Chapter 8
Product, Services, and Branding Strategy
GENERAL CONTENT: Multiple-Choice Questions
1. We define a ________ as anything that can be offered to a market for attention, acquisition,
use, or consumption and that might satisfy a want or need.
a. private brand
b. service variability
c. service
d. product
e. service encounter
(Answer: d; p. 218; Easy; LO1)
2. Services consist all of the following characteristics of EXCEPT ________.
a. activities
b. tangibility
c. benefits
d. satisfactions
e. A and B
(Answer: b; p. 218; Easy; LO1)
3. A product is a key element in the overall ________.
a. market offering
b. brand equity
c. brand extension
d. co-branding
e. value chain
(Answer: a; p. 218; Easy; LO1)
4. To differentiate their offers, beyond simply making products and delivering services,
companies are creating and managing customer ________.
a. memories
b. experiences
c. unsought products
d. internal marketing
e. service encounters
(Answer: b; p. 219; Moderate; LO1)
5. Product planners need to think about products and services on three levels. Each level adds
more customer value. The most basic level is the ________, which addresses the question,
“What is the buyer really buying?”
a. actual product
b. augmented product
c. core benefit
d. co-branding
e. exchange
(Answer: c; p. 219; Challenging; LO1)
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6. Product planners need to think about products and services on three levels. The second level
is where the company turns the core benefit into a(n) ________.
a. augmented product
b. brand equity
c. brand extension
d. industrial product
e. actual product
(Answer: e; p. 219; Challenging; LO1)
7. Product planners must design the actual product and find ways to augment it in order to
create the bundle of ________ that will provide the most satisfying customer experience.
a. core satisfactions
b. packaged values
c. brand values
d. benefits
e. characteristics
(Answer: d; p. 220; Challenging; LO1)
8. Products and services fall into two broad classes based on the types of consumers that use
them. Which is one of these broad classes?
a. industrial products
b. brand equity
c. co-branding
d. brand extension
e. cohesive
(Answer: a; p. 220; Moderate; LO1)
9. Products and services bought by final consumers for personal consumption include all of the
following EXCEPT ________.
a. convenience products
b. byproducts
c. shopping products
d. specialty products
e. unsought products
(Answer: b; p. 220; Easy; LO1)
10. ________ are less frequently purchased consumer products and services that customers
compare carefully on suitability, quality, price, and style.
a. Shopping products
b. Brands
c. Services
d. Industrial products
e. Line extensions
(Answer: a; p. 221; Moderate; LO1)
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11. ________ are consumer products and services with unique characteristics or brand
identification for which a significant group of buyers is willing to make a special purchase
effort.
a. Shopping products
b. Unsought products
c. Specialty products
d. Industrial products
e. Line extensions
(Answer: c; p. 221; Moderate; LO1)
12. ________ require a lot of advertising, personal selling, and other marketing efforts because
consumers do not usually know or care about them.
a. Specialty products
b. Line extensions
c. Unsought products
d. Shopping products
e. Staples
(Answer: c; p. 221; Easy; LO1)
13. ________ are those products purchased for further processing or for use in conducting a
business.
a. Unsought products
b. Specialty products
c. Shopping products
d. Industrial products
e. Accessories
(Answer: d; p. 221; Easy; LO1)
14. Industrial products and services fall into one of three groups that include all of the following
EXCEPT ________.
a. materials and parts
b. capital items
c. maintenance and operations
d. supplies and services
e. C and D
(Answer: c; p. 222; Moderate; LO1)
15. One characteristic of manufactured materials and parts is that they are mostly sold directly to
________.
a. consumers
b. industrial users
c. brand extensions
d. co-branders
e. wholesalers
(Answer: b; p. 222; Challenging; LO1)
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16. ________ are industrial products that aid in the buyer’s production or operations, including
installations and accessory equipment.
a. Materials
b. Parts
c. Capital items
d. Specialty items
e. Supplies
(Answer: c; p. 222; Moderate; LO1)
17. ________ consists of activities undertaken to create, maintain, or change the attitudes and
behavior of target consumers toward an organization.
a. Person marketing
b. Organization marketing
c. Internal marketing
d. Service variability
e. Intelligence marketing
(Answer: b; p. 222; Challenging; LO1)
18. ________ consists of campaigns by organizations to polish their images and market
themselves to various publics.
a. Corporate image advertising
b. Organization marketing
c. Person marketing
d. Social marketing
e. Intermarket marketing
(Answer: a; p. 222; Easy; LO1)
19. ________ involves activities undertaken to create, maintain, or change attitudes toward
particular people.
a. One-on-one marketing
b. Person marketing
c. Social marketing
d. Interactive marketing
e. Friend marketing
(Answer: b; p. 222; Easy; LO1)
20. ________ is defined as the use of commercial marketing concepts and tools in programs
designed to influence individuals’ behavior to improve their well being and that of society.
a. Unsought product
b. Internal marketing
c. Social marketing
d. Product line
e. Interactive marketing
(Answer: c; p. 223; Easy; LO1)
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21. Marketing programs aimed at reducing alcoholism, drug abuse, smoking and overeating are
called ________.
a. specialty products
b. social marketing
c. shopping products
d. consumer products
e. responsibility marketing
(Answer: b; p. 223; Moderate; LO1)
22. The Ad Council of America has developed dozens of ________ advertising campaigns,
involving issues ranging from preventive health, education, and personal safety to
environmental preservation.
a. social
b. brand equity
c. service
d. product line
e. extensive
(Answer: a; p. 223; Moderate; LO1) {AACSB: Communication}
23. A product’s benefits are communicated and delivered by ________ such as quality, features,
and style and design.
a. private brands
b. product attributes
c. consumer products
d. product mixes
e. none of the above
(Answer: b; p. 223; Challenging; LO1)
24. ________ is one of the marketer’s major positioning tools with a direct impact on product or
service performance. It is closely tied to customer value and satisfaction.
a. Packaging
b. Product quality
c. Social marketing
d. Specialty marketing
e. Position marketing
(Answer: b; p. 224; Moderate; LO1)
25. ________ is an approach in which all the company’s people are involved in constantly
improving the products, services, and business processes.
a. Product quality
b. Brand equity
c. Total quality management
d. Specialty product
e. Positioning
(Answer: c; p. 224; Easy; LO1)
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26. Product quality has two dimensions: quality level and ________.
a. quality consistency
b. product quality
c. performance quality
d. conformance quality
e. C and D
(Answer: a; p. 224; Challenging; LO1)
27. A product can be offered with varying ________. A stripped-down model, one without any
extras, is the starting point.
a. co-branding
b. features
c. product quality
d. service variability
e. extensions
(Answer: b; p. 224; Easy; LO2)
28. The company periodically surveys buyers who have used a product and asks questions such
as, “Which specific features of the product do you like the most?” The company can then
assess each feature’s ________ to customers versus its ________ to the company.
a. cost; line extension
b. cost; service
c. value; cost
d. service; line extension
e. equity; cost
(Answer: c; p. 224; Challenging; LO2)
29. A sensational ________ may grab attention and produce pleasing aesthetics, but it does not
necessarily make the product perform ________.
a. design; better
b. style; better
c. variable; faster
d. service-profit chain; easier
e. package; better
(Answer: b; p. 224; Challenging; LO2)
30. ________ is more than skin deep—it goes to the very heart of the product. It contributes to a
product’s usefulness as well as to its looks.
a. Style
b. Design
c. Packaging
d. A brand
e. Functionality
(Answer: b; p. 224; Easy; LO2)
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Chapter 8: Product, Services, and Branding Strategy
31. Good style and design can do many things including all of the following EXCEPT _______.
a. attract attention
b. improve product performance
c. cut production costs
d. cause unsought product reputation
e. B and D
(Answer: d; p. 225; Moderate; LO2)
32. A(n) ________ is a name, term, sign, symbol, design, or a combination of these, that
identifies that maker or seller of a product or service.
a. service
b. brand
c. co-brand
d. internal market
e. external market
(Answer: b; p. 225; Easy; LO2)
33. ________ involves designing and producing the container or wrapper for a product.
a. Packaging
b. Product line
c. Service
d. Branding
e. Labeling
(Answer: a; p. 226; Easy; LO2)
34. All of the following are functions performed by a product’s packaging EXCEPT that it
________.
a. contains and protects the product
b. contains the brand mark
c. protects children
d. determines product quality
e. may contain the brand symbol
(Answer: d; p. 226; Moderate; LO2)
35. The ________ performs many functions including: identifying the product or brand,
describing the product, promoting the product, and supporting its positioning.
a. line extension
b. social marketing
c. label
d. specialty product
e. A or C
(Answer: c; p. 227; Easy; LO2)
36. To combat labels that may mislead customers, fail to describe important ingredients, or fail to
include needed safety warnings the government passed the ________.
a. Co-branding Act of 1972
b. Labeling Act of 1970
c. Packaging Act of 1968
d. Fair Packaging and Labeling Act of 1966
e. Fair Labor Standards Act of 1938
(Answer: d; p. 227; Moderate; LO2) {AACSB: Ethics}
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37. Consumers need accurate nutritional information on food products. The ________ addresses
this need.
a. Fair Packaging and Labeling Act of 1966
b. Nutritional Labeling and Educational Act of 1990
c. Labeling Act of 1970
d. Packaging Act of 1970
e. Norris-LaGuardia Act of 1932
(Answer: b; p. 227; Easy; LO2) {AACSB: Ethics}
38. Customer service is another element of product strategy. What is the name of these types of
services?
a. brand equity services
b. product support services
c. social marketing services
d. unsought product services
e. customer service
(Answer: b; p. 227; Moderate; LO2)
39. A ________ is a group of products that are closely related because they function in a similar
manner, are sold to the same customer groups, are marketed through the same type of outlets,
or fall within given price ranges.
a. product line
b. line extension
c. private brand
d. convenience product
e. product bandwidth
(Answer: a; p. 228; Moderate; LO2)
40. Prodigy Music wants to grow by lengthening its product line. Which of the following might
prove productive?
a. internal marketing
b. line filling
c. product mix
d. social marketing
e. none of the above
(Answer: b; p. 228; Easy; LO2)
41. An alternative to product line stretching is adding more items within the present range of the
line. This is called ________.
a. product mix
b. interactive marketing
c. product line filling
d. co-branding
e. service marketing
(Answer: c; p. 228; Easy; LO2)
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Chapter 8: Product, Services, and Branding Strategy
42. A company’s ________ consists of all the product lines and items that a particular seller
offers for sale.
a. product mix
b. brand line
c. consumer mix
d. packaging mix
e. line extension
(Answer: a; p. 229; Moderate; LO2)
43. Product mix ________ refers to the number of different product lines the company carries.
Procter & Gamble markets 250 brands organized into many product lines.
a. length
b. height
c. width
d. perimeter
e. depth
(Answer: c; p. 229; Moderate; LO2)
44. Product line ________ refers to the number of versions offered of each product in the line.
Crest toothpaste comes in 13 varieties, ranging from Crest Multicare to Crest Baking Soda
formulations.
a. length
b. depth
c. height
d. width
e. perimeter
(Answer: b; p. 230; Challenging; LO2)
45. The consistency of the product mix refers to how closely related the various product lines are
in each of the following ways EXCEPT ________.
a. end use
b. production requirements
c. distribution channels
d. A and C
e. price
(Answer: e; p. 230; Challenging; LO2)
46. A company can increase its business in four ways. Which is NOT one of these ways?
a. It can add new product lines, thus widening its product mix.
b. It can lengthen its existing product lines.
c. It can add more versions of each product and thus deepen its product mix.
d. The company can discontinue some of its lines.
e. None of the above
(Answer: d; p. 228; Easy; LO2)
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47. It is safe to say that ________ are the major enduring asset of a company, outlasting their
specific products and even their facilities.
a. brands
b. convenience products
c. specialty products
d. unsought products
e. staples
(Answer: a; p. 230; Easy; LO2)
48. ________ is the value of the customer relationships that the brand creates. A powerful brand
is important, but what it really represents is a set of loyal consumers.
a. Customer mix
b. Customer equity
c. Line equity
d. Service variability
e. The service encounter
(Answer: b; p. 231; Challenging; LO2)
49. Marketers can position their brands in a target customer’s mind at any of three levels, the
lowest level of which is ________.
a. interactive marketing
b. internal marketing
c. product attributes
d. strong beliefs and values
e. added service
(Answer: c; p. 231; Moderate; LO3)
50. The strongest brands go beyond simply attribute or benefit positioning. Instead, they are
positioned on ________.
a. desirable benefits
b. good packaging
c. service inseparability
d. strong beliefs and values
e. customer image
(Answer: d; p. 232; Easy; LO3)
51. There are a number of desirable qualities for a brand name. These include all of the following
EXCEPT ________.
a. it should suggest something about the product’s benefits and qualities
b. it should be easy to pronounce, recognize, and remember
c. the brand should almost always be a long word to get attention
d. the name should translate easily into foreign languages
e. B and C
(Answer: c; p. 232; Moderate; LO3) {AACSB: Communication}
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Chapter 8: Product, Services, and Branding Strategy
52. As consumers have sought less expensive alternatives, manufacturers’ brands have declined
in the marketplace leading to an increasing number of retailers and wholesalers creating
________.
a. slotting fees
b. private brands
c. specialty products
d. service variability
e. none of the above
(Answer: b; p. 233; Easy; LO3)
53. In the so-called battle of the brands between manufacturers’ and private brands, ________
have many advantages. They control what products they stock, where they go on the shelf,
and which ones they will feature in local circulars.
a. unsought products
b. convenience products
c. specialty products
d. retailers
e. shopping products
(Answer: d; p. 234; Moderate; LO3)
54. Most retailers face a plethora of brands and a limited amount of shelf space. Leading to
demands for ________ before they will accept new products for their shelves.
a. slotting fees
b. private fees
c. line extension fees
d. product line fees
e. distribution charges
(Answer: a; p. 234; Moderate; LO3)
55. Some companies ________ names or symbols previously created by other manufacturers,
names of well-known celebrities, and/or characters from popular movies and books. These
can provide an instant and proven brand name.
a. service
b. license
c. market
d. package
e. steal
(Answer: b; p. 235; Moderate; LO3)
56. General Electric worked with Culligan to develop its Water by Culligan Profile Performance
refrigerator with a built-in Culligan water filtration system. This is an example of ________.
a. brand extension
b. brand equity
c. co-branding
d. internal marketing
e. cannibalization
(Answer: c; p. 236; Moderate; LO3)
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57. In most ________ situations, one company licenses another company’s well-known brand to
use in combination with its own.
a. brand extension
b. brand equity
c. co-branding
d. internal marketing
e. line extension
(Answer: c; p. 236; Easy; LO3)
58. Co-branding has limitations including all of the following EXCEPT ________.
a. complex legal contracts
b. the need to coordinate advertising
c. coordination of sale promotion
d. product quality issues
e. the need for mutual trust
(Answer: d; p. 236; Moderate; LO3)
59. A company has four choices when it comes to developing brands. What is NOT one of those
choices?
a. line extension
b. brand extension
c. multibrands
d. width and depth extension
e. B and C
(Answer: d; p. 237; Challenging; LO3)
60. One risk of ________ is that sales may come at the expense of other items in the line. It
works best when it takes sales away from competing brands.
a. brand extension
b. line extension
c. packaging
d. social marketing
e. Internet marketing
(Answer: b; p. 237; Moderate; LO3)
61. Kellogg’s has introduced a new puffed corn cereal, Kellogg’s Corn Puffs, a category where
they previously did not have a product. This is an example of ________.
a. brand equity
b. product line
c. brand extension
d. private brand
e. brand symbol
(Answer: c; p. 237; Moderate; LO3)
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62. ________ offer(s) a way to establish different features and appeal to different buying
motives. It also allows a company to lock up more reseller shelf space. Or the company may
want to protect its major brand by setting up flanker brands.
a. New brands
b. Interactive marketing
c. Product quality
d. Multibrands
e. Differentiation
(Answer: d; p. 238; Challenging; LO3)
63. Retailers have become concerned that there are already too many brands and are pursuing
________ strategies to weed out weaker brands and focus on brands that can achieve the
number-one or number-two market share positions in their categories.
a. megabrand
b. service inseparability
c. social marketing
d. unsought product
e. undifferentiated
(Answer: a; p. 238; Moderate; LO3)
64. Many major brand marketers often spend huge amounts in the beginning on advertising to
create brand ________ and to build preference and loyalty.
a. extension
b. awareness
c. packaging
d. internal marketing
e. preference
(Answer: b; p. 238; Easy; LO3)
65. Advertising campaigns can help to create name recognition, brand knowledge, and maybe
even some brand preference. However, the fact is that brands are not maintained by
advertising but by the ________.
a. marketing
b. line extensions
c. brand experience
d. product mix
e. word-of-mouth elements
(Answer: c; p. 238; Easy; LO3) {AACSB: Communication}
66. The brand’s positioning will not take hold fully unless everyone in the company lives the
brand. Therefore the company needs to train its people to be ________.
a. customer centered
b. specialty centered
c. convenience centered
d. line-extension centered
e. loyal
(Answer: a; p. 238; Moderate; LO3)
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67. Some companies have now established ________ to maintain and protect their brands’ image,
associations, and quality and to prevent short-term actions by overeager brand managers from
hurting the brand.
a. brand equity managers
b. category managers
c. brand extension managers
d. new brand managers
e. marketing managers
(Answer: a; p. 239; Easy; LO3)
68. Canada Dry and Colgate-Palmolive have appointed ________ managers to maintain and
protect their brand’s images, associations, and quality, and to prevent short-term actions by
overeager brand managers from hurting the brand.
a. product line
b. service
c. brand equity
d. brand extension
e. marketing
(Answer: c; p. 239; Moderate; LO3)
69. A company may sense the need for a new brand name for each of the following reasons
EXCEPT ________.
a. the power of its existing brand name is waning
b. it is entering a new product category
c. they were recently sued
d. the current brand name is no longer appropriate
e. A and D
(Answer: c; p. 238; Easy; LO3)
70. A company must consider four special service characteristics when designing marketing
programs. Which is NOT one of these characteristics?
a. intangibility
b. inseparability
c. perishability
d. interactive marketing
e. C and D
(Answer: d; p. 239; Challenging; LO4)
71. ________ means that services cannot be seen, tasted, felt, heard, or smelled before they are
bought.
a. Service inseparability
b. Service variability
c. Service intangibility
d. Service perishability
e. Service heterogeneity
(Answer: c; p. 239; Moderate; LO4)
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Chapter 8: Product, Services, and Branding Strategy
72. ________ means that services cannot be separated from their providers, whether the
providers are people or machines.
a. Service intangibility
b. Service inseparability
c. Service variability
d. Service perishability
e. Service heterogeneity
(Answer: b; p. 240; Moderate; LO4)
73. In a product business, products are fairly standardized and can sit on shelves waiting for
customers. But in a service business, front-line service employees and the support processes
backing these employees participate in ________.
a. interaction
b. co-branding
c. industrial marketing
d. internal marketing
e. external marketing
(Answer: a; p. 240; Challenging; LO4)
74. Each of the following brand names is now a generic name that any seller can use EXCEPT
________.
a. yo-yo
b. escalator
c. Xerox
d. thermos
e. linoleum
(Answer: c; p. 233; Moderate; LO3)
75. ________ means that the service firm must effectively train and motivate its customercontact employees and supporting service people to work as a team to provide customer
satisfaction.
a. Service inseparability
b. Service intangibility
c. Service variability
d. Internal marketing
e. External marketing
(Answer: d; p. 241; Moderate; LO4)
True/False
76. We define a product as anything that can be offered to a market for attention, acquisition, use,
or consumption and that might satisfy a want or need.
(True; p. 218; Easy; LO1)
77. The core product is a form of product that consists of activities, benefits, or satisfactions
offered for sale that are essentially intangible and do not result in the ownership of anything.
Examples are banking, hotels, airlines, retail, tax preparation, and home repair.
(False; p. 218; Moderate; LO1)
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78. Sony must offer more than just a camcorder. It must provide consumers with a complete
solution to their picture-taking problems. This is referred to as the complete product
experience
(False; p. 220; Challenging; LO1)
79. Unsought products are products and services that the customer usually buys frequently,
immediately, and with a minimum of comparison and buying effort.
(False; p. 221; Easy; LO1)
80. Convenience products are less frequently purchased consumer products and services that
customers compare carefully on suitability, quality, price, and style.
(False; p. 220; Moderate; LO1)
81. Programs that include public health campaigns to reduce smoking, alcoholism, drug abuse,
and overeating are examples of the social idea known as social marketing.
(True; p. 223; Easy; LO1) {AACSB: Ethics}
82. Design is a larger concept than style. Style describes the appearance of a product.
(True; p. 224; Moderate; LO2)
83. The brand of a product can determine its consumer value.
(True; p. 226; Moderate; LO2)
84. Packaging is essential to attracting attention. A typical grocery shopper passes 300 items per
minute.
(True; p. 226; Easy; LO2)
85. Product support services identify the product or brand, describe several things about the
product, and promote the product through attractive graphics.
(False; p. 226; Moderate; LO2)
86. Quaker produces a variety of cereals. This variety is called its product line.
(True; p. 228; Moderate; LO2)
87. A company’s product mix has four important dimensions: width, length, depth, and
convenience.
(False; p. 229; Easy; LO2)
88. Dove marketers can go beyond the brand’s cleansing cream attributes and talk about the
resulting benefit of softer skin. This is known as product attributes in brand positioning.
(False; p. 232; Challenging; LO2)
89. One important quality for a brand name is that it should suggest something about the
product’s benefits and qualities.
(True; p. 232; Easy; LO3)
90. An increasing number of retailers and wholesalers have created their own brands—such as
Wal-Mart offers Sam’s Choice beverages and food products. This is called co-branding.
(False; p. 233; Challenging; LO3)
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91. When a company introduces a new brand name in the same product category, it is called cobranding.
(False; p. 237; Challenging; LO3)
92. Many originally protected brand names, such as thermos and Xerox, are now generic names
that any seller can use.
(False; p. 233; Easy; LO3)
93. An example of service variability is that within a given Marriott hotel, one registration-desk
employee may be cheerful and efficient, whereas another may be unpleasant and slow.
(True; p. 240; Challenging; LO4)
94. Service inseparability means that services cannot be separated from their providers, whether
the providers are people or machines.
(True; p. 240; Moderate; LO4)
95. Both provider and the customer affect the service outcome.
(True; p. 240; Easy; LO4)
96. The service-profit chain means the set of all product lines and items that a particular seller
offers for sale.
(False; p. 240; Challenging; LO4)
97. An aspect of managing service differentiation is in the company’s service delivery.
(True; p. 244; Moderate; LO4)
98. Customer retention is not a particularly good measure of quality. A service firm’s ability to
hang on to its customers does not depend on how consistently it delivers value to them.
(False; p. 244; Easy; LO4)
99. Managing service productivity can take place when a company increases the quality of its
service by giving up some of its output.
(False; p. 245; Moderate; LO4)
100. With interactive marketing the service quality doesn’t depend on the level of quality of the
buyer-seller interaction during the service encounter.
(False; p. 242; Moderate; LO4)
101. Internal marketers face special challenges. They must figure out what products to introduce to
other countries.
(False; p. 241; Moderate; LO4)
102. In international product and service branding, it is important to know what different words
mean in different countries.
(True; p. 232; Easy; LO3) {AACSB: Global}
103. Exxon Standard Oil of New Jersey tested several brand names in 54 languages in more than
150 foreign markets, and discovered that one name under consideration referred to a stalled
engine in Japanese.
(True; p. 232; Moderate; LO3) {AACSB: Global}
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104. It seems that almost every retailer now carries its own store brands.
(True; p. 233; Easy; LO3)
105. Service companies, unlike product-based companies, find it difficult to differentiate
themselves by delivering consistently higher quality than their competitors do.
(False; p. 244; Challenging; LO4)
Essay
106. How do the two broad classes of consumer products and services differ from each other?
Consumer products—those bought by final consumers—are usually classified according to
consumer shopping habits. Industrial products—purchased for further processing or for use in
conducting a business—include materials and parts.
(p. 220; Moderate; LO1)
107. Name and describe three decisions that companies make regarding their individual products
and services, product lines, and product mixes.
Product attribute decisions involve product quality, features, and style and design. Branding
decisions include selecting a brand name and developing a brand strategy. Packaging
provides many key benefits, such as protection, economy, convenience, and promotion. There
are also additional answers to this question.
(p. 223; Easy; LO2)
108. Branding poses challenging decisions to the marketer. What four major brand strategy
decision areas does a manufacturer face?
The four decision areas are: brand positioning, brand name selection, brand sponsorship, and
brand development.
(p. 231; Challenging; LO3)
109. Mary Smith Chocolates faces four choices when it comes to developing a new brand.
Describe what they are.
Mary Smith Chocolates can introduce a line extension; it can introduce a brand extension; it
can introduce multibrands; or it can begin a new brand.
(p. 237; Moderate; LO3)
110. Services are characterized by four key characteristics. Name and describe these four
characteristics.
Intangible: they cannot be seen, tasted, felt, heard, or smelled before they are bought.
Inseparable: they are produced and consumed at the same time and cannot be separated from
their providers, whether the providers are people or machines. Variable: their quality may
vary greatly, depending on who provides them and when, where, and how they are provided.
Perishable: they cannot be stored for later sale or use.
(p. 239; Challenging; LO4)
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111. Good service companies focus attention on both customers and employees. Describe what the
service-profit chain and internal marketing are, and how they differ from each other.
The service-profit chain links service firm profits with employee and customer satisfaction.
Internal marketing by a service firm refers to training and effectively motivating its customercontact employees and all the supporting service people to work as a team to provide
customer satisfaction. The first deals with employees and customers. The second deals with
training employees.
(p. 240; Challenging; LO4)
112. Describe the growth of services industries versus product-based industries in the American
marketplace.
Services have grown dramatically in recent years. Services now account for close to 79
percent of the U.S. GDP. By 2014 it is estimated that nearly four out of five jobs in the
United States will be in service industries.
(p. 239; Challenging; LO4)
113. Describe the role of packaging.
Packaging involves designing and producing the container or wrapper for a product.
Packaging contains and protects the product, but it also is used to attract customer attention,
to describe the product, and to make the sale.
(p. 226; Easy; LO3)
114. There has been a long history of concern about product labeling in the United States. Briefly
explain the history of U.S. laws governing labels.
The Federal Trade Commission Act of 1914 held that false, misleading, or deceptive labels or
packages constitute unfair competition. Labels can mislead consumers, fail to describe
important ingredients, or fail to include needed safety warnings. As a result, several federal
and state laws regulate labeling. The Fair Packaging and Labeling Act of 1966, for example,
set mandatory labeling requirements, encouraged volunteer industry packaging standards, and
allowed federal agencies to set packaging regulations in specific industries. The Nutritional
Labeling and Education Act of 1990 requires sellers to provide detailed nutritional
information on food products; the Food and Drug Administration regulates the use of healthrelated terms such as low fat, light, and high fiber.
(p. 227; Challenging; LO3) {AACSB: Ethics}
115. Explain product mix width, length, consistency, and depth.
Product mix width refers to the number of different product lines the company carries;
whereas, product length refers to the total number of products carried in a company’s product
lines. Consistency refers to how closely related the various product lines are in end use.
Product depth refers to the number of versions offered of each product in the line.
(p. 229; Easy; LO2)
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APPLICATION CONTENT: Multiple-Choice Questions
116. Materials and parts include raw materials and manufactured materials and parts. All of the
following could be categorized as either a material or part EXCEPT ________.
a. farm products such as wheat
b. natural products such as iron ore
c. nonraw materials
d. petroleum
e. C and D
(Answer: c; p. 222; Easy; LO1)
117. Which of the following capital items is NOT considered an accessory part of equipment? The
finance department needs to know so they can be classified correctly.
a. buildings
b. hand tools
c. lift trucks
d. desks
e. chairs
(Answer: a; p. 222; Moderate; LO1)
118. All of the following have been classified as supplies by your firm’s cost accountant EXCEPT
________.
a. paper
b. lubricants
c. paint
d. nails
e. hand trucks
(Answer: e; p. 222; Easy; LO1)
119. What type of marketing is demonstrated by General Electric’s use of the phrase, “We bring
good things to life”?
a. personal marketing
b. corporate image marketing
c. product quality
d. product line
e. reminder ads
(Answer: b; p. 222; Challenging; LO1)
120. ________ can also be marketed. In one sense, all marketing is the marketing of this. It can be
specific, such as Crest toothpaste’s “create smiles every day.”
a. Co-branding
b. Internal marketing
c. Ideas
d. Unsought products
e. Marketing intelligence
(Answer: c; p. 223; Moderate; LO1) {AACSB: Communication}
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121. You have just returned from a training session where you learned about product quality.
While there you learned that the concept of product quality has two dimensions. Which of the
following is one of these dimensions?
a. consistency
b. brand
c. convenience product
d. specialty product
e. image
(Answer: a; p. 224; Easy; LO2)
122. Purina Dog Chow sells more than the same size store brand dog food even though the store
brand dog food costs $0.50 less per bag. This is known as brand ________.
a. extension
b. equity
c. specialty
d. service
e. switching
(Answer: b; p. 231; Moderate; LO3)
123. Companies often introduce additional brands in the same category. What is this called?
a. product mix
b. multibranding
c. brand equity
d. consumer branding
e. brand blending
(Answer: b; p. 238; Easy; LO3)
124. Manor Plaza Barber’s customers have noticed that the quality of a haircut depends on who
provides it as well as when, where, and how it is provided. What have the customers noticed?
a. service intangibility
b. service inseparability
c. service variability
d. service perishability
e. service distinction
(Answer: c; p. 240; Moderate; LO4)
125. Because a barber cannot inventory haircuts, which one of the following applies?
a. service intangibility
b. service inseparability
c. service variability
d. service perishability
e. low-context services
(Answer: d; p. 240; Easy; LO4)
126. Krispy Kreme, by delivering hot and fresh donuts to their customers, provides ________.
a. tangible products
b. services
c. experiences
d. none of the above
e. A and C
(Answer: e; p. 219; Moderate; LO1)
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127. Obie Miller’s Steakhouse provides gourmet menu options to its customers, as well as
impeccable service. They even allow the customer to hand-select his or her own cut of meat.
Here ________ is/are evident.
a. only an actual product
b. only an augmented product
c. only a core benefit
d. both a core benefit and an actual product
e. a core benefit, an actual product, and an augmented product
(Answer: e; p. 220; Challenging; LO1)
128. You just bought a hickory rocking chair, handmade by an Amish woodcarver in Lancaster,
Pennsylvania, from locally grown wood. This is an example of a(n) ________.
a. convenience product
b. shopping product
c. specialty product
d. service
e. augmented product
(Answer: c; p. 221; Easy; LO1)
129. You have an upset stomach. Your spouse rushes to the corner convenience store for a bottle
of Pepto-Bismol. This product is a(n) ________ product.
a. unsought
b. convenience
c. augmented
d. shopping
e. specialty
(Answer: b; p. 220; Easy; LO1)
130. Mabel Lu is planning to buy a new washing machine. She notices that they come in numerous
price ranges. She wants to make sure she gets the most for her money. This product is a(n)
________ product.
a. augmented
b. specialty
c. convenience
d. shopping
e. unsought
(Answer: d; p. 221; Moderate; LO1)
131. “I love New York” is an example of ________.
a. corporate image advertising
b. person marketing
c. image marketing
d. deceptive advertising
e. place marketing
(Answer: e; p. 223; Moderate; LO1)
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132. To achieve its social change objectives, social marketing ________.
a. utilizes only the promotional P of the marketing mix
b. utilizes only the promotional and product Ps of the marketing mix
c. works to influence individuals’ behavior to improve their well-being
d. utilizes all of the Ps in the marketing mix
e. C and D
(Answer: e; p. 223; Challenging; LO1)
133. Which of the following is/are examples of product line depth?
a. hamburger and cheeseburger
b. hamburger and fries
c. Coke and Diet Coke
d. A and C
e. all of the above
(Answer: d; p. 230; Challenging; LO2)
134. Helene Curtis began to market shampoo for normal hair. In an attempt to increase profits and
use excess market capacity, Helene Curtis then marketed shampoo for oily hair and colortreated hair. This is an example of ________.
a. line filling
b. social marketing
c. line stretching
d. an unsought product
e. people marketing
(Answer: a; p. 229; Challenging; LO2)
135. The manager of the local Nordstrom’s has noted that a powerful brand forms the basis for
building strong and profitable customer relationships. The fundamental asset underlying
brand equity is ________.
a. social marketing
b. customer equity
c. specialty products
d. line filling
e. product length
(Answer: b; p. 231; Moderate; LO2)
Short Answer
136. What does the term product include?
Products include physical objects, services, events, persons, places, organizations, ideas, or
mixes of these entities.
(p. 218; Easy; LO1)
137. Give an example of the most basic level of product, the core benefit.
Examples are numerous. A salon owner, providing similar services of a day spa, may focus
on “pampering yourself in total relaxation.”
(p. 219; Moderate; LO1)
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138. Give examples of the second level of product, the actual product.
A salon owner may market hair- and nail-care products and services, full- and partial-body
massages, workout equipment and training, and social activities, and so forth.
(p. 219; Easy; LO1)
139. Give an example of an augmented product.
Examples will vary. In this situation, an augmented product may include the customer of a
salon may have the option of having most of the services performed in the privacy and
solitude of his or her home.
(p. 220; Challenging; LO1)
140. Why might you suggest, based upon the products offered, that 7-11 Stores are referred to as
convenience stores?
This is because they generally offer convenience products for sale in their stores, such as soft
drinks, milk, and candy.
(p. 220; Easy; LO1)
141. What are the general characteristics of convenience products?
They are low-priced and require very little customer thought or shopping effort.
(p. 220; Easy; LO1)
142. Give three examples of shopping products.
Examples may include washing machines, lawn mowers, and furniture.
(p. 221; Easy; LO1)
143. What are the general characteristics of shopping products?
Shopping products often require a comparison of brands and are distributed in fewer outlets;
they require more planning and shopping effort than do convenience products.
(p. 221; Easy; LO1)
144. Give three examples of specialty products.
Examples may include a Rolex watch, a Jaguar sports car, and an around-the-world cruise.
(p. 221; Easy; LO1)
145. What are the general characteristics of specialty products?
Such specialty products carry extremely high prices; purchase frequency is usually low.
Buyers typically care little about price level and carry with them a strong brand preference.
(p. 221; Easy; LO1)
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146. Provide two examples of place marketing.
Answers will vary. Examples may include activities undertaken to create, maintain, or change
attitudes or behavior toward a particular place. Two examples are: “I Love New York” and
“Lancaster County, Garden Spot of America.”
(p. 223; Moderate; LO1)
147. As subjective as it may be, attempting to convince a bald man that joining The Hair Club will
improve his looks and attract more dates is an example of what kind of marketing?
Idea marketing is being used in this situation.
(p. 223; Challenging; LO1)
148. How might measuring service quality be more difficult than measuring product quality?
Products are tangible; therefore, measuring quality across several dimensions, such as
durability, functionality, and so on, may be easier or performed more consistently than when
measuring service quality.
(p. 239; Challenging; LO4)
149. It is important to move consumers from merely recognizing a brand to preferring that brand.
How might this happen?
A consumer has likely tried the brand at least once in order to prefer it to others; or, perhaps
the consumer prefers a brand merely because he or she has been exposed to a catchy ad or
promotional gimmick.
(p. 238; Challenging; LO3)
150. How might a flower shop engage in line stretching?
A flower shop may offer single-stem, fresh-cut flowers, sold individually, small
arrangements, bouquets, or large ceremonial sprays; with line stretching, the flower shop will
offer a wide array of products geared toward all types of flower buyers.
(p. 228; Challenging; LO2)
151. Using Coca-Cola as an example, demonstrate product depth in the soft drink industry.
Examples include Coke, Diet Coke, Caffeine-free Coke, and Cherry Coke.
(p. 230; Easy; LO2)
152. A1 Steak Sauce, 409, A & D Ointment, A & W Root Beer, and Super 8 are all successful
brand names. From what you have learned about brand name selection, how might such
names with alphanumeric characters aid in brand name selection?
Such brands are easy to pronounce, easy to recognize, and easy to remember.
(p. 232; Easy; LO3)
153. Consider a massage. What service characteristics definitely define the massage as a service?
Intangibility, variability, inseparability, and perishability all define the massage as a service.
(p. 239; Easy; LO4)
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154. You have flown both first-class and economy class from Boston to San Francisco. Upon
reflection, you admit that you preferred the economy-class flight. List three possible factors
that may have led to that variability.
The first-class flight may have been bumpy due to windy weather or the plane, for whatever
reason, may have left Chicago late. The flight attendants in the first-class section may not
have been as attentive as you expected. The price difference may have been extremely
drastic, given the equivalent service received.
(p. 239; Challenging; LO4)
155. As a service provider, why might you perceive the buyer-seller relationship in the service
encounter to be especially critical?
Customers’ perceptions are established during the service encounter. At this time, based on
these perceptions, customers can become loyal, long-term buyers. It is critical that service
sellers establish sound relationships from the beginning.
(p. 240; Challenging; LO4)
Scenario
Herb Marks had built his enterprise on the faithful patronage of four specialty shops and
a large contract from Elmore Distributors. But after two years, the maker of novelty pens and
pencils had to rethink his strategy when his two-year contract with Elmore ended.
Herb had built a company reputation on the manufacture and distribution of a variety of
wooden writing utensils with customized engravings. Specialty shops loved to display the
products in their fancy, lighted showcases, but such specialty shops—alone—were not profitable.
Herb Marks had established a brand name, known merely as Marks, and decided to expound on
it.
Herb extended his writing utensil lines to include quills, felt-tip pens, and multiplecartridge pens that write in different colors. He even added a line of various grades of
personalized stationery and business cards. Perhaps Herb’s biggest added touch, however, was
the addition of two salespeople who would work to explain the diverse array of products offered
by Marks, as well as nurture existing accounts.
“We make an excellent product,” Herb Marks stated, “and we honor a good guarantee on
everything we sell. But let’s face it—we face hundreds of competitors! We need Marks
representatives out there to help prospects understand what they should demand in something so
simple as a writing tool.”
The Marks brand was fast-becoming synonymous with top-notch customer service. Part
of the purchase package brought personal visits from the Marks representative, before the
purchase and long after.
156. Explain Herb’s market offering.
Herb’s wide array of specialty writing utensils is the key element in the offering; however,
the Marks brand is also built upon the customer relationships established early on and
nurtured in the long run.
(p. 218; Easy; LO1)
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157. What is the core benefit that Herb’s customers obtain from his offerings?
The core benefit can be described as the ability to convert thoughts to a tangible, preserved
form on paper.
(p. 219; Moderate; LO1)
158. Go beyond the core benefit and the actual product in this scenario and explain the augmented
product.
The augmented product is the determined effort by Marks representatives to build lasting
relationships with customers.
(p. 220; Challenging; LO1)
159. How would you classify the consumer products Marks manufactures?
The Marks brand is associated with specialty products; these products are probably higher
priced and need to be perceived as different and superior from competitors’ offerings.
(p. 221; Moderate; LO1)
160. Does organization marketing occur in this scenario? Explain.
Herb Marks does attempt to carry out activities to “sell” the organization itself. The Marks
products should speak for themselves; the representatives’ customer visits may serve as
powerful, image-building mechanisms.
(p. 222; Challenging; LO1)
161. Is it important that these products have the Marks name attached?
With the Marks brand name, the products offered could be better positioned in the market as
they are identified with the Marks name and all that it stands for.
(p. 231; Challenging; LO2)
162. Is line filling evident in this scenario? Explain.
Yes. Examples of line filling include the new felt-tip pens, multiple-cartridge pens, and quills
added to the existing line of pens and pencils.
(p. 228; Moderate; LO2)
163. Discuss examples of product depth demonstrated in this scenario.
There are apparently numerous versions of the same product types in this scenario; Herb
Marks can vary the materials, style, and engravings used for each product.
(p. 230; Moderate; LO2)
164. What factors are critical in positioning the Marks brand in the marketplace?
The success of the Marks brand depends on the products’ attributes, the perceived benefits of
the brand, and the beliefs and values that the Marks products deliver more than just certain
attributes and benefits.
(p. 231; Challenging; LO3)
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165. Are brand extensions evident in this scenario? Explain.
Yes. The Marks brand now includes stationery and business cards.
(p. 237; Easy; LO3)
Continuing Small Business Case #7: The Coffee Company
In 2004 Lynn and Esther Yoder became the owners of the Coffee Company. At that time they
added a larger grill, and significantly improved the appearance of the café. In addition, the menu
had been expanded to include many more homemade items. They also kept the grill open through
the dinner hour. The business has traditionally sold gourmet coffees and teas, in bulk, and a few
teapots and small coffee makers. The cafe also now offers music on Thursday, Friday, and
Saturday nights. As a result of these changes, it is now hard to find a day when the cafe isn’t
packed for breakfast, lunch, and dinner. Esther recently added a line of homemade pastries, and
although the café has always offered fine coffees and teas, she was now considering adding
several different lines of specialty, gourmet foods. These products would be branded items
packaged in attractive cans, jars, boxes, etc. Her goal was to not only satisfy her customers’
hunger on site, but also to send them home with a high quality food product for later use, be it
coffee, tea, pastry, or something else.
166. Product planners need to think about products and services on three levels. Each level adds
more customer value. How might this relate to the Coffee Company as they seek to expand
their product offerings?
The first of the three levels is the core benefit, which addresses the question, “What is the
buyer really buying?’ With the Coffee Company the customer is first buying some form of
nourishment, some food to go, or possibly an evening’s entertainment. For some this is a
quick cup of coffee and out the door. For others it is the chance to sit and unwind while
enjoying a good sandwich or a tasty bowl of soup. The second level is where this core benefit
is turned into the product itself. Here the café must address the quality level, any branding,
and any packaging issues. Finally, the café is concerned with the augmented product. For
some the music augments the food, for others the social nature of the café expands the
experience.
(p. 219; Moderate; LO1)
167. The Coffee Company offers consumer products bought by final consumers for personal
consumption. These products are classified based upon the ways consumers buy them and
how they are marketed. How might the Coffee Company’s products be thus classified?
Consumer products are classified as one of the following: convenience products, shopping
products, specialty products, or unsought products. Three of these apply to the offerings of
the Coffee Company. For many of their customers the café offers a place where they can
quickly pick up a quality pastry and a tasty cup of coffee to go in the early morning on their
way to work. For others the Coffee Company is a place to shop for baked goods, coffees, and
teas. Finally, with the newly added gourmet items, the Coffee Company can offer the
opportunity for specialty products shopping.
(p. 220; Moderate; LO1)
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168. The Coffee Company faces important decisions in the development and marketing of their
products and services. These decisions can be grouped into five broad categories: attributes,
branding, packaging, labeling, and product support services. Discuss this process.
Several of these are particularly important in the marketing of the Coffee Company. First are
the attributes of product quality, product style and design as they relate to the food and other
products being offered. Next, is the branding of the coffees, teas, and the new gourmet
products. The Coffee Company packages its food as it is plated, and seeks products for resale
that are attractively packaged and labeled. Finally, the product knowledge, and courtesy of
the wait staff of the Coffee Company greatly enhance the customer’s service experience.
(p. 223; Challenging; LO2)
169. A company must consider four special service characteristics when designing marketing
programs: intangibility, inseparability, variability, and perishability. How do these four apply
to the Coffee Company?
The Coffee Company offers tangible products for sale with its food, beverages, teas, coffees,
and gourmet items. However, there is also a significant service component also included with
their product. For one, the quality of preparation and delivery is totally inseparable from the
cook/baker and the wait staff. One of the difficulties faced by the café is in attempting to
standardize the product as best they can, but there will always be variability with food and
service. Finally, most of the food products that are offered by the café are subject to
perishability.
(p. 239; Challenging; LO4)
170. Explain the relevance of the service-profit chain, as it would apply to the Coffee Company.
In a service business, the customer and front-line service employee interact to create the
service. Effective interaction depends on the skills of the employee. The service-profit chain
links firm profits with employee and customer satisfaction. There are five links. Internal
service quality, shown through superior hiring and training, leads to satisfied employees and
customers. This results in greater service value through efficient and high quality service. As
a result you get satisfied and loyal customers who buy from you again and again, and tell
others to do so as well. The end result is higher sales and higher profits.
(p. 240; Challenging; LO4)
Continuing Small Business Case #8: Michael’s Motor Cars
Michael Rowan owns Michael’s Motor Cars in Lancaster, Pennsylvania. Michael’s motorcar
business is rather unique. The company is involved in selling used cars, but in a very original and
new way. Over the years Michael has developed a new type of customer service. No longer must
the buyer go from car lot to car lot searching for their “dream car.” Michael’s Motor Cars serves
as your personal car shopper. Michael offers nothing less than the highest quality automobiles
that he has hand chosen and made flawless through the restoration and detailing performed on
each vehicle prior to delivery. Michael closely guards his very high reputation and this allows
him to maintain a network of referral clients. Michael has recently moved to a new location that
now provides him with more office, showroom, and working space. An added bonus is that there
is now sufficient space to pursue an idea Michael has for a new service that he can offer to his
existing and future customers. Michael will soon begin to offer winter storage for valuable
automobiles. Over the years many of Michael’s existing customers have developed valuable
collections of very expensive automobiles that they do not chose to drive in winter’s inclement
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weather. Michael will now offer them a secure place to store their automobiles over the winter
months. As spring arrives, Michael will then prepare these automobiles for their owners to drive
them.
171. Product planners need to think about products and services on three levels. Each level adds
more customer value. How might this relate to Michael’s Motor Cars as he seeks to expand
his product offerings?
The first of the three levels is the core benefit, which addresses the question, “What is the
buyer really buying?’ With Michael’s Motor Cars the customer is first buying their dream
automobile, with limited hassle, at a great price. As Michael offers automobile storage, those
who avail themselves of this new service will once again be acquiring piece of mind in the
knowledge that their special automobile is in good hands. The second level is where this core
benefit is turned into the product itself. At this point Michael must address the quality level of
his storage including issues of temperature, humidity, insurance, etc. Finally, Michael should
be concerned with the augmented product. His existing car-shopping customers have already
experienced his automobile prepping service. It is through this augmentation of basic storage
that Michael will expand the experience for his clients.
(p. 219; Moderate; LO1)
172. Michael’s Motor Cars offers a consumer products bought by final consumers for personal
consumption. Such products are classified based upon the ways consumers buy them and how
they are marketed. How might Michael’s Motor Cars products be thus classified?
Consumer products are classified as one of the following: convenience products, shopping
products, specialty products, or unsought products. Michael’s Motor Cars products fall under
two of these four classifications. His main business is shopping for his clients. However, with
Michael, the client comes to him and describes the exact automobile they want. They shop
while seated at his desk, and do so in the abstract. With many of the requested vehicles,
however, they are truly specialty products. Often the client is looking for something that is
very special. The new product, on the other hand, of secure automobile storage is a specialty
product.
(p. 220; Moderate; LO1)
173. Michael’s Motor Cars faces important decisions in the development and marketing of their
products and services. These decisions can be grouped into five broad categories: attributes,
branding, packaging, labeling and product support services. Discuss this process.
Several of these are particularly important in the marketing of Michael’s Motor Cars. First are
the attributes of product quality, and product style and design as they relate to the
automobiles found by Michael. Also, the product knowledge, and the courtesy Michael
shows greatly enhances the customer’s service experience
(p. 223; Challenging; LO2)
174. A company must consider four special service characteristics when designing marketing
programs: intangibility, inseparability, variability, and perishability. How do these four apply
to Michael’s Motor Cars?
Michael’s Motor Cars offers tangible products for sale. But, there is also a significant service
component included with this product. The skill that Michael has in seeking out and finding
the exact automobile that will be his client’s dream car is both intangible and inseparable
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from Michael. The new storage service is also intangible, but this service is also perishable. It
is a seasonal service that left unused is gone.
(p. 239; Challenging; LO4)
175. Explain the relevance of the service-profit chain, as it would apply to Michael’s Motor Cars.
In a service business, the customer and front-line service employee interact to create the
service. Effective interaction depends on the skills of the employee. The service-profit chain
links firm profits with employee and customer satisfaction. There are five links. Internal
service quality, shown through superior hiring and training, leads to satisfied employees and
customers. This results in greater service value through efficient and high quality service. As
a result you get satisfied and loyal customers who buy from you again and again, and tell
others to do so as well. The end result is higher sales and higher profits.
(p. 240; Challenging; LO4)
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