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Questions from Chapter 2 - Strategic Planning and the Marketing Process
Marketing (MK101)
Monroe College
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CHAPTER 2
STRATEGIC PLANNING AND THE MARKETING PROCESS
MULTIPLE CHOICE QUESTIONS
- Planning encourages management to think systematically about what has happened, what is happening, and ______________. a. when it is happening b. what might happen c. should something happen d. should something stop
Answer: (b) Difficulty: (2) Page: 44
- Three types of plans usually prepared by companies include annual plans, strategic plans, and __________ plans. a. hourly b. long-range c. model d. psychological
Answer: (b) Difficulty: (1) Page: 44
- The difference between annual and long-range plans versus a strategic plan is that the annual and long-range plans deal with the company’s current businesses and how to keep them going, while the strategic plan deals with: a. functional activities. b. global activities. c. tactical decisions. d. adapting the firm to take advantage of opportunities in its constantly changing environment.
Answer: (d) Difficulty: (3) Page: 44
- _______________ is the process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing opportunities. a. Strategic planning b. Strategic control c. Strategic networking d. Functional development
Answer: (a) Difficulty: (1) Page: 44
- _______________ planning sets the stage for the rest of the planning in the firm. a. Functional
b. Strategic c. Operational d. Tactical
Answer: (b) Difficulty: (2) Page: 44
- For most companies, the first step in the strategic planning process is to: a. set company objectives and goals. b. design the business portfolio. c. define the company mission. d. review planning, marketing and other functional strategies.
Answer: (c) Difficulty: (2) Page: 44, 45, Figure 2-
- A mission statement is a statement of the organization’s: a. accounts and responsibilities. b. net worth. c. purpose. d. structure.
Answer: (c) Difficulty: (1) Page: 45
- Questions such as “What is our business?” and “Who is the customer?” are generally answered in a company’s: a. objectives. b. plan. c. portfolio. d. mission statement.
Answer: (d) Difficulty: (1) Page: 45
- The statement of the organization’s purpose that acts as an “invisible hand” in guiding people in the organization to action is called: a. the strategic plan. b. the mission statement. c. the target market. d. the company objective.
Answer: (b) Difficulty: (2) Page: 45
- Traditionally, companies have defined their businesses in product terms or in: a. motivation terms. b. global terms. c. functional terms.
Answer: (b) Difficulty: (2) Page: 50
- If an organization were to identify a unit that has a separate mission and objectives and that can be planned independently from other company businesses, it would be called a(n): a. strategic business unit. b. control unit. c. product/market expansion unit. d. development unit.
Answer: (a) Difficulty: (1) Page: 51
- The purpose of strategic planning is to find ways in which the company can best: a. overcome losses. b. use its strengths to take advantage of attractive opportunities in the environment. c. avoid paying taxes. d. avoid the expense of costly research and development while still getting the benefits.
Answer: (b) Difficulty: (2) Page: 51
- The best known portfolio-planning method was developed by: a. the Department of Commerce. b. the University of Chicago. c. the Boston Consulting Group. d. the A. C. Nielson Consulting Group.
Answer: (c) Difficulty: (1) Page: 51
- According to the growth-share matrix portfolio-planning method, a company’s strategic business units can be evaluated in terms of their: a. market growth rate and their relative profitability. b. market growth rate and their expansion curve tendency. c. structure and target markets. d. market growth rate and relative market share.
Answer: (d) Difficulty: (3) Page: 51, 52, Figure 2-
- Under the BCG growth-share matrix, relative market share provides: a. a measure of the company’s strength in the market. b. the primary information for investment/divestiture decisions. c. a measure of market attractiveness. d. a measure of profitability for all products.
Answer: (a) Difficulty: (2) Page: 51
- Under the BCG growth-share matrix, high-growth, high-share businesses or products are called: a. stars. b. cash cows. c. question marks. d. dogs.
Answer: (a) Difficulty: (1) Page: 51, 52, Figure 2-
- Under the BCG growth-share matrix, low-growth, high-share businesses or products are called: a. stars. b. cash cows. c. question marks. d. dogs.
Answer: (b) Difficulty: (1) Page: 52, Figure 2-
- Under the BCG growth-share matrix, low-share, high-growth businesses or products are called: a. stars. b. cash cows. c. question marks. d. dogs.
Answer: (c) Difficulty: (1) Page: 52, Figure 2-
- According to the BCG growth-share matrix, which types of SBUs listed below often need heavy investment to finance their rapid growth? a. Stars. b. Cash cows. c. Question marks. d. Dogs.
Answer: (a) Difficulty: (2) Page: 51
- According to the BCG growth-share matrix, which types of SBUs listed below often produces profits that help to support other SBUs in need of investment? a. Stars. b. Cash cows. c. Question marks. d. Dogs.
Answer: (b) Difficulty: (2) Page: 52
- If a company makes the decision to phase out an SBU and use the resources
current products to current market segments without altering the product is called: a. market penetration. b. market development. c. product development. d. diversification.
Answer: (a) Difficulty: (2) Page: 56
- Considering the strategies available in the product/market expansion grid, assume that a company cuts prices, increases advertising, tries to get its products into more stores, and tries to obtain better in-store displays. Which of the following strategies would the company most likely be pursuing based on the above actions? a. market penetration b. market development c. product development d. diversification
Answer: (a) Difficulty: (2) Page: 56
- Under the product/market expansion grid, the strategy of finding new market segments for current company products is called: a. market penetration. b. market development. c. product development. d. diversification.
Answer: (b) Difficulty: (2) Page: 56
- If a company (in reviewing its product/market expansion grid) decides to pursue new demographic markets and expand into new geographic markets with existing products, the company would be following which of the general strategies below? a. market penetration b. market development c. product development d. diversification
Answer: (b) Difficulty: (2) Page: 56
- Under the product/market expansion grid, the strategy of offering new products to current markets is called: a. market penetration. b. market development.
c. product development. d. diversification.
Answer: (c) Difficulty: (2) Page: 56
- If a company chooses (considering its options on the product/market expansion grid) to offer new styles, sizes, or colors to its existing market, the company would be following which of the general strategies listed below? a. market penetration b. market development c. product development d. diversification
Answer: (c) Difficulty: (2) Page: 56
- Under the product/market expansion grid, the strategy of entering a new market(s) with new products is called: a. market penetration. b. market development. c. product development. d. diversification.
Answer: (d) Difficulty: (2) Page: 53, 56, Figure 2-
- If a company (considering its options on the product/market expansion grid) chooses to move into different unrelated fields (from what it has ever done before) with new products as a means to stimulate growth, the company would be following which of the following general strategies? a. market penetration b. market development c. product development d. diversification
Answer: (d) Difficulty: (2) Page: 53, 56, Figure 2-
- All of the following are ways that marketing plays a key role in the company’s strategic planning EXCEPT: a. marketing provides a guiding philosophy. b. marketing is the only discipline that can provide a formal structure for the planning effort. c. marketing provides inputs to strategic planners by helping to identify attractive market opportunities. d. within individual business units, marketing designs strategies for reaching the unit’s objectives.
Answer: (b) Difficulty: (3) Page: 57
When Wal-Mart’s purchasing department obtains the lowest prices possible from
________________ consists of dividing a market into distinct groups of buyers on the basis of needs, characteristics, or behavior who might require separate products or marketing mixes. a. Product differentiation b. Market segmentation c. Market targeting d. Market positioning
Answer: (b) Difficulty: (2) Page: 61
- A ______________ consists of consumers who respond in a similar way to a given set of marketing efforts. a. market b. market segment c. market position d. target
Answer: (b) Difficulty: (1) Page: 61
- With respect to market targets, a company should target segments in which: a. there are the most customers. b. there are the most customers with the most money to spend. c. the company can profitably generate the greatest customer value and sustain it over time. d. there are the fewest competitors and there are the lowest costs.
Answer: (c) Difficulty: (3) Page: 61
- A product’s __________ is the place the product occupies relative to competitors in consumer’s minds. a. image b. position c. niche d. segment
Answer: (b) Difficulty: (2) Page: 62
- When the Chevy Blazer is described as being “like a rock,” it is an example of: a. market segmentation. b. product differentiation. c. market targeting. d. market positioning.
Answer: (d) Difficulty: (3) Page: 62
- In positioning its product, the company first identifies possible: a. market segments.
b. market targets. c. competitive advantages on which to build the position. d. costs and profit pitfalls.
Answer: (c) Difficulty: (1) Page: 62
- Product, price, place, and promotion are all controllable tactical marketing tools found in the company’s ________________. a. positioning plan b. marketing analysis division c. marketing mix d. marketing support system
Answer: (c) Difficulty: (2) Page: 63
- Design, quality, features, brand name, packaging, services, and variety are all items found in which of the following marketing mix variables? a. product b. price c. place d. promotion
Answer: (a) Difficulty: (2) Page: 63, Figure 2-
- ________________ includes the company activities that make the product available to target customers. a. Product b. Price c. Place d. Promotion
Answer: (c) Difficulty: (2) Page: 63, Figure 2-
- From the buyer’s point of view in this age of connectedness, the four Ps of the marketing mix might be better described as the four Cs. Which of the following Cs would match to the Place variable in the marketing mix? a. Customer solution b. Customer cost c. Convenience d. Communication
Answer: (c) Difficulty: (2) Page: 64
- The marketing function that identifies the company’s strengths and weaknesses while considering its opportunities and threats is called: a. marketing analysis.
c. Marketing strategy d. Action programs
Answer: (c) Difficulty: (2) Page: 66, Table 2-
- The process that turns marketing strategies and plans into marketing actions in order to accomplish strategic marketing objectives is called: a. marketing strategy. b. marketing control. c. marketing analysis. d. marketing implementation.
Answer: (d) Difficulty: (2) Page: 66
- Successful ________________ depends on how well a company blends its people, organizational structure, decision and reward systems, and company culture into a cohesive program that supports its strategies. a. marketing strategy b. marketing control c. marketing analysis d. marketing implementation
Answer: (d) Difficulty: (3) Page: 67
- The most common form of marketing organization is the: a. functional organization. b. geographic organization. c. product management organization. d. market management organization.
Answer: (a) Difficulty: (1) Page: 67
- Companies that sell a single product to many different types of customers who have different needs and preferences often use what type of marketing department organization? a. functional organization b. geographic organization c. product management organization d. market or customer management organization
Answer: (d) Difficulty: (2) Page: 68
- ______________ is the process of measuring and evaluating the results of marketing strategies and plans, and taking corrective action to ensure that marketing objectives are achieved. a. Strategic control b. Operating control c. Functional control
d. Marketing control
Answer: (d) Difficulty: (2) Page: 68
- _____________ involves checking ongoing performance against the annual plan and taking corrective action when necessary. a. Strategic control b. Engineering control c. Operating control d. Matrix control
Answer: (c) Difficulty: (2) Page: 68
- The ____________ is a comprehensive, systematic, independent, and periodic examination of a company’s environment, objectives, strategies, and activities to determine problem areas and opportunities. a. marketing plan b. marketing strategy c. marketing audit d. marketing profile
Answer: (c) Difficulty: (3) Page: 69
TRUE/FALSE QUESTIONS
- Strategic planning involves defining a clear company mission and other activities.
Answer: (True) Difficulty: (1) Page: 44
- Many companies operate without formal plans.
Answer: (True) Difficulty: (1) Page: 44
- The first step in strategic planning is to set company objectives and goals.
Answer: (False) Difficulty: (2) Page: 45, Figure 2-
- Management should always make its mission statement as broad as possible.
Answer: (False) Difficulty: (2) Page: 48
- To do business correctly, mission statements should be product-oriented.
Answer: (False) Difficulty: (2) Page: 49, Table 2-
“We run theme parks” would be an example of a market-oriented mission for the Disney company.
A market position consists of consumers who respond in a similar way to a given set of marketing efforts.
Answer: (False) Difficulty: (2) Page: 61
- Marketing targeting involves evaluating each market segment’s attractiveness and selecting one or more segments to enter.
Answer: (True) Difficulty: (1) Page: 61
- If Ford Taurus establishes itself as a car that is “built to last,” it has established a market position.
Answer: (True) Difficulty: (1) Page: 62
- The most important of the 4 Ps is promotion because without promotion no one would know about the products.
Answer: (False) Difficulty: (2) Page: 63
- The text indicates that 4 Cs match the 4 Ps of the marketing mix. The C that would match the Product component of the 4 Ps would be Customer goods.
Answer: (False) Difficulty: (2) Page: 64
- Marketing strategy is what is used by the marketer to develop the projected profit- and-loss statement.
Answer: (False) Difficulty: (2) Page: 65, 66, Table 2-
- The element of the marketing plan that is used to present a brief summary of the main goals and recommendations of the plan for management review is the marketing audit.
Answer: (False) Difficulty: (2) Page: 66, 69, Table 2-
- The most common form of marketing organization is the functional organization.
Answer: (True) Difficulty: (1) Page: 67
ESSAY QUESTIONS
- For more than 25 years, Intel has dominated the microprocessor market for personal computers. Intel’s stunning success results from strong strategic planning and its relentless dedication to a simple marketing strategy. Identify this simple strategy and
discuss how Intel has implemented it. Additionally, comment on what you believe are Intel’s strongest strategic plans.
Answer: Intel’s simple strategy is “to provide the most value and satisfaction to customers through product leadership.” Intel’s strategy rests on delivering superior value by creating a continuous stream of leading-edge products. Then it communicates its superior value to consumers. This has built intense customer loyalty and preference.
Since Intel’s growth depends on increasing demand for microprocessors, which in turn depends on growth in PC applications and sales, the company has an intense interest in the PC industry and its fate. To control its own destiny the company is now developing applications on the PC itself. Its investment in technology and market development has paid off. Intel’s advertising campaigns have made the company’s name a household word. Additionally, Intel is working with small companies to spur the next “killer app.” Students should think carefully about what they perceive to be Intel’s best strategy, be it advertising, market development, or technology. Any of these can be justified with detailed explanations taken from the introductory example in the text.
Difficulty: (2) Page: 41-
- Describe the strategic planning process. Identify the four steps of the strategic planning process.
Answer: Strategic planning is defined as the process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing opportunities. The four steps in the strategic planning process include: (1) defining the company mission (a statement of purpose), (2) setting company objectives and goals (what do we want to accomplish), (3) designing business portfolios, and (4) planning marketing and other related strategies.
Difficulty: (2) Page: 44, Figure 2-
- Define a mission statement. Characterize what good mission statements should be.
Answer: A mission statement is a statement of the organization’s purpose—what it wants to accomplish in the larger environment.
A mission statement should be realistic, specific, fit the market environment, and be motivating.
Difficulty: (1) Page: 45, 48
Define a business portfolio. Next, indicate the nature of the Boston Consulting Group portfolio model. Discuss this model in detail.
Describe the marketing management process and the forces that influence it.
Answer: The marketing management process involves helping each business unit of the company reach its strategic objectives in relation to creating value for target consumers while fulfilling company goals. Factors that influence this process include the process for targeting consumers; marketing mix decisions; planning, implementation, and analysis and control procedures; and micro- and macro-environmental forces. Students should carefully explain each portion of Figure 2-4 and demonstrate the relationships contained therein.
Difficulty: (2) Page: 60 and Figure 2-
- Discuss the differences between market segmentation, market targeting, and market positioning.
Answer: Market segmentation is the process of dividing a market into distinct groups with distinct needs, characteristics, or behavior who might require separate products or marketing mixes. Market targeting is the process of evaluating each market segment’s attractiveness and selecting one or more segments to enter. Market positioning is arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.
Difficulty: (2) Page: 61-
- Compare the 4 Ps of the marketing mix against the 4 Cs that might result from the new age of connectedness.
Answer: As suggested in the chapter, the 4 Ps are: the 4 Cs are: Product Customer solution Price Customer cost Place Convenience Promotion Communication.
Difficulty: (2) Page: 64
- Marketing planning involves deciding on marketing strategies that will help the company attain its overall strategic objectives. In order to carry out effective planning a detailed marketing plan is needed for each business. List and briefly identify the primary steps (contents) of a marketing plan. Be specific in your listing and identifications.
Answer: The steps and a brief description of a marketing plan include: a). Executive summary—presents a brief summary of the main goals and recommendations of the plan for management review, helping management to find the plan’s major points quickly.
b). Current marketing situation—describes the target market and the company’s position in it, including information about the market, product performance, competition, and distribution. c). Threats and opportunity analysis—assesses major threats and opportunities that the product might face, helping management to anticipate important positive or negative developments that might have an impact on the firm and its strategies. d). Objectives and issues—states the marketing objectives that the company would like to attain during the plan’s terms and discusses key issues that will affect their attainment. e). Marketing strategy—outlines the broad marketing logic by which the business unit hopes to achieve its marketing objectives and the specifics of target markets, positioning, and marketing expenditure levels. f). Action programs—spells out how marketing strategies will be turned into specific action programs that answer the following questions: What will be done? When will it be done? Who is responsible for doing it? And how much will it cost? g). Budgets—details a supporting marketing budget that is essentially a projected profit- and-loss statement. h). Controls—outlines the controls that will be used to monitor progress and allow higher management to review implementation results and spot products that are not meeting their goals.
Difficulty: (3) Page: 66, Table 2-
- Modern marketing departments can be arranged in several ways. List and briefly describe the ways cited in the text.
Answer: a). Functional organization—the most common form of marketing organization. Different marketing activities are headed by a functional specialist (a sales manager, advertising manager, marketing research manager, et cetera). b). Geographic organization—sales and marketing people are assigned to specific countries, regions, and districts. Geographic organization allows sales people to settle into a territory, get to know their customers, and work with a minimum of travel time and cost. c). Product management organization—a product manager develops and implements a complete strategy and marketing program for a specific product or brand. d). Market or customer management organization—marketing managers are responsible for developing marketing strategies and plans for their specific markets or customers. e). Combination plans.
Difficulty: (3) Page: 67, 68
APPLICATION QUESTION
- To be effective in the marketplace, a company must divide up the total market available, choose the best market segments, and design strategies for profitably serving chosen segments better than its competitors. One company that seems to have done this extremely well is Ty Corporation with its line of Beanie Babies. The products seem to sell
Questions from Chapter 2 - Strategic Planning and the Marketing Process
Course: Marketing (MK101)
University: Monroe College
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