Deck 3: Developing and Enacting Strategic Marketing Plans

Question 1

The allocation of resources and effort within an organization is based upon

A) a strategic business plan.
B) situation analysis.
C) the firm's organizational mission.
D) the top-down approach to planning.

Answer 1

a strategic business plan.

Question 2

Which of the following is NOT a feature of a good strategic marketing plan?

A) A process in which different functional areas coordinate efforts
B) A process for formulating strategies
C) A large marketing budget
D) A means of monitoring performance

Answer 2

A large marketing budget

Question 3

The process- and output-related philosophy whereby a firm strives to fully satisfy customers in an effective and efficient manner is

A) total quality.
B) marketing myopia.
C) situation analysis.
D) top-down planning.

Answer 3

total quality.

Question 4

Which of the following is NOT part of a total quality program?

A) Customer satisfaction
B) Continuous improvement
C) Lowest possible costs
D) Customer focus

Question 5

Marketing plans can be categorized by

A) objective, size, and orientation.
B) cost, function, and level in organization.
C) cost, size, and degree of organizational commitment.
D) duration, scope, and method of development.

Question 6

What time span is most often covered in long-run marketing plans?

A) One year
B) Two to three years
C) Five to ten years
D) Over fifteen years

Question 7

A major advantage of bottom-up marketing plans is their

A) positive effect on morale.
B) use of complex assumptions.
C) ease of coordination.
D) functional integrity.

Question 8

The information flow in top-down planning comes from

A) senior managers.
B) salespeople, product managers, and retail buyers.
C) customer input through market research.
D) competitive information gathered and analyzed by marketing research personnel.

Question 9

A major disadvantage of top-down marketing planning is its

A) lack of input from lower-level managers.
B) difficulty in coordinating planning efforts.
C) long time span to develop marketing plans.
D) lack of management commitment to planning efforts.

Question 10

The existence of a centralized planning staff which directs and controls planning activities means a firm is using what type of marketing plan?

A) A bottom-up marketing plan
B) A top-down marketing plan
C) A separate marketing plan for each major product
D) An integrated marketing plan for all products

Question 11

In comparison with marketing personnel,

A) finance personnel are more interested in broadening credit standards.
B) engineering personnel are more interested in frequent design changes.
C) purchasing personnel are more interested in having high inventory levels.
D) production personnel are more interested in holding down per-unit production costs.

Question 12

A firm can reduce interfunctional area conflict through

A) forming multifunctional task forces, committees, and management-development programs.
B) increasing the role of the top marketing executive to a vice-president level.
C) having a marketing department.
D) giving marketing personnel staff authority.

Question 13

Organizational mission refers to a firm's

A) strengths and weaknesses relative to competition.
B) long-term commitment to a type of business and a place in the market.
C) competitive advantages.
D) relative importance of marketing.

Question 14

Which statement about organizational mission is correct?

A) It is most effective when oriented to technology.
B) It should be revised on a semiannual basis.
C) It should reflect investor concern.
D) It is more comprehensive than the line of business concept.

Question 15

It is most difficult to develop an organizational mission statement for a

A) public university.
B) private university.
C) heavily diversified firm.
D) wholesaler.

Question 16

Which of the following is a characteristic of a strategic business unit (SBU)?

A) Dependence on additional corporate areas for marketing and other resources
B) The existence of a manager with responsibility to integrate all functions into an overall strategy
C) The attraction of different geographic markets in a single marketing plan
D) The attraction of multiple target markets in a single marketing plan

Question 17

The basic building block of a strategic marketing plan is the

A) organization mission statement.
B) SWOT analysis.
C) strategic business unit (SBU).
D) short-run plan.

Question 18

Each strategic business unit requires

A) portfolio analysis.
B) minimum annual sales of $1 million.
C) its own marketing strategy.
D) multiple product lines.

Question 19

Which of the following is an example of a quantitative marketing objective?

A) A firm should improve its image.
B) Half of a company's total sales in 2010 should be in products not in the firm's 2000 product catalog.
C) The firm's cost of goods sold should be equal to or less than 30 percent of sales revenues.
D) The firm should emphasize cost cutting to be more competitive with foreign imports.

Question 20

A firm evaluates its internal strengths and weaknesses, as well as external opportunities and threats, in which stage of the strategic planning process?

A) Situation analysis
B) Marketing strategy development
C) Setting marketing objectives
D) Target market evaluation

Question 21

In situation analysis, a firm

A) develops its marketing strategy.
B) implements tactical plans.
C) establishes strategic business units.
D) searches the environment for potential opportunities and threats.

Question 22

In the developing marketing strategy stage of the strategic planning process,

A) marketing objectives are set.
B) the proper number of strategic business units is ascertained.
C) the marketing mix is outlined to satisfy the target market and achieve the organization's goals.
D) marketing performance is monitored and corrective action is specified.

Question 23

A market penetration strategy is proper when a firm seeks to

A) develop new technologies for sale to new customers.
B) appeal to new market segments.
C) reduce its dependence on one product line.
D) increase the usage rate among current customers.

Question 24

If a firm emphasizes new and improved models to its existing brand-loyal customers, is it utilizing

A) market penetration.
B) market development.
C) product development.
D) diversification.

Question 25

Strategic business units (SBUs) are classified on the basis of market share relative to key competitors and the annual industry growth rate in which marketing strategy?

A) Boston Consulting Group matrix
B) Product/market opportunity matrix
C) General Electric business screen
D) Porter generic strategy model

Question 26

Which of these is a key assumption of the Boston Consulting Group matrix?

A) A firm can be successful with a low market share if it successfully attracts and satisfies a niche market.
B) Low per-unit costs and high profitability are direct benefits of a high market share.
C) Strategic business units may be categorized on the basis of industry attractiveness and company business strengths.
D) The choice of a strategy depends on determining a firm's unique competitive advantage.

Question 27

The Boston Consulting Group matrix assumes that a high market share results in

A) the law of diminishing returns.
B) significant production economies, as well as higher bargaining power.
C) governmental intervention.
D) low bargaining power.

Question 28

The Boston Consulting Group matrix assumes that a high market growth

A) requires a large investment.
B) results in significant cost economies due to the learning curve.
C) signals the increase of competition.
D) results in significant cost economies due to improved bargaining power.

Question 29

According to the Boston Consulting Group matrix, a star

A) is a leading strategic business unit (SBU) in a mature industry.
B) needs to sustain its differential advantage(s) despite rising competition.
C) will quickly become a dog, if not given ample resources.
D) generates more cash (profits) than is required to retain its market share.

Question 30

According to the Boston Consulting Group matrix, a cash cow

A) is a successful product in a relatively mature or declining industry.
B) should be divested.
C) can become a problem child if a firm fails to invest sufficient resources to finance its growth.
D) requires either intensified marketing efforts or divestment.

Question 31

A firm's strategic business unit (SBU) has made little impact in the marketplace, even though the industry is expanding. The SBU is best classified as a

A) question mark.
B) dog.
C) cash cow.
D) relative failure.

Question 32

A firm does not know whether to increase its investment in a strategic business unit (SBU) or to divest it. The SBU can be best classified as a

A) cash cow.
B) question mark.
C) dog.
D) relative failure.

Question 33

In which approach to strategy planning would a firm derive overall ratings of industry attractiveness and company business strengths?

A) Boston Consulting Group matrix
B) Product/market opportunity matrix
C) General Electric business screen
D) Porter generic strategy model

Question 34

Compared to the product/market opportunity matrix and the Boston Consulting Group matrix, the General Electric business screen

A) is more qualitative.
B) is more quantitative.
C) uses more variables.
D) is more reliable.

Question 35

A firm classified a strategic business unit (SBU) as being in the medium industry attractiveness and high company business strength sector. Which of the following is the most appropriate strategy for the SBU on the basis of the General Electric business screen?

A) Invest/grow (Green)
B) Selectivity/earnings (Yellow)
C) Harvest (Blinking red)
D) Harvest/divest (Red)

Question 36

Which approach to strategy planning considers the concepts of competitive scope and competitive advantage?

A) Porter generic strategy model
B) Product/market opportunity matrix
C) Boston Consulting Group matrix
D) General Electric business screen

Question 37

Three strategies identified by the Porter generic strategy model are

A) harvest, maintain, and build.
B) product, promotion, and place (distribution).
C) low cost, high quality, and a broad market.
D) cost leadership, differentiation, and focus.

Question 38

In a cost leadership strategy, under the Porter generic strategy mode, a firm

A) seeks economies of scale through a high market share.
B) produces a distinctive product that has a broad appeal.
C) seeks to satisfy a market niche.
D) controls costs through aiming at a small market segment.

Question 39

In the Porter generic strategy model, an appropriate strategy when a firm has a unique design and a broad market appeal is

A) cost leadership.
B) cost focus.
C) differentiation.
D) differentiation focus.

Question 40

According to the Porter generic strategy model, the most appropriate strategy for a firm targeting the mass market is

A) competitive positioning.
B) cost focus.
C) cost leadership.
D) differentiation.

Question 41

Unlike the Boston Consulting Group matrix, the Porter model recognizes that a firm can succeed with a

A) quality-based strategy.
B) niche strategy.
C) business strength-based strategy.
D) market growth-based strategy.

Question 42

Which of these is a major strength of strategic planning portfolio models?

A) They enable firms to describe and analyze all business units and products on the basis of common criteria.
B) They include all relevant factors that affect profitability.
C) The definitions of such attributes as market share and product quality are clear.
D) They are easy to implement.

Question 43

When using strategic planning approaches such as the product/market opportunity matrix and the Boston Consulting Group matrix, marketers should keep in mind that these approaches

A) do not replace the need for "executive judgment."
B) have been highly tested for reliability and precision.
C) have stood the "test of time."
D) are easy to implement.

Question 44

Tactical plans specify the

A) total planning efforts of a firm.
B) long-run planning efforts of a firm.
C) short-run actions that a firm would undertake in implementing a given marketing strategy.
D) broad-based methods of implementing a firm's strategy.

Question 45

In contrast to a strategy, a tactical plan is

A) short-run in orientation.
B) bottom-up in orientation.
C) top-down in orientation.
D) sales-related in orientation.

Question 46

An example of a pricing-oriented tactic is

A) reducing unit costs through obtaining and maintaining a high market share.
B) basing all prices on the basis of production and marketing costs.
C) matching a competitor's price to make a sale to a price-conscious customer.
D) charging higher than market prices for all goods on the basis of a significant differential advantage.

Question 47

Order entry and merchandise handling are examples of

A) order-processing costs.
B) order-generating costs.
C) focus strategy tactics.
D) marketing functions.

Question 48

The goal of order-processing costs is to

A) provide the level of marketing effort necessary to maximize long-term company sales.
B) minimize those costs, subject to a given level of service.
C) keep order-processing costs at as low a level as possible.
D) raise these costs until marginal costs equal marginal sales revenues.

Question 49

Advertising and personal selling expenditures are examples of

A) allocated costs.
B) natural costs.
C) order-generating costs.
D) order-processing costs.

Question 50

Budgets, timetables, sales and profit statistics, cost analyses, and image studies are some of the measures that can be used to

A) control order-processing costs.
B) receive feedback.
C) implement tactics.
D) monitor results.

Question 51

Which of these statements about strategic planning is correct?

A) Strategic planning is a lateral, not a hierarchal, process.
B) Resource allocation is relatively unimportant.
C) Each division (department) must have clear objectives that are integrated with overall company objectives.
D) Each division (department) is expected to act autonomously to reduce the interaction with other divisions.

Question 52

Which of these is NOT a component of a total quality approach to strategic planning?

A) Customer focus
B) Customer satisfaction
C) Continuous improvement
D) A profit orientation

Question 53

In comparing short- and long-run plans, long-run plans are generally more

A) broad-based.
B) detailed.
C) bottom-up in orientation.
D) tactical.

Question 54

A firm is interested in establishing a ten-year marketing plan. Due to the large number of strategic business units (SBUs), the firm seeks to minimize difficulties in coordinating each plan. This firm should develop what type of plan?

A) Long-term, bottom-up
B) Long-term, top-down
C) Short-term, bottom-up
D) Short-term, top-down

Question 55

In bottom-up planning,

A) acceptance for the plan is increased among salespeople and customer support personnel.
B) there is less need for coordination than with top-down planning.
C) the role of middle managers in planning is diminished.
D) complex assumptions can be easily integrated into the plan.

Question 56

A major advantage of bottom-up planning, in comparison with top-down planning, is the

A) positive effect on employee morale.
B) uniformity of assumptions across the firm.
C) ease of coordinating the planning process.
D) integrated nature of the resulting marketing plan.

Question 57

In comparison to a bottom-up marketing plan, a top-down plan

A) is lower in cost than a bottom-up plan.
B) has difficulties in providing a uniform direction for the firm's marketing effort.
C) has a positive effect on morale.
D) provides a uniform direction for marketing.

Question 58

The top management of a company outlines the broad company-based objectives; marketing personnel decide appropriate marketing objectives and the marketing strategy. This illustrates

A) bottom-up planning.
B) top-down planning.
C) situation analysis.
D) a combination of top-down and bottom-up planning.

Question 59

Which one of the following is NOT a good means of resolving interdepartment conflict among marketing, finance, and production personnel?

A) Cross-training executives so that marketing personnel have had experience in finance and production (and vice-versa)
B) Allowing personnel to resolve conflicts through bargaining and negotiating
C) Setting overall objectives that reflect each department's objectives
D) Developing interfunctional task forces (such as new product planning teams) with personnel from different functional areas

Question 60

A firm's scope is determined in which strategic planning process stage?

A) Setting marketing objectives
B) Establishing strategic business units
C) Defining organizational mission
D) Situation analysis

Question 61

A fine watch manufacturer decides to limit its products to costly mechanical (nonquartz) watches. This illustrates the firm's

A) organizational mission.
B) situation analysis.
C) marketing strategy.
D) differential advantage.

Question 62

An automobile service station has decided to restrict its business to hybrids based on the special expertise of its mechanics. This illustrates the company's

A) strategic business unit orientation.
B) organizational mission.
C) situation analysis.
D) marketing strategy.

Question 63

Which of these statements by the managing partner of a medium-sized law firm involves the company's organizational mission?

A) "Last year's income was lower because we lost five key accounts."
B) "Our greatest weakness is our poor ability to promote our services."
C) "We need to better use computers to increase our productivity."
D) "We need to better focus our efforts on real-estate transactions in a two-county area."

Question 64

A narrow organizational mission

A) allows an organization to be a specialist.
B) gives a firm a balanced product portfolio.
C) gives a firm conglomerate status.
D) allows a firm to reduce risk through diversification.

Question 65

A strategic business unit (SBU) differs from a traditional product grouping in that the SBU

A) is a planning, but not an operational, unit.
B) is managed by a staff manager.
C) represents an autonomous organizational unit.
D) is subject to top-down planning.

Question 66

Which statement about strategic business units (SBUs) is correct?

A) The greater the number of SBUs, the less difficulty in coordinating the firm's overall marketing plan.
B) The terms "SBU" and "product department" are synonymous.
C) Identical products sold to different target markets (final and organizational consumers) are always combined into one SBU.
D) Each strategic business unit has a unique marketing plan.

Question 67

The strategic business unit (SBU) concept was developed as a way to

A) assure that each market target was reflected in its planning documents.
B) better set price levels on the basis of competitive advantages.
C) allocate resources to business units with the greatest long-term potential.
D) reduce costs throughout the company by controlling order-generating and order-processing costs.

Question 68

A firm's increasing its number of strategic business units (SBUs) from 10 to 35 could lead to

A) lower administrative costs.
B) better focus on small, but important, market segments.
C) improved coordination among SBUs.
D) more current financial data.

Question 69

Too many strategic business units (SBUs) can result in

A) a long-run orientation.
B) a short-run orientation.
C) a production orientation.
D) coordination difficulties.

Question 70

The best example of a good quantitative marketing objective is to

A) increase sales.
B) improve the firm's image over last year's.
C) increase the firm's visibility.
D) increase awareness of the firm by 25 percent on the basis of an accepted measure of awareness.

Question 71

Research by a light bulb manufacturer focused on the need for a light bulb that would last four times longer than a standard bulb among organizational consumers, the firm's technological advantages in producing this bulb, and the firm's overall strengths and weaknesses in this market. This illustrates

A) situation analysis.
B) corporate culture.
C) marketing strategy development.
D) implementing strategy.

Question 72

A market penetration strategy is most effective when

A) the market is growing.
B) a firm has a core of strong brands.
C) a firm seeks to reduce risks associated with overdependence on one or more products.
D) new market segments are emerging.

Question 73

Which of the following strategies best illustrates the market penetration stage of the product/market opportunity matrix?

A) Expanding a product's distribution into foreign markets
B) Developing a new product to appeal to a new market
C) Increasing brand loyalty through conducting customer satisfaction studies to current users
D) Repositioning an existing product to appeal to a new market

Question 74

A marketer of flour seeks to increase its usage rate by adding a Web site featuring recipes that feature its brand. This strategy exemplifies

A) diversification.
B) market development.
C) product development.
D) market penetration.

Question 75

A coffee retailer is seeking to expand the number of its locations through new formats (sales through carts in office building locations, and specially-equipped vending machines). It is utilizing

A) market penetration.
B) market development.
C) product development.
D) diversification.

Question 76

A digital camera manufacturer is considering making an advanced amateur version of a popular digital camera that has been used by professional photographers. This strategy illustrates

A) market development.
B) market penetration.
C) product development.
D) diversification.

Question 77

A firm seeks to increase the sales of its notebook computers by reducing their weight and size, and adding built-in components such as a wireless Internet modem. This strategy illustrates

A) market development.
B) market penetration.
C) diversification.
D) product development.

Question 78

A broad organizational mission is most compatible with which strategy in the product/market opportunity matrix?

A) Market development
B) Market penetration
C) Product development
D) Diversification

Question 79

An important determinant of profitability in both the Boston Consulting Group matrix and the General Electric business screen is

A) market growth.
B) market share.
C) industry size.
D) product quality.

Question 80

If a firm has too few cash cows relative to question marks and stars, the firm

A) is unprofitable.
B) has poor growth prospects.
C) lacks sources of internally-generated cash flow.
D) needs to divest its dogs.