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Name:
Class:
Date:
chapter 2
Indicate whether the statement is true or false.
1. According to the BCG matrix, stars require considerable inflows of cash to finance further growth.
a.
True
b.
False
2. Planning often is classified on the basis of its scope or breadth.
a.
True
b.
False
3. Marketing strategy is an overall company-wide program for selecting a particular target market and satisfying
consumers through a careful blend of the elements of the marketing mix.
a.
True
b.
False
4. Each strategic business unit (SBU) in a firm has to prepare its plans in collaboration with other units in the
organization.
a.
True
b.
False
5. Good relationships with customers can equip a firm with vital strategic weapons.
a.
True
b.
False
6. Promotion is the communications link between sellers and buyers.
a.
True
b.
False
7. The chief executive officer (CEO) and vice president of marketing spend a greater proportion of their time on
operational planning than do managers at all other organizational levels.
a.
True
b.
False
8. Porter’s Five Forces are potential new entrants, bargaining power of buyers, bargaining power of suppliers,
threat of substitute products, and rivalry among competitors.
a.
True
b.
False
9. Organizations within the same industry usually have the same mission.
a.
True
b.
False
10. Marketing planning establishes the basis for a firm's overall strategic plan.
a.
True
b.
False
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11. Tactical planning usually involves the production of quarterly and semiannual plans, along with divisional
budgets, policies, and procedures.
a.
True
b.
False
12. An organization lays out its basic objectives, or goals, in its complete mission statement.
a.
True
b.
False
13. The five dimensions of the marketing environment are competitive, political-legal, economic, technological,
and social-cultural.
a.
True
b.
False
14. The Internet has impacted business for new firms by increasing the barriers to market entry.
a.
True
b.
False
15. A firm describes its overall goals and operational scope in its standard operating procedures manual.
a.
True
b.
False
16. Strategies once implemented should not be changed even if the actual performance does not meet the desired
results.
a.
True
b.
False
17. Employees at middle-management levels engage themselves in business unit budgets and divisional policies
and procedures.
a.
True
b.
False
18. A mission can be defined as an essential purpose that differentiates one company from others.
a.
True
b.
False
19. Each element of the marketing mix—product, price, distribution, and promotion—is a subset of the overall
marketing strategy.
a.
True
b.
False
20. The rule of three states that the third major company in an industry has little chance of survival.
a.
True
b.
False
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21. A target market is a group of customers toward whom a firm directs its marketing efforts.
a.
True
b.
False
22. Matching an external opportunity with an internal weakness produces a situation known as leverage.
a.
True
b.
False
23. Middle and supervisory-level managers spend less time as compared to CEOs on planning activities.
a.
True
b.
False
24. According to the BCG matrix, cash cow businesses produce strong cash flows and invest heavily in the
unit’s own promotions and production capacity.
a.
True
b.
False
25. The ability to download Microsoft and IBM software products directly from the Internet is a part of each
firm’s pricing strategy.
a.
True
b.
False
26. SWOT analysis refers to an examination of a firm that is limited to the variables of its stability, work ethic,
organizational structure, and technological expertise.
a.
True
b.
False
27. The disadvantage of core competencies is that they can be easily duplicated by competitors.
a.
True
b.
False
28. The five dimensions of the marketing environment exert a fairly constant and static influence on marketing
strategies.
a.
True
b.
False
29. Strategic planning has a minimal impact on a firm's destiny because it provides only short-term direction to
the decision makers.
a.
True
b.
False
30. A product strategy includes decisions about customer service, package design, brand names, trademarks,
patents, and warranties.
a.
True
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b.
False
31. A statement such as “to hit the 300 employee mark by the end of the year” is typically a part of a mission
statement.
a.
True
b.
False
32. Adjustments in the mission statement of an organization reflect changing business environments and
management philosophies.
a.
True
b.
False
33. According to the BCG matrix, dog products can be sold to other firms, where they are a better fit.
a.
True
b.
False
34. The planning process begins at the corporate level with the first step being the development of strategic
objectives.
a.
True
b.
False
35. Apple iTunes is an example of a successful first mover.
a.
True
b.
False
36. It can be said that the buying power enjoyed by customers has increased with Internet presence as the
Internet provides detailed information that is not easily available elsewhere.
a.
True
b.
False
37. The statement of Starbucks to “inspire and nurture the human spirit – one person, one cup and one
neighborhood at a time” is an example of a mission statement.
a.
True
b.
False
38. Organizational resources include the capabilities of the firm’s production, marketing, finance, technology,
and employees.
a.
True
b.
False
39. As the senior vice-president of marketing, Naomi will be closely involved in her firm’s strategic planning.
a.
True
b.
False
40. Marketers put the marketing strategy into action in order to monitor performance to ensure that objectives
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are being achieved.
a.
True
b.
False
41. Strategic business units are key business units within small companies that offer only a few items to its
customers.
a.
True
b.
False
42. The advertising director, marketing research manager, and other middle-level managers have the primary
responsibility of devising and implementing the strategic plan of the company.
a.
True
b.
False
43. Each SBU pursues its own distinct mission and often develops its own plans independently.
a.
True
b.
False
44. The idea of first movers being completely replaced by second movers and the resulting disappearance of
first movers from the marketplace is a myth.
a.
True
b.
False
45. The planning process is an intermittent process held after substantial intervals.
a.
True
b.
False
46. Tactical plans typically determine an organization’s primary strategic objectives and exclude short-term
actions from their purview.
a.
True
b.
False
47. Fred’s Wholesale Club sends emails and catalogs to all members. Additionally, in-store pamphlets promote
the benefits of its products. All of these materials are part of the integrated marketing communications intended
to send a consistent and unified promotional message.
a.
True
b.
False
48. To be most effective, the planning process should include input from a wide range of sources both internal
and external to the organization.
a.
True
b.
False
49. Supervisory managers tend to focus exclusively on strategic planning.
a.
True
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b.
False
50. With increased availability of information, rivalry heats up among competitors who try to differentiate
themselves from the crowd.
a.
True
b.
False
51. Relationship-building goals and strategies are seldom included in the plans of business firms.
a.
True
b.
False
52. In a SWOT analysis, marketers face a problem when environmental threats attack their organization's
weaknesses.
a.
True
b.
False
53. The position of an SBU along the horizontal axis indicates the annual growth rate of the market.
a.
True
b.
False
54. The pricing strategy is the area of marketing that receives the least amount of public scrutiny.
a.
True
b.
False
55. All planning strategies have the goal of creating a sustainable competitive advantage for a firm which other
companies cannot imitate.
a.
True
b.
False
56. The planning process creates a blueprint that everyone in the organization must follow in order to achieve
the organizational objectives.
a.
True
b.
False
57. Targeting consumers in specific global markets represents a challenge.
a.
True
b.
False
58. An organizational objective should specify time frames stating “Our organization aims to generate a 15
percent profit over the next 24 months.”
a.
True
b.
False
59. Detailed organizational objectives should state specific intentions, such as “Snapple Corporation seeks to
increase its share of the non-carbonated soft drink market to 25 percent within the next two years.”
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a.
True
b.
False
60. A customer-driven organization begins its marketing strategy with a detailed description of its target market.
a.
True
b.
False
61. The number of suppliers available to a manufacturer or retailer affects the bargaining power of buyers.
a.
True
b.
False
62. Operational planning that involves the creation and implementation of tactical plans for the departments
within an organization is primarily the responsibility of top-level management.
a.
True
b.
False
63. A SWOT analysis helps planners compare internal organizational strengths and weaknesses with external
opportunities and threats.
a.
True
b.
False
64. Toyota’s introduction of the hybrid-powered Prius is an example of how it has turned public concerns and
legal issues about the natural environment into an opportunity.
a.
True
b.
False
65. According to the BCG matrix, if a question mark cannot become a star, the firm should pull out of the
market and target other markets with greater potential.
a.
True
b.
False
66. A strategic window is defined as a collection of situations where organizations are unable to capitalize on
opportunities because of internal limitations.
a.
True
b.
False
67. A marketing mix should be an ever-changing combination of variables to achieve success.
a.
True
b.
False
68. Data suggests that business owners who adopt the first mover strategy will always be long-term market
winners.
a.
True
b.
False
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69. The planning process identifies objectives and determines the actions that are needed to attain those
objectives.
a.
True
b.
False
70. Strategic business units (SBUs) of a diversified firm have common managers, resources, objectives, and
competitors.
a.
True
b.
False
Indicate the answer choice that best completes the statement or answers the question.
71. Relationship marketing can help a company:
a.
create long-term and cost-effective links with individual customers and suppliers for mutual benefit.
b.
reduce its strategic planning effort since the need for such planning is greatly diminished by
relationship marketing.
c.
locate more effective media for use in advertising and mass marketing.
d.
eliminate the strategic planning process and move into tactical plans directly.
72. In a(n) _____, firms evaluate their products and divisions to determine the strongest and weakest.
a.
organizational appraisal
b.
market analysis
c.
utilization analysis
d.
portfolio analysis
73. The limited occasions when the key requirements of a market and the particular competencies of a firm best
fit together are referred to as:
a.
barriers to entry.
b.
strategic windows.
c.
question marks.
d.
threats.
74. If an automobile manufacturer was planning to introduce a sports car powered by a hydrogen-oxygen fuel
cell when the price of gasoline in the United States reached $4 per gallon, this would best be described as a
direct result of its _____ plan.
a.
short-term
b.
operational
c.
strategic
d.
tactical
75. A two-day offsite retreat was held for a team of executives of a major hospital including the hospital's CEO,
President, and Vice-Presidents. Over the course of the two-days, the executives engaged in brainstorming
sessions and worked together to articulate the direction the hospital should take and specific objectives that
should be achieved over the next 5 years. The team focused considerable attention to objectives related to the
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Affordable Care Act and rising numbers of patients eligible for Medicare. The executives were engaged in
_______.
a.
strategic planning
b.
tactical planning
c.
operational planning
d.
defensive planning
76. What has five dimensions, is dynamic and ever changing, and drives the marketer’s decisions about target
markets and the marketing mix?
a.
The strategic plan
b.
The rule of three
c.
The marketing concept
d.
The marketing environment
e.
The customer orientation
77. Which of the following conditions would lead a company’s marketers to find a new market, change prices,
or compete in other ways to maintain an advantage?
a.
When the bargaining power of suppliers is low
b.
When the bargaining power of buyers is low
c.
When the threat of substitute products is high
d.
When the threat of new entrants it low
78. An event management company decided to use radio advertising in order to promote an upcoming music
festival. The executives of the company suggested various activities that could be used for the radio campaign.
These activities are a part of the company’s _____.
a.
tactical planning efforts
b.
standard operating procedures
c.
weekly scheduling plans
d.
unit-wise budgeting plans
79. The U.S. Sports and Fitness Federation is determining where they should build their permanent training
facility. They want it to be located near a populated center but it must also provide ample access to those who
don’t reside in cities. The federation is engaged in _____ planning.
a.
strategic
b.
short-term
c.
operational
d.
economic
80. Which of the following defines an organization’s mission?
a.
Process of anticipating future events and conditions
b.
Companywide program for scaling down the product-lines that are low on profitability
c.
Essential purpose that differentiates one company from others
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d.
Collection of limited periods during which key requirements of a market and a firm’s particular
competencies best fit together
81. Compared to other organization personnel, more time is devoted to long-range strategic planning by the:
a.
middle management.
b.
manufacturing labor.
c.
top management.
d.
supervisory management.
82. Which of the following is true of a strategic business unit?
a.
A strategic unit directly adopts the mission of its parent organization.
b.
Each strategic unit depends on plans of the other units in the organization.
c.
A strategic unit has its own managers, resources, objectives, and competitors.
d.
A strategic unit is a key business unit within a small company that does not differ significantly from
the parent company.
83. Long-term plans focusing on those organizational objectives that will significantly affect a firm for five or
more years are usually referred to as _____ plans.
a.
strategic
b.
marketing
c.
economic
d.
tactical
84. Which of the following would qualify as an example of a firm’s weakness?
a.
Changing buyer tastes in the marketplace
b.
The presence of modern production facilities
c.
Inadequate financing capabilities
d.
An addition to the current product line
85. At a time when computer users were having trouble storing, sending, and displaying photos, Apple
introduced the iMac computer, which was equipped with a digital camera interface and photo-handling
software. This product was a result of Apple recognizing its:
a.
economies of scale.
b.
competitive constraints.
c.
strategic window.
d.
second-mover benefits.
86. An example of a firm's strength discovered by a SWOT analysis might be:
a.
ownership of valuable patents.
b.
a narrow current product line.
c.
changing buyer tastes in the marketplace.
d.
existing government policies favoring the industry.
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87. Elger Labs introduced the MPMAN F10 in 1998 which is regarded as the world's first MP3 player featuring
only 32 MB of memory in 1998. Other competitors entered the market and the Apple iPod made its debut in
2001 and included a 1.8-inch Toshiba 5GB hard drive and a large black-and-white display. The model retailed
for $400 and it was only compatible with Mac computers. The early brands are no longer available and the
iPod has become the market leader. What type of strategy did Apple employ with its introduction of the iPod in
2001?
a.
second mover strategy
b.
first mover strategy
c.
strategic window strategy
d.
competitive differential strategy
88. Maxwell has been promoted to an upper-level management position at QVC. He will be involved in matters
relating to transportation media, order processing, and development of marketing channels. Maxwell is involved
in developing _____ strategies for the marketing team.
a.
product
b.
distribution
c.
promotional
d.
test marketing
89. The term marketing mix describes:
a.
a composite analysis of all environmental factors inside and outside the firm.
b.
a series of business decisions that aid in selling a product.
c.
the relationship between a firm's marketing strengths and its business weaknesses.
d.
a blend of the four strategic marketing elements to satisfy specific target markets.
90. You are excited about being promoted to general sales manager, a middle management job, but you feel a bit
overwhelmed as you anticipate the demands of the new position. A colleague tries to help, pointing out that you will also
be shedding some responsibilities. Which of the following will not be part of your new job?
a.
Quarterly plans
b.
Daily and weekly plans
c.
Divisional policies
d.
Divisional procedures
e.
Semiannual plans
91. Which of the following is a dimension of Porter’s Five Forces model?
a.
Bargaining power of buyers
b.
Existence of second-movers
c.
Existing firms in the business environment
d.
Rivalry among strategic business units
92. In addition to the four forces of the Five Forces Model, which of the following influences rivalry among
competitors?
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a.
Decreased availability of information of competitors
b.
Decreased consumption during a lull in the economy
c.
Lack of differentiation between products
d.
Lack of major differences in pricing strategies
93. Effective relationship marketing often involves:
a.
inside information about competitors that is not in the public domain.
b.
databases to track customer preferences.
c.
large advertising budgets aimed solely at end-users.
d.
internal sources of performance-related data.
94. Porter’s Five Forces is a model which identifies five competitive forces that influence planning strategies. In
regards to this model, which one of the following statements is true?
a.
It separates the forces into internal and external categories.
b.
The model was later updated to include the impact of the Internet on a firm’s strategies.
c.
It identifies the threat of regulatory controls as one of the five forces.
d.
It only applies to firms that manufacture their own products.
e.
It is an integral part of the SWOT Analysis.
95. If a firm decides to make a major investment in a firm that supplies raw materials to it, this would be an
example of ______________ planning. If a university decides to add courses in ethics and business analysis to
its master’s degree program, this would be an example of ____________ planning.
a.
Tactical, Strategic
b.
Marketing, Operational
c.
Strategic, Organizational
d.
Organizational, Tactical
e.
Strategic, Tactical
96. The process of anticipating future events and conditions and determining the best way to achieve
organizational objectives is known as:
a.
retrospecting.
b.
planning.
c.
archiving.
d.
correlating.
97. In marketing, the term product:
a.
refers only to tangible items that can be seen, tasted, or touched.
b.
refers to a broad concept encompassing the satisfaction of consumer needs.
c.
limits itself to include goods alone.
d.
excludes package design, brand name, or warranty from its purview.
98. Many companies use an approach called _____ to coordinate all promotional activities so that the consumer
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receives a unified and consistent message.
a.
intra-organizational communications
b.
internal marketing strategies
c.
integrated marketing communications
d.
corporate communications
99. A shoe manufacturer has multiple suppliers for leather. Based on this information, which of the following
statements is true?
a.
The suppliers have lesser bargaining than the buyer.
b.
The barriers to market entry are high.
c.
The rivalry among competitors is low.
d.
The buyer has lesser bargaining power than the suppliers.
100. You are the project manager for this year’s planning process for your firm. Unlike in the past, you intend to
get input from a variety of stakeholders during the course of the planning process. You are doing this because:
a.
This will ensure that the planning process will be completed faster than in previous years.
b.
It will ensure that many ideas are considered and these stakeholders will become advocates for the
final plan.
c.
Your company’s mission statement mandates that this approach be taken.
d.
All stakeholders must approve the plan once it is finalized.
e.
The plan will include responsibilities for all stakeholders.
101. The Original Penguin clothing brand which features a cute penguin with a tie wrapped around its neck has
made a successful comeback to men's fashions since 2003. The brand is popular among young men and the
company recently articulated its interest in generating a 10% increase in sales among college students in the
United States for the next year. Which step in the marketing planning process best corresponds to the
articulation of a 10% increase in sales?
a.
determine organizational objectives
b.
assess organizational resources and evaluate risks and opportunities
c.
formulate strategy
d.
implement strategy through operational plans
102. Decisions about distribution strategy primarily involve challenges such as:
a.
how to advertise the product.
b.
how to position a product.
c.
when to raise prices to cover costs.
d.
which marketing channels to adopt.
103. You are the head of marketing for a technology company in Boston, and you are meeting with your
company’s CEO to discuss a new market opportunity that you believe offers significant profit potential for the
firm. You are anxious to launch an initiative to establish the firm’s presence in this new market as quickly as
possible. However, your CEO is a bit more cautious about the potential in this market and would prefer that you
take a more conservative approach to entering the market. In fact, your CEO would rather see what others do in
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the market before launching the firm’s initiative.
In order to appease your CEO, which of the following strategies should you pursue?
a.
A target marketing strategy.
b.
A first mover strategy.
c.
A marketing research strategy.
d.
A product strategy.
e.
A second mover strategy.
104. Microsoft Windows generates considerable income for its parent company but is expensive to support.
However, the expense is acceptable because Windows is the world's dominant operating system. Based on this
information, Windows would be categorized under the BCG market share/market growth matrix as a:
a.
star.
b.
cash cow.
c.
question mark.
d.
dog.
105. With respect to the BCG matrix, which one of the following generates considerable income, but requires
sizeable investments to underwrite further growth in the future?
a.
Cash cows
b.
Stars
c.
Question marks
d.
SBUs
e.
Dogs
106. Heather is the director of human resources at a medium-sized firm and has spent significant time in
workshops and working with her insurance suppliers to understand the Affordable Care Act and how it might
impact the benefits that the company provides its employees. The Affordable Care Act is an example of a(n)
_______ factor that can impact organizations.
a.
political-legal
b.
competitive
c.
socio-cultural
d.
economic
107. Budweiser and its stable of beer brands including Michelob, Bud Lite and Budweiser Platinum have faced
significant inroads in sales by craft breweries such as Boston Beer Company and Sierra Nevada Brewing
Company. The craft breweries represent a(n) ______ to Budweiser.
a.
threat
b.
weakness
c.
strategic window
d.
opportunity
108. The product manager for a line of mousetraps informs the board of directors at the company’s annual
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meeting that the product has been classified as a “dog” according to the BCG market share/market growth
matrix. This means the product:
a.
requires a “go/no go” decision within the next several years.
b.
has low market share of a high-growth rate market.
c.
should be withdrawn from the market or sold off as quickly as possible.
d.
needs heavy investment to make it a star.
109. Marketers can rely on a full arsenal of tools and techniques to facilitate the development of effective
marketing plans. With respect to these tools and techniques, which one of the following statements is true?
a.
Porter’s Five Forces Model is a model that identifies five competitive pricing strategies for an
organization to use in its marketing mix.
b.
A second mover strategy suggests that the firm that is second to offer a product or service will likely
be the long term winner in the market.
c.
The bargaining power of suppliers is influenced by the number of buyers in the market.
d.
Social responsibility and philanthropy influence the strategies that companies use to distinguish
themselves from their competitors.
e.
The strategic window refers to periods of time where what a firm does well is a close fit to what the
requirements are in a given market.
110. Assume that a firm would like to expand its product line. A complete expansion would cost $100 million,
but the firm can only raise $75 million in financing. This is best classified as a(n):
a.
constraint.
b.
opportunity.
c.
threat.
d.
instance of leverage.
111. According to the BCG market share/market growth matrix, _____ typically require more cash than they
generate.
a.
cash cows
b.
stars
c.
question marks
d.
achievers
112. Which of the following statements is indicative of a second mover strategy?
a.
Entering new markets with existing products
b.
Making significant innovations that turn old products into new ones
c.
Observing closely the innovations of first movers and then improving on them
d.
Entering new markets with new products before any other entrants
113. Decisions relating to the product strategy primarily revolve around _____.
a.
the promotional offers that would increase the visibility of the product in the market
b.
the features of the products being released in the market
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c.
the choice of high/low or everyday low pricing by the company
d.
the selection of wholesalers and retailers to transport the stock to the market
114. Newsletters, catalogs, and invitations to company-sponsored events are most closely associated with the
marketing mix activity of:
a.
product pricing.
b.
product distribution.
c.
product development.
d.
product promotion.
115. An international apparel manufacturer changed its pricing strategy as it entered a new market where
recessionary trends are being observed. This implies that the _____ factors of the marketing environment led
the firm to change its pricing decisions.
a.
legal
b.
political
c.
environmental
d.
economic
116. In SWOT analysis, situations where organizations are unable to capitalize on opportunities because of
internal limitations are referred to as:
a.
strategic windows.
b.
threats.
c.
constraints.
d.
leverages.
117. The first step of the marketing planning process involves:
a.
writing the mission statement.
b.
establishing organizational objectives.
c.
formulating a marketing plan.
d.
hiring a senior planner.
118. According to the BCG market share/market growth matrix, the revenues earned from cash cows should be
used to finance the growth of:
a.
question marks and dogs.
b.
dogs and stars.
c.
stars and question marks.
d.
question marks and cash cows.
119. The performance framework developed by the Boston Consulting Group (BCG) plots:
a.
market share against market growth potential.
b.
market attractiveness against number of product lines.
c.
current market conditions against past trends.
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d.
performance in test markets before a full-scale rollout.
120. Every company, whether for-profit or not-for-profit, must plan. Otherwise, the company will find itself
reacting to future events rather than proactively positioning itself to take advantage of future events.
Which of the following statements is false in regards to strategic planning?
a.
It includes the process of determining the organization’s primary objectives.
b.
It is done after the company completes its tactical planning activities.
c.
It involves choosing actions that will facilitate the achievement of its primary objectives.
d.
It provides longer term guidance for the marketers and other decision makers in the firm.
e.
It establishes the company objectives that are used to develop the tactical plan.
121. You are the head of market strategies for a large media company, and you are responsible for leading the
enterprise through its annual marketing planning process. Which one of the following statements is true about
this process?
a.
Your organization’s objectives are the essential set of statements that outlines its purpose and
differentiates it from other organizations.
b.
Your organization’s objectives specify the organization’s goals and operational scope.
c.
After your firm establishes its objectives, the next step in the marketing planning process is to
develop the marketing strategy.
d.
The last step in your marketing planning process should include an analysis of the risks and
opportunities that you will face in striving to achieve your objectives.
e.
Your organization’s objectives should be specific in describing what achievements are intended and
desired.
122. The strategic business unit (SBU) concept is best identified as a:
a.
planning tool that separates tactical and operational issues for analysis.
b.
strategic approach used primarily to separate marketing costs from production expenses.
c.
marketing planning tool that best suits the needs of large, diversified organizations.
d.
marketing approach appropriate for small enterprises producing a single product.
123. The basic objectives or goals of an organization are derived from its:
a.
standard operating procedures.
b.
operational plans.
c.
supervisory management strategy.
d.
mission statement.
124. Preparation of quarterly and semiannual plans by personnel such as the general sales manager or
advertising director would be classified as _____ planning.
a.
consumer
b.
tactical
c.
procedural
d.
operational
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125. According to the BCG market share/market growth matrix, the SBU that produces strong cash flows which
can be used to finance the growth of other SBUs is the:
a.
dog.
b.
question mark.
c.
cash cow.
d.
laggard.
126. Comcast’s NBC division acquired Universal Studios and the highest executive who approved this
acquisition was most likely Comcast’s CEO. This decision is the direct result of _____ planning process at
Comcast.
a.
tactical
b.
strategic
c.
operational
d.
technological
127. Bell Weddings was the company that pioneered the wedding planning industry. The owners realized that
customizing weddings to the wishes of the families, taking charge of the responsibilities, and creating a day that
is memorable for clients was an incredible business venture. The case of Bell Weddings illustrates the value of
_____.
a.
organizational vulnerabilities
b.
the first mover strategy
c.
operating plans
d.
portfolio analysis
128. As you plan to expand your children's clothing line internationally, you realize the necessity of considering the
marketing environment. In particular, you are worried about potential new trade restrictions that could be imposed by
other countries. Your concern primarily involves which dimension of the marketing environment?
a.
Economic.
b.
Social-cultural.
c.
Competitive.
d.
Political-legal.
e.
Technological.
129. A company can modify a strategy when its actual performance is not in line with expected results by:
a.
redefining the firm’s mission.
b.
focusing exclusively on long-range strategic issues.
c.
putting the marketing strategy into action and monitoring performance.
d.
interpreting the mission, vision, and values of the company differently.
130. You are responsible for writing the statements of organizational goals to be included in the mission statement of your
retail company. Choose the goal(s) that are not stated appropriately for this purpose.
a.
Add 5 new stores each quarter of the next two years.
b.
Create an aura of prestige.
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c.
Improve recycling by 10 percent within six months.
d.
Reduce the costs of employee turnover by 5 percent within a year.
e.
Add two new clothing designers to your list of vendors within a year.
131. Relationship marketing refers to a firm’s effort to develop long-term, cost-effective links with individual
customers and suppliers. Many companies:
a.
have been reluctant to adopt such initiatives because there is no evidence of their effectiveness.
b.
focus on relationship marketing as the sole purpose of their marketing research efforts.
c.
include relationship-building goals and strategies in their larger plans for the organization.
d.
believe that relationship marketing is just a fad and may not be sustainable or profitable in the long
run.
132. Based on your understanding of Porter's Five Forces, you have identified potential new entrants as the key threat to
your florist business. Choose the most accurate reason(s) for this situation.
a.
The Internet has reduced barriers to entry.
b.
The Internet has increased barriers to entry.
c.
The number of flower suppliers has increased.
d.
The quality of silk flowers has improved.
e.
All of the above are accurate reasons.
133. Which of the following best represents a mission statement?
a.
U.S. Army: Be all that you can be
b.
Bass Pro Shop: To be the leading merchant of outdoor recreational products, inspiring people to love,
enjoy, and conserve the great outdoors
c.
Kellogg's: Breakfast cereals at a price everyone can afford
d.
Walmart: Stores big enough to make shopping interesting for every family member
134. A good marketing plan revolves around an efficient, flexible, and adaptable ____________.
a.
Strategic plan
b.
Marketing strategy
c.
Marketing mix
d.
Mission statement
e.
SWOT Analysis
135. Decisions involving transportation, warehousing, inventory control, and order processing relate to the
_____ strategy component.
a.
pricing
b.
competitive
c.
product
d.
distribution
136. The concept of _________________ refers to the ways that marketers make sure their customers get the
right amount of products at the right time and place.
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a.
Product strategy
b.
Promotion strategy
c.
Retail strategy
d.
Distribution strategy
e.
Customer service strategy
137. YOU Inc., a radio cassette manufacturer, sold its business due to poor market shares. According to the
BCG Matrix, the firm sold its business because the business had become a _____ as seen in its poor prospects
and performance.
a.
star
b.
question mark
c.
cash cow
d.
dog
138. The _____ is the organizational program for selecting a target market and satisfying customers in that
market through the marketing mix.
a.
operational plan
b.
marketing strategy
c.
relationship marketing approach
d.
short-term plan
139. A SWOT analysis is designed to reveal, among other things, a firm's core competencies, which reflect its:
a.
threats.
b.
strengths.
c.
opportunities.
d.
vulnerabilities.
140. Core competencies are capabilities that customers value and competitors:
a.
can easily copy.
b.
tend to overestimate.
c.
find difficult to duplicate.
d.
undervalue.
141. Operational planning:
a.
should be used to establish the fundamental strategies of the organization.
b.
is used to determine departmental rules and procedures.
c.
is the primary responsibility of the top management.
d.
should be completed at the same time the total budget is prepared.
142. Business strategist Michael E. Porter identified five competitive forces that influence _____ in a model
called Porter’s Five Forces.
a.
planning strategies
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b.
corporate social responsibility
c.
consumer behavior
d.
sustainable development
143. There are many roles played in the planning process for a typical company. Depending on the
organizational level, the planning focus and the effort devoted will be different. Which of the following
statements is true about planning within an organization?
a.
In their role in the planning process, top management focuses on short-term operational objectives
for the company.
b.
Only top management spends time focused on strategic and operational planning activities for the
organization.
c.
Middle management employees spend more of their time focusing on planning than other levels of
the organization.
d.
Supervisors are tasked with developing specific programs and tactics for achieving the goals of their
responsibility areas.
e.
Middle managers are primarily focused on strategic planning considerations.
144. Justin is the marketing director for Tire Rack and is responsible for working with their advertising agency
and identifying the messages and means for communicating with customers. Justin's job involves the ______
strategy of the marketing mix.
a.
promotion
b.
product
c.
communication
d.
distribution
145. After working as an analyst in the marketing department of a large consumer products firm, you have been
promoted to marketing team lead for the company’s leisure products line. In your new role, you will be
responsible for the following major functional areas related to this product line:
• Inventory control
• Order processing
• Warehousing
• Logistics
Within the context of the marketing mix, your responsibilities are primarily focused on
a.
Product strategy
b.
Promotion strategy
c.
Retail strategy
d.
Distribution strategy
e.
Customer service strategy
146. In the planning hierarchy, plans dealing with organization-wide objectives, long-term plans, and the total
budget would be classified as _____ plans.
a.
weekly
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b.
tactical
c.
operational
d.
strategic
147. One of General Electric’s business units produces a variety of light bulbs and generates healthy revenue.
The revenues of this business unit are used to finance the growth of other business units with higher growth
potentials. How would this unit be classified on the BCG market share/market growth matrix?
a.
Cash cow
b.
Star
c.
Question mark
d.
Dog
148. A company’s plans that focus largely on its current and near-future activities and are determined by its
middle level management are referred to as _____ plans.
a.
strategic
b.
long-term
c.
operational
d.
tactical
149. H&M stores have grown quickly and established a high share of the market by targeting women who like
to wear the latest fashion trends and are price conscious. H&M determines their mix of product, pricing,
promotion strategy, and retail store location based upon extensive research regarding consumer preferences and
style trends. The identification of a target market and blending of marketing mix elements is known as the
________.
a.
marketing strategy
b.
environmental plan
c.
target market mix
d.
competitive strategy
150. The group of people to whom a firm directs its marketing efforts and ultimately its merchandise is known
as its _____ market.
a.
undifferentiated
b.
unsegmented
c.
mass
d.
target
151. Kraft Mac & Cheese first hit the shelves in 1937 and remains a favorite product for families. The product
has undergone changes in formulation as well as packaging over the years and Kraft recently reformulated the
product so it does not contain any artificial ingredients. Sales of Kraft Mac & Cheese in the familiar blue box
continue to be strong and help Kraft fund other products since it generates such a strong cash flow. Kraft
continues to invest in its Mac & Cheese brand through both research and development as well as promotional
activities. It's likely that Kraft views Mac & Cheese as a ______ according the BCG matrix.
a.
star
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b.
cash cow
c.
quotation mark
d.
dog
152. TaB is a cola product marketed by Coca Cola company and has a loyal following due to its low levels of
sodium and no caffeine. However, the TaB product has low market share and low growth rate. TaB is a
______ according the BCG matrix.
a.
dog
b.
cash cow
c.
quotation mark
d.
star
153. The BCG (Boston Consulting Group) matrix places strategic business units into which of the following
four-quadrants:
a.
Strengths, Weaknesses, Opportunities and Threats
b.
Oligopoly, Monopoly, Monopolistic Competition and Perfect Competition
c.
Micro, Small, Medium, and Large
d.
North, South, East and West
e.
Stars, Cash Cows, Question Marks and Dogs
154. You've just started a new job as Chief Marketing Officer for a restaurant chain, and you've learned that the marketing
planning process is already underway. In fact, the first two steps have been completed. What do you need to do now?
a.
Define the chain's mission.
b.
Determine the chain's specific objectives.
c.
Formulate a marketing strategy.
d.
Implement strategy.
e.
Assess organizational resources and opportunities.
155. An automobile manufacturer is dependent on a single supplier for tires. Based on this information, which of
the following statements is true?
a.
The barriers to market entry are low.
b.
The buyer has greater bargaining power.
c.
The threat of new entrants is high.
d.
The supplier has significant bargaining power.
156. The basic elements of a marketing strategy consist of ____________.
a.
Product and promotion
b.
Strategic planning and tactical planning
c.
The customer and the exchange
d.
Strategic planning and marketing planning
e.
The target market and the marketing mix
157. Which of the following would qualify as an example of a firm’s weakness?
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a.
A bill passed by the government regarding the work timings of all organizations
b.
A competitor planning to open a new branch close to the firm’s place of operations
c.
The firm’s failure to pay its taxes on time leading to a poor reputation in the market
d.
A ban imposed on the use of animals for testing cosmetics
158. The BCG market share/market growth matrix classifies products with a low relative share of a high-growth
market as _____.
a.
stars
b.
question marks
c.
cash cows
d.
dogs
159. Retailers such as Bed Bath and Beyond often use the ______ element of the marketing mix to influence
consumers to purchase a greater number of products by offering a discount if a customer purchases multiple
units such as 3 for $10.
a.
price
b.
promotion
c.
product
d.
distribution
160. Luxury brands such as Louis Vuitton and Gucci are experiencing a decline in sales as luxury buyers prefer
to purchase non-branded merchandise as they are concerned with flaunting their wealth. Instead, they are
purchasing luxury brands that do not feature the brands logo on the product. This trend is related to the fact that
high income consumers have increased their wealth in the last several years while middle-income earners'
wealth has declined. The decline in sales for Louis Vuitton and Gucci is related to the ________ environmental
influence.
a.
social-cultural
b.
technological
c.
political-legal
d.
competitive
161. Business strategies are impacted by the widespread use of the Internet. Which of the following is true with
respect to its impact?
a.
The Internet has eliminated all forms of substitution threats.
b.
The Internet has reduced barriers to market entry.
c.
The Internet has reduced the bargaining power of end-users.
d.
The Internet has reduced consumer awareness about the differences among competitors.
162. Strategic planning has a critical impact on a firm’s destiny because it provides _____ to its decision
makers.
a.
customer input
b.
individual goals
c.
departmental goals
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d.
long-term direction
163. The quadrant of the BCG market share/market growth matrix that represents both a high market share and a
high rate of market growth represents the:
a.
cash cows.
b.
innovators.
c.
stars.
d.
strivers.
164. Jamal is the marketing director of a third party logistics firm operating in the United States. Jamal and his
team recently engaged in ________ to determine the company's primary objectives over the next three years and
identified specific actions that the company would initiate to achieve the objectives.
a.
strategic planning
b.
tactical planning
c.
operations planning
d.
near-term planning
165. Jenny has been appointed the marketing manager for Spark Cleaning Products. Her job focuses on
decisions involving customer service, package design, brand names, and warranties. In this scenario, Jenny is
closely associated with the _____ dimension of the marketing planning.
a.
product strategy
b.
resource valuation and pricing
c.
retailing and distribution
d.
target market
166. Which of the following best describes the activity of promotion?
a.
Making new products available to meet consumer demand
b.
Finding a convenient location to sell the products in
c.
Maintaining a high level of regulation in production
d.
Communicating between buyers and sellers
167. Promotional schemes like frequent shopper programs provide incentives to loyal buyers. Considering
Porter’s Five Forces model, such offers will:
a.
reduce the threat of new entrants.
b.
decrease the rivalry among competitors.
c.
decrease the bargaining power of the supplier.
d.
increase the threat of substitute products.
168. A certain social networking corporation has the highest number of users in the social networking industry.
This is an example of the firm’s:
a.
opportunity.
b.
constraint.
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c.
strength.
d.
threat.
169. In terms of the BCG Matrix, which of the following SBUs are characterized by earning only low market
shares in low-growth markets?
a.
Stars
b.
Question marks
c.
Dogs
d.
Cash cows
170. As chief executive of Stalwart Shipfitting Company, a diversified producer of marine supplies and
equipment, John needs a method for spotting promising product lines that warrant commitment of additional
resources, as well as those that should be removed from the firm's product portfolio. A good choice for this firm
at this stage would be to use:
a.
computer models.
b.
strategic business units.
c.
a marketing audit.
d.
an industry analysis.
171. DK Motors' difficulty in competing with other car makers due to its lack of responsiveness to changing
consumer preferences constitutes a:
a.
strategic window.
b.
leveraged situation.
c.
threat from the environment.
d.
constraint on its activity.
172. Which of the following statements is true of tactical planning?
a.
It is conducted exclusively by the supervisory personnel.
b.
It is used to generate weekly plans, unit budgets, departmental rules and procedures.
c.
It is designed to determine annual budgets and long-range strategic goals.
d.
It is performed to substitute the strategic planning process in large organizations.
173. You are about to launch a digital advertising startup. Your former marketing professor warns you to get the first
element in the marketing strategy right -- because otherwise, your new company is doomed to failure. Which is this
essential element?
a.
Target market
b.
Promotion
c.
Price
d.
Distribution
e.
Product
174. Jose is the social media manager for a children's museum and is making decisions about the best mix of
social media tools to utilize in order to achieve the objective of increasing the number of family memberships
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by 10% during the year. Jose likes to use Twitter, Instagram, Facebook and Pinterest to reach the museum's
desired target market but he spends most of his time developing the appropriate content and determining the
frequency of posts. Which term best describes Jose's activity related to determining the use of social media?
a.
tactical planning
b.
media scheduling
c.
strategic planning
d.
operations planning
175. Jose is part of a team that is analyzing current demographic trends. The team will make a recommendation
concerning the groups of consumers toward whom the firm should direct its new marketing effort. Jose’s team
is involved in which of the following elements of the firm’s marketing strategy?
a.
Target market
b.
Distribution
c.
Product
d.
Promotion
176. Employees of Popsie Inc., a small grocery store chain, are working on its tactical plans. The personnel most
involved in this level of its planning process would be its:
a.
top management, such as the owner.
b.
middle management, such as the merchandising and advertising managers.
c.
store managers.
d.
supervisory management, such as shift managers and night auditors.
177. The marketing mix decisions which are closely regulated and subject to public scrutiny usually relate to a
company’s _____ strategy.
a.
short-term
b.
resource
c.
distribution
d.
pricing
178. Marketing planning establishes the:
a.
resource base provided by the firm's strategy.
b.
economic impact of additional sales.
c.
daily and weekly schedules for individual employees.
d.
basis for any marketing strategy.
179. Matching an internal strength with an external opportunity produces a situation known as:
a.
leverage.
b.
constraint.
c.
vulnerability.
d.
plateau.
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180. Atari, a consumer electronics and video games company, observed the innovations of Nintendo Co., the
most powerful video game company at that time, and destroyed the market share of Nintendo eventually. This
implies that Atari:
a.
followed a first-mover strategy.
b.
created a new product indigenously.
c.
remained uninfluenced by Nintendo.
d.
applied a second-mover strategy.
181. ADA Inc. stopped its production of oral care goods after determining apparel production to be its new
primary objective. This is a direct result of the _____ planning process at ADA Inc.
a.
tactical
b.
research
c.
strategic
d.
economic
182. Carmen is a marketer for a global consumer products company. She is designing a promotional campaign
for a foreign market and wants to ensure that the promotional campaign is clearly understood by the target
consumers. She is also taking special care to see that the campaign is free from controversies and does not
inadvertently offend anyone. In this scenario, Carmen is specifically trying to take into account variables of the
country’s _____ environment.
a.
social-cultural
b.
political-legal
c.
competitive
d.
economic
183. Jamie is the regional sales manager for Sherwin Williams paint company and oversees a team of 40 outside
sales representatives. She meets with her sales managers on a monthly basis to review budgets and track the
team's progress in meeting its sales quotas in order to reach company objectives. Jamie requires that each sales
manager collaborate with their individual sales representatives to develop weekly call schedules and account
plans. What type of planning is Jamie and her sales managers engaged in?
a.
operational planning
b.
strategic planning
c.
tactical planning
d.
constructive planning
184. The rule of three refers to the theory that in any industry, the three strongest competitors dominate between
______________ percent of the competitive market.
a.
60 and 80
b.
20 and 80
c.
70 and 90
d.
60 and 90
e.
50 and 95
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185. When a massive fuel hike affected the expenses of users of Cadmia significantly, Flare Inc. introduced
automobiles that run on solar energy. The introduction of such automobiles indicates that Flare Inc.:
a.
switched over to less sustainable fuels.
b.
recognized its competitive constraints.
c.
applied a second-mover advantage.
d.
made the best of a strategic window.
186. An example of a threat to a firm discovered by a SWOT analysis might be:
a.
the presence of cost advantages due to advanced technology.
b.
the chance to acquire firms with the needed technology.
c.
the entry of new competitors in the industry.
d.
the narrow product line produced by the firm.
187. The rule of three states that the three leading firms in an industry will control _____ percent of the market.
a.
less than 25
b.
less than 50
c.
between 70 and 90
d.
100
188. A bill passed by the government stipulates the mandatory use of revised engine mapping and particulate
filters in the automobile industry. Which of the following factors of the marketing environment has affected the
automobile industry in this scenario?
a.
competitive
b.
political-legal
c.
economic
d.
social-cultural
189. Product lines, pricing decisions, selection of appropriate distribution channels, and decisions relating to
promotional campaigns are____.
a.
fixed and unchanging
b.
independent of the impact of external factors
c.
dynamic in today’s boundaryless business environment
d.
determined from a purely retrospective viewpoint
190. All planning strategies have the goal of creating:
a.
sustainable competitive advantage.
b.
undifferentiated markets.
c.
a market with no distinct segments.
d.
barriers to market entry.
Indicate one or more answer choices that best complete the statement or answer the question.
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191. When you open an organic food store, you intend to follow a second mover strategy. Choose the benefit(s) of this
approach.
a.
You can observe and avoid the mistakes of Whole Foods and other innovative retailers.
b.
You can be the first to enter this market.
c.
You may be able to improve upon the innovations of first movers.
d.
You can promote this strategy in your advertising.
e.
Second movers can charge less than first movers.
192. You are explaining the elements of your bookstore's marketing strategy to a summer intern. Which of the following
do you include?
a.
A target market of adults 18-62
b.
A wide array of bestselling fiction and nonfiction titles
c.
Prices competitive with online sellers
d.
Low employee turnover
e.
Advertising in local newspapers
193. Within your diversified processed-food firm, there are SBUs for fruits, vegetables, dairy products, and baked goods.
Each SBU has its own:
a.
Managers
b.
Resources
c.
Objectives
d.
Competitors
e.
Portfolios
194. As the marketing director for a public health advocacy group, you recently obtained approval from the board to
pursue a new set of strategic objectives. Among them: to achieve 80% community awareness of the group's name and
purpose. Now you must turn to tactical planning. Which of the following tasks should you undertake
a.
Develop a five-year funding allocation plan.
b.
Reserve advertising space in local newspapers for the next six months.
c.
Recruit an assistant to write press releases.
d.
Improve the visibility of your headquarters building.
Match each definition to the corresponding term.
a.
planning
b.
marketing planning
c.
strategic planning
d.
tactical planning
e.
cash cows
f.
first mover strategy
g.
SWOT analysis
h.
strategic window
i.
marketing mix
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j.
product strategy
k.
strategic business units
l.
Porter’s Five Forces
m.
marketing strategy
n.
dogs
o.
stars
p.
annual growth rate
195. _____ is the process of anticipating future events and conditions and determining the best way to achieve
organizational objectives.
196. The _____ process involves implementing planning activities devoted to achieving marketing objectives.
197. The process of determining an organization’s primary objectives and adopting courses of action that will
achieve these objectives is known as _____.
198. Strategic planning is complemented by _____ which guides the implementation of activities specified in
the strategic plan.
199. A _____ is the overall, companywide program for selecting a particular target market and then satisfying
consumers in that market through the marketing mix.
200. The _____ is the blending of the four strategy elements to fit the needs and preferences of a specific target
market.
201. _____ identifies five competitive forces that influence planning strategies.
202. A firm that adopts a _____, attempts to capture the greatest market share and develop long-term
relationships by being the pioneer to enter the market with a good or service.
203. _____ is a review that helps planners compare internal organizational strengths and weaknesses with
external opportunities and threats.
204. Limited periods during which the key requirements of a market and the resources and skills of an
organization best fit together are called the _____.
205. _____ primarily involves decisions concerning the goods and services to be offered by a firm.
206. _____ are key business units within diversified firms.
207. _____ represent units with high market shares in high-growth markets.
208. In the BCG matrix, the position of an SBU along the vertical axis indicates the _____ of the market.
209. _____ command high market shares in low-growth markets.
210. SBUs in the category of _____ promise poor future prospects, and marketers should withdraw from these
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businesses or product lines as quickly as possible.
211. What is a marketing strategy? Explain the process of implementing the marketing strategy into action.
212. What is a strategic window? Give an example of a strategic window that exists today.
213. Describe the aspects of strategic and tactical planning.
214. What is a marketing mix? In order for a product to succeed, what can be said about the variables in the
marketing mix?
215. Explain the forces that influence the rivalry among competitors in Porter’s Five Forces Model.
216. Describe the market share/market growth matrix.
217. Distinguish between an organization’s mission and its objectives. Provide an example of each.
218. Describe the basic elements of a marketing strategy.
219. Define SWOT analysis and explain its importance.
220. Define marketing planning.
221. Describe the strategic business unit concept.
222. Describe the structure and dynamics of Porter’s Five Forces model. How has the Internet affected the
operation of this model?
223. Discuss pricing strategy in the marketing mix and its relevance in the changing economy.
224. What does a distribution strategy involve? Define two marketing channels.
225. How does planning differ at various levels of organizational management?
226. Explain the difference between a first-mover and a second-mover strategy. Give examples of companies
that have followed each strategy.
227. List the environmental characteristics that influence strategic decisions. What is the "rule of three?" Provide
an example of this phenomenon.
228. Define and explain the term “planning” in the context of marketing.
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Answer Key
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chapter 2
Name:
Class:
Date:
chapter 2
Name:
Class:
Date:
chapter 2
Name:
Class:
Date:
chapter 2
Name:
Class:
Date:
chapter 2
