Chapter 4—Winning Markets Through Strategic Planning,
Implementation, and Control
True/False Questions
1. Most large companies consist of four organizational levels - the corporate, division, subdivision, and
product levels. False (moderate) p. 58
2. Defining the corporate mission is the first step to corporate strategy. True (moderate) p. 59
3. A clear, thoughtful mission statement provides competitors with a shared sense of purpose, direction,
and opportunity. False (moderate) p. 60
4. A strategic business unit (SBU) has its own set of competitors. True (moderate) p. 61
5. “Dogs” in the BCG Matrix are weak market share businesses in low growth markets. True (easy)
p. 62
6. SBUs that are plotted in the high-market-attractiveness/strong-business-strength cell indicate
opportunities for divestiture or harvest activities. False (moderate) p. 63
7. Critiques of portfolio models, such as the BCG or GE model, say they may lead a firm to
overemphasize market share growth, or lead to neglecting current businesses. True (moderate) p. 64
8. SWOT stands for the analysis of Strengths, Weaknesses, Organizations, and Threats. False
(moderate) p. 65
9. A key to analyzing a market opportunity is to ask the question, “Can the company deliver the benefits
better than any actual or potential competitor?” True (easy) p. 66
10. Porter’s three generic strategies are: overall cost leadership, differentiation, and focus. True
(moderate) p. 67
11. McKinsey&Company’s 7-S framework includes 7 different strategies for corporations to succeed.
False (moderate) p. 68
12. According to Peter Drucker, it is more important to “do things right” than it is to “do the right thing.”
False (moderate) p. 69
13. The marketing process consists of analyzing marketing opportunities, researching and selecting target
markets, designing marketing strategies, planning marketing programs, and organizing,
implementing, and controlling the marketing effort. True (moderate) p. 70
14. The first section of the marketing plan is the current marketing situation. False (moderate) p. 71
15. A company does not need to update its marketing plan once it is a good one and everyone has signed
off on it. False (moderate) p. 72
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16. The brand management structure for organizing the marketing department can lead to conflict and
frustration when product managers are not given enough authority to carry out their responsibilities
effectively. True (easy) p. 73
17. In a market management organization, companies organize to understand and deal with individual
customers rather than with the mass market. False (difficult) p. 74
18. Research has shown that companies with a customer focus were nearly 7 percent more productive
than their competition. True (moderate) p. 75
19. Measuring profitability by product, customer, and territory is called the Efficiency Control type of
marketing control. False (moderate) p. 77
20. A customer performance scorecard records how well the company is doing on such measures as new
customers, lost customers, and target market awareness. True (moderate) p. 79
Multiple Choice Questions
21. Which is not an important organizational level in large corporations?
a.) corporate
b.) division
c.) subdivision (moderate) p. 58
d.) business unit
e.) product
22. Within large firms, the _________ level is responsible to establish a plan covering the allocation of
funds to each business unit within its area.
a.) corporate
b.) headquarters
c.) division (difficult) p. 58
d.) business unit
e.) product
23. The _________ marketing plan lays out the target markets and the value proposition that will be
offered, based on analysis of the best market opportunities.
a.) strategic (moderate) p. 58
b.) division
c.) tactical
d.) guerilla
e.) corporate
24. Which of the following is not considered a part of corporate planning?
a.) defining the corporate mission
b.) establishing strategic business units
c.) assigning resources to each unit
d.) measuring stakeholder response to marketing programs (moderate) p. 59
e.) planning new businesses, downsizing, or terminating older businesses
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25. The classic Drucker questions, “What is our business?” and “Who is our customer?” are part of which
corporate planning activity?
a.) defining the corporate mission (easy) p. 59
b.) establishing strategic business units
c.) assigning resources to each unit
d.) measuring stakeholder response to marketing programs
e.) planning new businesses, downsizing, or terminating older
26. Bill wants to create a mission statement for his breakfast restaurant, which is located near the outlet of
a busy New York subway station. Which question is not on Peter Drucker’s list of classic question
that help businesses define their missions?
a.) What is our business?
b.) Who is our customer?
c.) What is the value to the customer?
d.) What should our business be?
e.) Why do we do what we do? (moderate) pp. 59-60
27. The _____________ refers to the number of channel levels from raw materials to final product and
distribution in which a company will participate.
a.) industry scope
b.) products and applications scope
c.) competence scope
d.) vertical scope (moderate) p. 60
e.) geographical scope
28. “Mission Brands strives to be the best provider of outdoor-related consumer products in the American
southwest” is a mission statement that focuses mainly on Mission’s _________________.
a.) industry scope
b.) vertical scope
c.) geometrical scope
d.) vertical scope
e.) geographical scope (moderate) p. 60
29. A strategic business unit that has the highest relative market share and is in a low growth rate market
is termed a _________________.
a.) cash cow (easy) p. 61-62
b.) hard heart
c.) falling star
d.) half moon
e.) four-leaf clover
30. The purpose of identifying the company’s strategic business units is to _________________.
a.) help managers keep the company mission separated from each product line
b.) develop separate strategies and assign appropriate funding to the entire business portfolio
(moderate) p. 61
c.) use the company’s stars to fund the dogs
d.) get question marks to grow into cash cows
e.) separate the business lines for accounting purposes
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31. If a _______ SBU is dragging down the company’s profits, selling the SBU may be the prescribed
strategy.
a.) star
b.) starchild
c.) dog (moderate) p. 62
d.) cash sow
e.) cash cow
32. The ____________ strategy is appropriate when there is a need for short-term cash flow, regardless
of long-term effect.
a.) building
b.) holding
c.) passing along
d.) harvesting (moderate) p. 62
e.) divesting
33. The ___________ strategy is appropriate for strong cash cows if they are to continue to yield large
positive cash flows.
a.) build
b.) hold (difficult) p. 62
c.) milk
d.) harvest
e.) divest
34. The GE matrix is divided into __________ cells.
a.) two
b.) four
c.) nine (easy) p. 63
d.) sixteen
e.) twenty-five
35. The GE Business Portfolio model advises that if a strategic business unit in the weak-businessstrength/low-market-attractiveness cell, the corporation should _________________.
a.) protect position
b.) invest to build
c.) build selectively
d.) divest (moderate) p. 63
e.) protect and refocus
36. One of the reasons the portfolio process should be used with caution is that the process
_________________.
a.) could help managers think more strategically
b.) might improve communication between business units and the corporation
c.) helps identify important issues
d.) may lead to too much emphasis on market share growth (moderate) p. 64
e.) strengthens investment in more promising SBUs
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37. Cannondale is a master bike-making company that sought to expand its sales by leveraging their
talents with the use of aluminum frame tubing. They ended up developing and marketing a line of
innovative aluminum-framed motocross bikes. This is an example of which type of diversification?
a.) new products with technological synergies, marketed to different customers (difficult) p. 64
b.) new products with marketing synergies, marketed to different customers
c.) new products that are technologically unrelated to current ones, marketed to current customers
d.) new and unrelated products, marketed to different customers
e.) more of the same products, marketed to the same customers
38. Cannondale Corporation introduced a line of motocross bikes that shared the aluminum frame skills
of the company. The new motocross products have been well received by the critics, but have sold
poorly. This failure in the marketplace may be due to a lack of ___________ to aid in Cannondale’s
expansion attempt.
a.) technological synergies
b.) marketing synergies (difficult) p. 64
c.) technologically related production capabilities
d.) related products in the company’s lines
e.) more of the same products
39. When Vivendi, then a water and utilities management company, began to buy entertainment
companies, such as Universal, this was an example of which kind of diversification growth strategy?
a.) new products with technological synergies, marketed to different customers
b.) new products with marketing synergies, marketed to different customers
c.) new products that are technologically unrelated to current ones, marketed to current customers
d.) new and unrelated products, marketed to different customers (moderate) p. 65
e.) more of the same products, marketed to the same customers
40. External environment analysis includes monitoring all the following except _________________.
a.) the political-legal influences
b.) demographics in the relevant marketplace
c.) competitors
d.) suppliers
e.) company strengths in marketing and finance (moderate) p. 65
41. A company’s competitors are considered a part of its
a.) macroenvironmental forces
b.) strength and weaknesses analysis
c.) microenvironment actors (moderate) p. 65
d.) 4Cs planning
e.) internal environment
42. Which of the following comes earliest in the Business Strategic-Planning Process?
a.) goal formulation
b.) SWOT analysis (difficult) p. 65
c.) strategy formulation
d.) program formulation
e.) feedback and control function
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43. A ____________ is an area of buyer need in which the company can perform profitably.
a.) marketing threat
b.) marketing analysis
c.) marketing goal
d.) marketing opportunity (moderate) p. 66
e.) marketing benefit
44. A marketing opportunity analysis (MOA) asks all of the following question except:
a.) Can the benefits be articulated to the target market?
b.) Can the media be used to define the relevant consumer? (moderate) p. 66
c.) Can the target market be located and effectively reached?
d.) Can the company deliver better than competitors?
e.) Will the rate of return satisfy company objectives?
45. Once a SWOT has been performed, the company must set goals and consider trade-offs. Which of the
following is a trade-off that must be considered in goal formulation?
a.) how to arrange the goals hierarchically
b.) how to correctly state the goal quantitatively and qualitatively
c.) whether the goal can be realistically carried out
d.) making sure the goal is consistent
e.) balancing long- and short-term goals (moderate) p. 66
46. Wal-Mart focuses like a laser on the constant lowering of prices as their main attraction to consumers.
This is an example of which of Porter’s generic strategies?
a.) overall cost leadership (moderate) p. 67
b.) differentiation
c.) leadership in service
d.) focus
e.) leadership in quality
47. If a firm desires to attain technological leadership as one of its strategic goals, it will need to
formulate a program that includes all of the following except _________________.
a.) strengthening their R&D efforts
b.) gathering technological intelligence
c.) developing leading edge products
d.) using advertising to communicate the company’s mission (moderate) p. 67
e.) training a technical sales force
48. In the McKinsey&Company 7-S framework for business success, how employees think and behave is
termed the _________ S.
a.) strategy
b.) structure
c.) style (moderate) p. 68
d.) skills
e.) staff
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49. In the McKinsey 7-S framework for business success, there are “hardware” and “software” parts of
the model. Which of the following represents part of the “hardware”?
a.) systems (easy) p. 68
b.) style
c.) skills
d.) staff
e.) shared values
50. Peter Drucker notes that a company might lose some efficiency, but gain some effectiveness, if it
chooses to _________________.
a.) right things that are wrong
b.) do the right thing (difficult) p. 69
c.) risk being wrong
d.) do things right
e.) do unto others
51. Which sequence allows for marketing to happen throughout the value creation and delivery process?
a.) make the product - sell the product
b.) sell the product - make the product
c.) choose the value - provide the value - communicate the value (moderate) p. 69
d.) communicate the value - provide the value - value the outcome
e.) make and sell the product - make a profit
52. The problem with the traditional approach to the value-delivery process—that the firm makes
something and then sells it—is that _________________.
a.) marketing starts too early in this process
b.) defining value is too difficult in this model
c.) the make-it/sell-it model causes capacity problems when correctly implemented
d.) marketing is only involved in the second half of the process (moderate) p. 70
e.) (there is not a problem with this view)
53. The __________ consists of analyzing opportunities, researching and selecting target markets,
designing strategies, planning programs, and organizing and implementing these efforts.
a.) marketing plan
b.) marketing effort
c.) marketing process (moderate) p. 70
d.) marketing analysis
e.) marketing delivery
54. The first section in a marketing plan is the ______ section.
a.) current marketing situation
b.) executive summary (easy) p. 71
c.) opportunity and issue analysis
d.) objectives
e.) financial projections
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55. The final step of the marketing process is _________________.
a.) managing the marketing efforts (moderate) pp. 70-71
b.) planning marketing programs
c.) analyzing market opportunities
d.) developing marketing strategies
e.) researching the consumer segments
56. The Action Programs section of the marketing plan should answer all of the following except:
a.) What will be done?
b.) When will it be done?
c.) Which segment will it focus on? (moderate) p. 72
d.) Who will do it?
e.) How will progress be measured?
57. Managing the marketing process is made more difficult by the proliferation of media options for
consumers. This adds to the phenomenon of _________________.
a.) globalization
b.) deregulation
c.) technological advances
d.) telecommunications advances
e.) market fragmentation (difficult) p. 72
58. Which is not a part of the brand manager’s job?
a.) product planning and competitive strategy
b.) annual marketing plans and sales forecasts
c.) working with ad agencies
d.) stimulating support among sales reps
e.) initiating product attitude change (moderate) p. 73
59. Which of the following is an advantage of the brand management organization system?
a.) It leads to unclear authority lines, sparking creative solutions.
b.) It allows the manager to concentrate their efforts on only one product or line. (difficult)
p. 73
c.) Brand managers are given all the authority and resources they need to do their jobs well.
d.) Brand managers are free to focus on market share rather than deal with customer relationships.
e.) Managers are allowed to become specialists in the brand rather than becoming functional
specialists.
60. A _________ supervises several market managers, who in turn draw upon functional services as
needed.
a.) markets manager (moderate) p. 74
b.) customer manager
c.) lead manager
d.) lead market manager
e.) brand asset management team
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61. All of the following are alternatives to the brand management model except _________________.
a.) switch to product teams
b.) use a brand asset management team (BAMT)
c.) assign two or more products to each remaining manager
d.) introduce category management
e.) divest the brand to other strategic business units (moderate) p. 74
62. Alfrey International ships about 20 percent of its production to firms in Guadalajara, Mexico.
Internally, “Jefe” Mitchell takes care of all the necessary paperwork for this process. This is an
example of a(n) ___________ global organization.
a.) export department (moderate) p. 75
b.) import division
c.) international division
d.) worldwide operations
e.) world-is-our-oyster opportunity
63. Which of the following is not something a CEO must do to create a market- and customer-focused
company?
a.) convince senior management to be more customer-focused
b.) get outside help and guidance
c.) shift resources from other functional divisions (moderate) p. 75
d.) install a modern marketing planning system
e.) establish an annual marketing excellence recognition program
64. Bonoma has identified four sets of skills for implementing marketing programs. Which of the
answers below is not a part of Bonoma’s implementation skills?
a.) the ability to determine what went wrong
b.) the ability to determine whether problems occurred in the marketing function, the marketing
program, or the marketing policy
c.) the ability to budget resources, organize effectively, and motivate others
d.) the ability to challenge the status quo (moderate) p. 76
e.) the ability to evaluate results
65. Strategy addresses the what and _______ of marketing activities.
a.) who
b.) why (moderate) p. 76
c.) where
d.) when
e.) how
66. The purpose of strategic control is to examine whether the company is pursuing its best opportunities
with respect to markets, products, and channels. Which of the approaches below is a part of this?
a.) sales analysis
b.) profitability by territory
c.) sales to expense ratios
d.) marketing excellence review (moderate) p. 77
e.) efficiency of sales force
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67. The purpose of ___________ control is to examine whether the planned results are being achieved.
a.) profitability
b.) efficiency
c.) strategic
d.) implementation
e.) annual-plan (moderate) p. 77
68. Rae-Dawn wants to see how her company is doing relative to the competition. Which marketing
metric should she use?
a.) sales analysis
b.) market-share analysis (moderate) p. 78
c.) marketing expense-to-sales analysis
d.) financial analysis
e.) market-based scorecard analysis
69. A ___________ records how well the company is doing on such customer-based measures as new
customers, dissatisfied customers, lost customers, target market awareness and preference, and
relative quality issues.
a.) sales analysis scorecard
b.) market-share performance scorecard
c.) customer performance scorecard (moderate) p. 79
d.) financial analysis scorecard
e.) one-to-one consumer scorecard
70. Which of the following is not examined in a marketing audit?
a.) the macro- and task environments
b.) marketing strategy
c.) firm profitability (moderate) p. 80
d.) marketing productivity
e.) the 4 Ps
Essay Questions
a.) Blanche du Bois has been charged with heading up a committee to create a strategic plan for the
School of Communication at a Midwestern state university. She knows she must begin by
defining the corporate mission. Give her advice on what questions need to be asked by the
committee, then answered in the mission statement.
(difficult) p. 59-60
72. Draw, label, and explain the Boston Consulting Group (BCG) growth-share matrix. What are the
benefits and possible drawbacks of using portfolio models?
Answer:
Everyone should be able to get the basic model down on paper, and the better students will see how it
works and why. The axes should be labeled (vertical = market growth rate; horizontal = relative
market share). SBUs that are dogs should be carefully considered, particularly if they are a drag on
profits. They are candidates for divestiture or harvest. Question marks require cash from other sources
and it needs to be decided whether this cash-in is going to grow the SBU into a more promising star.
Stars are in growing industries and have the highest market share in their competitive group. Since
growth won’t last forever, the hope is that a star will maintain its market share until shifting into a
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cash cow. Stars need resources to keep up with growth. Cash cows have great value because they
provide cash to help out in other parts of the portfolio.
Benefits of portfolio approaches? They help management think strategically, and to better
understand the economics of a portfolio of businesses; They also allow for improvement of plan
quality, and better communication between corporate and SBU leaders; They help identify weaker
and stronger units, thus allowing better decisions about resource allocation.
The cautions? They may lead to an overemphasis on market share and growth, versus watching over
current businesses and profits. They are easy to manipulate based on the inputs. They do not allow for
measurement of synergies between the business units.
(moderate) pp. 61-64
73. Fatima sees a number of unfilled needs in her hometown and would like to start a business to take
care of those needs at a profit. Help Fatima, by explaining the questions she should ask about each of
her ideas to determine the attractiveness and success probability, before risking her investment. Use
the Market Opportunity Analysis model.
Answer:
The five questions in the MOA help determine the attractiveness and the probability of success for
business ideas or opportunities. In Fatima’s case, the questions should be:
a.) Can the benefits involved in Fatima’s ideas be adequately explained to her defined target market?
b.) Can Fatima’s target markets be located and reached using cost-effective media and trade
channels?
c.) Does Fatima have access to the capabilities and resources she will need to deliver the desired
customer benefits?
d.) Can Fatima deliver the benefits better than existing or potential competitors?
e.) Will the financial return be better than other opportunities for Fatima’s intended investment?
(easy) p. 66
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Mini-Cases
Mini-Case 4-1
A group of frustrated students is writing up a business plan to create a second bowling alley to compete
with a run-down, busy, existing competitor in their small college town. The existing alleys are old, the
building smelly, and the wait is always a long one. The students want to have clean restrooms, a bar (of
course), a food area, a place for a dj/live music and dancing, as well as the traditional lanes for bowling.
All these areas will be managed with a separate profit/loss statement. The students want to compete on
the basis of having modern facilities and forward-thinking management.
74. Refer to Mini-Case 4-1. What would be a good mission statement for this proposed venture?
a.) Lumberjack Lanes - we do bowling right!
b.) Lumberjack Lanes wants to compete with its cross-town rival by having a better facility.
c.) Lumberjack Lanes provides high quality, bowling and bowling-related entertainment to the
greater Corvallis community. (moderate) p. 59
d.) Lumberjack Lanes strives to serve its customers with the freshest food and drink, the hottest
dance music, and the cleanest lanes in town.
e.) Lumberjack Lanes - Try Us, You’ll Like Us!
75. Refer to Mini-Case 4-1. The Lumberjack Lanes portfolio of businesses include all the following
except _________________.
a.) food services
b.) restrooms (easy) pp. 60-61
c.) beverage services
d.) bowling
e.) dancing/music
76. Refer to Mini-Case 4-1. The group is proposing that the alleys compete on which of Porter’s generic
strategies?
a.) SWOT
b.) cost-leadership
c.) differentiation (moderate) p. 67
d.) hybrid
e.) focus
Mini-Case 4-2
LiveTrack (TM) has invented technology to track range cattle in real-time using GPS technology. They
have been funded by venture capitalists and are finishing the testing phase. They are ready to go to
market, but their backers want more specificity in the implementation and control sections. Inventor and
CEO Timo Nelson agrees and tells them he’ll meet with the group in a week.
77. Refer to Mini-Case 4-2. Bonoma writes that there are four sets of skills needed at the implementation
stage of a project. As Timo pulls out his old marketing text, he sees he must mention all of the
following skill sets in his plan except which?
a.) diagnostic skills
b.) the ability to discern at which level the problem is occurring
c.) implementation skills
d.) the ability to justify costs (moderate) p. 76
e.) the ability to evaluate results
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78. Refer to Mini-Case 4-2. Timo must consider the four types of control that he will need to exercise in
making LiveTrack (TM) a profitable reality for himself and his investors. In particular, the investors
are interested in where the product will make the most money. This is included in the __________
type of control.
a.) annual-plan
b.) profitability (moderate) p. 77
c.) regional plan
d.) efficiency
e.) strategic
79. Refer to Mini-Case 4-2. The venture capital group would like to make sure the target customers return
to LiveTrack (TM) after their first purchase, and also that they tell their rancher friends, as well. This
should be tracked as carefully as the animals, they say, so Timo agrees to put in a customerperformance scorecard. The scorecard should measure each of the following except
_________________.
a.) dissatisfied customers
b.) lost customers
c.) target market awareness
d.) relative service quality
e.) location of customers (moderate) p. 79
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