Principles of Marketing, 16e (Kotler)

Chapter 8 Products, Services, and Brands: Building Customer Value

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chapter-8

1) Which of the following is true with regard to products?

1. A) The quality of products is far more difficult to measure than that of
services.
2. B) Products do not include experiences, organizations, persons, places, and
ideas.
3. C) Products are not meant for sale in the market.
4. D) Products include services, events, persons, places, organizations, ideas, or
a mixture of these.
5. E) Products refer to only those activities that are essentially intangible.
Answer: D
2) ________ are 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.
1. A) Liabilities
2. B) Services
3. C) Brands
4. D) Consumer products
5. E) Specialty products
Answer: B
3) Which of the following exemplifies a service?
1. A) candy
2. B) laptop
3. C) retail
4. D) car
5. E) laundry detergent
Answer: C
4) Marketing mix planning begins with ________.
1. A) building an offering that brings value to target customers
2. B) finding a suitable promotion strategy for the product
3. C) setting a reasonable price for the product
4. D) selecting the right channel for distribution of the product
5. E) calculating the total costs involved in manufacturing the product
Answer: A
5) Which of the following is true with regard to services?
1. A) Services refer to purely tangible products.
2. B) Services are a form of product that consists of activities, benefits, or
satisfactions offered for sale.
3. C) Services can be stored for later use.
4. D) Services can be easily separated from their providers.
5. E) Services are tangible product offerings whose quality can be easily
measured.
Answer: B
6) Which of the following is an example of a pure tangible good?
1. A) a laptop with a comprehensive warranty for three years
2. B) an online shoe retailer that provides free home delivery
3. C) an agency that offers free legal advice
4. D) a credit card
5. E) a bag of potato chips
Answer: E
7) Which of the following product offerings is intangible?
1. A) a package of laundry detergent
2. B) an ink cartridge for a printer
3. C) a wool jacket
4. D) a gold ring
5. E) a taxi ride
Answer: E
8) Product planners need to consider 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?"
1. A) an actual product
2. B) an augmented product
3. C) core customer value
4. D) co-branding
5. E) exchange value
Answer: C

9) Product planners need to consider products and services on three levels. At the
second level, product planners must ________.
1. A) offer additional product support and after-sale services
2. B) identify the core customer value that consumers seek from the product
3. C) turn the core benefit into an actual product
4. D) find out how they can create the most satisfying brand experience
5. E) define the problem-solving benefits or services that consumers seek
Answer: C
10) Product planners need to consider products and services on three levels. At
the third level, product planners must build ________.
 1. A) an actual product
2. B) an augmented product
3. C) core customer value
4. D) a brand personality
5. E) a basic product
Answer: B
11) ________ are industrial products.
1. A) Major appliances
2. B) Laundry detergents
3. C) Life insurance policies
4. D) Office supplies
5. E) Legal services
Answer: D
12) Consumer products refer to ________.
1. A) products purchased by consumers for further processing or for use in
conducting a business
2. B) products and services bought by final consumers for personal
consumption
3. C) primarily intangible offerings from marketers
4. D) raw materials as well as manufactured materials and parts
5. E) products that aid in the consumer's production or operations, including
installations and accessory equipment
Answer: B

13) ________ are consumer products and services that customers usually buy
frequently, immediately, and with minimal comparison and buying effort.
1. A) Unsought products
 2. B) Capital items
3. C) Shopping products
4. D) Convenience products
5. E) Supplies and repair services
Answer: D

14) Which of the following is an example of a convenience product?

1. A) fast food
2. B) diamond ring
3. C) furniture
4. D) life insurance
5. E) refrigerator
Answer: A

15) ________ are less frequently purchased consumer products and services that
customers compare carefully on suitability, quality, price, and style.
1. A) Shopping products
2. B) Convenience products
3. C) Unsought products
4. D) Capital items
5. E) Supplies and repair services
Answer: A

16) Erica wants to replace her old washing machine with a new one. In order to get
the maximum value for her money, she plans to spend substantial time and effort
in gathering information and making product comparisons before making the
actual purchase. In this instance, Erica is planning to buy a(n) ________ product.
1. A) convenience
 2. B) unsought
3. C) specialty
4. D) shopping
5. E) exclusive
Answer: D
17) ________ 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.
1. A) Shopping products
2. B) Unsought products
3. C) Specialty products
4. D) Capital items
5. E) Convenience products
Answer: C
18) A hickory rocking chair, handmade by an Amish woodcarver in Lancaster,
Pennsylvania from locally grown wood, is an example of a ________.
1. A) convenience product
2. B) capital item
3. C) specialty product
4. D) service
5. E) product attribute
Answer: C
19) ________ are consumer products that the consumer either does not know
about or knows about but does not normally think about buying.
1. A) Specialty products
2. B) Convenience products
3. C) Unsought products
4. D) Shopping products
 5. E) Capital items
Answer: C

20) ________ products are those products purchased for further processing or for
use in conducting a business.
1. A) Unsought
2. B) Specialty
3. C) Shopping
4. D) Industrial
5. E) Convenience
Answer: D

21) ________ are the major marketing factors in the sale of most manufactured
materials and parts.
1. A) Branding and advertising
2. B) Price and service
3. C) Sales promotion and advertising
4. D) Branding and packaging
5. E) Public relations and brand management
Answer: B

22) ________ are industrial products that aid in the buyer's production or
operations, including installations and accessory equipment.
1. A) Unsought products
2. B) Convenience products
3. C) Capital items
4. D) Specialty items
 5. E) Repair items
Answer: C

23) Installations consist of ________.

1. A) highly priced luxury goods such as Rolex watches
2. B) portable office equipment such as computers
3. C) major purchases such as elevators
4. D) portable factory equipment such as hand tools
5. E) products such as insurance
Answer: C

24) Lubricants, coal, paper, and pencils are examples of ________.

1. A) operating supplies
2. B) capital items
3. C) raw materials
4. D) specialty products
5. E) installations
Answer: A

25) ________ marketing consists of activities undertaken to create, maintain, or

change the attitudes and behaviors of target consumers toward an organization.
1. A) Social network
2. B) Organization
3. C) Niche
4. D) Location
5. E) Concentrated
Answer: B
26) The advertising slogan, "We bring good things to life," used by General Electric
to market itself, is an example of ________ marketing.
1. A) person
2. B) corporate image
3. C) internal
4. D) place
5. E) niche
Answer: B
27) ________ marketing consists of activities undertaken to create, maintain, or
change attitudes toward particular people. People ranging from presidents,
entertainers, and sports figures to professionals such as doctors, lawyers, and
architects use it to build their reputations.
1. A) Corporate image
2. B) Person
3. C) Social
4. D) Organization
5. E) Place
Answer: B

28) A company that uses well-known celebrities to help sell its products is using
________ marketing.
1. A) interactive
2. B) internal
3. C) social
4. D) person
5. E) organization
Answer: D
29) ________ marketing involves activities undertaken to create, maintain, or
change attitudes toward particular cities, states, or regions.
1. A) Idea
2. B) Place
3. C) Organization
4. D) Social
5. E) Interactive
Answer: B
30) Tourism Australia's global marketing campaign, "There's nothing like Australia"
is an example of ________ marketing.
1. A) corporate image
2. B) person
3. C) organization
4. D) internal
5. E) place
Answer: E

31) Advertising campaigns involving issues ranging from health care, education,
and environmental sustainability to human rights and personal safety can be
classified under ________ marketing.
1. A) corporate image
2. B) internal
3. C) social
4. D) place
5. E) person
Answer: C
32) Elmo Inc., a Michigan-based manufacturer of athletic shoes, uses professional
athletes in its ad campaigns to help sell its products. This is an example of
________ marketing.
1. A) person
2. B) place
3. C) social
4. D) organization
5. E) internal
Answer: A
33) Public health campaigns designed to reduce alcoholism, drug abuse, smoking,
and obesity are all examples of ________ marketing.
1. A) internal
2. B) social
3. C) organization
4. D) person
5. E) place
Answer: B

34) Rhodia invites tourists from all over the world to experience its pristine
nature, clear skies, and beautiful summertime climate. This exemplifies ________.
1. A) corporate image marketing
2. B) social marketing
3. C) place marketing
4. D) social engineering
5. E) negative brand equity
Answer: C
Refer to the scenario below to answer the following question(s).
Ruben Delgado 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 contract
with Elmore ended.
Ruben built a company reputation on the manufacturing 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. Ruben Delgado established a brand name, known
merely as Delgado, and decided to expand on it.
Ruben extended his writing utensil lines to include quills, felt-tip pens, and
multiple-cartridge pens that write in different colors. He even added a line of
various grades of personalized stationery and business cards. Perhaps Ruben's
biggest added touch, however, was the addition of two salespeople who would
work to explain the diverse array of products offered by Delgado, as well as
nurture existing accounts.
"We make an excellent product," Ruben Delgado stated, "and we honor a good
guarantee on everything we sell. But let's face it—we face hundreds of
competitors! We need Delgado representatives out there to help prospects
understand what they should demand in something as simple as a writing tool."
The Delgado brand was fast-becoming synonymous with top-notch customer
service. Part of the purchase package brought personal visits from the Delgado
representative, before the purchase and long after.
35) An easier, more comfortable, more stylish transfer of thought onto paper
refers to the ________ of Ruben's offerings.
1. A) tangible element
2. B) core customer value
3. C) actual product
4. D) augmented product
5. E) service variability
Answer: B
36) Which type of product does Delgado manufacture?
 1. A) industrial
2. B) convenience
3. C) specialty
4. D) shopping
5. E) unsought
Answer: C
49) Developing a product or service involves defining the benefits that it will offer.
These benefits are communicated and delivered by ________.
1. A) product labels
2. B) product attributes
3. C) support services
4. D) product packaging
5. E) branding
Answer: B

50) ________ refers to the characteristics of a product or service that bear on its
ability to satisfy stated or implied customer needs.
1. A) Brand equity
2. B) Product quality
3. C) Product labeling
4. D) Brand image
5. E) Brand personality
Answer: B
51) ________ is an approach in which all the company's people are involved in
constantly improving the quality of products, services, and business processes.
 1. A) Business intelligence
2. B) Quality function deployment
3. C) Total quality management
4. D) Brand equity management
5. E) Product positioning
Answer: C
52) What are the two dimensions of product quality?
1. A) consistency and level
2. B) performance and conformance
3. C) design and innovation
4. D) conformance and style
5. E) feature and design
Answer: A

53) ________ refers to freedom from defects and consistency in delivering a

targeted level of performance.
1. A) Performance quality
2. B) Product style
3. C) Branding
4. D) Conformance quality
5. E) Product design
Answer: D
54) Style simply describes the ________ of a product.
1. A) quality
2. B) appearance
 3. C) utility
4. D) durability
5. E) long-term benefits
Answer: B
55) ________ contributes to a product's usefulness as well as to its looks.
1. A) Sensational style
2. B) Good design
3. C) Quality
4. D) Consistency
5. E) Packaging
Answer: B
56) A good design begins with ________.
1. A) brainstorming new product ideas
2. B) making prototypes of the planned product
3. C) identifying the most suitable and aesthetic packaging
4. D) brainstorming technical product specifications
5. E) observing and understanding customers and shaping their product-use
experience
Answer: E
57) Which of the following questions is most important for product designers to
consider while developing a product?
1. A) Which specific features of the product do customers like most?
2. B) How does the product appear to buyers?
3. C) What are the product's technical specifications?
4. D) How would customers use and benefit from the product?
5. E) How can the product be packaged to stimulate instant purchase?
Answer: D
58) A ________ is a name, term, sign, symbol, design, or a combination of these,
that identifies the maker or seller of a product or service.
1. A) feature
2. B) brand
3. C) line extension
4. D) package
5. E) value chain
Answer: B
59) ________ involves designing and producing the container or wrapper for a
product.
1. A) Packaging
2. B) Patenting
3. C) Servicing
4. D) Co-branding
5. E) Labeling
Answer: A
60) A product's ________ identifies the product or brand, describes several things
about the product, and promotes the brand.
1. A) line extension
2. B) portfolio
3. C) label
4. D) design
5. E) feature
Answer: C
61) The ________ requires sellers to provide detailed nutritional information on
food products.
1. A) Fair Packaging and Labeling Act of 1966
2. B) Nutritional Labeling and Educational Act of 1990
 3. C) Glass-Steagall Act
4. D) Commodity Futures Modernization Act of 2000
5. E) Federal Trade Commission Act of 1914
Answer: B
62) The first step in designing support services is to ________.
1. A) add new services that will both delight customers and yield profits to the
company
2. B) closely observe the product and pricing strategies of consumers
3. C) survey customers to assess the value of current services and obtain ideas
for new ones
4. D) prevent brand dilution
5. E) encourage customers to try new products
Answer: C

63) 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.
1. A) product line
2. B) line extension
3. C) private brand
4. D) multibrand
5. E) new brand
Answer: A
64) The major product line decision involves product ________, the number of
items in the product line.
1. A) features
2. B) line depth
3. C) line conformance
 4. D) line length
5. E) packaging
Answer: D

65) ________ involves adding more items within the present range of the product
line.
1. A) Market diversification
2. B) Brand extension
3. C) Product line filling
4. D) Upward product line stretching
5. E) Downward product line stretching
Answer: C
66) Titan Inc., an automobile manufacturer based in Utah, recently added two new
models to its existing line of sedans in order to increase profits and satisfy dealers.
This is an example of ________.
1. A) line filling
2. B) social marketing
3. C) market diversification
4. D) negative brand equity
5. E) person marketing
Answer: A
67) ________ occurs when a company lengthens its product line beyond its
current range.
1. A) Product line filling
2. B) Product line stretching
3. C) Co-branding
4. D) Niche marketing
5. E) Market diversification
Answer: B
68) Proton Corp. is an automobile manufacturer known for producing efficient,
durable, and low-priced cars. Recently, the company launched a new range of
luxury cars to broaden its market appeal and to add prestige to its existing line of
cars. This is an example of ________.
1. A) social marketing
2. B) product line filling
3. C) product line stretching
4. D) internal marketing
5. E) cannibalization
Answer: C
69) A ________ consists of all the product lines and items that a particular seller
offers for sale.
1. A) product mix
2. B) store brand
3. C) supply chain
4. D) value chain
5. E) line extension
Answer: A
70) Product mix ________ refers to the number of different product lines the
company carries.
1. A) length
2. B) height
3. C) width
4. D) consistency
5. E) depth
Answer: C
71) Product mix ________ refers to the total number of items a company carries
within its product lines.
1. A) length
2. B) depth
3. C) height
4. D) width
5. E) consistency
Answer: A

72) Product mix ________ refers to the number of versions offered for each
product in the line.
1. A) length
2. B) depth
3. C) height
4. D) width
5. E) consistency
Answer: B
73) The ________ of the product mix refers to how closely related the various
product lines are in end use, production requirements, distribution channels, or
some other way.
1. A) length
2. B) depth
3. C) consistency
4. D) width
5. E) height
Answer: C
74) A well-known cosmetic company in New York City added new product lines in
order to increase its business. In other words, it ________.
 1. A) lengthened its existing product line
2. B) decreased its product line consistency
3. C) widened its product mix
4. D) engaged in market diversification
5. E) engaged in social marketing
Answer: C

Refer to the scenario below to answer the following question(s).

Ruben Delgado 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 contract
with Elmore ended.
Ruben built a company reputation on the manufacturing 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. Ruben Delgado established a brand name, known
merely as Delgado, and decided to expand on it.
Ruben extended his writing utensil lines to include quills, felt-tip pens, and
multiple-cartridge pens that write in different colors. He even added a line of
various grades of personalized stationery and business cards. Perhaps Ruben's
biggest added touch, however, was the addition of two salespeople who would
work to explain the diverse array of products offered by Delgado, as well as
nurture existing accounts.
"We make an excellent product," Ruben Delgado stated, "and we honor a good
guarantee on everything we sell. But let's face it—we face hundreds of
competitors! We need Delgado representatives out there to help prospects
understand what they should demand in something as simple as a writing tool."
The Delgado brand was fast-becoming synonymous with top-notch customer
service. Part of the purchase package brought personal visits from the Delgado
representative, before the purchase and long after.
75) The new felt-tip pens, multiple-cartridge pens, and quills offered by Ruben
Delgado are examples of ________.
1. A) product line filling
2. B) multibranding
3. C) megabranding
4. D) product line inconsistencies
5. E) co-branding
Answer: A
93) Service ________ means that services cannot be seen, tasted, felt, heard, or
smelled before they are bought.
1. A) inseparability
2. B) variability
3. C) intangibility
4. D) perishability
5. E) heterogeneity
Answer: C
94) Which of the following actions is a restaurant owner most likely to take in
order to reduce problems associated with service intangibility?
1. A) increase entree prices after 6:00 p.m.
2. B) provide clean tablecloths and fresh napkins for each new customer
3. C) empower employees to handle customer complaints
4. D) offer discounted prices for appetizers ordered during happy hour
5. E) hold regular employee workshops focusing on customer service
Answer: B
95) Tristan and Juliet, a newly married couple who intend to go to Egypt for their
honeymoon, bought a Europe travel package on Jizo Inc., an online travel site. As
they have never seen Europe or used the services of Jizo before, they were largely
dependent on other customers' feedback and signals for service quality. Which of
the following characteristics of service is highlighted in this instance?
1. A) service intangibility
2. B) service inseparability
3. C) service variability
4. D) service perishability
5. E) service distinction
Answer: A

96) Service ________ means that the quality of services depends on who provides
them as well as when, where, and how they are provided.
1. A) intangibility
2. B) inseparability
3. C) variability
4. D) perishability
5. E) heterogeneity
Answer: C
97) The customers of Parry's Hair Salon have noticed that the quality of a haircut
depends on who provides it as well as when, where, and how the service is
provided. Which of the following characteristics of service is evident in this
instance?
1. A) service intangibility
2. B) service inseparability
3. C) service perishability
4. D) service variability
5. E) service distinction
Answer: D
98) Service ________ means that services cannot be stored for later sale or use.
 1. A) consistency
2. B) perishability
3. C) variability
4. D) intangibility
5. E) inseparability
Answer: B

99) Alex Smith rents storage space to college students who go home for the
summer but do not want to haul all of their property home and back. The business
is profitable during the summer months, but when the storage space is unoccupied
in the off-season, Alex loses money. Which of the following characteristics of
service is most likely the source of Alex's problem?
1. A) intangibility
2. B) perishability
3. C) inconsistency
4. D) variability
5. E) inseparability
Answer: B

100) According to the service profit chain, superior internal service quality results
in ________.
1. A) lesser service value
2. B) increased word-of-mouth sales
3. C) reduced after-sale services
4. D) more satisfied, loyal, and hardworking employees
5. E) negative brand equity of newly launched products
Answer: D
101) Through ________, a service firm orients and motivates its customer-contact
employees and supporting service people to work as a team to provide customer
satisfaction.
1. A) service inseparability
2. B) social marketing
3. C) service variability
4. D) internal marketing
5. E) corporate image marketing
Answer: D

102) ________ means that service quality depends on the quality of buyer-seller
interaction during the service encounter.
1. A) Interactive marketing
2. B) Service differentiation
3. C) Service productivity
4. D) Corporate image marketing
5. E) Traditional external marketing
Answer: A
103) Service companies can differentiate their service delivery by ________.
1. A) using symbols and logos
2. B) instituting a hierarchical organizational structure
3. C) offering innovative product features
4. D) de-emphasizing branding
5. E) having more able and reliable customer-contact people
Answer: E
104) Apollo Couriers, a company providing international express mail services, has
a proactive customer communications team. The primary job of this team is to
identify situations that led to customer dissatisfaction, and then provide quick
remedies to fix the problems. To a great extent, this has helped Apollo in winning
customer loyalty. In this instance, Apollo has benefitted from ________.
1. A) product differentiation
2. B) good service recovery
3. C) multibranding
4. D) place marketing
5. E) co-branding
Answer: B
116) ________ represent(s) consumers' perceptions and feelings about a product
and its performance.
1. A) Product lines
2. B) Labeling
3. C) Brands
4. D) Design
5. E) Product attributes
Answer: C
117) Brand ________ is the differential effect that knowing the brand name has on
customer response to the product and its marketing.
1. A) differentiation
2. B) knowledge
3. C) equity
4. D) personality
5. E) relevance
Answer: C
118) BlueFin canned tuna has higher sales than its unbranded rival, even though
the unbranded tuna costs $0.45 less per can than BlueFin tuna. BlueFin most likely
has ________.
1. A) an aggressive brand personality
 2. B) high brand equity
3. C) no brand commitment
4. D) negative brand equity
5. E) low brand relevance
Answer: B

119) Which of the following is one of the four consumer perception dimensions
used by ad agency Young & Rubicam to measure brand strength?
1. A) brand conformance
2. B) brand consistency
3. C) brand convenience
4. D) brand extension
5. E) brand relevance
Answer: E
120) Brand ________ refers to how consumers feel if a brand meets their needs.
1. A) differentiation
2. B) equity
3. C) dilution
4. D) esteem
5. E) relevance
Answer: E
121) Brand ________ refers to how highly consumers regard and respect the
brand.
1. A) esteem
2. B) conformance
3. C) differentiation
 4. D) relevance
5. E) knowledge
Answer: A

122) After a brief stay at a luxury hotel in Paris, Benjamin Sanders noted that the
hotel had kept every promise it made when he booked the room, meeting all his
needs. He added that it was a "thoroughly comfortable and opulent experience."
According to Young & Rubicam's Brand Asset Valuator, this reflects brand
________.
1. A) valuation
2. B) esteem
3. C) relevance
4. D) differentiation
5. E) knowledge
Answer: C
123) Which of the following is true with regard to brand equity?
1. A) Brand equity refers to how much consumers know about the brand.
2. B) High brand equity provides a company with many competitive advantages.
3. C) A brand has positive brand equity if consumers react less favorably to it
than to an unbranded version.
4. D) Positive brand equity derives from low brand esteem.
5. E) The total financial value of a brand can be easily measured.
Answer: B
124) The fundamental asset underlying brand equity is ________, the value of
customer relationships that the brand creates.
 1. A) the customer mix
2. B) customer equity
3. C) the product experience
4. D) service variability
5. E) the service encounter
Answer: B
125) Which of the following is the lowest level on which marketers can position
their brands in target customers' minds?
1. A) beliefs and values
2. B) product benefits
3. C) product attributes
4. D) after-sale services
5. E) brand equity
Answer: C
126) The strongest brands are positioned on ________.
1. A) desirable benefit
2. B) good packaging
3. C) service inseparability
4. D) strong beliefs and values
5. E) product attributes
Answer: D
127) Gainville Inc. manufactures Android phones. Each new Gainville phone launch
advances the cause of democratizing technology. Gainville, an expert in fostering
customer community, engages customers at a deep, emotional level, and has been
ranked one of the Breakaway Brands by the brand consultancy Kendell Associates.
Gainville is most likely positioned on ________.
1. A) basic product attributes
2. B) short-term benefits
 3. C) service variability
4. D) self-image enhancement
5. E) strong beliefs and values
Answer: E

128) A good brand name should most likely be ________.

1. A) trendy
2. B) complex
3. C) long
4. D) conventional
5. E) distinctive
Answer: E
129) An increasing number of retailers and wholesalers have created their own
________, also called store brands.
1. A) national brand
2. B) support brand
3. C) private brand
4. D) generic brand
5. E) manufacturer's brand
Answer: B
130) Costco's Kirkland Signature products are an example of a ________.
1. A) national brand
2. B) support brand
3. C) private brand
4. D) generic brand
5. E) manufacturer's brand
Answer: C

131) Which of the following is true with regard to store brands?

1. A) Store brands have been declining in popularity and strength for more than
two decades.
2. B) Store brands are also known as national brands.
3. C) Store brands are created and owned by resellers of a product or service.
4. D) Increasing consumer distrust toward store brands has led to a store-brand
slump.
5. E) Store brands are growing far slower than manufacturer's brands.
Answer: C
132) Some companies obtain the rights to use the names or symbols previously
created by other manufacturers for a fee. This process is known as ________.
1. A) multibranding
2. B) positioning
3. C) segmenting
4. D) co-branding
5. E) licensing
Answer: E
133) ________ occurs when two established brand names of different companies
are used on the same product.
1. A) Market diversification
2. B) Niche marketing
3. C) Co-branding
 4. D) Licensing
5. E) Cannibalization
Answer: C

134) Which of the following is an advantage offered by co-branding?

1. A) Manufacturers do not have to invest in creating their own brand names
with co-branding.
2. B) Co-branding allows retailers to sell exclusive products that cannot be
purchased from competitors.
3. C) Co-branding allows a company to expand its existing brand into a category
it might otherwise have difficulty entering alone.
4. D) Co-branding dilutes brand equity and increases the appeal of store brands.
5. E) Co-branding does not involve complex legal contracts and licenses.
Answer: C
135) ________ occurs when a company introduces additional items in a given
product category under the same brand name, such as new flavors, forms, colors,
ingredients, or package sizes.
1. A) Line extension
2. B) Megabranding
3. C) Interactive marketing
4. D) Internal marketing
5. E) Co-branding
Answer: A
136) ________ involves the use of a successful brand name for new or modified
products in a new category.
1. A) A line extension
2. B) A product line
 3. C) A brand extension
4. D) Co-branding
5. E) Cannibalization
Answer: C
137) Symmonds Inc., a company manufacturing breakfast cereal, has extended its
special Crispo cereal brand into a full line of breakfast cereals plus protein shakes,
fruit and sandwich spreads, butter, and doughnuts. This is an example of
________.
1. A) line extension
2. B) brand extension
3. C) licensing
4. D) co-branding
5. E) cannibalization
Answer: B
138) Which of the following is a potential drawback of multibranding?
1. A) Multibranding tends to decrease brand loyalty.
2. B) Company resources are likely to be concentrated on a single brand.
3. C) Multibranding curbs the growth opportunities of established brands.
4. D) Each brand might obtain only a small market share, and none may be very
profitable.
5. E) Multibranding causes companies to refrain from product diversification.
Answer: D
139) Which of the following strategies involves weeding out weaker brands and
focusing marketing dollars only on brands that can achieve the number one or
number two market share positions with good growth prospects in their
categories?
1. A) megabrand strategies
2. B) niche marketing strategies
 3. C) social marketing strategies
4. D) co-branding
5. E) licensing
Answer: A
140) While advertising campaigns can help create name recognition, brand
knowledge, and perhaps even some brand preference, brands are not maintained
by advertising but by ________.
1. A) brand differentiation
2. B) line extensions
3. C) brand experiences
4. D) brand sponsorships
5. E) brand awareness
Answer: C