University of Houston, Downtown

MBA 6208

Chapter 12 Addressing Competition and Driving Growth

1. WD40 offers a Smart Straw version of its popular multipurpose lubricant with a built-in straw that pops up for use. This is an example of which of the following main strategies for growing the core of the business?
   1. Make the core of the brand as distinctive as possible.
   2. Drive distribution through both existing and new channels.
   3. Offer the core product in new formats or versions.
   4. Increase costs and revenue.
   5. Expand to another geographic region.

2. Galaxy chocolate has successfully competed with Cadbury by positioning itself as "your partner in chocolate indulgence" and featuring smoother product shapes, more refined taste, and sleeker packaging, which represents which of the following main strategies for growing the core of the business?
   1. Make the core of the brand as distinctive as possible.
   2. Drive distribution through both existing and new channels.
   3. Offer the core product in new formats or versions.
   4. Increase costs and revenue.
   5. Expand to another geographic region.

3. Which of the following brands generates only 6 percent outside North America, with very little of that in fast-growing emerging markets like India, China, and Brazil, which may represent opportunities for its growth?
   1. UPS
   2. Under Armour
   3. FedEx
   4. Nike
   5. Adidas

4. Growing the core can be a less risky alternative than expansion into new product categories.

5. Growth strategies are "either/or" propositions; a focus on core businesses means foregoing new market opportunities.

6. Vancouver, Canada's Fortuna Silver Mines has focused on its two fully owned, fully integrated silver mines in Peru and Mexico to spur organic growth while looking for a third mine to drive further growth because the existing mines are not expandable.

9. The market                     has the largest market share and usually shows the way to other firms in price changes, new- product introductions, distribution coverage, and promotional intensity.
   1. challenger
   2. entrant
   3. follower
   4. nicher
   5. leader

10. When the total market expands, the market                usually gains the most.
    1. challenger
    2. leader
    3. follower
    4. nicher
    5. entrant

11. When a firm looks for new users in groups that might use a product but do not already use the product, the firm is using the strategy.
    1. new-market segment
    2. market-penetration
    3. geographical-expansion
    4. product development
    5. diversification

12. As the marketing manager for a floor tile manufacturer, Evans Smith is given a target to achieve 500 new customers by the end of summer. He decides to search the market for probable customers who might use the product but currently do not. Which of the following strategies is Evans pursuing to increase the market demand for his product?
    1. market-penetration strategy
    2. new-market segment strategy
    3. geographical-expansion strategy
    4. needs-assessment strategy
    5. consolidation strategy

13. When firms look for new users in groups that have never used the product before, the firm is using the            

strategy.

1. 1. new-market segment
   2. market-penetration
   3. geographical-expansion
   4. product development
   5. diversification

14. When Starbucks introduced its Tazo Tea line to bring in new customers who had never gone to Starbucks because they don't drink coffee, Starbucks was employing a     strategy.
    1. market-penetration
    2. new-market segment
    3. geographical-expansion
    4. niche identification
    5. blue-ocean

15. Trendz Inc. is a leading brand of fashion clothing and accessories based in Houston. After gaining a strong foothold in the US, the company wants to foray into foreign markets. The management at Trendz knows that people residing in other countries are likely to have different tastes and preferences, so they may have to redesign some of their offerings. Which of the following strategies is Trendz using?
    1. market-penetration strategy
    2. outsourcing strategy
    3. geographic-expansion strategy
    4. product differentiation strategy
    5. ethnocentric strategy

16. A market leader on the look out for more usage from existing customers should focus on increasing the frequency of consumption and                .
    1. decreasing the product price
    2. the product line
    3. the amount of consumption
    4. decreasing production turnover time
    5. diversifying into unrelated markets

17. Which of the following marketing strategies requires either identifying additional opportunities to use the brand in the same basic way or identifying completely new and different ways to use the brand?
    1. increasing the amount of consumption
    2. decreasing the level of consumption
    3. increasing dedication to consumption
    4. increasing product innovation
    5. increasing frequency of consumption

18. When food product companies advertise recipes that use their branded products in entirely different ways, they are increasing the    consumption of the brand.
    1. amount of
    2. level of
    3. dedication to
    4. frequency of
    5. awareness of

19. Oliver, a company that produces different types of olive oil, launched a promotional campaign focusing on the alternative uses of olive oil. What strategy is the company implementing to expand its total market demand?
    1. using the new-market segment strategy to attract new customers
    2. improving the current level of product performance
    3. advertising new and different applications of the brand
    4. protecting its market share
    5. using the market-penetration strategy to attract new customers

20. Clorox runs ads stressing the many benefits of its bleach, such as how it eliminates kitchen odors, in order to generate additional opportunities to use the brand in the same basic way. This is an attempt to               of consumption.
    1. increase the amount
    2. increase the level
    3. increase the perception
    4. increase the frequency
    5. increase the emotional implications

21. Which of the following is the most constructive response a market leader can make when defending its market share?
    1. maintain basic cost control
    2. innovate continuously
    3. provide desired benefits
    4. meet challengers with a swift response
    5. provide expected benefits

22. To satisfy customers, a(n)                    marketer finds a stated need and fills it.
    1. creative
    2. responsive
    3. anticipative
    4. laidback
    5. inexperienced

23. A(n)                      marketer looks ahead to needs customers may have in the near future.
    1. laidback
    2. creative
    3. inexperienced
    4. responsive
    5. anticipative

24. A(n)                      marketer discovers solutions customers did not ask for but to which they enthusiastically respond.
    1. laidback
    2. responsive
    3. inexperienced
    4. creative
    5. anticipative

25.                      marketers are not just market-driven, they are proactive market-driving firms.
    1. Creative
    2. Responsive
    3. Inexperienced
    4. Laidback
    5. Anticipative

26. Sony is an unusual market leader. It gives its customers new products that they have never asked for (e.g., Walkmans, VCRs, video cameras, CDs). This makes Sony a(n) firm.
    1. market-driven
    2. market-driving
    3. operations-driven
    4. vision-driven
    5. virtually-driven

27. Which of the following is true about proactive marketing?
    1. A company needs creative anticipation to see the writing on the wall.
    2. Proactive companies create new offers to serve unmet and unknown consumer needs.
    3. Proactive companies refrain from practicing uncertainty management.
    4. A company needs responsive anticipation to devise innovative solutions.
    5. Companies are winners when they are extremely risk-averse.

28.                      defense involves occupying the most desirable market space in the minds of the consumers and making the brand almost impregnable.
    1. Position
    2. Flank
    3. Preemptive
    4. Mobile
    5. Contraction

29. A marketing manager has planned a strategy that will require the organization to erect outposts to protect its weak front-running brands. In this        defense, the outposts will be central to the organization's new competitive strategy.
    1. position
    2. flank
    3. preemptive
    4. counteroffensive
    5. mobile

30.                      defense is an aggressive maneuver where the firm attacks first, perhaps with guerrilla action across the market and keeps everyone off balance.
    1. Position
    2. Flank
    3. Contraction
    4. Preemptive
    5. Lateral

31. The defensive marketing strategy wherein a stream of new products are introduced by a firm and are announced in advance are referred to as            defense.
    1. mobile
    2. counteroffensive
    3. preemptive
    4. contraction
    5. flank

32. If Microsoft announces plans for a new-product development, smaller firms may choose to concentrate their development efforts in other directions to avoid head-to-head competition. In this example, Microsoft is employing a

                     defense strategy.

1. 1. preemptive
   2. counteroffensive
   3. mobile
   4. flank
   5. contraction

33. In a                      defense strategy, the market leader can meet the attacker frontally and hit its flank or launch a pincer movement so that the attacker is forced to pull back to defend itself.
    1. position
    2. counteroffensive
    3. preemptive
    4. contraction
    5. flank

34. After Olay entered and took over the Indian market with its anti-aging lotion, Ponds invested heavily in a similar product which used only natural ingredients. This is an example of a      defense.
    1. position
    2. flank
    3. counteroffensive
    4. contraction
    5. mobile

35. In a                      defense, the market leader stretches its domain over new territories that can serve as future centers for defense and offense.
    1. counteroffensive e
    2. flank
    3. contraction
    4. mobile
    5. position

36. Market broadening and market diversification are likely tactics employed in                  defense strategies.
    1. position
    2. flank
    3. preemptive
    4. counteroffensive
    5. mobile

37. When "petroleum" companies such as BP sought to recast themselves as "energy" companies, increasing their research into the oil, coal, nuclear, hydroelectric, and chemical industries, these companies were employing a        defense strategy.
    1. preemptive
    2. counteroffensive
    3. mobile
    4. flank
    5. contraction

38. When large companies can no longer defend their full territory, they can launch a                defense where they give up weaker markets and reassign resources to stronger ones.
    1. contraction
    2. preemptive
    3. flank
    4. mobile
    5. position

39. In 2006, Sara Lee spun off products that accounted for a large percentage of the company's revenues, including its strong Hanes hosiery brand, so it could concentrate on its well-known food brands. In this example, Sara Lee is employing a           defense strategy.
    1. preemptive
    2. counteroffensive
    3. mobile
    4. flank
    5. contraction

40. Market                     generally have a smaller market share than other players and they are willing to maintain their share and not rock the boat.
    1. challengers
    2. leaders
    3. nichers
    4. rivals
    5. followers

41. When Starbucks extended its brand into coffee drinks and ice creams to reach customers who did not use its brand, it was using a(n)    strategy.
    1. geographical-expansion
    2. new-market segment
    3. market-penetration
    4. larger package size
    5. increased frequency

42. When Procter & Gamble used Gain and Cheer laundry detergents as outposts to protect a weak front or support a possible counterattack, they were using a      defense.
    1. flank
    2. position
    3. preemptive
    4. counteroffensive
    5. mobile

43. When the total market expands, the dominant firm usually gains the most.

44. The market leader should look for new customers or more usage from existing customers.

45. A market-penetration strategy is one where a company searches for new customers in a group that has never used a product before.

46. One way to increase the frequency of consumption of a product by consumers is by introducing it in larger package sizes.

47. The most constructive response to protecting market share is continuous innovation.

48. A responsive marketer looks ahead to needs customers may have in the near future.

49. An anticipative marketer finds a stated need and fills it.

50. A creative marketer discovers solutions customers did not ask for but to which they enthusiastically respond.

51. Position defense means occupying the most desirable market space in consumers' minds, making the brand almost impregnable.

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

53. In contraction defense, the leader stretches its domain over new territories through market broadening and market diversification.

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

55. A firm that is willing to maintain its market share, and not attack the leader and other competitors in an aggressive bid for further market share, is known as a market   .
    1. challenger
    2. leader
    3. follower
    4. nicher
    5. entrant

56. For a market challenger, attacking                    is a high risk but potentially high payoff strategy, which also allows it to distance itself from other challengers.
    1. a firm of its own size
    2. the market leader
    3. a regional firm
    4. an underfinanced firm
    5. a poorly performing firm

57. In a pure                     attack, the attacker matches its opponent's product, advertising, price, and distribution.
    1. guerilla
    2. bypass
    3. encirclement
    4. frontal
    5. flank

58. Epic Inc., a firm that produces chairs for offices, uses comparative advertising to inform consumers that its products offer the same features and quality as the competitor's. This is an example of a(n)      attack.
    1. guerilla
    2. frontal
    3. encirclement
    4. bypass
    5. flank

59. The                      attack can be used when the challenger spots areas where the opponent is underperforming.
    1. encirclement
    2. frontal
    3. flank-geographic
    4. backwards-flank
    5. guerilla

60. Pepsodent launched a new product that could whiten teeth, fight decay, and maintain fresh breath. Observing that Pepsodent did not focus on the dental sensitivity aspect, Colgate introduced a toothpaste which did all of the above and also protected sensitive teeth. This is an example of a(n)               attack.
    1. frontal
    2. flank
    3. guerrilla
    4. encirclement
    5. bypass

61. A(n)                      strategy is another name for identifying shifts in market segments that are causing gaps to develop, then rushing in to fill the gaps and developing them into strong segments.
    1. frontal attack
    2. flanking
    3. encircling
    4. counteroffensive
    5. bypass

62. The                      attack attempts to capture a significant share of the consumer market by launching a grand offensive on several fronts.
    1. frontal
    2. bypass
    3. flank
    4. encirclement
    5. guerrilla

63. Sally Seabrook is an up-and-coming marketing manager for a large department store chain. Ms. Seabrook has distinguished herself with bold strategies such as launching attacks on her primary competitor from several fronts, including advertising, new store openings, and new distributor alliances. Which of the following market challenger attack strategies is Ms. Seabrook using to attack her competition?
    1. frontal attack
    2. bypass attack
    3. guerrilla attack
    4. flank attack
    5. encirclement attack

64. The                      attack offers the firm an opportunity to diversify into unrelated products, into new geographical markets, and leapfrogging into new technologies.
    1. bypass
    2. flank
    3. frontal
    4. guerrilla
    5. encirclement

65. Appy Juices, a company that manufactures bottled water, diversified into soft drinks before any of its opponents could launch a diversified product. This would be an example of a(n)              attack.
    1. flank
    2. bypass
    3. guerrilla
    4. encirclement
    5. frontal

66. A marketing manager has decided to "leapfrog" the competition by moving into cutting-edge technologies. This indirect approach to attacking competition can be characterized as a(n)          attack.
    1. flank
    2. encirclement
    3. bypass
    4. guerrilla
    5. frontal

67. Selective price cuts, intense promotional blitzes, and occasional legal action are commonplace in the strategic design of a(n)        attack.
    1. frontal
    2. flank
    3. bypass
    4. encirclement
    5. guerilla

68. When Canon grabbed a large chunk of Xerox's market by introducing desk copiers, it distanced itself from other challengers by          .
    1. attacking a regional firm
    2. attacking a firm of its own size that was underfinanced
    3. attacking the market leader
    4. attacking a firm of its own size that was not doing the job well
    5. acquiring guppies

69. Market challengers are companies that attack the leader and other competitors in an aggressive bid for further market share.

70. Attacking the market leader proves successful and beneficial only when the leader is not serving the market well.

71. A frontal attacking strategy is another name for identifying shifts that are causing gaps to develop, then rushing to fill the gaps.

72. Encirclement attempts to capture a wide slice of territory by launching a grand offensive on several fronts.

73. Guerrilla attacks consist of small, intermittent attacks, conventional and unconventional, including selective price cuts, intense promotional blitzes, and occasional legal action.

74. Pepsi used flank attacks when it launched Aquafina nationally (before Coca-Cola's launch of Dasani); purchased orange juice giant Tropicana in 1998; and purchased the owner of Gatorade sports drink in 2000.

75. In his article, "Innovative Imitation," Theodore Levitt argues that                  .
    1. imitation is wrong and should be punished
    2. product imitation might be as profitable as product innovation
    3. innovation is not possible without substantial imitation
    4. innovation cannot begin unless dissatisfaction with imitation occurs
    5. imitation should be against the law because of the intellectual property decision involved

76. As a market follower strategy, the                   duplicates the leader's product and packages and sells it on the black market or through disreputable dealers.
    1. innovator
    2. cloner
    3. imitator
    4. adapter
    5. counterfeiter

77. Aron, a company manufacturing snack food and soft drinks, replicates its product taste and packaging from Lay's, a market leader in snack food industry. Later, it sells these imitated products on the black market. This is an example of

                   .

1. 1. cloning
   2. imitating
   3. counterfeiting
   4. adapting
   5. innovating

78. As a market follower strategy, the                   emulates the leader's products, name, and packaging, with slight variations.
    1. counterfeiter
    2. cloner
    3. imitator
    4. adapter
    5. innovator