SMM Unit 10 PDF

lOMoARcPSD|7648752 Chapter 01 - Market-Oriented Perspectives Underlie Successful Corporate, Business, and Marketing Strategies the existing competition by introducing a new generation of products that significantly outperform or of...

lOMoARcPSD|7648752 Chapter 01 - Market-Oriented Perspectives Underlie Successful Corporate, Business, and Marketing Strategies the existing competition by introducing a new generation of products that significantly outperform or offer more desirable customer benefits than do existing brands. Level of Difficulty: Easy Page: 238-239 Chapter 10 Strategies for Mature and Declining Markets Multiple Choice Questions 1. A primary marketing objective of all competitors in mature markets is simply to: A. hold their existing customers. B. market their products to a new market. C. increase market penetration. D. increase price to maximize profits. Answer: a Difficulty: Easy Page: 246-247 2. The transition from market growth to maturity typically begins: A. when the market is still growing but the rate of growth starts to decline. B. when the market growth starts to accelerate. C. after the market ceases to grow. D. when the demand for a product outstrips its rate of production. Answer: a Difficulty: Medium Page: 247 3. 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? A. Sacrificing market share in favor of short-run profit B. No clear competitive advantage as growth slows C. Failure to anticipate transition from growth to maturity D. Assumption that an early advantage will insulate the firm from price or service competition Answer: c Difficulty: Hard Page: 248 4. "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? A. Failure to recognize the events signaling the beginning of the shakeout period B. Getting caught in the transition period without a clear strategic advantage 1-55 © 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Downloaded by Bích Kha Ngô ([email protected])  lOMoARcPSD|7648752 Chapter 01 - Market-Oriented Perspectives Underlie Successful Corporate, Business, and Marketing Strategies C. Failure to recognize the declining importance of product differentiation and the increasing importance of service D. Giving up market share too easily in favor of short-run profit Answer: b Difficulty: Medium Page: 248 5. National Motors manufactures high-end automobiles. The attributes of their cars include excellent handling, acceleration, comfort, and braking, and provides the company an advantage over its competitors. Identify the product quality dimension emphasized by National Motors. A. Reliability B. Performance C. Durability D. Serviceability Answer: b Difficulty: Medium Page: 252 6. 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. A. brand equity B. serviceability C. reliability D. durability Answer: c Difficulty: Easy Page: 252 7. The gap between management perceptions and service quality specifications occurs when: A. a firm’s policies concerning customer service are unclear or haphazardly enforced. B. a firm does not have an accurate understanding of service evaluation by customers. C. a firm’s marketing communications causes unrealistically high expectations in customers. D. a firm fails to give its employees adequate reward structures for good performance. Answer: a Difficulty: Medium Page: 255 8. The production of no-frills goods to maintain a low-cost position: A. involves removing all extras from the basic product or service. B. involves the use of customized component parts. C. always involves short-term profits through the use of inexpensive labor. D. involves replacing technology to personalized services. Answer: a 1-56 © 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Downloaded by Bích Kha Ngô ([email protected])  lOMoARcPSD|7648752 Chapter 01 - Market-Oriented Perspectives Underlie Successful Corporate, Business, and Marketing Strategies Difficulty: Easy Page: 256 9. 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. A. no-frills product B. cheaper raw materials C. low-cost distribution D. innovative production processes Answer: d Difficulty: Medium Page: 257 10. 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? A. Low-cost distribution B. Cheaper raw materials C. No-frills product D. Innovative product design Answer: b Difficulty: Medium Page: 257 11. Which of the following is the critical determinant of success in mature markets? A. Continually working to improve the value of offerings B. Hostile takeover of competitors in the market C. Lowering the price of offerings instead of differentiating D. Considerably downsizing the firm to cut costs Answer: a Difficulty: Medium Page: 258 12. Identify the market characteristic that affirms growth extension in maturing markets through application of an extended use strategy. A. Insufficient competencies to preempt underdeveloped applications segments B. Relatively heterogeneous market with a variety of segments C. Relatively high penetration but low frequency of use in one or more major segments D. Relatively low penetration in one or more segments Answer: c Difficulty: Medium Page: 262 1-57 © 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Downloaded by Bích Kha Ngô ([email protected])  lOMoARcPSD|7648752 Chapter 01 - Market-Oriented Perspectives Underlie Successful Corporate, Business, and Marketing Strategies 13. Which of the following is a possible marketing action that may be taken to convert current nonusers in target segment into users and increase penetration? A. Encourage larger volume purchases of nonperishable products. B. Move storage of the product closer to the point of end use by offering additional package sizes or designs. C. Develop line extensions suitable for additional uses or applications. D. Enhance product’s value by adding features, benefits, or services. Answer: d Difficulty: Easy Page: 263 14. To develop differentiated positioning focused on untapped segments using a market expansion strategy, a firm should: A. encourage larger volume purchases for nonperishable products. B. stimulate additional primary demand by promoting new features. C. develop a differentiated flanker brand with more appealing unique features. D. move storage of the product closer to the point of end use by offering additional package sizes. Answer: c Difficulty: Medium Page: 263 15. Which of the following is a possible marketing action that can encourage extended use of products? A. Enhancing product’s value by including it in the design of integrated systems B. Producing for private labels C. Developing line extensions suitable for additional uses or applications D. Entering global markets where product category is in an earlier stage of its life cycle Answer: c Difficulty: Medium Page: 263 16. _____ is a factor that helps to determine the strategic attractiveness of declining product- markets, and includes the rate and certainty of future declines in volume. A. Time to market B. Conditions of demand C. Exit barriers D. Intensity of future competitive rivalry Answer: b Difficulty: Easy Page: 269 17. _____ refers to the ease with which weaker competitors can leave the market. A. Time to market B. Conditions of demand C. Intensity of future competitive rivalry 1-58 © 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Downloaded by Bích Kha Ngô ([email protected])  lOMoARcPSD|7648752 Chapter 01 - Market-Oriented Perspectives Underlie Successful Corporate, Business, and Marketing Strategies D. Exit barriers Answer: d Difficulty: Easy Page: 269 18. The objective of a _____ strategy is to generate cash quickly by maximizing cash flow over a relatively short term. A. harvesting B. maintenance C. profitable survivor D. niche Answer: a Difficulty: Medium Page: 271 19. Which of the following is the primary objective of niche strategies in a declining market? A. Increasing share of the declining market with an eye to future profits and encourage weaker competitors to exit B. Maintaining share in short term as market declines, even if margins must be sacrificed C. Focusing on strengthening position in one or a few relatively substantial segments with potential for future profits D. Maximizing short-term cash flow Answer: c Difficulty: Medium Page: 272 20. 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? A. To increase share of the declining market with an eye to future profits and encourage weaker competitors to exit B. To maintain share in short term as market declines, even if margins must be sacrificed C. To maximize short-term cash flow and maintain or increase margins even at the expense of a slow decline in market share D. To focus on strengthening position in one or a few relatively substantial segments with potential for future profits Answer: d Difficulty: Hard Page: 272 21. Which of the following is the most probable marketing action by a firm to implement a harvesting strategy in a declining market? A. Consider introducing line extensions to appeal to remaining demand segments. B. Lower prices if necessary to maintain share, even at the expense of reduced margins. C. Focus salesforce efforts on attaining repeat purchases from current users. D. Eliminate R&D expenditures and capital investments related to the business. 1-59 © 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Downloaded by Bích Kha Ngô ([email protected])