Marketing quốc tế 12 setting product strategies

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: 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: 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: Difficulty: Moderate Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 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: Difficulty: Moderate 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: 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: AACSB: Analytic skills Difficulty: Moderate Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 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: AACSB: Analytic skills 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: Difficulty: Moderate 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: Difficulty: Easy Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 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: AACSB: Analytic skills 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: 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: Difficulty: Moderate Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 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: AACSB: Analytic skills Difficulty: Moderate 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 E) convenience goods Answer: B Page Ref: 327 Objective: Difficulty: Moderate 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 E) convenience goods Answer: B Page Ref: 327 Objective: Difficulty: Easy Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 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: 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: Difficulty: Moderate 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: 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: Difficulty: Easy Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 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: 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: AACSB: Analytic skills 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: Difficulty: Easy Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 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: Difficulty: Moderate 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: Difficulty: Moderate 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: Difficulty: Moderate 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: AACSB: Reflective thinking Difficulty: Easy Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 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: AACSB: Analytic skills Difficulty: Moderate 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: 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: Difficulty: Moderate Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 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: AACSB: Analytic skills 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: Difficulty: Moderate 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: Difficulty: Moderate 10 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 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: AACSB: Analytic skills Difficulty: Moderate 79) Marketing planning begins with formulating an offering to meet target customers' needs or wants Answer: TRUE Page Ref: 325 Objective: 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: 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: Difficulty: Moderate 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: Difficulty: Moderate 25 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 83) Marketers have traditionally classified products on the basis of characteristics such as durability, tangibility, and use Answer: TRUE Page Ref: 327 Objective: 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: Difficulty: Moderate 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: 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: AACSB: Analytic skills 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: AACSB: Analytic skills Difficulty: Easy 88) The homogeneity of natural materials limits the amount of demand-creation activity that producers undertake Answer: TRUE Page Ref: 328 Objective: Difficulty: Moderate 26 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 89) Capital items are long-lasting goods that facilitate developing or managing the finished products Answer: TRUE Page Ref: 328 Objective: Difficulty: Easy 90) Supplies can be classified as two kinds: heterogenous supplies and homogeneous supplies Answer: FALSE Page Ref: 328 Objective: Difficulty: Moderate 91) To be branded, physical products need not be differentiated Answer: FALSE Page Ref: 328 Objective: Difficulty: Moderate 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: Difficulty: Moderate 93) Firms should design the highest performance level possible for their products Answer: FALSE Page Ref: 329 Objective: Difficulty: Moderate 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: Difficulty: Difficult 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: Difficulty: Moderate 27 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 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: 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: Difficulty: Moderate 98) Design can shift consumer perceptions to make brand experiences more rewarding Answer: TRUE Page Ref: 333 Objective: Difficulty: Easy 99) The product hierarchy stretches from basic needs to particular items that satisfy those needs Answer: TRUE Page Ref: 336 Objective: Difficulty: Moderate 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: AACSB: Analytic skills Difficulty: Moderate 101) The four product-mix dimensions (length, width, depth, consistency) permit the company to expand its business Answer: TRUE Page Ref: 336-337 Objective: Difficulty: Moderate 102) The product-line length can be obtained by averaging the number of variants within the brand groups Answer: FALSE Page Ref: 337 Objective: Difficulty: Moderate 28 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 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: Difficulty: Moderate 104) Companies in the "middle market" should never attempt to stretch their line in both directions Answer: FALSE Page Ref: 340 Objective: Difficulty: Moderate 105) Line filling, if overdone, may result in self-cannibalization and increased customer loyalty Answer: FALSE Page Ref: 341 Objective: Difficulty: Moderate 106) In the rapidly changing market of today's world, product lines must be continuously updated or modernized Answer: TRUE Page Ref: 341 Objective: Difficulty: Easy 107) Price-setting logic must be modified when the product is part of a product mix Answer: TRUE Page Ref: 342 Objective: 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: Difficulty: Moderate 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: Difficulty: Difficult 29 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 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: Difficulty: Moderate 111) Pure bundling occurs when a firm offers goods both individually and in bundles Answer: FALSE Page Ref: 344 Objective: 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: 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: Difficulty: Moderate 114) Packaging is all the activities of designing and producing the container for a product Answer: TRUE Page Ref: 346 Objective: 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: AACSB: Reflective thinking Difficulty: Easy 116) Warranties are formal statements of expected product performance by the manufacturer Answer: TRUE Page Ref: 349 Objective: Difficulty: Easy 30 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 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: Difficulty: Moderate 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: 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: Difficulty: Moderate 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: Difficulty: Moderate 31 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 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: AACSB: Analytic skills Difficulty: Moderate 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: Difficulty: Moderate 32 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 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: Difficulty: Moderate 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: Difficulty: Moderate 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: Difficulty: Moderate 33 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 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: Difficulty: Moderate 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) captiveproduct 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: Difficulty: Moderate 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: Difficulty: Moderate 34 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 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: AACSB: Analytic skills Difficulty: Moderate 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: Difficulty: Moderate 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: Difficulty: Moderate 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: Difficulty: Easy 35 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 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: AACSB: Analytic skills 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: 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: AACSB: Analytic skills 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 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: AACSB: Analytic skills Difficulty: Easy 36 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 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: Difficulty: Moderate 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: AACSB: Analytic skills 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, captiveproduct pricing, two-part pricing, by-product pricing, and product-bundling pricing Page Ref: 342-344 Objective: AACSB: Analytic skills 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: Difficulty: Moderate 37 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 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: AACSB: Analytic skills Difficulty: Moderate 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 selfservice 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: AACSB: Analytic skills Difficulty: Moderate 143) In discussions with the packaging design team, you note that they 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: AACSB: Analytic skills Difficulty: Moderate 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: Difficulty: Easy 38 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 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: 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: Difficulty: Moderate 39 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall ... 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... Copyright © 2 012 Pearson Education, Inc Publishing as Prentice Hall 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... packaging A) product class B) product- type C) need-family D) product- family E) product- line Answer: E Page Ref: 336 Objective: AACSB: Analytic skills Difficulty: Moderate 14 Copyright © 2 012 Pearson