1) Sasha, the marketing head of a firm, believes that customers hire products to

Question

1)

Sasha, the marketing head of a firm, believes that customers hire products to do jobs for them and that these jobs should be the basis for market segmentation. In this case, which of the following is Sasha likely to approve?

Segmentation based on features such as durability and quality

2)

Saturn Inc., a manufacturer of home appliances, familiarizes customers with its products through advertising. Apart from attracting new customers, it offers quick demos in mass media that assist existing customers. Which of the following stages in the consumption chain is depicted in this scenario?

The eighth step: what do customers need help with when they use a product?

3)

Floyd Inc., a manufacturer of washing machines, encourages customers to choose their brand through extensive marketing. Features of Floyd's products are compared with those of other brands, and customers are made to see the benefits they get from purchasing Floyd's products. Which step of the consumption chain does this scenario depict?

4)

Rinkon Inc., an automobile company, purchased its competitor TrackRoads Inc. that had similar production quantities and a sufficient amount of raw materials. This takeover was done to decrease the unit cost production of Rinkon and to increase its production using more equipment in Rinkon. This strategy led to record profits and more customers investing their finances on cars manufactured by Rinkon. The scenario best illustrates the:

investment strategy.

5)

Yellow Corp., a supplier that provides raw materials to a leading computer brand, had to lower its costs by 7 percent as the computer brand doubled its order. As a result, Yellow Corp. experienced economies of scale. This negotiation tactic is an example of _____.

competitive advantage

6)

Vladimir, the CEO of Autumn Inc., claims that a learning curve is a better option of identifying the growth of the company. His assistant, Mark, states that growth can be better assessed if a scale curve is used as it reflects reliable and validated results and moreover it shows results of a specific time period. Which of the following statements strengthens Vladimir's claim?

A scale curve captures the effects of economies of scale.

7)

VisionZed Inc., a computer software company, spends a lot of finances on research. It tries to implement the latest technologies available and provides services that are matchless when compared to any of its competitors. At the same time, Xtron Technologies Corp., another computer software company, pays half the price that VisionZed pays on research as it combines the intelligence of different software companies and creates its product. This enables Xtron to have a cost advantage over VisionZed. Xtron Technologies Corp. is an example of a company that eliminates steps in the _____.

value chain

8)

MediDose Inc., a pharmaceutical company, has been studying and experimenting with a few drugs. After 10 years of conducting and standardizing tests, the company comes up with positive results that would help many patients. These drugs become popular and effective among millions of patients and enable the company to expand its operations across the globe while spreading out the cost of the studies. Which of the following is the subject of economies of scale in the described scenario?

Explanation / Answer

1. Since Sasha believes that products are hired to do jobs, hence option (a) segmentation based on the functions provided by customer, is the correct choice.

2. Option (d) The eighth step: what do customers need help with when they use a product, is depicted in this scenario.

3. Option (d) The third step: how do consumers make their final selections, is depicted in this case as the company is helping the customer to compare the alternatives and making the final decision

4. Option (d) Investment strategy, as the company invested strategically on the competitor that lead to increased profits, reduced costs.

5. Option (c) Purchasing volume, as the company got more orders and it reached economies of scale. Hence, it became a volume game for them

6. Option (c) is the correct choice, as this statement of learning curve assessing the company from its inception strengthens the fact that learning curve is a better tool to know the growth of company.

7. Option (d) Value chain, as Xtron company minimises1 finances on new research.

8. Option (d) production costs is the subject of economies of scale. If the drug becomes famous, it can reduce production cost by working on volume.

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