Chapter 6 - Product and Service Strategies

8/19/2019 Chapter 6 - Product and Service Strategies

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Chapter 9—Product and Service Strategies

MULTIPLE CHOICE

1. According to marketing decision makers, why do people buy products?a. to acquire items that are distinctively different than the competitive offerings b. to satisfy their wants and needs

c. to save time by selecting items that are easy to find on the shelvesd. to satisfy price and value requirements

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). 4sing the broad application of the word product , how can a television set best be described?a. as an obsolete technology in comparison with the %nternet b. as a means of providing entertainmentc. as a lucrative item for appliance storesd. as a machine used to receive broadcast signals

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6. 7hich of the following best describes a product?a. the physical characteristics of an item that one can buy for personal, professional,

or organi8ational use b. the costs and benefits that the seller promotes in various marketing messagesc. assurances, reliability, and tangibles all at onced. a bundle of physical, service, and symbolic attributes designed to satisfy a

customer9s wants and needs

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:. 7hich of the following comes closest to providing a pure good?a. a company that manufactures and installs elevators b. a cleaning servicec. a data storage companyd. an advertising agency

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;. 7hat distinguishes a service from a good?a. Services are intangible. b. Services are inseparable from service providers.c. Services are easy to standardi8e.d. Services are perishable.

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hapter - "roduct and Service Strategies

*. #he moderately priced $ays %nn and the upscale &our Seasons 5otel both provide sleeping

accommodations, but their respective guests have considerably different e@pectations of

service. 7hy do their e@pectations differ?a. ompanies cannot standardi8e services. b. Service quality shows wide variations.c. Services are inseparable from their providers.d. Services have a high perishable rate.

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percentc. percentd. -> percent

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. 7hich of the following companies is a pure service firm?a. 7almart b. 0icrosoftc. Starbucksd. 'oyal !ank of anada

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-. 7hich of the following industries does N+# belong to the service sector?a. investment banking b. agriculturec. retailingd. health care

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1>. 5ow would you generally classify consumer goods such as milk, bread, and soft drinks?a. as convenience products

b. as utilitarian productsc. as shopping productsd. as specialty products

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11. 7hat type of product is marketed to consumers who may N+# yet recogni8e a need for them?

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a. specialty b. consumer c. convenienced. unsought

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1). 7hich of the following products are, for 0+S# consumers, unsought?a. designer clothes b. maga8inesc. longterm insuranced. furniture

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16. 5ow might you categori8e convenience products that customers constantly replenish in order

to maintain a ready inventory?a. staples b. impulse itemsc. emergency itemsd. specialty items

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1:. 7hich of the following products would generally be classified as a staple?a. plumbing repair kit b. personal computer

c. gasolined. maga8ine

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1;. 7hy do grocery stores usually display items such as candy, gum, and maga8ines near the

checkout counter?a. because they are purchased on impulse b. because they are easier to replenishc. because they are subBect to shoplifting

d. because they are purchased infrequently

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1*. 7hat does a consumer e@pect when purchasing convenience products?a. that they can purchase them without having full knowledge about what is sought b. that they can purchase them immediately and with minimal effort



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c. that they should purchase them after visiting numerous stores and comparing

pricesd. that they may have to travel any distance to get what is wanted

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)1. 7hile in !est !uy, a customer takes a great deal of time comparing the quality, features, and

prices of a number of refrigerators. 7hat type of products is this customer e@amining?a. heterogeneous shopping products b. homogeneous shopping productsc. homogeneous convenience productsd. heterogeneous specialty products

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)). 7hat type of product are consumers primarily interested in when they are well aware of the

brands they prefer and are willing to make a special effort to obtain them?a. impulse b. conveniencec. shoppingd. specialty

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);. 7hich of the following products relies /(AS# on location of purchasing opportunity?a. specialty products b. shopping productsc. unsought productsd. convenience products

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6>. 7hich of the following business products are 0+S# similar to consumer specialty products?a. installations b. accessory equipment partsc. raw materialsd. component parts and materials

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a. accessory equipment b. business servicesc. raw materialsd. installations

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:>. 7hich of the following is N+# a raw material?a. coal b. copper c. iron ored. steel

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a. continuously repeating the process to search for and identify areas that need

improvement b. comparing internal processes with similar processes of industry leadersc. identifying processes that need improvementd. producing more product output at a lower costperunit

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:. 7hich of the following is a single product line?

a. fourdoor sedans offered by various automakers b. 1);passenger Bets manufactured by Airbus and !oeingc. 5ershey Hisses in a variety of flavoursd. different brands of toothpaste

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:-. 7hat does the combination of product lines represent?a. a company9s product mi@ b. a company9s product cluster

c. a company9s product lifecycled. a company9s product concept

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;>. %f 5onda were to acquire a bicycle manufacturer, what would it add to 5onda9s product mi@?a. depth b. widthc. lengthd. cluster

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;1. 7hat is the number of product lines a firm offers referred to as?a. depth b. widthc. clustersd. length

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;). 7hat is adding individual offerings that appeal to different market segments known as?a. product mi@ b. product linec. product line e@tensiond. product line depth

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;6. ohnson 3 ohnson manufactures more than -> brands in nearly ;> product categories. 7hat

is the total number of products the company manufactures called?a. product line e@tension

b. product cluster mapc. product mi@ lengthd. product life cycle e@pectancy

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;:. %n what process do products pass through a series of stages from their initial appearance to

their decline?a. product life potential b. promotional cycle

c. pricing cycled. product life cycle

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;;. "otential customers are unaware of a product during its introductory stageI therefore, what

does promotion in this stage concentrate on?a. e@plaining the product features, uses, and benefits b. reducing the si8e of the available market through selective advertisingc. testmarketingd. communicating new uses for the product

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;*. 7hat type of problem is common for companies during the introductory stages of a productlife cycle?a. ompetitors rush into the market with offerings similar to those of the innovator. b. #echnical problems are common as companies finetune product design.c. 5eavy promotional outlays emphasi8e differences that e@ist between products.d. "rofits for the product category decline, sometimes actually becoming negative.

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*>. 7idgets were introduced a few years ago. #he number of companies making widgets has

increased recently, drawn by high profits. At the same time, differentiated products for

different market segments have begun to emerge. 7hat stage of the product life cycle do

widgets appear to be in?a. growth b. introductoryc. maturity

d. decline

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*1. $uring what stage of the product life cycle does competition between brands intensify?a. diminishing demand period b. introductory stagec. growth staged. maturity stage

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*). $uring what stage of the product life cycle does product differentiation and heavy advertising

0+S# often occur?a. maturity b. introductoryc. growthd. decline

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*6. Some firms try to differentiate their products during the maturity stage of the product life

cycle. 7hich of the following do these firms use as a basis for differentiation?a. rapid market share growth b. quality, reliability, and servicec. lower promotion costsd. maintenance of strategy that has worked well until now

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*:. Creta has been analy8ing the competitive standing of one of her products. Since the item was

introduced, )> similar products have appeared, forcing her to change distribution and pricing

strategies in order to remain competitive. Sales volume has dipped and she suspects sales of

her product have reached a saturation level. At what stage of the product life cycle is the item?a. introductory b. growthc. maturity

d. decline

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*;. At what stage of the product life cycle should a viable marketing strategy promote thedifferences that separate competing merchandise?a. introduction b. stabili8ationc. growthd. maturity

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**. 7hat is a characteristic of the decline stage of the product life cycle?a. "rofits can become negative. b. $istribution is increased.c. Available products e@ceed demand for the first time.d. Selective demand is cultivated.

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*. 7hat are fashions with abbreviated life cycles called?a. trends b. perishablesc. fadsd. staples

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*-. 7hat is advertising that warns consumers about the dangers of overe@posure to the sun, even

during winter months, an attempt by marketers of sunscreen to do?a. raise awareness of skin cancer b. find new uses for the productc. change product qualityd. increase the frequency of product use

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. %n the late 1-->s, /as Jegas witnessed a growth in the number of newly built casinos targetingthe family vacation market. 7hat was advertising their facilities to families an attempt to do?a. fill a high vacancy rate b. increase the number of usersc. sell tickets to family showsd. enhance the city9s image

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TRUE/!LSE

1. #he marketing mi@ is the blend of product, price, distribution, and promotion that a firmdevelops as its marketing strategy to satisfy a chosen target market.

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). A product is simply a physical item designed to satisfy a customer9s wants and needs.

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6. 7hile a consumer views a product as a want satisfier, a marketer sees the product as a

combination of elements that give value to a consumer.

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:. A university education is a product.

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;. #he broad view of product recogni8es that consumers buy satisfaction, not Bust a thing they

can hold in their hands.

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*. !ecause they do N+# have physical features that buyers can see, hear, smell, taste, or touch

prior to purchase, services are said to be intangible.

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. Services are perishable and cannot be stockpiled or inventoried.

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11. +n the goodsservices continuum, a meal at a fine restaurant is considered a pure good, even

when one considers that e@cellent service is part of what one values in the e@perience.

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1). A goodsservices continuum is a method for visuali8ing the differences and similarities

between goods and services.

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16. 5air styling is a pure service.

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1:. 5otels often use the same room decor and dining menu at all their locations in an attempt tostandardi8e the services they offer.

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1;. Service transactions seldom require interaction between buyer and seller at the production anddistribution stages.

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1*. #he service sector of the anadian economy is onethird as large as the manufacturing sector.

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6*. 'epresentatives that sell installations to the business market often provide technical e@pertise

along with tangible goods.

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;). #he first step in the benchmarking process is to identify the world9s best performers.

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;. #he product mi@ is the assortment of product lines and individual product offerings that acompany sells.

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*1. 0arketers typically define product mi@es using concepts of si8e, number, and price.

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*). #he length of a product mi@ refers to the number of different products a firm sells.

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*6. $epth of product mi@ refers to the variations of each product that a firm includes in its mi@.

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*:. "roctor 3 Camble manufactures laundry detergents under the brand names of #ide, heer,

and Cain. #hese brands represent the depth of the product line.

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*;. "roduct line e@tension refers to the development of items to be included in a product line that

are similar to e@isting items and are intended as substitutes for them.

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**. 5ershey9s introduction of a sugarfree version of its candy bar is an e@ample of line e@tension.

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. #o compete effectively during the growth stage of a product9s life cycle, firms should N+#

make changes or improvements to the product.

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. 0arketers never drop profitable items from their product lines, even when those items really

don9t fit into the e@isting product line.

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1. /ist the si@ factors that distinguish services from goods.

ANS

a. Services are intangible. b. Services are inseparable from providers.

c. Services are perishable.

d. %t is difficult for firms to standardi8e services.e. !uyers often play important roles in the creation and distribution of services.

f. Service quality shows wide variations.

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). /ist and describe the categories of consumer products. 5ow does this grouping influence the

method in which the products are marketed?

ANS

#he most commonly used classification of consumer products divides products into three

groups. "roducts consumers wish to purchase frequently, immediately, and with minimal

effort are called convenience products. "roducts that are purchased after comparisons of

product alternatives are made based on factors such as price, style, and colour are calledshopping products. &inally, products possessing some unique characteristics that cause

consumers to pri8e a particular brand and to e@ert considerable effort to obtain that brand arecalled specialty products.

Hnowing the group in which a product belongs helps to describe the behaviour of consumers

in regard to purchase planning time, frequency, willingness to shop, and whether or not thereis a connection between the product price and perceived quality. &urther, marketing mi@

decisions concerning price, promotion, and distribution are made easier. &or e@ample, the

prices of convenience products are generally low, while prices for shopping and specialtygoods are relatively higher. Also, the distribution channel length for convenience products is

usually long, while the channel for shopping and specialty goods is shorter.

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;. /ist five questions that classify consumer services.

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a. 7hat is the nature of the service?

b. 7hat type of relationship does the service organi8ation have with its customers?

c. 5ow much fle@ibility is there for customi8ation and Budgment on the part of the

service provider?d. $o demand and supply for the service fluctuate?

e. 5ow is the service delivered?

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ANS

#otal Guality 0anagement K#G0L is a firm9s e@pectation that employees continually improve

products and work processes with the goal of achieving customer satisfaction and worldclass performance.

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11. %dentify and describe the stages of the product life cycle.

ANS

a. %ntroductory stageD$emand is stimulated for a new market entry. New technical

features are often introduced to a new product category. "romotion campaigns directed toward

consumers and channel members stress information about the new item. &inancial losses are

common due to high costs associated with promotion and research and development. b. Crowth stageD#his stage begins as demand reaches a level so that the firm begins to

reali8e substantial profits from its earlier investment. Similar products begin to appear on themarket.

c. 0aturity stageD%ndustry sales reach a plateau as the backlog of potential customers

dwindles. ompetition intensifies and individual firms9 profits decline. "romotional

campaigns emphasi8e differences between competing brands. Some firms differentiate theirofferings by emphasi8ing product attributes such as quality, reliability, and service. Available

products e@ceed industry demand for the first time. ompanies can increase market share only

at the e@pense of competitors9 sales. "rices begin to fall, which usually leads to decreasedrevenues for all firms.

d. $ecline stageD%nnovations andMor shifting consumer preferences lead to an absolutedecline in industry sales. %ndustry profits decline or become negative, and firms drop theseitems from their product lines and seek to replace them with alternative items.

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1). 5ow do elements of the marketing mi@ change during the product life cycle?

ANS

0arketing mi@ goals in the introductory stage include development of distribution channels

and introductory promotion to stimulate primary demand. Sometimes new product features

may also be presented. $uring the growth period, with the entrance of competitors, it isimportant to stimulate trial through promotional inducements and wordofmouth in an effort

to develop selective demand. "rice decreases are a maBor marketing mi@ change in thematurity period as firms seek to gain and maintain market share. &irms may move into

international markets to offset mature domestic markets. "rice decreases often continue into

the decline stage. #his further decreases profits for many firms and leads to a product deletiondecision.

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16. (@plain the concept of e@tending the product life cycle, and list actions that can be taken.

ANS

"roduct lifecycle e@tension is a frequently used strategy taken to add to the time period inwhich a product can continue to be profitably sold. 0arketing managers can accomplish this

and e@tend product life cycles indefinitely through actions they can take. (fforts to e@tend

product life cycles can be especially successful if action is taken in the maturity stage. #hese

actions are

a. increasing the frequency of product usage by consumers.

b. increasing the number of users of the product.

c. finding new uses for the product.

d. changing the package si8e, product labels, or product quality.

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M!TCHI#$

Match each item to the statement or sentence listed below.a. marketing mi@ b. benchmarkingc. productd. convenience product

e. shopping productf. specialty productg. product lineh. product mi@i. unsought product B. maturity stagek. raw materialsl. total quality managementm. product life cyclen. installations

1. is a continuous effort to improve products and work processes.

). #he is the blending of the four strategy elements to fit the needs and preferences of a

target market.

6. &arm products and mineral products are e@amples of .

:. &irms often rely on to set performance standards and achieve superior performance,

resulting in a competitive advantage in the marketplace.

;. Sales of a product category continue to grow during the early part of the , but eventually

reach a plateau as the backlog of potential customers dwindles.

*. A bundle of physical, service, and symbolic attributes is aKnL .

. An assortment of product offerings sold by a firm is called the .

11. AKnL offers unique characteristics that cause buyers to pri8e those particular brands.

1). A series of related products offered by one company is aKnL .

16. #he specialty products of the business market are called .

1:. A product will progress through four stages, called the .



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Chapter 6 - Product and Service Strategies

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