Marketing Management: Chapter 12 Addressing Competition and Driving Growth Flashcards


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1

WD40 offers a Smart Straw version of its popular multipurpose lubricant with a built-in straw that pops up for use. This is an example of which of the following main strategies for growing the core of the business?

A) Make the core of the brand as distinctive as possible.

B) Drive distribution through both existing and new channels.

C) Offer the core product in new formats or versions.

D) Increase costs and revenue.

E) Expand to another geographic region.

C

2

Galaxy chocolate has successfully competed with Cadbury by positioning itself as "your partner in chocolate indulgence" and featuring smoother product shapes, more refined taste, and sleeker packaging, which represents which of the following main strategies for growing the core of the business?

A) Make the core of the brand as distinctive as possible.

B) Drive distribution through both existing and new channels.

C) Offer the core product in new formats or versions.

D) Increase costs and revenue.

E) Expand to another geographic region.

A

3

Which of the following brands generates only 6 percent outside North America, with very little of that in fast-growing emerging markets like India, China, and Brazil, which may represent opportunities for its growth?

A) UPS

B) Under Armour

C) FedEx

D) Nike

E) Adidas

B

4

Growing the core can be a less risky alternative than expansion into new product categories.

True

5

Growth strategies are "either/or" propositions; a focus on core businesses means foregoing new market opportunities.

False

6

Vancouver, Canada's Fortuna Silver Mines has focused on its two fully owned, fully integrated silver mines in Peru and Mexico to spur organic growth while looking for a third mine to drive further growth because the existing mines are not expandable.

True

7

The market ________ 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) challenger

B) entrant

C) follower

D) nicher

E) leader

E

8

When the total market expands, the market ________ usually gains the most.

A) challenger

B) leader

C) follower

D) nicher

E) entrant

B

9

When a firm looks for new users in groups that might use a product but do not already use the product, the firm is using the ________ strategy.

A) new-market segment

B) market-penetration

C) geographical-expansion

D) product development

E) diversification

B

10

As the marketing manager for a floor tile manufacturer, 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 currently do not. 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

A

11

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

A

12

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

B

13

Trendz Inc. is a leading brand of fashion clothing and accessories based in Houston. After gaining a strong foothold in the US, the company wants to foray into foreign markets. The management at Trendz 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

C

14

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

C

15

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

E

16

When food product companies advertise recipes that use their branded products in entirely different ways, they are increasing the ________ consumption of the brand.

A) amount of

B) level of

C) dedication to

D) frequency of

E) awareness of

D

17

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

C

18

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 ________ of consumption.

A) increase the amount

B) increase the level

C) increase the perception

D) increase the frequency

E) increase the emotional implications

D

19

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

B

20

To satisfy customers, a(n) ________ marketer finds a stated need and fills it.

A) creative

B) responsive

C) anticipative

D) laidback

E) inexperienced

B

21

A(n) ________ marketer looks ahead to needs customers may have in the near future.

A) laidback

B) creative

C) inexperienced

D) responsive

E) anticipative

E

22

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

D

23

________ marketers are not just market-driven, they are proactive market-driving firms.

A) Creative

B) Responsive

C) Inexperienced

D) Laidback

E) Anticipative

A

24

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

B

25

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.

B

26

________ 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

A

27

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

B

28

________ defense is an aggressive maneuver where the firm attacks first, perhaps with guerrilla action across the market and keeps everyone off balance.

A) Position

B) Flank

C) Contraction

D) Preemptive

E) Lateral

D

29

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

C

30

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 ________ defense strategy.

A) preemptive

B) counteroffensive

C) mobile

D) flank

E) contraction

A

31

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

A) position

B) counteroffensive

C) preemptive

D) contraction

E) flank

B

32

After Olay entered and took over the Indian market with its anti-aging lotion, Ponds invested heavily in a similar product which used only natural ingredients. This is an example of a ________ defense.

A) position

B) flank

C) counteroffensive

D) contraction

E) mobile

C

33

In a ________ defense, the market leader stretches its domain over new territories that can serve as future centers for defense and offense.

A) counteroffensive e

B) flank

C) contraction

D) mobile

E) position

D

34

Market broadening and market diversification are likely tactics employed in ________ defense strategies.

A) position

B) flank

C) preemptive

D) counteroffensive

E) mobile

E

35

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 ________ defense strategy.

A) preemptive

B) counteroffensive

C) mobile

D) flank

E) contraction

C

36

When large companies can no longer defend their full territory, they can 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

A

37

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 ________ defense strategy.

A) preemptive

B) counteroffensive

C) mobile

D) flank

E) contraction

E

38

Market ________ generally have a smaller market share than other players and they are willing to maintain their share and not rock the boat.

A) challengers

B) leaders

C) nichers

D) rivals

E) followers

E

39

When Starbucks extended its brand into coffee drinks and ice creams to reach customers who did not use its brand, it was using a(n) ________ strategy.

A) geographical-expansion

B) new-market segment

C) market-penetration

D) larger package size

E) increased frequency

B

40

When Procter & Gamble used Gain and Cheer laundry detergents as outposts to protect a weak front or support a possible counterattack, they were using a ________ defense.

A) flank

B) position

C) preemptive

D) counteroffensive

E) mobile

A

41

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

True

42

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

True

43

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

False

44

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

False

45

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

True

46

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

False

47

An anticipative marketer finds a stated need and fills it.

False

48

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

True

49

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

True

50

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.

True

51

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

False

52

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

True

53

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 market ________.

A) challenger

B) leader

C) follower

D) nicher

E) entrant

C

54

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

B

55

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

D

56

Epic Inc., a firm that produces chairs for offices, uses comparative advertising to inform 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

B

57

The ________ attack can be used when the challenger spots areas where the opponent is underperforming.

A) encirclement

B) frontal

C) flank-geographic

D) backwards-flank

E) guerilla

C

58

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

B

59

A(n) ________ strategy 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

B) flanking

C) encircling

D) counteroffensive

E) bypass

B

60

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

D

61

ally 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 attack

D) flank attack

E) encirclement attack

E

62

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

A

63

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

B

64

A marketing manager has decided to "leapfrog" the competition by moving into cutting-edge technologies. This indirect approach to attacking competition can be characterized as a(n) ________ attack.

A) flank

B) encirclement

C) bypass

D) guerrilla

E) frontal

C

65

Selective price cuts, intense promotional blitzes, and occasional legal action are commonplace in the strategic design of a(n) ________ attack.

A) frontal

B) flank

C) bypass

D) encirclement

E) guerilla

E

66

When Canon grabbed a large chunk of Xerox's market by introducing desk copiers, it distanced itself from other challengers by ________.

A) attacking a regional firm

B) attacking a firm of its own size that was underfinanced

C) attacking the market leader

D) attacking a firm of its own size that was not doing the job well

E) acquiring guppies

C

67

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

True

68

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

True

69

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

False

70

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

True

71

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

True

72

Pepsi used flank attacks when it launched Aquafina nationally (before Coca-Cola's launch of Dasani); purchased orange juice giant Tropicana in 1998; and purchased the owner of Gatorade sports drink in 2000.

False

73

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

B

74

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

E

75

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

B

76

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

D

77

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

B

78

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

D

79

As a(n) ________, BurgerJacks, a fast food chain selling low-price burgers, has differentiated itself by setting up base in a market not yet exploited by McDonald's.

A) cloner

B) imitator

C) counterfeiter

D) adapter

E) innovator

B

80

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

D

81

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

B

82

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(n) ________.

A) counterfeiter

B) cloner

C) imitator

D) adapter

E) innovator

D

83

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

B

84

A firm that serves small market segments that are not being served by bigger firms is known as a market ________.

A) challenger

B) leader

C) follower

D) nicher

E) entrant

D

85

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

A

86

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.

C

87

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

D

88

Newman Inc. is a company that manufactures saddles specifically for horses that race in derbies in the United States and the United Kingdom. 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

C

89

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

E

90

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

B

91

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 unique. Such nichemanship is an example of ________ specialist role.

A) customer-size

B) product

C) product-feature

D) job-shop

E) quality-price

D

92

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

E

93

A niche specialist that specializes in one type of customer, like a value-added reseller that customizes computer hardware and software for a specific customer segment and earns a price premium in the process, is a(n) ________ specialist.

A) geographic

B) quality-price

C) product-feature

D) end-user

E) channel

D

94

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

False

95

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.

False

96

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

True

97

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

True

98

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

False

99

________ is the period of slow sales growth and nonexistent profits.

A) Growth

B) Decline

C) Maturity

D) Introduction

E) Stagnancy

D

100

ampbells is a newly established company that specializes in preparing healthy but tasty food for children under the age of 5. It is incurring huge production 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

B

101

________ is a period of rapid market acceptance and substantial profit improvement.

A) Stagnancy

B) Introduction

C) Maturity

D) Decline

E) Growth

E

102

A dance school in the Bronx teaches professional hip-hop and salsa classes. 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

C

103

________ 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

E

104

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

D

105

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

C

106

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

E

107

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

D

108

One of the ways to change the course of a brand is to modify the product. Under product modification, ________ improvement adds size, weight, materials, supplements, and accessories that expand the product's performance, versatility, safety, or convenience.

A) feature

B) quality

C) style

D) size

E) technological

A

109

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

C

110

________ 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

D

111

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.

False

112

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

True

113

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

False

114

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

False

115

Sales of nylon have shown a scalloped PLC pattern because of the many new uses — parachutes, hosiery, shirts, carpeting, boat sails, automobile tires — discovered over time.

True

116

During the introduction stage of the product life cycle, firms are likely to use cost-plus pricing.

True

117

During the development stage of the product life cycle, the marketing objective is to maximize profit while defending market share.

False

118

Bic's Wite-out phased out unprofitable outlets and reduced communications to the minimal level needed to retain hard-core loyals because it was in the maturity stage of the product life cycle.

False

119

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

D

120

Benz & Frendz Corp., a manufacturer of high end consumer durables, experienced 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.

D

121

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

True

122

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

False

123

Armani uses a three-tier product line that is differentiated based on style, luxury, customization, price, and distribution. During the recession, the lower priced, younger, street savvy third tier, Armani Exchange, picks up the selling slack for the upper tiers, which is in line with the recommendation to fine-tune brand and product offerings during an economic downturn.

True