🔁 Review🛠️ Skill BuilderMultiple choice sections are Review. Case study sections are Skill Builders.
A self-grading practice test for Unit 2 — Marketing, Tasks 1 through 8: 70 questions on target customers, CAC and CLV, consumer behavior, market research, products, pricing, channels, and promotion. Tap an answer to see instantly whether you're right, with an explanation. These are practice questions (not the ones on your real test), so focus on understanding each idea.
1. A bakery's loyalty sign-up form asks for each customer's age and ZIP code, plus what they value most when choosing a treat. Which correctly labels the two kinds of data?
Answer: B. Demographic data are measurable traits such as age, income, and location. Psychographic data describe values, interests, attitudes, and lifestyles. Who reported the data doesn't change its type.
2. Why does a new business usually pick a specific target customer instead of marketing to everyone?
Answer: A. A new business has limited money and time, so focusing on the customers most likely to buy gets the most from each dollar. Targeting doesn't lower production costs or keep rivals out, and broad ads reach more people; targeted ads just waste less money on unlikely buyers.
3. Which statement is the best example of a customer profile?
Answer: B. A customer profile describes the traits, needs, and behaviors of likely customers. “Anyone who gets hungry” is too broad to guide decisions, the ingredients line describes the product, and 300 meals a week is a sales goal.
4. A phone-case startup spent $1,800 on social media ads and $600 on a pop-up booth last month and gained 120 new customers. What was its customer acquisition cost (CAC)?
Answer: C. CAC = total spent to gain customers ÷ new customers = ($1,800 + $600) ÷ 120 = $20. Using only the ad spending gives $15, using only the booth gives $5, and $2,400 is the total spending, not the cost per customer.
5. A subscription box company has a customer lifetime value (CLV) of $90 and a customer acquisition cost (CAC) of $120. What does this most likely mean?
Answer: D. When it costs more to win a customer ($120) than that customer is expected to bring in ($90), each new customer loses money. More ad spending would make the problem bigger; the business needs to lower CAC or raise CLV.
6. A dentist gives current patients a $25 credit when a friend they recommend books a visit. The dentist is using:
Answer: C. A referral is a recommendation from an existing customer that leads to a new customer. Rewarding patients for referrals is a low-cost way to gain customers, which can lower CAC.
7. A retailer discovers that hackers accessed its database and copied customers' names, emails, and card numbers. For the retailer, this event is best described as:
Answer: A. A data breach is an unauthorized release or exposure of sensitive information. Identity theft is what happens if a criminal later uses someone's information fraudulently, such as opening a credit card in their name.
8. A customer learns their Social Security number was exposed in a data breach. Which step best prevents a thief from opening new credit accounts in their name?
Answer: B. A credit freeze stops lenders from pulling your credit report, so new accounts can't be opened in your name. It's free at Equifax, Experian, and TransUnion, and you can lift it temporarily when you apply for credit yourself. Reviewing your report only spots fraud after it happens, closing existing accounts doesn't stop a thief from opening new ones, and social media passwords don't protect a Social Security number.
9. A student buys a certain brand of sneakers after noticing that almost everyone in her friend group wears them. Which factor most influenced the purchase?
Answer: C. Sociological factors are social influences such as family, friends, culture, and the groups people belong to. Her friend group shaped the choice. Situational factors are temporary circumstances, and personal factors are individual traits like age, income, and lifestyle.
10. A traveler whose flight is delayed six hours buys a $14 airport sandwich she would normally never pay for. Which factor best explains the purchase?
Answer: C. Situational factors are temporary conditions that affect a purchase, like being stuck in an airport. Her friends, her personal traits, and loyalty to a brand didn't drive this purchase; the circumstance did.
11. An online store shows “Only 3 left in stock!” next to a jacket. Which persuasion principle is it using?
Answer: B.Scarcity: people place more value on things that seem limited or hard to get. Using it honestly is fine; claiming low stock that isn't real is deceptive.
12. A toothpaste ad features a dentist in a white coat recommending the brand. Which persuasion principle is the ad using?
Answer: A.Authority: people are more likely to follow recommendations from experts. Consensus would instead show that many other people use the product.
13. A restaurant's website says, “Over 10,000 five-star reviews—see why everyone's talking about us.” Which persuasion principle is it using?
Answer: B.Consensus (social proof): people are influenced by the actions and opinions of others. Thousands of reviews signal that choosing this restaurant is the popular, safe choice.
14. A cosmetics counter hands out free samples, and many shoppers then feel they should buy something. Which persuasion principle explains this?
Answer: B.Reciprocity: people feel obligated to return a favor or gift. The free sample creates a feeling that they owe the store a purchase.
15. A charity asks people to sign a short online pledge supporting clean water, then later asks the same people to donate. Which principle is the charity relying on?
Answer: A.Consistency: once people make a small commitment, they tend to act in ways that match it, so pledge signers are more likely to donate.
16. A local credit union's ads say, “We're not just neighbors—we're family. Owned by this town, for this town.” Which persuasion principle is it using?
Answer: B.Unity: people are influenced by those they see as part of their own group or identity, and “owned by this town, for this town” appeals to shared identity. Liking depends on a specific likable person, such as a friendly spokesperson or someone who gives compliments. This ad has no spokesperson; it claims a shared “one of us” identity.
17. A grocery store notices that most of its customers buy snacks and drinks on Friday afternoons. This is best described as:
Answer: B. Purchasing patterns are recurring habits in how and when customers buy. Because this one repeats every week, the store can schedule staff, stock, and promotions around it.
18. Which is an example of primary research for a new smoothie shop?
Answer: C. Primary research is collected directly by the business for its own question, like interviews. News articles, census data, and published reports were collected by others, which makes them secondary sources.
19. Which of these is qualitative data?
Answer: A. Qualitative data are descriptive: opinions, experiences, and explanations. Visit counts, average spending, and coupon percentages are numbers, which makes them quantitative.
20. Which is a testable business hypothesis?
Answer: B. A business hypothesis is a specific, measurable assumption that evidence can support or reject, and you can count how many sample-takers buy. "Deserve" and "most delicious" are opinions even with a number attached, and "some students might enjoy" is too vague for any result to disprove.
21. A founder confirms she can lease a food truck, get a permit, and hire two trained cooks. Which has she mainly tested?
Answer: A.Feasibility asks whether an idea can realistically be carried out with available resources. Viability asks whether it can succeed and stay sustainable, such as earning enough profit, and she hasn't tested that yet.
22. An online store shows half of its visitors a red “Buy Now” button and the other half a green one, then compares how many visitors in each group buy. This is:
Answer: C. A/B testing compares two versions to see which performs better with real customers. Only the button color changes, so a difference in purchases can be traced to the color.
23. A shoe company wants detailed reactions and discussion about three new designs from a handful of customers. Which research method fits best?
Answer: B. A focus group is a small group discussion that collects in-depth opinions. A survey reaches many people but with less detail, an A/B test measures behavior, and secondary research can't react to designs that don't exist yet.
24. A business wants to show how its monthly sales changed over the past two years. Which visualization fits best?
Answer: A. Line graphs show how data change over time, so 24 monthly points make the trend easy to see. Pie charts show parts of one whole, and stacked bar charts show totals split into subcategories.
25. A gym surveyed 250 members about the one new feature they want most: 110 chose longer hours, 75 more classes, 40 better equipment, and 25 a smoothie bar. What percentage chose longer hours?
Answer: D. 110 ÷ 250 = 0.44 = 44%. 30% is the share for more classes (75 ÷ 250), 16% is better equipment, and 10% is the smoothie bar.
Questions 26–30 refer to the following.PeakPace is a running-coach app that charges $12 per month. Because each extra user costs PeakPace almost nothing to serve, it estimates customer lifetime value (CLV) = monthly price × average months a customer stays subscribed. Last quarter it ran a separate ad campaign for each of three customer groups:
Customer group
Ad spending
New subscribers
Average months subscribed
College runners
$3,000
200
6
New parents
$4,500
150
14
Marathon trainers
$2,400
60
20
26. What was the customer acquisition cost (CAC) for new parents?
Answer: B. CAC = ad spending ÷ new subscribers = $4,500 ÷ 150 = $30. $15 and $40 are the CACs for college runners and marathon trainers, and $168 is the CLV of a new parent.
27. What is the CLV of a marathon trainer?
Answer: D. CLV = $12 × 20 months = $240. $144 counts only one year, $200 is CLV minus CAC, and $40 is the CAC.
28. Measured as CLV minus CAC, which group brings PeakPace the most value for each new subscriber?
Answer: B. CLV − CAC: college runners $72 − $15 = $57; new parents $168 − $30 = $138; marathon trainers $240 − $40 = $200. Marathon trainers are worth the most each, even though they cost the most to acquire.
29. PeakPace's marketing manager still wants to spend the most on new parents next quarter. Which fact best supports that choice?
Answer: A. Total value = subscribers × (CLV − CAC): new parents 150 × $138 = $20,700; marathon trainers 60 × $200 = $12,000; college runners 200 × $57 = $11,400. Each wrong choice misreads the table: college runners had the lowest CAC, and marathon trainers stayed longest and had the highest CLV. (College runners had the most sign-ups, but each was worth much less.)
30. Which action would most directly raise the CLV of college runners?
Answer: A. CLV depends on how long customers stay and how much they pay over that time, so keeping college runners subscribed through the summer adds months. More ads and lower ad spending change how many customers sign up or what it costs to get them (CAC), not how long they stay. A free first month is really an acquisition cost, and it lowers what each customer pays.
Questions 31–35 refer to the following.Glow Lab is developing a fragrance-free face wash for teens. Its business hypothesis: teens will pay $18 for the face wash. First, Glow Lab sent a multiple-choice online survey to 400 teens, and 72% said they would buy it at $18. Then it ran a two-week test in two similar pharmacies near high schools, charging a different price in each:
Version
Price
Shoppers who stopped at the display
Units sold
A
$14
800
96
B
$18
820
82
31. The online survey is best classified as:
Answer: D. Glow Lab collected the survey data itself, which makes it primary. Multiple-choice answers summarized as percentages are quantitative.
32. Which conclusion do the store results support?
Answer: D. Revenue: $14 × 96 = $1,344 and $18 × 82 = $1,476. The higher price sold 14 fewer units but earned $132 more. Version A sold to 12% of the shoppers who stopped (96 ÷ 800); Version B sold to 10% (82 ÷ 820).
33. Why is the store test stronger evidence for Glow Lab's hypothesis than the survey?
Answer: C. Saying you'd buy something costs nothing; buying it costs money. In the survey, 72% said they would buy at $18, but only 10% of shoppers who stopped at the display actually did. Real behavior is the stronger test of a hypothesis.
34. Glow Lab wants one chart showing total units sold for each version, with each bar split into first-time buyers and repeat buyers. Which visualization fits best?
Answer: D. A stacked bar chart shows a total for each category and how much each subcategory contributes to it. A simple bar chart compares the totals but can't show the split inside each bar, a pie chart shows parts of one whole, and a line graph shows change over time.
35. Before launching in 500 stores, what is Glow Lab's best next step?
Answer: B. Two stores is a small sample. Testing in more stores with different shoppers shows whether the results hold up before Glow Lab makes a large, costly commitment.
36. A founder wants to know whether people will pay for weekly meal plans before she builds an app. Which is the best minimum viable product (MVP)?
Answer: D. An MVP is the simplest version that delivers the core value so you can test real demand. Paying customers for a hand-made version prove people will pay. A full app is expensive, friends' opinions aren't purchases, and a logo tests nothing.
37. Which is the strongest value proposition for a meal delivery service?
Answer: C. A value proposition is a clear statement of the value customers get, so it names a specific benefit to the customer. The other choices describe the company's history, its goals, or its resources, not what the customer gains.
38. Which statement best describes a brand?
Answer: C. A brand is the set of associations, perceptions, and expectations customers have about a business. Logos and colors help shape it (they're part of the brand identity), but the brand itself lives in customers' minds. A statement of purpose is a mission statement.
39. Which is the best sign that a product has reached product-market fit?
Answer: A. Product-market fit means the product satisfies strong market demand, and repeat purchases and word of mouth at full price show that. Patents, investors, and feature counts don't prove customers want it.
40. Before ordering 5,000 units from a factory, a startup pre-sells 300 units online to see whether people will pay. This step is called:
Answer: A. Validation tests whether a product idea solves a real customer problem, and paying customers are strong evidence. Ideation is generating ideas, which comes earlier. Product-market fit is the strong demand a business hopes to reach, not the step that tests for it, and an A/B test compares two versions.
41. Sales of a popular sports drink have stopped growing, many rivals sell similar drinks, and the company is adding new flavors to defend its market share. Which stage of the product life cycle is it in?
Answer: D. In maturity, sales growth slows and competition intensifies, so companies defend share with new versions, promotions, or price moves. In growth, sales are rising quickly; in decline, they are falling.
42. Sales of a company's DVD players have fallen every year for five years. Which action best fits this stage of the product life cycle?
Answer: D. Sales falling year after year means the decline stage. Firms usually cut costs, keep only profitable versions, or phase the product out. Heavy launch spending and new factories fit the introduction and growth stages.
43. A candle maker's per-unit cost is $8. She uses cost-based pricing with a 50% markup on cost. What price does she charge?
Answer: C. Cost-based pricing = cost + markup. 50% of $8 = $4, so the price is $8 + $4 = $12. $16 would be a 100% markup, and $4 is only the markup.
44. A T-shirt company pays $2,000 for rent and printing setup, plus $5 in materials for each shirt. If it makes 500 shirts, what is its per-unit cost?
Answer: C. Per-unit cost = total cost ÷ units = ($2,000 + $5 × 500) ÷ 500 = $4,500 ÷ 500 = $9. Leaving out materials gives $4, leaving out rent and setup gives $5, and $4,500 is the total cost.
45. A phone case sells for $25. It costs $9 to make and $3 to ship each one. What is the per-unit profit margin?
Answer: A. Per-unit profit margin = price − per-unit cost = $25 − ($9 + $3) = $13. Forgetting shipping gives $16, and forgetting the cost to make it gives $22.
46. A software company charges $500 a year for a scheduling tool because it saves each customer about $5,000 in staff time, even though the tool costs little to provide. Which pricing strategy is this?
Answer: B.Value-based pricing sets the price from the value customers believe they receive, not from the cost to produce. The $5,000 in savings, not the low cost, drives the price.
47. A new streaming service launches at $3 a month, far below its rivals, to sign up subscribers quickly. It plans to raise the price later. Which pricing strategy is this?
Answer: C.Penetration pricing sets a low starting price to gain market share quickly. The risk is that customers who joined for the low price may leave when it rises.
48. A coffee shop raised its prices 10%, and the number of drinks it sold barely changed. What does this suggest?
Answer: D. When quantity barely changes after a price change, demand is inelastic: customers aren't very sensitive to price. That gives the shop pricing power, the ability to raise prices without losing much demand. Here its revenue went up.
49. Which business most likely has the strongest pricing power?
Answer: D. Pricing power comes from having no close substitutes, which makes demand inelastic, and a patent blocks direct competition. With identical products or many nearby rivals, customers easily switch when the price rises.
50. The only two cement companies in a region secretly agree that both will charge $150 per ton. This is:
Answer: B.Collusion is an illegal agreement between competitors to coordinate prices. Competitive pricing is different: a business looks at rivals' prices and sets its own price independently. The agreement between competitors, secret or not, is what makes this illegal.
51. After a hurricane, a store raises the price of a case of bottled water from $5 to $40. This is an example of:
Answer: A.Price gouging is charging excessively high prices during an emergency or shortage. Many states have laws against it because people in a crisis have little choice.
52. A movie theater charges students $8 and other adults $13 for the same showing. This is an example of:
Answer: B.Price discrimination is charging different customers different prices for the same product. Student, senior, and military discounts are common, legal examples.
53. A farm sells strawberries at its own roadside stand and also through local grocery stores. Which statement is accurate?
Answer: D. In a direct channel the business sells straight to the customer. When the product passes through an intermediary such as a retailer, the channel is indirect.
54. A company sells cleaning supplies in bulk to hotels and hospitals. These sales are:
Answer: A.B2B means one business sells to another business. Hotels and hospitals buy the supplies to run their operations, not as individual consumers.
55. Why might a small craft brand sell on a large online marketplace instead of only on its own website?
Answer: D. A marketplace is an intermediary. It brings a huge audience, but it takes a cut of each sale and controls the shopping experience. Choosing a channel means weighing reach against cost and control.
56. A software company's salesperson visits a school district to demonstrate its product and answer the staff's questions. Which part of the promotional mix is this?
Answer: C.Personal selling is direct interaction between a salesperson and a customer to encourage a purchase. It works well for complex, expensive products bought by organizations.
57. A pizza shop offers buy-one-get-one-free pizzas every Tuesday this month. Which part of the promotional mix is this?
Answer: A.Sales promotions are short-term incentives, such as coupons, discounts, or free samples, that encourage people to buy now.
58. After donating 10,000 meals to a food bank, a grocery chain sends a press release to local news stations. Which part of the promotional mix is this?
Answer: C.Public relations builds and maintains a positive public image, often through news coverage the company doesn't pay for directly. Media advertising is paid space, like a TV commercial.
59. A gym emails a personalized comeback offer to members who canceled in the past year. Which part of the promotional mix is this?
Answer: D.Direct marketing sends promotional messages straight to targeted customers through email, texts, or mailers. Media advertising goes out to a broad audience.
60. A grocery chain analyzes millions of loyalty-card purchases to predict which items each of its stores should stock. The chain is using:
Answer: D.Big data means very large, complex data sets used to find patterns and support decisions, such as predicting demand at each store.
Questions 61–65 refer to the following.Rooted sells a self-watering planter that keeps houseplants watered for up to two weeks. Its per-unit costs are $9 for materials, $2 for packaging, and $4 for shipping. Competitors sell a basic plastic self-watering planter for $24 and a premium ceramic one for $45. Rooted had been charging $30, so to test a price change it raised the price for one month:
Month
Price
Planters sold
September
$30
400
October
$36
360
61. What was Rooted's per-unit profit margin at the $30 price?
Answer: A. Per-unit cost = $9 + $2 + $4 = $15, so the margin is $30 − $15 = $15. $19, $21, and $26 each leave out one or more of the costs.
62. How did Rooted's monthly profit change from September to October?
Answer: C. September profit = 400 × $15 = $6,000. In October the margin was $36 − $15 = $21, so profit = 360 × $21 = $7,560, a rise of $1,560. $960 is the change in revenue, not profit.
63. What do the September and October results suggest about demand for Rooted's planter?
Answer: A. Price rose 20% ($6 ÷ $30) while quantity fell 10% (40 ÷ 400). Quantity changed by a smaller percentage than price, so demand is relatively inelastic, which is why revenue rose (from $12,000 to $12,960). Selling fewer units doesn't by itself make demand elastic.
64. Which value proposition best supports charging $36, more than the $24 basic planter?
Answer: B. A strong value proposition names a specific benefit customers care about, which raises perceived value and supports a higher price. Rooted isn't the cheapest, a founding story isn't a customer benefit, and sizes and colors are features rather than a reason to pay more.
65. A rival launches a $29 self-watering planter. Which response best protects Rooted's pricing power?
Answer: C. Pricing power comes from differentiation, which gives customers a reason not to switch over a few dollars. Cutting to $28 starts a price war that shrinks margins, and agreeing on prices with a rival is illegal collusion. Jumping to $45 puts Rooted against the premium ceramic planter without new value to justify it.
Questions 66–70 refer to the following.Fizzwell makes canned sparkling tea. It sells cases on its own website and also sells to 30 local grocery stores, which resell the cans to shoppers. Last quarter Fizzwell tried four promotions and tracked how many new customers each one brought in:
Promotion
Cost
New customers
Social media ads
$6,000
400
In-store tasting days with free samples
$3,000
250
Referral codes emailed to website buyers
$1,000
125
Recycling event covered by local news
$500
40
66. Which promotion had the lowest customer acquisition cost?
Answer: C. CAC = cost ÷ new customers: ads $15, tastings $12, referrals $8, recycling event $12.50. Social media brought in the most customers and the recycling event cost the least in total, but referrals cost the least per customer.
67. Fizzwell's recycling event, which earned free local news coverage, is an example of:
Answer: D.Public relations builds a positive public image, often through earned news coverage. Fizzwell paid to hold the event, not to buy ad space; the coverage came because the story was newsworthy.
68. Which statement about Fizzwell's grocery-store sales is accurate?
Answer: B. Selling to another business is B2B. Because the stores resell the cans, they're intermediaries, which makes this an indirect channel. Fizzwell's own website is its direct, B2C channel.
69. Fizzwell has $4,000 more to spend next quarter and wants the most new customers per dollar. Based on the data, which plan is best?
Answer: D. For the most customers per dollar, put money where CAC is lowest: referrals ($8) and tastings ($12). The most customers in total (ads) and the lowest total cost (the PR event) are tempting, but they answer different questions. Fizzwell should watch whether referrals can keep growing, since they depend on existing buyers.
70. For a new summer flavor, Fizzwell plans a small “summer-only” batch and will announce it by email to past buyers before anyone else. Which ideas does this plan combine?
Answer: A. A limited, summer-only batch uses scarcity: people value what seems limited. Emailing past buyers directly is direct marketing. Nothing in the plan uses an expert, a free gift, social proof, or a salesperson.
