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.
A growth strategy to develop an untapped new-market potential offers both high risk
and the possibility of high return.
An advantage in brand or company reputation helps to support price and margins, even
in business-to-business markets.
When pursuing a large-segment strategy, a business presents a generic value proposition
built around the core customer need and the business’s generic positioning strategy to
the entire market.
Market-based pricing does not consider what the customer would be willing to pay for
product performance, but depends on the costs of manufacturing the product.
The purpose of needs-based segmentation is to offer product benefits that satisfy the
needs of target customers.
A divest price strategy continues to raise prices slowly with expected decreases in
volume until the business has exited the market.
The purpose of line extensions under an umbrella brand is to leverage the awareness
and image of the umbrella brand.
Shareholder measures of performance are directly influenced by product-market
performance and profitability.
A business that is able to build a higher level of customer retention can be more
profitable than another business, even when both have the same market share.
Forward-looking marketing metrics are particularly important because they correspond
more closely to internal financial-performance metrics.
A business’s operating expenses is its revenues minus its cost of goods sold and its
expenses.
In the long run, a growth-oriented market strategy will shift from an offensive strategic
market plan to a defensive strategic market plan.
Potential strategies used to implement offensive strategic marketing plans are protect
position, optimize position, and monetize strategy.
The number of performance aspects that can be evaluated in a price-performance
trade-off analysis is limited.
Marketing channels make it possible for target customers to buy the product at their
desired points of purchase.
A share development index of 40 means that the business or product has only obtained
40 percent of its share potential.
Businesses with a low-cost advantage in markets in which price is an important
determinant of customer value can use low prices as a basis for product positioning.
The best way to identify groups of similar customers is to segment customers on the
basis of demographics, lifestyles, and usage behaviors.
Customer performance metrics include measures of customer satisfaction, customer
retention, and customer lifetime value.
Return measures of performance are valid indicators of financial health.
Maintaining a high-share position in an attractive, growing market requires only
minimal investment to sustain a competitive advantage.
The main difference between crowdsourcing and mass collaboration is the level of
multidirectional interaction.
A marketing mix strategy is a long-term strategy with a 3- to 5-year time horizon and
specific performance objectives.
The focus on a well-defined target market typically reduces cost efficiency of the
company.
Market-based pricing is not possible without extensive customer and competitor
intelligence.
Benchmark mapping is a technique used to capture customer perceptions of competing
products or services.
Major sources of competitive advantage are cost advantage, differentiation advantage,
and marketing advantage.
When a market is segmented and marketing resources are limited, a business could
elect to pursue a large-segment strategy.
A company that sells its product for a higher price than its competitor can offer a higher
economic value to customers.
The marketing cost of retaining customers is much higher than the cost of replacing
them.
A larger unit volume allows for production and purchasing economies that lower the
per-unit manufacturing cost of a product, thereby creating a scope effect.
If the total factor-weighted attractiveness scores for market forces, competitive
environment, and market access are 10, 24, and 35, respectively, what is the market
attractiveness index?
A) -3
B) 1
C) 23
D) 49
E) 69
Aster Inc. is an American firm that manufactures and markets cell phones for sale in
discount stores and other retail settings. The firm also sells cell phone accessories. Aster
Inc. conducted an analysis of its competitive advantage for one of its product-markets
and conducted research to learn the following information:
Mini-Case Question. After extensive market research, Aster Inc. decides to enter the
household appliances market. The firm launches a line of consumer electronics products,
such as ovens and coffee grinders. Aster Inc. is most likely to be using which of the
following strategies?
A) a vertical integration strategy
B) a harvest strategy
C) a monetize position strategy
D) a diversification strategy
E) a horizontal integration strategy
Ace Motors recently introduced a hybrid automobile named Opus. Since its
introduction, this offering has achieved a 1.2% market share in this market. Ace Motors
has conducted research in an effort to assess its opportunity for market share
development. The table below indicates consumers’ current response at each step along
the share performance path for Ace Motors’ Opus hybrid automobile as well as the
potential performance for each of the share performance metrics:
Mini-Case Question. What is Opus’s market share potential index?
A) 6.2%
B) 14%
C) 20.2%
D) 31.5%
E) 38.9%
FunTime Inc., is an American toy manufacturing firm, with its headquarters in New
York. The firm specializes in manufacturing educational toys for children. The table
given below shows the educational toys market segment performance for FunTime Inc.
Mini-Case Question. What is the net marketing contribution of FunTime Inc?
A) $70 million
B) $120 million
C) $18 million
D) $75 million
E) $190 million
Which of the following forces that shape segment attractiveness include market size,
growth rate, and growth potential?
A) competitive intensity
B) market access
C) market demand
D) profitability
E) feasibility
Which of the following is the strategic objective of the defensive core strategies:
monetize, harvest, and divest?
A) maintain profits
B) grow in existing markets
C) maximize cash flow
D) diversify growth
E) improve competitive position
Which of the following types of customers generally have the lowest customer history?
A) new customers
B) captive customers
C) loyal customers
D) unprofitable customers
E) repeat customers
A ________ strategy continues to raise prices slowly with expected decreases in
volume until the business has exited the market.
A) diversify growth
B) harvest price
C) divest market
D) reduce-market-focus
E) monetize cash flow
MyStyle Clothes Inc. is a women’s fashion apparel firm that allows its customers to
personalize their clothes. MyStyle Clothes Inc. has a web site where customers can
choose from a range of fabrics, colors, buttons, fits, and designs to create clothes.
Customers can place orders with their measurements, and the clothes are manufactured
according to the customer’s specifications and sent to her by courier. In this example,
MyStyle Clothes Inc. uses which of the following strategies?
A) mass-personalization
B) mass-customization
C) customer relationship management
D) sub-segment
E) multi-segment
________ is the percentage of target customers who are exposed to the business’s
message through a certain combination of media.
A) Target market reach
B) Target market frequency
C) Target market effectiveness
D) Target market rate
E) Target market pulse
Which of the following is a product position factor influencing a business’s market
share?
A) sales force
B) service quality
C) retailing and merchandising
D) physical distribution
E) media advertising
Which of the following is an industry force that shapes the attractiveness of a
competitive environment?
A) competitor intelligence
B) knowledge advantage
C) cost advantage
D) market share advantage
E) customer buying power
Which of the following is a potential problem that a customer can face at the order
entry stage of the customer order cycle?
A) The order is in process but the customer is not aware of order status.
B) The product is delivered late or damaged.
C) The wrong product is delivered.
D) The order is priced incorrectly.
E) The product’s user manual is inadequate.
Which of the following terms refers to the development of technology and improved
products for a
given product market?
A) discontinuous innovation
B) radical innovation
C) continuous innovation
D) market penetration
E) market development
The cost of goods sold and the SGA expenses of an organization are $60 million and
$25 million, respectively. Its other operating expenses amount to $15 million.
Determine the total operating income of the organization if it generates sales revenues
of $150 million.
A) $100 million
B) $90 million
C) $75 million
D) $60 million
E) $50 million
Which of the following is most likely to be a barrier to exit?
A) high advertising expenses
B) specialized assets
C) many product substitutes
D) high customer power
E) R&D expenses
Which of the following statements is true of a “new emerging market”?
A) It refers to a market with very high levels of competition.
B) It refers to a market where the number of current customers is small.
C) It refers to a market that has very low market potential.
D) It refers to a market that is completely saturated, and does not provide much growth
potential.
E) It is characterized by low levels of risk.
The actual margin per unit and margin per unit estimated in the plan are $6 and $8,
respectively. The actual volume and the volume estimated in the plan are 5,000 units
and 10,000 units, respectively. What is the margin variance of the business?
A) -$10,000
B) $10,000
C) -$20,000
D) $20,000
E) $5,000
In the context of market segmentation, interests, opinions, and leisure pursuits of
consumers are related to ________ segmentation.
A) demographic
B) psychographic
C) usage behavior
D) firmographic
E) geographic
Calculate the PE ratio of a company whose stock price is $86 and earnings per share is
$2.4.
A) 8.3
B) 20.7
C) 35.8
D) 28.3
E) 13.5
Calculate the total number of transactions made per year if the total transaction cost is
$2 billion at $50 per transaction.
A) 25 million transactions per year
B) 10 million transactions per year
C) 100 million transactions per year
D) 40 million transactions per year
E) 250 million transactions per year
Sparks Inc., a firm that manufacturers low voltage halogen lamps, currently has a 40%
share of a 1 million unit market. The firm has extensive customer knowledge, as well as
extensive competitor knowledge. The three largest competitors of Sparks Inc. have
market shares of 5%, 10%, and 15%, respectively.
Mini-Case Question. Sparks Inc. uses its superior knowledge of both customers and
competitors to devise a market-based strategy to achieve desired gains without
sustaining excessive losses. The firm seeks to gain a competitive advantage through a
nonconfrontational approach. Which of the following competitive strategies is Sparks
Inc. most likely to be using?
A) a disintermediation strategy
B) an inside the box strategy
C) an oblique strategy
D) a frontal attack strategy
E) a benchmarking strategy
________ customers are quality conscious, fairly well informed, and somewhat price
sensitive.
A) Early majority
B) Early adopters
C) Innovators
D) Laggards
E) Late majority
Which of the following is a defensive strategic market plan?
A) a new market entry strategy
B) an improve position strategy
C) a harvest strategy
D) a vertical integration strategy
E) a horizontal integration strategy
Which of the following is considered a market force factor that influences a market’s
attractiveness?
A) buyer power
B) number of competitors
C) price rivalry
D) channel access
E) sales requirements
What change in customer retention results from an increase from 5 to 10 years of an
average customer life?
A) a decrease of 5%
B) an increase of 5 %
C) an increase of 10%
D) a decrease of 10%
E) the value remains the same
S.K. Group of Manufacturers produces and distributes mattresses and pillows under the
brand name SoftComfort. In this example, S.K. Group of Manufacturers uses which of
the following types of brand names?
A) a founder name
B) an experiential name
C) a functional name
D) an acronym
E) a morpheme
Share development index is the ratio of ________.
A) market share index and share potential index
B) current performance and potential performance
C) market demand and market share
D) volume sold and market share
E) current market demand and market potential
A price elasticity of -2 means that a price reduction of one percent will result in
________.
A) a decrease in volume by 2%
B) a decrease in volume by 20%
C) an increase in volume by 2%
D) an increase in market share by 20%
E) a decrease in market share by 2%
Clarence Inc. conducts a market research, which reveals that its market size is of 40%
relative importance and the attractiveness rating of this factor is 80 (i.e., attractive). It
identifies that its market growth is of 30% relative importance and scores a rating of 60
(i.e., somewhat attractive); and its buyer power is of 30% relative importance and
scores a rating of 40 (i.e., somewhat unattractive). The firm has a market forces factor
importance of 30%. Calculate the overall market attractiveness score for the assessed
opportunity.
A) 18.6
B) 54
C) 60
D) 62
E) 207
What is the total sales revenue generated by an organization that has a net marketing
contribution of $25 million at a gross profit margin of 5%, and its marketing and sales
expenses amount to $10 million?
A) $500 million
B) $600 million
C) $700 million
D) $800 million
E) $900 million
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
E) $64,000
The strategic marketing planning process requires a careful assessment of market
attractiveness and competitive position. Briefly describe what is involved in this
assessment and identify three main factors for each.
Name and discuss the six sources of economic benefit and value creation.
List and briefly describe in order the steps in the process of building a marketing plan.
Name and describe the four fundamental offensive strategic market plans that can be
used to increase a business’s penetration of an existing market.
Name and describe the two marketing profitability metrics that allow a business insight
into the relative marketing efficiencies of various net marketing contributions.
What is pulsing? What are the advantages of pulsing?
Describe the process that results in “underwhelmed” customers and shareholders.
Compare and contrast the three types of customer relationship marketing strategies.
Name and describe the methods for determining a marketing budget.
Name and describe the methods for determining a marketing budget.
Name and describe four of the six industry forces that shape the attractiveness of a
competitive environment.
How do follower businesses with above-average profitability and below-average profit
performance differ in terms of competitive advantage and investment and asset
management?
What is pulsing? What are the advantages of pulsing?
Name and describe the two marketing profitability metrics that allow a business insight
into the relative marketing efficiencies of various net marketing contributions.
Discuss the three major forces that contribute to success or failure in implementing a
marketing plan.
Compare and contrast skim pricing strategy and penetration pricing strategy.
Compare and contrast skim pricing strategy and penetration pricing strategy.
Explain the advantage of using marketing performance metrics, and name and describe
the four classes of marketing performance metrics. Give two examples of metrics used
in each type of marketing performance metric.
Describe the process that results in “underwhelmed” customers and shareholders.
Name and describe the seven key steps in a needs-based market segmentation process.