Marketing Strategy & Planning Exam 2 PREP

_____ entails designing product offerings and marketing programs that can establish an enduring competitive advantage in the target market by creating a unique brand image, or position, in the customer's mind.

Brand Positioning

_____ is the process by which a market is divided into distinct subsets of customers with similar needs and characteristics that lead them to respond in similar ways to a particular product offering and marketing program.

Market Segmentation

Based on the market attractiveness/competitive position matrix, which of the following strategies should a firm consider when the market attractiveness is high and the competitive position is strong?

It should invest more to grow at a maximum rate and concentrate on maintaining strengths.

A(n) _____ consumer shops for products that demonstrate the consumer's success.

status-oriented

_____ is the degree to which buying activity is centralized and influences a buyer to consider all transactions with a given supplier on a global basis, to emphasize cost savings, and to minimize risk.

Purchasing structure

A(n) _____ refers to a recurring buying situation handled on a routine basis.

straight rebuy

Which of the following buying situations occurs when some element, such as price or delivery schedules, has changed in a client-supplier relationship?

A modified rebuy

What is the first step in constructing a market attractiveness/competitive position matrix for evaluating potential target markets?

Selecting market attractiveness and competitive position factors

Based on the market attractiveness/competitive position matrix, which of the following strategies should a firm consider when the market attractiveness is moderate and the competitive position is weak?

It should expand without high risk or minimize investment and focus on operations.

Based on the market attractiveness/competitive position matrix, which of the following strategies should a firm consider when the market attractiveness is low and the competitive position is strong?

It should protect current strengths of the firm and seek ways to increase current earnings without speeding market's decline.

Which of the following is a characteristic of physical positioning?

Large number of dimensions

Which of the following is a difference between physical and perceptual positioning?

Perceptual positioning has a consumer orientation while physical positioning has a technical orientation.

Marketing decision makers, while seeking to win a particular position in a customer's mind, endow their product with various kinds of attributes. The speed of a computer system, the roominess of a car, and a product or service being user-friendly are examples of which type of categorization based on such attributes?

Complex physically based attributes

Volvo's emphasis on safety, Toyota's emphasis on reliability, and Norelco's promising a "close and comfortable shave" highlights which determinant attribute?

Benefits

Which of the following positioning bases is illustrated by a clothing manufacturer's claim of their shirts being made from pure organic cotton?

Ingredients

Which of the following is an example of using product features as a determinant attribute in positioning?

"This is the quietest dishwasher made in America."

Rex and Tens, a food manufacturing company, has the following tagline in its ad for a new health drink—Speedheal "Find out why thousands of nutritionists across America are recommending Speedheal to their clients."—Which positioning base is used in this Speedheal ad?

Endorsements

A bank positions itself using its deposit safety as an attribute. Why would this positioning not create an impact in the consumer's mind?

Because most consumers perceive all banks to be about equally safe

Two stores occupy positions comparable to one another on the positioning grid. This indicates that:

Consumers consider them to be relatively alike.

_____ is the term marketers use to refer to the value created by establishing customer preference for one's brand.

Brand equity

Sony was the pioneer and early share leader in the videocassette recorder industry with its Betamax technology. But Matsushita's longer-playing and lower-priced VHS format equipment proved much more popular with consumers, and dethroned Sony as industry leader. This example underlines that:

Firms cannot always rely on their competencies to maintain share leadership in a market.

Identify a market leader's action aimed at stimulating selective demand among later adopters.

Differentiated positioning against competitive offerings

The marketing action of developing a second product line with features that are more appealing to a specific segment of potential customers is characteristic of the _____ strategy.

Flanker

Which of the following is characteristic of a market expansion strategy?

Develop multiple-line extensions or brand offerings targeted to the needs of various potential user applications or geographical segments within the market.

Which of the following statements is associated with the fortress strategy?

The market leader develops a strong position when potential customers have relatively homogeneous needs.

Which of the following objectives can be achieved with a confrontation strategy for share maintenance?

Improve ability to win new customers who might otherwise be attracted to competitor's offering.

What action must a leader take to improve customer satisfaction as competitor enters or prepares to enter the market?

It should take steps to improve the physical product and customers' perceptions of it as well.

Which of the following share-growth strategies involves attacking the leader within its primary target market?

Frontal attack strategy

Which of the following is an appropriate share-growth strategy in a relatively homogeneous market with respect to customers' needs and purchase criteria?

Frontal attack

Sales promotion efforts (like coupon drops and merchandising deals), local advertising blitzes, and legal action are examples of the _____ strategy to achieve share growth.

guerilla attack

The transition from market growth to maturity typically begins:

When the market is still growing but the rate of growth starts to decline.

Goliath Corp. made overly optimistic forecasts of future sales volume. As a result, the firm expanded too rapidly, and production capacity overshot the demand as growth slowed. The excess, in turn, lead to an increase in price per unit. Which of the following strategic traps did Goliath Corp. fall into during the shakeout period?

Failure to anticipate transition from growth to maturity

"A business may survive and prosper during the growth stage even though it has neither differentiated its offering from competitors nor attained the lowest-cost position in its industry. But during the transition period, such is not the case." Which of the following strategic traps leads to such a state?

Getting caught in the transition period without a clear strategic advantage

The _____ quality dimension refers to the consistency of performance from purchase to purchase or to a product's uptime, the percentage of time that it can perform satisfactorily over its life.

reliability

In some labor-intensive industries, a business can achieve a cost advantage, at least in the short term, by gaining access to inexpensive labor. This is an example of the _____ method used to obtain a sustainable cost advantage.

innovative production processes

To develop differentiated positioning focused on untapped segments using a market expansion strategy, a firm should:

Develop a differentiated flanker brand with more appealing unique features.

Which of the following is a possible marketing action that can encourage extended use of products?

Developing line extensions suitable for additional uses or applications

_____ refers to the ease with which weaker competitors can leave the market.

Exit barriers

The objective of a _____ strategy is to generate cash quickly by maximizing cash flow over a relatively short term.

harvesting

Which of the following will be the primary objective of a firm, in a declining market, which has a sustainable competitive advantage in target segments but limited overall resources?

To focus on strengthening position in one or a few relatively substantial segments with potential for future profits

In which of the following stages of the product life cycle do sales increase at a progressively faster rate as more people learn about the product and it becomes readily available?

Growth stage

_____ is designed to obtain as much margin per unit as possible and also enables the company to recover its new product investments more quickly.

Skimming

Which of the following is true of the introductory stage in a product life cycle?

Skimming is one of the pricing strategies applied at this stage.

Which of the following pricing strategies is appropriate during the maturity stage of the product life cycle?

Hold or reduce selectively

Identify the appropriate response by a firm when its product line is in the mature life cycle stage.

Hold length of line

The shakeout stage in a product life cycle is signaled by:

a drop in the overall growth rate and substantial price cuts.

New-to-the-world products can be defined as:

true innovations that are new to the firm and create an entirely new market.

Which of the following refers to products that supplement a firm's established product line?

Additions to existing product lines

Which of the following observations best describes new-to-the-world products?

They try to build primary demand by creating product awareness.

Which of the following is an appropriate strategic objective for repositioning's?

Provide a cash generator

Defending a current market-share position is an appropriate strategic objective for:

improvements or revisions to existing products.

The pioneer's brand can become the standard of reference customers use to evaluate other brands, making it more difficult for followers to convince existing customers that their new brands are superior to the older and more familiar pioneer. Which advantage of being a pioneer does this explain?

First choice of market segments and positions

Which of the following advantages of pioneers is particularly pronounced when the product is technically sophisticated and involves high development costs?

Economies of scale and experience

Pioneers that are able to maintain their preeminent position well into the market's growth stage have supported their early status with one or more marketing strategy elements. Identify the strategy that allows firms to expand their volumes quickly and achieve the benefits of experience-curve effects before major competitors can confront them.

Large entry scale

Which of the following elements belongs to the successful late entrants' market strategy?

Focusing on peripheral target markets or niches

Identify the firm characteristic of a new product pioneer pursuing the mass-market penetration strategy.

It should have the ability to shift from stimulation of primary demand to stimulation of selective demand.

Which of the following is a primary objective of mass-market penetration strategies?

Maximize number of triers and adopters in total market.

Which of the following marketing programs is used by pioneers as a niche penetration strategy to increase the customers' ability to buy?

Starting with high price but bringing out lower-priced versions in anticipation of competitive entries

_____ is the simplest way to enter a foreign market because it involves the least commitment and risk.

Exporting

_____ grants the right to use the company's name, trademarks, and technology.

Franchising

_____ involves a company providing technical know-how and components in return for a share of the output that it must sell.

Coproduction

What does the STP framework stand for in marketing?

Segmentation, Targeting, and Positioning.

What are the four stages of the product life cycle (PLC)?

Introduction, Growth, Maturity, and Decline.

What are the four typical growth strategies according to the Ansoff matrix?

Market penetration, market development, product development, and diversification.

How do monopolies and oligopolies differ?

Monopolies have one firm; oligopolies have a few firms controlling the market.

What are common barriers to entry in an industry?

Economies of scale, patents, government regulations, brand loyalty, and high capital costs.

What is the diffusion of innovation?

The process by which new products or ideas spread through a market over time.

Name four major strategic frameworks used in marketing business analysis.

Porter's Five Forces, BCG matrix, SWOT analysis, and Ansoff matrix.

How does the BCG matrix classify products or business units?

Into Stars, Cash Cows, Question Marks, and Dogs.

What are Porter's Five Forces?

Threat of new entrants, buyer/supplier bargaining power, threat of substitutes, and industry rivalry.

What is product differentiation?

Highlighting unique features, quality, or branding to make a product stand out from competitors.

How does brand positioning influence consumer perception?

It defines how a brand is perceived relative to competitors, emphasizing unique attributes to create a distinct image.

What distinguishes pioneers from followers in market entry?

Pioneers are first movers establishing markets; followers learn from pioneers' mistakes and often enter later with improvements.

Name common market entry mechanisms.

Exporting, licensing, franchising, joint ventures, and wholly owned subsidiaries.

What are key considerations for international market entry?

Cultural differences, legal environment, economic stability, and competitive landscape.

Why are barriers to entry important?

They protect existing firms from new competitors, enabling higher prices and profits.

How does diffusion of innovation influence forecasting?

It helps predict adoption rates over time, guiding product launch and marketing strategies.

What is market development?

Expanding existing products into new markets or segments to grow sales.

How does brand differentiation create competitive advantage?

It emphasizes unique features or benefits, fostering customer loyalty and reducing price competition.

Why is international market consideration crucial?

It requires adapting to local culture, regulations, and consumer preferences, affecting entry mode and marketing mix.

How does the product life cycle guide marketing?

It suggests strategies for each stage—like growth tactics during expansion and harvesting or divestment at decline.

What is the main difference between pioneer and follower strategies?

Pioneers innovate and set market rules; followers learn from pioneers' mistakes and often enter through cost advantages or niche markets.

How does forecasting support strategic decision-making?

It estimates future market demand, sales, and trends, enabling better resource allocation and planning.