Chapter 4:

Conducting Marketing Research and Forecasting Demand

GENERAL CONCEPT QUESTIONS

Multiple Choice

1. ________ provide diagnostic information about how and why we observe certain
effects in the marketplace, and what that means to marketers.
a. Marketing insights
b. Marketing metrics
c. Marketing diagnostics
d. Marketing intelligence
e. Marketing-mix models
Answer: a Page: 90 Difficulty: Medium AACSB: Analytic Skills

2. ________ is the systematic design, collection, analysis, and reporting of data and
findings relevant to a specific marketing situation facing the company.
a. Marketing intelligence
b. MIS (marketing information system)
c. Marketing research
d. Demographics
e. Marketing management
Answer: c Page: 90 Difficulty: Easy AACSB: Analytic Skills

3. Marketing research is now about a ________ billion industry globally.

a. $50
b. $24
c. $16.5
d. $10
e. $7.5
Answer: b Page: 90 Difficulty: Hard AACSB: Analytic Skills

4. Companies normally budget marketing research at ________ of company sales.

a. 1% to 2%
b. 2% to 3%
c. 4%
d. 6.5%
e. 10% to 12%
Answer: a Page: 90 Difficulty: Medium AACSB: Analytic Skills

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 Chapter 4: Conducting Marketing Research and Forecasting Demand

5. Which of the following types of marketing research firms would best be described as
being one that gathers consumer and trade information which they sell for a fee (e.g.,
Nielsen Media Research)?
a. Custom marketing research firms
b. Syndicated-service research firms
c. Specialty-line marketing research firms
d. General-line marketing research firms
e. Nonprofit marketing research firms
Answer: b Page: 90 Difficulty: Medium AACSB: Reflective Thinking

6. If a marketing research firm were also known as a field-service firm (e.g., it sells its
field interviewing services to other firms), it would be called a ________.
a. custom marketing research firm
b. syndicated-service research firm
c. specialty-line marketing research firm
d. general-line marketing research firm
e. systematic marketing research firm
Answer: c Page: 90 Difficulty: Medium AACSB: Reflective Thinking

7. All of the following would be among the ways that small companies can conduct
marketing research in creative and affordable ways EXCEPT ________.
a. using the Internet
b. engaging students to design and carry out projects
c. checking out rivals
d. engaging professors to design and carry out projects
e. hiring syndicated-service research firms to conduct projects
Answer: e Pages: 90–91 Difficulty: Hard AACSB: Reflective Thinking

8. The first step in the marketing research process is to ________.

a. develop a research plan
b. define the problem and research objectives
c. analyze the internal environment
d. read marketing research journals
e. contact a professional consultant
Answer: b Page: 91 Difficulty: Easy AACSB: Analytic Skills

9. Which of the following is considered to be the last step in the marketing research
process?
a. Present the findings
b. Analyze the information
c. Control the environment
d. Make the decision
e. Draft the report
Answer: d Page: 91 Difficulty: Medium AACSB: Analytic Skills

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Part 2: Capturing Marketing Insights

10. The marketing manager needs to know the cost of the research project before
approving it. During which of the following stages of the marketing research process
would such a consideration most likely take place?
a. Step 1—defining the problem
b. Step 1—creating decision alternatives
c. Step 1—drafting the research objectives
d. Step 2—develop the research plan
e. Step 3—information collection
Answer: d Page: 92 Difficulty: Medium AACSB: Analytic Skills

11. Designing a research plan calls for decisions on all of the following EXCEPT
________.
a. drafting research objectives
b. data sources
c. research approaches
d. research instruments
e. sampling plans
Answer: a Page: 92 Difficulty: Medium

12. ________ are data that were collected for another purpose and already exist.
a. Primary data
b. Secondary data
c. Tertiary data
d. Inordinate data
e. Ordinate data
Answer: b Page: 92 Difficulty: Easy AACSB: Analytic Skills

13. Primary data can be collected in several ways. Which of the following primary data
collection methods would be exemplified by constructing see-through mirrors in a
retail store whereby consumers’ actions could be recorded?
a. Focus groups
b. Surveys
c. Observation
d. Behavioral data
e. Experiments
Answer: c Page: 92 Difficulty: Medium AACSB: Reflective Thinking

14. A ________ is a gathering of 6 to 10 people who are carefully selected based on

certain demographic, psychographic, or other considerations and brought together to
discuss at length various topics of interest.
a. market maven
b. virtual research market
c. consumer dyad
d. focus group
e. Nielsen sample family
Answer: d Page: 93 Difficulty: Easy AACSB: Analytic Skills

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 Chapter 4: Conducting Marketing Research and Forecasting Demand

15. Companies undertake surveys to learn about people’s knowledge, ________,

preferences, and satisfaction and to measure these magnitudes in the general
population.
a. beliefs
b. psyche
c. inner id
d. deepest secrets
e. intelligence and literacy
Answer: a Page: 94 Difficulty: Medium AACSB: Analytic Skills

16. The most scientifically valid research is ________ research.

a. observation
b. focus-group
c. survey
d. behavioral data
e. experimental
Answer: e Page: 95 Difficulty: Medium AACSB: Reflective Thinking

17. All of the following are rules of thumb for questionnaire design EXCEPT ________.
a. making questions as simple as possible
b. making the questions specific
c. ensuring that fixed responses overlap
d. avoiding hypothetical questions
e. avoiding questions with a negative in them
Answer: c Page: 96 Difficulty: Hard

18. The most common instrument used to collect primary data is the ________.
a. human eye (through observation)
b. Internet
c. bar-code reader (behavioral data research)
d. video camera (e.g., focus-group research)
e. questionnaire
Answer: e Page: 96 Difficulty: Easy

19. Some marketers prefer more ________ methods for gauging consumer opinion
because consumer actions do not always match their answers to survey questions.
a. quantitative
b. qualitative
c. psychographic
d. covert
e. subliminal
Answer: b Page: 96 Difficulty: Medium AACSB: Reflective Thinking

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Part 2: Capturing Marketing Insights

20. A question that uses a scale that connects two bipolar words wherein the respondent
selects the point that represents his or her opinion is called ________.
a. a dichotomous question
b. a multiple-choice question
c. a Likert scale
d. the semantic differential
e. a word association question
Answer: d Page: 97 Difficulty: Hard AACSB: Analytic Skills

21. If a marketing researcher chooses to use a word association question, the researcher
has chosen which of the following type of question for the research questionnaire?
a. Closed-end question
b. Likert scale question
c. Open-end question
d. Rating scale question
e. Semantic differential question
Answer: c Page: 97 Difficulty: Medium AACSB: Analytic Skills

22. Which of the following types of tests shows a picture and asks respondents to make
up a story about what they think is happening or may happen in the picture?
a. Word association
b. Completely unstructured question
c. Story completion
d. Thematic Apperception Test (TAT)
e. Holistic association
Answer: d Page: 97 Difficulty: Hard AACSB: Analytic Skills

23. If a marketing researcher asks subjects what kind of person they think of when the
brand is mentioned in order to understand how consumers feel about a particular
brand, the marketing researcher is using the ________ approach.
a. word association
b. projective
c. visualization
d. brand personification
e. laddering
Answer: d Page: 98 Difficulty: Hard AACSB: Analytic Skills

24. With respect to the sampling plan, three decisions must be made: (1) the sampling
unit—who is to be surveyed; (2) sample size—how many people should be surveyed;
and (3) ________.
a. sample cost—how much the sampling costs
b. surveyor skill—who does the surveying
c. sample security—how to protect the sample data
d. sampling procedure—how the respondents are chosen
e. sample supervisor—who leads the sampling effort
Answer: d Page: 100 Difficulty: Hard

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 Chapter 4: Conducting Marketing Research and Forecasting Demand

25. If a marketing researcher selects the most accessible population members, he or she
would have selected the ________ sampling method.
a. simple random
b. stratified random
c. cluster
d. judgment
e. convenience
Answer: e Page: 100 Difficulty: Medium AACSB: Analytic Skills

26. If a researcher finds and interviews a prescribed number of people in each of several
categories, the researcher is using the ________ sampling method.
a. judgment
b. quota
c. convenience
d. cluster
e. simple random
Answer: b Page: 100 Difficulty: Hard AACSB: Analytic Skills

27. If a marketing researcher wished to reach people who would not give personal
interviews or whose responses might be biased or distorted by the interviewers, he or
she should choose the ________ as the best way to reach people.
a. mail questionnaire
b. telephone interview
c. online interview
d. focus group interview
e. cell phone interview
Answer: a Page: 100 Difficulty: Medium AACSB: Reflective Thinking

28. Which of the following is considered to be the most versatile of the questioning or
interviewing methods?
a. mail questionnaire
b. telephone interview
c. personal interview
d. online interview
e. cell phone interview
Answer: c Page: 101 Difficulty: Medium AACSB: Reflective Thinking

29. Online research has grown significantly in the past several years. It is estimated that
________ of all survey-based research was done online in 2006.
a. 12%
b. 21%
c. 33%
d. 37%
e. 45%
Answer: c Page: 101 Difficulty: Hard AACSB: Analytic Skills

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Part 2: Capturing Marketing Insights

30. The ________ phase of marketing research is generally the most expensive and the
most prone to error.
a. research objectives
b. research planning
c. questionnaire design
d. interview design
e. data collection
Answer: e Page: 101 Difficulty: Medium

31. Which of the following is one of the key disadvantages of online market research?
a. Online research is expensive.
b. Online research is slow.
c. People tend to be dishonest online.
d. Online research lacks versatility.
e. Samples can be small and skewed.
Answer: e Page: 102 Difficulty: Hard AACSB: Reflective Thinking

32. All of the following are considered to be advantages of online research EXCEPT that
________.
a. online research is inexpensive
b. online research is fast
c. online research is relatively free of technological problems and inconsistencies
d. online research is versatile
e. people tend to be more honest online than in other interviewing methods
Answer: c Page: 102 Difficulty: Medium

33. One of the biggest obstacles to conducting international research is ________.

a. cost
b. lack of consistency
c. language difficulties
d. religious bias
e. lack of management’s commitment in this area
Answer: b Page: 102 Difficulty: Hard AACSB: Reflective Thinking

34. A ________ has been defined as being a coordinated collection of data, systems,
tools, and techniques with supporting software and hardware by which an
organization gathers and interprets relevant information from business and
environment and turns it into a basis for marketing action.
a. marketing information system
b. marketing intelligence system
c. marketing decision support system
d. marketing research system
e. database management system
Answer: c Page: 103 Difficulty: Medium

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 Chapter 4: Conducting Marketing Research and Forecasting Demand

35. All of the following are considered to be among the seven characteristics of good
marketing research EXCEPT ________.
a. the scientific method
b. research creativity
c. multiple methods
d. ethical marketing
e. independence of models and data
Answer: e Page: 104 Difficulty: Medium

36. In spite of the rapid growth of marketing research, many companies still fail to use it
sufficiently or correctly. Barriers to the use of marketing research include all of the
following EXCEPT ________.
a. a broad conception of the research
b. uneven caliber of researchers
c. poor framing of the problem
d. late and occasionally erroneous findings
e. personality and presentational differences
Answer: a Page: 103–104 Difficulty: Hard

37. In the famous case where Coca-Cola introduced New Coke after much research, the
failure of New Coke was largely due to a marketing research barrier identified as
________.
a. a narrow conception of the research
b. uneven caliber of researchers
c. poor framing of the problem
d. late and occasional erroneous findings
e. personality and presentation differences
Answer: c Page: 104 Difficulty: Medium AACSB: Reflective Thinking

38. Marketers are increasing being held accountable for their ________ and must be able
to justify marketing expenditures to senior management.
a. product quotas
b. employees
c. own training
d. investments
e. personal character traits
Answer: d Page: 106 Difficulty: Medium AACSB: Analytic Skills

39. Two complimentary approaches to measure marketing productivity are ________ and
marketing-mix modeling.
a. quality ratios
b. salesperson satisfaction scales
c. marketing metrics to assess marketing effects
d. distributor satisfaction surveys
e. end-user samples
Answer: c Page: 106 Difficulty: Hard AACSB: Analytic Skills

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Part 2: Capturing Marketing Insights

40. ________ is(are) the set of measures that helps firms to quantify, compare, and
interpret their marketing performance.
a. Marketing diagnostics
b. Psychographics
c. Demographics
d. Marketing intelligence
e. Marketing metrics
Answer: e Page: 106 Difficulty: Easy AACSB: Analytic Skills

41. London Business School’s Tim Ambler believes evaluation of marketing

performance can be split into two parts: ________.
a. (1) long-term results and (2) changes in brand equity
b. (1) short-term results and (2) changes in brand equity
c. (1) long-term results and (2) changes in consumer perceptions
d. (1) short-term results and (2) changes in profitability
e. (1) changes in market share and (2) changes in profitability
Answer: b Page: 106 Difficulty: Hard AACSB: Analytic Skills

42. All of the following would be considered to be external marketing metrics EXCEPT
________.
a. market share
b. relative price
c. number of complaints
d. perceived quality/esteem
e. relative employee satisfaction
Answer: e Page: 107 Difficulty: Medium AACSB: Analytic Skills

43. A ________ records how well the company is doing year after year on customer-
based measures (e.g., percentage of new customers to average number of customers).
a. customer-performance scorecard
b. stakeholder-performance scorecard
c. mission/objectives scorecard
d. variance scorecard
e. management scorecard
Answer: a Pages: 107–108 Difficulty: Medium AACSB: Analytic Skills

44. If a company actively tracks the satisfaction of its suppliers, banks, and distributors, it
is using what is called a ________.
a. customer-performance scorecard
b. stakeholder-performance scorecard
c. mission/objectives scorecard
d. variance scorecard
e. management scorecard
Answer: b Page: 108 Difficulty: Easy

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 Chapter 4: Conducting Marketing Research and Forecasting Demand

45. According to marketing consultant Pat LaPointe, the ________ measurement pathway
of the marketing dashboard reflects what marketers know about sales volumes, the
marketing cost per unit sold, and where and how margin is optimized.
a. customer metrics
b. unit metrics
c. cash-flow metrics
d. brand metrics
e. productivity metrics
Answer: b Page: 108 Difficulty: Hard AACSB: Analytic Skills

46. According to marketing consultant Pat LaPointe, the ________ measurement pathway
of the marketing dashboard reflects how prospects become customers.
a. customer metrics
b. unit metrics
c. cash-flow metrics
d. brand metrics
e. productivity metrics
Answer: a Page: 108 Difficulty: Hard AACSB: Analytic Skills

47. The ________ is the set of customers who are buying the company’s product.
a. potential market
b. available market
c. target market
d. penetrated market
e. repositioned market
Answer: d Page: 110 Difficulty: Easy AACSB: Analytic Skills

48. A marketing manager, during an annual planning meeting, would like to have the
department’s staff examine the set of consumers who have interest, income, and
access to the company’s offers, known as the ________.
a. potential market
b. available market
c. target market
d. penetrated market
e. repositioned market
Answer: b Page: 110 Difficulty: Medium AACSB: Analytic Skills

49. ________ for a product is the total volume that would be bought by a defined
customer group in a defined geographical area in a defined time period in a defined
marketing environment under a defined marketing program.
a. Market share
b. Market supply
c. Market demand
d. Market potential
e. Market penetration
Answer: c Page: 111 Difficulty: Medium

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Part 2: Capturing Marketing Insights

50. When calculating the market demand function, the ________ is the base sales that
would take place without any demand-stimulating expenditures.
a. market supply
b. market minimum
c. market potential
d. market demand
e. inert market
Answer: b Page: 111 Difficulty: Easy AACSB: Analytic Skills

51. Racquetball playing, which is very much affected in size by the level of industry
marketing expenditures, is known as a(n) ________.
a. nonexpansible market
b. market demand function
c. expansible market
d. potential market
e. target market
Answer: c Page: 111 Difficulty: Medium AACSB: Analytic Skills

52. A low market-penetration index indicates ________.

a. substantial growth potential for all firms
b. substantial growth opportunities for few firms
c. it will be very expensive to attract more prospects
d. price competition is increasing
e. profit margins are falling
Answer: a Page: 111 Difficulty: Hard AACSB: Reflective Thinking

53. A company with a ________ may be held back by low brand awareness, low brand
availability, benefit deficiencies, and high price.
a. high market-penetration index
b. high share-penetration index
c. low market-penetration index
d. low share-penetration index
e. none of the above
Answer: d Page: 111 Difficulty: Hard AACSB: Reflective Thinking

54. The _____ is the limit approached by market demand as industry marketing
expenditures approach infinity for a given marketing environment.
a. market forecast
b. product-penetration percentage
c. company demand
d. market minimum
e. market potential
Answer: e Page: 112 Difficulty: Medium AACSB: Analytic Skills

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 Chapter 4: Conducting Marketing Research and Forecasting Demand

55. Companies assume that the lower the ________, the higher the market potential.
a. market forecast
b. product-penetration percentage
c. company demand
d. market minimum
e. market potential
Answer: b Page: 112 Difficulty: Hard AACSB: Reflective Thinking

56. The company’s estimated share of market demand at alternative levels of company
marketing effort in a given time period is known as the ________.
a. market forecast
b. product-penetration percentage
c. company demand
d. market minimum
e. market potential
Answer: c Page: 112 Difficulty: Medium AACSB: Analytic Skills

57. There are several methods for assessing market potential. Which of these methods do
business marketers prefer?
a. Market-buildup method
b. Multiple-factor index method
c. Brand-development index method
d. Purchase-profitability index
e. Market-test index
Answer: a Page: 113 Difficulty: Hard

58. ________ is the art of anticipating what buyers are likely to do under a given set of
conditions.
a. Forecasting
b. Market penetration
c. Demand
d. Market buildup
e. Brand development
Answer: a Page: 115 Difficulty: Easy AACSB: Analytic Skills

59. All forecasts are built on one of three informational bases: what people say, what
people do, or ________.
a. what marketers think they’ll do
b. what they say they’ll do
c. what people say others do
d. what people have done
e. none of the above
Answer: d Page: 115 Difficulty: Medium AACSB: Reflective Thinking

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Part 2: Capturing Marketing Insights

60. Time-series analysis, exponential smoothing, and statistical demand analysis are all
forms of ________.
a. expert opinion
b. market-test methods
c. buyer intention surveys
d. past-sales analysis
e. none of the above
Answer: d Page: 116 Difficulty: Medium AACSB: Analytic Skills

True/False

61. Most large companies use outside marketing research consultants rather than employ
their own marketing research department.
Answer: False Page: 90 Difficulty: Medium AACSB: Analytic Skills

62. A good illustration of a syndicated-service research firm is Nielsen Media Research.

Answer: True Page: 90 Difficulty: Medium AACSB: Reflective Thinking

63. One way companies can conduct market research in a creative and affordable way is
to engage students to design and carry out projects, such as the Innovation Challenge
sponsored by American Express, GE, and Hilton Hotels.
Answer: True Page: 90 Difficulty: Medium

64. After developing the research plan, the marketing researcher should define the
problem and research objectives.
Answer: False Page: 91 Difficulty: Easy AACSB: Analytic Skills

65. All research must begin with an exploratory research study.

Answer: False Page: 92 Difficulty: Easy AACSB: Reflective Thinking

66. James collected primary data when he distributed a survey to dorm residents to
discover their attitudes and opinions on campus life.
Answer: True Page: 92 Difficulty: Medium AACSB: Reflective Thinking

67. Researchers frequently should and do successfully generalize findings from focus-
group participants to the whole market.
Answer: False Page: 93 Difficulty: Medium AACSB: Reflective Thinking

68. A good example of collecting behavioral data would be when a store uses scanners to
read bar codes on products selected by consumers.
Answer: True Page: 95 Difficulty: Medium AACSB: Reflective Thinking

69. The most scientifically valid research is focus-group research.

Answer: False Page: 95 Difficulty: Medium

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 Chapter 4: Conducting Marketing Research and Forecasting Demand

70. The most common instrument used to collect primary data is the questionnaire.
Answer: True Page: 96 Difficulty: Easy

71. If a marketing researcher decides to use a Likert scale, the researcher has chosen a
technique wherein the respondent reviews a statement that shows the amount of
agreement/disagreement with some product, service, or concept.
Answer: True Page: 97 Difficulty: Medium

72. “What is your opinion of the American way of life?” is an example of what might be
called the semantic differential.
Answer: False Page: 97 Difficulty: Medium AACSB: Analytic Skills

73. “What does the Coca-Cola name mean to you?” would be an illustration of a question
that might be used in a projective technique.
Answer: False Page: 98 Difficulty: Medium AACSB: Analytic Skills

74. Samples of less than 1% of a population can often provide good reliability, with a
credible sampling procedure.
Answer: True Page: 100 Difficulty: Hard AACSB: Analytic Skills

75. Probability sampling allows confidence limits to be calculated for sampling error and
makes the sampling more representative.
Answer: True Page: 100 Difficulty: Medium AACSB: Reflective Thinking

76. If a marketing researcher bases his or her sample on population members who are
good prospects for accurate information, a judgment sample has been selected.
Answer: True Page: 100 Difficulty: Medium

77. If a marketing researcher is looking for a contact method that can gather information
quickly and allow the interviewer to clarify questions if necessary, he or she will
choose the telephone interview method.
Answer: True Page: 101 Difficulty: Medium AACSB: Reflective Thinking

78. Because of their versatility and speed, the use of telephone interviewing as a
marketing research tool is projected to increase dramatically over the next few years.
Answer: False Page: 101 Difficulty: Medium AACSB: Reflective Thinking

79. A good illustration of what is called the arranged interview occurs when interviewers
stop people in a shopping mall or on a busy street and solicit information necessary to
their research effort.
Answer: False Page: 101 Difficulty: Medium AACSB: Reflective Thinking

80. The data analysis phase of the marketing research process is generally the most
expensive and the most prone to error.
Answer: False Page: 101 Difficulty: Medium AACSB: Analytic Skills

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81. One of the characteristics of good marketing research is that it uses multiple methods.
Answer: True Page: 104 Difficulty: Easy AACSB: Reflective Thinking

82. Marketing researchers should have a healthy skepticism toward glib assumptions
made by managers about how a market works.
Answer: True Page: 104 Difficulty: Easy AACSB: Reflective Thinking

83. Marketing-mix modeling is used to estimate causal relationships and measure how
marketing activity affects outcomes.
Answer: True Page: 106 Difficulty: Medium AACSB: Analytic Skills

84. A set of measures that helps firms to quantify, compare, and interpret their marketing
performance is called marketing metrics.
Answer: True Page: 106 Difficulty: Medium

85. Especially popular with such companies as Procter & Gamble, marketing-mix
modeling is used to allocate or reallocate expenditures.
Answer: True Page: 107 Difficulty: Medium AACSB: Analytic Skills

86. A stakeholder-performance scorecard tracks the satisfaction with the company and its
products and services among such entities as suppliers, banks, and stockholders.
Answer: True Page: 108 Difficulty: Medium

87. The production department is responsible for preparing sales forecasts because they
have the most data about production schedules and the ability to meet orders.
Answer: False Page: 109 Difficulty: Easy AACSB: Reflective Thinking

88. All the buyers who are able and willing to buy a company’s products or services are
called the overall market share.
Answer: False Page: 110 Difficulty: Medium

89. A target market is the set of consumers who profess a sufficient level of interest in a
market offer.
Answer: False Page: 110 Difficulty: Medium AACSB: Analytic Skills

90. The distance between the market minimum and the market potential shows the overall
marketing sensitivity of demand.
Answer: True Page: 111 Difficulty: Medium AACSB: Analytic Skills

91. Market demand is not a fixed number, but rather a function of the stated conditions.
Answer: True Page: 111 Difficulty: Easy AACSB: Reflective Thinking

92. A low market share-penetration index indicates substantial growth potential for all the
firms.
Answer: True Page: 111 Difficulty: Medium AACSB: Reflective Thinking

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 Chapter 4: Conducting Marketing Research and Forecasting Demand

93. Companies interested in market potential have a special interest in the product-
penetration percentage, which is the percentage of ownership or use of a product or
service in a population.
Answer: True Page: 112 Difficulty: Medium AACSB: Analytic Skills

94. A sales quota is a conservative estimate of the expected volume of sales, primarily for
making current purchasing, production, and cash flow decisions.
Answer: False Page: 112 Difficulty: Medium AACSB: Analytic Skills

95. A common way to estimate total market potential is to multiply the potential number
of buyers by the average quantity each purchases, times the price.
Answer: True Page: 113 Difficulty: Medium AACSB: Analytic Skills

96. Estimating area market potential, as a subset of total market potential, facilitates
effective marketing budget allocation.
Answer: True Page: 113 Difficulty: Hard AACSB: Reflective Thinking

97. The multiple-factor index method for assessing area market potential is most
commonly used by those interested in consumer markets.
Answer: True Page: 114 Difficulty: Medium

98. Few companies use sales-force estimates without making some adjustments because
of both deliberate and inadvertent estimation error on the part of salespeople.
Answer: True Page: 116 Difficulty: Easy AACSB: Reflective Thinking

99. With respect to past-sales analysis, econometric analysis consists of projecting the
next period’s sales by combining an average of past sales and the most recent sales,
giving more weight to the latter.
Answer: False Page: 116 Difficulty: Medium

100. When buyers don’t plan their purchases carefully, or experts are unavailable or
unreliable, exponential smoothing can help forecast new-product sales.
Answer: False Page: 116 Difficulty: Medium

APPLICATION QUESTIONS

Multiple Choice

111. Assume that you are a marketing research director for a medium-sized
manufacturing firm and you would like to engage an outside marketing research
firm to conduct your field interviews. Which of the following options would be
your best choice to achieve your objective?
a. A syndicated-service research firm
b. A custom marketing research firm

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Part 2: Capturing Marketing Insights

c. A global research management firm

d. A specialty-line marketing research firm
e. A brand-management specialty research firm
Answer: d Page: 90 Difficulty: Hard AACSB: Reflective Thinking

112. Which of the following is the best definition of the market research problem as
American Airlines conducts research to determine whether to make the in-flight
Internet available to first-class passengers?
a. Find out whether enough passengers aboard a B747 flying direct between
Chicago and Tokyo would be willing to pay $25 for an Internet connection for
American Airlines to break even in one year on the cost of offering this
service.
b. Find out everything you can about first-class air travelers’ needs.
c. Will offering an in-flight Internet service create enough incremental
preference and profit for American Airlines to justify its cost against other
possible investments in service enhancements American might make?
d. Is the Internet an important element of first-class air travelers’ work and home
lives?
e. None of the above.
Answer: c Page: 91 Difficulty: Hard AACSB: Communication

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 Chapter 4: Conducting Marketing Research and Forecasting Demand

113. If American Airlines seeks to quantify demand, such as how many first-class
passengers would purchase in-flight Internet service at $25, the airline should
conduct ________ research.
a. descriptive
b. exploratory
c. prescriptive
d. analytic
e. qualitative
Answer: a Page: 92 Difficulty: Medium AACSB: Analytic Skills

114. Before Sandra Perez opened her floral shop she read all she could on the industry.
She also reviewed library data banks on growth patterns in the local area with
particular interest in the location of florists throughout the city. This ________
assisted her in deciding where to locate her store.
a. primary information
b. secondary information
c. guerilla marketing data
d. tertiary information
e. nonpersonal information
Answer: b Page: 92 Difficulty: Medium AACSB: Reflective Thinking

115. As one marketing executive noted, ________ are “…the most cost-effective,
quickest, dirtiest way to get information in rapid time on an idea.”
a. scanners
b. tele-us machines
c. surveys
d. in-store interviews
e. focus groups
Answer: e Page: 95 Difficulty: Hard AACSB: Analytic Skills

116. One of the don’ts of questionnaire construction is to ensure that fixed responses
do not overlap. Which of the following is the best illustration of a problem that
this “don’t” might cause?
a. A question has three possible responses: yes, no, or maybe.
b. An income question asks for an income designation in one of the following
income categories: $0–$20,000, $20,000–$40,000, or $40,000 and above.
c. A consumer is asked to describe a recent event while driving.
d. A consumer must describe a cartoon about buying a car.
e. A consumer is asked whether or not he or she could spy on another
consumer’s shopping experience.
Answer: b Page: 96 Difficulty: Medium AACSB: Analytic Skills

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Part 2: Capturing Marketing Insights

117. If a questionnaire says “Small college classes are better places to learn effectively:
(choose) 1__ Strongly disagree, 2 __ Disagree, 3__ Neither agree nor disagree,
4__ Agree, 5__ Strongly agree,” the researcher would be using which of the
following to discover data.
a. Likert scale
b. Semantic differential
c. Multiple choice
d. Thematic Appreciation Test (TAT)
e. Dichotomous question
Answer: a Page: 97 Difficulty: Medium AACSB: Analytic Skills

118. The question “What is your opinion of American Airlines?” is an example of a

________ question.
a. rating scale
b. word association
c. completely unstructured
d. story completion
e. importance scale
Answer: c Page: 97 Difficulty: Medium AACSB: Analytic Skills

119. One set of consumers, during a focus-group session, indicated that Dell computers
reminded them of a surfer, Apple computers were equated to a mad scientist, and
IBM computers to Scrooge from the Dickens’s tale. Which of the following
qualitative research approaches matches to the approach described above?
a. Projective techniques
b. Visualization
c. Brand personification
d. Laddering
e. Pyramiding
Answer: c Page: 98 Difficulty: Hard AACSB: Analytic Skills

120. If you decided to interview members of your class with regard to issues relating to
the university and college life, you would have selected the ________ as a means
of sampling members of the total population.
a. simple random sample
b. stratified random sample
c. cluster (area) sample
d. convenience sample
e. quota sample
Answer: d Page: 100 Difficulty: Medium AACSB: Analytic Skills

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 Chapter 4: Conducting Marketing Research and Forecasting Demand

121. The main drawback to the ________ is that the interviews must be short and not
too personal.
a. mail questionnaire
b. personal interview
c. online interview
d. secondary interview
e. telephone interview
Answer: e Page: 101 Difficulty: Medium AACSB: Reflective Thinking

122. If a marketing researcher were to use careful observation, hypotheses, prediction,

and testing to ensure that his or her marketing research efforts were of the highest
quality, the researcher would have then used ________ characteristic of good
marketing research to assist in the research effort.
a. research creativity
b. scientific method
c. ethical marketing
d. multiple methods
e. interdependence of models and data
Answer: b Page: 104 Difficulty: Medium AACSB: Reflective Thinking

123. Some marketing managers view marketing research as little more than a clerical
activity and treat it as such. This is a reflection of which of the barriers that must
be overcome if successful marketing research is to occur?
a. Uneven caliber of researchers
b. Poor framing of the problem
c. Erroneous findings
d. Personality differences
e. Presentation differences
Answer: a Page: 104 Difficulty: Easy AACSB: Reflective Thinking

124. The most important task of a marketing researcher is to ________.

a. identify consumer insights
b. assess the efficiency and effectiveness of marketing activities
c. develop new product offerings
d. identify potential market openings for the firm to exploit
e. all of the above
Answer: b Page: 106 Difficulty: Hard AACSB: Reflective Thinking

125. 3M tracks the proportion of sales resulting from its recent innovations. This
measurement is an example of a ________.
a. consumer insight
b. target market
c. secondary information search
d. marketing metric
e. sales forecast
Answer: d Page: 106 Difficulty: Easy AACSB: Analytic Skills

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Part 2: Capturing Marketing Insights

126. Jeanine would like to own a Mercedes but is unable to afford to buy one at this
time. Jeanine is part of the ________ for this product.
a. potential market
b. available market
c. target market
d. projected market
e. penetrated market
Answer: a Page: 110 Difficulty: Medium AACSB: Analytic Skills

127. Jason is examining a recent breakdown of his company’s West Coast market. The
terms in the report are somewhat confusing because there was no attached
vocabulary key to assist the uninformed reader. Jason is looking for the set of
consumers who are currently buying his company’s products. Which of the
following terms will assist him in finding the right column for his data query?
a. Potential market
b. Bilateral market
c. Available market
d. Target market
e. Penetrated market
Answer: e Page: 110 Difficulty: Medium

128. Barry’s company sells in a nonexpansible market. As a marketer, Barry should

focus on ________.
a. increasing marketing expenditure to increase the overall market size
b. more effectively allocating his budget to increase demand for his company’s
product category
c. decreasing the marketing sensitivity of demand for his product
d. improving his company’s market share by attracting competitors’ customers
e. all of the above
Answer: d Page: 111 Difficulty: Medium AACSB: Reflective Thinking

129. A high market-penetration index suggests that ________.

a. a substantial growth potential exists for all firms in the market
b. there will be increased costs of attracting the few remaining prospects
c. mistakes have been made in selecting the correct promotional alternatives
d. the price of the product or service is too high with respect to competition
e. it would be great time to expand distribution outlets
Answer: b Page: 111 Difficulty: Hard AACSB: Analytic Skills

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 Chapter 4: Conducting Marketing Research and Forecasting Demand

130. A marketing research firm intends to ask consumers a question that reads “Do you
intend to buy a automobile within the next six months?” Consumers could
respond in several ways including no chance, slight possibility, fair possibility,
good possibility, high possibility, and certain. Which of the following terms most
accurately categorizes the type of scale that the marketing researcher will want to
use in the research effort?
a. Buying ratio scale
b. Behavioral scale
c. Attitude scale
d. Purchase probability scale
e. Market-test scale
Answer: d Page: 116 Difficulty: Medium AACSB: Analytic Skills

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