122) Annual-plan control requires making sure the company isn’t overspending to achieve sales
goals. The key ratio to watch is ________.
A) stock turnover
B) gross margin
C) return on capital
D) cash flow return on investment
E) marketing expense-to-sales
123) ________ approach advocates argue that all costs must ultimately be imputed in order to
determine true profitability.
A) Direct-cost
B) Full-cost
C) Traceable-cost
D) Activity-based costing
E) Fixed cost
Cabot (Scenario)
Cabot, a large car manufacturer, has four popular car brands in different segments. It has a
manufacturing facility near Detroit, MI, where parts common to all the four brands are
manufactured. Other specific parts like the brake system, windshield, bonnet, locks, and so on
are manufactured in separate plants. Each make has its own product manager and support staff.
All product managers report to the CEO of the company.
124) Cabot’s CEO’s annual compensation is an example of a ________ cost.
A) direct
B) variable
C) traceable common
D) nontraceable common
E) manufacturing
125) The cost of land where a plant that manufactures common parts is set up falls under
________ costs.
A) traceable common
B) nontraceable common
C) variable
D) manufacturing
E) material
126) Suppose the manufacturer pays a commission on every car sold. Then, the salesperson’s
commission is classified as a(n) ________.
A) cost of labor
B) traceable common cost
C) nontraceable common cost
D) advertising cost
E) direct cost
127) The cost of operating the common manufacturing facility is a(n) ________ cost.
A) opportunity
B) traceable
C) nontraceable
D) sunk
E) differential
128) The manufacturer launches a brand building advertising campaign. The campaign does not
promote any one specific car but is aimed at promoting the company as a whole. Which type of
cost does this fall under?
A) direct costs
B) material costs
C) nontraceable costs
D) traceable costs
E) labor costs
129) Desktop marketing gives marketers information and decision structures on computer
dashboards.
130) Profitability control is the prime responsibility of line and staff management.
131) Annual-plan control involves the use of financial analysis to evaluate the performance of
marketing plans.
132) The annual plan control process begins with measuring performance.
133) Repurchase rate is a sales metric that is used to evaluate the performance of marketing
plans.
134) The ratio of promoters to detractors is a customer metric that is used to evaluate the
performance of marketing plans.
135) A marketing audit is an orderly examination of the organization’s macro– and
micromarketing environments, marketing objectives and strategies, marketing systems, and
specific activities.
136) Self-audits tend to provide more objective information than audits conducted by external
consultants.
137) A marketing audit only benefits a company that is in trouble; companies in good health do
not need to conduct them.
138) To succeed in the future, marketing must be more holistic and less departmental.
139) In the future, there will be greater emphasis on precision marketing as opposed to mass
marketing.
140) In the context of overall market share, customer loyalty refers to the percentage of all
customers who buy from the company.
141) The first step in conducting a marketing profitability analysis involves assigning functional
expenses to marketing entities.
142) Operating management is most effective in controlling direct costs and traceable common
costs.
143) Briefly explain the concept of annual-plan control.
144) What is a marketing audit? Explain the four characteristics of a marketing audit.
145) What is marketing control? List the four types of marketing control.
146) What is the purpose of profitability control?
147) How can a firm periodically reassess its strategic approach to the marketplace?
148) Define sale-variance analysis and microsales analysis.
149) What are the steps involved in marketing profitability analysis?
150) What are direct, traceable common, and nontraceable common costs? Give an example of
each.
151) What is the full-cost approach of evaluating a marketing entity’s performance?
152) Full costing allocates nontraceable common costs to marketing entities and has three major
weaknesses. What are they?
153) Which of the following is NOT a predicted direction for marketing in the coming years?
A) the demise of precision marketing and rise of mass marketing
B) the demise of the marketing department and the rise of holistic marketing
C) the demise of marketing intuition and the rise of marketing science
D) the demise of manual marketing and the rise of both automated and creative marketing
E) the demise of free-spending marketing and the rise of ROI marketing
154) The coming years will see the rise of the marketing department and the demise of holistic
marketing.
155) If a company has too many products and many are losing money; the company is giving
away too many services; and the company is poor at cross-selling products and services, it is a
sign that the company’s brand-building and communication skills are weak.
156) In the future, marketers should use the Internet more, improve the sales automation system,
apply market automation to routine decisions, and develop formal marketing decision models
and marketing dashboards.
157) List some of the marketing trends that are likely to emerge in the near future.
158) What skills and competencies will marketers need to succeed in the future?
159) What are the ten deadly marketing sins? Please include the signs that the sin exists and a
suggested solution for each.
