CHAPTER 2

Question 1

refers to the policies and key decisions in the field of marketing adopted by management that have impact on company’s performance.

Answer 1

Marketing Strategy

Question 2

focuses primarily on products, markets, and the relationships with customers.

Answer 2

Marketing Strategy

Question 3

To design an effective marketing strategy, it is necessary to consider the strategic context of acompany including its mission statement, growth strategy, competitive strategy, strategic objectives, as well as organizational resources.

Answer 3

Firm Analysis

Question 4

statement that provides information about company’s goals, major policies, values, and competitive advantage. based on avision which describes adesired outcome of the company’s performance in the future.

Answer 4

Mission statement

Question 5

strategy aimed at winning larger market share. There are four ways in which acompany can develop its products and markets.

Answer 5

Growth strategy

Question 6

focused on existing markets and the same products, which means that the company can use awide range of promotional activities or develop distribution network to increase sales

Answer 6

Market penetration

Question 7

means that acompany enters new markets and offers the same products.

Answer 7

Market development strategy

Question 8

introduces new products and sells them into current markets usually through existing channels, taking advantage of gained experience, and often of brand awareness and brand loyalty

Answer 8

product development strategy

Question 9

ahigh risk strategy, since acompany enters new markets and sells new products, thus it cannot benefit from any experience

Answer 9

Diversification strategy

Question 10

focused on gaining competitive advantage in the market

Answer 10

Competitive strategy

Question 11

main effort is put on lowering the production and distribution cost, so that acompany can gain competitive advantage by charging lower prices.

Answer 11

overall cost leadership

Question 12

means that it delivers something valuable to customers and charges ahigher price for added value.

Answer 12

differentiation strategy

Question 13

means that acompany concentrates on asmall segment and it gains competitive advantage either through cost leadership or through differentiation.

Answer 13

focus strategy

Question 14

specify what acompany expects to achieve as aresult of the implementation of its strategy. long-term and can be classified into anumber of categories, including financial objectives which focus on improving acompany’s profitability, sales and market share objectives aiming at growing market share and increasing sales, human resources objectives which concentrate on the selection and development of the workforce, and internal processes objectives putting stress on enhancing operational efficiency

Answer 14

Strategic objectives

Question 15

used to accomplish company’s goals. They include market resources like products, brands, distribution channels; human resources which are the people within acompany; physical resources, such as buildings, vehicles, and equipment; and financial resources

Answer 15

Organizational resources

Question 16

analysis of the marketing environment is considered with the identif ication of the circumstances outside the company which have an impact on its performance.

Answer 16

Market analysis .

Question 17

distinguish those factors which are crucial, thus because of its complexity, it is reasonable to reduce the market analysis to two main categories: the macroenvironment and the competitive environment.

Answer 17

key objective of the marketing environment analysis

Question 18

comprises factors outside the competitive environment that may influence the company’s performance and achievement of its objectives. may lead to new opportunities and threats and for this reason they should be carefully examined.

Answer 18

Macroenvironment

Question 19

refers to the monitoring of population, its size, growth rate, age distribution, ethnic groups, as well as household patterns, and educational levels.

Answer 19

Demographic analysis

Question 20

consists of those factors with which the company comes into closest contact and which have direct impact on its success.

Answer 20

Competitive environment

Question 21

overall evaluation of acompany’s strengths, weaknesses, opportunities and threats, is to identify the key information from data gathered by the marketing audit.

Answer 21

SWOT analysis

Question 22

starts with the definition of the market and identification of customer needs.

Answer 22

segmentation process

Question 23

category includes descriptors of the customers who are buying services what enables to understand who the customers are.

Answer 23

Customer characteristics

Question 24

variables are very commonly used descriptors of customers. In consumer service markets demographic segmentation refers to such factors as sex, age, family size,

Answer 24

Demographics and socio-economics

Question 25

more developed form of segmentation and is concerned with people’s behavior and lifestyles. People differ in attitudes, personality types, interests, values, and these affect the services they purchase.

Answer 25

Psychographics

Question 26

refers to dividing customers according to where they work or live. Dividing market into geographical units, such as countries, states or cities helps to identify local and regional trends.

Answer 26

Geography

Question 27

This category includes descriptors of the customers’ behavior which enables to understand what and why customers buy

Answer 27

Customer responses

Question 28

related to the reasons why customers buy products. However, people vary regarding their preferences and the benefits they seek from the same market offering.

Answer 28

Benefits

Question 29

refers to the type and extent of usage patterns. Using this variable, customers are typically divided into heavy, medium, occasional and non-users of the service.

Answer 29

Usage

Question 30

considers how customers respond to various types of promotional activities, such as advertising, sales promotion, exhibitions, and others.

Answer 30

Promotional response

Question 31

means commitment to re-buy apreferred product or service in the future.

Answer 31

Loyalty

Question 32

itself and consideration of how customers respond to various service offerings can also serve as abasis for segmentation.

Answer 32

Service

Question 33

mass marketing there is no recognition of distinct segments in the market. Aservice company targets the whole market and develops one marketingmix strategy, focusing on what is common in the needs of customers.

Answer 33

Undifferentiated marketing

Question 34

service company identifies several segments and designs separate marketing programs for them. By using adifferentiated approach, it is possible to increase customer satisfaction; thereby aservice company can build astronger position within each market segment.

Answer 34

Differentiated marketing

Question 35

service company recognizes that there are number of segments in the market; however, it decides to target one specific segment or aniche.

Answer 35

Concentrated marketing

Question 36

service company focuses on local customer groups, such as trading areas, neighborhoods, stores, and also on individuals.

Answer 36

Micromarketing