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TEST Bank For Geoff Malleck

Marketing Seventh Canadian Edition Gary Armstrong Philip Kotler Valerie Trifts

Table of Contents CHAPTER 1

Marketing: Creating Customer Value and Engagement ............................

CHAPTER 2

Company and Marketing Strategy: Partnering to Build Customer Engagement, Value, and Relationships .....................................................

CHAPTER 3

Analyzing the Marketing Environment .....................................................

CHAPTER 4

Managing Marketing Information to Gain Customer Insights ..................

CHAPTER 5

Understanding Consumer and Business Buyer Behaviour ........................

CHAPTER 6

Customer Value-Driven Marketing Strategy: Creating Value for Target Customers ..................................................................................................

CHAPTER 7

Products, Services, and Brands: Building Customer Value .......................

CHAPTER 8

Developing New Products and Managing the Product Life Cycle ............

CHAPTER 9

Pricing: Understanding and Capturing Customer Value ...........................

CHAPTER 10 Marketing Channels: Delivering Customer Value ..................................... CHAPTER 11 Retailing and Wholesaling ......................................................................... CHAPTER 12 Engaging Consumers and Communicating Customer Value: Advertising and Public Relations .................................................................................. CHAPTER 13 Personal Selling and Sales Promotion ....................................................... CHAPTER 14 Direct, Online, Social Media, and Mobile Marketing ............................... CHAPTER 15 The Global Marketplace ............................................................................ CHAPTER 16 Sustainable Marketing: Social Responsibility and Ethics .........................

Marketing: An Introduction, 7ce (Armstrong/Kotler/Trifts) Chapter 1 Marketing: Creating Customer Value and Engagement 1) Marketing, more than any other business function, deals with ________. A) customers B) sales C) advertising D) new products E) brands Answer: A Diff: 1 Type: MC LO: 1-1: Define marketing and outline the steps in the marketing process. AACSB: Application of knowledge 2) Amazon, like many other successful companies, is driven by one primary objective, namely ________. A) value creation for the customers. B) providing shareholders with healthy returns on their investments. C) acquiring companies in order to add to its many product offerings. D) fast and reliable delivery. E) acquiring market share from industry leader, Walmart. Answer: A Diff: 1 Type: MC LO: 1-1: Define marketing and outline the steps in the marketing process. AACSB: Application of knowledge 3) According to the five-step model of the marketing process, the first step in marketing is ________. A) capturing value from customers to create profits and customer equity B) constructing an integrated marketing program that delivers superior value C) engaging customers, building profitable relationships, and creating customer delight D) understanding the marketplace and customer needs and wants E) designing a customer-driven marketing strategy Answer: D Diff: 2 Type: MC LO: 1-1: Define marketing and outline the steps in the marketing process. AACSB: Analytical thinking

4) In recent years marketers have leveraged various forms of social media and other technologies to advance their primary goal of ________. A) gaining favourable media attention B) being better able to reach the customer directly, personally and interactively C) gathering more sales data (big data) D) finding less expensive ways to operate thus driving higher levels of profitability. E) faster product development Answer: B Diff: 2 Type: MC LO: 1-1: Define marketing and outline the steps in the marketing process. AACSB: Analytical thinking 5) Management guru Peter Drucker stated, "The aim of marketing is to make selling unnecessary." Answer: TRUE Diff: 1 Type: TF LO: 1-1: Define marketing and outline the steps in the marketing process. AACSB: Analytical thinking 6) What is marketing? Briefly describe the marketing process. Answer: Marketing can be defined as the process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return. The marketing process consists of five steps. In the first four steps, companies work to understand consumers, create customer value, and build strong customer relationships. In the final step, companies reap the rewards of creating superior customer value. By creating value for consumers, they in turn capture value from consumers in the form of sales, profits, and long-term customer equity. Diff: 2 Type: ES LO: 1-1: Define marketing and outline the steps in the marketing process. AACSB: Analytical thinking 7) As described in the text, both Airbnb and Target's CEO's share a practice that they believe makes them more capable leaders of their company. This practice involves more frequent ________. A) interviews with the media (Fortune Magazine, Wall Street Journal) B) blog posts on how to run a company (Jeff Bullas, James Altucher) C) visits to their locations (AirBnb hosts and Target stores) D) personal vacations to ensure they get rested while enjoying time away from their role E) isolation from the market in order to make more refined decisions Answer: C Diff: 2 Type: MC LO: 1-2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. AACSB: Analytical thinking

8) ________ are defined as states of felt deprivation. A) Needs B) Ideas C) Demands D) Values E) Exchanges Answer: A Diff: 1 Type: MC LO: 1-2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. AACSB: Analytical thinking 9) ________ are the form human needs take as they are shaped by culture and individual personality. A) Wants B) Necessities C) Services D) Benefits E) Risks Answer: A Diff: 1 Type: MC LO: 1-2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. AACSB: Analytical thinking 10) Consumers' needs and wants are fulfilled through ________. A) value B) demand C) desire D) market offerings E) ideas Answer: D Diff: 1 Type: MC LO: 1-2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. AACSB: Analytical thinking

11) Abel now has the buying power to purchase the computer that he wanted to buy six months ago. Abel's want has most likely become a ________. A) need B) value C) demand D) market offering E) desire Answer: C Diff: 3 Type: MC LO: 1-2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. AACSB: Analytical thinking 12) Canadian telecommunications giant BELL has committed resources to continue its annual, "Let's Talk" day to promote greater awareness in mental health. This is an example of a marketing offering for a(n) ________. A) product B) person C) idea D) place E) exchange Answer: C Diff: 2 Type: MC LO: 1-2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. AACSB: Analytical thinking 13) Marketers are said to suffer from marketing myopia when they ignore underlying consumer needs and focus excessively on ________. A) consumers' brand experiences B) competitors' threats C) consumers' existing wants D) competitors' strengths E) consumers' future demands Answer: C Diff: 2 Type: MC LO: 1-2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. AACSB: Application of knowledge

14) The Walt Disney World Resort doesn't just offer amusement park rides, it uses its famed Disney magic to create carefully orchestrated ________. A) service offerings B) benefits C) wants D) values E) experiences Answer: E Diff: 2 Type: MC LO: 1-2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. AACSB: Analytical thinking 15) When considering the factors that influence the experience of the Walt Disney World Resort, something as simple as how each employee is identified makes a difference. At Disney World, employees are called ________. A) Superstars B) Mickey's Crew C) Precious Jewels D) Mickey's Mouseketeers E) Cast Members Answer: E Diff: 1 Type: MC LO: 1-2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. AACSB: Application of knowledge 16) ________ is the act of obtaining a desired object from someone by offering something in return. A) Targeting B) Segmentation C) Differentiation D) Exchange E) Positioning Answer: D Diff: 1 Type: MC LO: 1-2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. AACSB: Analytical thinking

17) Market offerings are limited to physical products. Answer: FALSE Diff: 1 Type: TF LO: 1-2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. AACSB: Application of knowledge 18) Market offerings include entities such as people, places, information, and ideas. Answer: TRUE Diff: 2 Type: TF LO: 1-2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. AACSB: Analytical thinking 19) When sellers pay less attention to the specific products they offer and more attention to the benefits and experiences produced by these products, they suffer from marketing myopia. Answer: FALSE Diff: 2 Type: TF LO: 1-2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. AACSB: Application of knowledge 20) A greater focus on underlying customer needs than on existing customer wants leads to marketing myopia. Answer: FALSE Diff: 2 Type: TF LO: 1-2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. AACSB: Application of knowledge 21) A market is a segment of potential consumers who share a common need or want. Answer: TRUE Diff: 1 Type: TF LO: 1-2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. AACSB: Analytical thinking

22) Describe how the Loblaws clothing brand, Joe Fresh, differentiates itself from other clothing labels. Answer: By selling Joe Fresh in Loblaw brand stores (Superstore, Zehrs, ValueMart etc), Loblaws took advantage of its strong brand presence and the large number of stores to enable Joe Fresh to be highly accessible and visible. While it may appear a challenge to sell clothing in a grocery store, Loblaw's marketing strategy leveraged location as a key differentiator. People frequent their stores, so Joe Fresh remains front of mind. In order to succeed, Loblaws has to offer frequent product rotations (regular updates of new products on shelves). The company hired famous Canadian fashion designer Joe Mimran to advance the perception that Joe Fresh carries current fashions. Joe Fresh is considered a key part of fashion week activities. Compared to competing brands, Loblaws offers lower prices for up-to-date fashions. Diff: 2 Type: ES LO: 1-2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. AACSB: Analytical thinking 23) Using suitable examples, briefly compare and contrast the concepts of needs, wants, and demands. Discuss how these concepts relate to marketing practices. Answer: Human needs are states of felt deprivation. Needs are part of the human make-up; they are not created by external forces. Humans have a basic physical need for food, clothing, warmth, and safety, a basic social need for belonging and affection, and a basic individual need for knowledge and self-expression. Unlike needs, wants are not innate. Instead, wants are needs shaped by culture, society, and individual personality. For example, someone needs food, wants a Big Mac and soft drink, and demands lunch at McDonalds. Wants become demands when they are backed by consumers' buying power. Marketers conduct extensive research to understand customers' needs, wants, and demands. They then attempt to fulfill customers' needs, wants, and demands through their market offerings. Diff: 3 Type: ES LO: 1-2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. AACSB: Analytical thinking

24) Explain market offerings and marketing myopia. Answer: Consumers' needs and wants are fulfilled through market offerings — some combination of products, services, information, or experiences offered to a market to satisfy a need or a want. Market offerings are not limited to physical products. They also include services — activities or benefits offered for sale that are essentially intangible and do not result in the ownership of anything. Examples include banking, airline, hotel, retailing, and home repair services. More broadly, market offerings also include other entities, such as persons, places, organizations, information, and ideas. Many sellers make the mistake of paying more attention to the specific products they offer than to the benefits and experiences produced by these products. These sellers suffer from marketing myopia. They are so taken with their products that they focus only on existing wants and lose sight of underlying customer needs. They forget that a product is only a tool to solve a consumer problem. A manufacturer of quarter-inch drill bits may think that the customer needs a drill bit but what the customer really needs is a quarter-inch hole. These sellers will have trouble if a new product comes along that serves the customer's need better or less expensively. The customer will have the same need but will want the new product. Diff: 2 Type: ES LO: 1-2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. AACSB: Application of knowledge 25) ________ is the art and science of choosing target markets and building profitable relationships with them. A) Differentiation B) Marketing management C) Positioning D) Segmentation E) Customer-perceived value Answer: B Diff: 1 Type: MC LO: 1-3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. AACSB: Analytical thinking 26) Rather than assume that each client has the same needs, a travel agency that understands marketing creates separate departments; one dedicated to retirees, another to the business traveler, a third department concentrates on student travel and the fourth department focusing on families. This is an example of a firm that has considered ________. A) mass customization B) cost leadership C) positioning D) market Segmentation E) value engineering Answer: D Diff: 1 Type: MC LO: 1-3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. AACSB: Analytical thinking 8 © 2021 Pearson Canada Inc.

27) Dollarama profitably appeals to families with more modest means. The retailer's approach is most likely referred to as ________. A) mass distribution B) cost leadership C) consumer-generated marketing D) target marketing E) undifferentiated marketing Answer: D Diff: 3 Type: MC LO: 1-3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. AACSB: Analytical thinking 28) A brand's ________ is the set of benefits that it promises to deliver to consumers to satisfy their needs. A) dominant effect B) fringe benefit C) perquisite D) value proposition E) dividend yield Answer: D Diff: 1 Type: MC LO: 1-3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. AACSB: Analytical thinking 29) British Columbia-based Flair Airlines gives you "Canada's ticket to ultra-low airfares" is their ________. A) value proposition B) segmentation strategy C) market offering D) selling concept E) production concept Answer: A Diff: 2 Type: MC LO: 1-3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. AACSB: Analytical thinking

30) Which of the following marketing management orientations may yield the unintended consequence of aggressive selling by creating short term sales transactions rather than on building long-term relationships? A) marketing concept B) product concept C) selling concept D) direct marketing concept E) production concept Answer: C Diff: 2 Type: MC LO: 1-3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. AACSB: Analytical thinking 31) PC manufacturer, Lenovo, focuses on low labour costs and mass distribution to ensure the continuous availability of its products at reasonable prices. Lenovo most likely follows the ________. A) customer-driving marketing concept B) marketing concept C) societal marketing concept D) production concept E) selling concept Answer: D Diff: 3 Type: MC LO: 1-3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. AACSB: Analytical thinking 32) Henry Ford's philosophy was to perfect the Model-T so that its cost could be reduced further for increased consumer affordability. This most likely reflects the ________. A) customer-driving marketing concept B) marketing concept C) societal marketing concept D) production concept E) selling concept Answer: D Diff: 3 Type: MC LO: 1-3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. AACSB: Analytical thinking

33) The selling concept holds that ________. A) consumers will not buy enough of a firm's products unless the firm undertakes large-scale persuasion and promotion efforts B) a company's marketing decisions should consider consumers' wants, the company's requirements, consumers' long-run interests, and society's long-run interests C) consumers will only favour products that are available and highly affordable D) achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do E) consumers will favour products that offer the most in quality, performance, and innovative features Answer: A Diff: 2 Type: MC LO: 1-3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. AACSB: Analytical thinking 34) Which of the following is a difference between the marketing concept and the selling concept? A) The marketing concept focuses on customer needs, whereas the selling concept focuses on existing products. B) The marketing concept focuses on customer conquest, whereas the selling concept focuses on targeting the right customers. C) The marketing concept takes an inside-out perspective, whereas the selling concept takes an outside-in perspective. D) The marketing concept is product-centered, whereas the selling concept is productioncentered. E) The marketing concept focuses on short-term sales, whereas the selling concept strives to build long-term customer relationships. Answer: A Diff: 2 Type: MC LO: 1-3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. AACSB: Analytical thinking 35) The ________ concept holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do. A) marketing B) product C) production D) selling E) societal marketing Answer: A Diff: 1 Type: MC LO: 1-3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. AACSB: Analytical thinking 11 © 2021 Pearson Canada Inc.

36) Mountain Equipment Co-op (MEC) lives by a long-standing belief in being socially and environmentally accountable. This most likely reflects the ________. A) Societal Marketing Concept B) Selling Concept C) Marketing Concept D) Product Concept E) Production Concept Answer: A Diff: 2 Type: MC LO: 1-3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. AACSB: Application of knowledge 37) Customer-driven marketing is most effective when ________. A) a clear need exists among customers, but the need is difficult to identify B) customers do not know what they want but are easily persuaded C) customers seek new products and technological innovations D) clear needs exist and customers know what they want E) customers have wants but cannot afford them Answer: D Diff: 2 Type: MC LO: 1-3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. AACSB: Reflective thinking 38) L.L. Bean, the outdoor apparel retailer was founded on the principle of ________. A) low cost products B) environmental stewardship C) trend setting outdoor fashion D) customer satisfaction E) customer relationship management Answer: D Diff: 1 Type: MC LO: 1-3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. AACSB: Analytical thinking

39) The ABC, a leading provider of personal computer systems, began manufacturing tablet devices after predicting a future consumer need for portability. Which of the following was most likely implemented by the ABC company? A) the selling concept B) customer-driving marketing C) the product concept D) sustainable marketing E) the production concept Answer: B Diff: 3 Type: MC LO: 1-3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. AACSB: Analytical thinking 40) The societal marketing concept holds that ________. A) consumers will not buy enough of a firm's products unless the firm undertakes a large-scale selling and promotion effort B) a company's marketing decisions should focus on creating economic value in a way that also creates value for the surrounding environment C) the society will only favour products that are available and highly affordable D) achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do E) consumers will favour products that offer the most in quality, performance, and innovative features Answer: B Diff: 2 Type: MC LO: 1-3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. AACSB: Analytical thinking 41) Many leading business and marketing thinkers are now preaching the concept of "shared value" which recognizes that ________ needs, not just economic needs, define markets. A) functional B) marketing C) individual D) societal E) physical Answer: D Diff: 2 Type: MC LO: 1-3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. AACSB: Analytical thinking; Ethical understanding and reasoning

42) Which of the following concepts calls for sustainable marketing? A) the societal marketing concept B) the marketing concept C) the selling concept D) the production concept E) the product concept Answer: A Diff: 1 Type: MC LO: 1-3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. AACSB: Analytical thinking; Ethical understanding and reasoning 43) Cosmetic retailer Lush knows that doing what's right benefits both customers and the company. Their premium beauty products are made by hand from the freshest possible natural ingredients. This is an example of the ________ concept. A) marketing B) product C) production D) societal marketing E) selling Answer: D Diff: 2 Type: MC LO: 1-3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. AACSB: Analytical thinking; Ethical understanding and reasoning 44) ________ marketing is defined as socially and environmentally responsible marketing that meets the present needs of consumers and businesses while also preserving or enhancing the ability of future generations to meet their needs. A) Customer-driven B) Mass C) Sustainable D) Customer-driving E) Ambush Answer: C Diff: 2 Type: MC LO: 1-3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. AACSB: Analytical thinking; Ethical understanding and reasoning 45) The product concept is a customer-centered, sense-and-respond philosophy. Answer: FALSE Diff: 1 Type: TF LO: 1-3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. AACSB: Analytical thinking 14 © 2021 Pearson Canada Inc.

46) A brand's value proposition is the set of benefits or values it promises to deliver to consumers to satisfy their needs. Answer: TRUE Diff: 1 Type: TF LO: 1-3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. AACSB: Application of knowledge 47) The selling concept holds that consumers will favour products that offer the most in quality, performance, and innovative features. Answer: FALSE Diff: 1 Type: TF LO: 1-3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. AACSB: Analytical thinking 48) Xenon Corp. releases frequent updates to improve its expensive software products. This marketing approach used by the firm is most likely based on the production concept. Answer: FALSE Diff: 2 Type: TF LO: 1-3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. AACSB: Analytical thinking 49) Organizations that follow the production concept most likely practice socially and environmentally responsible marketing. Answer: FALSE Diff: 2 Type: TF LO: 1-3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. AACSB: Analytical thinking 50) Product, price, place, and promotion make up the elements of a firm's marketing mix. Answer: TRUE Diff: 1 Type: TF LO: 1-3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. AACSB: Analytical thinking

51) Why do companies generally divide a market into segments of customers? Answer: A company decides whom it will serve by dividing the market into segments of customers and selecting which segments it will go after. Some people think of marketing management as finding as many customers as possible and increasing demand. But marketing managers know that they cannot serve all customers in every way. By trying to serve all customers, they may not serve any customer well. Hence, companies usually want to select only customers that they can serve well and profitably. Ultimately, marketing managers must decide which customers they want to target and on the level, timing, and nature of their demand. Diff: 2 Type: ES LO: 1-3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. AACSB: Application of knowledge 52) Compare and contrast the product and production concepts. Answer: The production concept holds that consumers will favour products that are available and highly affordable. Therefore, it dictates that management should focus on improving production and distribution efficiency. This concept is one of the oldest orientations that guides sellers. The production concept is still a useful philosophy in some situations. For example, both personal computer maker Lenovo and home appliance maker Haier dominate the highly competitive, price-sensitive Chinese market through low labour costs, high production efficiency, and mass distribution. However, although useful in some situations, the production concept can lead to marketing myopia. Companies adopting this orientation run a major risk of focusing too narrowly on their own operations and losing sight of the real objective — satisfying customer needs and building customer relationships. The product concept holds that consumers will favour products that offer the most in quality, performance, and innovative features. Under this concept, marketing strategy focuses on making continuous product improvements. Product quality and improvement are important parts of most marketing strategies. However, focusing only on products can also lead to marketing myopia. For example, manufacturers of mousetraps might believe that if they can build a better mousetrap, their profits will soar but they are often rudely shocked. Buyers may be looking for a better solution to a mouse problem but not necessarily for a better mousetrap. The better solution might be a chemical spray, an exterminating service, a house cat, or something else that suits their needs even better than a mousetrap. Furthermore, a better mousetrap will not sell unless the manufacturer designs, packages, and prices it attractively, places it in convenient distribution channels, brings it to the attention of people who need it, and convinces buyers that it is a better product. Diff: 3 Type: ES LO: 1-3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. AACSB: Analytical thinking

53) Compare the selling and marketing concepts, and list the key components of each concept. Answer: The selling concept reflects an inside-out perspective, while the marketing concept takes an outside-in perspective. The selling concept is typically practiced when an organization markets products or services that buyers do not normally think of purchasing, such as insurance or blood donation. Aggressive selling focuses on creating sales transaction rather than on building long-term relationships with customers, with the aim of selling what a company makes rather than making what the customer wants. The marketing concept, on the other hand, is based on identifying the needs and wants of target markets and then satisfying those needs and wants better than competitors do. Under the marketing concept, customer focus and value are the paths to sales and profits. Instead of a product-centered make-and-sell philosophy, the marketing concept is a customer-centered sense-and-respond philosophy. The job is not to find the right customers for a product but to find the right products for customers. Diff: 3 Type: ES LO: 1-3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. AACSB: Analytical thinking 54) Briefly explain the societal marketing concept. Answer: The societal marketing concept questions whether the pure marketing concept overlooks possible conflicts between consumer short-run wants and consumer long-run welfare. Is a firm that satisfies the immediate needs and wants of target markets always doing what's best for its consumers in the long run? The societal marketing concept holds that marketing strategy should deliver value to customers in a way that maintains or improves both the consumer's and society's well-being. It calls for sustainable marketing, socially and environmentally responsible marketing that meets the present needs of consumers and businesses while also preserving or enhancing the ability of future generations to meet their needs. Companies like GE, Dow, Google, IBM, and Nestle are concerned not just with short-term economic gains, but with the well-being of their customers, the depletion of natural resources vital to their businesses, the viability of key suppliers, and the economic well-being of the communities in which they produce and sell. Diff: 2 Type: ES LO: 1-3: Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. AACSB: Ethical understanding and reasoning 55) The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction is referred to as ________. A) perceived-value management B) societal marketing C) customer relationship management D) partner relationship management E) enterprise resource planning Answer: C Diff: 2 Type: MC LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Analytical thinking 17 © 2021 Pearson Canada Inc.

56) Which of the following terms refers to a customer's evaluation of the difference between all the benefits and all the costs of a market offering relative to those of competing offers? A) customer-perceived value B) customer equity C) share of customer D) customer profitability E) customer lifetime value Answer: A Diff: 2 Type: MC LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Analytical thinking 57) A Steinway piano—any Steinway piano—costs a lot. But to those who own one, a Steinway is a great value. This is an example of ________. A) share of customer B) customer perceived value C) customer share D) customer lifetime value E) customer experience Answer: B Diff: 3 Type: MC LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Application of knowledge 58) Ritz-Carlton is fervently dedicated to anticipating customers' slightest needs. Without ever asking, they seem to know when customers want a king-size bed, non-allergenic pillow, extra body gel, or the blinds open upon arrival. An amazing 95 percent of departing guests report that their stay has been a truly memorable experience. This is an example of ________. A) customer delight B) customer lifetime value C) customer equity D) customer share E) customer-perceived value Answer: A Diff: 3 Type: MC LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Analytical thinking

59) Customer evangelists are those who ________. A) use personal selling methods to market products and services B) spread the word about their good experiences with a brand or product C) use their expertise to influence people about specific products D) work with quality-assurance teams to improve product safety E) evaluate newly launched products in the marketplace Answer: B Diff: 2 Type: MC LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Analytical thinking 60) In which of the following circumstances is an organization likely to engage in full partnerships with key consumers? A) when the market has few customers and high margins B) when the market has a huge number of customers C) when the firm has a frequency marketing program D) when the firm has a large number of low-margin customers E) when the firm has few marketing resources at its disposal Answer: A Diff: 2 Type: MC LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Reflective thinking 61) Procter & Gamble's Tide detergent does not attempt to get to know customers personally. Instead, Tide creates engagement and relationships through brand-building advertising, websites, and social media presence. Which of the following types of associations would be most profitable for the firm to develop with these customers? A) full partnerships B) basic relationships C) joint ventures D) strategic alliances E) business partnering Answer: B Diff: 3 Type: MC LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Analytical thinking

62) Rather than using hard-sell product pitches, Bark uses social media to share original comedic videos and stories- often without even mentioning their product- BarkBox. This is an example of ________. A) public relations B) soft-sell marketing C) engagement marketing D) intense social media blitzing E) societal marketing Answer: C Diff: 2 Type: MC LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Application of knowledge 63) Which of the following is an example of consumer-generated marketing? A) Cristal, a jewellery store, uses its page on Facebook to provide information about its upcoming products to its customers. B) Figa, a leading provider of athletic shoes, helps its customers customize their shoes on its website and choose personalized settings. C) Fun & Run, a local amusement park, promotes its services by allowing consumers to upload videos and write reviews about the park. D) Barton's, a local pet supply store, rewards frequent buyers with vouchers and exclusive offers. E) Energix, a manufacturer of soft drinks, attracts customers through televised advertisements. Answer: C Diff: 3 Type: MC LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Analytical thinking 64) Companies that invite consumers play a role in shaping ads and social media (Tesla) or by offering suggestions for product design (Oreo's, Mountain Dew) are leveraging what increasingly popular marketing approach? A) direct marketing B) low cost marketing campaign development C) process marketing D) engagement marketing E) consumer-generated marketing Answer: E Diff: 2 Type: MC LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Analytical thinking

65) ________ refers to working closely with people inside and outside the company to jointly bring more value to customers. A) Demand management B) Customer-generated marketing C) Integrated communication D) Partner relationship management E) Channel value proposition Answer: D Diff: 2 Type: MC LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Analytical thinking 66) ________ refers to a channel stretching from raw materials to components to final products that are carried to final buyers. A) A supply chain B) A marketing channel C) A market segment D) A demand chain E) A marketing-mix channel Answer: A Diff: 1 Type: MC LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Analytical thinking 67) The final step in the marketing process is ________. A) capturing value from customers B) constructing an integrated marketing program C) building profitable relationships with the customers D) understanding the marketplace E) designing a customer-driven marketing strategy Answer: A Diff: 2 Type: MC LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Analytical thinking

68) Stew Leonard's has created what has been the "Disneyland of Dairy Stores," complete with costumed characters, scheduled entertainment, and a petting zoo. It's built 30 additions onto the original store, which now serves more than 300,000 customers each week. This legion of loyal shoppers is largely a result of the store's passionate approach to customer service. Instead of focusing on individual transactions, Stew and his staff are putting a priority on ________. A) decreasing customer-perceived value B) managing partner relationships C) attracting "butterflies" D) converting "strangers" into "butterflies" E) capturing customer lifetime value Answer: E Diff: 3 Type: MC LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Analytical thinking 69) ________ refers to the portion of the customer's purchase that a company gets in its product categories. A) Value proposition B) Share of customer C) Brand equity D) Customer lifetime value E) Customer equity Answer: B Diff: 2 Type: MC LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Analytical thinking 70) ________ is the total combined customer lifetime values of all the company's current and potential customers. A) Share of customer B) Value proposition C) Customer equity D) Market share E) Customer-perceived value Answer: C Diff: 2 Type: MC LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Analytical thinking

71) The ultimate aim of customer relationship management is to ________. A) produce high customer equity B) divide markets into distinct segments C) evaluate customer lifetime value D) turn "strangers" into "butterflies" E) evaluate current sales share Answer: A Diff: 2 Type: MC LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Application of knowledge 72) In which of the following customer relationship groups do organizations generally avoid investing? A) barnacles B) strangers C) butterflies D) true believers E) true friends Answer: B Diff: 1 Type: MC LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Application of knowledge 73) A consumer who is potentially profitable but not loyal to a firm's offerings is referred to as a ________. A) true friend B) butterfly C) stranger D) barnacle E) true believer Answer: B Diff: 1 Type: MC LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Analytical thinking

74) ________ are customers who show low potential profitability and little projected loyalty. A) True friends B) Barnacles C) Strangers D) True believers E) Butterflies Answer: C Diff: 1 Type: MC LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Analytical thinking 75) A customer who is both loyal and profitable is referred to as a ________. A) barnacle B) stranger C) true believer D) laggard E) butterfly Answer: C Diff: 1 Type: MC LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Analytical thinking 76) Amazon Prime strives to convert casual shoppers into loyal customers. An Amazon Prime customer can be classified as a ________. A) barnacle B) true believer C) stranger D) laggard E) butterfly Answer: B Diff: 2 Type: MC LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Analytical thinking

77) Efforts to convert ________ into loyal customers are rarely successful. A) barnacles B) strangers C) true believers D) laggards E) butterflies Answer: E Diff: 1 Type: MC LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Application of knowledge 78) Customers who are classified as true believers ________. A) are attracted to a company's competitor's deals and offers B) have needs and wants that do not fit a company's offerings C) are not very profitable for a company D) tell others about their good experiences with a company E) are projected to be less loyal to any brand Answer: D Diff: 1 Type: MC LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Application of knowledge 79) Carla, a team leader in charge of customer relationship management, is planning strategies to improve the profitability of her firm's least profitable but loyal customers. She is also examining methods for "firing" customers in this group who cannot be made profitable. To which of the following customer relationship groups do these customers belong? A) butterflies B) true friends C) strangers D) barnacles E) innovators Answer: D Diff: 3 Type: MC LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Analytical thinking

80) Various government agencies have launched campaigns to encourage energy conservation and concern for the environment as well as discourage smoking, illegal drug use, and obesity. This illustrates ________ marketing. A) ambush B) social C) for-profit D) consumer-generated E) multi-level Answer: B Diff: 3 Type: MC LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Analytical thinking; Ethical understanding and reasoning 81) ________ marketing is perhaps the fastest-growing marketing platform. A) Online B) Social media C) Mobile D) Website E) Blog Answer: C Diff: 1 Type: MC LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Analytical thinking 82) Which of the following transforms marketing strategies into real values for consumers? A) share of customer B) customer equity C) the four Ps of marketing D) a firm's value proposition E) customer satisfaction surveys Answer: C Diff: 2 Type: MC LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Application of knowledge 83) Companies like Coca-Cola and Facebook deliver customer satisfaction by spreading happiness and connecting individuals through shared experiences. Answer: TRUE Diff: 1 Type: TF LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Application of knowledge

84) The more loyal a firm's profitable customers, the lower its customer equity. Answer: FALSE Diff: 1 Type: TF LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Application of knowledge 85) In markets with few customers and high margins, sellers should try to develop basic relationships rather than full partnerships. Answer: FALSE Diff: 2 Type: TF LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Application of knowledge 86) The Internet of Things (IoT) is a global environment where everything and everyone is digitally connected to everything and everyone else. Answer: TRUE Diff: 2 Type: TF LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Analytical thinking 87) Through consumer-generated marketing, consumers themselves are playing a bigger role in shaping their own brand experiences and those of others. Answer: TRUE Diff: 1 Type: TF LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Application of knowledge 88) Success at delivering customer value rests on how well a company's entire supply chain performs against competitors' supply chains. Answer: TRUE Diff: 1 Type: TF LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Reflective thinking 89) Customer equity is a measure of the past value of a company's customer base. Answer: FALSE Diff: 2 Type: TF LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Analytical thinking

90) In the final step of a marketing process, a company reaps the rewards of its strong customer relationships by capturing value from customers. Answer: TRUE Diff: 2 Type: TF LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Analytical thinking 91) Customer-perceived value is defined as a customer's evaluation of the perceived difference between all the benefits and all the costs of a market offering relative to those of competing offers. Answer: TRUE Diff: 2 Type: TF LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Analytical thinking 92) The aim of customer relationship management is to create not just customer satisfaction, but customer delight as well. Explain. Answer: Customer satisfaction cannot be taken for granted. Since brand loyalty is dependent upon strong customer satisfaction, companies strive to retain, satisfy, and even delight current customers. Firms create customer delight by promising only what they can deliver and then delivering more than what they promise. They also create emotional relationships with key customers. Delighted customers make repeated purchases and become customers for life. More importantly, they also essentially become an unpaid sales force for the firm as "customer evangelists" who tell other potential customers about their positive experiences with a product. Diff: 2 Type: ES LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Analytical thinking

93) Explain, with examples, the different types of relationships that a company can build with its customers. Answer: At one extreme, a company with many low-margin customers may seek to develop basic relationships with them. For example, Proctor & Gamble's Tide does not phone or call on all of its consumers to get to know them personally. Instead, it creates relationships through brand-building advertising, public relations, and social media presence. At the other extreme, in markets with few customers and high margins, sellers want to create full partnerships with key customers. For example, P&G sales representatives work closely with Walmart, Kroger, and other large retailers that sell Tide. In between these two extremes, other levels of customer relationships are appropriate. Beyond offering consistently high value and satisfaction, marketers can use specific marketing tools to develop stronger bonds with customers. For example, many companies offer frequency marketing programs that reward customers who buy frequently or in large amounts. Airlines offer frequent-flyer programs, hotels give room upgrades to their frequent guests, and supermarkets give patronage discounts to "very important customers." Other companies sponsor club marketing programs that offer members special benefits and create member communities. Diff: 2 Type: ES LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Analytical thinking 94) Compare and contrast customer-managed relationships and consumer-generated marketing. Answer: Today's consumers have more information about brands than ever before, and they have a wealth of platforms for airing and sharing their brand views with other consumers. Thus, the marketing world is now embracing not only customer relationship management, but also customer-managed relationships. Greater consumer control means that companies can no longer rely on marketing by intrusion. Instead, marketers must practice marketing by attraction — creating market offerings and messages that involve consumers rather than interrupt them. Hence, most marketers now augment their mass-media marketing efforts with a rich mix of direct marketing approaches that promote brand-consumer interaction. For example, many brands are creating dialogues with consumers via their own or existing online social networks. A growing part of the new customer dialogue is consumer-generated marketing, by which consumers themselves are playing a bigger role in shaping their own brand experiences and those of others. This might happen through uninvited consumer-to-consumer exchanges in blogs, video-sharing sites, and other digital forums. Increasingly, companies are also inviting consumers to play a more active role in shaping products and brand messages. One drawback of this process is that harnessing consumer-generated content can be time-consuming and expensive. Diff: 2 Type: ES LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Analytical thinking

95) Define customer equity and explain why it is important to a company. Answer: Customer equity is the sum of the lifetime values of all the current and potential customers of a company. Customer equity is dependent upon customer loyalty from a firm's profitable customers. Because customer equity is a reflection of a company's future, companies must manage it carefully, viewing customers as assets that need to be maximized. It is important that companies not only acquire customers but also keep and grow them. When companies create profitable customers, they earn a greater share of their purchases, and capture their customer lifetime value. Diff: 1 Type: ES LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Analytical thinking 96) Describe and compare the four types of customers classified by their potential profitability to an organization. Identify how an organization should manage each type of customer. Answer: The four types of customers are strangers, butterflies, true friends, and barnacles. 1. "Strangers" have low potential profitability and loyalty. A company's offerings do not fit well with a stranger's wants and demands. Companies should not invest in building a relationship with this type of customers. 2. Another type of customer in which a company should not invest is the "barnacle." Barnacles are highly loyal but not very profitable because there is a limited fit between their needs and the company's offerings. The company might be able to improve barnacles' profitability by selling them more, raising their fees, or reducing service to them. However, if they cannot be made profitable, they should be "fired." 3. Like strangers, "butterflies" are not loyal. However, they are potentially profitable because there is a good fit between the company's offerings and their needs. Like real butterflies, this type of customer will come and go without becoming a permanent, loyal consumer of a company's products. Companies should create satisfying and profitable transactions with them, and then cease investing in them until the next time around. 4. The final type of customers is "true friends." They are both profitable and loyal. There is a strong fit between their needs and the company's offerings, so the company should make continuous relationship investments in an effort to go beyond satisfying and to delight these customers. A company should try to delight true friends so that they will tell others about their good experiences with the company. Diff: 3 Type: ES LO: 1-4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. AACSB: Analytical thinking

97) Which of the following marketing tools is NOT used for digital and social media marketing? A) websites B) social media C) mobile ads and apps D) online video E) telemarketing Answer: E Diff: 1 Type: MC LO: 1-5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. AACSB: Analytical thinking 98) Today, almost every company, large or small, is touched in some way by global competition. Answer: TRUE Diff: 1 Type: TF LO: 1-5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. AACSB: Application of knowledge 99) Discuss the opportunities and challenges that new communication technologies have created for marketers. Answer: Through the Internet and related technologies, people can now interact in direct and surprisingly personal ways with large groups of others, from neighbours within a local community to people across the world. With communication technologies such as e-mail, blogs, websites, online communities, online social networks, and Twitter, today's marketers incorporate interactive approaches that help build targeted, two-way customer relationships. Marketers can create deeper consumer involvement and a sense of community surrounding a brand, making a brand a meaningful part of consumers' conversations and lives. However, while new communication tools create relationship-building opportunities for marketers, they also create challenges. They give consumers a greater voice, and therefore greater power and control in the marketplace. Today's consumers have more information about brands than ever before, and they have a wealth of platforms for airing and sharing their brand views with other consumers. Diff: 3 Type: ES LO: 1-5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. AACSB: Information technology

100) Explain how the Internet has transformed the way in which we do business today. Answer: The Internet links individuals and businesses of all types to each other. The Internet allows firms access to exciting new market spaces. The consumer love affair with digital and mobile technology makes it fertile ground for marketers trying to engage customers. Digital and social media marketing involves using digital marketing tools such as websites, social media, mobile ads and apps, online video, e-mail, blogs, and other digital platforms that engage consumers anywhere, anytime via their computers, smartphones, tablets, Internet-ready TVs, and other digital devices. At the most basic level, marketers set up company and brand websites that provide information and promote the company's products. Many of these sites also serve as online brand communities, where customers can congregate and exchange brand-related interests and information. The social media provide exciting opportunities to extend customer engagement and get people talking about a brand. Most companies now use social media as part of their marketing mixes. Mobile marketing is perhaps the fastest-growing digital marketing platform. Smartphones are ever-present, always on, finely targeted, and highly personal. This makes them ideal for engaging customers anytime, anywhere as they move through the buying process. For example, Starbucks customers can use their mobile devices for everything from finding the nearest Starbucks and learning about new products to placing and paying for orders. Diff: 3 Type: ES LO: 1-5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. AACSB: Information technology

Marketing: An Introduction, 7ce (Armstrong/Kotler/Trifts) Chapter 2 Company and Marketing Strategy: Partnering to Build Customer Engagement, Value, and Relationships 1) Which of the following is true of strategic planning in a firm? A) It deals with maintaining the company's current business ventures. B) It focuses on the firm's internal environment rather than the external environment. C) It occurs at the business-unit, product, and market levels rather than at the corporate level. D) It deals with adapting the firm to take advantage of changing marketing opportunities. E) It involves preparing short-term investment objectives at the product level. Answer: D Diff: 2 Type: MC LO: 2-1: Explain company-wide strategic planning and its four steps. AACSB: Analytical thinking 2) Cosmetics firm SatinSilk is revamping its mission statement and advertising strategy. The CEO stresses that the new mission statement should be market-oriented rather than productoriented. Which of the following mission statements will best suit the company? A) to create the best possible products and sell them at the best possible prices B) to sell hypoallergenic cosmetics products made only from the finest organic ingredients C) to give customers the complexion they dream about by providing products suited to their needs D) to become a market leader in every cosmetics product category E) to increase our market share in the cosmetics segment and increase profit margins Answer: C Diff: 2 Type: MC LO: 2-1: Explain company-wide strategic planning and its four steps. AACSB: Analytical thinking 3) A ________ is purposeful, specifying what an organization wants to accomplish in the larger environment. A) marketing strategy B) marketing objective C) strategic plan D) mission statement E) market portfolio Answer: D Diff: 1 Type: MC LO: 2-1: Explain company-wide strategic planning and its four steps. AACSB: Analytical thinking

4) As identified in the text, what is the Starbucks mission statement? A) Increase sales at every store by offering new products and lower prices to aggressively gain market share B) Growing profits by opening new and different stores in more locations throughout the world. C) To inspire and nurture the human spirit – one person, one cup and one neighbourhood at a time. D) Offering the most delicious, ethically sourced coffee and serve it in with tasty food. E) Starbucks does not believe in a mission statement as it restricts growth and limits opportunities Answer: C Diff: 2 Type: MC LO: 2-1: Explain company-wide strategic planning and its four steps. AACSB: Application of knowledge 5) Strategic planning defined: The process of developing and maintaining a strategic fit between the organization's goals and capabilities and its changing marking opportunities. Answer: TRUE Diff: 2 Type: TF LO: 2-1: Explain company-wide strategic planning and its four steps. AACSB: Application of knowledge 6) An organization's mission statement should emphasize its intentions toward customers and the customer experience the organization seeks to create. Answer: TRUE Diff: 2 Type: TF LO: 2-1: Explain company-wide strategic planning and its four steps. AACSB: Application of knowledge 7) "At Dodson, we sell shoes" is a market-oriented business definition. Answer: FALSE Diff: 2 Type: TF LO: 2-1: Explain company-wide strategic planning and its four steps. AACSB: Analytical thinking 8) "At CL Online, we create customer connectivity, anytime, anywhere" is a product-oriented mission statement. Answer: FALSE Diff: 2 Type: TF LO: 2-1: Explain company-wide strategic planning and its four steps. AACSB: Analytical thinking

9) Business portfolio analysis is defined as the process in which management ________. A) studies the products and strategies of competitors to improve the company's own products B) analyzes consumer feedback in order to better position the company's brand image C) assesses the attractiveness of an SBU's market and the strength of its position in the market D) segments the company's markets to reach target consumers effectively E) conducts marketing research to evaluate the company's marketing strategy Answer: C Diff: 2 Type: MC LO: 2-2: Discuss how to design business portfolios and develop growth strategies. AACSB: Analytical thinking 10) After reviewing the case in the text, the carefully crafted mission statement for Airbnb was presented as ________. A) belong anywhere. B) cheap rooms around the world making travel affordable. C) connecting hosts with guests. D) travel adventure defined. E) we are not a hotel. Answer: A Diff: 2 Type: MC LO: 2-2: Discuss how to design business portfolios and develop growth strategies. AACSB: Application of knowledge 11) The two dimensions the BCG approach uses to evaluate and manage SBUs are ________. A) market growth rate and relative market share B) market growth rate and market penetration C) market growth rate and market development D) relative market share and product development E) relative market share and market penetration Answer: A Diff: 1 Type: MC LO: 2-2: Discuss how to design business portfolios and develop growth strategies. AACSB: Analytical thinking 12) According to the BCG matrix, products or businesses with a high market share in a highgrowth market are classified as ________. A) stars B) cash cows C) question marks D) dogs E) heroes Answer: A Diff: 2 Type: MC LO: 2-2: Discuss how to design business portfolios and develop growth strategies. AACSB: Analytical thinking

13) In the BCG growth-share matrix, question marks refer to products or businesses with a ________. A) low market share in a niche market B) low market share in a market with high growth prospects C) greater market share than all their competitors combined in a saturated market D) high market share in a market with a high growth rate E) low market share in a market that is set to shrink significantly Answer: B Diff: 2 Type: MC LO: 2-2: Discuss how to design business portfolios and develop growth strategies. AACSB: Analytical thinking 14) In the BCG matrix, ________ refer to low-growth, high-share businesses or products. A) stars B) cash cows C) question marks D) dogs E) heroes Answer: B Diff: 1 Type: MC LO: 2-2: Discuss how to design business portfolios and develop growth strategies. AACSB: Application of knowledge 15) Omni Healthcare's analgesic drug Cetaprin has a 40 percent share in the analgesics market in the country of Terrania. Its closest competitor, Febex, has a 25 percent share in the market, while four other analgesic brands split the remainder. Which statement indicates that Cetaprin is a cash cow according to the BCG matrix? A) Omni Healthcare often takes money from other strategic business units to support Cetaprin. B) A customer survey shows that Cetaprin users do not prefer it to other analgesics in the market. C) The demand for analgesic drugs in the Terrania market is expected to maintain a low-growth, high-share status D) Febex is rapidly gaining market share over Cetaprin due to aggressive marketing efforts. E) The Terrania market for healthcare products is expanding rapidly. Answer: C Diff: 3 Type: MC LO: 2-2: Discuss how to design business portfolios and develop growth strategies. AACSB: Analytical thinking

16) Due to the limitations of the BCG and other formal portfolio planning models, many companies are placing responsibility for strategic planning in the hands of cross-functional teams of divisional managers who are close to their markets. In such organizations, strategic planning is ________. A) centralized B) decentralized C) purposeful D) limited E) informal Answer: B Diff: 2 Type: MC LO: 2-2: Discuss how to design business portfolios and develop growth strategies. AACSB: Analytical thinking 17) When Howard Schultz returned to assume leaderships at Starbucks in 2007, the company's average transactions per store fell and same-store growth slowed. This was happening despite continued strong growth in the industry. According to the BCG model, Starbucks was a ________. A) question mark B) dog C) cash cow D) star E) hero Answer: A Diff: 3 Type: MC LO: 2-2: Discuss how to design business portfolios and develop growth strategies. AACSB: Analytical thinking 18) Vertigo is an electronics company. According to the BCG matrix, which of the following products of Vertigo would most likely classify as a question mark? A) Blue–a cell phone that is designed for music lovers and has a very low market share in a market that is growing steadily B) Electra–a home entertainment system that has a strong market share in a market that is likely to expand in the future C) Kindle Fire–a children's iPad that has a high market share in a market that is not expected to grow significantly D) SpinDrive–a car audio system that has a high market share in a market that has been growing constantly E) SoLo–a CD player that has a very low market share in a market that is shrinking rapidly Answer: A Diff: 3 Type: MC LO: 2-2: Discuss how to design business portfolios and develop growth strategies. AACSB: Analytical thinking

19) According to the BCG matrix, products or businesses with a low share of market in a highgrowth industry are considered ________. A) dogs B) cash cows C) value chains D) stars E) question marks Answer: A Diff: 1 Type: MC LO: 2-2: Discuss how to design business portfolios and develop growth strategies. AACSB: Application of knowledge 20) Which of the following statements is true in the context of the BCG growth-share matrix? A) Stars often need heavy investment to finance their rapid growth in a market. B) The positions of SBUs in the growth-share matrix rarely change over time. C) The income from one SBU cannot be used to support other business units. D) Dogs promise to be large sources of cash. E) Cash cows typically turn into stars. Answer: A Diff: 2 Type: MC LO: 2-2: Discuss how to design business portfolios and develop growth strategies. AACSB: Application of knowledge 21) Most people are aware that Mars Incorporated sells popular candy products under a number of brands including M&M's, Snickers, Starburst, Wrigley, the company generates higher sales in ________ than their candy products. A) dental care products B) pet care products and services C) Uncle Bens Rice D) Sara Lee cakes and desserts E) coffee and tea products Answer: B Diff: 2 Type: MC LO: 2-2: Discuss how to design business portfolios and develop growth strategies. AACSB: Analytical thinking 22) ________ refers to reducing the business portfolio by abandoning products that no longer fit the company's overall strategy. A) Market segmentation B) Vertical integration C) Product line extension D) Downsizing E) Diversification Answer: D Diff: 1 Type: MC LO: 2-2: Discuss how to design business portfolios and develop growth strategies. AACSB: Analytical thinking 6 © 2021 Pearson Canada Inc.

23) Which of the following companies is using a divesting strategy? A) Juggernaut Bikes acquires new businesses in order to increase its market share. B) To achieve a higher market share, LBD Inc. increases investments in advertising and promotion. C) When sales of its clothing division decline, Blackstone sells the division to a competitor. D) Getix Computers increases the price of its products in order to maximize short-term profits. E) Harlow's market share remains steady over two years, and the firm decides to maintain its share at the current level. Answer: C Diff: 3 Type: MC LO: 2-2: Discuss how to design business portfolios and develop growth strategies. AACSB: Application of knowledge 24) A strategy for company growth that involves increasing sales to current market segments without changing the product is known as ________. A) market development B) market differentiation C) market penetration D) product development E) diversification Answer: C Diff: 1 Type: MC LO: 2-2: Discuss how to design business portfolios and develop growth strategies. AACSB: Analytical thinking 25) A firm's decision to identify and develop new markets for existing products is a ________ strategy. A) market development B) market differentiation C) market penetration D) product development E) diversification Answer: A Diff: 1 Type: MC LO: 2-2: Discuss how to design business portfolios and develop growth strategies. AACSB: Analytical thinking

26) Before being acquired by Restaurant Brands International in 2014, Tim Horton's focused on different approaches to company growth. In the Product/Market Expansion Grid Tim Horton's successfully applied three of the four approaches. The fourth approach, ________, was avoided. A) market development B) product development C) diversification D) market penetration E) product adaptation Answer: C Diff: 2 Type: MC LO: 2-2: Discuss how to design business portfolios and develop growth strategies. AACSB: Analytical thinking 27) Under Armour increasing its advertising spending and offering an ever-increasing range of styles and colours in its original apparel line is an example of a ________ strategy. A) market penetration B) market development C) product diversification D) business harvesting E) product development Answer: A Diff: 2 Type: MC LO: 2-2: Discuss how to design business portfolios and develop growth strategies. AACSB: Analytical thinking 28) McDonalds is globally recognized as a restaurant chain offering a consistent experience and similar foods. Which of the following most likely indicates that McDonalds is following a diversification strategy? A) McDonalds increases its spending on advertising and promotion. B) McDonalds acquires another chain of fast-food restaurants. C) McDonalds opens a restaurant in the previously untapped Bora-Bora. D) McDonalds enters the U.S. market with a line of children's clothing. E) McDonalds develops a new line of pizzas targeting its current market to be sold from its existing locations. Answer: D Diff: 3 Type: MC LO: 2-2: Discuss how to design business portfolios and develop growth strategies. AACSB: Analytical thinking