Deck 20: Managing Marketings Link With Other Functional Areas

Question 1

Coordinating the linkages between different functional areas is likely to be easier when a new strategy involves only a minor modification to a plan that the firm is already implementing.

Answer 1

True

Question 2

A marketing strategy that is focused on a real breakthrough opportunity will usually be successful even if there are obstacles in getting help from other functional areas in the firm.

Answer 2

False

Question 3

It would probably be a bad idea to go to work as a salaried salesperson selling installations for a firm that didn't have any working capital.

Answer 3

True

Question 4

"Working capital" is the money needed to pay for investments in facilities, equipment and other "fixed assets" needed to do the firm's basic work.

Question 5

The introduction of a totally new product idea would present a greater challenge in coordinating the activities of the different functional areas of a company than would a modification of an existing product.

Question 6

When evaluating possible strategies, a marketing manager shouldn't have to worry about screening based on financial criteria because the finance area's main job is to get the capital needed to implement the firm's marketing plan.

Question 7

Capital is the financial term for the amount of money invested in a firm.

Question 8

Coordinating the linkages between different functional areas is likely to be more difficult and critical when a strategy involves development of a totally new product idea rather than a minor change to an existing plan.

Question 9

Cross-functional challenges are greater for minor changes to a strategy than for a completely new strategy.

Question 10

Capital is the financial term for the amount of cash that a firm has in a bank checking account or other readily available form.

Question 11

A marketing plan is more likely to be funded if the marketing manager has included financial measures as quantitative criteria when screening possible opportunities.

Question 12

A firm's working capital may come from either internal sources--such as company bonds--or external sources--such as money paid by customers.

Question 13

Cross-functional links rarely affect strategy planning.

Question 14

"Working capital" is the money needed to pay for short term expenses--such as employee salaries, advertising, and marketing research--as they occur.

Question 15

Turning a strategy into a profitable business usually requires money, people, and other resources, such as production capacity, as well as a marketing plan.

Question 16

Funded marketing plans have no budget constraints.

Question 17

Coordinating the linkages between marketing and other functional areas is likely to be easier when a strategy involves developing a totally new product idea rather than just modifying an existing plan and established ways of doing things.

Question 18

Capital is the money needed to pay the personnel expenses required during the period of a marketing plan.

Question 19

Finding and allocating capital is usually the responsibility handled by a firm's chief financial officer.

Question 20

A marketing manager usually has responsibility for finding and allocating a firm's capital.

Question 21

There's more risk for financial investors when the potential profits from a marketing plan are off in the future rather than immediate.

Question 22

When a firm uses debt financing, the organization providing financing receives an ownership share in the company.

Question 23

With externally generated funding a firm's marketing program may be expected to "pay its own way."

Question 24

When the cost of borrowing is high, firms should wait before implementing a marketing plan.

Question 25

A firm with a great strategy will always attract investors.

Question 26

A strategy that's expected to "pay it's own way" must be based on a plan that generates the working capital needed to implement the plan.

Question 27

If a company borrows money via debt financing, the people or institutions that loan the money get an ownership share in the company.

Question 28

In general, the greater the risk that the lender takes on to provide the loan, the greater the interest rate charge will be.

Question 29

Compared to most U.S. firms, Japanese firms have a reputation for expecting a marketing plan to be profitable in a much shorter period of time.

Question 30

The value of a firm's stock is more likely to increase when its profits are growing.

Question 31

Selling stock is a common way to raise money for capital and involves selling shares in the ownership of the company.

Question 32

Some banks work aggressively to attract business customers who want loans, but most commercial lenders like to avoid risk and making loans that are not secured with assets.

Question 33

A company with a successful marketing strategy has its own internal source of funds--profits.

Question 34

Internal sources for capital include loans, stocks, and bonds.

Question 35

It's not sensible for a firm to implement a marketing plan if the plan doesn't generate at least enough initial revenue to cover working capital needs.

Question 36

A bank (or other institution) that provides debt financing to fund a marketing plan is usually more willing to take risks than are investors who buy stock.

Question 37

Before profits accumulate, a firm's selling price must cover all of the costs of doing business, including the interest charge on borrowed money.

Question 38

A firm's working capital may come from either internal sources--such as sales revenue and profits--or external sources--such as money from sales of stocks or bonds.

Question 39

Capital comes from external sources and working capital comes from internal sources.

Question 40

A company with a successful marketing strategy has its own external source of funds--profits.

Question 41

Problems of matching supply and demand often occur when a marketing plan calls for a regional roll out rather than a national roll out.

Question 42

A cash flow statement is a financial report that forecasts how much cash will be available after paying expenses.

Question 43

Production capacity is the ability to produce a certain quantity and quality of specific goods or services.

Question 44

While excess capacity can be costly, it can be a part of a sensible plan for preventing lost sales if demand suddenly picks up.

Question 45

Capital requirements are likely to be less when intermediaries take on much of the responsibility for promotion in the channel.

Question 46

Apple is a good example of a company that uses its own internal funds to research, develop, and bring to market new products like the iPad, iPhone, and iPod.

Question 47

Paying for growth by reinvesting cash generated from operations is usually less expensive than borrowing money because no interest expense is involved.

Question 48

Excess capacity can be a safety net if demand suddenly picks up.

Question 49

Concerns about production capacity apply to physical goods but they are not relevant when the product is a service.

Question 50

Problems of matching supply and demand for a new product often occur when a marketing plan calls for quick expansion into many different types of channels at the same time.

Question 51

When finances are tight, it's sensible to look for strategy alternatives that get a better return on money that is already invested.

Question 52

When Frito-Lay introduced Tostitos Gold, demand quickly outstripped supply resulting in lost sales and wasted promotion spending.

Question 53

Forecasting the amount of cash that will be available after paying expenses is straightforward because it's always equal to the firm's "bottom line"--the net profit figure shown on the operating statement.

Question 54

If demand is irregular, a firm's production flexibility is likely to influence the severity of stock-out problems in the channel of distribution.

Question 55

Indirect distribution usually requires less investment capital than direct approaches.

Question 56

Problems of matching supply and demand often occur when a marketing plan calls for quick expansion into many different types of channels.

Question 57

A company with a profitable strategy has its own internal source of funds.

Question 58

Promotion spending is wasted if a new marketing mix is more successful than expected and demand quickly outstrips supply.

Question 59

When a marketing strategy increases profit contribution without increasing capital invested, the firm's return on investment also increases.

Question 60

Kikkoman is a good example of a company that took advantage of both production capacity and production flexibility to introduce a new line of specialized condiments to appeal to additional market segments.

Question 61

A virtual corporation is one that achieves great flexibility in production by using computer-controlled manufacturing equipment.

Question 62

Mass customization means using the principles of mass production to appeal to the unique needs of individual customers and smaller segments of the market.

Question 63

Production flexibility allows a firm to provide business customers with the just-in-time delivery service or rapid-response replenishment of inventories that they expect.

Question 64

Mass customization serves individual needs.

Question 65

When a firm is a virtual corporation, it acts primarily as a producer--and leaves it to another firm to coordinate functions such as marketing, finance, and human resources.

Question 66

Production flexibility allows a firm to make better use of EDI or some other type of computerized reorder system--because the firm can respond to customer needs more quickly.

Question 67

The mass-customization approach is not useful if a firm wants to focus on a particular market segment.

Question 68

A virtual corporation is one where the firm is primarily a coordinator--with a good marketing concept.

Question 69

A virtual corporation may enjoy flexibility in operations, but often at higher cost or with less control of quality and schedules.

Question 70

A virtual corporation is likely to look for a capable supplier to produce a product that meets the specs laid out in the firm's marketing plan.

Question 71

It makes sense for a firm to produce where it can produce most economically--if the cost of transporting and storing products to match demand doesn't offset the production savings.

Question 72

Task transfer is using telecommunications to move service operations to places where there are pools of skilled workers.

Question 73

A virtual corporation may not make anything at all.

Question 74

Outsourcing production may increase a firm's flexibility in some ways, but it may also make production costs higher and quality control more difficult.

Question 75

Production capacity is more easily matched to the distribution of a new product if that distribution is staged.

Question 76

Just as a firm has a social responsibility in the country where it sells products, it also has a social responsibility to the people who produce its products.

Question 77

With the mass-customization approach, a firm tries to find a low-cost way to give individual customers more or better choices.

Question 78

Mass customization applies the principles of mass production to the challenge of meeting the unique needs of individual customers.

Question 79

A firm that relies on mass customization tries to get a competitive advantage by finding a low-cost way to give each customer in its target market more or better choices.

Question 80

Outsourcing reduces coordination and logistics problems if several firms are involved in different parts of production.