Exam 8: Elements of Product Planning for Goods and Services

Installations are long-lasting capital items such as buildings and land rights, custom-made equipment, and standard equipment.

For six months Kim Wu has been working for Sunny Day Foods (SDF), a fast-growing manufacturer of organic foods. After graduating college, she worked for four years as a sales rep for a nationally known food company. But, she jumped at the chance when SDF contacted her about becoming marketing manager for its breakfast foods division, which sells dry cereals and a pancake mix. Kim spent the first few months on the job trying to better understand SDF, its product line, and marketing strategy. She reviewed the company's past marketing research, commissioned new research, and talked to both consumers and retailers. Now, the CEO of the company wants her thoughts on what the company's marketing strategy should be for the next few years. Her research indicates that among cereal customers there are at least five segments of customers who use SDF products. A.One segment, the loyalists, has a strong preference for one or two of the SDF cereals. These customers often go out of their way to visit a store with their favorite SDF cereal and buy only that product at the store. B. Another segment, the regulars, buys SDF cereals without much thought. For them it is just part of their routine and, if you ask them why they pick the cereal, they'd say it's just a habit. C.A third segment, the deal prone, sees SDF cereals as just another organic cereal. They view all organic cereals as pretty much the same and buy whichever brand seems to offer the best deal that week. D.A fourth segment, the politicos, consists of former buyers of SDF cereals. A few years ago the company took a strong stand in a presidential race-and these customers resented it. Now, they boycott all SDF foods because of that incident. E.A fifth segment, SDF who?, is made up of consumers who buy organic cereals but who don't have much awareness of particular organic brand names. In reviewing how SDF currently brands its products, Kim sees that it is using several different approaches. The Sunny Day Foods brand is used on most products the company sells. But a few years ago the company brought out an instant organic oatmeal with the Hot 'n Healthy name. SDF also makes cereal sold by a health food chain; the package for that chain uses the store's own name, Nature's Foods, as the brand name for the cereal. Which product class best describes how deal prone customers view SDF cereals?

The Magnuson-Moss Act:

Products that are meant for use in producing other products are products.

Consumer products which a customer buys on sight as unplanned purchases, may have bought the same way before, and wants "right now" are impulse products.

Trane Corp. manufactures long-lived, custom-made equipment which its customers treat as capital items. Trane's sales force faces much multiple-buying influence. Trane's products, which do not become part of the customer's final product, are:

Sumitomo Bank, a large bank in southern California, has just purchased 120 high-speed telephone fax machines (costing about $1,300 each) to speed communications among its many offices. The purchase was made by the purchasing manager, who expects the machines to last about five years. In this case, the fax machines are:

Raw materials are short-lived capital items.

A Hewlett-Packard "all-in-one" printer that serves as a computer printer, fax machine, copier, and scanner would fall into which of the following business product classes?

Packaging

______________ are products a consumer needs but isn't willing to spend much time and effort shopping for.

Staple products:

Procter and Gamble buys unprocessed logs which are handled as little as needed to move them to its plant. Eventually, they become part of P and G's disposable diapers and are considered an expense item on P and G's income statement. For P and G, logs are:

Raw materials are different from other business products in that:

Which of the following statements about the Lanham Act is TRUE?

Shopping products that a customer sees as basically the same and wants at the lowest price are homogeneous shopping products.

Consumer products that a customer feels are worth the time and effort to compare with competing products are shopping products.

Which of the following is NOT one of the consumer product classes discussed in the text?

Packaging can add value to a market offering by promoting, protecting, or enhancing the product.

Brand preference means customers usually choose the brand over other brands, perhaps out of habit or past experience.