Question 1

The price component of a marketing mix is:

Accepted Answer

Pricing strategies can be used as a competitive weapon to gain market share or to maintain a competitive advantage. Companies can strategically set prices to either undercut competitors or highlight the unique value proposition of their products.

Answer: B 
 Price can be used as a basis to differentiate a product from its competitors. Setting prices lower or higher than competitors can send a message to consumers about the quality or uniqueness of a product.

Answer: C 
 Price is one of the four Ps of the marketing mix, which includes product, price, promotion, and place. These four elements must be considered together when developing a marketing strategy, but price is often considered the starting point because it determines how much revenue will be generated.

Answer: D 
 Price is actually one of the most flexible elements of the marketing mix. Companies can adjust prices for different markets, customer segments, or seasons. They can also use variable pricing strategies such as discounts or promotional pricing to stimulate sales.

Question 2

A product/service differentiation competitive advantage can be achieved by:

Accepted Answer

Having a strong dealer network provides a competitive advantage by ensuring that the product or service is widely available and easily accessible to customers. This can give a company an edge over its competitors who may not have such a strong distribution network. The other options do not necessarily relate to product/service differentiation and may not provide a competitive advantage.

Question 3

Unlike a product/service differentiation competitive strategy, a niche strategy:

Accepted Answer

A niche strategy is a focused approach where a company targets a specific segment of the market with unique needs or preferences. It is often used by small companies with limited resources as they can't compete with bigger players on a broader scale. By focusing on a particular niche, they can develop a differentiated product/service that caters to the specific needs of that target market. Therefore, option A is the best answer. Option B is incorrect as a niche strategy selects a small segment of the market, which may have higher growth potential. Option C pertains to a low-cost strategy aimed at achieving economies of scale, which is different from a niche strategy. Option D refers to a stripped-down product or service with fewer features, which is not an aspect of a niche strategy.

Question 4

Fourlotts Inc. is a renowned technological firm. It controls many strategic business units (SBUs). In this case, each SBU:

Accepted Answer

Each SBU in Fourlotts Inc. has its own return on investment, indicating that the performance and success of each unit are measured and evaluated separately. This allows for a better analysis of each SBU's performance and helps in making informed decisions regarding investments and resource allocation. The other options may or may not be true, but they cannot be inferred from the given statement.

Question 5

Magnira Inc. plans to implement a market penetration strategy to increase its market share. According to Ansoff's strategic opportunity matrix, which of the following scenarios is most likely to happen?

Accepted Answer

According to Ansoff's strategic opportunity matrix, the market penetration strategy focuses on increasing market share among existing customers, through methods such as marketing campaigns, sales promotions, and improving product quality. Thus, choice B is the best fit for Magnira Inc.'s plan to implement a market penetration strategy. Choices A, C, and D relate to other strategies such as market development, product development, and diversification, respectively.

Question 6

_____ is the strategy of preserving market share so that an organization can take advantage of very positive cash flow.

Accepted Answer

Holding is the strategy used to preserve market share, allowing an organization to maintain its position and benefit from positive cash flow.

Question 7

Unlike a cost competitive advantage, a sustainable competitive advantage:

Accepted Answer

A sustainable competitive advantage cannot be easily replicated by the competition, making it difficult for them to catch up or surpass the advantage held by a certain company. It could be a result of a unique technology, strong brand loyalty, patents, or other factors that make it challenging for competitors to imitate the advantage.

Question 8

In the context of the Boston Consulting Group's (BCG's) portfolio matrix, a _____ is a strategic business unit that generates more cash than it needs to maintain its market share.

Accepted Answer

A cash cow is a strategic business unit that generates more cash than it needs to maintain its market share. This means that it has a high market share in a low-growth market, resulting in a steady flow of cash that can be used to support other business units.

Question 9

MaxNutri Inc. sells cookies and nutrition bars. The marketers at MaxNutri Inc. are trying to come up with new and attractive packaging designs for its cookies. In this scenario, MaxNutri Inc. is working on its _____.

Accepted Answer

MaxNutri Inc. is working on its product strategy by focusing on the packaging design for its cookies, with the goal of making them more attractive to consumers. Purchase strategy pertains to how a company acquires the materials needed for production. Distribution strategy pertains to how a company gets its products to its customers. Advertising strategy pertains to how a company promotes its products to potential customers.

Question 10

Which of the following statements is true of a marketing audit?

Accepted Answer

A marketing audit should be carried out on a regular schedule to evaluate the effectiveness of an organization's marketing strategies and identify areas for improvement. It is not normally conducted by an outside party, as internal stakeholders would have greater knowledge of the organization's operations. It should cover all aspects of an organization's marketing efforts and not just focus on trouble spots. While a marketing audit can inform the development of a marketing plan, it is not a device to implement it.

Question 11

Which of the following statements is true of effective strategic planning?

Accepted Answer

Effective strategic planning involves challenging assumptions about the firm and the environment to facilitate better decision making. It also requires aligning the organization's resources with its goals and objectives. Subordinates should not coerce management into accepting their demands, and trial and error should not be the basis for sound strategic planning. Similarly, companies must continue to establish new strategies to improve productivity and overall performance.

Question 12

In the context of the portfolio matrix, which of the following statements is true of dogs?

Accepted Answer

Dogs are products or services with low market share in a low growth market, which means they are not generating a lot of revenue and are not likely to do so in the future. Companies typically use marketing strategies such as harvesting (reducing investment in the product or service) or divesting (selling or closing down the product or service) for dogs. The main goal for dogs is to minimize losses rather than increase profits. The protection of existing market shares is not necessary since they are already low, and dogs do not have a dominant market share in any market. Strong financial funding is unlikely to escalate the success of a dog product or service since there is little potential for growth.

Question 13

Revel Inc., a cell phone manufacturer, decides to launch its new range of smartphones on the company's official Web site so that its logistics issues can be solved. With this modification, its customers can now buy the smartphones even if they are not sold in any of the stores in their locality. In this case, Revel Inc. focuses on the _____ element of the marketing mix.

Accepted Answer

Revel Inc. is focusing on the distribution element of the marketing mix by selling its smartphones through its official website, which allows customers to purchase the product even if it is not available in local stores.

Question 14

Nessca Inc. is a pharmaceutical company. It follows a target market strategy because its products are designed to suit the needs of a group of people with similar characteristics. In this case, which of the following market segments can be targeted by Nessca Inc.?

Accepted Answer

Nessca Inc. is a pharmaceutical company, and its products are designed to suit the needs of a group of people with similar characteristics. Among the given options, targeting a group of individuals who are diabetic is the most appropriate market segment for Nessca Inc. This is because the company can focus its efforts on developing and marketing pharmaceutical products that cater to the needs of diabetic individuals. The other options, such as targeting individuals who work in the same organization, working professionals, or individuals who reside in the same residential area, do not lend themselves to a clear segmentation strategy for Nessca Inc.

Question 15

In the context of the innovation matrix, _____ are decisions designed to take company strengths into new markets.

Accepted Answer

Adjacent innovations are decisions that focus on leveraging the company's strengths in new markets. These innovations involve introducing new products or services that can be sold to existing customers or to new markets. This type of innovation involves some degree of risk, as the company may not have experience in the new market or may face competition from established players. However, it can also offer significant rewards if successful, as it can create new revenue streams and diversify the company's portfolio.

Question 16

Which of the following should be the main focus of marketers in accordance with distribution strategies?

Accepted Answer

The main focus of marketers in accordance with distribution strategies should be the physical locations of products. This involves determining the best channels (e.g. wholesalers, retailers, online marketplaces) through which to distribute the products and identifying the most effective distribution methods (e.g. direct or indirect). By focusing on the physical locations of products, marketers can ensure that their target audience can easily access their products and make purchase decisions.

Question 17

Synergy Corp., a large seller of energy-efficient light bulbs, uses extensive promotional strategies to stimulate sales. The marketers at Synergy Corp. have noticed that a competitor is doing well and is steadily gaining a large market share. They want to counter the competitor immediately by increasing the sales of Synergy Corp.'s bulbs. In this case, which of the following steps is the quickest step that the marketers at Synergy can take to stimulate the sales of its products?

Accepted Answer

Changing the pricing strategy is the quickest step that the marketers at Synergy can take to stimulate the sales of its products. By reducing the price of the bulbs, Synergy Corp. can make its product more attractive to customers than the competitor's product, which will help to increase sales quickly. Creating complex production techniques, entering into new supplier contracts, or adopting a divesting strategy are not relevant in this specific situation and may take longer to implement.

Question 18

_____ is the process of anticipating future events and determining strategies to achieve organizational objectives in the future.

Accepted Answer

Planning is the process by which organizations anticipate future events and determine strategies to achieve their objectives in the future. Divesting involves selling or disposing of a business unit or asset, harvesting involves maximizing cash flows by reducing investments, and holding refers to retaining ownership of an asset without further investment. None of these options involve the process of anticipating future events and determining strategies, which is the essence of planning.

Question 19

Which of the following is an element of a marketing mix?

Accepted Answer

Pricing strategies are a key element of the marketing mix, which also includes product, place, and promotion. Divestment strategies, investment strategies, and trade restraint strategies are not typically considered part of the marketing mix.

Question 20

In the context of marketing planning, implementation involves:

Accepted Answer

Implementation refers to the execution of the marketing plan and involves allocating resources such as budget, manpower, and time to implement the marketing strategies and tactics defined in the plan. Identifying market segments, defining the business mission, and assessing internal capabilities are part of the marketing planning process, not implementation.

Quiz 2: Strategic Planning for Competitive Advantage