Chapter 2 –Examining the Infrastructure for Marketing Management
True/False Questions
1. Outsourcing means a company decides what is critical to their business and they then hire others to do the less critical, or core-mission oriented tasks. True (moderate)
2. A core competency is fairly easy for competitors to replicate in a free marketplace. False (moderate)
3. Good mission statements focus on a limited number of goals and define the company’s major competitive spheres. True (easy)
4. A strategic business unit (SBU) has its own set of competitors, distinct from other SBUs in the company. True (moderate)
5. Acquiring a supplier is a growth strategy that is achieved through integration. True (moderate)
6. Microsoft is a huge firm which nonetheless has not lost its ultracompetitive edge. The text attributes this to Microsoft’s corporate culture. True (easy)
7. Scenario analysis uses case studies of actual, historical company events and changes the assumptions related to the outcomes to improve future responses. False (moderate)
8. A proper SWOT analysis will include a market opportunity analysis, or MOA. True (moderate)
9. The SW portion of the SWOT analysis is where the external environments of the business are closely examined. False (moderate)
10. Strategy guru Michael Porter’s three “generic” strategies are: cost leadership, diversification, and focus. False (moderate)
11. Part of strategic program implementation is estimating the costs for the desired action. True (difficult)
12. The first steps in managing implementation of a strategy are to break down every program into is component activities and identify the resources required and their associate costs. True (moderate)
13. The late strategy guru Peter Drucker said that for businesses, “doing the things right” was more important than “doing the right thing.” False (moderate)
14. A marketing information system consists of the people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers. True (moderate)
15. Marketing information systems are developed from internal company records, marketing intelligence, and marketing research. True (easy)
16. The systematic collection, analysis, and reporting of data and findings relevant to specific marketing situation is called marketing research. True (moderate)
17. Small companies can engage in marketing research in a number of creative and affordable ways, including using the Internet or taking advantage of local university students who need business projects. True (easy)
18. Typically, companies budget about 11–12 percent of company sales for marketing research. False (moderate)
19. The last step in marketing research is developing the research plan. False (difficult)
20. Data published by the government and data purchased from outside suppliers can improve the quality of a company's marketing intelligence efforts. True (moderate)
21. Primary data is generally available more quickly and at a lower cost than secondary data. False (moderate)
22. Primary data are data that were gathered for another purpose and already exist somewhere. False (moderate)
23. Because it is hard to track and verify, behavioral data are less reliable in understanding customer behavior than are customer statements of their behavior. False (moderate)
24. To obtain a representative sample, a probability sample of the population should be drawn. True (difficult)
25. If speed is of the essence for a marketing research project, the best contact methods are either online or telephone interviewing. True (easy)
26. The disadvantages of using the personal interview method to conduct marketing research are that it is the most expensive method and it is subject to bias and distortion. True (moderate)
Multiple Choice Questions
27. In the first half the 20th century, Ford Motor Company owned rubber plantations in Brazil to supply itself with raw materials for tire making. At some point, Ford began to buy all tires from outside vendors, and put more energy and focus on making the vehicles themselves. This is an example of ______.
a. the value chain
b. outsourcing (moderate)
c. fulfillment management
d. portfolio balancing
e. inbound logistics
28. A university with growing budget concerns decided to lay off all groundskeepers and hire the work out to a large, local landscaping firm. That firm hired most of the laid off workers. Most campus visitors and students were never aware of the change. This is an example of ______.
a. inbound logistics
b. the value chain
c. outsourcing (moderate)
d. open markets
e. portfolio management
29. Bernardo Sampson has a restaurant in northeastern China that makes the best Chinese dumplings, according to his well-traveled customers. According to Bernardo, the key is controlling the dumpling filling preparation process and making his own dumpling wrapper from an old family recipe. Other inputs to the business, such as kitchen equipment, and in some ways, employees, are less important to creating the best dumplings. The dumpling filling preparation and homemade dumpling wrapper could be considered Bernardo’s ______.
a. outsourcing genius
b. less critical resources
c. holistic marketing effort
d. core competency (moderate)
e. outbound logistics
30. Which of the following is NOT a characteristic of a core competency?
a. It has applications in a wide variety of markets.
b. It is a source of competitive advantage.
c. It makes a significant contribution to perceived customer benefits.
d. It is difficult for competitors to imitate.
e. It can easily be outsourced. (easy)
31. According to Figure 2.3 Company Marketing System in the text, “Factors Influencing Company Marketing Strategy,” the center of the all marketing activity should be ______.
a. publics
b. suppliers
c. stakeholders
d. target customers (moderate)
e. the marketing control system
32. Strategic planning goes on at all of the following organizational levels, EXCEPT:
a. corporate level.
b. retail level. (moderate)
c. division level.
d. business unit level.
e. product level.
33. Blind Bill makes custom window treatments and sells exclusively to commercial homebuilders. CEO William Learned III often follows site finish managers around onsite to see how the customers view the products and to strengthen the partnership he feels he has with them. Learned’s goal is to improve the company’s offerings. In the holistic marketing framework, this type of activity would be called ______.
a. core competency strengthening
b. value exploration
c. value creation (difficult)
d. value fulfillment
e. value delivery
34. The late business guru Peter Drucker asked all of the following questions about defining an organization’s mission, EXCEPT:
a. What should the business be?
b. What will the business be?
c. What is the business?
d. Who is the customer?
e. What has the business been? (moderate)
35. A good mission statement can provide all of the following to employees, EXCEPT:
a. a shared sense of purpose.
b. a shared sense of company profits. (moderate)
c. a shared sense of direction.
d. a guide that helps geographically distant employees work independently and collectively.
e. a shared sense of opportunity.
36. Good mission statements can define the company’s major competitive spheres. The vertical sphere includes ______.
a. the range of products and applications the company will supply
b. the type of market or customers the company will serve
c. the number of channel levels from raw material to final product (difficult)
d. the range of regions or countries in which a company operates
e. the range of core competencies the company will master and leverage
37. Which of the following is NOT normally a part of the Strategic Planning Process?
a. Corporate planning.
b. Business unit planning.
c. Division planning.
d. Retail planning. (moderate)
e. Product planning.
38. What is the proper order for the Strategic Control Process?
a. measure results à diagnose results à take corrective action (moderate)
b. diagnose results à measure results à take corrective action
c. organize results à implement results
d. corporate panning à division planning à business planning à retail planning
e. planning à implementing à controlling
39. Blind Bill makes custom window treatments and sells exclusively to commercial homebuilders. Which of the following is NOT true of Blind Bill?
a. Homebuilders are its customer group.
b. Its market segment is well defined.
c. Window coverage is its customer need.
d. It limits its sales to metal or vinyl miniblinds. (easy)
e. The various window treatment products are its technology.
40. According to Levitt, market definitions that are business-oriented rather than product-oriented are superior. Such definitions include each of the following, EXCEPT:
a. customer needs.
b. geographical constraints. (moderate)
c. customer groups.
d. technology.
e. relevant target markets.
41. Carmaker Toyota has the Scion division that is aimed at providing entry-priced vehicles to new members of the Toyota “family.” Scion has independent budgeting, management direction, and profit/loss responsibility within the larger company. Scion is ______.
a. only sold on the west coast
b. only one market segment for Toyota, because the Camry is so popular
c. a strategic business unit (moderate)
d. a competitor for Lexus vehicles
e. horizontally integrated with the parent company
42. Perhaps the least intuitive part of assessing growth opportunities for the company is ______.
a. planning new businesses
b. downsizing and/or terminating older businesses (moderate)
c. deciding whether to integrate by buying a supplier or a customer
d. choosing an intensive growth strategy
e. employing a market penetration approach
43. Attempting to gain market share with current products in current markets is called ______.
a. forward integration
b. horizontal integration
c. concentric diversification
d. market development
e. market penetration (moderate)
44. Russ Clark, a NAPA auto parts dealer, bought out a competitor’s store. This is an example of ______.
a. market penetration
b. backward integration
c. horizontal diversification
d. conglomerate diversification
e. horizontal integration (moderate)
45. Many years ago, French utilities management company Vivendi decided to buy a portfolio of entertainment businesses that included theme parks and rights to a music catalog. The purpose of the acquisition was to grow company revenues and profits. This was an example of ______.
a. integrative diversification
b. horizontal integrative growth
c. conglomerate diversification (difficult)
d. market development
e. concentric diversification
46. Tired of high prices and poor service, and convinced she can do better, funeral home owner Macy Mbacke-Abdullah decides to purchase the wholesaler that she has been buying caskets from. This is an example of ______.
a. backward integration (moderate)
b. forward integration
c. diversified integration
d. horizontal integration
e. concentric integration
47. A company’s ______consists of its structures, policies, and corporate culture.
a. headquarters
b. organization (moderate)
c. sales position
d. industry
e. scenario
48. ______has been defined as the shared experiences, stories, beliefs, and norms that characterize an organization.
a. Corporate structure
b. Corporate history
c. Corporate strategy
d. Corporate culture (moderate)
e. Corporate organization
49. Which of the following is NOT considered to be a part of an organization’s culture?
a. Experiences.
b. Stories.
c. Beliefs.
d. Salaries. (easy)
e. Norms.
50. Which of the following is NOT one of Hamel’s recommendations for crafting corporate strategy?
a. Management should encourage fresh ideas.
b. Employees with youthful perspectives should participate.
c. Those who are new to the industry should be asked to contribute.
d. The company should not forget to include ideas from those who do not work close to headquarters.
e. Senior management should make and hand down strategy. (moderate)
51. Which of the following would NOT be considered a part of scenario analysis for General Motors?
a. The company adopts the most probably scenario and watches for signs that confirm it.
b. The CEO asks for plausible representations of the company’s future to be considered.
c. Company analysts present last quarter's earnings for the board. (difficult)
d. Managers consider how they will deal with a declaration of bankruptcy by a major supplier.
e. Unit chiefs map out strategies in case a strike disrupts production during upcoming contract negotiations with labor.
52. Which of the following is in the correct order, as a part of the Business Unit Strategic-Planning Process?
a. mission à SWOT à strategy formulation à implementation (moderate)
b. external analysis à internal analysis à program formulation à mission statement
c. program formulation à strategy formulation à goal formulation
d. program formulation à strategy formulation à feedback à control
e. mission à SWOT à program formulation à strategy formulation
53. SWOT refers to ______.
a. semper wit omnicus terapis
b. internal and external environmental analysis (moderate)
c. strategy and goal formulation
d. the control and feedback loop in the strategic planning process
e. implementing strategy across the organization
54. SWOT refers to ______.
a. semper wit omnicus terapis
b. strategy with operations talent
c. strategic watching of technology
d. strengths, weaknesses, opportunities, threats (easy)
e. strategy formulation, willingness to negotiate, operational excellence, temperament suitable to succeed
55. Marketing opportunity analysis (MOA) involves asking each of the following questions, EXCEPT:
a. Does the company have access to the resources needed to deliver customer benefits?
b. Can the benefits involved in the opportunity be articulated to the target customer?
c. Can the company deliver the benefits at least as well as competitors? (difficult)
d. Will the financial rate of return meet or exceed the company’s threshold for investment?
e. Can the target market(s) be located and reached with cost-effective media and trade channels?
56. A(n) ______is a challenge posed by an unfavorable external trend or development that would lead, in the absence of defensive marketing action, to lower sales or profit.
a. environmental threat (moderate)
b. SWOT team
c. outside sales investment
d. marketing opportunity
e. organizational weakness
57. Which of the following is NOT part of effective goals?
a. Goals must be consistent.
b. Goals must be realistic.
c. Goals must be arranged hierarchically, from most to least important.