Question 1

Which of the following statements about the contribution-margin approach is FALSE?

Accepted Answer

A)  It is concerned with the amount contributed by an item or group of items toward covering fixed costs. 
B)  This approach suggests that it is not necessary to consider all costs in all situations. 
C)  Top management almost always finds this approach more useful than full-cost analysis. 
D)  This approach frequently leads to data which suggest a different decision than might be indicated by the full-cost approach. 
E)  It focuses on controllable costs-rather than on total costs. 
A)  It is concerned with the amount contributed by an item or group of items toward covering fixed costs. 
B)  This approach suggests that it is not necessary to consider all costs in all situations. 
C)  Top management almost always finds this approach more useful than full-cost analysis. 
D)  This approach frequently leads to data which suggest a different decision than might be indicated by the full-cost approach. 
E)  It focuses on controllable costs-rather than on total costs. C

Question 2

Capitol Enterprises uses the cost-sales ratio to measure the performance of its salespeople. If, in the past year, a salesperson made $800,000 in sales, had travel expenses of $23,000, and received a base salary of $40,000 plus $6,000 in commissions, what was this sales rep's cost-sales ratio (to the nearest whole number percent)?

Accepted Answer

A)  3 percent 
B)  6 percent 
C)  9 percent 
D)  12 percent 
E)  15 percent 
A)  3 percent 
B)  6 percent 
C)  9 percent 
D)  12 percent 
E)  15 percent C

Question 3

According to the "80/20 rule," it is common to find that about 80 percent of a firm's business comes from only about 20 percent of its customers.

Accepted Answer

A) True 
 B)False  True

Question 4

Which of the following observations concerning performance analysis is true?

Accepted Answer

A)  It doesn't help identify what data is most relevant. 
B)  It merely lists figures, but doesn't compare them against standards. 
C)  It doesn't look for differences or exceptions. 
D)  It doesn't have to be limited to sales. 
E)  None of these is true. 
A)  It doesn't help identify what data is most relevant. 
B)  It merely lists figures, but doesn't compare them against standards. 
C)  It doesn't look for differences or exceptions. 
D)  It doesn't have to be limited to sales. 
E)  None of these is true.

Question 5

The "iceberg principle" says that looking at detailed breakdowns of data is not very useful, since most relevant information is revealed in good summaries.

Accepted Answer

A) True 
 B)False

Question 6

According to the "80/20 rule":

Accepted Answer

A)  marketing accounts for 80 percent of the consumer's dollar. 
B)  only 20 out of every 100 firms use formal marketing control programs. 
C)  about 20 percent of a typical firm's customers are unprofitable to serve. 
D)  even though a firm might be showing a profit, 80 percent of its business might be coming from only 20 percent of its products or customers. 
E)  None of these is correct. 
A)  marketing accounts for 80 percent of the consumer's dollar. 
B)  only 20 out of every 100 firms use formal marketing control programs. 
C)  about 20 percent of a typical firm's customers are unprofitable to serve. 
D)  even though a firm might be showing a profit, 80 percent of its business might be coming from only 20 percent of its products or customers. 
E)  None of these is correct.

Question 7

Marketing cost analysis shows that one of Buildco, Inc.'s customers is unprofitable, so Buildco should:

Accepted Answer

A)  refuse to sell to that customer. 
B)  try to determine why this customer is unprofitable. 
C)  drop the customer and shift all fixed costs to the other customers. 
D)  assign a new salesperson to that account. 
E)  immediately develop a plan to sell more to that customer. 
A)  refuse to sell to that customer. 
B)  try to determine why this customer is unprofitable. 
C)  drop the customer and shift all fixed costs to the other customers. 
D)  assign a new salesperson to that account. 
E)  immediately develop a plan to sell more to that customer.

Question 8

Performance analysis:

Accepted Answer

A)  is based on qualitative factors, as contrasted with sales and cost analysis which are based on quantitative data. 
B)  is most useful in situations where the iceberg principal is not likely to be a concern. 
C)  indicates why problems have occurred and how to solve them. 
D)  may be based on several different performance indexes. 
E)  All of these are true. 
A)  is based on qualitative factors, as contrasted with sales and cost analysis which are based on quantitative data. 
B)  is most useful in situations where the iceberg principal is not likely to be a concern. 
C)  indicates why problems have occurred and how to solve them. 
D)  may be based on several different performance indexes. 
E)  All of these are true.

Question 9

The ideal of doing things better, faster, and at lower cost is easy to implement once it is accepted.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following statements by a sales manager best reflects an understanding of the iceberg principle?

Accepted Answer

A)  "Detailed cost analysis gets you focused on small parts of the problem, whereas general summaries make it easier to see the really big problems." 
B)  "Most costs that look like they're fixed are actually changing all of the time." 
C)  "Don't tell me that you're certain we're going to increase sales. They were certain that an iceberg couldn't sink the Titanic!" 
D)  "Let's not dwell on sales data summaries-let's get below the surface and study the details." 
E)  "Cost problems always show up first-but controlling expenses doesn't mean that you won't run into revenue problems." 
A)  "Detailed cost analysis gets you focused on small parts of the problem, whereas general summaries make it easier to see the really big problems." 
B)  "Most costs that look like they're fixed are actually changing all of the time." 
C)  "Don't tell me that you're certain we're going to increase sales. They were certain that an iceberg couldn't sink the Titanic!" 
D)  "Let's not dwell on sales data summaries-let's get below the surface and study the details." 
E)  "Cost problems always show up first-but controlling expenses doesn't mean that you won't run into revenue problems."

Question 11

A "marketing audit" should:

Accepted Answer

A)  be done by someone inside the finance department. 
B)  be conducted whenever a crisis arises. 
C)  be conducted by the person most familiar with each of the firm's marketing plans. 
D)  evaluate a company's whole marketing program on a regular basis. 
E)  All of these are true. 
A)  be done by someone inside the finance department. 
B)  be conducted whenever a crisis arises. 
C)  be conducted by the person most familiar with each of the firm's marketing plans. 
D)  evaluate a company's whole marketing program on a regular basis. 
E)  All of these are true.

Question 12

Consider the performance data about the four sales regions shown below. Which of the four regions has the highest performance index?

Accepted Answer

A)  North. 
B)  South. 
C)  East. 
D)  West. 
E)  Cannot be determined from the information given. 
A)  North. 
B)  South. 
C)  East. 
D)  West. 
E)  Cannot be determined from the information given.

Question 13

The most useful breakdown of data in a sales analysis is by:

Accepted Answer

A)  size of order. 
B)  product, package size, grade, or color. 
C)  customer type. 
D)  geographic region. 
E)  any or all of these-depending on the situation. 
A)  size of order. 
B)  product, package size, grade, or color. 
C)  customer type. 
D)  geographic region. 
E)  any or all of these-depending on the situation.

Question 14

Information about five sales reps and their territories is presented below. If the firm has total sales of $1 million, which sales rep has the highest performance index?

Accepted Answer

A)  Aayak 
B)  Bellio 
C)  Cadams 
D)  Dooty 
E)  Eayma 
A)  Aayak 
B)  Bellio 
C)  Cadams 
D)  Dooty 
E)  Eayma

Question 15

When involved in the control process, the marketing manager should view company profit

Accepted Answer

A)  as a gross index of performance that should be further broken down into smaller components. 
B)  as a guide to future operations. 
C)  as the test of whether or not the marketing mix is successful. 
D)  All of these are true. 
A)  as a gross index of performance that should be further broken down into smaller components. 
B)  as a guide to future operations. 
C)  as the test of whether or not the marketing mix is successful. 
D)  All of these are true.

Question 16

A sales manager is trying to determine why the company's sales are down compared to a year ago. He starts with sales data summaries but quickly decides to break down sales further by territory, then salesperson, then store, and finally product. His actions suggest the:

Accepted Answer

A)  Contribution-margin approach. 
B)  Marketing audit. 
C)  Gross profit approach. 
D)  Iceberg principle. 
E)  Full-cost approach. 
A)  Contribution-margin approach. 
B)  Marketing audit. 
C)  Gross profit approach. 
D)  Iceberg principle. 
E)  Full-cost approach.

Question 17

Which of the following statements about a marketing audit is FALSE?

Accepted Answer

A)  A marketing audit takes a detailed looks at the firm's current marketing plans to see if they are still the best plans the firm can offer. 
B)  A marketing audit should be done on a regular basis. 
C)  The marketing strategy planning framework is useful in conducting a marketing audit. 
D)  A good audit is internal and is not concerned with gathering information from outside the firm. 
E)  Ideally, a marketing audit should not be necessary, but it often is. 
A)  A marketing audit takes a detailed looks at the firm's current marketing plans to see if they are still the best plans the firm can offer. 
B)  A marketing audit should be done on a regular basis. 
C)  The marketing strategy planning framework is useful in conducting a marketing audit. 
D)  A good audit is internal and is not concerned with gathering information from outside the firm. 
E)  Ideally, a marketing audit should not be necessary, but it often is.

Question 18

Sam Reuter, marketing manager for Herbal Shampoo Company, has to choose one of three different proposed labels for a new herbal shampoo. How might Sam pretest consumer response to the labels?

Accepted Answer

A)  Put a toll-free telephone number and Web site address on the product label. 
B)  Check the labels of competitors. 
C)  Launch the product with new labels and evaluate the response. 
D)  Prepare sample labels with graphics software and test them on the Internet. 
E)  Set up a televideo conference. 
A)  Put a toll-free telephone number and Web site address on the product label. 
B)  Check the labels of competitors. 
C)  Launch the product with new labels and evaluate the response. 
D)  Prepare sample labels with graphics software and test them on the Internet. 
E)  Set up a televideo conference.

Question 19

Sales analysis:

Accepted Answer

A)  requires more information than is available from traditional accounting reports. 
B)  can be done in different ways-there is no single "best way." 
C)  often studies how sales patterns change over time. 
D)  All of these are true. 
A)  requires more information than is available from traditional accounting reports. 
B)  can be done in different ways-there is no single "best way." 
C)  often studies how sales patterns change over time. 
D)  All of these are true.

Question 20

Marketing managers use performance indexes to compare what did happen with what ought to have happened.

Accepted Answer

A) True 
 B)False

Which of the following statements about the contribution-margin approach is FALSE?

According to the "80/20 rule," it is common to find that about 80 percent of a firm's business comes from only about 20 percent of its customers.

Which of the following observations concerning performance analysis is true?

The "iceberg principle" says that looking at detailed breakdowns of data is not very useful, since most relevant information is revealed in good summaries.

According to the "80/20 rule":

Marketing cost analysis shows that one of Buildco, Inc.'s customers is unprofitable, so Buildco should:

Performance analysis:

The ideal of doing things better, faster, and at lower cost is easy to implement once it is accepted.

Which of the following statements by a sales manager best reflects an understanding of the iceberg principle?

A "marketing audit" should:

Consider the performance data about the four sales regions shown below. Which of the four regions has the highest performance index?

The most useful breakdown of data in a sales analysis is by:

Information about five sales reps and their territories is presented below. If the firm has total sales of $1 million, which sales rep has the highest performance index?

When involved in the control process, the marketing manager should view company profit

A sales manager is trying to determine why the company's sales are down compared to a year ago. He starts with sales data summaries but quickly decides to break down sales further by territory, then salesperson, then store, and finally product. His actions suggest the:

Which of the following statements about a marketing audit is FALSE?

Sam Reuter, marketing manager for Herbal Shampoo Company, has to choose one of three different proposed labels for a new herbal shampoo. How might Sam pretest consumer response to the labels?

Sales analysis:

Marketing managers use performance indexes to compare what did happen with what ought to have happened.

Marketings Value to Consumers, Firms, and Society

Marketing Strategy Planning

Evaluating Opportunities in the Changing Marketing Environment

Focusing Marketing Strategy With Segmentation and Positioning

Final Consumers and Their Buying Behavior

Business and Organizational Customers and Their Buying Behavior

Improving Decisions With Marketing Information

Elements of Product Planning for Goods and Services

Product Management and New-Product Development

Place and Development of Channel Systems

Distribution Customer Service and Logistics

Retailers, Wholesalers, and Their Strategy Planning

Promotionintroduction to Integrated Marketing Communications

Personal Selling and Customer Service

Advertising, Publicity, and Sales Promotion

Pricing Objectives and Policies

Price Setting in the Business World

Managing Marketings Link With Other Functional Areas

Ethical Marketing in a Consumer-Oriented World

Filters

Exam 18: Implementing and Controlling Marketing Plans: Evolution and Revolution

Which of the following statements about the contribution-margin approach is FALSE?

According to the "80/20 rule," it is common to find that about 80 percent of a firm's business comes from only about 20 percent of its customers.

Which of the following observations concerning performance analysis is true?

The "iceberg principle" says that looking at detailed breakdowns of data is not very useful, since most relevant information is revealed in good summaries.

According to the "80/20 rule":

Marketing cost analysis shows that one of Buildco, Inc.'s customers is unprofitable, so Buildco should:

Performance analysis:

The ideal of doing things better, faster, and at lower cost is easy to implement once it is accepted.

Which of the following statements by a sales manager best reflects an understanding of the iceberg principle?

A "marketing audit" should:

Consider the performance data about the four sales regions shown below. Which of the four regions has the highest performance index?

The most useful breakdown of data in a sales analysis is by:

Information about five sales reps and their territories is presented below. If the firm has total sales of $1 million, which sales rep has the highest performance index?

When involved in the control process, the marketing manager should view company profit

A sales manager is trying to determine why the company's sales are down compared to a year ago. He starts with sales data summaries but quickly decides to break down sales further by territory, then salesperson, then store, and finally product. His actions suggest the:

Which of the following statements about a marketing audit is FALSE?

Sam Reuter, marketing manager for Herbal Shampoo Company, has to choose one of three different proposed labels for a new herbal shampoo. How might Sam pretest consumer response to the labels?

Sales analysis:

Marketing managers use performance indexes to compare what did happen with what ought to have happened.

Marketings Value to Consumers, Firms, and Society

Marketing Strategy Planning

Evaluating Opportunities in the Changing Marketing Environment

Focusing Marketing Strategy With Segmentation and Positioning

Final Consumers and Their Buying Behavior

Business and Organizational Customers and Their Buying Behavior

Improving Decisions With Marketing Information

Elements of Product Planning for Goods and Services

Product Management and New-Product Development

Place and Development of Channel Systems

Distribution Customer Service and Logistics

Retailers, Wholesalers, and Their Strategy Planning

Promotionintroduction to Integrated Marketing Communications

Personal Selling and Customer Service

Advertising, Publicity, and Sales Promotion

Pricing Objectives and Policies

Price Setting in the Business World

Managing Marketings Link With Other Functional Areas

Ethical Marketing in a Consumer-Oriented World

Filters