Marketing Strategy Exam 2

Four conditions under which organizations expanded globally and survived are: a repeatable formula for expansion, customer differentiation that travels, _____________, and _____________.

A strong core and industry economics

The six quality dimensions include: performance, conformance to specifications, features, customer support, process quality, and _________.

Aesthetic design

Successful early market leaders survive the difficulties of a first mover advantage by envisioning the mass market, maintaining managerial persistence, financial commitment, _____________ and _____________.

Answer: Relentless innovation and asset leverage

Brand extension evaluation asks three questions according to the book. Which of the following is not a brand extension question among the three? a. Will the brand extension be profitable? b. Will the extension enhance the brand name and image? c. Does the brand fit the new context? d. Does the brand add value to the offering in the new product class?

Answer: a. Will the brand extension be profitable?

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

Which of the following is not a competitive advantage included in brand loyalty: a. Reducing marketing costs b. Entry to barrier c. Increased name recall at time of purchase d. Satisfied customer base projects successful product e. Provides time to respond to competitive moves

Answer: c. Increased name recall at time of purchase. This characteristic is competitive advantage of brand awareness, not brand loyalty.

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.

False

Brand identity is a set of current brand associations that the firm aspires to create or maintain.

False. A brand identity is an aspirational external brand image, which may not include elements that are currently present in the image. Brand image is the current image.

A branded energizer is defined in the book as a branded product or sponsorship that by association significantly enhances and energizes a target brand.

False. A branded energizer is a branded product, sponsorship, endorser, promotion, symbol, social program, CEO, or other entity that by association significantly enhances and energizes a target brand. The branded energizer and its association with the target brand are actively managed over an extended time period.

A global strategy is a multinational strategy in which separate strategies are developed for different countries.

False. A global strategy is conceived and implemented in a worldwide setting

Brand awareness does not provide competitive advantages, only key success factors.

False. Brand Awareness does provide SCA's: signal of presence, commitment and substance, brand provides consumer with a sense of familiarity and salience that will determine consumer's recollection at time of purchase

Brand association is anything directly related to the consumer's memory to a brand.

False. Brand association is anything directly and indirectly related to the consumer's memory to a brand.

Branded energizers are defined to be part of the master brand offering, but do not promise any functional benefits.

False. Branded energizers are not part of the master brand offering and are connected to the master brand, but do not promise any functional benefits

Budget Rent-A-Car experienced a surge of growth by entering the rental truck and travel arena.

False. Budget Rent-A-Car attempted a host of strategies without success to improve on their also-ran status, including efforts to enter the travel arena and the truck rental business

CSR refers to customer social relationship management.

False. CSR refers to Corporate Social Responsibility

One of the creative thinking methods suggested in the chapter is to get a lot of options on the table

False. Creative Thinking is located on pages 187-188.

A branded energizer should add energy, personality, and credibility to the master brand.

False. Credibility is not added, but associations are the third added characteristic

Firms that chose customer relationship as a value proposition just need to provide good functional benefits of their product or service.

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

False. In one survey more than 90% thought that socially responsible management creates shareholder value.

A branded differentiator is an actively managed branded feature, ingredient or technology, service or program that creates a meaningful, impactful sustainable competitive advantage for a branded offering over an extended period of time.

False. It creates a meaningful, impactful point of differentiation. The brand equity around the point of differentiation creates a basis for an SCA, but is not the definition of the differentiator.

According to the book, market development is based on the premise that the right people are available for implementing the leveraged business.

False. Market development is based on the premise that the business is operating successfully; there is no point in exporting failure or mediocrity

Philip Morris was successful with 7-Up because of its distribution clout

False. Morris failed with 7-Up for several reasons

Most quality dimensions, such as performance, durability, reliability, and serviceability, are easy for buyers to evaluate.

False. Most quality dimensions, such as performance, durability reliability, and serviceability, are difficult if not impossible for buyers to evaluate.

Schlitz improved its market position with its aggressive low-cost strategy.

False. Schlitz's decision to reduce costs led to a loss of perceived quality that was disastrous.

The experience curve is automatic and occurs over time

False. The experience curve is not automatic. It must be proactively managed

According to the book, celebrity endorsers should have five qualities—an appealing image, on-brand associations, the potential for a long-term relationship, a large following, and the absence of a negative reputation.

False. The first three are correct—the last two are potential to create programs around the endorser and being cost effective and available.

An organization should enter countries in a sequential order.

False. The strategy to enter countries sequentially should be based on the strategic preferences of the organization. There are compelling factors to enter countries simultaneously as well.

Three steps to determine which assets and competencies should be leveraged were suggested. The first was to inventory assets and competencies, the second was to find an area where the assets and competencies can be applied to generate advantage and the third was to analyze the potential synergy.

False. The third advantage is incorrect in the statement above. The correct answer is address implementation problems.

The three types of brand assets are brand awareness, brand equity and brand loyalty.

False. The three types of brand assets are brand awareness, brand associations and brand loyalty

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.

False. These companies are making this move because a systems-based organization will be more likely to control the customer relationship.

Proof points are programs, initiatives, and assets that are planned to provide substance to the strategic position.

False. This statement is true we must add that proof points help communicate the strategic position.

True market pioneers often survive because they enter the market first and build position and are able to withstand technological advances.

False. True market pioneers CAN survive because they enter the market first and build position BUT frequently aren't able to withstand technological advances.

Value should be determined by the firm and not by the customer.

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.

Wal-Mart's success in Germany shows the power of exporting a successful business model.

False. Wal-Mart failed in Germany because of an unsuccessful business model

Four questions were suggested in the book as being a good source of growth options. One was asking whether brand extensions are possible. Another was whether new distribution channels are available.

False. Which assets and competencies can be leveraged? What brand extensions are possible? Can the scope of the offering be expanded? Do viable new markets exist?

When there is a real potential synergy, it will happen—otherwise it will simply be a hope

False—implementation problems get in the way

Low-end disruptive innovation is where industries are altered by emerging products that feature a price that appears dramatically low. Incumbent firms often employ this strategy

False—it is usually newcomers to the market, not incumbent firms

The book indicated that the Ford Explorer Eddie Bauer Edition has sold 100,000 vehicles since it was first introduced.

False—the correct number is one million.

Innovation can create what is often termed as __________.

First mover advantage

The three steps of creating a brand identity are _____________, _____________, and _____________.

Identifying characteristics that brand should stand for, defining the core identity and communicate the brand internally (the core essence.)

The four ways to grow a business are to go global, to energize the business, and to __________ and ____________.

Leverage the business and create a new business

Many blue ocean businesses can take one of two approaches to lower price points: ____________ or ____________.

Low-end disruptive innovation and focus on non-consumers (new-market disruptive innovation).

The eight motivations for global strategies are: to cross-subsidize, to dodge trade barriers, to access low cost labor/materials, to create global associations, to obtain global innovation, _________, __________, and ___________.

Obtain scale economies, access strategic markets, and access national incentives.

___________ is a situation in which the strategic and tactical management of the brand is excessively focused on product attributes and functional benefits.

Product-attribute fixation trap

To manage customer loyalty, organizations will measure loyalty of existing customers, manage customer touch points, conduct exit interviews, maintain communication with customers, have a customer culture, measure the lifetime value of a customer, _______________ and _______________.

Reward loyal customers and make customers feel a part of the organization

The extremes on the relevance spectrum are ____________ and ____________. The middle of the spectrum belongs to ____________.

Trend neglectors and trend drivers; trend followers

With the experience curve, the total cost of a product will decline at a predictable rate as experience in building the product accumulates.

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

Barriers to long term success in existing product-markets do not include which of the following: a. Markets are so dynamic that this is easy to bet behind and become less relevant. b. Overcapacity in existing markets. c. Transparency issues. d. Fast responses by competitors e. Low cost benefit ratio for incumbent organizations

answer: e. Low cost benefit ratio for incumbent organizations

A branded differentiator should add differentiation, communication benefits and _____________ to the master brand.

credibility

All of the following are examples of ways to stimulate basic business except: a. Expand buyer base b. Expand the loyal customer base c. Improve customer experience d. Eliminate inefficiencies e. Develop home-run marketing programs

d. Eliminating inefficiencies is a method to improve organizational performance, but is not considered a way to "energize business."

Accessing low-cost labor and materials is not a motivation for global strategies

false

According to Zook around one-third of successful sustainable growth companies had one or two repeatable formulas.

false

Blue ocean businesses and red ocean businesses both generally allow for above average earnings.

false

Drucker advises innovators to try to innovate for the future

false

One-stop financial services was a winning strategy in the 1980s

false

Standardizing brand strategy leads to global market leadership.

false

Successful early market leaders tend to get traction in a smaller market before looking to the mass market.

false

The Ford Galaxy was a good example of the advantage of a common strategy across Europe.

false

The book suggests that one of six ways that new business is typically formed involves new distribution channels.

false

The highest rated brand on perceived innovativeness was iPod.

false. It was Bluetooth

Niche specialists are successful because their strategies are based on commitment to a single product line or part of the market.

true

One of the benefits of a strategic alliance is that it can help a firm overcome trade barriers. Another is that it can compensate for the absence of or weakness in any of the needed key success factors for a market.

true

Organizations can increase their likelihood of brand awareness by extending their presence outside the conventional media channels and using methods such as promotions, publicity and sampling

true

Perceived value can be created without compromising the brand

true

Strong motivations for a standardized global brand and position are media spillover and cross-country customer travel.

true

Sub brands and endorsed brands are created when the parent company wants to prevent existing brands from damage and when an entirely new brand is not feasible based on lack of resources

true

The Datsun name was just as strong as the Nissan name four years after the name change primarily because brand awareness is an asset that can be extremely durable and thus sustainable

true

The key to success of strategic alliances is to maintain strategic value for each of the participants

true

The strongest brands often offer emotional benefits. They are about the "I feel" statement. Other strong brand benefit offerings are a self-expressive benefits, which are all about the "I am."

true

The sweet-spot program should have an immediate impact by stimulating customer involvement and purchases, thus affecting the short-term financials.

true

The ultimate measure of brand loyalty is that customers will recommend the brand to others.

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.

true

Transformational new business arenas can be based on offering a dramatically lower price point, analyzing alternative industries to find white space, offering a systems rather than components,

true

Virgin has extended its brand into dozens of business areas including cola and jeans.

true

Innovator's advantage provides the competitive advantages such as competitors' inability to respond in a timely manner, competitors' inability to respond at all, or that the innovator cultivates a customer loyalty with its position in the market.

true

Kirin was unable to compete with Asahi in part because of the authentic label

true

Maintaining relevance is the battle to stay associated with the product category in which the customer is interested.

true

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 ________.

sustainable, and feasible.

A brand touchpoint occurs any time a person in the marketplace interacts with the brand.

true

A business can be energized by getting the brand to have a retail presence

true

A frequently unforeseen consequence of global expansion is that healthy markets, especially the home market, are put at risk by the diversion of resources.

true

A signal of high quality for clothing is price

true

A strategic alliance is a collaboration leveraging the strengths of two or more organizations to achieve strategic goals.

true

A strategic imperative is an investment in an asset or program that is essential if the promise to the customers is to be delivered.

true

A successful low cost strategy is usually multifaceted and supported by a cost-oriented culture.

true

A sweet spot should be a part of, if not central to a customer's self-identity and lifestyle or reflect a higher-order purpose in their lives

true

A value proposition is often an umbrella concept under which the supporting assets and competences and functional strategies and programs can be grouped.

true

According to the book methods for increasing product usage include motivating heavy users to use more, making the use easier, providing incentives, remove or reduce reasons not to buy, provide reminder communications, reduce undesirable consequences of frequent use, and finding new uses.

true

Among the eight motivations for global strategies is to cross-subsidize businesses and to obtain scale economies.

true

An experience curve strategy will usually enhance product innovation

true

Brand awareness serves to differentiate brands along a recall/familiarity dimension

true

Brand identity serves to drive and guide strategic initiatives throughout organizations, drive the communication program and support the expression of the organization's values and culture.

true

Business strategies should offer a clear value proposition to customers and be supported by assets and competencies and functional strategies and programs

true

Cash cows are units that should no longer absorb investments aimed at growing the business

true

Curses that plague new businesses include success and substantial availability of resources

true

Differentiation is increasingly difficult to create and maintain as competitors proliferate products and quickly copy advances.

true

Entering into new markets or launching new products are met with the challenges of resistance to new products, lack firm's assets and competencies in the new product's market and organizational access to resources necessary for launches.

true

Existing product markets are often attractive growth avenues because a firm has a base on which to build and momentum that can be exploited

true

Firms dependent on brand association position based on certain attributes are vulnerable to competitor innovation and shouting matches that lead to lost credibility.

true

In leveraging an existing brand to move into a new market, the new brand may seek distance and autonomy from the existing brand. However with that distance, the risk of the venture increases

true