Marketing Strategy Flashcards

A company discovers that its target segment is highly price-sensitive and competition is intensifying. Which pricing strategy best defends market share while maintaining profitability?

Answer: Value-based pricing with tiered offerings

Value-based pricing with tiered offerings addresses price sensitivity by matching price to perceived value while protecting margins through differentiated product tiers.

In the BCG Growth-Share Matrix, a 'Question Mark' business unit is best described as one with:

Answer: Low market share, high market growth

Question Marks have low relative market share in high-growth markets, requiring strategic decisions about investing to build share or divesting.

A brand extending into a new product category leverages its existing equity. The primary risk of brand extension is:

Answer: Brand dilution if the extension underperforms or misaligns with core identity

Brand dilution occurs when a poorly received or misaligned extension weakens consumers' perceptions of the parent brand.

Which strategic framework explicitly evaluates the attractiveness of an industry based on five competitive forces?

Answer: Porter's Five Forces

Porter's Five Forces analyzes supplier power, buyer power, competitive rivalry, threat of new entrants, and threat of substitutes to assess industry attractiveness.

A company pursuing a 'market development' strategy according to the Ansoff Matrix would:

Answer: Enter new markets with existing products

Market development involves selling existing products to new customer segments or geographic markets.

Customer Lifetime Value (CLV) is most useful in marketing strategy for:

Answer: Allocating acquisition and retention budgets based on long-term profitability

CLV helps marketers decide how much to invest in acquiring and retaining customers by quantifying the total expected profit from a customer relationship.

A firm achieves competitive advantage through cost leadership when it:

Answer: Produces at lower costs than rivals while maintaining acceptable quality

Cost leadership means becoming the lowest-cost producer in the industry, enabling competitive pricing or higher margins at market-average prices.