Explain why firms minimize losses when marginal revenue product is equal to marginal resource cost.
Problem 1: After conducting STP analysis for her custom auto parts store and developing strategies for each of the 4 Ps, Brenda now has to make _____________ decisions.
A. competitive response
B. resource allocation
C. product line
D. market growth
E. mission statement
Developing Marketing Strategies and a Marketing Plan
Problem 2: Lamar owns four dry cleaning stores in the suburbs of Orlando. He updates his STP analysis annually, and adjusts his marketing mix based on the STP results. His next strategic marketing decision will likely involve:
A. how Disney World crowds will impact his business.
B. which employees to promote or fire.
C. how to allocate resources among his four stores.
D. what new government regulations to implement.
E. when to shift from a concentrated to an undifferentiated strategy.
Problem 3: In most companies, marketing resource allocation decisions are made at the SBU or ___________ level of the firm.
A. corporate
B. product line
C. customer care
D. sales representative
E. accounting
Problem 4: A ___________ is a group of products that consumers may use together or perceive as similar in some way.
A. SBU
B. STP
C. product line
D. market segment
E. promotional service
Problem 5: Heather has been assessing a number of her firm's products using the Boston Consulting Group approach to portfolio analysis. She has been trying to assess the strength in a particular market and is looking at the sales of the product and the overall market as well as the sales of competitors. Heather is working on determining _____________.
A. relative market share.
B. market growth rate
C. competitive advantage
D. statistical census analysis
E. cash generation equivalents
Developing Marketing Strategies and a Marketing Plan
Problem 6: To determine how attractive a particular market is in using the BCG portfolio analysis, ____________ is established as one axis.
A. competitive intensity
B. relative market share
C. ideal market distribution
D. market growth rate
E. profit potential
Problem 7: Based on the BCG portfolio analysis, products in low-growth markets that have received heavy investments and now have excess resources to spin off are:
A. stars.
B. cash cows.
C. question marks.
D. dogs.
E. None of the above
Problem 8: Fernando was thrilled to find out that his company had just decided to invest a great deal of money in the product he was managing. He knows that even with its recent high rate of growth and the fact that it was dominating the market, he would need more money to establish it firmly. Using the BCG portfolio analysis, his product shares characteristics with other:
A. stars.
B. cash cows.
C. question marks.
D. dogs.
E. None of the above
Problem 9: Using the BCG portfolio analysis, dogs should be phased out unless:
A. the CEO of the firm is a champion of the product.
B. additional resources could convert the product into a star.
C. it complements or boosts the sales of another product.
D. the market might rebound.
E. None of the above. Dogs should be phased out.
Developing Marketing Strategies and a Marketing Plan
Problem 10. Portfolio analysis is a useful and powerful tool, but firms often need to take a more balanced approach because:
A. measures are difficult to obtain and project
B. classifications can become self-fulfilling prophesies and strengths and weaknesses are distorted.
C. substitute approaches can offer different insights.
D. All of the above.
E. None of the above
Problem 11: Starbucks has developed a number of metrics beyond purely financial metrics. Knowing the importance of perceptions and knowing the importance of developing ways to demonstrate its activity, Starbucks tries to find clear ways to:
A. build brand equity.
B. demonstrate its sense of corporate social responsibility.
C. address concerns of opponents at local, regional, national and global levels.
D. help consumers feel better about their purchases.
E. All of the above
Problem 12. The strategic marketing planning process:
A. is a five-step process that should always be used in order.
B. can be used in reverse if desired.
C. begins with setting appropriate, measurable: outcomes.
D. is not always sequential.
E. forces marketing managers to think rationally.
Problem 13. During the implementation phase, Jonathon finds he does not have sufficient resources to accomplish the objectives that were previously established. Jonathon will likely:
A. ask for more resources.
B. change the planning objectives.
C. consider abandoning the plan.
D. any of the above.
E. all of the above.
Developing Marketing Strategies and a Marketing Plan
Problem 14. Which of the following is NOT one of the four major growth strategies marketers typically utilize?
A. market penetration
B. market development
C. product proliferation
D. diversification
E. product development
Problem 15. For many years, because of the size of the U.S. economy, domestic companies ignored international markets, preferring to expand their marketing efforts toward existing customers. These companies were pursuing a _____________ strategy.
A. market penetration
B. market development
C. product proliferation
D. diversification
E. product development
Problem 16. In many market situations, word-of-mouth referrals are a very effective source of new customers. Marketers often encourage referrals as a ____________ growth strategy.
A. product proliferation
B. market development
C. market penetration
D. diversification
E. product development
Problem 17. The marketing faculty at one university suggested the recruiting office offer a $50 gift certificate at the campus bookstore to students who referred new students to the university. This is a _______________ growth strategy.
A. product proliferation
B. market development
C. market penetration
D. diversification
E. product development
Developing Marketing Strategies and a Marketing Plan
Problem 18. Adrienne decides to add new sales representatives and increase advertising in her existing market for her line of security systems. Adrienne is pursuing a __________ growth strategy.
A. product proliferation
B. market development
C. market penetration
D. diversification
E. product development
Problem 19. Sarah has decided to pursue a market penetration strategy for her French cookware product line. She will likely increase advertising, sales promotion, and sales personnel. She may also consider:
A. intensifying distribution efforts.
B. investing in a travel agency.
C. shift resources into marketing a line of footwear.
D. expand into new territories.
E. all of the above
Problem 20. A ________________ growth strategy employs the existing marketing offering to reach new market segments.
A. product proliferation
B. market development
C. market penetration
D. diversification
E. product development
Problem 21. Quitman sells his business language dictionary to college students throughout the United States. He wants to sell the book to international students abroad. Quitman wants to pursue a __________ growth strategy.
A. product proliferation
B. market development
C. market penetration
D. diversification
E. product development
Developing Marketing Strategies and a Marketing Plan
Problem 22. When pursuing a market development strategy, expanding into international markets is generally:
A. more risky than expansion in domestic markets.
B. impossible due to negative attitudes about American products.
C. executed through international trade relief subsidies.
D. simplified by creating new products for export markets.
E. all of the above
Problem 23. H&R is a small, local heating and air conditioning business. They know the area military base is potentially a profitable source of growth but also know it is difficult to get established as a certified contractor with the government. H&R is considering a _________ growth strategy.
A. product proliferation
B. market development
C. market penetration
D. diversification
E. product development
Problem 24. Many states create licensing requirements for a variety of professionals designed to restrict entry into their market by professionals from other states. This strategy limits ____________ growth strategies.
A. product proliferation
B. market development
C. market penetration
D. diversification
E. product development
Problem 25. Marketers who design and offer new products and services to their existing customers are pursuing a ______________ growth strategy.
A. product proliferation
B. market development
C. market penetration
D. diversification
E. product development
Developing Marketing Strategies and a Marketing Plan
Problem 26. Most banks now have customer relationship software which, when a customer contacts the bank, tells the service representative what types of accounts, loans, and credit cards the customer currently has. Service representatives use this information to sell additional banking services. This is a ____________ growth strategy.
A. product proliferation
B. market development
C. market penetration
D. diversification
E. product development
Problem 27. Whenever Arnold calls his insurance agent, the agent tells Arnold about new types of insurance available. The agent is pursuing a ____________ growth strategy.
A. product development
B. market development
C. market penetration
D. diversification
E. product proliferation
Problem 28. In 2007, When Apple Computer Company introduced its new iPhone, adding cellular telephone and Internet access to its iPod, the company was engaged in a _________________ strategy.
A. mission creep
B. antitrust
C. power positioning
D. customer excellence enhancement
E. product development
Problem 29. Introducing new products or services to a market segment the company is not currently serving is called:
A. product development
B. market development
C. market penetration
D. diversification
E. product proliferation
Developing Marketing Strategies and a Marketing Plan
Problem 30. Researchers at Lobeco Chemical Company, a manufacturer of pigments for paint companies, found one of their pigment compounds has incredible adhesive qualities and could be used as glue in consumer markets. If Lobeco Chemicals pursues this opportunity it would be pursuing a _____________ growth strategy.
A. product development
B. market development
C. market penetration
D. diversification
E. product proliferation
Problem 31. To develop winning value-based strategies by anticipating and interpreting change and leveraging resources to address those changes, firms use:
A. macro strategies.
B. overarching strategies.
C. scenario planning.
D. change management.
E. effective mission statements.
Problem 32. The marketing department at Stuart's firm has assessed the strengths and weakness, and opportunities and threats. Now the department with input from senior management will identify different scenarios. Which of the following will NOT be one of their efforts?
A. Identify alternatives the firm might want to pursue
B. Match the firm's competencies with the opportunities' attractiveness
C. Reflect on the risks, benefits and costs in each alternative
D. Make sure they have correctly identified the competitors
E. Project what might happen two to five years into the future
Problem 33. Twyla has been asked to lead the effort in her firm's scenario planning effort. She knows she'll have to look at strengths and weaknesses, and opportunities and threats. Twyla will NOT have to look at which of the following factors?
A. Cultural
B. Demographic
C. Economic
D. Technological
E. Twyla will have to look at all of the above.
Developing Marketing Strategies and a Marketing Plan
Problem 34. The final step in scenario planning includes:
A. determining the marketing mix for the alternatives.
B. positioning all the likely alternatives.
C. embedding the macro strategies into the alternatives.
D. establishing breakeven points for the alternatives.
E. determining the profitability of the alternatives.
Problem 35. In developing an actionable marketing strategy, a firm will do all of the following except:
A. create a marketing plan.
B. analyze and evaluate its marketing situation.
C. develop a segmentation, targeting and position strategy.
D. use scenario planning to integrate information and assess the viability of corporate strategies.
E. poll key stakeholders, particularly employees and shareholders, about their preferred options to ensure "buy-in."
Problem 36. Of what use is a sustainable competitive advantage to a firm?
Problem 37. The text states, "Viewing customers with a life-time value perspective, rather than on a transaction-to-transaction basis, is the key to modern customer retention programs." Create an example demonstrating a life-time value perspective. Why is customer retention almost always a profitable marketing strategy?
Developing Marketing Strategies and a Marketing Plan
Problem 38. Although most people do not have a personal marketing plan, when would one be appropriate?
Problem 39. One of the benefits of taking marketing courses is the opportunity to apply marketing concepts to marketing yourself. When selling yourself, you are a product including all the skills, aptitudes, and attitudes you bring to the market. What is a sustainable competitive advantage? What can you do to give yourself a sustainable competitive advantage in the marketplace?
Problem 40. Your marketing professor, Dr. Marketing, has been asked to participate in the university's strategic marketing planning process. During the planning phase of the process, what questions Dr. Marketing likely ask? Be specific, this is the university's strategic marketing planning process.
Developing Marketing Strategies and a Marketing Plan
Problem 41. The text describes the case of Splenda, a product introduced into a market dominated by two other products but successfully differentiated from the competition both in formula and image. This gives Splenda a sustainable competitive advantage. What is a sustainable competitive advantage? Describe an example of a product or business you have encountered that has developed sustainable competitive advantage. Why is that product or firm advantage sustainable?
Problem 42. Your marketing professor, Dr. Marketing, has been asked to participate in the university's strategic marketing planning process. After completing the planning phase of the process, Dr. Marketer has been asked to assist with the STP analysis. What questions will Dr. Marketing ask? Be specific, this is the university's strategic marketing planning process.
Problem 43. As the text states, "Firms typically are most successful when they focus on those opportunities that build on their strengths relative to those of its competition." Using the automobile industry in the United States, describe an example of this type of positioning strategy.
Developing Marketing Strategies and a Marketing Plan
Problem 44. Your marketing professor, Dr. Marketing, has been asked to participate in the university's strategic marketing planning process. After completing the planning and STP phases of the process, Dr. Marketer has been asked to assist with the implementing marketing mix and allocating resources. What questions will Dr. Marketing ask? Be specific, this is the university's strategic marketing planning process.
Problem 45. Jami, a sales manager for an industrial materials company, reviews each sales representative's performance quarterly. He knows business has been good but is surprised to see some reps are selling much more than their goals while others have not meeting their goals. What should Jami do?
Problem 46. You and your friend Alison work in different parts of a large firm. In a recent analysis, your area was labeled a "cash cow" and hers was labeled a "question mark." What things would you do differently in your area than Alison would do in hers?
Developing Marketing Strategies and a Marketing Plan
Problem 47. Boston Consulting Group's Portfolio Analysis classifies a company's products or product lines into a two-by-two matrix. What are the bases of classification and what are products or product lines in each of the four quadrants called? What marketing strategies are usually considered for each of the four classifications?
Problem 48. Your new sales manager, who previously worked for Boston Consulting Group, directs each sales rep to "toss out the dogs," "exploit the stars," and "milk the cows." What should you do?
Problem 49. After finishing his marketing degree, Ryan inherited the family shrimp shack restaurant. The restaurant is a small, local institution that beach visitors have been coming to for decades. Ryan wants to make his business grow and is considering either a market penetration or market development strategy. Describe what Ryan will likely do if he pursues either strategy.
Developing Marketing Strategies and a Marketing Plan
Problem 50. Garden Gate is a one location nursery business, selling plants and flowers for home gardeners. The new owners want to grow through either a product development or diversification strategy. What will the owners likely do if they pursue either strategy?
Problem 51. Tyler is eager to demonstrate what he learned in his marketing course, and he suggested to his supervisor that the firm should add scenario planning to its overall marketing planning efforts. His supervisor was not exactly excited about the idea but he asked Tyler to draft a very short memo explain the value. What should Tyler include?
Problem 52. Why is a good strategy necessary for a firm?
Problem 153. Why is it important to have a structured approach to planning and developing a marketing plan?
Developing Marketing Strategies and a Marketing Plan
Problem 54. Southwest Airlines is known for being the low-cost provider in the U.S. airline industry. What type of macro strategy has Southwest pursued?
Problem 55. What is the goal of product, operational, and customer excellence?
Problem 56. Every summer university administrators attempt to estimate how many students will show up in the fall. When August arrives, they hire part-time instructors and re-assign faculty to teach the courses students want. In the spring, administrators often go on a retreat to consider how to do things differently next year. What three phases of the strategic planning process do they engage in?
Problem 57. Through contacts with local realtors and architects, ABC Construction Company consistently finds out who is considering having a home built before the larger, regional building companies find out. What marketing situation does ABC Construction have?
Problem 58. Firms periodically conduct SWOT analyses. Why?
Problem 59. When using STP, what types of opportunities provide the greatest potential success?
Problem 60. Every time the cost of oil goes up, gasoline stations raise their prices. What type of pricing strategy are they using?
Problem 61. Cosmetic companies spend significant sums advertising the benefits of their products. The prices of their products often significantly exceed the cost of producing them. What type of pricing strategy are these cosmetic companies using?
Developing Marketing Strategies and a Marketing Plan
Problem 62. Alex knows the pricing is the only part of his veterinarian business that brings in money. Thinking strategically, how should Alex price his services?
Problem 63. When catalog companies send sale catalogs to their customers, which type of growth strategy are they pursuing?
Problem 64. Why have many U.S.-based companies pursued market development strategies in countries like Mexico, China, and Japan?
Problem 65. When musicians and their concert promoters began offering CDs of a live concert, immediately after the concert ended, what type of growth strategy were they pursuing?