Contemporary Marketing, 16th Edition Solutions manual and test bank Louis E. Boone | David L. Kurtz
chapter 2
strategic planning In Contemporary Marketing
Chapter Overview
Today’s marketers face strategic questions every day. Planning strategy is a critical part of their jobs. The marketplace changes continually in response to changes in consumer tastes and expectations, technological developments, competitors’ actions, economic trends, and political and legal events, as well as product innovations and pressures from suppliers and distributors.
Although the causes of these changes often lie outside a marketer’s control, effective planning can anticipate many of them. For example when the price of gas and jet fuel soared recently, travelers opted to stay close to home instead of enjoying vacations to exotic, faraway places. This represented an opportunity for places like Ocean City, Maryland, and Branson, Missouri. Any destinations that promoted itself to potential vacationers within a short drive could find itself adding up the profits.
This chapter lays a foundation for analyzing all aspects of marketing by demonstrating the importance of gathering reliable information to create an effective plan. These activities provide a structure for a firm to use its unique strengths. Marketing planning identifies the markets a company can best serve as well as the most appropriate mix of approaches to satisfy the customers in those markets. While this chapter focuses on planning, in later chapters the task of marketing research and decision making will be explored.
Changes in the Updated Edition
The chapter has been updated and revised, with new features in several areas:
· The Opening Vignette and Evolution of a Brand discuss search engine giant Google’s acquisition of Motorola Mobility, a division of Motorola that holds 17,000 mobile tech patents and has 7,500 more patents pending. Google’s stated strategy for the acquisition, the largest in its history with a hefty $12.5 billion price tag, is to use Motorola’s enormous treasury of patents to defend itself and manufacturers of Android handsets like Samsung and HTC in patent suits. This is said to be an attempt to further competition. There maybe complications as both companies differ radically in their missions, profit margins, and distribution methods. Google’s successful bold moves are a result of it constantly gathering information from the market analyzing what it finds, and planning, both for the near and long terms. In its defense, Google states that it deems to operate Motorola as a separate business and not attempt to monopolize the market as the government fears owing to Google’s newfound financial strength and market advantage.
· Solving an Ethical Controversy analyzes the case of celebrity endorsements. It also discusses the question “should companies hold the celebrities who endorse their products accountable for their personal actions?” The issue of brands being identified with celebrities and the effect of celebrity’s personal life on the performance of their endorsed brand is also analyzed.
· Marketing Success features “Build-a-Bear Customers Get a Hands-On Experience—and the Bear” describes how the toy company started with a novel idea of designing your own bears. Their interactive customer experience along with marketing factors like price, simplicity, and convenient locations help keep the experience a positive one. It discusses how they’ve grown despite being slowed down by the recent economic downturn.
· Career Readiness provides some simple guidelines to make a good impression at a job. For details, refer to “Making a Good Impression at That First Real Job.”
- Chapter Case 2.1 Hotels Market New Comforts Just for Millennials features how hotels are trying to attract Millennials who are poised to become the largest consumer group in U.S. history. It focuses on how the hotels keep their young guests who lack brand loyalty interested.
- Collaborative Learning Exercises are provided in several areas related to strategic planning and the marketing process—Planning Throughout the Organization, Defining the Organization’s Mission and Objectives, Strategic Planning, Formulating a Marketing Strategy, Promotion Strategy and Pricing Strategy, The Marketing Environment, and BCG Matrix.
- Video Case 2.2 Synopsis includes an overview of strategic planning and the marketing process at Nederlander.
Lecture Outline
| Opening Vignette and Evolution of a Brand— Ever so market-savvy search engine giant Google makes a big move and acquisitions Motorola Mobility along with its enormous treasury of patents. Bringing Google into the hardware business and an ability to crush a new group of competitors | ||
| Chapter Objective 1: Distinguish between strategic planning and tactical planning. Key Terms: planning, marketing planning, strategic planning, tactical planning PowerPoint Basic: 5, 6 PowerPoint Expanded: 5, 6, 7 | ||
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Career Readiness—Ask students to provide few suggestions on how to make a good impression at the first real job.
| 1. Marketing planning: the basis for strategy and tactics a. Definition of planning: the process of anticipating future events and conditions and determining the best way to achieve organizational objectives b. Planning is important for both large and small companies c. Marketing planning i. Marketing planning refers to implementing planning activities devoted to achieving marketing objectives ii. An important trend in marketing planning centers on relationship marketing d. Good relationships with customers can arm a firm with vital strategic weapons e. Many companies now include relationship-building goals and strategies in their marketing plans, maintaining databases to track customer preferences 2. Strategic planning versus tactical planning a. Strategic planning is defined as the process of determining an organization’s primary objectives and adopting courses of action that will achieve these objectives b. Strategic planning includes allocation of resources, and provides long-term directions for the decision makers c. Tactical planning, a complementary approach to strategic planning, guides the implementation of activities specified in the strategic plan d. It addresses shorter-term actions, focusing on current and near-future activities that need to be completed so that larger strategies can be implemented Assessment check questions 1. Define planning. Planning is the process of anticipating future events and conditions and of determining the best way to achieve organizational objectives. 2. Give an example of strategic planning and tactical planning. To survive in a challenging environment of soaring fuel costs, several airlines have decided to merge as part of their strategic planning. Tactical plans include cutting the number of flights and charging passengers extra for checked baggage. | |
| Chapter Objective 2: Explain how marketing plans differ at various levels in an organization. Key Terms: none PowerPoint Basic: 7 PowerPoint Expanded: 8, 9 | ||
| Table 2.1 Planning at Different Managerial Levels. Which managers focus most on broad goals and long-term planning? Which managers focus most on planning for day-to-day tasks?
Note: Discuss how two companies approached a similar problem differently, with different results. How did Nintendo and Microsoft compete against Sony’s PlayStation 2 with their gaming consoles, GameCube and Xbox respectively? | 1. Planning at different organizational levels a. Managers at all organizational levels devote some of their attention to planning activities b. The amount of time spent on planning activities and the types of planning vary by organizational level c. Top management (CEOs, COOs and functional vice-presidents) i. Spend more of their time planning than middle-level and supervisor-level managers ii. Usually, they focus more on long-range strategic issues d. Middle management i. Tend to focus on operational planning, which includes creating and implementing tactical plans for their own departments ii. Supervisors often develop specific programs to meet goals in their areas of responsibility iii. To be most effective, the planning process includes input from a wide range of sources, including employees, suppliers and customers Assessment check questions 1. How do marketing plans vary at different levels of the organization? Top managers usually focus their planning activities on long-range strategic issues. In contrast, middle-level managers focus on operational planning, which includes creating and implementing tactical plans for their own units. Supervisors develop specific programs to meet goals in their areas of responsibility. 2. Why is it important to get input from others when planning? Input from a variety of sources—other employees, suppliers, or customers—helps ensure that many ideas are considered. Involving those people in planning can also turn them into advocates for the plan. | |
| Chapter Objective 3: Identify the steps in the marketing planning process. Key Terms: mission, marketing strategy PowerPoint Basic: 10, 11 PowerPoint Expanded: 9 | ||
| Figure 2.1 The Marketing Planning Process. Which step might be more difficult than it seems? Which step do you think can be easily overlooked?
Note: Choose a couple of local organizations and use their mission statements as class examples
Do advertisements viewed as personalized by marketers invade privacy? Do you think the potential of mobile advertising will provide a competitive edge? | 1. Steps in the marketing planning process a. Define the firm’s mission b. Determine objectives c. Assess resources d. Evaluate environmental risks and opportunities e. Formulate a marketing strategy f. Implement the strategy through operating plans g. Gather feedback to monitor and adapt strategies when necessary 2. Defining the organization’s mission and objectives a. The organizational mission i. The mission is the essential purpose that differentiates the organization from others ii. The mission statement specifies the organization’s overall goals and operational scope and provides general guidelines for future management actions iii. Adjustments made to the mission statement reflects changing business environments and management philosophies b. The organizational objectives i. The basic objectives, or goals, in a firm’s mission statement guide the development of supporting marketing goals and plans ii. Objectives should state specific intentions 3. Assessing organizational resources and evaluating environmental risks and opportunities a. This consists of an assessment of an organization’s strengths, weaknesses, and available opportunities b. Organizational resources include capabilities of the firm’s production, marketing, finance, technology, and employees c. Environmental effects can emerge both from within the organization and from the external environment 4. Formulating, implementing and monitoring a marketing strategy a. A good marketing plan revolves around an efficient, flexible, and adaptable marketing strategy b. A marketing strategy is an overall, companywide program for selecting a target market and satisfying customers in that market through a careful blending of the elements of the marketing mix—product, distribution, promotion, and price c. The strategy must be monitored to ensure that objectives are being met 5. In the two final steps of the planning process, marketers put the marketing strategy into action; then they monitor performance to ensure that objectives are achieved 6. Sometimes strategies need to be modified if the product’s or company’s actual performance is not in line with expected results Assessment check questions 1. Distinguish between an organization’s mission and its objectives. The firm’s mission is the essential purpose that differentiates the company from others. Its objectives guide development of supporting marketing objectives and plans. Avon’s mission is to be “the company for women.” One of its objectives might be convert all its packaging to recycled materials. 2. What is the importance of the final step in the marketing planning process? In the final step of the marketing planning process, managers monitor performance to ensure that objectives are achieved. | |
| Chapter Objective 4: Describe successful planning tools and techniques, including Porter’s Five Forces model, first and second mover strategies, SWOT analysis, and the strategic window. Key Terms: Porter’s Five Forces, first mover strategy, second mover strategy, SWOT analysis, strategic window PowerPoint Basic: 13-19 PowerPoint Expanded: 13-18 | ||
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Solving an Ethical Controversy: Celebrity Drug Endorsements: Honest—or Not? Figure 2.2 Porter’s Five Forces Model. Choose one of the forces and think of the ways it relates to a real-world marketing situation. Figure 2.3 SWOT Analysis. Think of a well-known product and its possible weaknesses and threats. Then consider its strengths and opportunities. Note: An example of a strategic window: During the extended period when HP and Compaq struggled to complete their merger, Dell Computer aggressively courted Compaq’s large corporate customers trying to leverage Dell’s strengths and take advantage of the confusion caused by the pending HP/Compaq merger. | 1. Successful strategies: tools and techniques a. Four tools for marketing planning include Porter’s Five Forces model, first and second mover strategies, SWOT analysis, and the strategic window b. All of these planning strategies have the goal of creating a sustainable competitive advantage for a firm, meaning that other companies cannot provide the same value 2. Porter’s Five Forces a. Porter’s Five Forces is a model which identifies five competitive forces that influence planning strategies b. Porter later updated his model to include the impact of the Internet on the strategies that businesses use c. They are: i. The threat of new entrants—is influenced by the cost and difficulty of entering a market. The Internet has reduced the barriers to market entry in many industries ii. Bargaining power of buyers—can influence the firm’s strategy as customers can easily find alternate suppliers and do price comparisons and switch to a better supplier iii. Bargaining power of suppliers—is influenced by the number of suppliers iv. The threat of substitute products—can be either products from a competing firm or industry v. Rivalry among competitors—all the above four factors influence rivalry d. Issues such as cost and differentiation or lack of differentiation of products—along with the Internet—influence the strategies that companies use to stand out from their competitors 3. First mover and second mover strategies a. A first mover strategy advocates that a company that is first to offer a product will be the long-term market winner. Being first may also refer to entering new markets with existing products or creating significant innovations that effectively turn an old product into a new one b. A second mover strategy advocates close observation of the innovations of first movers and then improving on them to gain market advantage 4. SWOT analysis a. SWOT analysis helps planners compare internal organizational strengths and weaknesses with external opportunities and threats b. “SWOT” is an acronym for strengths, weaknesses, opportunities, and threats c. This is an important strategic planning tool d. SWOT – strengths i. A set of core competencies—what the organization does well ii. Core competencies are capabilities that customers value and competitors find difficult to duplicate iii. Matching an internal strength with an external opportunity produces a situation known as leverage e. SWOT – weaknesses i. Internal weaknesses create environmental threats that can attack an organization’s strength ii. Planners must anticipate constraints when internal weaknesses or limitations prevent their organization from taking advantage of opportunities 5. Strategic window a. The strategic window refers to the limited periods when key requirements of a market and the particular competencies of a firm best fit together b. The view through a strategic window shows planners a way to relate potential opportunities to a firm’s capabilities c. It requires a thorough analysis of three elements: i. Current and projected external environmental conditions ii. Current and projected internal company capabilities iii. How, whether, and when the firm can reconcile environmental conditions and company capabilities by implementing one or more marketing strategies Assessment check questions 1. Briefly explain each of Porter’s Five Forces. Porter’s Five Forces are the threats of potential new entrants, which increases competition in a market; bargaining power of buyers, which can depress prices; bargaining power of suppliers, which can increase costs or reduce selection; threat of substitute products, which can lure customers to other products; and rivalry among competitors, which can bring about price wars or divert companies from their main goals. 2. What are the benefits and drawbacks of a first mover strategy? The benefits of a first mover strategy include capturing the greatest market share and developing long-term relationships with customers. Disadvantages include the possibility that companies that follow can learn from mistakes by first movers. Procter & Gamble has been a first mover with its line of Swiffer products. 3. What are the four components of the SWOT analysis? What is a strategic window? SWOT analysis helps planners compare internal organizational strengths and weaknesses with external opportunities and threats. SWOT is an acronym for strengths, weaknesses, opportunities, and threats. A strategic window defines the limited periods when the key requirements of a market and a firm’s particular competencies best fit together. | |
| Chapter Objective 5: Identify the basic elements of a marketing strategy. Key Terms: marketing mix, product, product strategy, distribution strategy, promotion strategy, pricing strategy PowerPoint Basic: 16, 17 PowerPoint Expanded: 20-24 | ||
| Note: Ask students to compare products of a company aimed at different target markets, in terms of the marketing mix variables. You could consider automobiles, computers, and mobiles as examples. For instance, netbooks, laptops for students and laptops for business could be compared. Marketing Success— Build-a-Bear Customers Get a Hands-On Experience—and the Bear Figure 2.4 Elements of a Marketing Strategy and Its Environmental Framework. Discuss how each strategy reaches, persuades, and develops a relationship with buyers. Note: Ask students for examples of companies that formed alliances as a distribution strategy. | 1. Elements of a marketing strategy a. An effective marketing strategy does several things: i. It reaches the right buyers at the right time ii. It persuades them to buy the product iii. It develops a strong relationship with them over time b. The basic elements of a marketing strategy consist of two concepts: i. the target market ii. the marketing mix variables that combine to satisfy the needs of the target market 2. The target market a. The target market is a group of consumers toward whom the firm aims its marketing efforts, and ultimately its merchandise b. Diversity plays an ever-increasing role in targeting markets i. The Hispanic population in the United States has surpassed African Americans as the largest minority group ii. Targeting consumers in specific global markets also represents a challenge—and an opportunity 3. Marketing mix variables a. Marketing decisions can be divided into four variables or strategies which form the total package, called the marketing mix b. The four marketing mix variables are product, distribution, promotion, and pricing strategies c. The marketing mix consists of a blend of these four variables to fit the needs and preferences of a specific target market 4. Product strategy a. The term product means more than a good, service, or idea—it refers to a broad concept that also encompasses the satisfaction of all consumer needs in relation to a good, service, or idea b. So product strategy involves more than just deciding what goods or services the firm should offer to consumer groups c. It also includes decisions concerning customer service, package design, brand names, trademarks, patents, warranties, the lifecycle of a product, product positioning, and new-product development 5. Distribution strategy a. The concept of distribution strategy refers to the ways marketers ensure that consumers find products in proper quantities at the right time and right place b. Distribution decisions involve: i. Modes of transportation ii. Warehousing iii. Inventory control iv. Order processing v. Selection of marketing channels including intermediaries c. Technology has continually opened up new channels of distribution in many industries (an example is online selling). The Internet has caused the biggest revolution in distribution since the mail-order catalog 6. Promotion strategy a. Promotion strategy refers to the communications link between sellers and buyers b. In developing a promotion strategy, marketers blend the various elements of promotion to communicate most effectively with their target markets c. Integrated marketing communication (IMC) coordinates all promotional activities so that the consumer receives a unified and consistent message 7. Pricing strategy a. Pricing strategy deals with the methods of setting profitable and justifiable prices b. It is closely regulated and subject to considerable public scrutiny c. One factor that influences a marketer’s pricing strategy is competition d. A good pricing strategy should create value for customers, building and strengthening their relationship with a firm and its products Assessment check questions 1. What are the two components of every marketing strategy? The basic elements of a marketing strategy are (1) the target market and (2) the marketing mix variables. 2. Identify the four strategic elements of the marketing mix. The marketing mix consists of product, distribution, promotion, and price strategies. | |
| Chapter Objective 6: Describe the environmental characteristics that influence strategic decisions. Key Term: rule of three PowerPoint Basic: 18 PowerPoint Expanded: 25-28 | ||
| 1. The marketing environment a. Marketing decisions are not made in a vacuum 2. Marketers make decisions about target markets and marketing mix variables by taking into account the dynamic nature of these five dimensions of the marketing environment: a. Competitive factors b. Political-legal factors c. Economic factors d. Technological factors e. Social-cultural factors 3. Some recent trends in the marketing environment: a. Expanding into foreign markets b. Technology—especially the Internet c. Marketers are now increasing efforts to get their messages to consumers via smartphone d. The rule of three means that in any industry, the three strongest, most efficient companies dominate between 70 and 90 percent of the competitive market e. The importance of understanding prevailing cultural norms is vital—the decline of bidding for auction items on eBay is an example f. The entire marketing environment provides a framework for all marketing activity Assessment check questions 1. What are the five dimensions of the marketing environment? The five dimensions of the marketing environment are competitive, political-legal, economic, technological, and social-cultural factors. 2. How is concern over the natural environment affecting the other dimensions? Concerns over the natural environment have led to new and tighter regulations on pollution, which affect the political-legal environment in which marketers operate. Efforts toward sustainability are now social-cultural factors as well because consumer awareness is turning into consumer preference. | ||
| Chapter Objective 7: Describe the methods for marketing planning, including business portfolio analysis and the BCG matrix. Key Terms: strategic business unit (SBU), stars, cash cows, question marks, dogs PowerPoint Basic: 18-21 PowerPoint Expanded: 29-35 | ||
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Figure 2.5 BCG Market Share/Market Growth Matrix. Think of a past or present product or service, a well-known business, or even a broad industry that might fit into each quadrant. | 1. Methods for marketing planning a. Many firms have developed planning methods to help with marketing decisions b. Two of these types of methods: the strategic business unit concept, and the market share/market growth matrix 2. Business portfolio analysis a. Top managers at large firms need a method for spotting product lines that deserve more investment as well as lines that aren’t living up to expectations b. Portfolio analysis attempts to evaluate products and determine the strongest and weakest c. Strategic business units i. A strategic business unit (SBU) is a key business element within a diversified firm ii. Each SBU has its own managers, resources, objectives, and competitors iii. Divisions, products lines, or even a single product may constitute a strategic business unit iv. An SBU, also called a category, focus attention of company managers so that they can respond effectively to changing consumer demand within limited markets 3. The BCG matrix a. The market share/market growth matrix (or BCG matrix) places SBUs in a four-quadrant chart that plots market share—the percentage of a market that a firm controls—against market growth potential b. The quadrants are labeled stars, cash cows, question marks, and dogs c. Firms in each of the four quadrants require a unique marketing strategy d. Stars: i. Stars represent units with high market shares in high-growth markets ii. They generate considerable income, but require even more cash to finance further growth e. Cash cows: i. Cash cows have high market shares in low-growth markets ii. These firms focus on maintaining this status for as long as possible iii. The business produces strong cash flows, which could be used to finance growth of other SBUs with high growth potential f. Question marks: i. Question marks achieve low market shares in high-growth markets ii. Marketers must decide whether to continue supporting these products or businesses as they require more investment than the cash they generate iii. If a question mark cannot become a star, the firm should pull out of the market and target other markets with greater potential g. Dogs: i. Dogs manage low market shares in low-growth markets ii. SBUs here promise poor future, and marketers should consider withdrawing from these markets as quickly as possible Strategic Implications of Marketing in the 21st Century a. Planning has become vital to ,marketers as the 21st century speeds ahead with technological advances b. Marketers need to plan carefully, accurately, and quickly to gain a competitive advantage in today’s global marketplace c. Marketers need to plan when to enter a market, differentiate between a star and a dog, and take suitable actions Assessment check questions 1. What are SBUs? Strategic business units (SBUs) are key business units within diversified firms. Each SBU has its own managers, resources, objectives, and competitors. 2. Identify the four quadrants in the BCG matrix. The BCG matrix labels SBUs stars, cash cows, question marks, and dogs. Stars are the products with high market shares in high-growth markets; cash cows command high market shares in low-growth markets; question marks achieve low market shares in high-growth markets; and dogs manage only low market shares in low-growth markets. | |
ANSWERS AND TEACHING NOTES TO CHAPTER EXERCISES
Chapter 2 Assurance of Learning Review
1. State whether each of the following illustrates strategic or tactical planning:
a. Global automakers begin setting up manufacturing plants in India
b. The merging of Play N Trade Video Games and Dimensions Games Corporation
c. The Washington Redskins trade multiple draft picks to draft Baylor QB Robert Griffin III
d. A regional airline looks for ways to expand to other areas of the country
Answer: a. strategic planning
b. strategic planning
c. tactical planning
d. tactical planning
Point value: 1
BUSPROG: Reflective Thinking
DISC: Marketing Plan
Learning Objectives: 2-1
Topic: A-head: Marketing Planning: The Basis for Strategy and Tactics
Bloom’s: Application
Difficulty: Moderate
2. Imagine you had a chance to interview Google co-founders Larry Page and Sergey Brin. What questions might you ask each about strategic planning for his division and the firm overall?
Answer: Student answers will vary. Questions will be focused on strategic planning. The founders may be quizzed about organization-wide objectives, fundamental strategies, long-term plans for existing and new products, new business lines, possible plans for inorganic growth, total budget etc.
Point value: 1
BUSPROG: Reflective thinking
DISC: Strategy
Learning Objectives: 2-1
Topic: A-head: Marketing Planning: The Basis for Strategy and Tactics
Bloom’s: Application
Difficulty: Moderate
3. What is the difference between a firm’s mission and its objectives? Why is it important that both are conveyed clearly to employees and to customers?
Answer: A firm’s mission is the essential purpose and philosophy that differentiates it from other companies. Adjustments in this statement reflect changing business environments and management philosophies. A firm’s objectives are its organizational goals, including specific intentions that guide development of marketing objectives and plans, often stated in the company’s mission statement. These objectives guide development of supporting marketing objectives and plans. The conveying of the mission and vision clearly to the customers is required in order to differentiate themselves from competitors. Employees need to know them so that they put their efforts for the realization of these objectives.
Point value: 1
BUSPROG: Analytic
DISC: Strategy
Learning Objectives: 2-3
Topic: A-head: Defining the Organization’s Mission and Objectives
Bloom’s: Comprehension
Difficulty: Easy
4. Over which of Porter’s Five Forces do consumers have the greatest influence? Over which do they have the least? How might these factors affect a firm’s overall marketing strategy?
Answer: Consumers have the greatest influence on the bargaining power of buyers and the threat of substitutes. Consumers have the least influence on the bargaining power of suppliers. With increased availability of information, which tends to level the playing field, rivalry will increase among competitors who try to differentiate themselves from the crowd. The top management has to keep the consumer preferences in mind while formulating any strategy or plans lest they shift their loyalty to another supplier.
Point value: 1
BUSPROG: Analytic
DISC: Strategy
Learning Objectives: 2-4
Topic: A-head: Successful Strategies: Tools and Techniques
Bloom’s: Comprehension
Difficulty: Easy
5. Why is it so important for a firm to identify its core competencies?
Answer: A company’s strengths reflect its core competencies—what it does well. Core competencies are capabilities that customers value and competitors find difficult to duplicate. Matching an internal strength with an external opportunity produces a situation known as leverage. To make the most of any opportunity, firms must make sure to take advantage of their core competencies.
Point value: 1
BUSPROG: Analytic
DISC: Strategy
Learning Objectives: 2-4
Topic: A-head: Successful Strategies: Tools and Techniques
Bloom’s: Comprehension
Difficulty: Easy
6. How might an understanding of diversity help formulate a firm’s marketing strategy?
Answer: The target market is an essential element of any marketing strategy. Diversity plays an ever-increasing role in targeting markets. Strategies that focus on satisfying the needs of its most prominent target group ensure marketplace success. An understanding of diversity helps formulate strategies that focus on groups with enormous buying potential.
Point value: 1
BUSPROG: Diversity
DISC: Strategy
Learning Objectives: 2-5
Topic: A-head: Elements of a Marketing Strategy
Bloom’s: Comprehension
Difficulty: Easy
7. Suppose you have been hired as a marketer by an online retailer, like Bluefly or Amazon, to help develop a new marketing mix. State one thing you would do to improve the retailer’s position through each of the four strategic elements: product, distribution, promotion, and pricing.
Answer:
Product: Add more variety by including more services
Distribution: Start operations in more countries, or in more cities of existing countries
Pricing: Placing the product competitively in the market with the help of price discounts
Promotion: Focus on social media marketing
Point value: 1
BUSPROG: Reflective thinking
DISC: Strategy
Learning Objectives: 2-5
Topic: A-head: Defining the Organization’s Mission and Objectives
Bloom’s: Application
Difficulty: Moderate
8. What is the rule of three? Suppose you worked for a small firm in a large industry—such as a small manufacturer of furniture. How might you actually use the rule of three to enhance your firm’s position in the marketplace?
Answer: The rule of three means that in any industry, the three strongest, most efficient companies dominate between 70 and 90 percent of the market. Trying to enter that kind of market is difficult, especially for a small company with limited resources. Some strategies include lower prices (greater value) or new features; or higher levels of customer service. Hence, by adding more value to one’s products, offering exceptional levels of customer service, and competitive prices can be a strategy that can be used to enhance one’s firm’s position in the marketplace.
Point value: 1
BUSPROG: Analytic
DISC: Strategy
Learning Objectives: 2-6
Topic: A-head: Elements of a Marketing Strategy
Bloom’s: Comprehension
Difficulty: Moderate
9. What is a portfolio analysis? What purpose does it serve for marketers?
Answer: The business portfolio analysis evaluates a company’s products and divisions, including strategic business units (SBUs) in order to determine which business units are the strongest and which are the weakest.
Point value: 1
BUSPROG: Analytic
DISC: Strategy
Learning Objectives: 2-7
Topic: A-head: Methods for Marketing Planning
Bloom’s: Knowledge
Difficulty: Easy
10. How does the BCG matrix help marketers decide which products to offer? According to the matrix, which types of products are most desirable, and why?
Answer: The market share/market growth matrix places the firm’s market share on one axis and the market’s growth potential on the other axis. The resulting four quadrants are labeled: stars (high market share, high-growth market), cash cows (high market share, low-growth market), question marks (low market share, high-growth market), and dogs (low market share, low-growth market).
In high growth industries, stars are the most desirable, as they have a high market share.
Whereas, in stable or low growth industries, cash cows are desirable. They have a high market share and generate cash that can be used to fund other SBUs of the firm that has the potential for success.
Point value: 1
BUSPROG: Analytic
DISC: Research
Learning Objectives: 2-7
Topic: A-head: Methods for Marketing Planning
Bloom’s: Knowledge
Difficulty: Easy
Projects and Teamwork Exercises
1. Answer: When students choose a company whose goods and services are familiar to them and create a mission statement, they might start with companies they particularly admire and check their websites for mission statement ideas. When formulating a mission statement, they should make sure that the company’s overall broad objectives are spelled out, its philosophy is stated, and its intentions are listed in a clear-cut and straightforward way.
Point value: 1
BUSPROG: Reflective Thinking
DISC: Strategy
Learning Objective: 2-3
Topic: A-head: Defining the Organization’s Mission and Objectives
Bloom’s: Application
Difficulty: Moderate
2. Answer: Students should first study Apple and its strategies to be leaders in innovative products, and then they should research the products of another firm that produces either a digital music player or a smartphone to learn about its strategy. They must understand the benefits as well as the risks involved in being a first mover. They must research the sales progress of the second mover firms, and present the findings.
Point value: 1
BUSPROG: Reflective Thinking
DISC: Strategy
Learning Objective: 2-3
Topic: A-head: Defining the Organization’s Mission and Objectives
Bloom’s: Application
Difficulty: Moderate
3. Answer: Students are expected to understand the strategies of Samsung and Sony. In creating marketing strategies, a firm decides to direct its efforts toward a particular group of consumers called a target market. Students will need to narrow their marketing strategy to fit certain specific groups of people, keeping in mind demographics, geographical location, lifestyle, etc. The strategies of Sony and Samsung would be different; hence, students should understand the differences in their approach in depth. Such an effort will help them get clarity on the concepts related to the elements of marketing strategy.
Point value: 1
BUSPROG: Reflective Thinking
DISC: Strategy
Learning Objective: 2-3
Topic: A-head: Defining the Organization’s Mission and Objectives
Bloom’s: Application
Difficulty: Moderate
4. Answer: The students should select any industry of their choice and preference from the four options. They must research the various companies in the industry, battling for a higher market share. From the findings, the top three companies that have a market share totaling 70-90 percent are to be listed. Few students can also explain the reasons for such domination by these big players of the industry.
Point value: 1
BUSPROG: Reflective Thinking
DISC: Research
Learning Objective: 2-6
Topic: A-head: Elements of a Marketing Strategy
Bloom’s: Application
Difficulty: Moderate
5. Answer: Students must select any corporation from the four listed out in the text. From the available product lines, they should select at least 6-8 and categorize them into stars, cash cows, question marks, and dogs. Their research should be accurate enough to classify the product lines into the four distinct categories. Students can also graphically represent the product lines in the four quadrants for a better representation of their findings. There should be a discussion over a few product lines that may fall in more than one category.
Point value: 1
BUSPROG: Reflective Thinking
DISC: Research
Learning Objective: 2-7
Topic: A-head: Methods for Marketing Planning
Bloom’s: Application
Difficulty: Moderate
Critical-Thinking Exercises
1. Suppose you are a marketer for a U.S. manufacturer of pet supplies. Two top executives have proposed expanding the company by opening retail stores and marketing pets on-site—puppies, kittens, rabbits, birds, fish, and the like. What are the potential benefits and drawbacks of making a move like this? How would you advise your company to proceed?
Answer: A company’s strengths reflect its core competencies—what it does well. They are capabilities that customers value and competitors find difficult to duplicate. Straying from core competencies may have potential rewards, such as expanding into more attractive markets, but is also risky. On the other hand, even if a company focuses on its core competencies, sometimes it needs to broaden its offerings to maintain a competitive edge. The benefits could be better reach and coverage. Drawbacks could be inability of the company to leverage the decision. A comprehensive SWOT analysis can help the top management to take the right decision. Students’ answers may vary.
Point value: 1
BUSPROG: Reflective Thinking
DISC: Strategy
Learning Objective: 2-4
Topic: A-head: Successful Strategies: Tools and Techniques
Bloom’s: Application
Difficulty: Moderate
2. Netflix has made thousands of streaming videos available to its unlimited subscribers. How does this strategy demonstrate a strategic window for the company?
Answer: The view through a strategic window shows planners a way to relate potential opportunities to company capabilities. Netflix is in a unique position because unlike previous leaders in the movie rental business, it delivers movies and TV series directly to PCs via the Internet. A new system, introduced by the company will allow them to sidestep computers and deliver movies directly to television sets.
Point value: 1
BUSPROG: Reflective Thinking
DISC: Strategy
Learning Objective: 2-4
Topic: A-head: Successful Strategies: Tools and Techniques
Bloom’s: Application
Difficulty: Moderate
3. Choose one of the following products and describe how it may (or already has) become vulnerable to substitution. Then describe an overall strategy—with two or three tactics—for reducing this vulnerability.
a. printed copies of periodicals or books
b. television
c. telephone landlines
d. travel agencies
Answer: This exercise asks students for an opinion but suggest that students think about products they use. Defending a product from competition might include adding features, delighting customers with better service, improving product quality, or lowering prices.
Point value: 1
BUSPROG: Reflective Thinking
DISC: Strategy
Learning Objective: 2-4
Topic: A-head: Successful Strategies: Tools and Techniques
Bloom’s: Application
Difficulty: Moderate
4. Research the website of one of the following retail firms to identify its target market. Then outline a strategy for expanding that target market.
a. Quiznos
b. Target
c. Trader Joe’s
d. Nordstrom
e. Dollar Tree
Answer: Students are expected to select any one among the following retail firms. The target groups must be clearly defined, explained, and a strategy that caters to those groups must be outlined. Ideas for expanding this target market must be feasible, and should be applicable to the current environment. A discussion on how to improve the offerings, and expand the target markets will help the students to understand the concept in a better way.
Point value: 1
BUSPROG: Reflective Thinking
DISC: Strategy
Learning Objective: 2-5
Topic: A-head: Elements of a Marketing Strategy
Bloom’s: Application
Difficulty: Moderate
5. Research a company such as L.L. Bean or Kraft Foods that has a number of different successful SBUs. What factors do you think make these units—and this company—successful from a marketing standpoint?
Answer: Student answers may vary. To evaluate each of their organization’s strategic business units, students could use the market share/market growth matrix developed by the Boston Consulting Group. Discussion could also focus on how the selected company manages its SBUs.
Point value: 1
BUSPROG: Reflective Thinking
DISC: Research
Learning Objective: 2-7
Topic: A-head: Methods for Marketing Planning
Bloom’s: Application
Difficulty: Moderate
Ethics Exercises
A recent news story reported a shocker from the Centers for Disease Control and Prevention (CDCP): bread is the number-one source of sodium in the average American diet. In fact, most people get twice as much sodium from bread and rolls as they do from a bag of salty snacks like chips or pretzels. Imagine that you are a marketer for a baking company whose main product lines are bread and rolls. For years, your company has focused on “heart-healthy” as a key claim.
1. You have been assigned to create a new strategy and tactics for your firm’s Facebook page. Would you continue to emphasize the heart-healthy message? Would you refer to the CDCP study or ignore it?
Answer: The exercise raises some important issues and students may come up with contradicting opinions. On one hand, there is a risk of losing market share by dropping the “heart-healthy” message. On the other hand, beating competition would require attracting consumers using innovative, honest ways which would require taking the CDCP study into account. This exercise will put the students in an ethical dilemma, and give solutions that can beat competition in either ethical or unethical ways. Some students may opt to ignore the studies that have discrepancies in the results, whereas, some might follow them.
Point value: 1
BUSPROG: Reflective Thinking
DISC: Strategy
Learning Objective: 2-1
Topic: A-head: Marketing Planning: The Basis for Strategy and Tactics
Bloom’s: Application
Difficulty: Moderate
2. As you review the Facebook site, you note that packaging for your company’s bread uses the words “heart-healthy.” Would you bring this to the attention of the marketing group responsible for product packaging? Or would you look for a way to obscure the package design online? Defend your answer.
Answer: Students can have differing opinions for this question. Some might want to bring this to the attention of the marketing group. Some might want them to look past it. The students should justify their solutions and elaborate the reasons for the pricing strategies used for the firm’s food items.
Point value: 1
BUSPROG: Reflective Thinking
DISC: Strategy
Learning Objective: 2-5
Topic: A-head: Elements of a Marketing Strategy
Bloom’s: Application
Difficulty: Moderate
Internet Exercises
1. Business portfolio analysis. Occasionally, companies sell parts of themselves to other firms. One stated motive for such divestitures is that the sold assets are a poor strategic fit for the rest of their business portfolios. One recent example is the sale of a controlling interest in NBC Universal by General Electric to cable giant Comcast. Using a major search engine, research the sale of NBC Universal. In the context of business portfolio analysis, why did GE decide to sell, and why did Comcast decide to buy, NBC Universal?
Answer: Student answers will vary. Students are expected to visit a few websites that provide information on business portfolio analysis, NBC Universal, General Electric, and Comcast. The answers may include some of the information that follows.
NBC Universal is a media company—home to a broadcast network, movie studio and a string of cable networks—which is not a competency for General Electric. However, Comcast provides cable television, broadband Internet, and telephone service to both residential and commercial customers. It may be in a better position to handle NBC’s operations.
Point value: 1
BUSPROG: Reflective Thinking
DISC: Research
Learning Objective: 2-7
Topic: A-head: Methods for Marketing Planning
Bloom’s: Application
Difficulty: Moderate
2. Mission and Objectives. Visit the website of the Sara Lee Corporation (http://www.saralee.com), whose slogan is “the joy of eating." Define the firm's mission and objectives, and discuss how its brand and activities support both.
Answer: Student answers may vary. The mission statement of Sara Lee, “To simply delight you…every day” suggests that the firms aims to give it’s customers a unique experience every time they use its products. The firm’s objectives can include fast delivery of products, efficient supply chain management, and so on.
Point value: 1
BUSPROG: Reflective Thinking
DISC: Strategy
Learning Objective: 2-3
Topic: A-head: Defining the Organization’s Mission and Objectives
Bloom’s: Application
Difficulty: Moderate
3. SWOT Analysis. Visit the website of an organization whose goods and services interest you—such as Columbia Sportswear, Major League Baseball, Travelocity, Apple, or Urban Outfitters. Based on your research, create a SWOT analysis for your firm. Outline your own ideas for increasing the firm’s strengths and reducing its weaknesses.
Answer: Student answers will vary according to the product and industry they choose. In a SWOT analysis, the strengths of a firm are typically internal and are the core competencies of the firm, like efficient supply chain management, just-in-time inventory system, and so on. The weaknesses are internal like lack of efficient management. The opportunities are usually external like the changing customer preferences and the economic situation. The threats would normally include competitors.
Point value: 1
BUSPROG: Reflective Thinking
DISC: Strategy
Learning Objective: 2-4
Topic: A-head: Successful Strategies: Tools and Techniques
Bloom’s: Application
Difficulty: Moderate
Case 2.1 Hotels Market New Comforts Just for Millennials—Questions for Critical Thinking
1. Hotel chains see Millennials as “critical” to their financial growth. What are some reasons why?
Answer: Millennials have become the target market for hotel chains of late. Some of the reasons for this change in target could be that the Millennials wield a spending power of about $200 billion a year. The evolving trends of getaways and having new experiences have taken this generation by storm and being equipped with the ability to afford luxury, they cannot be overlooked. With records showing that a spending increase of 20 percent in one recent year, hotel chains have no choice but to shift their focus.
Point value: 1
BUSPROG: Reflective Thinking
DISC: Strategy
Learning Objective: 2-5
Topic: A-head: Elements of a Marketing Strategy
Bloom’s: Application
Difficulty: Moderate
2. How should the hotel industry use social media to connect with younger travelers?
Answer: The social media can be used in various ways in order to connect with young guests. Hotels, by increasing their online presence, can monitor complaints or suggestions that are being posted and take them into account. These networks can be enabled to facilitate travel arrangements and also be made to serve as a source for enquiry or help.
Point value: 1
BUSPROG: Reflective Thinking
DISC: Strategy
Learning Objective: 2-5
Topic: A-head: Elements of a Marketing Strategy
Bloom’s: Application
Difficulty: Moderate
Video Case 2.2 Nederlander Producing Company Spotlights Customer Rewards—Questions for Critical Thinking
1. How does the Audience Rewards program support Nederlander’s overall strategic plan?
Answer: The Audience Rewards program supports Nederlander’s overall strategic plan by offering a wider range of compatible goods and services designed to attract new customers and strengthen loyalty among existing customers. It also gives Nederlander a single platform—backed by others in the entertainment industry—to market its messages to targeted consumers. Partnerships with large corporations such as Starwood Hotels and the major airlines give Nederlander access to greater resources and a greater number of potential customers.
2. It might seem as though Nederlander’s first-mover strategy has the entertainment rewards market locked up. But what strategies and tactics could a second-strategy mover use to gain access to theater customers?
Answer: A second mover could use the following strategies and tactics to gain access to the entertainment rewards market: (1) survey Audience Rewards customers to learn of any dissatisfaction with the program; (2) note any weaknesses in Audience Rewards and create improvements; (3) approach different partners in the travel and hospitality industry (such as restaurants, regional airlines, and even retailers); (4) enter a new market overseas; and (5) establish a niche such as off-Broadway or avant-garde theater or cater to a specific audience such as Millennials or retirees.
Collaborative Learning Exercises
Niche Marketing
Purpose:
To help students understand the importance of an appropriate niche market segment
Background:
This exercise is to help the students understand how an organization directed at a particular niche market segment has more scope
Relationship to Text:
Target market
Estimated Class Time:
25 minutes
Materials/Preparation:
Develop a list of niche business types for your students to analyze in small groups. Possibilities include a luxury watch store, a diamonds store, a luxury car company, etc.
Exercise:
Present the class with a list of business types. Begin by brainstorming for a general list of consumer groups that can serve as niche groups. Then, divide the students into two groups. Have each group match a type of business presented to an appropriate niche market segment. Each student group is to support their mapping with an argument. As the discussion proceeds, remind the students of the importance of having a specific niche market segment streamlined by extensive market research in order to avoid loss.
Questions for Reflection:
· How does diversity apply to niche market segments?
· How does determining a niche market segment influence the forming of a marketing mix?
First-mover Strategies
Purpose:
To help students gain insight into the concept of first-mover strategy
Background:
This exercise is to make the students aware of the risks and advantages of opting this strategy
Relationship to Text:
First-mover strategy
Estimated Class Time:
15 minutes
Materials/Preparation:
None needed
Exercise:
Present to the students a particular industry and ask them to come up with an idea for a product that is fresh and unlike any that exists. Emphasize that the students need to conjure a product that has the potential to make them a pioneer in the industry. Then, have a few of the students present their ideas while pointing out the possible marketing risks in pursuing the product in question. Make sure to remind them of the critical thinking that is required when being innovative.
Questions for Reflection:
· What are some of the possible risks of being a first-mover in the market?
· Are innovations to be considered taboo in order to maintain market presence?
Planning Throughout the Organization
Purpose:
To highlight a key challenge in gathering information for strategic planning
Background:
Research clearly states that when your entire organization gathers and shares information, the planning process is more effective and better integrated into the organizational culture. But the best way to achieve full employee participation is much less clear. This exercise is designed to help students explore potential approaches to achieve more widespread information sharing.
Relationship to Text:
Planning at Different Organizational Levels
Estimated Class Time:
About 10 to15 minutes
Preparation/Materials
None needed
Exercise:
Ask your class why they think it is so difficult to achieve a free flow of information and ideas in most companies. As they share their thoughts, you may want to point out that money isn’t always the answer; in fact, offering money in exchange for ideas can spawn a counterproductive, competitive dynamic among employees at all levels. Ironically, technology doesn’t always help either. Joseph Priestley, a pioneer of modern science, summed up a common issue by observing, “The more elaborate our means of communication, the less we communicate.”
After a brief discussion, break your class into small teams and give about five minutes to brainstorm possible solutions. When you reconvene as a class, ask each group to share their best idea (possibilities usually range from hosting weekly planning lunches with all employees, to engaging Intranet approaches, to raising overall pay). This often leads to a helpful and spontaneous discussion about which method works best in which situation, and why.
Questions for Reflection:
· How does planning connect to corporate culture?
· Is employee participation likely to become more or less important as our economy evolves? Why?
Defining the Organization’s Mission and Objectives
Purpose:
To give students a personal perspective on mission statements
Background:
This exercise is designed to explore and articulate their personal “mission statements.” Typically it is both interesting and inspiring, and helps students understand how organizations use their mission statements to differentiate themselves and to guide their decision-making at a more visceral level.
Relationship to Text:
Defining the Organization’s Mission and Objectives
Estimated Class Time:
About 10 minutes
Preparation/Materials:
Each student will need paper and a pencil or pen.
Exercise:
Ask each student to spend a few moments writing a personal mission statement for his or her life. For the discussion to be effective, avoid providing many cues. You can let the discussion progress on its own and intervene to provide a direction when students get stuck. After about five minutes, ask for volunteers to share their statements. If no one volunteers, start by calling on a few people who tend to be articulate in class. The results can be staggering. And the discussion is typically spontaneous and lively—but if not, ask students to identify similarities and differences in their statements, possibly across gender, age, hometown, college major, or other demographic traits and lifestyle characteristics. What do their statements say about ethics, values, and locus of control? How do their personal missions influence their actions and decisions on a day-to-day basis? You may want to close by calling their attention to the obvious parallels between personal and organizational missions.
Questions for Reflection:
· What are the characteristics of a strong mission statement? (You might want to precede this question with some examples of corporate mission statements. Some possibilities: Merck—to preserve and improve human life; Mary Kay—to give unlimited opportunities for women.)
· Extend the exercise by asking each student to do a personal SWOT analysis, the logical next step in strategic planning.
Strategic Planning
Purpose:
To give your students hands-on experience with basic strategic planning for a very familiar entity—themselves!
Background:
Attempting to implement strategic planning, students often struggle to find the balance between an approach that’s too narrow and an approach that’s too broad. This exercise is designed to help students achieve the right balance by examining their personal strategic plans and zeroing in on both wide-range and detailed issues (while receiving some unexpected guidance from their peers about their careers).
Relationship to Text:
Strategic Planning
Estimated Class Time:
About 15 minutes
Preparation/Materials:
Each student will need paper and a pencil or pen
Exercise:
Ask students to write down a brief strategic mission statement for their careers, looking at the five-year horizon. From a professional standpoint, what do they aspire to be? Collect the papers, shuffle them, and redistribute them to the class. Ask each student to write a five-point strategic plan for the person whose paper he or she received. Each point in the plan should be no more than a sentence or two. Remind the class to be sure that all of their points are specific and measurable, and most importantly, will bring the student closer to the overall strategic goal. After about ten minutes, call on a handful of students and ask them to share their classmate’s goal and the five-step plan that they created.
Questions for Reflection:
· Was it easy or hard to write the plan? Why? Where did they have problems?
· How could a strategic plan help develop your career? Why?
· How does developing a personal strategic plan compare to developing a business strategic plan?
Formulating a Marketing Strategy
Purpose:
To help students explore strategic solutions for a contemporary marketing issue
Background:
Not surprisingly, fast-food restaurants are feeling under siege. Recent studies are highlighting health hazards across the U.S. and citing rampant obesity, child obesity, the dangers of trans fats, and more. As low-carb diets became popular, retail sales of french fries—a staple of fast-food restaurants—plummeted, dropping 2.9% in 2001, 3.3% in 2002, and 10% in 2003 (www.whybiotech.com). From a PR perspective, the documentary Super Size Me fanned the flames. This exercise is designed to help students explore potential solutions—and ethical implications—for this strategic challenge from the fast-food industry perspective.
Relationship to Text:
Formulating, Implementing, and Monitoring a Marketing Strategy
Estimated Class Time:
About 20 to 25 minutes
Preparation/Materials:
You may want to copy the background and the case situation for each student.
Exercise:
Divide your class into small groups and share with them the following case. Situation: You and your teammates are partners in the ownership of a medium-sized fast-food chain in the Midwest. You own 41 outlets, most of them in small towns. The mainstay of your menu is hamburgers and French fries, although you also offer a couple of sandwiches, chips, soft-serve ice cream, and sodas. Your most important customers are men aged 18-34 (they account for about 20 percent of your customers and about 55 percent of your sales), but since restaurant options are limited in most of the towns where you operate, you serve customers across a wide demographic range. Sales in the past two years have been dropping at an accelerating rate. You have to meet with your partners to discuss potential solutions. Give your class about 10 minutes to brainstorm options. Encourage them to consider all the possibilities including doing nothing (“This will all blow over ….”). Then, direct each group to choose their best option, and to identify the potential risks and benefits (e.g., if they made changes to attract new customers, will they alienate their current customers?). Reconvene as a class, and ask each group to report briefly to their peers. Which solution does the class like best? Why?
Questions for Reflection:
· What additional information do you need to formulate the best solution?
· What are the ethical implications of each choice?
· Should your personal perspective play a role in your strategic decision making? Why or why not? (You may want to preface this question by asking how many of your students eat fast food more than once a week.)
Promotion Strategy and Pricing Strategy
Purpose:
To explore the relationship between the promotional and pricing strategies
Background:
Clearly, all elements of the marketing mix are interrelated, so this exercise is designed to highlight the links between promotion and pricing
Relationship to Text:
Promotion Strategy and Pricing Strategy
Estimated Class Time:
About 15 minutes
Preparation/Materials:
Each student needs to have unlined paper and a pencil or pen
Exercise*:
Break your class into small groups. Ask each group to choose a good or a service that they all know and like, and to create two ads for that product: one that focuses on price, the other on the features and benefits of the product itself. (They can do print, radio, TV, or Internet ads, as long as both ads are designed for the same media.). Let them know upfront that they’ll need to present their ads to the class. When the teams present their ads, conduct a quick vote to see which ad the class liked better for each product. Keep a tally on the board showing each of the products and the winning type of ad. Results will vary significantly based on the product categories (and, of course, the creativity of the students). Follow-up discussion can be interesting, surprising, and fun. What type of ads worked best, and why? How did the product category and price affect the promotional strategy? Does the broader market reflect the findings of the class? Why or why not?
Questions for Reflection:
· What factors should a company consider when developing their pricing strategies?
· What about their promotional strategies? Why?
*This exercise was adapted from the text.
The Marketing Environment
Purpose:
To highlight the importance of the marketing environment
Background:
This quick, discussion-based exercise is designed to help students better understand the impact of the external environment on marketing decisions
Relationship to Text:
The Marketing Environment
Estimated Class Time:
About 10 minutes
Materials/Preparation:
None needed
Exercise:
Choose a branded product that your students seem to all know and enjoy. Higher-end products, such as an Apple iPod or a Burton snowboard seem to work especially well for this exercise. Guide your students in a discussion of how each element of the external environment—competitive, political-legal, economic, technological, and social-cultural—could influence the success of their product over the next five years. Encourage them to consider factors beyond the obvious (e.g., the emerging development of year-round snow-makers, or virtual reality snowboarding games). As you develop your list, you may want to also remind them that a marketer cannot control the external environment, but he or she must respond to it effectively.
Questions for Reflection:
· Which element of the marketing environment is most important? Why? Would the answer be different for different product categories?
· Which elements have the most impact on a marketer’s day-to-day decision-making? Which elements are likely to generate surprises? (You may want to point out how many companies were surprised by the bursting of the “dot-com” bubble in the 1990s.)
· What are effective ways to monitor the marketing environment on an ongoing basis?
BCG Matrix
Purpose:
To help students gain a fuller understanding of the BCG matrix as a planning tool
Background:
While the concept of the BCG matrix is straightforward, many students have trouble understanding how it applies to actual situations as an investment tool. This exercise is designed to foster a deeper understanding through a hands-on case study approach.
Relationship to Text:
BCG Matrix
Estimated Class Time:
About 25 minutes
Materials/Preparation:
None needed
Exercise:
Announce to your class that they will do a case study on the talent agency business (which most of them find more glamorous and exciting than it really is). Begin by brainstorming a list of movie stars, celebrities, and entertainers. Encourage the class to include a wide variety, from current box office draws, to over-the-hill talents, to emerging stars. Then, divide your students into small groups and tell them that each group represents a small talent agency. Their list includes the stars that you listed on the board. Give them each a hypothetical $10 million to invest in marketing the personalities in their stable of stars, and direct them to use the BCG Matrix to make their investment choices. Ask each group to present their allocation and rationale in terms of the matrix. You will probably find that they were tempted to invest big dollars in their “cash cows,” which makes for an interesting discussion.
Questions for Reflection:
· What are the strengths and weaknesses of the BCG Matrix as a strategic planning tool?
· What kind of information do you need in order to use this tool most effectively?
Chapter 2: Strategic Planning in Contemporary Marketing
TRUE/FALSE
1. The planning process identifies objectives and determines the actions that are needed to attain those objectives.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-1 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Knowledge
2. The planning process creates a blueprint that everyone in the organization must follow in order to achieve the organizational objectives.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-1 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Knowledge
3. The planning process is an intermittent process held after substantial intervals.
ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-1 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Knowledge
4. Marketing planning establishes the basis for a firm's overall strategic plan.
ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-1 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Knowledge
5. Relationship-building goals and strategies are seldom included in the plans of business firms.
ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-1 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Knowledge
6. Good relationships with customers can equip a firm with vital strategic weapons.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-1 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Knowledge
7. Strategic planning has a minimal impact on a firm's destiny because it provides only short-term direction to the decision makers.
ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-1 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Knowledge
8. Planning often is classified on the basis of its scope or breadth.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-1 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Knowledge
9. Tactical plans typically determine an organization’s primary strategic objectives and exclude short-term actions from their purview.
ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-1 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Knowledge
10. Tactical planning usually involves the production of quarterly and semiannual plans, along with divisional budgets, policies, and procedures.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-1 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Knowledge
11. Middle and supervisory-level managers spend less time as compared to CEOs on planning activities.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-1 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Knowledge
12. 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.
ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-1 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Knowledge
13. 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.
ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-2 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Knowledge
14. 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.
ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-2 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Knowledge
15. Employees at middle-management levels engage themselves in business unit budgets and divisional policies and procedures.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-2 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Knowledge
16. To be most effective, the planning process should include input from a wide range of sources both internal and external to the organization.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-2 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Knowledge
17. As the senior vice-president of marketing, Naomi will be closely involved in her firm’s strategic planning.
ANS: T PTS: 1 DIF: Difficulty: Challenging
OBJ: LO: 2-2 NAT: BUSPROG: Reflective Thinking
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Application
18. Supervisory managers tend to focus exclusively on strategic planning.
ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-2 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Knowledge
19. The planning process begins at the corporate level with the first step being the development of strategic objectives.
ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-2 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Steps in the Marketing Planning Process
KEY: Bloom's: Knowledge
20. Adjustments in the mission statement of an organization reflect changing business environments and management philosophies.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-3 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Defining the Organization's Mission and Objectives
KEY: Bloom's: Knowledge
21. Organizations within the same industry usually have the same mission.
ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-3 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Defining the Organization's Mission and Objectives
KEY: Bloom's: Knowledge
22. 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.
ANS: T PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-3 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Defining the Organization's Mission and Objectives
KEY: Bloom's: Comprehension
23. A firm describes its overall goals and operational scope in its standard operating procedures manual.
ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-3 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Defining the Organization's Mission and Objectives
KEY: Bloom's: Knowledge
24. A mission can be defined as an essential purpose that differentiates one company from others.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-3 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Defining the Organization's Mission and Objectives
KEY: Bloom's: Knowledge
25. A statement such as “to hit the 300 employee mark by the end of the year” is typically a part of a mission statement.
ANS: F PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-3 NAT: BUSPROG: Reflective Thinking
STA: DISC: Marketing Plan
TOP: A-Head: Defining the Organization's Mission and Objectives
KEY: Bloom's: Application
26. An organization lays out its basic objectives, or goals, in its complete mission statement.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-3 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Defining the Organization's Mission and Objectives
KEY: Bloom's: Knowledge
27. 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.”
ANS: T PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-3 NAT: BUSPROG: Reflective Thinking
STA: DISC: Marketing Plan
TOP: A-Head: Defining the Organization's Mission and Objectives
KEY: Bloom's: Application
28. An organizational objective should specify time frames stating “Our organization aims for the highest levels of sustainable development.”
ANS: T PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-3 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Defining the Organization's Mission and Objectives
KEY: Bloom's: Comprehension
29. Organizational resources include the capabilities of the firm’s production, marketing, finance, technology, and employees.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-3 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Defining the Organization's Mission and Objectives
KEY: Bloom's: Knowledge
30. 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.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-3 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Defining the Organization's Mission and Objectives
KEY: Bloom's: Knowledge
31. Each element of the marketing mix—product, price, distribution, and promotion—is a subset of the overall marketing strategy.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-3 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Defining the Organization's Mission and Objectives
KEY: Bloom's: Knowledge
32. Strategies once implemented should not be changed even if the actual performance does not meet the desired results.
ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-3 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Defining the Organization's Mission and Objectives
KEY: Bloom's: Knowledge
33. Marketers put the marketing strategy into action in order to monitor performance to ensure that objectives are being achieved.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-3 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Defining the Organization's Mission and Objectives
KEY: Bloom's: Knowledge
34. All planning strategies have the goal of creating a sustainable competitive advantage for a firm which other companies cannot imitate.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-4 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Knowledge
35. Porter’s Five Forces are potential new entrants, bargaining power of buyers, bargaining power of suppliers, threat of substitute products, and rivalry among competitors.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-4 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Knowledge
36. The Internet has impacted business for new firms by increasing the barriers to market entry.
ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-4 NAT: BUSPROG: Technology
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Knowledge
37. The number of suppliers available to a manufacturer or retailer affects the bargaining power of buyers.
ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-4 NAT: BUSPROG: Analytic STA: DISC: Strategy
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Knowledge
38. 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.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-4 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Knowledge
39. With increased availability of information, rivalry heats up among competitors who try to differentiate themselves from the crowd.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-4 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Knowledge
40. Apple iTunes is an example of a successful first mover.
ANS: T PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-4 NAT: BUSPROG: Reflective Thinking
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Application
41. Data suggests that business owners who adopt the first mover strategy will always be long-term market winners.
ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-4 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Knowledge
42. The idea of first movers being completely replaced by second movers and the resulting disappearance of first movers from the marketplace is a myth.
ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-4 NAT: BUSPROG: Analytic STA: DISC: Strategy
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Knowledge
43. 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.
ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-4 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Knowledge
44. A SWOT analysis helps planners compare internal organizational strengths and weaknesses with external opportunities and threats.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-4 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Knowledge
45. The disadvantage of core competencies is that they can be easily duplicated by competitors.
ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-4 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Knowledge
46. Matching an external opportunity with an internal weakness produces a situation known as leverage.
ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-4 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Knowledge
47. In a SWOT analysis, marketers face a problem when environmental threats attack their organization's weaknesses.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-4 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Knowledge
48. A strategic window is defined as a collection of situations where organizations are unable to capitalize on opportunities because of internal limitations.
ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-4 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Knowledge
49. A customer-driven organization begins its marketing strategy with a detailed description of its target market.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-5 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Elements of a Marketing Strategy
KEY: Bloom's: Knowledge
50. A target market is a group of customers toward whom a firm directs its marketing efforts.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-5 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Elements of a Marketing Strategy
KEY: Bloom's: Knowledge
51. Targeting consumers in specific global markets represents a challenge.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-5 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Elements of a Marketing Strategy
KEY: Bloom's: Knowledge
52. A marketing mix should be an ever-changing combination of variables to achieve success.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-5 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Elements of a Marketing Strategy
KEY: Bloom's: Knowledge
53. A product strategy includes decisions about customer service, package design, brand names, trademarks, patents, and warranties.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-5 NAT: BUSPROG: Analytic
STA: DISC: Distribution
TOP: A-Head: Elements of a Marketing Strategy
KEY: Bloom's: Knowledge
54. The ability to download Microsoft and IBM software products directly from the Internet is a part of each firms' pricing strategy.
ANS: F PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-5 NAT: BUSPROG: Reflective Thinking
STA: DISC: Distribution
TOP: A-Head: Elements of a Marketing Strategy
KEY: Bloom's: Application
55. Promotion is the communications link between sellers and buyers.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-5 NAT: BUSPROG: Analytic STA: DISC: Promotion
TOP: A-Head: Elements of a Marketing Strategy
KEY: Bloom's: Knowledge
56. The pricing strategy is the area of marketing that receives the least amount of public scrutiny.
ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-5 NAT: BUSPROG: Analytic STA: DISC: Pricing
TOP: A-Head: Elements of a Marketing Strategy
KEY: Bloom's: Knowledge
57. 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.
ANS: T PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-5 NAT: BUSPROG: Reflective Thinking STA: DISC: Promotion
TOP: A-Head: Elements of a Marketing Strategy
KEY: Bloom's: Application
58. The five dimensions of the marketing environment are competitive, political-legal, economic, technological, and social-cultural.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-5 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Elements of a Marketing Strategy
KEY: Bloom's: Knowledge
59. The five dimensions of the marketing environment exert a fairly constant and static influence on marketing strategies.
ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-5 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Elements of a Marketing Strategy
KEY: Bloom's: Knowledge
60. 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.
ANS: T PTS: 1 DIF: Difficulty: Challenging
OBJ: LO: 2-5 NAT: BUSPROG: Reflective Thinking
STA: DISC: Marketing Plan
TOP: A-Head: Elements of a Marketing Strategy
KEY: Bloom's: Application
61. The rule of three states that the third major company in an industry has little chance of survival.
ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-5 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Elements of a Marketing Strategy
KEY: Bloom's: Knowledge
62. Strategic business units are key business units within small companies that offer only a few items to its customers.
ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-6 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Methods for Marketing Planning
KEY: Bloom's: Knowledge
63. Strategic business units (SBUs) of a diversified firm have common managers, resources, objectives, and competitors.
ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-6 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Methods for Marketing Planning
KEY: Bloom's: Knowledge
64. Each strategic business unit (SBU) in a firm has to prepare its plans in collaboration with other units in the organization.
ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-6 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Methods for Marketing Planning
KEY: Bloom's: Knowledge
65. Each SBU pursues its own distinct mission and often develops its own plans independently.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-6 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Methods for Marketing Planning
KEY: Bloom's: Knowledge
66. The position of an SBU along the horizontal axis indicates the annual growth rate of the market.
ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-6 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Methods for Marketing Planning
KEY: Bloom's: Knowledge
67. According to the BCG matrix, stars require considerable inflows of cash to finance further growth.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-6 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Methods for Marketing Planning
KEY: Bloom's: Knowledge
68. According to the BCG matrix, cash cow businesses produce strong cash flows and invest heavily in the unit’s own promotions and production capacity.
ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-6 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Methods for Marketing Planning
KEY: Bloom's: Knowledge
69. 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.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-6 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Methods for Marketing Planning
KEY: Bloom's: Knowledge
70. According to the BCG matrix, dog products can be sold to other firms, where they are a better fit.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-6 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Methods for Marketing Planning
KEY: Bloom's: Knowledge
MULTIPLE CHOICE
1. 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. |
ANS: B PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-1 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Knowledge
2. 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 |
ANS: C PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-1 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Comprehension
3. 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. |
ANS: D PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-1 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Knowledge
4. 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. |
ANS: A PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-1 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Comprehension
5. 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. |
ANS: B PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-1 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Knowledge
6. 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. |
ANS: C PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-1 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Comprehension
7. 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 |
ANS: A PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-1 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Knowledge
8. 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 |
ANS: C PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-1 NAT: BUSPROG: Reflective Thinking
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Application
9. 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 |
| d. | long-term direction |
ANS: D PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-1 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Knowledge
10. 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 |
ANS: C PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-1 NAT: BUSPROG: Reflective Thinking
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Application
11. 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 |
ANS: A PTS: 1 DIF: Difficulty: Challenging
OBJ: LO: 2-1 NAT: BUSPROG: Reflective Thinking
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Application
12. 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 |
ANS: A PTS: 1 DIF: Difficulty: Challenging
OBJ: LO: 2-1 NAT: BUSPROG: Reflective Thinking
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Application
13. 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 |
ANS: D PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-1 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Knowledge
14. 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 |
ANS: B PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-1 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Knowledge
15. 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. |
ANS: C PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-1 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Knowledge
16. In the planning hierarchy, plans dealing with organization-wide objectives, long-term plans, and the total budget would be classified as _____ plans.
| a. | weekly |
| b. | tactical |
| c. | operational |
| d. | strategic |
ANS: D PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-1 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Knowledge
17. 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. |
ANS: B PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-1 NAT: BUSPROG: Reflective Thinking
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Application
18. 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. |
ANS: B PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-1 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Knowledge
19. 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. |
ANS: C PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-1 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Comprehension
20. General Electric’s NBC division acquired Universal Studios and the highest executive who approved this acquisition was most likely GE’s CEO. This decision is the direct result of _____ planning process at GE.
| a. | tactical |
| b. | strategic |
| c. | operational |
| d. | technological |
ANS: B PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-1 NAT: BUSPROG: Reflective Thinking
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Application
21. 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. |
ANS: A PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-2 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Steps in the Marketing Planning Process
KEY: Bloom's: Knowledge
22. 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 |
ANS: B PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-3 NAT: BUSPROG: Reflective Thinking
STA: DISC: Marketing Plan
TOP: A-Head: Defining the Organization's Mission and Objectives
KEY: Bloom's: Application
23. 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 |
| d. | Collection of limited periods during which key requirements of a market and a firm’s particular competencies best fit together |
ANS: C PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-3 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Defining the Organization's Mission and Objectives
KEY: Bloom's: Comprehension
24. 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. |
ANS: C PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-3 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Defining the Organization's Mission and Objectives
KEY: Bloom's: Comprehension
25. 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. |
ANS: D PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-3 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Defining the Organization's Mission and Objectives
KEY: Bloom's: Knowledge
26. 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 |
ANS: B PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-3 NAT: BUSPROG: Analytic STA: DISC: Strategy
TOP: A-Head: Defining the Organization's Mission and Objectives
KEY: Bloom's: Knowledge
27. 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. |
ANS: A PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-4 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Defining the Organization's Mission and Objectives
KEY: Bloom's: Knowledge
28. Business strategist Michael E. Porter identified five competitive forces that influence _____ in a model called Porter’s Five Forces.
| a. | planning strategies |
| b. | corporate social responsibility |
| c. | consumer behavior |
| d. | sustainable development |
ANS: A PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-4 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Knowledge
29. 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 |
ANS: A PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-4 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Knowledge
30. 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. |
ANS: A PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-4 NAT: BUSPROG: Reflective Thinking
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Application
31. 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. |
ANS: B PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-4 NAT: BUSPROG: Technology
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Comprehension
32. 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. |
ANS: D PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-4 NAT: BUSPROG: Reflective Thinking
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Application
33. 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. |
ANS: A PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-4 NAT: BUSPROG: Reflective Thinking
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Application
34. 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 |
ANS: C PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-4 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Comprehension
35. In addition to the four forces of the Five Forces Model, which of the following influences rivalry among competitors?
| 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 |
ANS: C PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-4 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Comprehension
36. 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 |
ANS: B PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-4 NAT: BUSPROG: Reflective thinking
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Application
37. 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 |
ANS: C PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-4 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Comprehension
38. 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. |
ANS: D PTS: 1 DIF: Difficulty: Challenging
OBJ: LO: 2-4 NAT: BUSPROG: Reflective thinking
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Application
39. Core competencies are capabilities that customers value and competitors:
| a. | can easily copy. |
| b. | tend to overestimate. |
| c. | find difficult to duplicate. |
| d. | undervalue. |
ANS: C PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-4 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Knowledge
40. 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. |
| c. | strength. |
| d. | threat. |
ANS: C PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-4 NAT: BUSPROG: Reflective Thinking
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Application
41. 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. |
ANS: B PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-4 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Knowledge
42. Matching an internal strength with an external opportunity produces a situation known as:
| a. | leverage. |
| b. | constraint. |
| c. | vulnerability. |
| d. | plateau. |
ANS: A PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-4 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Knowledge
43. 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. |
ANS: A PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-4 NAT: BUSPROG: Reflective thinking
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Application
44. 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. |
ANS: C PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-4 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Knowledge
45. Which of the following would qualify as an example of a firm’s weakness?
| 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 |
ANS: C PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-4 NAT: BUSPROG: Reflective thinking
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Application
46. 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. |
ANS: D PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-4 NAT: BUSPROG: Reflective Thinking
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Application
47. 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. |
ANS: A PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-4 NAT: BUSPROG: Reflective Thinking
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Application
48. 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 |
ANS: C PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-4 NAT: BUSPROG: Reflective thinking
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Application
49. 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. |
ANS: C PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-4 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Comprehension
50. 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. |
ANS: B PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-4 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Knowledge
51. 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. |
ANS: C PTS: 1 DIF: Difficulty: Challenging
OBJ: LO: 2-4 NAT: BUSPROG: Reflective Thinking
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Application
52. 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. |
ANS: D PTS: 1 DIF: Difficulty: Challenging
OBJ: LO: 2-4 NAT: BUSPROG: Reflective Thinking
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Application
53. 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 |
ANS: A PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-5 NAT: BUSPROG: Reflective Thinking
STA: DISC: Marketing Plan
TOP: A-Head: Elements of a Marketing Strategy
KEY: Bloom's: Application
54. 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 |
ANS: D PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-5 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Elements of a Marketing Strategy
KEY: Bloom's: Knowledge
55. 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. |
ANS: D PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-5 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Elements of a Marketing Strategy
KEY: Bloom's: Knowledge
56. 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. |
ANS: B PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-5 NAT: BUSPROG: Analytic STA: DISC: Product
TOP: A-Head: Elements of a Marketing Strategy
KEY: Bloom's: Comprehension
57. 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 |
ANS: A PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-5 NAT: BUSPROG: Reflective Thinking
STA: DISC: Marketing Plan
TOP: A-Head: Elements of a Marketing Strategy
KEY: Bloom's: Application
58. 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 |
| 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 |
ANS: B PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-5 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Elements of a Marketing Strategy
KEY: Bloom's: Comprehension
59. Decisions involving transportation, warehousing, inventory control, and order processing relate to the _____ strategy component.
| a. | pricing |
| b. | competitive |
| c. | product |
| d. | distribution |
ANS: D PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-5 NAT: BUSPROG: Analytic
STA: DISC: Distribution
TOP: A-Head: Elements of a Marketing Strategy
KEY: Bloom's: Knowledge
60. 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. |
ANS: D PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-5 NAT: BUSPROG: Analytic
STA: DISC: Distribution
TOP: A-Head: Elements of a Marketing Strategy
KEY: Bloom's: Knowledge
61. 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 |
ANS: B PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-5 NAT: BUSPROG: Reflective Thinking
STA: DISC: Distribution
TOP: A-Head: Elements of a Marketing Strategy
KEY: Bloom's: Application
62. 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 |
ANS: D PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-5 NAT: BUSPROG: Analytic STA: DISC: Promotion
TOP: A-Head: Elements of a Marketing Strategy
KEY: Bloom's: Knowledge
63. 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. |
ANS: D PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-5 NAT: BUSPROG: Analytic STA: DISC: Promotion
TOP: A-Head: Elements of a Marketing Strategy
KEY: Bloom's: Knowledge
64. Many companies use an approach called _____ to coordinate all promotional activities so that the consumer receives a unified and consistent message.
| a. | intra-organizational communications |
| b. | internal marketing strategies |
| c. | integrated marketing communications |
| d. | corporate communications |
ANS: C PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-5 NAT: BUSPROG: Analytic STA: DISC: Promotion
TOP: A-Head: Elements of a Marketing Strategy
KEY: Bloom's: Knowledge
65. 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 |
ANS: D PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-5 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Elements of a Marketing Strategy
KEY: Bloom's: Knowledge
66. 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 |
ANS: B PTS: 1 DIF: Difficulty: Challenging
OBJ: LO: 2-5 NAT: BUSPROG: Reflective thinking
STA: DISC: Marketing Plan
TOP: A-Head: Elements of a Marketing Strategy
KEY: Bloom's: Application
67. 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 |
ANS: C PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-5 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Elements of a Marketing Strategy
KEY: Bloom's: Knowledge
68. 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 |
ANS: D PTS: 1 DIF: Difficulty: Challenging
OBJ: LO: 2-5 NAT: BUSPROG: Reflective Thinking
STA: DISC: Marketing Plan
TOP: A-Head: Elements of a Marketing Strategy
KEY: Bloom's: Application
69. 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 |
ANS: A PTS: 1 DIF: Difficulty: Challenging
OBJ: LO: 2-5 NAT: BUSPROG: Reflective Thinking
STA: DISC: Marketing Plan
TOP: A-Head: Elements of a Marketing Strategy
KEY: Bloom's: Application
70. 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. |
ANS: B PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-6 NAT: BUSPROG: Reflective Thinking
STA: DISC: Marketing Plan
TOP: A-Head: Methods for Marketing Planning
KEY: Bloom's: Application
71. 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. |
ANS: C PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-6 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Methods for Marketing Planning
KEY: Bloom's: Knowledge
72. 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. |
ANS: C PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-6 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Methods for Marketing Planning
KEY: Bloom's: Comprehension
73. 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 |
ANS: D PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-6 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Methods for Marketing Planning
KEY: Bloom's: Knowledge
74. 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. |
| d. | performance in test markets before a full-scale rollout. |
ANS: A PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-6 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Methods for Marketing Planning
KEY: Bloom's: Knowledge
75. 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. |
ANS: C PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-6 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Methods for Marketing Planning
KEY: Bloom's: Knowledge
76. 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. |
ANS: A PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-6 NAT: BUSPROG: Reflective Thinking
STA: DISC: Marketing Plan
TOP: A-Head: Methods for Marketing Planning
KEY: Bloom's: Application
77. 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. |
ANS: C PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-6 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Methods for Marketing Planning
KEY: Bloom's: Knowledge
78. 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. |
ANS: C PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 2-6 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Methods for Marketing Planning
KEY: Bloom's: Comprehension
79. 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 |
ANS: A PTS: 1 DIF: Difficulty: Challenging
OBJ: LO: 2-6 NAT: BUSPROG: Reflective Thinking
STA: DISC: Marketing Plan
TOP: A-Head: Methods for Marketing Planning
KEY: Bloom's: Application
80. 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 |
ANS: B PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-6 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Methods for Marketing Planning
KEY: Bloom's: Knowledge
81. 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 |
ANS: C PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-6 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Methods for Marketing Planning
KEY: Bloom's: Knowledge
82. 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 |
ANS: D PTS: 1 DIF: Difficulty: Challenging
OBJ: LO: 2-6 NAT: BUSPROG: Reflective Thinking
STA: DISC: Marketing Plan
TOP: A-Head: Methods for Marketing Planning
KEY: Bloom's: Application
83. 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 |
ANS: C PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-6 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Methods for Marketing Planning
KEY: Bloom's: Knowledge
84. The product manager for a line of mousetraps informs the board of directors at the company’s annual 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. |
ANS: C PTS: 1 DIF: Difficulty: Challenging
OBJ: LO: 2-6 NAT: BUSPROG: Reflective Thinking
STA: DISC: Marketing Plan
TOP: A-Head: Methods for Marketing Planning
KEY: Bloom's: Application
MATCHING
Match each definition to the corresponding term.
| a. | planning | i. | marketing mix |
| b. | marketing planning | j. | product strategy |
| c. | strategic planning | k. | strategic business units |
| d. | tactical planning | l. | Porter’s Five Forces |
| e. | cash cows | m. | marketing strategy |
| f. | first mover strategy | n. | dogs |
| g. | SWOT analysis | o. | stars |
| h. | strategic window | p. | annual growth rate |
1. _____ is the process of anticipating future events and conditions and determining the best way to achieve organizational objectives.
2. The _____ process involves implementing planning activities devoted to achieving marketing objectives.
3. The process of determining an organization’s primary objectives and adopting courses of action that will achieve these objectives is known as _____.
4. Strategic planning is complemented by _____ which guides the implementation of activities specified in the strategic plan.
5. A _____ is the overall, companywide program for selecting a particular target market and then satisfying consumers in that market through the marketing mix.
6. The _____ is the blending of the four strategy elements to fit the needs and preferences of a specific target market.
7. _____ identifies five competitive forces that influence planning strategies.
8. 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.
9. _____ is a review that helps planners compare internal organizational strengths and weaknesses with external opportunities and threats.
10. Limited periods during which the key requirements of a market and the resources and skills of an organization best fit together are called the _____.
11. _____ primarily involves decisions concerning the goods and services to be offered by a firm.
12. _____ are key business units within diversified firms.
13. _____ represent units with high market shares in high-growth markets.
14. In the BCG matrix, the position of an SBU along the vertical axis indicates the _____ of the market.
15. _____ command high market shares in low-growth markets.
16. SBUs in the category of _____ promise poor future prospects, and marketers should withdraw from these businesses or product lines as quickly as possible.
1. ANS: A PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-1 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Knowledge
2. ANS: B PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-1 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Knowledge
3. ANS: C PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-1 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Knowledge
4. ANS: D PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-1 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Knowledge
5. ANS: M PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-3 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Defining the Organization's Mission and Objectives
KEY: Bloom's: Knowledge
6. ANS: I PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-3 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Defining the Organization's Mission and Objectives
KEY: Bloom's: Knowledge
7. ANS: L PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-4 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Knowledge
8. ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-4 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Knowledge
9. ANS: G PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-4 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Knowledge
10. ANS: H PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-4 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Knowledge
11. ANS: J PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-5 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Elements of a Marketing Strategy
KEY: Bloom's: Knowledge
12. ANS: K PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-6 NAT: BUSPROG: Analytic
STA: DISC: Marketing Plan
TOP: A-Head: Methods for Marketing Planning
KEY: Bloom's: Knowledge
13. ANS: O PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-6 NAT: BUSPROG: Analytic STA: DISC: Strategy
TOP: A-Head: Methods for Marketing Planning
KEY: Bloom's: Knowledge
14. ANS: P PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-6 NAT: BUSPROG: Analytic STA: DISC: Strategy
TOP: A-Head: Methods for Marketing Planning
KEY: Bloom's: Knowledge
15. ANS: E PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-6 NAT: BUSPROG: Analytic STA: DISC: Strategy
TOP: A-Head: Methods for Marketing Planning
KEY: Bloom's: Knowledge
16. ANS: N PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-6 NAT: BUSPROG: Analytic STA: DISC: Strategy
TOP: A-Head: Methods for Marketing Planning
KEY: Bloom's: Knowledge
ESSAY
1. Define and explain the term “planning” in the context of marketing.
ANS:
Planning is the process of anticipating future events and conditions and determining the best way to achieve organizational objectives. Planning is a continuous process that includes identifying objectives and then determining the actions through which a firm can attain those objectives. The planning process creates a blueprint for marketers, executives, production staff, and everyone else in the organization to follow for achieving organizational objectives. It also defines checkpoints so that people within the organization can compare actual performance with expectations to indicate whether current activities are moving the organization toward its objectives. Before marketing planning begins, an organization must define its objectives.
PTS: 1 DIF: Difficulty: Easy OBJ: LO: 2-1
NAT: BUSPROG: Analytic STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Knowledge
2. Define marketing planning.
ANS:
Marketing planning is the process of implementing planning activities devoted to achieving the marketing objectives. It establishes the basis for a marketing strategy. Product lines, pricing decisions, selection of appropriate distribution channels, and decisions relating to promotional campaigns all depend on plans formulated within the marketing organization.
PTS: 1 DIF: Difficulty: Easy OBJ: LO: 2-1
NAT: BUSPROG: Analytic STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Knowledge
3. How does planning differ at various levels of organizational management?
ANS:
| a) | Top managers spend greater proportions of their time engaged in strategic planning than managers at middle and supervisory levels. |
| b) | Middle-level managers tend to focus on operational planning, which involves creating and implementing tactical plans for their own departments. |
| c) | Supervisory personnel engage in developing daily and weekly programs for meeting the goals in their areas of responsibility. |
PTS: 1 DIF: Difficulty: Easy OBJ: LO: 2-1
NAT: BUSPROG: Analytic STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Knowledge
4. Describe the aspects of strategic and tactical planning.
ANS:
Strategic planning is the process of determining an organization's primary objectives and adopting courses of action that will achieve these objectives.
Strategic planning has a critical impact on the organization's destiny because it provides long-term direction for its decision makers.
Tactical planning guides the implementation of activities specified in the strategic plan.
Tactical plans are usually shorter in duration than strategic plans and focus on current and near-future activities that a firm must complete to implement the larger strategies.
PTS: 1 DIF: Difficulty: Easy OBJ: LO: 2-1
NAT: BUSPROG: Analytic STA: DISC: Marketing Plan
TOP: A-Head: Marketing Planning: The Basis for Strategy and Tactics
KEY: Bloom's: Knowledge
5. Distinguish between an organization’s mission and its objectives. Provide an example of each.
ANS:
An organization’s mission is its essential purpose that differentiates it from other organizations. An example of a mission statement is: “To be regarded as the quality and market leader of the hotel industry worldwide.”
Objectives are organizational goals and guide the development of supporting marketing objectives and plans. Well-conceived objectives should state relatively specific intentions. An example of an objective is: “attain a 20 percent share of the market by 2010.”
PTS: 1 DIF: Difficulty: Moderate OBJ: LO: 2-3
NAT: BUSPROG: Analytic STA: DISC: Marketing Plan
TOP: A-Head: Defining the Organization's Mission and Objectives
KEY: Bloom's: Comprehension
6. What is a marketing strategy? Explain the process of implementing the marketing strategy into action.
ANS:
A marketing strategy is an overall, companywide program for selecting a particular target market and then satisfying consumers in that market through a careful blending of the elements of the marketing mix—product, distribution, promotion, and price—each of which is a component of the overall marketing strategy.
In the two final steps of the planning process, marketers put the marketing strategy into action; then they monitor performance to ensure that objectives are achieved. Sometimes strategies need to be modified if the product’s or company’s actual performance is not in line with expected results.
PTS: 1 DIF: Difficulty: Easy OBJ: LO: 2-3
NAT: BUSPROG: Analytic STA: DISC: Marketing Plan
TOP: A-Head: Defining the Organization's Mission and Objectives
KEY: Bloom's: Knowledge
7. Describe the structure and dynamics of Porter’s Five Forces model. How has the Internet affected the operation of this model?
ANS:
Michael E. Porter identified five competitive forces that influence planning strategies in a model called Porter’s Five Forces. They are potential new entrants, the bargaining power of buyers, the bargaining power of suppliers, threat of substitute products, and rivalry among competitors. The first four forces influence the fifth force.
Potential new entrants are sometimes blocked by the cost or difficulty of entering a market. The Internet has reduced the barriers to market entry in many industries. If customers have considerable bargaining power, they can greatly influence a firm’s strategy. The Internet can increase a customer’s buying power by providing information that might not otherwise be easily accessible. The number of suppliers available to a manufacturer or retailer affects their bargaining power. If customers have the opportunity to replace a company’s products with goods or services from a competing firm or industry, the company’s marketers may have to find a new market, change prices, or compete in other ways to maintain an advantage. The four previous forces influence the rivalry among competitors. In addition, issues such as cost and differentiation or lack of differentiation of products—along with the Internet—influence the strategies that companies use to stand out from their competitors. With increased availability of information, which tends to level the playing field, rivalry heats up among competitors, who try to differentiate themselves from the crowd.
The Internet has increased the speed and availability of information that the customers, suppliers, and competitors can use to make decisions. This leads to leveling of the competitive playing field which, in turn, increases the marketing challenge to stand out from the pack of competitors.
PTS: 1 DIF: Difficulty: Moderate OBJ: LO: 2-4
NAT: BUSPROG: Analytic STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Comprehension
8. Explain the forces that influence the rivalry among competitors in Porter’s Five Forces Model.
ANS:
The four forces of Porter Five Forces Model including potential new entrants, bargaining power of buyers, bargaining power of suppliers, and threat of substitute products influence the rivalry among competitors. In addition, issues such as cost and differentiation or lack of differentiation of products—along with the Internet—influence the strategies that companies use to stand out from their competitors. With increased availability of information, which tends to level the playing field, rivalry heats up among competitors who try to differentiate themselves from the crowd.
PTS: 1 DIF: Difficulty: Easy OBJ: LO: 2-4
NAT: BUSPROG: Analytic STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Knowledge
9. Explain the difference between a first-mover and a second-mover strategy. Give examples of companies that have followed each strategy.
ANS:
The first-mover strategy is based on the notion that the company who is first to offer a product in the marketplace will capture the greatest market share and be the long-term winner. Being the first can also refer to entering new markets with existing products or creating significant innovations that effectively turn an old product into a new one. An example of a successful first mover is eBay. The second-mover strategy, on the other hand, is based on the notion that the best way to gain advantage in the marketplace is to closely observe the innovations of first movers and then improve on them. Microsoft is famous for adopting a second-mover strategy.
PTS: 1 DIF: Difficulty: Moderate OBJ: LO: 2-4
NAT: BUSPROG: Analytic STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Comprehension
10. Define SWOT analysis and explain its importance.
ANS:
SWOT analysis is an important strategic planning tool that assists planners in their planning task.
| a) | SWOT stands for strengths, weaknesses, opportunities, and threats. The analysis provides managers with a critical view of an organization's internal and external environment and helps them evaluate the firm’s fulfillment of its basic mission. |
| b) | The analysis allows planners to match the firm's internal strengths with external opportunities to secure organizational leverage in the marketplace. |
| c) | It further assists the firm in recognizing internal weaknesses that might prevent capitalizing on opportunities, which would constrain its activities. |
| d) | SWOT analysis aids in the identification of environmental threats to the firm's strengths that could lead to vulnerabilities. |
| e) | Finally, SWOT analysis helps spot internal weaknesses that environmental threats might attack, which would present the firm with problems. |
PTS: 1 DIF: Difficulty: Easy OBJ: LO: 2-4
NAT: BUSPROG: Analytic STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Knowledge
11. What is a strategic window? Give an example of a strategic window that exists today.
ANS:
A strategic window is a limited period during which the key requirements of a market and the particular competencies of a firm best fit together.
The growth of China has increased the number of strategic windows as their demand for products increases. The auto industry, in particular, is facing a strategic window as the demand for automobiles rises in the Chinese market.
PTS: 1 DIF: Difficulty: Moderate OBJ: LO: 2-4
NAT: BUSPROG: Reflective Thinking STA: DISC: Marketing Plan
TOP: A-Head: Successful Strategies: Tools and Techniques
KEY: Bloom's: Application
12. Describe the basic elements of a marketing strategy.
ANS:
Success for a product in the marketplace—whether it is a tangible good, a service, a cause, a person, a place, or an organization—depends on an effective marketing strategy. An effective marketing strategy reaches the right buyers at the right time, persuades them to try the product, and develops a strong relationship with them over time. The basic elements of a marketing strategy consist of (1) the target market and (2) the marketing mix variables of product, distribution, promotion, and price that combine to satisfy the needs of the target market.
PTS: 1 DIF: Difficulty: Easy OBJ: LO: 2-5
NAT: BUSPROG: Analytic STA: DISC: Marketing Plan
TOP: A-Head: Elements of a Marketing Strategy
KEY: Bloom's: Knowledge
13. What is a marketing mix? In order for a product to succeed, what can be said about the variables in the marketing mix?
ANS:
The marketing mix variables - product, distribution, promotion, and price - are combined to satisfy the needs of the target market. Product is a broad concept encompassing goods, services and ideas, but also including the satisfaction of all consumer needs with respect to the relevant good, service, or idea. Distribution refers to getting products to consumers in the right quantities, at the right place, and at the right times. Promotion refers to the communications that link buyers and sellers. Pricing deals with the means of setting justifiable and profitable prices.
Successful products have a marketing mix where all variables are on target. Great pricing, product, and promotion mean nothing if the customer cannot find the product. Lack of promotion could leave a great product gathering dust on retail shelves.
PTS: 1 DIF: Difficulty: Easy OBJ: LO: 2-5
NAT: BUSPROG: Analytic STA: DISC: Marketing Plan
TOP: A-Head: Elements of a Marketing Strategy
KEY: Bloom's: Knowledge
14. What does a distribution strategy involve? Define two marketing channels.
ANS:
Marketers develop distribution strategies to ensure that consumers find their products in the proper quantities at the right times and places. Distribution decisions involve modes of transportation, warehousing, inventory control, order processing, and selection of marketing channels. Marketing channels are intermediaries that may be involved in a product’s movement from the producer to the final consumers. Technology continually opens new channels of distribution in many industries. The Internet has caused the biggest revolution in distribution since the mail-order catalog.
Two important types of marketing channels are wholesalers and retailers.
PTS: 1 DIF: Difficulty: Moderate OBJ: LO: 2-5
NAT: BUSPROG: Analytic STA: DISC: Distribution
TOP: A-Head: Elements of a Marketing Strategy
KEY: Bloom's: Knowledge
15. Discuss pricing strategy in the marketing mix and its relevance in the changing economy.
ANS:
Pricing strategy deals with the methods of setting profitable and justifiable prices. It is closely regulated and subject to considerable public scrutiny. One of the many factors that influence a marketer’s pricing strategy is competition.
A good pricing strategy should create value for customers, building and strengthening their relationship with a firm and its products. But sometimes conditions in the external marketing environment cause difficulties in pricing strategies. Political unrest overseas, the soaring price of fuel, or a freeze that destroys crops could all affect the price of goods and services.
If the economy is booming, consumers generally have more confidence and are willing to shop more often and pay more for discretionary goods. But when the economy takes a downturn, consumers look for bargains—they want high quality at low prices. It is a challenge for marketers to strike the right balance in order to make enough profits to survive and grow.
PTS: 1 DIF: Difficulty: Easy OBJ: LO: 2-5
NAT: BUSPROG: Analytic STA: DISC: Strategy
TOP: A-Head: Elements of a Marketing Strategy
KEY: Bloom's: Knowledge
16. List the environmental characteristics that influence strategic decisions. What is the ‘rule of three?’ Provide an example of this phenomenon.
ANS:
Marketers do not make decisions about target markets and marketing mix variables in a vacuum. They must take into account the dynamic nature of the five dimensions of the marketing environment, i.e., competitive, political-legal, economic, technological, and social-cultural factors.
In the competitive environment, some experts have coined the phrase ‘rule of three,’ meaning that in any industry, the three strongest, most efficient companies dominate between 70 and 90 percent of the competitive market. For example, the pharmaceutical industry is dominated by Merck, Pfizer, and Bristol-Myers Squibb.
PTS: 1 DIF: Difficulty: Easy OBJ: LO: 2-5
NAT: BUSPROG: Analytic STA: DISC: Marketing Plan
TOP: A-Head: Elements of a Marketing Strategy
KEY: Bloom's: Knowledge
17. Describe the strategic business unit concept.
ANS:
Strategic business units (SBUs) are key business units within diversified firms. Each SBU has its own managers, resources, objectives, and competitors. A division, product line, or single product may define the boundaries of an SBU. Each SBU pursues its own distinct mission and often develops its own plans independently of other units in the organization. Strategic business units, also called categories, focus the attention of company managers so that they can respond effectively to changing consumer demand within limited markets. Companies may have to redefine their SBUs as market conditions dictate.
PTS: 1 DIF: Difficulty: Easy OBJ: LO: 2-6
NAT: BUSPROG: Analytic STA: DISC: Strategy
TOP: A-Head: Methods for Marketing Planning
KEY: Bloom's: Knowledge
18. Describe the market share/market growth matrix.
ANS:
The market share/market growth matrix places business units in a four-quadrant chart that plots market share - the percentage of the market the firm controls - against market growth potential.
Stars are units with high market shares and high growth potential. The firm should invest more funds for future growth.
Cash cows are units with high market shares but low growth potential. They generate strong cash flows that should be used to finance the growth of stars.
Question marks are units with low market shares but high growth potential. The firm needs to watch these units carefully, making prudent investment decisions. These units typically use more cash than they generate.
Dogs are units with low market shares and low growth potential. These units are least attractive and the firm should consider withdrawal.
PTS: 1 DIF: Difficulty: Easy OBJ: LO: 2-6
NAT: BUSPROG: Analytic STA: DISC: Marketing Plan
TOP: A-Head: Methods for Marketing Planning
KEY: Bloom's: Knowledge
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