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Chapter 2 –Examining the Infrastructure for Marketing Management

True/False Questions

1. Outsourcing means a company decides what is critical to their business and they then hire others to

do the less critical, or core-mission oriented tasks. True (moderate)

2. A core competency is fairly easy for competitors to replicate in a free marketplace. False (moderate)

3. Good mission statements focus on a limited number of goals and define the company’s major

competitive spheres. True (easy)

4. A strategic business unit (SBU) has its own set of competitors, distinct from other SBUs in the

company. True (moderate)

5. Acquiring a supplier is a growth strategy that is achieved through integration. True (moderate)

6. Microsoft is a huge firm which nonetheless has not lost its ultracompetitive edge. The text attributes

this to Microsoft’s corporate culture. True (easy)

7. Scenario analysis uses case studies of actual, historical company events and changes the assumptions

related to the outcomes to improve future responses. False (moderate)

8. A proper SWOT analysis will include a market opportunity analysis, or MOA. True (moderate)

9. The SW portion of the SWOT analysis is where the external environments of the business are closely

examined. False (moderate)

10. Strategy guru Michael Porter’s three “generic” strategies are: cost leadership, diversification, and

focus. False (moderate)

11. Part of strategic program implementation is estimating the costs for the desired action. True

(difficult)

12. The first steps in managing implementation of a strategy are to break down every program into is

component activities and identify the resources required and their associate costs. True (moderate)

13. The late strategy guru Peter Drucker said that for businesses, “doing the things right” was more

important than “doing the right thing.” False (moderate)

14. A marketing information system consists of the people, equipment, and procedures to gather, sort,

analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision

makers. True (moderate) 15. Marketing information systems are developed from internal company records, marketing

intelligence, and marketing research. True (easy)

16. The systematic collection, analysis, and reporting of data and findings relevant to specific marketing

situation is called marketing research. True (moderate)


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17. Small companies can engage in marketing research in a number of creative and affordable ways,

including using the Internet or taking advantage of local university students who need business

projects. True (easy)

18. Typically, companies budget about 11–12 percent of company sales for marketing research. False

(moderate)

19. The last step in marketing research is developing the research plan. False (difficult)

20. Data published by the government and data purchased from outside suppliers can improve the quality

of a company's marketing intelligence efforts. True (moderate)

21. Primary data is generally available more quickly and at a lower cost than secondary data. False

(moderate)

22. Primary data are data that were gathered for another purpose and already exist somewhere. False

(moderate)

23. Because it is hard to track and verify, behavioral data are less reliable in understanding customer

behavior than are customer statements of their behavior. False (moderate)

24. To obtain a representative sample, a probability sample of the population should be drawn. True

(difficult)

25. If speed is of the essence for a marketing research project, the best contact methods are either online

or telephone interviewing. True (easy)

26. The disadvantages of using the personal interview method to conduct marketing research are that it is

the most expensive method and it is subject to bias and distortion. True (moderate)

Multiple Choice Questions

27. In the first half the 20th century, Ford Motor Company owned rubber plantations in Brazil to supply

itself with raw materials for tire making. At some point, Ford began to buy all tires from outside

vendors, and put more energy and focus on making the vehicles themselves. This is an example of

_________.

a. the value chain

b. outsourcing (moderate)

c. fulfillment management

d. portfolio balancing

e. inbound logistics

28. A university with growing budget concerns decided to lay off all groundskeepers and hire the work

out to a large, local landscaping firm. That firm hired most of the laid off workers. Most campus

visitors and students were never aware of the change. This is an example of _________.

a. inbound logistics

b. the value chain

c. outsourcing (moderate)

d. open markets

e. portfolio management


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29. Bernardo Sampson has a restaurant in northeastern China that makes the best Chinese dumplings,

according to his well-traveled customers. According to Bernardo, the key is controlling the dumpling

filling preparation process and making his own dumpling wrapper from an old family recipe. Other

inputs to the business, such as kitchen equipment, and in some ways, employees, are less important

to creating the best dumplings. The dumpling filling preparation and homemade dumpling wrapper

could be considered Bernardo’s _________.

a. outsourcing genius

b. less critical resources

c. holistic marketing effort

d. core competency (moderate)

e. outbound logistics

30. Which of the following is NOT a characteristic of a core competency?

a. It has applications in a wide variety of markets.

b. It is a source of competitive advantage.

c. It makes a significant contribution to perceived customer benefits.

d. It is difficult for competitors to imitate.

e. It can easily be outsourced. (easy)

31. According to Figure 2.3 Company Marketing System in the text, “Factors Influencing Company

Marketing Strategy,” the center of the all marketing activity should be __________.

a. publics

b. suppliers

c. stakeholders

d. target customers (moderate) e. the marketing control system

32. Strategic planning goes on at all of the following organizational levels, EXCEPT:

a. corporate level.

b. retail level. (moderate)

c. division level.

d. business unit level.

e. product level.

33. Blind Bill makes custom window treatments and sells exclusively to commercial homebuilders. CEO

William Learned III often follows site finish managers around onsite to see how the customers view

the products and to strengthen the partnership he feels he has with them. Learned’s goal is to

improve the company’s offerings. In the holistic marketing framework, this type of activity would be

called _________.

a. core competency strengthening

b. value exploration

c. value creation (difficult)

d. value fulfillment

e. value delivery

34. The late business guru Peter Drucker asked all of the following questions about defining an

organization’s mission, EXCEPT:

a. What should the business be?

b. What will the business be?

c. What is the business?


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d. Who is the customer?

e. What has the business been? (moderate)

35. A good mission statement can provide all of the following to employees, EXCEPT:

a. a shared sense of purpose.

b. a shared sense of company profits. (moderate)

c. a shared sense of direction.

d. a guide that helps geographically distant employees work independently and collectively.

e. a shared sense of opportunity.

36. Good mission statements can define the company’s major competitive spheres. The vertical sphere

includes __________.

a. the range of products and applications the company will supply

b. the type of market or customers the company will serve

c. the number of channel levels from raw material to final product (difficult)

d. the range of regions or countries in which a company operates

e. the range of core competencies the company will master and leverage

37. Which of the following is NOT normally a part of the Strategic Planning Process?

a. Corporate planning.

b. Business unit planning.

c. Division planning.

d. Retail planning. (moderate)

e. Product planning.

38. What is the proper order for the Strategic Control Process?

a. measure results diagnose results take corrective action (moderate)

b. diagnose results measure results take corrective action

c. organize results implement results

d. corporate panning division planning business planning retail planning

e. planning implementing controlling

39. Blind Bill makes custom window treatments and sells exclusively to commercial homebuilders.

Which of the following is NOT true of Blind Bill?

a. Homebuilders are its customer group.

b. Its market segment is well defined.

c. Window coverage is its customer need.

d. It limits its sales to metal or vinyl miniblinds. (easy)

e. The various window treatment products are its technology.

40. According to Levitt, market definitions that are business-oriented rather than product-oriented are

superior. Such definitions include each of the following, EXCEPT:

a. customer needs.

b. geographical constraints. (moderate)

c. customer groups.

d. technology.

e. relevant target markets.

41. Carmaker Toyota has the Scion division that is aimed at providing entry-priced vehicles to new

members of the Toyota “family.” Scion has independent budgeting, management direction, and

profit/loss responsibility within the larger company. Scion is __________.


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a. only sold on the west coast

b. only one market segment for Toyota, because the Camry is so popular

c. a strategic business unit (moderate)

d. a competitor for Lexus vehicles

e. horizontally integrated with the parent company

42. Perhaps the least intuitive part of assessing growth opportunities for the company is __________.

a. planning new businesses

b. downsizing and/or terminating older businesses (moderate)

c. deciding whether to integrate by buying a supplier or a customer

d. choosing an intensive growth strategy

e. employing a market penetration approach

43. Attempting to gain market share with current products in current markets is called _________.

a. forward integration

b. horizontal integration

c. concentric diversification

d. market development

e. market penetration (moderate)

44. Russ Clark, a NAPA auto parts dealer, bought out a competitor’s store. This is an example of

_________.

a. market penetration

b. backward integration

c. horizontal diversification

d. conglomerate diversification

e. horizontal integration (moderate)

45. Many years ago, French utilities management company Vivendi decided to buy a portfolio of

entertainment businesses that included theme parks and rights to a music catalog. The purpose of the

acquisition was to grow company revenues and profits. This was an example of __________.

a. integrative diversification

b. horizontal integrative growth

c. conglomerate diversification (difficult)

d. market development

e. concentric diversification

46. Tired of high prices and poor service, and convinced she can do better, funeral home owner Macy

Mbacke-Abdullah decides to purchase the wholesaler that she has been buying caskets from. This is

an example of __________.

a. backward integration (moderate)

b. forward integration

c. diversified integration

d. horizontal integration

e. concentric integration

47. A company’s __________ consists of its structures, policies, and corporate culture.

a. headquarters

b. organization (moderate)

c. sales position

d. industry


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e. scenario

48. __________ has been defined as the shared experiences, stories, beliefs, and norms that characterize

an organization.

a. Corporate structure

b. Corporate history

c. Corporate strategy

d. Corporate culture (moderate)

e. Corporate organization

49. Which of the following is NOT considered to be a part of an organization’s culture?

a. Experiences.

b. Stories.

c. Beliefs.

d. Salaries. (easy)

e. Norms.

50. Which of the following is NOT one of Hamel’s recommendations for crafting corporate strategy?

a. Management should encourage fresh ideas.

b. Employees with youthful perspectives should participate.

c. Those who are new to the industry should be asked to contribute.

d. The company should not forget to include ideas from those who do not work close to

headquarters.

e. Senior management should make and hand down strategy. (moderate)

51. Which of the following would NOT be considered a part of scenario analysis for General Motors?

a. The company adopts the most probably scenario and watches for signs that confirm it.

b. The CEO asks for plausible representations of the company’s future to be considered.

c. Company analysts present last quarter's earnings for the board. (difficult)

d. Managers consider how they will deal with a declaration of bankruptcy by a major supplier.

e. Unit chiefs map out strategies in case a strike disrupts production during upcoming contract

negotiations with labor.

52. Which of the following is in the correct order, as a part of the Business Unit Strategic-Planning

Process?

a. mission SWOT strategy formulation implementation (moderate)

b. external analysis internal analysis program formulation mission statement

c. program formulation strategy formulation goal formulation

d. program formulation strategy formulation feedback control

e. mission SWOT program formulation strategy formulation

53. SWOT refers to __________.

a. semper wit omnicus terapis

b. internal and external environmental analysis (moderate)

c. strategy and goal formulation

d. the control and feedback loop in the strategic planning process

e. implementing strategy across the organization

54. SWOT refers to __________.

a. semper wit omnicus terapis

b. strategy with operations talent


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c. strategic watching of technology

d. strengths, weaknesses, opportunities, threats (easy)

e. strategy formulation, willingness to negotiate, operational excellence, temperament suitable to

succeed

55. Marketing opportunity analysis (MOA) involves asking each of the following questions, EXCEPT:

a. Does the company have access to the resources needed to deliver customer benefits?

b. Can the benefits involved in the opportunity be articulated to the target customer?

c. Can the company deliver the benefits at least as well as competitors? (difficult)

d. Will the financial rate of return meet or exceed the company’s threshold for investment?

e. Can the target market(s) be located and reached with cost-effective media and trade channels?

56. A(n) __________ is a challenge posed by an unfavorable external trend or development that would

lead, in the absence of defensive marketing action, to lower sales or profit.

a. environmental threat (moderate)

b. SWOT team

c. outside sales investment

d. marketing opportunity

e. organizational weakness

57. Which of the following is NOT part of effective goals?

a. Goals must be consistent.

b. Goals must be realistic.

c. Goals must be arranged hierarchically, from most to least important.

d. Goals must be available to all organizational stakeholders. (difficult)

e. Goals must be stated quantitatively whenever possible.

58. Apple Computer designs its computers and other technological products, such as the popular iPod so

that they stand out in the marketplace from equally-effective, but more boring-looking competitors.

This is an example of using the ________ strategy, as proposed by Porter.

a. cost leadership

b. differentiation (moderate)

c. horizontal integration

d. focus

e. all-in-one

59. Costco has higher sales per square foot than powerful rival Sam’s Club (a Wal-Mart company).

Costco have achieved this through a deep understanding of its highly targeted customer group. This

is an example of using Porter’s __________ strategy.

a. cost leadership

b. differentiation

c. horizontal integration

d. focus (moderate) e. price and performance

60. According to McKinsey & Company, successful strategy involves seven “S” elements. Which of the

following is included among the “hardware” needed to successfully implement strategy?

a. Style.

b. Staff.

c. Systems. (moderate)

d. Shared values.


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e. Skills.

61. Which of the following statements is in line with Peter Drucker’s notion of effectiveness?

a. Do the important thing.

b. Do the right thing. (moderate)

c. Do things right.

d. Do unto others as you would have them do unto you.

e. Do the best thing.

62. A marketing information system (MIS) consists of __________.

a. the set of procedures and sources used by managers to obtain everyday information and relevant

developments in the marketing environment

b. the systematic design, collection, analysis, and reporting of data and findings relevant to a

specific marketing situation

c. an organized collection of comprehensive data about individual customers, prospects, or suspects

that is currently accessible for marketing purposes

d. the people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute

needed, timely, and accurate information to marketing decision makers (difficult)

e. the coordination of the collection of data, systems, tools, and techniques with supporting

software and hardware by which an organization gathers and interprets information from the

business environment

63. When Molly’s parents retired, they decided they wanted to travel. They found an ideal job that

allows them to travel for free, but the only catch is they have to stay at Holiday Inns. During each

stay, they test all the amenities offered by the motel and evaluate each. The evaluation forms are sent

to the motel headquarters where it becomes part of the motel’s __________ system.

a. sales reporting

b. marketing research

c. experiential research data

d. accountability information system (AIS)

e. marketing intelligence (moderate)

64. Which of the following is NOT a step that might be used to improve the quality of a firm’s marketing

intelligence?

a. Setting up a consumer panel.

b. Collecting competitive intelligence by buying a competitor’s products.

c. Watching how the stock market reacts to interest rate changes. (moderate)

d. Motivating distributors to pass along important intelligence from the marketplace.

e. Purchasing information from outside suppliers.

65. The systematic design, collection, analysis, and reporting of data and findings relevant to a specific

marketing situation facing the company is termed __________.

a. the sales reporting system

b. marketing research (moderate)

c. marketing intelligence

d. the sales force

e. top management

66. Small companies can engage in marketing research in a number of creative and inexpensive ways,

including __________.

a. setting up their own Web site


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b. hiring an independent marketing research firm

c. buying information from database companies like A.C. Nielsen

d. using its own internal marketing research department

e. using an online information service such as the Internet (moderate)

67. The second step in the marketing research process is the __________.

a. development of the research plan (moderate)

b. definition of the problem and research objectives

c. survey of stakeholders to determine if problems exist

d. decision regarding the research tools and target group

e. collection of the available sources for needed information

68. All of the following are steps in the marketing research process EXCEPT:

a. define the problem and research objectives.

b. develop the research plan.

c. collect the information.

d. compare data to government sources. (moderate)

e. present the findings.

69. The step in the marketing research process that includes determining who will be sampled is to

__________.

a. define the problem and research objectives

b. develop the research plan (moderate)

c. collect the information

d. make a decision based on the project outcomes

e. present the findings

70. Which of the following is NOT a consideration when preparing a sampling plan?

a. Who is to be surveyed?

b. How many are to be surveyed?

c. How will the sample respondents be paid? (moderate)

d. Should a probability sample be used or not?

e. How should respondents be chosen?

71. Rita Jenkins, president of a local Chamber of Commerce, had difficulty getting members to assist in

running the organization. She felt it was because of lack of commitment to the Chamber. Her vice-

president felt it was due to having too many meetings. The organization’s secretary felt it was

because there were several other professional organizations to which the members also belonged. If

Rita wants to do research to determine the real reason why members do not want to run for office,

she should begin by __________.

a. determining the optimum number of meetings

b. evaluating the advantages the Chamber offers over other similar organizations

c. defining the problem (difficult)

d. developing the marketing research plan that she would employ

e. holding focus groups of members of similar organizations to determine whether the problems the

Chamber is facing are universal or local

72. After working for a roofing contractor for ten years, Cameron Gomez finally established his own

operation. Unfortunately, Cameron’s first six months have been disappointing. He decided to

conduct a marketing research study to gather preliminary data to shed light on the nature of the

problem and suggest some new ideas. He needs to conduct __________ research.


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a. exploratory (difficult)

b. causal

c. secondary

d. descriptive

e. observational

73. Which of the following is a type of causal research project that would be used by a company that

publishes custom memory books that are used as fundraisers for churches, colleges, and civic

groups?

a. A study to determine the types of fundraising most commonly used by church groups.

b. A survey of previous customers to see if they are interested in a new edition.

c. A study to see if more people buy the custom memory book if the cover has a picture

relating to the group selling it rather than just a generic cover. (difficult)

d. A study to determine the price range for an average-sized cookbook.

e. An industrial study of what similar publishing companies are doing to better serve their

customers.

74. __________ data are data that were gathered for another purpose and already exist.

a. Primary

b. Descriptive

c. Causal

d. Secondary (moderate)

e. Observational

75. Which of the following is NOT typical of a focus group?

a. Approximately, 14-18 participants spend a few hours together. (moderate) b. A skilled moderator guides the discussion.

c. The discussion centers on a product, service, or marketing entity.

d. They can gauge consumer reaction to product features or design.

e. They can give quick consumer feedback to new ideas.

76. Which of the following is an example of how ACE Crafts, a manufacturer of acrylic paints used in

arts and crafts, would use observational research to gather primary data?

a. Survey current users to find out ways the paint could be improved.

b. Watch how members of a class learning to paint unfinished crafts use the paint. (moderate)

c. Ask users of other brands of paint to list the most important attributes for acrylic paint.

d. Conduct a focus group of current users to determine how ACE is positioned in their minds when

it is compared to similar products.

e. Include a mail survey with each bottle of paint sold.

77. A(n) __________ is a gathering of 6 to 10 people who spend a few hours with a skilled moderator to

discuss a product, service, or other marketing entity.

a. focus group (moderate)

b. intermediary team

c. agent group

d. consolidated group

e. grouped dataset

78. __________ are best suited for descriptive research such as learning about people’s knowledge,

beliefs, preferences, and satisfaction, and measuring these magnitudes in the general population.

a. Observational research methods


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b. Focus groups

c. Surveys (moderate)

d. In-depth interviews

e. Qualitative research methods

79. A catalog retailer wants to know more about the buying habits of people who order more than once a

month from its pages. The catalog retailer will use its database to examine __________ data.

a. observation

b. survey

c. primary

d. experimental

e. behavioral (moderate)

80. The manufacturer of Babylok brand sewing sergers wants to know the effect rebates have on sales. It

plans on dividing its retailers into three regions. One group will offer consumers who buy a Babylok

serger a $25 cash rebate. One will offer buyers of the machine $50 worth of “free” machine

accessory parts. A third region will offer buyers a $40 store credit. The results of this market research

will provide Babylok with __________ data.

a. observation

b. survey

c. primary

d. experimental (difficult)

e. descriptive

81. A(n) __________ consists of a set of questions presented to respondents for their answers.

a. questionnaire (moderate)

b. focus group

c. data set

d. database

e. observation

82. __________ pre-specify all of the possible answers, so they are easy to interpret and tabulate.

a. Open-end questions

b. Closed-end questions (moderate)

c. Galvanometers

d. Audiometers

e. Samplings

83. __________ allow respondents to answer in their own words.

a. Open-end questions (moderate)

b. Closed-end questions

c. Galvanometers

d. Audiometers

e. Samplings

84. Which of the following statements about probability sampling is true?

a. Probability sampling is the least expensive type of sampling to use.

b. Probability sampling is the simplest and least difficult type of sampling to generate.

c. Researchers who use probability sampling can choose from a judgment or quota sample.

d. Probability sampling does not allow researchers to measure sampling error.


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e. Researchers who use probability sampling can calculate confidence limits for sampling

error. (difficult)

85. The contact method that minimizes interviewer bias is the __________.

a. mail (moderate)

b. telephone

c. intercept interview

d. focus group

e. personal interview

86. The best contact method to use to determine how many people saw the ad for a new Chery auto

model that ran last night during the 6:00 p.m. news would be the __________.

a. mail

a. Internet

b. telephone (moderate)

c. focus group

d. personal interview

87. If reducing the cost of data gathering is the most important criterion for a marketing research project,

the preferred contact method to avoid is the __________.

a. intercept interview

b. telephone

c. focus group

d. personal interview (moderate)

e. mail

88. Which is typically the most expensive step of marketing research process?

a. Problem definition.

b. Developing the research plan.

c. Information collection. (moderate)

d. Information analysis.

e. Questionnaire design.

89. Which step is typically the most prone to error in the marketing research process?

a. Problem definition.

b. Developing the research plan.

c. Information collection. (moderate)

d. Information analysis.

e. Questionnaire design.

90. The last step in the marketing research process is to __________.

a. create a database using the research results

b. determine the best solution to the problem

c. present the findings (moderate) pp.

d. analyze the information

e. remove all jargon and technical language from the report

Essay Questions


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91. Harley-Davidson Motor Company’s mission statement reads:

“We fulfill dreams through the experience of motorcycling, by providing to motorcyclists and to the

general public an expanding line of motorcycles and branded products and services in selected market

segments.”

In a short essay, compare Harley’s mission statement against Drucker’s classic questions.

Answer: 1) What is our business? Selling branded motorcycles and related products and services that

help customers fulfill their dreams. 2) Who is our customer? Motorcyclists and the general public,

with some reference to market segmentation (motorcyclists who prefer U.S.–made machines, for

example). 3) What is of value to the customer? The status and mystique of the brand and what the

brand and the products themselves do for them—fulfilling dreams by providing an experience. 4)

What will our business be? The statement allows Harley to grow in some directions but not in others.

For example, unless it changes its mission statement, Harley could not get into making aircraft

engines or four-wheeled vehicles. They have developed non-cruiser-style bikes in the last decade

(Beull sportbikes), and they could enter other motorcycle segments (large scooters, for example)

without violating their current mission. 5) What should our business be? The declaration that Harley

is what it is seems to be a perfect answer to this question. If the company wanted to be something

else, they would probably make changes in the mission statement before they came out with products

or services that were not in harmony with the current statement.

(moderate)

92. Joe Leung is a machinist and owns a small factory in Changchun, Jilin Province. Leung makes parts

for a Chinese auto manufacturer and does a little work for his friend’s auto repair shop. Leung hires

you to help him explore ways in which he can grow his business. In a short essay, suggest at least

four different strategic ways Leung could grow his business.

Answer: Using Ansoff’s Product-Market Expansion Grid gives four ways to grow: 1) market

penetration, in which Leung would sell more of the same machined products to his two current

customers. 2) market development, in which Leung would seek other types of customers to buy the

same products he now only sells to the Chinese auto manufactory and to his friend. Maybe other local

auto manufacturers need machining work done for auto maintenance. 3) product development, in

which Leung would create different (but probably related) products or services and attempt to sell

them to his current customers. Perhaps he could get lease higher-quality equipment that allows him to

shape harder alloys in addition to his steel work. 4) Diversification, in which Leung could develop

new products and services and seek markets for them outside his current customer base. For example,

he might start a short-haul trucking company.

Leung could also grow through integration. There are three major types of integration: 1) Leung

could purchase a controlling stake in one of his suppliers, such as a small lubricant company. This is

called backward integration. 2) Leung could integrate forward by buying out his friend’s repair shop.

3) Leung’ final integration option is called horizontal integration, in which he buys other shops like

his own to expand his sales.

(moderate)

75. Perform a limited SWOT analysis for the Wal-Mart company.

Answer:

Strengths 1. Wal-Mart is the largest retailer in the world by sales volume.

2. Wal-Mart is focused on cutting costs.


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3. Wal-Mart has plenty of cash to acquire the technology and businesses it

needs.

4. Wal-Mart’s laser-like focus on offering the lowest prices.

5. Nearly one-half of Americans go to Wal-Mart each month.

Weaknesses 1. Wal-Mart’s stock price has been relatively flat for the last five

years, even though the company’s revenues are still growing.

2. Potential arrogance on the part of Wal-Mart leadership (see threats).

Opportunities 1. Wal-Mart has only just scratched the surface of global markets.

2. Although Wal-Mart is already the largest grocery retailer in the United

States, they have plenty of room to grow that business, either through

acquisition or development of their own chain of a stand-alone grocery

chain.

3. Wal-Mart could go upscale with a separate branding strategy.

4. Wal-Mart could acquire profitable rival Costco.

Threats 1. Lawsuits aimed at Wal-Mart’s hiring practices, environmental

record, and foreign sourcing.

2. Growing discomfort with Wal-Mart’s history of putting small,

local competitors out of business with their aggressive pricing.

3. Potential boycotts or additional bad publicity.

(moderate) ** NOTE: This question could ask for the student to do a limited SWOT analysis

for any company, if there is any concern that the student does not have enough information

about Wal-Mart **

93. Walnut Hill is a company that sells everything you could possibly need to make your own candles.

Before its owner expands into other craft areas, she wants to do some marketing research. She has

heard of too many companies that have gone out of business as a result of inappropriate or ill-timed

expansion. In a short essay, suggest ways that she can obtain market research to help her reduce

uncertainty regarding an expansion.

Answer: She could use the services of a marketing research firm that will develop and conduct a research

project to her specifications. Less expensive methods mentioned in the chapter for obtaining the

marketing research she needs include: 1) hiring students or professors to perform the research, 2)

using the Internet as a source of information, and 3) checking out what her competitors are doing.

(easy)

94. Suppose you are the brand manager for Wild Thing!, an unscented deodorant shampoo aimed at the

so-called “Millennial Generation” consumer. Sales of your product have been declining. Exploratory

research suggests your brand is not price competitive. In a short essay, outline a research plan that

would provide you with the information you need to decide what to do. Then, explain why you

selected those specific methods instead of others.

Answer: Students’ answers to this question will vary considerably. All answers should consider what research

approach will be used, the type of research instrument(s) if appropriate, a sampling plan, and the

appropriate contact method(s). In this instance the survey approach might be appropriate with closed-

end questions. The higher quality answers will provide sample questions. At a minimum, the answer

should contain the process from Figure 3.1

(moderate)


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Mini-Cases

Mini-Case 2-1 Scuba-Doobie-Doo is owned by Filamena Barbozo, who wishes to create a full service SCUBA website.

She plans to include scuba chat rooms for visitors, and ever-changing photo and story gallery where

visitors can post, read, and view the adventures of others and of professional SCUBA writers. She plans

to have an online store with all possible SCUBA equipment available for purchase. She plans to sell

advertising to SCUBA companies. All told, Filamena wants Scuba-Doobie-Doo to be a one-stop SCUBA

source for enthusiasts.

95. Refer to Mini-Case 2-1. Tired of high prices and poor service, and convinced she can do better, S-D-

D’s owner Filamena Barbozo decides to purchase the company that provides and maintains the

servers for the Web site. This is an example of __________. a. backward integration (moderate)

b. forward integration

c. diversified integration

d. horizontal integration

e. concentric integration

96. Ms. Barbozo, S-D-D’s owner, wants to concern herself and her employees with efficiency, above all

other concerns. Which of the following statements is most closely associated with efficiency?

a. Do the important thing.

b. Do the right thing.

c. Do things right. (moderate) d. Do unto others as you would have them do unto you.

e. Do the best thing.

Mini-Case 2-2

Amy Wong owns Mothers’, a Chinese restaurant in Chinatown in San Francisco. So far business has been

very good. The restaurant features very delicious soups that use recipes Amy bought from her extended

family in Guangzhou. The kitchen crew and head chef are all talented Chinese immigrants. The Chinese

residents in San Francisco cannot get over how true the food is to the hometown versions, and many

comment that the food actually makes them homesick.

97. Refer to Mini-Case 2-2. Amy Wong decides that her new inn selling porridge will also feature foods

made with authentic old-world recipes and made with talented Chinese hands. These two business

plan ingredients could be considered Amy’s __________.

a. value chain derivatives.

b. core competencies. (moderate)

c. distinctive advantages.

d. competitive positioning.

e. SBU.

98. Refer to Mini-Case 2-2. Amy figures her main customers for the porridge inn will be the same

customers that regularly eat at her Mothers’. This means Amy is using the __________ strategy to

grow his business.

a. product-development (easy)

b. market development

c. product research


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d. market penetration

e. product integration

Mini-Case 2-3

The owners of the 22,000 funeral homes in U.S are experiencing tremendous changes in their industry.

Fewer families today are having bodies embalmed and displayed at a service. Of those who choose burial,

many are shopping at retail and mail order casket dealers, not at the funeral home as, used to be the

custom. Another change is the fact that many people want personal touches and quirky tributes in their

funeral services. A growing number are choosing cremation rather than burial. Today almost a quarter of

the nation’s 2.3 million annual deceased are cremated. Funeral homes typically charge only about one-

third the amount for cremation that they do for a burial. It has become imperative that funeral directors

invest time and money in learning about their potential consumers.

99. Refer to Mini-Case 3-1. Which of the following is an example of a primary data source for research

about consumer attitudes toward the funeral industry?

a. A 1999 study by the Federal Trade Commission on how well mortuaries were disclosing their price

structures.

b. A survey of funeral directors.

c. A report published by the National Funeral Directors Association.

d. Focus group research involving people who have experienced recent bereavement. (moderate)

e. An Internet site for people who feel funerals are over-priced.

100. Refer to Mini-Case 3-1. A funeral director who watches and records data on how consumers select a

casket would be engaged in ________ research.

a. observational (moderate)

b. experimental

c. survey-based

d. behavioral

e. database

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