Chapter 8

Principles of Marketing, 16e (Kotler)
Chapter 8 Products, Services, and Brands: Building Customer Value
1) Which of the following is true with regard to products?

A) The quality of products is far more difficult to measure than that of services.
B) Products do not include experiences, organizations, persons, places, and ideas.
C) Products are not meant for sale in the market.
D) Products include services, events, persons, places, organizations, ideas, or a mixture of these.
E) Products refer to only those activities that are essentially intangible.
Answer: D
AACSB: Analytical thinking
Skill: Concept
Objective: LO 8.1: Define product and describe the major classifications of products and
services.
Difficulty: Easy
2) ________ are a form of product that consists of activities, benefits, or satisfactions offered for
sale that are essentially intangible and do not result in the ownership of anything.
A) Liabilities
B) Services
C) Brands
D) Consumer products
E) Specialty products
Answer: B
Skill: Concept
services.
Difficulty: Easy
3) Which of the following exemplifies a service?

A) candy
B) laptop
C) retail
D) car
E) laundry detergent
Answer: C
Skill: Concept
services.
Difficulty: Moderate
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4) Marketing mix planning begins with ________.
A) building an offering that brings value to target customers
B) finding a suitable promotion strategy for the product
C) setting a reasonable price for the product
D) selecting the right channel for distribution of the product
E) calculating the total costs involved in manufacturing the product
Answer: A
AACSB: Application of knowledge
Skill: Concept
services.
5) Which of the following is true with regard to services?

A) Services refer to purely tangible products.
B) Services are a form of product that consists of activities, benefits, or satisfactions offered for
sale.
C) Services can be stored for later use.
D) Services can be easily separated from their providers.
E) Services are tangible product offerings whose quality can be easily measured.
Answer: B
Skill: Concept
services.
6) Which of the following is an example of a pure tangible good?

A) a laptop with a comprehensive warranty for three years
B) an online shoe retailer that provides free home delivery
C) an agency that offers free legal advice
D) a credit card
E) a bag of potato chips
Answer: E
Skill: Concept
services.
2
7) Which of the following product offerings is intangible?
A) a package of laundry detergent
B) an ink cartridge for a printer
C) a wool jacket
D) a gold ring
E) a taxi ride
Answer: E
Skill: Concept
services.
8) Product planners need to consider products and services on three levels. Each level adds more
customer value. The most basic level is the ________, which addresses the question, "What is
the buyer really buying?"
A) an actual product
B) an augmented product
C) core customer value
D) co-branding
E) exchange value
Answer: C
Skill: Concept
services.
Difficulty: Easy
9) Product planners need to consider products and services on three levels. At the second level,
product planners must ________.
A) offer additional product support and after-sale services
B) identify the core customer value that consumers seek from the product
C) turn the core benefit into an actual product
D) find out how they can create the most satisfying brand experience
E) define the problem-solving benefits or services that consumers seek
Answer: C
Skill: Concept
services.
3
10) Product planners need to consider products and services on three levels. At the third level,
product planners must build ________.
A) an actual product
B) an augmented product
C) core customer value
D) a brand personality
E) a basic product
Answer: B
Skill: Concept
services.
Difficulty: Easy
11) ________ are industrial products.

A) Major appliances
B) Laundry detergents
C) Life insurance policies
D) Office supplies
E) Legal services
Answer: D
Skill: Concept
services.
Difficulty: Easy
12) Consumer products refer to ________.

A) products purchased by consumers for further processing or for use in conducting a business
B) products and services bought by final consumers for personal consumption
C) primarily intangible offerings from marketers
D) raw materials as well as manufactured materials and parts
E) products that aid in the consumer's production or operations, including installations and
accessory equipment
Answer: B
Skill: Concept
services.
Difficulty: Easy
4
13) ________ are consumer products and services that customers usually buy frequently,
immediately, and with minimal comparison and buying effort.
A) Unsought products
B) Capital items
C) Shopping products
D) Convenience products
E) Supplies and repair services
Answer: D
Skill: Concept
services.
Difficulty: Easy
14) Which of the following is an example of a convenience product?

A) fast food
B) diamond ring
C) furniture
D) life insurance
E) refrigerator
Answer: A
Skill: Concept
services.
15) ________ are less frequently purchased consumer products and services that customers
compare carefully on suitability, quality, price, and style.
A) Shopping products
B) Convenience products
C) Unsought products
D) Capital items
E) Supplies and repair services
Answer: A
Skill: Concept
services.
Difficulty: Easy
5
16) Erica wants to replace her old washing machine with a new one. In order to get the
maximum value for her money, she plans to spend substantial time and effort in gathering
information and making product comparisons before making the actual purchase. In this
instance, Erica is planning to buy a(n) ________ product.
A) convenience
B) unsought
C) specialty
D) shopping
E) exclusive
Answer: D
Skill: Application
services.
17) ________ are consumer products and services with unique characteristics or brand
identification for which a significant group of buyers is willing to make a special purchase effort.
A) Shopping products
B) Unsought products
C) Specialty products
D) Capital items
E) Convenience products
Answer: C
Skill: Concept
services.
Difficulty: Easy
18) A hickory rocking chair, handmade by an Amish woodcarver in Lancaster, Pennsylvania

from locally grown wood, is an example of a ________.
A) convenience product
B) capital item
C) specialty product
D) service
E) product attribute
Answer: C
Skill: Application
services.
6
19) ________ are consumer products that the consumer either does not know about or knows
about but does not normally think about buying.
A) Specialty products
C) Unsought products
D) Shopping products
E) Capital items
Answer: C
Skill: Concept
services.
Difficulty: Easy
20) ________ products are those products purchased for further processing or for use in
conducting a business.
A) Unsought
B) Specialty
C) Shopping
D) Industrial
E) Convenience
Answer: D
Skill: Concept
services.
Difficulty: Easy
21) ________ are the major marketing factors in the sale of most manufactured materials and
parts.
A) Branding and advertising
B) Price and service
C) Sales promotion and advertising
D) Branding and packaging
E) Public relations and brand management
Answer: B
Skill: Concept
services.
Difficulty: Easy
7
22) ________ are industrial products that aid in the buyer's production or operations, including
installations and accessory equipment.
A) Unsought products
C) Capital items
D) Specialty items
E) Repair items
Answer: C
Skill: Concept
services.
Difficulty: Easy
23) Installations consist of ________.

A) highly priced luxury goods such as Rolex watches
B) portable office equipment such as computers
C) major purchases such as elevators
D) portable factory equipment such as hand tools
E) products such as insurance
Answer: C
Skill: Concept
services.
24) Lubricants, coal, paper, and pencils are examples of ________.

A) operating supplies
B) capital items
C) raw materials
D) specialty products
E) installations
Answer: A
Skill: Concept
services.
8
25) ________ marketing consists of activities undertaken to create, maintain, or change the
attitudes and behaviors of target consumers toward an organization.
A) Social network
B) Organization
C) Niche
D) Location
E) Concentrated
Answer: B
Skill: Concept
services.
Difficulty: Easy
26) The advertising slogan, "We bring good things to life," used by General Electric to market
itself, is an example of ________ marketing.
A) person
B) corporate image
C) internal
D) place
E) niche
Answer: B
Skill: Application
services.
27) ________ marketing consists of activities undertaken to create, maintain, or change attitudes
toward particular people. People ranging from presidents, entertainers, and sports figures to
professionals such as doctors, lawyers, and architects use it to build their reputations.
A) Corporate image
B) Person
C) Social
D) Organization
E) Place
Answer: B
Skill: Concept
services.
Difficulty: Easy
9
28) A company that uses well-known celebrities to help sell its products is using ________
marketing.
A) interactive
B) internal
C) social
D) person
E) organization
Answer: D
Skill: Concept
services.
29) ________ marketing involves activities undertaken to create, maintain, or change attitudes
toward particular cities, states, or regions.
A) Idea
B) Place
C) Organization
D) Social
E) Interactive
Answer: B
Skill: Concept
services.
Difficulty: Easy
30) Tourism Australia's global marketing campaign, "There's nothing like Australia" is an
example of ________ marketing.
A) corporate image
B) person
C) organization
D) internal
E) place
Answer: E
Skill: Application
services.
10
31) Advertising campaigns involving issues ranging from health care, education, and
environmental sustainability to human rights and personal safety can be classified under
________ marketing.
A) corporate image
B) internal
C) social
D) place
E) person
Answer: C
Skill: Concept
services.
Difficulty: Easy
32) Elmo Inc., a Michigan-based manufacturer of athletic shoes, uses professional athletes in its
ad campaigns to help sell its products. This is an example of ________ marketing.
A) person
B) place
C) social
D) organization
E) internal
Answer: A
Skill: Application
services.
33) Public health campaigns designed to reduce alcoholism, drug abuse, smoking, and obesity
are all examples of ________ marketing.
A) internal
B) social
C) organization
D) person
E) place
Answer: B
AACSB: Ethical understanding and reasoning
Skill: Concept
services.
11
34) Rhodia invites tourists from all over the world to experience its pristine nature, clear skies,
and beautiful summertime climate. This exemplifies ________.
A) corporate image marketing
B) social marketing
C) place marketing
D) social engineering
E) negative brand equity
Answer: C
Skill: Application
services.
12
Refer to the scenario below to answer the following question(s).
Ruben Delgado built his enterprise on the faithful patronage of four specialty shops and a large
contract from Elmore Distributors. But after two years, the maker of novelty pens and pencils
had to rethink his strategy when his contract with Elmore ended.
Ruben built a company reputation on the manufacturing and distribution of a variety of wooden
writing utensils with customized engravings. Specialty shops loved to display the products in
their fancy, lighted showcases, but such specialty shops alone were not profitable. Ruben
Delgado established a brand name, known merely as Delgado, and decided to expand on it.
Ruben extended his writing utensil lines to include quills, felt-tip pens, and multiple-cartridge
pens that write in different colors. He even added a line of various grades of personalized
stationery and business cards. Perhaps Ruben's biggest added touch, however, was the addition
of two salespeople who would work to explain the diverse array of products offered by Delgado,
as well as nurture existing accounts.
"We make an excellent product," Ruben Delgado stated, "and we honor a good guarantee on
everything we sell. But let's face it—we face hundreds of competitors! We need Delgado
representatives out there to help prospects understand what they should demand in something as
simple as a writing tool." The Delgado brand was fast-becoming synonymous with top-notch
customer service. Part of the purchase package brought personal visits from the Delgado
representative, before the purchase and long after.
35) An easier, more comfortable, more stylish transfer of thought onto paper refers to the
________ of Ruben's offerings.
A) tangible element
B) core customer value
C) actual product
D) augmented product
E) service variability
Answer: B
Skill: Application
services.
Difficulty: Challenging
13
36) Which type of product does Delgado manufacture?
A) industrial
B) convenience
C) specialty
D) shopping
E) unsought
Answer: C
Skill: Application
services.
37) A service refers to an activity, benefit, or satisfaction offered for sale that is essentially
intangible and does not result in the ownership of anything.
Answer: TRUE
Skill: Concept
services.
Difficulty: Easy
38) Unsought products are products that the customer usually buys frequently, immediately, and
with a minimum of comparison and buying effort.
Answer: FALSE
Skill: Concept
services.
39) Convenience products are less frequently purchased consumer products and services that
customers compare carefully on suitability, quality, price, and style.
Answer: FALSE
Skill: Concept
services.
Difficulty: Easy
14
40) The augmented product is the actual product plus the various services and benefits offered
with it, such as a warranty, free delivery, installation, and maintenance.
Answer: TRUE
Skill: Concept
services.
Difficulty: Easy
41) Give examples of pure tangible goods.

Answer: Examples will vary. A company's market offering often includes both tangible goods
and services. Examples of pure tangible goods include soap, toothpaste, or salt; no services
accompany these products.
Skill: Concept
services.
Difficulty: Easy
42) What is a product?

Answer: Anything that can be offered to a market for attention, acquisition, use, or consumption
that might satisfy a want or need is known as a product.
AACSB: Written and oral communication
Skill: Concept
services.
Difficulty: Easy
43) How do consumers perceive products?

Answer: Consumers see products as complex bundles of benefits that satisfy their needs.
Skill: Concept
services.
Difficulty: Easy
44) Name some common convenience products.

Answer: Student examples may vary. Convenience products include laundry detergent, candy,
magazines, and fast food.
Skill: Concept
services.
Difficulty: Easy
15
45) Give three examples of shopping products.
Answer: Student examples may vary. Shopping products include clothing, used cars, and
furniture.
Skill: Concept
services.
Difficulty: Easy
46) How are specialty products distributed?

Answer: Specialty products are distributed through only one or a few exclusive outlets per
market area. Special effort is required to purchase these products.
Skill: Concept
services.
47) Explain the difference between a consumer product and an industrial product. Include an
example.
Answer: The distinction between a consumer product and an industrial product is based on the
purpose for which the product is purchased. If a consumer buys a lawn mower for use around
home, the lawn mower is a consumer product. If the same consumer buys the same lawn mower
for use in a landscaping business, the lawn mower is an industrial product.
Skill: Concept
services.
48) 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, on the other hand, 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.
Skill: Concept
services.
16
49) Developing a product or service involves defining the benefits that it will offer. These
benefits are communicated and delivered by ________.
A) product labels
B) product attributes
C) support services
D) product packaging
E) branding
Answer: B
Skill: Concept
Objective: LO 8.2: Describe the decisions companies make regarding their individual products
and services, product lines, and product mixes.
Difficulty: Easy
50) ________ refers to the characteristics of a product or service that bear on its ability to satisfy
stated or implied customer needs.
A) Brand equity
B) Product quality
C) Product labeling
D) Brand image
E) Brand personality
Answer: B
Skill: Concept
Difficulty: Easy
51) ________ is an approach in which all the company's people are involved in constantly
improving the quality of products, services, and business processes.
A) Business intelligence
B) Quality function deployment
C) Total quality management
D) Brand equity management
E) Product positioning
Answer: C
Skill: Concept
Difficulty: Easy
17
52) What are the two dimensions of product quality?
A) consistency and level
B) performance and conformance
C) design and innovation
D) conformance and style
E) feature and design
Answer: A
Skill: Concept
Difficulty: Easy
53) ________ refers to freedom from defects and consistency in delivering a targeted level of
performance.
A) Performance quality
B) Product style
C) Branding
D) Conformance quality
E) Product design
Answer: D
Skill: Concept
Difficulty: Easy
54) Style simply describes the ________ of a product.

A) quality
B) appearance
C) utility
D) durability
E) long-term benefits
Answer: B
Skill: Concept
Difficulty: Easy
18
55) ________ contributes to a product's usefulness as well as to its looks.
A) Sensational style
B) Good design
C) Quality
D) Consistency
E) Packaging
Answer: B
Skill: Concept
Difficulty: Easy
56) A good design begins with ________.

A) brainstorming new product ideas
B) making prototypes of the planned product
C) identifying the most suitable and aesthetic packaging
D) brainstorming technical product specifications
E) observing and understanding customers and shaping their product-use experience
Answer: E
Skill: Concept
57) Which of the following questions is most important for product designers to consider while
developing a product?
A) Which specific features of the product do customers like most?
B) How does the product appear to buyers?
C) What are the product's technical specifications?
D) How would customers use and benefit from the product?
E) How can the product be packaged to stimulate instant purchase?
Answer: D
Skill: Concept
19
58) A ________ is a name, term, sign, symbol, design, or a combination of these, that identifies
the maker or seller of a product or service.
A) feature
B) brand
C) line extension
D) package
E) value chain
Answer: B
Skill: Concept
Difficulty: Easy
59) ________ involves designing and producing the container or wrapper for a product.
A) Packaging
B) Patenting
C) Servicing
D) Co-branding
E) Labeling
Answer: A
Skill: Concept
Difficulty: Easy
60) A product's ________ identifies the product or brand, describes several things about the
product, and promotes the brand.
A) line extension
B) portfolio
C) label
D) design
E) feature
Answer: C
Skill: Concept
20
61) The ________ requires sellers to provide detailed nutritional information on food products.
A) Fair Packaging and Labeling Act of 1966
B) Nutritional Labeling and Educational Act of 1990
C) Glass-Steagall Act
D) Commodity Futures Modernization Act of 2000
E) Federal Trade Commission Act of 1914
Answer: B
Skill: Concept
Difficulty: Easy
62) The first step in designing support services is to ________.

A) add new services that will both delight customers and yield profits to the company
B) closely observe the product and pricing strategies of consumers
C) survey customers to assess the value of current services and obtain ideas for new ones
D) prevent brand dilution
E) encourage customers to try new products
Answer: C
Skill: Concept
Difficulty: Easy
63) A ________ is a group of products that are closely related because they function in a similar
manner, are sold to the same customer groups, are marketed through the same type of outlets, or
fall within given price ranges.
A) product line
B) line extension
C) private brand
D) multibrand
E) new brand
Answer: A
Skill: Concept
Difficulty: Easy
21
64) The major product line decision involves product ________, the number of items in the
product line.
A) features
B) line depth
C) line conformance
D) line length
E) packaging
Answer: D
Skill: Concept
Difficulty: Easy
65) ________ involves adding more items within the present range of the product line.
A) Market diversification
B) Brand extension
C) Product line filling
D) Upward product line stretching
E) Downward product line stretching
Answer: C
Skill: Concept
Difficulty: Easy
66) Titan Inc., an automobile manufacturer based in Utah, recently added two new models to its
existing line of sedans in order to increase profits and satisfy dealers. This is an example of
________.
A) line filling
B) social marketing
C) market diversification
D) negative brand equity
E) person marketing
Answer: A
Skill: Application
22
67) ________ occurs when a company lengthens its product line beyond its current range.
A) Product line filling
B) Product line stretching
C) Co-branding
D) Niche marketing
E) Market diversification
Answer: B
Skill: Concept
Difficulty: Easy
68) Proton Corp. is an automobile manufacturer known for producing efficient, durable, and low-
priced cars. Recently, the company launched a new range of luxury cars to broaden its market
appeal and to add prestige to its existing line of cars. This is an example of ________.
A) social marketing
B) product line filling
C) product line stretching
D) internal marketing
E) cannibalization
Answer: C
Skill: Application
69) A ________ consists of all the product lines and items that a particular seller offers for sale.
A) product mix
B) store brand
C) supply chain
D) value chain
E) line extension
Answer: A
Skill: Concept
Difficulty: Easy
23
70) Product mix ________ refers to the number of different product lines the company carries.
A) length
B) height
C) width
D) consistency
E) depth
Answer: C
Skill: Concept
Difficulty: Easy
71) Product mix ________ refers to the total number of items a company carries within its
product lines.
A) length
B) depth
C) height
D) width
E) consistency
Answer: A
Skill: Concept
Difficulty: Easy
72) Product mix ________ refers to the number of versions offered for each product in the line.
A) length
B) depth
C) height
D) width
E) consistency
Answer: B
Skill: Concept
Difficulty: Easy
24
73) The ________ of the product mix refers to how closely related the various product lines are
in end use, production requirements, distribution channels, or some other way.
A) length
B) depth
C) consistency
D) width
E) height
Answer: C
Skill: Concept
Difficulty: Easy
74) A well-known cosmetic company in New York City added new product lines in order to
increase its business. In other words, it ________.
A) lengthened its existing product line
B) decreased its product line consistency
C) widened its product mix
D) engaged in market diversification
E) engaged in social marketing
Answer: C
Skill: Application
25
Refer to the scenario below to answer the following question(s).
Ruben Delgado built his enterprise on the faithful patronage of four specialty shops and a large
contract from Elmore Distributors. But after two years, the maker of novelty pens and pencils
had to rethink his strategy when his contract with Elmore ended.
Ruben built a company reputation on the manufacturing and distribution of a variety of wooden
writing utensils with customized engravings. Specialty shops loved to display the products in
their fancy, lighted showcases, but such specialty shops alone were not profitable. Ruben
Delgado established a brand name, known merely as Delgado, and decided to expand on it.
Ruben extended his writing utensil lines to include quills, felt-tip pens, and multiple-cartridge
pens that write in different colors. He even added a line of various grades of personalized
stationery and business cards. Perhaps Ruben's biggest added touch, however, was the addition
of two salespeople who would work to explain the diverse array of products offered by Delgado,
as well as nurture existing accounts.
"We make an excellent product," Ruben Delgado stated, "and we honor a good guarantee on
everything we sell. But let's face it—we face hundreds of competitors! We need Delgado
representatives out there to help prospects understand what they should demand in something as
simple as a writing tool." The Delgado brand was fast-becoming synonymous with top-notch
customer service. Part of the purchase package brought personal visits from the Delgado
representative, before the purchase and long after.
75) The new felt-tip pens, multiple-cartridge pens, and quills offered by Ruben Delgado are
examples of ________.
A) product line filling
B) multibranding
C) megabranding
D) product line inconsistencies
E) co-branding
Answer: A
Skill: Application
76) Style is a larger concept than design. Design simply describes the appearance of a product.
Answer: FALSE
Skill: Concept
26
77) Branding decisions include determining a product price.
Answer: FALSE
Skill: Concept
Difficulty: Easy
78) For few companies, the package itself has become an important promotional medium.
Answer: FALSE
Skill: Concept
79) Labels range from simple tags attached to products to complex graphics that are part of the
packaging.
Answer: TRUE
Skill: Concept
80) A product line consists of unrelated products that are sold to diverse customer groups.
Answer: FALSE
Skill: Concept
Difficulty: Easy
81) Product line filling is overdone if it results in cannibalization and customer confusion.
Answer: TRUE
Skill: Concept
Difficulty: Easy
82) A company cannot stretch its product line downward.

Answer: FALSE
Skill: Concept
Difficulty: Easy
27
83) Product mix width refers to the total number of items a company carries within its product
lines.
Answer: FALSE
Skill: Concept
Difficulty: Easy
84) Companies stretch downward to add prestige to their current products.

Answer: FALSE
Skill: Concept
Difficulty: Easy
85) A company's product mix has four important dimensions: width, length, depth, and
consistency.
Answer: TRUE
Skill: Concept
Difficulty: Easy
86) How does branding help buyers?

Answer: Branding helps buyers in many ways. Brand names help consumers identify products
that might benefit them. Brands also say something about product quality and consistency—
buyers who always buy the same brand know that they will get the same features, benefits, and
quality each time they buy.
AACSB: Application of knowledge; Written and oral communication
Skill: Concept
87) When does product line stretching occur?

Answer: Product line stretching occurs when a company lengthens its product line beyond its
current range.
Skill: Concept
28
88) Define consistency of the product mix.
Answer: The 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.
Skill: Concept
89) Name and describe the principal decisions companies make regarding their individual
products and services.
Answer: Individual product decisions involve: 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. Package decisions
often include designing labels, which identify, describe, and possibly promote the product.
Labeling identifies the product and may describe and promote the product and brand. Companies
also develop product support services that enhance customer service and satisfaction and
safeguard against competitors.
Skill: Concept
90) Describe the principal functions of packaging.

Answer: Packaging involves designing and producing the container or wrapper for a product.
Traditionally, the primary function of the package was to hold and protect the product. In recent
times, however, packaging has become an important marketing tool as well. Increased
competition and clutter on retail store shelves means that packages must now perform many sales
tasks—from attracting buyers, to communicating brand positioning, to closing the sale.
Skill: Concept
29
91) Briefly describe 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. As a result, several federal and
state laws regulate labeling. The most prominent is the Fair Packaging and Labeling Act of 1966,
which set mandatory labeling requirements, encouraged voluntary industry packaging standards,
and allowed federal agencies to set packaging regulations in specific industries. Labeling has
been affected in recent times by unit pricing (stating the price per unit of a standard measure),
open dating (stating the expected shelf life of the product), and nutritional labeling (stating the
nutritional values in the product). The Nutritional Labeling and Educational Act of 1990 requires
sellers to provide detailed nutritional information on food products, and recent sweeping actions
by the Food and Drug Administration (FDA) regulate the use of health-related terms such as low
fat, light, and high fiber.
AACSB: Ethical understanding and reasoning
Skill: Application
92) What are the different dimensions of a company's product mix? Briefly describe each
dimension.
Answer: A company's product mix has four important dimensions: width, length, depth, and
consistency.
Product mix width refers to the number of different product lines the company carries.
Product mix length refers to the total number of items a company carries within its product lines.
Product mix depth refers to the number of versions offered for each product in the line.
Finally, the 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.
Skill: Concept
93) Service ________ means that services cannot be seen, tasted, felt, heard, or smelled before
they are bought.
A) inseparability
B) variability
C) intangibility
D) perishability
E) heterogeneity
Answer: C
Skill: Concept
Objective: LO 8.3: Identify the four characteristics that affect the marketing of services and the
additional marketing considerations that services require.
Difficulty: Easy
30
94) Which of the following actions is a restaurant owner most likely to take in order to reduce
problems associated with service intangibility?
A) increase entree prices after 6:00 p.m.
B) provide clean tablecloths and fresh napkins for each new customer
C) empower employees to handle customer complaints
D) offer discounted prices for appetizers ordered during happy hour
E) hold regular employee workshops focusing on customer service
Answer: B
AACSB: Reflective thinking
Skill: Critical Thinking
95) Tristan and Juliet, a newly married couple who intend to go to Egypt for their honeymoon,
bought a Europe travel package on Jizo Inc., an online travel site. As they have never seen
Europe or used the services of Jizo before, they were largely dependent on other customers'
feedback and signals for service quality. Which of the following characteristics of service is
highlighted in this instance?
A) service intangibility
B) service inseparability
C) service variability
D) service perishability
E) service distinction
Answer: A
Skill: Application
96) Service ________ means that the quality of services depends on who provides them as well
as when, where, and how they are provided.
A) intangibility
B) inseparability
C) variability
D) perishability
E) heterogeneity
Answer: C
Skill: Concept
Difficulty: Easy
31
97) The customers of Parry's Hair Salon have noticed that the quality of a haircut depends on
who provides it as well as when, where, and how the service is provided. Which of the following
characteristics of service is evident in this instance?
A) service intangibility
B) service inseparability
C) service perishability
D) service variability
E) service distinction
Answer: D
Skill: Application
98) Service ________ means that services cannot be stored for later sale or use.
A) consistency
B) perishability
C) variability
D) intangibility
E) inseparability
Answer: B
Skill: Concept
Difficulty: Easy
99) Alex Smith rents storage space to college students who go home for the summer but do not
want to haul all of their property home and back. The business is profitable during the summer
months, but when the storage space is unoccupied in the off-season, Alex loses money. Which of
the following characteristics of service is most likely the source of Alex's problem?
A) intangibility
B) perishability
C) inconsistency
D) variability
E) inseparability
Answer: B
Skill: Application
32
100) According to the service profit chain, superior internal service quality results in ________.
A) lesser service value
B) increased word-of-mouth sales
C) reduced after-sale services
D) more satisfied, loyal, and hardworking employees
E) negative brand equity of newly launched products
Answer: D
Skill: Concept
101) Through ________, a service firm orients and motivates its customer-contact employees
and supporting service people to work as a team to provide customer satisfaction.
A) service inseparability
B) social marketing
D) internal marketing
E) corporate image marketing
Answer: D
Skill: Concept
102) ________ means that service quality depends on the quality of buyer-seller interaction
during the service encounter.
A) Interactive marketing
B) Service differentiation
C) Service productivity
D) Corporate image marketing
E) Traditional external marketing
Answer: A
Skill: Concept
33
103) Service companies can differentiate their service delivery by ________.
A) using symbols and logos
B) instituting a hierarchical organizational structure
C) offering innovative product features
D) de-emphasizing branding
E) having more able and reliable customer-contact people
Answer: E
Skill: Concept
104) Apollo Couriers, a company providing international express mail services, has a proactive
customer communications team. The primary job of this team is to identify situations that led to
customer dissatisfaction, and then provide quick remedies to fix the problems. To a great extent,
this has helped Apollo in winning customer loyalty. In this instance, Apollo has benefitted from
________.
A) product differentiation
B) good service recovery
C) multibranding
D) place marketing
E) co-branding
Answer: B
Skill: Application
105) Service inseparability means that the quality of services depends on who provides them, as
well as when, where, and how they are provided.
Answer: FALSE
Skill: Concept
106) In a service business, the customer and the front-line service employee interact to co-create
the service.
Answer: TRUE
Skill: Concept
Difficulty: Easy
34
107) Within a hotel renowned for its superior service, one registration-desk employee may be
cheerful and efficient, whereas another may be irritable and slow. This exemplifies service
consistency.
Answer: FALSE
Skill: Application
108) Service companies can differentiate their service delivery by having more able and reliable
customer-contact people.
Answer: TRUE
Skill: Concept
Difficulty: Easy
109) Product quality is harder to define and judge than service quality.
Answer: FALSE
Skill: Concept
Difficulty: Easy
110) Good service recovery can turn angry customers into loyal ones.
Answer: TRUE
Skill: Concept
Difficulty: Easy
111) As competition and costs increase, and as productivity and quality decrease, what are the
three major marketing tasks facing service companies in contemporary times?
Answer: Today, as competition and costs increase, and as productivity and quality decrease,
more service marketing sophistication is needed. Service companies face three major marketing
tasks: They want to increase their service differentiation, service quality, and service
productivity.
Skill: Concept
35
112) Define interactive marketing. Why is it considered an important skill for service marketers?
Answer: Interactive marketing means that service quality depends heavily on the quality of the
buyer-seller interaction during the service encounter. In product marketing, product quality often
depends little on how the product is obtained. But in services marketing, service quality depends
on both the service deliverer and the quality of delivery. Service marketers, therefore, have to
master interactive marketing skills.
Skill: Concept
113) What are the key service characteristics a company must consider when designing
marketing programs? Briefly describe each characteristic.
Answer: A company must consider four special service characteristics when designing
marketing programs: intangibility, inseparability, variability, and perishability.
Service intangibility means that services cannot be seen, tasted, felt, heard, or smelled before
they are bought.
Service inseparability means that services cannot be separated from their providers, whether the
providers are people or machines.
Service variability means that the quality of services depends on who provides them as well as
when, where, and how they are provided.
Service perishability means that services cannot be stored for later sale or use.
AACSB: Analytical thinking; Written and oral communications
Skill: Concept
114) Distinguish between the service profit chain and internal marketing.
Answer: The service profit chain links service firm profits with employee and customer
satisfaction. This chain consists of five links: internal service quality, satisfied and productive
service employees, greater service value, satisfied and loyal customers, and healthy service
profits and growth.
On the other hand, internal marketing means that the service firm must orient and motivate its
customer-contact employees and supporting service people to work as a team to provide
customer satisfaction. Marketers must get everyone in the organization to be customer centered.
In fact, internal marketing must precede external marketing.
Skill: Concept
36
115) 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 set a company's offers apart from
competitors' offers. Service companies can differentiate their service delivery by having more
able and reliable customer-contact people, developing a superior physical environment in which
the service product is delivered, or designing a superior delivery process. Services can also be
differentiated through symbols and branding, by creating an image that sets a company's services
apart from that of its competitors.
Skill: Concept
116) ________ represent(s) consumers' perceptions and feelings about a product and its
performance.
A) Product lines
B) Labeling
C) Brands
D) Design
E) Product attributes
Answer: C
Skill: Concept
Objective: LO 8.4: Discuss branding strategy—the decisions companies make in building and
managing their brands.
Difficulty: Easy
117) Brand ________ is the differential effect that knowing the brand name has on customer
response to the product and its marketing.
A) differentiation
B) knowledge
C) equity
D) personality
E) relevance
Answer: C
Skill: Concept
Difficulty: Easy
37
118) BlueFin canned tuna has higher sales than its unbranded rival, even though the unbranded
tuna costs $0.45 less per can than BlueFin tuna. BlueFin most likely has ________.
A) an aggressive brand personality
B) high brand equity
C) no brand commitment
D) negative brand equity
E) low brand relevance
Answer: B
Skill: Application
119) Which of the following is one of the four consumer perception dimensions used by ad
agency Young & Rubicam to measure brand strength?
A) brand conformance
B) brand consistency
C) brand convenience
D) brand extension
E) brand relevance
Answer: E
Skill: Concept
Difficulty: Easy
120) Brand ________ refers to how consumers feel if a brand meets their needs.
A) differentiation
B) equity
C) dilution
D) esteem
E) relevance
Answer: E
Skill: Concept
Difficulty: Easy
38
121) Brand ________ refers to how highly consumers regard and respect the brand.
A) esteem
B) conformance
C) differentiation
D) relevance
E) knowledge
Answer: A
Skill: Concept
Difficulty: Easy
122) After a brief stay at a luxury hotel in Paris, Benjamin Sanders noted that the hotel had kept
every promise it made when he booked the room, meeting all his needs. He added that it was a
"thoroughly comfortable and opulent experience." According to Young & Rubicam's Brand Asset
Valuator, this reflects brand ________.
A) valuation
B) esteem
C) relevance
D) differentiation
E) knowledge
Answer: C
Skill: Application
123) Which of the following is true with regard to brand equity?

A) Brand equity refers to how much consumers know about the brand.
B) High brand equity provides a company with many competitive advantages.
C) A brand has positive brand equity if consumers react less favorably to it than to an unbranded
version.
D) Positive brand equity derives from low brand esteem.
E) The total financial value of a brand can be easily measured.
Answer: B
Skill: Concept
Difficulty: Easy
39
124) The fundamental asset underlying brand equity is ________, the value of customer
relationships that the brand creates.
A) the customer mix
B) customer equity
C) the product experience
D) service variability
E) the service encounter
Answer: B
Skill: Concept
Difficulty: Easy
125) Which of the following is the lowest level on which marketers can position their brands in
target customers' minds?
A) beliefs and values
B) product benefits
C) product attributes
D) after-sale services
E) brand equity
Answer: C
Skill: Concept
Difficulty: Easy
126) The strongest brands are positioned on ________.

A) desirable benefit
B) good packaging
C) service inseparability
D) strong beliefs and values
E) product attributes
Answer: D
Skill: Concept
Difficulty: Easy
40
127) Gainville Inc. manufactures Android phones. Each new Gainville phone launch advances
the cause of democratizing technology. Gainville, an expert in fostering customer community,
engages customers at a deep, emotional level, and has been ranked one of the Breakaway Brands
by the brand consultancy Kendell Associates. Gainville is most likely positioned on ________.
A) basic product attributes
B) short-term benefits
D) self-image enhancement
E) strong beliefs and values
Answer: E
Skill: Application
128) A good brand name should most likely be ________.

A) trendy
B) complex
C) long
D) conventional
E) distinctive
Answer: E
Skill: Concept
Difficulty: Easy
129) An increasing number of retailers and wholesalers have created their own ________, also
called store brands.
A) national brand
B) support brand
C) private brand
D) generic brand
E) manufacturer's brand
Answer: B
Skill: Concept
41
130) Costco's Kirkland Signature products are an example of a ________.
A) national brand
B) support brand
C) private brand
D) generic brand
E) manufacturer's brand
Answer: C
Skill: Concept
131) Which of the following is true with regard to store brands?

A) Store brands have been declining in popularity and strength for more than two decades.
B) Store brands are also known as national brands.
C) Store brands are created and owned by resellers of a product or service.
D) Increasing consumer distrust toward store brands has led to a store-brand slump.
E) Store brands are growing far slower than manufacturer's brands.
Answer: C
Skill: Concept
132) Some companies obtain the rights to use the names or symbols previously created by other
manufacturers for a fee. This process is known as ________.
A) multibranding
B) positioning
C) segmenting
D) co-branding
E) licensing
Answer: E
Skill: Concept
Difficulty: Easy
42
133) ________ occurs when two established brand names of different companies are used on the
same product.
A) Market diversification
B) Niche marketing
C) Co-branding
D) Licensing
E) Cannibalization
Answer: C
Skill: Concept
Difficulty: Easy
134) Which of the following is an advantage offered by co-branding?

A) Manufacturers do not have to invest in creating their own brand names with co-branding.
B) Co-branding allows retailers to sell exclusive products that cannot be purchased from
competitors.
C) Co-branding allows a company to expand its existing brand into a category it might otherwise
have difficulty entering alone.
D) Co-branding dilutes brand equity and increases the appeal of store brands.
E) Co-branding does not involve complex legal contracts and licenses.
Answer: C
Skill: Concept
135) ________ occurs when a company introduces additional items in a given product category
under the same brand name, such as new flavors, forms, colors, ingredients, or package sizes.
A) Line extension
B) Megabranding
C) Interactive marketing
D) Internal marketing
E) Co-branding
Answer: A
Skill: Concept
Difficulty: Easy
43
136) ________ involves the use of a successful brand name for new or modified products in a
new category.
A) A line extension
B) A product line
C) A brand extension
D) Co-branding
E) Cannibalization
Answer: C
Skill: Concept
Difficulty: Easy
137) Symmonds Inc., a company manufacturing breakfast cereals, has extended its special
Crispo cereal brand into a full line of breakfast cereals plus protein shakes, fruit and sandwich
spreads, butter, and doughnuts. This is an example of ________.
A) line extension
B) brand extension
C) licensing
D) co-branding
E) cannibalization
Answer: B
Skill: Application
138) Which of the following is a potential drawback of multibranding?

A) Multibranding tends to decrease brand loyalty.
B) Company resources are likely to be concentrated on a single brand.
C) Multibranding curbs the growth opportunities of established brands.
D) Each brand might obtain only a small market share, and none may be very profitable.
E) Multibranding causes companies to refrain from product diversification.
Answer: D
Skill: Concept
44
139) Which of the following strategies involves weeding out weaker brands and focusing
marketing dollars only on brands that can achieve the number one or number two market share
positions with good growth prospects in their categories?
A) megabrand strategies
B) niche marketing strategies
C) social marketing strategies
D) co-branding
E) licensing
Answer: A
Skill: Concept
Difficulty: Easy
140) While advertising campaigns can help create name recognition, brand knowledge, and
perhaps even some brand preference, brands are not maintained by advertising but by ________.
A) brand differentiation
B) line extensions
C) brand experiences
D) brand sponsorships
E) brand awareness
Answer: C
Skill: Concept
Difficulty: Easy
141) Attributes are the most desirable level for brand positioning because competitors can easily
copy attributes.
Answer: FALSE
Skill: Concept
Difficulty: Easy
142) The strongest brands do not engage customers on a deep, emotional level.
Answer: FALSE
AACSB: Reflective thinking
Skill: Concept
Difficulty: Easy
45
143) Co-branding occurs when retailers and wholesalers create their own store brands.
Answer: FALSE
Skill: Concept
Difficulty: Easy
144) Line extension refers to extending an existing brand name to new product categories.
Answer: FALSE
Skill: Concept
Difficulty: Easy
145) Multibranding offers a way to establish different features that appeal to different customer
segments, lock up more reseller shelf space, and capture a larger market share.
Answer: TRUE
Skill: Concept
Difficulty: Easy
146) Briefly explain the concept of brand equity.

Answer: Brand equity is the differential effect that knowing the brand name has on customer
response to the product and its marketing. It's a measure of the brand's ability to capture
consumer preference and loyalty. A brand has positive brand equity when consumers react more
favorably to it than to a generic or unbranded version of the same product. It has negative brand
equity if consumers react less favorably than to an unbranded version.
Skill: Concept
46
147) What are the desirable qualities for a brand name?
Answer: Desirable qualities for a brand name include the following:
1. It should suggest something about the product's benefits and qualities.
2. It should be easy to pronounce, recognize, and remember.
3. It should be distinctive.
4. It should be extendable.
5. The name should translate easily into foreign languages.
6. It should be capable of registration and legal protection.
Skill: Concept
148) What is a private brand?

Answer: A brand created and owned by a reseller of a product or service is known as a private
brand or store brand.
Skill: Concept
Difficulty: Easy
149) What are the different brand sponsorship options available to manufacturers?
Answer: A manufacturer has four sponsorship options. The product may be launched as a
national brand (or manufacturer's brand), as when Samsung and Kellogg sell their output under
their own brand names (the Samsung Galaxy tablet or Kellogg's Frosted Flakes). Or the
manufacturer may sell to resellers who give the product a private brand (also called a store brand
or distributor brand). Although most manufacturers create their own brand names, others market
licensed brands. Finally, two companies can join forces and co-brand a product.
Skill: Concept
47
150) A company has four choices when it comes to developing brands. Describe them.
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.
Skill: Concept
48

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Principles of Marketing, 16e (Kotler)

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

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

3) Which of the following exemplifies a service?

5) Which of the following is true with regard to services?

6) Which of the following is an example of a pure tangible good?

11) ________ are industrial products.

12) Consumer products refer to ________.

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

18) A hickory rocking chair, handmade by an Amish woodcarver in Lancaster, Pennsylvania

23) Installations consist of ________.

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

41) Give examples of pure tangible goods.

42) What is a product?

43) How do consumers perceive products?

44) Name some common convenience products.

46) How are specialty products distributed?

54) Style simply describes the ________ of a product.

56) A good design begins with ________.

62) The first step in designing support services is to ________.

82) A company cannot stretch its product line downward.

84) Companies stretch downward to add prestige to their current products.

86) How does branding help buyers?

87) When does product line stretching occur?

90) Describe the principal functions of packaging.

123) Which of the following is true with regard to brand equity?

126) The strongest brands are positioned on ________.

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

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

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

138) Which of the following is a potential drawback of multibranding?

146) Briefly explain the concept of brand equity.

148) What is a private brand?

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