MKT 387 Exam #2

____________ would be disciplined about minimizing the expenditures toward the brand and maximizing the short-term cash flow, while ___________ would sharply reduce long-term investment, but continue to support marketing and service operating areas.

A fast milking strategy; slow milking strategy

Four conditions under which organizations expanded globally and survived are: a repeatable formula for expansion, customer differentiation that travels, _____________, and _____________.

A strong core and industry economics.

The six quality dimensions include: performance, conformance to specifications, features, customer support, process quality, and _________.

Aesthetic design.

To successfully manage a strategic commitment, a firm should have four characteristics--a clear future strategy, assets, competencies, and resources to implement the strategy, and _________, and _________.

Buy-in throughout the organization and patience.

Centurion organized its brands into four groupings labeled blue, green, yellow and black.

False

Standardizing brand strategy leads to global market leadership.

False

The GE model is less complex than the BCG model.

False

The book suggests that one of six ways that new business is typically formed involves new distribution channels.

False

Accessing low-cost labor and materials is not a motivation for global strategies.

False.

According to Zook around one-third of successful sustainable growth companies had one or two repeatable formulas.

False.

Drucker advises innovators to try to innovate for the future.

False.

One-stop financial services was a winning strategy in the 1980s.

False.

The CMO and the CMO staff are best sourced from inside the organization because of the value of relationships.

False.

Brand identity is a set of current brand associations that the firm aspires to create or maintain.

False. A brand identity is an aspirational external brand image, which may not include elements that are currently present in the image. Brand image is the current image.

A branded energizer is defined in the book as a branded product or sponsorship that by association significantly enhances and energizes a target brand.

False. A branded energizer is a branded product, sponsorship, endorser, promotion, symbol, social program, CEO, or other entity that by association significantly enhances and energizes a target brand. The branded energizer and its association with the target brand are actively managed over an extended time period.

A global strategy is a multinational strategy in which separate strategies are developed for different countries.

False. A global strategy is conceived and implemented in a worldwide setting.

In a matrix organization, everyone has a dotted line reporting arrangement with the CMO.

False. A matrix organization allows a person to have two or more reporting links.

Synergy will result in one or more of the following: decreased revenues, increased operating costs, or increased investment.

False. As a result of synergy, the combined SBUs will have one or more of the following: (1) increased sales; (2) lower operating costs; and (3) reduced investment requirements.

Strategic commitment is superior to strategic opportunism.

False. Both may work but require different systems, people, and culture.

Brand awareness does not provide competitive advantages, only key success factors.

False. Brand Awareness does provide SCA's: signal of presence, commitment and substance, brand provides consumer with a sense of familiarity and salience that will determine consumer's recollection at time of purchase.

Brand association is anything directly related to the consumer's memory to a brand.

False. Brand association is anything directly and indirectly related to the consumer's memory to a brand.

Branded energizers are defined to be part of the master brand offering, but do not promise any functional benefits.

False. Branded energizers are not part of the master brand offering and are connected to the master brand, but do not promise any functional benefits.

Budget Rent-A-Car experienced a surge of growth by entering the rental truck and travel arena.

False. Budget Rent-A-Car attempted a host of strategies without success to improve on their also-ran status, including efforts to enter the travel arena and the truck rental business.

CSR refers to customer social relationship management.

False. CSR refers to Corporate Social Responsibility.

One of the creative thinking methods suggested in the chapter is to get a lot of options on the table.

False. Creative Thinking is located on pages 187-188.

A branded energizer should add energy, personality, and credibility to the master brand.

False. Credibility is not added, but associations are the third added characteristic.

Firms that chose customer relationship as a value proposition just need to provide good functional benefits of their product or service.

False. Firms that create intimacy deliver an experience that goes beyond functional benefits.

In dealing with the silo problem, a CMO should be aggressive. Just being a facilitator is not going to get the job done.

False. In most cases, the CMO should take up nonthreatening roles, not be aggressive.

It is believed that corporate social responsibility does not create shareholder value but rather just enhances a brand image.

False. In one survey more than 90% thought that socially responsible management creates shareholder value.

A branded differentiator is an actively managed branded feature, ingredient or technology, service or program that creates a meaningful, impactful sustainable competitive advantage for a branded offering over an extended period of time.

False. It creates a meaningful, impactful point of differentiation. The brand equity around the point of differentiation creates a basis for an SCA, but is not the definition of the differentiator.

The highest rated brand on perceived innovativeness was iPod.

False. It was Bluetooth.

According to the book, market development is based on the premise that the right people are available for implementing the leveraged business.

False. Market development is based on the premise that the business is operating successfully; there is no point in exporting failure or mediocrity.

Philip Morris was successful with 7-Up because of its distribution clout.

False. Morris failed with 7-Up for several reasons.

Most quality dimensions, such as performance, durability, reliability, and serviceability, are easy for buyers to evaluate.

False. Most quality dimensions, such as performance, durability reliability, and serviceability, are difficult if not impossible for buyers to evaluate.

To make progress on the silo challenge, it is necessary to centralize and standardize.

False. Page 272.

In the survey of 248 West Coast business managers, the most frequently mentioned SCA was financial resources.

False. Quality reputation is the correct answer.

Schlitz improved its market position with its aggressive low-cost strategy.

False. Schlitz's decision to reduce costs led to a loss of perceived quality that was disastrous.

An organizational culture involves three elements: a set of shared values, a set of norms of behavior, and a context or environment.

False. See Figure 15.3.

The Ford Galaxy was a good example of the advantage of a common strategy across Europe.

False. See page 240.

Confirmation bias occurs when the objective information cast doubt on the sales projections of a business.

False. See page 257.

Blue ocean businesses and red ocean businesses both generally allow for above average earnings.

False. See pages 217-218.

Successful early market leaders tend to get traction in a smaller market before looking to the mass market.

False. See pages 220-221.

In order for the quality option to be effective, a firm doesn't need senior management commitment, because the quality department is in charge of the total quality management program.

False. See text under TQM.

Key success factors (KSF's) and sustainable competitive advantages (SCA's) are different in that an SCA is necessary to compete and a KSF is the basis for a continuing advantage.

False. The KSF is actually necessary to compete and the SCA is the basis for a continuing advantage.

The experience curve is automatic and occurs over time.

False. The experience curve is not automatic. It must be proactively managed.

According to the book, celebrity endorsers should have five qualities—an appealing image, on-brand associations, the potential for a long-term relationship, a large following, and the absence of a negative reputation.

False. The first three are correct—the last two are potential to create programs around the endorser and being cost effective and available.

One dimension of organizational structure is the budgeting system.

False. The four key components of the organizational structure are: structure, systems, people, and culture.

The four strategic philosophies are strategic commitment, strategic opportunism, strategic vision and strategic intent.

False. The four strategic philosophies are strategic commitment, strategic opportunism, and strategic adaptability.

An organization implementing a strategic commitment should have an on-line information system and be capable of fast response.

False. The response time is long term and not fast. Strategic vision is based on forward thinking and a long term perspective.

An organization should enter countries in a sequential order.

False. The strategy to enter countries sequentially should be based on the strategic preferences of the organization. There are compelling factors to enter countries simultaneously as well.

Three steps to determine which assets and competencies should be leveraged were suggested. The first was to inventory assets and competencies, the second was to find an area where the assets and competencies can be applied to generate advantage and the third was to analyze the potential synergy.

False. The third advantage is incorrect in the statement above. The correct answer is address implementation problems.

The three types of brand assets are brand awareness, brand equity and brand loyalty.

False. The three types of brand assets are brand awareness, brand associations and brand loyalty.

Business portfolio analysis provides a structured way to evaluate business units on two key dimensions: the attractiveness of the market involved and the strengths of competitor's in that market.

False. The two key dimensions are attractiveness of the market involved and the strength of the firm's position in that market.

In the business-to-business space, more companies are trying to move from being component suppliers to being systems solution players because systems-based organizations will more likely to be more cost effective.

False. These companies are making this move because a systems-based organization will be more likely to control the customer relationship.

Proof points are programs, initiatives, and assets that are planned to provide substance to the strategic position.

False. This statement is true we must add that proof points help communicate the strategic position.

True market pioneers often survive because they enter the market first and build position and are able to withstand technological advances.

False. True market pioneers CAN survive because they enter the market first and build position BUT frequently aren't able to withstand technological advances.

Value should be determined by the firm and not by the customer.

False. Value is more likely to be real if it is driven from the customer's perspective rather than from the perspective of the business.

Wal-Mart's success in Germany shows the power of exporting a successful business model.

False. Wal-Mart failed in Germany because of an unsuccessful business model.

Four questions were suggested in the book as being a good source of growth options. One was asking whether brand extensions are possible. Another was whether new distribution channels are available.

False. Which assets and competencies can be leveraged? What brand extensions are possible? Can the scope of the offering be expanded? Do viable new markets exist?

When there is a real potential synergy, it will happen—otherwise it will simply be a hope.

False—implementation problems get in the way.

Low-end disruptive innovation is where industries are altered by emerging products that feature a price that appears dramatically low. Incumbent firms often employ this strategy.

False—it is usually newcomers to the market, not incumbent firms.

The book indicated that the Ford Explorer Eddie Bauer Edition has sold 100,000 vehicles since it was first introduced.

False—the correct number is one million.

Innovation can create what is often termed as __________.

First mover advantage.

The three steps of creating a brand identity are _____________, _____________, and _____________.

Identifying characteristics that brand should stand for, defining the core identity and communicate the brand internally (the core essence.)

The four ways to grow a business are to go global, to energize the business, and to __________ and ____________.

Leverage the business and create a new business.

Many blue ocean businesses can take one of two approaches to lower price points: ____________ or ____________.

Low-end disruptive innovation and focus on non-consumers (new-market disruptive innovation).

The eight motivations for global strategies are: to cross-subsidize, to dodge trade barriers, to access low cost labor/materials, to create global associations, to obtain global innovation, _________, __________, and ___________.

Obtain scale economies, access strategic markets, and access national incentives.

Strategic brand consolidation process includes five distinct steps: identifying the relevant brand set, assessing the brands, ______________, creating a revised brand portfolio strategy and ______________.

Prioritizing brands and designing a transition strategy.

___________ is a situation in which the strategic and tactical management of the brand is excessively focused on product attributes and functional benefits.

Product-attribute fixation trap

Successful early market leaders survive the difficulties of a first mover advantage by envisioning the mass market, maintaining managerial persistence, financial commitment, _____________ and _____________.

Relentless innovation and asset leverage.

Biases inhibiting exit decisions are ______________ and ______________.

Reluctance to give up and confirmation bias. Reluctance to give up alludes to emotional ties that make the decision difficult, while the confirmation bias refers to the notion that people seek information that confirms their initial position.

To manage customer loyalty, organizations will measure loyalty of existing customers, manage customer touch points, conduct exit interviews, maintain communication with customers, have a customer culture, measure the lifetime value of a customer, _______________ and _______________.

Reward loyal customers and make customers feel a part of the organization.

All of the following are brand ideals except: a. Eliciting joy b. Enabling connection c. Inspiring exploration d. Evoking pride e. Improving ego f. Impacting society

TBD******

The extremes on the relevance spectrum are ____________ and ____________. The middle of the spectrum belongs to ____________.

Trend neglectors and trend drivers; trend followers.

A business can be energized by getting the brand to have a retail presence.

True

Existing product markets are often attractive growth avenues because a firm has a base on which to build and momentum that can be exploited

True

Innovator's advantage provides the competitive advantages such as competitors' inability to respond in a timely manner, competitors' inability to respond at all, or that the innovator cultivates a customer loyalty with its position in the market.

True

Perceived value can be created without compromising the brand.

True

A brand touchpoint occurs any time a person in the marketplace interacts with the brand.

True.

A frequently unforeseen consequence of global expansion is that healthy markets, especially the home market, are put at risk by the diversion of resources.

True.

A hold strategy may prevent a firm from making investments that would help retain product relevance.

True.

A hold strategy will be superior to a milk strategy when the market prospects and/or the business position is not as grim.

True.

A key success factor can be a point of parity.

True.

A milk or harvest strategy aims to generate cash flow by reducing investment and operating expenses to a minimum.

True.

A signal of high quality for clothing is price.

True.

A strategic alliance is a collaboration leveraging the strengths of two or more organizations to achieve strategic goals.

True.

A strategic imperative is an investment in an asset or program that is essential if the promise to the customers is to be delivered.

True.

A successful low cost strategy is usually multifaceted and supported by a cost-oriented culture.

True.

A sweet spot should be a part of, if not central to a customer's self-identity and lifestyle or reflect a higher-order purpose in their lives.

True.

A value proposition is often an umbrella concept under which the supporting assets and competences and functional strategies and programs can be grouped.

True.

According to the book methods for increasing product usage include motivating heavy users to use more, making the use easier, providing incentives, remove or reduce reasons not to buy, provide reminder communications, reduce undesirable consequences of frequent use, and finding new uses.

True.

According to the book, among the ways for the CMO to get the CEO on board with respect to silos is to make the silo problems visible, align the role of marketing with growth objectives, and get easy and visible wins.

True.

Among the eight motivations for global strategies is to cross-subsidize businesses and to obtain scale economies.

True.

An effective sustainable competitive advantage needs to be both meaningful and sustainable. And it should be substantial to make a difference.

True.

An experience curve strategy will usually enhance product innovation.

True.

Andy Grove made the decision to get out of memory by pretending he was a new CEO brought in from the outside.

True.

Brand awareness serves to differentiate brands along a recall/familiarity dimension.

True.

Brand identity serves to drive and guide strategic initiatives throughout organizations, drive the communication program and support the expression of the organization's values and culture.

True.

Business strategies should offer a clear value proposition to customers and be supported by assets and competencies and functional strategies and programs.

True.

Cash cows are units that should no longer absorb investments aimed at growing the business.

True.

Curses that plague new businesses include success and substantial availability of resources.

True.

Differentiation is increasingly difficult to create and maintain as competitors proliferate products and quickly copy advances.

True.

Entering into new markets or launching new products are met with the challenges of resistance to new products, lack firm's assets and competencies in the new product's market and organizational access to resources necessary for launches.

True.

Firms dependent on brand association position based on certain attributes are vulnerable to competitor innovation and shouting matches that lead to lost credibility.

True.

If two businesses have synergy, their profitability operating together will be higher than if they operated separately.

True.

Implementing an exit decision is often delayed by managers who attempt to turn around a struggling business.

True.

In addition to knowledge of marketing, markets, and products, the central marketing staff needs to have knowledge of brands and the organization.

True.

In leveraging an existing brand to move into a new market, the new brand may seek distance and autonomy from the existing brand. However with that distance, the risk of the venture increases.

True.

It is optimal to have the same planning system used by all silos.

True.

Kirin was unable to compete with Asahi in part because of the authentic label.

True.

Maintaining relevance is the battle to stay associated with the product category in which the customer is interested.

True.

Motivations for exiting include avoidance of drain on profits by dog businesses in portfolio and purging businesses that do not fit the strategy of the firm.

True.

Niche specialists are successful because their strategies are based on commitment to a single product line or part of the market.

True.

Norms can vary with respect to their intensity and with respect to the degree of consensus or consistency with which they are shared.

True.

One of the benefits of a strategic alliance is that it can help a firm overcome trade barriers. Another is that it can compensate for the absence of or weakness in any of the needed key success factors for a market.

True.

Organizational culture provides the key to strategy implementation because it is such a powerful force for providing focus, motivation, and norms.

True.

Organizations can increase their likelihood of brand awareness by extending their presence outside the conventional media channels and using methods such as promotions, publicity and sampling.

True.

Some of the conditions that favor a milking strategy include a price structure that is stable at a level that is profitable for efficient firms.

True.

Strategic commitment has a long term perspective, while strategic opportunism is short term and strategic adaptability is medium term.

True.

Strategic intent is a sustained obsession with winning which involves a stretch of the organization and real innovation.

True.

Strategic intent recognizes the essence of winning, involves stretching an organization to continue to improve old SCA's or develop new ones, and requires real innovation.

True.

Strong motivations for a standardized global brand and position are media spillover and cross-country customer travel.

True.

Sub brands and endorsed brands are created when the parent company wants to prevent existing brands from damage and when an entirely new brand is not feasible based on lack of resources.

True.

Synergy between firms can provide an SCA that is truly sustainable because it is based on the characteristics of a firm that are probably unique.

True.

Synergy in practice is difficult because it can be difficult to predict whether synergy will actually emerge.

True.

The Datsun name was just as strong as the Nissan name four years after the name change primarily because brand awareness is an asset that can be extremely durable and thus sustainable.

True.

The assets and competencies of an organization represent the most sustainable element of a business strategy, because these are usually difficult to copy or counter.

True.

The key to success of strategic alliances is to maintain strategic value for each of the participants.

True.

The strongest brands often offer emotional benefits. They are about the "I feel" statement. Other strong brand benefit offerings are a self-expressive benefits, which are all about the "I am."

True.

The sweet-spot program should have an immediate impact by stimulating customer involvement and purchases, thus affecting the short-term financials.

True.

The ultimate measure of brand loyalty is that customers will recommend the brand to others.

True.

The virtual corporation is a team of people and/or organization formed for a particular client or job.

True.

To obtain significant operational economies, it is useful to examine the value chain and look for inherently high-cost components that could be eliminated or reduced.

True.

Transformational new business arenas can be based on offering a dramatically lower price point, analyzing alternative industries to find white space, offering a systems rather than components, building on customer insights or market trends and by collaborating with other people and firms.

True.

Virgin has extended its brand into dozens of business areas including cola and jeans.

True.

An exit decision should be considered if the market demand, competitive intensity, or strategic fit is regarded unfavorably.

True. Market demand and competitive intensity are not correct. Strategic fit, market attractiveness, and business position should be considered in an exit decision if these are regarded unfavorably.

Strategic drift is associated with an orientation toward the present.

True. Strategic drift results in investment decisions being made incrementally in response to opportunities (the present) versus being directed by a vision (long term).

With the experience curve, the total cost of a product will decline at a predictable rate as experience in building the product accumulates.

True. The experience curve suggests that a firm accumulates experience in building a product, its costs in real dollars (net of inflation) will decline at a predictable rate.

Among the critical determinants of an SCA is the choice of the product-market and the identity and nature of competitors.

True. The sustainable competitive advantage is determined by: the way a firm competes, the basis of competition, where a firm competes, and whom the firm competes against.

In an organization that subscribes to a strategically adaptable mentality, it is okay to fail.

True. These organizations are entrepreneurial and encourage experimentation

To successfully manage a strategic commitment, a firm should have four characteristics. Which of the following is not one of the four? a. Senior management with MBAs b. Buy-in throughout the organization c. Assets, competencies, and resources to implement it d. Patience e. A clear future strategy

a. Senior management with MBAs

Which of the following is not one of the three philosophies of developing strategy? a. Strategic Drift b. Strategic Opportunism c. Strategic Adaptability d. Strategic Commitment

a. Strategic Drift Strategic drift is a flaw of the strategic opportunism philosophy.

Brand extension evaluation asks three questions according to the book. Which of the following is not a brand extension question among the three? a. Will the brand extension be profitable? b. Will the extension enhance the brand name and image? c. Does the brand fit the new context? d. Does the brand add value to the offering in the new product class?

a. Will the brand extension be profitable?

Four key constructs that describe the organization include all but one of the following: a. People b. Competitor's commitment c. Systems d. Culture e. Structure

b Competitor's commitment.

Exit strategies should be considered in all of the following situations except: a. When the business position is weak. b. When a firm's reputation is at stake. c. When demand is diminishing quickly with no impending resurgence. d. When the strategic direction of the firm has changed.

b. When a firm's reputation is at stake. Though this may be a factor, this is not a defining characteristic for employing an exit strategy.

The low-cost strategic option consists of all of the approaches below except: a. Scale economies b. No-frills product/service c. Delivery of superior customer service d. Production/operations e. Experience curve

c. Delivery of superior customer service Customer service costs money.

Which of the following is not a competitive advantage included in brand loyalty: a. Reducing marketing costs b. Entry to barrier c. Increased name recall at time of purchase d. Satisfied customer base projects successful product e. Provides time to respond to competitive moves

c. Increased name recall at time of purchase. This characteristic is competitive advantage of brand awareness, not brand loyalty.

Of the following, which were among the six silo problems discussed in the book: i. Marketing resources are misallocated ii. Marketing management competence is weakened iii. People are not able to rotate throughout the organization Select one of the following a. None of the above b. One of the above c. Two of the above d. Three of the above.

c. Two of the above Point iii is not among the set.

A branded differentiator should add differentiation, communication benefits and _____________ to the master brand.

credibility

The four dimensions of an organization include people, structure, ________, and _________.

culture and systems

All of the following are examples of ways to stimulate basic business except: a. Expand buyer base b. Expand the loyal customer base c. Improve customer experience d. Eliminate inefficiencies e. Develop home-run marketing programs

d. Eliminating inefficiencies is a method to improve organizational performance, but is not considered a way to "energize business."

An organization's culture involves all but one of the following: a. Symbolic actions b. Shared values c. Norms of behavior d. Managerial style of the CEO e. Symbols

d. Managerial style of the CEO

Four factors are required for the creation of a sustainable competitive advantage. Which of the following is not one of those factors? a. Whom you compete against b. Basis of competition c. Where you compete d. Your strategic intent. e. The way you compete

d. Your strategic intent.

Barriers to long term success in existing product-markets do not include which of the following: a. Markets are so dynamic that this is easy to bet behind and become less relevant. b. Overcapacity in existing markets. c. Transparency issues. d. Fast responses by competitors e. Low cost benefit ratio for incumbent organizations.

e. Low cost benefit ratio for incumbent organizations.

A sustainable competitive advantage has several characteristics. Which of the following is not one of them? a. Sustainability b. They can be leveraged c. They should be supported by assets and competencies d. They cannot easily be neutralized by competitors e. They are easily copied

e. They are easily copied An SCA should not be easy to match or be neutralized by a competitor.

A business strategy should be challenged with respect to whether it contains a real and perceived value proposition and whether that value proposition is relevant, ________ and ________.

sustainable, and feasible.