"Principles of marketing" chapter 2 test bank multiple choice questions

________ is the process of developing and maintaining a crucial fit between the organization's goals and capabilities and its changing marketing opportunities.

A) Benchmarking

B) SWOT analysis

C) Market segmentation

D) Strategic planning

E) Diversification

D) Strategic planning

Which of the following is true with regard to strategic planning?

A) At the corporate level, the company starts the strategic planning process by determining what portfolio of businesses and products is best for the company.

B) A strategic plan deals with a company's short-term goals.

C) Finding the game plan for long-run survival and growth is the focus of strategic planning.

D) The strategic plan is a statement of an organization's purpose.

E) Strategic planning involves identifying segment

C) Finding the game plan for long-run survival and growth is the focus of strategic planning.

Which of the following is the first step in strategic planning?

A) setting short-term goals

B) developing the business portfolio

C) defining the organizational mission

D) formulating the key marketing strategies

E) identifying the organization's weaknesses and the threats it faces

C) defining the organizational mission

Which of the following is NOT a step in the strategic planning process?

A) defining the company mission

B) setting company objectives and goals

C) designing the business portfolio

D) planning marketing and other functional strategies

E) evaluating members of the company's value chain

E) evaluating members of the company's value chain

A ________ documents an organization's purpose—what it wants to accomplish in the larger environment.

A) vision statement

B) mission statement

C) business portfolio

D) value proposition

E) product strategy

B) mission statement

Mission statements should ________ and be defined in terms of ________.

A) be technology oriented; meeting the self-actualization needs of customers

B) be product oriented; satisfying the esteem needs of customers

C) embody the company's short-term plans; current opportunities

D) be market oriented; satisfying basic customer needs

E) address sales and profits; the net return on investments

D) be market oriented; satisfying basic customer needs

A mission statement serves as a ________.

A) statement of the organization's net profits

B) plan for short-term sustainability

C) statement of the organization's purpose

D) statement of the organization's current liabilities

E) repatriation plan for the organization's highly-skilled employees

C) statement of the organization's purpose

Which of the following is NOT a market-oriented business definition?

A) "We empower customers to realize their dreams."

B) "We make high-quality consumer food products."

C) "We sell success and status."

D) "We create the Hilton experience."

E) "We bring innovation to every home."

B) "We make high-quality consumer food products."

Which of the following is NOT an example of product-oriented mission statements?

A) "We are an online library."

B) "We run theme parks."

C) "We sell athletic shoes."

D) "We sell memorable experiences."

E) "We rent hotel rooms."

D) "We sell memorable experiences."

Which of the following is a market-oriented mission statement?

A) "We empower customers to achieve their dreams."

B) "We sell jumbo burgers."

C) "We are an online library."

D) "We are a low-cost airline."

E) "We make porcelain figurines.

A) "We empower customers to achieve their dreams."

Mission statements should be ________.

A) meaningful and specific yet motivating

B) technology oriented

C) written solely for public relations purposes

D) focused on increasing sales or profits

E) strictly product oriented

A) meaningful and specific yet motivating

Companies that define their missions in terms of product or technology are considered myopic primarily because ________.

A) products and technologies result in low returns on investment

B) consumer preferences with regard to products and technologies are difficult to predict

C) consumer preferences for different product categories vary from time to time

D) products and technologies eventually become outdated

E) most consumers are not comfortable using sophisticated technologies during the buying

D) products and technologies eventually become outdated

The collection of businesses and products that make up a company is called its ________.

A) strategic business unit

B) supply chain

C) strategic plan

D) business portfolio

E) internal value chain

D) business portfolio

Which of the following is the first step of business portfolio planning?

A) shaping the future portfolio by developing strategies for growth and downsizing

B) determining which businesses should receive more, less, or no investment

C) identifying internal strengths and weaknesses

D) identifying future opportunities

E) determining short-term goals

B) determining which businesses should receive more, less, or no investment

The major activity in strategic planning is ________, whereby management evaluates the products and businesses that make up the company.

A) SWOT analysis

B) benchmarking

C) business portfolio analysis

D) breakeven analysis

E) prospecting

C) business portfolio analysis

Which of the following best describes a strategic business unit (SBU)?

A) the internal value chain of a company

B) the supply chain of a company

C) the key businesses that make up a company

D) the key channel intermediaries of a service company

E) the key competitors of a company

C) the key businesses that make up a company

During portfolio analysis, a company ________ after identifying the key businesses that make up the company.

A) formulates a short-term marketing plan

B) assesses the attractiveness of its various SBUs

C) assesses its strengths and weaknesses

D) performs a SWOT analysis

E) assesses the effectiveness of its various channel intermediaries

B) assesses the attractiveness of its various SBUs

Most standard portfolio analysis methods evaluate SBUs on the ________.

A) potential for niche or global marketing

B) degree of product differentiation

C) strength of the market or industry position

D) accessibility to rural markets

E) number of successful business acquisitions

C) strength of the market or industry position

According to the Boston Consulting Group approach, ________ provides a measure of market attractiveness.

A) product attribute

B) product design

C) market penetration

D) market growth rate

E) market segmentation

D) market growth rate

According to the Boston Consulting Group approach, ________ serves as a measure of company strength in the market.

A) relative market share

B) product development

C) market diversification

D) product attribute

E) market segmentation

A) relative market share

________ are a type of SBU that often require heavy investments to finance their rapid growth.

A) Cash cows

B) Question marks

C) Stars

D) Dogs

E) Bears

C) Stars

________ are low-growth, high-share businesses/products that need less investment to hold their market share.

A) Stars

B) Cash cows

C) Question marks

D) Dogs

E) Bears

B) Cash cows

Which of the following is true with regard to cash cows?

A) They are high-growth, high-share businesses or products.

B) They can be used to help finance the company's question marks and stars.

C) They require significant cash to maintain market share.

D) They are low-share businesses and products.

E) They do not promise to be large sources of cash.

B) They can be used to help finance the company's question marks and stars

________ are low-share business units in high-growth markets that require a lot of cash to hold their share.

A) Stars

B) Dogs

C) Question mark

D) Cash cows

E) Bears

C) Question mark

By harvesting its SBU, a company would most likely be ________.

A) milking its short-term cash flow regardless of the long-term effect

B) selling it or phasing it out and using the resources elsewhere

C) investing just enough to hold the SBU's current market share

D) investing more in the business unit to build its share

E) diversifying its product line

A) milking its short-term cash flow regardless of the long-term effect

Orion Inc. operates in many industries, including pharmaceuticals and food products. The company's goal is to create "abundant and affordable food for all and a healthy environment." This represents Orion's ________.

A) marketing plan

B) product mix

C) business portfolio

D) marketing mix

E) mission statement

E) mission statement

Which of the following companies has a product-oriented business definition?

A) A luxury hotel, whose business definition is: "We sell out-of-the-world experiences to our guests."

B) A real estate company, whose business definition is: "We sell dreams."

C) A cosmetic company, whose business definition is: "We offer hopes and self-expression."

D) A shoe manufacturer, whose business definition is: "We manufacture affordable and long-lasting shoes for all."

E) A high-technology company, whose busin

D) A shoe manufacturer, whose business definition is: "We manufacture affordable and long-lasting shoes for all."

A company can ________ the SBU by selling it or phasing it out and using the resources elsewhere.

A) divest

B) promote

C) expand

D) harvest

E) hold

A) divest

Which of the following is true of the BCG matrix approach?

A) It is inexpensive to implement.

B) It does not have any limitations.

C) It considers market growth rate to be a measure of market attractiveness.

D) It describes consumer motivations and needs.

E) It does not consider relative market share to be a measure of company strength in the market.

C) It considers market growth rate to be a measure of market attractiveness.

The key businesses of Kimberley and Price consist of a division that produces and sells breakfast cereals and another that manufactures gardening tools. Each of these businesses is called a ________.

A) market segment

B) strategic business unit (SBU)

C) question mark

D) prospect

E) product portfolio

B) strategic business unit (SBU)

Modern strategic planning ________.

A) exclusively consists of a company's short-term goals

B) is decentralized

C) does not involve cross-functional teams

D) does not take the overall mission of the company into consideration

E) is highly centralized

B) is decentralized

The BCG matrix approach is problematic in that it ________.

A) focuses on planning for the future at the cost of ignoring the present

B) focuses solely on current businesses and provides little scope for future planning

C) tends to undermine the importance of market growth rate as a measure of market attractiveness

D) tends to undermine the importance of relative market share as a measure of company strength in the market

E) fails to classify SBUs

B) focuses solely on current businesses and provides little scope for future planning

Which of the following is a portfolio-planning tool for identifying company growth opportunities through market penetration, market development, product development, or diversification?

A) BCG matrix

B) analysis of variance (ANOVA)

C) product/market expansion grid

D) Harris matrix

E) SWOT analysis

C) product/market expansion grid

Phoenix, a popular coffee shop chain in North America, recently opened 400 stores to cater to its rapidly increasing number of patrons. This exemplifies ________.

A) product differentiation

B) product development

C) diversification

D) market penetration

E) market segmentation

D) market penetration

Lark Inc., an American electronics company, is currently reviewing new geographical markets to sell its highly popular LED televisions. By 2020, it plans to open new stores across all the major South Asian cities. Lark is most likely following a ________ strategy.

A) local marketing

B) market development

C) diversification

D) product adaptation

E) product development

B) market development

Which of the following companies has a market-oriented business definition?

A) An electronics company, whose business definition is: "We produce microchips."

B) A hotel, whose business definition is: "We rent rooms."

C) An apparel company, whose business definition is: "We make and sell women's clothing."

D) A cosmetic company, whose business definition is: "We sell hope and self-esteem."

E) A pizzeria, whose business definition is: "We sell the world's most delicious thin-crust pizzas."

D) A cosmetic company, whose business definition is: "We sell hope and self-esteem."

The pharmaceuticals division of Omni Healthcare holds low market share in a high-growth market. According to the BCG matrix, the pharmaceuticals division of Omni can be classified as a ________.

A) star

B) bear

C) question mark

D) cash cow

E) dog

C) question mark

Which of the following is true with regard to the product/expansion grid?

A) It classifies SBUs into four distinct categories.

B) It is a useful device for identifying growth opportunities.

C) It helps companies analyze their internal strengths and weaknesses.

D) It functions on the premise that firms should downsize to regain market share.

E) It is a useful device for segregating customers into distinct categories.

B) It is a useful device for identifying growth opportunities.

Making more sales to current customers without changing a firm's products is known as ________.

A) market segmentation

B) market penetration

C) product diversification

D) product development

E) prospecting

B) market penetration

The managers of Arrow, an American retail chain, are currently reviewing new demographic markets to sell the firm's current products. This is an example of ________.

A) market penetration

B) product development

C) mass marketing

D) market development

E) product adaptation

D) market development

The managers of Alfredo's Pizza, a popular pizzeria in New York City, have been increasingly encouraging senior citizens to visit the pizzeria's numerous outlets spread across the city. Anticipating a rise in the population of senior citizens in the area, the management of Alfredo's Pizza is seeking to tap into this promising segment that consists of retired, affluent consumers. In this instance, the managers of Alfredo's Pizza are anticipating company growth through ________.

A) market developm

A) market development

FencePro, a local company, has developed an entirely new mounting system for chain link fences. After acquiring a distributor, FencePro now has the ability to market its products nationwide. FencePro is most likely following a ________ strategy.

A) market penetration

B) market development

C) downsizing

D) product adaptation

E) product development

B) market development

Amor, a successful brand of women's clothing, recently introduced a line of fitness equipment. This is an example of ________.

A) mass customization

B) niche marketing

C) diversification

D) prospecting

E) product adaptation

C) diversification

Sunny Brews is a coffeehouse chain based in Boston. It recently introduced Eva, a mild roast, which became immensely popular. This exemplifies ________.

A) benchmarking

B) diversification

C) mass customization

D) product development

E) downsizing

D) product development

A women's apparel manufacturer in California recently acquired a Houston-based company that manufactures office furniture. This is an example of ________.

A) product development

B) market development

C) market penetration

D) diversification

E) product differentiation

D) diversification

Elmo Corp., a manufacturer of personal computers and printers, recently established an office furniture exporting business. This is an example of ________.

A) niche marketing

B) local marketing

C) diversification

D) product adaptation

E) downsizing

C) diversification

Each department in a company that carries out value-creating activities can be thought of as a link in the company's ________.

A) channel of intermediaries

B) external value stream

C) demand chain

D) internal value chain

E) supplier chain

D) internal value chain

RedFin manufactures diving equipment that is highly regarded by customers worldwide. Each department in RedFin contributes to its success and can be thought of as a(n) ________.

A) link in the company's internal value chain

B) separate organization

C) independent subsidiary of the company

D) separate market segment

E) SBU

A) link in the company's internal value chain

The network made up of the company, its suppliers, its distributors, and, ultimately, its customers who partner with each other to improve the performance of the entire system is known as the ________.

A) business portfolio

B) supply chain

C) marketing mix

D) value delivery network

E) internal value chain

D) value delivery network

The marketing logic by which a company hopes to create customer value and achieve profitable customer relationships is referred to as the ________.

A) price

B) marketing implementation

C) value chain

D) marketing strategy

E) downsizing

D) marketing strategy

Market segmentation can be best described as the process of ________.

A) assigning specific human attributes to a given brand

B) dividing a market into distinct groups of buyers who have different needs, characteristics, or

behaviors, and who might require separate products or marketing programs

C) evaluating each market segment's attractiveness and selecting one or more segments to enter

D) turning marketing plans into marketing actions to accomplish strategic marketing objectives

E) maintainin

B) dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing programs

Which of the following is an element of the marketing mix?

A) place

B) education

C) needs

D) wants

E) esteem

A) place

Teenagers are expected to respond in a similar way to a set of marketing efforts. In other words, this group represents a ________.

A) channel intermediary

B) line extension

C) market segment

D) product attribute

E) brand personality

C) market segment

In the context of a company's marketing mix, ________ includes company activities that make the product available to target consumers.

A) position

B) place

C) price

D) promotion

E) branding

B) place

Arrow is "a different kind of company, manufacturing a different kind of a car"; the RoadPro is "like nothing else." Statements such as these reflect a firm's ________.

A) portfolio

B) marketing segment

C) positioning

D) marketing mix

E) mission statement

C) positioning

Paul Robinson has identified a group of potential customers who seem to respond in a similar way to a series of magazine and radio advertisements for his company's product. Paul has identified a(n) ________.

A) target market

B) market segment

C) niche market

D) product attribute

E) product design

B) market segment

Each company must divide up the total market, choose the best segments, and design strategies for profitably serving chosen segments. This process involves market segmentation, ________, differentiation, and positioning.

A) market targeting

B) marketing implementation

C) supply-chain analysis

D) price discrimination

E) market diversification

A) market targeting

Which of the following is true with regard to a market segment?

A) A market segment consists of consumers with dissimilar needs and preferences.

B) A market segment consists of consumers who respond in a similar way to a given set of marketing efforts.

C) Very few markets have segments.

D) Dividing the market into segments decreases the efficiency of the selling process.

E) Dividing the market into segments reduces composite demand.

B) A market segment consists of consumers who respond in a similar way to a given set of marketing efforts.

Alpha Motors offers "Green automobiles for a greener world." This refers to the ________ of Alpha automobiles.

A) brand resonance

B) position

C) brand equity

D) hedonic value

E) added value

B) position

Which of the following refers to the process of dividing a market into distinct groups of buyers with different needs, characteristics, or behaviors?

A) market diversification

B) market segmentation

C) downsizing

D) customer relationship management

E) prospecting

B) market segmentation

Rob has been asked by his manager to identify a group of potential customers who would respond in a similar way to a given set of marketing efforts. In this instance, Rob has been asked to identify a ________.

A) new product

B) market segment

C) marketing intermediary

D) brand

E) product line

B) market segment

The process of evaluating each market segment's attractiveness and selecting one or more segments to enter is known as ________.

A) market segmentation

B) diversification

C) market targeting

D) prospecting

E) downsizing

C) market targeting

Crocus, a gift store, specializes in serving customer segments that major competitors overlook and ignore. Which of the following best describes Crocus?

A) market follower

B) market challenger

C) early adopter

D) market nicher

E) laggard

D) market nicher

Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers is known as ________.

A) positioning

B) segmenting

C) diversifying

D) prospecting

E) satisficing

A) positioning

Effective positioning begins with ________.

A) pricing

B) diversification

C) differentiation

D) promotion

E) segmentation

C) differentiation

Which of the following Ps in the marketing mix describes the goods-and-services combination the company offers to the target market?

A) price

B) promotion

C) product

D) place

E) package

C) product

In the marketing mix, design, packaging, services, and variety can be categorized under ________.

A) product

B) price

C) promotion

D) place

E) position

A) product

In the marketing mix, place includes ________.

A) logistics

B) discounts

C) sales promotion

D) advertising

E) packaging

A) logistics

________ refers to activities that communicate the merits of the product and persuade target customers to buy it.

A) Position

B) Promotion

C) Pricing

D) Segmentation

E) Prospecting

B) Promotion

Which of the following is true with regard to a SWOT analysis?

A) It classifies SBUs into four distinct categories.

B) It measures customer response to a new product.

C) It evaluates the company's overall strengths.

D) It evaluates the growth potential of a market segment.

E) It ignores the threats faced by a company while assessing its situation in the market

C) It evaluates the company's overall strengths

________ is an overall evaluation of the company's strengths, weaknesses, opportunities, and threats.

A) Porter's five forces analysis

B) A breakeven analysis

C) A regression analysis

D) A SWOT analysis

E) A cluster analysis

D) A SWOT analysis

In a SWOT analysis, which of the following would be considered a strength?

A) industry trends

B) technological shifts

C) environmental demands

D) performance challenges

E) internal capabilities

E) internal capabilities

In a SWOT analysis, ________ include favorable trends in the external environment.

A) strengths

B) challenges

C) weaknesses

D) opportunities

E) threats

D) opportunities

The main section of the marketing plan most likely presents a detailed ________ analysis of the current marketing situation.

A) breakeven

B) SBU

C) SWOT

D) regression

E) cluster

C) SWOT

A marketing plan begins with a(n) ________, which presents a brief summary of the main goals and recommendations of the plan for management review.

A) budget

B) opportunity analysis

C) threat analysis

D) executive summary

E) action program

D) executive summary

Many managers think that "doing things right," or ________, is as important as, or even more important than, "doing the right things."

A) strategy

B) planning

C) positioning

D) implementation

E) targeting

D) implementation

Ravenshaw Corp. assigns its sales and marketing people to specific countries, regions, and districts. Ravenshaw Corp. is most likely an example of a ________.

A) geographic organization

B) product organization

C) functional organization

D) niche marketer

E) mass marketer

A) geographic organization

The most common form of marketing organization is the ________ organization. Under this organization, different marketing activities are headed by an operational specialist.

A) geographic

B) product management

C) functional

D) customer management

E) market

C) functional

Berman Electronics, a chain of appliance stores in North America, caters to a wide range of customers. It has a marketing organization in which different operational specialists head different marketing activities. Berman Electronics is a(n) ________.

A) customer management organization

B) niche marketer

C) early adopter

D) functional organization

E) laggard

D) functional organization

Which of the following is true with regard to geographic organization?

A) It is the most common form of marketing organization.

B) Different marketing activities are headed by a functional specialist.

C) It requires salespeople to have international experience.

D) It reduces the overall efficiency of salespeople.

E) It allows salespeople to work with a minimum of travel time and cost.

E) It allows salespeople to work with a minimum of travel time and cost.

Which of the following is a major advantage of the market organization?

A) The company is organized around the needs of specific customer segments.

B) The company exploits bleeding-edge technologies to keep ahead in the market.

C) The company has a flat organizational structure.

D) The company allows its salespeople to settle into a specific territory.

E) The company caters to a single, small market segment.

A) The company is organized around the needs of specific customer segments.

More and more companies are shifting their brand management focus toward ________.

A) technology management

B) product management

C) customer management

D) functional management

E) geographic management

C) customer management

________ refers to measuring and evaluating the results of marketing strategies and plans and taking corrective action to ensure that the objectives are achieved.

A) Marketing control

B) Marketing implementation

C) Satisficing

D) Prospecting

E) Benchmarking

A) Marketing control

Marketing control involves ________ steps.

A) two

B) seven

C) nine

D) four

E) eigh

D) four

All of the following steps pertain to the marketing control process EXCEPT ________.

A) setting goals

B) measuring performance

C) taking corrective action

D) defining the company's mission

E) evaluating the causes of gaps between expected and actual performance

D) defining the company's mission

The purpose of ________ is to ensure that the company achieves the sales, profits, and other goals set out in its annual marketing plan.

A) benchmarking

B) operating control

C) strategic control

D) SWOT analysis

E) a marketing audit

B) operating control

________ involves looking at whether a company's key action plans are well-matched to its opportunities.

A) Operating control

B) Benchmarking

C) Strategic control

D) Regression analysis

E) Portfolio analysis

C) Strategic control

Harris Brown, the marketing manager at a small retail chain, wants to assess his firm's strengths, opportunities, weaknesses, and threats. Which of the following would be best suited for his purpose?

A) SWOT analysis

B) cluster analysis

C) portfolio analysis

D) regression analysis

E) Porter's five forces analysis

A) SWOT analysis

Omega Inc. makes lightweight sunglasses with 100-percent UV protection for people who love to hunt, hike, and ride bikes. The company's long-term plans include the development of lenses that, in addition to protecting users from UV rays, would help reduce lens spotting through effective water-sheeting methods. This new feature would be valuable to people who fish. Given the rising popularity of recreational fishing in the United States, Omega products clearly have a huge market potential. In ter

D) opportunity

Emerson Studios has designed its marketing organization along the lines of a ________ organization in which different marketing activities are headed by operational specialists.

A) geographic

B) product

C) functional

D) customer

E) market

C) functional

________ measures the profits generated by investments in marketing activities.

A) SWOT analysis

B) A marketing audit

C) Regression analysis

D) Return on marketing investment

E) Marketing budget evaluation

D) Return on marketing investment

________ refer(s) to meaningful sets of marketing performance measures in a single display used to monitor strategic marketing performance.

A) Field automation systems

B) Market segments

C) Market share

D) Marketing dashboards

E) Line extensions

D) Marketing dashboards