MKTG Chapter 2

Holiday Inn divided the total customer market into smaller segments and selected the most promising segments. Deciding what position it wants to occupy in these segments is called diversification.

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In a SWOT analysis, strengths and weaknesses refer to a firm's external environment, while opportunities and threats refer to the internal environment.

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In the 4Ps of the marketing mix, promotion refers solely to advertising

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In the marketing mix, product refers to activities that communicate the merits of a product and persuade target customers to buy it.

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Many SBUs start out as stars and move into the question mark category if they succeed.

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A ________ is made up of a company, its suppliers, its distributors, and its customers who partner with each other to improve the performance of the entire system. A) value chain B) shareholder network C) business portfolio D) value delivery network E) growth-share matrix

value delivery network

Which of the following will most likely be included in the "price" component of a company's marketing mix? A) packaging B) sales promotion C) brand name D) inventory E) discounts

discount

A strategy for company growth through starting up or acquiring businesses outside the company's current products and markets is called ________. A) vertical integration B) market development C) diversification D) market penetration E) product development

diversification

A ________ is purposeful, specifying what an organization wants to accomplish in the larger environment. A) marketing strategy B) marketing objective C) strategic plan D) mission statement E) market portfolio

mission statement

In a SWOT analysis, ________ refer to favorable factors or trends in the external environment that a company may be able to exploit to its advantage. A) strengths B) strategies C) threats D) opportunities E) controls

opportunties

Ford Motor Company issuing a recall that requires customers to schedule appointments with car dealerships to repair faulty igniters would have the greatest impact on the ________ component of its marketing mix. A) promotion B) price C) product D) packaging E) place

place

Design, packaging, service, and features are elements of the ________ component of a company's marketing mix. A) product B) price C) promotion D) place E) people

product

Which of the following statements is true in the context of the BCG growth-share matrix? A) Stars often need heavy investment to finance their rapid growth in a market. B) The positions of SBUs in the growth-share matrix rarely change over time. C) The income from one SBU cannot be used to support other business units. D) Dogs promise to be large sources of cash. E) Cash cows typically turn into stars.

Stars often need heavy investment to finance their rapid growth in a market.

An SBU can be a company division or a product line within a division, but not a single product or brand.

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Which of the following products would the electronics company CypressSound classify as a cash cow in its BCG matrix? A) Cyan — a cell phone that is designed for music lovers and has a very low market share in a market that is growing steadily B) Boosh — a home entertainment system that has a strong market share in a market that is likely to expand in the future C) Xpress — an MP3 player that has a high market share in a market that is not expected to grow significantly D) AutoPlay — a car audio system that has a high market share in a market that has been growing constantly E) Unipress — a CD player that has a very low market share in a market that is shrinking rapidly

Xpress — an MP3 player that has a high market share in a market that is not expected to grow significantly

Both product development strategies and diversification strategies involve ________. A) selling a company's current products B) selling in a company's current market C) selling in new as well as existing markets D) developing a new product E) leaving the current market

developing a new product

Under Armour's recent expansion into the digital personal health and fitness tracking market through acquisitions of three fitness app companies is a ________ strategy. A) market penetration B) market development C) downsizing D) diversification E) product development

diversification

The process that turns marketing plans into marketing actions to accomplish strategic marketing objectives is called marketing ________. A) analysis B) implementation C) control D) planning E) design

implementation

Ferrari sells only 2,200 of its very high-performance cars in North America each year at very high prices. The company is appealing to a specific ________. A) value chain B) market segment C) financial public D) business portfolio E) market position

market segment

________ refers to the process of evaluating each market segment's attractiveness and selecting one or more segments to enter. A) Market divesting B) Market diversification C) Market targeting D) Market mixing E) Market positioning

market targeting

Evaluating the results of marketing strategies and plans and taking corrective action to ensure that the objectives are attained is called ________. A) marketing control B) marketing implementation C) market planning D) marketing development E) market targeting

marketing control

Which component of the marketing mix refers to the goods-and-services combination a company offers to its target market? A) promotion B) product C) price D) place E) position

product

Under Armour's decision to add athletic shoes to its apparel line in 2006 is an example of a ________ strategy. A) market penetration B) market development C) downsizing D) diversification E) product development

product development

When viewing the market from a buyer's point of view, "communication" corresponds to the ________ component of the marketing mix. A) people B) price C) product D) promotion E) place

promotion

P&G's decision to eliminate dozens of major brands from its portfolio including Crisco, Folgers, and Jif to focus on household care, beauty, and grooming products is an example of ________. A) pruning B) harvesting C) market segmentation D) diversification E) market saturation

pruning

SBUs identified as cash cows need less investment than stars

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Ainsworth is a toy manufacturer based in Australia. Which of the following most likely indicates that Ainsworth is following a diversification strategy? A) Ainsworth increases its spending on advertising and promotion. B) Ainsworth acquires the rights to manufacture toys resembling a popular cartoon character. C) Ainsworth introduces its toys in the Indian and South-East Asian markets. D) Ainsworth enters the U.S. market with a line of children's clothing. E) Ainsworth develops a new line of educational toys targeting its current market.

Ainsworth enters the U.S. market with a line of children's clothing.

Vertigo is an electronics company. According to the BCG matrix, which of the following products of Vertigo would most likely classify as a question mark? A) Blue — a cell phone that is designed for music lovers and has a very low market share in a market that is growing steadily B) Electra — a home entertainment system that has a strong market share in a market that is likely to expand in the future C) Jump — an MP3 player that has a high market share in a market that is not expected to grow significantly D) SpinDrive — a car audio system that has a high market share in a market that has been growing constantly E) SoLo — a CD player that has a very low market share in a market that is shrinking rapidly

Blue — a cell phone that is designed for music lovers and has a very low market share in a market that is growing steadily

BlueBear is a shoe manufacturer based in the United States. Which of the following indicates that the company is following a market development strategy? A) BlueBear introduces a line of children's clothing to its current target market. B) BlueBear employs a British comedian for a U.S. advertising campaign. C) BlueBear introduces its shoes in the Indian and South-East Asian markets. D) BlueBear adds a line of leather purses to its offerings in the U.S. market. E) BlueBear develops a line of athletic shoes for its current target market.

BlueBear introduces its shoes in the Indian and South-East Asian markets.

Which of the following best describes a marketing department with a functional organization? A) A company creates large teams, or even whole divisions, to serve domestic and international markets. B) Marketing managers are responsible for developing marketing strategies and plans for their specific markets or customers, and the company is organized around the needs of specific customer segments. C) A product manager develops and implements a complete strategy and marketing program for a specific product or brand. D) Sales and marketing people are assigned to specific countries, regions, and districts. E) Different marketing activities are headed by specialists such as sales managers, advertising managers, marketing research managers, and customer service managers.

Different marketing activities are headed by specialists such as sales managers, advertising managers, marketing research managers, and customer service managers.

ToyBox is a toy manufacturer based in the United Kingdom. Which of the following indicates that the company is following a market penetration strategy? A) It introduces a line of children's clothing in the United Kingdom. B) It acquires toy rights for a popular cartoon character to boost its sales. C) It introduces its toys in the Indian and South-East Asian markets. D) It enters the U.S. market with a line of children's clothing. E) It develops a new line of educational software targeted at the current market. Answer: B

It acquires toy rights for a popular cartoon character to boost its sales.

Which of the following is true of marketing ROI? A) Marketing ROI uses only those marketing factors that can be measured in dollars. B) Marketing ROI ignores customer-centered measures of marketing impact, such as customer acquisition and retention. C) Marketing ROI is easier to calculate than financial ROI. D) Marketing ROI cannot be assessed in terms of standard marketing performance measures, such as brand awareness, sales, or market share. E) Marketing ROI measures the profits generated by investments in marketing activities.

Marketing ROI measures the profits generated by investments in marketing activities.

Greyzone, a company that creates customized household furniture, is based in Terrania and is looking to enter other countries as well. The company identifies the country of Nyevka as a good option because the entry barriers for new companies are low in Nyevka. Which statement indicates that Greyzone follows a diversification strategy? A) Greyzone does not modify its products for the Nyevkan market. B) Greyzone leaves the Terranian market entirely in order to establish itself in the Nyevkan market with its current products. C) Noting that Nyevka lacks well-established suppliers of office equipment, Greyzone begins to manufacture and supply office equipment. D) Greyzone manufactures furniture in Terrania and ships it to Nyevka without setting up outlets in Nyevka. E) Noting that production costs are lower in Nyevka, Greyzone shifts its production operations entirely to Nyevka.

Noting that Nyevka lacks well-established suppliers of office equipment, Greyzone begins to manufacture and supply office equipment.

Which of the following companies is using a divesting strategy? A) Juggernaut Bikes acquires new businesses in order to increase its market share. B) To achieve a higher market share, LBD Inc. increases investments in advertising and promotion. C) When sales of its clothing division decline, Blackstone sells the division to a competitor. D) Getix Computers increases the price of its products in order to maximize short-term profits. E) Harlow's market share remains steady over two years, and the firm decides to maintain its share at the current level.

When sales of its clothing division decline, Blackstone sells the division to a competitor.

) An organization's mission statement should emphasize its intentions toward customers and the customer experience the organization seeks to create.

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A firm's marketing department must partner with other company departments to produce superior value for customers.

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The 4Ps model has been challenged because it omits or underemphasizes important activities such as services. It's also been criticized for taking a seller's, rather than a buyer's, viewpoint. The more recent 4As framework complements the traditional model and includes ________. A) adaptability, affordability, availability and awareness B) adaptability, affordability, accessibility and awareness C) acceptability, affordability, accessibility and awareness D) acceptability, affordability, accessibility and aptitude E) adaptability, affordability, availability and aptitude

acceptability, affordability, accessibility and awareness

In a SWOT analysis, which of the following would most likely be considered a strength of a company? A) a favorable economic climate that encourages consumption B) the exit of a competitor from the market C) higher prices of the company's products resulting from inflation D) an increase in consumer interest in the company's products E) an improvement in the company's production technology

an improvement in the company's production technology

Which of the following best describes product positioning? A) differentiating a market offering to create superior customer value B) arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers C) identifying consumer needs and creating a product to meet those needs D) evaluating each market segment's attractiveness and selecting one or more segments to enter E) dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors

arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers

Business portfolio analysis is defined as the process in which management ________. A) studies the products and strategies of competitors to improve the company's own products B) analyzes consumer feedback in order to better position the company's brand image C) assesses the attractiveness of an SBU's market and the strength of its position in the market D) segments the company's markets to reach target consumers effectively E) conducts marketing research to evaluate the company's marketing strategy

assesses the attractiveness of an SBU's market and the strength of its position in the market

In the BCG matrix, ________ refer to low-growth, high-share businesses or products. A) stars B) cash cows C) question marks D) dogs E) heroes

cash cows

Due to the limitations of the BCG and other formal portfolio planning models, many companies are placing responsibility for strategic planning in the hands of cross-functional teams of divisional managers who are close to their markets. In such organizations, strategic planning is ________. A) centralized B) decentralized C) purposeful D) limited E) informal

decentralized

Which of the following best describes market segmentation? A) differentiating a market offering to create superior customer value B) identifying consumer needs and creating a product to meet those needs C) arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers D) evaluating each market segment's attractiveness and selecting one or more segments to enter E) dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors

dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors

) ________ refers to reducing the business portfolio by abandoning products that no longer fit the company's overall strategy. A) Market segmentation B) Vertical integration C) Product line extension D) Downsizing E) Diversification

downsizing

Which of the following groups is included in both a company's value chain and its value delivery network? A) customers B) suppliers C) employees D) distributors E) competitors

employees

"At CL Online, we create customer connectivity, anytime, anywhere" is a product-oriented mission statement.

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"At Dodson, we sell shoes" is a market-oriented business definition.

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A company's customer value delivery network does not include members external to the organization.

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Most firms begin the strategic planning process by developing detailed marketing and departmental plans that support a company-wide plan.

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The growth rate of a strategic business unit that is classified as a star remains constant over time.

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The most common form of marketing organization is the product management organization.

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The position of a strategic business unit in the growth-share matrix typically remains constant over time.

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True Value Hardware relies on its ________ to coordinate and carry out activities that provide shoppers with the hardware and home improvement products they need at affordable prices along with top-notch customer service. A) suppliers B) internal value chain C) distributors D) portfolio network E) internal supply chain

internal value chain

Which of the following is true of strategic planning in a firm? A) It deals with maintaining the company's current business ventures. B) It focuses on the firm's internal environment rather than the external environment. C) It occurs at the business-unit, product, and market levels rather than at the corporate level. D) It deals with adapting the firm to take advantage of changing marketing opportunities. E) It involves preparing short-term investment objectives at the product level.

it deals with adapting the firm to take advantage of changing marketing opportunities

In the BCG growth-share matrix, question marks refer to products or businesses with a ________. A) low market share in a niche market B) low market share in a market with high growth prospects C) greater market share than all their competitors combined in a saturated market D) high market share in a market with a high growth rate E) low market share in a market that is set to shrink significantly

low market share in a market with high growth prospects

A firm's decision to identify and develop new markets for existing products is a ________ strategy. A) market development B) market differentiation C) market penetration D) product development E) diversification

market development

Which of the following criteria provides a measure of market attractiveness in the Boston Consulting Group approach? A) relative market share B) market sentiment C) return on marketing investment D) market growth rate E) brand image

market growth rate

The two dimensions the BCG approach uses to evaluate and manage SBUs are ________. A) market growth rate and relative market share B) market growth rate and market penetration C) market growth rate and market development D) relative market share and product development E) relative market share and market penetration

market growth rate and relative market share

) EcoBean, a chain of cafes, has introduced a Special Shopper Card that allows customers to pay in advance for coffee and snacks. This effort by EcoBean management is most likely an example of ________. A) market development B) product development C) diversification D) market penetration E) product adaptation

market penetration

A strategy for company growth that involves increasing sales to current market segments without changing the product is known as ________. A) market development B) market differentiation C) market penetration D) product development E) diversification

market penetration

Under Armour increasing its advertising spending and offering an ever-increasing range of styles and colors in its original apparel line is an example of a ________ strategy. A) market penetration B) market development C) product diversification D) business harvesting E) product development

market penetration

At John Deere, thousands of people both inside and outside the organization make decisions about target segments, branding, product development, pricing, promotion, and distribution. They talk with engineering about product design, advertising agencies about ad campaigns, and large retailers like Lowe's about quality offerings. This is an example of ________. A) marketing planning B) marketing standards C) marketing control D) marketing strategy E) marketing implementation

marketing implementation

Nike's goal to increase sales of its running shoes by 25 percent during the first 6 months of the new fiscal year is an example of a ________. A) differentiation objective B) positioning objective C) marketing objective D) marketing strategy E) target market strategy

marketing objective

In a SWOT analysis, which of the following would be considered a weakness of a company? A) an unfavorable economic climate that discourages consumption B) the exit of a competitor from the market C) inflation that leads to higher prices of the company's products D) falling consumer interest in its products E) obsolete technologies used by the company

obsolete technologies used by the company

Traxx is a newly emerging shoe manufacturing company. After extensive market research, Traxx divides its market into professional athletes, "hobbyists" or amateur players, and people who wear shoes as part of their casual attire. Each category has its own needs, traits, and marketing goals. In this scenario, Traxx has engaged in market ________. A) development B) positioning C) diversification D) segmentation E) penetration

segmentation

) Both market penetration strategies and market development strategies primarily involve ________. A) selling a company's current products B) modifying the company's product line C) selling in new as well as existing markets D) developing a new product E) leaving the current market

selling a company's current products

When a company chooses to divest a particular strategic business unit, it ________. A) increases the advertising budget for that strategic business unit B) invests more in the strategic business unit to build its market share C) sells off or phases out the strategic business unit D) invests just enough in the strategic business unit to keep its market share at the current level E) gradually increases investment in the strategic business unit over time to maximize profits

sells off or phases out the strategic business unit

According to the BCG matrix, products or businesses with a high market share in a high-growth market are classified as ________. A) stars B) cash cows C) question marks D) dogs E) heroes

stars

According to the BCG matrix, products or businesses with a low share of market in a high-growth industry are considered ________. A) dogs B) cash cows C) black holes D) stars E) question marks

stars

) CVS Pharmacy changed its name to CVS Health, reshaping and broadening its lines of products and services to align more appropriately with its revamped "better health" mission. For example, it stopped selling tobacco products altogether. How would this be classified in a SWOT analysis? A) strength B) weakness C) opportunity D) threat E) barrier to entry

strength

Managing the marketing function begins with a complete analysis of the company's situation. A thorough ________ is typically undertaken to guide decision making. A) situation analysis B) internal assessment C) industry overview D) SWOT analysis E) portfolio analysis

swot analysis

Which of the following best describes a company's business portfolio? A) the list of all the marketing activities in which the company invests B) the target segments of the company's various businesses C) the company's products or services in a particular market D) the collection of businesses and products that make up the company E) the company's strengths in terms of technology, people, and products

the collection of businesses and products that make up the company

) Omni Healthcare's analgesic drug Cetaprin has a 40% share in the analgesics market in the country of Terrania. Its closest competitor, Febex, has a 25% share in the market, while four other analgesic brands split the remainder. Which statement indicates that Cetaprin is a cash cow according to the BCG matrix? A) Omni Healthcare often takes money from other strategic business units to support Cetaprin. B) A customer survey shows that Cetaprin users do not prefer it to other analgesics in the market. C) The demand for analgesic drugs in the Terrania market is expected to remain stable. D) Febex is rapidly gaining market share over Cetaprin due to aggressive marketing efforts. E) The Terrania market for healthcare products is expanding rapidly.

the demand for analgesic drugs in the terrania market is expected to remain stable

Which of the following best describes the value chain of a company? A) the collection of businesses and products that make up the company B) profits earned by the cash cows and stars in the company's business portfolio C) touchpoints at which a company or brand interacts with its consumers D) the series of departments that design, produce, market, deliver, and support the company's products E) a network made up of the company, its suppliers, and its distributors working together to deliver customer value

the series of departments that design, produce, market, deliver, and support the company's products

In a SWOT analysis, ________ refer to unfavorable external factors or trends that may present challenges to performance. A) threats B) strategies C) weaknesses D) opportunities E) strengths

threats

Cosmetics firm SatinSilk is revamping its mission statement and advertising strategy. The CEO stresses that the new mission statement should be market-oriented rather than product-oriented. Which of the following mission statements will best suit the company? A) to create the best possible products and sell them at the best possible prices B) to sell hypoallergenic cosmetics products made only from the finest organic ingredients C) to give customers the complexion they dream about by providing products suited to their needs D) to become a market leader in every cosmetics product category E) to increase our market share in the cosmetics segment and increase profit margins

to give customers the complexion they dream about by providing products suited to their needs

A company can assess marketing ROI in terms of standard marketing performance measures, such as brand awareness, sales, or market share.

true

A company can offer greater customer value by either charging lower prices than competitors or offering more benefits to justify higher prices.

true

In the marketing mix, product includes the goods and services the company offers to the target market, while promotion includes advertising.

true

Many companies have dropped formal strategic planning models like the BCG because they can be difficult, time consuming, and costly to implement.

true

Marketers must practice constant marketing control to ensure that objectives are attained.

true

Marketing ROI measures the profits generated by investments in marketing activities

true

Marketing dashboards are used to monitor strategic marketing performance.

true

The 4As framework takes into consideration the buyer's view of the market.

true

The product-market expansion grid, like the BCG matrix, is used to identify growth opportunities.

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