Applied Marketing Management Exam 2
Which of the following is not one of the four strategic options viable for a leader in the early growth stage of the product life cycle?
All are viable strategic options. (moderate)
A well-developed strategy should perform several functions that include all of the following EXCEPT:
All selections represent functions of a strategy. (moderate)
Which of the following is NOT mentioned in the text as a characteristic of a firm with good business strengths?
All selections represent good business strengths (moderate)
Which of the following imperatives states that marketing should identify market opportunities and advise top management on potential strategic actions a. marketing imperative 1 b. marketing imperative 2 c. marketing imperative 3 d. marketing imperative 4
Answer= A
Which of the following represents a description of the firm's ideal future or an impressionistic picture of what the future should be? a. vision b. mission c. strategy d. objective
Answer= A
All of the following are reasons a firm may cease doing business with a current customer or forgo a relationship with the potential customer EXCEPT: a. customer standardization requirements b. nonpayer c. foreclosing options d. impact on firm's reputation
Answer= A Capacity constraints, competition, evolving strategy, impact on firms reputation, impact on the offer, instability, nonpayer, potential costs are the main reasons a company might forgo a relationship with potential customer
Which of the following stages of the product life cycle is most characterized by uncertainty? a. introduction b. early growth c. maturity d. decline
Answer= A Firms ask many questions during the introduction stage. The introduction stage may last many years, but fierce competition, increased innovation, and customer willingness to try new products are shortening this stage.
Which of the following is NOT a major group of needs according to Maslow's hierarchy of needs? a. psychological b. safety c. ego d. self-actualization
Answer= A Maslow's hierarchy of needs consists of -self actualization -ego -social -safety & security -psychological (providing higher and lower level needs to the customer is more important than providing only lower level needs)
The firm with a(n)______ is typically less concerned with profits and long-run customer relationships. a. Sales orientation b. Operations orientation c. Finance Orientation d. Technology Orientation
Answer= A Sales orientation firms focus on short-term sales volume. They place excessive effort in getting customers to buy what the firm has to offer, versus externally oriented alternative of getting the firm to offer what customers want to buy.
Which of the following is the correct formula for customer lifetime value? a. CLV=mxr/(1+d-r) b. CLV=m-r/(1xd) c. CLV=m/r(1-d) d. CLV=m+r/(1+d+r)
Answer= A profit margin (m) retention rate(r) discount rate(d)
According to the text, the best-known marketing manifestation of selectivity and concentration is _____ a. related diversification b. identifying and targeting market segments c. geographic expansion d. reverse engineering
Answer= B
All of the following are examples of internal orientaions based on marketing as a philosophy EXCEPT a. operations orientation b. sales orientation c. finance orientation d. marketing orientation
Answer= B
Which of the following types of organizational structures places activities like marketing research, distribution, advertising and promotion, marketing administration, and new product development in what is traditionally called a marketing department? a. product/brand management b. functional marketing c. category management d. market segment
Answer= B
In a(n)_______, two entities combine as equal partners to create a stronger firm. a. acquisition b. merger c. leveraged buyout d. backward integration
Answer= B -Acquisitions is a direct competitor or an outside firm acquires a second competitor independent firm or via a disinvested. -Mergers are two entities combine as equal as equal partners to create a stronger firm. -Private equity buyouts are when firms rationalize their portfolios and spin off business units.
Which of the following is NOT a critical issue for success in customer relationship management programs? a. objectives b. just-in-time inventory c. customer benefits d. technology
Answer= B Three crucial issues for success when implementing CRM: 1. objectives 2. customer benefits 3. technology
The ____ organization retains a classic functional structure, but much organizational output results from cross-functional teams a. product/brand management b. functional marketing c. business process d. market segment
Answer= C
The principle that states the firm should offer customers something they want but cannot get elsewhere is ______ a. the principle of selectivity and concentration b. the principle of customer value c. the principle of differential advantage d. the principle of integration
Answer= C
Which of the following types of problem solving is described as a novel purchase where the alternatives and potential supplier are often new to the customer? a. routinized-response behavior b. limited problem-solving c. extended problem-solving d. perceptual problem-solving
Answer= C
Which of the following four Principles of Marketing emphasizes competition? a. The Principle of Selectivity and Concentration b. The Principle of Customer Value c. The Principle of Differential Advantage d. The Principle of Integration
Answer= C Differential advantage is similar to having competitive advantage, unique selling proposition or edge. To secure differential advantage, customers must perceive greater value in the firm's offer than in competitor offers.
All of the following represent critical questions required to be answered about a firm's business and market portfolio for Imperative 1 EXCEPT: a. In which businesses and markets shall we invest? b. From which businesses and market shall we withdraw? c. Is the firm's market and financial performance reaching planned objectives? d. In which current businesses and markets shall we continue to invest?
Answer= C Imperative 1: Determine and Recommend Which Markets to address. Asks four critical questions about investment 1. In which businesses and markets shall we invest - people, time, dollars? 2. In which current businesses and markets shall we continue to invest? 3. How much investment shall we make in these various businesses and markets? 4. From which businesses and markets shall we disinvest or withdraw?
Which of the following is not one of the marketing-mix elements that comprise the basic building blocks of a firm's offer? a. product b. promotion c. position d. price
Answer= C Product, promotion, distribution(place), and price are included in the marketing mix.
In which of the following stages of the product life cycle are sales mostly to repeat and loyal customers?a. introduction b. early growth c. maturity d. decline
Answer= C Slow-growth or flat year-to-year sales characterize maturity stage. Most sales are to repeat and loyal users
Which of the following best describes customer benefits/values that are not known until long after purchase? a. search benefits b. use benefits c. credence benefits d. virtual benefits
Answer= C When customers recognize value there are three types of benefits that help clear up asses the value -search benefits: significant product/service data is available from the firm an/or independent sources like consumer reports. Customers may even inspect and try to products (test driving a car) -Use benefits: relatively little actual data is available on customer value before purchase like many services. customers recognize value when they consume the product/service (concert performance) -Credence benefits: it is impossible for customers to asses value until long after purchase. (health benefits from a medical procedure)
A specific advantage of the _____ structure is that customer contact increases, and customer portfolio managers gain significant customer insight a. product/brand management b. functional marketing c. category management d. customer management
Answer= D
All of the following represent challenges for a firm working toward sustaining an external orientation EXCEPT a. bureaucracy b. accounting systems c. functional divisions d. All selections represent challenges
Answer= D
____ focuses on how and where the customer secures the product a. price b. promotion c. product d. distribution
Answer= D
All of the following are options for potential customers in enhancing customer lifetime value EXCEPT a. retrieving customers b. acquiring customers c. ignoring customers d. growing customers
Answer= D Potential customers offer an excellent way for a firm to grow. There are three options for addressing potential customers 1. retrieve 2. acquire 3. ignore
All of the following are modes of customer expectations EXCEPT a. sense b. feel c. think d. all of these selections represent a mode of customer experience
Answer= D The five modes of customer experience are 1. sense 2. feel 3. think 4. act 5. relate
Which of the following is NOT one of the PESTLE forces? a. political b. sociocultural c. technological d. economic e. localization
Answer= E The PESTLE is composed of Political, economic, sociocultural, technological, legal, and environmental
Which of the following is NOT one of the three major options for addressing low-profit or unprofitable customers? a. devising a new business model for low-profit or unprofitable customers b. investing in customer's future potential c. reducing resource investment d. firing customers
Answer=A
A firm has the least amount of impact on which of the following families of the life cycle? a. product form b. market c. product class d. product item
Answer=B generally the firm has little impact on market life cycles. Product line and Product item are critical for product and bran managers as they significantly influence product line and product item performance. Firms actions greatly impact these life cycles.
Which of the following is NOT one of the three options for current customers in enhancing customer lifetime value? a. increasing retention rate b. increasing profit margin c. decreasing discount rate d. increasing churn rate
Answer=D There are three ways to enhance the customer lifetime value: 1. Increase the profit margin the firm earns from the customers 2. Increase customer retention rate (reduce customer defection rate) 3. Reduce discount rate
Positioning statements should meet all of the following criteria EXCEPT:
Be common. (easy)
Which of the following is NOT mentioned in the text as a basic option for follower firms in the early growth stage?
Change the market culture. (difficult)
All of the following represent basic dimensions that are important when choosing customer targets EXCEPT:
Choice of geographic location of headquarters (easy)
Markets in the decline stage of the product life cycle are particularly inhospitable if any of the following exist EXCEPT:
Competitor exit barriers are low. (difficult)
Which of the following is NOT mentioned in the text as a type of barrier to growth that must be analyzed to determine if the life cycle is in maturity?
Cultural (moderate)
Which of the following is NOT one of the four pillars of a marketing segment strategy
Cultural identity
Which of the following is NOT one of the three types of barriers considered critical in forestalling competition from entering a newly developing market?
Culture-specific (moderate)
When a firm has many current customers, it can use __________ approaches to place purchase transactions in a data warehouse. The firm can then use and data mining techniques to identify groups based on purchasing patterns, then the tailor offers to individual customers base on those patterns.
Customer relationship management
According to the text, a market may be viewed as inhospitable to decline if any of the following exists EXCEPT:
Customer switching costs are high. (difficult)
Which of the following is NOT a method used to increase unit sales volume resulting in improved profits?
Decrease customer retention (moderate)
According to the text, all of the following are alternative approaches to increasing product use EXCEPT:
Design the product for infinite life span (moderate)
Positioning requires the firm to make all of the following key decisions EXCEPT:
Determine the firm's asset utilization. (moderate)
___________________ is a net benefit or cluster of benefits, offered to a sizable group of customers, which they value and are willing to pay for, but cannot get, or believe they cannot get, elsewhere.
Differential advantage (moderate)
Which of the following strategies is especially viable if the leader has been lazy, over-milking the product via underinvestment, or arrogant in serving customers inadequately?
Direct attack (moderate)
Which of the following describes the two broad options for a follower firm that chooses to exit an industry?
Divest or liquidate (moderate)
Which of the following describes the theory where as accumulated volume in making, promoting, and distributing a product increases, cost can be made to decline in a predictable manner ?
Experience curve (moderate)
T/F During the late growth stage, the value to the firm from early market leadership, or being a fast follower, is still growing rapidly.
False
T/F It is generally easier to evaluate and communicate about the firms diverse products using the multifactor matrix than the growth-share matrix
False
T/F Most marketing activity occurs post purchase and most customer service occurs before and during purchase.
False
T/F The firm enjoys positive synergies by targeting an additional segment, although new products make confused salesforce.
False
T/F The followers strategic opjective is to lay the foundation for achieving market leadership and profitability, at least in the short and medium run.
False
T/F The growth-share matrix has only two criteria: market growth rate and firm growth rate.
False
T/F The variability concept in services marketing is tightly linked to inseparability and the inability to inventory services.
False
T/F a firm implementing a pull strategy places most marketing effort upstream on direct customers
False
T/F good market segments should always be large in size.
False
T/F: A firm implementing a pull strategy places most marketing effort upstream on direct customers
False
T/F: Good market segments should always be large in size
False
T/F: It is generally easier to evaluate and communicate about a firms' diverse products using the multifactor matrix than the growth-share matrix
False
T/F: Most marketing activity occurs postpurchase and most customer service occurs before and during purchase
False
T/F: Soft systems improve operational efficiency and reduce costs
False
T/F: The firm enjoys positive synergies by targeting an additional segment, although new products may confuse the sales force
False
T/F: during the late growth stage, the value of the firm from early market leadership, or being a fast follower, is still growing rapidly
False
T/F: the followers strategic objective is to lay the foundation for achieving market leadership and profitability, at least in the short and medium run
False
T/F: the variability concept in services marketing is tightly linked to inseparability and the inability to inventory services
False
T/F: Typically, the firm's direct customers buy the firms products from intermediaries like manufactures or distributors
False ( indirect customers)
T/F: Membership in the awareness set is more important than membership in the consideration set as customers choose among the alternatives in the awareness set.
False (Frequently, customers exclude several alternatives in the awareness set with little evaluation, by forming a short list - consideration set - based on purchase criteria. Customer choices from the consideration set may be rational or may deviate from rationality)
T/F: As retention rate increases, the firm's steady-state market share decreases.
False (Increasing customer retention rate has greater leverage on CLV than reducing the discount rate)
T/F: the growth share matrix has only two criteria: market growth rate and firm growth rate
False (Industry Market Growth and firm market share)
T/F: Most new product reach early growth and level off in the maturity stage of the product life cycle
False (Many products do not reach early growth, but survivor sales revenue grow at an increasing rate.
T/F: Many customer loyalty programs are probabilistic in nature. In these programs, customers, accumulate points, then collect the reward.
False (customer loyalty programs are central to the CRM systems. They are structured in a way that customers earn rewards by purchasing goods and services)
According to the text, harvesting is an especially favored strategy when the basis of fragmentation is geographic.
False (difficult)
In the early growth stage of the product life cycle, high-market-share leaders typically focus on retaining existing customers and increasing their purchases.
False (difficult)
In the maturity stage of the product life cycle, advertising emphasis shifts to brand differentiation and selective demand creation.
False (difficult)
While operational objectives are qualitative, establishing the general direction the firm wants to take, strategic objectives are quantitative.
False (difficult)
T/F: Firms with an internal orientation are more likely to achieve integration because the shared value of serving customers promotes a common purpose.
False (external orientation are more likely to achieve integration)
T/F: A firm with a finance orientation focuses on research, development, and engineering.
False (focuses too heavily on short term profits. It tends to avoid expenditures with long-term payoff ad mortgage its future by indiscriminately cutting back on R&D, capital investment, marketing research, and/or advertising
T/F: The most severe supplier threat is backward integration
False (forward integration)
T/F: Users of a product/service often have a direct role in the purchase decision process
False (indirect role)
Improving asset utilization is directly related to increasing profit margins.
False (moderate)
Low prices during introduction are typically termed skimming strategies. The strategies require significant effort to reduce costs continually, and management must resolve to accept low margins for an extended period despite large R&D expenditures.
False (moderate)
Operational objectives establish the type of results the firm intends to achieve and are qualitative and directional in nature.
False (moderate)
Poor business strengths, even in hospitable markets, suggest that the firm implement a maintain strategy.
False (moderate)
Strategic objectives should specify how much growth, market share, profit, or cash flow the firm should earn during a specific time frame.
False (moderate)
The dominant option for a follower firm in the early-growth stage of the product life cycle seeking growth is segmentation and differentiation through imitation.
False (moderate)
The net financial position of the majority of products at the introduction stage of the product life cycle is positive.
False (moderate)
The operational focus is the firm's major competitive weapon for gaining its target customers; it also defines the firm's implementation focus.
False (moderate)
To harvest or maintain are the two broad options of a follower firm that chooses to exit an industry.
False (moderate)
When a firm allocates resources internally, it allocates resources among target market segments.
False (moderate)
T/F: The firm should continue selling to all customers since revenue generation and profitability are synonymous
False (most firms understand and measure product profitability - revenues minus costs for individual products. Some customers are not profitably and should be eliminated)
Which of the following barriers consists of a drive for low costs that allows low prices and may deter competitor entry, as well as the development and exploitation of first-mover advantage?
Firm-driven (moderate)
Inhospitable markets imply that which of the following strategies should be implemented?
Harvest (moderate)
According to the text, the three primary ways a follower firm can pursue growth with the possible objective of ultimately dethroning the leader include all of the following EXCEPT:
Harvesting (moderate)
_______________ means emphasizing increases in short-term cash flow at the expense of maintaining market share or sales volume.
Harvesting (moderate)
Which of the following strategic alternatives does NOT relate directly to increasing profit margins?
Improving asset utilization (difficult)
All of the following are methods used to improve margins and investment returns EXCEPT:
Increase operating costs. (moderate)
Which of the following options for improving margins and investment returns is the most straightforward?
Increase prices. (moderate)
All of the following are examples of new ways in the changing view of marketing strategy integration EXCEPT:
Internal and budgetary focus to strategy (moderate)
Which of the following stages of the product life cycle often follows many years of research and development by one or more firms?
Introduction (easy)
In which of the following stages of the product life cycle do high-market-share leaders typically focus on retaining existing customers and increasing their purchases?
Late maturity stage (difficult)
Which of the following means closing down and selling the assets of a business?
Liquidate (easy)
Which of the following is considered a new way in the changing view of marketing strategy integration?
Market strategy drives the marketing mix. (moderate)
In which of the following stages of the product life cycle do low-market-share leaders typically focus on attracting competitors' customers?
Maturity stage (difficult)
Which of the following is NOT mentioned in the text as an area that requires attention when a firm is implementing a slow harvest strategy?
Modify culture (moderate)
_________________ should specify how much growth, market share, profit, and/or cash flow the firm should earn during a specific time frame.
Operational objectives (moderate)
Product-specific barriers are related to the product form and include all of the following EXCEPT:
Patents (moderate)
If government and/or product-specific barriers are low and the market is price sensitive, which of the following pricing strategies would be most appropriate?
Penetration pricing (easy)
________________ articulate the firm's goals for the market segment and state clearly and simply what the firm is trying to achieve.
Performance objectives (moderate)
Which of the following is NOT a reason that firms underinvest in mature products?
Political power of mature-product champions (difficult)
For which of the following strategies does the firm place most marketing effort upstream on direct customers like manufacturers and distributors?
Push strategy (moderate)
_______________ requires a careful examination of all aspects of the business as well as tough decision-making to cut costs wherever possible to turn a loss into at least a marginal profit.
Rationalizing (moderate)
Which of the following is NOT mentioned in the text as a tactics used to increase usage of a product by customers?
Reduce the unit of purchase. (difficult)
Which of the following types of market-segment strategy decisions relates to what the firm wants to achieve from addressing the market?
Results (moderate)
The firm must make all of the following types of decisions when determining which segments it will target for effort and how it will position itself in those market segments EXCEPT:
Retraction
Firms that addressing B2B markets, or sell to consumer goods through large retail chains, often focus efforts on individual customers, aka
Segments-of-one
The options for a follower in the early growth stage of the product life cycle include all of the following EXCEPT:
Settling for third place
Which of the following is NOT a broad category in which strategic objectives are grouped?
Social responsibility (difficult)
Attitudes, life stage, personality, and lifestyle characteristics are examples of the following categories of Canada descriptor variables?
Sociopsychological
Which of the following strategies for firms competing in fragmented markets is described as a way to reduce variation and improve consistency across various suppliers?
Standardization (difficult)
Which of the following Boston consulting group matrix labels apply to products that have a high market growth and high market share
Star
________________ determines where to allocate resources once the firm has established performance objectives for its market-segment strategy.
Strategic focus (moderate)
________________ establish the type of results the firm intends to achieve and are qualitative and directional in nature.
Strategic objectives (moderate)
Which of the following is NOT one of the four pillars of a market-segment strategy?
Tactical focus (difficult)
When a firm targets multiple segments, it faces all of the possible situations in implementation EXCEPT:
The firm faces all of the situations during implementation. (moderate)
If two firms are equally accomplished in designing market offers, the firm with better market segmentation will win
True
T/F A firm generates strategic options by developing scenarios that let it anticipate future competitor actions
True
T/F Candidate descriptor (segmentation) variables include geographic, demographic, behavioral, and socipsychological.
True
T/F In a leapfrog situation, the follower improves on the leader and offeres enhanced value by developing innovative and superior products, and/or enters emerging market segments before the leader.
True
T/F Large-scale-market-segentation studies use extensive customer survey data and sophisticated multivariate statistical techniques.
True
T/F Patenets are the most common government- imposed barriers that firms can exploit
True
T/F Positive complementary takes place when customers who buy one type of product are more likely to buy related firm products
True
T/F Product proliferation refers to product variety; market segmentation explores differences in customer meeds and developing strategies for market segments.
True
T/F Service is any act or performance that one party can offer another that is essentially intangible and in does not result in ownership of anything
True
T/F The SERVQUAL model relates customers satisfaction to service quality via expectations disinformation.
True
T/F The basic market-strategy unit is the market-segment strategy
True
T/F The firms product portfolio is a collection of products
True
T/F a compelling positioning statement is vital for guiding and coordinating the firms marketing efforts
True
T/F if two firms are equally accomplish in designing market offers, the firm with better market segmentation will win.
True
T/F the multi factor matrix produces two index numbers for each market segment: market segments attractiveness, business strengths
True
T/F the three broad categories of strategic objectives are growth in market share, profitability, and cash flow
True
T/F: A compelling positioning statement is vital for guiding and coordinating the firms marketing efforts
True
T/F: A firm generates strategic options by developing scenarios that let it anticipate future competitor actions
True
T/F: A service is any act or performance that one party can offer another that is essentially intangible and does not result in the ownership of anything
True
T/F: Disruptive technologies spawn products that threaten and change entire industries
True
T/F: Firms with sales orientation focus on short-term sales volume and are less concerned with profits and long-run customer relationships
True
T/F: Identifying customers is the crucial first step in securing customer insight
True
T/F: Indirect competitors often attack from different industry sectors, and incumbents sometimes ignore them
True
T/F: Large-scale market segmentation studies use extensive customer survey data and sophisticated multivariate statistical techniques
True
T/F: Market Life Cycles are the longest in the family of life cycles
True
T/F: Positive complementarity takes place when customers who buy one type of product are more likely to buy related firm products
True
T/F: Product proliferation refers to product variety; market segmentation explores differences in customer needs and developing strategies for market segments
True
T/F: Retention is the inverse of defection or churn
True
T/F: The 80:20 rule means that 80 percent of the firm's revenues come from 20 percent of its customers
True
T/F: The basic market-strategy unit is the market-segment strategy
True
T/F: The business process organization retains a classic functional structure, with much organizational output resulting from the cross-functional teams
True
T/F: The category management organization attempts to address problems with the product/brand-management organization and to leverage success from strong brands to weaker brands
True
T/F: The firm only increases shareholder value if its incoming cash flows earn a return on investment at least equal o its cost of capital
True
T/F: The firms product portfolio is a collection of products
True
T/F: The higher the retention rate, the greater the impact on market share for a given increase in retention rate.
True
T/F: The market offer is the total benefit package the firm provides to its customers
True
T/F: The multifactor matrix produces two index numbers for each market segment: market segment attractiveness and business strengths
True
T/F: The reengineering approach examines fundamental assumptions about the firm systems and processes and seeks alternative approaches for redesign and improvement
True
T/F: To become a truly externally oriented organization, all employees, not only marketers, must become externally focused.
True
T/F: candidate descriptor (segmentation) variables include geographic, demographic, behavioral, and sociopsychological
True
T/F: in a leapfrog situation, the follower improves on the leader and offers enhanced value by developing innovative and superior products, and./or enters emerging market segments before the leader
True
T/F: patents are the most common government-imposed barriers that firms can exploit
True
T/F: the SERVQUAL model relates customers satisfaction to service quality via expectations disconfirmation
True
T/F: the three broad categories of strategic objectives are growth and market share, profitability, and cash flow
True
T/F: Economic value for the customer (EVC) is the competitive product's price, plus the net added value from the firm's product
True (EVC= the competitive product price, plus the net added value from using the firms product. Net added value=positive differentiation value less negative differentiation value)
Using the pull strategy, a firm places most marketing effort downstream on consumers or end users such as a consumer products firm focusing on consumers.
True (difficult)
According to the text, the most common government-imposed barrier is a patent.
True (easy)
If entry barriers are low and the market is price sensitive, penetration pricing would be most appropriate.
True (easy)
Today's competition is so intense that the entire firm must work together as a competitive weapon by aligning all functional areas to support the value proposition.
True (easy)
A well-designed value proposition provides a convincing answer to a deceptively simple question: "Why should target customers prefer the firm's offer to those of competitors?"
True (moderate)
According to the text, positioning is sometimes called the heart of the product/market strategy.
True (moderate)
According to the text, the two broad options that are available to follower firms pursuing a leadership objective in the early-growth stage of the product life cycle are imitation and innovation.
True (moderate)
Differential advantage is a net benefit or cluster of benefits, offered to a sizable group of customers, which they value and are willing to pay for, but cannot get, or believe they cannot get, elsewhere.
True (moderate)
For follower firms in mature markets, the two status quo options are maintain position or rationalize.
True (moderate)
Harvesting means emphasizing increases in short-term cash flow at the expense of maintaining market share or sales volume.
True (moderate)
In the introduction and early growth stages of the product life cycle, firms often set priorities on growth and/or market share.
True (moderate)
Performance objectives articulate the firm's goals for the market segment and state clearly and simply what the firm is trying to achieve.
True (moderate)
Positioning statements should be compelling, sustainable, and authentic.
True (moderate)
Strategic focus and positioning specify the firm's approach to achieve its performance objectives.
True (moderate)
Strategic focus determines where to allocate resources once the firm has established performance objectives for its market-segment strategy.
True (moderate)
The concept that a follower firm may acquire several unprofitable or marginally profitable low market share products from other firms and develop a strong competitor is called kenneling.
True (moderate)
The experience curve describes the theory in which unit costs are reduced in a predictable manner as accumulated volume increases.
True (moderate)
The purpose of positioning is to create a unique and favorable image in the minds of target customers.
True (moderate)
The two components of performance objectives include strategic objectives and operational objectives.
True (moderate)
The two major options for firms competing in mature fragmented markets are acquisition and standardization and branding.
True (moderate)
Using the push strategy, the firm place most marketing effort upstream on direct customers.
True (moderate)
Examples of a person who will benefit in a personal way from a purchase decision but does not personally carry the cost include all of the following EXCEPT:
Ultimate consumers and users of a company's product or service (difficult)
Good market segments should satisfy all the following criteria EXCEPT:
Undifferentiated
A case in which a firm introduces a lower-margin product that is expected to lead to reduced sales of a higher-margin product is referred to as _______________. a.) product cannibalization b.) market skimming c.) product proliferation d.) customer proliferation
a
A serious problem with _______________ is that management often reduces or discontinues investment into the product thus drying up the cash flow. a.) cash cows b.) dogs c.) stars d.) wildcats
a
A(n) ______________ portfolio occurs when the firm funds too many new products and creates problems with cash flow or other resources. a.) imbalanced b.) balanced c.) cultural d.) conjointed
a
According to the growth-share matrix, products/businesses with low market growth but high market share are often referred to as _______________. a.) cash cows b.) dogs c.) stars d.) wildcats
a
According to the text, _______________ is the willingness to help customers and provide prompt service. a.) responsiveness b.) assurance c.) empathy d.) reliability
a
According to the text, conditions under which service guarantees have maximum impact include all of the following EXCEPT: a.) When the price of the service is low b.) When the customer's ego is involved c.) When the customer has little experience with the service d.) When failure has significant negative consequences
a
According to the text, costs that vary directly with sales volume are referred to as _______________. a.) variable costs b.) direct fixed costs c.) indirect fixed costs d.) total costs
a
According to the text, data provided in response to customers' questions and in anticipation of their needs is the supplementary service element referred to as ________________. a.) information b.) consultation c.) order-taking d.) hospitality
a
According to the text, which of the following should represent the firm's primary internal cash source? a.) cash cows b.) dogs c.) stars d.) wildcats
a
Activities that fulfill the _______________ customer service function are the various forms of promotion designed to provide product and location information to the customer and personal selling. a.) pre-purchase b.) post-purchase c.) horizontal purchase d.) vertical purchase
a
All of the following are examples of products in which companies use the time availability dimension to implement product proliferation EXCEPT: a.) Plastic producers sometimes sell high-quality plastics for rigorous uses and degraded product for less-severe uses. b.) Package services, such as FedEx, deliver before 10 a.m. but also later the same day for different prices. c.) Publishers offer hardcover books for enthusiasts and paperback books for those who can't wait. d.) Airlines develop a variety of products for a single flight based on time of booking and availability capacity.
a
All of the following are mentioned in the text as factors that differentiate services from products EXCEPT: a.) Validity b.) Perishability c.) Divisibility d.) Acquisition
a
All of the following are mentioned in the text as factors that have led to growth in private-sector services in recent years EXCEPT: a.) Insourcing b.) Deregulation c.) Franchising d.) Globalization
a
Common differentiations of versions or variations offered to customers by firms to tap different customer needs include all of the following EXCEPT: a.) market scalability b.) time availability c.) product performance d.) limitations on access and functionality
a
During which of the following phases of the purchase process should the firm assist customers by helping them identify needs and by providing promotional information about products and purchase locations? a. prepurchase d. during purchase c. postpurchase d. cross-purchase
a
Firms that address B2B markets, or sell consumer goods through large retail chains, often focus their efforts on individual customers, aka a. segments-of-one b. the modularity approach c. data mining d. factor analysis
a
If government and/or product-specific barriers are low and the market is price sensitive, which of the following pricing strategies would be most appropriate? a.) Penetration pricing b.) Skim pricing c.) Structured pricing d.) Regulated pricing
a
Markets in the decline stage of the product life cycle are particularly inhospitable if any of the following exist EXCEPT: a.) Competitor exit barriers are low. b.) Competitors are emotionally committed to the product c.) The product is a part of a vertically integrated supply chain d.) Government pressures competitors to stay in business.
a
Positioning requires the firm to take each of the following actions within segments except: a. screen new product ideas b. frame competitor targets c. design the value proposition d. articulate the reasons to believe
a
Service facilities can be conceptualized as comprising both a(n)_____________ and a(n)_____________. a.) interior and exterior b.) strong and weak c.) high and low d.) expensive and inexpensive
a
Service guarantees are most appropriate for each of following EXCEPT when: a. the service price is low b. the customer's ego is involved c. sales are strongly affected by word of mouth d. there are high negative consequences of service failure
a
The major advantage of using the growth-share matrix versus the multifactor portfolio approach in choosing among investment opportunities is _______________. a.) the subjective nature of the growth-share approach b.) the limited number of criteria for the growth-share approach c.) the unambiguous nature of the growth-share approach d.) the objective nature of the growth-share approach
a
The original portfolio analysis model is the _______________. a.) growth-share matrix b.) market share divisor c.) brand equity technique d.) multifactor portfolio matrix
a
The supplementary service element that refers to action taken to pay the bill is referred to as _______________. a.) payment b.) information c.) consultation d.) order-taking
a
Which of the following describes products/businesses that are typically highly profitable due to good cost position from economies of scale and experience-curve effects and because market leaders are frequently able to command premium prices? a.) cash cows b.) dogs c.) stars d.) wildcats
a
Which of the following describes the concept when customers believe their interests are ill-served by the firm's actions and as a result reduces consumption of the firm's products and/or services? a.) negative complementarity b.) post complementarity c.) positive complementarity d.) dual complementarity
a
Which of the following describes the theory where as accumulated volume in making, promoting, and distributing a product increases, cost can be made to decline in a predictable manner ? a.) Experience curve b.) Market domination c.) Absolute advantage d.) Comparative advantage
a
Which of the following stages of the product life cycle often follows many years of research and development by one or more firms? a.) Introduction b.) Early growth c.) Late growth d.) Maturity
a
Which of the following strategies for firms competing in fragmented markets is described as a way to reduce variation and improve consistency across various suppliers? a.) Standardization b.) Direct entry c.) Acquisition d.) Harvesting
a
Which of the following types of costs include raw materials and direct labor? a.) variable costs b.) direct fixed costs c.) indirect fixed costs d.) total costs
a
_______________ allows the firm to balance its objectives and resource allocations across the collection of its various products. a.) Portfolio management b.) Strategic management c.) Product cannibalization d.) Product positioning
a
_______________ customer service is conceptualized as those activities that help prepare the customer for the purchase decision. a.) Pre-purchase b.) Post-purchase c.) Horizontal purchase d.) Vertical purchase
a
_______________ explores differences in customer needs and developing strategies for market segments.. a.) Market segmentation b.) Market penetration c.) Product concentration d.) Product proliferation
a
________________ is the dollar value of an opportunity secured by discounting all cash outflows and inflows by a predetermined factor, typically the firm's cost of capital. a.) Net present value b.) Conjoint analysis c.) Internal rate of return d.) Payback
a
According to the text, the most common government-imposed barrier is _______________.
a patent (moderate)
According to the text, _______________ is an especially favored strategy when the basis of fragmentation is geographic.
acquisition (moderate)
The two strategic options of firms restructuring offers in fragmented mature markets are _______________ and _______________.
acquisition and standardization (moderate)
A(n) _______________ strategy means that the firm copies the leader, but is more effective in execution. a.) innovation b.) imitation c.) concentration d.) divestment
b
According to the growth-share matrix, products/businesses with low market growth and low market share are called _______________. a.) cash cows b.) dogs c.) stars d.) wildcats
b
According to the text, _______________ is the physical goods typically required to provide services. a.) service facilities b.) service equipment c.) service software d.) service personnel
b
According to the text, the most commonly used financial analysis methods used to assess investment opportunities are _______________ and _______________. a.) payback and internal rate of return b.) internal rate of return and net present value c.) payback and net present value d.) cash flow and net present value
b
According to the text, the multifactor portfolio matrix is also known as the _______________. a.) Microsoft/Intel screen b.) GE/McKinsey screen c.) IBM/Oracle screen d.) growth-share matrix
b
According to the text, the two broad options that are available to firms pursuing the leadership objective are _______________ and _______________. a.) concentration and imitation b.) imitation and leapfrog c.) innovation and concentration d.) divestment and imitation
b
Advantages of using financial analysis for product management include all of the following EXCEPT: a. having a single figure b. comparable markets c. conceptual simplicity d. clarity
b
All of the following are examples of financial analysis approaches to developing a successful product management strategy EXCEPT: a.) Net present value b.) Conjoint analysis c.) Internal rate of return d.) Payback
b
All the following are reasons that firms underinvest in mature products EXCEPT a. limited view of the competition b. internally focused funding criteria c. fear of cannibalization d. inertia
b
For the firm conducting the analysis, _______________ is that firm's market share divided by the largest competitor's market share. a.) absolute market share b.) relative market share c.) differentiated market share d.) common market share
b
In _______________, prices stay high as costs are reduced, and the firm earns high margins for limited fixed investment. a.) price penetration b.) price skimming c.) price structuring d.) price regulations
b
Inhospitable markets imply that which of the following strategies should be implemented? a.) Maintain b.) Harvest c.) Acquisition d.) Standardization
b
Knowledge and courtesy of employees and ability to convey trust and confidence is the key variable referred to as _______________. a.) responsiveness b.) assurance c.) empathy d.) reliability
b
Low prices during introduction are typically termed _______________ and the firm must accept low profit margins for a substantial time period. a.) skimming pricing b.) penetration pricing c.) modified pricing d.) mainstream pricing
b
Methods of delivering _______________ customer service include installation, spare parts availability, and traditional technical service departments in many manufacturing companies. a.) pre-purchase b.) post-purchase c.) horizontal purchase d.) vertical purchase
b
The concept that a follower firm may acquire several unprofitable or marginally profitable low market share products from other firms and develop a strong competitor is called _______________. a.) market segmentation b.) kenneling c.) harvesting d.) direct attack
b
The discount rate that equalizes the opportunity's cash inflow and cash outflows is called the ______________. a.) external rate of return b.) internal rate of return c.) economic profit d.) payback period
b
The growth-share matrix has only two criteria: _____________ and ______________. a.) profitability and market growth rate b.) market growth rate and relative market share c.) profitability and relative market share d.) cost of capital and market growth rate
b
The major method of reducing service _______________ is appropriate attention to employee selection and training. a.) validity b.) variability c.) compatibility d.) flexibility
b
The net financial position of the majority of products at the introduction stage of the product life cycle is _______________. a.) positive b.) negative c.) predictable d.) constant
b
Which of the following Boston Consulting Group Matrix labels apply to products that have high market growth and high market share? a. cash cow b. star c. dog d. problem child (?)
b
Which of the following describe products/businesses that trail market leaders and have higher costs in low-growth markets? a.) cash cows b.) dogs c.) stars d.) wildcats
b
Which of the following is NOT a method of generating growth in a mature market? a. increasing product use b. increasing price c. repositioning the brand d. improving physical distribution
b
Which of the following is NOT mentioned in the text as a characteristic of a firm with good business strengths? a.) They have low costs b.) All selections represent good business strengths c.) They have good raw material contracts. d.) They have an ability to keep productive assets running
b
Which of the following is NOT mentioned in the text as an area that requires attention when a firm is implementing a slow harvest strategy? a.) Minimize investment b.) Modify culture c.) Cut cost d.) Raise price
b
Which of the following is NOT one of the four pillars of a marekt-segment strategy? a. performance objectives b. cultural identity c. strategic focus d. positioning
b
Which of the following is NOT one of the three important issues when targeting customers? a. identify the appropriate distribution system for its products/services to reach consumers/end users b. select the distributor that uses a focus strategy to target its customers c. decide at which level in its distribution system organizations should receive the most marketing effort d. identify what specific persons or types of person at the chose distribution levels it should target for effort
b
Which of the following is not one of the four strategic options viable for a leader in the early growth stage of the product life cycle? a.) Enhance position. b.) All are viable strategic options. c.) Maintain position. d.) Retreat to a market segment.
b
Which of the following is the correct equation for return on investment? a.) assets/profits b.) profits/investment c.) revenues/expenses d.) inventory/profits
b
Which of the following portfolio approaches to choosing among investment opportunities is useful both for assessing investment potential in current businesses and evaluating totally new opportunities? a.) Microsoft/Intel screen b.) GE/McKinsey screen c.) IBM/Oracle screen d.) growth-share matrix
b
Which of the following types of costs are associated with the individual products, such as product managers, specialized production supervisors, and other technical personnel? a.) variable costs b.) direct fixed costs c.) indirect fixed costs d.) total costs
b
_______________ customer service helps the customer use the product and deals with any problems or complaints that may occur. a.) Pre-purchase b.) Post-purchase c.) Horizontal purchase d.) Vertical purchase
b
_______________ do not directly with the number of units sold, but are associated with individual products. a.) Variable costs b.) Direct fixed costs c.) Indirect fixed costs d.) Marginal fixed costs
b
_______________ is the supplementary service element that refers to dialogue probing customer requirements and developing a tailored solution for the customer. a.) Information b.) Consultation c.) Order-taking d.) Hospitality
b
_______________ requires a careful examination of all aspects of the business as well as tough decision-making to cut costs wherever possible to turn a loss into at least a marginal profit. a.) Harvesting b.) Rationalizing c.) Maintaining d.) Kenneling
b
________________ is a natural consequence of significant human involvement in many service delivery systems. a.) Validity b.) Variability c.) Compatibility d.) Flexibility
b
All of the following are problems smaller firms face regarding targeting market segments EXCEPT:
backward integration
Typically a firm sets operational objectives _______________ in the strategic marketing plan.
by year (moderate)
A _____________ is any act or performance that one party can offer another that is essentially intangible and does not result in the ownership of anything. a.) product b.) price c.) service d.) promotion
c
A useful way to conceptualize decline businesses is with the twin concepts of _______________ and _______________. a.) market growth and market share b.) market share and market hospitality c.) market hospitality and business strengths d.) business strengths and market growth
c
Accepting applications, orders, and reservations is the supplementary service element referred to as _______________. a.) information b.) consultation c.) order-taking d.) hospitality
c
According to the growth-share matrix, products/businesses with high market growth and high market share are often called _______________. a.) cash cows b.) dogs c.) stars d.) wildcats
c
According to the text, _______________ is an especially favored strategy when the basis of fragmentation is geographic. a.) standardization b.) direct entry c.) acquisition d.) harvesting
c
According to the text, ________________ is provision of caring, individualized attention to customers. a.) responsiveness b.) assurance c.) empathy d.) reliability
c
According to the text, all of the following are alternative approaches to increasing product use EXCEPT: a.) Developing new product uses b.) Increasing quantity per use occasion c.) Design the product for infinite life span d.) Make the product easier to use
c
According to the text, in developed countries, _______________ now accounts for upward of 70 percent of both employment and GDP. a.) manufacturing b.) agriculture c.) services d.) coal mining
c
According to the text, presence of the experience curve leads to two broad pricing options that include ______________ and _______________. a.) structured pricing and skim pricing b.) regulated pricing and penetration pricing c.) penetration pricing and skim pricing d.) skim pricing and regulated pricing
c
According to the text, the three primary ways a follower firm can pursue growth with the possible objective of ultimately dethroning the leader include all of the following EXCEPT: a.) Market segmentation b.) Kenneling c.) Harvesting d.) Direct attack
c
According to the text, the two "continue" options for competing firms in the mature stage of the product life cycle are _______________ or _______________. a.) harvest or rationalize b.) harvest or maintain position c.) maintain position or rationalize d.) maintain position or kenneling
c
According to the text, to _______________ means selling the business to another organization. a.) harvest b.) maintain c.) divest d.) liquidate
c
According to the text, which of the following supplementary service elements refers to the requests for payment? a.) Information b.) Consultation c.) Billing d.) Order-taking
c
An example of _______________ is when an Apple Ipod customer buys a Macintosh computer. a.) negative complementarity b.) post complementarity c.) positive complementarity d.) dual complementarity
c
Good market segments should satisfy all the following criteria except: a. stable b. measurable c. undifferentiated d. accesible
c
Product-specific barriers are related to the product form and include all of the following EXCEPT: a.) Access to capital b.) Access to human resources c.) Patents d.) Access to raw materials
c
The _______________ choice to exiting an industry requires that the firm solve a marketing problem by identifying the right customer for the business. a.) harvest b.) maintain c.) divest d.) liquidate
c
The firm's _______________ is a collection of products. a.) cost of capital b.) return on asset c.) product portfolio d.) net present value
c
The key feature of the _______________ stage of the product life cycle is the potential for market segmentation that makes market research skills critical. a.) introductory b.) early growth c.) late growth d.) maturity
c
The options for a follower in the early growth stage of the product life cycle include all of the following except: a. seeking market leadership b. exiting the market c. settling for third place d. focusing on gaining leadership in a particular market segment or segments
c
The two strategic options of firms restructuring offers in fragmented mature markets are _______________ and _______________. a.) maintaining and divesting b.) divesting and acquisition c.) acquisition and standardization d.) standardization and harvesting
c
Which of the following companies developed and introduced the original growth-share matrix? a.) General Electric b.) Motorola c.) the Boston Consulting Group d.) Microsoft
c
Which of the following describes the two broad options for a follower firm that chooses to exit an industry? a.) Harvest or maintain b.) Maintain or liquidate c.) Divest or liquidate d.) Liquidate or harvest
c
Which of the following does NOT represent one of the key variables influencing perceived service quality: a. responsiveness b. reliability c. variability d. assurance
c
Which of the following is NOT a tangible element of a service used by customers to anticipate the experience and form their expectations? a.) Service facilities b.) Service equipment c.) Service software d.) Service personnel
c
Which of the following is NOT mentioned in the text as a basic option for follower firms in the early growth stage? a.) Seek market leadership. b.) Settle for second place. c.) Change the market culture. d.) Exit the market
c
Which of the following is NOT mentioned in the text as a supplementary element that supports a firm's core product or service? a.) Information b.) Consultation c.) Culture d.) Order-taking
c
Which of the following is NOT mentioned in the text as a type of barrier to growth that must be analyzed to determine if the life cycle is in maturity? a.) Technology b.) Economic c.) Cultural d.) Behavioral
c
Which of the following is NOT one of the three types of barriers considered critical in forestalling competition from entering a newly developing market? a.) Government-imposed b.) Product/market-specific c.) Culture-specific d.) Firm-driven
c
Which of the following phrases describes the point at which a customer is either satisfied or dissatisfied? a.) "Moment of Guarantee" b.) "Moment of Commitment" c.) "Moment of Truth" d.) "Moment of Inseparability"
c
_______________ means emphasizing increases in short-term cash flow at the expense of maintaining market share or sales volume. a.) Segmenting b.) Concentrating c.) Harvesting d.) Maintaining
c
________________ include corporate functions such as R&D, human resources, and shareholder relations. a.) Variable costs b.) Direct fixed costs c.) Indirect fixed costs d.) Total costs
c
Advantages of using financial analysis for product management include all of the following EXCEPT:
comparable markets
All of the following are options for effectively managing multiple business units EXCEPT:
competitor strategic alliance
According to the growth-share matrix, those products/businesses that are typically viewed as the most risky, because of the inherent uncertainty in high-growth markets and the weak market-share position are known as _______________. a.) cash cows b.) dogs c.) stars d.) wildcats
d
According to the text, a market may be viewed as inhospitable to decline if any of the following exists EXCEPT: a.) The decline is rapid or uncertain. b.) The market is commodity-based. c.) Competitors are viable and credible. d.) Customer switching costs are high
d
According to the text, deregulation has led to easier market entry in all of the following industries EXCEPT: a.) Financial services. b.) Transportation. c.) Telecommunications. d.) Automobile manufacturing
d
According to the text, the _______________ approach to choosing among investment opportunities is only really useful for assessing existing products/businesses. a.) Microsoft/Intel screen b.) GE/McKinsey screen c.) IBM/Oracle screen d.) growth-share matrix
d
According to the text, the most common government-imposed barrier is _______________. a.) a sanction b.) an embargo c.) a quota d.) a patent
d
All of the following are options for effectively managing multiple business units EXCEPT: a. developing separate missions b. intrafirm competition c. intrafirm collaboration d. competitor strategic alliance
d
All of the following are problems smaller firms face regarding targeting market segments except a. demand shortage b. being too successful c. high costs d. backward integration
d
Appearance of physical facilities, equipment, personnel, and communication materials is the key variable referred to as _______________. a.) assurance b.) empathy c.) reliability d.) tangibles
d
Attitudes, life stage, personality, and lifestyle characteristics are examples of which of the following categories of candidate descriptor variables? a. geographic b. demographic c. behavioral d. sociopsychological
d
The ability to perform the promised service dependably and accurately is the key variable referred to as _______________. a.) responsiveness b.) assurance c.) empathy d.) reliability
d
The firm______ form implementation programs for individual segments. The firm may gain cost efficiencies from using the same sales force and similar distribution channels and/or sharing brand equity. a. experiences independence b. suffers negative synergy c. experiences interdependence d. enjoys positive synergy
d
The firms must make all of the following types of decisions when determining which segments it will target for effort and how it will position itself in those market segments except: a. results b. resources c. actions d. retraction
d
The supplementary service element that lies outside the routine of normal service delivery is referred to as _______________. a.) consultation b.) order-taking c.) hospitality d.) exceptions
d
Variety is customer needs often drives _____________ as firms add products to fill product line gaps.. a.) market segmentation b.) market penetration c.) product concentration d.) product proliferation
d
When a firm has many current customers, it can use____ approaches to place purchase transactions in a data warehouse. the firm can then use data mining techniques to identify groups based on purchasing patterns, then tailor offers to individual customers based on those patterns. a. perceptual mapping b. factor analysis c. linear extrapolation d. customer relationship management
d
Which of the following barriers consists of a drive for low costs that allows low prices and may deter competitor entry, as well as the development and exploitation of first-mover advantage? a.) Government-imposed b.) Product/market-specific c.) Culture-specific d.) Firm-driven
d
Which of the following describe products/businesses that are often marginally profitable, yet, to continue to hold position and grow with the market, they consume substantial cash for investment in fixed assets and working capital? a.) cash cows b.) dogs c.) stars d.) wildcats
d
Which of the following financial analysis approaches focuses on the opportunity's annual profit less an explicit charge for capital? a. payback b. net present value c. internal rate of return d. economic profit
d
Which of the following financial analysis approaches to developing a successful product management strategy is defined in terms of the time it takes to pay back the initial investment? a.) Net present value b.) Conjoint analysis c.) Internal rate of return d.) Payback
d
Which of the following is NOT a broad strategic option for followers in concentrated mature markets? a. improving market position by growing sales b. keep on truckin c. exiting d. developing a new product
d
Which of the following is NOT a factor related to the delivery at a service facility? a. exterior b. interior c. offstage d. indivisible
d
Which of the following is NOT a factor that makes services significantly different from products? a.) Intangibility b.) Inseparability c.) Variability d.) Technology
d
Which of the following is NOT a matter of focus for a firm considering harvesting its product line slowly? a. cutting costs b. minimizing investment c. raising prices d. decreasing prices
d
Which of the following is NOT a pressure for over investment in mature products to gain market share from entrenched competitors? a.) few alternative opportunities b.) internally focused funding criteria c.) politcal power of mature product champions d.) fear of cannibalization
d
Which of the following is NOT a reason that firms underinvest in mature products? a.) Limited view of the competition b.) Fear of cannibalization c.) Inertia d.) Political power of mature-product champions
d
Which of the following is mentioned in the text as the approach that has the weakness of having only two criteria? a.) Microsoft/Intel screen b.) GE/McKinsey screen c.) IBM/Oracle screen d.) growth-share matrix
d
Which of the following is not one of the common differentiators for a firm offering a product in different versions or different variations? a. time availability b. product performance c. limitations on access and functionality d. market penetration
d
Which of the following is not one of the key variables that influence perceived service quality according to SERVQUAL? a.) Responsiveness b.) Assurance c.) Empathy d.) Self-efficacy
d
Which of the following means closing down and selling the assets of a business? a.) Harvest b.) Maintain c.) Divest d.) Liquidate
d
Which of the following strategies is especially viable if the leader has been lazy, over-milking the product via underinvestment, or arrogant in serving customers inadequately? a.) Market segmentation b.) Kenneling c.) Harvesting d.) Direct attack
d
Which of the following supplementary service elements refers to consideration and courtesy in attending to customer needs? a.) Information b.) Consultation c.) Order-taking d.) Hospitality
d
_________________ is the firm's annual profit less an explicit charge for capital. a.) Return on assets b.) Net present value c.) Internal rate of return d.) Economic value added
d
Which of the following is NOT a matter of focus for a firm considering harvesting its product line slowly?
decreasing prices
Which of the following is NOT a broad strategic option for followers in concentrated mature markets?
developing a new product
According to the text, to _______________ means selling the business to another organization.
divest (easy)
The _______________ choice to exiting an industry requires that the firm solve a marketing problem by identifying the right customer for the business.
divest (moderate)
Which of the following financial analysis approaches focuses on the opportunity's annual profit less an explicit charge for capital?
economic profit
The firm __________ from implementation programs for individual segments. The firm may gain cost efficiencies from using the same sales force and similar distribution channels and/or sharing brand equity.
enjoys positive synergy
When a firm allocates resources _____________, it allocates resources among target market segments.
externally (moderate)
Which of the following pricing strategies is viable if government and/or product-specific entry barriers are high, customer willingness to try is strong, and customers are relatively price insensitive? e.) price penetration f.) price skimming g.) price structuring h.) price regulations
f
According to the growth-share matrix, products/businesses with low market growth but high market share are referred to as stars.
false
According to the text, assurance is the willingness to help customers and provide prompt service.
false
According to the text, harvesting is an especially favored strategy when the basis of fragmentation is geographic.
false
According to the text, service software is the physical goods that are typically required to provide services.
false
According to the text, the GE/McKinsey screen is only really useful for assessing existing businesses.
false
An example of negative complementarity is when a software customer buys successive versions of a software product.
false
Direct fixed costs include corporate functions such as R&D, human resources, and shareholder relations.
false
In the maturity stage of the product life cycle, advertising emphasis shifts to brand differentiation and selective demand creation
false
Low prices during introduction are typically termed skimming strategies. The strategies require significant effort to reduce costs continually, and management must resolve to accept low margins for an extended period despite large R&D expenditures
false
Market penetration relates to differences among customers that management finds useful in developing marketing strategy.
false
Methods of delivering pre-purchase customer service include installation, spare parts availability, and traditional technical service departments in many manufacturing companies.
false
Order-taking is the dimension of service that describes the dialogue to probe customer requirements and develop tailored solutions.
false
Order-taking is the supplementary service element that refers to the requests for payment
false
Poor business strengths, even in hospitable markets, suggest that the firm implement a maintain strategy.
false
The correct equation of return on investment is profit divided by assets
false
The dominant option for a follower firm in the early-growth stage of the product life cycle seeking growth is segmentation and differentiation through imitation.
false
The original and most popular portfolio model is the multifactor portfolio matrix
false
To harvest or maintain are the two broad options of a follower firm that chooses to exit an industry
false
Wildcats describe products/businesses that trail market leaders in low-growth markets
false
Which of the following is NOT a pressure for over investment in mature products to gain market share from entrenched competitors?
fear of cannibalization (moderate)
A(n) _______________ strategy means that the firm copies the leader, but is more effective in execution.
imitation (moderate)
According to the text, the two broad options that are available to firms pursuing the leadership objective are _______________ and _______________.
imitation and leapfrog (difficult)
Which of the following is NOT a method of generating growth in a mature market?
increasing price
Which of the following is NOT a factor related to the delivery at a service facility?
indivisible
All of the following are reasons that firms underinvest in mature products EXCEPT:
internally focused funding criteria
In the ______________ and ______________ stages of the product life cycle, firms often set priorities on growth and/or market share.
introduction and early growth (moderate)
The concept that a follower firm may acquire several unprofitable or marginally profitable low market share products from other firms and develop a strong competitor is called _______________.
kenneling (easy)
The key feature of the _______________ stage of the product life cycle is the potential for market segmentation that makes market research skills critical.
late growth (moderate)
According to the text, the two "continue" options for competing firms in the mature stage of the product life cycle are _______________ or _______________.
maintain position or rationalize (moderate)
A useful way to conceptualize decline businesses is with the twin concepts of _______________ and _______________.
market hospitality and business strengths (difficult)
Which of the following is not one of the common differentiators for a firm offering a product in different versions or different variations?
market penetration pricing
The ______________ is the firm's game plan for the market, pointing the way to firm actions.
market strategy (moderate)
The net financial position of the majority of products at the introduction stage of the product life cycle is _______________.
negative (easy)
Low prices during introduction are typically termed _______________ and the firm must accept low profit margins for a substantial time period.
penetration pricing (easy)
According to the text, presence of the experience curve leads to two broad pricing options that include ______________ and _______________.
penetration pricing and skim pricing (difficult)
The purpose of _______________ is to create a unique and favorable image for the firm's products in the customer's mind.
positioning (easy)
According to the text, _______________ is sometimes called the heart of the product/market strategy.
positioning (moderate)
During which of the following phases of the purchase process should the firm assist customers by helping them identify needs and by providing promotional information about products and purchase locations?
prepurchase
In _______________, prices stay high as costs are reduced, and the firm earns high margins for limited fixed investment.
price skimming (moderate)
Which of the following pricing strategies is viable if government and/or product-specific entry barriers are high, customer willingness to try is strong, and customers are relatively price insensitive?
price skimming (moderate)
Using the ______________, a firm places most marketing effort downstream on indirect customers which are consumers and end users.
pull strategy (moderate)
Positioning requires the firm to take each of the following actions within segments EXCEPT:
screen new product ides
Which of the following is NOT one of the three important issues when targeting customers?
select the distributor that uses a focus strategy to target its customers
A(n) ______________ is a cash incentive for retailer and distributor salespeople.
spiff (moderate)
The two components of performance objectives include ______________ and ______________.
strategic objectives and operational objectives (difficult)
While ______________ are qualitative and directional, establishing the general direction the firm wants to take, _______________ are quantitative and time bound.
strategic objectives; operational objectives (difficult)
Service guarantees are most appropriate for each of the following EXCEPT when:
the service price is low
A service is any act or performance that one party can offer another that is essentially intangible and does not result in the ownership of anything.
true
According to the growth-share matrix, those products/businesses that are typically viewed as the most risky, because of the inherent uncertainty in high-growth markets and weak market-share position, are known as wildcats.
true
According to the text, cash cows should represent the firm's primary internal cash source.
true
According to the text, product proliferation implies a large number of product variations
true
According to the text, the most common government-imposed barrier is a patent
true
According to the text, the most commonly used financial analysis methods that consider time are internal rate of return and net present value.
true
According to the text, the multifactor portfolio matrix is also known as the GE/McKinsey screen
true
According to the text, the two broad options that are available to follower firms pursuing a leadership objective in the early-growth stage of the product life cycle are imitation and innovation.
true
Costs that vary directly with sales volume are referred to as variable costs.
true
Data provided in response to customers' questions and in anticipation of their needs is the supplementary service element referred to as information
true
Empathy is mentioned in the text as provision for caring, individualized attention to customers.
true
For follower firms in mature markets, the two status quo options are maintain position or rationalize
true
Harvesting means emphasizing increases in short-term cash flow at the expense of maintaining market share or sales volume.
true
Hospitality is the dimension of service that describes consideration and courtesy in attending to customer needs
true
If entry barriers are low and the market is price sensitive, penetration pricing would be most appropriate.
true
Pre-purchase customer service is conceptualized as those activities that help prepare the customer for the purchase decision.
true
Product cannibalization refers to the situation when a firm introduces a lower-margin product that is expected to lead to reduced sales of a higher-margin product.
true
Reliability is mentioned in the text as the most important variable impacting perceived quality
true
Service facilities can be conceptualized as comprising both interior and exterior.
true
Services that focus on people generally require the customer's physical presence or interactivity.
true
The ability to perform the promised service dependably and accurately is the key variable referred to as reliability.
true
The concept that a follower firm may acquire several unprofitable or marginally profitable low market share products from other firms and develop a strong competitor is called kenneling.
true
The experience curve describes the theory in which unit costs are reduced in a predictable manner as accumulated volume increases.
true
The net financial position of the majority of products at the introduction stage of the product life cycle is positive
true
The two major options for firms competing in mature fragmented markets are acquisition and standardization and branding.
true
Variability is a natural consequence of significant human involvement in many service delivery systems
true
A well-designed ______________ provides a convincing answer to a deceptively simple question: "Why should target customers prefer the firm's offer to those of competitors?"
value proposition (moderate)
The _______________ is the firm's major competitive weapon for attracting, retaining, and growing customers; it also defines the firm's implementation focus.
value proposition (moderate)
Which of the following does NOT represent one of the key variables influencing perceived service quality?
variability