Chapter 8

CHAPTER 8
PRODUCT AND SERVICES STRATEGY
MULTIPLE CHOICE QUESTIONS
1. Anything that can be offered to a market for attention, acquisition, use, or

consumption that might satisfy a want or need is called a(n):
a. idea.
b. demand.
c. product.
d. service.
Answer: (c) Difficulty: (2) Page: 278
2. Broadly defined, products include all of the following EXCEPT:

a. money and payments.
b. services.
c. ideas.
d. persons.
Answer: (a) Difficulty: (3) Page: 278
3. A ______________________ is a form of product that consists of activities,

benefits, or satisfactions offered for sale that are essentially intangible and do not
result in the ownership of anything.
a. service
b. demand
c. need
d. physical object
4. All of the following are examples of services EXCEPT:

a. banking.
b. hotels and motels.
c. tax preparation.
d. computer software.
Answer: (d) Difficulty: (1) Page: 278
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5. Examples of pure tangible goods include all of the following EXCEPT:
a. soap.
b. tax preparation.
c. toothpaste.
d. salt.
Answer: (b) Difficulty: (1) Page: 278
6. Which of the following would be the best illustration of a pure service?

a. a water pick for cleaning teeth
b. a doctors exam
c. a waiter taking your order in a restaurant
d. flying on an airline
7. If a company has a hybrid offer, then its offer may be described as being one where
there is:
a. an equal amount of goods and services.
b. a tangible good with accompanying services.
c. a service with accompanying minor goods.
d. a clone service package.
8. A(n) _____________ occurs when a company intentionally uses services as the stage,
and goods as the props, to engage individual customers in a way that creates a
memorable event.
a. hybrid offer
b. core service
c. augmented or ancillary product
d. experience
Answer: (d) Difficulty: (2) Page: 278, Marketing at Work 8-1
9. The most basic level of a product is called the:

a. core product.
b. central product.
c. fundamental product.
d. augmented product.
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10. All of the following are considered to be characteristics of the actual product
category or feature EXCEPT:
a. quality level.
b. installation.
c. brand name.
d. design.
Answer: (b) Difficulty: (3) Page: 282, Figure 8-1
11. Actual products may have as many as five characteristics. All of the following could
be considered to be among these characteristics EXCEPT:
a. a quality level.
b. features.
c. warranty.
d. a brand name.
Answer: (c) Difficulty: (3) Page: 282, Figure 8-1
12. The best illustration of an augmented product category or feature would be the:
a. brand name.
b. packaging.
c. warranty.
d. design.
13. Products purchased frequently, immediately, and with a minimum of comparison and
buying effort are called:
a. consumer products.
b. convenience products.
c. shopping products.
d. specialty products.
14. Products that the consumer usually compares with others on price, suitability,
quality, and style are typically called:
a. convenience products.
b. specialty products.
c. shopping products.
d. unsought products.
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15. A(n) _____________ is a product bought by the final consumer for personal
consumption.
a. consumer product
b. industrial product
c. psychological product
d. stress-sensitive product
16. All of the following are characteristics of the convenience product EXCEPT:
a. low price.
b. mass promotion by the producer.
c. exclusive distribution.
d. frequent purchase, little planning, and little comparison.
Answer: (c) Difficulty: (2) Page: 282, Table 8-1
17. The best illustration of a shopping product listed below would be:
a. a television.
b. a magazine.
c. fine crystal.
d. life insurance.
Answer: (a) Difficulty: (3) Page: 282, Table 8-1
18. The best example of a specialty product listed below is that of a(n):
a. luxury good, such as a Rolex watch.
b. major appliance.
c. Red Cross blood donation.
d. laundry detergent.
Answer: (a) Difficulty: (2) Page: 282, 283, Table 8-1
19. Consumer goods with unique characteristics or brand identification often requiring
a special purchase effort are called:
a. custom products.
b. specialty products.
c. convenience products.
d. shopping products.
Answer: (b) Difficulty: (1) Page: 282, 283
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20. Consumer goods that the consumer does not know about or does not normally think
about buying are called:
a. custom products.
b. unsought products.
c. specialty products.
d. shopping products.
21. ____________________ are products bought by individuals and organizations for

further processing or for use in conducting a business.
a. Consumer products
b. Services
c. Industrial products
d. Specialty products
22. The primary distinction between a consumer product and an industrial product is
based on the ___________________.
a. cost
b. size
c. description
d. purpose for which the product is bought
23. Which of the following would not be one of the three major groups of industrial
products and services?
a. computer software for PCs
b. materials and parts
c. capital items
d. supplies and services
Answer: (a) Difficulty: (1) Page: 283, 284
24. ____________ are industrial products that aid in the buyers production or
operations, including installations and accessory equipment.
a. Computer software goods
b. Materials and parts
c. Capital items
d. Supplies and services
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25. ___________________ consists of activities undertaken to create, maintain, or
change the attitudes and behavior of target consumers toward an organization.
a. Nonprofit marketing
b. Services marketing
c. Organizational marketing
d. Cause-related marketing
Answer: (c) Difficulty: (2) Page: 284, 285
26. Which of the following would be the best illustration of corporate image advertising?
a. A hospital listing its phone number in the Yellow Pages.
b. A university sending a catalog to a prospective student.
c. IBM using television to establish itself as the company to turn to for e-Business
solutions.
d. Nike employing Tiger Woods to promote golf balls.
27. When Michael Jordan and Tiger Woods use marketing to promote their careers and
improve their impact and incomes, they are using:
a. cause-related marketing.
b. idea marketing.
c. nonprofit marketing.
d. person marketing.
28. New York State shouts I Love New York! This would be an example of which
of the following forms of marketing?
a. cause-related marketing
b. idea marketing
c. corporate image advertising
d. place marketing
29. Keep America Beautiful and Say No to Drugs are forms of which type of
marketing listed below?
a. social marketing
b. place marketing
c. nonprofit marketing
d. organizational marketing
Answer: (a) Difficulty: (1) Page: 285, 286
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30. ___________ is one of the marketers major positioning tools.
a. Quantity
b. Quality
c. Cost
d. Size
31. As explained in the text, product quality means conformance qualityconsistency

in delivering a target level of performance and:
a. no recalls for at least one year.
b. freedom from defects.
c. standard engineering specifications.
d. global standards, such as ISO 9000.
32. Beyond simply reducing product defects, the ultimate goal of total quality is to
improve:
a. distribution relationships.
b. promotional methods.
c. returns and allowances.
d. customer satisfaction and value.
33. One way to add customer value is through distinctive product style and design.
According to the text, all of the following companies have reputations for outstanding
style and design EXCEPT:
a. Jeep in SUVs.
b. Black & Decker in cordless appliances.
c. Steelcase in office furniture and systems.
c. Bose in audio equipment.
34. According to the text, _________ simply describes the appearance of a product.
a. style
b. design
c. feature
d. brand
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35. Good __________ contribute(s) to a products usefulness as well as to its looks.
a. style
b. design
c. brand enhancement
d. features
36. If Steelcase office furniture company wanted to make office furniture that really met
the needs of its consumers and provided value to the consumer that was not just
skin deep, it would try to improve its products ________________.
a. design
b. style
c. performance
d. ambiance
37. A _______________ is a name, term, sign, symbol, or design, or a combination

of these, that identifies the maker or seller of a product or service.
a. product feature
b. sponsorship
c. brand
d. logo
38. When a brand has achieved an impressive reputation for loyalty, performance, and
quality, it can be said to have:
a. brand endurance.
b. brand equity.
c. brand bonding.
d. brand prestige.
39. All of the following are desirable qualities for a brand name EXCEPT:
a. it should suggest something about the products benefits and qualities.
b. it is best if it is a computer generated name (this gives it something that no one
else has).
c. it should be distinctive.
d. it should be capable of registration and legal protection.
Answer: (b) Difficulty: (2) Page: 290, 291
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40. Once chosen, the brand name must be protected. Many firms try to build a brand
name that will eventually become identified with the product category. However,
success may threaten the companys rights to the name. Some brand names lose
their distinctiveness and become generic (any seller can use the name or term).
All of the following brand names are now considered to be generic EXCEPT:
(All of the brands have been put in lower case letters on purpose.)
a. yo-yo.
b. linoleum.
c. shredded wheat.
d. kleenex.
41. A manufacturer has four sponsorship options. A ________________ is a brand

created and owned by a reseller of a product or service.
a. licensed brand
b. manufacturers brand
c. private brand
d. co-brand
42. A private brand is a brand created and owned by:

a. a manufacturer of a product or service.
b. a reseller of a product or service.
c. an international cartel.
d. a private family business.
43. Sears created the Craftsman brand name for tools. This would be an example
of which of the following branding options?
a. licensed brand
c. private brand
d. co-brand
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44. If Bubble-Right makes 50% of all bubble gum sold in the United States, but sells it
through middlemen who market the product under individual store brands, then
Bubble-Right is utilizing which type of brand-sponsorship?
a. licensed brand
c. private brand
d. co-brand
45. Sams Grocery demands promotional payments from most of its food and beverage
suppliers before it will guarantee them shelf space on premium aisles for new
products. This practice has recently received much scrutiny from the Federal Trade
Commission. The industry calls such promotional fees
or payments:
a. paybacks.
b. promos.
c. slotting fees.
d. new product fees.
46. If Mark Mars pays Hershey Foods Corporation for the right to use its name on his
line of T-shirts, then Mr. Mars is using which type of policy?
a. licensing
b. manufacturers branding
c. private branding
d. co-branding
Answer: (a) Difficulty: (2) Page: 292, 293, 295
47. ______________ is the practice of using the established brand names of two different
companies on the same product.
a. Licensed branding
b. National branding
c. Store branding
d. Co-branding
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48. If Ford Motor Company and Eddie Bauer work together to design and sponsor a new
sport utility vehicle, then the companies are using which of the following brand
sponsorship options?
a. licensed branding
b. national branding
c. store branding
d. co-branding
49. All of the following would be possible advantages of co-branding EXCEPT:

a. combined brands create broader consumer appeal.
b. combined brands create greater brand equity.
c. combined brands always offer economies of scale and reduced prices.
d. combined brands allow a company to expand its existing brand into other
categories.
50. Using a successful brand name to introduce additional items in a given product
category under the same brand name (such as new flavors, forms, colors, added
ingredients, or package sizes) is called:
a. a line extension.
b. a brand extension.
c. multibranding.
d. new brands.
Answer: (a) Difficulty: (1) Page: 296, Figure 8-4
51. A company might introduce ________________ as a low-cost, low-risk way to

introduce new products in order to meet consumer desires for variety, to utilize
excess capacity, or simply to command more shelf space from resellers.
a. duobranding
b. line extensions
c. brand extensions
d. new brands
Answer: (b) Difficulty: (2) Page: 296, Figure 8-4
52. _______________ is a strategy of using a successful brand name to launch a new

or modified product in a new category.
a. Duobranding
b. Line extension
c. Brand extension
d. Multibranding
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53. If Honda uses its company name to cover such different products as its automobiles,
lawn mowers, and motorcycles, it is practicing which of the following strategies?
a. new brand strategy
b. line extension strategy
c. multibrand strategy
d. brand extension strategy
Answer: (d) Difficulty: (2) Page: 297, Figure 8-4
54. Seiko watches cover many different buying motives, as well as desires for different
features. For example, higher-priced Seiko Lasalles cover the upper end of the
watch market, while Seikos Pulsar covers the lower end. The Lasalle and Pulsar
would be called:
a. bracket brands.
b. Hi-Lo brands.
c. flanker brands.
d. end-zone brands.
55. When a company enters a new product category for which its current brand names
are not appropriate, it will likely follow which of the following brand strategies?
a. product extensions
b. line extensions
c. brand extensions
d. new brands
Answer: (d) Difficulty: (2) Page: 297, 298, Figure 8-4
56. If a company is following a branding policy of weeding out weaker brands and
only focusing their marketing dollars on brands that can achieve the number-one
or -two market share positions in their category, then the company is probably
pursuing a:
a. megabrand strategy.
b. metabrand strategy.
c. minibrand strategy.
d. brand elimination strategy.
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57. ________________ is the activities of designing and producing the container or
wrapper for a product.
a. Labeling
b. Packaging
c. Product support services
d. Product line decisions
58. Traditionally, the primary function of the package was to:

a. promote the product.
b. introduce the product to a new market.
c. contain and protect the product.
d. describe the product and attract attention.
59. The first federal Act to control labels on packages (to ensure that no false,
misleading, or deceptive labels or packages were allowed) was the:
a. Robinson-Patman Act.
b. Sherman Antitrust Act.
c. Federal Trade Commission Act of 1914.
d. Lanham Act.
60. A group of products that are closely related because they function in a similar manner
is called a:
a. product line.
b. brand line.
c. brand family.
d. product position.
61. The number of items within the product line is identified as being the:
a. product line width.
b. product line strength.
c. product line length.
d. product line consistency.
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62. _______________ occurs when a company lengthens its product line beyond its
current range.
a. Product line strength
b. Product line consistency
c. Product line mobility
d. Product line stretching
63. When a company lengthens its product line beyond its current range, it is engaged in:
a. brand extension.
b. product line stretching.
c. product line reduction.
d. product line filling.
64. Companies in the middle range of the market who wish to extend their product lines
to both the upper and the lower end are considering:
a. an upward stretch.
b. a downward stretch.
c. a stretch in both directions.
d. a middle-end stretch.
65. ________________ is the set of all product lines and items that a particular seller
offers for sale.
a. Product line
b. Product mix
c. Product allotment
d. Product choice
66. Product mix ________________ refers to the number of different product lines the
company carries.
a. width
b. depth
c. length
d. consistency
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67. The total number of items that the company carries within its product lines refers to
the ___________ of the product mix.
a. width
b. depth
c. length
d. consistency
68. The number of different versions of each product offered in the product line is
called its:
a. width.
b. depth.
c. length.
d. consistency.
69. How closely related the various product lines are in end use, production requirements,
distribution channels, or in some other way is called:
a. width.
b. depth.
c. length.
d. consistency.
70. The characteristic of service meaning that it cannot be seen, tasted, felt, heard, or
smelled before being bought is called:
a. intangibility.
b. inseparability.
c. variability.
d. perishability.
Answer: (a) Difficulty: (2) Page: 306, Figure 8-5
71. The fact that services are sold, produced, and consumed at the same time refers to
which of the following service characteristics?
a. intangibility
b. inseparability
c. variability
d. perishability
Answer: (b) Difficulty: (1) Page: 306, 307, Figure 8-5
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72. The quality of a service depends on who provides it, as well as when, where,
and how it is provided. This is an example of which characteristic of services?
a. intangibility
b. inseparability
c. variability
d. perishability
73. The fact that a business traveler may have one very positive check-in experience at a
hotel and then a very negative check-in experience with a different employee on a
subsequent visit is evidence of service:
a. intangibility.
b. inseparability.
c. variability.
d. perishability.
74. The fact that services cannot be stored for later use or sale is evidence of their:
a. intangibility.
b. inseparability.
c. variability.
d. perishability.
75. Successful service companies focus their attention on both their customers and their
employees. They understand ___________________, which links service firm
profits with employee and customer satisfaction.
a. internal marketing
b. service-profit chains
c. interactive marketing
d. service differentiation
76. If a firm is practicing ____________________, the firm is training and effectively

motivating its customer-contact employees and all of the supporting service people to
work as a team to provide customer satisfaction.
a. double-up marketing
b. internal marketing
c. interactive marketing
d. service marketing
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77. __________________ means that service quality depends heavily on the quality of
the buyer-seller interaction during service encounters.
a. Double-up marketing
b. Internal marketing
c. Interactive marketing
d. Service marketing
78. The solution to price competition is to develop a differentiated:

a. product, price, and promotion.
b. offer, delivery, and image.
c. package and label.
d. international Web site.
79. Companies should take steps not only to provide good service every time but also
to recover from service mistakes when they do occur. The first step a manager
should take to ensure service quality is to:
a. empower front-line service employees.
b. always take back merchandise if requested.
c. offer a complaint hot line.
d. refer customers to the service policy found at the bottom of most sales receipts.
TRUE/FALSE QUESTIONS
80. Products include more than just tangible goods.
Answer: (True) Difficulty: (1) Page: 278
81. A product can be a person, place, or an idea.
82. A good example of a pure tangible good would be air travel.
Answer: (False) Difficulty: (1) Page: 278
83. A companys offer to the marketplace often includes both tangible goods and
servicesfor example, when people patronize restaurants both for their food and
their service. This would be an example of a hybrid offer.
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84. The product can be perceived as having three distinct levels. The first of these is
called the actual product.
Answer: (False) Difficulty: (1) Page: 278, 279, Figure 8-1
85. The augmented product includes such variables as packaging, the brand name, and
the quality level of the product.
Answer: (False) Difficulty: (2) Page: 282, Figure 8-1
86. A key component of the augmented product is the warranty.
Answer: (True) Difficulty: (2) Page: 282, Figure 8-1
87. The convenience product is a consumer product that the customer usually buys
frequently, immediately, and with a minimum of comparison and buying effort.
88. A good illustration of a specialty product is a magazine or a newspaper.
Answer: (False) Difficulty: (2) Page: 282, 283, Table 8-1
89. If a marketer were attempting to sell life insurance, the type of consumer product
category that it would most likely fall into would be an unsought product.
Answer: (True) Difficulty: (2) Page: 283, Table 8-1
90. Red Cross blood donations are considered to be specialty products and, therefore,
have a specialty offer to the consumer.
Answer: (False) Difficulty: (2) Page: 282, 283, Table 8-1
91. The distinction between a consumer product and an industrial product is based on
the purpose for which the product is bought.
92. Capital items are industrial products that aid in the buyers production or operations.
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93. The Ad Councils Say No to Drugs is a good example of corporate image
advertising.
94. Recently, marketers have shifted from TQM (total quality management) approaches
to ROQ (return on quality) programs.
95. Unlike design, style is more than skin deep.
96. There is a move away from branding because of the high cost of maintaining
branding reputation and image today.
97. A powerful brand (to be powerful and stay powerful) must have brand equity.
Answer: (True) Difficulty: (1) Page: 289, 290
98. A good brand name should suggest something about the products cost and price.
Answer: (False) Difficulty: (2) Page: 290, 291
99. Because of poor image and quality, store brands are no real threat to manufacturers
brands as evidenced by recent sales reports.
Answer: (False) Difficulty: (2) Page: 291, 292
100. If Dannon Yogurt produces an economy-sized yogurt, this would be an example

of a line extension.
101. The packaging concept states what the package should be or do for the product.
102. A product line is each individual product made by the company as it attempts to
meet the needs of the marketplace.
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103. Product line stretching occurs when a company tries to milk all the promotional
dollars possible out of the companys promotional budget.
104. Product mix width refers to the number of different product lines the company
carries.
105. Product line depth refers to how closely related the various product lines are to one
another.
106. Service intangibility means that a service cannot be stored for later sale or use.
107. Service inseparability means that services cannot be separated from their providers.
Answer: (True) Difficulty: (1) Page: 306, 307
108. Because the customer is present as the service is produced, provider-customer

interaction is a special feature of services marketing.
109. Internal marketing means that perceived service quality depends heavily on the
quality of the buyer-seller interaction during the service encounter.
ESSAY QUESTIONS
110. Each year, Revlon sells more than $2.4 billion worth of cosmetics, toiletries, and
fragrances to consumers around the world. Revlon knows that when it sells perfume, it
sells much more than fragrant fluids. List and then briefly discuss what Revlon sells in
addition to a tangible product.
Answer:
Fragrance marketers know that if there is No smell; no sell, however, the maker sells
many things beyond the scent. In fact, it might be the last element developed. According
to information presented in the text, Revlon carefully researchers womens feelings about
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themselves and their relationships with others. It then develops and tests new perfume
concepts that match womens changing values, desires, and lifestyles. To summarize,
Revlon takes the physical product, the products name, and even the package to market to
womens lifestyles, self-expression, and exclusivity. It does this by focusing on
achievement, success, status, femininity, romance, passion, fantasy, memories, hopes, and
dreams.
Difficulty: (1) Page: 275-277
111. Explain the meaning of the terms product and service. Compare the differences and
similarities by explaining the product-service continuum.
Answer:
A product is anything that can be offered to a market for attention, acquisition, use, or
consumption that might satisfy a want or need. It includes physical objects, services,
persons, places, organizations, and ideas. A service is any activity or benefit that one
party can offer to another that is essentially intangible and does not result in the
ownership of anything.
A companys offer to the marketplace often includes both tangible goods and services.
Each component can be a minor or a major part of the total offer. This continuum
includes: (1) a pure tangible good, such as soap or toothpaste; (2) a tangible good with
accompanying services, such as an automobile company offering a car plus its warranty
and repair services; (3) a service with accompanying minor goods, such as an airline
offering transportation service but serving meals while traveling; and (4) pure services
where the offer is primarily a service, such as a doctors exam.
Difficulty: (2) Page: 278
112. Demonstrate the three levels of product and any accompanying features that might
be present at each level.
Answer:
Product planners need to think about products (and also services) on three levels. The
most basic level is the core product, which addresses the question: What is the buyer
really buying? This level is at the center of the marketing offer. Second, the product
planner must build an actual product around the core product. Actual products may have
as many as five characteristics: a quality level, features, design, a brand name, and
packaging. These features are combined to deliver the core benefit. Lastly, the product
planner must build an augmented product around the core and actual products by offering
additional consumer services and benefits. The augmented product can include
installation, delivery and credit, after-sale service, and a warranty.
Difficulty: (2) Page: 278, 279, 282, Figure 8-1
113. Demonstrate the differences and similarities between the four major types of
consumer products.
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Answer:
The four major types of consumer products include convenience, shopping, specialty, and
unsought products. Convenience products are those consumer products that the customer
usually buys frequently, immediately, and with a minimum of comparison and buying
effort. They generally have a low price, widespread distribution, are found in convenient
locations, are mass produced, and are exemplified by products such as toothpaste and
magazines. Shopping products are consumer goods that the customer, in the process of
selection and purchase, characteristically compares on such bases as suitability, quality,
price, and style. They are generally higher in price, found in selective distribution
outlets, are supported by advertising and personal selling, and exemplified by major
appliances and televisions. Specialty products are consumer products with unique
characteristics or brand identification for which a significant group of buyers is willing to
make a special purchase effort. They are generally high in price, found in exclusive
outlets, carefully targeted by producers and resellers, and exemplified by luxury goods
such as Rolex watches. Lastly, unsought goods are consumer products that the consumer
either does not know about, or knows about but does not normally think of buying. They
are generally supported by aggressive advertising and personal selling, and exemplified
by life insurance. Price and distribution varies.
Difficulty: (2) Page: 282, 283, Table 8-1
114. List and briefly describe the three groups of industrial products and services cited in
the text.
Answer:
The three groups are:
a). Materials and partsincludes raw materials and manufactured materials and parts.
Raw materials consist of farm products and natural products. Manufactured materials
and parts consist of component materials and component parts.
b). Capital itemsindustrial products that aid in the buyers production or operations,
including installations and accessory equipment.
c). Supplies and servicesoperating supplies and repair and maintenance items.
Difficulty: (2) Page: 283, 284
115. What is social marketing? Give an example of a social marketing effort.
Answer:
Social marketing is the design, implementation, and control of programs seeking to
increase the acceptability of a social idea, cause, or practice among a target group. An
example (several are listed in the text) would be the Advertising Councils Smokey the
Bear campaign.
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116. Discuss the differences between a products design and style.
Answer:
Design is a larger concept than style. Style simply describes the appearance of a product.
Styles can be eye-catching or yawn producing. Unlike style, design is more than skin
deep. It goes to the very heart of a product. Good design contributes to a products
usefulness as well as to its looks.
117. What characterizes a good brand name? List the desirable qualities a good brand
name should have.
Answer:
A good brand name should do the following:
a). It should suggest something about the products benefits and qualities.
b). It should be easy to pronounce, recognize, and remember.
c). The brand name should be distinctive.
d). It should be extendible.
e). The name should translate easily into foreign languages.
f). It should be capable of registration and legal protection.
118. Characterize and explain the four possible brand strategies discussed in the chapter.
Answer:
A company has four choices when it comes to brand strategies. It can introduce line
extensions, brand extensions, multibrands, or new brands. Line extension is a strategy of
using a successful brand name to introduce additional items in a given product category
under the same brand name, such as new flavors, forms, colors, added ingredients, or
package sizes. A brand extension is using a successful brand name to launch a new or
modified product in a new category. An example would be Honda Motor Company
moving its name from automobiles to motorcycles, snowblowers, and lawn mowers.
Multibranding offers a way to establish different features and appeal to different buying
motives. It also allows a company to lock up more reseller shelf space. Forms can be
flanker or fighter brands. In the new brand category, company may create a new brand
name when it enters a new product category for which none of the companys current
brand names are appropriate.
Difficulty: (2) Page: 296-298, Figure 8-4
119. A companys product mix has four important dimensions: width, length, depth, and
consistency. Define or characterize each.
188
Answer:
a). Width refers to the number of different product lines the company carries.
b). Length refers to the total number of items the company carries within its product
lines.
c). Depth refers the number of versions offered of each product in the line.
d). Consistency of the product mix refers to how closely related the various product lines
are in end-use, production requirements, distribution channels, or some other way.
120. Identify and briefly discuss the four major service characteristics.
Answer:
A company must consider four special service characteristics when designing marketing
programs: intangibility, inseparability, variability, and perishability. These
characteristics may be summarized as follows: (1) service intangibilityservices cannot
be seen, tasted, felt, heard, or smelled before they are bought (a good strategy would be to
try and make the service more tangible), (2) service inseparabilityservices are produced
and consumed at the same time and cannot be separated from their providers, whether the
providers are people or machines (a strategy might be to try to increase the provider-
customer interaction), (3) service variabilitythe service has the quality of varying
greatly, depending on who provides it and when, where, and how it is provided (try to
achieve consistency in the service offering), and (4) service perishabilityservices
cannot be stored for later sale or use (service firms need to design better strategies for
producing a better match between demand and supply).
Difficulty: (3) Page: 306, 307, Figure 8-5
121. Identify what a service-profit chain is and identify the critical five links of the chain.
Answer:
A service-profit chain is the chain that links service firm profits with employee and
customer satisfaction.
The critical five links are:
a). internal service quality
b). satisfied and productive service employees
c). greater service value
d). satisfied and loyal customers
e). healthy service profits and growth
122. Draw a distinction between internal marketing and interactive marketing.
189
Answer:
Internal marketing is marketing by a service firm to train and effectively motivate its
customer-contact employees and all the supporting service people to work as a team to
provide customer satisfaction.
Interactive marketing is marketing by a service firm that recognizes that perceived

service quality depends heavily on the quality of buyer-seller interaction.
APPLICATION QUESTION
123. A company must manage its product lines carefully. Jefferson Pool and Billiard
Company (who has manufactured high-priced, high-quality pool and billiard tables to
discriminating individuals for 50 years) recently decided to embark into a new business
venture which they hoped would remedy their sagging sales. The company decided to
begin to manufacture and market a line of durable but value-priced pool tables intended
for private and arcade use. Using the correct terminology with respect to product line
decisions, describe what Jefferson is attempting to do and give a judgment about whether
you think the new product line might be a good fit. Be sure to explain your rationale and
justify your conclusions.
Answer:
The instructor might want to give additional instructions or embellish the example to fit
individual course needs. However, if taken in the form presented above, the student
should explain, and then choose from the following product line alteration options: a)
Product line stretch(ing)occurs when a company lengthens its product line beyond its
current range. This stretch can occur through downward, upward, or both direction
stretches. If the company initially began as an upper-end market company (as Jefferson
did), they can later stretch their lines downward to plug a market hole that otherwise
would attract a new competitor, to respond to a competitors attack on their upper end, or
add at this level because low-end products seem to be having faster growth (this is
probably what is happening in the Jefferson case). Or, if the company began in the low-
end portion of the market (which Jefferson did not), the company might stretch their lines
upward because it finds faster growth taking place in higher-end market. The company
could also decide to stretch in both directions. b) The company could also pursue a line
filling strategy (where the company would add more items within the present range of the
line). There could be several reasons for adding a product line filling strategyreaching
for extra profits, satisfying dealers, using excess capacity, being the leading full-line
company, and plugging holes to keep out competitors. Since markets rather than
products seem to be involved in this case, this alternative is not as sound as the
downward stretch option.
190
Students should see that the best alternative for the company would be to exercise a
downward stretch. If the company is concerned that the stretch might cheapen their
image and prestige, the move could be accomplished under another brand name. The
company should also consider that, if they only been selling to individuals, selling to
arcades might be a real challenge. Whatever they decide, the students should provide a
rationale for their decision. The instructor might also allow for creativity (such as the
student that recommends new product lines such as Air Hockey or Foosball).
191

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CHAPTER 8

PRODUCT AND SERVICES STRATEGY

MULTIPLE CHOICE QUESTIONS

1. Anything that can be offered to a market for attention, acquisition, use, or

Answer: (c) Difficulty: (2) Page: 278

2. Broadly defined, products include all of the following EXCEPT:

Answer: (a) Difficulty: (3) Page: 278

3. A ______________________ is a form of product that consists of activities,

Answer: (a) Difficulty: (1) Page: 278

4. All of the following are examples of services EXCEPT:

Answer: (d) Difficulty: (1) Page: 278

Answer: (b) Difficulty: (1) Page: 278

6. Which of the following would be the best illustration of a pure service?

Answer: (b) Difficulty: (3) Page: 278

Answer: (a) Difficulty: (2) Page: 278

Answer: (d) Difficulty: (2) Page: 278, Marketing at Work 8-1

9. The most basic level of a product is called the:

Answer: (a) Difficulty: (1) Page: 278

Answer: (b) Difficulty: (3) Page: 282, Figure 8-1

Answer: (c) Difficulty: (3) Page: 282, Figure 8-1

Answer: (c) Difficulty: (2) Page: 282, Figure 8-1

Answer: (b) Difficulty: (1) Page: 282

Answer: (c) Difficulty: (1) Page: 282

Answer: (a) Difficulty: (1) Page: 282

Answer: (c) Difficulty: (2) Page: 282, Table 8-1

Answer: (a) Difficulty: (3) Page: 282, Table 8-1

Answer: (a) Difficulty: (2) Page: 282, 283, Table 8-1

Answer: (b) Difficulty: (1) Page: 282, 283

Answer: (b) Difficulty: (2) Page: 283

21. ____________________ are products bought by individuals and organizations for

Answer: (c) Difficulty: (1) Page: 283

Answer: (d) Difficulty: (3) Page: 283

Answer: (a) Difficulty: (1) Page: 283, 284

Answer: (c) Difficulty: (2) Page: 284

Answer: (c) Difficulty: (2) Page: 284, 285

Answer: (c) Difficulty: (32) Page: 285

Answer: (d) Difficulty: (1) Page: 285

Answer: (d) Difficulty: (1) Page: 285

Answer: (a) Difficulty: (1) Page: 285, 286

Answer: (b) Difficulty: (2) Page: 287

31. As explained in the text, product quality means conformance qualityconsistency

Answer: (b) Difficulty: (3) Page: 287

Answer: (d) Difficulty: (2) Page: 287

Answer: (a) Difficulty: (3) Page: 288

Answer: (a) Difficulty: (1) Page: 288

Answer: (b) Difficulty: (2) Page: 288

Answer: (a) Difficulty: (2) Page: 288

37. A _______________ is a name, term, sign, symbol, or design, or a combination

Answer: (c) Difficulty: (1) Page: 288, 289

Answer: (b) Difficulty: (2) Page: 289

Answer: (b) Difficulty: (2) Page: 290, 291

Answer: (d) Difficulty: (3) Page: 291

41. A manufacturer has four sponsorship options. A ________________ is a brand

Answer: (c) Difficulty: (2) Page: 291

42. A private brand is a brand created and owned by:

Answer: (b) Difficulty: (2) Page: 291

Answer: (c) Difficulty: (1) Page: 291

Answer: (c) Difficulty: (3) Page: 291

Answer: (c) Difficulty: (2) Page: 291, 292

Answer: (a) Difficulty: (2) Page: 292, 293, 295

Answer: (d) Difficulty: (1) Page: 295

Answer: (d) Difficulty: (2) Page: 295

49. All of the following would be possible advantages of co-branding EXCEPT: