Deck 12: Setting Product Strategy

Question 1

Capital items are long-lasting goods that facilitate developing or managing the finished product. They include two groups: installations and

A) component materials.
B) farm products.
C) natural products.
D) operating supplies.
E) equipment.

Answer 1

E

Question 2

When companies search for new ways to satisfy customers and distinguish their offering from others, they look at the ________ product, which encompasses all the possible augmentations and transformations of the product.

A) expected
B) basic
C) potential
D) consumption system
E) augmented

Answer 2

C

Question 3

The components of the market offering must be meshed so that they are ________ attractive.

A) benefit
B) competitively
C) valuably
D) augmented
E) feature

Answer 3

B

Question 4

________ are major purchases and are usually bought directly from the producer with the typical sale preceded by long negotiation periods.

A) Raw materials
B) Business services
C) Installations
D) Capital goods
E) Materials and parts

Question 5

The five product levels constitute a ________. At each level more customer value is added.

A) customer perceived value
B) customer consumption system
C) customer augmented product
D) customer value hierarchy
E) customer hierarchy

Question 6

________ are similar in quality but different enough in price to justify shopping comparisons.

A) Heterogeneous shopping goods
B) Homogeneous shopping goods
C) Specialty goods
D) Emergency goods
E) Preference goods

Question 7

In planning its market offering, the marketer needs to address five product levels. Which of these levels refers to the service or benefit the customer is really buying?

A) core benefit
B) augmented product
C) potential product
D) basic product
E) product usage/purpose

Question 8

Examples of products such as insurance, cemetery plots, and smoke detectors, are examples of ________ that are products that the consumer does not know about or does not normally think of buying.

A) homogeneous shopping goods
B) convenience goods
C) unsought goods
D) heterogeneous shopping goods
E) specialty goods

Question 9

The customer will judge the offering by three basic elements: ________, services mix and quality, and price.

A) salespeople
B) price
C) performance
D) core benefit
E) product features and quality

Question 10

The vast array of goods consumers buy can be classified on the basis of shopping habits. We can distinguish among convenience, ________, specialty, and unsought goods.

A) shopping
B) functional
C) business
D) "must haves"
E) impulse

Question 11

How a consumer shops for organic foods and how they use and dispose of the product is part of the consumer's ________ that is important for marketers to consider.

A) belief system
B) customer value system
C) basic product system
D) potential system
E) consumption system

Question 12

Marketing planning begins with the formulation of an offering to ________ target customers' needs or wants.

A) compete with
B) meet
C) comprehend
D) capture
E) exceed

Question 13

Materials and parts are goods that enter the manufacturer's product completely. They fall into two classes: ________, and natural products.

A) component materials
B) component parts
C) raw materials
D) farm products
E) none of the above

Question 14

The way the user performs the tasks of getting and using products and related services is the user's total

A) augmented system.
B) core benefit system.
C) consumable system.
D) consistent use system.
E) consumption system.

Question 15

Marketers have traditionally classified products on the basis of characteristics: ________, tangibility, and use.

A) durability
B) augmented
C) expected
D) customer value hierarchy
E) none of the above

Question 16

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) augmented product
C) consumption system
D) potential product
E) basic product

Question 17

The seller of ________ goods carry a wide assortment to satisfy individual tastes and must have well-trained salespeople to inform and advise customers. Examples include furniture, clothing, and major appliances stores.

A) homogeneous shopping goods
B) convenience goods
C) unsought shopping goods
D) specialty shopping goods
E) heterogeneous shopping goods

Question 18

Industrial goods can be classified in terms of how they enter the production process and their relative costliness. We can distinguish three groups of industrial goods: ________, capital items, and suppliers and business services.

A) pieces and parts
B) service components
C) specialty goods
D) materials and parts
E) sub-assemblies

Question 19

The consumer usually purchases ________ frequently, immediately, and with a minimum of effort.

A) specialty goods
B) convenience goods
C) "must haves" goods
D) shopping goods
E) personal goods

Question 20

Supplies and business services are short-term goods and services that facilitate ________ or managing the finished product.

A) building
B) repairing
C) inspecting
D) developing
E) creating

Question 21

Campbell Soups all feature the name "Campbell Soup" on their packaging first then the particular variety such as Cream of Mushroom. This is an example of a firm using what level of product hierarchy to market its products?

A) product family
B) need family
C) item
D) product type
E) product line

Question 22

________ refers to the training the customer's employees to use the vendor's equipment properly and efficiently.

A) Technical training
B) Client marketing
C) Customer relationships
D) Customer training
E) Internal marketing

Question 23

________ describes the product's look and feel to the buyer; it has an advantage of creating distinctiveness that is/might be difficult to copy.

A) Durability
B) Style
C) Design
D) Form
E) Conformance

Question 24

The branding of products that have similar characteristics, form, features, and benefits is a tough job for marketers. Some marketers have had success with products like Lilydale chickens and Bayer aspirins. Others struggle to keep their brand names out of "common usage" such as Xerox and Kleenex for copiers and tissues. Which of the following bases for differentiation involves calculating customer value versus company cost?

A) style
B) reliability
C) features
D) durability
E) form

Question 25

A ________ is the set of all products and items a particular seller offers for sale.

A) product system
B) family of products
C) product class
D) product mix
E) product line

Question 26

A ________ is defined as a distinct unit within a brand or product line distinguishable by size, price, appearance, or some other attribute.

A) product line
B) UPC (uniform product code)
C) stock keeping unit (SKU)
D) product type
E) stock unit (SU)

Question 27

Most products can be offered with varying ________ that supplement its basic function.

A) features
B) reliability
C) forms
D) flavours
E) conformance qualities

Question 28

Most products are established at one of four performance levels: low, average, high or superior. For example, mountain bikes come in a variety of sizes and physical attributes. When a consumer purchases a mountain bike costing $1000 she/he expects the bike to perform to specifications and to have a high ________ meeting the promised specifications.

A) performance quality
B) conformance quality
C) reliability
D) features
E) durability

Question 29

________ recognize the emotional power of design and the importance to consumers of how things look and feel.

A) Key marketers
B) Italian marketers
C) Integrated marketers
D) Holistic marketers
E) Savvy marketers

Question 30

________ is the level at which the product's primary characteristics operate.

A) Reparability
B) Conformance quality
C) Performance quality
D) Durability
E) Design

Question 31

When Baxter Medical supplied their hospitals with computer terminals directly linked to Baxter's ordering system, this was an example of a company differentiating itself versus competition in terms of

A) delivery ease.
B) customer relationships.
C) ordering ease.
D) customer training.
E) installation.

Question 32

A consumer products firm manufacturers and sells over 200 different sizes and varieties of jams and jellies. We can say that this manufacturer's product mix has a ________ of products in this category.

A) continuity
B) depth
C) length
D) width
E) product assortment

Question 33

When the physical product cannot be easily differentiated, the key to competitive success may lie in adding valued services and improving their quality. The main service differentiators are ordering ease, delivery, installation, ________, customer consulting, maintenance, and repair.

A) customer training
B) customer limiting
C) niche marketing
D) customer marketing
E) customer orders

Question 34

Many products can be differentiated in terms of ________; the size, shape, or physical structure.

A) reliability
B) conformance quality
C) design
D) form
E) performance quality

Question 35

In increasingly fast-paced markets, prices, and technology are not enough. ________ is the factor that will often give a company its competitive edge and is defined as the totality of features that affect how a product looks and functions in terms of customer requirements.

A) Design
B) Services
C) Performance
D) Style
E) Reliability

Question 36

Buyers expect products to have a high ________, which is the degree to which all the produced units are identical and meet the promised specifications.

A) form
B) conformance quality
C) reliability
D) durability
E) performance quality

Question 37

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) composition
B) consistency
C) width
D) depth
E) length

Question 38

A product hierarchy stretches from basic needs to particular items that satisfy those needs. Which of the following levels of a product's hierarchy involves a group of products having a certain functional coherence?

A) product line
B) product class
C) product family
D) extended family
E) need family

Question 39

________ refers to data, information systems, and advice services that the seller offers to their buyers.

A) Internal marketing
B) Customer relationships
C) Sales force relationships
D) Customer consulting
E) Customer training

Question 40

Delivery refers to how well the product or service is delivered to the customer. It includes speed, ________, and care attending the delivery process.

A) completeness
B) type of delivery services
C) accuracy
D) length of time for delivery
E) attributes

Question 41

With regards to product-line pricing, companies normally develop product lines rather than single products and introduce price steps. The seller's task is to establish ________ quality differences between these price steps.

A) imaginary
B) monetary
C) perceived
D) actual
E) functional

Question 42

In ________ the seller offers goods both individually and in bundles and often charges less for the "bundle" than for the individual products.

A) two-part pricing
B) pirating pricing
C) pure bundling
D) captive pricing
E) mixed bundling

Question 43

When a company positioned in the "middle" market may want to introduce a lower-priced product line this is an example of

A) down-market stretch.
B) maintenance.
C) line modernization.
D) up-market stretch.
E) product-line length.

Question 44

A product line can also be lengthened by adding more items within the present range. There are several motives for line filling: ________, trying to satisfy dealers who complain about lost sales because of missing items in the line, trying to utilize excess capacity, and others.

A) reaching for incremental capacity
B) responding to consumer wishes
C) responding to sales force demands
D) reaching for incremental profits
E) responding to senior management wishes

Question 45

The main point in segmenting products into different classes is that companies should recognize that these items ________ in their potential for being priced higher or advertised more as ways to increase sales, margins, or both.

A) compete
B) respond to advertising differently
C) are less elastic
D) are more elastic
E) differ

Question 46

A benefit of product mapping is that it identifies ________.

A) market segments
B) target markets
C) market matrixes
D) consumers
E) none of the above

Question 47

Price-setting logic must be modified when the product is part of a product mix. In that case, the firm searches for a set of prices that ________ profits on the total mix.

A) is ineffective on total
B) capitalizes upon
C) minimizes
D) has no effect on total
E) maximizes

Question 48

A company can classify its products into four types that yield different gross margins, depending upon sales volume and promotional costs. In the case of personal computers, which of the following classifications would apply to items with lower sales volume and no promotion, such as faster CPUs?

A) staples
B) core product
C) convenience items
D) shopping goods
E) specialties

Question 49

In offering a product line, companies normally develop a ________ and modules that can be added to meet different customer requirements.

A) "best selling" item
B) product
C) basic platform
D) convenience item
E) staple item

Question 50

In today's rapidly changing product markets, modernization of the product line is continuous. Companies plan improvements to encourage customer migration to

A) lower-price, lower-value items
B) high-priced, high-valued items
C) higher mark-up products.
D) superior products.
E) higher margin items.

Question 51

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

A) services
B) core
C) specialty
D) convenience
E) staple

Question 52

Some service firms often engage in ________, consisting of a fixed fee plus a variable usage fee.

A) two-part pricing
B) pure pricing
C) mixed pricing
D) pure bundling
E) captive pricing

Question 53

Companies that wish to enter the high end of the market can introduce products that cater to that market. This is an example of

A) maintenance.
B) up-market stretch.
C) down-market stretch.
D) product-line length.
E) product-line analysis.

Question 54

Marriott Corporation now contains hotels and motels at 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) two-way stretch
B) down-market stretch
C) cross stretch
D) marketing diversification
E) up-market stretch

Question 55

If line filling is overdone it could result in ________ and customer confusion.

A) manufacturing inefficiencies
B) just noticeable difference
C) self-cannibalization
D) self-sacrifice
E) sales paralysis

Question 56

________ occurs when a company lengthens its product line beyond its current range.

A) Product reach
B) Line stretching
C) Market reach
D) Product adaptations
E) Line shrinking

Question 57

Product-line analysis provides information for two key decision areas product-line length and

A) popular pricing.
B) line stretching.
C) product pricing.
D) product-length new items.
E) product-mix pricing.

Question 58

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) product-line pricing
B) captive-price pricing
C) optional-feature pricing
D) by-product pricing
E) two-part pricing

Question 59

A manufacturer of hiking boots looks at data that indicates that their sub-segment of the market called "serious hiker" is declining and is predicted to decline into the future. The firm decides to enter the "low-price" segment with its new items. This is an example of a firm using a ________ to reach a new market.

A) two-way stretch
B) line fill
C) down-market stretch
D) up-market stretch
E) market stretch

Question 60

A company with many products must ensure that each of its products possess a ________ with the consumer.

A) relationship
B) status
C) noticeable difference
D) just-noticeable difference
E) niche

Question 61

The potential disadvantages of co-branding are the risks and lack of control from becoming aligned with another brand in the consumer's mind. Consumer ________ about the level of involvement and commitment with co-brands are likely to be high, so unsatisfactory performance could have negative repercussions for the brands involved.

A) values
B) expectations
C) primary service features
D) pricing
E) perceptions

Question 62

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 strategy to use a strong guarantee in this instance is "sound" because

A) the product is so superior to competition that there will be no claims for refunds.
B) it is an example of a misleading or false advertising and is illegal.
C) for a product that is not too well known it is "good advertising" because the claims will be a small percentage of sales.
D) it is just "advertising fluff" and the manufacturer has no intentions of refunding money.
E) for a product that is not too well known it reduces the buyer's perceived risk in purchasing.

Question 63

________ is a special case of co-branding involving creating brand equity for materials, components, or parts that are necessarily contained within other branded products.

A) Sales branding
B) Advertising branding
C) Ingredient branding
D) Component branding
E) Tied-in branding

Question 64

McDonald's restaurants inside Walmarts and Starbucks inside Chapters are examples of ________ whose main advantages are that the products can or may be convincingly positioned by virtue of the associated brands.

A) partner branding
B) cooperative marketing
C) co-branding
D) ingredient branding
E) retail co-branding

Question 65

After packaging is designed, it must be tested. Which of the following is conducted to ensure the script is legible?

A) stress testing
B) dealers testing
C) consumer testing
D) engineering tests
E) visual testing

Question 66

Many sellers offer either general or specific guarantees. Guarantees reduce the buyer's ________ risk.

A) stated
B) implied
C) real
D) actual
E) perceived

Question 67

Purchasers of theatre tickets receive a 20 percent discount if they purchase and pay for the full season at one time. This is an example of what type of product-mix pricing?

A) captive-pricing
B) two-part pricing
C) mixed bundling
D) pure bundling
E) cross-promotion

Question 68

Sales of luxury goods such as perfumes, colognes, and after shaves depend heavily upon their initial response by the consumer. Packages can act as five-second commercials for the product. Which of the three levels of packaging is this "five-second commercials"?

A) consumer
B) secondary
C) retailer
D) primary
E) shipping

Question 69

Packaging can increase sales and profits for a firm if done correctly. Dutch Boy Paints introduced their Twist & Pour paint container that is significantly different from other paint cans. From the perspective of a marketer, and consumer, packaging must achieve a number of objectives. Which of the following objectives best fits the Dutch Boy container?

A) aid product consumption
B) identify the brand
C) convey descriptive and persuasive information
D) facilitate transportation
E) assist at-home storage

Question 70

To achieve the marketing objectives for the brand and satisfy the desires of consumers, the ________ and functional components of packaging must be chosen correctly.

A) colours
B) characters
C) aesthetics
D) logo
E) brand name

Question 71

Labels perform several functions. Which function involves letting consumers know what the package contains?

A) description
B) pricing
C) promotion
D) gradation
E) identification

Question 72

Various factors have contributed to the growing use of packaging as a marketing tool. Which of these factors involves incorporating unique materials and features?

A) consumer influence
B) self-service
C) innovation opportunities
D) company and brand images
E) consumer affluence

Question 73

Betty Crocker cake 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) same company co-branding
B) self-branding
C) mixed branding
D) retail co-branding
E) ingredient co-branding

Question 74

________ are formal statements of expected product performance by the manufacturer.

A) Marketing statements
B) Reputation
C) Guarantees
D) Warranties
E) Insurance

Question 75

The main advantage of co-branding is that a product may be convincingly positioned by virtue of the ________ involved. Co-branding can generate greater sales from the existing target market as well as open additional opportunities with new consumers and channels.

A) bundled package
B) branding synergy
C) byproduct pricing
D) multiple brands
E) increased advertising dollars

Question 76

A label performs several functions for a product. Attractive graphics are used to ________ the product inside.

A) classify
B) grade
C) describe
D) identify
E) promote

Question 77

We define packaging as all the activities of designing and producing the container for a product. This includes up to three levels of material: primary package, secondary package, and

A) label package.
B) retailer package.
C) design package.
D) consumer package.
E) shipping package.

Question 78

Products are often combined with other products (from other companies or from other divisions) and this is called

A) cooperative advertising.
B) "in-house" branding.
C) co-branding.
D) two-part branding.
E) co-marketing.

Question 79

Guarantees are most effective in two situations. The first is when the company or products are not well known and the second is when the product's quality is ________ to competition.

A) superior
B) equivalent
C) different
D) not known
E) inferior

Question 80

In selling your product to an end-user, you say, "this product is guaranteed for life." However, this guarantee is not in writing because your firm does not wish to go on record making such a claim. A few months later, this same consumer, returns to your shop, says that the product has failed, and wishes a replacement. You claim that because the statement "this product is guaranteed for life" is not in writing that you do not owe the consumer a new product. Senior management interferes and states, "Warranties whether expressed or implied are ________."

A) not the same as a guarantee.
B) part of the advertising concept.
C) legally enforceable.
D) not legally enforceable.
E) at the discretion of the marketer.