Market Strategies and Management Challenges

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Questions and Answers

What is one potential consequence of a repositioning strategy?

Increased brand loyalty from existing customers
Lower costs compared to full adaptation strategies
Immediate financial gain from new customer acquisition
Loss of market share if existing customers are driven off (correct)

What is one of the primary challenges associated with full adaptation strategies?

They result in higher market penetration
They are usually welcomed by existing customers
They tend to be cost prohibitive (correct)
They are easy to implement quickly

Which aspect does repositioning primarily aim to achieve?

To eliminate all existing customers
To enhance perceived relevance in a different market segment (correct)
To decrease marketing expenditures significantly
To consistently maintain a brand’s established market position

When considering brand repositioning, what is a significant risk that must be managed?

The possibility of losing existing customers without gaining new ones (D) Signup and view all the answers

What can be a financial implication of implementing full adaptation strategies?

They might result in significant excessive costs (D) Signup and view all the answers

What behavior may be influenced by uncertainty about the future according to the content?

Impulsive spending of limited resources (B) Signup and view all the answers

What is a possible consequence of impulsive spending in the face of uncertainty?

Depletion of available resources (A) Signup and view all the answers

In which market condition might impulsive spending become more prevalent?

High levels of uncertainty (A) Signup and view all the answers

Which of the following best describes the relationship between limited resources and spending behavior under uncertainty?

Limited resources are ignored in favor of current desires (A) Signup and view all the answers

What aspect of market behavior does the content suggest needs analysis in relation to uncertainty?

Impulsive spending tendencies (C) Signup and view all the answers

What is the primary goal of creating product and service awareness for the BOP market?

To ensure consumers and producers know what is available and how to use it (C) Signup and view all the answers

Which of the following best describes the BOP market?

Consumers at the base of the economic pyramid (B) Signup and view all the answers

Creating awareness in the BOP market includes which of the following components?

Ensuring both consumers and producers understand the offerings and their uses (A) Signup and view all the answers

What is a potential consequence of lacking product and service awareness in the BOP market?

Consumers are unaware of available options and their applications (C) Signup and view all the answers

Which approach is NOT typically included in creating awareness for the BOP market?

Providing specialized, expensive items unavailable to most (B) Signup and view all the answers

What was the primary motivation for Vestergaard to design a new product?

To filter any type of contaminated water (C) Signup and view all the answers

In which regions did the product experience significant success?

Emerging countries (C) Signup and view all the answers

What type of water did Vestergaard's new product aim to filter?

Contaminated water (C) Signup and view all the answers

What stage was Vestergaard at when they decided to create the new product?

After achieving success in emerging countries (B) Signup and view all the answers

Which of the following best describes Vestergaard's approach to their product after its success?

To innovate with a new product line (A) Signup and view all the answers

What is a challenge related to subsidiaries in multinational companies?

Lack of sensitivity to the attitude from headquarters. (A) Signup and view all the answers

What problem can arise from product innovations developed in subsidiaries?

Product cannibalization of existing products at home. (D) Signup and view all the answers

What is a potential perception issue for products developed in emerging market subsidiaries?

Perception of a lower status due to their origin. (A) Signup and view all the answers

Why might parent companies resist innovations from their subsidiaries?

Fear of internal competition from subsidiary products. (B) Signup and view all the answers

What could be an implication of a company's reputation due to innovations from its subsidiaries?

The innovations may be seen as inferior in developed markets. (C) Signup and view all the answers

Study Notes

Adaptation Strategies

Full adaptation strategies can be very expensive.
Repositioning a brand can lead to significant short-term and long-term loss of market share, if the strategy does not attract new customers to replace those lost.
Uncertainty about the future can lead to risky spending of limited resources.

Market Structure Analysis Considerations

Awareness creation is crucial for the Base of the Pyramid (BOP) market, to ensure both consumers and producers understand available products and services.
Vestergaard's product initially gained popularity in emerging markets. They then developed a new product to filter any type of contaminated water.

Management Challenges in Subsidiaries

Subsidiaries must be sensitive to the attitudes of their parent company headquarters.
Product cannibalization at home may occur when a new product developed for a different market competes with the parent company's existing offerings.

Difficulties with Reverse Innovation (RI)

Parent companies may resist innovations originating from their subsidiaries.
A subsidiary's reputation in a developed market may be negatively impacted by the perception that their innovations are cheap and less sophisticated than those from the parent company.

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Description

Explore the intricacies of adaptation strategies in market positioning and the management challenges faced by subsidiaries. This quiz delves into the significance of awareness in emerging markets and the potential pitfalls of product cannibalization. Evaluate your understanding of these critical business concepts.