CHAPTER 2

STRATEGIC PLANNING AND THE MARKETING PROCESS

MULTIPLE CHOICE QUESTIONS
1. Planning encourages management to think systematically about what has happened,
what is happening, and ______________.
a. when it is happening
b. what might happen
c. should something happen
d. should something stop
Answer: (b) Diffi!"#$: (2) P%&e: ''
2. Three types of plans usually prepared by companies include annual plans, strategic
plans, and __________ plans.
a. hourly
b. long-range
c. model
d. psychological
Answer: (b) Diffi!"#$: (() P%&e: ''
3. The difference between annual and long-range plans ersus a strategic plan is that
the annual and long-range plans deal with the company!s current businesses and how
to keep them going, while the strategic plan deals with"
a. functional actiities.
b. global actiities.
c. tactical decisions.
d. adapting the firm to take adantage of opportunities in its constantly changing
enironment.
Answer: ()) Diffi!"#$: (*) P%&e: ''
#. _______________ is the process of deeloping and maintaining a strategic fit
between the organi$ation!s goals and capabilities and its changing marketing
opportunities.
a. %trategic planning
b. %trategic control
c. %trategic networking
d. &unctional deelopment
Answer: (%) Diffi!"#$: (() P%&e: ''
'. _______________ planning sets the stage for the rest of the planning in the firm.
a. &unctional
21
b. %trategic
c. (perational
d. Tactical
Answer: (b) Diffi!"#$: (2) P%&e: ''
). &or most companies, the first step in the strategic planning process is to"
a. set company ob*ecties and goals.
b. design the business portfolio.
c. define the company mission.
d. reiew planning, marketing and other functional strategies.
Answer: () Diffi!"#$: (2) P%&e: ''+ ',+ -i&!re 2.(
+. , mission statement is a statement of the organi$ation!s"
a. accounts and responsibilities.
b. net worth.
c. purpose.
d. structure.
Answer: () Diffi!"#$: (() P%&e: ',
-. .uestions such as /0hat is our business12 and /0ho is the customer12 are generally
answered in a company!s"
a. ob*ecties.
b. plan.
c. portfolio.
d. mission statement.
Answer: ()) Diffi!"#$: (() P%&e: ',
3. The statement of the organi$ation!s purpose that acts as an /inisible hand2 in
guiding people in the organi$ation to action is called"
a. the strategic plan.
b. the mission statement.
c. the target market.
d. the company ob*ectie.
Answer: (b) Diffi!"#$: (2) P%&e: ',
14. Traditionally, companies hae defined their businesses in product terms or in"
a. motiation terms.
b. global terms.
c. functional terms.
22
d. technological terms.
Answer: ()) Diffi!"#$: (2) P%&e: ',
11. 0al-5art has a mission statement that says /0e delier low prices, eery day.2
This mission statement would best be characteri$ed as being"
a. market-oriented.
b. product-oriented.
c. production-oriented.
d. futuristic.
Answer: (%) Diffi!"#$: (2) P%&e: '/+ T%b"e 2.(
12. 5ission statements should be all of the following 6786PT"
a. unlike any other mission statement in the industry.
b. realistic.
c. specific.
d. motiating.
Answer: (%) Diffi!"#$: (2) P%&e: '0
13. The _____________________ is the collection of businesses and products that make
up the company.
a. business strategy group
b. business portfolio
c. business cartel
d. business organi$ation
Answer: (b) Diffi!"#$: (() P%&e: ,1
1#. 0hen using a business portfolio to manage its businesses, the organi$ation must
first analy$e its current business portfolio and decide which businesses should receie
more, less, or no inestment, and second, the organi$ation must"
a. deelop retraction strategies for the portfolio.
b. deelop tactical decisions for the portfolio.
c. deelop merger strategies for the portfolio.
d. deelop growth strategies for adding new products or businesses to the portfolio.
Answer: ()) Diffi!"#$: (*) P%&e: ,1
1'. _________________ is a tool by which management identifies and ealuates the
arious businesses that make up the company.
a. %trategic planning
b. Portfolio analysis
c. 8ontrol recycling
d. , strategy grid
23
Answer: (b) Diffi!"#$: (2) P%&e: ,1
1). 9f an organi$ation were to identify a unit that has a separate mission and ob*ecties
and that can be planned independently from other company businesses, it would be
called a:n;"
a. strategic business unit.
b. control unit.
c. product<market e=pansion unit.
d. deelopment unit.
Answer: (%) Diffi!"#$: (() P%&e: ,(
1+. The purpose of strategic planning is to find ways in which the company can best"
a. oercome losses.
b. use its strengths to take adantage of attractie opportunities in the enironment.
c. aoid paying ta=es.
d. aoid the e=pense of costly research and deelopment while still getting the
benefits.
Answer: (b) Diffi!"#$: (2) P%&e: ,(
1-. The best known portfolio-planning method was deeloped by"
a. the >epartment of 8ommerce.
b. the ?niersity of 8hicago.
c. the @oston 8onsulting Aroup.
d. the ,. 8. Bielson 8onsulting Aroup.
Answer: () Diffi!"#$: (() P%&e: ,(
13. ,ccording to the growth-share matri= portfolio-planning method, a company!s
strategic business units can be ealuated in terms of their"
a. market growth rate and their relatie profitability.
b. market growth rate and their e=pansion cure tendency.
c. structure and target markets.
d. market growth rate and relatie market share.
Answer: ()) Diffi!"#$: (*) P%&e: ,(+ ,2+ -i&!re 2.2
24. ?nder the @8A growth-share matri=, relatie market share proides"
a. a measure of the company!s strength in the market.
b. the primary information for inestment<diestiture decisions.
c. a measure of market attractieness.
d. a measure of profitability for all products.
Answer: (%) Diffi!"#$: (2) P%&e: ,(
2#
21. ?nder the @8A growth-share matri=, high-growth, high-share businesses or products
are called"
a. stars.
b. cash cows.
c. Cuestion marks.
d. dogs.
Answer: (%) Diffi!"#$: (() P%&e: ,(+ ,2+ -i&!re 2.2
22. ?nder the @8A growth-share matri=, low-growth, high-share businesses or
products are called"
a. stars.
b. cash cows.
c. Cuestion marks.
d. dogs.
Answer: (b) Diffi!"#$: (() P%&e: ,2+ -i&!re 2.2
23. ?nder the @8A growth-share matri=, low-share, high-growth businesses or products
are called"
a. stars.
b. cash cows.
c. Cuestion marks.
d. dogs.
Answer: () Diffi!"#$: (() P%&e: ,2+ -i&!re 2.2
2#. ,ccording to the @8A growth-share matri=, which types of %@?s listed below often
need heay inestment to finance their rapid growth1
a. %tars.
b. 8ash cows.
c. .uestion marks.
d. >ogs.
Answer: (%) Diffi!"#$: (2) P%&e: ,(
2'. ,ccording to the @8A growth-share matri=, which types of %@?s listed below often
produces profits that help to support other %@?s in need of inestment1
a. %tars.
b. 8ash cows.
c. .uestion marks.
d. >ogs.
Answer: (b) Diffi!"#$: (2) P%&e: ,2
2). 9f a company makes the decision to phase out an %@? and use the resources
2'
elsewhere in the company, this decision is called a:n; ________________
strategy.
a. build
b. diest
c. control
d. harest
Answer: (b) Diffi!"#$: (2) P%&e: ,2
2+. %ome firms choose to milk an %@?s short-term cash flow regardless of the long-term
effect on the %@?. This strategy is generally called a:n; ________________
strategy.
a. build
b. diest
c. control
d. harest
Answer: ()) Diffi!"#$: (() P%&e: ,2
2-. ,ll of the following can be limitations to using matri= approaches for strategic
planning 6786PT"
a. they can be difficult.
b. they can be time-consuming.
c. they primarily focus on future planning.
d. they can be costly to implement.
Answer: () Diffi!"#$: (*) P%&e: ,2+ ,*
23. The ________________ is a portfolio-planning tool for identifying company growth
opportunities through market penetration, market deelopment, product deelopment,
or diersification.
a. @oston 8onsulting Aroup approach
b. A6 business-screen
c. input-output analysis approach
d. product<market e=pansion grid
Answer: ()) Diffi!"#$: (2) P%&e: ,*
34. ,ccording to research reports, %tarbucks 8offee has used all of the following growth
strategies to fuel its growth and e=pansion 6786PT"
a. more store growth.
b. deep discounting to wholesalers.
c. new retail channels.
d. new products and store concepts.
Answer: (b) Diffi!"#$: (2) P%&e: ,'.,2+ M%r3e#in& %# 45r3 2.2
31. ?nder the product<market e=pansion grid, the strategy of making more sales of
2)
current products to current market segments without altering the product is called"
a. market penetration.
b. market deelopment.
c. product deelopment.
d. diersification.
Answer: (%) Diffi!"#$: (2) P%&e: ,2
32. 8onsidering the strategies aailable in the product<market e=pansion grid, assume that
a company cuts prices, increases adertising, tries to get its products into more stores,
and tries to obtain better in-store displays. 0hich of the following strategies would
the company most likely be pursuing based on the aboe actions1
a. market penetration
b. market deelopment
c. product deelopment
d. diersification
Answer: (%) Diffi!"#$: (2) P%&e: ,2
33. ?nder the product<market e=pansion grid, the strategy of finding new market
segments for current company products is called"
a. market penetration.
b. market deelopment.
c. product deelopment.
d. diersification.
Answer: (b) Diffi!"#$: (2) P%&e: ,2
3#. 9f a company :in reiewing its product<market e=pansion grid; decides to pursue new
demographic markets and e=pand into new geographic markets with e=isting products,
the company would be following which of the general strategies below1
a. market penetration
b. market deelopment
c. product deelopment
d. diersification
Answer: (b) Diffi!"#$: (2) P%&e: ,2
3'. ?nder the product<market e=pansion grid, the strategy of offering new products to
current markets is called"
a. market penetration.
b. market deelopment.
2+
c. product deelopment.
d. diersification.
Answer: () Diffi!"#$: (2) P%&e: ,2
3). 9f a company chooses :considering its options on the product<market e=pansion grid;
to offer new styles, si$es, or colors to its e=isting market, the company would be
following which of the general strategies listed below1
a. market penetration
b. market deelopment
c. product deelopment
d. diersification
Answer: () Diffi!"#$: (2) P%&e: ,2
3+. ?nder the product<market e=pansion grid, the strategy of entering a new market:s;
with new products is called"
a. market penetration.
b. market deelopment.
c. product deelopment.
d. diersification.
Answer: ()) Diffi!"#$: (2) P%&e: ,*+ ,2+ -i&!re 2.*
3-. 9f a company :considering its options on the product<market e=pansion grid; chooses
to moe into different unrelated fields :from what it has eer done before; with new
products as a means to stimulate growth, the company would be following which of
the following general strategies1
a. market penetration
b. market deelopment
c. product deelopment
d. diersification
Answer: ()) Diffi!"#$: (2) P%&e: ,*+ ,2+ -i&!re 2.*
33. ,ll of the following are ways that marketing plays a key role in the company!s
strategic planning 6786PT"
a. marketing proides a guiding philosophy.
b. marketing is the only discipline that can proide a formal structure for the planning
effort.
c. marketing proides inputs to strategic planners by helping to identify attractie
market opportunities.
d. within indiidual business units, marketing designs strategies for reaching the
unit!s ob*ecties.
Answer: (b) Diffi!"#$: (*) P%&e: ,6
#4. 0hen 0al-5art!s purchasing department obtains the lowest prices possible from
2-
suppliers so that 0al-5art can sell at low prices to the consumer, the purchasing
department becomes part of a ______________.
a. product life-cycle
b. synergistic function
c. alue chain
d. promotion network
Answer: () Diffi!"#$: (() P%&e: ,6
#1. Donda has designed a program for working closely with its suppliers to help them
reduce their costs and improe Cuality. This form of program becomes part of
Donda!s _____________.
a. circulation cycle
b. financial network
c. small business chain
d. alue deliery network
Answer: ()) Diffi!"#$: (2) P%&e: ,0
#2. The first step in the marketing process is to"
a. select target markets.
b. deelop the marketing mi=.
c. manage the marketing effort.
d. analy$e marketing opportunities.
Answer: ()) Diffi!"#$: (2) P%&e: 21
#3. ,t the center of any well founded marketing process is the"
a. profit ma=imi$ation motie.
b. target customer.
c. shipping department.
d. adertising.
Answer: (b) Diffi!"#$: (() P%&e: 21+ -i&!re 2.'
##. 6ach company must diide up the total market, choose the best segments, and
design strategies for profitably sering chosen segments better than its competitors
do. This process inoles three steps. 0hich of the following 9% B(T one of those
steps1
a. market delineation
b. market segmentation
c. market targeting
d. market positioning

Answer: (%) Diffi!"#$: (*) P%&e: 2(+ 22
23
#'. ________________ consists of diiding a market into distinct groups of buyers on
the basis of needs, characteristics, or behaior who might reCuire separate products
or marketing mi=es.
a. Product differentiation
b. 5arket segmentation
c. 5arket targeting
d. 5arket positioning
Answer: (b) Diffi!"#$: (2) P%&e: 2(
#). , ______________ consists of consumers who respond in a similar way to a gien
set of marketing efforts.
a. market
b. market segment
c. market position
d. target
Answer: (b) Diffi!"#$: (() P%&e: 2(
#+. 0ith respect to market targets, a company should target segments in which"
a. there are the most customers.
b. there are the most customers with the most money to spend.
c. the company can profitably generate the greatest customer alue and sustain it oer
time.
d. there are the fewest competitors and there are the lowest costs.
Answer: () Diffi!"#$: (*) P%&e: 2(
#-. , product!s __________ is the place the product occupies relatie to competitors in
consumer!s minds.
a. image
b. position
c. niche
d. segment
Answer: (b) Diffi!"#$: (2) P%&e: 22
#3. 0hen the 8hey @la$er is described as being /like a rock,2 it is an e=ample of"
a. market segmentation.
b. product differentiation.
c. market targeting.
d. market positioning.
Answer: ()) Diffi!"#$: (*) P%&e: 22
'4. 9n positioning its product, the company first identifies possible"
a. market segments.
34
b. market targets.
c. competitie adantages on which to build the position.
d. costs and profit pitfalls.
Answer: () Diffi!"#$: (() P%&e: 22
'1. Product, price, place, and promotion are all controllable tactical marketing tools
found in the company!s ________________.
a. positioning plan
b. marketing analysis diision
c. marketing mi=
d. marketing support system
Answer: () Diffi!"#$: (2) P%&e: 2*
'2. >esign, Cuality, features, brand name, packaging, serices, and ariety are all items
found in which of the following marketing mi= ariables1
a. product
b. price
c. place
d. promotion
Answer: (%) Diffi!"#$: (2) P%&e: 2*+ -i&!re 2.,
'3. ________________ includes the company actiities that make the product aailable
to target customers.
a. Product
b. Price
c. Place
d. Promotion
Answer: () Diffi!"#$: (2) P%&e: 2*+ -i&!re 2.,
'#. &rom the buyer!s point of iew in this age of connectedness, the four Ps of the
marketing mi= might be better described as the four 8s. 0hich of the following 8s
would match to the Place ariable in the marketing mi=1
a. 8ustomer solution
b. 8ustomer cost
c. 8onenience
d. 8ommunication
Answer: () Diffi!"#$: (2) P%&e: 2'
''. The marketing function that identifies the company!s strengths and weaknesses while
considering its opportunities and threats is called"
a. marketing analysis.
31
b. marketing planning.
c. marketing control.
d. marketing implementation.
Answer: (%) Diffi!"#$: (*) P%&e: 2,
'). ______________ inoles deciding on marketing strategies that will help the
company attain its oerall strategic ob*ecties.
a. 5arketing analysis
b. 5arketing planning
c. 5arketing control
d. 5arketing implementation
Answer: (b) Diffi!"#$: (*) P%&e: 2,
'+. ,:n; ____________ is the marketing logic whereby the company hopes to achiee
its marketing ob*ecties.
a. marketing tactic
b. marketing theory
c. marketing concept
d. marketing strategy
Answer: ()) Diffi!"#$: (2) P%&e: 2,
'-. The ________________ presents a brief summary of the main goals and
recommendations of the plan for management reiew, helping top management
to find the plan!s ma*or points Cuickly.
a. e=ecutie summary
b. current marketing situation
c. ob*ecties and issues
d. threats and opportunity analysis
Answer: (%) Diffi!"#$: (() P%&e: 22+ T%b"e 2.2
'3. ,reas that are included in assessing the current marketing situation include all of the
following 6786PT"
a. a reiew of production action programs.
b. a market description.
c. a product reiew.
d. a reiew of competition.
Answer: (%) Diffi!"#$: (*) P%&e: 22+ T%b"e 2.2
)4. ___________________ outlines the broad marketing logic by which the business
unit hopes to achiee its marketing ob*ecties and the specifics of target markets,
positioning, and marketing e=penditure leels.
a. The current market situation
b. (b*ecties and issues
32
c. 5arketing strategy
d. ,ction programs
Answer: () Diffi!"#$: (2) P%&e: 22+ T%b"e 2.2
)1. The process that turns marketing strategies and plans into marketing actions in order
to accomplish strategic marketing ob*ecties is called"
a. marketing strategy.
b. marketing control.
c. marketing analysis.
d. marketing implementation.
Answer: ()) Diffi!"#$: (2) P%&e: 22
)2. %uccessful ________________ depends on how well a company blends its people,
organi$ational structure, decision and reward systems, and company culture into a
cohesie program that supports its strategies.
a. marketing strategy
b. marketing control
c. marketing analysis
d. marketing implementation
Answer: ()) Diffi!"#$: (*) P%&e: 26
)3. The most common form of marketing organi$ation is the"
a. functional organi$ation.
b. geographic organi$ation.
c. product management organi$ation.
d. market management organi$ation.
Answer: (%) Diffi!"#$: (() P%&e: 26
)#. 8ompanies that sell a single product to many different types of customers who hae
different needs and preferences often use what type of marketing department
organi$ation1
a. functional organi$ation
b. geographic organi$ation
c. product management organi$ation
d. market or customer management organi$ation
Answer: ()) Diffi!"#$: (2) P%&e: 20
)'. ______________ is the process of measuring and ealuating the results of marketing
strategies and plans, and taking correctie action to ensure that marketing ob*ecties
are achieed.
a. %trategic control
b. (perating control
c. &unctional control
33
d. 5arketing control
Answer: ()) Diffi!"#$: (2) P%&e: 20
)). _____________ inoles checking ongoing performance against the annual plan
and taking correctie action when necessary.
a. %trategic control
b. 6ngineering control
c. (perating control
d. 5atri= control
Answer: () Diffi!"#$: (2) P%&e: 20
)+. The ____________ is a comprehensie, systematic, independent, and periodic
e=amination of a company!s enironment, ob*ecties, strategies, and actiities to
determine problem areas and opportunities.
a. marketing plan
b. marketing strategy
c. marketing audit
d. marketing profile
Answer: () Diffi!"#$: (*) P%&e: 2/
TRUE7-ALSE QUESTIONS
)-. %trategic planning inoles defining a clear company mission and other actiities.
Answer: (Tr!e) Diffi!"#$: (() P%&e: ''
)3. 5any companies operate without formal plans.
Answer: (Tr!e) Diffi!"#$: (() P%&e: ''
+4. The first step in strategic planning is to set company ob*ecties and goals.
Answer: (-%"se) Diffi!"#$: (2) P%&e: ',+ -i&!re 2.(
+1. 5anagement should always make its mission statement as broad as possible.
Answer: (-%"se) Diffi!"#$: (2) P%&e: '0
+2. To do business correctly, mission statements should be product-oriented.
Answer: (-%"se) Diffi!"#$: (2) P%&e: '/+ T%b"e 2.(
+3. /0e run theme parks2 would be an e=ample of a market-oriented mission for the
>isney company.
3#
Answer: (-%"se) Diffi!"#$: (2) P%&e: '/+ T%b"e 2.(
+#. 9f Dome >epot!s mission were product-oriented, it might contain the following
phraseE/0e sell tools and home repair and improement items.2
Answer: (Tr!e) Diffi!"#$: (2) P%&e: '/+ T%b"e 2.(
+'. , strategic business unit :%@?; is a unit of the company that has a separate mission
and ob*ecties that can be planned independently from other company businesses.
Answer: (Tr!e) Diffi!"#$: (() P%&e: ,(
+). The @oston 8onsulting Aroup growth-share matri= measures portfolio performance
by market growth rate ersus relatie market share.
Answer: (Tr!e) Diffi!"#$: (() P%&e: ,(
++. ?sing the @8A growth-share matri= approach, a star is characteri$ed as being a low-
share business unit in high-growth markets.
Answer: (-%"se) Diffi!"#$: (2) P%&e: ,(
+-. ?sing the @8A growth-share matri= approach, a Cuestion mark is an %6? where the
company is approaching globali$ation as a primary strategy.
Answer: (-%"se) Diffi!"#$: (2) P%&e: ,2
+3. 9f a firm wants to milk its short-term cash flow regardless of the long-term effect,
then a strategy of haresting should be considered.
Answer: (Tr!e) Diffi!"#$: (2) P%&e: ,2
-4. ,ccording to the product<market e=pansion grid, market penetration would suggest
that a company grow with an established product in an established market.
Answer: (Tr!e) Diffi!"#$: (2) P%&e: ,*+ ,2
-1. ,ccording to the product<market e=pansion grid, market deelopment allows
managers to pursue new demographic and geographic markets with e=isting products.
Answer: (Tr!e) Diffi!"#$: (2) P%&e: ,*+ ,2
-2. 0hen each department within an organi$ation carries out alue-creating actiities
to design, produce, market, delier, and support the firm!s products, the department
is part of what is called a alue chain.
Answer: (Tr!e) Diffi!"#$: (() P%&e: ,6
3'
-3. , market position consists of consumers who respond in a similar way to a gien
set of marketing efforts.
Answer: (-%"se) Diffi!"#$: (2) P%&e: 2(
-#. 5arketing targeting inoles ealuating each market segment!s attractieness and
selecting one or more segments to enter.
Answer: (Tr!e) Diffi!"#$: (() P%&e: 2(
-'. 9f &ord Taurus establishes itself as a car that is /built to last,2 it has established
a market position.
Answer: (Tr!e) Diffi!"#$: (() P%&e: 22
-). The most important of the # Ps is promotion because without promotion no one
would know about the products.
Answer: (-%"se) Diffi!"#$: (2) P%&e: 2*
-+. The te=t indicates that # 8s match the # Ps of the marketing mi=. The 8 that would
match the Product component of the # Ps would be 8ustomer goods.
Answer: (-%"se) Diffi!"#$: (2) P%&e: 2'
--. 5arketing strategy is what is used by the marketer to deelop the pro*ected profit-
and-loss statement.
Answer: (-%"se) Diffi!"#$: (2) P%&e: 2,+ 22+ T%b"e 2.2
-3. The element of the marketing plan that is used to present a brief summary of the
main goals and recommendations of the plan for management reiew is the marketing
audit.
Answer: (-%"se) Diffi!"#$: (2) P%&e: 22+ 2/+ T%b"e 2.2
34. The most common form of marketing organi$ation is the functional organi$ation.
Answer: (Tr!e) Diffi!"#$: (() P%&e: 26
ESSA8 QUESTIONS
31. &or more than 2' years, 9ntel has dominated the microprocessor market for personal
computers. 9ntel!s stunning success results from strong strategic planning and its
relentless dedication to a simple marketing strategy. 9dentify this simple strategy and
3)
discuss how 9ntel has implemented it. ,dditionally, comment on what you beliee are
9ntel!s strongest strategic plans.
Answer:
9ntel!s simple strategy is /to proide the most alue and satisfaction to customers through
product leadership.2 9ntel!s strategy rests on deliering superior alue by creating a
continuous stream of leading-edge products. Then it communicates its superior alue to
consumers. This has built intense customer loyalty and preference.
%ince 9ntel!s growth depends on increasing demand for microprocessors, which in turn
depends on growth in P8 applications and sales, the company has an intense interest in the
P8 industry and its fate. To control its own destiny the company is now deeloping
applications on the P8 itself. 9ts inestment in technology and market deelopment has
paid off. 9ntel!s adertising campaigns hae made the company!s name a household word.
,dditionally, 9ntel is working with small companies to spur the ne=t /killer app.2 %tudents
should think carefully about what they perceie to be 9ntel!s best strategy, be it adertising,
market deelopment, or technology. ,ny of these can be *ustified with detailed
e=planations taken from the introductory e=ample in the te=t.
Diffi!"#$: (2) P%&e: '(.''
32. >escribe the strategic planning process. 9dentify the four steps of the strategic
planning process.
Answer:
%trategic planning is defined as the process of deeloping and maintaining a strategic fit
between the organi$ation!s goals and capabilities and its changing marketing opportunities.
The four steps in the strategic planning process include" :1; defining the company mission
:a statement of purpose;, :2; setting company ob*ecties and goals :what do we want to
accomplish;, :3; designing business portfolios, and :#; planning marketing and other
related strategies.
Diffi!"#$: (2) P%&e: ''+ -i&!re 2.(
33. >efine a mission statement. 8haracteri$e what good mission statements should be.
Answer:
, mission statement is a statement of the organi$ation!s purposeEwhat it wants to
accomplish in the larger enironment.
, mission statement should be realistic, specific, fit the market enironment, and be
motiating.
Diffi!"#$: (() P%&e: ',+ '0
3#. >efine a business portfolio. Be=t, indicate the nature of the @oston 8onsulting Aroup
portfolio model. >iscuss this model in detail.
3+
Answer:
, business portfolio is the collection of businesses and products that make up the
company. The @oston 8onsulting Aroup approach is a growth-share matri= where
strategic business units are ealuated in terms of their market growth rate and relatie
market share. The @8A approach identified four types of %trategic @usiness ?nitsEstars,
cash cows, Cuestion marks, and dogs. %tars are high-growth, high-share businesses or
products. 8ash cows are low-growth, high-share businesses or products. .uestion marks
are low-share business units in high-growth business markets. >ogs are low-growth, low-
share business units in high-growth markets. :%ee te=t for additional details.;
Diffi!"#$: (2) P%&e: ,1.,*+ %n) -i&!re 2.2
3'. >escribe the four growth possibilities present on the product<market e=pansion grid.
Answer:
This grid is a portfolio-planning tool for identifying company growth opportunities
through market penetration, market deelopment, product deelopment, and
diersification. %trategies for each include" :1; market penetrationEincrease sales of
current products to current market segments without changing the product, :2; market
deelopmentEidentify and deelop new markets :demographic or geographic; for e=isting
company products, :3; product deelopmentEoffer modified or new products to current
market segments, and :#; diersificationEoffer new products to new market segments.
Diffi!"#$: (2) P%&e: ,*.,6+ %n) -i&!re 2.*
3). %tarbucks 8offee has had phenomenal growth in the last decade. Fist and briefly
discuss the key elements of their multipronged growth strategy.
Answer:
a;. 5ore store growth. 5ore than -' percent of %tarbucks! sales comes from its stores.
b;. Bew retail channels. %tarbucks has pushed into supermarkets.
c;. Bew products and store concepts. @ottled drinks, ice cream, and cafes hae led the
way.
Diffi!"#$: (2) P%&e: ,'.,2+ %n) M%r3e#in& %# 45r3 2.2
3+. >escribe a alue chain.
Answer:
, alue chain is a series of departments which carry out alue-creating actiities to design,
produce, market, delier, and support a firm!s products. The te=t uses the illustration of
0al-5art. 9f the instructor desires the students to discuss a different e=ample, this should
be made clear in directions. This answer can also be e=panded to include a alue deliery
network.
Diffi!"#$: (2) P%&e: ,6.,/
3-. >escribe the marketing management process and the forces that influence it.
3-
Answer:
The marketing management process inoles helping each business unit of the company
reach its strategic ob*ecties in relation to creating alue for target consumers while
fulfilling company goals. &actors that influence this process include the process for
targeting consumersG marketing mi= decisionsG planning, implementation, and analysis and
control proceduresG and micro- and macro-enironmental forces. %tudents should
carefully e=plain each portion of &igure 2-# and demonstrate the relationships contained
therein.
Diffi!"#$: (2) P%&e: 21 %n) -i&!re 2.'
33. >iscuss the differences between market segmentation, market targeting, and market
positioning.
Answer:
5arket segmentation is the process of diiding a market into distinct groups with distinct
needs, characteristics, or behaior who might reCuire separate products or marketing
mi=es. 5arket targeting is the process of ealuating each market segment!s attractieness
and selecting one or more segments to enter. 5arket positioning is arranging for a
product to occupy a clear, distinctie, and desirable place relatie to competing products
in the minds of target consumers.
Diffi!"#$: (2) P%&e: 2(.22
144. 8ompare the # Ps of the marketing mi= against the # 8s that might result from the
new age of connectedness.
Answer:
,s suggested in the chapter, the # Ps are" the # 8s are"
Product 8ustomer solution
Price 8ustomer cost
Place 8onenience
Promotion 8ommunication.
Diffi!"#$: (2) P%&e: 2'
141. 5arketing planning inoles deciding on marketing strategies that will help the
company attain its oerall strategic ob*ecties. 9n order to carry out effectie planning a
detailed marketing plan is needed for each business. Fist and briefly identify the primary
steps :contents; of a marketing plan. @e specific in your listing and identifications.
Answer:
The steps and a brief description of a marketing plan include"
a;. 6=ecutie summaryEpresents a brief summary of the main goals and
recommendations of the plan for management reiew, helping management to find the
plan!s ma*or points Cuickly.
33
b;. 8urrent marketing situationEdescribes the target market and the company!s position
in it, including information about the market, product performance, competition, and
distribution.
c;. Threats and opportunity analysisEassesses ma*or threats and opportunities that the
product might face, helping management to anticipate important positie or negatie
deelopments that might hae an impact on the firm and its strategies.
d;. (b*ecties and issuesEstates the marketing ob*ecties that the company would like to
attain during the plan!s terms and discusses key issues that will affect their attainment.
e;. 5arketing strategyEoutlines the broad marketing logic by which the business unit
hopes to achiee its marketing ob*ecties and the specifics of target markets, positioning,
and marketing e=penditure leels.
f;. ,ction programsEspells out how marketing strategies will be turned into specific
action programs that answer the following Cuestions" 0hat will be done1 0hen will it be
done1 0ho is responsible for doing it1 ,nd how much will it cost1
g;. @udgetsEdetails a supporting marketing budget that is essentially a pro*ected profit-
and-loss statement.
h;. 8ontrolsEoutlines the controls that will be used to monitor progress and allow higher
management to reiew implementation results and spot products that are not meeting their
goals.
Diffi!"#$: (*) P%&e: 22+ T%b"e 2.2
142. 5odern marketing departments can be arranged in seeral ways. Fist and briefly
describe the ways cited in the te=t.
Answer:
a;. &unctional organi$ationEthe most common form of marketing organi$ation. >ifferent
marketing actiities are headed by a functional specialist :a sales manager, adertising
manager, marketing research manager, et cetera;.
b;. Aeographic organi$ationEsales and marketing people are assigned to specific
countries, regions, and districts. Aeographic organi$ation allows sales people to settle
into a territory, get to know their customers, and work with a minimum of trael time and
cost.
c;. Product management organi$ationEa product manager deelops and implements a
complete strategy and marketing program for a specific product or brand.
d;. 5arket or customer management organi$ationEmarketing managers are responsible
for deeloping marketing strategies and plans for their specific markets or customers.
e;. 8ombination plans.
Diffi!"#$: (*) P%&e: 26+ 20
APPLICATION QUESTION
143. To be effectie in the marketplace, a company must diide up the total market
aailable, choose the best market segments, and design strategies for profitably sering
chosen segments better than its competitors. (ne company that seems to hae done this
e=tremely well is Ty 8orporation with its line of @eanie @abies. The products seem to sell
#4
well to young and old alike. Taking what you know about the company and its products,
deelop a plan for applying market segmentation, market targeting, and market positioning
to the company!s current line of @eanie @abies :be sure to address each of these issues
separately;. Hou may make assumptionsG howeer, be sure to state them. Iemember to
look for new market segments to keep the company iable in the future, and carefully
consider how to position the company for success in the ne=t century.
Answer:
Prior to giing this Cuestion the instructor can gie outside reading assignments on the
company or can refer students to the company!s 0eb site at www9#$95: where a wealth
of information e=ists on the company. 9n fact, the company claims that oer 2 billion hits
hae occurred on the 0eb site since its inceptionEthat!s ama$ingJ
The first section that should be discussed is a plan for market segmentation. %tudents can
be creatie with this, howeer, they should be sure to include information about children,
senior citi$ens, mothers, and serious collectors as potential segments that might e=plored
by the company. The different needs, characteristics, or behaior of these groups would
be a good starting point for discussion.
Be=t, students should outline their plan for picking a target market that should be what
they perceie to be the most attractie of the market segments mentioned aboe. Their
pick should be *ustified. %pecial niches can be identified, howeer, a primary target market
should be identified as well. %ee 5arketing ,t 0ork 2-2 for an additional e=ample.
Fastly, students should consider the communication and promotion opportunities facing
the company in its positioning strategy. 8onsider the competitie adantages of the
company and how it could build on these adantages. Iemember, the company must be
willing to delier on its promises. Dow can Ty sustain its growth1 Dow can it deal with
negaties or short supply of its products or how prices charged by collectors or scalpers1
6ach of these issues might be side issues in the Cuestion.
Diffi!"#$: (2) P%&e: ,'.,2+ M%r3e#in& %# 45r3 2.2+ 2(
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