BA 370 Exam 2
The number of firms with which the seller needs to deal to get its merchandise to the consumer determines the complexity of a
channel The number of firms with which the seller needs to deal to get its merchandise to the consumer determines the complexity of a channel. In most developing countries, manufacturers must go through many types of distribution channels to get their products to end users.
One reason auto companies spend millions on racing cars is that they offer the opportunity to test new designs and technology under extreme conditions. Using the cars in a real-use setting provides an opportunity for ________ the product.
beta testing Beta testing uses potential consumers who examine the product prototype in a real-use setting to determine its functionality, performance, potential problems, and other issues specific to its use.
As soon as he saw one, Jose wanted a flat-screen television, but he was worried about making the wrong choice. He waited until there were alternatives in the market with lower prices and improved quality. Jose is part of the ________ diffusion of innovation group.
early majority The early majority group members don't like to take as much risk and therefore tend to wait until the bugs are worked out of a particular product or service.
Darlene has identified four potential market segments for her Don't Do It Yourself handyman service. The next step is to
evaluate the attractiveness of each segment.
A U.S. firm is analyzing its business prospects in China. Marketing executives understand which of the following to be true of this potential market?
China struggles with unequal economic distribution. China continues to suffer from drastically unequal economic distribution, which has led to a significant migrant workforce that subsists on part-time, low-paying jobs.
Alain is a sales representative for an established awnings manufacturer. Business is good, but he is concerned that the company has spent little on new product development and has not created a new product in over five years. Without new products, Alain can market his current products only to his current customers or
market the same products to similar customers. Without innovation, firms would have only two choices: to continue to market current products to current customers, or to take the same products to other markets. New product development opens up greater opportunities.
On the diffusion of innovation curve, the first group of buyers who want to be the first on the block to have the new product are known as early adopters.
false Early adopters are the second group of adopters of an innovation; innovators come first.
In training service providers, service quality goals should be general to allow for the various needs of consumers.
false Service quality goals should be SPECIFIC in order to deliver consistently services that meet customers' expectations.
The knowledge gap is where "the rubber meets the road," where the customer directly interacts with the service provider. Group startsTrue or False
false The delivery gap, not the knowledge gap, is where the rubber meets the road, where the customer directly interacts with the service provider.
Consumers might not realize that Philadelphia cream cheese and Jell-O products are made by the same company—Kraft. Philadelphia cream cheese and Jell-O are known as
individual brands.
Although marketers have found that psychographics are often more useful for predicting consumer behavior than demographics, psychographic segmentation
involves knowing and understanding self-values, self-concept, and lifestyles.
One of the benefits of a differentiated targeting strategy is that it allows the firm to diversify its business and
lower overall risk. Since a differentiated targeting strategy addresses multiple target markets, the firm can diversify its approach and potentially lower overall risk by not relying entirely on one target market. On the other hand, differentiated strategies can be expensive because of the need to communicate with multiple market segments.
A systematic ________ program collects customer inputs and integrates them into managerial decisions.
voice-of-customer Today, most service firms have developed voice-of-customer programs and employ ongoing marketing research to assess how well they are meeting their customers' expectations. A systematic voice-of-customer (VOC) program collects customer inputs and integrates them into managerial decisions.
ch 9
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Which BRIC country's economic growth in the 21st century can largely be attributed to the expansion of its literate population and the impositions of social programs that have allowed more than half of its 201 million citizens to enter the middle class?
Brazil
Test marketing refers to customers who modify existing products according to their own ideas to suit their specific needs.
FALSE A method of determining the success potential of a new product, test marketing introduces the offering to a limited geographical area (usually a few cities) prior to a national launch. Lead users are customers who modify existing products according to their own ideas to suit their specific needs.
Although innovation strategies may not work in the long run, overriding short-term reasons compel firms to introduce new products and services.
FALSE Although innovation strategies may not always work in the short run—some estimates indicate that only about 3 percent of new products actually succeed—various overriding and long-term reasons compel firms to continue introducing new products and services.
If Microsoft decided to sell mobile phones under the Xbox brand (which it uses for its gaming systems), this would be an example of a line extension.
FALSE This is a brand extension, not a line extension. A brand extension is the use of the same brand name in a different product line. Phones and gaming systems are different product lines.
In entertainment licensing, the major risk to licensees is that the brand will become overexposed.
FALSE For licensors, the major risk is the dilution of the brand.
Which of the following statements regarding secondary packaging is true?
It is important to the retailer in terms of convenience in handling. Secondary packaging—the wrapper or exterior carton that contains the primary package—fills many roles, including providing information to the consumer, offering convenience to the retailer, as a positioning tool, and allowing for cost efficiencies because of the larger order and shipment sizes. , It is therefore of value to the consumer.
Justin is looking to expand his pet grooming business and wants to evaluate the profitability of a potential new market. The area he is looking at has 2,000 homes and Justin estimates that 20 percent of them would be likely to use his service. He charges $45 per grooming and on average customers groom their pets six times a year. Justin estimates his variable costs to expand his business will be $10 per grooming and his fixed costs are $10,000. How much profit would Justin make on this new segment?
Segment profitability = (2,000 × 20% × (45 × 6) × (45 − 10) ÷ 45) − $10,000 Segment profitability = (400 × (270) × (35) ÷ 45)) − $10,000 Segment profitability = (108,000 × $0.78) − $10,000 Segment profitability = $82,240 − $10,000 Segment profitability = $72,240
Marriott Hotels trains its front desk employees to dress neatly and conservatively to project a professional image. This relates to the service dimension of tangibles.
TRUE The category of tangibles would include the appearance of facilities, equipment, personnel, and communication materials.
A complex product that is best described in writing will be difficult to explain to consumers who are unable to read. For this reason, a segment in which many consumers could not read would be considered unattractive because the consumers would not be RESPONSIVE
The problem here is not responsiveness, but REACHABILITY. The consumers might respond very well to the offer if they could receive the message; however, their failure to read will make it difficult to reach them with positioning messages. The best product or service cannot have any impact, no matter how identifiable or substantial the target market is, if that market cannot be reached (or accessed) through persuasive communications and product distribution.
The level of economic development, as well as differences in product and technical standards, helps determine the need for and level of product
adaptation. The strategy a firm chooses depends on the needs of the target market. The level of economic development, as well as differences in product and technical standards, helps determine the need for and level of product adaptation.
During the ________ stage of the product life cycle, firms either position themselves for a niche segment of diehard consumers or they completely exit the market.
decline Firms with products in the decline stage either position themselves for a niche segment of diehard consumers or those with special needs or they completely exit the market.
When Kellogg's offers different cereals, such as Cocoa Krispies and Special K, it is segmenting the market by ________ segmentation methods.
demographic
Psychographics is the segmentation method that delves into how consumers
describe themselves. Psychographic segmentation is the one that delves into how consumers actually describe themselves. Usually marketers determine (through demographics, buying patterns, or usage) into which segment an individual consumer falls.
After assessing the market growth potential and market competitiveness in Brazil for his company's baby products, Jaime wanted to evaluate market access. To do this, Jaime would consider
ease of accessing or developing distribution channels and brand familiarity. Evaluation of profitability considers market growth, market competitiveness, and market access, along with focusing the assessments on the potential profitability of each segment, both current and future. Market access includes ease of developing or accessing distribution channels and brand familiarity.
Juan has identified four potential market segments for his Rent-A-Mom service. He will now compare the segments to see if they are distinct from each other. Juan is evaluating whether or not each segment is
identifiable. A segment is identifiable if the marketer can identify who is in the segment and distinguish it from other segments.
Perceptual maps
include consumers' perceptions of the positions of current brands; they also include ideal points. This makes it easy to visualize the distance between a brand's position and the ideal point, as well as similarities and differences between the images of different brands.
Whenever Conrado considers upgrading his personal computer system, he consults with Navin, a knowledgeable friend who always has the newest technology. For Conrado, Navin is a(n) ________ in the diffusion of innovation curve.
innovator Typically, innovators keep themselves very well informed about the product category by subscribing to trade and specialty magazines, talking to other experts, visiting product-specific blogs and forums that describe the coolest new products.
Liam relocated to take a new job, and when he got sick he needed to find a doctor. He discovered during the visit that he didn't like the one he had chosen, and he knew he'd never go back to that doctor. From a marketing perspective, his situation highlights one of the key differences between products and services, known as
inseparability. Because medical services are inseparable, the doctor's service was "produced" at the time of the visit, and Liam did not have the option of trying out different doctors before choosing the one to treat him.
During the ________ stage of the product life cycle, sales are low, and profits are small or negative.
introduction The introduction stage is characterized by initial losses to the firm due to its high start-up costs and low levels of sales revenue as the product begins to take off.
One key feature of the value of a strong brand is that
it can protect the firm from competition. Over time and with continued use, consumers learn to trust certain brands. They know, for example, that they wouldn't consider switching brands and, in some cases, feel a strong affinity to certain brands.
Jacques manages an upscale French restaurant in the Philadelphia area. His restaurant offers a few specials each evening in addition to its regular menu. Jacques has trained his servers to report comments and requests for items that have previously been offered only as specials. Jacques uses this information to reduce the ________ gap in services marketing.
knowledge By collecting information about special requests, Jacques seeks to learn more about his customers' expectations. This should help close the knowledge gap.
Del Monte, Nike, Pepsi, KitchenAid, and Sony are considered famous ________ brands because they are owned and managed by the manufacturer.
national Manufacturer brands, also known as national brands, are owned and managed by the manufacturer.
Global pricing strategies should strive to be consistent with
positioning strategies. Competitive factors influence global pricing in the same way they do home country pricing, but because a firm's products or services may not have the same positioning in the global marketplace as they do in their home country, market prices must be adjusted to reflect the local pricing structure.
Hofstede's six dimensions
power distance, uncertainty avoidance, individualism, masculinity, time orientation, and indulgence.
One afternoon, the clerk at the customer service desk of a large retail store got bored and started stating different return policies to each customer. Customers waiting in line and overhearing the different policies would probably feel that the store's handling of returns lacked
procedural fairness. Procedural fairness refers to the perceived fairness of the process used to resolve issues. In this case, since each customer was hearing a different process description, customers would perceive that procedural fairness did not exist.
We often see advertisements touting a product as being made with natural ingredients or being long-lasting. Marketers using these types of promotions are positioning their products based primarily on
product attributes.
A ________ is a group of associated items that consumers tend to use together or think of as part of a group of similar products.
product line
A university that has separate graduate and undergraduate admission offices recognizes that these are distinct
product lines. Product lines are groups of associated items that consumers tend to use together or think of as part of a group of similar products or services. Graduate and undergraduate programs at most universities are distinct product lines, with each product line including multiple degrees.
The Value and Lifestyle Survey (VALS) conducted by Strategic Business Insights (SBI) is a widely used tool for
psychographic segmentation. NOT geographic segmentation.
The STP process is made up of
segmentation, targeting, and positioning.
Gerardo wants to develop an Internet-based auction business and is working through the STP process. After establishing his objectives, describing potential market segments, and evaluating the attractiveness of each segment, Gerardo now has to
select a target market. After setting objectives, forming segments, and evaluating segment attractiveness, the next step of the STP process is to select one or more target markets.
service dimensions
tangibility, reliability, responsiveness, assurance, and empathy
A marketing professor in Boston, Massachusetts, maintains a museum of failed consumer products. Most new products in this museum failed during the ________ stage of new product development, when they are introduced to a limited geographic area.
test marketing Test marketing introduces the offering to a limited geographical area (usually a few cities) prior to a national launch and is a strong predictor of product success because the firm can study actual purchase behavior, which is more reliable than a simulated test.
On the basis of the research it has gathered on consumer perceptions, the tests it has conducted, and competitive considerations, the XYZ firm confirms its target market (or markets) and decides how its product will be positioned. Then the firm finalizes the remaining marketing mix variables for the new product, including the marketing budget for the first year. This process illustrates
the product launch.