BUS 195 Chapter 8

Multidimensional scaling is used in A) determining the size of a new building. B) determining the size of a new department. C) evaluating the amount of high-tech equipment a firm needs. D) perceptual mapping. E) market segmentation.

D

Subdividing a market into distinct subsets of customers according to their needs and buying habits is known as A) market penetration. B) product diversification. C) market segregation. D) market segmentation. E) positioning.

D

What is a central strategy-implementation technique that allows an organization to examine the expected results of various strategy implementation decisions? A) EPS/EBIT B) Financial budgeting C) TOWS analysis D) Projected financial statement analysis E) External analysis

D

What portion of the firms going public in 2014 were unprofitable? A) Less than one tenth B) About one quarter C) About one half D) Nearly three quarters E) Nearly all

D

Which item is included in net worth? A) Retained earnings B) Common stock C) Additional paid-in-capital D) All of the above are included in net worth. E) None of the above are included in net worth.

D

Which of these is NOT a rule for using product positioning as a strategy-implementation tool? A) Look for the hole or vacant niche, a segment of the market currently not being served. B) Do not serve two segments with the same strategy. C) Position yourself in the middle of the map, if you are one of only two competitors. D) Position yourself in the middle of the map, if there are more than two competitors. E) All of these are rules for using product positioning as a strategy-implementation tool.

D

A firm can usually serve two or more market segments with the same strategy.

F

All the methods for determining a business' worth can be grouped into three basic approaches: what a firm earns, what a firm spends, and what a firm will bring in the market.

F

As a balance sheet entry, goodwill represents the favor a business has acquired through its environmentally conscious and socially responsible actions.

F

Four common corporate Valuation methods are the Net Worth Method, the Net Income Method, the Gross Income Method, and the Outstanding Shares Method.

F

If the rate of market growth and technical progress is rapid, then in-house R&D is the preferred solution.

F

Increased costs are a disadvantage of a good information system.

F

Market penetration can be defined as the subdividing of a market into distinct subsets of customers according to needs and buying habits.

F

Matching competition and positioning factors would allow factories to produce desirable levels without extra shifts, overtime, or subcontracting.

F

One of the four recommended approaches for determining a firm's worth is to base the analysis on the selling price of a similar company.

F

The effects of the Sarbanes-Oxley Act include increased inflation of financial projections.

F

The online community of customers is more expensive to reach than traditional focus groups and surveys.

F

The primary sources of capital are known as debt and EPS.

F

There are five component variables in the marketing mix: product, place, promotion, price, and people.

F

To be a price leader or a price follower is a decision that may require finance/accounting policies.

F

Too much debt in the capital structure of an organization can endanger stockholders' returns and jeopardize company survival, particularly in periods of high earnings.

F

When additional stock is issued to finance implementation of strategy, the existing stockholders' ownership and control of the enterprise are strengthened.

F

A benefit of using projected balance sheets and income statements is that A) the impact of various implementation decisions can be forecasted. B) money can be put aside to pay future income taxes. C) insurance needs can be computed. D) it is useful in analyzing past performance. E) all of the above

A

In low-earning periods, too much ________ in the capital structure of an organization can endanger stockholders' return and jeopardize company survival. A) debt B) liquidity C) equity D) cash E) tax liability

A

In the context of a balance sheet, goodwill represents A) a premium paid over the book value for an acquisition. B) the value attached to a firm's reputation. C) the excess of assets over liabilities. D) the value associated with benefits from environmental programs. E) the excess of current assets over liabilities.

A

The amount by which retained earnings changes is obtained by subtracting A) any dividends to be paid for that year from net income. B) net income from EBIT. C) taxes from EBIT. D) interest expense from EBIT. E) EBIT from CGS.

A

What tends to become a more attractive financing technique when interest rates are high? A) Stock issuance B) Debt C) Cost cutting D) Borrowing E) Staying privately owned

A

Which of the following is NOT a current development or trend? A) Efforts to repeal federal laws currently preventing businesses from using GPS devices to monitor employees B) Tracking the location of employees through company provided hand-held devices C) The use of smartphones as hotel room keys D) Desktop videoconferencing E) Assertions by employees that employers are invading their privacy with various monitoring practices

A

All of the following are true EXCEPT A) marketing has evolved to be more about building a two-way relationship with consumers. B) in 2015 the number of LinkedIn users was closer to the number of Facebook users than to the number of Twitter users. C) the online community of customers is much quicker, cheaper, and effective to reach than traditional focus groups and surveys. D) successful strategy implementation requires a firm to know what people are saying about it and its products. E) company websites should enable customers to interact with the firm on a variety of social media networks.

B

Evaluating the worth of a firm A) is an exact science. B) requires both qualitative and quantitative skills. C) is based solely on financial facts. D) is known only to the firm's accountants. E) is static.

B

What is the most widely used technique for determining the best combination of debt and stock? A) Debt-to-Stock Ratio B) Earnings Per Share/Earnings Before Interest and Taxes Analysis C) Gross Profit Analysis D) Capital Asset Pricing Model E) Present Value Analysis

B

Which is NOT a required step in perceptual mapping? A) Select key criteria that effectively differentiate products or services in the industry. B) Serve two segments with the same strategy. C) Plot major competitors' products or services in the resultant matrix. D) Identify areas in the positioning map where the company's products or services could be most competitive in the given target market. E) Develop a marketing plan to position the company's products and services appropriately.

B

Which variable would be considered part of the "product" element of the marketing mix? A) Advertising B) Packaging C) Payment terms D) Inventory levels and location E) Publicity

B

If a firm incurs a loss during a particular year, or if the firm paid out more in dividends than it had in net income, what happens to the retained earnings (RE) amount? A) It increases. B) It is unchanged. C) It decreases. D) It doubles. E) It cannot be determined from the information given.

C

In preparing projected statements, to project cost of goods sold in the income statement, which of these methods is recommended? A) Net Worth Method B) Net Income Method C) Percentage-of-Sales Method D) Price-Earnings Ratio method E) Outstanding Shares Method

C

R&D employees and managers perform all of the following tasks EXCEPT A) transferring complex technology. B) altering products to particular tastes and specifications. C) researching resource availability. D) adapting processes to local markets. E) adjusting processes to local raw materials.

C

Which of the following variables is NOT directly affected by market segmentation? A) Product B) Place C) Process D) Promotion E) Price

C

Which statement is NOT true? A) Having an effective management information system may be the most important factor in differentiating successful from unsuccessful firms. B) Like inventory and human resources, information is now recognized as a valuable organizational asset that can be controlled and managed. C) Computer vulnerability has nearly been eradicated by recent innovations, and it is now possible to secure and safeguard all corporate communications, files, and business conducted over the Internet. D) In many firms, information technology is allowing employees to work at home or anywhere, anytime. E) Improved quality and service often result from an improved management information system.

C

Why is market segmentation an important variable in the strategy-implementation process? A) Company strategies do not require increased sales through new markets and products. B) It allows a firm to operate with no resources. C) It directly affects marketing mix variables. D) It allows a firm to minimize per-unit profits and per-segment sales. E) All of the above

C

A projected financial analysis can be used to forecast the impact of various implementation decisions.

T

An EPS/EBIT chart can be constructed to determine the break-even point, where one financing alternative becomes more attractive than another.

T

An area on a perceptual map where there is a cluster of ideal points indicates a market segment.

T

An example of a marketing decision is whether or not to limit the share of business done with a single customer.

T

Decisions about an initial public offering are better described as being finance and accounting matters than as marketing matters.

T

In general, the Internet makes market segmentation easier.

T

It is generally not recommended for companies with less than $10 million in sales to go public.

T

One major R&D approach is to be an innovative imitator of successful products.

T

Perceptual mapping entails developing schematic representations that reflect how your products or services compare to competitors' on dimensions most important to success in the industry.

T

R&D issues include emphasis on product or process improvements.

T

Segmentation often reveals that large, random fluctuations in demand actually consist of several small, predictable, and manageable patterns.

T

The cash account is used as the plug figure in projected balance sheets.

T

The most common bases for segmenting markets are geographic and demographic.

T

The percentage-of-sales method should be used for projecting the cost of goods sold in the income statements.

T