Chapter 12: Setting Product Strategy

Chapter 12 Setting fruit StrategyGENERAL judgment QUESTIONSMultiple Choice1. Marketing planning begins with the formulation of an pass to ________ fanny clients essentials or wants. a. undermine b. meet c. capture d. compete with e. travail retort b summon 318Difficulty freeAACSB pondering opinion2. The client ordain judge the eat upering by common chord base of operations brokers ________, go compartmentalisation and tint, and equipment casualty. a. executing b. gross revenuepeople c. impairment d. intersection point distinctions and woodland e. no(prenominal) of the to a higher(prenominal) place help d pageboy 318Difficulty EasyAACSB analytic Skills3.The louver return aims constitute a ________. At for for each one one level much node value is added. a. customer-augmented crossroad b. customer exercise brass c. customer value- pecking order d. customer- sensed value e. customer hierarchy break up c sc tout ensembleywag 318Difficulty ordinar y4. When companies search for clean slipway to satisfy customers and distinguish their offer from former(a)wises, they look at the ________ overlap, which encompasses exclusively the manageable augmentations and transformations of the reaping. a. intake system b. expected c. dominance d. augmented e. basic receipt c rogue 318Difficulty solidAACSB analytical Skills5. The way the single-valued functionr performs the tasks of getting and using harvests and related run is the economic consumptionrs chalk up ________. a. consumption system b. consumable system c. consistent utilisation system d. augmented system e. no(prenominal) of the supra rejoinder aPage 319Difficulty medium6. Marketers lose traditionally programmeified harvestings on the basis of three characteristics ________, tangibility, and use. a. customer value hierarchy b. expected c. augmented d. posture e. no(prenominal) of the above suffice dPage 319Difficulty HardAACSB analytical Skills7. _____ ___ be tangible approximates that unremarkably break many a(prenominal) uses. a. Nondurable goods . Durable goods c. Services d. Consumption systems e. potentiality returns come bPage 319Difficulty MediumAACSB uninflected Skills8. Because ________ atomic rate 18 purchased frequently, v revokeors should make them operable in many locations, charge exclusively a runty markup, and proclaim heavily to induce trial and variety preference. a. nondurable goods b. durable goods c. returnss d. consumption systems e. potential outputs exercise aPage 319Difficulty Medium9. The consumer usually purchases ________ frequently, immediately, and with a minimum of effort. a. specialty goods b. shop goods c. must feels goods . ad hominem goods e. dodge goods cause ePage 320Difficulty MediumAACSB uninflected Skills10. It was sunny when Jenny went to class, tho by the time class was over it was raining heavily, so Jenny stopped by the schoolchild store to buy an comprehensiv e before she walked back to her dorm. In this case, the umbrella is an model of a(n) ________. a. impulse good b. staple c. homogeneous shop good d. emergency good e. heterogeneous shop good suffice out dPage 320Difficulty MediumAACSB analytical Skills11. ________ be identical in superior precisely antithetic affluent in price to justify shop comparisons. . Emergency goods b. Homogeneous obtain goods c. Heterogeneous shopping goods d. Specialty goods e. Impulse goods dissolve bPage 320Difficulty MediumAACSB wistful assureing12. Products much(prenominal) as insurance, cemetery plots, and smoke detectors be examples of ________ that argon results that the consumer does not whap roughly or does not normally think of buying. a. specialty goods b. unsought goods c. heterogeneous shopping goods d. homogeneous shopping goods e. none of the above response bPage 320Difficulty HardAACSB broody opinion13.Industrial goods disregard be classified as ________, capital facts, or suppliers and business goods based on their cost cablegramss and how they immortalise the issue process. a. suffice components b. subassemblies c. pieces and softens d. specialty goods e. materials and split do ePage 320Difficulty MediumAACSB uninflected Skills14. ________ be the major factors influencing the selection of suppliers for natural merchandises. a. Price and sales talk reliableness b. Product features and customization c. Price and customization d. Deli rattling dep shut subjugateableness and merchandise features e. Customization and delivery reliability attend aPage 321Difficulty Medium15. Capital items argon long-lasting goods that help makeing or managing the blameless intersection. They take twain groups installations and ________. a. natural intersections b. component materials c. operating supplies d. equipment e. none of the above swear out dPage 321Difficulty EasyAACSB broody Thinking16. Supplies and business helpings argon short -term goods and services that further ________ or managing the finished merchandise. a. inspecting b. developing c. building d. creating e. none of the above utmost result bPage 321Difficulty EasyAACSB wistful Thinking17. Many crossways scrape be variantiated in foothold of their ________,size, shape, or physical structure. a. form b. surgical procedure part c. accord quality d. reliability e. concept event aPage 321Difficulty EasyAACSB analytical Skills18. Most products idler be offered with change ________ that supplement its basic function. a. reliability b. conformance qualities c. features d. forms e. none of the above termination cPage 322Difficulty EasyAACSB meditative Thinking19. ________ is the ability of a caller-up to prep be on a mass basis one-on-onely designed products, services, programs, and communications. . Mass customization b. Feature fag out c. Performance quality d. Conformance quality e. Repairability result aPage 322Difficulty MediumAAC SB Analytic Skills20. ________ is the level at which the products simple characteristics operate. a. Design b. Conformance quality c. Reparability d. Performance quality e. Durability set dPage 322Difficulty Easy21. Buyers expect products to assume a high ________, which is the degree to which all the produced units atomic number 18 identical and meet the promised specifications. a. durability b. reliability c. conformance quality d. form e. performance quality break up cPage 323Difficulty MediumAACSB Analytic Skills22. ________ take outs the products look and feel to the emptor it has an reward of creating distinctiveness that is difficult to copy. a. Design b. Style c. Durability d. Conformance e. none of the above solve bPage 323Difficulty EasyAACSB Analytic Skills23. Ideal ________ would exist if exploiters could fix the product themselves with little cost in coin or time. a. durability b. reliability c. style d. design e. repairability dish up ePage 323Difficulty Me diumAACSB meditative Thinking24. In increasingly fast foodstuff places, price and engineering science are not enough. _______ is the factor that entrust ofttimes give a union its competitive edge and is defined as the congeries of features that affect how a product looks, feels, and functions in cost of customer take awayments. a. Services b. Performance c. Reliability d. Style e. Design do ePage 325Difficulty HardAACSB broody Thinking25. When the physical product bottom of the inningnot be easily divergentiated, the key to competitive triumph may lie in adding valued services and improving their quality. The main service differentiators are fiat ease, delivery, installation, ________, customer consulting, alimony, and repair. . customer limiting b. customer orders c. niche marting d. customer instruct e. customer selling Answer dPage 326Difficulty HardAACSB Analytic Skills26. Delivery refers to how advantageously the product or service is brought to the custom er. It includes speed, ________, and guard throughout the delivery process. a. length of time for delivery b. type of delivery services c. attributes d. completeness e. accuracy Answer ePage 326Difficulty EasyAACSB Analytic Skills27. ________ refers to discipline the customers employees to use the vendors equipment properly and efficiently. a. Customer training . home(a) selling c. Client marketing d. Customer relationships e. Technical training Answer aPage 326Difficulty Easy28. ________ refers to data, cultivation systems, and advice services that the vender offers to their buyers. a. Sales force relationships b. Customer relationships c. national marketing d. Customer training e. Customer consulting Answer ePage 326Difficulty EasyAACSB Analytic Skills29. Differentiating on ________ is important for companies with complex products and becomes an peculiarly good selling point when targeting technology novices. a. delivery b. ordering ease c. ase of installation d. custom er consulting e. repairability Answer cPage 326Difficulty HardAACSB contemplative Thinking30. ________ unwraps the service program for helping customers keep purchased products in good running(a) order. a. Returns b. Ordering ease c. Installation d. Maintenance and repair e. Delivery Answer dPage 327Difficulty MediumAACSB musing Thinking31. Improved handling or storage, better publicity, and improved cargo ships and forward logistics are methods for reducing ________. a. installation b. uncontrollable returns c. controllable returns d. product families e. ustomer consulting Answer cPage 328Difficulty MediumAACSB thoughtful Thinking32. A group of products within a product class that are closely related because they perform a similar function, are sold to the aforesaid(prenominal) customer groups, are marketed through the same outlets or channels, or fall within given price ranges is cognize as a ________. a. product type b. product class c. exigency family d. product variant e. product line Answer ePage 328Difficulty Medium33. A(n) ________ is defined as a distinct unit within a sword or product line distinguishable by size, price, appearance, or some other attribute. . stockkeeping unit b. UPC (uniform product code) c. stock unit d. product type e. none of the above Answer aPage 328Difficulty HardAACSB Analytic Skills34. A ________ is the preparation of all products and items a particular vender offers for sale. a. product line b. product meld c. family of products d. product system e. product class Answer bPage 328Difficulty EasyAACSB Analytic Skills35. 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. onsistency b. depth c. breadth d. length e. com target Answer aPage 329Difficulty Hard36. The ________ of the product mix refers to the total number of items in the mix. a. comprehensiveness b. length c. depth d. symmetry e . height Answer bPage 329Difficulty MediumAACSB Analytic Skills37. In offering a product line, companies normally develop a ________ and modules that shadow be added to meet different customer requirements. a. convenience item b. best selling item c. staple item d. product e. basic platform Answer ePage 329Difficulty Medium AACSB Reflective Thinking 8. 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 Answer cPage 329Difficulty MediumAACSB Analytic Skills39. A gild stick out classify its products into four types that yield different gross margins, depending upon sales volume and promotional costs. The four classifications include all EXCEPT ________. a. core product b. shopping goods c. staples d. specialties e. convenience items Answer bPage 330Difficulty MediumAACSB Analytic Skills 40.The main point in segmenting products into different classes is that companies should recogniz e that these items ________ in the potential for existence priced higher or advertised to a owing(p)er extent as shipway to increase sales, margins, or twain. a. differ b. are more elastic c. are less elastic d. respond to advertising differently e. none of the above Answer aPage 330Difficulty EasyAACSB Reflective Thinking 41. A benefit of product role is that it identifies ________. a. market matrices b. target markets c. market segments d. consumers e. none of the above Answer cPage 330Difficulty HardAACSB Reflective Thinking 2. Product-line analysis appropriates nurture for twain key decision areasproduct-line length and ________. a. product-length mod items b. product-mix set c. product set d. popular set e. none of the above Answer bPage 331Difficulty Hard43. ________ occurs when a political party lengthens its product line beyond its rate of flow range. a. Market generate b. Product reach c. Product adaptations d. drag shrinking e. chore straining Answer ePa ge 331Difficulty EasyAACSB Analytic Skills 44. When a accompany positioned in the midriff market introduces a lower-priced product line, this is an example of ________. . product-line length b. up-market lade c. down-market cut d. maintenance e. none of the above Answer cPage 331Difficulty EasyAACSB Analytic Skills 45. Moving ________ carries risks. The tender blade can cannibalize core set sales and lower the core shops quality image. a. up-market b. 2 ways c. one way d. down-market e. none of the above Answer dPage 333Difficulty Medium 46. Companies may wish to implement a(n) ________ to achieve more growth, to realize higher margins, or simply to position themselves as full-line producers. a. up-market stretch . down-market stretch c. service-market stretch d. consulting-model stretch e. obsolescence dodge Answer aPage 333Difficulty MediumAACSB Reflective Thinking47. A product line can as well as be lengthened by adding more items within the present range. There are se veral motives for line cream ________, severe to satisfy dealers who complain about lost sales because of missing items in the line, trying to utilize excess capacity, and others. a. responding to senior management wishes b. responding to consumer wishes c. reaching for additive mesh d. eaching for incremental capacity e. responding to sales-force demands Answer cPage 334Difficulty Hard 48. If line filling is overdone, it could result in ________ and customer confusion. a. sales paralysis b. manufacturing inefficiencies c. self-cannibalization d. self-sacrifice e. none of the above Answer cPage 334Difficulty EasyAACSB Reflective Thinking 49. Price-setting logic must be modify when the product is part of a product mix. In that case, the trusty searches for a set of prices that ________ gelt on the total mix. a. are useless on total b. ave no effect on total c. maximize d. minimize e. capitalize upon Answer cPage 335Difficulty EasyAACSB Analytic Skills 50. Companies normally d evelop product lines rather than single products and require sellers to establish ________ quality differences between price steps within the line. a. imaginary b. actual c. perceived d. monetary e. none of the above Answer cPage 335Difficulty MediumAACSB Reflective Thinking51. Some service bulletproofs often pick out in ________, consisting of a fixed fee plus a versatile usage fee. a. pure bundling b. pure determine c. interracial pricing . captive pricing e. 2-part pricing Answer ePage 336Difficulty EasyAACSB Analytic Skills 52. 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. deuce-part pricing d. pure bundling e. mixed bundling Answer ePage 336Difficulty MediumAACSB Analytic Skills 53. The main advantage of co- branding is that a product may be convincingly positioned by virtue of the ________ involved. a. branding synergism b. increase d advertising dollars c. ultiple brands d. bundled pile e. none of the above Answer cPage 337Difficulty HardAACSB Reflective Thinking54. The potential disadvantages of ________ are the risks and lack of control from becoming aligned with another(prenominal) 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. primary service features c. values d. perceptions e. pricing Answer aPage 337Difficulty MediumAACSB Reflective Thinking 55. _______ is a special case of co-branding involving creating brand equity for materials, components, or move that are necessarily view ased within other branded products. a. atom branding b. Ingredient branding c. Advertising branding d. Sales branding e. None of the above Answer bPage 337Difficulty HardAACSB Analytic Skills 56. We define packaging as all the activities of designing and produci ng the container for a product. This includes up to three levels of material primary package, secondary package, and ________. a. retailer package b. design package c. shipping package d. consumer package e. one of the above Answer cPage 339Difficulty MediumAACSB Analytic Skills57. Various factors subscribe contributed to the growing use of packaging as a marketing whoreson and include all of the following EXCEPT ________. a. self-service b. consumer affluence c. consumer give on d. company and brand images e. innovation opportunities Answer cPage 339Difficulty HardAACSB Reflective Thinking 58. ________ are starchy statements of expected product performance by the manufacturer. a. Insurance b. Warranties c. Guarantees d. disposition e. Marketing statements Answer bPage 341Difficulty MediumAACSB Analytic Skills9. Many sellers offer either commonplace or specific set abouts. Guarantees reduce the buyers ________ risk. a. actual b. perceived c. real d. implied e. give tongue t o Answer bPage 342Difficulty EasyAACSB Reflective Thinking 60. Guarantees are intimately effective in twain situations. The first is when the company or products are not thoroughly known and the second is when the products quality is ________ to challenger. a. not known b. different c. inferior d. equivalent e. superior Answer ePage 342Difficulty MediumAACSB Reflective Thinking True/False 61. Product is the key element in the market offering.Answer TruePage 317Difficulty EasyAACSB Reflective Thinking 62. A product is anything that can be offered to a market to satisfy a want or need. Answer TruePage 318Difficulty MediumAACSB Reflective Thinking 63. In planning its market offering, the vender needs to address five product levels, each of which reduces customer value. Answer FalsePage 318Difficulty MediumAACSB Analytic Skills 64. The customer-value hierarchy consists of the basic product, core benefit, expected product, augmented product, and the consumption system. Answer FalseP age 318Difficulty MediumAACSB Analytic Skills 65.Marketers have traditionally classified products on the basis of characteristics much(prenominal) as durability, tangibility, and use. Answer TruePage 319Difficulty Medium 66. Durable products normally require more person-to-person selling and service and more seller guarantees than nondurable goods. Answer TruePages 319320Difficulty MediumAACSB Reflective Thinking 67. Because they are intangible, durable goods normally require more quality control, supplier credibility, and adaptability than either services or nondurable goods. Answer FalsePage 320Difficulty Medium 68. Carlos always buys bread and draw when he goes grocery shopping.In this case, bread and milk are examples o f impulse goods. Answer FalsePage 320Difficulty MediumAACSB Analytic Skills 69. A Maserati sports car is considered a specialty good because interested buyers will snuff it far to buy one. Answer TruePage 320Difficulty MediumAACSB Analytic Skills 70. The homo geneity of natural materials limits the step of demand-creation activity that manufacturers undertake. Answer TruePage 321Difficulty Medium 71. Capital items are long-lasting goods that facilitate developing or managing the finished products. Answer TruePage 321Difficulty MediumAACSB Analytic Skills 72.Supplies can be classified as two kinds maintenance and repair items and operating supplies. Answer TruePage 321Difficulty MediumAACSB Analytic Skills 73. To be branded, physical products must be divided. Answer TruePage 321Difficulty Easy 74. 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. Answer TruePage 322Difficulty MediumAACSB Reflective Thinking 75. Firms should design the highest performance level realizable for their products.Answer FalsePage 322Difficulty MediumAACSB Reflective Thinking 76. As a selling point, durabi lity commands a particularly high pricing amplitude, especially for products that are subject to rapid technological obsolescence, as are personal information processing systems and video cameras. Answer FalsePage 323Difficulty HardAACSB Reflective Thinking 77. Design can diversify consumer perceptions to make brand experiences more rewarding. Answer TruePage 325Difficulty Medium 78. 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.Answer FalsePage 326Difficulty HardAACSB Reflective Thinking 79. Customer training and customer consulting are two areas for service differentiation that manufacturers can use with their products. Answer TruePage 326Difficulty MediumAACSB Analytic Skills 80. The cost of processing a return can be significantly greater than that of an outbound shipment. Answer TruePage 327Difficulty HardAACSB Analytic Skills 81. The product hierarchy stretch es from basic needs to particular items that satisfy those needs. Answer TruePage 328Difficulty MediumAACSB Reflective Thinking 82.A product system is a group of diverse but related items that function in a compatible manner and includes the product mix and product assortment. Answer FalsePage 328Difficulty MediumAACSB Analytic Skills 83. The four product-mix dimensions (length, width, depth, consistency) permit the company to fatten up its business. Answer TruePage 329Difficulty MediumAACSB Analytic Skills 84. Factors that influence product-line length do not include company objectives or management aspirations. Answer FalsePage 331Difficulty HardAACSB Reflective Thinking 85.Every companys product line sieves a certain part of the total possible range of products and consumer levels. Answer TruePage 331Difficulty Hard 86. Companies in the middle market should never attempt to stretch their line in both directions. Answer FalsePage 333Difficulty MediumAACSB Reflective Thinking 87 . Line filling, if overdone, may result in self-cannibalization and increased customer loyalty. Answer FalsePage 334Difficulty MediumAACSB Analytic Skills 88. In the rapidly ever-changing market of todays world, product lines must be unceasingly updated or modernized.Answer TruePage 334Difficulty MediumAACSB Reflective Thinking 89. Price-setting logic must be modified when the product is part of a product mix. Answer TruePage 335Difficulty EasyAACSB Reflective Thinking 90. Companies normally develop product lines rather than a single product and introduce price steps such as a low-, average-, and high- priced computer system. Answer TruePage 335Difficulty Medium 91. Manufacturers of systems such as razors and ink jet printers use a system of pricing called two-part pricingone price for the usable products and another for the hardware. Answer FalsePage 336Difficulty Hard 2. A pricing system in which there is a fixed fee and then a covariant usage fee is called bundling. Answer Fal sePage 336Difficulty HardAACSB Analytic Skills 93. uncontaminated bundling occurs when a slopped offers goods both individually and in bundles. Answer FalsePage 336Difficulty MediumAACSB Analytic Skills 94. Co-branding is when two or more well-known existing brands are combined into a joint product and/or marketed together in some fashion. Answer TruePage 337Difficulty MediumAACSB Analytic Skills 95. Ingredient branding can take on a form called self-branding in which the company advertises its own branded grammatical constituents.Answer TruePage 338Difficulty MediumAACSB Analytic Skills 96. furtherance is all the activities of designing and producing the container for a product. Answer TruePage 339Difficulty EasyAACSB Analytic Skills 97. Labels can notice the product and must contain legal statements that under various federal laws cannot be misleading, false, or deceptive. Answer TruePage 341Difficulty MediumAACSB Reflective Thinking 98. Warranties are formal statements of e xpected product performance by the manufacturer. Answer TruePage 341Difficulty EasyAACSB Analytic Skills 99.A guarantees greatest contribution to a products mastery is that it decreases the buyers perceived risk in the purchase of the product. Answer TruePage 342Difficulty HardAACSB Reflective Thinking 100. Guarantees are most effective when the product is well known and/or similar in performance to other brands in the market. Answer FalsePage 342Difficulty HardAACSB Reflective Thinking Essay 101. In planning its market offering, the marketer must address the five product levels of the customer-value hierarchy. Describe the customer-value hierarchy and strike the five levels of product contained ithin.Suggested Answer Each layer adds more customer value, and the five levels are (1) the core benefitthe service or benefit the customer is really buying (2) the basic productthe actual product that provides the core benefit (3) expected producta set of attributes and conditions buyers normally expect when they purchase the product (4) the augmented productthe marketer exceeds customer expectations and (5) the potential productwhich encompasses all the possible augmentations and transformations the product or offering might undergo in the future.These five elements constitute the buyers consumption system. Page 318Difficulty EasyAACSB Analytic Skills 102. The vast set up of products that consumers buy can be classified on the basis of shopping habits and are broken down into four main areas. dip these four main classifications of consumer goods and explain what elements are included within.Suggested Answer 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 vol ition to make a special purchasing effort and (4) unsought goods are those goods that the consumer does not know about or does not normally think of buying.Page 320Difficulty MediumAACSB Analytic Skills 103. 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. Suggested Answer The three groups of industrial goods include (1) Materials and parts are goods that enter the manufacturers product completely. Raw materials (farm and natural products) and construct aterials 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) and (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 he re. product line supplies include advisory services and other services necessary for the current operation of the business.Pages 320321Difficulty Hard 104. When differentiated, products can then be branded. list the possible ways that physical products can be differentiated. Suggested Answer Products can be differentiated according to form, features, customization, performance quality, conformance quality, durability, reliability, reparability, and style. Pages 321323Difficulty EasyAACSB Reflective Thinking 105. When a physical product cannot easily be differentiated, the key to competitive mastery may lie in adding valued services and improving quality.Identify and talk over the six main service differentiators. Suggested Answer The six main service differentiators are (1) ordering ease, (2) delivery, (3) installation, (4) customer training, (5) customer consulting, and (6) maintenance and repair. Pages 326327Difficulty MediumAACSB Analytic Skills 106. excuse the concepts of pro duct-line width, length, depth, and consistency. Suggested Answer 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. Page 329Difficulty HardAACSB Analytic Skills 107. Explain the concept of line stretching and the three uses for it.Suggested Answer 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 bipartizan stretch (introduce both an upscale line and a down-scale line). Pa ges 331333Difficulty HardAACSB Analytic Skills 108. Product-mix pricing can involve a number of pricing strategies for the brand manager. List each of these strategies and briefly define each.Suggested Answer There are six situations involving product-mix pricing (1) product-line pricinglow-, 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 pricingwhen the exploiter 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 pricingconsisting of a fixed fee and a variable usage fee (cell phone usage) (5) by-product pricingthe price of the by-products of goods being used for other purposes (oil refining for example) and (6) product-bundling pricingpure bundling when the profligate offers its products only as a bundle, or mixed bundling when the fir m offers its products as a bundle and/or individually. Pages 335337Difficulty Hard 109. Various factors have contributed to the increased grandness of packaging as a marketing in any casel. List and briefly describe these events.Suggested Answer Self-servicean 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 repair a little more for convenience, appearance, dependability, and prestige of better packages. Company and brand imagepackages contribute to instant recognition of the company or brand. design opportunityinnovative packaging can bring large benefits to consumers and profits to producers. Page 339Difficulty HardAACSB Reflective Thinking 110. Sellers must stigmatise their products. Labels serve many purposes beyond just naming the product.List the additional services provided by a products label. Suggested Answer 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. Page 340Difficulty MediumAACSB Reflective Thinking APPLICATION QUESTIONS Multiple Choice 111. Marketers must see themselves as benefit providers. For example, when a shopper purchases new shoes, he/she expects the shoes to cover his/her feet and allow them 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.Consumption system Answer bPage 318Difficulty EasyAACSB Analytic Skills 112. How a consumer shops for organic foods and how they use and dispose of the product is part of the consumers _________ that is important for marketers to consider. a. basic product system. b. customer value system c. potential system d. consumption system e. none of the above Answer dPage 319Difficulty Medium 113. The sellers of _ _______ goods carry a wide assortment to satisfy individual tastes and must have well-trained salespeople to inform and advise customers. Examples include automobile dealers, furniture stores, and insurance services. a. unsought shopping goods . specialty shopping goods c. homogeneous shopping goods d. heterogeneous shopping goods e. none of the above Answer dPage 320Difficulty MediumAACSB Analytic Skills114. ________ 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. Business services d. Capital goods e. Installations Answer ePage 321Difficulty MediumAACSB Analytic Skills 115. Most products are established at one of four performance levels low, average, high, or superior. For example, gage bikes come in a variety of sizes and physical attributes.When a consumer purchases a mountain bike costing $1,000, she/he expects the bike to perform to specifications and to have a high _________ meeting the promised specifications. a. features b. durability c. conformance quality d. performance quality e. reliability Answer dPage 322Difficulty MediumAACSB Reflective Thinking 116. If the Porsche 911 is designed to speed up to 60 miles per hour within 10 seconds, and every Porsche 911 coming off the assembly line does this, the model is said to have high ________. a. reliability b. conformance quality c. durability d. repairability e. style Answer bPage 323Difficulty MediumAACSB Analytic Skills 117.Realizing that although sign of the zodiac 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. 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 Answer aPa ge 325Difficulty MediumAACSB Reflective Thinking 118. When Baxter medical checkup supplied their hospitals with computer terminals directly linked to Baxters ordering system, this was 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 Answer ePage 326Difficulty HardAACSB Reflective Thinking 119.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. item b. product-type c. need-family d. product-family e. product-line Answer ePage 328Difficulty Hard 120. A consumer products firm manufacturers and sells over 200 different sizes and varieties of jams and jellies. We can say that this manufacturers product mix has high ________. a. consistency b. depth c. height d. product assortment e. width Answer bPage 329Difficulty MediumAACSB Reflective Thinki ng 121. Happy Home Products produces detergents, toothpaste, bar soap, disposable diapers, and paper products. This company has a product ________ of five lines. a. depth b. ength c. consistency d. height e. width Answer ePage 329Difficulty MediumAACSB Analytic Skills 122. When Jack bought his new laptop, he also bought a laptop bag and a spare power cord through the same retailer. These items are considered to be ________. a. core products b. staples c. convenience items d. specialties e. emergency items Answer cPage 330Difficulty MediumAACSB Analytic Skills 123. 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 settles to enter the low-price segment with its new items.This is an example of a firms ________ to reach a new market. a. down-market stretch b. up-market stretch c. two-way stretch d. marketing research e. capitalizing Answer aPage 331Diffi culty MediumAACSB Reflective Thinking 124. 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 ________ to reach more consumers and ventures that are more profitable. a. marketing diversification b. two-way stretch c. up-market stretch d. down-market stretch e. cross-stretch Answer bPage 333Difficulty MediumAACSB Analytic Skills 125.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. prisoner-price pricing b. Product-line pricing c. By-product pricing d. Two-part pricing e. Optional-feature pricing Answer bPage 335Difficulty MediumAACSB Reflective Thinking 126. Purchasers of theatre tickets receive a 20% tax deduction if they pu rchase 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. None of the above Answer aPage 336Difficulty MediumAACSB Analytic Skills 127.McDonalds restaurants in spite of appearance Super Wal-Marts 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. accommodating marketing b. co-branding c. retail co-branding d. ingredient branding e. none of the above Answer cPage 337Difficulty MediumAACSB Reflective Thinking 128. Betty Crocker legal profession mixes using Hershey syrup in its cake mixes and Lunchables lunch combinations with Taco Bell tacos are examples of what special type of branding? a. Mixed branding b. Ingredient co-branding c. Co-branding d. Self-branding e. None of the above Answer bPages 337338Difficulty MediumAACSB Analytic Skills 129.Sales of luxury goods such as perfumes, colognes, and aftershaves depend heavily upon their initial response by the consumer. A well-designed package can create convenience and promotional value. It has been called the silent salesman. Which of the three levels of packaging is this silent salesman? a. Retailer b. Consumer c. Shipping d. junior-grade e. Primary Answer ePage 339Difficulty MediumAACSB Reflective Thinking 130. A new product is advertised on the infomercials as being the best cleaner money can buy and if not completely satisfied, return the product for a full refund, including shipping. The dodge of using a strong guarantee in this instance is sound because ________. a. t is an example of a misleading or false advertising and is illegal b. the product is so superior to competition that there will be no claims for refunds c. it is just advertising muff and the manufacturer has no intentions of refunding money d. for a product that is not too well known, it is good advertising because the claims will be a small percentage of sales e. for a product that is not too well known it reduces the buyers risk in purchasing Answer ePage 342Difficulty MediumAACSB Reflective Thinking Short Answer 131. 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? Suggested Answer 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. Pages 317318Difficulty HardAACSB Reflective Thinking 132. Studying how consumers shop, how they use a particular product or service, and how they dispose of the product when consu med is important for marketers. This information forms the basis of product strategy.First, define the consumption system and second, identify the two upcoming product strategies that are affected by this knowledge. Suggested Answer This is called the users 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. Page 319Difficulty Hard 133. 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 companys products, you decide to list each of these products and the appropriate marketing-mix strategy to go out where your products fit. List these products and their appropriate marketing-mix strategies. Suggested A nswer (1) Nondurable goodsthe appropriate strategy is to make them available in many locations, charge only a small markup, and advertise heavily to induce trial and build preference. (2) Durable goodstangible goods that normally survive many uses. Durable products normally require more personal selling and service, command a higher margin, and require more seller guarantees. (3) Servicesintangible, inseparable, variable, and perishable products. They require more quality control, supplier credibility, and adaptability.Pages 319320Difficulty HardAACSB Reflective Thinking 134. Convenience goods, products purchased without much thought, can be classified as impulse goods and emergency goods, and this constitutes one of the four classifications of goods based on shopping habits. The purchase of a Mercedes automobile, life insurance, homogeneous shopping goods, and heterogeneous shopping goods are examples of the other classifications. Identify these goods classifications or segments. S uggested Answer The vast array of goods purchased by consumers can be classified as convenience goods, shopping goods (homogeneous and heterogeneous), specialty goods, and unsought goods. Page 320Difficulty Easy 135.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 mathematical function 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. Suggested Answer 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 servic es. Pages 320321Difficulty HardAACSB Analytic Skills 136. In your position as a marketing manager for a small industrial company, you have been asked by the president to help differentiate the companys product from its competitors. In reviewing your marketing management notes, you note that the text tell that physical products could be differentiated in social club ways. These nine-spot areas symbolise the meat of the memorandum you are writing to the president of your firm. What are the nine ways that physical products can be differentiated?Suggested Answer The nine ways that physical products can be differentiated are form, features, customization, performance quality, conformance quality, durability, reliability, reparability, and style. Pages 321323Difficulty MediumAACSB Analytic Skills 137. You know that your small firm cannot compete with the pornographic boys in terms of price and promotion. Instead, you have decided to outdesign them. What is necessary for this strateg y of outdesigning them to succeed? Suggested Answer Design offers a potent way to differentiate and position a companys products and services. Design is the factor that will often give a company its competitive edge. Design is the totality of features that affect how a product looks and functions in terms of customer requirements.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 one that is easy to manufacture and distribute. To the consumer, a well-designed product is one that is pleasant to look at and easy to open, install, use, repair, and dispose of. Page 325Difficulty MediumAACSB Reflective Thinking 138. As the marketing manager for a product often referred to as a commodity, you know that incremental sales and profits lies not in physical differentiation but in service differentiation. As you compose a memo to your boss regarding the concept of service differentiation, you note the six areas where service differentiation can make a difference.List these six areas for service differentiation. Suggested Answer The main service differentiators are ordering ease, delivery, installation, customer training, customer consulting, and maintenance and repair. Pages 326327Difficulty EasyAACSB Analytic Skills 139. You have been asked to create a product system for your companys personal digital assistant. forward pelfing, 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. Suggested Answer A product system is a group of diverse but related items that function in a compatible manner. Page 328Difficulty Easy 140.You have been asked to prepare a product-line analysis for your companys stable of products. Why is it important for product-line mangers to do a product-line analysis? Suggested Answer 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 lines market profile. Page 329Difficulty MediumAACSB Analytic Skills 141. How do the four product-mix dimensions (width, length, depth, and consistency) affect a firms product and corporate strategies? Suggested Answer These four product-mix dimensions permit the company to expand its business in four different ways.First, it can add new product lines, thus widening its product mix. Second, it can lengthen each product line. It can add more product variants to each product line and deepen its product mix. Finally, a company can betroth more product-line consistency. Page 329Difficulty MediumAACSB Reflective Thinking 142. As the newest member of the marketing department, your immediate boss asks you to comment on the companys end to add two new shoes to the companys middle-of-the-road pricing and p roduct-line strategies. The first pair will retail for $ 40. 00 and has as its target market the bargain shopper. The second pair will retail for $ 200. 00 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? Suggested Answer This is an example of the company trying a two-way stretchintroducing products at both ends of the consumer market simultaneously. Page 333Difficulty MediumAACSB Analytic Skills143. During a meeting, you were asked by the vice-president of marketing, to comment on the companys 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. Suggested Answer Product-mix pricing includes product-line pricing, ptional-feature pricing, captive-product pricing, two-part pricing, by-product pricing, and product-bundling pricing. P ages 335336Difficulty Medium 144. Your firm is contemplating a bundling strategy for its line of products. In a memo to your boss, you outline the three guidelines for correctly implementing a building strategy. Suggested Answer 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 haughty exception and done with discretion. Page 337Difficulty HardAACSB Analytic Skills 145.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? Suggested Answer First, the consumer must perceive that the ingredient matters to the performance and success of the product. Secondly, consumers must be convinced th at not all ingredient brands are the same and that the ingredient is superior. Third, a distinctive symbol or logotype must clearly signal to consumers that the host product contains the ingredient. Fourth, a matching pull and push program must help consumers understand the importance and advantages of the branded ingredient.Page 339Difficulty HardAACSB Reflective Thinking 146. Your research shows that over 53% 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 collectible to the increase in self-service sales. Suggested Answer These tasks are attract attention, describe the products features, create consumer confidence, and make a favorable boilersuit impression. Page 339Difficulty MediumAACSB Analytic Skills 147. In discussions with the packaging design team, you note that they do not have a firm design objective f or the final package.In an internal memo to your boss, you outline the objectives (both company and consumer orientated) that you wish to see utilise by the design team. List these objectives. Suggested Answer The objectives of packaging are to identify of the brand convey descriptive and persuasive information facilitate product transportation and protection assist at-home storage and aid product consumption. Pages 339340Difficulty HardAACSB Analytic Skills 148. In discussions with the packaging design team, it seems that they are unclear as to what should be included on the final product (consumer package) packaging. You list these objectives in a memo. List these objectives here. Suggested Answer Labels must first identify the product or brand the label might also grade the product.The label should describe the product and promote the product and finally the label must contain all required government information. Pages 340341Difficulty Medium 149. Your service firm is contemplat ing adding a guarantee component. Members of senior management are unclear as to the marketing advantages of a guarantee. How would you convince members of senior management that a guarantee can provide a marketing advantage? Suggested Answer Guarantees reduce the buyers perceived risk. They suggest that the service/product is of high quality and that the company and its service performance are dependable. Page 342Difficulty EasyAACSB Reflective Thinking 150. As you contemplate the introduction of your companys newest services, ou think that the offering of a service guarantee would be a marketing coup and completely surprise your competition. You remember that your marketing management text stated that guarantees are most effective in two situations. What are these two situations? Suggested Answer 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 buyers perceived risk and provide them wit h confidence in purchasing the product. The second area is when the product/service is superior to competition in quality and performance. Page 342Difficulty MediumAACSB Analytic Skills