AMA Marketing Strategy 2 ā Questions and Answers
Question 1: A company discovers its product is in the 'question mark' quadrant of the BCG matrix. What does this indicate?
- High market share in a high-growth market
- Low market share in a high-growth market (Correct answer)
- High market share in a low-growth market
- Low market share in a low-growth market
Correct answer: Low market share in a high-growth market
Question marks have low market share but operate in high-growth markets, requiring investment decisions about whether to build or divest.
Question 2: Which pricing strategy involves setting a high initial price and gradually lowering it over time?
- Penetration pricing
- Competitive pricing
- Price skimming (Correct answer)
- Value-based pricing
Correct answer: Price skimming
Price skimming starts high to capture early adopters willing to pay a premium, then lowers price to attract more price-sensitive segments.
Question 3: A firm uses the same marketing mix for all market segments. This approach is best described as:
- Differentiated marketing
- Undifferentiated (mass) marketing (Correct answer)
- Concentrated marketing
- Micromarketing
Correct answer: Undifferentiated (mass) marketing
Undifferentiated marketing ignores segment differences and targets the entire market with a single offer, aiming for the broadest possible appeal.
Question 4: Porter's Five Forces model is primarily used to assess:
- A company's internal resource strengths
- The attractiveness and competitive intensity of an industry (Correct answer)
- Customer satisfaction levels across segments
- The optimal allocation of a marketing budget
Correct answer: The attractiveness and competitive intensity of an industry
Porter's Five Forces analyzes industry structure by evaluating rivalry, threat of new entrants, substitutes, buyer power, and supplier power.
Question 5: When a brand extends its name to a new product category, this is called:
- Line extension
- Brand extension (Correct answer)
- Co-branding
- Brand licensing
Correct answer: Brand extension
A brand extension uses an established brand name to launch a product in a different category, leveraging existing brand equity.
Question 6: Which element of the marketing mix is most directly responsible for communicating value to customers?
- Product
- Place
- Promotion (Correct answer)
- Price
Correct answer: Promotion
Promotion encompasses all communication activitiesāadvertising, PR, sales promotion, and personal sellingāused to convey the product's value proposition.
Question 7: A company's 'value proposition' is best defined as:
- The lowest price offered among competitors
- The unique bundle of benefits that satisfies target customers better than alternatives (Correct answer)
- The total revenue generated from a customer over their lifetime
- The geographic area where a brand has dominant market share
Correct answer: The unique bundle of benefits that satisfies target customers better than alternatives
A value proposition articulates why a customer should choose your offering by clearly stating the unique benefits it delivers relative to competitors.
AMA Marketing Strategy 2
A company discovers its product is in the 'question mark' quadrant of the BCG matrix.
What does this indicate?