Question 1

A frontal attack is most likely to succeed when existing customers have strong brand preferences and loyalties.

Accepted Answer

A frontal attack is a direct and aggressive approach to entering a market or industry. However, if existing customers have strong brand preferences and loyalties, it can be difficult to persuade them to switch to a new brand or product. In such cases, a more subtle or alternative approach may be more effective.

Question 2

Which of the following advantages of a pioneer is best reflected in the idea that the pioneer's actions set standards for quality,price,and post-sale service which subsequent entrants must either meet or beat?
A)Economies of scale
B)High switching costs
C)Distribution advantage
D)Defining the rules of the game

Accepted Answer

Defining the rules of the game is the advantage best reflected in the statement. As a pioneer, the company establishes the standards for quality, price, and post-sale service, which later competitors must follow or improve upon to be successful in the market. This advantage is not related to economies of scale or distribution advantages, and although high switching costs may make it difficult for customers to switch to new competitors, it is not directly reflected in the statement.

Question 3

A relatively high price is appropriate for a skimming strategy to increase margins and revenues.

Accepted Answer

Skimming strategy involves setting a high price initially to maximize profit margins and generate revenue from early adopters. As demand from early adopters decreases, the price is gradually lowered to attract more price-sensitive customers. Therefore, a relatively high price is appropriate for a skimming strategy to increase margins and revenues.

Question 4

_____ describes a situation where the value of a good or service to a customer increases as greater numbers of people adopt the good or service.
A)Economies of scale
B)Vertical integration
C)Positive network effects
D)Economies of scope

Accepted Answer

Positive network effects refer to a situation where the value of a good or service increases for the user as more people use it. This is because with more users, there are more opportunities for interaction and collaboration, leading to increased benefits and value for each user. Examples include social media platforms, messaging apps, and online marketplaces.

Question 5

An encirclement strategy makes sense when the market is not fragmented and consists of consumers with homogenous needs.

Accepted Answer

An encirclement strategy is typically used in fragmented markets where there are diverse consumer needs and preferences. The goal is to create a product line that can meet the varying needs of different consumer segments and gain a competitive advantage by offering a wider range of options than competitors.

Question 6

Which of the following elements of marketing strategy is associated with having sufficient manufacturing capacity to pursue a mass-market strategy on a national basis?
A)Broad product line
B)High product quality
C)Large entry scale
D)Unique positioning

Accepted Answer

Large entry scale refers to a company's ability to enter the market on a large scale, typically through sufficient manufacturing capacity, which is necessary for pursuing a mass-market strategy on a national basis. Broad product line, high product quality, and unique positioning all contribute to a company's overall marketing strategy, but not necessarily to its ability to pursue a mass-market strategy on a national basis.

Question 7

Firms pursue niche penetration strategy to capture as many customers possible in the shortest time.

Accepted Answer

A niche penetration strategy focuses on capturing a specific segment of customers rather than trying to capture as many customers as possible in the shortest time. This strategy involves a deeper understanding of the needs and preferences of a particular group of customers and tailoring products or services to meet their specific needs. It is a targeted approach rather than a broad one.

Question 8

Exporting lowers the financial risk involved for the pioneer when entering an unfamiliar foreign market.

Accepted Answer

Exporting allows the pioneer to enter an unfamiliar foreign market without investing heavily in production facilities or marketing activities. Therefore, it lowers the financial risk involved for the pioneer.

Question 9

The market expansion strategy's primary objective is to maintain the large share of loyal customer groups who prefer the firm's initial product offering.

Accepted Answer

The primary objective of a market expansion strategy is to enter new markets or increase market share in existing markets, rather than focusing solely on maintaining a large share of loyal customer groups who prefer the firm's initial product offering.

Question 10

Share-gaining businesses typically develop and add more new products,line extensions,or product modifications to their line than share-losing businesses.

Accepted Answer

Share-gaining businesses are usually more innovative and proactive in their approach to product development, which involves introducing new products, line extensions, or modifications to existing products. This approach helps them to capture new customers and retain existing ones, thereby increasing their market share. Share-losing businesses, on the other hand, may lag behind in terms of innovation and fail to keep up with changing market trends, leading to a decline in their market share over time.

Question 11

Innovative products manufactured by a company for the first time to create an entirely different market for consumers are known as:
A)product improvements.
B)product line additions.
C)new product lines.
D)new-to-the-world products.

Accepted Answer

New-to-the-world products are innovative products that are created for the first time and they are entirely different from existing products in the market. These products carry a higher level of risk as they are unknown to consumers, however, they can also offer great potential for success and profitability for the company. Therefore, D is the best choice as it accurately describes the situation described in the question. Choices A, B, and C do not fully describe the unique characteristics of new-to-the-world products.

Question 12

A flank attack is appropriate when the market can be broken into two or more large segments

Accepted Answer

A flank attack involves targeting a specific segment of the market that is currently underserved or ignored by the main players. This strategy works best when the market can be divided into different segments, allowing the attacker to focus on a specific large segment rather than competing directly with established industry leaders.

Question 13

_____ refer to existing products that are targeted at new applications and new market segments.
A)Line extensions
B)Brand extensions
C)Innovations
D)Repositionings

Accepted Answer

Repositionings refer to the strategy of targeting existing products at new applications or new market segments, often to breathe new life into the product or to reach a broader audience.

Question 14

Which advantage to a pioneer is associated with the idea that the pioneer can gain a production advantage in terms of volume which might help it to lower its per-unit production costs at a faster rate than followers?
A)Distribution advantage
B)Economies of scale
C)First choice of market segments
D)High switching costs

Accepted Answer

Economies of scale refer to the benefits that come from increased production volume, which can lead to lower per-unit costs. As a pioneer, being able to gain a production advantage in terms of volume can help lower its per-unit production costs at a faster rate than followers, thereby giving it a competitive advantage in the market.

Question 15

Niche marketing firms are typically characterized by unlimited product engineering skills and resources.

Accepted Answer

Niche marketing firms typically specialize in a specific product or service and have limited resources and skills in other areas. They prioritize their expertise in a particular niche to provide high-quality and specialized products or services to their target market.

Question 16

A pioneer stands the best chance for long-term success in market-share leadership and profitability when:
A)its product line is narrow compared to direct competitors.
B)its marketing programs include relatively less advertising and promotional expenditures.
C)barriers to entry in the new product-market are low.
D)the firm has sufficient size,resources,and competencies

Accepted Answer

A pioneer in a new product-market needs to have sufficient size, resources, and competencies to establish a strong market presence and sustain competitive advantage. This includes having the ability to invest in research and development, marketing, distribution, and customer service to build a loyal customer base. Additionally, if barriers to entry are low, competitors are likely to enter the market quickly, making it crucial for the pioneer to have the necessary resources to fend off competition and maintain market leadership. A narrow product line and lower advertising expenses may not necessarily lead to long-term success in this context.

Question 17

Which of the following is NOT an advantage available to pioneers in product-markets?
A)Economies of scale and experience
B)High switching costs for early adopters
C)Distribution advantage
D)Minimum product acceptance risk

Accepted Answer

Pioneers in product-markets often face significant product acceptance risk as they are the first to introduce a new product or concept to the market, making it uncertain how well it will be received by consumers.

Question 18

The most basic defensive strategy is to continually strengthen a strongly held current position to build an impregnable fortress capable of repelling attacks by current or future competitors.

Accepted Answer

The statement is true as strengthening a current position can help a company create a sustainable competitive advantage and deter competition.

Question 19

A pioneer firm is more capable than a follower in taking advantage of:
A)latest technology in the market.
B)early positioning mistakes.
C)early product mistakes.
D)choice of segments and positions.

Accepted Answer

A pioneer firm has the advantage of choosing the most favorable segments and positioning themselves accordingly, giving them an edge over their competitors. It allows them to establish a strong presence in the market and build a loyal customer base. However, being the first-mover also involves taking risks and making mistakes while introducing a new product or technology. If a pioneer firm manages to overcome these challenges, they can gain a significant advantage over their followers. Therefore, the choice of segments and positions is crucial for a pioneer firm to take advantage of.

Question 20

HCB Computers is a software consulting firm.The company decides to launch a GSM based Smartphone,the first hardware product by the company,to capitalize on the increasing demand for smartphones.This is an example of a(n):
A)introducing a new product line.
B)addition to existing product line.
C)new-to-the world product.
D)improvement of the existing product.

Accepted Answer

Introducing a new product line refers to launching a completely new product category that the company has never sold before. In this scenario, HCB Computers has never sold smartphones before, hence it is a new product line.

Quiz 15: Strategies for New and Growing Markets

A frontal attack is most likely to succeed when existing customers have strong brand preferences and loyalties.

Which of the following advantages of a pioneer is best reflected in the idea that the pioneer's actions set standards for quality,price,and post-sale service which subsequent entrants must either meet or beat?

A relatively high price is appropriate for a skimming strategy to increase margins and revenues.

_____ describes a situation where the value of a good or service to a customer increases as greater numbers of people adopt the good or service.

An encirclement strategy makes sense when the market is not fragmented and consists of consumers with homogenous needs.

Which of the following elements of marketing strategy is associated with having sufficient manufacturing capacity to pursue a mass-market strategy on a national basis?

Firms pursue niche penetration strategy to capture as many customers possible in the shortest time.

Exporting lowers the financial risk involved for the pioneer when entering an unfamiliar foreign market.

The market expansion strategy's primary objective is to maintain the large share of loyal customer groups who prefer the firm's initial product offering.

Share-gaining businesses typically develop and add more new products,line extensions,or product modifications to their line than share-losing businesses.

Innovative products manufactured by a company for the first time to create an entirely different market for consumers are known as:

A flank attack is appropriate when the market can be broken into two or more large segments

_____ refer to existing products that are targeted at new applications and new market segments.

Which advantage to a pioneer is associated with the idea that the pioneer can gain a production advantage in terms of volume which might help it to lower its per-unit production costs at a faster rate than followers?

Niche marketing firms are typically characterized by unlimited product engineering skills and resources.

A pioneer stands the best chance for long-term success in market-share leadership and profitability when:

Which of the following is NOT an advantage available to pioneers in product-markets?

The most basic defensive strategy is to continually strengthen a strongly held current position to build an impregnable fortress capable of repelling attacks by current or future competitors.

A pioneer firm is more capable than a follower in taking advantage of:

HCB Computers is a software consulting firm.The company decides to launch a GSM based Smartphone,the first hardware product by the company,to capitalize on the increasing demand for smartphones.This is an example of a(n) :