Chapter 2

Question 1

Strategic Planning

Answer 1

The process of thoughtfully defining a firm’s objectives and developing a method for achieving those objectives.

Question 2

Strategic Plan

Answer 2

An organization’s plans for key functional areas, such as marketing, human resources, finance, and risk management.

Question 3

Mission Statement

Answer 3

A concise affirmation of the firm’s long-term purpose.

Question 4

Situation Analysis

Answer 4

The systematic collection of data to identify the trends, conditions, and competitive forces that have the potential to influence the performance of the firm and the choice of appropriate strategies.

Question 5

Marketing Plan

Answer 5

An action-oriented document or playbook that guides the analysis, implementation, and control of the firm’s marketing strategy.

Question 6

Market Summary

Answer 6

A description of the current state of the market.

Question 7

Strategy

Answer 7

The set of actions taken to accomplish organizational objectives.

Question 8

Financial Projections

Answer 8

A bottom-line numerical estimate of the organization’s profitability.

Question 9

SWOT Analysis

Answer 9

An evaluation of a firm’s strengths, weaknesses, opportunities, and threats.

Question 10

Strengths (in SWOT)

Answer 10

Internal capabilities that help the company achieve its objectives.

Question 11

Weaknesses (in SWOT)

Answer 11

Internal limitations that may prevent or disrupt the firm’s ability to meet its stated objectives.

Question 12

Opportunities (in SWOT)

Answer 12

External factors that the firm may be able to capitalize on to meet or exceed its stated objectives.

Question 13

Threats (in SWOT)

Answer 13

Current and potential external factors that may challenge the firm’s short- and long-term performance.

Question 14

Market Segmentation

Answer 14

The process of dividing a larger market into smaller groups, or market segments, based on meaningfully shared characteristics.

Question 15

Market Segments

Answer 15

The groups of consumers who have shared characteristics and similar product needs.

Question 16

Target Market

Answer 16

The group of customers toward which an organization has decided to direct its marketing efforts.

Question 17

Positioning

Answer 17

The activities a firm undertakes to create a certain perception of its product in the eyes of the target market.

Question 18

Market Penetration

Answer 18

A marketing strategy that emphasizes selling more of existing goods and services to existing customers.

Question 19

Product Development

Answer 19

A marketing strategy that involves creating new goods and services for existing markets.

Question 20

Market Development

Answer 20

A marketing strategy that focuses on selling existing goods and services to new customers.

Question 21

Diversification

Answer 21

A marketing strategy that seeks to attract new customers by offering new products that are unrelated to the existing products produced by the organization.

Question 22

Competitive Advantage

Answer 22

The superior position a product enjoys over competing products if consumers believe it has more value than other products in its category.

Question 23

Exporting

Answer 23

Selling domestically produced products to foreign markets.

Question 24

Licensing

Answer 24

A legal process in which one firm pays to use or distribute another firm’s resources, including products, trademarks, patents, intellectual property, or other proprietary knowledge.

Question 25

Franchising

Answer 25

A contractual arrangement in which the franchisor provides a franchisee the right to use its name and marketing and operational support in exchange for a fee and, typically, a share of the profits.

Question 26

Joint Venture

Answer 26

An arrangement in which a domestic firm partners with a foreign company to create a new entity, thus allowing the domestic firm to enter the foreign company’s market.

Question 27

Direct Ownership

Answer 27

A method of entering an international market in which a domestic firm actively manages a foreign company or overseas facilities.

Question 28

Marketing Analytics

Answer 28

The practice of measuring, managing, and analyzing market performance.

Question 29

Return on Marketing Investment (ROMI)

Answer 29

A measure of the firm’s effectiveness in using the resources allocated to its marketing effort.

Question 30

Revenue Analysis

Answer 30

Marketing analytics tool that measures and evaluates revenue from specific products or regions.

Question 31

Market Share Analysis

Answer 31

Marketing analytics tool that measures the percentage of total market sales captured by a brand, product, or firm.

Question 32

Profitability Analysis

Answer 32

Marketing analytics tool that measures how much profit the firm generates, as well as how much profit certain aspects of the firm, including regions, channels, and customer segments, contribute.