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Question 1Marketing strategy and planning

In marketing strategy, what does the acronym SWOT stand for?

  1. Strengths, Weaknesses, Opportunities, Threats Correct answer.
  2. Segments, Wants, Offers, Trends
  3. Sales, Workforce, Operations, Targets
  4. Strategy, Workflow, Objectives, Tactics

Explanation

SWOT analysis maps internal strengths and weaknesses against external opportunities and threats. It is a foundational situational-analysis tool used before setting marketing objectives. The other expansions do not correspond to any standard strategic framework.

Question 2Marketing strategy and planning

A company defines its marketing mix around product, price, place and promotion. Which framework is being applied?

  1. The Ansoff matrix
  2. The 4Ps Correct answer.
  3. The BCG matrix
  4. Porter's five forces

Explanation

The 4Ps framework organizes the tactical marketing mix into product, price, place and promotion decisions. It translates a chosen positioning into concrete market-facing choices. The other frameworks address portfolio, industry structure or growth direction, not the mix elements.

Question 3Marketing strategy and planning

Which statement best describes a marketing objective that satisfies the SMART criteria?

  1. Launch several campaigns to strengthen the brand's image
  2. Improve customer satisfaction as much as possible over time
  3. Grow social media followers by 15% within six months among the 18-24 segment Correct answer.
  4. Increase brand awareness across the whole market during the coming year

Explanation

A SMART objective is specific, measurable, achievable, relevant and time-bound. Only the follower-growth option states a metric, a target segment and a deadline. The others lack measurable targets or time frames, making evaluation impossible.

Question 4Marketing strategy and planning

Which element of the marketing environment is a change in the national retirement age?

  1. A demographic and social factor Correct answer.
  2. A channel factor
  3. A technological factor
  4. A competitive factor

Explanation

Retirement age is a population and social-policy variable, so it belongs to the demographic and social layer of the macro environment. It shifts age structures and spending patterns that marketers must plan around. Technology, competitors and distribution channels are separate categories.

Question 5Marketing strategy and planning

A firm sells the same product at a higher price in a premium retail chain than in a discount chain. Which pricing approach does this illustrate?

  1. Penetration pricing
  2. Predatory pricing
  3. Loss-leader pricing
  4. Price discrimination by distribution channel Correct answer.

Explanation

Charging different prices to different channel customers for the same product is channel-based price discrimination. It is common when the retail environment signals different willingness to pay. Penetration, loss-leader and predatory pricing describe different tactical motives.

Question 6Marketing strategy and planning

In the STP process, what immediately follows market segmentation?

  1. Conducting a SWOT analysis
  2. Targeting selected segments Correct answer.
  3. Designing the distribution network
  4. Setting the promotional budget

Explanation

STP stands for segmentation, targeting and positioning, and targeting is the step after segments are defined. Targeting evaluates segment attractiveness and selects where to compete. Budgeting, SWOT and distribution are separate planning activities.

Question 7Marketing strategy and planning

Which metric measures the percentage of customers who stop buying from a company over a given period?

  1. Customer acquisition cost
  2. Net promoter score
  3. Share of wallet
  4. Customer churn rate Correct answer.

Explanation

Churn rate expresses lost customers as a proportion of the customer base for a period. It is a core retention indicator in marketing planning. Acquisition cost, share of wallet and net promoter score measure different things.

Question 8Marketing strategy and planning

A brand extension introduces a new product under an existing brand name. What is its main strategic advantage?

  1. It removes all risk of cannibalizing existing products
  2. It guarantees a lower unit production cost
  3. It leverages existing brand equity to speed acceptance Correct answer.
  4. It eliminates the need for market research

Explanation

Brand extensions borrow the awareness and credibility of the parent brand, which can accelerate trial and reduce launch cost. They still carry risk, including dilution and cannibalization. Cost reduction and research elimination are not automatic outcomes.

Question 9Marketing strategy and planning

A firm wants to estimate the size of a market it has not yet entered. Which approach best fits a top-down market sizing?

  1. Running a small pilot promotion in one store
  2. Multiplying the number of potential buyers by average annual category spend Correct answer.
  3. Adding up the sales of three local competitors
  4. Interviewing ten existing customers about their habits

Explanation

Top-down sizing starts from a broad population and applies usage and spend rates to derive total market value. It gives a fast order-of-magnitude estimate before entry decisions. Interviews, competitor sums and pilots are bottom-up or exploratory methods.

Question 10Marketing strategy and planning

A company's product holds 40% share of a market growing at 12% annually. Under the BCG matrix, how is this unit best classified?

  1. Dog
  2. Star Correct answer.
  3. Cash cow
  4. Question mark

Explanation

High share in a high-growth market defines a star, which typically needs continued investment to hold position. Cash cows have high share but low growth. Question marks have low share in high growth, and dogs have low share in low growth.

Question 11Marketing strategy and planning

In the Ansoff matrix, selling an existing product to an existing market is called:

  1. Market development
  2. Product development
  3. Diversification
  4. Market penetration Correct answer.

Explanation

Market penetration grows revenue by increasing usage or share among current customers with current products. Market development targets new markets, product development creates new products, and diversification changes both. Penetration is the lowest-risk growth option.

Question 12Marketing strategy and planning

A marketer positions a shampoo as the only one formulated for hard water. Which positioning basis is being used?

  1. Product attribute and benefit differentiation Correct answer.
  2. User-occasion positioning
  3. Competitor-ignoring positioning
  4. Price positioning

Explanation

The claim rests on a specific formulation feature and its functional benefit for a water condition. Attribute-based positioning ties the brand to a distinctive product characteristic. Occasion, price and competitor-ignoring bases are different approaches.

Question 13Marketing strategy and planning

When planning a marketing budget, why do many firms use the objective-and-task method rather than a fixed percentage of sales?

  1. It removes the need to measure results
  2. It guarantees the lowest possible promotional cost
  3. It links spending to the activities required to achieve stated goals Correct answer.
  4. It automatically matches competitor spending

Explanation

The objective-and-task method builds the budget from the tasks needed to reach defined objectives, which improves justification and control. It requires clear goals and cost estimates but ties spend to purpose. It neither minimizes cost nor mirrors competitors.

Question 14Marketing strategy and planning

A company measures marketing return on investment as incremental profit attributable to a campaign divided by campaign cost. Which limitation most directly affects this metric?

  1. It cannot be calculated for digital campaigns
  2. It applies only to new product launches
  3. It ignores the cost of the campaign entirely
  4. Isolating incremental profit from other influences is difficult Correct answer.

Explanation

Attribution requires separating the campaign's effect from seasonality, pricing and competitor moves, which is inherently uncertain. The metric's validity therefore depends on sound experimental or modelling design. It applies across media and does include campaign cost.

Question 15Marketing strategy and planning

A firm uses a differentiation strategy in a mature market. Which action is most consistent with that choice?

  1. Cutting all investment in service quality to lower prices
  2. Reducing research spending to match the lowest-cost rival
  3. Building superior customer experience as a defensible advantage Correct answer.
  4. Copying the market leader's offer exactly

Explanation

Differentiation competes on valued uniqueness rather than on price, so superior experience can justify a premium. It requires sustained investment in attributes customers value. Copying rivals or stripping service undermines the differentiation basis.

Question 16Marketing strategy and planning

What is the primary purpose of a marketing audit?

  1. To prepare the annual statutory financial statements
  2. To appraise the marketing function's environment, objectives, strategies and activities systematically Correct answer.
  3. To set individual sales quotas for each representative
  4. To recruit sales staff for the coming year

Explanation

A marketing audit is a structured, periodic review of the whole marketing system, from environment to execution. It identifies gaps and informs planning rather than performing accounting or staffing tasks. Quota setting is a narrower operational activity.

Question 17Marketing strategy and planning

A brand faces declining repeat purchase despite strong trial. Which planning response addresses the most likely cause?

  1. Reduce distribution to concentrate on fewer outlets
  2. Investigate post-purchase satisfaction and product performance Correct answer.
  3. Raise the price to signal higher quality
  4. Increase trial-driving sampling further

Explanation

Strong trial with weak repeat points to a problem after first use, such as poor product experience or unmet expectations. Diagnosing satisfaction and performance addresses the root cause. More sampling would amplify a failing experience, while price and distribution changes do not fix it.

Question 18Marketing strategy and planning

Which set of variables is most typical of behavioural segmentation?

  1. Personality, lifestyle and values
  2. Country, region and climate
  3. Age, income and education
  4. Usage rate, loyalty status and benefits sought Correct answer.

Explanation

Behavioural segmentation groups buyers by their relationship to the product, such as usage frequency, loyalty and sought benefits. Demographic, geographic and psychographic variables form the other main bases. Behavioural data often predict response better than profile data.

Question 19Marketing strategy and planning

A distributor holds stock and takes title to goods before reselling them to retailers. Which channel role is being described?

  1. Facilitator
  2. Agent
  3. Wholesaler Correct answer.
  4. Broker

Explanation

A wholesaler buys goods, takes ownership risk and resells to retailers or business buyers. Agents and brokers negotiate without taking title. Facilitators such as logistics firms provide services without owning the goods.

Question 20Marketing strategy and planning

A firm's marketing plan includes a PESTLE analysis. Which item belongs under the legal element?

  1. Changing attitudes to sustainable packaging
  2. A rise in household disposable income
  3. New data-protection rules affecting consent-based marketing Correct answer.
  4. Faster mobile network coverage

Explanation

Data-protection rules are legislation that constrain how marketers collect and use customer data, so they belong to the legal element. Income, connectivity and attitudes map to economic, technological and social elements respectively.

Question 21Marketing strategy and planning

A company sets a high launch price for an innovative device to recover development costs from early adopters. Which pricing strategy is this?

  1. Dynamic pricing
  2. Penetration pricing
  3. Bundle pricing
  4. Price skimming Correct answer.

Explanation

Price skimming starts high to capture willingness to pay among early adopters, then lowers over time. It suits innovative products with limited initial competition. Penetration pricing does the opposite, while bundling and dynamic pricing describe other mechanisms.

Question 22Marketing strategy and planning

A marketing team must choose between two segments. Segment A is large but has many entrenched rivals; Segment B is smaller but growing fast with few competitors. Which criterion pair is most directly being weighed?

  1. Reach versus frequency
  2. Gross margin versus inventory turnover
  3. Segment size versus segment growth and competitive intensity Correct answer.
  4. Brand awareness versus brand loyalty

Explanation

Segment attractiveness assessment weighs size, growth, competition and fit together rather than size alone. The trade-off described pits size against growth and competitive intensity. Media reach, brand metrics and financial ratios are different planning variables.

Question 23Marketing strategy and planning

A brand with high awareness and strong functional associations suffers a quality failure that spreads rapidly on social media. Which planning response best protects long-term brand equity?

  1. Ignore the issue until media coverage fades
  2. Increase advertising spend on unrelated brand imagery
  3. Act quickly with transparent remediation and consistent messaging Correct answer.
  4. Discount heavily to rebuild short-term sales volume

Explanation

Brand equity rests on trust, so a credible, fast and transparent response limits damage to associations and loyalty. Consistent messaging across channels prevents contradictory signals. Silence, deflection or discounting treats symptoms without repairing the trust breach.

Question 24Marketing strategy and planning

A firm's customer lifetime value calculation shows acquisition cost exceeds lifetime value for a key segment. Which planning decision is most sound?

  1. Re-examine targeting, retention and cost-to-serve for that segment Correct answer.
  2. Extend the plan horizon until the numbers change
  3. Increase acquisition spending in that segment to buy scale
  4. Raise prices uniformly across all segments immediately

Explanation

When acquisition cost exceeds lifetime value, the unit economics of that segment do not support growth, so targeting, retention and cost-to-serve must be reviewed. Buying more unprofitable customers worsens the position. Blanket price rises and horizon extensions avoid the underlying issue.

Question 25Marketing strategy and planning

A marketer claims that a share-of-voice model can predict market share. Which assumption most underpins that claim?

  1. Competitors never change their own spending levels
  2. Advertising spend is the only driver of consumer choice
  3. Distribution intensity is irrelevant to sales
  4. Share of voice influences share of mind, which in turn drives share of market Correct answer.

Explanation

The share-of-voice argument runs through a causal chain from voice to mental availability to market share. It assumes a stable relationship between advertising pressure and consumer response. It does not require spend to be the sole driver or competitors to be static.

Question 26Marketing strategy and planning

A marketing plan states that the firm will increase distribution in independent pharmacies over the next 12 months. Under the plan's structure, this statement belongs in which component?

  1. The situation analysis, because it describes channel structure
  2. The control section, because it sets a performance threshold
  3. The mission statement, because it defines the firm's enduring purpose
  4. The action programme, because it specifies a timed tactical activity Correct answer.

Explanation

Action programmes translate strategies into specific activities with owners and deadlines, so a timed distribution push fits there. Mission and situation analysis describe purpose and current conditions rather than planned activity, and control covers monitoring standards.

Question 27Marketing strategy and planning

A marketer builds a SWOT summary for a new service. Which entry is correctly classified as an opportunity rather than a strength?

  1. A loyal customer base that renews contracts at a high rate
  2. Experienced account managers who hold long-standing client relationships
  3. A patented delivery process the firm already operates at lower cost than rivals
  4. A regulatory change that will let the firm serve customers it currently cannot reach Correct answer.

Explanation

Opportunities are favourable external conditions the firm could exploit, so a regulatory change opening new customers qualifies. Strengths are internal capabilities the firm already possesses, such as processes, loyalty and staff expertise.

Question 28Marketing strategy and planning

A marketing manager is drafting SMART objectives for the coming year. Which objective meets all five criteria?

  1. Improve customer satisfaction substantially during the next planning cycle
  2. Increase share of the small-business segment from 12% to 15% by 31 December, tracked in the CRM Correct answer.
  3. Become the most trusted brand in our category over time
  4. Grow revenue by launching better products and improving service quality

Explanation

A SMART objective is specific, measurable, achievable, relevant and time-bound; the share target names a segment, baseline, endpoint and deadline. The other statements lack measurable baselines, deadlines, or both.

Question 29Marketing strategy and planning

A firm operates in a market where buyers are highly price-sensitive and products are near-identical. According to Porter's generic strategies, which approach is most coherent?

  1. Hybrid premium pricing with broad distribution and heavy advertising
  2. Differentiation, investing in premium features buyers will pay extra for
  3. Cost leadership, competing on a structurally lower cost base than rivals Correct answer.
  4. Focus, serving a narrow niche with customised high-margin offers

Explanation

When products are hard to differentiate and buyers bargain hard on price, a cost advantage lets the firm profit at market prices. Differentiation and focus require buyers who value distinct benefits enough to pay a premium.

Question 30Marketing strategy and planning

A firm's marketing information system draws on internal records and marketing intelligence. Which activity is marketing intelligence rather than internal records analysis?

  1. Reviewing competitors' published pricing changes and trade press coverage Correct answer.
  2. Analysing the firm's customer service logs for complaint patterns
  3. Tracking the firm's own website conversion rates by campaign
  4. Examining the firm's own sales invoices by region and product line

Explanation

Marketing intelligence is the systematic collection of everyday information about the external environment, such as competitor moves and trade coverage. Internal records analysis uses data generated inside the firm, such as invoices, service logs and web analytics.

Question 31Marketing strategy and planning

A research team needs exploratory insight into why lapsed subscribers leave, and the budget is small. Which research design fits best?

  1. A controlled field experiment varying price across matched regions
  2. A longitudinal panel tracking household purchases for two years
  3. A short series of semi-structured depth interviews with a sample of lapsed subscribers Correct answer.
  4. A large-scale structured survey with closed questions sent to all former subscribers

Explanation

Exploratory questions about motivations suit qualitative depth interviews, which are flexible and low cost. Surveys, experiments and panels are better for quantifying, testing causality or tracking over time, and each is heavier on budget.

Question 32Marketing strategy and planning

A marketing plan includes a competitor analysis. Which conclusion is best supported by mapping rivals on the attributes buyers actually use when choosing?

  1. It determines the optimal advertising budget for each rival
  2. It reveals which attribute spaces are crowded and where a defensible position may exist Correct answer.
  3. It forecasts the market share each competitor will hold next year
  4. It proves which competitor has the lowest unit cost of production

Explanation

Perceptual mapping on buyer-relevant attributes shows how crowded each position is and highlights gaps a brand could occupy. It does not establish cost structures, predict future share or set rival budgets.

Question 33Marketing strategy and planning

A firm applies a concentration strategy by targeting a single segment. Which condition most strengthens that choice?

  1. The firm has spare capacity and wants to spread risk across many segments
  2. The segment is shrinking and served by several larger, well-resourced rivals
  3. Buyer needs across all segments are converging toward a single standard offer
  4. The segment is growing, under-served and the firm can defend it with specialised capability Correct answer.

Explanation

Concentration works best when the chosen segment offers growth, weak competition and a fit with distinctive firm capability. Shrinking or heavily contested segments, or a desire to diversify risk, argue for broader coverage instead.

Question 34Marketing strategy and planning

A firm's marketing dashboard reports that cost per acquisition rose 30% while conversion rate held steady. Which diagnostic step is most useful next?

  1. Decompose the funnel to see whether traffic quality or media cost per click changed Correct answer.
  2. Reduce the target segment definition to a single demographic group
  3. Increase the overall budget so fixed campaign costs are spread further
  4. Conclude that the creative is failing and replace all campaign assets

Explanation

With conversion unchanged, a rising acquisition cost points upstream to traffic cost or traffic quality, so decomposing the funnel isolates the driver. Replacing creative, raising budget or narrowing segments does not follow from the evidence.

Question 35Marketing strategy and planning

A firm plans a new product launch and must decide whether to be a pioneer or a follower. Which factor most favours a follower strategy?

  1. Pioneering costs such as buyer education and technology risk can be avoided while demand is proven Correct answer.
  2. Distribution partners commit exclusively to the first brand to enter
  3. The firm holds patents that would block imitation of the core technology
  4. Buyer switching costs are high once a first supplier is chosen

Explanation

Followers benefit by letting pioneers absorb education costs and demand uncertainty, then entering a proven market. Patents, high switching costs and exclusive early distribution all advantage the pioneer instead.

Question 36Marketing strategy and planning

A marketing team must forecast demand for a product with no sales history. Which combination of methods is most defensible?

  1. Extrapolating a straight-line trend from zero sales
  2. Relying solely on the sales force's optimistic quota commitments
  3. Executive judgement combined with analogous-product analysis and purchase-intent survey data Correct answer.
  4. Applying the category's average growth rate without adjustment

Explanation

For genuinely new products, triangulating expert judgement, analogies to similar launches and stated purchase intent gives a reasoned estimate. Trend extrapolation needs history, and unadjusted averages or quota optimism ignore the product's specifics.

Question 37Marketing strategy and planning

A firm's marketing plan contains a contingency plan. What does that element specify?

  1. Actions to take if key assumptions, such as a forecast growth rate, prove wrong Correct answer.
  2. The fixed annual budget approved by the finance committee
  3. The detailed creative brief for the flagship campaign
  4. The organisational chart of the marketing department

Explanation

Contingency planning sets trigger points and alternative responses in case critical assumptions fail. Budgets, creative briefs and org charts are separate planning elements, not contingency provisions.

Question 38Marketing strategy and planning

A firm's plan assumes a 6% market growth rate. Mid-year, independent data show growth of 1% and a new low-cost entrant. Which planning response best reflects control-cycle logic?

  1. Continue the approved plan unchanged until the annual review date
  2. Immediately cut all marketing spend to protect short-term margin
  3. Reassign the plan to a new agency and restart the planning cycle
  4. Compare actual results against the plan's targets, identify the variance cause, and revise the strategy and budget Correct answer.

Explanation

Marketing control compares performance with plan, diagnoses deviations from assumptions and takes corrective action, which here means revisiting strategy and resources. Waiting, indiscriminate cuts or restarting planning ignore the diagnostic step.

Question 39Marketing strategy and planning

A firm allocates budget using the competitive-parity method. Which criticism of that method is most fundamental?

  1. It assumes rivals' spending levels are optimal and ignores the firm's own objectives and opportunities Correct answer.
  2. It cannot be applied when competitors do not disclose their budgets
  3. It depends on subjective judgement about what tasks are needed to hit objectives
  4. It requires detailed estimates of the cost of each communication task

Explanation

Competitive parity treats industry spending as a benchmark, yet rivals may overspend or underspend and the method ignores the firm's own goals and market opportunities. The task-based criticisms apply to objective-and-task budgeting instead.

Question 40Marketing strategy and planning

A brand competes in a market where retail buyers control shelf access and consumers show low involvement. Which planning priority is most appropriate?

  1. Secure distribution and trade terms, supported by in-store visibility that drives salience at the point of purchase Correct answer.
  2. Reduce trade margins to fund direct-to-consumer acquisition
  3. Build a long-term emotional brand narrative through mass-media storytelling
  4. Invest in a premium price architecture to signal superior quality

Explanation

When gatekeeper retailers control access and consumers decide at the shelf with little involvement, winning distribution and point-of-purchase salience is decisive. Emotional storytelling, premium signalling and cutting trade margins do not fit these conditions.

Question 41Marketing research and analytics

A marketing team wants to know whether a new package design increases purchase intent. Which research design best supports a causal claim about the package design?

  1. A focus group in which consumers discuss both package designs
  2. A cross-sectional survey measuring satisfaction with the current package
  3. A randomized controlled experiment comparing purchase intent between the new and existing package Correct answer.
  4. An analysis of historical sales data before and after the design change

Explanation

Causal claims require manipulating the independent variable while controlling confounds, which randomization accomplishes by balancing extraneous factors across conditions. The other designs observe variables as they occur and cannot rule out alternative explanations such as seasonality or selection.

Question 42Marketing research and analytics

In marketing analytics, which metric best captures the percentage of customers who stop doing business with a brand over a given period?

  1. Click-through rate
  2. Conversion rate
  3. Churn rate Correct answer.
  4. Reach

Explanation

Churn rate measures the proportion of customers who discontinue their relationship with a brand during a defined period. It is a retention-side metric, distinct from acquisition and engagement measures such as conversion, click-through, and reach.

Question 43Marketing research and analytics

A researcher asks shoppers to rate a store's cleanliness on a 7-point scale from very poor to very good. Which level of measurement does this scale represent?

  1. Ordinal Correct answer.
  2. Ratio
  3. Interval
  4. Nominal

Explanation

The response categories are ranked from worse to better, but the distances between adjacent points are not guaranteed to be equal and there is no true zero. That combination defines an ordinal scale.

Question 44Marketing research and analytics

Which sampling method gives every member of a defined population a known, nonzero chance of selection?

  1. Quota sampling
  2. Convenience sampling
  3. Probability sampling Correct answer.
  4. Judgment sampling

Explanation

Probability sampling relies on random selection so that each population member has a calculable, nonzero inclusion probability, enabling statistical inference. The other methods select respondents non-randomly and cannot support formal generalization with known error.

Question 45Marketing research and analytics

Which analytics tool is most appropriate for visualizing trends in monthly sales across several regions over three years?

  1. A word cloud of product names
  2. A single bar chart of annual totals
  3. A line chart with one series per region Correct answer.
  4. A pie chart of total sales by region

Explanation

Line charts display change over a continuous time axis and allow multiple series to be compared, making them suited to tracking regional trends across months. Pie and bar summaries collapse the time dimension, and word clouds do not encode quantitative values.

Question 46Marketing research and analytics

A brand tracks the percentage of survey respondents who name it first when asked to recall a product category. Which construct is being measured?

  1. Purchase frequency
  2. Brand loyalty
  3. Top-of-mind awareness Correct answer.
  4. Market share

Explanation

Top-of-mind awareness is the share of respondents who spontaneously name a brand first in an unaided recall task. It reflects salience in memory rather than behavior such as buying or share of sales.

Question 47Marketing research and analytics

Which statement correctly describes the purpose of a confidence interval in a market research estimate?

  1. It states the exact population value the sample will reproduce.
  2. It gives a range of plausible population values consistent with the sample data. Correct answer.
  3. It reports the percentage of respondents who answered a question.
  4. It measures the strength of association between two variables.

Explanation

A confidence interval quantifies sampling uncertainty by providing a range that, at a stated confidence level, is expected to contain the true population parameter. It does not pinpoint an exact value or describe response distribution or association strength.

Question 48Marketing research and analytics

A firm segments its customers by age, income, and household size. Which segmentation base is being used?

  1. Behavioral
  2. Geographic
  3. Demographic Correct answer.
  4. Psychographic

Explanation

Age, income, and household size are observable population characteristics that define demographic segmentation. Psychographic bases use attitudes and lifestyles, behavioral bases use usage patterns, and geographic bases use location.

Question 49Marketing research and analytics

A researcher wants to test whether average satisfaction differs across three store formats. Which statistical technique is most appropriate?

  1. Simple linear regression
  2. One-way analysis of variance Correct answer.
  3. Paired t-test
  4. Chi-square test of independence

Explanation

Analysis of variance compares means across three or more independent groups while controlling the overall Type I error rate. A t-test handles only two groups, chi-square addresses categorical association, and simple regression fits one predictor.

Question 50Marketing research and analytics

A conjoint study reports high utility for a low price level. How should the analyst interpret this utility?

  1. Price is irrelevant to consumer choice.
  2. The low price level guarantees the largest market share.
  3. Respondents could not evaluate the price attribute.
  4. Lower price contributes positively to overall preference relative to the reference level. Correct answer.

Explanation

Conjoint utilities express the relative preference contribution of each attribute level, so a positive utility for low price means it increases overall preference versus the baseline. Utilities are relative and do not by themselves determine share, which also depends on other attributes and competitive context.