Chapter 02
Test Bank
1. Strong supplier relations and efficient supply chains help firms such as Walmart achieve operational excellence.
2. To build a sustainable competitive advantage, companies should focus on a single strategy.
3. It is not always necessary to go through all the steps in the marketing planning process.
4. A mission statement describes the specific actions a firm will take to achieve its goals.
5. iTunes software is often credited with the success of the Apple iPod MP3 player, because it made the iPod easier to use than competing players, and
was difficult for competitors to duplicate. This is an example of a sustainable competitive advantage.
6. STP refers to segmentation, testing, and promotion.
7. The components of a SWOT analysis are strengths, weaknesses, opportunities, and tactics.
8. Firms are typically more successful when they focus on opportunities that build on their strengths relative to those of their competition.
9. Duke’s is a surfer-themed restaurant chain in Hawaii. Most of its customers are tourists. In a SWOT analysis for Duke’s, the possibility that the
recession might cut back on tourism in Hawaii would be considered a weakness.
10. Price should be based on the value that the customer perceives as giving them a good value for the product they receive.
11. Geraldo manages the electrical turbine engine division of General Electric Corporation. He makes most decisions independently, without consulting
headquarters. Geraldo manages a strategic business unit.
12. The strategic planning process always proceeds sequentially through the five steps.
13. Isaac is looking for ways to offer new goods and services to his existing customers. He is pursuing a market development strategy.
14. SanDisk’s MP3 player product line (called the Sansa) has a low relative market share. The MP3 player market is expected to decline over the next
few years. In Boston Consulting Group (BCG) portfolio analysis, the Sansa would be considered a dog.
15. The “implement marketing mix” step of the strategic marketing planning process is part of the control phase.
16. Relative market share is an example of a marketing metric.
17. Product penetration is one of the four major growth strategies.
18. If a firm wants to develop a sustainable competitive advantage, it should
19. Which of the following is not one of the four overarching strategies to create and deliver value and to develop sustainable competitive advantages?
20. When Ramona, the keynote speaker at a major business leaders’ conference, arrived in the middle of the night at the Ritz-Carlton, she was exhausted
and her suit was wrinkled from her 10-hour plane trip. The night clerk found someone to dry clean Ramona’s suit and have it ready for her morning
presentation. She has been a loyal Ritz-Carlton customer ever since. In this example, Ritz-Carlton demonstrated the macro strategy of
21. Amazon’s latest attempt to shore up and enhance its competitive barriers by introducing a home service marketplace that may help it achieve a
lasting, powerful advantage is an example of _______________ excellence.
22. Some banks offer special accounts designed to attract junior high school students. These kids save in such small amounts that the accounts cost
banks more to maintain than they are worth; however bankers know that consumers are creatures of habit and hope that the young people they serve now
will become adult customers. These banks recognize
23. Nordstrom, an upscale department store, has a well-known reputation for going the extra mile to serve its customers. This reputation for excellent
customer service will most likely result in
24. Firms achieve ___________ through efficient procedures and excellent supply chain management.
25. Marketers want their firms to develop excellent supply chain management and strong supplier relations so they can
26. For many years, Southwest Airlines distinguished itself as the low-cost airline. Now, many other low-cost competitors have entered the market.
Similarly, Southwest was one of the first airlines to offer online ticketing. Now, all airlines have online ticketing. These examples suggest that
27. Customers around the world know Pepsi and consider it a primary “go–to” brand if they want a refreshing drink. This positioning reflects Pepsi’s
28. Carla has been directed by her regional marketing manager to cut prices on seasonal items, place an ad in the local paper, and tell distributors to
reduce deliveries for the next month. Which step of the strategic marketing planning process is Carla engaged in?
29. When conducting a SWOT analysis, in what phase of the strategic marketing process is an organization presently engaged?
30. The automobile manufacturing industry closely watches annual consumer satisfaction surveys. For years, Japanese car companies consistently had
the highest levels of customer satisfaction, creating a(n) ________ for these companies.
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31. Which of the following is least likely to provide a sustainable competitive advantage?
32. Even when large discount retailers enter a market, a few small, local retailers survive and prosper. These small retailers have probably developed
a(n) ________ that allows them to survive.
33. As part of her company’s SWOT analysis, Valerie is assessing the company’s internal environment, including
34. Samantha is charged with assessing her company’s external environment as part of a SWOT analysis. Samantha will study her company’s
35. Manufacturers that use just-in-time manufacturing systems coordinate closely with suppliers to ensure that materials and supplies arrive just before
they are needed in the manufacturing process. While just–in-time systems can offer major advantages in terms of inventory costs, they must be carefully
managed. If a firm found that its just-in-time system was badly managed, leading to frequent manufacturing delays due to missing parts, this would
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represent a(n) __________ in a SWOT analysis.
36. For U.S. businesses with strong export capabilities, expansion of U.S. trade agreements with other countries creates
37. In 2006, Ford Motor Company announced it would severely cut back its automobile production. For parts companies supplying Ford its parts, this
represented a(n)
38. Lionel is asked to conduct an STP analysis for his firm. The first step he should perform in this analysis is to
39. In 2006, Walmart announced that it would begin selling organic food products. In doing so, Walmart was most likely trying to
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40. For years, when considering new products, marketers at Celestial Seasonings asked themselves, “What would Stacy think?” Stacy was a fictional
character representing 25– to 50-year-old educated, upper-income women who rarely watched television but did a lot of reading. “Stacy” represented
Celestial’s primary
41. After identifying various market segments that her company could pursue, Lisa evaluated each segment’s attractiveness based on size, income, and
accessibility. Lisa was involved in
42. LeBron James, Stephen Curry, and other athletes are paid huge sums of money by companies for celebrity endorsements. If endorsements by these
athletes create a clear understanding among consumers of the companies’ products in comparison to competing products, they can help with the firm’s
__________ strategy.
43. __________ involves the process of defining the marketing mix variables so that target customers have a clear, distinctive understanding of what a
product does or represents in comparison with competing products.
A. Targeting
B. Market segmentation
44. Imagine that you are in a convenience store choosing your favorite “comfort” food instead of being in a classroom taking this test. You might notice
the packaging, colors, labels, even the fonts used on labels. All of these efforts are part of the marketer’s
Feedback: Packaging, colors, labels, and fonts all contribute to the consumer’s impressions of a product and to their understanding of what it offers. This
is therefore part of the product’s positioning.
45. When positioning products relative to competitors’ offerings, firms typically are most successful when they focus on opportunities
46. Many small businesses whose competitors are national franchises advertise “we are locally owned” or “we have been here since 1951.” This is part
of these firms’
47. Among Internet users, some do research online, some shop, some look for entertainment, and many do all three. Each of these groups would be
called a
48. Suppose your university made a sizable investment in its career services—additional counselors, increased efforts to bring in recruiters, and other
services aimed at helping students find jobs. This investment would enhance the university’s _____________ in an attempt to create value for students
and recent graduates.
49. The idea of value-based marketing requires firms to charge a price that
50. E-books, in addition to being an alternative product form, provide __________ value creation since they can be downloaded via the Internet
immediately when and where they are needed.
51. In value-based marketing, the promotion element of the four Ps communicates the ________ to customers through a variety of media.
52. When marketers use a variety of communication disciplines—advertising, personal selling, sales promotion, public relations, direct marketing, and
online marketing including social media—in combination to communicate a value proposition to the customer, it is referred to as
53. Google and other search engines allow marketers to bid to have their ads shown when consumers search keywords related to the firm’s products.
These marketers are attempting to create value through
54. Craig sees that his company’s quarterly sales and profits are significantly above projections and says, “That’s great. Let’s keep doing what we’ve been
doing.” Craig is ignoring the __________ step of the marketing planning process.
55. The first objective in the evaluate performance phase of the marketing planning process is to
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56. As it pertains to the marketing plan, understanding the causes of performance, regardless of whether that performance exceeded, met, or fell below
the firm’s goals
57. A regional manager at GNC, a chain of retail stores selling nutritional supplements, is reviewing sales data after a recent in-store promotion. The
data show success in some stores and limited response in others. To understand the differences between stores, the manager will probably next review
the company’s
58. After conducting STP analysis for her custom auto parts store and developing strategies for each of the four Ps, Monique now has to make
_____________ decisions.
59. Lamar owns four dry cleaning stores in the suburbs of Orlando, Florida. He recently updated his STP analysis, and has just finished adjusting his
marketing mix based on the STP results. His next strategic marketing decision will most likely involve determining
60. In most companies, portfolio management is typically done at the SBU or ___________ level of the firm.
61. A(n) ___________ is a group of products that consumers may use together or perceive as similar in some way.
62. Heather has been assessing several of her firm’s products using the Boston Consulting Group (BCG) approach to portfolio analysis. She has been
trying to assess the strength in a particular market and is looking at the sales of the product and the overall market as well as the sales of competitors.
Heather is trying to determine
63. To determine how attractive a particular market is using the BCG portfolio analysis, __________ is(are) established as the vertical axis.
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64. In BCG portfolio analysis, products in low-growth markets that have received heavy investment and now have excess funds available to support
other products are called
65. Fernando was thrilled to find out that his company had just decided to invest a great deal of money in the product he was managing. He knows that
even with its recent high rate of growth and the fact that it dominates its market, he would need more money to establish it firmly. Using the BCG
portfolio analysis, his product would be classified as a(n)
66. Using the BCG portfolio analysis, a “dog” should be phased out unless
67. The strategic marketing planning process
68. Which of the following is not one of the four major growth strategies marketers typically utilize?
69. Adrienne decides to add new sales representatives and increase advertising to increase sales in her existing market for her current line of security
systems. Adrienne is pursuing a __________ growth strategy.
70. A __________ growth strategy employs the existing marketing offering to reach new market segments.
71. Quitman Enterprises sells its business language dictionary to college students throughout the United States. Joseph Quitman, the owner, wants to
start selling the book to international students abroad. Quitman wants to pursue a __________________ growth strategy.
72. When Marvel launched several successful series on Netflix, including , , , and , it employed a ___________ strategy.
73. H&R is a small, local heating and air conditioning business. The local military base is a potential source of growth, and H&R already installs and
services the type of equipment the military would require, but it is difficult to get established as a certified government contractor. H&R is considering
a ____________ growth strategy.
74. Many states create licensing requirements for a variety of professionals (such as lawyers and accountants) designed to restrict entry into their market
by professionals from other states. This strategy limits ____________ growth strategies.
75. Marketers who design and offer new products and services to their existing customers are pursuing a ____________________ growth strategy.
76. Most banks now have customer relationship software that, when a customer contacts the bank, tells the service representative what types of
accounts, loans, and credit cards the customer currently has. Service representatives use this information to sell some of the other services the bank
currently offers to these customers. This is a ___________________ growth strategy.