Marketing Management Chap 13
93) Which of the following is a benefit of product mapping? A) studying market matrices B) integrating target markets C) identifying market segments D) educating consumers E) integrating target matrices
C
70) What is the significance of design for a company's products and services? What are the advantages of a good design?
Design offers a potent way to differentiate and position a company's products and services. Design is the totality of features that affect how a product looks, feels, and functions to a consumer. Design offers functional and aesthetic benefits and appeals to both our rational and emotional sides. The designer must figure out how much to invest in form, feature development, performance, conformance, durability, reliability, reparability, and style. To the company, a well-designed product is easy to manufacture and distribute. To the customer, a well-designed product is pleasant to look at and easy to open, install, use, repair, and dispose of. The designer must take all these factors into account. Design can shift consumer perceptions to make brand experiences more rewarding. Design should penetrate all aspects of the marketing program so that all design aspects work together.
39) ________ is the ability of a company to prepare on a large-scale basis individually designed products, services, programs, and communications. A) Mass customization B) Reverse engineering C) Interoperability D) Backward compatibility E) Benchmarking
A
84) A(n) ________ is defined as a distinct unit within a brand or product line distinguishable by size, price, appearance, or some other attribute. A) stock-keeping unit B) inventory turn C) individual brand D) product type E) brand line
A
99) A manufacturer of hiking boots looks at data that indicate that their subsegment of the market called "serious hiker" is declining and is predicted to decline into the future. The firm decides to enter the "low-price" segment with its new items. This is an example of a firm's ________ to reach a new market. A) down-market stretch B) up-market stretch C) two-way stretch D) marketing research E) disintermediation
A
108) Purchasers of theatre tickets receive a 20 percent discount if they purchase and pay for the full season at one time. This is an example of what type of product-mix pricing? A) mixed bundling B) pure bundling C) cross-promotion D) captive pricing E) two-part pricing
A
11) Because ________ are purchased frequently, marketers should make them available in many locations, charge only a small markup, and advertise heavily to induce trial and build preference. A) nondurable goods B) durable goods C) services D) unsought goods E) specialty goods
A
136) The potential disadvantages of ________ are the risks and lack of control from becoming aligned with another brand in the consumers mind. Consumer expectations about the level of involvement and commitment are likely to be high, so unsatisfactory performance could be very negative for the brands involved. A) co-branding B) cannibalization C) vertical integration D) disintermediation E) brand stretching
A
38) Many products can be differentiated in terms of their ________, which is its size, shape, or physical structure. A) form B) prototype C) architecture D) model E) blueprint
A
5) The way the user performs the tasks of getting and using products and related services is the user's total ________. A) consumption system B) consumable system C) consistent use system D) augmented system E) potential system
A
65) Realizing that although household products is a huge category — taking up an entire supermarket aisle or more — it is an incredibly boring one, the founders of Method Products designed a sleek, uncluttered dish soap container that also carried functional advantages, such as ease of dispensing soap and cleaning. Method is competing in the crowded market for household products on the basis of superior ________. A) design B) durability C) conformance D) reliability E) performance quality
A
71) The common denominators of luxury brands are quality and ________. A) uniqueness B) practicality C) global appeal D) contemporary E) goodwill
A
74) ________ has overtaken the United States as the world's largest luxury market; it's forecast that one-third of all high-end goods will be sold there in the coming years. A) China B) India C) South Africa D) Brazil E) South Korea
A
79) Which company launched Eco-Fina packaging for its water? A) PepsiCo B) Coca-Cola C) SodaStream D) PURE E) Sigg Switzerland
A
89) The ________ of the product mix refers to how closely related the various product lines are in end use, production requirements, distribution channels, or some other way. A) consistency B) depth C) width D) length E) composition
A
98) Companies may wish to implement a(n) ________ to achieve more growth, to realize higher margins, or simply to position themselves as full-line manufacturers. A) up-market stretch B) rebranding plan C) outsourcing strategy D) disintermediation policy E) vertical integration strategy
A
43) Ideal ________ would exist if users could fix the product themselves with little cost in money or time. A) durability B) reliability C) style D) design E) reparability
E
157) Sellers must label their products. Labels serve many purposes beyond just "naming" the product. List the additional services provided by a product's label.
A label identifies the product; a label might also grade the product; a label might describe the product; and the label might promote the product. A label may contain information required by law.
127) You have been asked to create a product system for your company's personal digital assistant. Before starting, you must define the term product system to the engineers to enable them to start design and production of the aligned items. Define the concept of a product system.
A product system is a group of diverse but related items that function in a compatible manner.
34) A manufacturer is contemplating introducing a product that is inferior to its competition in its performance, design, and functionality. However, the manufacturer believes that "good brand marketing" can overcome these shortfalls. Why is this thinking incorrect?
At the heart of a great brand is a great product, the product is a key element in the market offering. Customers will judge the product (offering) on three basic elements: product features and quality; services mix and quality, and price. Not having a competitive product cannot be overcome by marketing.
134) Betty Crocker cake mixes using Hershey syrup in its mixes and "Lunchables" lunch combinations with Taco Bell tacos are examples of what special type of branding? A) family branding B) ingredient co-branding C) co-branding D) generic branding E) individual branding
B
137) ________ branding is a special case of co-branding involving creating brand equity for materials, components, or parts that are necessarily contained within other branded products. A) Cross B) Ingredient C) Equity D) Family E) Generic
B
14) What goods are similar in quality but different enough in price to justify shopping comparisons? A) emergency goods B) homogeneous shopping goods C) heterogeneous shopping goods D) specialty goods E) convenience goods
B
145) ________ are formal statements of expected product performance by the manufacturer. A) Insurance B) Warranties C) Bonds D) Invoices E) Balance sheets
B
66) In increasingly fast-paced markets, price and technology are not enough. ________ is the factor that will often give a company its competitive edge and is defined as the totality of features that affect how a product looks, feels, and functions in terms of customer requirements. A) Conformance B) Design C) Performance D) Reliability E) Style
B
7) How a consumer shops for organic foods and how he or she uses and disposes of the product is part of the consumers' ________ that is important for marketers to consider. A) value proposition B) consumption system C) value system D) quality perception E) value chain
B
73) The brand promise for ________ is "the product you buy is of highest esteem, based on its timeliness, elegant design and the high quality, which is derived from the excellence of our craftsmen." A) Hermés B) Montblanc C) Patrón D) Sub-zero Refrigerators E) Armani
B
1) A ________ is anything that can be offered to a market to satisfy a want or need, including physical goods, services, experiences, events, persons, places, properties, organizations, information, and ideas. A) function B) product C) benefit D) process E) structure
B
10) Which of the following are tangible goods that normally survive many uses? A) generic goods B) durable goods C) core benefits D) convenience goods E) unsought goods
B
100) Marriott Corporation now contains hotels and motels from the "budget" end of the consumer spectrum to the "premium" end with their JD Marriott flagship locations. This is an example of a firm that successfully performed a(n) ________ to reach more consumers and ventures that are more profitable. A) upstream integration B) two-way stretch C) up-market stretch D) down-market stretch E) downstream integration
B
105) When shopping for tires for your automobile, you notice that the manufacturer you have selected has tires for your car priced low, average, and high, based upon performance and features. This is an example of what type of product-mix pricing? A) two-part pricing B) product-line pricing C) captive product pricing D) market pricing skimming E) price discrimination
B
144) Which of the following factors is one of the contributors to the growing use of packaging as a marketing tool? A) consumption aid B) consumer affluence C) consumer influence D) conformance qualities E) brand identification
B
146) Many sellers offer either general or specific guarantees. Guarantees reduce the buyer's ________ risk. A) actual B) perceived C) real D) implied E) stated
B
15) Products such as insurance, cemetery plots, and smoke detectors are examples of ________ goods that are products that the consumer does not know about or does not normally think of buying. A) specialty B) unsought C) heterogeneous shopping D) homogeneous shopping E) convenience
B
41) If the Ford GT is designed to accelerate to 50 miles per hour within 10 seconds, and every Ford GT coming off the assembly line does this, the model is said to have high ________. A) reliability B) conformance quality C) durability D) compatibility E) interoperability
B
42) ________ describes the product's look and feel to the buyer; it has an advantage of creating distinctiveness that is difficult to copy. A) Design B) Style C) Durability D) Conformance E) Reliability
B
6) Marketers must see themselves as benefit providers. For example, when a shopper purchases new shoes, he or she expects the shoes to cover his or her feet and allow him or her to walk unobstructed. This is an example of what level in the consumer-value hierarchy? A) pure tangible good B) basic product C) augmented product D) potential product E) generic product
B
75) Which of the following is NOT one of the guidelines for managing luxury brands? A) Besides brand names, other brand elements — logos, symbols, packaging, signage — can be important drivers of brand equity for luxury products. B) Secondary associations from linked personalities, events, countries, and other entities should be avoided. C) Luxury brands must employ a premium pricing strategy, with strong quality cues and few discounts and markdowns. D) All aspects of the marketing program for luxury brands must be aligned to ensure high-quality products and services and pleasurable purchase and consumption experiences. E) Luxury brands must carefully control distribution via a selective channel strategy.
B
85) A ________ is the set of all products and items a particular seller offers for sale. A) product line B) product mix C) product extension D) product system E) product class
B
88) A consumer products firm manufactures and sells over 200 different sizes and varieties of jams and jellies. We can say that this manufacturer's product mix has high ________. A) consistency B) depth C) intensity D) range E) width
B
90) The ________ of the product mix refers to the total number of items in the mix. A) width B) length C) depth D) breadth E) range
B
94) Product-line analysis provides information for two key decision areas: product-line length and ________. A) product-class composition B) product-mix pricing C) product pricing D) popular pricing E) product-need family
B
102) If line filling is overdone, it could result in ________ and customer confusion. A) sales paralysis B) manufacturing inefficiencies C) cannibalization D) disintermediation E) ineffective management
C
109) When Mercedes successfully introduced its C-Class cars at $30,000 without injuring its ability to sell other Mercedes cars for $100,000, it was an example of a successful ________. A) two-way stretch B) line pruning C) down-market stretch D) up-market stretch E) choice reduction
C
4) When companies search for new ways to satisfy customers and distinguish their offering from others, they look at the ________ product, which encompasses all the possible augmentations and transformations of the product. A) consumption B) expected C) potential D) augmented E) basic
C
96) A company positioned in the "middle" market introduces a lower-priced product line. What type of line-stretching is this? A) home stretch B) up-market stretch C) down-market stretch D) maintenance stretch E) two-way stretch
C
101) A product line can also be lengthened by adding more items within the present range. There are several motives for line filling. Which of the following is one of them? A) responding to senior management wishes B) responding to consumer wishes C) reaching for incremental profits D) reaching for incremental capacity E) responding to sales-force demands
C
92) The ________ of a product mix refers to how many variants are offered of each product in the line. A) width B) length C) depth D) consistency E) height
C
103) Price-setting logic must be modified when the product is part of a product mix. In that case, the firm searches for a set of prices that ________ profits on the total mix. A) is ineffective on total B) has no effect on total C) maximizes D) minimizes E) capitalizes upon
C
104) Companies normally develop ________ rather than single products and require sellers to establish perceived quality differences between price steps within it. A) product mix B) captive products C) product lines D) optional products E) average products
C
133) McDonald's restaurants inside Walmart stores and Starbucks inside Super Targets are examples of ________, whose main advantages are that the products can or may be convincingly positioned by virtue of the associated brands. A) cooperative marketing B) cross-promotion C) retail co-branding D) ingredient branding E) feature promotion
C
135) The main advantage of co-branding is that a product may be convincingly positioned by virtue of the ________ involved. A) branding synergy B) increased advertising dollars C) multiple brands D) bundled package E) pure bundling
C
143) We define packaging as all the activities of designing and producing the container for a product. This includes up to three levels of material: primary package, secondary package, and ________ package. A) retailer B) design C) shipping D) consumer E) supplier
C
3) The five product levels constitute a ________. At each level more customer value is added. A) product line B) business model C) customer value-hierarchy D) value grid E) demand chain
C
40) Buyers expect products to have high ________, which is the degree to which all produced units are identical and meet promised specifications. A) durability B) compatibility C) conformance quality D) form E) performance quality
C
erentiating on ________ is important for companies with complex products and becomes an especially good selling point when targeting technology novices. A) delivery B) ordering ease C) ease of installation D) customer consulting E) reparability
C
61) Distinguish between controllable returns and uncontrollable returns.
Controllable returns result from problems or errors by the seller or customer and can mostly be eliminated with improved handling or storage, better packaging, and improved transportation and forward logistics by the seller or its supply chain partners. Uncontrollable returns result from the need for customers to actually see, try, or experience products in person to determine suitability and can't be eliminated by the company in the short run through any of these means.
80) ________ found a highly creative way to address the problem of proliferating plastic bottles with its "Waste<Less" line and helped farmers grow cotton with less water for its "Water<Less" line. A) Calvin Klein B) Ralph Lauren C) Ferragamo D) Levi-Strauss E) Roberto Cavalli
D
13) It was sunny when Jenny went to class, but by the time class was over it was raining heavily, so Jenny stopped by the student store to buy an umbrella before she walked back to her dorm. In this case, the umbrella is an example of a(n) ________ good. A) impulse B) specialty C) homogeneous shopping D) emergency E) heterogeneous shopping
D
16) Capital items are long-lasting goods that facilitate developing or managing the finished product. They include two groups: installations and ________. A) natural products B) component materials C) operating supplies D) equipment E) processed materials
D
2) A customer judges a product offering by three basic elements: product features and quality, services mix and quality, and ________. A) performance B) utility C) tangibility D) price E) availability
D
37) Most products are established at one of four performance levels: low, average, high, or superior. For example, mountain bikes come in a variety of sizes and physical attributes. When a consumer purchases a mountain bike costing $1,000, he or she expects the bike to perform to specifications and to have a high ________, meeting the promised specifications. A) features B) conformance quality C) durability D) performance quality E) reliability
D
44) For ________ to be valued for products like vehicles and kitchen appliances, it should not be associated with an excessive price premium and the product must not be subject to rapid technological obsolescence. A) conformance quality B) performance quality C) reparability D) durability E) style
D
45) When the physical product cannot be easily differentiated, the key to competitive success may lie in adding valued services and improving their quality. The main service differentiators are ordering ease, delivery, installation, ________, customer consulting, maintenance, and repair. A) technology intensity B) responsiveness C) ease of use D) customer training E) adaptability
D
49) ________ describes the service program for helping customers keep purchased products in good working order. A) Returns B) Ordering ease C) Installation D) Maintenance and repair E) Delivery
D
8) The sellers of ________ goods carry a wide assortment to satisfy individual tastes. They must have well-trained salespeople to inform and advise customers. A) unsought B) specialty C) convenience D) heterogeneous shopping E) generic
D
9) Marketers have traditionally classified products on the basis of three characteristics: ________, tangibility, and use. A) availability B) affordability C) aesthetics D) durability E) necessity
D
97) Moving ________ carries risks. The new brand can cannibalize core brand sales and lower the core brand's quality image. A) up-market B) two ways C) one way D) down-market E) out-market
D
132) Outline three guidelines for correctly implementing a bundling strategy.
Do not promote individual products in a package as frequently and cheaply as the bundle. Second, limit promotions to a single item in the mix if you still want to promote individual products. Third, if you decide to offer large rebates on individual products, it must be the absolute exception and done with discretion.
17) ________ are major purchases and are usually bought directly from the producer with the typical sale preceded by long negotiation periods. A) Raw materials B) Materials and parts C) Processed materials D) Capital goods E) Installations
E
46) Delivery refers to how well a product or service is brought to the customer. It includes speed, ________, and care throughout the delivery process. A) expedience B) intensity C) tangibility D) performance E) accuracy
E
106) Some service firms often engage in ________, consisting of a fixed fee plus a variable usage fee. A) pure bundling B) pure pricing C) mixed pricing D) captive pricing E) two-part pricing
E
107) In ________, the seller offers goods both individually and in bundles and often charges less for the "bundle" than for the individual products. A) pirating pricing B) captive pricing C) two-part pricing D) pure bundling E) mixed bundling
E
110) Gillette uses ________ pricing when it offers razor handles at a low cost, but places a high markup on the replacement razor blades that fit in the handles. A) optional feature B) two-part C) by-product D) product line E) captive-product
E
12) What types of goods are purchased frequently, immediately, and with minimum effort by the consumers? A) specialty goods B) shopping goods C) unsought goods D) durable goods E) convenience goods
E
147) Guarantees are most effective in two situations. The first is when the company or products are not well known. The second is when the product's quality is ________ to competition. A) not known B) different C) inferior D) equivalent E) superior
E
47) ________ refers to data, information systems, and advice services that the seller offers to their buyers. A) Sales force relationships B) Customer relationships C) Open source technology D) Customer training E) Customer consulting
E
50) Which of the following actions would result in the elimination of uncontrollable returns of products in the short run? A) improved handling B) better packaging C) improved transportation D) proper storage E) cannot be eliminated
E
51) Smith & Adams Poultry has recently upgraded its transactional model such that its customers (restaurants and hotels) can communicate with its central supply system to indicate purchase volumes, dates, and receive confirmation, through their computer terminals. This is an example of a company differentiating itself versus competition in terms of ________. A) customer relationships B) customer training C) installation D) delivery ease E) ordering ease
E
72) A winning formula for many ________ brands is craftsmanship, heritage, authenticity, and history, often critical to justifying a sometimes extravagant price. A) design B) nondurable C) durable D) ingredient E) luxury
E
83) A group of products within a product class that are closely related because they perform a similar function, are sold to the same customer groups, are marketed through the same outlets or channels, or fall within given price ranges is known as a ________. A) product type B) product class C) need family D) product variant E) product line
E
86) Happy Home Products produces detergents, toothpaste, bar soap, disposable diapers, and paper products. This company has a product ________ of five lines. A) type B) length C) class D) mix E) width
E
87) Using the ________ level of the product hierarchy to market its soups, Campbell Soups feature the company name first, then the soup variety on their packaging. A) product class B) product-type C) need-family D) product-family E) product-line
E
91) In offering a product line, companies normally develop a ________ and modules that can be added to meet different customer requirements. A) convenience item B) flagship product C) staple item D) potential product E) basic platform
E
95) What occurs when any company lengthens its product line beyond its current range? A) market overreach B) brand dilution C) product adaptations D) cannibalization E) line stretching
E
30) In planning its market offering, the marketer must address the five product levels of the customer-value hierarchy. Describe the "customer-value hierarchy" and identify the five levels of product contained within.
Each layer adds more customer value. The five levels are: 1. the core benefit — the service or benefit the customer is really buying 2. the basic product — the actual product that provides the core benefit 3. expected product — a set of attributes and conditions buyers normally expect when they purchase the product 4. the augmented product — the marketer exceeds customer expectations 5. the potential product — which encompasses all the possible augmentations and transformations the product or offering might undergo in the future These five elements constitute the buyers' consumption system.
114) The product-line length can be obtained by averaging the number of variants within the brand groups.
FALSE
121) Manufacturers of systems such as razors and ink jet printers use a system of pricing called "two-part pricing": one price for the disposable products and another for the "hardware."
FALSE
23) Durable products normally require less personal selling and service and less seller guarantees than nondurable goods.
FALSE
112) A product system is a group of diverse and unrelated items that does not function in a compatible manner and includes the product mix and product assortment.
FALSE
116) Companies in the "middle market" should never attempt to stretch their line in both directions.
FALSE
117) Line filling, if overdone, may result in self-cannibalization and increased customer loyalty.
FALSE
122) A pricing system in which there is a "fixed" fee and then a variable "usage" fee is called bundling.
FALSE
123) Pure bundling occurs when a firm offers goods both individually and in bundles.
FALSE
124) A buyer of the 2013 Subaru Outback 2.5i could pay extra for four-way passenger seats, an All-Weather package, and a power moon roof because Subaru was using captive-product pricing.
FALSE
140) If the variants within the Tide product under P&G's detergent line included Tide with Acti-Lift, Tide Plus Febreze Freshness Sport, Tide Plus Febreze, Tide Free, Tide Plus Downy, Tide Coldwater, Tide TOTALCARE, and Tide Free for Coldwater, and all were available in Pods, Liquids, Liquids for HE machines, and Powder formats, the width of the product mix would be 32 because there would be 32 distinct variants.
FALSE
152) Guarantees are most effective when the product is well known and/or similar in performance to other brands in the market.
FALSE
153) The Robinson-Patman Act, passed by Congress in 1967, set mandatory labeling requirements, encouraged voluntary industry packaging standards, and allowed federal agencies to set packaging regulations in specific industries.
FALSE
20) In planning its market offering, the marketer needs to address five product levels, each of which reduces customer value.
FALSE
21) The customer-value hierarchy consists of the basic product, core benefit, expected product, augmented product, and the consumption system.
FALSE
24) Because they are intangible, durable goods normally require more quality control, supplier credibility, and adaptability than either services or nondurable goods.
FALSE
25) Carlos always buys bread and milk when he goes grocery shopping. In this case, bread and milk are examples of impulse goods.
FALSE
26) A Maserati sports car is considered a convenience good because interested buyers will travel far to buy one.
FALSE
29) Supplies can be classified as two kinds: heterogeneous supplies and homogeneous supplies.
FALSE
52) To be branded, physical products need not be differentiated.
FALSE
54) Firms should design the highest performance level possible for their products.
FALSE
55) As a selling point, durability commands a particularly high pricing premium, especially for products that are subject to rapid technological obsolescence, as are personal computers and video cameras.
FALSE
56) If the physical product cannot be easily differentiated, the key to competitive advantage lies in the pricing of the related "services" provided by the manufacturer.
FALSE
68) Apple has a clear design philosophy it calls "Design 3.0" and an internal design slogan, "Make it Meaningful," that reflects its relentless focus on making beautiful and intuitive products that will be integrated into customers' lifestyles.
FALSE
76) Competition for luxury brands must be defined narrowly.
FALSE
82) Colleges all over the country — from Western Washington University to Brown University, the University of Vermont, and the University of California at Berkeley — are encouraging the sale of plain bottled water.
FALSE
142) As the marketing manager for your firm, you have been approached by your key component manufacturer suggesting that your two firms "ingredient brand" a new item. What are some of the requirements for succeeding in ingredient branding?
First, the consumer must perceive that the ingredient matters to the performance and success of the product. Secondly, consumers must be convinced that not all ingredient brands are the same and that the ingredient is superior. Third, a distinctive symbol or logo must clearly signal to consumers that the host product contains the ingredient. Fourth, a coordinated "pull" and "push" program must help consumers understand the importance and advantages of the branded ingredient.
159) What are the situations in which guarantees are most effective?
Guarantees are most effective when either the company or the product is not well known, so a "money-back" guarantee in that case would reduce the buyer's perceived risk and provide them with confidence in purchasing the product. The second area is when the product/service is superior to competition in quality and performance.
158) What is the importance of guarantees?
Guarantees reduce the buyer's perceived risk. They suggest that the service/product is of high quality and that the company and its service performance are dependable.
36) Industrial-goods classifications based on terms of how the products enter the production process and their relative costs include such segments as materials and parts and capital items. Window cleaning services, consumable office supplies, personal computers, desks, paint, nails, and buckets are included in the classifications of industrial goods. List the other "classifications" including subclassifications for industrial goods.
Industrial-goods classifications include material and parts, farm products, natural products, manufactured materials and parts, and component parts. Capital goods include installations and equipment. Supplies and business services include maintenance and repair items, operating supplies, and business advisory services.
129) Explain the concept of line stretching and the three uses for it.
Line stretching occurs when a company lengthens its product line beyond its current range. It includes down-market stretch (introduce a lower-priced line), up-market stretch (introduce an upscale line), or two-way stretch (introduce both an upscale line and a down-scale line).
128) You have been asked to prepare a product-line analysis for your company's stable of products. Why is it important for product-line mangers to do a product-line analysis?
Product-line managers need to know the sales and profits of each item in their line in order to determine which items to build, maintain, harvest, or divest. They also need to understand each product line's market profile.
131) During a meeting, you were asked by the VP of Marketing to comment on the company's pricing strategy for its products. Recalling your marketing management course in college, your comments define the six situations involving product-mix pricing. List these six product-mix pricing strategies.
Product-mix pricing includes product-line pricing, optional-feature pricing, captive-product pricing, two-part pricing, by-product pricing, and product-bundling pricing.
62) To be branded, products must be differentiated. List the possible ways that physical products can be differentiated.
Products can be differentiated according to form, features, customization, performance quality, conformance quality, durability, reliability, reparability, and style.
149) Labels can identify the product and must contain legal statements that under various Federal laws cannot be misleading, false, or deceptive.
TRUE
77) In the aftermath of a crippling recession, luxury for many has become more about style and substance, combining personal pleasure and self-expression.
TRUE
111) The product hierarchy stretches from basic needs to particular items that satisfy those needs.
TRUE
113) The four product-mix dimensions (length, width, depth, consistency) permit the company to expand its business.
TRUE
115) Every company's product line covers a certain part of the total possible range of products and consumer levels.
TRUE
118) In the rapidly changing market of today's world, product lines must be continuously updated or modernized.
TRUE
119) Price-setting logic must be modified when the product is part of a product mix.
TRUE
120) Companies normally develop product lines rather than a single product and introduce price steps such as a low-, average-, and high-priced computer system.
TRUE
138) Co-branding is when two or more well-known existing brands are combined into a joint product and/or marketed together in some fashion.
TRUE
139) Ingredient branding can take on a form called "self-branding" in which the company advertises its own branded ingredients.
TRUE
141) Product line analysis provides information for two key decision areas — product line length and product mix pricing.
TRUE
148) Packaging includes the activities of designing and producing a container for a product.
TRUE
150) Warranties are formal statements of expected product performance by the manufacturer.
TRUE
151) A guarantee's greatest contribution to a product's success is that it decreases the buyer's perceived risk in the purchase of the product.
TRUE
18) Marketing planning begins with formulating an offering to meet target customers' needs or wants.
TRUE
19) A product is anything that can be offered to a market to satisfy a want or need.
TRUE
22) Marketers have traditionally classified products on the basis of characteristics such as durability, tangibility, and use.
TRUE
27) The homogeneity of natural materials limits the amount of demand-creation activity that producers undertake.
TRUE
28) Capital items are long-lasting goods that facilitate developing or managing the finished products.
TRUE
53) To avoid "feature fatigue," companies must be careful to prioritize those features that are included and find unobtrusive ways to provide information about how consumers can use and benefit from the feature.
TRUE
57) Customer training and customer consulting are two areas for service differentiation that manufacturers can use with their products.
TRUE
58) The cost of processing a return can be significantly greater than that of an outbound shipment.
TRUE
59) The ability to design custom jeans through Levi's and create merchandise with your own images through Zazzle are examples of mass customization.
TRUE
67) Design can shift consumer perceptions to make brand experiences more rewarding.
TRUE
69) Design thinking requires intensive ethnographic studies of consumers, creative brainstorming sessions, and collaborative teamwork to decide how to bring the design idea to reality.
TRUE
81) Environmental concerns matter to consumers, and they expect companies to make changes to address their concerns.
TRUE
31) The vast array of products that consumers buy can be classified on the basis of shopping habits and are broken down into four main areas. List these four main classifications of consumer goods and explain what elements are included within.
The four main areas are: 1. convenience goods are bought frequently, immediately, and with a minimum of effort 2. shopping goods are goods that the consumer characteristically compares on such bases as suitability, quality, price, and style 3. specialty goods have unique characteristics or brand identification for which a sufficient number of buyers are willing to make a special purchasing effort 4. unsought goods are those goods that the consumer does not know about or does not normally think of buying.
60) Describe the six main service differentiators.
The main service differentiators are ordering ease, delivery, installation, customer training, customer consulting, and maintenance and repair. 1. Ordering ease refers to how easy it is for the customer to place an order with the company. 2. Delivery refers to how well the product or service is brought to the customer. It includes speed, accuracy, and care throughout the process. 3. Installation refers to the work done to make a product operational in its planned location. Ease of installation is a true selling point for buyers of complex products like heavy equipment and for technology novices. 4. Customer training helps the customer's employees use the vendor's equipment properly and efficiently. 5. Customer consulting includes data, information systems, and advice services the seller offers to buyers. 6. Maintenance and repair programs help customers keep purchased products in good working order.
63) In your position as a marketing manager for a small industrial company, you have been asked by the president to help differentiate the company's product from its competitors. In reviewing your marketing management notes, you note that the text stated that physical products could be differentiated in nine ways. These nine areas comprise the "meat" of the memo you are writing to the president of your firm. What are the nine ways that physical products can be differentiated?
The nine ways that physical products can be differentiated are form, features, customization, performance quality, conformance quality, durability, reliability, reparability, and style.
156) In discussions with the packaging design team, you note that they do not have a firm design objective for the final package. In an internal memo to your boss, outline the objectives (both company and consumer oriented) that you wish to see implemented by the design team.
The objectives of packaging are to identify the brand; convey descriptive and persuasive information; facilitate product transportation and protection; assist at-home storage; and aid product consumption.
64) When a physical product cannot easily be differentiated, the key to competitive success may lie in adding valued services and improving quality. Identify the six main service differentiators.
The six main service differentiators are ordering ease, delivery, installation, customer training, customer consulting, and maintenance and repair.
33) Industrial goods can be classified in terms of how they enter the production process and their relative costliness. Identify the three groups of industrial goods.
The three groups of industrial goods include: 1. Materials and parts are goods that enter the manufacturer's product completely. Raw materials (farm and natural products) and manufactured materials and parts (component materials and component parts) compose this group. 2. Capital items are long-lasting goods that facilitate developing or managing the finished product, such as machinery (installations and equipment). 3. Supplies and business services are short-term goods and services that facilitate developing or managing the finished product; maintenance and repair and operating supplies are included here. Business supplies include advisory services and other "services" necessary for the ongoing operation of the business.
125) Explain the concepts of product-mix width, length, depth, and consistency.
The width of a product mix refers to how many different product lines the company carries. The length of a product mix refers to the total number of items in the mix. The depth of a product mix refers to how many variants are offered of each product in the line and is determined by dividing the total number of items by the number of lines. The consistency of the product mix refers to how closely related the various product lines are in end use, production requirements, distribution channels, or some other way.
126) Product-mix pricing can involve a number of pricing strategies for the brand manager. List each of these strategies and briefly define each.
There are six situations involving product-mix pricing: 1. product-line pricing — low-, medium-, and high-priced products within the same line, such as different priced ties 2. optional-feature pricing — charging for "extra" features, such as leather seats in a car 3. captive-product pricing — when the "user" has no choice but to use the high-priced "disposable" products that make the entire product work (for example, ink cartridges for printers) 4. two-part pricing — consisting of a fixed fee and a variable usage fee (cell phone usage) 5. by-product pricing — the price of the by-products of goods being used for other purposes (oil refining for example) 6. product-bundling pricing — pure bundling when the firm offers its products only as a bundle, or mixed bundling when the firm offers its products as a "bundle" and/or individually
155) Your research shows that over 53 percent of all purchases are made on impulse. As you sit down with your packaging design team, you tell them that the package must communicate many of the sales tasks. List the sales tasks that packaging must now incorporate due to the increase in self-service sales.
These tasks are: attract attention, describe the product's features, create consumer confidence, and make a favorable overall impression.
130) As the newest member of the marketing department, your immediate boss asks you to comment on the company's proposal to add two new shoes to the company's middle-of-the-road pricing and product-line strategies. The first pair will retail for $ 40 and has as its target market the "bargain" shopper. The second pair will retail for $200 and is targeted at the "sophisticated shopper." In relation to product-line strategy, what is the company trying to accomplish with these two new items?
This is an example of the company trying a "two-way stretch" — introducing products at both ends of the consumer market simultaneously.
35) Studying how consumers shop, how they use a particular product or service, and how they dispose of the product when consumed is important for marketers. This information forms the basis of product strategy. Define the consumption system and identify the two upcoming product strategies that are affected by this knowledge.
This is called the user's total consumption system, defined as the way the user performs the tasks of getting and using products and related services. This is important because it will contain information useful in the product-augmentation strategy and the potential product strategy.
78) What are the key guidelines for managing luxury brands?
• Maintaining a premium image for luxury brands is crucial; controlling that image is thus a priority. • Luxury branding typically includes the creation of many intangible brand associations and an aspirational image. • All aspects of the marketing program for luxury brands must be aligned to ensure high-quality products and services and pleasurable purchase and consumption experiences. • Besides brand names, other brand elements — logos, symbols, packaging, signage — can be important drivers of brand equity for luxury products. • Secondary associations from linked personalities, events, countries, and other entities can boost luxury-brand equity as well. • Luxury brands must carefully control distribution via a selective channel strategy. • Luxury brands must employ a premium pricing strategy, with strong quality cues and few discounts and markdowns. • Brand architecture for luxury brands must be managed carefully. • Competition for luxury brands must be defined broadly because it often comes from other categories. • Luxury brands must legally protect all trademarks and aggressively combat counterfeits.
32) You know that marketers have traditionally classified products based on characteristics of durability, tangibility, and use. You also know that each product type has an appropriate marketing-mix strategy attached. In analyzing your company's products, you decide to list each of these products and the appropriate marketing-mix strategy to understand where your products "fit." List these products and their appropriate marketing-mix strategies.
• Nondurable goods — the appropriate strategy is to make them available in many locations, charge only a small markup, and advertise heavily to induce trial and build preference. • Durable goods — tangible goods that normally survive many uses. Durable products normally require more personal selling and service, command a higher margin, and require more seller guarantees. • Services — intangible, inseparable, variable, and perishable products. They require more quality control, supplier credibility, and adaptability.
154) Various factors have contributed to the increased importance of packaging as a marketing tool. List and briefly describe these factors.
• Self-service — an increasing number of products are being sold without any personal interaction, on a self-service basis. • Consumer affluence — rising consumer affluence means consumers are willing to pay a little more for convenience, appearance, dependability, and prestige of better packages. • Company and brand image — packages contribute to instant recognition of the company or brand. • Innovation opportunity — innovative packaging can bring large benefits to consumers and profits to producers.