Multiple Choice Questions

[여기에 입력]
MULTIPLE CHOICE QUESTIONS
1) The _________________ involves creation of substantial new value for

customers and the firm by creatively changing one or more
dimensions of the business.
a) Process of innovation
b) Process of expansion
c) Process of modification
d) None of the above
2) A first-mover advantage is nearly always trumped by _____________,

who are not just quick but also better.
a) Laggards
b) Early followers
c) Late entrants
3) Short-term business pressures often undermine innovation

because.
a) CEOs want returns from marketing in 6-12 months
b) Resources are taken from short-term initiatives to hit long-
term targets
c) Marketing practices for market-based assets impact
accounting decisions
d) All of the above
b) Resources are taken from long-term initiatives to hit short-term
targets
c) Accounting practices for market-based assets impact decisions
4) _____________ refers to the core value that the performance of the

product/service offers the customer, absent any brand or
relationship equity effects.
a) Competitive advantage
b) Offering yield
c) Offering equity
[여기에 입력]
[여기에 입력]
5) ________________ is a process to increase the speed of a firm’s offering

development and enhance its likelihood of success.
a) Segmentation
b) Stage-gate approach
c) Innovation
6) Which of the following are the ways a firm can innovate?

a) Change what the firm offers
b) Changing who the customer is
c) Changing where to sell to customers
d) All of the above
7) Greater offering equity, generated from a firm’s new and

innovative products/services leads to _____________ (check all that
apply).
a) SCA
b) Superior sales
c) Increased competition
d) Superior profit
8) The following are the ways for a firm to change who the customer
is (check all that apply).
a) Provide a total solution: solution - what
b) Change customer interactions : experience
c) Change firm structure: organization - how
d) Change customers to target : customer
e) Change how customers pay: value capture
9) _____________ means that once developers/designers accept some

new feature, they perceive its great value – far more than would be
assigned the feature by non-users.
a) New offering bias
b) Non-user bias
c) Designer’s curse
[여기에 입력]
[여기에 입력]
10) Which of the following is not true about disruptive innovation.

a) It involves a disruptive positioning and higher risk
b) Focuses on the blue ocean
c) Market space is well -defined
d) Demand is created rather than fought over (no direct
competition)
11) _______________ refers to an innovative offering that results from

dramatically repositioning an existing offering so that the total
offering appeals to a different customer segment with a ‘new’
proposition.
a) Repositioning Strategy
b) Positioning strategy
c) Disruptive strategy
12) Which of the following ways does marketing directly help in

creating innovation strategies? (check all that apply).
a) Collecting customer inputs
b) Forecasting market trends
c) Lowering profit volatility
d) All of the above
13) Which of the following items can you get or derive from a Conjoint
Analysis?
a) Data product design matrix
b) Customer preferences on a new product
c) Customer preferences on different product attributes
d) Both B and C
14) ______________ attempt to capture a portion of the existing market,
and account for the majority of sales, but earn lower relative profit
levels.
a) Blue ocean strategies
b) Black ocean strategies
c) Red ocean strategies
[여기에 입력]
[여기에 입력]
15) _____________ aim at transforming the image of competitors brand

features, such that they become a negative attribute in the new
market.
a) Blue ocean strategies
b) Black ocean strategies
c) Red ocean strategies
16) The basic intuition in Jugaad is that:

a) It requires the same stage-gate process for all innovative ideas
b) Agile innovation practices can vary with each problem stage
and product
c) It seeks conventional solutions to problems
17) ________________ leads to continuous, incremental improvements

over time.
a) Sustaining technology
b) Innovative technology
c) Disruptive technology
18) With its very different price and performance characteristics,

________________ improves very quickly.
a) Sustaining technology
b) Innovative technology
c) Disruptive technology
19) _______________ are the first to adopt, often before the new offering
even is officially launched.
a) Innovators
b) Early adopters
c) Early majority
[여기에 입력]
[여기에 입력]
20) _______________ see the benefits of the new technology and are
willing to adopt it after just a few references.
a) Innovators
b) Early adopters
c) Early majority
21) The ______________ consists of much more pragmatic consumers,
who need to be convinced that the new product really works.
a) Innovators
b) Early adopters
c) Early majority
22) The _____________ and _____________ want more evidence, but they are
especially hard to persuade (check all that apply).
a) Laggards
b) Early majority
c) Late majority
23) In Moore’s adoption cycle, the concept of _____________ refers to

many new offerings failing to survive the jump from the early
adopters to the early majority groups.
a) Crossing the chasm
b) Switching strategy
c) Breaking barriers
24) Which of the following is not true about the adoption lifecycle?
a) Innovators are the first to adopt, often before the new offering
even is officially launched
b) Early adopters see the benefits of the new technology and are
willing to adopt it after just a few references
c) The laggards consist of much more pragmatic consumers, who
need to be convinced that the new product really works
d) Both of the last two groups, late majority and laggards, also
want more evidence, but they are especially hard to persuade
[여기에 입력]
[여기에 입력]
- pragmatic: 실용적인
-early majorities: More pragmatic, such that they must be
convinced that the new product really works
-laggards: Need the most evidence to persuade
25) Changing the following factors can alter the rate of product
diffusion, all else being equal (check all that apply).
a) Complexity
b) Trialability
c) Relative advantage
d) All of the above + compatibility, observability
26) What is a part-worth in Conjoint Analysis?
e) Data you need to run Conjoint Analysis
f) Measure the likelihood of choosing a product
g) Measure the preference toward a product
h) Measure the preference toward levels of product attributes
27) Which of these factors is not important to early adoption.
a) Observability
b) Compatibility
c) Lowest price
d) Relative advantage
28) _____________ helps marketers design and develop new products by
thinking of products as bundles of attributes, then determining
which combination of attributes is best suited to meet the
preferences of customers.
a) Choice models
b) Conjoint analysis
c) Perceptual maps
29) The ______________ captures many of the people-and-product-based
factors, but it also integrates pricing and advertising levels to
predict adoption rates.
a) Bass model
b) Choice model
c) Choice model
TRUE/FALSE QUESTIONS
[여기에 입력]
[여기에 입력]
30) Most firms rank innovation as a top strategic priority. Innovation

involves more than new technologies or products; it can reflect
changes in business processes or go-to-market strategies.
Answer: TRUE
31) Firms can innovate in four primary ways: changing their offering,
changing who the customer is, changing when they sell to
customers or changing where they sell.
Answer: FALSE (how they sell, not when)
32) A first-mover advantage is often short-lived, but once a firm has a
radical innovation, they don’t need to create offering equity.
Answer: FALSE
33) A stage-gate development process improves the speed of product
development, the success likelihood, and the development costs.
Answer: TRUE
34) Conjoint analysis can facilitate the design and launch of new
offerings by helping managers define the lowest price product.
Answer: FALSE (product with the highest value, not necessarily
the lowest price product)
35) The Bass model captures many of the people- and product-based
factors, but cannot integrates pricing and advertising levels to
predict adoption rates.
Answer: FALSE
36) Specific product characteristics generally capture 40–80 percent
of the variation in the speed with which offerings diffuse.
Answer: TRUE
37) On average, 75% of the new product meets consumer objectives,
but not sales goals.
Answer: FALSE
[여기에 입력]
[여기에 입력]
38) In the share of preference rule in conjoint, each customer selects

the product that offers him/her the highest utility among the
competing alternatives.
Answer: FALSE (first choice rule)
39) Sustaining technologies improve the performance of established
products along dimensions valued by mainstream customers in
major markets.
Answer: TRUE
ESSAY TYPE QUESTIONS
40) Write a short note about the innovation radar.

Answer: The innovation radar does a good job capturing some of
the many different ways a firm can innovate; it helps define the
innovation space according to what, who, how, and where aspects.
First, the most obvious method is to change what the firm offers,
in line with a traditional view of the new product or service
innovation. This change might entail offering, platform, or solution
innovations. Second, changing who the customer is, represents
another route that involves innovations related to customers,
experiences, and value capture. For example, when Home Depot
grouped multiple categories of products and targeted them at do-
it-yourself (DIY) customers, rather than contractors, it radically
and innovatively changed the identity of the customer for these
products and services. Third, changing how you sell to customers
pertains to the processes, organizations, and supply chains that a
firm uses. When Progressive Insurance started sending employees
to meet with customers at the site of their automotive accidents or
soon after the accident, and paying claims on the spot rather than
requiring customers file detailed claims, it generated novel
advantages for both the customer and the firm. Fourth, changing
where to sell to customers comprises presence, networking, and
brand innovations.
[여기에 입력]
[여기에 입력]
41) Write a short note about red and blue ocean strategies.
Answer: Red Ocean markets—thus named to reflect the metaphor
of blood in the water—are very competitive and populated by
“sharks” fighting over the same customers. Many of these firms try
to claim differentiation based on the same or similar attributes;
they launch new product or service extensions that represent just
incremental innovations. These relatively minor extensions make
up the large majority of all new offerings and incremental sales,
but they also represent significantly less profit. The competition
keeps pricing power low. Traditional segmentation, targeting, and
positioning (STP; see Chapter 2) and stage-gate design processes
are very effective in Red Ocean markets though, because the
customers are well known, and though their needs change
(MP#2), those changes can be better anticipated over time.
To pursue more disruptive repositioning strategies, firms instead
can seek out Blue Ocean markets, a metaphor reflecting the blue
hue of the deep ocean waters that are far from land. These
markets are less competitive, marked by few firms in the
uncharted waters, but the distance from land also creates a
significant risk of failure. Blue Ocean strategies redefine the
market space, introduce unexpected features, and fundamentally
change the entire value proposition. When successful, they create
entirely new market segments that customers might never have
asked for or even knew they wanted, such that many traditional
market research methods are ineffective.
But one-time market leaders are unlikely to take the disruption
lying down. They respond to the innovation by shifting their
offering to match the emerging competitor. For example, on
recognizing the exponential rise in Internet-based shopping and
mobile commerce, Best Buy, the US electronics retailer, moved
relatively quickly to close or downsize many of its stores and thus
reduce its costs, while also strengthening its online channels and
building more seamless multichannel shopping experiences.
Because, as we have learned, these barriers and SCAs are
inherently short-lived, especially when a market grows and
[여기에 입력]
[여기에 입력]
expands to include new competitors, brands often constitute the

most effective tools. Consumers are likely to recognize and
appreciate the Best Buy brand, especially if it can revise its
offerings to match those provided by disruptive, innovative
competitors.
42) Write a short note about sustaining versus disruptive

technologies.
Answer: Sustaining technologies are well understood and
typically exploited by market leaders, which produce continuous,
incremental improvements over time. Market leaders rely on
sustaining technologies to improve the performance of
established products along familiar dimensions valued by
mainstream customers; ultimately though, the product likely
overshoots these customers’ needs. For example, major
telecommunication companies kept offering new features to their
product and service offerings, such as voicemail, caller ID, and
better clarity. The sustaining technology options (e.g., digital
services, fiber connections) helped them improve their offerings,
mostly for demanding business customers at first but then for
everyday consumers too. As a result, consumers wound up with a
sophisticated bundle of home phone services, offering high
degrees of reliability, fidelity, and innovative service options, many
of which exceeded their needs. If market-leading firms also
depend too heavily on a stage-gate development process, which
further incremental product improvements devoted to well-
understood customers and technologies, the market might
become stagnant and ripe for the introduction of a radically new
technology.
Disruptive technologies accordingly present highly different price
and performance characteristics or value propositions. When they
first emerge, they might produce “worse” performance than a
well-refined, sustaining technology. That is, a disruptive
technology usually underperforms established products for
mainstream customers, at least initially. Then market leaders, with
[여기에 입력]
[여기에 입력]
their investments in existing offerings and staff of engineers who

focus on available technologies, tend to assume the new
technology is not suitable for their customers. They remain
focused on promoting solutions using sustaining technologies,
assume all their customers need and want a broad bundle of
features, and generally ignore the disruptive technology. For
example, when VoIP (voice over Internet Protocol) technology first
appeared, most major telecommunication companies noted its
poor reliability and fidelity and assumed it would not be a threat.
But the disruptive pricing strategy offered by VoIP—including free
options that allowed even students studying abroad to stay in
regular touch with their families at home, without incurring huge
phone bills—created a strong appeal that helped alter the
telecommunications market.
43) Write a short note about the three steps to build brand equity.
1. Answer: The firm must develop an offering or offering
portfolio that provides customers with the largest relative
advantage among all competitors in the market
2. Second, in line with MP#1, offering equity requires a firm
to segment, target, and position that new offering in a way
that accounts for both people- and product-based factors
3. Third, and associated with MP#2, firms need to manage
the customer migrations from innovators and early
adopters to early majority stages.
44) Write a short note about the steps in a conjoint process.
Answer: In this view, a product consists of multiple attributes that
together provide benefits to a customer. For example, a
smartphone customer might think about call quality, operating
system, screen size, and camera quality benefits. If a firm decides
to design a new smartphone, it cannot just ask customers about
what features they care about; most customers would say they
wanted the best version of all the features. Instead, the firm can
simulate a trade-off: Would you rather have better camera quality
or a smaller (or bigger) screen size? The trade-offs reflect how
[여기에 입력]
[여기에 입력]
customers actually make decisions, because few of them can

afford the best options for all attributes in every product. Another
basic assumption underlying conjoint measurement is that
customers cannot reliably express how they weight the separate
product features when forming their preferences. Instead,
marketers need to infer these relative weights by asking for
evaluations (or choices) of alternate product concepts, using a
structured process. Thus, during a conjoint exercise, rather than
directly asking customers about the significance of product
attributes, the analyst uses a more realistic setting and asks
customers to evaluate alternative scenarios or product profiles,
each with multiple product attributes. Then it is possible to infer
the significance of each product attribute from the ratings that
customers provide for each scenario, reflecting their overall
product preference.
1. Design study
 Select attributes and levels (range and #)
 Develop bundles (< 16 optimal)
2. Collect data from respondents
 Design data collection instrument
 Calculate partworths
3. Evaluate product design options
 Evaluate market simulations
 Evaluate different choice rules
[여기에 입력]
Marketing Strategy: Based on First Principles and Data Analytics
Marketing Strategy:
Based on First Principles and Data Analytics
Question Bank
1
Chapter 1 Question Bank

MULTIPLE CHOICE and TRUE/FALSE QUESTIONS
1) Marketing Strategy consists of decisions and actions focused on building _____________, to

create value for stakeholders:
a) sustainable brand equity, relative to competitors, in the minds of customers
b) sustainable differential advantage, relative to competitors, in the minds of customers
c) sustainable price advantage, relative to marquee players, in the minds of suppliers
d) profitable product-mix, relative to competitors, in the minds of customers
Answer: B
2) Three of the five key elements of marketing strategy are that it:
a) takes a customer perspective, guides promotions, and leads to differential advantage
b) takes a supplier perspective, guides decisions and actions, and leads to differential
advantage.
c) takes a supplier perspective, guides promotions, and leads to differential advantage.
d) takes a customer perspective, guides decisions and actions, and leads to differential
advantage.
Answer: D
3) A corporate strategy must answer the following questions (check all that apply):
a) who are your customers?
b) what affects cash flow?
c) what value do you provide customers?
d) what personnel policies should you have in place?
Answer: B, D
4) Calculate the market share for XYZ Inc. for 2016 if average selling price = $15/unit, market
demand = 18 million units, and sales revenue = $32.4 million.
a) 22%
b) 32%
c) 8%
d) 12%
Answer: D
5) If ABC Inc.’s profit = $46,000, margin = 25%, marketing expense = $93,000, and G&A
expense = $56,000, ABC’s sales revenue is:
a) $5,56,000
b) $7,80,000
c) $3,32,000
d) $5,96,000
2
Answer: B
6) Map the four first principles of marketing strategy to the four associated marketing
decisions
All customers change (1)
All resources are limited (2)
All competitors react (3)
All customers differ (4)
Managing sustainable competitive advantage (5)
Managing resource tradeoffs (6)
Managing customer dynamics (7)
Managing customer heterogeneity (8)
a) 1-5, 2-6, 3-7, 4-8

b) 3-5, 4-7,1-6, 4-8
c) 2-6,3-5,1-7,4-8
d) 4-7,2-6, 3-5,1-7
Answer: C
7) The key elements of marketing strategy include (check all that apply):
a) differential advantage
b) sustainability
c) company’s mission
d) customer-centricity
Answer: A, B, and D
8) A marketing strategy must answer the following questions (check all that apply):
a) what personnel policies should you have in place?
b) what legal considerations affect your business?
c) what value do you earn due to the differential advantage?
d) how will you sustain the differential advantage?
Answer: C & D
9) Various factors lead customers to differ in their preferences, including (check all that apply)
a) personal differences
b) varying peer experiences
c) unique functional needs
d) celebrity self-identities
e) previous persuasion-based activities
Answer: A, C, E
10) Which of the following is a solution to handle customer heterogeneity (check all that apply)
a) ignore customer heterogeneity and provide an offering that matches the average
customers’ needs.
3
b) offer a range of products and services to satisfy the needs of many different customer
segments.
c) embrace the notion that customers will sacrifice desired product attributes if the price
is low enough.
d) select a specific segment of customers and target them by positioning its offering as the
best solution.
Answer: A, B, C, and D.
11) The outputs of managing customer heterogeneity are:
a) Target industry segment, positioning statement, SWOT analysis
b) Target customer segment, positioning statement, customer-centric view
c) Target customer Segment, industry segmentation, positioning statement
Answer: B
12) The inputs of managing customer heterogeneity are the 3Cs of situation analysis: customers,
competitors, and consolidation.
Answer: FALSE (customers, competitors, and company)
13) A product or lifestyle approach captures:

a) typical user experiences
b) industry developmental efforts
c) individual sources of customer dynamics
d) both A & B
Answer: D
14) A firm can compile a descriptive “persona” by grouping existing customers into:
a) those recently acquired
b) long-term customers
c) Those lost or at risk of being lost
d) All of the above
Answer: D
15) Lost customer analysis provides insights on:

a) defection, reflection, loss, and recovery
b) harvest, reflection, recovery, and defection
c) strategy, customer-centricity, defection, reflection
d) reflection, harvest, loss, recovery
Answer: A
16) Various factors lead customers to change their preferences over time, including seminal
events, life stages, knowledge, product category maturity, and exposure to relevant
information.
Answer: TRUE
4
17) Which of the following is an input category to handling customer dynamics (check all that
apply)
a) data on customer portfolios
b) data on customer response to past programs
c) lost customer analysis
d) customer lifetime value
Answer: A, B, and C.
18) Whereas MP#1 recognizes dynamic customer needs across the market and seeks to select
appropriate target segments, MP#2 looks at the customers within each target segment to
understand how to win and keep them, by accounting for their evolving diversity.
Answer: FALSE (MP#1 is about static customer needs).
19) Various factors provide competitors avenues for undermining a focal firm’s market position,
including (check all that apply)
a) copying the incumbent’s offerings
b) redefining the marketplace
c) making the incumbent irrelevant
d) launching new offerings
Answer: all of the above.
20) The three sources of sustainable competitive advantage are (check all that apply)
a) customers care, the company does “it” better than competitors, hard to duplicate
b) multiplicative
c) evaluated from a customer equity perspective
d) customers can be both assets and liabilities, based on customer equity
Answer: A, C, and D.
21) Brands create SCA through multiple mechanisms, but in the simplest form, ____ can cause
customers to buy on the basis of_____, which ____:
a) strong awareness, recognition and habit, reduces their cognitive effort

b) strong engagement, switching costs, increases price premium
c) strong awareness, switching costs, increases price premium
d) strong engagement, recognition and habit, reduces their cognitive effort
Answer: A.
22) Firms allocate large budgets to ____, in an effort to achieve the newest or most innovative
product, as well as______, or fundamentally ____:
a) research and development (R&D), reduce their costs, supplementary services

b) data mining, reduce their costs, change customers’ experiences
5
c) data mining, reduce their costs, supplementary services

d) research and development (R&D), reduce their costs, change customers’ experiences
Answer: D.
23) Which of the following is an input category to managing sustainable competitive advantage
(check all that apply)
a) Internal personas
b) AER strategies for each persona
c) conjoint analysis
d) innovation processes
Answer: A & B.
24) Resource slack refers to ___________ for a firm for marketing strategy?
a) unusable resources
b) usable resources
c) competitors resources
d) none of the above
Answer: B
25) ____________ help in making critical resource allocations decisions such as “ How much would
the financial income change with 1% increase in marketing efforts”? (Check all that apply)
a) Attribution based processes
b) Experimental processes
c) Response-model based processes
d) Resource based processes
e) All of the above
Answer: A, B, & C
26) ____________ is a technology-enabled, ______to harnessing customer and market data to

understand and serve customers?
a) big data, model supported approach
b) customer analytics, computer-aided approach
c) big data, model supported approach
d) customer analytics, model supported approach
Answer: D
27) The micro-macro duality is critical to successful marketing strategy, because _______
occur/occurs at micro levels, but ___________ occur/occurs at Macro level?
a) All decisions, customer understandings
b) True customer understandings, most strategic and resource oriented
c) most strategic and resource oriented, True customer understandings
d) customer understandings, All decisions
Answer: B
6
28) Various factors provide induce complex resource trade-offs including (check all that apply)
a) Effectiveness of marketing activities
b) Changes in product landscape
c) Product lifecycle maturity
d) Stable customer preferences
Answer: A, B &C
29) In relatively ____ markets, ____ might be acceptable; however, with substantial _____, they
often lead to poor trade-off decisions
a) unstable, heuristic, heterogeneity and volatility
b) stable, attribution, heterogeneity and volatility
c) stable, heuristic, heterogeneity and volatility
d) unstable, attribution, heterogeneity and volatility
Answer: C
7
30) A first principle is a foundational concept or assumption on which a theory, system, or
method is based.
Answer: TRUE
31) A corporate strategy is the set of principles a firm uses to achieve the lowest cost to beat the
competition.
Answer: FALSE (The overall scope and direction of a firm and the way in which its various
business operations work together to achieve particular goals ).
32) A firm’s sales profit is (market demand x market share x average selling price)x (margin –
marketing expense – G&A expense)
Answer: FALSE. It is (market demand x market share x average selling price)x (margin) –
marketing expense – G&A expense)
33) Each First Principle or underlying assumption, when matched with its associated marketing
decisions, is a Marketing Principle (MP). For example, all customers change, so firms must
make strategic decisions to manage customer heterogeneity, and these combined
statements constitute MP#1.
Answer: FALSE (all customers differ)
34) Customer heterogeneity is defined as variation among customers in terms of their identities,
aspirations, and image.
Answer: FALSE (Needs, desires, and subsequent behaviors)
35) With a classic low-cost strategy, firms attempt to identify core, must-have attributes that
will satisfy consumers’ functional needs, then focus all their efforts on reaching the lowest
cost for an offering that meets those needs.
Answer: TRUE
36) Building strong relationships between customers and the firm’s salespeople or other
boundary-spanning employees can bar customer defection, prompt enduring customer
loyalty, and ensure superior financial performance.
Answer: TRUE
37) BOR strategies reflecting an aggregation and reorganization of each targeted customer and
persona need (accounting for customer dynamics) and the most effective strategies over
time (accounting for customer heterogeneity)
Answer: FALSE (switching customer heterogeneity and dynamics).
8
38) Firms use simple attribution models to make decisions when they lack hard data on each
resource option.
Answer: FALSE (Heuristic based processes)
39) A firm’s resource trade-off strategies defining how much it allocates to each target market
segment, AER strategy, and SCA strategy, should be developed to be relevant to maintain the
firm’s current AER strategy (MP#1), to support its stated SCA (MP#2), and the firm’s current
target segments (MP#3).
Answer: FALSE (MP #2, 3, and 1)
40) Most heuristics are incorrect. They lack any scientific basis for the decisions, relying instead
on managers’ gut feelings about what the right resource allocations are.
Answer: FALSE (MP #2, 3, and 1)
9
41) Define marketing strategy, and provide a short discussion about its key elements and scope.
Answer: Marketing strategy consists of decisions and actions focused on building a sustainable
differential advantage, relative to competitors, in the minds of customers, to create value for
stakeholders. The five key elements are critical to marketing strategy:
1. Leads to a differential advantages over competitors
2. Sustainability
3. Ability to enhance firm performance
4. Customer perspective
5. Guides decisions and actions.
Initially, the strategy concept arose from a military context, where a strategy represents the
pursuit of situational superiority over an enemy. Karl von Clausewitz, in On War (1832), thus
describes strategy as follows: “Consequently, the forces available must be employed with such
skill that even in the absence of absolute superiority, relative superiority is attained at the
decisive point (p. 196).” From these military roots, the notion of using resources skillfully, to
create decisive positions of superiority over competitors, began to be applied in business in the
1950s and 1960s. A variety of forces (e.g., rapid, unpredictable changes in customer, competitor,
technical, and economic environments) were beginning to challenge the “lumbering
corporations” of the time, whose size presented an obstacle to operational dexterity. A new way
of thinking—generally described as formal strategic planning—was needed. Thus a typical
definition of business strategy from the 1960s described “the determination of the basic long-
term goals and objectives of an enterprise, and the adoption of courses of action and the
allocation of resources necessary for carrying out these goals (p. 13).” Management scholars and
practitioners from this era retained two elements of military strategy, focused on how decisions
and actions could lead to differential advantages over opponents (or competitors). Over the next
few decades though, thought leaders added two elements that they regarded as necessary to
apply the strategy concept to a business: the need to make the differential advantage sustainable
and the idea that the objective of any business strategy is to enhance firm performance. Even
more recently, marketing strategists have suggested a refined view in which both the
sustainable differential advantage and its objective should be evaluated from the perspective of
the customer, such that the central approach is “strategy from the outside-in.”
42) How does marketing strategy differ from corporate strategy?

Answer: Corporate strategy is the overall scope and direction of a firm and the way in which its
various business operations work together to achieve particular goals. Marketing strategy
consists of decisions and actions focused on building a sustainable differential advantage,
10
relative to competitors, in the minds of customers, to create value for stakeholders. Although the
two levels of strategy should have consistent goals (i.e., marketing strategy aligns with
corporate strategy), the marketing strategy focuses specifically on the interplay of the firm with
its customers. Consider the primary questions to answer to define an entity’s marketing
strategy:
1) Who are your customers?
2) What value do you provide your customers (e.g., product, service, experience, status)?
3) How are you building a differential advantage relative to competitors for these
customers?
4) What value do you earn from your customers due to this differential advantage (sales,
profits, referrals)?
5) How will you sustain this differential advantage into the future?
A marketing strategy must answer these questions, then use the answers to inform the
development and implementation of action steps required to achieve firm and stakeholder
objectives. However, the implementation of a marketing strategy requires resources and a stable
organizational platform from which to operate. Thus, additional questions arise, regarding other
aspects of the business, such as cash flow plans, tax considerations, and legal and personnel
policies. These queries are the domain of the corporate strategy, defined as “the direction and
scope of an organization over the long term: which achieves an advantage for the organization
through the configuration of resources within a changing environment, to meet the needs of
markets and fulfill stakeholder expectations”.
43) What are the four principles of marketing strategy?
Answer: The first and most basic issue facing managers in their marketing mix decisions
(pricing, product, promotion, place) for the firm is that all customers differ. Customer
heterogeneity is a fundamental problem that all firms must address when developing an
effective marketing strategy (MP#1). A second underlying complexity for both short- and long-
term marketing decisions is that all customers change. Therefore, with a focus on the firm’s own
customers, MP#2 challenges firms to understand how their existing customers change over
time. The idea that all competitors react is the third principle that marketing managers must
address, by building and maintaining barriers to these competitive attacks and thereby ensuring
a sustainable competitive advantage (MP#3). The fourth marketing principle holds that all
resources are limited, so firms must develop resource trade-off strategies that are relevant to
their current target segments (MP#1) and maintain their current AER strategy (MP#2) and
stated SCA (MP#3), which together constitute MP#4.
44) Provide three reasons why the first principles of marketing strategy have a natural temporal
ordering.
Answer: First, the solution to the four principles is hierarchical: Solving some principles
requires knowledge of the solution to other principles. Second, a firm should embrace the
11
notion that these solutions must address both static and dynamic heterogeneity. Traditionally,
marketing has focused on developing tactics aimed to segment, target, and position customers,
which reflect the static First Principle that all customers are different. Traditional customer
segmentation then provides the input for resource-trade off decisions, such that firms would
move straight from MP#1 to MP#4 (the recommended approach from marketing texts a decade
ago). However, to identify the optimal customers to target, firms instead need to account for
questions like whether the customer is likely to buy in the future, or if competitors are trying to
attract these customers with their own direct marketing efforts. Third, sustainable offerings
that stand the test of time require a recognition that the firm cannot solve all the First Principles
simultaneously, because of their complex and interrelated nature. Instead, firms need an
iterative approach to integrate the principles. With an iterative approach, the firm gradually
improves, focusing on one principle at a time, so that it can to collect and analyze data
effectively to make significant improvements.
45) Discuss the input-output framework to managing resource trade-offs (MP #4).
Answer: The three key inputs reflect the outputs of the three preceding First Principles.
That is, MP#1 (what customers want and how the firm should position itself) yields a
positioning statement that captures information to enable several trade-offs, including (1)
the key customer segments to target, (2) the key products to invest in or discontinue, (3) the
key regions to target, and (4) the key relative differences to build and maintain. This output
thus serves as a starting point for the resource trade-off framework, because it provides the
working bounds for executing the firm’s positioning statement. Next, MP#2 yields AER
positioning statements and strategies that describe who, what, why, and when information
for each key customer persona in the firm’s customer portfolio as well the most effective
AER strategies across customer personas and stage. The combined outputs from MP#1 and
MP#2 thus narrow the key trade-offs (across segments, products, regions, and relative
differences) in the resource allocation decision. That is, these inputs restrict the decision to
those trade-offs that are key to winning customers in the marketplace and keeping these
customers as they change over time. Finally, MP#3 focuses on how to build and maintain
strong barriers around customers to withstand competitive attacks, so its output captures
the firm’s BOR strategy, describing the key objectives of branding, offering, and relationship
investments—and their many trade-offs—to build and maintain the firm’s SCA.
Then this managing resource trade-off framework produces two outputs: metrics and
resource allocation decisions. The appropriate metrics that a firm needs to manage its
resource allocation activities can determine whether it is successful in achieving its goals.
For example, financial metrics based on financial ratios can be converted easily into
monetary outcomes such as net profit or returns on investments. Marketing metrics reflect
customers’ attitudes, behaviors, and mindsets about a firm’s products, measured with
variables such as awareness, satisfaction, loyalty, and brand equity. Mindset metrics also can
12
answer questions about exactly why marketing has paid off. The second set of outputs is the
specific resource allocation decision that the manager makes (captured in the firm’s
annual marketing plans and budgets). It consists of three sub-decisions: marketing budget
for an activity, or the size of the commitment the firm makes for that marketing activity,
budget allocation, which represents the percentage split of the marketing activity allocated
to each sub-activity, and the time horizon for the budget, or the timespan during which the
firm will remain committed to this marketing budget.
13
Marketing Strategy:
Question Bank
1

1) Which of the following is a brand element? (check all that apply)

a) Brand name
b) Brand symbol
c) Brand audit
d) All of the above
Answer: A and B.
2) Both brands and relationships lead to enduring customer loyalty, ___, and _____.
a) Lower cost, higher CLV
b) Last look, positive attribution
c) Price premium, cross selling and retention
d) All of the above
Answer: All of the above.
3) Which of the following is not true? (check all that apply)

a) Customers’ awareness of, knowledge about, and behaviors in response to a brand generate
the firm’s brand equity
b) Brand equity is what lies in the mind of the CEO
c) Brand equity is the set of assets and liabilities linked to a brand
d) Brand equity adds to or subtract from the value provided by the firm’s offering and
relationships
Answer: B.
4) ___________ equals the sum of all customer lifetime value associated with all future and
existing customers.
a) Brand equity
b) Customer equity
c) Brand extract
d) Firm equity
Answer: A.
5) The associative network memory model argues that the human mind is a network of ____
and connecting ____.
a) Nodes and neurons.
b) Nodes and links
c) Neurons and nodes
2
d) Links and nodes

e) Nodes and neurons
Answer: B.
6) In the network memory model, the brand strategy involves (check all that apply).
a) awareness to provide an anchor point,
b) building linkages to positive, unique memory nodes to establish an identity
c) to match target customers’ needs in a cost-efficient manner
d) all of the above
Answer: D.
7) In the network memory model, the brand strategy involves (check all that apply).
a) awareness to provide an anchor point,
b) building linkages to positive, unique memory nodes to establish an identity
c) to match target customers’ needs in a cost-efficient manner
d) all of the above
Answer: D.
8) Brands can (check all that apply).

a) not really change customer’s actual experiences,
b) change customer’s actual experiences
c) change the taste of food or drink
d) make customers susceptible to competitors
Answer: B and C.
9) Brands affect sales growth by (check all that apply).

a) Lowering firm cost
b) Reduce perceived risk
c) Increase price charged
d) Signal higher quality
Answer: B and D.
10) Brands affect profit growth by (check all that apply).

d) Signal poorer stickiness
11) Brands affect profit growth by (check all that apply).

3

d) Signal poorer stickiness
12) Spurious loyalty is when ______

a) Positive feelings and actions are manifested
b) Ambivalent feelings are manifested
c) No feelings are manifested
Answer: B.
13) Latent Loyalty is when Customers have ________ attitudes but actually _______ the product.
a) Positive Negative, Buy
b) Negative, not buy
c) Positive, buy
d) Positive, not buy
Answer: D.
14) While _________ pulls all characteristics together and describes who the brand is, ____
represents how a brand is going to maintain its relative advantage over time.
a) Brand identity, brand image
b) Brand identity, brand image
c) Brand identity, brand sustainability
d) Brand equity, brand image
Answer: C.
15) A firm that uses a single set of band elements for all products is known as ____.
a) Branded house architecture
b) House of brand architecture
c) Brand architecture
Answer: A.
16) Customers might express positive attitudes but fail to actually buy a firm’s products, which
constitutes.
a) true loyalty
b) spurious loyalty
c) habitual loyalty
d) latent loyalty
Answer: D.
4
17) Which of the following is not true?

a) Benefits that drive sales growth always enhance a firm’s profitability
b) Loyalty provides the largest barrier to competitive entry.
c) Strong brands also generate habitual purchase behavior
Answer: A.
18) Building brand awareness involves making the brand easy to recall known as ________
a) Brand breadth
b) Brand length
c) Brand perception
d) Brand depth
Answer: D.
19) When customers express positive attitudes but fail to actually buy a firm’s products, they
have ____ loyalty.
a) Perceived
b) Latent
c) Spurious
d) True
Answer: B.
20) The BOR Equity Grid provides the objectives, relative advantages (over competitors), and
sources of sustainability (how it wins over time) that are required to use brands as SCA.
a) Relative advantages, source of sustainability
b) Offering equity, source of sustainability
c) Offering equity, Relative advantage
d) Source of sustainability, Price premium
Answer: A.
21) The six-step approach of communication and information processing by firms towards
customers can be simplified as ________.
a) Feel-think-act
b) Act-think-feel
c) Think-act-feel
d) Think-feel-act
Answer: D.
22) A qualitative method that is flexible and time effective and can support larger sample sizes
is.
5
a) Case studies
b) Interviews
c) Focus groups
d) Observations
Answer: B.
23) Which of these techniques is not a data reduction technique?

a) Factor analysis
b) Cluster analysis
c) Regression analysis
d) Discriminant analysis
e) Answer: C.
24) Choice Models help __________ or identify the causes or drivers of desired outcomes
a) Link variables to outcomes
b) Link outcomes to variables
c) Understand trade-offs
d) Reduce data
Answer: A.
25) Which of these is the correct order on a scale ranging from many independent brands to a
single master brand?
a) Branded House- Sub-brands- Endorsed brands- House of Brands
b) House of Brands- Endorsed Brands- Sub-brands- Branded House
c) House of Brands- Sub-brands- Endorsed brands- Branded House
d) Branded House- Endorsed Brands- Sub-brands- House of Brands
Answer: B.
26) Which of these is not an advantage of a brand extension?

a) Increases the time needed to build the new product’s brand by leveraging existing brand
characteristics.
b) Increases the probability of gaining channel access by reducing perceived risk.
c) Helps enhance the image of the parent brand by linking it to newer and/or emerging
product features.
d) Expands the size of the market that the firm can access.
Answer: A.
27) Which of these initiatives helps brands extensions (check all that apply)?
a) There must be perceived fit between the parent brand’s image and the extension on a
dimension that is relevant to the customer
b) Brand extensions can be stretched further if done incrementally
6
c) Higher quality brands generally can be extended further

d) All of the above.
Answer: D.
28) Which of these initiatives helps build emotional advantages of brands (check all that apply)?
a) A powerful, long-lasting brand image moves beyond functional differentiation.
b) If a brand cannot connect to an individual consumer’s self-identity, it will not perform well.
c) Behavioral loyalty typically does not lead to much word of mouth.
d) All of the above
Answer: A, B.
29) Which of the following is not true about WOM (check all that apply)?
a) WOM is very effective because friends and consumers serve as advocates.
b) WOM is always the most important marketing communication vehicle.
c) Digital penetration has slowed down the influence of WOM.
Answer: B, C.
30) Which of the following is not true about WOM (check all that apply)?
a) WOM is very effective because friends and consumers serve as advocates.
b) WOM is always the most important marketing communication vehicle.
c) Digital penetration has slowed down the influence of WOM.
Answer: B, C.
31) The six-step process of consumer processing is also called ______?

a) Decision-making heuristic.
b) Think-feel-act model.
c) Associative network memory model.
Answer: B.
7
32) Customers’ awareness of, knowledge about, and behaviors in response to a brand generate
the firm’s brand equity, one of the three major components of the customer equity stack,
along with offering and relationship equities.
Answer: TRUE.
33) Characteristics such as brand awareness or familiarity are associated with the brand
network memory model of brand equity.
Answer: FALSE (Associate Network Memory Model)
34) Brand image, or customers’ perceptions and associations with the brand, are represented by
the links of the brand name node to other informational links in the model.
Answer: FALSE (other informational nodes)
35) A firm that focuses on branding each major product with its own unique brand elements
uses a house of brand architecture.
Answer: TRUE
36) Vertical Extensions of brands to lower priced markets often strengthen the image of the
parent brand.
Answer: FALSE
37) Brand relative advantage needs to capture the brand’s points of parity (POP), as well the
points of difference (POD).
Answer: TRUE
38) Overall, firms should shift toward a branded house approach if they need a separate brand
for each entity (divisions, categories, products) to avoid a problematic association or
channel conflict across entities.
Answer: FALSE (house of brands approach)
39) In brand line extensions, the new offering is in the same product category but targets a
different segment of customers, usually with a slightly different set of attributes.
Answer: TRUE
40) Integrated marketing communications (IMC) refers to the process of designing and
delivering marketing messages to customers while ensuring that they are relevant, even if
inconsistent over time and channels.
Answer: FALSE.
8
41) Write a short note about the three steps to build brand equity.
Answer: The three key steps to building brand equity to increase a firm’s SCA start with
building a high level of brand awareness among the firm’s targeted customers, which then
provides an anchor point for linking the easily recallable brand name to the elements that
define its meaning and image (Figure 5.5). Building awareness involves making the brand
easy to recall (i.e., brand depth) across a wide range of potential purchase and usage
situations (i.e., brand breadth). Awareness should be high for the complete constellation of
brand name elements: its name, logo, jingle, package shape, and other elements that the
firm uses to identify its offering.
Then the second step links the brand name to the brand’s points of parity and difference,
which helps define the brand’s relative advantage. This step defines how the brand will be
positioned against its competition. Some linkages might get transferred from the parent
brand, depending on the firm’s brand architecture. For example, when Erickson or Nokia
launches a new product under their strong parent brands, the new product’s subbrands
immediately take on some meaning from those parents. To establish what the brand means
to customers, brand managers typically start with points of parity related to how the brand
meets some basic level of performance, then add key points of difference that reflect how or
why this brand will perform “better” than competitive options. Because points of difference
are a key relative advantage of a brand when it first launches, significant financial resources
and promotional efforts are applied to make these differentiation points memorable and
link them strongly to the brand name.
The third step involves building a deep emotional connection or “relationship” between
the brand and targeted customers. Moving beyond functional differentiation implies a
true, emotional connection—the essence of building a powerful, long-lasting brand image. A
strong brand image often is what provides a firm a long-term sustainable advantage,
because it connects with consumers at a deep level and is hard for competitors to replicate.
If a brand can connect to an individual consumer’s self-identity or who they want to be, that
customer often exhibits high levels of both attitudinal and behavioral loyalty (i.e., true
loyalty). It also can drive positive WOM, transforming customers into strong brand
advocates.
42) Write a short note about the consumer information-processing model’s six steps.
Answer: Using brands as an SCA is often most effective in large consumer markets, such as
those for soft drinks, beer, fashion, or automobiles. When making allocation decisions across
different marketing communication formats, in the pursuit of key brand-building objectives,
it also can be helpful to understand how customers process information and are persuaded
to change their behavior. The varied models can be broken down into six steps that
customers must pass through to be persuaded by the different communication formats:
9
a. The customer must be exposed to the communication message, whether that means
hearing or seeing it.
b. The message needs to capture customers’ attention so that they receive it.
c. The customer must understand the desired marketing message.
d. The customer needs to develop favorable attitudes toward the message.
e. The customer must generate intentions to act, in accordance with the information
in the communication message.
f. The person then must actually behave in the desired way.
This six-step process sometimes is simplified as the “think ® feel ® act” model, which aligns
well with the process for building brand equity.
43) Write a short note about the major tools and auxiliary tools needed for brand positioning.
Answer: Brand positioning reflects how and where the firm hopes to appear in customers’
mind. In a way, it reflects the firm’s ideal associative network memory model, the one it
hopes that customers hold in mind. It captures the aspirational level of awareness, key
associations, and overall product or company image the firm seeks in the marketplace. The
BOR Equity Grid from Chapter 4 provides a starting point for this discussion, because it
describes the marketing objectives associated with the brand strategy, the relative
advantage(s) that the brand can offer over relevant competitors, and the source of the
sustainability of this advantage. That is, it captures many of the elements that brand
managers need to develop their brand strategies. The firm’s positioning statements are also
important, though they can be more abstract or high level, rather than specific to the brand
strategy. Furthermore, the AER strategies across personas, as outlined in the AER Strategy
Grid, might be helpful, but they are unique to each persona and AER stage, whereas the
brand needs to be consistent across all personas and stages. Generally, it is not possible to
offer differentiated brand strategies at this level of granularity.
Thus, the BOR Equity Grid provides the objectives, relative advantages (over competitors),
and sources of sustainability (how it wins over time) that are required to use brands as SCA.
But other elements also are required to develop a brand strategy, including. Brand
objectives, to describe what the brand needs to accomplish as a performance outcome, such
as driving customer acquisition or generating a price premium by establishing a perception
of status. Brand awareness, which describes the firm’s desired level of recognition, as
demonstrated by target customers’ ability to recall the firm’s brand name. Most firms prefer
a high level of awareness, but achieving it requires substantial time and marketing
expenditures, so it is important to specify a threshold level of awareness that the firm is
10
willing to pay for, among a particular set of customers. Brand relative advantage captures
the brand’s points of difference (POD), or the key ways it differs from its competition. In
addition, the points of parity (POP) are those aspects of the brand that may not be unique
but still are required by customers in the target market. Brand sustainability, or how the
brand is going to maintain its relative advantage over time, whether by generating an
exceptionally high level of awareness among difficult-to-reach decision makers or
maintaining a tough-to-achieve but strong image that matches targeted customers’ self-
identity. Brand image, which describes the high-level, abstract perspective of the brand
network, according to what comes to customers’ minds when they think of the brand.
Brand associations instead describe the specific words, colors, logo, fonts, emotions,
features, music, smells, people, animals, or symbols that are linked to a brand. Brand
identity pulls it all together and describes who the brand is. If it were a person, what would
he or she be like?
44) Write a short note about the benefits of brand equity.
Answer: Brands can change customers’ actual experiences; they can change the taste of
food or drink, the excitement of driving a car, the comfort felt in a coffee shop, and the visual
appeal of diamond jewelry. Benefits from strong brands are associated with three general
areas:
g. Sales growth – sales benefit from strong brands, because brands make it easier to
acquire new customers, who perceive less risk, higher quality, and better
performance of a brand with strong equity
h. Profit enhancement – the benefits that drive sales growth also can enhance a firm’s
profitability by reducing costs or allowing the firm to charge higher prices for its
products
i. Loyalty effects – a strong brand makes customers more loyal, which often provides
the largest barrier to competitive entry
i. True loyalty
ii. Spurious loyalty
iii. Latent loyalty
45) Write a short note about the associative network memory model of brand equity.
Answer: The associative network memory model argues that the human mind is a network of
nodes and connecting links. The key characteristics of a brand, which influence its brand
equity, are captured as nodes and linkages. Specifically, brand awareness or familiarity,
which reflects the customer’s ability to identify a brand, is indicated by the size or strength
of the node for that memory, as shown in Figure 5.2. It is often measured using aided and
11
unaided recall tasks. Brand image, or customers’ perceptions and associations with the
brand, are represented by the links of the brand name node to other informational nodes in
the model. Unique linkages to a brand name capture the brand’s identity and differential
(dis)advantage, relative to its competitors. The thickness of a line between two nodes
represents the strength of the association between these two memories in a consumer’s
mind. A firm has many ways to strengthen or build positive linkages to a brand node, to
ensure that the brand identity matches the ideal positioning in a target market. In the
network memory model, brand strategy involves first building awareness to provide an
anchor point, then building linkages to positive, unique memory nodes to establish an
identity that matches target customers’ needs in a cost-efficient manner. When a customer
sees (hears, touches) the brand name, it activates that brand node, leading to the cascading
activation of other connected nodes—as long as strong linkages exist—which create the
customer’s brand experience. Prior research has shown that these linkages can activate a
wide range of cognitive and emotional responses.
12
Marketing Strategy:
Question Bank
1

1) Some firms assume away customer differences by offering a single product to the entire
target market. This approach may work in peculiar circumstances, particularly if________, but
it _____ in the long run:
a) A firm faces perfect competition, rarely works
b) competition is weak or scarce, rarely works
c) A firm has great products, always works
d) competition is weak or scarce, always works
Answer: B
2) Firms are targeting smaller and smaller segments because (check all that apply):
a) it matches real and perceived customer desires (real, perceived)
b) it enables faster response to customer trends and changes
c) technology has made it economical to target/customize
d) there is no limitation to efficiency (cost) versus benefit of a better match to need
(solution)
Answer: A, B, &C
3) Which of the following are sources of customer heterogeneity? (check all that apply):
a) life experience
b) marketing activities
c) functional need
d) corporate image
Answer: A, B & D
4) Which of the following is not a part of the Big 5 traits?

a) Agreeableness
b) Openness
c) Conscientiousness
d) Calmness
Answer: D
5) Which of the following is true (check all that apply)?

a) customer heterogeneity is a fundamental “problem” that all firms must address when
developing an effective marketing strategy
b) Customer heterogeneity may only be latent or hidden
c) customers vary on some underlying preferences, but no firms are supplying offerings
that fit their desires, so those preferences are not evident
2
d) Customers know all their diverse preferences
Answer: A & C
6) Latent customer heterogeneity can stem from legal, ____, technological, and ____ constraints.
a) Substantive, innovative
b) Economic, innovative
c) Economic, substantive
d) Regulatory, economic
Answer: B
7) Across mass marketing, niche marketing, and one-to-one marketing, the underlying method
of dealing with heterogeneity is the same: focus on ____ such that the needs of each group
are similar until the focus reaches _____.
a) Lowest prices, most profitability
b) Smaller groups, an individual customer
c) Smaller groups, most profitability
d) Lowest prices, an individual customer
Answer: B
8) Which of the following is not addressed in a positioning statement?

a) Who are the customers?
b) What is the set of needs that product/service fulfills?
c) Who are the firm’s competitors?
d) Why is this product/service the best option to satisfy the customer needs?
Answer: C
9) An ideal target segment should meet the following criteria (check all that apply):
a) Customers are unclassifiable
b) Crossover Competition
c) Based on company’s needs
d) Value in the long term
Answer: B & D
10) The value of reducing potential customer preferences into smaller sets of independent
factors, prior to conducting analyses, is that (check all that apply):
a) This step removes a potential source of bias by combining similar questions
b) This step gives us a wide scope of preferences to work with
c) This step removes any redundancy
3
Answer: A & C
11) Which of the following is true? (Check all that apply):

a) Segmentation must start with a random sample of potential customers in the market,
not just the firm’s existing customers
b) Customers should be divided into groups on the basis of their needs and desires and
demographic variables (age, gender) or size (annual sales revenue
c) It is important to ensure that customers in one group have similar preferences,
d) It is ideal to maximize the differences between segments, to help the firm offer more
clearly differentiated products
Answer: A, C &D
12) In the _______ step of cluster analysis, we use descriptor variables to explain how the
subsamples differ and thereby can derive efficient targeting strategies, tailored to each
subsample.
a) Identification
b) Prediction
c) Description
d) Segmentation
Answer: C
13) How many segments should we stop at, based on the dendrogram output from the cluster
analysis?
a) Two
b) Four
c) One
d) Three
Answer: D
4
14) _____ and _____ analyses are multivariate statistical techniques used to determine how
segments of consumers differ in their characteristics.
a) Discrimination, classification
b) Factor, discriminant
c) Factor, classification
d) Discriminant, factor
Answer: A
15) _____________ refers to the process by which a firm shifts its target market:
a) Positioning
b) Segmentation
c) Targeting
d) Repositioning
Answer: D
16) _____________ depict customer segments, competitors, and a firm’s own position in a
multidimensional space, defined by the purchase attributes identified during segmentation:
a) Positioning maps
b) Choice models
c) GE Matrix
d) Perceptual maps
Answer: D
17) A perceptual map helps firms to (check all that apply):

a) Determine how much change is needed on key product attributes to move products to
more favorable positions
b) Identify key competitors
c) Visually determine the impact of their communication programs on market perceptions
d) All of the above
Answer: D
18) Customer-centric organizations (check all that apply):

a) Have increased knowledge of each customer segment
b) Find it difficult to respond to emerging trends
c) Achieve improved customer satisfaction & loyalty
d) Need more resources
Answer: A, B & D
19) An ideal target segment should meet these criteria (check all that apply):
a) Similar to other segments
5
b) Differences match firm’s competencies

c) Sustainable and financially viable
d) Customers are identifiable
Answer: B, C & D
20) An ideal positioning statement must answer (check all that apply):
a) Who are the competitors?
b) Who are the customers?
c) What is the set of needs the product or service fulfill?
d) Why is this product/service the best option to satisfy your needs?
Answer: B, C & D
21) The size of the segment, growth rate, and price sensitivity represent the ____ of a target
segment:
a) Customer attractiveness
b) Market attractiveness
c) Competitive attractiveness
d) Segment attractiveness
Answer: B
22) Check all the ideas associated with customer-centricity:

a) Using customer to drive decisions
b) Measuring success from a customer perspective
c) Providing customer with the lowest price
d) Using big data
Answer: A &B
23) On average, firms that switched to a customer-centric structure initially perform worse than
before the restructuring (_______), but after about 9 or 10 quarters, their performance
exceeds pre-restructuring levels (_______):
a) learning stage, harvesting stage
b) priming stage, pay-off stage
c) learning stage, pay-off stage
d) priming stage, pay-off stage
Answer: B
24) Which of the following are inputs to managing customer heterogeneity (check all that
apply):
a) needs, desires, and preferences across customers in an industry
b) an inventory of the company’s strengths, weaknesses, opportunities, and threats
6
c) an inventory of your competitor’s strengths, weaknesses, opportunities, and threats

d) all of the above
Answer: D
25) ____ is commonly used to describe which predictor variables help differentiate two or more
segments of customers:
a) profiling analysis
b) segmentation analysis
c) cluster analysis
d) discriminant analysis
Answer: D
26) Factor analysis groups similar _____ together to avoid biasing further analyses; classification
analysis uses discriminate models to predict _____ using only demographic variables:
a) demographic variables, purchase attributes
b) purchase attributes, segment size
c) purchase attributes, segment membership
d) segment size, segment membership
Answer: C
27) A customer-centric approach makes a firm “internally driven” to satisfy target customers,
synergistic with the STP approach that “externally focuses” the firm on the right customers:
a) Internally driven, competitor drive
b) Competitive driven, externally driven
c) Externally driven, internally driven
d) Internally driven, externally driven
Answer: D
28) _____ focused marketing efforts on well-defined, narrow segments of consumers, and by
specializing, this method seeks to give the firm a competitive advantage.
a) niche marketing
b) mass marketing
c) individualized marketing
d) lifetime value
Answer: C
7
29) Preference for color, exposure to television shows, preference for battery life, and
preference for value are examples of sources of customer heterogeneity
Answer: FALSE (All customers have high preference for value)
30) An individual’s life experiences capture events and experiences unique to his or her life that
have a lasting impact on the value and preference he or she places on products and services,
which in turn affects preferences independent of individual differences.
Answer: TRUE
31) Latent customer heterogeneity is defined as potential differences in desires that are
unobserved and have not become manifest in customer purchase preferences or behaviors
yet.
Answer: TRUE
32) Positioning helps improve your relative advantage in the minds of your targeted customers.
Answer: FALSE
33) Cluster analysis uses customer preferences to cluster individual customers into a given
number of groups within this two-dimensional space by simultaneously minimizing the
distance from each individual customer to the center of a cluster and maximizing the
distance between both clusters.
Answer: FALSE (may be more than two clusters)
34) Factor analysis is used to condense a large “pool” of potential customer needs, wants, and
preferences into a short set of similar characteristics, and to reduce high correlation among
predictors.
Answer: TRUE
35) Positioning entails changing both the actual offering and the perceived offering.
Answer: TRUE
36) The GE matrix selects segments based on competitor attractiveness and competitive
strength.
Answer: FALSE (market attractiveness)
37) Market orientation comprises intelligence generation, intelligence dissemination, and

responsiveness.
Answer: TRUE
8
38) Positioning Statements encapsulate the three questions into one concise statement that
firms use to direct their internal and external marketing activities: who should the firm
target, what needs and benefits are being fulfilled, and why does this offering provide a
relative advantage over competitive offerings
Answer: TRUE
39) Sources of customer heterogeneity include customers’ individual differences, life

experiences, functional needs, and self-identity or image, as well as persuasion through
marketing.
Answer: TRUE
9
40) Write a short essay about the evolution of approaches to managing customer heterogeneity.
Answer: Mass Marketing Era. Mass marketing (undifferentiated marketing), which uses mass
media to appeal to an entire market with a single message, is a marketing strategy in which a
firm mostly ignores customer heterogeneity, with the assumption that reaching the largest
audience possible will lead to the largest sales revenue. Mass marketing became popular with
the emergence of radio and television media outlets, which had the potential to deliver the same
message to a larger number of consumers than was ever possible before. For example, television
advertising was $12.3 million in 1949; two years later it had grown tenfold. By 1960, televisions
approached 90% household penetration. However, mass marketing is not individualized; it
assumes everyone’s preferences are the same. Typically, mass marketing generates relatively
lower profit margins and response rates, and it is often accompanied by high competitive
intensity. In the 1950s and 1960s, companies such as P&G, Coca-Cola, McDonald's, General
Motors, and Unilever Group were all dedicated mass marketers, but as the century came to a
close, most of them were shifting to more targeted approaches. James R. Stengel, P&G's global
marketing officer, argues that the company no longer mass markets any of its brands, “whether
it's Tide or Old Spice or Crest or Pampers or Ivory. Every one of our brands is targeted.” Niche
Marketing Era. Niche marketing focuses marketing efforts on well-defined, narrow segments of
consumers, and by specializing, this method seeks to give the firm a competitive advantage.
Coming up against the limitations they confronted when they ignored customer differences,
marketers recognized that a niche marketing strategy (micro marketing) could be more
effective for driving profits and withstanding competition, especially if they deployed a niche
strategy against a mass marketing firm. Niche firms often receive a price premium, because they
offer a “scarce” product relative to mass marketers but target a segment that a mass marketer is
serving only with a general offering, instead of something that matches the subgroup’s
preferences. For example, Eurosport targets soccer enthusiasts with their favorite team’s jersey,
cleats, shin guards, and even custom gear for local club teams, an assortment that is not
available in department stores or even sports-focused chains like Sports Authority and Big Five
Sports. Sports channels such as Fox Soccer Channel provide firms like Eurosport an excellent
medium to target a relatively homogenous group of customers (at least as compared to NBC
News or even ESPN) with advertisements for their offerings. Shifting from broadcast to cable
television, with its ability to provide hundreds of channels, better supports niche
communication strategies or "narrowcasting." Similar advances in printing technology and
modular manufacturing processes also have enabled firms to execute niche marketing. In turn,
some firms try to merge the benefits of mass marketing and niche marketing strategies.
Department stores like Nordstrom and Galeries Lafayette carry a large assortment targeted to
diverse, high-end customer preferences, but then they add “shop-within-a-shop” areas in their
large department store formats to promote niche brands to specific customer subsegments.
One-to-One Marketing Era. The present era is marked by a shift towards one-to-one marketing,
10
such that firms attempt to apply marketing strategies directly to specific consumers. One-to-one
marketing tailors one or more aspects of the firm’s marketing mix to the individual customer,
which is an extreme form of segmentation, with a single customer in the target segment.
Amazon.com attempts to be a one-to-one marketer by remembering each customer’s
preferences and recommending books and music targeted to their tastes. In a book predicting
this era, The One to One Future: Building Relationships One Customer at a Time, Peppers and
Rogers suggest that in this new business model, rather than the share of the market, firms will
focus on the share of customer, one at a time. Theoretically, this strategy is the best one for
dealing with customer heterogeneity, because it recognizes that all customers are different and
provides a unique product or service to match each customer’s preference. Continued
technological advances make this approach far more feasible, but for most offerings, the added
costs of providing a truly one-to-one solution, reflected in the higher price to the consumer,
outweigh the added benefits that the consumer receives from an optimally aligned offering,
compared with a firm that targets a subgroup of multiple similar customers with a relatively
well-targeted offering. Continuing the soccer example, the extra cost of a completely custom
jersey or cleat designed for an individual, versus the semi-custom offering of selecting colors and
printing applied to a range of existing products, likely is not worth the benefits of complete
customizability.
41) Describe the four steps in a segmentation process briefly.

Answer: The steps are
i. Identify and refine “pool” of potential customers needs and descriptors (qualitative
research)
ii. Collect data from random assortment of potential customers on “importance” of
needs/benefits to purchase decision
iii. Use “needs/benefits” to segment the market into 3 to 7 homogeneous customer groups
a. Often need to group like questions together using factor analysis before
clustering customers
b. # segments based on results, ability to manage, and actionable
iv. Name segments (communication tool)
Several key points in this process need to be highlighted. First, segmentation must start with
a random sample of potential customers in the market, not just the firm’s existing customers,
because that is the only way to understand what customers in the overall market for this
product or service category want, and it is key to uncovering emerging or untapped
markets. Second, customers should be divided into groups on the basis of their needs and
desires in the product category, not demographic variables (age, gender) or size (annual
11
sales revenue). Knowing customers’ preferences is critical to matching their needs to a

solution. In many cases, demographics provide a poor indicator of a customer’s true
preferences and are used only because they are readily observable. Third, it is important to
ensure that customers in one group have similar preferences, but it is also ideal to maximize
the differences between segments, to help the firm offer more clearly differentiated products,
without facing spillover competition from other firms that are targeting neighboring
segments.
42) What the three key questions to address in a positioning statement?

Answer: Firms often find it helpful to write a positioning statement, to capture the key
marketing decisions to appeal to customers in the firm’s target segment. Three questions should
be addressed in a positioning statement: Who are the customers?, What is the set of needs that
the product or service fulfill?, Why is this product/service the best option to satisfy customer
needs (relative to the competition or a substitute)?
Thus a succinct template for a positioning statement might be, “For [target segment] the
[product/concept] provides [benefit], which [compelling reasons for buying versus competition].”
This statement then becomes the roadmap for a plethora of implementation decisions involved
in marketing a product or service, both inside and outside the company. In larger firms, different
groups of employees design, implement or affect customer perceptions, so a clear positioning
statement is critical to aligning everyone’s decisions and actions. Inconsistency across sales
organizations, advertising materials, channel members, and product management has the
potential to undermine the effectiveness of an otherwise well-designed positioning strategy. As
a powerful external and internal communication tool, the positioning statement instead
provides clear guidance to everyone involved, thereby minimizing the potential that any
employee or outside vendor will make decisions incongruent with the firm’s positioning
strategy.
For Kellogg’s Nutri-Grain cereal bars, the positioning statement reads, “For people on the go
who want to eat healthy, Nutri-Grain is the cereal bar that is a healthy snack you can eat on the
run. That’s because Nutri-Grain is made with real fruit and more of the whole grains your body
needs and comes in individually wrapped packages that you can eat anywhere.” It addresses the
three key questions: who, “For people on the go who want to eat healthy,” what, “Nutri-Grain is
the cereal bar that is a healthy snack you can eat on the run,” and why, “Nutri-Grain is made with
real fruit and more of the whole grains your body needs and comes in individually wrapped
packages that you can eat anywhere.”
43) What the three key inputs to solving customer heterogeneity?

Answer: The first input refers to needs, desires, and preferences across customers in an industry,
geographic region, market segment, or product category. Firms often survey potential
customers to capture customer preferences across relevant purchase attributes (basis for
12
segmentation). When entering new markets or after dramatic market turbulence, firms should
start with qualitative approaches (focus groups, interviews, market observations) to identify all
relevant decision attributes, before capturing more detailed input about the importance of the
various attributes. Demographic information (gender, age, income, zip codes) and descriptors of
a segment then can identify targeted customers during the implementation of acquisition
strategies (see Chapter 3). In larger markets or industries (e.g., cell phones, automotive, retail),
market research consultants conduct generic segmentation analyses and sell the results to
multiple industry participants.
Customers also might provide their perceptions of specific firms and brands in the marketplace
across key attributes, for use in perceptual maps. Segmentation focuses on customer preferences
for attributes, independent of specific firms or brands; perceptual maps capture customers’
perceptions of existing brands on the same key attributes. Finally, customer input helps the firm
determine segment attractiveness, such as growth rate and price sensitivity information. Such
attractiveness information often comes from multiple sources, including customer surveys,
marketing industry reports, and other secondary sources.
The next sets of inputs are similar, but whereas one focuses on the focal company, the other
pertains to its competitors in the relevant category or industry. In both cases, an inventory of the
company’s and competitors’ strengths and weaknesses is needed to evaluate the firm’s relative
competitive strength, in support of the targeting and positioning processes. Company and
competitor strengths and weaknesses should span all relevant domains—manufacturing,
technical, financial, marketing, sales, research, legal, or any other domain that could be
leveraged as a relative competitive advantage. Company and competitor strengths and
weaknesses should be collected together with opportunities and threats in a classic SWOT
analysis (strengths, weaknesses, opportunities, and threats). All four factors can inform a firm’s
targeting and positioning efforts. (Sidebar 2.3 describes the SWOTs and 3Cs analysis
frameworks.) For example, if a firm sells in the consumer package goods (CPG) market, it may
prefer to rate market segments smaller than $250 million higher than larger segments in the
targeting process, recognizing the increased threat posed by the market leader P&G if it were to
enter the larger segments.
Overall, the inputs to the managing customer heterogeneity framework represent the 3Cs of
situation analysis. Customers, company, and competitors together represent the key contextual
background in which a firm’s strategy must operate. A firm’s marketing strategy is embedded in
this background and must both “fit” and “leverage” customers’ preferences and perceptions,
market trends, and the firm’s relative strengths to be effective.
44) What the three key outputs to solving customer heterogeneity?

Answer: The first output, industry segmentation, describes industry segments and includes, for
each named segment, salient purchase preferences, demographic variables, and potential
demand opportunities. This output is critical; it maps the potential customer landscape
according to two key questions: How can the marketplace be described using homogeneous
groups?, and What does each group of potential customers want?
13
The second output moves from the overall market landscape to the specific segment(s) of
interest, such that it extends the first output by providing a very detailed description of each
target segment. In so doing, it provides insight into the value or attractiveness of the focal
segment and the firm’s relative strength, as well as how each target group perceives the firm
and its competitors. Targeted customers can be identified on the basis of a detailed description
of preferences and demographics, and this “story” transforms the customer segment into more
than a list of statistics. Thus, the second output addresses two additional questions: What set of
segments will the firm pursue?, and How does the firm identify each group of target customers?
The third output is positioning statements, which encapsulate the three key questions into one
concise statement that firms use to direct their internal and external marketing activities: who
should the firm target, what needs and benefits are being fulfilled, and why does this offering
provide a relative advantage over competitive offerings? Position statements should be
developed for the firm overall, as well as for each key target segment it addresses. A positioning
statement captures the essence of the firm’s positioning strategy for a target segment.
14
Marketing Strategy:
Question Bank
1

1. Only ________ in markets with huge entry and exit barriers can ignore changes among their
existing customers?
a. oligopolies
b. multi-national subsidiaries
c. monopolies
d. price leaders
Answer: C
2. Which of the following are true? (check all that apply)

a. all customer change is event driven
b. even after customers are assigned to a segment, their needs continue to evolve
monopolies
c. all customers change—this can represent an opportunity for firms
d. all customers change—this can represent a threat for firms
Answer: B, C & D
3. Due to rapid technological and communication developments, the _____ and their ______ have
increased.
a. rapidity of industry change, competition’s
b. speed at which customers change, expectation of firms’ response times
c. inertia to customer change, and rapidity of firms’ response times
d. speed at which firms change, and social media’s
Answer: B
4. Discrete life events, typical lifecycles, _______, product lifecycle, and _______ are the five sources
of customer dynamics.
a. learning effects, customer preference changes
b. transient effects, customer preference changes
c. learning effects, environmental changes
d. transient effects, environmental changes
Answer: C
5. Various investments in facilities and brand building mean that barriers and switching costs
will make following some customers more difficult.
a. brand-building
b. price cuts
c. competitive attacks
2
d. switching costs
Answer: D
6. A marketing strategy can be devised to cater to an average individual at any stage of life, this
is a process of _______ lifestyle for marketers?
a. product
b. industry
c. customer
d. All of the above
Answer: C
7. How many stages are present in a product lifecycle?

a. 5
b. 3
c. 6
d. 4
Answer: D
8. Which of the following is an advantage of the lifecycle approach? (check all that apply)
a. Provides insight for AER decisions
b. Simplicity in use
c. Averages all customers
d. Identifies temporally homogeneous groups
Answer: B
9. Which of the following is a disadvantage of the dynamic customer segmentation approach?

(check all that apply)
a. Provides insight for AER decisions
b. Segments are not perfectly homogenous
c. Averages all customers
d. Identifies temporally homogeneous groups
Answer: B
10. Industry lifecycle and product lifecycle have _____ and _____ stages respectively.
a. 5, 3
b. 4, 5
c. 5, 4
d. 3, 4
Answer: C
3
11. Dynamic-based segmentation is sometimes called the _______model, because it captures

customers entering the firm’s portfolio and expanding over time, even as other customers
slowly leave.
a. Acquisition–Expansion–Retention (AER)
b. Hidden Markov Model (HMM)
c. Customer Relationship Management (CRM)
d. Customer Lifetime Value (CLV)
Answer: A
12. Which of the following is not an output of the HMM?

a. number of feasible states in the data
b. initial probability that a customer is in a state
c. effect of marketing of moving customers across states
d. firm marketing actions
Answer: D
13. In the communal state, the levels of trust, commitment, dependence, and relational norms
are higher than in any other state, and the relationship produces good cooperation and
profit.
a. transactional
b. communal
c. transitional
d. damages
Answer: B
14. Using ______ provides several advantages including inputs to make trade-offs and resource
allocation decisions among different ______ stages at the customer level.
a. CLV, AER
b. AER, HMM
c. HMM, CLV
d. AER, CLV
Answer: A
15. ______________, defined as the planned process of introducing new customers to a firm to
improve their long term satisfaction and loyalty.
a. customer relationship management
b. customer initiation
c. customer onboarding
d. None of the above
4
Answer: C
16. Which of the following does not occur at the decline stage of the typical product lifecycle?
a. Destructive competition and changing consumer needs and desires lead to product
decline.
b. Firms’ sales and profits decline.
c. Firms with higher cost and those without a unique advantage enter the market.
d. The market often consolidates with fewer suppliers.
Answer: C
17. Increasing _____ while decreasing _____ and annual marketing costs all improve CLV.
a. acquisition, margins
b. referrals, acquisition
c. referral, margins
d. margins, acquisition
Answer: D
18. The Hidden Markov Model (HMM) uses changes in the __________ customer behavior to
identify customer states and model the probability of transitioning, among those states.
a. present, defecting
b. past, defecting
c. present, transitioning
d. past, transitioning
Answer: D
19. Direct marketers have used _____, a simplified version of ______, for decades.
a. CLV, RFM
b. AER, CLV
c. RFM, CLV
d. CLV, AER
Answer: C
20. To predict the effect of promotion on customer cross-buying probability, a firm would use a.
a. regression model
b. HMM model
c. lost customer model
d. choice model
Answer: D
21. _______________ is a powerful, diagnostic tool to identify customers who have migrated away
and identify the cause for the migration
5
a. customer cohort analysis

b. dynamic factor analysis
c. lost customer analysis
d. hidden Markov analysis
Answer: C
22. Using CRV approach, firms have special programs to

a. special finder’s fees
b. discounts for first-time customers
c. promotions for returning customers
d. all of the above
Answer: A
23. __________ margins and retention rates while __________ decreasing acquisition and annual
marketing costs and discount rates all improve the customer’s lifetime value.
a. decreasing, increasing
b. increasing, decreasing
c. steady, increasing
d. increasing, steady
Answer: B
24. __________ data can help identify a triggering event or mechanism underpinning each
migration and thereby answer questions about the causes of change.
a. Quantitative
b. Qualitative
c. Both A and B
d. None of the above
Answer: B
25. AER positioning statements are internally focused on _________ customers, rather than
outwardly focused on ______ customers in the market category.
a. All, existing
b. All, few
c. Existing, All
d. Few, All
Answer: C
26. The firm’s existing customer portfolio, ______, and qualitative and quantitative information
from lost customer analysis are the three main inputs to the MP #2 framework.
a. Past marketing and customer response data
b. Past pricing and customer response data
c. Past segment and pricing data
6
d. Past customer response and segment data

Answer: A
27. Which of the following is not an output of the MP #2 framework?

a. The products and services customers buy at different points in their lifecycle
migration
b. Customer static needs and preferences
c. How they feel at different stages in their lifecycle
d. The CLV of customers in each persona
Answer: B
28. Which of the following is not a process of the MP #2 framework?

a. Industry Segmentation
b. Migration Paths and Triggers
c. Customer Lifetime Value of Segments
d. AER positioning statements
Answer: A
7
29. There are three approaches to managing customer dynamics: lifecycle, customer dynamic
segmentation, and customer lifetime value approaches.
Answer: FALSE (Generic)
30. In a product lifecycle method, managers might average across a large number of different
people, product and industry categories, which may give a general sense of change.
Answer: TRUE
31. In the industry lifecycle, the 3rd stage i.e. maturity stage, marked by economies of scale, is
the phase where smaller players get forced out.
Answer: FALSE (Shakeout)
32. Over the last 30 years, the entry barriers to start a new business that targets an emerging
customer segment or need also have increased.
Answer: FALSE (decreased)
33. An advantage of customer lifetime-value approach is that it inherently stems from and
creates a customer-centric culture.
Answer: TRUE
34. Because each state describes the common behaviors exhibited by some group of customers
at some point in their relationship with a firm, HMM is a form of dynamic segmentation.
Answer: TRUE
35. CLV makes us think beyond the 80/20 rule, firms can sometimes earn 150% of their profits
from 30% of their customers.
Answer: TRUE
36. Some retention strategies from firms aim to stabilize the switching costs required to move
to a competitor for the customer?
Answer: FALSE (increase)
37. A suboptimal allocation of retention expenditures will have a larger detrimental impact on
long-term customer profitability than suboptimal acquisition expenditures.
Answer: TRUE
38. A choice model is a qualitative model that predicts how the likelihood of an observed
customer choice or response, is influenced by a firm’s marketing interventions, and/or
customer characteristics.
8
Answer: FALSE (mathematical)
39. Customer lifetime value attempts to capture the true contribution of each product, by
determining the discounted value of the sales and costs associated with this customer
across the expected migrated paths followed throughout the relationship.
Answer: FALSE (contribution of each customer)
40. The lifecycle approach can be problematic because it assumes an average rate of change of
customers, products, and industries.
Answer: TRUE
9
41. Write a short essay about the evolution of approaches to managing customer dynamics.
Answer: Looking back over the past 30 years provides insights into the evolution of
approaches to managing customer dynamics. In particular, the pace of technology turbulence
and advancement, increases in the speed and breadth of communication, and the erosion of
many traditional cultural barriers to change have increased the speed with which customers
change. For example, when telephones were new in the early 1900s, it took decades for them to
enter 50 percent of homes; cellphones reached the same level of adoption in less than five years
at the end of the same century. The entry barriers to start a new business that targets an
emerging customer segment or need also have decreased. As customers change more quickly
than before, expectations about firms’ response times also have shortened. Many startups
compete to find the customer migration points or changes that will provide them with an entry
point. When Uber was founded in 2009, its goal was to “crack the horrible taxi problem in San
Francisco,” but in five short years, it already had expanded to more than 200 cities and was
valued at approximately $41 billion. Overall, the approaches for managing customer dynamics
fit into three categories. Lifecycle Approach uses generic stages of growth and their position in
the lifecycle to determine customer preferences and associated strategies. Dynamic Customer
Segmentation segments a firm’s existing customers on the basis of their similar, expected
migration patterns. Customer Lifetime Value captures the contribution of each customer
according to his or her expected migration path over the entire lifetime with the firm.
42. Write a short essay about lost customer analysis.
Answer: A firm contacts customers that have migrated away, to identify the cause for this
change, then works backward to fix the problem and ensure other customers don’t leave for the
same reason. It takes a significant number of lost customers before a firm recognizes that it isn’t
just “normal” customer churn but rather an indication of an underlying problem. It is a three-
step process, which provides insights into both strengths and weaknesses. First, firms set
regular intervals for contacting lost customers to identify the cause of their transition, where
they went, and potential recovery strategies. Second, if the lost customer is not in the firm’s
main target segment, firms could change their acquisition criteria, or evaluate an expansion
strategy to address a new sub-segment of customers. Third, if the lost customer is in the firm’s
target market, firms should fix the problem, or implement retention strategies to build brand
and relational loyalty.
43. What are the main outputs from the MP#2 framework?
Answer: The customer dynamics framework uses these three inputs, applies one or more of
the different approaches and analyses for managing customer dynamics, and thereby generates
three outputs. The first is a description of the firm’s customer personas and expected
migrations to understand how they change, including: Critical life event triggers, the products
and services they buy at different points in their lifecycle migration, when they stop buying and
10
why, how they feel at different stages in their lifecycle, and The CLV of customers in each
persona.
The second and third outputs are closely interrelated and represent the strategic decisions that
occur as part of the management of customer dynamics. Deciding how to position the firm and
its offerings for each persona across AER stages are key decisions, informed by insights gained
from dynamic segmentation and CLV analyses. This output appears in the form of AER
positioning statements. In many ways, they parallel the decisions firms make to determine how
to position themselves in the overall market to targeted customers, but with greater refinement
and more focus on existing customers, by capturing differences across personas and stages.
However, AER positioning statements need to be congruent with the firm’s overall positioning in
the marketplace to be effective.
Finally, the last outcome builds on these AER positioning statements by outlining what
marketing strategies have been and may be most effective across personas and stage. Thus, AER
strategies focus on the how; AER positioning statements focus on the what. As firms begin to
manage customer dynamics proactively, these strategies may appear somewhat general and not
based on “hard data,” but over time, as firms identify gaps and collect and analyze more data, the
strategies grow more robust.
44. What are three ways to use a choice model?
Answer: In a choice model setting, every individual is assumed to derive an unobserved
product-specific utility from several product options. The individual is assumed to pick the
product option that provides the maximum utility. The dependent variable in a choice model is
binary: every individual chooses (or does not choose) a product option. Every product option’s
attractiveness is assumed to stem from a finite set of attributes (e.g., brand name, price,
advertising). The independent variables in a choice model are the measure of the strength of
attributes of each of the product option, e.g., product option 1 may have a low price, while
product option 2 may have a higher price. The model uses the two inputs (dependent variable,
independent variables) to estimate several outputs. First, it provides the weights (or
coefficients) that each attribute would have had to cause customers to pick a certain product.
This provides the most important factors that influence customer choice likelihood. Second, it is
used in a predictive sense. For example, when we only observe product attributes, we can use
the attributes and the weights of the model to predict the choices that are likely to be made by a
new set of customers. This, in turn, can help a firm segment and target customers based on
choice likelihood. Third, the model can be used to simulate the market share of a product
category, by adding up the product choices made by all customers faced with all products. This
can help managers plan their marketing efforts.
45. Describe the key sources of customer dynamics, with examples

Answer: First, individual customers change due to discrete life events, such as their graduation,
a new job, a marriage, parenthood, or retirement, that have immediate impacts on many aspects
of their purchase decisions. Even relatively small events in a customer's life—like a change in
the amount of television they watch or eating out more than usual—are associated with shifts in
11
their brand preferences. After a painful divorce, a person might avoid specific brands that were
their ex-spouse’s favorites, to avoid the psychological distress associated with such reminders.
Recent college graduates change their store and brand preferences, because their shopping
focus alters when they transition from the role of being a student to becoming an employee.
Second, people progress relatively slowly through a typical lifecycle as they mature, which also
influences many of their product and service priorities. To meet customers’ evolving desires as
they age, marketers have identified various psychological and sociological changes over time.
Most consumers shift in their willingness to take risks or try new things, and lifecycle
frameworks in marketing effectively describe some of these general trends. For example, young
and single consumers often focus on products and services that promise to make them
attractive to potential mates (cologne, salon and exercise services, designer clothing); as they
age, they start to focus more on financial safety and security. In the final stages of people’s lives,
they tend to become fixed in their brand purchases, fairly conservative in their decision making,
and more focused on their relationships with sellers. Although these generalizations can offer a
broad sense of average changes, assuming that these life changes are constant across all
consumers is deeply problematic.
Third, the attributes that customers consider most critical often vary systematically, depending
on their experience with and knowledge about a product or service category, which constitutes
a learning effect. The customer learning effect is the process by which customers become
familiar with the product by using it, which changes their weighting of the relative importance
of different attributes due to their enhanced knowledge and experience. Experience with brands
similarly influences future choices. For example, a consumer who has grown accustomed to
using Apple products regularly might weight the user interface more important and exclude a
new version of a Samsung smartphone, even if it offers improved capabilities, from her
consideration set. In response to these effects, some firms work diligently to influence the initial
“burn-in” or “onboarding” periods. That is, to encourage new customers to come on board and
start using their brands, they design programs that ensure some interaction with the customer
within the first 90 days after they adopt. These relationship programs make customers more
likely to express greater satisfaction, purchase additional products, and recommend the
provider to friends. However, sometimes the learning effect can undermine a customer’s
repurchase intentions if they learn about a brand’s feature and decide it offers little value.
Fourth, changes due to learning and experience operate at both the individual customer level, as
we just described, and at the product market level. The product lifecycle is a well-recognized
phenomenon that captures prototypical changes in customers’ purchase criteria and marketers’
actions as the product category matures. Right after a new product is introduced, for example,
most of its sales represent trial purchases, so marketers often offer free samples. As the product
begins to take off though, with a faster growth rate, consumers begin to rebuy and influence one
another through word of mouth. Therefore, firms likely drop their free sample offers, focus
more on customer retention, launch loyalty programs, and develop a more competitive pricing
plan. This notion is the foundation for the strategies of many apps and video games, which allow
consumers to play for free for some limited time until the mature game becomes so central to
12
their leisure time that consumers agree to pay to continue playing and earning special status
within the game
Fifth, customer decisions take place in a constantly changing environmental context.

Governments, industry trade groups, non-profit organizations, and marketers always are
working to change perceptions and regulations, using various communication media. Some
slow-changing cultural events take generational labels or descriptions (Baby Boomer,
Millennial) that seek to capture the vast differences between people born in different eras.
These influential factors can affect a person’s development trajectory, whether directly or
indirectly by interacting with the other sources of change. Thus, for example, Millennials have
always functioned in an environment marked by ubiquitous technology, but at the same time,
many people in this age cohort currently are experiencing discrete life events such as
parenthood.
13
Marketing Strategy:
Question Bank
1

1) Which of the following is true? (check all that apply)

a) The persistent efforts by all firms in the market to copy and innovate, such that all
competitors react, constitutes a third challenge that managers confront
b) When managers develop their marketing strategies, they need to consider customers
heterogeneity and dynamism, but also anticipate competitors’ reactions, now and in the
future.
c) Typically a firm must establish the sustainable position with a targeted customer group
before they can build an SCA around that position
d) Of the four First Principles of marketing, managing SCA may be the least difficult to
execute
2) When those competitors try a new tactic, the battlefield shifts, so the firm must adapt its
SCA to protect its __________ or else give up the fight and move on to a new battleground for a
different customer segment.
a) Lowest price
b) Cost-leadership
c) Customer Segment
d) Market sensing capability
Answer: C
3) GE accordingly has transformed from an industrial products company to a __________, and
then again to a ________ in response to the modern marketplace, such that it constantly has
developed significantly different and novel SCA along the way.
a) Massive customer portfolio, service-based industry
b) Digital industry company, service-based business
c) Massive customer portfolio, digital industry company
d) Service-based business, digital industry company
Answer: D
4) Focusing only on competitors often ____________________________________________:
a) Helps firms better understand their customers’ needs and desires
b) Leaves firms blind to changes in their customers’ needs and desires
c) Helps firms increase their customer base
2
Answer: B
5) Competitors can overcome a firm’s SCA by applying the following strategies (check all that
apply)?
a) Exploiting changes in customers’ desires due to cultural, environmental, or other factors
b) “Me-too” copycats that improve the efficiency/effectiveness of an existing execution
c) Technical innovations that provide them a platform to launch a disruptive offering
d) All of the above
Answer: D
6) Using brands as an SCA is most effective in _______, __________ markets.

a) Large, B2B
b) Small, B2B
c) Large, B2C
d) Large, B2C
Answer: D
7) True comprehension of customers occurs at ____________, but strategic and resource decisions
occur at ____________:
a) Macro levels, Micro levels
b) Interior level, Exterior level
c) Micro levels, Macro levels
Answer: C
8) While making Brand, Offering, and Relational (BOR) strategic decisions, ____________ are
normally determined last, because they involve the delivery and experiential aspect of
offerings.
a) Offering decisions
b) Relationship strategies
c) Brand decisions
Answer: B
9) BOR equities are similar to _____________:
a) Tangible assets
b) Intangible assets
c) Shareholders’ equity
3

Answer: A
10) ______________ is the largest barrier to competitive attacks:
a) Interpersonal relationships between producers and consumers
b) Matching consumer preferences
c) Mass marketing
Answer: A
11) A brand can provide a relative advantage when:
a) It aligns better with customers’ needs than competitors’ brands
b) It successfully replicates its competitor’s ideas
c) It recognizes changing market needs
Answer: A
12) Fulfilling a SCA better than its competitors is particularly critical in:
a) More mature product/market segments
b) Rapidly growing segments
c) New product/market segments
Answer: A
13) Using relationships as an SCA is most effective in ___________________ setting (check all that
apply):
a) B2B
b) B2C
c) Service
d) Complex offering
Answer: A, C & D
14) New product failure rates are approximately 60 percent, and the top reason reported for
product failures often is the ____
a) Price of the new offering.
b) Lack of need for the new offering
c) Design of the old offering
d) Design of the new offering.
Answer: B
4
15) Good brands (check all that apply)

a) Create images that reside in consumers’ minds
b) Are hard to duplicate
c) Do not compete on price
d) facilitates habitual buying through awareness
Answer: A, B & D.
16) Good offerings (check all that apply)
a) Have great costs benefits
b) Have performance advantages
c) Provide access to distribution channels
d) Fashion great brands
Answer: A, B & C.
17) Good customer relationships (check all that apply)
a) Build great consumer trust
b) Develop interpersonal reciprocity among consumers
c) Are primarily suitable in business-to-business markets
d) Works well in situations with complex products
Answer: A, B & D.
18) Arrange in order:
1. Pre-Industrial Age
2. Service Revolution
3. Industrial Revolution
4. Technology Revolution
a) 1, 3, 4, 2
b) 1, 2, 3, 4
c) 1, 4, 2, 3
d) 1, 2, 4, 3
Answer: A.
19) Which of the following is true about the customer equity perspective:
a) Customers are considered a financial asset, which should be measured, managed, and
maximized
b) Treat customers just like other assets even though accountants typically don’t treat
“customers” as an asset
5
c) Customer equity is easily calculable on the balance sheet: spending on building equity
(e.g., brands, R&D, relationships) is treated as an expense
d) All of the above
Answer: A & B.
20) We need customer-centric accounting because (check all that apply):
a) It is the primary driver of a firm’s sales and profits
b) Next to products, brands, offerings and relationships are the secondary drivers of profits
c) It captures the long-term impact of marketing actions
d) All of the above
Answer: A & C.
21) Offering equity is less important for (check all that apply):
a) Services
b) High involvement products
c) Maturing markets/industries
d) All of the above
Answer: D.
22) Relationships equity is more important for (check all that apply):
a) Business-to-consumer services
b) Business-to-business services
c) Long product cycles
d) Complex products
Answer: B, D.
23) Causality implies (check all that apply):
a) the independent variable and outcome variable co-vary together
b) the independent variable precedes the outcome variable in time
c) alternative explanations for the measured effect can be ruled out
d) all of the above
Answer: D.
24) The customer equity perspective requires (check all that apply):
a) building and maintaining a parallel “customer-centric accounting process,” outside the
firm’s normal financial accounting process
b) recognizing that firms’ primary SCA result from their BOR investments and strategies
c) recognizing that firms’ SCA never come from deep and low-cost financial resources,
human resource strategies, and operational processes
d) All of the above
6
Answer: A, B.
25) The three key inputs to creating SCA are ___, AER strategies, and ____:
a) BOR strategies, lost custom analysis
b) Positioning statements, future trends,
c) Positioning statements, BOR strategies
d) BOR strategies, future trends
Answer: B.
26) The key outputs of creating SCA are ___, AER strategies, and ____:
a) BOR strategies, lost custom analysis
b) Positioning statements, future trends
c) Positioning statements, BOR strategies
d) SCA statements, BOR strategies
Answer: D.
27) The output of MP#2 is a _____ of customer heterogeneity and dynamics in the firm’s
customer _____, it captures the most effective AER strategies for each relevant persona.
a) Microanalysis, portfolio
b) Statement, marketing-mix
c) AER grid, BOR stack
Portfolio, BOR stack
Answer: A.
28) Which of the following is true? (check all that apply)
a) A firm should make brand decisions, which are influenced by the firm’s overall
positioning objectives from MP#1 and MP#2 and largely determine how the firm will be
positioned in the overall marketplace and in existing customers’ minds
b) The firm can then focus on its offering decisions; product and service innovation and
R&D efforts need to support both brand strategies and the firms positioning objectives
c) Relationship strategies normally are determined last, because they involved the delivery
and experiential aspect because in this case, boundary spanners are critical to the
customer experience and the firm’s overall value proposition
d) All of the above
Answer: D.
29) Using the inputs from the AER strategy grid and key environmental trends, the BOR equity
grid can be completed to describe three key pieces of information for the BOR strategies:
Marketing objectives, ____________, and maintaining the SCA over time.
a) AER strategy
b) Relative advantages over competition
7
c) BOR stack
d) All of the above
Answer: B.
30) Industrialization increased the importance of brands as a means to increase market
competition.
Answer: FALSE (Distinguish among products and provide a signal of quality of the offerings)
31) A firm has a sustainable competitive advantage (SCA) when it is able to generate more
customer value than competitive firms in its industry for the same set of products and
service categories and when these other firms are unable to duplicate its effective strategy.
Answer: TRUE
32) Maintaining a relative advantage over moderate competitors is particularly difficult, because
they benefit from factors such as free-rider effects.
Answer: FALSE (Early followers / “Me-too” competitors)
33) Using offerings as an SCA can be effective, because new and innovative products/services
are tough to build and require low investment in time and money.
Answer: FALSE (easy to build)
34) These three sources of sustainable competitive advantage—brands, offerings, and
relationships (BOR)—are additive and often work in a compensatory manner to give a firm
a strong relative position in the marketplace.
Answer: FALSE (additive and synergistically)
35) Technical innovations represent a powerful foundation for launching a new offering that will
make existing products or services obsolete
Answer: TRUE.
36) Since brand building can be hard to target, brand equity is better for offerings with large
heterogeneous user group.
Answer: FALSE (homogenous).
37) A third input to the managing SCA framework is long-term technology, regulatory, and
socioeconomic trends, which clearly can disrupt any organization’s SCAs.
Answer: TRUE.
8
38) Detailed AER strategies – aggregate and reorganize each targeted customer segment and
persona according to its needs; the most effective strategies across time (accounting for
customer dynamics) are in the brand, offering, and relationship categories
Answer: FALSE (Detailed BOR Strategies).
39) Write a short note about the evolution of sustainable competitive advantage in marketing.
Answer: Prior to the industrial age, business transactions occurred in local markets, where
farmers and craftspeople sold their wares directly to local customers. These “producers” were
often both the manufacturer and retailer, and most retailers serviced a small geographical area,
which made interpersonal relationships between producers and consumers the largest barrier
to competitive attacks. Similarly, relationships led to trust among merchants in the exchange of
goods that were not locally produced. Thus trade only occurred among groups with ongoing
trusted relationships such as merchants along the “silk route”.
The Industrial Revolution changed these exchange characteristics. Manufacturers used the
economies of scale associated with mass production to produce a large volume of products at
low cost, but these goods also required shipping, storage, and sales across a larger geographic
area. The technological revolution that began in the late 1950s, with the shift from analog and
mechanical technologies and then to digital computers and digital recordings, in turn, shifted
the focus to new and innovative offerings as a key source of SCA. Many modern CEOs regard
innovation as critical to their firms’ future competitiveness and an important source of SCA,
required to both protect existing positions and expand into new markets. Over time, the
primary source of SCA thus has evolved: relationships in early markets, brands in the aftermath
of the Industrial Revolution with the emergence of middlemen and retailers, and innovative
offerings following the technology revolution and its significant disruptions to ongoing
industries and firms. However, we also highlight that each new SCA adds to the last source of
SCA, rather than displacing it.
40) What is the customer equity perspective?
Answer: Customer equity for a firm refers to “the total of the discounted lifetime values of all its
customers”. When a firm advertises to build strong brands, makes R&D investments to develop
innovative products, or spends to hire and train salespeople who can enter into relationships
with clients, it should increase that firm’s brand, offering, and relational equities. Together these
three BOR equities constitute the firm’s customer equity and often is the best barrier (SCA) to
competitive assault, sometimes termed a BOR Equity Stack. A customer equity perspective
recommends regarding customers as financial assets, such that they can be measured, managed,
and maximized, similar to any other firm asset (e.g., land, buildings, equipment, intellectual
property). Customer equity for a firm refers to “the total of the discounted lifetime values of all
9
its customers.” When a firm advertises to build strong brands, makes R&D investments to
develop innovative products, or spends to hire and train salespeople who can enter into
relationships with clients, it should increase that firm’s brand, offering, and relational equities.
Together, these forms constitute the firm’s customer equity and thus the best barrier (SCA) to
competitive assault.
However, accountants treat these assets very differently than other, more tangible assets that
appear in a firm’s financial statements. For example, marketing costs appear as an annual
expense, implying (falsely) that all the benefits of this spending occur in the same year.
Marketing spending also is not regarded as an investment to build an asset; instead, it appears
on a firm’s balance sheet as an expense, completely spent by the end of the year. Such
treatments are clearly inaccurate, especially as research and practice confirm that brand and
relationship assets persist for extend periods and can create important SCA.
41) What is the BOR equity stack?
Answer: Three equities combine in an additive customer or BOR equity stack: Relationship
equity, Brand equity, and Offering equity. At the individual level, customer equity is analogous to
the customer’s lifetime value (CLV). Then when each customer’s equity is added together, it
generates the firm’s overall customer equity. In this sense, the customer equity perspective is
well suited to using a CLV analysis approach, because each market-based equity can be assessed
as an addition to the customer’s discounted cash flow over time. Thus, BOR equities are similar
to tangible assets: They generate a return on assets (ROA), can be built through investments,
and depreciate over time if not maintained.
If an unknown bartender pours the beer in an unlabeled glass and asks the consumer to put a
price on it, the noted price would represent offering equity—that is, the price for performance
or the product-only value. Then if the bartender identifies the brand of beer as it pours into the
glass, the difference in the price that the consumer would pay, versus the price of the unlabeled
beer, represents the brand equity. Finally, if the consumer’s favorite bartender served the
branded beer while chatting about topics of interest to both of them, learned over their long and
friendly relationship, the difference in the accepted price reflects relationship equity. When
summed across all of the firm’s customers, it represents the firm’s overall customer equity.
42) Write a short note on how marketing experiments work.
Answer: An experiment seeks to establish a causal relationship between an independent
variable (BOR investment) and an outcome. Causality implies (1) the independent variable and
outcome variable co-vary together (e.g., 10% off the price on a website and greater online
sales), (2) the independent variable precedes the outcome variable in time (e.g., online sales are
measured after the price promotion begins), and (3) alternative explanations for the measured
effect can be ruled out. To ensure causality, the marketing experiment needs to be designed well.
First, a good treatment group needs to be in place. A treatment reflects the precise statement of
the causal BOR relationship to be tested (e.g., how much an increase in the commission paid to a
10
salesperson increases sales by this salesperson); a treatment group is the group of subjects (i.e.,
salespeople) who receive this treatment. Second, we need a comparison group, in which the
causal factor stays constant (e.g., commissions to another group of salespeople stay the same).
Third, the treatment and control groups absolutely must be similar in all other respects (e.g.,
size, demographic makeup, selling motivation, experience). To achieve this criterion, most
experiments use random assignments to the treatment and control conditions. With a random
assignment, in a probabilistic sense, the chances of subjects receiving the treatment are equal
across the different groups.
43) Write a short note on the key outputs of a sustainable competitive advantage framework.
Answer: The first output is a description of the firm’s SCA now and in the future. The
descriptions need to clearly address the three conditions for SCA: (1) customers care about
it, (2) the firm does it better than competitors, and (3) it is hard to duplicate or substitute.
This output, a description of SCA, offers a high-level statement of how the organization will
win in the competitive marketplace over time. It aggregates all individual target segments
and personas to ensure compatibility, and it requires the firm to recognize the core
foundation for its long-term success. By clearly identifying the roots of a firm’s sustainable,
long-term, competitive advantages, senior leaders can invest and manage the necessary
resources more appropriately. Investments in and management of the firm’s overall SCA is
part of the top management team’s responsibilities. The marketing strategy is a critical
element of the SCA but is not all the SCA consists of. That is, the relative advantages
generated from brands, offerings, and relationships constitute the input of the marketing
strategy to the firm’s overall SCA.
The second output of the SCA framework is detailed BOR strategies that aggregate and
reorganize each targeted customer segment and persona according to its needs (accounting
for customer heterogeneity) and the most effective strategies across time (accounting for
customer dynamics) in the brand, offering, and relationship categories. For example, by
integrating insights into the needs of multiple personas across different AER stages, the firm
can identify the most effective overall brand strategy, which is important for several reasons.
First, a firm cannot institute a different brand strategy for every customer persona or across
its acquisition and retention stages, especially because brand strategies often are mutually
exclusive (e.g., everyday low cost vs. exclusive status). Marketing programs often spill over
to multiple personas and stages, so a high-level strategy is needed to ensure a consistent
brand strategy, effective for multiple customer groups. Second, it is inefficient to develop
different BOR initiatives for each persona in each stage, from cost, employee, expertise, and
implementation perspectives.
Both these outputs (SCA and BOR strategies) represent aggregations of insights gained from
more fine-grained analyses, combined and reorganized to support effective macro-level
decision making. This micro–macro duality is critical to a successful marketing strategy.
11
True comprehension of customers occurs at micro levels (avoid aggregation bias), but
strategic and resource decisions occur at macro levels (advertising, R&D, and sales force
strategies).
12

Multiple Choice Questions

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Multiple Choice Questions

Uploaded by

Copyright:

Available Formats

[여기에 입력]

MULTIPLE CHOICE QUESTIONS

1) The _________________ involves creation of substantial new value for

2) A first-mover advantage is nearly always trumped by _____________,

3) Short-term business pressures often undermine innovation

4) _____________ refers to the core value that the performance of the

5) ________________ is a process to increase the speed of a firm’s offering

6) Which of the following are the ways a firm can innovate?

7) Greater offering equity, generated from a firm’s new and

9) _____________ means that once developers/designers accept some

10) Which of the following is not true about disruptive innovation.

11) _______________ refers to an innovative offering that results from

12) Which of the following ways does marketing directly help in

15) _____________ aim at transforming the image of competitors brand

16) The basic intuition in Jugaad is that:

17) ________________ leads to continuous, incremental improvements

18) With its very different price and performance characteristics,

23) In Moore’s adoption cycle, the concept of _____________ refers to

30) Most firms rank innovation as a top strategic priority. Innovation

38) In the share of preference rule in conjoint, each customer selects

ESSAY TYPE QUESTIONS

40) Write a short note about the innovation radar.

expands to include new competitors, brands often constitute the

42) Write a short note about sustaining versus disruptive

their investments in existing offerings and staff of engineers who

customers actually make decisions, because few of them can

Chapter 1 Question Bank

1) Marketing Strategy consists of decisions and actions focused on building _____________, to

a) 1-5, 2-6, 3-7, 4-8

13) A product or lifestyle approach captures:

15) Lost customer analysis provides insights on:

a) strong awareness, recognition and habit, reduces their cognitive effort

a) research and development (R&D), reduce their costs, supplementary services

c) data mining, reduce their costs, supplementary services

26) ____________ is a technology-enabled, ______to harnessing customer and market data to

ESSAY TYPE QUESTIONS

42) How does marketing strategy differ from corporate strategy?

Chapter 5 Question Bank

1) Which of the following is a brand element? (check all that apply)

3) Which of the following is not true? (check all that apply)

d) Links and nodes

8) Brands can (check all that apply).

9) Brands affect sales growth by (check all that apply).

10) Brands affect profit growth by (check all that apply).

11) Brands affect profit growth by (check all that apply).

b) Reduce perceived risk

12) Spurious loyalty is when ______

17) Which of the following is not true?

23) Which of these techniques is not a data reduction technique?

26) Which of these is not an advantage of a brand extension?

c) Higher quality brands generally can be extended further

31) The six-step process of consumer processing is also called ______?

Chapter 2 Question Bank

4) Which of the following is not a part of the Big 5 traits?

5) Which of the following is true (check all that apply)?

d) Customers know all their diverse preferences

8) Which of the following is not addressed in a positioning statement?

11) Which of the following is true? (Check all that apply):

17) A perceptual map helps firms to (check all that apply):

18) Customer-centric organizations (check all that apply):

b) Differences match firm’s competencies

22) Check all the ideas associated with customer-centricity:

c) an inventory of your competitor’s strengths, weaknesses, opportunities, and threats

26) ______ is a technology-enabled, to harnessing customer and market data to

6) Using brands as an SCA is most effective in _, ____ markets.