Unit 3 Test Review: Competition

What is competition in the context of business?

• A collaboration between businesses to share resources

• A legal agreement between companies to set prices

• When a business attempts to attract the same customers as another business

• A government policy to regulate industry standards

What does competition help marketers with?

• Reducing the overall cost of marketing

• Making decisions about how to market their products or companies

• Increasing the size of the market

• Eliminating other competitors from the market

Competition can be based on which factors?

• Only nonprice factors

• Only price factors

• Either direct or indirect and can be based on price and nonprice factors

• Only customer service quality

What are direct competitors?

• Companies that offer completely different goods or services.

• Companies that sell identical or very similar goods or services.

• Companies that are acceptable substitutes for a company's products.

• Companies that offer similar goods or services that do not meet customer needs.

What defines indirect competitors?

• Companies that sell identical or very similar goods or services.

• Companies that offer completely different goods or services that do not meet customer needs.

• Companies that offer different, but similar, goods or services that meet customer needs.

• Companies that are not acceptable substitutes for a company's products.

What occurs when a lower price is the main reason customers buy from one business instead of another?

• Nonprice competition

• Price competition

• Product differentiation

• Market segmentation

What is the focus of a business engaged in price competition?

• To provide better customer service

• To offer the highest quality products

• To make more sales by offering the lowest prices

• To focus on product features and benefits

What is nonprice competition?

• Competing based on the quality of customer service alone

• Competing based on the lowest price for products

• Competing based on factors other than price

• Competing based on the size of the business

What is the purpose of a unique selling proposition (USP)?

• To summarize the special features or benefits of a product or business

• To describe how a customer's life will improve by using the product

• To provide a detailed description of a product's specifications

• To compare the product with competitor's products

What is competitive analysis?

• A) A strategy to increase a company's market share

• B) A tool used to compare the strengths and weaknesses of a product or company with its competitors

• C) A financial plan for marketing investments

• D) A method for hiring competitive employees