BUSN 219 Marketing Fundamentals Practice Test
Sample Questions and Answers
Which of the following is the primary focus of marketing?
A) Selling products at the lowest price
B) Identifying and satisfying customer needs
C) Increasing profit margins
D) Product development
Answer: B) Identifying and satisfying customer needs
Explanation: Marketing’s main goal is to understand and meet customer needs, creating value for customers and building long-term relationships.
What does the ‘4 Ps’ of marketing stand for?
A) Product, Price, Place, Promotion
B) Product, Process, Planning, Performance
C) Price, People, Product, Positioning
D) Promotion, Planning, Pricing, Place
Answer: A) Product, Price, Place, Promotion
Explanation: The ‘4 Ps’ represent the key components of a marketing strategy: Product (what is being sold), Price (cost to the consumer), Place (distribution), and Promotion (advertising and sales).
A company that differentiates its products based on quality is employing which strategy?
A) Cost leadership
B) Differentiation
C) Market segmentation
D) Niche marketing
Answer: B) Differentiation
Explanation: Differentiation strategy focuses on making a product stand out in the market, often through superior quality or unique features.
Which of the following is an example of direct marketing?
A) Television advertising
B) Billboard advertising
C) Email campaigns
D) Radio advertising
Answer: C) Email campaigns
Explanation: Direct marketing involves communicating directly with potential customers, often through emails, phone calls, or direct mail, to generate a response or transaction.
What does SWOT stand for in marketing analysis?
A) Strengths, Weaknesses, Opportunities, Threats
B) Sales, Workers, Operations, Tactics
C) Strategy, Win, Opportunity, Target
D) Success, Winning, Organizational, Technology
Answer: A) Strengths, Weaknesses, Opportunities, Threats
Explanation: SWOT analysis helps marketers evaluate a company’s internal strengths and weaknesses, as well as external opportunities and threats.
Which of the following is a market penetration strategy?
A) Entering new international markets
B) Developing new products for current customers
C) Selling more existing products to existing customers
D) Repositioning the brand
Answer: C) Selling more existing products to existing customers
Explanation: Market penetration focuses on increasing sales of existing products in current markets, often by increasing market share.
What is the main goal of market segmentation?
A) To reduce competition in the market
B) To identify and target specific groups of consumers
C) To offer universal products to all consumers
D) To lower the cost of production
Answer: B) To identify and target specific groups of consumers
Explanation: Market segmentation involves dividing a market into distinct groups with similar needs or behaviors, allowing businesses to tailor marketing efforts.
Which of the following is an example of a demographic variable for market segmentation?
A) Age
B) Lifestyle
C) Personality
D) Hobbies
Answer: A) Age
Explanation: Demographic variables are characteristics like age, gender, income, and education that help segment a market into groups.
The concept of “brand equity” refers to:
A) The financial value of a company’s products
B) The strength of a brand based on consumer perception
C) The number of stores a company owns
D) The market share a brand holds
Answer: B) The strength of a brand based on consumer perception
Explanation: Brand equity refers to the value that a brand adds to a product based on consumer perception, recognition, and loyalty.
What does ‘positioning’ refer to in marketing?
A) Pricing a product higher than competitors
B) Creating a brand image in the minds of consumers
C) Choosing a distribution channel for products
D) Selling a product through multiple outlets
Answer: B) Creating a brand image in the minds of consumers
Explanation: Positioning is the process of defining how a brand is perceived in the market, shaping customer perceptions to stand out from competitors.
Which of the following is an example of a psychographic variable in market segmentation?
A) Income
B) Education
C) Social class
D) Personality traits
Answer: D) Personality traits
Explanation: Psychographics involve lifestyle, values, interests, and personality traits that help marketers understand consumer motivations.
What is the primary purpose of a product’s life cycle?
A) To determine the price of the product
B) To describe the stages a product goes through from development to decline
C) To analyze consumer demographics
D) To forecast future sales
Answer: B) To describe the stages a product goes through from development to decline
Explanation: The product life cycle (PLC) outlines the stages a product moves through: introduction, growth, maturity, and decline, influencing marketing strategies.
Which of the following is an example of a pull marketing strategy?
A) Sponsoring a TV show
B) Offering discounts through intermediaries
C) Creating demand through advertising to consumers
D) Selling directly to wholesalers
Answer: C) Creating demand through advertising to consumers
Explanation: A pull strategy encourages consumers to seek out a product, often through advertising, promotions, and branding efforts.
What does the term ‘market share’ refer to?
A) The price at which a product is sold
B) The percentage of total sales in the market captured by a brand
C) The target audience of a product
D) The profitability of a product in a market
Answer: B) The percentage of total sales in the market captured by a brand
Explanation: Market share is the proportion of total sales that a brand or product holds within a particular market.
Which of the following is an example of a service?
A) A pair of jeans
B) A hotel stay
C) A laptop
D) A smartphone
Answer: B) A hotel stay
Explanation: A service is an intangible product, such as a hotel stay or legal advice, which cannot be physically touched or owned.
Which type of research is most appropriate for gathering data on customer preferences?
A) Exploratory research
B) Descriptive research
C) Causal research
D) Secondary research
Answer: B) Descriptive research
Explanation: Descriptive research is used to gather data on consumer preferences, behavior, and characteristics.
What is ‘market orientation’?
A) The strategy of focusing on product development
B) The focus on satisfying customer needs and wants
C) The process of targeting a specific segment
D) The act of controlling market pricing
Answer: B) The focus on satisfying customer needs and wants
Explanation: Market orientation involves understanding and responding to consumer needs and ensuring that products align with customer demands.
A company is using social media to generate interest in its new product. What type of promotion is this?
A) Advertising
B) Public relations
C) Personal selling
D) Sales promotion
Answer: B) Public relations
Explanation: Public relations involve managing communication with the public and promoting positive brand images through channels like social media.
Which of the following best defines ‘customer loyalty’?
A) The willingness to pay more for a product
B) Repeated purchases due to customer satisfaction
C) The frequency of purchases over a lifetime
D) The number of new customers acquired
Answer: B) Repeated purchases due to customer satisfaction
Explanation: Customer loyalty refers to the tendency of customers to repeatedly buy from a brand because they are satisfied with the product or service.
What is a ‘niche market’?
A) A broad segment of the market
B) A small, specific segment with unique needs
C) A market where all products are identical
D) A market targeting only high-income individuals
Answer: B) A small, specific segment with unique needs
Explanation: Niche marketing focuses on targeting small, specialized segments that have unique needs, allowing companies to tailor products or services to these customers.
Which of the following is an example of a pricing strategy based on competition?
A) Cost-plus pricing
B) Penetration pricing
C) Price skimming
D) Competitive pricing
Answer: D) Competitive pricing
Explanation: Competitive pricing involves setting a price based on the prices of competing products in the market.
The concept of ‘value proposition’ refers to:
A) The unique benefits a product offers to the customer
B) The retail price of a product
C) The production cost of a product
D) The target market of a product
Answer: A) The unique benefits a product offers to the customer
Explanation: The value proposition communicates the unique benefits and value that a product provides, distinguishing it from competitors.
Which of the following is NOT a type of consumer product?
A) Convenience products
B) Shopping products
C) Specialty products
D) Industrial products
Answer: D) Industrial products
Explanation: Industrial products are sold to businesses for further production or operations, while consumer products are sold directly to the end consumer.
What is ‘relationship marketing’?
A) Focusing on one-time sales transactions
B) Building long-term relationships with customers
C) Creating brand awareness
D) Lowering product prices
Answer: B) Building long-term relationships with customers
Explanation: Relationship marketing focuses on fostering long-term relationships with customers, aiming for repeat business and customer loyalty.
Which of the following is an example of a product line extension?
A) A soft drink company introducing a new flavor
B) A car manufacturer launching an entirely new car model
C) A technology company starting to sell smartphones
D) A clothing brand expanding into furniture
Answer: A) A soft drink company introducing a new flavor
Explanation: A product line extension involves adding new products to an existing product line, like introducing a new flavor to a soft drink range.
What is the purpose of the AIDA model in marketing?
A) To increase product differentiation
B) To explain consumer behavior in the purchase process
C) To segment markets effectively
D) To enhance customer loyalty programs
Answer: B) To explain consumer behavior in the purchase process
Explanation: The AIDA model (Attention, Interest, Desire, Action) explains the stages consumers go through before making a purchase.
What is a key characteristic of an ‘unsought product’?
A) It is frequently purchased
B) It is not actively sought out by consumers
C) It is considered a luxury item
D) It is purchased with high brand loyalty
Answer: B) It is not actively sought out by consumers
Explanation: Unsought products are those that consumers don’t think about frequently and don’t actively seek out, like life insurance or funeral services.
Which of the following is an example of a push marketing strategy?
A) Social media campaigns
B) Retailer incentives to stock a product
C) Consumer-to-consumer marketing
D) Television advertisements
Answer: B) Retailer incentives to stock a product
Explanation: A push strategy involves marketing efforts aimed at getting retailers or intermediaries to push a product to consumers.
What is the main purpose of a marketing audit?
A) To analyze the financial performance of the company
B) To review and evaluate the effectiveness of marketing activities
C) To segment the target market
D) To set the pricing strategy
Answer: B) To review and evaluate the effectiveness of marketing activities
Explanation: A marketing audit is an evaluation process that assesses the current marketing activities and identifies areas for improvement.
Which of the following is NOT a benefit of digital marketing?
A) Reaching a wider audience
B) Providing personalized content
C) Limited ability to track performance
D) Cost-effectiveness
Answer: C) Limited ability to track performance
Explanation: One of the key advantages of digital marketing is its ability to track performance, allowing marketers to adjust campaigns in real time.
Which of the following is an example of a market-oriented company?
A) A company that focuses on producing high-quality products regardless of consumer needs
B) A company that bases its product offerings on consumer feedback and market research
C) A company that reduces costs by cutting corners in product development
D) A company that focuses on increasing profit margins at all costs
Answer: B) A company that bases its product offerings on consumer feedback and market research
Explanation: Market-oriented companies focus on understanding and meeting customer needs, often through feedback and research.
Which of the following is a key feature of digital marketing?
A) Only focuses on traditional media like TV and radio
B) Allows for real-time tracking of marketing efforts
C) Focuses solely on mass advertising campaigns
D) Restricts communication to print ads
Answer: B) Allows for real-time tracking of marketing efforts
Explanation: Digital marketing enables real-time data tracking, helping marketers measure effectiveness and adjust strategies quickly.
Which of the following is an example of a place strategy in marketing?
A) Offering discounts on bulk orders
B) Choosing the right location for retail stores
C) Using social media for advertising
D) Creating a loyalty program for customers
Answer: B) Choosing the right location for retail stores
Explanation: The place strategy in marketing focuses on distribution and ensuring products are available where and when customers need them.
What is the main goal of market research?
A) To reduce production costs
B) To understand consumer needs and market trends
C) To create advertising campaigns
D) To find the cheapest suppliers
Answer: B) To understand consumer needs and market trends
Explanation: Market research helps businesses gather information about consumer preferences, behaviors, and market trends to make informed decisions.
Which of the following is an example of ’cause-related marketing’?
A) A company offering discounts for repeat purchases
B) A company donating a percentage of its profits to charity
C) A company launching a new product line
D) A company improving its supply chain efficiency
Answer: B) A company donating a percentage of its profits to charity
Explanation: Cause-related marketing involves linking a brand or product with a social or charitable cause, benefiting both the brand and the cause.
Which of the following best describes ‘psychological pricing’?
A) Setting a price based on the cost of production
B) Setting a price to encourage consumers to perceive the product as a bargain
C) Setting a price according to the prices of competitors
D) Setting a price based on profit margins
Answer: B) Setting a price to encourage consumers to perceive the product as a bargain
Explanation: Psychological pricing techniques, like pricing items at $9.99 instead of $10, aim to make products seem more affordable by using consumer psychology.
What is the main purpose of a product’s packaging?
A) To protect the product during transport
B) To increase production costs
C) To make the product easier to use
D) To attract customer attention and communicate brand identity
Answer: D) To attract customer attention and communicate brand identity
Explanation: Packaging serves both functional and promotional purposes, helping to differentiate the product and reinforce brand identity.
What is the difference between ‘product line’ and ‘product mix’?
A) A product line consists of related products, while a product mix includes all products offered by a company
B) A product line includes all products, while a product mix includes related products
C) A product line is focused on one product type, while a product mix includes a variety of categories
D) There is no difference between the two
Answer: A) A product line consists of related products, while a product mix includes all products offered by a company
Explanation: A product line includes products that are related in some way, while the product mix is the full range of products offered by a company.
What is the main function of ‘sales promotion’?
A) To build long-term brand loyalty
B) To encourage immediate sales through incentives
C) To reduce the cost of production
D) To create a brand identity
Answer: B) To encourage immediate sales through incentives
Explanation: Sales promotions are short-term tactics, such as discounts or special offers, designed to boost immediate sales.
Which of the following is an example of a pricing strategy used in a highly competitive market?
A) Skimming pricing
B) Psychological pricing
C) Penetration pricing
D) Premium pricing
Answer: C) Penetration pricing
Explanation: Penetration pricing involves setting a low price to attract customers and quickly gain market share, especially in competitive markets.
Which of the following is NOT a function of the marketing communication mix?
A) Advertising
B) Direct marketing
C) Product development
D) Sales promotion
Answer: C) Product development
Explanation: The marketing communication mix involves advertising, direct marketing, sales promotions, public relations, and personal selling, but product development is not part of the communication mix.
What is the purpose of the ‘penetration pricing’ strategy?
A) To skim profits from high-end customers
B) To attract customers by offering lower prices than competitors
C) To position the product as a luxury item
D) To offer discounts to loyal customers
Answer: B) To attract customers by offering lower prices than competitors
Explanation: Penetration pricing sets low prices to gain market share quickly, often used in highly competitive markets.
Which of the following is a typical characteristic of a ‘niche market’?
A) Broad target audience
B) A high level of competition
C) Specialized products for a specific group of consumers
D) Standardized product offerings
Answer: C) Specialized products for a specific group of consumers
Explanation: Niche markets focus on specialized products aimed at a small, well-defined group of consumers with specific needs.
What does the term ‘branding’ refer to?
A) The price at which a product is sold
B) The process of identifying and differentiating a product in the market
C) The location where a product is sold
D) The production process used to make a product
Answer: B) The process of identifying and differentiating a product in the market
Explanation: Branding involves creating a unique identity for a product or company through elements like logos, names, and symbols that differentiate it from competitors.
What is ‘sociocultural segmentation’?
A) Dividing the market based on geographic location
B) Dividing the market based on income and age
C) Dividing the market based on social and cultural factors like lifestyle and values
D) Dividing the market based on buying behavior
Answer: C) Dividing the market based on social and cultural factors like lifestyle and values
Explanation: Sociocultural segmentation focuses on the cultural, social, and lifestyle aspects that influence consumer behavior.
Which of the following is NOT a type of consumer decision-making process?
A) Extended decision making
B) Limited decision making
C) Habitual decision making
D) Strategic decision making
Answer: D) Strategic decision making
Explanation: Extended, limited, and habitual decision-making processes are the primary types of consumer decision-making, with strategic decision making being unrelated.
What is the purpose of a loyalty program?
A) To attract new customers
B) To provide incentives for repeat purchases
C) To increase product variety
D) To reduce marketing costs
Answer: B) To provide incentives for repeat purchases
Explanation: Loyalty programs reward customers for repeat purchases and encourage brand loyalty over time.
What is a ‘competitive advantage’?
A) The ability to lower prices in a saturated market
B) A strategy that allows a company to outperform its competitors
C) The level of sales a company can achieve
D) A product’s unique features that differentiate it from others
Answer: B) A strategy that allows a company to outperform its competitors
Explanation: A competitive advantage is the factor that allows a company to perform better than its competitors, often by offering unique products, lower costs, or better customer service.
Which of the following best defines ‘public relations’ in marketing?
A) Selling products directly to consumers
B) Managing the spread of information between a company and the public
C) Creating advertisements to generate sales
D) Offering discounts to customers to increase purchases
Answer: B) Managing the spread of information between a company and the public
Explanation: Public relations involves managing a company’s communication and reputation with the public, through media, events, and community outreach.
What is the difference between ‘customer satisfaction’ and ‘customer loyalty’?
A) Customer satisfaction is about one-time purchases, while customer loyalty is about repeated purchases
B) Customer satisfaction is more important than customer loyalty
C) Customer satisfaction always leads to customer loyalty
D) Customer loyalty is based on price, while customer satisfaction is based on product quality
Answer: A) Customer satisfaction is about one-time purchases, while customer loyalty is about repeated purchases
Explanation: Customer satisfaction measures the initial experience, while customer loyalty is based on long-term repeat purchases due to satisfaction with the brand.