Ohio University, Athens

MKT 4630

Chapter 20-Monitoring and Controlling Firm Performance and Functioning

True/Questions

1)Steering control refers to starting the process, letting time pass, then observing whether or not the anticipated results have been achieved.

 

 

2. Feedback cycle is the time between firm actions and measured results

 

 

3. Post-action control refers to monitoring the process through time and making course corrections if results diverge from what is anticipated.

 

 

4. Annual profit and market share goals that are calendarized and tracked through time are examples of steering control.

 

 

5. Investment as a percentage of sales is a soft input measure.

 

 

6. Sales units and sales revenues are examples of “soft” measures.

 

 

7. Relative market share provides information of a firm’s market position versus its major competitors.

 

 

8. Market occupancy measures the breadth of a firm’s marketing activity.

 

 

9. Factoring is selling a firm’s accounts receivables.

 

 

10. Product contribution plus direct fixed cost is direct product profit.

 

 

11. Product contribution measures the extent to which sales revenues exceed variable costs.

 

12. Market share is the most common market-based measure, comparing the firm’s performance directly with competitors.

 

 

13. The fraction of potential customers with which the firm does business is information provided by market occupancy ratio.

 

 

14. The gross margin measures the extent to which sales revenues exceed variable costs.

 

 

15. The key action for a firm in which the strategy is good, but implementation is poor, is to improve implementation.

 

16. The purpose of determining a salesperson’s number of sales calls per day is to ensure that the sales force is working hard.

 

 

17. The average number of territories vacant is the sales force input measure that ensures sales force management is planning for sales force attrition.

 

 

18. A well-structured, validated, independently administered customer survey provides the best soft data.

 

 

19. The environmental scan is a comprehensive structured process for evaluating a firm’s marketing practice, including its strategy systems, activities, and organization.

 

 

20. The marketing audit is best performed by the company’s board of directors so that confidences can be assured and findings developed in an unbiased manner.

 

 

Multiple Choice Questions

 

21. According to the text, a firm should build its monitor-and-control processes on all of the following principles EXCEPT:

a.) Implement post-action control rather than steering control.

b.) Focus on market levers and develop alternative plans.

c.) Use the right performance measures at the right organizational levels.

d.) Model the relationships between input, intermediate, and output measures.

 

22. Which of the following types of control refers to starting the process, waiting a preset time, then comparing actual results against standards?

a.) Pre-action control b.) Steering control

c.) Post-action control

d.) Output control

 

23. Firms exercising                                  typically develop annual marketing plans and set standards by quarter.

a.) Pre-action control b.) Steering control

c.) Post-action control

d.) Output control

 

24. Firms exercising                                set control limits for performance and continually compare actual results against standards.

a.) Pre-action control

b.) Steering control

c.) Post-action control d.) Output control

 

25. Firms using                                set standards for measures like sales, market share, and profit, then calendarize by month, week, or even day.

a.) pre-action control

b.) steering control

c.) post-action control d.) output control

 

26. Which of the following is NOT mentioned in the text as a useful classification of output measures?

a.) Sales

b.) Market share

c.) Profits

d.) Financial resources

 

27. The time between firm actions and measured results is referred to as                              .

a.) output cycle b.) input cycle c.) steering cycle

d.) feedback cycle

 

28. Which of the following is NOT mentioned in the text as a way to classify revenue predictability?

a.) stagnant  b.) continuous

c.) periodic

d.) episodic

 

29. Building material sales following a hurricane is an example of which of the following classifications of revenue predictability?
    1. stagnant
    2. continuous
    3. periodic
    4. episodic

 

30. In order to earn positive net profits, profit contribution must                                .

a.) match fixed costs

b.) be less than marginal costs

c.) be less than total costs

d.) exceed fixed costs

 

31. Which of the following statements is FALSE? a.) Output measures are “lagging indicators.”

b.) Output measures represent the “rearview mirror.” c.) Output measures represent “what has happened.”

d.) Output measures are “leading indicators.”

 

32. All of the following statements are EXCEPT: a.) Input measures are “leading indicators.”

b.) Input measures represent the “dashboard.”

c.) Input measures represent “lagging indicators.”

d.) Input measures represent “what should happen.”

 

33. Internal hard measures include all of the following EXCEPT:

a.) Customer satisfaction

b.) Sales volume

c.) Product profitability d.) Customer profitability

 

34. Which of the following measures is an example of a “hard output measure”? a.) Customer satisfaction

b.) Market-occupancy ratio

c.) Brand health checks

d.) Sales volume

 

35.                                         is selling a firm’s accounts receivables. a.) Liquidating

b.) Discounting

c.) Factoring

d.) Surplusing

 

36. Product contribution less direct fixed cost is                                      . a.) direct product expense

b.) indirect product expense

c.) direct product profit

d.) indirect product profit

 

37. Product                                      measures the extent to which sales revenues exceed variable costs. a.) fixed

b.) profitability

c.) contribution

d.) gross

 

38.                                  measures the breadth of a firm’s marketing activity. a.) Return on assets

b.) Return on investment

c.) Market occupancy

d.) Customer lifetime value

 

39.                                       is the most common market-based measure, comparing the firm’s performance directly with competitors.

a.) Product profitability b.) Sales volume

c.) Market share

d.) Factoring

 

40. One of the most widely employed soft measure of firm performance mentioned in the text is

                                     . a.) market share b.) profitability

c.) customer satisfaction

d.) sales growth

 

41. The issue for which of the following strategic situations is to continue to monitor customers, competitors, and the general environment to ensure strategy remains on tract is                        . a.) Strategy good/implementation good

b.) Strategy good/implementation poor c.) Strategy poor/implementation good d.) Strategy poor/implementation poor

 

42. The key action for a firm in which of the following strategic situations is to improve execution to defend the firm’s position?

a.) Strategy good/implementation good

b.) Strategy good/implementation poor

c.) Strategy poor/implementation good d.) Strategy poor/implementation poor

 

43. Marketing audits can be a very effective diagnostic tool. The firm should especially look out for all of the following EXCEPT:

a.) Failure to segment markets effectively

b.) New product development gets delegated to developers

c.) Increasing prices in an attempt to increase value

d.) Considering marketing as the marketing department’s job

 

44. All of the following are examples of “hard output measures” EXCEPT:

a.) Customer satisfaction relative to competition

b.) Market share

c.) Customer retention versus industry averages d.) Investment as a percentage of sales

 

45. Which of the following best describes the purpose of the measure “sales territories vacant”? a.) Ensure sales force spends time with target accounts.

b.) Measure sales force discretionary costs. c.) Ensure sales force is working hard.

d.) Ensure sales managers plan for attrition.

 

46.     measures success in developing products for market readiness.

a.) “Test markets conducted”

b.) New concepts tested

c.) Sales calls on new accounts d.) New products launched

 

47. The                                       is a comprehensive, structured process for evaluating a firm’s marketing practice, including its strategy systems, activities, and organization.

a.) marketing plan

b.) marketing audit

c.) market analysis

d.) environmental scan

 

48. The marketing audit is best performed by                                    so that confidences can be assured and findings developed in an unbiased manner.

a.) the company’s board of directors b.) the company’s general manager

c.) an objective independent organization

d.) a subjective independent organization

 

49. All of the following questions are related to the marketing environment section of the marketing audit EXCEPT:

a.) “What changes can be identified among customers, competitors, and suppliers?”

b.) “Are the marketing objectives and strategy realistic given the market environment and the firm’s strengths?”

c.) “What social, political, technological, and regulatory trends are impacting the industry?” d.) “What are the implications for firm performance?”

 

50. Which of the following questions is NOT related to the marketing productivity sections of the marketing audit?

a.) “How is profitability distributed across the product line?”

b.) “Do some products/customers merit additional marketing effort?”

c.) “Are the various marketing-mix elements mutually consistent and do they implement the marketing strategy?”

d.) “How should marketing resources be allocated across the marketing mix?”

Essay Questions