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Marketing: Real People, Real Choices
1) A business plan ________.a. is a document that outlines marketing strategiesb. identifies how a company will measure and control specific marketing strategiesc. is another name for a marketing pland. includes the decisions that guide the entire organization or its business unitse. is another name for a SWOT analysis
Answer: d
2) Which of the following is a true statement about business planning?a. Business planning involves taking action before developing objectives.b. Business planning is an ongoing process.c. Business planning is concerned with the long term but not the short term.d. Business planning is concerned with the short term but not the long term.e. Business planning takes place after development of the marketing plan.
Answer: b
3) A(n)________ is a document that describes the marketing environment, outlines the marketing objectives and strategies, and identifies how the company will implement and control those strategies.a. marketing planb. communications planc. business pland. operational plane. financial plan
Answer: a
4) Unethical business practices are damaging toa. Only the stakeholdersb. Only the employeesc. To everyone in the societyd. Only to the financial departmente. Only to the CEO of the company
Answer: c
5) The fall of Enron and WorldCom was due toa. Substandard productsb. Poor strategic planc. Unsavoury financial and management practices
d. Failure of marketing plane. No longterm business plan
Answer: c
6) ________ is the third, or "nuts-and-bolts," level of planning.a. Strategic planningb. Functional planningc. Operational planningd. Product developmente. Business planning
Answer: c
7) The three levels of business planning are ________.a. managerial, operational, promotionalb. strategic, functional, operationalc. portfolio, strategic, functionald. SWOT, strategic, tacticale. operational, functional, tactical
Answer: b
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8) ________ is the managerial decision process that matches the organization's resources and capabilities to its market opportunities for long-term growth and survival.a. Operational planningb. Strategic planningc. Portfolio analysisd. SWOT analysise. Corporate culture
Answer: b
9) The CEO, president, and top executive officers are responsible for ________ in the strategic plan.a. operational planningb. developing the details of the pricing strategyc. designing ad campaigns
d. defining the firm's purposee. employee benefits
Answer: d
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10) SBU stands for ________.a. strategic buying utilitiesb. successful business utilitiesc. strategic business unitsd. standard business unitse. successful business units
Answer: c
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11) Strategic planning for a firm such as Disney with several SBUs probably occurs ________.a. only in its corporate headquartersb. only at the individual business unit levelc. at both the overall corporate level and at the individual SBU leveld. as needed based upon the success of the divisione. at the location best suited for this function based upon findings of the SWOT analysis
Answer: c
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12) Canada’s Bombardier produces transportation vehicles ranging from commercial aircraft to high-speed trains. Each product class is a semi-autonomous entity that operates as an independent business with its own mission and objectives and its own marketing strategy. Each product class is called_______________. a. strategic business unitb. market development unitsc. market penetration unitsd. standard business unitse. competitive intelligence units
Answer: a
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13) The marketing plan is a type of ________.a. day-to-day planb. code of ethicsc. strategic pland. independent plane. functional plan
Answer: e
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14) Which of the following is true about functional planning?a. It is conducted by the various functional areas of a firm.b. It is also called hierarchical management.c. It encompasses a longer time span than strategic planning does.d. It covers a shorter time span than operational planning does.e. It is the same as strategic planning.
Answer: a
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15) Vice presidents of large companies are typically in charge of ________ planning.a. businessb. strategicc. operationald. functionale. day-to-day
Answer: d
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16) Which of the following types of managers would be most likely to engage in operational planning on a regular basis?a. the company's CEOb. the company's sales managerc. the company's vice president of product research and developmentd. the company's vice president of human resourcese. the company's chief financial officer
Answer: b
17) In firms with multiple SBUs, the first step in strategic planning is for top management to ________.a. recruit and hire the right personnelb. examine historical datac. establish a mission for the entire corporationd. allocate resources to the company's various SBUse. establish marketing's short-term objectives
Answer: c
18) Questions such as "What business are we in?" and "What customers should we serve?" are typically addressed in the ________ stage.a. operational planningb. strategic planningc. market targetingd. functional planninge. marketing planning
Answer: b
19) A mission statement is a formal document that describes the organization's overall purpose and what it hopes to achieve in terms of its products, resources, and ________.a. customers
b. profitsc. employeesd. shareholderse. competitors
Answer: a
Page Reference: 51
20) The ________ for Mothers Against Drunk Driving (MADD) is "to stop drunk driving, support the victims of this violent crime, and prevent underage drinking."a. operational planb. mission statementc. portfolio analysisd. market penetration strategye. diversification strategy
Answer: b
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21) If McDonalds had defined its ________ as –“We are in the hamburger business”,they would not have been able to adapt to new customer preferences for healthier choices.a. return on marketing investmentb. portfolio analysisc. SWOT analysisd. missione. external environment
Answer: d
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22) The second step in strategic planning is to ________.a. formalize a mission statementb. establish the business portfolioc. set SBU and department-level objectivesd. set organizational objectivese. assess the organization's internal and external environments
Answer: e
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23) Analysis of a firm's internal environment identifies the firm's ________.a. Controllable elementsb. Uncontrollable elementsc. Futured. Planse. Customers
Answer: a
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24) A firm's internal business environment does NOT include ________.a. its employeesb. its corporate culturec. its productsd. its technologiese. elements of the legal environment
Answer: e
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25) Analysis of the external environment of an organization identifies the organization's ________.a. Controllable elementsb. Uncontrollable elementsc. Futured. Planse. Customers
Answer: b
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26) ____________ refers to political (including legal or regulatory), economic, social or cultural, technological, or other trends or issues that might impact a particular industry and business.a. PESTOb. portfolio analysisc. market analysisd. functional planning sessione. compatibility assessment
Answer: a
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27) Effective objectives should be all of the following EXCEPT which one?a. aspirationalb. specificc. attainabled. sustainablee. measurable
Answer: a
28) Within a larger corporation, each SBU ________.a. has its own business portfoliob. has access to equal resourcesc. has separate shareholdersd. is a separate profit centree. is dependent upon central management for a mission statement
Answer: d
Page Reference: 54
29) A(n)________ is a tool management uses to assess the potential of a firm's business portfolio. It helps management decide how to allocate resources among the firm's current SBUs.a. SWOT analysisb. portfolio analysisc. value chain
d. operational plane. compatibility assessment
Answer: b
Page Reference: 54
30) The growth-market share matrix developed by the Boston Consulting Group (BCG) is a type of ________.a. SWOT analysisb. portfolio analysisc. value chaind. situational analysise. compatibility assessment
Answer: b
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31) There is a total of ________ different types of SBUs represented within the BCG growth-market share matrix.a. twob. threec. fourd. fivee. six
Answer: c
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32) According to the BCG growth-market share matrix, ________ are strategic business units with products that have a dominant market share in a high-growth market.a. problem childrenb. exclamation pointsc. cash cowsd. starse. question marks
Answer: d
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33) According to the BCG growth-market share matrix, ________ are strategic business units with products that have a dominant market share in a low-growth market.a. dogsb. exclamation pointsc. cash cowsd. starse. question marks
Answer: c
34) According to the BCG growth-market share matrix, ________ are strategic business units with products that have low market shares in fast-growth markets.a. dogsb. exclamation pointsc. cash cowsd. starse. question marks
Answer: e
35) According to the BCG growth-market share matrix, ________ are strategic business units with products that have a small share of a slow-growth market.a. dogsb. exclamation pointsc. cash cowsd. starse. question marks
Answer: a
36) An SBU fits into the ________ category of the BCG model when sales have been steady and the firm has a large market share.a. problem childb. dogc. cash cowd. stare. question mark
Answer: c
37) What does ‘BCG’ in BCG matrix stand for?a. Buffalo Consulting Groupb. Burlington Consulting Groupc. Bombay Consulting Groupd. Boston Consulting Groupe. Bombino Consulting Group
Answer: d
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38) A growth strategy that attracts users of competitive brands is called a ________ strategy.a. market developmentb. product penetrationc. market penetrationd. diversificatione. product development
Answer: c
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39) When McDonald's purchased Donato's Pizza and a controlling interest in Chipotle Mexican Grills, the company was pursuing a ________ strategy.
a. market developmentb. product penetrationc. market penetrationd. diversificatione. product development
Answer: d
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40) The ________ provides managers with four different fundamental marketing strategies market penetration, market development, product development, and diversification.a. BCG growth-market share matrixb. portfolio analysisc. strategic pland. SWOT analysise. product-market growth matrix
Answer: e
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41) When General Mills urged consumers to lower their cholesterol by eating Cheerios twice a day over the course of six weeks, the aim was to increase usage among current customers. General Mills used a ________ strategy.a. market developmentb. product penetrationc. market penetrationd. diversificatione. product development
Answer: c
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42) ________ strategies emphasize both new products and new markets to achieve growth.a. Diversificationb. Market penetration
c. Market developmentd. Product developmente. Cash cow
Answer: a
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43) The four Ps are the components of the ________.a. marketing environmentb. functional planning mixc. marketing mixd. marketing concepte. controls
Answer: c
44) Which of the following best describes the components of the marketing mix?a. all aspects of the marketing environmentb. everything considered during functional planningc. product, price, place, and promotiond. production, price, distribution, and peoplee. people, product, price, and placement
Answer: c
45) The first step of the marketing planning process involves closely examining the ________.a. marketing strategiesb. product development processc. marketing controlsd. marketing environmente. functional plan
Answer: d
Page Reference: 58
46) Which step in developing a marketing plan includes an analysis of the marketing environment?a. situation analysisb. development of marketing objectivesc. selection of a target marketd. development of marketing strategiese. implementation of the marketing plan
Answer: a
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47) When Jay Minkoff at First Flavour decides what he wants to accomplish in terms of product development and pricing strategies,which step of the marketing planning process is he undertaking?a. perform a situation analysisb. set marketing objectivesc. define a marketing missiond. identify a target markete. develop a marketing mix
Answer: b
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48) In a marketing plan, the ________ state what the marketing function must accomplish to achieve overall business objectives.a. situation analysesb. strategic plansc. marketing objectivesd. market development strategiese. marketing controls
Answer: c
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49) In the ________ step of the marketing planning process, decisions are made concerning what markets to target and what marketing mix strategies to use.a. perform a situation analysisb. develop marketing strategiesc. implement the marketing pland. control the marketing plane. develop marketing metrics
Answer: b
50) A(n) ________ analysis is an analysis of an organization's internal strengths and weaknesses and the opportunities and threats in its external environment.a. strategicb. environmentalc. SWOTd. marketplacee. market
Answer: c
Page Reference: 58
51) According to the text, which of the following is NOT one of the six basic reasons why some organizations fail?a. Failure to price properlyb. Failure to innovatec. Failure to create valued. Failure to persist over timee. Failure to be flexible and adapt
Answer: a
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52) Measurements or “scorecards” marketers use to identify the effectiveness of differentstrategies or tactics is called _____________a. The market segmentb. Metricsc. Return on marketing investment
d. The marketing mixe. The mass market
Answer: b
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53) The ability of a firm to outperform the competition, providing customers with a benefitthe competition cannot is called_______________a. Marketing metricsb. Strategic business unitc. Return on marketing investmentd. Competitive Advantagee. Strategic planning
Answer: d
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54) The ________ is the most fundamental part of the marketing mix.a. productb. distributionc. priced. productione. profit
Answer: a
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55) Product planners for JetBlue Airways decided to include in-seat video games and television during flights that attracts more customers for flying JetBlue. This is an example of a ________ for JetBlue.a. target market selection strategyb. pricing strategyc. control processd. product strategye. marketing metric
Answer: d
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56) The ________ determines how much a firm charges for a product.a. Gantt chart analysisb. PERT chart analysisc. pricing strategyd. product strategye. return on marketing investment
Answer: c
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57) Westjet Airlines uses a ________ to target customers who could not previously afford air travel.a. pricing strategyb. market penetration strategyc. marketing metricd. distribution strategye. mission statement
Answer: a
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58) Marketers communicate a product's value proposition to the target market by implementing a ________.a. product segmentb. communication strategyc. pricing strategyd. distribution strategye. marketing metric
Answer: b
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59) Advertising, sales promotion, public relations, direct marketing, and personal selling are all part of the ________.a. target market strategyb. pricing strategyc. product strategyd. communication strategye. distribution strategy
Answer: d
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60) The ________ outlines how, when, and where the firm will make the product available to targeted customers.a. target market strategyb. pricing strategyc. product strategyd. promotion strategye. distribution strategy
Answer: e
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61) Many airlines now penalize customers who don’t opt for online purchase of "ticketless" flight reservations by charging a fee to those who purchase tickets at ticket counters. This is an example of a ________ strategy.a. distributionb. return on marketing investmentc. marketing controld. producte. promotion
Answer: a
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62) After marketing strategies are developed, the next step in marketing planning is ________.a. development of marketing objectivesb. strategic planningc. implementationd. situation analysise. pricing development
Answer: c
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63) The revenue or profit margin generated by investment in a specific marketing campaign or program, divided by the cost of that program ata given risk level is calleda. Corporate cultureb. Return on Marketing Investmentc. Implementationd. Situation analysise. SWOT analysis
Answer: b
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64) ROMI refers toa. SWOT analysisb. portfolio analysisc. implementation and controld. situation analysise. return on marketing investment
Answer: e
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65) As a part of the ________ process, managers need to look carefully at why a company isn't meeting its objectives.a. diversificationb. market developmentc. brand competition
d. marketing mixe. control
Answer: e
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66) Concrete measures of various aspects of marketing performance and benchmarks or targets are called ________.a. operational plansb. marketing metricsc. action plansd. marketing objectivese. pricing strategies
Answer: b
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67) The ROI of a campaign, the value of a prospect, and the response rates in direct marketing are all examples of ________.a. promotionsb. marketing metricsc. action plansd. situation analysise. corporate culture
Answer: b
68) Which of the following quantifies how an investment in marketing impacts the firm's success, financially and otherwise?a. return on marketing investmentb. marketing metricsc. SWOT analysisd. portfolio analysise. PERT chart analysis
Answer: a
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69) Which of the following is a common objection to relying exclusively on ROMI for measuring marketing success?a. In a company's accounting statements, marketing expenditures tend to appear as investments rather than costs.b. Calculating ROMI requires knowing what would have happened if the marketing expenditures had never taken place.c. ROMI tends to lead managers toward a more long-term decision perspective.d. ROMI focuses on a firm's sustainability commitments to the detriment of its short-term performance.e. ROMI calculates profit by deducting expenditures rather than dividing by expenditures.
Answer: b
Page Reference: 66
70) Reach and frequency of advertising, timeliness and accuracy of competitive intelligence, and consumer word-of-mouth activity are all examples of ________.a. ROMIb. marketing metricsc. action plansd. SBU objectivese. situation analyses
Answer: b
71) Marketing Plan does not include -a. SWOT analysisb. Production analysisc. Consumer analysisd. Situational analysise. Financial analysis
Answer: b
72) Cost-Benefit analysis is a part of ____________a. price strategyb. promotion strategyc. Marketing pland. strategic plane. marketing mix
Answer: c
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73) Marketing planning is followed by the ________, which details how the plan will be carried out, outlining the day-to-day execution.a. operational planb. time linec. SWOT analysisd. strategic plane. marketing metric
Answer: a
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74) ________ generally cover a shorter time period than other plans, perhaps only one or two months, and include detailed directions for specific activities to be carried out.a. Time linesb. Operational plansc. Marketing plansd. Strategic planse. Pricing strategies
Answer: b
Page Reference: 68
75) Which of the following is a tool that marketers often use to portray strengths,weaknesses,opportunities and threats to the company?a. a Gantt chartb. a SWOT analysisc. an SBU analysisd. a BCG matrixe. a marketing metric
Answer: b
Page Reference: 58
76) Kimball Gardens is a company that operates as two distinct businesses one that sells lawn and garden products and one that markets booklets. Each business is called a ________.a. separate entityb. strategic business unit (SBU)c. cash cowd. stare. business portfolio
Answer: b
77) A sales manager sets an objective for her team to increase the units sold by 5% for the quarter. This objective is most likely part of a detailed ________ plan that is created annually, semiannually, or quarterly.a. strategicb. functionalc. operationald. product developmente. human resources
Answer: c
78) ___________ reflects how a strategy is going to be enacteda. Tactic
b. Missionc. Objectived. Plane. control
Answer: a
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79) Columbia Sportswear makes nylon activewear for global markets. Its marketing manager set a goal to increase sales 12 percent over the next three years through the introduction of a new line of comfortable, lightweight clothing for people who fish. The marketing manager’s goals are covered under which level of planning-a. operational planningb. strategic planningc. control planningd. portfolio planninge. functional planning
Answer: e
Page Reference: 49
80) Columbia Sportswear has introduced a new line of comfortable, lightweight clothing for people who fish. Marketing communication manager decides to run a full-page ad in Field & Stream magazine in May to get potential customers to ask for their sporting goods.This is an example of________________.a. operational planningb. strategic planningc. business planningd. portfolio planninge. brand extension
Answer: a
81) Monsanto operates in many businesses, including pharmaceuticals and food products. The company defines its ________ as creating "abundant food and a healthy environment."
a. strategyb. marketing developmentc. business portfoliod. value-delivery networke. mission
Answer: e
82) When the makers of a ballpoint pen state they are in the communication equipment business, they are defining their mission too ________.a. narrowlyb. realisticallyc. specificallyd. broadlye. socially
Answer: d
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83) In recent years, security regulations enacted through the Transportation Safety Administration have affected Air Canada. These regulations are part of the ________ affecting this airline.a. external environmentb. internal environmentc. competitive intelligenced. diversification strategiese. market development strategies
Answer: a
Page Reference: 51
84) The overall patterns of change in the economy—including periods of prosperity,recession, depression, and recovery— that affect consumer and business purchasing power are called ____________a. Ups and Downsb. Peaks and Troughsc. Business Cycles
d. Trade Unionse. Boom times
Answer: c
Page Reference: 71
Objective: 2-3 Marketing mix decisions in International Markets
85) In choosing a proper marketing mix strategy for international markets, the most crucial decision a firm will have to make will concern ________.a. modifying the packaging to suit local requirementsb. adapting radio or TV advertisingc. standardization versus localization of the marketing mixd. modifying the pricing strategy to remain competitivee. Modifying the product
Answer: c
Page Reference: 70
Objective: 2-3 Marketing mix decisions in International Markets
86) Intermediaries a firm uses to represent it in other countries are calleda. Jobbersb. Export Merchantsc. Shippersd. Loaderse. Book keepers
Answer: b
Page Reference: 72
Objective: 2-3 Marketing mix decisions in International Markets
87) An agreement in which one firm gives another firm the right to produce and market its product in a specific country or region in return for royalties is called__________a. Trade agreementb. Import agreementc. Export agreementd. Licensing agreemente. No agreement
Answer: d
Page Reference: 72
Topic: Contractual Agreements
Objective: 2-3 Marketing mix decisions in International Markets
88) A form of licensing involving the right to adapt an entire system of doing business is called _________a. Special Licensingb. Franchisingc. Tradingd. Exportinge. Importing
Answer: b
Page Reference: 72Topic: Contractual Agreements
Objective: 2-3 Marketing mix decisions in International Markets
89) Some business relationships often take the form of a____________, in which two or more firms create a new entity to allow the partners to pool their resources for common goals.a. Partnershipb. Joint Venturec. Business companionshipd. Alliancee. Equity
Answer: b
Topic: Strategic Alliances
Objective: 2-3 Marketing mix decisions in International Markets
90) When the company entered Russia in 1990, there were no private businesses to supply the raw ingredientsfor its burgers. McDonald’s had to build its own facility, the McComplex, outside Moscow.This type of international market entry is called _________a. Allianceb. Franchisingc. Direct Investmentd. Exportinge. Importing
Answer: c
Page Reference: 74Topic: Direct Investment
Objective: 2-3 Marketing mix decisions in International Markets
91) Coca-Cola offering the same formula and Gillette offering the same razor products in each market they compete in are both examples of a ________ for international markets.a. Backward Invention Strategyb. Product Invention Strategyc. Product Adaptation Strategyd. Straight Extension Strategye. MultiProduct Strategy
Answer: d
Page Reference: 75
Objective: 2-3 Marketing mix decisions in International Markets
92) A ________ for international markets recognizes that in many cases, people in different cultures have strong and different product preferences.a. Backward Invention Strategyb. Product Invention Strategyc. Product Adaptation Strategyd. Straight Extension Strategye. MultiProduct Strategy
Answer: c
Page Reference: 75
Objective: 2-3 Marketing mix decisions in International Markets
93) In India, Pizza Hut offers pizzas with traditional toppings such as paneer and tikka. This is an example of ________________a. Backward Invention Strategyb. Product Invention Strategyc. Product Adaptation Strategyd. Straight Extension Strategye. MultiProduct Strategy
Answer: c
Page Reference: 75
Objective: 2-3 Marketing mix decisions in International Markets
94) A ________ means that a company develops a new product as it expands into foreign markets.a. Backward Invention Strategyb. Product Invention Strategyc. Product Adaptation Strategyd. Straight Extension Strategye. MultiProduct Strategy
Answer: b
Page Reference: 75
Objective: 2-3 Marketing mix decisions in International Markets
95) When a company develops a refrigerator that operates without electric power inorder to suit the local conditions (such as poorly developed infrastructure) of an international market would be said to be following which of the following product invention strategies?a. Backward Invention Strategyb. Product Invention Strategyc. Product Adaptation Strategyd. Straight Extension Strategye. MultiProduct Strategy
Answer: a
Page Reference: 75
Objective: 2-3 Marketing mix decisions in International Markets
96) A ________ occurs when an unauthorized party imports products and then sells them for a fraction of the normal domestic price.a. Price Gougingb. Black Tradingc. Black Marketingd. Dumpinge. Grey Market
Answer: e
Page Reference: 76
Objective: 2-3 Marketing mix decisions in International Markets
97) When a company tries to get a toehold in a foreign market by pricing its products lower than they are offered in their home market, this is called ________.
a. Price Gougingb. Black Tradingc. Black Marketingd. Dumpinge. Grey Market
Answer: d
Objective: 2-3 Marketing mix decisions in International Markets
98) As discussed in the text, the main requirement for a company seeking to establish distribution of their products in foreign markets is ________.a. Low currency exchange rateb. Suitable intermediaryc. Reliable distribution systemd. Low pricese. Railroads
Answer: c
Objective: 2-3 Marketing mix decisions in International Markets
99) The firms that compete in a market in which there are only a few other firms decide in advance on a common price for their product. This practice is called _____________a. market developmentb. product penetrationc. Dumpingd. Price Fixinge. Grey Marketing
Answer: d
Page Reference: 78Topic: Ethics in Marketing Mix
Objective: 2-3 Marketing mix decisions in International Markets
100) ______________raising the price of a product to take advantage of its popularity or scarcitya. Price Gougingb. product penetrationc. Dumpingd. Price Fixing
e. Grey Marketing
Answer: a
Page Reference: 78Topic: Ethics in Marketing Mix
Objective: 2-3 Marketing mix decisions in International Markets
101) Business planning is a process of making decisions that guide the firm in both the short and the long term.a. Trueb. False
Answer: a
102) The marketing planning process should be completed before the strategic planning process begins.a. Trueb. False
Answer: b
103) When major companies defraud the public, everyone suffers.a. Trueb. False
Answer: a
Topic: Ethics in Marketing Planning
104) Strategic planning is also referred to as functional planning.a. Trueb. False
Answer: b
Page Reference: 48
105) Strategic business units (SBUs) are individual units representing different areas of business within a firm that have their own missions, business objectives, resources, managers, and competitors.a. Trueb. False
Answer: a
Page Reference: 49
106) Functional planning at the corporate level today requires the development of a very broad-based mission statement.a. Trueb. False
Answer: b
Page Reference: 49
107) Employee morale, promotion strategies, and competitors' reactions are all aspects of a company's internal environment.a. Trueb. False
Answer: b
Page Reference: 52Topic: Internal Environment
Objective: 2-1 Strategic planning
108) SWOT stands for strengths, willingness, opportunities, and threats.a. Trueb. False
Answer: b
Page Reference: 58Topic: Situational Analysis
109) Opportunities and threats come from a company's internal environment.a. Trueb. False
Answer: b
Page Reference: 48Topic: Situational Analysis
110) To ensure attainability, marketers increasingly try to state objectives in general terms.a. Trueb. False
Answer: b
Topic: SBU Objectives
Objective: 2-1 Strategic planning
111) Managers using the Boston Consulting Group growth-market share matrix are assessing the potential of a firm's existing SBUs to generate cash needed to invest in other businesses.a. Trueb. False
Answer: a
Page Reference: 54Topic: Establish Business Portfolio
Objective: 2-1 Strategic planning
112) For Disney, its brick and mortar stores are in the question mark category, as their performance compared to overall specialty retail market has lagged in recent years.a. Trueb. False
Answer: a
Page Reference: 54Topic: Establish Business Portfolio
Objective: 2-1 Strategic planning
113) The Rocky Mountaineer implemented a diversification strategy by developing a single level glass dome service called SilverLeaf.a. Trueb. False
Answer: a
Page Reference: 56
Objective: 2-1 Strategic planning
114) The four Ps of marketing are people, placement, promotion, and pricing.a. Trueb. False
Answer: b
115) The first step when firms are considering to go international is to decide – To “Go” or not to “Go”.a. Trueb. False
Answer: a
Page Reference: 70Topic: Should we go Global
Objective: 2-3 Strategic Marketing Mix in International Markets
116) A firm's pricing strategy includes plans for prices for the final consumer as well as pricing that the firm will charge wholesalers and retailers.a. Trueb. False
Answer: a
Page Reference: 64Topic: Marketing Mix Strategies
117) The promotional strategy identifies how, when, and where the firm will make the product available to targeted customers.a. Trueb. False
Answer: b
Page Reference: 65Topic: Marketing Mix Strategies
118) The distribution strategy is the place component of the marketing mix.a. Trueb. False
Answer: a
Page Reference: 65Topic: Marketing Mix Strategies
119) Operational plans focus on the long-term execution of the marketing plan performed by top-level management.a. Trueb. False
Answer: b
Page Reference: 68Topic: Operational Planning
120) Exporting is the most low risk market entry strategya. Trueb. False
Answer: a
Objective: 2-3 Strategic Marketing Mix in International Markets
121) McDonalds has 30,000 restaurants that serve52 million people in 119 countries. The company follows the Franchising model of Market entry into foreign countries.a. Trueb. False
Answer: a
Page Reference: 72
Objective: 2-3 Strategic Marketing Mix in International Markets
122) Coca Cola and Pepsi offering traditional lemonade – Nimbu Pani, in India is an example of backward inventiona. Trueb. False
Answer: a
Page Reference: 75Topic: Product Decisions
Objective: 2-3 Strategic Marketing Mix in International Markets
123) Grey market goods are not counterfeit goods.a. Trueb. False
Answer: a
Page Reference: 76
Objective: 2-3 Strategic Marketing Mix in International Markets
124) Dumping is legal in all countriesa. Trueb. False
Answer: b
Topic: Distribution DecisionssObjective: 2-3 Strategic Marketing Mix in International Markets
125) Slotting Allowances prevent small retailers from reaching the consumera. True
b. False
Answer: a
Page Reference: 79Topic: Ethics in Marketing Mix
Objective: 2-3 Strategic Marketing Mix in International Markets
126) Explain how business planning helps managers in a firm.
Answer: Business planning is an ongoing process of making decisions that guide the firm both in the short term and for the long haul. Planning identifies and builds on a firm's strengths, and it helps managers at all levels make informed decisions in a changing business environment. Planning means the company develops objectives before it takes action.
127) Explain how society at large can be hurt by companies using unethical financial and management practices.
Answer: The fallout from the demise of WorldCom and Enron demonstrates how society at large can be hurt by unethical practices of a company. Everyone suffers from these unethical practices. Thousands of people lose their jobs and their retirement savings. Stakeholders such as stockholders lose their investments. Consumers end up paying for worthless merchandise or services.
Topic: Ethics in Marketing Planning
128) Compare and contrast strategic planning and operational planning.
Answer: Strategic planning is the managerial decision process that matches the firm's resources and capabilities to its market opportunities for long-term growth. In a strategic plan, top management defines the firm's purpose and specifies what the firm hopes to achieve. Operational planning focuses on the day-to-day execution of the functional plans and includes detailed annual, semiannual, or quarterly plans. Operational planning is done by supervisory managers. Strategic planning is big picture, while operational planning is nuts-and-bolts.
Page Reference: 48-50
129) Define strategic planning. Discuss the steps involved.
Answer: The process of matching a firm's resources and capabilities to its market opportunities is called strategic planning. At the outset, beginning at the corporate level, each company must define its overall mission. What is our business? Who is the customer? How should we develop our company's capabilities and focus its efforts? Answers to these questions are crucial in writing a clear mission statement. Missions should not be too broad, too narrow, or too shortsighted. The next step in strategic planning is evaluating the internal and external environment of the firm. After conducting a SWOT analysis, top management needs to translate the firm's mission statement into organizational or SBU-level objectives. These objectives should be specific, measurable, attainable, and sustainable. The fourth step is to establish the business portfolio. The final step in strategic planning is to develop growth strategies, such as market penetration strategies, product development strategies, market development strategies, and diversification strategies.
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130) PaperBackSwap.com needs to conduct a SWOT analysis. Explain the purpose of a SWOT analysis.
Answer: SWOT stands for strengths, weaknesses, opportunities, and threats. A firm's strengths and weaknesses focus on the company's internal environment, while the opportunities and threats focus on external environmental issues. A SWOT analysis enables a firm to develop strategies that make use of what the firm does best in seizing opportunities for growth, while at the same time avoiding external threats that might hurt the firm's sales and profits.
Page Reference: 58Topic: Situational Analysis
131) Jay Minkoff at First Flavor may use the Boston Consulting Group (BCG) matrix to help him in making decisions for his firm. What does he need to understand about the purpose of the matrix and the four categories of the BCG growth-market share matrix ?
Answer: The BCG model focuses on determining the potential of a firm's existing SBUs to generate cash that the firm can then use to invest in other businesses. By categorizing SBUs as stars, cash cows, questions marks, or dogs, the matrix helps managers make good decisions about how the firm should grow. Stars are SBUs with products that have a dominant market share in high-growth markets. Cash cows have a dominant market share in a low-growth potential market. Question marks, also called problem children, are SBUs with low market shares in fast-growth markets. Dogs are SBUs with low market share in low-growth markets.
Page Reference: 54Topic: Establish Business Portfolio
132) The BCG matrix is a useful approach to evaluate current businesses. Describe a device that a firm could use to decide how to make growth happen.
Answer: The product-market growth matrix is a useful device for analyzing different growth strategies. There are four strategies available to companies: market penetration, market development, product development, and diversification. Market penetration entails making more sales to current customers without changing products. Market development involves identifying and developing new markets for a company's products. New markets include demographic groups and geographic regions, among others. Companies can also consider product development, offering modified or new products to current markets. Diversifying companies might consider acquiring or starting new businesses unrelated to their core competencies.
Page Reference: 54Topic: Establish Business Portfolio
133) Briefly discuss how marketers measure return on marketing investment. Explain why this figure may not be sufficient to judge marketing's effectiveness.
Answer: Return on marketing investment (ROMI) is the net return from a marketing investment divided by the costs of the marketing investment at a given risk level. In other words, ROMI is a measure of the profits generated by investments in a marketing activity. There are several objectives to using ROMI exclusively to assess the effectiveness of marketing activities. First, in a company's accounting statements, marketing expenses typically appear as costs, rather than investments. Second, ROMI requires profit to be divided by
expenses, rather than subtracting expenses from profit. Third, calculating ROMI requires that marketers know what would have happened if the marketing expenditures had not taken place. Fourth, firms use different methods for calculating ROMI, making it difficult to compare the measures. Fifth, ROMI tends to lead managers to short-term decisions. Finally, ROMI does not emphasize a firm's sustainability commitment.
Page Reference: 66Topic: Develop an implementation plan
134) You are a sales manager and you are responsible for tracking a wide range of metrics related to your firm. Explain in what part of the marketing planning process these metrics would be determined and why they are important.
Answer: During the implementation and control part of the marketing planning process, metrics are developed that are concrete measures of various aspects of marketing performance. The control process determines to what degree objectives are being met by measuring actual performance, comparing performance to objectives and strategies, and making adjustments to the objectives or strategies on the basis of this analysis. Marketing metrics are important to give managers feedback on what is working and, more importantly, what isn't working.
Topic: Develop an implementation plan
135) Briefly describe the marketing mix decisions related to 4 Ps of Marketing
Answer: Product strategies include decisions about products and product characteristics that will appeal to the target market. Pricings strategies state the specific prices to be charged to channel members and final consumers. Promotion strategies include plans for advertising, sales promotion, public relations, publicity, personal selling, and direct marketing used to reach the target market. Distribution (place) strategies outline how the product will be made available to targeted customers when and where they want it.
Page Reference: 65-66Topic: Develop Marketing Mix Strategies
136) Why are business ethics an important issue in business planning?
Answer: Managers and planners at a firm should have a clear sense of business ethics that inform their business planning decisions, such as what goes into their products, where they source raw materials, and how they advertise. Businesses need to consider how business planning decisions affect their many stakeholders.
Topic: Ethics in Marketing Planning
137) Why is it important for all business planning to be integrated?
Answer: For the strategic, functional, and operational plans to work together for the benefit of the whole company, planning must be integrated through all layers. Functional and operational plans should be guided by the company's strategic plans.
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138) Briefly describe the purpose of a portfolio analysis.
Answer: The portfolio analysis is a tool management uses to assess the potential of a firm's business portfolio. It helps management decide which of its current SBUs should receive more or less of the firm's resources and which of its SBUs are most consistent with the firm's overall mission.
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139) Periodically, the Walt Disney Company recycles its oldest animated films such as Snow White back into the movie theaters to delight another generation of consumers. To what classification of the BCG growth-market share matrix would these old movies belong? Explain.
Answer: These old movies would be classified as cash cows. They have a high market share that the firm can sustain with minimal funding.
140) What type of strategy should a company use to manage its cash cows?
Answer: Because a cash cow generates cash without much investment, a company should use the profits to support other SBUs.
141) Analyzing its portfolio of businesses with the Boston Consulting Group model, Disney views its movie brand as a star. What does this mean?
Answer: A star SBU means that Disney's movies have a dominant market share in a high-growth market. Stars generate large revenues, but also require large amounts of funding to keep up with production and promotion demands. Disney invests heavily in franchise players like Hannah Montana and Narnia to gain the larges share of loyal customers to generate profits that can be reallocated to other parts of the company.
142) How do product development strategies create growth? Give an example of how a company could use a product development strategy.
Answer: Product development strategies create growth by selling new products in existing markets. Product development may mean that the firm improves a product's performance, or it may mean extending the firm's product line by developing new variations of the item. Examples will vary.
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143) Why might a company choose a diversification strategy?
Answer: A company with low-share products in low-growth markets would likely look to a diversification strategy, developing more attractive products and targeting them at higher growth markets.
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144) Campbell's Soup advertised new uses for soup in lunches and dinners to encourage customers to eat more soup. The company also conducted promotions aimed at attracting users of competing soup brands. What growth strategy was Campbell's implementing? Explain.
Answer: Campbell's implemented the market penetration strategy. It tried to increase sales of existing products to existing markets such as current users, nonusers, and users of competing brands.
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145) What are the steps in decision process for entering global markets?
Answer: Step 1. “ Go” or “no go”—is it in our best interest to focus exclusivelyon our home market or should we cast our net elsewhere as well?• Step 2. If the decision is “go,” which global markets are most attractive?Which country or countries offer the greatest opportunity for us?• Step3. What market-entry strategy and thus what level of commitmentis best? As we’ll see, it’s pretty low risk to simply export productsto overseas markets, while the commitment and the risk is substantialif the firm decides to build and run manufacturing facilities in othercountries (though the payoff may be worth it).• Step4. How do we develop marketing mix strategies in the foreignmarkets—should we standardize what we do in other countries, ordevelop a unique, localized marketing strategy for each country?
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146) Briefly describe the 4 major forms of International Market Entry.
Answer: ExportingIf a firm chooses to export, it must decide whether it will attempt to sell its products on its own or rely on intermediaries to represent it in the target country.Contractual agreementsAgreement with a company in foreign country to conduct some or all of its business there. These agreements take several forms. Two of the most common are licensing and franchising.Strategic alliance with one or more domestic firms in the target country. These relationships often take the form of a joint venture , in which two or more firms create a new entity to allow the partners to pool their resources for common goalsDirect InvestmentAn even deeper level of commitment occurs when a firm expands internationally through ownership, usually buying a business in the host country outrightly.
147) What is a joint venture?
Answer: A strategic alliance in which a new entity owned by two or more firms allows the partners to pool their resources for common good.
148) Provide an example of product adaptation strategy
Answer: Kellogg’s, which markets the identical version of its Corn Flakes and Rice Krispies brands in both North America and Europe, had to remove the green “loops” from Froot Loops after research showed that Europeans felt they were too artificial looking.
149) Briefly explain Dumping and provide an example.
Answer: Dumping is pricing products lower in a foreign market than that offered in the home market. In one case, Eastman Kodak accused Japanese rival Fuji Photo Film of selling colour photographic paper in the United States for as little as a quarter of what it charges in Japan.
150) What factors lead to price escalation of International Products?
Answer: Costs associated with transportation, tariffs, and differences in currency exchange rates often make the product more expensive for a company to make or sell in foreign markets compared to its home country. Aside from cost factors, sometimes a higher price is charged in international markets, because consumers there value the uniqueness of the product.