Question 1

Scenario 3-4
Price Chopper is a no-frills grocery chain. It sells grocery staples right out of crates and boxes with emphasis on low-priced, private-label brands. The chain targets bargain hunters who are willing to rent a cart and bag their own groceries.
-Refer to the scenario. Compared to the other grocery stores, Price Chopper has which of the following?

Accepted Answer

Price Chopper's emphasis on low-priced, private-label brands indicates a cost competitive advantage strategy. This strategy focuses on reducing costs to offer lower prices to customers.

Question 2

Procter & Gamble has a website, www.pg.ca, which is designed to help customers with product questions. While at the website, customers can request free samples of Olay Radiance, Pert Plus, and Folgers Latte, all new P&G products. This is an example of how a company can implement which of the following strategies?

Accepted Answer

This strategy is called product development, which involves creating new products or modifying existing products for a target market. In this case, P&G is offering free samples of new products like Olay Radiance, Pert Plus, and Folgers Latte to its customers, which is an example of product development.

Question 3

Which of the following is defined as the collection and interpretation of information about forces, events, and relationships that may affect the organization?

Accepted Answer

Environmental scanning is defined as the process of collecting and interpreting information about external forces, events, and relationships that may affect the organization. It helps the organization to identify opportunities and threats in the market and adapt to changes in its environment. Market sampling, internal audit, and opportunity analysis are different processes that focus on other aspects of the organization's operations.

Question 4

Which of the following is a strategy of increasing market share for present products in existing markets?

Accepted Answer

Market penetration is the strategy of increasing market share for present products in existing markets by increasing sales to current customers or by attracting new customers without changing the product. This can be achieved by increasing marketing activities, offering promotions, or by lowering prices. Product development (B) is the strategy of creating new products for existing markets, market development (C) is the strategy of selling existing products in new markets and product penetration (D) is not a recognized marketing strategy.

Question 5

Knorr is a manufacturer of soup, dip, and gravy mixes. It printed on-package recipes, gave out coupons to existing customers, and created a recipe booklet that could be ordered with three UPC codes from three different Knorr products. All of these activities are representative of which type of strategy?

Accepted Answer

The activities described, such as on-package recipes and coupons, are examples of market penetration strategies. These aim to increase sales to existing customers by promoting the product and encouraging repeat purchases. The recipe booklet promotion also falls under this category as it requires customers to purchase multiple Knorr products, thereby increasing sales and penetration within their existing market.

Question 6

Clay Market began as a retailer of terracotta pots and garden figures imported from Turkey and Mexico. It has since added Turkish rugs and fabrics, leather-trimmed purses, and a line of women's clothes for its customers. This activity is indicative of which of the following strategies?

Accepted Answer

The answer of Clay Market began as a retailer of...

Question 7

What could Zipcar, a company that rents cars by the hour, do through the use of environmental scanning?

Accepted Answer

Environmental scanning would allow Zipcar to monitor trends and changes in the market for short-term car rentals, helping the company better understand its customers and competitors and make strategic decisions accordingly.

Question 8

Which of the following types of analyses show costs declining at a predictable rate as experience with a product increases?

Accepted Answer

Experience curves, also known as learning curves, demonstrate the decline in the average cost of production as experience with a product increases. This occurs due to factors such as improved efficiency in production, better utilization of resources, and increased knowledge of the product. The experience curve concept was first introduced by the Boston Consulting Group in the 1960s, and it has been widely used in strategic planning and cost analysis ever since.

Question 9

A customer entered the Hornady store, which sells no chalk pool cues, a salesperson approached her and said, "Hornady pool cues are the cues you ought to buy. They are the most uniform in size and shape, and they are made of pure wood. Our cue is used by the Billiards World Champion." What was the salesperson describing?

Accepted Answer

The salesperson is describing Hornady's competitive advantage by emphasizing the uniformity in size and shape of their cues, the use of pure wood, and the fact that their cue is used by the Billiards World Champion.

Question 10

What is a strategy that creates new products for present markets?

Accepted Answer

Product development is a strategy that involves introducing new products to existing markets. This can be done by improving upon existing products, creating complementary products, or expanding the product line. It allows the company to leverage their existing customer base and market knowledge to introduce new products and increase revenue.

Question 11

There are many different kinds of cheese. According to its ads, only Jarlsberg Lite has 50 percent less fat, 60 percent less cholesterol, and 100 percent of the taste of other kinds of cheese. What does this advertising statement describe?

Accepted Answer

The advertising statement is describing Jarlsberg Lite's competitive advantage over other kinds of cheese, highlighting its unique benefits of having less fat and cholesterol while still retaining the taste.

Question 12

Although the Virgin Group originally started off in the publishing industry, it has since moved in to various other markets including space, cellular, and cola. The Virgin Group regularly uses which strategy?

Accepted Answer

The Virgin Group's strategy of moving into various industries such as space, cellular, and cola indicates diversification, which involves expanding a company's product or service offering into new markets or industries.

Question 13

Research has shown that young people below the age of 15 do not use the familiar red ketchup as much as older individuals. In 2000, Heinz developed, blue-, purple- and green-coloured ketchup to capture this market. It is not really a new product-just an attempt to reach a new target market. Which type of strategy does this example illustrate?

Accepted Answer

This example illustrates a market development strategy, where Heinz is trying to capture a new target market (young people below the age of 15) by offering the same product (ketchup) in different colors (blue, purple, and green) rather than changing the product itself or creating a completely new product.

Question 14

Scenario 3-3
Skoda is a carmaker in the Czech Republic. The auto manufacturer is launching a marketing drive designed to ultimately sell one million Skoda vehicles a year. It has identified the main growth markets for automobiles as China, Russia, and India and has plans to build production plants in each of those countries.
-Refer to the scenario. Which strategy would be used to attract new car customers?

Accepted Answer

Market development strategy would be used to attract new car customers. Skoda is targeting new growth markets in China, Russia, and India where it intends to build production plants. This strategy involves expanding the market for existing products in new geographic areas.

Question 15

Scenario 3-4
Price Chopper is a no-frills grocery chain. It sells grocery staples right out of crates and boxes with emphasis on low-priced, private-label brands. The chain targets bargain hunters who are willing to rent a cart and bag their own groceries.
-Refer to the scenario. What does Price Chopper use to create its competitive advantage?

Accepted Answer

Price Chopper creates its competitive advantage by offering no-frills goods and services at lower prices to attract bargain hunters who are willing to rent a cart and bag their own groceries. This strategy enables Price Chopper to offer low-priced, private-label brands and save on costs associated with fancy displays or premium services that other grocery chains may offer.

Question 16

Scenario 3-3
Skoda is a carmaker in the Czech Republic. The auto manufacturer is launching a marketing drive designed to ultimately sell one million Skoda vehicles a year. It has identified the main growth markets for automobiles as China, Russia, and India and has plans to build production plants in each of those countries.
-Refer to the scenario. Skoda will be well into the implementation stage when the plant in Shanghai starts producing cars in 2015. Which term best describes how Skoda intends to reach its goals?

Accepted Answer

Skoda's identification of growth markets, plan to build production plants in each of these countries, and goal of selling one million vehicles a year indicates a long-term, proactive approach to achieving success, which is characteristic of strategic planning.

Question 17

How did Revlon identify the fact that its brand names (Revlon, Almay, and Flex) had developed a poor image with both its customers and its retailers?

Accepted Answer

Environmental scanning involves the collection and analysis of information about external factors that can impact an organization's performance. Revlon likely used this method to gather insights from the market, including customer and retailer perceptions, which revealed the poor image of its brands.

Question 18

Scenario 3-3
Skoda is a carmaker in the Czech Republic. The auto manufacturer is launching a marketing drive designed to ultimately sell one million Skoda vehicles a year. It has identified the main growth markets for automobiles as China, Russia, and India and has plans to build production plants in each of those countries.
-Refer to the scenario. What has Skoda used to identify the main growth markets for automobiles as China, Russia, and India and to develop plans to build production plants in each of those countries?

Accepted Answer

Skoda has used environmental scanning to identify the main growth markets for automobiles as China, Russia, and India and has developed plans to build production plants in each of those countries. Environmental scanning involves analyzing and monitoring external factors such as economic, social, cultural, legal, and technological trends to identify opportunities and threats in the market.

Question 19

American Express used to offer the Cobalt card, a preloaded credit card, to 13- to 22-year-olds looking to make online purchases. While American Express had previously supplied credit cards only to many adults, this was a market that was not being served. Which type of strategy is the Cobalt card program an example of?

Accepted Answer

The Cobalt card program is an example of market development because American Express is introducing its existing product (credit cards) to a new market segment (13- to 22-year-olds) that was previously not being served.

Question 20

Which of the following environmental forces is least likely to impact the marketing decisions of an Ontario fruit grower with both orchards and a packaging/shipping facility?

Accepted Answer

The number of employees of a British Columbia fruit grower is unlikely to have a significant impact on the marketing decisions of an Ontario fruit grower with both orchards and a packaging/shipping facility. The other three options are more likely to affect marketing decisions, as they relate to consumer behavior, competition, and government regulations.

Quiz 3: Strategic Planning for Competitive Advantage