Eastern Michigan University

MKT 510A

Chapter 8-Creating Positioning and Dealing with Competition

true/false Questions

1)Positioning is the act of designing the company’s offering and image to occupy a distinctive place in the mind of the target market.  

2. Points of parity (POP) are attributes or benefits consumers strongly associate with a brand, and which they believe that they could not find to the same extent with a competing brand.  

3. In choosing points of difference (PODs) for the firm’s positioning, it is important that consumers find those PODs desirable.  

4. One of the key deliverability criteria for points of difference (PODs) is feasibility— meaning that the firm must be able to actually create the POD.  

5. Form product differentiation refers to the characteristics that supplement the product’s basic function.  

6. Differentiating your offering in the channel could refer to coverage, expertise, or performance issues.  

7. One way of differentiating a service is through customer training.  

8. Strong style can create product distinctiveness that is difficult to copy, however strong style does NOT always mean strong performance.  

9. Michael Porter’s “Threat of Entry” force (from the five forces) suggests that the most attractive segment has high entry and exit barriers.  

10. According to Porter’s Five Forces model, a segment is unattractive if buyers possess or will possess strong bargaining power.  

11. In monopolistic competition, only one firm provides a certain offering in a specific area.  

12. Integrating your business backward or forward in the value chain is also called vertical integration.  

13. A group of firms following the same strategy in a given target market is called a strategic group.  

14. Share of heart is defined as the percentage of customers who name the company when asked, “Name the first company that comes to your mind in the industry.”  

15. The acknowledged market leader in an industry has the largest share of the relevant product market and usually leads the others in price changes, new product introductions, distribution coverage, and promotional intensity.  

16. Part of a market leader’s strategy to defend market share is to consider which segments to defend (even at a loss) and what segments to surrender.

17. Fighting for market share makes sense because, for example, in the soft drink market, a one-share-point gain is worth over $100 million in revenue.  

18. The meaning of a frontal attack against a market challenger is to identify shifts in market segments that cause gaps and then fill those gaps.  

19. Levitt argued that product imitation might be as profitable as product innovation.  

20. Logitech makes computer mouse products of every possible description. This extreme specialization is an example of a niche strategy.  

Multiple Choice Questions

21. A good brand positioning helps the firm and consumer by doing all of the following EXCEPT:

1. helps competitors understand where NOT to compete.
2. helps clarify the brand’s essence.
3. helps consumers understand what the brand will help them achieve.
4. helps consumers maximize the benefits of the brand.
5. helps guide marketing strategy.

22. A         is a cogent (logical or sound) reason why the target market should buy the product.

1. market niche service agreement
2. customer-focused value proposition
3. price/benefit analysis
4. marketing campaign
5. differentiation plan

23.   includes the products or sets of products with which a brand competes and which function as close substitutes.

1. The evoked set
2. Brand choice
3. Category membership
4. The inept set
5. The competition set

24. What acronym is associated with the following definition—“attributes or benefits consumers strongly associate with a brand, positively evaluate, and believe that they could NOT find to the same extent with a competitor brand”?

1. WOM
2. WOW
3. POD
4. POP
5. POS

25. What type of points-of-parity is related to association’s consumer view as necessary to be a legitimate offering within a certain category?

1. Head-to-head.
2. Competitive.
3. Word-of-mouth.
4. Membership.
5. Category.

26. Which of the following is NOT a major way of conveying a brand’s category membership?

1. Relying on word of mouth among zealous consumers.
2. Announcing category benefits.
3. Using the brand name of the product to explain the offering’s benefits.
4. Comparing to exemplars.
5. Relying on a product descriptor.

27. The preferred positioning approach is to inform consumers of a brand’s        before stating its                    .

1. POPs; PODs
2. membership; point-of-difference
3. category benefits; comparisons to exemplars
4. membership; value proposition
5. point-of-difference; positioning

28. XM Satellite Radio, the brand name, is a perfect example of using which strategy to convey the brand’s category membership?

1. Relying on word of mouth among zealous consumers.
2. Comparing to exemplars.
3. Relying on the product descriptor.
4. Announcing category benefits.
5. Explaining the value proposition.

29. One criterion for points-of-difference (POD) is the feasibility criterion, which means

                           .

1. the positioning must be preemptive, defensible, and difficult to attack
2. the POD must be personally relevant and important to target consumers

3. target customers must find the POD believable
4. the firm must be able to actually create the POD
5. the brand must substantiate that it can deliver the desired benefit

30. Which of the following brand position sets would NOT be difficult to pull off in the same campaign?

1. Classy; tasteful.
2. Good tasting; low calorie.
3. Inexpensive; high quality.
4. Sophisticated; discount retailer.
5. Positive; negative.

31.                             refer(s) to the product’s size, shape, or physical structure.

1. Form
2. Features
3. Performance quality
4. Conformance quality
5. Durability

32.   is(are) the level(s) at which the product’s primary characteristics operate.

1. Form
2. Features
3. Performance quality
4. Conformance quality
5. Durability

33.   is(are) the degree to which all of the produced units are identical and meet promised specifications.

1. Form
2. Features
3. Performance quality
4. Conformance quality
5. Durability

34. Which of the following is NOT a way of differentiating the product offering?

1. Form.
2. Features.

3. Conformance.
4. Style.
5. Expertise.

35. Which of the following is a way of differentiating a marketing offering via personnel?

1. Responsiveness.
2. Ordering ease.
3. Coverage.
4. Events.
5. Conformance.

36. Which of the following is a way of differentiating a marketing offering via the surrounding services?

1. Reliability.
2. Installation.
3. Design.
4. Quality.
5. Expertise.

37. A product’s               refers to the work done to make a product operational in its planned location.

1. ordering ease
2. design
3. maintenance and repair
4. installation
5. reliability

38.                             describes the product’s look and feel to the buyer.

1. Positioning
2. Design
3. Distinctiveness
4. Uniqueness
5. Style

39. Which of the following is NOT a main service differentiator?

1. Ethical personnel.
2. Ordering ease.
3. Delivery.

4. Installation.
5. Customer consulting.

40. When a(n) cannot be differentiated easily, the key to competitive success may lie in adding valued                               and improving their quality.

1. idea; creativity
2. product; services
3. service; products
4. value proposition; creative responses
5. idea; styling

41. Which is NOT a way of differentiating an offering via the channel of distribution?

1. Wider coverage.
2. Expertise.
3. Communication.
4. More exclusive coverage.
5. Performance.

42. Which does NOT add to a segment’s unattractiveness, according to Porter’s five forces model?

1. Numerous competitors.
2. Growing plant capacity.
3. High exit barriers.
4. The segment is growing.
5. High fixed costs.

43. Which of the following is a likely outcome during tough economic time if there are low barriers to entry and high exit barriers?

1. Stable returns.
2. More firms coming online.
3. High profits.
4. Firms easily dropping out of that business.
5. Chronic overcapacity.

44. Which is NOT one of Porter’s five forces that determine market attractiveness?

1. Internal resources.
2. Potential entrants.
3. Buyer power.
4. Supplier power.
5. Threat of substitutes.

45. Which is NOT a reason that suppliers’ bargaining power might grow?

1. When there are few substitutes.
2. When the supplied product is an important input.
3. When downstream integration possibilities exist.
4. When sellers are price sensitive.
5. When they are well organized.

46. In which type of industry competition do many competitors offer the same product or service?

1. Pure monopoly.
2. Oligopoly.
3. Monopolistic competition.
4. Differentiated oligopoly.
5. None of the above.

47. The U.S. auto industry is an example of which form of competition?

1. Differentiated oligopoly.
2. Pure monopoly.
3. Pure competition.
4. Monopolistic competition.
5. Pure oligopoly.

48. Which is NOT an entry barrier?

1. Economies of scale.
2. Scarce locations.
3. High capital requirements.
4. Abundance of distributors.
5. Reputation requirements.

49. An oil producer that refines the product and owns gasoline filling stations has integrated .

1. backward
2. horizontally
3. diagonally
4. crosswise
5. forward

50. Due to exit barriers or for other reasons, many firms will stay in an industry as long as they cover their         and some or all of their                               . This results in lowered profits for everyone in that industry.

1. variable costs; fixed costs
2. losses; gains
3. losses; variable costs
4. capital costs; materials costs
5. fixed costs; losses

51. Which measure is the percentage of consumers saying a particular brand when asked, “Name the company from which you would prefer to buy (such-and-such) product”?

1. share of mind.
2. share of pocketbook.
3. share of heart.
4. share of market.
5. share of wrap-up.

52. Which of the following represents the idea of share of mind?

1. The percentage of the target market the brand has.
2. The percentage that says the brand is the one they think of first.
3. The percentage that refuses to answer the survey.
4. The percentage that says the brand is their preference.
5. The percentage that says the competition’s brand first.

53. Which is a characteristic of a good competitor?
    1. They try to buy share.
    2. They take large risks.
    3. They invest in overcapacity.
    4. They upset the industry’s equilibrium.
    5. They limit themselves to a segment of the industry.

54. Which is a characteristic of a “bad” competitor?

1. They take large risks.
2. They set prices in relation to costs.
3. They limit themselves to a segment of the industry.
4. They accept the general level of share and profits.
5. They invest in capacity-lowering measures.

55. Which of the following is NOT a characteristic of the market leader in an industry?

1. They lead in the share of relevant product market.
2. They lead in distribution coverage.
3. They lead others in price changes.
4. They lead in promotional intensity.
5. All of these are characteristics of the market leader.

56. A         defense involves building superior brand power, making the brand almost impregnable.

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

57. The aim of   strategy is to reduce the probability of attack, divert attacks to less threatening areas, and lessen their intensity.

1. looking-back
2. innovation
3. counteroffensive
4. defensive
5. development

58. The                              type of defense in which the leader stretches its domain over new

territories that can serve as future centers for defense and offense, using market broadening and market diversification.

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

59.   is another name for identifying shifts in market segments that cause gaps to develop, then filling the gaps and developing them into strong segments.

1. A frontal attack
2. An encirclement attack
3. A bypass attack
4. A flanking strategy
5. Guerilla warfare

Essay Questions

60. What are PODs and POPs? Give examples of each.

61. What are the three main ways of conveying to consumers that a brand is rightfully in a certain category? Provide examples of each.

62. Computer mouse maker Logitech has established itself among its customers via many points-of-difference. The book mentions six key criteria for points-of-difference, split into the categories of consumer desirability and deliverability. Describe how Logitech has or could use the criteria to stand out in the marketplace.

63. Lowe’s Home Improvement has tried to distinguish itself from the largest player in the category, The Home Depot, by choosing and training floor personnel in such as way as to be “better” than the competition. The book lists six important ways that a company might differentiate its offering through personnel. What are they?

64. Nearly every consumer electronics maker recognizes Apple Computer’s iPod as the gold standard for personal music devices. Apple has by far the largest market share and its players are elegantly designed. The company prices competitively and yet still makes huge profits on this line of products. If a company considers Apple as its “opponent” and the objective is to take away market share, what are five general market-challenger attack options?

Mini-Cases Mini-Case 8-1

A growing university in Guangdong, China is seeking additional institutional recognition and awareness among potential target students and financial donors. Few outside the immediate area have heard of it. Over the last several years they have raised their profile by inviting famous guests to give public lectures.

65. Refer to Mini-Case 8-1. The president and the marketing director for the university want to greatly increase the number of people who respond with the university’s name when asked the following question: “Name the university in Guangdong at which you would prefer to study international relations.” What type of share are the president and the marketing director seeking to increase?

1. Share of mind.
2. Share of pocketbook.
3. Share of heart.
4. Share of market.
5. Share of wrap-up.

66. Refer to Mini-Case 8-1. Along with international visitors on campus, the admissions group has been actively seeking international students and “bulking up” its offerings in the international arena. Other parts of the university have been growing at a steadier pace, unaided by special programs or dollar incentives. How is the university exhibiting the characteristics of a good competitor, based on the scenario presented?

1. They are trying to buy share.
2. They are taking large risks.
3. They are making investments in overcapacity.
4. They are upsetting the local education “industry’s” equilibrium.
5. They are limiting themselves to a segment of the industry.

Mini-Case 8-2

Samsung has made a very slim, very aesthetically pleasing phone that it sells through Sprint and other mobile communications providers. The phone has enough flash memory to store and play 500 songs in its MP3 player. It has built-in software that allows users to load their own music or other sound segments as ringtones. It has a “finder” feature for when it is misplaced. As far as the marketing people at Samsung can tell, the phone meets and exceeds every potential user’s expectation for what a phone should be.

67. Refer to Mini-Case 8-2. Samsung’s U.S. advertising agency is refining their

                            for the phone, which is a cogent (logical or sound) reason they will put in the advertising campaign for why the target market should buy the product.

1. market niche service agreement
2. customer-focused value proposition
3. price/benefit analysis
4. marketing campaign
5. differentiation plan

68. Refer to Mini-Case 8-2. Samsung’s new phone is more than a phone with its additional features. The advertising agency wants to position the product in the minds of the consumer as belonging to the most elite and up-to-date phones on the market, and at the same time, show consumers how great the additional features are over the competitive phones. This is the right approach, because the preferred positioning process is to inform consumers of a brand’s     before stating its                                                         .

1. POPs; PODs
2. membership; point-of-difference
3. category benefits; comparisons to exemplars
4. membership; value proposition
5. point-of-difference; positioning

69. Refer to Mini-Case 8-2. The Samsung phone will come encased in scratchproof shiny plastic, similar to how Apple’s iPod exteriors are. This interesting choice will attract more attention in a marketplace where most phones are in metallic or dull plastic finishes. This innovative product exterior is part of the product’s             .

1. form
2. features
3. performance quality
4. conformance quality
5. durability