Developing Marketing Strategies and Plans Part 3

APPLICATION QUESTIONS Multiple Choice 111. If a manager were following the traditional view of marketing wherein the firm makes something and then sells it, all of the following would part of the “sell the product” process sequence EXCEPT ________. a. price b. advertise/promote c. design product d. distribute e. service Answer: c 112. As indicated in the text, critics of Nike and its shoe products often complain that ________. a. Nike has too many professional athletes endorsing their products b. Nike has an unfair advantage in product design c. Nike has unfair leverage with distributors d. Nike shoes cost almost nothing to make yet cost the consumer so much e. Nike does not support ecological causes Answer: d 113. According to the Japanese view of the value delivery process, the company should receive the required parts and supplies continuously through just-in-time arrangements with suppliers. This concept would be most appropriately called ________. a. zero customer feedback time b. zero product improvement time c. zero purchasing time d. zero setup time e. zero defect Answer: c 114. Apex Corporation is known in its industry being “best of class” in terms of costs and performance. Many companies will probably use Apex Corporation as a ________. a. target b. benchmark c. competitor to beat d. future supplier e. sounding board for ideas Answer: b 115. James Franks has been put in charge of gathering marketing intelligence, disseminating it within his organization, and eventually directing action on the information. Which of the following core business processes most closely matches with the task that Mr. Franks has been given? a. The market sensing process. b. The new offering realization process. c. The customer acquisition process. d. The customer relationship management process. e. The fulfillment management process. Answer: a 116. Netflix, the pioneer online DVD rental service, has what is called ________ because they are excellent in broad business processes. a. core competency b. distinctive capabilities c. market savvy d. business touch e. intuitive synergy Answer: b 117. George Day sees ________ organizations as excelling in three distinctive capabilities: market sensing, customer linking, and channel bonding. a. production-driven b. globally-driven c. human resource-driven d. engineering-driven e. market-driven Answer: e 118. Holistic marketers achieve profitable growth by expanding ________, building customer loyalty, and capturing customer lifetime value. a. design skills b. customer share c. promotion venues d. database resources e. competitive space share Answer: b 119. In the past Kodak was not necessarily known for embracing technology that did not come from Kodak engineers and designers. However, as Kodak addresses the digital revolution taking over the photographic industry, it wants customers to see it as a leader in digital photography and is moving away from its connection to print-only photography. This would be an example of which of the following value-creation steps? a. Redefining the big idea. b. Reshaping the business scope. c. Repositioning the company’s brand identity. d. Redoing its corporate logo. e. Researching its competitors. Answer: c 120. According to a McKinsey report, CEOs need and expect all areas of their organizations to be more efficient. Which of the following statements would be the best illustration of this need and expectation? a. Doing more with more. b. Doing less with less. c. Doing less with more. d. Doing more with less. e. Doing about the same with more. Answer: d 121. According to a recent McKinsey report regarding characteristics that help to position marketers as business development leaders, ________ illustrates one of those characteristics. a. “never bite off more than you can chew” b. “if it ain’t broke, don’t fix it” c. “always pursue Internet opportunities” d. “strike while the iron is hot” e. “identify profitable unmet needs before brainstorming creative solutions” Answer: e 122. According to Collins and Porras’ Built to Last, ________ is characterized as a visionary company—acknowledged as the industry leader and widely admired because they set ambitious goals, communicated them to their employees, and embraced a high purpose beyond making money. a. General Electric b. Delta Airlines c. Farmer’s Insurance d. Wells Fargo e. McDonald’s Answer: a 123. Juan Garcia is seen as a ________ planner because he plans the daily promotional releases about his company’s products and services. a. strategic b. selective c. tactical d. niche e. organizational Answer: c 124. Sony’s former president, Akio Morita, wanted everyone to have access to “personal portable sound,” so his company created the Walkman and portable CD player. Which of the following planning aids most likely assisted Mr. Morita with his vision? a. The mission statement. b. A SWOT analysis. c. Knowledge of customers. d. A database. e. An executive summary to a formal marketing plan. Answer: a 125. Which of the following most closely matches a correct market-oriented definition of a business? a. Missouri-Pacific Railroad—we run a railroad. b. Xerox—we make copying equipment. c. Standard Oil—we sell gasoline. d. Encyclopedia Britannica—we distribute information. e. Columbia Pictures—we make movies. Answer: d 126. If you were the CEO of a company that was looking to implement strategies to fill a perceived strategic-planning gap, you would most likely explore ________ growth first because it would be easier to improve an existing business rather than building a new one. a. intensive b. integrative c. diversification d. conglomerate e. concentric Answer: a 127. If you were the marketing manager of an organization that had chosen growth via current products sold to new markets, your organization would have chosen a ________ strategy. a. market-penetration b. market-development c. product-development d. diversification e. concentric Answer: b 128. ________ describes the way people in an organization are dressed, how they talk to one another, and the way they greet their customers. a. Strategic orientation b. Competitive positioning c. Distinctive advantage d. HR training strategy e. Corporate culture Answer: e 129. Once an organization establishes its business mission, conducts a SWOT analysis, and goes through a goal formulation process, it is ready to go through a step called ________ to continue with a strategic-planning process. a. program formulation b. strategy formulation c. implementation d. functional analysis e. feedback and control Answer: b 130. McDonald’s has often teamed up with Disney to offer products related to current Disney films as part of its meals for children. The best description of this form of alliance would a ________ alliance. a. product alliance b. logistics alliance c. pricing collaboration d. service e. promotional Answer: e Short Answer 131. If you were the marketing manager for small regional toy manufacturer who embraced strategic marketing application to your value creation and delivery sequence process, you would use three processes or acts to choose the value of your offer. Name those three processes. Suggested Answer: The three processes would be (1) customer segmentation, (2) market selection/focus, and (3) value positioning. 132. In the example of Gymboree, we learn that they are a 530-store chain that sells children’s clothing to upscale parents. Because there are not enough parents making more than $65,000 year to support more stores, Gymboree has created Janie and Jack, a chain selling upscale baby gifts. Hot Topic, a chain that sells rock-band inspired clothes for teens, recently launched Torrid to give plus-size teens the same fashion options. Instead of emphasizing making and selling, this company sees itself as part of a value delivery process. The value delivery process consists of three parts. What are those parts and what is their function? Suggested Answer: The first phase, choosing the value, represents the “homework” marketing must do before any product exists. The second phase, providing the value, is where product features, prices, and distribution are selected. The third phase, communicating the value, utilizes the sales force, sales promotion, advertising, and other communication tools to announce and promote the product. 133. Define value chain. What does a value chain do? Suggested Answer: A value chain is a tool for identifying ways to create more customer value. According to this model, every firm is a synthesis of activities performed to produce, market, deliver, and support its product. 134. If an organization was very strong at defining target markets and prospecting for new customers, which of the core business processes would this organization have mastered? Suggested Answer: The core business process of customer acquisition. 135. In a holistic marketing framework with respect to customer focus, what would be components that would match to value exploration, value creation, and value delivery? Suggested Answer: With respect to customer focus, the value exploration would be “cognitive space”, value creation would be “customer benefits”, and value delivery would be “customer relationship management. For additional information, refer to Figure 2.3. 136. What three spaces are discussed when a holistic marketing organization goes through a value exploration? Suggested Answer: The spaces would be cognitive space (customer focus), competency space (core competencies), and resource space (collaborative network). 137. In the central role of strategic planning, only a handful of companies stand out as master marketers—Procter & Gamble, Southwest Airlines, Nike, Disney, Nordstrom, Wal-Mart, and McDonald’s to name a few. From a consumers perspective why do you think they stand out? Explain. Suggested Answer: Students should explain that these companies focus on the customer and are organized to respond effectively to changing customer needs. They all have well-staffed marketing departments, and all their other departments—manufacturing, finance, research and development, personnel, purchasing—also accept the concept that the customer is king. 138. All corporate headquarters undertake four planning activities. What are those activities? Suggested Answer: The activities are (1) defining the corporate mission, (2) establishing strategic business units, (3) assigning resources to each SBU, and (4) assessing growth opportunities. 139. Porsche makes only expensive cars and Gerber serves primarily the baby market. Which of the major competitive spheres within which a company will operate matches most closely to the examples above? Suggested Answer: Several competitive spheres are mentioned (e.g., industry, products and applications, competence, market segment, vertical, and geographical). The sphere most appropriate in this case is market segment. 140. Ansoft’s product-market expansion grid shows three intensive growth strategies that can be used to assist a marketing manager in finding creative ways to close a perceived strategic gap. Characterize each of the cells of Ansoft’s grid. Suggested Answer: The three cells are: (1) market-penetration strategy—current products sold to current markets, (2) market-development strategy—current products sold to new markets, and (3) product-development strategy—new products sold to current markets. 141. If a company decides to acquire one of its suppliers to gain more control or generate profit, it would have chosen which form of integrative growth strategy? Suggested Answer: The company would have selected a backward integration strategy. 142. When Yahoo! began to flounder in the 2001, CEO Terry Semel imposed a more conservative, buttoned-down atmosphere on the freewheeling Internet startup. At the new Yahoo!, spontaneity is out and order is in. What term is most closely applied to the organizational change phenomenon described above? Be sure to explain what the term means with respect to the example provided. Suggested Answer: The correct term would be corporate or organizational culture. Corporate culture has been defined as “the shared experiences, stories, beliefs, and norms that characterize an organization.” 143. Describe what happens in scenario analysis and explain why firms such as Royal Dutch/Shell Group use the technique. Suggested Answer: Scenario analysis consists of developing plausible representations of a firm’s possible future that make different assumptions about forces driving the market and include different uncertainties. Answers may vary on why to use the concept but answers should be mindful of the definition above. 144. Explain what happens in a SWOT analysis during the strategic planning process. Suggested Answer: SWOT (strengths, weaknesses, opportunities, and threats) monitors the external and internal environment by examining key macroeconomic and microeconomic forces and actors that have an impact on the organization’s business and industry. See chapter for additional details on the SWOTs analysis format. 145. What questions would typically be asked during a market opportunity analysis (MOA)? Suggested Answer: Questions would typically be: (1) Can the benefits involved in the opportunity be articulated convincingly to a defined target market(s)? (2) Can the target market(s) be located and reached with cost-effective media and trade channels? (3) Does the company posses or have access to the critical capabilities and resources needed to deliver the customer benefits? (4) Can the company deliver the benefits better than any actual or potential competitors? And (5) Will the financial rate of return meet or exceed the company’s required threshold for investment? 146. 147. For an MBO system to work, the business unit attempting to implement the process must meet four criteria. What are those criteria? Suggested Answer: The criteria are (1) they must be arranged hierarchically, from the most to the least important, (2) objectives should be stated quantitatively whenever possible, (3) goals must be realistic, and (4) objectives must be consistent. Which of Michael Porter’s generic strategies would be most appropriate for an organization that concentrates on achieving superior performance in an important customer benefit area valued by a large part of the market? Quality leadership would be one example of the end result of such a strategy. Suggested Answer: The strategy that would be most appropriate would be that of differentiation. 148. When H&R Block and Hyatt Legal Services combined their efforts (two service businesses), they also joined marketing forces to create a strong alliance. Which of the alliance forms cited in the text most closely matches the H&R Block and Hyatt Legal Services alliance? Explain. Suggested Answer: This alliance is called a product or service alliance where one company licenses another to produce its product, or two companies jointly market their complementary products, or a new product. 149. Characterize a marketing plan. Suggested Answer: A marketing plan is a written document that summarizes what the marketer has learned about the marketplace and indicates how the firm plans to reach its marketing objectives. It contains tactical guidelines for the marketing programs and financial allocations over the planning period. 150. During which stage of the marketing plan will the marketing manager establish the product line’s positioning? Suggested Answer: The stage where product line positioning will be addressed is the marketing strategy stage.