Chapter 2 Developing Marketing Strategies and Plans 1) The task of any business is to ________. A) create customer needs B) differentiate in terms of cost of production C) deliver customer value at a profit D) reduce competition E) communicate similar value as provided by competitors Answer: C 2) What is the traditional view of marketing? A) Firms should just focus on production because if the products are good then they will automatically sell. B) Firms should just focus on making something and then selling it. C) Firms should have a proper marketing team that can increase consumers' awareness of their products and rouse their interest in them. D) Firms should price their products as low as possible so that marketing them becomes easy. E) Firms should remember that promotion is the most important of the four Ps. Answer: B 3) Value delivery process can be divided into three phases, out of which "choosing the value" implies _______, which is the essence of strategic marketing. A) segmentation, developing, and delivering B) targeting, positioning, and communicating C) targeting, positioning, and delivering D) segmentation, targeting, and positioning E) researching, developing, and delivering Answer: D 4) AsiaCorp is one of the best in its industry in terms of costs and performance. Many companies in its industry will probably consider AsiaCorp as a ________. A) pioneer B) benchmark C) target for acquisition D) future supplier E) sounding board for ideas Answer: B 5) James Foo has been put in charge of gathering marketing intelligence, disseminating it within his organization, and eventually directing action on the information. Mr. Foo's task is best described as part of the ________. A) market-sensing process B) new-offering realization process C) customer acquisition process D) customer relationship management process E) fulfillment management process Answer: A 6) When a customer places an order at BookBox.com, the company processes the customer's payment information, sends the order to the nearest warehouse, and ships the order via FedEx. This is best described as the ________. A) market-sensing process B) customer acquisition process C) customer relationship management process D) fulfillment management process E) new-offering realization process Answer: D 7) Today, the "mass market" is actually splintering into numerous segments, each with its own wants, perceptions, preferences, and buying criteria. This implies that ________. A) the traditional marketing approach would be the best approach to follow B) the producers must consider themselves as a part of the value-chain process C) the producers should focus on niche markets D) all market segments are equally profitable E) target market strategies are no longer effective Answer: B 8) The first phase of the value creation and delivery sequence is ________ that represents the "homework" marketing must do before any product exists. A) choosing the value B) providing the value C) communicating the value D) considering the value E) acquiring the value Answer: A 9) The last step in the value creation and delivery sequence is ________ the value where the sales force, sales promotion, advertising, and other communication tools announce and promote the product. A) developing B) positioning C) communicating D) reversing E) researching Answer: C 10) In the cycle of complete strategic planning, taking corrective action is a part of ________. A) planning B) implementation C) controlling D) organizing E) analyzing Answer: C 11) The ________ in the value chain cover the sequence of bringing materials into the business (inbound logistics), converting them into final products (operations), shipping out final products (outbound logistics), marketing them (marketing and sales), and servicing them (service). A) operations processes B) manufacturing processes C) primary activities D) secondary activities E) tertiary activities Answer: C 12) Michael Porter's value chain would identify which of the following as a support activity? A) shipping out final products B) marketing products C) procurement D) servicing products E) operations Answer: C 13) Which of the following can be considered a primary activity in the value chain process? A) procurement B) human resource management C) technology development D) inbound logistics E) firm infrastructure Answer: D 14) The fulfillment management process includes all the activities in ________. A) gathering and acting upon information about the market B) researching, developing, and launching new high-quality offerings quickly and within budget standards C) defining target markets and prospecting for new customers D) building deeper understanding, relationships, and offerings to individual customers E) receiving and approving orders, shipping the goods on time, and collecting payment Answer: E 15) With respect to core business processes, the ________ includes all the activities involved in gathering market intelligence, disseminating it within the organization, and acting on the information. A) market-sensing process B) market research process C) target marketing process D) market pulse process E) deployment process Answer: A 16) With respect to the core business processes, the ________ includes all the activities involved in developing, and launching high-quality products quickly and within budget. A) market-sensing process B) new-offering realization process C) fulfillment management process D) customer acquisition process E) customer relationship management process Answer: B 17) Activities involved in building deeper understanding of existing consumers and what the product offerings mean to them would be a part of ________. A) customer acquisition process B) customer relationship management process C) customer prospecting process D) customer integrating management process E) customer equity process Answer: B 18) ________ allows the company to discover who its target markets are, how they behave, and what they need or want. It also enables the company to respond appropriately, coherently, and quickly to different customer opportunities. A) Network management B) Supply chain management C) Marketing management D) Customer relationship management E) Total quality management Answer: D 19) Another way to describe a supply chain, where companies partner with specific suppliers and distributors to ensure a smooth functioning of the system, is to call it a ________. A) teamwork group B) horizontal integration C) domestic power center D) value exploration E) value delivery network Answer: E 20) The key to utilizing organizational core competencies is to ________ that make up the essence of the business. A) force organizational departments to justify the budgetary components B) vertically integrate and own all intermediaries C) own and nurture the resources and competencies D) emphasize global promotions E) segment the workforces Answer: C 21) ________ has three characteristics: (1) it is a source of competitive advantage in that it makes a significant contribution to perceived customer benefits; (2) it has applications in a wide variety of markets; and (3) it is difficult for competitors to imitate. A) Core competency B) Market sensing process C) Corporate social responsibility D) Strategic business unit E) Philanthropy Answer: A 22) Core competencies tend to refer to areas of special technical and production expertise, whereas ________ tend to describe excellence in broader business processes. A) process benchmarks B) distinctive capabilities C) distributive capabilities D) facultative benchmarks E) concentric capabilities Answer: B 23) Holistic marketers achieve profitable growth by expanding customer share, ________, and capturing customer lifetime value. A) undermining competitive competencies B) building customer loyalty C) creating customer needs D) renewing a customer base E) cannibalizing products Answer: B 24) The holistic marketing framework is designed to address three key management questions. Which of the following is one of those questions? A) Value claims—how does the company deal with value clutter? B) Value proposition—how can value propositions be made profitable? C) Value erosion—are there weak links in the company's value chain? D) Value network—how can a company effectively network? E) Value exploration—how can a company identify new value opportunities? Answer: E 25) As Kodak addresses the digital revolution taking over the photographic industry, it wants customers to see it as a leader in digital photography. Thus, it is moving away from the production of film roll cameras. This would be an example of which of the following value creation steps? A) abandoning current product lines B) changing the corporate vision C) repositioning the company's brand identity D) redoing the corporate logo E) realigning core competencies Answer: C 26) Of the four organizational levels, the corporate level is likely to take which of the following decisions? A) entering a new market B) resource allocation for each product C) strategic plan for individual business units D) choosing specific suppliers for each business unit E) marketing plan for each product Answer: A 27) Most large companies consist of four organizational levels: the corporate level, the ________, the business unit level, and the product level. A) board of director level B) major stakeholder level C) management team level D) division level E) strategic level Answer: D 28) During Jill's market research study, many customers indicated that traditional oven gloves made it very difficult to hold baking dishes, resulting in frequent spills. Jill brought her findings to the research department, and her company leveraged its engineering and design competencies to develop a new hand-held hot-pad that allows for significantly greater dexterity in handling hot cooking implements, while protecting the cook from burns. This is an example of the ________ element of the holistic marketing framework. A) integrated marketing B) value creation C) negative demand D) value networking E) value focus Answer: B 29) The marketing plan, the central instrument for directing and coordinating the marketing effort, operates at ________ levels. A) functional and operational B) strategic and tactical C) corporate and operational D) customer and expenditure E) corporate and division Answer: B 30) The ________ lays out the target markets and the value proposition that will be offered, based on an analysis of the best market opportunities. A) organizational plan B) strategic marketing plan C) corporate tactical plan D) corporate mission E) customer-value statement Answer: B 31) Which of the following plans would most likely specify the marketing tactics, including product features, promotion, merchandising, pricing, sales channels, and service? A) the tactical marketing plan B) the target marketing plan C) the deployment plan D) the product-launch plan E) the product-development plan Answer: A 32) Which of the following is NOT one of the four planning activities undertaken by all corporate headquarters? A) defining the corporate mission B) establishing strategic business units C) assigning resources to each SBU D) assessing growth opportunities E) deciding sales channels Answer: E 33) Joe Gan plans the daily promotional releases about his company's products and services. He can be described as a(n) ________ planner. A) strategic B) selective C) tactical D) niche E) operational Answer: C 34) A clear, thoughtful mission statement provides employees with a shared sense of purpose, direction, and ________. A) profitability B) target market feasibility C) opportunity D) continuous improvement E) quality products Answer: C 35) Mission statements are at their best when they reflect a ________. A) market B) strength C) competency D) vision E) value Answer: D 36) Which of the following is one of the five major characteristics of good mission statements? A) They focus on a large number of goals. B) They expand the range of individual employee discretion. C) They define the major competitive spheres within which the company will operate. D) They take a short-term view. E) They are long and comprehensive to ensure that all critical concepts are included. Answer: C 37) The ________ is the number of channel levels, from raw materials to final product and distribution, in which a company will participate. A) industry sphere B) vertical sphere C) product/application sphere D) competence sphere E) market segment sphere Answer: B 38) Gerber primarily serves the baby food market. In choosing to focus on this market, Gerber is defining its competitive sphere on the basis of ________. A) vertical segmentation B) backward integration C) market segmentation D) diversification E) differentiation Answer: C 39) While viewing businesses in terms of customer needs can suggest additional growth opportunities, a ________ tends to focus on selling a product or service to a current market. A) strategic market definition B) target market definition C) cognitive definition D) product definition E) tactical definition Answer: B 40) What are hollow corporations? A) companies that market their products through franchisees B) companies that have liabilities exceeding their assets C) companies that outsource all production to suppliers D) companies that do not have any physical presence and only operate online E) companies that are horizontally integrated Answer: C 41) A ________ tends to focus on selling a product or service. A) target market definition B) strategic market definition C) mass-market definition D) differentiated market definition E) integrated market definition Answer: A 42) A business can be defined in terms of three dimensions: customer groups, customer needs and ___________. A) size B) technology C) competitors D) services E) products Answer: B 43) A characteristic of a ________ is that it can be a single business or collection of related businesses that can be planned separately from the rest of the company. A) strategic business unit B) subsidiary unit C) merged unit D) niche market unit E) specialized business unit Answer: A 44) A strategic-planning gap can be corrected by ________. A) changing the company's mission B) adjusting its core values C) choosing integrative growth strategies D) redefining organizational culture E) increasing resource use Answer: C 45) Market-penetration, product-development, and market-development strategies would all be examples of ________ strategies. A) concentric growth B) conglomerate C) horizontal D) intensive growth E) integrative growth Answer: D 46) Which of the following is an example of growth by diversification? A) a company introducing its existing products in a new market B) a company introducing new product category in a new market C) a company increases its product line in an existing market D) a company introducing a new product category in an existing market E) a company integrates backward to cut costs Answer: B 47) A company that seeks to increase its sales and profits through backward, forward, or horizontal integration within the industry is said to be employing a(n) ________ strategy. A) diversification growth B) intensive growth C) target growth D) integrative growth E) conglomerate growth Answer: D 48) Which of the following is an example of integrative growth? A) a company improves its market share with its current products in the current markets B) a company enters a new market with current products C) a company develops new products for its existing markets D) a company improving sales by integrating backward E) a company developing new products for new markets Answer: D 49) If you were the CEO of a company that was looking to implement strategies to fill a perceived strategic-planning gap, you would most likely explore ________ strategy first because it is easier to improve an existing business than to build a new one. A) market-penetration B) market-development C) diversification D) product-development E) exclusive Answer: A 50) Once Starbucks had established its presence in thousands of cities internationally, the company sought to increase the number of purchases by existing customers with a ________ strategy that led to new in-store merchandise, including compilation CDs and high-speed wireless access. A) product-development B) market-penetration C) diversification D) market-development E) conglomerate Answer: A 51) Qantas, the Australian national carrier, introduces flights to the Middle East. This is an example of ________. A) product development B) diversification C) market development D) market penetration E) differentiation Answer: C 52) A(n) ________ is when a company might seek new businesses that have no relationship to its current technology, products, or markets. A) concentric strategy B) conglomerate strategy C) horizontal strategy D) intensive growth strategy E) integrative strategy Answer: B 53) Which of the following terms can be defined as “the shared experiences, stories, beliefs, and norms that characterize an organization”? A) organizational dynamics B) a business mission C) an ethical/value statement D) customer relationships E) corporate culture Answer: E 54) A company’s organization consists of its structures, policies, and corporate culture, all of which can become dysfunctional in a _______________ business environment. A) competitive B) global C) rapidly changing D) stagnant E) local Answer: C 55) The first step in the business unit strategic-planning process deals with which of the following? A) formulate goals B) define business mission C) implement strategies D) execute programs E) conduct SWOT analysis Answer: B 56) Through its inventory management technology and highly efficient shipping practices, IKEA is able to keep its inventory expenditure extremely low and to pass these savings on to consumers in the form of low prices. IKEA's strategy is best described as ________. A) a focused approach B) integrative growth C) differentiation D) market development E) overall cost leadership Answer: E 57) When a firm aims to underprice competitors and win market share, it is using a(n) ________ strategy that requires relatively less marketing skills as compared to other strategies. A) product differentiation B) overall cost leadership C) focus D) domestic customer relationship E) price skimming Answer: B 58) After analyzing their company's strengths and weaknesses, top managers at Asia Loans decided to meet the needs of the DINK (dual income, no kids) market segment, Asia Loans simplified its sales contract, restructured its advertising efforts to focus on Google ads, and created a separate customer-service department. Asia Loans’ strategy is best described as a(n) ________ strategy. A) overall cost leadership B) focus C) differentiation D) diversification E) promotional Answer: B 59) Unlike its competitors in the online air travel industry, Travel.com provides its customers with a greater variety of services such as cruise reservations, package tours, hotel bookings, and car rentals. This is an example of a(n) ________ strategy. A) overall cost leadership B) focus C) differentiation D) diversification E) promotional Answer: C 60) Microsoft features Pepsi in its XBox 360 games. The best description of this form of alliance would be a(n) ________. A) product alliance B) logistics alliance C) pricing collaboration D) network alliance E) promotional alliance Answer: E 61) Hong Kong’s Li & Fung manages Avon’s supply chain. The best description of this form of alliance would be a(n) ________. A) product alliance B) logistics alliance C) pricing collaboration D) indirect collaboration E) promotional alliance Answer: B 62) In India, Pepsi built strategic alliances with Adidas and Microsoft to tap Indian cricket fans during the World Cup. The best description of this form of alliance would be a ________. A) product alliance B) logistics alliance C) pricing collaboration D) network alliance E) promotional alliance Answer: E 63) When a business gets to know market segments intimately and pursues either cost leadership or differentiation within the target segment, it is employing a ________. A) defined strategy B) focused strategy C) value-added strategy D) competitive advantage strategy E) customer-focused strategy Answer: B 64) When one company licenses another to produce its offerings, or two companies jointly market their complementary offerings, it is called a ________. A) pricing collaboration B) product or service alliance C) promotional alliance D) logistics collaboration E) total quality management Answer: B 65) To keep their strategic alliances thriving, corporations have begun to develop organizational structures to support them and have come to view the ability to form and manage strategic alliances as core skills. This is called ________. A) value managed partnership B) decentralized partnership C) centralized partnership D) partner relationship management E) intensive growth management Answer: D 66) Which of the following statements is true of marketing plans? A) They can be independently developed without worrying about other functional areas. B) They provide direction and focus for a brand, product, or company. C) They are usually profit-oriented. D) They are of limited use to non-profit organizations. E) They are typically five-year plans and they lay out the strategies required to achieve targets in those five years. Answer: B 67) Which of the following elements of a marketing plan permits senior management to grasp the organization’s main goals and recommendations? A) the situation analysis B) the marketing strategy C) the executive summary D) the financial projections E) the short-term targets Answer: C 68) The most frequently cited shortcomings of current marketing plans, according to marketing executives, are lack of realism, insufficient competitive analysis, and a ________ focus. A) long-term B) profit C) short-run D) product E) price Answer: C 69) The ________ is the last section of the marketing plan and spells out the goals and budget for each month or quarter, so management can review each period's results and take action as needed. A) executive summary B) situation analysis C) marketing strategy D) financial projections E) implementation and controls Answer: E 70) The traditional view of marketing is that the firm makes something and then sells it. Answer: True 71) Marketing goods that are currently in short supply would require significant marketing talent. Answer: False 72) The traditional view of marketing works best in economies with many different types of people, each with individual wants, perceptions, preferences, and buying criteria. Answer: False 73) In the communication stage of the value creation and delivery sequence, marketing must determine specific product features, prices, and distribution channels. Answer: False 74) The customer relationship management process involves all the activities related to receiving and approving orders, shipping the goods on time, and collecting payment. Answer: False 75) The new-offering realization process involves all activities in defining target markets and prospecting for new customers. Answer: False 76) A principle of the value chain is that every firm is a synthesis of activities performed to design, produce, market, deliver, and support its product. Answer: True 77) Another name for a company's value delivery network is "distribution chain." Answer: False 78) Competitors in a given industry can be identified by the similarities in their core competencies. Answer: False 79) A firm's core competency has applications only in the specific market in which the firm operates. Answer: False 80) Holistic marketing focuses on the integration of value exploration, value creation, and value delivery as a means to build long-term relationships with consumers. Answer: True 81) When a manager is trying to identify how the company can efficiently create promising new offerings, he is addressing the question of value delivery. Answer: False 82) The marketing plan is the central instrument for directing and coordinating the marketing effort. Answer: True 83) A strategy is a game plan for achieving long-run objectives. Answer: True 84) Mission statements that express unrealistic visions are usually unable to inspire employees to achieve their targets. Answer: False 85) Good mission statements should be long and clear, should emphasize on a wide range of goals, and stress on the company's major policies and values. Answer: False 86) If Sony defined its scope of business as “making copying equipment”, it can be classified as a marketing definition. Answer: False 87) An intensive growth strategy involving marketing current products to new markets is a market-development strategy. Answer: True 88) A company seeking to expand the number of existing products sold to its current markets, would be using a “market-penetration strategy”. Answer: False 89) If a company sought to grow by starting new businesses that have no relation to its current technology, products, or markets, the company would be using a market penetration strategy. Answer: False 90) “What will we do if it happens?” is a question that managers typically ask while conducting a scenario analysis. Answer: True 91) An environmental threat is a challenge posed by an unfavorable trend or development that, in the absence of defensive marketing action, would lead to lower sales or profit. Answer: True 92) Situation analysis in SWOT involves analyzing the possible opportunities and threats that can come from the market. Answer: True 93) Once a SWOT analysis has been completed, the strategic planner is ready to proceed to the goal formulation stage of the strategic-planning process model. Answer: True 94) In applying MBO (management by objectives) all objectives are treated as being equally important. Answer: False 95) For an MBO (management by objectives) system to work, one of the four criteria that the unit's objectives must meet is that objectives must be stated quantitatively whenever possible. Answer: True 96) Contrary to popular belief, it is not possible to maximize sales and profits simultaneously. Answer: True 97) A business that concentrates on achieving superior performance in an important customer benefit area valued by a large part of the market is following a differentiation strategy. Answer: True 98) A firm employing a focus strategy concentrates on achieving superior performance in an important customer benefit area valued by a large part of the market. Answer: False 99) Partner relationship management is now considered as a core skill fundamental to the development and maintenance of strategic alliances. Answer: True 100) Firms directing the same strategy to the same target market constitute a strategic group. Answer: True 101) A written document that summarizes what the marketer has learned about the marketplace and indicates how the firm plans to reach its marketing objectives is called a vision statement. Answer: False 102) Marketing plans are becoming more production oriented because of the high costs of doing business in today's economy. Answer: False 103) A marketing plan should open with a situation analysis. Answer: False 104) Definitions of a firm's mission as well as its marketing and financial objectives are included in the marketing strategy section of the marketing plan. Answer: True 105) Sales forecasts, expense forecasts, and break-even analysis are usually found in the section on financial projections in the marketing plan. Answer: True 106) A marketing plan is evaluated on the basis of how simple, specific, realistic and complete it is. Answer: True 107) Good marketing plans are usually short and to the point. Answer: False 108) Most marketing plans conclude with a section that indicates how the plan will be implemented. Answer: True 109) The marketing strategy section of the marketing plan spells out goals and budgets for each month or quarter so the management can review each period's results and take corrective action as needed. Answer: False 110) Briefly summarize the two views of the value delivery process that may be followed by organizations. Answer: The traditional view of marketing is that the firm makes something and then sells it. Companies that subscribe to this view have the best chance of succeeding in economies marked by goods shortages where consumers are not fussy about the quality, features, or style. If abundant choices are present, this view does not work well. Another view emphasizes the organization's role in the value delivery process. Strategic and tactical marketing are used to choose the value, provide the value, and communicate the value to consumers and channel partners. The value delivery process begins before there is a product and continues through development and after launch. 111) The firm's success depends not only on how well each department performs its work, but also on how well the various departmental activities are coordinated to conduct core business processes. List and briefly describe the five core business processes. Answer: The core business processes include (1) the market-sensing process—all the activities involved in gathering market intelligence, disseminating it within the organization, and acting on the information; (2) the new-offering realization process—all the activities involved in researching, developing, and launching new high-quality offerings quickly and within budget; (3) the customer acquisition process—all the activities involved in defining target markets and prospecting for new customers; (4) the customer relationship management process—all the activities involved in building deeper understanding, relationships, and offerings to individual customers; and (5) the fulfillment management process—all the activities involved in receiving and approving orders, shipping the goods on time, and collecting payment. 112) Describe the characteristics a core competency should possess. Answer: Core competency has three characteristics. They are: (1) it is a source of competitive advantage; (2) it has applications in a wide variety of markets; and (3) it is difficult for competitors to imitate. 113) A holistic marketing orientation can provide insight into the process of capturing customer value and is designed to address three key management questions. Describe each of these key management questions in brief. Answer: The three management questions are: (1) value exploration—how can a company identify new customer-value opportunities? (2) value creation—how can a company efficiently create more promising new customer-value offerings? and (3) value delivery—how can a company use its capabilities and infrastructure to deliver the new customer-value offerings more efficiently? 114) Indicate the differences and similarities between the following terms: marketing plan, strategic marketing plan, and tactical marketing plan. Answer: The marketing plan is the central instrument for directing and coordinating the marketing effort. It operates at two levels: strategic and tactical. The strategic marketing plan lays out the target markets and the value proposition that will be offered, based on an analysis of the best market opportunities. The tactical marketing plan specifies the marketing tactics, including product features, promotion, merchandising, pricing, sales channels, and service. 115) Good mission statements are essential to being a success in business. Describe the three major characteristics that good mission statements should have. Answer: Major characteristics of mission statements include the following: (1) focus on a limited number of goals; (2) stress on the company's major policies and values; (3) definition of the major competitive spheres within which the company will operate (e.g., industry, products and applications, competence, market segment, vertical, and geographical); (4) a long-term view; and (5) should be as short, memorable, and meaningful as possible. 116) During the planning process, if there is a gap between future desired sales and projected sales, corporate management will need to develop or acquire new businesses to fill it. Identify and describe the three strategies that can be used to fill the strategic gap. Answer: The first option is to identify opportunities to achieve further growth with current businesses (intensive growth opportunities). The second option is to identify opportunities to build or acquire businesses that are related to current businesses (integrative growth opportunities). The third is to identify opportunities to add attractive businesses that are unrelated to the existing businesses (diversification growth opportunities). 117) Outline the steps involved in business unit strategic-planning process. Answer: Students should describe (in order) the business mission, SWOT analysis, goal formulation, strategy formulation, program formulation and implementation, and feedback and control. The business unit strategic-planning process typically involves: 1. Situation analysis, including internal assessment (resources, capabilities) and external analysis (market trends, competition). 2. Strategy formulation, focusing on setting objectives, identifying strategic options, and making strategic choices based on analysis findings. 118) Identify and give examples of the four major categories of strategic alliances. Answer: The four major categories of strategic alliances include (1) product or service alliances, where one company licenses its product, or two companies jointly market their complementary products or a new product; (2) promotional alliances, where one company agrees to carry a promotion for another company's product or service; (3) logistics alliances, where one company offers logistical services for another company's product; and (4) pricing collaboration, where one or more companies join in an agreement on coordinated pricing. Student examples may vary. The four major categories of strategic alliances are: 1. Joint Ventures: Two companies create a new entity, like Sony Ericsson. 2. Equity Alliances: One company invests in another, such as Toyota's investment in Uber. 3. Non-Equity Alliances: Companies collaborate through contracts, like Starbucks and Barnes & Noble. 4. Franchising: A company allows another to operate using its brand, such as McDonald's franchises. 119) Characterize a marketing plan. Answer: A marketing plan is a written document that summarizes what the marketer has learned about the marketplace and indicates how the firm plans to reach its marketing objectives. It contains tactical guidelines for the marketing programs and financial allocations over the planning period. 120) Briefly summarize the contents of a marketing plan. Answer: The contents of a marketing plan include (1) an executive summary and table of contents; (2) a situation analysis; (3) marketing strategy; (4) financial projections; and (5) implementation controls. 121) Hot Topic, a chain that sells rock-band-inspired clothes for teens, recently launched Torrid to give plus-size teens the same fashion options. Identify the three parts of the value delivery process and their function for Hot Topic. Answer: The first phase, choosing the value, represents the "homework" marketing must do before any product exists. The second phase, providing the value, is where product features, prices, and distribution are selected. The third phase, communicating the value, utilizes the sales force, sales promotion, advertising, and other communication tools to announce and promote the product. 122) Critics of Nike often complain that its shoes cost almost nothing to make, yet they are priced so high. Identify the elements of providing and communicating value that add to Nike's cost structure and result in the high price of Nike shoes. Answer: Although the raw materials and manufacturing costs of a sneaker are relatively low, marketing the product to the consumer is quite expensive. Providing value includes R&D costs and the costs associated with shipping to retail locations as well as the retailers' overhead. Communicating value includes obtaining celebrity endorsement and extensive advertising. Nike must also pay for a sales force that communicates the product's value to retailers and helps ensure that products are available in retail locations convenient to end consumers. 123) Over the past 10 years, Cisco Systems has drastically reduced its number of suppliers and aligned itself more closely with its remaining suppliers for each of its product-based teams. How might this have helped Cisco improve its new-offering realization process? Answer: By reducing the number of suppliers it uses, Cisco is able to work more closely with its few remaining suppliers, involving them in new-product development and tapping their expertise in improving overall product quality and supplier relationship. 124) In the central role of strategic planning, only a handful of companies stand out as master marketers—Procter & Gamble, Samsung, Nike, Disney, Toyota, Sony, and McDonald's to name a few. From a consumer's perspective why do you think they stand out? Explain. Answer: Students should explain that these companies focus on the customer and are organized to respond effectively to changing customer needs. They all have well-staffed marketing departments, and all their other departments—manufacturing, finance, research and development, personnel, purchasing—also accept the concept that the customer is king. These companies stand out due to their consistent delivery of high-quality products, strong brand identities, effective marketing campaigns, and a deep understanding of consumer preferences and behavior, which builds trust and loyalty among consumers. 125) Identify the elements of a tactical marketing plan for a new kind of cola. Answer: The tactical marketing plan specifies the marketing tactics, including product features, promotion, merchandising, pricing, sales channels, and service. For a new kind of cola, the tactical marketing plan might include the packaging size and shape, the flavor, the kinds of advertising used (print, television, buzz marketing), how to price the new cola relative to other colas currently on the market, and where to sell the new cola (grocery stores, gas stations, vending machines, sandwich shops). 126) Lee’s Butchery has decided to purchase a meat-processing plant to gain more control of its beef supply and improve its profits. Which form of integrative growth strategy has Lee's employed? Answer: Lee's has selected a backward integration strategy. Lee's Butchery has employed a vertical integration strategy by purchasing a meat-processing plant to control its beef supply chain. 127) From its origins as an animated film producer, Walt Disney Company has moved into licensing characters for merchandised goods and developed theme parks and vacation and resort properties. What strategy best describes Disney's growth? Answer: Disney has employed a diversification growth strategy, taking advantage of opportunities outside its original animated film business, leveraging the strength of its characters in new businesses. 128) When Yahoo! began to flounder in 2001, CEO Terry Semel imposed a more conservative, buttoned-down atmosphere on the freewheeling Internet start-up. At the new Yahoo!, spontaneity is out and order is in. Identify this organizational phenomenon. Answer: This could be described as a change in corporate or organizational culture. Corporate culture has been defined as “the shared experiences, stories, beliefs, and norms that characterize an organization”. This organizational phenomenon is often referred to as a shift towards a bureaucratic or formalized organizational culture, emphasizing structure, rules, and hierarchy over flexibility and innovation. 129) Describe what happens in scenario analysis and explain why firms such as Royal Dutch/Shell Group use the technique. Answer: Scenario analysis consists of developing plausible representations of a firm's possible future that make different assumptions about forces driving the market and include different uncertainties. Answers may vary on why to use the concept but answers should be mindful of the definition given. Students should try to anticipate the problems that are likely to aggravate in the energy industry and how scenario analysis may help the companies to anticipate the future and be prepared to adjust their processes accordingly. In scenario analysis, companies create and explore multiple potential future scenarios to assess the impact of various risks and opportunities. Firms like Royal Dutch/Shell use this technique to better prepare for uncertainties and make more resilient strategic decisions. 130) Explain what happens in a SWOT analysis during the strategic planning process. Answer: SWOT (strengths, weaknesses, opportunities, and threats) monitors the external and internal environment by examining key macroeconomic and microeconomic forces and actors that have an impact on the organization's business and industry. 131) Good marketing is the art of finding, developing, and profiting from marketing opportunities. What are the three primary methods for uncovering possible product or service improvements? Answer: Methods for uncovering possible product or service improvements include (1) the problem detection method, which asks consumers for their suggestions; (2) the ideal method, which asks consumers to imagine an ideal version of the product or service; and (3) the consumption chain method, which asks consumers to chart their steps in acquiring, using, and disposing of a product. 132) What questions would typically be asked during a market opportunity analysis (MOA)? Answer: Questions would typically be: (1) Can the benefits involved in the opportunity be articulated convincingly to a defined target market(s)? (2) Can the target market(s) be located and reached with cost-effective media and trade channels? (3) Does the company possess or have access to the critical capabilities and resources needed to deliver the customer benefits? (4) Can the company deliver the benefits better than any actual or potential competitors? and (5) Will the financial rate of return meet or exceed the company's required threshold for investment? 133) For an MBO system (manage by objectives) to work, the business unit attempting to implement the process must meet four criteria. What are those criteria? Answer: The criteria are: (1) they must be arranged hierarchically, from the most to the least important; (2) objectives should be stated quantitatively whenever possible; (3) goals must be realistic; and (4) objectives must be consistent. 134) Michael Porter draws a firm distinction between operational effectiveness and a strategy. Briefly describe this distinction and identify when a company can claim that it has a strategy. Answer: Competitors can quickly copy the operationally effective company using benchmarking and other tools, thus diminishing the advantage of operational effectiveness. Porter defines strategy as “the creation of a unique and valuable position involving a different set of activities”. A company can claim that it has a strategy when its activities differ from those of its rivals or performs similar activities in different ways. 135) Warner Brothers has an alliance to release its movies in high-definition DVD in Sony’s Blu-ray format. This would classify as which type of strategic alliance? Explain your answer. Answer: This alliance is called a product or service alliance where one company licenses another to produce its product, or two companies jointly market their complementary products or a new product. Test Bank for Marketing Management: A South Asian Perspective Philip Kotler, Kevin Lane Keller, Abraham Koshy, Mithileshwar Jha 9789810687977, 9780132102926
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