Marketing Management, 3e (Marshall)
Chapter 3 Elements of Marketing Strategy, Planning, and Competition
1) From a customer’s perspective, value is the ratio of the bundle of benefits a customer receives
from an offering compared to the costs incurred by the customer in acquiring that bundle of
benefits.
2) Value is some type of utility that a company and its products provide for customers.
3) Starbucks is known to have shops located in close proximity to enable customers to shop
conveniently. It appears that the coffee shop chain is offering place utility.
4) Samsung’s first value proposition when the brand was launched in the United States was price
and functionality.
5) When a firm communicates the value proposition of its products to customers, the value
message only includes the benefits of the product.
6) For firms interested in building long-term customer relationships, having satisfied customers
is enough to ensure the relationship is going to last.
7) Outbound logistics refers to the distribution of products.
8) As long as all activities in the value chain are working well, managers do not need to be
concerned with aligning the activities.
9) The last element in the value chain is margin, which refers to profit made by the firm.
10) At the strategic level, marketing (little m) serves as the driver of business strategy.
11) According to the BCG matrix, a business that is classified as a star has high growth and low
market share.
12) According to the BCG matrix, a business that is classified as a dog has high growth and high
market share.
13) The GE Business Screen portfolio model evaluates businesses on the dimensions of market
attractiveness and business position.
14) In the GE Business Screen model, the business position dimension looks at factors like
government regulations, sensitivity to economic trends, and size of the market.
15) A mission statement does NOT include a discussion of the firm’s strategic vision.
16) Goals are broad statements of generally desired accomplishments in support of the firm’s
mission statement.
17) Strategy has two key phases: formulation and execution.
18) Companies in some business cultures based outside the United States seem to have less
pressure to achieve high levels of growth.
19) A firm’s competitive strategy leads it to decide if it can grow and if not, how to survive
through stability or retrenchment.
20) Internal environmental factors are all under the firm’s control.
21) Market penetration strategies allow the firm to introduce new products to new customers,
often including international markets.
22) Market development strategies allow a firm to invest additional resources to have existing
customers consume new products.
23) When Christy developed her marketing plan for her new store, she kept in mind that
conditions can change, so her plan would also change. This demonstrates the importance of
staying strategic, but also staying on top of the tactical, in the tips for a successful marketing
planning experience.
24) Joelle bought a new Coach purse for herself as a birthday present. She had never spent that
much on a purse, but decided it was worth it because it was so elegant. This demonstrates how a
customer’s perception of ________ can influence buying behavior.
A) exchange
B) utility
C) place
D) competition
E) value
25) Form utility is ________.
A) marketing’s task in creating an offering that has value
B) production’s task in creating an offering that is desired by the market
C) the firm’s task in deciding where to distribute the product
D) created when products are available to customers at a convenient location
E) that which allows for transfer of the product ownership from seller to buyer
26) Although Michael knew he couldn’t really afford the Mercedes, he wanted it anyway. The
want-satisfying power of a good is called ________.
A) exchange
B) value
C) necessity
D) strategy
E) utility
27) Utility created when a firm converts raw materials into finished products that are desired by
the market is called ________ utility.
A) time
B) form
C) place
D) ownership
E) price
28) Which of the following is TRUE of utility?
A) The three utilities—form, price, and ownership—are created by marketing.
B) Utility is defined as a ratio of benefits to costs, as viewed from the eyes of the beholder.
C) Form utility is created when products are available to customers at a convenient location.
D) The four major kinds of utility are form, time, place, and ownership.
E) Place utility is created when the firm converts raw materials into finished products that are
desired by the market.
29) The concept of the value chain was created by ________.
A) Fred Wiserma
B) Michael Porter
C) Jim Collins
D) Peter Drucker
E) David Hunger
30) Which of the following is NOT one of the five primary activities in the value chain?
A) inbound logistics
B) operations
C) technology procurement
D) outbound logistics
E) marketing and sales
31) A window manufacturer has trouble getting glass for its high-end windows. Of the five
primary activities in the value chain, this problem is most likely to occur in ________.
A) inbound logistics
B) operations
C) outbound logistics
D) marketing and sales
E) service
32) Sean attributes the success of his video game arcade to advertising on the most popular
website for gamers. Recently, the website raised ad prices, so Sean has cut his advertising in half.
He believes that positive word-of-mouth will be enough now that his game is well established.
However, sales are slipping. Of the five primary activities in the value chain, this problem is
most likely to occur in ________.
A) inbound logistics
B) operations
C) outbound logistics
D) marketing and sales
E) service
33) Dave is a close-up magician who is famous for his card tricks. He creates and sells DVDs of
his magic tricks. Lately he has been having some trouble getting the DVDs produced in a timely
manner. Of the five primary activities in the value chain, this problem is most likely to occur in
________.
A) inbound logistics
B) operations
C) outbound logistics
D) marketing and sales
E) service
34) Mark and Gregory are partners in a manufacturing firm that employs over 1,500 people.
Recently, employees have been complaining that they were not told of changes in health
insurance coverage and premiums. To which of the following support activities of the value
chain can this problem be attributed?
A) firm infrastructure
B) human resource management
C) technology development
D) inbound logistics
E) procurement
35) Mammoth Foods, a major agricultural corporation, recently purchased MJS Organic Foods
Co. MJS was established six years ago and has become a major supplier to restaurants in the
northeastern United States. The organic herbs, vegetables, and fruit market is expected to have a
double-digit growth rate over the next decade. Under the Boston Consulting Group (BCG)
Growth-Share Matrix, MJS would most likely be classified as a ________.
A) star
B) cash cow
C) dog
D) problem child
E) top gun
36) In the BCG matrix, ________ are characterized by high share and low growth and are the
key sources of internal cash generation for a firm.
A) stars
B) cash cows
C) dogs
D) problem children
E) top guns
37) In the BCG matrix, firms categorized as problem children are characterized by ________.
A) high share and high growth
B) low share and low growth
C) high share and low growth
D) low share and high growth
E) moderate share and moderate growth
38) Lately the demand for building materials has dropped due to the slowdown in new housing
construction. Woods Corp. is thinking of closing its fine wood division that produces mahogany
and cherry lumber for building cabinets and other applications. Under the Boston Consulting
Group Growth-Share Matrix, the fine wood division would most likely be classified as a
________.
A) star
B) cash cow
C) dog
D) problem child
E) top gun
39) Hot and Cold Corp. makes disposable coffee and soft drink cups for use in fast-food
restaurants, hospitals, convenience stores, and the like. The company is working on a sturdy new
product that will biodegrade within five years of being put in a landfill. According to the BCG
matrix, this promising new product line would most likely be classified as a ________.
A) star
B) cash cow
C) dog
D) problem child
E) question mark
40) Green Scene Co., a struggling start-up firm that needs a huge cash injection, has an
environmentally friendly pesticide that is approved for use by commercial organic farmers. The
pesticide is made from all-natural ingredients and has great potential. A small investment firm
has injected cash in Green Scene. In the context of the BCG matrix, Green Scene is most likely
considered a ________.
A) star
B) cash cow
C) dog
D) question mark
E) top gun
41) Mega-Big Corp. has a small strategic business unit (SBU) that produces a component vital to
the manufacturers of automobiles and has been extremely profitable for 18 years. The SBU acts
as a key source of income for the firm. In the context of the BCG matrix, Mega-Big Corp. is
most likely considered a ________.
A) question mark
B) cash cow
C) dog
D) problem child
E) top gun
42) Mega-Big Corp. is interested in buying Soft works, a medical software firm. Soft works is
highly regarded by medical practices for ease of use, but hasn’t sold well. Two software
engineers started the company, but they have made risky financial and poor management
decisions. Mega Corp. believes that with proper management the software firm will become an
industry leader. In the context of the BCG matrix, Soft works is most likely considered a
________.
A) star
B) cash cow
C) dog
D) problem child
E) top gun
43) Which of the following is NOT included in the business position factors of the GE Business
Screen?
A) organization
B) growth
C) patents
D) governmental regulations
E) marketing
44) A ________ articulates an organization’s reason for existence and defines the unique purpose
that sets it apart from competitors and identifies the scope of the company’s operations, products,
and markets.
A) mission statement
B) functional-level plan
C) value chain
D) marketing strategy
E) value proposition
45) Which of the following is considered an objective?
A) to deliver the best customer service
B) to practice responsible financial management
C) to increase revenue by 15 to 20 percent in each of the next five years
D) to hire the best people
E) to minimize waste
46) Which of the following is most likely to be considered a goal rather than an objective?
A) to improve customer satisfaction ratings to 95 percent
B) to increase ROI by 20 percent
C) to be the leader in one’s field
D) to reduce the cost of scrap material to less than one percent of total manufacturing cost
E) to get five new distributors
47) Growth, stability, and retrenchment refer to a firm’s position relating to its ________
strategy.
A) specific
B) generic
C) future
D) diversification
E) differentiation