MKT 3000 Chapter 2 Quiz

Companies must deliver more value and satisfaction to target consumers than its competitors to gain a

competitive advantage. A competitive advantage acts like a wall that the firm has built around its position in a market. This requires that companies sustain their advantage over time, minimize competitive pressure, and boost profits in the long term to remain viable in a highly competitive marketplace.

Singapore Airlines is recognized as an industry leader for exemplary customer service, and has continued to add new ways to serve customers better than competitors. In doing so, it has focused on sustaining its competitive advantage through ________ excellence.

customer Customer excellence is one of the strategies available to companies to develop a sustainable competitive advantage in the marketplace and focuses on retaining loyal customers and excellent customer service. Marketers like Singapore Airlines position themselves as leaders in customer service by continually investing in innovations to enhance the levels of service to their customers.

When a firm considers its overall objectives and considers the type of business it is in, it is engaged in which of the following steps of the marketing planning process?

defining the mission The mission statement of an organization addresses two major issues: the type of business a company is in and the overall objectives it hopes to achieve. Defining the mission is the first step in the process of developing the marketing plan.

Which growth strategy is being used when a firm introduces a new product or service to a market segment that is currently not served by the firm?

diversification In a diversification strategy, a firm introduces a new product or service to a market segment that currently is not served. Diversification opportunities may be either related or unrelated.

General Motors determined that it would close down divisions that were in low-growth markets that had relatively low market shares. According to the BCG product portfolio analysis, GM was identifying divisions in the ________ category for closure.

dogs By definition, small-business units in low-growth markets with relatively low market shares are called dogs according to the BCG product portfolio analysis.

Which of the following is one of the major considerations involved when a company develops its marketing strategy?

identification of target markets A marketing strategy identifies a firm's target markets(s), a related marketing mix (four Ps), and the bases on which the firm plans to build a sustainable competitive advantage.

Assuming Netflix was following a marketing plan, at which stage should it have given more consideration to the impact of the July 2011 price increase?

implementing the marketing mix In implementing the marketing mix, firms must make decisions about the product, price, place, and promotion. Pricing decisions should be value driven—the price charged must be perceived as giving customers a good value for the product received. If a price it set too high, it will not generate much sales volume and, in the case of Netflix, actually resulted in over 1 million lost customers—its customers did not perceive enough additional value to justify the price increases.

One way Netflix could grow its business would be to offer its existing services to foreign markets it does not currently serve. This would represent which growth strategy?

market development A market development strategy employs the existing market offering to reach new market segments, whether domestic or international.

Toothpaste manufacturers understand that consumers have different needs when it comes to toothpaste (i.e., teeth whitening, sensitive teeth, breath freshening, and tartar control). Knowing that, they have divided the market based on these various needs and developed toothpaste to accommodate each group. By doing so, these toothpaste manufacturers are involved in

market segmentation Market segmentation is the process of dividing the market into groups of consumers with different needs, wants, and characteristics for the purpose of developing products and services geared specifically for them.

Although Starbucks, Dunkin' Donuts, and McDonald's all strive to provide a good cup of coffee and pastries to their respective target markets, the difference in who they target, how they design their marketing mix, and what they choose as the basis of building their competitive advantage is directly related to their own

marketing strategy All three of these companies might appear to be marketing the same products, but closer analysis reveals that each of them targets a different market—with a completely different marketing mix—in order to gain a competitive advantage, which corresponds to a unique marketing strategy.

When marketers strive to get their customers the merchandise they want, when they want it, in the required quantities, and at a lower delivered cost than that of their competitors, they are hoping to achieve a sustainable competitive advantage through ________ excellence.

operational Firms can achieve a sustainable competitive advantage through their efficient operations, excellent supply chain management, and strong relationships with their suppliers.

When Netflix launched its streaming-only plan, the company anticipated that most current users would drop the rental plan and move to the new plan. In strategic terms, this is a growth strategy of

product development By offering a new product or service (a streaming-only plan) to its current target market, Netflix was pursuing a product development growth strategy.

A SWOT analysis involves an analysis of factors internal to the company, which include ________, as well as factors outside the company, which include ________.

strengths and weaknesses; opportunities and threats A SWOT analysis involves an objective assessment of a firm's internal factors (strengths and weaknesses) as well as those external to the firm (opportunities and threats) to provide a snapshot of the firm's current situation.

A situation analysis identified increasing competition, potential downsizing of the U.S. Postal Service, and cable pay-per-view expansion, which were ______ for Netflix. In response, Netflix was initially able to capitalize on the _____ of streaming, gaming platforms, and an iPhone app.

threats; opportunities For Netflix, the increasing competition, potential changes in the U.S. Postal Service, and changes in cable pay-per-view were all negative aspects of the external environment, so they were threats. However, there were also opportunities for Netflix—positive aspects of the external environment such as streaming, gaming platforms, and iPhone apps.

When Netflix first offered streaming, it expected that many rental customers would move to the new service. However, there were far less movie titles available through streaming as compared to DVD mail rentals. In a SWOT analysis, the lack of movies available for streaming would be classified as a(n)

weakness Weaknesses are negative, internal attributes of a firm. The lack of titles available through streaming caused users to see less value in that service, and hence it would be a weakness for Netflix.