CH-22 Managing a Holistic Marketing Organization for the Long Run – Marketing Management: A South Asian Perspective : Exam Guide

Chapter 22 Managing a Holistic Marketing Organization for the Long Run 1) Appointing teams to manage customer-value-building processes and break down walls between departments is part of which of the following business practices? A) reengineering B) outsourcing C) benchmarking D) supplier partnering E) customer partnering Answer: A 2) ________ involves buying more goods and services from external domestic or foreign vendors. A) Merging B) Broadening C) Outsourcing D) Globalizing E) Accelerating Answer: C 3) ________ involves studying “best practice companies” to improve performance. A) Empowering B) Globalizing C) Flattening D) Benchmarking E) Focusing Answer: D 4) Merging involves ________. A) reducing the number of organizational levels to get closer to the customer B) removing barriers that separate organizational departments C) partnering with fewer but better value-adding suppliers D) working more closely with customers to add value to their operations E) acquiring firms in the same or complementary industries Answer: E 5) Which of the following business practices involves reducing the number of organizational levels to get closer to the customer? A) flattening B) globalizing C) decentralization D) merging E) justifying Answer: A 6) Which of the following business practices focuses specifically on designing the organization and setting up processes to respond quickly to changes in the environment? A) benchmarking B) outsourcing C) focusing D) accelerating E) globalizing Answer: D 7) As a business practice, broadening involves _________. A) acquiring or merging with firms in the same or complementary industries to gain economies of scale and scope B) factoring the interests of customers, employees, shareholders, and other stakeholders into the activities of the enterprise C) buying more goods and services from outside domestic or foreign vendors D) appointing teams to manage customer-value-building processes and break down walls between departments E) becoming more accountable by measuring, analyzing, and documenting the effects of marketing actions Answer: B 8) As a marketing practice, monitoring involves ________. A) designing the organization and setting up processes to respond quickly to changes in the environment B) becoming more accountable by measuring, analyzing, and documenting the effects of marketing actions C) tracking what is said online and elsewhere and studying customers, competitors, and others to improve business practices D) determining the most profitable businesses and customers and expending greater organizational resources to capitalize on them E) factoring the interests of customers, employees, shareholders, and other stakeholders into the activities of the enterprise Answer: C 9) The role of marketing in the organization is changing. Traditionally marketers have played the roles of ________, charged with understanding customers’ needs and transmitting their voice to various functional areas. A) middlemen B) opinion leaders C) clients D) influencers E) end consumers Answer: A 10) Which of the following observations is true? A) In today's business environment, marketers are mainly middlemen. B) Marketing has the sole ownership of customer interactions. C) Only when all employees realize their job is to create, serve, and satisfy customers does the company become an effective marketer. D) Marketers must clearly differentiate all customer-facing processes, such that every customer receives a personalized marketing message. E) Marketers must avoid collaborating with other organizational departments, as it blurs functional responsibilities. Answer: C 11) ________ requires that everyone in the organization accept the concepts and goals of marketing and engage in choosing, providing, and communicating customer value. A) Internal marketing B) Corporate communications C) Integrated marketing communications D) Supply chain management E) Employee engagement Answer: A 12) The most common form of marketing organization consists of ________ reporting to a marketing vice president who coordinates their activities. A) zonal managers B) functional specialists C) product managers D) area market specialists E) brand managers Answer: B 13) Which of the following is the main advantage of a functional marketing organization? A) easy coordination B) lower staff requirements C) administrative simplicity D) reduced competition between functional groups E) smooth working relationships Answer: C 14) A company selling in a national market often organizes its sales force along ________. A) functional groups B) geographic lines C) product teams D) brand groups E) product categories Answer: B 15) A product-management organization makes sense if ________. A) the company's products are quite varied B) there are very few products in the company's portfolio C) the company is pursuing a low cost strategy D) the company's products satisfy similar customer needs E) the company is vertically integrated Answer: A 16) A product- or brand-management organization is characterized as a(n) ________ system. A) hub-and-spoke B) waterfall C) internal marketing D) top-down E) lateral Answer: A 17) A disadvantage of the product-management organization is that ________. A) it marginalizes a company's smaller brands B) it reduces organizational responsiveness to new products in the market place C) product managers generally exercise authority outside their areas of responsibility D) it prevents product managers from gaining sufficient expertise in their product areas E) it fails to build long-term strengths as brand managers normally manage brands for only short periods Answer: E 18) A product-management organization ________. A) often proves to be cost-effective B) simplifies the process of developing a national strategy C) focuses on building market share rather than customer relationships D) reduces an organization's staffing requirements E) allows product managers to achieve functional expertise Answer: C 19) There are three types of product-team structures. These are ________. A) vertical, triangular, and horizontal product teams B) vertical, horizontal, and circular product teams C) horizontal, vertical, and rectangular product teams D) horizontal, vertical, and flattened product teams E) vertical, rectangular, and circular product teams Answer: A 20) Which of the following is true about a brand-asset management team (BAMT)? A) A BAMT is part of the triangular and vertical product team structures. B) BAMTs often report directly to the organization's chief branding officer. C) BAMTs are a traditional, tried and tested means of managing brands. D) Companies with a product-management organization often have only one BAMT. E) The BAMT consists of key representatives from functions affecting the brand's performance. Answer: E 21) One of the options in a product-management organization is to eliminate product manager positions for minor products and assign two or more products to each remaining manager. Under what conditions is this alternative feasible? A) when the product mix is highly diverse B) when there are very few products in the company's portfolio C) when two or more products serve a similar set of needs D) when customers fall into different user groups E) when the company produces many products for many markets Answer: C 22) When customers fall into different user groups with distinct buying preferences and practices, a ________ is desirable. A) market-management organization B) product-management organization C) brand-management organization D) geographic organization E) functional organization Answer: A 23) Companies that produce many products for many markets may adopt a ________ marketing organization. A) flat B) brand C) product D) matrix E) top-down Answer: D 24) Which of the following is true regarding a matrix-management organization? A) It proves to be cost-effective in the long run. B) It often creates conflicts regarding authority and responsibility for marketing activities. C) It hampers the flow of information among marketing personnel. D) It fosters a strong sense of accountability for performance among product and market managers. E) It is best suited to companies that offer a small range of products to niche markets. Answer: B 25) Transforming into a true market-driven company requires organizing around ________. A) sales B) customer segments C) products D) functions E) brands Answer: B 26) Which of the following is true of building a creative marketing organization? A) It is enough if firms are customer-oriented. B) Companies must watch trends and be ready to capitalize on them. C) Firms should focus more on efficiency rather than innovation. D) Companies should attempt to minimize risks as much as possible. E) Firms should focus on protecting their existing markets and physical resources. Answer: B 27) Rising customer expectations, evolving employee goals and ambitions, and tighter government legislation and pressure are driving companies to ________. A) operate leaner manufacturing facilities B) manage shorter supply chains C) operate flatter organizations D) practice a higher level of corporate social responsibility E) vertically integrate Answer: D 28) In order to promote ethical cultures, companies should do all of the following EXCEPT ________. A) disseminate a written code of ethics B) build a company tradition of ethical behavior C) hold people responsible for observing ethical and legal guidelines D) ensure every employee knows and observes relevant laws E) encourage business practices that are not clearly ethical or unethical Answer: E 29) ________ gives products the appearance of being more environmentally friendly without living up to that promise. A) Ambush marketing B) Greenwashing C) Astroturfing D) Viral marketing E) Green politics Answer: B 30) ________ refers to the ability to meet humanity's needs without harming future generations. A) Greenwashing B) Sustainability C) Ecological foot-printing D) Scalability E) Legal practice Answer: B 31) Cause-related marketing is part of ________. A) sustainability B) corporate societal marketing C) social media D) global marketing E) community marketing Answer: B 32) A __________ program could backfire if cynical consumers question the link between the product and the cause, and see the firm as being self-serving and exploitive. A) cause-related marketing B) holistic marketing C) social media D) global marketing E) community marketing Answer: A 33) Cadbury's “Sports for Schools” promotion offered sports and fitness equipment for schools in exchange for vouchers. The problem was that the public and media saw a perverse incentive for children to eat more chocolate, a product associated with obesity. Which of the following best summarizes Cadbury’s problem? A) Customers felt that the cause was not in sync with the company's brand image. B) Consumers did not value the cause Cadbury was promoting. C) Customers questioned the link between the product and the cause and saw the firm as self-serving and exploitive. D) Consumers resented being sold an inferior product on the back of a cause-marketing program. E) Consumers felt that the campaign did not make a sufficient attempt to change the target audience's behavior. Answer: C 34) Which of the following is true regarding cause-related marketing? A) The positive impact of cause-related marketing can be increased through sporadic involvement with numerous causes. B) Many companies focus on multiple causes to simplify execution and maximize impact. C) Limiting support to a single cause increases the pool of stakeholders who can transfer positive feelings from the cause to the firm. D) Most firms choose causes that fit their corporate or brand image and matter to their employees and shareholders. E) In order to avoid public backlash, firms are advised to adopt a hard-sell approach to their cause efforts. Answer: D 35) ________ by nonprofit or government organizations furthers a cause. A) Corporate societal marketing B) Brand marketing C) Causal marketing D) Social marketing E) Place marketing Answer: D 36) Social marketing programs designed to discourage cigarette smoking or excessive consumption of alcohol are examples of ________. A) cognitive campaigns B) active campaigns C) behavioral campaigns D) value campaigns E) normative campaigns Answer: C 37) A social marketing program which aims to alter ideas about abortion is an example of a(n) ________. A) cognitive campaign B) active campaign C) behavioral campaign D) value campaign E) normative campaign Answer: D 38) Which of the following represents the objective of a cognitive social marketing campaign? A) Motivate people with obesity to eat healthy and exercise more often. B) Change public attitudes and stereotypes associated with people who are obese. C) Explain the different causes of obesity and how it can be prevented. D) Encourage people to participate in a walkathon aimed at promoting awareness about obesity. E) Help people with obesity to implement lifestyle changes. Answer: C 39) Which of the following represents the objective of a social marketing campaign aimed at changing people’s actions? A) Motivate people with obesity to eat healthy and exercise more often. B) Change public attitudes and stereotypes associated with people who are obese. C) Explain the different causes of obesity and how it can be prevented. D) Encourage people to participate in a walkathon aimed at promoting awareness about obesity. E) Help people with obesity to implement lifestyle changes. Answer: D 40) Which of the following represents the objective of a social marketing campaign aimed at changing people's values? A) Motivate people with obesity to eat healthy and exercise more often. B) Change public attitudes and stereotypes associated with people who are obese. C) Explain the different causes of obesity and how it can be prevented. D) Encourage people to participate in a walkathon aimed at promoting awareness about obesity. E) Help people with obesity implement to lifestyle changes. Answer: B 41) Which of the following represents the objective of a social marketing campaign aimed at changing people's behavior? A) Motivate people with obesity to eat healthy and exercise more often. B) Change public attitudes and stereotypes associated with people who are obese. C) Explain the different causes of obesity and how it can be prevented. D) Encourage people to participate in a walkathon aimed at promoting awareness about obesity. E) Attract people with obesity to sign up for a one-time free medical check-up. Answer: A 42) Which of the following should be done to increase the likelihood that social marketing programs will be successful? A) Choose target markets that are the least ready to respond. B) Promote multiple, doable behaviors in clear, simple terms. C) Make it easy to adopt the behavior. D) Adopt a soft sell approach, as opposed to attention grabbing messages. E) Explain the benefits in an exaggerated manner. Answer: C 43) The first step in the social marketing planning process is ________. A) determining the focus of the program B) selecting the target audience C) setting objectives and goals D) designing the market offering E) finding a source of funding Answer: A 44) ________ software provides a set of Web-based applications that automate and integrate project management, campaign management, budget management, asset management, brand management, customer relationship management, and knowledge management. A) Marketing dashboard B) Enterprise resource planning C) Supply chain management D) Marketing resource management E) Enterprise campaign management Answer: D 45) ________ is the process that turns marketing plans into action assignments and ensures that such assignments are executed in a manner that accomplishes the plan’s stated objectives. A) Marketing implementation B) Marketing research C) Marketing analysis D) Brand management E) Product management Answer: A 46) ________ is the process by which firms assess the effects of their marketing activities and programs and make necessary changes and adjustments. A) Marketing control B) Marketing implementation C) Test marketing D) Market watch E) Market analysis Answer: A 47) Top and middle management are primarily responsible for ________. A) annual-plan control B) efficiency control C) profitability control D) technological control E) innovation control Answer: A 48) Who is primarily responsible for efficiency control? A) BAMT B) marketing auditor C) middle management D) line and staff management E) top management Answer: D 49) The purpose of profitability control is to ________. A) examine whether the planned results are being achieved B) examine where the company is making and losing money C) evaluate and improve the spending efficiency and impact of marketing expenditures D) examine whether the company is pursuing its best opportunities with respect to markets, products, and channels E) understand the efficiency of the sales force, advertising, sales promotion, and distribution Answer: B 50) The ________ is primarily responsible for strategic control. A) line and staff management B) marketing auditor C) marketing controller D) middle management E) BAMT Answer: B 51) The purpose of strategic control is to ________. A) examine whether the planned results are being achieved B) examine where the company is making and losing money C) evaluate and improve the spending efficiency and impact of marketing expenditures D) examine whether the company is pursuing its best opportunities with respect to markets, products, and channels E) understand the efficiency of the sales force, advertising, sales promotion, and distribution Answer: D 52) Marketing effectiveness rating instruments and marketing audits are approaches to ________. A) annual-plan control B) profitability control C) efficiency control D) strategic control E) statistical control Answer: D 53) Which of the following is true regarding annual-plan control? A) This control process begins by identifying the causes of serious performance deviations. B) The tools used for this purpose are sales analysis, market share analysis, marketing expense-to-sales analysis, and financial analysis. C) The marketing controller has the primary responsibility for annual-plan control. D) Its purpose is to evaluate and improve the spending efficiency and impact of marketing expenditures. E) It measures profitability by product, territory, customer, segment, trade channel, and order size. Answer: B 54) Which of the following is an example of a distribution metric used for measuring the performance of marketing plans? A) effective reach B) customer acquisition costs C) market share D) stocks cover in days E) response rate Answer: D 55) Your firm has experienced a decline in sales over the last three quarters. You have traced the problems to distribution inefficiencies. Which of the following should you track to ensure that the firm’s distribution efficiency is maximized? A) average sales per point of sale B) sales from new products C) trial rate D) repurchase rate E) new customer gains Answer: A 56) A ________ is a comprehensive, systematic, independent, and periodic examination of a company's or business unit's marketing environment, objectives, strategies, and activities, with a view to determining problem areas and opportunities and recommending a plan of action to improve the company's marketing performance. A) marketing plan B) test market C) marketing audit D) market-based scorecard analysis E) marketing metric Answer: C 57) Which of the following is true regarding a marketing audit? A) It focuses primarily on a firm’s macro-marketing environment. B) It identifies the most-needed improvements and incorporates them into a corrective-action plan with short- and long-run steps. C) It is less effective at locating the real source of a problem than a functional audit. D) It analyzes only those marketing activities that have failed to produce adequate results. E) It relies solely on company managers for data and opinions. Answer: B 58) To succeed in the future, marketing must ________. A) become more holistic B) build brands through promotion rather than performance C) be more departmental D) focus on free-spending E) rely more on mass marketing Answer: A 59) Which of the following is likely to be an important trend in marketing in the future? A) marketing intuition B) free-spending marketing C) manual marketing D) marketing science E) mass marketing Answer: D 60) Which of the following is a best practice in business and marketing? A) end-product orientation B) reacting to competitors C) vertical integration D) stockholder driven E) teamwork Answer: E 61) ______________ determines if a company should enter, expand, contract, or withdraw from any business segments. A) Profitability Analysis B) Sales variance analysis C) Expense-to-sales analysis D) Full costing analysis E) Financial analysis Answer: A 62) Served market share ________. A) expresses the company’s sales as a percentage of total market sales B) is sales as a percentage of the total sales to the market C) is market share in relationship to the largest competitor D) is always smaller than overall market share E) measures the relative contribution of different factors to a gap in sales performance Answer: B 63) ________ is market share in comparison to the largest competitor. A) Relative market share B) Served market share C) Overall market share D) Market value E) Target market share Answer: A Airfare (Scenario) The airfare for an economy class, one-way ticket from Laos to Nanjing is $500. Due to the recession, the airline manages to fill only 100 out of the 150 seats at $400 per seat. 64) How much of the sales performance gap is due to price decline? A) 28.5 percent B) 37 percent C) 2.5 percent D) 71.4 percent E) 0.4 percent Answer: A 65) The sales gap due to reduced volume is ________. A) 0.4 percent B) 28.5 percent C) 71.4 percent D) 2.5 percent E) 63 percent Answer: C 66) Which of the following is true about market share? A) Outside forces affect all companies in the same way. B) A company's performance should be judged against the average performance of all companies. C) A decline in market share does not necessarily mean the company is performing worse than other companies. D) A decline in market share cannot be deliberately engineered. E) All shifts in market share have marketing significance. Answer: C 67) A(n) ________ of exactly 100 percent means that a company is tied for the market lead. A rise in relative market share means the company is gaining on its leading competitor. A) overall market share B) served market share C) potential market share D) relative market share E) actual market share Answer: D 68) Annual-plan control requires making sure the company isn’t overspending to achieve sales goals. The key ratio to watch is ________. A) stock turnover B) gross margin C) return on capital D) cash flow return on investment E) marketing expense-to-sales Answer: E 69) ________ advocates argue that all costs must ultimately be imputed in order to determine true profitability. A) Direct-cost approach B) Full-cost approach C) Traceable-cost approach D) Activity based costing approach E) Fixed cost approach Answer: B Cabot Cars (Scenario) Cabot, a large car manufacturer, has four popular car brands in different segments. It has a manufacturing facility near Delhi, India, where parts common to all the four brands are manufactured. Other specific parts like the brake system, windshield, bonnet, locks, and so on are manufactured in separate plants. Each make has its own product manager and support staff. All product managers report to the CEO of the company. 70) The CEO’s annual compensation is an example of a ________. A) direct cost B) variable cost C) traceable common cost D) non-traceable common cost E) manufacturing cost Answer: D 71) The cost of the land where the plant which manufactures the common parts is set up falls under ________. A) traceable common costs B) non-traceable common costs C) variable costs D) manufacturing costs E) material costs Answer: B 72) Suppose the manufacturer pays a commission on every car sold. Then, the salesperson’s commission is classified as a(n) ________. A) cost of labor B) traceable common cost C) non-traceable common cost D) advertising cost E) direct cost Answer: E 73) The cost of operating the common manufacturing facility is a(n) _____. A) opportunity cost B) traceable cost C) non-traceable cost D) sunk cost E) differential cost Answer: B 74) The manufacturer launches a brand building advertising campaign. The campaign does not promote any one specific car but is aimed at promoting the company as a whole. Which type of cost does this fall under? A) direct costs B) material costs C) non-traceable costs D) traceable costs E) labor costs Answer: C 75) Internal marketing requires that everyone in the organization buy into the concepts and goals of marketing and engage in choosing, providing, and communicating customer value. Answer: True 76) Marketing has sole ownership of customer interaction. Answer: False 77) A functional organization allows for adequate planning as the number of products and markets of a firm increases. Answer: False 78) Companies producing a variety of products and brands often establish a product- (or brand-) management organization. Answer: True 79) The product-management organization replaces the functional organization in the firm. Answer: False 80) An advantage of the product- and brand-management system is that product and brand managers focus the company on building market share rather than customer relationships. Answer: False 81) There are three types of product-teams structures: vertical, triangular, and horizontal. Answer: True 82) The product management system often turns out to be costly. Answer: True 83) When customers fall into different user groups with distinct buying preferences and practices, a product team structure is desirable. Answer: False 84) Market managers are staff people, with duties like those of a product manager. Answer: True 85) A customer-management organization deals with individual customers rather than the mass market or market segments. Answer: True 86) Many companies now focus on departments as opposed to processes, because processes can be a barrier to smooth performance. Answer: False 87) Transforming into a true market-driven company involves organizing around products. Answer: False 88) Although it is necessary to be customer oriented, it is not enough. The organization must also be creative. Answer: True 89) Companies must adopt and disseminate a written code of ethics, build a company tradition of ethical behavior, and hold their people fully responsible for observing ethics and legal guidelines if they wish to demonstrate ethical behavior. Answer: True 90) Although salespeople are legally prohibited from saying things about their products that are not true, they may legally suggest things about competitors’ products that are not true. Answer: False 91) Some business practices, such as deceptive advertising, exclusive dealing, and predatory competition, sharply divide critics regarding whether they are clearly unethical or illegal. Answer: False 92) Often, the more committed a company is to sustainability and environmental protection, the more dilemmas that can arise. Answer: True 93) Sustainability ratings exist, but there is no consistent agreement about what metrics are appropriate. Answer: True 94) Because of insincere firms jumping on the “green” bandwagon, consumers bring a healthy skepticism to environmental claims, but they are also unwilling to sacrifice product performance and quality. Answer: True 95) Corporate philanthropy as a whole is on the rise. Answer: True 96) Cause-related marketing efforts are unlikely to backfire as customers generally view the company's motives as genuine. Answer: False 97) The knowledge, skills, resources, and experiences of a top firm may even be more important to a non-profit or community group than funding. Answer: True 98) Many companies focus on multiple cause-related marketing programs to simplify execution and maximize impact. Answer: False 99) Social marketing is a new trend in marketing. Answer: False 100) Social marketing programs designed to motivate people to donate blood or attract people for mass immunization are examples of cognitive campaigns. Answer: False 101) Social marketing programs take little time to develop and are generally easy to implement. Answer: False 102) The actual success of a social marketing program should be evaluated in terms of the program objectives. Answer: True 103) Desktop marketing gives marketers information and decision structures on computer dashboards. Answer: True 104) Profitability control is the prime responsibility of line and staff management. Answer: False 105) Annual-plan control involves the use of financial analysis to evaluate the performance of marketing plans. Answer: True 106) The annual plan control process begins with measuring performance. Answer: False 107) Repurchase rate is a sales metric that is used to evaluate the performance of marketing plans. Answer: False 108) The ratio of promoters to detractors is a customer metric that is used to evaluate the performance of marketing plans. Answer: True 109) A marketing audit is an orderly examination of the organization’s macro- and micromarketing environments, marketing objectives and strategies, marketing systems, and specific activities. Answer: True 110) Self-audits tend to provide more objective information than audits conducted by external consultants. Answer: False 111) A marketing audit only benefits a company that is in trouble; companies in good health do not need to conduct them. Answer: False 112) To succeed in the future, marketing must be more holistic and less departmental. Answer: True 113) In the future, there will be greater emphasis on precision marketing as opposed to mass marketing. Answer: True 114) In the context of overall market share, customer loyalty refers to the percentage of all customers who buy from the company. Answer: False 115) The first step in conducting a marketing profitability analysis involves assigning functional expenses to marketing entities. Answer: False 116) Operating management is most effective in controlling direct costs and traceable common costs. Answer: True 117) List and define some of the important shifts that have taken place in business and marketing practices. Answer: 1. Reengineering is the appointment of teams to manage customer-value-building processes and break down walls between departments. 2. Outsourcing involves buying more goods and services from outside domestic or foreign vendors. 3. Benchmarking is the study of “best practice companies” to improve performance. 4. Supplier partnering focuses on partnering with fewer but better value-adding suppliers. 5. Customer partnering entails working more closely with customers to add value to their operations. 6. Merging involves acquiring or merging with firms in the same or complementary industries to gain economies of scale and scope. 7. Globalizing focuses on increasing the effort to “think global” and “act local.” 8. Flattening refers to reducing the number of organizational levels to get closer to the customer. 9. Focusing involves determining the most profitable businesses and customers and focusing on them. 10. Accelerating involves designing the organization and setting up processes to respond more quickly to changes in the environment. 11. Empowering means encouraging and empowering personnel to produce more ideas and take more initiative. 12. Justifying means becoming more accountable by measuring, analyzing, and documenting the effects of marketing actions. 13. Broadening involves factoring the interests of customers, employees, shareholders, and other stakeholders into the activities of the enterprise. 14. Monitoring involves tracking what is said online and elsewhere and studying customers, competitors, and others to improve business practices. 118) Describe the functional organization of a marketing department in terms of its structure, advantages, and disadvantages. Answer: The most common form of marketing organization consists of functional specialists reporting to a marketing vice president. The main advantage of a functional marketing organization is its administrative simplicity. It can be quite a challenge for the department to develop smooth working relationships, however. This form also can result in inadequate planning as the number of products and markets increases and each functional group vies for budget and status. The marketing vice president constantly weighs competing claims and faces a difficult coordination problem. 119) Explain the product- or brand-management organization and list its advantages and disadvantages. Answer: Companies producing a variety of products and brands often establish a product- (or brand-) management organization. The product- or brand-management organization does not replace the functional organization, but serves as another layer of management. A product-management organization makes sense if the company's products are quite different, or if the sheer number of products is beyond the ability of a functional organization to handle. Product and brand management is sometimes characterized as a hub-and-spoke system. The product-management organization has several advantages. The product manager can concentrate on developing a cost-effective marketing mix for the product and can react more quickly to new products in the marketplace; the company's smaller brands have a product advocate. The disadvantages are that product managers are not given enough authority; they become experts in their product area but rarely achieve functional expertise. The product-management system is costly and brand managers normally manage a brand only for a short time. The fragmentation of markets makes it harder to develop a national strategy. In addition to this, product and brand managers focus on market share and not in building customer relationships. 120) What is a market-management organization? Answer: Many companies sell their products to differing markets. When customers fall into different user groups with distinct buying preferences and practices, a market-management organization is desirable. Market managers supervise several market-development managers, market specialists, or industry specialists and draw on functional services as needed. Market managers of important markets might even have functional specialists reporting to them. Market managers are staff (not line) people, with duties like those of product managers. They develop long-range and annual plans for their markets and are judged by their market's growth and profitability. Because this system organizes marketing activity to meet the needs of distinct customer groups, it shares many advantages and disadvantages of product-management systems. 121) Many companies are beginning to realize that they are not really market and customer driven, they are product and sales driven. In the attempt to transform themselves into true market-driven companies, firms are required to change. Describe and explain what changes are necessary. Answer: To be truly market-driven, companies need to develop a company-wide passion for customers, organize around customer segments instead of around products, and develop a deep understanding of customers through qualitative and quantitative research. Additionally, the organization must be creative; the firm must build capability in strategic innovation and imagination. This capability comes from assembling tools, processes, skills, and measures that let the firm generate more and better new ideas than its competitors. 122) What is sustainability? How is it related to the concept of greenwashing? Answer: Sustainability is the ability to meet humanity's needs without harming future generations. It now tops many corporate agendas. Major corporations outline in great detail how they are trying to improve the long-term impact of their actions on communities and the environment. Heightened interest in sustainability has also unfortunately resulted in greenwashing, which gives products the appearance of being environmentally friendly without living up to that promise. Because of insincere firms jumping on the green bandwagon, consumers bring a healthy skepticism to environmental claims, but they are also unwilling to sacrifice product performance and quality. Many firms are rising to the challenge and are using the need for sustainability to fuel innovation. 123) Identify some of the brand benefits that can accrue to a company that engages in cause marketing. Answer: A successful cause-marketing program can improve social welfare, create differentiated brand positioning, build strong consumer bonds, enhance the company's public image, create a reservoir of goodwill, boost internal morale and galvanize employees, drive sales, and increase the firm's market value. Consumers may develop a strong, unique bond with the firm running the cause-marketing that transcends normal marketplace transactions. Specifically, cause marketing can (1) build brand awareness, (2) enhance brand image, (3) establish brand credibility, (4) evoke brand feelings, (5) create a sense of brand community, and (6) elicit brand engagement. 124) Identify three key success factors in developing and implementing a social marketing program. Answer: Students may choose three of the following key success factors presented in the text: (1) choose target markets that are most ready to respond; (2) promote a single, doable behavior in clear, simple terms; (3) explain the benefits in compelling terms; (4) make it easy to adopt the behavior; (5) develop attention-grabbing messages and media; and (6) consider an education-entertainment approach. Three key success factors in developing and implementing a social marketing program include: 1. Target Audience Understanding: Comprehensive knowledge of the target audience's behaviors, needs, and preferences. 2. Clear Objectives and Metrics: Establishing measurable goals and metrics to track progress and effectiveness. 3. Effective Messaging and Communication: Crafting compelling messages and utilizing appropriate channels to reach and engage the target audience effectively. 125) Briefly explain the concept of annual-plan control. Answer: Annual-plan control ensures the company achieves the sales, profits, and other goals established in its annual plan. At its heart is management by objectives. First, management sets monthly or quarterly goals. Second, it monitors performance in the marketplace. Third, management determines the causes of serious performance deviations. Fourth, it takes corrective action to close gaps between goals and performance. This control model applies to all levels of the organization. Top management sets annual sales and profit goals; each product manager, regional district manager, sales manager, and sales rep is committed to attaining specified levels of sales and costs. Each period, top management reviews and interprets the results. Marketers today have better marketing metrics for measuring the performance of marketing plans. Four tools for the purpose are sales analysis, market share analysis, marketing expense-to-sales analysis, and financial analysis. 126) What is a marketing audit? Explain the four characteristics of a marketing audit. Answer: A marketing audit is a comprehensive, systematic, independent, and periodic examination of a company's or business unit's marketing environment, objectives, strategies, and activities, with a view to determining problem areas and opportunities and recommending a plan of action to improve the company's marketing performance. A marketing audit should be: (1) comprehensive—it covers all the major marketing activities of a business; (2) systematic—it is an orderly examination of the organization's macro- and micromarketing environments, marketing objectives and strategies, marketing systems, and specific activities; (3) independent—outside consultants bring the necessary objectivity, broad experience in a number of industries, familiarity with the industry being audited, and undivided time and attention; and (4) periodic—firms typically initiate marketing audits only after failing to review their marketing operations during good times, with resulting problems. A periodic marketing audit can benefit companies in good health as well as those in trouble. 127) What is a brand-asset management team (BAMT)? Answer: Triangular and horizontal product-team approaches let each major brand be run by a brand-asset management team (BAMT) consisting of key representatives from functions that affect the brand's performance. The company consists of several BAMTs that periodically report to a BAMT directors committee, which itself reports to a chief branding officer. 128) Define a category-management organization. Answer: A category-management organization is where a company focuses on product categories to manage its brands. 129) What is a customer-management organization? When should it be adopted? Answer: A customer-management organization deals with individual customers rather than the mass market or even market segments. It is suitable when a close customer relationship is advantageous, such as when customers have diverse and complex requirements and buy an integrated bundle of products and services. 130) What are some of the forces that are driving companies to practice corporate social responsibility? Answer: A number of forces are driving companies to practice a higher level of corporate social responsibility, such as rising customer expectations, evolving employee goals and ambitions, tighter government legislation and pressure, investor interest in social criteria, media scrutiny, and changing business procurement practices. 131) How can firms promote ethical behavior among their employees? Answer: Companies must adopt and disseminate a written code of ethics, build a company tradition of ethical behavior, and hold their people fully responsible for observing ethical and legal guidelines. Organizations must also ensure that every employee knows and observes relevant laws. 132) Corporate philanthropy can pose problems even when done with the best intentions. Explain. Answer: Philanthropic efforts by companies can be overlooked—even resented—if the company is seen as exploitive or fails to live up to a “good guy” image. 133) Explain the concept of greenwashing along with an example. Answer: Greenwashing gives products the appearance of being environmentally friendly without living up to that promise. An automobile manufacturer who promotes its cars as being environmentally friendly when the company is in fact a major polluter, would be an example of greenwashing. 134) Define cause-related marketing. What is the difference between cause-related marketing and social marketing? Answer: Cause-related marketing links the firm's contributions to a designated cause to customers’ engaging directly or indirectly in revenue-producing transactions with the firm. Cause-related marketing supports a cause whereas social marketing by nonprofit or government organizations furthers a cause. 135) Give an example of a cognitive social marketing campaign. Answer: Cognitive campaigns try to educate and inform people. A cognitive campaign might explain the nutritional value of different foods or demonstrate the importance of conservation. 136) Suicide is one of the leading causes of death worldwide. Develop the possible objectives of a social marketing campaign which aims to change people's cognitions, values, behaviors, and actions related to suicide. Answer: Cognitive—To promote awareness about the risk factors associated with suicide and how it can be prevented. Action—To motivate people to volunteer for a crisis hotline service aimed at providing support to people with suicidal tendencies. Behavioral—To reduce the incidence of suicide by discouraging substance abuse. Value - To eliminate the stigma associated with suicidal people. 137) Define marketing implementation. Answer: Marketing implementation is the process that turns marketing plans into action assignments and ensures that such assignments are executed in a manner that accomplishes the plan's stated objectives. 138) What is marketing control? List the four types of marketing control. Answer: Marketing control is the process by which firms assess the effects of their marketing activities and programs and make necessary changes and adjustments. The four types of needed marketing control are: annual-plan control, profitability control, efficiency control, and strategic control. 139) What is the purpose of profitability control? Answer: The purpose of profitability control is to examine where the company is making and losing money. Companies should measure the profitability of their products, territories, customer groups, segments, trade channels, and order sizes to help determine whether to expand, reduce, or eliminate any products or marketing activities. 140) How can a firm periodically reassess its strategic approach to the marketplace? Answer: Each company should periodically reassess its strategic approach to the marketplace with a good marketing audit. Companies can also perform marketing excellence reviews and ethical/social responsibility reviews. 141) List some of the marketing trends that are likely to emerge in the near future. Answer: The coming years will see: • The demise of the marketing department and the rise of holistic marketing • The demise of free-spending marketing and the rise of ROI marketing • The demise of marketing intuition and the rise of marketing science • The demise of manual marketing and the rise of both automated and creative marketing • The demise of mass marketing and the rise of precision marketing 142) What does a marketing controller do? Answer: Some companies have established a marketing controller position to improve marketing efficiency. Marketing controllers work out of the controller’s office but specialize in the marketing side of the business. 143) What are the steps involved in marketing profitability analysis? Answer: The steps involved in marketing profitability analysis are as follows: Step 1: Identifying functional expenses Step 2: Assigning functional expenses to marketing entities Step 3: Preparing a profit-and-loss statement for each marketing entity 144) What are direct, traceable common, and non-traceable common costs? Give an example of each. Answer: Direct costs are costs that we can assign directly to the proper marketing entities, such as materials costs and sales-force salaries. Traceable common costs are incurred indirectly but can be attributed on a plausible basis to various marketing entities, such as rent expenses. Non-traceable common costs are costs whose assignments are highly arbitrary, such as “corporate image” expenditures. 145) What is the full-cost approach of evaluating a marketing entity's performance? Answer: When evaluating a marketing entity's performance, the major controversy is about whether to allocate the non-traceable common costs to the marketing entity. Such allocation is called the full-cost approach, and its advocates argue that all costs must ultimately be imputed in order to determine true profitability. However, this argument confuses the use of accounting for financial reporting with its use for managerial decision making. 146) Full costing allocates non-traceable common costs to marketing entities and has three major weaknesses. What are they? Answer: Full costing has three major weaknesses: (1) The relative profitability of different marketing entities can shift radically when we replace one arbitrary way to allocate non-traceable common costs by another; (2) the arbitrariness demoralizes managers, who feel their performance is judged adversely; and (3) the inclusion of non-traceable common costs could weaken efforts at real cost control. Test Bank for Marketing Management: A South Asian Perspective Philip Kotler, Kevin Lane Keller, Abraham Koshy, Mithileshwar Jha 9789810687977, 9780132102926