Chapter 1: Overview of Marketing Strategy & the Strategic Marketing

Process
1) A firm that has determined which customers to serve, where to conduct business, and how to meet
customer needs has most likely developed a ________.

A) profit analysis

B) business portfolio

C) marketing strategy

D) public relations plan

2) ________ is the logic by which a company hopes to achieve profitable customer relationships.

A) Strategic HR management

B) Product differentiation

C) Corporate branding

D) Marketing strategy

3) What are the three basic elements of an effective marketing strategy?

A) singularity, target segments, competitive advantages

B) target segments, customer needs, geographic markets

C) singularity, product differentiation, corporate resources

D) competitive advantages, public relations, business models

4) ________ is how a firm differentiates itself from competitors in a way that customers value.

A) Segmentation

B) Diversification

C) Development

D) Singularity
5) According to marketing strategy expert Michael Porter, "Competitive strategy is about being

________."

A) efficient

B) different

C) superior

D) satisfactory

6) According to Peter Drucker, which of the following is most essential to defining the purpose

and strategy of a business?

A) customer needs

B) value added profits

C) cross-cultural sales

D) production efficiencies

7) A firm's marketing concept should primarily focus on ________.

A) educating potential buyers

B) establishing product trends

C) meeting specific customer needs

D) reducing labor and production costs

8) Research indicates that a firm with an effective marketing-oriented strategy is more likely to

experience higher ________.

A) long-term profits

B) production costs

C) short-term profits

D) start-up costs
9) What are the two generic frameworks of most marketing strategies?

A) niche scope, target segmentation

B) competitive advantage, globalization

C) customer intimacy, competitive scope

D) competitive advantage, competitive scope

10) A marketing strategy of competitive advantages is typically based on either ________ or ________.

A) mass global appeal; cost leadership

B) cost leadership; differentiation

C) segmentation; globalization

D) differentiation; reliability

11) A firm with a marketing strategy of differentiation most likely sells a product with qualities

that ________.

A) competitors do not offer and that specific customers value

B) competitors offer and that numerous customers demand

C) a small segment of consumers demand at a low price

D) a wide range of consumers perceive as convenient

12) Which of the following is LEAST likely to be used by a firm pursuing a marketing strategy

of differentiation?

A) reliability

B) convenience

C) performance

D) cost leadership
13) Which marketing strategy involves developing the lowest cost structure in order to earn

higher margins?

A) competitive scope

B) cost leadership

C) segmentation

D) differentiation

14) Targeting very large markets is best known as ________ marketing.

A) mass

B) target

C) niche

D) strategic

15) Which of the following marketing strategies is LEAST likely to generate long-term success

for a firm?

A) differentiation in a mass market

B) cost leadership in a niche market

C) differentiation in a niche market

D) cost leadership in a mass market

16) Which of the following involves identifying small segments of customers and serving their

specific needs?

A) customer advantage strategy

B) brand leadership strategy

C) customer intimacy strategy

D) cost leadership strategy

17) The quality a customer receives adjusted for the price a customer pays for a product is

known as ________.

A) perception

B) dividend

C) loyalty

D) value

18) A ________ is a graphical representation of the ratio between a product's benefits and costs.

A) data mine

B) value map

C) fair value matrix

D) customer data graph

19) A product that falls within the fair value zone of a value map is perceived by consumers as

delivering benefits that are ________ the product's cost.

A) equal to

B) less than

C) greater than

D) unrelated to

20) A firm could most likely increase the perceived benefits of a product by ________.

A) reducing the overall purchase price

B) reducing the operating costs associated with the product

C) adding maintenance costs associated with owning the product

D) adding a desirable new feature to the product without increasing the purchase price
21) According to a value-frontier framework, which of the following is LEAST likely to be an

effective long-term marketing strategy?

A) high price, high performance

B) high price, low performance

C) low price, low performance

D) low price, high performance

22) Which of the following is constantly pushing the value frontier towards higher quality and/or

lower prices?

A) innovation

B) wage increases

C) market expansion

D) government spending

23) Which growth strategy involves selling more of a firm's existing products to the firm's

existing markets?

A) diversification

B) market penetration

C) market development

D) product development

24) Which growth strategy is most likely being used by a firm selling new products to existing

markets?

A) diversification

B) market penetration

C) market development

D) product development
25) A firm selling new products to new markets is most likely using a growth strategy of ________.

A) diversification

B) market penetration

C) market development

D) product development

26) Which of the following best describes a growth strategy of market development?

A) selling existing products to existing markets

B) selling existing products to new markets

C) selling new products to existing markets

D) selling new products to new markets

27) When Toys-R-Us opened Kids-R-Us and Babies-R-Us, the firm was using the method of

________.

A) product development

B) market penetration

C) market development

D) diversification

28) What is the first step in the strategic marketing and planning process?

A) market segmentation

B) product promotion

C) situation assessment

D) strategy formation
29) Strategic decisions primarily affect a firm's ________.

A) globalization

B) marketing

C) present

D) future

30) The author of the text describes IBM's entry into the area of personal computers as an

________ strategic decision.

A) ad ho

B) insightful

C) incompetent

D) advantageous

Chapter 2: Situation Assessment -The External Environment

1) Which stage of the marketing process primarily involves monitoring the environment,

evaluating the firm's core competencies, and anticipating future events?

A) market segmentation

B) situation assessment

C) budget analysis

D) positioning

2) In the marketing process, which of the following is NOT one of the four Cs considered

essential during a situation assessment?

A) context

B) customers

C) conversions

D) competition
3) Which of the following would most likely occur during an assessment of the external

marketing environment?

A) analyzing the specific industry

B) evaluating core competencies

C) contacting financial resources

D) establishing strategic moves

4) For the most effective situation assessment, which of the following should occur first?

A) determining a marketing mix

B) reviewing customer needs

C) evaluating technology

D) defining the market

5) In a concentric market, which of the following is the core?

A) generic competition

B) product form

C) budget competition

D) product category

6) What is the broadest level of a concentric market?

A) product form

B) product category

C) budget competition

D) generic competition
7) A supply side approach to market definition focuses on the ________.

A) primary industry

B) budget competition

C) alternative products

D) customers' perspectives

8) Marketers should be aware of tax codes, operating rules, and guidelines that affect business

and industry in a given society. This is the ________ context.

A) social

B) political

C) economic

D) physical

9) Demographics, norms, and lifestyles are factors in the ________ context that marketers must

always consider.

A) social

B) political

C) physical

D) regulatory

10) A marketer who is conducting a broad exploration of customer insights and emerging market

trends is most likely involved with ________.

A) segmentation

B) strategy formation

C) customer assessment

D) customer relationship management

11) What is the primary goal of customer assessment?

A) analyzing historical consumer trends

B) attracting interest among new customers

C) customizing product offerings to consumers

D) predicting future patterns of customer needs

12) Findings about customers discovered through ________ techniques often lead to marketing

opportunities.

A) data mining

B) value networking

C) data warehousing

D) product branding

13) A broad, subjective search for trends across media and other environments is known as ________.

A) targeting

B) coolhunting

C) positioning

D) data mining

14) According to the text, identifying customer insights is the first step in ________.

A) implementing the marketing mix

B) maintaining economies of scale

C) discovering new markets

D) branding products
15) Which of the following would most likely be used by a marketer gathering customer insights

about unmet and unrecognized customer needs?

A) trendspotting

B) in-depth interviews

C) data mining

D) loyalty surveys

16) Which of the following is NOT one of the forces that drive industry analysis?

A) competitive rivalry

B) threat of new entrants

C) product-market evolution

D) bargaining power of buyers

17) Competitive rivalry, the bargaining power of suppliers and customers, and the threat of

substitute products and new entrants are the forces that jointly influence ________.

A) industry profitability

B) economies of scope

C) product scale effects

D) demographic trends

18) Which of the following is NOT a challenge presented to marketers by the product life cycle?

A) Sales and profits for all products eventually decline.

B) It is difficult to plot the life cycle stages as a product goes through them.

C) A firm must be effective at adapting its marketing strategies for different life cycle stages.

D) Changing tastes and technologies affect the marketing of a product as it passes through life

cycle stages.
19) Major strategic gains and losses will most likely occur at which stage of the product life cycle?

A) introduction

B) maturity

C) decline

D) growth

20) Marketers can most likely use the product life cycle concept as a tool for ________.

A) predicting sales trends

B) targeting niche consumers

C) conducting advertising tests

D) collecting data for product analysis

21) In which stage of the product life cycle would share building most likely be difficult and lead

to price competition?

A) growth

B) decline

C) maturity

D) introduction

22) Which term best describes the effect that occurs when production volume increases and unit

costs decline?

A) competitive advantage

B) experience curve

C) virtuous circles

D) single sourcing
23) Which of the following would most likely lower unit costs while increasing reliability and

conformance quality?

A) network effects

B) economies of scope

C) diseconomies of scale

D) learning curve effects

24) Producing more than one product and lowering the cost of production of all products is best

known as ________.

A) experience curve effects

B) diseconomies of scale

C) economies of scope

D) virtuous circles

25) ________ occurs when a product provides more value to each customer when more overall

customers own or use the product.

A) Network effect

B) Virtuous circle

C) Economy

D) Synergy

26) Which term refers to increases in unit costs as production increases?

A) vicious circle

B) economies of scope

C) diseconomies of scale

D) experience curve effects

27) Which of the following best describes a situation in which more people are buying a product,

more retailers are wanting to stock the product, and sales of the product are increasing?

A) synergy

B) virtuous circles

C) economies of scope

D) learning curve effects

(Text Box comment virtuous circles:)

28) Economies of scale are primarily increased by ________.

A) strict industrial standards

B) knowledge retention rates

C) major quality modifications

D) higher units of production

29) PIMS data shows a strong correlation between ________ and ________.

A) market share; profitability

B) unit costs; marketing strategy

C) market share; product quality

D) profitability; marketing success

30) Which of the following is most likely to result from higher market share?

A) higher unit costs

B) lower reliability

C) higher profits

D) lower volume
Chapter 3: Situation Assessment -The Company

1) Which of the following provides an answer to these questions: What is our business? Why

does our business exist? What are our values? What does our business intend to become?

A) functional strategy

B) operational strategy

C) business portfolio

D) mission statement

2) In most firms, the process of developing a marketing strategy begins with the guidance

provided by a(n) ________.

A) mission statement

B) orientation session

C) shareholder review

D) employment plan

3) All of the following should be included in a corporate mission statement EXCEPT the

________ of the firm.

A) core purpose

B) long-term profits

C) core values

D) long-term goals
4) Which term refers to actions taken by a firm to advance a social good that is beyond the interests of
the firm?

A) corporate social responsibility

B) environmental goals

C) corporate objectives

D) public policy

5) According to the text, firms that integrate social and environmental goals into their business

strategy experience ________.

A) close government scrutiny

B) shareholder lawsuits

C) enhanced profits

D) reduced taxes

6) Henry Ford, the founder of Ford Motor Company, was sued by his shareholders for ________.

A) using dividend payments to hire more workers

B) distributing bonuses to long-term employees

C) failing to reduce manufacturing expenses

D) supporting controversial organizations

7) According to the work of Bob Willard and John Elkington, firms that engage in socially

responsible activities are LEAST likely to experience ________.

A) increased retention rates for top talent

B) reduced manufacturing expenses

C) increased employee productivity

D) reduced health care costs

8) According to ________, the social responsibility of business is to increase its profits.

A) Henry Ford

B) Adam Smith

C) John Stuart Mill

D) Milton Freedman

9) Which term best refers to the various groups of people or organizations that have an interest in

the actions and success of a firm?

A) pillars

B) stakeholders

C) consumers

D) shareholders

10) Which of the following would be an external stakeholder of a firm?

A) supplier

B) manager

C) debt holder

D) shareholder

11) According to ________, firms benefit from considering the interests of employees,

customers, vendors, and other parties.

A) shareholder theory

B) strategic marketing theory

C) stakeholder theory

D) triple bottom line theory

12) Which of the following is NOT one of the three pillars integrated into the triple bottom line?

A) policy

B) profits

C) people

D) planet

13) The triple bottom line is best defined as a(n) ________.

A) metric used to evaluate new and current employees

B) accounting database used by globalized firms of all sizes

C) assessment system for financial and nonfinancial outcomes

D) designation assigned to firms exhibiting corporate social responsibility

14) What is the primary drawback associated with the triple bottom line framework?

A) generating media interest

B) developing mission statements

C) maintaining shareholder support

D) measuring corporate performance

15) Which of the following collects customer satisfaction data for the purpose of measuring

marketing strategies and troubleshooting product malfunctions?

A) marketing information system

B) supplemental marketing tool

C) consumer marketing database

D) strategic marketing matrix

16) A firm using a marketing information system would most likely have which of the following

questions answered?

A) What geographic area is our firm targeting?

B) How well are we doing in our customers' eyes?

C) How can our financial objectives best be attained?

D) What metrics would be appropriate for our customers?

17) Competitive advantages are best defined as the ________.

A) strengths and weaknesses of a firm

B) unique skills of a firm's employees

C) technology developed by a firm

D) improvements made by a firm

18) Clear marketing objectives primarily help a firm to ________.

A) assess a competitor's strengths

B) motivate global sales representatives

C) achieve decision-making consistency

D) monitor business-to-business accounts

19) SMART is a mnemonic device for ________.

A) determining strengths and weaknesses

B) analyzing external environments

C) evaluating customer satisfaction

D) assessing marketing objectives

20) SMART marketing objectives are ________.

A) specific, measurable, achievable, relevant, and timed

B) strategic, motivational, absolute, relevant, and targeted

C) specific, motivational, advantageous, realistic, and timed

D) strategic, measurable, achievable, reliable, and targeted

21) Which of the following is a financial objective?

A) reduce customer complaints

B) increase customer interest

C) reduce overall sales costs

D) increase sales volume

22) Which term refers to the distance between where a firm is and where it wants to be?

A) strategic goal

B) planning gap

C) life cycle

D) bubble

23) For marketing strategists, ________ performance and ________ performance are measures

of particular importance.

A) sales account; distribution

B) short-term; long-term

C) historical; anticipated

D) market; financial
24) A large planning gap most likely suggests that ________.

A) major changes should be made to the current strategy

B) the current strategy is working much better than expected

C) minor changes should be made to the current strategy

D) the current strategy is working adequately at the moment

25) A large retail firm is experiencing a significant sales gap. Which of the following strategies

would LEAST likely be implemented by the firm to close the gap?

A) diversification

B) market penetration

C) forward integration

D) product development

26) Which of the following strategies would most likely be used by a firm trying to close a

profitability gap?

A) decreasing the yield

B) reducing investment intensity

C) selling new products to new markets

D) outsourcing value-added activities to suppliers

27) Undertaking value-added activities that were once outsourced to suppliers is known as ________.

A) backward integration

B) product development

C) forward integration

(Text Box comment Backward integration, forward integration)

D) diversification
28) A firm trying to close a profitability gap is concentrating on its most profitable products and

abandoning markets that it cannot win. Which strategy is the firm most likely using?

A) capacity utilization

B) forward integration

C) rationalization

D) segmentation

29) Which of the following should first be used to narrow situation assessment data into useable

information?

A) segment rationalization test

B) scenario analysis

C) SWOT analysis

D) relevance test

30) A scenario analysis is best described as a tool used by firms to ________.

A) conduct global market research

B) plan future marketing responses

C) analyze strengths of competitors

D) collect situation assessment data

Chapter 4: Strategy Formation

1) What is the first step of strategy formulation?

A) creating a marketing mix

B) targeting specific customers

C) segmenting a particular market

D) identifying competitive advantages

2) Which of the following is LEAST likely to be considered a competitive advantage for a firm?

A) rare capabilities

B) valuable resources

C) substitutable products

D) transferable technology

3) Firms can most likely identify competitive advantages with a framework based on their

________.

A) sales ratio

B) value chain

C) supply curve

D) marketing mix

4) Which of the following refers to the process of dividing a market into meaningful and distinct

customer groups?

A) targeting

B) positioning

C) segmentation

D) differentiation

5) In the market segmentation process, customer needs, wants, and demands are considered

segment ________.

A) bases

B) descriptors

C) specializations

D) psychographics
6) The text describes how Lexus was able to successfully enter the luxury sedan market despite

the dominance of BMW. Which of the following best explains how Lexus accomplished this

task?

A) Lexus targeted customers who were interested in high performance.

B) Lexus used full market coverage to lower BMW's market share.

C) Lexus focused on the market segment that valued reliability.

D) Lexus used advertising that attacked BMW's quality ratings.

7) In market segmentation, ________ are any underlying motivations that drive consumer

consumption, such as security or shelter.

A) demands

B) benefits

C) values

D) needs

8) Which term refers to the outcome or consequence of purchasing a product?

A) perception

B) benefit

C) respect

D) value
9) Age, income, lifestyle, and location are examples of ________.

A) perceptual needs

B) segmentation bases

C) segment descriptors

D) psychographic categories

10) According to the text, which of the following best explains why the marketing mix receives

different customer responses?

A) rising education levels

B) shifting political cultures

C) varying customer needs

D) declining monetary values

11) Which of the following is NOT an example of a demographic segmentation variable?

A) lifestyle

B) income

C) gender

D) education

12) The division of buyers into groups based on lifestyle or personality characteristics is

________ segmentation.

A) psychographic

B) demographic

C) geographic

D) behavioral
13) The division of buyers into groups based on their product knowledge, usage rate, or loyalty is

________ segmentation.

A) psychographic

B) demographic

C) geographic

D) behavioral

14) A firm that targets very broad segments with relatively homogeneous offerings is most likely

using a ________ marketing strategy.

A) target

B) global

C) niche

D) multi-segment

15) All of the following are examples of segmentation bases EXCEPT ________.

A) performance

B) profitability

C) economy

D) reliability

16) Which type of market coverage strategy requires a firm to have the most detailed understanding of
its target market?

A) behavioral target marketing

B) undifferentiated marketing

C) niche marketing

D) mass marketing
17) When New Port Shipping uses segmented marketing, the firm targets several segments and

offers a unique product tailored to each one. This approach is called ________ marketing.

A) undifferentiated

B) differentiated

C) concentrated

D) niche

18) A differentiated marketing strategy is typically linked to lower ________.

A) economies of scope

B) economies of scale

C) customer value

D) unit costs

19) Which of the following best describes a differentiated marketing strategy of product specialization?

A) one product and one segment

B) many products and one segment

C) one product and many segments

D) many products and many segments

20) A marketer decides to serve several different needs of one segment with multiple products

and marketing programs. Which type of differentiated marketing is most likely being used by the

marketer?

A) segment specialization

B) product specialization

C) selected specialization

D) full market coverage

21) A firm that selects and focuses on one or a few single segments is most likely using a

strategy of ________.

A) product specialization

B) segment specialization

C) selected specialization

D) full market coverage

22) Matching a firm's competitive advantages with attractive market opportunities is best known

as ________.

A) targeting

B) positioning

C) segmenting

D) differentiating

23) Each year, Honeywell asks every department manager to rate his or her department's

strengths and weaknesses as well as those of the other departments with which the department

interacts. Then each department manager is asked what he or she sees as the greatest threats and

opportunities for the company. Honeywell is asking its department managers to engage in a(n)

________.

A) SWOT analysis

B) market analysis

C) compatibility assessment

D) functional planning session

24) Most marketers use either a SWOT analysis or a(n) ________ when they need to identify the

best markets to target with a specific product.

A) decision model

B) perceptual map

C) demographic survey

D) strength/attractiveness matrix

25) A marketer who has decided to use the GE/McKinsey Portfolio Planning Grid will most

likely assess segments based on ________ and ________.

A) strength of the firm; long-term market share

B) segment attractiveness; strength of the firm

C) product category; segment attractiveness

D) segment size; competitive advantages

26) Which term refers to the loss of focus on the target segment in favor of other segments?

A) repositioning

B) segment shift

C) target drift

D) straddling

27) Targeting more than one segment with a single marketing mix is known as ________.

A) straddling

B) target drift

C) positioning

D) segmenting
28) What is the most likely result of straddling?

A) strong brand equity

B) long-term marketing failure

C) short-term marketing failure

D) highly effective brand positioning

29) Deploying the marketing mix to claim a unique, valued, and defensible position in the

marketplace is known as ________.

A) targeting

B) segmenting

C) positioning

D) differentiating

30) A product's position is based on important attributes as perceived by ________.

A) global markets

B) competitors

C) consumers

D) employees

Chapter 5: Implementation

1) The primary goal of positioning is to ________.

A) choose the strongest marketing mix

B) communicate product attributes

C) shape customers' perceptions

D) determine customers' needs

2) During the ________ stage, a marketer implements a marketing strategy into specific brand-

building marketing mix elements.

A) positioning

B) targeting

C) segmenting

D) promoting

3) ________ is the process of collecting, analyzing, and interpreting data about customers,

competitors, and the business environment to improve marketing effectiveness.

A) Marketing management

B) Marketing research

C) Strategic management

D) Internal marketing

4) A Customer Relationship Management system would most likely be used by a marketer to ________.

A) assess competitors' clients

B) pretest advertising campaigns

C) identify niche segments

D) customize product offerings

5) Customer-oriented metrics would most likely be used to ________.

A) collect data on customer satisfaction

B) identify customer needs and demands

C) link customer needs with core competencies

D) direct marketing efforts towards global segments

6) John, a marketer, has defined the market research objective. What should his next step be in the
marketing research process?

A) analyze market-oriented metrics

B) develop a research plan

C) write a research report

D) collect information

7) Which of the following is a true statement about the marketing research process?

A) A research plan should be determined before the problem is defined.

B) Data must be collected before the research plan can be designed.

C) The last step is analyzing and interpreting the data.

D) The first step is specifying the research problem.

8) Marketers would most likely use ________ research to come up with ideas for new strategies and
opportunities or to generate specific issues for future research.

A) causal

B) exploratory

C) descriptive

D) experimental

9) Marketers would most likely use ________ to determine if a change in price is responsible for

a change in sales.

A) causal research

B) demographic studies

C) exploratory research

D) predictive techniques
10) Which type of research design would most likely be used to characterize specific customers

with regard to their behaviors and preferences?

A) causal research

B) exploratory research

C) descriptive research

D) experiential research

11) Data that has been collected for some other purpose than to answer the question at hand is called
________.

A) quantitative data

B) demographic data

C) secondary data

D) primary data

12) A ________ is a name, term, sign, symbol, design, or a combination of these, that identifies the
maker or seller of a product or service.

A) brand

B) segment

C) label

D) package
13) Superior Auto Sales, a chain of high-end used car dealerships, wants to sum up its company

positioning and value proposition in a formal statement to serve as a guide for marketing

communication development. Superior's management would use a ________.

A) vision statement

B) mission statement

C) corporate statement

D) brand position statement

14) Which term refers to a group of marketing variables a business controls with the intent of

claiming a place in customers' minds?

A) segments

B) marketing mix

C) product platform

D) position statement

15) Product, price, place, promotion, and people are known as the "five Ps" of the ________.

A) marketing mix

B) targeting method

C) balance sheet approach

D) strategic business model

16) Cadillac's portfolio consists of sedans, a crossover, a sport utility vehicle, and a high-

performance version of the sedan. The sedans are sold through the Cadillac dealer network, but

the high-performance version is sold in limited volumes and is not available at all dealerships.

This difference in availability is an example of how the products within the Cadillac portfolio are

differentiated by the ________ element of the marketing mix.

A) price

B) place

C) people

D) promotion

17) To attract a target audience of 25-to 35-year-olds, Godiva began running advertisements that

resembled fashion advertisements. Godiva also began purchasing ad space in Vogue and Vanity

Fair. In doing so, Godiva altered the ________ element of its marketing-mix strategy.

A) place

B) price

C) product

D) promotion

18) A marketer analyzing whether members of the target audience like the services offered by a

firm is analyzing the ________ element of the marketing mix.

A) place

B) price

C) product

D) promotion
19) Which of the following questions most closely involves analysis of the product element of the
marketing mix?

A) What do competing firms charge for similar products?

B) Will wholesale, retail, or direct-to-consumer channels be used?

C) What is the target's level of awareness for each competitive brand?

D) Are there any foreseeable changes in the requirements of the target?

20) In which phase of the product life cycle would promotion needs be high and product distributions be
limited?

A) decline

B) growth

C) maturity

(Text Box comment product life cycle)

D) introduction

21) In the product hierarchy, which level would most likely generate positive word-of-mouth and
customer loyalty?

A) augmented product

B) potential product

C) expected product

D) core product

22) ________ occurs when a product's attributes that were once new become widespread among all
products in a market.

A) Commoditization

B) Protectionism

C) Exploitation

D) Expansion
23) A(n)________ strategy involves using a common technology for multiple products in a product line.

A) price lining

B) brand extension

C) product platform

D) augmented product

24) The growth-market share matrix developed by the Boston Consulting Group (BCG) is a type of
________.

A) value chain

B) SWOT analysis

C) portfolio analysis

D) compatibility assessment

25) According to the BCG growth-market share matrix, ________ are strategic business units with
products that have a dominant market share in a high-growth market.

A) stars

B) dogs

C) cash cows

D) question marks

26) According to the BCG growth-market share matrix, ________ are strategic business units with
products that have low market shares in fast-growth markets.

A) question marks

B) cash cows

C) dogs

D) stars
27) Based on the BCG Matrix, a product in a ________ market position typically generates

enough cash to fund other investments.

A) high share/high growth

B) high share/low growth

C) low share/high growth

(Text Box comment BCG Matrix)

D) low share/low growth

28) A marketer would most likely use the BCG Matrix or GE/McKinsey Portfolio Planning Grid

to make decisions about ________.

A) media concepts

B) new product ideas

C) resource allocations

D) distribution channels

29) Which of the following is a limitation of the BCG matrix?

A) It does not help managers determine which SBUs should be dropped from a portfolio.

B) It does not help managers determine which SBUs need investment to grow.

C) It does not tell managers the best ways to create growth.

D) It cannot be used by corporations with multiple SBUs.

30) During the new product development process, gathering consumer insights is LEAST

important during the ________ stage.

A) testing

B) development

C) commercialization

D) business evaluation
31) According to Peter Drucker, marketing and ________ lead to positive results for a firm.

A) product innovation

B) budgetary forecasts

C) localized distribution

D) modern technology

32) A marketer who only promotes a product by advertising in national magazines is using a

________.

A) word-of-mouth network

B) marketing mix

C) push strategy

D) pull strategy

33) Which term refers to the stage in sales growth when sales revenues are equal to expenses?

A) breakeven point

B) product position

C) short term margin

D) consumer price point

34) What is the first step in the consultative selling process?

A) presenting product benefits to a customer

B) determining the customer's problem

C) offering trial services to customers

D) pursuing long-term customers

Chapter 6: Planning, Assessment, and Adjustment

1) A sound marketing plan should do all of the following EXCEPT ________.

A) outline potential risks

B) segment niche consumers

C) set measurable objectives

D) establish financial budgets

2) Which of the following is typically used in small firms to direct marketing activities, set

expectations, and budget resources?

A) marketing plan

B) marketing metric

C) situation assessment

D) strategic planning matrix

3) A(n) ________ is a document that describes the marketing environment, outlines the

marketing objectives and strategies, and identifies how the company will implement and control

those strategies.

A) communications plan

B) operational plan

C) marketing plan

D) financial plan

4) ________ is the managerial decision process that matches the organization's resources and

capabilities to its market opportunities for long-term growth.

A) Operational planning
B) Strategic planning

C) Portfolio analysis

D) SWOT analysis

5) According to the text, what should immediately follow the executive summary of a marketing

plan?

A) corporate mission statement

B) financial and profit model

C) marketing mix outline

D) situation assessment

6) According to the generic marketing plan presented in the text, which of the following would

NOT be included in the projections section?

A) risks

B) budgets

C) weaknesses

D) profit models

7) Which term refers to different events and changes that could affect the marketing strategy

both externally and internally?

A) possible futures

B) pro forma goals

C) budget projections

D) potential valuations
8) The primary purpose for using an impact/likelihood matrix is to ________.

A) assess external strengths

B) compile budget details

C) gather opinion

D) evaluate risk

9) Which of the following is a true statement about the cereal industry?

A) The majority of all new cereals succeed soon after market introduction.

B) Many cereal firms launch products without conducting market research.

C) Market research significantly reduces the failure rate for new cereal products.

D) Launching new cereals without conducting research is too costly for most firms.

10) Which of the following is a true statement about forecasts, budgets and marketing mix plans?

A) They should be developed independently.

B) They should be developed with a BCG Matrix.

C) They should be developed simultaneously.

D) They should be developed with a SWOT analysis.

11) Which of the following would LEAST likely be used to forecast future sales of a product?

A) market interval scales

B) sales force estimates

C) expert opinions

D) market tests
12) According to ________, a dependent variable can be predicted by multiple independent

variables.

A) optimization analysis

B) CRM indicators

C) regression logic

D) data analytics

13) Regression analysis is primarily used by marketers to ________.

A) evaluate strengths

B) develop sales forecasts

C) assess competitors' brands

D) manage the marketing mix

14) A ________ would most likely be used by a marketer to improve the accuracy of a sales

forecast.

A) consumer group

B) financial metric

C) product platform

D) staircase analysis

15) All of the following factors would most likely be evaluated in a staircase analysis EXCEPT

________.

A) potential market

B) brand awareness

C) marketing mix

D) purchase rate
16) A staircase analysis helps marketers with sales forecasts by ________.

A) separating the components that affect sales

B) analyzing budgets for the marketing mix

C) evaluating effective sales tactics

D) segmenting target markets

17) Which element of a marketing plan allocates financial resources across activities?

A) competitive advantages

B) situation assessment

C) value chain

D) budget

18) In a marketing plan, modifications made to budgets and objectives are typically based on

________.

A) promotions

B) forecasts

C) segments

D) strengths

19) Which of the following is NOT a budgeting factor?

A) time frame

B) objectives

C) promotion

D) allocations
20) ________ would most likely be used by a marketing manager who needs to determine ROMI

coefficients.

A) Diversification strategy

B) Regression analysis

C) SWOT analysis

D) Data mining

21) ________ is the impact on business performance resulting from the implementation of

specific marketing activities.

A) Return on marketing investment

B) Marketing accountability

C) Situation assessment

D) Brand health

22) Marketing budgets that are ________ enable strategic planners to make assessments and

adjustments.

A) minimally regressive

B) broadly universal

C) somewhat indefinite

D) highly categorized

23) Effective marketing objectives should be all of the following EXCEPT ________.

A) specific

B) relevant

C) aspirational

D) time-specific
24) Which of the following is NOT a common type of marketing strategy?

A) sales objective

B) value objective

C) profit objective

D) customer objective

25) Which of the following is LEAST likely to help a firm manage marketing accountability?

A) CRM software

B) interval scales

C) forecasting

D) planning

26) Which of the following is used by firms to collect data about customer responses to the

marketing mix?

A) SWOT analysis

B) CRM system

C) BCG matrix

D) ROMI tool

27) When a firm decides to measure its marketing plan, the firm is necessarily also committing

to which of the following?

A) purchasing an interactive CRM software program

B) implementing a marketing activity report card system

C) relating marketing activities to specific marketing objectives

D) shifting from a customer relationship model to a transactional model

28) Customer satisfaction surveys, secret-shopper reports, and return on marketing investment

models are all examples of ________.

A) balanced report card categories

B) marketing measurement tools

C) brand awareness assessments

D) advertising score cards

29) All of the following are indicators of how well customers are responding to their experiences

with a firm and its products EXCEPT ________.

A) repeat-purchase intention

B) intention-to-recommend

C) customer satisfaction

D) brand personality

30) According to research by Frederick Reichheld, which of the following post-consumption

questions is the most predictive of future consumer behaviors?

A) How likely is it that you would recommend [company X] to a friend or colleague?

B) How strongly do you agree that [company X] deserves your loyalty?

C) How likely is it that you will continue to purchase products from [company X]?

D) How strongly do you agree that [company X] sells quality products?

31) According Frederick Reichheld, the Net Promoter Index is a strong indicator of ________.

A) consumer acquisition costs

B) future corporate growth

C) portfolio expansion

D) core competencies
Note 1: Market Definition
1) A product's market defines all of the following factors EXCEPT ________.

A) competitors

B) market share

C) marketing mix

D) potential substitutes

2) Defining a market too narrowly will most likely result in a(n) ________.

A) high market share

B) lengthy product life cycle

C) invalid customer assessment

D) excessive number of competitors

3) Analyzing substitute products with similar attributes that customers consider during the buying
decision is a method of defining a market using a ________.

A) generic competition method

B) product attribution method

C) demand-side perspective

D) supply-side perspective

4) Defining a market primarily depends on the ________ that customers seek and the ________ that
customers consider.

A) benefits; alternatives

B) brands; products

C) markets; benefits

D) products; prices
5) A ________ is an item within a product type that is distinguishable by individual product attributes
that serve specific needs.

A) niche

B) sector

C) variant

D) segment

6) The ________ level of competition is typically viewed as the industry by marketing managers.

A) product type

B) generic competition

C) product category

D) budget competition

7) What is the lowest level of competition?

A) generic competition

B) budget competition

C) product category

D) product variant

8) Gatorade, Coca-Cola, Red Bull, and Tropicana would most likely be competitors in which level of
substitution?

A) product type

B) product variant

C) product category

D) budget competition
9) Which of the following factors about a competitor is LEAST relevant when using a supply-

side approach to market definition?

A) production costs

B) customer insights

C) distribution channels

D) manufacturing processes

10) A marketer collects data from store cash registers to determine whether two products are

substitutes for each other. The marketer measures the sales decline of one product after the price

of the second product is reduced. Which of the following is the marketer most likely using to

define the market?

A) cross-elasticity data

B) customer insight data

C) brand-switching data

D) managerial judgment data

Note 2: Context: PEST Analysis

1) A PEST analysis is most useful when a marketer needs to ________.

A) develop appropriate marketing objectives

B) analyze a firm's marketing portfolio

C) categorize a business environment

D) implement a new marketing mix

2) Economic communities, which are also known as ________, have developed as a result of political
changes in the last half-century.

A) free trade zones

B) open market channels

C) international entities

D) productivity communities

3) By considering technical, economic, sociocultural, and political factors, a firm is most likely able to
________.

A) identify inadequate marketing mix elements

B) monitor changing marketing objectives

C) simplify a value delivery network

D) determine a market's potential

4) Which of the following is a political factor that a company should consider before deciding to enter an
international market?

A) business norms

B) trade regulations

C) industrial infrastructure

D) population size and growth

5) Extensive customization of a product offered in different international markets would most likely
defeat which of the following benefits of global trade?

A) lower labor costs

B) lower production costs

C) higher quality materials

D) higher consumer consumption

6) The ________ environment consists of factors that affect consumer purchase ability and buying
behavior.

A) social

B) political

C) economic

D) technological

7) Which type of company would most likely experience countercyclical sales?

A) auto parts retailer

B) boat manufacturer

C) furniture retailer

D) pharmaceutical manufacturer

8) Your marketing department is currently researching the values, attitudes, and norms of your target
market. Which environment is being researched?

A) competitive

B) economic

C) political

D) social

9) Since the introduction of the iPhone, a booming market for smartphone applications has emerged. It
is most accurate to say that this new opportunity was created through changes in the ________
environment.

A) political and legal

B) technological

C) sociocultural

D) economic
10) A firm with a ________ strategy would most likely emphasize standardization over adaptation.

A) multinational

B) marketing

C) contextual

D) global

Note 3: Customer Assessment -Trends and Insights

1) All of the following would most likely be identified through customer assessment EXCEPT ________.

A) customer insights

B) customer segments

C) trends in customer needs

D) trends in customer demands

2) Which term refers to the broad, wide-ranging, and exploratory scrutiny of customers and their needs?

A) customer assessment

B) customer positioning

C) customer-oriented metrics

D) customer relationship management

3) Which of the following is a true statement about trends?

A) They are short-term shifts based on popular culture.

B) They represent significant market opportunities.

C) They are based only on demographic statistics.

D) They cannot be quantified for marketing purposes.

4) Curve fitting methods are most likely popular with managers and forecasters because such

methods ________.

A) require few data points

B) predict dependent variables

C) focus on demographic elements

D) rely on customer quality reports

5) ________ identifies the relationships between variables that predict or cause some target

variable.

A) Judgment-based forecasting

B) Trend extrapolation

C) Regression analysis

D) Curve fitting

6) The process through which analysts sift through massive amounts of available information to

identify unique patterns of behavior among different customer groups is called ________.

A) data warehousing

B) causal modeling

C) data mining

D) futuring

7) Futuring relies on the idea that the future is ________.

A) uncertain

B) predictable

C) quantitative

D) similar to the past

8) What is the first step to finding new markets?

A) mining market data

B) evaluating cultural fads

C) creating a marketing mix

D) identifying customer insights

9) Which term refers to the series of activities involved in extracting value from a product or

service?

A) situation assessment

B) trend extrapolation

C) customer value chain

D) cross-impact matrix

10) What two parties interact in the total immersion method?

A) customers and executives

B) employees and customers

C) customers and researchers

D) researchers and executives

11) ________ is a time-consuming customer insight method that generates qualitative data that is
difficult to manage and generalize to larger populations.

A) Total immersion

B) Depth interviews

C) Sentence completion

D) Ethnographic research
12) Moen used the ________ research method when the firm interviewed participants about their
shower experiences and observed participants taking showers.

A) projective

B) laddering

C) ethnographic

D) total immersion

13) Which of the following is NOT a common characteristic of a lead user?

A) They have ideas for solving product issues.

B) They share product ideas through netnography.

C) They realize product needs before the mass market.

D) They believe strongly in the products they help develop.

Note 4: Consumer and Organizational Buyer Behavior

1) The buyer decision process consists of five stages. Which of the following is NOT one of these stages?

A) post-purchase processes

B) consumption awareness

C) information search

D) need recognition

2) In the hierarchy of effects model, ________ is the first stage of the process..

A) need recognition

B) evaluation

C) interest

D) unaware
3) Knowing where customers are in the decision-making process most likely helps marketers to
________.

A) develop effective distribution strategies

B) improve quality control methods

C) reduce post-purchase dissonance

D) provide alternative solutions

4) According to Maslow, ________ can be arranged in a hierarchy.

A) decisions

B) human needs

C) consumer perceptions

D) interpersonal attitudes

5) Consumer demand for a product derives from a combination of ________ and ________.

A) needs; wants

B) ability; beliefs

C) wants; ability

D) needs; benefits

6) During the information search stage of the consumer decision-making process, consumers often turn
to marketer-controlled sources, such as product Websites and brochures. Which of the following is a
problem associated with these sources of information?

A) increasing clutter

B) increasing complexity

C) increasing regulatory laws

D) increasing development costs

7) An attitude is best defined as a(n) ________.

A) internal state that drives us to satisfy needs

B) lasting evaluation of a person, object, or issue

C) change in behavior caused by information or experience

D) set of psychological characteristics that consistently influence a person's responses

8) The FCB Matrix organizes products by ________ and ________.

A) business sales; consumer sales

B) brand alternatives; customer values

C) involvement level; purchase motivation

D) relative performance; post-purchase attitude

9) Consumers often rely on decision guidelines, or mental rules-of-thumb, when weighing the

merits of competing brands. These rules are referred to as ________.

A) affects

B) attitudes

C) heuristics

D) cognitions

10) Customer satisfaction with a purchase is based on how the ________.

A) product's final cost aligns with the customer's perceptions

B) product's brand personality aligns with the customer's attitude

C) perceived risk of purchasing a product compares to the customer's risk

D) actual performance of a product compares to the customer's expectations

11) Business-to-business marketing differs from consumer marketing in that business-tobusiness

marketing ________.

A) typically involves competitive bidding and price negotiations

B) usually has one person involved in purchase decisions

C) heavily emphasizes advertising in the marketing mix

D) relies upon frequent impulse purchases

12) The first step in the personal selling process is ________.

A) gathering customer insight

B) gaining an order

C) assessing fit

D) prospecting

13) Teams of people in an organization who participate in purchase decisions are known as ________.

A) B2B consumers

B) buying agents

C) buy centers

D) gatekeepers

Note 5: Competitor Analysis -Competitive Intelligence

1) Which of the following is NOT an element of a comprehensive competitor analysis?

A) strategies

B) weaknesses

C) buy centers

D) marketing tactics
2) Conducting a competitor analysis most likely enables firms to ________.

A) construct appropriate strategies

B) develop tactical budgets

C) assess customer needs

D) determine new trends

3) When conducting a competitor analysis, a marketer should first investigate the competitor's
________.

A) marketing mix

B) product offerings

C) long-term objectives

D) customer loyalty ratings

4) When analyzing the strengths and weaknesses of a competitor, a marketer should first ________.

A) identify similarities with the competitor's product

B) determine the success factors in a market

C) predict the competitor's next actions

D) review fluctuations in the market

5) All of the following would most likely provide useful information when assessing the

strengths and weaknesses of a competitor EXCEPT ________.

A) sales force meetings

B) customer surveys

C) press releases

D) analyst reports
6) By analyzing a competitor's ________, a marketer would most likely be able to assess the risk and
cash flow of the competitor.

A) SBU portfolio

B) growth strategy

C) marketing approach

D) customer value chain

7) Which of the following questions would be LEAST relevant to a marketer creating a strategy profile of
a competitor?

A) Does the competitor utilize highly efficient buy centers?

B) Does the competitor use a differentiated marketing approach?

C) Does the competitor use a growth strategy of market penetration?

D) Does the competitor have sufficient cash flow for a growth strategy?

8) Which area of a competitor analysis involves making assessments rather than predictions about the
competition?

A) strengths and weaknesses

B) long-term objectives

C) marketing tactics

D) strategies

9) When assessing the strengths and weaknesses of a competitor, success factors are typically weighted
by ________.

A) importance

B) distribution

C) profit rating

D) expenditure
Note 6: Company Assessment -Missions and Visions
1) The three levels of strategies are ________.

A) managerial, operational, and promotional

B) functional, corporate-level, and tactical

C) business unit, corporate-level, and functional

D) operational, managerial, and business unit

2) Strategic planning for a firm such as Disney with several SBUs probably most likely occurs ________.

A) as needed based upon the success or failure of each division

B) at both the corporate level and the business unit level

C) only at the business unit level

D) only at the corporate level

3) A firm's mission and vision statement should communication all of the following EXCEPT the firm's
________.

A) achievements

B) core values

C) inspiring goals

D) core purpose

4) The ________ of Nike is "to experience the emotion of competition, winning, and crushing
competitors."

A) corporate strategy

B) core purpose

C) visionary goal

D) core values
5) A firm's core purpose statement is typically directed at ________, while a firm's core values are
typically directed at ________.

A) all stakeholders; internal stakeholders

B) internal stakeholders; all stakeholders

C) external stakeholders; all stakeholders

D) internal stakeholders; external stakeholders

6) Respect, simplicity, and togetherness are examples of IKEA's ________.

A) marketing strategy

B) visionary goals

C) core purpose

D) core values

7) "To have any book ever printed, in any language, all available in under 60 seconds.," is the ________
of Amazon Kindle.

A) mission statement

B) visionary goal

C) core purpose

D) core value

8) Including visionary goals and vivid descriptions in vision and mission statements most likely serves the
purpose of ________.

A) stimulating organizational progress

B) guiding employee behavior

C) developing competencies

D) aligning resources
9) Which of the following questions would be most useful for the evaluation of a corporate-level
strategy?

A) Is the marketing mix aligned with the key success factors in the market?

B) Do executives and employees accept and defend the firm's core values?

C) Is the portfolio of business units balanced in terms of cash flow and risk?

D) Does the firm clearly communicate its core ideology to consumers?

10) Which of the following is a true statement about business-level strategies?

A) They should align with the firm's vision, mission, and corporate strategy.

B) They should encompass a longer time frame than the firm's corporate strategy.

C) They should primarily address the firm's cash flow and risk management issues.

D) They should passionately convey the future of the firm as envisioned by its stakeholders.

Note 7: Company Assessment -The Value Chain

1) Which of the following organizes all of the activities a firm performs to bring a product to the market?

A) value chain

B) operating matrix

C) distribution channel

D) situation assessment

2) The primary purpose for conducting a value chain analysis is to ________.

A) identify target markets

B) analyze consumer trends

C) generate a profit margin

D) assess competitor strengths

3) Which of the following is NOT a primary activity of typical value chains?

A) service

B) operations

C) human resources

D) outbound logistics

4) The ________ element of the value chain relates to activities such as receiving and warehousing.

A) outbound logistics

B) inbound logistics

C) procurement

D) infrastructure

5) Which of the following is used to depict the importance of individual value chain activities on a two-
dimensional matrix?

A) integrated analysis

B) dissonance analysis

C) situation assessment

D) strategic priority analysis

6) On a value-chain analysis using an SPA, a firm determines that its performance is low in the area of
operations. Operations is an area of low importance to the firm. Which of the following would be the
best recommendation for the firm?

A) Do not focus additional effort on operations.

B) Focus more effort and resources on operations.

C) Modify the value chain to emphasize operations.

D) Re-evaluate how the firm handles current operations.

7) Firms can create ________ when they are able to perform value chain activities more effectively or
efficiently than their competitors.

A) consumer loyalty

B) core competencies

C) logistical strengths

D) competitive advantage

8) Firm X performs the individual activities of its value chain more efficiently than is competitors. Firm X
most likely has a ________.

A) strategic plan

B) cost advantage

C) core competency

D) differentiation advantage

Note 8: Industry Analysis

1) Which of the following industries has the highest average profitability?

A) hotels

B) airlines

C) soft drinks

D) grocery stores

2) According to Michael E. Porter, all of the following are forces that shape industry competition EXCEPT
the ________.

A) expansion of global markets

B) bargaining power of buyers

C) threat of substitute products

D) rivalry of existing competitors

3) What is the first step of an industry analysis?

A) assessing competitive forces in the industry

B) analyzing future changes in the industry

C) identifying standards of the industry

D) defining the industry

4) Which of the following would most likely characterize a highly competitive industry?

A) high fixed costs

B) high switching costs

C) high marginal costs

D) high industry growth

5) When defining an industry for an industry analysis, which of the following dimensions would

LEAST likely be assessed?

A) customers

B) geographic scope

C) available technology

D) value chain activities

6) ________ is a market entry barrier that exists when a service becomes more valuable as more people
use it.

A) Forward integration

B) Capital requirements

C) Economies of scale

D) Network effects
7) In an industry characterized by ________, customers have significant bargaining power.

A) high switching costs

B) undifferentiated products

C) low concentrations of buyers

D) complex backward integration

8) In the automobile parts industry, products are undifferentiated, so the industry is most likely
characterized by ________.

A) low switching costs

B) patented technologies

C) high capital requirements

D) limited distribution channels

9) In which of the following situations is the bargaining power of suppliers especially strong?

A) Products are highly specialized.

B) Suppliers rely on single customers.

C) Customers have low switching costs.

D) Affordable, substitute products exist.

10) Which of the following factors is LEAST likely to increase a rivalry between existing industry
competitors?

A) high exit barriers

B) high industry growth

C) undifferentiated products

D) numerous competitors of equal size

11) Which of the following would most likely be a useful tool when analyzing future changes in an
industry?

A) strategic priority analysis

B) customer value chain

C) inbound logistics

D) product life cycle

Note 9: The Product Life Cycle

1) The product life cycle framework is most likely used by marketers to describe how ________.

A) products and markets function

B) product ideas are developed

C) product quality is measured

D) product testing is handled

2) In which stage of the product life cycle would an industry most likely experience negative
profitability?

A) growth

B) decline

C) maturity

D) introduction

3) Which of the following would most likely increase competition during the maturity stage of the
product life cycle?

A) differentiation

B) excess capacity

C) commercialization

D) inadequate promotion
4) Which of the following is NOT a characteristic included in Kano's model of customer

satisfaction?

A) delighters

B) must haves

C) reliability functions

D) performance factors

5) During the development and introduction stages of the product life cycle, consumers are

primarily interested in the ________ of a product.

A) performance

B) appearance

C) convenience

D) price

6) Which of the following is LEAST likely to occur during commoditization?

A) Competitive advantages come from cost leadership.

B) Customer loyalty and brand preferences increase.

C) Product differentiation becomes difficult.

D) Competition is mainly based on price.

7) Which of the following would most likely delay commoditization?

A) selling product accessories online

B) developing a new marketing mix

C) upgrading an existing product

D) lowering the price of a product

8) During which stage of the product life cycle, would a marketer most likely rely on word-of mouth
product promotions?

A) growth

B) decline

C) maturity

D) introduction

9) In which stage of the product life cycle would a firm most likely use price promotions and reminder
advertising to encourage customers to replace worn-out items?

A) growth

B) decline

C) maturity

D) introduction

10) Which of the following is an indication that a product is shifting from the growth to the maturity
stage of the product life cycle?

A) increasing product interest

B) decreasing price competition

C) increasing buyer sophistication

D) decreasing number of substitutes

Note 10: Experience Curve Effects on Cost Reduction

1) As manufacturing outputs increase, unit prices decrease. This is called the ________.

A) penetration cost

B) experience curve

C) demand curve

D) skimming price
2) According to the law of experience, unit costs decline by ________ each time cumulative

output ________.

A) one-half; doubles

B) a fixed percent; doubles

C) a varying percent; triples

D) one-third; increases at an equal rate

3) According to the text, which industry would have the greatest reduction in unit costs based on

its experience curve rate?

A) personal computer

B) microprocessor

C) automobile

D) airline

4) An experience curve is primarily dependent on the ________.

A) product life cycle

B) marketing mix

C) industry

D) economy

5) Which of the following is LEAST likely to affect the experience curve?

A) technical progress

B) labor redesign

C) specialization

D) segmentation
6) Which of the following is a true statement about the experience curve and its effects?

A) Unit costs are predictable.

B) Cost reductions are automatic.

C) Unit costs vary with exchange rates.

D) Growth occurs in all manufacturing segments.

7) Computing the experience curve most likely helps a marketer to ________.

A) predict a product's life cycle stage

B) retain loyal business customers

C) develop a pricing strategy

D) improve a mature product

8) The experience curve concept is especially important to firms that pursue a strategy of

________.

A) brand loyalty

B) industry alliance

C) niche marketing

D) cost leadership

Note 11: Economies and Diseconomies of Scale

1) When Company X increases its production volume by 1%, the firm's total cost of production

increases by less than 1%. This is an example of ________.

A) diseconomies of scale

B) economies of scale

C) the supply chain

D) the value chain

2) According to economies of scale, each new unit that a company manufactures is ________.

A) more expensive to produce than the previous unit

B) less expensive to produce than the previous unit

C) less expensive to produce than the next unit

D) as expensive to produce as all other units

3) According to the text, ________ enable Coca-Cola to spend less advertising dollars per case

of soft drinks than Schweppes spends.

A) value chains

B) fixed output costs

C) economies of scale

D) market share strategies

4) Economies of scale will most likely lead to ________.

A) industry domination by a few large firms

B) expansion of international niche markets

C) investment in research and development

D) creation of employee training opportunities

5) All of the following are most likely characteristics of firms with economies of scale EXCEPT ________.

A) technology specialization

B) market segmentation

C) labor specialization

D) purchasing power
6) When Company X increases its production volume by 1%, the firm's total cost of production

increases by more than 1%. This is an example of ________.

A) experience curve effects

B) diseconomies of scale

C) economies of scale

D) inelasticity

7) Diseconomies of scale would most likely occur for all of the following reasons EXCEPT ________.

A) production volume exceeds capacity

B) size of firm too large to manage

C) employees lack motivation

D) technology too specialized

8) Achieving economies of scale is most important to a firm with ________.

A) high research and development costs

B) complicated organizational structures

C) numerous international market segments

D) multiple business-to-business customers

9) Ford and Toyota are most likely able to achieve economies of scale by ________.

A) increasing distribution distances

B) serving global market segments

C) segregating specialized workers

D) exceeding production capacities

10) Which of the following would most likely occur if a firm exceeded its optimal production volume?

A) Unit costs would decrease with each additional unit.

B) Development costs would decrease unit costs.

C) Fixed costs would increase unit costs.

D) Unit costs would equal fixed costs.

Note 12: Economies of Scope/Synergies and Virtuous Circles

1) Company X produces more than one product at its manufacturing facility, which lowers the

firm's overall production costs. This is most likely an example of ________.

A) economies of scale

B) economies of scope

C) market diversification

D) horizontal integration

2) A firm that manufactures ________ would most likely gain an economy of scope.

A) limited quantities of products

B) large numbers of products

C) many different products

D) one type of product

3) ________ occurs when two inputs act together and result in an output that is greater than the

sum of the two inputs taken separately.

A) Synergy

B) Indemnity

C) Reciprocity

D) Productivity
4) Harvey Industries manufactures and sells fine wood furniture. The company uses the sawdust
generated by the production of its furniture products to make particle board. The particle board is then
used in the construction of inexpensive furniture that the firm sells in retail stores, such as

Walmart. Which term best describes how the firm uses sawdust?

A) horizontal brand extension

B) economies of scale

C) by-product synergy

D) product bundling

5) Economies of scope exist when a firm saves money by ________.

A) using a resource in multiple activities

B) assessing the customer value chain

C) merging with a smaller firm

D) selling products globally

6) All of the following are methods for multi-business-unit companies to create economies of scope
EXCEPT ________.

A) sharing intellectual property

B) selling products to niche markets

C) coordinating market entry strategies

D) pooling negotiating powers for bulk discounts

7) How would vertical integration most likely benefit a firm?

A) reducing inventory costs

B) improving customer loyalty

C) enhancing brand awareness

D) facilitating personal selling methods

8) A firm that uses a diversification strategy to sell a new product that is related to its core

business would most likely benefit from ________.

A) economies of scale

B) viral marketing

C) brand recognition

D) price protection

Note 13: Market-Share Effects

1) Which of the following indicates how well a firm is succeeding in comparison to a competitor?

A) value map

B) fixed costs

C) market share

D) experience curve

2) Which of the following is LEAST likely to be associated with the firm that has the higher market share?

A) learning curve effects

B) economies of scale

C) economies of scope

D) higher profitability

3) Which of the following would most likely provide information about the relationships between a
firm's activities, strategies, and results?

A) PIMS data

B) MEP chart

C) BCG matrix

D) SWOT analysis
4) According to PIMS data, a strong correlation exists between ________ and ________.

A) productivity; marketing mix

B) profitability; market share

C) productivity; market share

D) profitability; marketing strategies

5) Research indicates that an increase of ________ percentage point(s) in market share correlates to an
increase of ________ percentage point(s) in profitability.

A) 1; 3

B) 2; 4

C) 3; 1

D) 4; 2

6) According to research, which of the following is LEAST likely to lead to both higher margins and higher
market share for a firm?

A) human resource orientation

B) effective management

C) quality products

D) resource access

7) Market share is best described as a(n) ________.

A) value-adding activity

B) internal-oriented objective

C) customer-oriented activity

D) competitor-oriented objective
8) Including market share as an objective in a business strategy is appropriate in all of the

following cases EXCEPT when ________.

A) customer loyalty is hard to measure

B) industries plan to set standards

C) new entrants need to be barred

D) ancillary sales are anticipated

9) In most cases, market share correlates with a firm's ________.

A) culture

B) profitability

C) ancillary sales

D) marketing mix

10) Based on market share research, which of the following is a true statement?

A) Skillfully managed firms tend to have higher market shares.

B) Better product quality increases customer loyalty but not profitability.

C) Market share has been shown to be the primary cause of a firm's profitability.

D) Internal-based strategies lower performance compared to external-based strategies.

Note 14: Scenario Analysis

1) Which of the following questions would most likely be answered by a scenario analysis?

A) What will the world be like in the future?

B) Who will our competitors be in the future?

C) What should we do now to prepare for the future?

D) What should we do to accurately assess the future?

2) A ________ analysis is described in the text as an "if...then..." planning tool.

A) SWOT

B) scenario

C) marketing

D) forecasting

3) According to the text, it is best to develop ________ scenarios when preparing future strategies.

A) 1-2

B) 3-4

C) 5-6

D) 7-8

4) As a marketer, you have already defined the scope of a scenario analysis. What should you do next?

A) develop comprehensive scenarios

B) choose a specific time frame

C) analyze selected scenarios

D) identify industry drivers

5) Which of the following is the LEAST relevant factor when defining the scope of a scenario analysis?

A) time frame

B) industry

C) consumer

D) market
6) What is the final step in the scenario analysis process?

A) assessing strategic alternatives

B) developing multiple scenarios

C) identifying significant drivers

D) planning for each scenario

7) Factors and forces that influence a firm's future are known as ________.

A) scenarios

B) drivers

C) domains

D) policies

8) Scenario analysis is primarily useful for ________.

A) short-term strategizing

B) internal assessment

C) long-term strategizing

D) economic assessment

9) When developing scenarios for analysis and planning, it is best to choose ________ within

each driver.

A) a single level

B) all possible levels

C) the most likely levels

D) a few different levels

10) The scenario analysis process should result in ________ and ________ for each scenario.

A) drivers; tactics

B) futures; realities

C) strategies; tactics

D) drivers; strategies

Note 15: The Marketing Concept

1) Managerial philosophies that determine corporate priorities and problem-solving methods are
referred to as ________.

A) functions

B) resources

C) orientations

D) benchmarks

2) According to the ________, firms will successfully achieve their goals if they focus on satisfying
consumers' needs.

A) marketing concept

B) progressive sales approach

C) market gain technique

D) executive orientation method

3) A firm with a market orientation most likely coordinates its strategies and activities around ________
and ________.

A) sales; profits

B) market share; quality

C) employees; consumers

D) customers; competitors
4) According to research, all of the following are typical results for firms with a market orientation
EXCEPT ________.

A) natural monopolies

B) stock returns

C) profitability

D) ROI

5) Which of the following firms adhered to a managerial orientation during the early twentieth century?

A) Proctor & Gamble

B) Pillsbury

C) Kellogg's

D) Ford

6) The ________ orientation of the mid-twentieth century led firms to focus on "making

marketable products."

A) sales

B) customer

C) strategic

D) managerial

7) ________ are human needs as shaped by individual personality and culture.

A) Exchanges

B) Values

C) Demands

D) Wants
8) When backed by buying power, wants become ________.

A) demands

B) exchanges

C) social needs

D) self-esteem needs

9) All of the following are accurate descriptions of a market orientation, EXCEPT which one?

A) Marketing creates value for customers.

B) Marketing involves satisfying customers' needs.

C) Marketing requires conducting extensive market research.

D) Marketing involves managing profitable customer relationships.

10) A lonely consumer who is too busy meeting critical needs to think about having a social life

most likely has a(n) ________.

A) motive

B) latent need

C) apparent want

D) unrecognized want

Note 16: What is a Marketing Strategy?

1) Which term refers to the coordinated means by which an organization pursues its goals and
objectives?

A) vision

B) strategy

C) mission

D) code of ethics
2) The primary purpose of a business strategy is to ________.

A) advance the firm's vision and objectives

B) oversee the firm's core competencies

C) establish an international brand

D) eliminate competing companies

3) A marketing strategy primarily describes how a firm will ________.

A) implement a mission statement

B) structure the marketing mix

C) identify core weaknesses

D) compete in a market

4) Effective marketing strategies are most likely consistent with all of the following EXCEPT ________.

A) environmental opportunities

B) long-term visions

C) core competencies

D) internal demands

5) Which of the following tools would most likely be used when determining how a firm will

serve customers and their needs?

A) value chain analysis

B) portfolio analysis

C) pricing matrix

D) client surveys
6) While developing a comprehensive marketing strategy, a firm needs to determine where it will

conduct business. Which tool would be most useful?

A) experience curve matrix

B) product-market growth analysis

C) SWOT analysis

D) Porter's generic strategies

7) A comprehensive marketing strategy should specify what needs the firm will meet in order to

achieve ________.

A) niche market segmentation

B) product customization

C) sustainable differentiation

D) customer consolidation

8) According to the text, marketing strategies should be ________.

A) dynamic

B) trendy

C) creative

D) static

9) Which of the following serves as the center of IKEA's hexagon of strategy?

A) economic model

B) differentiation strategy

C) vision statement

D) core competencies
10) "Where's the pain?" refers to ________, and "Where's the magic?" refers to ________.

A) geographic markets; customer demands

B) target segments; competitive advantages

C) economies of scope; economies of scale

D) core competencies; target markets

Note 17: Generic Strategies -Advantage and Scope

1) Generic marketing strategies are typically categorized along any of the following dimensions

EXCEPT ________.

A) brand loyalty

B) cost leadership

C) competitive scope

D) product differentiation

2) A firm can gain competitive advantage through a marketing strategy of either ________ or

________.

A) product differentiation; globalization

B) curve effects; process innovation

C) cost leadership; differentiation

D) integration; standardization

3) Walmart is an example of a firm that follows a strategy of ________.

A) product differentiation

B) flexible automation

C) brand personality

D) cost leadership
4) For a firm to maintain a position of cost leadership, ________ is critical.

A) market share

B) product innovation

C) brand personality

D) labor specialization

5) Which of the following is a source of differentiation?

A) economies of scale

B) standard design

C) low-cost inputs

D) aesthetics

6) Which of the following is a characteristic associated with a cost leadership strategy?

A) flexible automation

B) stable financial structure

C) unique product qualities

D) new product development

7) A firm that follows a differentiation strategy would most likely have an organizational

structure that is ________.

A) organic

B) centralized

C) hierarchical

D) mechanistic
8) Which type of strategy is used by IKEA?

A) cost leadership

B) differentiation

C) customer focus

D) hybrid

9) The size and breadth of the market that a strategy intends to serve is known as the ________.

A) product leadership scale

B) competitive scope

C) niche category

D) cost focus

10) In which of the following situations is a niche strategy most common and successful?

A) product differentiation and mass market

B) cost leadership and mass market

C) product differentiation and narrow market

D) cost leadership and narrow market

Note 18: Generic Strategies -The Value Map

1) In marketing strategy, ________ refers to the ratio of customer benefits divided by the price

paid for those benefits.

A) market share

B) demand

C) quantity

D) value
2) A product that falls below the fair value zone of a value map is perceived to deliver benefits that are
________ the product's cost.

A) greater than

B) less than

C) equal to

D) unrelated to

3) Which generic strategy would most likely lead to a strong increase in market share and an average
29% ROI?

A) differentiation

B) superior customer value

C) cost leadership

D) inferior customer value

4) A firm that uses a premium strategy differentiates its products in terms of quality or brand image and
________.

A) offers competitive pricing

B) has an average 18% ROI

C) declines in market share

D) charges high prices

5) A firm that uses the economy strategy is more likely to lower its profitability because of

________.

A) price wars

B) brand image

C) value mapping

D) poor distribution methods

6) Which term refers to companies within an industry that pursue similar competitive strategies and are
similar in size, product offerings, and target customers?

A) niche market

B) market share

C) strategic group

D) integrated rival

7) Which type of research generates non-numeric results that provide detailed verbal or visual
information about consumer buying criteria?

A) causal research

B) descriptive research

C) quantitative research

D) qualitative research

8) Which method is the best for assessing product performance?

A) rank order

B) rating scale

C) conjoint analysis

D) constant sum scales

9) A questionnaire asks respondents "to indicate how much weight you put on quality and how much
weight you put on price by dividing 100 points between quality and price." This questionnaire is most
likely using the ________ method.

A) constant sum scale

B) conjoint analysis

C) rating scale

D) rank order

10) The importance-performance-analysis method is most useful during the strategy formulation
process when ________.

A) defining the market

B) assessing competitors

C) defining an action plan

D) estimating price sensitivity

Note 19: Generic Strategies -Product-Market Growth Strategies

1) Market penetration, product development, market development, and diversification are the four
growth strategies defined by the ________.

A) Ansoff matrix

B) Markov model

C) Reilly model

D) BCG matrix

2) Which growth strategy has the highest success rate and requires the lowest amount of resources?

A) diversification

B) market penetration

C) product development

D) market development
3) Bisquick, a General Mills brand, includes numerous recipes on the back of each box of baking

mix. General Mills is most likely using a strategy of ________.

A) product development

B) market development

C) market penetration

D) diversification

4) All of the following are methods used with a market penetration strategy EXCEPT ________.

A) cross selling

B) converting nonbuyers

C) introducing new applications

D) converting competitors' customers

5) A firm would most likely add new product features to generate sales during the ________

stage of the product life cycle.

A) introduction

B) maturity

C) decline

D) growth

6) A firm that implements cross selling as a product development method is most likely focusing

on sales to ________.

A) nonbuyers

B) lost customers

C) existing customers

D) dissatisfied customers
7) A firm that implements a growth strategy of market development will most likely try to ________.

A) cross sell products

B) build brand awareness

C) convert lost customers

D) modify product performance

8) Which growth strategy has the lowest probability of success?

A) diversification

B) market development

C) product development

D) market penetration

9) According to Chris Zook, a firm can reduce the risks associated with any growth strategy by ________.

A) conducting extensive market research

B) eliminating value-chain activities

C) focusing only on B2B customers

D) building from core strengths

10) Which of the following is NOT one of the adjacency paths described by Chris Zook?

A) new businesses

B) new geographies

C) new profit pools

D) new customer segments

Note 20: Specific Marketing Strategies

1) Which of the following is an advantage of the first-mover strategy?

A) limited regulatory involvement

B) access to important resources

C) control over subsidiaries

D) lower start-up costs

2) In many cases, the first mover acts as a ________.

A) monopoly

B) small business

C) global strategist

D) strategic business unit

3) What is a disadvantage of using the follower strategy?

A) Value chains are unclear.

B) The market needs to be educated.

C) Innovation costs and risks are high.

D) The most attractive market position has been taken.

4) A firm using the follower strategy will most likely enter the market with a(n) ________.

A) new product that has never been seen

B) product sold domestically and abroad

C) improved version of an existing product

D) adaptation of an online international product

5) A ________ strategy involves selling domestic products to a foreign market without making

any adaptations.

A) joint venture

B) international

C) multinational

D) transnational

6) Which strategy is characterized by inconsistent brand image, limited subsidiary control, and high
marketing costs?

A) multinational strategy

B) exporting strategy

C) international strategy

D) licensing strategy

7) Company X wants a low risk method for entering the global market that will not require a significant
amount of resources. Which of the following methods would be LEAST appropriate for Company X?

A) exporting

B) licensing

C) joint venture

D) franchising

8) What is the primary disadvantage of a joint venture?

A) lack of local market knowledge

B) imbalanced sharing of risks

C) ineffective standards

D) differences in culture
9) Which offensive strategy involves addressing needs or market segments that a competitor has

neglected?

A) bypass

B) flanking

C) guerilla

D) encirclement

10) With the bypass strategy, a firm ________.

A) uses new technology to overtake a former market leader

B) offers many products to an undeveloped market segment

C) launches many attacks on multiple market segments

D) offers innovative products at competitive prices

11) Which defensive strategy involves diversifying into new products and markets?

A) counteroffensive

B) preemptive

C) position

D) mobile

Note 21: Market Segmentation

1) Your new employer has asked you, as a new marketing graduate, to identify a group of

potential customers who might respond in a similar way to a given set of marketing efforts. You

have been asked to identify a(n) ________.

A) market segment

B) target market

C) market strategy

D) market
2) The first step of the segmentation process is to ________.

A) select the target segments

B) identify segmentation variables

C) develop a profile of individual segments

D) group customers into homogeneous segments

3) Which of the following criteria is it most important that a segment meet in order to be

profitable for a firm?

A) be underserved by competitors

B) be demographically diverse

C) have similar loyalty rates

D) have measurable needs

4) The division of buyers into groups based on lifestyle, class, or personality characteristics is

________ segmentation.

A) psychographic

B) demographic

C) behavioral

D) needs

5) Why have geographic variables become less important in market segmentation?

A) inconsistent findings

B) costly market research

C) increasing market globalization

D) ineffective for business-to-business markets

6) The importance of demographic variables in market segmentation has declined in recent years
because such variables ________.

A) cannot be quantified accurately

B) change as markets become global

C) fail to predict consumer behavior

D) require sophisticated market research methods

7) Which type of segmentation is most related to the use of the word when, such as when consumers
get the idea to buy, when they actually make their purchase, or when they use the purchased item?

A) psychographic

B) demographic

C) geographic

D) behavioral

8) Which of the following is a micro variable used for market segmentation?

A) purchasing approaches

B) personal characteristics

C) operating variables

D) demographics

9) A ________ segmentation focuses on customer desires such as service support, cutting-edge

technology, or financial terms.

A) personal characteristic

B) psychographic

C) benefits-sought

D) mass market
10) A benefits-sought segmentation is based on ________ variables.

A) causal

B) position

C) descriptive

D) heterogeneous

Note 22: Loyalty-Based Marketing, Customer Acquisition, and

Customer Retention

1) Which of the following is a true statement based on the research of Frederick Reichheld?

A) Loyal customers cost more to serve.

B) New customers provide referrals.

C) Loyal customers pay price premiums.

D) New customers buy more products.

2) Individuals who really like a product and recommend the product to others most likely have ________
loyalty.

A) attitudinal

B) demographic

C) behavioral

D) psychographic

3) Which strategic action would be most appropriate for highly profitable, short-term customers?

A) focus on up-and cross-selling

B) attempt to gain attitudinal loyalty

C) try to achieve transactional satisfaction

D) communicate frequently and consistently

4) Items priced at or below costs in order to attract customers are known as ________.

A) market wreckers

B) loss-leaders

C) cross-sellers

D) barnacles

5) What is the recommended strategy for dealing with small wallets?

A) make product alterations

B) improve customer service

C) implement cross-selling

D) lower product costs

6) A firm should make the greatest communication, customer relationship management, and service
investments towards which group of customers?

A) high-loyalty, low profitability

B) high-loyalty, high-profitability

C) low-loyalty; low profitability

D) low-loyalty; high profitability

7) Customer relationship management is primarily used by firms to ________.

A) attract new customers

B) survey profitable customers

C) retain loyal customers

D) target infrequent customers

8) A company's first step in customer relationship management should be to ________.

A) correlate types of transactions

B) collect customer touch point data

C) rank customers by sales volume

D) determine how to customize products

9) Which of the following is a true statement about customer relationship management programs?

A) CRM programs enable firms to tailor new products to individuals customers.

B) CRM programs rely primarily on mass market communication systems.

C) CRM programs benefit consumer marketers more than B2B marketers.

D) CRM programs use demographic data to track customer loyalty.

10) CRM programs enable marketers to ________.

A) compare strategic business units

B) personalize the marketing mix

C) analyze the value chain

D) eliminate loss leaders

Note 23: Customer Lifetime Value

1) Which term refers to the net present value of future cash flows attributed to the customer
relationship?

A) customer loyalty

B) customer retention

C) customer attractiveness

D) customer lifetime value

2) In most cases, a long-term customer relationship is ________ a short-term customer relationship.

A) more profitable than

B) less profitable than

C) as profitable as

D) no different than

3) According to Frederick Reichheld, what is the best indicator for a firm's growth?

A) customer repurchase rates

B) long-term customer retention rate

C) number of customer recommendations

D) ratio of customer profits and marketing costs

4) What is indicated by a net promoter score?

A) customer satisfaction with a product

B) customer attachment to a brand

C) customer lifetime value

D) customer profitability

5) Customer profitability is calculated by analyzing ________ and ________.

A) product marketing costs; customer support costs

B) customer-sustaining costs; production costs

C) costs of goods sold; customer discounts

D) customer costs; customer revenues

6) Which of the following is NOT one of the categories used to analyze customer profitability?

A) customer output-unit-level costs

B) customer lifetime value costs

C) customer batch-level costs

D) customer-sustaining costs

7) All of the following are necessary to calculate the customer lifetime value EXCEPT ________.

A) customer level operating profit per year

B) length of customer relationship

C) economies of scale

D) discount rate

8) Which term refers to the cash flow from new customer relationships through customers' word-of-
mouth?

A) networking potential

B) core business potential

C) learning potential

D) cross-selling potential

9) By analyzing customer lifetime value, a firm can most likely ________ for a specific customer group.

A) implement direct marketing

B) establish marketing strategies

C) evaluate personal selling approaches

D) assess international distribution methods

10) The customer portfolio matrix categorizes customers based on ________ and ________.

A) share-of-wallet; production costs

B) customer loyalty rate; market share

C) market share; customer loyalty rate

D) share-of-wallet; customer attractiveness

Note 24: Competitive Advantages

1) According to the market-based view of strategy development, the success of a firm most likely

depends on ________.

A) organizational resources

B) industry attractiveness

C) employee strengths

D) customer loyalty

2) According to a market-based view of strategy development, the attractiveness of an industry is

determined by all of the following EXCEPT ________.

A) transferable resources of organizations

B) bargaining powers of suppliers

C) rivalries among competitors

D) threats from new entrants

3) A resource-based view of strategy development asserts that a firm's success depends on ________.

A) profitability ratios

B) industry attractiveness

C) industry macro environments

D) sustainable competitive advantages

4) What is the first step of strategy development if a firm follows a resource-based view?

A) targeting profitable market segments

B) analyzing the firm's strengths and weaknesses

C) assessing the company's external environment

D) identifying sustainable competitive advantages

5) Which of the following is NOT a characteristic of a resource that provides a firm with a

sustainable competitive advantage?

A) transferable

B) unique

C) tangible

D) valuable

6) What is the first step in the process of identifying competitive advantages?

A) prioritizing customers' buying criteria

B) comparing the firm to competitors

C) analyzing the firm's value chain

D) assessing customers' loyalties

7) When identifying competitive advantages, comparisons made between a firm and its strongest

competitors should be based on ________.

A) managerial inputs

B) customer opinions

C) industry analysts

D) expert reviews
8) Which of the following is a true statement about competitive advantages?

A) Tangible resources are more important than intangible resources.

B) Tangible resources are more difficult to obtain than intangible resources.

C) Valuable and substitutable resources increase long-term customer loyalty rates.

D) Valuable and rare resources that are easily substituted provide short-term advantages.

9) According to modern strategic management theories, the best competitive advantages are ________.

A) exploitable in other markets

B) based on customer demands

C) research oriented

D) intangible

10) Which of the following best describes a capability that is valuable, rare, transferable, and

easy to imitate?

A) core competence

B) tangible advantage

C) short-term advantage

D) not a competitive advantage

Note 25: SWOT Analysis

1) In terms of a SWOT analysis, a strength is best defined as something that the firm does

________.

A) better than the competition

B) with consistency

C) really well

D) profitably
2) In a SWOT analysis, which of the following would be considered a strength?

A) technological advancements

B) political environment

C) internal resources

D) market trends

3) Which activity should occur regularly to identify opportunities and threats?

A) changing the marketing mix

B) evaluating market segments

C) conducting internal audits

D) reviewing market fads

4) Market segments are best described as ________.

A) stationary

B) flexible

C) latent

D) active

5) Which quadrant of a SWOT analysis matrix should a firm's strategies be based upon?

A) strengths-opportunities

B) strengths-threats

C) weaknesses-opportunities

D) weaknesses-threats
6) Which of the following is the first step in conducting a SWOT analysis?

A) Study the environment for changes in consumer needs.

B) Compare the value chains of the firm and its competitors.

C) Match internal strengths to possible external opportunities.

D) Scan the environment for significant shifts in market segments.

7) When studying the environment for opportunities and threats, it is most important to focus on

________.

A) latent strategies

B) niche markets

C) consumer needs

D) global trends

8) The primary purpose of using a SWOT analysis is to ________.

A) avoid exposure to threats

B) eliminate internal weaknesses

C) change weaknesses into strengths

D) match opportunities and strengths

9) The strengths found in a SWOT analysis are also known as ________.

A) sustainable competitive advantages

B) strategic business units

C) market share opportunities

D) value chain activities

Note 26: Targeting
1) Mass marketers such as Target and Walmart often ignore market segment differences and

target the whole market with one offer. What is this approach to targeting?

A) niche marketing

B) differentiated marketing

C) concentrated marketing

D) undifferentiated marketing

2) A company would most likely adopt an undifferentiated targeting strategy in order to ________.

A) remove the need for clear positioning

B) reduce production and advertising costs

C) more efficiently focus on its CRM strategy

D) compete successfully in a highly competitive market

3) An undifferentiated marketing strategy will most likely be successful if the ________.

A) product or service has wide appeal

B) market has many strong competitors

C) product is sold primarily to businesses

D) market segment demands superior value

4) Which type of marketing approach requires a firm to customize its marketing mix for various

target market segments?

A) specialty marketing

B) concentrated marketing

C) differentiated marketing

D) undifferentiated marketing
5) Which of the following will most likely occur if a firm shifts from an undifferentiated marketing
program to a differentiated marketing program?

A) decreasing organizational complexity

B) increasing benefits of scale

C) decreasing product portfolio

D) increasing per-unit costs

Answer: D

6) Which type of differentiated marketing involves focusing on one market segment with one product?

A) segment specialization

B) selected specialization

C) product specialization

D) full market coverage

7) Fairhaven Foods focuses its product development and marketing strategies on diabetics who

need a sugar-free diet. The firm offers an extensive number of sugar-free cereals, snacks, and

cookies for diabetics. Which marketing approach is the firm most likely using?

A) segment specialization

B) selected specialization

C) product specialization

D) full market coverage

8) A firm that uses a product specialization strategy would most likely ________.

A) focus on one product that is tailored to one market segment

B) develop many products for one market segment

C) focus on one product that is tailored to all market segments

D) develop many products for all market segments

9) What is the first step in the process of selecting a target market?

A) positioning segments in a market portfolio

B) determining competitive superiority

C) searching for competitive advantages

D) evaluating segment attractiveness

10) Target market selection should most likely NOT be based on ________.

A) segment rivalries

B) strategic objectives

C) core competences

D) economies of scope

Note 27: Positioning

1) Which of the following is the placement of a product or service in the minds of targeted customers?

A) segmentation

B) positioning

C) promotion

D) targeting

2) Unserved or underserved markets are referred to as ________.

A) white space

B) niche markets

C) intangible assets

D) target segments
3) Which group ultimately determines a product's position relative to competing products?

A) distributors

B) marketers

C) consumers

D) advertisers

4) What enables a firm to retain a position?

A) differentiating

B) targeting

C) segmenting

D) branding

5) La Quinta sends surveys to customers asking them to rate attributes of the hotel chain from 1to-

5 where "1" means "very unpleasant" and "5" means "very pleasant." Which tool is La Quinta

most likely using for brand positioning?

A) semantic scales

B) perceptual maps

C) customer value maps

D) positioning statements

6) A customer value map enables marketers to track how customers view a product based on ________
and ________.

A) cost; features

B) quality; price

C) attributes; loyalty

D) branding; perception
7) What is the most complex tool for brand positioning?

A) semantic scale

B) customer value map

C) positioning statement

D) multidimensional scaling

8) Which of the following is most likely a true statement about the ideal product?

A) The ideal product may not be offered to consumers.

B) The ideal product is the consumers' favorite on the market.

C) The ideal product generates the highest sales in the market.

D) The ideal product is specified through semantic scaling methods.

9) A ________ should express the unique characteristics of a brand in order to create positive

associations in customers' minds.

A) vision statement

B) mission statement

C) positioning statement

D) differentiation statement

10) All of the following are typically included in position statements EXCEPT the ________.

A) target segment

B) competitors' features

C) unique product features

D) specific product category

Note 28: Customer-Oriented Market Research
1) After conducting customer-oriented market research, a marketer will most likely be able to

perform all of the following activities EXCEPT ________.

A) developing specific marketing programs and tactics

B) assessing and adjusting marketing mix activities

C) quantifying internal strengths and weaknesses

D) segmenting and targeting customers

2) A product that is ________ would be LEAST likely to benefit from market research.

A) highly competitive

B) newly invented

C) expensive

D) imported

3) Which of the following is a benefit associated with conducting market research?

A) low costs

B) risk reduction

C) quick implementation

D) streamlined decision-making

4) According to Kotler and Armstrong, the first step in the market research process involves ________.

A) defining the problem and objective

B) developing the plan for collecting data

C) defining the specific method of analysis

D) determining how results will be implemented

5) According to Alan Andreasen, the market research process should begin by ________.

A) searching for comparable data

B) drafting the eventual report

C) specifying a research plan

D) determining needed data

6) One purpose of ________ research is to gather preliminary information that will help divide a

broad research problem into small problems for subsequent research.

A) causal

B) experimental

C) descriptive

D) exploratory

7) What is the most common form of causal research?

A) questionnaires

B) interviews

C) experiments

D) online surveys

8) ________ is information collected for the purpose of addressing a current research question.

A) Primary data

B) Secondary data

C) Syndicated research

D) Exploratory research
9) Which of the following is NOT a characteristic of primary data?

A) provides the most current information

B) can be customized to research needs

C) involves high financial costs

D) can be obtained quickly

10) ________ research is a process designed to collect a large number of responses using a

standardized questionnaire from which the results can be summarized into numbers for statistical

analysis.

A) Explanatory

B) Quantitative

C) Syndicated

D) Qualitative

11) Data collected through UPC codes at retail stores is most likely ________.

A) syndicated research

B) qualitative research

C) descriptive research

D) causal research

12) Which market analysis method is able to identify the value that different segments place on

different product attributes?

A) scanner data

B) conjoint analysis

C) panel data

D) experiments
Note 29: Brands and Branding
1) Which term refers to nonfuctional elements of a product such as package shape, design, and color?

A) trade dress

B) trademark

C) identity

D) logo

2) A brand is best defined as a product's ________.

A) logo

B) trademark

C) official trade dress

D) commercial identity

3) Brand equity reflects the value that ________ attach to the promise of a brand.

A) producers

B) consumers

C) managers

D) marketers

4) What is the first step in building a brand?

A) brainstorming advertising copy

B) selecting a spokesperson

C) forming a positioning statement

D) searching for sponsorships

5) Brand ________ answers the questions, "What should my brand stand for?"

A) positioning

B) personality

C) architecture

D) symbolism

6) According to the text, which brand building element is the most important?

A) social phenomena

B) product and design

C) promotional methods

D) service and distribution

7) The consumer backlash caused by the introduction of New Coke indicated that the brand equity of
Coca-Cola relied heavily on brand ________.

A) sponsorships

B) communities

C) promotion

D) heritage

8) The popularity of Cadillac's Escalade among well-known athletes and celebrities exemplifies how
brands can be built through ________.

A) social phenomena

B) viral marketing

C) aesthetic features

D) product history
9) Hierarchical models for measuring brand strength enable marketers to ________.

A) determine the financial value of a brand

B) communicate a consistent brand image

C) assess marketing mix investments

D) strengthen brand heritage

10) The total financial benefit that results from owning a brand is quantified through the process of
brand ________.

A) differentiation

B) positioning

C) valuation

D) building

Note 30: Products -New Product Development

1) Which phase of the new product development process specifies the target market and

estimates production costs?

A) prototype and market testing

B) concept development

C) business analysis

D) idea selection

2) Product improvements, product modifications, and original products can all be classified as ________.

A) new products

B) product concepts

C) pioneer products

D) exploratory products
3) New product development begins with ________.

A) business analysis

B) concept testing

C) idea generation

D) test marketing

4) The Kano model is used to generate new product ideas based on ________.

A) market entry strategies

B) portfolio strengths

C) customer needs

D) online surveys

5) Which of the following is a finding that emerged from the Kano model?

A) Performance factors are rarely specified by customers.

B) Excitement factors remain stable throughout the product life cycle.

C) An increase in the quality of basic factors increases customer satisfaction.

D) Performance factors are connected to the explicit needs and desires of customers.

6) Which of the following would best enable a marketer to measure the utility a customer

attaches to a new product's features?

A) Kano model

B) SWOT analysis

C) conjoint analysis

D) virtual reality test

7) What is the greatest challenge during the business analysis phase of new product

development?

A) estimating product demand

B) responding to segment shifts

C) calculating production costs

D) determining the marketing mix

8) Once a new product passes the business analysis test, it moves into which stage of the

development process?

A) product launching

B) prototype testing

C) concept testing

D) mass marketing

9) Modern views of product design assert that the process should be ________.

A) holistic

B) technical

C) aesthetic

D) functional

10) Which of the following is a true statement regarding research and development?

A) R&D investments produce equivalent profits.

B) Research refers to incremental changes in product design.

C) The law of diminishing returns applies to R&D investments.

D) Development refers to basic product explorations undertaken by a firm.

Note 31: Products -Innovations

1) In terms of marketing strategy, an innovation is defined by ________.

A) disruptions in consumer price points

B) changes in consumption patterns

C) technological advancements

D) shifts in market segments

2) The behaviors, knowledge, and equipment needed to use a product are known as ________.

A) consumption patterns

B) process innovations

C) relative qualities

D) adaptive tools

3) Which of the following requires substantial changes in consumption patterns?

A) dynamically discontinuous innovations

B) continuous innovations

C) discontinuous innovations

D) incremental innovations

4) Which tool is most useful for understanding new product innovation in strategic marketing?

A) Kano model

B) product life cycle

C) demographic analysis

D) customer value frontier

5) In a customer value frontier, products in the ________ quadrant would most likely be

considered innovations.

A) southeast

B) southwest

C) northeast

D) northwest

6) The speed at which a truly new product spreads through a market is known as the ________.

A) continuity of innovations

B) diffusion of innovations

C) adoption process

D) branding process

7) What is the first step in the adoption process of an innovation?

A) gaining awareness of a product

B) understanding a product

C) evaluating a product

D) purchasing a product

8) Which adoption segment is most critical to the success or failure of a truly new product?

A) innovators

B) late majority

C) early majority

D) early adopters
9) Two-step communication refers to the process of ________.

A) becoming aware of a product through advertising

B) observing another consumer using a product

C) learning about a product on social networking sites

D) talking to another consumer about a product

10) Which of the following is a true statement about the rate of diffusion?

A) Costly innovations will diffuse more quickly in the market.

B) Highly complex innovations are more quickly adopted by laggards.

C) Customers are more likely to try a product if the price of change is low.

D) News reports about new product innovations are more influential than inter-consumer

communications.

Note 32: Products -Product Portfolios

1) Which of the following questions would LEAST likely be answered by the BCG matrix?

A) How strong is the product in the market?

B) How loyal are customers in the market?

C) How strong is the SBU in the market?

D) How attractive is the market?

2) The BCG matrix uses ________ as the only variable for determining attractiveness.

A) market growth rate

B) product awareness

C) brand loyalty ratios

D) market segment size

3) In the BCG matrix, question marks are characterized by ________ market share and ________ market
growth.

A) low; low

B) high; high

C) high; low

D) low; high

4) In the BCG matrix, cash cows are characterized by ________ market share and ________ market
growth.

A) low; low

B) high; high

C) high; low

D) low; high

5) Which of the following is a true statement about the BCG matrix?

A) Cash cows require no investment.

B) Dogs typically have fluctuating cash flow.

C) Stars require only minimal investment.

D) Question marks typically have negative cash flow.

6) Based on the BCG matrix, which of the following is NOT necessarily a characteristic of a well-managed
portfolio?

A) products in each stage of the product life cycle

B) business units in each quadrant

C) balanced cash flow

D) balanced risk
7) According to the text, the BCG matrix should be used to ________.

A) formulate strategic decisions

B) guide strategic discussions

C) plan the marketing mix

D) generate innovations

8) What is the main difference between the BCG Matrix and the GE/McKinsey Grid?

A) The GE/McKinsey Grid uses a higher number of variables than the BCG Matrix.

B) The BCG Matrix evaluates strategic business units, and the GE/McKinsey Grid does not.

C) The GE/McKinsey Grid relies more heavily on market attractiveness than the BCG Matrix.

D) The BCG Matrix generates more specific strategic guidelines than the GE/McKinsey Grid.

9) When using the GE/McKinsey Grid, the first step is to ________.

A) define and weight business strength markers

B) evaluate each product's market attractiveness

C) define and weigh market attractiveness markers

D) evaluate each SBU's business strength

10) Which of the following is a common marker of market attractiveness?

A) marketing capabilities

B) competitive intensity

C) brand awareness

D) market share
Note 33: Pricing Strategies

1) Price is the only element in the marketing mix that produces ________.

A) variable costs

B) fixed costs

C) revenue

D) stability

2) Product costs set a ________ to a product's price.

A) floor

B) ceiling

C) demand curve

D) break-even cost

3) Which of the following is NOT a type of pricing objective?

A) survival

B) elasticity

C) market skimming

D) product positioning

4) A firm sets high prices for a product innovation and lowers the price as the product moves into

other stages of the product life cycle. The firm is most likely using a pricing strategy of ________.

A) market skimming

B) product positioning

C) market penetration

D) maximum current profit

5) An advertisement for Discount Tire states, "We match all competitors' prices." This is most

likely an example of ________.

A) penetration

B) skimming

C) collusion

D) signaling

6) Which of the following is best for the success of a skimming strategy?

A) high investments in capacity

B) high market-entry barriers

C) high economies of scale

D) high price sensitivity

7) A firm is most likely using a ________ pricing strategy when it introduces a product at a very low price
to gain market share quickly.

A) razorblade

B) skimming

C) penetration

D) survival

8) A marketer would most likely use a penetration pricing strategy to ________.

A) ensure that the firm can increase prices once demand decreases

B) appeal to customers with low price sensitivity

C) gain long-term advantages of scale

D) minimize the risk of substitution

9) A firm has two products that must be used together. The firm sells one of the items at a very low price
and profits from the sale of the second, high margin item. The firm is most likely using the ________
pricing strategy.

A) cross subsidy

B) market skimming

C) product positioning

D) market penetration

10) Car rental agencies charge low prices to customers who book a car months in advance and high
prices to customers who book a car one day in advance. Which tactic is most likely being used by car
rental agencies?

A) complementary pricing

B) yield management

C) prestige pricing

D) market penetration

Note 34: Promotion and People -Integrated Marketing Communications

1) Management of a company that adheres to the principle of integrated marketing

communications is most likely to believe which of the following?

A) The use of multiple marketing delivery methods is advantageous.

B) Long-term relationships with customers are best nurtured through sales promotion.

C) Long-term relationships with customers are best nurtured through public relations.

D) Short-term relationships with customers are more profitable than long-term relationships with

customers.
2) Which of the following has the greatest reach?

A) trade promotions

B) viral marketing

C) personal selling

D) direct marketing

3) A firm that wants to ________ would most likely use a public relations campaign.

A) develop brand awareness

B) establish credibility

C) reach mass markets

D) show vivid images

4) Which of the following is the LEAST controllable element of the communications mix?

A) buzz marketing

B) personal selling

C) direct marketing

D) point-of-purchase sales

5) In order to be the most effective, an integrated marketing communications campaign should

most likely ________.

A) appeal to a niche market

B) divide the media budget equally

C) convey a strong and consistent message

D) implement multiple strategic objectives

6) Which term refers to a marketer's ability to catalogue the members of a target market segment?

A) diverting

B) specificity

C) customization

D) addressability

7) Which of the following is NOT a method used for setting a communications budget?

A) task-based method

B) integrated method

C) percentage-of-sales method

D) competitive-parity method

8) Business-to-consumer companies are more likely to emphasize a ________ promotion

strategy, while business-to-business companies are more likely to emphasize a ________

promotion strategy.

A) pull; push

B) push; pull

C) pulse; continuity

D) continuity; pulse

9) A marketer would most likely use an FCB Grid to ________.

A) identify market segments with unmet needs

B) determine the ROI of a marketing campaign

C) understand consumer motivation

D) evaluate the firm's SBUs

10) In a buying center, the ________ serves as an expert about an aspect of the purchase.

A) gatekeeper

B) influencer

C) buyer

D) user

Note 35: Place -Distribution

1) Which term refers to the process of delivering products and services to customers?

A) logistics

B) distribution

C) channel management

D) supply chain management

2) Which of the following is NOT one of the ways that the Internet has changed distribution

systems?

A) decreasing market transparency

B) reaching new customer segments

C) lowering customer switching costs

D) improving direct marketing effectiveness

3) Which of the following is most likely a facilitating function?

A) making a desired number of products available

B) providing technical support for customers

C) making payments to manufacturers

D) holding products until needed

4) Taking possession and then selling goods is a ________ function.

A) hybrid

B) logistical

C) facilitating

D) transactional

5) Which of the following would a firm most likely hire as a logistics supplier?

A) SKU

B) jobber

C) 3PL

D) middleman

6) According to the text, what is the most important consideration when establishing and

managing distribution channels?

A) market segmentation

B) margin structures

C) brand positioning

D) customer needs

7) An intensive distribution strategy is most suitable for which consumer product category?

A) convenience products

B) innovative products

C) unsought goods

D) luxury items
8) What is the most significant problem associated with a multiple channel distribution system?

A) inadequate distribution intensity

B) unclear channel ownership

C) channel functionality

D) channel conflict

9) Different, complementary functions are delivered to the same customers through different,

parallel channels in a(n) ________ distribution system.

A) multiple-channel

B) independent

C) arms-length

D) hybrid

10) What is the first step in designing a channel strategy?

A) benchmarking the firm's capabilities

B) understanding customer needs

C) assessing channel alternatives

D) evaluating intermediaries

Note 36: Budgets, Forecasts, and Objectives

1) In marketing, a(n) ________ is a specific, desired result tied to a specific time frame.

A) goal

B) mission

C) objective

D) investment
2) The purpose of a market forecast is to estimate future ________.

A) sales in an industry

B) budget constraints

C) sales of a product

D) market share

3) Which sales forecasting method is most appropriate for industrial products?

A) market tests

B) expert opinions

C) customer surveys

D) time-series analyses

4) Which of the following is a disadvantage of using market tests to forecast sales?

A) Sophisticated statistical skills are necessary.

B) A firm's strategy is revealed to its competitors.

C) Experts are difficult to locate, motivate, and train.

D) Resulting data is inherently biased and inconsistent.

5) Which sales forecasting method would be the LEAST expensive option for a firm?

A) market tests

B) expert opinions

C) customer surveys

D) sales force estimates

6) Which method of determining a marketing budget relies primarily on the previous year's budget?

A) extrapolation

B) target costing

C) percentage of profits

D) bottom-up budgeting

7) Which of the following is a semi-fixed marketing cost?

A) marketing research

B) public relations

C) promotions

D) discounts

8) Which complex budgeting method requires a breakdown of all specific marketing expenses?

A) extrapolation

B) target costing

C) percentage of sales

D) bottom-up budgeting

9) A staircase analysis would be most likely used by a marketer to ________.

A) calculate market share

B) modify the marketing mix

C) estimate future sales volume

D) develop communication tools

10) The Net Marketing Contribution framework would most likely be used by a marketer to

________.

A) identify ways to increase profits

B) estimate shifts in market share

C) increase economies of scale

D) calculate marketing costs

Note 37: Staircase Analysis

1) A staircase analysis is a tool used by marketers to ________.

A) develop specific objectives

B) create innovative products

C) assess competitors' strengths

D) analyze strategic business units

2) What does a gap in a staircase analysis most likely represent?

A) misidentified market segments

B) shrinking brand loyalty

C) lost potential sales

D) outdated products

3) What is the most narrow category of a staircase analysis?

A) repeat customers

B) purchase rate

C) satisfied customers

D) cross selling
4) When using a staircase analysis, what is the first question that should be asked?

A) How many customers are completely satisfied?

B) What brand awareness exists in the market?

C) What is the market potential?

D) What is the market share?

5) The ________ consists of all possible buyers with the need and financial resources for a specific
product.

A) segment

B) cross sellers

C) actual market

D) market potential

6) Aided recall and unaided recall are methods for measuring ________.

A) brand loyalty

B) share of wallet

C) brand awareness

D) market potential

7) How should a marketer interpret a big difference between unaided and aided recall in a

staircase analysis?

A) The brand is weak in its product category.

B) Consumers buy the product based on price.

C) The brand is unattractive to many consumers.

D) Consumers wait for promotions to buy the product.

8) Which term refers to the amount of business a firm receives from a customer?

A) purchase rate

B) share of wallet

C) cross buying

D) market share

9) A customer who buys ________ is a cross-buyer.

A) one product when a vendor has discounted prices

B) one product from a vendor on a regular basis

C) multiple products from many vendors

D) multiple products from one vendor

Note 38: Assessment and Adjustment

1) A firm is most likely using ________ when it identifies and corrects a marketing problem in

order to obtain forecasted results.

A) progress control

B) SWOT analysis

C) premise control

D) staircase analysis

2) Which of the following involves testing and questioning the values, assumptions, policies, and

strategies of a specific marketing mix?

A) progress control

B) staircase analysis

C) premise control

D) SWOT analysis
3) What is the broadest level that is analyzed in a premise control?

A) industry

B) competition

C) market segment

D) macro-environment

4) Which type of financial ratio measures whether a firm is able to meet its current financial

obligations?

A) activity ratio

B) liquidity ratio

C) dividend ratio

D) profitability ratio

5) Which type of financial ratio measures the extent that a firm generates value for shareholders?

A) debt ratio

B) activity ratio

C) liquidity ratio

D) dividend ratio

6) A firm's ability to meet all interest payments and fixed-charge obligations would best be

measured with a ________ ratio.

A) debt

B) activity

C) liquidity

D) profitability
7) Which type of financial ratio would be most appropriate for measuring how effectively a firm

uses its plants, equipment, and assets?

A) debt

B) activity

C) liquidity

D) profitability

8) The primary purpose of using marketing metrics is to ________.

A) identify the performance of a business unit

B) correct problems with the marketing strategy

C) determine what factors drive a firm's performance

D) evaluate the assumptions underlying a marketing plan

9) What information would be provided by the following formula?

actual market

market potential

A) market growth

B) customer demand

C) market saturation

D) total sales volume