QUESTION 1

A company introduces a new product in the market. The company decides that the only way it could attract customers is to keep the price of the product lower than what its competitors offer in the market. Which of the statements would hold true for such a strategy?

The company invests heavily in market research.

The company makes an effort to offer unique features to the customers.

The company must emphasize efficiency.

The company must spend substantial funds on research and development.

The company encourages expensive advertising campaigns.
5 points

QUESTION 2

Which of the following is a disadvantage of cost leadership?

The presence of a cost leader in an industry tends to discourage new firms from entering the business.

Low prices for goods and services always lead to low customer base.

Downplaying research and development can slow cost leaders' ability to respond to changes once they are detected.

Cost leadership strategy makes companies vulnerable to price competition from rivals.

Cost leadership strategy breaks down barriers to entry that protect the firm from new competition.
5 points
QUESTION 3

A watch manufacturing company has priced its goods at a rate that is higher than what other companies offer. The watches made by this company do not have any stand out feature to differentiate them from the other companies' watches or to justify their high price. This company would be considered as a _____ firm.

rack jobber

stuck in the middle

paste-up

runner

pre-retailing
5 points
QUESTION 4

A(n) _____ strategy requires offering unique features that fulfill the demands of a broad market.

focused cost leadership

cost leadership

differentiation

adaptive

pull
5 points
QUESTION 5

Firms that charge relatively low prices and offer substantial differentiation are following a _____ strategy.

generic cost

best-cost

standardized cost

stuck in the middle

marked
5 points
QUESTION 6

A company provides babysitting services to single working mothers. This is the example of a(n):

adaptive strategy.

pull strategy.

cost leadership strategy.

focused differentiation strategy.

focused cost leadership strategy.
5 points
QUESTION 7

A firm is said to be _____ if it does not offer features that are unique enough to convince customers to buy its offerings and its prices are too high to effectively compete on based on price.

paste-up

runner

rack jobber

stuck in the middle

preretailing
5 points
QUESTION 8

Which of the following statements holds true for the cost leadership strategy?

Cost leaders, in general, encourage expensive advertising campaigns.

Cost leaders, in general, invest heavily in market research.

Cost leaders, in general, spend substantial funds on research and development.

Cost leaders, in general, make an effort to offer unique features to the customers.

Cost leaders, in general, emphasize efficiency.
5 points
QUESTION 9

A company sells computers only over the internet. Customers can decide their own computer configuration at the company's website and then place the order for the computer. This is an example of:

focused differentiation strategy.

focused cost leadership strategy.

cost leadership strategy.

pull strategy.

adaptive strategy.
5 points
QUESTION 10

Which of the following is an advantage of cost leadership?

It makes a firm following this strategy well positioned to withstand price competition from rivals.

The need for high sales volume requires low upfront investments in production and/or distribution capacity.

In markets that involve a lot of brand loyalty, cost leadership companies command the largest share in the market.

Low expenditure on market research helps firms following the cost leadership strategy to detect important environmental changes at a lower cost.

Highly fragmented markets offer firms following this strategy greater opportunities to attract a large segment of customers.
5 points
QUESTION 11

Healthie is a health drink company known for launching drinks with flavors that are different from what are offered in the market. It regularly indulges in experimentation to come up with new and exotically flavored drinks. It also charges higher prices than the other health drink companies do. What disadvantage would the company face because of the strategy it follows?

The firm needs to attract huge numbers of customers in order to have a good overall level of profit.

Differentiation lacks an ability to obtain premium prices from customers.

A differentiation strategy allows the entrance of new companies in the market.

A differentiation strategy lacks the capacity to generate buyer loyalty.

Competitors may be able to imitate the features well enough that they are no longer unique.
5 points
QUESTION 12

What advantage would Healthie, the company whose strategy was described in question 11, enjoy because of the strategy it follows?

It can depend on its ability to reduce the price to drive competition out of the market.

Customers always prefer a product with features rather than a cheaper alternative.

It has an ability to obtain premium prices from customers.

It does not need to spend significant funds on advertising.

Customers are always eager to pay extra to obtain the unique features that a firm is trying to build its strategy around.
5 points
QUESTION 13

One of Healthie's rivals offers the same drinks at a lower price. Customers who were once loyal to Healthie immediately switch over to the new company. This is an example of _____.

price sensitivity

affective conflict

party selling

palming off

all-you-can-afford budgeting
5 points
QUESTION 14

A real estate company provides housing services to retired individuals. It helps individuals above the age of sixty to search for houses with peaceful surroundings. That the company provides housing services to retired individuals is an example of a(n):

adaptive strategy.

pull strategy.

focused cost leadership strategy.

cost leadership strategy.

focused differentiation strategy.
5 points
QUESTION 15

Mekcin regularly launches products with features that are different from what others offer in the market. It has now launched a new electronic device in the market. Owners can fit the device to vehicles. It can be programmed in such a way that it automatically dials the police emergency number, provide them with all the required location details, and guide them to the location in case of an emergency. This is an example of a(n) _____ strategy.

focused cost leadership

cost leadership

pull

adaptive

differentiation
5 points
QUESTION 16

Which of the following statements would most likely hold true for Mekcin, the company mentioned in question 15?

It competes with rivals on the basis of price.

It offers generic and standardized products.

It does not invest in the field of market research.

It spends little on research and development.

It invests heavily in advertising and brand building.
5 points
QUESTION 17

A national grocery chain sets up a store in a small town. It sources most of its produce from the local farmers. Since it sources the produce in bulk, it demands discounts from the suppliers. The store passes some of these savings to the customers in the form of low prices for the products. The price is lower than what is offered by the local grocery stores. The large quantities of products sold compensate for the lower price. This is an example of:

economies of distribution.

economies of cost.

economies of demand.

economies of supply.

economies of scale.
5 points
QUESTION 18

A bike manufacturing company targets college students. The price of the bikes offered by this company is lower than what the other companies offer in the market. That it offers low priced bikes to college students is an example of a(n):

adaptive strategy.

differentiation strategy.

focused cost leadership strategy.

pull strategy.

focused differentiation strategy.
5 points
QUESTION 19

A(n) _____ is a general way of positioning a firm within an industry.

micro-strategy

standard strategy

established strategy

generic strategy

marked strategy
5 points
QUESTION 20

A firm following a(n) _____ strategy offers products or services with acceptable quality and features to a broad set of customers at a low price.

pull

cost leadership

focused differentiation

adaptive

differentiation