MALAWI ASSEMBLIES OF GOD UNIVERSITY

FACULTY OF COMMERCE AND MANAGEMENT

DEPARTMENT OF MANAGEMENT STUDIES

END SEMESTER EXAMINATION

CCC 2033: FUNDAMENTALS OF MARKETING

Date: December, 2017 Time allowed: 3 hours

General Instructions

1. There are 14 pages in this paper. Please check!

2. This paper has four sections, A, B, C and D. Please check!
3. Follow the instructions for each section.
4. Fill in your details on the answer book provided.
5. Write your name on the top of each page of the answer sheets provided.
6. Write on both sides of the answer sheets.
7. Do not tear any paper from the answer book or question paper.
SECTION A: MULTIPLE CHOICE
SECTION INSTRUCTIONS
THIS SECTION CARRIES 30 MARKS
EACH QUESTION CARRIES ONE MARK
ANSWER ALL QUESTIONS IN THIS SECTION
INDICATE YOUR ANSWER BY INDICATING A, B, C, OR D

1. If actual performance exceeds the expected performance of the product, then the customer is
___________________
A. Satisfied
B. Dissatisfied
C. Delighted
D. Neutral

2. The ________ concept holds that consumers and businesses, if left alone, will ordinarily not buy
enough of the organization’s products.
A. production
B. selling
C. marketing
D. holistic marketing

3. Chimney Sweeps employs people to clean fireplaces and chimneys in homes and apartments. The
firm is primarily the marketer of which one of the following?
A. An image
B. A service
C. A good
D. An idea

4. In marketing, anticipation of demand involves

A. Doing a consumer research
B. Stimulating demand
C. Balancing inventory to consumer demand
D. None of the above

5. __________________ is the act of trading a desired product or service to receive something of

value in return.
A. product
B. exchange
C. production
D. anticipation

6. Which of the following marketing concepts is suitable for a life insurance company?
A. Production concept
B. Product concept
C. Selling concept
D. Social concept
7. Organisations that follow the product concept assumes that ______________
A. Consumers prefer products that are widely available
B. Consumers prefer products that offer high performance
C. Consumers prefer products that are inexpensive
D. Consumers prefer product they are familiar with

8. According to the production concept, consumers will favor products that are ________ and
________.
A. Satisfying; quality focus
B. Advertised; affordable
C. In high demand; hard to find
D. Available; affordable

9. In planning its market offering, the marketer needs to address five product levels. These
levels include all of the following except ________.
A. Symbolic benefit
B. Product usage
C. Tangible product
D. Core benefit

10. The consumer usually purchases ________ frequently, immediately, and with a minimum of
effort.
A. Specialty goods
B. Shopping goods
C. “Must haves” goods
D. Convenience goods

11. Examples of products such as insurance, cemetery plots, and smoke detectors, are examples
of ________ that are products that the consumer does not know about or does not normally
think of buying.
A. Specialty goods
B. Unsought goods
C. Heterogeneous shopping goods
D. None of the above

12. Industrial-goods can be classified in terms of how they enter the production process and their
relative costliness. We can distinguish three groups of industrial goods: ________, capital
items, and suppliers and business services.
A. Service components
B. Pieces and parts
C. Specialty goods
D. Materials and parts
13. Capital items are long-lasting goods that facilitate developing or managing the finished
product. They include installations and ________.
A. Component materials
B. Operating supplies
C. Equipment
D. None of the above
14. A ________ is the set of all products and items a particular seller offers for sale.
A. Product line
B. Product mix
C. Product system
D. Product class

15. A consumer products firm manufacturers and sells over 200 different sizes and varieties of
jams and jellies. We can say that this manufacturer’s product mix has a ________ of
products in this category.
A. Width
B. Depth
C. Length
D. Continuity

16. A marketing manager has decided that the firm’s newest product should also carry with it a service
component—the home installation. When pricing out the product, the marketing manager realizes that
the service component should carry a higher margin than the basis hardware product. In terms of sales
and profits, the marketing manager is capitalizing on the ________ of the home installation to
increase the overall margin of his products.
A. Services
B. Convenience
C. Staple
D. Specialty

17. What are the two ways that a company can obtain new products?
A. Line extension and brand management
B. Internal development and brand management
C. New-product development and acquisition
D. Market mix modification and research and development

18. Product improvements, product modifications, and original products can all be classified as
________.
A. Pioneer products
B. New products
C. Product ideas
D. Test products

19. ________ is the product life cycle period when sales fall off and profits drop.
 A. Introduction
B. Growth
C. Maturity
D. Decline
20. Over the past 100 years or so, Binney and Smith's Crayola crayons have become a household
staple in more than 80 countries around the world. Crayola crayons are in the ________ stage
of the PLC.
A. Introduction
B. Growth
C. Maturity
D. Decline

21. Service industries are everywhere. They include government, ___________, business sector,
manufacturing sector, and the retail sector.
A. Private nonprofit
B. Insurance salespeople
C. Seasonal workers
D. Temporary workers

22. Which of the following would be an example of a “pure service”?

A. Insurance
B. Airlines
C. Car dealer
D. Copier company

23. Some services require that the client be present to conduct the service An example of such
a service is a ________.
A. Vending machines
B. Medical operation
C. Car repair
D. Tax service

24. Services have four distinctive characteristics that greatly affect the design of marketing
programs. Which of the following is NOT one of these characteristics?
A. Intangibility
B. Homogeneity
C. Variability
D. Perishability

25. Unlike physical goods, services are produced and ________ simultaneously.
A. Launched
B. Consumed
C. Created
D. Maximized
26. One of the special features of services marketing is the provider-client interaction. This is
defined as when the client is also ________ as the service is produced.
A. Prominent
B. Product
C. Present
D. Paying

27. Holistic marketing for services requires external, ________, and internal marketing.
A. Exceptional.
B. Consistent.
C. Interactive.
D. Influential.

28. Excellent service companies know that ________ employee attitudes will promote stronger
customer loyalty.
A. Cooperative
B. Positive
C. Neutral
D. Negative

29. Which of the following statements best explains why idea screening may be the most
important step of new product development?
A. Some potentially profitable ideas may be ill perceived by the idea screeners.
B. Some ideas that will become market disasters may be originally viewed favorably by the idea
screeners.
C. It gives research and development team members an opportunity to gather consumer
feedback.
D. It saves the company money in product development costs by giving the green light to
only the product ideas that are likely to be profitable .

30. Marketing communications are the means by which firms attempt to ________, persuade,
and remind consumers about the product and brands that they sell.
A. Reach
B. Inform
C. Attract
D. Interest

31. The marketing communications mix consists of six major modes of communications. Which
of the following is not one of these modes?
A. Personal selling
B. Direct marketing
C. Sales promotions
 D. Penetration pricing

32. In the communication model two elements represent the major parties in the communication
process. These two parties are called ________ and ________.
A. Sender/subject
B. Sender/receiver
C. Beginner/receiver
D. Receiver/starter
33. If we say that services cannot be seen before purchasing—that is a customer must experience
other clues to the service quality besides the tangible aspect, we are saying that a service is
_________.
A. Intangible
B. Inseparable
C. Perishable
D. Variable

34. When restaurants and theme parks add summer workers, they are attempting to manage supply and
demand for their services by ________.
A. Complementary services
B. Nonpeak demand
C. Using part-time employees
D. Increasing enrollment

35. Many consumers use price as an indicator of ________. Image pricing is especially effective
with ego-sensitive products such as perfumes and expensive cars.
A. Quality
B. Ability
C. Capability
D. Size

36. If demand hardly changes with a small change in price, then demand is ________.
A. Equal
B. Marginal
C. Inelastic
D. Elastic

37. A company’s costs take two forms. ________ are costs that do not vary with production or
sales revenue.
A. Variable
B. Fixed
C. Adjusted
D. Attributed
38. ________ consists of the sum of the fixed and variable costs for any given level of
production.
A. Total costs
B. Manufacturing costs
C. Delivery costs
D. Marketing costs

39. In ________ pricing, the company decides how to price its products to different customers in
different locations and countries.
A. Specialty
B. Geographical
C. Offset
D. Regional

40. A ________ is offered by a manufacturer to trade-channel members if they will perform

certain functions, such as selling, storing, and record keeping.
A. Functional discount
B. Quantity discount
C. Actual discount
D. Cash discount

41. ________ occurs when a company sells a product or service at two or more prices that do not
reflect a proportional difference in costs
A. Psychological pricing
B. Loss-leader pricing
C. Product-form pricing
D. Price discrimination

42. Supermarkets such as Shoprite often drop the price on well-known brands to stimulate store
traffic. This is known as ________.
A. Loss-leader pricing
B. Special-event pricing
C. Cost- profit pricing
D. Retail- demand pricing

43. Companies frequently adjust their basic price to accommodate differences in customers,
products, locations, and so forth. Examples of these differentiated prices include all of the
following except ________.
A. New product pricing
B. Customer-segment pricing
C. Product form pricing
D. Channel pricing
44. To maximize market share, a firm may use _____________ pricing as a strategy for pricing
its new products
A. Market-penetration
B. Market-skimming
C. Value pricing
D. Demand pricing

45. The most elementary pricing method is to add a standard ________ to the product’s cost.
A. target margin
B. target price
C. markup
D. margin

46. MH Ltd is introducing a new product to the market; in fact, MH Ltd is the first to offer this
new product to the marketplace. In developing the pricing strategy, it was decided that the
price of the product should be at the maximum the market would bear. This is an example of
______________ strategy
A. Product differentiation pricing
B. Product-quality leadership
C. Market-skimming pricing
D. Market-penetration pricing

47. Timange Instruments builds a large plant to produce a great quantity of products, hoping that
as prices decline, sales volume increases and thus costs decline. This market-penetration
pricing is dependent upon three conditions existing in the marketplace. Which one of the
following is not one of these conditions?
A. Low price discourages competition from entering the market.
B. Production and distribution costs actually fall with increases in production.
C. Low prices do not increase consumer demand but increases retailer competition.
D. The market is stimulated by lower prices and is highly price sensitive.

48. KTT Dairy Ltd increased the price of one litter of milk by K5.00. Consumers noticed this
increase and immediately switched to other suppliers. This means that _____________
A. Customers are most sensitive to products that are bought frequently.
B. Customers are less sensitive to products that are disposable
C. Customers are most sensitive to food products that are perishable
D. Customers are most sensitive to grocery products that are organic

49. When the insurance industry recently announced a heavy price increase in the cost of term
life insurance, sales of this type of insurance did not decrease. This means that __________
A. Customers are less sensitive to service products.
B. Insurance sales reps are able to sell their products.
C. Insurance demand is unitary.
D. Consumers are price insensitive
50. Given that the variable costs are MK10 per unit, fixed costs are MK300, 000, and expected
sales are 50,000units. What is the cost per unit?
A. MK16.00
B. MK6.00
C. MK20.00
D. MK10.00

51. The formula for the break-even calculation is ________.

A. (Price – variable costs)÷fixed costs
B. (variable costs – price)÷fixed costs
C. Fixed costs÷(price – variable costs)
D. Fixed costs÷(variable costs – price)

52. Florida hotels discount the cost of their hotel rooms during the hot summer months. On the
other hand, during the winter months, the price of these rooms increases. This is an example
of _____________ discounts.
A.Seasonal
B. Functional
C. Quantity
D. Allowance

53. ____________ is composed of individuals and households who buy goods and services for
personal consumption.
A. The target market
B. A market segment
C. The consumer market
D. The ethnographic market

54. According to the stimulus-response model of buyer behavior, the place where consumers
process marketing stimuli prior to making a purchase decision is called the __________
A. Consumer’s value chain
B. Consumer’s black box
C. Consumer’s cognitive schema
D. Consumer’s thoughts-emotions network

55. Groups which have a direct influence and to which a person belongs are called:
A. Membership groups
B. Facilitative groups
C. Bonding groups
D. Social groups
56. As a form of a reference group, the _______________ are ones to which the individual
wishes to belong.
A. Secondary groups
B. Facilitative groups
C. Primary groups
D. Aspirational groups

57. The __________________ is a person within a reference group who, because of special
skills, knowledge, personality, or other characteristics, exerts influence on others.
A. Social role player
B. Opinion leader
C. Referent actor
D. Facilitator

58. Which of the following is not one of the five stages of the buyer decision process?
A. Brand identification
B. Need recognition
C. Information search
D. Purchase decision

59. In which stage of the buyer decision process model does Cognitive dissonance occur?
A. Need recognition
B. Information search
C. Postpurchase conflict
D. Evaluation of alternatives

60. The business marketer normally deals with __________ than the consumer marketer does.
A. Far fewer but far larger buyers
B. Far greater but smaller buyers
C. Far greater and larger buyers
D. Far fewer and smaller buyers

SECTION B: TRUE OR FALSE QUESTIONS.

SECTION INSTRUCTIONS:
THIS SECTION CARRIES 10 MARKS
EACH QUESTION CARRIES ONE MARK.
ANSWER ALL QUESTIONS IN THIS SECTION.
INDICATE WHETHER THE SATEMENT IN THIS SECTION IS TRUE OR FALSE BY
INDICATING A FOR TRUE AND B FOR FALSE____________________________________
61. During the sales era (1920s- 1940s) supply exceeded demand.
A. True.
B. False.
62. Management of demand involves making it easy for customers to buy products.
A. True.
B. False.

63. The marketing concept assumes that if customers are left alone, they will not buy enough
products.
A. True.
B. False.

64. Your department holds that achieving organizational goals depends on knowing the needs and wants
of target markets and delivering the desired satisfaction better than competitors do. Your department
is practicing the selling concept.
A. True.
B. False.

65. Amy's law office has developed a new format and wording for wills. The staff believes they offer the
most in quality, performance, and innovative features. Her law office is practicing the production
concept.
A. True.
B. False.

66. An experience such as a vacation can be defined as a market offering.

A. True.
B. False.

67. Human needs are shaped by culture and individual personality.

A. True.
B. False.

68. The production concept and product concept are orientations that are more likely to lead to marketing
myopia than the marketing concept and the societal marketing concept are.
A. True.
B. False.

69. The societal marketing concept calls on marketers to balance consumer wants and desires, company
profits, and society's interests.
A. True.
B. False.

70. The marketing mix includes production, price, promotion, and packaging; they are known as the four
Ps of marketing.
A. True
B. False
71. Industrial goods can be classified in terms of how they leave the production system.
A. True
B. False

72. A “service” is defined as any act or performance that one party can offer to another that is
essentially intangible and does not result in the ownership of anything.
A. True
B. False

73. A hybrid service consists of unequal parts of goods and services, with services being in the
majority.
A. True
B. False

74. An example of a pure service provider might be for example a restaurant.

A. True
B. False

75. Services have five distinctive characteristics, one of these five being “pure service.”
A. True
B. False

76. Intangibility with regards to a “service” means that the service cannot be duplicated across
providers.
A. True
B. False

77. Service companies try to demonstrate their service qualities through physical evidence and
presentation.
A. True
B. False

78. Inseparability in the context of a “service” means that the service provider and the service
customer/consumer cannot be separated since one effects another.
A. True
B. False

79. Price is one of the two elements of the marketing mix that produces revenue.
A. True
B. False

80. Many consumers use price as an indicator of quality and value.

A. True
B. False
SECTION C: STRUCTURED QUESTIONS
SECTION INSTRUCTIONS:
THIS SECTION CARRIES TWENTY MARKS (20 MARKS)
ANSWER ALL QUESTONS IN THIS SECTION.
MARKS ALLOCATION ARE INDICATED ON EACH QUESTION _____________________

81. Briefly discuss four dimensions of non-profit marketing. (4 Marks)

 Planning-nonprofit marketers develop plans to help the nonprofit organisation achieve
its strategic goals; that is, to fulfill its mission.
 Positioning- A nonprofit organization's first task in competing for donations is becoming
well-known to the community it serves
 Communication- Communication is a key marketing activity that enables the
organization to achieve many of its marketing goals.
 Resource Attraction -refers to attracting donations of time and funds.

82. There are five concepts in marketing, briefly discuss four. (4 Marks)
 Product concept
 Product concept
 Selling concept
 Marketing concept
 Social marketing concept

83. List down four major promotion tools. (4 Marks)

 Advertising
 Sales promotion
 Public relations
 Personal selling
 Direct marketing

84. Briefly explain two basic promotion tools strategies. (4 Marks)

 Push strategy - A promotion strategy that calls for using the sales force and trade
promotion to push the product through channels.
 Pull strategy -A promotion strategy that calls for spending a lot on advertising and
consumer promotion to build up consumer demand.

85. Briefly discuss the following strategies. (4 Marks)

 Product mix - the total group of products that an organization makes available to
customers/ sum of all total products and variants of products that are offered by a firm
 Product line- a group of closely related product items viewed as a unit because of
marketing, technical, or end user considerations.
 Product mix width- number of product lines the company carries
 Product line depth- number of all variants in each item within the product line
SECTION D: ESSAY QUESTIONS
SECTION INSTRUCTIONS:
THIS SECTION CARRIES 60 MARKS.
EACH QUESTION CARRIES 20 MARKS.
ANSWER TWO QUESTIONS IN THIS SECTION.
THE FIRST QUESTION (86) IS COMPULSORY, AND CHOOSE ANY OTHER TWO IN
THIS SECTION________________________________________________________________
86. Explain how the marketing mix should be changed during the various stages of the
product life cycle.

Four Product Life Cycle Stages:

 Entry or Introduction Stage:
o Launch new product.

o Develop the market for the product.

o Build brand awareness. Advertise.

o Trademark or patent the new product if necessary.

o Consider your pricing strategy: should it be a low price to quickly gain market
share; or a high price if limited competition and high cost to bring to market:

o Target Marketing distribution, place or location based on your market

research: target the easiest market to enter first; you want to have early and fast
wins.

o Promotional materials are developed to inform and gain awareness,

understanding and acceptance of the product. Focus on an audience that likes
to be an early adopter.

 Growth Stage:

o Focus on growing market share.

o Increase brand preference: focus on product features, advantages and benefits.

o Product quality must be good. Awareness of quality focus must be a

communication message.
 o As product demand grows, stabilize pricing and ensure that the cost/price
relationship is valid AND also supported by the market. At this stage (for new
products specifically) you will have an advantage over your competition and
price will not be as sensitive as in later stages.

o Enter additional markets. Your product, and its brand, will be gaining
recognition and will receive easier acceptance. Demand will increase.

o Promotional materials are focused on the broader, more expanded market (and
audience).

 Mature Stage:

o Small business sales growth starts to slow down. Focus on holding on to market
share and making as much profit as possible.

o Competitors have caught up to you and your product.

o Define and refine what is unique about your product: unique value proposition
and strong product differentiation andproduct positioning (or re-positioning). If
possible, and/or necessary, add new, different and unique features and benefits
to your product.

o Pricing may be impacted by competitive activity. Develop alternative competitive

strategy to cutting price for as long as possible.

o Distance to market may begin to cost in time and money. Look for alternatives:
open a branch closer to the big markets, or the smaller less competitive
markets; can the product be sold online? Expand your market reach.

o Promotional materials are focused on the unique value proposition, new

features and benefits and other product differentiation.

 Declining Stage:

o Your product has become a commodity. Typically at this stage, competition is

fierce and you can only continue to win if you are the lowest cost provider.

o Consider carefully if you wish to continue with this product if cannot compete
effectively.
 o Look at ways to reduce product costs.

o Look at ways to improve or change the product.

o Understand your customers and your competition very well during this stage:
Develop your marketing research plan. Is market demand dying? Do
your competitive intelligence and analyze your competition in business. Can
your competitors be more efficient at producing the product than you? Don't
hang on to the product for emotional reasons but also don't let go of the
product too soon.

87. Discuss the sales promotion methods that can be used by a manufacturer of dishwashing
liquid.

 To increase the sale of dishwashing liquid manufactures adopt different measures like
sample, gift, bonus, and many more. These are known as tools or techniques or
methods of sales promotion.

 Free samples: a marketer can distribute free samples of the dishwashing liquid to
customers. Sometimes these free samples are also distributed by the shopkeeper even
without purhasing any item from his shop. These are distributed to attract consumers
to try out the product and thereby create new customers.

 Premium or Bonus offer: a marketer can give out a kitchen towel to everyonr who
buys dishwashing liquid. This is effective in inducing consumers to buy the product.
This is also useful for encouraging and rewarding existing customers.

 Price-off offer: Under this offer, products are sold at a price lower than the original
price. This type of scheme is designed to boost up sales when demand has dropped
and sometimes while introducing a new product in the market.

 Coupons: Sometimes, coupons can be issued by manufacturers of dishwashing liquid

through an advertisement printed in the newspaper. These coupons can be presented
to the retailer while buying the product. The holder of the coupon gets the product at
a discount.

88. Using relevant examples, explain the concept of market diffusion.

 The diffusion process describes how an innovation spreads through a market
 Provides information that enables management to identify target markets
marketer must recognize that people differ greatly in their readiness to adopt new
products

There are five market segments that are distinguished by the time consumers take to adopt a new
product

 Diffusion of Innovations: Innovator Stage Roger's Diffusion of Innovations theory

states that Innovators are the first to purchase a product and make up 2.5% of all
purchases of the product. Innovators purchase the product at the beginning of the life
cycle. They are not afraid of trying new products that suit their lifestyle and will also pay
a premium for that benefit. Sales to innovators are not usually an indication of future
sales as innovators simply buy because the product is new.
 Diffusion of Innovations: Early Adopters Stage The next group of purchasers are called
Early Adopters and they make up 13.5% of purchases. This group of purchasers adopt
early but unlike innovators, adoption is after careful thought. Early Adopters are usually
opinion leaders in their circle (of friends, family and colleagues) so adoption by this
group is crucial for the success of the product. Early adopters help the product's journey
in becoming "socially acceptable".
 Diffusion of Innovations: Early Majority Stage The Early Majority are a cautious
group of purchasers, making up 34% of purchases. The Diffusion of Innovations theory
states that this group will not buy a product until it has become "socially acceptable".
Early majority purchases are needed for the product to achieve wide spread acceptance.
 Diffusion of Innovations: Late Majority Stage Late Majority make up another 34% of
sales and they usually purchase the product during the late stages of the product's life
cycle. They are more cautious than the early majority and will only buy after the majority
of people have purchased the product.
 Diffusion of Innovations: Laggard Stage According to the Diffusion of Innovations
theory the final group of people to purchase a product are called Laggards. Laggards
make up 16% of total sales and purchase the product near the end of its life. Some
laggards will never purchase a product, whilst others will buy it because their existing
product is broken and it cannot be repaired or replaced with an identical product.
Laggards may wait to see if the product will get cheaper and by the time they purchase
the product a new version of the product is often on the market.
89. Analyze four advantages of branding and explain how they contribute to competitive
advantage?

Advantages of branding

Branding is very important for a company to distinct its products and services from others.
Branding is not only important to the owner but also important to consumers and retailers.

According to Brassington & Pettitt (2006) the benefits of branding are following,
 To the consumers;

 Consumer can easily identify the products as they are distinctive. For example, a G
Star Jeans is easily distinguishable from H&M, Next or Zara’s Jeans because G Star
puts their sign or name (96, G Star) on the pocket.
 Advantage of branding includes giving consumers a sense of feeling. For example, if
someone buys an Armani watch he/she feels prestige.
 It reduces risk in purchasing because consumer knows the quality, features and other
benefits of products without using it.
 Helps to have quick buying decision because brand attracts consumers.
 To the owners;

 Advantage of branding from companies perspective include that they can charge
premium price. For example, Next plc, Armani, Lactose, Harrods etc charges
premium price because they have strong brand name.
 Branding gives opportunity to the company for line extension through building on the
consumer’s perception of the values and character represented by the brand name.
 It helps owners to create consumer loyalty as it gives value to the consumers what
they pay for.
 To the intermediaries;

 Branded items make easier for the suppliers to process the orders and track down
problems.
 Retailers are happy to sell branded products because they are good seller.
 In terms of Jobber and Fahy (2006) branding helps to enhance,

 Company’s value.
 Consumer preference and loyalty.
 Barrier to competition.
 Company’s value

 Jobber & Fahy (2006) argue that strong brands can enhance the financial value of
companies. For example, Nestle paid £2.5bn for Rowntree (a UK confectionary
manufacturer). As a result, the acquisition gave Nestle access to Rowntree’s stable of
brands including Kit Kat, Quality Street they added.

 Solid brand name increases company’s value because it differentiates the products or
services from competitors.
 Consumer preference and loyalty

 It’s very hard to have customer loyalty in such competitive market where everyone is
trying to lock in customers by giving loyalty cards. When consumers get satisfied with
products or services what they pay for, they become brand loyal and stick to the same
brand. For example, Tesco recorded a 5.9% rise in sales to £21.8bn in the UK and 5%
profit increase to £1.2bn for the six months ending 28th August 2010 (Baker 2010). It
clearly shows that Tesco has been able to create the customer loyalty with their strong
brand name.

 Barrier to competition

 Company can create barriers for competitors by its brand if the brand is powerful. For
example, Apple has been able to set bars over its competitors Nokia, Samsung, Motorola
etc by its innovative technology and brand strength. When Apple launched ipad2,
Britain’s most popular magazine Fortune said that Apple is the world’s most admired
company and the company’s blistering pace of new product releases has continued to set
the bar high for tech companies across the board (Fortune 2011). It has been so easy for
Apple to be the world’s most admired company for its great innovations and established
brand.