The Marketing Mix: Test Review

Key facts

Where marks get lost

• ×Thinking "product" only means a physical item — services, events, and even the warranty and support that come with a good are all part of the product. (Products: Goods, Services, Events and the Product Life Cycle)
• ×Confusing perishability with food spoiling — for services it means unused capacity (an empty seat, an unbooked appointment) cannot be saved and sold later. (Products: Goods, Services, Events and the Product Life Cycle)
• ×Using an introduction-stage strategy in maturity, such as spending heavily to explain what the product is, when customers already know and need a reason to pick this brand over competitors. (Products: Goods, Services, Events and the Product Life Cycle)
• ×Assuming every product spends the same amount of time in each stage — fads can pass through the whole cycle in months, while staple products stay in maturity for decades. (Products: Goods, Services, Events and the Product Life Cycle)
• ×Believing decline means a product must be dropped immediately — a business may harvest remaining profit, cut costs, or reposition it for a new market. (Products: Goods, Services, Events and the Product Life Cycle)
• ×Treating a concept test as proof that people will buy. A concept test measures stated interest; only a test market or real sales show actual buying behaviour. (New Product Development, Product Mix and Packaging)
• ×Skipping the business analysis because customers liked the concept. A product people love can still lose money if costs are too high or the market is too small. (New Product Development, Product Mix and Packaging)
• ×Mixing up width and depth: width is the number of product lines, while depth is the number of versions (flavours, sizes) of one product. (New Product Development, Product Mix and Packaging)
• ×Saying every word on a Canadian label must be bilingual. Under the CPLA, the product identity and net quantity must be in English and French, but the dealer's name and address may be in either language. (New Product Development, Product Mix and Packaging)
• ×Assuming there is no warranty when nothing is written down. Implied warranties of acceptable quality and fitness for purpose still apply under provincial law. (New Product Development, Product Mix and Packaging)
• ×Thinking a brand is just a logo — the logo is one element; the brand is the whole set of names, symbols, colours and the expectations customers attach to them. (Branding)
• ×Assuming private-label products are always lower quality — many are made by outside manufacturers to similar standards, and they are cheaper mainly because the retailer skips heavy advertising. (Branding)
• ×Using different colours, fonts or logos on different platforms, which weakens recognition instead of building it. (Branding)
• ×Confusing brand equity with a company's profit or total assets — brand equity is the extra value customers place on the brand name itself. (Branding)
• ×Mixing up brand preference and brand insistence — a customer who switches when their brand is out of stock is only at preference. (Branding)
• ×Swapping the denominators — dividing the profit by the price when asked for markup, or by the cost when asked for margin. Markup is on cost; margin is on price. (Pricing: Strategies, Markup, Margin and Break-Even)
• ×Rounding break-even down: 227.27 units becomes 228, because 227 units still leaves a small loss. (Pricing: Strategies, Markup, Margin and Break-Even)
• ×Dividing fixed costs by the selling price instead of by the contribution margin, which ignores the variable cost of each unit and makes break-even look far too low. (Pricing: Strategies, Markup, Margin and Break-Even)
• ×Adding two discounts together — 20% off and then 10% off is 28% off in total, not 30%. (Pricing: Strategies, Markup, Margin and Break-Even)
• ×Treating HST as revenue or calculating markup on the HST-included price; HST belongs to the government and is added after the business sets its price. (Pricing: Strategies, Markup, Margin and Break-Even)
• ×Thinking "place" only means the store's street address — it covers the whole channel, the number of outlets, and the logistics that move the product. (Place: Distribution Channels and Logistics)
• ×Assuming cutting out intermediaries automatically lowers the price — someone still has to store, ship and sell the product, and those costs do not disappear. (Place: Distribution Channels and Logistics)
• ×Mixing up selective and exclusive distribution: selective means a limited number of chosen outlets; exclusive means one or very few in an area. (Place: Distribution Channels and Logistics)
• ×Comparing online and in-store sales without subtracting shipping, payment fees and return costs from the online price. (Place: Distribution Channels and Logistics)
• ×Treating an agent like a wholesaler — an agent connects buyers and sellers for a commission but never takes ownership of the goods. (Place: Distribution Channels and Logistics)
• ×Calling a wholesaler a retailer because it has a store. Who the customer is decides it: a retailer sells to final consumers; a wholesaler sells mainly to businesses. (Retailing and Wholesaling)
• ×Working backward along a markup chain by subtracting the percentage. To undo a 50% markup, divide by 1.50; 90 minus 50% would give 45, not the correct 60. (Retailing and Wholesaling)
• ×Mixing up markup on cost and margin on selling price. The same dollar markup is a bigger percentage of cost than of selling price. (Retailing and Wholesaling)
• ×Adding HST before the retailer's markup, or adding it at every step of the chain. HST is added to the final price the consumer pays. (Retailing and Wholesaling)
• ×Choosing a location only because rent is cheap. A cheap site with no target customers nearby, no visibility or no parking costs more in lost sales than it saves. (Retailing and Wholesaling)
• ×Using "advertising" and "promotion" as if they mean the same thing — advertising is only one tool inside the promotional mix. (Promotion: The Promotional Mix)
• ×Confusing public relations with advertising: advertising is paid and controlled by the business; PR coverage is earned and not controlled. (Promotion: The Promotional Mix)
• ×Forgetting the × 1000 in CPM, or dividing impressions by cost instead of cost by impressions. (Promotion: The Promotional Mix)
• ×Calculating ROI as revenue ÷ cost instead of (revenue − cost) ÷ cost. For a $2,500 campaign that brings in $9,000, that mistake gives 360% instead of the correct 260%. (Promotion: The Promotional Mix)
• ×Picking tools because they are popular rather than because the target market actually uses them. (Promotion: The Promotional Mix)
• ×Writing reach as a decimal in the GRP formula. 40% reach times 3 frequency is 120 GRPs, not 1.2. (Advertising: Media Selection and the Creative Message)
• ×Confusing reach with impressions. Reach counts different people; impressions count every exposure, so one person seeing an ad five times is one reached person and five impressions. (Advertising: Media Selection and the Creative Message)
• ×Choosing the medium with the lowest cost per point without checking whether it reaches the target audience at a useful moment. (Advertising: Media Selection and the Creative Message)
• ×Writing a creative brief with several "key" messages. An ad that tries to say five things usually communicates none; pick one. (Advertising: Media Selection and the Creative Message)
• ×Using a fear appeal without a clear solution. If people see danger but no action they can take, they tend to look away instead of changing behaviour. (Advertising: Media Selection and the Creative Message)
• ×Jumping straight to the presentation without asking questions. A presentation that ignores the customer's actual needs sounds like a script and loses the sale. (Personal Selling, Sales Promotion and Public Relations)
• ×Treating an objection as a "no" and giving up, or arguing to prove the customer wrong. Objections are requests for more information. (Personal Selling, Sales Promotion and Public Relations)
• ×Calculating coupon cost with face value only. Handling fees and printing and distribution costs must be added, and some redeemers would have bought anyway. (Personal Selling, Sales Promotion and Public Relations)
• ×Mixing up consumer and trade promotions: a slotting fee or a display allowance is aimed at the retailer, not at the shopper. (Personal Selling, Sales Promotion and Public Relations)
• ×Saying "no comment" or hiding information in a crisis. Silence looks like guilt and lets rumours set the story. (Personal Selling, Sales Promotion and Public Relations)
• ×Rounding the break-even number of tickets down. If break-even is 333.3, selling 333 tickets still leaves a loss, so round up to 334. (Event Marketing, Sponsorship and Experiential Marketing)
• ×Dividing fixed costs by the ticket price instead of by price minus variable cost per attendee. (Event Marketing, Sponsorship and Experiential Marketing)
• ×Thinking a sponsorship ends with the logo on a banner. Without activation, the sponsor gets little value and is unlikely to renew. (Event Marketing, Sponsorship and Experiential Marketing)
• ×Treating risk planning as optional for small events. Weather, injuries and alcohol can hit a fall fair as hard as a stadium concert. (Event Marketing, Sponsorship and Experiential Marketing)
• ×Measuring an experiential campaign only by how many people showed up, without tracking sign-ups, social sharing or sales linked to the event. (Event Marketing, Sponsorship and Experiential Marketing)

Practice test

20 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.