Deck 15: Strategies for New and Growing Markets

Question 1

Pioneers can better their market positions if the switching costs in the industry are low.

Answer 1

False

Question 2

In industries characterized by rapid technological advances,pioneers have the advantage of introducing products based on superior,second generation technologies thereby gaining an advantage over the followers.

Answer 2

False

Question 3

Success of a pioneering strategy depends on the nature of the demand and competitive situation the pioneer encounters in the market.

Answer 3

True

Question 4

Products new to the company but not to the market such as new product lines present greater challenges for R&D than new-to-the world products.

Question 5

New-to-the-world products are true innovations that are new to the firm and create an entirely new market.

Question 6

A follower typically has more options to design a distribution channel to bring the new product to market than pioneers.

Question 7

Digitized information products like software and music,pioneers are unlikely to benefit from substantial economies of scale.

Question 8

Followers have the ability to take advantage of pioneers' positioning mistakes.

Question 9

Successful fast followers can leapfrog the pioneer with superior product technology,product quality,and customer service.

Question 10

Skimming or early withdrawal strategy may be used when early adopters are willing to pay a high price and demand is price inelastic.

Question 11

A niche penetration strategy is less attractive when there are few barriers to the entry of major competitors.

Question 12

A niche market penetration strategy is used if the product technology is patentable or difficult to copy.

Question 13

Pioneers cannot quickly add line extensions or modifications to their initial product.

Question 14

The pioneer has the opportunity to develop a product offering with attributes most important to the largest segment of customers or to promote the importance of attributes that favor its brand.

Question 15

Modified products providing similar performance at lower cost are called product repositionings.

Question 16

If the pioneer's initial product has technical limitations or design flaws,the follower can do little to overcome these weaknesses as the pioneers define the rules of the game.

Question 17

A niche penetration strategy is most appropriate when the new market is expected to grow quickly and there are a number of different benefits or application segments to appeal to.

Question 18

The primary objective of mass market penetration is to recoup development and commercialization costs as soon as possible.

Question 19

A follower will most likely succeed when there are few legal,technological,or financial barriers to inhibit entry.

Question 20

Followers typically enter a market after the decline phase of life cycle,and they start with low market shares relative to the established pioneers.

Question 21

A frontal attack is most likely to succeed when existing customers have strong brand preferences and loyalties.

Question 22

Which of the following advantages of a pioneer is best reflected in the idea that the pioneer's actions set standards for quality,price,and post-sale service which subsequent entrants must either meet or beat?

A)Economies of scale
B)High switching costs
C)Distribution advantage
D)Defining the rules of the game

Question 23

A relatively high price is appropriate for a skimming strategy to increase margins and revenues.

Question 24

_____ describes a situation where the value of a good or service to a customer increases as greater numbers of people adopt the good or service.

A)Economies of scale
B)Vertical integration
C)Positive network effects
D)Economies of scope

Question 25

An encirclement strategy makes sense when the market is not fragmented and consists of consumers with homogenous needs.

Question 26

Which of the following elements of marketing strategy is associated with having sufficient manufacturing capacity to pursue a mass-market strategy on a national basis?

A)Broad product line
B)High product quality
C)Large entry scale
D)Unique positioning

Question 27

Firms pursue niche penetration strategy to capture as many customers possible in the shortest time.

Question 28

Exporting lowers the financial risk involved for the pioneer when entering an unfamiliar foreign market.

Question 29

The market expansion strategy's primary objective is to maintain the large share of loyal customer groups who prefer the firm's initial product offering.

Question 30

Share-gaining businesses typically develop and add more new products,line extensions,or product modifications to their line than share-losing businesses.

Question 31

Innovative products manufactured by a company for the first time to create an entirely different market for consumers are known as:

A)product improvements.
B)product line additions.
C)new product lines.
D)new-to-the-world products.

Question 32

A flank attack is appropriate when the market can be broken into two or more large segments

Question 33

_____ refer to existing products that are targeted at new applications and new market segments.

A)Line extensions
B)Brand extensions
C)Innovations
D)Repositionings

Question 34

Which advantage to a pioneer is associated with the idea that the pioneer can gain a production advantage in terms of volume which might help it to lower its per-unit production costs at a faster rate than followers?

A)Distribution advantage
B)Economies of scale
C)First choice of market segments
D)High switching costs

Question 35

Niche marketing firms are typically characterized by unlimited product engineering skills and resources.

Question 36

A pioneer stands the best chance for long-term success in market-share leadership and profitability when:

A)its product line is narrow compared to direct competitors.
B)its marketing programs include relatively less advertising and promotional expenditures.
C)barriers to entry in the new product-market are low.
D)the firm has sufficient size,resources,and competencies

Question 37

Which of the following is NOT an advantage available to pioneers in product-markets?

A)Economies of scale and experience
B)High switching costs for early adopters
C)Distribution advantage
D)Minimum product acceptance risk

Question 38

The most basic defensive strategy is to continually strengthen a strongly held current position to build an impregnable fortress capable of repelling attacks by current or future competitors.

Question 39

A pioneer firm is more capable than a follower in taking advantage of:

A)latest technology in the market.
B)early positioning mistakes.
C)early product mistakes.
D)choice of segments and positions.

Question 40

HCB Computers is a software consulting firm.The company decides to launch a GSM based Smartphone,the first hardware product by the company,to capitalize on the increasing demand for smartphones.This is an example of a(n):

A)introducing a new product line.
B)addition to existing product line.
C)new-to-the world product.
D)improvement of the existing product.

Question 41

The _____ strategy is less likely to focus much on advertising.

A)mass-market penetration
B)skimming
C)delayed withdrawal
D)market expansion

Question 42

An American automobile manufacturer decides to enter China for the first time and launch a new brand of automobile.The company spends heavily on advertising before the launch of the product.The purpose of this is likely to be:

A)encouraging personal selling.
B)building awareness.
C)improving overall quality.
D)reducing the cost of promotions.

Question 43

Which type of marketing strategy has as its primary objective to maximize the number of triers and adopters only in a particular targeted market segment?

A)Mass-market penetration strategy
B)Niche penetration strategy
C)Skimming and early withdrawal strategy
D)Harvesting strategy

Question 44

Which of the following is a major objective of firms following a fortress strategy?

A)Increasing customer base by focusing on creating new products
B)Protecting against losses of customers by beating its competitors prices
C)Protecting against losses of customers by developing a second entry
D)Increasing satisfaction of customers by building on existing strengths

Question 45

Which of the following type of marketing strategy is most likely to focus primarily on maintaining leading share position in total market?

A)Niche penetration strategy
B)Personal selling strategy
C)Skimming and early withdrawal strategy
D)Mass-market penetration strategy

Question 46

Which of the following market characteristics is most likely to be associated with the niche marketing strategy?

A)Slow customer adaptation of new products
B)Limited potential demand
C)Homogeneous customer needs
D)Different applications and benefit segments

Question 47

A major difference between a skimming strategy and a mass-market penetration strategy is that:

A)skimming strategy requires more sales efforts.
B)mass-market penetration uses lower prices.
C)mass-market penetration has a short-term focus.
D)skimming strategy involves large-scale manufacturing.

Question 48

Mass-market penetration tends to be most successful for pioneers when:

A)entry barriers inhibit or delay the appearance of competitors.
B)the number of triers and adopters in a targeted market segment is less.
C)there is no scope for establishing network effects.
D)their marketing programs include relatively less promotional expenditures.

Question 49

Share maintenance for a market leader involves retaining current customers and:

A)stimulating selective demand.
B)increasing advertising.
C)building awareness.
D)improving product quality.

Question 50

Which of the following strategic elements is a characteristic of successful pioneers?

A)Small entry scale
B)High promotional expenditure
C)Up-to-date technology
D)Narrow product line

Question 51

Which of the following is the best example of a head-to-head positioning against competitive offerings or potential offerings?

A)Developing a second brand or product line with more appealing features
B)Providing more attention to internal quality control processes
C)Using reminder advertising for existing products
D)Investing more in smaller and slower-growing segments in an industry

Question 52

Niche penetration strategy differs from mass-market penetration strategy in that it:

A)is characterized by extensive salesforce efforts.
B)does not use heavy advertising.
C)avoids broad use of mass media.
D)has extensive introductory sales promotions.

Question 53

Exporting to an unfamiliar foreign market is beneficial to a pioneer because:

A)the entry barriers are high in exporting.
B)it gives high degree of control.
C)it lowers the financial risk involved.
D)it makes marketing and distribution easier.

Question 54

Which of the following is primarily associated with a flanker strategy?

A)Appeals to late adopters with same attributes and benefits offered to early adopters
B)Most appropriate for a market which is relatively homogeneous
C)Current and potential competitors always have relatively limited resources and competencies
D)Covers a weakness in original offering so as to maintain original adopters and seeks to gain new adopters

Question 55

A confrontation strategy:

A)focuses only on increasing the rate of purchase of its existing customers rather than investing on new customers.
B)is best suited for a relatively heterogeneous market with respect to customers' needs and purchase criteria.
C constantly improves the ability to win new customers who might otherwise be attracted to competitor's offering.
D)is usually employed by companies when their current and potential competitors have relatively limited resources and competencies.

Question 56

Which of the following is aimed at increasing customers' awareness of a product?

A)Increasing organizational quality control
B)Spending heavily on advertising
C)Including generic benefits in the product
D)Providing heavy incentives to customers

Question 57

A company whose primary objective is to recoup development and commercialization costs as soon as possible and which withdraws from market when increasing competition puts pressure on margins is practising the _____ strategy.

A)niche penetration
B)skimming
C)mass-market penetration
D)defender

Question 58

Tinker Bells,the company which had first come out with laundry detergent,enjoys a well established stable position in the present market.Its primary objective is to increase satisfaction,loyalty,and repeat purchase among current customers by building on existing strengths and appeal to late adopters with same attributes and benefits offered to early adopters.Given its relatively homogeneous market and the fact that its competitors have not succeeded in achieving its quality standards,the company's marketing strategy has proved to be successful.Which of the following marketing strategies is the company pursuing?

A)Market expansion strategy
B)Flanker strategy
C)Confrontation strategy
D)Fortress strategy

Question 59

Successful fast followers are characterized by their strategy of:

A)leapfrogging the pioneers' product technology.
B)introducing products with low cost and quality.
C)entering at a lower scale than pioneers.
D)maintaining extremely low promotional expenditure.

Question 60

Skimming and early withdrawal strategy is characterized by:

A)limited advertising to generate awareness.
B)heavy introductory sales promotions.
C)limited use of salesforce efforts.
D)broad use of mass media communications.

Question 61

A flank attack is most appropriate when:

A)there is relative homogeneity in the selected segment.
B)there is relative homogeneity in multiple segments.
C)the market can be broken into two or more large segments.
D)several underdeveloped segments exist in a market.

Question 62

Describe the factors that determine the selection marketing strategies to achieve share-maintenance.

Question 63

In a relatively homogeneous market,a company's primary objective is to protect against loss of share among current customers by meeting or beating a head-to-head competitive offering and to improve ability to win new customers who might otherwise be attracted to competitor's offering.This refers to the _____ strategy.

A)fortress
B)flanker
C)confrontation
D)market expansion

Question 64

A market leader,who enjoys high market share in its industry,develops a new brand with a price that is more appealing to a specific segment of its current customers who are already purchasing one of its existing brands.This is an example of the _____ strategy.

A)market expansion
B)fortress
C)flanker
D)confrontation

Question 65

Share maintenance for a market leader involves two important marketing objectives.What are these objectives?

Question 66

Which of the following is a market characteristic of a firm following an encirclement strategy?

A)Homogeneous market with respect to customers' needs and purchase criteria
B)Relatively heterogeneous market with many specialized segments
C)Presence of only two distinct market segments
D)Homogenous market with respect to customers' demand criteria

Question 67

A(n)_____ strategy involves targeting several smaller untapped or underdeveloped segments in the market simultaneously.

A)encirclement
B)frontal attack
C)leapfrog
D)flank attack

Question 68

A challenger should focus on attracting a larger share of potential new customers if the market is:

A)relatively early in the growth phase.
B)highly penetrated.
C)characterized by intense competition.
D)in the maturity phase of product development.

Question 69

A new market entrant attempts to challenge the market leader solely on the basis of low price.This is an example of using the _____ strategy.

A)leapfrog strategy
B)frontal attack
C)encirclement
D)flanking attack

Question 70

On the basis of the Booz,Allen & Hamilton study,distinguish graphically among categories of new products.Label axes of your graph,and label the positions of the major product groupings in terms of its newness to the market and company.

Question 71

Describe how a challenger can successfully implement a frontal attack.

Question 72

A frontal attack strategy is most likely to succeed when:

A)the market for a product category is relatively homogeneous.
B)existing customers have strong brand preferences or loyalties.
C)the follower imitates the target competitor's offering.
D)the target competitor's product does not benefit from positive network effects.

Question 73

Explain the conditions under which contraction or strategic withdrawal occurs.

Question 74

Describe the primary objectives of various growth strategies.

Question 75

What are the advantages of being a pioneer in a market?

Question 76

In what key ways do objectives associated with the major share maintenance strategies differ?

Question 77

What are the conditions required for a flank attack to be successful?

Question 78

What are the advantages of a entering a market using a follower strategy?

Question 79

A firm increases its ability to attract new customers by developing new product offerings aimed to capture a variety of user segments.It also improves its ability to retain current customers as market fragments.The firm is most likely pursuing the _____ strategy.

A)market expansion
B)fortress
C)confrontation
D)defensive

Question 80

Using a fortress strategy can very threatening when the:

A)market is fragmented into major segments.
B)market needs are homogeneous.
C)pioneer is has the highest market share.
D)market is characterized by large barriers to entry.