Chapter 8 - Alternative Value Propositions
Most quality dimensions, such as performance, durability, reliability, and serviceability, are easy for buyers to evaluate.
Answer. False. Most quality dimensions, such as performance, durability reliability, and serviceability, are difficult if not impossible for buyers to evaluate.
The six quality dimensions include: performance, conformance to specifications, features, customer support, process quality, and _________.
Answer: Aesthetic design.
CSR refers to customer social relationship management.
Answer: False. CSR refers to Corporate Social Responsibility.
Firms that chose customer relationship as a value proposition just need to provide good functional benefits of their product or service.
Answer: False. Firms that create intimacy deliver an experience that goes beyond functional benefits.
It is believed that corporate social responsibility does not create shareholder value but rather just enhances a brand image.
Answer: False. In one survey more than 90% thought that socially responsible management creates shareholder value.
Schlitz improved its market position with its aggressive low-cost strategy.
Answer: False. Schlitz's decision to reduce costs led to a loss of perceived quality that was disastrous.
In order for the quality option to be effective, a firm doesn't need senior management commitment, because the quality department is in charge of the total quality management program.
Answer: False. See text under TQM.
The experience curve is automatic and occurs over time.
Answer: False. The experience curve is not automatic. It must be proactively managed.
In the business-to-business space, more companies are trying to move from being component suppliers to being systems solution players because systems-based organizations will more likely to be more cost effective.
Answer: False. These companies are making this move because a systems-based organization will be more likely to control the customer relationship.
Value should be determined by the firm and not by the customer.
Answer: False. Value is more likely to be real if it is driven from the customer's perspective rather than from the perspective of the business.
Perceived value can be created without compromising the brand.
Answer: True
A signal of high quality for clothing is price.
Answer: True.
A successful low cost strategy is usually multifaceted and supported by a cost-oriented culture.
Answer: True.
A value proposition is often an umbrella concept under which the supporting assets and competences and functional strategies and programs can be grouped.
Answer: True.
An experience curve strategy will usually enhance product innovation.
Answer: True.
Business strategies should offer a clear value proposition to customers and be supported by assets and competencies and functional strategies and programs.
Answer: True.
Niche specialists are successful because their strategies are based on commitment to a single product line or part of the market.
Answer: True.
To obtain significant operational economies, it is useful to examine the value chain and look for inherently high-cost components that could be eliminated or reduced.
Answer: True.
With the experience curve, the total cost of a product will decline at a predictable rate as experience in building the product accumulates.
Answer: True. The experience curve suggests that a firm accumulates experience in building a product, its costs in real dollars (net of inflation) will decline at a predictable rate.
The low-cost strategic option consists of all of the approaches below except: a. Scale economies b. No-frills product/service c. Delivery of superior customer service d. Production/operations e. Experience curve
Answer: c) Delivery of superior customer service. Customer service costs money.
A business strategy should be challenged with respect to whether it contains a real and perceived value proposition and whether that value proposition is relevant, ________ and ________.
Answer: sustainable, and feasible
