MKTG 351 CH 2

You are the senior financial analyst supporting the marketing department in your company, and head of marketing has asked you to come up with one performance metric that can be used to evaluate how effective each marketing campaign is in terms of contribution to the firm's profits. It should be a metric that can be easily used to compare different marketing campaign against each other. ​ In response, you propose using:

A metric that takes the total new sales dollars generated by a campaign and divides it by the total cost of the campaign.

High Gliding Air Academy is developing its marketing mix for the coming year. Its managers know that they must first select ____ which may be the most important decision they make in the planning process.

a target market

A strategic window is

a temporary period of optimum fit between the key requirements of a market and the particular capabilities of a firm competing in that market.

EXperience Limited is a company which offers tours and vacations that include participation in an extreme sport, such as hang-gliding, bungee jumping, skydiving, and motocross. Adrian Moss, EXperience Limited's owner, has just finished developing the strategic plan, including marketing objective of growing his customer base by 15% during the coming year. He believes that the best way of reaching that objective is to promote to the college-aged student. In the past, the majority of his sales have been to males under the age of 29, participating in hang-gliding and bungee jumping at various tourist locations. He wants to expand his skydiving and motocross tours, but isn't sure whether or not the expansion will be profitable. He currently has a database containing all the customers who have gone on a hang-gliding or bungee jumping vacation with his company. ​ Refer to Scenario 2.2. The fact that college enrollments have been increasing at a fast rate the past few years is an example of ____ and creates a ____ for EXperience Limited.

an environmental factor; marketing opportunity

Scenario 2.1 Use the following to answer the questions. ​ Southwest Airlines has a history of being able to retain its employees due to the atmosphere and culture of the company. Employees have been known to dress up in costume on an airplane, engage in "games" with the passengers, and generally provide a fun atmosphere for traveling. While other airlines have low rates of customer satisfaction, Southwest tends to maintain a high rating with its customers. Recent gas price hikes have caused most airlines to charge for checked luggage and to fill every flight to its maximum, adding to the negative experience of airline travel. Southwest keeps its costs low through several methods, one being that they do not serve meals on flights, or provide pre-boarding passes. The typical flight is two hours or less and occurs between several selected cities rather than flying to practically anywhere in the country. Southwest is known for its low fares, its dependability, and its on-time flights. ​ Refer to Scenario 2.1. Southwest's low fares, dependability, and its on-time flights represent its

competitive advantage

Sayed's employer is currently developing a new marketing strategy. The top managers have developed the marketing strategy and have given it to Sayed so that he can now develop an implementation plan. Sayed's company will most likely end up with which type of strategy?

Centralized

____ strategy determines the means for utilizing resources in the functional areas of marketing, production, finance, research and development, and human resources to achieve the organization's goals.

Corporate

Which of the following is a characteristic of a marketing objective?

It is consistent with both business-unit and corporate strategy.

A firm's unique symbols, personalities, and philosophies comprise its

corporate identity.

An expected level of performance against which actual performance can be compared is a

performance standard.

A marketing plan

provides a framework for implementing and controlling marketing activities.

Based on the work by the Boston Consulting Group, products with a dominant share of the market and good prospects for growth are

stars

Scenario 2.1 Use the following to answer the questions. ​ Southwest Airlines has a history of being able to retain its employees due to the atmosphere and culture of the company. Employees have been known to dress up in costume on an airplane, engage in "games" with the passengers, and generally provide a fun atmosphere for traveling. While other airlines have low rates of customer satisfaction, Southwest tends to maintain a high rating with its customers. Recent gas price hikes have caused most airlines to charge for checked luggage and to fill every flight to its maximum, adding to the negative experience of airline travel. Southwest keeps its costs low through several methods, one being that they do not serve meals on flights, or provide pre-boarding passes. The typical flight is two hours or less and occurs between several selected cities rather than flying to practically anywhere in the country. Southwest is known for its low fares, its dependability, and its on-time flights. ​ Refer to Scenario 2.1. The fact that Southwest Airlines has a history of being able to retain its employees is a(n) ____ in its SWOT analysis. This low turnover creates more knowledgeable and satisfied employees, a potential _______.

strength; competitive advantage

An analysis of ____ examines internal factors that give the organization certain advantages and disadvantages in meeting the needs of its target markets.

strengths and weaknesses

John Deere's strong name recognition and solid customer demand for its farm and garden equipment are two elements of the firm's

strengths.

Successful business organizations should take actions to convert internal weaknesses into ____ and external threats into ____.

strengths; opportunities

Because of its highly efficient and low-cost distribution system, Walmart has a ____ advantage over Kmart.

sustainable competitive

Marketing planning and implementation are inextricably linked in successful businesses.

true

Your quarterly strategic planning meeting will be held next month. You will schedule all the brainstorming and discussion activities for the meeting in a sequence and structure consistent with the hierarchy of the traditional strategic planning process. ​ Which of the following sequence of activities should you schedule in order to be most consistent with the hierarchy of the traditional strategic planning process?

1: Develop the company's mission and goals; 2: Develop business unit strategies; 3: Complete a SWOT analysis for the company; 4: Develop functional area goals and objectives.

Identifying and analyzing a target market and developing a marketing mix to satisfy individuals in that market are essential elements of which of the following parts of strategic planning?

Developing a marketing strategy

You want to include a detailed marketing organizational chart in the company marketing plan.

Marketing Implementation

Which of the following statements about the marketing mix is incorrect?

Once a marketing mix has been created for a particular target market, it cannot be changed until a new strategic window opens.

Which of the following is not a purpose of the marketing plan?

Serve as a contract with the customer

Which of the following statements is incorrect?

Strategic planning begins at the marketing level and proceeds through business-unit and corporate levels.

You are writing an Environmental Analysis for the marketing plan for your company. You were given the following master list of environmental factors that should be addressed in the plan: Foreign exchange rates Trade policy Population growth rates Tax policy Environmental regulations Production automation trends Health and medical trends You are responsible for the subsection dealing with political and regulatory factors that will impact your company's marketing strategies. ​ Which of the factors from the master list of environmental factors will you include in your subsection?

Trade policy; Tax policy; Environmental regulations

According to the text, a market is defined as

a group of individuals and/or organizations that have needs for products in a product class and have the ability, willingness, and authority to purchase those products.

In response to the increase in demand for organic foods, Wegmans, Inc., a regional supermarket, recently created organic food departments within their large stores. The creation of these departments was a result of

a market opportunity

After determining that consumers had concerns about fat and carbohydrates, Sardino's Pizza began offering a low-fat, low-carb pizza product. The creation of this new product was the result of

a market opportunity.

When Disney World wants to have at least 90 percent of its customers indicating they had a memorable and satisfying experience at the park hotels, this is an example of

a marketing objective

Your company is holding its annual five-year strategic planning conference. The purpose of the conference is to solidify the go-forward tactics and strategies to enable the company to compete effectively in its industry. You are managing this conference and the various breakout sessions that will take place. ​ Consistent with the sequence of the traditional strategic planning process, the first breakout session should be

a session where the firm's mission and goals are established or revised.

The marketing plan is

a written document detailing activities to be performed to implement and control marketing actions.

The strategic planning process begins with

analysis of the marketing environment.

Business decisions made in creating a marketing mix

are only as good as the organization's understanding of the needs of the target market.

Jason, a 17-year old high school student, wants to buy a pack of Marlboro Lights. He has the money to purchase them, but he is still not considered to be a market for the product due to his lack of ____ to buy.

authority

​Marketers understand that the best marketing strategy in the world is doomed to fail if it is not properly implemented. With that in mind, an effective implementation strategy

begins with identifying the activities to be performed, and ends with assigning responsibility for each activity to one or more team members.

Emma is responsible for developing and implementing the marketing plan for a new type of walking shoe targeted toward older women. Her responsibility includes making sure that the production and deliveries to the retail stores are coordinated for this new product. In order for the marketing implementation to be successful, Emma should be sure the needs of ____ customers are met.

both the internal and external

According to the Boston Consulting Group, marketers may classify their products as all of the following except

cash contributors.

Rollins Steel Corporation, a leader in industrial supplies, has identified its auto battery unit as having a dominant market share; however, it has low prospects for growth. The unit currently generates more cash for Rollins Steel than is required to maintain its market share. According to the Boston Consulting Group, the auto battery unit would be classified as a _____

cash cow.

Mama Vertalli's Bakery is a family-owned business with over $1 million in annual revenues and six locations. At Mama Vertalli's, decisions are sometimes slow in coming and top-level managers delegate very little authority to lower-level employees. Mama Vertalli's is a(n) ____ organization.

centralized

A ____ is created when a company matches its core competency to opportunities it has discovered in the marketplace.

competitive advantage

Amazon's pricing, service, and continuing investment in improving its website with additional product offerings give it a(n) ____ over many other retailers.

competitive advantage

All marketing mix decisions must have two characteristics: ____ and ____.

consistency; flexibility

The reputation and well-known brand name of Rolex watches represents a ____ for Rolex.

core competency

Resource deployment and coordination of functional areas of business are determined by

corporate strategy.

When managers at Logistics Pro are developing their strategic plan, they use a market orientation as a guide to ensure that ____ is an integral part of the process.

customer satisfaction

The Kingtel Corporation is expanding operations into countries outside the United States. To improve local managers' responsiveness to local conditions, Kingel's senior management has decided to delegate decision-making authority further down the chain of command. Acme is

decentralizing.

​The ___________________ section of the marketing plan supplies information about the company's current situation with respect to the ________________, the target market, and the firm's current objectives and performance.

environmental analysis; marketing environment

The first step in the strategic performance evaluation is to

establish performance standards.

One way that Honda evaluates its product and service level is by how well it ranks on the J. D. Power & Associates Sales Satisfaction Survey. In doing so, Honda is

evaluating actual performance.

A marketing plan document usually begins with a(n)

executive summary.

A competitive advantage is created when a company matches its core competency to the opportunities it has discovered in the market.

false

A firm's organizational goals should be derived from its opportunities.

false

A firm's organizational mission should be derived from its goals.

false

A long-term view, or vision, of what the organization wants to become is called a mission proclamation.

false

A marketing objective need not be consistent with the firm's overall objectives.

false

A marketing strategy is a written document that specifies the activities to be performed to implement and control a firm's marketing activities.

false

Marketing mix decisions must have two characteristics: consistency and timeliness.

false

According to the Boston Consulting Group, question marks are characterized as products

having a small share of a growing market and requiring large amounts of cash to build market share.

Megan knows that whether she decides to interact with her customers in person, by phone, online, Facebook, Twitter, or by fax, that ____ should ultimately drive the marketing strategy.

her customers

To formulate a marketing strategy, one must

identify and analyze a target market and develop a marketing mix to satisfy individuals in that market.

Zingerman's Deli operates seven retail stores throughout the city. It plans to develop a new marketing plan to extend its number of stores and operating hours. In developing this marketing plan, it has asked its employees for feedback on the changes it plans to makes. In this case, the employees are Zingerman's ____ customers.

internal

Realizing an increase in both the number of consumers who are environmentally-conscious and the number of consumers who are seeking vehicles that use less gasoline, several car manufacturers have developed hybrid automobiles. This is an example of identifying and capitalizing on a ____ while the strategic window is open.

market opportunity

When the right combination of circumstances occurs at the right time to allow an organization to take action toward a target market, the firm is faced with a

market opportunity.

The percentage of a market which actually buys a specific product from a specific company is referred to as that product's

market share

Scenario 2.1 Use the following to answer the questions. ​ Southwest Airlines has a history of being able to retain its employees due to the atmosphere and culture of the company. Employees have been known to dress up in costume on an airplane, engage in "games" with the passengers, and generally provide a fun atmosphere for traveling. While other airlines have low rates of customer satisfaction, Southwest tends to maintain a high rating with its customers. Recent gas price hikes have caused most airlines to charge for checked luggage and to fill every flight to its maximum, adding to the negative experience of airline travel. Southwest keeps its costs low through several methods, one being that they do not serve meals on flights, or provide pre-boarding passes. The typical flight is two hours or less and occurs between several selected cities rather than flying to practically anywhere in the country. Southwest is known for its low fares, its dependability, and its on-time flights. ​ Refer to Scenario 2.1. Maintaining the current culture of "fun" for Southwest Airlines' employees is most likely a(n)

overall organizational objective

Morris Business Products Co. distributes its business supply products through direct sales personnel. Recently, the company has established a monthly sales quota of $150,000 for each sales representative. This is a(n)

performance standard.

The Boston Consulting Group's matrix is based on the

philosophy that a product's market growth rate and its market share are important determinants of its marketing strategy.

Which of the following is not a component of a marketing plan?

product

The Texas Pitt Barbecue Corporation has conducted a SWOT analysis of its competition, and sees a marketing opportunity for its new Texas Pit Barbecue restaurant. It has developed its marketing plan to include the type of products it will sell, the location for the restaurant, and the pricing it will use. Their plan includes a marketing objective to make a profit of 5% the first year of operation. So far, the owners of the restaurant have eliminated a key piece of the marketing plan, which is ____.

specifying how they will achieve their marketing objective

Kraft purchased the Duracell Battery Company and now operates this division as a separate profit center within the firm. In this example, Duracell is a(n) ____ unit of Kraft.

strategic business

Within a business organization, a profit center that is self-supporting in terms of sales, markets, production, and other resources is known as a

strategic business unit.

Managers at the Longshore Corporation are engaged in a complex process of revising their organization's mission and goals and developing corporate strategy, marketing objectives, marketing strategy, and, eventually, a marketing plan. This process is called

strategic planning.

You are leading the breakout session on developing the marketing strategy at your company's strategic planning conference. You have prepared discussion guidelines and rules of engagement to keep all attendees in the session focused on the task at hand.

suggest that the marketing objectives should be consistent with both the business-unit and the corporate strategies.

Harley-Davidson's Harley Owner's Group (HOG) helps to foster strong relationships between riders and their motorcycles, giving it a(n) ____ over other motorcycle manufacturers.

sustainable competitive advantage

Scenario 2.2 Use the following to answer the questions. ​ EXperience Limited is a company which offers tours and vacations that include participation in an extreme sport, such as hang-gliding, bungee jumping, skydiving, and motocross. Adrian Moss, EXperience Limited's owner, has just finished developing the strategic plan, including marketing objective of growing his customer base by 15% during the coming year. He believes that the best way of reaching that objective is to promote to the college-aged student. In the past, the majority of his sales have been to males under the age of 29, participating in hang-gliding and bungee jumping at various tourist locations. He wants to expand his skydiving and motocross tours, but isn't sure whether or not the expansion will be profitable. He currently has a database containing all the customers who have gone on a hang-gliding or bungee jumping vacation with his company. ​ Refer to Scenario 2.2. The college-aged student represents EXperience Limited's ____, and the tours its operates represent the ____ element of the marketing mix.

target market; product

You are preparing the marketing budget for the next fiscal year and the finance department staff has given you the following guidelines to follow when estimating certain aspects of the budget:

travel expenses and supplies expenses are variable costs.

A core competency is something a firm does extremely well-sometimes so well that it gives the company an advantage over its competition.

true

You are meeting to discuss the proper categorization of marketing strategy costs in the monthly department budget performance report. You are especially interested in making sure the fixed and variable costs are properly categorized. ​ The major costs associated with the marketing strategy are as follows:

we know that salesperson commissions, product raw materials, and product manufacturing labor costs are all variable costs.

In a traditional organization, marketing decisions are likely to be

centralized at the top levels of the organization.

Marketing planning consists of two major components: marketing objectives and a control process.

false

A market is a group of individuals and/or organizations that have needs for products in a product class and have the ability, willingness, and authority to purchase these products.

true

When properly implemented, a good marketing strategy enables a company to achieve its business-unit and corporate objectives.

true

A sustainable competitive advantage is one that cannot be copied by a firm's competitors.

true

Gucci Group, a marketer of high-fashion products, achieved a company turnaround by ensuring that its brand had the same image and proper display around the world. It also lowered prices on some items, like handbags, to be more competitive. This illustrates a company working to develop a marketing mix that is both ____ and ____.

consistent; flexible

A strategic business unit is not self-supporting in terms of sales, markets, production, and other resources.

false

Cash cows are market leaders that are growing fast, with substantial reported profits.

false

Each of the marketing mix elements must work together with the others.

true

Firms that truly adopt the marketing concept develop a distinct organizational culture based on a shared set of beliefs that makes customers' needs the pivotal point of the firm's decisions about strategy and operations.

true

In a traditional organization, marketing decisions are generally centralized at the top levels of the organization.

true

Marketing managers can classify a firm's products into four basic types: stars, cash cows, dogs, and question marks.

true

Marketing objectives should be stated in such a way that the degree of accomplishment can be measured accurately.

true

Marketing objectives state what is to be accomplished through marketing activities.

true

Marketing plans may be developed for strategic business units, product lines, individual products or brands, or specific markets.

true

Performance standards are derived from marketing objectives that are set while developing the marketing strategy.

true

The Boston Consulting Group approach is based on a philosophy that a product's market growth rate and its market share relative to competition should be helpful in determining its marketing strategy.

true

The Boston Consulting Group's model serves as a diagnostic tool to spotlight strategic business units that have an opportunity to grow rather than as a guide for making strategy prescriptions.

true

The analysis of strengths and weaknesses focuses on internal factors that give the organization certain advantages and disadvantages in meeting the needs of its target markets.

true

The decisions made in creating a marketing mix are only as good as the organization's understanding of the target market.

true

Through the process of strategic planning, a firm establishes an organizational mission and goals, corporate strategy, marketing objectives, and a marketing strategy.

true

A competitive advantage exists when a

firm matches a core competency to opportunities it has discovered in the marketplace.

A market opportunity results from

the right combination of circumstances and timing that permits an organization to take action to reach a particular target market.

Safeway Foods Corporation is involved in identifying and analyzing a target market. The firm then develops a marketing mix to satisfy individuals in that market to gain long-term competitive advantages. Based on this example, Safeway is creating a

marketing strategy.

Corporate strategic planners focus on dimensions such as competition, diversification, differentiation, environmental focus, and interrelationships among SBUs.

true

Corporate strategy determines the means for utilizing resources in the functional areas of business to reach the organization's goals.

true

Marketing planning establishes an organizational mission and goals, corporate strategy, marketing objectives, and a marketing strategy.

false

Marketing managers can take each of the following corrective actions for reducing a discrepancy between established performance standards and actual performance except

coordinating a new step in performance analysis.

Starbucks provides training and support to its employees, including health care benefits. Through these ____ efforts Starbucks is better able to deliver quality products and service to its customers.

internal marketing

Hallaway's Corp.'s new shampoo, VS2, is faltering badly in the market. Hallaway's marketing personnel are unsure who is responsible for various marketing tasks, when these tasks are to be completed, or what resources have been allocated. Hallaway Marketing Director Carolyn Willis said that the problem is that VS2 has the most poorly written ____ she has ever seen.

marketing plan

CyberCycle Inc., is preparing a written document specifying the activities to be performed to implement and control its marketing activities. This document is called the

marketing plan.

You asked your stockbroker to consider buying some shares of Facebook, Inc. for your investment account. But, first you want to review the summary points in the SWOT analysis the stockbroker's firm did on the company. The following summary points were listed in the SWOT analysis: Facebook has a reputation as a market leader and it is quickly establishing a formidable brand loyalty amongst its users. Because of its position in the industry, it risks incurring high costs associated with creating and marketing new products that are designed to perpetuate its industry leadership. These summary points suggest

that Facebook has a first-mover advantage.

An organization's goals focus on the ends or results that the firm seeks.

true

The director of marketing for 3M tapes tells the rest of the management team, "When it comes to our transparent packaging tape unit, our strategy will be to use funds generated here to support our venture in the industrial bonding market." This strategy indicates that the packaging tape unit falls into which one of the following classifications?

Cash cow

Apple has made a success from anticipating what consumers would want in new technological advances, convenience, and ease of use. The introduction of the iPad was an example of a _____ for Apple, something that an organization does extremely well and may give a company an advantage over its competition.

core competency

A strategic window results from the right combination of circumstances and timing, allowing a firm to take action to reach a particular target market.

false

Question marks exist at a cost disadvantage and exhibit few opportunities for growth at a reasonable cost.

false

Stars are profitable products that usually generate more cash than is required to maintain share.

false

The long-term health of the firm depends solely on having products that generate cash and provide acceptable reported profits.

false

The primary way to reduce the discrepancy between planned and actual performance is to rewrite the performance standard.

false

The strategic performance evaluation does not monitor the activities of external sources of marketing assistance.

false

J.C. Penney is presently involved in a process of assessing marketing opportunities and resources, determining marketing objectives, re-defining marketing strategies, and developing guidelines for implementation and control. Thus, J.C. Penney is involved in

marketing planning.

Marketing managers at Consolidated Equipment Corporation are involved in establishing marketing performance standards, evaluating performance, and reducing the differences between actual and desired performance. These marketing managers are engaged in

strategic performance evaluation.

Scenario 2.1 Use the following to answer the questions. ​ Southwest Airlines has a history of being able to retain its employees due to the atmosphere and culture of the company. Employees have been known to dress up in costume on an airplane, engage in "games" with the passengers, and generally provide a fun atmosphere for traveling. While other airlines have low rates of customer satisfaction, Southwest tends to maintain a high rating with its customers. Recent gas price hikes have caused most airlines to charge for checked luggage and to fill every flight to its maximum, adding to the negative experience of airline travel. Southwest keeps its costs low through several methods, one being that they do not serve meals on flights, or provide pre-boarding passes. The typical flight is two hours or less and occurs between several selected cities rather than flying to practically anywhere in the country. Southwest is known for its low fares, its dependability, and its on-time flights. ​ Refer to Scenario 2.1. In Southwest Airlines' SWOT analysis, the rising gas prices are a(n) ____, while the fact that other airlines are charging for all checked baggage may create a(n) ____.

threat; opportunity

Scenario 2.2 Use the following to answer the questions. ​ EXperience Limited is a company which offers tours and vacations that include participation in an extreme sport, such as hang-gliding, bungee jumping, skydiving, and motocross. Adrian Moss, EXperience Limited's owner, has just finished developing the strategic plan, including marketing objective of growing his customer base by 15% during the coming year. He believes that the best way of reaching that objective is to promote to the college-aged student. In the past, the majority of his sales have been to males under the age of 29, participating in hang-gliding and bungee jumping at various tourist locations. He wants to expand his skydiving and motocross tours, but isn't sure whether or not the expansion will be profitable. He currently has a database containing all the customers who have gone on a hang-gliding or bungee jumping vacation with his company. ​ Refer to Scenario 2.2. According to the BCG matrix, the hang-gliding and bungee jumping tours have been a ____ for EXperience Limited, while the skydiving and motorcross tours represent a ____.

cash cow; question mark

It begins with the establishment of revision of an organization's mission and goals. The strategic planning process begins with a detailed analysis of the organization's strengths and weaknesses and the identification of opportunities and threats within the marketing environment.

false

Marketing strategies should be established before marketing objectives are decided.

false

A group that has the willingness, ability, and authority to buy a product is a

market.

Which of the following is the most specific and detailed type of business strategy?

marketing

The process of putting marketing strategies into action is called

marketing implementation.

An organization's business goals should be derived from its

mission statement.

Favorable conditions in the marketplace environment that could produce business rewards for the organization if acted upon properly are called

opportunities.