MKT 5080 Final Exam study

All defensive strategies are intended to maximize or protect short-run profits.

True

The share development index (SDI) is the ratio of share potential to actual sales.

False

Which type of strategic market plans are important sources of growth and improving share position?

Offensive Strategic Market Plans

Which of the following would be considered a competitiveness metric for a company?u

Relative Service Quality

Businesses with partial knowledge of customers or competitors are less likely to employ reactive strategies.

False

The fundamental marketing profitability metric for planning purposes is the ________ equation.

Net Marketing Contribution

Calculate the share potential index if a business is achieving a share development index of 45 at a market share index of 25%.

55.6%

Customers in which of the following subsets of consumers take product usage beyond its intended capability, and act as co-inventors?

Prosumers

Quality aesthetics as a source of differentiation are of value only when all other aspects of quality are met with respect to customer quality expectations.

True

Customer satisfaction is considered a forward-looking marketing metric.

True

The primary purpose of a strategic market plan is to create a set of performance objectives and to guide the development of marketing mix strategies.

True

A business with a share development index equal to 45 means that the business ________.

Achieved only 45 percent of its shared potential index

As a business adds products to its product line that have the same purchased materials and similar manufacturing processes, it is able to lower the average unit cost of all products, producing a ________ effect.

scope

In ________, the price of a product is set to provide customers with an attractive savings after considering the life-cycle costs of acquiring, owning, using, maintaining, and disposing of a product.

Value-in-Use Pricing

Which of the following is the first level of the customer response hierarchy?

Exposed to the ad (aka awareness)

A plus-one market-based pricing strategy means a business sets its price 1% higher than the competitors' price.

False

Businesses that lack both customer knowledge and competitor knowledge, and make competitive moves from an internal perspective with no real market knowledge are said to be working with a(n) ________ strategy.

Inside-the-box

Which of the following is a component of customer loyalty index?

Desire to re-purchase

Studying the experience of lead users provides insights for improving a product by adding new features or modifying it in other ways.

True

A direct marketing channel produces higher margins than an indirect channel, but the business must bear the cost of channel management and all marketing and sales expenses.

True

A valuable planning matrix that will reveal opportunities of growth can be created by combining the ________.

market development index with the share development index

Functional names differ from evocative names in that functional names

are derived from the basic benefits provided by the product

Which of the following statements is true?

A low-share business with above-average customer value is more profitable than an high-share business with below-average customer value

In the context of SWOT analysis, which of the following would be a strength for a company already existing in the market?

A high level of branding that leads to market recognition

Which of the following is true regarding customer buying power?

When the customer's buying power is high, the market attractiveness increases

With few, if any, competitors in an untapped new market, a business has the opportunity to pioneer a portion of the market largely ignored by competitors. This is known as ________.

first-mover advantage

What is the total sales a business should generate if it must obtain a net profit of $125 million at a sales return of 20%?

$250 million

Which of the following would be considered a strategic market plan component of marketing strategy?

Customer Needs

Which of the following is the best measure of how well the ad reached a target market and how often it was seen

Gross Rating Point

Which of the following marketing metrics is an internal forward-looking metric for a firm?

Inventory Turnover

The customer loyalty index (CLI) is a function of total sales, customer lifetime value, and shareholder dividend.

False

What is the customer retention for a company given an average customer life of two years?

50%

Major sources of competitive advantage are cost advantage, differentiation advantage, and marketing advantage.

True

In which stage of the product life cycle are maximum marketing profits attained?

Late Growth

Developing a broad vision of a market is the first step in understanding market demand.

True

The rapid growth of database marketing technologies has lured many businesses down a side road where technology is seen as the solution instead of a tool for building a solution. Without a solid commitment to serving individual customer needs, these businesses can fall into a ________.

Technology Trap

________ pricing involves raising prices incrementally to the point where the best combination of volume and margin is achieved during the mature stage of the product life-cycle.

Reduce-focus

In the context of brand name development, which of the following is true about an invented name?

It is built from root words, not morphemes

Changes in marketing metrics such as product awareness, customer satisfaction, and customer perceptions of relative product quality and customer value generally precede actual changes in customer purchasing behavior.

True

One key benefit provided by a broad market definition is that it concentrates a business' focus on articulated customer needs.

False

Customers who make small purchases are usually profitably served with a direct channel system.

False

Using an ownership team keeps the implementation process on track even when some members of the team are away for extended periods because of business trips, training programs, illness, or vacations.

True

Harvest pricing is usually used in the ________ stage of the product life cycle.

Decline

GTB Electronics enters a new market and needs to set its pricing strategy for the market. Which of the following is a favorable condition for implementing skim pricing?

Entry into that particular market is difficult

Variance analysis allows the company to isolate the components of marketing performance to understand better how each component contributes to the actual net marketing contribution.

True

The market development index is equal to the ________

The ration of current market demand to market potential

A product that will eliminate or significantly reduce the usage costs that customers presently incur offers a substantial economic value.

True

Which of the following statements is true of a pull communication strategy?

it aims to create interest among customers and motivate them to acquire more information

Without backward-looking metrics, the business has only an internal measure of performance.

True

The process of taking a closer look at the customer ordering process from the customer's viewpoint, with the objective of uncovering any potential problems or sources of frustration in the purchasing process is called ________.

“staple yourself to an order”

Marketing metrics are too important to be simply an add-on to the marketing or product manager's responsibilities

True

Which of the following is an example of a company's external metrics?

Retaining Customers

What is the marketing return on sales (marketing ROS) for a product line that generates $20 million in sales revenues with a net marketing contribution of $5 million?

25%

In the context of market segmentation, interests, opinions, and leisure pursuits of consumers are related to ________ segmentation.

psychographic

Which of the following is used to determine a segment's marketing profitability?

Net Marketing Contribution

The main difference between crowdsourcing and mass collaboration is the level of multidirectional interaction.

True

In which step of the process of building a marketing plan is a thorough examination of market forces, competitive position, and current performance undertaken?

Situational Analysis

Dividing the NMC by the investment in marketing and sales produces the marketing return on investment.

True

Which of the following is true of cash-and-carry wholesalers?

They do not offer credit facilities to customers

The goal of a monetize strategy is to ________.

extract the maximum short-run cash flow from the market

Which of the following is a defensive strategic market plan?

A Harvest Strategy

Service quality affects customer retention and profit in the numerator and ________ in the denominator of the return on assets equation.

Accounts Receivable

Which of the following is the strategic objective of the defensive core strategies: monetize, harvest, and divest?

Maximize Cash Flow

The core offensive strategies are "invest to grow","improve position", and "new market entry".

True

A weak product position with a strong marketing effort will fail to deliver the desired level of market share.

True

A firm finds that 50% of the target market is exposed to a marketing communication, 40% of that group is aware of the offering, 80% understand the message. WIthin that group, 60% intends to purchase, and 70% of that group actually does purchase. The customer response index is 6.7%. What is the difference in the value of the customer response index if 80% of the group intends to purchase and 60% of that group actually does purchase?

1%

Invented names are company or brand names that create a direct connection to something real and that can be associated with a direct experience.

False

A market-based business looks at customers as ________.

Lifetime Partners

Which type of strategy is best utilized for exiting a market by selling or closing down the business or eliminating the product?

a high level of branding that leads to market recognition

The brand equity of LifeSecure Inc., an American health insurance firm, was diminished when its top executives were subject to money laundering allegations. Which type of brand liability does this best represent?

questionable practices

Which of the following would be considered an indirect customer touch point?

news articles

The "day-in-the-life-of-a-customer" approach may be described as "stapling yourself to an order."

True