126) Products and services fall into two broad classes based on the types of consumers that use them. Name these two broad classes and describe how they are different from each other.
Answer: The two broad classes are consumer products and industrial products. Consumer products and services-those bought by final consumers-are usually classified according to consumer shopping habits. Consumer products include convenience products, shopping products, specialty products, and unsought products. Industrial products are distinguished from consumer products by the purpose for which they were purchased. Industrial products are those that are purchased for further processing or for use in conducting a business. These products include the three broad categories of materials and parts, capital items, and supplies and services.
Diff: 2 Page Ref: 226-227
AACSB: Reflective Thinking Skills
Skill: Critical Thinking
Objective: 8-1
127) Name and describe three decisions that companies make regarding their individual products and services.
Answer: Decisions to be made in the development and marketing of individual products and services include 1) product attributes, 2) branding, 3) packaging, 4) labeling, and 5) product support services. Product attribute decisions involve product quality, features, and style and design. Branding decisions include selecting a brand name and developing a brand strategy. Packaging involves designing and producing a product's container; packaging provides many key benefits, such as protection, economy, convenience, and promotion. Labeling identifies the product and may describe and promote the product and brand. Companies must also make a decision about product support services, which may be a minor or major part of a market offering.
Diff: 2 Page Ref: 229-233
AACSB: Reflective Thinking Skills
Skill: Application
Objective: 8-2
128) Describe the role of packaging.
Answer: Packaging involves designing and producing the container or wrapper for a product. Packaging contains and protects the product, but it also is used to attract customer attention, to describe the product, and to make the sale. Innovative packaging may give a company an edge over competitors.
Diff: 2 Page Ref: 232
AACSB: Reflective Thinking Skills
Skill: Application
Objective: 8-2
129) Explain the history of legal concerns about packaging and labels.
Answer: The Federal Trade Commission Act of 1914 held that false, misleading, or deceptive labels or packages constitute unfair competition. Labels can mislead consumers, fail to describe important ingredients, or fail to include needed safety warnings. To address this problem, several federal and state laws regulate labeling. The Fair Packaging and Labeling Act of 1966, for example, set mandatory labeling requirements, encouraged voluntary industry packaging standards, and allowed federal agencies to set packaging regulations in specific industries. The Nutritional Labeling and Education Act of 1990 requires sellers to provide detailed nutritional information on food products; the Food and Drug Administration regulates the use of health-related terms such as low-fat, light, and high-fiber.
Diff: 3 Page Ref: 233
AACSB: Ethical Understanding and Reasoning Abilities
Skill: Application
Objective: 8-2
130) Compare product mix width, length, consistency, and depth.
Answer: Product mix width refers to the number of different product lines the company carries; product length refers to the total number of products carried in a company's product lines. Consistency refers to how closely related the various product lines are in end use. Product depth refers to the number of versions offered of each product in the line.
Diff: 2 Page Ref: 235-236
AACSB: Reflective Thinking Skills
Skill: Critical Thinking
Objective: 8-2
131) Services are characterized by four key characteristics. Name and describe these four characteristics.
Answer: The four service characteristics are intangibility, inseparability, variability, and perishability. Services are intangible: they cannot be seen, tasted, felt, heard, or smelled before they are bought. Services are inseparable: they are produced and consumed at the same time and cannot be separated from their providers, whether the providers are people or machines. Services are variable: their quality may vary greatly, depending on who provides them and when, where, and how they are provided. Services are perishable: they cannot be stored for later sale or use.
Diff: 2 Page Ref: 236-238
AACSB: Reflective Thinking Skills
Skill: Application
Objective: 8-3
132) Good service companies focus attention on both customers and employees. Describe what the service-profit chain and internal marketing are, and how they differ from each other.
Answer: The service-profit chain links service firm profits with employee and customer satisfaction. The links in the service-profit chain are as follows: internal service quality leads to satisfied and productive employees, who create greater service value, which leads to satisfied and loyal customers, who create healthy service profits and growth. Internal marketing by a service firm refers to training and effectively motivating its customer-contact employees and all the supporting service people to work as a team to provide customer satisfaction. The service-profit chain deals with employees and customers. Internal marketing deals with training employees.
Diff: 3 Page Ref: 238, 240
AACSB: Reflective Thinking Skills
Skill: Synthesis
Objective: 8-3
133) How can service providers use a differentiated offer, delivery, and image to avoid competing solely on price?
Answer: A service offer can include innovative features that differentiate the company's offers from competitors. Service delivery can be differentiated by hiring and training more reliable customer-contact people, developing a superior physical environment in which the service is delivered, and designing a superior delivery process. Services can also be differentiated through symbols and branding, creating an image that sets a company's services apart from competitors'.
Diff: 3 Page Ref: 241-243
AACSB: Reflective Thinking Skills
Skill: Critical Thinking
Objective: 8-3
134) A manufacturer has four brand sponsorship options. Describe what they are.
Answer: A manufacturer can launch its own brand (manufacturer's brand or national brand). It can sell to resellers who give the product a private brand (or store brand). It can market licensed brands, using names or symbols created by other manufacturers, names of celebrities, or characters from popular movies or television. Finally, a manufacturer can join forces with another company to co-brand a product.
Diff: 2 Page Ref: 246-249
AACSB: Reflective Thinking Skills
Skill: Application
Objective: 8-4
135) A company has four choices when it comes to developing brands. Describe what they are.
Answer: The company can introduce line extensions, brand extensions, multibrands, or entirely new brands. A line extension involves extending a current brand name to new forms, colors, sizes, flavors, etc. in one of the company's existing product categories. In contrast, a brand extension extends a current brand name to a new or modified product in a new product category. Multibranding involves introducing several brands within the same category. Finally a company may decide that a new brand name is needed, particularly if the power of an existing brand name is declining or the company is entering a new product category.
Diff: 2 Page Ref: 250-251
AACSB: Reflective Thinking Skills
Skill: Application
Objective: 8-4
136) Give an example of the most basic level of product.
Answer: Examples are numerous. A salon owner, providing similar services of a day spa, may focus on "pampering yourself in total relaxation."
Diff: 2 Page Ref: 225
AACSB: Analytic Skills
Skill: Application
Objective: 8-1
137) Give an example of the second level of a product.
Answer: Examples will vary. A salon owner may market hair- and nail-care products and services, full- and partial-body massages, workout equipment and training, and social activities, and so forth.
Diff: 2 Page Ref: 225
AACSB: Analytic Skills
Skill: Application
Objective: 8-1
138) Give an example of an augmented product.
Answer: Examples will vary. An augmented product may include the customer of a salon having the option of having most of the services performed in the privacy and solitude of his or her home.
Diff: 2 Page Ref: 226
AACSB: Analytic Skills
Skill: Application
Objective: 8-1
139) Give three examples of convenience products.
Answer: Examples may include soft drinks, milk, and candy.
Diff: 2 Page Ref: 226
AACSB: Analytic Skills
Skill: Application
Objective: 8-1
140) Give three examples of shopping products.
Answer: Examples may include washing machines, lawn mowers, and furniture.
Diff: 2 Page Ref: 226
AACSB: Analytic Skills
Skill: Application
Objective: 8-1
141) Give three examples of specialty products.
Answer: Examples may include a Rolex watch, a Jaguar sports car, or an around-the-world cruise.
Diff: 2 Page Ref: 226
AACSB: Analytic Skills
Skill: Application
Objective: 8-1
142) What do industrial supplies and consumer convenience products have in common? How do they differ?
Answer: Industrial supplies are purchased for further use in conducting a business, while convenience products are purchased by final consumers for personal consumption; both types of products are usually purchased with a minimum of effort or comparison.
Diff: 3 Page Ref: 226, 228
AACSB: Reflective Thinking Skills
Skill: Synthesis
Objective: 8-1
143) How does a brand name add value to a product?
Answer: Quality and consistency can be identified through a brand; experience with or knowledge of another's experience with a brand helps a buyer know what features, benefits, and quality to expect from a product.
Diff: 2 Page Ref: 231-232
AACSB: Reflective Thinking Skills
Skill: Critical Thinking
Objective: 8-2
144) How might a flower shop engage in line stretching?
Answer: A flower shop may offer single-stem, fresh-cut flowers, sold individually, small arrangements, bouquets, or large ceremonial sprays; with line stretching, the flower shop will offer a wide array of products geared toward all types of flower buyers.
Diff: 3 Page Ref: 235
AACSB: Reflective Thinking Skills
Skill: Critical Thinking
Objective: 8-2
145) Why might a company pursue a strategy of less product line consistency?
Answer: A company might want to increase its business by building a reputation in several product fields.
Diff: 2 Page Ref: 236
AACSB: Reflective Thinking Skills
Skill: Critical Thinking
Objective: 8-2
146) How might measuring service quality be more difficult than measuring product quality?
Answer: Products are tangible; therefore, measuring quality across several dimensions-such as durability, functionality, and so on-may be easier or performed more consistently than when measuring service quality.
Diff: 3 Page Ref: 241-242
AACSB: Reflective Thinking Skills
Skill: Synthesis
Objective: 8-3
147) As a service provider, why might you perceive the buyer-seller relationship to be especially critical?
Answer: Customers' perceptions are established during the service encounter. At this time, based on these perceptions, customers can become loyal, long-term buyers. It is critical that service sellers establish sound relationships from the beginning.
Diff: 2 Page Ref: 240
AACSB: Reflective Thinking Skills
Skill: Critical Thinking
Objective: 8-3
148) Consumers form relationships with products via brands. What might happen that allows a consumer to move from merely recognizing a brand to preferring a brand?
Answer: A consumer has likely tried the brand at least once in order to prefer it over others; or, perhaps the consumer prefers a brand merely because he or she has been exposed to a catchy ad or promotional gimmick.
Diff: 2 Page Ref: 244
AACSB: Reflective Thinking Skills
Skill: Critical Thinking
Objective: 8-4
149) Why is it important for a brand promise to be simple and honest?
Answer: Consumers who purchase the product and believe it does not live up to the promise will develop a negative image of the brand; they will be less likely to become loyal customers.
Diff: 2 Page Ref: 245
AACSB: Reflective Thinking Skills
Skill: Critical Thinking
Objective: 8-4
150) Consider such brand names as A1 Steak Sauce, 409, A & D Ointment, A & W Root Beer, and Super 8. Why might such names with alphanumeric characters aid in brand name selection?
Answer: Such brands are easy to pronounce, easy to recognize, and easy to remember.
Diff: 2 Page Ref: 245-246
AACSB: Reflective Thinking Skills
Skill: Critical Thinking
Objective: 8-4
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