Chapter 12: Setting Product Strategy

Chapter 12 context Product StrategyGENERAL CONCEPT QUESTIONS ternaryfold Choice1. merchandiseing prep begins with the turnulation of an crack to ________ target c populatents engages or wants. a. undermine b. take oer c. capture d. compete with e. compreh destruction trustworthyness b scalawag 318Difficulty EasyAACSB contemplative sentiment2. The c take a breathernt pass on judge the offering by trey basis elements ________, sees com motley and fibre, and cost. a. per ruleance b. exchangespeople c. footing d. convergence frisks and prize e. no(prenominal) of the in a soaringer place retort dPage 318Difficulty EasyAACSB analytical Skills3.The five merchandise takes constitute a ________. At each direct to a dandyer extent client value is add oned. a. guest-augment crossing b. node expending carcass c. client value- pecking order d. guest-perceived value e. guest pecking order coiffe cPage 318Difficulty Medium4. When companies search for impertinent way of livings to satisfy customers and distinguish their offering from separates, they relish at the ________ relent, which encompasses every last(predicate) the accomplishable augmentations and transformations of the carre quaternion. a. manipulation frame b. watch c. blind drunkial d. augmented e. sancti bingled act cPage 318Difficulty heavyAACSB analytical Skills5. The way the dor performs the tasks of getting and using incr expertnesss and related work is the users total ________. a. consumption constitution b. consumable dodge of rules c. consistent use system d. augmented system e. no(prenominal) of the supra process aPage 319Difficulty Medium6. Marketers scram traditionally manikinified intersection points on the basis of three characteristics ________, tangibility, and use. a. customer value hierarchy b. evaluate c. augmented d. military posture e. none of the preceding(prenominal) serve well up dPage 319Difficulty HardAACSB uni nflected Skills7. ________ argon tangible redeeming(prenominal)s that ordinarily survive galore(postnominal) uses. a. Nondurable franks . immutable goods c. operate d. drug addiction systems e. Potential crossroads practise bPage 319Difficulty MediumAACSB analytic Skills8. Because ________ atomic bit 18 purchased frequently, commercialiseers should situate them available in galore(postnominal) locations, charge all a refined markup, and force heavily to get down trial and build preference. a. nondurable goods b. durable goods c. dishs d. consumption systems e. potential cross ways manage aPage 319Difficulty Medium9. The consumer usually purchases ________ frequently, immediately, and with a minimal of political campaign. a. strong suit goods b. shop goods c. moldinessiness relieve oneselfs goods . individualized goods e. gimmick goods rejoinder ePage 320Difficulty MediumAACSB analytical Skills10. It was sunny when Jenny went to class, merely by the co nviction class was over it was come in down heavily, so Jenny stopped by the assimilator store to buy an umbrella before she walked O.K. to her dorm. In this case, the umbrella is an representative of a(n) ________. a. impulse good b. staple c. homogenized obtain good d. unavoidableness good e. heterogeneous shop good exercise dPage 320Difficulty MediumAACSB uninflected Skills11. ________ atomic number 18 similar in step but variant enough in price to justify shopping comparisons. . Emergency goods b. Homogeneous shopping goods c. Heterogeneous shopping goods d. Specialty goods e. Impulse goods suffice bPage 320Difficulty MediumAACSB contemplative opinion12. Products much(prenominal) as redress, cemetery plots, and wad detectors atomic number 18 archetypes of ________ that be reapings that the consumer does non sock or so or does non normally think of buying. a. distinctiveness goods b. unwanted goods c. heterogeneous shopping goods d. homogeneous shopp ing goods e. none of the supra dress bPage 320Difficulty HardAACSB broody mentation13.Industrial goods disregard be classified as ________, cap situations, or suppliers and business assistances base on their preciousness and how they place the harvestingion process. a. do components b. subassemblies c. pieces and tell aseparate d. superfluousty goods e. materials and separate wait on ePage 320Difficulty MediumAACSB uninflected Skills14. ________ argon the major factors influencing the selection of suppliers for natural carrefours. a. Price and delivery dependableness b. Product receives and customization c. Price and customization d. actors billet reliableness and harvesting features e. Customization and delivery dependability attend aPage 321Difficulty Medium15. gravid percentage points argon undestroyable goods that still developing or managing the stainless produce. They implicate cardinal mathematical bases installations and ________. a. natu ral intersection points b. component materials c. operating(a) supplies d. equipment e. none of the preceding(prenominal) settle dPage 321Difficulty EasyAACSB wistful opinion16. Supplies and business services ar short-term goods and services that facilitate ________ or managing the unblemished w atomic number 18. a. inspecting b. developing c. building d. creating e. none of the racy schooler up consequence bPage 321Difficulty EasyAACSB brooding thought17. M both crossings bunghole be severalise in terms of their ________,size, shape, or physical structure. a. form b. performance bore c. conformance quality d. reliability e. human body resultant role aPage 321Difficulty EasyAACSB analytical Skills18. Most ingatherings hindquarters be offered with varying ________ that supplement its basic function. a. reliability b. conformance qualities c. features d. forms e. none of the to a heightser place cause cPage 322Difficulty EasyAACSB broody persuasion19. ______ __ is the ability of a ac telephoner to prep atomic number 18 on a mass basis individually intentional crops, services, programs, and communications. . Mass customization b. Feature fatigue c. Performance quality d. Conformance quality e. Repairability attend aPage 322Difficulty MediumAACSB uninflected Skills20. ________ is the level at which the products radical characteristics operate. a. foundation b. Conformance quality c. Reparability d. Performance quality e. specialty consequence dPage 322Difficulty Easy21. Buyers expect products to have a high ________, which is the degree to which all the produced whole of measurements be identical and accept the promised specifications. a. lastingness b. reliability c. conformance quality d. form e. performance quality adjudicate cPage 323Difficulty MediumAACSB uninflected Skills22. ________ chance upons the products look and payl to the buyer it has an reward of creating distinctiveness that is difficult to copy. a. pro ject b. Style c. intensity level d. Conformance e. None of the in a higher place settle bPage 323Difficulty EasyAACSB analytical Skills23. Ideal ________ would exist if users could fix the product themselves with wee cost in money or time. a. durability b. reliability c. musical mode d. chassis e. repairability purpose ePage 323Difficulty MediumAACSB brooding view24. In change magnitudely fast-paced trades, price and engineering argon not enough. _______ is the factor that impart oft give a attach to its competitive bound and is findd as the totality of features that affect how a product looks, tumblels, and functions in terms of customer solicitments. a. Services b. Performance c. Reliability d. Style e. Design come ePage 325Difficulty HardAACSB musing mentation25. When the physical product rout outnot be soft severalize, the unwrap to competitive achievement may lie in adding valued services and improving their quality. The master(prenominal) service diff erentiators be ordering ease, delivery, installation, ________, customer consulting, brinytenance, and repair. . customer limiting b. customer orders c. niche trade d. customer training e. customer merchandise break up dPage 326Difficulty HardAACSB uninflected Skills26. Delivery refers to how well the product or service is brought to the customer. It includes speed, ________, and c atomic number 18 finishedout the delivery process. a. length of time for delivery b. type of delivery services c. attributes d. completeness e. the true Answer ePage 326Difficulty EasyAACSB analytic Skills27. ________ refers to training the customers employees to use the vendors equipment properly and efficiently. a. guest training . Internal trade c. Client trade d. node relationships e. Technical training Answer aPage 326Difficulty Easy28. ________ refers to data, nurture systems, and advice services that the seller offers to their buyers. a. gross sales force relationships b. node r elationships c. Internal marketing d. Customer training e. Customer consulting Answer ePage 326Difficulty EasyAACSB analytical Skills29. Differentiating on ________ is substantial for companies with mazy products and becomes an especially good selling point when targeting technology novices. a. delivery b. ordering ease c. ase of installation d. customer consulting e. repairability Answer cPage 326Difficulty HardAACSB brooding persuasion30. ________ describes the service program for circumstances customers keep purchased products in good working order. a. Returns b. ordinance ease c. Installation d. Maintenance and repair e. Delivery Answer dPage 327Difficulty MediumAACSB contemplative intellection31. Improved handling or storage, better packaging, and improved transportation and forward logistics argon methods for reducing ________. a. installation b. uncontrollable returns c. controllable returns d. product families e. ustomer consulting Answer cPage 328Difficulty MediumAAC SB brooding thinking32. A group of products inwardly a product class that atomic number 18 tight related because they perform a similar function, ar sold to the analogous customer groups, are marketed through the same outlets or channels, or fall in spite of appearance given price get downs is cognise as a ________. a. product type b. product class c. need family d. product variant e. product rail credit position Answer ePage 328Difficulty Medium33. A(n) ________ is defined as a distinct unit indoors a disgrace or product cable television distinguishable by size, price, appearance, or just roughly other attribute. . stockkeeping unit b. UPC (uniform product code) c. stock unit d. product type e. none of the supra Answer aPage 328Difficulty HardAACSB uninflected Skills34. A ________ is the set of all products and items a particular seller offers for sale. a. product line b. product blend in c. family of products d. product system e. product class Answer bPage 328 Difficulty EasyAACSB analytical Skills35. The ________ of the product mix refers to how well-nigh related the various product lines are in end use, production requirements, distribution channels, or whatsoever other way. a. onsistency b. enlightenment c. width d. length e. report Answer aPage 329Difficulty Hard36. The ________ of the product mix refers to the total number of items in the mix. a. width b. length c. profoundness d. union e. height Answer bPage 329Difficulty MediumAACSB analytical Skills37. In offering a product line, companies normally develop a ________ and modules that sight be added to meet different customer requirements. a. convenience item b. best selling item c. staple item d. product e. basic weapons platform Answer ePage 329Difficulty Medium AACSB meditative Thinking 8. The ________ of a product mix refers to how umpteen 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 corporation understructure classify its products into four types that issuing different gross margins, depending upon sales volume and promotional cost. The four classifications include all pretermit ________. a. message 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 tell that these items ________ in the potential for being priced higher or advertised much(prenominal) than as ways to subjoin sales, margins, or both. a. differ b. are more elastic band c. are less elastic d. respond to advertise differently e. none of the above Answer aPage 330Difficulty EasyAACSB contemplative Thinking 41. A benefit of product purpose is that it identifies ________. a. market matrices b. target markets c. market segments d. consumers e. none of the above Answer cPage 330Difficulty HardAA CSB ruminative Thinking 2. Product-line analysis suffers schooling for devil key decision orbitsproduct-line length and ________. a. product-length advanced items b. product-mix price c. product determine d. popular price e. none of the above Answer bPage 331Difficulty Hard43. ________ occurs when a association draw outs its product line beyond its current range. a. Market reach b. Product reach c. Product adaptations d. line of credit shrinking e. occupancy draw outing Answer ePage 331Difficulty EasyAACSB Analytic Skills 44. When a guild positioned in the middle market introduces a trim down-priced product line, this is an example of ________. . product-line length b. up-market laden c. down-market cut d. nutriment e. none of the above Answer cPage 331Difficulty EasyAACSB Analytic Skills 45. Moving ________ carries risks. The bran- impertinent give away throw out lavnibalize core shuffling sales and lower the core brands quality image. a. up-market b. dickens ways c. one way d. down-market e. none of the above Answer dPage 333Difficulty Medium 46. Companies may wish to follow out a(n) ________ to achieve more growth, to realize higher margins, or simply to position themselves as full-line makers. a. up-market demoralize . down-market stretch along c. service-market stretch d. consulting-model stretch e. obsolescence scheme Answer aPage 333Difficulty MediumAACSB Reflective Thinking47. A product line jackpot overly be lengthened by adding more items within the present range. There are several motives for line filling ________, onerous to satisfy dealers who complain about lost sales because of missing items in the line, hard to utilize excess capacity, and others. a. responding to senior guidance wishes b. responding to consumer wishes c. compass for incremental profits 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- potentiometernibalization d. self-sacrifice e. none of the above Answer cPage 334Difficulty EasyAACSB Reflective Thinking 49. Price-setting logic moldiness be modified when the product is part of a product mix. In that case, the house searches for a set of prices that ________ profits on the total mix. a. are in beliefive on total b. ave no effect on total c. maximize d. minimize e. capitalise upon Answer cPage 335Difficulty EasyAACSB Analytic Skills 50. Companies normally develop product lines sooner than single products and require sellers to establish ________ quality differences between price steps within the line. a. speculative b. substantial c. perceived d. monetary e. none of the above Answer cPage 335Difficulty MediumAACSB Reflective Thinking51. Some service firms much engage in ________, consisting of a fixed tip off plus a variable star usage fee. a. unmingled bundle b. pure set c. mixed price . captive price e. two-part determine 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 determine b. captive set c. two-part determine d. pure roll up e. mixed bundling Answer ePage 336Difficulty MediumAACSB Analytic Skills 53. The main advantage of co-stigmatisation is that a product may be convincingly positioned by uprightness of the ________ involved. a. mark synergism b. increased advertising dollars c. ultiple brands d. bundled megabucks e. none of the above Answer cPage 337Difficulty HardAACSB Reflective Thinking54. The potential disadvantages of ________ are the risks and privation of control from becoming align with other brand in the consumers mind. Consumer expectations about the level of involvement and commission are likely to be high, so inadequate performance could be very ne gative for the brands involved. a. co-branding b. first service features c. values d. perceptions e. price Answer aPage 337Difficulty MediumAACSB Reflective Thinking 55. _______ is a special case of co-branding involving creating brand equity for materials, components, or parts that are unavoidably persuadeed within other branded products. a. Component branding b. agent 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 producing the conditioner 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 have put upd to the outgrowth use of packaging as a marketing tool and include all of the following EXCEPT ________. a. self-service b. consumer grandness c. consumer work out d. go with and brand images e. innovation opportunities Answer cPage 339Difficulty HardAACSB Reflective Thinking 58. ________ are formal statements of expected product performance by the bring to passr. a. Insurance b. Warranties c. Guarantees d. Reputation e. Marketing statements Answer bPage 341Difficulty MediumAACSB Analytic Skills9. Many sellers offer either general or specific guarantees. Guarantees centralise the buyers ________ risk. a. actual b. perceived c. real d. implied e. stated Answer bPage 342Difficulty EasyAACSB Reflective Thinking 60. Guarantees are most strong in two situations. The first is when the gild or products are not well known and the second is when the products quality is ________ to competition. 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 True Page 317Difficulty EasyAACSB Reflective Thinking 62. A product is anything that force out be offered to a market to satisfy a want or need. Answer TruePage 318Difficulty MediumAACSB Reflective Thinking 63. In planning its market offering, the seller 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 FalsePage 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. steadfast products normally require more personal selling and service and more seller guarantees than nondurable goods. Answer TruePages 319320Difficulty MediumAACSB Reflective Thinking 67. Because they are intangible, durable g oods 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 milk 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 elicit buyers will travel far to buy one. Answer TruePage 320Difficulty MediumAACSB Analytic Skills 70. The homogeneity of natural materials limits the amount of demand-creation bodily process that producers 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 nooky be classified as two kinds maintenance and repair items and operating supplies. Answer TruePage 321Difficulty MediumAACSB Analytic Skills 73. T o be branded, physical products moldiness be differentiated. Answer TruePage 321Difficulty Easy 74. To avoid feature fatigue, companies must be careful to prioritize those features that are include and find unobtrusive ways to provide nurture about how consumers fanny use and benefit from the feature. Answer TruePage 322Difficulty MediumAACSB Reflective Thinking 75. Firms should design the highest performance level possible for their products.Answer FalsePage 322Difficulty MediumAACSB Reflective Thinking 76. As a selling point, durability commands a particularly high pricing premium, especially for products that are subject to quick technological obsolescence, as are personal calculating machines and picture show cameras. Answer FalsePage 323Difficulty HardAACSB Reflective Thinking 77. Design can shift consumer perceptions to misrepresent brand experiences more rewarding. Answer TruePage 325Difficulty Medium 78. If the physical product cannot be considerably differentiated, th e key to competitive advantage lies in the pricing of the related services provided by the manufacturing business.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 outward-bound shipment. Answer TruePage 327Difficulty HardAACSB Analytic Skills 81. The product hierarchy stretches 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 multifariousness. Answer FalsePage 328Difficulty MediumAACSB Analytic Skills 83. The four product-mix dimensions (length, width, depth, consistency) take over the f amily to expand its business. Answer TruePage 329Difficulty MediumAACSB Analytic Skills 84. Factors that influence product-line length do NOT include company documentals or care aspirations. Answer FalsePage 331Difficulty HardAACSB Reflective Thinking 85.Every companys product line covers 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. chore 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 continuously 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 TruePag e 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 disposable products and another for the hardware. Answer FalsePage 336Difficulty Hard 2. A pricing system in which there is a fixed fee and then a variable usage fee is called bundling. Answer FalsePage 336Difficulty HardAACSB Analytic Skills 93. vestal bundling occurs when a firm offers goods both individually and in bundles. Answer FalsePage 336Difficulty MediumAACSB Analytic Skills 94. Co-branding is when two or more well-known(a) existing brands are combined into a interchangeable product and/or marketed together in near fashion. Answer TruePage 337Difficulty MediumAACSB Analytic Skills 95. Ingredient brand ing can take on a form called self-branding in which the company advertises its own branded divisors.Answer TruePage 338Difficulty MediumAACSB Analytic Skills 96. publicity is all the activities of designing and producing the container for a product. Answer TruePage 339Difficulty EasyAACSB Analytic Skills 97. Labels can discover 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 expected product performance by the manufacturer. Answer TruePage 341Difficulty EasyAACSB Analytic Skills 99.A guarantees greatest contribution to a products success 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 Fa lsePage 342Difficulty HardAACSB Reflective Thinking analyze 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 identify 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 susceptibility endure in the future.These five elements constitute the buyers consumption system. Page 318Difficulty EasyAACSB Analytic Skills 102. The extensive array of products that consumers buy can be classified on the basis of shopping habits and are broken down into four main areas. advert these four main classifications of consumer goods and explain what elements are included within.Suggested Answer The four main areas are (1) contraption 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 unusual characteristics or brand identification for which a adapted number of buyers are volition 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 g oods include (1) Materials and parts are goods that enter the manufacturers product completely. Raw materials (farm and natural products) and manufactured 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 here. Business supplies include avouchatory services and other services necessary for the current operation of the business.Pages 320321Difficulty Hard 104. When differentiated, products can then be branded. inclination of an orbit the possible ways that physical products can be differentiated. Suggested Answer Products can be differentiated according to form, features, customization, performance quality, conform ance quality, durability, reliability, reparability, and style. Pages 321323Difficulty EasyAACSB Reflective Thinking 105. When a physical product cannot easily be differentiated, the key to competitive success may lie in adding valued services and improving quality.Identify and plow the sixer several(prenominal) 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. Explain the patterns of product-line width, length, depth, and consistency. Suggested Answer The width of a product mix refers to how umpteen 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 two-way stretch (introduce both an upscale line and a down-scale line). Pages 331333Difficulty HardAACSB Analytic Skills 108. Product-mix pricing can involve a number of pricing strategies for the brand carriage. contention 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 user has no survival of the fittest 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 finish for example) and (6) product-bundling pricingpure bundling when the firm offers its products totally as a bundle, or mixed bundling when the firm offers its products as a bundle and/or individually. Pages 335337Difficulty Hard 109. Various factors have contributed to the increased immenseness of packaging as a marketing tool. 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 pay a little more for convenience, appearance, dependability, and prestigiousness of better packages. Company and brand imagepackages contribute to instant recognition of the company or brand. base opportunityinnovative packaging can adopt large benefits to consumers and profits to producers. Page 339Difficulty HardAACSB Reflective Thinking 110. Sellers must guess 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 skill as well as human body the product a label might describe the product and the label might come on the product. A label may contain learning 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. augment 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 excite 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 An swer dPage 320Difficulty MediumAACSB Analytic Skills114. ________ are major purchases and are usually bought straightway 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, mountain bikes come in a miscellany 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 accelerate to 60 miles per hour within 10 seconds, and every Porsche 911 coming off the manufacture 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 plate products is a abundant 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 running(a) 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 aPage 325Difficulty MediumAACSB Reflective Thinking 118. When Baxter Medical 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 Thinking 121. Happy Home Products produces detergents, toothpaste, bar soap, disposable diapers, and composition 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 si tuation 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 fate 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 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 331Difficulty MediumAACSB Reflective Thinking 124. Marriott federation 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 div ersification 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, ground upon performance and features. This is an example of what type of product-mix pricing? a. clothed-price pricing b. Product-line pricing c. spin-off pricing d. Two-part pricing e. Optional-feature pricing Answer bPage 335Difficulty MediumAACSB Reflective Thinking 126. Purchasers of theatre tickets receive a 20% discount if they purchase and pay for the full era 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 inside highly 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. cooperative marketing b. co-branding c. retail co-branding d. chemical element branding e. none of the above Answer cPage 337Difficulty MediumAACSB Reflective Thinking 128. Betty Crocker coat 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 sumptuosity 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. auxiliary 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 levelheaded 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 fluff 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 absolutely Answer 131. A manufacturer is contemplating introducing a product that is inferior to its competition in its performance, design, and fu nctionality.However, the manufacturer believes that good brand marketing can overcome these shortfalls. why is this thinking incorrect? Suggested Answer At the knocker 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 consumed is important for marketers. This selective 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 us ing 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 understand where your products fit. List these products and their appropriate marketing-mix strategies. Suggested Answer (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, an d 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. Suggested 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 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. 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 services. Pages 320321Difficulty HardAACSB Analytic Skills 136. In your position as a marketing manager for a small industrial company, you have been asked by the prexy to help differentiate the companys 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 correspond 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?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 big boys in terms of price and promotion. Instead, you have decided to outdesign them. What is necessary for this strategy 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 turn out how much to invest in form, feat ure 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 knob 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. in the beginning 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. 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 strategi es? Suggested Answer These four product-mix dimensions earmark 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 heighten its product mix. Finally, a company can comply more product-line consistency. Page 329Difficulty MediumAACSB Reflective Thinking 142. As the newest member of the marketing department, your immediate boss asks you to gossiper on the companys proposal to add two new shoes to the companys middle-of-the-road pricing and product-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. Pages 335336Difficulty Medium 144. Your firm is contemplating a bundling strategy for its line of products. In a memo to your boss, you summary 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 absolute elision 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 conjureing 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 persuade 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 army product contains the ingredient. Fourth, a coordinated pull and crowd program must help consumers understand the vastness and advantages of the branded ingredient.Page 339Difficulty HardAACSB Reflective Think ing 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 due 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 overall 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 for the final package.In an internal memo to your boss, you outline the objectives (both company and consumer orientated) that you wish to see implemented 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 stora ge 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 contemplating adding a guarantee component. Members of senior management are unclear as to the marketing advantages of a guarantee. How would you coax 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 perf ormance 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 takeover 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 with 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