Question 1

A diversification strategy entails increasing sales by introducing new products into new markets.

Accepted Answer

A diversification strategy involves expanding a company's product line and entering new markets in order to increase sales and profitability. This can include developing new products for existing markets or entering entirely new markets with existing or new products.

Question 2

A competitive advantage is some unique aspect of a firm's offering,or of the firm itself,that causes target customers to patronize the firm rather than its competition.

Accepted Answer

A competitive advantage is defined as a unique aspect of a firm's offering or the firm itself that distinguishes it from competitors and attracts customers to choose it over others.

Question 3

Niche competitive advantages are quite common.

Accepted Answer

The text lists several examples of how companies have created niche competitive advantages.

Question 4

A firm's mission statement should answer the question,"What products do we produce best?"

Accepted Answer

Mission statements should not focus on specific product offerings but on the market or markets served.

Question 5

The portfolio matrix is a tool for allocating resources among products or strategic business units on the basis of relative market share and degree of innovation.

Accepted Answer

The portfolio matrix is based on relative market share and market growth rate.

Question 6

Berkshire Hathaway Inc.,a large property insurance company,owns a large chain of jewelry stores and has recently purchased Russell Corporation,a manufacturer of sporting goods.Berkshire Hathaway uses a market penetration strategy.

Accepted Answer

Berkshire Hathaway uses a diversification strategy.

Question 7

A production costs analysis could be a part of a company's SWOT analysis.

Accepted Answer

A production costs analysis can provide insights into a company's strengths (e.g. efficiency in production processes), weaknesses (e.g. high overhead costs), opportunities (e.g. potential cost savings through process improvements), and threats (e.g. competition with lower production costs). Therefore, it can be included as a part of a company's SWOT analysis.

Question 8

Marketing strategy involves the activities of selecting and describing one or more target markets and developing and maintaining a marketing mix that will produce mutually satisfying exchanges with target markets.

Accepted Answer

This statement accurately describes the definition of marketing strategy.

Question 9

The Home Depot's purchase of Hughes Supply Company allows it to better meet the needs of its current business customers.This is an example of product development.

Accepted Answer

The acquisition of Hughes Supply Company allowed The Home Depot to expand its product offerings and better cater to the needs of its existing business customers, which is an example of product development.

Question 10

The development of a target market strategy begins with a marketing audit.

Accepted Answer

The development of a target market strategy begins with a market opportunity analysis (MOA).

Question 11

The manufacturer of Macho brand martial arts products was implementing a strategic plan when it sponsored a local karate tournament for teenagers.

Accepted Answer

Such a short-range decision is typically a tactical plan or operating decision,not a strategic plan.

Question 12

When the Internet auction company eBay opened a version of the company called eBay France for the French market,it was an example of market penetration.

Accepted Answer

Market penetration is the strategy of selling more to the existing customers.This is an example of a market development strategy,which is attracting new customers to existing products.

Question 13

Environmental scanning entails the collection and analysis of information about factors that may affect the organization as well as the identification of market opportunities and threats.

Accepted Answer

Environmental scanning is the process of gathering and evaluating information about the external environment to identify opportunities and threats that could impact an organization.

Question 14

The company's objective is to increase sales next year.This is an example of a well-stated objective.

Accepted Answer

This objective is not specific or compared to a benchmark.

Question 15

To be useful,marketing objectives should be realistic,measurable,time specific,and based on sales.

Accepted Answer

Useful marketing objectives should be realistic,measurable,time specific,and compared to a benchmark.They do not have to be based on sales.

Question 16

The marketing plan is a written document that acts as a guidebook of marketing activities for the marketing manager.

Accepted Answer

The marketing plan is a written document that serves as a roadmap for the marketing activities of a company. It outlines the goals, strategies, tactics, and budget for a specific period, typically a year. The marketing manager uses this plan to coordinate and manage the marketing efforts and ensure that they are aligned with the overall business objectives.

Question 17

Developing a cost competitive advantage can enable a firm to deliver superior customer value.

Accepted Answer

Developing a cost competitive advantage means that a firm is producing goods or services at a lower cost than its competitors. This can allow the firm to offer lower prices to customers or to invest in improving other aspects of the customer experience, such as product quality or customer service. As a result, the firm can deliver superior customer value compared to competitors who do not have a cost competitive advantage.

Question 18

When a florist shop begins to sell burial caskets to its customers,it is engaged in product development.

Accepted Answer

Product development is the offering of new products to current markets.

Question 19

A market penetration strategy entails the creation of new products for current customers.

Accepted Answer

This is an example of product development strategy.A market penetration strategy in one that tries to increase market share among existing customers.

Question 20

As marketers gain more experience in marketing a product,costs tend to decrease,which is an example of the maturity effect.

Accepted Answer

This is an example of the experience curve,which means costs decline at a predictable rate as experience with a product increases.

Quiz 3: Strategic Planning for Competitive Advantage