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Chapter 6 - Products: Goods and Services
TRUE/FALSE
1. A “product” is the general term used to describe both goods and services.
ANS: T DIF: Easy REF: Page 67

NAT: BUSPROG Reflective Thinking LOC: DISC: Product
TOP: What do we mean by Product? KEY: Bloom's: Knowledge
MSC: MBA: Knowledge of General Business Functions
2. All marketing managers have the same goal: to understand and please their customers.
ANS: T DIF: Moderate REF: Page 67

TOP: What do we mean by Product? KEY: Bloom's: Comprehension
3. We learn of and discuss product, price, place, and promotion separately because there are
many details to consider for each element.

NAT: BUSPROG Analytic LOC: DISC: Marketing Plan
4. The execution of the 4Ps is flexible—only one piece needs to be in place and sending a
consistent message for the overall product to be attractive to the customer.
ANS: F DIF: Challenging REF: Page 67

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5. When drivers purchase cars that are highly rated for their safety, the essential product is
safety and the modifier is the actual car.

NAT: BUSPROG Analytic LOC: DISC: Product
TOP: What do we mean by Product? KEY: Bloom's: Application
MSC: MBA: Managing Strategy & Innovation
6. The word product can only be defined as a general term that includes services and goods.

7. The word product can be defined as a mathematical term for multiplication.

8. Marketing is an exchange: the company offers something (e.g., a flight), and the customer
offers something in return (e.g., a payment).

NAT: BUSPROG Communication LOC: DISC: Strategy
TOP: The Product in the Marketing Exchange
KEY: Bloom's: Comprehension
MSC: MBA: Knowledge of human behavior & society
9. Some customers will seek value and low prices, while others seek top quality.
ANS: T DIF: Challenging REF: Page 67

10. Ideally, a company will have a clear differentiation strategy, because commodity products
cannot be sustained as a competitive advantage.

11. Marketers have long realized the benefits of morphing long-term purchase-transaction
exchanges into short-term relationship marketing.
ANS: F DIF: Easy REF: Page 68

KEY: Bloom's: Knowledge MSC: MBA: Managing Strategy & Innovation
12. Some marketers think there is a big difference between marketing for goods and services,
and other marketers think that it’s the same whether you’re marketing sandwiches or hotels.

TOP: How are Goods Different from Services?
KEY: Bloom's: Knowledge MSC: MBA: Foundational Skills
13. Goods and services are totally distinct from each other.
ANS: F DIF: Moderate REF: Page 68

TOP: Intangibility KEY: Bloom's: Comprehension
14. An example of “experience marketing” is a professional sporting event.

NAT: BUSPROG Reflective Thinking LOC: DISC: Marketing Plan
TOP: Intangibility KEY: Bloom's: Application
15. Search qualities are the attributes that are evaluated before purchase, while the customer
learns about competitive offerings.

TOP: Search, Experience, Credence KEY: Bloom's: Knowledge
16. Experience attributes are those that are difficult to judge even post-consumption.

NAT: BUSPROG Analytic LOC: DISC: Research
17. An example of a credence quality is when you buy a new cologne. Did it really impress that
girl? You have to just trust that it did, as it is difficult to judge.
NAT: BUSPROG Analytic LOC: DISC: Research
TOP: Search, Experience, Credence KEY: Bloom's: Application
18. Experience attributes are those that require some trial or consumption before evaluation.

19. Credence qualities are those that are difficult to judge, even post-consumption.

NAT: BUSPROG Analytic LOC: DISC: Strategy
TOP: Search, Experience, Credence KEY: Bloom's: Comprehension
20. Goods are dominated by credence and experience qualities, and services are mostly
comprised of experience and search qualities.

NAT: BUSPROG Reflective Thinking LOC: DISC: Strategy
MSC: MBA: Foundational Skills
21. In a service-oriented business such as a bowling alley, services are simultaneously produced
and consumed.

TOP: Perishability KEY: Bloom's: Knowledge
MSC: MBA: Operations Skills
22. The inseparability of service production and consumption inevitably results in less
perishable services.

TOP: Perishability KEY: Bloom's: Comprehension
MSC: MBA: Managing the Task Environment
23. The interaction between the crowd and the actors during a Broadway show is due to the
inseparability between service provider and customer.

TOP: Perishability KEY: Bloom's: Application
24. Services are said to be less variable than products.
ANS: F DIF: Easy REF: Page 70

TOP: Variability KEY: Bloom's: Knowledge
25. The service marketing exchange happens between a customer and a service provider
representing the company.

NAT: BUSPROG Communication LOC: DISC: Customer
TOP: Variability KEY: Bloom's: Synthesis
26. Good variability involves the customization and tailoring of the service delivery for the
customer’s unique needs.

NAT: BUSPROG Analytic LOC: DISC: Customer
TOP: Variability KEY: Bloom's: Comprehension
27. Professional services, purchase experiences, and online shopping are some purchases that
might be further along the intangibility dimensions than goods or services.

TOP: To Infinity and Beyond Goods and Services
KEY: Bloom's: Evaluation MSC: MBA: Strategic & System Skills
28. Companies can be myopic when they define their core business, focusing on their
product offerings instead of recognizing that their true goal is offering benefits and value to
their customers.

TOP: What is the Firm's Core Market Offering?
KEY: Bloom's: Knowledge MSC: MBA: Strategic & System Skills
29. The central element of what is purchased is called the “core,” and anything bought on top of
that is called the “value-addeds.”

KEY: Bloom's: Knowledge
30. A hotel’s core elements are fluffy bed, easy check-in, and Wi-fi.

KEY: Bloom's: Knowledge MSC: MBA: Strategic & System Skills
31. As Chief Marketing Officer (CMO), Frank has seen the core competencies of his company
change over the past five years. During this time the core business of the company should
not have shifted as the firm’s competencies changed.

TOP: Dynamic Strategies KEY: Bloom's: Application
MSC: MBA: Strategic & System Skills
32. For sports, the core service is the game itself, and the value-addeds are the experience the
consumer has.

TOP: Dynamic Strategies KEY: Bloom's: Comprehension
33. The definition of a company’s core business is like asking for its mission statement.

TOP: Dynamic Strategies KEY: Bloom's: Knowledge
34. It’s important that brand managers focus on defining competition narrowly, as when we
compute market shares.

NAT: BUSPROG Reflective Thinking LOC: DISC: Customer
TOP: Dynamic Strategies KEY: Bloom's: Comprehension
35. Product lines can be trimmed or supplemented depending on market opportunities, however
the overall marketing mix should not be altered as this will confuse loyal customers.

TOP: Product Lines: Breadth and Depth KEY: Bloom's: Knowledge
36. Product-related issues are more complicated when our scope includes the company’s full
portfolio.

37. Supervising product line managers’ responsibilities are to focus, and brand manager’s
responsibilities are to oversee entire portfolios.

38. If a company recognizes an opportunity for producing something that customers will value,
they should supplement their product line, especially if they can make the new products
better than competitors.

39. A brand is an investment.

40. Company A offers a line of products to a single segment. Company B offers multiple
products to multiple segments. Company B will most likely outperform company A.

TOP: Product Lines: Breadth and Depth KEY: Bloom's: Application
MULTIPLE CHOICE
1. A __________ is the general term used to describe both goods and services.
a. price
b. product
c. promotion
d. place
ANS: B DIF: Easy REF: Page 67
2. For someone buying a Volvo, the essential product is _____, and the modifier is_____.
a. a car; safety
b. transportation; a car
c. a car; a innovative design
d. a high-end vehicle; transportation
ANS: A DIF: Challenging REF: Page 67
3. Marianne is shopping for a new car. Which of the 4Ps is most central to her purchase?
a. price
b. promotion
c. place
d. product
ANS: D DIF: Challenging REF: Page 67
4. Orbitz offers low-price tickets on flights because ______.

a. they are in competition with airlines
b. it is something that benefits customers
c. they accept a low margin
d. their business model is based on promotions
ANS: B DIF: Challenging REF: Page 67
KEY: Bloom's: Application
5. Which of the following is a question that arises during the marketing exchange?
a. What is it that customers want?
b. Should the product be made in house or outsourced?
c. When should we sell our stock?
d. Should we acquire our competitor?
KEY: Bloom's: Evaluation
6. Marketers have long realized the benefits of morphing ______ purchase-transaction
exchanges into long-term relationship marketing.
a. short-term
b. high quality
c. customer
d. product
ANS: A DIF: Moderate REF: Page 68
MSC: MBA: Managing Decision-Making Processes
7. Marketer 1 is marketing soft pretzels. Marketer 2 is marketing for a local amusement park.
Why might their strategies differ?
a. They don’t, their strategies would be the same.
b. Marketer 1 has a tangible product, white marketer 2 has an intangible product.
c. Marketer 1 would focus more on price than marketer 2.
d. Marketer 2 would focus more on promotion than marketer 1.
TOP: How are Goods Different from Services?
KEY: Bloom's: Application
8. An example of a tangible purchase is _______.

a. consulting advice
b. the symphony
c. financial services
d. clothing
ANS: D DIF: Easy REF: Page 68
TOP: Intangibility KEY: Bloom's: Knowledge
9. Which of the following is an example of “experience marketing”?

a. Starbucks
b. Cirque du Soleil
c. financial services
d. clothing
NAT: BUSPROG Communication LOC: DISC: Marketing Plan
TOP: Intangibility KEY: Bloom's: Application
10. Which of the following are pure goods?

a. rock concerts
b. DVDs
c. sporting events
d. consulting
ANS: B DIF: Moderate REF: Page 68
TOP: Intangibility KEY: Bloom's: Comprehension
11. ______ qualities are those attributes that may be evaluated prior to purchase, as the
customer learns about the competitive offerings.
a. Credence
b. Experience
c. Search
d. Product
ANS: C DIF: Challenging REF: Page 69
TOP: Search, Experience, Credence KEY: Bloom's: Comprehension
12. The color of a pair of socks is an example of a ______ quality.

a. credence
b. experience
c. search
d. product
13. _______ attributes are those that require some trial or consumption before evaluation.
a. Search
b. Product
c. Credence
d. Experience
14. _______ qualities are those that are difficult to judge, even post-consumption.
a. Product
b. Search
c. Experience
d. Credence
15. _______ are dominated by search and experience qualities.

a. Goods
b. Services
c. Purchases
d. Products
16. _______ are mostly comprised of experience and credence qualities.

a. Products
b. Services
c. Purchases
d. Goods
17. Doctor’s services consist mainly of ______ elements.

a. product
b. search
c. experience
d. credence
ANS: D DIF: Challenging REF: Page 69
18. An example of a complex good is a car and an example of a simple service is ______.
a. architect
b. accountant
c. hotel
d. doctor
19. Services are simultaneously produced and consumed. This is different from goods because
goods can be _______.
a. produced and consumed simultaneously
b. perishable
c. inventoried
d. inelastic
ANS: C DIF: Moderate REF: Page 70
TOP: Perishability KEY: Bloom's: Synthesis
20. Services are more ______ than goods.

a. produced and consumed simultaneously
b. perishable
c. inventoried
d. inelastic
TOP: Perishability KEY: Bloom's: Knowledge
21. What has consequences in the interaction between the service provider and the customer?
a. The inseparability of production and consumption
b. The perishability of the item
c. The age of the customer
d. The elasticity of demand
22. The inseparability of production and consumption also impacts the interaction between the
_______ and the ________.
a. service provider; customer
b. service provider; manufacturer
c. variability; customer
d. variability; manufacturer
MSC: MBA: Generative Thinking
23. Services are said to be more ______ than goods.

a. durable
b. tangible
c. inseparable
d. variable
24. Self-service is advancing in many industries wherein a _____ interacts with _____.
a. customer; a customer service rep
b. service provider; the manufacturer
c. customer; technology
d. manufacturer; technology
TOP: Variability KEY: Bloom's: Evaluation
25. Bad variability involves ______.

a. weather patterns
b. errors in the system
c. technology
d. manufacturing tolerances
26. The most successful example of self-service is ______.

a. airport check-in
b. banking
c. the Internet
d. online shopping
ANS: D DIF: Moderate REF: Page 70
27. As Chris arrives at the airport, he decides that instead of waiting in line to check-in he will
use the automated check-in kiosk. He types in the information requested by the kiosk and
his boarding pass is printed within seconds. What does this exemplify the growing trend of?
a. customer service.
b. self-service.
c. customer intimacy.
d. operational excellence.
TOP: Variability KEY: Bloom's: Application
MSC: MBA: Knowledge of Strategy & Innovation
28. With self-service, the ______ of the service encounter is reduced by the standardization of
the equipment.
a. purchaser
b. provider
c. desirability
d. variability
29. What does good variability consists of?

a. Errors in the system, logistics, human resources and marketers want to reduce this
variability.
b. The customization and tailoring of the service delivery for the customer’s unique
needs.
c. A service provider representing the company.
d. Advancing in many industries wherein a customer interacts with technology,
banking, airport check-in, etc.
TOP: Variability KEY: Bloom's: Comprehension
30. It is helpful to think of goods and services as ____.

a. existing along a continuum
b. similar
c. different
d. comprised of both logistics and tangible items
ANS: A DIF: Easy REF: Page 71
TOP: To Infinity and Beyond Goods and Services
31. The central element of what is purchased is called the “core,” and anything bought on top of
that is called what?
a. promotions
b. goods
c. value addeds
d. extras
ANS: C DIF: Easy REF: Page 71
KEY: Bloom's: Knowledge MSC: MBA: Foundational Skills
32. Many hoteliers no longer claim that they merely offer lodging. Instead, they now stake
claims as premier travel providers. This is done to avoid the mistake of defining their core
business _____.
a. too confusingly
b. too abstractly
c. too strategically
d. too technically
KEY: Bloom's: Synthesis
33. What mistake can companies make when they define their core business?
a. being myopic
b. seeing the big picture
c. being too strategic
d. being too technical
34. When can core businesses change?

a. when customers demand it
b. when a firm updates their software
c. when a firm’s competencies change
d. when a firm outsources
ANS: C DIF: Moderate REF: Page 72
35. For an NFL team, what is their core service?

a. a way for people to spend time with their family
b. the TV coverage of the games
c. the experience
d. the ball game
TOP: Dynamic Strategies KEY: Bloom's: Application
36. What is the definition of a company’s core business similar to?

a. goal statement
b. code of conduct
c. the industry
d. mission statement
37. How can product lines vary?

a. breadth and width
b. time
c. space
d. width and time
38. A _____ is comprised of several product lines that can vary in breadth and depth.
a. product mix
b. marketing mix
c. company
d. service
ANS: A DIF: Easy REF: Page 73
TOP: Product Lines: Breadth and Depth KEY: Bloom's: Comprehension
39. Alpha company makes items you typically see in a drug store. If they make toothpaste,
which of the following would be expansion in the depth direction?
a. beauty
b. floss
c. shampoo
d. tanning spray
40. Beta company makes items you typically see in a sports store. If they sell golf balls, which
of the following would be expansion in the breadth direction?
a. first aid
b. golf clubs
c. soccer balls
d. fishing gear
ESSAY
1. Explain what a product is. Give examples.
ANS:
A “product” is the general term used to express both goods (e.g., cereal, clothing, securities)
and services (e.g., restaurants, movies, consulting). Sometimes the term product is also used
as a more general term, referring to the full product profile; that is, the entire market
offering, including not just the product itself but also its price, the image of the brand, etc.
The product is the most central of the 4Ps, the ultimate thing the customer is purchasing.
Examples will vary.
DIF: Easy REF: Page 67 NAT: BUSPROG Reflective Thinking

LOC: DISC: Product TOP: What do we mean by Product?
2. Explain the marketing exchange.
ANS:
The marketing exchange is defined as the company offering something and the customer
offering something in return. Customer and company each seek something of value and each
offers a trade. Both company and customer can make their offer more attractive or less
attractive. The company can make more reliable flight schedules (for an airline) as a way to
be more attractive. An example of the customer making a more attractive offer is he can be
more loyal.
DIF: Moderate REF: Page 67 NAT: BUSPROG Reflective Thinking

LOC: DISC: Product TOP: The Product in the Marketing Exchange
3. What are the questions that arise during the marketing exchange? Make sure to give
examples from each side of the exchange.
ANS:
Customer side
What is that customers want? Some customers seek low prices and some will seek premium
quality. What are specific attributes that the customer seeks? What are the needs and wants
of the customer?
Some examples: Customers seeking a high-end computer that is very reliable might desire a
Mac notebook, while a customer who is more price conscious might be satisfied with a low-
cost desktop
Company side
What is it that the company is well suited to offer to its customers? What will the company’s
value proposition be? It is most desirable if the market provision has a clear point of
differentiation, because commodities cannot sustain as competitively advantageous.
Examples are similar to the customer side. For example, an outdoors sports company might
focus on providing high-end climbing and kayaking gear. Or perhaps their focus is on more
entry level or used items.
DIF: Challenging REF: Page 67 NAT: BUSPROG Reflective Thinking

LOC: DISC: Product TOP: The Product in the Marketing Exchange
KEY: Bloom's: Evaluation
4. How do goods differ from services?
ANS:
Marketers have always talked about goods and services being on a continuum. Some goods
seem to be pure goods (e.g., blue jeans, DVDs), and some services seem to be pure services
(e.g., consulting, rock concerts). Other purchases seem to be a mix of good and service (e.g.,
car rentals). The key seems to be the extent to which the purchase is tangible. Services differ
from goods in other ways. Services are simultaneously produced and consumed. Whereas
goods can be manufactured and then inventoried in distribution warehouses, most services
have to be created on the spot in the presence of the customer. For example, you have to be
present to have your hair cut. This inseparability of production and consumption inevitably
results in more perishable services. The final major difference between goods and services is
that services are said to be more variable.

LOC: DISC: Product TOP: Intangibility
KEY: Bloom's: Synthesis MSC: MBA: Foundational Skills
5. Discuss the concepts related to the goods-to-services continuum.
ANS:
The goods-to-services continuum is related to the concepts of search, experience, and
credence. Search qualities are those attributes that may be evaluated prior to purchase, as the
customer learns about the competitive offerings. Experience attributes are those that require
some trial or consumption before evaluation. Credence qualities are those that are difficult
to judge, even post-consumption, hence the term “credence”—you just have to trust or
believe that the quality is good.

LOC: DISC: Marketing Plan TOP: Search, Experience, Credence
6. Which is more dominated by search and experience qualities, goods or services? Which is
more dominated by experience and credence qualities? What are the marketing implications
due to these differences?
ANS:
Goods are dominated by search and experience qualities, and services are mostly comprised
of experience and credence qualities. There are multiple marketing implications due to these
differences. It is easier to price a good than a service (for example, a pair of socks compared
to consulting advice). Additionally, it is easier for customers to asses a goods purchase
compared to a service purchase. This means marketers need to ensure the client that the
service is of high quality.

LOC: DISC: Marketing Plan TOP: Search, Experience, Credence
7. Explain the perishability of services and give an example.
ANS:
Since services are simultaneously produced and consumed, they are much more perishable
than goods. An example is when an airline leave the ground with vacant seats, it cannot
recoup the money it lost on those empty seats. Another example is a restaurant that has
empty seats. If the restaurant is empty at 5 P.M. and then has a waiting list at 8 P.M., it
cannot recoup the lost potential income at 5 P.M. Another example is a movie that has
empty seats. Once the movie has stared, those empty seats are lost.
DIF: Challenging REF: Page 70 NAT: BUSPROG Analytic

LOC: DISC: Marketing Plan TOP: Perishability
KEY: Bloom's: Application MSC: MBA: Managing Strategy & Innovation
8. Discuss the concept of self-service and how it allows marketers to reduce variability.
Explain good vs. bad variability in service encounters.
ANS:
Self-service is advancing in many industries wherein a customer interacts with technology,
e.g., banking, airport check-in, and prescription renewals. These marketing exchanges occur
between a person and a machine, so the variability of the service encounter is reduced by the
standardization of the equipment. Bad variability involves errors in the system (e.g., poor
customer service), and logistics and human resources and marketers want to reduce this
variability. Good variability involves the customization and tailoring of the service delivery
for the customer’s unique needs. Not surprisingly, it often enhances customer satisfaction.
Automated services are usually introduced to reduce the errorful, bad variability. With time,
and as menus become more sophisticated with more options, it is conceivable that good
variability may also be enhanced (at least for customers who can deal with the technology).

LOC: DISC: Customer TOP: Variability
9. Explain what is meant by core and value-added and give an example of how this applies to a
hotel.
ANS:
Core is the reason the company is in business (what is expected of the business) and value-
added are services on which the company distinguishes itself from other companies.
For a hotel, an example of the core services are bed, safety, cleanliness. The value-addeds
are fluffy bed, spa shower, wi-fi, and easy check-in (among others).

LOC: DISC: Customer TOP: Variability
10. Which product line strategy is least efficient?
ANS:
Offering different products to different customers is the least efficient method of expanding
a product line. This method does not leverage the company’s knowledge of its customers or
its products. Offering a single segment multiple products is a better strategy. An example of
an efficient product strategy is when an appliance company makes dishwashers for low,
medium, and high-end customers. An inefficient strategy is for a high-end appliances
company to offer toothpaste.

LOC: DISC: Customer TOP: Product Lines: Breadth and Depth
KEY: Bloom's: Evaluation MSC: MBA: Managing Strategy & Innovation

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Chapter 6 - Products: Goods and Services

ANS: T DIF: Easy REF: Page 67

ANS: T DIF: Moderate REF: Page 67

ANS: T DIF: Moderate REF: Page 67

ANS: F DIF: Challenging REF: Page 67

ANS: F DIF: Challenging REF: Page 67

ANS: F DIF: Challenging REF: Page 67

7. The word product can be defined as a mathematical term for multiplication.

ANS: T DIF: Moderate REF: Page 67

ANS: T DIF: Easy REF: Page 67

ANS: T DIF: Challenging REF: Page 67

ANS: T DIF: Moderate REF: Page 67

ANS: F DIF: Easy REF: Page 68

ANS: T DIF: Easy REF: Page 68

ANS: F DIF: Moderate REF: Page 68

14. An example of “experience marketing” is a professional sporting event.

ANS: T DIF: Easy REF: Page 68

ANS: T DIF: Challenging REF: Page 69

ANS: F DIF: Moderate REF: Page 69

ANS: T DIF: Easy REF: Page 69

ANS: T DIF: Easy REF: Page 69

ANS: F DIF: Challenging REF: Page 69

ANS: T DIF: Easy REF: Page 70

ANS: F DIF: Moderate REF: Page 70

ANS: T DIF: Challenging REF: Page 70

24. Services are said to be less variable than products.

ANS: F DIF: Easy REF: Page 70

ANS: T DIF: Moderate REF: Page 70

ANS: T DIF: Challenging REF: Page 70

ANS: T DIF: Challenging REF: Page 71

ANS: T DIF: Moderate REF: Page 71

ANS: T DIF: Easy REF: Page 71

ANS: F DIF: Moderate REF: Page 71

ANS: F DIF: Challenging REF: Page 72

ANS: T DIF: Moderate REF: Page 72

ANS: T DIF: Easy REF: Page 72

ANS: F DIF: Challenging REF: Page 72

ANS: F DIF: Moderate REF: Page 73

ANS: T DIF: Easy REF: Page 73

ANS: F DIF: Challenging REF: Page 73

ANS: T DIF: Moderate REF: Page 73

39. A brand is an investment.

ANS: T DIF: Easy REF: Page 73

ANS: F DIF: Challenging REF: Page 74

4. Orbitz offers low-price tickets on flights because ______.

8. An example of a tangible purchase is _______.

9. Which of the following is an example of “experience marketing”?

10. Which of the following are pure goods?

12. The color of a pair of socks is an example of a ______ quality.

15. _______ are dominated by search and experience qualities.

16. _______ are mostly comprised of experience and credence qualities.

17. Doctor’s services consist mainly of ______ elements.

20. Services are more ______ than goods.

23. Services are said to be more ______ than goods.

25. Bad variability involves ______.

26. The most successful example of self-service is ______.

29. What does good variability consists of?

30. It is helpful to think of goods and services as ____.

34. When can core businesses change?

35. For an NFL team, what is their core service?

36. What is the definition of a company’s core business similar to?

37. How can product lines vary?