Marketing Management, 14e (Kotler/Keller) Chapter 22 Managing a Holistic Marketing Organization for the Long Run 1) Appointing teams to manage customer-value-building processes and break down walls between departments is part of which of the following business practices? A) reengineering B) outsourcing C) benchmarking D) supplier partnering E) customer partnering Answer: A Page Ref: 624 Objective: Difficulty: Easy 2) involves buying more goods and services from external domestic or foreign vendors A) Merging B) Broadening C) Outsourcing D) Globalizing E) Accelerating Answer: C Page Ref: 624 Objective: Difficulty: Easy 3) involves studying "best practice companies" to improve performance A) Empowering B) Globalizing C) Flattening D) Benchmarking E) Focusing Answer: D Page Ref: 624 Objective: Difficulty: Easy Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 4) Merging involves A) reducing the number of organizational levels to get closer to the customer B) removing barriers that separate organizational departments C) partnering with fewer but better value-adding suppliers D) working more closely with customers to add value to their operations E) acquiring firms in the same or complementary industries Answer: E Page Ref: 624 Objective: Difficulty: Moderate 5) Which of the following business practices involves reducing the number of organizational levels to get closer to the customer? A) flattening B) globalizing C) decentralization D) merging E) justifying Answer: A Page Ref: 624 Objective: Difficulty: Easy 6) Which of the following business practices focuses specifically on designing the organization and setting up processes to respond quickly to changes in the environment? A) benchmarking B) outsourcing C) focusing D) accelerating E) globalizing Answer: D Page Ref: 624 Objective: Difficulty: Easy Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 7) As a business practice, broadening involves _ A) acquiring or merging with firms in the same or complementary industries to gain economies of scale and scope B) factoring the interests of customers, employees, shareholders, and other stakeholders into the activities of the enterprise C) buying more goods and services from outside domestic or foreign vendors D) appointing teams to manage customer-value-building processes and break down walls between departments E) becoming more accountable by measuring, analyzing, and documenting the effects of marketing actions Answer: B Page Ref: 624 Objective: Difficulty: Moderate 8) As a marketing practice, monitoring involves A) designing the organization and setting up processes to respond quickly to changes in the environment B) becoming more accountable by measuring, analyzing, and documenting the effects of marketing actions C) tracking what is said online and elsewhere and studying customers, competitors, and others to improve business practices D) determining the most profitable businesses and customers and expending greater organizational resources to capitalize on them E) factoring the interests of customers, employees, shareholders, and other stakeholders into the activities of the enterprise Answer: C Page Ref: 624 Objective: Difficulty: Moderate 9) The role of marketing in the organization is changing Traditionally marketers have played the roles of , charged with understanding customers' needs and transmitting their voice to various functional areas A) middlemen B) opinion leaders C) clients D) influencers E) end consumers Answer: A Page Ref: 625 Objective: Difficulty: Easy Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 10) Which of the following observations is true? A) In today's business environment, marketers are mainly middlemen B) Marketing has the sole ownership of customer interactions C) Only when all employees realize their job is to create, serve, and satisfy customers does the company become an effective marketer D) Marketers must clearly differentiate all customer-facing processes, such that every customer receives a personalized marketing message E) Marketers must avoid collaborating with other organizational departments, as it blurs functional responsibilities Answer: C Page Ref: 625 Objective: Difficulty: Moderate 11) requires that everyone in the organization accept the concepts and goals of marketing and engage in choosing, providing, and communicating customer value A) Internal marketing B) Corporate communications C) Integrated marketing communications D) Supply chain management E) Employee engagement Answer: A Page Ref: 625 Objective: AACSB: Analytic skills Difficulty: Easy 12) The most common form of marketing organization consists of reporting to a marketing vice president who coordinates their activities A) zonal managers B) functional specialists C) product managers D) area market specialists E) brand managers Answer: B Page Ref: 625 Objective: Difficulty: Easy Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 13) Which of the following is the main advantage of a functional marketing organization? A) easy coordination B) lower staff requirements C) administrative simplicity D) reduced competition between functional groups E) smooth working relationships Answer: C Page Ref: 627 Objective: Difficulty: Moderate 14) A company selling in a national market often organizes its sales force along A) functional groups B) geographic lines C) product teams D) brand groups E) product categories Answer: B Page Ref: 627 Objective: Difficulty: Easy 15) A product-management organization makes sense if A) the company's products are quite varied B) there are very few products in the company's portfolio C) the company is pursuing a low cost strategy D) the company's products satisfy similar customer needs E) the company is vertically integrated Answer: A Page Ref: 627 Objective: Difficulty: Moderate 16) A product- or brand-management organization is characterized as a(n) system A) hub-and-spoke B) waterfall C) internal marketing D) top-down E) lateral Answer: A Page Ref: 627 Objective: Difficulty: Easy Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 17) A disadvantage of the product-management organization is that A) it marginalizes a company's smaller brands B) it reduces organizational responsiveness to new products in the market place C) product managers generally exercise authority outside their areas of responsibility D) it prevents product managers from gaining sufficient expertise in their product areas E) it fails to build long-term strengths as brand managers normally manage brands for only short periods Answer: E Page Ref: 628 Objective: Difficulty: Moderate 18) A product-management organization A) often proves to be cost-effective B) simplifies the process of developing a national strategy C) focuses on building market share rather than customer relationships D) reduces an organization's staffing requirements E) allows product managers to achieve functional expertise Answer: C Page Ref: 628 Objective: Difficulty: Moderate 19) There are three types of product-team structures These are A) vertical, triangular, and horizontal product teams B) vertical, horizontal, and circular product teams C) horizontal, vertical, and rectangular product teams D) horizontal, vertical, and flattened product teams E) vertical, rectangular, and circular product teams Answer: A Page Ref: 628 Objective: Difficulty: Easy 20) Which of the following is true about a brand-asset management team (BAMT)? A) A BAMT is part of the triangular and vertical product team structures B) BAMTs often report directly to the organization's chief branding officer C) BAMTs are a traditional, tried and tested means of managing brands D) Companies with a product-management organization often have only one BAMT E) The BAMT consists of key representatives from functions affecting the brand's performance Answer: E Page Ref: 628 Objective: Difficulty: Moderate Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 21) One of the options in a product-management organization is to eliminate product manager positions for minor products and assign two or more products to each remaining manager Under what conditions is this alternative feasible? A) when the product mix is highly diverse B) when there are very few products in the company's portfolio C) when two or more products serve a similar set of needs D) when customers fall into different user groups E) when the company produces many products for many markets Answer: C Page Ref: 628 Objective: Difficulty: Moderate 22) When customers fall into different user groups with distinct buying preferences and practices, a is desirable A) market-management organization B) product-management organization C) brand-management organization D) geographic organization E) functional organization Answer: A Page Ref: 629 Objective: Difficulty: Easy 23) Companies that produce many products for many markets may adopt a marketing organization A) flat B) brand C) product D) matrix E) top-down Answer: D Page Ref: 629 Objective: Difficulty: Easy Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 24) Which of the following is true regarding a matrix-management organization? A) It proves to be cost-effective in the long run B) It often creates conflicts regarding authority and responsibility for marketing activities C) It hampers the flow of information among marketing personnel D) It fosters a strong sense of accountability for performance among product and market managers E) It is best suited to companies that offer a small range of products to niche markets Answer: B Page Ref: 629 Objective: Difficulty: Moderate 25) Transforming into a true market-driven company requires organizing around A) sales B) customer segments C) products D) functions E) brands Answer: B Page Ref: 630 Objective: Difficulty: Easy 26) Which of the following is true of building a creative marketing organization? A) It is enough if firms are customer-oriented B) Companies must watch trends and be ready to capitalize on them C) Firms should focus more on efficiency rather than innovation D) Companies should attempt to minimize risks as much as possible E) Firms should focus on protecting their existing markets and physical resources Answer: B Page Ref: 630-631 Objective: Difficulty: Moderate 27) Rising customer expectations, evolving employee goals and ambitions, and tighter government legislation and pressure are driving companies to A) operate leaner manufacturing facilities B) manage shorter supply chains C) operate flatter organizations D) practice a higher level of corporate social responsibility E) vertically integrate Answer: D Page Ref: 631 Objective: AACSB: Ethical understanding and reasoning abilities Difficulty: Easy Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 28) In order to promote ethical cultures, companies should all of the following EXCEPT A) disseminate a written code of ethics B) build a company tradition of ethical behavior C) hold people responsible for observing ethical and legal guidelines D) ensure every employee knows and observes relevant laws E) encourage business practices that are not clearly ethical or unethical Answer: E Page Ref: 633 Objective: AACSB: Ethical understanding and reasoning abilities Difficulty: Easy 29) gives products the appearance of being more environmentally friendly without living up to that promise A) Ambush marketing B) Greenwashing C) Astroturfing D) Viral marketing E) Green politics Answer: B Page Ref: 635 Objective: AACSB: Ethical understanding and reasoning abilities Difficulty: Easy 30) refers to the ability to meet humanity's needs without harming future generations A) Greenwashing B) Sustainability C) Ecological footprinting D) Scalability E) Legal practice Answer: B Page Ref: 635 Objective: AACSB: Ethical understanding and reasoning abilities Difficulty: Easy Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 31) Cause-related marketing is part of A) sustainability B) corporate societal marketing C) social media D) global marketing E) community marketing Answer: B Page Ref: 636 Objective: AACSB: Ethical understanding and reasoning abilities Difficulty: Easy 32) Cause marketing has a particularly interested audience in civic-minded A) Millennial consumers B) baby boomers C) Gen Xers D) Gen Yers E) shadow boomers Answer: A Page Ref: 637 Objective: AACSB: Ethical understanding and reasoning abilities Difficulty: Easy 33) Cadbury's "Sports for Schools" promotion offered sports and fitness equipment for schools in exchange for vouchers The problem was that the public and media saw a perverse incentive for children to eat more chocolate, a product associated with obesity Which of the following best summarizes Cadbury's problem? A) Customers felt that the cause was not in sync with the company's brand image B) Consumers did not value the cause Cadbury was promoting C) Customers questioned the link between the product and the cause and saw the firm as selfserving and exploitive D) Consumers resented being sold an inferior product on the back of a cause-marketing program E) Consumers felt that the campaign did not make a sufficient attempt to change the target audience's behavior Answer: C Page Ref: 637 Objective: AACSB: Analytic skills Difficulty: Moderate 10 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 78) Companies producing a variety of products and brands often establish a product- (or brand-) management organization Answer: TRUE Page Ref: 627 Objective: Difficulty: Easy 79) The product-management organization replaces the functional organization in the firm Answer: FALSE Page Ref: 627 Objective: Difficulty: Easy 80) An advantage of the product- and brand-management system is that product and brand managers focus the company on building market share rather than customer relationships Answer: FALSE Page Ref: 628 Objective: Difficulty: Easy 81) There are three types of product-teams structures: vertical, triangular, and horizontal Answer: TRUE Page Ref: 628 Objective: Difficulty: Easy 82) Because the retail trade tends to think of profitability in terms of product categories, some companies are switching to a category management organizational model Answer: TRUE Page Ref: 628-629 Objective: Difficulty: Easy 83) When customers fall into different user groups with distinct buying preferences and practices, a product team structure is desirable Answer: FALSE Page Ref: 629 Objective: Difficulty: Easy 84) Market managers are staff people, with duties like those of a product manager Answer: TRUE Page Ref: 629 Objective: Difficulty: Easy 24 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 85) A customer-management organization deals with individual customers rather than the mass market or market segments Answer: TRUE Page Ref: 629 Objective: Difficulty: Easy 86) Many companies now focus on departments as opposed to processes, because processes can be a barrier to smooth performance Answer: FALSE Page Ref: 629 Objective: Difficulty: Easy 87) Transforming into a true market-driven company involves organizing around products Answer: FALSE Page Ref: 630 Objective: Difficulty: Easy 88) Firms that are viewed as being socially responsible have the added benefit of being able to attract employees Answer: TRUE Page Ref: 631 Objective: AACSB: Ethical understanding and reasoning abilities Difficulty: Easy 89) Companies must adopt and disseminate a written code of ethics, build a company tradition of ethical behavior, and hold their people fully responsible for observing ethics and legal guidelines if they wish to demonstrate ethical behavior Answer: TRUE Page Ref: 633 Objective: AACSB: Ethical understanding and reasoning abilities Difficulty: Easy 90) Although salespeople are legally prohibited from saying things about their products that are not true, they may legally suggest things about competitors' products that are not true Answer: FALSE Page Ref: 633 Objective: AACSB: Ethical understanding and reasoning abilities Difficulty: Easy 25 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 91) Some business practices, such as deceptive advertising, exclusive dealing, and predatory competition, sharply divide critics regarding whether they are clearly unethical or illegal Answer: FALSE Page Ref: 633 Objective: AACSB: Ethical understanding and reasoning abilities Difficulty: Moderate 92) Often, the more committed a company is to sustainability and environmental protection, the more dilemmas that can arise Answer: TRUE Page Ref: 634 Objective: AACSB: Ethical understanding and reasoning abilities Difficulty: Easy 93) Sustainability ratings exist, but there is no consistent agreement about what metrics are appropriate Answer: TRUE Page Ref: 635 Objective: AACSB: Ethical understanding and reasoning abilities Difficulty: Easy 94) Because of insincere firms jumping on the "green" bandwagon, consumers bring a healthy skepticism to environmental claims, but they are also unwilling to sacrifice product performance and quality Answer: TRUE Page Ref: 635 Objective: AACSB: Ethical understanding and reasoning abilities Difficulty: Easy 95) Corporate philanthropy as a whole is on the rise Answer: TRUE Page Ref: 636 Objective: AACSB: Ethical understanding and reasoning abilities Difficulty: Easy 96) Cause-related marketing efforts are unlikely to backfire as customers generally view the company's motives as genuine Answer: FALSE Page Ref: 637 Objective: AACSB: Ethical understanding and reasoning abilities Difficulty: Easy 26 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 97) Cash donations are the most productive contribution that businesses can make to a nonprofit or community group Answer: FALSE Page Ref: 638 Objective: AACSB: Ethical understanding and reasoning abilities Difficulty: Easy 98) Many companies focus on multiple cause-related marketing programs to simplify execution and maximize impact Answer: FALSE Page Ref: 638 Objective: AACSB: Ethical understanding and reasoning abilities Difficulty: Easy 99) Social marketing is a new trend in marketing Answer: FALSE Page Ref: 640 Objective: AACSB: Ethical understanding and reasoning abilities Difficulty: Easy 100) Social marketing programs designed to motivate people to donate blood or attract people for mass immunization are examples of cognitive campaigns Answer: FALSE Page Ref: 640 Objective: AACSB: Ethical understanding and reasoning abilities Difficulty: Easy 101) Social marketing programs take little time to develop and are generally easy to implement Answer: FALSE Page Ref: 642 Objective: AACSB: Ethical understanding and reasoning abilities Difficulty: Easy 102) The actual success of a social marketing program should be evaluated in terms of the program objectives Answer: TRUE Page Ref: 642 Objective: AACSB: Ethical understanding and reasoning abilities Difficulty: Easy 27 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 103) Desktop marketing gives marketers information and decision structures on computer dashboards Answer: TRUE Page Ref: 643 Objective: Difficulty: Easy 104) Profitability control is the prime responsibility of line and staff management Answer: FALSE Page Ref: 643 Objective: Difficulty: Easy 105) Annual-plan control involves the use of financial analysis to evaluate the performance of marketing plans Answer: TRUE Page Ref: 643 Objective: Difficulty: Easy 106) The annual plan control process begins with measuring performance Answer: FALSE Page Ref: 643-644 Objective: Difficulty: Easy 107) Repurchase rate is a sales metric that is used to evaluate the performance of marketing plans Answer: FALSE Page Ref: 644 Objective: Difficulty: Easy 108) The ratio of promoters to detractors is a customer metric that is used to evaluate the performance of marketing plans Answer: TRUE Page Ref: 644 Objective: Difficulty: Easy 109) A marketing audit is an orderly examination of the organization's macro- and micromarketing environments, marketing objectives and strategies, marketing systems, and specific activities Answer: TRUE Page Ref: 645 Objective: Difficulty: Easy 28 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 110) Self-audits tend to provide more objective information than audits conducted by external consultants Answer: FALSE Page Ref: 645 Objective: Difficulty: Easy 111) A marketing audit only benefits a company that is in trouble; companies in good health not need to conduct them Answer: FALSE Page Ref: 645 Objective: Difficulty: Easy 112) To succeed in the future, marketing must be more holistic and less departmental Answer: TRUE Page Ref: 645 Objective: Difficulty: Easy 113) In the future, there will be greater emphasis on precision marketing as opposed to mass marketing Answer: TRUE Page Ref: 648 Objective: Difficulty: Easy 114) In the context of overall market share, customer loyalty refers to the percentage of all customers who buy from the company Answer: FALSE Page Ref: 655 Objective: APP Difficulty: Easy 115) The first step in conducting a marketing profitability analysis involves assigning functional expenses to marketing entities Answer: FALSE Page Ref: 657 Objective: APP Difficulty: Easy 116) Operating management is most effective in controlling direct costs and traceable common costs Answer: TRUE Page Ref: 659 Objective: APP Difficulty: Easy 29 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 117) List and define some of the important shifts that have taken place in business and marketing practices Answer: Reengineering is the appointment of teams to manage customer-value-building processes and break down walls between departments Outsourcing involves buying more goods and services from outside domestic or foreign vendors Benchmarking is the study of "best practice companies" to improve performance Supplier partnering focuses on partnering with fewer but better value-adding suppliers Customer partnering entails working more closely with customers to add value to their operations Merging involves acquiring or merging with firms in the same or complementary industries to gain economies of scale and scope Globalizing focuses on increasing the effort to "think global" and "act local." Flattening refers to reducing the number of organizational levels to get closer to the customer Focusing involves determining the most profitable businesses and customers and focusing on them 10 Accelerating involves designing the organization and setting up processes to respond more quickly to changes in the environment 11 Empowering means encouraging and empowering personnel to produce more ideas and take more initiative 12 Justifying means becoming more accountable by measuring, analyzing, and documenting the effects of marketing actions 13 Broadening involves factoring the interests of customers, employees, shareholders, and other stakeholders into the activities of the enterprise 14 Monitoring involves tracking what is said online and elsewhere and studying customers, competitors, and others to improve business practices Page Ref: 624 Objective: Difficulty: Moderate 118) Describe the functional organization of a marketing department in terms of its structure, advantages, and disadvantages Answer: The most common form of marketing organization consists of functional specialists reporting to a marketing vice president The main advantage of a functional marketing organization is its administrative simplicity It can be quite a challenge for the department to develop smooth working relationships, however This form also can result in inadequate planning as the number of products and markets increases and each functional group vies for budget and status The marketing vice president constantly weighs competing claims and faces a difficult coordination problem Page Ref: 627 Objective: Difficulty: Moderate 30 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 119) Explain the product- or brand-management organization and list its advantages and disadvantages Answer: Companies producing a variety of products and brands often establish a product- (or brand-) management organization The product- or brand-management organization does not replace the functional organization, but serves as another layer of management A product-management organization makes sense if the company's products are quite different, or if the sheer number of products is beyond the ability of a functional organization to handle Product and brand management is sometimes characterized as a hub-and-spoke system The product-management organization has several advantages The product manager can concentrate on developing a cost-effective marketing mix for the product and can react more quickly to new products in the marketplace; the company's smaller brands have a product advocate The disadvantages are that product managers are not given enough authority, they become experts in their product area but rarely achieve functional expertise The product-management system is costly and brand managers normally manage a brand only for a short time The fragmentation of markets makes it harder to develop a national strategy In addition to this, product and brand managers focus on market share and not in building customer relationships Page Ref: 627-628 Objective: Difficulty: Moderate 120) What is a market-management organization? Answer: Many companies sell their products to differing markets When customers fall into different user groups with distinct buying preferences and practices, a market-management organization is desirable Market managers supervise several market-development managers, market specialists, or industry specialists and draw on functional services as needed Market managers of important markets might even have functional specialists reporting to them Market managers are staff (not line) people, with duties like those of product managers They develop long-range and annual plans for their markets and are judged by their market's growth and profitability Because this system organizes marketing activity to meet the needs of distinct customer groups, it shares many advantages and disadvantages of product-management systems Page Ref: 629 Objective: Difficulty: Moderate 31 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 121) Many companies are beginning to realize that they are not really market and customer driven, they are product and sales driven In the attempt to transform themselves into true market-driven companies, firms are required to change Describe and explain what changes are necessary Answer: To be truly market-driven, companies need to develop a company-wide passion for customers, organize around customer segments instead of around products, and develop a deep understanding of customers through qualitative and quantitative research Additionally, the organization must be creative; the firm must build capability in strategic innovation and imagination This capability comes from assembling tools, processes, skills, and measures that let the firm generate more and better new ideas than its competitors Page Ref: 630 Objective: Difficulty: Easy 122) What is sustainability? How is it related to the concept of greenwashing? Answer: Sustainability is the ability to meet humanity's needs without harming future generations It now tops many corporate agendas Major corporations outline in great detail how they are trying to improve the long-term impact of their actions on communities and the environment Heightened interest in sustainability has also unfortunately resulted in greenwashing, which gives products the appearance of being environmentally friendly without living up to that promise Because of insincere firms jumping on the green bandwagon, consumers bring a healthy skepticism to environmental claims, but they are also unwilling to sacrifice product performance and quality Many firms are rising to the challenge and are using the need for sustainability to fuel innovation Page Ref: 635-636 Objective: AACSB: Ethical understanding and reasoning abilities Difficulty: Moderate 123) Identify some of the brand benefits that can accrue to a company that engages in cause marketing Answer: A successful cause-marketing program can improve social welfare, create differentiated brand positioning, build strong consumer bonds, enhance the company's public image, create a reservoir of goodwill, boost internal morale and galvanize employees, drive sales, and increase the firm's market value Consumers may develop a strong, unique bond with the firm running the cause-marketing that transcends normal marketplace transactions Specifically, cause marketing can (1) build brand awareness, (2) enhance brand image, (3) establish brand credibility, (4) evoke brand feelings, (5) create a sense of brand community, and (6) elicit brand engagement Page Ref: 637 Objective: AACSB: Ethical understanding and reasoning abilities Difficulty: Moderate 32 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 124) Identify three key success factors in developing and implementing a social marketing program Answer: Students may choose three of the following key success factors presented in the text: (1) choose target markets that are most ready to respond; (2) promote a single, doable behavior in clear, simple terms; (3) explain the benefits in compelling terms; (4) make it easy to adopt the behavior; (5) develop attention-grabbing messages and media; and (6) consider an educationentertainment approach Page Ref: 641 Objective: AACSB: Ethical understanding and reasoning abilities Difficulty: Moderate 125) Briefly explain the concept of annual-plan control Answer: Annual-plan control ensures the company achieves the sales, profits, and other goals established in its annual plan At its heart is management by objectives First, management sets monthly or quarterly goals Second, it monitors performance in the marketplace Third, management determines the causes of serious performance deviations Fourth, it takes corrective action to close gaps between goals and performance This control model applies to all levels of the organization Top management sets annual sales and profit goals; each product manager, regional district manager, sales manager, and sales rep is committed to attaining specified levels of sales and costs Each period, top management reviews and interprets the results Marketers today have better marketing metrics for measuring the performance of marketing plans Four tools for the purpose are sales analysis, market share analysis, marketing expense-to-sales analysis, and financial analysis Page Ref: 643-644 Objective: Difficulty: Moderate 126) What is a marketing audit? Explain the four characteristics of a marketing audit Answer: A marketing audit is a comprehensive, systematic, independent, and periodic examination of a company's or business unit's marketing environment, objectives, strategies, and activities, with a view to determining problem areas and opportunities and recommending a plan of action to improve the company's marketing performance A marketing audit should be: (1) comprehensive it covers all the major marketing activities of a business; (2) systematic it is an orderly examination of the organization's macro- and micromarketing environments, marketing objectives and strategies, marketing systems, and specific activities; (3) independent outside consultants bring the necessary objectivity, broad experience in a number of industries, familiarity with the industry being audited, and undivided time and attention; and (4) periodic firms typically initiate marketing audits only after failing to review their marketing operations during good times, with resulting problems A periodic marketing audit can benefit companies in good health as well as those in trouble Page Ref: 645 Objective: Difficulty: Moderate 33 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 127) What is a brand-asset management team (BAMT)? Answer: Triangular and horizontal product-team approaches let each major brand be run by a brand-asset management team (BAMT) consisting of key representatives from functions that affect the brand's performance The company consists of several BAMTs that periodically report to a BAMT directors committee, which itself reports to a chief branding officer Page Ref: 628 Objective: Difficulty: Easy 128) Define a category-management organization Answer: A category-management organization is where a company focuses on product categories to manage its brands Page Ref: 628 Objective: Difficulty: Easy 129) What is a customer-management organization? When should it be adopted? Answer: A customer-management organization deals with individual customers rather than the mass market or even market segments It is suitable when a close customer relationship is advantageous, such as when customers have diverse and complex requirements and buy an integrated bundle of products and services Page Ref: 629 Objective: Difficulty: Easy 130) What are some of the forces that are driving companies to practice corporate social responsibility? Answer: A number of forces are driving companies to practice a higher level of corporate social responsibility, such as rising customer expectations, evolving employee goals and ambitions, tighter government legislation and pressure, investor interest in social criteria, media scrutiny, and changing business procurement practices Page Ref: 631 Objective: AACSB: Ethical understanding and reasoning abilities Difficulty: Easy 131) How can firms promote ethical behavior among their employees? Answer: Companies must adopt and disseminate a written code of ethics, build a company tradition of ethical behavior, and hold their people fully responsible for observing ethical and legal guidelines Organizations must also ensure that every employee knows and observes relevant laws Page Ref: 633 Objective: AACSB: Ethical understanding and reasoning abilities Difficulty: Easy 34 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 132) Corporate philanthropy can pose problems even when done with the best intentions Explain Answer: Philanthropic efforts by companies can be overlooked—even resented—if the company is seen as exploitive or fails to live up to a "good guys" image Page Ref: 634 Objective: AACSB: Ethical understanding and reasoning abilities Difficulty: Moderate 133) Explain the concept of greenwashing along with an example Answer: Greenwashing gives products the appearance of being environmentally friendly without living up to that promise An automobile manufacturer who promotes its cars as being environmentally friendly when the company is in fact a major polluter, would be an example of greenwashing Page Ref: 635 Objective: AACSB: Analytic skills Difficulty: Moderate 134) Define cause-related marketing What is the difference between cause-related marketing and social marketing? Answer: Cause-related marketing links the firm's contributions to a designated cause to customers' engaging directly or indirectly in revenue-producing transactions with the firm Cause-related marketing supports a cause whereas social marketing by nonprofit or government organizations furthers a cause Page Ref: 636; 640 Objective: AACSB: Ethical understanding and reasoning abilities Difficulty: Moderate 135) Give an example of a cognitive social marketing campaign Answer: Cognitive campaigns try to educate and inform people A cognitive campaign might explain the nutritional value of different foods or demonstrate the importance of conservation Page Ref: 640 Objective: AACSB: Ethical understanding and reasoning abilities Difficulty: Easy 35 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 136) Suicide is one of the leading causes of death worldwide Develop the possible objectives of a social marketing campaign which aims to change people's cognitions, values, behaviors, and actions related to suicide Answer: Cognitive—To promote awareness about the risk factors associated with suicide and how it can be prevented Action—To motivate people to volunteer for a crisis hotline service aimed at providing support to people with suicidal tendencies Behavioral—To reduce the incidence of suicide by discouraging substance abuse Value - To eliminate the stigma associated with suicidal people Page Ref: 640 Objective: AACSB: Analytic skills Difficulty: Moderate 137) Define marketing implementation Answer: Marketing implementation 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 Page Ref: 642 Objective: Difficulty: Easy 138) What is marketing control? List the four types of marketing control Answer: Marketing control is the process by which firms assess the effects of their marketing activities and programs and make necessary changes and adjustments The four types of needed marketing control are: annual-plan control, profitability control, efficiency control, and strategic control Page Ref: 643 Objective: Difficulty: Easy 139) What is the purpose of profitability control? Answer: The purpose of profitability control is to examine where the company is making and losing money Companies should measure the profitability of their products, territories, customer groups, segments, trade channels, and order sizes to help determine whether to expand, reduce, or eliminate any products or marketing activities Page Ref: 644 Objective: Difficulty: Moderate 140) How can a firm periodically reassess its strategic approach to the marketplace? Answer: Each company should periodically reassess its strategic approach to the marketplace with a good marketing audit Companies can also perform marketing excellence reviews and ethical/social responsibility reviews Page Ref: 645 Objective: Difficulty: Easy 36 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 141) List some of the marketing trends that are likely to emerge in the near future Answer: The coming years will see: • The demise of the marketing department and the rise of holistic marketing • The demise of free-spending marketing and the rise of ROI marketing • The demise of marketing intuition and the rise of marketing science • The demise of manual marketing and the rise of both automated and creative marketing • The demise of mass marketing and the rise of precision marketing Page Ref: 648 Objective: Difficulty: Moderate 142) Define sale-variance analysis and microsales analysis Answer: Sales-variance analysis measures the relative contribution of different factors to a gap in sales performance Microsales analysis looks at specific products, territories, and so forth that failed to produce expected sales Page Ref: 654 Objective: APP Difficulty: Easy 143) What are the steps involved in marketing profitability analysis? Answer: The steps involved in marketing profitability analysis are as follows: Step 1: Identifying functional expenses Step 2: Assigning functional expenses to marketing entities Step 3: Preparing a profit-and-loss statement for each marketing entity Page Ref: 656-657 Objective: APP Difficulty: Moderate 144) What are direct, traceable common, and nontraceable common costs? Give an example of each Answer: Direct costs are costs that we can assign directly to the proper marketing entities, such as materials costs and sales-force salaries Traceable common costs are incurred indirectly but can be attributed on a plausible basis to various marketing entities, such as rent expenses Nontraceable common costs are costs whose assignments are highly arbitrary, such as "corporate image" expenditures Page Ref: 659 Objective: APP Difficulty: Moderate 37 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 145) What is the full-cost approach of evaluating a marketing entity's performance? Answer: When evaluating a marketing entity's performance, the major controversy is about whether to allocate the nontraceable common costs to the marketing entity Such allocation is called the full-cost approach, and its advocates argue that all costs must ultimately be imputed in order to determine true profitability However, this argument confuses the use of accounting for financial reporting with its use for managerial decision making Page Ref: 659 Objective: APP Difficulty: Moderate 146) Full costing allocates nontraceable common costs to marketing entities and has three major weaknesses What are they? Answer: Full costing has three major weaknesses: (1) The relative profitability of different marketing entities can shift radically when we replace one arbitrary way to allocate nontraceable common costs by another; (2) the arbitrariness demoralizes managers, who feel their performance is judged adversely; and (3) the inclusion of nontraceable common costs could weaken efforts at real cost control Page Ref: 659 Objective: APP Difficulty: Moderate 38 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall ... likely to be an important trend in marketing in the future? A) marketing intuition B) free-spending marketing C) manual marketing D) marketing science E) mass marketing Answer: D Page Ref: 648... government organizations furthers a cause A) Corporate societal marketing B) Brand marketing C) Causal marketing D) Social marketing E) Place marketing Answer: D Page Ref: 640 Objective: AACSB: Ethical... assess the effects of their marketing activities and programs and make necessary changes and adjustments A) Marketing control B) Marketing implementation C) Test marketing D) Market watch E)