SMM Unit 8.pdf

lOMoARcPSD|7648752 Chapter 01 - Market-Oriented Perspectives Underlie Successful Corporate, Business, and Marketing Strategies communication with customers often follow. They are most commonly written for a product line or a brand,...

lOMoARcPSD|7648752 Chapter 01 - Market-Oriented Perspectives Underlie Successful Corporate, Business, and Marketing Strategies communication with customers often follow. They are most commonly written for a product line or a brand, but sometimes for a single product or for a business as a whole. When used at the business level, they should articulate the strategic direction for the company. Level of Difficulty: Medium Page: 179-181 Chapter 08 Marketing Strategies for New Market Entries Multiple Choice Questions 1. 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? A. Growth stage B. Introductory stage C. Competitive turbulence stage D. Decline stage Answer: a Level of Difficulty: Easy Page: 191 2. _____ is designed to obtain as much margin per unit as possible and also enables the company to recover its new product investments more quickly. A. Penetration pricing B. Odd-even pricing C. Skimming D. Benchmarking Answer: c Level of Difficulty: Easy Page: 193 3. Which of the following is true of the introductory stage in a product life cycle? A. The product is easily available at this stage. B. The net adoption rate holds steady at this stage. C. Shakeout or competitive turbulence occurs at the end of this stage. D. Skimming is one of the pricing strategies applied at this stage. Answer: d Level of Difficulty: Medium Page: 193 4. Which of the following pricing strategies is appropriate during the maturity stage of the product life cycle? A. Skimming B. Penetration strategy 1-43 © 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. Reduce across the board D. Hold or reduce selectively Answer: d Level of Difficulty: Easy Page: 193 5. Identify the appropriate response by a firm when its product line is in the mature life cycle stage. A. Reduce length of line B. Hold length of line C. Broaden product line D. Introduce new product line Answer: b Level of Difficulty: Medium Page: 193 6. The shakeout stage in a product life cycle is signaled by: A. an expansion of the product line to attract new segments. B. limited purchase of the product due to lack of awareness. C. a drop in the overall growth rate and substantial price cuts. D. stability in terms of demand, technology, and competition. Answer: c Level of Difficulty: Medium Page: 195 7. New-to-the-world products can be defined as: A. true innovations that are new to the firm and create an entirely new market. B. a product category that is new for the company introducing it, but not new to customers in the target market. C. existing products that are targeted at new applications and new market segments. D. items providing improved performance brought out to replace existing products. Answer: a Level of Difficulty: Easy Page: 198 8. Which of the following refers to products that supplement a firm’s established product line? A. Repositioning B. Additions to existing product lines C. New product lines D. Cost-reduced products Answer: b Level of Difficulty: Easy Page: 198 9. Which of the following observations best describes new-to-the-world products? A. They are new to the company but not to the market. 1-44 © 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 B. They are often not very innovative in design or operations. C. They are aimed at new customer segments or repositioning of existing products. D. They try to build primary demand by creating product awareness. Answer: d Level of Difficulty: Medium Page: 199 10. Which of the following is an appropriate strategic objective for repositionings? A. Use excess or off-season capacity B. Provide a cash generator C. Capitalize on distribution strengths D. Exploit technology in a new way Answer: b Level of Difficulty: Medium Page: 200 11. Defending a current market-share position is an appropriate strategic objective for: A. repositionings. B. new product lines. C. new-to-the-world products. D. improvements or revisions to existing products. Answer: d Level of Difficulty: Medium Page: 200 12. 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? A. First choice of market segments and positions B. Economies of scale and experience C. Distribution advantages D. High switching costs for early adopters Answer: a Level of Difficulty: Medium Page: 201 13. Which of the following advantages of pioneers is particularly pronounced when the product is technically sophisticated and involves high development costs? A. Possibility of preempting scarce resources and suppliers B. Distribution advantages C. High switching costs for early adopters D. Economies of scale and experience Answer: d Level of Difficulty: Medium 1-45 © 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 Page: 202 14. 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. A. Broad product lines B. Heavy promotional expenditures C. Large entry scale D. High product quality Answer: c Level of Difficulty: Medium Page: 205 15. Which of the following elements belongs to the successful late entrants' market strategy? A. Leapfrogging the pioneer with superior product technology B. Focusing on peripheral target markets or niches C. Larger entry scale than the pioneer D. Heavy promotional expenditures Answer: b Level of Difficulty: Easy Page: 206 16. Identify the firm characteristic of a new product pioneer pursuing the mass-market penetration strategy. A. It should have limited marketing skills and resources. B. It should have a leading share position in target segment. C. It should have the ability to shift from stimulation of primary demand to stimulation of selective demand. D. It should have limited financial resources to commit to building capacity prior to demand growth. Answer: c Level of Difficulty: Medium Page: 208 17. Which of the following is a primary objective of mass-market penetration strategies? A. Recoup development and commercialization costs as soon as possible. B. Maintain leading share position in target segment. C. Maximize number of triers and adopters in target segment. D. Maximize number of triers and adopters in total market. Answer: d Level of Difficulty: Medium Page: 208 18. Which of the following marketing programs is used by pioneers as a niche penetration strategy to increase the customers' ability to buy? 1-46 © 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 A. Moving relatively quickly to expand offerings to appeal to multiple segments B. Offering free trial or extended warranty policies to reduce target customers' perceived risk C. Attempting to maintain margins at level consistent with value of product to early adopters D. Starting with high price but bringing out lower-priced versions in anticipation of competitive entries Answer: d Level of Difficulty: Medium Page: 211 19. _____ is the simplest way to enter a foreign market because it involves the least commitment and risk. A. Exporting B. Countertrade C. Franchising D. Overseas direct investment Answer: a Level of Difficulty: Medium Page: 212 20. _____ grants the right to use the company's name, trademarks, and technology. A. Contract manufacturing B. Countertrade C. Franchising D. Coproduction Answer: c Level of Difficulty: Easy Page: 213 21. _____ involves a company providing technical know-how and components in return for a share of the output that it must sell. A. Buyback arrangement B. Countertrade C. Coproduction D. Joint ventures Answer: c Level of Difficulty: Easy Page: 214 Essay Questions 22. Discuss the strategic implications of the introductory and growth stages of the product life cycle. Answer: The introduction of a new product requires large investments, so most firms sustain a rather sizable short-term loss. As the product moves into the growth stage, sales increase rapidly; hence, substantial investments continue. Profitability is depressed because facilities have to be built in advance to ensure supply. The firm with the largest share during this period 1-47 © 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])