Quiz: Principles Of Management! Exam

42 Questions | Total Attempts: 229

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Quiz: Principles Of Management! Exam

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Questions and Answers
  • 1. 
    Focus strategy can be defined as:
    • A. 

      the strategy of merging with an established company in order to gain monopoly over the market.

    • B. 

      the strategy a company uses when it decides to allocate the company resources equally among all the marketing segments

    • C. 

      the strategy a company uses when it decides to serve a limited number of segments, or just one segment of the market.

    • D. 

      the strategy a company uses when it decides to ignore the different needs of different market segments, and produce one standardized product for all the customers.

    • E. 

      the strategy of closing down one or more business units in order to minimize the losses.

  • 2. 
    Which of the following generic competitive strategies is a producer of commodity steel most likely to pursue?
    • A. 

      Exclusive dealing

    • B. 

      Broad differentiation

    • C. 

      Focus differentiation

    • D. 

      Broad low-cost

    • E. 

      Horizontal integration

  • 3. 
    Companies that successfully differentiate a product often charge _____ prices for them.
    • A. 

      premium

    • B. 

      exorbitant

    • C. 

      low

    • D. 

      average

    • E. 

      escalating

  • 4. 
     A differentiated product is a product that:
    • A. 

      has a greater resale value than rival products.

    • B. 

      provides greater reliability than rival products.

    • C. 

      is offered free of cost on purchase of a company's standard product.

    • D. 

      always costs more than rival products.

    • E. 

      always costs less than rival products.

  • 5. 
    Cool Looks produces a variety of clothing for various customer groups. Which of the following strategies is the firm most likely pursuing?
    • A. 

      Cost leadership

    • B. 

      Differentiation

    • C. 

      Product substitution

    • D. 

      Focus

    • E. 

      Share building

  • 6. 
    When a company produces a wide range of products for various customer groups, it is following a _____ strategy.
    • A. 

      cost leadership

    • B. 

      differentiation

    • C. 

      customer retention

    • D. 

      market concentration

    • E. 

      share building

  • 7. 
    Compared to a differentiator, the company that follows a low-cost strategy:
    • A. 

      distinguishes its products from those of rivals by offering something that they find hard to match.

    • B. 

      absorbs cost increases by powerful suppliers while keeping to their lower pricing.

    • C. 

      allows the company to charge a premium price for its good or service.

    • D. 

      uses perceived superior value to generate growth in demand among customers.

    • E. 

      creates entry barriers for rivals with greater brand loyalty to the specific products offered.

  • 8. 
    A differentiation strategy is based on creating a product that customers perceive as being:
    • A. 

      the same as other available products.

    • B. 

      distinct from other available products.

    • C. 

      the least costly product in the industry.

    • D. 

      the most costly product in the industry.

    • E. 

      cheaper, but inferior to the available products.

  • 9. 
    When a company recognizes that the needs of one market segment is not the same as another and accordingly customizes its product offerings, it is said to be pursuing:
    • A. 

      stuck-in-the-middle strategy.

    • B. 

      rapid-growth strategy.

    • C. 

      differentiation strategy.

    • D. 

      focus strategy.

    • E. 

      low-cost strategy.

  • 10. 
    A market segment consists of a group of:
    • A. 

      similar products.

    • B. 

      customers who have similar needs.

    • C. 

      products that are considered obsolete.

    • D. 

      diverse products produced by the same manufacturer.

    • E. 

      customers who have diverse needs.

  • 11. 
     A segmentation strategy requires that a company:
    • A. 

      standardize its products.

    • B. 

      offer its products at low costs.

    • C. 

      customize its products.

    • D. 

      produce one basic offering.

    • E. 

      attain high economies of scale by achieving a high volume of sales.

  • 12. 
    Which of the following is NOT a main approach to market segmentation?
    • A. 

      Marketing a product targeted toward average or typical customers

    • B. 

      Marketing a product to a group of people who are more likely to purchase it

    • C. 

      Making customized products to suit the unique requirements of customers

    • D. 

      Making products to meet the specific needs of a narrow group of customers

    • E. 

      Making one product aimed toward a general, rather than a specific subset of customers

  • 13. 
    Differentiation allows a company to:
    • A. 

      respond to demands of deep price demands from powerful buyers and still make money.

    • B. 

      lower its cost structure.

    • C. 

      charge a premium price for its good or service.

    • D. 

      charge low prices and still make profits.

    • E. 

      initiate a price war in order to grow volume and drive its weaker rivals out of the industry.

  • 14. 
    The main difference between companies following a broad low-cost strategy and those following a focus low-cost strategy is in the:
    • A. 

      standardized market price.

    • B. 

      industry life cycle stage.

    • C. 

      degree of market segmentation.

    • D. 

      age of the market.

    • E. 

      market trajectory.

  • 15. 
    A company that follows the _____ strategy customizes its offering to a particular niche in order to outsell its rivals.
    • A. 

      focused differentiation

    • B. 

      broad low-cost

    • C. 

      market standardization

    • D. 

      rapid growth

    • E. 

      stuck in the middle

  • 16. 
    Production of a large product variety without a large cost penalty is known as:
    • A. 

      market concentration.

    • B. 

      market segmentation.

    • C. 

      focused differentiation.

    • D. 

      mass production.

    • E. 

      mass customization.

  • 17. 
    When a company offers a wide variety of products at lower prices than its rivals, it is most likely:
    • A. 

      pursuing a low-cost strategy.

    • B. 

      pursuing a differentiation strategy.

    • C. 

      pursuing a focus strategy.

    • D. 

      pursuing an exit strategy.

    • E. 

      pursuing a divestment strategy.

  • 18. 
    A focused differentiator has the advantage of:
    • A. 

      selling on non-price factors, such as design or customer service.

    • B. 

      producing a large product variety without a large cost penalty.

    • C. 

      producing a basic offering that is relatively inexpensive to produce and deliver.

    • D. 

      being able to respond to demands for deep price discounts.

    • E. 

      being able to initiate a price war in order to grow volume and drive its weaker rivals out of the industry.

  • 19. 
    Lucy’s Swimwear Boutique offers swimwear that is targeted at affluent people who can afford to buy expensive, handmade swimsuits. Which of the following approaches to market segmentation is Lucy’s Swimwear Boutique using?
    • A. 

      Broad differentiation strategy

    • B. 

      Low market segmentation

    • C. 

      Medium market segmentation strategy

    • D. 

      Broad high-cost strategy

    • E. 

      Focus differentiation strategy

  • 20. 
    At The Luxury Hotel in Miami, Florida, three hotel employees serve the needs of each guest. In every room, a guest can summon a chef, a maid, or a valet by pressing a button at his/her bedside. Which generic business-level strategy is The Luxury Hotel utilizing?
    • A. 

      Cost leadership

    • B. 

      Differentiation

    • C. 

      Vertical integration

    • D. 

      Razor and blade

    • E. 

      Brand loyalty

  • 21. 
    The advantage that focused companies have over their broad market rivals is that they:
    • A. 

      can sells on non-price factors, such as design or customer service.

    • B. 

      can respond to demands for deep price discounts.

    • C. 

      sell fewer products in bulk to outsell their rivals.

    • D. 

      can initiate a price war in order to grow volume and drive its weaker rivals out of the industry.

    • E. 

      can absorb cost increases that may be passed on downstream by powerful suppliers.

  • 22. 
    Delta Airlines used to advertise its high-quality air travel service by saying it flew "anywhere, anytime." What generic strategy is represented by this advertisement?
    • A. 

      Broad low-cost

    • B. 

      Broad differentiation

    • C. 

      Vertical integration

    • D. 

      Right-time marketing

    • E. 

      Rapid growth

  • 23. 
    A company pursuing a focus strategy:
    • A. 

      attempts to serve all market segments.

    • B. 

      concentrates on building market share in one market segment.

    • C. 

      typically has more resources at its disposal than a differentiator does.

    • D. 

      has a greater impact on costs and revenues.

    • E. 

      produce different offerings for different segments.

  • 24. 
     Which of the following statements is true of differentiation and cost structure?
    • A. 

      Differentiation and cost structure decisions affect one another.

    • B. 

      Differentiation and cost structure decisions do not affect one another.

    • C. 

      Companies that focus on the higher-value end of the market have a lower cost structure.

    • D. 

      Differentiation decisions do not affect a company's profitability.

    • E. 

      Cost structure decisions do not affect a company's profitability.

  • 25. 
     Nick, a professional magician, is often invited to perform magic tricks at birthday parties and other social gatherings from across the country. However, he offers his services only to clients who stay in the same city as him. He is also known to charge less than other magicians in the city. Nick is pursuing which generic business strategy?
    • A. 

      Improved services

    • B. 

      Right-time marketing

    • C. 

      Focused low-cost

    • D. 

      Broad low-cost

    • E. 

      Deterrence strategy

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