Principles of Marketing, 17e, Global Edition (Kotler/Armstrong)
Chapter 18 Creating Competitive Advantage
1) A competitor analysis requires the assessment of all of the following EXCEPT the
competitors’ ________.
A) objectives
B) organizational hierarchy
C) strategies
D) strengths and weaknesses
E) reaction patterns
2) Strategies that strongly position a company against competitors and that give the company
the best possible strategic advantage are ________ strategies.
A) competitor analysis
B) customer relationship
C) competitive marketing
D) competitive relationship
E) customer identification
3) Gaining ________ requires delivering more value and satisfaction to target consumers than
competitors do.
A) competitive advantage
B) first-mover advantage
C) economies of scale
D) comparative advantage
E) differentiation
4) The first step in initiating competitive marketing strategies is to ________.
A) balance customer and competitor orientations
B) design broad competitive marketing strategies
C) assess long-term organizational objectives
D) conduct competitor analysis
E) conduct transaction analysis
5) ________ involves first identifying and assessing competitors and then selecting which
competitors to attack or avoid.
A) Competitor analysis
B) Self-competition
C) Blue ocean strategy
D) Quantitative analysis
E) Perfect competition
6) To plan effective marketing strategies, a company needs to find out all it can about its
competitors. It must constantly compare its marketing strategies, products, prices, channels, and
promotions with those of close competitors. This is an example of ________.
A) blue ocean strategy
B) competitor analysis
C) organizational evaluation
D) perfect competition
E) quantitative analysis
7) The goal of performing a competitor analysis is to ________.
A) learn more about the competitors’ sales structures
B) find flaws in the competitors’ manufacturing processes
C) copy the best features that the competitors offer
D) find areas of potential competitive advantage and disadvantage
E) develop products in markets that the competitors are not in
8) Companies can identify their competitors from both ________ points of view.
A) industry and market
B) product and customer
C) customer and location
D) location and product
E) product and strategy
9) Companies can identify competitors from a(n) ________ point of view by defining
competitors as companies that are trying to satisfy the same customer need or build
relationships with the same customer group.
A) customer
B) blue ocean
C) market
D) myopic
E) industry
10) Companies can identify competitors from one of two points of view: ________.
A) manufacturing or selling
B) engineering or producing
C) consumer or business
D) industry or market
E) unique or similar
11) If a company identifies its competitors from an industry point of view, it must understand
________ if it hopes to be an effective player in that industry.
A) the trends in the industry
B) the primary customers
C) the impact of technological changes
D) the potential customers
E) the competitive patterns
12) A company is guilty of ________ if the company forgets latent competitors and only
focuses on current competitors.
A) perfect competition
B) self-competition
C) Cournot competition
D) competitor backlinking
E) competitor myopia
13) Kodak’s film business didn’t lose out to direct competitor Fujifilm; it lost out to Sony,
Canon, and other digital camera makers, along with a host of digital image developers and
online image sharing services. This is an example of ________.
A) a blue ocean strategy
B) competitor backlinking
C) self-competition
D) competitor myopia
E) marketing myopia
14) Fosters and Mason House, two major coffee brands, competed neck and neck based on their
product attributes and price promotions. They were soon blindsided by the arrival of
Starcoffeez, which focused more on the coffee experience rather than the coffee. This resulted
in major losses for the two companies. This is an example of ________.
A) self-competition
B) competitor myopia
C) competitor backlinking
D) marketing myopia
E) perfect competition
15) From a(n) ________ point of view, Pepsi might see its competition as Coca-Cola, Dr
Pepper, 7UP, and the makers of other soft drink brands. From a(n) ________ point of view,
however, the customer really wants “thirst quenching.”
A) market; industry
B) market; consumer
C) industry; competitive
D) industry; market
E) company’s; consumer’s
16) Nintendo, producer of the Wii video game console, might define its competitors as other
makers of physically interactive video games. But from a(n) ________ point of view, it would
include all firms making physically interactive recreational products.
A) industry
B) market
C) segment
D) niche
E) interdependent
17) From a market point of view, Universal Pictures film studio might see its competition as
________.
A) Paramount Pictures
B) Warner Bros. Pictures
C) Walt Disney Pictures
D) 20th Century Fox
E) Broadway
18) From an industry point of view, Universal Pictures film studio might see its competition as
________.
A) West End theatre
B) Columbia Pictures
C) Tomorrowland
D) Summerfest
E) HarperCollins
19) What is the LEAST relevant question to ask when assessing a firm’s main competitor?
A) What are the competitor’s objectives?
B) What is the competitor’s strategy?
C) What are the competitor’s strengths?
D) What are the competitor’s locations?
E) What are the competitor’s weaknesses?
20) Each competitor has a mix of objectives. The company wants to know the relative
importance that a competitor places on all of the following EXCEPT ________.
A) company history
B) current profitability
C) market share growth
D) cash flow
E) technological leadership
21) A company’s objectives indicate its satisfaction with its current situation and ________.
A) its strength with its current management
B) in what areas it intends to develop further
C) how strong it is financially
D) how it might react to different competitive actions
E) its areas of concern, if any
22) A company that pursues ________ will react much more strongly to a competitor’s cost
reducing manufacturing breakthrough than to the same competitor’s advertising increase.
A) product differentiation
B) low-cost leadership
C) customer intimacy
D) a middle-of-the-roaders strategy
E) product leadership
23) In the context of identifying competitors’ strategies, the more that one firm’s strategy
resembles another firm’s strategy, the more likely the two firms are to ________.
A) merge
B) compete
C) globalize
D) form a partnership
E) become market leaders
24) Companies need to know each competitor’s product quality, features, and mix; customer
services; pricing policy; distribution coverage; sales force strategy; and advertising and sales
promotion programs. These are all the dimensions that identify ________ groups within the
industry.
A) target
B) focus
C) control
D) strategic
E) experimental
25) An analysis conducted to determine what benefits target customers value and how they rate
the relative value of various competitors’ offers is known as ________.
A) customer lifetime value
B) customer value analysis
C) quantitative analysis
D) brand value proposition
E) benchmarking
26) In the audio equipment industry, Philips and Sony belong to the same ________.
A) target group
B) strategic group
C) experimental group
D) control group
E) focus group
27) Country Kitchen and Perkins are both a chain of family restaurants featuring diner-like
menus with reasonably priced items. These companies are in the same ________.
A) focus group
B) control group
C) strategic group
D) target group
E) experimental group
28) Companies use secondary data, personal experience, and word of mouth to ________.
A) identify competitors’ target customers and strategies
B) identify competitors’ target locations and market share
C) learn about their competitors’ strengths and weaknesses
D) select competitors to attack or avoid
E) estimate competitors’ sales projections
29) ________ is the process of comparing the company’s products and processes to those of
competitors or leading firms in other industries to find ways to improve quality and
performance.
A) Segmenting
B) Positioning
C) Sales promotion
D) Benchmarking
E) Publicity
30) Most companies will compete with ________ rather than ________.
A) distant competitors; close competitors
B) close competitors; distant competitors
C) benchmarkers; distant competitors
D) market challengers; market followers
E) market challengers; market nichers
31) Benchmarking has become a powerful tool for increasing a company’s ________.
A) product mix
B) mass appeal
C) employee training services
D) distribution channels
E) competitiveness
32) A company’s close competitors are ________.
A) considered “bad” competitors
B) a serious threat and hence, must be attacked rather than ignored
C) those that most resemble the company’s operations
D) typically ignored as they seldom pose any threat
E) the sole focus of successful companies
33) Marketers need an in-depth understanding of ________ if they want to anticipate how that
competitor will act.
A) the industry
B) a competitor’s mentality
C) a competitor’s strengths and weaknesses
D) a competitor’s business model
E) the market
34) Which of the following are examples of close competitors?
A) Applebee’s and Subway
B) Taco Bell and T.G.I. Friday’s
C) Pizza Hut and Burger King
D) McDonald’s and Taco Bell
E) McDonald’s and Burger King
35) A firm should compete with ________ competitors in order to sharpen its abilities.
Succeeding against these competitors often provides greater returns.
A) strong
B) international
C) weak
D) distant
E) smaller
36) In conducting ________, the company first identifies the major attributes that customers
value and the importance customers place on these attributes. Next, it assesses its performance
against competitors on those valued attributes.
A) a customer value analysis
B) benchmarking
C) entrepreneurial marketing
D) intrepreneurial marketing
E) a customer lifetime value estimate
37) A market research firm conducts a survey of soft-drink consumers to assess Pepsi’s and
Coke’s strengths and weaknesses in attributes valued by both company’s target customers. The
market research firm is using a ________.
A) customer lifetime value estimation
B) global marketing strategy
C) competitive marketing strategy
D) customer value analysis
E) blue ocean strategy
38) If a company’s offer delivers greater value by exceeding the competitor’s offer on important
attributes, the company can charge a higher price and ________, or it can charge the same price
and ________.
A) earn lower profits; gain higher profits
B) earn higher profits; lose profits
C) earn higher profits; gain more market share
D) lose profits; gain more market share
E) lose profits; gain higher profits
39) What is most likely a strategic benefit of the existence of competitors?
A) Competitors seldom lead to product differentiation.
B) Competitors help legitimize new technologies.
C) Competitors exclusively serve more-attractive segments.
D) Competitors fracture the target market.
E) Competitors decrease the total demand.
40) An industry often contains “good” and “bad” competitors. Good competitors ________.
A) break the rules of fair competition
B) ensure minimum competition between firms
C) play by the rules of the industry
D) typically dominate the market
E) share their marketing strategies with other firms
41) Most competitors in the music download industry see Apple’s iTunes Music Store as a
________ because it created a closed system with mass appeal.
A) good competitor
B) marginal competitor
C) weak competitor
D) bad competitor
E) distant competitor
42) Rather than competing head to head with established competitors, many companies seek
out unoccupied positions in uncontested market spaces. They try to create products and services
for which there are no direct competitors. This is called a ________.
A) horizontal integration approach
B) commercialization process
C) guerrilla marketing technique
D) blue ocean strategy
E) lean dynamics approach
43) An example of a company exhibiting a blue ocean strategy is ________.
A) Amazon’s online shopping convenience
B) a Starbucks opening in the same vicinity of an independent coffee house
C) Nike’s brand image of the “swoosh”
D) Whirlpool’s full line of medium-priced, energy-saving appliances
E) the first digital tablet iPad released by Apple
44) Tomorrow’s leading companies will succeed by seeking out unoccupied positions in
uncontested market spaces. Such strategic moves, termed ________, create powerful leaps in
value for both the firm and its buyers, creating new demand for new products.
A) customer lifetime value
B) customer equity
C) value innovation
D) market segmentation
E) customer intimacy
45) Which of the following is the first step taken in the competitive intelligence system?
A) collect published data and information from the field
B) check, interpret, and organize gathered information
C) identify the vital types of competitive information needed
D) respond to inquiries from managers about competitors
E) create a new brand image and marketing concept for the firm
46) The competitive intelligence system continuously collects information from the field
through ________.
A) government publications
B) online monitoring
C) speeches
D) online databases
E) market surveys
47) The competitive intelligence system does all of the following EXCEPT ________.
A) sends relevant information to decision makers and responds to inquiries from managers
B) takes action against the competitors once the data has been analyzed
C) collects information from the field and published data
D) checks the information for validity, interprets it, and organizes it
E) identifies vital types of competitive information needed and the best sources
48) Essential-Beauty considers one of its most important competitors to be Look-Lovely,
another marketer of high-end makeup and skin care products sold in drug stores. Based on this,
it is most accurate to say that Look-Lovely and Essential-Beauty are both ________.
A) niche marketers
B) in the same strategic group
C) distant competitors
D) overall cost leaders
E) market followers
49) Essential-Beauty e-mailed a survey to a group of its most frequent, loyal customers. The
survey asked what makeup and skin care characteristics were most important to them. The
company’s marketing staff then ranked the performance of Essential-Beauty products in each of
these categories. Essentials was conducting a(n) ________.
A) customer lifetime value survey
B) entrepreneurial marketing strategy
C) intrepreneurial marketing strategy
D) customer value proposition
E) customer value analysis
50) Customers see competitive advantages as customer advantages.
51) To plan effective marketing strategies, the company must ignore its competitors.
52) A competitive analysis involves first identifying and assessing competitors and then
selecting which competitors to attack or avoid.
53) At the narrowest level, a company can define its competitors as other companies offering
similar products and services to the same customers at similar prices.
54) A group of firms in an industry following the same or a similar strategy in a given target
market is known as a strategic group.
55) Companies in competition within a strategic group do not compete with other strategic
groups.
56) “Destroying” a close competitor can actually damage a company’s market share in the long
run.
57) Benchmarking involves comparing the firm’s products and processes to those of the
competitors to identify best practices to improve quality and performance.
58) Continuous innovation is a weak response by a company trying to protect its market share.
59) Most companies prefer to compete against strong competitors.
60) Competitive exchanges such as comparison advertisements can provide useful information
to consumers and advantages from brands. However, they also might reflect negatively on the
entire industry.
61) In some markets, competitors live in relative harmony.
62) Competitors may serve less-attractive segments or lead to more product differentiation.
63) The existence of competitors in a market may cause a decrease in total demand.
64) The goal of a “blue ocean strategy” is to make competition irrelevant.
65) The competitive intelligence system of a company supplies key information to relevant
decision makers about the company’s competitors.
66) A good competitor plays by its own rules at the expense of the industry as a whole.
67) Discuss the steps in analyzing competitors.