Marketing Management, 14e (Kotler/Keller) Chapter 11 Competitive Dynamics 1) The has the largest market share and usually shows the way to other firms in price changes, new-product introductions, distribution coverage, and promotional intensity A) market challenger B) market entrant C) market follower D) market nicher E) market leader Answer: E Page Ref: 299 Objective: AACSB: Analytic skills Difficulty: Easy 2) When the total market expands, the usually gains the most A) market challenger B) market leader C) market follower D) market nicher E) market entrant Answer: B Page Ref: 301 Objective: AACSB: Analytic skills Difficulty: Easy 3) When a firm looks for new users in groups that might use the product but not, the firm is using the strategy A) new-market segment B) market-penetration C) geographical-expansion D) product development E) diversification Answer: B Page Ref: 301 Objective: Difficulty: Easy Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 4) As the marketing manager of a company that manufactures floor tiles, Evans Smith is given a target to achieve 500 new customers by the end of summer He decides to search the market for probable customers who might use the product but not at present Which of the following strategies is Evans pursuing to increase the market demand for his product? A) market-penetration strategy B) new-market segment strategy C) geographical-expansion strategy D) needs-assessment strategy E) consolidation strategy Answer: A Page Ref: 301 Objective: AACSB: Analytic skills Difficulty: Moderate 5) When firms look for new users in groups that have never used the product before, the firm is using the strategy A) new-market segment B) market-penetration C) geographical-expansion D) product development E) diversification Answer: A Page Ref: 301 Objective: Difficulty: Easy 6) When Starbucks introduced its Tazo Tea line to bring in new customers who had never gone to Starbucks because they don't drink coffee, Starbucks was employing a strategy A) market-penetration B) new-market segment C) geographical-expansion D) niche identification E) blue-ocean Answer: B Page Ref: 301 Objective: Difficulty: Easy Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 7) Trendz Inc is a leading brand of fashion clothing and accessories based in Houston After gaining a strong foothold in the U.S., the company wants to foray into foreign markets The management at Trends knows that people residing in other countries are likely to have different tastes and preferences, so they may have to redesign some of their offerings Which of the following strategies is Trendz using? A) market-penetration strategy B) outsourcing strategy C) geographic-expansion strategy D) product differentiation strategy E) ethnocentric strategy Answer: C Page Ref: 301 Objective: AACSB: Analytic skills Difficulty: Moderate 8) A market leader on the look out for more usage from existing customers should focus on increasing the frequency of consumption and A) decreasing the product price B) the product line C) the amount of consumption D) decreasing production turnover time E) diversifying into unrelated markets Answer: C Page Ref: 301 Objective: Difficulty: Easy 9) Which of the following marketing strategies requires either identifying additional opportunities to use the brand in the same basic way or identifying completely new and different ways to use the brand? A) increasing the amount of consumption B) decreasing the level of consumption C) increasing dedication to consumption D) increasing product innovation E) increasing frequency of consumption Answer: E Page Ref: 302 Objective: AACSB: Analytic skills Difficulty: Easy Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 10) When food product companies advertise recipes that use their branded products in entirely different ways, they are increasing the of the brand A) amount of consumption B) level of consumption C) dedication to consumption D) frequency of consumption E) awareness consumption Answer: D Page Ref: 302 Objective: AACSB: Analytic skills Difficulty: Easy 11) Oliver, a company that produces different types of olive oil, launched a promotional campaign focusing on the alternative uses of olive oil What strategy is the company implementing to expand its total market demand? A) using the new-market segment strategy to attract new customers B) improving the current level of product performance C) advertising new and different applications of the brand D) protecting its market share E) using the market-penetration strategy to attract new customers Answer: C Page Ref: 302 Objective: AACSB: Analytic skills Difficulty: Moderate 12) Clorox runs ads stressing the many benefits of its bleach, such as how it eliminates kitchen odors, in order to generate additional opportunities to use the brand in the same basic way This is an attempt to A) increase the amount of consumption B) increase the level of consumption C) increase the perception of consumption D) increase the frequency of consumption E) increase the emotional implications of consumption Answer: D Page Ref: 302 Objective: AACSB: Analytic skills Difficulty: Easy Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 13) Which of the following is the most constructive response a market leader can make when defending its market share? A) maintain basic cost control B) innovate continuously C) provide desired benefits D) meet challengers with a swift response E) provide expected benefits Answer: B Page Ref: 302 Objective: AACSB: Reflective thinking Difficulty: Easy 14) To satisfy customers, a(n) marketer finds a stated need and fills it A) creative B) responsive C) anticipative D) laidback E) inexperienced Answer: B Page Ref: 302 Objective: Difficulty: Easy 15) A(n) marketer looks ahead to needs customers may have in the near future A) laidback B) creative C) inexperienced D) responsive E) anticipative Answer: E Page Ref: 302 Objective: Difficulty: Easy 16) A(n) marketer discovers solutions customers did not ask for but to which they enthusiastically respond A) laidback B) responsive C) inexperienced D) creative E) anticipative Answer: D Page Ref: 302 Objective: Difficulty: Easy Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 17) marketers are not just market-driven, they are proactive market-driving firms A) Creative B) Responsive C) Inexperienced D) Laidback E) Anticipative Answer: A Page Ref: 302 Objective: Difficulty: Easy 18) Sony is an unusual market leader It gives its customers new products that they have never asked for (e.g., Walkmans, VCRs, video cameras, CDs) This makes Sony a(n) firm A) market-driven B) market-driving C) operations-driven D) vision-driven E) virtually-driven Answer: B Page Ref: 302 Objective: Difficulty: Easy 19) Which of the following is true about proactive marketing? A) A company needs creative anticipation to see the writing on the wall B) Proactive companies create new offers to serve unmet and unknown consumer needs C) Proactive companies refrain from practicing uncertainty management D) A company needs responsive anticipation to devise innovative solutions E) Companies are winners when they are extremely risk-averse Answer: B Page Ref: 302-303 Objective: Difficulty: Easy 20) defense involves occupying the most desirable market space in the minds of the consumers and making the brand almost impregnable A) Position B) Flank C) Preemptive D) Mobile E) Contraction Answer: A Page Ref: 303 Objective: Difficulty: Easy Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 21) A marketing manager has planned a strategy that will require the organization to erect outposts to protect its weak front-running brands In this defense, the outposts will be central to the organization's new competitive strategy A) position B) flank C) preemptive D) counteroffensive E) mobile Answer: B Page Ref: 303 Objective: AACSB: Analytic skills Difficulty: Easy 22) is an aggressive maneuver where the firm attacks first, perhaps with guerrilla action across the market and keeping everyone off balance A) Position defense B) Flank defense C) Contraction defense D) Preemptive defense E) Lateral defense Answer: D Page Ref: 303 Objective: AACSB: Reflective thinking Difficulty: Easy 23) The defensive marketing strategy wherein a stream of new products are introduced by a firm and are announced in advance are referred to as defense A) mobile B) counteroffensive C) preemptive D) contraction E) flank Answer: C Page Ref: 303 Objective: Difficulty: Easy Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 24) If Microsoft announces plans for a new-product development, smaller firms may choose to concentrate their development efforts in other directions to avoid head-to-head competition In this example, Microsoft is employing a strategy A) preemptive defense B) counteroffensive defense C) mobile defense D) flank defense E) contraction defense Answer: A Page Ref: 303 Objective: Difficulty: Easy 25) In a defense strategy, the market leader can meet the attacker frontally and hit its flank, or launch a pincer movement so that it's forced to pull back to defend itself A) position B) counteroffensive C) preemptive D) contraction E) flank Answer: B Page Ref: 303 Objective: Difficulty: Easy 26) After Olay entered and took over the Indian market with its anti-aging lotion, Ponds decided to defend its home turf by investing heavily in a similar product, but that which used only natural ingredients This is an example of a A) position defense B) flank defense C) counteroffensive defense D) contraction defense E) mobile defense Answer: C Page Ref: 303 Objective: AACSB: Analytic skills Difficulty: Moderate Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 27) In , the market leader stretches its domain over new territories that can serve as future centers for defense and offense A) counteroffensive defense B) flank defense C) contraction defense D) mobile defense E) position defense Answer: D Page Ref: 303 Objective: AACSB: Analytic skills Difficulty: Easy 28) Market broadening and market diversification are likely tactics employed in strategies A) position defense B) flank defense C) preemptive defense D) counteroffensive defense E) mobile defense Answer: E Page Ref: 303 Objective: AACSB: Analytic skills Difficulty: Easy 29) When "petroleum" companies such as BP sought to recast themselves as "energy" companies, increasing their research into the oil, coal, nuclear, hydroelectric, and chemical industries, these companies were employing a strategy A) preemptive defense B) counteroffensive defense C) mobile defense D) flank defense E) contraction defense Answer: C Page Ref: 303 Objective: AACSB: Analytic skills Difficulty: Easy Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 30) When large companies can no longer defend all their territory, they launch a defense where they give up weaker markets and reassign resources to stronger ones A) contraction B) preemptive C) flank D) mobile E) position Answer: A Page Ref: 304 Objective: Difficulty: Easy 31) In 2006, Sara Lee spun off products that accounted for a large percentage of the company's revenues, including its strong Hanes hosiery brand, so it could concentrate on its well-known food brands In this example, Sara Lee is employing a strategy A) preemptive defense B) counteroffensive defense C) mobile defense D) flank defense E) contraction defense Answer: E Page Ref: 304 Objective: Difficulty: Easy 32) A firm that is willing to maintain its market share, and not attack the leader and other competitors in an aggressive bid for further market share, is known as a A) market challenger B) market leader C) market follower D) market nicher E) market entrant Answer: C Page Ref: 305 Objective: Difficulty: Easy 10 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 78) is a distribution strategy that can be effectively used during the growth stage of the product life cycle A) Building product awareness B) Phasing out unprofitable outlets C) Building selective distribution D) Building intensive distribution E) Stressing on brand differences Answer: D Page Ref: 317 Objective: Difficulty: Easy 79) Which of the following strategies should be adopted by marketers during a recession? A) increase investment on marketing existing products B) focus on expanding the customer base and not on the retention of existing customers C) focus primarily on price reductions and discounts D) concentrate on communicating the brand value and product quality to consumers E) stick to the budget allocations adopted during the preceding years Answer: D Page Ref: 318-319 Objective: Difficulty: Easy 80) Benz & Frendz Corp., a manufacturer of high end consumer durables, experienced a sluggish sales growth in most of its product categories during three consecutive quarters of 2009 However, market analysis revealed that its competitors' sales had also slackened during this period Analysts pointed out that when all firms are losing sales, it is extremely important to adopt strategies that are aimed at retaining customers This led the firm to reduce operation costs while maintaining product quality They also revamped their marketing strategy to focus on the values created by their products Which of the following can be inferred from the strategies adopted by the firm? A) The company was trying to protect its market share and continue to operate as a market leader B) The company was focusing on geographical expansion C) The company was aiming to capture a new market segment D) The company was marketing its products amidst an economic downturn E) The company was focusing on market penetration Answer: D Page Ref: 318-320 Objective: AACSB: Analytic skills Difficulty: Moderate 26 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 81) When the total market expands, the dominant firm usually gains the most Answer: TRUE Page Ref: 301 Objective: AACSB: Reflective thinking Difficulty: Easy 82) The market leader should look for new customers or more usage from existing customers Answer: TRUE Page Ref: 301 Objective: Difficulty: Easy 83) A market-penetration strategy is one where a company searches for new customers in a group that has never used a product before Answer: FALSE Page Ref: 301 Objective: Difficulty: Easy 84) One way to increase the frequency of consumption of a product by consumers is by introducing it in larger package sizes Answer: FALSE Page Ref: 302 Objective: Difficulty: Easy 85) Increasing amount of consumption requires identifying additional opportunities to use the brand in the same basic way Answer: FALSE Page Ref: 302 Objective: Difficulty: Easy 86) A marketing program can communicate the appropriateness and advantages of using the brand Answer: TRUE Page Ref: 302 Objective: Difficulty: Easy 87) The most constructive response to protecting market share is continuous innovation Answer: TRUE Page Ref: 302 Objective: Difficulty: Easy 27 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 88) A responsive marketer looks ahead to needs customers may have in the near future Answer: FALSE Page Ref: 302 Objective: Difficulty: Easy 89) An anticipative marketer finds a stated need and fills it Answer: FALSE Page Ref: 302 Objective: Difficulty: Easy 90) A creative marketer discovers solutions customers did not ask for but to which they enthusiastically respond Answer: TRUE Page Ref: 302 Objective: Difficulty: Easy 91) Position defense means occupying the most desirable market space in consumers' minds, making the brand almost impregnable Answer: TRUE Page Ref: 303 Objective: Difficulty: Easy 92) In counteroffensive marketing, the market leader can meet the attacker frontally and hit its flank, or launch a pincer movement so that it is forced to pull back to defend itself Answer: TRUE Page Ref: 303 Objective: Difficulty: Easy 93) In contraction defense, the leader stretches its domain over new territories through market broadening and market diversification Answer: FALSE Page Ref: 303-304 Objective: Difficulty: Easy 94) Market diversification shifts the company's focus to unrelated industries Answer: TRUE Page Ref: 304 Objective: Difficulty: Easy 28 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 95) Market challengers are companies that attack the leader and other competitors in an aggressive bid for further market share Answer: TRUE Page Ref: 305 Objective: Difficulty: Easy 96) Attacking the market leader proves successful and beneficial only when the leader is not serving the market well Answer: TRUE Page Ref: 305 Objective: Difficulty: Easy 97) A frontal attacking strategy is another name for identifying shifts that are causing gaps to develop, then rushing to fill the gaps Answer: FALSE Page Ref: 306 Objective: Difficulty: Easy 98) Encirclement attempts to capture a wide slice of territory by launching a grand offensive on several fronts Answer: TRUE Page Ref: 306 Objective: Difficulty: Easy 99) Guerrilla attacks consist of small, intermittent attacks, conventional and unconventional, including selective price cuts, intense promotional blitzes, and occasional legal action Answer: TRUE Page Ref: 306 Objective: Difficulty: Easy 100) As a market-follower strategy, a counterfeiter emulates the leader's products, name, and packaging, with slight variations Answer: FALSE Page Ref: 307 Objective: Difficulty: Easy 29 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 101) As a market-follower strategy, an imitator duplicates the leader's product and packages and sells it on the black market or through disreputable dealers Answer: FALSE Page Ref: 307 Objective: Difficulty: Easy 102) As a market-follower strategy, an adapter takes the leader's products and adapts or improves them Answer: TRUE Page Ref: 307 Objective: Difficulty: Easy 103) Firms with low shares of the total market can become highly profitable through smart niching Answer: TRUE Page Ref: 308 Objective: Difficulty: Easy 104) An alternative to being a follower in a large market is to be a leader in a small market Answer: TRUE Page Ref: 308 Objective: Difficulty: Easy 105) The nicher achieves high sales volume, whereas the mass marketer achieves high margin Answer: FALSE Page Ref: 308 Objective: Difficulty: Easy 106) The growth stage of a product's life cycle is a period of rapid market acceptance and substantial profit improvement Answer: TRUE Page Ref: 310 Objective: Difficulty: Easy 107) During the maturity stage of a product life cycle, profits stabilize or decline because of increased competition Answer: TRUE Page Ref: 310 Objective: Difficulty: Easy 30 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 108) A fashion is a basic and distinctive mode of expression appearing in a field of human endeavor Answer: FALSE Page Ref: 311 Objective: Difficulty: Easy 109) Fads are fashions that come quickly into public view, are adopted with great zeal, peak early, and decline very fast Answer: TRUE Page Ref: 311 Objective: Difficulty: Easy 110) An inventor is the first to develop a working model while a product pioneer is the first to develop patents in a new-product category Answer: FALSE Page Ref: 312 Objective: Difficulty: Easy 111) Price, distribution, and communication are the nonproduct elements that marketers modify to increase product sales Answer: TRUE Page Ref: 314 Objective: Difficulty: Easy 112) An alternate way to increase sales volume is to expand the number of users by having them consume more of the product on each occasion Answer: FALSE Page Ref: 315 Objective: Difficulty: Easy 113) An alternate way to increase sales volume is to expand the number of users by converting nonusers Answer: TRUE Page Ref: 315 Objective: Difficulty: Easy 31 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 114) An alternate way to increase sales volume is to increase the usage rates among users by having consumers use the product in new ways Answer: TRUE Page Ref: 315 Objective: Difficulty: Easy 115) An alternate way to increase sales volume is to increase the usage rates among users by entering new market segments Answer: FALSE Page Ref: 315 Objective: Difficulty: Easy 116) The prime objective, during the introduction stage of a product life cycle, is to maximize market share Answer: FALSE Page Ref: 317 Objective: Difficulty: Easy 117) The product strategy during the maturity stage of the product life cycle should be to build more intensive distribution Answer: FALSE Page Ref: 317 Objective: Difficulty: Easy 118) During economic downturn, the potential value and profitability of some target consumers may change Answer: TRUE Page Ref: 319 Objective: Difficulty: Easy 119) Heavy focus on price reductions and discounts during recession allow firms to improve long-term brand equity and price integrity Answer: FALSE Page Ref: 319 Objective: Difficulty: Easy 32 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 120) Which three groups of customers can help expand a firm's market demand? Answer: Every product class has the potential to attract buyers who are unaware of the product or are resisting it because of price or lack of certain features A company can search for new users among three groups: those who might use it but not (market-penetration strategy), those who have never used it (new-market segment strategy), or those who live elsewhere (geographical-expansion strategy) Page Ref: 301 Objective: Difficulty: Easy 121) Which three groups of marketers help satisfy a customer's needs? Answer: In satisfying customer needs, one can draw a distinction between responsive marketing, anticipative marketing, and creative marketing A responsive marketer finds a stated need and fills it An anticipative marketer looks ahead to needs customers may have in the near future A creative marketer discovers solutions customers did not ask for but to which they enthusiastically respond Creative marketers are proactive market-driving firms, not just market-driven ones Page Ref: 302 Objective: Difficulty: Easy 122) What is counteroffensive defense? Explain with an example Answer: In a counteroffensive, the market leader can meet the attacker frontally and hit its flank, or launch a pincer movement so it will have to pull back to defend itself After FedEx watched UPS successfully invade its airborne delivery system, it invested heavily in ground delivery through a series of acquisitions to challenge UPS on its home turf Another common form of counteroffensive is the exercise of economic or political clout The leader may try to crush a competitor by subsidizing lower prices for the vulnerable product with revenue from its more profitable products, or it may prematurely announce a product upgrade to prevent customers from buying the competitor's product Or the leader may lobby legislators to take political action to inhibit the competition Page Ref: 303 Objective: Difficulty: Easy 123) Characterize the four broad strategies often employed by market followers to meet their competitors Answer: These broad strategies include: (1) counterfeiter - the counterfeiter duplicates the leader's product and package and sells it on the black market or through disreputable dealers; (2) cloner - the cloner emulates the leader's products, name, and packaging, with slight variations; (3) imitator - the imitator copies some things from the leader but maintains differentiation in terms of packaging, advertising, pricing, or location; and (4) adapter - the adapter takes the leader's products and adapts or improves them Page Ref: 307 Objective: Difficulty: Easy 124) What are end-user and vertical-level specialists? 33 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall Answer: The key idea in successful nichemanship is specialization A firm that specializes in one type of end-use customer is an end-user specialist For example, a value-added reseller (VAR)customizes computer hardware and software for specific customer segments and earns a price premium in the process A firm that specializes at some vertical level of the production-distribution value chain is a vertical-level specialist A copper firm may concentrate on producing raw copper, copper components, or finished copper products Page Ref: 309 Objective: Difficulty: Easy 125) What is fashion? Answer: Fashion is one of the three special categories of product life cycles A fashion is a currently accepted or popular style in a given field Fashions pass through four stages: distinctiveness, emulation, mass fashion, and decline The length of a fashion cycle is hard to predict One view is that fashions end because they represent a purchase compromise, and consumers soon start looking for the missing attributes Another explanation is that too many consumers adopt the fashion, thus turning others away Still another is that the length of a particular fashion cycle depends on the extent to which the fashion meets a genuine need, is consistent with other trends in the society, satisfies societal norms and values, and keeps within technological limits as it develops Page Ref: 311 Objective: Difficulty: Easy 126) What must the firm to sustain rapid market share growth? Answer: To sustain rapid market share growth now, the firm must: • improve product quality and add new features and improved styling • add new models and flanker products (of different sizes, flavors, and so forth) to protect the main product • enter new market segments • increase its distribution coverage and enter new distribution channels • shift from awareness and trial communications to preference and loyalty communications • lower prices to attract the next layer of price-sensitive buyers By spending money on product improvement, promotion, and distribution, the firm can capture a dominant position It can trade off maximum current profit for high market share and the hope of even greater profits in the maturity stage Page Ref: 313 Objective: Difficulty: Easy 34 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 127) Which are the three ways to change the course for a brand? Answer: Three ways to change the course for a brand are market, product, and marketing program modifications Market modification: A company might try to expand the market for its mature brand by working with the two factors that make up sales volume: Volume = number of brand users * usage rate per user This may also be matched by competitors Product modification: Managers also try to stimulate sales by improving quality, features, or style Quality improvement increases functional performance by launching a "new and improved" product Feature improvement adds size, weight, materials, supplements, and accessories that expand the product's performance, versatility, safety, or convenience Style improvement increases the product's esthetic appeal Any of these can attract consumer attention Marketing program modification: Finally, brand managers might also try to stimulate sales by modifying nonproduct elements - price, distribution, and communications in particular They should assess the likely success of any changes in terms of effects on new and existing customers Page Ref: 314 Objective: Difficulty: Easy 128) Explain how luxury brands can benefit during an economic recession from having lowerpriced brands or sub-brands in their portfolio Answer: They can review product portfolios and brand architecture to confirm that brands and sub-brands are clearly differentiated, targeted, and supported based on their prospects Luxury brands can benefit from lower-priced brands or sub-brands in their portfolios Because different brands or sub-brands appeal to different economic segments, those that target the lower end of the socioeconomic spectrum may be particularly important during a recession Value-driven companies such as McDonald's, Walmart, Costco, Aldi, Dell, E*TRADE, Southwest Airlines, and IKEA are likely to benefit most Spam, the oft-maligned gelatinous 12ounce rectangle of spiced ham and pork, found its sales soaring during the recession Affordably priced and requiring no refrigeration, Spam is, its maker Hormel claims, "like meat with a pause button." Page Ref: 320 Objective: Difficulty: Easy 129) Describe the three strategies that are necessary for a market leader to accomplish to stay on top Answer: The three primary strategies that may be used by the market leader are: (1) expanding the total market by attracting new customers and by stimulating more usage of product; (2) defending market share; and (3) expanding market share Page Ref: 301 Objective: AACSB: Analytic skills Difficulty: Easy 35 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 130) Your marketing manager has asked you to develop a new customer strategy for your company Additionally, you have been asked to develop, specifically, a market-penetration strategy to assist in gaining new customers Describe a market-penetration strategy in this context Answer: The market-penetration strategy in this context would seek to get new customers from a group that might use the product but as yet not Page Ref: 301 Objective: AACSB: Analytic skills Difficulty: Easy 131) Assume that your firm is a market leader in manufacturing detergent How would the firm use position defense as a defensive marketing strategy to maintain its share? Answer: Position defense means occupying the most desirable market space in consumers' minds, making the brand almost impregnable Tide, as a popular laundry detergent, has become synonymous with washing machine detergent Student answers may vary Page Ref: 303 Objective: AACSB: Analytic skills Difficulty: Moderate 132) If you were asked to develop a mobile defense for your products that are likely to come under attack from a market challenger, what would you suggest? Answer: In mobile defense, the leader stretches its domain over new territories through market broadening and market diversification Market broadening shifts the company's focus from the current product to the underlying generic need Page Ref: 303 Objective: AACSB: Reflective thinking Difficulty: Easy 133) As a brand manager of a firm that manufactures denim jeans, how will you implement a preemptive defense marketing strategy to meet an anticipated competitive challenge? Answer: A preemptive defense is a more aggressive maneuver that has as its purpose to attack before the enemy starts its offense You can launch a preemptive defense by waging a guerrilla action across the market and keep everyone off balance Another way to launch a preemptive defense is by introducing a stream of new products like denim jackets and skirts in various colors Student answers may vary Page Ref: 303 Objective: AACSB: Analytic skills Difficulty: Moderate 36 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 134) The cost of buying higher market share through acquisition may far exceed its revenue value Which are the four factors a company should consider before doing so? Answer: The four factors to be considered before buying higher market share are: the possibility of provoking antitrust action, economic cost, the danger of pursuing the wrong marketing activities, and the effect of increased market share on actual and perceived quality Page Ref: 304-305 Objective: Difficulty: Easy 135) Who are the ideal opponents of a market challenger? Answer: The opponents of a market challenger are: (1) the industry leader; (2) firms its own size that are not doing the job and are underfinanced; or (3) small local and regional firms Page Ref: 306 Objective: AACSB: Reflective thinking Difficulty: Easy 136) Describe frontal attack as a general market-challenger attack strategy Answer: In a pure frontal attack, the attacker matches its opponent's product, advertising, price, and distribution The principle of force says the side with the greater resources will win A modified frontal attack, such as cutting price, can work if the market leader doesn't retaliate, and if the competitor convinces the market its product is equal to the leader's Page Ref: 306 Objective: Difficulty: Easy 137) Assume that you are the marketing manager of a firm that manufactures athletic shoes How will you launch an encirclement attack on your competitor? Answer: Encirclement attempts to capture a wide slice of territory by launching a grand offensive on several fronts It makes sense when the challenger commands superior resources In an attack on your archrival, you can launch your product in all the major cites of the globe together and surprise your rival Student answers may vary Page Ref: 306 Objective: AACSB: Analytic skills Difficulty: Moderate 37 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 138) The marketing manager of a firm that manufactures cotton cloth has chosen the bypass attack as a means of responding to an industry leader How will the manager go about launching this type of attack? Answer: The bypass attack is an indirect assault The marketing manager can diversify into unrelated products like ready-made garments The manager can also diversify into new geographical markets or adopt new technologies to manufacture its product Student answers may vary Page Ref: 306 Objective: AACSB: Analytic skills Difficulty: Moderate 139) What is a guerilla attack? Answer: Guerrilla attacks consist of small, intermittent attacks, conventional and unconventional, including selective price cuts, intense promotional blitzes, and occasional legal action, to harass the opponent and eventually secure permanent footholds A guerrilla campaign can be expensive, although less so than a frontal, encirclement, or flank attack, but it typically must be backed by a stronger attack to beat the opponent Page Ref: 306 Objective: Difficulty: Easy 140) How can a firm choose a specific attack? Answer: Any aspect of the marketing program can serve as the basis for attack, such as lowerpriced or discounted products, new or improved products and services, a wider variety of offerings, and innovative distribution strategies A challenger's success depends on combining several, more specific, strategies to improve its position over time Page Ref: 306 Objective: Difficulty: Easy 141) Describe a counterfeiter as a market-follower Answer: A counterfeiter duplicates the leader's product and package and sells it on the black market or through disreputable dealers Music firms, Apple, and Rolex have been plagued by the counterfeiter problem, especially in Asia Page Ref: 307 Objective: AACSB: Analytic skills Difficulty: Easy 38 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 142) If your company, which is a market follower, was labeled as an imitator, what would its primary strategies for meeting competition be? Answer: The imitator copies some things from the leader but maintains differentiation in terms of packaging, advertising, pricing, or location The leader does not mind the imitator as long as the imitator does not attack the leader aggressively Page Ref: 307 Objective: AACSB: Reflective thinking Difficulty: Easy 143) Who is a market-nicher? Answer: An alternative to being a follower in a large market is to be a leader in a small market or niche Smaller firms normally avoid competing with larger firms by targeting small markets of little or no interest to the larger firms But even large, profitable firms may choose to use niching strategies for some of their business units or companies Page Ref: 308 Objective: AACSB: Analytic skills Difficulty: Easy 144) The market nicher is a specialist Characterize the end-user specialist role that can be assumed by the market nicher Answer: When the firm assumes the end-user specialist role, it specializes in one type of end-use customer For example, a value-added reseller (VAR) customizes computer hardware and software for specific customer segments and earns a price premium in the process Page Ref: 309 Objective: AACSB: Analytic skills Difficulty: Easy 145) What is a product-feature specialist? Answer: As a product-feature specialist specializes in producing a certain type of product or product feature Zipcar's car-sharing services target people who live and work in seven major U.S cities, frequently use public transportation, but still need a car a few times a month Page Ref: 309 Objective: Difficulty: Easy 146) What are fads? Answer: Fads are fashions that come quickly into public view, are adopted with great zeal, peak early, and decline very fast Their acceptance cycle is short, and they tend to attract only a limited following who are searching for excitement or want to distinguish themselves from others Fads fail to survive because they don't normally satisfy a strong need The marketing winners are those who recognize fads early and leverage them into products with staying power Page Ref: 311 Objective: Difficulty: Easy 39 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 147) What is the criticism of the product life-cycle concept? Answer: The product life-cycle theory has its share of critics, who claim life-cycle patterns are too variable in shape and duration to be generalized, and that marketers can seldom tell what stage their product is in A product may appear mature when it has actually reached a plateau prior to another upsurge Critics also charge that, rather than an inevitable course, the product life-cycle pattern is the self-fulfilling result of marketing strategies, and that skillful marketing can in fact lead to continued growth Page Ref: 317 Objective: Difficulty: Easy 40 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall ... Difficulty: Easy 111 ) Price, distribution, and communication are the nonproduct elements that marketers modify to increase product sales Answer: TRUE Page Ref: 314 Objective: Difficulty: Easy 112 ) An... Page Ref: 311 Objective: Difficulty: Easy 109) Fads are fashions that come quickly into public view, are adopted with great zeal, peak early, and decline very fast Answer: TRUE Page Ref: 311 Objective:... awareness consumption Answer: D Page Ref: 302 Objective: AACSB: Analytic skills Difficulty: Easy 11) Oliver, a company that produces different types of olive oil, launched a promotional campaign