Student name:__________

TRUE/FALSE - Write 'T' if the statement is true and 'F'

if the statement is false.
1) Amazon is able to achieve operational excellence
because it not only has the technology to coordinate personal
buyers, it also has an effective HR hiring program that selects
and trains the best employees.

⊚ true
⊚ false

2) To build a sustainable competitive advantage,

companies should focus on a single strategy.

⊚ true
⊚ false

3) Establishing a sustainable competitive advantage is the

key to long-term financial performance.

⊚ true
⊚ false

4) It is not always necessary to go through all the steps in

the marketing planning process.

⊚ true
⊚ false

5) A mission statement describes the specific actions a

firm will take to achieve its goals.

⊚ true
⊚ false

Version 1 1
6) The step during which marketers segment the market,
target those market segments, and position products is known
as the control phase.

⊚ true
⊚ false

7) Kaiko’s Place is a surfer-themed restaurant chain in

Hawaii. Most of its customers are tourists. In a SWOT
analysis for Kaiko’s Place, the possibility that the recession
might cut back on tourism in Hawaii would be considered a
weakness.

⊚ true
⊚ false

8) Firms use segmentation, targeting, and promotion to

choose the consumer groups they wish to pursue with its
marketing efforts.

⊚ true
⊚ false

9) Value-based marketing requires that firms charge a

price that customers perceive as giving them a good value for
the product they receive.

⊚ true
⊚ false

10) Miles manages the electrical turbine engine division of

General Electric Corporation. He makes most decisions
independently, without consulting headquarters. Miles
manages a strategic business unit.

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 ⊚ true ⊚ false

11) The strategic planning process always proceeds

sequentially.

⊚ true
⊚ false

12) SanDisk's MP3 player product line (called the Sansa)

has a low relative market share. The MP3 player market is
expected to decline over the next few years. In Boston
Consulting Group (BCG) portfolio analysis, the Sansa would
be considered a dog.

⊚ true
⊚ false

13) Within portfolio analysis, a star represents a high-

growth market with high market share products.

⊚ true
⊚ false

14) Corinne works for an online movie streaming pursuing a market

company. Her task is to find ways to push out the company’s development strategy.
current movie offerings to countries in Europe. She is

⊚ true
⊚ false

15) Product penetration is one of the four major growth

strategies.

⊚ true
⊚ false

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MULTIPLE CHOICE - Choose the one alternative that
best completes the statement or answers the question.
16) If a firm wants to develop a sustainable competitive
advantage, it should

its competitors.
A) begin an aggressive campaign to buy up E) arrange to meet
competitors. with competitors to discuss
B) copy the innovative features of other firms that are how to avoid direct
attractive to customers. competition.
C) examine its operations and customer relations to
identify significant things competitors cannot easily copy.
D) increase its marketing budget so that it outspends

17) Niro Music Source Inc. is considered the best in the demonstrate to achieve a
industry in terms of human resource management and its sustainable competitive
excellent supply chain that assures the company will deliver advantage?
products on time. Which macro strategy does this company

E) planning
A) locational excellence excellence
B) customer excellence
C) operational excellence
D) product excellence

18) When Kennedy arrived in the middle of the night at since. Ritz-Carlton
the Ritz-Carlton, she was exhausted and her suit was wrinkled demonstrated the macro
from her 10-hour plane trip. The night clerk found someone to strategy of
dry clean Kennedy’s suit and have it ready for her morning
presentation. She has been a loyal Ritz-Carlton customer ever

E) global
A) customer excellence. excellence.
B) operational excellence.
C) product excellence.
D) promotional excellence.

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19) When Molly and her family visited Disney World last She was very impressed.
month, she was amazed that every staff member she talked to Which type of excellence
was able to answer her question regardless of whether it was does this represent?
about a hotel, restaurant, parade time, or fireworks display.

D) product
A) operational E) service
B) locational
C) customer

20) Some banks offer special accounts designed to attract become adult customers.
junior high school students. Savings in these accounts are These banks recognize
generally small amounts, which cost banks more to maintain
than they are worth; however, bankers know that consumers
are creatures of habit and hope that these young people will

term results.
A) that operational excellence is an important macro E) that if customers
strategy. bring in some revenue,
B) the lifetime value of customers. costs do not matter.
C) that product excellence leads to loyal customers.
D) the importance of making decisions based on short-

21) Nordstrom, an upscale department store, has a well-

known reputation for going the extra mile to serve its
customers. This reputation for excellent customer service
willmost likely result in

E) producer
A) product design excellence. excellence.
B) mission statement satisfaction.
C) sustainable price decreases.
D) a sustainable competitive advantage.

22) Firms achieve ________ through efficient procedures

and excellent supply chain management.

A) customer

Version 1 5
excellence E) operational
B) locational excellence excellence
C) customer loyalty
D) value-based pricing

23) Which macro strategy allows Amazon to guarantee

free two-day shipping to its prime members?

E) locational
A) manufacturing excellence excellence
B) product excellence
C) branding excellence
D) operational excellence

24) For many years, Southwest Airlines distinguished airlines have online
itself as the low-cost airline. Now, many other low-cost ticketing. These examples
competitors have entered the market. Similarly, Southwest suggest that
was one of the first airlines to offer online ticketing. Now, all

sustainable competitive
A) no single strategy is likely to be sufficient to build advantage.
a sustainable competitive advantage. E) innovation is
B) a situation analysis does not accurately predict a pointless because
firm's strengths. competitors will develop
C) customer excellence cannot be achieved. copycat offerings.
D) product excellence is the only true source of a

25) Customers around the world know Pepsi and consider

it a primary "go-to" brand if they want a refreshing drink.
This positioning reflects Pepsi's careful implementation of

E) supply chain
A) locational excellence strategy. management.
B) operational excellence strategy.
C) targeting strategy and the marketing mix.
D) strategic business unit control.

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26) The automobile manufacturing industry closely customer satisfaction,
watches annual consumer satisfaction surveys. For years, creating a(n) ________ for
Japanese car companies consistently had the highest levels of these companies.

E) diversification
A) strategic marketing plan strategy
B) clear mission statement
C) operational advantage
D) sustainable competitive advantage

27) Miranda is analyzing opportunities for her company. sustainable competitive

What decision isleast likely to provide the company with a advantage?

E) creating an
A) lowering prices efficient supply chain
B) having a well-known brand name
C) achieving high levels of customer satisfaction
D) using patented technology

28) Sasha’s Sandwich Shop rewards customers with five What tactic is this business
points every time they purchase a lunch entrée. Once using to achieve customer
customers earn 25 points, they receive a free lunch entrée. excellence?

E) developing an
A) using a good physical location Internet presence
B) relying on an effective price structure
C) creating customer loyalty
D) focusing on human resource management

29) Gabriela’s is a women's clothing retailer

headquartered in Spain with stores located in many countries.
Gabriela’s has developed a "quick response" system that
allows store merchandise to be adjusted rapidly to fit
changing customer preferences. Every aspect of Gabriela’s
operation is optimized for this system, making it difficult for
competitors like The Gap to duplicate. Gabriela’s has
established

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 E) a related
A) customer loyalty. diversification opportunity.
B) locational excellence.
C) a diversification growth strategy.
D) a sustainable competitive advantage.

30) Vivien has been a loyal customer of her hair salon for heart of town, is easily
years—just like most of the other patrons. She believes that accessible. Vivien’s salon
her stylist, the salon owner, is the best in the business. Not has earned
only does the salon provide excellent beauty services, it also
features an exceptional, timely staff that always puts the
customer first. Furthermore, the salon, which is right in the

E) the benefits of a
A) a sustainable competitive advantage. locational excellence.
B) a customer retention program.
C) an opportunity to grow.
D) a loyal customer following.

31) Customer retention programs are based on what

concept?

D) Segmentation,
A) Customer excellence is the easiest macro strategy targeting, and positioning
to follow. analysis should not be
B) Customer relationships should be viewed from a rushed.
lifetime value perspective rather than on a transaction-by- E) Firms must
transaction basis. spend large amounts of
C) It is important to maximize profits in the first few money to retain customers.
months of a customer relationship.

32) Most banks implement customer retention programs

aimed at their best customers. They do this because they
know that retaining customers usually results in

C) opportunities for
A) a product development growth strategy. diversification.
B) an operational advantage. D) increased long-

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term profits.
E) more clearly defined market segments.

33) Some universities, recognizing the convenience of

distance learning, have begun to offer fully online, accredited
degree programs. These universities aremost likely pursuing
which macro strategy?

E) purchase
A) customer excellence excellence
B) locational excellence
C) operational excellence
D) product excellence

34) One example of a customer loyalty program is

grocery store.
A) a "frequent diner" restaurant card that offers a free E) an extensive
appetizer for every $100 spent. customer service training
B) a quantity discount offered for large purchases at program.
an office supply store.
C) access to seasonal sales on top-selling items.
D) an "everyday low price" policy on all products at a

35) Singapore Airlines seeks to differentiate itself from pursuing a(n) ________
competing airlines, in part through innovative design of its macro strategy.
airplane seats and in-flight entertainment systems. Through
continuous innovation in these areas, Singapore Airlines is

E) product
A) customer excellence excellence
B) global excellence
C) locational excellence
D) operational excellence

36) Over the last few months, Carlos and his colleagues have analyzed the current

Version 1 9
business situation and identified target markets for his firm's match. Carlos and his
personal care products. Finally, they developed the products, colleagues have been
prices, distribution, and promotion that should appeal to each developing
of those target markets. In doing so, Carlos has also identified
what he believes is an advantage his competitors cannot

E) competitive
A) a business mission statement. assessments.
B) a strategic vision.
C) team-building exercises.
D) a marketing strategy.

37) Ted’s Tire Store sets itself apart from competitors by strategy for over 40 years,
the extra attention it pays to its customers. To retain customer expanding to 15 outlets.
loyalty, it provides fast, courteous service in a clean, Ted's Tire Store uses a
professional-looking environment. Ted’s has used this ________ macro strategy.

E) customer
A) supply chain excellence excellence
B) locational excellence
C) product excellence
D) diversification excellence

38) What is considered thebest way to build a sustainable

competitive advantage using product excellence?

eliminating older features

A) being the first to offer customers desired features, that are still in use by
even if competitors can copy them easily customers
B) positioning the product using a clear, distinctive E) copying the
brand image market leader's features,
C) having the most features on each model but at a lower cost
D) focusing on being cutting edge and continually

39) A competitive advantage based on location is often

sustainable because

A) mobile

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marketing has not yet proven its value for most customers. E) the Internet has
B) real estate prices have been dropping. diminished the importance
C) few marketers are aware of its importance yet. of brick-and-mortar stores.
D) location cannot be easily duplicated.

40) Four companies dominate the cereal industry. These firms to create ________
firms produce in large volumes, promote heavily, and control over the competition.
access to the supermarket shelves through "slotting
allowances," which are payments to retailers in return for
shelf space. These combined factors have allowed these four

E) locational
A) identical marketing mixes excellence
B) customer excellence
C) a sustainable competitive advantage
D) product excellence

41) Which actions would be themost likely to support and

enhance an operational excellence macro strategy?

high-traffic shopping areas

A) Singapore Airlines installing more comfortable E) McDonald's
seats in the economy-class cabins of its airplanes lowering prices on its
B) 3M Corporation implementing new software to coffee drinks
improve communication with its suppliers
C) Adidas inviting customer suggestions to guide the
design of the next generation of shoes
D) Nike opening hundreds of new company stores in

42) Because it was able to deliver merchandise overnight, Sam’s Sports Shack
in the required quantities, and at a lower delivery cost than its demonstrates ________
competitors, Sam’s Sports Shack was given exclusive rights excellence.
to sell clothing with school logos for the school district.

D) operational
A) product E) locational
B) place
C) customer

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43) During which phase of the marketing planning process
does a firm evaluate performance using marketing metrics?

D) control phase
A) planning phase E) strategy phase
B) implementation phase
C) production phase

44) What is the third step in the marketing planning

process?

E) perform
A) define the business mission situation analysis
B) identify and evaluate opportunities
C) evaluate using a matrix
D) implement marketing mix and allocate resources

45) In mid-2010, Hewlett-Packard Company (HP) strategic planners were

acquired Palm Computing Inc., a manufacturer of personal engaged in which step of
devices and smartphones. Before deciding to acquire the the marketing planning
company, strategic planners at HP spent time thinking about process?
how Palm and HP would "fit" together, and how the
acquisition might change HP's core goals and objectives. The

E) define the
A) perform situation analysis business mission
B) implement marketing mix and allocate resources
C) identify and evaluate opportunities
D) evaluate performance

46) After defining the business mission, what should a

firm do next to develop a marketing plan?

D) select a target
A) conduct an STP analysis
B) perform a situation analysis
C) develop a positioning strategy

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market
E) implement the four Ps

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47) Mallory has been hired as the new marketing manager statement. What is one of
at Luscious Chocolate Company. Prior to taking the job, the questions the mission
Mallory researched the company and founds its mission statement should answer?

D) How many
A) What does the company need to do to accomplish competitors does the
goals and objectives? company have?
B) What is the company’s policy on diversifying its E) Where is the
portfolio? company located?
C) What are the specific markets the company wants
to reach?

48) It is Nathan’s job to evaluate the performance of the should make. Which step
marketing strategy his company used to promote its new line of the marketing plan is
of tennis shoes and recommend any changes the company Nathan responsible for?

D) planning phase
A) implementation phase E) objective phase
B) production phase
C) control phase

49) Trista is charged with assessing her company's

external environment as part of a SWOT analysis. Trista will
study her company's

E) opportunities
A) strengths and weaknesses. and threats.
B) sales history and profit margins.
C) pension and retirement plans.
D) product specifications.

50) Matt pointed out to the board of directors that having

the popular teen music group as the company’s celebrity
endorser has boosted sales by 22% in the 12-18 age bracket.
When using a SWOT analysis, the teen music group would be
classified as a(n)

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 D) weakness.
A) strength. E) threat.
B) option.
C) opportunity.

51) Manufacturers that use just-in-time manufacturing

systems coordinate closely with suppliers to ensure that
materials and supplies arrive just before they are needed in the
manufacturing process. While just-in-time systems can offer
major advantages in terms of inventory costs, they must be
carefully managed. If a firm found that its just-in-time system
was badly managed, leading to frequent manufacturing delays
due to missing parts, this would represent a(n) ________ in a
SWOT analysis.

D) strength
A) weakness E) metric
B) opportunity
C) threat

52) For U.S. businesses with strong export capabilities,

expansion of U.S. trade agreements with other countries
creates

D) threats.
A) weaknesses. E) strategic plans.
B) opportunities.
C) strengths.

53) In 2006, Ford Motor Company announced it would

severely cut back its automobile production. For parts
companies supplying Ford its parts, this represented a(n)

D) threat.
A) weakness. E) strategic plan.
B) opportunity.
C) strength.

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54) In a SWOT analysis, increasing gasoline prices would
represent a potential ________ for manufacturers of electric
cars.

D) operational
A) internal weakness advantage
B) external threat E) marketing mix
C) external opportunity

55) Which factor, listed in a situation analysis for a major identified by a SWOT
U.S. auto manufacturer, is thebest example of a threat as analysis?

cars get lower gas mileage

A) The factory that manufactures a new, popular car than those of major
cannot build enough vehicles to meet the demand, while other competitors.
factories have excess capacity. E) The company
B) Recent consumer studies have indicated that has lower manufacturing
Chinese consumers prefer American cars. costs than its key
C) A New York law firm has filed a $10 million class competitors, allowing it to
action suit against the company on behalf of car owners sell its cars at low prices.
whose gas tanks exploded.
D) Due to outdated engine technology, the company's

56) Which factor, listed in a situation analysis for a major as identified by a SWOT
U.S. auto manufacturer, is thebest example of an opportunity analysis?

cars get lower gas mileage

A) The factory that manufactures a new, popular car than those of major
cannot build enough vehicles to meet the demand, while other competitors.
factories have excess capacity. E) The company
B) Recent consumer studies have indicated that has lower manufacturing
Chinese consumers prefer American cars. costs than its key
C) A New York law firm has filed a $10 million class competitors, allowing it to
action suit against the company on behalf of car owners sell its cars at low prices.
whose gas tanks exploded.
D) Due to outdated engine technology, the company's

57) During a SWOT analysis, a company should assess the opportunities and

Version 1 16
uncertainties of the marketplace due to changes in several
CDSTEP factors. The "E" in this acronym stands for which
factor?

D) economic
A) ethical E) elemental
B) environmental
C) ecological

58) The process of dividing the market into groups of

customers with different needs, wants, or characteristics is
called

D) allocation.
A) target marketing. E) value capture.
B) market segmentation.
C) positioning.

59) ________ involves the process of defining the or represents in

marketing mix variables so that target customers have a clear, comparison with
distinctive, desirable understanding of what the product does competing products.

D) Allocation
A) Target marketing E) Value capture
B) Market segmentation
C) Market positioning

60) A former advertising campaign for GEICO Insurance campaign was part of
used the slogan "So easy, even a caveman could do it" to GEICO's
emphasize the ease of buying insurance on GEICO's website
—implying it was simpler than using a competitor site. This

E) positioning
A) mission statement. strategy.
B) market segmentation plan.
C) product strategy.
D) customer excellence strategy.

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61) Julius is asked to conduct an STP analysis for his firm.
The first step he should perform in this analysis is to

E) conduct a
A) develop a business mission statement. SWOT analysis.
B) choose the best target markets.
C) reposition existing segments.
D) divide the marketplace into subgroups.

62) The recent whole foods trend has led to the opening of
a new organic foods market in town. In response, the long-
standing neighborhood grocery decided to stock and sell a
line of organic food products. In doing this, the grocery was
mostlikely trying to

E) offset cost-based
A) gain government subsidies. pricing pressure.
B) attract a different market segment.
C) reduce its costs.
D) save the environment.

63) When considering new products, marketers at Savory lot. "Kate" represents
Seasonings ask themselves, "What would Kate think?" Kate is Savory Seasoning’s
a fictional character representing 25- to 50-year-old educated, primary
upper-income women who rarely watch television but read a

E) sustainable
A) internal strength. competitive advantage.
B) positioning strategy.
C) strategic business unit.
D) target market segment.

64) After identifying various market segments that her

company could pursue, Lydia evaluated each segment's
attractiveness based on size, income, and accessibility. Lydia
was involved in

A) target

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marketing. E) market
B) situation analysis. penetration estimation.
C) diversification.
D) positioning.

65) LeBron James, Stephen Curry, and other athletes are in comparison to
paid huge sums of money by companies for celebrity competing products, they
endorsements. If endorsements by these athletes create a clear can help with the firm's
understanding among consumers of the companies' products ________ strategy.

D) segmentation
A) product excellence E) customer
B) targeting excellence
C) positioning

66) ________ involves the process of defining the represents in comparison

marketing mix variables so that target customers have a clear, with competing products.
distinctive, desirable understanding of what a product does or

E) A SWOT
A) Targeting analysis
B) Market segmentation
C) A situational analysis
D) Market positioning

67) Starbucks is known for understanding its customers. pastries, Starbucks is

As such, it has developed multiple varieties of products that engaging in a(n) ________
match the needs and wants of its different market segments. strategy.
By offering everything from espresso drinks to teas to

D) operational
A) value-based promotions excellence
B) market segmentation E) target marketing
C) positioning

68) Many small

businesses whose

Version 1 19
competitors are national franchises advertise "we are locally
owned" or "we have been here since 1951." This is part of
these firms'

D) customer
A) business mission. excellence strategy.
B) market segmentation strategy. E) target market.
C) positioning strategy.

69) Among Internet users, some do research online, some

shop, some look for entertainment, and many do all three.
Each of these groups have different wants and needs and
would be called a

D) cash cow.
A) strategic group. E) marketing
B) strategic business unit. metric.
C) market segment.

70) Coca-Cola sells two different zero-calorie versions of

Coke: Diet Coke and Coke Zero (now known as Coca-Cola
Zero Sugar). It has chosen to attempt to appeal to men with
Coke Zero. In addition to launching an ad campaign featuring
men enjoying Coke Zero, Coca-Cola also designed a
masculine-looking can for Coke Zero, with bold red lettering
on a black background. This specially designed can is an
example of

E) market
A) positioning. penetration.
B) targeting.
C) segmentation.
D) a market segment.

71) Delta Airlines is

among the companies
experimenting with selling
products and services on

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their Facebook pages. The idea is to make purchasing even ever leaving Facebook.
easier for customers who may spend large portions of the day Which element of the
with Facebook active on their computers or mobile devices. marketing mix does this
There is no need even to navigate to Delta's website—users represent?
can book a trip in Delta's "Ticket Agent" application without

E) positioning and
A) product and value creation value promotion
B) price and value capture
C) place and value delivery
D) promotion and value communication

72) Candice has been directed by her regional marketing process is Candice
manager to cut prices on seasonal items, place an ad in the engaged in?
local paper, and tell distributors to reduce deliveries for the
next month. Which step of the strategic marketing planning

E) identify and
A) evaluate performance evaluate opportunities
B) define the business mission
C) perform situation analysis
D) implement marketing mix and allocate resources

73) Suppose your university made a sizable investment in mix, the university is
its career services—additional counselors, increased efforts to enhancing the
bring in recruiters, and other services aimed at helping
students find jobs. In terms of implementing the marketing

D) promotion
A) segmentation strategy. communication.
B) place strategy. E) product value
C) place delivery.

74) Creating value for a consumer product via place

decisions involves

B) designing
A) putting the product in the front of the store. creative displays to capture

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consumers' attention. supply chain costs.
C) pricing products differently at different stores.
D) making sure the product is available where and
when customers will want it.
E) focusing exclusively on Internet sales to reduce

75) In recent years, cellular (mobile) service providers companies were focusing
have worked hard to eliminate "dead zones," providing on ________ value
customers with service wherever they traveled. By working to creation.
make the network available in more locations, cellular service

D) place
A) product E) financial
B) price
C) promotion

76) The idea of value-based marketing requires firms to

charge a price that

D) prioritizes
A) covers costs and generates a modest profit. customer excellence above
B) includes the value of the effort the firm put into the operational excellence.
product or service. E) matches
C) captures the value customers perceive that they are competitors' prices.
receiving.

77) Amazon makes sure its customers can download their

Kindle e-books easily from its website when and where they
want them. In so doing, it is focusing on creating value
through

D) price.
A) product. E) process.
B) place.
C) promotion.

78) In value-based marketing, the promotion element of the four Ps communicates

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the ________ to customers through a variety of media.

E) target market
A) mission statement definition
B) operational excellence strategy
C) value proposition
D) relative market value

79) When marketers use a variety of communication value proposition to the

disciplines—advertising, personal selling, sales promotion, customer, it is referred to
public relations, direct marketing, and online marketing as
including social media—in combination to communicate a

E) managed
A) integrated marketing communications. marketing
B) multimedia marketing. communications.
C) diverse marketing communications.
D) comprehensive promotion.

80) Businesses use metrics in order to

E) implement
A) lower production costs. personal selling strategies.
B) eliminate inventory costs.
C) evaluate a strategy and quantify a trend.
D) recognize a market and develop a new product.

81) John sees that his company's quarterly sales and

profits are significantly above projections and says, "That's
great. Let's keep doing what we've been doing." John is
ignoring the ________ step of the marketing planning
process.

E) identify and
A) evaluate performance evaluate opportunities
B) define the business mission
C) perform situation analysis
D) implement marketing mix and resources

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82) The first objective in the evaluate performance phase
of the marketing planning process is to

metrics.
A) determine whether to raise or lower prices. E) consider
B) adjust advertising allocations. changing the target market.
C) find ways to cut costs.
D) review implementation programs and results using

83) As it pertains to the marketing plan, understanding the

causes of performance, regardless of whether that
performance exceeded, met, or fell below the firm's goals is
important because it

underperforming SBUs.
A) enables firms to make appropriate adjustments. E) allows firms to
B) allows managers to demonstrate their effectiveness. better assess customer
C) offers insights into crafting an appropriate mission loyalty.
statement.
D) should always be followed by eliminating

84) After conducting STP analysis for her custom auto Stephanie now has to make
parts store and developing strategies for each of the four Ps, ________ decisions.

D) product line
A) competitive response E) mission
B) resource allocation statement
C) market growth

85) George owns four dry cleaning stores in the suburbs of

Orlando, Florida. He recently updated his STP analysis and
has finished adjusting his marketing mix based on the STP
results. His next strategic marketing decision willmost likely
involve determining

business.
A) how Disney World crowds will impact his B) which

Version 1 24
employees to promote or fire. operational excellence
C) how to allocate resources among his four stores. strategy.
D) what new government regulations might create
opportunities or threats.
E) when to shift from a customer excellence to an

86) Which statement regarding marketing metrics is true?

E) They make it
A) Metrics are used at the beginning of the planning difficult for a firm to
process. appropriately adjust to its
B) They are only reliable for comparing results among marketing plan.
SBUs.
C) They cannot be used to project the future.
D) They quantify a trend, dynamic, or characteristic.

87) A product that is in a high-growth market but has a

low market share would be classified as a ________ on the
BCG matrix.

D) star
A) ladder E) question mark
B) dog
C) cash cow

88) In most companies, portfolio management is typically

done at the SBU or ________ level of the firm.

D) sales
A) corporate representative
B) product line E) accounting
C) customer care

89) A(n) ________ is a group of products that consumers

may use together or perceive as similar in some way.

A) SBU

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 B) STP E) promotional
C) product line service
D) market segment

90) Tiana is assessing several of her firm's products using firm in the industry. Tiana
the Boston Consulting Group (BCG) approach. She is is determining
assessing the strength in a particular market and is looking at
the sales of each of the products and the sales of the largest

E) cash equivalent
A) the product's relative market share. values for each product.
B) the market growth rate.
C) a source of competitive advantage.
D) the impact of population shifts on future demand.

91) To determine how attractive a particular market is established as the vertical

using the BCG portfolio analysis, ________ is(are) axis.

E) market profit
A) competitive intensity potential
B) sales dollars
C) market size
D) market growth rate

92) In BCG portfolio analysis, products in low-growth

markets that have received heavy investment and now have
excess funds available to support other products are called

D) dogs.
A) stars. E) anchors.
B) cash cows.
C) question marks.

93) The global athletic

footwear market is
expected to experience
only very slow growth

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over the next several years. Nike is the market leader. how should Nike treat its
According to Boston Consulting Group portfolio analysis, athletic shoe business?

can be invested in other

A) Nike will probably have to invest heavily in the divisions of the company.
athletic shoe business, including extensive promotions and E) Nike should
new production facilities. invest in the athletic shoe
B) Nike should consider exiting the athletic shoe market only if it helps
market. boost the sales of other
C) Nike should stop investing in its athletic shoe products in fast-growing
business; it has already reaped all the benefits it is likely to markets.
receive.
D) Nike's athletic shoe business still requires some
investment, but it is likely to produce excess resources that

94) The growth rate for the iMac desktop, which has a BCG matrix would the
small relative market share in the desktop market, has slowed iMacmost likely fall?
down in recent years. Although sales have dropped by
approximately 3 percent, it remains popular among graphic
designers. Given these conditions, in which quadrant of the

D) upper left
A) upper left quadrant because although its growth quadrant because it is a
rate has dropped, it still remains popular among graphic heavy resource investment
designers E) lower right
B) upper right quadrant because although it has a quadrant because it is in a
small relative market share, it is part of a high-growth market low-growth market and has
C) lower left quadrant because although its sales have a relatively low market
dropped, it still has high market share among graphic share
designers

95) Javier was thrilled to learn his company has decided to establish it firmly. Using
invest a great deal of money in the product he is managing. the BCG portfolio analysis,
He knows that even with its recent high rate of growth and the Javier’s product would be
fact that it dominates its market, he needs more money to classified as a(n)

C) question mark.
A) star.
B) cash cow.

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 D) dog.
E) anchor.

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96) Using the BCG portfolio analysis, a "dog" should be
phased out unless

D) the market has a

A) its marketing manager is a champion of the small chance of
product. rebounding.
B) additional resources could increase its relative E) None of the
market share slightly. choices is correct. Dogs
C) it complements or boosts the sales of another should be phased out.
product.

97) In the context of the BCG matrix, which group

requires the most significant resources to maintain its market
share?

D) question marks
A) dogs E) cash cows
B) stars
C) guppies

98) What is one of the four major growth strategies that

marketers typically utilize?

D) market
A) market penetration assimilation
B) target development E) product growth
C) segment analysis

99) Anna decides to add new sales representatives and

increase advertising to increase sales in her existing market
for her current line of security systems. Anna is pursuing a
________ growth strategy.

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

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100) A ________ growth strategy employs the existing
marketing offering to reach new market segments.

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

101) Webber Enterprises sells its business language

dictionary to college students throughout the United States.
Joseph Webber, the owner, wants to start selling the book to
international students abroad. Webber wants to pursue a
________ growth strategy.

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

102) After success with its Netflix seriesJessica Jones

andDaredevil, Marvel launched two additional series,Iron Fist
andLuke Cage. By doing this, Marvel employed a ________
strategy.

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

103) B&D is a small, local, heating and air conditioning B&D is considering a
business. The company views the nearby military base as a ________ growth strategy.
potential source of growth since B&D already installs and
services the type of equipment the military would require.

C) market
A) product proliferation
B) market development

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penetration
D) diversification
E) product development

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104) Many states create licensing requirements for a variety
of professionals (such as lawyers and accountants) designed
to restrict entry into their market by professionals from other
states. This practice limits ________ growth strategies for
these types of businesses.

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

105) Marketers who design and offer new products and

services to their existing customers are pursuing a ________
growth strategy.

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

106) Customer relationship software allows bank service enroll in or purchase. This
representatives to quickly determine which types of accounts, growth strategy is an
loans, and credit cards a customer currently has. With this example of
information, the service representative can determine
whatother bank services that same customer could potentially

D) diversification.
A) product proliferation. E) product
B) market development. development.
C) market penetration.

107) Isabelle phoned her insurance agent to renew her auto agent was pursuing a
insurance policy. On that same call, the agent attempted to ________ growth strategy.
sell her one of the firm's new life insurance policies. The

B) market
A) product development development

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 C) market penetration E) product
D) diversification proliferation

108) Introducing newly developed products or services to a

market segment the company is not currently serving is called

D) diversification.
A) product development. E) product
B) market development. proliferation.
C) market penetration.

109) The many successful movies produced by Disney are electronics to household
evidenced not only in the movies themselves, but in the items. Which type of
various merchandise that features the characters from each growth strategy does this
movie. This merchandise can range from clothing to merchandise represent?

E) related
A) market development diversification
B) product development
C) logistic analysis
D) market penetration

110) Abercrombie & Fitch, a clothing retailer, includes a link, visit the page, and
"SHARE" link on the product pages of its website. This link make purchases. This is an
encourages an Abercrombie customer to post a link (perhaps example of a ________
showing a new style of jeans) on Facebook or Twitter. growth strategy.
Abercrombie & Fitch hopes that the customer's friends (who
are probably very much like current customers) will click the

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

111) Sodexo is a food

services corporation that

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caters to school cafeterias, university dining halls, mess halls supermarkets, it would be
at military bases, and other large-scale food service facilities. pursuing a ________
If Sodexo were to begin selling individual frozen meals in growth strategy.

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

112) Henson Electric is interested in diversifying into the strategy is Henson Electric
frozen foods industry. The board of directors sees this as a considering?
risky move since the company can’t capitalize on any of its
existing markets or core strengths. Which type of growth

E) related
A) product development diversification
B) market development
C) market penetration
D) unrelated diversification

113) In 2007, Apple first introduced the iPhone, which

combined a cellular telephone, a camera, and Internet access.
By doing this, the company pursued a(n) ________ growth
strategy.

E) product
A) market development development
B) market penetration
C) operational excellence
D) customer excellence

ESSAY. Write your answer in the space provided or on a

separate sheet of paper.
114) Why would a firm want to achieve a sustainable
competitive advantage?

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115) The text states, "Viewing customers with a lifetime is customer retention
value perspective rather than on a transaction-by-transaction almost always a profitable
basis is key to modern customer retention programs." Create marketing strategy?
an example demonstrating a lifetime value perspective. Why

116) One of the benefits of taking marketing courses is the

opportunity to apply marketing concepts to marketing
yourself. When selling yourself, you are a product including
all the skills, aptitudes, and attitudes you bring to the market.
What can you do to give yourself a sustainable competitive
advantage in the marketplace?

117) Suppose that you

and a friend decide to turn
your favorite sports
activity—inline skating—
into a business. You plan
to design a line of

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fashionable clothing that integrates elbow and kneepads. For focus on that strategy.
each of the four macro strategies, briefly describe the most Your answers should be
important thing your company should do if you intend to specific to the inline
skating business.

118) Your marketing professor, Dr. Ottoman, has been

asked to participate in the university's strategic marketing
planning process. During the planning phase of the process,
what questions will Dr. Ottoman likely ask? Be specific to the
university's strategic marketing planning process.

119) Every summer,

university administrators
attempt to estimate how
many students will show
up in the fall. When
August arrives, they hire

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part-time instructors and reassign faculty to teach the courses in during each of the three
students want. In the spring, administrators often go on a seasons (summer, fall, and
retreat to consider how to do things differently next year. spring)?
What phase of the strategic planning process do they engage

120) Conduct a brief SWOT analysis of your prospects of

finding a good job related to your major when you graduate
(if you already have such a job, think about finding a job with
more responsibility. Be sure to include at least one factor
representing each of the four major sections of a SWOT
analysis, and be sure to label each factor to indicate which of
those four sections it belongs in.

121) Nike, the

prominent athletic shoe
manufacturer, relies
heavily on athlete
sponsorships to build
demand for its products.
Spectators at major
sporting events—both

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those attending in person and those watching at home— exposure to be a strength
frequently see the Nike "swoosh" logo worn by elite athletes. or an opportunity? Explain
Given the vast worldwide audience for Olympics broadcasts, your reasoning; be
an Olympic year gives Nike increased exposure. On a Nike specific.
situation analysis in an Olympic year, would you consider this

122) Your marketing professor, Dr. Smith, has been asked

to participate in the university's strategic marketing planning
process. After completing the planning phase of the process,
Dr. Smith has been asked to assist with the STP analysis.
What questions will Dr. Smith ask during the STP analysis?
Be specific to the university's strategic marketing planning
process.

123) You and your friend Taylor work in different parts of

a large firm. In a recent analysis, your area was labeled a
"cash cow" and hers was labeled a "question mark." What
things would you do differently in your area than Taylor
would do in hers?

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124) Boston Consulting Group's portfolio analysis classifies What marketing strategies
a company's products or product lines into a two-by-two are usually considered for
matrix. What are the bases of classification and what are the each of the four
products or product lines in each of the four quadrants called? classifications?

125) Your new sales manager, who previously worked for this into everyday English:
Boston Consulting Group, directs each sales rep to "toss out What is the sales manager
the dogs," "exploit the stars," and "milk the cows." Translate asking the sales reps to do?

126) In July 2010, Microsoft discontinued the Kin, its process would Microsoft
social networking phone, after just six weeks of disappointing have made the decision to
sales. During what step of the strategic marketing planning stop offering the product?

127) After finishing his

marketing degree, Beau
inherited the family
Shrimp Shack restaurant.
The restaurant is a small,
local institution that beach

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visitors have been coming to for decades. Beau wants to make Beau will likely do if he
his business grow and is considering either a market pursues either strategy.
penetration or market development strategy. Describe what

128) The Blooming Arbor is a one-location nursery likely do if they pursue

business, selling plants and flowers for home gardeners. The either strategy?
new owners want to grow through either a product
development or diversification strategy. What will the owners

129) When catalog companies send sale catalogs to their

current customers, which type of growth strategy are they
pursuing?

130) Explain how Marvel, the superhero entertainment

giant, employed a market penetration strategy using its
existing marketing mix and focusing its efforts on existing
customers.

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131) When musicians and their concert promoters offer what type of growth
CDs of a live concert immediately after the concert ends, strategy are they pursuing?

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Answer Key

Test name: ch2

Version 1 42
1) TRUE
Operational excellence is achieved through and human resource
efficient operations and excellent supply chain management.
2) FALSE
In most cases, a single strategy, such as low "wall" around their
prices or excellent service, is not sufficient to position that stands
build a sustainable competitive advantage. as high as possible.
Firms require multiple approaches to build a
3) TRUE
Over time, advantages will erode because of establishing a
competitive forces, but by focusing on sustainable
strategies to keep competitors at bay, competitive
marketers can sustain their competitive advantage is key to
advantage, minimize competitive pressure, long-term financial
and boost profits for a longer time. Thus, performance.
4) TRUE
It is not always necessary to go through the conduct a situation
entire process for every evaluation. For audit without
instance, a firm could evaluate its performance redefining its
in Step 5, and then go directly to Step 2 to overall mission.
5) FALSE
A mission statement is a broad description of
a firm's objectives and the scope of activities it
plans to undertake.
6) FALSE

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STP takes place during the implementation
phase of the marketing plan.
7) FALSE
A recession is an external factor with possible
negative results, so it is a threat.
8) FALSE
A firm uses segmentation to divide the products and
marketplace into subgroups or segments; it services to best
then uses targeting to determine which of meet the needs of its
those segments to pursue, and finally it uses chosen targets.
positioning to decide how it should position its
9) TRUE
If a price is set too high, it will not generate the value that the
much volume. If a price is set too low, it may customer perceives.
result in lower-than-optimal margins and
profits. Therefore, price should be based on
10) TRUE
A strategic business unit is a division of the and may have a
firm that can be managed and operated different mission or
somewhat independently from other divisions objectives.
11) FALSE
Although it seems like the strategic market the five identified
planning process follows a set sequence, in steps.
actuality, it can move back and forth among
12) TRUE

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The Sansa has low relative market share in a
low-growth market, which is the definition of
a dog.
13) TRUE
Stars occur in high-growth markets and are
high market share products and appear in the
upper left quadrant within the BCG matrix.
14) TRUE
A market development strategy offers existing
products and services to new customers.
15) FALSE
The four major growth strategies are market development, and
penetration, product development, market diversification.
16) C
A sustainable competitive advantage comes options do not
from doing things that add value and that are achieve this
not easily imitated by competitors. The other objective.
17) C
Operational excellence is achieved through and human resource
efficient operations and excellent supply chain management.
18) A
The Ritz-Carlton clerk went beyond typical which is one way to
service to offer excellent customer service, pursue a customer
excellence strategy.

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19) C
A customer excellence macro strategy, which trained to find ways
is one way to pursue a sustainable competitive to communicate
advantage, focuses on retaining loyal positively with
customers and excellent customer service. customers and
Disney offers excellent examples of provide better
outstanding customer service. Visitors to service.
Disney parks are greeted by “assertively
friendly” staff who have been extensively
20) B
Viewing customers with a lifetime value
perspective rather than on a transaction-by-
transaction basis is key to modern customer
retention programs.
21) D
This is a good example of a potential not easily copied
sustainable competitive advantage based on and can be
customer service (i.e., a customer excellence maintained over a
strategy). A sustainable competitive advantage long period of time.
is an advantage over the competition that is
22) E
Operational excellence is achieved through and human resource
efficient operations and excellent supply chain management.
23) D
Operational excellence is achieved through and human resource
efficient operations and excellent supply chain management.

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Amazon has the technology to coordinate a
supply chain that achieves this.
24) A
The example shows that competitors strive to to sustain a
copy good ideas. But that doesn't mean competitive
innovation is pointless—being the first to do advantage. You
something can still give you an advantage if must always look
you do it best, or if you innovate in ways that for multiple sources
are difficult to imitate. What this example of advantage.
shows is that you cannot come up with a
single idea, stay with it long term, and expect
25) C
Customers around the world know Pepsi and marketing mix
consider it a primary "go-to" brand if they implementation.
want a refreshing drink. This positioning
reflects Pepsi's careful targeting and
26) D
High levels of customer satisfaction can lead competitive
to customer loyalty, a source of sustainable advantage.
27) A
Simply cutting prices is probably the easiest cuts, can create a
strategic move for a competitor to copy. In sustainable
contrast, creating an efficient supply chain that competitive
lowers your costs, allowing you to pass on advantage.
those savings to customers in the form of price
28) C

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One way to achieve customer excellence is to creates an emotional
achieve customer loyalty. A rewards program attachment to the
is one way to achieve loyalty. The business product.
29) D
Gabriela’s has established an advantage that is competitive
difficult to copy—this is a sustainable advantage.
30) A
For a firm to develop a sustainable thus earned a
competitive advantage, it must offer at least sustainable
one of the following: customer excellence, competitive
operational excellence, product excellence, advantage.
and locational excellence. Vivien’s salon
implements all four macro strategies and has
31) B
Viewing customers with a lifetime value be true in a few
perspective rather than on a transaction-by- instances, but they
transaction basis is key to modern customer are often not true;
retention programs. While it is true that STP customer excellence
should not be rushed, this is not the focus of can be extremely
customer retention programs. Maximizing difficult to achieve,
profits at the expense of relationships is and customer
almost the opposite of customer retention retention does not
programs, since it focuses on quick profits at necessarily demand
the possible expense of larger profits in the high levels of
long run. The other two incorrect choices may spending.
32) D

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Viewing customers with a lifetime value spending something
perspective rather than on a transaction-by- in the short term to
transaction basis is key to modern customer keep a customer in
retention programs. Customer retention the long term.
programs recognize that it is often worth
33) B
Locational excellence refers to having a good computer or mobile
physical location and Internet presence. device.
Online courses are available anywhere, as
long as the student has Internet access and a
34) A
A "frequent diner" program gives a customer the customer wants
an incentive to visit the restaurant more often, to earn the rewards
even if competitors try to win customers away that come with
with special menus or other offers, because frequent visits.
35) E
Product excellence entails having products offering, and so
with high perceived value and effective they represent
branding and positioning. The innovations product excellence.
described are in the area of the product
36) D
The question describes the situation analysis, sustainable
STP, and positioning steps of developing a competitive
marketing strategy, as well as a potential advantage.
37) E
Gerald's Tire Store uses a macro strategy that focuses primarily on

Version 1 49
customer excellence, based on the fact that it
has provided fast, courteous service for more
than 40 years and has retained loyal customers
as a result.
38) B
The incorrect options all describe ways to sustainable
create new product models that are probably advantage through
easy for competitors to copy (or that, in one product excellence.
case, copies competitors' offerings). A clear,
distinct positioning, though, offers a more
39) D
It would be difficult and expensive for strategy tends to be
competitors to duplicate having a wide variety sustainable.
of stores located in prime areas. While some
of the other answers are true statements, they
don't explain why a locational excellence
40) C
These four companies have a sustainable break into the cereal
competitive advantage over other competing market.
firms because it's so difficult for these firms to
41) B
By improving communication with its McDonald's
suppliers, 3M would probably improve example, is a
efficiency of the supply chain, which is how potential benefit
firms achieve operational excellence. The enjoyed by firms
ability to offer lower prices, as in the that achieve

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operational excellence, but lower prices do not
help create operational excellence.
42) D
Operational excellence is achieved through a lower price are all
efficient operations and excellent supply chain elements of
and human resource management. Getting operational
customers the merchandise they want, when excellence.
they want it, in the required quantities, and at
43) D
During the control phase, a firm evaluates the
performance of the marketing strategy using
marketing metrics and takes any necessary
corrective actions.
44) B
The steps, in order, are: (1) define the business resources, and (5)
mission, (2) perform a situation analysis, (3) evaluate
identify and evaluate opportunities, (4) performance.
implement marketing mix and allocate
45) E
By considering questions of "fit" and the acquisition
changing objectives, the planners are might change it.
considering HP's business mission and how
46) B
A situation analysis is the second step of the
marketing planning process.

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47) A
The mission statement should answer two goals and
main questions: What type of business are we? objectives?
What do we need to do to accomplish our
48) C
In the control phase, the performance of the corrective actions
marketing strategy is evaluated using are performed.
marketing metrics and any necessary
49) E
The external components of a SWOT analysis
are opportunities and threats.
50) A
SWOT analysis is part of the planning phase.
51) A
The management of the just-in-time system is makes it a
an internal issue; if it is being done badly, that weakness.
52) B
Expansion of trade agreements is an external
factor that could be favorable for firms to take
advantage of. An external positive factor is an
opportunity.
53) D
For parts companies, Ford's actions represent is a negative factor.
external factors. A possible cutback in orders

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An external negative factor is a threat.
54) C
Higher gas prices should make consumers external positive
more likely to consider buying electric cars, so factor is an
this is a positive factor. It is external to the opportunity.
firm since it is beyond the firm's control. An
55) C
A threat is an external negative event. Being competitors are
the target of a lawsuit is certainly a negative external to the firm;
event, and the law firm is external to the however, the
company. Problems in balancing example states that
manufacturing capacity are internal to the firm gas mileage is
and so are weaknesses. Potential demand in inferior due to
China is a positive external factor—an outdated
opportunity. A lower cost structure is a technology, which
positive internal factor—a strength. The gas is an issue internal
mileage issue might sound like a threat in that to the firm.
competitive offerings are superior, and
56) B
An opportunity is an external positive event. factor—a strength.
Potential demand in China could be a positive The remaining
thing for the company, and since it deals with factors are negative,
Chinese consumers it is an external factor. A and so cannot be
lower cost structure is a positive internal opportunities.
57) D
CDSTEP stands for cultural, demographic, social,

Version 1 53
technological,economic, and political forces.
58) B
The process of dividing the market into groups especially for them
of customers with different needs, wants, or —is called market
characteristics—who therefore might segmentation.
appreciate products or services geared
59) C
Market positioning involves the process of does or represents in
defining the marketing mix variables so that comparison with
target customers have a clear, distinctive, competing products.
desirable understanding of what the product
60) E
GEICO is seeking to define itself in from its
customers' minds as a very easy way to save competitors. This is
money on insurance, in order to distinguish it the nature of
positioning.
61) D
With STP, the firm first divides the analysis take place
marketplace into subgroups or segments, before STP analysis
determines which of those segments it should starts, and targeting
pursue or target, and finally decides how it and positioning are
should position its products and services to later stages in STP
best meet the needs of those chosen targets. analysis.
Business mission development and SWOT
62) B
The grocery was probably trying to attract the customers interested

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in organic food products; since this is not a different market
product line it used to carry in the past, now segment for the
that it does, these customers represent a grocery.
63) D
Kate was created to help Savory Seasoning’s products to help
marketers understand its major target market women like Kate
segment. The segment is more than just a understand the
demographic. It includes elements of Kate’s value Savory
behavior (reading instead of watching TV). Seasoning’s
Kate isn't Savory Seasoning’s positioning— products can offer
rather, the company needs to position its them.
64) A
A key component of target marketing is the
evaluation of potential target segments'
attractiveness.
65) C
Positioning is the creation of a clear, distinct, Celebrity endorsers
desirable understanding of what the product are often used to
does or represents compared to competitors. convey this
message.
66) D
This is the definition ofmarket positioning,
which is the final activity in STP analysis.
67) C
After determining which segments represent firm that develops a
effective targets, Starbucks positions itself as a variety of products

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that match the wants and needs of the different
market segments—espresso drinks, coffees,
teas, bottled drinks, pastries, and cooler foods.
68) C
These firms are positioning themselves against experience helps
the competition, emphasizing their local them do a better job
presence in order to suggest that this local of serving
consumers.
69) C
Among Internet users, some do research similarly to a firm's
online, some shop, some look for marketing efforts.
entertainment, and many do all three. Each of
these groups might be a market segment
consisting of consumers who respond
70) A
Segmentation and targeting decisions have understanding that
already taken place at this point, with the this drink is
decision to target men with the Coke Zero designed for them.
introduction. The can design is one element of
the marketing mix, attempting to give men an
71) C
Place is the element of the marketing mix that increasing
relates to making sure the firm's offerings are convenience for
available to customers where and when they consumers by
want them. By allowing customers to make allowing them to
flight reservations inside Facebook, Delta is make the

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reservations without leaving Facebook, thus
delivering value through place.
72) D
Candice is dealing with implementation of the
marketing mix—price cuts (price), advertising
(promotion), and distribution changes (place).
73) E
The product the students buy—an education additional
and a degree—is enhanced by the ability to investment is
find a good job after graduation. Thus, this related to the
product value.
74) D
Value creation through place has to do with product, but they do
making sure the product is available when and not ensure that the
where the customer wants it. Some of the product is always
other options (like the creative displays, or available to the
putting the product in the front of the store) customer.
may cause more consumers to notice the
75) D
By making sure the mobile network is working on place
available to use where and when customers value creation.
want it, cellular service companies are
76) C
Value-based marketing is related to customers' set too low, it may
perceived value. If a price is set too high, it result in lower-than-
will not generate much volume. If a price is optimal margins and

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profits. Therefore, price should be based on
the value that the customer perceives.
77) B
Place refers to making the product or service
readily accessible when and where the
customer wants it.
78) C
The value proposition is the value of the firm's this value
offering, as explained to the target market. proposition via a
Promotion is responsible for communicating variety of media.
79) A
Integrated marketing communications (IMC) clarity, consistency,
represents the promotion P of the four Ps. It and maximum
encompasses a variety of communication communicative
disciplines—advertising, personal selling, impact.
sales promotion, public relations, direct
marketing, and online marketing including
social media—in combination to provide
80) C
A metric is a measuring system that quantifies used to evaluate the
a trend, dynamic, or characteristic. Metrics are results of a strategy.
81) A
John should still evaluate performance, even if that he did well, but
results were good. There's always a chance that he could have
that he was successful due to luck, not due to done even better
the quality of his plan. There's also a chance with a stronger plan.

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82) D
The starting point for evaluating performance implementation
is to compare goals to actual performance and, programs looking
for any goals not met, to review for explanations.
83) A
Once the causes of above- or below-goal some cases, but not
performance are understood, firms can decide in every case.
how the marketing plan should be adjusted.
Some of the other answers might be true in
84) B
Stephanie has chosen a target market, options available for
determined positioning strategies, and implementation.
developed marketing mixes. She now has to
consider available resources and determine
how they will be allocated across the different
85) C
George should already have considered a case, he could
strategy shift in an earlier step of the planning invest equally in all
process and should have evaluated the impact four stores, or he
of Disney World and of possible government could adjust his
regulation in a situation analysis. After STP allocations
analysis, he should be considering his according to the
implementation plan for the four Ps and situation at each
deciding how to allocate resources. In this store.
86) D
A metric is a measuring system that quantifies a trend, dynamic, or

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characteristic. Metrics are used to evaluate the to understand the
results of the strategy at the final step of the causes of
planning process. They explain why things performance make
happened and also project the future. They it possible for firms
make it possible to compare results across to appropriately
regions, strategic business units (SBUs), adjust their
product lines, and time periods. Using metrics marketing plans.

87) E
This is the definition of aquestion mark. If the potential to become
product is infused with resources, it has the a star.
88) B
In general, marketing resources are allocated representative level
to SBUs or product lines. The corporate level is generally too low.
is too high unless it is a very small company
with just a single product line, and the sales
89) C
A product line is a group of products that similar in some
consumers may use together or perceive as way.
90) A
A company's relative market share is
determined by comparing its sales to the sales
achieved by the largest firm in the industry.
91) D
The BCG matrix uses market growth rate on the horizontal axis.
the vertical axis and relative market share on The other factors

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are not unimportant—they are simply not part
of BCG portfolio analysis.
92) B
Cash cows are product lines with high relative support other
market share as the result of past investment, product lines.
but in low-growth markets. They typically
generate excess cash that can be used to
93) D
A market leader in a low-growth market is, in there could be
BCG terms, a cash cow. This means that, niches that are
although Nike certainly wants to maintain its growing rapidly,
market leadership position, the athletic shoe and where heavier
business can be expected to generate excess investment might be
resources that can be invested in other areas of warranted.
the company. This question deals with the
athletic shoe market as a whole—note that
94) E
The iMac would be best classified as a dog so would risk
(lower right quadrant) because it is in a low- alienating its loyal
growth market and has relatively low market customers (such as
share. However, unlike most dogs, Apple graphic designers).
should not get rid of the iMac because doing
95) A
A product with high relative market share in a in order to continue
high-growth market, in BCG analysis, is
called a star. Stars typically require investment

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to grow and to maintain or improve their market positions.
96) C
Dogs can be worth keeping if they assist with
the sales of another more successful product.
97) D
Question marks appear in high-growth significant resources
markets but have relatively low market shares; to maintain and
thus, they are often the most managerially potentially increase
intensive products in that they require their market share.
98) A
The four growth strategies are market development, and
penetration, market development, product diversification.
99) C
Anna is trying to sell more of her current market penetration
products to current customers, which is a strategy.
100) B
A market development strategy employs the market segments,
existing marketing offering to reach new whether domestic or
international.
101) B
A market development strategy employs the market segments,
existing marketing offering to reach new whether domestic or
international.
102) A

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When a firm employs a product development firm's current target
strategy, it offers a new product or service to a market.
103) B
B&D seeks to install equipment and services market segments,
that it already has and offers to the military, whether domestic or
which represents a new type of customer. A international.
market development strategy employs the
existing marketing offering to reach new
104) B
By restricting the ability of lawyers and other new customers.
professionals to easily expand their businesses These would limit
across state lines, states are preventing these market development
professionals from selling existing services to opportunities.
105) E
A product development strategy offers a new
product or service to a firm's current target
market.
106) C
A market penetration strategy employs the the firm more often
existing marketing mix and focuses the firm's or buy more
efforts on existing customers. Such a growth merchandise on
strategy might be achieved by attracting new each visit.
consumers to the firm's current target market
or encouraging current customers to patronize
107) A
The agent is trying to sell new types of insurance to a

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current customer, which is a product
development strategy.
108) D
A diversification strategy introduces a new currently is not
product or service to a market segment that served.
109) E
In a related diversification opportunity, the to their current
current target market and/or marketing mix consumers. Marvel
shares something in common with the new has pursued related
opportunity. In other words, the firm might be diversification with
able to purchase from existing vendors, use its home décor, for
the same distribution and/or management example.
information system, or advertise in the same
newspapers to target markets that are similar
110) C
In this situation, Abercrombie & Fitch is to those customers
trying to sell more of its existing products to (and thus part of the
its current target market, which is a market same market
penetration strategy. Market development segment).
would involve attracting new market
segments, but the company is assuming that
the friends of current customers will be similar
111) D
Individually packaged frozen meals, unlike also be a new
bulk foods, would be a new product area for market, since
Sodexo. Consumers in grocery stores would Sodexo currently

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serves schools, universities, and the military.
Thus, with a new market and a new product,
this would be an example of diversification.
112) D
In contrast, in an unrelated diversification, the core strengths
new business lacks any common elements associated with
with the present business. Unrelated markets or with
diversifications do not capitalize on either products.
113) E
Apple's iPhone was a new product for its
existing customers; when a firm introduces a
new product to its existing target market, this
is known as a product development strategy.
114) Establishing a sustainable competitive should be
advantage makes it hard for competitors to something that can
enter a market or attract a firm's customers. be maintained over
The advantage should be difficult to copy and time.
115) Answers to the first part will vary but profitable because it
should demonstrate how much business a costs more to get
customer brings in over a lifetime. For new customers than
example, a customer spending $4 at to retain existing
Starbucks, five days per week, for 20 years ones.
equals $20,800. Customer retention is
116) A sustainable competitive advantage is communication, and
something you can persistently do better than accounting are all
the competition. Skills including statistical important and
analysis, ability to use technology, valuable. Aptitudes

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including rational thinking and problem continually grow
solving are lifelong abilities that can benefit and learn in order to
any organization. Attitudes such as be successful and
persistence, a sense of humor, and teamwork maintain a
are valuable in any business environment. But, sustainable
as best-selling author Stephen Covey suggests, competitive
we must always "sharpen the saw," meaning advantage.
117)There are many correct answers; here is a relationships with
sample. To make this question easier, you suppliers of fabric
could ask the student to provide an idea for and other raw
just one or two of the macro strategies. materials and with
● Product excellence: Focus on continually retailers.
improving the products and making them the ● Locational
most advanced ones on the market, perhaps excellence: In
using stylish yet durable fabrics that won't be addition to having a
damaged in a fall. Then work to develop a top-notch website,
clear positioning statement for your brand. try to get your
● Customer excellence: Offer outstanding products into as
service, perhaps including live chat on the many retail stores as
website as well as no-hassle returns if the possible, probably
customer changes his or her mind about a focusing on sporting
purchase. goods stores.
● Operational excellence: Develop close
118) Answers will vary, but should begin with Additionally,
a discussion of creating or revising the discussion of the
university's mission statement, leading to mission statement
questions such as: What type of university are will likely lead to
we? What does the university need to questions
accomplish its goals and objectives? concerning how the

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university can build a sustainable competitive Questions about
advantage. Dr. Ottoman will also assist with external forces,
the situation analysis, which will include threats, and
internal examination of the current status of opportunities will
the university, asking questions such as: What also be asked during
are the university's strengths and weaknesses? the SWOT analysis.
119) Summer—planning; fall—
implementation; spring—control.
120)To make sure the students clearly classify growth in the field,
the factors, you might want to provide an a new firm starting
answer space with four sections; in each one, up in the area that
include a blank line for the name of the will be hiring, or a
section and additional space for the factor. shortage of
Students will come up with a variety of graduates in the
answers depending on their individual field
situations. They will probably need to do ● Threats—could
some speculation for opportunities and threats. include the
Here is a sample: recession, a glut of
● Strengths—students might mention graduates in the
internship experience, past work experience, field, or reduced
classes taken, personal characteristics, or demand for
personal contacts professionals in the
● Weaknesses—possibilities include lack of field
experience, inability to relocate, or a low GPA
● Opportunities—could include expected
121) A reasonable argument can be made for ubiquitous and well
this being a strength or an opportunity, so this recognized, and
is about the rationale offered. This could be customers in Nike's
viewed as a strength in that Nike's logo is target markets will

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be reminded of the many sports for which viewership of niche
Nike offers shoes and apparel. It could also be sports that
viewed as an opportunity to strengthen Nike's ordinarily don't get
position overseas (due to international much attention).
viewership) and to increase awareness of the
breadth of Nike's products (due to increased
122)STP analysis includes segmentation, the university
targeting, and positioning. Dr. Smith will ask intends to position
questions such as: What basis for itself in the various
segmentation should be used? Should the market segments:
university's market be divided based on age, What products or
income, geographic area, or maybe services are going to
educational interests? After segmentation, be promoted? How
which segments can be pursued profitably, or are the university's
targeted? products and
Many market segments will likely be services different
identified, but Dr. Smith will often have to from what
ask, Can we effectively and efficiently reach competitors are
that group of potential consumers? (For offering? Where
example, one university considered providing and how can the
educational services to a local prison but ran university build on
into a host of problems making it impossible existing strengths?
to target that market.)
Last, Dr. Smith will ask questions about how
123) There are many possible answers, but the use of resources,
students should be able to describe both cash and the future of
cows and question marks as well as each unit.
understand the different kinds of strategies,
124)The two bases of classification are relative market

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share (high-low) and market growth rate needed to
(high-low. This leads to four quadrants labeled complement or
stars, cash cows, dogs, and question marks. boost sales of other
● Stars: high market share/high growth rate. products.
Usually require continued promotion efforts ● Question marks:
and expansion of production capacity. low market
● Cash cows: high market share/low growth share/high growth
rate. Sources of funding for other parts of the rate. Candidates for
firm. They typically require modest strategic marketing
promotional and production support. planning, assessing
● Dogs: low market share/low growth rate. potential for growth.
Candidates to be phased out unless they are
125) Your sales manager wants you to stop not put additional
selling those products that are in slow-growth effort into high
markets and in which the company has a small relative market
relative market share. The manager also wants share, low-market-
you to spend more time and effort selling growth products,
products that are in high-growth markets and referred to as cash
in which the company has a high market cows.
share. Finally, you should continue to sell but
126)Step 5—Evaluate performance using difficult, you can
marketing metrics. add to the question
Some students might also answer "Control the following: What
phase." Strictly speaking, this is a phase and should Microsoft
not a step; however, Step 5 is the only step of have done before
the process that fits into the Control phase, so deciding to
you may want to accept both as correct discontinue the
answers. product? The
If you want to make this question more Microsoft should

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have determined the causes for the promotion plan)
disappointing sales to determine whether or could put sales back
not another action (perhaps a different target on track.
market, a price adjustment, or a revised
127)If Beau pursues a market penetration market development
strategy, he will likely expand advertising and would likely include
promotion, maybe adding billboards, opening additional
promoting specials, adding hours, and likely locations in other
expanding the restaurant to serve more areas, offering the
customers. same menu.
If Beau pursues a market development
strategy, he will attempt to serve new market
segments. Since his product is a restaurant,
128) If they pursue a product development they are not
strategy, they will offer new products or currently serving.
services to the firm's current target market. A Targeting landscape
nursery could logically provide a landscape design or
design consulting service, landscape maintenance
maintenance service, soil and pest testing services for
service, or add additional products such as commercial
indigenous plants. If they pursue a customers would be
diversification strategy, they would market one type of
new products or services to a market segment diversification.
129) Market penetration, because the
companies are trying to sell additional
products (marked down) to current customers.
130) Answers will vary but should include the customer base, the
following: To further penetrate its current super-hero

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entertainment giant Marvel has expanded its its films. Today,
movie offerings. In collaboration with several Marvel movies can
production companies, as well as talented be seen in theaters,
directors and well-known star actors, Marvel accessed on Xfinity,
has helped bring the X-Men, Spiderman, and viewed on
Superman, Iron Man, and other popular DVDs available in
characters to the big screen, where they discount stores,
confront some relevant, modern-day topics grocery stores, and
such as discrimination, environmental a host of other
destruction, and international wars—before stores, including
ultimately kicking tail and saving the city. book and comic
These films have grossed massive profits. stores.
Marvel has further increased its market
penetration by expanding the distribution of
131) Product development, because the CD is sold to current
a new product (just recorded) and it's being customers.

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