Deck 11: Product and Promotion: Creating and Communicating Value

Question 1

The brand name and packaging of a product are considered part of the actual product.

Answer 1

True

Question 2

A management consulting firm offers pure services in a packaged management program. The program includes tools for effective time management, conflict resolution, and risk management skills.

Answer 2

True

Question 3

Many products combine elements of both goods and services.

Answer 3

True

Question 4

The warranties and customer phone support a firm provides with its products are part of the actual product.

Question 5

Products fall into two broad categories: consumer products and business products.

Question 6

Convenience products are inexpensive goods and services consumers buy frequently with limited consideration.

Question 7

Consumer products are products intended for personal use or consumption.

Question 8

Augmented products are included in buy-one-get-one-free offers or when restaurants allow patrons to drop business cards in a large fishbowl for a chance at a free meal.

Question 9

Core benefits are provided by the augmentations to the actual product.

Question 10

The perishability of services means that providers cannot store them for later use.

Question 11

Maintenance, repair, and operating products (MRO) are small-ticket items that businesses consume on an ongoing basis but are not incorporated into the final product.

Question 12

Consistency in quality tends to be very high for most services.

Question 13

A product is a good or service that a business offers to satisfy consumer needs and wants.

Question 14

A meal at a family restaurant is an example of a pure service.

Question 15

Unsought products are those goods and services that consumers purchase only out of necessity. Traditionally, these products require little marketing and are quite easy to sell.

Question 16

Hennie is in the market for a new computer. He is leaning toward buying a model produced by Micromax because he likes the fact that they have a two-year warranty, and he has heard good things about the company's customer phone support and website. Hennie's choice appears to be influenced by the augmented product offered by Micromax.

Question 17

A product can be anything that a company offers to satisfy customer needs and wants. This includes physical goods, services, and ideas.

Question 18

Specialty products are products that consumers seldom purchase but are important to the consumer. If the product is unavailable, substitutes are not considered.

Question 19

Consumers purchase shopping products after searching for the best value. They compare features and benefits through the shopping process.

Question 20

Margo has decided to join Tone-It-Up Fitness in an effort to become physically fit. The core benefit Margo is seeking revolves around her desire to become more physically fit.

Question 21

For most consumers, cell phones, digital cameras, and dishwashers would be shopping goods.

Question 22

Copy machines, fax machines, and printers would be classified as maintenance, repair, and operating products.

Question 23

Today's smartest and most profitable firms have learned that the key to their success is to provide the highest possible level of performance in their products.

Question 24

A product mix is a group of products closely related to each other, either in terms of how they work or the customers they serve.

Question 25

Accessory equipment includes large capital purchases designed for an extended productive life.

Question 26

Installations are a type of business good characterized by a long productive life.

Question 27

Organizations use component parts and processed materials to produce other products.

Question 28

Accessory equipment includes smaller, movable capital purchases, designed for a shorter productive life than installations.

Question 29

Product consistency is the measure of how reliably a firm's product delivers on its promised quality level.

Question 30

Tom Taylor is in the market for a new car, but not any old car will do. He is convinced that the Gambolini Turbo-Terror roadster is the only car that will meet his needs. Thus, despite its high price tag and the fact that the nearest dealer is over 150 kilometres away, Tom is set to buy the car. This suggests that for Tom the Gambolini roadster is a shopping good.

Question 31

Quality level is defined by how well a product performs its core functions, as perceived by the customer.

Question 32

Product differentiation attempts to create real or perceived differences in the minds of the consumer.

Question 33

Automobile tires could be either a consumer product or a business product.

Question 34

Brand equity is the overall value of a brand to an organization.

Question 35

Product mix is the total number of product lines and individual items sold by a single firm.

Question 36

Convenience products are goods or services that reduce the work consumers must do and make their life more convenient. Examples include household cleaning services and lawn-care services.

Question 37

Cannibalization is the strategy of offering a new product in order to increase sales for other existing products.

Question 38

Beta Feta, a cheese distributor, has contracted with a large construction firm to build a new warehouse facility. This type of expenditure is an example of an installation.

Question 39

Product differentiation includes real or perceived differences that serve to distinguish one good or service from the next.

Question 40

Customer benefits occur when a product is well-designed and meets the needs and wants of consumers.

Question 41

Companies usually have several product mixes but only one product line.

Question 42

An example of a store brand is a local grocer reaching an agreement to give Campbell's soups the most favourable shelf location in the soup section of the store.

Question 43

Extensive product lines are always a better strategy than smaller product lines.

Question 44

When Pillsbury reached an agreement with M&M's to include the candy in one of its ready-to-bake cookie dough products, the two companies were using a strategy known as co-branding.

Question 45

Suppliers and competitors can sometimes be sources for new product ideas.

Question 46

Shirtzter, a manufacturer of men's shirts and jackets, has just reached an agreement to pay Kawasaki a substantial fee for the right to use the company's name and logo on some of its clothing lines. This type of arrangement is known as secondary branding.

Question 47

Manufacturers seldom place much emphasis on packaging, because this aspect of the product has little relevance to the customer's decision-making process.

Question 48

The goal of dynamically continuous product innovation is to find a way to produce a product more efficiently than competitors in order to offer it at a lower price.

Question 49

Increasingly, leading-edge companies are attempting to directly involve their customers in their new product development processes.

Question 50

Organizations use brand extension when similar products are added to an existing product line under the same brand name. Offering additional features to a cell phone package is an example of brand extension.

Question 51

In a highly competitive market, the best packaging strategy usually consists of emulating the packaging of a successful competitor.

Question 52

Apple's decision to introduce iPods in different sizes, colours, and storage capacities is an example of line extension.

Question 53

According to BusinessWeek magazine, one common mistake in building a brand is to use "surround sound" promotion that engulfs customers in the brand message. The magazine observes that such an approach often overwhelms and turns off potential customers.

Question 54

Continuous innovation involves slight modifications of existing products.

Question 55

For a business to thrive long-term, effective new product development is vital.

Question 56

Discontinuous innovation occurs when marketers find a new use for an existing product or technology.

Question 57

Continuous innovation is the process of making significant changes to existing products.

Question 58

A brand is a product's identity that sets it apart from products in the same category that are offered by other producers.

Question 59

Idea generation and idea screening are the first two stages of the new product development process.

Question 60

The decision by Coca-Cola to begin selling breakfast cereal under the Coca-Cola brand name would be an example of a brand extension.

Question 61

Diffusion is the rate at which products are adopted in the market.

Question 62

Books on cassettes and CDs are examples of continuous innovation.

Question 63

Three characteristics that contribute to a high diffusion rate for a new product are observability, trialability, and compatibility.

Question 64

The purpose of idea screening in the new product development process is to eliminate products that are inconsistent with company objectives or would be too expensive to develop.

Question 65

Marketing experts have determined that the product diffusion rate is really influenced by only three factors: compatibility, image, and sustainability.

Question 66

Studies have shown that about 27 percent of consumers can be classified as first adopters. They are the people who are willing to try new and unproven products. The remaining consumers tend to take a wait-and-see attitude before they will buy the product.

Question 67

The first telephone is an example of discontinuous product innovation.

Question 68

The last stage of the new product development process is commercialization, which involves introducing the product to the general market.

Question 69

The first cell phone is an example of discontinuous product innovation.

Question 70

Dynamically continuous innovation involves more significant changes in products than continuous innovation.

Question 71

The more complex a product is to understand and use, the slower its rate of diffusion tends to be.

Question 72

The formal process of soliciting feedback from consumers is accomplished in the testing phase of the product development process.

Question 73

A person who is a first adopter in one product category is very likely to be a first adopter in most other product categories.

Question 74

The rate of diffusion would indicate the stage in the product life cycle.

Question 75

Although e-book readers have been around for several years, Amazon recently introduced the Kindle, a new reader that features several significant improvements over older readers, including wireless connectivity based on cell phone technology. This technology allows Kindle owners to download the books they buy in less than two minutes from any location without the need to connect to a computer or the Internet. The Kindle is an example of continuous innovation.

Question 76

Healthmode, a personal health care company, has just developed a new type of skin lotion that it claims is much more effective than competing brands at healing dry skin. One way it could improve the rate of diffusion of this new product is to allow consumers to try out small samples.

Question 77

Idea screening is the last step in the product development process.

Question 78

Two key success factors in the commercialization stage of product development are gaining distribution and launching promotion.

Question 79

Large firms typically ensure a consistent product strategy by limiting the source of new product ideas to their research and development department.

Question 80

The rate of diffusion is dependent on the individual consumer and on the product itself.