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Chap 02 12e MKTG12 - review
St. John's University
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Chap 02_12e_MKTG
Indicate whether the statement is true or false.
1. A business’ mission does not affect its long-run resource allocation, profitability, or survival. a. True
b. Fals e
2. The process that turns a marketing plan into action assignments and ensures that these assignments are executed in a way that accomplishes the plan’s objectives is called evaluation. a. True
b. Fals e
3. An operating decision is unlikely to have a great impact on the long-run profitability of a company. a. True
b. Fals e
4. A diversification strategy is free of risk when a firm is entering unfamiliar markets. a. True
b. Fals e
5. The term marketing mix refers to a unique blend of product, place (distribution), promotion, and pricing strategies (often referred to as the four Ps) designed to produce mutually satisfying exchanges with a target market. a. True
b. Fals e
6. The creation and implementation of a marketing plan allows the organization to achieve marketing objectives and succeed. a. True
b. Fals e
7. For a star, the best marketing tactic is to protect existing market share by reinvesting earnings in product improvement, better distribution, more promotion, and production efficiency. a. True
b. Fals e
8. Strategic planning is the managerial process of creating and maintaining a fit between the organization’s objectives and resources and the evolving market opportunities. a. True
b. Fals e
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9. Market segments cannot be differentiated by ethnicity and multicultural aspects. a. True
b. Fals e
10. RegiSure is a strategic business unit that shows low growth but has a dominant market share. Because of its market share, it should receive additional financing despite its low growth. a. True
b. Fals e
11. Imitation by competitors indicates a lack of competitive advantage and almost ensures mediocre performance. a. True
b. Fals e
12. Product/service differentiation competitive advantage means that an organization provides something that is unique and valuable to buyers beyond simply offering a lower price than that of the competition. a. True
b. Fals e
13. According to the General Electric model for strategic alternatives, market conditions that have low overall attractiveness are the best candidates for investment. a. True
b. Fals e
14. Adjacent innovation involves decisions that result in brand-new markets, products, and often new businesses by acquiring new assets to develop the type of breakthrough decisions that fall in this category. a. True
b. Fals e
15. A company’s skills include patents, copyrights, and technology that are superior to those of the competition. a. True
b. Fals e
16. A competitive advantage is a set of unique features of a company and its products that are perceived by the target market as significant and superior to those of the competition. a. True
b. Fals e
17. According to Ansoff’s strategic opportunity matrix, both product development and diversification entail the creation of new products.
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a. True
b. Fals e
26. According to the Boston Consulting Group model, the best strategy options in dealing with problem children are to invest heavily to gain better market share, acquire competitors to get the necessary market share, or drop the SBU. a. True
b. Fals e
27. If an organization has an SBU that it believes has the potential to be a star (and is probably a problem child at present), building would be an appropriate goal. a. True
b. Fals e
28. SharpSheets is a paper manufacturing company that sells products made of recycled materials. Because no other paper manufacturing company in the market has the ability to replicate its products, it can be said that SharpSheets has a competitive advantage. a. True
b. Fals e
29. Market penetration refers to attracting new customers to existing products. Ideally, new uses for old products stimulate additional sales among existing customers while also bringing in new buyers. a. True
b. Fals e
30. Imitating a rival’s competitive advantage requires a company to first identify the rival’s competitive advantage. a. True
b. Fals e
Indicate the answer choice that best completes the statement or answers the question.
31. Which of the following processes provides the mechanisms for evaluating marketing results in light of the plan’s objectives and for correcting actions that do not help the organization reach those objectives within budget guidelines? a. Implementation
b. Evaluation
c. Control
d. Marketing audit
32. Synergy Corp., a large seller of energy-efficient light bulbs, uses extensive promotional strategies to stimulate sales. Marketers at Synergy Corp. have noticed that a competitor is steadily gaining market share, and they want to counter the
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competition immediately by increasing the sales of Synergy Corp.’s bulbs. Given the situation, which of the following is the quickest step that Synergy’s marketers can take to stimulate the sales of its products? a. Changing the pricing strategy
b. Creating complex production techniques
c. Entering into new supplier contracts
d. Adopting a divesting strategy
33. Revel Inc., a cell phone manufacturer, decides to launch its new line of smartphones on the company’s official website to resolve logistics issues that the company has identified. With this modification, its customers can now buy the smartphones even if they are not available in retail locations near potential consumers. In this case, Revel Inc. focuses on the _____ element of the marketing mix. a. evaluation
b. promotion
c. price
d. distributio n
34. According to Ansoff’s strategic opportunity matrix, unlike market development, product development: a. focuses on attracting present customers to existing products.
b. involves creating new products for present markets.
c. involves entering new markets as competitors.
d. focuses on using existing assets to provide added convenience to existing customers.
35. Using the innovation matrix, the strategic decision to implement changes that use existing assets to provide added convenience to existing customers and potentially entice customers from other brands is considered: a. a core innovation.
b. an adjacent innovation.
c. a transformational innovation.
d. a diversification strategy.
36. Freulia Inc. manufactures and sells stationery and office supplies. It is beginning to lose its competitive advantage with the entry of new competitors. In this case, to gain a sustainable competitive advantage, what should Freulia do? a. Imitate the products of its competitors
b. Depend on government subsidies
c. Develop the skills and assets of the organization
d. Aim at being the low-cost competitor in the industry
37. With reference to the General Electric model for selecting strategic alternatives, which of the following refers to how well placed in a market an organization needs to be to take advantage of opportunities? a. Business position
b. Experience curve
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c. Control
d. Marketing audit
44. Which of the following states the function of a distribution strategy in a marketing mix? a. Distribution strategy is about transporting raw materials or finished products.
b. Distribution strategy is about educating customers about product benefits.
c. Distribution strategy is about providing after-purchase services to customers.
d. Distribution strategy is about public relations activities.
45. Which of the following firms is most likely to realize a competitive advantage through product/service differentiation? a. A firm that sells its products at lower costs than its competitors
b. A firm that inhibits post-sale customer service relations
c. A firm that provides highly reliable products
d. A firm that solely relies on promotional strategies to increase its sales
46. Which of the following does a business exhibit when it describes itself in terms of goods and services rather than in terms of the benefits customers seek? a. Marketing myopia
b. Marketing inertia
c. Marketing dissonance d. Marketing blockage
47. When properly created, a strategic business unit (SBU) of a large company: a. has a specific target market.
b. plans collaboratively with other SBUs of the company.
c. has no competitors.
d. shares the mission of its parent company.
48. Drafi Arts Corp. makes and sells original handicraft products. The management of the company has been successfully using a niche strategy for years. In this case, which of the following is the most likely to be true of Drafi Arts Corp.? a. It serves only a limited geographic market.
b. It offers products at a lower price than that of the competition.
c. It develops products that are similar to those of its competitors.
d. It lowers costs by removing frills and options from its products.
49. Which of the following strategies in the marketing mix aims at bringing about mutually satisfying exchanges with target markets by informing, educating, persuading, and reminding them of the benefits of an organization or a product? a. Promotion strategies
b. Distribution strategies
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c. Pricing strategies
d. Product strategies
50. Marketers at Libra Electronics Inc. are developing promotional strategies to increase product sales. In this case, which of the following strategies would its marketers likely use to improve product/brand awareness among the public? a. They would limit the products’ availability to a few retail stores in the city.
b. They would raise the prices of the products to signify high quality.
c. They would reduce product features or options.
d. They would print pamphlets that elaborate the products’ features.
51. One component of promotion within the context of a marketing mix includes ________. a. public relations activities
b. pricing strategies
c. after-purchase services
d. storage and transportation of finished products
52. Rues and West Bros., an ammunition manufacturer, defines its mission statement as being in the ammunition- production business rather than in the arms industry. In the given scenario, Rues and West Bros. is exhibiting _____. a. marketing inertia
b. marketing myopia
c. marketing dissonance
d. marketing blockage
53. Which of the following defines the key goal of an SBU that is a very successful cash cow? a. Hold
b. Build
c. Harves t
d. Divest
54. A marketing mix typically involves: a. distribution strategies.
b. divestiture strategies.
c. restrictive covenants.
d. federal regulations.
55. The marketers at Gemini Inc. have prepared a marketing plan for the company’s air conditioners. The managers at Gemini have outlined several activities for their subordinates based on this marketing plan and set a deadline and allocated a budget for each activity. Which of the following stages of the marketing plan is illustrated in this scenario? a. Evaluation
b. Implementation
c. Control
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a. They must analyze aspects of its marketing environment.
b. They must focus on organizational resources.
c. They should ignore macroenvironmental forces.
d. They should focus on lowering product prices.
62. Which of the following is characteristic of companies that embrace a niche market strategy? a. The strategy is often adopted by small companies with limited resources.
b. The strategy is employed in a market segment that has low growth potential.
c. The strategy is used to position the company as the long-term, low-cost competitor in an industry.
d. The company typically removes frills and options from the product or service slated for its niche market.
63. According to Ansoff’s strategic opportunity matrix, which of the following factors is associated with market development? a. Limit production.
b. Increase the prices of existing products.
c. Add new uses to current products.
d. Limit resources used for promotion.
64. The total revenue of a firm is calculated by multiplying the number of units sold by the ___________ of each unit. a. profit margin
b. price
c. discount
d. overhead cost
65. The collection and interpretation of data about forces, events, and relationships in the external environment that may affect the organization’s future or its marketing plan implementation is called: a. SWOT analysis.
b. environmental scanning.
c. competitive advantage.
d. cost competitive advantage.
66. Which of the following statements is true of effective strategic planning? a. Subordinates must persuade the management to accept their demands.
b. Managers should challenge assumptions about the firm and the environment.
c. Sound strategic planning is based on a trial-and-error method of execution.
d. Strategic planning should be an annual exercise on a day specially designated for it.
67. If an organization has an SBU that it believes has the potential to be a star, the best allocation of future resources would be to _________ that SBU. a. build
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b. harves t
c. divest
d. hold
68. Which of the following generally does NOT result in a cost competitive advantage? a. Efficient labor
b. Government subsidies
c. Product design
d. Maintaining older service delivery methods
69. Providing something to a target market that is unique and valuable beyond simply offering a lower price than that of the competition is called ________. a. product/service differentiation
b. a niche competitive advantage
c. a sustainable competitive advantage
d. reengineering
70. The strategy in which an SBU preserves market share so that it can take advantage of a very positive cash flow is called ______________. a. divesting
b. holding
c. harvestin g
d. building
71. Which of the following practices can help businesses gain a cost competitive advantage? a. Using simplified production techniques
b. Using expensive raw materials
c. Customizing products with extra features
d. Focusing on serving marginal customers
72. In the context of SWOT analysis, marketers can identify strengths and weaknesses by focusing on: a. employee capabilities.
b. aspects of the marketing environment.
c. demographic forces.
d. macroenvironmental factors.
73. Fourlotts Inc. is a renowned technological firm. It manages many strategic business units (SBUs) in which each SBU: a. has its own return on investment.
b. shares the same goals and employs the same strategies as Fourlotts Inc.
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d. mission statement
79. Which of the following statements is true of a niche strategy? a. Only large companies can implement a niche strategy.
b. Companies that adopt a niche strategy target a single market segment.
c. Only companies that do not have competitors can adopt a niche strategy.
d. Companies that adopt a niche strategy can only gain a price advantage over competitors.
80. Critics of Ansoff’s matrix mention that the matrix does not: a. provide firms with different marketing strategies.
b. reflect the reality of how businesses grow.
c. indicate which types of markets can be created or entered given a company’s core capabilities.
d. outline clear-cut sectors for businesses.
81. Unlike a sustainable competitive advantage, a cost competitive advantage: a. does not ensure satisfactory profit margins.
b. requires business firms to reduce after-purchase service options.
c. involves producing goods that cannot be copied by competitors.
d. is subject to continual erosion.
82. Which of the following is NOT a characteristic of marketing audit? a. It is a comprehensive process.
b. It is a systematic process.
c. It is an objective process.
d. It is an infrequent process.
83. Which of the following terms states that costs decline at a predictable rate as experience with a product increases? a. Ansoff’s strategic opportunity matrix
b. Experience curve
c. Marketing myopia
d. Market opportunity analysis (MOA)
84. Nessca Inc. is a pharmaceutical company that designs its products to suit the needs of a group of people with similar characteristics. In this case, Nessca should target which of the following market segments? a. A group of individuals who are diabetic
b. A group of individuals who work in the same organization
c. A group of individuals who are working professionals
d. A group of individuals who reside in the same residential area
85. Which of the following actions is primarily associated with a niche strategy?
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a. Choosing a target market that is not crucial to the success of major competitors
b. Manufacturing products in bulk and targeting average customers
c. Selling products without extra frills or options
d. Creating cross-departmental teams across all strategic business units
86. Which of the following firms is most likely to follow a niche strategy? a. Libra Inc., a motor company, adopts new production techniques to achieve economies of scale.
b. Alpha Electronics dissolves one of its strategic business units.
c. Venus Inc. sells health and beauty products similar to the ones available in the market.
d. Relish, a confectionery store, sells handcrafted chocolates in only one city.
87. A statement of what is to be accomplished through marketing activities is called __________. a. the marketing mix
b. a marketing objective
c. market opportunity analysis
d. a competitive advantage
88. Which of the following is correct about a sustainable competitive advantage? a. It is not attractive because of its durability.
b. It cannot be copied by the competition.
c. It lowers costs by removing frills.
d. It does not offer any low-priced products.
89. When an SBU has become a _____________, it is essential to either invest in it heavily to gain better market share, acquire competitors to get the necessary market share, reposition its products, or drop it. a. cash cow
b. star
c. dog
d. problem child
90. Which of the following statements is true of a marketing audit? a. It should be carried out on a regular schedule.
b. It is always conducted by an inside party.
c. It covers just the trouble spots of an organization.
d. It is a process for implementing a marketing plan.
91. When following up on a marketing plan, the _____ process provides the mechanisms for evaluating marketing results in light of the plan’s objectives and for correcting actions that do not help the organization reach those objectives within budget guidelines. a. implementation
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c. the elements of advanced strategic planning.
d. personal selling.
98. Identify which statement correctly describes the effect price has in the marketing mix. a. It does not affect a firm’s competitive advantage.
b. It is the least important of the four Ps of the marketing mix.
c. It is what a buyer must give up to obtain a product.
d. It is the hardest to change among the four Ps of the marketing mix.
99. In the context of the innovation matrix, decisions taken at the _____ level implement changes that use existing assets to provide added convenience to existing customers and potentially entice customers from other brands. a. divestment
b. diversification
c. adjacent innovation d. core innovation
100. Which of these statements is correct with regard to the implementation of marketing objectives? a. Implementation gauges the extent to which marketing objectives have been achieved during the specified time period.
b marketing plans succeed even without proper implementation.
c. A lot of ongoing communication is involved when executing a plan.
d hold the power to decide and implement decisions rather than delegating it.
101. Which statement is true of implementing a task force? a. Authority is equally vested in each of its members.
b. A task force is established to accomplish a single goal or mission.
c. It works independently of a specific deadline.
d. It is primarily used for strategic planning rather than for implementing marketing plans.
102. The basic goal of ________ is to increase the short-term cash return without too much concern for the long-run impact. a. harvestin g
b. holding
c. building
d. divesting
103. MaxNutri Inc. sells cookies and nutrition bars. The marketers at MaxNutri are trying to come up with new and attractive packaging designs for its cookies. In this scenario, MaxNutri is working on its _____. a. purchase strategy
b. distribution strategy
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c. advertising strategy
d. product strategy
104. Tropical Horizons has opened spas in Thailand, Indonesia, and Malaysia and is aggressively expanding into countries around the Mediterranean. This illustrates which of the following strategies of Ansoff’s strategic opportunity matrix? a. Market penetration
b. Market development
c. Product development
d. Diversification
105. Which of the following is an element of a marketing mix? a. Pricing strategies
b. Divestment strategies
c. Investment strategies
d. Trade restraint strategies
106. In the portfolio matrix, a business unit that generates more cash than it needs to maintain its market share is called a: a. star.
b. cash cow.
c. problem child.
d. dog.
107. Which of the following is an example of a competitive advantage due to a product/service differentiation? a. Receipt of government subsidies
b. Control of overhead costs
c. Establishment of a brand name
d. Procurement of inexpensive raw materials
108. In the case of SBUs that are cash cows, problem children, or dogs, the basic goal of _______________ is to increase short-term cash return without increased concern for long-run impact. a. building
b. holding
c. harvestin g
d. divesting
109. Which of the following strategies seeks to target and effectively serve a single segment of the market? a. Niche competitive advantage
b. Sustainable competitive advantage
c. Product/service differentiation
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technology d. Increased taxes on products
116. Discuss how to make strategic planning effective.
117. Discuss the market penetration strategy of Ansoff’s strategic opportunity matrix, and provide examples of how companies implement this strategy.
118. Discuss the process of market opportunity analysis.
119. Discuss the process of implementing a marketing plan.
120. What is a mission statement, and how should a firm define its business mission? Give examples to illustrate the components of a good mission statement.
121. Discuss product strategies and pricing strategies in the context of the marketing mix.
122. Discuss the general strategies for selecting target markets.
123. Discuss the factors that make marketing objectives effective.
124. Discuss the three types of competitive advantages.
125. Define the characteristics of strategic business units (SBUs).
126. Explain what is meant by SWOT analysis.
127. Describe the nature of strategic planning.
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Answer Key
1. False
2. False
3. True
4. False
5. True
6. True
7. True
8. True
9. False
10. False
11. True
12. True
13. False
14. False
15. False
16. True
17. True
18. False
19. False
20. True
21. False
22. True
23. True
24. False
Chap 02 12e MKTG12 - review
Course: Marketing Research (MKT 601)
University: St. John's University
