BUS 346 Ch. 2 – Flashcards
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If a firm wants to develop a sustainable competitive advantage it should:
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examine its operations and customer relations to identify significant things its competitors cannot easily copy
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What are the four overarching strategies of strategic excellence?
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Locational excellence Customer excellence Operational excellence Planning excellence
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Product Excellence
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Having products with high perceived value and effective branding and positioning
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Locational Excellence
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Having good physical location and internet presence
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Customer Excellence
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Focuses on retaining loyal customers and excellent customer service
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Operational Excellence
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Achieved through efficient operations and excellent supply chain and human resource management
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When Ramona, the keynote speaker at a major business leaders' conference, arrived in the middle of the night at the Ritz-Carlton, she was exhausted and her suit was wrinkled from her ten-hour plane trip. The night clerk found someone to dry clean Ramona's suit and have it ready for her morning presentation. She has been a loyal Ritz-Carlton customer ever since. In this example, Ritz-Carlton demonstrated the macro strategy of:
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Customer excellence-- the employee went out of their way to deliver excellent customer service
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Taking steps to encourage customer loyalty is one way to:
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Sustain an advantage over competitors
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Some banks have begun offering special accounts designed to attract junior high school students. These kids save in such small amounts that the accounts cost banks more to maintain than they are worth. But bankers know that consumers are creatures of habit and hope that the young people they serve now will become adult customers. These banks recognize:
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The life-time value of customers
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Narbonne's, an upscale department store, instructs sales personnel that whenever a customer asks where something is, they should drop what they are doing and offer to escort the customer to what they are looking for. The company's reputation for excellent customer service has probably resulted in:
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A sustainable competitive advantage
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Firms achieve _______ through efficient procedures and excellent supply chain management.
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Operational exellence
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Marketers want their firms to develop excellent supply chain management and strong supplier relations so they can:
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Create a sustainable competitive advantage
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For many years, Southwest Airlines distinguished itself as the low-cost airline. Now, many other low-cost competitors have entered the market. Similarly, Southwest was one of the first airlines to offer online ticketing. Now, all airlines have online ticketing. These examples suggest that:
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No single strategy is likely to be sufficient to build a sustainable competitive advantage
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"Effective marketing doesn't just happen." It is...
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Planned
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Carla has been directed by her regional marketing manager to cut prices on seasonal items, submit an ad in the local paper, and tell distributors to reduce deliveries for the next month. Which step of the strategic marketing planning process is Carla engaged in?
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Implement marketing mix and resources --(Price cuts, Promotion, and distribution changes (Place))
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When conducting a SWOT analysis, in what phase of the strategic marketing process is an organization presently engaged?
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Planning
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The automobile manufacturing industry closely watches annual consumer satisfaction surveys. For years, Japanese car companies consistently had the highest levels of customer satisfaction, creating a ______ for these companies.
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Sustainable competitive adavantage
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Which of the following is LEAST likely to create a sustainable competitive advantage?
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Lowering prices
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Even when large discount retailers enter a market, a few small, local retailers survive and prosper. These small retailers have probably developed a(n) ________ that allows them to survive
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Sustainable competitive advantage
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As part of her company's SWOT analysis, Valerie is assessing the company's internal environment, including:
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Strengths and Weaknesses
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Samantha is charged with assessing her company's external environment as part of a SWOT analysis. Samantha will study her company's:
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Opportunities and Threats
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Manufacturers who use just-in-time manufacturing systems coordinate closely with suppliers in order to ensure that materials and supplies arrive just before they are needed in the manufacturing process. While just-in-time systems can offer major advantages in terms of inventory costs, they must be carefully managed. If a firm found that its just-in-time system was badly managed, leading to frequent manufacturing delays due to missing parts, this would represent a __________ in a SWOT analysis.
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Weakness
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For U.S. businesses with strong export capabilities, expansion of U.S. trade agreements with other countries creates (SWOT):
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Opportunities
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2006, Ford Motor Company announced it would severely cut back automobile production. For parts companies supplying Ford Motor, this represented a(n) (SWOT):
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Threat
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Lionel is asked to conduct an STP analysis for his firm. The first step he should perform in this analysis is to:
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Divide the market into subgroups
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Recently, Walmart announced it would begin selling organic food products. In doing so, Walmart is probably trying to:
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Attract a different market segment --these customers probably don't shop there now
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For years, when considering new products, marketers at Celestial Seasonings asked themselves, "What would Stacy think?" Stacy was a fictional character representing 25-50 year old, educated, upper-income women who rarely watched television but did a lot of reading. "Stacy" represented Celestial's major:
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Target market segment
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Many of today's college graduates will make their livings providing goods and services to "baby boomers," the large group of Americans born in the period after World War II. Baby boomers are a _________________ market segment.
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Demographic
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After identifying various market segments that her company could pursue, Lisa evaluated each segment's attractiveness based on size, income, and accessibility. Lisa was involved in:
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Target marketing
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LeBron James, Alex Rodriguez, and other athletes are paid huge sums of money by companies for celebrity endorsements. If, endorsements by these athletes create a clear understanding among consumers of the companies' products, they can help with the firm's ________________ strategy.
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Positioning
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Positioning=
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the process of defining the marketing mix variables so that target customers have a clear, distinctive understanding of what a product does or represents in comparison with competing products.
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Imagine that you are in a gourmet food store choosing your favorite "comfort" food instead of being in a classroom taking this test. Notice the packaging, colors, labels, even the fonts used on labels. All of these efforts are part of the marketer's:
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Positioning strategy
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When positioning products relative to competitors' offerings, firms typically are most successful when they focus on opportunities:
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That build on their strengths relative to those of their competitors'
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Many small businesses whose competitors are national franchises advertise "we are locally owned" or "we have been here since 1951." This is part of these firms':
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Positioning strategy
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When discussing the marketing planning process, STP stands for:
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Segmentation Targeting Positioning
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The idea of value-based marketing requires firms to charge a price that:
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Captures the value the customers perceive they are receiving
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E-books, in addition to being an alternative product form, provide __________ value creation since they can be downloaded via the Internet immediately when they are needed.
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Place
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In value-based marketing, promotion communicates the:
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Value Proposition
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Google and other search engines allow marketers to bid to have their ads shown when consumers search on keywords related to the firm's products. These marketers are attempting to create value through ______.
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Promotion
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In order to effectively communicate value to target markets, marketers must first:
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Understand their customers
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Craig sees that his company's quarterly sales and profits are significantly above projections and says, "That's great. Let's keep doing what we've been doing." Craig is ignoring the ______ step of the marketing planning process.
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Evaluate performance
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he first objective in the Evaluate Performance phase of the marketing planning process is to:
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Review implementation problems using metrics
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Kathy reviews her division's quarterly results and sees that some units exceeded goals while others did not. Next, she will attempt to determine why performance of the different units varied, and whether the variation...
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Was due to factors within or outside the firm's control
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Understanding the causes of performance, regardless of whether that performance exceeded, met, or fell below the firm's goals:
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Enables the firm to make appropriate adjustments
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Laura is reviewing sales data after a recent in-store promotion of her company's diet products. The data show success in some stores and limited response in others. Laura will probably next review the company's:
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implementation programs, to see if the promotion was handled consistently in the different stores
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After conducting STP analysis for her custom auto parts store and developing strategies for each of the four Ps, Monique now has to make _____________ decisions
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Resource allocation
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Lamar owns four dry cleaning stores in the suburbs of Orlando. He recently updated his STP analysis, and has just finished adjusting his marketing mix based on the STP results. His next strategic marketing decision will likely involve:
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How to allocate resources among his four stores
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In most companies, marketing resource allocation decisions are made at the SBU or ___________ level of the firm.
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Product line
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Product Line=
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A group of products that consumers may use together or perceive as similar in some way
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Heather has been assessing a number of her firm's products using the Boston Consulting Group approach to portfolio analysis. She has been trying to assess the strength in a particular market and is looking at the sales of the product and the overall market as well as the sales of competitors. Heather is trying to determine:
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The product's relative market share
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To determine how attractive a particular market is in using the BCG portfolio analysis, __________________ is established as one axis.
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Market growth rate
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In BCG portfolio analysis, products in low-growth markets that have received heavy investment and now have excess funds available to support other products are called:
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Cash cows
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Fernando was thrilled to find out that his company had just decided to invest a great deal of money in the product he was managing. He knows that even with its recent high rate of growth and the fact that it dominates its market, he would need more money to establish it firmly. Using the BCG portfolio analysis, his product would be classified as a(n):
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Star
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Using the BCG portfolio analysis, a "dog" should be phased out unless:
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It complements or boosts the sales of another product
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The strategic marketing planning process is not...
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Always sequential
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What are the four major market growth strategies marketers typically analyze?
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Market penetration Market development Diversification Product development
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Market Growth Strategies: Product Development Strategy=
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New product, existing customers
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Market Growth Strategies: Market Development Strategy=
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Existing product, new customers
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Market Growth Strategies: Market Penetration Strategy=
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Current product, current customers
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Market Growth Strategies: Diversification Strategy=
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New products, new customers
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For many years, because of the size of the U.S. economy, domestic companies ignored international markets, preferring instead to develop new product offerings for existing customers. These companies were pursuing a ________________ strategy.
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Product development
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Adrienne decides to add new sales representatives and increase advertising in her existing market for her current line of security systems. Adrienne is pursuing a __________ growth strategy
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Market penetration
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Quitman sells his business language dictionary to college students throughout the United States. He wants to start selling the book to international students abroad. Quitman wants to pursue a __________________ growth strategy.
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Market development
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When pursuing a market development strategy, expanding into international markets is generally:
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More risky than expansion into domestic markets --(there are many, many differences in different countries/cultures)
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H is a small, local heating and air conditioning business. The area military base is a potential source of growth, and H already installs and services the type of equipment the military would require, but it is difficult to get established as a certified government contractor. H is considering a ____________ growth strategy.
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Market development strategy
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Many states create licensing requirements for a variety of professionals (such as lawyers and accountants) designed to restrict entry into their market by professionals from other states. This strategy limits ____________ growth strategies.
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Market Development
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Marketers who design and offer new products and services to their existing customers are pursuing a ____________________ growth strategy.
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Product Development
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Most banks now have customer relationship software which, when a customer contacts the bank, tells the service representative what types of accounts, loans, and credit cards the customer currently has. Service representatives use this information to sell some of the other services the bank currently offers to these customers. This is a ___________________ growth strategy.
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Market Penetration
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Maryam called her auto insurance agent to renew her policy. The agent told her about new types of insurance that are now available--to cover her apartment, or even the engagement ring she just got from her fiancé. The agent was pursuing a ________________ growth strategy.
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Product development
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As discussed in the chapter opening, Dunkin' Donuts, Starbucks, and McDonald's have all found ways to succeed in the branded coffee market. How have they managed to do this?
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Each of the firms employ marketing strategies that take advantage of the firm's unique strengths
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Zara is a women's clothing retailer headquartered in Spain, with stores located in many countries. Zara has developed a "quick response" system that allows store merchandise to be adjusted rapidly to fit changing customer preferences. Every aspect of Zara's operation is optimized for this system, making it difficult for competitors like The Gap to duplicate. Zara has established:
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A sustainable competitive advantage
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Fourteenth National Bank prides itself on offering better service than any of its competitors. If this is accurate, and if customers recognize and value Fourteenth National's superior service, the bank creates and delivers value through:
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Customer excellence
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Anita has gone to the same hair salon for the past ten years. She believes that her stylist, the salon owner, does a better job of cutting and styling her hair than anyone else could. Other salons have opened closer to Anita's home, some offering more plush facilities or lower prices, but she isn't tempted to switch. Anita's attitude toward the salon is an example of:
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Customer Loyalty
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Customer retention programs are based on what concept?
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Customer relationships should be viewed by a lifetime value perspective
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Most banks implement customer retention programs aimed at their best customers. They do this because they know that retaining customers usually results in:
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Increased long-term profits
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Some universities offer online degree programs, competing with traditional colleges based on the convenience of taking online courses. These online programs are pursuing which macro strategy?
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Locational Excellence
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When a pharmaceutical company develops a new medication, it typically applies for a patent in order to prevent competitors from developing copycat products for several years. Pharmaceutical companies apply for patents in order to establish:
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A sustainable competitive advantage
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A "frequent diner" card at a restaurant, offering a free appetizer for every $100 in food purchases is an example of:
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A customer loyalty program
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Excellence in human resource management is an element of which of the macro strategies?
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Operational excellence
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Steps of the Strategic Marketing Planning Process
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1) Define the business mission 2) Situation analysis 3) Identify and evaluate opportunities 4) Implementing marketing mix and allocating resources 5) Evaluate performance
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In mid-2010, Hewlett-Packard Company (HP) acquired Palm Computing, Inc., a manufacturer of personal devices and smart phones. Before deciding to acquire the company, strategic planners at HP spent time thinking about how Palm and HP would "fit" together, and how the acquisition might change HP's core goals and objectives. The strategic planners were engaged in the ____________ step of the strategic marketing planning process.
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Define the business mission
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After defining the business mission, what should a firm do next to develop a marketing plan?
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Perform a situation analysis
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In a SWOT analysis, increasing gasoline prices would represent a potential ______ for manufacturers of electric cars.
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Opportunity
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An advertising campaign for Geico Insurance uses the slogan, "So easy, even a caveman could do it" to emphasize the ease of buying insurance on Geico's website. This campaign is part of Geico's:
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Positioning strategy
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Abercrombie & Fitch, a hip clothing retailer, includes a "Share it!" button on its website. This button encourages an Abercrombie customer to post a link to a product page (perhaps showing a new style of jeans) on Facebook or Twitter. Abercrombie & Fitch hopes that the customer's friends (who are probably very much like current customers) will click the link, visit the page, and make purchases. This is an example of a ______ growth strategy.
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Market penetration
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Sodexho is a corporation that manages school cafeterias, university dining halls, mess halls at military bases, concession stands at sports arenas, and other large-scale food service facilities. If Sodexho were to begin to sell individual frozen meals in supermarkets, it would be pursuing a ______ growth strategy.
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Diversification
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The Apple iPad is the market leader in the new--and fast-growing--tablet computer market. Based on BCG portfolio analysis, how should Apple handle allocating resources to the iPad?
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Apple should be prepared to invest heavily to help the iPad to achieve its maximum potential in the market (b/c it is a star on the BCG scale)
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Singapore Airlines seeks to differentiate itself from competing airlines, in part through innovative design of its airplane seats and in-flight entertainment systems. Through continuous innovation in these areas, Singapore Airlines is pursuing a ______ macro strategy.
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Product excellence
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3M involves its customers in the process of developing new products. In this way, it can benefit from current customers' insights and develop new products that will meet these customers' needs. 3M is pursuing a ______ growth strategy.
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Product development
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Over the last few months, Juan and his colleagues have analyzed the current business situation, and then identified target markets for his firm's personal care products. Finally, they developed the products, prices, distribution and promotion that should appeal to each of those target markets. In doing so, Juan has also identified what he believes is an advantage his competitors cannot match. Juan and his colleagues have been developing:
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A marketing strategy
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Gerald's Tire Store sets itself apart from competitors by the extra attention it pays to providing fast, courteous service in a clean, professional looking environment. Gerald's has used this strategy for over 40 years, expanding to 15 outlets. Gerald's Tire Store has created a ___________________ to create and deliver value and to develop a sustainable competitive advantage.
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Macro, or overarching, strategy
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Which of the following is the best way to build a sustainable competitive advantage using product excellence?
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Positioning a product using a clear, distinctive brand image
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A competitive advantage based on location is often sustainable because:
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It is not easily duplicated
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Four companies dominate the cereal industry. These firms produce in large volumes, promote heavily, and control access to the supermarket shelves through "slotting allowances," which are payments to retailers in return for shelf space. Combined, these four firms have:
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A sustainable competitive advantage
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Value creation through Place decisions for a consumer product involves:
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making sure the product is available in the stores where customers will want to find it, and that it is always in stock so they can buy it when they want to.
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In recent years, cellular (mobile) service providers have worked hard to eliminate "dead zones," providing customers with service wherever they traveled. By working to make the network available in more locations, cellular service companies were focusing on __________ value creation.
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Place
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When firms successfully implement poor strategies (perhaps due to good luck) or do a poor job of implementing good strategies, it can be difficult to:
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Evaluate performance and make adjustments
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In 2007, Apple Computer Company introduced its new iPhone, adding a cellular telephone, a camera, and Internet access to its iPod. The company was pursuing a(n) __________ strategy.
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Product Development
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The goal of a customer excellence strategy is to gain loyal customers. Customer loyalty can be developed through:
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Having a strong brand Offering unique merchandise Providing superior customer service --(answer on test: "all of these")
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Allen is in the marketing department of a mid-sized firm that develops and sells communications systems. He is proud of the Human Resources area in the company that provides the firm with excellent employees. Allen himself really enjoys his work, but he knows the work of HR helps create an advantage for the firm because:
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-Customers appreciate the kind of service knowledgeable employees provide -Employees play a major role in the success of a firm -It is easier to communicate with and inspire the customer if the employees believe in what the firm is doing -Building customer loyalty depends on a committed work force --(answer on test: "all of these")
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In its Campaign for Real Beauty, Dove was able to connect with important parts of its customer base by:
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-Creating high impact campaigns at a lower cost -Expanding beyond traditional constraints of advertising -Connecting directly w/ customers via internet --(answer on test: "all of these")
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After performing an STP analysis, marketers implement ____________ for each target market.
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Pricing, Product, Place, and Promotion strategies --(answer on test: "all of these")
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When choosing marketing communication methods, the most effective and efficient option depends on:
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The customer The value created The message --(answer on test: "all of these")
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Brad is reviewing the performance of his franchise sandwich store. As a franchisee, he has access to comparative data from other stores. Brad will likely look at ____________ data for other stores to help him to evaluate his performance.
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Sales Gross margin Number of customers Coupon redemption --(answer on test: "all of these")
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Portfolio analysis is a useful and powerful tool, but firms often need to take a more balanced approach because:
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-Measures are difficult to obtain and project -Classifications can become self-fulfilling prophecies and strengths and weaknesses are distorted -Substitute approaches can offer different insights --(answer on test: "all of these")
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Starbucks has developed a number of metrics beyond purely financial metrics. Knowing the importance of perceptions and knowing the importance of developing ways to demonstrate its activity, Starbucks tries to find clear ways to:
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-Build brand equity -Demonstrate its sense of corporate responsibility -Address the concerns of opponents at a local, national, and global level -Help consumers feel better about their purchases --(answer on test: "all of these")
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Greta is the marketing director for the Pump-N-Slurp convenience store chain. She recently developed a marketing plan for the firm and presented it to company executives. Which of the following did Greta probably include in Pump-N-Slurp's marketing plan?
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Specific plans for each of the four Ps Marketing objectives Opportunities for the firm Perceived weaknesses of the firm --(answer on test: "all of these")
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Marketers want their firms to develop efficient operations because this kind of efficiency:
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-Usually leads to lower prices or greater pricing flexibility -Allows the firm to offer greater value to customers -Makes it easier to get the products customers want to them when they want them -Can lead to more attractive margins. --(answer on test: "all of these")
