Question 1

Which of the following customer groups represents the leading wave or edge of the mass market?

Accepted Answer

The answer of Which of the following customer groups represents...

Question 2

Which of the following statements is true of embryonic industries?

Accepted Answer

Embryonic industries are in the early stages of development and often face the challenge of educating customers who may not be familiar with the product or its benefits. They typically do not have well-developed distribution channels or high initial customer demand, and they may not enjoy the abundance of complementary products that more established industries do. While production costs may eventually decrease with economies of scale, this is not typically the case in the early stages of an embryonic industry.

Question 3

Hydralicious,a juice bar,has been looking to expand its business.The company has given a few entrepreneurs in different locations the license to operate under its name.The entrepreneurs have permission to use the company's reputation and the business model to run operations.The entrepreneurs will be charged a fee,but they will also get a percentage of the profits.Which of the following strategies is Hydralicious most likely to be using ?

Accepted Answer

The given business model is that of franchising, wherein the company (Hydralicious) allows entrepreneurs to operate under its name using its reputation and business model in exchange for a fee and a percentage of profits.

Question 4

In a bid to expand its business and gain cost advantages,Omega Inc.has established several merchandising outlets in different locations.All the outlets share a good network and are interconnected by information technology.The entire network of outlets operates in the industry as one large company.Which of the following strategies has Omega Inc.most likely used ?

Accepted Answer

The answer of In a bid to expand its business...

Question 5

Customers who have a practical interest in using a new technology in the future and who are willing to experiment and envision new uses for the technology are called:

Accepted Answer

The answer of Customers who have a practical interest in...

Question 6

Most embryonic industries arise from:

Accepted Answer

Embryonic industries typically arise from a technological breakthrough, which creates a new market for innovative products or services. Without the breakthrough, the industry would not exist. Product proliferation, lack of high entry barriers, chaining, and franchising may promote growth within an industry, but they do not necessarily create a new industry.

Question 7

___________ is a market growth factor that refers to the degree to which the results of using and enjoying a new product can be seen and appreciated by other people.

Accepted Answer

Observability refers to the extent to which the benefits of using a new product can be easily observed by others. This factor is particularly important for products that are conspicuous or that are frequently used in public, as they can serve as a symbol of the user's status or fashion sense. This can help drive demand for the product, as others may be influenced to purchase it in order to achieve a similar level of status or prestige.

Question 8

An industry moves from embryonic to growth stage when:

Accepted Answer

Ongoing technological progress often makes products easier to use and more accessible to consumers, leading to increased demand and growth in the industry.

Question 9

The first group of customers to enter the market for a new product are called:

Accepted Answer

The group of customers who enter the market first are called innovators. They are the ones who are willing to take risks and try out new products before they become mainstream.

Question 10

Which of the following factors of a particular product tends to accelerate customer demand for it?

Accepted Answer

High observability means that the benefits of the product are easily visible to potential customers, which tends to accelerate demand. Factors such as minimum relative advantage, high complexity, minimal value, and low trialability may all slow down or decrease demand for a product.

Question 11

A market growth factor that explains customers' perceptions of a new product as better at satisfying their needs than the product it replaces is called:

Accepted Answer

Relative advantage refers to the degree to which a new product is perceived as being better at satisfying customer needs than the product it replaces. This factor is a key driver of market growth, as customers are more likely to adopt a new product if they feel it provides significant benefits over existing options.

Question 12

In a declining industry,a company may utilize a harvest strategy and:

Accepted Answer

A harvest strategy involves extracting maximum profits from investments in a declining industry, rather than investing further in the business or expanding into new markets. Therefore, option B is the best choice. Options A, C, D, and E involve investing more resources and expanding, which is not consistent with a harvest strategy.

Question 13

To compete in the fragmented restaurant industry,Starbucks built,and now operates hundreds of restaurants across the United States and Canada.Which of the following strategies is Starbucks using ?

Accepted Answer

Starbucks is using the strategy of chaining to compete in the restaurant industry. This involves building and operating multiple locations of their restaurant in order to expand their reach and compete with other players in the market.

Question 14

A company uses _____ when it focuses on pockets of demand that are declining more slowly than the industry as a whole to maintain profitability.

Accepted Answer

The given situation describes a niche strategy, in which a company narrows its focus to a specific, profitable segment of the market that is declining more slowly than the industry overall. This allows the company to maintain profitability despite overall market trends. The other options (acquisition strategy, chaining, divestment strategy, and franchising) do not necessarily involve targeting specific pockets of demand in the way that a niche strategy does.

Question 15

Who among the following is most likely to fall under the category of laggards in the context of customer groups?

Accepted Answer

Laggards are the last to adopt a new product, and they only do so when it has become an absolute necessity. Phillip, who buys new products only when they become an absolute necessity, best fits this description. The other options all demonstrate some level of willingness or interest in trying new products, which does not align with the laggard category.

Question 16

Which of the following factors that affect market growth rates refers to the degree to which a new product is perceived as difficult to understand and use?

Accepted Answer

Complexity refers to the degree to which a new product is perceived as difficult to understand and use. The higher the perceived complexity, the slower the market growth rate is likely to be, as consumers may be hesitant to adopt a product that they find confusing or difficult to use.

Question 17

An embryonic industry is one that:

Accepted Answer

An embryonic industry is just beginning to develop and customer demand is initially limited. It is in the early stages of development and has not yet fully established itself in the market.

Question 18

One strategy used to consolidate fragmented industries is:

Accepted Answer

The answer of One strategy used to consolidate fragmented industries...

Question 19

The growth stage of an industry's life cycle is the:

Accepted Answer

The growth stage of an industry's life cycle is when companies try to establish themselves in the market by securing their grip over customers in existing market segments. This is the stage when demand is high, and companies invest heavily in marketing, production, and expansion.

Question 20

Factors leading to the slow growth of demand in embryonic industries include all of the following except the:

Accepted Answer

Customer passion for the products would actually lead to an increase in demand, not slow growth. The other factors listed could all contribute to slow growth in demand.

Quiz 6: Business Level Strategy and the Industry Environment