Marketing ASK Exam Practice #2

Which of the following is a direct channel of distribution for consumer goods and services:

• Producer to industrial user

• Producer to retailer to consumer

• Producer to distributor to user

• Producer to ultimate consumer

Answer explanation

Producer to ultimate consumer. With this route, goods and services move straight from the producer to the ultimate consumer. It is the simplest of all channels. Although producer to industrial user is a direct route, it is used for industrial rather than consumer goods and services. The producer-to-retailer-to-consumer channel and the producer-to-distributor-to-user channel are considered indirect channels because they involve the use of intermediaries.

To build positive customer relations, a business must be

• small

• aggressive

• proactive

• profitable

Answer explanation

Proactive. To build positive customer relations, a business must be proactive—striving to make every customer experience a good one—rather than waiting and reacting to problems and issues as they occur. A business does not necessarily need to act aggressively to be proactive. A business can strive to build positive customer relations before it has turned a profit. Even big businesses can build positive customer relations.

A customer called to complain that a promised shipment had not arrived and to find out what happened. You say you will check and call back. How can you show a customer service mindset?

• By following up to see if the customer is satisfied with your company's service

• By talking about the problem with coworkers

• By helping organize the warehouse

• By calling back as soon as possible with an answer

Answer explanation

By calling back as soon as possible with an answer. Do what you say you are going to do in order to show a customer service mindset. If you have told customers you will get back with them, do it as soon as possible. Don’t just give lip service. Customers deserve real service. In this case, the customer’s immediate concern is finding out what happened to the shipment—not in providing feedback about the quality of your company’s service. Talking about the problem with coworkers might provide some insight into the missing order, but it does not show customers that you are taking action and following through. Although your help with organizing the warehouse might be appreciated by coworkers, it is not what you told the customer you would be doing to resolve the problem.

What should you do to determine whether a customer's complaint is justified?

• Restate the complaint

• Take immediate action

• Ask a supervisor

• Investigate the problem

Answer explanation

Investigate the problem. Once you fully understand a customer's complaint, you have to decide if the complaint is justified before you can resolve the situation. Investigating the problem helps to determine how the situation can be handled within company policy. Restating the complaint eliminates any misunderstandings. Taking action occurs after determining how the complaint can be handled. Asking a supervisor about a complaint would only be done in unusual circumstances.

A farmer recently purchased 1,400 acres of farmland and six new pieces of farm machinery. What categories of resources did the farmer acquire?

• Natural and capital

• Natural and land

• Labor and human

• Capital and labor

Answer explanation

Natural and capital. Land is a natural resource, and machinery used to produce goods and services is a capital good. Human resources, or labor resources, are people who work to produce goods or services.

What type of market likely exists when a local car dealer has many vehicles for sale at low prices but demand is low?

• Inelastic

• Buyer's

• Elastic

• Seller's

Answer explanation

Buyer's. A buyer's market is the best time for buyers to buy. It is characterized by large supply, small demand, and low prices. A seller's market is characterized by large demand, small supply, and high prices. Elastic is not a type of market but a type of demand that changes according to changes in price. Inelastic is not a type of market but a type of demand in which changes in price do not affect demand.

In order to have exclusive rights to their literary and artistic works, authors and artists can apply for a

• tariff.

• trademark.

• patent.

• copyright.

Answer explanation

Copyright. A copyright is legal protection of books and other artistic works granted by government and giving the creators sole rights to them for a certain number of years. Anyone who copies these materials without permission will be guilty of copyright infringement. A patent is legal protection of an invention or a process granted by government to its owners for a certain number of years. A tariff is a tax on imported goods. A trademark is a symbol, design, or word used by a producer to identify a good or service. It may be registered with the government to prevent use by others.

Which of the following is an example of the limits to economic freedom:

• Francesca wants to start her own company, so she becomes an entrepreneur.

• A company wants to purchase an office building, but another company purchases it.

• Patrick decides to sell his car to his younger sibling for $10,000.

• Shawn competes with several other applicants for the job position he wants.

Answer explanation

A company wants to purchase an office building, but another company purchases it. Even though private enterprise offers a great many economic freedoms, it does have certain limits. People in a private enterprise system cannot buy anything and everything that they might like to buy. One limiting factor is competition among buyers. There are always many people who want to buy the same things. A company may want to purchase an office building, but if another company purchases it first, they won't be able to buy it. When Patrick sells his car to his younger sibling, he's using his freedom to own, use, buy, and sell private property. When Francesca starts her own company, she's using her freedom to choose. When Shawn competes with several other applicants for the job position he wants, he's using his freedom to compete.

Many businesses reinvest the profits that they make to

• improve their credit rating.

• increase employees’ bonuses.

• expand their operations.

• increase their emergency funds.

Answer explanation

Expand their operations. Many companies reinvest their profits in their own companies to grow and to compete in the marketplace. Improving the credit rating of the company is accomplished through the prompt payment of suppliers and lending institutions. Reinvesting profits in the business would make less money available for bonuses or emergencies.

One characteristic of trade-industry businesses is that they sell

• a narrow assortment of products.

• products to others.

• only limited product lines.

• only full product lines.

Answer explanation

Products to others. Trade industries are businesses that buy and sell goods to others. They are responsible for moving products from producers to consumers or to industrial users. Some trade-industry businesses sell only full product lines while others limit their product lines or carry a narrow assortment.