Chapter 9

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Questions and Answers

The primary objective of the early share leader, usually the market pioneer, in a growth market is ____.

share maintenance

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. (correct)

Pioneers in new product-markets always manage to leverage their competitive advantages as the market grows.

The number of firms competing for a share of the market will decrease if there are few barriers to entry.

Market fragmentation will occur if potential customers have homogeneous functional needs.

Identify the share maintenance marketing objective for share leaders.

Delineate into niche target markets in product growth stage.

Stimulate secondary demand to help speed up overall market growth.

Stimulate selective demand among innovators.

Retain existing customers and ensure brand loyalty. (correct)

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

Differentiated positioning against competitive offerings Signup and view all the answers

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 Signup and view all the answers

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. Signup and view all the answers

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. Signup and view all the answers

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 competitors' offerings. Signup and view all the answers

Which of the following strategies is most effective in a market that is relatively homogeneous in relation to customer needs and purchase criteria?

Fortress strategy Signup and view all the answers

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

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

Identify the strategy employed by Tokomo Motors when introducing a new line of cars aimed at young car buyers.

Flanker strategy Signup and view all the answers

Identify the strategy employed when a firm develops line extensions, new brands, or alternative product forms to appeal to multiple market segments.

Market expansion strategy Signup and view all the answers

Strategic withdrawal is most likely when:

A firm is unable to defend itself adequately in all segments due to competitors having more resources. Signup and view all the answers

What is the major marketing objective for followers, particularly larger firms entering a product-market shortly after the pioneer?

Attain share growth Signup and view all the answers

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

Frontal attack strategy Signup and view all the answers

Which of the following is an appropriate share-growth strategy in a relatively homogeneous market?

Frontal attack Signup and view all the answers

Which of the following share-growth strategies is appropriate when the needs and preferences of customers in most segments are currently satisfied by competing brands?

Guerrilla attack Signup and view all the answers

What strategy would a challenger be pursuing if its primary objective is to capture a modest share of repeat purchases in several market segments?

Guerrilla attack strategy Signup and view all the answers

A _____ strategy is appropriate when the market can be broken into two or more large segments.

flank attack Signup and view all the answers

A(n) _____ strategy involves targeting several smaller untapped or underdeveloped segments in the market simultaneously.

encirclement Signup and view all the answers

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

Guerrilla attack Signup and view all the answers

Study Notes

Market-Oriented Perspectives

The primary objective of the early share leader, usually the market pioneer, in a growth market is to maintain share.
Sony was the pioneer and early share leader in the videocassette recorder industry, but Matsushita's VHS format equipment proved more popular, demonstrating that firms cannot always rely on their competencies to maintain share leadership.

The share maintenance marketing objective for share leaders is to retain existing customers and ensure brand loyalty.
Market leaders can stimulate selective demand among later adopters by differentiating their offerings against competitive ones.

Market Expansion and Contraction Strategies

A market expansion strategy involves developing multiple-line extensions or brand offerings targeted to the needs of various potential user applications or geographical segments within the market.
A flanker strategy involves developing a second product line with features that are more appealing to a specific segment of potential customers.
A contraction strategy involves reducing the number of products or product lines to focus on the most profitable ones.

Fortress Strategy

The fortress strategy is used by market leaders to defend their relative market share by expanding into a number of market segments, particularly when potential customers have relatively homogeneous needs.

Confrontation Strategy

A confrontation strategy aims to improve the ability to win new customers who might otherwise be attracted to a competitor's offering.
This strategy involves taking steps to improve the physical product and customers' perceptions of it as well.

Flanker Strategy

A flanker strategy is used to protect primary brands from direct competition in the same category and from low-price competitors.
Tokomo Motors employed a flanker strategy by introducing a new line of cars aimed at creating an appeal for young car buyers looking for good quality, funky designs, and low prices.

Market Expansion Strategy

A market expansion strategy involves developing line extensions, new brands, or alternative product forms utilizing similar technologies to appeal to multiple market segments.

Strategic Withdrawal

Strategic withdrawal is most likely when a firm is unable to defend itself adequately in all segments due to competitors having more resources.

The major marketing objective for followers, particularly larger firms entering a product-market shortly after the pioneer, is to attain share growth.
Share-growth strategies include frontal attack, flank attack, encirclement, guerrilla attack, and leapfrog.

Frontal Attack Strategy

A frontal attack strategy involves attacking the leader within its primary target market.

Flank Attack Strategy

A flank attack strategy is appropriate when the market can be broken into two or more large segments, and the leader and/or other major competitors hold a strong position in the primary segment.

Encirclement Strategy

An encirclement strategy involves targeting several smaller untapped or underdeveloped segments in the market simultaneously.

Guerrilla Attack Strategy

A guerrilla attack strategy involves using sales promotion efforts, local advertising blitzes, and legal action to achieve share growth.
This strategy is appropriate when the needs and preferences of customers in most segments are currently satisfied by competing brands.

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Description

This quiz covers market-oriented perspectives and strategies, including the primary objectives of early share leaders and pioneers in growth markets.