Strategic Management Test Bank by Cravens

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All Possible Questions With Answers

Chapter 1

New Challenges for Market-Driven Strategy

True/False Questions

1. The underlying logic of market-driven strategy is that production needs are the starting point in business strategy.

2. Customer linking is an example of an outside-in process.

3. The outside-in organizational processes connect the organization to the external environment, providing market feedback and forging external relationships.

4. Pricing is an example of an outside-in process.

5. The inside-out processes play a key role in offering direction for the spanning and outside-in capabilities, which respond to the customer needs and requirements identified by the inside-out processes.

6. The organizational process view of distinctive capabilities requires shifting away from the traditional specialization of business functions toward a cross-functional process perspective.

7. Superior customer value results from a very favorable use experience of the customer compared to expectations of the customer and the value offerings of competitors.

8. Corporate objectives are concerned with resolving questions about the business the firm should be in, where it should focus, and its enduring strategic purpose.

9. Synergies highlight competencies, resources, and capabilities that drive efficiency and effectiveness in the business.

10. The purpose of strategic positioning is to locate the people (or organizations) that management wishes to serve in the product-market.

Multiple Choice Questions

11. _____ is a business perspective that makes the customer the focal point of a company’s total operations.
A. Market orientation
B. Competitive parity
C. Value chain integration
D. Business scaffolding

12. Getting all business functions working together to provide superior customer value is referred to as _____.
A. customer relationship management
B. competitor intelligence
C. cross-functional coordination
D. centralization

13. _____ are complex bundles of skills and accumulated knowledge, excised through organizational processes, that enables firms to coordinate activities and make use of their assets.
A. Business clusters
B. Competitor faculties
C. Cross functions
D. Distinctive capabilities

14. _____ consist(s) of the benefits and costs resulting from the purchase and use of products as perceived by the buyer.
A. Customer value
B. Distinctive capabilities
C. Spanning process
D. Market sensing

15. _____ consist(s) of deciding the scope and purpose of the business, the objectives, and the resources necessary to achieve the objectives.
A. Marketing strategy
B. Corporate strategy
C. Market sensing
D. Channel bonding

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16. With regard to corporate strategy, _____ is/are concerned with resolving questions about the business the firm should be in, where it should focus, and its enduring strategic purpose.
A. corporate objectives
B. synergies
C. scope
D. resource allocation

17. With regard to a corporate strategy framework, _____ define(s) what the corporation is and what it does and provides important guidelines for managing and improving the corporation. 
A. resource allocation
B. synergies
C. objectives
D. management’s vision

18. In a corporate strategy, _____ indicate(s) the dimensions of performance upon which to focus and the levels of achievement required.
A. corporate objectives
B. synergies
C. vision
D. scope

19. Which of the following is the final component of the corporate strategy?
A. Scope
B. Synergy
C. Corporate objective
D. benchmarking

20. A _____ is a single product or brand, a line of products, or a mix of related products that meets a common or a group of related market needs, and its management is responsible for the basic unctions.
A. market section
B. strategic business unit
C. business segment
D. marginal piece

21. Which of the following is the first step in a marketing strategy process?
A. Market-driven program development
B. Designing market-driven strategy
C. Identifying and evaluating markets, segments, and customer value
D. Implementing and managing market-driven strategy

22. Which of the following stages of marketing strategy process consists of brand, value-chain, pricing, and promotion and selling strategies designed and implemented to meet the value requirements of targeted buyers?
A. Implementing and managing market-driven strategy
B. Designing market-driven strategy
C. Identifying and evaluating markets, segments, and customer value
D. Market-driven program development

23. Which of the following stages of marketing strategy process considers organizational design and marketing strategy implementation and control?
A. Implementing and managing market-driven strategy
B. Designing market-driven strategy
C. Identifying and evaluating markets, segments, and customer value
D. Market-driven program development

24. _____ offer(s) a company the opportunity to focus its business on the requirements of one or more groups of buyers. 
A. Corporate resources
B. Market segmentation
C. Business composition
D. Distinctive capabilities

25. _____ are described by different characteristics of customers, the reasons that they buy or use certain products, and their preferences for certain brands of products.
A. Market shares
B. Strategic marketing objectives
C. Market segments
D. Corporate capabilities

26. _____ examines customer targeting and positioning strategies, marketing relationship strategies, and innovation and new product strategy.
A. Identifying markets, segments, and customer value
B. Implementing and managing market-driven strategy
C. Designing market-driven strategy
D. Market-driven program development

27. The purpose of _____ is to select the people (or organizations) that management wishes to serve in the product-market.
A. strategic positioning
B. benchmarking
C. customer linking
D. market targeting strategy

28. _____ is the combination of the product, value chain, price, and promotion strategies a firm uses to place itself against its key competitors in meeting the needs and wants of the buyers in the market target.
A. Positioning strategy
B. Customer relationship management
C. Customer linking
D. Market targeting strategy

29. _____ seeks to place the brand in the eyes and mind of the buyer and distinguish the product from those in competition.
A. Customer relationship strategy
B. Positioning strategy
C. Benchmarking
D. Value-chain strategy

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30. Which of the following activities is an example of promotion strategy?
A. Distinctive capabilities
B. Benchmarking
C. Public relations
D. Product positioning

Essay Questions

31. What does becoming market-oriented mean from a business perspective? What are its features?

32. Describe the characteristics of market-driven strategies.

33. Discuss how customers perceive value and how companies deliver customer value.

35. Discuss the steps involved in implementing marketing strategies.

Chapter 2

Markets and Competitive Space

True/False Questions

1. When modularization occurs, products become commodities.

2. The influence of competing brands becomes weaker with closer substitutability and more direct competition.

3. The product-variant product-market structure includes a broad group of products that satisfy a general, yet similar, need.

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4. Customer function considers the role or purpose of the good or service.

5. It is important to focus on the distributor of a product when defining the market, since the distributor drives demand for the product.

6. The value chain analysis considers the vertical network of firms involved in production.

7. A new competitor entering a market is likely to come from companies competing in other geographical regions with similar products.

8. Sales forecasts, typically, fall short of market potential.

9. In the initial stage of competition, the competitors concentrate on market share for end products and profits.

10. In the final phase of competition, companies involve in partnering with the objective of controlling industry standards.

Multiple Choice Questions

11. _____ refers to firms using simpler and less costly ways to match the value requirements offered by the products of incumbent firms serving the market.
A. Modularization
B. Commoditization of product designs
C. Disruptive innovation
D. Creating new market space

12. _____ changes products into commodities, making it difficult for companies to earn anything more than subsistence returns from those products.
A. Disruptive innovation
B. Modularization
C. Cannibalization
D. Segmentation

13. The purpose of _____ is to target new opportunities where buyers’ value requirements are not being satisfied by existing products. 
A. disruptive innovation
B. commoditization of products
C. benchmarking
D. creating new market space

14. The _____ product-market includes a broad group of products that satisfy a larger common need.
A. generic
B. product-type
C. product-variant
D. larger-type

15. Which of the following is the first step in defining and analyzing product-markets?
A. Forecasting market size
B. Determining the boundaries of the market
C. Analyzing competition
D. Predicting rate of change of the market

16. Which of the following is the second step in analyzing product-markets? 
A. Analyze competition
B. Form the product-market
C. Forecast market size and rate of change
D. Analyze end users

17. Which of the following is the final step in analyzing the competition?
A. Anticipating actions by competitors
B. Evaluating key competitors
C. Identifying and evaluating potential competitors
D. Identifying key competitors

18. Which of the following is the most direct type of competition?
A. Budget competition
B. Generic competition
C. Product-category competition
D. Product-variant competition

19. _____ analysis is horizontal and only covers similar types of firms and operating practices of the firms. 
A. Value chain
B. Industry
C. Market segmentation
D. Customer profile

20. According to Porter’s five competitive forces, _____ recognizes that active competition among industry members helps determine industry performance and it is the most direct and intense form of competition. 
A. rivalry among existing firms
B. threat of new entrants
C. threat of substitute products
D. bargaining power of suppliers

21. If critical inputs are in jeopardy or prices of those inputs are extraordinarily high, companies may pursue vertical integration strategies or develop collaborative relationships to reduce the:
A. rivalry among existing firms.
B. bargaining power of buyers.
C. threat of substitute products.
D. bargaining power of suppliers.

22. _____ is measured by comparing the share of the firm against the competitor with the highest market share in the segment.
A. Market segmentation
B. Relative market position
C. Product differentiation
D. Customer segment

23. Market entry by a new competitor is likely under which of the following conditions?
A. When markets have matured and growth is slow
B. When major market-entry barriers are present
C. When competition is limited to one or a few competitors
D. When market incumbents’ profit margins have declined

24. _____ is the maximum amount of product sales that can be obtained from a defined product-market during a specified time period.
A. Market potential
B. Sales forecast
C. Market share
D. Modularization

25. Which of the following is a major source for new competitors?
A. Companies already targeting similar customer groups with other products.
B. Companies competing in the same regions with different products.
C. Companies competing in a different product-market.
D. Companies with advanced unrelated technologies.

26. _____ is the upper limit of sales that can be achieved by all firms for a specified product-market over an indicated time period.
A. Market potential
B. Market share
C. Differential pressure
D. Absolute threshold

27. _____ refers to the expected sales for a defined product-market during a specified time period.
A. Market potential
B. Sales forecast
C. Market share
D. Modularization

28. Company sales divided by the total sales of all firms for a specified product-market determines the _____ of a particular firm.
A. market potential
B. absolute threshold
C. relative market position
D. market share

29. Which of the following is an advantage of using the time-series analysis in sales forecasting?
A. It utilizes historical data when forecasting.
B. It consumes the least amount of time in forecasting.
C. It is a very subjective type of analysis.
D. It is most effective when forecasting new or innovative products.

30. Which of the following is the final phase of competition?
A. Partnering of companies with the objective of controlling industry standards
B. Companies competing in identifying product concepts
C. Competitors concentrating on market share for end products and profits
D. Firms focusing on building competencies

Essay Questions

31. Explain the competitive box. Why is there a need for strategic thinkers to “think outside the competitive box”?

32. Discuss the differences between a generic product-market and a product-type product-market.

33. Identify the three guidelines for defining a product-market.

34. Explain how buyers make choices in products and brands.

35. Identify Porter’s five competitive forces that impact industry performance.

Chapter 3

Strategic Market Segmentation

True/False Questions
1. Market segmentation involves choosing market targets and positioning against alternatives to build competitive advantage.

2. Strategic segmentation is concerned with consumer lifestyles and the benefits that different types of consumers seek in choosing and purchasing consumer electronics.

3. Operational segmentation issues are concerned with delivering relevant messages to targets, and supporting the segmentation strategy at store level.

4. The term “market niche” refers to the largest segment of buyers in a specific market.

5. Market targeting consists of selecting one or more segments whose value requirements provide a good match with the organization’s capabilities.

6. Segmentation is employed by first choosing a segment randomly.

7. Market segmentation lays the groundwork for market targeting and positioning strategies.

8. The use situation variables describe brand-use and consumption.

9. Demographics are often more useful to describe consumer segments after they have been formed rather than to identify them.

10. Market concentration determines the extent to which the supplier must tailor the product to each organizational buyer.

Multiple Choice Questions

11. The differences in buyers according to how they use products, the needs and preferences that the products satisfy, and their consumption patterns create market _____. 
A. segments
B. futures
C. shares
D. structures

12. _____ is the process of identifying and analyzing sub-groups of buyers in a product-market with similar response characteristics. 
A. Flighting
B. Benchmarking
C. Market segmentation
D. Product differentiation

13. _____segmentation links to the management vision and crucial intent of corporate action plan, and emphasizes product benefits that different types of buyers seek. 
A. Managerial
B. Strategic
C. Operational
D. Advertising-oriented

14. _____ segmentation is concerned with allocating resources around segment targets, including them in marketing plans, and aligning organizational processes around them. 
A. Strategic
B. Network
C. Operational
D. Managerial

15. _____ issues are concerned with the marketing program changes needed to reach segment targets with advertising, promotions, and distribution systems.
A. Strategic segmentation
B. Managerial segmentation
C. Operational segmentation
D. Audience management

16. _____ consists of evaluating and selecting one or more segments whose value requirements provide a good match with the organization’s capabilities. 
A. Strategic segmentation
B. Managerial segmentation
C. Audience management
D. Market targeting

17. _____ variables consider how the buyer utilizes the product, such as purchasing a meal away from home for the purpose of entertainment.
A. Use situation
B. Buyers’ needs and preferences
C. Demographic
D. Purchase-behavior

18. Which of the following segmentation variables include brand awareness?
A. Use situation variables
B. Buyers’ needs and preferences variables
C. Demographic variables
D. Purchase-behavior variables

19. Which of the following segmentation variables describe brand-use and consumption?
A. Use situation variables
B. Buyers’ needs and preferences variables
C. Demographic variables
D. Purchase-behavior variables

20. The ______ variables divide a market into segments according to the buyers’ age, income, education, and other such characteristics. 
A. use situation
B. buyers’ needs and preferences
C. demographic 
D. purchase-behavior

21. ______ include attitudes and brand awareness. 
A. Use situation variables
B. Buyers’ needs and preferences variables
C. Demographic variables
D. Purchase-behavior variables

22. Which of the following is a use situation variable?
A. Lifestyle of buyers
B. Brand loyalty status
C. Prior experience with product
D. Frequency of purchase

23. Which of the following is a segmentation variable measuring buyers’ needs and preferences?
A. Quality of the product
B. Importance of purchase
C. Geographic location of buyers
D. Size of purchase

24. _____ occurs when two competing goods are seen as varying on any physical or nonphysical characteristics, including price. 
A. Benchmarking
B. Flighting
C. Lifestyle segmentation
D. Product differentiation

25. Which of the following types of segmentations of customer groups would be characterized as a response difference?
A. Frequency of purchase
B. Income
C. Industrial sector
D. Age

26. _____ see global brands as quality products and accept the cultural symbols they provide, and are less concerned with social responsibility issues.
A. Global dreamers
B. Antiglobals
C. Global citizens
D. Global agnostics

27. Which of the following segment of consumers do not base purchase decisions on a brand’s global attributes, and judge them on the same criteria they use for local brands?
A. Global Citizens
B. Global Dreamers
C. Antiglobals
D. Global Agnostics

28. _____ groups people according to the similarity of their answers to questions such as brand preferences or product attributes.
A. Perceptual maps
B. Cluster analysis
C. Linear discriminant analysis
D. Factor analysis

29. Which of the following forms of segmentation seeks to identify narrowly defined segments using one or more of the segmentation variables?
A. Mass customization
B. Variety-seeking strategy
C. Microsegmentation
D. Specialized division

30. The _____ strategy follows the logic that buyers who are offered alternatives may increase their total purchases of a brand.
A. variety-seeking
B. mass customization
C. microsegmentation
D. macrosegmentation

Essay Questions

31. Explain the goal of strategic marketing segmentation.

32. What is market segmentation?

33. Explain target marketing.

34. Explain the activities and decisions in market segmentation.

35. List the segmentation variables.

Chapter 4

Strategic Customer Management: Systems, Ethics, and Social Responsibility

True/False Questions

1. The metric customer lifetime value incorporates the past profit produced by the customer in its calculation.

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2. The company-wide level of CRM offers a single view of the customer across all of the organization’s access channels to the customer.

9

3. In the value creation process, the benefits the customer receives are expressed by the customer strategy.

3

4. The integration of CRM into the firm’s operational support systems is important for the successful implementation of CRM.

1

5. In order to successfully apply CRM, a firm should first create a customer strategy before implementing CRM.

1

6. Investing in building relationships with disinterested customers is a major initiative of CRM.

2

7. The sum of CLV for all the customers of a firm is termed as business case.

3

8. CRM approaches do not identify less attractive customers.

4

9. If a firm is essentially defensive in its stance on social responsiveness, then its primary concerns will be the protection of relationships.

126

10. Companies that have embedded CSR in their strategy usually take a defensive stance in their response to social responsibility.

126

Multiple Choice Questions

11. _____ is a cross-functional core business process that is specifically concerned with achieving improved shareholder value through the development of effective affiliations with key customers and customer segments.
A. Benchmarking
B. Customer equity
C. Customer relationship management
D. Customer value proposition

4

12. CRM supports a customer-responsive strategy, which gains competitive advantage when it:
A. demonstrates the customer’s trustworthiness and reliability to the company.
B. delivers superior customer value by personalizing the interaction between the customer and the company.
C. tightens connections with the competitors.
D. achieves the coordination of customer capabilities around the organization.

5

13. Which of the following information should be present in a database created by CRM technology?
A. Channels of distribution
B. Company contacts with its distributors
C. Response to marketing stimuli
D. Information on supplier quality

7

14. Which of the following levels of CRM is concerned with coordinating information across all contact channels on a continuing basis?
A. Field level
B. Company-wide level
C. Functional level
D. Customer-facing level

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15. Which of the following CRM levels provides a strategic focus for CRM?
A. Field level
B. Company-wide level
C. Functional level
D. Customer-facing level

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16. Which of the following is the first step of developing a CRM strategy?
A. Form a cross-functional CRM project team for decision analysis and actions.
B. Gain an organization-wide commitment to CRM strategy.
C. Conduct a business needs analysis concerning customer relationships.
D. Develop and define the CRM strategy to guide management process.

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17. The _____ level of CRM considers the implications of knowledge about customers and their preferences across the entire organization. 
A. field
B. customer-facing
C. company-wide
D. functional

9

18. The _____ perspective of CRM considers the processes that are needed to fulfill required marketing activities.
A. functional
B. field
C. company-wide
D. customer-facing

8

19. The _____ in a CRM strategy is an assessment that indicates the shareholder value and financial return of delivery of the required customer value.
A. operating agreement
B. enterprise transformation plan
C. value proposition
D. business case

0

20. The _____ in the CRM strategy spells out what the organization must provide in order to satisfy customer expectations.
A. value proposition
B. enterprise transformation plan
C. operating agreement
D. business case

0

21. The _____ in the CRM strategy indicates the necessary initiatives to launch the strategy.
A. value proposition
B. enterprise transformation plan
C. operating agreement
D. business case

0

22. The _____ component in the CRM strategy indicates how different consumer segments will be formed and managed.
A. business case
B. value proposition
C. customer strategy
D. enterprise transformation plan

0

23. Which of the following is the final step in developing a CRM strategy?
A. Gaining an organization-wide commitment to CRM strategy
B. Forming a cross-functional CRM project team for decision analysis and actions
C. Developing and defining the CRM strategy to guide management process
D. Conducting a business needs analysis concerning customer relationships

0

24. Which of the following is a pitfall to be avoided when applying CRM initiatives?
A. Changing the organization before putting CRM in place
B. Matching CRM technology to the customer strategy
C. Investing in building relationships with customers who value them
D. Implementing CRM before creating a customer strategy

1
2

25. Which of the following is a pitfall to be avoided when implementing CRM initiatives?
A. Creating a customer strategy before implementing CRM
B. Putting CRM in place before changing the organization to match
C. Matching the technology to the customer strategy
D. Investing in building relationships with interested customers

2
26. _____ has to be avoided when implementing CRM initiatives.
A. Creating a customer strategy before implementing CRM
B. Changing the organization before putting CRM in place
C. Assuming that more CRM technology is necessarily better
D. Investing in building relationships with interested customers

2

27. Which of the following activities hinders the successful implementation of CRM initiatives?
A. Creating a customer strategy before implementing CRM
B. Changing the organization before putting CRM in place
C. Matching the technology to the customer strategy
D. Investing in building relationships with disinterested customers

2

28. In CRM, the benefits the customer receives are expressed by the _____.
A. value proposition
B. customer equity
C. customer lifetime value
D. enterprise transformation plan

3

29. _____ refers to the sum of CLV for all of a firm’s customers.
A. Customer zone
B. Customer orientation
C. Customer concentration
D. Customer equity

3

30. The goal in _____ CSR mode is to anticipate and develop appropriate responses to social demands from any source that threatens to undermine the value and credibility of brands, the attractiveness of the competitive position on which the company’s strategy depends, and the viability of the marketing strategy itself.
A. defensive
B. strategic
C. systemic
D. charitable

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Essay Questions

31. How does CRM help gain a competitive advantage through a customer-responsive strategy?

32. What information should a database created through CRM technology contain?
database created through CRM technology should contain information about the following:

33. What is customer lifetime value? How is it calculated?

34. What are the different CRM levels?

35. What are the major steps in developing a CRM strategy?

Chapter 5

Capabilities for Learning About Customers and Markets

True/False Questions

1. Investments in enhancing and shaping interpretation may create a more durable competitive advantage than investments in obtaining additional information.

133

2. Market sensing is concerned with the ability of organizations to continuously learn about their markets, and acts as an antecedent to market orientation.

134

3. Market orientation is both a culture and a process committed to achieving superior supplier value.

134

4. Searching for latent customer needs primarily involves understanding customer needs through interaction with front-line employees who are in direct contact with customers.

135

5. Market-driven organizations are primarily interested in static events, rather than factors that cause change, in the markets.

135

6. Knowledge intensity identifies both market risk and new opportunities for growth.

135

7. The markets are best understood if the firm has a fixed view on what information will influence the firm.

137

8. Unbundling information from its physical carrier will provide access as well as speed in organizations.

138

9. Market-oriented firms emphasize enhanced operating efficiency and reduced costs through automating information processing.

151

10. Typically, the MIS does not interact in the decision-making process and is primarily used in collecting data.

153

Multiple Choice Questions

11. Strategic _____ refers to a firm’s awareness of what is happening and what is going to happen next, as a basis for rapidly developing effective responses to change or new opportunities.
A. sensitivity
B. alliance
C. equity
D. network optimization

132

12. Strategic _____ refers to a firm’s capability to consistently identify and seize opportunities more quickly and effectively than rivals.
A. alliance
B. agility
C. stock
D. equity

132

13. _____ is a key capability of the market-driven organization, concerned with the ability of organizations to continuously learn about their markets, and acts as an antecedent to market orientation.
A. Market penetration
B. Market capitalization
C. Market sensing
D. Market segmentation

134

14. _____ is both a culture and a process that consists of information acquisition, broad information dissemination, and shared diagnosis leading to coordinated action.
A. Market liquidity
B. Market valuation
C. Market capitalization
D. Market orientation

134

15. The market sensing process of _____ helps to study and understand changes that occur in the markets and avoid complacency in reacting to such changes.
A. building open-minded inquiry
B. analyzing competitors’ actions
C. listening to front-line employees
D. searching for latent customer needs

135
16. The market sensing process of _____ gives detailed attention to rivals’ tactics and strategies to develop understanding of their plans and capabilities. 
A. building open-minded inquiry
B. analyzing competitors’ actions
C. listening to front-line employees
D. searching for latent customer needs

135
17. The market sensing process of _____ includes motivating the involvement of staff who are in contact with customers in building understanding of change, new opportunities and threats.
A. building open-minded inquiry
B. analyzing competitors’ actions
C. listening to front-line employees
D. searching for latent customer needs

135

18. The market sensing process of _____ includes finding discontent through dialogue, observation, and engagement with clients.
A. building open-minded inquiry
B. analyzing competitors’ actions
C. listening to front-line employees
D. searching for latent customer needs

135
19. The market sensing process of _____ includes actively looking for new opportunities in the market.
A. scanning the periphery of the market
B. encouraging experimentation
C. listening to front-line employees
D. searching for latent customer needs

135

20. The market sensing process of _____ includes building a culture and process around continuous curiosity and new ideas. 
A. scanning the periphery of the market
B. encouraging experimentation
C. listening to front-line employees
D. searching for latent customer needs

135

21. Megagro, a groceries retail chain, demonstrated the market sensing process of _____ when it hired researchers to survey the refrigerator contents and lifestyles of 90 families—checking average family size, gross family income, what the families ate for breakfast, and how often they shopped for groceries. 
A. scanning the periphery of the market
B. encouraging experimentation
C. searching for latent customer needs 
D. analyzing competitors’ actions

135

22. The learning processes of market-oriented companies include a sequence of activities beginning with _____. 
A. information distribution for synergy
B. objective inquiry
C. mutually informed interpretations
D. accessible memory

137
23. Which of the following learning process activities can leverage the value of the information by cutting across business functions to share information on customers, channels of distribution, suppliers and competitors?
A. Objective inquiry
B. Mutually informed interpretations 
C. Information distribution for synergy 
D. Accessible memory

138
24. Which of the following activities is to be avoided when engaging in the process of market learning?
A. Searching for new ideas without a fixed view
B. Interpreting collected information based on managers’ views
C. Bundling information based on specific business functions
D. Accessing prior information

138

25. Which of the following learning process activities involves matching the vision of executives, like managers, to the information collected?
A. Mutually informed interpretations
B. Information distribution for synergy
C. Accessible memory
D. Objective inquiry

138

26. _____ is the part of the learning process of market-oriented companies that emphasizes the importance of keeping and valuing prior information.
A. Objective inquiry
B. Information distribution for synergy
C. Mutually informed interpretations
D. Accessible memory

138
27. Which of the following organizational scanning initiatives would require the use of external consultants for fresh perspectives on the business to be incorporated in strategic decision making?
A. Using existing functional groups
B. Outsourcing
C. Creating ad hoc issue groups
D. Establishing a high-level lookout team

142

28. _____ is “the systematic gathering, recording, processing, and analyzing of marketing data, which—when interpreted—will help the marketing executive to uncover opportunities and to reduce risks in decision making.”
A. Marketing research
B. Systemic marketing
C. Marginal analysis
D. Market segmentation

1

29. A _____ provides raw data to decision makers throughout a firm. 
A. marketing decision-support system
B. marketing information system
C. management information system
D. market function team

152

30. _____ integrates data that are not easily found, assimilated, formatted or readily manipulated with software and hardware into a decision-making process that provides the marketing decision maker with assistance when needed.
A. Market sensing
B. Management information system
C. Marketing information system
D. Marketing decision-support system

153

Essay Questions

31. List the market-sensing processes used by market-driven companies.

32. What are the activities included in the learning processes of market-oriented companies?

33. Give an account of the barriers that affect the market learning processes.

34. Give an account of how internet-based research helps in creating new market information.

35. What is the role of management information systems (MISs) in data collection?

Chapter 6

Market Targeting and Strategic Positioning

True/False Questions
1. Segment targeting is used more extensively than product differentiation in marketing.

164
2. Product specialization involves offering buyers a product differentiated from competitors’ products.

164
3. Product-markets that experience rapid growth are referred to as emerging market.

165
4. Growing product-markets are shifting from growth to maturity, as indicated by the product life cycles of the products.

165
5. The total sales and profits of a product will decline after it reaches the maturity stage.

166

6. New entrants in an emerging market can use disruptive technologies to attract buyers away from incumbent firms.

167
7. Large, well-established companies are more likely to enter a new product-market than are new enterprises.

167

8. An experiential positioning concept applies to products that solve consumption-related problems for externally generated consumption needs.

175
9. Positioning shows how the company or brand is differentiated from its competitors.

1

10. Doubtful positioning occurs when frequent changes and contradictory messages confuse customers regarding the positioning of the brand.

1

Multiple Choice Questions

11. Naturo-All Foods Inc. provides products that appeal to middle-class buyers who have strong value preferences for natural foods and are willing to pay premium prices for the products that are often not available from other grocery retailers. This segment of customers is Naturo-All Foods Inc.’s _____.
A. focus group
B. affiliate network
C. mass market
D. market target

162

12. The _____ decision identifies the people or organizations in a product-market toward which a firm directs its positioning strategy. 
A. market targeting
B. employer branding
C. domain selecting
D. strategic sifting

163
13. Product-markets that are newly formed are categorized as _____ and are created by factors such as a new technology or the identification of unmet needs by suppliers. 
A. growing
B. emerging
C. mature
D. declining

165

14. A(n)_____ is a life product life cycle stage where the product-market is actually fading away instead of experiencing a temporary fall or cyclical changes.
A. emerging product-market
B. maturing product-market
C. declining product-market
D. growing product-market

165
15.Which of the following is true about the life cycle of a typical product?
A. Profits are highest in the emerging phase of the product-market.
B. Total profits increase after the product reaches the maturity stage.
C. Sales are highest during the growth period.
D. Profits fall off before sales as the product reaches maturity.

166

16. The number of competitors in a(n) _____ market initially consists of the first market entrant and one or two other firms.
A. emerging 
B. maturing
C. declining 
D. growing

166
17. Which of the following market targeting approaches best fits extensive targeting in a clearly defined market segment?
A. Product variety
B. Target selected niches
C. Target multiple segments
D. Product specialization

164

18. Which of the following market targeting approaches best fits selective targeting in a segment not clearly defined? 
A. Product variety
B. Target selected niches
C. Target multiple segments
D. Product specialization

164
19. The global market strategy of _____ considers the extent to which standardized products and other strategy elements can be designed to compete on a global basis, and buyers are targeted without regard to national boundaries and regional preferences.
A. segmentation
B. buffering
C. local responsiveness
D. integration

170
20. Which of the following is a characteristic of emerging markets?
A. Sales are highest in this stage of the product life cycle.
B. Factors that drive market growth are clearly defined at this stage.
C. Market segments are most defined at this stage.
D. Profits are not obtained at this stage of the product life cycle.

166
167

21. The positioning _____ indicates management’s desired positioning of the product (brand) in the eyes and minds of the targeted buyers.
A. strategy
B. concept
C. effectiveness
D. location

172
1

22. The positioning _____ is the positioning initiative which combines marketing program (mix) policies used to portray the positioning desired by management to the targeted buyers. It includes the product (good or service), supporting services, distribution channels, price, and promotion actions taken by the organization.
A. effectiveness
B. concept
C. strategy
D. location

1

23. A(n) _____ positioning concept applies to products that solve consumption-related problems for externally generated consumption needs.
A. functional 
B. lateral
C. symbolic
D. experiential

175
24. _____ positioning applies to products that relate to the buyer’s internally generated need for self-enhancement, role position, group membership, or ego-identification.
A. Iconic
B. Symbolic 
C. Functional 
D. Experiential

175
25. The _____ positioning concept is used to position products that provide sensory pleasure, variety, and/or cognitive stimulation. 
A. material
B. functional
C. experiential
D. symbolic

175

26. Which of the following positioning concepts is most commonly utilized by luxury brands?
A. Functional positioning
B. Experiential positioning
C. Expedient positioning
D. Symbolic positioning

175

27. Bruckners and Co. is a fine writing instruments company that manufactures different products like pencils, pens, oil pastels, and other writing accessories. A recent study conducted by Bruckners on their product positioning revealed that most customers were only aware of Bruckners’ Artisan line of pencils, which were particularly marketed for sketch artists. Which of the following positioning errors is affecting the Artisan brand?
A. Overpositioning
B. Underpositioning
C. Confused positioning
D. Doubtful positioning

1
28. Lambasta is a burger joint that claims to specialize in lamb burgers. Over the past year, Lambasta has experimented in different products wherein they stopped making some of their flagship lamb burgers and replaced them with chicken burgers. The Lambasta website, which claims Lambasta to be “the only legitimate lamb burger joint in town,” increasingly provides special offers on their chicken burgers. Their core customer base and profits have steadily declined ever since. Which of the following types of positioning errors is affecting Lambasta?
A. Underpositioning
B. Overpositioning
C. Symbolic positioning
D. Confused positioning

1
29. Which of the following describes doubtful positioning?
A. When frequent changes and contradictory messages confuse customers regarding the positioning of the brand
B. When the claims made for the product or brand are not regarded as credible by the customer 
C. When customers have too narrow an understanding of the company, product, or brand
D. When customers have only vague ideas about the company and its products and do not perceive anything distinctive about them

1

30. _____ occurs when customers have only vague ideas about the company and its products and do not perceive anything distinctive about them.
A. Doubtful positioning
B. Overpositioning
C. Underpositioning
D. Confused positioning

1

Essay Questions

31. Briefly explain the four life cycle stages of the product-market environment.

32. Identify and discuss the three possible targeting strategies in growth markets.

33. Explain the consumer behavior of buyers in mature markets affecting brand management.

34. Elaborate on the scope of using positioning strategies.

35. Explain how test marketing can help assess positioning effectiveness.

Chapter 7

Strategic Relationships

True/False Questions

1. Environmental diversity increases the capacity of an organization to respond quickly to customer needs and new product development.

1

2. Environmental diversity makes it difficult to link buyers and the goods and services that meet buyers’ needs and wants in the marketplace.

1
3. Competence in specialized technology can give smaller firms extensive bargaining power with larger firms.

190

4. Marketing intermediaries such as wholesalers and retailers are horizontal channels of distribution.

191

5. Horizontal relationships have often been established between competing firms to access global markets not served by the cooperating firms.

191
6. Opportunity costs should be considered when assessing and comparing costs in an alliance.

195

7. Value chain relationships provide access to consumer and organizational end-users.

199

8. Strategic account management primarily deals with customers who do not directly invest time or resources in their relationship with the firm.

201

9. Alliances are agreements between two or more firms to establish a separate entity.

203

10. A disengagement plan should consider detailed description of the rights of each partner to alliance assets and products on disengagement.

209
210

Multiple Choice Questions

11. _____ consists of “building a complex product or process from smaller subsystems that can be designed independently yet function together as a whole.”
A. Sifting
B. Modularity
C. Scaffolding
D. Encoding

1

12. _____ reduces the capacity of an organization to respond quickly to customer needs and new product development.
A. Market-sensing
B. Organizational learning
C. Environmental diversity
D. Vertical integration

1

13. An organization that primarily competes through its relationships with other organizations to deliver value to end-users is referred to as a _____.
A. memory organization
B. knowledge organization
C. horizontal organization
D. hollow organization

190

14. Which of the following relationships is an example of an intermediate customer relationship of a firm?
A. Relationship to the distributors of the firm’s products
B. Relationship to the consumers of the firm’s products
C. Relationship to the suppliers of the firm
D. Relationship to the employees of the firm

196

15. Which of the following is considered as an end-use customer of a firm?
A. Competitor
B. Supplier
C. Distributor
D. Consumer

196

16. Which of the following is an example of lateral relationships?
A. Relationship with suppliers
B. Relationship with customers
C. Relationship with competitors
D. Relationship with functional departments

196

17. Supplier relationships are similar to customer relationships in that they are both considered as _____ to the firm.
A. horizontal relationships
B. vertical relationships
C. internal relationships
D. lateral relationships

196

18. Moving products through various stages in the value-added process often involves linking suppliers, manufacturers, distributors, and consumer and business end-users of goods and services into _____ channels. 
A. lateral
B. vertical
C. horizontal
D. parallel

197

19. Which of the following is true of strategic alliances?
A. It is a type of acquisition by one firm of another.
B. It does not involve joint purchasing of stocks of another company.
C. It is not a merger between two independent firms.
D. It does not involve the sharing of existing distribution channels between the firms.

202

20. A _____ between two organizations is an agreement to cooperate to achieve one or more common important objectives without forming a separate entity.
A. joint venture
B. merger
C. divestiture
D. strategic alliance

202

21. Collaborative relationships between companies that are competitors or in related industries are referred to as _____. 
A. outsources
B. alliances
C. joint ventures
D. internal partnerships

202

22. _____ are agreements between two or more firms to establish a separate entity.
A. Franchises
B. Consortiums
C. Strategic alliances
D. Joint ventures

203

23. Which of the following relationships would be considered an internal partnership?
A. Relationships between functional units and employees of a firm
B. Relationships between a firm and a competitor
C. Relationships between a firm and its supplier
D. Relationships between a firm and its customers

204

24. Strategic leadership of a partnership can be achieved by:
A. developing an interdependent leadership structure.
B. assigning the responsibility to one of the partners.
C. efficient outsourcing.
D. initiating independent value chain functions.

207

25. Companies may miss opportunities to reduce costs and generate additional income by:
A. assessing the venture’s strategic fit for continuing the alliance.
B. generating extensive restructuring options.
C. assigning accountability for making changes.
D. failing to launch a process.

209

26. Which of the following should be considered for a successful alliance disengagement plan?
A. Identifying and agreeing on the events that will trigger exit from the alliance
B. Design of the engagement process
C. Restructuring and cost-reduction
D. Developing new markets and building market position

210

27. Corporate alliances must demonstrate that their joint activities do not lead to price fixing or other forms of _____. 
A. boycotts
B. market limitation
C. benefits
D. comfort letters

214

28. Industry alliances for any purpose must avoid _____, treat codes of conduct as voluntary while issues of breach of the code by suppliers must be addressed by individual companies. 
A. market manipulation
B. benefits 
C. boycotts 
D. comfort letters

214

29. An alliance should demonstrate the low risk of anticompetitive harm and pro-competitive _____ and efficiencies to be gained. 
A. market manipulation
B. boycotts
C. benefits
D. comfort letters

214

30. Alliances can seek official _____ from bodies like the US Justice Department stating the authority does not intent to challenge the activities of the alliance. 
A. patents
B. copyrights
C. laurels
D. comfort letters

214
Essay Questions

31. Mention the factors that create a need to establish cooperative strategic relationships between organizations.

32. Describe the different forms of organizational relationships.

33. What are the advantages and disadvantages of outsourcing firm activities?

34. What is the rationale for Strategic Account Management (SAM) and what are the risks of SAM?

35. What features should a successful disengagement plan for a strategic alliance contain?

Chapter 8

Innovation and New-Product Strategy

True/False Questions

1. New products that provide improved performance or greater perceived value are known as substantial innovations.

219

2. Conformity between consumer value expectations and product use experience indicates greater new-product opportunities.

221

3. Analyzing customer value expectations to finding new-product opportunities are very useful in evaluating potential transformational innovations.

222

4. Radical innovations have the potential of creating negative impacts on the leading firms that pursue new-product strategies using existing technologies.

222

5. When products become commodities, profit margins increase and differentiated advantages are easily achieved.

222
6. The elite circle is a form of innovation through collaborative relationship in which a company chooses participants, defines the problem, and chooses the solution.

225

7. A new-product screening involves testing if the product is commercially viable.

235
236

8. A product prototype is the first completed model of the product that is ready for commercial production and marketing.

241

9. Product specifications describe what the product will do rather than how it should be designed.

241

10. The traditional method of market testing helps eliminate the risk present in simulated tests of competitor exposure.

245
246

Multiple Choice Questions

11. Which of the following enables producing a product by building it up a layer at a time?
A. Additive manufacturing
B. Productive layering
C. Merchandise fabrication
D. Object enabling

218

12. _____ innovation occurs when products are radically new and the values created are substantial.
A. Substantial
B. Transformational
C. Incremental
D. Nondescript

219

13. Products that are significantly new and create important value for customers are called _____ innovations. 
A. transformational
B. incremental
C. substantial
D. nondescript

219
14. New products that provide improved performance or greater perceived value (or lower cost) are called _____ innovations. 
A. transformational
B. substantial
C. nondescript
D. incremental

219
15. Customer _____ indicates how well the product use experience compares to the value expected by the buyer. 
A. value
B. satisfaction
C. need
D. segmentation

221
16. _____ is the combination of benefits provided by a product minus all of the costs incurred by the buyer.
A. Product use experience
B. Customer satisfaction
C. Customer value
D. Leveraging cost

221
17. The objective of _____ is to identify needs for new products and improvements in existing products, processes, and supporting services. 
A. test marketing
B. incremental innovation
C. analytical positioning techniques
D. customer value analysis

221

18. The _____ is a form of innovation through collaborative relationship in which a company chooses participants, defines the problem, and chooses the solution.
A. elite circle
B. innovation mall
C. innovation community
D. consortium

225

19. The _____ is a form of innovation through collaborative relationships where a company posts a problem and anyone can propose a solution.
A. elite circle
B. innovation mall
C. innovation community
D. consortium

225

20. The _____ is a form of innovation through collaborative relationships where anybody can propose problems, offer solutions, and decide which solutions to use.
A. elite circle
B. innovation mall
C. innovation community
D. consortium

226

21. The _____ is a form of innovation through collaborative relationships which operates like a private club with participants jointly selecting problems, deciding how to work on them, and choosing solutions.
A. elite circle
B. innovation mall
C. innovation community
D. consortium

226

22. Product _____ refers to when a new product attracts sales from an existing product.
A. cannibalization
B. knockdown
C. scaffolding
D. benchmarking

226

23. _____ consists of the pursuit of a deliberate, ongoing strategy of developing and introducing new products that attract the buyers of a company’s existing products. 
A. Sustained innovation
B. Proactive cannibalization
C. Cross production
D. Planned obsolescence

226

24. The company’s _____ spells out management’s choice of the company’s most promising opportunities for new products. 
A. mission statement
B. vision consortium
C. innovation strategy
D. articles of incorporation

227

25. Which of the following is the first step in the new-product-planning process?
A. Idea generation
B. Marketing strategy development
C. Product development
D. Customer needs analysis

229
26. Which of the following is true of scanner-based tests?
A. It uses cable television and a computerized database to track new product.
B. It is the cheapest and quickest market test available.
C. Its findings are more accurate than actual market tests.
D. It is conducted in a fabricated shopping environment inside a research facility.

245

27. Which of the following marketing tests is conducted in an actual market environment?
A. Regression tests
B. Simulated tests
C. Traditional tests
D. Web-enabled tests

246

28. Which of the following is a description of the Generic (market-pull) products process type?
A. The team begins with a market opportunity and selects appropriate technologies to meet customer needs.
B. The team begins with a new technology, and then finds an appropriate market.
C. The team assumes that the new product will be built around an established technological subsystem.
D. Characteristics of the product are highly constrained by the production process.

249

29. Which of the following are examples of quick-build products?
A. Sporting goods, furniture, tools
B. Software, cellular phones
C. Pharmaceuticals, space systems
D. Airplanes, jet engines, automobiles

249

30. Which of the following describes the process for platform products?
A. Characteristics of the product are highly constrained by the production process.
B. New products are slight variations of existing configurations.
C. System must be decomposed into several subsystems and many components.
D. The team assumes that the new product will be built around an established technological subsystem.

249

Essay Questions

31. How can innovations be classified? What are the different types of innovations?

32. Describe the various forms of innovation through collaborations?

33. What is proactive cannibalization and what is the strategic logic of this concept?

34. Describe how focus groups help generate new-product ideas.

35. Explain the importance of concept evaluation in new-product planning.

Chapter 9

Strategic Brand Management

True/False Questions

1. Product life cycles are becoming longer for many products due to new technology, rapidly changing preferences of buyers and intense competition.

264
2. Preference mapping offers useful guidelines for strategic targeting and product positioning.

265
3. The brand as a person (brand personality) perspective recognizes that strong brands may have an identity beyond the product or the company, which has positive impacts on the customer relationship and perception of value.

266
4. Combination branding places a brand name on one or more lines of related products representing different product categories.

268

5. In private branding, retailers with established brand names contract with producers to manufacture and place the retailer’s brand name on products sold by the retailer.

268

6. A disadvantage of fighter brands is that they may cannibalize the company’s premium offering.

2

7. Stretching the brand vertically consists of launching a new product line in another product class.

2

8. Moving the brand down is relatively easy to pursue since it benefits from the image of the higher-level brand.

2

9. Brand extension consists of two well-known brands working together in promoting their products.

2
10. Co-branding is the sale of a firm’s brand name to another company for use on a noncompeting product.

2

Multiple Choice Questions

11. A _____ is intended to meet the needs of buyers, and it may consist of objects, services, organizations, places, people, and ideas. 
A. product
B. brand
C. resource
D. trademark

255
12. A name, term, design, symbol, or any other feature that identifies one seller’s good or service as distinct from those of other sellers is known as a(n) _____.
A. product
B. merchandise
C. brand
D. advertisement

255
13. According to the American Marketing Association, the legal term for brand is _____.
A. merchandise
B. asset
C. patent
D. trademark

255
14. If a brand is used for the firm as a whole, then it is referred to as a _____.
A. trade name
B. corporation
C. trademark
D. patent

255
15. Which of the following is a function of brands for buyers?
A. Facilitate the introduction of new products
B. Reduce customer search costs
C. Raise the buyers’ perceived risk
D. Curtail premium pricing

256

16. For buyers, brands play the function of:
A. aiding repeat purchases.
B. reducing premium pricing.
C. minimizing buyers’ perceived risks.
D. facilitating brand loyalty.

256

17. Which of the following is a function of brands for sellers?
A. Reduce sellers’ perceived risks
B. Facilitate low production costs
C. Diminish market segmentation, offering products to a larger target
D. Facilitate the introduction of new products

256

18. Which of the following about brands is true?
A. Brands facilitate promotional effectiveness for sellers.
B. Brands help reduce prices for buyers.
C. Brands minimize market segmentation to cater to a larger target.
D. Brands enhance buyers’ perceived risks.

256

19. Which of the following leads to a negative impact on brand management?
A. Reduced customer search costs
B. Fragmentation of markets and media
C. Increased brand loyalty
D. Reduction in buyer’s perceived risk

257

20. Marketing plans for specific brands are usually developed at _____ level.
A. market-driven management
B. product group/marketing management
C. product portfolio management
D. product/brand management

258

21. A business that has several product categories and/or brands may assign responsibility for coordinating the initiatives of product or brand managers to _____.
A. the chief executive of the SBU
B. a product director
C. a product portfolio manager
D. a brand analyst

259

22. _____ management is normally assigned to the chief executive of the strategic business unit, the corporate level of an organization, or a team of top executives.
A. Product/brand
B. Product group/marketing
C. Product portfolio
D. Market-driven

260
23. Which of the following activities of strategic brand management primarily provides essential information for decision making for other brand management activities?
A. Leveraging the brand 
B. Brand equity management
C. Brand identity strategy
D. Strategic brand analysis

261
24. The intent of _____ is to determine “a unique set of brand associations that the brand strategist aspires to create or maintain.”
A. brand identity strategy
B. brand equity management
C. strategic brand analysis 
D. brand equity measurement

261

25. _____ consists of coordinating the organization’s system of brands with the objective of achieving optimal system performance. It focuses on brand interrelations rather than an individual brand.
A. Strategic brand analysis
B. Managing the brand portfolio
C. Leveraging the brand
D. Brand equity management

262

26. _____ involves extending the core brand identity to a new addition to the product line, or to a new product category.
A. Strategic brand analysis
B. Managing the brand portfolio
C. Leveraging the brand
D. Brand equity management

262

27. Which of the following is the first step in tracking brand performance?
A. Identifying problem products
B. Selecting method(s) for evaluation
C. Deciding how to resolve the problem
D. Establishing the performance objectives

262
263

28. Using the same brand name to market one or more lines of related goods which represent different categories, such as Crest toothpaste, brushes, and floss, is referred to as _____.
A. corporate branding
B. product-line branding
C. combination branding
D. private branding

267

29. Which of the following strategies for brand strength involves launching a brand aimed to combat low-price competitors while protecting the company’s premium priced offerings?
A. Brand revitalization
B. Licensing
C. Fighter brands
D. Co-branding

2

30. Which of the following brand leveraging strategies involves the sale of a firm’s brand name to another company for use on a noncompeting product?
A. Line extension
B. Brand extension
C. Co-branding
D. Licensing

2

Essay Questions

31. What functions do brands serve for sellers?

32. Explain three internal and external forces that create hurdles for brand managers in their efforts to build strong brands. What is one key to reducing these negative impacts on brand-building strategies?

33. List the measures that Aaker proposes to capture all relevant aspects of brand equity.

34. Brands that have been successful over a long time period offer useful insights about brand strategy management. Discuss some of these insights.

35. Discuss the state of counterfeit brands, the ethical issues, the involvement of law enforcement, and the role of the internet in counterfeiting.

Chapter 10

Value-Chain Strategy

True/False Questions

1. Buying and selling activities by marketing intermediaries reduce the number of transactions for producers and end-users.

2
2. A single product makes distribution by the manufacturer economically feasible, whereas the cost of direct sales for a complete line may be prohibitive.

2

3. Relationships between the conventional channel participants are rather informal and the members are not closely coordinated.

292

4. The conventional channel of distribution is a group of horizontally linked independent organizations.

292

5. Relationships between the conventional distribution channel participants are rather informal and the members are not closely coordinated.

292

6. A primary feature of a vertical marketing system is the management (or coordination) of the distribution channel collectively by the organizations involved.

292

7. If one retailer or dealer in the trading area distributes the product, then management is following a selective distribution strategy.

296

8. Large producers with extensive capabilities and resources have a lot of flexibility in choosing intermediaries.

297

9. A conventional distribution channel offers little opportunity for control by a member firm, yet there is a lot of flexibility in entering and exiting from the channel.

299

10. Agile supply chains require long-term partnership with suppliers.

304

Multiple Choice Questions

11. _____ is defined as the group of vertically aligned organizations that keep improving a product in moving from basic supplies to finished products for consumer and organizational end-users.
A. Value chain
B. Distribution strategy
C. Retail strategy
D. Digital channel

2
12. _____ is a network of value chain organizations performing functions that connect goods and services with end-users.
A. Line extension
B. Retail chain
C. Channel of distribution
D. Digital channel

2

13. Which of the following value-added activities would most effectively reduce the number of transactions for producers and end-users?
A. Assembly of products into inventory
B. Servicing and repairs
C. Processing and storage of goods
D. Buying and selling activities by marketing intermediaries

2

14. Which of the following value-added activities helps to meet buyers’ time-of-purchase and variety preferences?
A. Assembly of products into inventory
B. Transportation
C. Processing and storage of goods
D. Advertising and sales promotion

2

15. Consumer-products manufacturers often direct advertising to _____to help pull products through distribution channels.
A. middlemen
B. consumers
C. distributors
D. retailers

2

16. Which of the following factors favors direct distribution by the manufacturer?
A. Simple product/application
B. Large number of geographically concentrated buyers
C. Opportunity for competitive advantage
D. Small and frequent purchases

291

17. The _____ of distribution is a group of vertically linked independent organizations, each trying to look out for itself, with limited concern for the total performance of the channel. 
A. digital channel
B. vertical marketing system
C. direct channel
D. conventional channel

292
18. In a _____, one organization coordinates the distribution channel and directs programming of channel activities and functions.
A. vertical marketing system 
B. conventional channel
C. direct channel
D. digital channel

292
19. _____ VMS includes various formal arrangements between channel participants including franchising and voluntary chains of independent retailers.
A. Ownership
B. Contractual
C. Administered
D. Relationship

294
20. _____ VMS exists because one of the channel members has the capacity to influence other channel members and exerts substantial control over them.
A. Ownership
B. Contractual
C. Administered
D. Relationship

294

21. In _____ VMS, a single firm does not exert substantial control over other channel members but involves close collaboration and sharing of information. 
A. ownership
B. contractual
C. administered
D. relationship

294
22. _____ marketing system exists when two or more unrelated companies put together resources or programs to exploit a marketing opportunity. Its characteristics are close to the partnering, joint venture, and strategic alliance arrangements.
A. Horizontal
B. Digital
C. Administered
D. Relationship

295

23. The process of replacing distributors with direct manufacturer-owned channels is referred to as _____.
A. e-procurement
B. channel invasion
C. channel audit
D. disintermediation

295
24. If a company decides to distribute its products in many of the retail outlets in a trading area that might normally carry such a product, it is using a(n) _____ distribution approach. 
A. exclusive
B. intensive
C. selective
D. moderate

296
25. If a company decides to distribute its products through one retailer or dealer in the trading area, then the company is following a(n) _____ distribution strategy.
A. intensive
B. selective
C. exclusive
D. moderate

296
26. Which of the following is the final step in selecting the distribution strategy?
A. Selecting the channel configuration
B. Determining the type of channel arrangement
C. Deciding the intensity of distribution
D. Identifying appropriate distribution strategy

297

27. Channel _____ refers to the strategic shift from one channel to another.
A. invasion
B. migration
C. innovation
D. audit

301

28. The _____ supply chain seeks to remove waste and manage volatility out of the supply chain by leveling demand.
A. fluid
B. agile
C. lean
D. conventional

304

29. The _____ supply chain mandates fluid and market-based relationships to enhance responsiveness to the market and capacity for rapid change.
A. fluid
B. conventional
C. lean
D. agile

304

30. Often customers shop for information in one channel, then defect from that channel to make the purchase in another medium. This process is referred to as _____.
A. personal selling
B. channel surfing
C. direct distribution
D. channel mapping

306

Essay Questions

31. Discuss the factors that influence distribution decision.

32. Discuss the emerging issue of the digital distribution channel occurring in markets in which the product can be converted to digital format.

33. Discuss the major issues in deciding distribution intensity.

34. What is channel migration? List the issues to be considered when opting for migration.

35. Discuss the impact of e-procurement in business-to-business marketing.

Chapter 11

Pricing Strategy

True/False Questions

1. Price strategy is always related to competition whether firms use a higher, lower, or equal price.

323

2. Both revenues and costs need to be taken into account in selecting pricing strategies.

323

3. Lowering prices generally eliminates potential price wars.

324

4. The second step in selecting a pricing strategy is analyzing the pricing situation.

324

5. The core issue in pricing is finding out what value requirements (benefits-costs) the buyer places on the product or brand.

327
6. The underlying logic of economic value modeling (EVM) is that using the price/benefit ratio is a more realistic view of value than “dollar worth of benefits minus price.”

328

7. Customer value mapping estimates are based on the differentiated benefits that a customer receives from a product.

328

8. Competitive bidding is an example of demand-oriented approach of pricing.

340
9. Reverse auction pricing involves sellers bidding for organizational buyers’ purchases.

340
10. The competitor is the frame of reference for demand-oriented pricing methods.

340

Multiple Choice Questions

11. Which of the following distribution approaches is most likely to call for more competitive pricing?
A. Exclusive
B. Selective
C. Intensive
D. Narrow

321
322

12. Price cuts in economic downturns are primarily aimed at:
A. increasing short-term profits.
B. defending a firm’s position vigorously.
C. compensating for low quality products.
D. capturing market share.

323

13. Which of the following is the first step in selecting a pricing strategy?
A. Setting pricing objectives
B. Analyzing the pricing situation
C. Selecting pricing strategy
D. Determining specific prices and policies

323

14. Which of the following is the final step in selecting a pricing strategy?
A. Setting pricing objectives
B. Determining specific prices and policies
C. Selecting pricing strategy
D. Analyzing the pricing situation

323

15. _____ is the percentage change in the quantity sold of a brand when the price changes, divided by the percentage change in price.
A. Price distribution
B. Price band
C. Price point
D. Price elasticity

327

16. _____ estimates value as the perceived quality buyers obtain per unit of price.
A. Customer value mapping
B. Customer equity
C. User lifetime value
D. Customer value proposition

327
328

17. Value using _____ consists of the financial savings and gains provided to customers due to purchase of the firm’s brand instead of competitors’ brands.
A. customer value mapping
B. economic value modeling
C. user lifetime value
D. customer value proposition

328

18. Which of the following is the first step in cost analysis for pricing decisions?
A. Estimating how cost varies with the volume of sales
B. Analyzing the cost competitive advantage of the product
C. Determining the components of the cost of the product
D. Estimating how much control management has over costs

330

19. _____ indicates whether costs and prices for various products decline by a given amount each time the number of units produced doubles.
A. Economic value modeling
B. Activity-based costing
C. Customer value mapping
D. Learning-curve analysis

331

20. A high-active pricing strategy:
A. values superiority.
B. emphasizes nonprice competitive factors.
C. offers discounts.
D. avoids price comparisons.

336

21. Which of the following is true of high-passive strategy pricing?
A. It is used when competition for the market target is very high.
B. It emphasizes nonprice competitive factors.
C. It is primarily used by discount retailers.
D. It is used by producers whose brands are not familiar to the market.

337

22. A low-active pricing strategy:
A. emphasizes nonprice competitive factors.
B. is mainly used to gain margins in small market targets.
C. is most effective for discount retailers.
D. is an attractive strategy when competition for market target is high.

337

23. A low-passive pricing strategy:
A. emphasizes superior value of the product.
B. emphasizes nonprice competitive factors.
C. offers discounts.
D. avoids price comparisons.

337

24. When two or more competitors collude to explicitly or implicitly set prices, this practice is referred to as _____.
A. horizontal price fixing
B. price discrimination
C. deceptive pricing
D. predatory pricing

337

25. _____ is the practice of charging different prices to different buyers for goods of similar grade and quality.
A. Price fixing
B. Price discrimination
C. Deceptive pricing
D. Predatory pricing

338

26. Charging a very low price for a product with the intent of driving competitors out of business is referred to as _____.
A. cannibalization
B. price fixing
C. predatory pricing
D. deceptive pricing

338
27. Which of the following types of price determination methods uses the price of producing and marketing the product as the basis for determining price?
A. Cost-oriented
B. Supply-oriented
C. Competition-oriented
D. Demand-oriented

339

28. _____ pricing methods consider estimated market response to alternative prices.
A. Cost-oriented
B. Supply-oriented
C. Competition-oriented
D. Demand-oriented

339

29. Which of the following types of pricing is considered a cost-oriented approach of pricing?
A. Break-even pricing
B. Reverse auction pricing
C. Demand-oriented pricing
D. Internet auction pricing

339

30. When using markup pricing, which of the following formulas determines the selling price?
A. Price = Average unit cost divided by Markup percentage
B. Price = Average unit cost divided by 1 minus Markup percentage
C. Price = Unit cost minus Markup price
D. Price = Total fixed costs divided by Unit price minus Unit variable cost

340

Essay Questions

31. Explain the role of price in the distribution strategy.

32. Explain the various roles of price in the marketing program.

33. What are the steps in selecting a pricing strategy?

34. Give an account of predatory pricing. What are its ethical implications?

35. Give an account of the impact of emerging markets on pricing.

Chapter 12

Promotion, Advertising, and Sales Promotion Strategies

True/False Questions

1. An advantage of personal selling over advertising is its flexibility in responding to the buyer’s objections and questions at the time the decision to purchase is being made.

355

2. The percent-of-sales method of budgeting for promotion is arbitrary and does not recognize that promotion efforts and results are related.

357
3. Promotion expenditures for the competitive parity method are guided by comparing which component(s) is/are appropriate for attaining each objective.

357
4. The final step in developing an advertising strategy involves evaluating its effectiveness.

359
5. Determining the sales and profit impact of advertising is more difficult to measure than the exposure and awareness it creates.

360
6. The fragmentation of many consumer markets is driving significant amounts of advertising spending from traditional mass media to more focused narrowcast media.

363

7. Recall tests measure consumers’ awareness of specific ads and campaigns by asking questions to determine if a sample of people remembers an ad.

366

8. Longitudinal studies use empirical data to build a mathematical relationship between sales and advertising effort.

366

9. Sales promotions are primarily used to bring awareness of a particular product.

366

10. Coupons are extensively used as a promotional activity to target value chain members.

369

Multiple Choice Questions

11. _____ consists of planning, implementing, and controlling an organization’s communications to its customers and other target audiences. 
A. Promotion strategy
B. Distribution program
C. Benchmarking
D. Planned obsolescence

350
12. Which of the following is a disadvantage of advertising?
A. It has high cost per exposure.
B. It has fixed messages for the duration of an exposure.
C. It does not allow much creativity in message design.
D. It provides low control of message content.

351

13. Which of the following is true about advertising?
A. It has high cost per exposure.
B. It provides low control over exposure.
C. It does not allow direct interactions with buyer.
D. It does not allow for creative message designs.

351

14. _____ consists of verbal communication between a salesperson and one or more prospective purchasers with the objective of making or influencing a sale. 
A. Public relation
B. Sales promotion
C. Advertising
D. Personal selling

351

15. _____ consists of activities such as, trade shows, contests, samples, point-of-purchase displays, product placement in films and other occasions, trade incentives, and coupons.
A. Sales promotion
B. Advertising
C. Personal selling
D. Interactive marketing

351
16. _____ refers to communications placed in the commercial media at no charge to the company receiving the publicity.
A. Advertising
B. Public relations
C. Personal selling
D. Interactive marketing

353

17. Which of the following is a disadvantage of the percent of sales method of setting promotional budgets?
A. It heavily relies on the experience and judgment of the marketing team.
B. It can result in too much spending on promotion when sales are high and not enough when sales are low.
C. Its budgeting method is directly guided by how much competitors spend.
D. It does not base its budgeting on past expenditure patterns.

357
18. Which of the following promotion strategies is most appropriate when buyers’ information needs are high?
A. Advertising-driven
B. Sales promotion-driven
C. Personal selling-driven
D. Generic

358

19. An advertising-driven promotion strategy is used when:
A. the numbers of buyers are small.
B. the size and importance of purchase is large.
C. product complexity is high.
D. no post purchase contact is required.

358

20. Which of the following advertising objectives is used more often because of the ease of measurement?
A. Exposure objectives
B. Attitude change objectives
C. Sales objectives
D. Profit objectives

360

21. Distributing promotional video clips across the Internet is referred to as _____.
A. personal selling
B. viral marketing
C. sales promotion
D. direct distribution

363

22. _____ identifies relationships between advertising expenditures and sales using statistical techniques such as regression analysis. 
A. Test marketing
B. Recall test
C. Longitudinal study
D. Evaluating historical data

366
23. _____ measure(s) consumers’ awareness of specific ads and campaigns by asking questions to determine if a sample of people remembers an ad. 
A. Recall tests 
B. Effort/result models 
C. Longitudinal studies
D. Test marketing

366
24. _____ track(s) advertising expenditures and sales results before, during, and after an advertising campaign. 
A. Effort/result models
B. Longitudinal studies
C. Recall tests
D. Test marketing

366
25. _____ use empirical data to build a mathematical relationship between sales and advertising effort. 
A. Controlled tests
B. Recall tests
C. Effort/results models
D. Longitudinal studies

366
26. Which of the following is a promotional pricing form of sales promotion activity?
A. Selling aids
B. Trade shows
C. Prizes
D. Coupons

369

27. Which of the following sales promotion activity is targeted at industrial buyers?
A. Coupons
B. Bonuses
C. Rebates
D. Advertising support

369

28. Which of the following informational activities is targeted at both channel members and the salesforce?
A. Demonstrations
B. Trade shows
C. Displays
D. Selling aids

369

29. Which of the following is a disadvantage of sales promotions?
A. The sales response of the sales promotion activities cannot be measured to determine their effectiveness.
B. The incentive and price promotion techniques trigger the purchase of other products.
C. It allows value-added resellers to build inventories on products that receive manufacturers’ trade discounts.
D. It has the flexibility to contribute to various marketing objectives.

370

30. Which of the following is the first step in developing a sales promotion strategy?
A. Setting specific promotion objectives
B. Defining the communications task(s) to be accomplished
C. Evaluating the relative cost-effectiveness of various methods
D. Coordinating the content and the timing with other activities

371

Essay Questions

31. Identify the advantages and disadvantages of advertising.

32. List the activities involved in designing an organization’s promotion strategy.

33. Define and explain the benefits of the objective and task method of promotion budget.

34. Explain the challenges impacting the creative process in advertising and changing the design of creative strategies and media.

35. Give an account of the different promotional activities targeted at a firm’s salesforce.

Chapter 13

Sales, Digital, and Direct Marketing Strategies

True/False Questions

1. The final step in a salesforce strategy is designing the sales organizations.

3
2. Sales quotas are used to state the management’s expected sales results.

3

3. Transactional selling is not restricted to small, low-volume buyers.

3

4. The new business selling strategy is based on firms selling to an existing customer base and providing technical and application assistance.

3

5. Trade selling provides assistance and support to value chain members rather than obtaining sales.

3

6. If a customer base displays substantial differences in purchasing power and servicing requirements, then the use of a single salesforce channel is appropriate.

3

7. If the product or the customer base does not dominate design considerations, a geographical sales organization is used.

3

8. Single-factor models analyze the profit performance of accounts or trading areas as the basis to estimate the profit impact of adding more salespeople.

3

9. In social media–based positioning attempts, the goal is to create a community providing only functional benefits.

392

10. In direct marketing, accuracy of targeting is only as good as the lists used to access potential buyers.

400

Multiple Choice Questions

11. Which of the following initiatives of forming a salesforce strategy requires deciding how personal selling is expected to contribute to the marketing program?
A. Determining the role of the sales force in the promotion strategy
B. Selecting the selling process
C. Deciding if and how alternative sales channels will be utilized
D. Designing the sales

3

12. Which of the following initiatives is the second step in building a salesforce strategy?
A. Determining the role of the sales force in the promotion strategy
B. Select the selling process
C. Deciding if and how alternative sales channels will be utilized
D. Designing the sales organization

3

13. _____ selling involves obtaining sales from first-time buyers, who may be one-time purchasers or repeat buyers.
A. Missionary
B. Trade selling
C. New business
D. Consultative

3

14. _____ selling provides assistance and support to value chain members rather than obtaining sales. 
A. New business
B. Consultative/technical
C. Missionary
D. Trade

3
15. _____selling is a form of selling in which the salespeople work with the customers of a channel member to encourage them to purchase the producer’s product from the channel member. 
A. Missionary
B. Trade
C. New business
D. Consultative/technical

3

16. _____ is targeted at an existing customer base and provides technical and application assistance. These positions may involve the sales of complex equipment or services.
A. New business selling
B. Consultative selling
C. Missionary selling
D. Trade selling

3

17. Sales representatives of Oasis Travels collaborate with various hotels across the state to get customers to book package tours. Which of the following sales positions do the salespeople of Oasis Travels hold?
A. New business selling
B. Consultative selling
C. Missionary selling
D. Trade selling

3

18. Which of the following activities does a selling process include?
A. Advertising the product
B. Training the salespeople
C. Prospecting for suppliers
D. Presenting the sales message

3

19. Which of the following activities would most likely be the first in the selling process?
A. Prospecting for customers
B. Opening relationships
C. Presenting the sales message
D. Training salespeople

3

20.Which of the following sales organization designs is most appropriate when customer needs are different and the product offering is simple?
A. Product-driven
B. Market-driven
C. Geography-driven
D. Product/market-driven

3

21. Which of the following sales organization designs can be adopted when customer needs are similar and there is a complex range of products offered?
A. Geography-driven
B. Market-driven
C. Product-driven
D. Product/market-driven

3

22. If the product or the customer base does not dominate design considerations, a _____ sales organization is used.
A. market-driven
B. product-driven
C. product/market-driven
D. geography-driven

3

23. _____ require information on each salesperson’s sales and/or costs and can help spot high performing and unprofitable territories by comparing each salesperson to an average break-even sales level.
A. Revenue/cost analysis techniques
B. Single-factor models
C. Sales and effort response models
D. Portfolio deployment models

3

24. _____ for analyzing sales force assume that size of the sales force and/or effort deployment are determined by one factor, such as market potential or workload whose values can be used to determine required selling effort.
A. Revenue/cost analysis techniques
B. Single-factor models
C. Sales and effort response models
D. Portfolio deployment models

3
25. _____ for analyzing sales force size consider the impact of multiple influences like market potential, intensity of competition, and workload on market response that can improve salesperson deployment decisions.
A. Revenue/cost analysis techniques
B. Single-factor models
C. Sales and effort response models
D. Portfolio deployment models

3
26. Mark sees an ad in the newspaper of a new line of treadmills and orders for it by calling the number provided in the ad. Which of the following type of direct marketing methodology did the ad employ?
A. Direct response media
B. Direct mail
C. Catalog shopping
D. Kiosk shopping

399

27. Which of the following is a disadvantage of direct marketing?
A. Limited content support in direct-response advertising
B. Effectiveness of direct marketing cannot be measured
C. Restricts selective reach and segmentation opportunities
D. No flexibility provided in accessing potential buyers

400

28. Which of the following is an advantage of direct marketing?
A. Sufficient content support in direct-response advertising
B. Timing contact can be managed and personalized
C. Negative image factors are non-existent
D. Shipping and postal rates tend to decrease over time

400

29. Which of the following is true, with regard to an organizational buyer, of computer ordering?
A. It does not allow for direct purchase responses.
B. It makes it hard to monitor customer preferences.
C. It enables the buyer to lower inventory levels.
D. It increases the overall cost of inventory.

400

30. Which of the following types of networks is most likely to be present at a kiosk for customers to use?
A. Internet
B. Intraweb
C. Extranet
D. Intranet

400

Essay Questions

31. What are the major initiatives of a salesforce strategy?

32. Describe the different types of sales jobs.

33. List the activities that make up the selling process.

34. An important part of deciding the personal selling strategy is choice of the alternative channels to end-user customers. Explain the issues involved.

35. Explain the communications features of the Internet.

Chapter 14

Designing Market-Driven Organizations

True/False Questions

1. Traditional companies decentralize decision making when they run into hard times like economic downturns.

406

2. In traditional organizational structures, units were either within the organization and closely connected to other units, or they were outside the organization and not connected at all.

407

3. Knowledge workers may operate more effectively as conventional employees rather than “internal partners.”

407

4. The management of knowledge workers puts less emphasis on innovation and creativity.

407

5. “Talent marketplaces” inside the organization allow capable employees to plot their own career paths internally.

407

6. A key characteristic of new organizations is an emphasis on managing organizational process, rather than a primary emphasis on structure.

410

7. In the past, organizations were designed for agility and responsiveness rather than stability.

412

8. A key advantage of functional organizational design is its customer focus.

425

9. A new-product team is different from a venture team in a new-product team is comprised of functional specialists working on a specific new-product development project.

425

10. The market-focused organizational design is often used when a single product or a closely related line is marketed to one market target.

425

Multiple Choice Questions

11. Which of the following is true of conventional approaches to organizing?
A. Ideas and commands flow vertically between center and business units
B. Information and flow of knowledge between units are unrestricted 
C. Decision making is decentralized
D. Organizational hierarchy is not visible

406
12. Which of the following does the management of knowledge workers emphasize on?
A. Formal structures
B. Talent management
C. Reporting lines
D. Conventional culture

407

13. Which of the following does the management of knowledge workers emphasize less on?
A. Talent management
B. Team leadership
C. Formal structure
D. Culture of innovation

407

14. _____ are influential individuals who move across network clusters and carry ideas from one corporate silo to another and thereby generate new ideas.
A. Knowledge mules
B. Networked workers
C. Formal reporters
D. Silo scribes

409

15. Which of the following processes’ function is to define value for the organization?
A. New product development
B. Knowledge management
C. Logistics
D. Customer service

411

16. Which of the following processes’ function is to create value for the organization?
A. New product development
B. Logistics
C. Customer service
D. CRM

411

17. Which of the following processes’ function is to deliver value for the organization?
A. CRM
B. New product development
C. Knowledge management
D. Customer service

411

18. Which of the following is the first stage in aligning the organization with the market?
A. Aligning customer-based units with customers
B. Using integrating mechanisms such as segment managers
C. Improving alignment through informal lateral integration
D. Integrating functions like global account coordinators and market segment specialists

414

19. Which of the following is the final stage of organizational evolution?
A. The functional or product organization is retained.
B. Sales or product management takes informal steps to cross silos and solve customer problems.
C. Organizations use integrating mechanisms such as key account or segment managers.
D. Comprehensive approaches are adopted to get full structural alignment with the market.

414

20. The _____ of marketing activities across multiple functions is more common in market-oriented businesses serving business customers, and operating in uncertain markets with uncertain technologies.
A. centralization
B. integration
C. diffusion
D. collection

420
421

21. Which of the following marketing organizational forms is highly effective for tasks requiring little specialized investment, are nonroutine, and difficult to assess?
A. Bureaucratic form
B. Transactional form
C. Organic form
D. Relational form

422

22. Which of the following is an appropriate usage context for a transactional marketing organizational form?
A. Tasks that are repetitive, easily assessed, with no specialized investment required
B. Tasks that are repetitive, easily assessed, and requiring specialized investment
C. Tasks that are infrequent, difficult to assess, requiring highly specialized investment
D. Tasks that are nonroutine, difficult to assess, requiring little specialized investment

422

23. Which of the following is an appropriate usage context for an organic marketing organizational form?
A. Under competitive market conditions, low environmental uncertainty
B. Conditions of market failure, high environmental uncertainty, infrequent tasks
C. High environmental activity, under competitive market conditions, frequent tasks
D. Conditions of market failure, low environmental uncertainty, repetitive tasks

422

24. Which of the following are the performance characteristic of a bureaucratic marketing organizational form?
A. Highly effective for appropriate tasks, less adaptive
B. Highly adaptive, less efficient
C. Highly effective and efficient, less adaptive
D. Highly effective for nonroutine, specialized tasks, less efficient

422

25. Which of the following marketing organizational forms have the following performance characteristics: most efficient form; highly effective for appropriate tasks; less adaptive?
A. Bureaucratic form
B. Transactional form
C. Organic form
D. Relational form

422

26. Which of the following conditions suggests a market-oriented organizational design?
A. Substantial differences in the customer requirements in a given target market
B. Substantial similarities in the customer requirements in a given target market
C. Single market targets being served by dedicated strategic business units
D. Greater use of organizational designs that focus on products rather than customers

423

27. _____ organizational design assigns departments, groups, or individuals, responsibility for specific activities, such as advertising and sales promotion, pricing, sales, marketing research, and marketing planning and services.
A. Product-focused
B. Functional
C. Market-focused
D. Matrix

424

28._____ organizational design is used when a business unit serves more than one target and customer considerations are an important factor in the design of the marketing organization.
A. Product-focused
B. Functional
C. Market-focused
D. Matrix

425

29. Which of the following organizational designs would utilize a cross-classification approach that emphasizes two different factors, such as products and marketing functions?
A. Functional organizational design
B. Market-focused design
C. Product-focused design
D. Matrix design

426

30. Which of the following is a limitation of an internal marketing organization design?
A. Less control of activities
B. Limited familiarity with company operations
C. Lower commitment of employees to the organization
D. Lack of experience in other business environments

0

Essay Questions

31. Explain the traditional organizational structure and its limitations.

32. Describe the dependence of innovation and growth on knowledge workers. What should the management of these workers emphasize on?

33. Explain the importance of organizational agility and flexibility.

34. Give an account of the challenges in integrating marketing with other activities in a company.

35. Explain the issue of integration vs. diffusion in the organizational design of marketing.

Chapter 15

Strategic Marketing Implementation and Control

True/False Questions

1. The analytical dimension of marketing planning process is concerned with the organizational structure in which planning is carried out, along with the associated information resources and corporate culture.

2. Internal marketing involves developing programs to win line management support for new strategies.

3. External marketing involves changing the attitudes and behavior of employees working at key points of contact with customers.

4. Internal marketing goals include promoting the external marketing strategy.

5. The balanced scorecard method is used to implement marketing plans.

6. The balanced scorecard method formally includes an assessment of the strategy component across all aspects of the business unit at the same time.

7. A benefit of the balanced scorecard methodology is that it is feasible for any business unit level strategy and provides a means to link performance evaluation to strategy implementation.

8. The second step in marketing evaluation and control is determining performance metrics and standards.

9. When monitoring a firm’s effectiveness of marketing activities, external information sources must be excluded.

10. Marketing metrics should be chosen to reflect issues most closely linking marketing investments with value chain requirements.

Multiple Choice Questions

11. The _____ indicates marketing objectives and the strategy and tactics for accomplishing the objectives, and guides implementation and control. 
A. strategic marketing plan
B. traditional marketing design
C. integrated marketing communications
D. market positioning strategy

12. Which of the following techniques guides short-term marketing activities?
A. Strategic marketing plan
B. Annual marketing plan
C. Situation analysis
D. Positioning strategy

13. Which of the following marketing planning process dimensions is concerned with an organization’s structure, associated information resources, and corporate culture?
A. Analytical process dimension
B. Behavioral process dimension
C. Organizational process dimension
D. Cognitive process dimension

14. Which of the following marketing planning process dimensions is concerned with managerial perceptions, participation, and strategic assumptions?
A. Analytical process dimension
B. Cognitive process dimension
C. Organizational process dimension
D. Behavioral process dimension

15. Which of the following marketing planning process dimensions is concerned with techniques, procedures, systems, and planning models?
A. Analytical process dimension
B. Cognitiveprocess dimension
C. Organizational process dimension
D. Behavioral process dimension

16. Which of the following is true about internal marketing?
A. It positions the marketing strategy in the customer marketplace.
B. Its goals include promoting the external marketing strategy.
C. It aims at providing superior external customer service to support internal strategy.
D. Its aim is to better align internal market objectives with external capabilities.

17. Which of the following is true about internal marketing?
A. It positions the marketing strategy in the customer marketplace.
B. It involves changing the attitudes and behavior of customers at key points of contact with employees.
C. It is aimed at the potential customers within the company.
D. It is targeted at particular market segments and niches.

18. _____ is a formalized management control system that implements a given business unit strategy by means of activities across four areas: financial, customer, internal business process, and learning and growth (or innovation).
A. Benchmarking
B. Internal strategy-organization fit
C. Strategic marketing audit
D. Balanced scorecard method

19.Which of the following is true of the balanced scorecard method?
A. It translates aggregate and broadly defined strategies to very specific actions.
B. It provides a means to link customer satisfaction with value orientation.
C. It is not feasible for business unit level strategies.
D. It does not assess the strategy component across all aspects of the business unit.

20. The _____ approach allows consideration of specific activities which will accomplish the objective, but also formally includes an assessment of the strategy component across all aspects of the business unit at the same time. 
A. vertical assessment
B. balanced scorecard
C. strategic marketing audit
D. benchmarking

21. Which of the following is the initial step in setting up a strategic marketing evaluation program?
A. Obtaining and analyzing information for performance-gap identification
B. Selecting performance criteria and choosing relevant marketing metrics
C. Conducting strategic marketing audit
D. Assessing performance and taking necessary action

22. Which of the following is the strategic marketing audit used for?
A. To translate broadly defined marketing strategy into very specific actions
B. To provide a means to link performance evaluation to strategy implementation
C. To ensure that activities in one area do not interfere with activities in another area
D. To initiate a formal strategic marketing planning program

23. The results of the _____ provide the basis for selecting performance criteria and choosing relevant marketing metrics to assess actual performance against plans and tactical intent.
A. strategic marketing audit
B. integrated marketing communications
C. balanced scorecard
D. customer relationship analysis

24. _____ use both internal and external information sources to provide a structure for monitoring the effectiveness of marketing activities and strategies.
A. Marketing segmentation strategies
B. Balanced scorecard methods
C. Marketing metrics
D. Salesforce strategies

25. The choice of the most relevant marketing metrics should be made in the light of the need to:
A. track performance relative to alliances.
B. track performance relative to suppliers.
C. track performance over investment capabilities.
D. measure performance relative to strategy.

26. Which of the following is a danger of using a marketing dashboard?
A. The dashboard contains metrics only relevant to assessing past performance.
B. The dashboard contains metrics which only give insight into present performance.
C. The dashboard contains metrics which only give insight into future developments.
D. The dash board contains only metrics related to the main business drivers.

27. Which of the following approaches is a quality control technique useful in determining when operating results are fluctuating normally or instead are disorderly?
A. Value chain analysis
B. Statistical process-control methods
C. Benchmarking
D. Data-control processes

28. _____ is/are used to analyze and improve results in marketing performance measures such as the number of orders processed, customer complaints, and territory sales.
A. Value chain analysis
B. Benchmarking
C. Quality-control charts
D. Cluster analysis

29. A _____ indicates when the process is experiencing normal variation and when the process is out of control.
A. data-control process
B. value chain analysis
C. BCG matrix
D. control-chart analysis

30. Which of the following is true of a control-chart analysis?
A. It cannot be used to detect randomness in operating results.
B. Its control boundaries are set using historical data.
C. It can only be used to establish average and upper limits of the measure.
D. It can only be used to establish average and lower limits of the measure.

Essay Questions

31. What are the core tasks of a CMO?

32. Explain the dimensions of the marketing planning process.

33. Discuss factors that influence the implementation of a marketing strategy.

34. Discuss how organizational designs help implement a strategic marketing plan.

35. What guiding points should be considered when selecting relevant marketing metrics?