Introduction to Marketing: Test Review

Key facts

Where marks get lost

• ×Treating marketing and advertising as the same thing — promotion is only one of the 4 Ps; deciding the product, price, and place are marketing decisions too. (What Is Marketing?)
• ×Saying marketers "create needs" — needs such as food and belonging already exist; marketing shapes wants, the specific products people choose to meet those needs. (What Is Marketing?)
• ×Assuming the best value always means the lowest price — value compares all benefits with all costs, including time and effort, so a pricier option can be better value. (What Is Marketing?)
• ×Describing the marketing concept as "selling as much as possible" — that is the sales orientation; the marketing concept starts with customer needs. (What Is Marketing?)
• ×Thinking each era fully replaced the one before — the eras overlap, and some businesses today still think in production- or sales-era terms. (What Is Marketing?)
• ×Saying that marketing creates form utility. Production makes the product; marketing creates time, place, possession and information utility. (Marketing and the Economy: Utility, Supply and Demand)
• ×Confusing a movement along the demand curve with a shift. A change in the product's own price moves along the curve; a change in income, tastes or related prices shifts the whole curve. (Marketing and the Economy: Utility, Supply and Demand)
• ×Calculating percentage change from the new value instead of the original value, or putting the price change on top of the elasticity fraction instead of the bottom. (Marketing and the Economy: Utility, Supply and Demand)
• ×Classifying elasticity by the sign. PED is almost always negative; compare its absolute value with 1 to decide elastic or inelastic. (Marketing and the Economy: Utility, Supply and Demand)
• ×Assuming a price increase always raises revenue. When demand is elastic, the lost sales outweigh the higher price and total revenue falls. (Marketing and the Economy: Utility, Supply and Demand)
• ×Skipping post-purchase behaviour and assuming the process ends at the sale — for marketers, what happens after the sale decides whether the customer returns and what they tell others. (Consumer Behaviour)
• ×Placing Maslow's levels in the wrong order, especially swapping social and esteem — belonging (social) comes below respect and status (esteem). (Consumer Behaviour)
• ×Labelling an influence by the product instead of the cause — a friend's recommendation is a social influence, even if the product is a personal item. (Consumer Behaviour)
• ×Assuming every purchase follows all five steps with equal care — routine purchases like gum barely involve a search or comparison. (Consumer Behaviour)
• ×Thinking B2B only means huge corporations — a small bakery buying flour from a supplier is also a B2B purchase. (Consumer Behaviour)
• ×Treating CLV as one purchase. CLV covers the whole relationship: purchase value times frequency times years. (Customer Relationships, Loyalty and Service)
• ×Forgetting to subtract new customers when calculating retention rate, which makes retention look better than it really is. (Customer Relationships, Loyalty and Service)
• ×Counting passives as detractors, or averaging the 0 to 10 scores, when calculating NPS. NPS is percent promoters minus percent detractors. (Customer Relationships, Loyalty and Service)
• ×Thinking loyalty programs are only about giving away discounts. Their main value to the business is the customer data and the habit they build. (Customer Relationships, Loyalty and Service)
• ×Arguing with a complaining customer to prove the business was right. Service recovery puts keeping the relationship ahead of winning the argument. (Customer Relationships, Loyalty and Service)
• ×Mixing up psychographic and behavioural segmentation — values and lifestyle are psychographic; purchase frequency, loyalty, and benefits sought are behavioural. (Target Marketing and Positioning)
• ×Choosing "everyone" as the target market — a target market must be specific enough to design the product, price, and promotion around. (Target Marketing and Positioning)
• ×Assuming every empty spot on a positioning map is an opportunity — the gap might be empty because no customers want that combination. (Target Marketing and Positioning)
• ×Ignoring indirect competition — a movie theatre that watches only other theatres misses that streaming services compete for the same evening and the same dollars. (Target Marketing and Positioning)
• ×Forgetting to multiply by 100 when calculating market share, or dividing total market sales by company sales instead of the other way around. (Target Marketing and Positioning)
• ×Mixing up primary and secondary data — Statistics Canada data is secondary for a business because someone else collected it for another purpose, even if the business is using it for the first time. (Marketing Research)
• ×Treating a convenience sample (friends, classmates, people already in the store) as if it represents the whole population. (Marketing Research)
• ×Writing leading or double-barrelled survey questions, which produce results that look precise but are biased or impossible to interpret. (Marketing Research)
• ×Dividing the wrong way when calculating a conversion rate or a survey percentage — the part (conversions or responses) goes on top and the total (visitors or respondents) goes on the bottom. (Marketing Research)
• ×Assuming more visitors or more responses automatically means better results — a bigger number can hide a lower rate. (Marketing Research)
• ×Listing perishability as "the service goes bad." It means unused capacity cannot be stored and sold later, such as an empty seat on a flight that has left. (Marketing Services: The Extended Mix)
• ×Confusing people and process. People are the staff and customers involved; process is the sequence of steps and how smooth and fast they are. (Marketing Services: The Extended Mix)
• ×Treating physical evidence as decoration. For an intangible service, the space, uniforms, website and reviews are how customers judge quality before buying. (Marketing Services: The Extended Mix)
• ×Blaming front-line staff for every service failure. The gaps model shows many failures start with managers who did not research expectations or set realistic standards. (Marketing Services: The Extended Mix)
• ×Calculating capacity utilization with the wrong base, such as dividing by rooms instead of room-nights. Capacity available must cover the same time period as capacity sold. (Marketing Services: The Extended Mix)
• ×Assuming not-for-profits cannot earn more than they spend — they can have a surplus, but they use it for the mission instead of paying it to owners. (Not-for-Profit and Global Marketing)
• ×Treating donors and clients as the same target market — the people who pay a not-for-profit are often not the people it serves, so each needs its own message. (Not-for-Profit and Global Marketing)
• ×Choosing full standardization because it is cheaper without checking whether the product, name, or colours will offend or confuse the new market. (Not-for-Profit and Global Marketing)
• ×Relying on word-for-word translation of slogans instead of having native speakers check that the meaning and tone survive. (Not-for-Profit and Global Marketing)
• ×Forgetting that global marketing rules also apply at home — Canadian packaging generally needs English and French labelling. (Not-for-Profit and Global Marketing)

Practice test

24 questions from across the unit. Each one shows the lesson it comes from.

Endless drill

Fresh numbers every time, for the calculation questions in this unit.