Chapter 2 Questions
carefully planned
"Effective marketing doesn't just happen." It is
Product Development
3M involves its customers in the process of developing new products. In this way, it can benefit from current customers' insights and develop new products that will meet these customers' needs. 3M is pursuing a __________ growth strategy.
it is not easily duplicated.
A competitive advantage based on location is often sustainable because
positioning strategy
A former advertising campaign for GEICO Insurance used the slogan "So easy, even a caveman could do it" to emphasize the ease of buying insurance on GEICO's website. This campaign was part of GEICO's
A firm's target Markets
A marketing strategy identifies three things: ________, a related marketing mix, and the bases on which the firm plans to build a sustainable competitive advantage.
Question Mark
A product that is in a high-growth market but has a low market share would be classified as a ________ on the BCG matrix.
Place and Value delivery
Delta Airlines is among the companies experimenting with selling products and services on their Facebook pages. The idea is to make purchasing even easier for customers who may spend large portions of the day with Facebook active on their computers or mobile devices. There is no need even to navigate to Delta's website—users can book a trip in Delta's "Ticket Agent" application without ever leaving Facebook. Which element of the marketing mix does this represent?
Operational
Because it was able to deliver merchandise overnight, in the required quantities, and at a lower delivered cost than its competitors, Joe's Sports Shack was given exclusive rights to sell clothing with school logos for the school district. Joe's demonstrates ________ excellence.
implement marketing mix and resources
Carla has been directed by her regional marketing manager to cut prices on seasonal items, place an ad in the local paper, and tell distributors to reduce deliveries for the next month. Which step of the strategic marketing planning process is Carla engaged in?
Evaluate performance
Craig sees that his company's quarterly sales and profits are significantly above projections and says, "That's great. Let's keep doing what we've been doing." Craig is ignoring the __________ step of the marketing planning process
Customer relationships should be viewed from a lifetime value perspective
Customer retention programs are based on what concept?
Ethical
During a SWOT analysis, a company should assess the opportunities and uncertainties of the marketplace due to changes in several factors, given the acronym CDSTEP. Which of the following is not one of these factors?
Implementation Phase
During which phase of the marketing planning process does a firm identify and evaluate different opportunities by engaging in segmentation, targeting, and positioning?
Place
E-books, in addition to being an alternative product form, provide __________ value creation since they can be downloaded via the Internet immediately when and where they are needed.
Threat
In 2006, Ford Motor Company announced it would severely cut back its automobile production. For parts companies supplying Ford its parts, this represented a(n)
attract a different market segment
In 2006, Walmart announced that it would begin selling organic food products. In doing so, Walmart was most likely trying to
product development
In 2007, Apple Computer introduced its new iPhone, adding a cellular telephone, a camera, and Internet access to its iPod. The company was pursuing a(n) __________ strategy.
opportunity
In a SWOT analysis, increasing gasoline prices would represent a potential __________ for manufacturers of electric cars
Define the business mission
In mid-2010, Hewlett-Packard Company (HP) acquired Palm Computing Inc., a manufacturer of personal devices and smartphones. Before deciding to acquire the company, strategic planners at HP spent time thinking about how Palm and HP would "fit" together, and how the acquisition might change HP's core goals and objectives. The strategic planners were engaged in the ____________ step of the marketing planning process.
Place
In recent years, cellular (mobile) service providers have worked hard to eliminate "dead zones," providing customers with service wherever they travel. By working to make the network available in more locations, cellular service companies are focusing on __________ value creation.
value propostion
In value-based marketing, the promotion element of the four Ps communicates the ________ to customers through a variety of media.
Diversification
Introducing newly developed products or services to a market segment the company is not currently serving is called
Positioning
LeBron James, Alex Rodriguez, and other athletes are paid huge sums of money by companies for celebrity endorsements. If endorsements by these athletes create a clear understanding among consumers of the companies' products in comparison to competing products, they can help with the firm's __________ strategy.
Divide the marketplace into subgroups
Lionel is asked to conduct an STP analysis for his firm. The first step he should perform in this analysis is to
Weakness
Manufacturers that use just-in-time manufacturing systems coordinate closely with suppliers to ensure that materials and supplies arrive just before they are needed in the manufacturing process. While just-in-time systems can offer major advantages in terms of inventory costs, they must be carefully managed. If a firm found that its just-in-time system was badly managed, leading to frequent manufacturing delays due to missing parts, this would represent a(n) __________ in a SWOT analysis.
Positioning strategy
Many small businesses whose competitors are national franchises advertise "we are locally owned" or "we have been here since 1951." This is part of these firms'
market development
Many states create licensing requirements for a variety of professionals (such as lawyers and accountants) designed to restrict entry into their market by professionals from other states. This strategy limits ____________ growth strategies.
product development
Maryam phoned her auto insurance agent to renew her policy. The agent told her about new types of insurance now available—to cover her apartment, or even the engagement ring she just got from her fiancé. The agent was pursuing a ___________ growth strategy.
Increase long term profits
Most banks implement customer retention programs aimed at their best customers. They do this because they know that retaining customers usually results in
market penetration
Most banks now have customer relationship software that, when a customer contacts the bank, tells the service representative what types of accounts, loans, and credit cards the customer currently has. Service representatives use this information to sell some of the other services the bank currently offers to these customers. This is a ___________________ growth strategy.
sustainable competitive advantage
Nordstrom, an upscale department store, has a well-known reputation for going the extra mile to serve its customers. This reputation for excellent customer service will most likely result in
a "frequent diner" card at a restaurant, offering a free appetizer for every $100 in food purchases.
One example of a customer loyalty program is
A marketing strategy
Over the last few months, Juan and his colleagues have analyzed the current business situation and identified target markets for his firm's personal care products. Finally, they developed the products, prices, distribution, and promotion that should appeal to each of those target markets. In doing so, Juan has also identified what he believes is an advantage his competitors cannot match. Juan and his colleagues have been developing
Opportunities and threats
Samantha is charged with assessing her company's external environment as part of a SWOT analysis. Samantha will study her company's
product excellence
Singapore Airlines seeks to differentiate itself from competing airlines, in part through innovative design of its airplane seats and in-flight entertainment systems. Through continuous innovation in these areas, Singapore Airlines is pursuing a(n) __________ macro strategy.
Diversification
Sodexo is a corporation that manages school cafeterias, university dining halls, mess halls at military bases, concession stands at sports arenas, and other large-scale food service facilities. If Sodexo were to begin to sell individual frozen meals in supermarkets, it would be pursuing a __________ growth strategy.
the lifetime value of customers
Some banks have begun offering special accounts designed to attract junior high school students. These kids save in such small amounts that the accounts cost banks more to maintain than they are worth. But bankers know that consumers are creatures of habit and hope that the young people they serve now will become adult customers. These banks recognize
locational excellence
Some universities offer online degree programs, competing with traditional colleges based on the convenience of taking online courses. These online programs are most likely pursuing which macro strategy?
She should seek more information about why the stores had different results before making a decision.
Subway is a large chain of franchise sandwich shops. Marcia owns three Subway stores in a large city. At the end of the year, she notes that sales rose from 2 to 5 percent over last year's sales at Stores 1 and 2, but fell 2 percent at Store 3. Based on this information, which of the following is the best course of action as to how Marcia should reward (or punish) her store managers?
Product value
Suppose your university made a sizable investment in its career services—additional counselors, increased efforts to bring in recruiters, and other services aimed at helping students find jobs. This investment would enhance the university's _____________ in an attempt to create value for students and recent graduates.
FALSE It deals with external factors so it would be a threat
T/F: Duke's is a surfer-themed restaurant chain in Hawaii. Most of its customers are tourists. In a SWOT analysis for Duke's, the possibility that the recession might cut back on tourism in Hawaii would be considered a weakness.
True
T/F: Firms are typically more successful when they focus on opportunities that build on their strengths relative to those of their competition.
TRUE
T/F: Geraldo manages the electrical turbine engine division of General Electric Corporation. He makes most decisions independently, without consulting headquarters. Geraldo manages a strategic business unit.
FALSE This is a product development strategy. A market development strategy offers existing products and services to new customers
T/F: Isaac is looking for ways to offer new goods and services to his existing customers. He is pursuing a market development strategy.
TRUE
T/F: Price should be based on the value that the customer perceives
FALSE The four major growth strategies are market penetration, product development, market development, and diversification.
T/F: Product penetration is one of the four major growth strategies.
TRUE
T/F: Relative market share is an example of a marketing metric.
FALSE STP stands for segmentation targeting and positioning
T/F: STP refers to segmentation, testing, and promotion.
TRUE
T/F: SanDisk's MP3 player product line (called the Sansa) has a low relative market share. The MP3 player market is expected to decline over the next few years. In the Boston Consulting Group (BCG) portfolio analysis, the Sansa would be considered a dog.
FALSE In the implementation phase, marketing managers identify and evaluate different opportunities by engaging in a process known as segmentation, targeting, and positioning (STP). They then are responsible for implementing the marketing mix using the four Ps.
T/F: The "implement marketing mix" step of the strategic marketing planning process is part of the control phase.
FALSE
T/F: The components of a SWOT analysis are strengths, weaknesses, opportunities, and tactics.
FALSE Planning processes can move back and forth between the steps as needed.
T/F: The strategic planning process always proceeds sequentially through the five steps.
False; a mission statement is a broad description of a firms objectives and the scope of activities it plans to undertake
T/F: A mission statement describes the specific actions a firm will take to achieve its goals.
True
T/F: It is not always necessary to go through all the steps in the marketing planning process.
TRUE
T/F: Strong supplier relations and efficient supply chains help firms such as Walmart achieve operational excellence.
False; firms seek multiple sources of advantage to meet customers needs
T/F: To build a sustainable competitive advantage, companies should focus on a single strategy.
TRUE
T/F: iTunes software is often credited with the success of the Apple iPod MP3 player, because it made the iPod easier to use than competing players and was difficult for competitors to duplicate. This is an example of a sustainable competitive advantage
customer
Taking steps to encourage customer loyalty is the focus of developing the macro strategy of _______ excellence.
sustainable competitive advantage
The automobile manufacturing industry closely watches annual consumer satisfaction surveys. For years, Japanese car companies consistently had the highest levels of customer satisfaction, creating a(n) ________ for these companies.
D. Nike's athletic shoe business still requires some investment, but is likely to produce excess resources that can be invested in other divisions of the company.
The global athletic footwear market is expected to experience only very slow growth over the next several years. Nike is the market leader. According to Boston Consulting Group portfolio analysis, how should Nike treat its athletic shoe business?
Captures the value customers perceive that they are receiving
The idea of value-based marketing requires firms to charge a price that
Market Segmentation
The process of dividing the market into groups of customers with different needs, wants, or characteristics is called
D. making sure the product is available in the stores where customers will want to find it, and that it is always in stock so they can buy it when they want to.
Value creation through place decisions for a consumer product involves
Customer excellence
When Ramona, the keynote speaker at a major business leaders' conference, arrived in the middle of the night at the Ritz-Carlton, she was exhausted and her suit was wrinkled from her 10-hour plane trip. The night clerk found someone to dry clean Ramona's suit and have it ready for her morning presentation. She has been a loyal Ritz-Carlton customer ever since. In this example, Ritz-Carlton demonstrated the macro strategy of
sustainable competitive advantage
When a pharmaceutical company develops a new medication, it typically applies for a patent in order to prevent competitors from developing copycat products for several years. Pharmaceutical companies apply for patents to establish
Planning
When conducting a SWOT analysis, in what phase of the strategic marketing process is an organization presently engaged?
segmentation, targeting, and positioning.
When discussing the marketing planning process, STP stands for
Opportunities
For U.S. businesses with strong export capabilities, expansion of U.S. trade agreements with other countries creates
examine its operations and customer relations to identify significant things competitors cannot easily copy.
If a firm wants to develop a sustainable competitive advantage, it should
Market penetration
Abercrombie & Fitch, a clothing retailer, includes a "SHARE" link on the product pages of its website. This link encourages an Abercrombie customer to post a link (perhaps showing a new style of jeans) on Facebook or Twitter. Abercrombie & Fitch hopes that the customer's friends (who are probably very much like current customers) will click the link, visit the page, and make purchases. This is an example of a __________ growth strategy.
perform a situation analysis
After defining the business mission, what should a firm do next to develop a marketing plan?
Target Marketing
After identifying various market segments that her company could pursue, Lisa evaluated each segment's attractiveness based on size, income, and accessibility. Lisa was involved in
C. they cannot be used to project the future.
All of the following statements regarding marketing metrics are true except: A. they can be used at various levels in an organization. B. they assist in comparing results among SBUs. C. they cannot be used to project the future. D. they quantify a trend, dynamic or characteristic. E. they help a firm make appropriate adjustments to its marketing plan.
the company provides products with a high perceived value.
Allen is in the marketing department of a midsized firm that develops and sells communications systems. He is proud of the human resource area in the company that provides the firm with excellent employees. Allen himself really enjoys his work, but he knows the work of HR helps create an operational advantage for the firm because of all the following except
Customer Loyalty
Anita has gone to the same hair salon for the past 10 years. She believes that her stylist, the salon owner, does a better job of cutting and styling her hair than anyone else could. Other salons have opened closer to Anita's home, some offering more plush facilities or lower prices, but she isn't tempted to switch. Anita's attitude toward the salon is an example of
strengths and weaknesses
As part of her company's SWOT analysis, Valerie is assessing the company's internal environment, including
sustainable competitive advantage
Even when large discount retailers enter a market, a few small, local retailers survive and prosper. These small retailers have probably developed a(n) ________ that allows them to survive.
operational excellence
Firms achieve ___________ through efficient procedures and excellent supply chain management.
no single strategy is likely to be sufficient to build a sustainable competitive advantage.
For many years, Southwest Airlines distinguished itself as the low-cost airline. Now, many other low-cost competitors have entered the market. Similarly, Southwest was one of the first airlines to offer online ticketing. Now, all airlines have online ticketing. These examples suggest that
target marketing segment
For years, when considering new products, marketers at Celestial Seasonings asked themselves, "What would Stacy think?" Stacy was a fictional character representing 25- to 50-year-old educated, upper-income women who rarely watched television but did a lot of reading. "Stacy" represented Celestial's primary
sustainable competitive advantage
Four companies dominate the cereal industry. These firms produce in large volumes, promote heavily, and control access to the supermarket shelves through "slotting allowances," which are payments to retailers in return for shelf space. Combined, these four firms have
customer excellence
Fourteenth National Bank prides itself on offering better service than any of its competitors. If this is accurate, and if customers recognize and value Fourteenth National's superior service, the bank creates and delivers value through
customer excellence
Gerald's Tire Store sets itself apart from competitors by the extra attention it pays to retaining loyal customers by providing fast, courteous service in a clean, professional-looking environment. Gerald's has used this strategy for over 40 years, expanding to 15 outlets. Gerald's Tire Store has created a ___________ macro strategy to create and deliver value and to develop a sustainable competitive advantage.
Promotion
Google and other search engines allow marketers to bid to have their ads shown when consumers search on keywords related to the firm's products. These marketers are attempting to create value through
market development
H&R is a small, local heating and air conditioning business. The area military base is a potential source of growth, and H&R already installs and services the type of equipment the military would require, but it is difficult to get established as a certified government contractor. H&R is considering a ____________ growth strategy.
create a sustainable competitive advantage.
Marketers want their firms to develop excellent supply chain management and strong supplier relations so they can
Product development
Marketers who design and offer new products and services to their existing customers are pursuing a _________ growth strategy.
B. evaluate performance and make adjustments.
When firms successfully implement poor strategies (perhaps due to good luck) or do a poor job of implementing good strategies, it can be difficult to
integrated marketing communications.
When marketers use a variety of communication disciplines—advertising, personal selling, sales promotion, public relations, direct marketing, and online marketing—in combination to communicate a value proposition to the customer, it is referred to as
that build on their strengths relative to those of their competitors
When positioning products relative to competitors' offerings, firms typically are most successful when they focus on opportunities
3M Corporation implementing new software to improve communication with its suppliers
Which of the following actions, if it actually happened, would most likely support and enhance an operational excellence macro strategy?
A New York law firm has filed a $10 million class action suit against the company on behalf of car owners whose gas tanks exploded
Which of the following factors, listed in a situation analysis for a major U.S. auto manufacturer, is the best example of a threat?
B. Recent consumer studies have indicated that Chinese consumers prefer American cars.
Which of the following factors, listed in a situation analysis for a major U.S. auto manufacturer, is the best example of an opportunity?
lowering prices
Which of the following is least likely to provide a sustainable competitive advantage?
planning excellence The four overarching strategies are locational excellence, customer excellence, operational excellence, and product excellence.
Which of the following is not one of the four overarching strategies to create and deliver value and to develop sustainable competitive advantages?
B. positioning the product using a clear, distinctive brand image
Which of the following is the best way to build a sustainable competitive advantage using product excellence?
Identify and evaluate opportunities The steps, in order, are: (1) define the business mission, (2) perform a situation analysis, (3) identify and evaluate opportunities, (4) implement marketing mix and allocate resources, and (5) evaluate performance.
Which of the following is the third step in the marketing planning process?
sustainable competitive advantage
Zara is a women's clothing retailer headquartered in Spain, with stores located in many countries. Zara has developed a "quick response" system that allows store merchandise to be adjusted rapidly to fit changing customer preferences. Every aspect of Zara's operation is optimized for this system, making it difficult for competitors like The Gap to duplicate. Zara has established
market positioning
________ involves the process of defining the marketing mix variables so that target customers have a clear, distinctive, desirable understanding of what the product does or represents in comparison with competing products.
Positioning
__________ involves the process of defining the marketing mix variables so that target customers have a clear, distinctive understanding of what a product does or represents in comparison with competing products.
