Test Bank For A Preface To Marketing Management 15th by Peter

Test Bank for A Preface to Marketing Management 15th by Peter
Test Bank for A Preface to Marketing Management

15th by Peter
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Chapter 06
Product and Brand Strategy
Multiple Choice Questions
1. Which of the following best defines tangible products?
A. They refer to those goods that cannot be perceived by touch.

B. They refer to the physical entities or services that are offered to a buyer.
C. They refer to goods that cannot be resold by a buyer.
D. They refer to the essential benefits a buyer expects to receive from a service.
2. A tangible product along with the whole cluster of services that accompany it is called a(n)
_____.
A. extended product
B. improvised product
C. meta product
D. physical product
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3. Alcove Inc., a computer hardware manufacturer, provides post-installation technical support
to its customers by issuing free newsletters that contain tips on enhancing the performance
of a product and dealing with common performance-related issues. In this scenario, Alcove is
marketing _____.
A. improvised products
B. meta products
C. intangible products
D. extended products
4. A product that is viewed in terms of the essential benefits that a buyer expects to receive
from it is called a(n) _____.
A. tangible product
B. generic product
C. intangible product
D. meta product
5. Personal care products that bring to the purchaser feelings of self-enhancement and security
in addition to the essential benefits they offer are examples of _____.
A. meta products
B. generic products
C. tangible products
D. conventional products
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6. Executives commit the error of "marketing myopia" when they _____.
A. fail to focus on their company's needs

B. do not define a product solely in terms of the tangible product
C. define their company's product in accordance with their customers' needs and
requirements
D. define their company's product too narrowly
7. Which of the following is a basic assumption underlying product classification schemes?
A. Many products are unique and cannot be categorized under any product class.
B. The same marketing strategy can be used for all product categories.
C. Products with common attributes can be marketed in a similar fashion.
D. Products should be differentiated on the basis of profit margins rather than product
features.
8. Goods grown or extracted from the land or sea, such as iron ore, wheat, and sand, are better
known as _____.
A. agricultural products and raw materials

B. consumer goods
C. convenience goods
D. specialty goods and intermediate products
9. Lumber, coal, and iron ore are examples of _____.
A. consumables
B. convenience goods
C. raw materials
D. specialty goods
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10. Which of the following is true of agricultural goods and raw materials?
A. These products have a high value per unit.

B. These products are fairly homogeneous.
C. These products are always sold in single units or in small volumes.
D. These products cannot be used to produce other goods.
11. Products that are purchased by business firms for the purpose of producing other goods or
for running a business are called _____.
A. convenience goods
B. organizational goods
C. specialty goods
D. shopping goods
12. Major and minor equipment, such as basic machinery, tools, and other processing facilities,
can be categorized as _____.
A. specialty goods
C. semifinished goods
D. convenience goods
13. Dure Plastics Inc. manufactures plastic products using injection-molding machines. The
spare parts required for the injection machines are purchased from Nova Spares Company.
The spare parts sourced from Nova Spares can be categorized as _____.
A. specialty goods
B. shopping goods
D. organizational goods
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14. Which of the following products can be classified as an organizational good?
A. An electric generator purchased by an individual to use in the event of a power failure

B. Large amounts of fabric purchased by an individual to make upholstery for his or her
house
C. Loaves of bread purchased by a store owner for the purpose of reselling at his store
D. Timber purchased by the owner of a furniture store to make chairs
15. Which of the following statements regarding organizational goods is true?
A. Organizational goods are not purchased as means to an end but rather as an end in
themselves.
B. Buyers of organizational goods are generally ill informed.
C. Organizational goods are often purchased directly from the original source with few
middlemen.
D. The primary purchasing motive for organizational goods is convenience, even if the costs
are high.
16. Identify a true statement about organizational goods.
A. They are ordered according to the user's specifications.

B. They have low unit value.
C. They often require a short period of negotiation.
D. They do not require technical advice on installation and use.
17. Convenience goods, shopping goods, and specialty goods are the three classes of _____.
A. agricultural goods
B. complementary goods
C. organizational goods
D. consumer goods
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18. _____ are consumer goods that are purchased frequently with minimum effort.
A. Specialty goods
B. Convenience goods
C. Shopping goods
D. Luxury goods
19. _____ fall under the category of convenience goods.
A. Impulse goods
B. Shopping goods
C. Luxury goods
D. Specialty goods
20. Which of the following scenarios shows a person purchasing convenience goods?
A. Joshua buys a loaf of bread while shopping for provisions in a grocery store.
B. After a lot of consideration, Jenna orders a solitaire ring from an exclusive jeweler.
C. Aliyah and her husband finally pick a car after examining many models.
D. Alice purchases four kilograms of white sand for her Zen garden.
21. Which of the following is a difference between convenience goods and shopping goods?
A. Shopping goods generally require broadcast promotion, while convenience goods generally
require more targeted promotion.
B. Convenience goods are used to run a business, while shopping goods are used to produce
other products.
C. Convenience goods are purchased frequently with minimum effort, while shopping goods
are purchased after spending a considerable amount of time and energy.
D. Shopping goods generally require longer channels of distribution than convenience goods.
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22. Alcove Studio is a designer boutique that sells the most recent collections from top
designers. Since it sells exclusive clothing, customers from all over the world are willing to
pay exorbitant prices and place orders months in advance. Alcove Studio's goods are
examples of _____.
A. specialty goods
C. impulse goods
23. Shannon Cruz is very particular about the kind of blue jeans she wears. She refuses to buy
anything other than Reeve's 201 and is very keen about finding that particular fit since her
local store does not have it. In this scenario, Reeve's 201 is an example of a(n) _____.
A. convenience good
B. intermediate good
C. intangible good
D. specialty good
24. The demand for organizational goods is a(n) _____.
A. end-user demand
B. direct demand
C. derived demand
D. low-value demand
25. A _____ refers to a market that is typically characterized by a limited number of buyers.
A. horizontal market
B. matrix market
C. vertical market
D. parallel market
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26. The vertical market for a product is deep when:
A. the existing customer base is more likely to switch to substitutes.

B. a large percentage of producers in the market use the product.
C. the product is purchased by all types of firms in many different industries.
D. the product appeals to different social classes of consumers.
27. A vertical market is a market in which _____.
A. customers are restricted to a few industries

B. goods are purchased by specific firms in different industries
C. goods are purchased by all types of firms in many different industries
D. vendors offer a wide range of goods to a large number of customers
28. Which of the following is true of horizontal markets?
A. These markets offer only specialty goods so that consumers will make a special effort to
buy them.
B. These markets offer certain products that have a limited number of buyers.
C. These markets offer goods that are purchased by all types of firms in many different
industries.
D. These markets include only those convenience goods that are purchased frequently and
with minimum effort.
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29. Lystronia Inc. is a world-renowned manufacturer of culture media products. The company
produces and supplies prepared media to laboratories all over the world for growing and
testing microorganisms. Since Lystronia's customers are restricted to the healthcare industry,
Lystronia typically operates in a _____.
A. parallel market
B. vertical market
C. horizontal market
D. high-demand market
30. RytWell Inc. is a company that manufactures pens. It distributes pens to various industries in
the United States of America. Because its products are used by almost every company in the
market, RytWell Inc. most likely operates in a _____.
A. contestable market
B. vertical market
D. gray market
31. From the standpoint of a marketing manager, product classification is useful because it:
A. helps to understand that convenience goods generally require targeted promotion.

B. provides the knowledge that shopping goods typically need broadcast promotion.
C. helps in distinguishing the scope of vertical markets and horizontal markets.
D. assists in providing guidelines for developing an appropriate marketing mix.
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32. _____ can be defined as the degree of excellence or superiority that an organization's product
possesses.
A. Quality
B. Width
C. Depth
D. Reach
33. Which of the following statements is true of product quality?
A. Quality encompasses only the tangible aspects of a firm's products or services.

B. The customer is the key perceiver of quality.
C. Quality is only evaluated from the perspective of the manufacturer.
D. Companies rarely formalize an interest in providing quality products.
34. _____ is an organizationwide commitment to satisfying customers by continuously improving

every business process involved in delivering products or services.
A. Capability Maturity Model Integration (CMMI)

B. Total quality management (TQM) program
C. Just-in-case (JIC) manufacturing
D. Toyota Production System (TPS)
35. Remus Co., a pharmaceutical company that is involved in drug discovery and development, is
ISO 9000 certified. The ISO 9000 certification indicates that Remus:
A. provides subsidized products in a relatively horizontal market.

B. meets standardized levels of product quality.
C. follows a traditional marketing approach focused primarily on product features.
D. competes in a purely vertical market.
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36. In the context of product management, value refers to the:
A. tangible aspects of a firm's product or service.

B. quality of a product and not its price.
C. amount of money spent in producing a product.
D. returns a customer gets in exchange for what he or she gives.
37. Which of the following statements is true about product quality and value?
A. The terms "quality" and "value" are synonymous in the context of product management.
B. Quality encompasses the tangible aspects of a product, while value encompasses the
intangible aspects of a product.
C. The level of quality and value a firm's products have cannot be measured against external
standards.
D. The value of a product encompasses not only the quality of the product but also its price.
38. The full set of products offered for sale by an organization is called a firm's _____.
A. product family
B. product mix
C. product line
D. product category
39. A _____ refers to a group of products that share common characteristics, distribution
channels, customers, or uses.
A. product variant
B. product portfolio
C. product line
D. product matrix
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40. The width of a product mix refers to the:
A. number of product lines handled by the organization.

B. total number of items or products in the company's product mix.
C. average number of products in each line.
D. extent to which one product line differs from another.
41. The depth of a product mix refers to the:
A. average number of products in each product line.

B. degree of similarity between product lines.
C. number of product lines handled by the organization.
D. total number of products or items in the company's product mix.
42. Alan visits a shopping mall in his neighborhood. He recollects his lessons from a marketing
class and attempts to relate them to his observations at the mall. Which of Alan's
interpretations is most accurate?
A. Alan believes that Tie World, a shop that exclusively sells ties, has a wide product mix.
B. Alan believes that The Corner Store, a shop that sells everything from baby rattles and
potting soil to contact lens cleaning solution, has a narrow product mix and deep product
lines.
C. Alan believes that The Giga-store, a shop that sells hundreds of self-help books, novels,
and religious-themed music CDs, has a narrow and shallow product mix.
D. Alan believes that Ming's Corner, a shop that sells 36 different kinds of muffins, has a
narrow and deep product mix.
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43. Which of the following is the legal term for a brand?
A. Generic mark
B. Trade dress
C. Trademark
D. Watermark
44. Which of the following serves as a unique identifier and is perhaps the single most important
element on the package of a product?
A. The seal
B. The brand name
C. The price
D. The trade dress
45. The use of a brand name to facilitate entry into a new market segment is called _____.
A. franchise extension
B. line extension
C. myopic marketing
D. multibranding
46. In _____, a current brand name is used to enter a completely different product class.
A. line extension
B. brand extension
C. brand dilution
D. generic branding
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47. Duncan Corp. introduces four modified versions of its popular brand of Maxims morning
cereal. The four new variants of cereal include "Maxims Corn Flakes," "Maxims Raisin Bran,"
"Maxims Honey Clusters," and "Maxims Brown Sugar and Oats." In doing so, Duncan has
used a _____ approach with its Maxims cereal brand.
A. line extension
B. multibranding
C. brand extension
D. franchise extension
48. Whizzle Corp. first introduced a line of toothpastes under the Whizzle brand name. A few
years later, it introduced two different products, a mouthwash and a chewing gum, using the
same brand name. Whizzle is using a _____ strategy to market its products.
A. line extension
B. multibranding
C. brand extension
D. joint branding
49. _____ is a form of branding, whereby a company attaches the corporate name to a product to
enter either a new market segment or a different product class.
A. Multibranding
B. Franchise extension
C. Generic branding
D. Line extension
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50. Sapphire Corp., a manufacturer of perfumes, decides to use its well-established corporate
image to enter a new product class. It does so by attaching the Sapphire corporate name to
its new line of clothing and accessories. From the information provided in the scenario, it is
evident that Sapphire is using a _____ strategy to market its products.
A. multibranding
B. line extension
C. family branding
D. cobranding
51. Which of the following does a multibranding strategy involve?
A. Companies marketing their brand jointly with that of their competitors

B. Companies assigning different brand names to each of their products
C. Companies attaching their corporate name to a product to enter a different product class
D. Companies assigning different brand names to the same products in different outlets
52. In the context of brand and brand equity, cobranding is the strategy in which a company:
A. integrates two or more branded products.

B. attaches the corporate name to a product to enter either a new market segment or a
different product class.
C. assigns different brand names to each product.
D. uses a brand name to facilitate entry into a new market segment.
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53. Soffia Inc. manufactures a moisturizing soap with anti-ultraviolet properties, which is sold
under the brand name DewMist. The company also manufactures Safechoice, a non-
abrasive, antibacterial brand of soap, which is a different brand. Which of the following
strategies has Soffia used in this scenario?
A. Multibranding strategy
B. Dual branding strategy
C. Cobranding strategy
D. Family branding strategy
54. A producer of alcoholic beverages produces four different brands of beer: BlackStar,
BlueStar, Grandeur, and Holmes. BlackStar is a standard brew, while BlueStar has a low
alcohol content. Grandeur is low in calories, and Holmes has a high alcohol content. In this
case, the manufacturer uses different brand names for each of its products to:
A. associate the image of one product with that of another.

B. increase consumer brand awareness.
C. enter a new product class.
D. target specific market segments more efficiently.
55. One of the advantages of using _____ is that a firm can distance products from other
offerings it markets.
A. dual branding
B. multibranding
C. franchise extension
D. brand extension
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56. In the context of brand and brand equity, which of the following is true of the multibranding
strategy?
A. The image of one product (or set of products) is associated with other products a company
markets.
B. A firm should not distance products from other offerings it markets.
C. The product(s) can be targeted at a specific market segment.
D. Should the product(s) fail, the probability of failure impacting on other company products
is maximized.
57. Spending significant amounts of money to familiarize customers with new brands is a
disadvantage primarily associated with _____.
B. multibranding
C. dual branding
D. line extension
58. In the context of branding, brand equity:
A. is the set of assets or liabilities linked to a brand that adds or subtracts value.
B. is not determined by the consumer.
C. can only be possessed by consumer goods and not by organizational goods.
D. is independent of the results of the marketplace's relationship with a brand.
59. Which of the following is true of brand equity?
A. Organizational products cannot have brand equity.

B. Brand equity is a company's evaluation of its products and sales figures.
C. Advertising does not have any effect on brand equity.
D. Brand equity is determined by the consumer.
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60. _____ is the culmination of a consumer's assessment of the product, the company that
manufactures and markets the product, and all other variables that affect the product
between manufacture and consumer consumption.
A. Brand positioning
B. Brand equity
C. Brand dilution
D. Brand extension
61. Identify a true statement about the brand equity of organizational products.
A. The value of a brand's assets is independent of the consequences or results of the

marketplace's relationship with the brand.
B. Loyalty (or disloyalty) to a brand tends to be of a more local nature, focusing on a limited
number of firm's product lines.
C. Because brand loyalty exists, attempts to position new products in a manner differing from
existing products are easy.
D. Attempts to establish or change brand image must take into account distributor image.
62. Products that are equivalent to national brands but are priced much lower are called _____.
A. prestige brands
B. private label brands
C. generic product brands
D. dual brands
63. _____ is a method of differentiating a relatively homogeneous product.
A. Mass marketing
B. Product line extension
C. Distinctive packaging
D. Family branding
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64. Fresh-Cola Inc. is a manufacturer of carbonated drinks that packages its products in bottles,
cans, and 12-pack cartons. A standard 12-pack carton of these drinks can neither fit
conveniently in the standard-size refrigerator shelf nor can the drinks be easily dispensed
from the carton. Fresh-Cola introduces a new design called "the refrigerator pack." The
refrigerator pack is designed to fit easily on a standard refrigerator shelf and dispenses one
can at a time. With its new refrigerator pack, Fresh-Cola:
A. has failed to consider its consumers' needs in making its packaging decisions.
B. is using packaging as a part of its product differentiation strategy.
C. is using a brand extension strategy for market development.
D. is implementing a cost leadership strategy in the market for carbonated drinks.
65. Identify a true statement about the different stages of a product life cycle.
A. Profits increase and are positively correlated with sales during the growth stage of the
product life cycle.
B. The production and marketing costs are generally low during the introduction phase of the
product life cycle.
C. A seller makes price concessions, increases product quality, or expands outlays on
advertising and sales promotion during the growth stage.
D. As a product matures, profits for an initiating firm keep pace with sales.
66. One of the basic objectives of the maturity stage of a product's life cycle is to:
A. establish a market for the product type.

B. persuade early adopters to buy the product.
C. develop a high degree of brand preference among consumers.
D. seek growth by luring customers from competitors.
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67. In which of the following stages of the product life cycle is promotion efforts minimal?
A. The introduction stage

B. The decline stage
C. The maturity stage
D. The growth stage
68. _____ are accepted and popular product styles that go through a repetitive cycle of
popularity.
A. Fashions
B. Impulse goods
C. Specialty products
D. Fads
69. A fad can be best described as a(n):
A. accepted and popular product that goes through repetitive cycles of popularity.
B. product that has a lengthy period of popularity, which gives competitors the chance to
capitalize on the product.
C. product that experiences an intense but brief period of popularity.
D. specialty product that has retained its popularity for a long time.
70. In the context of product purchasing, the diffusion of innovation is:
A. used to describe an audit task.

B. the spread of a product through the population.
C. applied to products at the introductory stage of the product life cycle.
D. used to describe the ability of an organization to create entirely new products.
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71. In the context of the diffusion of innovation, _____ refer to buyers who are the first to
purchase a new product.
A. innovators
B. early adopters
C. laggards
D. late adopters
72. Which of the following is a characteristic of early adopters?
A. They are extremely cautious and skeptical about new ideas.

B. They are generally respected social leaders.
C. They are usually below average in education.
D. They do not exert any influence on the early majority.
73. According to the process of product adoption and diffusion, which of the following adoptive
categories first begins to buy a product if the experience of innovators has been favorable?
A. Laggards
B. Early majority
C. Late majority
D. Early adopters
74. In the context of the adopter categories of product diffusion, the biggest category of buyers is
divided into two groups called the:
A. innovators and the laggards.

B. laggards and the early adopters.
C. early majority and the late majority.
D. early majority and the innovators.
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75. Which of the following adoptive categories involved in the diffusion of innovation is the most
reluctant to make changes and is comfortable with traditional products?
A. Early majority
B. Laggards
C. Early adopters
D. Innovators
76. With regard to the adopter categories of the diffusion of innovation, laggards are:
A. fearful of debt but may eventually purchase a well-established brand.

B. the first to purchase a product through early-bird promotional offers.
C. venturesome and are willing to take risks.
D. most likely to begin buying new goods if the experience of innovators is favorable.
77. Which of the following is a marketing management technique in which a company's current
product offerings are reviewed to ascertain whether each product should be continued as is,
improved, modified, or deleted?
A. Product generation
B. Product audit
C. Product definition
D. Product creation
78. Identify the primary reason for conducting a product audit.
A. To develop a marketing plan for new products

B. To detect sick products and bury them
C. To earn the estimated profits without introducing new products
D. To implement cost-cutting strategies without altering the product mix
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79. When contemplating a product deletion, a firm studies customer migration patterns to
determine:
A. the profit contribution of the product to the firm.

B. whether the product has outgrown its usefulness.
C. whether the product has reached a level of maturity and saturation in the market.
D. whether customers of the product would switch to other substitute products marketed by
the same firm.
80. Which of the following statements about product deletion is true?
A. Product deletions are necessary because the number of new products introduced keeps
decreasing each year.
B. The deletion plan should keep consumers supplied with replacement parts and repair
service.
C. The deletion plan is not required to provide for clearing out of stock in question.
D. The deletion plan should allow the retailer or distributor to decide which products should
be deleted.
81. With regard to product improvement, _____ refer mainly to product features, design, package,
and so forth.
A. marketing dimensions
B. attributes
C. extensions
D. fads
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82. Which of the following is an attribute that can be changed to alter a product?
A. Product price
B. Promotion strategy
C. Distribution channel
D. Product packaging
83. Which of the following scenarios shows how a product is improved by modifying a product
attribute?
A. An aerated drinks manufacturer reduces the price of one of its drinks due to low sales.
B. A large spa in Reno begins advertising its services on the Internet.
C. A dairy products manufacturer changes the promotion strategy of its line of processed
cheese.
D. A company that sells packaged seafood adds an eco-friendly label to its packaging.
84. A company changes the packaging of one of its existing products to make it more attractive
to consumers. The company has improved its product by modifying its _____.
B. attributes
C. channels of distribution
D. promotion strategy
85. Price, promotion strategy, and channels of distribution are examples of _____.
B. marketing trends
C. product features
D. product attributes
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86. Which of the following scenarios shows how a product was improved by modifying its
marketing dimensions?
A. The Caribbean cruise was improved by adding two more stops in Mexico.
B. The 800-page history of chiropody was modified by including an extensive index.
C. Liz Claiborne increased the number of retail outlets that carries its sportswear.
D. The Dillard House restaurant added three new vegetarian dishes to its menu.
87. Which of the following pertains to the marketing dimensions of a product?
A. Product feature
C. Design
D. Packaging
88. The Bedford Hotel is an industry leader in the hospitality and customer service sector. After
Templeton Hotel measured its services against Bedford Hotel, it instituted a customer service
campaign called "proactive hospitality." Templeton managers examine monthly reports for
problem areas, and the Bedford model is used to determine ways to address and resolve
these issues. Which of the following methods is used by Templeton to identify improvement
areas?
A. Test marketing
B. Benchmarking
C. Niche marketing
D. Market segmenting
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89. Motokraft Inc. is a new company that manufactures automobiles. The company compares its
production rate, distribution networks, and quality of customer service with Vestla Corp., the
market leader in the automobile industry. Identify the method that Motokraft Inc. uses to
achieve strong performance.
A. Multibranding
B. Vertical marketing
C. Benchmarking
D. Horizontal marketing
90. Which of the following statements about benchmarking is true?
A. It represents a strategy used to enter a new market.

B. It involves the creation of innovative products.
C. It increases delivery lead times.
D. It improves customer order-processing activities.
91. In a _____, one person is responsible for overseeing an entire product line with all of the
functional areas of marketing such as research, advertising, sales promotion, sales, and
product planning.
A. brand-manager system
B. marketing-manager system
C. functional departments system
D. product-management system
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92. Which of the following statements is true of a brand-manager system?
A. Brand managers have difficulties in their line of work because they do not have authority
commensurate with their responsibilities.
B. A brand-manager system is superior to a market-manager system on many levels.
C. Brand managers are responsible for overseeing all brands within a particular line.
D. A brand-manager system is popular in organizations with a line or lines of similar products
or one dominant product line.
93. In a _____, a manager is responsible for everything from marketing research and package
design to advertising for a single product or a very small group of new and existing products.
A. marketing-manager system
B. category management system
C. traditional marketing system
D. brand-manager system
94. Which of the following statements is true of a venture team?
A. It is a cross-functional team responsible for all of the tasks involved in the development of
a new product.
B. It is a team that is only responsible for processing the venture capital for a business idea
of a firm's new product.
C. It is a cross-functional team that manages and monitors the existing products of a firm.
D. It is a team whose primary duty involves conducting product audits to identify sick
products and delete them.
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95. Which of the following is a limitation of a brand-manager system?
A. Managers following this system often pay inadequate attention to new products.
B. This system can be used only in organizations that have one dominant product line.
C. Managers following this system are more concerned with the profitability of all of the
organization's brands than with their own brand's profitability.
D. Managers following this system believe in category management rather than product
management.
96. Lauren is a brand manager at a company that manufactures toothpaste. She wants to
increase the sales of an existing brand of toothpaste. To do so, she calls for a meeting with a
team comprising of members from the administrative department, the human resource
department, and the finance department. All of these members work together to come up
with ways to improve the company's toothpaste brand positioning. Such a team is an example
of a _____.
A. departmental team
B. marketing-management system
C. cross-functional team
D. category-management system
97. Which of the following is true of a global virtual team?
A. It is a cross-functional team that operates across time and geographic distance.

B. Its members primarily communicate with each other on a one-to-one basis.
C. It is never faced with the challenge of building and maintaining trust as it works toward
accomplishing its objectives.
D. It is unlikely to transcend organizational boundaries and cultures.
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Chapter 06 Product and Brand Strategy Answer Key
Multiple Choice Questions
1. Which of the following best defines tangible products?
A. They refer to those goods that cannot be perceived by touch.

B. They refer to the physical entities or services that are offered to a buyer.
C. They refer to goods that cannot be resold by a buyer.
D. They refer to the essential benefits a buyer expects to receive from a service.
A tangible product refers to the physical entity or service that is offered to a buyer. The
way in which the product variable is defined can have important implications for the
survival, profitability, and long-run growth of the firm.
AACSB: Analytical Thinking

Blooms: Remember
Difficulty: 1 Easy
Topic: Basic Issues in Product Management
2. A tangible product along with the whole cluster of services that accompany it is called a(n)
_____.
A. extended product
B. improvised product
C. meta product
D. physical product
The tangible product along with the whole cluster of services that accompany it is called
an extended product. The way in which the product variable is defined can have important
implications for the survival, profitability, and long-run growth of a firm.

Blooms: Remember
6-29
Difficulty: 1 Easy
3. Alcove Inc., a computer hardware manufacturer, provides post-installation technical

support to its customers by issuing free newsletters that contain tips on enhancing the
performance of a product and dealing with common performance-related issues. In this
scenario, Alcove is marketing _____.
A. improvised products
B. meta products
C. intangible products
D. extended products
In this scenario, Alcove Inc. is marketing extended products. An extended product refers to
a tangible product along with the whole cluster of services that accompany it. Here, the
computer hardware manufacturer offers additional services in the form of newsletters that
contain useful information for its customers.
AACSB: Reflective Thinking

Blooms: Apply
Difficulty: 3 Hard
4. A product that is viewed in terms of the essential benefits that a buyer expects to receive
from it is called a(n) _____.
A. tangible product
B. generic product
C. intangible product
D. meta product
A generic product refers to the essential benefits a buyer expects to receive from a
product. For example, many personal care products bring to the purchaser feelings of self-
enhancement and security in addition to the tangible benefits they offer.

Blooms: Remember
6-30
Difficulty: 1 Easy
5. Personal care products that bring to the purchaser feelings of self-enhancement and
security in addition to the essential benefits they offer are examples of _____.
A. meta products
B. generic products
C. tangible products
D. conventional products
A generic product constitutes the essential benefits the buyer expects to receive from the
product. For example, many personal care products bring to the purchaser feelings of self-
enhancement and security in addition to the tangible benefits they offer.

Blooms: Remember
Difficulty: 1 Easy
6. Executives commit the error of "marketing myopia" when they _____.
A. fail to focus on their company's needs

B. do not define a product solely in terms of the tangible product
C. define their company's product in accordance with their customers' needs and
requirements
D. define their company's product too narrowly
From the standpoint of a marketing manager, to define a product solely in terms of the
tangible product is to fall into the error of "marketing myopia." Executives who are guilty of
committing this error define their company's product too narrowly, since they
overemphasize the physical object itself.

Blooms: Understand
Difficulty: 2 Medium
6-31
7. Which of the following is a basic assumption underlying product classification schemes?
A. Many products are unique and cannot be categorized under any product class.
B. The same marketing strategy can be used for all product categories.
C. Products with common attributes can be marketed in a similar fashion.
D. Products should be differentiated on the basis of profit margins rather than product
features.
A basic assumption underlying product classification schemes is that products with
common attributes can be marketed in a similar fashion. In general, products are classed
according to two basic criteria: (1) end use or market, and (2) degree of processing or
physical transformation.

Blooms: Understand
8. Goods grown or extracted from the land or sea, such as iron ore, wheat, and sand, are
better known as _____.
A. agricultural products and raw materials

B. consumer goods
C. convenience goods
D. specialty goods and intermediate products
Agricultural products and raw materials are goods grown or extracted from the land or sea,
such as iron ore, wheat, and sand. In general, these products are fairly homogeneous, sold
in large volume, and have low value per unit or in bulk weight.

Blooms: Remember
Difficulty: 1 Easy
6-32
9. Lumber, coal, and iron ore are examples of _____.
A. consumables
B. convenience goods
C. raw materials
D. specialty goods
Agricultural products and raw materials are goods grown or extracted from the land or sea,
such as iron ore, wheat, and sand. In general, these products are fairly homogeneous, sold
in large volume, and have low value per unit or in bulk weight.

Blooms: Remember
Difficulty: 1 Easy
10. Which of the following is true of agricultural goods and raw materials?
A. These products have a high value per unit.

B. These products are fairly homogeneous.
C. These products are always sold in single units or in small volumes.
D. These products cannot be used to produce other goods.
Agricultural products are goods grown or extracted from the land or sea, such as iron ore,
wheat, and sand. They are fairly homogeneous, sold in large volume, and have low value
per unit or in bulk weight.

Blooms: Understand
6-33
11. Products that are purchased by business firms for the purpose of producing other goods or
for running a business are called _____.
A. convenience goods
C. specialty goods
D. shopping goods
Organizational goods are products purchased by business firms for the purpose of
producing other goods or for running the business.

Blooms: Remember
Difficulty: 1 Easy
12. Major and minor equipment, such as basic machinery, tools, and other processing
facilities, can be categorized as _____.
A. specialty goods
Organizational goods are products purchased by business firms for the purpose of
producing other goods or for running the business. Major and minor equipment, such as
basic machinery, tools, and other processing facilities, are included in this category.

Blooms: Remember
Difficulty: 1 Easy
6-34
13. Dure Plastics Inc. manufactures plastic products using injection-molding machines. The
spare parts required for the injection machines are purchased from Nova Spares
Company. The spare parts sourced from Nova Spares can be categorized as _____.
A. specialty goods
B. shopping goods
D. organizational goods
The spare parts sourced from Nova Spares Company can be categorized as organizational
goods. Organizational goods are products that are purchased by business firms for the
purpose of producing other goods or for running the business.

Blooms: Apply
Difficulty: 3 Hard
14. Which of the following products can be classified as an organizational good?
A. An electric generator purchased by an individual to use in the event of a power failure

B. Large amounts of fabric purchased by an individual to make upholstery for his or her
house
C. Loaves of bread purchased by a store owner for the purpose of reselling at his store
D. Timber purchased by the owner of a furniture store to make chairs
In this scenario, the timber that is purchased by the owner of a furniture store to make
chairs can be classified as an organizational good. Organizational goods are products
purchased by business firms for the purpose of producing other goods or for running the
business. This category includes raw materials and semifinished goods.

Blooms: Apply
Difficulty: 3 Hard
6-35
15. Which of the following statements regarding organizational goods is true?
A. Organizational goods are not purchased as means to an end but rather as an end in
themselves.
B. Buyers of organizational goods are generally ill informed.
C. Organizational goods are often purchased directly from the original source with few
middlemen.
D. The primary purchasing motive for organizational goods is convenience, even if the
costs are high.
Organizational goods are often purchased directly from the original source with few
middlemen, because many of these goods can be bought in large quantities; they have
high unit value; technical advice on installation and use is required; and the product is
ordered according to the user's specifications.

Blooms: Understand
16. Identify a true statement about organizational goods.
A. They are ordered according to the user's specifications.

B. They have low unit value.
C. They often require a short period of negotiation.
D. They do not require technical advice on installation and use.
Organizational goods are often purchased directly from an original source with few
middlemen, because many of these goods can be bought in large quantities; they have
high unit value; technical advice on installation and use is required; and the product is
ordered according to the user's specifications. Many organizational goods are subject to
multiple-purchase influence, and a long period of negotiation is often required.

Blooms: Understand
6-36
17. Convenience goods, shopping goods, and specialty goods are the three classes of _____.
A. agricultural goods
B. complementary goods
C. organizational goods
D. consumer goods
Convenience goods, shopping goods, and specialty goods are the three classes of
consumer goods. The buying motive, buying habits, and character of the market are
different for organizational goods vis-à-vis consumer goods.

Blooms: Remember
Difficulty: 1 Easy
18. _____ are consumer goods that are purchased frequently with minimum effort.
A. Specialty goods
B. Convenience goods
C. Shopping goods
D. Luxury goods
Convenience goods, such as food, are consumer goods which are purchased frequently
with minimum effort. Impulse goods would also fall into this category.

Blooms: Remember
Difficulty: 1 Easy
6-37
19. _____ fall under the category of convenience goods.
A. Impulse goods
B. Shopping goods
C. Luxury goods
D. Specialty goods
Convenience goods are a class of consumer goods that are purchased frequently with
minimum effort. Impulse goods would also fall into this category.

Blooms: Remember
Difficulty: 1 Easy
20. Which of the following scenarios shows a person purchasing convenience goods?
A. Joshua buys a loaf of bread while shopping for provisions in a grocery store.
B. After a lot of consideration, Jenna orders a solitaire ring from an exclusive jeweler.
C. Aliyah and her husband finally pick a car after examining many models.
D. Alice purchases four kilograms of white sand for her Zen garden.
Shopping goods, such as appliances, are products that are purchased after some time and
energy are spent comparing the various offerings.

Blooms: Apply
Difficulty: 3 Hard
6-38
21. Which of the following is a difference between convenience goods and shopping goods?
A. Shopping goods generally require broadcast promotion, while convenience goods

generally require more targeted promotion.
B. Convenience goods are used to run a business, while shopping goods are used to
produce other products.
C. Convenience goods are purchased frequently with minimum effort, while shopping
goods are purchased after spending a considerable amount of time and energy.
D. Shopping goods generally require longer channels of distribution than convenience
goods.
Convenience goods are goods that are purchased frequently with minimum effort.
Shopping goods are goods that are purchased after some time and energy are spent
comparing the various offerings. Convenience goods generally require broadcast
promotion and long channels of distribution as opposed to shopping goods, which
generally require more targeted promotion and somewhat shorter channels of distribution.

Blooms: Understand
6-39
22. Alcove Studio is a designer boutique that sells the most recent collections from top
designers. Since it sells exclusive clothing, customers from all over the world are willing to
pay exorbitant prices and place orders months in advance. Alcove Studio's goods are
examples of _____.
A. specialty goods
C. impulse goods
Alcove Studio's designer clothing is an example of a specialty good. Specialty goods are
goods which are unique in some way, so the consumer will make a special purchase effort
to obtain them.

Blooms: Apply
Difficulty: 3 Hard
23. Shannon Cruz is very particular about the kind of blue jeans she wears. She refuses to buy
anything other than Reeve's 201 and is very keen about finding that particular fit since her
local store does not have it. In this scenario, Reeve's 201 is an example of a(n) _____.
A. convenience good
B. intermediate good
C. intangible good
D. specialty good
In this scenario, Reeve's 201 is an example of a specialty good. Specialty goods are goods
which are unique in some way so the consumer will make a special purchase effort to
obtain them.

Blooms: Apply
Difficulty: 3 Hard
6-40
24. The demand for organizational goods is a(n) _____.
A. end-user demand
B. direct demand
C. derived demand
D. low-value demand
The demand for organizational goods is a derived demand, which means that they are
usually purchased as means to an end and not as an end in themselves.

Blooms: Remember
Difficulty: 1 Easy
25. A _____ refers to a market that is typically characterized by a limited number of buyers.
A. horizontal market
B. matrix market
C. vertical market
D. parallel market
Certain products have a limited number of buyers; this is known as a vertical market,
which means that it is narrow, because customers are restricted to a few industries; and it
is deep, in that a large percentage of the producers in the market use the product.

Blooms: Remember
Difficulty: 1 Easy
6-41
26. The vertical market for a product is deep when:
A. the existing customer base is more likely to switch to substitutes.

B. a large percentage of producers in the market use the product.
C. the product is purchased by all types of firms in many different industries.
D. the product appeals to different social classes of consumers.
which means that (1) it is narrow, because customers are restricted to a few industries;
and (2) it is deep, in that a large percentage of the producers in the market use the
product.

Blooms: Understand
27. A vertical market is a market in which _____.
A. customers are restricted to a few industries

B. goods are purchased by specific firms in different industries
C. goods are purchased by all types of firms in many different industries
D. vendors offer a wide range of goods to a large number of customers
which means that it is narrow, because customers are restricted to a few industries; and it
is deep, in that a large percentage of the producers in the market use the product.

Blooms: Understand
6-42
28. Which of the following is true of horizontal markets?
A. These markets offer only specialty goods so that consumers will make a special effort
to buy them.
B. These markets offer certain products that have a limited number of buyers.
C. These markets offer goods that are purchased by all types of firms in many different
industries.
D. These markets include only those convenience goods that are purchased frequently
and with minimum effort.
Horizontal markets refer to those markets in which goods are purchased by all types of
firms in many different industries. Buyers of organizational goods are reasonably well
informed. Heavy reliance is often placed on price, quality control, and reliability of supply
source.

Blooms: Understand
29. Lystronia Inc. is a world-renowned manufacturer of culture media products. The company
produces and supplies prepared media to laboratories all over the world for growing and
testing microorganisms. Since Lystronia's customers are restricted to the healthcare
industry, Lystronia typically operates in a _____.
A. parallel market
B. vertical market
D. high-demand market
Lystronia operates in a vertical market because it has a limited number of buyers. A
vertical market is a market that is (1) narrow, because customers are restricted to a few
industries; and (2) deep, in that a large percentage of the producers in the market use the
product.

Blooms: Apply
6-43
Difficulty: 3 Hard
30. RytWell Inc. is a company that manufactures pens. It distributes pens to various industries
in the United States of America. Because its products are used by almost every company
in the market, RytWell Inc. most likely operates in a _____.
A. contestable market
B. vertical market
D. gray market
RytWell Inc. most likely operates in a horizontal market. Some products, such as desktop
computers, have a horizontal market, which means that the goods are purchased by all
types of firms in many different industries.

Blooms: Apply
Difficulty: 3 Hard
31. From the standpoint of a marketing manager, product classification is useful because it:
A. helps to understand that convenience goods generally require targeted promotion.

B. provides the knowledge that shopping goods typically need broadcast promotion.
C. helps in distinguishing the scope of vertical markets and horizontal markets.
D. assists in providing guidelines for developing an appropriate marketing mix.
From the standpoint of the marketing manager, product classification is useful to the
extent that it assists in providing guidelines for developing an appropriate marketing mix.
For example, convenience goods generally require broadcast promotion and long channels
of distribution as opposed to shopping goods, which generally require more targeted
promotion and somewhat shorter channels of distribution.

Blooms: Understand
6-44
32. _____ can be defined as the degree of excellence or superiority that an organization's
product possesses.
A. Quality
B. Width
C. Depth
D. Reach
Quality can be defined as the degree of excellence or superiority that an organization's
product possesses. Quality can encompass both the tangible and intangible aspects of a
firm's products or services.

Blooms: Remember
Difficulty: 1 Easy
33. Which of the following statements is true of product quality?
A. Quality encompasses only the tangible aspects of a firm's products or services.

B. The customer is the key perceiver of quality.
C. Quality is only evaluated from the perspective of the manufacturer.
D. Companies rarely formalize an interest in providing quality products.
Although quality can be evaluated from many perspectives, the customer is the key
perceiver of quality because his or her purchase decision determines the success of the
organization's product or service and often the fate of the organization itself.

Blooms: Understand
6-45
34. _____ is an organizationwide commitment to satisfying customers by continuously
improving every business process involved in delivering products or services.
A. Capability Maturity Model Integration (CMMI)

B. Total quality management (TQM) program
C. Just-in-case (JIC) manufacturing
D. Toyota Production System (TPS)
Many organizations have formalized their interest in providing quality products by
undertaking total-quality management (TQM) programs. TQM is an organizationwide
commitment to satisfying customers by continuously improving every business process
involved in delivering products or services.

Blooms: Remember
Difficulty: 1 Easy
35. Remus Co., a pharmaceutical company that is involved in drug discovery and development,
is ISO 9000 certified. The ISO 9000 certification indicates that Remus:
A. provides subsidized products in a relatively horizontal market.

B. meets standardized levels of product quality.
C. follows a traditional marketing approach focused primarily on product features.
D. competes in a purely vertical market.
The ISO 9000 quality system of standards is a standardized approach for evaluating a
supplier's quality system and can be applied to virtually any business. The emphasis on
quality has risen to such a level that over 70 countries have adopted the ISO 9000 quality
system of standards.

Blooms: Apply
Difficulty: 3 Hard
6-46
36. In the context of product management, value refers to the:
A. tangible aspects of a firm's product or service.

B. quality of a product and not its price.
C. amount of money spent in producing a product.
D. returns a customer gets in exchange for what he or she gives.
Value can be defined as what a customer gets in exchange for what he or she gives. In
other words, a customer, in most cases, receives a product in exchange for having paid the
supplier for the product.

Blooms: Remember
Difficulty: 1 Easy
37. Which of the following statements is true about product quality and value?
A. The terms "quality" and "value" are synonymous in the context of product
management.
B. Quality encompasses the tangible aspects of a product, while value encompasses the
intangible aspects of a product.
C. The level of quality and value a firm's products have cannot be measured against
external standards.
D. The value of a product encompasses not only the quality of the product but also its
price.
Value encompasses not only quality but also price. Value can be defined as what the
customer gets in exchange for what the customer gives.

Blooms: Understand
6-47
38. The full set of products offered for sale by an organization is called a firm's _____.
A. product family
B. product mix
C. product line
D. product category
A firm's product mix is the full set of products offered for sale by the organization. A
product mix may consist of several product lines, or groups of products that share
common characteristics, distribution channels, customers, or uses.

Blooms: Remember
Difficulty: 1 Easy
39. A _____ refers to a group of products that share common characteristics, distribution
channels, customers, or uses.
A. product variant
B. product portfolio
C. product line
D. product matrix
A product line refers to a group of products that share common characteristics,
distribution channels, customers, or uses. A firm's product mix is the full set of products
offered for sale by the organization. A product mix may consist of several product lines.

Blooms: Remember
Difficulty: 1 Easy
6-48
40. The width of a product mix refers to the:
A. number of product lines handled by the organization.

B. total number of items or products in the company's product mix.
C. average number of products in each line.
D. extent to which one product line differs from another.
A firm's product mix is described by its width and depth. The width of the product mix
refers to the number of product lines handled by the organization.

Blooms: Remember
Difficulty: 1 Easy
41. The depth of a product mix refers to the:
A. average number of products in each product line.

B. degree of similarity between product lines.
C. number of product lines handled by the organization.
D. total number of products or items in the company's product mix.
A firm's product mix is described by its width and depth. The depth of a product mix refers
to the average number of products in each line.

Blooms: Remember
Difficulty: 1 Easy
6-49
42. Alan visits a shopping mall in his neighborhood. He recollects his lessons from a marketing
class and attempts to relate them to his observations at the mall. Which of Alan's
interpretations is most accurate?
A. Alan believes that Tie World, a shop that exclusively sells ties, has a wide product mix.
B. Alan believes that The Corner Store, a shop that sells everything from baby rattles and
potting soil to contact lens cleaning solution, has a narrow product mix and deep
product lines.
C. Alan believes that The Giga-store, a shop that sells hundreds of self-help books,
novels, and religious-themed music CDs, has a narrow and shallow product mix.
D. Alan believes that Ming's Corner, a shop that sells 36 different kinds of muffins, has a
narrow and deep product mix.
Since the depth of a product mix is assessed by the average number of products in each
product line, Ming's Corner is characterized by a deep product mix. A product mix may
consist of several product lines or groups of products that share common characteristics,
distribution channels, customers or uses. The width of the product mix refers to the
number of product lines handled by the organization.

Blooms: Apply
Difficulty: 3 Hard
43. Which of the following is the legal term for a brand?
A. Generic mark
B. Trade dress
C. Trademark
D. Watermark
A brand is a name, term, design, symbol, or any other feature that identifies one seller's
good or service as distinct from those of other sellers. The legal term for brand is
trademark.

Blooms: Remember
6-50
Difficulty: 1 Easy
44. Which of the following serves as a unique identifier and is perhaps the single most
important element on the package of a product?
A. The seal
B. The brand name
C. The price
D. The trade dress
The brand name is perhaps the single most important element on the package, serving as
a unique identifier. A good brand name can evoke feelings of trust, confidence, security,
strength, and many other desirable characteristics.

Blooms: Remember
Difficulty: 1 Easy
45. The use of a brand name to facilitate entry into a new market segment is called _____.
B. line extension
C. myopic marketing
D. multibranding
Many companies make use of manufacturer branding strategies in carrying out market and
product development strategies. The line extension approach uses a brand name to
facilitate entry into a new market segment.

Blooms: Remember
Difficulty: 1 Easy
6-51
46. In _____, a current brand name is used to enter a completely different product class.
A. line extension
B. brand extension
C. brand dilution
D. generic branding
An alternative to line extension is brand extension. In brand extension, a current brand
name is used to enter a completely different product class.

Blooms: Remember
Difficulty: 1 Easy
47. Duncan Corp. introduces four modified versions of its popular brand of Maxims morning
cereal. The four new variants of cereal include "Maxims Corn Flakes," "Maxims Raisin
Bran," "Maxims Honey Clusters," and "Maxims Brown Sugar and Oats." In doing so,
Duncan has used a _____ approach with its Maxims cereal brand.
A. line extension
B. multibranding
C. brand extension
D. franchise extension
Duncan has used a line extension approach with its Maxims cereal brand. The line
extension approach uses a brand name to facilitate entry into a new market segment.

Blooms: Apply
Difficulty: 3 Hard
6-52
48. Whizzle Corp. first introduced a line of toothpastes under the Whizzle brand name. A few
years later, it introduced two different products, a mouthwash and a chewing gum, using
the same brand name. Whizzle is using a _____ strategy to market its products.
A. line extension
B. multibranding
C. brand extension
D. joint branding
Whizzle is using a brand extension strategy to market its products. In brand extension, a
current brand name is used to enter a completely different product class.

Blooms: Apply
Difficulty: 3 Hard
49. _____ is a form of branding, whereby a company attaches the corporate name to a product
to enter either a new market segment or a different product class.
A. Multibranding
B. Franchise extension
C. Generic branding
D. Line extension
Franchise extension or family branding is a strategy in which a company attaches the
corporate name to a product to enter either a new market segment or a different product
class.

Blooms: Remember
Difficulty: 1 Easy
6-53
50. Sapphire Corp., a manufacturer of perfumes, decides to use its well-established corporate
image to enter a new product class. It does so by attaching the Sapphire corporate name
to its new line of clothing and accessories. From the information provided in the scenario,
it is evident that Sapphire is using a _____ strategy to market its products.
A. multibranding
B. line extension
C. family branding
D. cobranding
Sapphire is using a family branding strategy to market its products. Franchise extension or
family branding is a strategy whereby a company attaches the corporate name to a
product to enter either a new market segment or a different product class.

Blooms: Apply
Difficulty: 3 Hard
51. Which of the following does a multibranding strategy involve?
A. Companies marketing their brand jointly with that of their competitors

B. Companies assigning different brand names to each of their products
C. Companies attaching their corporate name to a product to enter a different product
class
D. Companies assigning different brand names to the same products in different outlets
Multibranding strategy is a strategy in which companies assign different brand names to
each product. By doing so, the firm makes a conscious decision to allow the product to
succeed or fail on its own merits.

Blooms: Understand
6-54
52. In the context of brand and brand equity, cobranding is the strategy in which a company:
A. integrates two or more branded products.

B. attaches the corporate name to a product to enter either a new market segment or a
different product class.
C. assigns different brand names to each product.
D. uses a brand name to facilitate entry into a new market segment.
A cobranding (also known as joint or dual branding) strategy is one in which two or more
branded products are integrated. The logic behind this strategy is that if one brand name
on a product gives a certain signal of quality, then the presence of a second brand name
on the product should result in a signal that is at least as powerful as, if not more powerful
than, the signal in the case of the single brand name.

Blooms: Remember
Difficulty: 1 Easy
53. Soffia Inc. manufactures a moisturizing soap with anti-ultraviolet properties, which is sold
under the brand name DewMist. The company also manufactures Safechoice, a non-
abrasive, antibacterial brand of soap, which is a different brand. Which of the following
strategies has Soffia used in this scenario?
A. Multibranding strategy
B. Dual branding strategy
C. Cobranding strategy
D. Family branding strategy
Multibranding strategy is a strategy in which companies assign different brand names to
each product. By doing so, the firm makes a conscious decision to allow the product to
succeed or fail on its own merits.

Blooms: Apply
Difficulty: 3 Hard
6-55
54. A producer of alcoholic beverages produces four different brands of beer: BlackStar,
BlueStar, Grandeur, and Holmes. BlackStar is a standard brew, while BlueStar has a low
alcohol content. Grandeur is low in calories, and Holmes has a high alcohol content. In this
case, the manufacturer uses different brand names for each of its products to:
A. associate the image of one product with that of another.

B. increase consumer brand awareness.
C. enter a new product class.
D. target specific market segments more efficiently.
In this case, the manufacturer uses different brand names for each of its products to
target specific market segments more efficiently. Multibranding is a strategy in which
companies may choose to assign different brand names to each product. One of the major
advantages of using multiple brand names is that the product(s) can be targeted at a
specific market segment.

Blooms: Apply
Difficulty: 3 Hard
55. One of the advantages of using _____ is that a firm can distance products from other
offerings it markets.
A. dual branding
B. multibranding
C. franchise extension
D. brand extension
In a multibranding strategy, a company decides to assign a different brand name to each
of its products. One of the major advantages of using multiple brand names is that the firm
can distance products from other offerings it markets.

Blooms: Remember
Difficulty: 1 Easy
6-56
56. In the context of brand and brand equity, which of the following is true of the
multibranding strategy?
A. The image of one product (or set of products) is associated with other products a
company markets.
B. A firm should not distance products from other offerings it markets.
C. The product(s) can be targeted at a specific market segment.
D. Should the product(s) fail, the probability of failure impacting on other company
products is maximized.
Multibranding is a strategy that assigns different brand names to each product. Major
advantages of using multiple brand names are that (1) the firm can distance products from
other offerings it markets; (2) the image of one product (or set of products) is not
associated with other products the company markets; (3) the product(s) can be targeted
at a specific market segment; and (4) should the product(s) fail, the probability of failure
impacting on other company products is minimized.

Blooms: Remember
Difficulty: 1 Easy
57. Spending significant amounts of money to familiarize customers with new brands is a
disadvantage primarily associated with _____.
B. multibranding
C. dual branding
D. line extension
The major disadvantage of multibranding is that because new names are assigned to each
product, there is no consumer brand awareness and significant amounts of money must
be spent familiarizing customers with new brands.
6-57
Blooms: Remember
Difficulty: 1 Easy
58. In the context of branding, brand equity:
A. is the set of assets or liabilities linked to a brand that adds or subtracts value.
B. is not determined by the consumer.
C. can only be possessed by consumer goods and not by organizational goods.
D. is independent of the results of the marketplace's relationship with a brand.
Brand equity can be viewed as the set of assets or liabilities linked to a brand that add or
subtract value. The value of these assets is dependent upon the consequences or results
of the marketplace's relationship with a brand.

Blooms: Remember
Difficulty: 1 Easy
59. Which of the following is true of brand equity?
A. Organizational products cannot have brand equity.

B. Brand equity is a company's evaluation of its products and sales figures.
C. Advertising does not have any effect on brand equity.
D. Brand equity is determined by the consumer.
Brand equity can be viewed as the set of assets (or liabilities) linked to a brand that adds
(or subtracts) value. Brand equity is determined by a consumer and is the culmination of a
consumer's assessment of the product, the company that manufactures and markets the
product, and all other variables that impact on the product between manufacture and
consumer consumption.

Blooms: Understand
6-58
60. _____ is the culmination of a consumer's assessment of the product, the company that
manufactures and markets the product, and all other variables that affect the product
between manufacture and consumer consumption.
A. Brand positioning
B. Brand equity
C. Brand dilution
D. Brand extension
Brand equity is the culmination of a consumer's assessment of the product, the company
that manufactures and markets the product, and all other variables that impact on the
product between manufacture and consumer consumption.

Blooms: Remember
Difficulty: 1 Easy
61. Identify a true statement about the brand equity of organizational products.
A. The value of a brand's assets is independent of the consequences or results of the

marketplace's relationship with the brand.
B. Loyalty (or disloyalty) to a brand tends to be of a more local nature, focusing on a
limited number of firm's product lines.
C. Because brand loyalty exists, attempts to position new products in a manner differing
from existing products are easy.
D. Attempts to establish or change brand image must take into account distributor image.
Brand equity can be viewed as the set of assets (or liabilities) linked to the brand that add
(or subtract) value. Loyalty to organizational products encompasses not only the firm and
its products but also the distribution channel members employed to distribute the product.
Therefore, attempts to establish or change brand image must also take into account
distributor image.

Blooms: Understand
6-59
62. Products that are equivalent to national brands but are priced much lower are called
_____.
A. prestige brands
B. private label brands
C. generic product brands
D. dual brands
Private label brands are being marketed as value brands, products that are equivalent to
national brands but are priced much lower. Private brands are rapidly growing in
popularity.

Blooms: Remember
Difficulty: 1 Easy
63. _____ is a method of differentiating a relatively homogeneous product.
A. Mass marketing
B. Product line extension
C. Distinctive packaging
D. Family branding
Distinctive or unique packaging is a method of differentiating a relatively homogeneous
product. To illustrate, shelf-stable microwave dinners, pumps rather than tubes of
toothpaste or bars of soap, and different sizes and designs of tissue packages are
attempts to differentiate a product through packaging changes and to satisfy consumer
needs at the same time.

Blooms: Remember
Difficulty: 1 Easy
6-60
64. Fresh-Cola Inc. is a manufacturer of carbonated drinks that packages its products in
bottles, cans, and 12-pack cartons. A standard 12-pack carton of these drinks can neither
fit conveniently in the standard-size refrigerator shelf nor can the drinks be easily
dispensed from the carton. Fresh-Cola introduces a new design called "the refrigerator
pack." The refrigerator pack is designed to fit easily on a standard refrigerator shelf and
dispenses one can at a time. With its new refrigerator pack, Fresh-Cola:
A. has failed to consider its consumers' needs in making its packaging decisions.
B. is using packaging as a part of its product differentiation strategy.
C. is using a brand extension strategy for market development.
D. is implementing a cost leadership strategy in the market for carbonated drinks.
With its new refrigerator pack, Fresh-Cola is using packaging as part of its product
differentiation strategy. Distinctive or unique packaging is one method of differentiating a
relatively homogeneous product. Consumer-friendly products are attempts to differentiate
a product through packaging changes and to satisfy consumer needs at the same time.

Blooms: Apply
Difficulty: 3 Hard
6-61
65. Identify a true statement about the different stages of a product life cycle.
A. Profits increase and are positively correlated with sales during the growth stage of the
product life cycle.
B. The production and marketing costs are generally low during the introduction phase of
the product life cycle.
C. A seller makes price concessions, increases product quality, or expands outlays on
advertising and sales promotion during the growth stage.
D. As a product matures, profits for an initiating firm keep pace with sales.
Profits increase and are positively correlated with sales during the growth stage as the
market begins trying and adopting the product. As a product matures, profits for an
initiating firm do not keep pace with sales because of competition.
Refer To: Table. 6.7

Blooms: Understand
Topic: Product Life Cycle
66. One of the basic objectives of the maturity stage of a product's life cycle is to:
A. establish a market for the product type.

B. persuade early adopters to buy the product.
C. develop a high degree of brand preference among consumers.
D. seek growth by luring customers from competitors.
One of the basic objectives of the maturity stage of a product's life cycle is to seek growth
by luring customers from competitors.

Blooms: Understand
6-62
67. In which of the following stages of the product life cycle is promotion efforts minimal?
A. The introduction stage

B. The decline stage
C. The maturity stage
D. The growth stage
Promotion efforts are kept to a minimum in the decline stage of the product life cycle in
order to reduce costs.

Blooms: Remember
Difficulty: 1 Easy
68. _____ are accepted and popular product styles that go through a repetitive cycle of
popularity.
A. Fashions
B. Impulse goods
C. Specialty products
D. Fads
Fashions are accepted and popular product styles. Their life cycle involves a
distinctiveness stage in which trendsetters adopt the style, followed by an emulation stage
in which more customers purchase the style to be the trendsetters.

Blooms: Remember
Difficulty: 1 Easy
6-63
69. A fad can be best described as a(n):
A. accepted and popular product that goes through repetitive cycles of popularity.
B. product that has a lengthy period of popularity, which gives competitors the chance to
capitalize on the product.
C. product that experiences an intense but brief period of popularity.
D. specialty product that has retained its popularity for a long time.
Fads are products that experience an intense but brief period of popularity. Their life cycle
resembles the basic product life cycle but in a very compressed form.

Blooms: Remember
Difficulty: 1 Easy
70. In the context of product purchasing, the diffusion of innovation is:
A. used to describe an audit task.

B. the spread of a product through the population.
C. applied to products at the introductory stage of the product life cycle.
D. used to describe the ability of an organization to create entirely new products.
The spread of a product through the population is known as the diffusion of innovation.
Five adopter categories, which include innovators, early adopters, early majority, late
majority, and laggards, describe the spread of the product through its life.

Blooms: Understand
6-64
71. In the context of the diffusion of innovation, _____ refer to buyers who are the first to
purchase a new product.
A. innovators
B. early adopters
C. laggards
D. late adopters
The spread of a product through the population is known as the diffusion of innovation.
Innovators are those who are the first to buy a new product.

Blooms: Remember
Difficulty: 1 Easy
72. Which of the following is a characteristic of early adopters?
A. They are extremely cautious and skeptical about new ideas.

B. They are generally respected social leaders.
C. They are usually below average in education.
D. They do not exert any influence on the early majority.
If the experience of innovators is favorable, early adopters begin to buy. These buyers,
who are respected social leaders and above average in education, influence the next
group. Influenced by what early adopters have, the rest of the market begins to get
interested in the product.

Blooms: Understand
6-65
73. According to the process of product adoption and diffusion, which of the following
adoptive categories first begins to buy a product if the experience of innovators has been
favorable?
A. Laggards
B. Early majority
C. Late majority
D. Early adopters
If the experience of innovators is favorable, early adopters begin to buy. Influenced by
what early adopters have, the rest of the market begins to get interested in the product.

Blooms: Remember
Difficulty: 1 Easy
74. In the context of the adopter categories of product diffusion, the biggest category of
buyers is divided into two groups called the:
A. innovators and the laggards.

B. laggards and the early adopters.
C. early majority and the late majority.
D. early majority and the innovators.
The spread of a product through the population is known as the diffusion of innovation. In
the context of the adopter categories of product diffusion, the biggest category of buyers
is divided into groups called the early majority and the late majority.

Blooms: Remember
Difficulty: 1 Easy
6-66
75. Which of the following adoptive categories involved in the diffusion of innovation is the
most reluctant to make changes and is comfortable with traditional products?
A. Early majority
B. Laggards
C. Early adopters
D. Innovators
Laggards are reluctant to make changes and are comfortable with traditional products.
They also have a fear of debt but may eventually purchase a well-established brand.

Blooms: Remember
Difficulty: 1 Easy
76. With regard to the adopter categories of the diffusion of innovation, laggards are:
A. fearful of debt but may eventually purchase a well-established brand.

B. the first to purchase a product through early-bird promotional offers.
C. venturesome and are willing to take risks.
D. most likely to begin buying new goods if the experience of innovators is favorable.
Laggards are reluctant to make changes and are comfortable with traditional products.
They also have a fear of debt but may eventually purchase a well-established brand.

Blooms: Understand
6-67
77. Which of the following is a marketing management technique in which a company's
current product offerings are reviewed to ascertain whether each product should be
continued as is, improved, modified, or deleted?
A. Product generation
B. Product audit
C. Product definition
D. Product creation
The product audit is a marketing management technique whereby the company's current
product offerings are reviewed to ascertain whether each product should be continued as
is, improved, modified, or deleted. The audit is a task that should be carried out at regular
intervals as a matter of policy.

Blooms: Remember
Difficulty: 1 Easy
Topic: The Product Audit
78. Identify the primary reason for conducting a product audit.
A. To develop a marketing plan for new products

B. To detect sick products and bury them
C. To earn the estimated profits without introducing new products
D. To implement cost-cutting strategies without altering the product mix
One of the main purposes of a product audit is to detect sick products and then bury them.
Rather than let the retailer or distributor decide which products should remain,
organizations themselves should take the lead in developing criteria for deciding which
products should stay and which should be deleted.

Blooms: Understand
6-68
79. When contemplating a product deletion, a firm studies customer migration patterns to
determine:
A. the profit contribution of the product to the firm.

B. whether the product has outgrown its usefulness.
C. whether the product has reached a level of maturity and saturation in the market.
D. whether customers of the product would switch to other substitute products marketed
by the same firm.
Organizations should take the lead in developing criteria for deciding which products
should stay and which should be deleted. Customer migration patterns should be studied
to determine whether customers of the product would switch to other substitute products
marketed by the same firm.

Blooms: Understand
80. Which of the following statements about product deletion is true?
A. Product deletions are necessary because the number of new products introduced
keeps decreasing each year.
B. The deletion plan should keep consumers supplied with replacement parts and repair
service.
C. The deletion plan is not required to provide for clearing out of stock in question.
D. The deletion plan should allow the retailer or distributor to decide which products
should be deleted.
One of the main purposes of a product audit is to detect sick products and then bury them.
A deletion plan involves keeping consumers supplied with replacement parts and repair
service. The deletion plan should provide for clearing out of stock in question.

Blooms: Understand
6-69
81. With regard to product improvement, _____ refer mainly to product features, design,
package, and so forth.
B. attributes
C. extensions
D. fads
Altering a product means changing one or more of its attributes or marketing dimensions.
Attributes refer mainly to product features, design, package, and so forth.

Blooms: Remember
Difficulty: 1 Easy
82. Which of the following is an attribute that can be changed to alter a product?
A. Product price
C. Distribution channel
D. Product packaging

Blooms: Remember
Difficulty: 1 Easy
6-70
83. Which of the following scenarios shows how a product is improved by modifying a product
attribute?
A. An aerated drinks manufacturer reduces the price of one of its drinks due to low sales.
B. A large spa in Reno begins advertising its services on the Internet.
C. A dairy products manufacturer changes the promotion strategy of its line of processed
cheese.
D. A company that sells packaged seafood adds an eco-friendly label to its packaging.
By introducing an eco-friendly label, the company is modifying its packaging and changing
its attributes. Attributes refer mainly to product features, design, package, and so forth.

Blooms: Apply
Difficulty: 3 Hard
84. A company changes the packaging of one of its existing products to make it more
attractive to consumers. The company has improved its product by modifying its _____.
B. attributes
C. channels of distribution
D. promotion strategy

Blooms: Understand
6-71
85. Price, promotion strategy, and channels of distribution are examples of _____.
B. marketing trends
C. product features
D. product attributes
Altering the product means changing one or more of its attributes or marketing
dimensions. Marketing dimensions refer to such things as price, promotion strategy, and
channels of distribution.

Blooms: Remember
Difficulty: 1 Easy
86. Which of the following scenarios shows how a product was improved by modifying its
marketing dimensions?
A. The Caribbean cruise was improved by adding two more stops in Mexico.
B. The 800-page history of chiropody was modified by including an extensive index.
C. Liz Claiborne increased the number of retail outlets that carries its sportswear.
D. The Dillard House restaurant added three new vegetarian dishes to its menu.
Marketing dimensions refer to such things as price, promotion strategy, and channels of
distribution. Since Liz Claiborne expanded its operations to more retail outlets, it has
modified the marketing dimension that pertains to its channels of distribution.

Blooms: Apply
Difficulty: 3 Hard
6-72
87. Which of the following pertains to the marketing dimensions of a product?
A. Product feature
C. Design
D. Packaging
Marketing dimensions refer to such things as price, promotion strategy, and channels of
distribution. Attributes refer mainly to product features, design, package, and so forth.

Blooms: Remember
Difficulty: 1 Easy
88. The Bedford Hotel is an industry leader in the hospitality and customer service sector.
After Templeton Hotel measured its services against Bedford Hotel, it instituted a
customer service campaign called "proactive hospitality." Templeton managers examine
monthly reports for problem areas, and the Bedford model is used to determine ways to
address and resolve these issues. Which of the following methods is used by Templeton to
identify improvement areas?
A. Test marketing
B. Benchmarking
C. Niche marketing
D. Market segmenting
Templeton is using benchmarking to identify new improvement areas. Benchmarking is the
continuous process of measuring products, services, and practices against those of the
toughest competitors or companies renowned as leaders. It is an effective tool
organizations use to improve on existing products, activities, functions, or processes.

Blooms: Apply
Difficulty: 3 Hard
6-73
89. Motokraft Inc. is a new company that manufactures automobiles. The company compares
its production rate, distribution networks, and quality of customer service with Vestla
Corp., the market leader in the automobile industry. Identify the method that Motokraft
Inc. uses to achieve strong performance.
A. Multibranding
B. Vertical marketing
C. Benchmarking
D. Horizontal marketing
Motokraft Inc. uses the method of benchmarking to achieve strong performance in the
automobile industry. Benchmarking is the continuous process of measuring products,
services, and practices against those of the toughest competitors or companies renowned
as leaders.

Blooms: Apply
Difficulty: 3 Hard
90. Which of the following statements about benchmarking is true?
A. It represents a strategy used to enter a new market.

B. It involves the creation of innovative products.
C. It increases delivery lead times.
D. It improves customer order-processing activities.
Benchmarking can assist companies in many product improvement efforts, including (1)
boosting product quality, (2) developing more user-friendly products, (3) improving
customer order-processing activities, and (4) shortening delivery lead times.

Blooms: Understand
6-74
91. In a _____, one person is responsible for overseeing an entire product line with all of the
functional areas of marketing such as research, advertising, sales promotion, sales, and
product planning.
A. brand-manager system
B. marketing-manager system
C. functional departments system
D. product-management system
In a marketing-manager system, one person is responsible for overseeing an entire
product line with all of the functional areas of marketing such as research, advertising,
sales promotion, sales, and product planning. This type of system is popular in
organizations with a line or lines of similar products or one dominant product line.

Blooms: Remember
Difficulty: 1 Easy
Topic: Organizing for Product Management
92. Which of the following statements is true of a brand-manager system?
A. Brand managers have difficulties in their line of work because they do not have
authority commensurate with their responsibilities.
B. A brand-manager system is superior to a market-manager system on many levels.
C. Brand managers are responsible for overseeing all brands within a particular line.
D. A brand-manager system is popular in organizations with a line or lines of similar
products or one dominant product line.
In a brand-manager system, a manager focuses on a single product or a very small group
of new and existing products. Brand managers often have difficulty because they do not
have authority commensurate with their responsibilities.

Blooms: Understand
6-75
93. In a _____, a manager is responsible for everything from marketing research and package
design to advertising for a single product or a very small group of new and existing
products.
A. marketing-manager system
B. category management system
C. traditional marketing system
D. brand-manager system
In a brand-manager system, a manager focuses on a single product or a very small group
of new and existing products. Typically, this person is responsible for everything from
marketing research and package design to advertising.

Blooms: Remember
Difficulty: 1 Easy
94. Which of the following statements is true of a venture team?
A. It is a cross-functional team responsible for all of the tasks involved in the

development of a new product.
B. It is a team that is only responsible for processing the venture capital for a business
idea of a firm's new product.
C. It is a cross-functional team that manages and monitors the existing products of a firm.
D. It is a team whose primary duty involves conducting product audits to identify sick
products and delete them.
A venture team is a cross-functional team responsible for all of the tasks involved in the
development of a new product. When the new product is launched, the team usually turns
over responsibility for managing the product to a brand manager or product manager or it
may manage the new product as a separate business.

Blooms: Understand
6-76
95. Which of the following is a limitation of a brand-manager system?
A. Managers following this system often pay inadequate attention to new products.
B. This system can be used only in organizations that have one dominant product line.
C. Managers following this system are more concerned with the profitability of all of the
organization's brands than with their own brand's profitability.
D. Managers following this system believe in category management rather than product
management.
First, brand managers often have difficulty with a brand-manager system because they do
not have authority commensurate with their responsibilities. Second, they often pay
inadequate attention to new products. Finally, they are often more concerned with their
own brand's profitability than with the profitability of all of their organization's brands.

Blooms: Apply
Difficulty: 3 Hard
6-77
96. Lauren is a brand manager at a company that manufactures toothpaste. She wants to
increase the sales of an existing brand of toothpaste. To do so, she calls for a meeting
with a team comprising of members from the administrative department, the human
resource department, and the finance department. All of these members work together to
come up with ways to improve the company's toothpaste brand positioning. Such a team is
an example of a _____.
A. departmental team
B. marketing-management system
C. cross-functional team
D. category-management system
Organizations need the contributions of all functions and therefore require their
cooperation. Cross-functional teams operate independently of the organization's
functional departments but include members from each function. A team might include a
member from engineering, marketing, finance, service, and designers. Some organizations
even include important outsiders.

Blooms: Apply
Difficulty: 3 Hard
6-78
Test Bank for A Preface to Marketing Management 15th by Peter
97. Which of the following is true of a global virtual team?
A. It is a cross-functional team that operates across time and geographic distance.

B. Its members primarily communicate with each other on a one-to-one basis.
C. It is never faced with the challenge of building and maintaining trust as it works toward
accomplishing its objectives.
D. It is unlikely to transcend organizational boundaries and cultures.
A global virtual team is a cross-functional team that operates across time, geographic
distance, organizational boundaries, and cultures, whose members communicate mainly
through electronic technology (e.g., smartphone, laptop, texting, e-mail, video
conferencing, etc.).

Blooms: Understand
6-79
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Product and Brand Strategy

Multiple Choice Questions

1. Which of the following best defines tangible products?

A. They refer to those goods that cannot be perceived by touch.

A. fail to focus on their company's needs

7. Which of the following is a basic assumption underlying product classification schemes?

A. agricultural products and raw materials

9. Lumber, coal, and iron ore are examples of _____.

A. These products have a high value per unit.

A. An electric generator purchased by an individual to use in the event of a power failure

15. Which of the following statements regarding organizational goods is true?

16. Identify a true statement about organizational goods.

A. They are ordered according to the user's specifications.

19. _____ fall under the category of convenience goods.

24. The demand for organizational goods is a(n) _____.

A. the existing customer base is more likely to switch to substitutes.

27. A vertical market is a market in which _____.

A. customers are restricted to a few industries

28. Which of the following is true of horizontal markets?

A. helps to understand that convenience goods generally require targeted promotion.

33. Which of the following statements is true of product quality?

A. Quality encompasses only the tangible aspects of a firm's products or services.

34. _____ is an organizationwide commitment to satisfying customers by continuously improving

A. Capability Maturity Model Integration (CMMI)

A. provides subsidized products in a relatively horizontal market.

A. tangible aspects of a firm's product or service.

A. number of product lines handled by the organization.

41. The depth of a product mix refers to the:

A. average number of products in each product line.

51. Which of the following does a multibranding strategy involve?

A. Companies marketing their brand jointly with that of their competitors

A. integrates two or more branded products.

A. associate the image of one product with that of another.

58. In the context of branding, brand equity:

59. Which of the following is true of brand equity?

A. Organizational products cannot have brand equity.

A. The value of a brand's assets is independent of the consequences or results of the

63. _____ is a method of differentiating a relatively homogeneous product.

A. establish a market for the product type.

A. The introduction stage

69. A fad can be best described as a(n):

70. In the context of product purchasing, the diffusion of innovation is:

A. used to describe an audit task.

72. Which of the following is a characteristic of early adopters?

A. They are extremely cautious and skeptical about new ideas.

A. innovators and the laggards.

A. fearful of debt but may eventually purchase a well-established brand.

78. Identify the primary reason for conducting a product audit.

A. To develop a marketing plan for new products

A. the profit contribution of the product to the firm.

80. Which of the following statements about product deletion is true?

87. Which of the following pertains to the marketing dimensions of a product?

90. Which of the following statements about benchmarking is true?

A. It represents a strategy used to enter a new market.