MCQ Self
MCQ Self
MCQ Self
What would be the most suitable pricing objectives for Company CDE to combat the above
problems?
Select one:
a. Current profit maximisation
b. Market share leadership
c. Survival
Companies pursue survival as their major objective if they are plagued with overcapacity, intense
competition, or changing consumer wants. As long as prices cover variable costs and some fixed costs,
the company stays in business. Survival is a short-run objective; in the long run, the firm must learn how
to add value or face extinction. Refer sub-topic 5.1.1 Internal Factor
2. Tesco Hypermarket assumes that majority of consumers are price sensitive. Therefore, it
priced its products at the lowest level possible with the hope of generating higher sales
volume. It believes higher sales volume will in turn lead to lower unit costs and higher
long-run profit.
With the above conditions, what would be the most suitable pricing objective for Tesco
Hypermarket?
Select one:
a. Market share leadership
b. Current profit maximisation
c. Product quality leadership
Companies pursue product quality leadership as their major pricing objective if they aim to build high
quality image and priced their products higher than competitors. They are generally active in research
and development activities. Nevertheless, these are not reflected in the question. Refer to sub-topic
5.1.1 Internal Factors. In this case, Tesco. is likely to adopted market share leadership as its pricing
objective by setting a price that will maximise its market share. It believes that a higher sales volume will
lead to lower unit costs and higher long-run profit. Thus, it sets the lowest possible price to capture the
biggest market share, assuming the market is price-sensitive.
3. Which of the following scenario will likely make the demand to be price elastic?
Select one:
a. Buyers have many alternatives and direct substitutes for the desired product
b. Buyers think a higher price is justified by quality differences
c. Buyers can use normal inflation to explain the price increase
If there are many alternatives and direct substitutes for the products available in market, consumers will
be able to switch brands easily. In such a situation, a small price increase could lead to a relatively large
decline in demand. In other words, the demand is said to be price elastic. Refer to 5.2 Pricing Policies
4. A watch manufacturer incurs a variable cost of RM10 per watch and fixed costs of
RM400,000.
At what price should the manufacturer charge for each of the 50,000 watches it expects to sell in
order to earn a 25 percent markup on selling price?
Select one:
a. RM18.0
b. RM24.0
c. RM22.5
Variable cost (VC) = RM10; Fixed cost (FC)= RM400,000; Markup (M) = 25%; Total sales (TS) = 50,000.
The cost per unit of watch = VC + (FC / TS) = 10 + (400,000 / 50,000) = 18
Product price = Unit cost / (1 - % of markup or desired return on sales) = 18 / (1 – 0.25) = 24. Refer sub-
topic 5.2 Pricing Policies
5. Legitimately, iphone is only available for sale at Maxis outlets.
Select one:
a. Exclusive distribution
b. Selective distribution
c. Intensive distribution
Exclusive distribution means severely limiting the number of intermediaries. In the case of iPhone in
Malaysia, legitimately it is only available for sale in Maxis outlets. Clearly, exclusive distribution has
been adopted by Apple, the producer of iPhone, to maintain control over the service level and to
maintain the prestige image quality of iPhone. Refer 6.2.1 Channel Design System.
6. For which of the following products would its manufacturer most likely to use exclusive
distribution?
Select one:
a. Infant milk powder
b. Wardrobe
c. Expensive perfume
Exclusive distribution means severely limiting the number of intermediaries in order to maintain control
over the service level and to maintain the prestige image quality of product. It is more appropriate for
expensive and branded products such as branded clothes, expensive perfume and new car. Refer 6.2.1
Channel Design System.
7. What method of distribution would typically be adopted by a producer of convenience
goods?
Select one:
a. Selective distribution
b. Intensive distribution
c. Restrictive distribution
Intensive distribution consists of the manufacturer placing the goods or services in as many as possible.
It is generally used for items such as tobacco products, snack foods and soap, products for which the
consumer requires a great deal of location convenience. In the case of convenience goods producers,
intensive distribution would normally be the best method of distribution. Refer 6.2.1 Channel Design
System.
8. A large chain of bookstore requests its franchisee to carry at least 1000 book titles at any
one time. If the franchisee does not follow the requirement as written in franchise
agreement, a penalty of RM5,000 will be imposed.
What is the most likely channel power exercised by the franchisor in the above case?
Select one:
a. Legitimate
b. Reward
c. Referent
Legitimate power means manufacturer requests a behaviour that is warranted under the contract as per
mentioned in the above question statement. The franchisor has the legitimate right to request its
franchisee to carry a certain number of book titles as long as it is written in the franchise agreement.
Refer to sub-topic 6.3 Channel Management Decisions.
9. What is the term that describe any paid form of nonpersonal promotion of ideas, goods,
or services where the originator of the promotion is known?
Select one:
a. Sales promotion
b. Personal selling
c. Advertising
Personel selling is a direct representation by the company’s sales force to the customers to obtain sales
and build relationships between each other. It is focused on the end users and it is done either face-to-
face or through the telephone. Refer to sub-topic 7.1 Marketing Communication Mix. The correct
answer should be advertising. Advertising means any form of non-personel presentation paid by a
sponsor to promote ideas, organisations or products, through various forms of media such as television,
radio, newspaper and magazines, advertising boards, and the internet. In most of the circumstances, the
sponsor or originator is known to the target audience
10. In January 2010, Toyota recalled eight car models from the market in order to solve a
potential accelerator pedal problem.
What would be the most suitable communication tools for Toyota in order to minimise the
negative impacts of the above problem?
Select one:
a. Personal selling
b. Direct marketing
c. Public relations
Direct marketing is a form of marketing communication that connects the marketer with the target
consumers to obtain instant feedback. It uses telephone, mail, fax, email, the Internet and other
communication tolls to connect the marketer with a specific consumer base. It is particularly useful in
creating a good relationship with company’s customers. Refer to sub-topic 7.1 Marketing
Communication Mix. The correct answer should be public relations. Public relations is the activities or
efforts by a company to (i) build a healthy and mutually beneficial relationship with the public, (ii) obtain
good publicity, (iii) build positive corporate image and keep negative stories, incidents or rumours away
from the media, (iv) obtain opinions, behaviour, and the public’s perception towards the company and
its products. In this case, Toyota should use public relation to minimise the negative impacts of the
incidents
11. What marketing appeal should be utilised by a dairy producer whose communication
objective were to stimulate immediate consumers’ actions and purchases?
Select one:
a. The marketer should use personal selling
b. The marketer should emphasises its community service and worker friendly environment
in its public relations and advertising efforts
c. The marketer should emphasise its low price and offer sales promotions
If the communication objective is to stimulate immediate consumers’ actions and purchases, the
marketer should emphasise low price policy coupled with a great deal of sales promotion. The main
function of sales promotion is to encourage consumers to try or purchase certain product or service
during a particular promotion period. It consists of a diverse collection of incentive tools, mostly short
term, designed to stimulate quicker or greater purchase of particular products or services by consumers.
Among the promotional tools are samples, coupons, cash refund offers, prices off, premiums, prizes,
cross promotions. Refer to sub-topic 7.1 Marketing Communication Mix.
12. Shoe Z Sdn Bhd is a manufacturer of sport shoe. The company’s owner is preparing
promotional budget for next year.
What would be the promotional budgeting method used by Shoe Z Sdn Bhd if its prime concern
during the early phase of budgeting is the next year’s forecasted sales figure?
Select one:
a. Percentage-of-sales
b. Affordable
c. Competitive-parity
What promotional tools are the most effective when the buyer is in the awareness stage?
Select one:
a. Advertising and personal selling
b. Personal selling and sales promotion
c. Advertising and publicity
Incorrect. Promotional tools vary in effectiveness at different stages of buyer readiness. Advertising and
publicity lay the most important roles in the awareness building stage. Customer comprehension is
primarily affected by advertising and personal selling. Customer conviction is influenced mostly by
personal selling. Closing the sale / purchase is influenced mostly by personal selling and sales promotion.
Reordering is also affected mostly by personal selling and sales promotion, and somewhat by reminder
advertising. Refer Sub-topic 7.3.2 Determine the Communication Objective
14. When Apple introduced it new iPad in January 2010, it claimed the following in its
advertising message:
“Our most advanced technology in a magical and revolutionary device at an unbelievable price”.
What would be the most likely advertising objective adopted by Apple with reference to the
above advertising message?
Select one:
a. Persuasive
b. Descriptive
c. Reminder
Your answer is incorrect.
The correct answer is: Persuasive
There are only three major advertising objectives covered in the module, namely persuasive, reminder,
and informative advertising. Persuasive advertising aims to create liking, preference, conviction, and
purchase of a product or service as could be inferred from the Apple’s advertising message. Reminder
advertising aims to stimulate repeat purchase of products and services. Informative advertising aims to
create awareness and knowledge of new products or new features of existing products.
15. Assume you are advertising Poh Kong delicate, handcrafted jewelry to upscale women in
Klang Valley. The credibility and prestige of the medium in which the ad will be run are
extremely important for the success of your campaign.
Select one:
a. Magazines
b. Newspapers
c. Television
The benefit of using magazines are: it serves specific target market, long lifespan, high reproduction
quality, complete product information, has high credibility and prestige. Just right for the above Poh
Kong’s requirements as mentioned in the question. Refer to 8.1.3 Choosing the Advertising Strategy
16. What would be the most appropriate sales force structure for a cutlery firm with a limited
variety of products and a desire to give its sales representatives maximum accountability?
Select one:
a. Customer sales force structure
b. Territorial sales force structure
c. Product sales force structure
17. A plastics resin producer that has its salespeople specialised in selling to either toy
manufacturers, computer manufacturers, consumer-goods product manufacturers, or
automobile manufacturers.
What is the sales force structure adopted by the plastics resin producer in the above case?
Select one:
a. Product sales force structure
b. Customer sales force structure
c. Matrix sales force structure
Product sales force structure is more appropriate for companies that have various products in arranging
their sales personnel. Every sales personnel who is assigned to sell a product has to be knowledgeable
about the product. It is particularly warranted where the products are technically complex, highly
unrelated, or very numerous. Refer to sub-topic 9.2.2 Designing Sales Force Strategy and Structure. The
question statement fits the description of customer sales force structure. It requires companies to
specialise their sales force along industry or customer lines. Separate sales force can be set up for
different industries or different customers. It will be very useful when companies want to their sales
force to be very knowledgeable about specific customer needs and aim to build long term relationship
with customers.
18. What is the type of control particularly helpful in evaluating whether any product or
market activities should be reduced, expanded, or eliminated?
Select one:
a. Strategic marketing control
b. Annual-plan control
c. Profitability control
Strategic control is a comprehensive and systematic control system for the entire performance
attainment by all the units and activities. It aims to examine whether the company is pursuing its
best opportunities with respect to markets, products, and channels. Refer to sub-topic 10.2
Control Mechanism. Profitability control aims to examine where the company is making and
losing money. It examines the profitability of the following: product, territory, customer,
segment, trade channel, order size. In the context of this question, product profitability is
particularly helpful in evaluating whether any product or market activities should be reduced,
expanded or eliminated.
19. The current profit is lower for the ABBA Gift Company. As a result, its marketing
manager, Mr. Gan was instructed by management to improve sales force management
and to derive higher return from promotional budget.
As the consultant to ABBA, what is the type of controls that you would suggest to Mr. Gan to
achieve the above duties?
Select one:
a. Annual-plan control
b. Efficiency control
c. Profitability control
Profitability control aims to examine where the company is making and losing money. It examines the
profitability of the following: product, territory, customer, segment, trade channel, order size. Refer to
sub topic 10.2 Control Mechanism. Efficiency control is more relevant to the question requirement.
Efficiency control aims to evaluate and improve the spending efficiency and impact of marketing
expenditures. Its covers the efficiency of four major areas, namely sales force, advertising, sales
promotion and distribution. Specifically, Mr. Gan’s requirements would be adequately satisfied with the
efficiency control in the area of sales force and sales promotion.
20. There are 34 competitors in the recreational vehicle (RV) market. WW is the leading
manufacturer in the industry. Its sales expressed as a percentage of total market sales is
19 percent.
Select one:
a. Served market share
b. Served market
c. Overall market share
Served market share is its sales expressed as a percentage of the total sales to its served market. Refer
to sub-topic 10.2 Control Mechanism. The correct answer should be overall market share where the
company’s sales expressed as a percentage of the total sales to its market overall sales.