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MKT 6301-Chapter 6

QuestionAnswer
1) A market structure analysis is used to better understand the: Answer: competition.
2) Analyzing the strengths and weaknesses of the competitors and their current and likely future strategies is called: Answer: competitor analysis.
3) A ________ approach classifies competitors based on objective attributes of the firms. Answer: supply-based
4) A ________ approach classifies competitors based on customer attitudes and behaviors. Answer: demand-based
5) Which of the following refers to a group of products that are functional substitutes of each other? Answer: a product type
6) Which of the following best describes different specific combinations of features within each product type? Answer: product variants and brands
7) Which of the following represents a group of products that are close substitutes, are available to a common group of buyers, and are distant substitutes for all products not included in the industry? Answer: An industry
8) A product category is also known as a: Answer: product class.
9) With reference to a product-industry hierarchy, a product type encompasses: Answer: product variants.
10) Which of he following refers to one particular product segment of a particular industry? Answer: a product class.
11) The narrowest definition of competition that results in the fewest competitors that includes only products or services of the same product types is called: Answer: product form competition.
12) Which of the following is a good example of an industry? Answer: housewares
13) Which of the following statements is true regarding a product form competition? Answer: It provides the closest set of competitors.
14) Which of the following examples best represents product form competition in drip coffee machine category? Answer: other brands of coffee drip machines
15) Which of the following examples best represents product class competition in drip coffee machine category? Answer: percolators and espresso machines
16) Which of the following types of competition is based on products that have similar features and provide the same basic function? Answer: product class or product category
17) Which of the following types of competition can be defined as products or services that the customer views as fulfilling the same need? Answer: generic competition
18) Which of the following is the best example of generic competition in the coffee drip machine category? Answer: juicers and water purifiers
19) A competition is inward oriented in which of the following types of competition? Answer: product form competition and product category competition
20) An example of a customer-based assessment of competition is: Answer: substitution in use.
21) Which of the following refers to a level of competition that includes any product, related or unrelated, that could be viewed as substitutable in a budget? Answer: budget competition
22) At which of the following levels of competition must the marketer convince customers that the product form is the best in the product category? Answer: product category competition
23) Which of the following examples best represents product class competition in drip coffee machine category? Answer: products such as pots and pans
24) Because the key to success in business is obtaining and keeping customers, the most crucial form of competition is generally ________ competition, in which competition occurs for the same customers. Answer: product form
25) ________ competition can destroy entire product categories when a major innovation occurs, so it requires attention, especially for long-run planning. Answer: Generic
26) At the ________ level, marketers must convince customers that their product category solution to the customer's problem is superior to the solution provided by other product categories. Answer: generic competition
27) Economists often use ________ as an indicator of substitutability. Answer: cross-elasticity of demand
28) ________ is the percentage change in one product's sales due to a percentage change in a marketing variable (such as price) for another product. Answer: Cross-elasticity
29) If a cross-elasticity with respect to price is positive then: Answer: a product's sales decline when another product's price drops.
30) Which of the following best describes the type of information a marketing manager would need to know when determining the competitor's major objectives? Answer: whether they are pursuing growth or profit-related objectives
31) Which of the following levels of competition can be determined from observation and external data sources? Answer: product form and product category
32) If a marketing manager observes that a competitor has increased his price and decreased his marketing budget, it would be an example of which of the following? Answer: a retreat, although only temporary
33) Which of the following is the most difficult kind of competition to assess because it cannot be observed readily and competitors may be numerous? Answer: budget and generic
34) In the case of NAIC codes, three digit codes define: Answer: an industry.
35) Companies such as Kellogg, IBM, Microsoft, and Intel hire individuals from which one of the backgrounds below to help them better understand their competitors and predict their likely future strategies? Answer: CIA
36) The bottom line of a competitor analysis is: Answer: forecasting likely future strategies of the competitors.
37) The value proposition offered by the competitors and the marketing mix used by them will most likely fall under which of the following parts of the competitor analysis? Answer: assessment of the competitors' current marketing strategies
38) If a brand pursues a profit objective at the expense of share loss, the objective is usually called a ________ if the ultimate intention is to drop the product. Answer: harvest objective
39) Because privately-owned firms do not have to account to stock analysts: Answer: long-term profits may be more important than showing consistent positive quarterly returns.
40) A company where privatization resulted from a leveraged buyout is more interested in which of the following situations? Answer: generating profits and cash flow to pay down debt
41) For industrial products and services, which of the following sources of information is considered to be useful? Answer: your own sales force
42) Which of the following is most likely to be an objective of only a government-controlled firm? Answer: maintaining employment
43) For consumer products, which of the following is best in tracking a competitor's segmentation and target market strategy.? Answer: media advertising
44) With the help of which of the following, a marketing manager can assess competitors' core strategies ? Answer: studying the competitors' marketing communications
45) Sales promotion activities will be tracked by which area of an organizations marketing mix? Answer: communications
46) Which of the following companies is most likely to be a threat to increasing sales or share in the short term? Answer: a firm with slack capacity
47) Which of the following best describes a competitor with an ability to develop new products? Answer: a serious long-term threat in a market
48) When a marketing manager conducts a competitive assessment of his own business, which of the following contains a summary of the different components of this analysis? Answer: a SWOT analysis
49) A SWOT analysis focuses on which of the following? Answer: on your business only
50) A typical marketing planning horizon is: Answer: one year.
51) With reference to a SWOT analysis, the letter 'T' in the word SWOT stands for: Answer: threats.
52) Which of the following primary sources is excellent in determining competitor sales pitches, pricing, and other aspects of their activity? Answer: sales force and customers
53) Which of the following best describes a sophisticated, long-term version of the simulation process? Answer: scenario planning
54) Which of the following statements is true regarding scenario planning? Answer: It is useful when many nonquantifiable factors affect outcomes in the market.
55) ________ was invented by John von Neumann and Oskar Morgenstern to account for the interdependence of economic factors and it is a mathematical approach that is used to anticipate a competitor's likely future strategies. Answer: Game theory
56) While searching information about the market, it is convenient to begin the search with this source of information. Identify it. Answer: internal sources
57) A casual examination of which of the following secondary sources of information shows that companies disclose a good deal of information about their new products, areas of emphasis, job qualifications and standards, new plant or facility locations, and other information? Answer: help-wanted ads
58) Which of the following is the biggest of all subscription-based information services? Answer: DIALOG
59) Which of the following is a good source of secondary information? Answer: annual reports
60) Which of the following is a good example of primary source of information? Answer: sales force and customers
61) ________ game theory seeks to predict the behavior of rational, intelligent firms competing independently. Answer: Noncooperative
62) In game theory, ________ is a graphic depiction of the rewards or costs to each player for each possible combination of strategies. Answer: payoff matrix
63) The most common form of equilibrium used for solutions to game theory models is called: Answer: nash equilibrium.
64) ________ is a list of strategies, one for each player, with the property that no manager wants to unilaterally change his or her strategy. Answer: Nash equilibrium
65) A kind of game in which competition leads to a less-than-optimum outcome for both managers, is called: Answer: prisoner's dilemma game.
66) Coke and bottled water brands continue to run sales promotions and compete strongly on price. Clearly, the best solution would be for neither to promote which would jointly maximize their profits. However, both are worried that if they stop promoting while the other does not, they will suffer. As a result, the equilibrium is heavy promotion by both and lower total profits. With reference to the game theory, this is an example of: Answer: prisoner's dilemma game.
67) The industries in which one company has historically chosen to be the first in changing price or making some other marketing-mix or strategic decision, ________ concept of game theory is used. Answer: leader-follower
68) The central importance of game theory is best described by which of the following? Answer: Game theory imposes disciplined thinking on managers.
69) Industries with ________ significant competitors offer the best potential for using game theory. Answer: four or fewer
70) Which of the following types of industries tend to be good application areas for game theory and strategic thinking? Answer: industries subject to strong competition
71) An analysis in which the marketing manager seeks to better understand strengths and weaknesses of his own organization is known as market structure analysis.. Answer: FALSE
72) An analysis in which the strengths and weaknesses of competitors and their current and likely future strategies are examined is known as competitor analysis. Answer: TRUE
73) A supply-based approach classifies competitors based on customer attitudes and behaviors. Answer: FALSE
74) A product class is also called a product type. Answer: FALSE
75) Product form competition is the widest definition of competition. Answer: FALSE
76) A product form competition may set an industry standard for looking at competition and market shares in a way that does not represent the true underlying competitive dynamics. Answer: TRUE
77) A product form competition, is more inclusive than a product category competition. Answer: FALSE
78) Product form or product category competition is inward oriented. Answer: TRUE
78) Product form or product category competition is inward oriented. Answer: FALSE
80) A level of competition that includes all products or services that the customer views as fulfilling the need requiring satisfaction on a particular purchase or use occasion is known as budget competition. Answer: FALSE
81) Product form competition involves battling for exactly the same customers in terms of who they are and why they buy. Answer: TRUE
82) Economists often use cross-elasticity of demand as an indicator of substitutability. Answer: TRUE
83) Cross-elasticity is the percentage change in one product's sales due to a percentage change in a marketing variable for another product, such as price. Answer: TRUE
84) Competitor analysis has an unsavory reputation due to many interpreting it as corporate spying. Answer: TRUE
85) For industrial products and services, the marketing manager can determine the customer and competitor targets by consulting product sales literature, his own sales force, and trade advertising. Answer: TRUE
86) You can assess competitors' core strategies by studying their marketing communications. Answer: TRUE
87) The bottom line of the competitor analysis is a forecast of their likely marketing strategies over the next year. Answer: TRUE
87) The bottom line of the competitor analysis is a forecast of their likely marketing strategies over the next year. Answer: FALSE
89) Annual reports are a good primary source of information. Answer: FALSE
90) A good primary source of market information is your sales force and customers. Answer: TRUE
91) One way to anticipate a competitor's likely future strategies is to use a mathematical approach called game theory. Answer: TRUE
92) In Nash equilibrium, no manager wants to unilaterally change his or her strategy. Answer: TRUE
93) A prisoner's dilemma game is the kind of game in which competition leads to a less-than-optimum outcome for both managers. Answer: TRUE
94) Industries with a large number of competitors offer the best potential for using game theory because, with a large number of competitors, it is easier to envision the possible strategies and payoff matrix. Answer: FALSE
95) List and briefly describe the four different levels of competition. Answer:
95) List and briefly describe the four different levels of competition. Answer:
97) List and briefly describe the information required to assess the strengths and weaknesses of a competitor. Answer:
97) List and briefly describe the information required to assess the strengths and weaknesses of a competitor. Answer:
99) Explain Nash equilibrium. Answer: In game theory, the most common form of equilibrium is called Nash equilibrium. It involves a list of strategies, one for each player, with the property that no manager wants to change its strategy unilaterally. In other words, for each manager, its strategy in the equilibrium is the best response to the others' strategies in the equilibrium.
Created by: lonehorse
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