Question 1

With few,if any,competitors in an untapped new market,a business has the opportunity to pioneer a portion of the market largely ignored by competitors.This is known as ________.

Accepted Answer

First-mover advantage refers to the advantage a business gains by being the first to enter an untapped market with few or no competitors. This allows the business to establish brand recognition, customer loyalty, and strong distribution channels before competitors can enter the market.

Question 2

MINI-CASE
Clarion Inc.is a firm that produces components for the manufacturing equipment market and currently enjoys a 42% market share.Through an analysis of the share development path,the marketing department of the firm estimates that the firm should perform at a 95% level in product awareness,85% in product preference,80% in intentions to purchase,90% in product availability,and 75% in rate of purchase.
-Mini-Case Question.Clarion Inc.has focused its product-market strategies on large manufacturers,that have sales exceeding $100 million per year and that purchase large-scale,multi-million dollar equipment.However,research conducted by the marketing department identifies a fairly attractive market potential for Clarion manufacturing equipment among smaller manufacturers.Clarion Inc.produces a line of lower capacity manufacturing equipments,with a pricing strategy aimed at catering to the needs of the small manufacturers.In this example,Clarion Inc.uses a ________ strategy.

Accepted Answer

Clarion Inc. is entering a new market segment by producing a line of lower capacity manufacturing equipment aimed at catering to the needs of small manufacturers. This is a strategy of entering new-market segments.

Question 3

Ridgewell Inc.was a pioneer in the cleaning equipment market and sold their products exclusively through a direct marketing approach.However,after extensive market research,the firm realized that the majority of sales in this market occurred in retail stores.To improve its performance,Ridgewell Inc.began selling through specialty cleaning equipment retailers as well as multiple mass market cleaning equipment stores.Which of the following offensive strategies does this represent?

Accepted Answer

The answer of Ridgewell Inc.was a pioneer in the cleaning...

Question 4

Which of the following terms refers to businesses that emulate the dominant design and enter the market after letting another firm invest in developing the technology,establishing the design standard,and initiating market development?

Accepted Answer

Early followers refers to businesses that follow the pioneers or first-movers in entering the market after they have invested in developing the technology, establishing the design standard, and initiating market development.

Question 5

MINI-CASE
Clarion Inc.is a firm that produces components for the manufacturing equipment market and currently enjoys a 42% market share.Through an analysis of the share development path,the marketing department of the firm estimates that the firm should perform at a 95% level in product awareness,85% in product preference,80% in intentions to purchase,90% in product availability,and 75% in rate of purchase.
-Mini-Case Question.What is the share development index (SDI)of Clarion Inc.?

Accepted Answer

The answer of MINI-CASE
Clarion Inc.is a firm that produces components...

Question 6

When pioneers set a standard that other businesses entering the market must follow in order to compete,the standard is referred to as a ________.

Accepted Answer

The standard set by pioneers that others must follow is referred to as a dominant design. This term describes a widely accepted set of features and design choices that become the norm in a particular industry or market, making it difficult for newcomers to compete without adopting these same standards.

Question 7

What does it mean if the market development index is equal to 60?

Accepted Answer

Market development index is a measure of the potential of a market. If it is equal to 60, it means that there are many potential customers who have not yet entered the market, indicating that there is still room for growth and expansion.

Question 8

Name and describe the four fundamental offensive strategic market plans that can be used to increase a business's penetration of an existing market.

Accepted Answer

The answer of Name and describe the four fundamental offensive...

Question 9

The current market demand for flat-screen TVs is 4 million units per year.It is estimated that the market potential for this industry is expected to be 25 million units.What is the market development index for this industry?

Accepted Answer

The answer of The current market demand for flat-screen TVs...

Question 10

Which of the following statements is true regarding choosing offensive strategic market plans?

Accepted Answer

The answer of Which of the following statements is true...

Question 11

Aster Inc.is an American firm that manufactures motorcycles under the brand name AsterBikes.The firm conducts a market research to identify alternative sources of sales growth by leveraging its core competencies and competitive advantages.Based on its market research and analysis,the firm decides to enter the automobile industry,and introduces a line of Aster ComfortCars.In this example,Aster Inc.is using which of the following offensive strategies?

Accepted Answer

Aster Inc. is using the offensive strategy of entering related new markets by leveraging its core competencies and competitive advantages to introduce a line of Aster ComfortCars. This strategy involves expanding into new but related markets that share similarities with the firm's existing business.

Question 12

Costigan's Skates Inc. ,a firm that manufactures and exports skateboards,wants to grow financially,but decides that the market for skateboards is fairly saturated.The firm's management team decides to expand into manufacturing snowboards,as they believe the Costigan brand will have credibility in this area and the market will not be saturated.In this example,Costigan's Skates Inc.is using the ________ offensive strategy.

Accepted Answer

Costigan's Skates Inc. is entering a related new market by expanding into snowboards. They believe that their brand credibility in skateboards will transfer to snowboards, indicating that this is a related market expansion.

Question 13

Which of the following statements is true of a "new emerging market"?

Accepted Answer

A new emerging market refers to a market that is just beginning to develop and has the potential for future growth. Therefore, it is likely that the number of current customers is small. Option A is incorrect because high competition is not a defining characteristic of emerging markets. Option C is incorrect because emerging markets tend to have high market potential due to their potential for growth. Option D is incorrect because emerging markets, by definition, are not completely saturated. Option E is incorrect because emerging markets are often associated with higher levels of risk due to their uncertain and undeveloped nature.

Question 14

MINI-CASE
Clarion Inc.is a firm that produces components for the manufacturing equipment market and currently enjoys a 42% market share.Through an analysis of the share development path,the marketing department of the firm estimates that the firm should perform at a 95% level in product awareness,85% in product preference,80% in intentions to purchase,90% in product availability,and 75% in rate of purchase.
-Mini-Case Question.Calculate the share development index (SDI)for Clarion Inc.for an 8 percent reduction in market share.

Accepted Answer

The Share Development Index (SDI) is calculated by multiplying the percentages of product awareness, product preference, intentions to purchase, product availability, and rate of purchase together, and then multiplying by 100. For Clarion Inc., this calculation would be: 0.95 (product awareness) * 0.85 (product preference) * 0.80 (intentions to purchase) * 0.90 (product availability) * 0.75 (rate of purchase) * 100 = 45.9%. However, with an 8 percent reduction in market share, the SDI would adjust accordingly. The question seems to have a discrepancy in how it expects the 8 percent reduction to be applied, as the calculation provided does not directly factor in this reduction. Typically, the SDI is a static measure based on the factors provided, and market share reduction would be a separate consideration. Given the options and the calculation, the closest match (without directly applying an 8% reduction, as that step is not standard in calculating SDI) is 78, which does not mathematically align with the provided calculation method. It appears there may be a misunderstanding in the question setup or a mistake in the calculation explanation.

Question 15

Which of the following allows a business the potential to own the market until other competitors venture to enter?

Accepted Answer

The first-mover advantage allows a business to establish themselves as the leader in a market, making it difficult for other competitors to enter and gain market share. This advantage can result in brand loyalty and a strong customer base, preventing other competitors from gaining a foothold in the market.

Question 16

Shockwave Services is a mobile service providing company based in Chicago.In order to expand its market,the firm acquires a travel agency in Chicago that provides tourist packages at low prices.Which of the following offensive strategies is Shockwave Services pursuing?

Accepted Answer

Shockwave Services is entering an unrelated new market by acquiring a travel agency, which is not directly related to its core mobile service business.

Question 17

The maximum market demand for running shoes is 560 million and its worldwide market development index is 75.Calculate the current market demand for running shoes.

Accepted Answer

The answer of The maximum market demand for running shoes...

Question 18

Give three reasons why,at some point,every business needs to examine growth opportunities outside the markets it serves.Name and describe four fundamental offensive strategic market plans for entering new markets.

Accepted Answer

The answer of Give three reasons why,at some point,every business...

Question 19

A growth strategy to develop an untapped new market potential offers ________ and the ________.

Accepted Answer

Developing an untapped new market potential involves high risks as it requires a lot of investment in terms of resources, time, and funds. However, if the strategy is executed well, it has the potential to yield high returns.

Question 20

The current market demand for paper clips is 320 million and its market development index is 55.Calculate the approximate market potential for paper clips.

Accepted Answer

The answer of The current market demand for paper clips...

Quiz 12: Offensive Strategies