PCM Marketing Strategy & Planning 3 — Questions and Answers
Question 1: A luxury car brand deliberately limits distribution to only a handful of exclusive dealerships. This strategy is known as:
- Intensive distribution
- Selective distribution
- Exclusive distribution (Correct answer)
- Direct distribution
Correct answer: Exclusive distribution
Exclusive distribution restricts the number of outlets to maintain brand prestige and control the customer experience.
Question 2: Porter's Generic Strategies model suggests a firm can achieve competitive advantage through which three approaches?
- Differentiation, Cost Leadership, and Focus (Correct answer)
- Innovation, Pricing, and Promotion
- Market Penetration, Development, and Diversification
- Segmentation, Targeting, and Positioning
Correct answer: Differentiation, Cost Leadership, and Focus
Porter identified Cost Leadership, Differentiation, and Focus (which can be cost-focused or differentiation-focused) as the three generic competitive strategies.
Question 3: A firm's mission statement primarily serves to:
- State annual revenue targets
- Define the organization's core purpose and reason for existence (Correct answer)
- Outline quarterly marketing budgets
- List competitive pricing tactics
Correct answer: Define the organization's core purpose and reason for existence
A mission statement articulates the fundamental purpose of an organization, guiding decision-making and communicating values to stakeholders.
Question 4: The concept of 'sustainable competitive advantage' implies that a firm's edge over rivals should be:
- Temporary and price-based
- Difficult to imitate and durable over time (Correct answer)
- Based solely on promotional spending
- Dependent on market conditions
Correct answer: Difficult to imitate and durable over time
A sustainable competitive advantage is one that competitors cannot easily replicate, allowing the firm to maintain superior performance over time.
Question 5: Which metric measures the total profit a company can expect from a customer relationship over its entire duration?
- Market share
- Customer Lifetime Value (CLV) (Correct answer)
- Net Promoter Score (NPS)
- Return on Ad Spend (ROAS)
Correct answer: Customer Lifetime Value (CLV)
Customer Lifetime Value (CLV) projects the total net profit attributed to a customer over the full course of their relationship with a company.
Question 6: A marketing strategy that focuses resources on a narrow market segment to serve it better than competitors is called a:
- Mass marketing strategy
- Differentiated marketing strategy
- Niche (concentrated) marketing strategy (Correct answer)
- Undifferentiated strategy
Correct answer: Niche (concentrated) marketing strategy
Niche or concentrated marketing targets a small, well-defined segment with a tailored offering, enabling deep expertise and strong positioning within that segment.
Question 7: In the context of a marketing audit, which of the following is an example of an internal factor?
- New government regulations on advertising
- Emerging consumer technology trends
- The company's core competencies and resources (Correct answer)
- Economic recession affecting purchasing power
Correct answer: The company's core competencies and resources
Internal factors in a marketing audit include the company's own capabilities, resources, and competencies — elements within the firm's control.
PCM Marketing Strategy & Planning 3
A luxury car brand deliberately limits distribution to only a handful of exclusive dealerships.
This strategy is known as: