CHAPTER 2 The Strategy Behind Marketing

TRUE/FALSE QUESTIONS
Answer whether the following statements are true or false

1 Understand the importance of strategic marketing and know a basic outline for a marketing plan

1. The owner of the Ace Auto Store is considering the permanent price reduction of all inventory to position the store as the lowest-priced auto parts store in town. This is an example of strategic decision making.
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2. The first step in developing a marketing plan is the creating a SWOT analysis.
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2 Develop an appropriate business mission statement

3. Mike's Motos manufactures and sells mopeds, scooters, and other small motorcycles. Management does not define the business in terms of offered products; instead, the business is defined as "serving transportation needs for students." Mike's Motos suffers from marketing myopia because it has ignored the fact that students can get transportation from cars, buses, and bicycles.
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3 Describe the criteria for stating good marketing objectives

4. Pets Market has the marketing objective of being the best retailer of pet food and supplies in the country. This would be considered a useful objective.

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4 Explain the components of a situation analysis

5. An example of a "threat" which a tobacco manufacturer could use in its SWOT analysis could include impending legislation that would lessen the amount of advertising tobacco companies can do.

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6. You have been hired to collect and analyze information about factors that may affect your new company. You are also responsible for identifying market opportunities and threats. Your job can be summarized as "environmental scanning."

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5 Identify strategic alternatives and describe tools used to help select alternatives

7. Twinky Tins has been producing the same assortment of cookie tins for the life of the company. The company has decided that its products, targeted at bakeries, would also fulfill the needs of household consumers. Pursuing this new market would be an example of market development.
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8. Finkle's Fishing Rods has just developed a new line of tackle boxes that further meet the needs of Finkle's fishing customers. This is an example of product development.
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6 Discuss target market strategies

9. Your School of Business is engaged in describing and estimating the size and sales potential of market segments (such as traditional students, executives, and the local community). In addition, the school is assessing major competitors (such as other colleges and educational programs). Your school is conducting a market opportunity analysis.

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7 Describe elements of the marketing mix

10. A small, independent motion picture studio decides to use theatres to advertise a new artistic movie release. This is an example of using "place" in the marketing mix.

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8 Explain why implementation, evaluation, and control of the marketing plan is necessary

11. The control process actually begins while planning is taking place.

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12. A marketing audit is a control device used primarily by large corporations to study past performance.

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MULTIPLE-CHOICE QUESTIONS
Select the response that best answers the question, and write the corresponding letter in the space provided.

1 Understand the importance of strategic marketing and know a basic outline for a marketing plan

13. If Plan-O-Co is proceeding through the decision-making phases involved in the strategic planning process, which of the following activities is NOT being performed?

a. defining the business mission
b. conducting a situation analysis
c. developing strategic alternatives
d. designing a marketing information system to solve specific problems
e. establishing strategic business units

14. Production Aid Consultants, Inc., has recently been engaged in several special meetings where issues such as business mission, situation analysis, market and growth alternatives, and implementation approaches have been discussed. Production Aid is apparently engaged in:

a. target market planning
b. writing the mission statement
c. the strategic planning processes
d. business analysis
e. strategic contingency planning

2 Describe an appropriate business mission statement

15. Frito-Lay defines its business as "snack-food" rather than just "corn chips." This is an example of:
a. a marketing mix strategy
b. a mission statement
c. quantifiable goals
d. a financial statement
e. organizational accomplishment

16. Sharon Mauser, the senior vice president of Progressive Products, Ltd. is in the process of developing Progressive's organizational mission statement. Which of the following factors should she consider when developing such a mission statement?

a. What benefits do present customer need and want
b. What benefits will potential customers need and want
c. What existing environmental conditions will influence the choices made in the future by Progressive Products, Inc.
d. What anticipated environmental conditions will influence the choices made in the future by Progressive Products, Inc.
e. All of the above should be considered by Ms. Mauser

17. By defining its business as "running department stores" instead of "providing a range of products and services that deliver value to Canadian families," Sears was engaging in:
a. market segmentation
b. marketing myopia
c. market development
d. strategic planning
e. product differentiation

18. A high tech company has the business mission of "providing high quality products at a fair price to customers." This mission statement

a. is an example of marketing myopia.
b. is too broad of a statement to be of use in serving customers.
c. could stifle creativity in discovering opportunities to serve customers.
d. is not sincere enough.
e. does not meet customer needs.

19. AT&T sells many products and services in addition to telephones. Some of these include computers, modems, fax machines, and a variety of business and home long-distance telephone services. How would this be best justified in the strategic planning process?
a. New business units are needed to continue growth.
b. Local delivery has high market attractiveness.
c. Diversification is needed to survive.
d. This mission statement recognizes the firm as a communications company, not just a telephone manufacturer.
e. It is more efficient to produce a wide variety of products.

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3 Know the criteria for stating good marketing objectives

20. As the marketing director for a new pharmaceutical that prevents baldness, you have been asked by the CEO to provide marketing objectives for the next year. Your product is the second one of its type in the market. Which of the following is the most appropriate objective?

a. To generate sales of $20 million during the first year of the launch.
b. To attain a market share of 100 percent in the first year.
c. To significantly increase the company's sales.
d. To be number one in the market for baldness-prevention products.
e. To be known as the best product in the baldness-prevention market.

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4 Explain the components of a situation analysis

21. Gabble's Granola has set up a committee to formally study its current status and capabilities and its future expectations. Gabble's Granola is conducting a(n):

a. marketing audit
b. profit and loss statement
c. environmental scan
d. situation analysis
e. strategic window search

22. When Disney started targeting its theme parks toward adults rather than just children, it was selecting which strategic alternative?

a. product development
b. market development
c. market penetration
d. product penetration
e. diversification

23. Starbucks, the giant gourmet coffee retailer, started selling its own branded ice cream to its current coffee customers. This is an example of a strategy called:

a. market development
b. market penetration
c. product penetration
d. product development
e. diversification

24. Licoh, a manufacturer of printing equipment, recently bought a local baseball team to increase its overall sales. Licoh is following the strategy of:

a. market penetration
b. product development
c. product penetration
d. market development
e. diversification

25. Chipsters, Inc., has attracted and employed some of the most creative and experienced computer chip designers in the industry. This has led Chipsters to a position of great strength, attributed to:
a. company strengths
b. superior skills
c. superior resources
d. strategic windows
e. differential advantages

6 Discuss target market strategies

26. A power tool company has done consumer research and describes its customers as being male, 28-55 years of age, married, 62 percent high school graduates, and earners of below-average income. This is the group of consumers most likely to buy the tools and is referred to as the:

a. social responsibility group
b. exchangers
c. target market
d. advertisees
e. scanned environment members

7 Describe elements of the marketing mix

27. John Porter is the new vice president of marketing and is designing the marketing mix for his company. The starting point of Mr. Porter's marketing mix will be the:
a. analysis of what production equipment is available and owned by the company
b. design of the promotion campaign to be used for the product
c. selection of the places through which the good or service will be sold
d. development of the good or service to be sold
e. determination of the price to be charged for the good or service, enabling future revenues and budgets to be estimated

5 Describe several reasons for studying marketing

28. Barak Austin is thinking about opening a new hardware and home improvement store in a community that research has shown needs more outlets. On which area of the marketing mix should he focus his attention?
a. customer needs/wants
b. production
c. product
d. promotion
e. distribution

29. Sabine's job is to decide whether her company's advertising money will be spent on television, radio, newspaper, or direct mail. To which of the four Ps do Sabine's duties relate?

a. publicity
b. price
c. promotion
d. place
e. product

30. Albert must make a quick change to his marketing plan to boost sales, so he should change the ____________ element of the marketing mix?

a. product
b. place
c. price
d. promotion
e. publicity

8 Understand why implementation, evaluation, and control of the marketing plan is necessary

31. Becky's Bolt Supply has set up a management committee that is arranging the delegation of authority and responsibility for marketing strategies, determining a time frame for completion of tasks, and overseeing resource allocation. The task of this committee is:

a. market planning
b. strategic analysis
c. alternative control
d. implementation
e. strategic planning

32. The managers at Unicorn Research realize that implemented plans do not always lead to the desired results. The managers feel they should develop a mechanism for correcting actions that are not efficiently aiding the firm in reaching its objectives. Unicorn's concerns center around:

a. control
b. implementation
c. objectives
d. planning
e. budgeting

33. A planning manager from corporate headquarters finds that his eastern region has no effective method of allocating resources or evaluating goals and performance of the marketing organization. He suggests that the region should prepare a:

a. service audit
b. tactical plan
c. marketing audit
d. market share analysis
e. response function