chapter 6 review

Question 1

Which of the following is not a need?
A) Housing B) Eating out C) Utilities D) Food

Answer 1

B) Eating out

Question 2

The purpose of advertising is to:
A) Tease the consumer B) Inform the consumer
C) Persuade the consumer D) All of the above

Answer 2

D) All of the above

Question 3

Which of the following is not a common marketing strategy?
A) Providing financing options
B) Repetition
C) Making the customer do product research D) Personal selling

Answer 3

C) Making the customer do product research

Question 4

When a company places an ad and offers no interest on your purchase for three years:
A) They are not interested in making a profit
B) They are showing their appreciation to you by giving you free money
C) The cost of the financing is built into the price of the item
D) All of the above

Answer 4

C) The cost of the financing is built into the price of the item

Question 5

What is a safe assumption to make regarding companies and their marketing practices?
A) Companies know that competition is fierce for consumer dollars.
B) Companies spend millions of dollars and do extensive research on advertising.
C) Companies use all angles to aggressively compete for your money.
D) All of the above

Answer 5

D) All of the above

Question 6

What concept is best explained by the statement, ʺMoney spent here cannot be spent thereʺ?
A) Law of diminishing return B) Opportunity cost
C) Significant purchases D) Delayed gratification

Answer 6

B) Opportunity cost

Question 7

7) Identify which method companies are using to compete for your money: ʺ90-days-same-as-cashʺ
A) Personal selling
B) Financing
C) Media
D) Product positioning

Answer 7

B) Financing

Question 8

Identify which method companies are using to compete for your money: Reputation for holding its value
A) Personal selling
B) Financing
C) Media
D) Product positioning

Answer 8

D) Product positioning

Question 9

Identify which method companies are using to compete for your money: Car salesman
A) Personal selling
B) Financing
C) Media
D) Product positioning

Answer 9

A) Personal selling

Question 10

Identify which method companies are using to compete for your money: TV commercials
A) Personal selling
B) Financing
C) Media
D) Product positioning

Answer 10

D) Product positioning

Question 11

Four common marketing tactics are:
A) Repetition, buyerʹs remorse, product positioning, significant purchase
B) Competition, financing, opportunity cost, personal selling
C) Branding, personal selling, opportunity cost, financing
D) Personal selling, financing, repetition, product positioning

Answer 11

D) Personal selling, financing, repetition, product positioning

Question 12

Dave tells the story of a man who bought his dream car, drove it home, but then returned it the next day after some money calculations. This story is an example of:
A) Brand recognition
B) ʺBe backsʺ in the car business
C) Buyerʹs remorse
D) Opportunity cost

Answer 12

D) Opportunity cost

Question 13

Which of the following should you consider when making a significant purchase?
A) Your buying motives
B) If you canʹt pay with cash, donʹt buy it
C) The opportunity cost
D) All of the above

Answer 13

D) All of the above

Question 14

Which of the following is not a form of product positioning?
A) Shelf positioning
B) Packaging and color
C) Financing
D) Brand recognition

Answer 14

C) Financing

Question 15

Which is not a ʺpower over purchaseʺ tactic?
A) Compare your purchase with a friendʹs
B) Consider the opportunity cost
C) Wait overnight
D) Seek counsel

Answer 15

A) Compare your purchase with a friendʹs

Question 16

A good salesperson will answer a question with a question.

Answer 16

TRUE

Question 17

Never buy something you do not fully understand.

Answer 17

TRUE

Question 18

The amount of stuff a person has is directly related to contentment and happiness.

Answer 18

FALSE

Question 19

Young single adults should find an accountability partner with whom to discuss big purchases.

Answer 19

TRUE

Question 20

Inflation has no effect on your buying power.

Answer 20

FALSE

Question 21

A budget has little effect on a personʹs financial success unless he or she also develops power over purchase.

Answer 21

TRUE

Question 22

You should never wait overnight before making a big purchase if there is only one item left.

Answer 22

FALSE

Question 23

Teens have cited ʺfriendsʺ as the strongest influence over their purchase decisions.

Answer 23

TRUE

Question 24

Repetition has proven to be an ineffective marketing technique.

Answer 24

FALSE

Question 25

Zero percent financing is nothing more than a really good marketing tool.

Answer 25

TRUE

Question 26

The promotion of a product or service by identifying it with distinct characteristics; usually associated with public perception, quality or effectiveness

Answer 26

branding

Question 27

To buy an item with credit; paying over time

Answer 27

financing

Question 28

Refers to the financial opportunity that is given up because you choose to do something else with your money

Answer 28

opportunity cost

Question 29

An amount of money you spend, usually $300, that causes some pain to part with

Answer 29

significant purchase

Question 30

The process of communicating the value of a product or service to customers

Answer 30

marketing

Question 31

Refers to the publicʹs ability to recall and recognize a brand by its logo, jingles, packaging, etc.

Answer 31

brand recognition

Question 32

Feeling regret or concern after making a large purchase

Answer 32

buyerʹs remorse

Question 33

An economic system based on a free market, profit motive, open competition and private ownership of the means of production

Answer 33

capitalism

Question 34

The persistent increase in the cost of goods and services or the persistent decline in the buying power of money

Answer 34

inflation

Question 35

A spur-of-the-moment, unplanned decision to buy a product or service

Answer 35

impulse buy

Question 36

Explain why financing a purchase is a bad idea.

Answer 36

It puts you at financial risk, causes you to pay more than the cost of the item, and prevents you from building wealth.

a tool used to get you to make a purchase even if you donʹt have the cash to pay for it.

Question 37

Why should you always consider the opportunity cost when making a significant purchase?

Answer 37

Because money spent in one place cannot be spent in another. Considering opportunity cost is just one of the steps needed to have power over purchase.

Question 38

What are the five steps you should take before making a significant purchase?

Answer 38

Wait overnight, consider your buying motives, make sure you understand what you are buying, consider the opportunity cost, and seek wise counsel

Question 39

What effect does inflation have on purchasing power?

Answer 39

Inflation means that your dollars buy less than they did in the past. You must consider inflation when planning for future expenses, especially for retirement.

Question 40

Summarize factors that influence consumer decisions

Answer 40

marketing, peer influence, brand recognition, opportunity cost, advice from others, immaturity, contentment, time, whether the item/service is a want or need, etc.

Question 41

Explain why consumer awareness is such an important part of a healthy financial plan.

Answer 41

We live in the most marketed-to culture in the world. In order to have financial peace, you need to develop power over purchase and resistance to marketing. Buying things is not bad. But buying too many things -with money you donʹt have, to impress people you donʹt really like-will make winning with money impossible.

Question 42

Identify ways companies compete for your money.

Answer 42

Companies use a variety of marketing strategies to compete for consumer dollars: personal selling, creative financing, repetition and product positioning (which includes color, packaging, branding and shelf position)