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Exam 18: Ethical Marketing in a Consumer-Oriented World: Appraisal and Challenges

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Question 31

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Use this information to answer the following question that refer to the PSI case. Pump Systems, Inc. (PSI) produces two major kinds of water pumps. The smaller pumps range in price from $5-$30, and are used in drinking fountains and soft-drink machines. Most of these pumps are bought by manufacturers of these machines and built into their product. PSI also builds larger pumps used in swimming pools and reservoirs. The prices of these items range from $250-$500. These are usually purchased by contractors who build the pools and reservoirs. PSI sells nationally through sales reps located in the large industrial centers. These reps handle the selling function for PSI in their geographic areas and provide market information. They usually do the same thing for 10 to 20 similar manufacturers of noncompeting products--and are paid on a commission basis. There are no other producers of the smaller pumps in the United States--because PSI has patent protection. As a result of this, management has decided to follow a policy of pricing high--to maximize profits--while the patent lasts. Several competitors are in the market for the larger pumps. Industry prices and profits of these pumps have dropped in the past few years as a result of firms trying to increase their market shares. The product design has remained fairly stable over the last few years--and one firm dropped out as it saw that it would lose more money with its "me-too" product. Industry sales are increasing--but at a very slow rate. The price of these products is determined by adding a standard markup percentage to the variable cost of the items--to cover fixed costs and profit. For instance, pump Z has variable costs of $250 per unit, and a markup of 40 percent of this cost is added to the $250 to get its selling price. Management has estimated that fixed costs applicable to this product are $200,000 per year. PSI publishes a product catalog which is revised annually. Also, it exhibits in most trade shows. PSI follows a policy of charging the same price to all customers--so all will have the same costs at their own plants. All purchases are shipped directly from PSI's factory to its customers--and title passes at PSI's factory. What stage in the product life cycle do PSI's large pumps seem to be in?

A) Market maturity
B) Sales decline
C) Market introduction
D) Market growth

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Question 32

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Technology is making it harder to abuse consumers' rights to privacy.

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Question 33

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Use this following information to answer the following question that refer to the Sure Foot case. Sure Foot, Ltd. produces high-quality shoes and boots for serious hikers. Sure Foot's shoes have suggested retail prices ranging from just under $40 to about $150. Usually, the retailer buys the shoes for about 50 percent less than the list price, and the retailer pays the freight charges from Sure Foot's plant in Maine. Sure Foot's credit terms are 2/10, net 30. Although Sure Foot's brand appears on every shoe--the firm does very little mass selling, except for a limited program of cooperative advertising and some sales promotion at walking events. Sure Foot's shoes are carried by "better" sporting goods stores all across the nation--although usually in fairly small quantities. Its main showroom is in Boston, where two salaried salespeople handle most of the firm's large accounts. Sure Foot's products are also sold by seven independent "field reps" who are paid a 5 percent commission on all sales. Each of these field reps is responsible for a several state territory--emphasizing mostly the small stores in or near major cities. The field reps carry Sure Foot's products as a minor line--but none of their lines are competitive with each other. The walking shoe market is supplied by 7 large firms and 50 or more smaller firms. While these firms are competitive, they do vary their materials, styles, prices, and promotion. The "high-quality" market is supplied by only 5 firms--Sure Foot being the largest. While these firms are also competitive, they generally offer a more limited assortment of materials, styles, and prices because the "high-quality" part of the market is not as large--and does not appear to be growing any more. In the Sure Foot case, the nature of competition in the hiking shoe market is:

Satisfaction with a firm's marketing efforts can be roughly measured by

MICRO-marketing effectiveness can be measured by:

Which section of a formal marketing plan for a new product is most directly related to deciding the markup chain in the channel of distribution for a new product?

Use the following information to answer questions that refer to the Jewel Craft case. Jewel Craft, Inc. is a leading producer in the United States women's costume jewelry and accessories market. Its brands are well known and are sold by department stores and better women's stores. Several stores in a city may carry Jewel Craft's brands because most of Jewel Craft's customers will not consider any other brand. Jewel Craft's sales force calls on one wholesaler in each state. Gemco, Inc., of Boston, Massachusetts, is the Jewel Craft distributor in that state. Gemco stocks and sells women's accessories (noncompeting lines) for several manufacturers like Jewel Craft. Wholesalers are allowed a 20 percent markup by Jewel Craft--but pay the freight charges to their warehouses. Jewel Craft's policy of using one wholesaler per state comes from its desire to control its distribution. Jewel Craft uses national magazine advertising and also supports a cooperative ad program with retailers. Jewel Craft's prices allow for a 40 percent retail markup--an attractive percent when one considers that Jewel Craft's products require little in-store selling because of their well-established reputation. Recently, Jewel Craft was approached by a watch producer with the idea of expanding to watches under the Jewel Craft name. It was argued that although national watch sales have leveled off, Jewel Craft could enjoy growing sales for several years because of the fine reputation the company has achieved. If watches are added, Jewel Craft will use its present policies regarding distribution, pricing, and advertising. Further, it will offer the wholesalers and retailers an attractive "package" deal as an incentive to carry Jewel Craft watches. Intermediaries will be required to carry the watches if they wish to handle the jewelry and accessories. In the Jewel Craft case, Gemco, Inc. is a:

Which of the following is NOT a current trend that is affecting marketing strategy planning?

Which of the following is a NOT a key trend affecting marketing strategy planning?

Measuring macro consumer satisfaction:

Which section of a formal marketing plan for a new product is most directly related to deciding which segmenting dimensions are most important in choosing a target market?

Which section of a formal marketing plan for a new product is most directly related to deciding how you want the target market to think about your product compared to competitive products?

Many important changes are affecting marketing strategy planning. For example, product placements in movies and online games are illustrative of changes in the area of:

When companies in a market-directed economy try to find "little monopolies" for themselves,

Which of the following might be sections in a marketing plan?

Improving both micro-marketing and macro-marketing may require:

Regarding marketing strategy planning:

Use this following information to answer the following question that refer to the Sure Foot case. Sure Foot, Ltd. produces high-quality shoes and boots for serious hikers. Sure Foot's shoes have suggested retail prices ranging from just under $40 to about $150. Usually, the retailer buys the shoes for about 50 percent less than the list price, and the retailer pays the freight charges from Sure Foot's plant in Maine. Sure Foot's credit terms are 2/10, net 30. Although Sure Foot's brand appears on every shoe--the firm does very little mass selling, except for a limited program of cooperative advertising and some sales promotion at walking events. Sure Foot's shoes are carried by "better" sporting goods stores all across the nation--although usually in fairly small quantities. Its main showroom is in Boston, where two salaried salespeople handle most of the firm's large accounts. Sure Foot's products are also sold by seven independent "field reps" who are paid a 5 percent commission on all sales. Each of these field reps is responsible for a several state territory--emphasizing mostly the small stores in or near major cities. The field reps carry Sure Foot's products as a minor line--but none of their lines are competitive with each other. The walking shoe market is supplied by 7 large firms and 50 or more smaller firms. While these firms are competitive, they do vary their materials, styles, prices, and promotion. The "high-quality" market is supplied by only 5 firms--Sure Foot being the largest. While these firms are also competitive, they generally offer a more limited assortment of materials, styles, and prices because the "high-quality" part of the market is not as large--and does not appear to be growing any more. Sure Foot is probably in what stage of the product life cycle in the "high quality" market?

The authors of the text contend that:

A good S.W.O.T. analysis helps a manager focus on a strategy that takes advantages of the firm's opportunities and strengths while avoiding its weaknesses and threats to its success.