You are on page 1of 7

Chapter 09

Strategies for Growth Markets



Multiple Choice Questions

1. The primary objective of the early share leader, usually the market pioneer, in a growth
market is _____.
A. share reduction
B. share growth
. share maintenance
!. mass"market penetration
Answer# c
$evel of !ifficulty# %asy
&age# ''1
'. (ony was the pioneer and early share leader in the videocassette recorder industry with its
Betama) technology. But *atsushita+s longer"playing and lower"priced ,-( format
e.uipment proved much more popular with consumers, and dethroned (ony as industry
leader. This e)ample underlines that#
A. firms cannot always rely on their competencies to maintain share leadership in a market.
B. the number of firms competing for a share of the market will decrease if there are few
barriers to entry.
. market fragmentation will occur if potential customers have homogeneous functional
needs.
!. pioneers in new product"markets always manage to leverage their competitive advantages
as the market grows.
Answer# a
$evel of !ifficulty# *edium
&age# ''/
0. 1dentify the share maintenance marketing objective for share leaders.
A. !elineate into niche target markets in product growth stage.
B. (timulate selective demand among innovators.
. 2etain e)isting customers and ensure brand loyalty.
!. (timulate secondary demand to help speed up overall market growth.
Answer# c
$evel of !ifficulty# *edium
&age# ''3
/. 1dentify a market leader+s action aimed at stimulating selective demand among later
adopters.
A. *aintaining4improving customer satisfaction and loyalty
B. %ncouraging4simplifying repeat purchase
. !ifferentiated positioning against competitive offerings
!. 2educing attractiveness of switching
Answer# c
5 '61/ by *c7raw"-ill %ducation. This is proprietary material solely for authori8ed instructor use. 9ot
authori8ed for sale or distribution in any manner. This document may not be copied, scanned, duplicated,
forwarded, distributed, or posted on a website, in whole or part.
$evel of !ifficulty# *edium
&age# '':

;. The marketing action of developing a second product line with features that are more
appealing to a specific segment of potential customers is characteristic of the _____ strategy.
A. market e)pansion
B. contraction
. flanker
!. confrontation
Answer# c
$evel of !ifficulty# %asy
&age# '':

3. <hich of the following is characteristic of a market e)pansion strategy=
A. *ake product modifications or improvements to match or beat superior competitive
offerings.
B. !evelop a second brand or product line with features or price more appealing to a specific
segment of potential customers.
. *eet or beat lower prices or heavier promotional efforts by competitors when necessary to
retain customers and when lower unit costs allow.
!. !evelop multiple"line e)tensions or brand offerings targeted to the needs of various
potential user applications or geographical segments within the market.
Answer# d
$evel of !ifficulty# *edium
&age# '':
:. <hich of the following statements is associated with the fortress strategy=
A. The market leader develops a strong position when potential customers have relatively
homogeneous needs.
B. The market leader develops a second brand to compete directly against the challenger+s
offering.
. The market leader changes the marketing program before a suspected competitive
challenge occurs.
!. The market leader defends its relative market share by e)panding into a number of market
segments.
Answer# a
$evel of !ifficulty# *edium
&age# ''>
>.<hich of the following objectives can be achieved with a confrontation strategy for share
maintenance=
A. Appeal to late adopters with same attributes and benefits offered to early adopters.
B. 1mprove ability to retain current customers as market fragments.
. 1ncrease ability to attract new customers in selected high"growth segments by focusing
resources on them.
!. 1mprove ability to win new customers who might otherwise be attracted to competitor+s
5 '61/ by *c7raw"-ill %ducation. This is proprietary material solely for authori8ed instructor use. 9ot
authori8ed for sale or distribution in any manner. This document may not be copied, scanned, duplicated,
forwarded, distributed, or posted on a website, in whole or part.
offering.
Answer# d
$evel of !ifficulty# -ard
&age# ''?
?. <hich of the following strategies is most effective in a market that is relatively
homogeneous in relation to customer needs and purchase criteria=
A. @ortress strategy
B. *arket e)pansion strategy
. ontraction strategy
!. @lanker strategy
Answer# a
$evel of !ifficulty# %asy
&age# ''?

16. <hat action must a leader take to improve customer satisfaction as competitor enters or
prepares to enter the market=
A. 1t should take steps to improve the physical product and customers+ perceptions of it as
well.
B. 1t should shift its sales promotion emphasis from building selective demand to stimulating
primary demand.
. 1t should continue sales promotion efforts aimed only at stimulating trial among later
adopters.
!. 1t should shift its sales"force efforts from servicing e)isting customers to prospecting for
new accounts.
Answer# a
$evel of !ifficulty# *edium
&age# '06
11. Tokomo *otors has introduced a new line of cars aimed at creating an appeal for young
car buyers looking for good .uality, funky designs, and low"prices. Their intent is to protect
their primary brands from direct competition in the same category and from low"price
competitors. 1dentify the strategy employed by Tokomo *otors.
A. onfrontation strategy
B. &osition defense strategy
. @lanker strategy
!. *arket e)pansion strategy
Answer# c
$evel of !ifficulty# -ard
&age# '01"'0'
1'. A firm develops line e)tensions, new brands, or alternative product forms utili8ing similar
technologies to appeal to multiple market segments. 1dentify the strategy employed here.
A. @lanker strategy
B. @ortress strategy
. onfrontation strategy
5 '61/ by *c7raw"-ill %ducation. This is proprietary material solely for authori8ed instructor use. 9ot
authori8ed for sale or distribution in any manner. This document may not be copied, scanned, duplicated,
forwarded, distributed, or posted on a website, in whole or part.
!. *arket e)pansion strategy
Answer# d
$evel of !ifficulty# *edium
&age# '00
10. (trategic withdrawal is most likely when#
A. a firm is unable to defend itself ade.uately in all segments due to competitors having more
resources.
B. a firm+s primary objective is to capture a large share of new customers who may prefer
something different from the initial offering.
. a competitor chooses to attack the leader head to head and attempts to steal customers in
the target market.
!. a firm tries to beat the attractive features of a competitor+s offering only after the
challenger+s success has become obvious.
Answer# a
$evel of !ifficulty# *edium
&age# '00
1/. <hat is the major marketing objective for followers, particularly larger firms entering a
product"market shortly after the pioneer=
A. !efend market position
B. !evelop only a niche strategy
. Attain share growth
!. (tart discrete price wars
Answer# c
$evel of !ifficulty# %asy
&age# '0/

1;. <hich of the following share"growth strategies involves attacking the leader within its
primary target market=
A. @lanker strategy
B. @rontal attack strategy
. %ncirclement strategy
!. 7uerrilla attack strategy
Answer# b
$evel of !ifficulty# *edium
&age# '03

13. <hich of the following is an appropriate share"growth strategy in a relatively
homogeneous market with respect to customersA needs and purchase criteria=
A. 7uerrilla attack
B. %ncirclement
. @lank attack
!. @rontal attack
Answer# d
$evel of !ifficulty# %asy
5 '61/ by *c7raw"-ill %ducation. This is proprietary material solely for authori8ed instructor use. 9ot
authori8ed for sale or distribution in any manner. This document may not be copied, scanned, duplicated,
forwarded, distributed, or posted on a website, in whole or part.
&age# '0:

1:. <hich of the following share"growth strategies is appropriate when the needs and
preferences of customers in most segments are currently satisfied by competing brands=
A. $eapfrog
B. @lank attack
. %ncirclement
!. 7uerrilla attack
Answer# d
$evel of !ifficulty# %asy
&age# '0:
1>. <hat strategy would a challenger be pursuing if its primary objective is to capture a
modest share of repeat purchases in several market segments=
A. @rontal attack strategy
B. $eapfrog strategy
. 7uerrilla attack strategy
!. %ncirclement strategy
Answer# c
$evel of !ifficulty# *edium
&age# '0:
1?. A _____ strategy is appropriate when the market can be broken into two or more large
segments, when the leader and4or other major competitors hold a strong position in the
primary segment, and when no e)isting brand fully satisfies the needs of customers in at least
one other segment.
A. frontal attack
B. leapfrog
. guerrilla attack
!. flank attack
Answer# d
$evel of !ifficulty# %asy
&age# '/6

'6. ABnC _____ strategy involves targeting several smaller untapped or underdeveloped
segments in the market simultaneously.
A. encirclement
B. guerrilla attack
. flank attack
!. leapfrog
Answer# a
$evel of !ifficulty# %asy
&age# '/1
'1. (ales promotion efforts Blike coupon drops and merchandising dealsC, local advertising
blit8es, and legal action are e)amples of the _____ strategy to achieve share growth.
5 '61/ by *c7raw"-ill %ducation. This is proprietary material solely for authori8ed instructor use. 9ot
authori8ed for sale or distribution in any manner. This document may not be copied, scanned, duplicated,
forwarded, distributed, or posted on a website, in whole or part.
A. guerilla attack
B. flank attack
. frontal attack
!. leapfrog
Answer# a
$evel of !ifficulty# %asy
&age# '/1
Essay Questions

''. %)plain how share gains are worth more in a growth market than in a mature market.
Answer# The premise that share gains are more valuable when the market is growing stems
from the e)pectation that the earnings produced by each share point continue to e)pand as the
market e)pands. The implicit assumption here is that the business can hold its relative share
as the market grows. The validity of such an assumption depends on a number of factors,
including the following# B1C the e)istence of positive network effectsD B'C future changes in
technology or other key success factorsD B0C future competitive structure of the industryD B/C
future fragmentation of the market.
$evel of !ifficulty# *edium
&age# ''0"''/
'0. %)plain the various ways a challenger can target competitors established in the market.
Answer# A challenger can target its competitors in several ways# B1C Attack the market"share
leader within its primary target market# Typically involves either a frontal assault or an
attempt to leapfrog the leader through the development of superior technology or product
designD B'C Attack another follower who has an established position within a major market
segment# Also usually involves a frontal assault, but it may be easier for the challenger to gain
a sustainable advantage if the target competitor is not as well establishedD B0C Attack one or
more smaller competitors who have only limited resources# This may seem like an inefficient
way to attain substantial share increasesD B/C Avoid direct attacks on any established
competitor# Esually involves either a flanking or an encirclement strategy, involving one large
or several smaller segments in which no competitor currently holds a strong position.
$evel of !ifficulty# *edium
&age# '03D '0>
'/. ompare and contrast the frontal attack and leapfrog strategy.
Answer# <here the market for a product category is relatively homogeneous, with few
untapped segments and at least one well"established competitor, a follower wanting to capture
an increased market share may have little choice but to tackle a major competitor head"on.
(uch an approach is most likely to succeed when most e)isting customers do not have strong
brand preferences or loyalties, the target competitorAs product does not benefit from positive
network effects, and the challengerAs resources and competenciesFparticularly in marketing
Fare greater than the target competitorAs. To successfully implement a frontal attack, a
challenger should seek one or more ways to achieve a sustainable advantage over the target
competitor.
A challenger stands the best chance of attracting repeat or replacement purchases from a
5 '61/ by *c7raw"-ill %ducation. This is proprietary material solely for authori8ed instructor use. 9ot
authori8ed for sale or distribution in any manner. This document may not be copied, scanned, duplicated,
forwarded, distributed, or posted on a website, in whole or part.
competitorAs current customers when it can offer a product that is attractively differentiated
from the competitorAs offerings. The odds of success might be even greater if the challenger
can offer a far superior product based on advanced technology or a more sophisticated design.
This is the essence of a leapfrog strategy. 1t is an attempt to gain a significant advantage over
the e)isting competition by introducing a new generation of products that significantly
outperform or offer more desirable customer benefits than do e)isting brands.
$evel of !ifficulty# %asy
&age# '0>"'0?
5 '61/ by *c7raw"-ill %ducation. This is proprietary material solely for authori8ed instructor use. 9ot
authori8ed for sale or distribution in any manner. This document may not be copied, scanned, duplicated,
forwarded, distributed, or posted on a website, in whole or part.

You might also like