Marketing 490

Corporate strategy
Which level of strategy provides direction on the company’s mission, the kinds of businesses it should be in, and its growth policies?
Goals and objectives of an organization
What component of strategy involves detailing the desired levels of accomplishment on one or more performance dimensions over specified time periods for the organization as a whole?
What distinctive competencies can give the business unit a competitive advantage?
What question needs to be specifically addressed while developing a business strategy?
Effective allocation and coordination of resources to meet organizational objectives within a specific product-market
What is primary focus of marketing strategy?
Rapid growth in demand for the new product
Why are early entrants into newly emerging industries, particularly industries based on new technologies, especially likely to be internally focused and not very market-oriented?
Strategic inertia
The tendency for firms to automatically continue strategies that were successful in the past, even though current market conditions are changing, is referred to as
Primary focus on functional performance and cost
Which of the following approaches characterize a production-oriented organization?
Was prone to strategic inertia
Matrix Computer Inc.’s focus on large organizational customers caused the company to devote too little effort to the fast growing segment of small technology start-ups. This example illustrates that the firm
The increased importance of service
Dell attempted to maintain its long-standing low-cost position by reducing the number of technicians in its customer call centers. As a result, increasing number of customers spent 30 minutes or more on hold before they found a technician to solve their problem. This affected Dell’s customer satisfaction rating in the United States and its sales and profit growth stagnated. This scenario highlights
Market segment
A distinct subset of people with similar needs, circumstances, and characteristics that lead them to respond in a similar way to a particular product or service offering is known as a
Written marketing plan
Which of the following is considered an important tool for communicating and coordinating expectations and responsibilities throughout the firm?
Pricing is based on perceived benefits the product provides
Which of the following statements is consistent with the marketing orientation?
Basic customer needs tend to change over time, but products endure
What is not true of the criteria for defining a corporate mission?
Functional and specific
The most useful mission statements focus on being
Specific, Measurable, Attainable, Relevant, and Time-bound
What is the expansion for the acronym SMART used in specifying corporate objectives?
Return on net assets
The profitability criterion is measured in terms of which of the following indexes?
Economic value added
In expressing corporate objectives aimed at enhancing shareholder value, a firm combining its debt and market value of its stock, and then subtracting the capital invested in the company, is using the _____ approach
Customer satisfaction is influenced by factors other than the product itself
A survey on customer feedback for an auto dealer company found that about 75 percent of customers’ satisfaction scores were accounted for order processing, delivery, and post-sale services. This finding substantiates which of the following statements?
Market penetration
A company trying to increase its market share for its current products is most likely to follow which of the following strategies?
Increasing market penetration of current product
Amazon.com pursued a combination of actions such as making service improvements, cutting costs as well as forming alliances with Web portals to expand its share of Web shoppers, even though the expense of such activities postponed the firm’s ability to become profitable. This is an example of expansion by
Product development strategy
Stepan Co. successfully introduced detergents for washing clothes, dishes, and carpets. Each detergent capitalized on the image of baking soda as an effective deodorizer and on the high level of recognition of the Stepan Co. brand. This example illustrates the use of a
Expansion by selling existing products to new segments
Theaters, orchestras, and other performing arts organizations often reach audiences outside major metropolitan areas by promoting matinee performances with lower prices and free public transportation to attract senior citizens and students. Identify the strategy being employed in this case
Forward vertical integration
A manufacturer is moving downstream in terms of product flow by launching a chain of retail outlets. Which diversification strategy is being used by the company?
Unrelated diversification
Faced with a decline in its current business, a generic drug manufacturer is planning a foray into design, and manufacture of re-locatable modular structures. Which diversification strategy is being employed by the company?
Outcomes of this analysis are highly sensitive to variations in how growth and share are measured
Which of the following is a limitation of the growth-share matrix?
Businesses with a high relative share of low-growth markets
Cash cows are
Calculating the lifetime values of each of its customers
Which of the following is part of using customer equity to estimate the value of alternative marketing actions?
Competitive strength
The following performance measures: market share, brand awareness and brand preference are all measures of which of the following performance criteria.
Penetrated market
What term is used to refer to the size of current users who are already using a particular product at the time of forecast?
A central person or persons take the responsibility to prepare an overall forecast
Which of the following statements is true of the top-down approach in sales forecasting?
There is no history in their venture on which to base a statistical forecast
Statistical methods are not recommended for new product managers charged with forecasting sales for a new product because
Statistical method
Company A is a tire manufacturer and uses factors like the number and age of vehicles currently on the road in the country, predictions of GDP for the region, and other relevant factors to forecast market potential. Which of the following methods is the method Company A uses for a more accurate forecast?
New-to-the-world products
For which category of new products is the observational method of preparing an evidence-based forecast not possible?
Survey
Honeydew, a well-known confectionery, plans to introduce a walnut fudge candy. It asks some of its regular customers to sample it and provide their opinion. In this way, the management hopes to estimate the likely number of buyers for the product, if introduced in their store. Honeydew used the _____ method of forecasting.
Differences exist between what people imagine about a product in a test market and what is actually delivered
Which of the following is not a valid reason for the decline in the use of live test markets?
Marketers to estimate how rapidly an innovation is likely to be adopted by the target market
Diffusion of innovation theory allows
Extent to which its trial can be accomplished on a large-scale basis
The speed of the adoption process is based upon the all of the following except
Laggards
Arguably, in terms of value, the least important group in the diffusion of innovations curve is:
Internal records systems
Brendin Co. is a retail chain specializing in business and casual wear for working women. Each week, all Brendin retail outlets receive sales information about their garments in terms of style and color; merchandise category (e.g., dress or casual); store, area, or region; and for various time periods. This is an example of the use of
Marketing databases
Company A uses loyalty cards to track and analyze customer buying patterns and to offer customers coupons and incentives tailored to their buying behavior. Which of the market knowledge systems does the company use?
“Cookies” or electronic signatures placed at a customer’s personal computer
What system of information collection best illustrates a marketing database?
It allows the effective capture of customer intelligence from salespeople and account transfers
Which of the following statements about competitive intelligence systems is incorrect?
Disseminate real-time product information to salespeople to satisfy customer needs
Salesforce automation software helps companies to
Marketing research
The design, collection, analysis, and reporting of research intended to gather data pertinent to a particular marketing challenge or situation is referred to as
Determining data sources and types of data and research approaches required
“Primary data collected when cheaper and faster secondary data will do. Quantitative data collected without first collecting qualitative data.” These are examples of things that could go wrong in which step of the marketing research process?
The nature of the products purchased
In forecasting the Customer Lifetime Value of a customer which of the following is least important:
Market segmentation
Identify the process by which a market is divided into distinct subsets of customers with similar needs and characteristics that led them to respond in similar ways to a particular product offering and marketing program.
Target marketing
Which of the following involves evaluating the firm’s mission and capabilities to deliver what each segment wants, in order to choose which segments it will serve?
Intense competition and increase in brand extensions
If in a certain country, the population growth has slowed, and more product-markets are maturing the result is most likely to be one of
An increasing trend toward microsegmentation exists in which extremely small market segments are targeted
The competitive environment in some industries is witnessing developments such as build-to-order processes, mass-customization of products, and computer-aided design technology. What reason can be attributed to the rising importance of marketing segmentation in such an environment?
Developing strategic alliances in the decline stage of the product
Which of the following is not an objective entailed in the market segmentation process?
Nokia has launched a subsidiary to create an ultra-exclusive mobile telephone targeting customers buying prestige products
Which of the following statements emphasizes the impact of income in segmenting markets geographically?
Behavioral
“Gatorade’s” original target market consisted of athletes who needed to replenish water and salts lost through perspiration. “Specialized” and “Gary Fisher” target bicyclists who wish to ride on single-track trails or back-country terrain. Which type of segmentation do these examples highlight?
Over the years, Volvo has emphasized safety whereas Jaguar has emphasized styling, quickness, and status
Which of the following illustrations exemplifies behavioral segmentation?
Choice criteria of the consumer
Consumers evaluate product or brand alternative on the basis of desired characteristics and how valuable each characteristic is. This is referred to as the
Are motivated by abstract and idealized criteria for products or services
Principle-oriented consumers are consumers who
To portray how different segments represent equally attractive opportunities
All of the following are benefits managers gain from applying a common analytical framework across segments to evaluate the potential of alternative market segments except
Are there unmet or underserved needs we can satisfy?
Which of the following marketing questions underlines the market-attractiveness of a firm?
Project future position for each segment
Possible shifts in customer needs and behavior, the entry or exit of competitors, and changes in their strategies are considered during this step of constructing a market-attractiveness/competitive-position matrix for evaluating potential target markets.
Use of pictorial information alongside word information and employee training to help consumers avoid embarrassment (A and B)
The text notes that over 20% of US consumers are functionally illiterate and word based promotional techniques like signage and packaging are ineffective in reaching them. Which techniques hold promise for effective marketing to this group?
Industry attractiveness
Elements such as the threat of new entrants, threat of substitutes, buyer power, competitive rivalry pertain to which factor?
The marketer’s decision making intended to create that position
Brand positioning refers to both the place a brand occupies in customers’ minds relative to the competition; and
Customers’ attitudes toward a product are often based on social or psychological attributes
Identify a limitation of physical positioning.
Consumers often evaluate goods and services on factors other than physical properties, including their past experiences
A Sri Lankan tea producer is positioning its teas in the same way that wine has been positioned for years. What does this positioning strategy signify?
Colgate’s toothpaste with enhanced freshness of breath and sparkly teeth
Which of the following examples best illustrates perceptual positioning?
Complex physically based attributes
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’s or service’s being user-friendly are examples of which type of categorization based on such attributes?
Identifying relevant set of competitive products serving a target market
A firm is considering introducing a new product category in a highly competitive environment. The marketers obtain customer perceptions of the new product concept relative to likely alternatives on various determinant attributes the new product may contain. Based on this, infer what step of the positioning process is the firm at?
Benefits
Volvo’s emphasis on safety, Toyota’s emphasis on reliability, and Norelco’s promising a “close and comfortable shave” highlights which determinant attribute?
“This is the quietest dishwasher made in America.”
This is an example of using product features as a determinant attribute in positioning.
Because all the alternative brands are perceived to be about equal on that dimension
A bank positions itself using its deposit safety attribute. Why would this positioning not create an impact in the consumer’s mind?
It indicates how products within a category compare on the level of as many attributes as are relevant
Identify the incorrect statement concerning the positioning grid.
The dilution of an existing intense position as a result of consolidation
“British Leyland was formed through a series of mergers involving a number of British car manufacturers. It did not have a clear identity because it was new and manufactured a variety of brands, including Rover, Triumph, and Austin-Morris.” Which constraint associated with an intense position does this example illustrate?
Conjoint analysis
Customers are surveyed and asked their preferences among various real or hypothetical product configurations, each with attributes that are systematically varied. This is an example of
It does not tell the marketer which positions are most appealing to customers
Identify the limitation of product positioning analysis.
How consumers feel, think, and act toward the brand, the result of brand differences that consumers find meaningful, and the foundation for the prices and profits the brand can achieve (all of the above)
Brand equity can be described as:
Physical positioning
Objective measures, technical orientation and physical brand properties are associated with:
They are always the market share leaders as the new product categories mature
Which of the following observations about pioneering firms is incorrect?
Skimming
_____ is designed to obtain as much margin per unit as possible and also enables the company to recover its new product investments more quickly.
The length of the product line typically should be relatively short
What is true of the introductory stage in a product life cycle?
A drop in the overall growth rate and substantial price cuts
The shakeout stage in a product life cycle is signaled by
True innovations that are new to the firm and create an entirely new market
New-to-the-world products can be defined as
Additions to existing product lines
These items may be moderately new to both the firm and the customers in its established product-markets.
They try to build primary demand by creating product awareness
Which observation best describes new-to-the-world products?
New-to-the-world products; additions to existing product line; repositionings
To establish a foothold in a future new market, or preempt a market segment, a firm must introduce
Defending a current market-share position
Improving or revising existing products, additions to existing product lines and cost reductions aim at achieving which of the following objectives?
First choice of market segments and positions
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?
Product mistakes
Apple’s iPhone’s sleek design, innovative software, and functionality enabled Apple to capture a substantial share of the global mobile phone market from competitors like Nokia, Motorola, and Samsung. This example illustrates Apple’s ability to take advantage of the pioneers’
Large entry scale
Pioneers that are able to maintain their preeminent position well into the market’s growth stage have supported their early entry 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.
Focusing on peripheral target markets or niches
Which of the following elements belongs to the successful late entrants’ market strategy?
Ability to shift from stimulation of primary demand to stimulation of selective demand
Identify the firm characteristic of mass-market penetration for new product pioneers.
It is appropriate when the product category is likely to experience positive network effects
All of the following are true of firms adopting the niche penetration marketing strategy except
Starting with high price but bringing out lower-priced versions in anticipation of competitive entries
Which of the following marketing programs is used by the niche penetration strategy to increase the customers’ ability to buy?
Improve product quality
In the Introduction stage of the Product Life Cycle, firms should focus on all but which of the following?
The share gains are seldom worth more in a growth market than in a mature market
All of the following are reasons why followers are attracted to rapidly growing markets except
Firms cannot always rely on their competencies to maintain share leadership in a market
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
Retain existing customers and ensure brand loyalty
This is a marketing objective for share leaders.
Differentiated positioning against competitive offerings
Identify a market leader’s action aimed at stimulating selective demand among later adopters.
Flanker strategy
The marketing action of developing a product line with features that are more appealing to a specific segment of potential customers is characteristic of the
The leader’s organizational history and culture
Firms can implement any combination of the given strategies to maintain its leading share position. Firms can choose the preferred combination for a particular product-market of based on all of the following except
Leader should take steps to improve not only the physical product but customers’ perceptions of it as well
What action step must a leader take to improve customer satisfaction as competition enters, or prepares to enter the market?
Flanker strategy
Toyota Motors has introduced a new line of cars aimed at creating an appeal for young car buyers looking for good quality, funky designs, and low-prices. Their intent is to protect their primary brands from direct competition in the same category and from low-price competitors. What is the strategy employed by Toyota?
Market expansion strategy
A firm develops line extensions, new brands, or alternative product forms utilizing similar technologies to appeal to multiple market segments. Identify the strategy employed here.
A firm is unable to defend itself adequately in all segments due to competitors having more resources
Strategic withdrawal strategy is best suited when
Frontal attack strategy
Attacking the leader within its primary target market involves which of the following strategies?
Retaining current customers, stimulate demand among later adopters, and stimulate primary demand to grow the market (all of the above)
Share leaders have an enviable position but must defend their shares against competition. Which of the following marketing objectives are important for firms with the largest market share?
Total sales volume stabilizes
Strategies for Mature and Declining Markets
Often accompanied by a shakeout, during which weaker businesses fail
What is true of the transition from market growth to maturity?
Getting caught in the transition period without a clear strategic advantage
“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 not so in the transition period.” This is true of which strategic trap?
Performance
National Motors manufactures high-end automobiles. The attributes of their cars include excellent handling, acceleration, comfort and braking, providing the company an advantage over its competitors. Identify the product quality dimension of these cars.
Serviceability
The quality dimension of _____ refers to a customer’s ability to obtain prompt and competent service when the product does break down.
Conformance to specifications
This quality dimension refers to the absence of defects.
A firm’s policies concerning customer service are unclear, or haphazardly enforced
The gap between management perceptions and service quality specifications occurs when
Innovative production processes
In some labor-intensive industries, a business can achieve a cost advantage, at least in the short term, by gaining access to inexpensive labor. Identify the type of method used to obtain a sustainable cost advantage.
Involves removing all extras from the basic product or service
The production of no frills goods to maintain a low-cost position
Cheaper raw materials
Papyrus Inc. achieved a cost advantage by being the first major papermaker to rely exclusively on recycled pulp. The firm’s lower cost gave it a competitive edge in the price-sensitive commercial market for toilet paper and other such products used in hotels, restaurants, and office buildings. Which method of maintaining a low-cost position has the company used?
Relatively high penetration but low frequency of use in one or more major segments
Identify the market characteristic that affirms growth extension in maturing markets through application of an extended use strategy.
Develop a differentiated flanker brand with more appealing unique features
To develop differentiated positioning focused on untapped segments using a market expansion strategy, a firm should
Develop more convenient and accessible channels of distribution
A successful increased penetration strategy depends on discovering why nonusers are uninterested in the product. Often, consumers do not perceive enough value in the product. Which of the following is not a suitable solution to enhance product value?
Rely on price cutting to build volume
In a mature market, a market expansion strategy may work. To be successful it depends on a number of factors. Which of the following is not a useful factor in such a market expansion strategy?
A slow and gradual decline allows an orderly withdrawal of weaker competitors
Conditions of demand, factors that help determine the strategic attractiveness of declining product-markets, include demand characteristics such as the rate and the certainty of sales decline. What observation is true of the market conditions being affected by these characteristics?
When rivalry among remaining competitors is likely to be very intense
A harvesting strategy can be used in all the following situations except
Hold on to existing customers
In a mature market, what should a firm’s customer priorities be?