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Chapter 2 - Planning, Implementing, and Evaluating Marketing Strategies 1. Describe the process of strategic planning. How does this process help marketing managers? Answer: Through the process of strategic planning, a company establishes an organizational mission and formulates goals, a corporate strategy, marketing objectives, and a marketing strategy. A market orientation should guide the process of strategic planning to ensure that a concern for customer satisfaction is an integral part of the entire company, leading to the development of successful marketing strategies and planning processes. The strategic planning process begins with the establishment or revision of an organization's mission and goals. The corporation and individual business units then develop strategies to achieve these goals. The company performs a detailed analysis of its strengths and weaknesses and identifies opportunities and threats within the external marketing environment. Next, each functional area of the organization (marketing, production, finance, human resources, etc.) establishes its own objectives and develops strategies to achieve them, which must support the organization’s overall goals and mission and should be focused on market orientation. 2. How does having a mission statement help an organization achieve its goals? Answer: Once an organization has assessed its resources and opportunities, it can begin to establish goals and strategies to leverage them. The goals of any organization should derive from its mission statement, a long-term view, or vision, of what the organization wants to become. A well-formulated mission statement gives an organization a clear purpose and direction, distinguishes it from competitors, provides direction for strategic planning, and fosters a focus on customers. An organization’s goals, which focus on desired results, guide the remainder of its planning efforts. 3. Differentiate between corporate strategy and marketing strategy. Answer: Corporate strategy determines the means for utilizing resources in the functional areas of marketing, production, finance, research and development, and human resources to achieve the organization’s goals. A corporate strategy outlines the scope of the business and such considerations as resource deployment, competitive advantages, and overall coordination of functional areas. On the other hand, a marketing strategy involves the selection of a target market and the creation of a marketing mix that will satisfy the needs of target market members. A marketing strategy articulates the best use of the company’s resources to accomplish its marketing objectives. Selecting an appropriate target market may be the most important decision a company makes in the strategic planning process and is a key to strategic success. The target market must be chosen before the organization can adapt its marketing mix to meet the customers’ needs and preferences. 4. Give a brief account of a strategic business unit (SBU). Answer: A strategic business unit (SBU) is a division, product line, or other profit centre within the parent company. Each SBU sells a distinct set of products to an identifiable group of customers and each competes with a well-defined set of competitors. The revenues, costs, investments, and strategic plans of an SBU can be separated from those of the parent company and evaluated. 5. Give a brief account of the four product categories used in the Boston Consulting Group (BCG) product-portfolio analysis. Answer: One of the most helpful tools for a marketer is the market growth/market share matrix, developed by the Boston Consulting Group (BCG). This approach is based on the philosophy that a product’s market growth rate and its market share are important considerations in determining marketing strategy. The BCG matrix enables a strategic planner to classify a company’s products into four basic types: stars, cash cows, dogs, and question marks. Stars are products with a dominant share of the market and good prospects for growth. However, they use more cash than they generate in order to finance growth, add capacity, and increase market share. Cash cows have a dominant share of the market, but low prospects for growth. They typically generate more cash than is required to maintain market share. Dogs have a subordinate share of the market and low prospects for growth. Dogs are often found in established markets. Question marks, sometimes called “problem children,” have a small share of a growing market and require a large amount of cash to build market share. 6. How does a firm use a market opportunity to reach a particular target market? Answer: Analysis of the marketing environment also includes identifying opportunities in the marketplace, which requires a solid understanding of the company’s industry. When the right combination of circumstances and timing permits an organization to take action to reach a particular target market, a market opportunity exists. The SWOT analysis is used to assess an organization’s strengths, weaknesses, opportunities, and threats. It is depicted as a four-cell matrix, and shows how marketers must seek to convert weaknesses into strengths, threats into opportunities, and match internal strengths with external opportunities to develop competitive advantages. Strengths and weaknesses are internal factors that can influence an organization’s ability to satisfy target markets. Strengths refer to competitive advantages, or core competencies, that give the company an advantage over other firms in meeting the needs of its target markets. Weaknesses are limitations a company faces in developing or implementing a marketing strategy. 7. Give a brief account of a marketing strategy and the selection of an appropriate target market. Answer: A marketing strategy is the selection of a target market and the creation of a marketing mix that will satisfy the needs of target market members. A marketing strategy articulates the best use of the company’s resources to accomplish its marketing objectives. Selecting an appropriate target market may be the most important decision a company makes in the strategic planning process and is a key to strategic success. The target market must be chosen before the organization can adapt its marketing mix to meet the customers’ needs and preferences. Careful and accurate target market selection is crucial to productive marketing efforts. Identification and analysis of a target market provide a foundation on which the company can develop its marketing mix. Using all relevant information available to conduct in-depth research allows a firm to select the most appropriate target market, which is the basis for creating a marketing mix that satisfies the needs of that market. Thus, the organization should analyze demographic information, customer needs, preferences, and behaviors with respect to product design, pricing, distribution, and promotion. 8. Discuss the different ways of organizing the marketing unit. Answer: The structure and relationships of a marketing unit, including establishing lines of authority and communication that connect and coordinate individuals, strongly affect marketing activities. To organize a marketing unit, firms must first decide whether operations should be centralized or decentralized, a choice that directly affects marketing decision making and strategy. In a centralized organization, top-level managers delegate little authority to lower levels. In centralized organizations, marketing decisions are made at the top levels. However, centralized decision making may prove ineffective in firms that must respond quickly to fluctuations in customer demand. In these organizations, decentralized authority allows the company to adapt more rapidly to customer needs. In a decentralized organization, decision making authority is delegated as far down the chain of command as possible. How effectively a company’s marketing management can implement marketing strategies also depends on how the marketing unit is organized. Organizing marketing activities to align with the overall strategic marketing approach enhances organizational efficiency and performance. A marketing department should clearly outline the hierarchical relationships between personnel and who is responsible for performing certain activities and making decisions. 9. Discuss the creation of a marketing plan. What are the major components of a marketing plan? Answer: A marketing plan is a written document that specifies the marketing activities to be performed to implement and evaluate the organization’s marketing strategies. The first component of the marketing plan is the executive summary, which provides an overview of the entire plan so that readers can quickly identify the key issues and their roles in the planning and implementation processes. The executive summary includes an introduction, an explanation of the major aspects of the plan, and a statement about costs. The next component of the marketing plan is the environmental analysis, which supplies information about the company’s current situation with respect to the marketing environment, the target market, and the firm’s current objectives and performance. The environmental analysis includes an assessment of all the environmental factors—competitive, economic, political, legal, regulatory, technological, and sociocultural—that can affect marketing activities. The analysis then examines the current needs of the organization’s target markets. In the final section of the environmental analysis, the company evaluates its marketing objectives and performance to ensure that objectives are consistent with the changing marketing environment. The next component of the marketing plan is the SWOT analysis (strengths, weaknesses, opportunities, and threats), which utilizes the information gathered in the environmental analysis. The marketing objectives section of the marketing plan states what the company wants to accomplish through marketing activities, using the SWOT analysis as a guide of where the firm stands in the market. The marketing strategies component outlines how the firm plans to achieve its marketing objectives and discusses the company’s target market selection(s) and marketing mix. The marketing implementation component of the plan outlines how marketing strategies will be executed. Finally, the performance evaluation establishes the standards for how results will be measured and evaluated, and what actions the company should take to reduce the differences between planned and actual performance. 10. Define strategic planning. Answer: Strategic planning is the process of establishing an organizational mission and formulating goals, corporate strategy, marketing objectives, and a marketing strategy. 11. When the managers at Logistics Pro are developing their strategic plan, they use a market orientation as a guide to ensure that ________ is an integral part of the process. A. customer satisfaction B. employee satisfaction C. the best use of their marketing resources D. the marketing mix E. the marketing function Answer: A 12. In addition to revising their organization’s mission and goals, the managers at Orion Co. have to develop a corporate strategy, marketing objectives, and a marketing strategy for their firm. These managers are engaged in the process of ________ A. benchmarking B. strategic planning C. marketing planning D. marketing implementation E. strategic outsourcing Answer: B 13. After engaging in the process of identifying and analyzing a target market, Sirius Foods Corporation develops a marketing mix to satisfy the individuals in that market to gain long-term competitive advantages. In this example, Sirius Foods Corporation is creating a ________ A. corporate strategy B. target design C. performance standard D. marketing strategy E. mission statement Answer: D 14. To formulate a marketing strategy, one must ________ A. identify and analyze a target market and develop a marketing mix to satisfy individuals in that market B. develop a statement of what is to be accomplished through marketing activities C. establish performance standards and evaluate actual performance by comparing it with established standards D. determine the means for utilizing resources in the various functional areas to reach the organization’s goals E. compare the quality of the company’s goods, services, or processes with that of its best­performing competitors Answer: A 15. The strategic planning process begins with: A. the creation of a marketing mix that will satisfy the needs of a particular market. B. the development of marketing objectives and marketing strategies. C. an analysis of the marketing environment. D. the selection of an appropriate target market. E. the development of a marketing plan. Answer: C 16. Europa Inc., a software company, has been successful in predicting what consumers anticipate in new technological advances. The company specializes in developing special graphic design software that other companies find hard to reproduce, thereby giving Europa Inc. a competitive advantage over its rivals. This factor of Europa Inc. exemplifies a ________ A. benchmark B. value proposition C. core competency D. strategic vision E. marketing opportunity Answer: C 17. When the right combination of circumstances occurs at the right time to allow an organization to take action toward a target market, the firm is faced with a ________ A. market objective B. market requirement C. strategic market plan D. market opportunity E. corporate objective Answer: D 18. In response to the increase in demand for organic foods, Raego Inc., a regional supermarket, recently created organic food departments within their large stores. The creation of these departments was a result of: A. a core competency. B. a market opportunity. C. the company’s sales orientation. D. the company’s distribution plan. E. a competitive advantage. Answer: B 19. After observing an increase in both the number of consumers who are environmentally-conscious and the number of consumers who are seeking vehicles that use less gasoline, several car manufacturers have developed hybrid automobiles. This is an example of identifying and capitalizing on a ________ while the strategic window is open. A. marketing mix B. market opportunity C. marketing objective D. requirement E. core competency Answer: B 20. After discovering that consumers had concerns about fat and carbohydrates, Avolado's Pizza began offering a lowfat, low-carb pizza product. The creation of this new product was the result of: A. a sustainable competitive advantage. B. a well-defined mission statement. C. a core competency. D. a market opportunity. E. the company’s sales orientation. Answer: D 21. A strategic window is: A. the right combination of circumstances and timing that permits an organization to take action to reach a particular target market. B. what determines the factors that are most important in making a market attractive or strong. C. a long-term view, or vision, of what the organization wants to become. D. a temporary period of optimum fit between the key requirements of a market and the particular capabilities of a firm competing in that market. E. the process that seeks information about events and relationships in a company's external environment. Answer: D 22. A competitive advantage exists when a: A. firm matches a core competency to opportunities it has discovered in the marketplace. B. firm compares the quality of its goods, services, or processes with that of its best-performing competitors. C. combination of circumstances and timing allows a firm to reach an attractive target market. D. firm observes a fit between the key requirements of a market and its own capabilities. e. firm has a strong marketing plan. Answer: A 23. A ________ is created when a company matches its core competency to opportunities it has discovered in the marketplace. A. market opportunity B. marketing objective C. competitive advantage D. strategic window E. competitive opportunity Answer: C 24. Trogan Co. is a multinational electronic commerce company. The company’s pricing, service, and customer support enable it to generate more sales and retain more customers than its competition. In this scenario, what does Trogan Co. have over its competitors? A. A subordinate share of the market B. A strategic window C. Empowerment D. A market opportunity E. A competitive advantage Answer: E 25. The assessment of an organization’s strengths, weaknesses, opportunities, and threats is called ________ A. a SWOT analysis B. benchmarking C. total quality management D. a PEST analysis E. a portfolio analysis Answer: A 26. Ferner Inc. is one of the largest manufacturers of agricultural machinery in the world. Ferner Inc.'s strong name recognition and solid customer demand for its farm and garden equipment are two elements of the company's ________ A. weaknesses B. opportunities C. strengths D. threats E. strategies Answer: C 27. Favorable conditions in the marketplace environment that could produce business rewards for the organization if acted upon properly are called: A. strengths. B. market strategies. C. market niches. D. threats. E. opportunities. Answer: E 28. Successful business organizations should take actions to convert internal weaknesses into ________ A. strategies B. threats C. opportunities D. core competencies E. strengths Answer: E 29. Galaxo Hotels, an international chain of full service hotels, aims to have at least 90 percent of its customers express that they had memorable and satisfying experiences at the hotels. This is an example of ________ A. implementing the marketing mix B. maintaining corporate identity C. a marketing objective D. a marketing strategy E. a mission statement Answer: C 30. The goals of any organization should derive from its: A. mission statement. B. strategic plan. C. strategic business plan. D. marketing plan. E. marketing strategy. Answer: A 31. Anabell is willing to buy more goods from Ceres than the other retail stores because Ceres has been very successful in designing supply systems that link existing stores with its own website. This personalizes online shopping and provides a reliable delivery system. This unique capability that allows Ceres to achieve a competitive advantage over its rivals is called ________ A. empowerment B. a core competency C. a benchmark D. a strategic window E. a marketing strategy Answer: B 32. A _____ outlines the scope of the business and such considerations as resource deployment, competitive advantages, and overall coordination of functional areas. A. mission statement B. corporate strategy C. business-unit strategy D. marketing strategy E. marketing mix Answer: B 33. A _____ determines the means for utilizing resources in the functional areas of marketing, production, finance, research and development, and human resources to achieve the organization's goals. A. corporate strategy B. business-unit strategy C. marketing strategy D. mission statement E. marketing mix Answer: A 34. Within a business organization, a profit center that is self-supporting in terms of sales, markets, production, and other resources is known as a: A. non-profit sector. B. strategic business unit. C. marketing program. D. small business. E. diversified corporation. Answer: B 35. Adocell Inc., a multinational electronics company, purchased Plutolyte Co., a battery company, and now operates this division as a separate profit center within the firm. In this example, Plutolyte Co. is a typical example of a ________ A. strategic business unit B. marketing program C. non-profit sector D. competitor E. core competence Answer: A 36. A group of individuals or organizations that have needs for products in a product class and have the willingness, ability, and authority to purchase those products is called a(n): A. strategic window. B. industry. C. strategic business unit. D. exchange. E. market. Answer: E 37. Jason, a 17-year old high school student, wants to buy a pack of cigarettes. He has the money to purchase them, but he is still not considered to be a market for the product due to his lack of _____ to purchase the cigarettes. A. ability B. willingness C. authority D. need E. location Answer: C 38. The Boston Consulting Group's matrix is based on the: A. idea that a firm's market share and market attractiveness are the important factors for a marketing strategy. B. assumption that a firm's actions have a profitable impact on marketing strategy. C. business position and market attractiveness of the firm. D. philosophy that a product's market growth rate and its market share are important determinants of its marketing strategy. E. idea that a product's market growth rate and market attractiveness determine the marketing strategy. Answer: D 39. According to the Boston Consulting Group, marketers may classify their products as all of the following except ________ A. dogs B. convenience products C. question marks D. stars E. cash cows Answer: B 40. Based on the work by the Boston Consulting Group, products with a dominant share of the market and good prospects for growth are classified as: A. dogs. B. cash cows. C. stars. D. question marks. E. problem children. Answer: C 41. Aragon Steel Corporation, a leader in industrial supplies, has identified its auto battery unit as having a dominant market share. However, this unit has low prospects for growth. The unit currently generates more cash for Aragon Steel than is required to maintain its market share. According to the Boston Consulting Group, the auto battery unit would be classified as a ________ A. dog B. cash cow C. star D. problem child E. question mark Answer: B 42. The director of marketing for Coby tapes tells the rest of the management team, "When it comes to our transparent packaging tape unit, our strategy will be to use funds generated here to support our venture in the industrial bonding market". This strategy indicates that the packaging tape unit falls into which one of the following classifications? A. Problem child B. Star C. Cash cow D. Dog E. Question mark Answer: C 43. The percentage of a market which actually buys a specific product from a specific company is referred to as that product's: A. market value. B. target market. C. market share. D. market size. E. market position. Answer: C 44. According to the Boston Consulting Group, question marks are characterized as products: A. that have a small share of the market and that require large amounts of cash to build market share. B. that have a dominant share of the market and good prospects for growth. C. that typically generate more cash than is required to maintain market share. D. that have a dominant share of the market, but low prospects for growth. E. that are found in established markets and that generate substantial profits. Answer: A 45. Which of the following is the most specific and detailed type of business strategy? A. Business-unit strategy B. Marketing strategy C. Corporate strategy D. Customer service strategy E. Tactical strategy Answer: B 46. Avio Gliding Air Academy is developing its marketing mix for the coming year. Its managers know that they must first select ________ which may be the most important decision they make in the planning process. A. the promotional strategy B. a distribution method C. the pricing strategy D. a target market E. the desired profit margin Answer: D 47. Which of the following statements about the marketing mix is incorrect? A. The selection of the target market serves as the basis for the creation of the marketing mix. B. Marketers can alter elements of the marketing mix to accommodate different marketing strategies. C. Marketing mix decisions should be consistent with business-unit and corporate strategies. D. Once a marketing mix has been created for a particular target market, it cannot be changed until a new strategic window opens. E. Marketing mix decisions should be flexible enough to respond to changes in market conditions, competition, and customer needs. Answer: D 48. All marketing mix decisions must have two characteristics: consistency and ________ A. flexibility B. rigidity C. irregularity D. variability E. resistance Answer: A 49. Darius Group, a marketer of high-fashion products, achieved a company turnaround by ensuring that its brand had the same image and proper display around the world. It also lowered prices on some items, like handbags, to be more competitive. This illustrates a company working to develop a marketing mix that is both ________ A. consistent and flexible B. variable and flexible C. variable and rigid D. consistent and rigid E. unconventional and rigid Answer: A 50. Zeon Corporation’s partnership with Alcove Inc., a global courier delivery service company, has given it an edge over its rivals in the printing, faxing, and delivery market. Since this partnership can’t be easily copied by the competition, it represents a(n) ________ A. market opportunity B. sustainable advantage C. strategic window D. absolute advantage E. performance standard Answer: B 51. Alpeco Inc., a manufacturer of motorcycles, helps to foster strong relationships between riders and their motorcycles. Alpeco’s rivals will find it difficult to mimic this in the foreseeable future. In this scenario, Alpeco Inc. has a(n) _____ over its competitors. A. effective competitive advantage B. controllable advantage C. comparative advantage D. absolute advantage E. sustainable competitive advantage Answer: E 52. Because of its highly efficient and low-cost distribution system, Andro Stores Inc., a multinational retail corporation, has an edge over its rivals. Andro’s competitors will find it difficult to reproduce such a distribution system in the foreseeable future. It is clear, then, that Andro has a(n) ________ over its competition. A. effective competitive advantage B. absolute advantage C. sustainable competitive advantage D. controllable advantage E. comparative advantage Answer: C 53. J.C. Penney is presently involved in a process of assessing marketing opportunities and resources, determining marketing objectives, redefining marketing strategies, and developing guidelines for implementation and control. It is evident, then, that J.C. Penney is involved in the process of: A. benchmarking. B. marketing planning. C. total quality management. D. SWOT analysis. E. market capitalization. Answer: B 54. Which of the following is not a purpose of the marketing plan? A. Communicating internally with employees B. Assigning tasks and responsibilities for implementation C. Specifying the allocation of resources D. Monitoring the performance of a marketing strategy E. Serving as a contract with the customer Answer: E 55. Andromeda Corp.'s new shampoo, Pearl, is faltering badly in the market. Andromeda's marketing personnel are unsure who is responsible for various marketing tasks, when these tasks are to be completed, or what resources have been allocated. Andromeda’s marketing director, Carolyn Willis, said that the problem is that Pearl has the most poorly written _____ she has ever seen. A. marketing plan B. competitive plan C. implementation plan D. media schedule E. product specification sheet Answer: A 56. The Evergreen Corporation conducts a SWOT analysis of its competition, and sees a marketing opportunity for its new Evergreen restaurant. It develops its marketing plan to include the type of products it will sell, the location for the restaurant, and the pricing it will use. Evergreen’s plan includes a marketing objective to make a profit of 5% in the first year of operation. So far, the owners of the Evergreen restaurant have eliminated a key piece of the marketing plan, which is ________ A. specifying how they will achieve their marketing objective B. how they will address their competitors’ prices C. coming up with a quantitative measure for their objective D. developing a qualitative measure for their objective E. assessing their weaknesses Answer: A 57. The process of putting marketing strategies into action is called: A. marketing implementation. B. marketing control. C. market capitalization. D. marketing auditing. E. the marketing action plan. Answer: A 58. Ashman's Deli operates seven retail stores throughout the city. It plans to develop a new marketing plan to extend its number of stores and operating hours. In developing this marketing plan, it has asked its employees for feedback on the changes it plans to makes. In this case, the employees are Ashman’s ________ A. external customers B. extended customers C. intended customers D. internal customers E. domestic customers Answer: D 59. If Orca Motor Company, an American multinational automaker, measured and evaluated the quality of its goods, services, and processes as compared with those of the best-performing companies in the automobile industry, it would be engaging in the process of: A. total quality management. B. internal marketing. C. external marketing. D. SWOT analysis. E. benchmarking. Answer: E 60. An expected level of performance against which actual performance can be compared is a: A. strategic window. B. performance objective. C. performance indicator. D. performance standard. E. core competency. Answer: D 61. Androme Business Products Co. distributes its business supply products through direct sales personnel. Recently, the company has established a monthly sales quota of $150,000 for each sales representative. This is an example of a(n): A. core competency. B. strategic window. C. evaluation standard. D. performance indicator. E. performance standard. Answer: E 62. One way that Reiko Inc., a Japanese manufacturer of automobiles and motorcycles, evaluates its product and service level is by how well it ranks on the J. D. Power & Associates Sales Satisfaction Survey. In doing so, Reiko is: A. controlling marketing activities. B. taking corrective action. C. empowering its employees. D. evaluating actual performance. E. setting performance standards. Answer: D 63. Marketing managers can take each of the following corrective actions for reducing a discrepancy between established performance standards and actual performance except: A. improving actual performance. B. reducing the performance standard. C. totally changing the performance standard. D. changing the marketing strategy. E. coordinating a new step in performance analysis. Answer: E 64. The time lag between the performance of marketing activities and their results: A. limits the marketing manager's ability to measure the effectiveness of marketing activities. B. facilitates the ability to measure performance. C. increases the chance of accurate measurement. D. limits the amount of money to be spent on measurement. E. increases the likelihood of having a successful marketing mix. Answer: A 65. The marketing plan: A. is a plan of all the aspects of an organization's business strategy. B. provides varied marketing visions for the firm and is the basis for external communications. C. is a written document that specifies the marketing activities to be performed to implement and evaluate the organization’s marketing strategies. D. is generally inaccessible and is not usually shared with all key employees. E. is designed to specify not only marketing but all other functional areas of business activities as well. Answer: C 66. Orion Inc. is in the process of preparing a written document specifying the marketing activities to be performed to implement and evaluate the organization’s marketing strategies. This document is called the: A. product specification sheet. B. marketing program. C. mission statement. D. marketing strategy. E. marketing plan. Answer: E 67. Which of the following is a characteristic of a marketing objective? A. It is consistent with both business-unit and corporate strategies. B. It is a verbal agreement, not in writing. C. It is not written in measurable terms. D. It does not specify a time frame for its accomplishment. E. It clearly identifies how the marketing strategy will be implemented. Answer: A 68. Which of the following statements is incorrect? A. Of the three levels of planning, corporate strategy is the broadest. B. The business-unit strategy should be consistent with the corporate strategy. C. The marketing strategy should be consistent with both the business-unit and corporate strategies. D. Strategic planning begins at the marketing level and proceeds through business-unit and corporate levels. E. Strategic planning begins at the corporate level and proceeds through business-unit and marketing levels. Answer: D 69. Alex has been analyzing the information from his company’s database about customer purchasing habits since he is responsible for managing the growth of the industrial supply division of his company. Alex plans to use the information from his analysis to create new marketing strategies that will develop and sustain relationships with those customers who are more profitable for the company. What type of concept is Alex using? A. Strategic marketing management B. Electronic data interchange C. Business-to-consumer marketing D. Strategic partnerships E. The marketing concept Answer: A 70. A marketing plan: A. is characteristic of production-oriented firms and other mass producers. B. provides a framework for implementing and controlling marketing activities. C. always increases the marketing manager's operating costs. D. produces plans that are short term in orientation. E. restricts the marketing manager's future options. Answer: B 71. The first component of a marketing plan is the: A. executive summary. B. SWOT analysis. C. performance evaluation. D. environment analysis. E. marketing implementation. Answer: A Scenario 2.1 Use the following to answer the questions. Southwest Airlines has a history of being able to retain its employees due to the atmosphere and culture of the company. Employees have been known to dress up in costume on an airplane, engage in "games" with the passengers, and generally provide a fun atmosphere for traveling. While other airlines have low rates of customer satisfaction, Southwest tends to maintain a high rating with its customers. Recent gas price hikes have caused most airlines to charge for checked luggage and to fill every flight to its maximum, adding to the negative experience of airline travel. Southwest keeps its costs low through several methods, one being that they do not serve meals on flights, or provide pre-boarding passes. The typical flight is two hours or less and occurs between several selected cities rather than flying to practically anywhere in the country. Southwest is known for its low fares, its dependability, and its on-time flights. 72. Refer to Scenario 2.1. Maintaining the current culture of "fun" for Southwest Airlines' employees is most likely a(n): A. marketing strategy. B. marketing objective. C. organization resource. D. environmental force. E. overall organizational objective. Answer: E 73. Refer to Scenario 2.1. The fact that Southwest Airlines has a history of being able to retain its employees is a ________ in its SWOT analysis. A. weakness B. strength C. threat D. opportunity E. obstacle Answer: B 74. Refer to Scenario 2.1. In Southwest Airlines' SWOT analysis, the rising gas prices are a(n) ________ A. hindrance B. strength C. threat D. weakness E. opportunity Answer: C 75. Refer to Scenario 2.1. Southwest's low fares, dependability, and its on-time flights represent its: A. competitive advantage. B. marketing opportunity. C. marketing plan. D. marketing objectives. E. total quality management. Answer: A Scenario 2.2 Use the following to answer the questions. Experience Limited is a company which offers tours and vacations that include participation in an extreme sport, such as hang-gliding, bungee jumping, skydiving, and motocross. Adrian Moss, Experience Limited's owner, has just finished developing the strategic plan, including marketing objective of growing his customer base by 15% during the coming year. He believes that the best way of reaching that objective is to advertise to the college-aged student. In the past, the majority of his sales have been to males under the age of 29, participating in hang-gliding and bungee jumping at various tourist locations. He wants to expand his skydiving and motocross tours, but isn't sure whether or not the expansion will be profitable. He currently has a database containing all the customers who have gone on a hang-gliding or bungee jumping vacation with his company. 76. Refer to Scenario 2.2. According to the BCG matrix, the hang-gliding and bungee jumping tours have been a ________ for Experience Limited. A. star B. cash cow C. problem child D. dog E. question mark Answer: B 77. Refer to Scenario 2.2. The fact that college enrolments have been increasing at a rapid rate over the past few years is an example of ________ A. an environmental factor B. a strategic window C. a marketing opportunity D. a competitive advantage E. a company strength Answer: A 78. Refer to Scenario 2.2. The college students represent Experience Limited's ________ A. internal customers B. customer relationships C. market share D. market mix E. target market Answer: E 79. Through the process of strategic planning, a firm establishes an organizational mission and goals, corporate strategy, marketing objectives, marketing strategy, and a marketing plan. A. True B. False Answer: True 80. The strategic planning process begins with a detailed analysis of the organization's strengths and weaknesses and the identification of opportunities and threats within the marketing environment. A. True B. False Answer: True 81. A marketing strategy is a written document that specifies the activities to be performed to implement and control a firm's marketing activities. A. True B. False Answer: False 82. Marketing strategies should be established before marketing objectives are decided. A. True B. False Answer: False 83. A strategic window results from the right combination of circumstances and timing, allowing a firm to take action to reach a particular target market. A. True B. False Answer: False 84. A core competency is something a company does extremely well, which sometimes gives it an advantage over its competition. A. True B. False Answer: True 85. A competitive advantage is created when a company matches its core competency to the opportunities it has discovered in the market. A. True B. False Answer: True 86. The analysis of strengths and weaknesses focuses on internal factors that give the organization certain advantages and disadvantages in meeting the needs of its target markets. A. True B. False Answer: True 87. A long-term view, or vision, of what the organization wants to become is called a mission proclamation. A. True B. False Answer: False 88. A firm's organizational goals should be derived from its opportunities. A. True B. False Answer: False 89. Opportunities refer to barriers that could prevent the company from reaching its objectives. A. True B. False Answer: False 90. Cash cows are products with a dominant share of the market and good prospects for growth. A. True B. False Answer: False 91. In the context of the strategic planning process, the target market must be chosen after the organization adapts its marketing mix to meet the customers’ needs and preferences. A. True B. False Answer: False 92. Marketing objectives state what is to be accomplished through marketing activities. A. True B. False Answer: True 93. A marketing objective need not be consistent with the firm's overall objectives. A. True B. False Answer: False 94. Corporate strategy determines the means for utilizing resources in the functional areas of business to reach the organization's goals. A. True B. False Answer: True 95. In the context of the strategic planning process, corporate strategic planners focus on dimensions such as competition, diversification, differentiation, environmental focus, and interrelationships among business units. A. True B. False Answer: True 96. A strategic business unit is not self-supporting in terms of sales, markets, production, and other resources. A. True B. False Answer: False 97. A market is a group of individuals and/or organizations that have needs for products in a product class and have the ability, willingness, and authority to purchase these products. A. True B. False Answer: True 98. In the context of the BCG matrix, dogs refer to products that have a dominant share of the market but low prospects for growth and typically generate more cash than is required to maintain market share. A. True B. False Answer: False 99. The BCG analytical approach is more of a diagnostic tool than a guide for making strategy prescriptions. A. True B. False Answer: True 100. Marketing managers can classify a firm's products into four basic types: stars, cash cows, dogs, and question marks. A. True B. False Answer: True 101. Stars are profitable products that usually generate more cash than is required to maintain share. A. True B. False Answer: False 102. Cash cows are market leaders that grow rapidly with substantial reported profits. A. True B. False Answer: False 103. Question marks have a dominant share of the market, but low prospects for growth. A. True B. False Answer: False 104. The long-term health of the firm depends solely on having products that generate cash and provide acceptable reported profits. A. True B. False Answer: False 105. When properly implemented, a good marketing strategy enables a company to achieve its business-unit and corporate objectives. A. True B. False Answer: True 106. In the context of evaluating marketing strategies, when performance standards exceed actual performance, a marketing strategy will be deemed effective. A. True B. False Answer: False 107. Marketing mix decisions must have two characteristics: consistency and timeliness. A. True B. False Answer: False 108. Each of the marketing mix elements must work together with the others. A. True B. False Answer: True 109. A sustainable competitive advantage is one that cannot be copied by a firm's competitors. A. True B. False Answer: True 110. Firms that truly adopt the marketing concept develop a distinct organizational culture based on a shared set of beliefs that makes customers' needs the pivotal point of the firm's decisions about strategy and operations. A. True B. False Answer: True 111. Performance standards are established as part of the marketing control process. A. True B. False Answer: True 112. The primary way to reduce the discrepancy between planned and actual performance is to rewrite the performance standard. A. True B. False Answer: False 113. A marketing strategy that successfully generates sales may not be deemed effective if it is extremely costly. A. True B. False Answer: True 114. The first component of a marketing plan is the SWOT analysis. A. True B. False Answer: False 115. The marketing plan of an organization is not made accessible or shared with all its key employees. A. True B. False Answer: False 116. Marketing planning and implementation are closely linked in successful businesses. A. True B. False Answer: True 117. Marketing plans may be developed for strategic business units, product lines, individual products or brands, or specific markets. A. True B. False Answer: True Test Bank for Foundations of Marketing William M. Pride, O. C. Ferrell 9781285429779, 9781439039441

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