Question 1

A business firm's only objective should be to earn enough profit to survive.

Accepted Answer

While earning a profit is certainly a primary objective for most businesses, it is not the only objective. Other important objectives might include providing quality goods or services, building strong customer relationships, fostering employee satisfaction, and contributing to the community.

Question 2

A mission statement substitutes for more specific objectives.

Accepted Answer

A mission statement provides an overall direction and purpose for an organization, but it does not replace the need for specific objectives that are measurable and focused on achieving the mission. Specific objectives help to clarify and guide actions towards achieving the broader mission.

Question 3

Trying to maximize short-run return on investment may not be good in the long run.

Accepted Answer

Maximizing short-run return on investment may lead to neglecting long-term sustainability and growth opportunities, which could ultimately result in lower returns in the long run. It's important to balance short-term gains with long-term goals and strategies.

Question 4

Earning a profit probably should be one of the objectives of a firm, but it should not be the only one.

Accepted Answer

While earning a profit is important for the survival and growth of a firm, it should not be the sole focus. Other objectives such as creating value for customers, providing quality products or services, fostering innovation, and contributing to the community and society should also be considered. A balanced approach that takes into account the interests of all stakeholders (customers, employees, investors, society, and the environment) is necessary for long-term success and sustainability.

Question 5

Ownership of patents, a familiar brand name, and financial strength are some of the many resources of a firm that a manager should evaluate when searching for new opportunities.

Accepted Answer

Yes, ownership of patents, a recognizable brand name, and financial strength are all important resources that can provide a firm with a competitive advantage and help it identify new opportunities for growth and expansion. A manager should definitely consider these factors when evaluating potential opportunities for their organization.

Question 6

The objectives of a firm should direct the operation of the marketing department, but aren't important to the rest of the business.

Accepted Answer

The objectives of a firm should guide the entire business, not just the marketing department. All departments should work together towards achieving the overall goals of the firm.

Question 7

Smaller producers always have a great advantage in competing with larger producers because of their flexibility.

Accepted Answer

Smaller producers may have advantages in flexibility and adaptability, but larger producers often have advantages in economies of scale, access to capital, and market reach, which can outweigh the benefits of flexibility.

Question 8

If the cost of production per unit goes down as the quantity produced increases, small producers can be at a great cost disadvantage.

Accepted Answer

This is because larger producers can take advantage of economies of scale, which allows them to spread their fixed costs over a larger number of units, resulting in lower costs per unit. Small producers, on the other hand, may not have the resources or volume to achieve the same level of cost savings.

Question 9

A mission statement sets out the organization's basic purpose for being.

Accepted Answer

A mission statement is a brief statement that expresses the purpose for which an organization exists and its reason for being.

Question 10

Company objectives should lead to a hierarchy of marketing objectives.

Accepted Answer

Company objectives should cascade down to specific marketing objectives in order to align marketing efforts with overall business goals. This hierarchy ensures that all marketing initiatives support the achievement of larger business objectives.

Question 11

A patent owner has a 20-year monopoly to develop and use its new product, process, or material.

Accepted Answer

According to the US Patent and Trademark Office (USPTO), a patent owner is granted a 20-year monopoly to develop, use, and sell their invention.

Question 12

A large producer with economies of scale always has a competitive advantage over smaller firms.

Accepted Answer

Economies of scale can provide a competitive advantage in terms of lower unit costs, but they do not guarantee an overall competitive advantage. Smaller firms can compete effectively by being more flexible, innovative, offering better customer service, or targeting niche markets where larger firms may not operate as efficiently.

Question 13

A mission statement sets out the strengths and weaknesses of a firm as well as the opportunities and threats that it faces.

Accepted Answer

A mission statement defines the purpose, core values, and direction of an organization, not its strengths, weaknesses, opportunities, and threats (which are typically outlined in a SWOT analysis).

Question 14

Good marketing objectives should be ambitious and almost impossible to achieve.

Accepted Answer

Good marketing objectives should be challenging but also realistic and achievable within a reasonable time frame. Setting goals that are too ambitious and impossible to achieve can become demotivating and lead to failure. It is important to set SMART (Specific, Measurable, Achievable, Relevant, and Time-bound) goals to ensure that they are realistic and attainable.

Question 15

A mission statement should focus on just the key goals for the organization.

Accepted Answer

A mission statement should provide a clear and concise statement of the organization's overall purpose and the key goals that it seeks to accomplish. It should focus on the most important aspects of the organization's mission and should be easily understood by all stakeholders.

Question 16

The marketing manager can control the variables in the market environment.

Accepted Answer

The marketing manager cannot control the variables in the market environment as they are external factors beyond their control such as economic conditions, competition, government regulations, social and cultural factors, etc. They can only plan and strategize according to these variables to adapt to the changes in the market environment.

Question 17

As compared to larger competitors, smaller firms benefit from lower unit costs which they achieve with lower sales volumes.

Accepted Answer

Smaller firms often have higher unit costs compared to larger competitors due to economies of scale, which allow larger firms to spread fixed costs over a larger number of units, reducing the cost per unit.

Question 18

A mission statement can help a manager decide which opportunities to pursue and which to screen out.

Accepted Answer

A well-crafted mission statement provides a clear understanding of what the organization is all about and what goals it wants to achieve. This clarity can guide a manager's decision-making process by helping them understand which opportunities align with the organization's mission and which do not. Therefore, a mission statement can help a manager decide which opportunities to pursue and which to screen out.

Question 19

Company objectives should shape the direction and operation of the whole business.

Accepted Answer

Company objectives provide a clear focus and purpose for the business, guiding decision-making and actions throughout the organization. They ensure that everyone is working towards the same goals and help to measure progress and success. Without clear objectives, the business may lack direction and purpose, resulting in inefficiencies and missed opportunities.

Question 20

Attractive opportunities should make use of a firm's resources and its unique strengths.

Accepted Answer

Attractive opportunities that are likely to be pursued by a firm should align with its resources and help leverage its unique strengths. This can help the firm achieve a sustainable competitive advantage and generate superior financial returns.

Quiz 3: Evaluating Opportunities in the Changing Marketing Environment