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Description Marketing Management 3rd Edition- Test Bank Sample Questions Instant Download With Answers Chapter 3 Elements of Marketing Strategy, Planning, and Competition 1) From a customer’s perspective, value is the ratio of the bundle of benefits a customer receives from an offering compared to the costs incurred by the customer in acquiring that bundle of benefits.
Answer: TRUE Explanation: Value is the ratio of benefits to costs as perceived by the customer. Difficulty: 1 Easy Topic: The Concept of Customer Value Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom’s: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation
2) Value is some type of utility that a company and its products provide for customers.
Answer: FALSE Explanation: A benefit is some type of utility that a company and its products (and services) provide its customers, such as form, time, place, and ownership. Difficulty: 1 Easy
Topic: The Concept of Customer Value Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom’s: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation
3) Starbucks is known to have shops located in close proximity to enable customers to shop conveniently. It appears that the coffee shop chain is offering place utility.
Answer: TRUE Explanation: The three utilities—time, place, and ownership—are created by marketing. They are created when products are available to customers at a convenient location when they want to purchase them, and facilities of exchange are available that allow for transfer of the product ownership from seller to buyer. Difficulty: 2 Medium Topic: The Concept of Customer Value Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom’s: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation
4) Samsung’s first value proposition when the brand was launched in the United States was price and functionality.
Answer: TRUE
Explanation: When South Korean-based Samsung first brought its brand to the United States, it communicated a message that was centered primarily on functionality at a moderate price—a strategy designed to provide an advantage over pricier Japanese brands. Difficulty: 1 Easy Topic: The Concept of Customer Value Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom’s: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation
5) When a firm communicates the value proposition of its products to customers, the value message only includes the benefits of the product.
Answer: FALSE Explanation: When a firm communicates the value proposition of its products to customers, the value message may include the whole bundle of benefits the company promises to deliver, not just the benefits of the product itself. Difficulty: 1 Easy Topic: The Concept of Customer Value Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom’s: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 6) For firms interested in building long-term customer relationships, having satisfied customers is enough to ensure the relationship is going to last.
Answer: FALSE Explanation: For years, firms have been preoccupied with measuring customer satisfaction, which at its most fundamental level means how much the customer likes the product. However, for firms interested in building long-term customer relationships, having satisfied customers is not enough to ensure the relationship is going to last. Difficulty: 2 Medium Topic: The Concept of Customer Value Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom’s: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation
7) Outbound logistics refers to the distribution of products.
Answer: TRUE Explanation: One of the five primary activities in the value chain is outbound logistics—how the firm transports and distributes the final products to the marketplace. Difficulty: 1 Easy Topic: The Concept of Customer Value Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom’s: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation
8) As long as all activities in the value chain are working well, managers do not need to be concerned with aligning the activities.
Answer: FALSE Explanation: CEOs in recent years have been concentrating on aligning the various elements of the value chain, meaning that all facets of the company are working together to ensure that no snags will negatively impact the firm’s value proposition. Difficulty: 1 Easy Topic: The Concept of Customer Value Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom’s: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 9) The last element in the value chain is margin, which refers to profit made by the firm.
Answer: TRUE Explanation: According to the text, the last element in the value chain is margin, or the profit made by the firm. Difficulty: 1 Easy Topic: The Concept of Customer Value Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom’s: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation
10) At the strategic level, marketing (little m) serves as the driver of business strategy.
Answer: FALSE Explanation: At the strategic level, Marketing (Big M) serves as a core driver of business strategy. At the functional or operational level, marketing (little m) represents the specific programs and tactics aimed at customers and other stakeholder groups. Difficulty: 1 Easy Topic: The Marketing Plan Learning Objective: 03-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Bloom’s: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation
11) According to the BCG matrix, a business that is classified as a star has high growth and low market share.
Answer: FALSE Explanation: According to the BCG matrix, a business that is classified as a star has high growth and high market share. Stars are important to building the future of the business and deserving any needed investment. Difficulty: 2 Medium Topic: The Marketing Plan
Learning Objective: 03-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Bloom’s: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 12) According to the BCG matrix, a business that is classified as a dog has high growth and high market share.
Answer: FALSE Explanation: According to the BCG matrix, a business that is classified as a dog has low growth and low market share. Dogs are potential high cash users and prime candidates for liquidation. Difficulty: 2 Medium Topic: The Marketing Plan Learning Objective: 03-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Bloom’s: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation
13) The GE Business Screen portfolio model evaluates businesses on the dimensions of market attractiveness and business position.
Answer: TRUE Explanation: The GE Business Screen is a more realistic and complex portfolio model. It also evaluates the business on two dimensions—market attractiveness and business position, which refers to its ability to compete. Difficulty: 1 Easy
Topic: The Marketing Plan Learning Objective: 03-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Bloom’s: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 14) In the GE Business Screen model, the business position dimension looks at factors like government regulations, sensitivity to economic trends, and size of the market.
Answer: FALSE Explanation: The GE Business Screen is a more realistic and complex portfolio model. It also evaluates the business on two dimensions—market attractiveness and business position, which refers to its ability to compete. Market attractiveness looks at factors like government regulations, sensitivity to economic trends, and size of the market. Difficulty: 1 Easy Topic: The Marketing Plan Learning Objective: 03-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Bloom’s: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation
15) A mission statement does NOT include a discussion of the firm’s strategic vision.
Answer: FALSE Explanation: A mission statement identifies the scope of a company’s operations, products, and markets. Most mission statements also include a discussion of what the company would like to become in the future—its strategic vision.
Difficulty: 1 Easy Topic: The Marketing Plan Learning Objective: 03-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Bloom’s: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 16) Goals are broad statements of generally desired accomplishments in support of the firm’s mission statement.
Answer: TRUE Explanation: Goals, general statements of what the firm wishes to accomplish in support of the mission and vision, eventually become refined into specific, measurable, and (hopefully) attainable objectives for the firm. Difficulty: 1 Easy Topic: The Marketing Plan Learning Objective: 03-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Bloom’s: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation
17) Strategy has two key phases: formulation and execution.
Answer: TRUE
Explanation: Strategy has two key phases: formulation (or development) and execution. And it occurs at multiple levels in the firm: corporate level, SBU (or business) level, and functional level (marketing, finance, operations, etc.). Difficulty: 1 Easy Topic: Organizational Strategies Learning Objective: 03-03 Identify various types of organizational strategies. Bloom’s: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation
18) Companies in some business cultures based outside the United States seem to have less pressure to achieve high levels of growth.
Answer: TRUE Explanation: Sometimes for reasons related to the competitive landscape or resource constraints, the best generic strategy for a firm may not actually be growth but stability or retrenchment instead. Interestingly, the pressure to constantly achieve accelerated growth is much less intense in many business cultures outside the United States. Difficulty: 1 Easy Topic: Competing in Various Markets Learning Objective: 03-03 Identify various types of organizational strategies. Bloom’s: Remember AACSB: Diversity Accessibility: Keyboard Navigation
19) A firm’s competitive strategy leads it to decide if it can grow and if not, how to survive through stability or retrenchment.
Answer: FALSE Explanation: A firm’s generic strategy is its overall directional strategy at the business level. Fundamentally, all firms must decide whether they wish to (or are able to) grow, and if not, how they can survive through stability or retrenchment. Difficulty: 2 Medium Topic: Competing in Various Markets Learning Objective: 03-03 Identify various types of organizational strategies. Bloom’s: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation
20) Internal environmental factors are all under the firm’s control.
Answer: TRUE Explanation: Internal environmental factors include the firm’s structure and systems, culture, leadership, and various resources, all of which are under the firm’s control. Difficulty: 1 Easy Topic: The Marketing Plan Learning Objective: 03-04 Conduct a situation analysis. Bloom’s: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation
21) Market penetration strategies allow the firm to introduce new products to new customers, often including international markets.
Answer: FALSE Explanation: Market penetration strategies involve investing in existing customers to gain additional usage of existing products. Market development strategies allow for expansion of the firm’s product line into heretofore untapped markets, often internationally. Difficulty: 2 Medium Topic: Competing in Various Markets Learning Objective: 03-04 Conduct a situation analysis. Bloom’s: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation
22) Market development strategies allow a firm to invest additional resources to have existing customers consume new products.
Answer: FALSE Explanation: Market development strategies allow for expansion of the firm’s product line into heretofore untapped markets, often internationally. Product development strategies recognize the opportunity to invest in new products that will increase usage from the current customer base. Difficulty: 2 Medium Topic: Competing in Various Markets Learning Objective: 03-04 Conduct a situation analysis. Bloom’s: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation
23) When Christy developed her marketing plan for her new store, she kept in mind that conditions can change, so her plan would also change. This demonstrates the importance of staying strategic, but also staying on top of the tactical, in the tips for a successful marketing planning experience.
Answer: FALSE Explanation: This demonstrates the tip, stay flexible. Don’t forget that marketing plans are not set in stone. Difficulty: 2 Medium Topic: The Marketing Plan Learning Objective: 03-05 Use the framework provided for marketing planning, along with the content in future chapters, to build a marketing plan. Bloom’s: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation
24) Joelle bought a new Coach purse for herself as a birthday present. She had never spent that much on a purse, but decided it was worth it because it was so elegant. This demonstrates how a customer’s perception of ________ can influence buying behavior. 1. 2. 3. 4. 5.
A) exchange B) utility C) place D) competition E) value
Answer: E Explanation: Value was defined from a customer’s perspective as a ratio of the bundle of benefits a customer receives from an offering compared to the costs incurred by the customer in acquiring that bundle of benefits. Difficulty: 2 Medium Topic: The Concept of Customer Value
Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom’s: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation
25) Form utility is ________. 1. 2. 3. 4. 5.
A) marketing’s task in creating an offering that has value B) production’s task in creating an offering that is desired by the market C) the firm’s task in deciding where to distribute the product D) created when products are available to customers at a convenient location E) that which allows for transfer of the product ownership from seller to buyer
Answer: B Explanation: Form utility is created when the firm converts raw materials into finished products that are desired by the market. The other three utilities— time, place, and ownership—are created by marketing. Difficulty: 2 Medium Topic: The Concept of Customer Value Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom’s: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation
26) Although Michael knew he couldn’t really afford the Mercedes, he wanted it anyway. The wantsatisfying power of a good is called ________. 1. 2. 3.
A) exchange B) value C) necessity
4. 5.
D) strategy E) utility
Answer: E Explanation: Utility is the want-satisfying power of a good or service. Four major kinds of utility exist: form, time, place, and ownership. Difficulty: 2 Medium Topic: The Concept of Customer Value Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom’s: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation
27) Utility created when a firm converts raw materials into finished products that are desired by the market is called ________ utility. 1. 2. 3. 4. 5.
A) time B) form C) place D) ownership E) price
Answer: B Explanation: Four major kinds of utility exist: form, time, place, and ownership. Form utility is created when a firm converts raw materials into finished products that are desired by the market. Difficulty: 1 Easy Topic: The Concept of Customer Value Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom’s: Remember AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
28) Which of the following is TRUE of utility? 1. 2.
A) The three utilities—form, price, and ownership—are created by marketing. B) Utility is defined as a ratio of benefits to costs, as viewed from the eyes of the beholder. 3. C) Form utility is created when products are available to customers at a convenient location. 4. D) The four major kinds of utility are form, time, place, and ownership. 5. E) Place utility is created when the firm converts raw materials into finished products that are desired by the market.
Answer: D Explanation: Utility is the want-satisfying power of a good or service. Four major kinds of utility exist: form, time, place, and ownership. Form utility is created when the firm converts raw materials into finished products that are desired by the market. The other three utilities— time, place, and ownership—are created by marketing. Difficulty: 2 Medium Topic: The Concept of Customer Value Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom’s: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation
29) The concept of the value chain was created by ________. 1. 2. 3. 4. 5.
A) Fred Wiserma B) Michael Porter C) Jim Collins D) Peter Drucker E) David Hunger
Answer: B Explanation: Created by Michael Porter in his classic book Competitive Advantage, the value chain serves as a means for firms to identify ways to create, communicate, and deliver more customer value within a firm. Difficulty: 1 Easy Topic: The Concept of Customer Value Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom’s: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation
30) Which of the following is NOT one of the five primary activities in the value chain? 1. A) inbound logistics 2. B) operations 3. C) technology procurement 4. D) outbound logistics 5. E) marketing and sales
Answer: C Explanation: The five primary activities in the value chain are inbound logistics, operations, outbound logistics, marketing and sales, and service. Difficulty: 1 Easy Topic: The Concept of Customer Value Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom’s: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation
31) A window manufacturer has trouble getting glass for its high-end windows. Of the five primary activities in the value chain, this problem is most likely to occur in ________. 1. A) inbound logistics 2. B) operations 3. C) outbound logistics 4. D) marketing and sales 5. E) service
Answer: A Explanation: Porter’s nine value-creating activities include five primary activities and four support activities. Of the five primary activities in the value chain, inbound logistics deals with how the firm goes about sourcing raw materials for production. Difficulty: 2 Medium Topic: The Concept of Customer Value Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom’s: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation
32) Sean attributes the success of his video game arcade to advertising on the most popular website for gamers. Recently, the website raised ad prices, so Sean has cut his advertising in half. He believes that positive word-of-mouth will be enough now that his game is well established. However, sales are slipping. Of the five primary activities in the value chain, this problem is most likely to occur in ________. 1. A) inbound logistics 2. B) operations 3. C) outbound logistics 4. D) marketing and sales 5. E) service
Answer: D Explanation: Porter’s nine value-creating activities include five primary activities and four support activities. Of the five primary activities in the value chain, marketing and sales deal with how the firm communicates the value proposition to the marketplace.
Difficulty: 3 Hard Topic: The Concept of Customer Value Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom’s: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation
33) Dave is a close-up magician who is famous for his card tricks. He creates and sells DVDs of his magic tricks. Lately he has been having some trouble getting the DVDs produced in a timely manner. Of the five primary activities in the value chain, this problem is most likely to occur in ________. 1. A) inbound logistics 2. B) operations 3. C) outbound logistics 4. D) marketing and sales 5. E) service
Answer: B Explanation: Porter’s nine value-creating activities include five primary activities and four support activities. Of the five primary activities in the value chain, operations deal with how the firm converts the raw materials into final products. Difficulty: 3 Hard Topic: The Concept of Customer Value Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom’s: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation
34) Mark and Gregory are partners in a manufacturing firm that employs over 1,500 people. Recently, employees have been complaining that they were not told of changes in health insurance coverage and premiums. To which of the following support activities of the value chain can this problem be attributed? 1. A) firm infrastructure 2. B) human resource management 3. C) technology development 4. D) inbound logistics 5. E) procurement
Answer: B Explanation: Porter’s nine value-creating activities include five primary activities and four support activities. Of the four support activities in the value chain, human resource management deals with how the firm ensures it has the right people in place, trains them, and keeps them. Difficulty: 3 Hard Topic: The Concept of Customer Value Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom’s: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 35) Mammoth Foods, a major agricultural corporation, recently purchased MJS Organic Foods Co. MJS was established six years ago and has become a major supplier to restaurants in the northeastern United States. The organic herbs, vegetables, and fruit market is expected to have a double-digit growth rate over the next decade. Under the Boston Consulting Group (BCG) GrowthShare Matrix, MJS would most likely be classified as a ________. 1. 2. 3. 4. 5.
A) star B) cash cow C) dog D) problem child E) top gun
Answer: A Explanation: Under the Boston Consulting Group Growth-Share Matrix, stars are characterized by high share and high growth and are important to building the future of the business and deserving any needed investment. Difficulty: 3 Hard
Topic: The Marketing Plan Learning Objective: 03-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Bloom’s: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation
36) In the BCG matrix, ________ are characterized by high share and low growth and are the key sources of internal cash generation for a firm. 1. 2. 3. 4. 5.
A) stars B) cash cows C) dogs D) problem children E) top guns
Answer: B Explanation: The concept of the BCG approach to portfolio analysis is to position each SBU within a firm on the two-dimensional matrix. In the BCG matrix, cash cows are characterized by high share and low growth and are the key sources of internal cash generation for a firm. Difficulty: 2 Medium Topic: The Marketing Plan Learning Objective: 03-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Bloom’s: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation
37) In the BCG matrix, firms categorized as problem children are characterized by ________.
1. 2. 3. 4. 5.
A) high share and high growth B) low share and low growth C) high share and low growth D) low share and high growth E) moderate share and moderate growth
Answer: D Explanation: In the BCG matrix, firms categorized as problem children, or question marks, are characterized by low share and high growth. They are the high cash needs that, if properly nurtured, can convert into stars. Difficulty: 2 Medium Topic: The Marketing Plan Learning Objective: 03-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Bloom’s: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation
38) Lately the demand for building materials has dropped due to the slowdown in new housing construction. Woods Corp. is thinking of closing its fine wood division that produces mahogany and cherry lumber for building cabinets and other applications. Under the Boston Consulting Group Growth-Share Matrix, the fine wood division would most likely be classified as a ________. 1. 2. 3. 4. 5.
A) star B) cash cow C) dog D) problem child E) top gun
Answer: C Explanation: Under the Boston Consulting Group Growth-Share Matrix, dogs are characterized by low share and low growth. They are potential high cash users and prime candidates for liquidation. Difficulty: 3 Hard
Topic: The Marketing Plan Learning Objective: 03-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Bloom’s: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 39) Hot and Cold Corp. makes disposable coffee and soft drink cups for use in fast-food restaurants, hospitals, convenience stores, and the like. The company is working on a sturdy new product that will biodegrade within five years of being put in a landfill. According to the BCG matrix, this promising new product line would most likely be classified as a ________. 1. 2. 3. 4. 5.
A) star B) cash cow C) dog D) problem child E) question mark
Answer: A Explanation: Under the Boston Consulting Group Growth-Share Matrix, stars are characterized by high share and high growth and are important to building the future of the business and deserving any needed investment. Difficulty: 3 Hard Topic: The Marketing Plan Learning Objective: 03-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Bloom’s: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 40) Green Scene Co., a struggling start-up firm that needs a huge cash injection, has an environmentally friendly pesticide that is approved for use by commercial organic farmers. The pesticide is made from all-natural ingredients and has great potential. A small investment firm has injected cash in Green Scene. In the context of the BCG matrix, Green Scene is most likely considered a ________.
1. 2. 3. 4. 5.
A) star B) cash cow C) dog D) question mark E) top gun
Answer: D Explanation: Under the Boston Consulting Group Growth-Share Matrix, problem children or question marks are characterized by low share and high growth. They are high cash needs that, if properly nurtured, can convert into stars. Difficulty: 3 Hard Topic: The Marketing Plan Learning Objective: 03-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Bloom’s: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 41) Mega-Big Corp. has a small strategic business unit (SBU) that produces a component vital to the manufacturers of automobiles and has been extremely profitable for 18 years. The SBU acts as a key source of income for the firm. In the context of the BCG matrix, Mega-Big Corp. is most likely considered a ________. 1. 2. 3. 4. 5.
A) question mark B) cash cow C) dog D) problem child E) top gun
Answer: B Explanation: Under the Boston Consulting Group Growth-Share Matrix, cash cows are characterized by high share and low growth and are key sources of internal cash generation for the firm. Difficulty: 3 Hard Topic: The Marketing Plan
Learning Objective: 03-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Bloom’s: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 42) Mega-Big Corp. is interested in buying Soft works, a medical software firm. Soft works is highly regarded by medical practices for ease of use, but hasn’t sold well. Two software engineers started the company, but they have made risky financial and poor management decisions. Mega Corp. believes that with proper management the software firm will become an industry leader. In the context of the BCG matrix, Soft works is most likely considered a ________. 1. 2. 3. 4. 5.
A) star B) cash cow C) dog D) problem child E) top gun
Answer: D Explanation: Under the Boston Consulting Group Growth-Share Matrix, problem children or question marks are characterized by low share and high growth. They are high cash needs that, if properly nurtured, can convert into stars. Difficulty: 3 Hard Topic: The Marketing Plan Learning Objective: 03-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Bloom’s: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 43) Which of the following is NOT included in the business position factors of the GE Business Screen? 1. 2. 3.
A) organization B) growth C) patents
4. 5.
D) governmental regulations E) marketing
Answer: D Explanation: The GE Business Screen evaluates the business on two dimensions—market attractiveness and business position, which refers to its ability to compete. Factors of business position include organization, growth, market share by segment, customer loyalty, margins, distribution, technology skills, patents, marketing, and flexibility, among others. Difficulty: 1 Easy Topic: The Marketing Plan Learning Objective: 03-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Bloom’s: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 44) A ________ articulates an organization’s reason for existence and defines the unique purpose that sets it apart from competitors and identifies the scope of the company’s operations, products, and markets. 1. 2. 3. 4. 5.
A) mission statement B) functional-level plan C) value chain D) marketing strategy E) value proposition
Answer: A Explanation: A mission statement articulates an organization’s purpose, or reason for existence. A well-conceived mission statement defines the fundamental, unique purpose that sets a company apart from other firms of its type and identifies the scope of a company’s operations, products, and markets. Difficulty: 1 Easy Topic: The Marketing Plan
Learning Objective: 03-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Bloom’s: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation
45) Which of the following is considered an objective? 1. 2. 3. 4. 5.
A) to deliver the best customer service B) to practice responsible financial management C) to increase revenue by 15 to 20 percent in each of the next five years D) to hire the best people E) to minimize waste
Answer: C Explanation: Goals, general statements of what the firm wishes to accomplish in support of the mission and vision, eventually become refined into specific, measurable, and (hopefully) attainable objectives for the firm. Difficulty: 2 Medium Topic: The Marketing Plan Learning Objective: 03-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Bloom’s: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation
46) Which of the following is most likely to be considered a goal rather than an objective? 1. 2.
A) to improve customer satisfaction ratings to 95 percent B) to increase ROI by 20 percent
3. 4.
C) to be the leader in one’s field D) to reduce the cost of scrap material to less than one percent of total manufacturing cost 5. E) to get five new distributors
Answer: C Explanation: Goals, general statements of what the firm wishes to accomplish in support of the mission and vision, eventually become refined into specific, measurable, and (hopefully) attainable objectives for the firm. Difficulty: 2 Medium Topic: The Marketing Plan Learning Objective: 03-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Bloom’s: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation
47) Growth, stability, and retrenchment refer to a firm’s position relating to its ________ strategy. 1. 2. 3. 4. 5.
A) specific B) generic C) future D) diversification E) differentiation
Answer: B Explanation: A firm’s generic strategy is its overall directional strategy at the business level. Fundamentally, all firms must decide whether they wish to (or are able to) grow, and if not, how they can survive through stability or retrenchment. Difficulty: 1 Easy Topic: Organizational Strategies Learning Objective: 03-03 Identify various types of organizational strategies.
Bloom’s: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation
48) The Hernandez brothers manufacture trailers that are used by lawn service companies. The company was started in Texas by their father with one production site and four sales and service locations. Since the sons took over, they have expanded in the last 12 years to include 26 sales and service centers throughout the southeast. In this case, the company is most likely using a generic business strategy based on ________. 1. A) retrenchment 2. B) stability 3. C) product differentiation 4. D) diversification 5. E) growth
Answer: E Explanation: A firm’s generic strategy is its overall directional strategy at the business level. Fundamentally, all firms must decide whether they wish to (or are able to) grow, and if not, how they can survive through stability or retrenchment. Growth may be in the form of sales, market share, assets, profits, or some combination of these and other factors. Difficulty: 3 Hard Topic: Organizational Strategies Learning Objective: 03-03 Identify various types of organizational strategies. Bloom’s: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 49) Go Fish Sushi restaurants are primarily located in malls. The restaurants had rapid growth in their first seven years. The owner realizes that adding more restaurants would make it impossible to monitor operations. Therefore, he decides to continue current activities without making major changes. In this case, the owner is most likely pursuing a generic strategy of ________. 1. 2. 3.
A) retrenchment B) stability C) diversification
4. 5.
D) growth E) differentiation
Answer: B Explanation: A firm’s generic strategy is its overall directional strategy at the business level. Fundamentally, all firms must decide whether they wish to (or are able to) grow, and if not, how they can survive through stability or retrenchment. The strategy to continue current activities with little significant change in direction may be appropriate for a successful organization operating in a reasonably predictable environment. It can be useful in the short term but potentially dangerous in the long term, especially if the competitive landscape changes. Difficulty: 3 Hard Topic: Organizational Strategies Learning Objective: 03-03 Identify various types of organizational strategies. Bloom’s: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 50) Zenith Homebuilders used to purchase many building lots and erect spec homes (i.e., it gambled that the demand for new houses would be so high that they would sell easily). Since the real estate slowdown, it builds homes only when owners are under contract. In this case, the company is most likely pursuing a generic business strategy of ________. 1. 2. 3. 4. 5.
A) retrenchment B) stability C) diversification D) growth E) differentiation
Answer: A Explanation: An organization in a weak competitive position in some or all of its product lines, resulting in poor performance and pressure on management to quickly improve, may pursue retrenchment. Essentially, retrenchment involves pulling assets out of underperforming parts of the business and reinvesting in aspects of the business with greater future performance potential. Difficulty: 3 Hard Topic: Organizational Strategies Learning Objective: 03-03 Identify various types of organizational strategies.
Bloom’s: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation
51) The activities a firm does better than its competitors are known as ________. 1. 2. 3. 4. 5.
A) core competencies B) strategic alignment C) distinctive competencies D) growth indicators E) competitive indicators
Answer: C Explanation: Core competencies are the activities the firm can do exceedingly well. When these core competencies are superior to those of competitors, they are called distinctive competencies. Difficulty: 2 Medium Topic: Competing in Various Markets Learning Objective: 03-03 Identify various types of organizational strategies. Bloom’s: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation
52) Which of the following is NOT one of the four strategic types of firms proposed by Miles and Snow? 1. 2. 3. 4. 5.
A) prospectors B) analyzers C) defenders D) reactors E) compromisers
Answer: E
Explanation: Miles and Snow propose several categories of firms within any given industry based on strategic type. Four strategic types are prospectors, analyzers, defenders, and reactors—depending on a firm’s approach to the competitive marketplace. Difficulty: 1 Easy Topic: Organizational Strategies Learning Objective: 03-03 Identify various types of organizational strategies. Bloom’s: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation
53) Today many retailers create apps that customers can download to their smartphones or tablets to be up-to-date on the company’s offerings. In the context of situation analysis, which of the following macro-level external environmental factors does this exemplify? 1. 2. 3. 4. 5.
A) Economic factors B) Natural factors C) Technological factors D) Political, legal, ethical factors E) Sociocultural/demographic factors
Answer: C Explanation: Constantly emerging and evolving technologies impact business in many ways. The goal is to try to understand the future impact of technological change so a firm’s products will continue to be fresh and viable. Difficulty: 2 Medium Topic: The Marketing Plan Learning Objective: 03-04 Conduct a situation analysis. Bloom’s: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation
54) According to the 2010 U.S. Census, Asian Americans are a high-income, fast-growing racial group in America. In the context of situation analysis, under which of the following macro-level external environmental factors will this be included? 1. 2. 3. 4. 5.
A) natural factors B) legal and ethical issues C) technological advancements D) sociocultural/demographic factors E) firm structure and systems
Answer: D Explanation: Trends among consumers and in society as a whole impact marketing planning greatly. Many such trends are demographic in nature, including changing generational preferences and the rising buying power of minority groups domestically and consumers in developing nations in the global marketplace. JetBlue jumped on the video game trend among children and teens by providing in-seat games, much to the delight of parents who no longer have to entertain the kids for the duration of the flight. Difficulty: 2 Medium Topic: The Marketing Plan Learning Objective: 03-04 Conduct a situation analysis. Bloom’s: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 55) Automobile manufacturers must comply with regulations set by the National Transportation and Safety Board. In the context of situation analysis, which of the following macro-level external environmental factors does this exemplify? 1. 2. 3. 4. 5.
A) sociocultural/demographic B) firm structure and systems C) political, legal, and ethical D) firm resources E) threat of new entrants
Answer: C Explanation: In the context of situation analysis, major categories for analysis within the external environment include political, legal, and ethical factors. All firms operate within certain rules, laws, and norms of operating behavior. For example, JetBlue has myriad regulations administered by the
Federal Aviation Administration, the National Transportation Safety Board, and the Transportation Security Administration. Difficulty: 2 Medium Topic: The Marketing Plan Learning Objective: 03-04 Conduct a situation analysis. Bloom’s: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation
Marketing Management, 3e (Marshall) Chapter 5 CRM, Big Data, and Marketing Analytics 1) Positioning customer relationship management (CRM) as a comprehensive business model provides the impetus for top management to properly support it over the long run.
Answer: TRUE Explanation: Positioning CRM as a comprehensive business model provides the impetus for top management to properly support it over the long run and for various internal stakeholder groups to have the opportunity to both use it and impact how it is used. Difficulty: 1 Easy Topic: The CRM Process Cycle Learning Objective: 05-01 Define CRM and articulate its objectives and capabilities. Bloom’s: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation
2) It is possible today to calculate the total financial returns for each customer.
Answer: TRUE Explanation: It is possible to actually calculate an estimate of the projected financial returns from a customer, or return on customer investment (ROCI), over the long run. Difficulty: 2 Medium Topic: The CRM Process Cycle Learning Objective: 05-01 Define CRM and articulate its objectives and capabilities. Bloom’s: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation
3) Customer satisfaction and customer loyalty, two metrics used by brand managers, are metrics used in customer relationship management.
Answer: TRUE Explanation: Customer satisfaction and loyalty are two extremely popular metrics used by marketing managers to gauge the health of their business and brands. Difficulty: 1 Easy Topic: The CRM Process Cycle Learning Objective: 05-01 Define CRM and articulate its objectives and capabilities. Bloom’s: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation
4) One major objective of CRM is customer replacement.
Answer: FALSE Explanation: The three major objectives of CRM are customer acquisition, customer retention, and customer profitability. Difficulty: 1 Easy Topic: The CRM Process Cycle Learning Objective: 05-01 Define CRM and articulate its objectives and capabilities. Bloom’s: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation
5) Marketing planning is the first phase of the customer relationship management (CRM) process cycle.
Answer: FALSE Explanation: Knowledge discovery is the first phase of the customer relationship management (CRM) process cycle. Difficulty: 1 Easy Topic: The CRM Process Cycle Learning Objective: 05-02 Describe the CRM process cycle. Bloom’s: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation
6) Data mining helps in segmenting customers in order to target key markets.
Answer: TRUE Explanation: Data mining is a sophisticated analytical approach to using the massive amounts of data accumulated through the CRM system to develop segments and micro-segments of customers for purposes of either market research or development of market segmentation and target marketing strategies. Difficulty: 2 Medium Topic: The CRM Process Cycle Learning Objective: 05-02 Describe the CRM process cycle. Bloom’s: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation
7) When a salesperson calls on a prospect and meets face to face, it is an example of an interactive touchpoint.
Answer: TRUE Explanation: Some touchpoints are interactive and allow for such two-way information exchange. That is, they involve direct interface between a customer and a firm’s customer contact person in the form of a salesperson, telemarketer, customer service representative, interactive website, and so on. Difficulty: 2 Medium Topic: Consumer Touchpoints in CRM Learning Objective: 05-03 Understand the concept of customer touchpoints and why touchpoints are critical in CRM. Bloom’s: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation
8) When a customer willingly gives a company sensitive information, such as a social security number, the company is not responsible for the security of this information.
Answer: FALSE Explanation: In many industries, firms having access to sensitive customer information, such as social security numbers, necessitates more heavy regulation of information usage (financial services is a good example). In such cases, firms may be required to communicate the different ways that customers’ personal information may be used and which of those potential uses a customer can opt out of. In addition, marketing managers must consider regulatory requirements, which may impose constraints such as what information can be conveyed to the firm within a given marketing campaign or at any touchpoint. For any firm that collects large amounts of data through CRM, customers’ perceptions of the organization’s ability to securely handle and protect information can substantially influence trust. Difficulty: 2 Medium Topic: The Marketing Dashboard Learning Objective: 05-03 Understand the concept of customer touchpoints and why touchpoints are critical in CRM. Bloom’s: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation
9) Increasing formalization of customer analysis processes is a component of a customer-centric culture.
Answer: TRUE Explanation: The effort a firm makes toward cultivating a customer-centric culture requires a high degree of formalization within the firm Difficulty: 2 Medium Topic: The Marketing Dashboard
Learning Objective: 05-03 Understand the concept of customer touchpoints and why touchpoints are critical in CRM. Bloom’s: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation
10) The four Vs of Big Data are volume, velocity, variety, and visibility.
Answer: FALSE Explanation: Four characteristics generally characterize Big Data; taken together, these characteristics are commonly referred to as the four Vs of Big Data: volume, velocity, variety, and veracity. Difficulty: 1 Easy Topic: The Marketing Dashboard Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom’s: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation
11) Data in a spreadsheet is considered unstructured data.
Answer: FALSE Explanation: Structured data is typically either numeric or text that is substantially limited to a certain set of input values. This is the type of data that is generally found in relational databases or spreadsheets such as Microsoft Excel or Google Sheets; it is generally organized into tables with columns that make it clear what types of information will be included in each of the entries within a given column.
Difficulty: 2 Medium Topic: The Marketing Dashboard Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom’s: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation
12) A POS system is in use when you go to a grocery store and your transaction is collected at the cash register so companies can analyze your purchase behavior.
Answer: TRUE Explanation: The collection of transaction data from customers through point-of-sales (POS) systems in retail locations, as well as online transaction processing systems, can be tied to other rich information about a customer and used to determine that customer’s relative value. Difficulty: 2 Medium Topic: The Marketing Dashboard Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom’s: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation
13) Cross-promotional opportunities are a benefit of collecting data from mobile apps.
Answer: TRUE
Explanation: Data generated from a customer’s use of different mobile applications (apps) can provide insight into cross-promotional opportunities, in addition to other benefits. Difficulty: 1 Easy Topic: The Marketing Dashboard Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom’s: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation
14) Marketing analytics is a new concept brought about by the increased use of mobile phones.
Answer: FALSE Explanation: Marketing analytics is not technically a new concept, but with the explosion of data available to marketing managers, organizations have become increasingly interested in finding new ways to extract maximum value from the data that they continue to accumulate. Difficulty: 1 Easy Topic: Database Marketing Learning Objective: 05-05 Recognize key approaches to marketing analytics. Bloom’s: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation
15) When the online shore store Zappos collects information on the average dollar amount a customer spends in a single transaction, it is using descriptive analytics.
Answer: TRUE Explanation: An approach using descriptive analytics utilizes data to provide summary insights. Customers who are members of a company’s loyalty program, such as that of the online shoe and clothing shop Zappos, constitute a rich data source for use in descriptive analytics. Difficulty: 2 Medium Topic: Database Marketing Learning Objective: 05-05 Recognize key approaches to marketing analytics. Bloom’s: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation
16) Of the four marketing analytics approaches, diagnostic analytics is the most complex.
Answer: FALSE Explanation: Prescriptive analytics is the most complex, followed by predictive analytics, diagnostic analytics, and descriptive analytics. Difficulty: 1 Easy Topic: Database Marketing Learning Objective: 05-05 Recognize key approaches to marketing analytics. Bloom’s: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation
17) Jeremiah wants to find out if the new advertising campaign is positively impacting sales. He is likely to use diagnostic analytics.
Answer: TRUE Explanation: Diagnostic analytics provide insights into the relationships of different factors with the implication being that an understanding of their relationships can have value for future marketing decisions. In this case, Jeremiah want to find out the relationship between advertising and sales. Difficulty: 2 Medium Topic: Database Marketing Learning Objective: 05-05 Recognize key approaches to marketing analytics. Bloom’s: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation
18) Big Data can be leveraged to optimize the marketing mix.
Answer: TRUE Explanation: Optimizing the marketing mix is largely dependent on the ability to understand the different effects that the mix elements have on different marketing outcomes. Big Data has enhanced this capability by providing customer-level data in quantities that were not available in the past from sources that provide insights into specific aspects of a customer’s experience with a product or service that heretofore were not easily measured. Difficulty: 1 Easy Topic: Database Marketing Learning Objective: 05-05 Recognize key approaches to marketing analytics. Bloom’s: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation
19) It has been demonstrated for some products that exposure to television advertisements influences the number of brand-specific keyword searches conducted online by customers. In this instance, the conclusion drawn is based on attribution.
Answer: TRUE Explanation: Attribution is determining how to give appropriate credit to different elements of the marketing mix through the measurement of their effects. As long as the organization has access to the required data on marketing mix elements, marketing analytics should be able to help disentangle the various effects that both individual elements of the marketing mix and specific combinations of those elements have on marketing outcomes. Difficulty: 2 Medium Topic: Database Marketing Learning Objective: 05-05 Recognize key approaches to marketing analytics. Bloom’s: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 20) About the only thing you know for certain about your first version of a marketing dashboard is that it will likely look the same in a year or two.
Answer: FALSE Explanation: About the only thing you know for certain about your first version of a marketing dashboard is that it will likely look very different in a year or two. Difficulty: 1 Easy Topic: The Marketing Dashboard Learning Objective: 05-06 Understand the concept of a marketing dashboard and how it improves marketing planning for a firm. Bloom’s: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation
21) One potential pitfall of using a dashboard approach to marketing metrics is not insuring that senior management believe in and understand the dashboard.
Answer: TRUE Explanation: You want the percentage of senior executives who both believe in and understand what the dashboard is presenting to be very high. Difficulty: 1 Easy Topic: The Marketing Dashboard Learning Objective: 05-06 Understand the concept of a marketing dashboard and how it improves marketing planning for a firm. Bloom’s: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation
22) Return on marketing investment (ROMI) looks at marketing as an investment, not an expense.
Answer: FALSE Explanation: ROMI looks at marketing as an expense tied to a percentage of historical or forecasted sales. Difficulty: 1 Easy Topic: Marketing Return on Investment Learning Objective: 05-07 Explain return on marketing investment (ROMI), including cautions about its use. Bloom’s: Remember
AACSB: Analytical Thinking Accessibility: Keyboard Navigation 23) The expectation is that ROMI and other metrics of marketing performance will begin to decrease in use, as firms attempt to better quantify marketing’s contribution to various dimensions of organizational success.
Answer: FALSE Explanation: In spite of its potential problems, the expectation is that ROMI and other metrics of marketing performance will continue to proliferate, as firms home in on attempting to better quantify marketing’s contribution to various dimensions of organizational success. Difficulty: 2 Medium Topic: Marketing Return on Investment Learning Objective: 05-07 Explain return on marketing investment (ROMI), including cautions about its use. Bloom’s: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation
24) Customer relationship management (CRM) is considered critical largely because of ________. 1. 2. 3. 4. 5.
A) internal pressure by employees B) external pressure by suppliers and vendors C) competitive pressures in the marketplace D) increasing demand by customers E) revised government regulations
Answer: C Explanation: Customer relationship management (CRM) is considered mission-critical largely because of competitive pressures in the marketplace; nobody can afford to be the lone wolf that does not have a handle on the customer side of an enterprise in a competitive space.
Difficulty: 1 Easy Topic: The CRM Process Cycle Learning Objective: 05-01 Define CRM and articulate its objectives and capabilities. Bloom’s: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 25) What is one of the three major objectives of customer relationship management? 1. 2. 3. 4. 5.
A) customer satisfaction B) customer service C) customer loyalty D) customer engagement E) customer acquisition
Answer: E Explanation: Customer relationship management has three major objectives: customer acquisition, customer retention, and customer profitability. Difficulty: 1 Easy Topic: The CRM Process Cycle Learning Objective: 05-01 Define CRM and articulate its objectives and capabilities. Bloom’s: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation
26) Customer loyalty is defined as ________. 1.
A) retention of satisfied and loyal profitable customers and channels
2.
B) the degree to which an individual will resist switching from one offering to another 3. C) the total number of customers who purchase a product 4. D) increased individual customer margins, while offering the right products at the right time 5. E) the likelihood that a customer becomes a buzz marketer
Answer: B Explanation: Customer loyalty means the degree to which an individual will resist switching, or defecting, from one offering to another. Difficulty: 2 Medium Topic: The CRM Process Cycle Learning Objective: 05-01 Define CRM and articulate its objectives and capabilities. Bloom’s: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 27) Customer satisfaction is defined as ________. 1. 2. 3. 4. 5.
A) the degree to which an individual will resist switching from one offering to another B) the level at which the offering meets or exceeds a customer’s expectations C) retaining satisfied and loyal profitable customers and channels D) increasing the likelihood that a customer becomes a buzz marketer E) the number of purchases in a defined period of time
Answer: B Explanation: Customer satisfaction means the level of liking an individual has for an offering—that is, to what level is the offering meeting or exceeding the customer’s expectations? Difficulty: 1 Easy Topic: The CRM Process Cycle Learning Objective: 05-01 Define CRM and articulate its objectives and capabilities. Bloom’s: Remember AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
28) Which of the following major objectives of customer relationship management relates to increased individual customer margins, while offering the right products at the right time? 1. 2. 3. 4. 5.
A) customer retention B) customer service C) customer acquisition D) customer profitability E) customer loyalty
Answer: D Explanation: Customer profitability relates to increased individual customer margins, while offering the right products at the right time. Difficulty: 2 Medium Topic: The CRM Process Cycle Learning Objective: 05-01 Define CRM and articulate its objectives and capabilities. Bloom’s: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 29) What is one of the four elements of the process cycle for customer relationship management? 1. 2. 3. 4. 5.
A) customer interaction B) customer loyalty C) customer satisfaction D) customer support E) customer profitability
Answer: A Explanation: The process cycle for CRM may be divided into the following four elements: (1) knowledge discovery, (2) marketing planning, (3) customer interaction, and (4) analysis and refinement.
Difficulty: 1 Easy Topic: The CRM Process Cycle Learning Objective: 05-02 Describe the CRM process cycle. Bloom’s: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation
30) Customer touch points and data mining are related to which element of the process cycle for customer relationship management? 1. 2. 3. 4. 5.
A) analysis and refinement B) supplier interface C) customer interaction D) knowledge discovery E) marketing planning
Answer: D Explanation: Customer touch points and data mining are related to the element of knowledge discovery. Difficulty: 1 Easy Topic: Consumer Touchpoints in CRM Learning Objective: 05-02 Describe the CRM process cycle. Bloom’s: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 31) In the CRM process cycle, ________ is the process of analyzing the customer information acquired through various customer touchpoints.
1. 2. 3. 4. 5.
A) analysis and refinement B) supplier interface C) customer interaction D) marketing planning E) knowledge discovery
Answer: E Explanation: Knowledge discovery is the process of analyzing the customer information acquired through various customer touch points. Difficulty: 2 Medium Topic: Consumer Touchpoints in CRM Learning Objective: 05-02 Describe the CRM process cycle. Bloom’s: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation
32) Which phase of the process cycle for customer relationship management represents the actual implementation of the customer strategies and programs? 1. 2. 3. 4. 5.
A) analysis and refinement B) supplier interface C) customer interaction D) knowledge discovery E) marketing planning
Answer: C Explanation: The customer interaction phase represents the actual implementation of the customer strategies and programs. This includes the personal selling effort, as well as all other customerdirected interactions. Difficulty: 2 Medium Topic: The CRM Process Cycle
Learning Objective: 05-02 Describe the CRM process cycle. Bloom’s: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 33) The ________ phase of the customer relationship management process is where organizational learning occurs based on customer response to the implemented strategies and programs. 1. 2. 3. 4. 5.
A) analysis and refinement B) supplier interface C) marketing planning D) knowledge discovery E) customer interaction
Answer: A Explanation: The analysis and refinement phase of the CRM process is where organizational learning occurs based on customer response to the implemented strategies and programs. Difficulty: 2 Medium Topic: The CRM Process Cycle Learning Objective: 05-02 Describe the CRM process cycle. Bloom’s: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation
34) The Juice and Java company uses information from customers who write on its Twitter feed about its products. This is an example of a(n) ________ touchpoint. 1. 2. 3. 4. 5.
A) interactive B) direct interface C) noninteractive D) personal E) nonpersonal
Answer: C Explanation: Noninteractive touchpoints are those in which the customer may simply provide information on a static website’s data entry form or by mail, without the capability of simultaneous direct interface with a company representative. Difficulty: 2 Medium Topic: Consumer Touchpoints in CRM Learning Objective: 05-03 Understand the concept of customer touchpoints and why touchpoints are critical in CRM. Bloom’s: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation 35) To maximize the use of touchpoints, a firm needs to do all of the following EXCEPT________. 1. 2. 3. 4. 5.
A) identify all potential touchpoints B) inform customers that you will be using their information C) develop objectives for what to collect at each touchpoint D) determine how information will be collected E) develop policies on how the information will be accessed and used
Answer: B Explanation: To maximize a firm’s ability to successfully use touchpoints, an ongoing concerted effort must be undertaken to (1) identify all potential touchpoints, (2) develop specific objectives for what kind of information can be collected at each touchpoint, (3) determine how that information will be collected and ultimately integrated into the firm’s overall customer database, and (4) develop policies on how the information will be accessed and used. Difficulty: 1 Easy Topic: Consumer Touchpoints in CRM Learning Objective: 05-03 Understand the concept of customer touchpoints and why touchpoints are critical in CRM. Bloom’s: Remember AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
36) Ichiro is a marketing manager at a consumer products company. Ichiro’s company has started selling consumer information to other sources without informing its customers that it is doing so. This is referred to as the ________ of CRM. 1. 2. 3. 4. 5.
A) added benefit B) dark side C) unintended consequence D) evolution E) legal loophole
Answer: B Explanation: Customers must be absolutely certain that the information a firm collects and stores about them will not be used for unintended purposes. Often referred to as the “dark side of CRM,” this issue has become so prominent in some industries that firms are beginning to publicly promote guarantees of nonabuse of stored customer information as a means of attracting customers. Difficulty: 2 Medium Topic: Consumer Touchpoints in CRM Learning Objective: 05-03 Understand the concept of customer touchpoints and why touchpoints are critical in CRM. Bloom’s: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation
37) When Target had a data breach that resulted in the loss of the personal information of 40 million customers, it ________. 1. 2. 3. 4. 5.
A) postponed a campaign focused on Target’s corporate citizenship B) refunded purchases to customers made during a two-week period C) sent all customers a gift card to Target stores D) hid the information from its customers E) fired the employee who caused the data breach.
Answer: A Explanation: Target’s marketing managers had to determine how best to rebuild trust after a massive data breach that resulted in the loss of the personal information of about 40 million customers. This also meant quickly altering already planned marketing communication, including postponing a major campaign focused on Target’s corporate citizenship. Difficulty: 1 Easy Topic: Consumer Touchpoints in CRM Learning Objective: 05-03 Understand the concept of customer touchpoints and why touchpoints are critical in CRM. Bloom’s: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation
38) Redefining the selling role within the firm to focus on customer business consultation and solutions is one way that CRM ________. 1. 2. 3. 4. 5.
A) increases profits for the firm B) keeps its costs down C) increases the formalization of customer analysis processes D) maintains customer loyalty E) facilitates a customer-centric culture
Answer: E Explanation: At the strategic marketing level, a customer-centric culture includes redefining the selling role within the firm to focus on customer business consultation and solutions. Difficulty: 2 Medium Topic: Consumer Touchpoints in CRM Learning Objective: 05-03 Understand the concept of customer touchpoints and why touchpoints are critical in CRM. Bloom’s: Understand AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
39) ________ means that structure, processes and tools, and managerial knowledge and commitment are formally established in support of the culture. 1. 2. 3. 4. 5.
A) Reliability B) Formalization C) Trust D) Interactivity E) Accommodation
Answer: B Explanation: Formalization means that structure, processes and tools, and managerial knowledge and commitment are formally established in support of the culture. With these elements in place, strategies and programs can be successfully developed and executed toward the goals related to customers, accompanied by a high degree of confidence they will yield the desired results. Difficulty: 2 Medium Topic: Consumer Touchpoints in CRM Learning Objective: 05-03 Understand the concept of customer touchpoints and why touchpoints are critical in CRM. Bloom’s: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation
40) When Lucifer joined his company as CEO, he instituted an organization-wide focus on understanding the requirements of customers, making sure that everyone in the organization understood the customer marketplace. Lucifer was practicing ________. 1. 2. 3. 4. 5.
A) a customer orientation B) an organizational reorganization C) a product reflow D) a human resources policy E) a culture modification
Answer: A Explanation: Organizations practicing a customer orientation place the customer at the core of all aspects of the enterprise and: (1) Instill an organization-wide focus on understanding the requirements of customers. (2) Generate an understanding of the customer marketplace and disseminate that knowledge to everyone in the firm. (3) Align system capabilities internally so that the organization responds effectively to customers with innovative, competitively differentiated, satisfaction-generating products and services. Difficulty: 2 Medium Topic: Consumer Touchpoints in CRM Learning Objective: 05-03 Understand the concept of customer touchpoints and why touchpoints are critical in CRM. Bloom’s: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 41) A(n) ________ is a person’s belief that understanding and satisfying customers, whether internal or external to the organization, is central to the proper execution of his or her job. 1. 2. 3. 4. 5.
A) personal values system B) organizational buy-in C) consumer practice D) work philosophy E) customer mind-set
Answer: E Explanation: A customer mind-set, which is a person’s belief that understanding and satisfying customers, whether internal or external to the organization, is central to the proper execution of his or her job. Difficulty: 1 Easy Topic: Consumer Touchpoints in CRM Learning Objective: 05-03 Understand the concept of customer touchpoints and why touchpoints are critical in CRM. Bloom’s: Remember AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
42) ________ refers to the ever-increasing quantity and complexity of data that is continuously being produced by various technological sources. 1. 2. 3. 4. 5.
A) Little data B) Data mining C) Big Data D) A database E) Information overload
Answer: C Explanation: Big Data refers to the ever-increasing quantity and complexity of data that is continuously being produced by various technological sources. Difficulty: 1 Easy Topic: Current Technologies Used in Market Research Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom’s: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 43) ________ relates to the amount of data produced, which is generally measured in bytes, given the digital media in which data is most commonly stored. 1. 2. 3. 4. 5.
A) Volume B) Velocity C) Variety D) Veracity E) Value
Answer: A
Explanation: Volume relates to the amount of data produced, which is generally measured in bytes, given the digital media in which data is most commonly stored. Difficulty: 1 Easy Topic: Current Technologies Used in Market Research Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom’s: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation
44) ________ relates to the frequency at which data is generated over time and the speed at which it can and should be analyzed and used. 1. 2. 3. 4. 5.
A) Volume B) Velocity C) Variety D) Veracity E) Value
Answer: B Explanation: Velocity relates to the frequency at which data is generated over time and the speed at which it can and should be analyzed and used. Difficulty: 1 Easy Topic: Current Technologies Used in Market Research Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom’s: Remember AACSB: Analytical Thinking
Accessibility: Keyboard Navigation 45) ________ relates to the different types of data, including text, video, images, and audio, to name a few types. 1. 2. 3. 4. 5.
A) Volume B) Velocity C) Variety D) Veracity E) Value
Answer: C Explanation: Variety relates to the different types of data, including text, video, images, and audio, to name a few types. Difficulty: 1 Easy Topic: Current Technologies Used in Market Research Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom’s: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation
46) ________ relates to the reliability and validity of the data. 1. 2. 3. 4. 5.
A) Volume B) Velocity C) Variety D) Veracity E) Value
Answer: D Explanation: Veracity relates to the reliability and validity of the data.
Difficulty: 1 Easy Topic: Current Technologies Used in Market Research Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom’s: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 47) When Keung received the report from the interns who conducted surveys in the mall, he was concerned that they were not properly trained because the data did not match any of his other research. Keung was primarily concerned with the ________ of the data. 1. 2. 3. 4. 5.
A) volume B) velocity C) variety D) veracity E) value
Answer: D Explanation: Veracity relates to the reliability and validity of the data. Difficulty: 2 Medium Topic: Current Technologies Used in Market Research Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom’s: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation
48) Bjorn felt that the focus groups did not give him enough quantitative information to make a decision, so he directed his managers to conduct surveys online and look for secondary research. Which characteristic of Big Data is Bjorn trying to achieve? 1. 2. 3. 4. 5.
A) volume B) velocity C) variety D) veracity E) value
Answer: C Explanation: Variety relates to the different types of data, including text, video, images, and audio, to name a few types. Difficulty: 2 Medium Topic: Current Technologies Used in Market Research Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom’s: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 49) Mr. Evans is a fan of using Big Data because of its ability to generate a large amount of data that can be organized and quantified. Mr. Evans likes the ________ characteristic of Big Data. 1. 2. 3. 4. 5.
A) volume B) velocity C) variety D) veracity E) value
Answer: A Explanation: Volume relates to the amount of data produced, which is generally measured in bytes, given the digital media in which data is most commonly stored. Difficulty: 2 Medium Topic: Current Technologies Used in Market Research
Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom’s: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation
50) Fred has a sales meeting coming up and he needs to know sales figures by product and by region as quickly as possible so he can direct his managers on their presentations. Fred needs the ________ characteristic of Big Data. 1. 2. 3. 4. 5.
A) volume B) velocity C) variety D) veracity E) value
Answer: B Explanation: Velocity relates to the frequency at which data is generated over time and the speed at which it can and should be analyzed and used. Difficulty: 2 Medium Topic: Current Technologies Used in Market Research Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom’s: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 51) The CFO of BakersMark wasn’t sure about using Big Data, and he couldn’t justify the expense for collecting and storing it. In this case, he was concerned about the ________ of Big Data. 1. 2.
A) volume B) velocity
3. 4. 5.
C) variety D) veracity E) value
Answer: E Explanation: Without a clear idea of the value that can be obtained from Big Data, there is a limited justification for the expense of its collection and storage. Difficulty: 2 Medium Topic: Current Technologies Used in Market Research Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom’s: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation
52) ________ data refers to data that is generated in such a way that a logical organization is imposed on it during its generation, thus enabling it to be more readily analyzable for knowledge creation. 1. 2. 3. 4. 5.
A) Big B) Abstract C) Structured D) Unstructured E) Concrete
Answer: C Explanation: Structured data is generated in such a way that a logical organization is imposed on it during its generation, thus enabling it to be more readily analyzable for knowledge creation. Difficulty: 2 Medium Topic: Current Technologies Used in Market Research
Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom’s: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 53) When you complete a form online with your name, address, and credit card information in order to make a purchase, you are giving the company ________ data that can populate a relational database or spreadsheet. 1. 2. 3. 4. 5.
A) unsecured B) abstract C) structured D) unstructured E) soft
Answer: C Explanation: Structured data is generated in such a way that a logical organization is imposed on it during its generation, thus enabling it to be more readily analyzable for knowledge creation. Because of the method by which this data is collected—separate boxes in a webform—it qualifies as structured data that can populate a relational database or spreadsheet. Difficulty: 2 Medium Topic: Current Technologies Used in Market Research Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom’s: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation
54) After staying in a boutique hotel in Chicago, Marissa posted a picture on her Facebook feed and described how fabulous it was. This kind of information is considered ________ data.
1. 2. 3. 4. 5.
A) unsecured B) abstract C) structured D) unstructured E) soft
Answer: D Explanation: Unstructured data may not be immediately actionable in the way that structured data is, but it has become the most common form of data available to organizations, and is a potentially rich source of deep insights on customer behavior and customer/provider relationships. Unstructured data can include posts that people make on social media. Difficulty: 2 Medium Topic: Current Technologies Used in Market Research Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom’s: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 55) Tamra was so upset about how she was treated when she went on the Eiffel Tower tour that she recorded a video rant and posted it on YouTube. This is an example of ________ data. 1. 2. 3. 4. 5.
A) unsecured B) abstract C) structured D) unstructured E) soft
Answer: D Explanation: Unstructured data may not be immediately actionable in the way that structured data is, but it has become the most common form of data available to organizations, and is a potentially rich source of deep insights on customer behavior and customer/provider relationships. Unstructured data may include videos that people make discussing their experiences with products. Difficulty: 2 Medium Topic: Current Technologies Used in Market Research
Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom’s: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation