“Industrial marketing review”

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Chapter (9)
Multiple Choice

A demand curve which drops in stages is called:

1.
a. A normal curve. c. A stepped demand curve.
b. A price demand curve.

C
ANSWER:

What is value in use?

2.
a. The cost savings made by the customer by c. The cost of the product spread over the
buying a specific product. period in which the product will be used.
b. The cost of the product to the customer.

A
ANSWER:

The costs associated with changing from one product to another are called:
3.
a. Changeover costs. c. Overhead costs.
b. Switching costs.

B
ANSWER:

Which of the following is NOT a source of experience curve effects?

4.
a. Technological improvements. c. Education.
b. Learning.

C
ANSWER:

Setting prices by calculating all the costs then adding on the profit margin is called
5.
a. Cost-plus pricing. c. Calculation pricing.
b. Profit-based pricing.

A
ANSWER:

What is polycentric pricing?

6.
a. Setting prices at different rates according c. Pricing against many cost centres.
to negotiation centres.
Essay on CH 9

1 Describe the “magic of price” as it is explained in the text?

The magic of price is that a small increase in price creates a large increase in profits,
because the costs of production and the overheads remain the same.

2 List the factors in the pricing process?

The factors in the pricing process are

 Setting objectives,
 Developing a pricing strategy,
 Determining demand,
 Estimating costs,
 Reviewing the competitive offerings,
 Selecting the pricing method,
 Establishing the pricing policy and determining the prices.

3 What are the three major types of pricing objectives firms may use?

The three types are profit-oriented, sales-oriented and status quo oriented.

4- In developing a pricing strategy, what factors should a manager consider?

The manager must consider the following

 the firm (corporate objectives, costs,),

 The customers (value in use,)
 The competitors (offerings, prices and costs),
 The distributors (costs, capabilities and grey market)
 The environment (Government regulations, inflation,).

5- How does the customer perceive costs and benefits in weighing whether a
price seems fair?
 Customer benefits fall into the categories of function, operation, finance and
personal. Costs are categorized as acquisition, internal and potential risk
costs

6- How can a firm use value-in-use and solutions marketing in developing

pricing?

Price sensitivity is affected by economics, buy search and usage, and by

perceptions of competitive offerings.

7- What affects a customer’s price sensitivity?

Switching cost is the outgoings associated with changing from one product or
supplier to another. Switching cost can be monetary, or it could be measured in
time, risk and inconvenience – training new staff, assessing the new product and
so forth.

8 Explain the concept of switching cost?

Developing accurate costs is difficult, but the ABC approach, which involves
managers in keeping detailed accounts of all the costs associated with
producing individual units and batches of different products.

9- When should the experience curve be used as a basis for pricing and when
not?

Experience curve theory says that costs decline rapidly with each doubling of
output of a given product. It can be used as a basis for pricing when
learning, technological improvements and economies of scale are
important in the firm’s strategy.

10- What are the most common pricing methods used by international
exporters? What are? The benefits and drawbacks to these methods?

Penetration pricing is commonly used by exporters in order to gain rapid

market share. Where customers are price-sensitive, where extra volume
 brings economies of scale, and where competitors are weak penetration
prices work well.

11- In developing pricing policies, what should an international firm consider?

There are three global pricing policy alternatives:

 Ethnocentric pricing,
 Polycentric pricing
 Geocentric pricing

12- How can transfer pricing affect the results realized by local partners?

Transfer pricing is essentially intended as a tax-avoidance strategy.

Setting the price artificially high for goods transferred from one part of the
company to another depresses the profits of the recipient of the goods and
increases the profits for the sender

Chapter (8)
Multiple Choice
.

What does GATS stand for?

1.
a. General Agreement on Trade in Services. c. Green Approaches in Taking Services.

b. Growth Assessment of Trade Services.

A
ANSWER:

Which of the following is NOT a feature of a service?

2.
a. Intangibility. c. Cost effectiveness.

b. Perishability.

C
ANSWER:

What is a pure service?

3.
a. One which has a single feature. c. One which contains virtually no tangible
content.
b. One which has a single benefit.

C
ANSWER:

Which of the following is NOT one of Lovelock’s service management trinity?

4.
a. Marketing. c. Human resources.
b. Finance.

B
ANSWER:

Which of the following is the most important dimension of service quality?

5.
a. Tangibles. c. Responsiveness.
b. Reliability.

B
ANSWER:

What is a blueprint?
Essay on CH8

(1)-What are the unique aspects of services and how does this affect the
management and Marketing of these services?

Services are intangible, perishable, consumed and produced at the same time,
variable, and involve the participation of the user. From a marketing viewpoint,
this means that services involve a closer relationship between buyer and seller
than do physical goods, and also there is a greater risk on both sides.

2 List the various combinations of services and goods which may be offered by
a firm?

Goods might be pure tangible goods, tangible goods with accompanying

services, hybrids of goods and services, major service with accompanying
tangibles, or pure service products.

3 How do marketing, operations, and human resources work together in a

services business?

Human resources and operations are very closely related in the services
context because services are delivered by people. The front-line staff are
in fact part-time marketers, and have the responsibility of ensuring that
the service is delivered effectively: these staff should be empowered by
marketing.

4 What is the role of corporate culture in services marketing?

A corporate culture that enhances an appreciation for good service provision,

and which develops a customer orientation, is critical. Service-orientated
culture empowers employees.
5 Name the five key dimensions used to measure service quality and describe
each?

The five key dimensions of service quality

1. Tangibles (physical facilities equipment, materials).

2. Reliability (dependability),
3. Responsiveness (willingness to help customers),
4. Assurance (knowledge and courtesy of Employees),
5. Empathy (individualized attention).

6 Describe blueprinting. Develop a blueprint for a local service business.

A blueprint is the outline of all the steps required to make a service

successful. It allows firms to decide who is (or should be) involved in both
backstage and front stage.

7 Name the major differences in marketing services versus products?

 Marketing services tends to involve narrower segments than products.

 Distribution of services is often impossible.
 Promotion of services works much more on word of mouth.

8 What are the key problems in moving from a product-centric to a service-

oriented business and how would you overcome them?

 The key problems in moving from product to services

orientation are:

1. Operational inefficiencies.
2. Channel conflict.
3. Sales redesign.
4. Inability to offer development problems and pull-through problems.
9 What are the critical problems in marketing services internationally and how
would you deal with them?

Three major problems are:

1. Services cannot be protected through patents and are often met with
hostility by host governments.

2. Non-tariff barriers against services have increased in recent years.

3. Services are perishable, companies also need to keep the

communications links short, which is difficult in the global arena

Chapter (7)
Multiple Choice
What is a product?
1.
a. An offering of the firm that satisfies the c. A set of needs that have been met by a
needs of customers. set of benefits.
b. A tangible item that a manufacturer has
produced.

A
ANSWER:

Delivery, installation, warranty and after-sales service are all:

2.
a. Product attributes. c. Support services.
b. Core product benefits.

C
ANSWER:

What is the final stage of the product lifecycle called?

3.
a. Maturity. c. Demise.
b. Decline.

B
ANSWER:

Companies which aim to be the first to use new technology are called:
4.
a. Early adopters. c. Early majority.
b. Innovators.

B
ANSWER:

Which of the following is NOT one of the attributes of a rapidly-adopted innovation?

5.
a. Relative advantage. c. Usability.
b. Compatibility.

C
ANSWER:

A product which has been introduced by a firm into a market in which the firm has never done
6. business before is called:

a. A new-to-the-world product. c. An addition to the product line.

b. A new category entry.

B
Essay on CH7

1 Describe the total product including support services, product attributes,

and core product benefits?

 The total product includes support services (delivery, installation,

warranty and after-sales service),

 The product attributes (brand, design, country of origin, price, and

packaging).

 The core product benefits (features, functions, benefits and value to

the customer).

2 Describe the differences between consumer product strategy and business to

business product strategy?

Three differences are:

 Consumer products focus more on brand identity and product

appearance.

 Most business products are sold with related services such as

installation, training, after-sales service and maintenance.

 Business products are usually sold on their value-adding benefits

3 How does diffusion of innovation relate to the product lifecycle?

 Diffusion of innovation relates closely to product lifecycle. In the growth
stages, the product is being snapped up by early adopters: once the
product is only being bought by laggards, sales will drop dramatically.

4- What are the main factors which affect the speed of acceptance of an
innovation?

The main factors that affect adoption of an innovation are

 Relative advantage,
 Compatibility,
 Complexity,
 Trial ability
 Observability.

5- Name the five phases in the new product process and describe each?

The five phases are:

1. Opportunity identification & Selection
2. Concept generation (ideas are formulated),
3. Concept evaluation (ideas are considered and accepted or
rejected),
4. Development (the products are designed)
5. Launch (the product goes into production and is marketed).

6- What is a determinant attribute and why is it important to a firm in the new

product development process?

A determinant attribute is one on which customers make choices about which

products or services to purchase. Knowing these attributes allows the product
developers to ensure their inclusion.

7- Describe a scoring model. What role does it play in the new product
development process?
A scoring model is a system for assessing new products against a series of criteria.
It is used to decide which products should go into production and which should
not.

8- What is meant by AB and BA decisions? How can you tell if a new product
development process is working correctly through this approach?

An AB decision is the decision to stop a product’s development when it might

succeed: allowing a failing product to continue is a BA decision

9- How do product evolution and marketing plan evolution relate to one

another?

The evolution of a product and the evolution of its marketing plan should continue
side-by-side. As product features and benefits develop, so should the marketing
plan reflect these

10- What is a global product and what kinds of strategies may be employed for
global product development?

A global product is one which remains essentially unchanged in all the markets it
serves worldwide. It is also usually aimed at a global segment

11- List the most important branding decisions. Should a firm always have a
global brand?

The most important branding decisions are:

 The brand sponsor decision,
 The brand name decision,
 The brand strategy decision
 The brand repositioning decision.
 Firms should not necessarily always have a global brand
12- Draw a country market portfolio for any products and countries you may
choose?

Packaging serves three functions: protection, promotion and convenience for

the user. The most important of these is protection in global markets because
the Labeling is important because managers need to consider both language and
literacy issues in foreign markets.

13- Relate core competencies to global sourcing. What costs must be included
in this decision? And what major problems would a firm possibly encounter in
outsourcing?

Producers need to consider their core competences when deciding

whether to make or buy. If the necessary input is outside the firm’s core
competences, it should be bought in.

Chapter 5
Multiple Choice

What is segmentation?
1.
a. The process of choosing which products c. The process of avoiding competitors.
to make.

b. The process of dividing customers into

groups with similar needs.

B
ANSWER:

Which of the following is NOT one of the tests of a good segment?

2.
a. Measurability. c. Profitability.
b. Accessibility.

C
ANSWER:

What is an identifier segmentation variable?

3.
a. One which identifies which customers c. One which helps categorize customers
belong in the segment. after we have started doing business with
them.
b. One which helps categorize customers
before any business has been done with
them.

B
ANSWER:

What is a response profile?

4.
a. A method of identifying which customers c. A method of categorizing customers after
belong in the segment. we have started doing business with
them.
b. A method of categorizing customers
before any business is done.

C
ANSWER:

What is NAICS?
5.
a. The North American Industrial c. The New American Intelligent Coding
Classification System. System.

b. The North Atlantic Industry Coding

Society.
1 What are the major differences between consumer and business to business
segmentation Techniques?

B2B segmentation has much in common with B2C segmentation, but

variables such as race, religion, ethnicity and personality characteristics
are much less important in B2B markets.
B2B markets can be segmented a priori by demographics, operations,
product required and purchasing situation, or a posteriori by vendor
product attributes, customer variables, and application and DMU/buyer
characteristics.

2 Describe how segmentation, targeting and positioning are related to one

another?

Segmentation breaks the market down into groups with similar needs:
 Targeting is the process of deciding which of these groups’ best fits the
corporate strategy,

 Positioning is the process of fitting the product into the right place in
the consciousness of the targeted groups

3-List identifier segmentation variables and response profile segmentation

variables?

Identifier variables are

1. demography,
2. Operations,
3. Product required
4. Purchasing situation.
Response variables are
1. Vendor product attributes,
2. Customer variables,
 3. Application
4. DMU/buyer characteristics

5 What might be the problem of applying segmentation across different

cultures and Countries?

Even in business markets, culture affects response variables. Identifier

variables are likely to vary between countries– for example, standard
industry classifications are not widely used outside the United States

6 In selecting a market segment, what are the three major criteria?

The three major criteria

1. future attractiveness,
2. resource demands
3. firm strategy

7 How do the settings on the “marketing machine” and the identification of

market segments?

1-Companies using an undifferentiated approach have

 Higher commitment to promotion,
 A low commitment to product development
 High commitment to distribution.
2-Companies using a concentrated approach have
 High commitment to product development,
 Low commitment to distribution
 high commitment to promotion

8 How do perceptual maps help in positioning?

Perceptual mapping enables us to see how our competitors are perceived by

the customers, and where there might be gaps, which we could fill.
9- What obstacles might a firm expect in implementing its segmentation,
targeting, and Positioning procedures?

This is particularly true in international markets. Obstacles to targeting

include an inability to be sure which segments might remain attractive in
future, what resources might be needed to service the segment, and being
sure that the selected target does actually meet the firm’s strategic needs.
The main obstacle to positioning in developing perceptual maps.

10- Assume you are the marketing vice president for a firm selling interior
lighting equipment. How might you go about segmenting your markets on a
worldwide basis?

It is likely that there will be broad global segments in the lighting

business the segments will be as follow:

 The type of electrical connection,

 The voltage requirements and the power rating of equipment varies

across countries but countries can be grouped according to whether
they use bayonet or screw fittings, 110v or 240v and so forth.

 The product usage: are these fittings to be used in offices, factories,

warehouses, hotels, or nightclubs?

 Size of customer would be a factor to look at in some countries

Chapter 3
Multiple Choice
.

Which of the following is NOT one of Drucker’s three basic questions?

1.
a. What is our business? c. What will our business be?
b. What should our strategy be?

B
ANSWER:

What is meant by corporate mission?

2.
a. The over-riding reason for the c. The view of the founder as to what kind
corporation’s existence. of company this should be.
b. The strategies the corporation intends to
take.

A
ANSWER:

What is meant by corporate vision?

3.
a. The over-riding reason for the c. The view of the founder as to what kind
corporation’s existence. of company this should be.
b. The strategies the corporation intends to
take.

C
ANSWER:

Which of the following is NOT a type of planning system?

4.
a. Formal planning system. c. Formal integration.
b. Logical incrementalism.

C
ANSWER:

What is value chain analysis?

5.
a. A system of valuing the firm’s assets. c. An analysis of the inputs each firm puts
into the product before it reaches the final
consumer.
b. A system of valuing the chain of
command.

C
ANSWER:

Which of the following is NOT one of the elements that supports the value chain?
 Essay on Ch3

1 Why should firms consider industry, resource, and institutional factors in

developing strategy?

 Firms should not try to mix Porter’s strategic positions because they are
mutually exclusive. Attempts to mix the strategies will lead to lost
profits.

 For example, trying to be a cost leader as well as a differentiator will

lead to low prices and high costs, which is clearly not sustainable.
Equally, it is impossible to be a cost leader and a focus marketer.

2 How might a firm apply basic defense strategies in a hypercompetitive

environment?

Hyper competition is characterized by a chaotic approach in which

competitors continually seek to disrupt the market and throw each other
off-balance.
In this case traditional defense tactics are of little use, but a company that is
effective as a strategic soothsayer should be able to develop counter-
thrusts.

3 What is the difference between vision and mission?

 A vision gives an overall view of what type of company the founders

think the firm should be. Vision can continue throughout the life of the
firm.
 A mission, on the other hand, is a blueprint for action. Mission probably
needs to be revised periodically.

4 How might a firm plan for entering a former communist country such as
China?
 Entering former Communist countries may require special strategies.
Competition may be less of an issue than it is elsewhere, because there
will be relatively fewer local competitors (although there are likely to be
many foreign ones).

5 What would be the most appropriate competitive strategy for a small firm
wishing to enter a well-established national market?

Small firms entering well-established national markets would be well advised

to adopt a focus strategy, concentrating on a niche, which is non-
threatening to the existing players. Small firms do not have the resources
to be market challengers.

Chapter 2
Multiple Choice

What is an initiator?
1.
a. A type of salesman who initiates first c. The person in the firm who controls the
contact with a buyer. flow of information.

b. The person in the buying firm who first

recognizes a problem.

B
ANSWER:

Which of these is NOT a member of the DMU?

2.
a. Gatekeeper. c. Salesperson.
b. User.

C
ANSWER:

Which of the following is NOT a risk avoidance tactic used by buyers?

3.
a. Multisource the order. c. Visit the vendor’s operations.
b. Use an agent.

B
ANSWER:

Which of the following is NOT an organizational influence on buyers?

4.
a. Structures. c. Technology.
b. Economy.

B
ANSWER:

What does OEM stand for?

5.
a. Original equipment manufacturer. c. Open-ended marketing.
b. Original energy marketer.

A
ANSWER:

What is a reseller organization?

6.
a. An organization which sells again to the c. An organization which resells goods that
same company. have been returned as faulty.
b. An organization which buys goods in
 Essay on CH 2
1 How would you expect a government department to go about buying a new
computer system?

Government departments put contracts out to tender. The buyer would

begin by researching some companies to determine their capability, then
would invite them to tender. It is likely that the tender would also be
advertised in the industry journals.

2 How might internal politics affect a buyer’s behavior?

Buyers can be affected in many ways by the internal politics of their

organizations:
1. Rivalries with other buyers
2. Desire to please the boss
3. Desire for promotion (or for an easy life)
4. Knowledge of which behaviors are acceptable
Which are not will all influence the buyer. None of these are directly related to the
qualities of the products being bought.

3 What factors might be prominent in the buying decision for cleaning

materials?

 Cleaning materials need to be effective at cleaning and environmentally

friendly, of course, but for an organization there are extra considerations.
The materials must also be easy and quick to use,cash cost of the
materials is a factor, but is less important than the other two factors .
4 What factors might a supplier take into account when evaluating a
purchasing company?

A supplier is likely to consider the following factors about a purchaser:

1. The creditworthiness of the purchaser.
2. The level of purchases (level of need) likely to flow from the deal.
3. The ease of entry, whether a competitor is already supplying the
purchaser, whether the supplier is already supplying some other
products,
4. Reputation of the buyers.
5. Ability to use the firm as a reference to sell to other firms.

5 How might the directors of a company go about setting standards for

evaluating suppliers? What objective criteria are available?

 Relatively few objective criteria are available for evaluating suppliers, but
certainly financial solvency is one that can be checked.
 Purchasers would want to assess
 the capability of the company,
 Delivery reliability could be assessed if the figures are available.
 After-sales service quality might be assessed in terms of speed of response
Chapter 1
Multiple Choice

Which of the following statements is not true?

1.
a. Business buyers look for products that c. Business buyers look for products that
will increase sales. will translate to foreign markets
b. Business buyers look for products that
will reduce costs

C
ANSWER:

Which of the following is NOT one of the trappings of marketing?

2.
a. Customer centrality c. Complete marketing information
systems
b. Declarations of support from top
management

A
ANSWER:

Which of the following is a major difference between consumer marketing and business-to-business
3. marketing?

a. More rational decision-making. External

c. environment.

b. The customer is at the centre of the firm’s

thinking

A
ANSWER:

What is meant by, entering goods and services?

4.
a. Goods and services that are new to the c. Goods and services that become part of
market. other products.

b. Goods and services that are new to the

customer

C
ANSWER:

What is meant by, foundation goods and services?

 Essay on CH 1

2 What are the most important tools a B2B product manager would use to
achieve his/her Objectives?

The most important tool in the B2B manager’s toolbox is undoubtedly

 the sales force
 the product range itself,
 the degree of flexibility in problem-solving

3 What are the 12 major differences between B2B and consumer marketing?

B2B differs from B2C marketing in the following ways:

 Interdependence of departments,
 differences in product management responsibilities,
 marketing strategy being equal to corporate strategy,
 more rational decision-making,
 narrower customer base,
 more buying influences and locations,
 different segmentation bases,
 more markets and channels,
 greater emphasis on personal
 derived demand,
 Less end-user information,.

4 How can a manager avoid the “trappings” of marketing?

o Managers need to remind themselves constantly that the customer

should be at the center of everything
o Marketing managers have the responsibility to spread this
5 What defines the relationships which are so important to B2B marketers?

o The relationships between supplier and customer are defined by their

 Depth (the degree to which the two parties adapt themselves to

meet the needs of the other party)

 Breadth (the extent to which the parties relate across all their
activities). For example the seller gives a set of promises

6 What are the major goods classifications of B2B products?

The major classifications are:

 Entering goods and services, “raw material”
 Foundation goods and services,” tools of productions machines “
 Facilitating goods and services. “Cleaning tools, after market
service “

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