Deck 7: Product-Selling Strategies That Add Value

Question 1

Today,the primary goal of the value-added concept is to add value by lowering the price of the product.

Answer 1

False

Question 2

One consequence of using low-price tactics will often be lower profits.

Answer 2

True

Question 3

For a growing number of customers,short-term savings that result from low prices are more important than long-term value.

Answer 3

False

Question 4

The positioning process:

A)must be continually modified to match customer wants and needs
B)is a value-added process conducted by the salesperson
C)means isolating yourself from your competitors
D)is performed by the customer as part of the buying cycle
E)should be performed every five years

Question 5

Salespeople at the dealer level can play an important role in positioning an automobile for competitive advantage.

Question 6

Two guests checking into a Hyatt Regency Hotel will likely have the same perceptions of what a clean room looks like.

Question 7

In most cases,the same sales strategy is used to sell a new and emerging product as a mature,well-established product.

Question 8

Your ability to separate yourself and your product from that of your competitors is referred to as:

A)positioning
B)differentiation
C)value processing
D)product placement
E)marketing alliance

Question 9

Salespeople have assumed an important and expanding role in differentiating products.

Question 10

The value-added product exists when salespeople meet the customer's expectation.

Question 11

Mature and well-established products are usually characterized by intense competition as new brands enter the market.

Question 12

Value creation during the transactional sale is considerable.

Question 13

Pricing decisions are made primarily during the introductory stage of the product life cycle.

Question 14

A value proposition:

A)is the set of benefits and values the company promises to deliver to customers to satisfy their needs
B)is a demand-based model
C)is best used when customers are ill-informed
D)is unrelated to the firm's positioning strategy
E)is derived from the costs of production

Question 15

Positioning is the set of benefits and values the company promises to deliver to customers to satisfy their needs.

Question 16

The decisions,activities and communication strategies that are directed toward trying to create and maintain a firm's intended product concept in the customer's mind are known as:

A)product life cycle
B)product positioning
C)value-added concept
D)potential product
E)marketing

Question 17

Advertising directed toward a mass market is usually a good way to position a complex product.

Question 18

People buy products if they fulfill a problem-solving need.

Question 19

The generic is the basic,substantive product you are selling.

Question 20

Product positioning is largely a function of:

A)management
B)the way the marketing department wishes the product would function
C)market forces
D)luck and timing
E)the way salespeople,with the marketing department,differentiate the product from others in the market

Question 21

Money that a bank has available for customer loans would be an example of a(n):

A)value-added product
B)expected product
C)generic product
D)potential product
E)customer product

Question 22

When is it NOT appropriate to use a low-price strategy?

A)when you have a transaction-focused buyer
B)when the buyer does not value quality
C)when the buyer is a high-involvement buyer
D)when the customer wants an"unbundled" product
E)when the buyer is a low-involvement buyer

Question 23

Researchers at Texas A&M University have discovered five service-quality dimensions.What are they?

A)responsiveness,reliability,empathy,tangibles and value
B)tangibles,value,reliability,continuity and assurance
C)reliability,responsiveness,value,assurance and continuity
D)empathy,assurance,responsiveness,reliability and tangibles
E)tangibles,reliability,value,empathy,and assurance

Question 24

Which of the following is a factor that determines the stage in the life cycle a product is in?

A)the length of time the product sits in the warehouse before shipping
B)the product's benefits and the importance of the needs it fulfills
C)the competitors' compensation structure for salespeople
D)changes in the product's production method
E)the length of time a product has been around

Question 25

The goal of selling strategies for new and emerging products is to:

A)encourage current customers to rebuy
B)build desire for the product
C)create relationships
D)sell more units at a lower price
E)introduce the product gradually

Question 26

Salespeople can analyze their competitors using a(n):

A)cost-benefit analysis worksheet
B)ROI calculator
C)competitive analysis worksheet
D)analysis regression
E)statistical model

Question 27

The stages a product goes through from the time it is first introduced to the market until it is discontinued is called the:

A)natural evolution
B)amortization
C)position
D)product life cycle
E)specific feature

Question 28

Which of the following is a price discount that may be offered?

A)quality discount
B)seasonal discount
C)unintentional discount
D)associate discount
E)kickbacks

Question 29

CRM systems usually contain information from which of the following sources?

A)notes entered by customers
B)hard copies of letters sent to companies
C)bank records from the company
D)records of the competitors' customers
E)call notes entered by salespeople

Question 30

Low-involvement buyers care mostly about:

A)specifications
B)durability
C)loyalty
D)brand
E)price

Question 31

Creating a value proposition is a way of:

A)choosing prices for products
B)scaling the prices to different markets
C)positioning your product
D)keeping your product on the same level as the other products in the market
E)choosing sales objectives

Question 32

Customer satisfaction arises from:

A)a combination of the product,company and salesperson
B)the product itself
C)the company that makes or distributes the product
D)the salesperson who sells and services the product
E)the price of the product

Question 33

The goal of selling strategies for mature and well-established products is to:

A)change buying habits
B)build desire for the product
C)create relationships
D)sell more units at a lower price
E)keep sales on an even level

Question 34

Satisfactions can come from:

A)the research studies done on the product
B)the board of directors of the company
C)the company that makes a competing product
D)the customer who buys the product
E)the salesperson who sells the product

Question 35

Which of the following statements about pricing policies is true?

A)Very few companies maintain a pricing strategy that focuses on meeting competition.
B)Pricing strategies often reflect the opinion of the research department on correct pricing.
C)The ability to offer the lowest price is usually the most critical factor in the sale of products and services.
D)Price discounting is a competitive tool available to large numbers of salespeople.
E)Transactional sales usually rely primarily on personality match between buyer and seller.

Question 36

What is a potential downfall of using too many technical terms during a sales presentation?

A)The customer might catch the salesperson in a misstatement.
B)The customer might be too intimidated to purchase.
C)The customer might know more about the product than the salesperson does.
D)The customer might want a product with fewer capabilities.
E)The customer might ask questions the salesperson cannot answer.

Question 37

Becoming familiar with a customer's satisfactions is necessary for a salesperson to move from:

A)transactional selling to product selling
B)solution selling to value-added selling
C)new buy selling to constructive selling
D)product selling to complimentary selling
E)product selling to solution selling

Question 38

In order to bring the Walker Hotel and Convention Center up to industry standards,each guest room was redecorated with new wallpaper,drapes,carpeting,mattresses and sofas.Mallanie Simms,sales manager for the Center,has recommended that guest rooms be upgraded with the addition of wide desks,voice mail,fax machines and 24-hour room service.From the viewpoint of most business travelers,these changes would result in the creation of a(n):

A)potential product
B)generic product
C)expected product
D)sales product
E)value-added product

Question 39

There are five service-quality dimensions.Three of them include:

A)durability,reliability and responsiveness
B)standardization,reliability and empathy
C)durability,reliability and empathy
D)reliability,responsiveness and empathy
E)responsiveness,empathy,and durability

Question 40

A good way to determine a customer's satisfactions is to:

A)ask the customer questions about their needs
B)find out what competitors are doing
C)buy a research database
D)run statistical modeling
E)conduct training sessions

Question 41

The first step in establishing a product price is to determine the firm's pricing ________.

Question 42

A front desk clerk at a ReView Hotel receives a call from a ReView Gold Rewards Member guest complaining that the wireless internet in her room is fading in and out.Without internet access,she won't be able to make her deadline for this business trip.
Why is it especially vital to maintain this guest's satisfaction with the hotel and the front desk clerk?

A)This guest is personal friends with one of the top executives of the ReView Hotel company and will report back to the executive if she is not satisfied.
B)The guest is already satisfied with the wireless service,so her cluster of satisfactions will be maintained if she is also satisfied with the hotel and the front desk clerk.
C)The guest,as a member of a company rewards club,was already satisfied,enough to join the rewards program previously,so losing a previously satisfied customer would be a waste of all the previous company and staff effort to earn the customer.
D)The hotel is priced at a high enough price point to maintain exclusivity,so all guests must be satisfied or else they would not continue to pay the high price for a room at the ReView Hotel properties.
E)The front desk clerks is,in effect,a salesperson for the ReView Hotel,and is the only employee of the hotel with which the guest will have contact,so the guest needs to be satisfied with the clerk.

Question 43

A grain supplier to cattle farmers has developed a grain mixture with nutritional additives that approximate the nutrient mixture in grass.Farmers who feed their cattle this enriched grain can sell beef and milk that taste similar to grass-fed beef and have many of the nutritional benefits to humans of grass-fed beef or dairy at a significantly lower production cost than actual grass-fed beef or dairy.
Product differentiation is key to being able to position your product and separate it from competitors' products.In what way,however,could product differentiation hurt a potential sale?

A)If your product is positioned as being strong in areas your customer does not need and weaker in areas that are important to your customer,this differentiation could cause the customer to purchase a competitors' product.
B)If your product is positioned in a way that showcases its weaknesses,then your customer will see those weaknesses and need to buy another product that will compensate for those weaknesses.
C)If your product is differentiated in the wrong way,your competitors will be able to mimic your marketing and use it to bring more attention to their products than to yours.
D)Product differentiation is a difficult art,so marketers must be sure they understand the product completely before creating any campaigns or branding.
E)Product differentiation is unlikely to hurt a potential sale,because once customers understand what your product offers they will purchase it.

Question 44

Products are born,grow up and become mature.In marketing,this process is known as the ________ ________ ________.

Question 45

A grain supplier to cattle farmers has developed a grain mixture with nutritional additives that approximate the nutrient mixture in grass.Farmers who feed their cattle this enriched grain can sell beef and milk that taste similar to grass-fed beef and have many of the nutritional benefits to humans of grass-fed beef or dairy at a significantly lower production cost than actual grass-fed beef or dairy.
If you were a sales rep for this enriched grain,how would you position it to cattle farmers relative to traditional grain?

A)as a higher-priced product that would allow them to make greater profits
B)as a higher-priced product that is more socially responsible than feeding cattle traditional grain
C)as a luxury product
D)as a product that exceeds federal standards for cattle feed
E)as a product that stores well throughout the winter

Question 46

As the level of competition increases,especially in the case of a mature product,salespeople must look more carefully into the:

A)expected product
B)potential product
C)generic product
D)value-added product
E)well-established product

Question 47

The ________ product refers to what may remain to be done or what is possible.

Question 48

Today's better educated and more demanding customers are seeking a ________ of satisfactions.

Question 49

List and describe the three parts of the product-selling model.

Question 50

Value creation investments are the highest in:

A)strategic alliance sales
B)transactional sales
C)generic sales
D)consultative sales
E)collaborative sales

Question 51

Just Candles,a supply house for scented and unscented tapers and other ceremonial candles to houses of worship,restaurants,and other establishments,has experienced a downturn in business in the last two years.Upon investigation,the owner of Just Candles has discovered that the same candles that they sell are available to their customers at a 10% lower price when ordered through the internet.As Just Candles is a supply house that does not provide other services or products but still has to maintain a storefront,they will not be able to survive if the current trend of their customers toward the internet continues.
Which of the following could Just Candles do to best recapture their previous customers and gain new customers?

A)Just Candles could focus on only one model of candles so their salespeople do not have to muddle their sales message.
B)Just Candles could make in-person sales calls to all commercial customers to let them know their business is valued.
C)Just Candles could offer value-added services to establishments such as frequent-buyer discounts and scheduled deliveries,and classes for new retail customers on decorating with candles and making candles to give customers reasons to purchase from Just Candles instead of from online retailers.
D)Just Candles could begin a customer loyalty program that includes receiving gifts of appreciation from the company every quarter that the customer purchases a minimum order and can prove that they did not order candles from another supplier during that time.
E)Just Candles could focus exclusively on customers who are not internet-savvy so they don't know that Just Candles is charging higher prices than they could find on the internet.

Question 52

A front desk clerk at a ReView Hotel receives a call from a ReView Gold Rewards Member guest complaining that the wireless internet in her room is fading in and out.Without internet access,she won't be able to make her deadline for this business trip.
What could the desk clerk do to maintain the guest's cluster of satisfactions?

A)The desk clerk cannot do anything,as the desk clerk does not have the technical skills to fix the wireless connection.
B)The desk clerk should not do anything,as the desk clerk is not a salesperson and therefore does not have responsibility for creating the cluster of satisfactions.
C)The desk clerk should offer to put the guest in an empty room as close to the original room as possible,to avoid inconveniencing the guest further.
D)The desk clerk should offer the guest the use of the lobby wireless,which the clerk knows to be problem-free,along with a discount off the charge for the room and free room service meals to offset the inconvenience of coming to the lobby.
E)The desk clerk should refund the guest's full payment for the hotel room and find the guest a room at another hotel that can guarantee that its wireless service is problem-free.

Question 53

The authors of The Discipline of Market Leaders encourage business firms to pick one of the disciplines - best price,best product,or best ________ to distinguish their offering in the marketplace.

Question 54

Research reported in the Harvard Business Review indicates that it is very difficult to build customer loyalty if you are selling only:

A)the generic product
B)the expected product
C)the potential product
D)the value-added product
E)the sales product

Question 55

Yellow Freight Systems must provide clean,well-maintained trucks and well-trained drivers.This is an example of a(n):

A)value-added product
B)generic product
C)potential product
D)expected product
E)customer product

Question 56

A front desk clerk at a ReView Hotel receives a call from a ReView Gold Rewards Member guest complaining that the wireless internet in her room is fading in and out.Without internet access,she won't be able to make her deadline for this business trip.
Abco Realty owns several rental apartment buildings in a working class but safe neighborhood that has recently become popular with young professionals because of its proximity to an express commuter train line.Abco has recently invested in the infrastructure of the buildings,adding laundry rooms,safety features to the lobbies,and new insulated windows to all the units.Because of this,Abco cannot afford to match the unit rental prices of other buildings that have not made improvements. How can the sales manager of Abco Realty differentiate Abco's units from units offered in other buildings to attract tenants?

A)The sales manager can convince management to cut expenses on basic maintenance so the apartments can be rented at prices matching other buildings in the area.
B)The sales manager can promote the neighborhood as a safe place to live with a rich history.
C)The sales manager can convince the owners of the other buildings in the area to bring their rental prices up to the prices Abco charges.
D)The sales manager can promote Abco apartments as being worth more money because they are safer and have more services.
E)The sales manager can promote Abco apartments as being worth more money because the company has spent more money on the apartments in the last year than in previous years.

Question 57

Salespeople can benefit from viewing every product as being four-dimensional.List the four "possible" products.

Question 58

When setting professional fees,which of the following is a point to consider?

A)harmony
B)incentives
C)transportation of goods
D)value
E)product life cycle

Question 59

A grain supplier to cattle farmers has developed a grain mixture with nutritional additives that approximate the nutrient mixture in grass.Farmers who feed their cattle this enriched grain can sell beef and milk that taste similar to grass-fed beef and have many of the nutritional benefits to humans of grass-fed beef or dairy at a significantly lower production cost than actual grass-fed beef or dairy.
Which products would enriched grain most likely be competing most closely with?

A)traditional grain mixtures for cattle
B)grass-fed beef and dairy from grass-fed cows
C)nutritional supplements for commercial cattle production
D)organic cattle farmers
E)plastic pellets sold as cattle feed

Question 60

Just Candles,a supply house for scented and unscented tapers and other ceremonial candles to houses of worship,restaurants,and other establishments,has experienced a downturn in business in the last two years.Upon investigation,the owner of Just Candles has discovered that the same candles that they sell are available to their customers at a 10% lower price when ordered through the internet.As Just Candles is a supply house that does not provide other services or products but still has to maintain a storefront,they will not be able to survive if the current trend of their customers toward the internet continues.
Which of the following could Just Candles do to best recapture their previous customers and gain new customers?

A)Just Candles could lower their prices on less popular candles to create "loss leaders" that would induce new customers to purchase regularly-priced candles from them.
B)Just Candles could shut down their retail location to cut overhead and move their business to the internet,where they could charge lower prices and compete with other internet candle retailers.
C)Just Candles could send out a mailing to all their customers reminding them that they carry a full line of candles.
D)Just Candles could move their store to a more expensive location in the mall.
E)Just Candles could announce a "candle of the month" program to discount candles that traditionally haven't sold as well as their other candles.

Question 61

A designer releases her fall line of handbags,including one that retails for $6,000.This bag is a limited edition;only 500 will be produced,and orders will only be accepted from clients who have previously purchased a handbag from the designer.They will be put on a waitlist for the handbag in the order in which they are received.
How could lowering prices to capture a higher share of the market be a strategic advantage to a company?

A)Lowering prices will reduce the company's overall profits,whether they have the largest market share or not.
B)Lowering prices will allow a company to force its competitors to sell at a lower price that they can afford to,which will drive them into bankruptcy.
C)A company with the largest share of the market does not have to comply with the same safety regulations and production controls that other companies do.
D)A company with the largest share of the market is seen as the leader so customers think of it as the default and require less sales effort to close a sale.
E)A company with the largest share of the market can cut costs and raise prices without the public noticing or switching to competitors.

Question 62

A designer releases her fall line of handbags,including one that retails for $6,000.This bag is a limited edition;only 500 will be produced,and orders will only be accepted from clients who have previously purchased a handbag from the designer.They will be put on a waitlist for the handbag in the order in which they are received.
In recent years,the "fax attack" model of car shopping has become popular.In a "fax attack," a customer sends a fax to every car dealership within a certain radius listing the make and features of the car they would like,along with the price they are willing to pay,and asks dealerships that will match that price to contact the customer.In essence,the customers set both the features and the price for the car. How could a dealership that responds to a "fax attack" differentiate itself positively from the other dealerships that respond?

A)The dealership could offer to supply the car in a more popular color at a slightly higher price than requested in the fax.
B)The dealership could offer a level of service and courtesy,at the same price other dealers provided,that would transform the purchase from purely transactional to a surprisingly satisfying experience for the customer.
C)The dealership could offer to refer the customer to another dealership that would supply the car at a lower price even than the customer requested.
D)The dealership could steer the customer to a more expensive car with a better safety record to demonstrate concerns for the customer's welfare.
E)The dealership could refuse to match the fax attack price because it does not want to compromise its profit margin.

Question 63

A designer releases her fall line of handbags,including one that retails for $6,000.This bag is a limited edition;only 500 will be produced,and orders will only be accepted from clients who have previously purchased a handbag from the designer.They will be put on a waitlist for the handbag in the order in which they are received.
A buyer who gathers information on all aspects of the product,from the product development process to production methods to service contracts to experience levels of service providers,and who consults with the salesperson on configuring the product as well as using the product,is most likely to respond to which of the following strategies?

A)lowering the price significantly from list price to undercut competitors
B)creating rapport with the buyer to create satisfaction with the salesperson and the company
C)adding value by tailoring the product to the buyer's needs and providing a high level of service
D)augmenting the product by adding features without charging for them
E)differentiating on image and appealing to the buyer's sense of style and desire for quality

Question 64

A designer releases her fall line of handbags,including one that retails for $6,000.This bag is a limited edition;only 500 will be produced,and orders will only be accepted from clients who have previously purchased a handbag from the designer.They will be put on a waitlist for the handbag in the order in which they are received.
Product positioning is important for all products,whether they are new to the market or have been available for years.The largest difficulty in positioning a new product to sell instead of a mature or well-established product is:

A)repositioning the product when market conditions change.
B)showing that the product is better than more recent entries into the market.
C)avoiding a boring,"establishment" image in the customer's mind if that is not the brand message.
D)creating a need for a product the customer doesn't know existed.
E)finding talented marketers to refine the brand image for the product.

Question 65

A designer releases her fall line of handbags,including one that retails for $6,000.This bag is a limited edition;only 500 will be produced,and orders will only be accepted from clients who have previously purchased a handbag from the designer.They will be put on a waitlist for the handbag in the order in which they are received.
How is this handbag being positioned and differentiated from other handbags similar in manufacturing and look?

A)The handbag is being positioned on price.
B)The handbag is being positioned on exclusivity.
C)The handbag is being positioned on convenience.
D)The handbag is being positioned on design.
E)The handbag is being positioned on versatility.

Question 66

A designer releases her fall line of handbags,including one that retails for $6,000.This bag is a limited edition;only 500 will be produced,and orders will only be accepted from clients who have previously purchased a handbag from the designer.They will be put on a waitlist for the handbag in the order in which they are received.
How does the waitlist relate to the cluster of satisfactions?

A)For those who are able to purchase the handbag,the waitlist is a challenge they surmount to own the handbag,so the bag feels more valuable to own.
B)For those who are able to purchase the handbag,the waitlist determines who has the financial resources to pay for the handbag.
C)For those who are able to purchase the handbag,the waitlist creates a barrier to purchasing that makes them ultimately dissatisfied about owning the handbag.
D)The waitlist is a psychological barrier that leaves the general public with the desire to purchase the handbag but not the ability.
E)The waitlist makes those on it feel competitive with each other.

Question 67

A designer releases her fall line of handbags,including one that retails for $6,000.This bag is a limited edition;only 500 will be produced,and orders will only be accepted from clients who have previously purchased a handbag from the designer.They will be put on a waitlist for the handbag in the order in which they are received.
Competing on price is most likely to work with which of the following buyers?

A)a high-involvement buyer who values quality and durability
B)a high-involvement buyer who is willing to research features and performance extensively
C)a low-involvement buyer who has a tight budget
D)a low-involvement buyer who is unwilling to go out of a geographic region to purchase
E)a low-involvement buyer who asks an employee to make the buying decision