市场营销（双语）：Marketing Management Exercises 04-05（1）

Marketing Management Assistant Material MARKETING MANAGEMENT EXERCISES Third Edition College of Economics & Trade, NAU Nov. 2004 Chapter 1 Understanding Marketing Management ⅠMultiple Choice Which of the following is one of the Ten Rules of Radical Marketing that is used to guide marketers? The CEO must let the marketing be done by marketers. Get face to face with the people who matter the most - customers. Rely on marketing research as the most important tool. Don't use common sense as a guide. Marketing should pass through three stages when being implemented. Which one of the following is not one of the stages? Contractual Marketing Entrepreneurial Marketing Formulated Marketing Intrepreneurial Marketing ________ demand is when a major part of the market dislikes the product and may even pay a price to avoid it. Latent Declining Irregular Negative Which of the following is not one of the entities that marketing people are involved in marketing? Goods Services News All of the above can be marketed. Which of the following is not an example of a Consumer Market? Grocery Stores Industrial Trade Shows Retail Stores Clothing Stores Marketing is the process of planning and executing the conception, pricing, _____________, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goals. promotion commercials selling advertising When consumers go shopping on the Internet, they are said to be shopping in a ____________. marketplace market-trace market marketspace __________ are wants for specific products backed by an ability to pay. Wants Need Demands Cravings The formula that best describes how to determine customer value is as follows: Costs – benefits Benefits – costs Benefits – investments Outcomes - interests There are various types of communication channels that can be utilized by marketers. Which of the following is not one of those channels? Articulate Dialogue Distribution Service ___________ hold that consumers will prefer products that are widely available and inexpensive. Product Concepts Selling Concepts Marketing Concepts Production Concepts There are five types of needs that consumers evaluate and marketers need to probe. Which of the following is not one of those needs? Stated Needs Delight Needs Unrelated Needs Secret Needs A(n) ________ marketer discovers and produces solutions customers did not ask for but to which they enthusiastically respond. responsive creative anticipative outstanding ___________ marketing is the task of hiring, training, and motivating able employees who want to serve customers well. Internal External Integrated Interrelated There are different developments in business that are forcing marketers to take the marketing concept to heart. Which one of the following is not one of those developments? Increased competition Changing buying patterns Increased marketing expenditures Increased packaging ⅡTrue or False Today, companies tend to rely not on two-way communication with customers but on developing a Web site. (F) Because of the increase of Web sites, it is impossible to customize services for customers. (F) It is important for a company to get face to face with its customers in today's new economy. (T) Marketing is typically seen as the task of creating commercials and promotions for consumers and businesses. (F) Demarketing requires finding ways to reduce demand temporarily or permanently for a company's product or services. (T) Among the entities that marketing people are involved in marketing are persons, places, products, and information. (T) Examples of places that are marketed are cities, states, regions, and countries. (T) The consumer market exists to market items such as cars, towels, and raw materials used in manufacturing to consumers. (F) Marketing management is the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value. (T) A transfer simply means that A gives X to B but does not receive anything tangible in return. (T) The task environment includes components such as demographics, economics, natural environments, technology, and political-legal issues. (F) The marketing concept rests on four pillars: target market, customer needs, integrated marketing, and commercials. (F) An anticipative marketer looks ahead into what needs customers may have in the near future. (T) When all the company's departments work to serve the customer's interests, the result is the marketing concept. (F) Customers in today's business and markets are increasingly expecting higher quality and service and no customization. (F) Ⅲ Essay Questions Using the Ten Rules of Radical Marketing, give an example of how you would accomplish each rule in business.? What is the difference between a market segment and a target market?? Describe each of the five types of needs a customer experiences when making a purchase.? Ⅳ Marketing Spotlight GE GE was established in 1892 when Edison General Electric merged with Thomson-Houston. The company produced lightbulbs, elevators, motors, and appliances. Early success came as a result of J.P. Morgan’s financial backing and a focus on research and development. Over the next century GE evolved into one of the world’s biggest companies, with a diverse portfolio of products and businesses. It is among the largest U.S. companies in terms of revenues, and offers an incredible variety of products, from consumer electronics and industrial power to financial services and television broadcasting. Other operating segments include plastics, aircraft engines, and technical products and services for medicine and science. Under the leadership of Jack Welch, who became GE’s CEO in 1981, the company enjoyed two decades of unprecedented growth and prosperity. Welch is widely praised as a visionary business leader due to his performance at GE. He restructured the industrial giant by decentralizing the company’s operations. He also sought to expand GE’s business with highly profitable ventures, and worked to shed low-performing businesses, such as air-conditioning and housewares. This massive restructuring came at a significant cost to GE’s workforce: between 1981 and 1985, the company cut 100,000 jobs. Once the restructuring was completed, Welch pursued an aggressive acquisition strategy. Some of the major acquisitions included GE’s purchases of NBC Television in 1986, and Kidder, Peabody investment bank in 1990 (which it later sold to Paine Webber). In the 1990s, Welch greatly expanded the historically small GE Capital Services with bank and insurance company acquisitions. GE Capital now operates a diverse range of 27 business, including real estate, insurance, finance, and heavy equipment leasing, and provides over 40 percent of the company’s revenues. The pace increased between 1997 and 2000, during which time GE averaged more than 100 acquisitions per year. In 1999, GE acquired 134 companies worth $17 billion. In 2000, Welch oversaw the company’s biggest acquisition during his tenure, the $45 billion purchase of manufacturing titan Honeywell International. Today, GE has 49 strategic business units operating under the larger master brand. Despite its size, the company is able to react to the fast pace of the New Economy. In 2000, the company reorganized GE Information Systems into an e-commerce unit called GE Global Exchange Services and a support unit named GE Systems Services. These two units manage the world’s largest electronic trading community, comprised of more than 100,000 trading partners. Additionally, at Welch’s urging, GE employees saved billions of dollars for the company by finding ways to involve the Web in their jobs. The company developed an online network to monitor its manufacturing practices, put its human resources reviews online, and established a 24/7 service center for its plants. Welch sees GE as well-positioned to take advantage of the Internet, because he thinks content is the easy part of e-commerce while “infrastructure is the hard part, and we have the infrastructure to capitalize on.” (fn McGinn, Daniel, “Jack Welch Goes Surfing,” Newsweek, Dec 25, 2000.) In the 20 years Jack Welch was at GE’s helm, the company prospered tremendously. GE stock rose 3,098 percent between April 1981 and February 2001, compared with 896 percent growth for the S&P 500 during that same period. Once Welch named his successor – Jeffrey Immelt, head of GE’s medical imaging business – in November 2000, analysts wondered what effect the change would have on the company. Immelt, like Welch, has professed a dedication to the Internet. He describes it as “a transformational technology that is right in our sweet spot.” (fn Useem, Jerry, “Meet ‘Da Man,” Fortune, Jan 8, 2001. )What remains to be seen, though, is whether Immelt will conduct GE through a period of prosperity the way Welch has. Marketing would appear to be an important part of what Welch did with GE. Where and how did Welch apply some of the marketing concepts discussed in the text? If Welch returned to the company following the events of late 2001 and 2002 (September 11, 2001 and the Enron debacle), what changes do you think he might make in the GE marketing strategy? Ch2. Building Customer Satisfaction, Value, and Retention ⅠMultiple Choice _________________ is the difference between the prospective customer's evaluation of all the benefits and all the costs of an offering as compared to the perceived alternatives. Total customer value Customer perceived value Total customer cost Customer gains Customers develop their expectations about a product they will purchase from all of the following sources except: unread e-mail friends past experience peers Which of the following is not a tool for tracking and measuring customer satisfaction? Complaint and suggestion systems Customer satisfaction surveys Ghost shopping All of the above ___________ companies are increasingly focusing on the need to manage core business processes such as new-product development, customer attraction and retention, and order fulfillment. Big High-profile High-performance Highly competitive Which of the following are not resources that are needed by companies to carry out its business processes? labor commercials materials information A company's _________ consists of its structures, policies, and corporate culture, all of which can be dysfunctional in a rapidly changing business environment. organization rules policies culture _______________ companies are acknowledged as the industry leaders and widely admired; they set ambitious goals, communicate to their employees, and embrace a high purpose beyond making money. Utopian Encouraging Comparison Visionary The primary activities that represent creating value for customers as part of the value chain tool include all of the following except: inbound logistics operations technology marketing and sales Some of the ways that a company can seek to increase their profits and sales by searching for new customers include all of the following except: ads reading the obituaries direct mail phone calls Which of the following descriptions would best characterize a highly satisfied customer? Buys more products and services Visits competitors on a regular basis Try other brands to make sure they are loyal to a company Would not complain so they can appear to remain loyal Which of the following would best describe the calculation of a customer's lifetime value? The present value of the stream of future costs expected over the lifetime The present value of the stream of future income increases expected over the lifetime The future value of the stream of future costs expected over the lifetime The present value of the stream of future profits expected over the lifetime ____________ is the customer's objective assessment of the utility of an offering based on perceptions of its benefits relative to its cost. Relations equity Brand equity Value equity Net equity There are five different levels of investment in customer-relationship building. They are basic, reactive, proactive, partnership, and what? Subjective Accountable Objective Accounting Creating structural ties with customers is a long-term process for a company. Which of the following would not be a good suggestion for creating those ties? Concentrate on current sales Create long-term contracts Charge a lower price to consumers who buy larger supplies Turn the product into a long-term service A _________________ advantage is one that a company can use as a springboard to new advantages. customer relationship contractual leverageable ⅡTrue or False Total customer value is the bundle of costs customers expect to incur in evaluating, obtaining, using, and disposing of the given market offering. (F) A person's feelings of pleasure or disappointment resulting from comparing a product's performance (or outcome) in relation to his or her own performance (or outcome) is called satisfaction. (F) Customer expectations are created by buying experience, friends' and associates' advice, and marketers' and competitors' information and promises. (T) A value inquest consists of the whole cluster of benefits the company promises to deliver; it is more than the core positioning of the offering. (F) One of the tools used to track and measure customer satisfaction is a complaint and suggestion system. (T) Companies that navigate all the pitfalls to reach their customer value and satisfaction goals are called high-performance companies. (T) Examples of resources that a company can use to carry on its business processes are labor, materials, and information. (T) The shared stories, experiences, beliefs, and norms that every employee has and shares within a company are called policies. (F) Visionary companies are acknowledged industry leaders and are widely admired, set ambitious goals, communicate to their employees, and embrace a high purpose beyond making money. (T) A value chain is a tool used by a company to identify ways to create more customer value through its activities. (T) The process of calculating a company's customer defection rate is called customer scrambling. (F) A highly satisfied consumer stays loyal longer, buys more products talks favorably about the company, and shops at competitors regularly to keep up with price comparisons. (F) Customer lifetime value describes the present value of the stream of future profits expected over the customer's lifetime purchases. (T) Value equity is the customer's subjective and intangible assessment of the brand, above and beyond its objectively perceived value. (F) A customer advantage is something that a company can use as a springboard to new advantages. (F) Ⅲ Essay Questions From your own personal standpoint, state three ways in which you create your expectations about your purchases as a consumer. Core competencies are important for a business to recognize in themselves in order to be competitive. Core competencies have three characteristics. State them. What is the difference between a visionary company and a comparison company? Ⅳ Marketing Spotlight Charles Schwab Charles Schwab founded the discount brokerage named for him in 1974. The company's no-frills investment offerings were predicated on Charles Schwab's distaste for traditional brokers, who he labeled "hucksters of inside information, always trying to get me to buy this product or investment." Until 1993, Schwab's brokers were instructed not to offer investment advice, but rather to refer curious customers to publicly available research from Standard & Poor's or Morningstar. Schwab benefited from the online trading boom. Long before any of the traditional brokerage houses considered an e-commerce move, in 1997 Schwab was one of the first discount brokerages to offer online trading. It offered online trades at $29.95 for the first 1000 shares, compared with the per-trade fees that exceeded $100. Starting at zero in 1995, online trades accounted for 85 percent of all trades executed by Schwab by 2001. The company's retail assets grew threefold to almost $1 trillion during the same time period, putting it in league with the biggest brokerages in America. Between 1997 and 2000, daily trades rose 183 percent, while profits increased 112 percent during that time frame. Schwab's marketing activities helped the company become a household name synonymous with online trading. Early ads used real Schwab customers and employees in testimonial advertisements. In 1999, the company enlisted celebrity spokespersons to advertise its full-service online investing offerings. The humorous ads featured sports stars such as football player Shannon Sharpe and tennis star Anna Kournikova in cameo roles as Schwab customers who surprised competitors with their knowledge of investing principles. The tagline served to reinforce Schwab's difference from online-only brokerages: "We've created a smarter kind of investing. We've created a smarter kind of investor." These ads were part of Schwab's $200 million marketing budget for 1999. In 2001, as online trading slowed in the wake of the dot-com crash, Schwab sought to expand its business by providing its customers with a greater number of services. Rather than rely on a high volume of low-cost trades to drive revenues, Schwab began focusing on providing investment advice to its clients. In new brokerage offices, Schwab placed financial advisers from whom clients could seek investment tips and other services for a fee. Schwab also considered offering proprietary stock research for its customers. Industry experts expected these new services would recast Schwab in a role more similar to traditional brokerage houses. A former Schwab executive predicted, "Schwab will be a lot closer to Merrill Lynch than it is to the Schwab of yesterday." (Sources: John Gorman. "Charles Schwab, Version 4.0." Forbes, January 8, 2001, pp. 89-95; Charles Gasparino and Ken Brown. "Schwab's Own Stock Suffers From Move into Online Trading." Wall Street Journal, June 19, 2001, p. A1; Rebecca Buckman and Kathryn Kranhold. "Schwab Serves Up Sports-Themed Ads." Wall Street Journal, August 30, 1999, p. B9.) What changes in the marketing environment does the Schwab marketing effort reflect? How has Schwab effectively anticipated the needs of the market? Draw on recent economic developments to anticipate where the next changes likely will be for Schwab. Consider what past and future events might have a substantial impact on the way it operates in the future.  Chapter 3 Winning Marketing-Oriented Strategic Planning ⅠMultiple Choice Most large companies consist of four organizational levels. Which one of the following is not one of those levels? Division level Service level Corporate level Product level A clear, thoughtful ___________________ provides employees with a shared sense of purpose, direction, and opportunity. mission statement vision statement policy procedure Which of the following is not one of the major competitive scopes within which a company will operate? Competence scope Industry scope Vertical scope Versatile scope A strategic business unit has three characteristics. Which of the following is one of those characteristics? It is a collection of unrelated businesses. It has no defined set of competitors. It is a single business or a collection of businesses that can be planned separately. It should not have a manager who is responsible for planning and profit performance. Each of the following is a reason a business should use portfolio models cautiously except one. Which one is not a reason? They may lead the company to place too much emphasis on market-share growth. They may lead the company to be concerned with market segmentation. They may lead the company into the entry of a high-growth business. They may neglect their current customers. If a business is a market leader in a high-growth model and does not necessarily produce a positive cash flow for the company it is said to be what kind of business on the Growth Share Matrix? Star Cash Cow Dog Question Mark There are three options available to a company if it wants to grow much faster than its current business will permit. Which of the following is not one of those options? Identify opportunities to achieve further growth within current business. Identify opportunities to build or acquire businesses that are related to current businesses. Identify opportunities to add attractive businesses that are unrelated to current businesses. All of the above are options. Which of the following is not an approach to the market-penetration strategy? Encourage its current customers to buy more Attract competitors' customers Profile current customers Identify potential user groups in the current sales areas A SWOT Analysis examines four major areas. The major areas examined are strengths, weaknesses, opportunities, and what Theories Threats Targets Target Markets A(n) ____________________ is a challenge posed by an unfavorable trend or development that would lead, in the absence of defensive marketing action, to deterioration in sales or profit. environmental threat opportunity policy procedure For a company, objectives should have each of the following characteristics except: Stated quantitatively Should be realistic Must be consistent All of the above are characteristics Porter's Generic Strategies for strategic thinking include each of the following except which one? Overall cost leadership Differentiation Overall price leadership Focus A ____________________ alliance is when one company agrees to carry a promotion for another company's product. logistics promotional pricing product/service Which of the following is not an example of the "hard" elements of a successful business practice? Staff Strategy Systems Structure The contents of a good marketing plan include all of the following elements except which one? Executive Summary Current Marketing Situation Action Programs Past Marketing Strategies ⅡTrue or False Most large companies consist of four organizational levels: the corporate level, divisional level, business unit level, and the service level. (F) One of the major competitive scopes within which the company will operate is the horizontal scope. (F) Portfolio models may lead the company to place too much emphasis on market share growth and entry in high growth businesses or to neglect its current customers. (T) The market-penetration strategy is used when a company could find or develop new markets for its current products. (F) Forward integration is when a company acquires wholesalers or retailers, especially if they are highly profitable. (T) A marketing opportunity is an area of buyer need or potential interest in which a company can perform profitably. (T) An environmental threat is a challenge posed by an unfavorable trend or development that would lead, in the absence of defensive marketing action, to deterioration in sales or profit. (T) Goals are used to describe objectives that are general with respect to magnitude and time. (F) Porter's Generic Strategies are Overall Cost Leadership, Differentiation, and Focus (T) Logistic alliances are when one company offers logistical services for another company's product or service. (T) The "soft" element of style means that the employees have the skills needed to carry out the company's strategy. (F) A smart business competitor must design and deliver offerings for a broadly defined target market. (F) Zero defects mean that the products should be of high quality and free of flaws. (T) It is important to manage products through the product life cycle. The four stages of the product life cycle are introduction, growth, maturity, and reengineering. (F) A good marketing plan should include elements like an executive summary, current market situation, objectives, and a list of products that are irrelevant to the industry. (F) Ⅲ Essay Questions Describe each of the four different types of business examined in the Growth Share Matrix. There are four SBU strategies pursued by a business. They are build, hold, harvest, and divest. Explain how each of these strategies works in relation to the four types of businesses examined in the Growth Share Matrix. Discuss the three types of marketing control mechanisms used to control how marketing plans are being implemented. Ⅳ Marketing Spotlight Sara LeeWhat do Hanes underwear, Coach leather goods, Ball Park hot dogs, and Wonder Bra have in common? They're all brands manufactured and sold by Sara Lee Corporation, a company most people associate with frozen cheesecake. The Sara Lee brand accounts for only 25 percent of the company's $19.7 billion revenues, and it is the brand on which its namesake company has spent the least time, money, and focus. Yet, on September 29, 1997, Chicago-based Sara Lee Corporation stunned the business world by announcing an abrupt shift in strategy and focus; it would outsource its manufacturing operations and concentrate on building the Sara Lee brand and marketing its other name brands. Outsourcing will allow Sara Lee to lower its cost structure to make its brands price-competitive and release more funds for marketing. Sara Lee's strategic change represents a nod to the future. Companies are increasingly focusing on their core competencies and leaving the dirty, less glamorous manufacturing operations to lower-cost manufacturers located overseas. "It's passe for us to be as vertically integrated as we were," says John Bryan, in his twenty-third year of being Sara Lee's CEO. The company even coined its own word for the new strategy: de-verticalize. Others call it "decapitalizing," --tying up much less fixed assets in the business. Those most surprised by Sara Lee's move are those in the heavily "verticalized" home textile industry, in which Sara Lee, with Hanes and its other brands, earns a third of its revenues. The home textile industry is dominated by the giant mills. They are state-of-the-art, highly efficient, and extremely automated manufacturing operations. Yet, according to Sara Lee, they are edging toward obsolescence in the United States. A more recent critique says that while Sara Lee succeeded in reducing its capital as a percentage of sales, its growth has been lackluster. Sara Lee runs some 200 operating companies, each with its own profit center. There are few economies of scale since each company is run independently. There is no united front in facing the giant supermarkets. Even payroll and computer systems are not centralized at Sara Lee. At issue is whether conglomerates can be profitable. Sources: Based on "Sara Lee to Build Brand through Outsourcing, Marketing," Discount Store News October 20, 1997, p. A4; David Leonhardt, "Sara Lee: Playing with the Recipe," Business Week, April 27, 1998, p. 114; Rance Crain, "Sara Lee Uses Smart Alternative to Selling Some Valuable Brands," Advertising Age, September 22, 1997, p. 25; Warren Shoulberg, "Que Sara," Home Textiles Today, September 29, 1997, p. 70; and "Fashion Victim", The Economist, February 26, 2000, p. 73-74. While Sara Lee has recognized some key variables in the process of dealing with modern marketing, it could encounter problems as a pure marketing ("deverticalizing" or "decapitalizing") versus manufacturing and asset based firm that also engages in considerable marketing strategy and application. What are the implications of this and the options for Sara Lee's future marketing strategy? Based on the current direction for Sara Lee, where do you expect they will be in the next 5-6 years? Will they be successful or not? Why?  Chapter 4 Gathering Information and Measuring Market DemandⅠMultiple ChoiceA __________________ consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers. keting Intelligence System keting Information System Marketing Interchange System Management Information System Which of the following is not a way in which companies can improve the quality of their marketing intelligence? Allow salespeople to determine if information should be collected. Motivate distributors, retailers, and other intermediaries to pass along important intelligence. Collect information concerning competitors by buying their products. Set up customer advisory panels. Which of the following would not be considered a source for secondary data when conducting research? Internal Sources Government Publications Periodicals and Books All of the above Primary data can be obtained or collected in five ways. They are observation, focus groups, surveys, behavioral data, and what? Moody's Manuals Profit and Loss StatementsExperimentsInvestigationsWhich of the following examples of mechanical devices could not be used to obtain data mechanically during marketing research? Galvanometers AltimeterTachistoscopeEye camerasIn a _______________ sample, the population is divided into mutually exclusive groups (such as age groups), and random samples are drawn from each group. Stratified Random RandomClusterConvenienceWhich of the following is not a step in the Marketing Research Process? Analyze the Information Present the FindingsCollect the InformationAll of the aboveEach of the following is a characteristic of good marketing research except which one? Scientific Method Multiple MethodsResearch StandardizationHealthy SkepticismThe ____________ model shows the probability of moving from a current state to any future state such as in brand share studies. Queuing Markov-Process New Product Pretest Sales Response The __________________ is the set of consumers who have interest, income, and access to a particular offer. Available Market Market Potential Market Reliable Market ___________________ for a product is the total volume that would be bought by a defined customer group in a defined geographical area in a defined time period in a defined marketing environment under a defined marketing program. Geographical Demand Consumer Group Demand Environment Demand Market Demand Product penetration percentages look at the percentage of ownership or use of a product or service in a population. Companies assume that the ___________ the product percentage, the ____________ the market potential, although this assumes that everyone will eventually be in the market for every product. higher; lower smaller; more equal lower; higher more equal; smaller Area Market Potential is used to estimate each of the following areas except which one? Different cities Different companies Different counties Different countries Companies use a three-stage process to prepare a sales forecast. What is the three-stage process (in order)? Macroeconomic forecast, industry forecast, company sales forecast Industry forecast, macroeconomic forecast, company sales forecast Industry forecast, company sales forecast, macroeconomic forecast Company sales forecast, macroeconomic forecast, industry forecast Which of the following would not be a good example of an expert opinion of how a certain class might be at Clemson University? The Instructor The Student The Department Head over that course The Sheriff ⅡTrue or False A marketing information system consists entirely of the computer systems, software, and data used to make marketing decisions.(F) A marketing intelligence system is a set of procedures and sources used by managers to obtain very technical information about developments in the marketing environment.(F) Internal sources of information could include company profit and loss statements, balance sheets, and sale figures.(T) Most large companies rely heavily on outside market research firms instead of developing their own internal research departments, thus saving money. (F) Custom marketing research firms are hired to carry out specific projects for a company. (T) Primary data are data freshly gathered for a specific purpose or for a specific research project. (T) A focus group is a gathering of six to ten people who are invited to spend a few hours with a skilled moderator to discuss a product, service, organization, or other marketing entity. They are normally paid a small sum to participate. (T) Closed-end questions allow respondents to answer in their own words and often reveal more about how people think. (F) Depth interviewing involves going deeply into the thoughts that an individual may have about a product or service. (T) In an arranged interview, the respondents are contacted for an appointment to do the interview. (T) The last step of the marketing research process is where researchers apply some advanced statistical techniques and decision models to the data received. (F) A potential market is the set of all actual and potential buyers of a market offering. (F) Product penetration percentage is the percentage of ownership or use of a product or service in a population. (T) The North American Industry Classification System (NAICS) was developed by the United States, Canada, and Nova Scotia. (F) A purchase probability scale is used to inquire into only the customers' present personal finances and expectations of the economy. (F) ⅢEssay Questions You own a skateboard production company. Give an example of how your company might use the components of the Order-to-Payment Cycle to process orders for your customers. State six ways, or steps, that were discussed, that a company might take to improve the quality of its marketing intelligence. Describe each of the steps involved in the Marketing Research Process. ⅣMarketing Spotlight Knowledge Network Marketing research firm Knowledge Networks was founded by two Stanford University professors in 1998. The company is one of the leaders in the emerging field of Internet research. It boasts an online panel of more than 100,000 consumers connected via WebTV interactive television boxes. In order to approximate a cross-section of the U.S. population, Knowledge Networks uses "random digit dialing" phone surveys – which give each household in the U.S. an equal probability of selection – to fill its panel. The WebTV survey system has the advantage of allowing panelists to respond at their convenience, as opposed to phone surveys. Interactive televisions operate with a remote control in exactly the same fashion as normal TVs, so Internet literacy is not required for participation in Knowledge Networks research. The WebTV sets also enable Knowledge Networks to test advertising for companies in a realistic setting, by simulating commercial television viewing. The network of panelists enables the company to pursue its mission: "To help companies transform their markets by providing valid, timely, and cost-efficient information about consumers." Knowledge Networks sends Web surveys to its panel to determine their attitudes toward commercial products and their opinions on public issues. The company also monitors its panelists' in-home media intake and their purchase behaviors, which allows the company to track spending as it relates to marketing messages. For example, a company making computers could use the results of Knowledge Networks surveys to determine the ideal target audience for a new product. Knowledge Networks could tell the computer company what television shows and websites the target audience viewed most often, and the computer company could then buy advertising accordingly. Finally, Knowledge Networks would track if the target audience saw the advertising, and then correlate this with the purchase rate of the product among the target audience. In addition to product and advertising testing, Knowledge Networks conducts Web surveying. The company conducted numerous polls during the 2000 election season for CBS News and the Washington Post, and even did a lighthearted poll after the TV show Survivor finale. Additionally, Knowledge Networks keeps consumer profiles with over 1,000 data points updated weekly for all its panelists, which companies can access to learn about potential customers. The company seeks to become a one-stop marketing research company, performing television- and Internet-usage tracking studies, brand management diagnostics and tracking, product and advertising evaluations, and traditional survey applications. Knowledge Networks claims this comprehensive research coverage yields a "360-degree view of the consumer" by: Capturing and recording marketing inputs, such as advertising, and environmental factors that affect consumers Observing and analyzing how consumers process these stimuli and how, in turn, this shapes their thoughts, attitudes, and feelings Tracking what action consumers take in response to their experience of these stimuli (Sources: www.knowledgenetworks.com; Peter Sinton. "Polling Using the Internet Seeks to Improve Accuracy." San Francisco Chronicle, October 28, 2000, p. B1; Rebecca Buckman. "Pollster Aims at One-Stop Marketing Shop." Wall Street Journal, September 7, 2000, p. B6.) How is the Knowledge Networks different from Nielsen, Simmons and other research capabilities? Has the nature of consumer buying habits and demographic patterns changed to make this method more or less viable? Are there any possible drawbacks to this apparently revolutionary method of measuring advertising effectiveness and consumer response? Just because Knowledge Networks may provide more information about consumer consumption patterns, are there other unkowns this system cannot predict? How do you overcome the "self selection" syndrome in the Knowledge Networks system? Chapter 6 Analyzing Consumer Market and Buyer Behavior ⅠMultiple Choice _____________ is the buying behavior of final consumers. Business buying behavior Global purchasing Consumer buyer behavior Reseller buyer behavior. All of the following factors would be listed as social factors that influence consumer behavior EXCEPT: Occupation. Reference groups. Family. Roles and status. Which of the following would correctly be labeled as a cultural factor that would influence consumer behavior? Reference groups. Family. Lifestyle. Social class. Which of the following U.S. subcultures is described by the following situation: Buying power of $500 billion annually; Place more emphasis on brand names; Are more brand loyal; Are more price conscious than other segments; Do less shopping around? Hispanic Americans. Asian Americans. African Americans. European Americans. Which of the following statements about social class in the United States is NOT TRUE? Social class is determined by a single factor---occupation. Lines between social classes are not fixed. Lines between social classes are not rigid. People in a particular social class tend to exhibit a similar buying behavior Which of the following social class categories would be considered to be the largest in the United States with about 38 percent of the population contained within it? Upper-uppers. Working class. Middle class. Lower-lowers. Which of the following would be the BEST description of the major AIO dimensions that describe a person's pattern of living? Attitudes, Income, and Observations. Activities, Innovation, and Occasions. Attitudes, Interests, and Opinions. Activities, Interests, and Opinions. "We are what we have" would be associated with which of the following concepts? A person's self-concept. Personality. Beliefs. Attitudes. Another term for a motive (especially after it has become activated or directed) is a: Need. Cue. Drive. Action. Basic needs such as hunger and thirst are called: Social needs. Physiological needs. Psychological needs. Safety needs. _____________ describes changes in an individual's behavior arising from experience. Learning. Motivation. Stimulus object. A cue. Which step of the buyer decision process immediately precedes the purchase decision? Need recognition. Information search. Evaluation of alternatives. Postpurchase behavior. If a consumer has discomfort caused by postpurchase conflict, the consumer is experiencing: Confirmation. Cognitive dissonance. Stimulus ambiguity. Subliminal persuasion. The stage in the adoption process where the consumer considers whether trying the new product makes sense is called: Interest. Evaluation. Trial. Adoption. With respect to product characteristics that impact the rate of adoption of a product, ____________ is the degree to which the innovation is difficult to understand or use. Relative advantage. Compatibility. Divisibility. Complexity. A business buying situation in which the buyer purchases a product or service for the first time is called a: New task. Straight rebuy. Modified rebuy. Systems selling. During which stage of the business buying decision process does the business buyer list such items as technical specifications, the quantity needed, expected time of delivery, return policies, and warranties? Supplier search. Proposal solicitation. Supplier selection. Order-routine specification. ⅡTrue or False With respect to consumer behavior, the central question for marketers is: How do consumers respond to various marketing efforts the company might use? (T) Psychometrics is the set of basic values, perceptions, wants, and behaviors learned by a member of society from family and other important institutions. (F) Demographic research has shown that Hispanic Americans are considered to be the fastest-growing and most affluent U.S. demographic segment. (F) Social class is determined by a single factor---income. (F) Steven Washington, because of his special skills, knowledge, personality, and other characteristics, exerts influence on others. Therefore, Steven would probably be considered to be an opinion leader. (T) Under SRI Consulting's Values and Lifestyles (VALS) typology, a principle-oriented group would base their purchases on the actions and opinions of others. (F) Under Forrester's "Technographics" scheme for describing Internet behavior, Mouse Potatoes are consumers who are dedicated to interactive entertainment and willing to spend for the latest in "technotainment." (T) According to Maslow's Hierarchy of Needs structure, self-actualization needs are satisfied before esteem needs. (F) With respect to research on the subject of subliminal advertising, numerous studies by psychologists and consumer researchers have found no link between subliminal messages and consumer behavior. (T) An attitude is a descriptive thought that a person has about something. (F) The first step in the buyer decision process is need recognition. (T) Consumers go through five stages in the process of adopting a new product. The first stage is called initiation. (F) With respect to the five adopter groups discussed in the text, early adopters are guided by respect---they are opinion leaders in their communities and adopt new ideas early but carefully. (T) A good example of derived demand would be a situation where if consumer demand for cars drops, so will the demand for steel and all other products used to make cars. (T) Considering the types of buying situations in business buying, the straight rebuy often involves more decision participants than does the modified rebuy. (F) The first step in the business buying process is generally thought to be one where general need description occurs. (F) In business buying of materials, MRO stands for maintenance, repair, and operations. (T) Ⅲ Essay Questions Briefly describe the simple model of buyer behavior depicted in the text. Briefly describe and characterize the mature consumer market found in the United States. Lifestyle is a person's pattern of living as expressed in his or her psychographics. Describe a person's AIO dimensions and give examples. Two of the most popular theories of human motivation are those developed by Sigmund Freud and Abraham Maslow. Briefly describe each by relating these social scientists' thoughts on consumers and their behavior. There are three major types of buying situations. Which of these would be most appropriate for an "in" supplier to try to maintain product service and quality? Why? Ⅳ Marketing Spotlight The Nike story begins with its founder, running enthusiast Phil Knight. In 1962, Knight started Blue Ribbon Sports, the precursor to Nike. At the time, the athletic shoe industry was dominated by two German companies, Adidas and Puma. Knight recognized a neglected segment of serious athletes whose specialized needs were not being addressed. The concept was simple: Provide high-quality running shoes designed especially for athletes by athletes. Knight believed that "high-tech" shoes for runners could be manufactured at competitive prices if imported from abroad. Without much cash to do any advertising for his products, Knight crafted his "grass roots" philosophy of selling athletic shoes: Speaking to athletes in their language and on their level; sharing their true passion for running; and listening to their feedback about his products and the sport. Each weekend Knight would travel from track meet to track meet – both high school and collegiate competitions--talking with athletes and selling Tiger shoes from the trunk of his green Plymouth Valiant. The company's commitment to designing innovative footwear for serious athletes helped it build a cult following that rapidly reached the American consumer. By 1980, after just under two decades in the business, Nike had become the number one athletic shoe company in the United States. Unfortunately for the company, this wave of success was soon to crest as rival companies positioned themselves to take advantage of the aerobics craze, which Nike largely ignored. Companies like Reebok and L.A. Gear developed fashionable and comfortable products aimed at women fitness enthusiasts that sold remarkably well. Nike refused to join a market it saw as low in quality and heavy on cosmetic properties and continued making durable, performance-oriented products. The company lost millions in sales and allowed Reebok to gain basically uncontested market share points. By 1987, Reebok had nearly doubled Nike's market share, with 30 percentage points compared to Nike's 18. Fortunately for Nike, the company chose to fight back with product innovations and persuasive marketing. The company's "Air" technology revitalized the company with the additional aid of successful advertising campaigns such as the 1987 "Revolution in Motion" spot for the new Air Max shoes and the "Air Jordan" commercials. When Nike unveiled its now-famous "Just Do It" campaign in 1988, just as Reebok developed the "Reeboks Let U.B.U" slogan, the company was on its way to a full recovery. By 1989, Nike had regained the market leader position in America as market share rose three points above Reebok to 25 percent that year. In the 1990s, Nike continued its consumer focus. Nike kept its "finger on the pulse" of the shoe-buying public in part through the use of "EKINs" (Nike spelled backwards) – sports-loving employees whose job was to hit the streets to disseminate information about Nike and find out what was on the minds of retailers and consumers. Nike's "Brand Strength Monitor" formally tracked consumer perceptions three times a year to identify marketplace trends. In areas where it felt less knowledgeable, e.g., outside of track and basketball, Nike was more likely to commission customized research studies. Nike's inventory control system, called "Futures," also helped it better gauge consumer response and plan production accordingly. Innovative product development had always been a cornerstone of the company. By 1998, Nike was unveiling a new shoe style, on average, every day. In 1999, the company put the power to design shoes in the hands of its customers with the NIKEiD project. NIKEiD enabled customers to personalize a pair of selected shoe models using online customization software. The software led consumers through a step-by-step process: customers could choose the size and width of the shoes, pick the color scheme, and affix their own 8-character personal ID to the product. Early reviews of the NIKEiD project were full of criticism of the limited selection and availability, so less than a year after its debut, Nike added additional shoe models and more customization options while increasing site capacity. Though the company had become a household name throughout the world and, more important, achieved the position of global sportswear leader, Nike was still $3 billion shy of reaching the goal of $12 billion that Phil Knight initially intended the company to reach by 2000. In a letter in Nike's 2000 annual report, Knight addressed the issue of how to jumpstart his company's slowed growth and offered the following formula: "We need to expand our connection to new categories and toward new consumers." This quotation is indicative of Nike's relentless drive to build its brand with a strong consumer focus. While Nike made significant changes to maintain its global leadership position, there appear to be some problems in maintaining and growing that position. Is Knight correct in his formula for jumpstarting Nike's growth (last paragraph), or is the matter more complicated? ? Develop and evaluate the types of pro and con marketing environmental changes that you see for Nike. Given the options and challenges that Nike faces, how would you proceed with a strategic marketing plan for the firm? ? Chapter 8 Dealing With The Competition ⅠMultiple Choice Michael Porter has identified five forces that determine the intrinsic long-run profit attractiveness of a market or market segment. Which of the following is not one of those forces? Threat of new entrants Threat of current competition Threat of intense segment rivalry Threat of substitute products A(n) _________________ is a group of firms that offer a product or class of products that are close substitutes for one another. industry market organization strategic companies A small number of (usually) large firms that produce products that range from highly differentiated to standardized is said to be a(n) _________________ industry. Pure Monopoly Monopolistic Competition Pure Competition Oligopoly Entry barriers are those things in place that can make entry into a market very hard. Which of the following is not an entry barrier? Economies of scale High capital requirements Low asset salvage value Patents and licensing requirements Two important insights emerge from putting companies into strategic groups. One is that entry barriers differ in each group. The other is what? The group is now recognizable. The members of that group are now the key competitors. The members in the other groups recognize how diverse the industry is. This will identify target markets. There are six competitive positions in a target market. One is __________. This is when the firm controls the behavior of other competitors and has a wide choice of strategic options. Dominant Favorable Tenable Nonviable One thing to consider when looking at how companies react to competitive assaults is that the fewer the number of critical competitive variables: the greater the number of competitors. the greater the number of customers in the target market. the fewer the number of customers in the target market. the fewer the number of competitors. There are four main steps in designing a competitive intelligence system: setting up the system, collecting the data, evaluating and analyzing the data, and what? Protecting the data from being lost Maintaining the findings in a safe location Disseminating the information and responding to queries Determining what other areas would need the information obtained The formula for determining customer value is the difference between customer benefits and customer costs. Which of the following would be a customer cost? Product usage Maintenance and upkeep expenses Image Free delivery The firm that has the largest market share and leads the other firms in price changes, new product introductions, distribution coverage, and promotional intensity is called a _____________. market leader market challenger market follower market nicher A _____________ strategy is more aggressive in maneuver by attacking before the enemy starts its offensive strike. counteroffensive flank defensive position defensive preemptive defensive Caterpillar is a dominant leader in the construction equipment industry because of the following reasons, except for which one? Premium performance Extensive and efficient dealership system Limited line strategies Superior parts management A(n)_______________ attack is an attempt to capture a wide slice of the enemy's territory through a "blitz." It involves launching a grand offensive on several fronts. Frontal Encirclement Flank Bypass One of the market-follower strategies is when a company emulates the leader's products, name, and packaging with slight variations. This strategy is called what? Cloner Counterfeiter Imitator Adopter When a company decides to introduce a new product in a market that is dominated by another company by positioning away from the dominant brand with a high price and a low advertising budget to exploit a small profitable market is called what? Differentiation Challenger Premium Niche ⅡTrue or False A market segment is attractive if it already contains numerous, strong or aggressive competitors. (F) A market is a group of firms that offer a product or class of products that are close substitutes for one another. (F) Many factors shape a competitor's objectives, including size, history, current management, and financial situation. (T) In general, a company should monitor three variables when analyzing competitors. They are share of market, share of mind, and share of wallet. (F) If competitors are nearly identical and make their living the same way, then their competitive equilibrium is unstable. (T) In guerilla marketing, a marketer needs to be aware of social changes and changes in consumer tastes and preferences that could alter the business environment. (T) Customer value is determined by examining the difference between customer benefits and customer costs. (T) One of the ways to analyze customer value is to assess the quantitative importance of just the different packages offered. (F) Markets can be expanded through discovering and promoting new uses for the product offered. (T) The flank defense is when marketers erect outposts to protect a weak front or possibly serve as an invasion base for counter attacks by competitors. (T) Market thinning involves the company in shifting its focus from the current product to the underlying generic need, like realizing "petroleum" is really "energy." (F) Procter and Gamble's success rests on a number of principles, for example the principle of quality strategy-designing products of below-average quality. (F) When deciding which company to attack, one choice is to attack firms of its own size that are not doing the job and are underfinanced. (T) Guerilla warfare consists of waging large-scale attacks to harass and demoralize the opponent and eventually secure permanent footholds. (F) Smaller firms always compete against the larger firms by going after the same target markets in hopes of one day taking over and having the largest market share. (F) Ⅲ Essay Questions Describe the five forces that determine the intrinsic long-run profit attractiveness of a market or market segment developed by Michael Porter.? Discuss what makes a "good" competitor and a "bad" competitor.? There are five attack strategies that can be taken by a company when going after the competition. Discuss each tactic and how it applies to marketing.? Ⅳ Marketing Spotlight Microsoft was founded in 1975, when Bill Gates left Harvard at age 19 to work with high school friend Paul Allen on a version of the BASIC programming language. After moving the company from Albuquerque, New Mexico, to Seattle in 1979, Gates and Allen began writing operating system software. What happened to the company since its founding is a well-known and oft-told story. Here are highlighted a few of the key strategies that enabled Microsoft to achieve such remarkable growth in the competition-laden computer industry: Product Innovation: Microsoft achieved early success because of a single product innovation. In 1980, IBM contracted Microsoft to write the operating systems for its new PCs, which led to the creation of Microsoft Disk Operating System (MS-DOS). Since other PC manufacturers desired compatibility with IBM machines, Microsoft was soon adopted as the standard PC operating system. Another, even bigger innovation followed. In 1983, the company introduced the now-ubiquitous Windows, based on a graphical interface common to Apple’s Macintosh system. Since it was the first “windowing” software to work on PCs from any brand, Windows – like DOS before it – became the standard for personal computers. While Windows enabled the company to vault to unforeseen heights, it continued to develop innovative software and other products. Microsoft’s current big project is a next-generation operating system called Microsoft .Net (pronounced “dot-net”), designed to merge Windows with the Internet directly. Microsoft .Net will allow multiple devices – PCs, wireless phones, pagers, digital cameras, PDAs, and other “smart devices” – to work together over Web connections with unprecedented ease. Brand-extension strategy: Microsoft uses its strong brand name to launch new software products. Some examples include Microsoft Word, Microsoft Office, and Microsoft Internet Explorer. In 1989, Microsoft passed Lotus to become the world’s largest seller of software worldwide. At that time, the company boasted the broadest array of software products and applications as well as the highest profit margin in the industry, at close to 25 percent. Launching a new product under a strong existing brand name gives the new brand instant recognition and credibility with much less advertising outlay. Heavy advertising: In the early years, Microsoft used advertising sparingly. In the mid-1990s, however, it began to advertise aggressively. In 1994, the company made two major moves: it hired the head of marketing and advertising from Procter & Gamble and developed its first global advertising campaign. The campaign doubled the company’s ad budget to $100 million, and the following year that figure ballooned to $200 million for the Windows 95 launch. Today, it is common for the company to spend $50 million marketing a single product. Its global marketing budget for 2001 exceeded $500 million. Competitive Toughness: Microsoft’s aggressive competitive practices enabled the company to establish a leadership role in many product categories, but also led to legal battles. In one of the most publicized antitrust suits ever, the US Justice Department filed antitrust charges against Microsoft, claiming that it had limited consumer choice and stifled competition in part by bundling software, such as Internet Explorer, with its operating system. The presiding judge ruled to split Microsoft into two separate companies – an operating system company and an applications company, but the company continues to operate as a whole while its appeal is pending. Product Expansion: Microsoft was quick to expand its business beyond operating systems into software applications for home and business PC users, educational software, and computer games. The company also expanded its operating system business. In 1993, the company introduced its Windows NT operating system, which was designed to compete with UNIX as the operating system of choice for large networks. After overcoming initial reluctance to embrace the Internet, Microsoft developed the Internet Explorer Web browser as an answer to Netscape, and developed the Web portal Microsoft Network (MSN) to compete with the likes of Yahoo! and AOL. MSN was not successful and endured major alterations before being reborn as MSN.com. The company also expanded into media development in the 1990s. It formed a joint venture with NBC to create the cable station MSNBC, which featured news, financial, and talk show programming. The company added another television venture in 1997 when it bought the set-top box system WebTV (later to become UltimateTV). The company rolled out a video game console called Xbox intended to compete with advanced game systems from Sony and Nintendo. (Sources: Rebecca Buckman, “About Advertising: Microsoft Ad Campaign Touts Its Software for Big Business.” Wall Street Journal Europe, January 23, 2001; “Windows of Opportunity.” Marketing Week, December 9, 1994; “Microsoft Hires P&G Marketer.” Marketing Week, November 18, 1994; www.microsoft.com;) Could Microsoft be considered one of the best and worst examples of marketing success in America during the 1980s and 1990s? Discuss.? The Marketing Spotlight notes some of the effective competitive marketing strategies that Microsoft has exhibited in a short but very successful history. Could a similar firm entering the market today operate in the same manner?? Do any of the Microsoft strategies belie future issues that Microsoft and other technology-oriented firms should prepare to deal with in coming years?? Chapter 9 Identifying Market Segments and Selecting Target Markets ⅠMultiple Choice In __________________, the seller engages in the mass production, mass distribution, and mass promotion of one product for all buyers. macro-marketing mass marketing micro-marketing market segmenting An attractive niche is characterized by each of the following characteristics except for which one? The customers in the niche have a varying set of needs. The customers in the niche will pay a premium for their needs to be satisfied. The niche is not likely to attract other competitors. The niche has size, profit, and growth potential. One way to identify market segments is to identify preference segments. Which of the following is the segment that describes consumer preferences scattered throughout the space? Homogeneous preferences Clustered preferences Heterogeneous preferences Diffused preferences One way to discover new segments is to investigate the hierarchy of attributes consumers examine in choosing a brand. This process is called_____________. market dividing market separating market partitioning market insulation In order for market segments to be successful they need to be measurable, substantial, accessible, differentiable, and what? Understood Actionable Reliable Audible _________________ calls for dividing the market into geographical units such as nations, states, regions, counties, cities, or neighborhoods. Geographic segmentation Geographic organization Location segmentation Location organization __________________ is when the market is divided into groups on the basis of variables such as age, family size, family life cycle, gender, income, occupation, religion, race, generation, nationality, or social class. Segmentation Geographic segmentation Social segmentation Demographic segmentation Which of the following Cohort Groups is shaped by Watergate and the energy crisis? They were aged 35-45 in the year 2000. They are less optimistic. Generation X Leading-Edge Baby Boomer Trailing-Edge Baby Boomer Post-War Consumers who experience time famine are prone to __________________, that is doing two or more things at the same time. multi-involving multitasking multiprocessing multi-jobbing Markets can be segmented, based on product usage status, into nonusers, ex-users, potential users, first-time users, and which of the following? regular users part-time users adjunct users full-time users ______________ is a "deeply held commitment to rebuy or repatronize a preferred product or service in the future despite situational influences and marketing efforts having the potential to cause switching behavior.” Advertising Personal selling Brand reliance Loyalty Which of the following is not one of the examples of segmenting variables for business markets? Purchasing criteria Buyer-seller similarity Attitudes toward features User or nonuser status ____________________ are established customers who want speed in maintenance and repair, product customization, and high technical support. First-time prospects Sophisticates Novices Creators ______________ are those buyers who see the product, in a commodity market, as very important and demand the deepest discount and the highest service. Bargain hunters Programmed buyers Relationship buyers Transaction buyers There are five patterns in selecting a target market. Which of the following is not one of those patterns? Single-segment concentration Selective specialization Full market coverage All of the above are patterns in target market selection ⅡTrue or False In mass marketing, the seller engages in the mass production, mass distribution, and mass promotion of various products for different target markets. (F) Mass customization is the ability of a company to prepare on a mass basis a generic product, service, program, and communications so it will fit any customer's needs. (F) A homogeneous preferred market is one in which all the consumers have roughly the same preferences. (T) One way to discover new segments is to investigate the hierarchy of attributes consumers examine in choosing a brand. This process is called market gathering. (F) Geographic segmentation calls for dividing the market into different geographical units such as nations, states, regions, counties, cities, or neighborhoods. (T) Life stage defines a person's major concern, such as going through a divorce, going into a second marriage, taking care of an older parent, deciding to cohabit with another person, and so on. (T) The Leading-Edge Baby Boomer Cohorts are shaped by the assassinations of Kennedy and Martin Luther King and the Vietnam War. (T) In psychographic segmentation, buyers are divided into groups on the basis of social class and income usage. (F) Some marketers segment by core values, these are the belief systems that underlie consumer attitudes and behaviors. (T) In behavioral segmentation, buyers are divided into groups on the basis of their knowledge of, attitude toward, use of, or response to a product. (T) Markets can be segmented into light, medium, and heavy product users. Heavy users are not loyal to any particular brand of product. (F) Five attitude groups can be found in a market: enthusiastic, positive, indifferent, negative, and happy. (F) In the United States, small businesses are now responsible for 50 percent of the gross national product according to U.S. Small Business Administration. (T) Novice business customers are those who have not yet purchased and want to buy from a vendor who understands their business, who explains things well, and whom they can trust. (F) Through concentrated marketing, the firm looses a strong knowledge of the segment's needs and looses a strong market presence. (F) Ⅲ Essay Questions Describe each of the steps of the Market Segmentation Process used to identify a market.? Each generation is profoundly influenced by the times in which it grows up. These groups are called Cohorts. Using the seven cohort groups discussed in the text, determine the events, music, and other things that distinguish each group.? You are a salesperson selling office equipment to a business. Give an example of how you would sell to each of the three types of buyers based on their stage in the purchase decision process. Ⅳ Marketing Spotlight Marriott InternationalMarriott International grew to an international hospitality giant from humble beginnings, as a single root beer stand started by John and Alice Marriott in Washington, D.C. during the 1920s. The Marriott's added hot food to their root beer stand, renamed their business the Hot Shoppe, which they incorporated in 1929. They began building a regional chain of restaurants. As the number of Hot Shoppes in the Southeast grew, Marriott expanded into in-flight catering by serving food on Eastern, American, and Capital Airlines beginning in 1937. In 1939, Hot Shoppes began its food service management business when it opened a cafeteria in the U.S. Treasury building. The company expanded into another hospitality sector in 1957, when Hot Shoppes opened its first hotel in Arlington, Virginia. Hot Shoppes, which was renamed Marriott Corporation in 1967, grew nationally and internationally by way of strategic acquisitions and entering new service categories, and by 1977 sales topped $1 billion. In the pursuit of continued growth, Marriott continued to diversify its business. The 1982 acquisition of Host International made it America's top operator of airport food and beverage facilities. Over the course of the following three years, Marriott added 1,000 food service accounts by purchasing three food service companies, Gladieux, Service Systems, and Saga Corp. Determining that its high penetration in the traditional hotel market did not offer many opportunities for growth, the company initiated a segmented marketing strategy by introducing the moderately priced Courtyard by Marriott hotels in 1983. Moderately priced hotels comprised the largest segment of the U.S. lodging industry, a segment filled with established competitors such as Holiday Inn, Ramada, and Quality Inn. Research conducted by Marriott registered the greatest consumer dissatisfaction in the moderately priced hotels, and Courtyard hotels were designed to offer travelers greater convenience and amenities, such as balconies and patios, large desks and sofas, and pools and spas.1 Early success with Courtyard prompted Marriott to expand further. In 1994, Marriott entered the vacation timesharing business by acquiring American Resorts Group. The following year, the company purchased Howard Johnson Company, selling the hotels and retaining the restaurants and rest stops. In 1987, Marriott added three new market segments: Marriott Suites, full service suite accommodations; Residence Inn, extended-stay rooms for business travelers; and Fairfield Inn, an economy hotel brand. A company spokesman explained this rapid expansion: “There is a lot of segmentation that's going on in the hotel business. Travelers are sophisticated and have many wants and needs. In addition to that, we saw there would be a finite . . . ability to grow the traditional business.”2 Marriott Corp. split into two in 1993, forming Host Marriott to own the hotel properties and Marriott International primarily to engage in the more lucrative practice of governing them. In 1995, Marriott International bought a minority stake in the Ritz-Carlton luxury hotel group (Marriott purchased the remaining share in 1998). In 1996, the company acquired the Forum Group, an assisted living and health care services franchise, and merged it with Marriott Senior Living services. Marriott added a new hotel brand in 1998 with the introduction of SpringHill Suites, which provide moderate priced suites that are 25 percent larger than standard hotel rooms. The following year, the company acquired corporate housing specialist ExecuStay Corp. and formed ExecuStay by Marriott. To capitalize on the on-line travel and accommodations boom, the company developed Marriott.com, which offers customized content to registered visitors such as a vacation planner, golf course information, express reservations, and business content. In 2000, the company announced plans to join with rival Hyatt Corporation to launch a joint B2B e-commerce venture that will provide procurement services for the hospitality industry. The last Hot Shoppe restaurant, located in a shopping mall in Washington D.C., closed on December 2, 1999. This closing was fitting, since the tiny restaurant in no way resembled the multinational hospitality leader it spawned. Today, Marriott International is the largest hotel and resort company in America and one of the leading hospitality companies in the world, maintaining over 2,200 operating units in 59 countries that brought $20 billion in global revenues in 2000.
1 Henderson, Nell. "Marriott Bares Courtyard Plans." Washington Post, June 12, 1984. 2 Tucker, Elizabeth. "Marriott’s Recipe for Corporate Growth; Plan to Buy Denny’s Reflects Aggressive Strategy." Washington Post, June 1, 1987. What target marketing and marketing segmentation concepts discussed in the text did Marriott apply to get to where it is today? Has it picked its market segments and target markets effectively? Discuss the bases of Marriott's segment interrelationships.Does the evolution of Marriott's "businesses" indicate that the firm is well positioned for the coming decades of the 21st century? What opportunities and problems will Marriott encounter as it pursues their marketing strategy in planning toward the year 2010?Chapter 10 Positioning the Market Offering through the Product Life Cycle ⅠMultiple Choice In a general sense of positioning, according to Ries and Trout, a competitor has three strategic alternatives. Which of the following is not one of the strategic alternatives? The company can strengthen its own current position in the consumer's mind. The company can eliminate any nonproductive advertisements. The company can grab an unoccupied position. The company can deposition or reposition the competition in the customer's mind. In general, a company must avoid four major positioning errors if they are going to promote their ideas. Which of the following is not one of the four major positioning errors? Average positioning Under-positioning Over-positioning Confused positioning All products can be differentiated to some extent. A difference will be stronger to the extent that it satisfies each of the following criteria except which one? Must be important to buyers. Must be distinctive to buyers. Must be affordable to buyers. Must be humorous to buyers. A ___________ industry is one in which the companies in that industry can gain only a few, but rather large, competitive advantages. stalemated fragmented volume specialized Which of the following is not one of the ways, discussed in the text, for product differentiation? Form Ordering ease Features Performance quality __________________ is a measure of the product's expected operating life under natural or stressful conditions. It is a valued attribute for certain products. Durability Conformance quality Reliability Repairability Which of the following would be the services differentiation characteristic that refers to how well the product or service is delivered to the customer? Ordering ease Installation Customer training Delivery _________________ refers to data, information systems, and advice services that the seller offers to buyers as a services differentiation. Customer training Customer questioning Customer consulting Customer advising Better-trained personnel exhibit six characteristics. Each of the following is one of those characteristics except which one? Competence Camaraderie Credibility Communication Which of the following would not be an example of using the physical plant as a device for differentiating a business's image? A restaurant uses only fresh grown vegetables. A restaurant uses fine china at their tables. A restaurant uses crystal chandeliers. A gas station uses television monitors at their gas pumps. Profits are negative or low in the introduction stage. Promotional expenditures are at their highest ratio to sales because of each of the following except which one? The need to inform potential customers. The need to induce product trial. The need to secure distribution in retail outlets All of the above In determining how to increase sales volume, the sales volume formula highlights the areas that should be addressed. These areas show the opportunities where a sales increase could come from. What is the sales volume formula? Number of brand users divided by usage rate per user Number of new markets times increase in advertising costs Number of brand users times usage rate per user Number of new products times advertising costs Managers also try to simulate sales by modifying the product's characteristics. Which of the following would not be a way to modify the product's characteristics? Quality improvement Ordering ease Feature enhancement Style improvement There are five options available to a company experiencing a product decline. Which of the following is not one of the declining strategies available? Farming the product Harvesting Selling off the business Increase investments to try and strengthen the market or position Which of the following is not one of the stages in market evolution? Emergence Growth Maturity All of the above are stages ⅡTrue or False A new to the world product is one that allows a company to enter an established market for the first time. (F) One reason a product fails is due to the fact that the product development costs are lower than expected. (F) New-product development requires senior management to define business domains, product categories, and specific criteria. (T) Ideas for new products can only come from customers, scientists, competitors, employees, channel members, and top management. (F) A DROP-error occurs when the company dismisses an otherwise good idea. (T) Concept testing involves presenting the product concept to appropriate target consumers and getting their reactions. (T) Following a successful concept test, the new-product manager will develop a preliminary marketing-strategy plan for introducing the new product into the market. (T) Lab scientists are not responsible for developing ways to communicate a product's psychological aspects through physical cues. They are just responsible for designing the product's functional characteristics. (F) In sales-wave research, consumers who initially try the product at no cost are reoffered the product, or a competitor's product, at slightly reduced prices. (T) When it comes to test markets, one of the decisions that a manager needs to address is which city or cities to do the test marketing. (T) Expensive industrial goods and new technologies will normally undergo alpha testing, but eliminate beta testing. (F) When considering the timing of commercialization, late entry is when it tries to time its entry to coincide with the competitor's entry. (F) Critical path scheduling calls for developing a master chart showing the simultaneous an d sequential activities that must take place to launch the product. (T) One of the stages that adopters go through during a product's adoption process is the purchase stage. (F) Personal influence is the effect advertising has on an individual's attitude or purchase probability. (F) Ⅲ Essay Questions Describe the four rules of success that Treacy and Wiersema propose for a business to follow when positioning.? When differentiating, a difference will be stronger to the extent that the product satisfies a number of criteria. Describe the criteria and give an example of how a product could follow the criteria.? Describe ways to modify a market using the volume formula of volume equals the number of brand users times the usage rate per user.? Ⅳ Marketing Spotlight Monsanto Company In the 1980s, St. Louis-based Monsanto Company repositioned itself as a cutting-edge biotech firm with a concentration on food and nutrition. During the next two decades, the company dedicated millions of dollars to scientific research in biology and life sciences for the purpose of developing genetically modified (GM) agricultural and food products. In 1996, then-CEO Robert Shapiro spun off Monsanto’s $3 billion chemicals business, the old core of the company. Three divisions remained: a pharmaceuticals division, a food ingredients division, and an agricultural products division that produced GM foods. Such foods included a potato designed to fight potato beetles without pesticides and corn that is resistant to herbicides. The new Monsanto, bearing little resemblance to the small pharmaceuticals company founded in 1901, became a leader in the biotech revolution. The company felt that biotechnology would be the key to feeding the world’s rising population – currently growing at a rate of 800 million per decade – and improving global nutrition standards. Monsanto claimed that genetically superior crops of corn, wheat, tomatoes, and soybeans will yield larger harvests, while biotech improvements in the food supply will help prevent illness and boost human productivity. In the company’s view, the next two decades would bring a biotechnology revolution that would blend the pharmaceutical, agricultural, and food and nutrition businesses into a single "life science" industry. To improve the company’s reach in this industry, Monsanto spent millions amassing biotech patents by acquiring smaller companies and making deals with agribusiness firms. Such moves included the 1995 acquisition of Merck’s specialty chemicals unit and the purchase of Unilever’s wheat-breeding business in 1998. Monsanto’s aggressive move into the biotech industry met with approval on Wall Street. In 1997, Monsanto stock sold for close to 23 times earnings, compared with pure chemical company Dow’s stock, which sold for 10.5 times earnings. In addition to being a favorite of investors, however, Monsanto became a target for environmentalists and consumers opposed to GM products. Backlash was particularly harsh in Europe, where the mad-cow scare made food products an especially sensitive consumer issue. British newspapers repeatedly referred to the company as a "Frankenstein food giant" and "biotech bully boy," while Prince Charles vowed never to eat food containing Monsanto products. Monsanto’s attempt to win over U.K. citizens with an expensive public relations campaign failed: following the campaign, 51 percent of British consumers expressed negative feelings about GM foods, compared with only 44 percent beforehand. This sentiment was shared throughout much of Europe. In 1998, the European Union declared a moratorium on the approval of new GM seeds for planting. Several European countries, such as Austria and Luxembourg, banned GM foods altogether. Other hotspots for public criticism of the company included Japan, Australia, and India. Monsanto’s financial fortunes turned as hostile public receptions throughout the world left it unable to either sell expected volumes existing products or introduce new products. Following a merger with drug company Pharmacia & Upjohn, the pharmaceuticals division of Monsanto became part of the new Pharmacia Corporation in 2000. The remainder of the Monsanto Company is now a subsidiary of Pharmacia and strictly a biotechnology corporation. Pharmacia spun off part of Monsanto into a public company while retaining majority ownership. In 2000, Monsanto issued a statement apologizing for its insensitivity and arrogance and formally pledged to be "honorable, ethical, and open" in all its future actions. New CEO Hendrik Verfaille admitted that the company "missed the fact that this technology raises major issues for people of ethics, of choice, of trust, even of democracy and globalization. When we tried to explain the benefits, the science and the safety, we did not understand that our tone, our very approach, was arrogant." Amid mounting consumer concerns about GM crops, in November 2000 Monsanto adopted a restricted planting schedule for a GM corn product and delayed introduction of another variety until 2002. The growth potential for the company is huge: Monsanto estimates that more than 70 percent of the world’s insect- and herbicide- resistant crops come from the company. Anywhere public contempt for GM products lessens, Monsanto’s opportunities improve dramatically. The company has undertaken various advertising, public relations, and education campaigns to improve public perception of its products. The prevailing attitude at the company is now much humbler than it was during the mid-1990s, when then CEO Robert Shapiro declared that "worrying about starving future generations won’t feed them. Biotechnology will."
(New sources: Amy Barrett, "Rocky Ground for Monsanto?" Business Week, June 12, 2000; Scott Kilman and Helene Cooper, "Crop Blight: Monsanto Falls Flat Trying to Sell Europe on Bioengineered Food." Wall Street Journal, May 11, 1999; "Pledge to Turn Over a New Leaf." The Guardian, December 14, 2000.) What marketing mistakes did Monsanto make to cause the firm to receive such bad press in Europe and elsewhere? What lessons concerning public relations marketing does the Monsanto spotlight case indicate? Are there additional issues that Monsanto should consider for the future?Chapter 11 Developing New Products ⅠMultiple Choice There are many reasons why new products fail after they are introduced to the market. Which of the following is not a reason why new products fail? The idea is good, but the market size is overestimated. The product was designed too well. Development costs are higher than expected. Competitors fight back harder than expected. There are several factors that hinder the development process for new products. They include each of the following except which one? Advertising mediums Shortage of important ideas in certain areas Cost of development Capital shortages In order to manage new products properly, the company must be organized to do so. Each of the following is a way to manage new products except which? Product managers New-product managers Venture teams All of the above are examples There are a number of ways to stimulate creativity in individuals and groups in order to get ideas for new products. Which of the following is when you list several ideas and consider each one in relation to each other idea? Attribute listing Listing analysis Forced relationships Considered listing analysis The error that occurs when the decision to produce a product permits a poor idea to move into development and commercialization is called what? DROP-error GO-error GREEN LIGHT-error RED LIGHT-error A ________________ is an elaborated version of an idea for a product expressed in meaningful consumer terms. product concept product idea product creation product contraction Concept testing involves presenting the product concept to appropriate target consumers and getting their reactions. Which of the following are ways to concept test? Prototype Virtual reality Rapid prototyping All of the above are ways to concept test. Researchers measure product dimensions by having consumers respond to a number of questions. One question is set to determine if there are currently products on the market to satisfy needs. This is trying to determine what? Need level Communication level Gap level Canyon level _________________ is a method for deriving the utility that consumers attach to varying levels of a product's attributes. Attribute analysis Conjoint analysis Compact analysis Consumer analysis A new-product manager will develop a preliminary marketing strategy plan for introducing the new product into the market. Which of the following is the first part of that process? Describe the target market's size, structure, and behavior; the planned product positioning; and the sales, market share, and profit goals sought in the first few years. Outline the planned price, distribution strategy, and marketing budget for the first year. Describe the long-run sales and profit goals and marketing-mix strategy over time. Develop the mission statement for the company A ________________ uses three estimates (optimistic, pessimistic, and most likely) obtained for each uncertain variable affecting profitability under an assumed marketing environment and marketing strategy for the planning period. breakeven analysis leveled analysis projection analysis risk analysis A ______________ is the name given to testing a product within the firm to see how it performs in different applications. Gamma test Beta test Alpha test Delta test _______________ calls for finding 30 to 40 qualified shoppers and questioning them about brand familiarity and preferences in a specific product category Sales-Wave Research Simulated Test Marketing Controlled Test Marketing Test Markets _____________________ calls for developing a master chart showing the simultaneous and sequential activities that must take place to launch a product Critical path scheduling Marketing scheduling Development scheduling Production scheduling Five characteristics influence the rate of adoption of an innovation. They include each of the following except which one? Relative advantage Compatibility Divisibility All of the above are characteristics ⅡTrue or False A new to the world product is one that allows a company to enter an established market for the first time. One reason a product fails is due to the fact that the product development costs are lower than expected. New-product development requires senior management to define business domains, product categories, and specific criteria. Ideas for new products can only come from customers, scientists, competitors, employees, channel members, and top management. A DROP-error occurs when the company dismisses an otherwise good idea Concept testing involves presenting the product concept to appropriate target consumers and getting their reactions. Following a successful concept test, the new-product manager will develop a preliminary marketing-strategy plan for introducing the new product into the market. Lab scientists are not responsible for developing ways to communicate a product's psychological aspects through physical cues. They are just responsible for designing the product's functional characteristics. In sales-wave research, consumers who initially try the product at no cost are reoffered the product, or a competitor's product, at slightly reduced prices. When it comes to test markets, one of the decisions that a manager needs to address is which city or cities to do the test marketing. Expensive industrial goods and new technologies will normally undergo alpha testing, but eliminate beta testing. When considering the timing of commercialization, late entry is when it tries to time its entry to coincide with the competitor's entry. Critical path scheduling calls for developing a master chart showing the simultaneous and sequential activities that must take place to launch the product. One of the stages that adopters go through during a product's adoption process is the purchase stage. Personal influence is the effect advertising has on an individual's attitude or purchase probability. Ⅲ Essay Questions Describe five reasons why a new product fails once it is released in a market.? What are the differences between a DROP-error and a GO-error. Include the types of failures associated with a GO-error.? You have developed a new type of office furniture. Using the stages in the Adoption Process, describe how your customers would move through the stages. Ⅳ Marketing Spotlight-"3M" Minnesota Mining and Manufacturing (3M) fosters a culture of innovation and improvisation evident in its very beginnings. In 1904, the company’s directors were faced with a failed mining operation, but they turned the leftover grit and wastage into a revolutionary new product: sandpaper. Today 3M makes more than 60,000 products, including sandpaper, as well as adhesives, computer disks, contact lenses, and optical films. Each year 3M launches scores of new products, and the company earns about 35 percent of revenues from products introduced within the past five years. The company regularly ranks among the top 10 U.S. companies each year in patents received. 3M has an annual R&D budget of $1 billion, which is a healthy portion of its annual $16.7 billion in sales. 3M has a long history of innovation. In addition to inventing sandpaper, the company has developed numerous product innovations in its 99-year history that were the first of their kind. Here is a brief timeline: 1925 – Scotch? masking tape 1930 – Scotch? transparent tape1939 – First reflective traffic sign1956 – Scotchgard? fabric protector1962 – Tartan Track?, first synthetic running track1979 – Thinsulate? thermal insulation1980 – Post-it? Notes1985 – First re-fastening diaper tape1995 – First non-chlorofluorocarbon aerosol inhaler2000 – First laminating products that do not require heat 3M is able to consistently produce innovations in part because the company promotes a corporate environment that facilitates new discoveries. The following are some tactics 3M uses to ensure its culture remains focused on innovation: 3M encourages everyone, not just engineers, to become "product champions." The company’s "15 percent rule" allows all employees to spend up to 15 percent of their time working on projects of personal interest. Products such as Post-it Notes, masking tape, and the company’s microreplication technology developed because of 15-percent rule activities. Each promising new idea is assigned to a multidisciplinary venture team headed by an "executive champion." 3M expects some failures and uses failed products as opportunities to learn how to make products that work. Its slogan is "You have to kiss a lot of frogs to find a prince." 3M hands out its Golden Step awards each year to the venture teams whose new products earned more than $2 million in U.S. sales or $4 million in worldwide sales within three years of commercial introduction. In the late 1990s, 3M struggled as sales stalled and profits fell. The company restructured, shed several proprietary non-core businesses, and cut its work force. Because of these moves, 3M had record sales and income in 2000. When 3M named GE executive James McNerney its new chairman and CEO that year, he vowed he would continue to improve the company’s bottom line while keeping its culture of innovation intact.
(New Sources: www.3m.com; 3M 2000 Annual Report) How can 3M hold on to the notion of accepting failures to achieve the winners during recessions and shorter product life cycles (PLC)?? What changes would you make in the 3M marketing strategy if it became apparent that generic competitors were consistently able to copy the innovative 3M products?? How well has 3M applied the marketing concepts discussed in the text chapter? Chapter 12 Designing Global Market Offerings ⅠMultiple Choice A ______________ is a firm that operates in more than one country and captures R&D, production, logistical, marketing, and financial advantages in its costs and reputation that are not available to purely domestic competitors. global industry global firm global opportunity global institute There are several factors that are drawing more and more companies into the international arena. Which of the following is not a factor? A company wants to rely on one market. A company needs a larger customer base to achieve economies of scale. A company recognizes the higher profit opportunities. A company wants to reduce its dependence on any one market. There are several risks involved with going international. Which of the following is not a risk involved with getting into the international arena? The company might not understand the foreign country's business culture. The company might not know how to deal with foreign nationals. The company might realize it lacks managers with international experience. All of the above are risks. One of the recommendations of when a company should enter fewer countries is when: Market entry and market control costs are low. Product and communication adaptation costs are low. Population and income size and growth are high in the initial countries chosen. Dominant foreign firms cannot establish barriers to entry. Which of the following would be a regional economic free trade zone designed to work toward common goals in the regulation of international trade? The European Union NFLUSMX NAFTA MERCOSUL Some observers envision a ________________ that heaps favors on firms from the EU countries but hinders outsiders by imposing obstacles such as stiffer import quotas, local content requirements, and other non-tariff (non-tax) barriers. "fortress Europe" "fortress North America" "European Wall" "North American Wall" When evaluating potential markets, a company prefers to enter countries that rank high on market attractiveness, are low in market risk, and are what? The company can relate to the population of that country. The company has tried to enter the market in the past. The company has worked with other companies in entering that market. The company possesses a competitive advantage. _______________ takes place when the company makes a commitment to expand into a particular market. Occasional exporting Indirect exporting Active exporting Aggressive exporting There are several potential disadvantages to licensing. Which of the following is not one of the disadvantages? If the firm is successful, the company gave up potential profit. They now have to share their name with some other company for a fee. When the contract ends, they may now have a competitor. If the firm is successful, the company may have created competition for themselves in the future. There are a number of distinct advantages for a company making a direct investment in a country by building a facility. Which of the following would not be an advantage? The firm gets a decrease in the economies of scale in the form of raw materials. The firm can strengthen its image in the host country by creating jobs. The firm develops a deeper relationship with the local government. The firm retains full control over its investment. The last step of the internationalization process is which one of the following? No regular export activities. Export via independent representatives. Establishment of one or more sales subsidiaries. Establishment of production facilities abroad. When a company establishes a marketing program that the marketing mix is adjusted to each country's target market it said to be doing what kind of marketing program? Standardized Homogenized Adapted Different A __________________ is reintroducing earlier product forms that are well adapted to a foreign country's needs. Straight extension Product adaptation Backward invention Forward invention When handling the problem of setting prices in foreign countries, there are three options a company can take. Which of the following is not an option? Let the Better Business Bureau state what prices should be. Set a uniform price everywhere. Set a market-based price in each country. Set a cost-based price in each country. _______________ occurs when a company charges either less than its cost or less than it charges in its home market, in order to enter or win a market. Trashing Garbageing Destroying Dumping ⅡTrue or False A global industry is a firm that operates in more than one country and captures R&D, production, logistical, marketing, and financial advantages in its costs and reputation that are not available to purely domestic competitors. (F) Several factors are drawing more and more companies into the international arena. One reason is that going global will automatically generate more profits for the company. (F) One of the risks involved with going international is that the company might underestimate foreign regulations and incur unexpected costs. (T) Generally speaking, it makes bad sense for a business to operate in fewer countries with a deeper commitment and penetration in each country. (F) Countries have formed free-trade zones or economic communities-groups of nations organized to work toward common goals in the regulation of international trade. (T) Some observers envision a "fortress Europe" that heaps favors on firms from EU countries but hinders outsiders by imposing obstacles such as stiffer import quotas, local content requirements, and other non-tariff (non-tax) barriers. (T) In general, a company prefers to enter countries (1) that rank high on market attractiveness, (2) that are high in market risk, and (3) in which the company possess a competitive advantage. (F) Occasional exporting takes place when the company makes a commitment to expand into a particular market. (F) A licensor licenses a foreign company to use a manufacturing process, trademark, patent, trade secret, or other item of value for a fee or royalty. (T) Contract manufacturing is when a foreign firm hires local manufacturers, from that country, to produce the product in the country that they will be conducting business. (T) A joint venture should be avoided at all costs if there are economic or political reasons involved. (F) The first step of the internationalization process is establishment of production facilities abroad. (F) Standardization of a product, advertising, and distribution channels promise the lowest costs in terms of marketing strategies in the international market. (T) A straight extension involves altering the product to meet local conditions or preferences in international marketing. (F) When products are introduced in international markets the prices of the products always fall because of the currency exchange rates and the power of the U.S. dollar. (F) Ⅲ Essay Questions Describe the differences between each of the following Regional Free Trade Zones- The European Union, NAFTA, MERCOSUL, and APEC.? Describe the four stages of the internationalization process. Give examples of how a business might be at each stage.? Describe the five International Product and Promotional Strategies.? Ⅳ Marketing Spotlight- Coca-Cola The most recognized brand name in the world got its start in an Atlanta pharmacy, where it sold for five cents a glass. The name Coca-Cola, registered as a trademark on January 31, 1893, was based on two of the drink’s ingredients: extracts from coca leaves and the cola nut. In its early days, when the drink contained a form of cocaine, a drug made from coca leave extracts, the Coca-Cola was marketed as an "Esteemed Brain Tonic and Intellectual Beverage." The company’s first president, Asa Candler, was a savvy businessman who implemented numerous marketing strategies to increase consumption. At Candler’s behest, the company printed coupons offering complimentary first tastes of Coca-Cola, and outfitted distributing pharmacists with clocks, calendars, and scales bearing the Coca-Cola brand. The drink soon became a national phenomenon; by 1895, the company had established syrup plants in Chicago, Dallas, and Los Angeles. Coca-Cola expanded beyond the American borders in the early 1900s into numerous countries including Cuba, Puerto Rico, and France. In the 1920s, Coca-Cola pursued aggressive global branding, finding creative placements for its logo such as on dogsleds in Canada and on the walls of bullfighting arenas in Spain. During World War II, the U.S. Army shipped bottles of the beverage and bottling plants abroad to supply American soldiers in Europe and Asia. Its popularity throughout the world was fueled by colorful and persuasive advertising that cemented its image as the "All-American" beverage. When the Vietnam War tarnished the American image, Coke developed more globally aware advertising. In 1971, the company ran its legendary "I’d like to buy the world a Coke" television spot, in which a crowd of children sang the song from atop a hill in Italy. Coke’s moves into formerly restricted markets, such as China in 1978 and the Soviet Union in 1979, bolstered its image as a global company. By 1988, Coca-Cola was voted the best known and most admired brand in the world. One ad agency executive said, "There are about two products that lend themselves to global marketing – and one of them is Coca-Cola." Still, Coca-Cola did not institute a uniform marketing program in each of its global markets. Rather, the company often tailored the flavor, packaging, price, and advertising to match the tastes in specific markets. For example, Coke’s famous "Mean Joe" Green TV ad from the U.S. – in which the tired, weary football star reluctantly accepts a Coke from an admiring young fan and then unexpectedly tosses the kid his jersey in appreciation – was replicated in a number of different regions using the same format but substituting famous athletes from those regions (e.g., ads in South America used the Argentine soccer star, Maradona, while those in Asia used the Thai soccer star, Niat). Additionally, local managers were assigned responsibility for sales and distribution programs of Coke products to reflect the marked differences in consumer behavior across countries. In Spain, Coke has been used as a mixer with wine; in Italy, Coke is served with meals in place of wine or cappuccino; in China, the beverage is served at special government occasions. The company used the phrase "think global, act local" to describe its marketing strategy during the 1990s. Today, Coca-Cola conducts business with more than 230 brands in 200 countries. More than two-thirds of Coca-Cola’s revenues come from outside the U.S., a fact that makes the company vulnerable to downturns in international economies, as evidenced by shallow earnings during the global economic upheaval in the late 1990s. In response to the depressed sales brought by international recessions, the company pursued a restructuring plan that would recast the beverage giant as "a collection of smaller, locally run businesses." When Douglas Daft took over as chairman and CEO in 2000, he expressed his desire for Coca-Cola managers to adopt a new mantra: "think locally and act locally."
(New Sources: "The Story of Coca-Cola," www.coca-cola.com; Betsy McKay, "Coca-Cola Restructuring Effort Has Yet to Prove Effective." Asian Wall Street Journal, March 2, 2001; Andrew Marshall, "Focus: Can They Still Sell the World A Coke?" The Independent, June 20, 1999.) What is the primary basis for Coke’s past international marketing success? Is it only advertising? Given growing political and economic uncertainty, what changes can Coke make to it’s global marketing strategy? What is the real meaning of "think locally and act locally"? Can and should this marketing philosophy always work? Why? Chapter 13 Managing Product Lines and Brands ⅠMultiple Choice Which of the following is not one of the five levels of a product that a consumer might purchase? Basic product Experienced product Expected product Augmented product A ________________ is the set of all products and items that a particular seller offers for sale to buyers. product mix product system product alignment product line Each of the following is considered a consumer goods classification except which one? Convenience goods Shopping goods Unsought goods All of the above are consumer goods __________________ are long lasting goods that facilitate developing or managing the finished product for an industrial consumer. Materials Natural products Capital items Operating supplies A product mix is the set of all products and items that a particular seller offers for sale. A product mix's ____________ is determined by the amount of the many different product lines the company carries. length width stack altitude ___________________ occurs when a company lengthens its product line beyond its current range of products offered to consumers. Line stretching Line lengthening Line increasing Line filling _____________ is used when companies wish to enter the high end of the market for more growth, higher margins, or simply to position themselves as full-line manufacturers. Sideways stretch Down-market stretch High level stretch Up-market stretch A brand is a complex symbol that can convey up to six levels of meaning. Which of the following is not one of the levels of meaning? Attributes Culture Costs Culture __________________ relates to the deeper, more abstract goals consumers are trying to satisfy with the purchase of a certain brand. Brand glamour Brand essence Brand laddering Brand relevance Few customers are extremely brand loyal. Which of the following is not one of the five levels of customer attitude toward a brand? Customers never care about brands. Customer is satisfied. No reason to change the brand. Customer will change brands, especially for price reasons. Customer is devoted to the brand. There are a number of advantages to having high brand equity. Which of the following is not one of the advantages to high brand equity? The company will have more trade leverage in bargaining with distributors and retailers. The company can charge a higher price than its competitors. The brand offers the company some defense against price competition. All of the above are advantages There are several advantages to branding. Which of the following is not one of the advantages to branding for the seller of a product? The brand name makes it easier for the seller to process orders and track down problems. The seller's brand name and trademark provide legal protection of unique product features. Branding helps the competition distinguish who else is in the same market. Branding helps the seller segment markets. A manufacturer has several options with respect to brand sponsorship. The product may be launched as each of the following except which one? Distributor brand Government brand Licensed brand Own brand name The charge by supermarkets for accepting a new brand to cover the cost of listing and stocking a new product is called what? Slotting fee Shelf fee Shelving fee Slotting rebate There are a number of brand building tools available to a company to attract attention to their brands. Which of the following is not one of the tools available? Public Relations Sponsorships Event marketing All of the above are options ⅡTrue or False The set of attributes and conditions buyers normally expect when they purchase a product is called the basic product. (F) A product system is the set of all products and items that a particular seller offers for sale to buyers. (F) Supplies and business services are short-lasting goods and services that facilitate developing or managing the finished product of a company. (T) The length of a product mix refers to how many different product lines the company carries. (F) Line stretching occurs when a company lengthens its product beyond its current range. It can be stretched down-market, up-market, or both ways. (T) Line filling is used when there is already line stretching in place and products are introduced to fill gaps in that line. (T) A brand is a name, term, symbol, or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors. (T) The concept of brand bonding occurs when customers experience the company delivering a product to the consumer when it is ordered. (F) Brand equity is the positive differential effect that knowing the brand name has on customer response to the product or service. (T) The proper focus of marketing planning is to extend customer lifetime value, with brand management serving as a major tool. (T) One advantage of branding is that a brand name makes it harder for the seller to process orders and track down problems. (F) Due to the costs involved in development, large retailers are avoiding developing their own brands of products. (F) The growing power of store brands is a factor in the weakening of the position of national brands. (T) One strategy that should be avoided, at all costs, when deciding on a brand name is the use of individual brand names. (F) It is impossible for a brand to use its existing brand name to launch new products in other categories because of government regulations. (F) Ⅲ Essay Questions Using a name brand coffee as an example, describe how that product fits into each of the five levels of a product.? Describe the desirable qualities a brand name should have and give an example of a product currently on the market that fits that description.? State three functions that a label performs.? Ⅳ Marketing Spotlight-Anheuser-Busch Budweiser Lager was first brewed in 1876 by E. Anheuser & Co., St. Louis. Today, Anheuser-Busch is the largest brewer in the world in terms of volume, and it competes across a diverse range of markets. The company oversees more than 30 different beer brands, including the domestic market leader Budweiser, a number of other beverages, a group of theme parks, and a real estate enterprise. A broad brand portfolio has been a boon to Anheuser-Busch in the past. During the Prohibition era (1920-1933), the company maintained revenue flow by selling products as diverse as yeast, refrigeration units, truck bodies, soft drinks, and chocolate syrup. After Prohibition, Anheuser-Busch continued to grow with its core malt beverages. In 1957, Budweiser surpassed Schlitz to become the leading beer in the U.S. In 1980, the company had a 28 percent share of the domestic beer market, a figure that would rise steadily over the next two decades to 47 percent in 1995. Anheuser’s market share climbed to 50 percent by 2000, leaving competitors Coors and Miller far behind with 21 percent and 12 percent, respectively. The table displays Anheuser-Busch’s brand portfolio: Beers Budweiser – the company’s original beer Bud – Dry, Ice, Ice Light, Light Busch – introduced 1955: Ice, Light, and regular Michelob – first introduced in 1896: Light, Amber Bock, Honey Lager, Black & Tan, Hefe-Weizen Natural – a discount beer, available in Ice and Light The company also brews several specialty and microbrews, including Pacific Ridge Ale, Red Wolf Lager, and Safari Amber Lager. Anheuser-Busch also brews two non-alcoholic beers, Busch NA and O’Doul’s. Other Alcoholic Beverages: Doc Otis Hard Lemon – a lemon-flavored malt beverage Devon’s Shandy – a beer-lemonade mix King Cobra – malt liquor Hurricane – malt liquor Tequiza – beer with the flavor of tequila Non-Alcoholic Non-Beer Drinks 180 – a caffeinated, carbonated energy drink Theme Parks Busch Gardens –amusement park opened in Tampa, Florida, in 1959. Adventure Island – a water park in Tampa Discovery Cove – animal park in Orlando Sea World – "marine adventure parks" located in Orlando, San Antonio and San Diego Sesame Place – a Sesame Street theme park in Langhorne, Pennsylvania Marketing the Flagship Beer Anheuser-Busch has earned a reputation as an expert marketer, due in large part to its success with the flagship Budweiser brand. Budweiser receives much of the marketing support and attention of the company. Of the $396 million Anheuser-Busch spent on measured media in 2000, $146 million was spent on Budweiser, compared with $107 million for Bud Light. Advertising for Budweiser takes a three-pronged approach: ads emphasizing product quality, ads focusing on values and social responsibility, and ads with contemporary appeal designed to humor and entertain the audience. With this multi-pronged approach, Budweiser is able to create a rich brand image that resonates with a broad audience base. One marketing analyst recently proclaimed Budweiser, originally the beer of choice for blue-collar workers, is now beer for all demographics." Anheuser-Busch conducts extensive and sophisticated market research in order to develop engaging ad campaigns. It is no surprise, then, that advertising for Budweiser routinely garners both critical and audience acclaim, and is credited for much of the brand’s success. One of Budweiser’s most popular campaigns in recent years – the "Whassup?!" series – earned the company top honors during the Super Bowl ad frenzy, and spawned a host of Internet parodies and television spoofs. Anheuser-Busch moved to the Internet and launched Budweiser.com in 1996. The site offers information about the brand, company history, information about sporting events sponsored by Budweiser, downloads such as screensavers and television ads, and free e-mail addresses ending in Budweiser.com. During the first two months of 2001, Budweiser.com received almost 2 million more average monthly page visits than similar sites from Miller, Heineken, and Coors. In addition to these effective pull strategies, Anheuser-Busch uses various push strategies in retail outlets to help sell beer, from price cuts to instant-win packaging to in-store promotions. Since summer is the peak season for Budweiser, Anheuser Busch steps up its in store push strategies with its annual Bud Summer promotions. Anheuser-Busch Looks Ahead As Anheuser-Busch continues to expand, it will need new products to attract new drinkers. The company is planning to introduce a new super-premium beer using its flagship Budweiser brand as a launch pad. The company will test the new product, called Budweiser Red Label, in certain markets before launching it nationally. The company hopes the extension will attract import drinkers without alienating Budweiser purists. Other recent new products, including 180 energy drink and Tequiza beer, have not been successful. Still, Anheuser-Busch continued to set earnings records in fiscal 2001, and the strength of its brand portfolio continued to prove itself as the company gained market share at the expense of its competitors.
(Sources: Al Stamborski. "A-B Looks to Expand Its Horizons." St. Louis Post-Dispatch, February 19, 2001; David A. Aaker. Managing Brand Equity. The Free Press. New York: 1991, pp. 78-84; Hillary Chura. "Bud Set to Test Upscale Brew." Advertising Age, May 7, 2001; www.budweiser.com; Gerry Khermouch and Theresa Howard. "Core Brands Receive Primary Marketing Focus." Brandweek, June 21, 1999; Thomas Lee. "A-B Tries New Ad Approach on Internet." St. Louis Post-Dispatch, March 20, 2001; David Armstrong. "E-Commerce (A Special Report): Here’s to the Net." Wall Street Journal, April 23, 2001. Provide a concise analysis of the basis for the Anheuser-Busch marketing strategy that has worked so well for so long. If we can assume that great brand and product management is one of Anheuser-Busch’s primary strengths, what are some of the contributing factors in that process, and who is affected, primarily? Chapter 15 Designing Pricing Strategies and Programs ⅠMultiple Choice 1. Many companies do not handle pricing well. They make some common mistakes. Which of the following is not one of those mistakes? Price is too cost oriented. Price changes with demand. Price is not revised often enough to capitalize on market changes. Price is not varied enough for different product items. 2. If the price is _______________ than the value received, the company will miss potential profits; if the price is ___________ than the value received, then the company will fail to harvest potential profits. higher, lower the same as, lower the same as, higher lower, higher When selecting the pricing objective, a company can pursue any of five major objectives. Which of the following is not one of those objectives? Survival Maximize the current profits Maximize their market share All of the above are objectives Market skimming makes sense for a company if each of the following conditions is in place except which one? A sufficient number of buyers have high current demand. The unit costs of producing a small volume are not so high that they cancel the advantage of charging what the traffic will bear. The low price communicates the image of a superior product. The high initial price does not attract more competitors to the market. Customers prefer to work with customers who are less price sensitive. Each of the following is a factor associated with lower price sensitivity except which one? The product is more distinctive. Buyers are more aware of substitutes. Buyers cannot easily compare the quality of substitutes Buyers cannot store the product Most companies make some attempt to measure their demand curves. Which of the following is one of the methods discussed? Statistically analyze prices, quantities sold, and other factors to estimate their relationships Set the prices at one price and leave the price there to see how it affects customers Analyze advertising costs Avoid asking customers what their purchasing demands might be If the price of a product goes up or down and demand hardly changes, this would be called what kind of demand? Elastic demand Joint demand Stretch demand Inelastic demand Which of the following is an example of a fixed cost that a business might incur in the production of a product? Materials included in the production of a product The fluids used in the production of a product Executive salaries Hourly salaries There are a number of risks involved in experience curve pricing. Which of the following is not a risk involved in experience curve pricing? The pricing might give the product a cheap image. It assumes competitors are strong. The strategy leads the company into building more plants to meet demand while a competitor innovates a lower cost technology and obtains lower costs than the market leader company. It assumes competitors are weak The process, used by the Japanese, where market research is conducted to establish a new product's desired functions and price and then the company tries to build to that price, less their desired profit margin is called what? Target costing Goal costing Level costing Main costing When selecting a pricing method, which of the following "Cs" will be used to establish the price ceiling? Costs Common sense Competitors Customers Which of the following types of auctions is used when there is one seller and many buyers and the auctioneer announces a high price and then slowly decreases the price until a bidder accepts the price? English auction French auction Dutch auction Sealed bid When customers are looking at a particular product, buyers carry in their minds a _________________ formed by noticing current prices, past prices, or the buying context. variable price reference price fixed price lectured price Management must also consider the reactions of other parties when selecting a price. Which of the following is not one of the groups that need to be considered when selecting a price? Hourly employees Distributors Dealers Suppliers The _________________ type of pricing is used when there is a fixed fee plus a variable usage fee charged to the customer. product line pricing optional feature pricing by-product pricing two-part pricing ⅡTrue or False The only time a company needs to really be concerned with the prices they have set for a product is when the product is first introduced. (F) The company must set its prices in relation to the value delivered and perceived by the firm offering the product. (F) Companies pursue survival as their major objective if they are plagued with overcapacity, intense competition, or changing consumer wants. (T) Nonprofit and public organizations rely on partial cost recovery which is knowing that it must rely on private gifts and public grants to cover all the profits desired by the organization. (F) Generally speaking, customers are most price sensitive to products that cost a lot or are bought frequently by the customers. (T) If demand hardly changes with a small change in price, we say the demand is inelastic. If demand changes considerably, demand is elastic. (T) Fixed costs are costs that do not vary with production or sales revenue. An example would be rent. (T) An increase in the average cost with accumulated production experience is called the experience curve or leaning curve. (F) Customers' demand schedule, the cost function, and competitors' prices all play in a company's selecting of a price. (T) Markups are generally higher on seasonal items, specialty items, slower moving items, items with high storage and handling costs, and demand-inelastic items. (T) Any pricing method that ignores current demand, perceived value, and competition is likely to lead to the optimal price. (F) A decreasing number of companies base their price on the customer's perceived value. They must deliver the value promised by their value proposition, and the customer must perceive this value. (F) An offset is when the seller receives full payment in cash but agrees to spend a substantial amount of the money in that country within a stated time period. (T) Loss leader pricing is when sellers establish special prices in certain seasons to draw in more customers. (F) One of the traps of using a price cutting strategy is that of the fragile-market-share trap. That is where a low price buys market share and market loyalty. (F) Ⅲ Essay Questions Describe under what conditions market skimming makes sense for a company.? Describe how the "three Cs" affect the setting of prices.? What are some examples of countertrade associated with geographical pricing?? Ⅳ Marketing Spotlight-Louis Vuitton Moet Hennessey (LVMH) Luxury leather goods maker Louis Vuitton was established in Paris in 1855. For more than a century and a half, the company made quality, handcrafted luggage and other leather goods. It remained a small, family-controlled company until the 1970s, when French businessman Henry Racamier married a Vuitton heiress, and rapidly expanded and diversified the business. When Racamier took over in 1977, the company had only two shops in France and had combined sales of less than $50 million. By the mid-1980s, the company had 95 stores across the globe and revenues topping $500 million. In 1987, the merger of Louis Vuitton with famed French spirits, champagne, and perfume group Moet-Hennessey marked a new era of consolidation in the luxury-goods industry. The newly formed Louis Vuitton Moet Hennessey (LVMH) instantly became the world’s largest luxury goods company, raking in $4 billion in revenues in 1991. The company continued to grow in the 1990s by acquiring a number of other luxury-goods companies, including fashion label Christian Lacroix and shoe designer Berluti in 1993, TAG Heuer watchmaker in 1999, and the Donna Karan brand in 2000. Today, LVMH has a portfolio of 50 luxury brands and is the number one worldwide seller of champagne, cognac, fashion and leather goods, and the number three worldwide seller of perfumes and cosmetics. The company’s revenues topped $10 billion in 2000. Here are some of the famous luxury brands LVMH controls: Champagne, Wine, Cognac, And Brandy Moet & Chandon Dom Perignon Hennessey Fashion Berluti Christian Lacroix Givenchy Louis Vuitton Donna Karan Fragrances Christian Dior Givenchy Cosmetics Hard Candy Fresh Urban Decay Watches Ebel Tag Heuer LVMH also owns several business and financial media publications, including La Tribune newspaper, and two art magazines. The company owns all or part of a number of retail franchises, including the Sephora chain of cosmetic stores, DFS Group duty free shops, Miami Cruiseline Services duty free shops, and French department stores Le Bon Marche. Other businesses the company owns include auction houses Phillips, de Pury & Luxembourg and Etude Tajan, Omas luxury pens, and a development capital business called LV Capital. LVMH maintains an Internet presence (www.lvmh.com), but its website is mostly informational. It does, however, feature an e-commerce site called eLuxury, which debuted in June 2000 and in which LVMH is a principal investor. The site strives to maintain an "exclusive" image by prohibiting advertising, providing editorial content on trends, travel, and entertainment, and partnering with more than 60 luxury brands. Luxury Pricing, LVMH Style LVMH has consistently pursued a luxury pricing strategy, which means high markups, limited availability, and few if any markdowns. When asked by a reporter whether the Louis Vuitton store in Paris would have a post-Christmas sale, the company’s president Yves Carcelle answered "No," saying, "That would devalue the brand." Louis Vuitton sells its products only through a global network of company-owned stores. This keeps margins high and allows the company to maintain control of its products through every step in the channel. Bernard Arnault explained, "If you control your factory, you control your quality; if you control your distribution, you control your image." Today, LVMH maintains a global network of 1,286 stores, a 28 percent increase over 1999. Its 284 Louis Vuitton stores and 461 Sephora locations comprise over half of the stores in this network. Recently, Louis Vuitton built several flagship concept stores located on high-fashion avenues around the world like Rodeo Drive and Fifth Avenue. These stores sell an estimated average of $1,800 per square foot. Some of the best-selling stores sell as much as $8,000 per square foot. Additionally, since maintaining an upscale image is vital to a luxury brand, LVMH devotes over ten percent of annual sales to promotion and advertising. The company advertises its brands primarily in fashion and lifestyle publications. Some of the leading brands sponsor major international events with luxury cachet, as Louis Vuitton does by sponsoring the America’s Cup. Since image is an essential part of marketing luxury goods, LVMH is careful to evaluate every advertising and promotional opportunity for consistency with the image of its brands. As a result, the company manages a portfolio of luxury brands unparalleled in both size and sales.
(Sources: William Echikson. "Luxury Steals Back." Fortune, January 16, 1995; www.lvmh.com; www.eluxury.com;; Thomas Kamm. "Latest Fashion." Wall Street Journal, December 28, 1987; Lisa Marsh. "LVMH Thinks of Vuitton Globally, Acts on 5th Ave." New York Post, December 5, 2000; Joshua Levine. "Liberté, Fraternité – But to Hell with égalité!" Forbes, June 2, 1997.) What constitutes a luxury good such as those in the LVMH stable of products? What pricing concepts does LVMH apply effectively? Likewise, what actions has LVMH taken that belie a different and less effective approach? How would you characterize the LVMH marketing strategy? Suggest possible changes that LVMH could make to its marketing strategy in the future. Assume that their objective is to develop new market segments for LVMH.Chapter 16 Managing Marketing Channels ⅠMultiple Choice Which of the following is not an intermediary member of a distribution channel? Retailer Advertiser Manufacturer Wholesaler There are a number of advantages to using an intermediary to distribute products that are produced by a company. Which of the following is not an advantage? Most companies can distribute their own products directly to the consumers. Many producers lack the financial resources to carry out direct marketing. In some cases direct marketing simply is not feasible. Producers who do establish their own channels can often earn a greater return by increasing their investment in their main business. Members of the marketing channel perform a number of key functions. Which of the following is not one of the functions that are performed? Gather information about potential and current customers. Develop and disseminate persuasive communications to stimulate purchasing. Assume risks connected with carrying out channel work. All of the above are functions carried out by members. A ____________________ (also called a direct-marketing channel) consists of a manufacturer selling directly to the final customer. negative-level channel straight-level channel zero-level channel one-level channel There are a number of cases when a reverse flow channel would be used. Which of the following would not be one of those cases? To reuse products or containers To use up in the consumption of the product To refurbish products To recycle products Each of the following types of companies make up the information industry, and each faces distinct marketing challenges in running their respective businesses. Which one is not one of the types of companies in the information industry? Complex companies Consumer devices companies Content companies Conduit companies In designing the marketing channel, the marketer must understand the service output levels desired by consumers. Each of the following is a service output except which one? Lot size Waiting time Spatial convenience All of the above are outputs. Which of the following is the type of distribution where there is the use of more than a few but less than all of the intermediaries who are willing to carry a particular product? Exclusive Intensive Selective Reflective There are a number of terms, or elements, of a "trade-relations mix." Which of the following is not one of those elements? Price policy Product policy Conditions of sale Distributors' territorial rights Companies that are successful in switching their customers to lower cost channels, assuming no loss of sales or deterioration in service quality, will gain a _____________________. channel advantage channel gain distribution gain distribution advantage After a company has chosen a channel alternative, individual intermediaries must be selected, trained, motivated, and what? Recruited Developed Compensated Evaluated Producers vary greatly in skill in managing distributors. They can draw on each of the following types of power to elicit cooperation except which one? Coercive power Reward power General power Legitimate power There are a number of ways a producer can evaluate the performance of an intermediary. Which of the following is one way a producer can evaluate an intermediary? The intermediary's performance is compared to human resource needs. The intermediary's performance is compared to sales-quota attainment. The intermediary's performance is compared to current events. The intermediary's performance is compared to waste by-product numbers. A _______________ comprises of the producer, wholesaler(s), and retailer(s) acting as a unified system. vertical marketing system horizontal marketing system straight marketing system straight-line marketing system The mechanism for effective conflict management that takes place when each side sends a person or group to meet with its counterpart to resolve a conflict is called what? Mediation Arbitration Communication Diplomacy ⅡTrue or False A value network is an individual firm that sources, augments, and delivers its offerings to the consumer. (F) Delegation means maintaining control over how and to whom the products are sold by a firm to its customers. (F) A zero-level channel (also called direct-marketing channel) consists of a manufacturer selling directly to the final customer. (T) Today, there is a minor push to expand bandwidth so that telephone and cable networks can effectively carry data, voice, video, and text. (F) A push strategy involves the manufacturer using its sales force and trade promotion money to induce intermediaries to carry, promote, and sell the product to end users. (T) In trying to establish objectives and constraints to channel decisions, perishable products require more direct marketing. (T) Exclusive distribution means severely limiting the number of intermediaries through exclusive dealing arrangements. (T) Distributors' territorial rights define the distributors' territories and the terms the producer will follow to set up a monopoly in an area. (F) Companies that are successful in switching their customers to lower cost channels, assuming no loss of sales or deterioration in service quality, will gain a channel advantage. (T) Training and motivating channel members is important for the success of a managed distribution channel. (T) Distribution programming is defined as avoiding a planned, professionally managed, vertical marketing system that meets the needs of both the manufacturer and distributors. (F) An established marketing channel remains intact for the entire product life cycle to ensure standardization. (F) An administered VMS coordinates successive stages of production and distribution through the size and power of one of the members. (T) Multichannel marketing occurs when a number of competitors use a single marketing channel to reach one or more customer segments. (F) Exclusive arrangements are legal even if they substantially lessen competition or tend to create a monopoly. (F) Ⅲ Essay Questions In terms of channel functions and flows, describe the difference between a forward flow of activity and a backward flow of activity. There are four types of companies that make up the information industry. Give an example of each type of company that makes up the information industry.? Define the five roles of firms in the channel systems of their industry.? Ⅳ Marketing Spotlight-Wal-MartThe first Wal-Mart was opened in Rogers, Arkansas, in 1962. Founder Sam Walton envisioned a store offering high-quality products and service for low prices. Today, Wal-Mart employs more than 1.2 million employees and operates 3,118 retail locations in America, and another 1,071 overseas. These outlets range from its Wal-Mart discount stores, Sam’s Club warehouse stores, Wal-Mart Super centers combination discount and grocery stores, Neighborhood Markets mid-sized grocery stores, to ASDA grocery stores in the U.K. Wal-Mart is currently the largest retailer in the United States. A Logistics Leader Several factors contributed to Wal-Mart’s enormous success in the American retail market. Its low prices, vast selection, and superior service all keep the customers coming. One of Wal-Mart’s biggest strengths – its logistics – appears only behind the scenes. As the biggest retailer in the United States, Wal-Mart’s marketing logistics demands are considerable. The company must coordinate with its more than 85,000 suppliers, manage inventory in its warehouses, and bring that inventory to its 20-feet-tall retail shelves. To streamline these tasks, Wal-Mart set up a "hub-and-spoke" network of distribution centers. Centers are spaced across the country so that no store location is more than a day’s drive away. Its ability to effectively manage such a vast network prompted one business writer to declare Wal-Mart "the king of store logistics." Sam Walton was something of a visionary when it came to logistics. He had the foresight to realize, as early as the 1960s, that the company growth he was striving for required the installation of advanced information systems to manage the volumes of merchandise. In 1966, Walton hired the top graduate of an IBM school and assigned him the task of computerizing Wal-Mart’s operations. As a result of this forward-looking move, Wal-Mart grew to be, in the words of another business writer, "the icon of just-in-time inventory control and sophisticated logistics – the ultimate user of information as a competitive advantage." By 1998, Wal-Mart’s computer database was second only to the Pentagon’s in terms of capacity. Global Expansion As Wal-Mart expands into global markets in South America, Asia, and Europe, it relies heavily on its logistics prowess to help it move quickly and support the rapid growth it seeks. At first, the company’s system for entering foreign markets needed improvement: Wal-Mart encountered difficulty in certain markets due to the lack of historical data, inexperienced management, and the monumental task of buying and stocking 50,000 to 70,000 items for each international super center. When Wal-Mart opened its first super centers in Brazil before the 1995 holiday season, managers did not anticipate sales quadruple those of comparable U.S. stores and could not keep up. By 1997, the company had made rapid progress. Wal-Mart was opening locations at 20 percent less cost, developing local distribution centers to manage the huge volumes of goods going to the stores, and tailoring the stores to meet local tastes. For example, the company added fresh pasta shops to Wal-Marts in Brazil after customer data revealed heavy pasta consumption in that market. Wal-Mart Moves to the Internet Wal-Mart capitalized on its logistics expertise when it took to the Internet with Walmart.com in 1996. The Web site borrowed resources like inventory, distribution, and information systems from its parent company. After Wal-Mart expanded the site in 1999, Walmart.com was initially criticized for its sluggishness and poor customer service. In 2000, the company partnered with a Silicon Valley venture capital firm, made Walmart.com a separate company, and retooled the Web site. Among the features added were in-store returns for items purchased on the site and more reliable delivery. In June 2001, Walmart.com debuted its Internet service provider, which offered unlimited Web access for less than $10 a month. Wal-Mart’s dedication to logistics was evidenced by its promotion of H. Lee Scott, the former head of its logistics division, to CEO in 2000. Scott was famous for taking a logistics approach to Wal-Mart stores when he was took charge of merchandising for the company in 1995. He developed a system for giving current merchandise enough shelf space, limited price markdowns, and increased direct-to-store shipments from suppliers. Scott takes over the company at a time of unparalleled success. Wal-Mart’s annual sales in 2000 reached $191 billion, a figure that earned the company the number two spot in the Fortune 500 ranking. The company’s commitment to logistics played a major role in bringing it to that point, and will doubtless continue to be a large part of the Wal-Mart Way in years to come.
(Sources: Wendy Zellner. "Someday, Lee, This May All Be Yours." Business Week, November 15, 1999; "Will WalMart.com Get It Right This Time?" Business Week, November 6, 2000; John Huey. "Discounting Dynamo: Sam Walton." Time Magazine, December 7, 1998; James Moore. "The Death of Competition." Fortune, April 15, 1999; Wendy Zellner. "Wal-Mart Spoken Here." Business Week, June 23, 1997; "Walmart.com to Start Internet Service." Associated Press, June 2, 2001; Mark Veverka. "Will Wal-Mart.com Steamroll the E-tailers." Barron’s, October 23, 2000). Wal-Mart has been highly successful in the development of logistical systems. What types of developments are critical to success in this arena? As the largest retailer in the world, Wal-Mart has seen only modest success overseas. Why is this, given their vaunted marketing abilities? What changes would you make so that Wal-Mart can remain #1?Chapter 17 Managing Retailing, Wholesaling, and Market Logistics ⅠMultiple Choice Which of the following major types of retailers would be described as offering several product lines-typically clothing, home furnishings, and household goods- with each line operated as a separate department managed by specialist buyers or merchandisers? Specialty store Department store Convenience store Superstore There are four levels of service that are offered by retailers. Which of the following is not one of those levels of service?Regulated service Self-serviceLimited serviceFull serviceWhich of the following is not one of the four major categories of non-store retailing that is part of the retail industry?Direct selling Direct marketingAutomatic vendingAll of the above are categoriesA ________________ is a wholesaler-sponsored group of independent retailers engaged in bulk buying and common merchandising.corporate chain consumer cooperativevoluntary chainfranchise organizationThere are a number of characteristics that are distinguished by franchises. Which of the following is not one of those characteristics?The franchiser owns a trade or service mark and licenses it to a franchisee in return for royalty payments The franchisee does not have to pay for the franchiser's name.The franchisee pays for the right to be part of the system.The franchiser provides its franchisees with a system for doing business.Stores are using _____________________ to measure a product's handling costs (receiving, moving to storage, paperwork, selecting, checking, loading, and space cost) from the time it reaches their warehouse until a customer buys it in their retail store.direct product profitability indirect product profitabilitydirect service profitabilityindirect service profitabilityRetailers must decide on the services mix to offer customers. Which of the following is not an example of the services mix?Pre-purchase services, like mail orders Post-purchase services, like gift wrappingAncillary services, like check cashingAll of the above make up the services mixWhich of the following would be an example of a high-price, low-volume type of retailer?$.50 hamburger shop $15.00 CD store$20,000 watch store$15,000 car dealerRetailers can locate their stores in a number of locations. Which of the locations would be described as large suburban malls containing 40 to 200 stores?General Business District Regional Shopping CentersCommunity Shopping CentersA location within a larger storeThere are a number of trends that are impacting the retail industry. Which of the following is not one of those trends being seen in the industry?The return of five-and-dime stores New retail forms and combinationsGrowth of intertype competitionGrowth of giant retailersOne of the trends in retailing is the concept of selling an experience, not just goods. Which of the following would be an example of selling an experience and not just goods?Baseball-themed atmosphere at a store near a pro baseball stadium Racing-themed interactive atmosphere at a restaurantInteractive games at a children's shoe storeAll of the above are examples of selling an experienceWholesalers are used when they are more efficient in performing one or more of the following functions except which one?Buying and assortment building WarehousingAtmospherics in a storeBulk breaking_________________ do not take title to goods, and perform only a few functions. They earn a commission from their efforts.Merchant wholesalers Brokers and AgentsLimited Service WholesalersFull Service WholesalersWhich of the following is not one of the marketing decisions that a wholesaler needs to be concerned with while marketing their products?Human Resources at the retailer Target MarketPrice DecisionPromotion Decision_____________________ is involved with procuring the right inputs (raw materials, components, and capital equipment); converting them efficiently into finished products; and dispatching them to the final destinations.Procurement Production supervisionShipping supervisionSupply chain management ⅡTrue or False Retailing includes all the activities involved in selling goods or services directly to businesses for business use. (F) A supermarket is a relatively small store located near residential areas, open long hours seven days a week, and carrying a limited line of high-turnover convenience products at slightly higher prices. (F)Electronic shopping that occurs on the Internet is considered non-store retailing. (T)A consumer cooperative is a free-form corporation that combines several diversified retailing lines and forms under central ownership, along with some integration of distribution and management. (F)One of the reasons why there is potential franchiser growth and franchisee earnings is because of the expansion abroad. (T)Today, supermarkets have opened larger stores, carry a larger number and variety of items, and upgraded facilities. (T)Manufacturer's offer the nation's supermarkets between 150 and 250 new items each week, of which store buyers reject over 70 percent. (T)The element of atmosphere is the consideration by a retailer to make sure the air quality in a store is healthy enough for their target market shoppers. (F)Most retailers fall into the high-markup, low-volume group or the low-markup, high-volume group of pricing. (T)EDLP could lead to lower advertising costs, greater pricing stability, a stronger image of fairness and reliability, and lower retail profits. (F)One of the choices of a store location is the central business district. This general business district is the suburban area of a city. (F)One of the trends in retailing is that stores are getting out of the intertype competition of different types of stores competing for the same customers. (F)Retailers are now adding fun and community in order to compete with other stores and online retailers by selling an experience. (T)Wholesaling includes all the activities involved in selling goods and services to the ultimate consumers. (F)A merchant wholesaler does not take title of goods, and performs only a few functions. (F)Ⅲ Essay Questions Describe the Wheel-of-Retailing hypothesis associated with the retail industry. What is the difference between the product assortment breadth and depth decision that retailers make?Wholesalers differ from retailers in a number of ways. State three ways in which they differ from retailers. Chapter 18 Managing Integrated Marketing Communications ⅠMultiple Choice Which one of the following is not one of the five major modes of the marketing communications mix? Advertising Commercials Sales Promotions Personal Selling ___________________ is when receivers will hear what fits into their belief systems. They will often add things that are not there or do not notice other things that are there. Selective distortion Selective attention Selective retention Selective retaliation Which of the following is not one of the steps in developing effective communication? Identify target audience Determine objectives Select channels All of the above are steps One way to research the specific content of a product's image is to conduct semantic differential research. Which of the following is not one of the steps of that process? Develop a set of relevant dimensions Average the results Administer the instrument to 100 percent of the target market Check on the image variance Which of the following is not part of the hierarchy-of-effects model used to highlight the consumer's involvement with a product's promotional communication? Awareness Word-of-mouth Liking Purchase Ideally when a company designs a message, the message should gain attention, hold interest, arouse desire, and elicit what? Action Humor Emotions Learning _______________ appeals are those that claim the product will produce certain benefits. Emotional Moral Humorous Rational When selecting a spokesperson, credibility is an important consideration. Each of the following is a factor that underscores credibility except which one? Expertise Trustworthiness Reverence Likeability The ___________ imply(ies) that communicators can use their good image to reduce some negative feelings toward a brand but in the process might lose some esteem with the audience. principle of congress principle of congruity principles of marketing principles of management There are a number of personal communication channels. Which of the following would not be considered one of the personal communication channels? Advertising channels Social channels Advocate channels Expert channels Companies need to take several steps to stimulate personal influence channels to work on their behalf. Which of the following is not one of those steps? Identify influential individuals and companies and devote extra effort to them. Develop word-of-mouth referral channels to build business. Use influential or believable people in testimonial advertising. All of the above would stimulate the channel. ______________ marketing is a form of word-of-mouth; it involves passing on company-developed products, services, or information from Internet user to Internet user. Internet Server Viral Link A _______________ is a person who connects two or more cliques without belonging to either clique. bridge liaison span connection There are a number of techniques used by companies to budget for marketing communications. Which of the following is not one of the ways used to budget for marketing communications? Luck of the draw method Affordable method Percentage of sales method Objective-and-task method There are three distinct benefits to using sales promotions. Which of the following is not one of the benefits? Communication Incentive Invitation All of the above are benefits ⅡTrue or False The marketing communications mix consists of five major modes of communication. They are advertising, sales promotion, public relations and publicity, personal selling, and commercials. (F) The four communication functions of the communication model are encoding, decoding, recoding, and feedback. (F) Selective retention means that people will retain in long-term memory only a small fraction of the messages that reach them. (T) Image is the set of beliefs, ideas, and impressions a person is unable to gather about an object. (F) One way to measure the specific content of a product's image is by conducting research using the semantic differential method. (T) The hierarchy-of-effects model is made up of awareness, knowledge, liking, preference, conviction, and purchase. (T) Emotional appeals attempt to stir up negative or positive emotions that will motivate a consumer for the purchase of a product. (T) Moral appeals are directed to the audience's sense of what is right and proper, like selecting a certain color of a chair because it is a proper match for the living room. (F) Messages that are delivered by attractive or popular sources achieve higher attention and recall. (T) Personal communication channels involve two or more persons communicating directly with each other face-to-face, person-to-audience, over the telephone, or through e-mail. (T) Social channels consist of independent experts making statements to target buyers. (F) One way a company can stimulate personal influence channels to work on their behalf is to develop advertising that has low "conversation value." (F) Atmospheres are "packaged environments" that create or reinforce the buyers' leanings toward product purchase. (T) A liaison is a person who belongs to one clique and is linked to a person in another clique. (F) One of the characteristics of direct marketing is that it cannot and should not be customized. Standardization is the best way to deliver direct marketing. (F) Ⅲ Essay Questions A target audience may not receive the intended message delivered by a company for three reasons. Describe the reasons. State the steps in developing effective communication.? What is the difference between a liaison and a bridge between different cliques?? Ⅳ Marketing Spotlight- Mountain Dew Code Red When Pepsi-Cola’s total volume increased a mere tenth of a percent in 2000, the company quickly sought to boost sales by launching the first Mountain Dew line extension since Diet Mountain Dew debuted in 1988. A cross-functional team comprised of 35 people from seven Pepsi departments worked on developing the new product. The team considered several possibilities: Dew H20 bottled water; Dew Unplugged decaf Mountain Dew; a Mountain Dew sports drink; and a new Dew flavor. The company settled on creating a new flavor, and within 10 months, instead of the usual 2 years it takes Pepsi to develop a new product, launched a bright red cherry-flavored beverage called Mountain Dew Code Red. For the launch, Pepsi used radio and outdoor advertising, as well as sampling and in-store merchandising. To build buzz for Code Red, the company sent free samples to 4,000 select consumers, such as hip-hop producer Jermaine Dupri and radio DJ Funkmaster Flex. The drink was heavily sampled at marquee sporting events such as the NCAA Final Four and ESPN’s 2001 winter X games. Pepsi also developed a special Web site for the brand that featured an interactive game called "Mission: Code Red 2." Additionally, Pepsi marketed Code Red to urban consumers. When research revealed that urban and ethnic focus groups preferred the name Code Red to Wild Cherry Mountain Dew, Pepsi stuck with the former. The company also developed an ad campaign titled "Crack the Code" that used graffiti-art design elements and an urban setting. Code Red attracted a rabid fan base. According to A.C. Nielsen, Code Red tested in the top five percent of all new product concepts ever tested among teens. The drink was also popular in the high-tech community. Two programmers who discovered a computer virus named it "Code Red" after the beverage they used to maintain late hours in front of their monitors. The virus eventually infected more than 700,000 computers. Pepsi sent the pair five cases of Code Red in appreciation for the free publicity. Within two months of its May 2000 launch, Code Red was the fifth-best-selling soft drink sold at convenience stores and gas stations (Mountain Dew is number one). This signaled tremendous success, considering that the drink came in only two single-serve sizes and the muted marketing campaign did not yet include television spots. Though the drink was launched midway through the second quarter of 2000, Pepsi credited the Code Red launch with helping to boost net sales 20 percent to $962 million that quarter. One bottler exclaimed "It’s flown off the shelves for us."
(Sources: www.mountaindew.com; Hillary Chura. "Pepsi-Cola’s Code Red is White Hot." Advertising Age, August 27, 2001, p. 1; Maureen Tkacik and Betsy McKay. "Code Red: PepsiCo’s Guerilla Conquest." Wall Street Journal, August 17, 2001, p. B5; Abigail Klingbeil. "The Making of a Brand." Gannett News Service, June 29, 2001.) Discuss the basis of Code Red marketing success, especially the integrated marketing implications? Evaluate the IMC concepts embodied in the overall success of the product. Consider the implementation aspects of what Pepsi did with Code Red. Given the results achieved, based on the original narrow market segmentation (likely age 17-25) that grew with the media interactivity, what can we learn about the use of IMC?Chapter 19 Managing Advertising, Sales Promotion, Public Relations ⅠMultiple Choice There are five major decisions in developing an advertising program. These are known as the five "Ms." Which of the following is not one of the five "Ms"? Mission Morale Money Media There are a number of objectives of advertising that need to be considered. Which of the following is not one of the objectives of advertising?Entertainment advertising Informative advertisingPersuasive advertisingReminder advertisingThere are five specific factors to consider when setting the advertising budget. Which of the following is not one of those considerations?Stage in the product life cycle Market share and consumer baseCompetition and clutterAll of the above are considerationsAds that make claims that are simple exaggerations not intended to be believed are described as what?Funny CheaperPufferyOutlandish_______________ is the number of different persons or households exposed to a particular media schedule at least once during a specific time period.Frequency ReachImpactAudience_________________ indicates how much brand holdover occurs independent of the level of advertising.Habitual behavior Carryover Holdover Matriculation There are three major methods of pre-testing advertising. Which one is described as testing using equipment to measure physiological reactions such as heartbeat, blood pressure, and pupil dilation?Portfolio tests Copy testingConsumer feedback methodLaboratory testsWhich of the following is an example of a promotional device that would be used to entice consumers to purchase a good?Trade show Sales conventionsCash refund offersContests for sales repsA __________________________ is a program providing rewards related to the consumers' frequency and intensity in purchasing the company's products or services.free trial frequency programtie-in promotionproduct warranty__________________ is buying a greater quantity of goods during a deal period than a company can sell during that deal period in order to make the deal effect last longer.Forward buying Backward buyingFuture buyingUnrealistic buyingIn deciding to use a particular incentive, marketers have several factors to consider. Which of the following is not one of those factors?Size of the incentive Conditions of the incentiveDuration of the promotionAll of the above are considerationsA good public relations department does a number functions. They include press relations, product publicity, corporate communications, lobbying, and which one of the following?Creating ads Creating marketing plansCounselingHuman resource auditsWhich of the following is not considered one of the major tools used by marketers in marketing public relations?Publications Package labelsSpeechesPublic service announcementsThe easiest measure of MPR effectiveness is the number of exposures carried by the media. A better measure is the change in each of the following except which one?Advertising costs Product awarenessComprehensionAttitudeWhich of the following is not one of the major types of telemarketing used by companies today?Telesales TelecoverageTeleprospectingAll of the above are types of telemarketingⅡTrue or False Advertising is any paid form of personal presentation and promotion of ideas, goods, or services by an identified sponsor. (F) Advertisers go through four steps to develop a creative strategy. They are message generation, message evaluation, message execution, and message rewrite. (F)In preparing an ad campaign, the advertiser usually prepares a copy statement describing the objective, content, support, and tone of the desired ad. (T)A "happy" commercial placed within a depressing television show is more likely to be effective than a downbeat commercial in the same place. (F)Frequency is the number of times within the specified time period that an average person or household is exposed to the message. (T)Media planners make their choice among media categories by considering variables such as target audience media habits. (T)The difference between an advertorial and an infomercial is that an infomercial is delivered by the television media channel. (T)One of the ways not to measure audience size is by determining the effective ad-exposed audience. (F)Carryover refers to the rate at which the effect of an advertising expenditure wears out with the passage of time. (T)Portfolio tests ask consumers to view or listen to a portfolio of advertisements, taking as much time as they need. They are then asked to recall what they saw. (T)Personal selling consists of a diverse collection of incentive tools, mostly short-term, designed to stimulate quicker or greater purchase of particular products or services by consumers or the trade. (F)Backward buying is buying a greater quantity during a deal period than they can sell during the deal period in order to get the price break effect for a little longer. (F)Consumer surveys can be conducted to learn how many recall the promotion, what they thought of it, how many took advantage of it, and how the promotion affected subsequent brand choice behavior. (T)Direct marketers seek a measurable response, typically a customer order. This is sometimes called indirect-order marketing. (F)Kiosk marketing involves selling goods or marketing products and information using free-standing computers, carts, and stands located in Oriental restaurants. (F) Ⅲ Essay QuestionsDescribe the parts of a creative brief that is used to create advertising.? Describe how an advertiser chooses the media to be used for an advertisement.? What are the reasons a manufacturer would award money to the trade?? Chapter 22 Managing the Total Marketing Effort ⅠMultiple Choice Each of the following is a current trend in company organizations except for which one? Reengineering Retooling Empowering Focusing The evolution of the marketing department must go through numerous stages. Which of the following is not one of those stages?Integrated Marketing Department Simple Sales DepartmentSeparate Marketing DepartmentModern Marketing DepartmentWhich of the following is the most common form of a marketing organization consisting of functional specialists reporting to a marketing vice president, who coordinates their activities?Modern Marketing Department Simple Sales DepartmentSeparate Marketing DepartmentFunctional Organization____________________ means empowering the company's district offices or local offices to operate more like franchises.Delegating FranchisingBranchisingDistrictizingProduct and brand managers have numerous tasks they are responsible for in the organization. Which of the following is not one of those tasks?Developing a long-range and competitive strategy for the product. Develop the human resource legal responses to claims.Prepare an annual marketing plan and sales forecast.Initiate product improvements to meet changing market needs.There are several disadvantages to the product or brand management organization. Which of the following is not one of the disadvantages of using a product or brand management organization?Product and brand managers are relied on for their expertise. Product and specifically brand managers are not given enough authority to carry out their responsibilities.Product and brand managers become experts in their product area but rarely achieve functional expertise.The product management system often turns out to be costly.There are five steps to making the product management system work better for the organization. Which of the following is one of those steps?Clearly delineate the limits of the product manager's role and responsibility. Set up a formal process that forces to the top all conflict-of-interest situations between product management and functional line management.Establish a system for measuring results consistent with the product manager's responsibilities.All of the above are stepsWhich of the following types of product teams is described as a product manager and two specialized product assistants, one who takes care of marketing research and the other, marketing communications?Vertical product team Horizontal product teamTriangular product teamStandardized product teamIn determining a corporate-divisional organization, the questions center around what marketing services and activities should be retained at company headquarters. Which one of the following is described as a company lacking a corporate marketing staff?Moderate corporate marketing No corporate marketingStrong corporate marketingLimited corporate marketingIn ___________________ companies, the company goes out of its way to satisfy the customer. This occurs no matter what the cost.marketing-driven manufacturing-drivenmanager-drivenmechanic-drivenThere are many steps that a CEO can take to create a market- and customer-driven company. Which of the following is not one of those steps?Appoint a senior marketing officer and marketing task force. Get outside help and guidance.Change the company's reward measurement and system.All of the above are steps.________________ is the process that turns marketing plans into action assignments and ensures that such assignments are executed in a manner that accomplishes the plan's stated objectives.Marketing creation Marketing orientationMarketing implementationMarketing organizationA customer-performance scorecard records how well the company is doing year after year on each of the following customer-based measurements except which one?Percentage of new customers to average number of customers. Percentage of new advertisements to the average number of advertisements.Percentage of lost customers to average number of customers.Percentage of customers who say they would repurchase the product.Which of the following costs would describe the type of costs that are common costs whose allocation to the marketing entities is highly arbitrary?Nontraceable costs Traceable costsDirect costsSunk costsIf an institution, such as Clemson University, wanted to measure their advertising efficiency, which of the following statistics would they not want to measure to determine if they are efficient?Advertising cost per thousand of the target buyers reached by a media vehicle Percentage of the audience who noted, saw or associated and read most of each print ad Consumer opinions on the ad's content and effectiveness All of the above are good measurements ⅡTrue or False The process of encouraging and empowering personnel to produce more ideas and take more initiative is called reengineering. (F) When small companies typically appoint a sales vice president who manages a sales force and also does some selling, they are said to be in the separate marketing department stage of the evolution of the marketing department. (F) The most common form of marketing organization consists of functional specialists reporting to a marketing vice president, who coordinates their activities. (T) Branchising means empowering the company's employees to operate more like franchisees of an organization. (T) One of the tasks that a product and brand manager has is to develop a long-range and competitive strategy for the product. (F) A horizontal product team consists of a product manager and several specialists from marketing and other functions. (T) A matrix organization would seem desirable in a multi-product, multi-market company. (T) In marketing-driven companies, the main objective is that everything is done to ensure smooth production and low costs of production. (F) One of the tasks that a CEO can take to create a market- and customer-focused company is to install a modern marketing planning system. (T) Evaluation skills are the skills needed to monitor, track, and evaluate marketing actions. (T) Annual-plan control aims to ensure that the company achieves the hiring, retention, and training goals established for marketing. (F) To improve the return on net worth, the company must decrease its ratio of net profits to its assets or decrease the ratio of its assets to its net worth. (F) Three types of costs need to be distinguished when examining direct costs and full costs. They are direct costs, traceable common costs, and nontraceable common costs. (T) One way to manage the sales force efficiency is to examine the advertising cost per thousand of the target buyers reached by a media vehicle. (F) One way to manage the advertising efficiency is to examine the average sales call time per contact used by the sales force. (F) Ⅲ Essay Questions Describe the parts of a creative brief that is used to create advertising. Describe how an advertiser chooses the media to be used for an advertisement. What are the reasons a manufacturer would award money to the trade?? Ⅳ Marketing Spotlight-Socially Conscious Marketers (Avon, British Airways, Tesco) Cause Related Marketing (CRM) can be defined as a strategic positioning and marketing tool which links a company or brand to a relevant social cause or issue, for mutual benefit. Companies can choose to partner with a charity or volunteer organization and donate money and resources, or they can work to remedy a problem directly. The cause benefits from the resources, money, and attention added by the company’s involvement, and the company benefits from improved consumer perceptions and increased purchasing. According to Dominic Cadbury, the chairman of Cadbury Schweppes, “CRM is an effective way of enhancing corporate image, differentiating products and increasing both sales and loyalty.” For these reasons, cause related marketing is currently very much in vogue among corporations. Here we highlight three companies with long-standing commitments to CRM: Avon - Breast Cancer Awareness Crusade Avon’s Breast Cancer Awareness Crusade, started in 1993, is a cause marketing campaign committed to funding care for victims of breast cancer and finding a cure. The company relies heavily on its direct sales force of more than 550,000 U.S. representatives, who forego sales commissions on Avon Crusade products. The net proceeds from sales of all Avon Crusades products, totaling more than $45 million since 1993, are donated to the cause. Other fundraising efforts include the Avon Breast Cancer 3-Days, which are three-day endurance walks held in nine major cities across the country, and through sales of other products like the collectible Breast Cancer Crusade Bear. Since they began in 1998, the three-day walks have raised a total of $63 million for the Crusade. Avon is the largest corporate sponsor of the breast cancer cause, with more than $110 million raised in the U.S. since the program was started. The money is donated to national cancer centers, medical centers, service organizations, and non-profit health programs nationwide. Some of Avon’s partner organizations include the YWCA, the National Alliance of Breast Cancer Organizations, and the National Cancer Institute. British Airways - Change for Good British Airways partnered with UNICEF and developed a cause marketing campaign called Change for Good. Travelers on British Airways flights are encouraged to donate leftover foreign currency from their travels. Since coins in particular are difficult to exchange at banks and currency exchanges, the program targets loose change. The scheme is simple: passengers deposit their surplus currency in envelopes provided by British Airways, which collects the deposits and donates them directly to UNICEF. British Airways advertises its program during an in-flight video, on the backs of seat cards, and with in-flight announcements. The company also developed a television advertisement that featured a child thanking British Airways for its contribution to UNICEF. Since Change for Good can be directly targeted to passengers and can produce immediate results, it does not require extensive advertising or promotion and therefore is one of the most cost-efficient cause marketing campaigns Tesco – Computers for Schools British supermarket chain Tesco’s Computers for Schools program, started in 1992, is the best-known cause related marketing campaign in the U.K., with awareness levels near 50 percent. Customers receive vouchers from Tesco for every ￡10 spent, which they can donate to the school of their choosing. The chosen school exchanges the vouchers for new computer equipment. Parent-teacher associations and school governors joined to maximize voucher collection, which further enhances the community involvement in the program. To strengthen the connection between the Computers for Schools program and the Tesco brand, the company integrated the program into advertising for its in-store “Every little bit helps” campaign, which sought to enhance the customer experience with such improvements as wider aisles, baby changing facilities, and shorter checkout lines. Tesco capitalized on the link between its brand and the Computers for Schools program in 1998, when the company began selling computer hardware. Since the program began, Tesco Computers for Schools has delivered almost $90 million worth of computer equipment to schools in the U.K.
(Sources:www.avoncrusade.com; Hamish Pringle and Marjorie Thompson. Brand Spirit. John Wiley, New York: 1999; “The Prime Minister Launches the 10th Tesco Computers for Schools Scheme.” M2 Presswire, January 26, 2001). Do you believe that Cause Related Marketing (CRM) is a valid marketing management tool for the firms in this Spotlight? Why? Are there downside issues as well as upside benefits to CRM activities?? Would you assume that there is as much CRM in the U.S. as in Europe? What is the basis for your belief? What are your views?