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
C. share maintenance
D. mass-market penetration
Answer: c
Level of Difficulty: Easy
Page: 221
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.
Answer: a
Level of Difficulty: Medium
Page: 224
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.
Answer: c
Level of Difficulty: Medium
Page: 226
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
Answer: c
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authorized 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.
Level of Difficulty: Medium
Page: 227
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
Answer: c
Level of Difficulty: Easy
Page: 227
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.
Answer: d
Level of Difficulty: Medium
Page: 227
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.
Answer: a
Level of Difficulty: Medium
Page: 228
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
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authorized 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
Level of Difficulty: Hard
Page: 229
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
Answer: a
Level of Difficulty: Easy
Page: 229
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.
Answer: a
Level of Difficulty: Medium
Page: 230
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
Answer: c
Level of Difficulty: Hard
Page: 231-232
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
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authorized 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.
D. Market expansion strategy
Answer: d
Level of Difficulty: Medium
Page: 233
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.
Answer: a
Level of Difficulty: Medium
Page: 233
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
Answer: c
Level of Difficulty: Easy
Page: 234
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
Answer: b
Level of Difficulty: Medium
Page: 236
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
Answer: d
Level of Difficulty: Easy
© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not
authorized 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.
Page: 237
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
Answer: d
Level of Difficulty: Easy
Page: 237
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
Answer: c
Level of Difficulty: Medium
Page: 237
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
B. leapfrog
C. guerrilla attack
D. flank attack
Answer: d
Level of Difficulty: Easy
Page: 240
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
Answer: a
Level of Difficulty: Easy
Page: 241
21. Sales promotion efforts (like coupon drops and merchandising deals), local advertising
blitzes, and legal action are examples of the _____ strategy to achieve share growth.
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authorized 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
C. frontal attack
D. leapfrog
Answer: a
Level of Difficulty: Easy
Page: 241
Essay Questions
22. Explain 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 expectation that the earnings produced by each share point continue to expand as the
market expands. 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: (1) the existence of positive network effects; (2) future changes in
technology or other key success factors; (3) future competitive structure of the industry; (4)
future fragmentation of the market.
Level of Difficulty: Medium
Page: 223-224
23. Explain the various ways a challenger can target competitors established in the market.
Answer: A challenger can target its competitors in several ways: (1) 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
design; (2) 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 established; (3) Attack one or
more smaller competitors who have only limited resources: This may seem like an inefficient
way to attain substantial share increases; (4) Avoid direct attacks on any established
competitor: Usually involves either a flanking or an encirclement strategy, involving one large
or several smaller segments in which no competitor currently holds a strong position.
Level of Difficulty: Medium
Page: 236; 238
24. Compare and contrast the frontal attack and leapfrog strategy.
Answer: Where 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.
Such an approach is most likely to succeed when most existing customers do not have strong
brand preferences or loyalties, the target competitor’s product does not benefit from positive
network effects, and the challenger’s resources and competencies—particularly in
marketing—are greater than the target competitor’s. 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
© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not
authorized 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.
competitor’s current customers when it can offer a product that is attractively differentiated
from the competitor’s 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. It is an attempt to gain a significant advantage over
the existing competition by introducing a new generation of products that significantly
outperform or offer more desirable customer benefits than do existing brands.
Level of Difficulty: Easy
Page: 238-239
© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not
authorized 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.