Walker_TB_ch09.doc

8/12/2019 Walker_TB_ch09.doc

1/7

Chapter 09

Strategies for Growth Markets

Multiple Choice Questions

1. The primary objective of the early share leader, usually the market pioneer, in a growthmarket 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 -( formateuipment 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. dentify 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

/. dentify a market leader+s action aimed at stimulating selective demand among later

adopters.

A. *aintaining4improving customer satisfaction and loyaltyB. %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.


2/7

$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)pansionB. contraction

. flanker

!. confrontationAnswer# c

$evel of !ifficulty# %asy

&age# '':

3.


3/7

offering.

Answer# d

$evel of !ifficulty# -ard&age# ''?

?.


4/7

!. *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 adeuately 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 prefersomething 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 thechallenger+s success has become obvious.

Answer# a

$evel of !ifficulty# *edium

&age# '00

1/.


5/7

&age# '0:

1:.


6/7

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 themarket 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# 1C the e)istence of positive network effectsD 'C future changes in

technology or other key success factorsD 0C future competitive structure of the industryD /Cfuture 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# 1C 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 'C Attack another follower who has an established position within a major marketsegment# 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 0C Attack one or

more smaller competitors who have only limited resources# This may seem like an inefficientway to attain substantial share increasesD /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#


7/7

competitors current customers when it can offer a product that is attractively differentiated

from the competitors 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. t 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.

Walker_TB_ch09.doc

Documents

Transcript of Walker_TB_ch09.doc