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Test Bank For Principles of Marketing Revised by Michael Casey and Susan Leshnower

Principles of Marketing Nineteenth Edition Global Edition

Philip Kotler Gary Armstrong Sridhar Balasubramanian

TABLE OF CONTENTS Chapter 1 Marketing: Creating Customer Value and Engagement Chapter 2 Company and Marketing Strategy: Partnering to Build Customer Engagement, Value, and Relationships Chapter 3 Analyzing the Marketing Environment Chapter 4 Managing Marketing Information to Gain Customer Insights Chapter 5 Consumer Markets and Buyer Behavior Chapter 6 Business Markets and Business Buyer Behavior Chapter 7 Customer Value-Driven Marketing Strategy: Creating Value for Target Customers Chapter 8 Products, Services, and Brands: Building Customer Value Chapter 9 Developing New Products and Managing the Product Life Cycle Chapter 10 Pricing: Understanding and Capturing Customer Value Chapter 11 Pricing Strategies: Advanced Topics Chapter 12 Marketing Channels: Delivering Customer Value Chapter 13 Retailing and Wholesaling Chapter 14 Engaging Consumers and Communicating Customer Value: Integrated Marketing Communications Strategy Chapter 15 Advertising and Public Relations Chapter 16 Personal Selling and Sales Promotion Chapter 17 Digital Marketing Chapter 18 Creating Competitive Advantage Chapter 19 The Global Marketplace Chapter 20 Sustainable Marketing: Social Responsibility and Ethics

Principles of Marketing, 19e, Global Edition (Kotler) Chapter 1 Marketing: Creating Customer Value and Engagement 1) Which of these statements reflects Amazon founder Jeff Bezos’s opinion on the firm’s success and modern marketing? A) Focus on the bottom line B) Hire the right people C) Obsess over customers D) Sell everything to anybody E) Deliver savings Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 1.1: Define marketing and outline the steps in the marketing process. Difficulty: Moderate 2) According to management guru Peter Drucker, "The aim of marketing is to ________." A) maximize profits of the company B) emphasize customer wants and not customer needs C) make selling unnecessary D) fulfill unrealistic customer expectations E) sell products Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 1.1: Define marketing and outline the steps in the marketing process. Difficulty: Easy 3) Marketing is defined as a set of strategies and activities by which companies acquire and engage customers, build strong customer and client relationships, and create superior customer value in order to ________. A) enhance research and development efforts B) maintain or gain the leading market position C) profit from the sale of products D) capture value from customers in return E) increase the firm’s revenue Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 1.1: Define marketing and outline the steps in the marketing process. Difficulty: Moderate

4) According to the five-step model of the marketing process, which of the following is the last step in creating value for customers? A) designing a customer-driven marketing strategy B) understanding the marketplace and customer needs C) constructing an integrated marketing program that delivers superior value D) building profitable relationships and creating customer delight E) capturing value from customers to create profits and customer equity Answer: E AACSB: Application of knowledge Skill: Concept Objective: LO 1.1: Define marketing and outline the steps in the marketing process. Difficulty: Moderate 5) According to the five-step model of the marketing process, a company should ________ before designing a customer-driven marketing strategy. A) determine how to deliver superior value to customers B) build profitable relationships with customers C) use customer relationship management to create full partnerships with key customers D) understand the marketplace and customer needs and wants E) construct an integrated marketing program Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 1.1: Define marketing and outline the steps in the marketing process. Difficulty: Moderate 6) Which of these objectives is one of the threefold goals of marketing? A) attract new customers by promising superior value B) extract as much profit as possible from the market segment C) focus on growing the firm’s market share D) create new products through extensive research and development E) partner with supply chain members to deliver low-cost products Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 1.1: Define marketing and outline the steps in the marketing process. Difficulty: Moderate 7) Marketing is managing profitable customer relationships. Answer: TRUE AACSB: Application of knowledge Skill: Concept Objective: LO 1.1: Define marketing and outline the steps in the marketing process. Difficulty: Easy 8) One of the threefold goals of marketing is to eliminate unprofitable customers. Answer: FALSE 2

AACSB: Analytical thinking Skill: Concept Objective: LO 1.1: Define marketing and outline the steps in the marketing process. Difficulty: Moderate 9) Marketing is a social and managerial process by which entities obtain what they need or want by creating and exchanging value with others. Answer: TRUE AACSB: Application of knowledge Skill: Concept Objective: LO 1.1: Define marketing and outline the steps in the marketing process. Difficulty: Easy 10) List the five steps of the marketing process. Answer: Step 1: Understand the marketplace and customer needs and wants. Step 2:Design a customer value-driven marketing strategy. Step 3: Construct an integrated marketing mix that delivers superior value. Step 4: Engage customers, build profitable relationships, and create customer delight. Step 5: Capture value from customers to create profits and customer equity. AACSB: Application of knowledge Skill: Concept Objective: LO 1.1: Define marketing and outline the steps in the marketing process. Difficulty: Easy

11) ________ are human needs that are shaped by culture and individual personality. A) Necessities B) Wants C) Demands D) Values E) Exchanges Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Easy

12) When backed by buying power, wants become ________. A) social needs B) demands C) physical needs D) self-esteem needs E) exchanges Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Easy 13) __are states of felt deprivation. A) Value exchanges B) Market offerings C) Demands D) Needs E) Wants Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Easy 14) Venus Williams now has the buying power to purchase an island in the Bahamas that she has wanted for several years. Venus’s want is now a(n) ________. A) need B) necessity C) exchange D) demand E) transaction Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Moderate 15) A ________ is some combination of products, services, information, or experiences provided to consumers to satisfy a need or want. A) market offering B) value proposition C) brand positioning D) market segment 4

E) market mix Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Easy 16) Firm ABC’s marketing team is convinced their primary products are superior to their competitors but their sales are declining. A consulting firm tells Firm ABC that they need to focus more on the benefits and experiences provided to the firm’s customers and focus less on the specific products. What does Firm ABC appear to suffer from? A) market offering dystopia B) demand focus C) value proposition D) marketing myopia E) marketing immersion Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Moderate 17) Smart marketers look beyond the attributes of products and services. Instead, they focus on __. A) enhancing profitability B) creating brand experiences for their customers C) online buying and rapid delivery D) developing a superior supply chain network E) delivering a solid product at a value-conscious price Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Easy 18) ________ is the act of obtaining a desired object from someone by offering something in return. A) Valuation B) Exchange C) Market offering D) Confiscation E) Donation Answer: B 5

AACSB: Application of knowledge Skill: Concept Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Easy 19) A(n) ________ is the set of actual and potential buyers of a product or service. A) market B) control group C) subsidiary D) focus group E) audience Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Easy Refer to the following scenario to answer questions 20 - 22. Rashad is the new customer relationship manager for retail Firm XYZ. Sales have been falling and no one at the firm knows why this is happening. The marketing team has evaluated the product offerings several times and is convinced the firm’s products are superior to their competitors. Rashad needs additional information to diagnose the problem and then establish a plan to reverse the trend. After interviewing the entire marketing team, Rashad learned that no one really knows anything about their customers other than a demographic profile created 10 years ago. 20) After discussing Firm XYZ’s current situation, Rashad learns that no one at the firm has attempted to address the problem from the customer’s perspective. He believes the marketing team is suffering from . A) product differentiation syndrome B) customer value creation C) exchange focus D) marketing myopia E) relationship intermediation Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Moderate 21) Rashad knows that one of the key building blocks for developing and managing customer relationships is to . 6

A) focus on the product mix B) hire a comprehensive sales force C) create a superior marketing plan D) create better products E) satisfy customers Answer: E AACSB: Application of knowledge Skill: Concept Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Easy 22. Why do you think sales have been falling at Firm XYZ? Answer: The team at Firm XYZ appears to be suffering from marketing myopia. They have become so focused on their products that they have lost sight of what customers need and want. AACSB: Analytical thinking Skill: Concept Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Moderate Refer to the following scenario to answer questions 23 - 25. Carol Veldt, owner of Seagull Terrace, watched her investment grow from a small, seaside motel to a thriving year-round resort in just a few years. Atop a cliff overlooking the Maine coast, Seagull Terrace had attracted thousands of visitors during summer, but then faced a tremendous downturn in business during winter. "But, given the established industries in the nearby towns, very little year-round competition, and our close proximity to Portland," Carol added, "I couldn't understand why seasonality had to hit Seagull Terrace so hard!" So, Carol spent her first winter devising a new marketing plan. She put together a promotional package designed to attract business travelers year-round. Carol's plan also involved a seasonal promotional gimmick–to be implemented from early winter to late spring–that would attract the same numbers as the large summer crowd. Her idea worked! During her second winter, Carol greeted numerous business travelers–both satisfied repeat guests as well as new guests who had been snagged by her promotional appeals. "We still have a long way to go," Carol admitted. "Our delicatessen offers entrees that are a part of the local cuisine, but we'd like to expand that. We provide health club privileges off-site, but we would like to eventually provide our own. These are goals I hope to achieve in a few years. Our first project, however, included a renovation of our guest rooms and I'm quite proud of the results." Carol then added, "Actually there are so many possibilities. With an indoor pool area, I will eventually offer weekend getaways throughout winter." 23) Seagull Terrace offers its customers good accommodations, local delicacies, and amazing seaside views. The overall experience provided at the motel is a part of its ________. 7

A) market offering B) target market C) market segment D) product positioning E) marketing mix Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Challenging 24) Carol Veldt’s marketing efforts resulted in creating and delivering value for her customers as evidenced by repeat guests. Answer: TRUE AACSB: Application of knowledge Skill: Concept Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Easy 25) Explain how Carol Veldt transformed Seagull Terrace into an experience. Answer: Seagull Terrace was a simple seaside motel but Carol’s strategy turned the motel into an experience destination. She added amenities such as health and fitness options, better dining options, and also renovated the lodging. Her main focus was to rebrand the motel as an experience destination instead of merely a place to sleep on your summer vacation. AACSB: Analytical thinking Skill: Application Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Moderate

26) Human needs are shaped by culture and individual personality. Answer: FALSE AACSB: Application of knowledge Skill: Concept Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Easy 27) Market offerings are limited to physical products. Answer: FALSE AACSB: Application of knowledge Skill: Concept Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and 8

identify the five core marketplace concepts. Difficulty: Easy 28) What is a market offering? Answer: A market offering is any combination of products, services, solutions, and experiences that satisfy a consumer’s needs or wants. Furniture, financial services, and lodging are all examples of market offerings. AACSB: Application of knowledge Skill: Concept Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Easy 29) Explain how wants and resources help determine what we buy. Answer: Consumers demand products and services that will satisfy their wants and needs and fit within their budgets. They will purchase the products and services that deliver the most value and satisfaction per dollar spent. AACSB: Application of knowledge Skill: Concept Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Easy 30) Explain how the world’s number one hotel, Mahali Mzuri, maintains this status by offering more than lodging accommodations? Answer: Mahali Mzuri understands their guests want an experience and not simply a bed. The hotel delivers unique and unforgettable experiences by providing guests with multiple opportunities to view African wildlife. Guests get exposure to traditional Maasai culture without having to ‘camp out’ to get the experience. The hotel’s staff are attentive, and the accommodations are world class. In short, the hotel creates an immersive experience for its guests. AACSB: Application of knowledge Skill: Concept Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Easy 31) What should sellers consider if they wish to avoid marketing myopia? Answer: Sellers should consider the particular benefits and experiences desired by their customers, and not just pay attention to the specific products they offer. AACSB: Application of knowledge Skill: Concept Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Easy 9

32) Briefly compare and contrast the concepts of needs, wants, and demands and provide examples to illustrate your answer. How do these three concepts relate to marketing practices? Answer: Human needs are states of felt deprivation. Needs are a basic part of the human makeup; marketers do not create them. Humans have a basic physical need for food, clothing, warmth, and safety; a basic social need for belonging and affection; and a basic individual need for knowledge and self-expression. Wants are needs shaped by culture, society, and individual personality. For example, an American needs food but wants a Big Mac and a soft drink. Wants become demands when they are backed by consumers' buying power. For example, an American with ten dollars needs food, wants a Big Mac and soft drink, and demands lunch at McDonald's. Marketers conduct extensive research to understand customers' wants and demands. They then attempt to fulfill customers' wants and demands through their market offerings. AACSB: Written and oral communication Skill: Concept Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Moderate 33) Explain how and why marketers go beyond selling a product or service to create brand experiences. Answer: Sellers are most effective when they focus more on the benefits and experiences produced by their products and services than on the specific products and services themselves. Smart marketers focus on creating a brand experience, incorporating several products and services for their customers. By doing so, marketers hope to increase customer satisfaction. Satisfied customers buy again and tell others about their good experiences. AACSB: Written and oral communication Skill: Concept Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Moderate 34) Some firms attempt to serve all market segments _. A) since the most profitable firms attract the most customers B) since they understand the customer needs and wants C) by focusing on cost cutting over other goals D) and end up not serving any of them very well E) and lose sight of their product mix Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Moderate 35) Dividing the market into various groups of customers is known as ________. A) market segmentation B) positioning 10

C) customization D) target marketing E) differentiation Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Easy 36) Identifying which groups of customers to serve is known as ________. A) market segmentation B) positioning C) customization D) target marketing E) differentiation Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Easy Refer to the following scenario to answer questions 37 - 39. Kamesha’s Clothes is a retail clothing store that is considering expansion into nearby communities. Kamesha started her store four years ago and has done well focusing on providing stylish clothing to middle-income buyers. However, before she expands she would like to understand her customers better and see if she can expand her appeal to other demographic groups. During her last buying trip, she added some more expensive items to her inventory. However, very few of the added items have been sold. Kamesha is trying to decide whether to begin marketing the items more aggressively or whether to focus on other groups. 37) What should Kamesha do first as she attempts to expand her business? A) develop a targeted marketing campaign B) lower her prices on all items C) identify the various market segments D) hire a marketing manager E) consider hiring a consultant to help her make this decision Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Challenging 38) Kamesha’s second step should be to

_. 11

A) lower her prices on all items B) hire a marketing manager C) develop a targeted marketing campaign D) select the market segments she wants to pursue E) abandon her expansion efforts for the current time Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Challenging 39) What value proposition made Kamesha’s business successful and how can she build on that success? Answer: Kamesha’s initial success was based on focusing on providing stylish clothing to middle-income buyers. Instead of trying to serve another target market she should determine if there are unmet needs or wants among her middle-income buyers and expand accordingly. AACSB: Application of knowledge Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Moderate 40) An organic farmer has identified three distinct groups that might be interested in his products: vegetarians, health-conscious individuals, and people identified as trendsetters who try out new products in the market before others. These three groups are examples of ________. A) marketing mixes B) market segments C) value propositions D) market offerings E) marketing intermediaries Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Challenging 41) Which of the following customer questions is answered by a company's value proposition? A) "Why should I buy your brand rather than a competitor's?" B) "What is your company's estimated customer equity?" C) "What are the costs involved in the production of your brand?" D) "What is the budget allocated by your company for research and development?" E) "What is the financial stability of your company?" Answer: A AACSB: Analytical thinking 12

Skill: Application Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Moderate 42) Which of these marketing orientations focuses primarily on the product’s features, performance, and quality? A) production concept B) product concept C) selling concept D) marketing concept E) societal marketing concept Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Easy 43) Which of the following marketing management concepts is most likely to lead to marketing myopia? A) customer-driven marketing concept B) customer-driving marketing concept C) societal marketing concept D) marketing concept E) product concept Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Moderate 44) Which of these statements is true of the selling concept? A) It focuses on a large-scale selling and promotion effort. B) It follows the customer-centered sense-and-respond philosophy. C) It focuses solely on the product’s attributes and features. D) It calls for sustainable marketing. E) It leads to companies focusing too narrowly on their own operations. Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Moderate 13

45) The concept of marketing focuses on consumer wants, company requirements, and the long-run interests of consumers and society. A) selling B) product C) societal D) consumer E) production Answer: C AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Moderate 46) Which of the following is the aim of the product concept? A) improve the marketing of a firm's best products B) market only those products with high customer appeal C) focus on the target market and make products that meet those customers' demands D) focus on making continuous product improvements E) ensure that product promotion has the highest priority Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Moderate 47) The concept of marketing takes an inside-out view that focuses on existing products. A) product B) selling C) production D) societal E) wholistic Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Easy 48) Railroads were once operated based on the thinking that users wanted trains that would offer the most in quality, performance, and innovative features. The railroad managing companies overlooked the fact that there could be other modes of transportation. This reflects the ________ concept. A) product 14

B) production C) selling D) marketing E) societal marketing Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Challenging 49) Which of these marketing orientations espouses the concept of shared value? A) the marketing concept B) the production concept C) the societal marketing concept D) the selling concept E) the product concept Answer: C AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Easy 50) Which of the following marketing orientations also considers consumer long-run welfare? A) the marketing concept B) the production concept C) the product concept D) the selling concept E) the societal marketing concept Answer: E AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Easy 51) The selling concept is typically practiced ________. A) to balance consumers' wants, company's requirements, and the society's long-run interests B) with products that offer the most in terms of quality, performance, and innovative features C) when the company focuses on building long-term customer relationships D) with goods that buyers normally do not think of buying E) by customer-driven companies Answer: D AACSB: Application of knowledge Skill: Concept 15

Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Moderate 52) Which of the following marketing orientations holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do? A) the product concept B) the production concept C) the selling concept D) the marketing concept E) the societal marketing concept Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Easy 53) The societal marketing concept seeks to establish a balance between ________. A) customer lifetime value and customer equity B) an inside-out perspective and an outside-in perspective C) consumer short-run wants and consumer long-run welfare D) marketing mixes and market offerings E) customer-driven marketing and customer-driving marketing Answer: C AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Easy 54) Some fast-food restaurants offer tasty and convenient food at affordable prices, but in doing so they contribute to a national obesity epidemic and environmental problems. These fast-food restaurants overlook the ________ philosophy. A) marketing concept B) product concept C) production concept D) societal marketing concept E) selling concept Answer: D AACSB: Ethical understanding and reasoning Skill: Application Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Challenging 16

55) The set of marketing tools a firm uses to implement its marketing strategy is called the ________. A) promotion mix B) product mix C) marketing mix D) market offering E) marketing effort Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Easy 56) Which of the following is the most likely result of a marketing strategy that attempts to serve all potential customers? A) All customers will be delighted. B) Customer-perceived value will increase. C) All customers will directly turn into customer evangelists. D) Not all customers will be satisfied. E) Customers will not show interest in any other company's products. Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Moderate 57) Which of these is NOT one of the four Ps of marketing? A) price B) place C) product D) profit E) promotion Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Easy 58) At a local farmers' market, Molly Malone sells mussels while shouting to passersby, "Fresh seafood, get your fresh seafood here!" What kind of perspective is Molly taking? A) customer-focused B) inside-out 17

C) customer-driven D) outside-in E) niche marketing Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Challenging 59) Market segmentation is the process of seeking fewer customers and reduced demand for profit maximization only. Answer: FALSE AACSB: Application of knowledge Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Easy 60) The selling concept holds that consumers will favor high quality products with the most features. Answer: FALSE AACSB: Application of knowledge Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Easy 61) The production concept and the product concept are marketing orientations that are more likely to lead to marketing myopia. Answer: TRUE AACSB: Application of knowledge Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Moderate 62) Healthy Veggies, LLC, believes that marketing is a tool to use in finding customers and keeping them by providing vegetables that are grown using chemical-free farming techniques and selling through small family-owned stores. Healthy Veggies, LLC, practices societal marketing. Answer: TRUE AACSB: Analytical thinking Skill: Application Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. 18

Difficulty: Challenging 63) What is a firm’s marketing mix? Answer: The marketing mix refers to the set of marketing tools the firm uses to implement its marketing strategy. The marketing mix tools are typically classified as the four Ps of marketing: product, price, place, and promotion. AACSB: Application of knowledge Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Easy 64) Company X, a manufacturer of office supplies, follows the selling concept. Explain how the firm may lose sight of customer relationships with this marketing orientation. Answer: The selling concept of Company X focuses on selling its office supplies rather than making what the market wants; such a strategy creates sales transactions but not long-term customer relationships. The company would most likely have a faulty assumption that customers who are persuaded to buy the product will like it or that they will buy the product again later even if they were not really initially satisfied. Company X will not foster customer loyalty with this approach. AACSB: Analytical thinking Skill: Application Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Challenging 65) Compare the selling and marketing concepts, listing the key components of each philosophy. Answer: The selling concept reflects an inside-out perspective, while the marketing concept takes an outside-in perspective. The selling concept is typically practiced when an organization is marketing products or services that buyers do not normally think of purchasing, such as insurance or blood donation. Aggressive selling focuses on creating sales transactions rather than building long-term relationships with customers, with the aim of selling what the company makes rather than making what the customer wants. The marketing concept, on the other hand, is based upon identifying the needs and wants of target markets and then satisfying those needs and wants better than competitors do. In contrast to the selling concept, marketing focuses on the customer, not the product, as the path to profits. AACSB: Written and oral communication Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Moderate 66) Briefly explain the societal marketing concept. Give an example of an organization that has effectively used the societal marketing concept. Answer: According to this concept, firms will succeed if they take underlying consumer needs 19

and society's well-being into account over the long term. A pure marketing concept can damage consumers' long-run welfare by focusing exclusively on satisfying consumers' short-run wants. Over an extended period of time, this too-narrow focus can be damaging to the company. In setting their marketing strategies, marketers today need to balance company profits, consumer wants, and society's interests. The societal marketing concept holds that marketing strategy should deliver value to customers in a way that maintains or improves both the consumer's and society's well-being. It calls for sustainable marketing, socially and environmentally responsible marketing that meets the present needs of consumers and businesses while also preserving or enhancing the ability of future generations to meet their needs. Jeni's Splendid Ice Creams has a mission that stresses company profits, consumer wants, and societal interests. The company proactively seeks opportunities to act responsibly and efficiently. They ethically source all inputs from suppliers that have minimal impact on the environment and help build and shape local communities. AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 1.3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Difficulty: Moderate 67) Which of these statements best describes customer lifetime value? A) The value of the entire stream of purchases that the customer would make over a lifetime of patronage. B) The value associated with creating a brand preference. C) The component of customer relationship management that focuses solely on customer delight. D) The overall value of the firm’s customer base. E) The value created when customer satisfaction generates additional sales. Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Moderate 68) Customer satisfaction is a goal that companies strive to achieve. Companies can accomplish this goal by ________. A) regularly putting products on sale B) promising only what they can deliver and then delivering more than they promise C) offering promotional deals such as "buy one and get one free" D) creating contests with exciting prizes E) using celebrities to advertise the products Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Moderate 20

69) Which of the following marketing strategies should marketing managers focus on to manage detailed information about individual customers and carefully manage customer touchpoints to maximize customer loyalty? A) customer divestment B) customer-managed relationships C) the societal marketing concept D) partner relationship management E) customer relationship management Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Easy 70) ________ is determined by a customer's evaluation of the benefits and costs of a market offering relative to those of competing offers. A) Customer-perceived value B) Customer lifetime value C) Share of customer D) Customer-managed relationship E) Brand value proposition Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Easy 71) Anu is trying to understand the cost-benefit analysis that customers make prior to buying his firm’s products. Specifically, he wants to know why a customer would pick his firm’s product over the products of his competitors. Anu is evaluating . A) customer satisfaction B) customer relationship management C) customer-perceived value D) customer engagement E) product satisfaction Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Challenging

72) When customers purchase products they typically act on ________ as they judge values and costs. A) objective value B) perceived value C) customer lifetime value D) company image E) society's interests Answer: B AACSB: Reflective thinking Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Moderate 73) The primary key to delivering customer satisfaction is to match product performance with ________. A) the performance of competitive products B) competitive prices C) aggressive advertising D) limited customer services E) customer expectations Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Easy 74) Gerald bought a new drill from the hardware store and was really pleased with his purchase. He voluntarily left a glowing product review on the manufacturer’s website. Which of these terms describes Gerald’s behavior? A) customer-generated marketing B) partner relationship management C) customer lifetime value D) surrogate customers E) share of customer Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Easy 75) Roberto bought a new cologne that he believes has a more pleasing fragrance than the one he has been using. When he compares the new cologne with his expectations about the brand he is assessing his level of ________. 22

A) customer delight B) customer satisfaction C) customer equity D) customer-perceived value E) customer lifetime value Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Challenging 76) Which of the following strategies would a company most likely use to delight customers? A) decrease the variety of offered services B) go the ‘second mile’ to keep customers satisfied C) raise prices to establish a ‘luxury good’ reputation D) ‘fire’ unprofitable customers E) limit customer experiences with the brand Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Easy 77) Anil wants to make his firm’s brand a part of their customers’ everyday conversations and lives. Every decision he makes is with that focus in mind. What is Anil practicing? A) customer-perceived values B) customer satisficing C) customer relationship leveling D) customer-engagement marketing E) customer brand advocacy Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Moderate

78) Greater customer empowerment means that companies can no longer rely on ________. A) promoting brand-consumer interaction B) generic market offerings C) marketing by intrusion D) concepts with an outside-in perspective E) marketing by attraction 23

Answer: C AACSB: Reflective thinking Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Moderate 79) Kao Corp., a deodorant manufacturer, invited teenage girls to make an ad that would encourage other girls to buy the product. This program is an example of ________. A) societal marketing B) the production concept C) the selling concept D) partner relationship management E) customer-generated marketing Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Challenging 80) Elisandra, a marketing manager at a regional chain restaurant, has decided to organize a contest calling for customers to create commercials for the restaurant. Winning entries will be posted on the organization's home page. Elisandra's plan is an example of ________. A) customer-generated marketing B) partner relationship management C) customer lifetime value D) community development E) customer divestment Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Challenging 81) The fourth step in the marketing process is ________. A) capturing value from customers B) building profitable relationships and creating customer delight C) creating customer lifetime value D) understanding the marketplace E) designing a customer-driven marketing strategy to reap profits Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for 24

creating value for customers and capturing value from customers in return. Difficulty: Easy 82) "Losing a customer once means losing the entire stream of possible purchases that the customer would make over an extended period of patronage." This statement specifically indicates loss in terms of ________. A) customer-perceived value B) marketing offerings C) partner relationship management D) customer lifetime value E) value proposition Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Moderate 83) One danger of too much customer interaction is . A) too much control related to managing partner relationships B) selling new products on multiple platforms is confusing C) consumers can be overwhelmed with too many contacts D) converting "barnacles" to "strangers" is much harder E) capturing customer lifetime value is more difficult Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Challenging 84) The value of a customer's purchases over a lifetime of patronage for a single firm is known as ________. A) customer-perceived value B) share of customer C) customer insight D) customer lifetime value E) induced consumption Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Easy

85) Apart from retaining good customers, most marketers want to constantly increase their "share of customer." What does this mean in marketing terms? A) Marketers want to increase their market share. B) Marketers want to increase the share they get of the customer's purchasing in their product categories. C) Marketers want to diversify their operations and customize their products to cater to the entire market. D) Marketers want to continuously increase their customers' levels of satisfaction. E) Marketers want to turn satisfied customers into delighted customers. Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Moderate 86) ________ occurs when a firm works with others inside and outside of the firm to bring more value to their customers. A) Targeting new customers B) Partner relationship management C) Customer brand advocacy D) Customer-engagement marketing E) Partnership marketing Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Easy 87) Leticia is a licensed cosmetician and she helps her clients pick out the appropriate cosmetics based on their skin tones and personal preferences. Recently, she has added jewelry to her line. What is Leticia attempting to do by adding the jewelry? A) increase shared value B) increase her share of customer C) become more socially responsible D) engage in customer-generated marketing E) encourage brand loyalty Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Challenging 88) Which of the following refers to the total combined customer lifetime value of all of the 26

company's current and potential customers? A) share of customer B) marketing mix C) customer equity D) target market E) customer-perceived value Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Easy 89) In the context of customer relationship groups, a is both profitable and loyal. A) true friend B) butterfly C) stranger D) barnacle E) market maven Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Easy 90) Customers can be classified into four relationship groups based on their profitability and projected loyalty. Which customer type is associated with low profitability and very little longterm loyalty? A) barnacles B) strangers C) butterflies D) true friends E) cash cows Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Easy 91) A company should not always target all possible customers. Which kind of customer is not the most valuable to a company, but can over time, contribute to the firm's success? A) butterflies B) shooting stars C) barnacles 27

D) true friends E) strangers Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Moderate 92) Which of these things received a boost from the COVID-19 pandemic lockdown? A) in-store sales B) promotional advertising C) artificial intelligence usage D) customer-generated content E) partner relationship management Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Moderate 93) A marketer wants to increase its "share of customer." How can they accomplish this goal? A) decreasing prices B) cross-sell and up-sell to existing customers C) sending samples directly to customers D) introducing customers to "brand evangelists" E) raising prices to appear more exclusive Answer: B AACSB: Reflective thinking Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Moderate Refer to the scenario below to answer the questions 94 - 97. Carol Veldt, owner of Seagull Terrace, watched her investment grow from a small, seaside motel to a thriving year-round resort in just a few years. Atop a cliff overlooking the Maine coast, Seagull Terrace had attracted thousands of visitors during summer, but then faced a tremendous downturn in business during winter. "But, given the established industries in the nearby towns, very little year-round competition, and our close proximity to Portland," Carol added, "I couldn't understand why seasonality had to hit Seagull Terrace so hard!" So, Carol spent her first winter devising a new marketing plan. She put together a promotional 28

package designed to attract business travelers year-round. Carol's plan also involved a seasonal promotional gimmick–to be implemented from early winter to late spring–that would attract the same numbers as the large summer crowd. Her idea worked! During her second winter, Carol greeted numerous business travelers–both satisfied repeat guests as well as new guests who had been snagged by her promotional appeals. "We still have a long way to go," Carol admitted. "Our delicatessen offers entrees that are a part of the local cuisine, but we'd like to expand that. We provide health club privileges off-site, but we would like to eventually provide our own. These are goals I hope to achieve in a few years. Our first project, however, included a renovation of our guest rooms and I'm quite proud of the results." Carol then added, "Actually there are so many possibilities. With an indoor pool area, I will eventually offer weekend getaways throughout winter." 94) Carol Veldt's plan also involves a seasonal promotional gimmick that she wants to promote aggressively. This is an example of the ________ concept. A) selling B) marketing C) product D) production E) societal marketing Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Challenging 95) Renovations of the guest rooms at the Seagull Terrace and plans to add an indoor pool area are examples of the ________ concept. A) selling B) marketing C) product D) production E) societal marketing Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Challenging 96) Carol Veldt has decided to ask selected guests to participate in an extensive survey about their experience at Seagull Terrace and about their requirements in terms of amenities and cuisines. By implementing the suggestions she receives from guests, Carol would be following the ________ concept. A) production 29

B) product C) selling D) marketing E) societal marketing Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Challenging 97) How can Carol capitalize on the concept of “customer-perceived value?” Answer: Carol has done well but still does not appear to truly know her customers. She needs to spend some time learning about what features attract them the Seagull Terrace and what features she could add to enhance the overall experience. Then she can focus on learning how to attract new customers that fit the same profile. For example, she could offer discounts to repeat customers who bring a friend along or refer a friend. AACSB: Analytical thinking Skill: Application Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Challenging 98) Coronada believes in cultivating her customer base and doing whatever is necessary to make her customers happy. She believes it is much easier to retain a customer than it is to attract a new one. What is Coronada attempting to accomplish? A) build customer lifetime value B) grow her share of customer C) harvest short-term profits D) develop a sustainable marketing plan E) devise a marketing strategy Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Challenging 99) When satisfied customers talk favorably about a brand with their friends and colleagues it is known as __. A) customer relationship leveling B) customer brand advocacy C) customer-perceived value D) satisficing E) customer relationship management Answer: B 30

AACSB: Application of knowledge Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Easy 100) Which of these digital media is NOT a social media platform that marketers can use to engage customers? A) TikTok B) Facebook C) Google D) Instagram E) Twitter Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Easy 101) In today’s digital age firms need to rely more on __ instead of marketing by intrusion. A) artificial intelligence B) traditional selling techniques C) pushing consumers to act D) marketing by attraction E) marketing by extrusion Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Easy 102) Barnacles are highly loyal and highly profitable customers. Answer: FALSE AACSB: Application of knowledge Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Easy 103) Customer lifetime value is essentially the combined future value of all the firm’s expected sales. Answer: FALSE AACSB: Application of knowledge 31

Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Moderate 104) The total lifetime combined value of a firm’s customers is known as customer equity. Answer: TRUE AACSB: Application of knowledge Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Moderate 105) In customer-generated marketing, consumers play a bigger role in shaping brand experiences. Answer: TRUE AACSB: Application of knowledge Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Moderate 106) Customer-generated marketing occurs when customers play a role in shaping their own brand experiences and those of other customers. Answer: TRUE AACSB: Application of knowledge Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Easy 107) How can a firm use customer-generated marketing to increase brand awareness? List an example of a firm using this tactic. Answer: Customer-generated marketing often involves uninvited customer-to-customer exchanges and emerges organically. However, some firms have been able to generate this activity by hosting contests for new products or ideas. For example, Oreos asked consumers for new flavor ideas and the top three ideas were created and sold with consumers voting for the winner. The winner received a $500,000 cash prize. AACSB: Application of knowledge Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Moderate 108) Explain the concept of “share of customer.” 32

Answer: Share of customer refers to the fraction of a consumer’s spending that a firm is able to capture. For example, a clothing retailer might add ties and cuff links to its product mix in order to capture additional sales from the same customers. AACSB: Application of knowledge Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Moderate 109) Explain what marketers can expect from individuals in the customer relationship group classified as "butterflies." Answer: "Butterflies" are potentially profitable but not loyal. Marketers should enjoy this type of customer "for the moment" because they soon flutter off. Marketers should create profitable and satisfying transactions with "butterflies," then cease investing in them until the next time around. Marketers can expect transactions with butterflies when conditions are optimal, but they should not expect butterflies to become loyal customers. AACSB: Application of knowledge Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Moderate 110) Describe and compare the four types of customers classified by their potential profitability to an organization. Explain how an organization should manage each type of customer. Answer: The four types of customers are strangers, butterflies, true friends, and barnacles. "Strangers" have low potential profitability and loyalty. A company's offerings do not fit well with a stranger's wants and demands. Companies should not invest in building a relationship with this type of customer. Another type of customer in which a company should not invest is the "barnacle." Barnacles are highly loyal but not very profitable because there is a limited fit between their needs and the company's offerings. The company might be able to improve barnacles' profitability by selling them more, raising their fees, or reducing service to them. However, if they cannot be made profitable, they should be "fired." Like strangers, "butterflies" are not loyal. However, they are potentially profitable because there is a good fit between the company's offerings and their needs. Like real butterflies, this type of customer will come and go without becoming a permanent, loyal consumer of a company's products. Companies should use promotional blitzes to attract these customers, create satisfying and profitable transactions with them, and then cease investing in them until the next time around. The final type of customers is "true friends"; they are both profitable and loyal. There is a strong fit between their needs and the company's offerings, so the company should make continuous relationship investments in an effort to go beyond satisfying and to delight these customers. A company should try to convert true friends into customer evangelists who tell others about their good experiences with the company. AACSB: Application of knowledge Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. 33

Difficulty: Challenging 111) Explain the concept of customer equity. Answer: Customer equity is the total combined customer lifetime values of all the company’s customers. It is a measure of the future value of the firm’s customer base. AACSB: Analytical thinking Skill: Application Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Easy 112) How can a marketer increase its "share of customer"? Answer: The marketer can offer greater variety to customers; in addition, the marketer can train employees to cross-sell and up-sell in order to market more products and services to existing customers. AACSB: Reflective thinking Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Moderate 113) Define customer relationship management and explain its associated tools and levels of relationships. Answer: Customer relationship management is the process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. A company with mostly low-margin customers is likely to seek basic relationships, using brandbuilding advertising, public relations, and so on. An organization with few customers and high margins, on the other hand, will work to create full partnerships with key customers. To create stronger bonds with customers, some companies offer frequency marketing programs that reward customers who buy frequently or in substantial amounts. Other companies sponsor club marketing programs that offer members special benefits and create member communities. AACSB: Application of knowledge Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Moderate 114) Explain why the aim of customer relationship management is to create not just customer satisfaction, but also customer delight. Answer: Customer satisfaction cannot be taken for granted. Because brand loyalty is dependent upon strong customer satisfaction, companies strive to retain, satisfy, and even delight current customers. Outstanding marketing companies go out of their way to keep important customers satisfied. Most studies show that higher levels of customer satisfaction lead to greater customer loyalty, which in turn results in better company performance. Firms create customer delight by promising only what they can deliver and then delivering more than what they promised. They 34

also create emotional relationships with key customers. Delighted customers make repeated purchases and become willing marketing partners and "customer evangelists" who tell other potential customers about their positive experiences with the product. AACSB: Written and oral communication Skill: Concept Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Moderate 115) Marketers use mobile channels for several purposes. Which of the following is LEAST likely to be one of those purposes? A) Enrich the brand experience. B) Send billing statement. C) Stimulate immediate buying. D) Make shopping easier. E) Boost sampling. Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Difficulty: Easy 116) The technology that involves machines that think and learn like humans is known as A) big data B) analytics C) artificial intelligence D) the Internet of things E) digital thinking Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Difficulty: Easy 117) Amazon Echo's Alexa is an example of A) desktop computing B) data analytics C) the worldwide web D) artificial intelligence E) digital learning Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 1.5: Describe the major trends and forces that are changing the marketing 35

landscape in this age of relationships. Difficulty: Easy 118) Government agencies design ________ to encourage energy conservation and discourage smoking, excessive drinking, and drug use. A) club marketing programs B) social marketing campaigns C) consumer-generated marketing campaigns D) ambush marketing campaigns E) frequency marketing programs Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Difficulty: Easy 119) As part of the rapid globalization of today's economy, companies are selling more domestically produced goods in international markets and ________. A) taking a local view of their industry B) purchasing more supplies abroad C) reducing competition within their industry D) downplaying concerns for social responsibility E) competing solely in traditional marketplaces Answer: B AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Difficulty: Moderate 120) Iceco Inc., an ice cream manufacturing company, encourages all stakeholders, including the top management and all employees, to consider individual and community welfare in their dayto-day decisions. This action undertaken by Iceco reflects ________. A) environmentalism B) social responsibility C) the selling concept D) partner relationship management E) marketing myopia Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Difficulty: Challenging 36

121) Marketing in the non-profit sector is applied in all but which of these ways? A) to enhance their images B) to attract memberships C) to publicize the organization's supporters D) to design social marketing campaigns for specific causes E) to encourage donor support Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Difficulty: Moderate 122) A museum targeting different demographic groups to increase attendance is an example of ________. A) affinity marketing B) not-for-profit marketing C) societal marketing D) evangelism marketing E) affiliate marketing Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Difficulty: Moderate 123) Your state's department of education has budgeted a significant amount of money for a radio, print, television, and online advertising campaign emphasizing the long-term benefits, both educationally and professionally, of reading every day. This is an example of a(n) ________ campaign. A) perspective marketing B) social marketing C) inbound marketing D) consumer-generated marketing E) affiliate marketing Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Difficulty: Moderate 124) Many organizations use multiple social media, such as Facebook, Twitter, Instagram, and YouTube. What is the primary reason a company would use multiple social media? A) entice customers to one of the social media sites 37

B) present a carefully integrated message to fans and customers C) improve its "hit" count D) appeal to new customers E) increase its prices because it is more well-known Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Difficulty: Challenging 125) When a firm, such as Ben & Jerry’s, is civic minded and socially responsible they are practicing __. A) pure capitalism B) cronyism C) caring capitalism D) prosperity marketing E) mission-centered marketing Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Difficulty: Easy 126) Which of these trends is NOT one of the major trends shaping marketing? A) Rapid globalization B) Explosive growth in digital technology C) Growth of not-for-profit marketing D) Renewed focus on selling E) Sustainable marketing Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Difficulty: Easy 127) Which of these is NOT one of the ways firms use big data in their marketing efforts? A) To gain deep customer insights B) To create personalized marketing efforts C) To increase the speed of marketing analysis D) To improve customer engagement E) To provide better customer service Answer: C AACSB: Application of knowledge 38

Skill: Concept Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Difficulty: Moderate

128) Many company and brand websites also serve as online brand communities, where customers can congregate and exchange brand-related interests and information. Answer: TRUE AACSB: Integration of real-world business experiences Skill: Concept Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Difficulty: Moderate 129) The Internet of Things is a new product created by multiple companies working together. Answer: FALSE AACSB: Application of knowledge Skill: Concept Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Difficulty: Easy 130) Organizations choose to use only a few of the available online and social media. Using multiple social media results in confused fans. Answer: FALSE AACSB: Application of knowledge Skill: Application Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Difficulty: Challenging 131) Social media sites with small audiences, such as Birdpost.com, can be as effective in creating customer engagement as sites with large audiences, such as Pinterest. Answer: TRUE AACSB: Analytical thinking Skill: Application Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Difficulty: Moderate 132) McDonald’s is an American restaurant with limited global exposure. Answer: FALSE AACSB: Application of knowledge Skill: Application 39

Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Difficulty: Easy 133) What is “not-for-profit marketing” and why has it expanded in recent years? Answer: Not-for-profit marketing is used by various non-profit organizations such as universities, foundations, hospitals, museums, and other organizations to raise funds. This sector has grown significantly as the competition for donor dollars and grant money has increased. AACSB: Application of knowledge Skill: Application Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Difficulty: Easy 134) What do marketers mean when they mention the “Internet of Things?” Answer: The Internet of Things refers to the current level of digital access where a significant percentage of the world’s population is now online. Almost 5 billion people are now online and have the ability to research products, search for products, and order them online. Ninety-seven percent of Americans are digitally connected through smartphones and computers. AACSB: Analytical thinking Skill: Application Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Difficulty: Easy 135) Explain how the growth of digital technology has transformed the way in which companies conduct business today. Answer: At the most basic level, marketers set up company and brand Web sites that provide information and promote the company's products. Many of these sites also serve as online brand communities, where customers can congregate and exchange brand-related interests and information. Beyond brand Web sites, most companies are also integrating social and mobile media into their marketing mixes. AACSB: Analytical thinking Skill: Concept Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Difficulty: Moderate 136) How are local retailers affected by global competition? Answer: A local retailer might have global suppliers and customers. The retailer's goods may come from abroad, or components of those goods may be produced or assembled abroad. In addition, a local retailer may also sell goods over the Internet to international customers. AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 1.5: Describe the major trends and forces that are changing the marketing 40

landscape in this age of relationships. Difficulty: Moderate 137) Discuss the challenges and advantages of new communication technologies for marketers as they work to build relationships with their customers. Answer: Through the Internet and related technologies, people can now interact in direct and surprisingly personal ways with large groups of others, from neighbors within a local community to people across the world. With communication technologies such as e-mail, blogs, Web sites, online communities, and online social networks, today's marketers incorporate interactive approaches that help build targeted, two-way customer relationships. Marketers can create deeper consumer involvement and a sense of community surrounding a brand, making a brand a meaningful part of consumers' conversations and lives. However, while new communication tools create relationship-building opportunities for marketers, they also create challenges. They give consumers a greater voice, and therefore greater power and control in the marketplace. In fact, the marketing world is beginning to embrace customer-managed relationships. Today's consumers have more information about brands than ever before, and they have a wealth of platforms for airing and sharing their brand views with other consumers. This benefits companies when views of its products are positive, but can be damaging when customers share stories of negative experiences with a company's products. AACSB: Analytical thinking Skill: Concept Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Difficulty: Moderate 138) Discuss how artificial intelligence is currently used in marketing. Answer: Artificial intelligence (AI) is being used to analyze data in real time and use the insights gleaned from this analysis to engage customers and assist them in the buying process. AI is used to provide advice and product recommendations. Visible uses of AI include Apple’s Siri and Amazon Echo’s Alexa. AACSB: Analytical thinking Skill: Concept Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Difficulty: Moderate 139) List some of the digital trends shaping the way marketers interact with customers. Answer: The digital world is exploding with social media applications, mobile marketing tools, and numerous blog sites where marketers can reach consumers. AI can be used to rapidly analyze data and interact with customers and potential customers seeking advice and product recommendations. AACSB: Analytical thinking Skill: Concept Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Difficulty: Moderate 41

140) How do today’s consumers impact the firm’s social responsibility efforts? Answer: Today’s consumers are more focused on sustainability and social responsibility than in the past. Experts anticipate this focus will continue to grow. Consumer cast their dollar votes for products and firms that are more socially responsible and have numerous outlets to express displeasure if firms are not considering the societal impact of their actions. This consumer pressure is driving more firms to behave responsibly. AACSB: Analytical thinking Skill: Concept Objective: LO 1.5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Difficulty: Challenging

Quantitative Questions 1) Amazon accounts for 41% of all online sales in the United States. How much were total U.S. online revenues in 2021 if Amazon’s revenues for that year were $470 billion? A) $192.7 billion B) $1,146.3 billion C) $662.7 billion D) $1,625.7 billion E) $885.4 Answer: B; You can compute this by dividing Amazon’s revenue by .41, so $470 billion/.41 = $1,146.3. AACSB: Analytical thinking Skill: Application Objective: LO 1.1: Define marketing and outline the steps in the marketing process. Difficulty: Moderate 2) Amazon’s revenue averages $893,873 every minute of every day. Approximately how much revenue does Amazon generate every 24 hour period? A) $650 million B) $1.1 billion C) $1.3 billion D) $470 million E) $893 billion Answer: C; The first step is to determine the total number of minutes in a day. So, 60 minutes x 24 hours = 1,440 minutes per day x $893,873 = $1,287,177,120 per day, or almost $1.3 billion per day. AACSB: Analytical thinking Skill: Application Objective: LO 1.1: Define marketing and outline the steps in the marketing process. Difficulty: Moderate 3) Assume Facebook computes the value of a single user to be $1.35 each per month. How much is the value of Facebook’s monthly 2.9 billion member user base? 42

A) $2.915 billion B) $2.148 billion C) $4.576 billion D) $7.981 billion E) $3.915 billion Answer: E; You compute the value by multiplying $1.35 x 2.9 billion users = $3.915 billion. AACSB: Analytical thinking Skill: Application Objective: LO 1.1: Define marketing and outline the steps in the marketing process. Difficulty: Easy 4) Ninety-four percent of Americans believe it is dangerous to send a text while driving. How many adults recognize the danger of texting and driving if there are 209.1 million adults living in the United States? A) 196.6 million B) 209.1 million C) 222.4 million D) 334.1 million E) 287.3 million Answer: A; You compute the answer by multiplying 0.94 x 209.1 million = 196.6 million AACSB: Analytical thinking Skill: Application Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Easy 5) Mahali Mzuri luxury tent accommodations during the low season cost $945 per night per person. If they are at capacity of 24 people a night how much revenue will they generate per week? A) $6,615 B) $45,360 C) $22,680 D) $158,760 E) $201,540 Answer: D; Compute this by $945 per person x 24 people x 7 days = $158,760 in weekly revenue. AACSB: Analytical thinking Skill: Application Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Moderate 6) Firm XYZ estimates the size of their target market in dollar value is about $435 million. They believe they can bump their market share to 12% by next year. What is the size of Firm XYZ’s market? A) $2.4 million 43

B) $12.7 million C) $52.2 million D) $59.1 million E) $523.5 million Answer: C; Compute this by multiplying $435 million x .12 = $52.2 million AACSB: Analytical thinking Skill: Application Objective: LO 1.2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Difficulty: Easy 7) Jared’s annual income is $1,872,000 and he splurged and purchased a Patek Philippe watch for $322,000. What percentage of his income did he spend on the watch? A) 32.2% B) 17.2% C) 9.1% D) 43.4% E) 55.8% Answer: B; You compute this by dividing the cost of the watch by his annual income. So, $322,000/$1,872,000 = .172, or 17.2% AACSB: Analytical thinking Skill: Application Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Moderate 8) Firm XYZ spent $4.2 million on advertisement to reach 21 million people using a high profile time slot on television. How much did the ad cost per viewer? A) 42 cents per viewer B) $2 per viewer C) $20 per viewer D) 20 cents per viewer E) $2.10 per viewer Answer: D; You divide the cost by the number of viewers to get the cost per viewer. So, $4.2 million/21 million = .20, or 20 cents per viewer. AACSB: Analytical thinking Skill: Application Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Moderate 9) Firm XYZ created a competition for the best customer-generated marketing idea for their product. The prize was a $500,000 award with the winner receiving the entire amount. However, after judging, it was determined to be a three way tie. How much did each winner receive? A) $166,667 each B) $250,000 each 44

C) $500,000 each D) $125,000 each E) $100,000 each Answer: A; $500,000/3 winners = $166,667 each AACSB: Analytical thinking Skill: Application Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Easy 10) What is the customer lifetime value of someone who spends an average of $125 week and will be a good customer for 15 years? A) $82,200 B) $19,500 C) $97,500 D) $6,500 E) $12,500 Answer: C; $125 week x 52 weeks x 15 years = $97,500 AACSB: Analytical thinking Skill: Application Objective: LO 1.4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Difficulty: Moderate

Principles of Marketing, 19e, Global Edition (Kotler) Chapter 2 Company and Marketing Strategy: Partnering to Build Customer Engagement, Value, and Relationships 1) ________ is a description of the organization’s purpose—what it wants to accomplish in the larger environment. A) Benchmarking B) A SWOT analysis C) Market segmentation D) A mission statement E) A strategic plan Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Easy 2) Which of the following is true with regard to strategic planning? A) At the corporate level, the company starts the strategic planning process by determining what portfolio of businesses and products is best for the company. B) A strategic plan deals with a company's short-term goals. C) The focus of strategic planning is to define a game plan for long-run survival and growth. D) The strategic plan is a statement of an organization's purpose. E) Strategic planning involves identifying segments of consumers with identical preferences. Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Moderate 3) CVS Health’s overall aim is to be a “pharmacy health care innovation company,” one that is “helping people on their way to better health.” Its marketing strategies and programs must support this aim. This is an example of a A) vision statement B) mission statement C) marketing mix D) value proposition E) strategic planning statement Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Moderate 4) Mission statements should ________ and be defined in terms of ________. 1 Copyright © 2024 Pearson Education Ltd. All Rights Reserved.

A) be technology oriented; meeting the self-actualization needs of customers B) be product oriented; satisfying the esteem needs of customers C) embody the company's short-term plans; current opportunities D) be market oriented; satisfying basic customer needs E) address sales and profits; the net return on investments Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Moderate 5) More than 70 years ago, IKEA founder Ingvar Kamprad developed the “IKEA concept.” He was a native of Småland, Sweden, where the soil was poor and the people had a reputation for working hard, living frugally, and making the most of limited resources. IKEA reflects those characteristics—“offering a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them.” This ____________ forms the foundation for IKEA’s entire operating model, and it provides the guiding light for IKEA’s culture and values. A) mission statement B) profit statement C) sustainability plan D) market segmentation strategy E) employee reward plan Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Easy 6) In its quest to improve people’s lives, IKEA obsesses over ________. A) its technology B) the customer experience C) the training of its employees D) return on investments E) new products Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Moderate

7) A company’s mission should ____be stated as making more sales or profits. A) not B) sometimes C) always D) occasionally E) frequently Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Easy 8) Which of the following companies has a market-oriented business definition? A) An electronics company, whose business definition is: "We produce microchips." B) A hotel, whose business definition is: "We rent rooms." C) An apparel company, whose business definition is: "We make and sell women's clothing." D) A cosmetic company, whose business definition is: "We sell hope and self-esteem." E) A pizzeria, whose business definition is: "We sell the world's most delicious thin-crust pizzas." Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Moderate 9) Which of the following is NOT an example of product-oriented mission statements? A) "We are an online library." B) "We run theme parks." C) "We sell athletic shoes." D) "We sell memorable experiences." E) "We rent hotel rooms." Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Moderate 10) “We sell lifestyle and self-expression by helping customers to unlock their beauty potential.” This is Sephora’s __________. A) product-oriented definition B) SWOT analysis C) market-oriented definition D) market-segmentation plan E) strategic planning statement Answer: C AACSB: Analytical thinking 3 Copyright © 2024 Pearson Education Ltd. All Rights Reserved.

Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Easy 11) Strategic planning is the process of developing and maintaining a profitable strategic fit between an organization’s goals and capabilities and its changing marketing opportunities. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Moderate 12) A mission statement is a document embodying an organization's short-term goals. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Easy 13) Mission statements should be product oriented. Answer: FALSE AACSB: Application of knowledge Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Easy 14) "At Trader Joe's, our mission is to provide all our customers the best food and beverage values to be found anywhere, and the information to make informed buying decisions." This is a product-oriented business definition. Answer: FALSE AACSB: Analytical thinking Skill: Application Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Moderate 15) How does strategic planning benefit companies? Answer: Strategic planning sets the stage for all other planning in the firm. The strategic plan involves adapting the firm to take advantage of opportunities in its constantly changing environment. AACSB: Analytical thinking; Reflective thinking Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Moderate 16) Should mission statements be product or technology oriented? 4 Copyright © 2024 Pearson Education Ltd. All Rights Reserved.

Answer: Mission statements should be market oriented and defined in terms of satisfying customer and societal needs. Products and technologies eventually become outdated, but market and societal needs may last much longer, even forever .AACSB: Application of knowledge Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Easy 17) Define strategic planning. Discuss the steps involved. Answer: The process of developing and maintaining a strategic fit between the organization's goals and capabilities and its marketing opportunities is called strategic planning. At the corporate level, the company starts the strategic planning process by defining its overall purpose and mission. This mission is then turned into detailed supporting objectives that guide the entire company. Next, headquarters decides what portfolio of businesses and products is best for the company and how much support to give each one. In turn, each business and product develops detailed marketing and other departmental plans that support the company-wide plan. Thus, marketing planning occurs at the business-unit, product, and market levels. It supports company strategic planning with more detailed plans for specific marketing opportunities. AACSB: Application of knowledge Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Moderate 18) The collection of businesses and products that make up a company is called a ______. A) cash cow B) marketing mix C) market segment D) business portfolio E) product line Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy 19) You probably know Johnson & Johnson for its many iconic consumer health brands, maybe BAND-AID brand adhesive bandages, Johnson’s baby shampoo, or Tylenol pain reliever. But did you know that the substantial bulk of J&J’s revenue comes from its pharmaceuticals and medical devices businesses? This is an example of (a) _______. A) business portfolio B) market segmentation C) SWOT analysis D) mass marketing E) strategic planning Answer: A AACSB: Analytical thinking 5 Copyright © 2024 Pearson Education Ltd. All Rights Reserved.

Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate 20) ______refers to the process by which management evaluates and plans for the future of the products and businesses that make up the company. A) Strategic business unit (SBU) B) SWOT analysis C) Strategic planning D) Portfolio analysis E) Growth-share matrix Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy 21) During portfolio analysis, a company ________ after identifying the key businesses that make up the company. A) formulates a short-term marketing plan B) assesses the attractiveness of its various SBUs C) assesses its strengths and weaknesses D) performs a SWOT analysis E) assesses the effectiveness of its various channel intermediaries Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy 22) A portfolio-planning method that evaluates a company’s strategic business units (SBUs) in terms of market growth rate and relative market share.is called (a) _______ A) portfolio analysis B) strategic plan C) growth-share matrix D) profit statement E) SWOT analysis Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate

Refer to the scenario below to answer questions 23-25. Carolina crafted a new kind of dog food that was very healthy. She used only high-quality organic ingredients. She sourced her ingredients from non-GMO providers and made sure that none of her suppliers used child labor. Carolina carefully selected packaging materials that were environmentally friendly and completely compostable. She made sure that the packages of dog food were easy to open without having to use a scissors or knife. Carolina researched the prices on competing dog food brands and offered an introductory offer at a lower price. Carolina advertised her products in health-food stores and in upscale retailers such as Whole Foods. At first sales were robust. Dog owners were willing to give the product a try. They responded favorably to Carolina’s effort to offer a product that was healthy for dogs and “healthy” for the planet. However, after the initial sales period, Carolina saw that sales of her product declined. She increased her advertising, but sales continued to fall. When Carolina conducted an online survey about her dog food, she learned to her surprise that the dogs didn’t like the taste and wouldn’t eat the dog food. 23) According to the Boston Consulting Group approach, Carolina’s product was a _______. A) dog B) star C) question mark D) cash cow E) domino Answer: A AACSB: Application of Knowledge Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate 24) Carolina’s mission should focus on customer benefits. In this scenario, who is the target customer? A) the health-food store B) the dogs C) the suppliers of organic ingredients D) the packaging company E) the pet owner Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate 25) What action should Carolina take? Answer: Carolina needs to adjust the flavor and texture of her product to appeal the end-user of the product---the dogs. If the dogs won’t eat the dog food, then the product will fail even though it is healthy, priced competitively, well-promoted, and environmentally friendly. Carolina needs 7 Copyright © 2024 Pearson Education Ltd. All Rights Reserved.

to test market different flavors to see what appeals to the dogs. AACSB: Application of knowledge Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate 26) In the BCG matrix approach, high-growth, high-share businesses or products are called _____. A) market segments. B) question marks C) stars D) dogs E) cash cows Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy 27) ________ are low-growth, high-share businesses/products that need less investment to hold their market share. A) Stars B) Cash cows C) Question marks D) Dogs E) Bears Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy 28) _____can represent significant opportunity costs by absorbing managerial energy and attention that could be used more profitably elsewhere. A) Cash cows B) Dogs C) Stars D) Question marks E) Advertising Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy 8 Copyright © 2024 Pearson Education Ltd. All Rights Reserved.

29) Company growth by increasing sales of current products to current market segments without changing the product is called: A) market skimming B) market penetration C) market development D) product line development E) portfolio analysis Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy 30) Sunshine, a well-known coffee shop chain in South America, recently opened 500 stores to cater to its rapidly increasing number of patrons. This exemplifies ________. A) product diversification B) market skimming C) market share D) market penetration E) product development Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy 31) _______require a lot of cash to hold their share, let alone increase it. Management has to decide if it should try to build phased or out these products. A) Cash cows B) Question marks C) Stars D) SBUs E) Dogs Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy 32) IKEA is a “global home furnishing brand that brings affordability all over the world. IKEA’s expansion into China shows that the company is most likely following a ________ strategy. A) local marketing B) market development C) diversification D) product adaptation E) product development 9 Copyright © 2024 Pearson Education Ltd. All Rights Reserved.

Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate 33) Starbucks developed Via instant coffee, and it sells its coffees and Tazo teas in K-Cup packs that fit Keurig at-home brewers. This is an example of ________. A) market penetration B) product development C) mass marketing D) market development E) product adaptation Answer: B AACSB: Application of Knowledge Skill: Application Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy Refer to the scenario below to answer questions 34-36. The managers of Alfredo’s Pizza, a popular pizzeria in New York City, have been increasingly encouraging senior citizens to visit the pizzeria’s numerous outlets spread across the city. Anticipating a rise in the population of senior citizens in the area, the management of Alfredo’s Pizza is seeking to tap into this promising segment that consists of retired, affluent consumers. Alfredo’s serves the same types of pizza that family members created decades ago. Customers come to Alfredo’s to eat the well-known, delicious pizza with a special crust. There is no need for Alfredo’s to offer new kinds of pizza because customers come from all over Manhattan for Alfredo’s classic pizza. 34) In this instance, the managers of Alfredo’s Pizza are anticipating company growth through ________. A) market development B) product development C) mass customization D) niche marketing E) product differentiation Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate 35) The one outstanding ingredient in Alfredo’s Pizza is its special pepperoni. Alfredo’s is most likely following a ________ strategy. 10 Copyright © 2024 Pearson Education Ltd. All Rights Reserved.

A) market penetration B) product differentiation C) downsizing D) diversification E) marketing development Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate 36) If Alfredo’s decides to sell frozen pizzas to its New York City customers, this would be an example of ________. Answer: product development. Explanation: Alfredo’s is experiencing company growth by offering modified or new products to current market segments. This is product development. Alfredo is still appealing to his current customers in Manhattan, and is not diversifying into markets. AACSB: Analytical thinking Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate 37) Sunny Brews is a coffeehouse chain based in Boston. It recently introduced Eva, a mild roast, which became immensely popular. This exemplifies ________. A) benchmarking B) diversification C) mass customization D) product development E) downsizing Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate 38) Starbucks continues to expand it lines of ready-to-drink beverages sold in grocery stores, such as Starbucks Coffee with Essential Vitamins, Starbucks Cold Brew Concentrate, and Starbucks Coffee with 2x the Caffeine. This is an example of ________. A) mass marketing B) strategic planning C) market segmentation D) product development E) partner relationship management 11 Copyright © 2024 Pearson Education Ltd. All Rights Reserved.

Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate 39) Starbucks Reserve brand, with Starbucks Reserve Roasteries and Starbucks Reserve Bars features high-end immersive experiences. Within its Starbucks Reserve locations, the company is opening Princi Bakery and Café shops, offering artisan Italian food— from fresh-baked bread and pastries to flaky cornetti to focaccia sandwiches—based on the recipes of famed Italian baker Rocco Princi. Starbucks is also experimenting with stand-alone boutique Princi bakery stores, taking the company beyond coffee and snack shops. This is an example of ________. A) portfolio analysis B) market segmentation C) value chain development D) diversification E) product differentiation Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate 40) The ________is a set of internal departments that carry out value-creating activities to design, produce, market, deliver, and support a firm’s products A) growth-share matrix B) product line C) value chain D) supply chain E) product/market expansion grid Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate Refer to the scenario below to answer questions 41-44. Fun-Spot Fun Park began as a small amusement park in 1985. With nothing more than a merrygo-round, a slide, pony rides, and an ice cream stand, Fun-Spot grew into a popular family attraction with 20 rides, a restaurant, and an outdoor performing arts theater. "My wife, Gail, and I didn't know what we were getting into," commented Ron Hart, the owner. "We just knew that weekenders coming to the lakes in our rural area represented an untapped market." 12 Copyright © 2024 Pearson Education Ltd. All Rights Reserved.

Today, thousands of visitors flock to Fun-Spot: families, children of all ages, and even senior citizens who enjoy strolling through the gardens and the arbors. "There's something here for everyone," Gail Hart said with a smile. "Dozens of companies hold annual company picnics here. We have welcomed class field trips. And we even had one wedding here at the park!" "Here's the funny thing," Ron chimed in. "We really don't know why we've been so successful. There is nothing else like Fun-Spot Fun Park in the area. We were just lucky." "I think it's the ambience of the park that has brought so many visitors," Gail added. "We provide a 'total package' of entertainment. Plus, we try to change our rides and various attractions from time to time for variety." Ron and Gail Hart admitted that making every visitor happy is a priority. "That has always been our philosophy," they said. "Like the park's motto at the entrance reads, 'We're here to make you happy!' And we've always been able to deliver on that because we've never allowed ourselves to grow too big too quickly." 41) Fun-Spot's mission is ________. A) product oriented B) technology oriented C) market oriented D) design oriented E) narrowly focused on profits Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate 42) Fun-Spot Fun Park represents a high-growth, high-share business. According to the BCG matrix, it can be classified as a ________. Answer: Star. Explanation: The growth-share matrix places SBUs into four quadrants. Since Fun-Spot Park is a high-growth, high-share business, it would be classified as a star according to the BCG matrix. Stars often need heavy investments to finance their rapid growth. Eventually their growth will slow down, and they will turn into cash cows. AACSB: Analytical thinking Skill: Application Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy 43) Ron and Gail plan to lower Fun-Spot's prices in an effort to encourage customers to stay longer, visit more often, and spend more money during each visit. What type of strategy are Ron and Gail planning? A) market penetration B) market development C) product development D) product adaptation 13 Copyright © 2024 Pearson Education Ltd. All Rights Reserved.

E) diversification Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate 44) Ron and Gail, owners of Fun-Spot, strive to provide new offerings and entertainment options for their visitors. This type of strategy can be best described as ________. A) market penetration B) market development C) product development D) niche marketing E) diversification Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate 45) Companies must carefully prune, harvest, or divest brands or businesses that no longer fit their overall strategy Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy 46) Many companies have dropped formal matrix-based methods in favor of customized approaches that better suit their specific situations. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate 47) Market development refers to identifying and developing new markets for its current products. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy

48) Starbucks’ stores in China have grown from 800 to 6,000 in the past eight years, with one new store opening every 15 hours. This is an example of product development. Answer: FALSE AACSB: Analytical thinking Skill: Application Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate

49) Company growth through downsizing involves harvesting unprofitable products. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy 50) What are the limitations of the SBU approach? Answer: Centralized approaches have limitations. They can be difficult to undertake, timeconsuming, and costly to implement. And they may not apply well or easily to certain types of markets facing structural changes or disruptions. AACSB: Application of knowledge Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy 51) What is a dog and what strategy should a company take? Answer: Dogs are low-growth, low-share businesses and products. They may generate enough cash to just maintain themselves but do not promise to be large sources of cash. Even if they break even financially, dogs can represent significant opportunity costs by absorbing managerial energy and attention that could be used more profitably elsewhere. The company should take decisive action concerning its dogs. AACSB: Application of knowledge Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate 52) Define diversification. Answer: Diversification refers to company growth through starting up or acquiring businesses outside the company’s current products and markets. AACSB: Application of knowledge Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy 53) What is a business portfolio? What are the steps involved in business portfolio planning? Answer: A business portfolio is the collection of businesses and products that make up a company. Business portfolio planning involves two steps. First, the company must analyze its current business portfolio and determine which businesses should receive more, less, or no investment. Second, it must shape the future portfolio by developing strategies for growth and downsizing. AACSB: Application of knowledge Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate 54) What is a growth-share matrix? Discuss the BCG growth-share matrix. 16 Copyright © 2024 Pearson Education Ltd. All Rights Reserved.

Answer: The growth-share matrix is a portfolio-planning method that evaluates a company's SBUs in terms of market growth rate and relative market share. Using the now-classic Boston Consulting Group (BCG) approach, a company classifies all its SBUs according to the growthshare matrix. On the vertical axis, market growth rate provides a measure of market attractiveness. On the horizontal axis, relative market share serves as a measure of company strength in the market. The growth-share matrix defines four types of SBUs: 1. Stars are high-growth, high-share businesses or products. They often need heavy investments to finance their rapid growth. Eventually their growth will slow down, and they will turn into cash cows. 2. Cash cows are low-growth, high-share businesses or products. These established and successful SBUs need less investment to hold their market share. Thus, they produce a lot of the cash that the company uses to pay its bills and support other SBUs that need investment. 3. Question marks are low-share business units in high-growth markets. They require a lot of cash to hold their share, let alone increase it. Management has to think hard about which question marks it should try to build into stars and which should be phased out. 4. Dogs are low-growth, low-share businesses and products. They may generate enough cash to maintain themselves but do not promise to be large sources of cash. AACSB: Application of knowledge Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy 55) What are some of the problems associated with matrix approaches? Answer: The BCG and other formal methods revolutionized strategic planning. However, such centralized approaches have limitations: They can be difficult, time-consuming, and costly to implement. Management may find it difficult to define SBUs and measure market share and growth. In addition, these approaches focus on classifying current businesses but provide little advice for future planning. AACSB: Analytical thinking Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate 56) Marketing plays a key role in the company's strategic planning in all of these ways EXCEPT ________. A) providing input to identify attractive market opportunities B) designing new products from scratch C) creating customer value and building profitable relationships with customer groups D) designing strategies for reaching a unit's objective E) providing a guiding philosophy Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 2.3: Explain marketing's role in strategic planning and how marketing works with its partners to create and deliver customer value. Difficulty: Easy 17 Copyright © 2024 Pearson Education Ltd. All Rights Reserved.

57) Subway’s finely tuned__________ consistently delivers fresh, fast, and tasty made-to-order sandwiches at affordable prices. Subway is effective only to the extent that it successfully partners with its franchisees, suppliers, and others to jointly carry out its “Make It What You Want” positioning promise. A) channel of intermediaries B) external value stream C) demand chain D) value delivery network E) supplier chain Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 2.3: Explain marketing's role in strategic planning and how marketing works with its partners to create and deliver customer value. Difficulty: Easy Refer to the scenario below to answer questions 58-60. Phil bought his first new Prius. He could afford a Tesla, but he chose the Prius. He took delivery of his brand-new car and started to drive it home enjoying the new-car smell of the interior. On the interstate he noticed the lights on the dashboard, the nicely designed cup holder, that popped out of the center console, he tried all of these with pleasure. On a whim he turned on the radio. His favorite classical music station came on with splendid sound that filled the entire interior of the car. Phil pushed the second button. It was his favorite news outlet. The third button brought his favorite talk station. The fourth button was set to his daughter’s favorite rock station. In fact, every button was set to his specific tastes. Phil knew the car was smart, but did it have a crystal ball? The mechanic at Prius had noted the radio settings on his trade-in and programmed them into the new Prius. Phil was delighted. This was his car now. No one told the mechanic to do this, but it was simply part of the Prius philosophy. Delight a customer and continue to delight a customer, and you will have a customer for life. What the mechanic did cost the company nothing. Yet it solidified the relationship, and Phil recommended buying a Prius to his neighbor. 58) Phil benefitted from the________________. A) company's value chain B) supply chain C) independent subsidiary of the company D) the company’s product development E) portfolio analysis Answer: A AACSB: Application of Knowledge Skill: Application Objective: LO 2.3: Explain marketing's role in strategic planning and how marketing works with its partners to create and deliver customer value. 18 Copyright © 2024 Pearson Education Ltd. All Rights Reserved.

Difficulty: Moderate 59) Phil’s enjoyment of his new Prius results from the company’s ________. A) market penetration B) product development C) product orientation D) marketing orientation E) business portfolio Answer: D AACSB: Application of Knowledge Skill: Concept Objective: LO 2.3: Explain marketing's role in strategic planning and how marketing works with its partners to create and deliver customer value. Difficulty: Moderate 60) What does Phil’s experience demonstrate? Answer: Phil’s experience shows that creating a positive experience for the customer can build a profitable relationship with key customer segments and lead to future sales. AACSB: Application of Knowledge Skill: Concept Objective: LO 2.3: Explain marketing's role in strategic planning and how marketing works with its partners to create and deliver customer value. Difficulty: Moderate 61) The marketing concept focuses on creating customer value and building profitable relationships with key customer segments Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 2.3: Explain marketing's role in strategic planning and how marketing works with its partners to create and deliver customer value. Difficulty: Easy 62) Customer engagement and value are the key ingredients in the marketer’s formula for success. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 2.3: Explain marketing's role in strategic planning and how marketing works with its partners to create and deliver customer value. Difficulty: Easy 63) Which department is responsible for creating customer value? Answer: Engaging customers today requires a whole-company commitment. Marketers can play a key role in getting all departments to “think consumer” and developing a smoothly 19 Copyright © 2024 Pearson Education Ltd. All Rights Reserved.

functioning value chain. Success depends on how well each department performs its work of adding customer value. AACSB: Application of knowledge Skill: Concept Objective: LO 2.3: Explain marketing's role in strategic planning and how marketing works with its partners to create and deliver customer value. Difficulty: Moderate 64) Why is partner relationship management an important as part of the value chain? Answer: Marketers alone cannot produce superior value for customers. Marketers must practice partner relationship management, working closely with partners in other departments to form an effective value chain that serves the customer. And they must also partner effectively with other companies in the marketing system to form a competitively superior value delivery network. AACSB: Analytical thinking Skill: Concept Objective: LO 2.3: Explain marketing's role in strategic planning and how marketing works with its partners to create and deliver customer value. Difficulty: Moderate 65) What is a value chain? Answer: A Value chain is the set of internal departments that carry out value-creating activities to design, produce, market, deliver, and support a firm’s products. AACSB: Analytical thinking Skill: Concept Objective: LO 2.3: Explain marketing's role in strategic planning and how marketing works with its partners to create and deliver customer value. Difficulty: Easy 66) A group of consumers who are expected to respond in a similar way to a given set of marketing efforts is a ____________ A) marketing strategy B) growth matrix C) marketing mix D) market segment E) value chain Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence them. Difficulty: Easy

67) Which of the following is NOT an element of the marketing mix? A) place B) price C) promotion D) product E) penetration Answer: E AACSB: Application of knowledge Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence them. Difficulty: Easy 68) Which of the following defines the company’s overall mission and objectives? A) portfolio analysis B) market segmentation C) strategic plan D) marketing mix E) value chain Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence them. Difficulty: Easy 69) To find the best marketing strategy and mix, the company engages in all of the following EXCEPT ______. A) marketing analysis B) planning C) implementation D) control E) innovation Answer: E AACSB: Application of knowledge Skill: Concept Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Easy 70) The Texas T-Shirt Company sells t-shirts with the logos of the high schools in Odessa, Texas. This is a way to group consumers based on ___________factors. A) demographic B) geographic 21 Copyright © 2024 Pearson Education Ltd. All Rights Reserved.

C) psychographic D) behavioral E) biographic Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Moderate 71) Each company must divide up the total market, choose the best segments, and design strategies for profitably serving chosen segments. This process involves all of the following EXCEPT ______. A) market segmentation B) market targeting C) differentiation D) price discrimination E) positioning Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence them. Difficulty: Easy 72) Consumers who care mainly about price and operating economy make up a ________. A) marketing mix B) market segment C) value chain D) product group E) portfolio Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence them. Difficulty: Easy 73) It would be difficult to make one car model that was the first choice of all consumers. Companies should focus their efforts on meeting the distinct needs of ______. A) suppliers B) new customers C) marketing intermediaries D) individual market segments 22 Copyright © 2024 Pearson Education Ltd. All Rights Reserved.

E) SBUs Answer: D AACSB: Application of knowledge Skill: Application Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence them. Difficulty: Moderate 74) A company should ______segments in which it can profitably generate the greatest customer value and sustain it over time. A) downsize B) diversify C) target D) deliver E) avoid Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence them. Difficulty: Easy 75) In the car market, there are consumers who want the biggest, most comfortable car regardless of price. This shared response based on shared needs of customers constitutes a(n) _____. A) market segment B) value delivery network C) product group D) SBU E) interest group Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence them. Difficulty: Easy 76) Stitches of Love in Atlanta specializes in serving needlepoint enthusiasts, not quilters or knitters, who like to stitch with threads that are of exceptional quality even though they cost more than those offered by local craft stores. Which of the following best describes Stitches of Love? A) market follower B) market challenger C) early adopter D) market nicher E) laggard Answer: D AACSB: Application of knowledge 23 Copyright © 2024 Pearson Education Ltd. All Rights Reserved.

Skill: Application Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence them. Difficulty: Moderate 77) When Emily hears the word “Subaru,” she thinks of a safe car for driving her young children to school and soccer practice. This is an example of a firm's ________ as a safe car. A) portfolio B) marketing segment C) positioning D) marketing mix E) mission statement Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence them. Difficulty: Moderate 78) Alpha Motors offers "Green automobiles for a greener world." This refers to the ________ of Alpha automobiles. A) brand resonance B) position C) brand equity D) pleasure value E) added value Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence them. Difficulty: Moderate 79) In the marketing mix, design, packaging, services, and variety can be categorized under ________. A) product B) price C) promotion D) place E) position Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence them. Difficulty: Easy 24 Copyright © 2024 Pearson Education Ltd. All Rights Reserved.

80) The marketer must determine which segments offer the best opportunities. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence them. Difficulty: Easy 81) Dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing programs is known as market penetration. Answer: FALSE AACSB: Application of knowledge Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence them. Difficulty: Easy 82) Every market has segments, but not all ways of segmenting a market are equally useful. Answer: TRUE AACSB: Application of knowledge Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence them. Difficulty: Easy 83) The four Ps concept adopts the seller's view of the market. Answer: TRUE AACSB: Application of knowledge Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence them. Difficulty: Easy 84) Define the marketing mix. Answer: Guided by marketing strategy, the company designs an integrated marketing mix made up of factors under its control—product, price, place, and promotion (the four Ps). The mix itself must be long-term oriented, profitable, and sustainable. AACSB: Analytical thinking Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence them. Difficulty: Easy 85) Describe a marketing strategy. 25 Copyright © 2024 Pearson Education Ltd. All Rights Reserved.

Answer: Marketing strategy is the marketing logic by which the company hopes to create this customer value and achieve these profitable relationships. AACSB: Analytical thinking Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence them. Difficulty: Moderate 86) What is market segmentation? Answer: Market segmentation refers to dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors and who might require separate marketing strategies or mixes. AACSB: Analytical thinking Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence them. Difficulty: Moderate 87) Define the four As. Answer: Under the more customer-centered framework, acceptability is the extent to which the product exceeds customer expectations; affordability the extent to which customers are willing and able to pay the product’s price; accessibility the extent to which customers can readily acquire the product; and awareness the extent to which customers are informed about the product’s features, persuaded to try it, and reminded to repurchase. The four As relate closely to the traditional four Ps. Product design influences acceptability, price affects affordability, place affects accessibility, and promotion influences awareness. Marketers would do well to think through the four As first and then build the four Ps on that platform. AACSB: Application of knowledge; Analytical thinking Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence them. Difficulty: Moderate 88) Distinguish between market segmentation and market targeting. Answer: The process of dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing programs, is called market segmentation. On the other hand, market targeting involves evaluating each market segment's attractiveness and selecting one or more segments to enter. A company should target segments in which it can profitably generate the greatest customer value and sustain it over time. AACSB: Analytical thinking Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence them. Difficulty: Moderate 26 Copyright © 2024 Pearson Education Ltd. All Rights Reserved.

89) Most standard portfolio analysis methods evaluate SBUs on the ________. A) potential for niche or global marketing B) degree of product differentiation C) strength of the SBU’s position in the market or industry D) accessibility to rural markets E) number of successful business acquisitions Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy 90) According to the Boston Consulting Group approach, ________ provides a measure of market attractiveness. A) product attribute B) product design C) market penetration D) market growth rate E) market segmentation Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate

91) Which of the following is true with regard to a SWOT analysis? A) It classifies SBUs into four distinct categories. B) It measures customer response to a new product. C) It evaluates the company's overall strengths. D) It evaluates the growth potential of a market segment. E) It ignores the threats faced by a company while assessing its situation in the market. Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Easy 92) ________ are current and emerging external factors that may challenge the company’s performance A) Weaknesses B) Question marks C) Opportunities D) Threats E) Strengths Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Easy 93) ______include internal limitations and negative situational factors that may interfere with the company’s performance. A) Strengths B) Weaknesses C) Threats D) Opportunities E) Capabilities Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Easy 94) Harris Brown, the marketing manager at a small retail chain, wants to assess his firm's strengths, opportunities, weaknesses, and threats. Which of the following would be best suited for his purpose? 29 Copyright © 2024 Pearson Education Ltd. All Rights Reserved.

A) SWOT analysis B) cluster analysis C) portfolio analysis D) regression analysis E) Porter's five forces analysis Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Easy 95) Which of the following functions is NOT part of managing the marketing process? A) planning B) control C) budgeting D) implementation E) organization Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Moderate 96) ________ provides a complete analysis of the company's situation. A) A SWOT analysis B) A marketing audit C) Regression analysis D) Return on marketing investment E) Marketing budget evaluation Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Easy 97) Marketing ________ addresses the what and why of marketing activities, while marketing ________ addresses the who, where, when, and how. A) analysis; planning B) planning; implementation C) implementation; planning D) organization; implementation 30 Copyright © 2024 Pearson Education Ltd. All Rights Reserved.

E) control; planning Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Easy 98) Omega Inc. makes lightweight sunglasses with 100-percent UV protection for people who love to hunt, hike, and ride bikes. The company's long-term plans include the development of lenses that, in addition to protecting users from UV rays, would help reduce lens spotting through effective water-sheeting methods. This new feature would be valuable to people who fish. Given the rising popularity of recreational fishing in the United States, Omega products clearly have a huge market potential. In terms of a SWOT analysis, Omega has recognized a market ________. A) weakness B) strength C) threat D) opportunity E) challenge Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Moderate 99) The _____ presents a brief summary of the main goals and recommendations of the plan for management review, helping top management find the plan’s major points quickly. A) budget B) execution plans C) marketing strategy D) executive summary E) objectives and issues Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Easy

100) A _______consists of specific strategies related to target markets, positioning, the marketing mix, and marketing expenditure levels. It outlines how the company intends to engage target customers and create value in order to capture value in return. A) marketing budget B) portfolio analysis C) positioning statement D) SWOT analysis E) marketing strategy Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Easy 101) Many managers think that "doing things right," or ________, is as important as, or even more important than, "doing the right things." A) strategy B) planning C) positioning D) implementation E) targeting Answer: D AACSB: Analytical thinking; Ethical understanding and reasoning Skill: Concept Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Moderate 102) The most common form of marketing organization is the ________ organization. Under this organization, an operational specialist heads different marketing activities. A) geographic B) product management C) functional D) customer management E) market Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Easy 32 Copyright © 2024 Pearson Education Ltd. All Rights Reserved.

103) Berman Electronics, a chain of appliance stores in North America, caters to a wide range of customers. It has a marketing organization in which different operational specialists head different marketing activities. Berman Electronics is a(n) ________. A) customer management organization B) niche marketer C) early adopter D) functional organization E) laggard Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Challenging 104) To head up such large marketing organizations, many companies have now created a _____ position. This person represents marketing on the company’s top management team A) chief marketing officer (CMO) B) chief financial officer (CFO) C) chief executive officer (CEO) D) director of human resources E) director of global marketing Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Easy 105) Emerson Studios has designed its marketing organization along the lines of a ________ organization in which operational specialists head different marketing activities. A) geographic B) product C) functional D) customer E) market Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Moderate 34 Copyright © 2024 Pearson Education Ltd. All Rights Reserved.

106) A company that sells nationally or internationally often uses a _____, assigning sales and marketing people to specific countries, regions, and districts. A) geographic organization B) product organization C) functional organization D) niche marketer E) mass marketer Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Easy 107) Which of the following is true with regard to geographic organization? A) It is the most common form of marketing organization. B) Different marketing activities are headed by a functional specialist. C) It requires salespeople to have international experience. D) It reduces the overall efficiency of salespeople. E) It allows salespeople to work with a minimum of travel time and cost. Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Easy 108) Which of the following is a major advantage of the market organization? A) The company is organized around the needs of specific customer segments. B) The company exploits bleeding-edge technologies to keep ahead in the market. C) The company has a flat organizational structure. D) The company allows its salespeople to settle into a specific territory. E) The company caters to a single, small market segment. Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Easy

109) Companies with many different products or brands often create a _________organization A) technology management B) product management C) customer management D) functional management E) geographic management Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Moderate 110) ________ refers to evaluating the results of marketing strategies and plans and taking corrective action to ensure that the objectives are achieved. A) Marketing control B) Marketing implementation C) Satisficing D) Prospecting E) Benchmarking Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Easy 111) Marketing control involves four steps including all the following EXCEPT ________. A) setting specific marketing goals B) measuring the marketing plan's performance in the marketplace C) evaluating the causes of any differences between expected and actual performance D) increasing the staffing in the planning department E) taking corrective action to close the gaps between goals and performance Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Easy

112) All of the following steps pertain to the marketing control process EXCEPT ________. A) setting goals B) measuring performance C) taking corrective action D) defining the company's mission E) evaluating the causes of gaps between expected and actual performance Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Easy 113) The purpose of ________ is to ensure that the company achieves the sales, profits, and other goals set out in its annual marketing plan. A) benchmarking B) operating control C) strategic control D) SWOT analysis E) a marketing audit Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Easy 114) ________ involves looking at whether a company's key action plans are well-matched to its opportunities. A) Operating control B) Benchmarking C) Strategic control D) Regression analysis E) Portfolio analysis Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Easy

115) ________ measures the profits generated by investments in marketing activities. A) A SWOT analysis B) A marketing audit C) Regression analysis D) Return on marketing investment E) Marketing budget evaluation Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Easy 116) A SWOT analysis allows a marketer to evaluate the company's overall strengths, weaknesses, opportunities, and threats. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Easy 117) Which of the following is true of the BCG matrix approach? A) It is inexpensive to implement. B) It does not have any limitations. C) It considers market growth rate to be a measure of market attractiveness. D) It describes consumer motivations and needs. E) It does not consider relative market share to be a measure of company strength in the market. Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy

118) Benchmarking refers to the process that turns marketing plans into marketing actions to accomplish strategic marketing objectives. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Moderate 39 Copyright © 2024 Pearson Education Ltd. All Rights Reserved.

119) The key businesses of Kimberley and Price consist of a division that produces and sells breakfast cereals and another that manufactures gardening tools. Each of these businesses is called a ________. A) market segment B) strategic business unit C) question mark D) prospect E) product portfolio Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate

120) Return on marketing investment refers to the net return from a marketing investment divided by the costs of the marketing investment. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Moderate 121) What is marketing control? Answer: Marketing control refers to evaluating results and taking corrective action to ensure that the objectives are attained. Marketing control involves four steps. Management first sets specific marketing goals. It then measures its performance in the marketplace and evaluates the causes of any differences between expected and actual performance. Finally, management takes corrective action to close the gaps between goals and performance. This may require changing the action programs or even changing the goals AACSB: Analytical thinking Skill: Concept Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Moderate 122) What is the main purpose of the executive summary in a marketing plan? Answer: The executive summary presents a brief summary of the main goals and recommendations of the plan for management review, helping top management find the plan's major points quickly. AACSB: Written and oral communication Skill: Concept 40 Copyright © 2024 Pearson Education Ltd. All Rights Reserved.

Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Moderate 123) What is the purpose of the marketing plan? Answer: To find the best strategy and supporting marketing mix and to put them into action, the company engages in marketing analysis, planning, implementation, and control. The marketing plan serves as a blueprint that helps articulate and implement the marketing strategy. .AACSB: Written and oral communication Skill: Concept Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Moderate 124) Define marketing return on investment (ROI) Answer: Marketing ROI is the net return from a marketing investment divided by the costs of the marketing investment. It measures the profits generated by investments in marketing activities. AACSB: Analytical thinking Skill: Concept Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Moderate 125) Describe the most common forms of marketing organizations. Answer: Modern marketing departments can be arranged in several ways. 1. The most common form of marketing organization is the functional organization. Under this organization, different marketing activities are headed by a functional specialist–a sales manager, an advertising manager, a marketing research manager, a customer service manager, or a new product manager. 2. A company that sells across the country or internationally often uses a geographic organization. Its sales and marketing people are assigned to specific countries, regions, and districts. Geographic organization allows salespeople to settle into a territory, get to know their customers, and work with a minimum of travel time and cost. 3. Companies with many very different products or brands often create a product management organization. Using this approach, a product manager develops and implements a complete strategy and marketing program for a specific product or brand. 4. For companies that sell one product line to many different types of markets and customers who have different needs and preferences, a market or customer management organization might be best. A market management organization is similar to the product management organization. Large companies that produce many different products flowing into many different geographic and customer markets usually employ some combination of the functional, geographic, product, and market organization forms. 41 Copyright © 2024 Pearson Education Ltd. All Rights Reserved.

AACSB: Written and oral communication Skill: Concept Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Moderate 126) What is the top marketing concern? Answer: Marketing accountability is the top marketing concern. Marketing managers must ensure that their marketing dollars are being well spent. In a tighter economy, today’s marketers face growing pressures to show that they are adding value in line with their costs. In response, marketers are developing better measures of marketing return on investment. Increasingly, they are using customer-centered measures of marketing pact as a key input into their strategic decision making. AACSB: Application of Knowledge Skill: Concept Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Moderate 127) How do marketers measure return on marketing investment? Why is this figure difficult to assess? Answer: Marketing ROI (return on investment) is the net return from a marketing investment divided by the costs of the marketing investment. It measures the profits generated by investments in marketing activities. Marketing ROI can be difficult to measure. In measuring financial ROI, both the "R" and the "I" are uniformly measured in dollars. As of yet, however, there is no consistent definition of marketing ROI. For instance, returns like advertising and brand-building impact aren't easily put into dollar returns. Increasingly, however, beyond standard performance measures, marketers are using customercentered measures of marketing impact, such as customer acquisition, customer retention, customer lifetime value, and customer equity. These measures capture not only current marketing performance but also future performance resulting from stronger customer relationships. AACSB: Application of knowledge; Analytical thinking Skill: Concept Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Moderate 128) Which of the following is the first step in strategic planning? A) setting short-term goals B) developing the business portfolio C) defining the company mission D) formulating the key marketing strategies 42 Copyright © 2024 Pearson Education Ltd. All Rights Reserved.

E) identifying the organization's weaknesses and the threats it faces Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Easy 129) Which of the following is NOT a step in the strategic planning process? A) defining the company mission B) setting company objectives and goals C) designing the business portfolio D) planning marketing and other functional strategies E) evaluating members of the company's value chain Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Easy 130) Orion Inc. operates in many industries, including pharmaceuticals and food products. The company's goal is to create "abundant and affordable food for all and a healthy environment." This represents Orion's ________. A) marketing plan B) product mix C) business portfolio D) marketing mix E) mission statement Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Moderate 131) Which of the following best describes a strategic business unit? A) the internal value chain of a company B) the supply chain of a company C) the key businesses that make up a company D) the key channel intermediaries of a service company E) the key competitors of a company Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy 132) Which of the following is NOT something a company must determine when analyzing its current business portfolio? 43 Copyright © 2024 Pearson Education Ltd. All Rights Reserved.

A) which businesses should receive more investment B) which businesses should receive less investment C) which businesses should receive no investment D) which businesses should be sold or closed E) which businesses shape the future portfolio Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate 133) Within a decentralized company, who is responsible for strategic planning? A) the president and vice presidents B) the accounting and finance departments C) the marketing and sales departments D) cross-functional teams of divisional managers close to their markets E) the manufacturing and production departments Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate 134) Most standard portfolio analysis methods evaluate SBUs on the ________. A) potential for niche or global marketing B) degree of product differentiation C) strength of the market or industry position D) accessibility to rural markets E) number of successful business acquisitions Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy 135) Teenagers are expected to respond in a similar way to a set of marketing efforts. In other words, this group represents a ________. A) channel intermediary B) line extension C) market segment D) product attribute E) brand personality Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence them. 44 Copyright © 2024 Pearson Education Ltd. All Rights Reserved.

Difficulty: Moderate 136) What is market targeting? Answer: Market targeting involves evaluating each market segment’s attractiveness and selecting one or more segments to enter. A company should target segments in which it can profitably generate the greatest customer value and sustain it over time. A company with limited resources might decide to serve only one or a few special segments. AACSB: Analytical thinking Skill: Concept Objective: LO 2.4: Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence them. Difficulty: Easy 137) In a SWOT analysis, ________ include favorable trends in the external environment. A) strengths B) challenges C) weaknesses D) opportunities E) threats Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Easy 138) What is the difference between operating control and strategic control Answer: Operating control involves checking ongoing performance against the annual plan and taking corrective action when necessary. Its purpose is to ensure that the company achieves the sales, profits, and other goals set out in its annual plan. It also involves determining the profitability of different products, territories, markets, and channels. Strategic control involves looking at whether the company’s basic strategies are well matched to its opportunities. Marketing strategies and programs can quickly become outdated, and each company should periodically reassess its overall approach to the marketplace. Skill: Concept Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Moderate. 139) How are marketing departments typically organized? Answer: Marketing departments can be organized in one way or a combination of ways: functional marketing organization, geographic organization, product management organization, or market management organization. In this age of customer relationships, many companies are 45 Copyright © 2024 Pearson Education Ltd. All Rights Reserved.

now changing their organizational focus from product or territory management to customer relationship management. Skill: Concept Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Moderate. 140) The marketing dashboard gives marketers the detailed measures they need to assess and adjust their marketing strategies. Answer: TRUE Skill: Concept Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Moderate. Quantitative Questions 1) In 2019 Starbucks generated $16.65 billion in revenue in the U.S. alone. However, COVID-19 pushed sales revenues down by 11% in 2020. How much revenue did Starbucks generate in 2020? A) $18.48 billion B) $14.82 billion C) $1.83 billion D) $12.32 billion E) $15.55 billion Answer: B; You can compute 2020 revenue by multiplying 2019 revenue by (1 - .11). So, $16.65 x .89 = $14.82 billion. AACSB: Analytical thinking Skill: Application Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Easy 2) Assume Ikea generated $58 billion in total revenue from 458 stores located in 59 countries. How much revenue per store is Ikea generating? A) $.126638 million B) $145.57 million C) $126.64 million D) $7.896 million E) $18.325 million Answer: C; You compute this answer by dividing the $58 billion in revenue by 458. So, $58 billion/458 = .126638 billion per store, or $126.64 million per store. AACSB: Analytical thinking Skill: Application Objective: LO 2.1: Explain company-wide strategic planning and its four steps. 46 Copyright © 2024 Pearson Education Ltd. All Rights Reserved.

Difficulty: Moderate 3) Company ABC is adopting a growth strategy that management believes will grow the firm’s revenues by 5% a year for the next three years. What will sales by in three years if the most recent annual sales revenue was $45.8 million? A) $43.21 million B) $50.49 million C) $48.09 million D) $53.02 million E) $55.87 million Answer: D; You can compute this answer by FV =PV(1 + growth rate)n, where n = number of years. So, $45.8(1.05)3 = $53.02 million. AACSB: Analytical thinking Skill: Application Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Challenging 4) Company ABC has a cash cow strategic business unit (SBU) that generated 14% of the firm’s $76 million in revenues last year. How much revenue did the cash cow generate? A) $8.17 million B) $11.41 million C) $10.64 million D) $12.21 million E) $5.43 million Answer: C; You compute this answer by multiplying $76 million x .14 = $10.64 million. AACSB: Analytical thinking Skill: Application Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate 5) Company ABC has a cash cow strategic business unit (SBU) that generated 14% of the firm’s $76 million in revenues last year. How much in average revenue is generated by each of the other eight SBUs? A) $8.17 million B) $11.41 million C) $10.64 million D) $12.21 million E) $5.43 million Answer: A; You compute this answer by determining the revenue generated by the 8 SBUs and then dividing by 8. So, [$76 million (1 - .14)]/8 = $8.17 million. AACSB: Analytical thinking Skill: Application Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Challenging 6) What is the growth rate in stores for a firm that has 3,400 stores but plans to have 4,000 by the end of next year? 47 Copyright © 2024 Pearson Education Ltd. All Rights Reserved.

A) 8.21% B) 11.10% C) 12.54% D) 15.00% E) 17.65% Answer: E; You compute this answer by the following formula → % growth rate = (Value1 – Value0)/Value0. So, (4,000 – 3,400)/3,400 = .1765, or 17.65%. AACSB: Analytical thinking Skill: Application Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate 7) Firm XYZ’s management believes that it can save 4% in operating costs by changing some of its suppliers. How much will it save if last year’s operating costs were $22 million? A) $88,000 B) $650,000 C) $1,231,00 D) $880,000 E) $21,120,000 Answer: D; You compute this by multiplying the costs by the % savings. So, $22 million x .04 = $880,000. AACSB: Analytical thinking Skill: Application Objective: LO 2.3: Explain marketing’s role in strategic planning and how marketing works with its partners to create and deliver customer value. Difficulty: Moderate 8) Firm XYY believes it can increase its market share to 13% by the end of the year through focused marketing efforts. What is the expected growth rate if the firm’s current market share is 11.3%? A) 11.1% B) 5.6% C) 15.0% D) 13.4% E) 3.1% Answer: C; You compute this answer by the following formula → % growth rate = (Value1 – Value0)/Value0. So, (13 – 11.3)/11.3 = .1504, or 15.04%. AACSB: Analytical thinking Skill: Application Objective: LO 2.4: Describe the elements of a customer value–driven marketing strategy and mix and the forces that influence them. Difficulty: Moderate Use the following data from Firm XYZ to answer the next two questions. Sales $45,003 Gross profit $18,211 48 Copyright © 2024 Pearson Education Ltd. All Rights Reserved.

Marketing expenses Net income

$4,113 $6,566

9) What was Firm XYZ’s percentage profit? A) 33.51% B) 14.59% C) 11.22% D) 9.14% E) 5.32% Answer: B; You compute this answer by dividing net income by sales. So, $6,566/$45,003 = .1459, or 14.59%. AACSB: Analytical thinking Skill: Application Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Challenging 10) How much revenue did Firm XYZ generate per dollar of marketing budget? A) $10.94 B) $11.98 C) $17.23 D) $14.59 E) $109.41 Answer: A; You compute this by dividing total sales by the marketing expenses. So, 45,003/4,113 = $10.94. AACSB: Analytical thinking Skill: Application Objective: LO 2.5: Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Difficulty: Challenging

Principles of Marketing, 19e, Global Edition (Kotler) Chapter 3 Analyzing the Marketing Environment 1) Dan has been directed to study the forces close to a company that affect its ability to serve its customers, such as the company, suppliers, marketing intermediaries, customer markets, competitors, and publics. In this instance, Dan has been directed to study the ________ of the company. A) macroenvironment B) microenvironment C) technological environment D) demographic environment E) political environment Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Moderate 2) Which of these categories do you think the COVID-19 pandemic should fit into? A) macroenvironment B) marketing orientation C) microenvironment D) target markets E) corporate environment Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Moderate 3) Which of the following is a component of a firm's microenvironment? A) customer demographics B) economic recessions C) population shifts D) marketing intermediaries E) technological changes Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Easy 4) Naya works with suppliers to ensure her firm has a steady stream of products for sale. Which of these categories is she working with in her role? 1 Copyright © 2024 Pearson Education Ltd. All Rights Reserved.

A) macroenvironment B) microenvironment C) internal environment D) marketing mix E) marketing intermediaries Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Easy 5) Jamal works with the finance department to help them develop sales forecasts so they can project the firm’s financing needs. Which of these environmental actors does this relationship represent? A) cultural B) economic C) company D) political E) technological Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Easy 6) Which of these environmental actors helps the firm promote and sell products? A) accounting B) finance C) purchasing D) marketing intermediaries E) Research & development Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Easy

7) ________ provide the resources needed by a company to produce its goods and services. A) Retailers B) Marketing services agencies C) Resellers D) Suppliers E) Financial intermediaries Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Easy 8) Stephens Inc. provides the firm with a short-term line of credit since most of the firm’s sales are seasonal. Stephens Inc. is a . A) financial intermediary B) supplier C) retailer D) customer E) local public Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Easy 9) ________ include households, other businesses, resellers, and government entities. A) Customers B) Physical distribution firms C) Competitors D) Marketing services agencies E) Suppliers Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve its customers. Difficulty: Easy 10) Maria works for Sigma Inc., a firm that helps companies target and promote their products to the right markets. Sigma is most likely a ________. A) financial intermediary B) physical distribution firm C) marketing services agency D) reseller E) wholesaler 3 Copyright © 2024 Pearson Education Ltd. All Rights Reserved.