CAPITOL UNIVERSITY
Cagayan de Oro City
COLLEGE OF BUSINESS ADMINISTRATION
Prelim Examination for the 2nd Semester SY 2016-2017
Management 29
NAME: ___________________________ PERMIT NO. __________
SCORE _______
RATING _______
Test I: Multiple Choice - Choose the answer that BEST fits the question. Encircle the letter corresponding to the correct answer.
2 points each.
1. The primary objective of the early share leader, usually the market pioneer, in a growth market is _____.
A. share reduction
B. share growth
C. share maintenance
D. mass-market penetration
2. Sony was the pioneer and early share leader in the videocassette recorder industry with its Betamax technology. But
Matsushita's longer-playing and lower-priced VHS format equipment proved much more popular with consumers, and
dethroned Sony as industry leader. This example 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.
C. market fragmentation will occur if potential customers have homogeneous functional needs.
D. pioneers in new product-markets always manage to leverage their competitive advantages as the market grows.
3. Identify the share maintenance marketing objective for share leaders.
A. Delineate into niche target markets in product growth stage.
B. Stimulate selective demand among innovators.
C. Retain existing customers and ensure brand loyalty.
D. Stimulate secondary demand to help speed up overall market growth.
4. Identify a market leader's action aimed at stimulating selective demand among later adopters.
A. Maintaining/improving customer satisfaction and loyalty
B. Encouraging/simplifying repeat purchase
C. Differentiated positioning against competitive offerings
D. Reducing attractiveness of switching
5. 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 expansion
B. contraction
C. flanker
D. confrontation
6. Which of the following is characteristic of a market expansion strategy?
A. Make product modifications or improvements to match or beat superior competitive offerings.
B. Develop a second brand or product line with features or price more appealing to a specific segment of potential
customers.
C. Meet or beat lower prices or heavier promotional efforts by competitors when necessary to retain customers and
when lower unit costs allow.
D. Develop multiple-line extensions or brand offerings targeted to the needs of various potential user applications or
geographical segments within the market.
7. Which 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.
C. The market leader changes the marketing program before a suspected competitive challenge occurs.
D. The market leader defends its relative market share by expanding into a number of market segments.
8.Which 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. Improve ability to retain current customers as market fragments.
C. Increase ability to attract new customers in selected high-growth segments by focusing resources on them.
D. Improve ability to win new customers who might otherwise be attracted to competitor's offering.
9. Which of the following strategies is most effective in a market that is relatively homogeneous in relation to customer
needs and purchase criteria?
A. Fortress strategy
B. Market expansion strategy
C. Contraction strategy
D. Flanker strategy
Subject Title
Market Development
Date Prepared:
December 9, 2016
Prepared by:
JB Montecañas
Approved by:
EE Figueroa
CAPITOL UNIVERSITY
Cagayan de Oro City
COLLEGE OF BUSINESS ADMINISTRATION
Prelim Examination for the 2nd Semester SY 2016-2017
Management 29
10. What action must a leader take to improve customer satisfaction as competitor enters or prepares to enter the
market?
A. It should take steps to improve the physical product and customers' perceptions of it as well.
B. It should shift its sales promotion emphasis from building selective demand to stimulating primary demand.
C. It should continue sales promotion efforts aimed only at stimulating trial among later adopters.
D. It should shift its sales-force efforts from servicing existing customers to prospecting for new accounts.
11. Tokomo Motors has introduced a new line of cars aimed at creating an appeal for young car buyers looking for
good quality, 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. Identify the strategy employed by Tokomo Motors.
A. Confrontation strategy
B. Position defense strategy
C. Flanker strategy
D. Market expansion strategy
12. A firm develops line extensions, new brands, or alternative product forms utilizing similar technologies to appeal to
multiple market segments. Identify the strategy employed here.
A. Flanker strategy
B. Fortress strategy
C. Confrontation strategy
D. Market expansion strategy
13. Strategic withdrawal is most likely when:
A. a firm is unable to defend itself adequately 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.
C. a competitor chooses to attack the leader head to head and attempts to steal customers in the target market.
D. a firm tries to beat the attractive features of a competitor's offering only after the challenger's success has become
obvious.
14. What is the major marketing objective for followers, particularly larger firms entering a product-market shortly after
the pioneer?
A. Defend market position
B. Develop only a niche strategy
C. Attain share growth
D. Start discrete price wars
15. Which of the following share-growth strategies involves attacking the leader within its primary target market?
A. Flanker strategy
B. Frontal attack strategy
C. Encirclement strategy
D. Guerrilla attack strategy
16. Which of the following is an appropriate share-growth strategy in a relatively homogeneous market with respect to
customers’ needs and purchase criteria?
A. Guerrilla attack
B. Encirclement
C. Flank attack
D. Frontal attack
17. Which 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. Leapfrog
B. Flank attack
C. Encirclement
D. Guerrilla attack
18. What strategy would a challenger be pursuing if its primary objective is to capture a modest share of repeat
purchases in several market segments?
A. Frontal attack strategy
B. Leapfrog strategy
C. Guerrilla attack strategy
D. Encirclement strategy
19. A _____ strategy is appropriate when the market can be broken into two or more large segments, when the leader
and/or other major competitors hold a strong position in the primary segment, and when no existing brand fully satisfies
the needs of customers in at least one other segment.
A. frontal attack
Subject Title
Market Development
Date Prepared:
December 9, 2016
Prepared by:
JB Montecañas
Approved by:
EE Figueroa
CAPITOL UNIVERSITY
Cagayan de Oro City
COLLEGE OF BUSINESS ADMINISTRATION
Prelim Examination for the 2nd Semester SY 2016-2017
Management 29
B. leapfrog
C. guerrilla attack
D. flank attack
20. A(n) _____ strategy involves targeting several smaller untapped or underdeveloped segments in the market
simultaneously.
A. encirclement
B. guerrilla attack
C. flank attack
D. leapfrog
Essay Questions
1.
Explain briefly, how share gains are worth more in a growth market than in a mature market.
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2.
Explain briefly the various ways a challenger can target competitors established in the market.
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Subject Title
Market Development
Date Prepared:
December 9, 2016
Prepared by:
JB Montecañas
Approved by:
EE Figueroa