Value Creation

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Exam: 080503RR – Value Creation
1. When marketers need to address changing market conditions or when strategies evolve or refocus, one option they should consider is
A. investing in a completely different product until the market stabilizes.
B. deleting products or entire product lines.
C. controlling the market conditions.
D. adding new sources to capitalize on the existing marketing mix.
2. The _______ diffusion-of-innovation group is crucial because few new products can be profitable until
this large group buys them.
A. early adopter
B. innovator
C. late majority
D. early majority
3. Private-label brands like Gap and Victoria’s Secret have increased in importance along with the increased power of _______ in the supply chain.
A. manufacturers
B. wholesalers
C. supply chain specialists
D. retailers
4. Innovators are critical to new-product marketers because they
A. act as reverse engineering consultants.
B. are the major source of innovation.
C. help with test marketing.
D. help the product gain market acceptance.
5. The growth phase of the product life cycle is always dynamic. Which of the following does not occur in
this phase?
A. Some new competitors may enter the market with similar products.
B. Some competitors will exit in an “industry shakeout.”
C. Profits increase as economies of scale are attained.
D. Price competition with protracted price wars erodes profits.
6. Marketers study _______ to see how new products are being customized or adapted and to discover
new trends in the marketplace.
A. lead users
B. reverse engineers
C. laggards
D. market testers
7. Eric is a sales rep for an established building materials manufacturer. Business is good, but he’s
concerned that the company has spent little on new product development and hasn’t created a new product in over five years. Without new products, Eric can market his current products only to his current
customers or
A. intensify his prototyping.
B. expand his early adopter market segment.
C. diversify.
D. market the same products to similar customers.
8. Successful first movers create a market or a product category and benefit from being readily
recognizable to consumers and
A. not needing to do test marketing.
B. establishing an early market share lead.
C. using prototypes to dominate the market.
D. not having to pay advertising expenses.
9. _______ means allowing employees to make decisions about how service is provided to customers.
A. Quality control
B. Knowledge control
C. Empowerment
D. Standards enforcement
10. Between concept testing and market testing, a firm should engage in the _______ stage of the product development process.
A. product development
B. marketing research
C. securing financial backing
D. brainstorming
11. Many product dominant firms use quality service
A. as a way to minimize the cost of production.
B. as a way to increase the perishability of their products and induce replacement purchases.
C. to support a standards gap.
D. to maintain a sustainable competitive advantage.
12. For a brand to be effective, it needs to be
A. a catchy, tongue-twisting phrase.
B. a visual image containing human characters.
C. generic.
D. easy for consumers to recognize and remember.
13. Through research, firms can close the _______ gap by matching customer expectations with actual
A. standards
B. delivery
C. seniority
D. knowledge
14. By the time BMW and Mercedes Benz entered the mini-SUV market, there were many competitors,
sales had peaked, and profits were declining. These firms entered the market during the _______ stage of the product life cycle.
A. growth
B. leveling
C. decline
D. maturity
15. Because services like airline flights and hotel beds are _______, many marketers attempt to match
demand with supply using pricing strategies.
A. intangible
B. perishable
C. inseparable
D. variable
16. Proactive managers and service providers know to plan for failure to meet customer expectations. The course of action that will help in the long run as well as the short run is to
A. increase the zone of tolerance.
B. attempt to make amends and learn from the experience.
C. assess service standards against service fairness.
D. reduce the communications gap.
17. The CEO of David’s firm just came back from a business seminar. He called David into his office and
stated, “I just found out about the product life cycle curve in a strategy seminar. This is a great tool. I want you to drop whatever you’re doing and inventory all of our products to determine exactly where they are in the product life cycle.” David needs to think fast for a good answer because he knows that
A. it’s often impossible to identify with precision where a product is in the product life cycle.
B. the product life cycle works only for certain types of firms.
C. the idea has been discredited by recent research.
D. the product life cycle isn’t a useful concept.
18. Which of the following is not one of the important functions of labels on products and packages?
A. Promoting the brand or complementary brands
B. Protecting against damage to the product
C. Providing consumer information to assist in purchasing
D. Identifying the brand and building brand image
19. David’s marketing research returned the finding that customers were staying away from his bookstore because of a lack of services like gift cards, return policies, and special orders. David was shocked.
“Nobody ever asks about that stuff! If it were that important, people would ask about it.” David is likely
suffering from a/an _______ gap.
A. ethics
B. delivery
C. knowledge
D. standards
20. As she was considering what kind of shampoo to try, Ella was surprised to see ads for Procter &
Gamble’s Head and Shoulders being promoted as a glamorous health-oriented product. She had always
thought of Head & Shoulders as an anti-dandruff shampoo. The new ads suggest that Head & Shoulders
has most likely been
A. co-branded.
B. reformulated.
C. extended as a brand.
D. rebranded.