Exam

Name___________________________________

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
1) The ________ has the largest market share and usually shows the way to other firms in price changes, new-
product introductions, distribution coverage, and promotional intensity.
A) market challenger
B) market entrant
C) market follower
D) market nicher
E) market leader
Answer: E

2) When the total market expands, the ________ usually gains the most.
A) market challenger
B) market leader
C) market follower
D) market nicher
E) market entrant
Answer: B

3) When a firm looks for new users in groups that might use the product but do not, the firm is using the
________ strategy.
A) new-market segment
B) market-penetration
C) geographical-expansion
D) product development
E) diversification
Answer: B

5) When firms look for new users in groups that have never used the product before, the firm is using the
________ strategy.
A) new-market segment
B) market-penetration
C) geographical-expansion
D) product development
E) diversification
Answer: A

6) When Starbucks introduced its Tazo Tea line to bring in new customers who had never gone to Starbucks
because they don't drink coffee, Starbucks was employing a ________ strategy.
A) market-penetration
B) new-market segment
C) geographical-expansion
D) niche identification
E) blue-ocean
Answer: B

8) A market leader on the look out for more usage from existing customers should focus on increasing the
frequency of consumption and ________.
A) decreasing the product price
B) the product line
C) the amount of consumption
D) decreasing production turnover time
E) diversifying into unrelated markets
Answer: C
 9) Which of the following marketing strategies requires either identifying additional opportunities to use the
brand in the same basic way or identifying completely new and different ways to use the brand?
A) increasing the amount of consumption
B) decreasing the level of consumption
C) increasing dedication to consumption
D) increasing product innovation
E) increasing frequency of consumption
Answer: E

10) When food product companies advertise recipes that use their branded products in entirely different ways,
they are increasing the ________ of the brand.
A) amount of consumption
B) level of consumption
C) dedication to consumption
D) frequency of consumption
E) awareness consumption
Answer: D

11) Oliver, a company that produces different types of olive oil, launched a promotional campaign focusing on
the alternative uses of olive oil. What strategy is the company implementing to expand its total market
demand?
A) using the new-market segment strategy to attract new customers
B) improving the current level of product performance
C) advertising new and different applications of the brand
D) protecting its market share
E) using the market-penetration strategy to attract new customers
Answer: C

12) Clorox runs ads stressing the many benefits of its bleach, such as how it eliminates kitchen odors, in order to
generate additional opportunities to use the brand in the same basic way. This is an attempt to ________.
A) increase the amount of consumption
B) increase the level of consumption
C) increase the perception of consumption
D) increase the frequency of consumption
E) increase the emotional implications of consumption
Answer: D

14) To satisfy customers, a(n) ________ marketer finds a stated need and fills it.
A) creative
B) responsive
C) anticipative
D) laidback
E) inexperienced
Answer: B

15) A(n) ________ marketer looks ahead to needs customers may have in the near future.
A) laidback
B) creative
C) inexperienced
D) responsive
E) anticipative
Answer: E

16) A(n) ________ marketer discovers solutions customers did not ask for but to which they
enthusiastically respond.
 A) laidback
B) responsive
C) inexperienced
D) creative
E) anticipative
Answer: D

17) ________ marketers are not just market-driven, they are proactive market-driving firms.
A) Creative
B) Responsive
C) Inexperienced
D) Laidback
E) Anticipative
Answer: A

19) Which of the following is true about proactive marketing?

A) A company needs creative anticipation to see the writing on the wall.
B) Proactive companies create new offers to serve unmet and unknown consumer needs.
C) Proactive companies refrain from practicing uncertainty management.
D) A company needs responsive anticipation to devise innovative solutions.
E) Companies are winners when they are extremely risk-averse.
Answer: B

20) ________ defense involves occupying the most desirable market space in the minds of the consumers and
making the brand almost impregnable.
A) Position
B) Flank
C) Preemptive
D) Mobile
E) Contraction
Answer: A

21) A marketing manager has planned a strategy that will require the organization to erect outposts to protect its
weak front-running brands. In this ________ defense, the outposts will be central to the organization's new
competitive strategy.
A) position
B) flank
C) preemptive
D) counteroffensive
E) mobile
Answer: B

22) ________ is an aggressive maneuver where the firm attacks first, perhaps with guerrilla action across the
market and keeping everyone off balance.
A) Position defense
B) Flank defense
C) Contraction defense
D) Preemptive defense
E) Lateral defense
Answer: D

23) The defensive marketing strategy wherein a stream of new products are introduced by a firm and are
announced in advance are referred to as ________ defense.
A) mobile
B) counteroffensive
C) preemptive
 D) contraction
E) flank
Answer: C

24) If Microsoft announces plans for a new-product development, smaller firms may choose to concentrate their
development efforts in other directions to avoid head-to-head competition. In this example, Microsoft is
employing a ________ strategy.
A) preemptive defense
B) counteroffensive defense
C) mobile defense
D) flank defense
E) contraction defense
Answer: A

25) In a ________ defense strategy, the market leader can meet the attacker frontally and hit its flank, or launch a
pincer movement so that it's forced to pull back to defend itself.
A) position
B) counteroffensive
C) preemptive
D) contraction
E) flank
Answer: B

26) After Olay entered and took over the Indian market with its anti-aging lotion, Ponds decided to defend its
home turf by investing heavily in a similar product, but that which used only natural ingredients. This is an
example of a ________.
A) position defense
B) flank defense
C) counteroffensive defense
D) contraction defense
E) mobile defense
Answer: C

27) In ________, the market leader stretches its domain over new territories that can serve as future centers for
defense and offense.
A) counteroffensive defense
B) flank defense
C) contraction defense
D) mobile defense
E) position defense
Answer: D

28) Market broadening and market diversification are likely tactics employed in ________ strategies.
A) position defense
B) flank defense
C) preemptive defense
D) counteroffensive defense
E) mobile defense
Answer: E

29) When "petroleum" companies such as BP sought to recast themselves as "energy" companies, increasing their
research into the oil, coal, nuclear, hydroelectric, and chemical industries, these companies were employing a
________ strategy.
A) preemptive defense
B) counteroffensive defense
C) mobile defense
 D) flank defense
E) contraction defense
Answer: C

30) When large companies can no longer defend all their territory, they launch a ________ defense where they
give up weaker markets and reassign resources to stronger ones.
A) contraction
B) preemptive
C) flank
D) mobile
E) position
Answer: A

31) In 2006, Sara Lee spun off products that accounted for a large percentage of the company's revenues,
including its strong Hanes hosiery brand, so it could concentrate on its well-known food brands. In this
example, Sara Lee is employing a ________ strategy.
A) preemptive defense
B) counteroffensive defense
C) mobile defense
D) flank defense
E) contraction defense
Answer: E

32) A firm that is willing to maintain its market share, and not attack the leader and other competitors in an
aggressive bid for further market share, is known as a ________.
A) market challenger
B) market leader
C) market follower
D) market nicher
E) market entrant
Answer: C

33) For a market challenger, attacking ________ is a high risk but potentially high payoff strategy, which also
allows it to distance itself from other challengers.
A) a firm of its own size
B) the market leader
C) a regional firm
D) an underfinanced firm
E) a poorly performing firm
Answer: B

34) In a pure ________ attack, the attacker matches its opponent's product, advertising, price, and distribution.
A) guerilla
B) bypass
C) encirclement
D) frontal
E) flank
Answer: D

35) Epic Inc., a firm that produces chairs for offices, uses comparative advertising to inform the consumers that
its products offer the same features and quality as the competitor's. This is an example of a(n) ________
attack.
A) guerilla
B) frontal
C) encirclement
D) bypass
 E) flank
Answer: B

36) The ________ can be used when the challenger spots areas where the opponent is underperforming.
A) encirclement attack
B) frontal attack
C) flank-geographic attack
D) backwards-flank attack
E) guerilla warfare
Answer: C

37) Pepsodent launched a new product that could whiten teeth, fight decay, and maintain fresh breath.
Observing that Pepsodent did not focus on the dental sensitivity aspect, Colgate introduced a toothpaste
which did all of the above and also protected sensitive teeth. This is an example of a(n) ________ attack.
A) frontal
B) flank
C) guerrilla
D) encirclement
E) bypass
Answer: B

38) A(n) ________ is another name for identifying shifts in market segments that are causing gaps to develop,
then rushing in to fill the gaps and developing them into strong segments.
A) frontal attack strategy
B) flanking strategy
C) encircling strategy
D) counteroffensive strategy
E) bypass strategy
Answer: B

39) The ________ attack attempts to capture a significant share of the consumer market by launching a grand
offensive on several fronts.
A) frontal
B) bypass
C) flank
D) encirclement
E) guerrilla
Answer: D

40) Sally Seabrook is an up-and-coming marketing manager for a large department store chain. Ms. Seabrook
has distinguished herself with bold strategies such as launching attacks on her primary competitor from
several fronts, including advertising, new store openings, and new distributor alliances. Which of the
following market challenger attack strategies is Ms. Seabrook using to attack her competition?
A) frontal attack
B) bypass attack
C) guerrilla warfare
D) flank attack
E) encirclement attack
Answer: E

41) The ________ attack offers the firm an opportunity to diversify into unrelated products, into new
geographical markets, and leapfrogging into new technologies.
A) bypass
B) flank
C) frontal
D) guerrilla
 E) encirclement
Answer: A

42) Appy Juices, a company that manufactures bottled water, diversified into soft drinks before any of its
opponents could launch a diversified product. This would be an example of a(n) ________ attack.
A) flank
B) bypass
C) guerrilla
D) encirclement
E) frontal
Answer: B

43) A marketing manager has decided to "leapfrog" competition by moving into cutting-edge technologies. This
indirect approach to attacking competition can be characterized as ________.
A) flank attack
B) encirclement attack
C) bypass attack
D) guerrilla warfare
E) frontal attack
Answer: C

44) Selective price cuts, intense promotional blitzes, and occasional legal action are commonplace in the strategic
design of a(n) ________.
A) frontal attack
B) flank attack
C) bypass attack
D) encirclement attack
E) guerilla warfare
Answer: E

46) As a market follower strategy, the ________ duplicates the leader's product and packages and sells it on the
black market or through disreputable dealers.
A) innovator
B) cloner
C) imitator
D) adapter
E) counterfeiter
Answer: E

47) Aron, a company manufacturing snack food and soft drinks, replicates its product taste and packaging from
Lay's, a market leader in snack food industry. Later, it sells these imitated products on the black market. This
is an example of ________.
A) cloning
B) imitating
C) counterfeiting
D) adapting
E) innovating
Answer: C

48) As a market follower strategy, the ________ emulates the leader's products, name, and packaging, with slight
variations.
A) counterfeiter
B) cloner
C) imitator
D) adapter
E) innovator
 Answer: B

49) Amani, a company that manufactures cloth for suits, strives to be equal to Armani in product design, brand
name, and product packaging. This is an example of ________.
A) innovating
B) adapting
C) imitating
D) cloning
E) counterfeiting
Answer: D

50) Tasteeos, Fruit Rings, and Corn Flakes sell for nearly $1 a box less than leading cereal brands. Which market
follower strategy is being employed by the cereal manufacturer?
A) counterfeiter
B) cloner
C) imitator
D) adapter
E) reverse innovator
Answer: B

51) The ________ copies some things from the leader but differentiates on packaging, advertising, pricing, or
location.
A) innovate
B) adapt
C) cloner
D) imitator
E) counterfeiter
Answer: D

52) As a(n) ________, BurgerJacks, a fast food chain selling low-price burgers, has differentiated on location by
setting up base in the Middle East, a market which the current leader of the industry McDonalds has yet not
exploited.
A) cloner
B) imitator
C) counterfeiter
D) adapter
E) innovator
Answer: B

53) The TelePizza chain, which operates in Europe and Latin America, has copied Domino's service model but
maintains differentiation in terms of location. TelePizza is an example of a(n) ________.
A) counterfeiter
B) adopter
C) cloner
D) imitator
E) adapter
Answer: D

54) As a market follower, the ________ may choose to sell to different markets, but often it grows into a future
challenger.
A) imitator
B) adapter
C) cloner
D) counterfeiter
E) innovator
Answer: B
55) Redo is a market follower in the wristwatch industry. After noticing a shortfall in the market leader's
product, Redo improves its product to suit consumer needs and becomes a challenger for the market leader.
This is an example of ________.
A) counterfeiter
B) cloner
C) imitator
D) adapter
E) innovator
Answer: D

56) An alternative to being a market follower in a large market is to be a leader in a small market. This type of
competitor is called a ________.
A) marketing king
B) market nicher
C) segment king
D) guerilla marketer
E) strategic clone
Answer: B

57) A firm that serves small market segments that are not being served by bigger firms is known as a ________.
A) market challenger
B) market leader
C) market follower
D) market nicher
E) market entrant
Answer: D

58) The market leader strategy ensures high sales volume, whereas the market nicher strategy allows firms to
achieve ________.
A) high margin
B) low margin
C) high promotability
D) medium pricing
E) lower demand
Answer: A

59) Which of the following is true about market-nichers?

A) They are market followers in small markets.
B) They tend to have high manufacturing costs.
C) Their return on investment exceeds that in larger markets.
D) A nicher achieves high volume as against a mass marketer that achieves high margin.
E) They usually experience long-term losses.
Answer: C

66) ________ is the period of slow sales growth and nonexistent profits.
A) Growth
B) Decline
C) Maturity
D) Introduction
E) Stagnancy
Answer: D

67) Campbell Soups is a newly established company that specializes in preparing healthy but tasty food for
children under the age of 5. It is incurring huge productions costs, nonexistent profits, and slow sales
growth. The company is in the ________ phase of its life cycle.
 A) stagnancy
B) introduction
C) maturity
D) decline
E) growth
Answer: B

68) ________ is a period of rapid market acceptance and substantial profit improvement.
A) Stagnancy
B) Introduction
C) Maturity
D) Decline
E) Growth
Answer: E

69) A dance school in the Bronx teaches professional hip-hop and salsa. It is experiencing an increase in student
admissions, which is leading to substantial improvement in profits. The school is going through the ________
phase of its life cycle.
A) decline
B) stagnancy
C) growth
D) introduction
E) maturity
Answer: C

70) ________ is a slowdown in sales growth because the product has achieved acceptance by most potential
buyers.
A) Obsolescence
B) Introduction
C) Growth
D) Decline
E) Maturity
Answer: E

71) A music school in Boyles Height, LA, specializes in teaching the guitar and the violin. After a spurt in
growth and a few successful years, the school is experiencing a slowdown in sales and stability in its profits
due to an increase in competition. The school is in the ________ stage of its life cycle.
A) introduction
B) growth
C) decline
D) maturity
E) obsolescence
Answer: D

72) During the ________ stage of a product's life cycle, sales show a downward drift and profits erode.
A) introduction
B) growth
C) decline
D) obsolescence
E) maturity
Answer: C

73) After a couple of years of successful business, an experimental theatre company based in Aurora is unable to
sell tickets for its theatre shows. They have been using profits from previous shows to run the business. The
company is in the ________ phase of its life cycle.
 A) maturity
B) obsolescence
C) introduction
D) growth
E) decline
Answer: E

75) One of the ways to change the course of a brand is to modify the product. Under product modification,
________ adds size, weight, materials, supplements, and accessories that expand the product's performance,
versatility, safety, or convenience.
A) feature improvement
B) quality improvement
C) style improvement
D) size improvement
E) technological improvement
Answer: A

76) An alternate way to increase sales volume is to expand the number of users. This can be done by ________.
A) having consumers use the product on more occasions
B) having consumers use more of the product on each occasion
C) having consumers use the product in new ways
D) remaining in the current market segment
E) attracting competitors' customers
Answer: E

77) An alternate way to increase sales volume is to increase the usage rate among users. This can be done by
________.
A) converting nonusers
B) having consumers use less of the product on each occasion
C) having consumers use the product on more occasions
D) attracting competitors' customers
E) entering new market segments
Answer: C

78) ________ is a distribution strategy that can be effectively used during the growth stage of the product life
cycle.
A) Building product awareness
B) Phasing out unprofitable outlets
C) Building selective distribution
D) Building intensive distribution
E) Stressing on brand differences
Answer: D

TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false.
81) When the total market expands, the dominant firm usually gains the most.
Answer: True False

82) The market leader should look for new customers or more usage from existing customers.
Answer: True False

83) A market-penetration strategy is one where a company searches for new customers in a group that has never
used a product before.
Answer: True False

84) One way to increase the frequency of consumption of a product by consumers is by introducing it in larger
package sizes.
 Answer: True False

85) Increasing amount of consumption requires identifying additional opportunities to use the brand in the same
basic way.
Answer: True False

88) A responsive marketer looks ahead to needs customers may have in the near future.
Answer: True False

89) An anticipative marketer finds a stated need and fills it.

Answer: True False

90) A creative marketer discovers solutions customers did not ask for but to which they enthusiastically
respond.
Answer: True False

91) Position defense means occupying the most desirable market space in consumers' minds, making the brand
almost impregnable.
Answer: True False

92) In counteroffensive marketing, the market leader can meet the attacker frontally and hit its flank, or launch a
pincer movement so that it is forced to pull back to defend itself.
Answer: True False

93) In contraction defense, the leader stretches its domain over new territories through market broadening and
market diversification.
Answer: True False

94) Market diversification shifts the company's focus to unrelated industries.

Answer: True False

95) Market challengers are companies that attack the leader and other competitors in an aggressive bid for
further market share.
Answer: True False

96) Attacking the market leader proves successful and beneficial only when the leader is not serving the market
well.
Answer: True False

97) A frontal attacking strategy is another name for identifying shifts that are causing gaps to develop, then
rushing to fill the gaps.
Answer: True False

98) Encirclement attempts to capture a wide slice of territory by launching a grand offensive on several fronts.
Answer: True False

99) Guerrilla attacks consist of small, intermittent attacks, conventional and unconventional, including selective
price cuts, intense promotional blitzes, and occasional legal action.
Answer: True False

100) As a market-follower strategy, a counterfeiter emulates the leader's products, name, and packaging, with
slight variations.
Answer: True False

101) As a market-follower strategy, an imitator duplicates the leader's product and packages and sells it on the
black market or through disreputable dealers.
Answer: True False

102) As a market-follower strategy, an adapter takes the leader's products and adapts or improves them.
Answer: True False

103) Firms with low shares of the total market can become highly profitable through smart niching.
Answer: True False

104) An alternative to being a follower in a large market is to be a leader in a small market.

Answer: True False

105) The nicher achieves high sales volume, whereas the mass marketer achieves high margin.
Answer: True False

106) The growth stage of a product's life cycle is a period of rapid market acceptance and substantial profit
improvement.
Answer: True False

107) During the maturity stage of a product life cycle, profits stabilize or decline because of increased
competition.
Answer: True False

111) Price, distribution, and communication are the nonproduct elements that marketers modify to increase
product sales.
Answer: True False

112) An alternate way to increase sales volume is to expand the number of users by having them consume more
of the product on each occasion.
Answer: True False

113) An alternate way to increase sales volume is to expand the number of users by converting nonusers.
Answer: True False

114) An alternate way to increase sales volume is to increase the usage rates among users by having consumers
use the product in new ways.
Answer: True False

115) An alternate way to increase sales volume is to increase the usage rates among users by entering new market
segments.
Answer: True False

116) The prime objective, during the introduction stage of a product life cycle, is to maximize market share.
Answer: True False

117) The product strategy during the maturity stage of the product life cycle should be to build more intensive
distribution.
Answer: True False