Assignment 2 - Algebraic Techniques - BTEC Level 3 Engineering: Unit 28 (P2, P3, P4, P5, P6 & M2) - Further Mathematics for Engineering Technicians Assignment 2 - Algebraic Techniques. You will receive a 8 page fully detailed assignment answers to the following questions: P2, P3, P4, P5, P6 & M2. P2: P3: P4: P5: P6: M2: BTEC Level 3 Engineering: Unit 28 - Further Mathematics for Engineering Technicians

Exam 19 September 2017, questions and answers Marketing Management (Alliance University) Chapter 2 to Chapter 10 Exam 19 September 2017, questions and answers Marketing Management (Alliance University) Chapter 2 to Chapter 10 Chapter 2: Developing Marketing Strategies and Plans GENERAL CONCEPT QUESTIONS Multiple Choice 66 Chapter 1: Marketing: Managing Profitable Customer Relationships 1. A key ingredient of the marketing management process is insightful, marketing strategies and plans that can guide marketing activities. a. creative b. measurable c. macro d. micro e. niche Page: 35 2. According to a chapter story about H&M clothing stores, H&M is able to put products out quickly and inexpensively by all of the following EXCEPT . a. having few middlemen and owning no factories b. buying large volumes c. having extensive experience in the clothing industry d. having a great knowledge of which goods should be bought from which markets e. having total control of its distribution channel from the time the goods are produced until the time they are sold Page: 36 3. The task of any business is to deliver at a profit. a. customer needs b. products c. customer value d. products and services e. improved quality Page: 36 4. In a hypercompetitive economy such as ours, a company can win only by fine- tuning the value delivery process and choosing, providing, and superior value. a. communicating b. selecting target markets with c. composing d. developing e. researching Page: 36 5. The traditional view of marketing is that the firm makes something and then it. a. markets b. sells c. distributes d. prices e. services Page: 36 67 Part 1: Defining Marketing and the Marketing Process 6. Today, the “mass-market” is actually splintering into numerous , each with its own wants, perceptions, preferences, and buying criteria. a. micromarkets b. market targets c. macromarkets d. customer cliques e. demographic units Page: 37 7. The first phase of the value creation and delivery sequence is that represents the “homework” marketing must do before any product exists. a. choosing the value b. market research c. target marketing d. service consideration e. projective thinking Page: 37 8. The last step in the value creation and delivery sequence is the value where the sales force, sales promotion, advertising, and other communication tools announce and promote the product. a. developing b. distributing c. communicating d. reversing e. researching Page: 37 9. The Japanese have refined the value delivery process to include a component that emphasizes . a. zero servicing b. zero customer feedback time c. zero promotion d. zero dependency on intermediaries e. zero marketing costs Page: 38 10. The is a tool for identifying ways to create more customer value. a. value chain b. customer survey c. brand loyalty index d. promotion channel e. supplier database Page: 38 11. The identifies nine strategically relevant activities that create value and cost in a specific business. a. value proposition b. value chain c. mission statement 68 Chapter 1: Marketing: Managing Profitable Customer Relationships d. annual report e. manager’s log Page: 38 12. The in the value chain cover the sequence of bringing materials into the business (inbound logistics), converting them into final products (operations), shipping out final products (outbound logistics), marketing them (marketing and sales), and servicing them (service). a. operations process b. manufacturing process c. primary activities d. secondary activities e. tertiary activities Page: 38 13. Procurement, technology development, human resource management, and firm infrastructure are handled in certain specialized departments and are called . a. materials handling b. support activities c. inventory activities d. primary activities e. benchmark activities Page: 38 14. The firm should estimate its competitors’ costs and performances as against which to compare its own costs and performance. a. competition b. standards c. challenges d. benchmarks e. moveable standards Page: 38 15. The firm’s success depends not only on how well each department performs its work, but also on how well the various departmental activities are coordinated to conduct . a. core strategies b. satellite businesses c. core values d. core business processes e. core technologies Page: 38 16. With respect to core business processes, all the activities involved in gathering market intelligence, disseminating it within the organization, and acting on the information is referred to as the . a. market sensing process b. market research process c. target marketing process d. market pulse process 69 Part 1: Defining Marketing and the Marketing Process e. deployment process Page: 38 17. With respect to the core business processes, all the activities involved in researching, developing, and launching new high-quality offerings quickly and within budget are referred to as the . a. new product process b. new offering realization process c. product development process d. product launch process e. return on investment process Page: 38 18. With respect to the core business processes, the is considered to be all the activities involved in defining target markets and prospecting for new customers. a. customer acquisition process b. customer relationship management process c. fulfillment management process d. customer prospecting process e. customer equity process Page: 38 70 Chapter 1: Marketing: Managing Profitable Customer Relationships 19. A good way to describe the would be discuss all the activities involved in building deeper understanding, relationships, and offerings to individual customers. a. customer acquisition process b. customer relationship management process c. customer prospecting process d. customer fulfillment management process e. customer equity process Page: 38 20. Another way to describe a value delivery network (partnering with specific suppliers and distributors) is to call it a . a. teamwork group b. cabal c. domestic power center d. link to relationships e. supply chain Page: 39 21. The key to utilizing organizational core competencies is to that make up the essence of the business. a. make the competencies pay for themselves b. own all intermediaries who come in contact with your goods and services c. own and nurture the resources and competencies d. emphasize global promotions e. segment workforces Page: 39 22. We can say that a has three characteristics: (1) It is a source of competitive advantage in that it makes a significant contribution to perceived customer benefits, (2) it has applications in a wide variety of markets, and (3) it is difficult for competitors to imitate. a. core competency b. business strategy c. core technology d. strategic business unit e. winning strategy Page: 39 23. Core competencies tend to refer to areas of special technical and production expertise, where tend to describe excellence in broader business processes. a. process benchmarks b. distinctive capabilities c. core business values d. value statements e. mission statements Page: 40 24. George Day sees market-driven organizations as excelling in three distinctive capabilities: , customer linking, and channel bonding. 71 Part 1: Defining Marketing and the Marketing Process a. target marketing b. market research c. fulfilling customer needs d. market sensing e. customer service relationships Page: 40 25. Competitors find it hard to imitate companies such as Southwest Airlines, Dell, or IKEA because they are unable to copy their . a. product innovations b. distribution strategy c. pricing policies d. activity systems e. logistics system Page: 40 26. One conception of holistic marketing views it as “integrating the value exploration, , and value delivery activities with the purpose of building long-term, mutually satisfying relationships and co-prosperity among key stakeholders.” a. value creation b. value proposition c. value management d. value research e. value chain Page: 40 27. Holistic marketers achieve profitable growth by expanding customer share, , and capturing customer lifetime value. a. undermining competitive competencies b. building customer loyalty c. milking the market for product desires d. renewing a customer base e. inspecting all market share data Page: 40 28. The holistic marketing framework is designed to address three key management questions. Which of the following is one of those questions? a. Value claims—how does the company deal with value erosion? b. Value proposition—how can value propositions be made profitable? c. Value chain—are there weak links in the company’s value chain d. Value network—how can a company effectively network? e. Value exploration—how can a company identify new value opportunities? Page: 41 29. The customer’s reflects existing and latent needs and includes dimensions such as the need for participation, stability, freedom, and change. a. competence space b. resource space c. emotional space 72 Chapter 1: Marketing: Managing Profitable Customer Relationships d. relationship space e. cognitive space Page: 41 30. The company’s can be described in terms of breadth—broad versus focused scope of business; and depth—physical versus knowledge-based capabilities. a. business mission b. core strategy c. cognitive space d. competency space e. resource space Page: 41 31. The collaborator’s involves horizontal partnerships, where companies choose partners based on their ability to exploit related market opportunities, and vertical partnerships, where companies choose partners based on their ability to serve their value creation. a. resource space b. competency space c. cognitive space d. rational space e. service space Page: 41 32. Business realignment may be necessary to maximize core competencies. Which of the following would be one of the steps in this realignment process? a. Reviewing all macro relationships. b. Reviewing global outreach projections. c. Redefining the business concept (the “big idea”). d. Reviewing successes from e-commerce (if any). e. Revamping the ethics statement. Page: 41 Part 1: Defining Marketing and the Marketing Process 33. allows the company to discover who its customers are, how they behave, and what they need or want. It also enables the company to respond appropriately, coherently, and quickly to different customer opportunities. a. Network management b. Strategic management c. Marketing management d. Customer relationship management e. Total quality management Page: 41 34. To respond effectively and provide value delivery, the company requires to integrate major business processes (e.g., order processing, general ledger, payroll, and production) within a single family of software modules. a. human resource management b. internal auditing management c. internal resource management d. strategic management e. marketing management Page: 41 35. With respect to value delivery, allows the company to handle complex relationships with its trading partners to source, process, and deliver products. a. a value matrix b. a global distribution policy c. a business development strategy d. business partnership management e. total quality management Page: 41 36. Successful marketing requires having capabilities such as understanding , creating customer value, delivering customer value, capturing customer value, and sustaining customer value. a. customer loyalty b. customer perks c. customer retention d. customer value e. customer benefits Page: 41 Chapter 1: Marketing: Managing Profitable Customer Relationships 37. According to a McKinsey research study, which of the following is one of the main challenges that marketing must face in the twenty-first century? a. The threat of ethics-based lawsuits. b. Doing more with less. c. Hostile takeover attempts. d. Increasing control by big government. e. Being independent of the distribution process. Page: 42 38. Strategic planning in the twenty-first century calls for action in three key areas. Which of these key areas deals specifically with devising a long-term game plan for achieving long-run objectives? a. Creating a viable business opportunity. b. Producing a strategic fit. c. Developing an investment portfolio. d. Expanding core competencies. e. Establishing a strategy. Page: 42 39. Most large companies consist of four organizational levels: the , the division level, the business unit level, and the product level. a. board of director level b. major stakeholder level c. management team level d. corporate level e. strategic level Page: 43 40. The is the central instrument for directing and coordinating the marketing effort. a. strategic plan b. marketing plan c. tactical plan d. customer value statement e. corporate mission Page: 43 41. The lays out the target markets and the value proposition that will be offered, based on an analysis of the best market opportunities. a. organizational plan b. strategic marketing plan c. corporate tactical plan d. corporate mission e. customer value statement Page: 43 42. In which of the following plans would we most likely find directions for implementing and addressing daily challenges and opportunities in product features, promotion, merchandising, pricing, sales channels, and service areas. a. The tactical marketing plan. 75 Part 1: Defining Marketing and the Marketing Process b. The target marketing plan. c. The deployment plan. d. The product launch plan. e. The product development plan. Page: 43 43. If you wanted to find out more about target markets and the organization’s value proposition, which of the following types of plans would most likely contain information that might be useful to you in your quest? a. The marketing plan. b. The organizational plan. c. The strategic marketing plan. d. The tactical marketing plan. e. The marketing mix plan. Page: 43 44. The process consists of corporate, division, business, and product planning. a. implementing b. controlling c. innovation d. planning e. competitive Page: 44 45. All corporate headquarters undertake four planning activities, the first of which is . a. defining the corporate mission b. establishing strategic business units and assigning resources (SBUs) c. assigning resources to each SBU d. assessing growth opportunities e. understanding target markets Page: 44 46. A clear, thoughtful mission statement provides employees with a shared sense of purpose, direction, and . a. profitability b. target market feasibility c. opportunity d. continuous improvement e. quality products Page: 44 76 Chapter 1: Marketing: Managing Profitable Customer Relationships 47. Mission statements are at their best when they reflect a . a. market b. strength c. competency d. vision e. value Page: 44 48. Which of the following terms matches to the phrase “it is a single business or collection of related businesses that can be planned separately from the rest of the company”? a. Strategic business unit. b. Diverse business unit. c. Growth business unit. d. Niche market unit. e. Specialized business unit. Page: 47 49. Market-penetration, product-development, and market-development strategies would all be examples of strategies. a. concentric b. conglomerate c. horizontal d. intensive growth e. integrative growth Page: 48 50. A(n) is when a company might seek new businesses that have no relationship to its current technology, products, or markets. a. concentric strategy b. conglomerate strategy c. horizontal strategy d. intensive growth strategy e. integrative strategy Page: 49 51. Which of the following terms most closely matches to “the shared experiences, stories, beliefs, and norms that characterize an organization”? a. Organizational dynamics. b. A business mission. c. An ethical/value statement. d. Customer relationships. e. Corporate culture. Page: 50 52. The first step in the business unit strategic-planning process deals with which of the following? a. Goal formulation. b. Business mission. c. Strategy formulation. Part 1: Defining Marketing and the Marketing Process d. Program formulation. e. SWOT analysis. Page: 51 53. When a business gets to know market segments intimately and pursues either cost leadership or differentiation within the target segment it is referred to as a . a. defined strategy b. focused strategy c. value-added strategy d. competitive advantage strategy e. customer-focused strategy Page: 56 54. If a firm pursues a strategy, it must be good at engineering, purchasing, manufacturing, and physical distribution. a. differentiation b. overall cost leadership c. focus d. domestic customer relationship e. market share Page: 56 55. To keep their strategic alliances thriving, corporations have begun to develop organizational structures to support them and have come to view the ability to form and manage partnerships as core skills. This is called . a. value managed partnership b. synergistic partnership c. centralized partnership d. partner relationship management e. win-win relationship management Page: 57 56. Traditionally, most businesses focused on stockholders. Today, the focus is on what are called . a. stakeholders b. partners c. regulators d. consumer triads e. supply-chain relationships Page: 58 57. A is a written document that summarizes what the marketer has learned about the marketplace and indicates how the firm plans to reach its marketing objectives. a. strategic plan b. marketing plan c. sales plan d. target market plan e. competitive analysis plan Page: 60 78Chapter 1: Marketing: Managing Profitable Customer Relationships 58. Which of the following permits senior management to grasp the marketing plan’s major thrust? a. The situation analysis. b. The marketing strategy. c. The executive summary and table of contents. d. Financial projections. e. Implementation and controls. Page: 60 59. Most marketing plans cover . a. one year b. two years c. three years d. four years e. five years Page: 60 60. The most frequently cited shortcomings of current marketing plans, according to marketing executives, are lack of realism, insufficient competitive analysis, and a focus. a. long-term b. profit c. short-run d. product e. price Page: 60 True/False 61. The traditional view of marketing is that the firm makes something and then sells it. Page: 36 62. The traditional view of marketing begins with a first step called strategic marketing. Page: 36 63. The formula, segmentation, targeting, and positioning (STP) is the essence of strategic marketing. Page: 37 64. The Japanese have extended the value delivery process by adding the concept of zero promotions after five years. Page: 38 65. The customer relationship management process is all the activities involved in receiving and approving orders, shipping the goods on time, and collecting payment. 79Part 1: Defining Marketing and the Marketing Process Page: 38 66. A principle of the value chain is that every firm is a synthesis of activities performed to design, produce, market, deliver, and support its product. Page: 38 67. Another name for a company’s value delivery network is “the intermediary team.” Page: 39 68. A core competency is usually common among competitors in a given industry. Page: 39 69. Holistic marketing focuses on the integration of value exploration, value creation, and value delivery as a means to build long-term relationships with consumers. Page: 40 70. If a manager asks “How can my company identify new value opportunities?,” he or she is examining a management question identified as being value creation. Page: 41 71. According to McKinsey research, a recommendation to managers and CEOs who are concerned about marketing performance was that marketers must test and develop programs more quickly as they enhance planning processes and research approaches. Page: 42 72. The marketing plan is the central instrument for directing and coordinating the marketing effort. Page: 43 73. A mission statement has as its primary focus the product and how to make it. Page: 44 74. One of the characteristics of a good mission statement is that it has an expansive number of goals for doing business. Page: 44 75. A good illustration of a market definition of the business a company is in would be “We sell gasoline.” Page: 46 76. If a company sought to expand the number of existing products sold to its current markets, it would use an integrative growth strategy labeled as “market- penetration strategy.” Page: 48 77. If a company sought to grow via a strategy that required the company to seek new businesses that have no relationship to its current technology, products, or markets, the company would be using a diversification strategy called a conglomerate strategy. 80 Chapter 1: Marketing: Managing Profitable Customer Relationships Page: 49 78. Scenario analysis can be used to assist companies in appraising how well their corporate culture might match (or not match) potential business partners or acquisitions. Page: 51 79. Once an organization has established a business mission in its business unit strategic-planning process, it may proceed to the second step of the planning process called goal formulation. Page: 51 80. Good illustrations of microenvironment actors in the strategic planning process would be demographics, technology, and the social-cultural arena. Page: 52 81. To evaluate opportunities, companies can use Market Opportunity Analysis (MOA) to determine the attractiveness and probability of success. Page: 53 82. An environmental threat is a challenge posed by an unfavorable trend or development that would lead, in the absence of defensive marketing action, to lower sales or profit. Page: 53 83. Once a SWOT analysis has been completed, the strategic planner is ready to proceed to the goal formulation stage of the strategic planning process model. Page: 54 84. In applying MBO (management by objectives) all objectives are treated as being equally important—objective discrimination is not allowed. Page: 54 85. For an MBO (management by objectives) system to work, one of the four criteria that the unit’s objectives must meet is that objectives must be stated quantitatively whenever possible. Page: 55 86. A strategy is a game plan for achieving what the business unit wants to achieve. Page: 56 87. Firms choosing a generic strategy centering on focus must be good at engineering, purchasing, manufacturing, and physical distribution. Page: 56 88. One of the four major categories of strategic alliance involves sharing personnel (e.g., human resource alliance) to staff alliance member marketing departments. Page: 57 81 Part 1: Defining Marketing and the Marketing Process 89. Partner Relationship Management (PRM) can be thought of as a corporation’s development of structures that support strategic alliances and treats the formation and management of partnerships as a core skill. Page: 57 90. Companies normally measure their profit performance using ROI; however, this approach suffers because profits are arbitrarily measured and subject to manipulation. Page: 58 91. A marketing vision statement is a written document that summarizes what the marketer has learned about the marketplace and indicates how the firm plans to reach its marketing objectives. Page: 60 92. Marketing plans are becoming more production-oriented because of the high costs of doing business in today’s economy. Page: 60 93. The marketing plan should open with a situation analysis. Page: 60 94. When a manager reaches the marketing strategy section of a marketing plan, he or she will define the mission and marketing and financial objectives. Page: 60 95. One of the key questions to ask in evaluating a marketing plan is whether the plan is simple or not. Page: 61 96. Such areas as sales forecasts, expense forecasts, and breakeven analysis are usually found in the financial projections section of the marketing plan. Page: 61 97. Return on investment (ROI) shows how many units must be sold monthly to offset the monthly fixed costs and average per-unit variable costs. Page: 61 98. Most marketing plans conclude with a section that indicates how the plan will be implemented. Page: 61 99. During the marketing strategy section of the marketing plan, goals and budgets are spelled out for each month or quarter so management can review each period’s results and take corrective action as needed. Page: 61 100. A good illustration of a marketing objective would to “decrease customer acquisition costs by 1.5 percent per quarter.” Page: 64 82Chapter 1: Marketing: Managing Profitable Customer Relationships Essay 101. There are two views of the value delivery process that may be followed by organizations seeking to gain business from consumers. Briefly, summarize each of those views. 102. The firm’s success depends not only on how well each department performs its work, but also on how well the various departmental activities are coordinated to conduct core business processes. List and briefly describe the five core business processes outlined in the text. 103. A successful company nurtures its resources and competencies. A core competency has three characteristics. Describe those characteristics. 104. A holistic marketing orientation can provide insight into the process of capturing customer value. In this vain, the holistic marketing framework is 83 Part 1: Defining Marketing and the Marketing Process designed to address three key management questions. Describe and illustrate each of these key management questions. Page: 41 105. Marketing faces a number of challenges in the twenty-first century. Based on an extensive 2002 research study, McKinsey (a noted consulting firm) identified three main challenges as reflected by differences in opinion between chief executive officers (CEOs) and their most senior marketing executives or chief marketing officers (CMOs). What were those challenges and which of the challenges do you think is most important? Why? 84 Chapter 1: Marketing: Managing Profitable Customer Relationships However, be sure that any answer chosen is supported by materials found in this section of the chapter. Page: 42 106. Indicate the differences and similarities between the following terms: marketing plan, strategic marketing plan, and tactical marketing plan. 107. Good mission statements are essential to being a success in business. Describe the three major characteristics that good mission statements should have. 108. Assessing growth opportunities involves planning new businesses, downsizing, or terminating older businesses. The company’s plans for existing businesses allow it to project total sales and profits. If there is a gap between future desired sales and projected sales, corporate management will have to develop or acquire new businesses to fill it. Identify and describe the three strategies that can be used to fill the strategic gap. 85 Part 1: Defining Marketing and the Marketing Process 109. Assume that you are directed to prepare short brief explaining the steps of the Business Unit Strategic-Planning Process. Your task is to construct such a brief by carefully outlining the steps of the aforementioned process. 110. As a marketing manager for a large steel company you have been assigned the task of educating a group of new managers on how to prepare a marketing plan. Though few of these managers will actually ever have to prepare such a plan because of their functional roles in the organization, it is still very useful that each new manager know how to construct a marketing plan. Prepare a brief summary of the contents of the marketing plan for the new managers. You may keep your discussion general or make it specific to the steel industry. APPLICATION QUESTIONS Multiple Choice 111. If a manager were following the traditional view of marketing wherein the firm makes something and then sells it, all of the following would part of the “sell the product” process sequence EXCEPT . a. price b. advertise/promote c. design product d. distribute e. service Page: 36 86 Chapter 1: Marketing: Managing Profitable Customer Relationships 112. As indicated in the text, critics of Nike and its shoe products often complain that . a. Nike has too many professional athletes endorsing their products b. Nike has an unfair advantage in product design c. Nike has unfair leverage with distributors d. Nike shoes cost almost nothing to make yet cost the consumer so much e. Nike does not support ecological causes Page: 37 113. According to the Japanese view of the value delivery process, the company should receive the required parts and supplies continuously through just-in- time arrangements with suppliers. This concept would be most appropriately called . a. zero customer feedback time b. zero product improvement time c. zero purchasing time d. zero setup time e. zero defect Page: 38 114. Apex Corporation is known in its industry being “best of class” in terms of costs and performance. Many companies will probably use Apex Corporation as a . a. target b. benchmark c. competitor to beat d. future supplier e. sounding board for ideas Page: 38 115. James Franks has been put in charge of gathering marketing intelligence, disseminating it within his organization, and eventually directing action on the information. Which of the following core business processes most closely matches with the task that Mr. Franks has been given? a. The market sensing process. b. The new offering realization process. c. The customer acquisition process. d. The customer relationship management process. e. The fulfillment management process. Page: 38 87Part 1: Defining Marketing and the Marketing Process 116. Netflix, the pioneer online DVD rental service, has what is called because they are excellent in broad business processes. a. core competency b. distinctive capabilities c. market savvy d. business touch e. intuitive synergy Page: 40 117. George Day sees organizations as excelling in three distinctive capabilities: market sensing, customer linking, and channel bonding. a. production-driven b. globally-driven c. human resource-driven d. engineering-driven e. market-driven Page: 40 118. Holistic marketers achieve profitable growth by expanding , building customer loyalty, and capturing customer lifetime value. a. design skills b. customer share c. promotion venues d. database resources e. competitive space share Page: 40 119. In the past Kodak was not necessarily known for embracing technology that did not come from Kodak engineers and designers. However, as Kodak addresses the digital revolution taking over the photographic industry, it wants customers to see it as a leader in digital photography and is moving away from its connection to print-only photography. This would be an example of which of the following value-creation steps? a. Redefining the big idea. b. Reshaping the business scope. c. Repositioning the company’s brand identity. d. Redoing its corporate logo. e. Researching its competitors. Page: 41 88 Chapter 1: Marketing: Managing Profitable Customer Relationships 120. According to a McKinsey report, CEOs need and expect all areas of their organizations to be more efficient. Which of the following statements would be the best illustration of this need and expectation? a. Doing more with more. b. Doing less with less. c. Doing less with more. d. Doing more with less. e. Doing about the same with more. Page: 42 121. According to a recent McKinsey report regarding characteristics that help to position marketers as business development leaders, illustrates one of those characteristics. a. “never bite off more than you can chew” b. “if it ain’t broke, don’t fix it” c. “always pursue Internet opportunities” d. “strike while the iron is hot” e. “identify profitable unmet needs before brainstorming creative solutions” Page: 42 122. According to Collins and Porras’ Built to Last, is characterized as a visionary company—acknowledged as the industry leader and widely admired because they set ambitious goals, communicated them to their employees, and embraced a high purpose beyond making money. a. General Electric b. Delta Airlines c. Farmer’s Insurance d. Wells Fargo e. McDonald’s Page: 43 123. Juan Garcia is seen as a planner because he plans the daily promotional releases about his company’s products and services. a. strategic b. selective c. tactical d. niche e. organizational Page: 43 Part 1: Defining Marketing and the Marketing Process 124. Sony’s former president, Akio Morita, wanted everyone to have access to “personal portable sound,” so his company created the Walkman and portable CD player. Which of the following planning aids most likely assisted Mr. Morita with his vision? a. The mission statement. b. A SWOT analysis. c. Knowledge of customers. d. A database. e. An executive summary to a formal marketing plan. Page: 44 125. Which of the following most closely matches a correct market-oriented definition of a business? a. Missouri-Pacific Railroad—we run a railroad. b. Xerox—we make copying equipment. c. Standard Oil—we sell gasoline. d. Encyclopedia Britannica—we distribute information. e. Columbia Pictures—we make movies. Page: 46 126. If you were the CEO of a company that was looking to implement strategies to fill a perceived strategic-planning gap, you would most likely explore growth first because it would be easier to improve an existing business rather than building a new one. a. intensive b. integrative c. diversification d. conglomerate e. concentric Page: 47 127. If you were the marketing manager of an organization that had chosen growth via current products sold to new markets, your organization would have chosen a strategy. a. market-penetration b. market-development c. product-development d. diversification e. concentric Page: 48 Chapter 1: Marketing: Managing Profitable Customer Relationships 128. describes the way people in an organization are dressed, how they talk to one another, and the way they greet their customers. a. Strategic orientation b. Competitive positioning c. Distinctive advantage d. HR training strategy e. Corporate culture Page: 50 129. Once an organization establishes its business mission, conducts a SWOT analysis, and goes through a goal formulation process, it is ready to go through a step called to continue with a strategic-planning process. a. program formulation b. strategy formulation c. implementation d. functional analysis e. feedback and control Page: 51 130. McDonald’s has often teamed up with Disney to offer products related to current Disney films as part of its meals for children. The best description of this form of alliance would a alliance. a. product alliance b. logistics alliance c. pricing collaboration d. service e. promotional Page: 57 Short Answer 131. If you were the marketing manager for small regional toy manufacturer who embraced strategic marketing application to your value creation and delivery sequence process, you would use three processes or acts to choose the value of your offer. Name those three processes. Page: 36 132. In the example of Gymboree, we learn that they are a 530-store chain that sells children’s clothing to upscale parents. Because there are not enough parents making more than $65,000 year to support more stores, Gymboree has created Janie and Jack, a chain selling upscale baby gifts. Hot Topic, a chain that sells rock-band inspired clothes for teens, recently launched Torrid to give plus-size teens the same fashion options. Instead of emphasizing making and selling, this company sees itself as part of a value delivery process. The value delivery process consists of three parts. What are those parts and what is their function? Part 1: Defining Marketing and the Marketing Process Page: 37 133. Define value chain. What does a value chain do? 134. If an organization was very strong at defining target markets and prospecting for new customers, which of the core business processes would this organization have mastered? 135. In a holistic marketing framework with respect to customer focus, what would be components that would match to value exploration, value creation, and value delivery? 136. What three spaces are discussed when a holistic marketing organization goes through a value exploration? Chapter 1: Marketing: Managing Profitable Customer Relationships 137. In the central role of strategic planning, only a handful of companies stand out as master marketers—Procter & Gamble, Southwest Airlines, Nike, Disney, Nordstrom, Wal-Mart, and McDonald’s to name a few. From a consumers perspective why do you think they stand out? Explain. 138. All corporate headquarters undertake four planning activities. What are those activities? 139. Porsche makes only expensive cars and Gerber serves primarily the baby market. Which of the major competitive spheres within which a company will operate matches most closely to the examples above? 140. Ansoft’s product-market expansion grid shows three intensive growth strategies that can be used to assist a marketing manager in finding creative ways to close a perceived strategic gap. Characterize each of the cells of Ansoft’s grid. 141. If a company decides to acquire one of its suppliers to gain more control or generate profit, it would have chosen which form of integrative growth 142. When Yahoo! began to flounder in the 2001, CEO Terry Semel imposed a more conservative, buttoned-down atmosphere on the freewheeling Internet Part 1: Defining Marketing and the Marketing Process startup. At the new Yahoo!, spontaneity is out and order is in. What term is most closely applied to the organizational change phenomenon described above? Be sure to explain what the term means with respect to the example provided. 143. Describe what happens in scenario analysis and explain why firms such as Royal Dutch/Shell Group use the technique. 144. Explain what happens in a SWOT analysis during the strategic planning process. Page: 52 145. What questions would typically be asked during a market opportunity analysis (MOA)? Page: 53 Chapter 1: Marketing: Managing Profitable Customer Relationships 146. For an MBO system to work, the business unit attempting to implement the process must meet four criteria. What are those criteria? 147. Which of Michael Porter’s generic strategies would be most appropriate for an organization that concentrates on achieving superior performance in an important customer benefit area valued by a large part of the market? Quality leadership would be one example of the end result of such a strategy. 148. When H&R Block and Hyatt Legal Services combined their efforts (two service businesses), they also joined marketing forces to create a strong alliance. Which of the alliance forms cited in the text most closely matches the H&R Block and Hyatt Legal Services alliance? Explain. 149. Characterize a marketing plan. Page: 60 150. During which stage of the marketing plan will the marketing manager establish the product line’s positioning? Chapter 3: Gathering Information and Scanning the Environment GENERAL CONCEPT QUESTIONS Part 1: Defining Marketing and the Marketing Process Multiple Choice 1. The major responsibility for identifying significant marketplace changes falls to the . a. U.S. Department of Labor b. company’s marketers c. American Marketing Association d. industry lobby groups found in Washington, D.C. e. marketing research industry Page: 72 2. Marketers have extensive information about how consumption patterns vary across countries. On a per capita basis within Western Europe, the smoke the most cigarettes. a. Swiss b. Greeks c. Irish d. Austrians e. French Page: 72 3. All of the following questions EXCEPT , would be considered to be forms of information needs probes. a. What decisions do you regularly make? b. What information do you need to make decisions? c. What data analysis programs would you want? d. What magazines and trade reports would you like to see on a regular basis? e. What products would be most closely matched to consumer needs? Page: 73 96 Chapter 1: Marketing: Managing Profitable Customer Relationships 4. consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers. a. A marketing information system b. A marketing research system c. A marketing intelligence system d. A promotional campaign e. A marketing database Page: 73 5. The company’s marketing information system should be a cross between what managers think they need, what managers really need, and . a. what the marketing research department is able to do b. what consumers are willing to share c. what the competition is doing d. what is acceptable industry practice e. what is economically feasible Page: 73 6. Marketing managers rely on internal reports. By analyzing this information, they can spot . a. micro-markets b. opportunities and problems c. macro-markets d. competitive strategies e. consumer demographic units Page: 73 7. The heart of the internal records system is the . a. database b. asset acquisition process c. order-to-payment cycle d. service consideration e. information liquidity ratio Page: 73 8. When a marketer “mines” his or her company’s database, fresh insights can be gained into neglected customer segments, , and other useful information. a. recent customer trends b. long-term competitive trends c. possible new inventions d. possible new technologies e. new primary data possibilities Page: 74 9. The internal records system supplies results data, but the marketing intelligence system supplies data. a. concurrent b. secondary c. research 97 Part 1: Defining Marketing and the Marketing Process d. happenings e. premium Page: 74 10. A is a set of procedures and sources managers use to obtain everyday information about developments in the marketing environment. a. marketing research system b. marketing information system c. product management system d. marketing intelligence system e. vertical system Page: 74 11. A company can take several steps to improve the quality of its marketing intelligence. If the company purchases competitive products for study, attends open houses and trade shows, and reads competitors’ published reports and stockholder information, the company is using to improve the quality of its marketing intelligence. a. sales force surrogates b. intermediaries c. external networks d. advisory panels e. customer feedback systems Pages: 74–75 12. All of the following would be considered to be steps to improve the quality of marketing intelligence in a company EXCEPT . a. a company can train and motivate the sales force to spot and report new developments b. a company can use guerrilla tactics such as going through a competitor’s trash c. a company can motivate intermediaries to pass along important information d. a company can network externally e. a company can purchase information from outside suppliers Pages: 74–76 98 Chapter 1: Marketing: Managing Profitable Customer Relationships 13. The 2000 U.S. census provides an in-depth look at the population swings, demographic groups, regional migrations, and changing family structure of 281 million people. Which of the following steps to improve the quality of company marketing intelligence system would be most closely associated the above illustration? a. A company can purchase information from outside suppliers. b. A company can take advantage of government data sources. c. A company can use online customer feedback systems to collect data. d. A company can network externally. e. A company can use its sales force to collect and report data. Page: 76 14. There are four main ways that marketers can find relevant online information on competitors’ products and weaknesses, and summary comments and overall performance rating of a product, service, or supplier. is(are) a type of site that is concentrated in financial services and high-tech products that require professional knowledge. a. Independent customer goods and service reviews b. Distributor or sales agent feedback sites c. Combo-sites offering customer reviews and expert opinions d. Customer complaint sites e. Shopping bot service sites Page: 77 15. A is “unpredictable, short-lived, and without social, economic, and political significance.” a. fad b. fashion c. trend d. megatrend e. style Page: 77 16. A is a direction or sequence of events that has some momentum and durability; the shape of the future is revealed and many opportunities are provided. a. fad b. fashion c. trend d. megatrend e. style Page: 77 99 Part 1: Defining Marketing and the Marketing Process 17. have been described as “large social, economic, political and technological changes [that] are slow to form, and once in place, they influence us for some time—between seven and ten years, or longer. a. Fads b. Fashions c. Trends d. Megatrends e. Styles Page: 77 18. Which of the following minority groups in the United States has been associated with one of the ten megatrends shaping the consumer landscape? a. African Americans b. Asian Americans c. European Americans d. Hispanic Americans e. Middle Eastern Americans Page: 78 19. The beginning of the new century brought a series of new challenges. All of the following would be considered to be among those challenges EXCEPT . a. a deterioration of innovative ideas b. steep decline of the stock market c. increasing unemployment d. corporate scandals e. the rise of terrorism Page: 78 20. With the rapidly changing global picture, the firm must monitor six major forces. All of the following would be among those forces EXCEPT . a. demographic b. economic c. social-cultural d. natural e. promotional Page: 78 21. The main demographic force that marketers monitor is(are) . a. suppliers b. competitors c. communication (such as advertising) d. government reports dealing with birth rates e. population Page: 79 22. The population explosion has been a source of major concern. Unchecked population growth and consumption could eventually result in all of the following EXCEPT . a. insufficient food supply b. depletion of key minerals 100 Chapter 1: Marketing: Managing Profitable Customer Relationships c. overcrowding d. restrictions on competition e. pollution Page: 79 23. One impact of explosive population growth is illustrated by the case of China. The Chinese government passed regulations limiting families to one child. One consequence of these regulations is that . a. the children are so fussed over and spoiled that they become “little emperors” b. school enrollments are dropping c. the fledgling automotive business in China will not have customers in a few years d. open rebellion is being preached e. “child-oriented businesses” have few customers Page: 80 24. A significant fact about population growth and population shifts is that in 2004 or 2005, . a. the youth market will exceed that of the adult market b. people over the age of 60 will outnumber those under five years of age c. baby boomers will be eclipsed by Gen X young adults d. most age group segments will be about equal e. Gen Y young adults will surpass the baby boomers as the largest age segment Page: 80 25. Which of the following age groups is thought to control three-quarters of the country’s wealth? a. 0–20 age segment b. 60 age segment c. 20–30 age segment d. 30–40 age segment e. 40 age segment Page: 81 101 Part 1: Defining Marketing and the Marketing Process 26. At one time the United States was called a “melting pot” society because of the number of different cultures that were integrated into the U.S. culture. Today, the United States is described as a society because many ethnic groups are maintaining their ethnic differences, neighborhoods, and cultures. a. “boiling pot” b. “salad bowl” c. “banana split” d. “doubled up” e. “non-communicative” Page: 81 27. According to the 2000 census, the U.S. population of 276.2 million was 72 percent white and percent African American. The remainder consisted of Hispanic Americans and other minorities. a. 20 b. 18 c. 15 d. 13 e. 11 Page: 81 28. Diversity goes beyond ethnic and racial markets. More than million Americans have disabilities, and they constitute a market for home delivery companies (and others). a. 50 b. 40 c. 30 d. 20 e. 10 Page: 83 29. Which of the following countries is known for having 99 percent of its population literate? a. England b. Germany c. France d. United States e. Japan Page: 83 102 Chapter 1: Marketing: Managing Profitable Customer Relationships 30. The household consists of a husband, wife, and children (and sometimes grandparents). a. “traditional” b. “extended” c. “diversity” d. “modern” e. “revised” Page: 83 31. Married couple households—the dominant cohort since the formulation of the United States—has slipped from nearly 80 percent in the 1950s to around percent today. a. 70 b. 60 c. 50 d. 40 e. 35 Page: 83 32. The twenty-first century saw markets grow more rapidly again due to a higher birth rate, a lower death rate, and rapid growth from foreign immigration. a. suburban b. urban c. rural d. coastal e. secondary Page: 84 33. The movement by population to the has lessened the demand for warm clothing and home heating equipment and increased demand for air conditioning. a. Grainbelt b. Pacific Northwest c. Sunbelt d. Mid-Coastal areas e. Heartland Page: 84 103 Part 1: Defining Marketing and the Marketing Process 34. Marketers look at where consumers are gathering. Almost one in people over the age of five (120 million) moved at least one time between 1995 and 2000, according to a Census 2000 brief. a. two b. three c. four d. five e. ten Page: 85 35. In which of the following economies would we expect to find few opportunities for marketers? a. Industrializing economies. b. Land-locked economies. c. Raw-material-exporting economies. d. Industrial economies. e. Subsistence economies. Page: 86 36. According to information presented in the text, which of the following countries is surprisingly a very good market for Lamborghini automobiles (costing more than $150,000) because of the number of wealthy families that can afford expensive cars. a. Greece b. Switzerland c. Holland d. Russia e. Portugal Page: 86 37. Over the past three decades in the United States, the rich have grown richer and the middle class has . a. stayed about the same b. shrunk c. increased slightly d. matched the rich in terms of relative growth e. been ignored because of problems with the poorer classes Page: 86 38. shapes the beliefs, values, and norms that largely define the tastes and preferences. a. Marketing b. The mass media c. Government d. Production innovation and engineering e. Society Page: 87 39. If a consumer lives the lifestyle of a “pleasure seeker” or goes on a “self- realization” quest, he or she is expressing what is called . a. views of others 104 Chapter 1: Marketing: Managing Profitable Customer Relationships b. views of society c. views of themselves d. views of organizations e. views of the universe Pages: 87–88 40. According to the information found in the social-cultural environment, with respect to views of others, are considered to be things that allow people who are alone to feel they are not (e.g., television, home video games, and chat rooms on the Internet). a. social surrogates b. subliminal fantasies c. relationship avoidance d. primary products e. secondary products Page: 88 41. Today, corporations need to make sure that they are good corporate citizens and that their consumer messages are honest. Such a view would be consistent with which of the following views? a. Views of others. b. Views of organizations. c. Views of themselves. d. Views of the universe. e. Views of society. Page: 88 42. People vary in their attitudes toward their society. usually live more frugally, drive smaller cars, and wear simpler clothing. a. Makers b. Escapers c. Seekers d. Changers e. Developers Page: 88 105 Part 1: Defining Marketing and the Marketing Process 43. People vary in their attitudes toward society and react accordingly. are a major market for movies, music, surfing, and camping. a. Makers b. Preservers c. Escapers d. Changers e. Developers Page: 88 44. All of the following have been cited by the text as being among Americans’ core values EXCEPT . a. they believe in work b. they believe in getting married c. they believe in giving to charity d. they believe in being honest e. they believe in sexual permissiveness Page: 88 45. Which of the following would be the best illustration of a secondary belief or value? a. Belief in work. b. Belief in giving to charity. c. Belief in getting married. d. Belief in getting married early. e. Belief in being honest. Page: 88 46. Which of the following is by far the most popular American leisure activity in that it is preferred by 59 percent of adults who participate in such activities? a. Gardening. b. Walking for exercise. c. Swimming. d. Photography. e. Jogging or running. Page: 89 47. Each society contains , groups with shared values emerging from their special life experiences or circumstances. a. demographic segments b. cliques c. consumer bundles d. subcultures e. behavioral niches Page: 89 106 Chapter 1: Marketing: Managing Profitable Customer Relationships 48. Which of the following would be the best illustration of a subculture? a. A softball team. b. A university alumni association. c. Teenagers. d. A Boy Scout troop. e. Frequent flyers. Page: 89 49. All of the following EXCEPT have been found to influence young people today and cause a shift of secondary cores values for this group. a. U2’s Bono. b. Elvis Presley. c. The NBA’s LeBron James. d. Golf’s Tiger Woods. e. Skateboarder Tony Hawk. Page: 89 50. Although core values are fairly persistent, cultural swings do take place. caused such a swing in the 1960s. a. Ford Motor Company b. George McGovern c. G.I. Joe action characters d. The infomercial e. The Beatles Page: 89 51. Marketers need to be aware of threats and opportunities associated with four trends in the natural environment. All of the following are among those trends EXCEPT . a. the shortage of raw materials b. the increased cost of energy c. near 90 percent corporate support for “green causes” d. increased pollution levels e. the changing role of governments Page: 90 52. With respect to the shortage of raw materials, air and water are classified as resources. However, as we know, problems are beginning to plague both our air and water quality. a. infinite b. near finite c. finite renewable d. finite nonrenewable e. absolute Page: 90 107 Part 1: Defining Marketing and the Marketing Process 53. One finite nonrenewable resource, , has created serious problems for the world economy. Because of anticipated shortages, investment and commodity markets have had wild swings. a. water b. air c. sugar d. coffee e. oil Page: 90 54. From a branding perspective, “green marketing” programs have not been entirely successful. has been cited as one of the obstacles that must be overcome for “green marketing” programs to be more successful. a. Overexposure and lack of credibility b. High cost c. Poor promotions d. Resistance by the youth segment in the marketplace e. Lack of support by governmental agencies and concerns Page: 91 55. Which of the following countries is noted for their “green movement” and support within its government for environmental quality enhancement? a. Mexico b. China c. Germany d. England e. Italy Page: 91 56. The marketer should monitor the following trends in technology, EXCEPT , if progress is to be made in business. a. the pace of change b. the difficulties found in sharing information c. the opportunities for innovation d. varying R&D budgets e. increased regulation Page: 92 57. According to some industry analysts and inventors, will eventually eclipse the PC as our most important technological device. a. iPod b. HDTV c. holographic television d. the mobile phone e. solar-powered car Page: 92 58. All of the following will most likely be among the advantages for a society that embraces telecommuting as an employment/communication alternative EXCEPT . a. reduction of auto pollution 108 Chapter 1: Marketing: Managing Profitable Customer Relationships b. bringing the family closer together c. increased bonuses and compensation perks d. creating more home-centered shopping e. entertainment centered on the home environment Page: 92 59. legislation has as its purposes to protect companies from unfair competition, to protect consumers from unfair business practices, and to protect the interests of society from unbridled business behavior. a. Business b. Consumer c. Bi-partisan d. Activist e. Global Page: 94 60. An important force affecting business is the —a movement of citizens and government organized to strengthen the rights and powers of buyers in relation to sellers. a. lobbyist movement b. consumerist movement c. environmental movement d. self-rights movement e. ethical reform movement Page: 95 True/False 61. The major responsibility for identifying significant marketplace changes falls to the company’s marketers. Page: 72 62. Today, most firms are rather sophisticated about gathering information. Page: 72 63. A marketing information system is developed from internal company records, marketing intelligence, and promotional models supplied by the marketing department. Page: 73 109 Part 1: Defining Marketing and the Marketing Process 64. The heart of the internal records system is the bar code. Page: 73 65. According to principles found in database construction and usage, a “carpet bombing” mail out of a new offer is usually the most successful strategy. Page: 74 66. The internal records system supplies results data, but the marketing intelligence system supplies happenings data. Page: 74 67. If a company were pursuing a policy of networking externally it might collect competitors’ ads or look up news stories about competitors. Page: 75 68. One of the ways to find relevant online information on competitors’ strengths and weaknesses might be to frequent distributor or sales agent feedback sites. Page: 76 69. A style is unpredictable, short-lived, and without social, economic, and political significance. Page: 77 70. A megatrend has been described as being what follows all fads that stay on the market at least one year. Page: 77 71. One of the ten significant megatrends that will impact marketing efforts in the future is delayed retirement. Page: 78 72. Microenvironmental forces have been labeled as being “uncontrollable.” Page: 78 73. The main demographic force that marketers monitor is population. Page: 79 74. If the world were a village of 1,000 people, it would consist of 520 men and 480 women. Page: 79 75. A growing population always means a growing market. Page: 80 76. Japan has one of the world’s oldest populations. Page: 80 77. According to population studies, Gen X (numbering 72 million) is almost the same size as the huge baby boomer market. Page: 81 110 Chapter 1: Marketing: Managing Profitable Customer Relationships 78. At present the largest minority in the United States is the Latinos with 13 percent of the total population. Page: 81 79. In the United States, 10 to 15 percent of the population may be functionally illiterate. Page: 83 80. Based on research done in England, a conclusion drawn about families is that “friends are the new family.” Page: 83 81. According to studies of minority markets, the disabled market is ten times more likely to be in a professional job, almost twice as likely to own a vacation home, eight times more likely to own a notebook computer, and twice as likely to own individual stocks as compared to the general population. Page: 84 82. Urban markets are once again growing because of higher birth rates, a lower death rate, and rapid growth from foreign immigration. Page: 84 83. The small office—home office segment of our society has grown to nearly 40 million; thereby, boosting the sales of electronic conveniences and ready to assemble furniture. Page: 85 84. Almost one in two people over the age of five (120 million) moved at least one time between 1995 and 2000, according to a Census 2000 brief. Page: 85 85. Available purchasing power in an economy depends on mainly one facet—supply and demand. Page: 85 86. A good illustration of a raw-material exporting economy is Egypt. Page: 86 87. Conventional retailers who offer medium-priced goods are the most vulnerable to the growing trend in the United States called a two-tier market. Page: 86 88. Through outsourcing, companies can feasibly cut between 20 to 70 percent of their labor costs. Page: 87 89. “Pleasure seekers” of the 1970s had their beliefs, values, and norms shaped by views of others. Pages: 87–88 111 Part 1: Defining Marketing and the Marketing Process 90. If a single person has a home entertainment system that is rich in television capabilities and home video games, he or she may be using such a system as a “social surrogate.” Page: 88 91. In recent years, because of a tough job market, there has been an increasing amount of organizational loyalty among most employees. Page: 88 92. If a young college student decides to join the military to defend the principles of his or her country, the student would be classified as a “changer.” Page: 88 93. Most Americans still believe in getting married as a core belief. Page: 88 94. Teenagers would be a good example of a culture in the United States. Page: 89 95. Marketers need to be aware of the threats and opportunities associated with the trend toward increased pollution levels. Page: 90 96. Research studies have shown that consumers as a whole may not be willing to pay a premium for environmental benefits. Page: 91 97. Every new technology is a force for “creative destruction.” Page: 92 98. Virtual reality is giving consumers what they dream about. Page: 93 99. One of the major trends in the political-legal environment is the trend toward the growth of special interest groups. Page: 93 100. Today, customers are still willing to swap personal information for customized products from firms. Page: 95 Essay 101. Describe a marketing information system (MIS). From what sources is the MIS developed? Suggested marketing information system (MIS) consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers. A 112 Chapter 1: Marketing: Managing Profitable Customer Relationships marketing information system is developed from internal company records, marketing intelligence activities, and marketing research. Page: 73 102. Describe the order-to-payment cycle and why it is important to internal records information keeping. 103. What are the various steps to improve the quality of its marketing intelligence function that can be taken by a company? 113 Part 1: Defining Marketing and the Marketing Process 104. List and briefly describe the four main ways marketers can find relevant online information on competitors’ strengths and weaknesses, and summary comments and overall performance rating of a product, service, or supplier. Page: 77 105. What is a “megatrend”? Briefly describe five megatrends shaping the consumer landscape. Pages: 77–78 106. What is the main demographic force monitored by marketers? Why? 107. Describe the two dominant “household patterns” in the last 50 years. 114 Chapter 1: Marketing: Managing Profitable Customer Relationships 108. People absorb, almost unconsciously, a worldview that defines their relationships. List and describe the “views” that assist or retard this relationship development process. 109. Describe the differences between a core belief and a secondary belief. List the primary core beliefs of Americans as revealed by the text. 110. Many marketers have tried and failed with “green sales pitches” (appeals to o

Exam 19 September 2017, questions and answers Chapter 11-20 Exam 19 September 2017, questions and answers Marketing Management (Alliance University) Chapter 11 to Chapter 20 Chapter 11: Dealing with Competition GENERAL CONCEPT QUESTIONS Multiple Choice 415. Michael Porter has identified five forces that determine the intrinsic long-run attractiveness of a market or market segment. Which of the following would NOT be among Porter’s five forces? a. Industry competitors b. Technological partners c. Substitutes d. Buyers e. Potential entrants Page: 342 416. Which of the following would be the most likely threat that is associated with potential new entrants in Porter’s segment structural attractiveness model? a. Threat of positioning b. Threat of response c. Threat of delayed action d. Threat of role reversal e. Threat of mobility Page: 342 417. A segment is unattractive when there are actual or potential for the product. a. contenders b. competitors c. substitutes 342 Chapter 1: Marketing: Managing Profitable Customer Relationships d. unclear demand e. profit fluctuation Page: 343 418. Wal-Mart is perhaps one of the best illustrations of the threat of found in Porter’s model. a. intense segment rivalry b. new entrants c. substitute products d. buyers’ growing bargaining power e. suppliers’ growing bargaining power Page: 343 419. A segment is unattractive if the company’s suppliers are able to raise prices or reduce quantity supplied. Which of the following is the best illustration of the threat of suppliers’ growing bargaining power? a. Wal-Mart has almost no competitors in its market space. b. Oil companies must purchase a significant amount of their product from OPEC. c. McDonald’s is the largest fast food franchise and is still growing. d. The U.S. Post Office has merged package operations with FedEx. e. Sears unsuccessfully attempted to compete with Wal-Mart and Kmart. Page: 343 420. A(n) is a group of firms that offer a product or class of products that are close substitutes for one another. a. industry b. cartel c. cooperative d. monopoly e. demand field Page: 344 421. When only one firm provides a certain product or service in a certain country or area a exists. a. duopoly b. monopoly c. oligopoly d. monopolistic competition e. pure competition Page: 344 422. Which of the following would be the best illustration of a pure oligopoly? a. Autos b. Cameras c. Steel d. Pharmaceuticals e. High fashion clothing Page: 344 343 Part 1: Defining Marketing and the Marketing Process 423. Which of the following is often considered to be a good illustration an industry structure type known as pure competition? a. Oil b. Plastics c. Pharmaceuticals d. High fashion clothing e. Stock market Page: 344 424. All of the following are considered to be major entry barriers in markets EXCEPT . a. high capital requirements b. economies of scale c. patents and licensing requirements d. product or service line e. reputation requirements Page: 345 425. If a marketer is facing government restrictions, high vertical integration, emotional barriers, low asset-salvage value due to obsolescence, and legal obligations to creditors, the marketer is most likely facing what are called barriers in a marketplace. a. exit b. entrance c. competitive d. virtual e. contrived Page: 345 426. Major oil producers carry on oil exploration, oil drilling, oil refining, chemical manufacture, and service-station operation. When an organization does all of these separate tasks within a distribution channel they can be said to have achieved what is called . a. vertical integration b. horizontal integration c. concentric integration d. parallel marketing e. conglomerate marketing Page: 346 427. Using the market approach, are companies that satisfy the same customer need. a. partners b. competitors c. entrepreneurs d. innovators e. followers Page: 346 344 Chapter 1: Marketing: Managing Profitable Customer Relationships 428. A group of firms following the same strategy in a given target market is called . a. cartel b. cabal c. cooperative d. informal alliance e. strategic group Page: 347 429. An example of a strategic group in the appliance industry would be one where . a. there was a large franchised dealer system b. a common promotional theme used c. competitors had broad lines, medium manufacturing costs, low service responsibility, and low prices d. multinational operations are mandated e. a value orientation rather than a cost orientation Page: 347 430. Once a company has identified its main competitors and their strategies, it must next ask: ? a. What are the competitors’ objectives b. What are the competitive brand attributes c. What are the competitive promotion schemes d. What is the attrition rate in the market e. What are the subtle market entrance requirements Page: 347 431. In general, a company should monitor the following variables when analyzing competitors: , share of mind, and share of market. a. share of demand b. share of profits c. share of promotion d. share of universe e. share of heart Page: 348 432. is the percentage of customers who named the competitor in responding to the statement, “Name the company from which you would prefer to buy the product.” a. Share of market b. Share of mind c. Share of heart d. Share of competitive space e. Share of psychological field Page: 348 433. Most companies aim their competitive shots at competitors, because this requires fewer resources per share point gained. a. strong 345 Part 1: Defining Marketing and the Marketing Process b. weak c. distant d. “good” e. unacknowledged Page: 348 434. competitors try to buy market share rather than earn it; take large risks; invest in overcapacity; and upset industrial equilibrium. a. “Bad” b. “Good” c. Distant d. Close e. Strong Page: 349 435. In general, a market leader will have about of the total market in relation to other competitors. a. 60 percent b. 50 percent c. 40 percent d. 30 percent e. 75 percent Page: 349 436. The market nicher serves small market segments not being served by larger firms. Nichers account for about of the market in relation to other competitors. a. 30 percent b. 25 percent c. 20 percent d. 15 percent e. 10 percent Page: 349 437. The aim of benchmarking is to copy or improve on , either within an industry or across industries. a. profitability b. manufacturing c. ideation d. aggressiveness e. “best practices” Page: 349 438. Being a market leader is often a difficult position to maintain and defend. The market leader must protect its current market share through good defensive and offensive actions. Second, the firm can try to increase its market share, even if the market size remains constant. What is the third course of action recommended for market leaders? a. The firm must find be a cost leader. b. The firm must find new, innovative technologies on a monthly basis. 346 Chapter 1: Marketing: Managing Profitable Customer Relationships c. The firm must strive to win promotional awards. d. The firm must find ways to expand total market demand. e. The firm must pursue markets others do not want. Page: 350 439. As a marketing manager, you have decided to pursue new customers with your established products. Specifically, the new customers that you want are those who might use the product but do not at present. Which of the following strategies is recommended to pursue such a customer market? a. Market-penetration strategy b. New-market segment strategy c. Geographical-expansion strategy d. Needs-assessment strategy e. Consolidation strategy Page: 350 440. One of the market leader strategies for expanding the total market is to focus on more usage. Two avenues are open for doing this: increasing the frequency of consumption or . a. increasing adherence to everyday low pricing b. decreasing the number of product returns c. increasing the level or quantity of consumption d. increasing the level of promotional expenditures relative to market share percentage e. decreasing sales-related expenses Page: 350 441. To counter value-based players, it will be necessary to focus on areas where their business models give other companies room to maneuver. For example, instead of directly competing with Wal-Mart and other retailers, Walgreen’s emphasizes convenience across all elements of its business. Which of the following general strategies is Walgreen’s using as its main competitive focus? a. Execution b. Implementation c. Vertical integration d. Differentiation e. Cost leadership Page: 351 442. Market leaders are constantly under attack from large and small competitors alike. What is the most constructive response a market leader can make when defending its terrain? a. Basic cost control. b. Expanding expected benefits. c. Expanding desired benefits. d. Meet all challengers with a swift response. e. Continuous innovation. Page: 352 347 Part 1: Defining Marketing and the Marketing Process 443. Caterpillar has become dominant in the construction-equipment industry despite charging a premium price and being challenged by a number of able competitors. All of the following have been cited as policies used by Caterpillar to meet its competitors EXCEPT . a. limited-line strategy b. premium performance c. superior service d. extensive and efficient dealership system e. good financing Page: 352 444. Sony is an unusual market leader. It gives its customers new products that they have never even asked for (e.g., Walkmans, VCRs, video cameras, CDs). This makes Sony a(n) firm. a. market-driven b. market-driving c. operations-driven d. vision-driven e. virtually-driven Page: 353 445. defense involves occupying the most desirable market space in the minds of the consumers, making the brand almost impregnable. a. Position b. Flank c. Preemptive d. Mobile e. Contraction Page: 353 348 Chapter 1: Marketing: Managing Profitable Customer Relationships 446. A marketing manager has planned a strategy that will require that the organization erect outposts to protect its weak front-running brands. Because these outposts will be central to the organization’s new competitive strategy, we can say that a defense is being used. a. position b. flank c. preemptive d. counteroffensive e. mobile Page: 354 447. The “best defense is a good offense” would be a policy under which of the following market leader defensive strategies? a. Position defense b. Flank defense c. Contraction defense d. Preemptive defense e. Lateral defense Page: 354 448. Market broadening and market diversification are likely tactics employed in which of the following market leader defensive strategies? a. Position defense b. Flank defense c. Preemptive defense d. Counteroffensive defense e. Mobile defense Page: 354 449. Because the cost of buying higher market share may far exceed its revenue value, a company should consider four factors before pursuing increased market share. All of the following would be among those four factors EXCEPT . a. the possibility of provoking antitrust action b. economic cost c. pursuing the wrong marketing-mix strategy d. the likelihood that an award-winning promotional campaign can be generated e. the effect of increased market share on actual and perceived quality Page: 355 349 Part 1: Defining Marketing and the Marketing Process 450. Some market leaders have increased profitability by selectively market share in weaker areas. a. decreasing b. increasing c. protecting d. sharing e. trading Page: 355 451. All of the following companies have been characterized as being market challengers in their respective fields EXCEPT . a. Toyota b. British Airways c. Boeing d. Honda e. Proctor & Gamble Page: 355 452. A market challenger must decide who to attack. All of the following are considered as likely possible targets (as per information found in the text) EXCEPT . a. it can attack the market leader b. it can attack firms its own size that are not doing the job c. it can attack firms its own size that are underfinanced d. it can attack a global conglomerate that is market hungry e. it can attack small local firms Page: 356 453. All of the following are considered to be viable attack strategies that can be employed by a market challenger EXCEPT . a. counteroffensive attack b. frontal attack c. flank attack d. bypass attack e. guerilla warfare Pages: 356–358 454. According to attack strategies available to the market challenger, the can be used when the challenger spots areas where the opponent is underperforming. a. encirclement attack b. frontal attack c. flank-geographic-attack d. backwards-flank-attack e. guerilla warfare Page: 356 455. Sally Seabrook is an up-and-coming marketing manager for a large department store chain. Ms. Seabrook has distinguished herself with bold strategies such as launching attacks on her primary competitor from several fronts 350 Chapter 1: Marketing: Managing Profitable Customer Relationships (including advertising, new store openings, price cuts, new distributor alliances, and creative merchandising). Her “blitz” is comparable to any done by the military in time of war. Which of the following market challenger attack strategies is Ms. Seabrook using to attack her competition? a. Frontal attack b. Bypass attack c. Guerrilla warfare d. Flank attack e. Encirclement attack Page: 357 456. A marketing manager of a market challenger-type organization has decided to “leapfrog” competition by moving into cutting-edge technologies. This indirect approach to attacking competition can be characterized as being what is called the . a. flank attack b. encirclement attack c. bypass attack d. guerrilla warfare e. frontal attack Page: 357 457. A market challenger strategist must carefully consider all attack options before moving forwards. If the strategist chooses the approach, selective price cuts, intense promotional blitzes, and occasional legal action will probably be commonplace in the strategic design. a. frontal attack b. flank attack c. bypass attack d. encirclement attack e. guerilla warfare Page: 358 458. All of the following are considered to be valid market challenger attack strategies EXCEPT . a. price discounts b. lower price goods c. prestige goods d. partnerships with rival market leaders e. product proliferation Pages: 358–359 459. Avon became a major cosmetics company by perfecting door-to-door selling instead of battling other cosmetic firms in conventional stores. This is an example of which of the following specific market challenger attack strategies? a. Manufacturing-cost reduction b. Intensive advertising promotion c. Distribution innovation d. Product innovation e. Product proliferation 351 Part 1: Defining Marketing and the Marketing Process Page: 359 460. Which of the following best describes the premise of Theodore Levitt’s “Innovative Imitation” article? a. Imitation is wrong and should be punished. b. Product imitation might be as profitable as a strategy of product innovation. c. Innovation is not possible without substantial imitation. d. Innovation cannot begin unless dissatisfaction with imitation occurs. e. Imitation should be against the law because of the intellectual property decision involved. Page: 359 461. Many companies prefer to follow rather than challenge the market leader. Patterns of are common in capital-intensive, homogeneous-product industries, such as steel, fertilizers, and chemicals. Competitors present similar offers to buyers, usually by copying the leader. Market shares show high stability. a. “conscious parallelism” b. “feature fashion” c. “covert security analysis” d. “supply delay” e. “predatory pricing” Page: 360 462. All of the following are considered to be viable market follower strategies EXCEPT . a. counterfeiter b. cloner c. imitator d. innovator e. adapter Pages: 360–361 352 Chapter 1: Marketing: Managing Profitable Customer Relationships 463. As a market follower strategy, the emulates the leader’s products, name, and packaging, with slight variations. a. counterfeiter b. cloner c. imitator d. adapter e. innovator Page: 361 464. As a market follower strategy, the copies some things from the leader but maintains differentiation in terms of packaging, advertising, pricing, or location. This strategy is tolerated by the market leader as long as the follower’s aggressiveness does not mount. a. counterfeiter b. cloner c. imitator d. adapter e. innovator Page: 361 465. An alternative to being a market follower in a large market is to be a leader in a small market. This type of competitor is called a(n) . a. marketing knave b. market nicher c. segment king d. guerilla marketer e. strategic clone Page: 362 466. Which of the following tennis shoe companies is considered to be a market nicher? a. New Balance b. Adidas c. Reebok d. Wal-Mart brand tennis shoes e. Nike Page: 362 467. In terms of comparisons with a market leader, whereas the market leader achieves high volume, the market nicher achieves . a. high margin b. low margin c. high promotability d. medium pricing e. lower demand Page: 362 468. The key idea in successful nichemanship is specialization. Which of the following specialists would most closely be identified with the characterization of being an organization that limits its selling to one customer? 353 Part 1: Defining Marketing and the Marketing Process a. End-user specialist b. Vertical-level specialist c. Customer-size specialist d. Specific-customer specialist e. Quality-price specialist Page: 364 469. A market nicher is considered to be a specialist if the firm specializes in producing a certain type of product or product feature such as Rent- a-Wreck that rents only “beat-up” cars. a. end-user b. vertical-level c. customer-size d. channel e. product-feature Page: 364 470. Which of the following strategies for entering a market held by incumbent firms would be best if the desire was to position away from the dominant brand with a comparable or premium price and heavy advertising spending to establish the new brand as a credible alternative? a. Differentiation b. Challenger c. Niche d. Premium e. Standard Page: 364 471. Which of the following types of companies is characterized as having a “fighter orientation”? a. Customer-centered b. Competitor-centered c. Distribution-centered d. Promotion-centered e. Niche-centered Page: 365 354 Chapter 1: Marketing: Managing Profitable Customer Relationships 472. Which of the following types of companies is characterized as being “too reactive”? a. Competitor-centered b. Customer-centered c. Service-centered d. Distribution-centered e. Niche-centered Page: 365 473. Which of the following types of companies is felt to be in a better position to identify new opportunities? a. Competitor-centered b. Consumer-centered c. Nicher-centered d. Distribution-centered e. Organization-centered Page: 365 474. In a company, the obsession of the company is with the customer, not the competition. a. niche-centered b. price-centered c. cost-centered d. customer-centered e. promotion-centered Page: 365 True/False 475. Markets have become too competitive to just focus on the consumer alone. Answer: True Page: 342 476. A market is unattractive if it already contains numerous, strong, or aggressive competitors. Answer: True Page: 342 477. The most attractive segment is one in which the entry barriers are low and exit barriers are high. Answer: False Page: 342 478. Many businesses have failed to look to the Internet for their most formidable competitors. Answer: True Page: 343 355 Part 1: Defining Marketing and the Marketing Process 479. An industry is a group of firms that offer a product or class of products that are close substitutes for one another. Answer: True Page: 344 480. In a pure monopoly, a small number of large firms produce products that range from highly differentiated to standardized. Answer: False Page: 344 481. In monopolistic competition, competitor’s focus on market segments where they can meet customers’ needs in a superior way and command a price premium. Answer: True Page: 344 482. Good illustrations of entry barriers into a market might be legal or moral obligations to customers, creditors, and employees, high vertical integration, and emotional barriers. Answer: False Page: 345 483. Vertical integration means that a product manufacturer enters into an alliance with another similar manufacturer to achieve volume discounts in storage or shipping from a third party. Answer: False Page: 346 70. Using a market approach, competitors are companies that satisfy the same customer need. Answer: True Page: 346 Level of difficulty: Easy 71. A competitor map shows the sales volume of various competitors in a market space. Answer: False Page: 346 72. A group of firms following the same strategy in a given target market is called a strategic alliance. Answer: False Page: 347 Level of difficulty: Medium 73. The competitor’s share of a target market is called the share of market. Answer: True Page: 348 356 Chapter 1: Marketing: Managing Profitable Customer Relationships 74. Share of heart is the percentage of customers who named the competitor in responding to the statement, “Name the first company that comes to mind in this industry.” Answer: False Page: 348 75. As a strategy for expanding the total market, a market-penetration strategy is aimed at consumers who might use the product but do not at present. Answer: True Page: 350 76. The most constructive strategy that a market leader can use to defend its terrain is to follow the path of “attack before they do.” Answer: False Page: 352 Level of difficulty: Medium 77. If a market leader follows a strategy of continuous innovation, it keeps increasing its competitive strength and value to its customers. Answer: True Page: 352 78. Position defense involves occupying the most desirable market space in the minds of consumers, making the brand almost impregnable. Answer: True Page: 353 Level of difficulty: Medium 79. A preemptive defense is basically a strategic retreat until resources can be assembled for a more advantageous attack. Answer: False Page: 354 Level of difficulty: Medium 80. A good way of describing a contraction defense would be to label it a strategic withdrawal. 357 Part 1: Defining Marketing and the Marketing Process Answer: True Page: 354 Level of difficulty: Easy 81. The market leader should consider several factors before pursuing increased market share. One of the chief factors for consideration is the effect of increased market share on actual and perceived quality. Answer: True Page: 355 Level of difficulty: Medium 82. After the market leader position, firms that occupy second, third, and lower ranks in an industry are often called fledgling leaders. Answer: False Page: 355 Level of difficulty: Medium 83. The first step that a market challenger must take in establishing its stance against competitors is to define its strategic objective. Answer: True Page: 356 Level of difficulty: Medium 84. The frontal attack by a market challenger looks for weak spots on the fringe of the opponent’s defenses because these are natural targets. Answer: False Page: 356 85. The most indirect assault strategy that can be used by a market challenger is the bypass attack where the challenger bypasses the enemy and attacks easier markets to broaden one’s resource base. Answer: True Page: 357 358 Chapter 1: Marketing: Managing Profitable Customer Relationships 86. The encirclement attack by a market challenger consists of waging small, intermittent attacks to harass and demoralize the opponent and eventually secure permanent footholds. Answer: False Pages: 357–358 87. Prestige goods is a specific attack strategy that a market challenger can launch for a higher-quality product and charge a higher price than the market leader. Answer: True Page: 359 88. According to an article by Theodore Levitt (“Innovative Imitation”), product innovation is always a more profitable strategy than product imitation. Answer: False Page: 359 89. As one of the market follower strategies, counterfeiting duplicates the leader’s product and package and sells it on the black market or through disreputable dealers. Answer: True Page: 360 90. As a market follower strategy, the adapter emulates the leader’s products, name, and packaging with slight variations. Answer: False Page: 361 91. A typical market challenger strategy is that of being an imitator (e.g., copies some things from the leader but maintains differentiation in terms of packaging, advertising, pricing, or location). Answer: False Page: 361 92. In a study of hundreds of business units, the Strategic Planning Institute found that the return on investment (ROI) averaged 27 percent in smaller markets, but only 11 percent in larger markets. Answer: True Page: 362 Level of difficulty: Medium 359 Part 1: Defining Marketing and the Marketing Process 111. One of the chief advantages held by a market nicher is the fact that once a niche is established it tends to be rather stable and can be “milked for profit” for several years (i.e., single niching is a preferred strategy). Answer: False Page: 363 112. As a niche specialist role, a channel specialist specializes in serving only one channel of distribution. Answer: True Page: 364 Level of difficulty: Easy 95. Hewlett-Packard specializes in the high-quality, high-price end of the hand- calculator market qualifying the company to be called a quality-price specialist. Answer: True Page: 364 96. If you were a marketing manager of a rival brand of Jell-O, one of the strategies that could be used to overcome your competitor would be called premium. Answer: True Page: 364 Level of difficulty: Medium 360 Chapter 1: Marketing: Managing Profitable Customer Relationships 97. When Pepsi positions close to the dominant brand (Coke) with heavy advertising spending and comparable or premium price to challenge Coke’s dominant brand in the soft drink category, it is following a strategy called differentiation. Answer: False Page: 364 98. As a proven strategy for meeting competitors, almost all companies spend the majority of their time focusing on competitors exclusively. Answer: False Page: 365 99. As a result of a competitor-centered company orientation, the company develops a fighter orientation. Answer: True Page: 365 100. A customer-centered company focuses on competitors’ efforts to win customers and devises strategies to thwart these efforts. Answer: False Page: 365 Essay 101. Michael Porter has identified five forces that determine the intrinsic long-run attractiveness of a market or market segment. Briefly, list and characterize those forces. 102. There are four industry structure types associated with an industry concept of competition. List and briefly characterize those four (4) types. 361 Part 1: Defining Marketing and the Marketing Process 103. Industries differ greatly in ease of entry. List four typical entry barriers into a market? Page: 345 104. Discuss the concept of vertical integration by examining the term and the advantages and disadvantages of integration. Illustrate your thoughts with an example of how the process works. 105 In general, a company should monitor three variables when analyzing competitors. List and briefly characterize those three variables? 106. The market leader must work hard to stay on top of its market. Three strategies can be crafted to achieve this objective. Describe these three strategies and any relevant sub-strategies that are necessary for accomplishing the primary objective. 362 Chapter 1: Marketing: Managing Profitable Customer Relationships 107. Assume that your organization has chosen to pursue a market leader strategy of the flank defense. Describe what such a strategy might be. 108. Assume that you are the marketing manager for a market challenger that is seeking to attack the market leader with an encirclement attack. Describe the encirclement attack and evaluate probable success using this strategy. 109. Characterize the four broad strategies often employed by market followers to meet their competitors. 110. The market nicher is a specialist. Characterize five niche specialist roles that can be assumed by the market nicher. Part 1: Defining Marketing and the Marketing Process services not available from other firms; and, (11) channel specialist—firm specializes in serving only one channel of distribution. For additional information, see chapter section. Page: 364 APPLICATION QUESTIONS Multiple Choice 111. Which of the following companies saw sales plummet from a peak of $7.1 billion in 1996 to about $4 billion in 2003 in part because of fierce competition in the fashion jeans business? a. Wrangler’s b. Arizona Jeans c. Levi Strauss d. Canyon River Blues e. Lee Jeans Page: 341 112. A market segment’s attractiveness varies with the height of its entry and exit barriers. Which of the following forces as described by Michael Porter would most likely be the force being examined if the above situation were to be considered by a marketing manager? f. Threat of intense segment rivalry. g. Threat of new entrants. h. Threat of substitute products. i. Threat of buyers’ growing bargaining power. j. Threat of suppliers’ growing bargaining power. Pages: 342–343 364 Chapter 1: Marketing: Managing Profitable Customer Relationships 113. During the 2004 holiday season from discounters Wal-Mart, Target, and even electronics vendors such as Best Buy and Circuit City has pummeled the toy chains and sent some of them into bankruptcy. a. creative advertising b. global alliances c. pricing pressure d. regulation pressure e. superior management knowledge Page: 343 114. Marketing managers must be keenly aware of —a focus on current competitors rather than latent ones—or risk becoming extinct. a. marketing myopia b. channel myopia c. promotion myopia d. competitor myopia e. consumer myopia Page: 344 115. Each marketing manager needs to be aware of the industry in which they compete. Industries can be classified according to all of the following EXCEPT . a. degree of usage of promotion b. number of sellers c. degree of product differentiation d. degree of vertical integration e. degree of globalization Pages: 344–346 116. The oil and steel industries have unique industrial structure. Which of the following industry structural types is usually associated with the oil and steel industries? a. Pure monopoly b. Monopolistic competition c. Pure competition d. Pure oligopoly e. Differentiated oligopoly Page: 344 365 Part 1: Defining Marketing and the Marketing Process 117. All of the following are considered to be exit barriers in a marketplace that must be considered by the marketing manager EXCEPT . a. emotional barriers b. high vertical integration c. government restrictions d. lack of alternative opportunities e. economies of scale Page: 345 118. According to concepts associated with the idea of a strategic group, which of the following appliance industry competitors would most aptly be described as being a member of a strategic group that has a narrow line, lower manufacturing costs, very high service, and a high relative price of its products? a. Maytag b. General Electric c. Whirlpool d. Sears e. Wal-Mart Page: 347 119. When a buyer thinks of performance running shoes, the first name that comes to mind is Nike. Which of the following variables for analyzing competition would most aptly apply given the statement above? a. Share of market b. Share of mind c. Share of heart d. Share of pocketbook e. Share of innovation Page: 348 120. Chevrolet competes with Ford, not with Ferrari. Which of the following statements (characterizations) of competitors most aptly fits with the competitive situation faced by Chevrolet when it seeks optimum selection of competitors? a. Compete with strong competitors. b. Compete with distant competitors. c. Compete with parallel competitors. d. Compete with bad competitors. e. Compete with close competitors. Pages: 348–349 366 Chapter 1: Marketing: Managing Profitable Customer Relationships 121. Apex Corporation is considered to be a market follower in its industry. About what percentage of a hypothetical market structure would be controlled by market followers such as Apex? a. 40 percent b. 30 percent c. 25 percent d. 20 percent e. 10 percent Page: 349 122. When a regional computer-manufacturing firm began to seek out customers who lived outside of its traditional market boundaries, the firm was employing which of the following new customer expansion strategies to expand its total market? a. Market-penetration strategy b. New-market segment strategy c. Geographic-expansion strategy d. Product differentiation strategy e. Latent demand strategy Page: 350 123. When your competitor delivers more for less, two strategies can be employed to meet this threat. Such a situation was recently faced by Kmart. Which of the following combinations would be most appropriate to meet the challenge thrown-down by the competitor? a. Market penetration or product innovation b. Expansion or standardization c. Adaptation or innovation d. Differentiation or execution e. Computerization or implementation Page: 351 124. Which of the following methods for defending market share should be employed by Caterpillar to hold off competitors when Caterpillar learned that many competitors were lacking in delivering on parts commitments to customers? a. Full-line strategy b. Good financing c. Zero tolerance for production errors d. Product innovation e. Superior service Page: 352 367 Part 1: Defining Marketing and the Marketing Process 125. In satisfying customer needs, a marketer discovers and produces solutions customers did not ask for but to which they enthusiastically respond. Sony is a good illustration of such a marketer. a. responsive b. anticipative c. combative d. manipulative e. creative Page: 353 126. Firms that occupy second, third, and lower ranks in an industry can adopt two postures in responding to competition. First, they can attack the leader and other competitors in an aggressive bid for further market share. Second, they can . a. play ball and not “rock the boat” (market followers) b. relinquish their own share to industry leaders (market capitulators) c. not worry about the immediate future and focus on long-term results (market maturation) d. form alliances with enemies (market organizational constriction) e. give up and quit (market abandonment) Page: 355 127. To industry leader Boeing, European Airbus is a serious market challenger that has made rapid gains in the commercial aircraft market in the last few years. Which of the following has been cited as the chief strategy being employed by Airbus in its battle with Boeing? a. Styling. b. Price discounting. c. Bribery of purchasing agents. d. An innovative new product line equipped with modern features. e. Partnerships with Boeing rivals. Page: 356 128. When Avis used the campaign theme, “We’re only second. We try harder.” to battle rival Hertz, Avis was using a market challenger strategy called . a. lower priced goods b. price discount c. product innovation d. intensive advertising promotion e. improved services Page: 359 368 Chapter 1: Marketing: Managing Profitable Customer Relationships 129. Tasteeos, Fruit Rings, and Corn Flakes sell for nearly $1 a box less than leading cereal brands. Which of the following market follower strategies is being employed by the cereal manufacturer responsive for the above market entries? a. Counterfeiter b. Cloner c. Imitator d. Adapter e. Reverse-innovator Page: 361 130. All of the following suggestions have been provided by Adam Morgan for improving small brands success in competing with larger rivals EXCEPT . a. break with your immediate past b. build a “lighthouse identity” c. assume thought leadership of the category d. create symbols of reevaluation e. deeply discount products and services Page: 360 Short Answer 131. According to information provided in Michael Porter’s model that describes segment structural attractiveness, the threat of mobility can be encountered. In which of the five forces described by Porter would such a threat occur? 132. According to information provided in Michael Porter’s model that describes segment structural attractiveness, the suppliers’ growing bargaining power is a real threat. What is considered to the best defense for such a threat? 133. According to information presented in the text, what form of pressure supplied by Wal-Mart and others forced many toy retailers into bankruptcy in the 2004 holiday season? 134. Restaurants and beauty parlors are examples of a form of competition known as monopolistic competition. Characterize monopolistic competition. 369 Part 1: Defining Marketing and the Marketing Process 135. Competitors often face entry, exit, and mobility barriers in a market space. If you were a organization facing an exit barrier in a market, what type of barrier would you be facing? 136. Assume that you are required by your manager to construct a competitor map that has three concentric rings. What would be the names (subjects) of the three concentric rings in your map? Page: 346 137. You have been asked to form a strategic group in your industry. What is a strategic group? What two important insights should emerge from your formulation process? 370 Chapter 1: Marketing: Managing Profitable Customer Relationships 138. If your company monitors competitive “share of mind,” what is your company monitoring? 139. Your marketing manager has asked you to develop a new customer strategy for your company. Additionally, you have been asked to develop, specifically, a market-penetration strategy to assist in gaining new customers. Describe a market-penetration strategy in this context. 140. Considering how Caterpillar has become dominant in the construction- equipment industry despite charging a premium price and being challenged by a number of able competitors, several policies combine to explain Caterpillar’s success. What are those policies? Pages: 352–353 141. As a brand manager, you have decided to implement a preemptive defense to meet an anticipated competitive challenge. Describe the preemptive defense. Page: 354 142. If you were asked to develop a mobile defense for your products that are likely to come under attack from a market challenger, what would you suggest? 371 Part 1: Defining Marketing and the Marketing Process broadening and market diversification. For additional information on these two strategies, see the chapter section. Page: 354 143. Consider that you have been placed in the role of being a market challenger. Where (toward which opponents) can you attack? 144. When a market challenger uses a frontal attack, what is the principle of force? 145. Your marketing manager has chosen the bypass attack as means of responding to an industry leader. Describe the ideas contained in the bypass attack. 146. There are several specialized market challenger attack strategies. One of these has been used successfully by Baskin-Robbins to establish its position in the ice- cream industry. List and briefly characterize this attack strategy. Page: 359 147. If your company was labeled as an imitator (market follower), what would your primary strategies for meeting competition be? long as the imitator does not attack the leader aggressively. Page: 361 148. As a market follower, you have been labeled as a counterfeiter. Characterize your label. 372 Chapter 1: Marketing: Managing Profitable Customer Relationships Page: 360 149. A marketing manager declares that an end-user specialist is needed by his firm. What is an end-user specialist? 150. You are about to change the emphasis of your organization from a competitor- centered company to a customer-centered one. What are the advantages to making such a switch? Chapter 12: Setting Product Strategy GENERAL CONCEPT QUESTIONS Multiple Choice 1. Marketing planning begins with the formulation of an offering to target customers’ needs or wants. a. exceed b. meet c. capture d. compete with e. comprehend Page: 372 2. The customer will judge the offering by three basis elements: , services mix and quality, and price. a. performance b. salespeople c. price d. product features and quality e. none of the above Page: 372 373 Part 1: Defining Marketing and the Marketing Process 3. The components of the market offering include all of the following EXCEPT . a. product feature b. product quality c. reputation of firm d. services mix and quality e. value-based pricing Page: 372 4. In planning its market offering, the marketer needs to address five product levels. These levels include all of the following EXCEPT . a. potential product b. augmented product c. core benefit d. basic product e. product usage/purpose Page: 372 5. The five product levels constitute a . At each level more customer value is added. a. customer augmented product b. customer consumption system c. customer value hierarchy d. customer perceived value e. customer hierarchy Page: 372 : 6. The way the user performs the tasks of getting and using products and related services is the user’s total . a. consumption system b. consumable system c. consistent use system d. augmented system e. none of the above Page 372 7. Marketers have traditionally classified products on the basis of characteristics: , tangibility, and use. a. customer value hierarchy b. expected c. augmented d. durability e. none of the above Page: 373 8. When companies search for new ways to satisfy customers and distinguish their offering from others, they look at the product, which encompasses all the possible augmentations and transformations of the product. a. consumption system 374 Chapter 1: Marketing: Managing Profitable Customer Relationships b. expected c. potential d. augmented e. basic Page: 373 9. The vast array of goods consumers buy can be classified on the basis of shopping habits. We can distinguish among convenience, , specialty, and unsought goods. a. “must haves” b. impulse c. shopping d. business e. functional Page: 374 10. The consumer usually purchases frequently, immediately, and with a minimum of effort. a. specialty goods b. shopping goods c. “must haves” goods d. personal goods e. convenience goods Page: 374 11. are similar in quality but different enough in price to justify shopping comparisons. a. Emergency goods b. Homogeneous shopping goods c. Heterogeneous shopping goods d. Specialty goods e. None of the above Page: 374 12. Examples of products such as insurance, cemetery plots, and smoke detectors, are examples of that are products that the consumer does not know about or does not normally think of buying. a. specialty goods b. unsought goods c. heterogeneous shopping goods d. homogeneous shopping goods e. none of the above Page: 374 13. Industrial-goods can be classified in terms of how they enter the production process and their relative costliness. We can distinguish three groups of industrial goods: , capital items, and suppliers and business services. a. service components b. sub-assemblies c. pieces and parts d. specialty goods 375 Part 1: Defining Marketing and the Marketing Process d. materials and parts Pages: 374-–375 14. Materials and parts are goods that enter the manufacturer’s product completely. They fall into two classes: , and natural products. a. component parts b. raw materials c. farm products d. component materials e. none of the above Page: 374 15. Capital items are long-lasting goods that facilitate developing or managing the finished product. They include two groups: installations and . a. natural products b. component materials c. operating supplies d. equipment e. none of the above Page: 375 16. Supplies and business services are short-term goods and services that facilitate or managing the finished product. a. inspecting b. developing c. building d. creating e. none of the above Page: 375 17. Many products can be differentiated in terms of its ,—size, shape, or physical structure. a. form b. performance quality c. conformance quality d. reliability e. design Page: 376 18. Most products can be offered with varying that supplement its basic function. a. reliability b. conformance qualities c. features d. forms e. none of the above Page: 376 19. is the level at which the product’s primary characteristics operate. a. Design b. Conformance quality 376 Chapter 1: Marketing: Managing Profitable Customer Relationships b. Reparability c. Performance quality d. None of the above Page: 376 20. describes the product’s look and feel to the buyer; it has an advantage of creating distinctiveness that is/might be difficult to copy. a. Design b. Style c. Durability d. Conformance e. none of the above Page: 377 21. In increasingly fast-paced markets, prices, and technology are not enough. is the factor that will often give a company its competitive edge and is defined as the totality of features that affect how a product looks and functions in terms of customer requirements. a. Services b. Performance c. Reliability d. Style e. Design Page: 377 22. When the physical product cannot be easily differentiated, the key to competitive success may lie in adding valued services and improving their quality. The main service differentiators are ordering ease, delivery, installation, , customer consulting, maintenance, and repair. a. customer limiting b. customer orders c. niche marketing d. customer training e. customer marketing Page: 378 23. Manufacturers, service providers, and retailers seek new designs to create differentiation and establish a more complete connection with consumers. recognize the emotional power of design and the importance to consumers of how things look and feel. a. Holistic marketers b. Savvy marketers c. Key marketers d. Integrated marketers e. None of the above Page: 379 377 Part 1: Defining Marketing and the Marketing Process 24. Delivery refers to how well the product or service is delivered to the customer. It includes, speed, , and care attending the delivery process. a. length of time for delivery b. type of delivery services c. attributes d. completeness e. accuracy Page: 378 25. refers to the training the customer’s employees to use the vendor’s equipment properly and efficiently. a. Customer training b. Internal marketing c. Client marketing d. Customer relationships e. Technical training Page: 379 26. refers to data, information systems, and advice services that the seller offers to their buyers. a. Sales force relationships b. Customer relationships c. Internal marketing d. Customer training e. Customer consulting Page: 380 27. A product hierarchy stretches from basic needs to particular items that satisfy those needs. We can identify six levels of a product’s hierarchy to include all of the following EXCEPT . a. need family b. product family c. product class d. product line e. extended family Pages: 380–381 28. A is defined as a distinct unit within a brand or product line distinguishable by size, price, appearance, or some other attribute. a. stock keeping unit (SKU) b. UPC (uniform product code) c. stock unit (SU) d. product type e. none of the above Page: 381 29. A is the set of all products and items a particular seller offers for sale. a. product line 378 Chapter 1: Marketing: Managing Profitable Customer Relationships b. product mix c. family of products d. product system e. product class Page: 381 30. The of the product mix refers to how closely related the various product lines are in end use, production requirements, distribution channels, or some other way. a. consistency b. depth c. width d. length e. composition Page: 381 31. In offering a product line, companies normally develop a and modules that can be added to meet different customer requirements. a. convenience item b. “best selling” item c. staple item d. product e. basic platform Page: 382 32. A company can classify its products into four types that yield different gross margins, depending upon sales volume and promotional costs. In the case of personal computers, the four classifications include all EXCEPT . a. core product b. shopping goods c. staples d. specialties e. convenience items Page: 382 33. The main point in segmenting products into different classes is that companies should recognize that these items in the potential for being priced higher or advertised more as ways to increase sales, margins, or both. a. differ b. are more elastic c. are less elastic d. respond to advertising differently e. none of the above Page: 383 34. A benefit of product mapping is that it identifies . a. market matrixes b. target markets c. market segments d. consumers e. none of the above 379 Part 1: Defining Marketing and the Marketing Process Page: 383 35. Product-line analysis provides information for two key decision areas—product- line length and . a. product-length new items b. product-mix pricing c. product pricing d. popular pricing e. none of the above Page: 384 36. occurs when a company lengthens its product line beyond its current range. a. Market reach b. Product reach c. Product adaptations d. Line shrinking e. Line stretching Page: 384 37. When a company positioned in the “middle” market may want to introduce a lower-priced product line this is an example of . a. product-line length b. up-market stretch c. down-market stretch d. maintenance e. none of the above Page: 384 38. Companies that wish to enter the high end of the market can introduce products that cater to that market. This is an example of . a. down-market stretch b. up-market stretch c. maintenance d. product-line length e. none of the above Page: 385 39. A product line can also be lengthened by adding more items within the present range. There are several motives for line filling: , trying to satisfy dealers who complain about lost sales because of missing items in the line, trying to utilize excess capacity, and others. a. responding to senior management wishes b. responding to consumer wishes c. reaching for incremental profits d. reaching for incremental capacity e. responding to sales force demands Page: 386 380 Chapter 1: Marketing: Managing Profitable Customer Relationships 40. If line filling is overdone it could result in a. sales paralysis b. manufacturing inefficiencies c. self-cannibalization d. self-sacrifice e. none of the above and customer confusion. Page: 386 41. Price-setting logic must be modified when the product is part of a product mix. In that case, the firm searches for a set of prices that mix. a. is ineffective on total b. has no effect on total c. maximizes d. minimizes e. capitalizes upon profits on the total Page: 387 42. A company with many products must ensure that each of its products possess a with the consumer. a. status b. niche c. noticeable difference d. just-noticeable difference e. none of the above Page: 386 43. With regards to product-line pricing, companies normally develop product lines rather than single products and introduce price steps. The seller’s task is to establish quality differences between these price steps. a. imaginary b. actual c. perceived d. monetary e. none of the above Pages: 387-388 44. Some service firms often engage in , consisting of a fixed fee plus a variable usage fee. a. pure bundling b. pure pricing c. mixed pricing d. captive pricing e. two-part pricing Page: 389 45. In the seller offers goods both individually and in bundles and often charges less for the “bundle” than for the individual products. a. pirating pricing b. captive pricing 381 Part 1: Defining Marketing and the Marketing Process c. two-part pricing d. pure bundling e. mixed bundling Page: 389 46. Products are often combined with other products (from other companies or from other divisions) and this is called . a. “in-house” branding b. two-part branding c. co-branding d. co-marketing e. cooperative advertising Page: 390 47. The main advantage of co-branding is that a product may be convincingly positioned by virtue of the involved. Co-branding can generate greater sales from the existing target market as well as open additional opportunities with new consumers and channels. a. branding synergy b. increased advertising dollars c. multiple brands d. bundled package e. none of the above Page: 390 382 Chapter 1: Marketing: Managing Profitable Customer Relationships 48. The potential disadvantages of co-branding are the risks and lack of control from becoming aligned with another brand in the consumers mind. Consumer about the level of involvement and commitment with co-brands are likely to be high, so unsatisfactory performance could have negative repercussions for the brands involved. a. expectations b. primary service features c. values d. perceptions e. pricing Page: 390 49. is a special case of co-branding involving creating brand equity for materials, components, or parts that are necessarily contained within other branded products. a. Component branding b. Ingredient branding c. Advertising branding d. Sales branding e. None of the above Page: 391 50. We define packaging as all the activities of designing and producing the container for a product. This includes up to three levels of material: primary package, secondary package, and . a. retailer package b. design package c. shipping package d. consumer package e. none of the above Page: 393 51. Various factors have contributed to the growing use of packaging as a marketing tool and include all of the following EXCEPT . a. self-service b. consumer affluence c. consumer influence d. company and brand images e. innovational opportunities Page: 393 383 Part 1: Defining Marketing and the Marketing Process 52. To achieve the marketing objectives for the brand and satisfy the desires of consumers, the and functional components of packaging must be chosen correctly. a. characters b. logo c. aesthetics d. brand name e. colors Page: 394 53. After packaging is designed, it must be tested. These tests include all of the following EXCEPT . a. stress testing b. consumer testing c. engineering tests d. dealers testing e. visual testing Page: 394 54. A label performs several functions for a product. These include all of the following EXCEPT . a. grades b. promotes c. describes d. classifies e. identifies Page: 394 55. The passed by Congress in 1967, sets mandatory labeling requirements on packaging. a. Federal Trade Commission Act b. Fair Trade Act c. Fair Packaging and Labeling Act d. Food and Drug Administration Act e. none of the above Page: 395 56. are formal statements of expected product performance by the manufacturer. a. Insurance b. Warranties c. Guarantees d. Reputation e. Marketing statements Page: 395 57. Many sellers offer either general or specific guarantees. Guarantees reduce the buyer’s risk. a. actual b. perceived 384 Chapter 1: Marketing: Managing Profitable Customer Relationships c. real d. implied e. stated Page: 396 58. Guarantees are most effective in two situations. The first is when the company or products are not well known and the second is when the product’s quality is to competition. a. not known b. different c. inferior d. equivalent e. superior Page: 396 59. In today’s rapidly changing product markets, modernization of the product line is continuous. Companies plan improvements to encourage customer migration to . a. higher markup products b. higher margin items c. lower-price, lower-value d. high-priced, high-valued e. none of the above Page: 386 60. Buyers expect products to have a high , which is the degree to which all the produced units are identical and meet the promised specifications. a. durability b. reliability c. conformance quality d. form e. performance quality Page: 377 385 Part 1: Defining Marketing and the Marketing Process True/False 61. Product is the key element in the market offering. Answer: True Page: 371 62. Marketing planning ends with the formulation of an offering to meet the target customers’ needs and wants. Answer: False Page: 372 63. A product is anything that can be offered to a market to satisfy a want or need. Answer: True Page: 372 64. In planning its market offering, the marketer needs to address five product levels each of which reduces customer value. Answer: False Page: 372 65. The customer value hierarchy consists of the basic product, core benefit, expected product, augmented product, and the consumption system. Answer: False Page: 372 66. Marketers have traditionally classified products on the basis of characteristics such as durability, tangibility, and use. Answer: True Page: 373 67. The vast array of goods consumers buy can be classified on the basis of needs. Answer: False Page: 374 68. Industrial goods can be classified in terms of how they leave the production system. Answer: False Page: 374 69. Capital items are long-lasting goods that facilitate developing or managing the finished products. Answer: True Page: 375 70. Supplies can be classified as two kinds: maintenance and repair items and operating supplies. Answer: True Page: 375 71. To be branded, physical products must be differentiated. Answer: True Page: 376 72. Many products can be differentiated in form, features, performance quality, conformance quality, durability, reliability, reparability, and style. Answer: True Pages: 376–377 73. If the physical product cannot be easily differentiated, the key to competitive advantage lies in the pricing of the related “services” provided by the manufacturer. Answer: False Page: 378 386 Chapter 1: Marketing: Managing Profitable Customer Relationships 74. Design is now more fully integrated into the marketing management process. Answer: True Page: 379 75. Customer training and customer consulting are two areas for service differentiation that manufacturers can use with their products. Answer: True Pages: 379–380 76. The product hierarchy stretches from basic needs to particular items that satisfy those needs. Answer: True Page: 380 77. A product system is a group of diverse but related items that function in a compatible manner and includes the product mix and product assortment. Answer: False Page: 381 78. The four product-mix dimensions (length, width, depth, consistency) permit the company to expand its business. Answer: True Page: 381 79. Product-line managers need to know the sales and profits of each item in their line in order to estimate growth, sales, and profits in the future. Answer: False Page: 382 80. The product-line manager must review how the line is positioned against competitors’ lines. Answer: True Page: 383 81. Factors that influence product-line length do not include company objectives or management aspirations. Answer: False Page: 384 82. Every company’s product line covers a certain part of the total possible range of products and consumer levels. Answer: True Page: 384 83. Companies in the “middle market” should not attempt to stretch their line in both directions. Answer: False Page: 385 84. Line filling if overdone may result in self-cannibalization and increased customer loyalty. Answer: False Page: 386 85. In the rapidly changing market of today’s world, product lines must be continuously updated or modernized. Answer: True Page: 386 86. Price-setting logic must be modified when the product is part of a product mix. Answer: True Page: 387 387 Part 1: Defining Marketing and the Marketing Process 87. Companies normally develop product lines rather than a single product and introduce price steps such as a “low-,” “average-,” and “high-” priced computer system. Answer: True Pages: 387–388 88. Manufacturers of systems such as razors and ink jet printers use a system of pricing called “two-part pricing”—one price for the disposable products and another for the “hardware.” Answer: False Pages: 388–389 89. A pricing system in which there is a “fixed” fee and then a variable “usage” fee is called bundling. Answer: False Page: 389 90. Pure bundling occurs when a firm offers goods both individually and in bundles. Answer: False Page: 389 91. Co-branding is when two or more well-known existing brands are combined into a joint product and/or marketed together in some fashion. Answer: True Page: 390 92. Ingredient branding can take on a form called “self-branding” in which the company advertises its own branded ingredients. Answer: True Page: 391 93. Packaging is all the activities of designing and producing the container for a product. Answer: True Page: 393 94. Packaging has been called the fifth “P” by marketers because it can be an element of product strategy. Answer: True Page: 392 95. Various factors have contributed to the growth of packaging as a “fifth P” and include self-service, consumer affluence, consumer independence, company and brand image, and innovation opportunities. Answer: False Pages: 392–393 96. Labels can identify the product and must contain legal statements that under various Federal laws cannot be misleading, false, or deceptive. Answer: True Pages: 394–395 97. Warranties must be written to be legally enforceable. Answer: True Page: 395 98. Warranties are formal statements of expected product performance by the manufacturer. Answer: True Page: 395 388 Chapter 1: Marketing: Managing Profitable Customer Relationships 99. Guarantee’s greatest contribution to a product’s success is that they decrease the buyer’s perceived risk in the purchase of the product. Answer: True Page: 396 100. Guarantees are most effective when the product is well known and/or similar in performance to other brands in the market. Answer: False Page: 396 Essay 101. In planning its market offering, the marketer must address the five product levels of the customer value hierarchy. Describe the “customer value hierarchy” and identify the five levels of product contained within. 102. The vast array of products that consumers buy can be classified on the basis of shopping habits and are broken down into four main areas. List these four main areas of consumer shopping habits and explain what elements are included within. Page: 374 103. Industrial-goods can be classified in terms of how they enter the production process and their relative costliness. Explain the three groups of industrial goods. 389 Part 1: Defining Marketing and the Marketing Process 104. When differentiated, products can then be branded. List the possible ways that physical products can be differentiated. Pages: 376–377 105. Explain the concepts of product line width, length, depth, and consistency. 106. A company’s product mix, the set of all products and items a particular seller offer for sale, is important to the company because it will allows the company product flexibility. Explain how product-mix dimensions aid company profits. 107. Product-line length is important for a company in its pursuit of profit opportunities and is composed of line stretching. Explain the concept of line stretching and the three uses for it. 108. Product-mix pricing includes a number of pricing strategies for the brand manager. List each of these strategies and briefly define each. 390 Chapter 1: Marketing: Managing Profitable Customer Relationships 109. Various factors have contributed to the increased importance of packaging as a marketing tool. List and briefly describe these events. 110. Sellers must label their products. Labels service many purposes beyond just “naming” the product. List the additional services provided by a product’s label. APPLICATION QUESTIONS Multiple Choice 111. Marketers must see themselves as benefit providers. For example, when a shopper purchases new shoes, he/she expects the shoes to cover his/her feet and allow them to walk unobstructed. This is an example of what level in the consumer value hierarchy? a. Pure tangible good b. Basic product c. Augmented product d. Potential product 391 Part 1: Defining Marketing and the Marketing Process e. Consumption system

MGT498 Final Exam Chapter 6 Strategy Formulation Situation Analysis and Business Strategy. SWOT is an acronym that stands for Strategy, Weaknesses, Opportunities, and Threats. Answer: Diff: 1 Page Ref: 176 Topic: Situational Analysis: SWOT Analysis 2) SWOT analysis is a panacea for strategy. Answer: Diff: 2 Page Ref: 176 Topic: Situational Analysis: SWOT Analysis 3) A propitious niche is a need in the marketplace that is currently unsatisfied. Answer: Diff: 2 Page Ref: 177 Topic: Situational Analysis: SWOT Analysis 4) The first firm through a strategic window can occupy a propitious niche and discourage competition (if the firm has the required internal strengths). Answer: Diff: 2 Page Ref: 179 Topic: Situational Analysis: SWOT Analysis AACSB: Reflective Thinking 5) One company that has successfully found a propitious niche is Frank J. Zamboni & Company, the manufacturer of the machines that smooth the ice at ice skating rinks. Answer: Diff: 3 Page Ref: 179-180 Topic: Situational Analysis: SWOT Analysis AACSB: Analytic Skills 6) Niches do not change over time. Answer: Diff: 2 Page Ref: 180 Topic: Situational Analysis: SWOT Analysis 7) If a mission does not provide a common thread for a corporation's businesses, managers might be unclear about where the company is heading. Answer: Diff: 2 Page Ref: 182 Topic: Review of Mission and Objectives 8) The TOWS Matrix illustrates how the external opportunities and threats facing a particular corporation can be matched with that company's internal strengths and weaknesses to result in four sets of possible strategic alternatives. Answer: Diff: 3 Page Ref: 182 Topic: Generating Alternative Strategies by Using a TOWS Matrix 9) SO strategies attempt to take advantage of opportunities by overcoming weaknesses. Answer: Diff: 3 Page Ref: 183 Topic: Generating Alternative Strategies by Using a TOWS Matrix 10) Business strategy focuses on improving the competitive position of a company's or business unit's products or services within the specific industry or market segment that the company or business unit serves. Answer: Diff: 1 Page Ref: 183 Topic: Business Strategies 11) Differentiation is the ability of a company or business unit to design, produce, and market a comparable product more efficiently than its competitors. Answer: Diff: 2 Page Ref: 185 Topic: Business Strategies 12) A cost leader's lower costs allow it to continue to earn profits during times of heavy competition. Answer: Diff: 2 Page Ref: 186 Topic: Business Strategies 13) An example of a company following a cost focus strategy is Potlach Corporation, who makes house brands toilet paper for Safeway and other grocery store chains. Answer: Diff: 2 Page Ref: 187-188 Topic: Business Strategies AACSB: Analytic Skills 14) One risk of a cost leadership strategy is that the technology may change. Answer: Diff: 2 Page Ref: 188 Topic: Business Strategies AACSB: Reflective Thinking 15) An example of a company that was "stuck in the middle" is K-Mart as they tried to imitate both Wal-Mart's low-cost strategy and Target's differentiation strategy. Answer: Diff: 2 Page Ref: 189 Topic: Business Strategies AACSB: Analytic Skills 16) Based on the eight dimensions of quality discussed in the text, reliability is defined as the product's ease of repair. Answer: Diff: 1 Page Ref: 189 Topic: Business Strategies 17) Most entrepreneurial ventures follow focus strategies. Answer: Diff: 2 Page Ref: 189 Topic: Business Strategies 18) The strategic rollup was developed in the mid-1990s as an efficient way to quickly consolidate a fragmented industry with the resulting large firm creating economies of scale. Answer: Diff: 2 Page Ref: 190 Topic: Business Strategies 19) Rollups are synonymous with mergers and acquisitions. Answer: Diff: 1 Page Ref: 190 Topic: Business Strategies 20) One danger of D'Aveni's concept of hypercompetition is that it may lead to an overemphasis on short-term tactics over long-term strategy. Answer: Diff: 3 Page Ref: 192 Topic: Business Strategies AACSB: Reflective Thinking 21) One skill required of the cost leadership strategy is a strong marketing ability. Answer: Diff: 1 Page Ref: 192 Topic: Business Strategies 22) Successful late movers tend to be large firms with considerable resources and related experience. Answer: Diff: 2 Page Ref: 193 Topic: Business Strategies 23) The first company to manufacture and sell a new product or service is called the ground breaker. Answer: Diff: 1 Page Ref: 193 Topic: Business Strategies 24) A defensive tactic usually takes place in an established competitor's market location. Answer: Diff: 2 Page Ref: 193 Topic: Business Strategies 25) When AMD went after Intel's microprocessor business by developing low priced chips to go after the customers Intel didn't mind losing, it was using a frontal attack. Answer: Diff: 3 Page Ref: 193 Topic: Business Strategies AACSB: Analytic Skills 26) Oracle is using encirclement in attacking SAP in ERP software by surrounding SAP with acquisitions. Answer: Diff: 3 Page Ref: 194 Topic: Business Strategies AACSB: Reflective Thinking 27) Microbreweries that make beer for sale for local customers, use guerilla warfare against national brewers like Anheuser-Busch. Answer: Diff: 3 Page Ref: 195 Topic: Business Strategies AACSB: Analytic Skills 28) Collusion is the active cooperation of firms within an industry to reduce output and raise prices in order to get around the normal economic law of supply and demand. Answer: Diff: 2 Page Ref: 195 Topic: Business Strategies 29) Too much partnering experience with the same strategic partners generates diminishing returns over time and leads to reduced performance. Answer: Diff: 3 Page Ref: 196 Topic: Business Strategies AACSB: Reflective Thinking 30) A licensing arrangement is an agreement in which the licensing firm grants rights to another firm in another country or market to produce and/or sell a product. Answer: Diff: 1 Page Ref: 198 Topic: Business Strategies 31) A value chain partnership is a loose alliance with several distributors for the short-term. Answer: Diff: 2 Page Ref: 198 Topic: Business Strategies 32) One success factor to a strategic alliance is the ability to identify likely partnering risks and deal with them when the alliance is formed. Answer: Diff: 2 Page Ref: 199 Topic: Business Strategies 33) The concept that advocates management's attempt to find a strategic fit between external opportunities and internal strengths while working around external threats and internal weaknesses is called A) environmental analysis. B) position analysis. C) strategic evaluation. D) objective analysis. E) situational analysis. Answer: E Diff: 1 Page Ref: 176 Topic: Situational Analysis: SWOT Analysis 34) The particular capabilities and resources a firm possesses and the superior way in which they are used is called A) distinctive competencies. B) differentiating capabilities. C) situational proficiency. D) core competencies. E) distinctive characteristics. Answer: A Diff: 2 Page Ref: 176 Topic: Situational Analysis: SWOT Analysis 35) An acronym for the assessment of the external and internal environments of the business corporation in the process of strategy formulation/strategic planning is A) P.E.T. B) M.B.O. C) S.W.O.T. D) S.B.U. E) R.O.I. Answer: C Diff: 1 Page Ref: 176 Topic: Situational Analysis: SWOT Analysis 36) The T in SWOT represents A) tactic. B) threat. C) tautology. D) temporal. E) time. Answer: B Diff: 1 Page Ref: 176 Topic: Situational Analysis: SWOT Analysis 37) The text authors note that the essence of strategy is A) opportunity divided by capacity. B) strength divided by opportunity. C) threat divided by capacity. D) threat divided by opportunity. E) opportunity divided by threat. Answer: A Diff: 2 Page Ref: 176 Topic: Situational Analysis: SWOT Analysis 38) All of the following reflect criticisms of the SWOT analysis EXCEPT A) uses no weights to reflect priorities. B) only requires a single level of analysis. C) provides a rational link to strategy implementation. D) ambiguity in words and phrases. E) generation of lengthy lists. Answer: C Diff: 3 Page Ref: 176 Topic: Situational Analysis: SWOT Analysis 39) In the development of a SFAS matrix, the first step is to A) enter the ratings of how the company's management is responding to each of the strategic factors. B) calculate the weighted scores. C) list the most important EFAS and IFAS items. D) indicate short-term for the duration. E) enter the weights for all of the internal factors. Answer: C Diff: 3 Page Ref: 177 Topic: Situational Analysis: SWOT Analysis 40) A corporation's specific competitive role which is so well-suited to the firm's internal and external environment that other corporations are NOT likely to challenge or dislodge it. A) propitious niche. B) strategic fit C) common thread D) business screen E) implicit strategy Answer: A Diff: 2 Page Ref: 177 Topic: Situational Analysis: SWOT Analysis 41) According to the text, unique market opportunities that are available for only a particular time are called A) situational occasions. B) critical openings. C) strategy implementation. D) strategic windows. E) trigger points. Answer: D Diff: 2 Page Ref: 179 Topic: Situational Analysis: SWOT Analysis 42) One company that has successfully found a propitious niche is A) Coca-Cola. B) PepsiCo. C) Wal-Mart. D) Frank J. Zamboni & Company. E) Disney. Answer: D Diff: 3 Page Ref: 179-180 Topic: Situational Analysis: SWOT Analysis AACSB: Analytic Skills 43) The technique that illustrates how management can match the external opportunities and threats with its strengths and weaknesses to yield four sets of strategic alternatives is called a (an) A) IFAS Table. B) EFAS Table. C) SFAS Table. D) TOWS Matrix. E) Issues Priority Matrix. Answer: D Diff: 2 Page Ref: 182 Topic: Generating Alternative Strategies by Using a TOWS Matrix 44) In a TOWS Matrix, SO Strategies A) are generated by thinking of ways in which a company or business unit could use its strengths to take advantage of opportunities. B) attempt to take advantage of opportunities by overcoming weaknesses. C) are basically defensive and primarily act to minimize weaknesses and avoid threats. D) consider a company's or unit's strengths as a way to avoid threats. E) are ways to get strategists to think "out of the box." Answer: A Diff: 3 Page Ref: 183 Topic: Generating Alternative Strategies by Using a TOWS Matrix 45) In a TOWS Matrix, ST Strategies A) are generated by thinking of ways in which a company or business unit could use its strengths to take advantage of opportunities. B) attempt to take advantage of opportunities by overcoming weaknesses. C) are basically defensive and primarily act to minimize weaknesses and avoid threats. D) consider a company's or unit's strengths as a way to avoid threats. E) are ways to get strategists to think "out of the box." Answer: D Diff: 3 Page Ref: 183 Topic: Generating Alternative Strategies by Using a TOWS Matrix 46) In a TOWS Matrix, WT Strategies A) are generated by thinking of ways in which a company or business unit could use its strengths to take advantage of opportunities. B) attempt to take advantage of opportunities by overcoming weaknesses. C) are basically defensive and primarily act to minimize weaknesses and avoid threats. D) consider a company's or unit's strengths as a way to avoid threats. E) are ways to get strategists to think "out of the box." Answer: C Diff: 3 Page Ref: 183 Topic: Generating Alternative Strategies by Using a TOWS Matrix 47) Business strategy focuses on A) ensuring that the company maintains the existing market share that it has historically enjoyed. B) improving the competitive position of a corporation's products or services within the industry or market segment served. C) providing adequate shareholders' return on investment. D) preventing the competition from gaining a competitive edge by undermining their marketing plan. E) recovering the competitive lead by using all available resources that the company can provide. Answer: B Diff: 2 Page Ref: 183 Topic: Business Strategies 48) Business strategy is composed of A) corporate and competitive strategy. B) functional and divisional strategy. C) competitive and cooperative strategy. D) corporate and cooperative strategy. E) divisional and competitive strategy. Answer: C Diff: 3 Page Ref: 183 Topic: Business Strategies 49) Which of the following is NOT one of the questions that development of a competitive strategy should raise? A) Should we compete on the basis of lower cost? B) Should we compete head-to-head with major competitors? C) Should we differentiate our products or services on some basis other than cost? D) Should we compete by garnering political support of influential leaders? E) Should we compete in a niche market that we can satisfy which is superior to that of the competition? Answer: D Diff: 3 Page Ref: 183-185 Topic: Business Strategies AACSB: Analytic Skills 50) According to Porter, the competitive strategy that reflects the ability of the corporation or its business unit to design, produce, and market a comparable product more efficiently than its competitors is called A) competitive scope. B) differentiation. C) concentration. D) diversification. E) lower cost. Answer: E Diff: 2 Page Ref: 185 Topic: Business Strategies 51) What are the two generic competitive strategies that Porter promotes as the means for outperforming other corporations in a particular industry? A) competitive scope and differentiation B) diversification and concentration C) lower cost and competitive scope D) concentration and lower cost E) lower cost and differentiation Answer: E Diff: 1 Page Ref: 185 Topic: Business Strategies 52) According to Porter, the competitive strategy that reflects the ability to provide unique and superior value to the buyer in terms of product quality, special features, or after-sale service is called A) competitive scope. B) differentiation. C) concentration. D) diversification. E) lower cost. Answer: B Diff: 2 Page Ref: 185 Topic: Business Strategies 53) According to Porter, the term that applies to the breadth of a company's or business unit's target market is called A) competitive scope. B) differentiation. C) concentration. D) diversification. E) lower cost. Answer: A Diff: 2 Page Ref: 185 Topic: Business Strategies 54) Wal-Mart, McDonald's and Alamo are all examples of companies following which of Porter's competitive strategies? A) differentiation B) cost leadership C) differentiation focus D) competitive advantage E) cost focus Answer: B Diff: 3 Page Ref: 186 Topic: Business Strategies AACSB: Analytic Skills 55) When lower cost and differentiation strategies have a narrow focus on a market niche they are simply called A) cost leadership and differentiation. B) concentration and differentiation. C) cost focus and differentiation focus. D) competitive scope and focused differentiation. E) diversification and concentration. Answer: C Diff: 2 Page Ref: 186 Topic: Business Strategies 56) Which of Porter's competitive strategies recommends that a company emphasize a particular buyer group or geographic market and attempts to seek a cost advantage in its targeted segment? A) differentiation B) cost leadership C) differentiation focus D) competitive advantage E) cost focus Answer: E Diff: 2 Page Ref: 187 Topic: Business Strategies 57) Patagonia uses sustainability in pursuing which of Porter's generic strategies? A) differentiation B) cost leadership C) differentiation focus D) competitive advantage E) cost focus Answer: A Diff: 2 Page Ref: 187 Topic: Business Strategies AACSB: Analytic Skills 58) Orphagenix, a small biotech firm, avoids head-to-head competition with large pharmaceutical companies by developing orphan drugs to target diseases that affect fewer than 200,000 people. This is an example of which of Porter's generic strategies? A) differentiation B) cost leadership C) differentiation focus D) competitive advantage E) cost focus Answer: C Diff: 3 Page Ref: 187 Topic: Business Strategies AACSB: Analytic Skills 59) Which of Porter's competitive strategies concentrates on seeking differentiation in a particular buyer group, product line segment, or geographic market? A) differentiation B) cost leadership C) differentiation focus D) competitive advantage E) cost focus Answer: C Diff: 2 Page Ref: 187 Topic: Business Models 60) When a company following a differentiation strategy ensures that the higher price it charges for its higher quality is not priced too far above the price of the competition, the company is using the process of A) low-cost differentiation. B) cost leadership. C) cost proximity. D) basic differentiation. E) price fixing. Answer: C Diff: 3 Page Ref: 188 Topic: Business Strategies 61) Which of the following is NOT one of the risks of a cost leadership strategy? A) The technology that the organization has been using changes. B) Achieving excessive success causing jealousy amongst competitors. C) Competitors can achieve viable imitations. D) Cost focusers achieve even lower cost in niche market segments. E) Proximity in differentiation is lost. Answer: B Diff: 3 Page Ref: 188 Topic: Business Strategies 62) Which of the following is NOT one of the risks of the focus strategy? A) The target segment's structure erodes. B) The segment's differences from other segments narrow. C) The advantages of a broad line increase. D) The exit of focusers from the industry. E) Demand disappears for the product in the target segment. Answer: D Diff: 3 Page Ref: 188 Topic: Business Strategies 63) According to Porter, a business unit in a competitive marketplace with no generic competitive strategy is A) achieving synergy. B) practicing innovative leadership. C) stuck in the middle. D) not goal directed. E) last in line. Answer: C Diff: 1 Page Ref: 189 Topic: Business Strategies 64) Most entrepreneurial ventures follow A) differentiation strategies. B) focus strategies. C) no strategies. D) cost leadership strategies. E) all of the above Answer: B Diff: 2 Page Ref: 189 Topic: Business Strategies 65) Which of the following is NOT one of the eight dimensions of quality? A) serviceability B) durability C) performance D) value E) features Answer: D Diff: 1 Page Ref: 189 Topic: Business Strategies 66) A car's cruise control, known as a "bell and whistle" is an example of which of the eight dimensions of quality? A) performance B) features C) reliability D) durability E) aesthetics Answer: B Diff: 2 Page Ref: 189 Topic: Business Strategies AACSB: Analytic Skills 67) The focus strategies will likely predominate when many small and medium sized local companies compete for relatively small shares of the total market in a(n) A) united industry. B) fragmented industry. C) consolidated industry. D) isolated industry. E) integrated industry. Answer: B Diff: 3 Page Ref: 190 Topic: Business Strategies 68) As an industry matures while overcoming fragmentation and becomes dominated by a small number of large companies, it tends to become a(n) A) united industry. B) fragmented industry. C) consolidated industry. D) isolated industry. E) integrated industry. Answer: C Diff: 2 Page Ref: 190 Topic: Business Strategies 69) A method developed in the mid-1990s as an efficient means to quickly consolidate a fragmented industry can be referred to as a(n) A) strategic plan. B) strategic rollup. C) cost strategy. D) differentiation strategy. E) focus strategy. Answer: B Diff: 2 Page Ref: 190 Topic: Business Strategies 70) As an industry becomes hypercompetitive, firms initially respond by A) raising entry barriers. B) moving into untapped markets. C) attacking the strongholds of other firms. D) competing on cost and quality. E) working their way to a situation of perfect competition. Answer: D Diff: 3 Page Ref: 191 Topic: Business Strategies 71) The book Hypercompetition was written by A) Porter. B) Drucker. C) Mintzberg. D) Maslow. E) D'Aveni. Answer: E Diff: 1 Page Ref: 191 Topic: Business Strategies 72) The last stage of a hypercompetitive industry is reached when the remaining large global competitors A) raise entry barriers. B) move into untapped markets. C) attack the strongholds of other firms. D) compete on cost and quality. E) work their way to a situation of perfect competition in which no one has any advantage and profits are minimal. Answer: E Diff: 2 Page Ref: 191 Topic: Business Strategies 73) A tactic is defined by the text as A) a specific operating plan specifying how a strategy is to be implemented in terms of when and where it is to be put into action. B) the first company to manufacture and sell a new product or service. C) any action by a company or business unit that provides a direct or indirect indication of its intentions, motives, goals, or internal situation. D) policies which link formulation and implementation of the strategy. E) the ability to adapt a product or delivery system more closely to buyers' needs. Answer: A Diff: 1 Page Ref: 192 Topic: Business Strategies 74) Porter recommends that a division with tight cost control, frequent detailed control reports, a well structured organization, and quantitatively-based incentives is required for which of the following generic competitive strategies? A) focus B) differentiation C) overall cost leadership D) focus differentiation E) concentration Answer: C Diff: 3 Page Ref: 192 Topic: Business Strategies 75) If it is to be successful, Porter advises that a division possess strong marketing abilities, product engineering, a creative flair, strong capability in basic research and a corporate reputation for quality or technological leadership, for which one of the following generic competitive strategies? A) focus B) differentiation C) overall cost leadership D) vertical growth E) concentration Answer: B Diff: 3 Page Ref: 192 Topic: Business Strategies 76) Timing tactics answer the question A) who in the company implements strategy. B) where the strategy is implemented. C) what strategy is implemented. D) when a company implements a strategy. E) why a company implements a strategy. Answer: D Diff: 1 Page Ref: 193 Topic: Business Strategies 77) The first company to manufacture and sell a new product or service is called a(n) A) opportunist. B) first mover. C) cost leader. D) power broker. E) ground breaker. Answer: B Diff: 1 Page Ref: 193 Topic: Business Strategies 78) Which of the following is NOT an advantage of being a first mover? A) The company is able to establish a reputation as an industry leader. B) The company is able to move down the learning curve to assume the cost leader position. C) A first mover can set the standard for all subsequent products in the industry. D) Being first provides a company profit advantages for about ten years in consumer goods and about twelve years in industrial goods. E) First movers may be able to keep R & D costs low by imitating the technological advances of others. Answer: E Diff: 3 Page Ref: 193 Topic: Business Strategies AACSB: Reflective Thinking 79) Which offensive tactic utilizes a head-to-head approach with the firm's competitor by matching every category of competition from price to promotion to distribution channel? A) flanking maneuver B) bypass attack C) encirclement D) frontal assault E) guerilla warfare Answer: D Diff: 2 Page Ref: 193 Topic: Business Strategies 80) When Kimberly-Clark introduced Huggies disposable diapers against Procter & Gamble's market leading Pampers, they were using the offensive tactic known as a(n) A) flanking maneuver. B) frontal assault. C) encirclement. D) bypass attack. E) guerilla attack. Answer: B Diff: 3 Page Ref: 193 Topic: Business Strategies AACSB: Analytic Skills 81) Which tactic deals with where a company implements a strategy? A) a timing tactic B) a market location tactic C) collusion D) corporate strategy E) cooperative strategy Answer: B Diff: 1 Page Ref: 193 Topic: Business Strategies 82) Which offensive tactic advocates attacking a part of the market where the competitor is weak? A) flanking maneuver B) bypass attack C) encirclement D) frontal assault E) guerilla warfare Answer: A Diff: 2 Page Ref: 194 Topic: Business Strategies 83) Which offensive tactic proposes an indirect approach against the established competitor such as changing the rules of the game? A) flanking maneuver B) bypass attack C) encirclement D) frontal assault E) guerilla warfare Answer: B Diff: 2 Page Ref: 194 Topic: Business Strategies 84) When Yamaha entered the market with a broader range of pianos, keyboards, and other musical instruments, it was using which offensive tactic? A) flanking maneuver B) bypass attack C) encirclement D) frontal assault E) guerilla warfare Answer: C Diff: 3 Page Ref: 194 Topic: Business Strategies AACSB: Reflective Thinking 85) Which of the following is NOT an offensive tactic? A) frontal assault B) flanking maneuver C) guerilla warfare D) raising structural barriers E) encirclement Answer: D Diff: 2 Page Ref: 193-194 Topic: Business Strategies 86) Which offensive tactic have the microbreweries used against major brewers? A) flanking maneuver B) bypass attack C) encirclement D) frontal assault E) guerilla warfare Answer: E Diff: 3 Page Ref: 194 Topic: Business Strategies AACSB: Reflective Thinking 87) Which of the following is of defensive tactics? A) Defensive tactics aim to lower the probability of attack. B) Defensive tactics divert attacks to less threatening avenues. C) Defensive tactics lessen the intensity of an attack. D) Defensive tactics reduce short-term profitability to ensure long-term profitability. E) all of the above Answer: E Diff: 2 Page Ref: 194 Topic: Business Strategies 88) Which defensive tactic is used by Coca Cola with their offering of unprofitable noncarbonated beverages to keep competitors off store shelves? A) guerilla warfare B) lower the inducement for attack C) encirclement D) raise structural barriers E) increase expected retaliation Answer: D Diff: 3 Page Ref: 194 Topic: Business Strategies AACSB: Reflective Thinking 89) Which defensive tactic was used by Southwest Airlines when deliberately keeping their prices low and constantly investing in cost-reducing measures? A) guerilla warfare B) lower the inducement for attack C) encirclement D) raise structural barriers E) increase expected retaliation Answer: B Diff: 3 Page Ref: 195 Topic: Business Strategies AACSB: Reflective Thinking 90) According to Porter, strategies to raise structural barriers include all of the following EXCEPT A) tie up suppliers by obtaining exclusive contracts. B) avoid suppliers that also serve competitors. C) decrease scale economies. D) block channel access by signing exclusive agreements. E) raise buyer switching costs by offering training to users. Answer: C Diff: 2 Page Ref: 194-195 Topic: Business Strategies 91) The two general types of cooperative strategies are A) competitive and functional. B) collusion and competitive. C) strategic alliances and collusion. D) strategic alliances and competitive. E) competitive and collusive alliances. Answer: C Diff: 1 Page Ref: 195 Topic: Business Strategies 92) Which of the following is NOT a reason companies or business units may form a strategic alliance? A) To obtain technological and/or manufacturing capabilities. B) To reduce financial risk. C) To reduce political risk. D) To set prices in the industry. E) To learn new capabilities. Answer: D Diff: 2 Page Ref: 196-197 Topic: Business Strategies 93) The kind of strategic alliance in which there is a partnership of similar companies in similar industries who pool their resources to gain a benefit that is too expensive to develop alone is the A) joint venture. B) licensing agreement. C) value-chain partnership. D) mutual service consortia. E) holding company. Answer: D Diff: 1 Page Ref: 197 Topic: Business Strategies 94) Which strategy has been used successfully by Yum! Brands to establish KFC and Pizza Hut restaurants across the globe? A) joint venture B) licensing arrangement C) strategic alliance D) marketing strategy E) value-chain partnership Answer: B Diff: 3 Page Ref: 198 Topic: Business Strategies AACSB: Reflective Thinking 95) The kind of strategic alliance in which a company forms a strong and close long-term relationship for mutual advantage with a key supplier or distributor is the A) joint venture. B) licensing agreement. C) value-chain partnership. D) mutual service consortia. E) holding company. Answer: C Diff: 2 Page Ref: 198 Topic: Business Strategies 96) Which of the following is NOT considered a strategic alliance success factor? A) Have a clear strategic purpose. B) Operate with short term time horizon. C) Agree on an exit strategy for when the partners' objectives are achieved. D) Minimize conflicts among the partners by clarifying the objectives. E) Identify likely partnering risks and deal with them when the alliance is formed. Answer: B Diff: 2 Page Ref: 199 Topic: Business Strategies What is a propitious niche? Provide an example of a firm that has been able to successfully occupy a propitious niche. Explain the four combination strategies that may be generated from the TOWS Matrix. What are Porter's four generic strategies? Discuss the difference between a fragmented and a consolidated industry. What are timing tactics? Discuss offensive tactics and defensive tactics. What are cooperative strategies? What are the types of alliances that business can engage in?

MGT498 Final Exam / Chapter 5 Internal Scanning and Organizational Analysis. 100% Solutions and references Resources are the organization's assets and are the basic building blocks of the organization. Answer: Diff: 1 Page Ref: 138 Topic: A Resource-Based Approach to Organizational Analysis 2) The resources of an organization include tangible assets, human assets, and intangible assets. Answer: Diff: 2 Page Ref: 138 Topic: A Resource-Based Approach to Organizational Analysis 3) Capabilities refer to a corporation's ability to exploit its resources. Answer: Diff: 2 Page Ref: 138 Topic: A Resource-Based Approach to Organizational Analysis 4) New product development would be a core competency if it goes beyond one division. Answer: Diff: 2 Page Ref: 138 Topic: A Resource-Based Approach to Organizational Analysis AACSB: Analytic Skills 5) General Electric is well known for its distinctive competency in management development. Answer: Diff: 2 Page Ref: 138 Topic: A Resource-Based Approach to Organizational Analysis 6) Core competencies may mature and become core deficiencies. Answer: Diff: 2 Page Ref: 138 Topic: A Resource-Based Approach to Organizational Analysis 7) An example of a cluster in the US is found in the Silicon Valley. Answer: Diff: 2 Page Ref: 140 Topic: A Resource-Based Approach to Organizational Analysis AACSB: Analytic Skills 8) Two characteristics that determine the sustainability of a firm's distinctive competency are durability and transparency. Answer: Diff: 2 Page Ref: 140 Topic: A Resource-Based Approach to Organizational Analysis 9) Durability is the rate at which a firm's underlying resources and capabilities (core competencies) can be duplicated by others. Answer: Diff: 1 Page Ref: 140 Topic: A Resource-Based Approach to Organizational Analysis 10) A core competency can be easily imitated to the extent that it is transparent, transferable, and replicable. Answer: Diff: 3 Page Ref: 140 Topic: A Resource-Based Approach to Organizational Analysis 11) Since competitors were not able to understand how Gillette's Mach 3 razor was produced, it was considered transparent. Answer: Diff: 2 Page Ref: 140 Topic: A Resource-Based Approach to Organizational Analysis AACSB: Analytic Skills 12) Transferability is the ability of competitors to use duplicated resources and capabilities to imitate the other firm's success. Answer: Diff: 1 Page Ref: 140 Topic: A Resource-Based Approach to Organizational Analysis 13) Tacit knowledge is knowledge that can be easily communicated or articulated and as result can be easily imitated. Answer: Diff: 1 Page Ref: 141 Topic: A Resource-Based Approach to Organizational Analysis 14) eBay and Amazon.com have successfully used the efficiency model by acting as an intermediary to connect multiple sellers to multiple buyers. Answer: Diff: 3 Page Ref: 143 Topic: Business Models AACSB: Reflective Thinking 15) A value chain is a linked set of value-creating activities. Answer: Diff: 1 Page Ref: 143 Topic: Value-Chain Analysis 16) A company's center of gravity is the part of the value chain that is most important to the company and the point where its greatest expertise and core competencies lie. Answer: Diff: 2 Page Ref: 145 Topic: Value-Chain Analysis 17) A company's center of gravity is usually the point at which the company started. Answer: Diff: 2 Page Ref: 145 Topic: Value-Chain Analysis 18) According to Porter, a manufacturing firm's support activities usually begin with inbound logistics, go through an operations process in which a product is manufactured, and continue on to outbound logistics and finally to service. Answer: Diff: 2 Page Ref: 146 Topic: Value-Chain Analysis 19) When a company uses the same marketing channel for two separate products, this is an example of an economy of scope. Answer: Diff: 2 Page Ref: 147 Topic: Value-Chain Analysis AACSB: Analytic Skills 20) A functional structure is appropriate for a medium sized firm with several product lines in one industry. Answer: Diff: 1 Page Ref: 147 Topic: Scanning Functional Resources and Capabilities 21) A divisional structure has no functional or product categories and is appropriate for a small, entrepreneur-dominated company with one or two product lines that operates in a reasonably small, easily identifiable market niche. Answer: Diff: 2 Page Ref: 147 Topic: Scanning Functional Resources and Capabilities 22) Cultural integration is the degree to which members of a unit accept the norms, values, or other culture content associated with the unit. Answer: Diff: 2 Page Ref: 149 Topic: Scanning Functional Resources and Capabilities 23) When employees across the organization hold the same cultural values and norms, this demonstrates a high level of cultural integration. Answer: Diff: 2 Page Ref: 149 Topic: Scanning Functional Resources and Capabilities AACSB: Analytic Skills 24) The corporate culture generally reflects the values of the founder(s) and the mission of the firm. Answer: Diff: 1 Page Ref: 149 Topic: Scanning Functional Resources and Capabilities 25) The marketing mix refers to the particular combination of key variables under the corporation's control that can be used to affect demand and to gain competitive advantage. Answer: Diff: 1 Page Ref: 151 Topic: Scanning Functional Resources and Capabilities 26) The product life cycle enables a marketing manager to examine the marketing mix of a particular product or group of products in terms of its position in its life cycle. Answer: Diff: 2 Page Ref: 152 Topic: Scanning Functional Resources and Capabilities 27) Research reveals a positive relationship between corporate reputation and financial performance. Answer: Diff: 2 Page Ref: 153 Topic: Scanning Functional Resources and Capabilities AACSB: Reflective Thinking 28) Research indicates that greater financial leverage has a positive impact on performance for firms in dynamic environments. Answer: Diff: 3 Page Ref: 153 Topic: Scanning Functional Resources and Capabilities AACSB: Reflective Thinking 29) A good rule of thumb for R & D spending is that a corporation should spend at a "normal" rate for that particular industry unless its strategic plan calls for unusual expenditures. Answer: Diff: 1 Page Ref: 154 Topic: Scanning Functional Resources and Capabilities 30) A company's capability in product R & D can be measured by consistent reductions in unit manufacturing costs and by the number of product defects. Answer: Diff: 2 Page Ref: 154 Topic: Scanning Functional Resources and Capabilities 31) It is generally accepted that product R & D normally dominates the early stages of a product's life cycle, whereas process R & D becomes especially important in the later stages. Answer: Diff: 2 Page Ref: 154 Topic: Scanning Functional Resources and Capabilities 32) Historically, competitive leadership in a market changes hands as one technology nears the end of its S-curve. Answer: Diff: 1 Page Ref: 155 Topic: Scanning Functional Resources and Capabilities 33) An example of an intermittent manufacturing system is an auto body repair shop. Answer: Diff: 2 Page Ref: 156-157 Topic: Scanning Functional Resources and Capabilities AACSB: Analytic Skills 34) Intermittent manufacturing systems reap benefits from economies of scale. Answer: Diff: 2 Page Ref: 157 Topic: Scanning Functional Resources and Capabilities AACSB: Reflective Thinking 35) Flexible manufacturing permits the low-volume output of custom-tailored products at relatively low unit costs through economies of scope. Answer: Diff: 2 Page Ref: 158 Topic: Scanning Functional Resources and Capabilities 36) Using concurrent engineering, Chrysler Corporation was able to reduce its product development cycle from 60 to 36 months. Answer: Diff: 2 Page Ref: 159 Topic: Scanning Functional Resources and Capabilities 37) To increase flexibility, avoid layoffs, and reduce labor costs, corporations are using more contingent workers. Answer: Diff: 1 Page Ref: 160 Topic: Scanning Functional Resources and Capabilities AACSB: Reflective Thinking 38) A current trend in corporate information systems is the increasing use of the Internet for marketing, intranets for internal communication, and extranets for logistics and distribution. Answer: Diff: 1 Page Ref: 162 Topic: Scanning Functional Resources and Capabilities 39) The EFAS Table is one way to organize the internal factors into generally accepted categories of strengths and weaknesses as well as to analyze how well a particular company's management is responding to these specific factors in light of the perceived importance of these factors to the company. Answer: Diff: 2 Page Ref: 129 Topic: Synthesis of Internal Factors 40) Those critical strengths and weaknesses that are likely to determine if a firm will be able to take advantage of opportunities while avoiding threats are called A) SWOT. B) competitive forces. C) internal strategic factors. D) quality accounting. E) factor analysis. Answer: C Diff: 1 Page Ref: 138 Topic: A Resource-Based Approach to Organizational Analysis 41) Which of the following is NOT one of the four question areas Barney proposes in his VRIO framework used to evaluate a firm's key resources? A) durability B) organization C) rareness D) value E) imitability Answer: A Diff: 2 Page Ref: 138 Topic: A Resource-Based Approach to Organizational Analysis 42) When a company determines a competency's competitive advantage, Barney refers to this issue as A) value. B) rareness. C) imitability. D) organization. E) durability. Answer: A Diff: 2 Page Ref: 138 Topic: A Resource-Based Approach to Organizational Analysis AACSB: Analytic Skills 43) According to Barney's VRIO framework, the exploitation of a resource pertains to the ________ of the resource. A) value B) rareness C) imitability D) organization E) durability Answer: D Diff: 2 Page Ref: 138 Topic: A Resource-Based Approach to Organizational Analysis 44) A corporation's ability to exploit its resources is referred to as its A) resources. B) capabilities. C) core competencies. D) critical success factors. E) key performance factors. Answer: B Diff: 1 Page Ref: 138 Topic: A Resource-Based Approach to Organizational Analysis 45) Things that a corporation can do exceedingly well across the corporation are called A) resources. B) distinctive competencies. C) core competencies. D) critical success factors. E) key performance factors. Answer: C Diff: 2 Page Ref: 138 Topic: A Resource-Based Approach to Organizational Analysis 46) When a company's core competencies are superior to those of competitors, these are known as A) resources. B) distinctive competencies. C) core competencies. D) critical success factors. E) key performance factors. Answer: B Diff: 1 Page Ref: 138 Topic: A Resource-Based Approach to Organizational Analysis 47) Which of the following statements is concerning clusters? A) The desire to build or upgrade a core competency is one reason why entrepreneurial and other fast-growing firms often tend to locate close to their competitors. B) Clusters are geographic concentrations of interconnected companies and industries. C) An example of a cluster in the U.S. is California's Silicon Valley. D) According to Porter, clusters provide access to employees, suppliers, specialized information, and complementary products. E) all of the above Answer: E Diff: 3 Page Ref: 140 Topic: A Resource-Based Approach to Organizational Analysis 48) The rate at which a firm's underlying resources and capabilities depreciate or become obsolete is called A) replicability. B) transparency. C) imitability. D) durability. E) transferability. Answer: D Diff: 1 Page Ref: 140 Topic: A Resource-Based Approach to Organizational Analysis 49) The rate at which a firm's underlying resources, capabilities, or core competencies can be duplicated by others is called A) replicability. B) transparency. C) imitability. D) durability. E) transferability. Answer: C Diff: 1 Page Ref: 140 Topic: A Resource-Based Approach to Organizational Analysis 50) When a company takes apart a competitor's product in order to find out how it works, this process is known as A) durability. B) replicability. C) reverse engineering. D) transparency. E) transferability. Answer: C Diff: 2 Page Ref: 140 Topic: A Resource-Based Approach to Organizational Analysis 51) The speed with which other firms can understand the relationship of resources and capabilities supporting a successful firm's strategy is called A) imitability. B) reverse engineering. C) transferability. D) transparency. E) durability. Answer: D Diff: 2 Page Ref: 140 Topic: A Resource-Based Approach to Organizational Analysis 52) The ability of competitors to use duplicated resources and capabilities to imitate the other firm's success is called A) imitability. B) durability. C) transferability. D) transparency. E) replicability. Answer: E Diff: 1 Page Ref: 141 Topic: A Resource-Based Approach to Organizational Analysis 53) Knowledge that can be easily articulated and communicated is known as A) tacit knowledge. B) explicit knowledge. C) imitable knowledge. D) transferable knowledge. E) durable knowledge. Answer: B Diff: 1 Page Ref: 141 Topic: A Resource-Based Approach to Organizational Analysis 54) ________ is more valuable because it can provide companies with a sustainable competitive advantage that is harder for competitors to imitate. A) Tacit knowledge B) Explicit knowledge C) Imitable knowledge D) Transferable knowledge E) Durable knowledge Answer: A Diff: 3 Page Ref: 141 Topic: A Resource-Based Approach to Organizational Analysis AACSB: Reflective Thinking 55) Knowledge that is not easily communicated because it is deeply rooted in employee experience or in a corporation's culture is called A) tacit knowledge. B) explicit knowledge. C) imitable knowledge. D) transferable knowledge. E) durable knowledge. Answer: A Diff: 1 Page Ref: 141 Topic: A Resource-Based Approach to Organizational Analysis 56) On the continuum of resource sustainability, where would Sony's Walkman be placed? A) slow-cycle resources B) sustainable resources C) standard-cycle resources D) fast-cycle resources E) down-cycle resources Answer: D Diff: 3 Page Ref: 141-142 Topic: A Resource-Based Approach to Organizational Analysis AACSB: Analytic Skills 57) The business model used by IBM to make money not selling IBM products, but by selling its expertise to improve their customers operations is the A) profit pyramid model. B) advertising model. C) customer solutions model. D) efficiency model. E) entrepreneurial model. Answer: C Diff: 3 Page Ref: 142 Topic: Business Models AACSB: Analytic Skills 58) The business model used by HP in selling printers and printer cartridges is the A) profit pyramid model. B) advertising model. C) customer solutions model. D) efficiency model. E) multi-component system/installed base model. Answer: E Diff: 3 Page Ref: 142 Topic: Business Models AACSB: Analytic Skills 59) A linked set of value-creating activities beginning with basic materials provided by suppliers and ending with distributors getting the final product into the hands of the ultimate consumer is called a(n) A) value chain. B) continuum of sustainability. C) strategic capability. D) fully integrated activity set. E) a strategic group. Answer: A Diff: 2 Page Ref: 143 Topic: Value-Chain Analysis 60) The part of an industry's value chain that is most important to a company and the point where its greatest expertise and capabilities lie is called the company's A) functional crossroads. B) center of gravity. C) dynamic equilibrium. D) R&D intensity. E) economy of scope. Answer: B Diff: 2 Page Ref: 145 Topic: Value-Chain Analysis 61) Which of the following is NOT a primary activity of the value chain? A) raw materials handling B) installation C) repair D) purchasing E) warehousing Answer: D Diff: 2 Page Ref: 146 Topic: Value-Chain Analysis 62) Which of the following is NOT a support activity of the value chain? A) procurement B) technology development C) human resource management D) marketing and sales E) strategic planning Answer: D Diff: 2 Page Ref: 146 Topic: Value-Chain Analysis 63) When examining the corporate value chain of a particular product or service, which one of the following is NOT one of the PRIMARY activities that usually occur? A) operations B) inbound and outbound logistics C) auditing and accounting D) marketing and sales E) customer service Answer: C Diff: 2 Page Ref: 146 Topic: Value-Chain Analysis 64) The second step when analyzing the value-added chain is to A) identify the legal ramifications and responsibilities of their product or service. B) examine the linkages among the product's or service's value activities. C) confirm that all variables have been included and taken into consideration. D) ensure that quality management is adequately addressed. E) examine the potential synergies among the corporation's product or business units. Answer: B Diff: 3 Page Ref: 146 Topic: Value-Chain Analysis 65) When the value chains of two separate products or services share activities, such as the same marketing channels, in order to reduce costs, this is an example of A) economies of scope. B) economies of scale. C) economies of integration. D) economies of learning. E) outsourcing. Answer: A Diff: 2 Page Ref: 147 Topic: Value-Chain Analysis 66) Which of the following describes a typical functional structure? A) Employees tend to be specialists in the business functions important to that industry such as manufacturing, marketing, finance, and human resources. B) This is most appropriate for large corporations with many product lines in several related industries, with employees acting as specialists attempting to gain synergy among divisional activities. C) This is most appropriate for small, entrepreneur-dominated companies with one or two product lines that operate in a small niche market, with employees acting as jack-of-all trades. D) Employees have two or more superiors, a project manager and a functional manager. E) This is most appropriate for large corporations with many product lines in several unrelated industries, with employees acting as specialists but with no attempt at gaining synergy among the divisions. Answer: A Diff: 3 Page Ref: 147 Topic: Scanning Functional Resources and Capabilities 67) Which of the following best describes a simple structure? A) Work is divided into subunits on the basis of such functions as manufacturing, marketing, finance, and human resources. B) This is most appropriate for large corporations with many product lines in several related industries, with employees acting as functional specialists attempting to gain synergy among divisional activities. C) This is most appropriate for small, entrepreneur-dominated companies with one or two product lines that operate in a small niche market, with employees acting as jack-of-all trades. D) Employees have two or more superiors, a project manager and a functional manager. E) This is most appropriate for large corporations with many product lines in several unrelated industries, with employees acting as functional specialists but with no attempt at gaining synergy among the divisions. Answer: C Diff: 2 Page Ref: 147 Topic: Scanning Functional Resources and Capabilities 68) Which one of the following best describes a divisional structure? A) Work is divided into subunits on the basis of such functions as manufacturing, marketing, finance, and human resources. B) This is most appropriate for large corporations with many product lines in several related industries, with employees acting as functional specialists attempting to gain synergy among divisional activities. C) This is most appropriate for small, entrepreneur-dominated companies with one or two product lines that operate in a small niche market, with employees acting as jack-of-all trades. D) Employees have two or more superiors, a project manager and a functional manager. E) This is most appropriate for large corporations with many product lines in several unrelated industries, with employees acting as functional specialists but with no attempt at gaining synergy among the divisions. Answer: B Diff: 3 Page Ref: 147 Topic: Scanning Functional Resources and Capabilities 69) Which one of the following best describes a conglomerate structure? A) Work is divided into subunits on the basis of such functions as manufacturing, marketing, finance, and human resources. B) This is most appropriate for large corporations with many product lines in several related industries, with employees acting as functional specialists attempting to gain synergy among divisional activities. C) This is most appropriate for small, entrepreneur-dominated companies with one or two product lines that operate in a small niche market, with employees acting as jack-of-all trades. D) Employees have two or more superiors, a project manager and a functional manager. E) This is most appropriate for large corporations with many product lines in several unrelated industries; unrelatedness prevents any attempt at gaining synergy among the divisions. Answer: E Diff: 2 Page Ref: 148 Topic: Scanning Functional Resources and Capabilities 70) According to the text, which one of the following is NOT descriptive of a corporation's culture? A) A corporation's culture is a collection of beliefs, expectations, and values learned and shared by corporation's members and transmitted from one generation of employees to another. B) Corporate cultures are only temporary and can be easily changed. C) Corporate culture norms are created which define acceptable behavior from top management to operative employee. D) Myths and rituals often emerge over time to explain why a certain aspect of the culture is important. E) Cultures have a powerful influence on the behavior of managers and can strongly affect a corporation's ability to shift its strategic direction. Answer: B Diff: 2 Page Ref: 149 Topic: Scanning Functional Resources and Capabilities 71) What are the two distinct attributes of corporate culture? A) differentiation and integration B) durability and imitability C) concern for people and concern for task D) intensity and integration E) amount of complexity and tolerance of change Answer: D Diff: 2 Page Ref: 149 Topic: Scanning Functional Resources and Capabilities 72) What is the attribute of corporate culture that is the degree to which members of a unit accept the norms, values, or other culture content associated with the unit? A) integration B) strength C) intensity D) coordination E) unity Answer: C Diff: 2 Page Ref: 149 Topic: Scanning Functional Resources and Capabilities 73) Which of the following is a function of corporate culture? A) It encourages a laissez faire set of attitudes. B) It encourages flexibility and thus constant change. C) It conveys a sense of identity for employees. D) It generates creative approaches to new situations. E) It focuses employee commitment on their own careers. Answer: C Diff: 3 Page Ref: 149 Topic: Scanning Functional Resources and Capabilities 74) Which of the following is NOT a function of corporate culture? A) conveys a sense of identity for employees B) adds to the stability of the organization as a social system C) helps generate employee commitment to something greater than themselves D) keeps people guessing about what to do next E) serves as a frame of reference for employees to use as a guide for appropriate behavior Answer: D Diff: 3 Page Ref: 149 Topic: Scanning Functional Resources and Capabilities 75) The breadth of an organization's culture is also known as A) cultural integration. B) cultural diversification. C) cultural intensity. D) cultural strategy. E) cultural prerogative. Answer: A Diff: 2 Page Ref: 149 Topic: Scanning Functional Resources and Capabilities 76) Through market research, corporations can target their various products or services so that management can discover what niches to seek or develop, and how to minimize competitive pressure. This is descriptive of A) marketing position. B) product life cycle. C) market segmentation. D) marketing mix. E) marketing leverage. Answer: C Diff: 2 Page Ref: 151 Topic: Scanning Functional Resources and Capabilities AACSB: Analytic Skills 77) The particular combination of product, place, promotion, and price is called A) marketing position. B) product life cycle. C) market segmentation. D) marketing mix. E) marketing leverage. Answer: D Diff: 1 Page Ref: 151 Topic: Scanning Functional Resources and Capabilities 78) An example of the promotion variable of the marketing mix is A) advertising. B) discounts C) location. D) services. E) quality. Answer: A Diff: 2 Page Ref: 151 Topic: Scanning Functional Resources and Capabilities AACSB: Analytic Skills 79) A graph showing time plotted against the dollar sales of a product as it moves from introduction through growth and maturity to decline is called the A) marketing position. B) product life cycle. C) market segmentation. D) marketing mix. E) marketing leverage. Answer: B Diff: 2 Page Ref: 152 Topic: Scanning Functional Resources and Capabilities 80) Which of the following statements is concerning a corporate reputation? A) It is a widely held perception of a company by the general public. B) A good corporate reputation can be a strategic resource. C) There is a positive relationship between corporate reputation and financial performance. D) Reputation tends to be long-lasting and hard for others to duplicate. E) all of the above Answer: E Diff: 2 Page Ref: 152-153 Topic: Scanning Functional Resources and Capabilities 81) As compared to a firm with low financial leverage, a firm with a high amount of financial leverage in an expanding market should have A) lower profits. B) higher profits C) higher earnings per share. D) lower earnings per share. E) higher sales revenue. Answer: C Diff: 3 Page Ref: 153 Topic: Scanning Functional Resources and Capabilities AACSB: Reflective Thinking 82) The ratio of total debt to total assets is known as A) budgeting leverage. B) capital finance. C) capital budgeting. D) financial leverage. E) financial budgeting. Answer: D Diff: 1 Page Ref: 153 Topic: Scanning Functional Resources and Capabilities 83) Which of the following is NOT a responsibility of a research and development manager? A) Choosing among alternative new technologies to use within the corporation. B) Developing methods of embodying the new technology in new products and processes. C) Deploying resources so that the new technology can be successfully implemented. D) Taking the design and operationalizing the plan into mass production. E) Suggesting and implementing a corporation's technological strategy in light of its corporate objectives and policies. Answer: D Diff: 3 Page Ref: 154 Topic: Scanning Functional Resources and Capabilities AACSB: Reflective Thinking 84) The process of taking a new technology from the laboratory to the marketplace is called A) economies of scope versus operating leverage. B) the R&D mix. C) technological competence. D) technological discontinuity. E) technology transfer. Answer: E Diff: 2 Page Ref: 154 Topic: Scanning Functional Resources and Capabilities 85) When scientists concentrate on quality control and the development of design specifications, this is referred to as A) basic R&D. B) product R&D. C) engineering R&D. D) life cycle R&D. E) R&D mix. Answer: C Diff: 2 Page Ref: 154 Topic: Scanning Functional Resources and Capabilities AACSB: Analytic Skills 86) The displacement of one technology by another, as shown by two S-shaped curves on a graph, is referred to as A) economies of scope versus operating leverage. B) technology transfer. C) the R&D mix. D) technological discontinuity. E) a disjunctive learning or experience curve. Answer: D Diff: 2 Page Ref: 155 Topic: Scanning Functional Resources and Capabilities 87) The proposition that silicon chips double in complexity every 18 months is referred to as A) Ohm's Law. B) Porter's Five Forces Model. C) Moore's Law. D) Mintzberg's Rule. E) Keynesian's Theory. Answer: C Diff: 2 Page Ref: 155 Topic: Scanning Functional Resources and Capabilities 88) In Christensen's book, The Innovator's Dilemma, he explains that managers remain with certain technologies based on A) return of investment. B) net present value. C) cost reduction. D) total operating expenses. E) time spent during technology implementation. Answer: A Diff: 3 Page Ref: 156 Topic: Scanning Functional Resources and Capabilities 89) According to the text, the primary task of the operations manager is to A) make sure all the products or services are producing maximum revenue. B) develop and operate a system that will produce the required number of products or services with a certain quality, at a given cost, within an allotted time. C) make sure the process has a high quality control. D) ensure that the process is manufactured or delivered as efficiently as possible. E) interface with the other functional departments to coordinate their operations in avoiding duplication of effort. Answer: B Diff: 2 Page Ref: 156 Topic: Scanning Functional Resources and Capabilities 90) Which of the following terms best describes a system in which items are normally processed sequentially, but the work and sequence of the process vary? A) continuous system B) debt capacity C) chronological processing D) operating leverage E) intermittent system Answer: E Diff: 2 Page Ref: 156-157 Topic: Scanning Functional Resources and Capabilities AACSB: Analytic Skills 91) An automobile assembly line is an example of which approach to manufacturing? A) continuous system B) debt capacity C) sequential processing D) job shop E) intermittent system Answer: A Diff: 2 Page Ref: 157 Topic: Scanning Functional Resources and Capabilities AACSB: Analytic Skills 92) The impact of a specific change in sales volume on net operating income is referred to as the A) continuous system. B) chronological processing. C) operating leverage. D) debt capacity. E) intermittent system. Answer: C Diff: 1 Page Ref: 157 Topic: Scanning Functional Resources and Capabilities 93) The concept that suggests that unit production costs decline by some fixed percent each time the total accumulated volume of production in units doubles is referred to as A) the R & D mix. B) the experience curve. C) technological competence. D) break-even analysis. E) technology transfer. Answer: B Diff: 2 Page Ref: 157 Topic: Scanning Functional Resources and Capabilities 94) Which one of the following is NOT descriptive of the experience curve? A) It is very useful because it is consistent within the industry for all involved organizations over time. B) It is used to estimate the production cost of a product produced by newly introduced techniques or processes. C) It is used to estimate the production costs of a product never before made with the present techniques and process. D) The concept was first applied in the airframe industry. E) It shows that production costs decline by some fixed percentage as production in units doubles. Answer: A Diff: 3 Page Ref: 157-158 Topic: Scanning Functional Resources and Capabilities AACSB: Reflective Thinking 95) Flexible manufacturing emphasizes A) high-volume output of mass produced products. B) the cost advantages of an intermittent system with the customer-oriented advantages of a continuous system. C) the learning curve is longer since technology is automated. D) economies of scope over economies of scale. E) economies of scale over economies of scope. Answer: D Diff: 2 Page Ref: 158 Topic: Scanning Functional Resources and Capabilities AACSB: Reflective Thinking 96) Strategic managers must be concerned with human resource management because A) dealing with people is their primary job. B) quality of work life is more important than strategic management. C) they must be aware of the ability and willingness of the workforce to implement new strategies. D) workers are more likely to go on strike if management attempts to cross them. E) they must be aware of the possibility and potential of unionism. Answer: C Diff: 2 Page Ref: 158 Topic: Scanning Functional Resources and Capabilities 97) In order to move more quickly through a product's development stage, companies like Motorola and Chrysler are using A) concurrent engineering. B) cross-functional work teams. C) advisory committees. D) task forces. E) continuous engineering. Answer: B Diff: 2 Page Ref: 159 Topic: Scanning Functional Resources and Capabilities AACSB: Reflective Thinking 98) The term that describes putting once isolated specialists together to work and compare notes in a collective product design effort is called A) simultaneous strategy. B) participatory planning. C) jointly-designed objectives. D) concurrent engineering. E) cooperative design. Answer: D Diff: 2 Page Ref: 159 Topic: Scanning Functional Resources and Capabilities 99) Human resource departments have found that to reduce employee dissatisfaction and unionization efforts, they must A) significantly increase their wage rates. B) shorten the work week to allow for more leisure time. C) offer a wider variety of benefits and attractive enticements. D) guarantee their workers life time jobs. E) consider the quality of work life in the design of jobs. Answer: E Diff: 3 Page Ref: 160 Topic: Scanning Functional Resources and Capabilities 100) Which one of the following is NOT one of the four methods to improve the corporation's quality of work life? A) Improve the work environment B) Introduce participative problem-solving C) More responsive management D) Introduce innovative reward systems E) Restructuring work Answer: C Diff: 2 Page Ref: 160 Topic: Scanning Functional Resources and Capabilities 101) The mix in the workplace of people from different races, cultures, and backgrounds is referred to as A) demographics. B) human diversity. C) quality of work life. D) globalization. E) internationalization. Answer: B Diff: 1 Page Ref: 161 Topic: Scanning Functional Resources and Capabilities 102) The PRIMARY task of the manager of information systems is to A) prevent unlawful usage of the information from the system. B) make sure the information contained in the system is up-to-date and accurate. C) monitor the input of information into the information system. D) design and manage the flow of information in a corporation to improve productivity and decision making. E) ensure that only those who have authorized permission have access to the information system. Answer: D Diff: 2 Page Ref: 162 Topic: Scanning Functional Resources and Capabilities Discuss the two characteristics that determine the sustainability of a firm's distinctive competency.Describe Barney's VRIO framework. Discuss the two characteristics that determine the sustainability of a firm's distinctive competency. Define a value chain and the significance of the center of gravity. Discuss the three basic organizational structures. What are the two distinct attributes of culture? What is R & D intensity? Distinguish between continuous and intermittent systems providing examples of each.

BTEC Level 3 Engineering: Unit 44 (P9) – Engineering Maintenance Procedures and Techniques You will receive a 2 page fully detailed assignment answer to the following question: P9: Explain the need to monitor the performance and condition of engineered systems. BTEC Level 3 Engineering: Unit 44 – Engineering Maintenance Procedures and Techniques

BTEC Level 3 Engineering: Unit 45 (P7) – Monitoring and Fault Diagnosis of Engineering Systems You will receive a 2 page fully detailed assignment answer to the following question: P7: Use procedures to carry out system monitoring on two separate engineering systems. BTEC Level 3 Engineering: Unit 45 – Monitoring and Fault Diagnosis of Engineering Systems

BTEC Level 3 Engineering: Unit 45 (P8) – Monitoring and Fault Diagnosis of Engineering Systems You will receive a 2 page fully detailed assignment answer to the following question: P8: Explain the terms and two different techniques related to fault diagnosis. BTEC Level 3 Engineering: Unit 45 – Monitoring and Fault Diagnosis of Engineering Systems

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BTEC Level 3 Engineering: Unit 5 (P7) – Mechanical Principles and Applications You will receive a 2 page fully detailed assignment answer to the following question: P7: Use the continuity of volume and mass flow for an incompressible fluid to determine the design characteristics of a gradually tapering pipe. BTEC Level 3 Engineering: Unit 5 – Mechanical Principles and Applications