MARKETING 311 Chapter 2 | Questions and Answers (Complete Solutions)

MARKETING 311 Chapter 2 | Questions and Answers (Complete Solutions) Which of the following is true with regard to strategic planning? A) At the corporate level, the company starts the strategic planning process by determining what portfolio of businesses and products is best for the company. B) A strategic plan deals with a company's short-term goals. C) The focus of strategic planning is to define a game plan for long-run survival and growth. D) The strategic plan is a statement of an organization's purpose. E) Strategic planning involves identifying segments of consumers with identical preferences. Which of the following is the first step in strategic planning? A) setting short-term goals B) developing the business portfolio C) defining the organizational mission D) formulating the key marketing strategies E) identifying the organization's weaknesses and the threats it faces Which of the following is NOT a step in the strategic planning process? A) defining the company mission B) setting company objectives and goals C) designing the business portfolio D) planning marketing and other functional strategies E) evaluating members of the company's value chain A ________ documents an organization's purpose—what it wants to accomplish in the larger environment. A) vision statement B) mission statement C) business portfolio D) value proposition E) product strategy Mission statements should ________ and be defined in terms of ________. A) be technology oriented; meeting the self-actualization needs of customers B) be product oriented; satisfying the esteem needs of customers C) embody the company's short-term plans; current opportunities D) be market oriented; satisfying basic customer needs E) address sales and profits; the net return on investments Which of the following is NOT a market-oriented business definition? A) "We empower customers to realize their dreams." B) "We make high-quality consumer food products." C) "We sell success and status." D) "We create the Hilton experience." E) "We bring innovation to every home." Companies that define their missions in terms of products or technologies are considered myopic primarily because ________. A) products and technologies result in low returns on investment B) consumer preferences with regard to products and technology are difficult to predict C) consumer preferences for different product categories vary from time to time D) products and technologies eventually become outdated E) most consumers are not comfortable using sophisticated technology during the buying process Mission statements should be defined in terms of ________. A) the advantages a company's products provide B) satisfying basic customer needs C) the value a company's products provide D) the profitability of a company's products E) the variety they offer to a customer A company's broad mission leads it to develop all of the following EXCEPT ________. A) budget objectives B) business objectives C) sales objectives D) marketing objectives E) customer engagement objectives Mission statements should be ________. A) meaningful and specific yet motivating B) technology oriented C) written solely for public relations purposes D) focused on increasing sales or profits E) strictly product oriented A company's broad mission leads to ________. A) increasing profits and more customers B) increasing sales and decreasing costs C) a higher share price D) a hierarchy of objectives, including business objective and marketing objectives E) increased market share and increasing profitability The purpose of strategic planning is to find ways in which your company can best use its strengths to take advantage of attractive opportunities in the environment. True A company's mission statement provides the depth needed for all segments of the company to reach their goals. False A clear mission statement acts as an "invisible hand" that guides people in the organization. True Mission statements should be market oriented. True The collection of businesses and products that make up a company is called its ________. A) strategic business unit B) supply chain C) strategic plan D) business portfolio E) internal value chain Which of the following is the first step of business portfolio planning? A) shaping the future portfolio by developing strategies for growth and downsizing B) determining which businesses should receive more, less, or no investment C) identifying internal strengths and weaknesses D) identifying future opportunities E) determining short-term goals The major activity in strategic planning is ________, whereby management evaluates the products and businesses that make up the company. A) SWOT analysis B) benchmarking C) business portfolio analysis D) breakeven analysis E) prospecting The best business portfolio is the one that ________. A) provides the greatest opportunity for increasing profits B) best fits the company's strengths and weaknesses to opportunities in the environment C) ensures that the company will realize increased share of market D) allows the company to decrease its overall costs E) entices customers to purchase even more products from the company Which of the following best describes a strategic business unit? A) the internal value chain of a company B) the supply chain of a company C) the key businesses that make up a company D) the key channel intermediaries of a service company E) the key competitors of a company During portfolio analysis, a company ________ after identifying the key businesses that make up the company. A) formulates a short-term marketing plan B) assesses the attractiveness of its various SBUs C) assesses its strengths and weaknesses D) performs a SWOT analysis E) assesses the effectiveness of its various channel intermediaries Which of the following is NOT something a company must determine when analyzing its current business portfolio? A) which businesses should receive more investment B) which businesses should receive less investment C) which businesses should receive no investment D) which businesses should be sold or closed E) which businesses shape the future portfolio Most standard portfolio analysis methods evaluate SBUs on the ________. A) potential for niche or global marketing B) degree of product differentiation C) strength of the market or industry position D) accessibility to rural markets E) number of successful business acquisitions According to the Boston Consulting Group approach, ________ provides a measure of market attractiveness. A) product attribute B) product design C) market penetration D) market growth rate E) market segmentation According to the Boston Consulting Group approach, ________ serves as a measure of company strength in the market. A) relative market share B) product development C) market diversification D) product attribute E) market segmentation Within a company, who is most likely to perform strategic planning? A) the president and vice presidents B) the accounting and finance departments C) the marketing and sales departments D) cross-functional teams of divisional managers close to their markets E) the manufacturing and production departments ________ are a type of SBU that often require heavy investments to finance their rapid growth. A) Cash cows B) Question marks C) Stars D) Dogs E) Bears ________ are low-growth, high-share businesses/products that need less investment to hold their market share. A) Stars B) Cash cows C) Question marks D) Dogs E) Bears Which of the following is true with regard to cash cows? A) They are high-growth, high-share businesses or products. B) They can be used to help finance the company's question marks and stars. C) They require significant cash to maintain market share. D) They are low-share businesses and products. E) They do not promise to be large sources of cash. ________ are low-share business units in high-growth markets that require a lot of cash to hold their share. A) Stars B) Dogs C) Question marks D) Cash cows E) Bears By harvesting its SBU, a company would most likely be ________. A) milking the SBU's short-term cash flow regardless of the long-term effect B) selling the SBU or phasing it out and using the resources elsewhere C) investing just enough to hold the SBU's current market share D) investing more in the business unit to build its share E) diversifying the company's product line A company can ________ an SBU by selling it or phasing it out and using the resources elsewhere. A) divest B) promote C) expand D) harvest E) hold Modern strategic planning ________. A) exclusively consists of a company's short-term goals B) is decentralized C) does not involve cross-functional teams D) does not take the overall mission of the company into consideration E) is highly centralized The BCG matrix approach is problematic in that it ________. A) focuses on planning for the future at the cost of ignoring the present B) focuses solely on current businesses and provides little scope for future planning C) tends to undermine the importance of market growth rate as a measure of market attractiveness D) tends to undermine the importance of relative market share as a measure of company strength in the market E) fails to classify SBUs Which of the following is a portfolio-planning tool for identifying company growth opportunities through market penetration, market development, product development, or diversification? A) BCG matrix B) analysis of variance C) product/market expansion grid D) Harris matrix E) SWOT analysis Phoenix, a popular coffee shop chain in North America, recently opened 400 stores to cater to its rapidly increasing number of patrons. This exemplifies ________. A) product differentiation B) product development C) diversification D) market penetration E) market segmentation Which of the following is true with regard to the product/expansion grid? A) It classifies SBUs into four distinct categories. B) It is a useful device for identifying growth opportunities. C) It helps companies analyze their internal strengths and weaknesses. D) It functions on the premise that firms should downsize to regain market share. E) It is a useful device for segregating customers into distinct categories. Making more sales to current customers without changing a firm's products is known as ________. A) market segmentation B) market penetration C) product diversification D) product development E) prospecting Lark Inc., an American electronics company, is currently reviewing new geographical markets to sell its highly popular televisions. By 2020, it plans to open new stores across all the major South Asian cities. Lark is most likely following a ________ strategy. A) local marketing B) market development C) diversification D) product adaptation E) product development The managers of Arrow, an American retail chain, are currently reviewing new demographic markets to sell the firm's current products. This is an example of ________. A) market penetration B) product development C) mass marketing D) market development E) product adaptation The managers of Alfredo's Pizza, a popular pizzeria in New York City, have been increasingly encouraging senior citizens to visit the pizzeria's numerous outlets spread across the city. Anticipating a rise in the population of senior citizens in the area, the management of Alfredo's Pizza is seeking to tap into this promising segment that consists of retired, affluent consumers. In this instance, the managers of Alfredo's Pizza are anticipating company growth through ________. A) market development B) product development C) mass customization D) niche marketing E) product differentiation FencePro, a local company, has developed an entirely new mounting system for chain link fences. After acquiring a distributor, FencePro now has the ability to market its products nationwide. FencePro is most likely following a ________ strategy. A) market penetration B) market development C) downsizing D) product adaptation E) product development Amor, a successful brand of women's clothing, recently introduced a line of fitness equipment. This is an example of ________. A) mass customization B) niche marketing C) diversification D) prospecting E) product adaptation Sunny Brews is a coffeehouse chain based in Boston. It recently introduced Eva, a mild roast, which became immensely popular. This exemplifies ________. A) benchmarking B) diversification C) mass customization D) product development E) downsizing A women's apparel manufacturer in California recently acquired a Houston-based company that manufactures office furniture. This is an example of ________. A) product development B) market development C) market penetration D) diversification E) product differentiation Cleats, Unlimited developed a new style of soccer shoe. This is an example of ________. A) product development B) market development C) market penetration D) diversification E) product differentiation Companies may want to downsize their business portfolios for all but which of the following reasons? A) The firm may have grown too fast. B) The firm may have entered areas where it lacks experience. C) The customers may have purchased all they need. D) The market environment might change. E) The products might simply age. Elmo Corp., a manufacturer of personal computers and printers, recently established an office furniture exporting business. This is an example of ________. A) niche marketing B) local marketing C) diversification D) product adaptation E) downsizing Fun-Spot's mission is ________. A) product oriented B) technology oriented C) market oriented D) design oriented E) narrowly focused on profits Fun-Spot Fun Park represents a high-growth, high-share business. According to the BCG matrix, it can be classified as a ________. A) star B) question mark C) bear D) cat E) dog Ron and Gail plan to lower Fun-Spot's prices in an effort to encourage customers to stay longer, visit more often, and spend more money during each visit. What type of strategy are Ron and Gail planning? A) market penetration B) market development C) product development D) product adaptation E) diversification Ron and Gail, owners of Fun-Spot, strive to provide new offerings and entertainment options for their visitors. This type of strategy can be best described as ________. A) market penetration B) market development C) product development D) niche marketing E) diversification The major activity in strategic planning is business portfolio analysis, whereby management evaluates the products and businesses that make up the company. True The major activity in strategic planning is product innovation. false