Marketing Management Chapter 11

E

1) The ________ has the largest market share and usually shows the way to other firms in price changes, new-product introductions, distribution coverage, and promotional intensity. A) market challenger B) market entrant C) market follower D) market nicher E) market leader

FALSE

101) As a market-follower strategy, an imitator duplicates the leader's product and packages and sells it on the black market or through disreputable dealers.

TRUE

102) As a market-follower strategy, an adapter takes the leader's products and adapts or improves them.

TRUE

103) Firms with low shares of the total market can become highly profitable through smart niching.

TRUE

104) An alternative to being a follower in a large market is to be a leader in a small market.

FALSE

105) The nicher achieves high sales volume, whereas the mass marketer achieves high margin.

TRUE

106) The growth stage of a product's life cycle is a period of rapid market acceptance and substantial profit improvement.

TRUE

107) During the maturity stage of a product life cycle, profits stabilize or decline because of increased competition.

FALSE

108) A fashion is a basic and distinctive mode of expression appearing in a field of human endeavor.

TRUE

109) Fads are fashions that come quickly into public view, are adopted with great zeal, peak early, and decline very fast.

FALSE

110) An inventor is the first to develop a working model while a product pioneer is the first to develop patents in a new-product category.

TRUE

111) Price, distribution, and communication are the nonproduct elements that marketers modify to increase product sales.

FALSE

112) An alternate way to increase sales volume is to expand the number of users by having them consume more of the product on each occasion.

TRUE

113) An alternate way to increase sales volume is to expand the number of users by converting nonusers.

TRUE

114) An alternate way to increase sales volume is to increase the usage rates among users by having consumers use the product in new ways.

FALSE

115) An alternate way to increase sales volume is to increase the usage rates among users by entering new market segments.

FALSE

116) The prime objective, during the introduction stage of a product life cycle, is to maximize market share.

FALSE

117) The product strategy during the maturity stage of the product life cycle should be to build more intensive distribution.

TRUE

118) During economic downturn, the potential value and profitability of some target consumers may change.

FALSE

119) Heavy focus on price reductions and discounts during recession allow firms to improve long-term brand equity and price integrity.

Every product class has the potential to attract buyers who are unaware of the product or are resisting it because of price or lack of certain features. A company can search for new users among three groups: those who might use it but do not (market-penetration strategy), those who have never used it (new-market segment strategy), or those who live elsewhere (geographical-expansion strategy).

120) Which three groups of customers can help expand a firm's market demand?

In satisfying customer needs, one can draw a distinction between responsive marketing, anticipative marketing, and creative marketing. A responsive marketer finds a stated need and fills it. An anticipative marketer looks ahead to needs customers may have in the near future. A creative marketer discovers solutions customers did not ask for but to which they enthusiastically respond. Creative marketers are proactive market-driving firms, not just market-driven ones.

121) Which three groups of marketers help satisfy a customer's needs?

In a counteroffensive, the market leader can meet the attacker frontally and hit its flank, or launch a pincer movement so it will have to pull back to defend itself. After FedEx watched UPS successfully invade its airborne delivery system, it invested heavily in ground delivery through a series of acquisitions to challenge UPS on its home turf. Another common form of counteroffensive is the exercise of economic or political clout. The leader may try to crush a competitor by subsidizing lower prices for the vulnerable product with revenue from its more profitable products, or it may prematurely announce a product upgrade to prevent customers from buying the competitor's product. Or the leader may lobby legislators to take political action to inhibit the competition.

122) What is counteroffensive defense? Explain with an example.

These broad strategies include: (1) counterfeiter - the counterfeiter duplicates the leader's product and package and sells it on the black market or through disreputable dealers; (2) cloner - the cloner emulates the leader's products, name, and packaging, with slight variations; (3) imitator - the imitator copies some things from the leader but maintains differentiation in terms of packaging, advertising, pricing, or location; and (4) adapter - the adapter takes the leader's products and adapts or improves them.

123) Characterize the four broad strategies often employed by market followers to meet their competitors.

The key idea in successful nichemanship is specialization. A firm that specializes in one type of end-use customer is an end-user specialist. For example, a value-added reseller (VAR)customizes computer hardware and software for specific customer segments and earns a price premium in the process. A firm that specializes at some vertical level of the production-distribution value chain is a vertical-level specialist. A copper firm may concentrate on producing raw copper, copper components, or finished copper products.

124) What are end-user and vertical-level specialists?

Fashion is one of the three special categories of product life cycles. A fashion is a currently accepted or popular style in a given field. Fashions pass through four stages: distinctiveness, emulation, mass fashion, and decline. The length of a fashion cycle is hard to predict. One view is that fashions end because they represent a purchase compromise, and consumers soon start looking for the missing attributes. Another explanation is that too many consumers adopt the fashion, thus turning others away. Still another is that the length of a particular fashion cycle depends on the extent to which the fashion meets a genuine need, is consistent with other trends in the society, satisfies societal norms and values, and keeps within technological limits as it develops.

125) What is fashion?

To sustain rapid market share growth now, the firm must: • improve product quality and add new features and improved styling. • add new models and flanker products (of different sizes, flavors, and so forth) to protect the main product. • enter new market segments. • increase its distribution coverage and enter new distribution channels. • shift from awareness and trial communications to preference and loyalty communications. • lower prices to attract the next layer of price-sensitive buyers. By spending money on product improvement, promotion, and distribution, the firm can capture a dominant position. It can trade off maximum current profit for high market share and the hope of even greater profits in the maturity stage.

126) What must the firm do to sustain rapid market share growth?

Three ways to change the course for a brand are market, product, and marketing program modifications. Market modification: A company might try to expand the market for its mature brand by working with the two factors that make up sales volume: Volume = number of brand users * usage rate per user. This may also be matched by competitors. Product modification: Managers also try to stimulate sales by improving quality, features, or style. Quality improvement increases functional performance by launching a "new and improved" product. Feature improvement adds size, weight, materials, supplements, and accessories that expand the product's performance, versatility, safety, or convenience. Style improvement increases the product's esthetic appeal. Any of these can attract consumer attention. Marketing program modification: Finally, brand managers might also try to stimulate sales by modifying nonproduct elements - price, distribution, and communications in particular. They should assess the likely success of any changes in terms of effects on new and existing customers.

127) Which are the three ways to change the course for a brand?

They can review product portfolios and brand architecture to confirm that brands and sub-brands are clearly differentiated, targeted, and supported based on their prospects. Luxury brands can benefit from lower-priced brands or sub-brands in their portfolios. Because different brands or sub-brands appeal to different economic segments, those that target the lower end of the socioeconomic spectrum may be particularly important during a recession. Value-driven companies such as McDonald's, Walmart, Costco, Aldi, Dell, E*TRADE, Southwest Airlines, and IKEA are likely to benefit most. Spam, the oft-maligned gelatinous 12-ounce rectangle of spiced ham and pork, found its sales soaring during the recession. Affordably priced and requiring no refrigeration, Spam is, its maker Hormel claims, "like meat with a pause button."

128) Explain how luxury brands can benefit during an economic recession from having lower-priced brands or sub-brands in their portfolio.

The three primary strategies that may be used by the market leader are: (1) expanding the total market by attracting new customers and by stimulating more usage of product; (2) defending market share; and (3) expanding market share.

129) Describe the three strategies that are necessary for a market leader to accomplish to stay on top.

B

13) Which of the following is the most constructive response a market leader can make when defending its market share? A) maintain basic cost control B) innovate continuously C) provide desired benefits D) meet challengers with a swift response E) provide expected benefits

The market-penetration strategy in this context would seek to get new customers from a group that might use the product but as yet do not.

130) Your marketing manager has asked you to develop a new customer strategy for your company. Additionally, you have been asked to develop, specifically, a market-penetration strategy to assist in gaining new customers. Describe a market-penetration strategy in this context.

Position defense means occupying the most desirable market space in consumers' minds, making the brand almost impregnable. Tide, as a popular laundry detergent, has become synonymous with washing machine detergent. Student answers may vary.

131) Assume that your firm is a market leader in manufacturing detergent. How would the firm use position defense as a defensive marketing strategy to maintain its share?

In mobile defense, the leader stretches its domain over new territories through market broadening and market diversification. Market broadening shifts the company's focus from the current product to the underlying generic need.

132) If you were asked to develop a mobile defense for your products that are likely to come under attack from a market challenger, what would you suggest?

A preemptive defense is a more aggressive maneuver that has as its purpose to attack before the enemy starts its offense. You can launch a preemptive defense by waging a guerrilla action across the market and keep everyone off balance. Another way to launch a preemptive defense is by introducing a stream of new products like denim jackets and skirts in various colors. Student answers may vary.

133) As a brand manager of a firm that manufactures denim jeans, how will you implement a preemptive defense marketing strategy to meet an anticipated competitive challenge?

The four factors to be considered before buying higher market share are: the possibility of provoking antitrust action, economic cost, the danger of pursuing the wrong marketing activities, and the effect of increased market share on actual and perceived quality.

134) The cost of buying higher market share through acquisition may far exceed its revenue value. Which are the four factors a company should consider before doing so?

The opponents of a market challenger are: (1) the industry leader; (2) firms its own size that are not doing the job and are underfinanced; or (3) small local and regional firms. Page Ref: 306

135) Who are the ideal opponents of a market challenger?

In a pure frontal attack, the attacker matches its opponent's product, advertising, price, and distribution. The principle of force says the side with the greater resources will win. A modified frontal attack, such as cutting price, can work if the market leader doesn't retaliate, and if the competitor convinces the market its product is equal to the leader's.

136) Describe frontal attack as a general market-challenger attack strategy.

Encirclement attempts to capture a wide slice of territory by launching a grand offensive on several fronts. It makes sense when the challenger commands superior resources. In an attack on your archrival, you can launch your product in all the major cites of the globe together and surprise your rival. Student answers may vary.

137) Assume that you are the marketing manager of a firm that manufactures athletic shoes. How will you launch an encirclement attack on your competitor?

The bypass attack is an indirect assault. The marketing manager can diversify into unrelated products like ready-made garments. The manager can also diversify into new geographical markets or adopt new technologies to manufacture its product. Student answers

138) The marketing manager of a firm that manufactures cotton cloth has chosen the bypass attack as a means of responding to an industry leader. How will the manager go about launching this type of attack?

Guerrilla attacks consist of small, intermittent attacks, conventional and unconventional, including selective price cuts, intense promotional blitzes, and occasional legal action, to harass the opponent and eventually secure permanent footholds. A guerrilla campaign can be expensive, although less so than a frontal, encirclement, or flank attack, but it typically must be backed by a stronger attack to beat the opponent.

139) What is a guerilla attack?

B

14) To satisfy customers, a(n) ________ marketer finds a stated need and fills it. A) creative B) responsive C) anticipative D) laidback E) inexperienced

Any aspect of the marketing program can serve as the basis for attack, such as lower-priced or discounted products, new or improved products and services, a wider variety of offerings, and innovative distribution strategies. A challenger's success depends on combining several, more specific, strategies to improve its position over time.

140) How can a firm choose a specific attack?

A counterfeiter duplicates the leader's product and package and sells it on the black market or through disreputable dealers. Music firms, Apple, and Rolex have been plagued by the counterfeiter problem, especially in Asia.

141) Describe a counterfeiter as a market-follower.

The imitator copies some things from the leader but maintains differentiation in terms of packaging, advertising, pricing, or location. The leader does not mind the imitator as long as the imitator does not attack the leader aggressively.

142) If your company, which is a market follower, was labeled as an imitator, what would its primary strategies for meeting competition be?

An alternative to being a follower in a large market is to be a leader in a small market or niche. Smaller firms normally avoid competing with larger firms by targeting small markets of little or no interest to the larger firms. But even large, profitable firms may choose to use niching strategies for some of their business units or companies.

143) Who is a market-nicher?

When the firm assumes the end-user specialist role, it specializes in one type of end-use customer. For example, a value-added reseller (VAR) customizes computer hardware and software for specific customer segments and earns a price premium in the process.

144) The market nicher is a specialist. Characterize the end-user specialist role that can be assumed by the market nicher.

As a product-feature specialist specializes in producing a certain type of product or product feature. Zipcar's car-sharing services target people who live and work in seven major U.S. cities, frequently use public transportation, but still need a car a few times a month.

145) What is a product-feature specialist?

Fads are fashions that come quickly into public view, are adopted with great zeal, peak early, and decline very fast. Their acceptance cycle is short, and they tend to attract only a limited following who are searching for excitement or want to distinguish themselves from others. Fads fail to survive because they don't normally satisfy a strong need. The marketing winners are those who recognize fads early and leverage them into products with staying power.

146) What are fads?

The product life-cycle theory has its share of critics, who claim life-cycle patterns are too variable in shape and duration to be generalized, and that marketers can seldom tell what stage their product is in. A product may appear mature when it has actually reached a plateau prior to another upsurge. Critics also charge that, rather than an inevitable course, the product life-cycle pattern is the self-fulfilling result of marketing strategies, and that skillful marketing can in fact lead to continued growth.

147) What is the criticism of the product life-cycle concept?

FALSE

83) A market-penetration strategy is one where a company searches for new customers in a group that has never used a product before.

FALSE

84) One way to increase the frequency of consumption of a product by consumers is by introducing it in larger package sizes.

FALSE

85) Increasing amount of consumption requires identifying additional opportunities to use the brand in the same basic way.

A

30) When large companies can no longer defend all their territory, they launch a ________ defense where they give up weaker markets and reassign resources to stronger ones. A) contraction B) preemptive C) flank D) mobile E) position

E

31) In 2006, Sara Lee spun off products that accounted for a large percentage of the company's revenues, including its strong Hanes hosiery brand, so it could concentrate on its well-known food brands. In this example, Sara Lee is employing a ________ strategy. A) preemptive defense B) counteroffensive defense C) mobile defense D) flank defense E) contraction defense

C

32) A firm that is willing to maintain its market share, and not attack the leader and other competitors in an aggressive bid for further market share, is known as a ________. A) market challenger B) market leader C) market follower D) market nicher E) market entrant

B

33) For a market challenger, attacking ________ is a high risk but potentially high payoff strategy, which also allows it to distance itself from other challengers. A) a firm of its own size B) the market leader C) a regional firm D) an underfinanced firm E) a poorly performing firm

D

34) In a pure ________ attack, the attacker matches its opponent's product, advertising, price, and distribution. A) guerilla B) bypass C) encirclement D) frontal E) flank

B

35) Epic Inc., a firm that produces chairs for offices, uses comparative advertising to inform the consumers that its products offer the same features and quality as the competitor's. This is an example of a(n) ________ attack. A) guerilla B) frontal C) encirclement D) bypass E) flank

C

36) The ________ can be used when the challenger spots areas where the opponent is underperforming. A) encirclement attack B) frontal attack C) flank-geographic attack D) backwards-flank attack E) guerilla warfare

B

37) Pepsodent launched a new product that could whiten teeth, fight decay, and maintain fresh breath. Observing that Pepsodent did not focus on the dental sensitivity aspect, Colgate introduced a toothpaste which did all of the above and also protected sensitive teeth. This is an example of a(n) ________ attack. A) frontal B) flank C) guerrilla D) encirclement E) bypass

B

38) A(n) ________ is another name for identifying shifts in market segments that are causing gaps to develop, then rushing in to fill the gaps and developing them into strong segments. A) frontal attack strategy B) flanking strategy C) encircling strategy D) counteroffensive strategy E) bypass strategy

D

39) The ________ attack attempts to capture a significant share of the consumer market by launching a grand offensive on several fronts. A) frontal B) bypass C) flank D) encirclement E) guerrilla

A

4) As the marketing manager of a company that manufactures floor tiles, Evans Smith is given a target to achieve 500 new customers by the end of summer. He decides to search the market for probable customers who might use the product but do not at present. Which of the following strategies is Evans pursuing to increase the market demand for his product? A) market-penetration strategy B) new-market segment strategy C) geographical-expansion strategy D) needs-assessment strategy E) consolidation strategy

E

40) Sally Seabrook is an up-and-coming marketing manager for a large department store chain. Ms. Seabrook has distinguished herself with bold strategies such as launching attacks on her primary competitor from several fronts, including advertising, new store openings, and new distributor alliances. Which of the following market challenger attack strategies is Ms. Seabrook using to attack her competition? A) frontal attack B) bypass attack C) guerrilla warfare D) flank attack E) encirclement attack

A

41) The ________ attack offers the firm an opportunity to diversify into unrelated products, into new geographical markets, and leapfrogging into new technologies. A) bypass B) flank C) frontal D) guerrilla E) encirclement

B

42) Appy Juices, a company that manufactures bottled water, diversified into soft drinks before any of its opponents could launch a diversified product. This would be an example of a(n) ________ attack. A) flank B) bypass C) guerrilla D) encirclement E) frontal

C

43) A marketing manager has decided to "leapfrog" competition by moving into cutting-edge technologies. This indirect approach to attacking competition can be characterized as ________. A) flank attack B) encirclement attack C) bypass attack D) guerrilla warfare E) frontal attack

E

44) Selective price cuts, intense promotional blitzes, and occasional legal action are commonplace in the strategic design of a(n) ________. A) frontal attack B) flank attack C) bypass attack D) encirclement attack E) guerilla warfare

B

45) In his article, "Innovative Imitation", Theodore Levitt argues that ________. A) imitation is wrong and should be punished B) product imitation might be as profitable as product innovation C) innovation is not possible without substantial imitation D) innovation cannot begin unless dissatisfaction with imitation occurs E) imitation should be against the law because of the intellectual property decision involved

E

46) As a market follower strategy, the ________ duplicates the leader's product and packages and sells it on the black market or through disreputable dealers. A) innovator B) cloner C) imitator D) adapter E) counterfeiter

C

47) Aron, a company manufacturing snack food and soft drinks, replicates its product taste and packaging from Lay's, a market leader in snack food industry. Later, it sells these imitated products on the black market. This is an example of ________. A) cloning B) imitating C) counterfeiting D) adapting E) innovating

B

48) As a market follower strategy, the ________ emulates the leader's products, name, and packaging, with slight variations. A) counterfeiter B) cloner C) imitator D) adapter E) innovator

D

49) Amani, a company that manufactures cloth for suits, strives to be equal to Armani in product design, brand name, and product packaging. This is an example of ________. A) innovating B) adapting C) imitating D) cloning E) counterfeiting

A

5) When firms look for new users in groups that have never used the product before, the firm is using the ________ strategy. A) new-market segment B) market-penetration C) geographical-expansion D) product development E) diversification

B

50) Tasteeos, Fruit Rings, and Corn Flakes sell for nearly $1 a box less than leading cereal brands. Which market follower strategy is being employed by the cereal manufacturer? A) counterfeiter B) cloner C) imitator D) adapter E) reverse innovator

D

51) The ________ copies some things from the leader but differentiates on packaging, advertising, pricing, or location. A) innovate B) adapt C) cloner D) imitator E) counterfeiter

B

52) As a(n) ________, BurgerJacks, a fast food chain selling low-price burgers, has differentiated on location by setting up base in the Middle East, a market which the current leader of the industry McDonalds has yet not exploited. A) cloner B) imitator C) counterfeiter D) adapter E) innovator

D

53) The TelePizza chain, which operates in Europe and Latin America, has copied Domino's service model but maintains differentiation in terms of location. TelePizza is an example of a(n) ________. A) counterfeiter B) adopter C) cloner D) imitator E) adapter

B

54) As a market follower, the ________ may choose to sell to different markets, but often it grows into a future challenger. A) imitator B) adapter C) cloner D) counterfeiter E) innovator

D

55) Redo is a market follower in the wristwatch industry. After noticing a shortfall in the market leader's product, Redo improves its product to suit consumer needs and becomes a challenger for the market leader. This is an example of ________. A) counterfeiter B) cloner C) imitator D) adapter E) innovator

B

56) An alternative to being a market follower in a large market is to be a leader in a small market. This type of competitor is called a ________. A) marketing king B) market nicher C) segment king D) guerilla marketer E) strategic clone

D

57) A firm that serves small market segments that are not being served by bigger firms is known as a ________. A) market challenger B) market leader C) market follower D) market nicher E) market entrant

A

58) The market leader strategy ensures high sales volume, whereas the market nicher strategy allows firms to achieve ________. A) high margin B) low margin C) high promotability D) medium pricing E) lower demand

C

59) Which of the following is true about market-nichers? A) They are market followers in small markets. B) They tend to have high manufacturing costs. C) Their return on investment exceeds that in larger markets. D) A nicher achieves high volume as against a mass marketer that achieves high margin. E) They usually experience long-term losses.

B

6) When Starbucks introduced its Tazo Tea line to bring in new customers who had never gone to Starbucks because they don't drink coffee, Starbucks was employing a ________ strategy. A) market-penetration B) new-market segment C) geographical-expansion D) niche identification E) blue-ocean

D

60) The key idea in successful nichemanship is specialization. Which of the following specialists would most closely be identified with the characterization of being an organization that limits its selling to one customer? A) end-user specialist B) vertical-level specialist C) customer-size specialist D) specific-customer specialist E) quality-price specialist

D

10) When food product companies advertise recipes that use their branded products in entirely different ways, they are increasing the ________ of the brand. A) amount of consumption B) level of consumption C) dedication to consumption D) frequency of consumption E) awareness consumption

FALSE

100) As a market-follower strategy, a counterfeiter emulates the leader's products, name, and packaging, with slight variations.

C

11) Oliver, a company that produces different types of olive oil, launched a promotional campaign focusing on the alternative uses of olive oil. What strategy is the company implementing to expand its total market demand? A) using the new-market segment strategy to attract new customers B) improving the current level of product performance C) advertising new and different applications of the brand D) protecting its market share E) using the market-penetration strategy to attract new customers

D

12) Clorox runs ads stressing the many benefits of its bleach, such as how it eliminates kitchen odors, in order to generate additional opportunities to use the brand in the same basic way. This is an attempt to ________. A) increase the amount of consumption B) increase the level of consumption C) increase the perception of consumption D) increase the frequency of consumption E) increase the emotional implications of consumption

E

15) A(n) ________ marketer looks ahead to needs customers may have in the near future. A) laidback B) creative C) inexperienced D) responsive E) anticipative

D

16) A(n) ________ marketer discovers solutions customers did not ask for but to which they enthusiastically respond. A) laidback B) responsive C) inexperienced D) creative E) anticipative

A

17) ________ marketers are not just market-driven, they are proactive market-driving firms. A) Creative B) Responsive C) Inexperienced D) Laidback E) Anticipative

B

18) Sony is an unusual market leader. It gives its customers new products that they have never asked for (e.g., Walkmans, VCRs, video cameras, CDs). This makes Sony a(n) ________ firm. A) market-driven B) market-driving C) operations-driven D) vision-driven E) virtually-driven

B

19) Which of the following is true about proactive marketing? A) A company needs creative anticipation to see the writing on the wall. B) Proactive companies create new offers to serve unmet and unknown consumer needs. C) Proactive companies refrain from practicing uncertainty management. D) A company needs responsive anticipation to devise innovative solutions. E) Companies are winners when they are extremely risk-averse.

B

2) When the total market expands, the ________ usually gains the most. A) market challenger B) market leader C) market follower D) market nicher E) market entrant

A

20) ________ defense involves occupying the most desirable market space in the minds of the consumers and making the brand almost impregnable. A) Position B) Flank C) Preemptive D) Mobile E) Contraction

B

21) A marketing manager has planned a strategy that will require the organization to erect outposts to protect its weak front-running brands. In this ________ defense, the outposts will be central to the organization's new competitive strategy. A) position B) flank C) preemptive D) counteroffensive E) mobile

D

22) ________ is an aggressive maneuver where the firm attacks first, perhaps with guerrilla action across the market and keeping everyone off balance. A) Position defense B) Flank defense C) Contraction defense D) Preemptive defense E) Lateral defense

C

23) The defensive marketing strategy wherein a stream of new products are introduced by a firm and are announced in advance are referred to as ________ defense. A) mobile B) counteroffensive C) preemptive D) contraction E) flank

A

24) If Microsoft announces plans for a new-product development, smaller firms may choose to concentrate their development efforts in other directions to avoid head-to-head competition. In this example, Microsoft is employing a ________ strategy. A) preemptive defense B) counteroffensive defense C) mobile defense D) flank defense E) contraction defense

B

25) In a ________ defense strategy, the market leader can meet the attacker frontally and hit its flank, or launch a pincer movement so that it's forced to pull back to defend itself. A) position B) counteroffensive C) preemptive D) contraction E) flank

C

26) After Olay entered and took over the Indian market with its anti-aging lotion, Ponds decided to defend its home turf by investing heavily in a similar product, but that which used only natural ingredients. This is an example of a ________. A) position defense B) flank defense C) counteroffensive defense D) contraction defense E) mobile defense

D

27) In ________, the market leader stretches its domain over new territories that can serve as future centers for defense and offense. A) counteroffensive defense B) flank defense C) contraction defense D) mobile defense E) position defense

E

28) Market broadening and market diversification are likely tactics employed in ________ strategies. A) position defense B) flank defense C) preemptive defense D) counteroffensive defense E) mobile defense

C

29) When "petroleum" companies such as BP sought to recast themselves as "energy" companies, increasing their research into the oil, coal, nuclear, hydroelectric, and chemical industries, these companies were employing a ________ strategy. A) preemptive defense B) counteroffensive defense C) mobile defense D) flank defense E) contraction defense

B

3) When a firm looks for new users in groups that might use the product but do not, the firm is using the ________ strategy. A) new-market segment B) market-penetration C) geographical-expansion D) product development E) diversification

C

61) Newman Inc. is a company that manufactures saddles specifically for horses that race in derbies in the U.S. and the UK. Within this context the firm is exhibiting the role of a ________ specialist. A) vertical-level B) customer-size C) product-line D) job-shop E) service

E

62) A market nicher is considered to be a(n) ________ specialist if the firm specializes in producing a certain type of product or product feature such as, Rent-a-Wreck, that rents only "beat-up" cars. A) end-user B) vertical-level C) customer-size D) channel E) product-feature

B

63) A job-shop specialist ________. A) sells only in a certain locality, region, or area of the world B) customizes its products for individual customers C) operates at the low- or high-quality ends of the market D) offers one or more services not available from other firms E) specializes in serving only one channel of distribution

D

64) A firm that is based in France designs jewelry and takes custom orders from around the world. They do not design more than 15 pieces of jewelry in a year and ensure that each design uses unique stones and is different from the other. Such nichemanship is an example of ________ specialist role. A) customer-size B) product C) product-feature D) job-shop E) quality-price

E

65) When a bank takes loan requests over the phone and hand-delivers the money to the customer, it becomes a ________ specialist. A) geographic B) job-shop C) quality-price D) channel E) service

D

66) ________ is the period of slow sales growth and nonexistent profits. A) Growth B) Decline C) Maturity D) Introduction E) Stagnancy

B

67) Campbell Soups is a newly established company that specializes in preparing healthy but tasty food for children under the age of 5. It is incurring huge productions costs, nonexistent profits, and slow sales growth. The company is in the ________ phase of its life cycle. A) stagnancy B) introduction C) maturity D) decline E) growth

E

68) ________ is a period of rapid market acceptance and substantial profit improvement. A) Stagnancy B) Introduction C) Maturity D) Decline E) Growth

C

69) A dance school in the Bronx teaches professional hip-hop and salsa. It is experiencing an increase in student admissions, which is leading to substantial improvement in profits. The school is going through the ________ phase of its life cycle. A) decline B) stagnancy C) growth D) introduction E) maturity

C

7) Trendz Inc. is a leading brand of fashion clothing and accessories based in Houston. After gaining a strong foothold in the U.S., the company wants to foray into foreign markets. The management at Trends knows that people residing in other countries are likely to have different tastes and preferences, so they may have to redesign some of their offerings. Which of the following strategies is Trendz using? A) market-penetration strategy B) outsourcing strategy C) geographic-expansion strategy D) product differentiation strategy E) ethnocentric strategy

E

70) ________ is a slowdown in sales growth because the product has achieved acceptance by most potential buyers. A) Obsolescence B) Introduction C) Growth D) Decline E) Maturity

D

71) A music school in Boyles Height, LA, specializes in teaching the guitar and the violin. After a spurt in growth and a few successful years, the school is experiencing a slowdown in sales and stability in its profits due to an increase in competition. The school is in the ________ stage of its life cycle. A) introduction B) growth C) decline D) maturity E) obsolescence

C

72) During the ________ stage of a product's life cycle, sales show a downward drift and profits erode. A) introduction B) growth C) decline D) obsolescence E) maturity

E

73) After a couple of years of successful business, an experimental theatre company based in Aurora is unable to sell tickets for its theatre shows. They have been using profits from previous shows to run the business. The company is in the ________ phase of its life cycle. A) maturity B) obsolescence C) introduction D) growth E) decline

D

74) According to Peter Golder and Gerald Tellis, a(n) ________ is the first to develop a working model of the product. A) developer B) creative pioneer C) market pioneer D) product pioneer E) inventor

A

75) One of the ways to change the course of a brand is to modify the product. Under product modification, ________ adds size, weight, materials, supplements, and accessories that expand the product's performance, versatility, safety, or convenience. A) feature improvement B) quality improvement C) style improvement D) size improvement E) technological improvement

E

76) An alternate way to increase sales volume is to expand the number of users. This can be done by ________. A) having consumers use the product on more occasions B) having consumers use more of the product on each occasion C) having consumers use the product in new ways D) remaining in the current market segment E) attracting competitors' customers

C

77) An alternate way to increase sales volume is to increase the usage rate among users. This can be done by ________. A) converting nonusers B) having consumers use less of the product on each occasion C) having consumers use the product on more occasions D) attracting competitors' customers E) entering new market segments

D

78) ________ is a distribution strategy that can be effectively used during the growth stage of the product life cycle. A) Building product awareness B) Phasing out unprofitable outlets C) Building selective distribution D) Building intensive distribution E) Stressing on brand differences

D

79) Which of the following strategies should be adopted by marketers during a recession? A) increase investment on marketing existing products B) focus on expanding the customer base and not on the retention of existing customers C) focus primarily on price reductions and discounts D) concentrate on communicating the brand value and product quality to consumers E) stick to the budget allocations adopted during the preceding years

C

8) A market leader on the look out for more usage from existing customers should focus on increasing the frequency of consumption and ________. A) decreasing the product price B) the product line C) the amount of consumption D) decreasing production turnover time E) diversifying into unrelated markets

D

80) Benz & Frendz Corp., a manufacturer of high end consumer durables, experienced a sluggish sales growth in most of its product categories during three consecutive quarters of 2009. However, market analysis revealed that its competitors' sales had also slackened during this period. Analysts pointed out that when all firms are losing sales, it is extremely important to adopt strategies that are aimed at retaining customers. This led the firm to reduce operation costs while maintaining product quality. They also revamped their marketing strategy to focus on the values created by their products. Which of the following can be inferred from the strategies adopted by the firm? A) The company was trying to protect its market share and continue to operate as a market leader. B) The company was focusing on geographical expansion. C) The company was aiming to capture a new market segment. D) The company was marketing its products amidst an economic downturn. E) The company was focusing on market penetration.

TRUE

81) When the total market expands, the dominant firm usually gains the most.

TRUE

82) The market leader should look for new customers or more usage from existing customers.

TRUE

86) A marketing program can communicate the appropriateness and advantages of using the brand.

TRUE

87) The most constructive response to protecting market share is continuous innovation.

FALSE

88) A responsive marketer looks ahead to needs customers may have in the near future.

FALSE

89) An anticipative marketer finds a stated need and fills it.

E

9) Which of the following marketing strategies requires either identifying additional opportunities to use the brand in the same basic way or identifying completely new and different ways to use the brand? A) increasing the amount of consumption B) decreasing the level of consumption C) increasing dedication to consumption D) increasing product innovation E) increasing frequency of consumption

TRUE

90) A creative marketer discovers solutions customers did not ask for but to which they enthusiastically respond.

TRUE

91) Position defense means occupying the most desirable market space in consumers' minds, making the brand almost impregnable.

TRUE

92) In counteroffensive marketing, the market leader can meet the attacker frontally and hit its flank, or launch a pincer movement so that it is forced to pull back to defend itself.

FALSE

93) In contraction defense, the leader stretches its domain over new territories through market broadening and market diversification.

TRUE

94) Market diversification shifts the company's focus to unrelated industries.

TRUE

95) Market challengers are companies that attack the leader and other competitors in an aggressive bid for further market share.

TRUE

96) Attacking the market leader proves successful and beneficial only when the leader is not serving the market well.

FALSE

97) A frontal attacking strategy is another name for identifying shifts that are causing gaps to develop, then rushing to fill the gaps.

TRUE

98) Encirclement attempts to capture a wide slice of territory by launching a grand offensive on several fronts.

TRUE

99) Guerrilla attacks consist of small, intermittent attacks, conventional and unconventional, including selective price cuts, intense promotional blitzes, and occasional legal action.