Question 1

Using the BCG matrix, a company's brands or products are classified solely according to whether each has a strong or weak market share.

Accepted Answer

The BCG matrix classifies a company's brands or products based on both market share and market growth rate, not solely on market share.

Question 2

In the spirit of a product's life cycle, withdrawing marketing support can propel a brand into faster decline.

Accepted Answer

Withdrawing marketing support can lead to decreased consumer awareness and interest, accelerating the decline phase of a product's life cycle.

Question 3

Product development is the riskiest strategy in Ansoff's product-market growth matrix.

Accepted Answer

False

Question 4

To increase profitability, we have to increase sales volume or raise prices.

Accepted Answer

The answer of To increase profitability, we have to increase...

Question 5

Growing profit is the ultimate goal of any company.

Accepted Answer

Growing profit is a common goal for many companies as it can lead to increased financial stability, investment opportunities, and shareholder value.

Question 6

Cost leadership means distinguishing one's products as unique in the industry.

Accepted Answer

Cost leadership refers to a strategy where a company aims to become the lowest-cost producer in the industry, not necessarily focusing on product uniqueness.

Question 7

Cash cows don't need much marketing attention.

Accepted Answer

Cash cows are products with a high market share in a mature industry, generating steady revenue with little need for investment or marketing.

Question 8

Low prices and low margins necessitate the hassle of having to deal in large volume.

Accepted Answer

Low prices and low margins require businesses to sell in large volumes to achieve profitability, as the profit per unit is minimal.

Question 9

A brand with a relatively large share in a growing market is called a "star."

Accepted Answer

In the BCG matrix, a "star" is a business unit with a high market share in a fast-growing industry, indicating strong performance and potential for growth.

Question 10

The formula for sales revenue is Sales revenue = Sales volume + Price.

Accepted Answer

The correct formula for sales revenue is Sales revenue = Sales volume x Price.

Question 11

In the General Electric model, judgments about the brand's performance are implicit, not explicit.

Accepted Answer

The General Electric model explicitly evaluates a brand's performance based on factors like market attractiveness and business strength.

Question 12

A brand with small share in a market that is NOT growing is called a "dog."

Accepted Answer

In the BCG matrix, a "dog" refers to a business unit with a small market share in a mature, slow-growing industry.

Question 13

Brands referred to as "dogs" should be moved "north" to become cash cows.

Accepted Answer

In the BCG matrix, "dogs" are low-growth, low-market-share products. Moving them "north" would imply increasing market share, which is not typically feasible or advisable for "dogs." Instead, they are often divested or repositioned.

Question 14

It is a good idea to try new products and new customer bases at the same time.

Accepted Answer

Trying new products and new customer bases simultaneously can increase risk and complexity, making it harder to identify what works and what doesn't. It's often better to test one variable at a time.

Question 15

Customers usually believe that high prices are a cue to higher quality.

Accepted Answer

Research in consumer behavior indicates that many customers perceive higher prices as an indicator of better quality due to the association between cost and value.

Question 16

The formula for profit is Profit = (Sales volume × Price) + (Variable coasts × Fixed costs).

Accepted Answer

The correct formula for profit is Profit = (Sales volume × Price) - (Variable costs + Fixed costs).

Question 17

The four classes in the BCG matrix are a star, a dog, a question mark, and a cash cow.All of the classes are essentially equal.

Accepted Answer

The answer of The four classes in the BCG matrix...

Question 18

In the General Electric model, the dimensions that are measured are market strength and business attractiveness.

Accepted Answer

The General Electric model measures industry attractiveness and business unit strength, not market strength and business attractiveness.

Question 19

Arlin owns a firm that specializes in producing and marketing cosmetics and hair care products.Arlin wants to examine his portfolio.The BCG matrix is the strategic framework you should recommend to Arlin to evaluate his portfolio.

Accepted Answer

The BCG matrix is a strategic tool used to evaluate a company's product portfolio based on market growth and market share, making it suitable for Arlin's needs.

Question 20

Whereas the cost leadership and differentiation approaches are said to be broad, the focused strategy is narrower.

Accepted Answer

The focused strategy targets a specific market niche, unlike cost leadership and differentiation, which aim at a broader market.

Quiz 16: Marketing Strategy