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Mark1012 Final Exam

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Australian School of Business

School of Marketing

MARK1012: Marketing Fundamentals
Final Examination Session 2, 2012
Instructions: (Please read these instructions carefully)

 This examination paper consists of THREE sections: Section A (Fill in the gaps); Section B (Short essay questions) and Section C (Multiple choice questions). It has SEVENTEEN (17) printed pages excluding this page.  Printing is double sided, check each page carefully.  You have two [2] hours to complete this examination plus 10 minutes reading time.  Read all the questions carefully and answer all questions as instructed.  Questions must be answered in ink.  Write all your MULTIPLE CHOICE answers (SECTION C) in the Generalised Answer Sheet provided. Note that there are 50 (FIFTY) Multiple Choice Questions.  Print your full name and Student number {z… } on the first page of each book and sign  Use of UNSW approved calculators is permitted. No other material is to be taken into the examination room.  This paper accounts for 40% of your course grade (However, it is marked out of 100).  You may NOT retain this paper.


(9x2= 18 marks)

(Please write your answer in the gaps provided in each statement) Each of the nine (9) statements below focuses on a specific marketing concept/tool/idea. Fill in the gaps using the appropriate word/phrase


Companies with many different products or brands often create a _____________ management organisation; while companies that sell one product line to many different types of markets with different needs and preferences, tend to prefer a ______________ management organisation. While resellers are marketing _____________ that can help an organisation to promote, sell and distribute its goods to final buyers, the marketing service agencies are the ______________ agencies that help the organisation to target and promote its products to the right markets. Studies involving a small number of individuals, such as focus groups or in‐depth one‐on‐one interviews, are known as ____________ research. Studies involving a lot of people and utilising statistical tools and techniques are known as ____________ research. The demand for business goods is ultimately _______________ from the demand for consumer goods. When demand is _____________, this indicates that demand is not affected greatly by price changes. _______________ segmentation divides a market into groups based on social class, lifestyle or personality characteristics. _____________ segmentation, on the other hand, divides a market into groups according to occasions when buyers get the idea to buy, make a purchase or use a product. __________ products are compared on such bases as suitability, quality, price, and style; whereas ____________ have unique characteristics or identification with buyers and are specifically sought by the consumer. In new product adoption, _____________ help get the product exposure: but are not typical consumers; the typical consumers are known as the __________ ___________. In ________ strategy the producer promotes the product to wholesalers, the wholesalers promote to retailers and the retailers promote to consumers; _________ strategy, on the other hand, calls for spending a lot on advertising and consumer promotion to build up consumer demand. Sales promotion is a _________‐term incentive to encourage purchase of a product or service; _________ selling is the interpersonal arm of the promotion mix, used particularly in complex selling situations such as business‐to‐business marketing.
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There are three questions in this section. Answer any TWO of these questions in the spaces provided at the end of this section (i.e., pp. 2‐4).

Question B1 (Answer both parts of the question)

a. A farmer sells strawberries grown on his/her farm directly to consumers. What is this channel called? List three advantages of this channel. b. What pricing objectives would you recommend a retailer of prestige products set? Why? Question B2

Discuss two ways explaining how distribution channels can create efficiencies and provide an example of each. Question B3 A company has developed an innovative product. What pricing strategies are available to this company? Explain one of the available strategies mentioning the conditions that must be met for the strategy to work. Write your answers to the 2 selected questions in the spaces provided below, clearly indicating each question number. Answer to Question No: ___ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________
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___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ Answer to Question No:___ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________
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___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________

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SECTION C: (53 Multiple choice questions)* (61 marks)
Answer ALL questions by marking the relevant answer in pencil on the Generalised Answer Sheet supplied.

*Each of questions 2, 7, 15, 17, 20, 21, 33 and 47 (8 questions) is worth 2 marks; each of the remaining 45 questions is worth 1 mark. There is no negative marking.

Please supply the most appropriate answer.

Read the Mini‐Case A in the box below and answer questions 1 ‐ 4. Three friends discuss their businesses over a regular morning coffee catch‐up. John reports that he has recently placed an advertisement in Women's Day since he thinks his customers will be most exposed to it. Louis comments warily that she is tired after trawling through 600 suggestions for improvement slips to help her decide on in‐store service levels. Evelyn announces that she has turned to using recycled packaging because reports show it will benefit her community, even though her customers have not expressed a desire for this. Sonia concedes that she has had to distribute emails to key clients telling them not to place orders until further notice for her premium coffee beans because severe frosts in Africa had reduced supply.


Refer to Mini‐Case A. Which of the friends is engaging in marketing? A) B) C) D) E) Louis only. John only. John and Louis. Evelyn, Louis, John. All of them.


Refer to Mini‐Case A. While Sonia's actions represent ____________ Evelyn’s actions represent ______________ A) B) C) D) E) demarketing; the societal marketing concept crisis resolution; good public relations, response to customer needs; the product concept societal marketing ; the marketing concept demand management; social work


Refer to Mini‐Case A. Which of the following comments about Louis is closest to the truth? A) B) C) D) E) She shouldn't waste her time with two minute surveys. She needs to invest money in professional market research services. She is over analysing a small decision. She is engaging in marketing management. She is engaging fully in the product concept.
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Refer to Mini‐Case A. Given John's comment he needs to: A) monitor the success of his promotion and then look into more prestigious magazines that can confer quality on his product. B) monitor the success of his promotion. C) focus less on promotion as it really is a minor part of the broader marketing management process. D) engage in marketing management. E) start thinking like a marketer.


The process of matching an organisations goals and capabilities with changing market opportunities is known as: A) B) C) D) E) strategy. strategic matching. strategic fit. strategic linkage. planning.

Read the Mini‐Case B in the box below and answer questions 6 – 8. Mini‐Case B: Lenny is putting together a plan which covers all of the functions of his business. Boris is writing his plan specifically to acquire and maintain customers. Lola, the CEO of a large MNC has just finalised the objectives for her portfolio of businesses. Sonia works for Lola and has been given the autonomy to write a mission statement and set marketing objectives for the team she manages. 6) Refer to Mini‐Case B. Given the evidence, Sonia is likely to manage a: A) grocery store. B) sales team. C) SBU. D) BUS. E) strategic entity. 7) Refer to Mini‐Case B. Lenny is currently involved in writing a ________; while Boris is writing a_________ A) business plan; marketing plan B) marketing plan; business plan C) strategic plan; marketing plan D) functional plan; business plan E) building plan; strategic plan
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Refer to Mini‐Case B. Lola is developing her: A) B) C) D) E) management strategy. corporate strategy. marketing strategy. business plan strategy. portfolio strategy.

Read Mini‐Case C boxed below and answer questions 9 – 13.

Mini‐ Case C: The marketing manager of a national brand of flavoured milks is considering her micro and macroenvironment in order to complete the situation analysis for this year’s marketing plan. She notes some key points. Small traders are not consistently affording appropriate fridge space to flavoured milks. Energy drinks are continuing to hold favour in the teen market. Young adults aged 18‐25 are more conservative than their slightly older cohort aged 25‐35. UHT or long life milk has progressed to the point where taste tests show little noticeable difference. 9) Refer to Mini‐Case C. The SWOT analysis is the tool often used to conduct a situation analysis. What part(s) of the SWOT acronym are relevant to the macroenvironment?

A) B) C) D) E)


10) In Mini‐Case C above, the fridge space problem represents a __________

A) B) C) D) E)

microenvironment weakness. macroenvironment weakness. technological environment. macroenvironment threat. microenvironment threat.

11) Refer to Mini‐Case C. The product concerned is considered in some states an Australian icon. Given this, which of the key points listed has the clearest strategic implications?


Small traders are not consistently affording appropriate fridge space to flavoured milks. B) Energy drinks are continuing to hold favour in the teen market. C) Young adults aged 18‐25 are more conservative than their slightly older cohort aged 25‐35. D) UHT or long life milk has progressed to the point where taste tests show little noticeable difference. E) Statements B and C above
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12) Refer to Mini‐Case C. What would be the most logical strategic implications for the prominence of energy drinks in the teen market? A) Reduce the resource allocation aimed at marketing toward this group. B) Promote the brand as being high in energy. C) Identify opinion leaders amongst this group and provide them with free product. D) Identify favoured celebrities and have them endorse the product. E) All are feasible. 13) Refer to Mini‐Case C. Having long life milk means the product can stay longer in the fridge before having to be replaced. The main benefit of this is to the firm which can reduce production and distribution costs. This benefit has been derived through changes in the ____________ A) technological environment. B) economic environment. C) distribution environment. D) physical environment. E) political environment. Read Mini‐Case D boxed below and answer Questions 14 – 16. Mini‐ Case D: In the marketing research department at Consolidated Diversified, Boris spends his time tracking down relevant census data. Sonia often gathers preliminary information prior to a full‐scale project. John runs statistical tests on the data collected. Louis meets with selected consumers to discuss aspects of the company's offers. Evelyn is the chief analyst who draws conclusions for the department's reports. 14) According to Mini‐Case D, Evelyn is involved in which step of the marketing research process? A) Defining the problem and research objectives B) Developing the research plan C) Implementing the research plan D) Interpreting and reporting the findings E) All of the above. 15) According to Mini‐ Case D, Louis conducts _________ while Sonia is most likely involved in ___________. A) observational research; experimental research B) focus group interviewing; exploratory research C) telephone interviewing; sampling research D) experimental research; descriptive research E) sampling research; statistical research
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16) According to Mini‐Case D, John’s work with statistics is probably used in __________. A) Focus group interviewing B) Sampling C) Developing structured surveys D) Exploratory research E) All of the above. Read the Mini‐ Case E in the box below and answer questions 17 – 19. Mini‐Case E: Sam loves basketball and he purchases basketball boots that he has seen in advertisements featuring Le Bron James and Shaquille O'Neil. Sarah buys the same toothpaste that her parents buy. Andrew is looking to purchase dental insurance for his family. Peter deliberately does not wear visible brands though his clothes are typically expensive labels.

17) Refer to Mini‐Case E. Sam's purchase decision has been affected by his _________; while Andrew's purchase is probably influenced by _______

A) B) C) D) E)

lifestyle; household type. membership group; psychographics family, his dental hygiene naivety, reference group aspirational group; his family life cycle stage

18) Refer to Mini‐Case E. Sarah is satisfying ________ needs when purchasing this brand of toothpaste.

A) B) C) D) E)

physiological psychological belonging grocery social

19) Refer to Mini‐Case E. Which of the following factors that influence consumer behaviour would best explain Peter’s behaviour? A) Learning and occupation B) Consumer lifestyle and perception C) Culture and household type D) Social class and self concept E) Marketing mix
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Read the Mini‐Case F in the box below and answer questions 20 – 22.

Mini‐Case F: Peter has just decided on the segment to target for his companies new offering. He has made a check list to help finalise his decision: (1) he has determined that the ideal segment profile is measurable within New Zealand, (2) he has determined where they live and shops as well as what media they are exposed to, (3) he knows that, if this market’s potential is realised, it would more than triple his current sales, and (4) he has the resources and connections to get the product to this market. 20) Refer to Mini‐Case F. The first and second items on Peter’s checklist represent the market segment’s _______________ and ______________, respectively. A) potential, identification B) growth, behavioural intentions C) measurability, accessibility D) identification, lifestyle E) accessibility, measurability 21) Refer to Mini‐Case F. The third and the fourth items on Peter's checklist represent the market segments____________ and _____________, respectively. A) profitability, approachability B) volume, accessibility C) sustainability, marketing requirements D) potential, measurability E) substantiality, actionability. 22) Refer to Mini‐Case F. Peter has identified an unmet need in this segment. Given his evaluations thus far he should now _____________ A) confirm the segment and proceed with setting his objectives. B) identify the segment's profile with relevant criteria. C) brand the product in a meaningful way for the segment. D) implement his marketing mix. E) all of the above. 23) The retail price of a product is part of its ____________________ A) core dimension. B) actual dimension. C) augmented dimension. D) price promotion dimension. E) All of the above.
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24) Ronald will drive 500 km to buy an item for his Elvis Presley memorabilia collection. It is hard to find items associated with Presley because there are so many collectors of his memorabilia. In terms of the consumer goods classification, Presley memorabilia is an example of a ________ good.

A) B) C) D) E)

convenience nondurable specialty heterogeneous shopping homogeneous shopping

25) Product‐line length _____________

A) B) C) D) E)

tends to shorten over time. is determined by product classification. refers to the total number of products manufactured by a company. is shaped by company objectives. is often classified in terms of convenience, shopping, and specialty goods.

26) The Wexner Company produces four models of middle‐quality desks. Wexner's sales force reported that several accounts had asked for a lower priced desk and some accounts also needed a top‐of‐the‐line desk. If Wexner adds lower and higher quality desks to its product line, it will have engaged in a (n) _____________ strategy.

A) B) C) D) E)

downward stretch upward stretch line modernisation two‐way stretch line‐filling

27) If the product manager for one of the world's largest lingerie manufacturers found its Playtex bras were selling well and its Bali bras were selling slowly, the product manager might try line ________ to increase sales for the slower end of the product line.

A) B) C) D) E)

harvesting featuring augmentation modernisation filling

28) The most enduring meanings of a brand are its:

A) B) C) D) E)

values, benefits, attributes, and personality. attributes and benefits. personality, attributes, and benefits. values, culture, and personality. attributes, benefits, and values.
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29) Brand equity: A) is tied closely to specific product lines. B) may actually hinder the launching of brand extensions. C) reduces the amount of product management effort a company needs to expend. D) is closely related to the number of customers who are devoted to the brand. E) will be destroyed when the product's manufacturer launches a premium pricing strategy. 30) The fact that Louis paid only $10 to see the 11:30 am showing of the new Star Wars movie while those that saw the 7 pm show paid $16 is an example of a strategy for dealing with the ________ characteristic of services. A) intangibility B) variability C) inconsistency D) inseparability E) perishability 31) Which of the following is (are) not true about the product life cycle [PLC] concept? A) PLC is a sound theory that describes industry sales and profits for a product idea across product markets. B) PLC is a reliable predictor of a product’s sales growth rates and profitability. C) both A and B are untrue about PLC. D) PLC is a useful tool for predicting profit over the life of a product and a means of setting marketing budgets. E) PLC is broadly correct in describing sales trends over time. 32) The trend to shorter product life cycles means that ______________ A) global marketing may be the only way to achieve a profit before the product becomes obsolete. B) manufacturers will innovate more because they can expect to see quicker profits. C) costs of getting a product ‘up and running’ are decreasing. D) patent protection is offering adequate protection to innovators. E) even a small market can be profitable for an innovator. 33) A currently accepted or popular style is a (n) ________, while an idea that is fashionable only with a certain group of enthusiasts is a (n) _________. A) fad, fashion B) fashion, fad C) craze, trend D) assortment, craze E) craze, fashion
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34) When a firm attempts to evaluate a new product and its marketing program in a setting that approximates the future competitive environment, the firm engages in:

A) B) C) D) E)

business analysis. concept testing. strategic marketing test marketing. all of the above.

35) __________ is/are part of effective marketing communications because they make statements about the nature of the product and the image it intends to convey.

A) B) C) D) E)

The package in which the product comes The price of the product The type of retail outlet where the product is available A and B A, B, and C

36) The hierarchy of effects includes all of the following EXCEPT __________.

A) B) C) D) E)

demand knowledge awareness purchase loyalty

37) Which of the following statements about the percentage‐of‐sales method of budgeting is true?

A) B) C) D) E)

This method implies that sales are an outcome of production. The percentage‐of‐sales method is the least used bottom‐up method for budgeting. This method implies that sales cause promotional outlays. Firms using this method are inclined to spend more on promotion when revenue decreases. The percentage‐of‐sales method is the only top‐down budgeting method used to determine promotional budgets.

38) A small car manufacturer is launching an advertising campaign, for its new model, which will run for eight weeks. In weeks three to six the new 30 second television ads are run, intermittently with shortened 15 second versions. The focus of the ads is on the target markets desired features, classic design and safety. At this stage the company is likely to be trying to achieve which objectives(s)?

A) B) C) D) E)

Awareness and Knowledge Liking and Preference Preference and Conviction Conviction and Purchase Purchase
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39) Every advertisement and every advertising campaign should _____________. A) have a balanced mix of aesthetic and emotional appeals B) feature an attractive personality such as sporting heroes and famous film/TV personalities C) consider possible competitor response and broad based objectives such as ‘overall promotion of the product’. D) pursue specific, clearly defined objectives based on the organisation’s overall marketing and promotion strategy E) A, B and C above

40) Public relations is used to ___________ A) lobby governments in attempts to get them to enact favourable legislation B) repair damage to a corporation’s image, e.g. after product tampering extortion attempts C) ‘talk up’ share prices D) communicate with shareholders E) all the above

41) When might a sales promotion lead to long‐term adoption of a brand? A) When the promotion is extremely enticing. B) When the sales promotion is used as an extension of image advertising. C) When demand is inelastic for the product. D) When demand is elastic for the product. E) When the sale promotion is supported by online marketing.

42) Logistics is a matter of _______________ A) trade‐offs between cost areas such as transport versus production lot quantity costs. B) ensuring that least cost physical distribution is achieved. C) making increased sales and then transporting them at optimal costs. D) reducing the number of warehouses companies use. E) all of the above.

43) Effective marketing logistics network management can ____________ A) provide cost advantages. B) provide delivery time advantages. C) lower prices to the final customer. D) improve profits for suppliers and manufacturers. E) do everything stated above (i.e., in A, B, C & D).

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44) Which of the following functions do members of the marketing channel typically perform as they move merchandise from one level to the next? A) The creation of form utility. B) Activities‐based cost accounting. C) Risk taking. D) Lengthening the channel so as to provide more specialised service. E) Eliminating unnecessary channel functions.

45) Which of the following marketing channels is likely to represent the consumer marketing channel behind Dymock's online book store? A) Manufacturer to consumer. B) Wholesaler to consumer. C) Retailer to consumer. D) Manufacturer to retailer to consumer. E) None of these.

46) Two or more unrelated companies at one channel level join together to pursue a new marketing opportunity in _____________ A) vertical marketing. B) an administered VMN. C) homogeneous marketing. D) horizontal marketing. E) partnership marketing.

47) IBM has long been perceived as the leader in computer technology. As such, for many years IBM computers were available only from selected, authorized IBM retailers. Currently, IBM has changed its distribution strategy. Consumers can now purchase IBM computers at several well‐known department and discount stores, including Wal‐ Mart and K‐Mart, located throughout the country. Initially, IBM employed __________ distribution and made its products available only through a single retail outlet in specific locations. Currently, as computers have become more of a shopping good, IBM is using __________ distribution, as it seeks to broaden the degree of its distribution and make its computers available in several retail outlets in specific areas. A) intensive; exclusive B) exclusive; intensive C) intensive; selective D) selective; exclusive E) exclusive; selective

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When demand is __________, increases in price result in increases in total revenues while decreases in price result in decreases in total revenue. A) B) C) D) E) inelastic supply‐driven flexible elastic synergistic

Read the Mini‐Case G in the box below and answer questions No. 49 ‐53. Mini‐Case G: Diamond Machine Technology [DMT] makes a tool for sharpening the blades of pruning shears and glass clippers. The company has invested $250,000 in developing this sharpener. This tool, which is about the size of a piece of chewing gum, costs $3 to make. Fixed costs for the sharpener is $10,000. The company expects to sell 100,000 sharpeners this year. DMT’s markup on sales is 30 percent, and it wants to earn a 20 percent ROI. Use the space below the box for computation purposes. Based on your computation, answer questions 49‐53 (next page).

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49) Refer to Mini‐ Case G. Unit cost of the sharpener is __________. A) $ 5.60 B) $ 5.50 C) $ 3.10 D) $ 3.00 E) $ 2.60 50) Refer to Mini‐ Case G. Markup price for the sharpener is _____________. A) $8.00 B) $4.43 C) $4.31 D) $3.71 E) $2.38 51) Refer to Mini‐ Case G. The sharpener’s target return price is ____________. A) $ 9.60 B) $ 5.32 C) $ 5.17 D) $ 3.72 E) $3.60 52) Refer to Mini‐ Case G. The sharpener’s Break even units with markup price is ___________. A) 181818 units B) 41958 units C) 16667 units D) 6993 units E) not given in A, B, C or D 53) Refer to Mini‐ Case G. The sharpener’s Break even units with target return price is ___________. A) 181818 units B) 41958 units C) 16667 units D) 6993 units E) not given in A, B, C or D End of Exam Good Luck

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