Question 1

Every business must manage its costs,but not every business can have a cost advantage.

Accepted Answer

A) True 
 B)False  True

Question 2

Name and describe the three different types of cost advantage a business can achieve to attain a competitive advantage.Be sure to explain how each type results in a competitive advantage.

Accepted Answer

The three types of cost advantage are:
(1)Variable Cost Advantage - Businesses with a lower unit cost are able to achieve the same (or better)unit margin at lower prices than competing businesses.Volume is a key factor in achieving a low variable cost advantage.As volume increases,the cost per unit generally decreases.A larger production volume allows for production and purchasing economies that lower the unit cost of a product,thereby creating a scale effect.Likewise,as a business adds products to its product line that have similar purchased materials and manufacturing processes,it is able to lower the average unit cost of all products,producing a scope effect.Finally,as a business builds more of the same product,there is a greater opportunity for learning effects.These non-scale,non-scope effects contribute to lower costs through process improvements that are the result of learning.
(2)Marketing Cost Advantage - Can be derived from product line extensions.It takes a certain number of salespeople to adequately cover a target market.As the sales force is given more products to sell to the same customers,a marketing cost scope effect is created.Another area of marketing cost advantage is derived from the advertising cost efficiency of a brand extension strategy.
(3)Operating Cost Advantage - Although an operating cost advantage is generally outside the control or influence of the marketing function,lower operating expenses relative to competitors contribute to a cost advantage.

Question 3

Which of the following is true of businesses with negative customer value?

Accepted Answer

A) They produce higher levels of pre-tax return on investment. 
B) They tend to gain market share. 
C) Their performance benefits exceed the cost of purchase. 
D) Their value propositions are average. 
E) They have great difficulty in retaining customers. 
A) They produce higher levels of pre-tax return on investment. 
B) They tend to gain market share. 
C) Their performance benefits exceed the cost of purchase. 
D) Their value propositions are average. 
E) They have great difficulty in retaining customers. E

Question 4

If a business is a large purchaser of a commodity product (less important to the buyer)and is in an industry in which switching costs are low,generally the supplier power ________.

Accepted Answer

A) is low 
B) is high 
C) is greater than customer buying power 
D) is equal to customer buying power 
E) is likely to increase with a decrease in switching costs 
A) is low 
B) is high 
C) is greater than customer buying power 
D) is equal to customer buying power 
E) is likely to increase with a decrease in switching costs

Question 5

An oblique strategy differs from a reactive strategy in that an oblique strategy ________.

Accepted Answer

A) requires minimal customer knowledge 
B) requires minimal competitor knowledge 
C) involves making a direct attack on a competitor's position 
D) refers to making competitive moves from an internal perspective with no real market knowledge 
E) seeks to gain a competitive advantage without direct confrontation 
A) requires minimal customer knowledge 
B) requires minimal competitor knowledge 
C) involves making a direct attack on a competitor's position 
D) refers to making competitive moves from an internal perspective with no real market knowledge 
E) seeks to gain a competitive advantage without direct confrontation

Question 6

Which of the following is a type of marketing advantage?

Accepted Answer

A) product line advantage 
B) marketing expenses 
C) variable costs 
D) operating expenses 
E) service quality 
A) product line advantage 
B) marketing expenses 
C) variable costs 
D) operating expenses 
E) service quality

Question 7

MINI-CASE
Sparks Inc. ,a firm that manufacturers low voltage halogen lamps,currently has a 40% share of a 1 million unit market.The firm has extensive customer knowledge,as well as extensive competitor knowledge.The three largest competitors of Sparks Inc.have market shares of 5%,10%,and 15%,respectively.
-Mini-Case Question.The percentage cost of goods sold by Sparks Inc.is 40%.The percentage cost of goods sold by its three largest competitors is 30%,30%,and 20%.What is the cost advantage index of Sparks Inc.?

Accepted Answer

A) 80 
B) 120 
C) 43 
D) 150 
E) 62 
A) 80 
B) 120 
C) 43 
D) 150 
E) 62

Question 8

A competitor analysis is relatively simple and most businesses are inclined to do it on a continuous basis.

Accepted Answer

A) True 
 B)False

Question 9

MINI-CASE
Sparks Inc. ,a firm that manufacturers low voltage halogen lamps,currently has a 40% share of a 1 million unit market.The firm has extensive customer knowledge,as well as extensive competitor knowledge.The three largest competitors of Sparks Inc.have market shares of 5%,10%,and 15%,respectively.
-Mini-Case Question.The current relative market share of Sparks Inc.is ________.

Accepted Answer

A) 166.7 
B) 133.3 
C) 105.5 
D) 75.5 
E) 60 
A) 166.7 
B) 133.3 
C) 105.5 
D) 75.5 
E) 60

Question 10

Which of the following refers to a situation where downward price moves by one competitor force "follower moves" by other competitors in order to minimize lost profits?

Accepted Answer

A) a technology trap 
B) competitive benchmarking 
C) the prisoner's dilemma 
D) a monopoly market 
E) a free market situation 
A) a technology trap 
B) competitive benchmarking 
C) the prisoner's dilemma 
D) a monopoly market 
E) a free market situation

Question 11

Which of the following is an industry force that shapes the attractiveness of a competitive environment?

Accepted Answer

A) competitor intelligence 
B) knowledge advantage 
C) cost advantage 
D) market share advantage 
E) customer buying power 
A) competitor intelligence 
B) knowledge advantage 
C) cost advantage 
D) market share advantage 
E) customer buying power

Question 12

Which of the following is true about customer reactive strategies?

Accepted Answer

A) It refers to overreaction to customer demands due to limited competitor knowledge. 
B) It involves viewing each customer as having unique needs. 
C) It refers to addressing customer complaints quickly,to avoid escalations. 
D) It refers to advertising strategies aimed at encouraging positive customer reactions. 
E) It involves measuring and analyzing customer reactions to marketing strategies. 
A) It refers to overreaction to customer demands due to limited competitor knowledge. 
B) It involves viewing each customer as having unique needs. 
C) It refers to addressing customer complaints quickly,to avoid escalations. 
D) It refers to advertising strategies aimed at encouraging positive customer reactions. 
E) It involves measuring and analyzing customer reactions to marketing strategies.

Question 13

International markets are often blocked by political barriers.

Accepted Answer

A) True 
 B)False

Question 14

Businesses with partial knowledge of customers or competitors are less likely to employ reactive strategies.

Accepted Answer

A) True 
 B)False

Question 15

Benchmark mapping is a technique used to capture customer perceptions of competing products or services.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is true of channel advantage?

Accepted Answer

A) It allows a business to control market access,but not channels in a market. 
B) It is dependent on cost advantage. 
C) It is dependent on differentiation advantage. 
D) It is achieved through the use of reactive strategies. 
E) It is a source of marketing advantage. 
A) It allows a business to control market access,but not channels in a market. 
B) It is dependent on cost advantage. 
C) It is dependent on differentiation advantage. 
D) It is achieved through the use of reactive strategies. 
E) It is a source of marketing advantage.

Question 17

Which of the following industry forces is most likely to give a new business a far better chance of succeeding?

Accepted Answer

A) intense rivalry among competitors 
B) high customer power 
C) high barriers to entry 
D) high supplier power 
E) many product substitutes 
A) intense rivalry among competitors 
B) high customer power 
C) high barriers to entry 
D) high supplier power 
E) many product substitutes

Question 18

Without specifying the criteria for evaluating competing products,customers are asked to rate the degree to which they can differentiate two competing products.This technique of capturing customers' views about competing products or services is called ________.

Accepted Answer

A) the rotational axis analysis 
B) perceptual mapping 
C) the emphatic method 
D) benchmarking 
E) product positioning 
A) the rotational axis analysis 
B) perceptual mapping 
C) the emphatic method 
D) benchmarking 
E) product positioning

Question 19

Which of the following is true about a marketing cost scope effect?

Accepted Answer

A) It refers to a reduction in the sales expenditure,to increase profit margins. 
B) It refers to production process improvements that are the result of learning. 
C) It refers to the use of innovative marketing strategies to increase market share. 
D) It refers to cost efficiencies derived from product line extensions. 
E) It refers to the cost efficiency achieved by avoiding brand extensions. 
A) It refers to a reduction in the sales expenditure,to increase profit margins. 
B) It refers to production process improvements that are the result of learning. 
C) It refers to the use of innovative marketing strategies to increase market share. 
D) It refers to cost efficiencies derived from product line extensions. 
E) It refers to the cost efficiency achieved by avoiding brand extensions.

Question 20

As a business adds products to its product line that have the same purchased materials and similar manufacturing processes,it is able to lower the average unit cost of all products,producing a ________ effect.

Accepted Answer

A) network 
B) scope 
C) Mohring 
D) scale 
E) cluster 
A) network 
B) scope 
C) Mohring 
D) scale 
E) cluster

Every business must manage its costs,but not every business can have a cost advantage.

Name and describe the three different types of cost advantage a business can achieve to attain a competitive advantage.Be sure to explain how each type results in a competitive advantage.

Which of the following is true of businesses with negative customer value?

If a business is a large purchaser of a commodity product (less important to the buyer)and is in an industry in which switching costs are low,generally the supplier power ________.

An oblique strategy differs from a reactive strategy in that an oblique strategy ________.

Which of the following is a type of marketing advantage?

A competitor analysis is relatively simple and most businesses are inclined to do it on a continuous basis.

Which of the following refers to a situation where downward price moves by one competitor force "follower moves" by other competitors in order to minimize lost profits?

Which of the following is an industry force that shapes the attractiveness of a competitive environment?

Which of the following is true about customer reactive strategies?

International markets are often blocked by political barriers.

Businesses with partial knowledge of customers or competitors are less likely to employ reactive strategies.

Benchmark mapping is a technique used to capture customer perceptions of competing products or services.

Which of the following is true of channel advantage?

Which of the following industry forces is most likely to give a new business a far better chance of succeeding?

Without specifying the criteria for evaluating competing products,customers are asked to rate the degree to which they can differentiate two competing products.This technique of capturing customers' views about competing products or services is called ________.

Which of the following is true about a marketing cost scope effect?

As a business adds products to its product line that have the same purchased materials and similar manufacturing processes,it is able to lower the average unit cost of all products,producing a ________ effect.

Customer Focus, customer Performance, and Profit Impact

Marketing Metrics and Marketing Profitability

Market Potential, market Demand, and Market Share

The Customer Experience and Value Creation

Market Segmentation and Segmentation Strategies

Product Positioning, branding, and Product Line Strategies

Value-Based Pricing and Pricing Strategies

Marketing Channels and Channel Mapping

Marketing Communications, social Media, and Customer Response

Portfolio Analysis and Strategic Market Planning

Offensive Strategies

Defensive Strategies

Building a Marketing Plan

Marketing Metrics,performance,and Strategy Implementation

Market-Based Management and Financial Performance

Filters

Exam 6: Competitive Position and Sources of Advantage

Every business must manage its costs,but not every business can have a cost advantage.

Name and describe the three different types of cost advantage a business can achieve to attain a competitive advantage.Be sure to explain how each type results in a competitive advantage.

Which of the following is true of businesses with negative customer value?

If a business is a large purchaser of a commodity product (less important to the buyer)and is in an industry in which switching costs are low,generally the supplier power ________.

An oblique strategy differs from a reactive strategy in that an oblique strategy ________.

Which of the following is a type of marketing advantage?

A competitor analysis is relatively simple and most businesses are inclined to do it on a continuous basis.

Which of the following refers to a situation where downward price moves by one competitor force "follower moves" by other competitors in order to minimize lost profits?

Which of the following is an industry force that shapes the attractiveness of a competitive environment?

Which of the following is true about customer reactive strategies?

International markets are often blocked by political barriers.

Businesses with partial knowledge of customers or competitors are less likely to employ reactive strategies.

Benchmark mapping is a technique used to capture customer perceptions of competing products or services.

Which of the following is true of channel advantage?

Which of the following industry forces is most likely to give a new business a far better chance of succeeding?

Without specifying the criteria for evaluating competing products,customers are asked to rate the degree to which they can differentiate two competing products.This technique of capturing customers' views about competing products or services is called ________.

Which of the following is true about a marketing cost scope effect?

As a business adds products to its product line that have the same purchased materials and similar manufacturing processes,it is able to lower the average unit cost of all products,producing a ________ effect.

Customer Focus, customer Performance, and Profit Impact

Marketing Metrics and Marketing Profitability

Market Potential, market Demand, and Market Share

The Customer Experience and Value Creation

Market Segmentation and Segmentation Strategies

Product Positioning, branding, and Product Line Strategies

Value-Based Pricing and Pricing Strategies

Marketing Channels and Channel Mapping

Marketing Communications, social Media, and Customer Response

Portfolio Analysis and Strategic Market Planning

Offensive Strategies

Defensive Strategies

Building a Marketing Plan

Marketing Metrics,performance,and Strategy Implementation

Market-Based Management and Financial Performance

Filters