Exam 11: Developing and Managing Goods and Services

The intangibility of services results in promotion-related challenges for service marketers because it is difficult to depict the actual performance of a service in an advertisement or to display it in a store.

Identify and explain the dimensions of product quality.

Why is it often difficult for organizations to delete products?

Scenario 11.1 Use the scenario to answer the questions. Cheetos Fat-free Crunchies is a product developed through continuous innovation. Cheetos engineered a technique for making low-fat snacks that taste delicious and also remain fresh for a longer duration. It introduced Fat-free Crunchies in limited markets in 2012 and began nationwide distribution in 2013. About 18 months later, a series of ads by Cheetos' competitors was aired to counterclaim that Cheetos Crunchies actually contained 1.5 grams of fat along with some percentage of preservatives and additives. Research showed that Cheetos Crunchies was not well-received by certain groups of customers. To retain its consumer base, Cheetos reduced the remaining fat of Chrunchies to 0 grams, took out the preservatives, and improved the taste. -Refer to Scenario 11.1. The new improved Cheetos Fat-Free Crunchies is an example of .

Scenario 11.2 Use the scenario to answer the questions. Jonathan Moore, President of Polar Manufacturing Company, has just reviewed the performance reports for the previous year and observes that there are certain areas in which the company needs to improve. He specifically feels that Polar's product mix can be managed in a more effective way. Jonathan summons a meeting of all the managers responsible for each of the product lines that Polar currently manufactures. The group reaches a consensus that the complete industrial product line of ice chests needs to be eliminated. It contemplates to do so by letting the product decline without making any changes in the marketing strategy or product. The group also decides to delete Polar's line of personal thermal underwear within a week, owing to its unprofitability. While discussing these strategies, the group also uncovers several customer segments at which new products could be targeted. The managers decide to assemble a group of people from all functional areas of the company and confer them responsibilities for all aspects of the new-product development. -Refer to Scenario 11.2. The group of people that the management has assembled to take on the task of new- product development can be best described as a:

Explain how the characteristics of services affect the development of marketing mixes.

Saresh is the owner of Change-ezz, a salon specializing in hair cutting and hair styling. Lately, Saresh has been trying to improve the quality of service provided by Change-eez. However, he has been experiencing difficulties in finding ways to systematize and control the salon's quality of operations. Saresh's inability to standardize his salon's service best illustrates the feature of the service.

Functional modifications make an existing product more durable.

Hair stylists find it challenging to standardize their service because the customer must be involved in the haircut procedure. Which of the following unique features of services does the scenario illustrate?

The ability of a product to provide the same level of quality over time is called:

The test marketing stage of the new-product development process is an extension of the product development stage.

Top managers at Cincinnati Microwave believe that they have a successful working prototype of their new radar detector and plan to advance directly to regional commercialization of the new product. In this instance, they are contemplating skipping the phase of the new-product development process.

The immediate drop approach to product deletion generates a sales spurt just before removing a product from the market.

When Chrysler produces new model vehicles, it discontinues production of previous year's model. However, when Apple brings out a new iPhone, it continues to produce the previous version for at least some period of time. Chrysler's new­product strategy is an example of a(n) , while Apple's strategy is an example of a(n) .

Functional modifications usually require that a product be redesigned.

The new-product development process does not include planning for advertising.

Explain the business analysis phase of the new-product development process.

Personal trainers cannot make fitness assessments of their clients without the clients being physically present because of the characteristic of services.

Why do brands require repositioning? What are the ways in which repositioning can be accomplished?

Delivery, installation, financing, repair, warranties, and guarantees are all examples of product features.