Chapter 18 Marketing Practice Quizzes

________ requires delivering more value and satisfaction to target customers than competitors do.

Competitive advantage

Companies do not differ in how they approach the strategy-planning process.

False

Entrepreneurial marketing exclusively involves developing formal marketing strategies and adhering to them closely. TRUE/FALSE

False

Although it might seem that the market leader has the most going for it, challengers often have what some strategists call a(n) ________. The challenger observes what has made the leader successful and improves upon it.

"second-mover advantage"

Retail Grocer Inc. just introduced a new store brand that is 17% cheaper than their existing name brand products. However, the profit margin is 4% instead of 2% on the name brand products. How much profit does Retail Grocer make on $82 million in sales with their new store brand?

$3.28 million

Marketing managers at Firm YYQ want to benchmark some performance metrics with their top competitors. They learned that in the most recent year (this year) the top three firms in this market have 79% of the overall market with the remaining 21% spread among about 12 other niche firms. Firm YYQ's management is concerned about declining performance and want to determine if their primary competitors are outperforming them and gaining market share or if it is simply due to a declining economy. They have compiled the following table of data to help them conduct their analysis.

13.9%

Jeremiah Industries has 24% of the current market share. However, Jeremiah's management believes they can expand the current $445 million market by 15% and increase their market share to 25%. What was the percentage increase in Jeremiah Industries' revenue attributed to the market share expansion and higher market share?

19.79%

Whereas the mass marketer achieves ________, the nicher achieves ________.

high volume; high margins

Informal ways of developing strategy include all of the following EXCEPT ________.

implementing formal competitive marketing strategies

Rather than challenging head on, a challenger can make a(n) ________ attack on the competitor's weaknesses or on gaps in the competitor's market coverage.

indirect

Cozy Country Market entered the candle business with a unique product: a line of candles made from soy that produces less smoke and lasts up to twice as long as other candles. The firm sold this unique product exclusively to a few niches. The candles were priced at twice the cost charged for normal candles. The product was also sold online and in unconventional outlets not dominated by market leaders. In this case, Cozy Country Market was using a(n) ________ against the market leaders.

indirect attack

Companies can identify their competitors from both ________ points of view.

industry and market

Companies that have been in existence for some time often lose the marketing creativity and passion that they had at the start. They often need to refresh their marketing strategies and try new approaches, known as ________.

intrapreneurial marketing

Greener-grass Inc. is a lawn care company providing landscaping and lawn maintenance services to customers in and around Kansas City. The marketing team at Greener-grass carefully tracks the moves of competing companies, watching for shifting strategies and new promotions. The marketing team is also in constant touch with customers, using surveys and other feedback methods to find out what kind of services customers value the most. Greener-grass is most accurately described as having a ________ orientation.

market

A ________ company watches both their customers and their competitors.

market-centered

The market subsegment that a company exclusively caters to may dry up, or it might grow to the point that it attracts larger competitors. This is why such companies practice ________.

multiple niching

Fifty percent of the market is in the hands of Company A, 30 percent is in the hands of Company B, 15 percent is in the hands of Company C, and the remaining 5 percent is in the hands of Company D. Based on these hypothetical numbers, Company D is the market ________.

nicher

Computer mouse and interface device maker AdvTechPRO is only a fraction the size of software giant Terminal Time Software Inc. AdvTechPRO manufactures every variation of computer mouse imaginable (for left-handed people, wireless mice, shaped like actual mice, LED mice, etc.). Through skillful ________, the firm dominates the PC mouse market, with Terminal Time Software as its runner up.

niching

Tomorrow's leading companies will succeed by seeking out unoccupied positions in uncontested market spaces. Such strategic moves, termed ________, create powerful leaps in value for both the firm and its buyers, creating new demand for new products.

value innovation

A market challenger must first define ________.

which competitors to challenge

A disadvantage of a competitor-centered company is that it ends up simply matching or extending industry practices rather than seeking innovative new ways to create more value for customers. TRUE/FALSE

True

According to the overall cost leadership competitive strategy, the company works hard to achieve the lowest production and distribution costs. TRUE/FALSE

True

As a first step, companies can gather data on each competitor's goals, strategies, and performance over the past few years. TRUE/FALSE

True

Benchmarking involves comparing the firm's products and processes to those of the competitors to identify best practices to improve quality and performance. TRUE/FALSE

True

Companies can identify their competitors from an industry point of view. TRUE/FALSE

True

Essential-Beauty is a rapidly growing firm that manufactures women's makeup, perfumes, and nail-care products. The company has established itself as a high-end cosmetic product brand available at most national drug stores. In the past, almost all of the advertising for Essential-Beauty has been in women's fashion magazines.The firm is now launching a new line of skin care products, ranging from facial cleansers to body lotion. These products are designed to be marketed to a broader audience, so the marketing team is exploring the effectiveness of different promotional mixes.The bottom line for Essential Beauty is that there are many approaches to developing effective competitive marketing strategies. TRUE/FALSE

True

Market leaders can expand the market by developing new users, new uses, and more usage of its products. TRUE/FALSE

True

Strategic moves-termed value innovation-create powerful leaps in value for both the firm and its buyers, creating all-new demand and rendering rivals obsolete.

True

The market leader refuses to be content with the way things are and leads the industry in new products, customer services, distribution effectiveness, promotion, and cost cutting. TRUE/FALSE

True

When benchmarking, you typically compare your firm to the leading firms in the industry. TRUE/FALSE

True

The WD-40 Company's knack for finding new uses has made the product one of the truly essential survival items in homes around the world. This example shows that ________.

a market leader strategy is to find new uses for existing products

The once-blazing-hot video-rental superstore Blockbuster didn't go bankrupt at the hands of other traditional brick-and-mortar retailers. Instead, it fell victim first to unexpected competitors such as direct marketer Netflix. This is an example of ________.

competitor myopia

On the positive side, the ________ company develops a fighter orientation, watches for weaknesses in its own position, and searches out competitors' weaknesses.

competitor-centered.

A company can become so ________ centered that it loses its even more important focus on maintaining profitable ________ relationships.

competitor; customer

Many approaches to developing effective competitive marketing strategies exist. There may be ________ between the formulated side of marketing and the creative side, as creativity and passion help build and maintain success.

constant tension

Which of the following is the best response a company can make to competitive threats?

continuous innovation

American Express will do almost anything to build long-term customer loyalty and to capture customer lifetime value. Which of the following competitive marketing strategies is being pursued by American Express?

customer intimacy

Fifty percent of the market is in the hands of Company A, 30 percent is in the hands of Company B, 15 percent is in the hands of Company C, and the remaining 5 percent is in the hands of Company D. Based on these hypothetical numbers, Company C is the market ________.

follower

Boston Beer Company employs a large sales force and has a marketing department that carries out market research and plans strategy. Although Boston Beer Company is much smaller and less formal in its strategy than Anheuser-Busch InBev, it has adopted many of the tools used in professionally run marketing companies. Boston Beer uses ________.

formulated marketing

Which of the following statements is true of intrapreneurial strategy?

Intrapreneurial companies need to build more marketing initiative encouraging employees to be more entrepreneurial.

________ are runner-up firms that want to hold their share in an industry without rocking the boat.

Market followers

The ________ company is in a better position to identify new opportunities and set long-run strategies that make sense.

customer-centered

To gain competitive advantage, a company should do all of the following EXCEPT ________.

deliver value at the same price as competitors and decrease market share

Market leaders can expand the market by ________ and more usage of the product.

developing new users

If a company is a market leader in one category, and a market challenger or market nicher in other categories, it will follow ________ strategies for each category.

different

An example of blue ocean competitors is the recent surge of ________.

direct-to-consumer (DTC) brands.

What are the stages that the approaches to marketing strategy and practice usually pass through?

entrepreneurial marketing, formulated marketing, and intrapreneurial marketing

Which of the following is a market leader strategy?

expanding market share

Ritz-Carlton focuses on the top 5 percent of corporate and leisure travelers. Bose concentrates on very high-quality electronics products that produce better sound. These companies serve a few market segments well rather than going after the whole market. They use a(n) ________ strategy

focus