CMA Marketing Planning & Budgeting 1 — Questions and Answers
Question 1: What is the primary purpose of a formal marketing plan?
- To document all past marketing expenditures
- To provide a structured roadmap aligning marketing activities with business objectives (Correct answer)
- To satisfy regulatory reporting requirements
- To track competitor pricing changes
Correct answer: To provide a structured roadmap aligning marketing activities with business objectives
A marketing plan serves as a strategic roadmap that aligns marketing activities, resources, and timelines with overarching business goals.
Question 2: Which budgeting method determines the marketing budget by allocating a fixed percentage of projected or past sales revenue?
- Objective-and-task method
- Competitive parity method
- Percentage-of-sales method (Correct answer)
- Zero-based budgeting
Correct answer: Percentage-of-sales method
The percentage-of-sales method sets the marketing budget as a fixed proportion of either past or forecasted sales revenue, making it straightforward but potentially counterproductive in downturns.
Question 3: In a SWOT analysis used for marketing planning, which element refers to external factors that could benefit the organization?
- Strengths
- Weaknesses
- Opportunities (Correct answer)
- Threats
Correct answer: Opportunities
Opportunities in SWOT analysis represent favorable external conditions—such as market trends, regulatory changes, or competitor weaknesses—that the organization can exploit.
Question 4: What does zero-based budgeting (ZBB) require marketers to do each planning cycle?
- Increase the prior year's budget by the inflation rate
- Justify every line-item expense from scratch regardless of prior spending (Correct answer)
- Allocate budget equal to the largest competitor's spend
- Carry forward the previous budget unchanged
Correct answer: Justify every line-item expense from scratch regardless of prior spending
Zero-based budgeting requires every expense to be justified anew each cycle, preventing the automatic roll-over of inefficient prior-year spending.
Question 5: Which component of a marketing plan specifies measurable, time-bound targets the marketing team aims to achieve?
- Situation analysis
- Marketing objectives (Correct answer)
- Executive summary
- Marketing mix tactics
Correct answer: Marketing objectives
Marketing objectives define the specific, measurable outcomes (e.g., increase market share by 5% in 12 months) that all subsequent strategies and tactics are designed to accomplish.
Question 6: A company calculates its marketing ROI as (Revenue Attributable to Marketing − Marketing Cost) ÷ Marketing Cost × 100. If revenue attributable is $500,000 and marketing cost is $100,000, what is the marketing ROI?
- 5%
- 80%
- 400% (Correct answer)
- 500%
Correct answer: 400%
($500,000 − $100,000) ÷ $100,000 × 100 = $400,000 ÷ $100,000 × 100 = 400% marketing ROI.
Question 7: Which section of a marketing plan typically includes an analysis of the macro-environment using factors such as political, economic, social, technological, environmental, and legal conditions?
- Competitive analysis
- PESTEL (situation) analysis (Correct answer)
- Marketing objectives
- Implementation timeline
Correct answer: PESTEL (situation) analysis
A PESTEL analysis within the situation analysis section examines macro-environmental forces that can affect the organization's marketing strategy.
CMA Marketing Planning & Budgeting 1
What is the primary purpose of a formal marketing plan?