Marketing Management Test Bank

Marketing Management, 14e (Kotler/Keller)
Chapter 12 Setting Product Strategy

1) A ________ is anything that can be offered to a market to satisfy a want
or need, including physical goods, services, experiences, events, persons,
places, properties, organizations, information, and ideas.
A) function
B) product
C) benefit
D) process
E) structure
Answer: B
Page Ref: 325
Objective: 1
Difficulty: Easy

2) A customer judges a product offering by three basic elements: product
features and quality, services mix and quality, and ________.
A) performance
B) utility
C) tangibility
D) price
E) availability
Answer: D
Page Ref: 325
Objective: 1
Difficulty: Moderate

3) The five product levels constitute a ________. At each level more
customer value is added.
A) product line
B) business model
C) customer value-hierarchy
D) value grid
E) demand chain
Answer: C
Page Ref: 326
Objective: 1

4) 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) consumption
B) expected
C) potential
D) augmented
E) basic
Answer: C
Page Ref: 326
Objective: 1

5) The way the user performs the tasks of getting and using products and
related services is the user's total ________.
A) consumption system
B) consumable system
C) consistent use system
D) augmented system
E) potential system
Answer: A
Page Ref: 326
Objective: 1
Difficulty: Easy

6) 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 him/her to walk unobstructed. This is an example of what level in
the consumer-value hierarchy?
A) pure tangible good
B) basic product
C) augmented product
D) potential product
E) generic product
Answer: B
Page Ref: 326
Objective: 1
AACSB: Analytic skills

7) How a consumer shops for organic foods and how he or she uses and
disposes of the product is part of the consumers' ________ that is
important for marketers to consider.
A) value proposition
B) consumption system
C) value system
D) quality perception
E) value chain
Answer: B
Page Ref: 326
Objective: 1
Difficulty: Easy

8) The sellers of ________ goods carry a wide assortment to satisfy
individual tastes and must have well-trained salespeople to inform and
advise customers.
A) unsought
B) specialty
C) convenience
D) heterogeneous shopping
E) generic
Answer: D
Page Ref: 327
Objective: 1

9) Marketers have traditionally classified products on the basis of three
characteristics: ________, tangibility, and use.
A) availability
B) affordability
C) aesthetics
D) durability
E) necessity
Answer: D
Page Ref: 327
Objective: 1
Difficulty: Easy

10) Which of the following are tangible goods that normally survive many
uses?
A) generic goods
B) durable goods
C) core benefits
D) convenience goods
E) unsought goods
Answer: B
Page Ref: 327
Objective: 1
Difficulty: Easy

11) Because ________ are purchased frequently, marketers should make them
available in many locations, charge only a small markup, and advertise
heavily to induce trial and build preference.
A) nondurable goods
B) durable goods
C) services
D) unsought goods
E) specialty goods
Answer: A
Page Ref: 327
Objective: 1
Difficulty: Easy

12) What types of goods are purchased frequently, immediately, and with
minimum effort by the consumers?
A) specialty goods
B) shopping goods
C) unsought goods
D) durable goods
E) convenience goods
Answer: E
Page Ref: 327
Objective: 1

13) It was sunny when Jenny went to class, but by the time class was over
it was raining heavily, so Jenny stopped by the student store to buy an
umbrella before she walked back to her dorm. In this case, the umbrella is
an example of a(n) ________.
A) impulse good
B) specialty good
C) homogeneous shopping good
D) emergency good
E) heterogeneous shopping good
Answer: D
Page Ref: 327
Objective: 1

14) What goods are similar in quality but different enough in price to
justify shopping comparisons?
A) emergency goods
B) homogeneous shopping goods
C) heterogeneous shopping goods
D) specialty goods
Answer: B
Page Ref: 327
Objective: 1

15) 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) specialty goods
B) unsought goods
C) heterogeneous shopping goods
D) homogeneous shopping goods
Answer: B
Page Ref: 327
Objective: 1
Difficulty: Easy

16) Industrial goods can be classified as ________, capital items, or
suppliers and business services based on their relative cost and how they
enter the production process.
A) service components
B) sub-assemblies
C) accessories
D) specialty goods
E) materials and parts
Answer: E
Page Ref: 327
Objective: 1
Difficulty: Easy

17) ________ are the major factors influencing the selection of suppliers
for natural products.
A) Price and delivery reliability
B) Product features and customization
C) Price and customization
D) Delivery reliability and product features
E) Customization and delivery reliability
Answer: A
Page Ref: 328
Objective: 1

18) Capital items are long-lasting goods that facilitate developing or
managing the finished product. They include two groups: installations and
________.
A) natural products
B) component materials
C) operating supplies
D) equipment
E) processed materials
Answer: D
Page Ref: 328
Objective: 1
Difficulty: Easy

19) The two kinds of supplies with respect to industrial goods
classification are maintenance and repair items, and ________.
A) installations
B) operating supplies
C) processed materials
D) component materials
E) equipment
Answer: B
Page Ref: 328
Objective: 1
Difficulty: Easy

20) ________ are major purchases and are usually bought directly from the
producer with the typical sale preceded by long negotiation periods.
A) Raw materials
B) Materials and parts
C) Processed materials
D) Capital goods
E) Installations
Answer: E
Page Ref: 328
Objective: 1
Difficulty: Easy

21) 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 $1,000, she/he expects the bike to perform to specifications and to
have a high ________ meeting the promised specifications.
A) features
B) conformance quality
C) durability
D) performance quality
E) reliability
Answer: D
Page Ref: 329
Objective: 2
Difficulty: Difficult

22) Many products can be differentiated in terms of their ________, which
is its size, shape, or physical structure.
A) form
B) prototype
C) architecture
D) model
E) blueprint
Answer: A
Page Ref: 329
Objective: 2
Difficulty: Easy

23) ________ is the ability of a company to prepare on a large-scale basis
individually designed products, services, programs, and communications.
A) Mass customization
B) Reverse engineering
C) Interoperability
D) Backward compatibility
E) Benchmarking
Answer: A
Page Ref: 329
Objective: 2

24) ________ is the level at which the product's primary characteristics
operate.
A) Design
B) Conformance quality
C) Reparability
D) Performance quality
E) Durability
Answer: D
Page Ref: 329
Objective: 2

25) Buyers expect products to have high ________, which is the degree to
which all the produced units are identical and meet the promised
specifications.
A) durability
B) compatibility
C) conformance quality
D) form
E) performance quality
Answer: C
Page Ref: 329
Objective: 2

26) Most products can be offered with varying ________ that can supplement
its basic function.
A) degrees of reliability
B) conformance qualities
C) features
D) forms
E) designs
Answer: C
Page Ref: 329
Objective: 2
AACSB: Reflective thinking
Difficulty: Easy

27) If the Ford GT is designed to accelerate to 50 miles per hour within 10
seconds, and every Ford GT coming off the assembly line does this, the
model is said to have high ________.
A) reliability
B) conformance quality
C) durability
D) compatibility
E) interoperability
Answer: B
Page Ref: 329-330
Objective: 2

28) ________ describes the product's look and feel to the buyer; it has an
advantage of creating distinctiveness that is difficult to copy.
A) Design
B) Style
C) Durability
D) Conformance
E) Reliability
Answer: B
Page Ref: 330
Objective: 2
Difficulty: Easy

29) Ideal ________ would exist if users could fix the product themselves
with little cost in money or time.
A) durability
B) reliability
C) style
D) design
E) reparability
Answer: E
Page Ref: 330
Objective: 2

30) ________ is a measure of the probability that a product will not
malfunction or fail within a specified time period.
A) Reparability
B) Durability
C) Reliability
D) Specialty
E) Compatibility
Answer: C
Page Ref: 330
Objective: 2
Difficulty: Easy

31) 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) technology intensity
B) responsivity
C) ease of use
D) customer training
E) adaptability
Answer: D
Page Ref: 331
Objective: 2

32) Delivery refers to how well the product or service is brought to the
customer. It includes speed, ________, and care throughout the delivery
process.
A) expedience
B) intensity
C) tangibility
D) performance
E) accuracy
Answer: E
Page Ref: 331
Objective: 2

33) ________ refers to educating the customer's employees to use the
vendor's equipment properly and efficiently.
A) Customer training
B) Open innovation
C) Crowdsourcing
D) Co-development
E) Collaborative research
Answer: A
Page Ref: 331
Objective: 2
Difficulty: Easy

34) ________ refers to data, information systems, and advice services that
the seller offers to their buyers.
A) Sales force relationships
B) Customer relationships
C) Open source technology
D) Customer training
E) Customer consulting
Answer: E
Page Ref: 331
Objective: 2

35) Differentiating on ________ is important for companies with complex
products and becomes an especially good selling point when targeting
technology novices.
A) delivery
B) ordering ease
C) ease of installation
D) customer consulting
E) reparability
Answer: C
Page Ref: 331
Objective: 2

36) ________ describes the service program for helping customers keep
purchased products in good working order.
A) Returns
B) Ordering ease
C) Installation
D) Maintenance and repair
E) Delivery
Answer: D
Page Ref: 331
Objective: 2

37) Which of the following actions would result in the elimination of
uncontrollable returns of products in the short run?
A) improved handling
B) better packaging
C) improved transportation
D) proper storage
E) cannot be eliminated
Answer: E
Page Ref: 331
Objective: 2

38) Smith & Adams Poultry has recently upgraded its transactional model
such that its customers (restaurants and hotels) can communicate with its
central supply system to indicate purchase volumes, dates, and receive
confirmation, through their computer terminals. This is 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: E
Page Ref: 331
Objective: 2

39) Realizing that although household products is a huge category, taking
up an entire supermarket aisle or more, it is an incredibly boring one, the
founders of Method Products designed a sleek, uncluttered dish soap
container that also carried functional advantages, such as ease of
dispensing soap and cleaning. 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: A
Page Ref: 332
Objective: 3

40) In increasingly fast-paced markets, price 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, feels, and functions in terms of customer requirements.
A) Conformance
B) Design
C) Performance
D) Reliability
E) Style
Answer: B
Page Ref: 332
Objective: 3

41) A group of products within a product class that are closely related
because they perform a similar function, are sold to the same customer
groups, are marketed through the same outlets or channels, or fall within
given price ranges is known as a ________.
A) product type
B) product class
C) need family
D) product variant
E) product line
Answer: E
Page Ref: 336
Objective: 4
Difficulty: Easy

42) A(n) ________ is defined as a distinct unit within a brand or product
line distinguishable by size, price, appearance, or some other attribute.
A) stockkeeping unit
B) inventory turn
C) individual brand
D) product type
E) brand line
Answer: A
Page Ref: 336
Objective: 4

43) A ________ is the set of all products and items a particular seller
offers for sale.
A) product line
B) product mix
C) product extension
D) product system
E) product class
Answer: B
Page Ref: 336
Objective: 4
Difficulty: Easy

44) Happy Home Products produces detergents, toothpaste, bar soap,
disposable diapers, and paper products. This company has a product ________
of five lines.
A) type
B) length
C) class
D) mix
E) width
Answer: E
Page Ref: 336
Objective: 4

45) 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) product class
B) product-type
C) need-family
D) product-family
E) product-line
Answer: E
Page Ref: 336
Objective: 4

46) A consumer products firm manufactures and sells over 200 different
sizes and varieties of jams and jellies. We can say that this
manufacturer's product mix has high ________.
A) consistency
B) depth
C) intensity
D) range
E) width
Answer: B
Page Ref: 337
Objective: 4

47) 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) consistency
B) depth
C) width
D) length
E) composition
Answer: A
Page Ref: 337
Objective: 4

48) The ________ of the product mix refers to the total number of items in
the mix.
A) width
B) length
C) depth
D) breadth
E) range
Answer: B
Page Ref: 337
Objective: 4
Difficulty: Easy

49) In offering a product line, companies normally develop a ________ and
modules that can be added to meet different customer requirements.
A) convenience item
B) flagship product
C) staple item
D) potential product
E) basic platform
Answer: E
Page Ref: 337
Objective: 4
50) The ________ of a product mix refers to how many variants are offered
of each product in the line.
A) width
B) length
C) depth
D) consistency
E) height
Answer: C
Page Ref: 337
Objective: 4

51) Which of the following is a benefit of product mapping?
A) studying market matrices
B) integrating target markets
C) identifying market segments
D) educating consumers
E) integrating target matrices
Answer: C
Page Ref: 338
Objective: 4

52) Product-line analysis provides information for two key decision
areas product-line length and ________.
A) product-class composition
B) product-mix pricing
C) product pricing
D) popular pricing
E) product need family
Answer: B
Page Ref: 338
Objective: 4

53) What occurs when any company lengthens its product line beyond its
current range?
A) market overreach
B) brand dilution
C) product adaptations
D) cannibalization
E) line stretching
Answer: E
Page Ref: 339
Objective: 4
Difficulty: Easy

54) A company positioned in the "middle" market introduces a lower-priced
product line. What type of line-stretching is this?
A) home stretch
B) up-market stretch
C) down-market stretch
D) maintenance stretch
E) two-way stretch
Answer: C
Page Ref: 340
Objective: 4

55) Moving ________ carries risks. The new brand can cannibalize core brand
sales and lower the core brand's quality image.
A) up-market
B) two ways
C) one way
D) down-market
E) out-market
Answer: D
Page Ref: 340
Objective: 4

56) Companies may wish to implement a(n) ________ to achieve more growth,
to realize higher margins, or simply to position themselves as full-line
manufacturers.
A) up-market stretch
B) rebranding plan
C) outsourcing strategy
D) disintermediation policy
E) vertical integration strategy
Answer: A
Page Ref: 340
Objective: 4

57) A manufacturer of hiking boots looks at data that indicate that their
subsegment of the market called "serious hiker" is declining and is
predicted to decline into the future. The firm decides to enter the "low-
price" segment with its new items. This is an example of a firm's ________
to reach a new market.
A) down-market stretch
B) up-market stretch
C) two-way stretch
D) marketing research
E) disintermediation
Answer: A
Page Ref: 340
Objective: 4

58) Marriott Corporation now contains hotels and motels from the "budget"
end of the consumer spectrum to the "premium" end with their JD Marriott
flagship locations. This is an example of a firm that successfully
performed a ________ to reach more consumers and ventures that are more
profitable.
A) upstream integration
B) two-way stretch
C) up-market stretch
D) down-market stretch
E) downstream integration
Answer: B
Page Ref: 340
Objective: 4

59) A product line can also be lengthened by adding more items within the
present range. There are several motives for line filling. Which of the
following is one of them?
A) responding to senior management wishes
B) responding to consumer wishes
C) reaching for incremental profits
D) reaching for incremental capacity
E) responding to sales-force demands
Answer: C
Page Ref: 341
Objective: 4

60) If line filling is overdone, it could result in ________ and customer
confusion.
A) sales paralysis
B) manufacturing inefficiencies
C) self-cannibalization
D) disintermediation
E) ineffective management
Answer: C
Page Ref: 341
Objective: 4

61) 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) are ineffective on total
B) have no effect on total
C) maximizes
D) minimizes
E) capitalize upon
Answer: C
Page Ref: 342
Objective: 4

62) Companies normally develop ________ rather than single products and
require sellers to establish perceived quality differences between price
steps within it.
A) product mix
B) captive products
C) product lines
D) optional products
E) average products
Answer: C
Page Ref: 342
Objective: 4

63) 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) two-part pricing
B) product-line pricing
C) captive product pricing
D) market pricing skimming
E) price discrimination
Answer: B
Page Ref: 342
Objective: 4

64) Some service firms often engage in ________, consisting of a fixed fee
plus a variable usage fee.
A) pure bundling
B) pure pricing
C) mixed pricing
D) captive pricing
E) two-part pricing
Answer: E
Page Ref: 343
Objective: 4

65) In ________, the seller offers goods both individually and in bundles
and often charges less for the "bundle" than for the individual products.
A) pirating pricing
B) captive pricing
C) two-part pricing
D) pure bundling
E) mixed bundling
Answer: E
Page Ref: 344
Objective: 4

66) Purchasers of theatre tickets receive a 20% 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) mixed bundling
B) pure bundling
C) cross-promotion
D) captive pricing
E) two-part pricing
Answer: A
Page Ref: 344
Objective: 4

67) McDonald's restaurants inside 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) cross-promotion
C) retail co-branding
D) ingredient branding
E) feature promotion
Answer: C
Page Ref: 344
Objective: 5

68) 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) family branding
B) ingredient co-branding
C) co-branding
D) generic-branding
E) individual branding
Answer: B
Page Ref: 345
Objective: 5

69) The main advantage of co-branding is that a product may be convincingly
positioned by virtue of the ________ involved.
A) branding synergy
B) increased advertising dollars
C) multiple brands
D) bundled package
E) pure bundling
Answer: C
Page Ref: 345
Objective: 5

70) The potential disadvantages of ________ are the risks and lack of
control from becoming aligned with another brand in the consumers mind.
Consumer expectations about the level of involvement and commitment are
likely to be high, so unsatisfactory performance could be very negative for
the brands involved.
A) co-branding
B) cannibalization
C) vertical integration
D) disintermediation
E) brand stretching
Answer: A
Page Ref: 345
Objective: 5

71) ________ 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) Cross-branding
B) Ingredient branding
C) Equity branding
D) Family branding
E) Generic branding
Answer: B
Page Ref: 345
Objective: 5

72) 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) retailer package
B) design package
C) shipping package
D) consumer package
E) supplier package
Answer: C
Page Ref: 346
Objective: 6

73) Sales of luxury goods such as perfumes, colognes, and aftershaves
depend heavily upon their initial response by the consumer. A well-designed
package can create convenience and promotional value. It has been called
the "silent salesman." Which of the three levels of packaging is this
"silent salesman"?
A) retailer
B) consumer
C) shipping
D) secondary
E) primary
Answer: E
Page Ref: 346
Objective: 6

74) Which of the following factors is one of the contributors to the
growing use of packaging as a marketing tool?
A) consumption aid
B) consumer affluence
C) consumer influence
D) conformance qualities
E) brand identification
Answer: B
Page Ref: 346
Objective: 6

75) ________ are formal statements of expected product performance by the
manufacturer.
A) Insurance
B) Warranties
C) Bonds
D) Invoices
E) Balance sheets
Answer: B
Page Ref: 349
Objective: 6
Difficulty: Easy

76) Many sellers offer either general or specific guarantees. Guarantees
reduce the buyer's ________ risk.
A) actual
B) perceived
C) real
D) implied
E) stated
Answer: B
Page Ref: 349
Objective: 6

77) 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) not known
B) different
C) inferior
D) equivalent
E) superior
Answer: E
Page Ref: 349
Objective: 6

78) 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 of using a strong
guarantee in this instance is sound because ________.
A) it 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 buyer's risk in
purchasing
Answer: E
Page Ref: 349
Objective: 6

79) Marketing planning begins with formulating an offering to meet target
customers' needs or wants.
Answer: TRUE
Page Ref: 325
Objective: 1
Difficulty: Easy

80) A product is anything that can be offered to a market to satisfy a want
or need.
Answer: TRUE
Page Ref: 325
Objective: 1
Difficulty: Easy

81) In planning its market offering, the marketer needs to address five
product levels, each of which reduces customer value.
Answer: FALSE
Page Ref: 326
Objective: 1

82) The customer-value hierarchy consists of the basic product, core
benefit, expected product, augmented product, and the consumption system.
Answer: FALSE
Page Ref: 326
Objective: 1

83) Marketers have traditionally classified products on the basis of
characteristics such as durability, tangibility, and use.
Answer: TRUE
Page Ref: 327
Objective: 1
Difficulty: Easy

84) Durable products normally require less personal selling and service and
less seller guarantees than nondurable goods.
Answer: FALSE
Page Ref: 327
Objective: 1

85) Because they are intangible, durable goods normally require more
quality control, supplier credibility, and adaptability than either
services or nondurable goods.
Answer: FALSE
Page Ref: 327
Objective: 1
Difficulty: Easy

86) Carlos always buys bread and milk when he goes grocery shopping. In
this case, bread and milk are examples of impulse goods.
Answer: FALSE
Page Ref: 327
Objective: 1
Difficulty: Easy

87) A Maserati sports car is considered a convenience good because
interested buyers will travel far to buy one.
Answer: FALSE
Page Ref: 327
Objective: 1
Difficulty: Easy

88) The homogeneity of natural materials limits the amount of demand-
creation activity that producers undertake.
Answer: TRUE
Page Ref: 328
Objective: 1

89) Capital items are long-lasting goods that facilitate developing or
managing the finished products.
Answer: TRUE
Page Ref: 328
Objective: 1
Difficulty: Easy

90) Supplies can be classified as two kinds: heterogenous supplies and
homogeneous supplies.
Answer: FALSE
Page Ref: 328
Objective: 1

91) To be branded, physical products need not be differentiated.
Answer: FALSE
Page Ref: 328
Objective: 2

92) To avoid "feature fatigue," companies must be careful to prioritize
those features that are included and find unobtrusive ways to provide
information about how consumers can use and benefit from the feature.
Answer: TRUE
Page Ref: 329
Objective: 2

93) Firms should design the highest performance level possible for their
products.
Answer: FALSE
Page Ref: 329
Objective: 2

94) As a selling point, durability commands a particularly high pricing
premium, especially for products that are subject to rapid technological
obsolescence, as are personal computers and video cameras.
Answer: FALSE
Page Ref: 330
Objective: 2

95) If the physical product cannot be easily differentiated, the key to
competitive advantage lies in the pricing of the related "services"
provided by the manufacturer.
Answer: FALSE
Page Ref: 330
Objective: 2
96) Customer training and customer consulting are two areas for service
differentiation that manufacturers can use with their products.
Answer: TRUE
Page Ref: 331
Objective: 2
Difficulty: Easy

97) The cost of processing a return can be significantly greater than that
of an outbound shipment.
Answer: TRUE
Page Ref: 331
Objective: 2

98) Design can shift consumer perceptions to make brand experiences more
rewarding.
Answer: TRUE
Page Ref: 333
Objective: 3
Difficulty: Easy

99) The product hierarchy stretches from basic needs to particular items
that satisfy those needs.
Answer: TRUE
Page Ref: 336
Objective: 4

100) A product system is a group of diverse and unrelated items that does
not function in a compatible manner and includes the product mix and
product assortment.
Answer: FALSE
Page Ref: 336
Objective: 4

101) The four product-mix dimensions (length, width, depth, consistency)
permit the company to expand its business.
Answer: TRUE
Page Ref: 336-337
Objective: 4

102) The product-line length can be obtained by averaging the number of
variants within the brand groups.
Answer: FALSE
Page Ref: 337
Objective: 4

103) Every company's product line covers a certain part of the total
possible range of products and consumer levels.
Answer: TRUE
Page Ref: 339
Objective: 4

104) Companies in the "middle market" should never attempt to stretch their
line in both directions.
Answer: FALSE
Page Ref: 340
Objective: 4

105) Line filling, if overdone, may result in self-cannibalization and
increased customer loyalty.
Answer: FALSE
Page Ref: 341
Objective: 4

106) In the rapidly changing market of today's world, product lines must be
continuously updated or modernized.
Answer: TRUE
Page Ref: 341
Objective: 4
Difficulty: Easy

107) Price-setting logic must be modified when the product is part of a
product mix.
Answer: TRUE
Page Ref: 342
Objective: 4
Difficulty: Easy

108) 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: TRUE
Page Ref: 342
Objective: 4

109) Manufacturers of systems such as razors and ink jet printers use a
system of pricing called "two-part pricing" one price for the disposable
products and another for the "hardware."
Answer: FALSE
Page Ref: 343
Objective: 4

110) A pricing system in which there is a "fixed" fee and then a variable
"usage" fee is called bundling.
Answer: FALSE
Page Ref: 344
Objective: 4

111) Pure bundling occurs when a firm offers goods both individually and in
bundles.
Answer: FALSE
Page Ref: 344
Objective: 4
Difficulty: Easy

112) Co-branding is when two or more well-known existing brands are
combined into a joint product and/or marketed together in some fashion.
Answer: TRUE
Page Ref: 344
Objective: 5
Difficulty: Easy

113) Ingredient branding can take on a form called "self-branding" in which
the company advertises its own branded ingredients.
Answer: TRUE
Page Ref: 345
Objective: 5

114) Packaging is all the activities of designing and producing the
container for a product.
Answer: TRUE
Page Ref: 346
Objective: 6
Difficulty: Easy

115) Labels can identify the product and must contain legal statements that
under various Federal laws cannot be misleading, false, or deceptive.
Answer: TRUE
Page Ref: 348
Objective: 6
AACSB: Reflective thinking
Difficulty: Easy

116) Warranties are formal statements of expected product performance by
the manufacturer.
Answer: TRUE
Page Ref: 349
Objective: 6
Difficulty: Easy

117) A guarantee's greatest contribution to a product's success is that it
decreases the buyer's perceived risk in the purchase of the product.
Answer: TRUE
Page Ref: 349
Objective: 6

118) Guarantees are most effective when the product is well known and/or
similar in performance to other brands in the market.
Answer: FALSE
Page Ref: 349
Objective: 6
Difficulty: Easy

119) 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 within.
Answer: Each layer adds more customer value, and the five levels are: (1)
the core benefit—the service or benefit the customer is really buying; (2)
the basic product—the actual product that provides the core benefit; (3)
expected product—a set of attributes and conditions buyers normally expect
when they purchase the product; (4) the augmented product—the marketer
exceeds customer expectations; and (5) the potential product—which
encompasses all the possible augmentations and transformations the product
or offering might undergo in the future. These five elements constitute the
buyers' consumption system.
Page Ref: 326
Objective: 1

120) The vast array of products that consumers buy can be classified on the
basis of shopping habits and are broken down into four main areas. List
these four main classifications of consumer goods and explain what elements
are included within.
Answer: The four main areas are: (1) Convenience goods are bought
frequently, immediately, and with a minimum of effort; (2) shopping goods
are goods that the consumer characteristically compares on such bases as
suitability, quality, price, and style; (3) specialty goods have unique
characteristics or brand identification for which a sufficient number of
buyers are willing 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 Ref: 327
Objective: 1

121) 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 company's 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.
Answer: (1) Nondurable goods—the 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 goods—tangible
goods that normally survive many uses. Durable products normally require
more personal selling and service, command a higher margin, and require
more seller guarantees. (3) Services—intangible, inseparable, variable, and
perishable products. They require more quality control, supplier
credibility, and adaptability.
Page Ref: 327
Objective: 1

122) 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.
Answer: The three groups of industrial goods include: (1) Materials and
parts are goods that enter the manufacturer's product completely. Raw
materials (farm and natural products) and manufactured materials 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
advisory services and other "services" necessary for the ongoing operation
of the business.
Page Ref: 327-328
Objective: 1

123) Describe the six main service differentiators.
Answer: The main service differentiators are ordering ease, delivery,
installation, customer training, customer consulting, and maintenance and
repair.
Ordering ease refers to how easy it is for the customer to place an order
with the company.
Delivery refers to how well the product or service is brought to the
customer. It includes speed, accuracy, and care throughout the process.
Installation refers to the work done to make a product operational in its
planned location. Ease of installation is a true selling point for buyers
of complex products like heavy equipment and for technology novices.
Customer training helps the customer's employees use the vendor's equipment
properly and efficiently.
Customer consulting includes data, information systems, and advice services
the seller offers to buyers.
Maintenance and repair programs help customers keep purchased products in
good working order.
Page Ref: 330-331
Objective: 2

124) Distinguish between controllable returns and uncontrollable returns.
Answer: Controllable returns result from problems or errors by the seller
or customer and can mostly be
eliminated with improved handling or storage, better packaging, and
improved transportation
and forward logistics by the seller or its supply chain partners.
Uncontrollable returns result from the need for customers to actually see,
try, or experience
products in person to determine suitability and can't be eliminated by the
company in the
short run through any of these means.
Page Ref: 331
Objective: 2

125) What is the significance of design for a company's products and
services? What are the advantages of a good design?
Answer: Design offers a potent way to differentiate and position a
company's products and services. Design is the totality of features that
affect how a product looks, feels, and functions to a consumer. Design
offers functional and aesthetic benefits and appeals to both our rational
and emotional sides.
The designer must figure out how much to invest in form, feature
development, performance, conformance, durability, reliability,
reparability, and style. To the company, a well-designed product is easy to
manufacture and distribute. To the customer, a well-designed product is
pleasant to look at and easy to open, install, use, repair, and dispose of.
The designer must take all these factors into account.
Design can shift consumer perceptions to make brand experiences more
rewarding. Design should penetrate all aspects of the marketing program so
that all design aspects work together.
Page Ref: 332-333
Objective: 3
126) Explain the concepts of product-mix width, length, depth, and
consistency.
Answer: The width of a product mix refers to how many different product
lines the company carries. The length of a product mix refers to the total
number of items in the mix. The depth of a product mix refers to how many
variants are offered of each product in the line and is determined by
dividing the total number of items by the number of lines. The consistency
of the product mix refers to how closely related the various product lines
are in end use, production requirements, distribution channels, or some
other way.
Page Ref: 336-337
Objective: 4

127) Product-mix pricing can involve a number of pricing strategies for the
brand manager. List each of these strategies and briefly define each.
Answer: There are six situations involving product-mix pricing: (1)
product-line pricing—low-, 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 pricing—when the "user" has no choice but to use the high-
priced "disposable" products that make the entire product work (for
example, ink cartridges for printers); (4) two-part pricing—consisting of a
fixed fee and a variable usage fee (cell phone usage); (5) by-product
pricing—the price of the by-products of goods being used for other purposes
(oil refining for example); and (6) product-bundling pricing—pure bundling
when the firm offers its products only as a bundle, or mixed bundling when
the firm offers its products as a "bundle" and/or individually.
Page Ref: 342-344
Objective: 4

128) Various factors have contributed to the increased importance of
packaging as a marketing tool. List and briefly describe these events.
Answer: Self-service—an 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 prestige of
better packages. Company and brand image—packages contribute to instant
recognition of the company or brand. Innovation opportunity—innovative
packaging can bring large benefits to consumers and profits to producers.
Page Ref: 346
Objective: 6

129) A manufacturer is contemplating introducing a product that is inferior
to its competition in its performance, design, and functionality. However,
the manufacturer believes that "good brand marketing" can overcome these
shortfalls. Why is this thinking incorrect?
Answer: At the heart of a great brand is a great product, the product is a
key element in the market offering. Customers will judge the product
(offering) on three basic elements: product features and quality; services
mix and quality, and price. Not having a competitive product cannot be
overcome by marketing.
Page Ref: 325
Objective: 1

130) 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 information forms the basis of product strategy. Define the
consumption system and identify the two upcoming product strategies that
are affected by this knowledge.
Answer: This is called the user's total consumption system, defined as the
way the user performs the tasks of getting and using products and related
services. This is important because it will contain information useful in
the product-augmentation strategy and the potential product strategy.
Page Ref: 326
Objective: 1

131) 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.
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.
Page Ref: 327-328
Objective: 1

132) To be branded, products must be differentiated. List the possible ways
that physical products can be differentiated.
Answer: Products can be differentiated according to form, features,
customization, performance quality, conformance quality, durability,
reliability, reparability, and style.
Page Ref: 328
Objective: 2
Difficulty: Easy

133) In your position as a marketing manager for a small industrial
company, you have been asked by the president to help differentiate the
company's 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 comprise 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?
Answer: The nine ways that physical products can be differentiated are
form, features, customization, performance quality, conformance quality,
durability, reliability, reparability, and style.
Page Ref: 329-330
Objective: 2
Difficulty: Easy

134) When a physical product cannot easily be differentiated, the key to
competitive success may lie in adding valued services and improving
quality. Identify the six main service differentiators.
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.
Page Ref: 330
Objective: 2
Difficulty: Easy

135) You have been asked to create a product system for your company's
personal digital assistant. Before 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."
Answer: A product system is a group of diverse but related items that
function in a compatible manner.
Page Ref: 336
Objective: 4
Difficulty: Easy

136) You have been asked to prepare a product-line analysis for your
company's stable of products. Why is it important for product-line mangers
to do a product-line analysis?
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 line's market
profile.
Page Ref: 337
Objective: 4
Difficulty: Easy

137) Explain the concept of line stretching and the three uses for it.
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).
Page Ref: 339-340
Objective: 4

138) As the newest member of the marketing department, your immediate boss
asks you to comment on the company's proposal to add two new shoes to the
company's 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?
Answer: This is an example of the company trying a "two-way
stretch"—introducing products at both ends of the consumer market
simultaneously.
Page Ref: 340
Objective: 4
Difficulty: Easy

139) During a meeting, you were asked by the vice-president of marketing,
to comment on the company's 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.
Answer: Product-mix pricing includes product-line pricing, optional-
feature pricing, captive-product pricing, two-part pricing, by-product
pricing, and product-bundling pricing.
Page Ref: 342-344
Objective: 4
Difficulty: Easy

140) Outline three guidelines for correctly implementing a bundling
strategy.
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
exception and done with discretion.
Page Ref: 344
Objective: 4

141) As the marketing manager for your firm, you have been approached by
your key component manufacturer suggesting that your two firms "ingredient
brand" a new item. What are some of the requirements for succeeding in
ingredient branding?
Answer: First, the consumer must perceive that the ingredient matters to
the performance and success of the product. Secondly, consumers must be
convinced 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 host product contains the ingredient. Fourth,
a coordinated "pull" and "push" program must help consumers understand the
importance and advantages of the branded ingredient.
Page Ref: 346
Objective: 5

142) 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.
Answer: These tasks are: attract attention, describe the product's
features, create consumer confidence, and make a favorable overall
impression.
Page Ref: 346
Objective: 6

143) 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, outline the objectives (both company and consumer orientated)
that you wish to see implemented by the design team.
Answer: The objectives of packaging are to identify the brand; convey
descriptive and persuasive information; facilitate product transportation
and protection; assist at-home storage; and aid product consumption.
Page Ref: 347
Objective: 6

144) Sellers must label their products. Labels serve many purposes beyond
just "naming" the product. List the additional services provided by a
product's label.
Answer: A label identifies the product; a label might also grade the
product; a label might describe the product; and the label might promote
the product. A label may contain information required by law.
Page Ref: 348
Objective: 6
Difficulty: Easy

145) What is the importance of guarantees?
Answer: Guarantees reduce the buyer's perceived risk. They suggest that
the service/product is of high quality and that the company and its service
performance are dependable.
Page Ref: 349
Objective: 6
Difficulty: Easy

146) What are the situations in which guarantees are most effective?
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 buyer's 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 Ref: 349
Objective: 6

Marketing Management Test Bank

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