Chapter 11: Dealing with Competition

GENERAL CONCEPT QUESTIONS !ltiple Choi"e

1. Michael Porter has identified five forces that determine the intrinsic long-run attractiveness of a market or market segment. Which of the following would NOT be among Porters five forces a. !ndustr" com#etitors b. Technological #artners c. $ubstitutes d. %u"ers e. Potential entrants An#wer: $ Page: %&' Di((i"!lt): e*i!m &. When entr" and e'it barriers are high( )))))))). a. #rofit #otential is high( but firms face more risk because #oorer-#erforming firms sta" in and fight it out b. firms easil" enter and leave the industr"( and returns are stable and low c. few new firms can enter the industr"( and #oorl" #erforming firms can easil" e'it d. firms enter during good times but find it hard to leave during bad times( resulting in chronic overca#acit" and de#ressed earnings for all e. none of the above An#wer: a Page: %&' Di((i"!lt): e*i!m AACS+: Anal)ti" S,ill# *. + segment is unattractive when there are actual or #otential )))))))) for the #roduct. a. contenders b. com#etitors c. substitutes d. unclear demand e. #rofit fluctuation An#wer: " Page: %&Di((i"!lt): e*i!m AACS+: Anal)ti" S,ill# ,. Wal-Mart is #erha#s one of the best illustrations of the threat of )))))))) found in Porters model. a. intense segment rivalr" b. new entrants c. substitute #roducts d. bu"ers growing bargaining #ower e. su##liers growing bargaining #ower

Part ,- %uilding $trong %rands

An#wer: *

Page: %&-

Di((i"!lt): .ar*

AACS+: Re(le"ti/e Thin,ing

.ha#ter 11- /ealing with .om#etition

0. + segment is unattractive if the com#an"s su##liers are able to raise #rices or reduce 1uantit" su##lied. Which of the following is the best illustration of the threat of su##liers growing bargaining #ower a. Wal-Mart has almost no com#etitors in its markets#ace. b. Oil com#anies must #urchase a significant amount of their #roduct from OP2.. c. Mc/onalds is the largest fast-food franchise and is still growing. d. The 3.$. Post Office has merged #ackage o#erations with 4ed2'. e. $ears unsuccessfull" attem#ted to com#ete with Wal-Mart and 5mart. An#wer: $ Page: %&Di((i"!lt): .ar* AACS+: Re(le"ti/e Thin,ing 6. +7n8 )))))))) is a grou# of firms that offer a #roduct or class of #roducts that are close substitutes for one another. a. industr" b. cartel c. coo#erative d. mono#ol" e. demand field An#wer: a Page: %%0 Di((i"!lt): Ea#) AACS+: Anal)ti" S,ill# 9. 3sing the market a##roach( )))))))) are com#anies that satisf" the same customer need. a. #artners b. com#etitors c. entre#reneurs d. innovators e. followers An#wer: $ Page: %%0 Di((i"!lt): e*i!m :. + grou# of firms following the same strateg" in a given target market is called a7n8 )))))))). a. cartel b. cabal c. coo#erative d. informal alliance e. strategic grou# An#wer: e Page: %%0 Di((i"!lt): Ea#) AACS+: Anal)ti" S,ill# ;. +n e'am#le of a strategic grou# in the a##liance industr" would be one where )))))))). a. there is a large franchised dealer s"stem b. a common #romotional theme is used c. com#etitors have broad lines( medium manufacturing costs( low service res#onsibilit"( and low #rices d. multinational o#erations are mandated e. there is a value orientation rather than a cost orientation An#wer: " Page: %%0 Di((i"!lt): e*i!m AACS+: Re(le"ti/e Thin,ing

Part ,- %uilding $trong %rands

1<. Once a com#an" has identified its main com#etitors and their strategies( it must ne't ask- )))))))) a. What are the com#etitors ob=ectives b. What are the com#etitive brand attributes c. What are the com#etitive #romotion schemes d. What is the attrition rate in the market e. What are the subtle market entrance re1uirements An#wer: a Page: %%& Di((i"!lt): .ar* AACS+: Re(le"ti/e Thin,ing 11. !n general( a com#an" should monitor the following variables when anal">ing com#etitors- ))))))))( share of heart( and share of market. a. share of demand b. share of #rofits c. share of #romotion d. share of universe e. share of mind An#wer: e Page: %%% Di((i"!lt): e*i!m AACS+: Anal)ti" S,ill# 1&. )))))))) is the #ercentage of customers who named the com#etitor in res#onding to the statement( ?Name the com#an" from which "ou would #refer to bu" the #roduct.@ a. $hare of market b. $hare of mind c. $hare of heart d. $hare of com#etitive s#ace e. $hare of #s"chological field An#wer: " Page: %%% Di((i"!lt): e*i!m 1*. + com#etitors share of industr" sales is known as the firms )))))))). a. share of market b. share of mind c. share of heart d. share of com#etitive s#ace e. share of #s"chological field An#wer: a Page: %%% Di((i"!lt): e*i!m AACS+: Anal)ti" S,ill# 1,. )))))))) is the art of learning from com#anies that #erform certain tasks better than other com#anies. a. .om#etition b. Market share c. Aalue deliver" d. !ndustr" definition e. %enchmarking An#wer: e Page: %%1 Di((i"!lt): e*i!m AACS+: Anal)ti" S,ill#

.ha#ter 11- /ealing with .om#etition

10. Most com#anies aim their com#etitive shots at )))))))) com#etitors( because this re1uires fewer resources #er share #oint gained. a. strong b. weak c. distant d. ?good@ e. unacknowledged An#wer: $ Page: %%1 Di((i"!lt): Ea#) AACS+: Re(le"ti/e Thin,ing 16. )))))))) com#etitors tr" to bu" market share rather than earn itB take large risksB invest in overca#acit"B and u#set industrial e1uilibrium. a. ?%ad@ b. ?Cood@ c. /istant d. .lose e. $trong An#wer: a Page: %%1 Di((i"!lt): .ar* AACS+: Anal)ti" S,ill# 19. The aim of benchmarking is to co#" or im#rove on )))))))) either within an industr" or across industries. a. #rofitabilit" b. manufacturing c. ideation d. aggressiveness e. ?best #ractices@ An#wer: e Page: %%1 Di((i"!lt): e*i!m AACS+: Anal)ti" S,ill# 1:. !n selecting customers( a com#an" should )))))))) those who are vulnerable and not valuable. a. make ever" effort to retain b. focus on maintaining margins on c. encourage the de#arture of d. tr" to im#rove the vulnerabilit" of e. tr" to im#rove the value of An#wer: " Page: %%1 Di((i"!lt): .ar* 1;. The )))))))) in a given market#lace has the largest market share in the relevant #roduct market and usuall" leads other firms in #rice changes( new-#roduct introductions( distribution coverage( and #romotional intensit". a. market challenger b. market leader c. market follower d. market nicher e. market entrant An#wer: $ Page: %%2 Di((i"!lt): e*i!m AACS+: Anal)ti" S,ill#

Part ,- %uilding $trong %rands

&<. + firm that is willing to maintain its market share and not rock the boat is known as a )))))))). a. market challenger b. market leader c. market follower d. market nicher e. market entrant An#wer: " Page: %%2 Di((i"!lt): e*i!m &1. + firm that serves small market segments not being served b" bigger firms is known as a )))))))). a. market challenger b. market leader c. market follower d. market nicher e. market entrant An#wer: * Page: %%2 Di((i"!lt): e*i!m AACS+: Anal)ti" S,ill# &&. %eing a market leader is often a difficult #osition to maintain and defend. The firm can tr" to increase its market share in the face of constant market si>e( #rotect its current market share through good defensive and offensive actions( or )))))))). a. be a cost leader b. find new( innovative technologies on a monthl" basis c. strive to win #romotional awards d. find wa"s to e'#and total market demand e. #ursue markets others do not want An#wer: * Page: %%' Di((i"!lt): e*i!m AACS+: Re(le"ti/e Thin,ing &*. When the total market e'#ands( the )))))))) usuall" gains the most. a. market challenger b. market leader c. market follower d. market nicher e. market entrant An#wer: $ Page: %%' Di((i"!lt): e*i!m AACS+: Anal)ti" S,ill# &,. +s a marketing manager( "ou have decided to #ursue new customers with "our established #roducts. $#ecificall"( the new customers that "ou want are those who might use the #roduct but do not at #resent. Which of the following strategies is recommended to #ursue such a customer market a. Market-#enetration strateg" b. New-market segment strateg" c. Ceogra#hical-e'#ansion strateg" d. Needs-assessment strateg" e. .onsolidation strateg" An#wer: a Page: %%' Di((i"!lt): .ar* AACS+: Anal)ti" S,ill#

.ha#ter 11- /ealing with .om#etition

&0. One of the market leader strategies for e'#anding the total market is to focus on more usage. Two avenues are o#en for doing this- increasing the fre1uenc" of consum#tion or )))))))). a. increasing adherence to ever"da" low #ricing b. decreasing the number of #roduct returns c. increasing the level or 1uantit" of consum#tion d. increasing the level of #romotional e'#enditures relative to market share #ercentage e. decreasing sales-related e'#enses An#wer: " Page: %%Di((i"!lt): .ar* &6. !ncreasing )))))))) re1uires either 718 identif"ing additional o##ortunities to use the brand in the same basic wa" or 7&8 identif"ing com#letel" new and different wa"s to use the brand. a. amount of consum#tion b. level of consum#tion c. dedication to consum#tion d. awareness consum#tion e. fre1uenc" of consum#tion An#wer: e Page: %%Di((i"!lt): e*i!m AACS+: Anal)ti" S,ill# &9. One a##roach to )))))))) is to identif" com#letel" new and different a##lications for the #roduct. 4or e'am#le( food #roduct com#anies have long advertised reci#es that use their branded #roducts in entirel" different wa"s. a. amount of consum#tion b. level of consum#tion c. dedication to consum#tion d. awareness consum#tion e. fre1uenc" of consum#tion An#wer: e Page: %%Di((i"!lt): e*i!m AACS+: Anal)ti" S,ill# &:. Market leaders are constantl" under attack from large and small com#etitors alike. What is the most constructive res#onse a market leader can make when defending its terrain a. %asic cost control b. 2'#anding e'#ected benefits c. 2'#anding desired benefits d. Meet all challengers with a swift res#onse e. .ontinuous innovation An#wer: e Page: %%Di((i"!lt): e*i!m AACS+: Re(le"ti/e Thin,ing

Part ,- %uilding $trong %rands

&;. $on" is an unusual market leader. !t gives its customers new #roducts that the" have never even asked for 7e.g.( Walkmans( A.Ds( video cameras( ./s8. This makes $on" a7n8 )))))))) firm. a. market-driven b. market-driving c. o#erations-driven d. vision-driven e. virtuall"-driven An#wer: $ Page: %10 Di((i"!lt): e*i!m *<. )))))))) become market leaders through su#erior value deliver" of unmetEand ma"be even unknownEconsumer needs. a. .reative marketers b. +ntici#ative marketers c. Des#onsive marketers d. Market-driving firms e. Deactive marketers An#wer: * Page: %10 Di((i"!lt): e*i!m AACS+: Anal)ti" S,ill# *1. )))))))) defense involves occu#"ing the most desirable market s#ace in the minds of the consumers( making the brand almost im#regnable. a. Position b. 4lank c. Preem#tive d. Mobile e. .ontraction An#wer: a Page: %1& Di((i"!lt): e*i!m *&. + marketing manager has #lanned a strateg" that will re1uire the organi>ation to erect out#osts to #rotect its weak front-running brands. !n this )))))))) defense( the out#osts will be central to the organi>ations new com#etitive strateg". a. #osition b. flank c. #reem#tive d. counteroffensive e. mobile An#wer: $ Page: %1& Di((i"!lt): e*i!m AACS+: Anal)ti" S,ill# **. The ?best defense is a good offense@ would be a #olic" under which of the following market leader defensive strategies a. Position defense b. 4lank defense c. .ontraction defense d. Preem#tive defense e. Fateral defense An#wer: * Page: %1% Di((i"!lt): e*i!m AACS+: Re(le"ti/e Thin,ing

.ha#ter 11- /ealing with .om#etition

*,. +fter 4ed2' watched 3P$ successfull" invade its airborne deliver" s"stem( 4ed2' invested heavil" in ground deliver" service through a series of ac1uisitions to challenge 3P$ on its home turf. This is an e'am#le of a )))))))). a. #osition defense b. flank defense c. counteroffensive defense d. contraction defense e. mobile defense An#wer: " Page: %1% Di((i"!lt): e*i!m AACS+: Re(le"ti/e Thin,ing *0. Market broadening and market diversification are likel" tactics em#lo"ed in which of the following market leader defensive strategies a. Position defense b. 4lank defense c. Preem#tive defense d. .ounteroffensive defense e. Mobile defense An#wer: e Page: %11 Di((i"!lt): e*i!m AACS+: Anal)ti" S,ill# *6. !n ))))))))( the market leaders stretches its domain over new territories that can serve as future centers for defense and offense. a. counteroffensive defense b. flank defense c. mobile defense d. contraction defense e. #osition defense An#wer: " Page: %11 Di((i"!lt): e*i!m AACS+: Anal)ti" S,ill# *9. $ome market leaders have increased #rofitabilit" b" selectivel" )))))))) market share in weaker areas. a. decreasing b. increasing c. #rotecting d. sharing e. trading An#wer: a Page: %12 Di((i"!lt): e*i!m AACS+: Re(le"ti/e Thin,ing *:. %ecause the cost of bu"ing higher market share ma" far e'ceed its revenue value( a com#an" should consider four factors before #ursuing increased market share. These include all of the following 2G.2PT )))))))). a. the #ossibilit" of #rovoking antitrust action b. the likelihood that an award-winning #romotional cam#aign can be generated c. economic cost d. #ursuing the wrong marketing-mi' strateg" e. the effect of increased market share on actual and #erceived 1ualit" An#wer: $ Page: %12 Di((i"!lt): e*i!m AACS+: Re(le"ti/e Thin,ing

Part ,- %uilding $trong %rands

*;. Pushing for higher market share is less =ustified when )))))))). a. there are obvious scale economies b. attractive market segments e'ist c. bu"ers want a single source of su##l" d. e'it barriers are low e. there are few scale or e'#erience economies An#wer: e Page: %12 Di((i"!lt): .ar* AACS+: Re(le"ti/e Thin,ing ,<. .om#anies successfull" gaining market share t"#icall" out#erform com#etitors in which of the following areas a. New-#roduct activit" b. Delative #roduct 1ualit" c. Marketing e'#enditures d. +ll of the above e. None of the above An#wer: * Page: %13 Di((i"!lt): .ar* AACS+: Anal)ti" S,ill# ,1. + market challenger must decide who to attack. +ll of the following are considered as likel" #ossible targets 7as #er information found in the te't8 2G.2PT )))))))). a. the market leader b. firms its own si>e that are not doing the =ob c. firms its own si>e that are underfinanced d. a global conglomerate that is market hungr" e. small local firms An#wer: * Page#: 13 Di((i"!lt): e*i!m AACS+: Re(le"ti/e Thin,ing ,&. +ccording to attack strategies available to the market challenger( the )))))))) can be used when the challenger s#ots areas where the o##onent is under#erforming. a. encirclement attack b. frontal attack c. flank-geogra#hic attack d. backwards-flank attack e. guerilla warfare An#wer: " Page: %14 Di((i"!lt): e*i!m AACS+: Re(le"ti/e Thin,ing ,*. $all" .han is an u#-and-coming marketing manager for a large de#artment store chain. Ms. .han has distinguished herself with bold strategies such as launching attacks on her #rimar" com#etitor from several fronts( including advertising( new store o#enings( and new distributor alliances. Which of the following market challenger attack strategies is Ms. .han using to attack her com#etition a. 4rontal attack b. %"#ass attack c. Cuerrilla warfare d. 4lank attack e. 2ncirclement attack An#wer: e Page#: %1' Di((i"!lt): .ar* AACS+: Anal)ti" S,ill#

.ha#ter 11- /ealing with .om#etition

,,. +ll of the following are considered to be viable attack strategies that can be em#lo"ed b" a market challenger 2G.2PT )))))))). a. counteroffensive attack b. frontal attack c. flank attack d. b"#ass attack e. guerilla warfare An#wer: a Page#: %1' Di((i"!lt): .ar* AACS+: Anal)ti" S,ill# ,0. + marketing manager has decided to ?lea#frog@ com#etition b" moving into cuttingedge technologies. This indirect a##roach to attacking com#etition can be characteri>ed as )))))))). a. flank attack b. encirclement attack c. b"#ass attack d. guerrilla warfare e. frontal attack An#wer: " Page: %1' Di((i"!lt): e*i!m ,6. $elective #rice cuts( intense #romotional blit>es( and occasional legal action are common#lace in the strategic design of a7n8 )))))))). a. frontal attack b. flank attack c. b"#ass attack d. encirclement attack e. guerilla warfare An#wer: e Page: %1Di((i"!lt): .ar* AACS+: Anal)ti" S,ill# ,9. +von became a ma=or cosmetics com#an" b" #erfecting door-to-door selling instead of battling other cosmetic firms in conventional stores. This is an e'am#le of which of the following s#ecific market challenger attack strategies a. Manufacturing cost reduction b. !ntensive advertising #romotion c. /istribution innovation d. Product innovation e. Product #roliferation An#wer: " Page: %20 Di((i"!lt): e*i!m AACS+: Re(le"ti/e Thin,ing ,:. !n his article( ?!nnovative !mitation(@ Theodore Fevitt argues that )))))))). a. imitation is wrong and should be #unished b. #roduct imitation might be as #rofitable as a strateg" of #roduct innovation c. innovation is not #ossible without substantial imitation d. innovation cannot begin unless dissatisfaction with imitation occurs e. imitation should be against the law because of the intellectual #ro#ert" decision involved An#wer: $ Page: %20 Di((i"!lt): .ar* AACS+: Anal)ti" S,ill#

Part ,- %uilding $trong %rands

,;. Patterns of )))))))) are common in ca#ital-intensive( homogeneous-#roduct industries( where com#etitors #resent similar offers to bu"ers and market shares show high stabilit". a. ?conscious #arallelism@ b. ?feature fashion@ c. ?covert securit" anal"sis@ d. ?su##l" dela"@ e. ?#redator" #ricing@ An#wer: a Page: %20 Di((i"!lt): .ar* AACS+: Re(le"ti/e Thin,ing 0<. +ll of the following are considered market follower strategies 2G.2PT )))))))). a. counterfeiter b. cloner c. imitator d. innovator e. ada#ter An#wer: * Page#: %20 Di((i"!lt): e*i!m 01. +s a market follower strateg"( the )))))))) emulates the leaders #roducts( name( and #ackaging( with slight variations. a. counterfeiter b. cloner c. imitator d. ada#ter e. innovator An#wer: $ Page: %20 Di((i"!lt): .ar* AACS+: Anal)ti" S,ill# 0&. +s a market follower strateg"( the )))))))) co#ies some things from the leader but maintains differentiation in terms of #ackaging( advertising( #ricing( or location. This strateg" is tolerated b" the market leader as long as the followers aggressiveness does not mount. a. counterfeiter b. cloner c. imitator d. ada#ter e. innovator An#wer: " Page: %20 Di((i"!lt): e*i!m AACS+: Anal)ti" S,ill# 0*. +n alternative to being a market follower in a large market is to be a leader in a small market. This t"#e of com#etitor is called a7n8 )))))))). a. marketing knave b. market nicher c. segment king d. guerilla marketer e. strategic clone An#wer: $ Page: %2& Di((i"!lt): e*i!m

.ha#ter 11- /ealing with .om#etition

0,. !n terms of com#arisons with a market leader( whereas the market leader achieves high volume( the market nicher achieves )))))))). a. high margin b. low margin c. high #romotabilit" d. medium #ricing e. lower demand An#wer: a Page: %2& Di((i"!lt): e*i!m AACS+: Anal)ti" S,ill# 00. The ke" idea in successful nichemanshi# is s#eciali>ation. Which of the following s#ecialists would most closel" be identified with the characteri>ation of being an organi>ation that limits its selling to one customer a. 2nd-user s#ecialist b. Aertical-level s#ecialist c. .ustomer-si>e s#ecialist d. $#ecific-customer s#ecialist e. Hualit"-#rice s#ecialist An#wer: * Page: %2% Di((i"!lt): .ar* AACS+: Anal)ti" S,ill# 06. + market nicher is considered to be a7n8 )))))))) s#ecialist if the firm s#eciali>es in #roducing a certain t"#e of #roduct or #roduct feature such as Dent-a-Wreck that rents onl" ?beat-u#@ cars. a. end-user b. vertical-level c. customer-si>e d. channel e. #roduct-feature An#wer: e Page: %2% Di((i"!lt): .ar* 09. Which of the following t"#es of com#anies is characteri>ed as having a ?fighter orientation @ a. .ustomer centered b. .om#etitor centered c. /istribution centered d. Promotion centered e. Niche centered An#wer: $ Page: %21 Di((i"!lt): e*i!m AACS+: Anal)ti" S,ill# 0:. Which of the following t"#es of com#anies is characteri>ed as being ?too reactive @ a. .om#etitor centered b. .ustomer centered c. $ervice centered d. /istribution centered e. Niche centered An#wer: a Page: %21 Di((i"!lt): e*i!m AACS+: Re(le"ti/e Thin,ing

Part ,- %uilding $trong %rands

0;. Which of the following t"#es of com#anies is felt to be in a better #osition to identif" new o##ortunities a. .om#etitor centered b. .ustomer centered c. $ervice centered d. /istribution centered e. Niche centered An#wer: $ Page: %21 Di((i"!lt): e*i!m AACS+: Re(le"ti/e Thin,ing 6<. !n a )))))))) com#an"( the obsession of the com#an" is with the customer( not the com#etition. a. niche-centered b. #rice-centered c. cost-centered d. customer-centered e. #romotion-centered An#wer: * Page: %21 Di((i"!lt): Ea#) AACS+: Anal)ti" S,ill# 1<1. + market segments attractiveness varies with the height of its entr" and e'it barriers. Which of the following forces as described b" Michael Porter would most likel" be the force being e'amined if the above situation were to be considered b" a marketing manager a. Threat of intense segment rivalr" b. Threat of new entrants c. Threat of substitute #roducts d. Threat of bu"ers growing bargaining #ower e. Threat of su##liers growing bargaining #ower An#wer: $ Page: %&' Di((i"!lt): e*i!m AACS+: Re(le"ti/e Thin,ing 1<&. Cre"hound and +mtrak have seen #rofitabilit" threatened b" the rise of air travel. These com#anies have e'#erienced the threat of )))))))). a. bu"ers growing bargaining #ower b. su##liers growing bargaining #ower c. new entrants d. substitute #roducts e. intense segment rivalr" An#wer: * Page: %&Di((i"!lt): e*i!m AACS+: Anal)ti" S,ill# 1<*. 2ach marketing manager needs to be aware of the industr" in which the" com#ete. !ndustries can be classified according to all of the following 2G.2PT )))))))). a. degree of usage of #romotion b. number of sellers c. degree of #roduct differentiation d. degree of vertical integration e. degree of globali>ation

.ha#ter 11- /ealing with .om#etition

An#wer: a 1<,.

Page: %%0

Di((i"!lt): .ar*

$uccessful blue-ocean thinkers take advantage of three #latforms on which value innovation can take #lace- #h"sical #roduct( service( and )))))))). a. consumer #erce#tion b. #restige c. manufacturing d. advertising e. deliver" An#wer: e Page: %%1 Di((i"!lt): e*i!m AACS+: Re(le"ti/e Thin,ing 1<0. When a bu"er thinks of #erformance running shoes( the first name that comes to mind is Nike. !n this e'am#le( Nike has a high )))))))). a. share of market b. share of mind c. share of heart d. share of #ocketbook e. share of innovation An#wer: $ Page: %%% Di((i"!lt): e*i!m AACS+: Anal)ti" S,ill# 1<6. !ncreases in )))))))) arise from increases in )))))))). a. share of heartB share of market b. share of mindB share of heart c. share of mindB share of market d. share of marketB share of mind and heart e. none of the above An#wer: * Page: %%% Di((i"!lt): e*i!m 1<9. .hevrolet com#etes with 4ord( not with 4errari. Which of the following statements most a#tl" fits with the com#etitive situation faced b" .hevrolet when it seeks optimum selection of competitors a. .om#ete with strong com#etitors. b. .om#ete with distant com#etitors. c. .om#ete with #arallel com#etitors. d. .om#ete with bad com#etitors. e. .om#ete with close com#etitors. An#wer: e Page: %%1 Di((i"!lt): .ar* AACS+: Re(le"ti/e Thin,ing 1<:. .oca-.ola recogni>es that its number-one com#etitor is ta# water( not Pe#si. Which of the following statements most a#tl" fits with the com#etitive situation faced b" .oca-.ola when it seeks optimum selection of competitors a. .om#ete with strong com#etitors. b. .om#ete with distant com#etitors. c. .om#ete with #arallel com#etitors. d. .om#ete with bad com#etitors. e. .om#ete with close com#etitors.

Part ,- %uilding $trong %rands

An#wer: $ 1<;.

Page: %%1

Di((i"!lt): .ar*

AACS+: Re(le"ti/e Thin,ing

When a regional com#uter-manufacturing firm began to seek out customers who lived outside of its traditional market boundaries( the firm was em#lo"ing which of the following new-customer e'#ansion strategies to e'#and its total market a. market-#enetration strateg" b. new-market segment strateg" c. geogra#hic-e'#ansion strateg" d. #roduct differentiation strateg" e. latent demand strateg" An#wer: " Page: %%' Di((i"!lt): Ea#) AACS+: Anal)ti" S,ill# 11<. When $tarbucks introduced its Ta>o Tea line to bring in new customers who had never gone to $tarbucks because the" dont drink coffee( $tarbucks was em#lo"ing a )))))))) strateg" a. market-#enetration b. new-market segment c. geogra#hical-e'#ansion d. niche identification e. blue-ocean An#wer: $ Page: %%' Di((i"!lt): e*i!m 111. .loro' runs ads stressing the man" benefits of its bleach( such as how it eliminates kitchen odors( in order to generate additional o##ortunities to use the brand in the same basic wa". This is an attem#t to )))))))). a. increase the amount of consum#tion b. increase the level of consum#tion c. increase the #erce#tion of consum#tion d. increase the fre1uenc" of consum#tion e. increase the emotional im#lications of consum#tion An#wer: * Page: %%Di((i"!lt): e*i!m AACS+: Anal)ti" S,ill# 11&. !n satisf"ing customer needs( a )))))))) marketer discovers and #roduces solutions customers did not ask for but to which the" enthusiasticall" res#ond. $on" is a good illustration of such a marketer. a. res#onsive b. antici#ative c. combative d. mani#ulative e. creative An#wer: e Page: %10 Di((i"!lt): .ar* AACS+: Anal)ti" S,ill# 11*. !f Microsoft announces #lans for a new-#roduct develo#ment( smaller firms ma" choose to concentrate their develo#ment efforts in other directions to avoid headto-head com#etition. !n this e'am#le( Microsoft is em#lo"ing a )))))))) strateg".

.ha#ter 11- /ealing with .om#etition

a. #reem#tive defense b. counteroffensive defense c. mobile defense d. flank defense e. contraction defense An#wer: a Page: %1% Di((i"!lt): 11,.

e*i!m

When ?#etroleum@ com#anies such as %P sought to recast themselves as ?energ"@ com#anies( increasing their research into the oil( coal( nuclear( h"droelectric( and chemical industries( these com#anies were em#lo"ing a )))))))) strateg". a. #reem#tive defense b. counteroffensive defense c. mobile defense d. flank defense e. contraction defense An#wer: " Page: %11 Di((i"!lt): .ar* AACS+: Anal)ti" S,ill# 110. !n &<<6( $ara Fee s#un off #roducts that accounted for almost ,<I of the com#an"s revenues( including its strong Janes hosier" brand( so it could concentrate on its well-known food brands. !n this e'am#le( $ara Fee is em#lo"ing a )))))))) strateg". a. #reem#tive defense b. counteroffensive defense c. mobile defense d. flank defense e. contraction defense An#wer: e Page: %12 Di((i"!lt): e*i!m 116. + )))))))) is another name for identif"ing shifts in market segments that are causing ga#s to develo#( then rushing in to fill the ga#s and develo# them into strong segments. a. frontal attack strateg" b. flanking strateg" c. encircling strateg" d. counteroffensive strateg" e. b"#ass strateg" An#wer: $ Page: %14 Di((i"!lt): e*i!m AACS+: Anal)ti" S,ill# 119. +ll of the following suggestions have been #rovided b" +dam Morgan for im#roving small brands success in com#eting with larger rivals 2G.2PT )))))))). a. break with "our immediate #ast b. build a ?lighthouse identit"@ c. assume thought leadershi# of the categor" d. create s"mbols of reevaluation e. dee#l" discount #roducts and services

Part ,- %uilding $trong %rands

An#wer: e Page: %1Di((i"!lt): e*i!m AACS+: Re(le"ti/e Thin,ing 11:. The TelePi>>a chain( which o#erates in 2uro#e and Fatin +merica( has co#ied /ominos service model but maintains differentiation in terms of location. TelePi>>a is an e'am#le of a7n8 )))))))). a. counterfeiter b. ado#ter c. cloner d. imitator e. ada#ter An#wer: * Page: %20 Di((i"!lt): e*i!m AACS+: Anal)ti" S,ill# 11;. Tasteeos( 4ruit Dings( and .orn 4lakes sell for nearl" K1 a bo' less than leading cereal brands. Which market follower strateg" is being em#lo"ed b" the cereal manufacturer a. .ounterfeiter b. .loner c. !mitator d. +da#ter e. Deverse innovator An#wer: $ Page: %20 Di((i"!lt): e*i!m AACS+: Re(le"ti/e Thin,ing 1&<. + niche firm that s#eciali>es in customi>ing its #roducts for individual customers is known as a )))))))). a. =ob-sho# s#ecialist b. customer-si>e s#ecialist c. s#ecific-customer s#ecialist d. channel s#ecialist e. vertical-level s#ecialist An#wer: a Page: %2& Di((i"!lt): .ar* AACS+: Anal)ti" S,ill#