Topic 1: Check your understanding (2)
You can use these questions as a way of checking whether you have achieved the learning
outcomes for this topic. You can do it before starting, or at the end, or both.
Select the most correct answer for each of the following multiple-choice
questions.
1
Which of the following statements best describes what marketing is really
all about?
a) It is based on an exchange intended to satisfy human needs and
wants.
b) It is a commercial transaction between a business and a consumer.
c) It involves the transfer of ownership of goods.
d) It is the business activity of personal selling.
e) It is the process of consumption
Answer: A
In the topic we discussed the concept of marketing as involving exchange. We also
emphasised the importance of being customer focused. Answer b is too limited to really
convey the nature of what marketing is all about – and it’s not always a commercial
transaction that is involved in marketing. (eg anti smoking advertising). Answers C, D and E
are not correct, as they are only one small part of marketing.
2
Which of the following would be most in line with the marketing
concept?
a) To cut back on advertising in order to reduce your business
expenses.
b) To offer a free home delivery service for customers who spend $100 or
more in your supermarket.
c) To limit the number of retail outlets in your business.
d) Devote a greater share of your budget to advertising activities.
Answer: B
This is the only one that is customer focused. All of the other answers are based solely on the
business’ needs with no consideration for consumers
3
The three underlying principles of the marketing concept are:
a) The marketing mix, customer focus and profit
b) Customer focus, profitable sales volume and co-ordination of
activities within the organisation to achieve a customer focus
c) The marketing mix, well targeted promotions and customer focus
d) Product, price and promotion
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Answer: B
While some of these other things (such as the marketing mix) are important in marketing, the
marketing concept is a philosophy, based on three principles. The marketing mix assists in the
implementation of marketing plans.
4
Which of the following statements best describes the focus of the
marketing concept?
a) The lack of something that is required, desired or useful.
b) It is a way of maximising profitability within the organisation by
keeping costs to a minimum.
c) It is an economic philosophy that involves maximising the
profitability of commercial transactions.
d) It is a business philosophy that involves keeping in touch with
market needs and directing marketing activities to satisfy those
needs.
Answer: D
The correct answer is D, for the same reasons as the previous question
5
An example of a new question-buying situation in a business is:
a) Buying new, rather than second hand, office furniture
b) Buying stationery from a new supplier
c) A hospital’s first time purchase of laser surgery equipment
d) A school replacing a photocopier with a similar model
Answer: C
It is a brand new purchasing decision – for something that has not been purchased before.
Answers A, B and D are all examples of modified re-buy situations
6
An organisation’s buying centre is best described as:
a) Gatekeepers and deciders
b) A group of individuals who are directly or indirectly involved in the
decision making process
c) The office where the purchasing team sits
d) A central location where wholesale business goods can be bought and
sold.
Answer: B
A is an example of possible roles in the buying centre, but it does not describe what the
buying centre actually is. A buying centre is not a physical place, so answers C and D are
incorrect.
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7
The basic difference between business goods and consumer goods is:
a) The intended use of the product in its current form
b) The cost of the product
c) Whether it is sold in a supermarket or warehouse
d) Whether or not it is sold in bulk form.
Answer: A
We always distinguish between business and consumer goods based on their intended use in
current form. Answers B, C and D have nothing to do with whether goods are business or
consumer goods.
8
The first stage in the consumer decision-making process is:
a) Choice of involvement level
b) Problem recognition
c) Information search
d) Problem solving.
Answer: B
A consumer must recognise that they have a problem before they can go about making a
decision to solve it. Answers A, C and D are all steps in the decision making process but they
are not the first step
9
An example of a political/legal influence on the marketing environment for a
car wash business is:
a) The trend towards an ageing population
b) The increasingly multicultural society
c) Water restrictions in the Sydney Metropolitan area
d) Time-poor consumers.
Answer: C
While all of these options may possibly impact on a car wash business, only answer C is based
on political regulation. The other factors are demographic and psychographic.
10 Which of the following statements best describes the difference
between market research and a marketing information system?
a) Market research is based on primary data and a marketing
information system is based on secondary data.
b) Market research is used to guide marketing decisions whereas a
marketing information system is a storage facility for information.
c) Market research is usually done on a project-by-project basis whereas
a marketing information system is an ongoing system of data
collection, retrieval and analysis.
d) A market research project has six distinct steps whereas a marketing
information system has many more stages.
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Answer: C
Answer A is incorrect as market research uses both primary and secondary data. Answer B is
incorrect as a marketing information system is much more than just a storage facility. Answer
d is just simply wrong. The number of steps or stages in a market research project and the
development of a marketing information system does not indicate the distinction between the
two. Also, the six step model of market research is only one example – other models may have
more steps
11 Which of the following statements best describes the difference
between primary and secondary data?
a) Primary data is gathered first, followed by the gathering of
secondary data.
b) Secondary data is less useful than primary data.
c) Secondary data has already been gathered for some other purpose,
whereas primary data is collected for the project at hand.
d) Information found in libraries would be secondary data, whereas
internal company records would be primary data.
Answer: C
Answers A and B and d are all factually incorrect.
12 Which of the following could be included as part of a marketing
information system for a small business which manufactures
lawnmowers?
a) The past sales results of the company
b) A government listing of all lawnmower manufacturers operating in
Australia
c) The results of a previous focus group study of how consumers select their
preferred brand of lawnmower
d) All of the above.
Answer: D
A marketing information system contains a lot of information from a wide range of sources.
Any of the answers A, B and C would be useful parts of a marketing information system for
this business.
13 Which research method would be the best when researching the
attitudes of children aged 10–12 years?
a) Focus group
b) Telephone survey
c) Mail survey
d) All of the above.
Answer: A
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B and C are inappropriate for dealing with 10 –12 year olds. They are best researched through
open ended questioning in focus groups.
14 If an Australian car manufacturer wants to find out what features consumers
look for when purchasing a new car, an appropriate research method could be:
a) Telephone survey
b) Mail survey
c) Focus group
d) Any of the above may be useful in this case.
Answer: D
No method is better than another is this example. Any of the research methods listed is
appropriate.
15 A consumer should be viewed as:
a) A high involvement decision unit
b) A semiotic unit
c) A problem solver
d) All of the above.
Answer: D
Consumers make decisions to solve problems. Answers A and B are incorrect as there are no
such things as ‘a high involvement decision unit’ or ‘a semiotic unit’.
16 Which of the following statements best describes qualitative research?
a) It makes use of closed response questionnaire items to allow
responses to be tallied.
b) It involves both surveys and focus groups.
c) It encourages open responses to find out about attitudes and
opinions.
d) It involves collecting quality data from reliable sources.
Answer: C
Answer A refers to qualitative research. Answer B is only half correct as qualitative research
does involve focus groups, but surveys are a quantitative research method. Answer D is
wrong.
17 Which of the following statements best describes quantitative research?
a) It makes use of closed response questionnaire items to allow
responses to be tallied.
b) It involves both surveys and focus groups.
c) It encourages open responses to find out about attitudes and
opinions.
d) It involves collecting quality data from reliable sources.
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Answer: A
Answer B is only half correct as qualitative research does involve focus groups, but surveys
are a quantitative research method. Answer C. refers to qualitative research As per question
16, answer D is wrong
18 A ‘problem’ can best be defined as:
a) A selection between alternatives
b) The intensity of human needs and wants
c) A situation based on past experiences
d) The difference between our actual state and desired state.
Select the most correct answer for each of the above multiple-choice
questions.
Answer: D
We have a problem when we feel there is a discrepancy between our actual state and desired
state. Answer A is not correct as – the selection action happens when we are actually solving
the problem at hand. Answer B is not correct as it is simply a statement that does not relate to
the concept in the question. Answer C is partially, but not entirely incorrect as problems can
be influenced by past experiences but this is not a definition of a ‘problem’
19. Study the following brands.
1
QANTAS
2
Kodak cameras
3
Heinz tomato sauce
4
Woolworths supermarkets
5
Birds Eye frozen beans
20. Discuss the marketing environment for each of the above products/brands. Identify the trends
in the marketing environment that are likely to affect each product/brand.
Feedback
1
QANTAS has been hit hard by increasing competition from budget carriers
such as Virgin and has also suffered as part of the global decline in travel
due to fears of terrorism. High oil prices also result in higher fuel costs.
2
Kodak cameras has launched into the digital camera market which is just as
well, because still cameras are almost a thing of the past! Heavy competition
will increase pressure on prices. However with the popularity of digital
cameras, the total market should increase, providing opportunities for
growth
3
Heinz tomato sauce is a well-established brand. It has a lot of competition.
Tomato sauce is eaten with other foods (particularly fatty foods like pies and
chips), not on its own. The trend towards healthier eating may have a
negative impact on sales. Innovative packaging may have a positive impact.
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4
Woolworths supermarkets are in a very strong, market leading position,
however Coles is planning an aggressive advertising strategy over the next
few years, so competition is tough. Woolies must keep up to date with eating
habits and changing tastes to ensure its range meets customer needs.
5
Birds Eye frozen beans may be positively affected by the healthy eating trend.
However increasingly time poor consumers often look for quick all-in-one
easy meal solutions – this does not include frozen beans! There is also
increasing competition from other manufacturers offering different varieties of
vegetables in appealing packaging.
21. Explain the differences between a marketing information system and market research.
Feedback
The key difference between a marketing information system and market research is
that the former is an ongoing system of data collection, analysis and retrieval,
whereas market research is used on a project to project basis.
22. Briefly explain the differences between the consumer decision making process and
business decision making process.
Feedback
The actual steps in the decision making process are the same, however purchase
motivations differ greatly. Business buyers are said to make rational decisions,
whereas consumers are influenced by other emotional factors. Business buyers also
often buy in groups and take longer to make decisions, place an order and pay for
it.
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