Preview Extract
Chapter 1 The Planning Process
1) Why are marketing plans in a written format instead of verbal?
A) to outsource the document to professional marketing plan creators
B) to document the formal company agreements legally
C) to understand the differences between a marketing plan and a business plan
D) to aid collaboration by circulating it among various departments
Answer: D
Rationale:
Marketing plans are written to ensure clarity, consistency, and dissemination of information
across various departments within a company. A written format allows for easy reference,
understanding, and collaboration among stakeholders.
2) Which of the following companies would have different marketing plans for specific
products or services?
A) a start-up company offering security services to banks in Tulsa, Oklahoma
B) a multinational electronics manufacturer with many strategic business units
C) a mining company offering treated bauxite (aluminium ore) to a few Aluminium
companies
D) a company selling organically manufactured cereal in New Orleans
Answer: B
Rationale:
Multinational electronics manufacturers typically have various product lines or strategic
business units (SBUs), each requiring tailored marketing strategies based on market
dynamics, target audience, and product differentiation.
3) Which of the following types of companies most likely has a single marketing plan for the
whole firm?
A) a large multinational electronics company offering many products
B) an international chain of fast food restaurants offering specialty pizzas
C) a manufacturer of ivory fountain pens aimed at a niche market
D) a global airline company offering luxury air travel
Answer: C
Rationale:
Companies targeting niche markets with a single product or service offering often develop a
unified marketing plan since their focus is not diversified across multiple products or market
segments.
4) Quarterly planning cycles are recommended for companies that are operating in ________.
A) declining markets
B) well-established markets
C) dynamic markets
D) static markets
Answer: C
Rationale:
Dynamic markets undergo rapid changes, requiring frequent assessment and adjustment of
strategies. Quarterly planning cycles enable companies to adapt to market dynamics more
effectively.
5) Companies will implement ________ to take advantage of market opportunities.
A) annual marketing cycle
B) quarterly marketing cycle
C) ad hoc marketing plans
D) two-year marketing plans
Answer: C
Rationale:
Ad hoc marketing plans allow companies to respond quickly to emerging market
opportunities or unexpected events, providing flexibility in capitalizing on short-term
advantages.
6) Annual marketing plans are usually used for ________.
A) well-established markets
B) dynamic markets
C) nascent markets
D) declining markets
Answer: A
Rationale:
Annual marketing plans are suitable for well-established markets where trends and consumer
behaviors are relatively stable, allowing for longer-term strategic planning.
7) Who will write the marketing plan in a small-sized, start-up firm?
A) the retail outlet manager
B) the product manager
C) the brand manager
D) the chief executive officer
Answer: D
Rationale:
In a small-sized start-up firm, the chief executive officer (CEO) typically oversees and is
directly involved in strategic decisions, including the formulation of the marketing plan.
8) Which of the following actions implies that a manager is working on a business plan rather
than a marketing plan?
A) implementing ad hoc plans to take advantage of market opportunities
B) including details on the operational activities of the firm
C) mapping out strategies to achieve a productive end
D) identifying potential new competitors
Answer: B
Rationale:
Business plans encompass operational aspects of the entire organization, including
production, logistics, and finance, whereas marketing plans focus specifically on marketing
strategies and activities.
9) Which of the following is an input into the marketing plan that is provided by the finance
department of the company?
A) cost structure for operations
B) required return on investment for new projects
C) implementation capabilities
D) customer feedback on services or products delivered to customers
Answer: B
Rationale:
The finance department provides crucial financial metrics such as required return on
investment, budget allocation, and financial forecasts, which are essential inputs for
determining the financial feasibility and effectiveness of marketing initiatives.
10) Technological expertise is an input into the market plan that is provided by the ________
department.
A) finance
B) operations
C) professional services
D) engineering
Answer: D
Rationale:
Engineering departments possess technological expertise relevant to product development,
innovation, and technical specifications, which are essential for crafting marketing strategies
focused on product features, benefits, and differentiation.
11) Funding required to develop new products and services would be an output from the
marketing plan for the ________ department.
A) finance
B) operations
C) professional services
D) engineering
Answer: A
Rationale:
The finance department is responsible for budgeting and financial planning, including
allocating funds for product development based on the recommendations and requirements
outlined in the marketing plan.
12) The marketing plan sales forecast would be an output from the marketing plan for the
________ department.
A) finance
B) operations
C) professional services
D) engineering
Answer: B
Rationale:
Sales forecasts are crucial for operational planning, inventory management, and resource
allocation, making them a key output for the operations department to ensure smooth
execution of marketing strategies.
13) The specific services or product features demanded by a market is an output from the
marketing plan for the ________ department.
A) finance
B) operations
C) professional services
D) engineering
Answer: D
Rationale:
Engineering departments play a vital role in product development, ensuring that the features
and specifications align with market demands as outlined in the marketing plan.
14) Which of the following is an input to the marketing plan by the engineering group?
A) required return on investment for new projects
B) funding required to develop new products and services
C) specific services or product features demanded by the market
D) customer feedback on products or services delivered to customers
Answer: D
Rationale:
Customer feedback provides insights into product performance, usability, and areas for
improvement, which are crucial inputs for engineering teams to refine products based on
market demands.
15) The first step in a market planning process is ________.
A) the setting of objectives for the market plan's project
B) the selection of the marketing strategy
C) the allocation of financial resources for the plan
D) the selection of the marketing mix
Answer: A
Rationale:
Setting clear and achievable objectives is essential for defining the purpose and direction of
the marketing plan before proceeding with strategy development and resource allocation.
16) In a marketing planning process, after setting the objectives for the market plan, the next
step is to ________.
A) determine profitable opportunities in the market
B) execute the plan's strategy
C) enable contingency plans if things go wrong
D) monitor key marketing metrics
Answer: A
Rationale:
Identifying profitable opportunities involves analyzing market trends, consumer behavior,
and competitive landscape to inform the development of effective marketing strategies
aligned with the established objectives.
17) Which step of the marketing planning process controls the marketing plan by monitoring
key marketing metrics and enabling contingency plans if things go wrong?
A) objectives
B) market opportunities
C) strategy
D) finance and implementation
Answer: D
Rationale:
The finance and implementation step focuses on monitoring key performance indicators,
financial metrics, and implementing contingency plans to ensure the marketing plan's
effectiveness and adaptability.
18) In a marketing plan outline, the ________ gives the reader a quick overview of the
marketing plan.
A) executive summary
B) implementation
C) market overview
D) strategy
Answer: A
Rationale:
The executive summary provides a concise summary of the key elements of the marketing
plan, including objectives, strategies, and anticipated outcomes, allowing stakeholders to
grasp the plan's essence quickly.
19) The objectives section in a marketing plan ________.
A) examines the separate groups that make up the market
B) surveys the organization's competition
C) covers the goals of the marketing plan project
D) provides a sketch of the market in which the plan is to be implemented
Answer: C
Rationale:
The objectives section outlines the specific goals and targets that the marketing plan aims to
achieve, providing a clear direction for the overall project and guiding subsequent strategy
development.
20) In the marketing plan outline, the ________ section provides a sketch of the market in
which the plan is to be implemented.
A) implementation
B) market overview
C) market segments
D) competitive landscape
Answer: B
Rationale:
The market overview section provides a comprehensive analysis of the target market,
including demographics, trends, competitor analysis, and market size, setting the context for
the marketing strategies outlined in the plan.
21) In which section of the marketing planning process is market characteristics like size,
growth rate, and trends established?
A) objectives
B) market overview
C) strategy
D) competitive landscape
Answer: B
Rationale:
The market overview section provides a comprehensive analysis of market characteristics,
including size, growth rate, trends, and other relevant factors, to establish a foundational
understanding of the market environment.
22) In which section of the marketing planning process is positioning approaches for the
segments addressed?
A) objectives
B) market overview
C) market segments
D) competitive landscape
Answer: C
Rationale:
Positioning approaches for different market segments are addressed within the market
segments section of the marketing planning process, where strategies for targeting and
positioning products/services are developed based on segment characteristics and needs.
23) In the marketing planning outline, the ________ section leverages the market
opportunities discovered in the competitive landscape section to determine a general
approach to accomplishing the plan's objectives.
A) objectives
B) market overview
C) strategy
D) market segments
Answer: C
Rationale:
The strategy section of the marketing planning outline utilizes insights from the competitive
landscape to formulate an overall approach to achieve the objectives outlined in the plan.
24) The tactics an organization will use to develop products and services for the market
would be covered under the ________ section in the marketing planning outline.
A) objectives
B) strategy
C) marketing mix
D) competitive landscape
Answer: C
Rationale:
The marketing mix section of the marketing planning outline details the specific tactics and
strategies related to product development, pricing, distribution, and promotion.
25) Which of the following sections of a marketing planning outline addresses strategies to
take advantage of market opportunities after surveying the other players in the industry?
A) objectives
B) strategy
C) marketing mix
D) competitive landscape
Answer: D
Rationale:
The competitive landscape section of the marketing planning outline assesses competitors
and market opportunities, leading to the formulation of strategies to capitalize on these
opportunities.
26) Which of the following sections of the marketing planning outline is part of the
marketing mix?
A) finance
B) strategy
C) promotion
D) recommendation
Answer: C
Rationale:
Promotion is a component of the marketing mix, which also includes product, price, and
place (distribution). It involves strategies for communicating with and persuading target
customers.
27) Which of the following sections of the marketing mix covers tactics to distribute the
organization's products or services to the customer?
A) product
B) place
C) promotion
D) price
Answer: B
Rationale:
The "place" component of the marketing mix focuses on distribution strategies, including
channels, logistics, and locations through which products or services are made available to
customers.
28) In which of the following sections of the marketing planning outline are contingency
plans enabled?
A) competitive landscape
B) strategy
C) promotion
D) implementation
Answer: D
Rationale:
Contingency plans, which outline responses to unexpected events or changes in the market,
are typically enabled and detailed within the implementation section of the marketing
planning outline.
29) The pro forma income statement and budget is dealt with in the ________ section of the
marketing planning outline.
A) finance
B) strategy
C) promotion
D) price
Answer: A
Rationale:
The finance section of the marketing planning outline includes financial projections, budget
allocations, and pro forma income statements, detailing the financial aspects of the marketing
plan.
30) Which of the following sections in the marketing planning outline is optional?
A) implementation
B) competitive landscape
C) executive summary
D) recommendations
Answer: D
Rationale:
Recommendations are often included as part of the marketing planning process, but they may
be considered optional depending on the specific format or requirements of the plan.
31) Which of the following sections of the marketing planning outline contains additional
information deemed vital by the marketing plan's writer?
A) implementation
B) competitive landscape
C) recommendations
D) executive summary
Answer: C
Rationale:
The recommendations section of the marketing planning outline allows the writer to include
additional information that they deem vital for the successful implementation of the
marketing plan. This may include specific action steps, suggested strategies, or key insights
derived from the analysis conducted throughout the planning process.
32) A marketing plan is a written document that covers the situation, strategy, and tactics to
accomplish a specified set of objectives within the time period covered by the plan.
Answer: True
Rationale:
A marketing plan is indeed a written document that provides a comprehensive outline of the
current market situation, the strategies to be employed, and the specific tactics to achieve the
stated objectives within a defined timeframe.
33) The verbal form of a marketing plan helps in circulating it among cross-functional group
members in an organization.
Answer: False
Rationale:
Verbal communication may lead to misinterpretation or loss of crucial details. A written
format ensures clarity and consistency in conveying the marketing plan's content, facilitating
better understanding and collaboration among cross-functional teams.
34) Product companies normally have marketing plans for specific products or services.
Answer: True
Rationale:
Product companies often have diverse product lines or services, each requiring a tailored
marketing strategy. Therefore, it is common for such companies to develop marketing plans
for individual products or services to ensure targeted and effective marketing efforts.
35) An annual planning cycle is recommended for dynamic markets.
Answer: False
Rationale:
In dynamic markets characterized by rapid changes and uncertainties, shorter planning cycles
such as quarterly or semi-annual are often recommended. This allows companies to adapt
more swiftly to market shifts and capitalize on emerging opportunities.
36) Marketing plans include details of an organization's operations and human resources.
Answer: False
Rationale:
Marketing plans primarily focus on marketing strategies, tactics, and objectives rather than
operational details or human resources management, which are typically covered in separate
operational or HR plans.
37) A good marketing planning establishes specific objectives and targets, laying the
foundation for successful execution of the plan.
Answer: True
Rationale:
Clear and measurable objectives are essential for guiding marketing efforts and evaluating
their effectiveness. Establishing specific objectives and targets provides a roadmap for
successful execution and ensures alignment with overall business goals.
38) Without buy-in from key stakeholders, even the most carefully prepared plan is doomed
to failure.
Answer: True
Rationale:
Stakeholder buy-in is crucial for the successful implementation of any plan, including
marketing plans. Without support and commitment from key stakeholders such as
management, employees, and investors, executing the plan becomes challenging and its
effectiveness may be compromised.
39) Objectives in the marketing planning process are based on the organization's mission and
competitive advantage.
Answer: True
Rationale:
Objectives in a marketing plan should be aligned with the organization's mission, vision, and
competitive advantage to ensure strategic coherence and maximize the utilization of
resources towards achieving the company's goals.
40) The first step in a marketing planning process is determining potentially profitable
opportunities in the market.
Answer: False
Rationale:
The first step in the marketing planning process typically involves conducting a situational
analysis, which includes assessing the current market situation, identifying market trends,
analyzing competitors, and understanding consumer behavior. Determining profitable
opportunities usually comes after this initial analysis.
41) In a marketing plan, the executive summary section of a marketing plan is written first.
Answer: False
Rationale:
The executive summary, which provides a concise overview of the entire marketing plan, is
usually written after the completion of the plan's content. It serves as a snapshot of the key
points covered in the plan and is placed at the beginning for easy reference.
42) In a marketing plan, the strategy section leverages the market opportunities to determine
a general approach to accomplishing the plan's objectives.
Answer: True
Rationale:
The strategy section of a marketing plan indeed utilizes insights from market opportunities to
formulate an overall approach aimed at achieving the specified objectives effectively.
43) In a marketing plan, the market segments section surveys an organization's competition.
Answer: False
Rationale:
The market segments section of a marketing plan focuses on identifying and analyzing
different segments within the target market based on factors like demographics,
psychographics, and behaviors, not on surveying competition.
44) In a marketing plan, product, price, place, and promotion are the components of the
marketing mix.
Answer: True
Rationale:
Product, price, place (distribution), and promotion are indeed the four components of the
marketing mix, which collectively form the foundation of marketing strategy.
45) Market characteristics such as size, growth rate, and trends are established in the market
overview section in a marketing plan.
Answer: True
Rationale:
The market overview section provides a comprehensive analysis of market characteristics,
including size, growth rate, trends, and other relevant factors, to establish a foundational
understanding of the market environment.
46) The market overview in a marketing plan provides a summary of the whole marketing
plan.
Answer: False
Rationale:
The market overview section provides an analysis of the market environment and
characteristics, but it does not summarize the entire marketing plan. It serves to set the stage
for the strategies and tactics outlined in the plan.
47) The implementation section in a marketing plan includes the use of control metrics and
contingency plans.
Answer: True
Rationale:
The implementation section of a marketing plan outlines how the strategies and tactics will be
executed, including the use of control metrics to measure performance and contingency plans
to address unexpected events or changes.
48) The market segment section of a marketing plan covers market segmentation, targeting,
and positioning.
Answer: True
Rationale:
The market segment section focuses on identifying different segments within the target
market, selecting target segments, and positioning the product or service to appeal to those
segments.
49) The finance section of a marketing plan is part of the marketing mix.
Answer: False
Rationale:
The finance section of a marketing plan typically includes financial projections, budget
allocations, and cost estimates, but it is not part of the marketing mix, which specifically
refers to product, price, place, and promotion strategies.
50) The place section in a marketing plan covers tactics to distribute the organization's
products or services to the customer.
Answer: True
Rationale:
The place section of a marketing plan focuses on distribution strategies, including channels,
logistics, and locations through which products or services are made available to customers.
51) The promotion section of a marketing plan covers financial analysis, including breakeven, pro forma income statement, and budget.
Answer: False
Rationale:
The promotion section of a marketing plan primarily focuses on strategies and tactics related
to promotional activities such as advertising, sales promotions, public relations, and personal
selling. Financial analysis typically falls under the finance section of the plan.
52) The inclusion of the recommendation section in a marketing plan is optional.
Answer: True
Rationale:
The recommendation section of a marketing plan may be included depending on the specific
requirements or preferences of the organization. It provides an opportunity to offer
suggestions or proposals for implementing the strategies outlined in the plan.
53) The recommendation section of a marketing plan includes the most important actions to
be taken, including the sense of urgency.
Answer: True
Rationale:
The recommendation section of a marketing plan typically outlines the key actions to be
taken based on the analysis and findings presented in the plan. It often prioritizes these
actions and may include a sense of urgency to emphasize critical tasks or opportunities that
require immediate attention.
54) What is a marketing plan?
Answer: A marketing plan is a written document that covers the situation, strategy, and tactics
to accomplish a specified set of objectives within the time period covered by the plan. The
plan can be seen as a blueprint for a marketing project, with objectives, tactics, and
implementation details to ensure a successful outcome.
55) Why are marketing plans in a written format?
Answer: Marketing plans are in written format, instead of verbal, because when marketers
develop ideas on paper it is easier to circulate the plan among cross-functional group
members, aiding collaboration.
56) Depending on what is to be accomplished with the marketing plan, what are the different
ways of viewing an organization?
Answer: The term "organization" can be viewed in different ways, depending on what is to be
accomplished with the marketing plan.
• Small Companies (like start-ups): Marketing plan for the entire firm
• Large Companies (like IBM): Marketing plan for a strategic business unit (SBU)
• Product/Service Companies: Marketing plan for specific products or services
57) What are the similarities and differences a marketing plan has with a business plan?
Answer: Marketing plans are similar to business plans in that they both map out the strategy
to achieve a productive end. Unlike business plans, marketing plans do not include details on
non-marketing-related activities such as operations and human resources.
58) What is the role of cross functional collaboration in the planning process?
Answer: Effective marketing planning demands collaboration across departments or groups
within the organization throughout the entire planning process to gain buy-in on the plan.
Cross-functional collaboration is a vital element of modern organizations. Without buy-in
from key stakeholders, even the most carefully prepared plan is doomed to failure.
59) What are the advantages of effective market planning?
Answer:
1) Discipline - Forces a disciplined approach to a market; can avoid the omission of a key
aspect of the market and ensure a consistent approach across the organization when multiple
groups participate in the planning process.
2) New Opportunities - Identifies potential new opportunities
3) New Competitors - Identifies potential new competitors
4) Clear Objectives - Establishes specific objectives and targets, laying the foundation to
successful execution of the plan
5) Clear Programs - Lays out specific programs that contribute to the execution of the plan
6) Clear Responsibilities - Identifies specific responsibilities throughout the organization,
ensuring that everyone knows what their role is and reducing potential conflicts
7) Clear Metrics - Quantifies success/ failure metrics
8) Customer Focus - Provides new information on customers, ways to segment them, and
different approaches to serve their needs
9) Cross-Functional - Identifies involvement by other departments
60) Write a note on the inputs into, and outputs from the marketing plan, with regard to the
engineering group of an organization.
Answer: Inputs include customer feedback on services or products delivered to customers and
technological expertise. Outputs from the plan include specific services or product, features
demanded by market and overall plan for the planning period.
61) Write a note on the inputs into, and outputs from the marketing plan, with regard to the
finance group of an organization.
Answer: Inputs include the required return on investment for new projects (sometimes called
hurdle rate).
The outputs include financial break-even for new projects; Cost of goods sold; Funding
required to develop new products and services.
62) What are the input the stakeholder groups can provide to a marketing plan? What are the
outputs that these stakeholder groups will receive from the plan?
Answer:
1) Operations - Inputs are cost structure for operations. Outputs include marketing plan sales
forecast, which will drive the operations schedule.
2) Finance - Inputs include required return on investment for new projects (sometimes called
hurdle rate). Outputs include financial break-even for new projects; Cost of goods sold;
Funding required to develop new products and services
3) Professional Services - Inputs include implementation capabilities. outputs include new
services and products to implement.
4) Engineering - Inputs include customer feedback on services or products delivered to
customers; Technological expertise. Outputs include specific services or product features
demanded by market and overall plan for coming planning period
5) Other - Marketing staff and CEO/COO office could have specific requirements to support
company-wide objectives.
Outputs - marketing plan can impact HR hiring requirements and other groups.
63) What is the market planning outline?
Answer: The marketing plan outline follows the marketing planning process. Throughout the
planning process, the marketer must make many decisions about how the organization's
offerings will be marketed.
64) Write a note on the market opportunities step of the marketing planning process.
Answer: In the market opportunities step of the planning process, we determine potentially
profitable opportunities in the market, based on a review of market overview data, targeted
market segments, and competitive landscape.
65) Write a note on the marketing mix section of the marketing planning process.
Answer: The marketing mix is the combination of elements we will use to execute the plan's
strategy. The marketing mix is also called the 4Ps: product (or service), price, place
(distribution), and promotion.
66) Write a note on the market planning process.
Answer: The marketing planning process consists of several steps, as described below.
Objectives: First, we set objectives for the plan's project, based on the organization's mission
and competitive advantage.
Market Opportunities: Next, we determine potentially profitable opportunities in the market,
based on a review of market overview data, targeted market segments, and competitive
landscape.
Strategy: We select our strategy, considering the objectives we want to achieve and the
market opportunities available to us.
Marketing Mix: The marketing mix is the combination of elements we will use to execute the
plan's strategy. The marketing mix is also called the 4Ps: product (or service), price, place
(distribution), and promotion.
Finance and Implementation: We execute on the plan, allocating financial resources to it,
controlling it by monitoring key marketing metrics, and enabling contingency plans if (or
when!) things go wrong.
67) What are the sections of a market planning outline? Briefly explain each section.
Answer: The marketing plan outline follows the marketing planning process. Throughout the
planning process, the marketer must make many decisions about how the organization's
offerings will be marketed. The following sections make up the marketing plan.
Executive Summary: This section gives the reader a quick overview of the plan. It should
only be one or two pages in length. Although it appears first, it is written last, after all the
other sections have been prepared and the writer is in a good position to summarize the plan.
Objectives: This section covers the goals of the marketing plan project, reflecting the mission
and competitive advantages of the organization.
Market Overview: This section provides a sketch of the market in which the plan is to be
implemented. We establish market characteristics such as size, growth rate, and trends.
Market Segments: This section examines the separate groups that make up the market, and
addresses positioning approaches for the segments.
Competitive Landscape: This section surveys the organization's competition, and addresses
strategies to take advantage of market opportunities.
Strategy: This section leverages the market opportunities discovered in the previous section
to determine a general approach to accomplishing the plan's objectives.
Products/Services: With this section, we begin our focus on the marketing mix, starting with
the tactics the organization will use to develop products and services for the market.
Price: The second portion of the marketing mix covers the tactics to establish pricing
objectives and set the price.
Place (Distribution): With this section, we begin our focus on the marketing mix, starting
with the tactics on how the organization will communicate the benefits of its products or
services.
Promotion: The final portion of the marketing mix covers the tactics on how the organization
will communicate the benefits of its products or services.
Finance: This section develops a financial analysis, including break-even, pro forma income
statement, and budget.
Implementation: This section discusses tools to ensure successful implementation of the plan,
including schedules, control metrics, and contingency plans.
Recommendations: This section is optional. It provides any additional information deemed
vital by the plan's writer to include, such as prioritization of effort and/or sense of urgency.
Test Bank for Marketing Planning
Stephan Sorger
9780132544702
