Developing Marketing Strategies and Plans Part 2

47. Mission statements are at their best when they reflect a ________. a. market b. strength c. competency d. vision e. value Answer: d 48. Which of the following terms matches to the phrase “it is a single business or collection of related businesses that can be planned separately from the rest of the company”? a. Strategic business unit. b. Diverse business unit. c. Growth business unit. d. Niche market unit. e. Specialized business unit. Answer: a 49. Market-penetration, product-development, and market-development strategies would all be examples of ________ strategies. a. concentric b. conglomerate c. horizontal d. intensive growth e. integrative growth Answer: d 50. A(n) ________ is when a company might seek new businesses that have no relationship to its current technology, products, or markets. a. concentric strategy b. conglomerate strategy c. horizontal strategy d. intensive growth strategy e. integrative strategy Answer: b 51. Which of the following terms most closely matches to “the shared experiences, stories, beliefs, and norms that characterize an organization”? a. Organizational dynamics. b. A business mission. c. An ethical/value statement. d. Customer relationships. e. Corporate culture. Answer: e 52. The first step in the business unit strategic-planning process deals with which of the following? a. Goal formulation. b. Business mission. c. Strategy formulation. d. Program formulation. e. SWOT analysis. Answer: b 53. When a business gets to know market segments intimately and pursues either cost leadership or differentiation within the target segment it is referred to as a ________. a. defined strategy b. focused strategy c. value-added strategy d. competitive advantage strategy e. customer-focused strategy Answer: b 54. If a firm pursues a ________ strategy, it must be good at engineering, purchasing, manufacturing, and physical distribution. a. differentiation b. overall cost leadership c. focus d. domestic customer relationship e. market share Answer: b 55. To keep their strategic alliances thriving, corporations have begun to develop organizational structures to support them and have come to view the ability to form and manage partnerships as core skills. This is called ________. a. value managed partnership b. synergistic partnership c. centralized partnership d. partner relationship management e. win-win relationship management Answer: d 56. Traditionally, most businesses focused on stockholders. Today, the focus is on what are called ________. a. stakeholders b. partners c. regulators d. consumer triads e. supply-chain relationships Answer: a 57. A ________ 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. a. strategic plan b. marketing plan c. sales plan d. target market plan e. competitive analysis plan Answer: b 58. Which of the following permits senior management to grasp the marketing plan’s major thrust? a. The situation analysis. b. The marketing strategy. c. The executive summary and table of contents. d. Financial projections. e. Implementation and controls. Answer: c 59. Most marketing plans cover ________. a. one year b. two years c. three years d. four years e. five years Answer: a 60. The most frequently cited shortcomings of current marketing plans, according to marketing executives, are lack of realism, insufficient competitive analysis, and a ________ focus. a. long-term b. profit c. short-run d. product e. price Answer: c True/False 61. The traditional view of marketing is that the firm makes something and then sells it. Answer: True 62. The traditional view of marketing begins with a first step called strategic marketing. Answer: False 63. The formula, segmentation, targeting, and positioning (STP) is the essence of strategic marketing. Answer: True 64. The Japanese have extended the value delivery process by adding the concept of zero promotions after five years. Answer: False 65. The customer relationship management process is all the activities involved in receiving and approving orders, shipping the goods on time, and collecting payment. Answer: False 66. A principle of the value chain is that every firm is a synthesis of activities performed to design, produce, market, deliver, and support its product. Answer: True 67. Another name for a company’s value delivery network is “the intermediary team.” Answer: False 68. A core competency is usually common among competitors in a given industry. Answer: False 69. Holistic marketing focuses on the integration of value exploration, value creation, and value delivery as a means to build long-term relationships with consumers. Answer: True 70. If a manager asks “How can my company identify new value opportunities?,” he or she is examining a management question identified as being value creation. Answer: False 71. According to McKinsey research, a recommendation to managers and CEOs who are concerned about marketing performance was that marketers must test and develop programs more quickly as they enhance planning processes and research approaches. Answer: True 72. The marketing plan is the central instrument for directing and coordinating the marketing effort. Answer: True 73. A mission statement has as its primary focus the product and how to make it. Answer: False 74. One of the characteristics of a good mission statement is that it has an expansive number of goals for doing business. Answer: False 75. A good illustration of a market definition of the business a company is in would be “We sell gasoline.” Answer: False 76. If a company sought to expand the number of existing products sold to its current markets, it would use an integrative growth strategy labeled as “market-penetration strategy.” Answer: True 77. If a company sought to grow via a strategy that required the company to seek new businesses that have no relationship to its current technology, products, or markets, the company would be using a diversification strategy called a conglomerate strategy. Answer: True 78. Scenario analysis can be used to assist companies in appraising how well their corporate culture might match (or not match) potential business partners or acquisitions. Answer: True 79. Once an organization has established a business mission in its business unit strategicplanning process, it may proceed to the second step of the planning process called goal formulation. Answer: False 80. Good illustrations of microenvironment actors in the strategic planning process would be demographics, technology, and the social-cultural arena. Answer: False 81. To evaluate opportunities, companies can use Market Opportunity Analysis (MOA) to determine the attractiveness and probability of success. Answer: True 82. An environmental threat is a challenge posed by an unfavorable trend or development that would lead, in the absence of defensive marketing action, to lower sales or profit. Answer: True 83. Once a SWOT analysis has been completed, the strategic planner is ready to proceed to the goal formulation stage of the strategic planning process model. Answer: True 84. In applying MBO (management by objectives) all objectives are treated as being equally important—objective discrimination is not allowed. Answer: False 85. For an MBO (management by objectives) system to work, one of the four criteria that the unit’s objectives must meet is that objectives must be stated quantitatively whenever possible. Answer: True 86. A strategy is a game plan for achieving what the business unit wants to achieve. Page: 56 Answer: True Level of difficulty: Easy 87. Firms choosing a generic strategy centering on focus must be good at engineering, purchasing, manufacturing, and physical distribution. Answer: False 88. One of the four major categories of strategic alliance involves sharing personnel (e.g., human resource alliance) to staff alliance member marketing departments. Answer: False 89. Partner Relationship Management (PRM) can be thought of as a corporation’s development of structures that support strategic alliances and treats the formation and management of partnerships as a core skill. Answer: True 90. Companies normally measure their profit performance using ROI; however, this approach suffers because profits are arbitrarily measured and subject to manipulation. Answer: True 91. A marketing vision statement 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. Answer: False 92. Marketing plans are becoming more production-oriented because of the high costs of doing business in today’s economy. Answer: False 93. The marketing plan should open with a situation analysis. Answer: False 94. When a manager reaches the marketing strategy section of a marketing plan, he or she will define the mission and marketing and financial objectives. Answer: True 95. One of the key questions to ask in evaluating a marketing plan is whether the plan is simple or not. Answer: True 96. Such areas as sales forecasts, expense forecasts, and breakeven analysis are usually found in the financial projections section of the marketing plan. Answer: True 97. Return on investment (ROI) shows how many units must be sold monthly to offset the monthly fixed costs and average per-unit variable costs. Answer: False 98. Most marketing plans conclude with a section that indicates how the plan will be implemented. Answer: True 99. During the marketing strategy section of the marketing plan, goals and budgets are spelled out for each month or quarter so management can review each period’s results and take corrective action as needed. Answer: False 100. A good illustration of a marketing objective would to “decrease customer acquisition costs by 1.5 percent per quarter.” Answer: True Essay 101. There are two views of the value delivery process that may be followed by organizations seeking to gain business from consumers. Briefly, summarize each of those views. Suggested Answer: The traditional view of marketing is that the firm makes something and then sells it. In this view, marketing takes place in the second half of this process (see Figure 2.1 for additional details). Companies that subscribe to this view have the best chance of succeeding in economies marked by goods shortages where consumers are not fussy about the quality, features, or style. If abundant choices are present, this view does not work well. Another view emphasizes the organization’s role in the value delivery process. Strategic and tactical marketing are used to choose the value, provide the value, and communicate the value to consumers and channel partners. Marketing is moved to the first part of the delivery process. 102. The firm’s success depends not only on how well each department performs its work, but also on how well the various departmental activities are coordinated to conduct core business processes. List and briefly describe the five core business processes outlined in the text. Suggested Answer: The core business processes include (1) the market sensing process—all the activities involved in gathering market intelligence, disseminating it within the organization, and acting on the information; (s) the new offering realization process—all the activities involved in researching, developing, and launching new high-quality offerings quickly and within budget; (3) the customer acquisition process—all the activities involved in defining target markets and prospecting for new customers; (4) the customer relationship management process—all the activities involved in building deeper understanding, relationships, and offerings to individual customers, and (5) the fulfillment management process—all the activities involved in receiving and approving orders, shipping the goods on time, and collecting payment. 103. A successful company nurtures its resources and competencies. A core competency has three characteristics. Describe those characteristics. Suggested Answer: Core competency characteristics are: (1) it is a source of competitive advantage in that it makes a significant contribution to perceived customer benefits; (2) it has applications in a wide variety of markets; and, (3) it is difficult for competitors to imitate. 104. A holistic marketing orientation can provide insight into the process of capturing customer value. In this vain, the holistic marketing framework is designed to address three key management questions. Describe and illustrate each of these key management questions. Suggested Answer: The three management questions are: (1) value exploration— how can a company identify new value opportunities? (2) value creation—how can a company efficiently create more promising new value offerings? and (3) value delivery—how can a company use its capabilities and infrastructure to deliver the new value offerings more efficiently? 105. Marketing faces a number of challenges in the twenty-first century. Based on an extensive 2002 research study, McKinsey (a noted consulting firm) identified three main challenges as reflected by differences in opinion between chief executive officers (CEOs) and their most senior marketing executives or chief marketing officers (CMOs). What were those challenges and which of the challenges do you think is most important? Why? Suggested Answer: The three challenges are: (1) doing more with less, (2) driving new business development, and (3) becoming a full business partner. Answers will vary in what students perceive to be the most important challenge. However, be sure that any answer chosen is supported by materials found in this section of the chapter. 106. Indicate the differences and similarities between the following terms: marketing plan, strategic marketing plan, and tactical marketing plan. Suggested Answer: The marketing plan is the central instrument for directing and coordinating the marketing effort. The marketing plan operates at two levels: strategic and tactical. The strategic marketing plan lays out the target markets and the value proposition that will be offered, based on an analysis of the best market opportunities. The tactical marketing plan specifies the marketing tactics, including product features, promotion, merchandising, pricing sales, channels, and service. 107. Good mission statements are essential to being a success in business. Describe the three major characteristics that good mission statements should have. Suggested Answer: Major characteristics include: (1) they focus on a limited number of goals; (2) mission statements stress the company’s major policies and values; and (3) they define the major competitive spheres within which the company will operate (e.g., industry, products and applications, competence, market segment, vertical, and geographical). 108. Assessing growth opportunities involves planning new businesses, downsizing, or terminating older businesses. The company’s plans for existing businesses allow it to project total sales and profits. If there is a gap between future desired sales and projected sales, corporate management will have to develop or acquire new businesses to fill it. Identify and describe the three strategies that can be used to fill the strategic gap. Suggested Answer: The first option is to identify opportunities to achieve further growth with current businesses (intensive growth opportunities). The second is to identify opportunities to build or acquire businesses that are related to current businesses that are unrelated to current businesses (integrative growth opportunities). The third is to identify opportunities to add attractive businesses that are unrelated to current businesses (diversification growth opportunities). 109. Assume that you are directed to prepare short brief explaining the steps of the Business Unit Strategic-Planning Process. Your task is to construct such a brief by carefully outlining the steps of the aforementioned process. Suggested Answer: Refer to Figure 2.7 in the chapter for assistance. Students should be able to describe (in order) the business mission, SWOT analysis, goal formulation, strategy formulation, program formulation, implementation, and feedback and control. The descriptions do not need to be long; however, they do need to be consistent with the text material. Answers will vary but consistency should be a learning goal. 110. As a marketing manager for a large steel company you have been assigned the task of educating a group of new managers on how to prepare a marketing plan. Though few of these managers will actually ever have to prepare such a plan because of their functional roles in the organization, it is still very useful that each new manager know how to construct a marketing plan. Prepare a brief summary of the contents of the marketing plan for the new managers. You may keep your discussion general or make it specific to the steel industry. Suggested Answer: The contents of a marketing plan include (1) an executive summary and table of contents, (2) a situation analysis, (3) marketing strategy, (4) financial projections, and (5) implementation controls. Descriptions of the content steps may vary but should be in keeping with the general outline of this section of the chapter. See text material for further information.