Chapter 01 - Imperatives for a Market-Driven Strategy

Chapter 01
Imperatives for a Market-Driven Strategy
True / False Questions

1. (p. 4) For companies that are becoming market oriented the skills of top management only are
required.
FALSE

Difficulty: Moderate

2. (p. 5) All the major components of distinctive capabilities are organizational processes and
assets.
FALSE

Difficulty: Easy

3. (p. 7) Superior customer value results from a very favorable use experience of the customer
compared to expectations of the customer and the value offerings of competitors.
TRUE

Difficulty: Easy

4. (p. 10) Corporate strategy consists of the decisions made by top-management and the
resulting actions taken to achieve the objectives set for the corporation.
TRUE

Difficulty: Easy

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Chapter 01 - Imperatives for a Market-Driven Strategy

5. (p. 12) A strategic business unit (SBU) is a cohesive organizational unit that is separately
managed, incurs costs and, does not generate sales.
FALSE

Difficulty: Moderate

6. (p. 13) Strategic marketing links the company with the environment and marketing is the
responsibility of the entire business.
TRUE

Difficulty: Challenging

7. (p. 14) A product-market consists of a specific product or product line that can satisfy a set of
needs and wants for the people willing and able to purchase it.
TRUE

Difficulty: Moderate

8. (p. 14) The objective of strategic market segmentation is to identify segments within the
product-market of interest.
TRUE

Difficulty: Moderate

9. (p. 14) Customer relationship management does not emphasize delivering superior customer
value.
FALSE

Difficulty: Challenging

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Chapter 01 - Imperatives for a Market-Driven Strategy

10. (p. 15) The purpose of market targeting strategy is to select people or organizations that
management wishes to serve in the product-market.
TRUE

Difficulty: Easy

Multiple Choice Questions

11. (p. 4) _____ is more than a philosophy since it consists of a process for delivering customer
value.
A. Market orientation
B. Competitor intelligence
C. Cross-functional coordination
D. Distinctive capabilities

Difficulty: Moderate

12. (p. 4) Answering the questions 'which competitors, what technologies and how customers
perceive being satisfied' comes from _____.
A. Market orientation
B. Competitor intelligence
C. Cross-functional coordination
D. Distinctive capabilities

Difficulty: Easy

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Chapter 01 - Imperatives for a Market-Driven Strategy

13. (p. 4) Getting all business functions working together to provide superior customer value is
_____.
A. Market orientation
B. Competitor intelligence
C. Cross-functional coordination
D. Distinctive capabilities

Difficulty: Easy

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Chapter 01 - Imperatives for a Market-Driven Strategy

14. (p. 5) _____ is/are a bundle(s) of knowledge that enables firms to make use of their assets.
A. Market orientation
B. Competitor intelligence
C. Cross-functional coordination
D. Distinctive capabilities

Difficulty: Moderate

15. (p. 7) _____ consist(s) of the benefits and costs resulting from the purchase and use of
products as perceived by the buyer.
A. Customer Value
B. Distinctive capabilities
C. Customer linking
D. Customer Relationships

Difficulty: Easy

16. (p. 9) _____ consist(s) of deciding the scope and purpose of the business, the objectives and
the resources necessary to achieve the objectives.
A. Corporate strategy
B. Business and marketing strategy
C. Market sensing
D. Customer relationship management

Difficulty: Easy

17. (p. 11) What defines the corporation and what provides guidelines for managing the
corporation is _____.
A. Corporate strategy
B. Business and marketing strategy
C. Corporate vision
D. Customer relationship management

Difficulty: Easy

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Chapter 01 - Imperatives for a Market-Driven Strategy

18. (p. 11) The _____ is/are set at several levels of the company and includes the time frame
necessary for strategic change.
A. Corporate strategy
B. Business and marketing strategy
C. Corporate vision
D. Corporate objectives

Difficulty: Moderate

19. (p. 13) The focus of _____ is on organizational performance rather than a primary concern
about increasing sales.
A. Corporate strategy
B. Strategic marketing
C. Corporate vision
D. Corporate objectives

Difficulty: Moderate

20. (p. 14) _____ offers a company the opportunity to focus its business on the requirements of
one or more groups of buyers.
A. Corporate strategy
B. Strategic marketing
C. Market segmentation
D. Corporate responsiveness

Difficulty: Moderate

21. (p. 14) A _____ is described by characteristics of people including why they buy and their
preferences for brands of products.
A. Customer relationship management system
B. Strategic marketing objective
C. Market segment
D. Corporate capability

Difficulty: Moderate

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Chapter 01 - Imperatives for a Market-Driven Strategy

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Chapter 01 - Imperatives for a Market-Driven Strategy

22. (p. 14) A(n) _____ is formed according to the type of industry or the uses of the product.
A. Customer relationship management system
B. Strategic marketing objective
C. Industrial market segment
D. Corporate capability

Difficulty: Moderate

23. (p. 14) _____ emphasizes delivering superior customer value by personalizing the
interaction between the customer and the company.
A. Customer relationship management
B. Strategic marketing
C. Market segmentation
D. Corporate positioning

Difficulty: Moderate

24. (p. 14) When a company decides what organizations it wishes to serve in the productmarket, the company is engaged in choosing the _____.
A. Customer relationship management
B. Strategic marketing
C. Market target
D. Corporate positioning

Difficulty: Moderate

25. (p. 15) A company that is deciding the _____ objectives is likely to include the level of sales
they wish to achieve.
A. Customer relationship management
B. Strategic marketing
C. Market target
D. Corporate positioning

Difficulty: Challenging

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Chapter 01 - Imperatives for a Market-Driven Strategy

26. (p. 15) A _____ is the combination of the product, value chain, price and promotion
strategies a firm uses to position itself against its competitors in meeting the needs of a market
target.
A. Customer relationship strategy
B. Strategic market
C. Market target
D. Positioning strategy

Difficulty: Easy

27. (p. 15) A _____ seeks to have the brand own a place in the eyes and mind of the buyer and
the product be distinguished from the products of the competition.
A. Customer relationship strategy
B. Strategic market
C. Market target
D. Positioning strategy

Difficulty: Moderate

28. (p. 15) The product, distribution, price and promotion strategy components are used to
influence the buyers' _____ of the brand.
A. Relationship strategy
B. Idea
C. Market target
D. Positioning

Difficulty: Challenging

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Chapter 01 - Imperatives for a Market-Driven Strategy

29. (p. 16) The product, distribution, price and promotion strategy components are the marketing
_____.
A. Relationship
B. Idea
C. Target
D. Mix

Difficulty: Easy

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Chapter 01 - Imperatives for a Market-Driven Strategy

30. (p. 17) Companies will use a _____ to contact and deliver product to the market target
buyers.
A. Product strategy
B. New idea strategy
C. Value-chain strategy
D. Relationship strategy

Difficulty: Challenging

Essay Questions
31. (p. 7) Discuss how customers perceive value and how companies deliver customer value.
Intense global competition and the increasing demands of ever-more sophisticated customers
make the creation of customer value an important challenge for managers. Offering superior
customer value is at the core of business design. Buyers form value expectations and decide to
purchase goods and services based on their perceptions of products' benefits less the total
costs incurred. Customer satisfaction indicates how well the product use experience compares
to the buyer's value expectations. Superior customer value results from a very favorable use
experience compared to expectations and the value offerings of competitors. The
organization's distinctive capabilities are used to deliver value by differentiating the product
offer, offering lower prices relative to competing brands or a combination of lower cost and
differentiation. Deciding which avenue to follow requires matching capabilities to the best
value opportunities.

Difficulty: Moderate

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Chapter 01 - Imperatives for a Market-Driven Strategy

32. (p. 7) Explain the logic of pursuing a market-driven strategy.

Becoming more market oriented, leveraging the distinctive capabilities and finding a good
match between customers' value requirements and the organization's capabilities is important
for companies. The supporting logic for these actions is that they are expected to lead to
superior customer value and organizational performance. Research evidence indicates that
these characteristics are present in market-driven organizations, which display higher
performance than their counterparts that are not market driven. A market-driven organization
must identify which capabilities to develop and which investment commitments to make.
Market orientation research and evolving business strategy paradigms point to the importance
of market sensing and customer linking capabilities in achieving successful market-driven
strategies.

Difficulty: Moderate

33. (p. 8) What is the relationship between the corporate strategy and the business and
marketing strategies?
The relationship between corporate, business and marketing strategy is as follows. Corporate
strategy consists of deciding the scope and purpose of the business, its objectives and the
initiatives and resources necessary to achieve the objectives. Business and marketing strategy
is guided by the decisions top management makes about how, when and where to compete.
This should be a two-way relationship while corporate strategy defines strategic direction,
allocates resources and defines constraints on what cannot be done, executives responsible for
marketing strategy have a responsibility to inform corporate strategists about external change
in the market that identifies opportunities and threats.

Difficulty: Challenging

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Chapter 01 - Imperatives for a Market-Driven Strategy

34. (p. 15) Discuss the role of market targeting in the company's marketing strategy.
A core issue is deciding how, when and where to compete, given a firm's market and
competitive environment. The purpose of market targeting strategy is to select the people (or
organizations) that management wishes to serve in the product-market. When buyers' needs
and wants vary, the market target is usually one or more segments of the product-market.
Once the segments are identified and their relative importance to the firm determined, the
targeting strategy is selected. The objective is to find the best match between the value
requirements of each segment and the organization's distinctive capabilities. The targeting
decision is the focal point of marketing strategy since targeting guides the setting of
objectives and developing a positioning strategy. Examples of market target objectives are
desired levels of sales, market share, customer retention, profit contribution and customer
satisfaction.

Difficulty: Moderate

35. (p. 15) Discuss the role of positioning strategy in the company's marketing strategy.
Positioning strategy is the combination of product, value chain, price and promotion strategies
a firm uses to position itself against its key competitors in meeting the needs and wants of the
market target. The strategies and tactics used to gain a favorable position are called the
marketing mix or the marketing program. The positioning strategy seeks to position the brand
in the eyes and mind of the buyer and distinguish the product from the competition. The
product, distribution, price and promotion strategy components make up a bundle of actions
that are used to influence buyers' positioning of a brand.

Difficulty: Moderate

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