Chapter 2 Company and Marketing Strategy: Partnering to Build Customer Relationships

GENERAL C N!EN!: Multiple"Choi#e $uestions 1. _____ is the task of selecting an overall company strategy for long-run survival and growth. a. Strategic market planning b. Annual market planning c. Short-term planning d. Advertising e. None of the above is correct (Answer a! p. "#! $asy% &. Adapting the firm to take advantage of opportunities in its constant changing environment is called _____. a. long-range planning b. short-range planning c. annual planning d. strategic planning e. environmental scanning (Answer d! p. "#! $asy% ". 'hat is our business( 'ho)s our customer( 'hat do our customers value( 'hat should our business be( All these simple-sounding *uestions define a firm)s _____. . a. ob+ectives and goals b. mission statement c. business portfolio d. marketing and functional strategies e. operational strategies (Answer b! p. "#! ,oderate% -. A _____ defines a business in terms of satisfying basic customer needs. a. market oriented mission statement b. strategic plan c. annual plan d. operational plan e. none of the above is correct (Answer a! p. ".! ,oderate%

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/. All of the following are accurate descriptions of a company)s mission statement0 e1cept which one( a. ,ission statement should be realistic. b. ,ission statement should be broad. c. ,ission statement should fit the market environment. d. ,ission statement should be written for 2public relations3 purpose. e. ,ission statement might outline employee growth options. (Answer b! p. "4! ,oderate% 5. All of the following are market-oriented mission statements0 e1cept which one( a. e6ay)s mission is to connect individual buyers and sellers online. b. Singapore Airlines is the world)s largest airline. c. 7irl Scouts of America0 2where girls grow strong3 d. 'al-,art0 2we deliver low prices everyday.3 e. None of the above is a market-oriented mission statement. (Answer b! p. ".! $asy% #. 8he collection of businesses and products that make up a company is called its _____. a. strategic business unit b. mission statement c. strategic plan d. business portfolio e. operational factors (Answer d! p. -9! $asy% .. _____ can be a company division0 a product line within a division0 or sometimes a single product or brand. a. A market b. 8he 6:7 c. An S6; d. A <=: e. An initiator (Answer c! p. -9! $asy% 4. 8he purpose of _____ is to find ways in which the company can best use its strengths to take advantage of attractive opportunities in the environment. a. a market b. an S6; c. strategic planning d. short-term planning e. operational planning (Answer c! p. -9! ,oderate%

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19. 8he best known product portfolio planning method was developed by _____. a. <hilip >otler b. ?arvard ;niversity c. S@A :onsulting Birm d. 6oston :onsulting 7roup e. Cames <. ?ess (Answer d! p. -9! $asy% 11. ,ost portfolio analysis methods evaluate S6;s on two dimensions0 namely _____ and _____. a. market share! sales b. market growth rate! relative market share c. market attractiveness! market growth rate d. market growth rate! profits e. none of the above (Answer b! p. -9! ,oderate% 1&. 8he 6:7 growth-share matri1 classifies four types off S6;s. 8hey are _____0 _____0 _____ and _____. a. product! price! promotion! placement b. sales! market share! price! promotion c. stars! cash cows! *uestion marks! dogs d. planning! organiDing! leading! controlling e. north! south! east! west (Answer c! p. -1! ,oderate% 1". An the 6:7 approach0 _____ are high-share0 high-growth businesses or products. 8hey need heavy investment to finance rapid growth. 'hen their growth slows down0 they turn into _____. a. cash cows! stars b. *uestion marks! dogs c. stars! *uestion marks d. stars! cash cows e. dogs! cash cows (Answer d! p. -1! ,oderate% 1-. All of the following phrases accurately reflect problems with the 6:7 matri1 approach0 e1cept which one( a. 8hey are easy to implement. b. 8hey can be costly. c. 8hey can be time consuming to implement. d. At is difficult to define S6;s and measure market share and growth. e. 6 and : (Answer a! p. -1! ,oderate%

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1/. ;nlike former strategic-planning efforts0 today)s strategic planning has been _____. a. short-term oriented b. decentraliDed c. limitation-free d. customer friendly e. centraliDed (Answer b! p. -&! ,oderate% 15. ,aking more sales to current customers without changing a firm)s products is _____. a. market development b. market growth c. market penetration d. product development e. industry attractiveness (Answer c! p. --! ,oderate% 1#. _____ are low-growth0 high share businesses or products. 8hey generate a lot of cash that the firm uses to pay its bills and support other S6;s that need investment. a. Stars b. :ash cows c. Euestion marks d. Fogs e. :ats (Answer b! p. -1! ,oderate% 1.. ,anagement must think hard about which _____ it should try to build into stars0 and which should be phased out. a. stars b. dogs c. 1uestion marks d. cash cows e. cats (Answer c! p. -1! ,oderate% 14. Fisney is identifying and developing new markets for its theme parks. Fisney is e1ploring possibilities for _____. a. market penetration b. market development c. Capan d. diversity e. product development (Answer b! p. --! ,oderate%

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&9. An 14440 Starbucks purchased ?ear ,usic and began making compilation music :Fs to play and sell in its stores. At has also tested new restaurant concepts0 such as :ircadia in San Brancisco. Starbucks is considering _____. a. new product development b. market development c. diversification d. market penetration e. product adaptation (Answer c! p. -/! :hallenging% &1. Ancreasingly in today)s marketplace0 competition takes place between the _____. a. large and small competitors b. number 1 and number & spot firms c. entire value-delivery networks of firms d. market leaders only e. none of the above (Answer c! p. -.! $asy% &&. 8he process of dividing a market into distinct groups of buyers with different needs0 characteristics0 or behaviors is called _____. a. target marketing b. positioning c. marketing strategy d. market segmentation e. market e1tension (Answer d! p. /9! $asy% &". Bor ?yundai :orporation0 customers who care about price and operating economy make up the firm)s _____. a. position b. value network c. market segment d. customer e1tension e. none of the above (Answer c! p. /9! $asy% &-. _____ entails reducing the business portfolio by eliminating products that no longer fit the company)s overall strategy. a. ,arket segmentation b. 6:7 c. <roduct line e1tension d. FownsiDing e. ,arket redesign (Answer d! p. -/! $asy%

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&/. _____ involves evaluating each market segment)s attractiveness and selecting one or more segments to enter. a. ,arket segmentation b. <roduct differentiation c. 8arget marketing d. A and 6 e. None of the above (Answer c! p. /9! ,oderate% &5. _____ is the place a product occupies in the consumer)s mind relative to competition. a. <roduct placement b. <roduct positioning c. ,arket segmentation d. 8arget marketing e. <erceptual map (Answer b! p. /9! $asy% &#. Saturn is 2a different kind of company0 different kind of a car3! the ?ummer is 2like nothing else.3 8hese statements reflect a firm)s _____. a. product portfolio b. target markets c. market positioning d. strategy e. all of the above. (Answer c! p. /9! ,oderate% &.. $ffective positioning begins with actually _____ the company)s marketing offer so that it gives consumers more value. a. pricing b. aligning c. differentiating d. promoting e. e1tending (Answer c! p. /&! ,oderate% &4. ,ost companies today enter a new market by serving a _____0 and if this proves successful0 they _____. a. single market segment! add segments b. multitude of segments! add more segments c. few segments! add more segments d. niche! differentiate e. none of the above (Answer a! p. /9! :hallenging%

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"9. _____ involves looking at whether a company)s basic strategies are well matched to its opportunities. a. Gperating control b. ,arketing audit c. ,arketing control d. Strategic control e. Fistribution (Answer d! p. /#! :hallenging% "1. $valuating the results of marketing strategies and plans and taking corrective action to ensure that ob+ectives are attained is called _____. a. marketing control b. strategic control c. operating control d. developmental control e. efficiency (Answer a! p. /#! $asy% "&. 8o ensure that the company achieves the sales0 profits0 and other goals set out in its annual marketing plan is called _____. a. marketing control b. operating control c. strategic control d. anticipatory control e. marketing audit (Answer b! p. /#! ,oderate% "". 8he marketing control process entails the following steps in order setting goals0 _____0 evaluating performance0 and _____. a. evaluating goals! measuring performance b. achieving goals! measuring performance c. taking corrective action! measuring performance d. measuring performance! taking corrective action e. taking corrective action! follow-up (Answer d! p. /#! :hallenging% "-. 8he _____ is normally conducted by an ob+ective and e1perienced outside party. 8he findings are later presented to management. ,anagement then decides which actions make sense and how and when to implement them. a. marketing planning b. marketing audit c. advertising plan d. marketing research e. none of the above (Answer b! p. /#! ,oderate%

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"/. 8he uncontrollable macro forces to which a firm must adapt is called the ____. a. micro environment b. marketing environment c. marketing audit d. environmental scan e. none of the above (Answer b! p. ".! $asy% "5. All of the following are steps in the strategic planning process0 e1cept which one( a. Fefining the company mission. b. Setting company ob+ectives and goals. c. <lanning marketing and other functional strategies. d. :ollaborating with suppliers on all fronts. e. None of the above. (Answer d! p. "#! ,oderate% "#. Starbucks has an annual plan in place to deal with the company)s current S6;s and their operations. ?owever0 Starbucks as a growth-oriented firm is interested in both domestic and international markets. 8his re*uires Starbucks to constantly monitor the environment and adapt to the opportunities it is presented with. Starbucks needs a _____ in place. a. value-delivery network b. mission statement c. supporting ob+ectives d. profit analysis e. strategic plan (Answer e! p. "#! ,oderate% ".. ,onsanto operates in many businesses0 including pharmaceuticals and food products. 8he company defines its _____ as creating 2abundant food and a healthy environment.3 a. ob+ectives b. goals c. product portfolio d. mission e. value-delivery network (Answer d! p. "4! ,oderate% "4. 8he mission statement of the 7irl Scouts of America reads as follows 2where girls grow strong.3 8his reflects the fact that mission statements must ____. a. be realistic b. be motivating c. be narrow d. fit the market environment e. A and 6 (Answer d! p. "4! ,oderate% -9

-9. All of the following are e1amples of market-oriented mission statements0 e1cept which one( a. 'e make the Anternet buying e1perience fast0 easy0 and en+oyable. b. 'e create customer connectivity anytime0 anywhere. c. 'e create fantasies. d. 'e hold online auctions. e. 6 and : (Answer d! p. ".! ,oderate% -1. All of the following are e1amples of product-oriented mission statements0 e1cept which one( a. At America Gnline we provide online services. b. An Fisney0 we run theme parks. c. At Nike0 we sell shoes. d. At 'al-,art0 we deliver low prices every day. e. 6 and : (Answer d! p. ".! ,oderate% -&. _____ should be market oriented and defined in terms of _____. a. Strategic plans! company needs b. Annual plans! product needs c. =ong-range plans! company needs d. ,ission statements! customer needs e. Gb+ectives! customer wants (Answer d! p. ".! ,oderate% -". A vendor for Bord ,otor :ompany received the following message from Bord)s marketing managers 2As we move forward during the &1st century0 it is incumbent upon us to inform you that Bord is committed to building profitable customer relationships by creating environmentally better cars and getting them to market faster at lower costs.3 8he marketing manager is referring to Bord)s _____. a. marketing strategy b. market tactics c. business portfolio d. mission statement e. competitive advantage (Answer d! p. "4! ,oderate% --. 8o increase its ;.S. market share0 Starbucks has stepped up efforts in the areas of product availability and promotion. 8hese are e1amples of broad _____. a. marketing ob+ectives b. marketing strategies c. marketing goals d. marketing tactics e. none of the above (Answer b! p. -9! ,oderate% -1

-/. @evlon has clearly defined its 2mission3 of selling lifestyle and self-e1pression. As the firm prepares to launch its strategic plan0 the mission needs to be turned into detailed _____ that guide the whole company. a. sets of strategies b. sets of tactics c. sets of product mi1es d. supporting ob+ectives e. sets of promotional tools (Answer d! p. "4! ,oderate% -5. ,cFonald)s has traditionally been preoccupied with its current businesses and how to keep them going. At has been accused of being complacent when it comes to opportunities in its constantly changing environment. _____ involves adapting ,cFonald)s to capitaliDe upon opportunities in its constantly changing environment. a. =ong-range planning b. Annual planning c. Strategic planning d. Gperational planning e. None of the above (Answer c! p. "#! ,oderate% -#. :olgate toothpaste0 the flagship product of :olgate-<almolive :ompany0 has been a success for generations. 8he parent company)s success is so well known that it could enter the solar energy business0 but that would not take advantage of its core competency0 providing a plethora of brands to large groups of customers. 8his reflects that :olgate-<almolive should base its mission on its _____. a. market environment b. distinctive competencies c. bottom-line orientation d. resource strengths e. sales forecast (Answer b! p. "4! ,oderate% -.. All of the following are problems with matri1 approaches0 e1cept which one( a. Bormal planning approaches can place too much emphasis on marketshare growth or growth through entry into new markets. b. ,any companies can plunge into unrelated and new high-growth businesses that they did not know how to manageHwith bad results. c. ,any companies often too *uickly abandon0 sell0 or milk to death their healthy mature businesses. d. ,any firms have dropped formal matri1 methods in favor of more customiDed approaches that are better suited to their specific situations. e. A and 6 (Answer d! p. -1! ,oderate%

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-4. Starbucks has introduced a debit card that lets customers prepay for coffee and snacks. Starbucks management is considering whether the company can achieve deeper _____. a. market development b. product development c. diversification d. market penetration e. product adaptation (Answer d! p. --! ,oderate% /9. 'al-,art0 the world)s largest retailer0 has successfully launched its stores in ,e1ico0 :anada0 the ;.>.0 and 7ermany0 among others. 'al-,art is considering _____ as a growth strategy. a. market penetration b. product development c. demographic markets d. geographical markets e. A and : (Answer d! p. --! ,oderate% /1. All of the following are reasons that a firm might want to abandon products or markets0 e1cept which one( a. 8he market environment might change0 making some of the products less profitable. b. A strong competitor has opened shop ne1t door. c. 8he economic climate is showing signs of recovery. d. 8he firm has grown too fast. e. :ompetition has increased. (Answer c! p. -/! ,oderate% /&. :ompanies increasingly are partnering with other members of the supply chain to improve the performance of the customer _____. a. e1perience b. satisfaction c. value-delivery network d. needs and wants e. none of the above (Answer c! p. -#! ,oderate%

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/". An its *uest to create customer value0 ,cFonald)s is effective only to the e1tent that _____. a. it pioneered the fast-food industry b. ,cFonald)s finely tuned system delivers a high standard of *uality and service. c. it successfully partners with its franchises0 suppliers0 and others to +ointly deliver e1ceptionally high customer value. d. ,cFonald)s hamburgers are loved all over the world. e. customers relate to the promotional gimmicks being displayed. (Answer c! p. -#! ,oderate% /-. ,ultinationals like ?onda ,otor :o. and 'al-,art stores have designed programs to work closely with their suppliers to help them reduce their costs and improve *uality. 8his illustrates the importance of an efficient _____. a. business model b. low-cost operator c. product mi1 d. value-delivery network e. problem-solver (Answer d! p. -#! ,oderate% //. _____ is the marketing logic by which a company hopes to achieve profitable customer relationships. a. <rice b. 6eing a low-cost operator c. A consistent product mi1 d. ,arketing strategy e. Amplementing a differentiation strategy (Answer d! p. -4! :hallenging% /5. ?oliday Ann has divided the total customer market into smaller segments and selected the most promising segments. Feciding how to service these segments is called _____. a. targeting b. segmentation c. positioning d. all of the above e. none of the above (Answer c! p. /9! ,oderate% /#. A company)s marketing strategy entails three steps _____0 _____0 and _____. a. product! price! promotion b. market segmentation! target marketing! market positioning c. marketing analysis! planning! implementation d. analysis! implementation! control e. problem identification! information search! decision --

(Answer b! p. /9! ,oderate% /.. 'hat is wrong with the following mission statement( 28he goal of American Burniture is to sell modern home furnishings to today)s consumer.3 a. At is product oriented. b. At is vague. c. At is too generic. d. All of the above. e. None of the above. (Answer d! pp. ".I"4! ,oderate% /4. 'hen the makers of a ballpoint pen state they are in the communication e*uipment business0 they are defining their mission too _____. a. narrowly b. realistically c. specifically d. broadly e. early (Answer d! p. ".! $asy% 59. 8he first step in strategic planning is to _____. a. set ob+ectives and goals b. develop the business portfolio c. define the company mission d. plan marketing strategies e. identify a problem (Answer c! p. "#! $asy% 51. 8he first step in the marketing control process is to _____. a. measure performance b. evaluate performance c. set goals d. take corrective action e. study the production process (Answer c! p. /#! $asy% 5&. As Starbucks continues to grow0 it is faced with myriad challenges during the implementation of marketing plans. ?ence0 the marketing department must practice constant _____. a. strategic control b. corrective action c. performance measurement d. marketing control e. environmental scanning (Answer d! p. /#! $asy%

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5". 8he steps in the marketing control process include all0 e1cept which one( a. Setting goals. b. ,easuring performance. c. 8aking corrective action. d. Fefining the mission. e. None of the above. (Answer d! p. /#! :hallenging% 5-. 8o be successful at planning good strategies0 companies must also be effective at _____. a. marketing analysis b. marketing implementation c. marketing control d. marketing audits e. : and F (Answer b! pp. //I/55! ,oderate% 5/. An increasingly large number of firms are changing their organiDational focus from _____ to _____. a. product management! functional management b. product management! territory management c. brand management! customer relationship management d. territory management! functional management e. global management! regional management (Answer c! p. /#! :hallenging% 55. According to the authors of your te1t0 many managers think 2implementation3 is as important as or even more important than 2_____.3 a. analysis b. control c. strategy d. customer focus e. all of the above (Answer c! p. //! :hallenging% 5#. ;nder the _____ organiDational format of marketing departments0 different marketing activities are headed by a functional specialist. a. geographic b. product management c. market management d. customer-centered e. functional (Answer e! p. /5! ,oderate%

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5.. ,odern marketing departments are arranged into the following ways0 e1cept which one( a. Bunctional organiDation. b. ,arket management organiDation. c. <roduct management organiDation. d. Jertical organiDation. e. ?oriDontal organiDation. (Answer d! p. /5! ,oderate% 54. 8he _____ organiDational format was founded by <rocter and 7amble in 14&4. a. functional b. market management c. geographic d. product management e. vertical (Answer d! p. /5! ,oderate% #9. 8he _____ organiDational system)s main advantage is that the company is organiDed around the needs of specific market segments. a. product management b. market management c. geographic management d. vertical management e. functional management (Answer b! p. /#! :hallenging% #1. ,ore and more companies are shifting their brand management focus toward _____. a. $@< b. :@, c. 6:7 d. 6<Gs e. A6:s (Answer b! p. 51! ,oderate% #&. An the 6:7 matri10 income from _____ will help finance the company)s *uestion marks and stars. a. dogs b. S6;s c. cash cows d. sales revenue e. overseas operations (Answer c! p. -1! ,oderate%

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#". An the 6oston :onsulting 7roup approach0 _____ provide(s% a measure of market attractiveness. a. relative market share b. S6;s c. cash cows d. market growth rate e. dogs (Answer d! p. -9! ,oderate% #-. An the 6oston :onsulting 7roup approach0 _____ serve(s% as a measure of company strength in the market. a. relative market share b. S6;s c. cash cows d. market growth rate e. none of the above (Answer a! p. -9! ,oderate% #/. 8he 6ank of New Kork bought <ershing0 a part off-shore 6<G firm with operations in Andia0 from :redit Suisse Birst 6oston. 8he 6ank of New Kork is pursing _____ for growth. a. product development strategy b. market development strategy c. diversification strategy d. market penetration strategy e. product adaptation (Answer c! p. -/! ,oderate% !rue%&alse #5. An the 6oston :onsulting 7roup approach0 relative market share provides a measure of market attractiveness. (Answer Balse! p. -9! ,oderate% ##. 8he product management organiDational format was founded by <rocter and 7amble. (Answer 8rue! pp. /5I/#! ,oderate% #.. ,arketing strategy is the marketing logic by which a company hopes to achieve profitable customer relationships. (Answer 8rue! p. -4! :hallenging% #4. Starbucks has introduced a debit card that lets customers prepay for coffee and snacks. Starbucks management is considering whether the company can achieve deeper product development. (Answer Balse! p. -/! ,oderate% -.

.9. 8he first step in strategic planning is to define the company mission. (Answer 8rue! p. "#! ,oderate% .1. 8he first step in the marketing control process is to measure performance. (Answer 8rue! p. /#! ,oderate% .&. 8he image a product reflects in the minds of consumers is called market segmentation. (Answer Balse! p. /9! $asy% .". Strategic control involves looking at whether a company)s basic strategies are well matched to its opportunities. (Answer 8rue! p. /#! ,oderate% .-. Strategic market planning is the task of selecting an overall company strategy for long-run survival and growth. (Answer 8rue! p. /-! ,oderate% ./. A market segment consists of consumers who respond in different ways to a given set of marketing efforts. (Answer Balse! p. /9! ,oderate% .5. 8hrough annual marketing planning0 the company decides what it wants to do with each business unit. (Answer Balse! p. /-! ,oderate% .#. 7uided by marketing strategy0 the company designs a marketing mi1 made up of factors under its controlHproduct0 price0 place0 and promotion. (Answer 8rue! p. /&! ,oderate% ... A company with limited resources might decide to serve all segments of a market. (Answer Balse! p. /9! ,oderate% .4. ,arketing mi1 is the set of uncontrollable0 marketing tools that the firm can use to influence the demand for its product. (Answer Balse! p. /&! ,oderate% 49. 8he elements of the marketing mi1 commonly known as the 2four <s3 include product0 price0 place0 and promotion. (Answer 8rue! p. /&! $asy% 41. ?oliday Ann has divided the total customer market into smaller segments and selected the most promising segments. Feciding what position it wants to occupy in these segments is called targeting. (Answer Balse! p. /9! ,oderate%

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4&. At America Gnline0 2we create customer connectivity0 anytime0 anywhere03 is a product-oriented business definition. (Answer Balse! p. ".! ,oderate% 4". At America Gnline0 2we provide online services03 is a market-oriented business definition. (Answer Balse! p. ".! ,oderate% 4-. 2At Nike0 we sell shoes3 is a market-oriented business definition. (Answer Balse! p. ".! ,oderate% 4/. @evlon has clearly defined its 2mission3 of selling lifestyle and self-e1pression. As the firm prepares to launch its strategic plan0 the mission needs to be turned into a detailed set of ob+ectives that guide the whole company. (Answer 8rue! p. "4! ,oderate% 45. ,aking more sales to current customers without changing a firm)s products is market penetration. (Answer 8rue! p. --! ,oderate% 4#. ;nlike former strategic planning efforts0 today)s strategic planning has been centraliDed. (Answer Balse! p. -&! ,oderate% 4.. ,ission statements must fit the market environment0 as indicated here by the 7irl Scouts of America)s mission 2where girls grow strong.3 (Answer 8rue! p. "4! ,oderate% 44. 8he collection of businesses and products that make up a company is called its marketing strategy. (Answer Balse! p. -4! $asy% 199. An S6; can be a company division0 a product line within a division0 or sometimes a single product or brand. (Answer 8rue! p. -9! $asy% 191. An the 6oston :onsulting 7roup approach0 relative market share serves as a measure of company strength in the market. (Answer Balse! p. -9! $asy% 19&. ,ore and more companies are shifting their brand management focus toward customer relationship management. (Answer 8rue! p. 51! $asy%

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19". A6: Bortunes has +ust developed a formal statement of its purpose. 8his firm has put together a mission statement. (Answer 8rue! p. ".! $asy% 19-. ,ission statements should be realistic and general in nature. (Answer Balse! p. "4! ,oderate% 19/. ,ission statements should both fit the market environment and be motivating. (Answer 8rue! p. "4! $asy% Essay 195. Fefine strategic planning. Fiscuss the steps involved. 8he process of developing and maintaining a strategic fit between the organiDation)s goals and capabilities and its changing marketing opportunities is called strategic market planning. At the outset0 beginning at the corporate level0 each company must define its overall purpose and mission. 'hat is our business( 'ho is the customer( 'hat do our customers value( Answers to these *uestions are crucial in writing a clear mission statement. 8hus0 mission statements need to be carefully defined in terms of customer needs. ,issions should be realistic0 motivating0 and fit the market environment. ,issions lead to setting business and marketing ob+ectivesLgoals in the planning process. 8his is followed by decisions regarding what portfolio of businesses and products is best for the company and how much support to give each one. Ne1t0 each business and product develops detailed marketing and other functional strategies. An this step0 plans are drawn at the business unit0 product0 and market levels in support of company wide plans. (p. "#! ,oderate% 19#. 'hat is business portfolio planning( Fiscuss the 6oston :onsulting 7roup)s product portfolio analysis method. A business portfolio is the collection of businesses and products that make up the company. 6usiness portfolio planning entails two steps. Birst0 there is an analysis of the company)s current business portfolio0 followed by what businesses should receive more0 less0 or no investment. Second0 it must shape the future portfolio by developing strategies for growth and downsiDing. 8he 6oston :onsulting group matri1 evaluates S6;s on two important dimensions the attractiveness of the S6;)s market or industry growth rate and the strength of the S6;)s position or relative market share in that market or industry. 8he growth-share matri1 defines four types of S6;s stars0 cash cows0 *uestion marks0 and dogs. (pp. -9I-1! ,oderate%

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19.. 'hat are some problems with matri1 approaches( 8he 6:7 and other portfolio planning approaches can be difficult to e1ecute0 time consuming0 and also costly to implement. Fefining S6;s and the measurement of relative market share and growth can be a difficult task too. A serious flaw with these approaches is that although the approaches are helpful for classifying current businesses0 little or no advice is available for future planning. 8here are several e1amples of firms that have plunged into new unrelated market0 only to scale back and get back to basics based on their core competencies. (pp. -9I-11! ,oderate% 194. 8he 6:7 is a useful approach to evaluate current businesses. 'hat devices are available to firms to identify growth opportunities in the future( 8he productLmarket e1pansion grid is a useful device for identifying growth opportunities in the future. 8here are four strategies available to companies market penetration0 market development0 product development0 and diversification. ,arket penetration entails making more sales to current customers without changing products. ,arket development involves identifying and developing new markets for a company)s products. New markets include demographic groups and geographic regions0 among others. :ompanies can consider product development0 offering modified or new products to current markets. Fiversifying companies might consider ac*uiring or starting new businesses unrelated to their core competencies. Fiversifying too broadly can be detrimental tin the long run. (p. --! ,oderate% 119. 'hat does the term 2value-delivery network3 mean( $1plain. Bor decades0 marketers have traditionally created value to satisfy customer needs and wants. 8oday0 the manufacturer or retailer needs to look beyond its own value chain and into the value chains of suppliers and distributors. ,ore companies are partnering with other members of the supply chain to improve the performance of the customer value-delivery network. 'hen 'al-,art supplies vital sales data to <M7 regarding its brands0 it is helping <M7 streamline its operations and reduce costs. 8his information in turn gets transmitted to <M7)s vendors0 who save money in turn. An efficient supply chain process benefits customers. (p. -#! ,oderate%

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111. According to the authors of your te1t0 the four <s concept of the marketing mi1 takes a seller)s view of the market0 not the buyer)s view. $1plain. An today)s day and age of customer relationship marketing0 the four <s are described as the four :s. An lieu of product0 there is customer solution! that is0 customers buy solutions to their problems or look for value in products. :ustomers are more interested in the total costs of obtaining0 using0 and disposing of a product. 8hat is0 customer cost replaces price in customer relationships. 8he place element of the marketing mi1 focuses on convenience. :onvenience in availability is the central focus of customers. Binally0 customers and marketers want to-way communication. (p. /"! :hallenging% 11&. Fefine marketing strategy. Fiscuss the steps in formulating marketing strategy. 8he marketing logic by which a company hopes to achieve profitable relationships is called its marketing strategy. ,arketing strategy formulation entails three specific steps market segmentation0 targeting0 and positioning. 8he process of dividing a market into distinct groups of buyers with different needs0 characteristics0 or behavior is called market segmentation. 8arget marketing involves evaluating each market segment)s attractiveness and selecting one or more segments to enter. A company should target segments in which it can profitably generate the greatest customer value and sustain it over time. <ositioning is defined as the image a product pro+ects in the eyes of consumers. $ffective positioning begins with actually differentiating the company)s marketing offer so that it gives consumers greater value. (p. //! ,oderate% 11". Fefine marketing planning. 6riefly outline the ma+or steps in a marketing plan. ,arketing planning involves deciding on marketing strategies that will help the company achieve its overall strategic ob+ectives. A detailed marketing plan is needed at the business0 product0 or brand level. An e1ecutive summary is the first step in the plan. At contains a brief summary of the main goals and recommendations of the plan for management review. 8he current marketing situation describing the target market and company)s position in it0 including information about the market0 product performance0 competition0 and distribution is presented. An the ne1t section0 ma+or threats and opportunities are presented. 8he plan then states ma+or ob+ectives for the brand and outlines the specifics of a marketing strategy for achieving them. An addition0 action programs for implementing the marketing strategy along with the details of a supporting marketing budget are presented. 8he final section outlines the controls used to monitor progress and corrective action. (p. /-! ,oderate%

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11-. ,arketing departments are organiDed in several ways. Fiscuss the most common forms of marketing organiDations. Some common forms of marketing department organiDation include functional organiDation0 geographical organiDation0 product management organiDation and market management organiDation. ;nder a functional department organiDation0 a functional specialist-sales manager0 advertising manager0 or market research manager is responsible for all marketing activities. ;nder a geographic organiDation0 sales and marketing people are assigned to specific countries0 regions0 and districts. <roduct management organiDation first appeared at <M7 in the 14"9s. ;nder this approach0 a product manager develops and implements a complete strategy and marketing program for a specific product or brand. ;nder a market or customer management organiDation0 the company is organiDed around the needs of specific customer segments. ?erein0 one product line is sold to many different types of markets and customers that have different needs and preferences. (p. /5! ,oderate% 11/. 6riefly mention the components of a strategic plan. A strategic plan consists of a market-oriented mission statement. 8his plan must also set company ob+ectives and goals. At designates the business portfolio of businesses and products it will pursue. Strategies for growth and downsiDing must be put in place. =ast but not least0 a plan for partnering to build customer relationships must be added. (p. "#! $asy% APPL'CA!' N C N!EN!: Multiple"Choi#e $uestions 115. 8he company you work for is on the 2right track3 because its mission statement fits the _____ environment. a. economic b. political-legal c. social-cultural d. market e. natural (Answer d! p. "4! ,oderate% 11#. <aul <ierce is busy working with other managers evaluating the products and businesses making up their company. <aul is engaged in ____. a. strategic business unit analysis b. preparing a business portfolio c. portfolio analysis d. marketing planning e. marketing auditing (Answer c! p. -9! ,oderate% /-

11.. >imball 7ardens is a company that operates as two distinctive businessesHone that sells lawn and garden products and one that markets booklets. $ach business is called a _____. a. separate entity b. strategic business unit (S6;% c. profit center d. division e. business portfolio (Answer b! p. -9! :hallenging% 114. ,ountain ?ome Barms is now using the productLmarket e1pansion grid. 8he owners have found it to be *uite useful for identifying _____. a. target markets b. growth opportunities c. key customers d. new products e. suppliers (Answer b! p. --! $asy% 1&9. Kou have been given the assignment to develop new markets for your current products and services. 'hich of the following might work( a. @eviewing new demographic markets. b. @eviewing new geographic markets. c. @eviewing current sales records. d. @eviewing current customer attitudes. e.A and 6 (Answer d! p. --! :hallenging% 1&1. Kour te1tbook suggested that Starbucks might consider a _____ strategy. 8his strategy would allow the company to start up or buy businesses outside of its current products and markets. a. product development b. market development c. market penetration d. diversification e. 6 or : (Answer d! p. -/! $asy%

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1&&. =ucy GrtiD has +ust prepared a <ower<oint presentation of the marketing process to show at a sales meeting. Af you look closely0 you will see that _____ stand(s% in the center. a. sales goals b. customers c. company ob+ectives d. customer retention e. A and : (Answer b! p. -5! ,oderate% 1&". 8elStar <lastics is in the process of dividing a market into distinct groups of buyers with different needs0 characteristics0 or behavior who might re*uire separate products or marketing programs. 'hich is this firm doing( a. ,arket development. b. ,arket diversification. c. ,arket penetration. d. ,arket skimming. e. ,arket segmentation. (Answer e! p. /9! $asy% 1&-. <aul <endergraff has discovered a group of potential customers who seem to respond in a similar way to a given set of marketing efforts. <aul has discovered a(n% ______. a. target market b. market segment c. market d. gold mine e. undefined niche (Answer b! p. /9! ,oderate% 1&/. <aul <endergraff is evaluating each market segment)s attractiveness and is in the process of selecting one or more segments to enter. 'hat is <aul doing( a. 8arget marketing. b. ,arketing segmenting. c. ,arketing. d. ,arket positioning. e. Selecting JA=S. (Answer a! p. /9! $asy% 1&5. Cill @eno has researched new markets and has decided which segments to enter. Ne1t she should decide what _____ her company should occupy in those segments. a. position b. place c. rank d. rating e. percentage of space (Answer a! p. /9! $asy% /5

1&#. $nvironmental Service :ompany wants to practice effective positioning. 8he owners have discovered that it begins with actually _____ the company)s marketing offer so that it gives consumers more value. a. differentiating b. promoting c. advertising d. selling e. representing (Answer a! p. /&! ,oderate% 1&.. Bavorite ,emories specialiDes in serving market segments that ma+or competitors overlook and ignore. 'hat strategy does this firm use( a. ,arket follower. b. ,arketer challenger. c. ,arket seeker. d. ,arket nicher. e. None of the above. (Answer d! p. /9! $asy% 1&4. $merson Studios0 a chain of &/ portrait stores in five states0 has organiDed its marketing organiDation in to different marketing activities that are headed by specialists. 'hat is this organiDation called( a. 7eographic. b. <roduct. c. Grganic. d. Bunctional. e. ,arket. (Answer d! p. /5! ,oderate% 1"9. <eter :ramer is involved in evaluating the results of marketing strategies and plans and taking corrective action to ensure that ob+ectives are attained. 'hat do we call <eter)s current work( a. ,arketing control. b. ,arketing planning. c. Strategic planning. d. 8actical planning. e. Auditing. (Answer a! p. /#! ,oderate%

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1"1. Cuanita :astro is looking at whether her company)s strategies are well matched to its opportunities. At seems that Cuanita is into _____. a. marketing control b. operating control c. strategic control d. loss of control e. marketing auditing (Answer c! p. /#! $asy% 1"&. 8he pharmaceuticals division of Gmni ?ealthcare holds low market share in a highgrowth market. An order to increase market share0 managers may decide to _____. a. continually add new products in the market b. implement a harvest strategy c. use money from a cash cow to promote the pharmaceuticals division d. divest the S6; e. A or : (Answer e! p. /.! :hallenging% 1"". Acme0 Anc.0 has modified the production processes of its widgets and gadgets in order to tap into the $astern $uropean market. Acme is likely following a _____ strategy. a. market penetration b. market development c. diversification d. A or : e. product development (Answer b! p. --! :hallenging% 1"-. 'al-,art relies on sound relationships with its low-cost suppliers in order to pass low prices on to consumers. 8hus0 forming a _____ is crucial to 'al-,art)s success. a. value-delivery network b. value chain c. customer relationship management policy d. market concept philosophy e. diversification strategy (Answer a! p. -#! :hallenging%

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1"/. 8o move a *uestion mark to a star0 what might a marketer have to do( a. <romote aggressively. b. ?old market share at the same level. c. Ancrease price. d. increase market share. e. A or F (Answer e! p. -1! :hallenging% Short Ans(er 1"5. 'hy should a mission statement be market oriented instead of product or technology oriented( A market-oriented mission statement defines the business in terms of customer needs! products and technologies become outdated0 but basic market needs may last forever. (p. ".! ,oderate% 1"#. 'hy should a mission statement be 2motivating3 instead of stated in terms of sales or profits( Sales and profits are only a reward for undertaking a useful activity! a company)s employees need to feel that their work is significant. (p. "4! ,oderate% 1".. 'hat provides the best business portfolio( 8he best business portfolio is the one that best fits the company)s strengths and weaknesses to environmental opportunities. (p. -9! :hallenging% 1"4. 'hat is a strategic business unit (S6;%( An S6; is a key part of a businessHwhether a product0 product line0 department0 or an entire divisionHwhere managers place a ma+or emphasis! an S6; is typically a ma+or profit center with a separate mission. (p. -9! $asy%

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1-9. Anto what 6:7 *uadrant does a high-share0 high-growth S6; fall( At falls into the 2star3 category. (p. -1! $asy% 1-1. 'hat type of strategy might a cash cow follow( A cash cow will generate cash that could0 in turn0 be used to finance andLor promote *uestion marks. (p. -1! $asy% 1-&. According to the productLmarket e1pansion grid0 what strategy would Starbucks follow when attempting to increase sales of current products to current customers( Starbucks would follow a market penetration strategy in this scenario. (p. --! ,oderate% 1-". ?ow might Starbucks implement a market development strategy( Starbucks might attempt to identify and develop new markets for its current products. (p. --! :hallenging% 1--. According to the productLmarket e1pansion grid0 what strategy would ,cFonald)s follow when offering a salad bar option during lunch hours( An this scenario0 ,cFonald)s would follow a product development strategy. (p. -/! ,oderate% 1-/. $1plain how a company begins the strategic planning process at the corporate level. At the corporate level0 the company starts the strategic planning process by defining its overall purpose and mission! the mission is then turned into detailed supporting ob+ectives. (p. "#! :hallenging% 1-5. ?ow might the 6:7 matri1 represent a life cycle( ,any S6;s start out as *uestion marks0 then move into the star category if they succeed! stars eventually become cash cows0 then perhaps0 dogs. (p. -1! ,oderate%

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1-#. Anto what *uadrant of the productLmarket e1pansion grid would a 2new and improved3 product fall( 8he 2new and improved3 product would fall into the product development *uadrant. (p. -/! ,oderate% 1-.. 7ive two situations in which a company may develop strategies for downsiDing its business portfolio. Such strategies may prevail if a company has grown too fast or has entered areas where it lacks e1perience0 for e1ample. (p. -/! :hallenging% 1-4. ?ow are partner relationship management and the value chain related( ,arketers must work closely with partners in other company departments to form an effective value chain that serves the customer. (p. -5! $asy% 1/9. $1plain how a marketer of baking soda may attempt to attract more than one market segment. Some consumers buy baking soda as a baking ingredient and some consumers buy baking soda to use as a deodoriDer0 for e1ample. 8he marketer will focus on both uses in the marketing mi10 such as how the product is promoted. (p. /9! :hallenging% 1/1. 7ive an e1ample of a product for which segmenting the market would not be useful. 8here are numerous e1amples of such products that can be mass marketed. Gne e1ample is 8ylenol! focusing on demographics or geographics0 for e1ample0 would not be useful. (p. /9! ,oderate% 1/&. ?ow might a marketer of pens alter the 2product3 portion of the marketing mi1 when targeting female college students versus male college students( 8he marketer may use feminine colors and a spiral-flower stripe0 for e1ample0 when marketing its pens to the females! when targeting males0 more neutral colors might be used. (p. /&! ,oderate%

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1/". 'hat role does the marketing mi1 play in positioning( 8he marketing mi1 creates a portion of the marketer)s image in the marketplace. 8he marketing mi1 creates a 2package3 with which consumers can compare competitors. (p. /"! $asy% 1/-. 'hy is marketing analysis such an important part of marketing management( 8his function allows the marketer to analyDe environmental opportunities and threats which0 in turn0 allows the marketer to determine which opportunities to pursue. Brom this starting point0 the market can continue with planning0 implementation0 and control. (p. /-! :hallenging% 1//. 7ive a situation in which the suggested strategy for a dog might not be to divest. :onsider a new technology that is being launched into the market. Af managers of the dog are merely waiting to implement that new technology or to somehow incorporate it into the dog0 moving the dog into a different 6:7 *uadrant0 divesting would not have been practical. (p. -1! ,oderate% S#enario Bun-Spot Bun <ark began as a small amusement park in 14./. 'ith nothing more than a merry-go-round0 a slide0 pony rides0 and an ice cream stand0 Bun-Spot grew into a popular family attraction with &9 rides0 a restaurant0 and an outdoor performing arts theater. 2,y wife0 7ail0 and A didn)t know what we were getting into03 commented @on ?art0 the owner. 2'e +ust knew that weekenders coming to the lakes in our rural area represented an untapped market.3 8oday0 thousands of visitors flock to Bun-SpotHfamilies0 children of all ages0 even senior citiDens who en+oy strolling through the gardens and arbor. 28here)s something here for everyone03 7ail ?art said with a smile. 2FoDens of companies hold annual company picnics here. 'e have welcomed class field trips. And we even had one wedding here at the parkN3 2?ere)s the funny thing03 @on chimed in. 2'e really don)t know why we)ve been so successfulN 8here is nothing else like Bun-Spot Bun <ark in the area. 'e were +ust lucky.3 2A think it)s the ambience of the park03 7ail added0 2that has brought so many visitors. 'e provide a Ototal package) of entertainment. <lus0 we try to change our rides and various attractions from time to time.3 @on and 7ail ?art admitted that making every visitor happy is a priority. 28hat has always been our philosophy03 they said. 2And we)ve always been able to deliver on that because we)ve never allowed ourselves to grow too big too *uickly.3 5&

1/5. Fescribe two critical factors impacting the strategic plan at Bun-Spot. Answers will vary! however0 @on and 7ail)s continued success will depend on their ability to make visitors as happy as possible and their ability to continue to provide a variety of entertainment options. (p. "#! ,oderate% 1/#. 'ould you consider Bun-Spot)s mission statement to be market oriented( $1plain. 8he mission at Bun-Spot is defined in terms of customer needs. <roviding the fastest roller coaster0 the greatest variety of ice cream flavors0 or the scariest spook house is not as important0 for e1ample0 as providing top-notch customer attention and attractions appealing to a variety of visitors at this small0 rural park. (p. ".! ,oderate% 1/.. At this point0 how do @on and 7ail monitor Bun-Spot)s business portfolio( @on and 7ail make a continuous assessment of Bun-Spot)s strengths and weaknesses0 compared to the opportunities in the environment. Af a competitor should appear within a relatively close distance0 for e1ample0 @on and 7ail will likely have to alter the business portfolio to offset the competition. (p. -9! :hallenging% 1/4. Anto which *uadrant of the 6:7 matri1 does Bun-Spot fall( 'hy( Bun-Spot Bun <ark is a star0 currently situated in a high-growth0 high-share position. (p. -1! $asy% 159. ?ow might @on and 7ail implement a market penetration strategy at Bun-Spot( @on and 7ail would maintain their current entertainment offering and continue to deliver customer attention to their e1isting customers. (p. --! ,oderate% 151. An what way do @on and 7ail implement a product development strategy at BunSpot( 8he owners at Bun-Spot strive to provide new offerings and entertainment options for their visitors. (p. -/! ,oderate%

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15&. 'hat are three possible emerging conditions that may cause the ?art)s to develop a downsiDing strategy at Bun-Spot( Gver time0 less profitable operations might need to be eliminated! for e1ample0 children may love pony rides but maintaining the animals in a Doo setting may become costly. An economic recession or a new0 close-by competitor may lead to downsiDing. (p. -/! :hallenging% 15". 'ho comprises Bun-Spot)s target market( 8he target market here includes anyone who desires a rela1ing0 fun day or evening at a small amusement park. Bamilies with children are likely the primary target market. (p. /9! $asy% 15-. Af you had to select a primary market segment that is crucial to the success of BunSpot0 who would it be( 'hy( Answers will vary! however0 on a weekly basis0 Bun-Spot likely relies on families with children for a steady stream of revenues. (p. /9! ,oderate% 15/. 'hat role do service products play at Bun-Spot( 'ith the e1ception of meals and refreshments0 most of what visitors receive at BunSpot are service products. (p. /"! $asy%

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