Chương 2 Test Bank

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) Difficulty: (2) Page: 44
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
3. The difference between annual and long-range plans versus 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 activities.
b. global activities.
c. tactical decisions.
d. adapting the firm to take advantage of opportunities in its constantly changing
environment.
Answer: (d) Difficulty: (3) Page: 44
4. _______________ is the process of developing and maintaining a strategic fit

between the organization’s goals and capabilities and its changing marketing
opportunities.
a. Strategic planning
b. Strategic control
c. Strategic networking
d. Functional development
Answer: (a) Difficulty: (1) Page: 44
5. _______________ planning sets the stage for the rest of the planning in the firm.
a. Functional
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b. Strategic
c. Operational
d. Tactical
6. For most companies, the first step in the strategic planning process is to:
a. set company objectives and goals.
b. design the business portfolio.
c. define the company mission.
d. review planning, marketing and other functional strategies.
Answer: (c) Difficulty: (2) Page: 44, 45, Figure 2-1
7. A mission statement is a statement of the organization’s:

a. accounts and responsibilities.
b. net worth.
c. purpose.
d. structure.
Answer: (c) Difficulty: (1) Page: 45
8. Questions such as “What is our business?” and “Who is the customer?” are generally
answered in a company’s:
a. objectives.
b. plan.
c. portfolio.
d. mission statement.
9. The statement of the organization’s purpose that acts as an “invisible hand” in

guiding people in the organization to action is called:
a. the strategic plan.
b. the mission statement.
c. the target market.
d. the company objective.
10. Traditionally, companies have defined their businesses in product terms or in:
a. motivation terms.
b. global terms.
c. functional terms.
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d. technological terms.
11. Wal-Mart has a mission statement that says “We deliver low prices, every day.”
This mission statement would best be characterized as being:
a. market-oriented.
b. product-oriented.
c. production-oriented.
d. futuristic.
Answer: (a) Difficulty: (2) Page: 49, Table 2-1
12. Mission statements should be all of the following EXCEPT:

a. unlike any other mission statement in the industry.
b. realistic.
c. specific.
d. motivating.
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 organization
14. When using a business portfolio to manage its businesses, the organization must
first analyze its current business portfolio and decide which businesses should receive
more, less, or no investment, and second, the organization must:
a. develop retraction strategies for the portfolio.
b. develop tactical decisions for the portfolio.
c. develop merger strategies for the portfolio.
d. develop growth strategies for adding new products or businesses to the portfolio.
15. _________________ is a tool by which management identifies and evaluates the

various businesses that make up the company.
a. Strategic planning
b. Portfolio analysis
c. Control recycling
d. A strategy grid
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16. If an organization were to identify a unit that has a separate mission and objectives
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 expansion unit.
d. development unit.
17. The purpose of strategic planning is to find ways in which the company can best:
a. overcome losses.
b. use its strengths to take advantage of attractive opportunities in the environment.
c. avoid paying taxes.
d. avoid the expense of costly research and development while still getting the
benefits.
18. The best known portfolio-planning method was developed by:

a. the Department of Commerce.
b. the University of Chicago.
c. the Boston Consulting Group.
d. the A. C. Nielson Consulting Group.
19. According to the growth-share matrix portfolio-planning method, a company’s

strategic business units can be evaluated in terms of their:
a. market growth rate and their relative profitability.
b. market growth rate and their expansion curve tendency.
c. structure and target markets.
d. market growth rate and relative market share.
Answer: (d) Difficulty: (3) Page: 51, 52, Figure 2-2
20. Under the BCG growth-share matrix, relative market share provides:
a. a measure of the company’s strength in the market.
b. the primary information for investment/divestiture decisions.
c. a measure of market attractiveness.
d. a measure of profitability for all products.
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21. Under the BCG growth-share matrix, high-growth, high-share businesses or products
are called:
a. stars.
b. cash cows.
c. question marks.
d. dogs.
Answer: (a) Difficulty: (1) Page: 51, 52, Figure 2-2
22. Under the BCG growth-share matrix, low-growth, high-share businesses or

products are called:
a. stars.
b. cash cows.
c. question marks.
d. dogs.
Answer: (b) Difficulty: (1) Page: 52, Figure 2-2
23. Under the BCG growth-share matrix, low-share, high-growth businesses or products
are called:
a. stars.
b. cash cows.
c. question marks.
d. dogs.
Answer: (c) Difficulty: (1) Page: 52, Figure 2-2
24. According to the BCG growth-share matrix, which types of SBUs listed below often
need heavy investment to finance their rapid growth?
a. Stars.
b. Cash cows.
c. Question marks.
d. Dogs.
25. According to the BCG growth-share matrix, which types of SBUs listed below often
produces profits that help to support other SBUs in need of investment?
a. Stars.
b. Cash cows.
c. Question marks.
d. Dogs.
26. If a company makes the decision to phase out an SBU and use the resources
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elsewhere in the company, this decision is called a(n) ________________
strategy.
a. build
b. divest
c. control
d. harvest
27. Some firms choose to milk an SBUs short-term cash flow regardless of the long-term
effect on the SBU. This strategy is generally called a(n) ________________
strategy.
a. build
b. divest
c. control
d. harvest
28. All of the following can be limitations to using matrix approaches for strategic
planning EXCEPT:
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: (c) Difficulty: (3) Page: 52, 53
29. The ________________ is a portfolio-planning tool for identifying company growth

opportunities through market penetration, market development, product development,
or diversification.
a. Boston Consulting Group approach
b. GE business-screen
c. input-output analysis approach
d. product/market expansion grid
30. According to research reports, Starbucks Coffee has used all of the following growth
strategies to fuel its growth and expansion EXCEPT:
a. more store growth.
b. deep discounting to wholesalers.
c. new retail channels.
d. new products and store concepts.
Answer: (b) Difficulty: (2) Page: 54-56, Marketing at Work 2-2
31. Under the product/market expansion grid, the strategy of making more sales of
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current products to current market segments without altering the product is called:
a. market penetration.
b. market development.
c. product development.
d. diversification.
32. Considering the strategies available in the product/market expansion grid, assume that
a company cuts prices, increases advertising, tries to get its products into more stores,
and tries to obtain better in-store displays. Which of the following strategies would
the company most likely be pursuing based on the above actions?
a. market penetration
b. market development
c. product development
d. diversification
33. Under the product/market expansion grid, the strategy of finding new market
segments for current company products is called:
d. diversification.
34. If a company (in reviewing its product/market expansion grid) decides to pursue new
demographic markets and expand into new geographic markets with existing products,
the company would be following which of the general strategies below?
d. diversification
35. Under the product/market expansion grid, the strategy of offering new products to
current markets is called:
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d. diversification.
36. If a company chooses (considering its options on the product/market expansion grid)
to offer new styles, sizes, or colors to its existing market, the company would be
following which of the general strategies listed below?
d. diversification
37. Under the product/market expansion grid, the strategy of entering a new market(s)
with new products is called:
d. diversification.
38. If a company (considering its options on the product/market expansion grid) chooses
to move into different unrelated fields (from what it has ever done before) with new
products as a means to stimulate growth, the company would be following which of
the following general strategies?
d. diversification
39. All of the following are ways that marketing plays a key role in the company’s
strategic planning EXCEPT:
a. marketing provides a guiding philosophy.
b. marketing is the only discipline that can provide a formal structure for the planning
effort.
c. marketing provides inputs to strategic planners by helping to identify attractive
market opportunities.
d. within individual business units, marketing designs strategies for reaching the
unit’s objectives.
40. When Wal-Mart’s purchasing department obtains the lowest prices possible from
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suppliers so that Wal-Mart can sell at low prices to the consumer, the purchasing
department becomes part of a ______________.
a. product life-cycle
b. synergistic function
c. value chain
d. promotion network
41. Honda has designed a program for working closely with its suppliers to help them
reduce their costs and improve quality. This form of program becomes part of
Honda’s _____________.
a. circulation cycle
b. financial network
c. small business chain
d. value delivery network
42. The first step in the marketing process is to:

a. select target markets.
b. develop the marketing mix.
c. manage the marketing effort.
d. analyze marketing opportunities.
43. At the center of any well founded marketing process is the:

a. profit maximization motive.
b. target customer.
c. shipping department.
d. advertising.
Answer: (b) Difficulty: (1) Page: 60, Figure 2-4
44. Each company must divide up the total market, choose the best segments, and
design strategies for profitably serving chosen segments better than its competitors
do. This process involves three steps. Which of the following IS NOT one of those
steps?
a. market delineation
b. market segmentation
c. market targeting
d. market positioning
Answer: (a) Difficulty: (3) Page: 61, 62
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45. ________________ consists of dividing a market into distinct groups of buyers on
the basis of needs, characteristics, or behavior who might require separate products
or marketing mixes.
a. Product differentiation
b. Market segmentation
c. Market targeting
d. Market positioning
46. A ______________ consists of consumers who respond in a similar way to a given

set of marketing efforts.
a. market
b. market segment
c. market position
d. target
47. With 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 value and sustain it over
time.
d. there are the fewest competitors and there are the lowest costs.
48. A product’s __________ is the place the product occupies relative to competitors in
consumer’s minds.
a. image
b. position
c. niche
d. segment
49. When the Chevy Blazer is described as being “like a rock,” it is an example of:
a. market segmentation.
b. product differentiation.
c. market targeting.
d. market positioning.
50. In positioning its product, the company first identifies possible:

a. market segments.
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b. market targets.
c. competitive advantages on which to build the position.
d. costs and profit pitfalls.
51. Product, price, place, and promotion are all controllable tactical marketing tools
found in the company’s ________________.
a. positioning plan
b. marketing analysis division
c. marketing mix
d. marketing support system
52. Design, quality, features, brand name, packaging, services, and variety are all items
found in which of the following marketing mix variables?
a. product
b. price
c. place
d. promotion
Answer: (a) Difficulty: (2) Page: 63, Figure 2-5
53. ________________ includes the company activities that make the product available
to target customers.
a. Product
b. Price
c. Place
d. Promotion
Answer: (c) Difficulty: (2) Page: 63, Figure 2-5
54. From the buyer’s point of view in this age of connectedness, the four Ps of the
marketing mix might be better described as the four Cs. Which of the following Cs
would match to the Place variable in the marketing mix?
a. Customer solution
b. Customer cost
c. Convenience
d. Communication
55. The marketing function that identifies the company’s strengths and weaknesses while
considering its opportunities and threats is called:
a. marketing analysis.
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b. marketing planning.
c. marketing control.
d. marketing implementation.
56. ______________ involves deciding on marketing strategies that will help the
company attain its overall strategic objectives.
a. Marketing analysis
b. Marketing planning
c. Marketing control
d. Marketing implementation
57. A(n) ____________ is the marketing logic whereby the company hopes to achieve
its marketing objectives.
a. marketing tactic
b. marketing theory
c. marketing concept
d. marketing strategy
58. The ________________ presents a brief summary of the main goals and
recommendations of the plan for management review, helping top management
to find the plan’s major points quickly.
a. executive summary
b. current marketing situation
c. objectives and issues
d. threats and opportunity analysis
59. Areas that are included in assessing the current marketing situation include all of the
following EXCEPT:
a. a review of production action programs.
b. a market description.
c. a product review.
d. a review of competition.
60. ___________________ outlines the broad marketing logic by which the business
unit hopes to achieve its marketing objectives and the specifics of target markets,
positioning, and marketing expenditure levels.
a. The current market situation
b. Objectives and issues
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c. Marketing strategy
d. Action programs
Answer: (c) Difficulty: (2) Page: 66, Table 2-2
61. The process that turns marketing strategies and plans into marketing actions in order
to accomplish strategic marketing objectives is called:
a. marketing strategy.
b. marketing control.
c. marketing analysis.
d. marketing implementation.
62. Successful ________________ depends on how well a company blends its people,
organizational structure, decision and reward systems, and company culture into a
cohesive program that supports its strategies.
a. marketing strategy
b. marketing control
c. marketing analysis
d. marketing implementation
63. The most common form of marketing organization is the:

a. functional organization.
b. geographic organization.
c. product management organization.
d. market management organization.
64. Companies that sell a single product to many different types of customers who have
different needs and preferences often use what type of marketing department
organization?
a. functional organization
b. geographic organization
c. product management organization
d. market or customer management organization
65. ______________ is the process of measuring and evaluating the results of marketing
strategies and plans, and taking corrective action to ensure that marketing objectives
are achieved.
a. Strategic control
b. Operating control
c. Functional control
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d. Marketing control
66. _____________ involves checking ongoing performance against the annual plan
and taking corrective action when necessary.
a. Strategic control
b. Engineering control
c. Operating control
d. Matrix control
67. The ____________ is a comprehensive, systematic, independent, and periodic

examination of a company’s environment, objectives, strategies, and activities to
determine problem areas and opportunities.
a. marketing plan
b. marketing strategy
c. marketing audit
d. marketing profile
TRUE/FALSE QUESTIONS
68. Strategic planning involves defining a clear company mission and other activities.
Answer: (True) Difficulty: (1) Page: 44
69. Many companies operate without formal plans.
70. The first step in strategic planning is to set company objectives and goals.
Answer: (False) Difficulty: (2) Page: 45, Figure 2-1
71. Management should always make its mission statement as broad as possible.
Answer: (False) Difficulty: (2) Page: 48
72. To do business correctly, mission statements should be product-oriented.
Answer: (False) Difficulty: (2) Page: 49, Table 2-1
73. “We run theme parks” would be an example of a market-oriented mission for the
Disney company.
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Answer: (False) Difficulty: (2) Page: 49, Table 2-1
74. If Home Depot’s mission were product-oriented, it might contain the following
phrase—“We sell tools and home repair and improvement items.”
Answer: (True) Difficulty: (2) Page: 49, Table 2-1
75. A strategic business unit (SBU) is a unit of the company that has a separate mission
and objectives that can be planned independently from other company businesses.
76. The Boston Consulting Group growth-share matrix measures portfolio performance
by market growth rate versus relative market share.
77. Using the BCG growth-share matrix approach, a star is characterized as being a low-
share business unit in high-growth markets.
78. Using the BCG growth-share matrix approach, a question mark is an SEU where the
company is approaching globalization as a primary strategy.
79. If a firm wants to milk its short-term cash flow regardless of the long-term effect,
then a strategy of harvesting should be considered.
80. According to the product/market expansion grid, market penetration would suggest
that a company grow with an established product in an established market.
Answer: (True) Difficulty: (2) Page: 53, 56
81. According to the product/market expansion grid, market development allows

managers to pursue new demographic and geographic markets with existing products.
Answer: (True) Difficulty: (2) Page: 53, 56
82. When each department within an organization carries out value-creating activities
to design, produce, market, deliver, and support the firm’s products, the department
is part of what is called a value chain.
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83. A market position consists of consumers who respond in a similar way to a given
set of marketing efforts.
84. Marketing targeting involves evaluating each market segment’s attractiveness and
selecting one or more segments to enter.
85. If Ford Taurus establishes itself as a car that is “built to last,” it has established
a market position.
86. The most important of the 4 Ps is promotion because without promotion no one
would know about the products.
87. The text indicates that 4 Cs match the 4 Ps of the marketing mix. The C that would
match the Product component of the 4 Ps would be Customer goods.
88. Marketing strategy is what is used by the marketer to develop the projected profit-
and-loss statement.
Answer: (False) Difficulty: (2) Page: 65, 66, Table 2-2
89. 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 review is the marketing
audit.
Answer: (False) Difficulty: (2) Page: 66, 69, Table 2-2
90. The most common form of marketing organization is the functional organization.
ESSAY QUESTIONS
91. For more than 25 years, Intel has dominated the microprocessor market for personal
computers. Intel’s stunning success results from strong strategic planning and its
relentless dedication to a simple marketing strategy. Identify this simple strategy and
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CHAPTER 2

STRATEGIC PLANNING AND THE MARKETING PROCESS

MULTIPLE CHOICE QUESTIONS

1. Planning encourages management to think systematically about what has happened,

Answer: (b) Difficulty: (2) Page: 44

Answer: (b) Difficulty: (1) Page: 44

Answer: (d) Difficulty: (3) Page: 44

4. _______________ is the process of developing and maintaining a strategic fit

Answer: (a) Difficulty: (1) Page: 44

Answer: (b) Difficulty: (2) Page: 44

Answer: (c) Difficulty: (2) Page: 44, 45, Figure 2-1

7. A mission statement is a statement of the organization’s:

Answer: (c) Difficulty: (1) Page: 45

Answer: (d) Difficulty: (1) Page: 45

9. The statement of the organization’s purpose that acts as an “invisible hand” in

Answer: (b) Difficulty: (2) Page: 45

Answer: (d) Difficulty: (2) Page: 45

Answer: (a) Difficulty: (2) Page: 49, Table 2-1

12. Mission statements should be all of the following EXCEPT:

Answer: (a) Difficulty: (2) Page: 48

Answer: (b) Difficulty: (1) Page: 50

Answer: (d) Difficulty: (3) Page: 50

15. _________________ is a tool by which management identifies and evaluates the

Answer: (a) Difficulty: (1) Page: 51

Answer: (b) Difficulty: (2) Page: 51

18. The best known portfolio-planning method was developed by:

Answer: (c) Difficulty: (1) Page: 51

19. According to the growth-share matrix portfolio-planning method, a company’s

Answer: (d) Difficulty: (3) Page: 51, 52, Figure 2-2

Answer: (a) Difficulty: (2) Page: 51

Answer: (a) Difficulty: (1) Page: 51, 52, Figure 2-2

22. Under the BCG growth-share matrix, low-growth, high-share businesses or

Answer: (b) Difficulty: (1) Page: 52, Figure 2-2

Answer: (c) Difficulty: (1) Page: 52, Figure 2-2

Answer: (a) Difficulty: (2) Page: 51

Answer: (b) Difficulty: (2) Page: 52

Answer: (b) Difficulty: (2) Page: 52

Answer: (d) Difficulty: (1) Page: 52

Answer: (c) Difficulty: (3) Page: 52, 53

29. The ________________ is a portfolio-planning tool for identifying company growth

Answer: (d) Difficulty: (2) Page: 53

Answer: (b) Difficulty: (2) Page: 54-56, Marketing at Work 2-2

Answer: (a) Difficulty: (2) Page: 56

Answer: (a) Difficulty: (2) Page: 56

Answer: (b) Difficulty: (2) Page: 56

Answer: (b) Difficulty: (2) Page: 56

Answer: (c) Difficulty: (2) Page: 56

Answer: (c) Difficulty: (2) Page: 56

Answer: (d) Difficulty: (2) Page: 53, 56, Figure 2-3

Answer: (d) Difficulty: (2) Page: 53, 56, Figure 2-3

Answer: (b) Difficulty: (3) Page: 57

Answer: (c) Difficulty: (1) Page: 57

Answer: (d) Difficulty: (2) Page: 58

42. The first step in the marketing process is to:

Answer: (d) Difficulty: (2) Page: 60

43. At the center of any well founded marketing process is the:

Answer: (b) Difficulty: (1) Page: 60, Figure 2-4

Answer: (a) Difficulty: (3) Page: 61, 62

Answer: (b) Difficulty: (2) Page: 61

46. A ______________ consists of consumers who respond in a similar way to a given

Answer: (b) Difficulty: (1) Page: 61

Answer: (c) Difficulty: (3) Page: 61

Answer: (b) Difficulty: (2) Page: 62