Marketing Management, Kotler 13th ed. Test bank

Chapter 2 Company and Marketing Strategy:

Partnering to Build Customer Relationships

1) Which of the following involves adapting a firm to take advantage of opportunities in its

constantly changing environment?

A) long-range planning

B) short-range planning

C) media planning

D) strategic planning

E) annual planning

Answer: D

Diff: 2 Page Ref: 38

Skill: Concept

Objective: 2-1

2) When a firm develops and maintains a strategic fit between its goals and capabilities, it

is performing ________.

A) mission planning

B) values planning

C) strategic planning

D) business-portfolio planning

E) operations planning

Answer: C

Diff: 1 Page Ref: 38

Skill: Concept

Objective: 2-1

3) Which of the following is the first step in strategic planning?

A) set objectives and goals

B) develop the business portfolio

C) define the company mission

D) plan marketing strategies

E) identify threats and weaknesses

Answer: C

Diff: 1 Page Ref: 39

Skill: Concept

Objective: 2-1

4) Which of the following is NOT a step in the strategic planning process?

A) defining the company mission

B) setting company objectives and goals

C) designing the business portfolio

D) planning marketing and other functional strategies

E) evaluating all members of the value chain

Answer: E

Diff: 2 Page Ref: 39

Skill: Concept

Objective: 2-1

5) Which of the following provides an answer to these questions: What is our business?

Who are our customers? What do our customers value? What should our business be?

A) objectives and goals

B) a mission statement

C) a business portfolio

D) marketing and functional strategies

E) operational strategies

Answer: B

Diff: 2 Page Ref: 39

AACSB: Communication

Skill: Concept

Objective: 2-1

6) ________ should be market oriented and defined in terms of ________.

A) Annual plans; product needs

B) Strategic plans; company needs

C) Long-range plans; company needs

D) Mission statements; customers’ needs

E) Objectives; competitors’ threats

Answer: D

Diff: 2 Page Ref: 39

AACSB: Communication

Skill: Concept

Objective: 2-1

7) All of the following are accurate guidelines for a company’s mission statement EXCEPT

which one?

A) A mission statement should be realistic.

B) A mission statement should be narrow.

C) A mission statement should emphasize the company’s strengths in the marketplace.

D) A mission statement should be specific.

E) A mission statement should motivate employees.

Answer: B

Diff: 3 Page Ref: 39

AACSB: Communication

Skill: Concept

Objective: 2-1

8) A company’s mission statement serves as a statement of ________.

A) fact

B) values

C) purpose

D) financial goals

E) employee commitment

Answer: C

Diff: 2 Page Ref: 39

AACSB: Communication

Skill: Concept

Objective: 2-1

9) Which of the following is NOT a market-oriented business definition?

A) “to make the Internet buying experience fast, easy, and enjoyable”

B) “to sell tools and home repair and improvement items”

C) “to deliver low prices every day”

D) “to be the guardian of our customers’ financial dreams”

E) “to bring aspiration and innovation to every athlete in the world”

Answer: B

Diff: 2 Page Ref: 40

AACSB: Reflective Thinking

Skill: Concept

Objective: 2-1

10) All of the following are examples of product-oriented mission statements, EXCEPT

which one?

A) “We provide online services.”

B) “We run theme parks.”

C) “We sell shoes.”

D) “We sell lifestyle and self-expression; success and status; memories, hopes, and

dreams.”

E) “We rent hotel rooms.”

Answer: D

Diff: 2 Page Ref: 40

AACSB: Reflective Thinking

Skill: Concept

Objective: 2-1

11) Which of the following is the principle objective of a market-oriented mission

statement?

A) to satisfy basic customer needs

B) to satisfy basic supplier needs

C) to satisfy basic stockholder needs

D) to satisfy basic owner needs

E) to satisfy basic partnership needs

Answer: A

Diff: 2 Page Ref: 39

Skill: Concept

Objective: 2-1

12) Revlon has clearly defined its “mission” of selling lifestyle and self-expression. In

order for the firm to launch its strategic plan, the mission needs to next be turned into

detailed ________ that guide each level of the company.

A) sets of strategies

B) sets of tactics

C) product mixes

D) supporting objectives

E) sets of promotional tools

Answer: D

Diff: 3 Page Ref: 40

Skill: Concept

Objective: 2-1

13) The collection of businesses and products that make up a company is called its

________.

A) strategic business unit

B) mission statement

C) strategic plan

D) business portfolio

E) operational factor

Answer: D

Diff: 1 Page Ref: 41

Skill: Concept

Objective: 2-2

14) Which of the following can be a company division, a product line within a division, or

sometimes a single product or brand?

A) a market

B) the BCG

C) an SBU

D) a PLC

E) a value delivery network

Answer: C

Diff: 2 Page Ref: 41

Skill: Concept

Objective: 2-2

15) After management has identified the key businesses making up its company, what is

the next step in portfolio analysis?

A) identifying businesses in which to invest

B) assessing the attractiveness of its SBUs

C) deciding whether to harvest any businesses

D) completing short-range planning

E) identifying SBUs

Answer: B

Diff: 2 Page Ref: 41

Skill: Concept

Objective: 2-2

16) The best known product portfolio planning method was developed by ________.

A) the Boston Consulting Group

B) Philip Kotler

C) Harvard University

D) the SRI Consulting Firm

E) James P. Hess

Answer: A

Diff: 2 Page Ref: 41

Skill: Concept

Objective: 2-2

17) Most portfolio analysis methods evaluate SBUs on two dimensions, namely ________

and ________.

A) market share; strength of the SBU’s position

B) market diversification; relative market share

C) market or industry attractiveness; strength of the SBU’s position

D) market growth rates; profits

E) market penetration; market development

Answer: C

Diff: 2 Page Ref: 41

Skill: Concept

Objective: 2-2

18) In the Boston Consulting Group approach, ________ provides a measure of market

attractiveness.

A) relative market share

B) market development

C) market penetration

D) market growth rate

E) market segmentation

Answer: D

Diff: 2 Page Ref: 41

Skill: Concept

Objective: 2-2

19) In the Boston Consulting Group approach, ________ serves as a measure of company

strength in the market.

A) relative market share

B) market development

C) market diversification

D) market growth rate

E) market segmentation

Answer: A

Diff: 2 Page Ref: 41

Skill: Concept

Objective: 2-2

20) The BCG growth-share matrix classifies four types off SBUs. They are ________ ,

________ , ________ , and ________.

A) product; price; promotion; placement

B) sales; market share; price; promotion

C) stars; cash cows; question marks; dogs

D) planning; implementing; leading; controlling

E) market penetration; market development; product development; diversification

Answer: C

Diff: 1 Page Ref: 42

Skill: Concept

Objective: 2-2

21) In the BCG approach, ________ are high-share, high-growth businesses or products.

They need heavy investment to finance rapid growth. When their growth slows down, they

turn into ________.

A) cash cows; stars

B) question marks; dogs

C) stars; question marks

D) stars; cash cows

E) dogs; cash cows

Answer: D

Diff: 2 Page Ref: 41

Skill: Concept

Objective: 2-2

22) ________ are low-growth, high share businesses or products. They generate a lot of

cash that the firm uses to pay its bills and support other SBUs that need investment.

A) Stars

B) Cash cows

C) Question marks

D) Dogs

E) Cats

Answer: B

Diff: 2 Page Ref: 42

Skill: Concept

Objective: 2-2

23) In the BCG matrix, income from ________ can be used to help finance the company’s

question marks and stars.

A) dogs

B) cash cows

C) SBU revenues

D) overseas operations

E) low-share businesses

Answer: B

Diff: 2 Page Ref: 42

Skill: Concept

Objective: 2-2

24) The four possible strategies that can be pursued for each SBU are building, holding,

________, and ________.

A) harvesting; divesting

B) promoting; selling

C) downsizing; expanding

D) diversifying; penetrating

E) developing; growing

Answer: A

Diff: 3 Page Ref: 42

Skill: Concept

Objective: 2-2

25) Which of the following does NOT accurately reflect a problem with the BCG matrix

approach?

A) It focuses on planning for the future.

B) It can be costly to conduct.

C) It can be time consuming to implement.

D) It is difficult to define SBUs and measure market share and growth.

E) It focuses on classifying current businesses.

Answer: A

Diff: 2 Page Ref: 42

Skill: Concept

Objective: 2-2

26) Unlike strategic-planning efforts of the past, which were conducted primarily by senior

managers, today’s strategic planning is ________.

A) short-term oriented

B) decentralized

C) limitation-free

D) product oriented

E) centralized

Answer: B

Diff: 2 Page Ref: 42-43

Skill: Concept

Objective: 2-2

27) To increase its U.S. market share, Starbucks has stepped up efforts in the areas of

product availability and promotion. These are examples of broad ________.

A) brand experiences

B) strategies for growth

C) diversification

D) product development

E) value chains

Answer: B

Diff: 2 Page Ref: 44-45

Skill: Concept

Objective: 2-2

28) Which department in a company carries the primary responsibility for achieving

profitable growth?

A) accounting

B) product development

C) operations

D) human resources

E) marketing

Answer: E

Diff: 1 Page Ref: 43

Skill: Concept

Objective: 2-2

29) Which of the following is a useful tool for identifying growth opportunities?

A) the BCG matrix

B) the business portfolio

C) the product/market expansion grid

D) the value chain

E) the value delivery network

Answer: C

Diff: 1 Page Ref: 43

Skill: Concept

Objective: 2-2

30) Making more sales to current customers without changing a firm’s products is

________.

A) market attractiveness

B) market penetration

C) market development

D) product development

E) diversification

Answer: B

Diff: 1 Page Ref: 43

Skill: Concept

Objective: 2-2

31) Starbucks has introduced a debit card that lets customers prepay for coffee and snacks.

This effort by Starbucks management is an example of ________.

A) market development

B) product development

C) diversification

D) market penetration

E) product adaptation

Answer: D

Diff: 3 Page Ref: 43-45

AACSB: Reflective Thinking

Skill: Concept

Objective: 2-2

32) While a valuable planning tool, a problem with using the BCG matrix centers is that it

focuses on ________

A) the future instead of the present

B) the present instead of the future

C) financial issues instead of the customer

D) the customer instead of suppliers

E) the past instead of the present

Answer: B

Diff: 3 Page Ref: 42

Skill: Concept

Objective: 2-2

33) A common practice among marketers is to identify and develop new markets for their

existing products. This practice is called ________.

A) market development

B) product development

C) market penetration

D) market skimming

E) dual adaptation

Answer: A

Diff: 1 Page Ref: 45

Skill: Concept

Objective: 2-2

34) Starbucks Coffee has recently begun selling and playing compilation CDs and is

supporting its own XM satellite radio station. This represents which strategy for growth?

A) product development

B) market development

C) market penetration

D) diversification

E) partner development

Answer: D

Diff: 3 Page Ref: 44

AACSB: Reflective Thinking

Skill: Concept

Objective: 2-2

35) Which of the following entails reducing the business portfolio by eliminating products

that no longer fit the company’s overall strategy?

A) market segmentation

B) the BCG approach

C) product line extension

D) downsizing

E) market redesign