Marketing and Price Analysis Name:___________ ______________________
Dept. of Agricultural & Resource Economics
ARE 225
Midterm Examination
Wednesday, March 16, 1993
Part I. MULTIPLE CHOICE - (40 points, 4 per question)
Circle the letter corresponding to your answer.
1. Time, place, and ownership utility are created by
a. management
b. manufacturing
c. marketing
d. production
e. government
2. The marketing mix is directed toward satisfying the nee ds of the target market and includes each of the following variables except
a. product
b. distribution
c. promotion
d. price
e. production
3. During periods of recession, marketers should consider< /P>
a. lowering prices
b. expanding product lines
c. increasing production
d. decreasing promotional outlays
e. making no decisions at this time
4. The statement of consumer rights made by President Kenn edy stressed
a. the right to choose freely
b. the right to be informed
c. the right to be heard
d. the right to be safe
e. all of the above
5. Air Products and Chemicals, Inc., of Allentown, Pennsyl vania, has factories in Wilkes-Barre, Pennsylvania, and Airefair, England. When the
a. dollar is strong, the company should center its exp ort manufacturing operations in England
b. dollar is weak, the company should center its expor t manufacturing operations in England
c. English pound is strong, the company should center its export manufacturing operations in England
d. economy is in recession, the company should decreas e production at each manufacturing facility
e. economy is inflationary, the company should increas e production at each manufacturing facility
6. Countertrade
a. is a customs union created when several nations get together to tax and place embargoes on imports of certain products
b. is a pricing strategy designed to discourage foreig ners from invading other markets with penetration pricing
c. is a form of exporting whereby products and service s are bartered rather than sold for cash
d. is a distribution strategy that bypasses local dist ributors in favor of direct marketing
e. is based on the principle of free trade removing al l tariffs between two countries
7. The danger of trend analysis lies in its underlying ass umption that
a. past outputs will change in the future
b. outputs will remain the same even though conditions change
c. the future is a continuation of the past
d. a change in conditions will decrease outputs
e. a change in conditions will increase outputs
8. As a market researcher for a cable television company s eeking to determine the number of multidwelling buildings in a selected neighbor hood, the best possibility for acquiring this information would be
a. interviews with neighborhood leaders
b. the local Chamber of Commerce
c. census information available at the local library
d. the local Better Business Bureau
e. an aerial survey of surrounding neighborhoods
9. Mail interviews
a. allow the researcher to acquire very personal and c onfidential information with a very high response rate
b. have a very low rate of nonresponse to the question naire
c. provide the researcher with a very short turnaround cost
d. allow a researcher to conduct national studies at a reasonable cost
e. have become very expensive due to increased postage rates
10. A survey of auto import owners that included 10 Hyunda i owners, 10 Honda owners, 10 Volvo owners, and so forth is an example of a
a. convenience sample
b. quota sample
c. cluster sample
d. stratified sample
e. international marketing sample
Part II. SHORT ANSWERS (20 points, 10 per question)
11. For the following situations, recommend a method of e ntering the international markets mentioned, from a U.S. firm perspective. Afte r stating the method, briefly justify your choice and please use only the space provided for the question.
11a) Jonathan's Restaurant chain (Mexico):
11b) Ski equipment (Canada)
11c) Chocolate cookies (Japan)
12. After applying the regression technique to Holiday Inn Hotels, Inc. data, the estimated demand equation is this: Rooms = 30 - 0.5 Price, where "Rooms" is the number of rooms rented in a given quarter and "P rice" is the rate charge per room per day in dollars. Use the above regression equation to answer the following and briefly write down all necessary calculatio ns.
12a) The number of rooms per quarter rented if the rate is $ 50 per room per day.
12b) If you wanted to increase sales, would you cut or incre ase the rate by $1?
Part III. FUTURES MARKETS (30 points, 5-10 per question)< /P>
Consider the attached information from the New York Times in answering the following questions. (Note: use the Saudi Arabian light as the rel evant grade of crude oil).
13. (5 points) Would you say the crude oil market is bullish or bearish? Explain.
14. (5 points) Calculate the gain or loss per barrel to a n speculator who went short on Thursday, March 3 and offsets his/her position on Tuesday, March 8, 1994.
15. (5 points) Calculate the basis for crude oil for March 8, 1994.
16. (10 points) Calculate the gain or loss to a chemical company who produces plastic from crude petroleum who took a position on Thursda y, March 3 as a long hedger and offsets its position on Tuesday, March 8, 1994? The cost objective of the company for crude oil is to pay around $11.60 per bar rel.
17. (5 points) Assume that confidential but reliable info rmation sources tell you that OPEC (The Organization of Petroleum Exporter Count ries, a quasi-cartel organization) will soon reach an agreement to curtail oil e xports. The public does not know it yet. As an speculator, what moves would yo u make in the crude oil futures markets? Justify your strategy.
Part IV. MISCELLANEOUS (10 points, 5 per question)
Choose 2 of the following 4 questions. Do not choose an ethic s case that is your own. Please enter the letter corresponding to the question of your choice and answer in the space indicated.
a. Summarize the RU-486 marketing ethics case.
b. Summarize the "Aid medication (AZT)" marketing ethics cas e.
c. Summarize the "Disney Channel" video case.
d. Summarize the "Carl's Jr. and Mikoshi Japanese Noodle Hou se" video case.
18. Indicate Choice here:
19. Indicate Choice here:
HAVE A GREAT SPRING BREAK!!
Comments: