Ans t the text lists several examples of how

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ANS: T The text lists several examples of how companies have created niche competitive advantages. PTS: 1 REF: 20 OBJ: 02-5 TYPE: Comp TOP: AACSB Reflective Thinking | TB&E Model Strategy 12. Berkshire Hathaway Inc., a large property insurance company, owns a large chain of jewelry stores and has recently purchased Russell Corporation, a manufacturer of sporting goods. Berkshire Hath- away uses a market penetration strategy. ANS: F Berkshire Hathaway uses a diversification strategy. PTS: 1 REF: 22 OBJ: 02-6 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Strategy 13. When the Internet auction company eBay opened a version of the company called eBayfrance for the French market, it was an example of market penetration. ANS: F Market penetration is the strategy of selling more to the existing customers. This is an example of a market development strategy, which is attracting new customers to existing products. PTS: 1 REF: 22 OBJ: 02-6 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Strategy 14. A market penetration strategy entails the creation of new products for current customers.
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ANS: F This is an example of product development strategy. A market penetration strategy in one that tries to increase market share among existing customers. PTS: 1 REF: 22 OBJ: 02-6 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Strategy 15. The Home Depot’s purchase of Hughes Supply Company allows it to better meet the needs of its cur- rent business customers. This is an example of product development. ANS: T PTS: 1 REF: 22 OBJ: 02-6 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Strategy 16. When a florist shop begins to sell burial caskets to its customers, it is engaged in product development. ANS: T Product development is the offering of new products to current markets. PTS: 1 REF: 22 OBJ: 02-6 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Strategy 17. A diversification strategy entails increasing sales by introducing new products into new markets. ANS: T PTS: 1 REF: 22 OBJ: 02-6 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Strategy 18. A portfolio matrix is a tool for allocating resources among products or strategic business units on the basis of relative market share and degree of innovation. ANS: F A portfolio matrix is based on relative market share and market growth rate. PTS: 1 REF: 22-23 OBJ: 02-6 TYPE: Comp TOP: AACSB Reflective Thinking | TB&E Model Strategy 19. Marketing strategy involves the activities of selecting and describing one or more target markets and developing and maintaining a marketing mix that will produce mutually satisfying exchanges with tar- get markets. ANS: T PTS: 1 REF: 24 OBJ: 02-7 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Strategy 20. The development of a target market strategy begins with a marketing audit. ANS: F The development of a target market strategy begins with a market opportunity analysis (MOA).
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