ch 2 Flashcards by Moon Le

Compaq Computer’s decision to charge customers for phone technical support to reduce the high
cost of phone support and encourage customers to read documentation was a failure because
consumers like the human touch. Customer rebellion forced Compaq to rethink this policy. As a
result, Compaq decided to focus its resources on reaching the inexpensive home computer market
segment through enhanced customer service. What is Compaq engaging in?

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Strategic planning provides a long-term vision and thus guides long-term commitment of resources.

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What is the managerial process of creating and maintaining a fit between the organization’s
objectives and resources and evolving market opportunities?
a. functional planning
b. tactical management
c. environmental scanning
d. strategic planning

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What answers the question, “What business are we in”
a. the strategic plan
b. the situation analysis
c. the market strategy
d. the mission statement

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In its stockholders’ report, PepsiCo. states “… our business is to increase the value of our
shareholder’s investment. We do this through sales growth, cost controls and wise investment of
resources. We believe our commercial success depends upon offering quality and value to our
customers; providing products that are safe, wholesome, economically efficient and
environmentally sound; and providing a fair return to our investors while adhering to the highest
standards of integrity …” Which of the following describes this statement?
a. a mission statement
b. a market segmentation strategy
c. a statement of economic potential
d. a marketing mix strategy

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By defining its business as “making movies” instead of “entertainment,” what would a Hollywood
movie studio have experienced?
a. nonspecific strategic planning
b. market harvesting
c. market synergy
d. marketing myopia

D. Business statements that are stated too narrowly suffer from marketing myopia
Marketing myopia: defining a business in terms of goods and services rather than the benefits customers seek

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What occurs when a business is defined in terms of goods and services rather than by the benefits
customers seek from it?
a. a reactive focus
b. marketing myopia
c. a market barrier entry
d. unempowerment

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A popular technique for managing a large organization with different technologies and markets is
to divide it into which of the following?
a. different technologies
b. strategic target markets
c. strategic business units
d. tactical segments

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An SBU is a subgroup of a single business or collection of related businesses within a larger organization.

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What results when an organization creates a marketing mission that is too broad?
a. sustainable competitive advantage
b. directional marketing
c. marketing synergy
d. marketing myopia

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Baths From the Past is a small company that sells reproduction sinks, bathtubs, toilets, and faucets.
The company’s management is currently conducting a formal study of its current strengths and
weaknesses by looking at the company’s profit and sales histories and searching for opportunities
and threats by studying consumer trends. What is Baths From the Past conducting?
a. a SWOT analysis
b. a market differentiation scan
c. a marketing audit
d. an environmental scan

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What is the collection and interpretation of information about forces, events, and relationships that
may affect the organization?
a. environmental scanning
b. an internal audit
c. opportunity analysis
d. stakeholder analysis

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All the following are environmental forces a B.C. fruit grower with both orchards and a
packaging/shipping facility might consider when making marketing decisions. What factor is
LEAST likely to impact its marketing decisions?
a. changes in provincial laws concerning pollution control, waste disposal, and use of
pesticides
b. inflation and interest rates
c. the number of employees of a Florida state fruit grower
d. the increase in foreign shipments to Canada of a similar product

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What would Revlon use to identify the fact that its brand names (Revlon, Almay, and Flex) had
developed a poor image with both its customers and its retailers?
a. strategic analysis
b. environmental scanning
c. environmental control
d. marketing control

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Which of the following could the manufacturers of video games for Xbox and PlayStation2 do
through the use of environmental scanning?
a. learn why they needed to use a team management structure
b. periodically divest themselves of low-margin products
c. determine why the market for video games is slowing
d. benefit from experience curves

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Environmental scanning is the collection and interpretation of information gathered from the
external environment.

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Which of the following is a statement of what is to be accomplished through marketing activities?
a. a marketing objective
b. a mission statement
c. a business plan
d. a marketing criteria

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Which of the following is an appropriate use for carefully specified marketing objectives?
a. as a way to force executives to develop their marketing skills
b. as a method for developing standards to gauge performance
c. as a motivational tool for those charged with achieving the financial objectives
d. as a method to appeal to all market segments

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For marketing objectives to be realized, which of the following criteria must they meet?
a. be extremely challenging
b. be attainable with a short time frame
c. be set within a one-year time frame
d. be consistent with organization objectives

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Lori Dyer works for Star Creek, an Australian wine-producing company. She has been asked to
submit recommendations for marketing objectives for the upcoming strategic planning period.
Which of the following marketing objectives would be most appropriate for the company?
a. Star Creek wants to be recognized as an international winery.
b. Star Creek wants to be number one in the marketplace for all Australian wines within one
year.
c. Star Creek wants 30 percent of the market for Australian wines within 24 months of the
launching of its new advertising campaign. This effort will be supported by a $20 million
commitment from the company’s owner and president.
d. Star Creek seeks to sell more bottles of wine than its competitors during the next strategic
planning period.

C. Should be:
Realistic: Managers should develop objectives that have a chance of being met.
Measurable: Managers need to be able to quantitatively measure whether or not an objective has been met.
Time specific: By what time should the objective be met?
Compared to a benchmark: The objective is to increase sales by 15 percent; it is important to know the baseline against which the objective will be measured.

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Marketing objectives should be consistent with organization objectives, should be measurable, and
should specify a time frame. Objectives also should be carefully specified.

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There are many different kinds of cheese. According to its ads, only Jarlsberg Lite has 50 percent
less fat, 60 percent less cholesterol, and 100 percent of the taste of other kinds of cheese. What
does this advertising statement describe?
a. Jarlsberg Lite’s mission statement
b. Jarlsberg Lite’s tactical strength
c. Jarlsberg Lite’s competitive advantage
d. Jarlsberg Lite’s strategic edge

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What is a strategy of increasing market share for present products in existing markets?
a. diversification
b. market development
c. product development
d. market penetration

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Knorr, manufacturer of soup, dip, and gravy mixes, printed on-package recipes, gave out coupons
to existing customers, and created a recipe booklet that could be ordered with three UPC codes
from three different Knorr products. All of these activities would be representative of what type of
strategy?
a. product development
b. diversification
c. market development
d. market penetration

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American Express offers customers a Cobaltcard, a pre-loaded credit card, to 13- to 22-year-olds
looking to make on-line purchases. While American Express had previously supplied credit cards
to adults, this younger group was a market that was not being served. The Cobaltcard program is
an example of which type of strategy?
a. market penetration
b. market development
c. product development
d. product penetration

Market development finds new uses for a product to stimulate sales among new customers.

What strategy attracts new customers to existing products?
a. market penetration
b. product development
c. market development
d. diversification

The company that manufactures Molson beer simultaneously launched Arctic brand in Ontario and
Tornade brand in Quebec with the intention of gaining a share of the rapidly expanding alcoholic
lemonade segment of the beverage industry. The separate launch strategies for the products are due
to different market conditions in the two Canadian provinces. What type of strategy did Molson
use to reach existing markets with its new product?
a. product development
b. market development
c. market penetration
d. product penetration

Research has shown that people below the age of 15 prefer using other colours than the familiar
red ketchup. To capture this market, Heinz markets blue-, purple- and green-coloured ketchups.
The ketchups have an exotic look, which Heinz hopes will appeal to this market. It still tastes like
the red variety. Since this is not really a new product, just an attempt to reach a new target market,
what type of strategy does it exemplify?
a. product development
b. product expansion
c. market development
d. market penetration

To market its ice cream to Chinese consumers, Unilever entered into a joint venture with Sumstar,
a state-owned Chinese investment company. Unilever provided the product know-how, and
Sumstar helped Unilever gain all the approvals needed from a complex Chinese bureaucracy.
What type of strategy did Unilever use to reach the Chinese market?
a. product development
b. diversification
c. market penetration
d. market development

Which strategy increases sales by introducing new products into new markets?
a. diversification
b. market penetration
c. product penetration
d. market development

Shortly after the start of the new century, Wrigley, the largest chewing gum manufacturer in the
world, bid $12 billion for Hershey chocolate. Wrigley was unable to acquire Hershey, but its
acquisition attempt would have expanded Wrigley’s product lines to include many forms of baking
and eating chocolate. Since Wrigley did not produce any chocolate at the time of the takeover bid,
this acquisition would be an example of which of the following?
a. segment development
b. diversification
c. target marketing
d. divestment

Brickheads Ltd., located in Newmarket, Ontario, is the leading building materials manufacturer
specializing in the manufacture of bricks for housing in the greater Toronto market. Tracey Dyer,
Brickheads’ Vice President Marketing, remarked to a board meeting that “Brickheads wished that
it had an operation in lower mainland BC to capitalize on the housing boom currently being
experienced there. But the overall profit picture here for us is excellent despite a slow and steady
market.” Brickheads would be classified by the BCG model as which of the following?
a. a star
b. a cash cow
c. a problem child
d. a dog

Vendarama, a specialty manufacturer of DVD and CD vending machines located in Hamilton,
Ontario, has experienced meteoric growth over the past couple of years. Demand for its innovative
and unique vending machines has been strong in major urban areas of the country and
internationally. Vendarama has approached TJ Associates for a business loan to assist with
expansion. According to the BCG model, how would TJ view Vendarama?
a. as a dog
b. as a star
c. as a problem child
d. as a cash cow

Wacker Ltd. a large profitable manufacturer of mouse pads located in Moose Jaw, Saskatchewan,
has been the sole supplier of mouse pads for 10 large corporations in the United States. However,
recent developments have included several lost contracts for business in the United States and the
entrance of more large Asian specialty manufacturers specializing in producing computer
peripherals and supplies. Looking at Wacker’s strategic position from a potential investor’s
position, and according to the BCG, what is Wacker?
a. a problem child
b. a dog
c. a star
d. a cash cow

Bee-Clean Industries is a start-up company specializing in office building janitorial services in
Victoria. Bee-Clean has experienced rapid growth of clients and has been rapidly hiring new
employees to service this new business. As most employees are new to their tasks, their
productivity has been below industry standard. As a result, the company’s profit picture has not
been pretty. According to the BCG, what would Bee-Clean be classified as?
a. a cash cow
b. a question mark
c. a star
d. a dog

A target market is one or more market segments on which a company focuses.

CentralPulse is Europe’s largest manufacturer of hip and knee replacement joints. Which of the
company’s strategies would identify the surgeons and hospitals as two market segments on which
CentralPulse will focus its marketing efforts?
a. strategic business unit
b. marketing sample
c. sales unit
d. target market

What is the unique blend of product, distribution, promotion, and pricing strategies designed to
produce mutually satisfying exchanges with a target market?
a. marketing mix
b. product line
c. product mix
d. market portfolio

Which of the following is one of the elements of the marketing plan?
a. a business values statement
b. a five-year marketing strategy
c. a situation analysis
d. an advertising cost analysis

Managers at Bolsum Aerospace Company recently attended several special meetings where issues
such as the creation of marketing objectives, a situation analysis, and
modifying components of the marketing mix were discussed. What is Bolsum Aerospace engaging
in?
a. a financial analysis
b. the development of a marketing plan
c. re-engineering
d. strategic contingency planning

Which of the following is a formal study conducted by an organization to assess its current status
and capabilities and its future expectations?
a. a strategic alternative selection
b. a situation analysis
c. a marketing audit
d. a competitive advantage audit

Hustler Turf Equipment is a Saskatchewan-based company that makes landscaping equipment.
The company is looking at customer trends, its competitors, and the economy to see if there are
any threats or opportunities on the horizon. It has also examined its production policies and sales
histories to determine its strengths and weaknesses. What is Hustler Turf Equipment conducting?
a. a competitive advantage search
b. a situation analysis
c. a trend analysis
d. a market audit

A situation analysis contains the SWOT components.

. In terms of its situation analysis, the trend toward luxury lifestyle
consumerism would be an example of which of the following?
a. an advantage because it gives Armani growth opportunities
b. a strength because it is part of Armani’s external environment
c. an opportunity because it is part of Armani’s external environment
d. a weakness because Armani cannot control the growth of the trend

A SWOT analysis looks at opportunities and threats (external to the organization) and strengths
and weaknesses (internal to the organization).

Solitude Nurseries is a retailer that helps homeowners create backyard sanctuaries for pondering
the wonders of nature. Its owner believes he maintains the loyalty of the store’s customers by
stocking only the highest quality merchandise and offering a customer satisfaction guarantee. With
which element of the marketing mix is the manager most concerned?
a. price
b. personalization
c. product
d. promotion

Ocean Spray’s development of Craisins (sweetened dried cranberries) to compete against raisins
most directly affected which element of the company’s marketing mix?
a. production
b. product
c. distribution
d. place

Which of the marketing mix strategies is the most flexible?
a. publicity
b. product
c. pricing
d. promotion

Channels of distribution is just another way of describing which of the following elements of the
marketing mix?
a. place
b. price
c. promotion
d. product

For an automotive manufacturer such as BMW, deciding who will be an authorized retailer in
Canada for the company’s vehicles is part of which of the following marketing mix elements?
a. place
b. product
c. promotion
d. price

You are the owner-operator of a small business and your best friend suggests that you offer your
company’s products for sale on the Internet. What type of decision is this?
a. profit
b. consumer
c. place
d. business

The product is the starting point for any marketing mix. Without it, pricing, distribution, and promotion are irrelevant. The production capacity can be changed to fit the proposed product

DaimlerChrysler discovered that many of its 2002 Prowlers automobiles had faulty fuel systems
that could cause the vehicles to stall in traffic. Which one of the marketing mix strategies should
the auto manufacturer use to alert buyers to this problem?
a. pricing
b. production
c. product
d. promotion

Delta’s development of a new slogan represents a change in which element
of its marketing mix?

What is the process that turns marketing plans into action assignments and ensures that these
assignments are executed in a way that accomplishes the plans’ objectives?
a. strategic planning
b. strategic analysis
c. strategic design
d. implementation

Which of the following is a common reason that companies fail to achieve a marketing objective?
a. appropriate marketing strategy
b. lack of capital
c. realistic marketing objectives
d. good implementation

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ch 2 Flashcards

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