PART A - Multiple Choice Answers

1. Dell attempted to maintain its long-standing low-cost position by reducing the

number of technicians in its customer call centres. As a result, an increasing
number of customers spent 30 minutes or more on hold before they found a
technician to solve their problem. This affected Dell's customer satisfaction
rating in the United States and its sales and profit growth stagnated. This
scenario highlights:
A. the increased importance of service
B. strategic inertia
C. the company's market-orientation focus
D. the impact of information technology

2. A distinct subset of people with similar needs, circumstances and

characteristics that lead them to respond in a similar way to a particular
product or service offering is known as a:
A. market segment
B. target market
C. penetrated market
D. marketing mix

3. What component of strategy involves detailing the desired levels of

accomplishment on one or more performance dimension over specified time
periods for the organisation as a whole?
A. scope of an organisation
B. resource deployments
C. identifying a sustainable competitive advantage
D. goals and objectives of an organisation

4. Which of the following falls within the scope of corporate strategy?

A. target market definition
B. vertical integration
C. branding policies
D. line extension

5. A survey on customer feedback for an industrial paper company found that

about 80 per cent of customers' satisfaction scores were accounted for
because of order processing, delivery and post-sale services. This finding
substantiates which of the following statements?
A. Customer satisfaction increases due to the product-oriented approach.
B. Spending more on emphasising product features creates a sustainable
competitive advantage.
C. Customer satisfaction is influenced by factors other than the product itself.
D. Pricing is based on production and distribution costs.

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6. Telstra successfully entered the mobile phone market by initially targeting its
landline customers taking advantage of its extensive infrastructure and
experience in telephony. This example illustrates the use of a:
A. market penetration strategy
B. diversification strategy
C. product development strategy
D. market development strategy

7. Which of the following is a limitation of the growth–share matrix?

A. Since the matrix uses multiple variables as a basis for categorising a firm's
business, it is complex to understand.
B. Outcomes of this analysis are highly sensitive to variations in how growth
and share are measured.
C. The matrix is unable to analyse the impact of investing resources in
different businesses on the firm's future earnings.
D. The model fails to consider that firms can generate cash from businesses
with strong competitive positions in mature markets.

8. Which of the following is not a dimension that defines the scope and mission
of an individual SBU?
A. technical compatibility
B. similarity of competitors
C. similarity of customer needs
D. similarity of personal characteristics of customers in the target markets

9. A firm ensures that no two SBUs within the firm compete for the same
customers with similar products. Which SBU characteristic is being discussed
here?
A. a homogeneous set of markets to serve with a limited number of related
technologies
B. controlling factors that are essential for successful performance
C. a unique set of product markets
D. responsibility for their own profitability

10. According to Michael Porter, a business that avoids direct confrontation with
its major competitors by concentrating on narrowly defined market niches is
using the ______ strategy to gain and maintain competitive advantage.
A. overall cost leadership
B. differentiation
C. focus
D. segmenting

11. The defender strategy is most useful:

A. for business units with a profitable share of one or more major segments in
a relatively mature and stable industry
B. for business units that try to avoid being left behind in newly developing
application segments within the market
C. for well-developed units that are still experiencing some growth and
change as a consequence of evolving customer needs
D. for unstable units due to fewer competitors and their relative market shares
that shift rapidly as new products are introduced

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12. When large music record companies such as Sony, Warner Music and
Universal decided that they would make thousands of songs available for
download over the internet, this was a clear strategic response to changes in
the:
A. sociocultural environment
B. economic environment
C. technological environment
D. political environment

13. A micro-level analysis of market and industry attractiveness is based on:

A. the industry as a whole
B. the market as a whole
C. environmental conditions that affect the market
D. specific target customers

14. Which one of the below is not a part of the three team domains?
A. mission, aspiration, and propensity risk
B. ability to execute CSFs
C. connectedness up, down and across the value chain
D. strategic synergies between functional units within the firm

15. Statistical methods are not recommended for new product managers charged
with forecasting sales for a new product because:
A. There is no history in their venture on which to base a statistical forecast.
B. These methods tend not to base their assumption of the future on the past.
C. It does not include a method to forecast the impact on consumer demand
of different combinations of attributes.
D. It is not based on what people actually do.

16. The design, collection, analysis and reporting of research intended to gather
data pertinent to a particular marketing challenge or situation is referred to
as:
A. data mining
B. marketing research
C. marketing databases
D. project research

17. XYZ Stores is an international operator of shoe specialty stores. Each week,
all XYZ retail outlets receive information about the fastest and slowest selling
items in terms of style and colour; merchandise category (e.g. dress or
casual); store, area or region; and for various time periods. This is an
example of the use of:
A. marketing databases
B. competitive intelligence systems
C. internal records systems
D. client contact and sales force automation systems

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18. Which of the following statements is true of the top-down approach in sales
forecasting?
A. A central person or persons takes the responsibility to prepare an overall
forecast.
B. Once each part of the firm prepares its own sales forecast, the parts are
aggregated to create the forecast as a whole.
C. Firms can break their anticipated demand into pieces and sum the
components to create the summary forecast.
D. Various combinations of market segments and/or product lines can be
combined to build a business plan that looks viable.

19. Company A is a tyre manufacturer and uses factors like the number and age
of vehicles currently on the road in the country, predictions of GDP for the
region and other relevant factors to forecast market potential. Which of the
following methods is the one Company A uses for a more accurate forecast?
A. analogy
B. statistical method
C. observation
D. surveys

20. The competitive environment in some industries is witnessing developments

such as build-to-order processes, mass-customisation of products and
computer-aided design technology. What reason can be attributed to the
rising importance of marketing segmentation in such an environment?
A. Population growth has increased, and more product markets are maturing.
B. Social and economic forces have resulted in customers with less
disposable income.
C. An increasing trend toward microsegmentation exists in which extremely
small market segments are targeted.
D. Competitive inertia during the market shakeout period as the market
transitions from product maturity to the decline stage.

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