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Chapter Seven – Marketing strategy and metrics
True / False questions
1. A metric is a quantitative measure used for assessing, controlling or decision-making in all
activities of a business venture. Common marketing metrics include issues such as return on
sales, gross profit, the marketing cost per unit, churn rates, cost per lead, lifetime value of
customer and many more – T
2. It is important to use metrics in marketing in order to determine if marketing activities are
both cost effective and relatively effective – T
3. Marketing metrics have evolved through several phases commencing with single measure
outputs and evolving through to non-financial measures – F (single measure outputs is the
first phase and non-financial measures is the second phase, the third phase of the evolution
of marketing metrics includes input measures whilst the fourth phase refers to multiple
measures)
4. The market growth-market share matrix (BCG matrix) categorises a firm’s products according
to whether they are stars, cash cows, exclamation marks or dogs based on their market sharemarket growth situation – F (exclamation marks should be replaced with question marks)
5. The product-market matrix (Ansoff matrix) identifies alternative growth strategies by
examining existing and potential products in current and future markets – T
6. The product life cycle model (PLC) provides a means of tracking the natural developmental
cycle that most businesses follow – F (businesses should be substituted with products)
7. The formula for market penetration is ‘the number of customers who have bought the firms
products in a particular period’ divided by ‘the potential number of customers who could buy
the products in question in a given period’ – T
8. The cost per lead formula refers to ‘the cost of a specific marketing or advertising campaign’
divided by ‘the number of lead obtained’ - T
9. The customer acquisition cost metric refers to the ‘total marketing or advertising investment’
divided by the ‘number of customers’ – F (it should refer to the ‘number of new customers’)
10. With respect to online metrics, a ‘unique’ website visitor is one that may have visited a site
several times in a given month and each visit during that period is counted – F (the visitor is
only counted once during the given period)
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Strategic Marketing 2e