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Full file at https://fratstock.euChapter 02 - Developing Successful Marketing And Organizational Strategies
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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.
Full file at https://fratstock.euChapter 02 - Developing Successful Marketing And Organizational Strategies
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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.
A. Shareholders' equity
B. Profit
C. Inventory turnover
D. Contribution margin
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.
B. nonprofit organization.
C. community action program.
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."
A. benefit statement
B. business statement
C. functional philosophy
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."
A. benefit statement
B. business statement
C. functional philosophy
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,
including the firm itself.
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
D. social responsibility
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
marketing objective.
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
E. Cannot tell from the information given.
58. According to Figure 2-2, during which year was sales revenue the largest?
A. 1998
B. 1999
C. 2000
D. 2001
E. Cannot tell from the information given.
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.
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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
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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.
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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.
C. organizational culture.
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.
C. tactical innovation.
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
C. significantly more
D. significantly 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.
E. All of the circles are in low growth markets.
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
C. product development
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.
A. market penetration
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
__________.
A. market penetration
B. product development
C. differentiation
D. diversification
E. differentiation focus
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.
A. market penetration
B. market development
C. product development
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?
A. market penetration
B. market development
C. product development
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.
A. market penetration
B. market development
C. product development
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?
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. 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.
A. market penetration
B. market development
C. product development
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.
A. market penetration
B. product development
C. differentiation
D. diversification
E. market development
115. Which market-product strategy involves selling a new product to existing markets?
A. market penetration
B. market development
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
__________ strategy.
A. market penetration
B. market development
C. product development
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.
A. market penetration
B. market development
C. divestment
D. diversification
E. product development
118. Which of the following actions best illustrates a product development strategy for
McDonald's?
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. 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.
A. market penetration
B. product development
C. differentiation
D. diversification
E. market development
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120. Which of the following actions would best illustrate a diversification strategy for
McDonald's?
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. giving coupons for free fries for later use when the customer purchases a Big Mac
121. Which market-product strategy requires a company to both develop new products and
seek out new markets?
A. market penetration
B. market development
C. product development
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.
126. Step 3 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.
127. Step 1 in the planning phase of the strategic marketing process is
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.
E. situation analysis.
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
133. 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 their 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 powerful retailers who demand lower
pricing 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
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134. 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 their 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 soaring raw materials prices are a
__________ while the product placement highlighting its brands is a __________.
A. strength; weakness
B. weakness; threat
C. threat; strength
D. opportunity; threat
E. opportunity; 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.
A. aggregation marketing
B. market segmentation
C. market clustering
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.
C. market segmentation.
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
142. 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 their marketing know-how to develop
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.
143. 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 their marketing know-how to develop
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.
E. marketing dashboards.
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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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148. 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. obtaining resources and developing schedules.
149. 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. obtaining resources and designing the marketing organization.
150. 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. developing schedules and executing the marketing program.
D. identifying deviations in the marketing plan and acting on them.
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
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 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
A. the contribution margin.
B. the marginal space.
C. the breakeven point.
D. the planning gap.
E. differential location.
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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
A. the contribution margin.
B. the marginal space.
C. the breakeven point.
D. the planning gap.
E. differential location.
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.
E. all of the above.
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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
Learning Objective: 1
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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.
E. all of the above.
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
LL: 2 Learning Objective: 1
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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
LL: 2 Learning Objective: 1
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
LL: 2 Learning Objective: 1
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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
LL: 2 Learning Objective: 1
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
LL: 1 Learning Objective: 1
9. (p. 22) __________ 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
Key term definition—profit
AACSB: 3 LL: 1
Learning Objective: 1
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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.
Key term definition—profit
AACSB: 3
LL: 1 Learning Objective: 1
Other Location: Web
11. (p. 22) __________ is the money left over after a business firm's total expenses are
subtracted from its total revenues.
A. Shareholders' equity
B. Profit
C. Inventory turnover
D. Contribution margin
E. Asset leverage
Key term definition—profit
AACSB: 3 LL: 1
Learning Objective: 1
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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
LL: 1 Learning Objective: 1
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.
B. nonprofit organization.
C. community action program.
D. manufacturing agent.
E. cooperative.
Text term definition—nonprofit organization
AACSB: 3
LL: 1 Learning Objective: 1
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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.
B. nonprofit organization.
C. community action program.
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
LL: 3 Learning Objective: 1
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
LL: 2 Learning Objective: 1
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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
LL: 1 Learning Objective: 1
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
LL: 1 Learning Objective: 1
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
Learning Objective: 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
LL: 3 Learning Objective: 1
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
LL: 3 Learning Objective: 1
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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
LL: 2 Learning Objective: 1
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
LL: 3 Learning Objective: 1
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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
LL: 1 Learning Objective: 1
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.
A. benefit statement
B. business portfolio
C. functional philosophy
D. mission
E. corporate code
Key term definition—mission
AACSB: 3
LL: 1 Learning Objective: 1
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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."
A. benefit statement
B. business statement
C. functional philosophy
D. mission
E. organizational culture
A mission is a statement of the organization's functions in society, often identifying its
customers, markets, products, and technologies.
AACSB: 3
LL: 3 Learning Objective: 1
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."
A. benefit statement
B. business statement
C. functional philosophy
D. mission
E. corporate code
A mission is a statement of the organization's functions in society, often identifying its
customers, markets, products, and technologies.
AACSB: 3
LL: 3 Learning Objective: 1
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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
LL: 1 Learning Objective: 1
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.
C. organizational culture.
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
LL: 3 Learning Objective: 1
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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
LL: 1 Learning Objective: 1
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
LL: 2 Learning Objective: 1
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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
LL: 2 Learning Objective: 1
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
Learning Objective: 1
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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
LL: 1 Learning Objective: 1
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
LL: 1 Learning Objective: 1
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
Learning Objective: 1
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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
LL: 2 Learning Objective: 1
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
D. social responsibility
E. survival
If profits are acceptable, a firm may elect to maintain or increase its sales level even though
profitability may not be maximized.
AACSB: 3
LL: 3 Learning Objective: 1
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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.
If profits are acceptable, a firm may elect to maintain or increase its sales level even though
profitability may not be maximized.
AACSB: 3
LL: 2 Learning Objective: 1
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
LL: 1 Learning Objective: 1
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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
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,
including the firm itself.
E. the ratio of the profits of all firms in an industry to the profits of the firm.
Key term definition—market share
AACSB: 3
LL: 1 Learning Objective: 1
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
Key term definition—market share
AACSB: 3
LL: 1 Learning Objective: 1
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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
LL: 2 Learning Objective: 1
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
Learning Objective: 1
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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
LL: 3 Learning Objective: 1
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
LL: 3 Learning Objective: 1
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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
D. social responsibility
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
LL: 3 Learning Objective: 12
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
LL: 3 Learning Objective: 1
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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
LL: 3 Learning Objective: 1
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
LL: 3 Learning Objective: 1
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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
LL: 3 Learning Objective: 1
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
Learning Objective: 1
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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
LL: 1 Learning Objective: 2
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
LL: 1 Learning Objective: 2
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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
marketing objective.
A marketing metric is a measure of the quantitative value or trend of a marketing activity or
result.
AACSB: 3
LL: 2 Learning Objective: 2
FIGURE 2-2
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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
LL: 2 Learning Objective: 2
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
E. Cannot tell from the information given.
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
Learning Objective: 2
Type: Enhanced
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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
E. Cannot tell from the information given.
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
LL: 2 Learning Objective: 2
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
E. Cannot tell from the information given.
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
Learning Objective: 2
Type: Enhanced
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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
LL: 2 Learning Objective: 2
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
LL: 2 Learning Objective: 2
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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
LL: 3 Learning Objective: 2
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
LL: 2 Learning Objective: 2
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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
LL: 3 Learning Objective: 2
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
LL: 1 Learning Objective: 2
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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
LL: 1 Learning Objective: 2
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
LL: 1 Learning Objective: 2
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
Learning Objective: 2
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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
LL: 2 Learning Objective: 2
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
AACSB: 3
LL: 1 Learning Objective: 2
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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
LL: 1 Learning Objective: 2
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.
AACSB: 3
LL: 2 Learning Objective: 2
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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.
AACSB: 3
LL: 2 Learning Objective: 2
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.
AACSB: 3
LL: 2 Learning Objective: 2
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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
AACSB: 3
LL: 1 Learning Objective: 3
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
resources that distinguish it from other organizations and that provide value to its customers.
AACSB: 3
LL: 3 Learning Objective: 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.
C. organizational culture.
D. operational goal implementation.
E. competency.
Competencies are an organization's special capabilities, including skills, technology, and
resources that distinguish it from other organizations and that provide value to its customers.
AACSB: 3
LL: 3 Learning Objective: 3
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.
AACSB: 3
LL: 3 Learning Objective: 3
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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.
AACSB: 3
LL: 3 Learning Objective: 3
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
AACSB: 3
LL: 1 Learning Objective: 3
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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.
C. tactical innovation.
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.
AACSB: 3
LL: 3 Learning Objective: 3
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.
C. tactical innovation.
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.
AACSB: 3
LL: 3 Learning Objective: 3
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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.
AACSB: 3
LL: 2 Learning Objective: 3
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
AACSB: 3
LL: 1 Learning Objective: 3
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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.
AACSB: 3
LL: 1 Learning Objective: 3
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.
AACSB: 3
LL: 1 Learning Objective: 3
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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.
AACSB: 3
LL: 1 Learning Objective: 3
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
LL: 1 Learning Objective: 3
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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.
AACSB: 3
LL: 1 Learning Objective: 3
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.
AACSB: 3
LL: 2 Learning Objective: 3
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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
LL: 3 Learning Objective: 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.
AACSB: 3
LL: 3 Learning Objective: 3
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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.
AACSB: 3
LL: 3 Learning Objective: 3
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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.
AACSB: 3
LL: 2 Learning Objective: 3
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
C. significantly more
D. significantly less
E. about the same
The horizontal axis shows that dark circle 2 has slightly less market share than its largest
competitor.
AACSB: 3
LL: 3 Learning Objective: 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.
E. All of the circles are in low growth markets.
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
Learning Objective: 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
LL: 3 Learning Objective: 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.
AACSB: 3 LL: 2
Learning Objective: 3
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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.
AACSB: 3
LL: 2 Learning Objective: 3
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
LL: 2 Learning Objective: 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
C. significantly more
D. significantly 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
Learning Objective: 3
Type: Enhanced
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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.
E. All of the circles are in low growth markets.
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: 2 Learning Objective: 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
Learning Objective: 3
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103. (p. 32) 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
Market penetration is the marketing strategy of increasing sales of present products in existing
markets.
AACSB: 3
LL: 2 Learning Objective: 3
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
C. product development
D. diversification
E. product divestment
Market penetration is the marketing strategy of increasing sales of present products in existing
markets.
AACSB: 3
LL: 2 Learning Objective: 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
__________ strategy.
A. market penetration
B. product development
C. differentiation
D. diversification
E. differentiation focus
Market penetration is the marketing strategy of increasing sales of present products in existing
markets. Cereal manufacturers would be targeting current markets with current products, a
market penetration strategy.
AACSB: 3
LL: 3 Learning Objective: 3
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
__________.
A. market penetration
B. product development
C. differentiation
D. diversification
E. differentiation focus
Market penetration is the marketing strategy of increasing sales of present products in existing
markets. P&G targets the present markets with present products or a market penetration
strategy.
AACSB: 3
LL: 3 Learning Objective: 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?
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
Market penetration is the marketing strategy of increasing sales of present products in existing
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
LL: 3 Learning Objective: 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.
A. market penetration
B. market development
C. product development
D. diversification
E. product penetration
Market penetration is the marketing strategy of increasing sales of present products in existing
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.
AACSB: 3
LL: 3 Learning Objective: 3
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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?
A. market penetration
B. market development
C. product development
D. diversification
E. all of the above
Text term definition—market development
AACSB: 3
LL: 1 Learning Objective: 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.
AACSB: 3
LL: 3 Learning Objective: 3
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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.
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.
AACSB: 3
LL: 3 Learning Objective: 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?
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. giving coupons for free fries for later use when the customer purchases a Big Mac
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.
AACSB: 3
LL: 3 Learning Objective: 3
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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
__________ strategy.
A. market penetration
B. market development
C. product development
D. diversification
E. market divestiture
Market development is the process of taking present products to new markets.
AACSB: 3
LL: 3 Learning Objective: 3
114. (p. 32) When Walt Disney Co. opened new theme parks in Paris, Tokyo, and Hong Kong, it
was using a ___________ strategy.
A. market penetration
B. product development
C. differentiation
D. diversification
E. market development
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.
AACSB: 3
LL: 3 Learning Objective: 3
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115. (p. 32) Which market-product strategy involves selling a new product to existing markets?
A. market penetration
B. market development
C. divestment
D. diversification
E. product development
Text term definition—product development
AACSB: 3
LL: 1 Learning Objective: 3
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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
__________ strategy.
A. market penetration
B. market development
C. product development
D. diversification
E. divestment
Product development is a market-product strategy that sells a new product to existing markets.
AACSB: 3 LL: 3
Learning Objective: 3
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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.
A. market penetration
B. market development
C. divestment
D. diversification
E. product development
Product development is a market-product strategy that sells a new product (a new information
system) to existing markets (truckers).
AACSB: 3
LL: 3 Learning Objective: 3
118. (p. 32) Which of the following actions best illustrates a product development strategy for
McDonald's?
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. 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.)
AACSB: 3
LL: 3 Learning Objective: 3
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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.
A. market penetration
B. product development
C. differentiation
D. diversification
E. market development
Johnson & Johnson uses a product development strategy when it targets its present customers
with new products.
AACSB: 3
LL: 3 Learning Objective: 3
120. (p. 32) Which of the following actions would best illustrate a diversification strategy for
McDonald's?
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. giving coupons for free fries for later use when the customer purchases a Big Mac
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.
AACSB: 3
LL: 3 Learning Objective: 3
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121. (p. 32) Which market-product strategy requires a company to both develop new products
and seek out new markets?
A. market penetration
B. market development
C. product development
D. diversification
E. divestment
Text term definition—diversification
AACSB: 3
LL: 1 Learning Objective: 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
AACSB: 3
LL: 1 Learning Objective: 4
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
AACSB: 3 LL: 1
Learning Objective: 4
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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.
AACSB: 3
LL: 2 Learning Objective: 4
125. (p. 32) 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.
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
LL: 2 Learning Objective: 4
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126. (p. 32) Step 3 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.
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
LL: 2 Learning Objective: 4
127. (p. 33) Step 1 in the planning phase of the strategic marketing process is
A. establishing the budget.
B. developing advertising appeals.
C. goal setting.
D. marketing programming.
E. situation analysis.
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.
AACSB: 3
LL: 2 Learning Objective: 4
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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.
E. situation analysis.
Key term definition—situation analysis
AACSB: 3
LL: 1 Learning Objective: 4
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
AACSB: 3
LL: 1 Learning Objective: 4
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.
C. market segmentation.
D. market programming.
E. marginal analysis.
Key term definition—SWOT analysis
AACSB: 3 LL: 1
Learning Objective: 4
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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.
AACSB: 3
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132. (p. 33) 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
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.
AACSB: 3
LL: 3 Learning Objective: 4
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133. (p. 33) 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 their 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 powerful retailers who demand lower
pricing 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
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.
AACSB: 3
LL: 3 Learning Objective: 4
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134. (p. 33) 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 their 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 soaring raw materials prices are a
__________ while the product placement highlighting its brands is a __________.
A. strength; weakness
B. weakness; threat
C. threat; strength
D. opportunity; threat
E. opportunity; 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
product placement know how that can be used to improve the company.
AACSB: 3
LL: 3 Learning Objective: 4
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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
LL: 3 Learning Objective: 4
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?
A. aggregation marketing
B. market segmentation
C. market clustering
D. profiling
E. mass marketing
Key term definition—market segmentation
AACSB: 3
LL: 1 Learning Objective: 4
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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.
A. aggregation marketing
B. market segmentation
C. market clustering
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
LL: 3 Learning Objective: 4
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.
C. market segmentation.
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.
AACSB: 3
LL: 3 Learning Objective: 4
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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
LL: 1 Learning Objective: 4
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
AACSB: 3
LL: 1 Learning Objective: 4
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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
LL: 2 Learning Objective: 4
142. (p. 35) 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 their marketing know-how to develop
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.
Crest Whitestrips is a P & G product.
AACSB: 3
LL: 3 Learning Objective: 4
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143. (p. 35) 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 their marketing know-how to develop
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.
E. marketing dashboards.
Product placement on television shows is an example of P&G's promotion.
AACSB: 3
LL: 3 Learning Objective: 4
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.
AACSB: 3
LL: 2 Learning Objective: 4
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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
LL: 2 Learning Objective: 4
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.
AACSB: 3
LL: 1 Learning Objective: 5
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147. (p. 36) 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.
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
LL: 2 Learning Objective: 5
Other Location: Web
148. (p. 36) 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. obtaining resources and developing schedules.
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 LL: 2
Learning Objective: 5
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149. (p. 36) 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. obtaining resources 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
LL: 2 Learning Objective: 5
150. (p. 36) 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. developing schedules and executing the marketing program.
D. identifying deviations in the marketing plan and acting on them.
E. designing the marketing mix and setting the budget.
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
LL: 2 Learning Objective: 5
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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
LL: 3 Learning Objective: 5
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
LL: 2 Learning Objective: 5
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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
LL: 3 Learning Objective: 5
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
AACSB: 3
LL: 1 Learning Objective: 5
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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
LL: 1 Learning Objective: 5
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.
AACSB: 3
LL: 3 Learning Objective: 5
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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
LL: 2 Learning Objective: 5
158. (p. 37) The two major aspects of the evaluation 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 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
LL: 2 Learning Objective: 6
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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
LL: 2 Learning Objective: 6
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
A. the contribution margin.
B. the marginal space.
C. the breakeven point.
D. the planning gap.
E. differential location.
Text term definition—planning gap
AACSB: 3
LL: 1 Learning Objective: 6
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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. the contribution margin.
B. the marginal space.
C. the breakeven point.
D. the planning gap.
E. differential location.
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
LL: 2 Learning Objective: 6
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
A. the contribution margin.
B. the marginal space.
C. the breakeven point.
D. the planning gap.
E. differential location.
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
LL: 3 Learning Objective: 6
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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.
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. 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.
AACSB: 3
LL: 2 Learning Objective: 6
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
LL: 3 Learning Objective: 6
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.
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, the
planning gap is the area bounded by DBC.
AACSB: 3 LL: 2
Learning Objective: 6
Type: Enhanced
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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.
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, BD
in Figure 2-10 is the projection of the path to reach a new goal.
AACSB: 3
LL: 2 Learning Objective: 6
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.
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). 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
Learning Objective: 6
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
LL: 2 Learning Objective: 3
169. (p. 42) The four core values of BP include
A. performance-driven.
B. innovative.
C. progressive.
D. green.
E. all of the above.
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
LL: 2 Learning Objective: 2
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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
LL: 2 Learning Objective: 1
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
Learning Objective: 1
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
Learning Objective: 1
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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
profitability may not be maximized.
(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
LL: 1 Learning Objective: 1
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
Learning Objective: 1
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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
LL: 1 Learning Objective: 2
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.)
AACSB: 3
LL: 2 Learning Objective: 2
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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
LL: 3 Learning Objective: 2
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.
AACSB: 3
LL: 2 Learning Objective: 3
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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
LL: 2 Learning Objective: 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
Learning Objective: 3
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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.
AACSB: 3
LL: 2 Learning Objective: 4
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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
LL: 2 Learning Objective: 4
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
Learning Objective: 4
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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
LL: 1 Learning Objective: 5
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
LL: 3 Learning Objective: 5
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
Learning Objective: 5
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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
LL: 2 Learning Objective: 5
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
LL: 2 Learning Objective: 5
189. (p. 38) Explain what a planning gap is and what is used to close it.
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. To increase the sales from
the current projection to the new, higher projection, a marketing plan should be used.
AACSB: 3 LL: 1
Learning Objective: 6