Test Bank For Marketing Strategy & Management Diane M. Phillips Chapter 1-13
Chapter 1: Setting the stage: The purpose and promise of marketing 1. The concept of marketing myopia was first described in a famous article under the same title written by ______. a. Dale Carnegie b. Tyler Levitt c. Theodore Levitt d. Philip Kotler Ans: C Marketing myopia was first described in a revolutionary 1960 article by Theodore Levitt published in the Harvard Business Review (HBR). He argued that many companies incorrectly take a short-sided approach to the market, viewing marketing merely as a tool for selling products. Instead, he emphasized the importance of focusing on satisfying customers’ needs. 2. Which of the following statements about the concept of ‘marketing myopia’ is correct? a. Marketing myopia represents the activity, set of institutions and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners and the society at large. b. Marketing myopia refers to the set of actions, or tactics, that a company uses to promote its brand or product in the market. c. Marketing myopia is a short-sighted focus on selling products and services, rather than a ‘big picture’ focus on what consumers want.
d. Marketing myopia is a situation where a company has a broad-minded marketing approach and where the long-term marketing goals are given more importance than the short-term goals. Ans: C Marketing myopia is a short-sighted focus on selling products and services, rather than seeing the ‘big picture’ of what consumers want. The concept refers to the tendency to view the scope of a business in a very limited way.
3. Which of the following cases best illustrates the concept of marketing myopia? a. Team Fiji’s efforts to win a medal at the Olympics b. Sony’s proactive and aggressive approach to marketing digital cameras c. Netflix’s entry into the film rental industry d. BP and its efforts to rebrand itself as Beyond Petroleum Ans: D With its Beyond Petroleum green advertising campaign (2000–2007), British Petroleum reintroduced itself to the market as a socially conscious company. However, very few substantive changes were made with regard to BP operations.
4. The definition of marketing according to the American Marketing Association acknowledges the importance of______ a. Aggressive selling and promotion of products and services b. Marketing strategies for the short term c. Exchanging value-based offerings providing a win-win situation d. A zero-sum game strategy in marketing Ans: C According to the American Marketing Association, marketing is the activity within a set of institutions and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners and the society at large (AMA 2017). The fundamental concepts to take away from the AMA definition are the customer-centricity approach; the wide range of ‘offerings that have value’ available today: marketers can
promote ideas, people, places and services; the dynamics of exchanging products/services and the consequent relational balances (or imbalances) among all the parties involved.
5. The process of looking at any industry holistically and understanding the key drivers of competition and profitability is an important part of ______. a. Knowledge management b. Operations management c. Distribution management d. Marketing strategy Ans: D As Michael Porter claims, the ‘job of the strategist is to understand and cope with the competition’ (Porter 2008, p. 79). Strategically analysing and coping with the complexity of the competitive market forces is critical for a marketing strategist.
6. ______ marketing strategy aims to deliver value to consumers in order to help the organization achieve specific objectives. a. Internal b. Integrated c. Independent d. International Ans: B Integrated: ‘Marketing strategy is an integrated set of decisions and processes designed to deliver value to consumers to help the organization achieve specific objectives’ (reference page 11). In any industry, assessing all the interrelated dynamics is crucial to the formulation of effective strategy.
7. Overcoming marketing myopia enables a variety of strategic opportunities for the marketing team. Which of the following statements most closely represents a non-myopic approach? a. Marketing managers cannot identify the myriad of options that are available to customers.
b. Competition is narrow. c. Marketing managers can better identify not just the myriad of options that are available to customers, but also they can create strategies that keep these competitive forces in check. d. A company can easily find the right customers for its products. Ans: C Marketing managers can better identify not just the myriad of options that are available to customers, but they can create strategies that keep these competitive forces in check (ref. page 13). Facing marketing myopia allows organizations to anticipate and satisfy consumers’ needs and strategize on how to lead and position themselves in the market.
8. The ______ developed by Michael Porter takes a broad perspective on competition. a. VRIO framework b. SWOT analysis c. PESTEL analysis d. 5 Forces Model Ans: D Michael Porter’s Five Forces framework has shaped a generation of academic research and business practice. According to Porter, the five forces that shape competition, regardless of the sector/industry are as follows: (1) the threat of new entrants, (2) the bargaining power of buyers, (3) the threat of substitute products or services, (4) the bargaining power of suppliers and (5) rivalry among existing competitors.
9. According to Porter (2008), how should the marketing team assess the competitive landscape? Ans: Originally developed by Harvard Business School’s Michael E. Porter (2008), the Five Forces Model represents a crucial marketing tool that helps marketers (and all those parties involved) analyse and predict the attractiveness and profitability of an industry. Michael Porter’s framework outlines five factors that are used to gauge competitiveness in a marketplace: (1) the threat of new entrants, (2) the bargaining power of buyers, (3) the threat
of substitute products or services, (4) the bargaining power of suppliers and (5) rivalry among existing competitors. Among those relevant aspects, competitive rivalry is the most important force in any ecosystem. It helps you understand the strength of competitors in comparison to you. If the rivalry is intense, companies tend to lower prices and attract customers through the promotion of certain perks/incentives. If not, profits are generally high. Competitive rivalry is influenced by the bargaining power of buyers, which can exert pressure and drive prices down. The threat of substitute products or services are alternatives from a different industry that serve the same need. A considerable number of substitutes can drive prices down and ultimately influence price, with the consequence of reducing the number of substitutes and hence favouring the creation of a monopoly in a particular industry. The entrance of the new players depends on the types of barriers in the market. If low, the threat of those new actors to existing players is high.
10. Drawing from Porter’s (2008) model, carefully describe at least three strategic moves the marketing team could take. Ans: Based on Porter’s framework, the array of benefits deriving from an effective analysis of the market includes the possibility of tailoring a unique/ideal company positioning strategy, by exploiting the weaknesses of the existing players; the possibility of monitoring and forecasting future trends and shifts; the possibility of shaping industry structure through innovation; the opportunity of defining the (broad or narrow) scope of the competition.
11. According to Porter (2008), the bargaining power of buyers is high when customers have weak negotiating power. True or false? Ans: False. The bargaining power of buyers is high when customers have strong negotiating/leverage power.