Test Bank For
Strategic Market Management, 12th Edition David A. Aaker, Christine Moorman
Chapter 1 – Strategic Market Management: An Overview
Essay Question:
1.1
Describe and give examples of a well-developed business strategy including the four
characteristics.
Objective Questions:
1.1
Five management tasks used to develop strategic competencies do not include the
following:
a. Strategic analysis
b. Manage multiple business units
c. Identify competitors
d. Develop a sustainable advantage
e. Develop a growth platform
Answer: C. Identifying competitors is valuable but not one of the 5 management
tasks.
1.2
The book suggests that many markets are dynamic and require new strategic models.
Answer: False—the book asserts that all markets are dynamic.
1.3
To develop a sustainable competitive advantage (SCA) in dynamic markets, a company
must create multiple business units.
Answer: False. There are two routes to creating SCA’s, developing assets and
competencies and creating and leveraging organizational synergies between
multiple business units.
,1.4
A business is generally an organizational unit that has a distinct business strategy and a
manager with sales and profit responsibility.
Answer: True.
1.5
Synergy occurs when two businesses can reduce costs by sharing some asset such as a
sales force or logistics system.
Answer: True.
1.6
A strategy should only involve one value proposition – otherwise chaos will occur.
Answer: False. Most successful strategies involve more than one – for example, a
customer value proposition that involves innovation and customer intimacy such
as Virgin Atlantic Airways.
1.7
A strategic market management system will have more value for an organization that is
not engaged in complex markets with multiple channels and regional variation in
channels and products.
Answer: False. A strategic market management system is designed to help a
company (complex or not) to deal with the rapid changes that can occur in a
firm’s external environment.
1.8
The elements of strategy can be capsulated into four core elements--the product-market
investment decision, functional area strategies, the customer value proposition, and the
sustainable competitive advantage.
Answer: False. The four elements are: 1) the product-market investment strategy
2) the customer value proposition, 3) assets and competencies and synergies, and
4) functional area strategies. So while a sustainable competitive advantage is the
goal of a business strategy it is not one of the elements that make up a good
business strategy.
1.9
A strategic competency is what a business unit does exceptionally well, such a
manufacturing, promotion, distribution, etc. which has strategic importance to the
business.
Answer: True. This is the definition of a strategic competency.
1.10
According to the book, strategic marketing management has six objectives which include
all except one of the following:
(a) Precipitate the consideration of strategic choices.
(b) Contribute to the bottom line success of the firm.
(c) Force a long-range view.
, (d) Make the resource allocation decision visible.
(e) Provide methods to aid in strategic analysis and decision-making.
Answer: B. There is nothing that will guarantee the success of a business. In fact,
it is interesting to discuss that a strategy is evaluated after implementation; that is
when it is known whether a strategy is successful or not. .
1.11
The four elements of a business strategy for a firm are the product-market investment
decision, the functional strategies and program, the customer value proposition, and the
__________ and _________.
Answer: Assets and competencies.
1.12
The scope of a business is defined by the products it offers and chooses not to offer, by the
markets it does and does not seek to serve, by the competitors it chooses to compete with or
to avoid, and by its level of vertical integration.
Answer: True. This is the definition of a business scope.
1.13
Strategic marketing is involved in making decisions, some of which include investment
decisions. Of the following which is not an investment decision:
(a) Invest for growth
(b) Milk
(c) Maintain
(d) Liquidate
(e) Innovation
Answer: E.
1.14
An external analysis includes the analysis of the customers, the competitors, the
markets/submarkets and the environment.
Answer: True.
1.15
According to the book, customer analysis involves identifying the organization’s
customer segments and each segment’s motivations and priority needs.
Answer: False.
1.16
Strategic market management is a system designed to help management both precipitate
and make strategic decisions, as well as create strategic visions.
Answer: True. This is the definition of strategic market management.
1.17
Marketing’s role in strategy includes being the primary driver of strategic analysis.
Answer: True.
,1.18
The strategic plan should be developed annually.
Answer: False. It should be continuously refined.
,Chapter 2 – External and Customer Analysis
Essay Questions:
2.1
What is the objective of external analysis? How would you distinguish between an
effective and an ineffective external analysis? What would you say would be the most
useful way to conduct an external analysis? Why?
2.2
Define and illustrate the term ―strategic uncertainties.‖
Objective Questions:
2.1
A strategic uncertainty identifies the most important strategic options.
Answer: False. Strategic uncertainties focus on specific unknown elements that
will affect the outcome of strategic decisions.
2.2
An external analysis process should be able to affect strategy and to generate or evaluate
strategic decisions.
Answer: True. The external analysis process should not be an end in itself. It
should be motivated throughout by a desire to affect strategy, to generate or
evaluate strategic decisions.
2.3
The benefits sought from a product is a very useful segmentation variable, because the
selection of benefits can determine a total business strategy.
Answer: True.
2.4
A scenario is an alternative view of the future environment that is usually prompted by an
alternative possible answer to a strategic uncertainty or by a prospective future event or
trend.
Answer: True. This is the definition of a scenario.
2.5
In a strategic context, segmentation means the identification of customer groups that
respond differently from other groups to competitive offerings.
Answer: True. This is the definition of segmentation.
, 2.6
One of the tasks in customer motivation analysis is to determine the relative importance
of the motivations.
Answer: True. The importance of the motivation will help determine the strategic
role that motivation will play in the business strategy.
2.7
A customer analysis consists of three components; segmentation, customer motivation,
and ________________.
Answer: Unmet needs. This is the definition of customer analysis. Customer
analysis can be usefully partitioned into an understanding of how the market
segments, an analysis of customer motivations, and an exploration of unmet
needs.
2.8
Uncertainty can be handled by precipitating a strategic decision, by obtaining information
to reduce the uncertainty, and by ___________.
Answer: Scenario analysis. The three ways of handling uncertainty are: 1) a
strategic decision can be precipitated because the logic for a decision is
compelling and/or because a delay would be costly or risky. Second, it may be
worthwhile to attempt to reduce the uncertainty by information acquisition and
analysis of an information-need area. Third, the uncertainty could be modeled by
a scenario analysis.
2.9
To gain customers as active partners, managers should do all of the following except:
a. Co-create personalized experiences
b. Encourage active dialogue
c. Ignore the complainers
d. Mobilize customer communities
e. Manage customer diversity
Answer: C. Customers are increasing becoming active partners in the buying
process, rather than being seen as passive targets of product development and
advertising.
2.10
Toyota Scion is aimed at generation Y, the echo boomers.
Answer: True
2.11
The retro-sexual is an affluent urban sophisticate aged 20 to 40.
Answer: False. See The Male Shopper page 26.
Strategic Market Management, 12th Edition David A. Aaker, Christine Moorman
Chapter 1 – Strategic Market Management: An Overview
Essay Question:
1.1
Describe and give examples of a well-developed business strategy including the four
characteristics.
Objective Questions:
1.1
Five management tasks used to develop strategic competencies do not include the
following:
a. Strategic analysis
b. Manage multiple business units
c. Identify competitors
d. Develop a sustainable advantage
e. Develop a growth platform
Answer: C. Identifying competitors is valuable but not one of the 5 management
tasks.
1.2
The book suggests that many markets are dynamic and require new strategic models.
Answer: False—the book asserts that all markets are dynamic.
1.3
To develop a sustainable competitive advantage (SCA) in dynamic markets, a company
must create multiple business units.
Answer: False. There are two routes to creating SCA’s, developing assets and
competencies and creating and leveraging organizational synergies between
multiple business units.
,1.4
A business is generally an organizational unit that has a distinct business strategy and a
manager with sales and profit responsibility.
Answer: True.
1.5
Synergy occurs when two businesses can reduce costs by sharing some asset such as a
sales force or logistics system.
Answer: True.
1.6
A strategy should only involve one value proposition – otherwise chaos will occur.
Answer: False. Most successful strategies involve more than one – for example, a
customer value proposition that involves innovation and customer intimacy such
as Virgin Atlantic Airways.
1.7
A strategic market management system will have more value for an organization that is
not engaged in complex markets with multiple channels and regional variation in
channels and products.
Answer: False. A strategic market management system is designed to help a
company (complex or not) to deal with the rapid changes that can occur in a
firm’s external environment.
1.8
The elements of strategy can be capsulated into four core elements--the product-market
investment decision, functional area strategies, the customer value proposition, and the
sustainable competitive advantage.
Answer: False. The four elements are: 1) the product-market investment strategy
2) the customer value proposition, 3) assets and competencies and synergies, and
4) functional area strategies. So while a sustainable competitive advantage is the
goal of a business strategy it is not one of the elements that make up a good
business strategy.
1.9
A strategic competency is what a business unit does exceptionally well, such a
manufacturing, promotion, distribution, etc. which has strategic importance to the
business.
Answer: True. This is the definition of a strategic competency.
1.10
According to the book, strategic marketing management has six objectives which include
all except one of the following:
(a) Precipitate the consideration of strategic choices.
(b) Contribute to the bottom line success of the firm.
(c) Force a long-range view.
, (d) Make the resource allocation decision visible.
(e) Provide methods to aid in strategic analysis and decision-making.
Answer: B. There is nothing that will guarantee the success of a business. In fact,
it is interesting to discuss that a strategy is evaluated after implementation; that is
when it is known whether a strategy is successful or not. .
1.11
The four elements of a business strategy for a firm are the product-market investment
decision, the functional strategies and program, the customer value proposition, and the
__________ and _________.
Answer: Assets and competencies.
1.12
The scope of a business is defined by the products it offers and chooses not to offer, by the
markets it does and does not seek to serve, by the competitors it chooses to compete with or
to avoid, and by its level of vertical integration.
Answer: True. This is the definition of a business scope.
1.13
Strategic marketing is involved in making decisions, some of which include investment
decisions. Of the following which is not an investment decision:
(a) Invest for growth
(b) Milk
(c) Maintain
(d) Liquidate
(e) Innovation
Answer: E.
1.14
An external analysis includes the analysis of the customers, the competitors, the
markets/submarkets and the environment.
Answer: True.
1.15
According to the book, customer analysis involves identifying the organization’s
customer segments and each segment’s motivations and priority needs.
Answer: False.
1.16
Strategic market management is a system designed to help management both precipitate
and make strategic decisions, as well as create strategic visions.
Answer: True. This is the definition of strategic market management.
1.17
Marketing’s role in strategy includes being the primary driver of strategic analysis.
Answer: True.
,1.18
The strategic plan should be developed annually.
Answer: False. It should be continuously refined.
,Chapter 2 – External and Customer Analysis
Essay Questions:
2.1
What is the objective of external analysis? How would you distinguish between an
effective and an ineffective external analysis? What would you say would be the most
useful way to conduct an external analysis? Why?
2.2
Define and illustrate the term ―strategic uncertainties.‖
Objective Questions:
2.1
A strategic uncertainty identifies the most important strategic options.
Answer: False. Strategic uncertainties focus on specific unknown elements that
will affect the outcome of strategic decisions.
2.2
An external analysis process should be able to affect strategy and to generate or evaluate
strategic decisions.
Answer: True. The external analysis process should not be an end in itself. It
should be motivated throughout by a desire to affect strategy, to generate or
evaluate strategic decisions.
2.3
The benefits sought from a product is a very useful segmentation variable, because the
selection of benefits can determine a total business strategy.
Answer: True.
2.4
A scenario is an alternative view of the future environment that is usually prompted by an
alternative possible answer to a strategic uncertainty or by a prospective future event or
trend.
Answer: True. This is the definition of a scenario.
2.5
In a strategic context, segmentation means the identification of customer groups that
respond differently from other groups to competitive offerings.
Answer: True. This is the definition of segmentation.
, 2.6
One of the tasks in customer motivation analysis is to determine the relative importance
of the motivations.
Answer: True. The importance of the motivation will help determine the strategic
role that motivation will play in the business strategy.
2.7
A customer analysis consists of three components; segmentation, customer motivation,
and ________________.
Answer: Unmet needs. This is the definition of customer analysis. Customer
analysis can be usefully partitioned into an understanding of how the market
segments, an analysis of customer motivations, and an exploration of unmet
needs.
2.8
Uncertainty can be handled by precipitating a strategic decision, by obtaining information
to reduce the uncertainty, and by ___________.
Answer: Scenario analysis. The three ways of handling uncertainty are: 1) a
strategic decision can be precipitated because the logic for a decision is
compelling and/or because a delay would be costly or risky. Second, it may be
worthwhile to attempt to reduce the uncertainty by information acquisition and
analysis of an information-need area. Third, the uncertainty could be modeled by
a scenario analysis.
2.9
To gain customers as active partners, managers should do all of the following except:
a. Co-create personalized experiences
b. Encourage active dialogue
c. Ignore the complainers
d. Mobilize customer communities
e. Manage customer diversity
Answer: C. Customers are increasing becoming active partners in the buying
process, rather than being seen as passive targets of product development and
advertising.
2.10
Toyota Scion is aimed at generation Y, the echo boomers.
Answer: True
2.11
The retro-sexual is an affluent urban sophisticate aged 20 to 40.
Answer: False. See The Male Shopper page 26.
