CHAPTER 4: CUSTOMER VALUE – DRIVEN.

MARKETING STRATEGY
I. Company and Marketing Strategy: Partnering to Build Customer
Relationships
1. ________ is the process of developing and maintaining a crucial fit
between the organization's goals and capabilities and its changing
marketing opportunities.
A) Benchmarking
B) SWOT analysis
C) Market segmentation
D) Strategic planning
E) Diversification
2. Which of the following is the first step in strategic planning?
A) setting short-term goals
B) developing the business portfolio
C) defining the organizational mission
D) formulating the key marketing strategies
E) identifying the organization's weaknesses and the threats it faces
3. 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
4. A ________ documents an organization's purpose—what it wants to
accomplish in the larger environment.
A) vision statement
B) mission statement
C) business portfolio
D) value proposition
E) product strategy
5. Mission statements should ________ and be defined in terms of ________.
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
6. A mission statement serves as a ________.
A) statement of the organization's net profits
B) plan for short-term sustainability
C) statement of the organization's purpose
D) statement of the organization's current liabilities
E) reward plan for the organization's highly-skilled employees
7. Which of the following is NOT a market-oriented business definition?
A) "We empower customers to realize their dreams."
B) "We make high-quality consumer food products."
C) "We sell success and status."
D) "We create the Hilton experience."
E) "We bring innovation to every home."
8. Companies that define their missions in terms of products or technologies
are considered myopic primarily because ________.
A) products and technologies result in low returns on investment
B) consumer preferences with regard to products and technology are difficult to
predict
C) consumer preferences for different product categories vary from time to time
D) products and technologies eventually become outdated
E) most consumers are not comfortable using sophisticated technology during
the buying process
9. 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
10. Which of the following companies has a product-oriented business
definition?
A) A luxury hotel, whose business definition is: "We sell out-of-the-world
experiences to our guests."
B) A real estate company, whose business definition is: "We sell dreams."
C) A cosmetic company, whose business definition is: "We offer hopes and self-
expression."
D) A shoe manufacturer, whose business definition is: "We manufacture
affordable and long-lasting shoes for all."
E) A high-technology company, whose business definition is: "We sell
inspirations.”
11. Mission statements should be ________.
A) meaningful and specific yet motivating
B) technology oriented
C) written solely for public relations purposes
D) focused on increasing sales or profits
E) strictly product oriented
12. The collection of businesses and products that make up a company is
called its ________.
A) strategic business unit
B) supply chain
C) strategic plan
D) business portfolio
E) internal value chain
13. The major activity in strategic planning is ________, whereby
management evaluates the products and businesses that make up the
company.
A) SWOT analysis
B) benchmarking
C) business portfolio analysis
D) breakeven analysis
E) prospecting
14. 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
15. According to the Boston Consulting Group approach, ________ serves
as a measure of company strength in the market.
A) relative market share
B) product development
C) market diversification
D) product attribute
E) market segmentation
16. ________ are a type of SBU that often require heavy investments to
finance their rapid growth.
A) Cash cows
B) Question marks
C) Stars
D) Dogs
E) Bears
17. ________ 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
18. Which of the following is true with regard to cash cows?
A) They are high-growth, high-share businesses or products.
B) They can be used to help finance the company's question marks and stars.
C) They require significant cash to maintain market share.
D) They are low-share businesses and products.
E) They do not promise to be large sources of cash.
19. ________ are low-share business units in high-growth markets that
require a lot of cash to hold their share.
A) Stars
B) Dogs
C) Question marks
D) Cash cows
E) Bears
20. A company can ________ an SBU by selling it or phasing it out and
using the resources elsewhere.
A) divest
B) promote
C) expand
D) harvest
E) hold
21. Fun-Spot Fun Park represents a high-growth, high-share business.
According to the BCG matrix, it can be classified as a ________.
A) star
B) question mark
C) bear
D) cat
E) dog
22. The purpose of strategic planning is to find ways in which your
company can best use its strengths to take advantage of attractive
opportunities in the environment.
A. TRUE
B. FALSE
23. A mission statement is a document embodying an organization's short-
term goals.
A. TRUE
B. FALSE
24. A clear mission statement acts as an "invisible hand" that guides people
in the organization.
A. TRUE
B. FALSE
25. Mission statements should be market oriented and defined in terms of
satisfying basic customer needs.
A. TRUE
B. FALSE
26. The marketing logic by which a company hopes to create customer
value and achieve profitable customer relationships is referred to as the
________.
A) price
B) marketing implementation
C) value chain
D) marketing strategy
E) downsizing
27. Which of the following is NOT an element of the marketing mix?
A) place
B) purchase
C) product
D) price
E) promotion
28. Market segmentation can be best described as the process of ________.
A) assigning specific human attributes to a given brand
B) dividing a market into distinct groups of buyers who have different needs,
characteristics, or behaviors, and who might require separate products or
marketing programs
C) evaluating each market segment's attractiveness and selecting one or more
segments to enter
D) turning marketing plans into marketing actions to accomplish strategic
marketing objectives
E) maintaining a strategic fit between organizational goals and changing
marketing opportunities
29. 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
30. Each company must divide up the total market, choose the best
segments, and design strategies for profitably serving chosen segments. This
process involves market segmentation, ________, differentiation, and
positioning.
A) market targeting
B) marketing implementation
C) supply-chain analysis
D) price discrimination
E) market diversification
31. Which of the following refers to the process of dividing a market into
distinct groups of buyers with different needs, characteristics, or behaviors?
A) market diversification
B) market segmentation
C) downsizing
D) customer relationship management
E) prospecting
32. Rob has been asked by his manager to identify a group of potential
customers who would respond in a similar way to a given set of marketing
efforts. In this instance, Rob has been asked to identify a ________.
A) new product
B) market segment
C) marketing intermediary
D) brand
E) product line
33. The process of evaluating each market segment's attractiveness and
selecting one or more segments to enter is known as ________.
A) market segmentation
B) diversification
C) market targeting
D) prospecting
E) downsizing
34. Paul Robinson has identified a group of potential customers who seem
to respond in a similar way to a series of magazine and radio
advertisements for his company's product. Paul has identified a(n)
________.
A) target market
B) market segment
C) niche market
D) product attribute
E) product design
35. Which of the following is true with regard to a market segment?
A) A market segment consists of consumers with dissimilar needs and
preferences.
B) A market segment consists of consumers who respond in a similar way to a
given set of marketing efforts.
C) Very few markets have segments.
D) Dividing the market into segments decreases the efficiency of the selling
process.
E) Dividing the market into segments reduces composite demand.
36. Arrow is "a different kind of company, manufacturing a different kind
of a car"; the RoadPro is "like nothing else." Statements such as these
reflect a firm's ________.
A) portfolio
B) marketing segment
C) positioning
D) marketing mix
E) mission statement
37. Arranging for a product to occupy a clear, distinctive, and desirable
place relative to competing products in the minds of target consumers is
known as ________.
A) positioning
B) segmenting
C) diversifying
D) prospecting
E) satisficing
38. Effective positioning begins with ________.
A) pricing
B) diversification
C) differentiation
D) promotion
E) segmentation
II. Customer Value-Driven Marketing Strategy: Creating Value for Target
Customers
1. ________ consists of evaluating each market segment's attractiveness and
selecting one or more segments to enter.
A) Positioning
B) Mass customization
C) Market targeting
D) Market segmentation
E) Differentiation
2. ________ involves dividing a market into smaller segments of buyers with
distinct needs, characteristics, or behaviors that might require separate
marketing strategies or mixes.
A) Mass customization
B) Market targeting
C) Market segmentation
D) Differentiation
E) Positioning
3. ________ involves actually distinguishing the firm's market offering to
create superior customer value.
A) Mass customization
B) Differentiation
C) Market segmentation
D) Diversifying
E) Targeting
4. When marketers at Fair & Leigh Inc. selected the Millennials, a
demographic group that includes many college students, as an untapped
group of potential customers for their new line of products, they were
engaging in ________.
A) occasion segmenting
B) local marketing
C) market diversification
D) market targeting
E) product positioning
5. ________ consists of arranging for a market offering to occupy a clear,
distinctive, and desirable place relative to competing products in the minds
of target consumers.
A) Mass customization
B) Targeting
C) Segmentation
D) Differentiation
E) Positioning
6. Which of the following is NOT one of the major variables used in
segmenting consumer markets?
A) demographic
B) behavioral
C) ethical
D) geographic
E) psychographic
7. ________ calls for dividing the market into regions, states, counties,
cities, or even neighborhoods.
A) Benefit segmentation
B) Geographic segmentation
C) Demographic segmentation
D) Psychographic segmentation
E) Occasion segmentation
8. Many companies today are localizing their products, advertising,
promotion, and sales efforts to fit the needs of individual regions, cities, and
neighborhoods. This is an example of ________.
A) geographic segmentation
B) product diversification
C) branding
D) psychographic segmentation
E) demographic segmentation
9. ________ segmentation divides the market into segments based on
variables such as age, life-cycle stage, gender, income, occupation,
education, religion, ethnicity, and generation.
A) Geographic
B) Benefit
C) Occasion
D) Psychographic
E) Demographic
10. ________ segmentation divides buyers into different segments based on
social class, lifestyle, or personality characteristics.
A) Benefit
B) Occasion
C) Geographic
D) Demographic
E) Psychographic
11. Which of the following variables are the most popular for marketers to
use in segmenting customer groups?
A) ethical
B) psychographic
C) demographic
D) behavioral
E) geographic
12. ________ segmentation divides buyers into different segments based on
lifestyle or personality characteristics.
A) Benefit
B) Occasion
C) Geographic
D) Demographic
E) Psychographic
13. ________ segmentation divides buyers into segments based on their
knowledge, attitudes, uses, or responses concerning a product.
A) Behavioral
B) Psychographic
C) Age and life cycle
D) Gender
E) Geographic
14. When the size, purchasing power, and profile of a market segment can
be calculated, the market is ________.
A) measurable
B) profitable
C) substantial
D) actionable
E) competitive
15. A market segment that is large enough or profitable enough to serve is
________.
A) measurable
B) accessible
C) substantial
D) profitable
E) differentiable
16. When an effective program can be designed for attracting and serving a
particular segment, the segment is best described as ________.
A) accessible
B) measurable
C) competitive
D) actionable
E) differentiable
17. ________ segments are conceptually distinguishable and respond
differently to different marketing mix elements and programs.
A) Complex
B) Measurable
C) Competitive
D) Differentiable
E) Homogeneous
18. Market segments that can be effectively reached and served are
________.
A) measurable
B) accessible
C) substantial
D) actionable
E) profitable
19. A ________ consists of a set of buyers who share common needs or
characteristics that the company decides to serve.
A) marketing channel
B) citizen-action group
C) distribution channel
D) customer franchise
E) target market
20. ________ refers to a market-coverage strategy in which a firm decides
to ignore market segment differences and go after the whole market with
one offer.
A) Individual marketing
B) Local marketing
C) Niche marketing
D) Undifferentiated marketing
E) Segmented marketing
21. Sanguine Services is a small company that uses a marketing strategy in
which its limited resources are employed to target a large share of two small
market segments. Sanguine most likely uses which of the following
marketing strategies?
A) individual marketing
B) one-to-one marketing
C) mass marketing
D) concentrated marketing
E) trigger-based marketing
22. A market-coverage strategy in which a firm decides to target several
market segments and designs separate offers for each is known as
________.
A) mass marketing
B) differentiated marketing
C) concentrated marketing
D) individual marketing
E) cross-marketing
23. Which of the following is a disadvantage of using a differentiated
marketing strategy?
A) It generates far lower sales compared to an undifferentiated marketing
strategy.
B) Customer loyalty is negatively impacted and difficult to obtain.
C) The costs of doing business increase.
D) Quality control problems increase.
E) Product safety decreases.
24. With a(n) ________ marketing strategy, a firm goes after a large share
of one or a few smaller niches.
A) individual
B) mass
C) concentrated
D) differentiated
E) local
25. Which of the following is true about the concentrated marketing
strategy?
A) Companies that rely on a few segments for all of their business will suffer if
a segment turns sour.
B) Concentrated marketing is not profitable for most firms.
C) Niche marketing involves few risks for most firms.
D) Concentrated marketing involves going after a small share of a large market.
E) The Internet has limited the use and benefits of niche marketing.
26. ________ is the practice of tailoring products and marketing programs
to suit the tastes of specific individuals and locations.
A) Mass marketing
B) Trigger-based marketing
C) Differentiated marketing
D) Concentrated marketing
E) Micromarketing
27. ________ marketing tailor’s brands and promotions to the needs and
wants of regional customer groups, such as cities, neighborhoods, and even
specific stores.
A) Undifferentiated
B) Differentiated
C) Niche
D) Local
E) Individual
28. Which of the following marketing strategies is most suitable for smaller
firms with limited resources?
A) mass marketing
B) undifferentiated marketing
C) niche marketing
D) differentiated marketing
E) one-to-one marketing