Marketing Chapter 3

Operational plans focus on the long-term execution of the marketing plan performed by top-level management.

FALSE

________ strategies emphasize both new products and new markets to achieve growth. A) Diversification B) Market penetration C) Market development D) Product development E) Cash cow

A) Diversification

Which of the following is true about functional planning? A) It is conducted by the various functional areas of a firm. B) It is also called hierarchical management. C) It covers a longer time span than strategic planning does. D) It covers a shorter time span than operational planning does. E) It is the same as strategic planning.

A) It is conducted by the various functional areas of a firm.

Each year, a media company asks every department manager to rate his or her department's strengths and weaknesses as well as those of the other departments with which the department interacts. Then each department manager is asked what he or she sees as the greatest threats and opportunities for the company. The media company is asking its department managers to engage in a ________. A) SWOT analysis B) portfolio analysis C) market analysis D) functional planning session E) compatibility assessment

A) SWOT analysis

________ is the first, or "big picture," level of planning. A) Strategic planning B) Functional planning C) Operational planning D) Product development E) Business planning

A) Strategic planning

A mission statement is a formal document that describes the organization's overall purpose and what it hopes to achieve in terms of its products, resources, and ________. A) customers B) profits C) employees D) shareholders E) competitors

A) customers

Many airlines now sell tickets almost exclusively through online third-party vendors. This is an example of a ________ strategy. A) distribution B) pricing C) marketing control D) product E) promotional

A) distribution

A situation analysis is also known as a(n) ________. A) environmental analysis B) portfolio analysis C) market review D) growth strategy review E) action plan

A) environmental analysis

In recent years, security regulations enacted through the Transportation Safety Administration have affected Southwest Airlines. These regulations are part of the ________ affecting this airline. A) external environment B) internal environment C) competitive intelligence D) diversification strategies E) market development strategies

A) external environment

A donut shop chain opened its first store outside of North America with the opening of a shop in Australia. The donut company used a ________ strategy. A) market development B) product penetration C) market penetration D) cash cow E) product development

A) market development

A(n) ________ is a document that describes the marketing environment, outlines the marketing objectives and strategies, and identifies how the company will implement the strategies. A) marketing plan B) communications plan C) business plan D) operational plan E) financial plan

A) marketing plan

The vice president of marketing of a software development company periodically develops a(n) ________, which includes marketing research data on the target market, marketing objectives such as "to increase new customers by 20 percent," and a list of who will be responsible for implementation. A) marketing plan B) marketing mix C) pricing strategy D) action plan E) strategic plan

A) marketing plan

Market planning is followed by the ________, which details how the plan will be carried out, outlining the day-to-day execution. A) operational plan B) control plan C) SWOT analysis D) strategic plan E) marketing metric

A) operational plan

Columbia Sportswear has introduced a new line of comfortable, lightweight clothing for people who fish. An example of ________ is the decision to run a full-page ad in Field & Stream magazine in May to get potential customers to ask their sporting goods stores to carry the new products. A) operational planning B) strategic planning C) business planning D) portfolio planning E) brand extension

A) operational planning

The ________ is the most fundamental part of the marketing mix. A) product B) distribution C) price D) production E) profit

A) product

In which step of developing a marketing plan would managers examine external elements that specifically affect the marketing plan? A) situation analysis B) development of marketing objectives C) development of operational plan D) development of marketing strategies E) implementation of the marketing plan

A) situation analysis

Areas of business within a firm that are distinct enough to have their own missions, business objectives, resources, managers, and competitors are referred to as ________. A) strategic business units B) market development units C) market penetration units D) standard business units E) competitive intelligence units

A) strategic business units

Analysis of a firm's internal environment identifies the firm's ________. A) strengths and weaknesses B) strengths and opportunities C) opportunities and threats D) weaknesses and threats E) strengths and threats

A) strengths and weaknesses

A(n) ________ is the market segment a firm selects because management believes the firm's offerings are most suited to winning those customers. A) target market B) business portfolio C) SBU D) SWOT E) marketing control

A) target market

Which of the following is true about business planning? A) Business planning involves taking action before developing objectives. B) Business planning is an ongoing process. C) Business planning is concerned with the long term but not the short term. D) Business planning is concerned with the short term but not the long term. E) Business planning takes place after development of the marketing plan.

B) Business planning is an ongoing process.

Which of the following is a common objection to relying exclusively on ROMI for measuring marketing success? A) In a company's accounting statements, marketing expenditures tend to appear as investments rather than costs. B) Calculating ROMI requires knowing what would have happened if the marketing expenditures had never taken place. C) ROMI tends to lead managers toward a more long-term perspective on decision making. D) ROMI focuses on a firm's sustainability commitments to the detriment of its short-term performance. E) ROMI calculates profit by deducting expenditures rather than dividing by expenditures.

B) Calculating ROMI requires knowing what would have happened if the marketing expenditures had never taken place.

________ is the formal process of monitoring progress toward meeting marketing objectives. A) Market analysis B) Control C) Implementation D) Situation analysis E) SWOT analysis

B) Control

_______ generally cover a shorter time period than other plans, perhaps only one or two months, and include detailed directions for specific activities to be carried out. A) Timelines B) Operational plans C) Marketing plans D) Strategic plans E) Pricing strategies

B) Operational plans

________ is a tool management uses to assess the potential of a firm's business portfolio. It helps management decide how to allocate resources among the firm's current SBUs. A) SWOT analysis B) Portfolio analysis C) A PERT chart D) An operational plan E) A promotional strategy

B) Portfolio analysis

_______ refers to a company's estimate of the number of consumers who are willing and able to pay for a product. A) The market segment B) Potential demand C) Return on marketing investment D) Market share E) The mass market

B) Potential demand

________ is the managerial decision process that matches the organization's resources and capabilities to its market opportunities for long-term growth. A) Operational planning B) Strategic planning C) Portfolio analysis D) SWOT analysis E) Budgeting

B) Strategic planning

In which step of the market planning process are decisions made concerning what markets to target and what marketing mix strategies to use? A) perform a situation analysis B) develop marketing strategies C) implement the marketing plan D) control the marketing plan E) develop marketing metrics

B) develop marketing strategies

The ROMI of a campaign is an example of a(n) ________. A) promotion B) marketing metric C) action plan D) situation analysis E) promotional strategy

B) marketing metric

Concrete measures of various aspects of marketing performance are called ________. A) operational plans B) marketing metrics C) action plans D) marketing objectives E) pricing strategies

B) marketing metrics

In recent years, airlines have used debundling strategies, charging fees for perks such as checked baggage that had previously been included in the ticket price. This is an example of a ________ strategy. A) product B) pricing C) promotional D) place E) production

B) pricing

Marketers communicate a product's value proposition to the target market by implementing a ________. A) product segment B) promotional strategy C) pricing strategy D) distribution strategy E) marketing metric

B) promotional strategy

The second step of the marketing planning process is to ________. A) perform a situation analysis B) set marketing objectives C) define a marketing mission D) identify a target market E) develop a marketing mix

B) set marketing objectives

Kimball Gardens is a company that operates as two distinct businesses: one that sells lawn and garden products and one that markets booklets. Each business is called a ________. A) separate entity B) strategic business unit (SBU) C) cash cow D) star E) business portfolio

B) strategic business unit (SBU)

Questions such as "What business are we in?" and "What customers should we serve?" are typically addressed in the ________ stage. A) operational planning B) strategic planning C) market targeting D) functional planning E) market planning

B) strategic planning

The three levels of business planning are ________. A) managerial, operational, and promotional B) strategic, functional, and operational C) portfolio, strategic, and functional D) SWOT, strategic, and tactical E) operational, functional, and tactical

B) strategic, functional, and operational

Which of the following types of managers would be most likely to engage in operational planning on a regular basis? A) the company's CEO B) the company's sales manager C) the company's vice president of product research and development D) the company's vice president of human resources E) the company's chief financial officer

B) the company's sales manager

________ strategies introduce a firm's current products into new markets. A) Diversification B) Market penetration C) Market development D) Product development E) Cash cow

C) Market development

________ is the third, or "nuts-and-bolts," level of planning. A) Strategic planning B) Functional planning C) Operational planning D) Product development E) Business planning

C) Operational planning

Strategic planning for a large firm such as Disney with several SBUs probably occurs ________. A) only in its corporate headquarters B) only at the individual business unit level C) at both the overall corporate level and at the individual SBU level D) as needed based upon the success of each division E) at each location on a quarterly basis

C) at both the overall corporate level and at the individual SBU level

In the ________ stage of market planning, marketers must determine how they want consumers to think of their product in comparison to competing products. A) develop a mission statement B) perform a situation analysis C) develop marketing strategies D) develop distribution strategies E) implement the plan

C) develop marketing strategies

Fence Patrol has developed an entirely new mounting system for chain link fences. Although they are a local company, through the acquisition of a distributor they now have the ability to market their products nationwide. Fence Patrol will most likely use a ________ strategy. A) market penetration B) market development C) diversification D) divesting E) product development

C) diversification

In firms with multiple SBUs, the first step in strategic planning is for top management to ________. A) recruit and hire the right personnel B) examine historical data C) establish a mission for the entire corporation D) allocate resources to the company's various SBUs E) establish marketing's short-term objectives

C) establish a mission for the entire corporation

After marketing strategies are developed, the next step in market planning is ________. A) development of marketing objectives B) strategic planning C) implementation D) situation analysis E) pricing development

C) implementation

A growth strategy that attracts users of competitive brands is called a ________ strategy. A) market development B) product penetration C) market penetration D) diversification E) product development

C) market penetration

When General Mills urged consumers to lower their cholesterol by eating Cheerios twice a day over the course of six weeks, the aim was to increase usage among current customers. General Mills used a ________ strategy. A) market development B) product penetration C) market penetration D) diversification E) product development

C) market penetration

The four Ps are the components of the ________. A) marketing environment B) functional planning mix C) marketing mix D) marketing concept E) controls

C) marketing mix

In a marketing plan, the ________ state what the marketing function must accomplish to achieve overall business objectives. A) situation analyses B) strategic plans C) marketing objectives D) market development strategies E) marketing controls

C) marketing objectives

A sales manager sets an objective for her team to increase the units sold by five percent for the quarter. This objective is most likely part of a detailed ________ plan that is created annually, semiannually, or quarterly. A) strategic B) functional C) operational D) product development E) human resources

C) operational

Orkin Pest Control Service knows homeowners skimp on maintenance such as pest control during recessions. It also knows that the more consumers know about bugs, the more likely they are to buy the company's services. So Orkin teamed with the Smithsonian Institution on the Insect Safari, a traveling exhibit designed to teach people about the critters. The Safari truck visited 108 cities during one year, leaving a wake of creeped-out insectophobes reaching for the phone numbers of the local Orkin franchise. Business increased in each city the Safari truck visited. Decisions on which cities to visit and what kinds of promotion to use in each city visited are both examples of ________ plans. A) functional B) portfolio C) operational D) strategic E) control

C) operational

Analysis of the external environment of an organization identifies the organization's ________. A) strengths and weaknesses B) strengths and opportunities C) opportunities and threats D) weaknesses and threats E) strengths and threats

C) opportunities and threats

Which of the following best describes the components of the marketing mix? A) all aspects of the marketing environment B) everything considered during functional planning C) product, price, place, and promotion D) production, price, distribution, and people E) people, product, price, and placement

C) product, price, place, and promotion

SBU stands for ________. A) strategic buying utilities B) successful business utilities C) strategic business units D) standard business units E) successful business units

C) strategic business units

Which of the following is the best example of an activity metric? A) the volume of sales made during a month B) the volume of a competitors' sales during a month C) the number of sales calls made by a salesperson during a month D) the value of a firm's stock over a given month E) the total profit made by a firm over a given month

C) the number of sales calls made by a salesperson during a month

Which of the following is a limitation of the BCG matrix? A) It doesn't help managers determine which SBUs need investment to grow. B) It doesn't help managers determine which SBUs should be dropped from the portfolio. C) It focuses on the future of the market rather than current conditions. D) It doesn't tell managers the best ways to make growth happen. E) It can't be used by corporations with multiple SBUs.

D) It doesn't tell managers the best ways to make growth happen.

One objective of a small regional marketer of office supplies is to enter new markets. Which of the following most accurately identifies a weakness of this objective? A) It is not sustainable. B) It is not attainable. C) It is not realistic. D) It is not specific. E) It is not aspirational.

D) It is not specific.

________ decisions identify how marketing will accomplish its objectives in the target markets by using product, price, promotion, and place. A) Marketing metrics B) Strategic business unit C) Return on marketing investment D) Marketing mix E) Strategic planning

D) Marketing mix

The CEO, president, and top executive officers are responsible for ________ in the strategic plan. A) operational planning B) developing the details of the pricing strategy C) designing ad campaigns D) defining the firm's purpose E) determining employee benefits

D) defining the firm's purpose

When Amazon acquired Whole Foods, the brick-and-mortar supermarket, the company was pursuing a ________ strategy. A) market development B) product penetration C) market penetration D) diversification E) product development

D) diversification

Vice presidents of large companies are typically in charge of ________ planning. A) business B) strategic C) operational D) functional E) day-to-day

D) functional

A business plan ________. A) is a document that outlines marketing strategies step by step B) identifies how a company will measure and control specific marketing strategies C) is another name for a marketing plan D) includes the decisions that guide the entire organization or its business units E) is another name for a SWOT analysis

D) includes the decisions that guide the entire organization or its business units

Within a larger corporation, each SBU ________. A) has its own business portfolio B) has access to equal resources C) has separate shareholders D) is a separate profit center E) is dependent upon central management for a mission statement

D) is a separate profit center

The first step of the market planning process involves closely examining the ________. A) marketing strategies B) product development process C) marketing controls D) marketing environment E) marketing team

D) marketing environment

Alaska Airlines decided to fly a model of the Boeing 737 with overhead bins with significantly increased luggage space. This is an example of a ________ for Alaska Airlines. A) target market selection strategy B) pricing strategy C) control process D) product strategy E) marketing metric

D) product strategy

Advertising, sales promotion, public relations, publicity, direct marketing, and personal selling are all parts of the ________. A) target market strategy B) pricing strategy C) product strategy D) promotional strategy E) distribution strategy

D) promotional strategy

Making adjustments to the marketing plan is part of which stage of market planning? A) SWOT analysis B) portfolio analysis C) implementation and control of the marketing plan D) situation analysis E) development of marketing objectives

D) situation analysis

The BCG growth-market share matrix measures which of the following? A) the depth and breadth of a firm's different product lines B) a firm's internal strengths and external opportunities C) a firm's internal weaknesses and external threats D) the market growth rate and the relative market share of a firm's SBUs E) opportunities for growth in markets and the relative risk of different investments

D) the market growth rate and the relative market share of a firm's SBUs

The second step in strategic planning is to ________. A) formalize a mission statement B) establish the business portfolio C) set SBU and department-level objectives D) set organizational objectives E) assess the organization's internal and external environments

E) assess the organization's internal and external environments

As a part of the ________ process of market planning, managers need to look carefully at why a company isn't meeting its objectives. A) diversification B) market development C) brand competition D) marketing mix E) control

E) control

The ________ outlines how, when, and where the firm will make the product available to targeted customers. A) target market strategy B) pricing strategy C) product strategy D) promotional strategy E) distribution strategy

E) distribution strategy

Columbia Sportswear makes nylon activewear. Its marketing manager set a goal to increase sales 12 percent over the next three years through the introduction of a new line of comfortable, lightweight clothing for people who fish. The marketing manager is engaged in ________. A) operational planning B) strategic planning C) control planning D) portfolio planning E) functional planning

E) functional planning

Market planning is a type of ________. A) day-to-day planning B) financial planning C) strategic planning D) independent planning E) functional planning

E) functional planning

A detailed quarterly plan that states how many units of product each salesperson on the team needs to sell per month is an example of a(n) ________. A) business plan B) financial plan C) strategic plan D) functional plan E) operational plan

E) operational plan

Edy's is a brand of high quality ice cream. Edy's introduced Godiva ice cream and Starbucks ice cream to tempt ice cream lovers to eat even more ice cream. Edy's used a ________ strategy. A) market development B) product penetration C) market penetration D) diversification E) product development

E) product development

The ________ provides managers with four different fundamental marketing strategies: market penetration, market development, product development, and diversification. A) BCG growth-market share matrix B) portfolio analysis C) strategic plan D) SWOT analysis E) product-market growth matrix

E) product-market growth matrix

A chief marketing officer is more likely to be in charge of strategic planning rather than functional planning.

FALSE

A lagging indicator is a marketing metric used to analyze why a brand is losing market share to a competitor.

FALSE

Employee morale, promotion strategies, and competitors' reactions are all aspects of a company's internal environment.

FALSE

Planning means that an organization develops objectives while in the process of taking action.

FALSE

Product development strategies emphasize both new products and new markets.

FALSE

Runnerz is a company that makes running shoes. The company has defined its mission as follows: "At Runnerz, we make great running shoes." By defining itself in terms of its product, Runnerz has created a mission statement that adequately describes the organization's purpose.

FALSE

Strategic planning is also referred to as functional planning.

FALSE

The market planning process should be completed before the strategic planning process begins.

FALSE

The promotional strategy identifies how, when, and where the firm will make the product available to targeted customers.

FALSE

To ensure attainability, marketers increasingly try to state objectives in general terms.

FALSE

A firm's pricing strategy includes plans for prices for the final consumer as well as pricing that the firm will charge wholesalers and retailers.

TRUE

A manager's decision to run a quarter-page ad in the business section of the local newspaper to promote goodwill toward his company is part of an operational plan.

TRUE

Business planning is a process of making decisions that guide the firm in both the short and the long term.

TRUE

Decisions about packaging and branding are part of a firm's product strategy.

TRUE

Managers using the Boston Consulting Group growth-market share matrix are assessing the potential of a firm's existing SBUs to generate cash needed to invest in other businesses.

TRUE

Movie production companies sometimes re-release classic films to theaters to give people who enjoyed them the first time a chance to see the movies again. This is an example of a market penetration strategy.

TRUE

Strategic business units (SBUs) are individual units representing different areas of business within a firm that have their own missions, business objectives, resources, managers, and competitors.

TRUE

The distribution strategy is the place component of the marketing mix.

TRUE

Typically, each element of an action plan is linked to a budget item.

TRUE