CPM Marketing Strategy 2 — Questions and Answers
Question 1: A company decides to target the same product to all market segments using a single marketing mix. This approach is known as:
- Differentiated marketing
- Undifferentiated (mass) marketing (Correct answer)
- Concentrated marketing
- Micromarketing
Correct answer: Undifferentiated (mass) marketing
Undifferentiated marketing ignores segment differences and targets the whole market with one offer.
Question 2: Which of Porter's generic competitive strategies involves offering the lowest cost in the industry while maintaining acceptable profit margins?
- Differentiation
- Cost leadership (Correct answer)
- Focus (cost)
- Value-based pricing
Correct answer: Cost leadership
Cost leadership strategy aims to become the lowest-cost producer in the industry.
Question 3: A brand extends its name to a new product category it has never operated in before. This is best described as:
- Line extension
- Brand extension (Correct answer)
- Co-branding
- Flanker brand
Correct answer: Brand extension
Brand extension applies an existing brand name to a product in a new category.
Question 4: In the BCG Growth-Share Matrix, a product with high market share in a low-growth market is classified as a:
- Star
- Question mark
- Cash cow (Correct answer)
- Dog
Correct answer: Cash cow
Cash cows generate strong cash flow with little investment due to their high share in mature markets.
Question 5: Which pricing strategy involves setting a high initial price and then gradually lowering it over time?
- Penetration pricing
- Skimming pricing (Correct answer)
- Value-based pricing
- Economy pricing
Correct answer: Skimming pricing
Price skimming captures maximum revenue from early adopters before lowering prices for broader segments.
Question 6: A firm's sustainable competitive advantage is MOST difficult for competitors to replicate when it is based on:
- Lower advertising spend
- Unique organizational capabilities and culture (Correct answer)
- Temporary promotional discounts
- Wider distribution channels
Correct answer: Unique organizational capabilities and culture
Organizational capabilities and culture are intangible assets that are inherently hard for rivals to copy.
Question 7: When a firm adopts a market penetration strategy, it is attempting to:
- Enter new geographic markets with existing products
- Increase sales of existing products in existing markets (Correct answer)
- Develop new products for existing customers
- Diversify into unrelated business areas
Correct answer: Increase sales of existing products in existing markets
Market penetration focuses on growing market share within current markets using current products.
CPM Marketing Strategy 2
A company decides to target the same product to all market segments using a single marketing mix.
This approach is known as: