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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
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
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
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
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"
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
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
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
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
126) Which of the following statements is most likely true of market follower strategies?
A) Market followers have the resources to expand the market by developing new users, new
uses, and more usage of its products.
B) Market followers must expand internationally first to ensure distribution effectiveness, cost
savings, and quality control.
C) Market followers should conduct indirect attacks on competitors' weaknesses to gain market
share quickly and inexpensively.
D) Market followers benefit from pursuing subsegments of target markets due to their limited
resources.
E) Market followers must keep manufacturing costs and prices low or product quality and
services high.
127) Almost every industry includes firms that specialize in serving target subsegments called
market ________.
A) niches
B) mavens
C) baskets
D) indicators
E) mixes
128) Market niching is profitable because the company ________.
A) copies or improves on the leader's products and programs, usually with much less
investment
B) bears the cost of developing new products and markets, expanding distribution, and
educating the market
C) knows the needs of the target customer segment better than other firms that casually attempt
to sell to the same segment
D) either keeps its manufacturing costs and prices low or its product quality and services high
E) can achieve economies of scale much faster by selling the same product to the global market
129) Whereas the mass marketer achieves ________, the nicher achieves ________.
A) low margins; low volume
B) low volume; high margins
C) high volume; high margins
D) high volume; low margins
E) high margins; high volume
130) Computer mouse and interface device maker AdvTechPRO is only a fraction the size of
software giant Terminal Time Software Inc. AdvTechPRO manufactures every variation of
computer mouse imaginable (for left-handed people, wireless mice, shaped like actual mice,
LED mice, etc.). Through skillful ________, the firm dominates the PC mouse market, with
Terminal Time Software as its runner up.
A) centralization techniques
B) niching
C) brand imaging
D) vertical integration
E) benchmarking
131) Which of the following is most critical for successful niching?
A) catering to global markets
B) buzz marketing
C) follow-up
D) specialization
E) mass appeal of one idea
132) A market nicher can most likely specialize along all of the following lines EXCEPT
________.
A) specific end users
B) unique products
C) customized services
D) quality-price
E) mass marketing
133) The market subsegment that a company exclusively caters to may dry up, or it might grow
to the point that it attracts larger competitors. This is why such companies practice ________.
A) multiple niching
B) mass marketing
C) overall cost leadership
D) low-price strategies
E) dumping
Refer to the scenario below to answer the following question(s).
Essential-Beauty is a rapidly growing firm that manufactures women's makeup, perfumes, and
nail-care products. The company has established itself as a high-end cosmetic product brand
available at most national drug stores. In the past, almost all of the advertising for Essential-
Beauty has been in women's fashion magazines.
The firm is now launching a new line of skin care products, ranging from facial cleansers to
body lotion. These products are designed to be marketed to a broader audience, so the
marketing team is exploring the effectiveness of different promotional mixes.
134) Before deciding to launch the new line of products, Essential-Beauty conducted extensive
market research to make sure the products were optimally positioned. A complete marketing
plan including mobile advertising, magazine advertising, event sponsorship, and sales
promotions was established long before the products themselves were ready for market. In this
case, Essential-Beauty was using ________.
A) cost leadership
B) entrepreneurial marketing
C) intrepreneurial marketing
D) formulated marketing
E) operational excellence
135) Companies with multiple products or businesses typically choose one marketing strategy
for all their different businesses or products.
136) Formulated marketing focuses on the entrepreneurial aspects of marketing.
137) Entrepreneurial marketing exclusively involves developing formal marketing strategies
and adhering to them closely.
138) Many large and mature companies get stuck in formulated marketing. They pore over the
latest Nielsen numbers, scan market research reports, and try to fine-tune their competitive
strategies and programs.
139) Gary Hirshberg started the Stonyfield Farm yogurt company. His marketing strategy:
building a casual bond with customers using guerilla marketing. This is an example of
formulated marketing.
140) According to the overall cost leadership competitive strategy, the company works hard to
achieve the lowest production and distribution costs.
141) Firms competing in a given target market, at any point in time, are similar in their
objectives and resources.
142) Market challengers can grow by further increasing their market shares.
143) Michael Porter suggested four basic competitive positioning strategies that companies can
follow, three winning strategies and one losing one. Name and describe these four different
strategies.
144) Name the three value disciplines.
145) Explain how a market follower can gain advantage from a market leader.
146) Why is niching profitable?
147) Discuss formal and informal marketing strategies and give examples of companies that
follow these strategies.
148) Discuss customer intimacy. Why is it important? Provide an example of a company that
successfully abides by this value discipline.
149) Compare and contrast the four competitive positions that are often used to describe market
structures.
150) Discuss two ways a market challenger can best attack the chosen competitor and achieve
its strategic objectives. Explain when a challenger should use these attacks and provide
examples of companies that have used these methods.
151) A company can become so ________ centered that it loses its even more important focus
on maintaining profitable ________ relationships.
A) customer; competitor
B) competitor; customer
C) market; customer
D) market; competitor
E) competitor; product
152) Which of the following is a positive aspect of a competitor-centered company?
A) It carries out its own customer relationship strategy.
B) It bases its own moves on competitors' moves.
C) It searches out competitors' weaknesses.
D) It concentrates its resources on delivering superior value to target customers.
E) It ends up seeking innovative ways to create more value for customers.
153) Which of the following is a negative aspect of a competitor-centered company?
A) It may end up simply matching industry practices.
B) It fails to identify competitors' weaknesses.
C) It becomes stable and unreactive.
D) It fails to notice weaknesses in its own position.
E) It fails to develop a fighter orientation.
154) A company that focuses on customer developments in designing its marketing strategies
and on delivering superior value to its target customers is a ________ company.
A) market-centered
B) cost-centered
C) competitor-centered
D) customer-centered
E) product-centered
155) A company that is in a good position to identify new opportunities is a ________
company.
A) market-centered
B) cost-centered
C) competitor-centered
D) product-centered
E) customer-centered
156) Which of the following does NOT apply to a customer-centered company?
A) watching customer needs evolve
B) deciding what customer groups are the most important to serve
C) matching or extending industry practices
D) focusing the resources on delivering superior value to target customers
E) setting long-range strategies that make sense
157) When companies watch both their buyers and their competitors, they are called ________
companies.
A) product-centered
B) market-centered
C) customer-centered
D) competitor-centered
E) cost-centered
158) Which is NOT one of the four orientations a company may have?
A) customer
B) product
C) competitor
D) market
E) cost
159) A product-oriented company focuses on ________.
A) the competitors' products
B) the customers' needs
C) its own products
D) the selling process
E) the competitors and the customers
160) Greener-grass Inc. is a lawn care company providing landscaping and lawn maintenance
services to customers in and around Kansas City. The marketing team at Greener-grass
carefully tracks the moves of competing companies, watching for shifting strategies and new
promotions. The marketing team is also in constant touch with customers, using surveys and
other feedback methods to find out what kind of services customers value the most. Greener-
grass is most accurately described as having a ________ orientation.
A) market
B) product
C) customer
D) competitor
E) leadership
161) An advantage of a competitor-centered company is that it ends up simply matching or
extending industry practices rather than seeking innovative new ways to create more value for
customers.
162) A market-centered company most likely has a stronger competitor and customer focus
than a customer-centered company.
163) What is the primary focus of a competitor-centered company?
164) What is the primary focus of a customer-centered company?
165) Discuss the four evolving company orientations. Which orientation is considered most
successful and why?
