Sample Mid-term (covering Chapter 1-4 and 6-8)
Part I Multiple Choice questions (1 point × 50)
Examples would be like:
1. You are attending college to obtain a diploma in Business Administration. In
return for your time, energy and tuition fees you receive a series of courses that teach you
about modern business and at the end a certificate that recognizes your attainment and
effort. This is an example of:
A) not-for-profit marketing.
B) an exchange.
C) a barter transaction.
D) educational marketing.
E) a reciprocal transaction.
2. A product's ______ is the image it projects to consumers relative to competitive
products and other products marketed by the same company.
C) marketing mix
3. Buyers typically experience some post-purchase anxieties in all but routine purchases.
This state of anxiety is known as cognitive dissonance and can be expected to increase if:
A) the length of the distribution channel increases.
B) the relative attractiveness of the unselected alternatives decreases.
C) the relative importance of the purchase increases.
D) the price elasticity increases.
E) any of the above occur.
Procter & Gamble was once the epitome of a mass marketer with innovative but
utilitarian products. Today P&G makes different brands of laundry detergent and targets
each brand to a specific target market. While people still use detergent to get their clothes
clean, they also want other things, such as economy, bleaching, power, fabric softening,
fresh smell, strength or mildness, and lots of suds. The ten brands that P&G
manufactures are Tide, Cheer, Gain, Dash, Bold 3, Ivory Snow, Dreft, Oxydol, Ena, and
Solo. The P&G brands control more than 50 percent of the detergent market.
Dreft detergent is formulated for baby's diapers and clothes. To which of the
demographic factors does the detergent appeal?
B) social class
C) usage rate
D) family life cycle
E) income distribution
Type: Case and Application
Part II Short Questions and Short Essays (50 points in total)
Certain questions would be like the following types:
A group of engineering students from University of Toronto have come up with the
following idea – an Anti-auto Theft Fingerprint Scanner System. The system is to be
installed inside the vehicle. There is a CPU that can memorize and save the owner’s
fingerprint in the database. Once the device is installed in a car, the engine will start only
if the fingerprint received by the scanner matches with the one(s) saved in the database.
They plan to set up a start-up company to market this product, and would like to
introduce this product in Canada next year.
They have gathered the following information.
1. The vehicle theft rate is increasing every year. For instance, since 1991, motor
vehicle theft rates have tripled in Regina, Saskatchewan, and more than
quadrupled in Winnipeg, Manitoba.
2. The number of thefts occurs in Ontario is 50,067 in 2001.
3. In 2001, 24% of stolen vehicles were not recovered; 69% of recovered vehicles
had suffered damage; 4% had been completely destroyed.
4. The auto-theft crime clearance rate is only 12.2% in 2001.
5. Other anti-auto theft devices available are steering wheel locks, gearshift locks,
hood locks, alarms and engine immobilizer system.
6. Experienced thieves can usually destroy a lock in 2-5 minutes.
7. Alarm is very sensitive to external environmental changes. Since beeping has
occurred very frequently, people gradually do not take the beeping seriously.
8. Engine immobilizer system has a tiny transponder embedded in the key sends a
personal identification code to the engine control computer. Unless the system
reads the proper code, the computer will not enable the ignition and fuel injection,
thus immobilizing the vehicle. This system is very effective, but also expensive.
The price is around CAN$1,000 excluding installation fee. An extra key costs
9. The price range for a lock is around CAN$60-100.
10. The average price of alarm system is around CAN$500, excluding installation fee.
11. The cost of producing an anti-auto theft fingerprint scanner system is CAN$350.
Although the engineering students are very bright, they know very little about principles
of marketing. They need your help! You have been asked to
(a) (12 points) develop a SWOT analysis, and
(b) (8 points) suggest how to do Segmentation, Targeting and Positioning,
for their Anti-auto Theft Fingerprint Scanner System.
Answer to Q.1:
Anti-auto theft fingerprint scanner system
SWOT analysis (Total 12 points)
Strengths (5 points)
- The fingerprint scanner system is more effective than locks as it cuts off its
connection with ignition.
- Since one’s fingerprint is unique, it is technically very difficult for a thief to
- It is very convenient as the owner does not need to carry an extra key. Unlike a
lock, the owner does not need to worry about where to put it after taking it off.
- The effectiveness is comparable to engine immobilizer system. But its cost is
more reasonable. The cost of an engine immobilizer system is at least $1,200, but
the fingerprint scanner system is simply $350.
- Also there is no risk of losing a key. Note that the cost of getting an extra key for
an engine immobilizer system costs $200.
Weaknesses (2 points)
- In case the system breaks down, it may be difficult or costly for technicians to
reach the customer immediately to fix the problem promptly. This might bring
inconvenience for customers.
- Our product and brand is new to the market, meaning that people might not know
if our product and our company are reliable or not. The lack of brand recognition
might affect our sales at the early stage of our operation.
Opportunities (2 points)
- Data show that there is an increasing rate of car theft. Before our product made
sufficient impact on the auto theft rate, we expect more car users are willing to
install the fingerprint scanner system to protect their vehicles.
- This product is very innovative. Moreover, North America, and the rest of the
world automobile market is huge. This enables our business to grow in the future
for many years.
Threats (3 points)
- Note that our product acts as an option to car purchaser. In case of economic
downturn, the demand for the product might fall as people have fewer
- Like most of the high tech products, the cost of engine immobilizer might drop
significantly later. If this happens, it will induce an intensive competition.
- Fingerprint Scanner System is available elsewhere (though not for anti-theft in
vehicle). Other competitors might be able to produce similar products later.
STP (Total 8 points)
- One can segment potential customers as business users (e.g. car rental companies) and
private users. (1 point)
- Among non-business users, one can segment them into high-end users (i.e., luxury car
owners) and low-end users (i.e., non-luxury car owners). (1 point)
- The nature of the product suggests that it is more suitable for private users. (1 point)
- In the case of car rental companies, installation of our product brings them
inconvenience to manage business, since their cars change hand too frequently. (1 point)
- Regarding private users, luxury car owners are often equipped with effectual anti-theft system. So we expect our product is not in great need for luxury car owners and buyers. (1 point)
- The non-luxury car owners, however, usually do not have an effective anti-theft device and are usually price sensitive. (1 point)
- We therefore decide to choose the non-luxury car owners and buyers as our target segment. (1 point)
- We will position our product as an anti-theft device that is more effective and convenience than locks. However, it will cost more than locks but significantly less than engine immobilizer. (1 point)
(a) (4 points) Psychologists generally agree that motives can be grouped in two categories. What are these two categories?
(b) (10 points) A refinement of these two categories is Maslow’s hierarchy of five levels of needs. Explain each level carefully.
Answer to Q.2
(Total 2 points)
Two categories are:
- Needs aroused from physiological states of tension (such as the need for sleep) (1 point). - Needs aroused from psychological states of tension (such as the need for affection and self-respect) (1 point).
(Total 12 points)
Maslow’s hierarchy of needs is a needs structure consisting of five levels and organized according to the order in which people seek need gratification.
The five levels are
SELF-ACTUALIZATION (1 point)
Needs for self-fulfillment (1 point)
ESTEEM (1 point)
Needs for self-respect, reputation, prestige, and status (1 point)
BELONGING AND LOVE (1point)
Needs for affection, belonging to a group, and acceptance (1 point)
SAFETY (1 point)
Needs for security, protection, and order (1 point)
PHYSIOLOGICAL (1 point)
Needs for food, drink, sex, and shelter (1 point)
(1 point for the correct order of the five levels). The hierarchy indicates that the majority
of needs on a particular level must be reasonably well satisfied before a person is
motivated at the next higher level (1 point).
Discuss what are the advantages and disadvantages of delighting customer, compared to
simply satisfying them. (Total 8 points)
Answers to Q3:
Customer satisfaction is the degree to which you meet customer expectation. Customer
delight is about exceeding customer expectation to a large degree, more like a pleasant
surprise. (2 points)
Compared to satisfaction, customer delight could stimulate word of mouth, increase
customer’s emotional attachment to company, and increase loyalty and repurchase
intentions. (3 points)
However, the disadvantage of customer delight could be raise the level of customer
expectation, making it hard to delight customer next time. An increase in costs, extra
training for staff, etc. (3 points)