Business Mission and Marketing Plan Part I

: Answer Key 1. False 25. False 50. d 2. False 26. True 51. a 3. True 27. True 52. b 4. False 28. True 53. a 5. True 29. False 54. a 6. True 30. True 55. b 7. True 31. c 56. a 8. True 32. a 57. a 9. False 33. d 58. b 10. False 34. b 59. a 11. True 35. a 60. c 12. True 36. c 61. a 13. False 37. a 62. a 14. False 38. d 63. c 15. False 39. a 64. b 16. True 40. d 65. b 17. True 41. c 66. b 18. False 42. b 67. a 19. False 43. a 68. d 20. True 44. a 69. a 21. False 45. c 70. b 22. True 46. a 71. a 23. True 47. a 72. a 24. False 48. a 73. a 49. a 74. a Indicate whether the statement is true or false. 1. A business’ mission does not affect its long-run resource allocation, profitability, or survival. a. True b. Fals e 2. The process that turns a marketing plan into action assignments and ensures that these assignments are executed in a way that accomplishes the plan’s objectives is called evaluation. a. True b. Fals e 3. An operating decision is unlikely to have a great impact on the long-run profitability of a company. a. True b. Fals e 4. A diversification strategy is free of risk when a firm is entering unfamiliar markets. a. True b. Fals e 5. The term marketing mix refers to a unique blend of product, place (distribution), promotion, and pricing strategies (often referred to as the four Ps) designed to produce mutually satisfying exchanges with a target market. a. True b. Fals e 6. The creation and implementation of a marketing plan allows the organization to achieve marketing objectives and succeed. a. True b. Fals e 7. For a star, the best marketing tactic is to protect existing market share by reinvesting earnings in product improvement, better distribution, more promotion, and production efficiency. a. True b. Fals e 8. Strategic planning is the managerial process of creating and maintaining a fit between the organization’s objectives and resources and the evolving market opportunities. a. True b. Fals e 9. Market segments cannot be differentiated by ethnicity and multicultural aspects. a. True b. Fals e 10. RegiSure is a strategic business unit that shows low growth but has a dominant market share. Because of its market share, it should receive additional financing despite its low growth. a. True b. Fals e 11. Imitation by competitors indicates a lack of competitive advantage and almost ensures mediocre performance. a. True b. Fals e 12. Product/service differentiation competitive advantage means that an organization provides something that is unique and valuable to buyers beyond simply offering a lower price than that of the competition. a. True b. Fals e 13. According to the General Electric model for strategic alternatives, market conditions that have low overall attractiveness are the best candidates for investment. a. True b. Fals e 14. Adjacent innovation involves decisions that result in brand-new markets, products, and often new businesses by acquiring new assets to develop the type of breakthrough decisions that fall in this category. a. True b. Fals e 15. A company’s skills include patents, copyrights, and technology that are superior to those of the competition. a. True b. Fals e 16. A competitive advantage is a set of unique features of a company and its products that are perceived by the target market as significant and superior to those of the competition. a. True b. Fals e 17. According to Ansoff’s strategic opportunity matrix, both product development and diversification entail the creation of new products. a. True b. Fals e 18. Strategic planning should be an annual exercise in which managers quickly review the previous plan, retain the majority of previous strategies, and make only a few changes going forward so they can more easily track the success of new marketing tactics. a. True b. Fals e 19. When examining an organization’s internal strengths and weaknesses during SWOT analysis, the marketing manager may not focus on organizational resources such as production costs, marketing skills, financial resources, company or brand image, employee capabilities, or available technology. a. True b. Fals e 20. A strategic business unit (SBU) is a single business or a collection of related businesses. a. True b. Fals e 21. In terms of effective strategic planning, managers should establish new strategies but without challenging longstanding assumptions about the firm and the environment. a. True b. Fals e 22. Environmental scanning refers to the process of collecting and interpreting information about forces, events, and relationships in the external environment that may affect the future of the organization or the implementation of the marketing plan. a. True b. Fals e 23. An example of a market segment is a group of individuals from 11 to 16 years old who extensively use the Internet. a. True b. Fals e 24. A firm’s assets are functions—customer service and promotions—that the firm performs better than its competitors. a. True b. Fals e 25. Managers do not need to quantitatively measure whether or not an objective has been met. a. True b. Fals e 26. According to the Boston Consulting Group model, the best strategy options in dealing with problem children are to invest heavily to gain better market share, acquire competitors to get the necessary market share, or drop the SBU. a. True b. Fals e 27. If an organization has an SBU that it believes has the potential to be a star (and is probably a problem child at present), building would be an appropriate goal. a. True b. Fals e 28. SharpSheets is a paper manufacturing company that sells products made of recycled materials. Because no other paper manufacturing company in the market has the ability to replicate its products, it can be said that SharpSheets has a competitive advantage. a. True b. Fals e 29. Market penetration refers to attracting new customers to existing products. Ideally, new uses for old products stimulate additional sales among existing customers while also bringing in new buyers. a. True b. Fals e 30. Imitating a rival’s competitive advantage requires a company to first identify the rival’s competitive advantage. a. True b. Fals e Indicate the answer choice that best completes the statement or answers the question. 31. Which of the following processes provides the mechanisms for evaluating marketing results in light of the plan’s objectives and for correcting actions that do not help the organization reach those objectives within budget guidelines? a. Implementation b. Evaluation c. Control d. Marketing audit 32. Synergy Corp., a large seller of energy-efficient light bulbs, uses extensive promotional strategies to stimulate sales. Marketers at Synergy Corp. have noticed that a competitor is steadily gaining market share, and they want to counter the competition immediately by increasing the sales of Synergy Corp.’s bulbs. Given the situation, which of the following is the quickest step that Synergy’s marketers can take to stimulate the sales of its products? a. Changing the pricing strategy b. Creating complex production techniques c. Entering into new supplier contracts d. Adopting a divesting strategy 33. Revel Inc., a cell phone manufacturer, decides to launch its new line of smartphones on the company’s official website to resolve logistics issues that the company has identified. With this modification, its customers can now buy the smartphones even if they are not available in retail locations near potential consumers. In this case, Revel Inc. focuses on the _____ element of the marketing mix. a. evaluation b. promotion c. price d. distributio n 34. According to Ansoff’s strategic opportunity matrix, unlike market development, product development: a. focuses on attracting present customers to existing products. b. involves creating new products for present markets. c. involves entering new markets as competitors. d. focuses on using existing assets to provide added convenience to existing customers. 35. Using the innovation matrix, the strategic decision to implement changes that use existing assets to provide added convenience to existing customers and potentially entice customers from other brands is considered: a. a core innovation. b. an adjacent innovation. c. a transformational innovation. d. a diversification strategy. 36. Freulia Inc. manufactures and sells stationery and office supplies. It is beginning to lose its competitive advantage with the entry of new competitors. In this case, to gain a sustainable competitive advantage, what should Freulia do? a. Imitate the products of its competitors b. Depend on government subsidies c. Develop the skills and assets of the organization d. Aim at being the low-cost competitor in the industry 37. With reference to the General Electric model for selecting strategic alternatives, which of the following refers to how well placed in a market an organization needs to be to take advantage of opportunities? a. Business position b. Experience curve c. Market attractiveness d. Marketing myopia 38. Which of the following activities is carried out during the implementation of a marketing plan? a. Defining the business mission b. Performing marketing audit c. Setting up strategic business units d. Creating and managing a task force 39. Within the context of the marketing plan, implementation involves: a. allocating resources. b. identifying market segments. c. defining the business mission. d. assessing internal capabilities of a firm. 40. Remvault Dairies witnessed a steady decline in the sales of its products due to increased competition in the local market. Remvault Dairies plans to adopt the market development strategy. In this scenario, which of the following is the best step the company can take to rejuvenate its financial losses? a. Introduce new products into new markets. b. Create new products for its present markets. c. Attract existing customers rather than new customers. d. Focus on promoting new uses for old products. 41. Which of the following is correct about the product development strategy of Ansoff’s strategic opportunity matrix? a. It is a marketing strategy that tries to increase market share among existing customers. b. It is a marketing strategy that entails attracting new customers to existing products. c. It is a marketing strategy that entails the creation of new products for present markets. d. It is a strategy of increasing sales by introducing new products into new markets. 42. Nile Inc. is one of the leading shoe manufacturing companies in Baltonia. It manufactures canvas shoes that are similar to those produced by other brands. The management of the company has decided to adopt a product/service differentiation competitive strategy. In this scenario, what would Nile be likely to do? a. Offer its products at the lowest rates in the market b. Produce aerobic, tennis, and baseball shoes that have specialized features c. Advertise their products through more media outlets than before d. Sell products to markets outside Baltonia 43. Which of the following is the process that turns a marketing plan into action assignments and ensures that these assignments are executed in a way that accomplishes the plan’s objectives? a. Implementation b. Evaluation c. Control d. Marketing audit 44. Which of the following states the function of a distribution strategy in a marketing mix? a. Distribution strategy is about transporting raw materials or finished products. b. Distribution strategy is about educating customers about product benefits. c. Distribution strategy is about providing after-purchase services to customers. d. Distribution strategy is about public relations activities. 45. Which of the following firms is most likely to realize a competitive advantage through product/service differentiation? a. A firm that sells its products at lower costs than its competitors b. A firm that inhibits post-sale customer service relations c. A firm that provides highly reliable products d. A firm that solely relies on promotional strategies to increase its sales 46. Which of the following does a business exhibit when it describes itself in terms of goods and services rather than in terms of the benefits customers seek? a. Marketing myopia b. Marketing inertia c. Marketing dissonance d. Marketing blockage 47. When properly created, a strategic business unit (SBU) of a large company: a. has a specific target market. b. plans collaboratively with other SBUs of the company. c. has no competitors. d. shares the mission of its parent company. 48. Drafi Arts Corp. makes and sells original handicraft products. The management of the company has been successfully using a niche strategy for years. In this case, which of the following is the most likely to be true of Drafi Arts Corp.? a. It serves only a limited geographic market. b. It offers products at a lower price than that of the competition. c. It develops products that are similar to those of its competitors. d. It lowers costs by removing frills and options from its products. 49. Which of the following strategies in the marketing mix aims at bringing about mutually satisfying exchanges with target markets by informing, educating, persuading, and reminding them of the benefits of an organization or a product? a. Promotion strategies b. Distribution strategies c. Pricing strategies d. Product strategies 50. Marketers at Libra Electronics Inc. are developing promotional strategies to increase product sales. In this case, which of the following strategies would its marketers likely use to improve product/brand awareness among the public? a. They would limit the products’ availability to a few retail stores in the city. b. They would raise the prices of the products to signify high quality. c. They would reduce product features or options. d. They would print pamphlets that elaborate the products’ features. 51. One component of promotion within the context of a marketing mix includes ________. a. public relations activities b. pricing strategies c. after-purchase services d. storage and transportation of finished products 52. Rues and West Bros., an ammunition manufacturer, defines its mission statement as being in the ammunitionproduction business rather than in the arms industry. In the given scenario, Rues and West Bros. is exhibiting _____. a. marketing inertia b. marketing myopia c. marketing dissonance d. marketing blockage 53. Which of the following defines the key goal of an SBU that is a very successful cash cow? a. Hold b. Build c. Harves t d. Divest 54. A marketing mix typically involves: a. distribution strategies. b. divestiture strategies. c. restrictive covenants. d. federal regulations. 55. The marketers at Gemini Inc. have prepared a marketing plan for the company’s air conditioners. The managers at Gemini have outlined several activities for their subordinates based on this marketing plan and set a deadline and allocated a budget for each activity. Which of the following stages of the marketing plan is illustrated in this scenario? a. Evaluation b. Implementation c. Control d. Vertical integration 56. Which of the following encompasses the activities of selecting and describing one or more target markets and developing and maintaining a marketing mix that will produce mutually satisfying exchanges with target markets? a. Marketing strategy b. Marketing objective c. Marketing mix d. Market opportunity analysis 57. Which of the following strategies can enable companies to gain a cost competitive advantage? a. Removing frills from products b. Focusing on serving marginal customers c. Eliminating reverse engineering efforts d. Developing additional, exclusive functional departments 58. Magnira Inc. plans to implement a market penetration strategy to increase its market share. According to Ansoff’s strategic opportunity matrix, which of the following scenarios is most likely to happen? a. It will try to attract new customers to its products. b. It will try to increase its market share among existing customers. c. It will create new products for its existing customers. d. It will move away from its core capabilities and diversify its business. 59. In the context of the Boston Consulting Group’s (BCG’s) portfolio matrix, which of the following is true of SBUs considered to be question marks? a. They operate in a high-growth industry with a low market share. b. They generate more cash than they need to maintain their market share. c. They have low growth potential and a small market share. d. They do not require any cash to maintain their market. 60. Choqlate King Inc. is a large company that manufactures and sells chocolate bars. It plans to adopt a product development strategy. In this case, Choqlate King will: a. focus on attracting new customers and retain existing ones. b. offer chocolates at competitive prices. c. introduce a product line of low-calorie chocolates. d. use existing assets to provide added convenience to existing customers. 61. Addoso Inc. manufactures electronic gadgets. The marketing managers at Addoso have found that a new competitor is gaining more customers. In the context of SWOT analysis, which of the following actions should be prioritized by Addoso’s marketing managers? a. They must analyze aspects of its marketing environment. b. They must focus on organizational resources. c. They should ignore macroenvironmental forces. d. They should focus on lowering product prices. 62. Which of the following is characteristic of companies that embrace a niche market strategy? a. The strategy is often adopted by small companies with limited resources. b. The strategy is employed in a market segment that has low growth potential. c. The strategy is used to position the company as the long-term, low-cost competitor in an industry. d. The company typically removes frills and options from the product or service slated for its niche market. 63. According to Ansoff’s strategic opportunity matrix, which of the following factors is associated with market development? a. Limit production. b. Increase the prices of existing products. c. Add new uses to current products. d. Limit resources used for promotion. 64. The total revenue of a firm is calculated by multiplying the number of units sold by the ___________ of each unit. a. profit margin b. price c. discount d. overhead cost 65. The collection and interpretation of data about forces, events, and relationships in the external environment that may affect the organization’s future or its marketing plan implementation is called: a. SWOT analysis. b. environmental scanning. c. competitive advantage. d. cost competitive advantage. 66. Which of the following statements is true of effective strategic planning? a. Subordinates must persuade the management to accept their demands. b. Managers should challenge assumptions about the firm and the environment. c. Sound strategic planning is based on a trial-and-error method of execution. d. Strategic planning should be an annual exercise on a day specially designated for it. 67. If an organization has an SBU that it believes has the potential to be a star, the best allocation of future resources would be to _________ that SBU. a. build b. harves t c. divest d. hold 68. Which of the following generally does NOT result in a cost competitive advantage? a. Efficient labor b. Government subsidies c. Product design d. Maintaining older service delivery methods 69. Providing something to a target market that is unique and valuable beyond simply offering a lower price than that of the competition is called ________. a. product/service differentiation b. a niche competitive advantage c. a sustainable competitive advantage d. reengineering 70. The strategy in which an SBU preserves market share so that it can take advantage of a very positive cash flow is called ______________. a. divesting b. holding c. harvestin g d. building 71. Which of the following practices can help businesses gain a cost competitive advantage? a. Using simplified production techniques b. Using expensive raw materials c. Customizing products with extra features d. Focusing on serving marginal customers 72. In the context of SWOT analysis, marketers can identify strengths and weaknesses by focusing on: a. employee capabilities. b. aspects of the marketing environment. c. demographic forces. d. macroenvironmental factors. 73. Fourlotts Inc. is a renowned technological firm. It manages many strategic business units (SBUs) in which each SBU: a. has its own return on investment. b. shares the same goals and employs the same strategies as Fourlotts Inc. c. plans collaboratively with Fourlotts Inc.’s other SBUs. d. refrains from performing manufacturing functions. 74. Which of the following statements is true of the innovation matrix? a. As a company moves away from its core capabilities, it moves through a range of innovation. b. If an SBU of a firm is in a market with low overall attractiveness, it must be harvested. c. Products are matched with markets to develop alternative marketing strategies. d. Clear-cut sectors define modern businesses’ growth better than the fluid growth model.