MAR 100/MECA  - MIDTERM EXAM REVIEW  - fall 2018

Multiple Choice
Identify the choice that best completes the statement or answers the question.

____	1.	A routine purchasing situation in which the purchaser is not looking for new information or other suppliers is called a:
a. | synergistic buy.
b. | modified rebuy.
c. | make-or-buy.
d. | value buy.
e. | straight rebuy.

____	2.	_____ is the segmenting of markets based on the region of the country or the world, market size, market density (number of people within a certain unit of land), or climate.
a. | PRIZM segmentation
b. | Geodemographic segmentation
c. | Geographic segmentation
d. | Demonstrated regionalization
e. | Community segmentation

____	3.	The first step in creating the global marketing mix is to:
a. | select the method of promotion.
b. | develop a thorough understanding of the global target market.
c. | create a new product.
d. | decide whether product modification is necessary.
e. | set pricing policies.

____	4.	Businesses that buy finished goods and sell them for a profit are called:
a. | business facilitators.
b. | distribution networks.
c. | inventory carriers.
d. | resellers.
e. | producers.

____	5.	Miller Lite’s long-running “Great Taste...Less Filling!” advertising campaign was ranked by Advertising Age magazine as the 8th-best advertising campaign in history. Miller Lite was using _____ segmentation in this ad campaign.
a. | demographics
b. | benefit
c. | usage rate
d. | psychographics
e. | geographic

____	6.	Walmart realizes a _____ using its relationships with suppliers to give customers low prices and good customer service.
a. | niche competitive advantage
b. | cost competitive advantage
c. | brand name strategy
d. | marketing competitive advantage
e. | synergistic competitive advantage

____	7.	Income, ethnic background, gender, and age are all examples of _____ segmentation bases.
a. | geodemographic
b. | organizational
c. | socioeconomic
d. | demographic
e. | psychographic

____	8.	The processes consumers use when making purchase decisions are called:
a. | perceptual mapping.
b. | marketing.
c. | database mining.
d. | consumer behavior.
e. | consumerism.

____	9.	Which of the following is a type of strategic alternative that tries to increase market share among existing customers?
a. | Product penetration
b. | Market penetration
c. | Divestment
d. | Vertical integration
e. | Horizontal integration

____	10.	H&R Block launched a $100 million marketing campaign to parlay the company’s intimate knowledge of 20 million customers’ finances into other services like mortgages and investment advice. Block has great brand recognition, but consumers only care about it four months out of the year. H&R Block is attempting to _____ itself to make people think of it as a company offering services year-round.
a. | undifferentiate
b. | reposition
c. | reengineer
d. | demarket
e. | niche

____	11.	Alanna is looking into purchasing a scooter as gas prices continue to rise. She needs a reasonably priced, comfortable, and safe scooter with room to store her books. She is not familiar with scooters, and this is a major purchase for her. The purchase will probably involve:
a. | low-involvement problem solving
b. | dedicated cognitive behavior
c. | low-involvement decision making
d. | extensive decision making
e. | limited decision making

____	12.	According to the text, another commonly used name for producers is:
a. | product providers.
b. | fabricators.
c. | original equipment manufacturers.
d. | installers.
e. | component networks.

____	13.	When a firm serves two or more well-defined market segments with a distinct marketing mix for each, it is using a(n) _____ targeting strategy.
a. | pluralistic
b. | undifferentiated
c. | concentrated
d. | multisegment
e. | niche

____	14.	The purpose of market segmentation is to:
a. | develop a generalized definition of the market as a whole
b. | reduce the market down to a size the firm can handle
c. | divide the market into equal size and profit regions for sales territories
d. | enable the marketer to tailor marketing mixes to meet the needs of one or more specific groups
e. | group a large number of markets together, enabling a company to serve them simultaneously

____	15.	Finished items ready for assembly, or products that need very little processing before they become a part of some other product, are called:
a. | processed materials.
b. | accessory equipment.
c. | supplies.
d. | raw materials.
e. | component parts.

____	16.	A(n) _____ is a defined group that managers feel is most likely to buy a firm’s product.
a. | buying center
b. | target market
c. | consumer cluster
d. | demographic sample
e. | aggregated unit

____	17.	When Procter & Gamble (P&G) introduced Liquid Tide to a new segment, consumers in the traditional powdered detergent segment switched to the liquid product. Rather than real sales growth, P&G simply experienced the shifting of existing customers to a new product. This exemplifies a drawback of multisegment targeting strategy called:
a. | selective perception
b. | demarketing
c. | market repositioning
d. | cannibalization
e. | undifferentiation

____	18.	Basketball is played nearly everywhere in the world and is an easily understood sport. The National Basketball Association (NBA) finals reached more than 600 million televisions in 195 countries. From this information, you should be able to infer that the NBA is:
a. | implementing global marketing standardization
b. | practicing global marketing
c. | implementing standard international marketing
d. | developing international selling schemes
e. | supplementing its foreign vision

____	19.	The study of people’s vital statistics, such as age, race and ethnicity, and location, is called:
a. | psychometrics
b. | cultural sociology
c. | ecology
d. | demography
e. | ethnography

____	20.	A dentist hired a janitorial service to clean her office every evening. The janitorial service provided the dentist with:
a. | OEMs.
b. | business services.
c. | accessory services.
d. | service supplies.
e. | processed services.

____	21.	How can marketers reduce consumers’ cognitive dissonance?
a. | Change the product
b. | Avoid contradictory information
c. | Offer sales promotions
d. | Ignore it
e. | Offer guarantees

____	22.	After a need or want is recognized, a consumer may search for information about the various alternatives available to satisfy it. This occurs during which part of the consumer decision-making process?
a. | Consideration stage
b. | Cognitive dissonance
c. | Information search
d. | Evaluation of alternatives
e. | Product identification

____	23.	A group of brands resulting from an information search, from which a buyer can choose is referred to as the buyer’s:
a. | justifiable set
b. | inert set
c. | evoked set
d. | primary set
e. | complete set

____	24.	A(n) _____ strategy entails selecting one segment of a market to target and focuses on understanding the needs, motives, and satisfactions of the members of that segment, as well as on developing a highly specialized marketing mix.
a. | concentrated targeting
b. | undifferentiated targeting
c. | market development
d. | product development
e. | universal product

____	25.	Technol Medical Products makes specialty face masks to shield healthcare workers from infection. Because it focuses on this narrow market, it is able to outsell its primary competitors––3M and Johnson & Johnson. Technol has a(n):
a. | demarketing focus
b. | niche competitive advantage
c. | aggregated positioning strategy
d. | cost competitive advantage
e. | heterogeneous target marketing strategy

____	26.	_____ is a legal process whereby a firm agrees to let another firm use its manufacturing process, trademarks, patents, trade secrets, or other proprietary knowledge in return for a fee or royalty.
a. | A joint venture
b. | A contract manufacturing arrangement
c. | A principal-agent agreement
d. | Divestment
e. | Licensing

____	27.	Making sure products are available when and where customers want them is the job of which element of the marketing mix?
a. | Advertising strategies
b. | Promotion strategies
c. | Product strategies
d. | Distribution strategies
e. | Production strategies

____	28.	What does the 80/20 principle propose?
a. | Roughly 20 percent of a firm’s customers purchase 80 percent of the sales volume of the product.
b. | Roughly 80 percent of a firm’s customers are repeat business.
c. | Roughly 50 percent of a firm’s customers purchase 80 percent of the sales volume of the product.
d. | Roughly 80 percent of the profit comes from 20 percent of the sales.
e. | Sales are equally divided among heavy, medium, and light users, but they all need slightly different products.

____	29.	_____ are consumable, inexpensive, and often standardized items that do not become part of the final product.
a. | Processed materials
b. | Accessory equipment
c. | Supplies
d. | Provisions
e. | Replacement parts

____	30.	Redbook magazine targets what it calls “Redbook jugglers,” defined as 25- to 44-year-old women who must juggle family, husband, and job. According to a Redbook ad, “She’s the product of the ‘me generation,’ the thirty-something woman who balances home, family, and career—more than any generation before her, she refuses to put her pleasures aside. She’s old enough to know what she wants, and young enough to get it.” This is an example of _____ segmentation.
a. | benefit desired and demographic
b. | demographic and usage rate
c. | geodemographic and benefit desired
d. | demographic and psychographic
e. | benefit desired and usage rate

____	31.	The company that manufactures Molson beer, which is typically consumed by males, launched an alcoholic lemonade beverage to attract more females. This launch of a new product to attract a new market for Molson’s products is an illustration of a _____ strategy.
a. | market development
b. | product development
c. | product penetration
d. | diversification
e. | market penetration

____	32.	_____ is a method that clusters potential customers into neighborhood lifestyle categories and is a combination of geographic, demographic, and lifestyle segmentations.
a. | Geodemographic segmentation
b. | Sociocultural clustering
c. | Microsegmentation
d. | Lifestyle segmentation
e. | Acculturation

____	33.	A product is defined as a business product rather than a consumer good on the basis of its:
a. | price.
b. | intended use.
c. | tangible attributes.
d. | distribution method.
e. | physical characteristics.

____	34.	Business buyers use a variety of criteria to evaluate alternative products and suppliers. The three most important criteria, in order of importance, are:
a. | service, quality, and reputation.
b. | price, sales support, and service.
c. | reputation, price, and capability.
d. | price, delivery time, and product reliability.
e. | quality, service, and price.

____	35.	The Southern Company is the largest provider of utilities in the southeastern United States. It has also been accused of being the biggest source of industrial air pollution in the area. Southern is trying to change consumers’ perceptions of the company by sponsoring a series of television programs on how to preserve our environment. The Southern Company is hoping the programming will lead to:
a. | undifferentiated targeting
b. | repositioning
c. | reengineering
d. | one-to-one marketing
e. | demarketing

____	36.	Which target marketing strategy views the market as one big market with no individual segments and thus uses a single marketing mix?
a. | Niche
b. | Uniform
c. | Undifferentiated
d. | Multisegmented
e. | Concentrated

____	37.	With a _____, a firm produces standardized products to be sold the same way all over the world.
a. | synergistic approach to marketing
b. | culturally based marketing strategy
c. | traditional marketing strategy
d. | product extension approach
e. | global marketing standardization approach

____	38.	A statement of the firm’s business based on a careful analysis of benefits sought by present and potential customers and an analysis of existing and anticipated environmental conditions is known as a(n):
a. | business audit
b. | environmental focus
c. | mission statement
d. | marketing plan
e. | portfolio matrix

____	39.	The type of decision making that requires a moderate amount of time for gathering information and deliberating about an unfamiliar brand in a familiar product category is referred to as:
a. | uninvolved decision making
b. | affective decision making
c. | routine response behavior
d. | limited decision making
e. | extensive decision making

____	40.	Products that have had some processing are used directly in the production of other products, and do not retain their identity in the final product are called:
a. | component parts.
b. | raw materials.
c. | replacement parts.
d. | supplies.
e. | processed materials.

____	41.	Frequent-flyer programs are an example of financial incentives to customers in exchange for their continuing patronage. After flying a certain number of miles or flying a specified number of times, the frequent-flyer program participant earns a free flight or some other award such as free lodging. Airlines that use frequent-flyer programs are practicing:
a. | transformational marketing
b. | relationship marketing
c. | commitment selling
d. | transaction marketing
e. | marketing engineering

____	42.	Product positioning is the process of:
a. | finding the correct location for retail outlets to sell a product category.
b. | pricing the product to be at a competitive level with other brands on the market.
c. | creating the desired image of the firm’s product.
d. | competing with competitors’ products in the retailers’ stores for the best position on the shelf.
e. | finding the right channel of distribution for a product.

____	43.	Unprocessed extractive or agricultural products, such as copper, peanuts, soybean, bauxite, fruits, ore, and so on, that become part of finished products are examples of:
a. | supplies.
b. | processed materials.
c. | OEM parts.
d. | component parts.
e. | raw materials.

____	44.	A(n) _____ is a group of people or organizations for which an organization designs, implements, and maintains a marketing mix intended to meet the needs of that group, resulting in mutually satisfying exchanges.
a. | responsive segment
b. | heterogeneous segment
c. | aggregated market
d. | target market
e. | undifferentiated target

____	45.	_____ is commonplace in business marketing and can sometimes occur over several months.
a. | Purchase arbitration
b. | Negotiation
c. | Customerization
d. | Disintermediation
e. | Need mediation

____	46.	Consumers’ concern for health issues affects the way food is marketed. For example, marketers must now list the number of grams of transfat on a product’s nutrition label because it has recently come to light that this type of fat is harmful. Consumers’ concern for health issues is a(n) _____ factor.
a. | political and legal
b. | demographic
c. | economic
d. | technological
e. | social

____	47.	A series of stages determined by a combination of age, marital status, and the presence or absence of children is known as the:
a. | psychographic process.
b. | family life cycle.
c. | maturation process.
d. | segmentation cycle.
e. | generation gap.

____	48.	Which of the following is a means of displaying or graphing, in two or more dimensions, the location of products, brands, or groups of products in customers’ minds?
a. | Market segmentation
b. | Product positioning
c. | Laddering
d. | Perceptual mapping
e. | Product tracing

____	49.	As the demand for VCR players has fallen, so has the demand for blank VHS tapes because the demand for VHS tapes is an example of a(n) _____ demand.
a. | derived
b. | joint
c. | inelastic
d. | elastic
e. | fluctuating

____	50.	The _____ is the unique blend of product, place, promotion, and pricing strategies designed to produce mutually satisfying exchanges with a target market.
a. | product line
b. | market portfolio
c. | internal environmental mix
d. | marketing mix
e. | product mix

____	51.	Apple, Inc. wants a faster microprocessor for its new Macs. Apple most likely engaged in a:
a. | modified rebuy.
b. | new process.
c. | value engineering task.
d. | straight rebuy.
e. | new buy.

____	52.	Which type of business product includes such capital goods as large or expensive machines, mainframe computers, blast furnaces, generators, airplanes, and buildings?
a. | Raw materials
b. | Accessory equipment
c. | Investment goods
d. | Component parts
e. | Major equipment

____	53.	The SWOT acronym refers to a firm’s analysis of its:
a. | strengths, weaknesses, opportunities, and threats
b. | situations, wealth, organizational strengths, and target markets
c. | strategies, willingness to change, objectives, and trends
d. | service levels, willingness to spend, organizational culture, and total revenues
e. | sales, width of product mix, observations, and technology

____	54.	An advantage that cannot be copied by the competition is called a(n) _____ competitive advantage.
a. | unique
b. | primary
c. | monopolistic
d. | sustainable
e. | dominant

____	55.	Rose is shopping for a new camera. She has set a maximum of $250 as the highest price she will pay, so she doesn’t even bother considering cameras that cost more than that. Rose is narrowing the number of available choices by using a:
a. | cost margin
b. | cutoff
c. | product attribute
d. | knockoff
e. | boundary

____	56.	Which type of business product represents goods, such as portable tools and office equipment that are less expensive and shorter-lived than major equipment?
a. | Processed goods
b. | Component parts
c. | Intermediate goods
d. | Supplies
e. | Accessory equipment

____	57.	A particular segment of the business market includes those individuals and organizations that purchase goods and services for the purpose of making a profit. They achieve this goal by using purchased goods and services to make other goods, to become part of other goods, or to facilitate the daily operations of the organization. This group is called the _____ segment of the business market.
a. | reseller
b. | wholesaler
c. | government
d. | institution
e. | producer

____	58.	_____ segmentation is based on personality, motives, and lifestyles.
a. | Demographic
b. | Character
c. | Family life cycle
d. | Benefit
e. | Psychographic

____	59.	Kraft introduced Philadelphia Ready-To-Eat Cheesecake Filling for those who do not have time to make cheesecake in the traditional manner. This is an example of a _____ strategy.
a. | divestment
b. | diversification
c. | market development
d. | product penetration
e. | product development

____	60.	A market is people or organizations that have:
a. | unmet needs or wants and products or services that satisfy those unmet needs or wants.
b. | needs and wants and an ability and willingness to buy.
c. | a medium of exchange and products they desire.
d. | the ability, willingness, and power to buy.
e. | communication, financial, and capital resources.

____	61.	Which step in the consumer decision-making process is a result of an imbalance between actual and desired states?
a. | Postpurchase behavior
b. | Purchase
c. | Need recognition
d. | Evaluation of alternatives
e. | Want recognition

____	62.	An external information search is especially important when:
a. | there is little risk of making an incorrect decision
b. | the cost of gathering information is high
c. | there is a great deal of past experience
d. | there are high costs associated with making an incorrect decision
e. | buying frequently purchased, low-cost items

____	63.	When IKEA, the Swedish home furnishings retailer, first entered the Japanese market, it failed. It was more successful in its second try because it was aware of the need to adapt its furnishings to fit the smaller Japanese homes. It success on its second foray into Japan was based on its ability to give the Japanese consumer what he or she needed without abandoning its product strategy. IKEA had to adopt a _____ strategy.
a. | market differentiation
b. | product invention
c. | message adaptation
d. | product adaptation
e. | product substitution

____	64.	Sony, Panasonic, and other Japanese manufacturers that build products to customer order instead of churning out products in anticipation of demand have decided to hire U.S. companies to produce electronics for them. The Japanese companies will handle the marketing of the products. Japanese electronics companies are using:
a. | contract manufacturing.
b. | franchising.
c. | countertrading.
d. | direct exporting.
e. | direct investment.

____	65.	A university is considering the purchase of a Web-based course delivery system due to increased demand for online courses and degrees. Since the school has not offered online courses before, what type of buying situation does this represent for the school?
a. | Modified rebuy
b. | Value engineering task
c. | New buy
d. | Derived rebuy
e. | Straight rebuy

MAR 100/MECA  - MIDTERM EXAM REVIEW  - fall 2018
Answer Section

MULTIPLE CHOICE

	1.	ANS:	E
This is the definition of straight rebuy.

OBJ:	07-8

	2.	ANS:	C
This is the definition of geographic segmentation.

OBJ:	08-4

	3.	ANS:	B
Developing an understanding of the global target market is the first step, and market research results in knowledge of customer needs and wants that will guide product, price, promotion, and distribution decisions.

OBJ:	05-5

	4.	ANS:	D
The reseller market includes retail and wholesale businesses that buy finished goods and resell them for a profit.

OBJ:	07-4

	5.	ANS:	B
Benefit segmentation groups customers into market segments according to the benefits they seek from the product.

OBJ:	08-4

	6.	ANS:	B
Having a cost competitive advantage means being the low-cost competitor in an industry while maintaining satisfactory profit margins.

OBJ:	02-6

	7.	ANS:	D
These are demographic characteristics of consumers.

OBJ:	08-4

	8.	ANS:	D
Consumer behavior describes how consumers make purchase decisions.

OBJ:	06-1

	9.	ANS:	B	OBJ:	02-3

	10.	ANS:	B
Repositioning means changing the customers’ perceptions of a brand in relation to competing brands.

OBJ:	08-9

	11.	ANS:	D
Customers practice extensive decision making when purchasing an unfamiliar and expensive or infrequently used product.

OBJ:	06-4

	12.	ANS:	C
Original equipment manufacturers, or OEMs, include all individuals and businesses that buy business goods and incorporate them into the products they produce for eventual sale to other producers or to consumers.

OBJ:	07-4

	13.	ANS:	D
A firm that chooses to serve two or more well-defined market segments and develops a distinct marketing mix for each has a multisegment targeting strategy.

OBJ:	08-7

	14.	ANS:	D
The purpose of segmentation is to group similar consumers and to serve their needs with a specialized marketing mix.

OBJ:	08-1

	15.	ANS:	E
This is the definition of component parts.

OBJ:	07-7

	16.	ANS:	B
This is the definition of a target market.

OBJ:	04-1

	17.	ANS:	D
Cannibalization occurs when sales of a new product cut into sales of a firm’s existing products.

OBJ:	08-7

	18.	ANS:	B
Global marketing targets markets throughout the world.

OBJ:	05-1

	19.	ANS:	D
This is the definition of demography.

OBJ:	04-3

	20.	ANS:	B
Business services are functions performed by outside providers.

OBJ:	07-7

	21.	ANS:	E
Cognitive dissonance is an inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions, and marketers can reduce it by sending a postpurchase thank you or letter, displaying product superiority in ads, or offering guarantees.

OBJ:	06-3

	22.	ANS:	C
After recognizing a need or want, consumers search for information about the various alternatives available to satisfy it.

OBJ:	06-2

	23.	ANS:	C
A buyer’s evoked set is the set of alternatives from which a buyer can choose; also called consideration set.

OBJ:	06-2

	24.	ANS:	A
Concentrated targeting strategy selects one segment of a market for targeting marketing efforts.

OBJ:	08-7

	25.	ANS:	B
A niche competitive advantage is the advantage achieved when a firm seeks to target and effectively serve a small segment of the market.

OBJ:	02-6

	26.	ANS:	E
This is the definition of licensing.

OBJ:	05-4

	27.	ANS:	D
Distribution strategies make products available when and where customers want them.

OBJ:	02-9

	28.	ANS:	A
The 80/20 principle proposes that a minority of a firm’s customers purchase a majority of the volume of the product.

OBJ:	08-4

	29.	ANS:	C
This is the definition of supplies.

OBJ:	07-7

	30.	ANS:	D
Thirty-something women indicate demographic segmentation. The juggling act describes her lifestyle, which would represent psychographic segmentation.

OBJ:	08-4

	31.	ANS:	D
Diversification is a strategy of increasing sales by introducing new products into new markets.

OBJ:	02-3

	32.	ANS:	A
This is the definition of geodemographic segmentation.

OBJ:	08-4

	33.	ANS:	B
The key characteristic distinguishing business products from consumer products is intended use, not physical characteristics.

OBJ:	07-1

	34.	ANS:	E
The three criteria, in order of importance, are quality, service, and price.

OBJ:	07-8

	35.	ANS:	B
Repositioning means changing the customers’ perception of a brand in relation to competing brands.

OBJ:	08-9

	36.	ANS:	C
A firm using an undifferentiated targeting strategy essentially adopts a mass-market philosophy, viewing the market as one big market with no individual segments.

OBJ:	08-7

	37.	ANS:	E
Global marketing standardization is the production of uniform products that can be sold the same way all over the world.

OBJ:	05-2

	38.	ANS:	C
This is the definition of a mission statement, which answers the question, “What business are we in?”

OBJ:	02-4

	39.	ANS:	D
This is the definition of limited decision making.

OBJ:	06-4

	40.	ANS:	E
This describes processed materials.

OBJ:	07-7

	41.	ANS:	B
The strategy that entails forging long-term partnerships with customers is called relationship marketing.

OBJ:	01-3

	42.	ANS:	C
Positioning is developing a specific marketing mix to influence potential customers’ overall perception of a brand, product line, or organization in general.

OBJ:	08-9

	43.	ANS:	E
Raw materials are unprocessed extractive or agricultural products.

OBJ:	07-7

	44.	ANS:	D
This is the definition of a target market.

OBJ:	08-7

	45.	ANS:	B
Negotiating is common in business marketing.

OBJ:	07-6

	46.	ANS:	E
Social factors include our attitudes, values, and lifestyles.

OBJ:	04-2

	47.	ANS:	B
This describes the family life cycle.

OBJ:	08-4

	48.	ANS:	D
This is the definition of perceptual mapping.

REF:	143	OBJ:	08-9

	49.	ANS:	A
The demand for VHS tapes is driven by the consumer demand for VCR players; therefore, the tapes have a derived demand.

OBJ:	07-6

	50.	ANS:	D
This is the definition of a marketing mix.

REF:	25	OBJ:	02-9

	51.	ANS:	A
When a previously purchased item needs to be reordered, but with changes or additions, it is considered a modified rebuy.

OBJ:	07-8

	52.	ANS:	E
This describes major equipment, which is also called installations.

OBJ:	07-7

	53.	ANS:	A
SWOT stands for strengths, weaknesses, opportunities, and threats.

OBJ:	02-5

	54.	ANS:	D
This is the definition of a sustainable competitive advantage.

OBJ:	02-6

	55.	ANS:	B
Cutoffs are either minimum or maximum levels of an attribute that an alternative must pass to be considered.

OBJ:	06-2

	56.	ANS:	E
This is the definition of accessory equipment.

OBJ:	07-7

	57.	ANS:	E
This describes the producer segment of business customers.

OBJ:	07-4

	58.	ANS:	E
Personality, motives, and lifestyles are bases of psychographic segmentation.

OBJ:	08-4

	59.	ANS:	E
A product development strategy entails the creation of a new product for existing markets.

OBJ:	02-3

	60.	ANS:	B
A market is defined as having four imperative characteristics: people or organizations, needs and wants, ability to buy, and willingness to buy.

OBJ:	08-1

	61.	ANS:	C
Need recognition is the result of an imbalance between actual and desired states.

OBJ:	06-2

	62.	ANS:	D
If a consumer perceives a purchase to involve high risk (financial, social, etc.), an external search will lower the risk by providing more information.

OBJ:	06-2

	63.	ANS:	D
Product adaptation is the slight alteration of the basic product (in this case, making it smaller.)

OBJ:	05-5

	64.	ANS:	A
Contract manufacturing takes place when a foreign company produces goods to specification set by a domestic company, with the domestic firm’s brand name affixed to the goods. In this case, the “domestic” companies are in Japan selling in a foreign market for them––the United States.

OBJ:	05-4

	65.	ANS:	C
A new buy is a situation requiring the purchase of a product for the first time.

OBJ:	07-8