ABDT2043 FUNDAMENTALS OF MARKETING

TUTORIAL 2

COMPANY & MARKETING STRATEGY:

PARTNERING TO BUILD CUSTOMER RELATIONSHIPS

Multiple-choice questions

1) Which of the following is true of strategic planning in a firm?

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

Strategic planning refers to the process of developing and maintaining a strategic fit
between the organization’s goals and capabilities and its changing marketing
opportunities.

2) The first step in strategic planning is to ________.

A) set objectives and goals
B) develop the business portfolio
C) define the company mission
D) plan marketing strategies
E) identify a problem

FIRST STEPS: defining the company mission

SECOND STEPS: setting company objectives and goals
THIRD STEPS: designing the business portfolio
FOUR STEPS: planning marketing and other functional strategies

3) Paul Pierce is busy working with other managers evaluating the products and
businesses making up their company. Paul is engaged in ________.
A) defining the company's mission statement
B) preparing a business portfolio
C) portfolio analysis
D) marketing planning
E) marketing control

Portfolio analysis is the process by which management evaluates the products and
businesses that make up the company.

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4) Most portfolio analysis methods evaluate SBUs on two dimensions, namely
________ and ________.
A) market share; strength of the SBU's position
B) market or industry growth rate; market or industry attractiveness
C) market or industry attractiveness; strength of the SBU's position
D) market growth rate; profits
E) market penetration; market development

Management first step is to identify the key businesses that make up the company
called strategic business unit (SBUs). Asses the attractiveness of its various SBus.
Decide how much support each, SBU deserves (build, hold, harvest and divest)

5) In the BCG approach, ________ are high-share, high-growth businesses or

products. They need heavy investment to finance rapid growth. When their growth
slows down, they turn into ________.
A) cash cows; stars
B) question marks; dogs
C) stars; question marks
D) stars; cash cows
E) dogs; cash cows

High share and high growth and high products is star. They often need heavy
investment to finance their rapid growth. Slows down turn in to cash cow.

Cash cows – They are low-growth, high-share businesses or products.

6) Which of the following products would the electronics company CypressSound

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

Cash cows – They are low-growth, high-share businesses or products. These

established and successful SBUs need less investment to hold their market share.
Thus, they product a lot of the cash that the company uses to pay its bills
and support other SBUs that need investment.

7) A firm's decision to identify and develop new markets for new products is a
________ strategy.

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 A) market development
B) market differentiation
C) market penetration
D) product development
E) diversification

Company growth through starting up or acquiring businesses outside the company’s

current products and markets.

8) Disney is identifying and developing new markets for its theme parks. Disney is
exploring possibilities for ________.
A) market penetration
B) market development
C) downsizing
D) diversification
E) product development

Downsizing prune, harvest or divest businesses that are unprofitable or that no

longer fit the strategy

9) For Hyundai Corporation, customers who care primarily about the price of a car and
its operating economy make up one ________.
A) market position
B) value network
C) market segment
D) customer extension
E) value chain

Market segmentation is the process of dividing a market into distinct groups of

buyers who have different needs, characteristics, or behaviors, and who
might require separate products or marketing programs.

10) Multinationals like Honda Motor Co. and Wal-Mart stores have designed programs
to work closely with their suppliers to help them reduce their costs and improve
quality. This illustrates the importance of an efficient ________.
A) business model
B) low-cost operator
C) product mix
D) value-delivery network
E) problem-solver

Look beyond its own value chain and into the value chains of its suppliers,
distributors & customers.( Others in the Marketing system)

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

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 A) Price
B) Being a low-cost operator
C) A consistent product mix
D) Marketing strategy
E) Implementing a differentiation strategy

Outlines the broad marketing logic and the specifics of target markets, positioning,
marketing expenditure levels, and strategies for each marketing mix element

12) The process of customer-driven marketing involves ________, ________,

________, and ________.
A) product; price; promotion; adaptation
B) market segmentation; market targeting; differentiation; positioning
C) marketing analysis; planning; implementation; feedback
D) analysis; targeting; implementation; control
E) problem identification; information search; decision; implementation

13) Most companies today enter a new market by serving a ________; if this proves
successful, they ________.
A) single market segment; add segments
B) multitude of segments; add more segments
C) few segments; add more segments
D) niche; differentiate
E) target market; reposition

14) Jill Reno has researched new markets and has decided which segments to enter.
Next she should decide what ________ her company should occupy in those
segments.
A) position
B) place
C) rank
D) rating
E) percentage of space

Positioning is arranging for a product to occupy a clear, distinctive and desirable

place relative to competing products in the minds of target customers.

15) Effective positioning begins with ________ the company's marketing offer in order
to give consumers more perceived value.
A) pricing
B) aligning
C) differentiating
D) promoting
E) placing

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 Differentiation – Actually differentiating the market offering to create superior
customer value.

16) In the four Ps of the marketing mix, design, packaging, services, and variety all fall
under the category of ________.
A) product
B) price
C) promotion
D) place
E) position

Product – variety, quality, design, features, brand name, packaging, services.

17) In a SWOT analysis, which of the following would be considered a strength?

A) internal limitations
B) trends in the market
C) favorable factors in the environment
D) factors that challenge the company's performance
E) internal resources

Internal capabilities that may help a company reach its objectives

18) Under the ________ organizational format of marketing departments, different

marketing activities are headed by a specialist such as a sales manager, advertising
manager, marketing research manager, or customer-service manager.
A) geographic
B) product management
C) market management
D) customer-centered
E) functional

19) Modern marketing departments are arranged in all of the following ways, EXCEPT
which one?
A) functional organization
B) market management organization
C) product management organization
D) geographic organization
E) strategic management organization

Functional, geographic, product management, market, customer management

20) Evaluating the results of marketing strategies and plans and taking corrective action
to ensure that objectives are attained is called ________.
A) marketing control
B) strategic control
C) operating control

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 D) developmental control
E) efficiency

Marketing control is evaluating the results of marketing strategies and plans

and taking corrective action to ensure that objectives are attained.

True/False questions

21) Targeting refer to consumer who respond in different ways to a given set of
marketing efforts.
(T/F)

22) "At CL Online, we create customer connectivity, anytime, anywhere" is a product-

oriented mission statement.
(T/F) is market oriented

23) When designing business portfolios, most companies are well advised to add a
broad range of products and businesses to their organization.
(T/F)

24) An organization's mission statement should emphasize its intentions toward

customers and the customer experience the organization seeks to create.
(T/F)

25) The image of a product in the minds of consumers is called market segmentation.
(T/F) positioning Positioning is arranging for a product to occupy a clear,
distinctive and desirable place relative to competing products in the minds of target
customers.

Essay questions

26) Describe a device that a firm could use to identify future growth opportunities.

Product or market expansion grid is a tool for identifying company growth

opportunities. There are four types of product or market expansion grid which is
market penetration, market development, product development and diversification.
Market penetration is existing products with existing markets. Market penetration
refers to company growth by increasing sales of current products to current market
segments without changing the product. Next, market development is existing
products with new markets. Market development refers to company growth by
identifying and developing new market segments for current company products.
Third, product development is new products with existing markets. Product
development refers to company growth by offering modified or new products to
current market segments. Lastly, diversification is new products with new markets.
Diversification refers to company growth through starting up or acquiring

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 businesses outside the company’s current products and markets.

27) According to the Boston Consulting Group approach, how can a company classify
its SBUs on a growth-share matrix?

A company can classify its SBUs on a growth-share matrix through analyzing the current
business portfolio. There are four categories of The Boston Consulting Group
Approach , which is stars, cash cows, question marks and dogs. First, starts are
high-growth, high-share business or products. They spent necessary investment and
heavy investments to finance their rapid growth. If their growth become slow down,
they will turn into cash cows. Second, cash cows are low-growth, high-share
businesses or products. They just need less investment to hold their market share.
Thus, they have a lot of cash to pay the bills and support other SBUs that need
investment. Third, question marks are low-share business units in high-growth
markets. They require a lot of cash to hold their share, let alone increase it.
Management need to think about which should try to build into stars or which
should be phased out. The last one is dogs, which are low-growth, low-share
businesses and products. They may generate enough cash to maintain themselves
but not to promise to be large sources of cash.

Group Discussion

Rolex: Building Brand Equity through a Customer-driven Marketing Mix

Refer to http://www.rolex.com and

https://www.youtube.com/user/WorldOfRolex/featured

1) How Rolex has set and maintained its position in the market through the marketing
strategies?

2) What is Rolex really selling? What are customers really buying?

Rolex sells a lot more than just watches; they are buying a brand experience. Rolex is
known for their expertise on their watch making. Generally, Rolex belongs to the
luxury brand that is known for their achievement in making watching.

Brand Rolex is focused primarily on the wealthy consumers. Rolex is a watch for masters
of life, and everybody know about it: and those who may at any time purchase any
creation of Rolex wizards, and those who are just dreaming about their first Rolex. Rolex
– is synonymous with wealth, success and influence. Rolex watch fans want to announce
to the world their status and wealth. Generally, Rolex are selling their brand as Rolex
belongs to the luxury brand that and customers are buying Rolex for their brand.

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 3) If you worked as Rolex’s operations manager, financial analyst, IT specialist, or
human resources manager, why would it be important for you to understand Rolex’s
marketing strategy?

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