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Strategy

50. The service offering of G&R Talent Agency is performers suitable for appearances on college campuses. This service is an example of the agency's _____ service.



a.

standardized

b.

customized

c.

supplementary

d.

core

e.

component

ANS: D


The core service is what the consumer is buying.

PTS: 1 REF: 163 OBJ: 11-4 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Product

51. Western Union is in the business of providing a medium for international money transfers. A Mexican working in the United States can transfer a portion of his or her earnings to family members still living in Mexico. It is now planning to move into areas traditionally handled by banks such as offering its customers checking accounts and loans. If it does follow through and provide these additional services, they will exemplify _____ services.

a.

complementary

b.

secondary

c.

peripheral

d.

supplementary

e.

additional


ANS: D

Supplementary services are a group of services that support or enhance the core service.

PTS: 1 REF: 163 OBJ: 11-4 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Strategy

52. _____ is the strategy that uses technology to deliver customized services on a mass basis.



a.

Mass standardization

b.

Aggregated services

c.

Technological processing

d.

Mass customization

e.

Aggregated marketing

ANS: D PTS: 1 REF: 163 OBJ: 11-4 TYPE: Def

TOP: AACSB Reflective Thinking | TB&E Model Strategy

53. The ability of each hotel guest to use his or her room’s television to check out of the hotel room and to confirm additional charges on bills in the hotel's restaurants and gift shops is an example of:



a.

a cooperative service

b.

mass customization

c.

aggregated standardization

d.

a market development strategy

e.

mental stimulus processing

ANS: B PTS: 1 REF: 163 OBJ: 11-4 TYPE: App



TOP: AACSB Reflective Thinking | TB&E Model Product

54. The catalog and online retailer Lands' End offers custom-fit chinos via the Web. For a price of $54, U.S.-based customers can select their style and fit preferences, enter details about their body shape, and receive a pair of custom-made pants in their mailbox two to four weeks later. For Lands' End, this means the company avoids stocking up to 2.8 billion different styles and sizes of garments. Instead, Lands' End orders each unit to be individually fashioned by a contract manufacturer that ships directly to the consumer. Lands’ End is using:

a.

mass customization

b.

supplementary service

c.

component service

d.

customized service

e.

nonprofit marketing


ANS: A

Mass customization uses technology to deliver customized service on a mass basis.

PTS: 1 REF: 163 OBJ: 11-4 TYPE: App

TOP: AACSB Technology | TB&E Model Customer | TB&E Model Online/Computer

55. TheKnot.com is an Internet company that is a one-stop source of all the items needed to have a successful wedding including listings of local caterers and photographers. When someone registers on the site, he or she is sent the "Ultimate Wedding Organizer." It offers advice on what to do about "cold feet" and how to handle in-laws. TheKnot.com recognizes that its _____ represents a portfolio of opportunities, risks, and challenges.

a.

component combination

b.

offering grouping

c.

service mix

d.

SKU offering

e.

assembly process


ANS: C

The service mix refers to the different services offered by the service provider.

PTS: 1 REF: 163-164 OBJ: 11-4 TYPE: App

TOP: AACSB Technology | TB&E Model Customer | TB&E Model Online/Computer

56. Which of the following is NOT a key factor in the distribution strategy for services?



a.

customization

b.

convenience for customers

c.

number of intermediaries and outlets

d.

scheduling of service deliveries

e.

location

ANS: A


Customization is a key factor in the product component of the service marketing mix.

PTS: 1 REF: 163-164 OBJ: 11-4 TYPE: Comp



TOP: AACSB Reflective Thinking | TB&E Model Distribution | TB&E Model Strategy

57. Marriott Hotels, as well as Hyatt Regency and Adam's Mark Inns, have expended many resources in developing Web sites that allow prospective customers to learn all that is necessary before selecting a hotel destination. The sites then allow individuals to make reservations at the hotel that best satisfies their requirements. Which of the following reflects the distribution strategy used by these hotel chains?

a.

considerations of the storage of the service

b.

the development of a long channel of intermediaries

c.

the decision to use direct distribution

d.

intensity of distribution

e.

the physical appearance of your particular outlet


ANS: C

The newest form of direct distribution is the Internet.

PTS: 1 REF: 164 OBJ: 11-4 TYPE: App

TOP: AACSB Technology | TB&E Model Customer | TB&E Model Online/Computer

58. Budget airlines are a new service in China. One of the major problems faced by these airlines is the tight regulatory controls the Chinese government maintains over them. The government determines which airlines get which routes, and the budget airlines do not get the most profitable business routes. The Chinese government has a major voice is setting the _____ strategies for budget airlines in that country.

a.

distribution

b.

promotion

c.

production

d.

product

e.

demand/supply


ANS: A

Distribution is an important part of the service mix.

PTS: 1 REF: 164 OBJ: 11-4 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model International Perspective

59. Promotion strategies for dealing with the unique features of services include all of the following EXCEPT:



a.

using personal sources of information

b.

creating strong organizational images

c.

stressing tangible cues

d.

using postpurchase communication

e.

satisfying patronage-oriented objectives

ANS: E


Patronage-oriented objectives are part of a service pricing strategy.

PTS: 1 REF: 164 OBJ: 11-4 TYPE: Comp

TOP: AACSB Reflective Thinking | TB&E Model Promotion | TB&E Model Strategy

60. A pest control company paints dead roaches on its trucks and uses similar graphics on its letterhead, business cards, and all promotions. The pest control company is using what type of promotion strategy?



a.

stressing tangible cues

b.

stressing homogeneity

c.

using personal information sources

d.

providing packaging cues

e.

communicating service integration signals

ANS: A PTS: 1 REF: 164 OBJ: 11-4 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Promotion | TB&E Model Strategy

61. You have just started a limousine service and strive for an image of quality and luxury. Your limos are always spotlessly clean on the inside, freshly waxed, and stocked with flowers, champagne, free car phones, and televisions. Your drivers are always immaculately dressed and are required to hold the door open for patrons entering and leaving the car. Your promotional strategy is stressing:



a.

patronage-oriented objectives

b.

tangible cues

c.

prestige prompts

d.

intangible motivators

e.

physiological prompts

ANS: B PTS: 1 REF: 164 OBJ: 11-4 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Promotion | TB&E Model Strategy

62. Def Leppard front man Phil Collen has agreed to be the national spokesperson for animal rights group People for the Ethical Treatment of Animals (PETA). He was chosen because of his lifelong commitment to vegetarianism. In terms of promotion strategy, he will be considered a(n) _____ information source.

a.

cue control

b.

nonsource-controlled

c.

impersonal

d.

remote

e.

personal


ANS: E

A celebrity is a person consumers are familiar with, and so can be a personal information source. Collen's association with the service is expected to reduce customers' perceived risk in using the service.

PTS: 1 REF: 164 OBJ: 11-4 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Promotion | TB&E Model Strategy

63. Boutique hotels are the perfect hotels for people who are tired of traditional cookie cutter hotels that all look alike. One boutique hotel chain calls its staff its cast and has them wear fashionable solid black outfits. Its corridors are softly lit, and suite doors are arches lit with recessed blue lighting. Its lobby has a ceiling-to-floor waterwall. The promotional strategy for this boutique hotel is to:



a.

create a strong organizational image

b.

separate the point of production from the point of service consumption

c.

emphasize postpurchase communication

d.

stress intangible cues

e.

use personal information sources

ANS: A


One way to create a strong organizational image is to manage the physical environment of the service facility, the appearance of the service employees, and tangible items associated with the service.

PTS: 1 REF: 164 OBJ: 11-4 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Promotion | TB&E Model Strategy

64. The three categories of pricing objectives for services are:



a.

sales-, quality-, and location-oriented

b.

quality-, value-, and consumer-oriented

c.

revenue-, operations-, and patronage-oriented

d.

turnover-, volume-, and capacity-oriented

e.

equity-, cost-, and revenue-oriented

ANS: C PTS: 1 REF: 165 OBJ: 11-4 TYPE: Def

TOP: AACSB Reflective Thinking | TB&E Model Pricing

65. A focus on maximizing the surplus of income over costs is a(n) _____ pricing objective for service firms.



a.

revenue-oriented

b.

operations-oriented

c.

market-share-oriented

d.

patronage-oriented

e.

service-quality

ANS: A PTS: 1 REF: 165 OBJ: 11-4 TYPE: Def

TOP: AACSB Reflective Thinking | TB&E Model Pricing

66. Determining costs can be extremely difficult for a service provider that has adopted a(n) _____ pricing objective and may limit the usefulness of the objective.



a.

market-share-oriented

b.

operations-oriented

c.

revenue-oriented

d.

patronage-oriented

e.

break-even

ANS: C


Revenue-oriented objectives require calculations of income and costs, which can be difficult for many services.

PTS: 1 REF: 165 OBJ: 11-4 TYPE: Comp



TOP: AACSB Reflective Thinking | TB&E Model Pricing

67. Alabama Adventure, an amusement park with a water slide, charges less for weekday admission than it does for weekend attendance. It also has a lower ticket price for patrons who arrive at 4 p.m. Because it is focusing on coordinating supply and demand by varying prices, it is using a(n) _____ pricing objective for service firms.

a.

revenue-oriented

b.

operations-oriented

c.

image-focused

d.

patronage-oriented

e.

equity-oriented


ANS: B

A focus on matching supply and demand by varying prices to ensure maximum use of productive capacity at any specific point in time is an operations-oriented pricing objective for service firms.

PTS: 1 REF: 165 OBJ: 11-4 TYPE: Def

TOP: AACSB Reflective Thinking | TB&E Model Pricing

68. Budget airlines are a new service in China. Shanghai-based Spring Airlines is a start-up service with three airplanes and a tight budget. Its owner boasts that his ticket prices are 40 percent cheaper than the competition, at times even equivalent to hard-seat train prices. Which method for pricing services is Spring Airlines most likely using?

a.

operations-oriented pricing

b.

revenue-oriented pricing

c.

supply/demand pricing

d.

capacity planning pricing

e.

patronage-oriented pricing


ANS: E

Patronage-oriented pricing tries to maximize the number of customers using the service.

PTS: 1 REF: 165 OBJ: 11-4 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model International Perspective

69. A continuing problem for most Minor League Baseball (MiLB) teams is low attendance. Event and venue sponsors want to see fans in the stadiums, and the players appreciate fan support. Given this information, which pricing strategy would you recommend MiLB teams use?



a.

operations-oriented pricing

b.

peak profitability pricing

c.

patronage-oriented pricing

d.

supply-demand pricing

e.

revenue-oriented pricing

ANS: C


Patronage-oriented pricing tries to maximize the number of customers using the service.

PTS: 1 REF: 165 OBJ: 11-4 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Pricing

70. A focus on maximizing the number of customers using a service is a(n) _____ pricing objective for service firms.



a.

maximization of demand

b.

patronage-oriented

c.

profitability-oriented

d.

operations-oriented

e.

revenue-oriented

ANS: B PTS: 1 REF: 165 OBJ: 11-4 TYPE: Def

TOP: AACSB Reflective Thinking | TB&E Model Pricing

71. The Hermitage, Tennessee home of former U.S. president Andrew Jackson offers discount ticket prices to students and senior citizens. This illustrates the _____ pricing objective.

a.

subsidized

b.

operations-oriented

c.

profitability-oriented

d.

service quality

e.

patronage-oriented


ANS: E

A focus on maximizing the number of customers using a service is a patronage-oriented pricing objective for service firms.

PTS: 1 REF: 165 OBJ: 11-4 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Pricing

72. Because many services involve a process of continuous interaction between the service organization and the customer, _____ marketing is an important strategy.



a.

interactive

b.

relationship

c.

patronage

d.

nonprofit

e.

affiliation

ANS: B PTS: 1 REF: 166 OBJ: 11-5 TYPE: Def

TOP: AACSB Reflective Thinking | TB&E Model Strategy

73. Satisfied customers are likely to engage in positive word-of-mouth communication, thereby helping to bring in new customers. Thus, a method for attracting, developing, and retaining customers is known as _____ marketing.



a.

interactive

b.

affiliation

c.

patronage

d.

ambush

e.

relationship

ANS: E PTS: 1 REF: 166 OBJ: 11-5 TYPE: Def

TOP: AACSB Communication | TB&E Model Strategy

74. Unfortunately, many institutions of higher learning have focused efforts on population segments only when they felt a segment could do something for them. For example, many schools have bombarded pre-college students when they feel they are needed to fill classroom seats. Few have taken the approach of trying to determine what the potential student really wants or needs. Often, once graduated, a former student is only thought of as an alumnus or alumna, not as someone who can again benefit from the services provided by the institution. This description suggests that _____ marketing would be useful.



a.

interactive

b.

relationship

c.

patronage

d.

nonprofit

e.

affiliation

ANS: B


Relationship marketing involves ongoing interaction between the service provider and the customer.

PTS: 1 REF: 166 OBJ: 11-5 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Customer

75. One of the main responsibilities of sport marketers is to keep their loyal customers as heavy users and escalate lower-level users into loyal customers. An effective tool for accomplishing this goal would be _____ marketing.



a.

interactive

b.

relationship

c.

patronage

d.

nonprofit

e.

affiliation

ANS: B


Relationship marketing involves ongoing interaction between the service provider and the customer. It is a means of attracting, developing, and retaining customer loyalty.

PTS: 1 REF: 166 OBJ: 11-5 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Strategy

76. The level of relationship marketing that is least likely to be effective in the long term because its advantage is easily imitated by other firms is based on:



a.

personal communications

b.

social bonds

c.

service delivery heuristics

d.

pricing incentives

e.

structural bonds

ANS: D PTS: 1 REF: 166 OBJ: 11-5 TYPE: Def

TOP: AACSB Reflective Thinking | TB&E Model Pricing

77. Mountain Express is a company that provides grocery delivery service to several small communities in Idaho. The company gives a 2 percent discount on all food orders to customers after they have used the service 10 times. An additional percentage discount is offered for each additional 15 orders up to a maximum of 8 percent. The relationship marketing strategy used by Mountain Express is based on:

a.

following service delivery paradigms

b.

building social bonds

c.

building financial bonds

d.

opening personal communication channels

e.

creating structural bonds


ANS: C

Building financial bonds includes the use of price incentives.

PTS: 1 REF: 166 OBJ: 11-5 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Strategy

78. A management consulting business stays in touch with its business customers with phone calls and greeting cards. It periodically sends out needs-assessment questionnaires and designs new services to meet the needs revealed in these surveys. This is an example of relationship marketing based on:



a.

financial bonds

b.

social bonds

c.

service delivery

d.

patronage bonds

e.

structural bonds

ANS: B


Building social bonds includes staying in touch with customers, learning about their needs, and designing services to meet those needs.

PTS: 1 REF: 166 OBJ: 11-5 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Customer

79. Building value-added services that are not readily available from other firms into the delivery system defines relationship marketing based on the creation of:



a.

financial bonds

b.

social bonds

c.

service delivery paradigms

d.

personal communication channels

e.

structural bonds

ANS: E PTS: 1 REF: 166 OBJ: 11-5 TYPE: Def

TOP: AACSB Reflective Thinking | TB&E Model Strategy

80. Hyatt Regency's Platinum Card Program allows members to bypass any line at the check-in desk and get immediate check-in service. In this example, _____ are developed by offering value-added services that are not readily available from other hotel chains.

a.

price incentives

b.

social bonds

c.

service delivery paradigms

d.

personal communication channels

e.

structural bonds


ANS: E

This example is similar to the Hertz example in the text.

PTS: 1 REF: 166 OBJ: 11-5 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Product

81. Relationship marketing programs that are based on _____ bonds have the strongest potential for sustaining long-term relationships with customers.



a.

financial and individual

b.

social and structural

c.

financial, social, and structural

d.

financial and patronage

e.

financial and structural

ANS: C


Level-three marketing programs with all three components are the strongest relationship marketing programs. See Review Learning Outcome 5.

PTS: 1 REF: 166 OBJ: 11-5 TYPE: Comp

TOP: AACSB Reflective Thinking | TB&E Model Customer

82. Treating employees as customers and developing systems and benefits that satisfy their needs such as training, stressing teamwork, and employee empowerment is known as _____ marketing.



a.

organizational quality

b.

relationship

c.

internal

d.

job-faceted

e.

job-satisfaction

ANS: C PTS: 1 REF: 166 OBJ: 11-6 TYPE: Def

TOP: AACSB Reflective Thinking | TB&E Model Customer

83. The Container Store’s CEO believes the company has a moral obligation to ensure employees are provided with an exciting and secure atmosphere to work in on a daily basis. He is concerned about:

a.

internal marketing

b.

service quality

c.

tangible cueing

d.

relationship marketing

e.

patronage programming


ANS: A

Treating employees as customers and developing systems and benefits that satisfy their needs is known as internal marketing.

PTS: 1 REF: 166 OBJ: 11-6 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Customer

84. Global competition in the services arena is intense. _____ is the world's largest exporter of services.



a.

Germany

b.

Japan

c.

The United States

d.

China

e.

Canada

ANS: C PTS: 1 REF: 166 OBJ: 11-7 TYPE: Def

TOP: AACSB Reflective Thinking | TB&E Model Distribution | TB&E Model International Perspective

85. Many U.S. services industries have the potential for globalization because of their existing competitive advantages. According to the text, which of the following is an example of a service industry that possesses a distinct competitive advantage?



a.

soft-drink bottling

b.

construction and engineering

c.

book publishing

d.

petroleum

e.

sports franchises

ANS: B PTS: 1 REF: 166 OBJ: 11-7 TYPE: Comp

TOP: AACSB Reflective Thinking | TB&E Model Product | TB&E Model International Perspective

86. A _____ seeks to achieve some goal other than the usual business goals of profit, market share, or return on investment.



a.

nonprofit organization

b.

synergistic entity

c.

company with no equity

d.

service provider

e.

patronage-oriented organization

ANS: A PTS: 1 REF: 167 OBJ: 11-8 TYPE: Def

TOP: AACSB Reflective Thinking | TB&E Model Strategy

87. Emmy award-winning actress Kirstie Alley became the spokesperson for Narconon International in 1990. Her concern about the increased drug use by young people prompted her to support this ____ whose goal is to provide treatment and rehabilitation to young people before they become hardened criminals.



a.

nonprofit organization

b.

synergistic entity

c.

company with no equity

d.

service provider

e.

patronage-oriented organization

ANS: A


A nonprofit organization seeks to achieve some goal other than the usual business goals of profit, market share, or return on investment.

PTS: 1 REF: 167 OBJ: 11-8 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Customer

88. The predominant form of nonprofit organization in the United States is:



a.

farms

b.

arts museums and programs

c.

private-sector volunteer organizations

d.

social service firms

e.

government

ANS: E PTS: 1 REF: 167 OBJ: 11-8 TYPE: Def

TOP: AACSB Reflective Thinking | TB&E Model Strategy

89. Which of the following is NOT an example of a nonprofit organization?



a.

State Farm, an insurance company

b.

American Heart Association

c.

American Humane Society

d.

Rotary Club, a service organization

e.

Brotherhood of Electrical Workers, a union

ANS: A


State Farm is a for-profit business.

PTS: 1 REF: 166 OBJ: 11-8 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Strategy

90. _____ includes marketing activities conducted by individuals and organizations to achieve some goal other than normal business goals, such as profit, market share, or return on investment.



a.

Cause-related sponsorship

b.

Nonprofit organization marketing

c.

Marketing autonomy

d.

Service marketing

e.

Social marketing

ANS: B PTS: 1 REF: 167 OBJ: 11-8 TYPE: Def

TOP: AACSB Reflective Thinking | TB&E Model Strategy

91. _____ refers to the efforts of public and private nonprofit firms to bring about mutually satisfying exchanges with their target markets.



a.

Autonomous marketing

b.

Public affairs marketing

c.

Social targeting

d.

Social marketing

e.

Nonprofit organization marketing

ANS: E PTS: 1 REF: 167 OBJ: 11-8 TYPE: Def

TOP: AACSB Reflective Thinking | TB&E Model Strategy

92. Habitat for Humanity, a(n) _____, renovates vacant houses and sells them at no-interest mortgage rates to low-income home buyers. The organization relies on volunteers to provide the labor and funding for its renovations.



a.

image-oriented organization

b.

for-profit organization

c.

nonprofit organization

d.

service branch

e.

source-based organization

ANS: C PTS: 1 REF: 167 OBJ: 11-8 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Strategy

93. Sierra Club and the Girl Scouts of America are nonprofit organizations that want to develop marketing strategies to bring about mutually satisfying exchanges with their target markets as they work to protect our environment. Thus, both Sierra Club and the Girl Scouts of America have:



a.

no need to develop an understanding of pricing

b.

a marketing orientation

c.

the same organizational structure as profit-making firms

d.

no impact on nonbuyers

e.

no need for marketing skills

ANS: B


A nonprofit organization exists to achieve some goals other than profit, but like their corporate counterparts, nonprofit managers develop marketing strategies to bring about mutually satisfying exchanges with target markets.

PTS: 1 REF: 167 OBJ: 11-8 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Strategy

94. Which of the following statements about the marketing activities of a nonprofit organization is true?



a.

Nonprofit organizations use the same terminology as for-profit companies when talking about their customers.

b.

Nonprofit organizations do not charge a price.

c.

Nonprofit organizations express their objectives in terms of profit.

d.

Nonprofit organizations often use undifferentiated segmentation strategies.

e.

All of these statements about the marketing activities of nonprofit organizations are true.

ANS: D


Nonprofit organizations often refer to their target markets as clients, patients, or members. Nonprofit organizations charge fees, donations, tuition, etc.—all examples of prices. The major difference between nonprofits and for-profits is the lack of a profit objective.

PTS: 1 REF: 167 OBJ: 11-8 TYPE: Comp

TOP: AACSB Reflective Thinking | TB&E Model Strategy

95. As with for-profit organizations, the first step in developing a marketing program for a nonprofit organization is to:



a.

determine the marketing mix

b.

define organizational objectives

c.

establish the financial needs of the organization

d.

create a promotion to attract donors

e.

select a direct distribution outlet

ANS: B


Defining organizational objectives will lead to selection of target markets and then to the marketing mix.

PTS: 1 REF: 167 OBJ: 11-8 TYPE: Def

TOP: AACSB Reflective Thinking | TB&E Model Strategy

96. An acceptable goal of the Hype and Humble, a Los Angeles nonprofit organization dedicated to empowering women and children in crisis, for its “Day of Pampering” program would be to:



a.

set participation goals to provide a 12 percent return on investment

b.

increase expenses to fit budgetary allowances

c.

avoid corporation pitfalls

d.

increase awareness in its target market to 75 percent

e.

gain a larger market share than other nonprofits that are administering to the same group

ANS: D


The only appropriate goal for a nonprofit firm would be a service goal such as awareness, not a financial or market share goal.

PTS: 1 REF: 167-168 OBJ: 11-8 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Strategy

97. What is one of the consequences of the American Red Cross's nonprofit orientation?



a.

The success of the Red Cross cannot be measured in financial terms.

b.

The Red Cross will not make as much money as a profit-oriented firm.

c.

The Red Cross does not have to worry about revenues and costs.

d.

The Red Cross is not expected to be as efficient as a for-profit firm.

e.

The Red Cross's success is based on how much money is donated to it.

ANS: A


Success in a nonprofit organization is measured by how well service goals are met and how well it serves the community.

PTS: 1 REF: 167 OBJ: 11-8 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Pricing

98. Save-the-Redwoods League is a nonprofit group committed to preserving ancient forests in the United States. Its _____ is environmentalists, loggers, hunters, national park visitors, and lumber-producing companies.



a.

target market

b.

market objective

c.

service providers

d.

market segment

e.

niche

ANS: A


The goal of the organization is to convince those groups and others of the importance of their work.

PTS: 1 REF: 167-168 OBJ: 11-8 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Strategy

99. The International Society of Hospitality Purchasers raised $62,000 in donated goods for Gifts in Kind International, a nonprofit group that gathers and distributes new and used merchandise to charities nationwide. Contributors donated about $37,500 in goods in conjunction with recent trade shows, and $24,500 in fabric and furniture was donated by other vendors. The society and its members as well as the charities who are beneficiaries of the merchandise compose the organization's:



a.

target markets

b.

market objectives

c.

service providers

d.

market segment

e.

niche

ANS: A


The goal of the organization is to convince those groups and others of the importance of their work.

PTS: 1 REF: 167-168 OBJ: 11-8 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Customer

100. The major difference between the marketing orientation of FedEx and of the U.S. Marine Corps’ annual Toys for Tots program is that:



a.

Toys for Tots does not have to be concerned with advertising or promotion

b.

FedEx has a target market

c.

quantitative methods of market research can be used at FedEx

d.

only FedEx has a product that can be marketed

e.

the rewards of the Toys for Tots program are long-term social benefits

ANS: E


Both FedEx and the Toys for Tots program have target markets, products, advertising considerations, and the ability to do quantitative market research. But the Toys for Tots program is concerned with long-term social benefits to the public, and FedEx is primarily concerned with profit-oriented goals.

PTS: 1 REF: 167 OBJ: 11-8 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Strategy

101. A target market for a nonprofit organization:



a.

needs to be defined in terms of competing private-sector organizations

b.

needs to be defined as the "community" in general in order to reach all potential targets

c.

may include many apathetic or strongly opposed targets

d.

is best defined geographically, to include the area served

e.

is best defined as the potential donors because their funds will ensure the survival of the organization

ANS: C


The target markets must include both the service users and the potential donors, which may be apathetic or strongly opposed groups.

PTS: 1 REF: 167 OBJ: 11-8 TYPE: Comp

TOP: AACSB Reflective Thinking | TB&E Model Strategy

102. Nonprofit organizations face a unique challenge because the target market of the nonprofit organization is often:



a.

the community where it is located

b.

the people who provide the funding

c.

a paid administrator

d.

the apathetic or strongly opposed individuals

e.

the government

ANS: D


The target market for many nonprofit services is often apathetic, disinterested, or opposed individuals who nonetheless may need the service. Alternatives a, b, and c are as likely to be targeted by for-profits as nonprofits.

PTS: 1 REF: 167 OBJ: 11-8 TYPE: Comp

TOP: AACSB Reflective Thinking | TB&E Model Strategy

103. The Bridgespan Group is a not-for-profit strategic consulting firm dedicated to providing guidance for nonprofits. Which of the following would NOT be one of its target markets?

a.

its own administrative board

b.

a group devoted to helping homeless people find jobs

c.

state government agencies

d.

adults interested in improving educational opportunities for children

e.

community members who are interested in starting a museum


ANS: A

Except for the administrative board, all are potential users, donors, or volunteers who will need to be convinced to participate. Members of the board will need no convincing.

PTS: 1 REF: 167-168 OBJ: 11-8 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Strategy

104. Which of the following statements describes how a nonprofit organization should design its product offering?



a.

The organization should try to create products it can inventory.

b.

The organization should remember the product offering is not as crucial to organizational success as the other elements of the service mix.

c.

The product offering should be kept as simple as possible.

d.

The organization will need to satisfy the needs of the target market or it will fail.

e.

The product offering will have to be tangible.

ANS: D


As with any type of product, to be successful the product must meet the needs of the target market.

PTS: 1 REF: 168 OBJ: 11-8 TYPE: Comp

TOP: AACSB Reflective Thinking | TB&E Model Product

105. A local church formed a special committee to provide aid to the homeless in its county. The church applied to the city and county governments for funding but was denied when it could not adequately state what services it would offer. In this case, the special committee failed because it had not defined its:



a.

user market

b.

target market

c.

sponsoring organizations

d.

donor market

e.

product offering

ANS: E PTS: 1 REF: 168 OBJ: 11-8 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Product

106. Save-the-Redwoods League is a nonprofit group committed to preserving ancient forests in the United State. The organization has relatively weak _____ because most people are not directly affected by what the organization does.



a.

differential advantage

b.

benefit strength

c.

advantage complexity

d.

donor commitment

e.

empathy

ANS: B


Benefit strength refers to the fact that this nonprofit cannot offer customers direct, personal benefits in an exchange relationship.

PTS: 1 REF: 168 OBJ: 11-8 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Customer

107. If a benefit is indirect to the customer, the marketer may find a challenge in promoting a product with little:



a.

benefit complexity

b.

feature charisma

c.

benefit strength

d.

personalization

e.

benefit exchange

ANS: C PTS: 1 REF: 168 OBJ: 11-8 TYPE: Def

TOP: AACSB Reflective Thinking | TB&E Model Product | TB&E Model Promotion

108. Gifts in Kind International is a nonprofit organization that gathers new and used merchandise and distributes it to charities nationwide. Traditional promotional tools may be inadequate to motivate its target markets because of:



a.

nonprofit product volunteer policies

b.

the absence of consumer involvement

c.

lack of prices for the products

d.

direct distribution

e.

infrequent use of target markets

ANS: B


Involvement may range from extremely high (join the military, stop smoking) to low (prevent forest fires, don't litter), which is a much wider range than consumer products usually experience.

PTS: 1 REF: 168 OBJ: 11-8 TYPE: Comp

TOP: AACSB Reflective Thinking | TB&E Model Promotion | TB&E Model Strategy

109. Throughout the United States, dancers are joining hands, arms, and legs to present a Virtual Kickline Performance as a sign of their unified support for National Dance Week (NDW) and its mission statement. The purpose of NDW is to educate the American public on the cultural contributions of dance to our society and raise public awareness to the benefits of dance in our culture. This Virtual Kickline Performance is an example of a _____ strategy.



a.

target market

b.

distribution

c.

product

d.

promotion

e.

direct marketing


ANS: D

It is using volunteers to promote its message.

PTS: 1 REF: 168-169 OBJ: 11-8 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Promotion | TB&E Model Strategy

110. Most governmental organizations are prohibited from:



a.

using publicity in any form

b.

engaging in personal selling

c.

using public service announcements

d.

advertising

e.

direct marketing

ANS: D PTS: 1 REF: 168-169 OBJ: 11-8 TYPE: Comp

TOP: AACSB Reflective Thinking | TB&E Model Strategy

111. A business professional from The Center for Retailing at Morehead University has been donating several hours of consulting time to local nonprofit organizations each month. This could be expected to provide the center with all of the following benefits EXCEPT:



a.

community approval

b.

goodwill

c.

immediate financial gain

d.

personal contacts

e.

personal satisfaction

ANS: C


Donating time to a nonprofit firm will result in intangible and long-term benefits, but not immediate financial gain.

PTS: 1 REF: 169 OBJ: 11-8 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Promotion

112. _____ is an announcement in mass media for which no charge is made and which promotes programs, activities, or services of federal, state, or local governments or the programs, activities, or services of nonprofit organizations.



a.

Nonsponsored advertising

b.

Public service advertising

c.

Societal marketing

d.

Cause-related marketing

e.

Social advertising

ANS: B PTS: 1 REF: 169 OBJ: 11-8 TYPE: Def

TOP: AACSB Reflective Thinking | TB&E Model Promotion

113. The Chrysalis Job Training for the Disabled program wants to notify the community about its upcoming rummage sale. As an experienced marketer and director of the program, you plan to visit several local radio and televisions stations to request:



a.

freestanding inserts

b.

nonsponsored advertising

c.

advocacy marketing

d.

public service advertising

e.

societal marketing

ANS: D


An announcement in mass media for which no charge is made and which promotes programs, activities, or services of nonprofit organizations is called public service advertising.

PTS: 1 REF: 169 OBJ: 11-8 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Promotion

114. In a nonprofit organization, _____ are often concerned with partially or fully defraying costs rather than achieving a profit.



a.

nonfiscal costs

b.

pricing objectives

c.

cause-related goals

d.

equity earnings

e.

liquidity fees

ANS: B PTS: 1 REF: 169 OBJ: 11-8 TYPE: Def

TOP: AACSB Reflective Thinking | TB&E Model Pricing

115. In many nonprofit situations the consumer is not charged a tangible price yet must absorb time costs, embarrassment costs, or effort costs. These costs are called the organization's:



a.

liquidity fees

b.

financial costs

c.

fiscal prices

d.

nonfinancial prices

e.

retained earnings

ANS: D PTS: 1 REF: 169 OBJ: 11-8 TYPE: Def

TOP: AACSB Reflective Thinking | TB&E Model Pricing

116. When services for those in relatively poor economic situations are largely paid for by those who are in better financial situations, it is known as:



a.

nonfinancial pricing

b.

the Robin Hood principle

c.

indirect payment

d.

separation between payers and users

e.

indirect distribution

ANS: D PTS: 1 REF: 169 OBJ: 11-8 TYPE: Def

TOP: AACSB Reflective Thinking | TB&E Model Pricing

117. One feature that distinguishes nonprofit organization pricing decisions from profit-sector pricing decisions is _____, an example of which is university tuition. This practice also exists in the profit sector, but there it is considered to be an undesirable, temporary situation.



a.

below-cost pricing

b.

indirect payment

c.

nonfinancial prices

d.

separation between payers and users

e.

the lost pricing objective

ANS: A PTS: 1 REF: 169 OBJ: 11-8 TYPE: Def

TOP: AACSB Reflective Thinking | TB&E Model Pricing



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