Marketing Chapter 2 – Flashcards
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Which of the following is true of strategic planning in a firm? A) It deals with maintaining the company's current business ventures. B) It focuses on the firm's internal environment rather than the external environment. C) It occurs at the business-unit, product, and market levels rather than at the corporate level. D) It deals with adapting the firm to take advantage of changing marketing opportunities. E) It involves preparing short-term investment objectives at the product level.
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D) It deals with adapting the firm to take advantage of changing marketing opportunities
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Cosmetics firm SatinSilk is revamping its mission statement and advertising strategy. The CEO stresses that the new mission statement should be market-oriented rather than product-oriented. Which of the following mission statements will best suit the company? A) to create the best possible products and sell them at the best possible prices B) to sell hypoallergenic cosmetics products made only from the finest organic ingredients C) to give customers the complexion they dream about by providing products suited to their needs D) to become a market leader in every cosmetics product category E) to increase our market share in the cosmetics segment and increase profit margins
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C) to give customers the complexion they dream about by providing products suited to their needs
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A company's mission statement should most likely be ________. A) defined in terms of satisfying basic customer needs B) focused on the products and services the company sells C) defined by the profits the company strives to earn D) directed at the company's employees and not at its customers E) focused on the manufacturing technology that the company uses
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A) defined in terms of satisfying basic customer needs
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Which of the following best describes a company's business portfolio? A) the list of all the marketing activities in which the company invests B) the target segments of the company's various businesses C) the company's products or services in a particular market D) the collection of businesses and products that make up the company E) the company's strengths in terms of technology, people, and products
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D) the collection of businesses and products that make up the company
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Business portfolio analysis is defined as the process in which management ________. A) studies the products and strategies of competitors to improve the company's own products B) analyzes consumer feedback in order to better position the company's brand image C) assesses the attractiveness of an SBU's market and the strength of its position in the market D) segments the company's markets to reach target consumers effectively E) conducts marketing research to evaluate the company's marketing strategy
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C) assesses the attractiveness of an SBU's market and the strength of its position in the market
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Which of the following criteria provides a measure of market attractiveness in the Boston Consulting Group approach? A) relative market share B) market sentiment C) return on marketing investment D) market growth rate E) brand image
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D) market growth rate
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Which of the following criteria does the Boston Consulting Group approach use to provide a measure of a company's strength in the market? A) relative market share B) return on marketing investment C) market sentiment D) market growth rate E) annual profit
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A) relative market share
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In the BCG growth-share matrix, stars refer to products or businesses with a ________. A) low market share in a niche market B) low relative market share in a market with high growth prospects C) greater market share than all their competitors combined in a saturated market D) high market share in a market with a high growth rate E) high market share in a market that is set to shrink significantly
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D) high market share in a market with a high growth rate
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In the BCG growth-share matrix, question marks refer to products or businesses with a ________. A) low market share in a niche market B) low market share in a market with high growth prospects C) greater market share than all their competitors combined in a saturated market D) high market share in a market with a high growth rate E) low market share in a market that is set to shrink significantly
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B) low market share in a market with high growth prospects
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In the BCG matrix, ________ refer to low-growth, high-share businesses or products. A) stars B) cash cows C) question marks D) dogs E) heroes
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B) cash cows
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Omni Healthcare's analgesic drug Cetaprin has a 40% share in the analgesics market in the country of Terrania. Its closest competitor, Febex, has a 25% share in the market, while four other analgesic brands split the remainder. Which statement indicates that Cetaprin is a cash cow according to the BCG matrix? A) Omni Healthcare often takes money from other strategic business units to support Cetaprin. B) A customer survey shows that Cetaprin users do not prefer it to other analgesics in the market. C) The demand for analgesic drugs in the Terranian market is expected to remain stable. D) Febex is rapidly gaining market share over Cetaprin due to aggressive marketing efforts. E) The Terranian market for healthcare products is expanding rapidly.
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C) The demand for analgesic drugs in the Terranian market is expected to remain stable.
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Kobe Healthcare's analgesic drug Dilophin has a 45% share in the analgesics market in the country of Bodonia. Its closest competitor, Caritin, has a 25% share in the market, while three other drugs split the remainder. Which statement indicates that Dilophin is a star according to the BCG matrix? A) Few players are willing to enter the analgesic drug market since the market has poor growth potential. B) A customer survey has revealed that Dilophin has the poorest brand-name recognition of any analgesic in the market. C) The demand for analgesic drugs in the Bodonian market is expected to remain stable. D) Caritin is rapidly gaining market share over Dilophin as a result of aggressive marketing efforts. E) The Bodonian market for healthcare products is expanding rapidly.
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E) The Bodonian market for healthcare products is expanding rapidly.
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Which of the following products would the electronics company CypressSound classify as a cash cow in its BCG matrix? A) Cyan-a cell phone that is designed for music lovers and has a very low market share in a market that is growing steadily B) Boosh-a home entertainment system that has a strong market share in a market that is likely to expand in the future C) Xpress-an MP3 player that has a high market share in a market that is not expected to grow significantly D) AutoPlay-a car audio system that has a high market share in a market that has been growing constantly E) Unipress-a CD player that has a very low market share in a market that is shrinking rapidly
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C) Xpress-an MP3 player that has a high market share in a market that is not expected to grow significantly
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Vertigo is an electronics company. According to the BCG matrix, which of the following products of Vertigo would most likely classify as a question mark? A) Blue-a cell phone that is designed for music lovers and has a very low market share in a market that is growing steadily B) Electra-a home entertainment system that has a strong market share in a market that is likely to expand in the future C) Jump-an MP3 player that has a high market share in a market that is not expected to grow significantly D) SpinDrive-a car audio system that has a high market share in a market that has been growing constantly E) SoLo-a CD player that has a very low market share in a market that is shrinking rapidly
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Blue-a cell phone that is designed for music lovers and has a very low market share in a market that is growing steadily
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In the BCG matrix, ________ are low-share businesses and products in low-growth markets. A) dogs B) cash cows C) black holes D) stars E) question marks
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A) dogs
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Which of the following statements is true in the context of the BCG growth-share matrix? A) Stars often need heavy investment to finance their rapid growth in a market. B) The positions of SBUs in the growth-share matrix rarely change over time. C) The income from one SBU cannot be used to support other business units. D) Dogs promise to be large sources of cash. E) Cash cows typically turn into stars.
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A) Stars often need heavy investment to finance their rapid growth in a market.
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When using a harvest strategy for a particular strategic business unit, a company ________. A) invests just enough in the strategic business unit to keep its market share at the current level B) invests more in the business unit to build its market share C) sells off the strategic business unit and invests its resources elsewhere D) tries to maximize its short-term cash flow regardless of long-term concerns E) gradually increases investment in the strategic business unit over time to maximize profits
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D) tries to maximize its short-term cash flow regardless of long-term concerns
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Which of the following companies is using a divesting strategy? A) Juggernaut Bikes acquires new businesses in order to increase its market share. B) To achieve a higher market share, LBD Inc. increases investments in advertising and promotion. C) When sales of its clothing division decline, Blackstone sells the division to a competitor. D) Getix Computers increases the price of its products in order to maximize short-term profits. E) Harlow's market share remains steady over two years, and the firm decides to maintain its share at the current level.
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C) When sales of its clothing division decline, Blackstone sells the division to a competitor.
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When a company chooses to divest a particular strategic business unit, it ________. A) increases the advertising budget for that strategic business unit B) invests more in the strategic business unit to build its market share C) sells off or phases out the strategic business unit D) invests just enough in the strategic business unit to keep its market share at the current level E) gradually increases investment in the strategic business unit over time to maximize profits
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C) sells off or phases out the strategic business unit
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A strategy for company growth that involves increasing sales to current market segments without changing the product is known as ________. A) market development B) market differentiation C) market penetration D) product development E) diversification
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C) market penetration
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EcoBean, a chain of cafes, has introduced a Special Shopper Card that allows customers to pay in advance for coffee and snacks. This effort by EcoBean management is most likely an example of ________. A) market development B) product development C) diversification D) market penetration E) product adaptation
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D) market penetration
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Acme Inc., a manufacturer of construction and mining equipment, is based in Australia. Acme modifies the production processes of its widgets and gadgets to sell its current products in Eastern Europe. This is most likely an example of a ________ strategy. A) market penetration B) market development C) product diversification D) business harvesting E) product development
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B) market development
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Ainsworth is a toy manufacturer based in Australia. Which of the following most likely indicates that Ainsworth is following a diversification strategy? A) Ainsworth increases its spending on advertising and promotion. B) Ainsworth acquires the rights to manufacture toys resembling a popular cartoon character. C) Ainsworth introduces its toys in the Indian and South-East Asian markets. D) Ainsworth enters the U.S. market with a line of children's clothing. E) Ainsworth develops a new line of educational toys targeting its current market.
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D) Ainsworth enters the U.S. market with a line of children's clothing.
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ToyBox is a toy manufacturer based in the United Kingdom. Which of the following indicates that the company is following a market penetration strategy? A) It introduces a line of children's clothing in the United Kingdom. B) It acquires toy rights for a popular cartoon character to boost its sales. C) It introduces its toys in the Indian and South-East Asian markets. D) It enters the U.S. market with a line of children's clothing. E) It develops a new line of educational software targeted at the current market.
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B) It acquires toy rights for a popular cartoon character to boost its sales.
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BlueBear is a shoe manufacturer based in the United States. Which of the following indicates that the company is following a market development strategy? A) BlueBear introduces a line of children's clothing to its current target market. B) BlueBear employs a British comedian for a U.S. advertising campaign. C) BlueBear introduces its shoes in the Indian and South-East Asian markets. D) BlueBear adds a line of leather purses to its offerings in the U.S. market. E) BlueBear develops a line of athletic shoes for its current target market.
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C) BlueBear introduces its shoes in the Indian and South-East Asian markets.
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RedInk, a company that manufactures office furniture, is based in Bodonia. It is looking to sell its current products in other countries as well. The company identifies the country of Soleria as a good option because the cultures and tastes of consumers in the two countries are similar. This is an example of a strategy for ________. A) market penetration B) market development C) downsizing D) diversification E) product development
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B) market development
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Indigo, a company that manufactures electric chimneys, is based in the country of Terrania. Indigo aims to increase its sales by increasing advertising efforts and undertaking frequent promotional events. Which of the following strategies is Indigo using in this scenario? A) market penetration B) market development C) downsizing D) diversification E) product development
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A) market penetration
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Both market penetration strategies and market development strategies primarily involve ________. A) selling a company's current products B) modifying the company's product line C) selling in new as well as existing markets D) developing a new product E) leaving the current market
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A) selling a company's current products
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Greyzone, a company that creates customized household furniture, is based in Terrania and is looking to enter other countries as well. The company identifies the country of Nyevka as a good option because the entry barriers for new companies are low in Nyevka. Which statement indicates that Greyzone follows a diversification strategy? A) Greyzone does not modify its products for the Nyevkan market. B) Greyzone leaves the Terranian market entirely in order to establish itself in the Nyevkan market with its current products. C) Noting that Nyevka lacks well-established suppliers of office equipment, Greyzone begins to manufacture and supply office equipment. D) Greyzone manufactures furniture in Terrania and ships it to Nyevka without setting up outlets in Nyevka. E) Noting that production costs are lower in Nyevka, Greyzone shifts its production operations entirely to Nyevka.
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C) Noting that Nyevka lacks well-established suppliers of office equipment, Greyzone begins to manufacture and supply office equipment.
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Both product development strategies and diversification strategies involve ________. A) selling a company's current products B) selling in a company's current market C) selling in new as well as existing markets D) developing a new product E) leaving the current market
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D) developing a new product
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A strategy for company growth through starting up or acquiring businesses outside the company's current products and markets is called ________. A) vertical integration B) market development C) diversification D) market penetration E) product development
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C) diversification
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With a market development strategy, a company aims to improve sales by ________. A) increasing advertising efforts to build brand image in its current market B) introducing a new variant of its product in a new market C) increasing sales efforts in its current market with its current products D) introducing its product in a new market without making any changes to the product E) selling a new product in its current market
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D) introducing its product in a new market without making any changes to the product
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________ refers to reducing the business portfolio by abandoning products that no longer fit the company's overall strategy. A) Market segmentation B) Vertical integration C) Product line extension D) Downsizing E) Diversification
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D) Downsizing
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Which of the following best describes the value chain of a company? A) the collection of businesses and products that make up the company B) profits earned by the cash cows and stars in the company's business portfolio C) touchpoints at which a company or brand interacts with its consumers D) the series of departments that design, produce, market, deliver, and support the company's products E) a network made up of the company, its suppliers, and its distributors working together to deliver customer value
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D) the series of departments that design, produce, market, deliver, and support the company's products
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Which of the following groups is included in a company's value chain? A) customers B) suppliers C) employees D) distributors E) competitors
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C) employees
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Which of the following groups is included in both a company's value chain and its value delivery network? A) customers B) suppliers C) employees D) distributors E) competitors
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C) employees
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A ________ is made up of a company, its suppliers, its distributors, and its customers who partner with each other to improve the performance of the entire system. A) value chain B) shareholder network C) business portfolio D) value delivery network E) growth-share matrix
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D) value delivery network
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Traxx is a newly emerging shoe manufacturing company. After extensive market research, Traxx divides its market into professional athletes, "hobbyists" or amateur players, and people who wear shoes as part of their casual attire. Each category has its own needs, traits, and marketing goals. In this scenario, Traxx has engaged in market ________. A) development B) positioning C) diversification D) segmentation E) penetration
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D) segmentation
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________ refers to the process of evaluating each market segment's attractiveness and selecting one or more segments to enter. A) Market divesting B) Market diversification C) Market targeting D) Market mixing E) Market positioning
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C) Market targeting
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Which of the following best describes product positioning? A) differentiating a market offering to create superior customer value B) arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers C) identifying consumer needs and creating a product to meet those needs D) evaluating each market segment's attractiveness and selecting one or more segments to enter E) dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors
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B) arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers
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A consumer group that responds in a similar way to a given set of marketing efforts is the company's ________. A) value chain B) market segment C) financial public D) business portfolio E) market position
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B) market segment
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Which of the following best describes market segmentation? A) differentiating a market offering to create superior customer value B) identifying consumer needs and creating a product to meet those needs C) arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers D) evaluating each market segment's attractiveness and selecting one or more segments to enter E) dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors
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E) dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors
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Which component of the marketing mix refers to the goods-and-services combination a company offers to its target market? A) promotion B) product C) price D) place E) position
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B) product
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To which of the following elements of the marketing mix do design, packaging, services, and features belong? A) product B) price C) promotion D) place E) people
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A) product
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Which of the following will most likely be included in the "place" component of a company's marketing mix? A) packaging B) sales promotion C) brand name D) inventory E) discounts
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D) inventory
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Which of the following will most likely be included in the "price" component of a company's marketing mix? A) packaging B) sales promotion C) brand name D) inventory E) discounts
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E) discounts
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When viewing the market from a buyer's point of view, "communication" corresponds to the ________ component of the marketing mix. A) people B) price C) product D) promotion E) place
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D) promotion
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When viewing the market from a buyer's point of view, "convenience" corresponds to the ________ component of the marketing mix. A) product B) price C) promotion D) place E) people
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D) place
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In a SWOT analysis, which of the following would most likely be considered a strength of a company? A) a favorable economic climate that encourages consumption B) the exit of a competitor from the market C) higher prices of the company's products resulting from inflation D) an increase in consumer interest in the company's products E) an improvement in the company's production technology
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E) an improvement in the company's production technology
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In a SWOT analysis, which of the following would be considered a weakness of a company? A) an unfavorable economic climate that discourages consumption B) the exit of a competitor from the market C) inflation that leads to higher prices of the company's products D) falling consumer interest in its products E) obsolete technologies used by the company
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E) obsolete technologies used by the company
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In a SWOT analysis, ________ refer to favorable factors or trends in the external environment that a company may be able to exploit to its advantage. A) strengths B) strategies C) threats D) opportunities E) controls
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D) opportunities
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In a SWOT analysis, ________ refer to unfavorable external factors or trends that may present challenges to performance. A) threats B) strategies C) weaknesses D) opportunities E) strengths
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A) threats
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The process that turns marketing plans into marketing actions to accomplish strategic marketing objectives is called marketing ________. A) analysis B) implementation C) control D) planning E) design
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B) implementation
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Which of the following best describes a marketing department with a functional organization? A) A company creates large teams, or even whole divisions, to serve domestic and international markets. B) Marketing managers are responsible for developing marketing strategies and plans for their specific markets or customers, and the company is organized around the needs of specific customer segments. C) A product manager develops and implements a complete strategy and marketing program for a specific product or brand. D) Sales and marketing people are assigned to specific countries, regions, and districts. E) Different marketing activities are headed by specialists such as sales managers, advertising managers, marketing research managers, and customer service managers.
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E) Different marketing activities are headed by specialists such as sales managers, advertising managers, marketing research managers, and customer service managers.
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Evaluating the results of marketing strategies and plans and taking corrective action to ensure that the objectives are attained is called ________. A) marketing control B) marketing implementation C) market planning D) marketing development E) market targeting
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A) marketing control
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________ are tools that give marketers the detailed measures they need to assess and adjust their strategies. A) ERP tools B) Dashboards C) BCG matrices D) Balanced scorecards E) Value delivery networks
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B) Dashboards
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________ involves looking at whether a company's basic business models are well matched to its opportunities. A) Operating control B) Task control C) Agency control D) Strategic control E) Market control
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D) Strategic control
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Which of the following is a primary characteristic of strategic control rather than operating control? A) determining the profitability of different products, territories, markets, and channels B) ensuring that the company achieves the sales, profits, and other goals set out in its annual plan C) checking ongoing performance against the annual plan and taking corrective action when necessary D) looking at whether the company's basic plans and action goals are well matched to its opportunities E) monitoring ongoing company projects to ensure that efficiency and effectiveness are maximized
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D) looking at whether the company's basic plans and action goals are well matched to its opportunities
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Which of the following marketing measures can best be translated into dollar returns? A) brand loyalty B) advertising impact C) packaging effectiveness D) market share E) brand-building impact
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D) market share
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Which of the following is true of marketing ROI? A) Marketing ROI uses only those marketing factors that can be measured in dollars. B) Marketing ROI ignores customer-centered measures of marketing impact, such as customer acquisition and retention. C) Marketing ROI is easier to calculate than financial ROI. D) Marketing ROI cannot be assessed in terms of standard marketing performance measures, such as brand awareness, sales, or market share. E) Marketing ROI measures the profits generated by investments in marketing activities.
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E) Marketing ROI measures the profits generated by investments in marketing activities.
