Marketing Management chapter 11 practice test

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Competitive Dynamics
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1

The ________ has the largest market share and usually shows the way to other firms in price changes, new-product introductions, distribution coverage, and promotional intensity.
A) market challenger
B) market entrant
C) market follower
D) market nicher
E) market leader

Page: 299

E

2

When the total market expands, the ________ usually gains the most.
A) market challenger
B) market leader
C) market follower
D) market nicher
E) market entrant

Page: 301

B

3

When a firm looks for new users in groups that might use the product but do not, the firm is using the ________ strategy.
A) new-market segment
B) market-penetration
C) geographical-expansion
D) product development
E) diversification

Page: 301

B

4

As the marketing manager of a company that manufactures floor tiles, Evans Smith is given a target to achieve 500 new customers by the end of summer. He decides to search the market for probable customers who might use the product but do not at present. Which of the following strategies is Evans pursuing to increase the market demand for his product?
A) market-penetration strategy
B) new-market segment strategy
C) geographical-expansion strategy
D) needs-assessment strategy
E) consolidation strategy

Page: 301

A

5

When firms look for new users in groups that have never used the product before, the firm is using the ________ strategy.
A) new-market segment
B) market-penetration
C) geographical-expansion
D) product development
E) diversification

Page: 301

A

6

When Starbucks introduced its Tazo Tea line to bring in new customers who had never gone to Starbucks because they don't drink coffee, Starbucks was employing a ________ strategy.
A) market-penetration
B) new-market segment
C) geographical-expansion
D) niche identification
E) blue-ocean

Page: 301

B

7

Trendz Inc. is a leading brand of fashion clothing and accessories based in Houston. After gaining a strong foothold in the U.S., the company wants to foray into foreign markets. The management at Trends knows that people residing in other countries are likely to have different tastes and preferences, so they may have to redesign some of their offerings. Which of the following strategies is Trendz using?
A) market-penetration strategy
B) outsourcing strategy
C) geographic-expansion strategy
D) product differentiation strategy
E) ethnocentric strategy

Page: 301

C

8

A market leader on the look out for more usage from existing customers should focus on increasing the frequency of consumption and ________.
A) decreasing the product price
B) the product line
C) the amount of consumption
D) decreasing production turnover time
E) diversifying into unrelated markets

Page: 301

C

9

Which of the following marketing strategies requires either identifying additional opportunities to use the brand in the same basic way or identifying completely new and different ways to use the brand?
A) increasing the amount of consumption
B) decreasing the level of consumption
C) increasing dedication to consumption
D) increasing product innovation
E) increasing frequency of consumption

Page: 302

E

10

When food product companies advertise recipes that use their branded products in entirely different ways, they are increasing the ________ of the brand.
A) amount of consumption
B) level of consumption
C) dedication to consumption
D) frequency of consumption
E) awareness consumption

Page: 302

D

11

Oliver, a company that produces different types of olive oil, launched a promotional campaign focusing on the alternative uses of olive oil. What strategy is the company implementing to expand its total market demand?
A) using the new-market segment strategy to attract new customers
B) improving the current level of product performance
C) advertising new and different applications of the brand
D) protecting its market share
E) using the market-penetration strategy to attract new customers

Page: 302

C

12

Clorox runs ads stressing the many benefits of its bleach, such as how it eliminates kitchen odors, in order to generate additional opportunities to use the brand in the same basic way. This is an attempt to ________.
A) increase the amount of consumption
B) increase the level of consumption
C) increase the perception of consumption
D) increase the frequency of consumption
E) increase the emotional implications of consumption

Page: 302

D

13

Which of the following is the most constructive response a market leader can make when defending its market share?
A) maintain basic cost control
B) innovate continuously
C) provide desired benefits
D) meet challengers with a swift response
E) provide expected benefits

Page: 302

B

14

To satisfy customers, a(n) ________ marketer finds a stated need and fills it.
A) creative
B) responsive
C) anticipative
D) laidback
E) inexperienced

Page: 302

B

15

A(n) ________ marketer looks ahead to needs customers may have in the near future.
A) laidback
B) creative
C) inexperienced
D) responsive
E) anticipative

Page: 302

E

16

A(n) ________ marketer discovers solutions customers did not ask for but to which they
enthusiastically respond.
A) laidback
B) responsive
C) inexperienced
D) creative
E) anticipative

Page: 302

D

17

________ marketers are not just market-driven, they are proactive market-driving firms.
A) Creative
B) Responsive
C) Inexperienced
D) Laidback
E) Anticipative

Page: 302

A

18

Sony is an unusual market leader. It gives its customers new products that they have never asked for (e.g., Walkmans, VCRs, video cameras, CDs). This makes Sony a(n) ________ firm.
A) market-driven
B) market-driving
C) operations-driven
D) vision-driven
E) virtually-driven

Page: 302

B

19

Which of the following is true about proactive marketing?
A) A company needs creative anticipation to see the writing on the wall.
B) Proactive companies create new offers to serve unmet and unknown consumer needs.
C) Proactive companies refrain from practicing uncertainty management.
D) A company needs responsive anticipation to devise innovative solutions.
E) Companies are winners when they are extremely risk-averse.

Page: 302-303

B

20

________ defense involves occupying the most desirable market space in the minds of the consumers and making the brand almost impregnable.
A) Position
B) Flank
C) Preemptive
D) Mobile
E) Contraction

Page: 303

A

21

A marketing manager has planned a strategy that will require the organization to erect outposts to protect its weak front-running brands. In this ________ defense, the outposts will be central to the organization's new competitive strategy.
A) position
B) flank
C) preemptive
D) counteroffensive
E) mobile

Page: 303

B

22

________ is an aggressive maneuver where the firm attacks first, perhaps with guerrilla action across the market and keeping everyone off balance.
A) Position defense
B) Flank defense
C) Contraction defense
D) Preemptive defense
E) Lateral defense

Page: 303

D

23

The defensive marketing strategy wherein a stream of new products are introduced by a firm and are announced in advance are referred to as ________ defense.
A) mobile
B) counteroffensive
C) preemptive
D) contraction
E) flank

Page: 303

C

24

If Microsoft announces plans for a new-product development, smaller firms may choose to concentrate their development efforts in other directions to avoid head-to-head competition. In this example, Microsoft is employing a ________ strategy.
A) preemptive defense
B) counteroffensive defense
C) mobile defense
D) flank defense
E) contraction defense

Page: 303

A

25

In a ________ defense strategy, the market leader can meet the attacker frontally and hit its flank, or launch a pincer movement so that it's forced to pull back to defend itself.
A) position
B) counteroffensive
C) preemptive
D) contraction
E) flank

Page: 303

B

26

After Olay entered and took over the Indian market with its anti-aging lotion, Ponds decided to defend its home turf by investing heavily in a similar product, but that which used only natural ingredients. This is an example of a ________.
A) position defense
B) flank defense
C) counteroffensive defense
D) contraction defense
E) mobile defense

Page: 303

C

27

In ________, the market leader stretches its domain over new territories that can serve as future centers for defense and offense.
A) counteroffensive defense
B) flank defense
C) contraction defense
D) mobile defense
E) position defense

Page: 303

D

28

Market broadening and market diversification are likely tactics employed in ________ strategies.
A) position defense
B) flank defense
C) preemptive defense
D) counteroffensive defense
E) mobile defense

Page: 303

E

29

When "petroleum" companies such as BP sought to recast themselves as "energy" companies, increasing their research into the oil, coal, nuclear, hydroelectric, and chemical industries, these companies were employing a ________ strategy.
A) preemptive defense
B) counteroffensive defense
C) mobile defense
D) flank defense
E) contraction defense

Page: 303

C

30

When large companies can no longer defend all their territory, they launch a ________ defense where they give up weaker markets and reassign resources to stronger ones.
A) contraction
B) preemptive
C) flank
D) mobile
E) position

Page: 304

A

31

In 2006, Sara Lee spun off products that accounted for a large percentage of the company's revenues, including its strong Hanes hosiery brand, so it could concentrate on its well-known food brands. In this example, Sara Lee is employing a ________ strategy.
A) preemptive defense
B) counteroffensive defense
C) mobile defense
D) flank defense
E) contraction defense

Page: 304

E

32

A firm that is willing to maintain its market share, and not attack the leader and other competitors in an aggressive bid for further market share, is known as a ________.
A) market challenger
B) market leader
C) market follower
D) market nicher
E) market entrant

Page: 305

C

33

For a market challenger, attacking ________ is a high risk but potentially high payoff strategy, which also allows it to distance itself from other challengers.
A) a firm of its own size
B) the market leader
C) a regional firm
D) an underfinanced firm
E) a poorly performing firm

Page: 305

B

34

In a pure ________ attack, the attacker matches its opponent's product, advertising, price, and distribution.
A) guerilla
B) bypass
C) encirclement
D) frontal
E) flank

Page: 306

D

35

Epic Inc., a firm that produces chairs for offices, uses comparative advertising to inform the consumers that its products offer the same features and quality as the competitor's. This is an example of a(n) ________ attack.
A) guerilla
B) frontal
C) encirclement
D) bypass
E) flank

Page: 306

B

36

The ________ can be used when the challenger spots areas where the opponent is underperforming.
A) encirclement attack
B) frontal attack
C) flank-geographic attack
D) backwards-flank attack
E) guerilla warfare

Page: 306

C

37

Pepsodent launched a new product that could whiten teeth, fight decay, and maintain fresh breath. Observing that Pepsodent did not focus on the dental sensitivity aspect, Colgate introduced a toothpaste which did all of the above and also protected sensitive teeth. This is an example of a(n) ________ attack.
A) frontal
B) flank
C) guerrilla
D) encirclement
E) bypass

Page: 306

B

38

A(n) ________ is another name for identifying shifts in market segments that are causing gaps to develop, then rushing in to fill the gaps and developing them into strong segments.
A) frontal attack strategy
B) flanking strategy
C) encircling strategy
D) counteroffensive strategy
E) bypass strategy

Page: 306

B

39

The ________ attack attempts to capture a significant share of the consumer market by launching a grand offensive on several fronts.
A) frontal
B) bypass
C) flank
D) encirclement
E) guerrilla

Page: 306

D

40

Sally Seabrook is an up-and-coming marketing manager for a large department store chain. Ms. Seabrook has distinguished herself with bold strategies such as launching attacks on her primary competitor from several fronts, including advertising, new store openings, and new distributor alliances. Which of the following market challenger attack strategies is Ms. Seabrook using to attack her competition?
A) frontal attack
B) bypass attack
C) guerrilla warfare
D) flank attack
E) encirclement attack

Page: 306

E

41

The ________ attack offers the firm an opportunity to diversify into unrelated products, into new geographical markets, and leapfrogging into new technologies.
A) bypass
B) flank
C) frontal
D) guerrilla
E) encirclement

Page: 306

A

42

Appy Juices, a company that manufactures bottled water, diversified into soft drinks before any of its opponents could launch a diversified product. This would be an example of a(n) ________ attack.
A) flank
B) bypass
C) guerrilla
D) encirclement
E) frontal

Page: 306

B

43

A marketing manager has decided to "leapfrog" competition by moving into cutting-edge technologies. This indirect approach to attacking competition can be characterized as ________.
A) flank attack
B) encirclement attack
C) bypass attack
D) guerrilla warfare
E) frontal attack

Page: 306

C

44

Selective price cuts, intense promotional blitzes, and occasional legal action are commonplace in the strategic design of a(n) ________.
A) frontal attack
B) flank attack
C) bypass attack
D) encirclement attack
E) guerilla warfare

Page: 306

E

45

In his article, "Innovative Imitation", Theodore Levitt argues that ________.
A) imitation is wrong and should be punished
B) product imitation might be as profitable as product innovation
C) innovation is not possible without substantial imitation
D) innovation cannot begin unless dissatisfaction with imitation occurs
E) imitation should be against the law because of the intellectual property decision involved

Page: 307

B

46

As a market follower strategy, the ________ duplicates the leader's product and packages and sells it on the black market or through disreputable dealers.
A) innovator
B) cloner
C) imitator
D) adapter
E) counterfeiter

Page: 307

E

47

Aron, a company manufacturing snack food and soft drinks, replicates its product taste and packaging from Lay's, a market leader in snack food industry. Later, it sells these imitated products on the black market. This is an example of ________.
A) cloning
B) imitating
C) counterfeiting
D) adapting
E) innovating

Page: 307

C

48

As a market follower strategy, the ________ emulates the leader's products, name, and packaging, with slight variations.
A) counterfeiter
B) cloner
C) imitator
D) adapter
E) innovator

Page: 307

B

49

Amani, a company that manufactures cloth for suits, strives to be equal to Armani in product design, brand name, and product packaging. This is an example of ________.
A) innovating
B) adapting
C) imitating
D) cloning
E) counterfeiting

Page: 307

D

50

Tasteeos, Fruit Rings, and Corn Flakes sell for nearly $1 a box less than leading cereal brands. Which market follower strategy is being employed by the cereal manufacturer?
A) counterfeiter
B) cloner
C) imitator
D) adapter
E) reverse innovator

Page: 307

B

51

The ________ copies some things from the leader but differentiates on packaging, advertising, pricing, or location.
A) innovate
B) adapt
C) cloner
D) imitator
E) counterfeiter

Page: 307

D

52

As a(n) ________, BurgerJacks, a fast food chain selling low-price burgers, has differentiated on location by setting up base in the Middle East, a market which the current leader of the industry McDonalds has yet not exploited.
A) cloner
B) imitator
C) counterfeiter
D) adapter
E) innovator

Page: 307

B

53

The TelePizza chain, which operates in Europe and Latin America, has copied Domino's service model but maintains differentiation in terms of location. TelePizza is an example of a(n) ________.
A) counterfeiter
B) adopter
C) cloner
D) imitator
E) adapter

Page: 307

D

54

As a market follower, the ________ may choose to sell to different markets, but often it grows into a future challenger.
A) imitator
B) adapter
C) cloner
D) counterfeiter
E) innovator

Page: 307

B

55

Redo is a market follower in the wristwatch industry. After noticing a shortfall in the market leader's product, Redo improves its product to suit consumer needs and becomes a challenger for the market leader. This is an example of ________.
A) counterfeiter
B) cloner
C) imitator
D) adapter
E) innovator

Page: 307

D

56

An alternative to being a market follower in a large market is to be a leader in a small market. This type of competitor is called a ________.
A) marketing king
B) market nicher
C) segment king
D) guerilla marketer
E) strategic clone

Page: 308

B

57

A firm that serves small market segments that are not being served by bigger firms is known as a ________.
A) market challenger
B) market leader
C) market follower
D) market nicher
E) market entrant

Page: 302

D

58

The market leader strategy ensures high sales volume, whereas the market nicher strategy allows firms to achieve ________.
A) high margin
B) low margin
C) high promotability
D) medium pricing
E) lower demand

Page: 308

A

59

Which of the following is true about market-nichers?
A) They are market followers in small markets.
B) They tend to have high manufacturing costs.
C) Their return on investment exceeds that in larger markets.
D) A nicher achieves high volume as against a mass marketer that achieves high margin.
E) They usually experience long-term losses.

Page: 309

C

60

The key idea in successful nichemanship is specialization. Which of the following specialists would most closely be identified with the characterization of being an organization that limits its selling to one customer?
A) end-user specialist
B) vertical-level specialist
C) customer-size specialist
D) specific-customer specialist
E) quality-price specialist

Page: 309

D

61

Newman Inc. is a company that manufactures saddles specifically for horses that race in derbies in the U.S. and the UK. Within this context the firm is exhibiting the role of a ________ specialist.
A) vertical-level
B) customer-size
C) product-line
D) job-shop
E) service

Page: 309

C

62

A market nicher is considered to be a(n) ________ specialist if the firm specializes in producing a certain type of product or product feature such as, Rent-a-Wreck, that rents only "beat-up" cars.
A) end-user
B) vertical-level
C) customer-size
D) channel
E) product-feature

Page: 309

E

63

A job-shop specialist ________.
A) sells only in a certain locality, region, or area of the world
B) customizes its products for individual customers
C) operates at the low- or high-quality ends of the market
D) offers one or more services not available from other firms
E) specializes in serving only one channel of distribution

Page: 309

B

64

A firm that is based in France designs jewelry and takes custom orders from around the world. They do not design more than 15 pieces of jewelry in a year and ensure that each design uses unique stones and is different from the other. Such nichemanship is an example of ________ specialist role.
A) customer-size
B) product
C) product-feature
D) job-shop
E) quality-price

Page: 309

D

65

When a bank takes loan requests over the phone and hand-delivers the money to the customer, it becomes a ________ specialist.
A) geographic
B) job-shop
C) quality-price
D) channel
E) service

Page: 309

E

66

________ is the period of slow sales growth and nonexistent profits.
A) Growth
B) Decline
C) Maturity
D) Introduction
E) Stagnancy

Page: 310

D

67

Campbell Soups is a newly established company that specializes in preparing healthy but tasty food for children under the age of 5. It is incurring huge productions costs, nonexistent profits, and slow sales growth. The company is in the ________ phase of its life cycle.
A) stagnancy
B) introduction
C) maturity
D) decline
E) growth

Page: 310

B

68

________ is a period of rapid market acceptance and substantial profit improvement.
A) Stagnancy
B) Introduction
C) Maturity
D) Decline
E) Growth

Page: 310

E

69

A dance school in the Bronx teaches professional hip-hop and salsa. It is experiencing an increase in student admissions, which is leading to substantial improvement in profits. The school is going through the ________ phase of its life cycle.
A) decline
B) stagnancy
C) growth
D) introduction
E) maturity

Page: 310

C

70

________ is a slowdown in sales growth because the product has achieved acceptance by most potential buyers.
A) Obsolescence
B) Introduction
C) Growth
D) Decline
E) Maturity

Page: 310

E

71

A music school in Boyles Height, LA, specializes in teaching the guitar and the violin. After a spurt in growth and a few successful years, the school is experiencing a slowdown in sales and stability in its profits due to an increase in competition. The school is in the ________ stage of its life cycle.
A) introduction
B) growth
C) decline
D) maturity
E) obsolescence

Page: 310

D

72

During the ________ stage of a product's life cycle, sales show a downward drift and profits erode.
A) introduction
B) growth
C) decline
D) obsolescence
E) maturity

Page: 310

C

73

After a couple of years of successful business, an experimental theatre company based in Aurora is unable to sell tickets for its theatre shows. They have been using profits from previous shows to run the business. The company is in the ________ phase of its life cycle.
A) maturity
B) obsolescence
C) introduction
D) growth
E) decline

Page: 310

E

74

According to Peter Golder and Gerald Tellis, a(n) ________ is the first to develop a working model of the product.
A) developer
B) creative pioneer
C) market pioneer
D) product pioneer
E) inventor

Page: 313

D

75

One of the ways to change the course of a brand is to modify the product. Under product modification, ________ adds size, weight, materials, supplements, and accessories that expand the product's performance, versatility, safety, or convenience.
A) feature improvement
B) quality improvement
C) style improvement
D) size improvement
E) technological improvement

Page: 314

A

76

An alternate way to increase sales volume is to expand the number of users. This can be done by ________.
A) having consumers use the product on more occasions
B) having consumers use more of the product on each occasion
C) having consumers use the product in new ways
D) remaining in the current market segment
E) attracting competitors' customers

Page: 315

E

77

An alternate way to increase sales volume is to increase the usage rate among users. This can be done by ________.
A) converting nonusers
B) having consumers use less of the product on each occasion
C) having consumers use the product on more occasions
D) attracting competitors' customers
E) entering new market segments

Page: 315

C

78

________ is a distribution strategy that can be effectively used during the growth stage of the product life cycle.
A) Building product awareness
B) Phasing out unprofitable outlets
C) Building selective distribution
D) Building intensive distribution
E) Stressing on brand differences

Page: 317

D

79

Which of the following strategies should be adopted by marketers during a recession?
A) increase investment on marketing existing products
B) focus on expanding the customer base and not on the retention of existing customers
C) focus primarily on price reductions and discounts
D) concentrate on communicating the brand value and product quality to consumers
E) stick to the budget allocations adopted during the preceding years

Page: 318-319

D

80

Benz & Frendz Corp., a manufacturer of high end consumer durables, experienced a sluggish sales growth in most of its product categories during three consecutive quarters of 2009. However, market analysis revealed that its competitors' sales had also slackened during this period. Analysts pointed out that when all firms are losing sales, it is extremely important to adopt strategies that are aimed at retaining customers. This led the firm to reduce operation costs while maintaining product quality. They also revamped their marketing strategy to focus on the values created by their products. Which of the following can be inferred from the strategies adopted by the firm?
A) The company was trying to protect its market share and continue to operate as a market leader.
B) The company was focusing on geographical expansion.
C) The company was aiming to capture a new market segment.
D) The company was marketing its products amidst an economic downturn.
E) The company was focusing on market penetration.

Page: 318-320

D

81

When the total market expands, the dominant firm usually gains the most.

Page: 301

true

82

The market leader should look for new customers or more usage from existing customers.

Page: 301

true

83

A market-penetration strategy is one where a company searches for new customers in a group that has never used a product before.

Page: 301

false

84

One way to increase the frequency of consumption of a product by consumers is by introducing it in larger package sizes.

Page: 302

false

85

Increasing amount of consumption requires identifying additional opportunities to use the brand in the same basic way.

Page: 302

false

86

A marketing program can communicate the appropriateness and advantages of using the brand.

Page: 302

true

87

The most constructive response to protecting market share is continuous innovation.

Page: 302

true

88

A responsive marketer looks ahead to needs customers may have in the near future.

Page: 302

false

89

An anticipative marketer finds a stated need and fills it.

Page: 302

false

90

A creative marketer discovers solutions customers did not ask for but to which they enthusiastically respond.

Page: 302

true

91

Position defense means occupying the most desirable market space in consumers' minds, making the brand almost impregnable.

Page: 303

true

92

In counteroffensive marketing, the market leader can meet the attacker frontally and hit its flank, or launch a pincer movement so that it is forced to pull back to defend itself.

Page: 303

true

93

In contraction defense, the leader stretches its domain over new territories through market broadening and market diversification.

Page: 303-304

false

94

Market diversification shifts the company's focus to unrelated industries.

Page: 304

true

95

Market challengers are companies that attack the leader and other competitors in an aggressive bid for further market share.

Page: 305

true

96

Attacking the market leader proves successful and beneficial only when the leader is not serving the market well.

Page: 305

true

97

A frontal attacking strategy is another name for identifying shifts that are causing gaps to develop, then rushing to fill the gaps.

Page: 306

false

98

Encirclement attempts to capture a wide slice of territory by launching a grand offensive on several fronts.

Page: 306

true

99

Guerrilla attacks consist of small, intermittent attacks, conventional and unconventional, including selective price cuts, intense promotional blitzes, and occasional legal action.

Page: 306

true

100

As a market-follower strategy, a counterfeiter emulates the leader's products, name, and packaging, with slight variations.

Page: 307

false

101

As a market-follower strategy, an imitator duplicates the leader's product and packages and sells it on the black market or through disreputable dealers.

Page: 307

false

102

As a market-follower strategy, an adapter takes the leader's products and adapts or improves them.

Page: 307

true

103

Firms with low shares of the total market can become highly profitable through smart niching.

Page: 308

true

104

An alternative to being a follower in a large market is to be a leader in a small market.

Page: 308

true

105

The nicher achieves high sales volume, whereas the mass marketer achieves high margin.

Page: 308

false

106

The growth stage of a product's life cycle is a period of rapid market acceptance and substantial profit improvement.

Page: 310

true

107

During the maturity stage of a product life cycle, profits stabilize or decline because of increased competition.

Page: 310

true

108

A fashion is a basic and distinctive mode of expression appearing in a field of human endeavor.

Page: 311

false

109

Fads are fashions that come quickly into public view, are adopted with great zeal, peak early, and decline very fast.

Page: 311

true

110

An inventor is the first to develop a working model while a product pioneer is the first to develop patents in a new-product category.

Page: 312

false

111

Price, distribution, and communication are the nonproduct elements that marketers modify to increase product sales.

Page: 314

true

112

An alternate way to increase sales volume is to expand the number of users by having them consume more of the product on each occasion.

Page: 315

false

113

An alternate way to increase sales volume is to expand the number of users by converting nonusers.

Page: 315

true

114

An alternate way to increase sales volume is to increase the usage rates among users by having consumers use the product in new ways.

Page: 315

true

115

An alternate way to increase sales volume is to increase the usage rates among users by entering new market segments.

Page: 315

false

116

The prime objective, during the introduction stage of a product life cycle, is to maximize market share.

Page: 317

false

117

The product strategy during the maturity stage of the product life cycle should be to build more intensive distribution.

Page: 317

false

118

During economic downturn, the potential value and profitability of some target consumers may change.

Page: 319

true

119

Heavy focus on price reductions and discounts during recession allow firms to improve long-term brand equity and price integrity.

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