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2-1

Chapter 02

Developing Successful Marketing And Organizational Strategies Test Item Table by Major Section of the Chapter and Level of Learning

Major Section

of the Chapter

Level of Learning (LL)

Level 1

Knowledge

(Knows Basic

Terms & Facts)

Level 2

Comprehension

(Understands

Concepts &

Principles)

Level 3

Application

(Applies Principles)

Can an “A” in an Ice Cream

Making Course Really

Become a Business?

(pp. 21)

1 2, 3, 4, 5

Today’s Organizations

(pp. 22-27)

8, 9, 10, 11, 12, 13,

16, 17, 18, 23, 24,

27, 29, 33, 34, 39,

40, 41, 52, 53, 64,

65, 66, 67, 69, 70

172, 173, 175, 176

6, 7, 15, 21, 30, 31,

35, 36, 38, 42, 54,

55, 56, 57, 58, 59,

60, 62, 68, 71, 72,

73

170

14, 19, 20, 22, 25,

26, 28, 32, 37, 43,

44, 45, 46, 47, 48,

49, 50, 51, 61, 63

171, 174, 177

Setting Strategic Directions

(pp. 28-32)

74, 79, 83, 84, 85,

86, 87, 88, 109,

115, 121

82, 89, 93, 97, 98,

99, 100, 101, 102,

103, 104

178, 179, 180

75, 76, 77, 78, 80,

81, 90, 91, 92, 94,

95, 96, 105, 106,

107, 108, 110, 111,

112, 113, 114, 116,

117, 118, 119, 120

The Strategic Marketing

Process

(pp.32-38)

122, 123, 128, 129,

130, 136, 139, 140,

146, 154, 160, 164

184, 186, 189

124, 125, 126, 127,

141, 144, 145, 147,

148, 149, 150, 152,

157, 158, 159, 161,

163, 166, 167

181, 182, 187, 188

131, 132, 133, 134,

135, 137, 138, 142,

143, 151, 153, 156,

162, 165

183, 185

Video Case: BP

(pp. 41-43)

168, 169

Appendix A: Building an

Effective Marketing Plan

(pp.44-57)

A-1, A-3, A-7 A-2, A-4, A-5, A-6,

A-8, A-9

A-11

A-10

A-12

NOTE: Bold numbers indicate short essay questions. Underlined numbers indicate visually enhanced questions.


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Test Item Table by Learning Objective and Level of Learning

Learning Objective

(LO)

Level of Learning (LL)

Level 1

Knowledge

(Knows Basic

Terms & Facts)

Level 2

Comprehension

(Understands

Concepts &

Principles)

Level 3

Application

(Applies Principles)

LO1 Describe the core

values, mission,

organizational culture,

business, and goals of

an organization.

1, 8, 9, 10, 11, 12,

13, 16, 17, 18, 23,

24, 27, 29, 33, 34,

39, 40, 41

172,173

A-1, A-3, A-7

2, 3, 4, 5, 6, 7, 15,

21, 30, 31, 33, 36,

38, 42

170

A-2, A-4, A-5, A-6,

A-8, A-9

14, 19, 20, 22, 25,

26, 28, 32, 37, 43,

44, 45, 46, 47, 48,

49, 50, 51

171, 174

A-10

LO2 Explain why managers

use marketing

dashboards and

marketing metrics to

evaluate a marketing

program.

52, 53, 64, 65, 66,

67, 69, 70

175

54, 55, 56, 57, 58,

59, 60, 62, 68, 71,

72, 73, 169

176

A-11

61, 63

177

LO3 Discuss how an

organization assesses

where it is now and

seeks to be in the future.

74, 79, 83, 84, 85,

86, 87, 88, 109,

115, 121

82, 89, 93, 97, 98,

99, 100, 101, 102,

103, 104, 168

178, 179, 180

75, 76, 77, 78, 80,

81, 90, 91, 92, 94,

95, 96, 105, 106,

107, 108, 110, 111,

112, 113, 114, 116,

117, 118, 119, 120

A-12

LO4 Explain the three steps

of the planning phase of

the strategic marketing

process.

122, 123, 128, 129,

130, 136, 139, 140

124, 125, 126, 127,

141, 144, 145

181, 185

131, 132, 133, 134,

135, 137, 138, 142,

143

183

LO5 Describe the four

components of the

implementation phase

of the strategic

marketing process.

146, 154, 155

184, 186

147, 148, 149, 150,

152, 157

187, 188

151, 153, 156

185

LO6 Discuss the two aspects

of the evaluation phase

of the strategic

marketing process.

160, 164

189

158, 159, 161, 163,

166, 167

162, 165

NOTE: Bold numbers indicate short essay questions. Underlined numbers indicate visually enhanced questions.


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Multiple Choice Questions

1. Ben & Jerry's is primarily a marketer of

A. Woodstock memorabilia.

B. chocolate-chip cookie dough franchises.

C. all natural ice cream.

D. programs to save the Amazon rain forests.

E. ideas and activities to enhance corporate social responsibility.

2. Part of the social mission of Ben and Jerry's is

A. to recognize the central role that business plays in society.

B. to maximize economic development in Burlington, Vermont.

C. to make unusual flavors of ice cream.

D. to maximize return on investment for shareholders.

E. to achieve amicable relations with the U.S. government.

3. In its business, Ben & Jerry's has

A. created economic opportunities for those who have been denied them.

B. minimized its negative impact on the environment.

C. supported sustainable and safe methods of food production.

D. shown a deep respect for human beings.

E. done all of the above.

4. Ben and Jerry's mission statement declares its commitment to incorporating wholesome

natural ingredients into its products. An example of action that reflects this commitment is

A. allowing customers to mail order ice cream from the website.

B. contributing 7.5 percent of its pretax profits to philanthropic efforts.

C. purchasing its supplies from socially responsible suppliers.

D. supporting sustainable and safe methods of food production.

E. all of the above.


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5. Which of the following statements about Ben and Jerry's is most true?

A. Unilever owns it.

B. Many people but its products to support Ben & Jerry's social mission.

C. It buys all of its milk and cream from one dairy cooperative.

D. It works with nonprofit organizations to give jobs to and train at-risk youth.

E. All of the above are true about Ben and Jerry's.

6. In today's visionary organizations, it is important to recognize

A. the kinds of organizations that exist.

B. the goals of suppliers.

C. how strategy arises based on the company foundations.

D. the importance of lobbyists in all industries.

E. the value of employee education.

7. Today's organizations must be visionary—that is, they must

A. forecast sales accurately.

B. examine the past carefully so as to learn from mistakes.

C. anticipate future events and respond quickly and effectively.

D. frequently hire new employees to get the best new ideas.

E. develop future scenarios for their existing product line.

8. Organizations that develop similar offerings, when grouped together, create a(n)

A. conglomerate.

B. merger.

C. industry.

D. business.

E. acquisition.

9. __________ is the reward to a business firm for the risk it undertakes in marketing its

offerings.

A. Shareholders' equity

B. Profit

C. Inventory turnover

D. Contribution margin

E. Asset leverage


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10. Profit is

A. the point at which company assets equal company liabilities.

B. the money left over after a business firm's total expenses are subtracted from its total

revenues.

C. the goodwill earned from implementing the societal marketing concept.

D. the money earned when the economic order quantity is maintained.

E. accurately described by all of the above.

11. __________ is the money left over after a business firm's total expenses are subtracted

from its total revenues.


B. Profit



E. Asset leverage

12. A __________ is a nongovernmental organization that serves its customers but does not

have profit as an organizational goal.

A. business firm

B. community action program

C. nonprofit state agency

D. nonprofit organization

E. cooperative

13. A nongovernmental organization that serves its customers but does not have profit as an

organizational goal is called a

A. business firm.

B. nonprofit organization.

C. community action program.

D. manufacturing agent.

E. cooperative.


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14. The American Red Cross, a service firm whose goal is that its revenues will equal its costs

is a

A. business firm.



D. government agency.

E. cooperative.

15. Which statement best describes the most significant difference between a business firm

and a nonprofit organization?

A. Business firms operate with larger budgets than nonprofits.

B. Nonprofit organizations do not carry on economic activities, and business firms do.

C. Nonprofit organizations are concerned with social issues, and business firms are not.

D. Both serve customers, but business firms seek a profit while nonprofit organizations do

not.

E. Nonprofit organizations are publicly owned, and business firms are not.

16. __________ is an organization's long-term course of action designed to deliver a unique

customer experience while achieving its goals.

A. Structure

B. A performance plan

C. Organizational conduct

D. Strategy

E. A long-term action plan

17. An organization's __________ is its philosophical reason for being.

A. direction

B. strategy

C. goal

D. foundation

E. all of the above


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18. An organization's __________ are the fundamental, passionate, and enduring principles

that guide its conduct over time.

A. core values

B. missions

C. culture

D. goals

E. strategies

19. The "HP Way" signifies to employees the fundamental, passionate, and enduring

principles of the company and is an example of Hewlett-Packard's

A. core values.

B. mission.

C. culture.

D. goals.

E. strategy.

20. The Ben & Jerry's website states "Central to the mission of Ben & Jerry's is the belief that

all three parts [product mission, economic mission, social mission] must thrive equally in a

manner that commands deep respect for individuals in and outside the company and supports

the communities of which they are a part." This statement is MOST likely the foundation of

Ben & Jerry's

A. financial strategy.

B. financial statements.

C. core values.

D. human resource strategy.

E. global competitive strategy.

21. Which of the following statements about core values is true?

A. Core values are developed by cross-functional teams.

B. Core values motivate customers.

C. Core values change depending on the financial condition of the firm.

D. Core values capture the heart and soul of the firm.

E. Core values do all of the above.


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22. Which of the following is a stakeholder in the CBS station that airs the TV sitcom Two

and a Half Men?

A. the actors that star in Two and a Half Men

B. the people that provide the sets and the props used in Two and a Half Men

C. the television critics that review Two and a Half Men

D. its television audiences

E. All of the above are stakeholders in the CBS station.

23. Often used interchangeably with "vision" a(n) __________ statement frequently has an

inspirational theme.

A. point of difference

B. mission

C. business map

D. internal situation analysis

E. foundation

24. By understanding its core values, an organization can take steps to define its __________,

a statement of the organization's functions in society, often identifying its customers, markets,

products, and technologies.

A. benefit statement

B. business portfolio

C. functional philosophy

D. mission

E. corporate code

25. The __________ for Lucent Technologies is "To use our unique capabilities to ensure that

our customers thrive, our business grows, and we enrich the personal communications

experience for people around the world."


B. business statement


D. mission

E. organizational culture


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26. The ___________ for American Red Cross is "The American Red Cross, a humanitarian

organization led by volunteers and guided by its Congressional Charter and the Fundamental

Principles of the International Red Cross Movement, will provide relief to victims of disasters

and help people prevent, prepare for, and respond to emergencies."




D. mission

E. corporate code

27. ____________ refers to a set of values, ideas, attitudes, and norms of behavior that is

learned and shared among the members of an organization.

A. Corporate philosophy

B. Benefits statement

C. Organizational culture

D. Corporate profile

E. Business edge

28. George Zimmer the CEO of Men's Wearhouse is known to the public as the bearded

company pitchman who sells suits and sport coats on TV declaring, "I Guarantee it!" He also

says that to be successful, "You've got to have a company that starts with trust and fairness."

He aims to keep his employees happy and loyal. His philosophy sets the

A. corporate confirmation.

B. benefits statement.

C. organizational culture.

D. corporate profile.

E. business edge.

29. A(n) __________ describes the clear, broad, underlying industry category or market

sector of an organization's offering.

A. business

B. culture

C. mission

D. goal

E. strategy


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30. In terms of an organization's business, railroads may have lost market share in the 20th

century because they most likely

A. were too slow and cumbersome.

B. defined their business too narrowly.

C. defined their business too broadly.

D. priced their services too high.

E. were simply an outmoded form of transportation.

31. In the 19th century, railroads may have let other forms of transportation take business

away from them because their definition included only the railroad business, rather than the

broader definition of

A. transportation.

B. mail delivery.

C. entertainment.

D. services.

E. wholesaling.

32. Procter and Gamble (P&G) manufactures consumer products, such as Crest toothpaste and

the Swiffer mop. But P&G does not see itself as a toothpaste or a mop company. Instead, it

sees itself as an innovative company with the goal of solving consumer problems. P&G most

likely grew its market share in 70% of its businesses because

A. the Crest and Swiffer brand names carried over to its other products.

B. it invented new products to solve customer problems.

C. it increased advertising for tried and true products.

D. the international demand for Crest toothpaste.

E. it has little competition.

33. An accomplishment of a task to be achieved, often by a specific time is called a

A. plan.

B. procedure.

C. strategy.

D. goal.

E. vision.


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34. A firm seeks to maximize its long-run __________, achieving as high a financial return on

its investments as possible.

A. profit

B. sales revenue

C. market share

D. quality

E. employee welfare

35. A new company projects that its sales will be greater than its expenses within the first year

of operation. This is an example of which type of goal?

A. profit

B. sales revenue

C. market share

D. unit sales

E. quality

36. If profits are acceptable, a firm may elect to __________ even though profitability may

not be maximized.

A. abandon green marketing

B. decrease employee loyalty

C. maintain or increase market share

D. decrease social responsibility

E. decrease customer satisfaction

37. A small businesswoman was explaining how she was planning for the upcoming holiday

season. "We've got to maximize our sales by using increased advertising because profits are

adequate at the moment." From this statement, she is most concerned with __________

goals.

A. profit

B. sales revenue

C. green marketing

D. social responsibility

E. survival


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38. When sales revenue is chosen as an organizational goal, a firm

A. increases sales levels and strives for a constant level of profits.

B. maintains sales levels and strives for maximum profitability.

C. maintains or increases sales levels even though profitability may not be maximized.

D. decreases sales levels but increases profit margins.

E. decreases sales levels and reduces the profit margin.

39. The ratio of sales revenue of the firm to the total sales revenue of all firms in the industry,

including the firm itself, is called

A. sales quality.

B. market share.

C. industry potential.

D. contribution margin.

E. marginal revenue.

40. Market share is

A. the ratio of the profit of the firm to the total profits of all firms in the industry, not

including the firm itself.

B. the ratio of the profit of the firm to the total profits of all firms in the industry, including

the firm itself.

C. the ratio of sales revenue of the firm to the total sales revenue of all firms in the industry,

not including the firm itself.

D. the ratio of sales revenue of the firm to the total sales revenue of all firms in the industry,


E. the ratio of the profits of all firms in an industry to the profits of the firm.

41. Market share is the ratio of sales revenue of the firm to the total sales revenue of all

__________, including the firm itself.

A. firms in the industry

B. firms in alternative industries

C. firms surveyed by the U.S. Government

D. firms sharing in marketing principles

E. domestic firms


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42. A firm may choose to maintain or increase its market share, sometimes at the expense of

greater profits if

A. there are poor sales databases.

B. there are fluctuations in inventory.

C. there are unpredictable sales expenses.

D. industry status or prestige is at stake.

E. inflation is present.

43. Xbox video game consoles were developed through a joint venture between Microsoft and

the WWE (World Wrestling Entertainment, Inc.). Complaints about the video game began

immediately after its introduction. These complaints ranged from missing parts to incorrect

programming. It would seem obvious that the manufacturer of Xbox video game consoles

should adopt __________ goals.

A. profit

B. sales revenue

C. market share

D. quality

E. employee welfare

44. Motorola invented the Six Sigma program that sets as a goal no more than one defect in

one million parts manufactured. This is an example of a __________ goal.

A. profit

B. sales revenue

C. market share

D. quality

E. employee welfare

45. Apple recently introduced the iPhone to great fanfare. Many corporate users have found

that it does not sync with their servers, thus not allowing users to download from his or her

company email account. When the phone was introduced, many users could not immediately

activate the phone. Based on these examples, it would seem that Apple should have adopted

more stringent __________ goals prior to releasing the iPhone.

A. technology

B. innovation

C. quality

D. service

E. satisfaction


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46. A catalog retailer who set as its qualitative goal to reduce merchandise returns by 20

percent would have set __________ goals.

A. customer satisfaction

B. employee welfare

C. market share


E. profit

47. Lands' End ships each order within 48 hours and its guarantee is the best in the world—

"Guaranteed. Period." These actions by Lands' End are most likely examples of __________

goals.

A. employee welfare

B. market share

C. social responsibility

D. customer satisfaction

E. profit

48. The founder of Starbucks, Howard Schultz, provides healthcare for all employees who

work over 20 hours per week. He says that "the companies that are doing the right thing by

covering their employees [with health care coverage] are paying for the companies who don't

do the right thing." This is an example of one of Starbucks' __________ goals.

A. satisfaction

B. sales revenue

C. market share

D. quality

E. employee welfare

49. Many universities and other educational institutions provide retirement benefits by

doubling the percentage the employee pays into the account up to a certain percentage of his

or her pay. This provides a wonderful benefit to those who are full-time employees. This is an

example of a(n) __________ goal.

A. satisfaction

B. sales revenue

C. market share

D. quality

E. employee welfare


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50. Pfizer Pharmaceuticals is offering low-income senior citizens some of its most widely

used prescriptions for $15 each a month—much below the regular costs for these drugs. This

program, which serves senior citizens most likely grew out of a __________ goal.

A. profit

B. unit sales

C. sales revenue

D. market share

E. social responsibility

51. Hasbro is a $3 billion toy company that prides itself on donating to organizations that help

children, since children and their parents are the target market for the business. This is an

example of how Hasbro participates in corporate

A. return on.

B. market share.

C. sales revenue.

D. unit sales.

E. social responsibility.

52. A(n) __________ is the visual display of the essential information related to achieving a

marketing objective.

A. marketing screen

B. objective dash

C. marketing dashboard

D. information screen

E. corporate dashboard

53. A measure of the quantitative value or trend of a marketing activity or result is called a

A. trend analysis.

B. marketing measurement.

C. marketing dashboard.

D. marketing metric.

E. value analysis.


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54. Which of the following statements about marketing metrics is correct?

A. A marketing metric is a qualitative trend.

B. A marketing metric is a marketing activity.

C. A marketing metric is one of the four elements of the marketing mix.

D. A marketing metric is a measure of the quantitative value of a marketing activity.

E. A marketing metric is the visual display of the essential information related to achieving a


FIGURE 2-2

55. In Figure 2-2, the pie charts refer to:

A. annual contributions to sales and margins.

B. sales versus percentage margin.

C. sales versus cost of sales.

D. percentage difference in sales and margin.

E. moving averages for sales.


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56. According to Figure 2-2, during which year did cost of sales closely approach sales?

A. 1998

B. 1999

C. 2000

D. 2001

E. Cannot tell from the information given.

57. In Figure 2-2, the sales (revenue) curve is the one that starts at about $2 million in 1998,

and the percentage margin is the other one. So, according to Figure 2-2, during which year

was the percent margin the largest?

A. 1998

B. 1999

C. 2000

D. 2001


58. According to Figure 2-2, during which year was sales revenue the largest?

A. 1998

B. 1999

C. 2000

D. 2001


59. Which of the following statements about a marketing dashboard is most true?

A. The more detail that is displayed the better it is for the manager.

B. Up to 20 marketing metrics are shown on the marketing dashboard screen.

C. The marketing dashboard is updated weekly.

D. Marketing dashboards often show key measures in words, not charts or graphs.

E. Marketing dashboards provide graphic displays of a product category's performance, such

as sales, cost of sales, and percent margin.


2-18

60. In design, a marketing plan is most closely related to a

A. novel.

B. pyramid.

C. road map.

D. circle.

E. cloverleaf.

61. If sales are shown as decreasing on your marketing dashboard, what should you

investigate with market research?

A. The accounting records to be sure they are accurate

B. The financial statements

C. Whether consumer tastes have changed

D. The number of support personnel you have at the plant

E. How long the production line is running

62. Large organizations are extremely complex. They usually consist of __________

organizational level(s) whose strategy is linked to marketing.

A. one

B. three

C. five

D. fifteen

E. fifty

63. Bill McDermott is President and CEO of SAP Americas and Asia Pacific Japan. SAP is a

company that sells extremely expensive enterprise resource planning software to large and

mid-sized companies. McDermott operates at the __________ level of his organization.

A. business unit

B. functional

C. corporate

D. strategic

E. back office


2-19

64. The corporate level is where top management directs

A. all employees' training and orientation.

B. recruitment strategy and tactics.

C. overall strategy for the entire organization.

D. overall sales projections.

E. functional-level strategy.

65. A strategic business unit refers to a subsidiary, division, or unit of an organization that

A. directs overall strategy for the organization.

B. markets a set of related products to a clearly defined group of customers.

C. has marketing and other specialized activities.

D. also has a comparable non-business unit.

E. is usually non-profit.

66. The acronym SBU stands for

A. standard business unit.

B. strategic business unit.

C. strategic benefit of usage.

D. service business unit.

E. strategic business usage.

67. The business unit level

A. works most directly with the targeted customers.

B. directs the overall strategy for the organization.

C. is most likely to change substantially over time.

D. provides more end-user analysis.

E. is the level at which managers set a more specific strategic direction for their businesses to

exploit value-creating opportunities.


2-20

68. Which of the following statements about the strategic business unit level is most true?

A. It is the level that works most directly with the targeted customers.

B. The overall strategy for the organization is directed at the strategic business unit level.

C. In more complex organizations, the corporate level and the strategic business unit level

may merge.

D. More end-user analysis is provided at the strategic business unit level then at the functional

level.

E. The strategic direction is more specific at the strategic business unit level than at the

corporate level.

69. Each strategic business unit has marketing and other specialized activities (e.g., finance,

manufacturing, or research and development) at the __________ level, where groups of

specialists create value for the organization.

A. top management

B. business unit

C. functional

D. corporate

E. strategic

70. Specialized functions such as marketing and finance are generally referred to as

A. functional areas.

B. departments.

C. groups.

D. teams.

E. partnerships.

71. At what overall organizational level do people in the finance and the human resources

departments operate?

A. top management level

B. strategic business unit level

C. functional level

D. corporate level

E. middle management level


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72. The marketing department provides leadership activities in

A. talent management.

B. fiscal restraint.

C. look outward, keeping the organization focused on creating value both for it and for

customers.

D. creating the corporate culture.

E. sustaining the means-end chain.

73. A key role of the marketing department is to

A. allocate financial resources across business units.

B. set the overall mission of the company.

C. provide talent management services.

D. look outward.

E. assess global political situations.

74. __________ are an organization's special capabilities, including skills, technology, and

resources that distinguish it from other organizations and that provide value to its customers.

A. Accomplishments

B. Acquisitions

C. Capacities

D. Characteristics

E. Competencies

75. Rhone-Poulenc is an international French company that produces and markets a variety of

chemicals and pharmaceuticals. Due to the resources it makes available to its scientists and

researchers, the company has a number of Nobel Prize winners working in its laboratories.

This ability to attract some of the finest minds in the world to its workforce is an example of

a(n):

A. synergistic capacity.

B. organizational culture.

C. unsought benefit.

D. product development strategy.

E. competency.


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76. Designing a car is expensive and time-consuming even with the use of computers. This is

because until recently there was no way for all the varied departments that are involved in

new car development to work together. DaimlerChrysler has created a unique central Internet-

based system that cuts the design and production process by at least two years, thus providing

value to the customer. This is an example of a(n)

A. benchmarking project.

B. innovation-oriented mission.


D. operational goal implementation.

E. competency.

77. Evergreen Air Center is the world's biggest parking lot for unwanted aircraft. Airlines pay

a monthly fee from $750 to $5,000 to mothball airplanes at this site. Its location is on 1,600

acres of Arizona desert. The Southwest climate serves as a cheap and effective airplane

preservative. Evergreen's location is its

A. operational goal.

B. competency.

C. tactical mission.

D. benchmarked differentiator.

E. innovative vision.

78. Mobile phone companies broke the age-old business rule of staying within their

__________ by going beyond their expertise in running networks and billing subscribers to

designing handsets. Nokia, on the other hand, boosted its success in handsets in large part by

staying focused on what it does best: manufacturing handsets and watching carefully for the

latest consumer trends.

A. goals

B. mission

C. innovative vision

D. competency

E. action program


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79. __________ is a unique strength relative to competitors, often based on quality, time, cost,

or innovation.

A. Market penetration

B. Product differentiation

C. Competitive advantage

D. Business force

E. Organizational culture

80. VideoAdvantage.net is a small company that rents DVD movies by mail using the

Internet. It jumped into an industry where there were no firm leaders but lots of competitors

and established a loyal clientele by seizing the opportunity to provide a service that was not

available through other companies that rented movies over the Internet—reliable overnight

shipment. Its delivery system created its

A. viable mission.

B. competitive advantage.

C. tactical innovation.

D. benchmarking focus.

E. sales orientation.

81. Men's Wearhouse (MW) caters to the man who doesn't necessarily enjoy shopping. The

stores are located in outdoor shopping centers so that customers can get in and out quickly.

Additionally, the MW targets the budget-conscious consumer with suit prices ranging from

$250 to $300. Earnings rose 23% recently, indicating that the location of the stores and the

pricing strategy both are part of the MW

A. competitive advantage.

B. benchmarking expertise.


D. leapfrogging capabilities.

E. viable mission.

82. Which of the following are Lands' End competitors?

A. other catalog retailers

B. traditional department stores

C. mass merchandisers

D. specialty shops

E. All of the above are Lands' End competitors.


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83. The Boston Consulting Group (BCG) uses __________ to quantify performance measures

and growth targets to analyze its clients' SBUs as though they were a collection of separate

investments.

A. target marketing

B. business portfolio analysis

C. marketing strategic planning

D. market segmentation

E. stock segmentation

84. In the Boston Consulting Group (BCG) model to analyze a firm's strategic business units,

or SBUs, the vertical axis reflects the

A. return on investment desired.

B. market growth rate.

C. market segment size.

D. relative market share.

E. number of employees.

85. In the Boston Consulting Group (BCG) model for analysis of a firm's strategic business

units, or SBUs, the horizontal axis reflects the

A. national forecast.

B. business portfolio in dollars.

C. years of experience.

D. market segment size.

E. relative market share.

86. SBUs with a high share of high-growth markets that may not generate enough cash to

support their own demanding needs for future growth are known as

A. dogs.

B. cash cows.

C. question marks.

D. stars.

E. bonanzas.


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87. __________ are SBUs with a low share of slow-growth markets—they may generate

enough cash to sustain themselves, but they do not hold the promise of ever becoming real

winners for the firm.

A. Cash cows

B. Stars

C. Question marks

D. Dogs

E. Problem children

88. __________ have dominant shares of slow-growth markets and provide cash to cover the

organization's overhead and to invest in other SBUs.

A. Cash cows

B. Stars

C. Question marks

D. Dogs

E. Problem children

89. Using a BCG analysis, Kodak's ink-jet printers and cartridge business, is a(n)

A. star.

B. cash cow.

C. question mark.

D. exclamation mark.

E. shooting star.

90. Solarcom is a 30-year-old information technology company that owns several

subsidiaries. One of its subsidiaries is Atlantix Global Systems, which is one of the leading

wholesalers for refurbished computer equipment, an industry that is growing worldwide.

According to the BCG portfolio matrix, Atlantix Global would most likely be classified as a

A. dog.

B. cash cow.

C. question mark.

D. star.

E. problem child.


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91. Several years ago, Black & Decker purchased General Electric's small appliances product

line. Black & Decker purchased the line because it needed the cash infusion from a product

line that had a dominant market share. The small appliance industry is a slow-growth one. The

small appliances product line is most likely a __________ for Black & Decker.

A. dog.

B. cash cow.

C. question mark.

D. star.

E. problem child.

92. Several years ago, the Honda Motor Company unveiled the hybrid version of the Honda

Civic. While the hybrid vehicles are very fuel efficient, they are also very expensive to

purchase. Hybrid vehicles sales have increased over 570 percent with a compound annual

growth rate of 88.6%. Sales of the Civic eventually overtook those of the Toyota Prius,

making it the number one hybrid car in the U.S. For years Honda has experienced tremendous

success with their Accords—in fact, Honda cars are repeatedly the top-selling automobiles in

the U.S. Where would the Honda Civic (hybrid version) and the Honda Accord fall in the

BCG product portfolio matrix?

A. The hybrid Civic would be a classified as a star, and the Accord would be classified a cash

cow.

B. The hybrid Civic would be considered a cash cow, and the Accord would be classified as a

star.

C. Due to the overwhelming success of Honda cars, both the Accords, and the hybrid Civics

would be classified as cash cows.

D. The Civic would be a problem child, and the Accord would be a cash cow.

E. The Civic would be considered a dog, and the Accord would be classified as a star.

93. In its business portfolio analysis, an organization's SBUs often start as __________ and

then become __________.

A. dogs; question marks

B. question marks; stars

C. stars; question marks

D. stars; dogs

E. question marks; dogs


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PORTFOLIO ANALYSIS FIGURE

94. According to the Portfolio Analysis Figure, the dark circle 2 has __________ market

share than its largest competitor.

A. slightly more

B. slightly less

C. significantly more

D. significantly less

E. about the same

95. According to the Portfolio Analysis Figure, the white circle in the highest growth market

is

A. circle 1.

B. circle 2.

C. circle 3.

D. circle 4.

E. All of the circles are in low growth markets.


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96. According to the Portfolio Analysis Figure, the most likely position for dark circle 1 in the

future is as a

A. star.

B. question mark.

C. problem child.

D. cash cow.

E. dog.

97. One of the strengths inherent in the use of the BCG portfolio analysis is the fact that it

A. is remarkably easy to locate an SBU on the BCG matrix.

B. considers all factors that might impact an SBU's value to an organization.

C. acts as a strong motivational tool for employees in SBUs that have been labeled dogs or

problem children.

D. forces firms to assess their SBUs in terms of relative market share and industry growth

rate.

E. shows competitors how to improve.

98. One of the weaknesses inherent in the use of the BCG portfolio analysis is that it

A. acts as a strong motivational tool for employees in SBUs that have been labeled dogs or

problem children.

B. is often difficult to get needed information.

C. considers so many SBU factors beyond market growth rate and relative market share.

D. does not require forecasts in order to be implemented.

E. makes efficient use of all competitive information.


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FIGURE 2-4

99. According to Figure 2-4, the most likely position for dark circle 4 in the future is as a

A. star.

B. question mark.

C. problem child.

D. cash cow.

E. dog.

100. According to Figure 2-4, white circle 3 has __________ market share than its largest

competitor.

A. slightly more

B. slightly less



E. about the same


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101. According to Figure 2-4, the white circle in the highest growth market is

A. circle 1.

B. circle 2.

C. circle 3.

D. circle 4.


102. Which market-product strategies do NOT require product changes?

A. market development and market penetration

B. market development and diversification

C. market penetration and product development

D. diversification and market penetration

E. diversification and product development

103. Selling more Ben & Jerry's super premium ice cream to Americans is an example of

A. market penetration

B. market development

C. product development

D. diversification

E. market divestment

104. Which market-product strategy requires no change in the product line but an increase in

sales to existing customers through better advertising, more retail outlets, lower prices, or

more effective distribution?

A. market development

B. market penetration


D. diversification

E. product divestment


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105. Many people enjoy cereal at breakfast. Cereal manufacturers who promote cereal as a

great late-night snack to the group of people who enjoy cereal at breakfast would be using a

__________ strategy.


B. product development

C. differentiation

D. diversification

E. differentiation focus

106. Assume Procter & Gamble's focus is in selling its strong existing product line to its

present American customers. This means that P&G has followed a successful strategy of

__________.



C. differentiation

D. diversification


107. Assume McDonald's is engaging in a market penetration strategy. Which of the

following actions best illustrates a market penetration strategy?

A. opening the first McDonald's in China

B. developing a line of McDonald's toys to be sold through Toys Я Us stores

C. adding a line of new deli sandwiches to the menu of existing McDonald's stores

D. running a promotion based on the Monopoly game, whereby customers have a chance to

win prizes with each purchase

E. removing slow-moving products from its menus

108. For several years, advertisements for Arm & Hammer baking soda have prompted

consumers to place an opened box of the product in the refrigerator to lessen food odor and to

replace that box monthly. The same ads advise customers to pour the used box down their

kitchen sinks to freshen drains. Arm & Hammer employed a __________ strategy in its

attempt to sell more baking soda.




D. diversification

E. product penetration


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109. Which market-product strategy requires no change in the product but requires a company

to seek out new customers in new markets?




D. diversification

E. all of the above

110. Recently, American Express, Visa, and MasterCard have been pushing hard into the

small-ticket end of the credit card market. The purchase of items such as fast food meals,

movie popcorn, and candy have been targeted as growth areas for credit card usage. This is an

example of a __________ strategy on the part of the credit card companies.

A. market penetration.

B. market development.

C. product development.

D. diversification.

E. product dissemination.

111. Gulfstream Aerospace Corp. engaged in a __________ strategy when it sold three

Gulfstream V business jet aircraft to a foreign country's Ministry of Defense for use as

Special Electronic Mission Aircraft. This was Gulfstream's first sale to a foreign country.




D. diversification

E. product dissemination

112. Assume McDonald's is engaging in a market development strategy. Which of the

following actions best illustrates a market development strategy?






E. giving coupons for free fries for later use when the customer purchases a Big Mac


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113. Mall of America hopes to increase traffic in the shopping center by offering free lunches

to children in Mall restaurants on Tuesdays. This promotion is directed to families who

currently do not shop at the mall. This is an example of the implementation of a __________

strategy.




D. diversification

E. market divestiture

114. When Walt Disney Co. opened new theme parks in Paris, Tokyo, and Hong Kong, it was

using a ___________ strategy.



C. differentiation

D. diversification

E. market development

115. Which market-product strategy involves selling a new product to existing markets?



C. divestment

D. diversification

E. product development

116. Matsura Industries distributes candy and coffee through its vending machines in Tokyo.

The addition of sandwich vending machines to the same market is an example of a





D. diversification

E. divestment


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117. Transportation Safety Technologies, Inc. originally produced and sold safety devices to

make the trucking industry safer especially on long hauls across North America. It soon

realized that transporting goods across U.S. borders by truck was expensive and time-

consuming for the truckers. Dozens of government agency approvals and costly downtime

hamper the process. Transportation Safety Technologies, Inc., then began providing its

trucking companies with International Trade Data Systems (ITDS). This new type of system

stores information about each shipment in a centralized database, which can be accessed at

border checkpoints and eliminate the need for costly manual inspections. This is an example

of the implementation of a __________ strategy.



C. divestment

D. diversification


118. Which of the following actions best illustrates a product development strategy for

McDonald's?






E. opening McDonald's restaurants in Six Flags theme parks

119. When Johnson & Johnson develops complementary products to its existing product line,

such as Tylenol PM it is appealing to its current market with a new product, using a

___________ strategy.



C. differentiation

D. diversification



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120. Which of the following actions would best illustrate a diversification strategy for

McDonald's?







121. Which market-product strategy requires a company to both develop new products and

seek out new markets?




D. diversification

E. divestment

122. The __________ is an approach whereby an organization allocates its marketing mix

resources to reach its target markets.

A. the calibrated marketing process

B. the strategic marketing process

C. the situational marketing process

D. the developmental market analysis

E. the market determinant method

123. The key steps of planning, implementation, and evaluation are part of

A. gap analysis.

B. the strategic marketing process.

C. the situational marketing process.

D. the developmental market analysis.

E. the market determinant method.


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124. What are the three steps involved in the planning phase of the strategic marketing

process?

A. situation (SWOT) analysis; market-product focus and goal setting; and marketing program

development

B. planning; implementation; and control

C. set market and product goals; select target markets; find points of difference; and position

the product

D. identify industry trends; analyze competitors; assess own company; and research customer

E. identify where we have been; where we are headed; and where we are now

125. Step 2 in the planning phase of the strategic marketing process is

A. the situation analysis.

B. the market-product focus and goal setting.

C. the marketing program.

D. implementation.

E. obtaining resources.





D. implementation.



A. establishing the budget.

B. developing advertising appeals.

C. goal setting.

D. marketing programming.

E. situation analysis.


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128. Taking stock of where the firm or product has been recently, where it is now, and where

it is headed in terms of the organization's plans and the external factors and trends affecting it

is called the

A. systems analysis.

B. strategic market plan.

C. goal setting step.

D. planning gaps.


129. The acronym "SWOT" used in the term "SWOT analysis" stands for

A. strengths, weaknesses, opportunities, and timing.

B. strategies, workload, opportunities, and timing.

C. strengths, weaknesses, opportunities, and threats.

D. simple, workable, optimal, and timely.

E. situational, worldwide, organizational and technological.

130. An effective technique a firm can use to appraise in detail its internal strengths and

weaknesses and external opportunities and threats is called

A. SWOT analysis.

B. strategic management.

C. market segmentation.

D. market programming.

E. marginal analysis.

131. In the 1980s, poor quality and Japanese imports drove the Harley-Davidson motorcycle

company to the brink of bankruptcy. The company's share of the U.S. super-heavy-weight

market—motorcycles with engine capacity of 850 cubic centimeters or more—collapsed from

more than 40 percent in the mid 1970s to 23 percent in 1983. However, by 1989, Harley-

Davidson controlled some 65 percent of the U.S. market. And in both the U.S. and overseas

markets, the company won't be able to meet demand for years. From a marketing perspective,

what was the most likely first step in Harley-Davidson's resurgence?

A. development of a new mission statement and subsequent marketing strategy

B. repositioning their product in the minds of motorcycle buyers

C. performing a SWOT analysis

D. seeking new markets for the motorcycles both in the U.S. and in foreign markets

E. improving the quality of their product and communicating this to motorcycle buyers


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132. The consumer products industry is one with several large competitors, soaring raw

materials prices, and strong demands from powerful retailers for lower prices. As a result,

Colgate-Palmolive Co. and Unilever Group, the makers of products such as Colgate

toothpaste and Ben & Jerry's ice cream, both reduced their earnings forecasts. Yet Proctor &

Gamble, another consumer products company, did not. At P&G, innovation is a key attribute,

allowing the company to update all 200 of their brands and to invent products such as Crest

Whitestrips that consumers crave. P&G has also used its marketing know-how to develop

unique product placements on television shows that highlight its brands. A SWOT analysis

for P&G of this information would indicate that the overall industry situation is a __________

while the innovation taking place at P&G is a __________.

A. strength; weakness

B. weakness; threat

C. threat; strength

D. opportunity; threat

E. opportunity; strength







Whitestrips that consumers crave. P&G has also used their marketing know-how to develop


for P&G of this information would indicate that the powerful retailers who demand lower

pricing is a __________ while the innovation taking place at P&G is a __________.


B. weakness; threat

C. threat; strength




2-39









for P&G of this information would indicate that the soaring raw materials prices are a

__________ while the product placement highlighting its brands is a __________.


B. weakness; threat

C. threat; strength



135. A recent Congressional initiative mandated that the U.S. Department of Transportation

(U.S. DOT) establish a national traffic information collection system. The marketing manager

of a company that provided traffic reports for local radio stations would most likely

incorporate this knowledge into its SWOT analysis as

A. a strength if the company has an existing working relationship with the U.S. DOT.

B. a threat if the U.S. DOT will give this information directly to the radio stations.

C. a weakness if the company that provides local traffic information has no employees

technologically capable of using the U.S. DOT system.

D. an opportunity if the U.S. DOT is creating a network of local traffic-information providers

to address the mandate.

E. all of the above

136. What is the marketing term for aggregating prospective buyers into groups that have

common needs and will respond similarly to a marketing action?

A. aggregation marketing

B. market segmentation

C. market clustering

D. profiling

E. mass marketing


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137. To develop a successful marketing plan for soda, __________ would most likely be used

to group consumers on the basis of whether they wanted sugar-free and caffeine-free soda,

caffeine-free sugared soda, or regular soda with sugar and caffeine.




D. profiling

E. mass marketing

138. A toothbrush manufacturer sells several lines of toothbrushes. One line is for small

children, one line is for people with gum problems, and one is for people who wear dentures.

These different products are targeted toward different groups based on

A. organizational strengths.

B. market programming.


D. distinctive competencies.

E. organizational opportunities.

139. Marketing goal setting involves setting measurable __________ to be achieved.

A. financial limits

B. marketing objectives

C. quality standards

D. production quotas

E. research and development aspirations

140. Those characteristics of a product that make it superior to competitive substitutes are

called

A. consumer standards.

B. perceptual segments

C. marketing selectives.

D. points of difference.

E. product stereotypes.


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141. At which step of the planning stage of the strategic marketing process does a firm

develop its marketing mix?

A. situation analysis

B. goal setting

C. marketing program

D. sales forecasting

E. market segmentation




toothpaste and Ben & Jerry's ice cream both reduced their earnings forecasts. Yet Proctor &




unique product placements on television shows that highlight its brands. Crest Whitestrips is

an example of P&G's

A. products.

B. prices.

C. promotions.

D. places.

E. marketing dashboards.








unique product placements on television shows that highlight its brands. Product placement

on television shows is an example of P&G's

A. products.

B. prices.

C. promotions.

D. places.



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144. The __________ element of the marketing mix includes features, packaging, brand

name, and warranty.

A. product

B. pricing

C. promotion

D. place

E. services

145. The __________ element of the marketing mix includes outlets, channels, coverage,

transportation, and stock level.

A. product

B. pricing

C. promotion

D. place

E. budgeting

146. The second phase of the strategic marketing process is the

A. motivational phase.

B. strategic phase.

C. planning phase.

D. implementation phase.

E. evaluation phase.

147. Two major elements of the implementation phase of the strategic marketing process are

A. segmenting the market and selecting target markets.

B. establishing a business mission and designing measurable goals and objectives.

C. designing the marketing mix and setting the budget.

D. identifying deviations in the marketing plan and acting on them.

E. executing the marketing program and designing the marketing organization.


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E. obtaining resources and developing schedules.






E. obtaining resources and designing the marketing organization.

150. Two major elements of the implementation phase of the strategic marketing process are:



C. developing schedules and executing the marketing program.


E. designing the marketing mix and setting the budget.

151. The Xbox video game console was developed through a joint venture between Microsoft

and the WWE (World Wrestling Entertainment, Inc.). Plans were made to rush the product to

market to counter new PlayStation and Nintendo consoles that were also being released about

the same time. Complaints about the video game began immediately after its introduction.

These complaints ranged from missing parts to incorrect programming. In which phase of the

strategic marketing process did the Xbox strategy fail?

A. the goal-setting phase

B. the implementation phase

C. the control phase

D. the strategic development phase

E. the resource administration phase


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152. A marketing strategy is the means by which a marketing goal is to be achieved. Two

factors that usually characterize a marketing strategy are

A. specific goals and organizational objectives.

B. a detailed marketing plan and marketing budget.

C. marketing strategies and marketing tactics.

D. a specified target market and a marketing program to reach it.

E. marketing programs and deviation control.

153. Which of the following statements reflects both of the key elements in developing a

marketing strategy for L. M. Schofield, Inc., a company that produces specialized concrete

surfaces for heavily trafficked areas such as retail outlets and amusement parks?

A. Buy ads in all the major trade journals aimed at businesses in the entertainment and/or

sports industry.

B. Communicate using direct mail about the various walking surfaces Schofield can create for

contractors who are building riding and walking paths.

C. Design a sample ad and test it using visitors to a trade show.

D. Hire six new sales representatives for the Midwest regional office and train them on all

aspects of strategy.

E. Create a focus group to decide on what surface to use for a religious-theme park in Brazil.

154. A marketing __________ is defined as the means by which a marketing goal is to be

achieved. It is characterized by a specified target market and the marketing program to reach

it.

A. plan

B. tactic

C. strategy

D. concept

E. action program


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155. Marketing tactics are

A. the long-term decisions made to implement the marketing program and the monitoring of

those decisions.

B. the detailed day-to-day operational decisions essential to the overall success of marketing

strategies.

C. the steps taken to develop an effective marketing plan.

D. the development of marketing strategies to achieve the organization's marketing objectives.

E. the refinement of the organization's mission based on the results obtained from a marketing

audit.

156. David and Cecilia Stanford, owners of Prairie Herb vinegars, decided to offer the product

in 5-ounce and 13-ounce sizes as well as in a 16-ounce European glass bottle. They decided to

sell the vinegar only through the mail and to price the smaller bottles at $4.45 and the larger

bottles at $13.25. They were determining Prairie Herb's marketing

A. tactics.

B. missions.

C. visions.

D. strategies.

E. operational procedures.

157. Compared to marketing strategies, marketing tactics generally involve actions that

A. must be taken sooner rather than later.

B. are long term and need to be carefully developed rather than short term.

C. involve upper levels of management rather than front-line managers.

D. are general rather than specific in nature.

E. have been successfully implemented in the past.

158. The two major aspects of the evaluation phase of the strategic marketing process are




D. identifying deviations from goals and acting on the deviations.

E. executing the marketing plan and designing the marketing organization.


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159. The third phase of the strategic marketing process is the

A. implementation phase.

B. planning phase.

C. tactical phase.

D. evaluation phase.

E. goal-setting phase.

160. The difference between the projection of the path to reach a new goal and the projection

of the path of the results of a plan already in place is called

A. the contribution margin.

B. the marginal space.

C. the breakeven point.

D. the planning gap.

E. differential location.

161. Recently, Kodak had a very flat level of sales revenue. The CEO did not like the no-

growth results and instead forecasted an increase in sales revenue based on new plans and

actions. The difference between the existing flat level of sales revenue and the increased level

is known as







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162. Evergreen Air Center is the world's largest parking lot for unwanted commercial aircraft.

Airlines pay from $750 to $5,000 monthly for the storage services provided by Evergreen.

Prior to September 2001, the company had 140 discarded airplanes at its Arizona facilities

and was growing at a rate of about six planes monthly with about two a month sold for parts

and/or scrap metal. After calamity struck the airline industry in September 2001, the airlines

have retired over a thousand planes—many of which found their way to Evergreen. Now the

actual number of planes stored at Evergreen differs significantly from the prediction based on

previous behavior. This difference is referred to as






163. After examining a planning gap, firms typically attempt to

A. decide if the time horizon should be increased or decreased.

B. perform a SWOT analysis with their major competitor as the focus.

C. use statistical trend analysis to interpret the results.

D. exploit a positive deviation and correct a negative deviation.

E. adopt a product-market focus.


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FIGURE 2-10

164. Figure 2-10 shows Kodak's sales revenues, projected and actual. This figure depicts

A. SWOT analysis.

B. marketing dashboard analysis.

C. industry analysis.

D. business portfolio analysis.

E. planning gap analysis.

165. Based on the information shown in Figure 2-10, Kodak's planning gap between the years

2003 and 2010 is depicted by the area bounded in the figure by points

A. CBE.

B. DBC.

C. DBE.

D. ABD.

E. ABC.


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166. It is 2003 and you are the CEO of Kodak. In Figure 2-10, you project the line BD. This

line is Kodak's

A. planning gap.

B. projected sales revenues without new plans and actions.

C. actual sales revenues.

D. projected target sales revenues with new plans and actions.

E. projected profits.

167. It is now 2008 and you are CEO of Kodak. Figure 2-10 shows the planning gap analysis

you did in 2003. You now observe that the planning gap

A. is widening.

B. is becoming narrower.

C. is staying the same.

D. cannot be determined from the information given.

E. is shown by the wedge CDE.

168. The BP Helios House is

A. a green gas station.

B. a museum showing sustainable ideas for the future.

C. a shelter for the homeless in L.A.

D. a home-away-from-home for families of very sick children.

E. the name of the BP corporate office park.

169. The four core values of BP include

A. performance-driven.

B. innovative.

C. progressive.

D. green.



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Essay Questions

170. Explain what a visionary organization is and how visionary organizations formulate

strategies.

171. List potential stakeholders for the college or university that you attend.

172. What is a corporate mission?

173. Name and briefly describe the seven types of corporate goals.


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174. The logistics industry has sales of $800 billion per year. If a third party logistics provider

had sales of $8 billion, what would its market share be? Be sure to define market share and

show your work in your answer.

175. Define "marketing dashboard" and "marketing metric" and explain how these terms are

related.

176. Describe the composition of the three organizational levels whose strategy is linked to

marketing.

177. There is a General Motors plant in Spring Hill, Tennessee, that is devoted solely to the

production of Saturn cars. At which organizational level is this plant operating? Explain your

answer.


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178. Explain the difference between "competencies" and "competitive advantage" in an

organizational setting.

179. One of the most recognized approaches to business portfolio analysis is the Boston

Consulting Group's growth-share matrix. By dividing each dimension into high and low

categories, the matrix contains four cells. Briefly describe the four quadrants of the matrix.

180. The Boston Consulting Group's business portfolio analysis model can be used to guide a

firm as it tries to change its relative market share (the factor on the horizontal axis). What are

the strengths and weakness of this model?

181. Identify and describe the three phases of the strategic marketing process.


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182. Identify and describe the four factors in a SWOT analysis and give examples for Ben &

Jerry's Homemade ice cream that help it identify the critical strategy-related factors that could

have major effects on it.

183. A campus service organization annually raises money through the sale of t-shirts. How

could it use market segmentation to increase sales of the shirts? Be sure to include a definition

of market segmentation in your answer.

184. What are the marketing mix elements that comprise a cohesive marketing program?

185. A campus service organization annually raises money through the sale of t-shirts. What

are the major components of the marketing program it should use to increase sales? Give one

example of each.


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186. What are the four components of the implementation phase of the strategic marketing

process?

187. What is the difference between marketing strategies and marketing tactics?

188. What is the purpose of the evaluation phase of the strategic marketing process? How is it

accomplished?

189. Explain what a planning gap is and what is used to close it.


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Chapter 02 Developing Successful Marketing And Organizational Strategies

Answer Key

Multiple Choice Questions

1. (p. 20) Ben & Jerry's is primarily a marketer of

A. Woodstock memorabilia.

B. chocolate-chip cookie dough franchises.

C. all natural ice cream.

D. programs to save the Amazon rain forests.

E. ideas and activities to enhance corporate social responsibility.

The web page illustrated on page 26 states that Ben & Jerry's mission is to make, distribute,

and sell the finest quality all natural ice cream.

AACSB: 3 LL: 1

Learning Objective: 1

2. (p. 20) Part of the social mission of Ben and Jerry's is

A. to recognize the central role that business plays in society.

B. to maximize economic development in Burlington, Vermont.

C. to make unusual flavors of ice cream.

D. to maximize return on investment for shareholders.

E. to achieve amicable relations with the U.S. government.

The social mission of Ben & Jerry's is to operate the company in a way that actively

recognizes the central role that business plays in society by initiating innovative ways to

improve the quality of life locally, nationally, and internationally.

AACSB: 3 LL: 2



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3. (p. 20-21) In its business, Ben & Jerry's has

A. created economic opportunities for those who have been denied them.

B. minimized its negative impact on the environment.

C. supported sustainable and safe methods of food production.

D. shown a deep respect for human beings.

E. done all of the above.

All of the choices listed are discussed on pages 20 and 21.

AACSB: 3

LL: 2 Learning Objective: 1

4. (p. 26) Ben and Jerry's mission statement declares its commitment to incorporating

wholesome natural ingredients into its products. An example of action that reflects this

commitment is

A. allowing customers to mail order ice cream from the website.

B. contributing 7.5 percent of its pretax profits to philanthropic efforts.

C. purchasing its supplies from socially responsible suppliers.

D. supporting sustainable and safe methods of food production.


As part of its product mission on its website shown on page 20, Ben & Jerry's declares "To

make, distribute & sell the finest quality all natural ice cream & euphoric concoctions with a

continued commitment to incorporating wholesome, natural ingredients and promoting

business practices that respect the Earth and the Environment." A sustainable and safe method

of food production is an example of its mission.

AACSB: 3



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5. (p. 21) Which of the following statements about Ben and Jerry's is most true?

A. Unilever owns it.

B. Many people but its products to support Ben & Jerry's social mission.

C. It buys all of its milk and cream from one dairy cooperative.

D. It works with nonprofit organizations to give jobs to and train at-risk youth.

E. All of the above are true about Ben and Jerry's.

Today, Ben & Jerry's is owned by Unilever and buys all of its milk and cream from one dairy

cooperative whose members guarantee the supplies are bovine growth hormone free. Its

PartnerShop, Scoopers Making Change, and Cones 2 Career programs help nonprofit

organizations give jobs to and train at-risk youth. While customers love its flavors, many buy

its products to support Ben & Jerry's social mission.

AACSB: 3


6. (p. 22) In today's visionary organizations, it is important to recognize

A. the kinds of organizations that exist.

B. the goals of suppliers.

C. how strategy arises based on the company foundations.

D. the importance of lobbyists in all industries.

E. the value of employee education.

In today's visionary organizations, it is important to recognize how strategy arises based on

their foundations, directions, plans, and structures.

AACSB: 3



2-58

7. (p. 22) Today's organizations must be visionary—that is, they must

A. forecast sales accurately.

B. examine the past carefully so as to learn from mistakes.

C. anticipate future events and respond quickly and effectively.

D. frequently hire new employees to get the best new ideas.

E. develop future scenarios for their existing product line.

Management experts stress that to be successful, today's organizations must be visionary—

they must both anticipate future events and respond quickly and effectively.

AACSB: 3


8. (p. 22) Organizations that develop similar offerings, when grouped together, create a(n)

A. conglomerate.

B. merger.

C. industry.

D. business.

E. acquisition.

Text term definition--industry

AACSB: 3


9. (p. 22) __________ is the reward to a business firm for the risk it undertakes in marketing its

offerings.


B. Profit



E. Asset leverage

Key term definition—profit

AACSB: 3 LL: 1



2-59

10. (p. 22) Profit is

A. the point at which company assets equal company liabilities.

B. the money left over after a business firm's total expenses are subtracted from its total

revenues.

C. the goodwill earned from implementing the societal marketing concept.

D. the money earned when the economic order quantity is maintained.

E. accurately described by all of the above.


AACSB: 3


Other Location: Web

11. (p. 22) __________ is the money left over after a business firm's total expenses are

subtracted from its total revenues.


B. Profit



E. Asset leverage


AACSB: 3 LL: 1



2-60

12. (p. 22) A __________ is a nongovernmental organization that serves its customers but does

not have profit as an organizational goal.

A. business firm

B. community action program

C. nonprofit state agency

D. nonprofit organization

E. cooperative

Text term definition—nonprofit organization

AACSB: 3


13. (p. 22) A nongovernmental organization that serves its customers but does not have profit as

an organizational goal is called a

A. business firm.



D. manufacturing agent.

E. cooperative.

Text term definition—nonprofit organization

AACSB: 3



2-61

14. (p. 22) The American Red Cross, a service firm whose goal is that its revenues will equal its

costs is a

A. business firm.



D. government agency.

E. cooperative.

The American Red Cross is a nongovernmental organization that serves its customers but

does not have profit as an organizational goal.

AACSB: 3


15. (p. 22) Which statement best describes the most significant difference between a business

firm and a nonprofit organization?

A. Business firms operate with larger budgets than nonprofits.

B. Nonprofit organizations do not carry on economic activities, and business firms do.

C. Nonprofit organizations are concerned with social issues, and business firms are not.

D. Both serve customers, but business firms seek a profit while nonprofit organizations do

not.

E. Nonprofit organizations are publicly owned, and business firms are not.

A business firm is a privately owned organization that serves its customers in order to earn a

profit so that it can survive. A nonprofit organization is a nongovernmental organization that

serves its customers but does not have profit as an organizational goal.

AACSB: 3



2-62

16. (p. 22) __________ is an organization's long-term course of action designed to deliver a

unique customer experience while achieving its goals.

A. Structure

B. A performance plan

C. Organizational conduct

D. Strategy

E. A long-term action plan

Key term definition—strategy

AACSB: 3


17. (p. 22) An organization's __________ is its philosophical reason for being.

A. direction

B. strategy

C. goal

D. foundation

E. all of the above

An organization's foundation is its philosophical reason for being—why it exists—and rarely

changes.

AACSB: 3


18. (p. 22) An organization's __________ are the fundamental, passionate, and enduring

principles that guide its conduct over time.

A. core values

B. missions

C. culture

D. goals

E. strategies

Key term definition—core values

AACSB: 3 LL: 1



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19. (p. 22) The "HP Way" signifies to employees the fundamental, passionate, and enduring

principles of the company and is an example of Hewlett-Packard's

A. core values.

B. mission.

C. culture.

D. goals.

E. strategy.

An example of core values is Hewlett-Packard's the "HP-Way." These core values of Hewlett-

Packard originated with William Hewlett and David Packard, who co-founded the company in

a garage in 1939. These values include "a deep respect for the individual, a dedication to

affordable quality and reliability, a commitment to community responsibility, and a view that

the company exists to make technical contributions for the advancement and welfare of

humanity."

AACSB: 3


20. (p. 22) The Ben & Jerry's website states "Central to the mission of Ben & Jerry's is the belief

that all three parts [product mission, economic mission, social mission] must thrive equally in

a manner that commands deep respect for individuals in and outside the company and

supports the communities of which they are a part." This statement is MOST likely the

foundation of Ben & Jerry's

A. financial strategy.

B. financial statements.

C. core values.

D. human resource strategy.

E. global competitive strategy.

An organization's core values are the fundamental, passionate, and enduring principles that

guide its conduct over time. This statement is most likely a statement of Ben & Jerry's core

values.

AACSB: 3



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21. (p. 23) Which of the following statements about core values is true?

A. Core values are developed by cross-functional teams.

B. Core values motivate customers.

C. Core values change depending on the financial condition of the firm.

D. Core values capture the heart and soul of the firm.

E. Core values do all of the above.

Core values are developed by an organization's founders or senior management and are

consistent with their essential beliefs and character. Core values capture the collective heart

and soul of the organization. They should inspire and motivate employees to take productive

action. Core values are timeliness/ they should not change due to short-term financial,

operational, or strategic concerns. They establish the norms of its organizational culture, and

influence its strategy.

AACSB: 3


22. (p. 23) Which of the following is a stakeholder in the CBS station that airs the TV sitcom

Two and a Half Men?

A. the actors that star in Two and a Half Men

B. the people that provide the sets and the props used in Two and a Half Men

C. the television critics that review Two and a Half Men

D. its television audiences

E. All of the above are stakeholders in the CBS station.

Organizations must connect not just with their customers but with all their stakeholders,

including employees, owners, and board members, as well as suppliers, distributors, unions,

local communities, and, of course, customers.

AACSB: 3



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23. (p. 23) Often used interchangeably with "vision" a(n) __________ statement frequently has

an inspirational theme.

A. point of difference

B. mission

C. business map

D. internal situation analysis

E. foundation

Key term definition—mission

AACSB: 3


24. (p. 23) By understanding its core values, an organization can take steps to define its

__________, a statement of the organization's functions in society, often identifying its

customers, markets, products, and technologies.


B. business portfolio


D. mission

E. corporate code

Key term definition—mission

AACSB: 3



2-66

25. (p. 23) The __________ for Lucent Technologies is "To use our unique capabilities to

ensure that our customers thrive, our business grows, and we enrich the personal

communications experience for people around the world."




D. mission

E. organizational culture

A mission is a statement of the organization's functions in society, often identifying its


AACSB: 3


26. (p. 23) The ___________ for American Red Cross is "The American Red Cross, a

humanitarian organization led by volunteers and guided by its Congressional Charter and the

Fundamental Principles of the International Red Cross Movement, will provide relief to

victims of disasters and help people prevent, prepare for, and respond to emergencies."




D. mission

E. corporate code

A mission is a statement of the organization's functions in society, often identifying its


AACSB: 3



2-67

27. (p. 23) ____________ refers to a set of values, ideas, attitudes, and norms of behavior that is

learned and shared among the members of an organization.

A. Corporate philosophy

B. Benefits statement

C. Organizational culture

D. Corporate profile

E. Business edge

Key term definition—organizational culture

AACSB: 3


28. (p. 23) George Zimmer the CEO of Men's Wearhouse is known to the public as the bearded

company pitchman who sells suits and sport coats on TV declaring, "I Guarantee it!" He also

says that to be successful, "You've got to have a company that starts with trust and fairness."

He aims to keep his employees happy and loyal. His philosophy sets the

A. corporate confirmation.

B. benefits statement.


D. corporate profile.

E. business edge.

An organization's culture refers to a set of values, ideas, attitudes, and norms of behavior that

is learned and shared among the members of an organization. George Zimmer's statement

about beginning with trust and fairness is a set of values that he is instilling in the

organization as part of its culture.

AACSB: 3



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29. (p. 24) A(n) __________ describes the clear, broad, underlying industry category or market

sector of an organization's offering.

A. business

B. culture

C. mission

D. goal

E. strategy

Key term definition—business

AACSB: 3


30. (p. 24) In terms of an organization's business, railroads may have lost market share in the

20th century because they most likely

A. were too slow and cumbersome.

B. defined their business too narrowly.

C. defined their business too broadly.

D. priced their services too high.

E. were simply an outmoded form of transportation.

In the first half of the 20th century the American railroads proclaimed, "We are in the railroad

business!" This narrow business definition lost sight of who their customers were and what

these needs were.

AACSB: 3



2-69

31. (p. 24) In the 19th century, railroads may have let other forms of transportation take business

away from them because their definition included only the railroad business, rather than the

broader definition of

A. transportation.

B. mail delivery.

C. entertainment.

D. services.

E. wholesaling.

The narrow business definition lost sight of who their customers were and what these needs

were. Railroads saw only other railroads as competitors and failed to develop strategies to

compete with airlines, barges, pipelines, trucks, bus lines, and cars—offerings that carried

both goods and people. Railroads would probably have fared better over the past century by

recognizing they were in "the transportation business."

AACSB: 3


Other Location: Web

32. (p. 24) Procter and Gamble (P&G) manufactures consumer products, such as Crest

toothpaste and the Swiffer mop. But P&G does not see itself as a toothpaste or a mop

company. Instead, it sees itself as an innovative company with the goal of solving consumer

problems. P&G most likely grew its market share in 70% of its businesses because

A. the Crest and Swiffer brand names carried over to its other products.

B. it invented new products to solve customer problems.

C. it increased advertising for tried and true products.

D. the international demand for Crest toothpaste.

E. it has little competition.

P&G uses a broad business definition of solving consumer problems with innovative new

products to increase its market share. Recently, P&G updated all of its 200 brands and created

whole new product categories that have added $200 million in sales.

AACSB: 3 LL: 3



2-70

33. (p. 24) An accomplishment of a task to be achieved, often by a specific time is called a

A. plan.

B. procedure.

C. strategy.

D. goal.

E. vision.

Key term definition—goal, objective

AACSB: 3


34. (p. 24) A firm seeks to maximize its long-run __________, achieving as high a financial

return on its investments as possible.

A. profit

B. sales revenue

C. market share

D. quality

E. employee welfare

Text term definition—profit

AACSB: 3


35. (p. 24) A new company projects that its sales will be greater than its expenses within the first

year of operation. This is an example of which type of goal?

A. profit

B. sales revenue

C. market share

D. unit sales

E. quality

Most firms seek to maximize long-run profit, achieving as high a financial return on

investment as possible. Profit is sales minus expenses.

AACSB: 3 LL: 2



2-71

36. (p. 24) If profits are acceptable, a firm may elect to __________ even though profitability

may not be maximized.

A. abandon green marketing

B. decrease employee loyalty

C. maintain or increase market share

D. decrease social responsibility

E. decrease customer satisfaction

If profits are acceptable, a firm may elect to maintain or increase its sales level even though

profitability may not be maximized.

AACSB: 3


37. (p. 24) A small businesswoman was explaining how she was planning for the upcoming

holiday season. "We've got to maximize our sales by using increased advertising because

profits are adequate at the moment." From this statement, she is most concerned with

__________ goals.

A. profit

B. sales revenue

C. green marketing


E. survival



AACSB: 3



2-72

38. (p. 24) When sales revenue is chosen as an organizational goal, a firm

A. increases sales levels and strives for a constant level of profits.

B. maintains sales levels and strives for maximum profitability.

C. maintains or increases sales levels even though profitability may not be maximized.

D. decreases sales levels but increases profit margins.

E. decreases sales levels and reduces the profit margin.



AACSB: 3


39. (p. 24) The ratio of sales revenue of the firm to the total sales revenue of all firms in the

industry, including the firm itself, is called

A. sales quality.

B. market share.

C. industry potential.

D. contribution margin.

E. marginal revenue.

Key term definition—market share

AACSB: 3



2-73

40. (p. 24) Market share is

A. the ratio of the profit of the firm to the total profits of all firms in the industry, not


B. the ratio of the profit of the firm to the total profits of all firms in the industry, including

the firm itself.

C. the ratio of sales revenue of the firm to the total sales revenue of all firms in the industry,

not including the firm itself.

D. the ratio of sales revenue of the firm to the total sales revenue of all firms in the industry,


E. the ratio of the profits of all firms in an industry to the profits of the firm.


AACSB: 3


41. (p. 24) Market share is the ratio of sales revenue of the firm to the total sales revenue of all

__________, including the firm itself.

A. firms in the industry

B. firms in alternative industries

C. firms surveyed by the U.S. Government

D. firms sharing in marketing principles

E. domestic firms


AACSB: 3



2-74

42. (p. 24) A firm may choose to maintain or increase its market share, sometimes at the expense

of greater profits if

A. there are poor sales databases.

B. there are fluctuations in inventory.

C. there are unpredictable sales expenses.

D. industry status or prestige is at stake.

E. inflation is present.

A firm may choose to maintain or increase its market share, sometimes at the expense of

greater profits if industry status or prestige is at stake.

AACSB: 3


Other Location: Web

43. (p. 24) Xbox video game consoles were developed through a joint venture between

Microsoft and the WWE (World Wrestling Entertainment, Inc.). Complaints about the video

game began immediately after its introduction. These complaints ranged from missing parts to

incorrect programming. It would seem obvious that the manufacturer of Xbox video game

consoles should adopt __________ goals.

A. profit

B. sales revenue

C. market share

D. quality

E. employee welfare

The manufacturer needs quality goals because it had missing parts and incorrect

programming. If quality was present, there would not be complaints like these.

AACSB: 3 LL: 3



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44. (p. 24) Motorola invented the Six Sigma program that sets as a goal no more than one defect

in one million parts manufactured. This is an example of a __________ goal.

A. profit

B. sales revenue

C. market share

D. quality

E. employee welfare

Six Sigma is a quality program sets as a goal no more than 1 part per million defective. A firm

may target the highest quality, as Motorola does with its Six Sigma program.

AACSB: 3


45. (p. 24) Apple recently introduced the iPhone to great fanfare. Many corporate users have

found that it does not sync with their servers, thus not allowing users to download from his or

her company email account. When the phone was introduced, many users could not

immediately activate the phone. Based on these examples, it would seem that Apple should

have adopted more stringent __________ goals prior to releasing the iPhone.

A. technology

B. innovation

C. quality

D. service

E. satisfaction

It seems that Apple did not have the highest quality goals prior to introducing the iPhone.

Otherwise, the company would not likely have had activation problems.

AACSB: 3



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46. (p. 24) A catalog retailer who set as its qualitative goal to reduce merchandise returns by 20

percent would have set __________ goals.

A. customer satisfaction

B. employee welfare

C. market share


E. profit

Customer satisfaction can be measured directly with surveys or tracked with proxy measures

like number of customer complaints or percent of orders shipped within 24 hours of receipt.

AACSB: 3


47. (p. 24) Lands' End ships each order within 48 hours and its guarantee is the best in the

world—"Guaranteed. Period." These actions by Lands' End are most likely examples of

__________ goals.

A. employee welfare

B. market share

C. social responsibility

D. customer satisfaction

E. profit

Customer satisfaction can be measured directly with surveys or tracked with proxy measures

like number of customer complaints or percent of orders shipped within 24 hours of receipt.

AACSB: 3



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48. (p. 24) The founder of Starbucks, Howard Schultz, provides healthcare for all employees

who work over 20 hours per week. He says that "the companies that are doing the right thing

by covering their employees [with health care coverage] are paying for the companies who

don't do the right thing." This is an example of one of Starbucks' __________ goals.

A. satisfaction

B. sales revenue

C. market share

D. quality

E. employee welfare

A firm may recognize the critical importance of its employees by having an explicit goal

stating its commitment to good employment opportunities and working conditions for them.

AACSB: 3


49. (p. 24) Many universities and other educational institutions provide retirement benefits by

doubling the percentage the employee pays into the account up to a certain percentage of his

or her pay. This provides a wonderful benefit to those who are full-time employees. This is an

example of a(n) __________ goal.

A. satisfaction

B. sales revenue

C. market share

D. quality

E. employee welfare

A firm may recognize the critical importance of its employees by having an explicit goal

stating its commitment to good employment opportunities and working conditions for them.

AACSB: 3



2-78

50. (p. 24) Pfizer Pharmaceuticals is offering low-income senior citizens some of its most

widely used prescriptions for $15 each a month—much below the regular costs for these

drugs. This program, which serves senior citizens most likely grew out of a __________

goal.

A. profit

B. unit sales

C. sales revenue

D. market share

E. social responsibility

A firm may seek to balance conflicting goals of consumers, employees, and stockholders to

promote overall welfare of all these groups, even at the expense of profits.

AACSB: 3


Other Location: Web

51. (p. 24) Hasbro is a $3 billion toy company that prides itself on donating to organizations that

help children, since children and their parents are the target market for the business. This is an

example of how Hasbro participates in corporate

A. return on.

B. market share.

C. sales revenue.

D. unit sales.

E. social responsibility.

A firm may seek to balance conflicting goals of consumers, employees, and stockholders to

promote overall welfare of all these groups, even at the expense of profits.

AACSB: 2 LL: 3



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52. (p. 25) A(n) __________ is the visual display of the essential information related to

achieving a marketing objective.

A. marketing screen

B. objective dash

C. marketing dashboard

D. information screen

E. corporate dashboard

Key term definition—marketing dashboard

AACSB: 3


53. (p. 25) A measure of the quantitative value or trend of a marketing activity or result is called

a

A. trend analysis.

B. marketing measurement.

C. marketing dashboard.

D. marketing metric.

E. value analysis.

Key term definition—marketing metric

AACSB: 3



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54. (p. 25) Which of the following statements about marketing metrics is correct?

A. A marketing metric is a qualitative trend.

B. A marketing metric is a marketing activity.

C. A marketing metric is one of the four elements of the marketing mix.

D. A marketing metric is a measure of the quantitative value of a marketing activity.

E. A marketing metric is the visual display of the essential information related to achieving a


A marketing metric is a measure of the quantitative value or trend of a marketing activity or

result.

AACSB: 3


FIGURE 2-2


2-81

55. (p. 25) In Figure 2-2, the pie charts refer to:

A. annual contributions to sales and margins.

B. sales versus percentage margin.

C. sales versus cost of sales.

D. percentage difference in sales and margin.

E. moving averages for sales.

The two pie charts at the bottom of the marketing dashboard shown in Figure 2-2 measure

contribution to 2001 sales and contribution to 2001 margin. The other graphics are bar charts

and line charts.

AACSB: 3


Type: Enhanced

56. (p. 25) According to Figure 2-2, during which year did cost of sales closely approach sales?

A. 1998

B. 1999

C. 2000

D. 2001


In Figure 2-2, on the graph labeled "Sales vs. Cost of Sales" the line (cost of sales) comes the

closest to the bar (sales) in 1998.

AACSB: 3 LL: 2


Type: Enhanced


2-82

57. (p. 25) In Figure 2-2, the sales (revenue) curve is the one that starts at about $2 million in

1998, and the percentage margin is the other one. So, according to Figure 2-2, during which

year was the percent margin the largest?

A. 1998

B. 1999

C. 2000

D. 2001


In Figure 2-2, on the graph labeled "Sales vs. Percent Margin," the margin is highest in 2001

at approximately 17%, slightly higher than it was in 1998.

AACSB: 3


Type: Enhanced

58. (p. 25) According to Figure 2-2, during which year was sales revenue the largest?

A. 1998

B. 1999

C. 2000

D. 2001


In Figure 2-2, on the graphs labeled "Sales vs. Percent Margin" and "Sales vs. Cost of Sales,"

sales are shown as highest in 2000.

AACSB: 3 LL: 2


Type: Enhanced


2-83

59. (p. 25) Which of the following statements about a marketing dashboard is most true?

A. The more detail that is displayed the better it is for the manager.

B. Up to 20 marketing metrics are shown on the marketing dashboard screen.

C. The marketing dashboard is updated weekly.

D. Marketing dashboards often show key measures in words, not charts or graphs.

E. Marketing dashboards provide graphic displays of a product category's performance, such

as sales, cost of sales, and percent margin.

Marketing dashboards show graphic displays of key measures of a product category's

performance, such as sales, cost of sales, and percent margin.

AACSB: 3


60. (p. 26) In design, a marketing plan is most closely related to a

A. novel.

B. pyramid.

C. road map.

D. circle.

E. cloverleaf.

Most organizations formalize the strategic marketing process as a marketing plan, which is a

road map for the marketing activities of an organization for a specified future time period,

such as one year or five years.

AACSB: 3



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61. (p. 26) If sales are shown as decreasing on your marketing dashboard, what should you

investigate with market research?

A. The accounting records to be sure they are accurate

B. The financial statements

C. Whether consumer tastes have changed

D. The number of support personnel you have at the plant

E. How long the production line is running

Marketing is often about grappling with sales shortfalls. You'll want to do the marketing

research to see if the problem starts with (1) an external factor like changing consumer tastes

or (2) an internal factor like a breakdown in your distribution.

AACSB: 3


62. (p. 27) Large organizations are extremely complex. They usually consist of __________

organizational level(s) whose strategy is linked to marketing.

A. one

B. three

C. five

D. fifteen

E. fifty

Large organizations are extremely complex. They usually consist of three organizational

levels whose strategy is linked to marketing. Figure 2-3 shows these levels as corporate-level

strategy, business unit-level strategy, and functional-level strategy.

AACSB: 3



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63. (p. 27) Bill McDermott is President and CEO of SAP Americas and Asia Pacific Japan. SAP

is a company that sells extremely expensive enterprise resource planning software to large and

mid-sized companies. McDermott operates at the __________ level of his organization.

A. business unit

B. functional

C. corporate

D. strategic

E. back office

The corporate level is where top management directs overall strategy for the entire

organization.

AACSB: 3


64. (p. 27) The corporate level is where top management directs

A. all employees' training and orientation.

B. recruitment strategy and tactics.

C. overall strategy for the entire organization.

D. overall sales projections.

E. functional-level strategy.

Text term definition—corporate level

AACSB: 3



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65. (p. 27) A strategic business unit refers to a subsidiary, division, or unit of an organization

that

A. directs overall strategy for the organization.

B. markets a set of related products to a clearly defined group of customers.

C. has marketing and other specialized activities.

D. also has a comparable non-business unit.

E. is usually non-profit.

Key term definition—strategic business unit

AACSB: 3


66. (p. 27) The acronym SBU stands for

A. standard business unit.

B. strategic business unit.

C. strategic benefit of usage.

D. service business unit.

E. strategic business usage.

Text term definition—strategic business unit

AACSB: 3


67. (p. 27) The business unit level

A. works most directly with the targeted customers.

B. directs the overall strategy for the organization.

C. is most likely to change substantially over time.

D. provides more end-user analysis.

E. is the level at which managers set a more specific strategic direction for their businesses to

exploit value-creating opportunities.

Text term definition—business unit level

AACSB: 3 LL: 1



2-87

68. (p. 27) Which of the following statements about the strategic business unit level is most

true?

A. It is the level that works most directly with the targeted customers.

B. The overall strategy for the organization is directed at the strategic business unit level.

C. In more complex organizations, the corporate level and the strategic business unit level

may merge.

D. More end-user analysis is provided at the strategic business unit level then at the functional

level.

E. The strategic direction is more specific at the strategic business unit level than at the

corporate level.

At the strategic business unit level, managers set a more specific strategic direction for their

businesses to exploit value-creating opportunities than at the corporate level.

AACSB: 3


69. (p. 27) Each strategic business unit has marketing and other specialized activities (e.g.,

finance, manufacturing, or research and development) at the __________ level, where groups

of specialists create value for the organization.

A. top management

B. business unit

C. functional

D. corporate

E. strategic

Text term definition—functional level

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2-88

70. (p. 27) Specialized functions such as marketing and finance are generally referred to as

A. functional areas.

B. departments.

C. groups.

D. teams.

E. partnerships.

Text term definition—department

AACSB: 3


71. (p. 27) At what overall organizational level do people in the finance and the human

resources departments operate?

A. top management level

B. strategic business unit level

C. functional level

D. corporate level

E. middle management level

Specialized activities such as human resources, finance, research and development, operate at

the functional level of the overall organization.

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72. (p. 27) The marketing department provides leadership activities in

A. talent management.

B. fiscal restraint.

C. look outward, keeping the organization focused on creating value both for it and for

customers.

D. creating the corporate culture.

E. sustaining the means-end chain.

A key role of the marketing department is to look outward, keeping the organization focused

on creating value both for it and for customers.

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73. (p. 27) A key role of the marketing department is to

A. allocate financial resources across business units.

B. set the overall mission of the company.

C. provide talent management services.

D. look outward.

E. assess global political situations.

A key role of the marketing department is to look outward, keeping the organization focused

on creating value both for it and for customers.

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74. (p. 28) __________ are an organization's special capabilities, including skills, technology,

and resources that distinguish it from other organizations and that provide value to its

customers.

A. Accomplishments

B. Acquisitions

C. Capacities

D. Characteristics

E. Competencies

Text term definition—competencies

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75. (p. 28) Rhone-Poulenc is an international French company that produces and markets a

variety of chemicals and pharmaceuticals. Due to the resources it makes available to its

scientists and researchers, the company has a number of Nobel Prize winners working in its

laboratories. This ability to attract some of the finest minds in the world to its workforce is an

example of a(n):

A. synergistic capacity.

B. organizational culture.

C. unsought benefit.

D. product development strategy.

E. competency.

Competencies are an organization's special capabilities, including skills, technology, and


AACSB: 3



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76. (p. 28) Designing a car is expensive and time-consuming even with the use of computers.

This is because until recently there was no way for all the varied departments that are

involved in new car development to work together. DaimlerChrysler has created a unique

central Internet-based system that cuts the design and production process by at least two

years, thus providing value to the customer. This is an example of a(n)

A. benchmarking project.

B. innovation-oriented mission.


D. operational goal implementation.

E. competency.

Competencies are an organization's special capabilities, including skills, technology, and


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77. (p. 28) Evergreen Air Center is the world's biggest parking lot for unwanted aircraft. Airlines

pay a monthly fee from $750 to $5,000 to mothball airplanes at this site. Its location is on

1,600 acres of Arizona desert. The Southwest climate serves as a cheap and effective airplane

preservative. Evergreen's location is its

A. operational goal.

B. competency.

C. tactical mission.

D. benchmarked differentiator.

E. innovative vision.

Competences are an organization's special capabilities (in this case, the climate gives it the

capabilities to preserve planes cheaply and efficiently) that distinguish it from other

organizations and provide value to its customers, the airlines.

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78. (p. 28) Mobile phone companies broke the age-old business rule of staying within their

__________ by going beyond their expertise in running networks and billing subscribers to

designing handsets. Nokia, on the other hand, boosted its success in handsets in large part by

staying focused on what it does best: manufacturing handsets and watching carefully for the

latest consumer trends.

A. goals

B. mission

C. innovative vision

D. competency

E. action program

Competences are an organization's special capabilities (in this case, running networks, and

billing subscribers) that distinguish it from other organizations and provide value to its

customers, the mobile phone user.

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79. (p. 28) __________ is a unique strength relative to competitors, often based on quality, time,

cost, or innovation.

A. Market penetration

B. Product differentiation

C. Competitive advantage

D. Business force

E. Organizational culture

Text term definition—competitive advantage

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80. (p. 28) VideoAdvantage.net is a small company that rents DVD movies by mail using the

Internet. It jumped into an industry where there were no firm leaders but lots of competitors

and established a loyal clientele by seizing the opportunity to provide a service that was not

available through other companies that rented movies over the Internet—reliable overnight

shipment. Its delivery system created its

A. viable mission.

B. competitive advantage.


D. benchmarking focus.

E. sales orientation.

Competitive advantage is a unique strength relative to competitors, often based on quality,

time, cost, or innovation. In this case, it is the fast, reliable delivery.

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81. (p. 28) Men's Wearhouse (MW) caters to the man who doesn't necessarily enjoy shopping.

The stores are located in outdoor shopping centers so that customers can get in and out

quickly. Additionally, the MW targets the budget-conscious consumer with suit prices ranging

from $250 to $300. Earnings rose 23% recently, indicating that the location of the stores and

the pricing strategy both are part of the MW

A. competitive advantage.

B. benchmarking expertise.


D. leapfrogging capabilities.

E. viable mission.

Competitive advantage is a unique strength relative to competitors, often based on quality,

time, cost, or innovation. In this case, it is the store location and pricing strategy that are the

Men's Wearhouse competitive advantage.

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82. (p. 29) Which of the following are Lands' End competitors?

A. other catalog retailers

B. traditional department stores

C. mass merchandisers

D. specialty shops

E. All of the above are Lands' End competitors.

Lands' End, now part of Sears, competes not only with other catalog retailers of clothing but

with traditional department stores, mass merchandisers, specialty shops, and well-known

brands of clothing sold in all these kinds of retailers.

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83. (p. 29) The Boston Consulting Group (BCG) uses __________ to quantify performance

measures and growth targets to analyze its clients' SBUs as though they were a collection of

separate investments.

A. target marketing

B. business portfolio analysis

C. marketing strategic planning

D. market segmentation

E. stock segmentation

Text term definition—business portfolio analysis

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84. (p. 29) In the Boston Consulting Group (BCG) model to analyze a firm's strategic business

units, or SBUs, the vertical axis reflects the

A. return on investment desired.

B. market growth rate.

C. market segment size.

D. relative market share.

E. number of employees.

The vertical axis is the market growth rate, which is the annual rate of growth of the SBU's

industry. The horizontal axis is the relative market share, defined as the sales of the SBU

divided by the sales of the largest firm in the industry.

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85. (p. 29) In the Boston Consulting Group (BCG) model for analysis of a firm's strategic

business units, or SBUs, the horizontal axis reflects the

A. national forecast.

B. business portfolio in dollars.

C. years of experience.

D. market segment size.

E. relative market share.

The vertical axis is the market growth rate, which is the annual rate of growth of the SBU's

industry. The horizontal axis is the relative market share, defined as the sales of the SBU

divided by the sales of the largest firm in the industry.

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86. (p. 30) SBUs with a high share of high-growth markets that may not generate enough cash to

support their own demanding needs for future growth are known as

A. dogs.

B. cash cows.

C. question marks.

D. stars.

E. bonanzas.

Text term definition—stars. See Figure 2-4.

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87. (p. 30) __________ are SBUs with a low share of slow-growth markets—they may generate

enough cash to sustain themselves, but they do not hold the promise of ever becoming real

winners for the firm.

A. Cash cows

B. Stars

C. Question marks

D. Dogs

E. Problem children

Dogs are SBUs with low shares of slow-growth markets. Dropping SBUs in the dog quadrant

from a business portfolio is generally advocated except when relationships with other SBUs,

competitive considerations, or potential strategic alliances exist. Also, see Figure 2-4.

AACSB: 3


Other Location: Web


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88. (p. 29) __________ have dominant shares of slow-growth markets and provide cash to cover

the organization's overhead and to invest in other SBUs.

A. Cash cows

B. Stars

C. Question marks

D. Dogs

E. Problem children

Cash cows are SBUs that generate large amounts of cash, far more than they can invest

profitably in themselves. They have dominant shares of slow-growth markets and provide

cash to cover the organization's overhead and to invest in other SBUs.

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89. (p. 30) Using a BCG analysis, Kodak's ink-jet printers and cartridge business, is a(n)

A. star.

B. cash cow.

C. question mark.

D. exclamation mark.

E. shooting star.

Figure 2-4 shows Kodak's ink-jet printers and cartridge business as a question mark because

their future is uncertain.

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90. (p. 30) Solarcom is a 30-year-old information technology company that owns several

subsidiaries. One of its subsidiaries is Atlantix Global Systems, which is one of the leading

wholesalers for refurbished computer equipment, an industry that is growing worldwide.

According to the BCG portfolio matrix, Atlantix Global would most likely be classified as a

A. dog.

B. cash cow.

C. question mark.

D. star.

E. problem child.

Atlantix Global Systems has a large share of a high-growth industry, the definition of a star.

AACSB: 3


91. (p. 29) Several years ago, Black & Decker purchased General Electric's small appliances

product line. Black & Decker purchased the line because it needed the cash infusion from a

product line that had a dominant market share. The small appliance industry is a slow-growth

one. The small appliances product line is most likely a __________ for Black & Decker.

A. dog.

B. cash cow.

C. question mark.

D. star.

E. problem child.

The small appliances product line holds a large share of a slow-growth industry, the definition

of a cash cow.

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92. (p. 30) Several years ago, the Honda Motor Company unveiled the hybrid version of the

Honda Civic. While the hybrid vehicles are very fuel efficient, they are also very expensive to

purchase. Hybrid vehicles sales have increased over 570 percent with a compound annual

growth rate of 88.6%. Sales of the Civic eventually overtook those of the Toyota Prius,

making it the number one hybrid car in the U.S. For years Honda has experienced tremendous

success with their Accords—in fact, Honda cars are repeatedly the top-selling automobiles in

the U.S. Where would the Honda Civic (hybrid version) and the Honda Accord fall in the

BCG product portfolio matrix?

A. The hybrid Civic would be a classified as a star, and the Accord would be classified a cash

cow.

B. The hybrid Civic would be considered a cash cow, and the Accord would be classified as a

star.

C. Due to the overwhelming success of Honda cars, both the Accords, and the hybrid Civics

would be classified as cash cows.

D. The Civic would be a problem child, and the Accord would be a cash cow.

E. The Civic would be considered a dog, and the Accord would be classified as a star.

The BCG matrix is based upon market growth rate and market share. The hybrid market is a

high growth market with little competition. Only Toyota is a competitor with the Prius. The

Honda Civic hybrid, is a new competitor in this high-growth market, and has slightly over

half of the market share of this market. The vehicle will require large injections of cash from

other products in the Honda line to maintain or increase market share. The Honda Accord

auto is well established in slower-growth markets and control a significant percentage of

market share. Thus, the Accord will be a cash cow for Honda, and the revenues generated

from the sale of these cars will be used to finance the cash-intensive marketing of the new

hybrid Civic, a star in the BCG matrix.

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93. (p. 30) In its business portfolio analysis, an organization's SBUs often start as __________

and then become __________.

A. dogs; question marks

B. question marks; stars

C. stars; question marks

D. stars; dogs

E. question marks; dogs

In its business portfolio analysis, an organization's SBUs often start as question marks and

proceed counterclockwise to become stars, then cash cows, and finally dogs.

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PORTFOLIO ANALYSIS FIGURE


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94. (p. 30) According to the Portfolio Analysis Figure, the dark circle 2 has __________ market

share than its largest competitor.

A. slightly more

B. slightly less



E. about the same

The horizontal axis shows that dark circle 2 has slightly less market share than its largest

competitor.

AACSB: 3


Type: Enhanced

95. (p. 30) According to the Portfolio Analysis Figure, the white circle in the highest growth

market is

A. circle 1.

B. circle 2.

C. circle 3.

D. circle 4.


The vertical axis represents market growth rate. Since white circle 2 is the highest on this

axis, it is in the highest growth market.

AACSB: 3 LL: 3


Type: Enhanced


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96. (p. 30) According to the Portfolio Analysis Figure, the most likely position for dark circle 1

in the future is as a

A. star.

B. question mark.

C. problem child.

D. cash cow.

E. dog.

The figure shows dark circle 1 as descending into a dog.

AACSB: 3


Type: Enhanced

97. (p. 31) One of the strengths inherent in the use of the BCG portfolio analysis is the fact that

it

A. is remarkably easy to locate an SBU on the BCG matrix.

B. considers all factors that might impact an SBU's value to an organization.

C. acts as a strong motivational tool for employees in SBUs that have been labeled dogs or

problem children.

D. forces firms to assess their SBUs in terms of relative market share and industry growth

rate.

E. shows competitors how to improve.

The primary strength of business portfolio analysis lies in forcing a firm to place each of its

SBUs in the growth-share matrix, which in turn suggests which SBUs will be cash producers

and cash users in the future.

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Other Location: Web


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98. (p. 31) One of the weaknesses inherent in the use of the BCG portfolio analysis is that it

A. acts as a strong motivational tool for employees in SBUs that have been labeled dogs or

problem children.

B. is often difficult to get needed information.

C. considers so many SBU factors beyond market growth rate and relative market share.

D. does not require forecasts in order to be implemented.

E. makes efficient use of all competitive information.

Weaknesses of this [BCG] analysis arise from the difficulty in (1) getting the needed

information and (2) incorporating competitive information into business portfolio analysis.

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FIGURE 2-4


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99. (p. 30) According to Figure 2-4, the most likely position for dark circle 4 in the future is as a

A. star.

B. question mark.

C. problem child.

D. cash cow.

E. dog.

The figure shows dark circle 4 as moving counterclockwise to become a dog.

AACSB: 3


Type: Enhanced

100. (p. 30) According to Figure 2-4, white circle 3 has __________ market share than its

largest competitor.

A. slightly more

B. slightly less



E. about the same

The horizontal axis shows that white circle 3 has slightly less market share than its largest

competitor, shown in circle 1.

AACSB: 3 LL: 2


Type: Enhanced


2-105

101. (p. 30) According to Figure 2-4, the white circle in the highest growth market is

A. circle 1.

B. circle 2.

C. circle 3.

D. circle 4.


The vertical axis represents market growth rate. Since white circle 2 is the highest on this

axis, it is in the highest growth market.

AACSB: 3


Type: Enhanced

102. (p. 32) Which market-product strategies do NOT require product changes?

A. market development and market penetration

B. market development and diversification

C. market penetration and product development

D. diversification and market penetration

E. diversification and product development

Market penetration is increasing the sales of present products in existing markets and market

development is selling existing products in new markets. Neither of these requires new

products. This is also shown in Figure 2-5.

AACSB: 3 LL: 2



2-106

103. (p. 32) Selling more Ben & Jerry's super premium ice cream to Americans is an example

of




D. diversification

E. market divestment

Market penetration is the marketing strategy of increasing sales of present products in existing

markets.

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104. (p. 31) Which market-product strategy requires no change in the product line but an

increase in sales to existing customers through better advertising, more retail outlets, lower

prices, or more effective distribution?

A. market development

B. market penetration


D. diversification

E. product divestment


markets.

AACSB: 3



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105. (p. 32) Many people enjoy cereal at breakfast. Cereal manufacturers who promote cereal as

a great late-night snack to the group of people who enjoy cereal at breakfast would be using a




C. differentiation

D. diversification



markets. Cereal manufacturers would be targeting current markets with current products, a

market penetration strategy.

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106. (p. 32) Assume Procter & Gamble's focus is in selling its strong existing product line to its

present American customers. This means that P&G has followed a successful strategy of

__________.



C. differentiation

D. diversification



markets. P&G targets the present markets with present products or a market penetration

strategy.

AACSB: 3



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107. (p. 32) Assume McDonald's is engaging in a market penetration strategy. Which of the

following actions best illustrates a market penetration strategy?






E. removing slow-moving products from its menus


markets. The Monopoly promotion involves selling more of McDonald's existing menu to its

present customers by encouraging more visits to the restaurant, a market penetration strategy.

AACSB: 3


108. (p. 32) For several years, advertisements for Arm & Hammer baking soda have prompted

consumers to place an opened box of the product in the refrigerator to lessen food odor and to

replace that box monthly. The same ads advise customers to pour the used box down their

kitchen sinks to freshen drains. Arm & Hammer employed a __________ strategy in its

attempt to sell more baking soda.




D. diversification

E. product penetration


markets. Arm & Hammer is attempting to sell more of their present product in current

markets. The company is not creating new products nor are they seeking new markets for

their product. They are attempting to create new uses for their product within existing

markets.

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109. (p. 31) Which market-product strategy requires no change in the product but requires a

company to seek out new customers in new markets?




D. diversification

E. all of the above

Text term definition—market development

AACSB: 3


110. (p. 32) Recently, American Express, Visa, and MasterCard have been pushing hard into the

small-ticket end of the credit card market. The purchase of items such as fast food meals,

movie popcorn, and candy have been targeted as growth areas for credit card usage. This is an

example of a __________ strategy on the part of the credit card companies.

A. market penetration.

B. market development.

C. product development.

D. diversification.

E. product dissemination.

Market development is the process of taking present products to new markets.

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111. (p. 32) Gulfstream Aerospace Corp. engaged in a __________ strategy when it sold three

Gulfstream V business jet aircraft to a foreign country's Ministry of Defense for use as

Special Electronic Mission Aircraft. This was Gulfstream's first sale to a foreign country.




D. diversification

E. product dissemination


AACSB: 3


112. (p. 32) Assume McDonald's is engaging in a market development strategy. Which of the

following actions best illustrates a market development strategy?







Market development is the process of taking present products to new markets. Opening a

McDonald's is taking the present product (menu and restaurant) to a new market (China), a

market development strategy.

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113. (p. 32) Mall of America hopes to increase traffic in the shopping center by offering free

lunches to children in Mall restaurants on Tuesdays. This promotion is directed to families

who currently do not shop at the mall. This is an example of the implementation of a





D. diversification

E. market divestiture


AACSB: 3


114. (p. 32) When Walt Disney Co. opened new theme parks in Paris, Tokyo, and Hong Kong, it

was using a ___________ strategy.



C. differentiation

D. diversification


Market development is the process of taking present products to new markets. Walt Disney

Company targets new markets with its present product, theme parks; it uses a market

development strategy.

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115. (p. 32) Which market-product strategy involves selling a new product to existing markets?



C. divestment

D. diversification


Text term definition—product development

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Other Location: Web

116. (p. 32) Matsura Industries distributes candy and coffee through its vending machines in

Tokyo. The addition of sandwich vending machines to the same market is an example of a





D. diversification

E. divestment

Product development is a market-product strategy that sells a new product to existing markets.

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117. (p. 32) Transportation Safety Technologies, Inc. originally produced and sold safety

devices to make the trucking industry safer especially on long hauls across North America. It

soon realized that transporting goods across U.S. borders by truck was expensive and time-

consuming for the truckers. Dozens of government agency approvals and costly downtime

hamper the process. Transportation Safety Technologies, Inc., then began providing its

trucking companies with International Trade Data Systems (ITDS). This new type of system

stores information about each shipment in a centralized database, which can be accessed at

border checkpoints and eliminate the need for costly manual inspections. This is an example

of the implementation of a __________ strategy.



C. divestment

D. diversification


Product development is a market-product strategy that sells a new product (a new information

system) to existing markets (truckers).

AACSB: 3


118. (p. 32) Which of the following actions best illustrates a product development strategy for

McDonald's?






E. opening McDonald's restaurants in Six Flags theme parks

The deli sandwiches (a new product) involve a new product for present restaurant customers,

a product development strategy. (A secondary, minor effect might be to attract new

customers.)

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2-114

119. (p. 32) When Johnson & Johnson develops complementary products to its existing product

line, such as Tylenol PM it is appealing to its current market with a new product, using a

___________ strategy.



C. differentiation

D. diversification


Johnson & Johnson uses a product development strategy when it targets its present customers

with new products.

AACSB: 3


120. (p. 32) Which of the following actions would best illustrate a diversification strategy for

McDonald's?







Selling McDonald's toys sold through Toys Я Us stores involves selling new products (toys)

to new (toy) customers, a diversification strategy. Even though many of these people may

have eaten at a McDonald's restaurant, the company leaves the restaurant business and goes

into the toy marketing business, which is a new business for McDonald's.

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121. (p. 32) Which market-product strategy requires a company to both develop new products

and seek out new markets?




D. diversification

E. divestment

Text term definition—diversification

AACSB: 3


122. (p. 32) The __________ is an approach whereby an organization allocates its marketing

mix resources to reach its target markets.

A. the calibrated marketing process

B. the strategic marketing process

C. the situational marketing process

D. the developmental market analysis

E. the market determinant method

Key term definition—strategic marketing process

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123. (p. 32) The key steps of planning, implementation, and evaluation are part of

A. gap analysis.

B. the strategic marketing process.

C. the situational marketing process.

D. the developmental market analysis.

E. the market determinant method.

Key term definition—strategic marketing process

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Other Location: Web


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124. (p. 32) What are the three steps involved in the planning phase of the strategic marketing

process?

A. situation (SWOT) analysis; market-product focus and goal setting; and marketing program

development

B. planning; implementation; and control

C. set market and product goals; select target markets; find points of difference; and position

the product

D. identify industry trends; analyze competitors; assess own company; and research customer

E. identify where we have been; where we are headed; and where we are now

The three steps involved in the planning phase of the strategic marketing process are listed in

Figure 2-5 as situation (SWOT) analysis, market-product focus and goal setting, and

marketing program.

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125. (p. 32) Step 2 in the planning phase of the strategic marketing process is




D. implementation.


The planning phase of the strategic marketing process has 3 steps. Step 1 is the situation

analysis. Step 2 is market-product focus and goal setting. Step 3 is the marketing program.

The implementation phase is when resources are obtained.

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2-117





D. implementation.


The planning phase of the strategic marketing process has 3 steps. Step 1 is the situation

analysis. Step 2 is market-product focus and goal setting. Step 3 is the marketing program.

The Implementation phase is when resources are obtained.

AACSB: 3



A. establishing the budget.

B. developing advertising appeals.

C. goal setting.

D. marketing programming.


As shown in Figure 2-6, the planning phase of the strategic marketing process consists of the

three steps shown at the top of the figure: (1) situation analysis, (2) market-product focus and

goal setting, and (3) the marketing program.

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128. (p. 32-33) Taking stock of where the firm or product has been recently, where it is now, and

where it is headed in terms of the organization's plans and the external factors and trends

affecting it is called the

A. systems analysis.

B. strategic market plan.

C. goal setting step.

D. planning gaps.


Key term definition—situation analysis

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129. (p. 33) The acronym "SWOT" used in the term "SWOT analysis" stands for

A. strengths, weaknesses, opportunities, and timing.

B. strategies, workload, opportunities, and timing.

C. strengths, weaknesses, opportunities, and threats.

D. simple, workable, optimal, and timely.

E. situational, worldwide, organizational and technological.

Key term definition—SWOT analysis

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130. (p. 33) An effective technique a firm can use to appraise in detail its internal strengths and

weaknesses and external opportunities and threats is called

A. SWOT analysis.

B. strategic management.


D. market programming.

E. marginal analysis.

Key term definition—SWOT analysis

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131. (p. 33) In the 1980s, poor quality and Japanese imports drove the Harley-Davidson

motorcycle company to the brink of bankruptcy. The company's share of the U.S. super-

heavy-weight market—motorcycles with engine capacity of 850 cubic centimeters or more—

collapsed from more than 40 percent in the mid 1970s to 23 percent in 1983. However, by

1989, Harley-Davidson controlled some 65 percent of the U.S. market. And in both the U.S.

and overseas markets, the company won't be able to meet demand for years. From a

marketing perspective, what was the most likely first step in Harley-Davidson's resurgence?

A. development of a new mission statement and subsequent marketing strategy

B. repositioning their product in the minds of motorcycle buyers

C. performing a SWOT analysis

D. seeking new markets for the motorcycles both in the U.S. and in foreign markets

E. improving the quality of their product and communicating this to motorcycle buyers

Prior to making changes in either product or marketing strategy, the firm would have needed

to ascertain its internal strengths and weaknesses and its external threats and opportunities.

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132. (p. 33) The consumer products industry is one with several large competitors, soaring raw






Whitestrips that consumers crave. P&G has also used its marketing know-how to develop


for P&G of this information would indicate that the overall industry situation is a __________

while the innovation taking place at P&G is a __________.


B. weakness; threat

C. threat; strength



A threat is an external factor such as soaring raw materials prices and strong demands from

powerful retailers for lower prices; a strength is an internal attribute such as innovation and

marketing know how that can be used to improve the company.

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2-121









for P&G of this information would indicate that the powerful retailers who demand lower

pricing is a __________ while the innovation taking place at P&G is a __________.


B. weakness; threat

C. threat; strength





marketing know how that can be used to improve the company.

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2-122









for P&G of this information would indicate that the soaring raw materials prices are a

__________ while the product placement highlighting its brands is a __________.


B. weakness; threat

C. threat; strength





product placement know how that can be used to improve the company.

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135. (p. 33) A recent Congressional initiative mandated that the U.S. Department of

Transportation (U.S. DOT) establish a national traffic information collection system. The

marketing manager of a company that provided traffic reports for local radio stations would

most likely incorporate this knowledge into its SWOT analysis as

A. a strength if the company has an existing working relationship with the U.S. DOT.

B. a threat if the U.S. DOT will give this information directly to the radio stations.

C. a weakness if the company that provides local traffic information has no employees

technologically capable of using the U.S. DOT system.

D. an opportunity if the U.S. DOT is creating a network of local traffic-information providers

to address the mandate.

E. all of the above

A working relationship with the USDOT would be an internal force that would positively

impact the company. If the information were provided directly to the radio stations so that the

stations will no longer need to pay for the information, it would be a threat since DOT is

external to the organization. It would be a weakness if there were no employees capable of

using the equipment that could be overcome fairly easily. The creation of a network of

companies like the local one would be an external positive influence and would therefore be

an opportunity.

AACSB: 3


136. (p. 34) What is the marketing term for aggregating prospective buyers into groups that have

common needs and will respond similarly to a marketing action?




D. profiling

E. mass marketing

Key term definition—market segmentation

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137. (p. 34) To develop a successful marketing plan for soda, __________ would most likely be

used to group consumers on the basis of whether they wanted sugar-free and caffeine-free

soda, caffeine-free sugared soda, or regular soda with sugar and caffeine.




D. profiling

E. mass marketing

Market segmentation is the term for aggregating prospective buyers into groups that have

common needs and will respond similarly to a marketing action.

AACSB: 3


138. (p. 34) A toothbrush manufacturer sells several lines of toothbrushes. One line is for small

children, one line is for people with gum problems, and one is for people who wear dentures.

These different products are targeted toward different groups based on

A. organizational strengths.

B. market programming.


D. distinctive competencies.

E. organizational opportunities.

Market segmentation involves aggregating prospective buyers into groups that have common

needs and will respond similarly to a marketing action.

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139. (p. 34) Marketing goal setting involves setting measurable __________ to be achieved.

A. financial limits

B. marketing objectives

C. quality standards

D. production quotas

E. research and development aspirations

Goal setting here involves setting measurable marketing objectives to be achieved possibly

for a specific market, a specific product or brand, or an entire marketing program.

AACSB: 3


140. (p. 35) Those characteristics of a product that make it superior to competitive substitutes

are called

A. consumer standards.

B. perceptual segments

C. marketing selectives.

D. points of difference.

E. product stereotypes.

Key term definition—points of difference

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141. (p. 35) At which step of the planning stage of the strategic marketing process does a firm

develop its marketing mix?

A. situation analysis

B. goal setting

C. marketing program

D. sales forecasting

E. market segmentation

The marketing program represents the "how" part of the strategic marketing process. At this

point, an organization develops both its marketing mix and budget.

AACSB: 3





toothpaste and Ben & Jerry's ice cream both reduced their earnings forecasts. Yet Proctor &




unique product placements on television shows that highlight its brands. Crest Whitestrips is

an example of P&G's

A. products.

B. prices.

C. promotions.

D. places.


Crest Whitestrips is a P & G product.

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2-127








unique product placements on television shows that highlight its brands. Product placement

on television shows is an example of P&G's

A. products.

B. prices.

C. promotions.

D. places.


Product placement on television shows is an example of P&G's promotion.

AACSB: 3


144. (p. 36) The __________ element of the marketing mix includes features, packaging, brand

name, and warranty.

A. product

B. pricing

C. promotion

D. place

E. services

The product element of the marketing mix includes features, packaging, brand name, service,

and warranty.

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145. (p. 36) The __________ element of the marketing mix includes outlets, channels, coverage,

transportation, and stock level.

A. product

B. pricing

C. promotion

D. place

E. budgeting

The place element of the marketing mix includes outlets, channels, coverage, transportation,

and stock level.

AACSB: 3


146. (p. 36) The second phase of the strategic marketing process is the

A. motivational phase.

B. strategic phase.

C. planning phase.

D. implementation phase.

E. evaluation phase.

Implementation, the second phase of the strategic marketing process, involves carrying out

the marketing plan that emerges from the planning phase.

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147. (p. 36) Two major elements of the implementation phase of the strategic marketing process

are





E. executing the marketing program and designing the marketing organization.

The four components of the implementation phase include (1) obtaining resources, (2)

designing the marketing organization, (3) developing schedules, and (4) actually executing the

marketing program designed in the planning phase.

AACSB: 3


Other Location: Web


are





E. obtaining resources and developing schedules.




AACSB: 3 LL: 2



2-130


are





E. obtaining resources and designing the marketing organization.




AACSB: 3



are:



C. developing schedules and executing the marketing program.


E. designing the marketing mix and setting the budget.




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151. (p. 37) The Xbox video game console was developed through a joint venture between

Microsoft and the WWE (World Wrestling Entertainment, Inc.). Plans were made to rush the

product to market to counter new PlayStation and Nintendo consoles that were also being

released about the same time. Complaints about the video game began immediately after its

introduction. These complaints ranged from missing parts to incorrect programming. In which

phase of the strategic marketing process did the Xbox strategy fail?

A. the goal-setting phase

B. the implementation phase

C. the control phase

D. the strategic development phase

E. the resource administration phase

The best-planned marketing strategy is virtually worthless if the plan cannot be successfully

implemented and executed. Successful implementation includes careful planning and

attention to specific tactics such as being sure all parts are present and that the programming

is correct.

AACSB: 3


152. (p. 37) A marketing strategy is the means by which a marketing goal is to be achieved. Two

factors that usually characterize a marketing strategy are

A. specific goals and organizational objectives.

B. a detailed marketing plan and marketing budget.

C. marketing strategies and marketing tactics.

D. a specified target market and a marketing program to reach it.

E. marketing programs and deviation control.

A marketing strategy is the means by which a marketing goal is to be achieved, usually

characterized by a specified target market and a marketing program to reach it. The term

implies both the end sought (target market) and the means to achieve it (marketing program).

AACSB: 3



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153. (p. 37) Which of the following statements reflects both of the key elements in developing a

marketing strategy for L. M. Schofield, Inc., a company that produces specialized concrete

surfaces for heavily trafficked areas such as retail outlets and amusement parks?

A. Buy ads in all the major trade journals aimed at businesses in the entertainment and/or

sports industry.

B. Communicate using direct mail about the various walking surfaces Schofield can create for

contractors who are building riding and walking paths.

C. Design a sample ad and test it using visitors to a trade show.

D. Hire six new sales representatives for the Midwest regional office and train them on all

aspects of strategy.

E. Create a focus group to decide on what surface to use for a religious-theme park in Brazil.

Alternative "b" is the only answer that features both of the two key elements in a marketing

strategy: (1) identifying a target market (contractors building riding and walking paths) and

(2) describing the program to reach it (direct mail to communicate the variety of surfaces). All

the other answers are examples of marketing tactics only.

AACSB: 3


154. (p. 37) A marketing __________ is defined as the means by which a marketing goal is to be

achieved. It is characterized by a specified target market and the marketing program to reach

it.

A. plan

B. tactic

C. strategy

D. concept

E. action program

Key term definition—marketing strategy

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155. (p. 37) Marketing tactics are

A. the long-term decisions made to implement the marketing program and the monitoring of

those decisions.

B. the detailed day-to-day operational decisions essential to the overall success of marketing

strategies.

C. the steps taken to develop an effective marketing plan.

D. the development of marketing strategies to achieve the organization's marketing objectives.

E. the refinement of the organization's mission based on the results obtained from a marketing

audit.

Key term definition—marketing tactics

AACSB: 3


156. (p. 37) David and Cecilia Stanford, owners of Prairie Herb vinegars, decided to offer the

product in 5-ounce and 13-ounce sizes as well as in a 16-ounce European glass bottle. They

decided to sell the vinegar only through the mail and to price the smaller bottles at $4.45 and

the larger bottles at $13.25. They were determining Prairie Herb's marketing

A. tactics.

B. missions.

C. visions.

D. strategies.

E. operational procedures.

Marketing tactics are detailed day-to-day operational decisions essential to the overall success

of marketing strategies.

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157. (p. 37) Compared to marketing strategies, marketing tactics generally involve actions that

A. must be taken sooner rather than later.

B. are long term and need to be carefully developed rather than short term.

C. involve upper levels of management rather than front-line managers.

D. are general rather than specific in nature.

E. have been successfully implemented in the past.

Marketing tactics are detailed day-to-day operational decisions essential to the overall success

of marketing strategies. Actions must be taken as conditions change and special situations

occur. They may or may not have been previously implemented.

AACSB: 3


158. (p. 37) The two major aspects of the evaluation phase of the strategic marketing process

are




D. identifying deviations from goals and acting on the deviations.

E. executing the marketing plan and designing the marketing organization.

The evaluation phase of the strategic marketing process seeks to keep the marketing program

moving in the direction set for it. Accomplishing this requires the marketing manger to (1)

compare the results of the marketing program with the goals in the written plans to identify

deviations and (2) act on these deviations correcting negative deviations and exploiting

positive ones.

AACSB: 3



2-135

159. (p. 37) The third phase of the strategic marketing process is the

A. implementation phase.

B. planning phase.

C. tactical phase.

D. evaluation phase.

E. goal-setting phase.

Figure 2-6 shows the three phases of the strategic marketing process. The evaluation phase is

the third phase. The evaluation phase of the strategic marketing process seeks to keep the

marketing program moving in the direction set for it.

AACSB: 3


160. (p. 38) The difference between the projection of the path to reach a new goal and the

projection of the path of the results of a plan already in place is called






Text term definition—planning gap

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2-136

161. (p. 38) Recently, Kodak had a very flat level of sales revenue. The CEO did not like the no-

growth results and instead forecasted an increase in sales revenue based on new plans and

actions. The difference between the existing flat level of sales revenue and the increased level

is known as






A planning gap is the difference between the projection of the path to reach a new goal and

the projection of the path of the results of a plan already in place.

AACSB: 3


162. (p. 38) Evergreen Air Center is the world's largest parking lot for unwanted commercial

aircraft. Airlines pay from $750 to $5,000 monthly for the storage services provided by

Evergreen. Prior to September 2001, the company had 140 discarded airplanes at its Arizona

facilities and was growing at a rate of about six planes monthly with about two a month sold

for parts and/or scrap metal. After calamity struck the airline industry in September 2001, the

airlines have retired over a thousand planes—many of which found their way to Evergreen.

Now the actual number of planes stored at Evergreen differs significantly from the prediction

based on previous behavior. This difference is referred to as







the projection of the path of the results of a plan already in place.

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2-137

163. (p. 38) After examining a planning gap, firms typically attempt to

A. decide if the time horizon should be increased or decreased.

B. perform a SWOT analysis with their major competitor as the focus.

C. use statistical trend analysis to interpret the results.

D. exploit a positive deviation and correct a negative deviation.

E. adopt a product-market focus.


the projection of the path of the results of a plan already in place. The ultimate purpose of the

firm's marketing program is to "fill in" this planning gap—to move its future sales revenue

line from the plan to the more challenging target.

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FIGURE 2-10


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164. (p. 38) Figure 2-10 shows Kodak's sales revenues, projected and actual. This figure depicts

A. SWOT analysis.

B. marketing dashboard analysis.

C. industry analysis.

D. business portfolio analysis.

E. planning gap analysis.

A planning gap is the difference between the projection of the path to reach a new goal (line

BD) and the projection of the path of the results of a plan already in place (line BC). So, this

is an example of planning gap analysis, where the wedge DBC shows the planning gap.

AACSB: 3


Type: Enhanced

165. (p. 38) Based on the information shown in Figure 2-10, Kodak's planning gap between the

years 2003 and 2010 is depicted by the area bounded in the figure by points

A. CBE.

B. DBC.

C. DBE.

D. ABD.

E. ABC.


BD) and the projection of the path of the results of a plan already in place (line BC). So, the

planning gap is the area bounded by DBC.

AACSB: 3 LL: 2


Type: Enhanced


2-139

166. (p. 38) It is 2003 and you are the CEO of Kodak. In Figure 2-10, you project the line BD.

This line is Kodak's

A. planning gap.

B. projected sales revenues without new plans and actions.

C. actual sales revenues.

D. projected target sales revenues with new plans and actions.

E. projected profits.


BD) and the projection of the path of the results of a plan already in place (line BC). So, BD

in Figure 2-10 is the projection of the path to reach a new goal.

AACSB: 3


Type: Enhanced

167. (p. 38) It is now 2008 and you are CEO of Kodak. Figure 2-10 shows the planning gap

analysis you did in 2003. You now observe that the planning gap

A. is widening.

B. is becoming narrower.

C. is staying the same.

D. cannot be determined from the information given.

E. is shown by the wedge CDE.


BD) and the projection of the path of the results of a plan already in place (line BC). Because

actual sales revenue shown by BE from 2003 to 2007 is actually below line BC, the planning

gap is widening.

AACSB: 3 LL: 2


Type: Enhanced


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168. (p. 42) The BP Helios House is

A. a green gas station.

B. a museum showing sustainable ideas for the future.

C. a shelter for the homeless in L.A.

D. a home-away-from-home for families of very sick children.

E. the name of the BP corporate office park.

The BP Helios House is a retail gasoline station located in Los Angeles that stresses its green,

environmentally-friendly initiatives.

AACSB: 3


169. (p. 42) The four core values of BP include

A. performance-driven.

B. innovative.

C. progressive.

D. green.


To help translate its mission into practical action, BP also specifies four core values. These

values express the way BP does business; they provide the foundation on which decisions are

based; and they enable the presentation of a consistent message to all stakeholders. The values

are (1) performance-driven, (2) innovative, (3) progressive, and (4) green.

AACSB: 3



2-141

Essay Questions

170. (p. 22) Explain what a visionary organization is and how visionary organizations formulate

strategies.

Management experts stress that to be successful, today's organizations must be visionary—

must both anticipate future events and respond quickly and effectively. This requires a

visionary organization to specify its foundation (why), set a direction (what), and formulate

strategies (how). An organization's foundation is its philosophical reason for being –why it

exists. So its senior managers must identify its core values and describe its mission and

organizational culture—its purpose for being. Next, these managers can set the direction for

the organization by defining its business and specifying its long-term and short-term goals.

AACSB: 3


171. (p. 23) List potential stakeholders for the college or university that you attend.

Students' answers will vary, but each answer should recognize that there are both external and

internal stakeholders for each organization. Their lists could include students, deans,

instructors, the community in which the institution is located, boards or governments that

regulate campus activities, guest speakers, and graduates.

AACSB: 3 LL: 3


172. (p. 23) What is a corporate mission?

By understanding its core values, an organization can take steps to define its mission, a

statement of the organization's function in society, often identifying its customers, markets,

products, and technologies. Today, often used interchangeably with vision, a mission

statement should be clear, concise, meaningful, inspirational, and long-term.

AACSB: 3 LL: 1



2-142

173. (p. 24) Name and briefly describe the seven types of corporate goals.

The seven types of corporate goals are:

(1) Profit. Economic theory assumes a firm seeks to maximize long-run profit.

(2) Sales Revenue. A firm may elect to maintain or increase its sales level, even though


(3) Market Share. A firm may choose to maintain or increase its market share--sometimes at

the expense of greater profits.

(4) Quality. A firm may target the highest quality.

(5) Customer Satisfaction. Customers are the reason the organization exists, so their

perceptions and actions are of vital importance.

(6) Employee welfare. An organization may recognize the critical importance of its

employees by having an explicit goal stating its commitment to good employment

opportunities and working conditions for them.

(7) Social responsibility. A firm may seek to balance the conflicting goals of consumers,

employees, and stockholders to promote overall welfare of all these groups, even at the

expense of profits.

AACSB: 3


174. (p. 24) The logistics industry has sales of $800 billion per year. If a third party logistics

provider had sales of $8 billion, what would its market share be? Be sure to define market

share and show your work in your answer.

Market share is the ration of sales revenue of the firm to the total sales revenue of all firms in

the industry, including the firm itself. In this case, the sales of the firm itself ($8 billion)

divided by the sales revenue of all firms in the industry ($800 billion) means that the third

party logistics provider in question has a 1% market share.

AACSB: 3

LL: 3



2-143

175. (p. 25) Define "marketing dashboard" and "marketing metric" and explain how these terms

are related.

A marketing dashboard is the visual display of the essential information related to achieving a

marketing objective. Often it is an Internet-based display with real-time information, and

active hyperlinks to further detail. With a marketing dashboard, a marketing manager glances

at a graph or table and makes a decision whether or not to take action, or often to do more

analysis to understand the problem better.

Each performance variable is a marketing metric, a measure of the quantitative value or trend

of a marketing activity or result. These are displayed on the marketing dashboard.

AACSB: 3


176. (p. 27) Describe the composition of the three organizational levels whose strategy is linked

to marketing.

The three levels are:

(1) corporate level where the top management directs overall strategy for the entire

organization;

(2) strategic business unit (strategic business units refers to a subsidiary, division, or unit of an

organization that markets a set of related offerings to a clearly defined group of customers)

level where business unit managers set a more specific direction for their businesses to exploit

value-creating opportunities; and

(3) functional level where groups of specialists actually create value for the organization. (The

term "department" generally refers to these specialized functions such as marketing and

finance.)

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177. (p. 27) There is a General Motors plant in Spring Hill, Tennessee, that is devoted solely to

the production of Saturn cars. At which organizational level is this plant operating? Explain

your answer.

The Saturn plant operates as a business unit of General Motors. It is an organization that

markets a set of related products (in this case various Saturn models) to a clearly defined

group of customers (people who want to own Saturn cars).

AACSB: 3


178. (p. 28) Explain the difference between "competencies" and "competitive advantage" in an

organizational setting.

An organization's core competencies are its special capabilities, including skills, technologies,

and resources that distinguish it from other organizations and that provide value to its

customers. Exploiting these competencies can lead to success, particularly if other

organizations cannot copy them.

Competencies should be distinctive enough to provide a competitive advantage, a unique

strength relative to competitors, often based on quality, time, cost, or innovation.

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2-145

179. (p. 29-30) One of the most recognized approaches to business portfolio analysis is the

Boston Consulting Group's growth-share matrix. By dividing each dimension into high and

low categories, the matrix contains four cells. Briefly describe the four quadrants of the

matrix.

BCG has given specific names and descriptions to the four quadrants in its growth-share

matrix. They are as follows:

Cash Cows—(lower left quadrant) have a dominant share of a slow

growth market; they typically generate large amounts of cash to invest in other SBUs.

Stars—(upper left quadrant) have a high share of high-growth markets;

they may not generate enough cash to support their own needs to support future growth.

Question Marks—(upper right quadrant) are SBUs with a low share of

high growth markets; they require large amounts of money just to maintain their market share.

Dogs—(lower right quadrant) have a low share of low-growth markets;

although they may generate enough cash to sustain themselves, they hold little promise of

becoming winners for the firm.

AACSB: 3


180. (p. 31) The Boston Consulting Group's business portfolio analysis model can be used to

guide a firm as it tries to change its relative market share (the factor on the horizontal axis).

What are the strengths and weakness of this model?

The primary strength of business portfolio analysis lies in forcing a firm to place each of its

SBUs in the growth-share matrix, which in turn suggests which SBUs will be cash producers

and cash users in the future. Weaknesses of this analysis arise from the difficulty in (1) getting

the needed information and (2) incorporating competitive information into business portfolio

analysis.

AACSB: 3

LL: 2



2-146

181. (p. 32-35) Identify and describe the three phases of the strategic marketing process.

The three phases of the strategic marketing process are: planning, implementation, and

evaluation.

(1) Planning Phase includes

(a) situation (SWOT) analysis to identify industry trends, analyze competitors, assess own

company, and research customer

(b) market-product focus and goal setting, which involves setting market and product goals,

selecting target markets, finding points of difference, and positioning the product

(c) marketing program development, which involves developing the program's marketing mix,

and developing the budget by estimating revenues, expenses, and profits.

(2) Implementation Phase involves

(a) obtaining resources

(b) designing the marketing organization;

(c) developing schedules

(d) executing the marketing program.

(3) Evaluation Phase involves

(a) comparing the results of the marketing program plans to the results achieved to identify

deviations

(b) acting to correct negative deviations, and exploit positive ones.

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2-147

182. (p. 34) Identify and describe the four factors in a SWOT analysis and give examples for

Ben & Jerry's Homemade ice cream that help it identify the critical strategy-related factors

that could have major effects on it.

The four critical factors in a SWOT analysis and examples for Ben & Jerry's are:

(1) internal strengths, such prestigious, well known brand name among U.S. consumers, large

share of the super premium ice cream market, can complement Unilever's existing ice cream

brands, widely recognized for its social mission, values, and actions

(2) internal weaknesses, such as danger that B & Js social responsibility actions may add

costs, reduce focus on core business, need for experienced managers to help growth, modest

sales and profits in recent years

(3) external opportunities, such as growing demand for quality ice cream in overseas markets,

increasing U.S. demand for frozen yogurt and other low-fat desserts, success of many U.S.

firms in extending successful brand in one product category to others

(4) external threats, such as consumer concern with fatty desserts; B & J customers are the

type who read new government-ordered nutritional labels, competes with giant Nestlé and its

Haagen-Dazs brand, international downturns increase the risks for B & J in European and

Asian markets

AACSB: 3


183. (p. 34) A campus service organization annually raises money through the sale of t-shirts.

How could it use market segmentation to increase sales of the shirts? Be sure to include a

definition of market segmentation in your answer.

Market segmentation involves aggregating prospective buyers into groups, or segments that

(1) have common needs and (2) will respond similarly to a marketing action. Students'

examples will vary. The service organization may decide to sell shirts to two segments,

current students and local residents. A marketing plan should be developed for both segments

since the marketing plan will not necessarily be identical for each. For example, while the

price and product may be the same, the place the shirts are sold to the students would be the

campus bookstore, while the local residents may buy the shirts in a local clothing store. The

promotion for the shirts aimed at students may be flyers posted in the dorms and ads in the

college newspaper. The promotion aimed at the locals may be an ad in the local community

newspaper and flyers posted in the grocery store.

AACSB: 3 LL: 3



2-148

184. (p. 36) What are the marketing mix elements that comprise a cohesive marketing program?

Figure 2-8 illustrates the principal components under each of the four Ps. Product: features,

brand name, packaging, service, warranty. Price: list price, discounts, allowances, credit

terms, payment period. Promotion: advertising, personal selling, sales promotion, public

relations, direct marketing. Place: outlets, channels, coverage, transportation, and stock level.

The instructor should probably not expect students to recall every item, but can set a

reasonable number of items correctly identified, according to his or her expectations.

AACSB: 3


185. (p. 36) A campus service organization annually raises money through the sale of t-shirts.

What are the major components of the marketing program it should use to increase sales?

Give one example of each.

A marketing program should include product, price, promotion, and place strategies. Students'

examples will vary. The product strategy would include packaging and design of shirts.

Promotion strategy would encompass how the group plans to communicate information about

the sale to other students. Price strategy would include list price and any quantity discounts.

Place strategy would include how the shirts will arrive at the point of sale and selection of the

point of sale.

AACSB: 3


186. (p. 36) What are the four components of the implementation phase of the strategic

marketing process?

The four components of the implementation phase of the strategic marketing process are:

(1) obtaining resources

(2) designing the marketing organization

(3) developing schedules, and

(4) actually executing the marketing program designed in the planning phase.

AACSB: 3 LL: 1



2-149

187. (p. 37) What is the difference between marketing strategies and marketing tactics?

A marketing strategy is the means by which a marketing goal is to be achieved, usually

characterized by

(1) a specified target market and

(2) a marketing program to reach it; it implies both the end sought (target market) and the

means to achieve it (marketing program).

Marketing tactics, on the other hand, are detailed day-to-day operational decisions essential to

the overall success of marketing strategies, such as writing advertising copy or selecting the

amount for temporary price reductions. Marketing strategies and marketing tactics blend into

each other. Effective marketing program implementation requires concern for both.

AACSB: 3


188. (p. 37) What is the purpose of the evaluation phase of the strategic marketing process? How

is it accomplished?

The evaluation phase of the strategic marketing process seeks to keep the marketing program

moving in the direction set for it. Accomplishing this requires the marketing manager to

compare the results of the marketing program with goals in the written plans to identify

deviations and to act on these deviations—correcting negative deviations and exploiting

positive ones.

AACSB: 3


189. (p. 38) Explain what a planning gap is and what is used to close it.


the projection of the path of the results of a plan already in place. To increase the sales from

the current projection to the new, higher projection, a marketing plan should be used.

AACSB: 3 LL: 1


Documents

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