Creating Competitive Advantage (Marketing) Answer Key Part 4

96) Walmart, Costco, and Southwest Airlines serve customers who want reliable, good-quality products or services that are also reasonable and easily available. These companies are all known for pursuing a value discipline known as ________. A) operational excellence B) customer intimacy C) product differentiation D) product leadership E) focus Answer: A 97) When companies serve customers who are willing to pay a premium to get precisely what they want and the company responds quickly to satisfy these customers' needs, the company has achieved ________. A) customer intimacy B) product differentiation C) operational excellence D) product leadership E) focus Answer: A 98) American Express will do almost anything to build long-term customer loyalty and to capture customer lifetime value. Which of the following competitive marketing strategies is being pursued by American Express? A) consumer capitalism B) customer equity C) product differentiation D) product leadership E) customer intimacy Answer: E 99) If a company's aim is to make its own and competing products obsolete and serve customers who want state-of-the-art products and services, it is using a value discipline called ________. A) overall cost leadership B) product activation C) product binning D) product leadership E) customer intimacy Answer: D 100) Samsung and Apple actively generate new ideas, relentlessly pursue new solutions, and quickly work to get new products to market. They serve customers who want state-of-the-art products and services, regardless of the costs in terms of price or inconvenience. Which of the following value disciplines is illustrated from this example? A) operational excellence B) customer intimacy C) product leadership D) product activation E) product binning Answer: C 101) Some companies successfully pursue more than one of the three value disciplines at the same time. For example, FedEx excels at operational excellence as well as customer intimacy. However, more companies focus on excelling at a single value discipline while ________ the other two. A) choosing a second one to also focus on B) meeting industry standards on C) ignoring D) achieving minimal goals on E) developing plans to improve on Answer: B 102) Which of the following is a competitive position or role that firms play in the target market? A) surrogate consumer B) market analyst C) market maven D) market nicher E) laggard Answer: D 103) Most of the market is in the hands of the ________, the firm with the largest market share. A) market challenger B) market follower C) market leader D) market nicher E) market maven Answer: C 104) ________ are those runner-up firms that are working to increase their market share in an industry. A) Market leaders B) Market challengers C) Market followers D) Market mavens E) Market nichers Answer: B 105) Fifty percent of the market is in the hands of Company A, 30 percent is in the hands of Company B, 15 percent is in the hands of Company C, and the remaining 5 percent is in the hands of Company D. Based on these hypothetical numbers, Company B is the market ________. A) leader B) challenger C) follower D) nicher E) maven Answer: B 106) A runner-up firm that wants to hold its share in an industry without rocking the boat is a ________. A) market follower B) market maven C) market challenger D) market nicher E) market leader Answer: A 107) Firms that serve small segments not being pursued by other firms are called ________. A) market followers B) market mavens C) market challengers D) market nichers E) market leaders Answer: D 108) Fifty percent of the market is in the hands of Company A, 30 percent is in the hands of Company B, 15 percent is in the hands of Company C, and the remaining 5 percent is in the hands of Company D. Based on these hypothetical numbers, Company D is the market ________. A) leader B) challenger C) follower D) nicher E) maven Answer: D 109) If a company is a market leader in one category, and a market challenger or market nicher in other categories, it will follow ________ strategies for each category. A) different B) the same C) unique D) multiple E) complex Answer: A 110) Which of the following is a market leader strategy? A) expanding market share B) multiple niching C) full frontal attack D) following at a distance E) following closely Answer: A 111) Which of the following are market challenger strategies? A) expand total market and protect market share B) expand market share and follow closely C) full frontal attack and indirect attack D) follow closely and follow at a distance E) multiple niching and quality service Answer: C 112) To remain number one, leading firms can take any of three actions. First, they can find ways to expand total demand. Second, they can protect their current market share through good defensive and offensive actions. Third, they can ________. A) focus exclusively on divestment B) evaluate current employees and reduce costs through downsizing C) run smaller companies out of business, causing them to sell out to larger firms D) try to expand their market share further, even if market size remains constant E) shut down current company locations and reopen in highly populated areas Answer: D 113) A company can protect its market share through all of the following EXCEPT ________. A) continuous innovation B) attacking its competitors directly C) preventing or fixing weaknesses D) fulfilling its value promise to customers E) pricing its products to be consistent with the customers' perceived value Answer: B 114) The market leader normally gains the most when ________. A) its total market diminishes B) it achieves expanded market share C) its personal communication channels expand D) the niche marketing efforts by other firms expand E) the major global competitors enter the market Answer: B 115) Marketers can expand markets by discovering and promoting ________. A) subliminal points of interest B) the deficiencies of competitors C) subtle advantages of the product D) new uses of the product E) green technologies Answer: D 116) Market leaders can expand the market by ________ and more usage of the product. A) identifying competitors B) initiating monopolistic practices C) developing new users D) ensuring users adhere to higher standards E) initiating new rules for product users Answer: C 117) Lovelies is the leading workout and fitness center for women. The regional chain of gyms has traditionally catered to women age 40 and older who are interested in strength and cardiovascular training. Lovelies has recently begun promotions to bring younger women into its gyms. This is an example of how the market leader ________. A) competes with mature products B) changes its product line C) develops new rules D) develops new users E) increases competition Answer: D 118) Which of the following is the best response a company can make to competitive threats? A) continuous innovation B) surrender to the competitor C) exit from the market D) divestment E) globalization Answer: A 119) Profitability increases as a business gains share relative to competitors in its ________. A) higher market B) direct market C) secondary market D) served market E) valued market Answer: D 120) ________ can adopt one of two competitive strategies: they can challenge the leader or they can play along with competitors and not rock the boat. A) Runner-up firms B) Market nichers C) Global investors D) Localized marketers E) Market developers Answer: A 121) Although it might seem that the market leader has the most going for it, challengers often have what some strategists call a(n) ________. The challenger observes what has made the leader successful and improves upon it. A) "marketing myopia" B) "second mover advantage" C) "absolute advantage" D) "blue ocean strategy" E) "red ocean strategy" Answer: B 122) A market challenger that matches the competitor's product, advertising, price, and distribution efforts is most likely ________. A) creating multiple niches B) pursuing an indirect attack C) launching a full frontal attack D) exiting from the current market E) implementing a blue ocean strategy Answer: C 123) Rather than challenging head on, a challenger can make a(n) ________ attack on the competitor's weaknesses or on gaps in the competitor's market coverage. A) bypass B) frontal C) indirect D) guerrilla E) preemptive Answer: C 124) Which of the following conditions would enable higher market share to produce higher profits? A) when unit costs drop as market share increases B) when unit costs increase as market share increases C) when production volume drops as market share increases D) when production volume remains unaltered as market share increases E) when the company fails to break even Answer: A 125) Cozy Country Market entered the candle business with a unique product: a line of candles made from soy that produces less smoke and lasts up to twice as long as other candles. The firm sold this unique product exclusively to a few niches. The candles were priced at twice the cost charged for normal candles. The product was also sold online and in unconventional outlets not dominated by market leaders. In this case, Cozy Country Market was using a(n) ________ against the market leaders. A) preemptive attack B) guerrilla attack C) counter offensive attack D) indirect attack E) frontal attack Answer: D