4309 final 9-11

Failing support for globalization

According to the Core Reading, which of the following is NOT a threat presented by rising income inequality?

high price

According to the framework used in the Core Reading to predict the likelihood of government intervention in a market, which of the following is least likely to be a sustainable source of competitive advantage?

all of the choices are potential negative consequences.

Porsche repositioned its automobile brand via a gender-bending strategy—it launched a brand extension into the sports utility vehicle category, the Porsche Cayenne, to appeal to women, particularly suburban soccer moms. The Cayenne was Porsche's first vehicle that is not a sports car. Repositioning an identity brand such as Porsche can have a negative consequence because:

lifestyle groups and social groups

PRIZM is a commonly used segmentation system that groups consumers into:

conjoint analysis.

A company that develops artificial flavorings for candy manufacturers uses research to refine its market offerings. Its studies require participants to make repeated comparisons between pairs of products; in each pair, the products differ on the key attributes of flavoring strength and price. The research approach of this firm is:

resources and competencies.

A firm should consider three key factors when choosing a target segment, including not only the external factors of competition and segment characteristics but also the firm's internal:

100

A firm's minimum efficient scale is the smallest volume at which it can minimize its average total cost (ATC). Average total cost is defined as (total fixed cost + total variable cost)/(quantity produced). Fixed costs are costs that do not change directly with the quantity produced (for example, the cook's salary in a restaurant). Variable costs vary directly with the quantity produced (for example, the cost of ingredients used in a restaurant). Total variable costs are the variable cost per unit multiplied by the number of units produced. Consider a fast-food restaurant with variable costs of $1 a meal. A cook's salary is $1,000 per week, and one cook can cook up to 100 meals per week. If more than 100 meals a week (but no more than 200 meals a week) are needed, the restaurant must hire one additional cook, and so on. That is, for 0 to 100 meals a week, the weekly fixed costs are $1,000; for 101 to 200 meals a week, the weekly fixed costs are $2,000; for 201 to 300 meals a week, the weekly fixed costs are $3,000; and so on. What is the restaurant's minimum efficient scale (in meals per week)?

11

A firm's minimum efficient scale is the smallest volume at which it can minimize its average total cost (ATC). Average total cost is defined as (total fixed cost + total variable cost)/(quantity produced). Fixed costs are costs that do not change directly with the quantity produced (for example, the cook's salary in a restaurant). Variable costs vary directly with the quantity produced (for example, the cost of ingredients used in a restaurant). Total variable costs are the variable cost per unit multiplied by the number of units produced. Consider a fast-food restaurant with variable costs of $1 per meal. A cook's salary is $1,000 per week, and one cook can cook up to 100 meals per week. If more than 100 meals a week (but no more than 200 meals a week) are needed, the restaurant must hire one additional cook, and so on. That is, for 0 to 100 meals a week, the weekly fixed costs are $1,000; for 101 to 200 meals a week, the weekly fixed costs are $2,000; for 201 to 300 meals a week, the weekly fixed costs are $3,000; and so on. What is the restaurant's average total cost per meal at minimum efficient scale?

a combination of demographics and benefits sought

A toothpaste manufacturer believes its most likely customers are parents of young children who value a brand with a kid-friendly taste and texture. The company's segmentation is probably based on

automation

According to the Core Reading, employment and wages have grown at the very bottom and at the very top of the income distribution, while workers in the middle-income range have seen a relative decline in employment and income. Which of the following is NOT cited as a possible cause of this increase in inequality?

the cost of quality

According to the Core Reading, quality provides a greater barrier to entry as a fixed cost for newspapers than it does for restaurants. Which of the following is the best explanation for this situation?

( B and C) B) Firms with stronger brands dominated the market C) It is difficult for consumers to assess the quality of tires

According to the Core Reading, what was Uniroyal's motivation in lobbying the government to create a tire-rating standard?

money that a consumer spends with one firm as a share of all the money that the consumer spends in that category.

Among the segmentation variables related to purchase behavior is consumers' share of wallet. This term refers to the:

aligns with the specific needs of the target market

Relevance is a critical criterion in formulating a value claim for a positioning statement. The makers of Cialis, an erectile dysfunction (ED) drug, are considering a value claim that it "enhances intimacy and relationship." To assess the relevance of this claim, Cialis must determine if the claim:

consumer segments

Firms CANNOT create:

cite all of the benefits that the brand offers.

For claims about the product, positioning statements should:

experiential and social value

Harley-Davidson motorcycle owners, who pay a price premium for their motorbikes, have formed the Harley Owners Group (HOGs), whose members take motorcycle rides and road trips together. These owners also derive satisfaction by being able to express their individuality and nonconformity through the Harley bikes that they own. Based on these factors, these owners are deriving which types of value from the Harley-Davidson brand?

all of the choices are potential options.

Levi Strauss & Co. is reviewing approaches to mitigating the risk of repositioning its well-established jeans brand. Which of the following actions is NOT a relevant approach?

for technology products where the cost of new versions is extremely low.

Mass customization is most appropriate:

all of these answers are correct

Miller Lite Beer's brand positioning establishes regular (as opposed to low-calorie) beers as the brand's frame of reference for points of parity, which

companies

The Core Reading describes the theory of hypercompetition and asserts that we live in "a time of rapid strategic moves that erode competitive advantage at ever greater speed." According to the reading, which of the following is evidence that offers some limited support for the theory of hypercompetition?

DISTANCE BETWEEN TWO CUSTOMERS IN A CLUSTER IS MINIMIZED

The goal of cluster analysis is to group customers and determine the number of groups, or clusters, so that the:

true

True or false: A criterion for making an effective value claim is that the claim be realistic. Tide using physical demonstrations to promote its detergent's cleaning power and Nike using LeBron James to endorse its basketball shoes are both illustrations of making value claims realistic

true

True or false: A positioning statement is the same as a unique selling proposition

true

True or false: Brand perceptual maps can be constructed only by asking consumers directly (i.e., via surveys) to compare and contrast brands across a set of product attributes

false

True or false: Brand positioning value claims must be distinctive. Irrelevant attributes—product characteristics that provide consumers no actual benefits—should not be used

false

True or false: Learning curve effects are likely to be more significant in manufacturing industries than they are in service industries.

false

True or false: McDonald's hamburgers exhibit network effects

false

True or false: Superstar effects refer to the ability of actors and other celebrities to earn greater incomes than in the past

true

True or false: Supporting evidence for a brand's value claim must be based on scientific and technological data that support the brand's product performance claim.

false

True or false: Switching costs always encourage companies to raise prices because customers cannot easily defect

the product quality is difficult to judge and c) the firm has established a powerful brand

Under what circumstances might a firm be able to sustain a competitive advantage due to uninformed consumers?

most costs are fixed in their process of production

Under which of the following circumstances are economies of scale most likely to provide a sustainable competitive advantage?

false

Uniformed consumers who choose branded products such as Tylenol or Kleenex over less expensive but equivalent unbranded products are exhibiting irritational behavior.

taste-based

What is the best explanation for Budweiser being America's best-selling beer?

faithful

When Dove's Real Beauty rebranding initiative attempted to replace women's notion of beauty (thin, white, and blonde) with women who are healthy, realistic, and have high levels of self-esteem, consumers attacked Unilever, the parent company, with 1) having a double standard because its Axe skincare brand promoted stereotypical depictions of women's beauty and desirability. This is an illustration of a brand's value claim as not being:

uninformed consumers and switching costs

When European consumers could finally use their mobile phones while traveling abroad, wireless users who roamed outside their home countries were sometimes shocked to return home to see very large mobile phone bills. These high bills resulted from roaming charges imposed by their home wireless carrier for using wireless networks in other countries. In 2016, the European Union (EU) imposed limits on roaming charges for mobile phones. What sources of market failure are most likely to be their justification for intervention?

positioning

When competing against other energy drinks like Red Bull and Monster, 5-Hour Energy is thinking through how to get its brand to occupy a clear, distinctive, and desirable place in its target customers' minds. What problem is it trying to solve?

functional values

When shopping for a smartphone, a consumer first compares prices to see which brand offers the lowest price. After also inspecting the product features of the various phones, however, she decides that the lowest-priced brand is not her choice. Instead, she selects the brand with the best features. This outcome is the result of the chosen brand's unique value claim that is known as:

consumers

A brand's position is based on value claims as perceived by:

favorable

A business-to-business (B2B) positioning strategy can sometimes be less profitable than business-to-consumer (B2C) positioning. When targeting industrial users with its power tools, for example, Black and Decker may have to offer profit-reducing volume discounts, costly product service support, replacement guarantees, and so on, when selling to businesses. Analyzing these profitability implications enables the company to choose value claims that are

Geography (urban versus suburban)

California Closets is a maker of closet organizers and custom storage solutions. Its products are designed for people who live in small spaces. Assuming the company plans to segment its market based on a single variable, which of the following is most appropriate?

whether or not the product will be priced at a premium

Choosing whether to use a rational or emotional positioning appeal requires analysis of several factors. Which factor listed below is NOT relevant for this decision?

positioning

During which step in the STP marketing process is a value proposition defined and an action plan developed?

reverse positioning

IKEA's positioning includes the elimination of sales assistance on the floor, no delivery or assembly of products, and offering only a limited variety of models. Yet IKEA furniture stores also offer low prices, supervised play centers for children while parents shop, and low-priced but quality dining in their restaurants. This is an example of

co-created

In Dove's Real Beauty rebranding to replace women's notion of beauty (thin, white, and blonde) with women who are healthy, realistic, and have high self-esteem, the company used a variety of marketing communications vehicles—billboards, TV advertising, YouTube videos, print ads, and so on, to promote its message. At the same time, consumers also weighed in via blogs and parody videos, newspaper columnists wrote about the campaign, and TV talk shows devoted entire programs to the subject. This is an illustration of a brand's value claims and position being

improved maneuverability and flexibility .

John Deere & Co. is deciding whether to use a feature-based claim or a benefit-based claim for its new JD 750 tractor's positioning. Which of the following is a benefit-based claim?

breakaway positioning

Samsung is positioning its newest model TV as having the sharpest picture and the most realistic colors , as well as having the thinnest screen monitor. This is an example of

mission formulation

Segmentation and targeting influence a company's resource allocation, potentially affecting strategic decisions in all of the following areas EXCEPT:

recency, frequency, and monetary value

Specialty retailers like Restoration Hardware, L.L.Bean, and Anthropologie make heavy use of direct mail catalogs. Such catalog marketers typically segment their markets based on three factors, each of which describes the nature of different customers' past purchases and correlates well with future purchases. Abbreviated as RFM, the factors are:

answer: How ED sufferers choose an ED drug that is their purchases criteria

The makers of Cialis, an erectile dysfunction (ED) drug, are deciding whether to use a rational appeal (lasts four times longer than competitor Viagra), or an emotional appeal (enhances relationship intimacy) in its brand positioning. To arrive at the right decision, management must consider

customers with similar needs and preferences

The segmentation process begins by grouping:

when do customers buy

There are many potential segmentation variables, but these variables can be grouped into three basic categories. The categories include all of the following EXCEPT

increasing trade promotion

Which of the following approaches is NOT an avenue for changing the position of Arm & Hammer Baking Soda in the minds of consumers in order to extend the product life cycle and increase sales?

A) licensing to more efficient firms can achieve greater market penetration. B) cooperating with complementors can help drive demand. C) collaborating to set standards can grow the size of the market.

Which of the following are reasons why a firm may wish to cooperate with others to exploit its intellectual property?

Segmentation enables targeted promotions

Which of the following is NOT a benefit of segmentation for organizations?

A) To reduce the cost of legal action

Which of the following might be reasons to participate in a patent pool?

They may lose customers to niche marketers

Which of the following represents the most significant risk to companies using a mass-marketing approach?

A) The learning curve asserts that the cost per unit diminishes as the cumulative volume of production increases

Which of the following statements about learning as a source of sustainable competitive advantage is correct?

Patent protection lasts longer

Which of the following statements about using patents to protect intellectual property is false ?

the first mover

Which of these firms is the most likely to be able to sustain competitive advantage through taste-based loyalty?

horizontal positioning

Whole Foods differentiates its grocery stores from traditional stores by offering organic, natural, and locally sourced products. At the same time, its products are, on average, 25% higher in price than those of regular (nonorganic) supermarkets. What type of positioning is Whole Foods using?

( all answers ) A) People who do not wear the dominant fashion are perceived as unfashionable. B) Fashion is highly visible, so others can see what you choose to wear, and you can see what others choose to wear. C) Clothing designers use celebrity endorsements to promote their clothes.

Why might fashion exhibit network effects? Answer: