Eastern Michigan University MKT 510A Chapter 18 -Managing Transformation Marketing True/False Questions 1)Empowering is encouraging and empowering personnel to produce more ideas and take more initiative

Eastern Michigan University

MKT 510A

Chapter 18 -Managing Transformation Marketing True/False Questions

1)Empowering is encouraging and empowering personnel to produce more ideas and take more initiative.

2. The four types of marketing controls are annual-plan, profitability, efficiency, and strategic.

3. A marketing audit is a comprehensive, systematic, internal, and periodic examination of a company’s or business units’ marketing environment.

4. The four characteristics of a marketing audit are comprehensive, systematic, independent, and periodic.

5. Top management has recognized that past marketing has been highly effective and is pleased with the accountability from marketing.

6. A set of measures that helps firms to quantify, compare, and interpret their marketing performance is called marketing metrics.

7. A stakeholder-performance scorecard tracks the satisfaction with the company and its products and services among such entities as suppliers, banks, and stockholders.

8. Sales-variance analysis measures the relative contribution of different factors to a gap in sales performance.

9. All the buyers who are able and willing to buy a company’s products or services are called the overall market share.

10. The key ratio to watch in annual-plan control to make sure that the company is not overspending to achieve sales goals is the marketing expense-to-sales ratio.

11. The return on net worth is the product of two ratios: the company’s return on assets and its asset turnover ratio.

12. Gross margin minus (-) expenses equals (=) net profit.

13. Direct costs are common costs whose allocation to the marketing entities is highly arbitrary.

14. Especially popular with such companies as Procter & Gamble, marketing-mix modeling is used to allocate or reallocate expenditures.

15. The production department is responsible for preparing sales forecasts because

they have the most data about production schedules and the ability to meet orders.

16. Among all factors in marketing pattern, the predominant one is the marketing motivations determined by marketing concepts.

17. More than ever, senior managers are holding marketers accountable for marketing investments and asking that marketing expenditures be justified.

18. Marketing-profitability analysis is a broader version of activity-based cost accounting (ABC) to quantify the true profitability of different activities

19. To build a creative marketing organization is to build a capability in strategic innovation and imagination.

20. The contribution of activity-based cost accounting (ABC) is to refocus

management’s attention away from using actual costs of supporting individual products, customers, and other entities toward using only labor or material standard costs to allocate full costs.

21. Marketing accountability means that marketers can more precisely estimate the effects of different marketing investments.

22. Only managers at the front-line level need to be personally involved in knowing, meeting, and serving customers.

23. To create a market- and customer- focused company, a CEO can take many steps, such as to shift a process-outcome focus to a department focus.

24. Marketing management effectiveness describes whether an organization’s

output meets its goal or expectations reflecting an organization’s marketing management capacity and deficiency.

25. The marketing audit only focuses on marketing weaknesses and trouble spots.

26. A summary set of relevant internal and external measures can be assembled in a marketing dashboard for synthesis and interpretation.

27. Marketing-mix model is more effective at assessing how different marketing elements work in combination.

28. To improve marketing management efficiency is to measure and control marketing implementation.

29. A strategic marketing plan can be successful even without marketing implementation.

30. An effective dashboard is to improve integrated marketing communications, and reveal where marketing investments are paying off and where they aren’t.

Multiple Choice Questions

31. A Brand-asset management team (BAMT)                             .

1. concerns itself with the brand only during the marketing audit
2. consists of key brand managers from other companies
3. consists of management personnel from other departments
4. consists of top evel mangers reviewing the brand during an audit
5. consists of key representatives from major functions affecting the brand’s performance

32.                          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.

1. Marketing plan
2. Marketing management
3. Marketing audit
4. Marketing intelligence
5. Marketing metrics

33. The four characteristics of a marketing audit are                             .

1. product orientation, market orientation, innovation orientation, productivity orientation
2. comprehensive, systematic, independent, periodic
3. comprehensive, systematic, periodic, corporate
4. systematic, as needed, comprehensive, independent
5. compartmentalized, systematic, periodic, independent         

34. Four areas for efficiency control that firms must evaluate are                              .

1. personnel efficiency, distribution efficiency, advertising efficiency, brand profitability
2. sales force efficiency, profitability efficiency, brand efficiency, distribution efficiency
3. sales force efficiency, brand margin efficiency, distribution efficiency, advertising efficiency
4. sales force efficiency, advertising efficiency, sales promotion efficiency, distribution efficiency
5. sales force efficiency, advertising efficiency, brand profitability, distribution efficiency

35. The control process includes the following                             .

1. goal setting, performance measurement, performance diagnosis, corrective action
2. goal setting, brand review, marketing audit, corrective action
3. brand audit, control review, efficiency control, corrective action
4. management scorecard, goal setting, marketing audit, corrective action
5. efficiency control, strategic control, goal setting, corrective action  

36. One of the cardinal rules in conducting the marketing audit is                               .

1. it has to be independent
2. do not rely solely on company managers for data and opinions
3. it has to be conducted periodically and comprehensively
4. a “short version” of a marketing audit is satisfactory
5. a marketing audit is not necessary except when the company is in trouble   

37. Going forward there are a number of imperatives to achieving marketing excellence. Marketing must be “holistic” and less departmental. Marketers must achieve larger influence in the company if they are to be the main architects of business strategy.

In addition, marketers must                         .

1. 1. create new ideas if the company is to prosper in a hypercompetitive market
   2. marketers must strive for customer insight and treat customers differently but appropriately
   3. marketers must build strong brands through performance, more than through promotion
   4. marketers must go electronic and win through building superior information and communications systems
   5. all of the above

38. Your firm has had three quarters of declining sales. You have traced the

problems to distribution efficiency shortcomings. Which of the following should you track to ensure that the firm’s distribution efficiency is maximized?

1. 1. Logistics as a percentage of sales.
   2. Percentage of sales sold on deal.
   3. Before and after measures of the product’s performance.
   4. Number of lost customers per quarter.
   5. Costs per inquiry.

39. Sales managers need to monitor the following key indicators of efficiency in their territories that include        .

1. average number of calls per salesperson per day
2. average sales call time per contact
3. average revenue per sales call
4. average cost per sales call
5. all of the above

40. Marketers are increasing being held accountable for their                              and must be able to justify marketing expenditures to senior management.

1. product quotas
2. employees
3. own training
4. investments
5. personal character traits

41. Two complimentary approaches to measure marketing productivity are and marketing-mix modeling to estimate casual relationships and how

marketing activity affects outcomes.

1. quality ratios
2. salesperson satisfaction scales
3. marketing metrics to assess marketing effects
4. distributor satisfaction surveys
5. end-user samples

42. is(are) the set of measures that helps firms to quantify, compare, and

interpret their marketing performance.

1. Marketing diagnostics
2. Psychographics
3. Demographics
4. Marketing intelligence
5. Marketing metrics

43. A_________ records how well the company is doing year after year on

customer-based measures (e.g., percentage of new customers to average number of customers).

1. customer-performance scorecard
2. stakeholder-performance scorecard
3. mission/objectives scorecard
4. variance scorecard
5. management scorecard

44. If a company actively tracks the performance of its suppliers, banks, and distributors, it is using what is called a                                                                         .

1. customer-performance scorecard
2. stakeholder-performance scorecard
3. mission/objectives scorecard
4. variance scorecard
5. management scorecard

45.                        consists of measuring and evaluating actual sales in relation to goals.

1. ROI analysis
2. Demand
3. Sales analysis
4. Performance reviews
5. Trend lines

46. Which of the following ways to measure market share would be seen as the company’s sales expressed as a percentage of total market sales?

1. Overall market share
2. Served market share
3. Relative market share
4. Delayed market share
5. Designed market share

47. If Dell computer was seen as having a 120 percent market share and a close competitor was seen as having 90 percent market share, the market share analysis (measurement) would expressed as                                .

1. overall market share
2. served market share
3. relative market share
4. dual market share
5. top dog market share

48. All of the following are components of a method (formula) that can analyze market share movements EXCEPT                                                                    .

1. customer penetration
2. competitor penetration
3. customer loyalty
4. customer selectivity
5. price selectivity

49. Annual-plan control requires making sure that the company is not overspending to achieve sales goals. The key ratio to watch is the                                                                         .

1. marketing profitability ratio
2. marketing sales ratio
3. share of mind ratio
4. marketing expense-to-sales ratio
5. marketing deliverables ratio

50. A                         can be used to track period-to-period fluctuations in each ratio (e.g., marketing expense-to-sales ratio) used assist in annual-plan control.

1. Gantt chart
2. Likert scale
3. control chart
4. time chart
5. profitability chart

51. According to the financial model of return on net worth, return on assets times

(X) financial leverage equals (=)                             .

1. profit margin
2. asset turnover
3. sales expenses
4. rate of return on net worth
5. the acid test ratio

52. Net profits divided by net sales equals (=)                            .

1. asset turnover
2. profit margin
3. return on assets
4. financial leverage
5. rate of return on net worth

53. If a company’s profit and loss statement showed that sales for the month were

$60,000 and cost of goods sold were $39,000, what would be the gross margin? a.   $99,000

b.           $21,000

3. 65 percent
4. 153.84 percent
5. Would be unable to calculate given the problem’s figures.

54. A manager observes that his last month’s salaries were $9,300, rent was

$3,000, and supplies used by the company were $3,500. Considering that his company’s gross margin was $21,000, what would be his net profit for the period?

a.           $36,800

b.           $60,000

c.           $5,200

d.           $10,400

e.          Would be unable to calculate given the problem’s figures.   

55. Which of the following would be considered to be a direct cost?

1. Rent.
2. Corporate image expenditures.
3. Public relations expenditures.
4. Leasing of business space.
5. Sales commissions.

56. A useful way to analyze market share movements is in terms of four components where overall market share equals (=) customer penetration times (X) customer loyalty times (X) customer selectivity times (X)                                                                                                 .
    1. promotion sensitivity
    2. price selectivity
    3. brand loyalty
    4. cultural affinity
    5. distribution opportunities

57. One of the essential components of a model for calculating return on net worth is financial leverage. In this context, financial leverage is equal (=) to                                                                  .

1. net profits divided by net sales
2. net sales divided by total assets
3. total assets divided by net worth
4. net profits divided by total assets
5. net profits divided by net worth

58. Sally is reviewing how to re-figure a variety of expenses and costs associated

with a recent marketing effort. Her first task is to identify the direct costs associated with that effort. Which of the following would be the best example of a direct cost associated with a marketing effort?

1. Rent

2. Public relation’s image
3. Top management salaries
4. Sales commissions
5. Interest on debt

59. The marketing excellence review of best practices includes as “excellent” firms that are or have changed to become                                                                    _.

1. market-driven
2. niche orientated and customer orientated
3. value-driven
4. core-competency orientated
5. all of the above

60. A number of “deadly sins” signal that the marketing program is in trouble. With the following signs, identify the “sin.”

“Poor identification of market segments, poor prioritization of market segments, no

market segment managers, employees who think that it is the job of marketing and sales to serve customers, no training program to create a customer culture, no incentives to treat the customer especially well.”

1. The company is not sufficiently market-focused and customer-driven.
2. The company does not fully understand its target markets.
3. The company’s marketing planning process is deficient.
4. The company’s brand building and communications are weak.
5. The company needs to better define and monitor is competitors.   

61. To improve profitability, managers have the following options BUT                     .

1. Reduce the resources required to perform various activities
2. Market the researches more productive
3. Acquire resources at lower cost
4.          Raise prices on products that consumer least amount of support resources.               

62. Marketing-mix models analyze data from a variety of sources BUT:

1. Retailer scanner data
2. Company shipment data
3. Market share data
4.          Pricing, media, and promotion spending data            

63. The customer-oriented organization pyramid set                            at the top

1. Management

2. Front-line people
3. Customers
4. Share holders

64. Apart from marketing metrics, another complementary approaches to measure marketing productivity is:

1. Marketing audit
2. Marketing-mix modeling
3. Marketing metrics
4. Customer-based measures

65. A higher level of employee satisfaction could lead to:

1. Higher effort
2. Higher quality products and services
3. Higher customer satisfaction
4. More repeat business
5. All of the above

Essay Questions

66. Outline and explain the four steps of marketing control process needed by companies, and the overall purpose of the controls.

67. Define the four components of a marketing audit.

68. List four external marketing metrics that will be useful for the marketing researcher.

69. Sales analysis uses two specific tools for measuring and evaluating actual sales in relation to goals. What are those two tools?

70. Annual-plan control requires making sure that the company is not overspending to achieve sales goals. What key ratio is watched closely? How are fluctuations of this ratio tracked?

71. Describe and summarize the characteristics of a great marketing company.