MKT 200 COMPLETE UNIT ASSIGNMENT

Chapter 2—Strategic Planning for Competitive Advantage TRUE/FALSE 1. The manufacturer of Macho brand martial arts products was implementing a strategic plan when it sponsored a local karate tournament for teenagers. ANS: F Such a short-range decision is typically a tactical plan or operating decision, not a strategic plan. PTS: 1 REF: 25 OBJ: 02-1 TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy MSC: BLOOMS Level III Application 2. In theory, an SBU should have its own resources for handling basic business functions. ANS: T PTS: 1 REF: 26 OBJ: 02-2 TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy MSC: BLOOMS Level I Knowledge 3. When the Walt Disney Company opened Disneyland Paris for the French market, it was an example of market penetration. ANS: F Market penetration is the strategy of selling more to the existing customers. This is an example of a market development strategy, which is attracting new customers to existing products. PTS: 1 REF: 27 OBJ: 02-3 TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy MSC: BLOOMS Level III Application 4. A market penetration strategy entails the creation of new products for current customers. ANS: F This is an example of product development strategy. A market penetration strategy in one that tries to increase market share among existing customers. PTS: 1 --REF: 27 OBJ: 02-3 TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy MSC: BLOOMS Level I Knowledge 5. The Home Depot’s purchase of Hughes Supply Company allows it to better meet the needs of its current business customers. This is an example of product development. ANS: T PTS: 1 REF: 27 OBJ: 02-3 TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy MSC: BLOOMS Level III Application 6. When a florist shop begins to sell burial caskets to its customers, it is engaged in product development. ANS: T Product development is the offering of new products to current markets. PTS: 1 REF: 27 OBJ: 02-3 TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy MSC: BLOOMS Level III Application 7. A diversification strategy entails increasing sales by introducing new products into new markets. ANS: T PTS: 1 REF: 27-28 OBJ: 02-3 TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy MSC: BLOOMS Level I Knowledge 8. A portfolio model is a tool for allocating resources among products or strategic business units on the basis of relative market share and degree of innovation. ANS: F A portfolio model is based on relative market share and market growth rate. PTS: 1 REF: 28 OBJ: 02-3 TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy MSC: BLOOMS Level I Knowledge 9. In the portfolio mix, notebook computers would be an example of a star. ANS: T A star is a market leader that is growing fast. PTS: 1 REF: 28 OBJ: 02-3 TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy MSC: BLOOMS Level III Application 10. The harvest strategy is appropriate for all SBUs except dogs. ANS: F The harvest strategy is appropriate for all SBUs except stars. PTS: 1 REF: 30 OBJ: 02-3 TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy MSC: BLOOMS Level II Comprehension 11. In the General Electric model, SBUs that have low overall attractiveness should be avoided if the organization is not already serving them. ANS: T PTS: 1 REF: 30 OBJ: 02-3 TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy MSC: BLOOMS Level II Comprehension 12. The marketing plan is a written document that acts as a guidebook of marketing activities for a marketing manager. ANS: T PTS: 1 REF: 31 OBJ: 02-3 TOP: AACSB Reflective Thinking KEY: CB&E Model Marketing Plan MSC: BLOOMS Level I Knowledge 13. A firm's mission statement should answer the question, "What products do we produce best?" ANS: F Mission statements should not focus on specific product offerings but on the market or markets served. PTS: 1 REF: 32 OBJ: 02-4 TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy MSC: BLOOMS Level II Comprehension 14. A production costs analysis could be a part of a company’s SWOT analysis. ANS: T PTS: 1 REF: 33 OBJ: 02-5 TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy MSC: BLOOMS Level IV Analysis 15. Environmental scanning entails the collection and interpretation of information about factors in the external environment that may affect the future of the organization or the implementation of the marketing plan. ANS: T PTS: 1 REF: 33 OBJ: 02-5 TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy MSC: BLOOMS Level II Comprehension 16. A competitive advantage is the set of unique features of a company and its products that are perceived by the target market as significant and superior to the competition. ANS: T PTS: 1 REF: 34 OBJ: 02-6 TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy MSC: BLOOMS Level II Comprehension 17. Developing a cost competitive advantage can enable a firm to deliver superior customer value. ANS: T PTS: 1 REF: 34 OBJ: 02-6 TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy MSC: BLOOMS Level VI Evaluation 18. As marketers gain more experience in marketing a product, costs tend to decrease, which is an example of the maturity effect. ANS: F This is an example of the experience curve effect, which means costs decline at a predictable rate as experience with a product increases. PTS: 1 REF: 34 OBJ: 02-6 TOP: AACSB Reflective Thinking KEY: CB&E Model Product MSC: BLOOMS Level IV Analysis 19. Niche competitive advantages are difficult to develop and consequently are quite rare. ANS: F The text lists several examples of how companies have created niche competitive advantages. PTS: 1 REF: 35 OBJ: 02-6 TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy MSC: BLOOMS Level II Comprehension 20. To be useful, marketing objectives should be realistic, measurable, time specific, and based on sales. ANS: F The four criteria for useful marketing objectives are: realistic, measurable, time specific, and compared to a benchmark. They do not have to be based on sales. PTS: 1 REF: 37 OBJ: 02-7 TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy MSC: BLOOMS Level II Comprehension 21. The company's marketing objective is to increase sales next year. This is an example of a well-stated objective. ANS: F This marketing objective is not measurable or compared to a benchmark. PTS: 1 REF: 37 OBJ: 02-7 TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy MSC: BLOOMS Level III Application 22. Marketing strategy involves the activities of selecting and describing one or more target markets and developing and maintaining a marketing mix that will produce mutually satisfying exchanges with target markets. ANS: T PTS: 1 REF: 38 OBJ: 02-8 TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy MSC: BLOOMS Level I Knowledge 23. The development of a target market strategy begins with a marketing audit. ANS: F The development of a target market strategy begins with a market opportunity analysis (MOA). PTS: 1 REF: 38 OBJ: 02-8 TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy MSC: BLOOMS Level II Comprehension 24. The four Ps of the marketing mix are product, planning, promotion, and price. ANS: F The four Ps are product, place, promotion, and price PTS: 1 REF: 39 OBJ: 02-9 TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy MSC: BLOOMS Level II Comprehension 25. Typically, the development of the marketing mix starts with determining the promotion for a product. ANS: F The development of the marketing mix begins with the product. PTS: 1 REF: 39 OBJ: 02-9 TOP: AACSB Reflective Thinking KEY: CB&E Model Product MSC: BLOOMS Level II Comprehension 26. The implementation process can be described as simply “doing what you said you were going to do.” ANS: T PTS: 1 REF: 42-43 OBJ: 02-10 TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy MSC: BLOOMS Level II Comprehension 27. Evaluation entails gauging the extent to which marketing objectives have been achieved during the specified time period. ANS: T PTS: 1 REF: 43 OBJ: 02-10 TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy MSC: BLOOMS Level I Knowledge 28. A marketing audit helps management allocate marketing resources efficiently. ANS: T PTS: 1 REF: 44 OBJ: 02-10 TOP: AACSB Reflective Thinking KEY: CB&E Model Marketing Plan MSC: BLOOMS Level II Comprehension 29. Strategic planning is most effective when managers view it as an annual exercise. ANS: F Strategic planning requires creativity and an ongoing commitment, not just going through the motions once a year. PTS: 1 REF: 45 OBJ: 02-11 TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy MSC: BLOOMS Level VI Evaluation 30. The most critical element for successful strategic planning is top management's support and participation. ANS: T PTS: 1 REF: 45 OBJ: 02-11 TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy MSC: BLOOMS Level VI Evaluation MULTIPLE CHOICE 1. is the managerial process of creating and maintaining a fit between the organization's objectives and resources and the evolving market opportunities. a. Tactical management b. The market audit c. Functional planning d. Environmental scanning e. Strategic planning ANS: E PTS: 1 REF: 25 OBJ: 02-1 TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy MSC: BLOOMS Level I Knowledge 2. Strategic plans require: a. long-term resource commitments b. a change in organizational structure c. the addition of new personnel d. new product development e. changes in prices ANS: A The goal of strategic planning is long-run profitability and growth. Thus, strategic decisions require long-term commitments of resources. PTS: 1 REF: 25 OBJ: 02-1 TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy MSC: BLOOMS Level VI Evaluation 3. With hospitals nationwide facing budget cuts and slimmer profit margins, Dekalb County's Medical Center decided to cash in on one of the most consistently profitable services—delivering babies. It initiated a three-year project to build a $55 million state-of-the-art women's center with 18 labor and delivery suites. When the hospital decided to commit its resources to obstetrics, it was engaging in: a. benchmarking b. alternative problem solving c. strategic planning d. portfolio evaluation e. tactical control ANS: C Strategic planning provides a long-term vision and thus guides long-term commitment of resources. PTS: 1 REF: 25 OBJ: 02-1 TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy MSC: BLOOMS Level III Application 4. Since gas prices have soared and consumers have cut back on their spending on new trucks and SUVs Ford Motor Corporation is transforming several of its plants to create small cars. Ford has engaged in: a. benchmarking b. tactical resource realignment c. alternative selection d. portfolio evaluation e. strategic planning ANS: E Strategic planning provides a long-term vision and thus guides long-term commitment of resources. PTS: 1 REF: 25 OBJ: 02-1 TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy MSC: BLOOMS Level III Application 5. A subgroup of a single business or a collection of related businesses within the larger organization is called a(n): a. conglomerate b. joint venture c. strategic business unit (SBU) d. oligarchy e. strategic alliance ANS: C This is the definition of an SBU. PTS: 1 REF: 26 OBJ: 02-2 TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy MSC: BLOOMS Level I Knowledge 6. When properly created, an SBU has all of the following characteristics EXCEPT: a. plans independent of the other SBUs in the total organization b. control over its own resources c. a distinct mission d. no competitors e. a specific target market ANS: D When properly created, an SBU has a number of characteristics, including its own competitors. PTS: 1 REF: 26 OBJ: 02-2 TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy MSC: BLOOMS Level II Comprehension 7. Yildiz Holding of Turkey purchased Godiva Chocolates from Campbell’s Soup Company. Campbell’s sold one of its: a. strategic business units (SBUs) b. strategic alliances c. action programs d. transactional units e. synergistic divisions ANS: A An SBU is a subgroup of a single business or a collection of related businesses within the larger organization. PTS: 1 REF: 26 OBJ: 02-2 TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy MSC: BLOOMS Level III Application 8. Until spun off in 2007, Kraft was part of Altria Group, Inc. Kraft had its own management team, mission statement, and target markets different from Altria Group, Inc. Kraft was a of Altria Group, Inc. a. joint venture b. diversified division c. heterogeneous element d. strategic alliance e. strategic business unit ANS: E An SBU usually has its own mission statement, target markets, and separate functional departments. PTS: 1 REF: 26 OBJ: 02-2 TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy MSC: BLOOMS Level III Application 9. General Electric has a financing business called GE Capital, which has its own mission, products, services, and strategic plans separate from the parent organization. GE Capital is an example of a(n): a. organizational level b. SWOT c. secure business unit d. diversified division e. strategic business unit ANS: E An SBU is a subgroup of a single business or collection of related businesses within a larger organization. PTS: 1 REF: 26 OBJ: 02-2 TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy MSC: BLOOMS Level III Application 10. Which of the following is a type of strategic alternative that tries to increase market share among existing customers? a. Vertical integration b. Product penetration c. Divestment d. Horizontal integration e. Market penetration ANS: E PTS: 1 REF: 27 OBJ: 02-3 TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy MSC: BLOOMS Level I Knowledge 11. All of the following are strategic alternatives that match products with markets EXCEPT: a. product development b. market penetration c. product penetration d. diversification e. market development ANS: C The four strategic alternatives that match products with markets are market penetration, market development, product development, and diversification. PTS: 1 REF: 27-28 OBJ: 02-3 TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy MSC: BLOOMS Level IV Analysis 12. is a strategy of increasing market share for present products in existing markets. a. Market penetration b. Product development c. Market development d. Diversification e. Product penetration ANS: A PTS: 1 REF: 27 OBJ: 02-3 TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy MSC: BLOOMS Level I Knowledge 13. Market penetration occurs when: a. a supermarket adds a new store b. a U.S.-based company begins to sell its products in China c. Motown records sells DVDs to Wal-Mart d. Yoplait yogurt sends coupons to its existing customers e. 3M distributes breathe-right nasal strips in Europe ANS: D Market penetration is the marketing of the same product to current customers. PTS: 1 REF: 27 OBJ: 02-3 TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy MSC: BLOOMS Level III Application 14. Kraft foods created a magazine full of recipes and coupons for customers as well as a Web site with product and recipe information. The goal was to get current customers to purchase more of Kraft’s products. These activities are representative of a strategy. a. diversification b. product development c. market development d. market penetration e. product penetration ANS: D Selling more of the same product to existing markets is market penetration. PTS: 1 REF: 27 OBJ: 02-3 TOP: AACSB Reflective Thinking KEY: CB&E Model Strategy MSC: BLOOMS Level III Application 15. is a strategy that attempts to attract new customers to existing