Chapter 04 - Understanding Market Opportunities

Chapter 04 Understanding Market Opportunities Multiple Choice Questions

1. A(n) _____ is defined as being co posed of indi!idua"s and organi#ations $ho are interested in and $i""ing to bu% a good or ser!ice to obtain benefits that $i"" satisf% a particu"ar need. A. sector &. channe" C. posse '. arket Ans$er( d )e!e" of 'ifficu"t%( *as% +age( ,-

.. A group of fir s that offer a product or c"ass of products that are si i"ar and are c"ose substitutes for one another is referred to as a(n) _____. A. sector &. channe" C. industr% '. concern Ans$er( c )e!e" of 'ifficu"t%( *as% +age( ,-

/. 0dentif% the de ographic trend that inf"uences A. 1itness and nutrition &. 0 igration increase C. Corporate socia" responsibi"it% '. *cono ic recession Ans$er( b
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arket attracti!eness.

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Chapter 04 - Understanding Market Opportunities

)e!e" of 'ifficu"t%( *as% +age( -/

4. Marketers of consu er ser!ices such as hea"th care and "ife insurance are capita"i#ing on the genera" trend of an aging popu"ation7 thereb% de!e"oping and i p"e enting arketing strategies according"%. 8hich acroen!iron enta" trend is acting as a cata"%st here9 A. 5echno"ogica" &. *cono ic C. :ociocu"tura" '. 'e ographic Ans$er( d )e!e" of 'ifficu"t%( Mediu +age( -1

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Chapter 04 - Understanding Market Opportunities

;. 8hich of the fo""o$ing represents a sociocu"tura" trend9 A. 1itness and nutrition patterns &. 0 igration increase C. *cono ic recession '. 3ro$ing idd"e c"ass Ans$er( a )e!e" of 'ifficu"t%( *as% +age( -4

<. 8hich of the fo""o$ing is a factor of the econo ic en!iron ent9 A. 1itness and nutrition patterns &. Corporate socia" responsibi"it% C. =ise and fa"" in interest rates '. Aging popu"ation Ans$er( c )e!e" of 'ifficu"t%( *as% +age( -4

>. *ach acroen!iron enta" trend has a distinct i pact on the consu er and industria" arket. 0dentif% the situation $here industries such as check-cashing out"ets and pa$n shops $i"" face a tough ti e sta%ing in business. A. 0ncreased i igration &. =obust econo % C. *cono ic recession '. Aging popu"ation Ans$er( b
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Chapter 04 - Understanding Market Opportunities

)e!e" of 'ifficu"t%( Mediu +age( -;

,. 8hich of the fo""o$ing is true of o!erregu"ation9 A. 0t protects inefficiencies. &. 0t does not pro ote trade barriers. C. 0t a!oids inf"ationar% pressures. '. 0t a""o$s eas% entr% for ne$ co petitors. Ans$er( a )e!e" of 'ifficu"t%( *as% +age( -<

-. Marketing ser!ices ha!e been ade eas% b% ad!ertise ents on the $eb or !ia e- ai"7 socia" net$orks7 and on"ine stores. 8hich acroen!iron enta" trend does this signif%9 A. 6atura" en!iron ent &. *cono ic en!iron ent C. 5echno"ogica" en!iron ent '. =egu"ator% en!iron ent Ans$er( c

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Chapter 04 - Understanding Market Opportunities

)e!e" of 'ifficu"t%( *as% +age( ->

10. A rise in the production of h%brid gas-e"ectric !ehic"es7 high-efficienc% )*' bu"bs7 phosphate-free detergents7 and rec%c"ed paper indicates the i pact of $hich of the fo""o$ing acroen!iron enta" forces9 A. 5he natura" en!iron ent &. 5he sociocu"tura" en!iron ent C. 5he regu"ator% en!iron ent '. 5he de ographic en!iron ent Ans$er( a )e!e" of 'ifficu"t%( *as% +age( -,

11. According to +orter?s 1i!e Co petiti!e 1orces7 $hich of the fo""o$ing is the ke% force in the fast-food industr%9 A. 5hreat of ne$ entrants &. 5hreat posed b% substitute products C. &argaining po$er of supp"iers '. &argaining po$er of bu%ers Ans$er( b )e!e" of 'ifficu"t%( Mediu +age( --

1.. 8hich of the fo""o$ing forces increases industr% attracti!eness9 A. 4igher threat of substitute products &. )esser threat of ne$ entrants C. 3reater bargaining po$er for supp"iers '. )o$er bu%ing po$er for custo ers

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Chapter 04 - Understanding Market Opportunities

Ans$er( b )e!e" of 'ifficu"t%( *as% +age( 100

1/. According to +orter7 ri!a"r% a ong co petitors is greater( A. $hen "o$ in!est ent intensit% e@ists in businesses. &. $hen do inant fir s e@ist in an industr%. C. $hen "o$ s$itching costs e@ist for the bu%ers. '. $hen strong product differentiation e@ists a ong current p"a%ers. Ans$er( c )e!e" of 'ifficu"t%( *as% +age( 100 14. 5he threat of ne$ entrants to an industr% is "ess( A. $hen the econo ies of sca"e are strong. &. $hen the industr% has "o$ capita" reAuire ents.

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Chapter 04 - Understanding Market Opportunities

C. $hen "itt"e product differentiation e@ists a ong current p"a%ers. '. $hen it is particu"ar"% eas% to gain distribution. Ans$er( a )e!e" of 'ifficu"t%( *as% +age( 100 1;. A distribution agenc% $as using facsi i"e achines to send and recei!e "ong-distance essages. 5his $as rep"aced $ith an a""-in-one printer that cou"d scan7 cop%7 and fa@. 5he cost of the ne$ printer $as a" ost the sa e as the facsi i"e achine. 1or the anufacturer of facsi i"e achines7 this e@a p"e e@e p"ifies( A. the entr% barrier for ne$ entrants. &. the bargaining po$er of bu%ers. C. the threat of substitute products. '. the bargaining po$er of supp"iers. Ans$er( c )e!e" of 'ifficu"t%( Mediu +age( 100 1<. 5he bargaining po$er of supp"iers increases( A. if the cost of s$itching supp"iers is "o$. &. if the prices of substitutes are not high. C. if the supp"iers can rea"istica""% threaten back$ard integration. '. if the supp"ier?s product is not a "arge part of the bu%er?s !a"ue added. Ans$er( c )e!e" of 'ifficu"t%( Mediu +age( 101

1>. 8hich of the fo""o$ing increases a bu%erBs bargaining po$er9 A. 4igher s$itching costs &. )o$ bu%er profitabi"it% C. 4igher i portance of the product to the bu%er '. &ack$ard integration b% supp"iers Ans$er( b )e!e" of 'ifficu"t%( Mediu
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Chapter 04 - Understanding Market Opportunities

+age( 101 1,. Opportunities are attracti!e at the icro "e!e" on the arket side $hen( A. the target arket is un"ike"% to gro$. &. the source of custo er pain and its reso"ution is unkno$n. C. the arket offering does not pro!ide custo er benefits that other so"utions do. '. the co pan% has other seg ents for $hich the current"% targeted seg ent a% pro!ide a springboard. Ans$er( d )e!e" of 'ifficu"t%( Mediu +age( 10;

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Chapter 04 - Understanding Market Opportunities

1-. 1or an industr%7 attracti!e opportunities are a!ai"ab"e at the icro "e!e" $hen( A. the business has inferior organi#ationa" processes or resources. &. the co pan% possesses so ething proprietar% that is easi"% dup"icab"e. C. the co pan%Bs business ode" is econo ica""% !iab"e. '. the source of custo er pain and its reso"ution is unkno$n. Ans$er( c )e!e" of 'ifficu"t%( 4ard +age( 10<

.0. 8hich of the fo""o$ing is considered a critica" success factor in retai"ing9 A. +rice &. )ocation C. +ro otion '. +roduct Ans$er( b )e!e" of 'ifficu"t%( *as% +age( 10,

.1. A(n) _____ is used to assess the i pact and the ti ing of an en!iron enta" e!ent in a fir . A. &C3 atri@

&. affinit% diagra C. acti!it% net$ork diagra '. opportunit%Cthreat Ans$er( d )e!e" of 'ifficu"t%( *as% +age( 110
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Chapter 04 - Understanding Market Opportunities

Essay Questions

... &rief"% describe the sociocu"tura" en!iron ent and the econo ic en!iron ent of a businessBs acroen!iron ent. Ans$er( :ociocu"tura" trends are those that ha!e to do $ith the !a"ues7 attitudes7 and beha!ior of indi!idua"s in a gi!en societ%. 5$o trends of particu"ar re"e!ance toda% are greater interest in corporate socia" responsibi"it% b% businesses and trends to$ard fitness and nutrition. A ong the ost far-reaching of the si@ acro trend co ponents is the econo ic en!iron ent. 8hen peop"eBs inco es rise or fa""7 $hen interest rates rise or fa""7 $hen the fisca" po"ic% of go!ern ents resu"ts in increased or decreased go!ern ent spending7 entire sectors of econo ies are inf"uenced deep"%7 and so eti es sudden"%. Marketers e!er%$here ust face the fact that the so-ca""ed e erging arkets are no "onger Dust seen as sources of "o$-cost co odities and "abor. =ather7 the% are $here an% gro$th in de and ust co e fro . )e!e" of 'ifficu"t%( Mediu +age( -4E-;

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Chapter 04 - Understanding Market Opportunities

./. *@p"ain the cha""enges in

acro-"e!e"

arket and industr% ana"%sis.

Ans$er( 8hi"e ana"%#ing the attracti!eness of one?s arket or industr%7 one ust identif% e@act"% $hich arket or industr% to ana"%#e. On the arket side7 the cha""enge often "ies in si#ing the re"e!ant arket. Markets can be easured in !arious $a%s7 in nu bers of Aua"ified potentia" custo ers7 in units consu ed of a c"ass of goods or ser!ices7 or in ter s of !a"ue. On the industr% side7 the cha""enge "ies in ho$ narro$"% or broad"% to define one?s industr%. A good $a% to identif% the ost suitab"e definition of the industr% that pertains to one?s co pan% is to consider $hether the kinds of ke% supp"iers7 the processes b% $hich !a"ue is added7 and the kinds of bu%ers are the sa e for %our co pan% and other co panies $hose industr% %ou consider %our fir a part of. )e!e" of 'ifficu"t%( Mediu +age( 10/

.4. *@p"ain the significance of critica" success factors. Ans$er( 5hose critica" factors that tend to separate the $inners fro the a"so-rans $ithin an industr%7 and $hose successfu" i p"e entation a"ong $ith other hard-to-i itate e"e ents specific to a fir a% account for a fir ?s continued success $ithin a particu"ar industr% are ca""ed the industr%?s critica" success factors7 or C:1s. An industr%?s C:1s a% be identified b% asking t$o ke% Auestions( (1) 8hich fe$ decisions or acti!ities are the ones that7 if gotten $rong7 $i"" a" ost a"$a%s ha!e se!ere"% negati!e effects on co pan% perfor ance9 (.) 8hich decisions or acti!ities7 done right7 $i"" a" ost a"$a%s de"i!er disproportionate"% positi!e effects on perfor ance9 An efficient and $e""-connected tea enab"es fir s to enhance the attracti!eness of an opportunit% because it is ore "ike"% to be ab"e to ride out the ine!itab"e $inds of change. Connected peop"e up and do$n the !a"ue chain are ab"e to contro" the uncertainties in!o"!ed $ith the attracti!eness of an industr%7 and the success of the product b% changing strategies according to reAuire ents. )e!e" of 'ifficu"t%( Mediu +age( 10,-10-

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