Marketing Management 2nd Edition By Marshall - Test Bank

Chapter 02 Elements of Marketing Strategy, Planning, and Competition True / False Questions 1. Value is defined by the customer. True False 2. A benefit is some type of utility that a company and its products provide for customers. True False 3. Starbucks is known to have shops located across the street from each other. It appears that the coffee shop chain is offering place utility. True False 4. Samsung's first value proposition when the brand was launched in the United States was price and functionality. True False 5. The value proposition relates to the price of a product. True False 6. Firms should not be concerned that satisfied customers will switch to another brand. True False 7. The two parts of the value equation are benefits and cost. True False 8. Outbound logistics refer to the distribution of products. True False 9. As long as all activities in the value chain are working well, managers do not need to be concerned with aligning the activities. True False 10. The last step in the value chain is margin. True False 11. Marketing (little m) serves as the driver of business strategy. True False 12. According to the BCG matrix, a business that is classified as a star has high growth and low market share. True False 13. Linda imports fine art paintings and photographs that she sells to hotels. When the dollar is weak against foreign currencies, she struggles to cover her costs. Business has increased 400% in the last five years. With additional resources, she believes she can expand into the profitable hospital and senior assisted living housing markets. According to the BGC matrix, Linda's business is a dog. True False 14. The GE Business Screen portfolio model evaluates businesses on the dimensions of market attractiveness and market share. True False 15. The GE Business Screen model assesses the firm's ability to compete. Business position looks at factors like government regulations, sensitivity to economic trends, and size of the market. True False 16. A mission statement does not include a discussion of the firm's strategic vision. True False 17. Objectives are measurable; goals are broad statements of generally desired accomplishments in support of the firm's mission statement. True False 18. The Sarbanes-Oxley Act of 2002 established specific procedures to ensure ethical conduct at the highest levels of the company, including the board of directors. True False 19. Strategy has two key phases: formulation and execution. True False 20. Companies in some business cultures based outside the United States seem to have less pressure to achieve high levels of growth. True False 21. A firm's competitive strategy leads it to decide if it can grow and if not, how to survive through stability or retrenchment. True False 22. Market penetration strategies allow the firm to introduce existing products to new customers, often including international markets. True False 23. Market development strategies allow the firm to invest additional resources to have existing customers consume new products. True False Multiple Choice Questions 24. Value may be defined as the ratio of bundled benefits received to the cost incurred by the customer to receive those benefits. ________ is not thought of as one of the costs. A. Monetary cost B. Time to shop C. Convenience D. Poor service quality E. The hassle factor 25. Form utility is ­­­­________. A. Marketing's task in creating an offering that has value B. Production's task in creating an offering that has value C. The firm's task in deciding where to distribute the product D. Both marketing's task in creating an offering that has value and production's task in creating an offering that has value E. Both marketing's task in creating an offering that has value and the firm's task in deciding where to distribute the product 26. Gabrielle and Juan have a vacation home 90 miles from their primary residence. They could haul bags of groceries and an ice chest of refrigerated foods with them when they leave home. However, they like to grocery shop at a market located near the vacation spot. It offers them ______________ utility. A. Time B. Form C. Ownership and form D. Form and time E. Place 27. Ryan pays a market rate to take his young children to daycare that is run by his employer. It is open until 7:00 p.m., a time by which everyone leaves. This service offered by his company offers ________________ utility. A. Time B. Form C. Place D. Form and ownership E. Time and place 28. Shabreka likes to shop in a designer boutique located in a city 30 miles from her home. This store offers _________ utility. A. Time and place B. Form and time C. Ownership D. Form E. Place 29. José's and Maria's son Jorge is a talented swimmer. The pool where he takes swimming lessons is 45 miles from their home in suburban Atlanta. ________ utility is not part of the roundtrip they make six days a week. A. Form B. Time and place C. Ownership D. Form and ownership E. Place 30. The concept of the value chain was created by ________. A. Fred Wiserma B. Michael Porter C. Jim Collins D. Peter Drucker E. The Boston Consulting Group 31. ________ is not one of the five primary activities in the value chain. A. Inbound logistics B. Operations C. Technology procurement D. Outbound logistics E. Marketing and sales 32. A window manufacturer has trouble getting raw materials for production. The problem occurs in the ____________ activity of the value chain. A. Inbound logistics B. Operations C. Outbound logistics D. Marketing and sales E. Service 33. Sean attributes the success of his video game arcade to advertising on the most popular website for gamers. Recently, the website raised ad prices so Sean has cut his advertising in half. He believed that positive word of mouth will be enough now that his game parlor is well established. However, sales are slipping. The problem occurs in the ________ activity of the value chain. A. Inbound logistics B. Operations C. Outbound logistics D. Marketing and sales E. Service 34. Dave is a close-up magician who is famous for his card tricks. He creates and sells DVDs of his magic tricks. Lately he has been having trouble getting the DVDs produced in a timely manner. The problem occurs in the ________ activity of the value chain. A. Inbound logistics B. Operations C. Outbound logistics D. Marketing and sales E. Service 35. Mark and Gregory are partners in a manufacturing firm that employs over 1,500 people. Recently, employees have been complaining that they were not told of changes in health insurance coverage and premiums. They attribute this to a problem with the ________ part of the value chain. A. Firm infrastructure B. Human resource management C. Technology development D. Inbound logistics E. Procurement 36. Mammoth Foods, a major agricultural corporation, recently purchased MJS Organic Foods Co. MJS was established six years ago and has become a major supplier to restaurants in the northeastern United States. The organic herbs, vegetables, and fruit market is expected to have a double-digit growth rate over the next decade. Most likely, MJS would be classified as a ________ under the Boston Consulting Group model. A. Star B. Cash Cow C. Dog D. Problem Child E. Top Gun 37. Apple introduced the iTunes store in 2003. On February 6, 2013, Apple announced that the twenty-five billionth song had been downloaded. Most likely Apple's iTunes would be classified as a ________. A. Star B. Cash Cow C. Dog D. Problem Child E. Top Gun 38. Manufacturers of writable CDs are concerned that demand may drop as people turn to the Cloud for data storage. CDs may be classified as a ________. A. Star B. Cash Cow C. Dog D. Problem Child E. Top Gun 39. Lately the demand for building materials has dropped due to the slowdown in new housing construction. Wood-O Corp., is thinking of closing its fine wood division that produces mahogany and cherry lumber for building cabinets and other applications. Most likely the fine wood division would be classified as a ____________. A. Star B. Cash Cow C. Dog D. Problem Child E. Top Gun 40. Hot and Cold Corp., makes disposable coffee and soft drink cups for use in fast-food restaurants, hospitals, convenience stores, and the like. The company is working on a sturdy new product that will biodegrade within five years of being put in a landfill. This promising new product line would most likely be classified as a ______________. A. Star B. Cash Cow C. Dog D. Problem Child E. Top Gun 41. The Green Scene Co., a struggling start-up firm that needs a huge cash injection, has an environmentally friendly pesticide that is approved for use by commercial organic farmers. The pesticide is made from all natural ingredients and has great potential. A small investment firm has injected cash in Green Scene. Mostly likely the investment firm views Green Scene as a _________. A. Star B. Cash Cow C. Dog D. Problem Child E. Top Gun 42. Mega-Big Corp., has a small strategic business unit (SBU) that produces a component vital to the manufacture of automobiles and has been extremely profitable for 18 years. Most likely, the SBU is classified as a _________. A. Star B. Cash Cow C. Dog D. Problem Child E. Top Gun 43. Mega-Big Corp., is interested in buying MD Softworks, a medical software firm. Softworks is highly regarded by medical practices for ease of use. Two software engineers started the company, but they have made risky financial and poor management decisions. Mega Corp., believes that with proper management the software firm will become an industry leader. Mostly likely the software firm would be classified as a ________. A. Star B. Cash Cow C. Dog D. Problem Child E. Top Gun 44. The business position dimension of the GE Business Screen includes all but ________. A. Organization B. Growth C. Patents D. Governmental regulations E. Marketing 45. The firm's ________ articulates an organization's purpose, or reason for existence. It should define the unique purpose that sets it apart from competitors and identifies the scope of the company's operations, products, and markets. A. Mission statement B. Goals C. Objectives D. Vision E. Value proposition 46. Which of the following is not considered a goal? A. To deliver the best customer service B. To practice responsible financial management C. To increase revenue by 15 to 20% in each of the next five years D. To hire the best people E. To minimize waste 47. Which of the following is not considered an objective? A. To improve customer satisfaction ratings to 95% B. To increase ROI by 20% C. To be the leader in our field D. To reduce the cost of scrap material to less than 1% of total manufacturing cost E. To get five new distributors 48. Growth, stability, and retrenchment refer to a firm's position relating to its ________. A. Specific strategy B. Generic strategy C. Future strategy D. Marketing strategy E. Corporate strategy 49. Hernandez Brothers manufactures trailers that are used by lawn service companies. The company was started in Texas by their father with 1 production site and 4 sales and service locations. Since the sons took over, they have expanded in the last 12 years to include 26 sales and service centers throughout the southeast. Mostly likely, the company is using a generic strategy based on ________. A. Retrenchment B. Stability C. Market development D. Growth/concentration via vertical integration E. Growth/concentration based on horizontal integration 50. Go Fish Sushi restaurants are primarily located in malls. The restaurants had rapid growth in their first seven years. Now the owner has decided that adding more restaurants would make it impossible to monitor operations. Most likely the owner is pursuing a generic strategy of ________. A. Retrenchment B. Stability C. Diversification via concentric means D. Growth/concentration via vertical integration E. Growth/concentration based on horizontal integration 51. Really Big Homebuilders used to purchase many building lots and erect spec homes (i.e., it gambled that the demand for new houses would be so high that they would sell easily). Since the real estate slowdown, it builds homes only when owners are under contract. Most likely the company is pursuing a generic business strategy of ________. A. Retrenchment B. Stability C. Diversification via concentric means D. Growth/concentration via vertical integration E. Growth/concentration based on horizontal integration 52. Automobile manufacturers must comply with regulations set by the National Transportation and Safety Board. A discussion of this would be included in the ________ part of a marketing plan. A. Sociocultural/demographic B. Firm structure and systems C. Political, legal, and ethical D. Firm resources E. Threat of new entrants 53. The Busted Puppy, a microbrewery, is creating a marketing plan. Managers are concerned with current distribution. An examination of this issue would be in the ________ section of the marketing plan. A. Firm structure and systems B. Technological C. Firm resources D. Segmentation strategies E. Supply chain strategies 54. Today many retailers create apps that customers can download to their smartphones or tablets to keep up-to-date on the company's offerings. Most likely a description of this would be in the ________ part of a marketing plan. A. Economic situation B. Natural factors C. Technological factors D. Bargaining power of suppliers E. Marketing capabilities 55. According to the 2010 U.S. Census, Asian Americans are the highest-income, fastest-growing racial group in America. Most likely an examination of this issue would be in the ________ section of the marketing plan. A. Natural factors B. Legal issues C. Economic trends D. Sociocultural/demographic E. Threat of new entrants 56. The price of a barrel of oil has varied dramatically in the last few years. When the price of oil is high, automobile drivers look to find ways to drive less. An examination of this issue would be in the ________ section of the marketing plan. A. Bargaining power of buyers B. Bargaining power of suppliers C. Threat of new entrants D. Threat of substitute products E. Rivalry among existing firms 57. One competitive force not addressed directly by Michael Porter is ________. A. Power of competitive forces B. Power of substitute forces C. Power of other stakeholders D. Power of suppliers E. Power of potential entrants 58. In the section of a marketing plan devoted to firm resources, one expects to find an examination of a firm's functional/operational level of resources and capabilities and how they impact the firm's ability to develop and execute market-driven strategies. These capabilities would include all but ________. A. Information systems B. Marketing C. Financial D. Transportation systems across the country E. Human capabilities 59. A SWOT analysis should not ________. A. Analyze the competition B. Look at internal strengths C. Include factors from the situation analysis D. Identify natural factors E. Suggest solutions to problems 60. The best place in a SWOT analysis to list the competitive trends is ________. A. External opportunities B. External threats C. Internal opportunities D. Internal strengths E. Internal weaknesses 61. The best place in a SWOT analysis to identify problems with hurricanes, earthquakes, major snowfalls, and other natural phenomena is ________. A. External opportunities B. External threats C. Internal opportunities D. Internal strengths E. Internal weaknesses 62. The best place in a SWOT analysis to identify rising interest rates and availability of credit for a firm seeking to expand through new construction of real estate is ________. A. External opportunities B. External threats C. Internal opportunities D. Internal strengths E. Internal weaknesses 63. The best place in a SWOT analysis to identify an increased marketing budget is in ________. A. External opportunities B. External threats C. Internal opportunities D. Internal strengths E. Internal weaknesses 64. The best place in a SWOT analysis for an airline to identify the possibility of acquiring a competitor is in ________. A. External opportunities B. External threats C. Internal opportunities D. Internal strengths E. Internal weaknesses 65. The best place in a SWOT analysis for a wristwatch manufacturer to identify the threat of substitute products like cell phones is in ________. A. External opportunities B. External threats C. Internal opportunities D. Internal strengths E. Internal weaknesses 66. Swag Suitz, a manufacturer of male clothing, finds that the informal atmosphere that was created by the three founders is no longer manageable now that the firm has more than 300 employees. Managers have determined a need for a human resources department. An examination of this issue would be found in the ________ part of the situation analysis. A. Firm structure B. Firm culture C. Firm leadership D. Firm resources E. Firm history 67. Goals and objectives should be set ________. A. At the beginning of marketing planning B. At the end of the situation analysis C. After marketing strategies are fixed D. After completion of all market research, situation analysis, and competitor analysis E. None of these 68. Listen HEAR!, a producer of headphones used with cell phones and MP3 players, uses contract manufacturing overseas. The firm is concerned that tariffs may be increased. An examination of this issue would take place in the _________ part of the situation analysis. A. Economic factors B. Natural factors C. Competitive factors D. Political, legal, and ethical factors E. Logistical factors 69. Malala, the marketing manager of an automobile dealership, is crafting a SWOT analysis. She should include the downturn in the U.S. economy and tightening of the credit markets in the ________ section. A. Strengths B. Threats C. Opportunities D. Strategies E. Weaknesses 70. Malala has many items to include in the SWOT analysis for an automobile dealership. An examination of competitors that have gone bankrupt would be included in the ________ section. A. Strengths B. Threats C. Opportunities D. Strategies E. Weaknesses 71. Roberta's company, New Home Builders Corp., specializes in designing one-story homes that have wide hallways and walk-in showers that could accommodate the need to use a wheelchair or walker, and other amenities that allow couples to remain in their homes as they age. The company's strong value proposition has allowed it to maintain steady market share in a weak housing market. A discussion of this relative advantage would be included in the ________ section of the SWOT. A. Strengths B. Threats C. Opportunities D. Strategies E. Weaknesses 72. Open Sesame is a chain of Thai restaurants located in the western United States. The marketing manager has discovered that there is a growing demand for Spanish food and that Latino Americans spend more money on food away from home than other ethnic groups. This information would be included in the ________ part of the SWOT analysis. A. Strengths B. Threats C. Opportunities D. Strategies E. Weaknesses 73. The U.S. dollar has strengthened against the euro and the yen. A discussion of this would be included in the ________ section of the SWOT. A. Strengths B. Threats C. Opportunities D. Strategies E. Weaknesses 74. The marketing manager at Little Red Schoolhouse Architects, a firm that specializes in the design of school buildings, discovered a glitch in the software that the firm uses and that some of its most recent projects will come in overbudget. A discussion of this would be included in the ________ section of the SWOT. A. Strengths B. Threats C. Opportunities D. Strategies E. Weaknesses 75. Pegasus Express, a well-established North American delivery service, wants to expand service into Central and South America. This is classified as ___________ in Ansoff's Product-Market Matrix. A. Market diversification B. Marketing strategy development C. Market penetration D. Product development E. Market development 76. Call Company has 12 call centers worldwide handling customer service issues for a variety of companies. The firm is considering the purchase of a software firm that serves the oil and gas industry. Most likely, this would be classified as ________ in Ansoff's Product-Market Matrix. A. Market diversification B. Marketing strategy development C. Market penetration D. Product development E. Market development 77. A former professional football player invested in a seafood restaurant chain when he played ball. Now that he is retired from the NFL and has time to devote to his business interests, he and his partners want to start a chain of organic fast-casual restaurants in their region of 6 million households. Most likely, this would be classified as ________ in Ansoff's Product-Market Matrix. A. Market diversification B. Marketing strategy development C. Market penetration D. Product development E. Market development 78. Bliss Massage Therapy Center maintains a database of over 700 clients and sends each one a special discount offer in the month of his or her birthday. Managers hope that as existing customers use the discount, they will see an overall growth in sales. Most likely, this would be classified as ________ in Ansoff's Product-Market Matrix. A. Market diversification B. Marketing strategy development C. Market penetration D. Product development E. Market development 79. Gabriel, VP of marketing for Really Big Screen Televisions, wants the company to offer a DVD player, a product the company doesn't have now. He thinks that the firm has many brand-loyal customers who would buy it. Most likely, this would be classified as ________ in Ansoff's Product-Market Matrix. A. Market diversification B. Marketing strategy development C. Market penetration D. Product development E. Market development 80. Body Builders Gym's marketing team wants to stay open until 3:00 a.m. The gym currently closes at midnight. Most likely, this would be classified as ________ in Ansoff's Product-Market Matrix. A. Market diversification B. Marketing strategy development C. Market penetration D. Product development E. Market development 81. Inga, marketing manager at Oh, Baby!, a professional preschool center, thinks the firm should start an after-school program to retain its current clients. This makes sense as she wants to extend the trusting relationship already established with parents and children. Most likely, this would be classified as ________ in Ansoff's Product-Market Matrix. A. Market diversification B. Marketing strategy development C. Market penetration D. Product development E. Market development 82. Jamal's boss wants him to travel to Canada to investigate opening retail stores in Montreal and Ottawa. The firm operates 278 stores in the United States. Most likely, the extension into a new geographic region would be classified as ________ in Ansoff's Product-Market Matrix. A. Market diversification B. Marketing strategy development C. Market penetration D. Product development E. Market development 83. The process of measuring marketing results and adjusting the marketing plan as needed is called ________. A. Marketing control B. Marketing metrics C. Marketing management D. Marketing strategy E. Marketing planning 84. One reason for developing ________ is that the firm must be nimble in responding to bad publicity resulting from product tampering or failure, ethical or legal misconduct of an officer, or some other aspect of operation that garners bad press. A. Mission statements B. Forecasting C. Press releases D. Contingency plans E. Alternative company names 85. Every marketing plan includes an implementation element. These are sometimes called ________. A. Strategic plans B. Marketing programs C. Value propositions D. Action plans E. Marketing channels 86. Implementation elements, or action plans, should include ________. A. Timing B. A way to measure results C. The identity of the responsible person D. The identification of resources needed E. All of these 87. One part of a marketing plan should identify what to do if things go wrong. This section is called ________. A. Contingency planning B. Strategic planning C. Marketing metrics D. Action plans E. Marketing programs 88. Contingency plans should include ________. A. Best-case scenarios B. Worst-case scenarios C. Expected-case scenarios D. Best-case scenarios and Worst-case scenarios only E. Best-case scenarios, Worst-case scenarios, and Expected-case scenarios 89. Marketing plans are ________. A. A means of gathering input from stakeholders throughout the firm B. Essential for the firm's success C. A rallying point for creativity D. Well articulated E. All of these 90. Scott is a plumbing fixture manufacturer's salesperson. He sells to wholesalers, homebuilders, and retailers. His marketing plan calls for going to four trade shows a year. He recently found out that there would be a new Home Show aimed at consumers in his territory and he wants to attend. His boss says "Go for it!" The boss is reflecting which of the following concepts in successful marketing planning? A. Stay flexible. B. Utilize input, but don't become paralyzed by information and analysis. C. Don't underestimate the implementation part of the plan. D. Stay strategic, but also stay on top of the tactical. E. Give yourself and your people room to fail and try again. 91. Mary's firm has delayed making a decision on acquiring a new product line. Her staff has analyzed and tweaked numbers for three months. Most likely, the staff needs to be reminded of which concept? A. Stay flexible. B. Utilize input, but don't become paralyzed by information and analysis. C. Don't underestimate the implementation part of the plan. D. Stay strategic, but also stay on top of the tactical. E. Give yourself and your people room to fail and try again. 92. Tyler's event planning company hired a new marketing assistant. He says he is a "big-picture person," not a detail-oriented person. Most likely, Tyler is about to find out that the new assistant needs to be coached in which concept? A. Stay flexible. B. Utilize input, but don't become paralyzed by information and analysis. C. Don't underestimate the implementation part of the plan. D. Stay strategic, but also stay on top of the tactical. E. Give yourself and your people room to fail and try again. 93. Samantha has worked for MJS Marketing for five years and expected a promotion next month. However, the new product launch that she organized did not go as smoothly as expected. This was the first time the company had hired an outside firm for promotions and Sam is worried that will reflect poorly on her. Sam's terrific boss will most likely remind her of which concept? A. Stay flexible. B. Utilize input, but don't become paralyzed by information and analysis. C. Don't underestimate the implementation part of the plan. D. Stay strategic, but also stay on top of the tactical. E. Give yourself and your people room to fail and try again. 94. Tips for producing a successful marketing plan include which concept(s)? A. Stay flexible. B. Utilize input, but don't become paralyzed by information and analysis. C. Don't underestimate the implementation part of the plan. D. Stay strategic, but also stay on top of the tactical. E. All of these. Chapter 02 Elements of Marketing Strategy, Planning, and Competition Answer Key True / False Questions 1. Value is defined by the customer. TRUE Value was defined from a customer's perspective as a ratio of the bundle of benefits a customer receives from an offering compared to the costs incurred by the customer in acquiring that bundle of benefits. AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-01 Examine the concept of value and the elements and role of the value chain. Topic: Value Is at the Core of Marketing 2. A benefit is some type of utility that a company and its products provide for customers. TRUE A benefit is some type of utility that a company and its products (and services) provide its customers. AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-01 Examine the concept of value and the elements and role of the value chain. Topic: Value Is at the Core of Marketing 3. Starbucks is known to have shops located across the street from each other. It appears that the coffee shop chain is offering place utility. TRUE The three utilities—time, place, and ownership—are created by marketing. They are created when products are available to customers at a convenient location when they want to purchase them, and facilities of exchange are available that allow for transfer of the product ownership from seller to buyer. AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-01 Examine the concept of value and the elements and role of the value chain. Topic: Value Is at the Core of Marketing 4. Samsung's first value proposition when the brand was launched in the United States was price and functionality. TRUE When South Korean-based Samsung first brought its brand to the United States, it communicated a message centered primarily on functionality at a moderate price—a strategy designed to provide an advantage over pricier Japanese brands. But over time, Samsung's value proposition has expanded to include innovativeness, style, and dependability—the latter of which was helped significantly by high ratings of many of the company's products by sources such as Consumer Reports. AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-01 Examine the concept of value and the elements and role of the value chain. Topic: Value Is at the Core of Marketing 5. The value proposition relates to the price of a product. FALSE When a firm communicates the value proposition of its products to customers, the value message may include the whole bundle of benefits the company promises to deliver, not just the benefits of the product itself. AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-01 Examine the concept of value and the elements and role of the value chain. Topic: Value Is at the Core of Marketing 6. Firms should not be concerned that satisfied customers will switch to another brand. FALSE For firms interested in building long-term customer relationships, having satisfied customers is not enough to ensure the relationship is going to last. AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 1 Easy Learning Objective: 02-01 Examine the concept of value and the elements and role of the value chain. Topic: Value Is at the Core of Marketing 7. The two parts of the value equation are benefits and cost. TRUE One can think of value as a ratio of benefits to costs, as viewed from the eyes of the beholder (the customer). AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-01 Examine the concept of value and the elements and role of the value chain. Topic: Value Is at the Core of Marketing 8. Outbound logistics refer to the distribution of products. TRUE Outbound logistics—how the firm transports and distributes the final products to the marketplace. AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Topic: Marketing Planning Is Both Strategic and Tactical 9. As long as all activities in the value chain are working well, managers do not need to be concerned with aligning the activities. FALSE CEOs in recent years have been concentrating on aligning the various elements of the value chain, meaning that all facets of the company are working together to ensure that no snags will negatively impact the firm's value proposition. From a customer's perspective, when the supplier's value chain is working well, all the customer tends to see are the results of a well-aligned value chain: quality products, good salespeople, on-time delivery, prompt service after the sale, and so on. However, it takes only one weak link in the value chain and the whole process of cultivating satisfied and loyal customers can be circumvented. AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-01 Examine the concept of value and the elements and role of the value chain. Topic: Value Is at the Core of Marketing 10. The last step in the value chain is margin. TRUE See Exhibit 2.1. AACSB: Communication Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-01 Examine the concept of value and the elements and role of the value chain. Topic: Value Is at the Core of Marketing 11. Marketing (little m) serves as the driver of business strategy. FALSE At the functional or operational level, marketing (little m) represents the specific programs and tactics aimed at customers and other stakeholder groups and includes everything from brand image, to the message salespeople and advertisements deliver, to customer service, to packaging and product features—in fact, all elements of operationalizing the marketing mix and beyond. AACSB: Communication Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Topic: Marketing Planning Is Both Strategic and Tactical 12. According to the BCG matrix, a business that is classified as a star has high growth and low market share. FALSE Stars (high share, high growth): important to building the future of the business and deserving any needed investment. AACSB: Communication Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Topic: Marketing Planning Is Both Strategic and Tactical 13. Linda imports fine art paintings and photographs that she sells to hotels. When the dollar is weak against foreign currencies, she struggles to cover her costs. Business has increased 400% in the last five years. With additional resources, she believes she can expand into the profitable hospital and senior assisted living housing markets. According to the BGC matrix, Linda's business is a dog. FALSE Dogs (low share, low growth): potential high cash users and prime candidates for liquidation. AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 2 Medium Learning Objective: 02-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Topic: Marketing Planning Is Both Strategic and Tactical 14. The GE Business Screen portfolio model evaluates businesses on the dimensions of market attractiveness and market share. FALSE The GE Business Screen, shown in Exhibit 2.4, is a more realistic and complex portfolio model. It also evaluates the business on two dimensions—market attractiveness and business position, which refers to its ability to compete. AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Topic: Marketing Planning Is Both Strategic and Tactical 15. The GE Business Screen model assesses the firm's ability to compete. Business position looks at factors like government regulations, sensitivity to economic trends, and size of the market. FALSE The GE Business Screen, shown in Exhibit 2.4, is a more realistic and complex portfolio model. It also evaluates the business on two dimensions—market attractiveness and business position, which refers to its ability to compete. The investment decision is again suggested by the position on a matrix. A business that is favorable on both dimensions should usually be a candidate to grow. When both market attractiveness and business position evaluations are unfavorable, the marketing planning and strategy, while analytical in nature, often yield very funny marketing communication programs. AACSB: Communication Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Topic: Marketing Planning Is Both Strategic and Tactical 16. A mission statement does not include a discussion of the firm's strategic vision. FALSE It identifies the scope of a company's operations, products, and markets. Most mission statements also include a discussion of what the company would like to become in the future—its strategic vision. AACSB: Communication Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Topic: Marketing Planning Is Both Strategic and Tactical 17. Objectives are measurable; goals are broad statements of generally desired accomplishments in support of the firm's mission statement. TRUE Goals, general statements of what the firm wishes to accomplish in support of the mission and vision, eventually become refined into specific, measurable, and (hopefully) attainable objectives for the firm. AACSB: Communication Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 3 Hard Learning Objective: 02-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Topic: Marketing Planning Is Both Strategic and Tactical 18. The Sarbanes-Oxley Act of 2002 established specific procedures to ensure ethical conduct at the highest levels of the company, including the board of directors. TRUE The Sarbanes-Oxley Act of 2002 (commonly referred to as SOX) established specific procedures and processes to ensure ethical conduct at the highest levels of a company including the board of directors and senior management. AACSB: Communication Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 02-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Topic: Marketing Planning Is Both Strategic and Tactical 19. Strategy has two key phases: formulation and execution. TRUE Strategy has two key phases: formulation (or development) and execution. AACSB: Communication Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-03 Identify various types of organizational strategies. Topic: Elements of Marketing Planning 20. Companies in some business cultures based outside the United States seem to have less pressure to achieve high levels of growth. TRUE The pressure to constantly achieve accelerated growth is much less intense in many business cultures outside the United States. AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-03 Identify various types of organizational strategies. Topic: Elements of Marketing Planning 21. A firm's competitive strategy leads it to decide if it can grow and if not, how to survive through stability or retrenchment. FALSE Generic strategy: See Exhibit 2.5. AACSB: Communication Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-03 Identify various types of organizational strategies. Topic: Elements of Marketing Planning 22. Market penetration strategies allow the firm to introduce existing products to new customers, often including international markets. FALSE See Exhibit 2.11. AACSB: Communication Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-03 Identify various types of organizational strategies. Topic: Elements of Marketing Planning 23. Market development strategies allow the firm to invest additional resources to have existing customers consume new products. FALSE See Exhibit 2.11. AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-03 Identify various types of organizational strategies. Topic: Elements of Marketing Planning Multiple Choice Questions 24. Value may be defined as the ratio of bundled benefits received to the cost incurred by the customer to receive those benefits. ________ is not thought of as one of the costs. A. Monetary cost B. Time to shop C. Convenience D. Poor service quality E. The hassle factor One can think of value as a ratio of benefits to costs, as viewed from the eyes of the beholder (the customer). That is, customers incur a variety of costs in doing business with any firm, be those costs financial, time, opportunity costs, or otherwise. AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-01 Examine the concept of value and the elements and role of the value chain. Topic: Value Is at the Core of Marketing 25. Form utility is ­­­­________. A. Marketing's task in creating an offering that has value B. Production's task in creating an offering that has value C. The firm's task in deciding where to distribute the product D. Both marketing's task in creating an offering that has value and production's task in creating an offering that has value E. Both marketing's task in creating an offering that has value and the firm's task in deciding where to distribute the product Form utility is created when the firm converts raw materials into finished products that are desired by the market. AACSB: Communication Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 3 Hard Learning Objective: 02-01 Examine the concept of value and the elements and role of the value chain. Topic: Value Is at the Core of Marketing 26. Gabrielle and Juan have a vacation home 90 miles from their primary residence. They could haul bags of groceries and an ice chest of refrigerated foods with them when they leave home. However, they like to grocery shop at a market located near the vacation spot. It offers them ______________ utility. A. Time B. Form C. Ownership and form D. Form and time E. Place The three utilities—time, place, and ownership—are created by marketing. They are created when products are available to customers at a convenient location when they want to purchase them, and facilities of exchange are available that allow for transfer of the product ownership from seller to buyer. AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 2 Medium Learning Objective: 02-01 Examine the concept of value and the elements and role of the value chain. Topic: Value Is at the Core of Marketing 27. Ryan pays a market rate to take his young children to daycare that is run by his employer. It is open until 7:00 p.m., a time by which everyone leaves. This service offered by his company offers ________________ utility. A. Time B. Form C. Place D. Form and ownership E. Time and place The three utilities—time, place, and ownership—are created by marketing. They are created when products are available to customers at a convenient location when they want to purchase them, and facilities of exchange are available that allow for transfer of the product ownership from seller to buyer. AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 2 Medium Learning Objective: 02-01 Examine the concept of value and the elements and role of the value chain. Topic: Value Is at the Core of Marketing 28. Shabreka likes to shop in a designer boutique located in a city 30 miles from her home. This store offers _________ utility. A. Time and place B. Form and time C. Ownership D. Form E. Place Form utility is created when the firm converts raw materials into finished products that are desired by the market. AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 02-01 Examine the concept of value and the elements and role of the value chain. Topic: Value Is at the Core of Marketing 29. José's and Maria's son Jorge is a talented swimmer. The pool where he takes swimming lessons is 45 miles from their home in suburban Atlanta. ________ utility is not part of the roundtrip they make six days a week. A. Form B. Time and place C. Ownership D. Form and ownership E. Place The three utilities—time, place, and ownership—are created by marketing. They are created when products are available to customers at a convenient location when they want to purchase them, and facilities of exchange are available that allow for transfer of the product ownership from seller to buyer. AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 2 Medium Learning Objective: 02-01 Examine the concept of value and the elements and role of the value chain. Topic: Value Is at the Core of Marketing 30. The concept of the value chain was created by ________. A. Fred Wiserma B. Michael Porter C. Jim Collins D. Peter Drucker E. The Boston Consulting Group Created by Michael Porter in his classic book Competitive Advantage, the value chain serves as a means for firms to identify ways to create, communicate, and deliver more customer value within a firm. Exhibit 2.1 portrays Porter's value chain concept. AACSB: Communication Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-01 Examine the concept of value and the elements and role of the value chain. Topic: Value Is at the Core of Marketing 31. ________ is not one of the five primary activities in the value chain. A. Inbound logistics B. Operations C. Technology procurement D. Outbound logistics E. Marketing and sales See Exhibit 2.1. AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-01 Examine the concept of value and the elements and role of the value chain. Topic: Value Is at the Core of Marketing 32. A window manufacturer has trouble getting raw materials for production. The problem occurs in the ____________ activity of the value chain. A. Inbound logistics B. Operations C. Outbound logistics D. Marketing and sales E. Service Inbound logistics—how the firm goes about sourcing raw materials for production. AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 2 Medium Learning Objective: 02-01 Examine the concept of value and the elements and role of the value chain. Topic: Value Is at the Core of Marketing 33. Sean attributes the success of his video game arcade to advertising on the most popular website for gamers. Recently, the website raised ad prices so Sean has cut his advertising in half. He believed that positive word of mouth will be enough now that his game parlor is well established. However, sales are slipping. The problem occurs in the ________ activity of the value chain. A. Inbound logistics B. Operations C. Outbound logistics D. Marketing and sales E. Service Marketing and sales—how the firm communicates the value proposition to the marketplace. AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 1 Easy Learning Objective: 02-01 Examine the concept of value and the elements and role of the value chain. Topic: Value Is at the Core of Marketing 34. Dave is a close-up magician who is famous for his card tricks. He creates and sells DVDs of his magic tricks. Lately he has been having trouble getting the DVDs produced in a timely manner. The problem occurs in the ________ activity of the value chain. A. Inbound logistics B. Operations C. Outbound logistics D. Marketing and sales E. Service Operations—how the firm converts the raw materials into final products. AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 1 Easy Learning Objective: 02-01 Examine the concept of value and the elements and role of the value chain. Topic: Value Is at the Core of Marketing 35. Mark and Gregory are partners in a manufacturing firm that employs over 1,500 people. Recently, employees have been complaining that they were not told of changes in health insurance coverage and premiums. They attribute this to a problem with the ________ part of the value chain. A. Firm infrastructure B. Human resource management C. Technology development D. Inbound logistics E. Procurement Human resource management—how the firm ensures it has the right people in place, trains them, and keeps them. AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 2 Medium Learning Objective: 02-01 Examine the concept of value and the elements and role of the value chain. Topic: Value Is at the Core of Marketing 36. Mammoth Foods, a major agricultural corporation, recently purchased MJS Organic Foods Co. MJS was established six years ago and has become a major supplier to restaurants in the northeastern United States. The organic herbs, vegetables, and fruit market is expected to have a double-digit growth rate over the next decade. Most likely, MJS would be classified as a ________ under the Boston Consulting Group model. A. Star B. Cash Cow C. Dog D. Problem Child E. Top Gun Stars (high share, high growth): important to building the future of the business and deserving any needed investment. AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 1 Easy Learning Objective: 02-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Topic: Marketing Planning Is Both Strategic and Tactical 37. Apple introduced the iTunes store in 2003. On February 6, 2013, Apple announced that the twenty-five billionth song had been downloaded. Most likely Apple's iTunes would be classified as a ________. A. Star B. Cash Cow C. Dog D. Problem Child E. Top Gun Cash Cows (high share, low growth): key sources of internal cash generation for the firm. AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 2 Medium Learning Objective: 02-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Topic: Marketing Planning Is Both Strategic and Tactical 38. Manufacturers of writable CDs are concerned that demand may drop as people turn to the Cloud for data storage. CDs may be classified as a ________. A. Star B. Cash Cow C. Dog D. Problem Child E. Top Gun Problem Children, or Question Marks (low share, high growth): high cash needs that, if properly nurtured, can convert into stars. AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 2 Medium Learning Objective: 02-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Topic: Marketing Planning Is Both Strategic and Tactical 39. Lately the demand for building materials has dropped due to the slowdown in new housing construction. Wood-O Corp., is thinking of closing its fine wood division that produces mahogany and cherry lumber for building cabinets and other applications. Most likely the fine wood division would be classified as a ____________. A. Star B. Cash Cow C. Dog D. Problem Child E. Top Gun Problem Children, or Question Marks (low share, high growth): high cash needs that, if properly nurtured, can convert into stars. AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 2 Medium Learning Objective: 02-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Topic: Marketing Planning Is Both Strategic and Tactical 40. Hot and Cold Corp., makes disposable coffee and soft drink cups for use in fast-food restaurants, hospitals, convenience stores, and the like. The company is working on a sturdy new product that will biodegrade within five years of being put in a landfill. This promising new product line would most likely be classified as a ______________. A. Star B. Cash Cow C. Dog D. Problem Child E. Top Gun Stars (high share, high growth): important to building the future of the business and deserving any needed investment. AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 2 Medium Learning Objective: 02-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Topic: Marketing Planning Is Both Strategic and Tactical 41. The Green Scene Co., a struggling start-up firm that needs a huge cash injection, has an environmentally friendly pesticide that is approved for use by commercial organic farmers. The pesticide is made from all natural ingredients and has great potential. A small investment firm has injected cash in Green Scene. Mostly likely the investment firm views Green Scene as a _________. A. Star B. Cash Cow C. Dog D. Problem Child E. Top Gun Problem Children, or Question Marks (low share, high growth): high cash needs that, if properly nurtured, can convert into stars. AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 2 Medium Learning Objective: 02-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Topic: Marketing Planning Is Both Strategic and Tactical 42. Mega-Big Corp., has a small strategic business unit (SBU) that produces a component vital to the manufacture of automobiles and has been extremely profitable for 18 years. Most likely, the SBU is classified as a _________. A. Star B. Cash Cow C. Dog D. Problem Child E. Top Gun Cash Cows (high share, low growth): key sources of internal cash generation for the firm. AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 2 Medium Learning Objective: 02-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Topic: Marketing Planning Is Both Strategic and Tactical 43. Mega-Big Corp., is interested in buying MD Softworks, a medical software firm. Softworks is highly regarded by medical practices for ease of use. Two software engineers started the company, but they have made risky financial and poor management decisions. Mega Corp., believes that with proper management the software firm will become an industry leader. Mostly likely the software firm would be classified as a ________. A. Star B. Cash Cow C. Dog D. Problem Child E. Top Gun Problem Children, or Question Marks (low share, high growth): high cash needs that, if properly nurtured, can convert into stars. AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 2 Medium Learning Objective: 02-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Topic: Marketing Planning Is Both Strategic and Tactical 44. The business position dimension of the GE Business Screen includes all but ________. A. Organization B. Growth C. Patents D. Governmental regulations E. Marketing See Exhibit 2.4. AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 3 Hard Learning Objective: 02-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Topic: Marketing Planning Is Both Strategic and Tactical 45. The firm's ________ articulates an organization's purpose, or reason for existence. It should define the unique purpose that sets it apart from competitors and identifies the scope of the company's operations, products, and markets. A. Mission statement B. Goals C. Objectives D. Vision E. Value proposition A mission statement articulates an organization's purpose, or reason for existence. A well-conceived mission statement defines the fundamental, unique purpose that sets a company apart from other firms of its type and identifies the scope of a company's operations, products, and markets. AACSB: Communication Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Topic: Marketing Planning Is Both Strategic and Tactical 46. Which of the following is not considered a goal? A. To deliver the best customer service B. To practice responsible financial management C. To increase revenue by 15 to 20% in each of the next five years D. To hire the best people E. To minimize waste Goals, general statements of what the firm wishes to accomplish in support of the mission and vision, eventually become refined into specific, measurable, and (hopefully) attainable objectives for the firm. AACSB: Communication Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 3 Hard Learning Objective: 02-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Topic: Marketing Planning Is Both Strategic and Tactical 47. Which of the following is not considered an objective? A. To improve customer satisfaction ratings to 95% B. To increase ROI by 20% C. To be the leader in our field D. To reduce the cost of scrap material to less than 1% of total manufacturing cost E. To get five new distributors Objectives at the corporate and SBU level provide the benchmarks by which organizational performance is assessed. AACSB: Communication Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 3 Hard Learning Objective: 02-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Topic: Marketing Planning Is Both Strategic and Tactical 48. Growth, stability, and retrenchment refer to a firm's position relating to its ________. A. Specific strategy B. Generic strategy C. Future strategy D. Marketing strategy E. Corporate strategy A firm's generic strategy is its overall directional strategy at the business level. Fundamentally, all firms must decide whether they wish to (or are able to) grow, and if not, how they can survive through stability or retrenchment. AACSB: Communication Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-03 Identify various types of organizational strategies. Topic: Elements of Marketing Planning 49. Hernandez Brothers manufactures trailers that are used by lawn service companies. The company was started in Texas by their father with 1 production site and 4 sales and service locations. Since the