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CHAPTER 1 Customer Focus, Customer Performance, and Profit Impact The single most important thing to remember about any enterprise is that there are no results inside its walls. The result of a business is a satisfied customer. — PeterF. Drucker […]

CSICustomerPercentGrossRetenonCustomer ScoreSalesMarginProtCostProt 81$79050.5%$428$100$328 Teaching Note:This level of improvement in customer satisfaction would increase the average sales per customer by $145 and increase the average customer profit from $250 to $328. With 10,000 customers, for example, the improved customer satisfaction index […]

CHAPTER10 Marketing Communications, Social Media, and Customer Response Yahoo! helps Intel stay connected to hundreds of millions of mobile customers around the globe. With Yahoo!’s massive reach, Intel is able to pinpoint their target audience within relevant content areas and […]

Marketing Performance Tools and Application Exercises 10.1 Marketing Communications and Customer Response: This marketing performance tool uses Figure 10-15 in answering questions A, B and C. A. Using the data provided, how do the results of this marketing communication change […]

CHAPTER 11 Portfolio Analysis and Strategic Market Planning “Cheshire Puss, would you tell me, please, which way I ought to go from here?” “That depends a good deal on where you want to get to,” said the Cat. “I don’t […]

Marketing Performance Tools and Application Exercises 11.1Product Life Cycle Portfolio: This marketing performance tool is used with Figure 11-2 to address the question that follows. Using the data provided, adjust the proposed product life-cycle portfolio to the recommended percentage of […]

CHAPTER 12 Offensive Strategies In marketing I’ve seen only one strategy that can’t miss —and that is to market to your best customers first, your best prospects second, and the rest of the world last. — John Romero, Casion Marketing […]

ABCD Marketing Performance Tools and Application Exercises 12.1Offensive Strategies—Core Strategy I: Grow in Existing Markets Using the data provided, evaluate the four offensive strategies for growing sales in existing markets. A. Grow Market Share:Increase the market share from 10 to […]

CHAPTER 13 Defensive Strategies General Motors Corporation apparently has no plans to relinquish its position as the world’s largest automaker in the face of the strong challenge from Toyota Motor Corporation. “I’m not conceding anything to anybody,” said GM Chairman […]

Marketing Performance Tools and Application Exercises 13.1Defensive Strategies: Core Strategy I: Protect Position Using the data provided, evaluate the two strategies for protecting profits.. A. Protect Market Share: Set the market growth rate at 25 percent and hold market share […]

CHAPTER 14 Building a Marketing Plan The following questions lie at the heart of any marketing and strategic planning process: Where are we now? How did we get there? Where are we heading? Where would we like to be? How […]

Marketing Performance Tools and Application Exercises 14.1Market Demand and Market Share: This marketing performance tool is used to answer questions A (below) and B below (next page). A. What would be the change in the net marketing contribution if the […]

CHAPTER 15 Marketing Metrics, Performance, and Strategy Implementation A Fortune Magazinestudy suggests that 70 percent of the CEOs who fail do so not because of bad strategy, but because of bad execution. — Source: R. Charan and G. Colvin “Why […]

Marketing Performance Tools and Application Exercises 15.1Variance Analysis: Market Demand and Market Share Change the actual market demand to 1,250,000 and actual market share to 23 percent, separately, to first evaluate the impact of each change on sales and profits. […]

CHAPTER 16 Market-Based Management and Financial Performance Customer satisfaction is a leading indicator of company financial performance. Stocks of companies with high ACSI scores tend to do better than those of companies with low scores. — American Customer Satisfaction Index […]

Marketing Performance Tools and Application Exercises 16.1Market Demand and Market Share Change market demand from $4,000 to $3,800, change market share from 25 percent to 22.6 percent, and evaluate how sales, profits, and financial performance change. Market-Based Management Copyright © […]

CHAPTER2 Marketing Metrics and Marketing Profitability IntroductoryExercise FedEx measures customer satisfaction monthly but measures its service quality daily with a process metric that tracks the top ten mistakes, weighted by their negative impact on the customer, that result in customer […]

Marketing Performance Tools and Application Exercises 2.1 Company-Level Net Marketing Contribution: Figure 2-15 is used with this marketing performance tool to address analysis items A (next page) and B (page 19). The starting data are shown here to make comparisons […]

CHAPTER3 Market Potential, Market Demand, and Market Share You have to see more to sell more. — Jack Welch CEO, General Electric Co.,1981–2001 Jack Welch’s comment could be used to open a discussion on the importance of a business having […]

Marketing Performance Tools and Application Exercises 3.1 Market Potential and Market Development Index:Figure 3-3 is used with this marketing performance tool in responding to items A (below) and B (next page). A. How would the market potential and market development […]

CHAPTER4 The Customer Experience and Value Creation Apple has many prosumers―professional consumers who are eager to help Apple design innovative products. For more information, just do an Internet search for “Apple mockup products.” Shown here is a concept drawing of […]

Marketing Performance Tools and Application Exercises 4.1 Economic Value Analysis: Figures 4-12 and 4-13 are used with this marketing performance tool to answer the questions A (below) and B (next page). A. If Sealed Air sold its AirCap product for […]

CHAPTER5 Market Segmentation and Segmentation Strategies Market segmentation is a natural result of the vast differences among people. — Donald Norman Cognitive Scientist and Author Donald Norman’s comment could be used to open a discussion on how differences in customer […]

Marketing Performance Tools and Application Exercises 5.1 Needs-Based Segmentation: This marketing performance tool is used with Figure 5-3in addressing items A (below) and B (next page). A. Using the laptop product-price configuration provided, create a needs-based segment for laptop users […]

CHAPTER6 CompetitivePosition and Sources of Advantage An effective competitive advantage should be substantial, sustainable, and leveraged. — David Aaker in Developing Business Strategies The quote from David Aaker’s book could be used to open a discussion on what a sustainable […]

Marketing Performance Tools and Application Exercises 6.1 Cost Advantage:This marketing performance tool is used with Figure 6-6and Appendix 6.2 in addressing items A to C below. A. Estimate the experience curve coefficient for a cost curve with an initial unit […]

CHAPTER7 Product Positioning, Branding, and Product Line Strategies The best positioning is put in the context of solving a problem for a specific buyer. That means that there are multiple positioning documents, each conveying product value in terms that resonate […]

Marketing Performance Tools and Application Exercises 7.1 Product Positioning: This marketing performance tool is used with Figure 7-3 in addressing items A and B below. A. Use the Strategy 1 column to create a product positioning strategy for a new […]

CHAPTER8 Value-Based Pricing and Pricing Strategies Dell Computer has it. So do Amazon.com and eBay. Oracle has it, and even some traditional manufacturing companies like Toyota and Volkswagen have it. What these companies have in common, according to a new […]

Marketing Performance Tools and Application Exercises 8.1 Value-in-Use Pricing: This marketing performance tool is used with Figure 8-6 in addressing items A and Bbelow. A. The ownership costs for a business’s products that extend the life of machine fluids appear […]

CHAPTER9 Marketing Channels and Channel Mapping Shopping Channel Management: The recession and its economic challenges change the way people buy. Customers look for the lowest possible price, daily deals, coupons, and any other potential savings. People also have less time […]

Marketing Performance Tools and Application Exercises 9.1 Channel Mapping and Pocket Price— This marketing performance tool is used with Figures9-3 and 9-4 in answering questions A (below) and B (next page). A. How does the overall average pocket price change […]

A plus-one market-based pricing strategy means a business sets its price 1% higher than the competitors’ price. A “concentrated frequency” strategy would be appropriate for building awareness and comprehension for seasonal products, political candidates, and special events. TRUE Page Ref: […]

Which of the following statements is true? A) Offensive strategic market plans require investment for growth, which limits long-run profit performance, but does not limit sales revenue. B) Defensive strategic market plans promote short-run profit performance but are not that […]

When differences in customer needs are small or demographics are not distinctive, a business may elect to use a ________ strategy. A) small-segment B) vertical integration C) horizontal integration D) mass-market E) niche-segment Crowdsourcing differs from mass collaboration in that […]

Factors that shape a market’s attractiveness are market forces, competitive environment, and market access. Diversification decreases the likelihood that a firm’s overall performance will be consistent. FALSE Page Ref: 395 Heavy-up message frequency involves the use of alternating exposure periods […]

In the context of brand name development, which of the following is true about an invented name? A) It is built from root words and morphemes. B) It aims to evoke a positive attribute or a feeling. C) It is […]

When sales figures for one of the products of Silkskin Cosmetics, a moisturizer, began to fall with low margins and declining volumes, the company decided to raise the price of the moisturizer. As volumes fell further, the company continued to […]

Forward-looking marketing metrics are particularly important because they correspond more closely to internal financial-performance metrics. The more similar one market is to another, the less likely the possibility that consumers will substitute products. FALSE Page Ref: 82 In a price-sensitive […]

The end result of underwhelming customers and shareholders is ________. A) an unfocused value proposition B) a higher pressure for short-run results C) an above-average profit performance D) a low rate of customer turnover E) a high level of customer […]

________ communication strategies are directed at channel intermediaries. A) Push B) Pull C) Heavy-up D) Centralized E) Pulsing The economic profit generated by a company is its ________. A) (capital x cost of capital) / net profit B) net profit […]

Both consumers and businesses have market needs, and the factors influencing their needs are essentially the same. A product-based business can use its order cycle to create important sources of customer value that the business’s consumer-focused competitors will never see. […]

A(n) ________ strategy involves the sale of two or more products at an overall price that is lower than the total price that a customer would pay to purchase the products separately. A) pure product bundling B) impure product bundling […]

Clarence Inc. conducts a market research, which reveals that it has a product quality of 40% relative importance and the attractiveness rating of this factor is 60 (i.e., attractive). The firm identifies that its service quality is of 30% relative […]

Which of the following is considered an external performance benchmark for a product’s performance in the market? A) sales revenues B) net profits C) return on sales D) relative product quality E) assets as a percentage of sales The net […]

Calculate the customer loyalty index if the customer history is average, the purchase amount is below average, the desire to repurchase is high, the product preference is strong, and there is no customer recommendation. A) 0 B) 10 C) 50 […]

Offensive strategic market plans are strategies that ________. A) have a 1-year time horizon B) are ineffective at growing sales revenue C) reduce the long-run share position D) limit short-run profit performance E) result in short-term profits without any additional […]

Helen has determined that along the share-development path, her business should perform at a 80% level of product awareness, 50% in product preference, 80% in intentions to purchase, 90% in product availability, and 70% in rate of purchase. Helen’s actual […]

Calculate the sales effect in period 15 if the advertising expense for that period is $30 million. A) $45 million B) $450 million C) $2 million D) $30 million E) $540 million Organic Harvest Inc. is an American manufacturing firm […]

The primary goal of a defensive strategy is to protect profitability and key strategic share positions that are worth the investment. Sales revenues, net profits, return on sales, assets as a percentage of sales, and return on assets are measures […]

A market-based business lays more emphasis on assets and technology than understanding their customers. A reduce-focus pricing strategy calls for price increases with the intent of reducing volumes and market share in exchange for higher margins. TRUE Page Ref: 289 […]

Calculate the sales effect in period 15 if the advertising expense for that period is $30 million. A) $45 million B) $450 million C) $2 million D) $30 million E) $540 million Uncovering key performance issues that normally might go […]

The strategic market plan called “optimize position” is an offensive strategy often used in the early stages of the product life cycle. Compared to a direct marketing channel, an indirect marketing channel has lower margins and also, lower costs of […]

Marketing performance metrics include competitiveness metrics and customer metrics, while financial metrics include service quality, customer value, and product performance. When a price is inelastic, a price increase improves all aspects of performance. TRUE Page Ref: 296 A growth strategy […]

The ________ index is calculated using the formula based on hierarchical set of customer response effects: Exposed to Ad X Aware of Ad X Comprehend the Ad X Intend to Buy X Buy the Product. A) customer response B) marketing […]

Using an ownership team keeps the implementation process on track even when some members of the team are away for extended periods because of business trips, training programs, illness, or vacations. A repeat customer buys a lot from many companies […]

Calculate the net marketing contribution variance, if the actual net marketing contribution and net marketing contribution estimated in the plan are $450,000 and $900,000, respectively. The actual percentage of market share is 25%. A) $450,000 B) $11,250 C) -$450,000 D) […]

Dow Corning has been a market leader in silicon technology applications for over 50 years. Its products span many market applications in electronics, construction, health care, and a multitude of industrial applications. However, as some of its product-market applications reached […]

Within the dimensions of service quality, which of the following is a “quality enhancer”? A) service reliability B) performance C) customer empathy D) appearance E) reputation A large-segment strategy differs from a mass-market strategy in that a large-segment strategy ________. […]

Which of the following is a product adoption force affecting new product penetration? A) felt need B) personal risk C) ease of use D) trialability E) observability Which of the following is a favorable condition for implementing penetration pricing? A) […]

Companies cannot enjoy high levels of customer retention without having high levels of customer satisfaction. When the total contribution produced by a pricing strategy is lower, overall profits will also be lower because fixed costs are deducted from the total […]

The cost of using direct marketing channels is typically higher than that of indirect marketing channels for manufacturers. Indirect channels are able to achieve the lowest out-of-pocket marketing and sales expenses. TRUE Page Ref: 332 Potential strategies used to implement […]

Vermont Home Builders conducted a study of the customers in the housing sector, which revealed that there are seven kinds of buyers, each a little different and each differently profitable. Vermont Home Builders decided to focus their attention on the […]

Service quality affects customer retention and profit in the numerator and ________ in the denominator of the return on assets equation. A) total income generated B) return on sales C) customer satisfaction D) accounts receivable E) accounts payable Calculate the […]

Which of the following is an example of a company’s external metrics? A) return on sales B) employee turnovers C) manufacturing defects D) late deliveries E) retaining customers ________ serves as the basis for the financial metric known as return […]

AVB Inc. is a business that produces automobile parts. The plan and the actual performance of the business are shown in the table. Mini-Case Question. Calculate the margin variance of the business. A) -$72,000 B) $72,000 C) $80,000 D) -$80,000 […]

Product-markets with low indexes for both market attractiveness and competitive position have the strongest portfolio position and the best opportunities for profit performance. If a business fails to deliver acceptable or expected levels of serviceability and appearance, an advantage in […]

Which of the following factors determines that a marketing channel is an indirect channel rather than a direct channel? A) The products are complex and require extensive after-sales service. B) The products are intended for business-to-business markets rather than consumer […]

The product of market demand, market share, average selling price, and channel discounts is the ________. A) marketing and sales expenses B) net marketing contribution C) net sales D) operating income E) marketing return on investment Which of the following […]

The primary purpose of a detailed situation analysis is to uncover key performance issues that normally might go unnoticed in day-to-day business operations. Mixed channel systems are unsuitable for marketing specialized and technological products. TRUE Page Ref: 320 Service can […]

Common to most assessments of segment attractiveness are measurements of market demand, competitive intensity, and market access. A decline in relative product and service quality means that actual product or service quality has declined. FALSE Page Ref: 41 The objectives […]

Net marketing contribution equals ________. A) (volume/margin per unit) – marketing and sales expenses B) volume x margin per unit x marketing and sales expenses C) (volume x margin per unit) – marketing and sales expenses D) (volume x marketing […]

Advertising elasticity is calculated as the ________. A) absolute change in sales divided by the percent change in advertising expenses B) percent change in sales divided by the percent change in advertising expenses C) absolute change in advertising expenditures divided […]

Life-cycle costs of ownership include acquisition cost, ownership cost, usage cost, repair/maintenance cost and disposal cost/value. The customer retention metric acts as a forward-looking metric when it measures the number of customers retained from one year to the next. FALSE […]

Customers with ________ customer satisfaction ratings are profitable but are below the average customer profitability. A) Very satisfied B) Dissatisfied C) Somewhat dissatisfied D) Satisfied E) Somewhat satisfied A company’s return on capital is ________. A) invested capital divided by […]