Title: Chapter 2
Course: Principles of Marketing > Section: Chapter 2

Chapter 2

2.1 Knowledge Check

1.

b. The mission statement sums up in a few sentences what the company does, who it serves, and what differentiates it from its competitors.

2.

c. Corporate-level strategy covers the entire business in a complex organization in which there are multiple businesses, divisions, or operating units.

3.

d. A business’s overall strategy encompasses the plans, actions, objectives, and goals that outline how the business will compete in its chosen markets given its portfolio of products or services.

4.

b. A gap analysis is an internal analysis of a company or business unit used to identify deficiencies that may hinder its abilities to meet its goals.

5.

d. Goals should be realistic and have a reasonable chance of being met.

2.2 Knowledge Check

1.

a. The fact that the health club is the only facility in the area to offer water aerobics classes would be categorized as a strength in terms of a SWOT analysis.

2.

a. The BCG matrix captures the market share and market growth of products in a portfolio of offerings.

3.

c. A cash cow has high market share in a low-growth industry.

4.

c. Opportunities are openings for something positive to happen if you can capitalize on them.

5.

d. A company that pursues a product development strategy introduces new (and/or improved) products into the market to replace existing ones in order to improve its competitive position and sales.

2.3 Knowledge Check

1.

d. In this paragraph of the executive summary, you would describe the current marketplace and industry sectors in which you sell your products and/or services, the trends affecting and influencing them, and the innovations currently taking place within the market.

2.

c. In a SWOT analysis, strengths and weaknesses are factors that are internal to the organization.

3.

c. A perceptual map suggests where your product or service stands in relation to the competition.

4.

b. A SWOT analysis identifies key internal influences (strengths and weaknesses) and external influences (threats and opportunities).

5.

d. Within the current marketing situation of your marketing plan, you should include a competitive analysis and a discussion of how competitors fare in the marketplace.

2.4 Knowledge Check

1.

d. KPIs consist of a very focused selection of core variables that allow us to monitor the health/performance of the organization. We need enough indicators to evaluate the various critical aspects of the organization. We need to avoid having so many that the clutter obscures symptoms that should be highlighted.

2.

a. We should always monitor KPIs on a continuous basis. Some information is only available periodically when financials are produced and production statistics are rolled up. The use of real-time dashboards can make it possible to monitor KPIs in real time. The faster we can get the data, the faster we can make adjustments (when required).

3.

a. To calculate the CSAT score, take the total number of satisfied customers and divide that by the total number of responses. Then multiply that number by 100 to obtain the percentage. In this scenario, you add 500 and 300 to get 800. Then divide that by 1,825 to get .438. Multiple that by 100 for 44%.

4.

d. A single data point in isolation tells us very little. However, we can compare the data point to other data points (for example, historical results, forecasts, operating tolerances, or industry averages) to judge our effectiveness.

5.

d. We discussed the concept of lifetime customer value (LCV) in the text. Customer acquisition can be very expensive, especially with a missionary sell (e.g., convincing a customer that they have a need for an unknown product or service). Repeat purchases may not require any additional promotional expense. Happy customers also serve as brand ambassadors that spread the word about a company’s products/services. Negative reviews from brand ambassadors can be extremely damaging—we want to uncover any problems right away.