Chapter 2

Question 1

What is value?

Answer 1

A ratio of the bundle of benefits a customer receives from an offering compared to the cost incurred by the customer in acquiring that bundle of benefits

Question 2

What is a mission statement?

Answer 2

It articulates an organization’s purpose, or reason for existence

Question 3

What are the components of a mission statement?

Answer 3

1. Strategic vision - What the company would like to become in the future
2. Goals - what the firm hopes to accomplish
3. Objectives - provide the benchmarks by which organizational performance is assessed

Question 4

What are the functions of a mission statement?

Answer 4

1. clarifies the purpose and primary, measurable objectives of the organization
2. A mission statement is meant for employees and leaders of the organization.

Question 5

What is Strategic Planning?

Answer 5

The process of marshaling the various resource and functional areas of the firm toward a central purpose around the customer

Question 6

What is a SWOT analysis?

Answer 6

1. Internal strengths vs. weaknesses
   - competitive advantages
   - internal barriers to growth
2. External opportunities and growth
   - Macro and micro environmental factors
   market opportunity analysis
   - unfavorable trends or developments

Question 7

What are the components of a marketing plan?

Answer 7

Market Research
Establish goals and objectives
Develop Marketing strategies 
Create an implementation plan
Develop contingency plans

Question 8

the level of liking an individual harbors for an offering

Answer 8

customer satisfaction

Question 9

a customer’s commitment to a company and its products and brands for the long run

Answer 9

customer loyalty

Question 10

low propensity among a firm’s customer base to consider switching to other providers

Answer 10

customer retention

Question 11

activities within a firm’s value chain that act to increase the value of its products and services for its customers.

Answer 11

value creating activities

Question 12

The five primary activities in the value chain are…

Answer 12

• Inbound logistics
• Operations
• Outbound logistics
• Marketing and sales
• Service

Question 13

The four support activities in the value chain are..

Answer 13

• Firm infrastructure
• Human resource management
• Technology development
• Procurement

Question 14

Mission statement (PAL View)

Answer 14

• Needs served
• People served
• How they are served
• Technologies used