When customers fall into different user groups with distinct buying preferences and practices

A) market-management B) product-management C) brand-management D) geographic

E) functional

Answer:A

Many companies sell their products to different markets. Canon sells its fax machines to consumer, business and government markets. US Steel sells to the railroad, construction, and public utility industries. When customers fall into different user groups with distinct buying preferences and practices, a market management organization is desirable. A market manger supervises several market managers also called market development managers, market specialists or industry specialists. The market managers 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 similar to those of product managers. Market managers develop long range and annual plans for their markets. Their performance is judged by their marketâ€™s growth and profitability. This system carries many of the same advantages and disadvantages of product management systems. Its strongest advantage is that the marketing activity is organized to meet the needs of distinct customer groups rather than being focused on marketing functions, regions, or products. Many companies are reorganizing along market lines and becoming market centered organization. Xerox has converted from geographic selling to selling by industry, as have IBM and Hewlett-Packard.

In a customer management organization, companies can organize themselves to understand and deal with individual customers rather than with the mass market or even market segments.

Matrix management organization: Companies that produce many products flowing into many markets may adopt a matrix organization. DuPont was a pioneer in development the matrix structure.

Before being spun off, DuPontâ€™s textile fibers department consisted of separate product managers for rayon, acetate, nylon, orlon and Dacron; and separate market managers for men wear, womenâ€™s wear, home furnishings and industrial markets. The product managers planned the sales and profits for their respective fibers. They asked market managers to estimate how much of their fiber they could sell in each market at a proposed price Market managers, however, were generally more interested in meeting their marketâ€™s needs than pushing a particular fiber. In preparing their market plans, they asked each product manager about the fiberâ€™s planned prices availabilities. The final sales forecast of the market managers and the product managers should have added up to the same grand total.

Companies like DuPont can go one step further and view the market managers as the main marketers, and their product managers as supplier. The men wear market manager, for example, would be empowered to buy textile fibers from DuPontâ€™s product managers or, if DuPontâ€™s price is too high, from outside suppliers. This system would force DuPont product managers to become more efficient. If a DuPont product manager could not match the arm-length pricing levels of competitive suppliers, then perhaps DuPont should not continue to produce that fiber.

A matrix organization would seem desirable in a multi-product, multi-market company. The problem is that this system is costly and often creates conflicts. There is the cost of supporting all the managers. There are also questions about where authority and responsibility should reside.

Matrix management gained advocates because companies provide the context in which a matrix can thrive â€“ flat, lean organizations focused around business processes that cut horizontally across functions.

Corporate divisional organization: As multi-product multi-market companies grow, they often convert their larger product or market groups into separate divisions. The divisions set up their own departments and services. This raises the question of what marketing services and activities should be retained at company headquarters. Divisional zed companies have reached different answers to these questions.

No Corporate Marketing: Some companies lack a corporate marketing staff. They do not see any useful function for marketing at the corporate level. Each division has its own marketing department.

Moderate Corporate Marketing: Some companies have a small corporate marketing staff that performs a few functions, primarily (1) assisting top management with overall opportunity evaluation, (2) providing division with consulting assistance on request, (3) helping divisions that have little or no marketing and (4) promoting the marketing concept through out the company.
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1) Appointing teams to manage customer-value-building processes and break down walls between departments is part of which of the following shifts in business practices? A) reengineering B) outsourcing C) benchmarking D) supplier partnering E) customer partnering

2) ________ involves buying more goods and services from external domestic or foreign vendors. A) Merging B) Broadening C) Outsourcing D) Globalizing E) Accelerating

3) ________ involves studying "best practice companies" to improve performance. A) Empowering B) Globalizing C) Flattening D) Benchmarking E) Focusing

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

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

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

7) ________, or reducing the number of organizational levels to get closer to the customer, is one of the important shifts in marketing and business practices. A) Merging B) Flattening C) Globalizing D) Focusing E) Justifying

8) 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

9) 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

10) List and define some of the important shifts that have taken place in business and marketing practices.

Student answers will vary. Some possible answers include: • 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. • Accelerating involves designing the organization and setting up processes to respond more quickly to changes in the environment. • Empowering means encouraging and empowering personnel to produce more ideas and take more initiative. • Justifying means becoming more accountable by measuring, analyzing, and documenting the effects of marketing actions. • Broadening involves factoring the interests of customers, employees, shareholders, and other stakeholders into the activities of the enterprise. • Monitoring involves tracking what is said online and elsewhere and studying customers, competitors, and others to improve business practices.

11) 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

12) 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.

13) ________ 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

14) 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

15) 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

16) 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

17) 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

18) 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

19) 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 marketplace 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

20) 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

21) 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

22) 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.

23) 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

24) When customers fall into different user groups with distinct buying preferences and practices, a ________ organization is desirable. A) market-management B) product-management C) brand-management D) geographic E) functional

25) Companies that produce many products for many markets may adopt a ________ marketing organization. A) flat B) brand C) product D) matrix E) top-down

26) 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.

27) Transforming into a true market-driven company requires organizing around ________. A) sales B) customer segments C) products D) functions E) brands

28) 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.

29) Internal marketing requires that everyone in the organization buy into the concepts and goals of marketing and engage in choosing, providing, and communicating customer value.

30) Marketing has sole ownership of customer interaction.

31) A functional organization allows for adequate planning as the number of products and markets of a firm increases.

32) Companies producing a variety of products and brands often establish a product- (or brand-) management organization.

33) The product-management organization replaces the functional organization in the firm.

34) 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.

35) There are three types of product-team structures: vertical, triangular, and horizontal.

36) Because the retail trade tends to think of profitability in terms of product categories, some companies are switching to a category management organizational model.

37) When customers fall into different user groups with distinct buying preferences and practices, a product team structure is desirable.

38) Market managers are staff people, with duties like those of a product manager.

39) A customer-management organization deals with individual customers rather than the mass market or market segments.

40) Many companies now focus on departments as opposed to processes, because processes can be a barrier to smooth performance.

41) Transforming into a true market-driven company involves organizing around products.

49) 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

50) In order to promote ethical cultures, companies should do 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

51) One opportunity for designing a cause program so the sponsoring company is not overlooked among other corporate sponsors is to support a(n) ________, or a disease that afflicts fewer than 200,000 people. A) orphan cause B) overlooked calamity C) behavioral campaign D) social marketing plan E) value campaign

; Application of knowledge 52) ________ 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

53) ________ 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

54) Cause-related marketing is part of ________. A) sustainability B) corporate societal marketing C) social media D) global marketing E) community marketing

55) 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

56) 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 self-serving 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.

57) Which of the following is true regarding cause-related marketing? A) The positive impact of cause-related marketing can be increased through sporadic involvement with numerous causes. B) Many companies focus on multiple causes to simplify execution and maximize impact. C) Limiting support to a single cause increases the pool of stakeholders who can transfer positive feelings from the cause to the firm. D) Most firms choose causes that fit their corporate or brand image and matter to their employees and shareholders. E) In order to avoid public backlash, firms are advised to adopt a hard-sell approach to their cause efforts.

58) ________ marketing by nonprofit or government organizations furthers a cause. A) Corporate societal B) Brand C) Causal D) Social E) Place

59) Social marketing programs designed to discourage cigarette smoking or excessive consumption of alcohol are examples of ________ campaigns. A) cognitive B) active C) behavioral D) value E) normative

60) A social marketing program which aims to alter ideas about abortion is an example of a(n) ________ campaign. A) cognitive B) active C) behavioral D) value E) normative

61) Which of the following represents the objective of a cognitive social marketing campaign? A) Motivate people with obesity to eat healthy and exercise more often. B) Change public attitudes and stereotypes associated with people who are obese. C) Explain the different causes of obesity and how it can be prevented. D) Encourage people to participate in a walkathon aimed at promoting awareness about obesity. E) Help people with obesity to implement lifestyle changes.

62) Which of the following represents the objective of a social marketing campaign aimed at changing people's actions? A) Motivate people with obesity to eat healthy and exercise more often. B) Change public attitudes and stereotypes associated with people who are obese. C) Explain the different causes of obesity and how it can be prevented. D) Encourage people to participate in a walkathon aimed at promoting awareness about obesity. E) Help people with obesity to implement lifestyle changes.

63) Which of the following represents the objective of a social marketing campaign aimed at changing people's values? A) Motivate people with obesity to eat healthy and exercise more often. B) Change public attitudes and stereotypes associated with people who are obese. C) Explain the different causes of obesity and how it can be prevented. D) Encourage people to participate in a walkathon aimed at promoting awareness about obesity. E) Help people with obesity to implement lifestyle changes.

64) Which of the following represents the objective of a social marketing campaign aimed at changing people's behavior? A) Motivate people with obesity to eat healthy and exercise more often. B) Change public attitudes and stereotypes associated with people who are obese. C) Explain the different causes of obesity and how it can be prevented. D) Encourage people to participate in a walkathon aimed at promoting awareness about obesity. E) Attract people with obesity to sign up for a one-time free medical check up.

65) Which of the following should be done to increase the likelihood that social marketing programs will be successful? A) Choose target markets that are the least ready to respond. B) Promote multiple, doable behaviors in clear, simple terms. C) Make it easy to adopt the behavior. D) Adopt a soft sell approach, as opposed to attention grabbing messages. E) Explain the benefits in an exaggerated manner.

66) The first step in the social marketing planning process is ________. A) determining the focus of the program B) selecting the target audience C) setting objectives and goals D) designing the market offering E) finding a source of funding

67) Firms that are viewed as being socially responsible have the added benefit of being able to attract employees.

68) 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.

69) 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.

70) Some business practices, such as deceptive advertising, exclusive dealing, and predatory competition, sharply divide critics regarding whether they are clearly unethical or illegal.

71) Often the more committed a company is to sustainability and environmental protection, the more dilemmas that can arise.

72) Sustainability ratings exist, but there is no consistent agreement about what metrics are appropriate.

73) 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.

74) Corporate philanthropy as a whole is on the rise.

75) Cause-related marketing efforts are unlikely to backfire as customers generally view the company's motives as genuine.

76) Cash donations are the most productive contribution that businesses can make to a nonprofit or community group.

77) Many companies focus on multiple cause-related marketing programs to simplify execution and maximize impact.

78) Social marketing is a new trend in marketing.

79) Social marketing programs designed to motivate people to donate blood or attract people for mass immunization are examples of cognitive campaigns.

80) Social marketing programs take little time to develop and are generally easy to implement.

81) The actual success of a social marketing program should be evaluated in terms of the program objectives.

82) Raising the level of socially responsible marketing calls for a three-pronged attack that relies on proper legal, ethical, and social responsibility behavior.

83) Endearment gives products the appearance of being environmentally friendly without living up to that promise.

93) ________ software provides a set of Web-based applications that automate and integrate project management, campaign management, budget management, asset management, brand management, customer relationship management, and knowledge management. A) Marketing dashboard B) Enterprise resource planning C) Supply chain management D) Marketing resource management E) Enterprise campaign management

94) ________ 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. A) Marketing implementation B) Marketing research C) Marketing analysis D) Brand management E) Product management

95) ________ is the process by which firms 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) Market analysis

96) As long as finance focuses on short-term profit, it will oppose major investments designed to build satisfied, loyal customers. Which of the following steps that a marketing CEO can take to create a market- and customer-focused company can help a CEO overcome this challenge? A) Empower the employees. B) Get outside help and guidance. C) Install a modern marketing planning system. D) Change the company's reward measurement and system. E) Develop strong in-house marketing training programs.

; Application of knowledge 97) IBM lets frontline employees spend up to $5,000 to solve a customer problem on the spot, which is an example of which of the following steps that a marketing CEO can take to create a market- and customer-focused company? A) Empower the employees. B) Hire strong marketing talent. C) Get outside help and guidance. D) Install a modern marketing planning system. E) Develop strong in-house marketing training programs.

98) Top and middle management are primarily responsible for ________ control. A) annual-plan B) efficiency C) profitability D) technological E) innovation

99) ________ software provides a set of Web-based applications that automate and integrate project management, campaign management, budget management, asset management, brand management, customer relationship management, and knowledge management. A) Annual plan control B) Profitability control C) Efficiency control D) Strategic control E) Marketing resource management (MRM)

100) Who is primarily responsible for efficiency control? A) BAMT B) marketing auditor C) middle management D) line and staff management E) top management

101) The purpose of profitability control is to ________. A) examine whether the planned results are being achieved B) examine where the company is making and losing money C) evaluate and improve the spending efficiency and impact of marketing expenditures D) examine whether the company is pursuing its best opportunities with respect to markets, products, and channels E) understand the efficiency of the sales force, advertising, sales promotion, and distribution

102) The ________ is primarily responsible for strategic control. A) line and staff management B) marketing auditor C) marketing controller D) middle management E) BAMT

103) The purpose of strategic control is to ________. A) examine whether the planned results are being achieved B) examine where the company is making and losing money C) evaluate and improve the spending efficiency and impact of marketing expenditures D) examine whether the company is pursuing its best opportunities with respect to markets, products, and channels E) understand the efficiency of the sales force, advertising, sales promotion, and distribution

104) Marketing effectiveness rating instruments and marketing audits are approaches to ________ control. A) annual-plan B) profitability C) efficiency D) strategic E) statistical

105) Which of the following is true regarding annual-plan control? A) This control process begins by identifying the causes of serious performance deviations. B) The tools used for this purpose are sales analysis, market share analysis, marketing expense-to-sales analysis, and financial analysis. C) The marketing controller has the primary responsibility for annual-plan control. D) Its purpose is to evaluate and improve the spending efficiency and impact of marketing expenditures. E) It measures profitability by product, territory, customer, segment, trade channel, and order size.

106) Which of the following is an example of a distribution metric used for measuring the performance of marketing plans? A) effective reach B) customer acquisition costs C) market share D) stocks cover in days E) response rate

107) Your firm has experienced a decline in sales over the last three quarters. You have traced the problems to distribution inefficiencies. Which of the following should you track to ensure that the firm's distribution efficiency is maximized? A) average sales per point of sale B) sales from new products C) trial rate D) repurchase rate E) new customer gains

108) A ________ 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 plan B) test market C) marketing audit D) market-based scorecard analysis E) marketing metric

109) Which of the following is true regarding a marketing audit? A) It focuses primarily on a firm's macromarketing environment. B) It identifies the most-needed improvements and incorporates them into a corrective-action plan with short- and long-run steps. C) It is less effective at locating the real source of a problem than a functional audit. D) It analyzes only those marketing activities that have failed to produce adequate results. E) It relies solely on company managers for data and opinions.

110) To succeed in the future, marketing must ________. A) become more holistic B) build brands through promotion rather than performance C) be more departmental D) focus on free-spending E) rely more on mass marketing

111) Which of the following is 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

112) Which of the following is a best practice in business and marketing? A) end-product orientation B) reacting to competitors C) vertical integration D) stockholder driven E) teamwork

113) Which of the four characteristics of a marketing audit is described by the fact that outside consultants can bring necessary objectivity to the process? A) comprehensive B) systematic C) independent D) periodic E) opinion-based

114) ________ analysis looks at specific products, territories, and so forth that failed to produce expected sales. A) Microsales B) Sales variance C) Expense-to-sales D) Full costing E) Financial

115) Served market share ________. A) expresses the company's sales as a percentage of total market sales B) is sales as a percentage of the total sales to the market C) is market share in relationship to the largest competitor D) is always smaller than overall market share E) measures the relative contribution of different factors to a gap in sales performance

100

116) ________ is market share in comparison to the largest competitor. A) Relative market share B) Served market share C) Overall market share D) Market value E) Target market share

101

Airfare (Scenario) The airfare for an economy class, one-way ticket from Los Angeles to New York is $500. Due to the recession, the airline manages to fill only 100 out of the 150 seats at $400 per seat. 117) How much of the sales performance gap is due to price decline? A) 0.4 percent B) 2.5 percent C) 28.5 percent D) 37 percent E) 71.4 percent

102

118) The sales gap due to reduced volume is ________ percent. A) 0.4 B) 2.5 C) 28.5 D) 63 E) 71.4

103

119) If Ming was interested in capturing distribution metrics for her retail organization, which of the following might she consider? A) customer complaints B) share of shelf C) effective reach D) trial rate E) market share

104

120) Which of the following is true about market share? A) Outside forces affect all companies in the same way. B) A company's performance should be judged against the average performance of all companies. C) A decline in market share does not necessarily mean the company is performing worse than are other companies. D) A decline in market share cannot be deliberately engineered. E) All shifts in market share have marketing significance.

105

121) A(n) ________ market share of exactly 100 percent means that a company is tied for the market lead. A rise in relative market share means the company is gaining on its leading competitor. A) overall B) served C) potential D) relative E) actual

106

122) Annual-plan control requires making sure the company isn't overspending to achieve sales goals. The key ratio to watch is ________. A) stock turnover B) gross margin C) return on capital D) cash flow return on investment E) marketing expense-to-sales

107

123) ________ approach advocates argue that all costs must ultimately be imputed in order to determine true profitability. A) Direct-cost B) Full-cost C) Traceable-cost D) Activity-based costing E) Fixed cost

108

Cabot (Scenario) Cabot, a large car manufacturer, has four popular car brands in different segments. It has a manufacturing facility near Detroit, MI, where parts common to all the four brands are manufactured. Other specific parts like the brake system, windshield, bonnet, locks, and so on are manufactured in separate plants. Each make has its own product manager and support staff. All product managers report to the CEO of the company. 124) Cabot's CEO's annual compensation is an example of a ________ cost. A) direct B) variable C) traceable common D) nontraceable common E) manufacturing

109

125) The cost of land where a plant that manufactures common parts is set up falls under ________ costs. A) traceable common B) nontraceable common C) variable D) manufacturing E) material

110

126) Suppose the manufacturer pays a commission on every car sold. Then, the salesperson's commission is classified as a(n) ________. A) cost of labor B) traceable common cost C) nontraceable common cost D) advertising cost E) direct cost

111

127) The cost of operating the common manufacturing facility is a(n) ________ cost. A) opportunity B) traceable C) nontraceable D) sunk E) differential

112

128) The manufacturer launches a brand building advertising campaign. The campaign does not promote any one specific car but is aimed at promoting the company as a whole. Which type of cost does this fall under? A) direct costs B) material costs C) nontraceable costs D) traceable costs E) labor costs

113

129) Desktop marketing gives marketers information and decision structures on computer dashboards.

114

130) Profitability control is the prime responsibility of line and staff management.

115

131) Annual-plan control involves the use of financial analysis to evaluate the performance of marketing plans.

116

132) The annual plan control process begins with measuring performance.

117

133) Repurchase rate is a sales metric that is used to evaluate the performance of marketing plans.

118

134) The ratio of promoters to detractors is a customer metric that is used to evaluate the performance of marketing plans.

119

135) A marketing audit is an orderly examination of the organization's macro- and micromarketing environments, marketing objectives and strategies, marketing systems, and specific activities.

120

136) Self-audits tend to provide more objective information than audits conducted by external consultants.

121

137) A marketing audit only benefits a company that is in trouble; companies in good health do not need to conduct them.

122

138) To succeed in the future, marketing must be more holistic and less departmental.

123

139) In the future, there will be greater emphasis on precision marketing as opposed to mass marketing.

124

140) In the context of overall market share, customer loyalty refers to the percentage of all customers who buy from the company.

125

141) The first step in conducting a marketing profitability analysis involves assigning functional expenses to marketing entities.

126

142) Operating management is most effective in controlling direct costs and traceable common costs.

127

153) Which of the following is NOT a predicted direction for marketing in the coming years? A) the demise of precision marketing and rise of mass marketing B) the demise of the marketing department and the rise of holistic marketing C) the demise of marketing intuition and the rise of marketing science D) the demise of manual marketing and the rise of both automated and creative marketing E) the demise of free-spending marketing and the rise of ROI marketing

128

154) The coming years will see the rise of the marketing department and the demise of holistic marketing.

129

155) If a company has too many products and many are losing money; the company is giving away too many services; and the company is poor at cross-selling products and services, it is a sign that the company's brand-building and communication skills are weak.

130

156) In the future, marketers should use the Internet more, improve the sales automation system, apply market automation to routine decisions, and develop formal marketing decision models and marketing dashboards.