Chapter 6 Testbank
  1. Which of the following products would be classified as an organizational good?
    1. an electric generator purchased by a homeowner to use in the event of a power outage
    2. a bolt of fabric to be used by the owner of a furniture store to help decorate a store window
    3. a pair of ear plugs bought by a man using his chain saw to cut down a tree laying across his driveway
    4. a computer program bought by a high-tech store manager for his children
    5. none of the above are examples of an organizational good

      Answer: B

      Response: Alternative B describes an operating supply.

    2.
  2. Which of the following is the best example of a convenience good?
    1. a pair of Adidas athletic shoes
    2. a bottle of champagne for celebrating a recent engagement
    3. a piece of Waterford crystal
    4. a package of peanut butter crackers
    5. a gardening book to give as a gift

      Answer: D

  3. Which of the following is the best example of a shopping good?
    1. a home security system
    2. a bottle of Snapple pink lemonade
    3. a pair of fingernail clippers
    4. a truckload of brick
    5. five pounds of corn meal

      Answer: A

  4. Mevelyn is very fussy about the kind of blue jeans she will buy. For her only the Levi 505 will do. She claims the others fit "funny." For Mevelyn, the Levi 505 is an example of a(n) _ good.
    1. shopping
    2. convenience
    3. impulse
    4. tangible
    5. specialty

      Answer: E

  5. Which of the following statements about organizational goods is true?
    1. Organizational goods are usually purchased as an end in themselves.
    2. The channel of distribution for organizational goods tends to be long.
    3. The category organizational goods includes anything that businesses need for their day-to-day operation.
    4. A load of wheat would be an example of a component part for a flour mill.
    5. In the organizational market, a $200,000 printing press would be a good example of a supply item.

      Answer: C

  6. Which of the following statements about the classes of consumer goods is true?
    1. Packaging is extremely important for specialty goods.
    2. The channel of distribution is typically very short for convenience goods.
    3. Brand name is more important than store name for shopping goods.
    4. Convenience goods have a high stock turnover rate.
    5. Convenience goods have high gross margins.

      Answer: D

  7. Which of the following statements about the classes of consumer goods is true?
    1. Consumers compare both price and quality when buying shopping goods.
    2. The producer bears the responsibility for advertising shopping goods.
    3. The brand name is significantly more important than the store name for specialty goods.
    4. Specialty goods have a low gross margin.
    5. Specialty goods have long channels of distribution.

      Answer: A

  8. Which of the following statements about organizational products is true?
    1. No middlemen are involved in the typically short channel for operating supplies.
    2. Price competition is important when selling or buying raw material.
    3. Brand preference is generally high when purchasing fabricating parts or materials.
    4. Very little promotional activity is involved with the sale of an installation.
    5. Advance buying contracts are commonly used when purchasing accessory equipment.

      Answer: B

  9. Which of the following statements about organizational products is true?
    1. A cash register would be an example of an operating supply for a retail store.
    2. Mercury would be an example of accessory equipment for a thermometer manufacturer.
    3. A walk-in freezer would be an example of an installation at a meat processing plant.
    4. A box of staples would be an example of accessory equipment at a law office.
    5. Rolls of paper would be an example of raw material at a publishing company.

      Answer: C

  10. What does it mean when you say that the market for a box of computer disks is horizontal?
    1. It means that the market is deep.
    2. It means that the market is restricted to just a few industries.
    3. It means that the market has numerous middlemen.
    4. It means that the market is anyone that owns or operates a computer.
    5. It means that the market is in the mature stage of its product life cycle.

      Answer: D

  11. As Alan strolled through the shopping center, he was trying to apply what he had learned in marketing class to what he saw. Which of Alan's descriptions do you believe to be most accurate?
    1. The Tie Shop, which only sells ties, would have a wide product mix.
    2. The Dollar Tree, which sells everything from baby rattles to potting soil to contact lens cleaning solution, would have a narrow product mix and a deep assortment.
    3. The Christian Superstore, which sells hundreds of self-help books, novels, and poetry books with a religious theme, has a shallow product mix.
    4. Louie's Bakery, which sells 36 different kinds of muffins, would have a deep product mix.
    5. Wal-Mart would have a narrow product mix.

      Answer: D

  12. Which of the following statements about branding is true?
    1. No matter how hard advertisers try, brands do not develop personalities.
    2. The brand name is the second most important thing on the package after the color or logo that first attracts the consumer.
    3. Brand image is unaffected by distribution intensity.
    4. Brand building activities are seldom, if ever, the main focus of product strategy development.
    5. The legal name for a brand is trademark.

      Answer: E

  13. Land O' Lakes began with the manufacturing of butter. Today the Minnesota company produces Land O' Lakes honey butter, which is an example of:
    1. a line extension
    2. a product mix addition
    3. a brand extension
    4. a franchise extension
    5. dual branding

      Answer: A

  14. Land O' Lakes began with the manufacturing of butter. Today the Minnesota company produces Land O' Lakes cream cheese, which is an example of:
    1. a line extension
    2. a product mix addition
    3. a brand extension
    4. a franchise extension
    5. dual branding

      Answer: C

  15. Why does a beer manufacturer like Heileman Distilleries produce Old Style, Colt 45, Lone Star, Ranier, and Samuel Adams brand beers?
    1. to minimize the importance of brand equity
    2. to cannibalize its own market
    3. to enjoy the benefits associated with franchise extension
    4. to create a competitive advantage that is not easily imitated
    5. to more efficiently target specific market segments

      Answer: E

  16. Which of the following statements about brand equity is true?
    1. Brand equity should never be viewed as a liability.
    2. Organizational products cannot have brand equity.
    3. Private-label brands cannot have brand equity.
    4. Brand equity is determined by advertising.
    5. Consumers ultimately determine brand equity.

      Answer: E

  17. Which of the following statements about the product life cycle is true?
    1. Total market sales of any product are highest when the product is in the maturation stage of its
    2. Product life cycle.
    3. Marketing managers should let the product life cycle dictate strategy development.
    4. Raisin bran cereal is an example of a product in the growth stage of its product life cycle.
    5. Adding machines are examples of products in the maturation stage of their product life cycle.
    6. Products are typically deleted when they enter the decline stage of their product life cycle.

      Answer: A

  18. A product audit by a cereal manufacturer would:
    1. categorize the cereals produced within its industry as to product similarities and differences
    2. determine if the company should delete its Barbie brand cereal
    3. analyze the sales levels of all cereals in its competitive environment
    4. review the marketing strategies used in its competitive environment
    5. determine the competitive advantage of each brand of cereal in the market

      Answer: B

  19. Which of the following statements about the marketing strategies used during various stages of the product life cycle is true?
    1. The number of distribution channels increases as the product moves through its product life cycle.
    2. Sales promotions are emphasized during the maturity stage of the product life cycle.
    3. Advertising is emphasized during the decline stage of the product life cycle.
    4. Pricing is always low during the decline stage of the product life cycle.
    5. A defensive strategy is adopted during the maturity stage of the product life cycle.

      Answer: E

  20. Which of the following shows how a product was improved by modifying a marketing dimension?
    1. The Caribbean cruise was improved by the addition of two more stops in Mexico.
    2. The 800-page history of chiropody was improved by the development of an extensive index.
    3. Liz Claiborne expanded the number of retail outlets that carries its sportswear.
    4. The Dillard House restaurant added three new vegetarian dishes to its menu.
    5. A manufacturer of an anti-bacterial liquid soap developed a refillable container.

      Answer: C

  21. Which of the following shows how a product was improved by modifying a product attribute?
    1. The soda manufacturer reduced its price per six-pack by 50 cents.
    2. The Grand Casino in Gulfport began advertising on the Internet.
    3. Kraft developed a picnic basket point-of-purchase display for its Miracle Whip spread.
    4. Louis Kemp Seafood Company added a pamphlet of recipes to each package of its seafood.
    5. Sherwin-Williams expanded the number of discount stores where its paint can be purchased.

      Answer: D

  22. The Ritz-Carleton is a hotel industry leader. After Marriott measured its services against the Ritz-Carleton, it instituted a customer service campaign called "proactive hospitality." Marriott managers examine monthly reports for problem areas. Then the Ritz-Carleton model is used to determine ways to remove the problems. This sort of product improvement is commonly called:
    1. networking
    2. product rejuvenation
    3. benchmarking
    4. product renewal
    5. total quality management

      Answer: C

  23. General Foods has managers who are solely responsible for each of its brands of coffee-Brim, Maxwell House, International Coffee, Sanka, and Yuban. These brand managers:
    1. are responsible for everything from marketing research to advertising for their product
    2. tend to be new-product champions
    3. have authority commensurate with their responsibilities
    4. are often called category managers
    5. are part of a marketing-manager system

      Answer: A

  24. Easton and Hespeler are two companies that manufacture hockey sticks that are sold to professional hockey teams for their players to use during games and in practice sessions. Each stick is then taken by the player who uses it and modified to meet their individual style of playing. In what product classification would you place these hockey sticks?
    1. specialty good
    2. shopping good
    3. parts or components
    4. supplies
    5. convenience good

      Answer: D

  25. Secondary market prices for tickets to the 2000 Super Bowl was $3,000 if you could find them. Many people were not able to find them even though they were willing to pay several thousand dollars for one. In terms of the classification of products, Super Bowl tickets would be classified as:
    1. component parts and materials
    2. convenience good
    3. supplies
    4. specialty good
    5. shopping good

      Answer: D

  26. Which of the following statements about the classes of consumer goods is true?
    1. Shopping goods, like Steuben glass and Steinway pianos, are infrequently purchased and are commonly sold in only one market in a particular area.
    2. Convenience products, like chewing gum, light bulbs, and sodas, usually have a low price, are sold in a large number of outlets, and require little time and effort be spent on the purchase decision.
    3. Specialty products, like refrigerators and washing machines, provide a high gross margin for the limited number of retailers that sell these items.
    4. The consumer believes the store name to be more significant than the brand name when buying a convenience product.
    5. The producer is typically responsible for all of the advertising for shopping products.

      Answer: B

  27. For a shopping product like a set of dining room table and chairs,:
    1. the producer takes responsibility for all of the advertising
    2. packaging is an extremely important part of the marketing mix
    3. the gross margin is low
    4. the stock turnover is high
    5. the channel is short

      Answer: E

  28. Which of the following statements is an example of a market consideration for Heidelberg, Inc. as it sells its half million dollar printing presses?
    1. The channel of distribution for the presses uses middlemen.
    2. Of all the elements of the promotional mix, selling is the most important for the presses.
    3. Brand preference is not important for an organization that is purchasing a Heidelberg press.
    4. Competitive pricing for the printing press is an important concern of the purchasing organization.
    5. None of the above statements about the market considerations for Heidelberg presses is true.

      Answer: B

  29. Which of the following is an example of a brand or trademark?
    1. the arches that McDonald's uses in its print and broadcast ads
    2. Nike
    3. the cursive design used to write Coca-Cola on cans and bottles of the soda
    4. the stylized eagle that the U.S. Postal Service uses on its truck, packaging, and mailboxes
    5. all of the above

      Answer: E

  30. When you buy Betty Crocker Original Supreme Brownie Mix, you also get a package of Hershey's syrup to go into your batter. The integration of these two brands is an example of:
    1. cobranding
    2. franchise extension
    3. family branding
    4. line extension
    5. brand extension

      Answer: A

  31. Which of the following is the BEST example of a franchise extension?
    1. The manufacturer of Irish Spring deodorant soap introduce a Sport bar with antibacterial odor protection.
    2. The manufacturer of Speed Stick anti-perspirant introduces an anti-perspirant that smells like the ocean surf.
    3. Blimpie fast food restaurants promote a joint promotion with Coca-Cola in which you get a free medium Coke product with any 6-inch sandwich purchase.
    4. The manufacturer of Carnation dry and evaporated milk introduces a baby cereal.
    5. The manufacturer of the number-one-selling financial software, Quicken, introduces Quicken Tax , software designed to make filing your income taxes easier.

      Answer: D

  32. Phillips has recently introduced the flat-screen television. This television design is an entirely new concept in terms of technology. The flat-screen television takes up significantly less space than a large-screen TV does, and is, therefore much more suitable for apartment dwellers. Which of the following statements about the marketing mix for a flat-screen television is true?
    1. Pricing strategy will not be important because the flat-screen television is in the introductory stage of its product life cycle.
    2. Promotion for flat-screen televisions is aimed at early adopters.
    3. Intensive distribution is used to market the flat-screen television.
    4. Promotion for flat-screen televisions is aimed at a mass market.
    5. All of the above statements about the marketing mix for the flat-screen television are true.

      Answer: B

  33. Which of the following statements about the use of cross-functional teams in product management and new product development is true?
    1. For cross-functional teams to succeed, management must believe in the concept whole-heartedly and without reservation.
    2. To prevent organizational alienation, cross-functional team members should receive no information that is not available to all department members.
    3. Training is unnecessary for successful cross-functional activities if the team members are selected carefully.
    4. Neither the presence nor the absence of trust affects how cross-functional teams accomplish their work activities.
    5. Management should expect cross-functional teams to be productive almost immediately after the teams are created.

      Answer: A

      Short Answer Questions

    34.
  34. There are many different ways to classify products. What would you tell someone if you were asked to simplify the classification process to its lowest common denominator?

    Answer: Products are classified according to two criteria: end use or market and degree of processing.

  35. Give a brief definition of any product that would be classified as an agricultural product.

    Answer: Fairly homogenous, sold in large volume, and low value per unit or bulk weight.

  36. What does it mean when you describe the market for a Koch Automatic Crossweb Labeling Machine as vertical?

    Answer: The market for the machine is narrow and deep.

  37. What is the underlying promise of both the marketing concept and total quality management (TQM) programs?

    Answer: Customer satisfaction.

  38. Who ultimately determines brand equity?

    Answer: The customer.

  39. How does the product life cycle concept help organizations develop effective product strategies?

    Answer: It forces management to take a long-range view of marketing planning.

  40. What is the primary reason for conducting a product audit?

    Answer: To detect sick products and then bury them.

  41. Why are an increasing number of organizations using cross-functional teams in product management and new-product development?

    Answer: Organizations need the contribution of all functions and therefore require their cooperation.

    Essay Questions

  42. You are eavesdropping on a meeting of the three developers of a home fire alarm system that interacts with the homeowner's computer and cellular phone. They seem to be arguing. The tall thin man says, "We've got to develop a product strategy. Until we agree on what we're selling, we can never develop a marketing strategy. I personally believe we are marketing a warning system that hangs on the wall." The dark-haired female responds with are seeing security." The third person in the room answers with, "How many times must I tell you? We're selling access to a computerized network system that can be expanded to provide all sorts of services." What do you make of this argument?

    Answer:

    The developer is arguing over the definition of product. The man is describing the tangible product-the physical entity. The female is thinking in terms of the generic product-the essential benefits the buyer expects to receive from the product. The third person is viewing it as an extended product-what will be available to the buyer once the initial purchase is made.

  43. How would you describe the marketing mix for a convenience good?

    Answer:

    Convenience goods are purchased frequently with minimum effort. They are often found near the checkout counter. They produce immediate satisfaction for the buyer. Packaging is very important for convenience products. The price is usually low. Their channel of distribution is typically long, and they are sold in as many outlets as possible. The producer is typically responsible for all promotion of convenience goods. Point-of-purchase displays are very important to the sale of the convenience good.

  44. Comment on the following statement: "Quality and value are synonymous."

    Answer:

    The term quality is often confused with the term value. Quality is defined as the degree of excellence or superiority that an organization's product possesses. Quality encompasses both the tangible and intangible aspects of the product or service. Value encompasses not only quality but also price. Value is defined as what the customer gets in exchange for what the customer gives.

  45. Tom's wife usually does the shopping, but last week she asked Tom to stop by the supermarket and pick up a box of Tide. Tom was overwhelmed with the choices-there were different size boxes and different smells. There was Tide designed to remove stains, liquid Tide, and Tide with bleach. Tom just knew he was going to bring home the wrong detergent. Can you explain to Tom why he had so many different choices of the same basic product?

    Answer:

    There are three reasons given for varying a product within a product line. First, potential customers rarely agree on a single set of specifications regarding their "ideal product." Second, customers prefer variety. Tom's clothes could smell like a lemon tree one day and a pine forest the next if his wife chose to buy those kinds of detergent. Third, the dynamics of competition lead to multiproduct lines. As competitors seek to increase market share, they find it advantageous to introduce new products that subsegment an existing market segment by offering benefits more precisely tailored to the specific needs of a portion of that segment.