MKTG 448 Exam 1 - FLASHCARDS - Building a market position for enhanced performanc

Question 1

What defined as a business’ crucial decisions concerning its planned pattern of behavior in the marketplace to achieve a competitive advantage?

Answer 1

Marketing strategy

Question 2

What two questions of how to compete in the marketplace does marketing strategy address?

Answer 2

– How to create, communicate, and deliver products that offer value to customers in mutually beneficial exchanges with the organization?
– How to engender specific affects, cognitions and behaviors in target customers?

Question 3

What is the extent to which some facts and perceptual elements are prominent and easier to recall than others?

Answer 3

Salience

Due to its ease and higher probability of recall, salient information is often incorrectly perceived as being important.

Question 4

How is the salience of a strategic area measured?

Answer 4

Measured by the probability with which a benefit is recalled and mentioned by a customer.

Question 5

What represents the extent to which a strategic area is associated with an outcome of interest?

Answer 5

Importance

Question 6

True or false: The stronger the association between an input and outcome of interest, the more important the input?

Answer 6

TRUE

Question 7

What does SWOT stand for?

Answer 7

Strengths, Weaknesses, Opportunities, Threats

Question 8

What is CLV?

Answer 8

Customer lifetime value

Question 9

What are the 4 P’s?

Answer 9

Product, Price, Place, and Promotion

Question 10

What is the resource-advantage (R-A) theory in marketing strategy?

Answer 10

The R-A theory explains superior performance through competitive market positioning, founded on heterogeneous firm resources and competitive dynamics.

Question 11

What are the key assumptions of the resource-advantage theory?

Answer 11

The theory assumes heterogeneous and dynamic demand, imperfect consumer and firm information, constrained self-interest seeking, firm resources as financial, physical, legal, human, organizational, informational, and relational, and competitive dynamics as disequilibrium-provoking.

Question 12

How does comparative advantage in resources impact market position?

Answer 12

Firms with unique and specialized resource configurations achieve a competitive advantage in market position, leading to superior performance in a specific market segment.

Question 13

What are the types of firm resources?

Answer 13

Financial, physical, legal, human, organizational, informational, relational

Question 14

What resources in a firm are tangible?

Answer 14

Financial, physical and legal

Question 15

What resources in a firm are intangible?

Answer 15

Human, organizational, informational, relational

Question 16

What type of resources are the firm’s policies, cultural routines, norms, and competences?

Answer 16

Organizational

Question 17

What type of resources are current and potential cash resources of the firm?

Answer 17

Financial

Question 18

What type of resources are legal expertise in the firm and legally protected assets?

Answer 18

Legal

Question 19

What type of resources are the buildings, raw materials, and equipment that the firm owns?

Answer 19

Physical

Question 20

What type of resources are the skills and knowledge of individual employees?

Answer 20

Human

Question 21

What type of resources are business relationships with customers, suppliers, and competitors?

Answer 21

Relational

Question 22

What type of resources are knowledge a firm possesses related to its products and competitors?

Answer 22

Informational

Question 23

How do financial resources contribute to market position?

Answer 23

Financial resources enable firms to expand, develop new products/services, withstand economic cycles, and maintain competitive stability.

Question 24

What constitutes superior performance?

Answer 24

It rests on the ability to establish a competitive advantage in market position within specific customer segments.

Question 25

What is the three-step process for applying resource-advantage theory?

Answer 25

1. Defining the customer value equation 2. Determining market position 3. Resource mapping and configuration assessment

Question 26

What is the customer value equation?

Answer 26

The customer value equation identifies key attributes driving customer value within a segment, assigning importance weights to them through statistical analysis.

Question 27

How is the customer value equation developed?

Answer 27

It is developed through customer feedback, surveys, and statistical analysis to determine key drivers of satisfaction and their importance weights.

Question 28

What is the role of multiple regression in analyzing customer value?

Answer 28

Multiple regression quantifies the relationship between customer satisfaction and different attributes, providing importance weights for strategic decision-making.

Question 29

What are performance grades, and how are they calculated?

Answer 29

Performance grades reflect perceived customer satisfaction with a firm’s attributes, calculated as a percentage based on survey ratings.

Question 30

What is the Market Position Grid, and how does it help firms?

Answer 30

The Market Position Grid compares a firm's performance grades against competitors, visualizing strengths and areas for strategic resource allocation.

Question 31

What is resource mapping in market positioning?

Answer 31

Resource mapping identifies and analyzes firm resources allocated to key attributes, guiding decisions on investment, maintenance, or divestment.

Question 32

How does resource-advantage theory guide strategic decision-making?

Answer 32

The theory helps firms allocate resources efficiently, focusing on competitive advantages to enhance market position and performance.

Question 33

What is the significance of heterogeneous demand in resource-advantage theory?

Answer 33

Heterogeneous demand means that customer needs vary across and within industries, requiring firms to develop unique resources and strategies to gain competitive advantages.

Question 34

How do tangible and intangible resources differ in their role in competitive positioning?

Answer 34

Tangible resources provide foundational assets, while intangible resources drive differentiation and sustained competitive advantage.

Question 35

Why is it important for firms to understand the customer value equation?

Answer 35

Understanding the customer value equation helps firms identify key attributes customers value, allowing them to tailor their strategies to enhance perceived value and market position.

Question 36

How do firms determine the importance weights of attributes in the customer value equation?

Answer 36

Firms use statistical methods, such as multiple regression, to assess how different attributes impact customer satisfaction and assign weights accordingly.

Question 37

What is the role of segmentation, targeting, and positioning (STP) in market strategy under R-A theory?

Answer 37

STP allows firms to identify distinct customer segments, target them effectively, and position offerings to maximize competitive advantage within each segment.

Question 38

How does competitive dynamics create disequilibrium in markets?

Answer 38

Continuous innovation, changes in consumer preferences, and strategic moves by competitors disrupt market equilibrium, requiring firms to adapt dynamically.

Question 39

What are some examples of legal resources, and why are they important?

Answer 39

Legal resources include trademarks, patents, and licenses, which help firms protect competitive advantages and maintain market differentiation.

Question 40

How does resource mapping help firms allocate resources effectively?

Answer 40

Resource mapping identifies how different types of resources contribute to market positioning, helping firms optimize investment, maintenance, and divestment strategies.

Question 41

What role does innovation play in resource-advantage theory?

Answer 41

Innovation is endogenous to competition, meaning firms must continuously develop and apply resources creatively to sustain superior performance.

Question 42

Why do firms need to compare their market position to competitors?

Answer 42

Understanding competitors’ strengths and weaknesses helps firms refine their strategies, invest in key areas, and maintain or improve competitive advantage.

Question 43

How can firms use cost accounting in resource allocation decisions?

Answer 43

Cost accounting helps firms track spending on different resources and activities, ensuring strategic investments align with performance objectives.

Question 44

What is the relationship between brand equity and resource-advantage theory?

Answer 44

Strong brand equity results from effective resource allocation, enhancing customer perceptions, loyalty, and long-term market position.

Question 45

How do firms balance resource investment in competitive market positioning?

Answer 45

Firms analyze resource costs versus produced value, prioritizing attributes that maximize customer satisfaction and competitive differentiation.

Question 46

What strategic insights can firms gain from the Market Position Grid?

Answer 46

The Market Position Grid helps firms identify areas where they outperform competitors and where they need to invest resources for improvement.

Question 47

What are some potential risks of misallocating resources in market strategy?

Answer 47

Misallocation can lead to wasted investments, competitive disadvantages, or failure to meet customer needs, ultimately harming performance.