Chapter 11

Chapter 11
MANAGING PRODUCTS, SERVICES, AND BRANDS

Test Item Table
Major Section of the

Level of Learning
Chapter
Level 1: Definition Level 2: Conceptual Level 3: Application
(Knows Basic (Understands Concepts & (Applies Principles)
Terms & Facts) Principles)
Gatorade: A Thirst 1, 2
for Competition
(pp. 233-234)
The Product Life 3, 4, 12, 15, 16, 20, 5, 6, 8, 14, 18, 22, 26, 27, 32, 7, 9, 10, 11, 13, 17, 19, 21, 23,
Cycle 24, 36, 52, 53, 55, 59, 33, 34, 37, 38, 39, 40, 43, 44, 25, 28, 29, 30, 31, 35, 41, 42,
(pp. 234-241) 64, 66, 69, 72, 73, 74, 45, 47, 54, 56, 57, 58, 60, 61, 46, 48, 49, 50, 51, 63, 65, 67,
75, 76, 202 62, 68, 70, 71, 201, 203, 204, 77, 78, 79, 80, 81, 82
205, 206
Managing the Product 83, 87, 94, 104, 106, 93, 95, 103, 207, 209 84, 85, 86, 88, 89, 90, 91, 92,
Life Cycle 107, 108 96, 97, 98, 99, 100, 101, 102,
(pp. 241-243) 105, 109, 208
Branding and Brand 110, 111, 112, 114, 116, 118, 119, 120, 121, 122, 113, 115, 134, 135, 141, 142,
Management 117, 136, 137, 138, 123, 124, 125, 126, 127, 128, 143, 144, 146, 152, 154, 156,
(pp. 244-249) 139, 140, 145, 150, 129, 130, 131, 132, 133, 147, 159
151, 153, 155, 157, 148, 149, 160, 210, 212, 213,
158, 161, 162, 211 214, 215
Creating Customer 163, 164, 169, 170, 165, 166, 167, 168, 172, 216 173, 174, 175
Value Through 171
Packaging and
Labeling
(pp. 249-250)
Managing the 182, 187, 188, 196, 176, 177, 178, 179, 184, 185, 180, 181, 183, 189, 190, 193
Marketing of Services 197 186, 191, 192, 194, 195, 198,
(p. 250-252) 217, 218
Video Case: BMW: 199, 200

Newness and the
Product Life Cycle
(pp. 254-255)
Note: Bold numbers indicate short essay questions.
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CHAPTER 11
MULTIPLE CHOICE QUESTIONS
11-1 CHAPTER OPENING EXAMPLE: GATORADE CONCEPTUAL
Which of the following statements about Gatorade is true?
a. Michael Jordan has been a Gatorade spokesperson.

b. International opportunities were vigorously pursued.
c. Distribution of Gatorade expanded first to include convenience stores and supermarkets.
d. The original Gatorade was a liquid with a lemon-lime flavor.
e. All of the above statements about Gatorade are true.
Answer: e Page: 233

Rationale: Stokely-Van Camp Co. bought the Gatorade formula in 1967. When Quaker Oats
purchased Stokely-Van Camp in 1983, executives quickly grew sales through a variety of means
including those mentioned above.
11-2 CHAPTER OPENING EXAMPLE: GATORADE CONCEPTUAL
Which of the following statements about Gatorade is true?
a. Gatorade began as a rehydration beverage for a football team.

b. Gatorade has plans to expand to the Latin American market before the end of this decade.
c. Gatorade was first only available through catalogs or mail order.
d. The Federal Trade Commission protects the Gatorade brand name from becoming generic.
e. All of the above statements about Gatorade are true.
Answer: a Page: 233

Rationale: Alternative a is true. The University of Florida football team physician concocted
the beverage in 1965 as a rehydration beverage for the schools football team. Gatorade is sold in
47 countries including Latin America. Gatorade was first distributed through convenience stores
and supermarkets. Companies, not the Federal Trade Commission, are responsible for protecting
their own brand names.
11-3 PRODUCT LIFE CYCLE DEFINITION
A concept that describes the stages a new product goes through in the marketplaceintroduction,
growth, maturity, and decline is called:
a. the retail life cycle.

b. the product life cycle.
c. the marketing mix.
d. the product growth cycle.
e. product commercialization.
Answer: b Page: 234; Figure 11-1

Rationale: Key term definitionproduct life cycle
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11-4 INTRODUCTION STAGE DEFINITION
The stage of the product life cycle when a product is first introduced to its intended target market
is called the __________ stage.
a. growth
b. commercialization
c. launch
d. introduction
e. awareness-trial
Answer: d Page: 234

Rationale: The product life cycle describes the stages a new product goes through in the
marketplace: introduction, growth, maturity, and decline. The introduction stage of the product
life cycle occurs when a product is first introduced to its intended target market.
11-5 INTRODUCTION STAGE CONCEPTUAL
Lack of profit in the introductory stage of the product life cycle is very often the result of:
a. insufficient allocation of resources to the marketing mix.

b. poor selection of distribution channels.
c. high taxes.
d. large investment costs in product development.
e. ineffective execution of the marketing program.
Answer: d Page: 234 Other Location: web

Rationale: The lack of profit is often a result of the large costs of product development.
The marketing objective for a product in the __________ stage of the product life cycle is to
promote consumer awareness and gain trial.
a. introduction
b. growth
c. maturity
d. decline
e. product repositioning
Answer: a Page: 234 Other Location: web

Rationale: The marketing objective for a company at the introduction stage is to promote
consumer awareness and gain trial--the first purchase of a product by a consumer.
11-7 INTRODUCTION STAGE APPLICATION
A few years ago Who Wants to Be a Millionaire premiered as the first nighttime game show in a
couple of decades. The marketing for the show was intent on making television viewers aware of
its existence and excited enough about the show that we would watch the first episode. Which of
the following statements about televised game shows is true?
a. Who Wants to Be a Millionaire was in the introduction stage of the product life cycle of
televised nighttime game shows when it premiered.
b. Because television has been around for many years, all programs fall naturally into the
maturity stage.
c. Televised programs are either in the introduction stage or the growth stage and are
discontinued when they move into the maturity stage.
d. All televised programming uses a three-stage product life cycle--growth, maturity, and
decline.
e. The product life cycle is totally inapplicable to any television genre.
Answer: a Page: 234

Rationale: The televised game show was a new product category on television and as such was
in the introduction stage. Because producers are always trying to gain and keep audiences,
program types move in and out of favor, which means new products are introduced and others go
into decline. There are program types today that can be said to be in their maturity such as news
programs like Meet the Press. The four-stage product life cycle is applicable to television genres.
A product in the introduction stage of the product life cycle should have which of the following
marketing objectives?
a. to gain awareness and stimulate trial

b. to stress differentiation
c. to maintain brand loyalty
d. to gain as much distribution as possible
e. to reveal a marketing niche
Answer: a Page: 234

Rationale: The marketing objective for a product at the introduction stage is to promote
consumer awareness and gain trial--the first purchase of a product by consumer.
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One of the newest types of television shows is the category called reality shows. According to
the product life cycle, what was the objective of the marketers of these reality shows when they
were in the introduction stage of the product life cycle?
a. to gain awareness and stimulate trial

b. to stress differentiation
c. to maintain brand loyalty
d. to gain as much distribution as possible
e. to reveal a marketing niche
Answer: a Page: 234

Rationale: The marketing objective for a company at the introduction stage is to promote
consumer awareness and gain trial--the initial watching of the TV show by viewers.
11-10 PRIMARY DEMAND APPLICATION
Gillette spent $35 million in advertising to introduce the Sensor razor to consumers. Such
expenditures are often made to stimulate __________, or desire for the product class, rather than
for a specific brand, when there are no competitors with the same product.
a. additional marketing research

b. innovative sampling
c. primary demand
d. initial data gathering
e. repeat purchase
Answer: c Page: 234

Rationale: Text term definitionprimary demand
Scientists have discovered a new medical treatment but before they can market it, physicians and
patients must be aware of its existence. In other words, its manufacturer must create __________
demand.
a. selective
b. primary
c. derived
d. generic
e. secondary
Answer: b Page: 234

Rationale: Primary demand is the desire for the product class rather than for a specific brand
since there are few competitors with the same product. In this case, the medical treatment is new
so first the physicians and patients must be made aware of its existence.
11-12 PRIMARY DEMAND DEFINITION
During the introduction stage of the product life cycle, promotional expenditures are made to
stimulate consumer desire for an entire product class rather than for a specific brand. The
consumer desire that is stimulated is referred to as __________ demand.
a. selective
b. primary
c. derived
d. generic
e. secondary
Answer: b Page: 234

Rationale: Text term definitionprimary demand
The popular "Got Milk" advertising campaign was sponsored by the National Milk Board to
encourage more people to drink milk. This ad campaign stimulated __________ demand.
a. selective
b. primary
c. derived
d. generic
e. secondary
Answer: b Page: 234

Rationale: When expenditures are made to increase desire for a product class, such as milk, this
is an example of stimulating primary demand.
11-14 PRIMARY DEMAND CONCEPTUAL
Promotional expenditures at the introduction stage of the product life cycle are spent on:
a. contests and sweepstakes.

b. creating selective demand.
c. creating primary demand.
d. personal endorsements.
e. maintaining brand loyalty.
Answer: c Page: 234

Rationale: Companies often spend heavily on advertising and other promotion tools to build
awareness among consumers in the introduction stage. These expenditures are often made to
stimulate primary demand, or desire for the product class rather than for a specific brand since
there are few competitors with the same product.
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11-15 SELECTIVE DEMAND DEFINITION
During the growth stage of the product life cycle, promotional expenditures are made to stimulate
consumer desire for a specific brand due to increased competition. The consumer desire that is
stimulated is referred to as __________ demand.
a. selective
b. primary
c. derived
d. generic
e. secondary
Answer: a Page: 235

Rationale: Text term definitionselective demand
11-16 SELECTIVE DEMAND DEFINITION
As competitors introduce their own products, and the product progresses along its life cycle,
company attention is focused on creating __________ demand, or demand for a specific brand.
a. selective
b. primary
c. derived
d. generic
e. secondary
Answer: a Page: 235

Rationale: Text term definitionselective demand
11-17 SELECTIVE DEMAND APPLICATION
For years when most consumers thought of cranberries, they thought of the Ocean Spray brand.
Then Northland cranberry juice came on the market claiming that it was superior to the Ocean
Spray brand. Northland was creating __________ demand for its cranberry products.
a. selective
b. primary
c. derived
d. generic
e. secondary
Answer: a Page: 235

Rationale: Northland was interested in creating awareness for its brandnot its product
category so it was creating selective demand.
During the introduction stage of the product life cycle, the place element of the marketing mix is
highly involved with:
a. reducing inventory costs.

b. gaining distribution outlets.
c. guaranteeing there is adequate demand if a skimming pricing strategy is used.
d. building storage warehouses and distribution centers.
e. using an intermodal logistics system.

Rationale: Gaining distribution outlets for the product is important but often difficult because
retailers may be hesitant to carry a new product.
11-19 PRODUCT LIFE CYCLE APPLICATION
The music industry has changed dramatically over the years. In the 1970s, consumers purchased
8-track tapes. In the 1980s, cassette tapes caused the decline of 8-track tapes. In fact, today
consumers would experience difficulty in purchasing a new artist on 8-track tape. Now in the
2000s, compact discs have become very popular and are being purchased by music lovers of
every age and background. As sales of compact discs continue to grow at an increasing rate,
sales of cassette tapes are weakening, the profits are declining, and the product may face a fate
similar to that of 8-track tapes. Based upon this information, you can correctly conclude cassette
tapes are in the __________stage, and compact discs are in the __________ stage of the product
life cycle:
a. decline; growth
b. decline; introduction
c. maturity; growth
d. decline; maturity
e. maturity; introduction
Answer: a Page: 235

Rationale: The decline stage of the product life cycle occurs when sales begin to drop. As
presented in this question, cassette tapes are showing weaker sales and lower profits. Compact
discs, on the other hand, are showing rapid increases in sales. The rapid increase in sales is
characteristic of a product in the growth stage of the product life cycle.
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11-20 SKIMMING PRICING DEFINITION
During the introduction stage of the product life cycle, __________ may be used used. This
pricing strategy charges a high price to recoup the costs of product development.
a. penetration pricing
b. cost-plus pricing
c. ROI pricing.
d. market-oriented pricing
e. skimming pricing
Answer: e Page: 235; Figure 11-1

Rationale: Text term definitionskimming
11-21 SKIMMING PRICING APPLICATION
INGenius ATG introduced the microware oven-sized battery recycler in 1999. It was intended
for the business market. Companies could buy the recycler and use it to restore alkaline batteries
that are not normally recharged. The recycling does not let a battery live forever; but it does give
it a charge of about 80 percent of the energy it originally had. Depending on the size of the
battery, the recycler can hold up to 96 batteries. It takes 13 hours to recharge any battery. The
recycler was introduced at $3,000. When you consider that the R & D to develop this product
was quite high, you should suspect that INGenius ATG was using a __________ strategy.
c. ROI pricing.
e. skimming pricing
Answer: e Page: 235; Figure 11-1 Other Location: web

Rationale: Skimming pricing strategy charges a high price to recoup the costs of product
development.
11-22 SKIMMING PRICING CONCEPTUAL
A company follows a skimming strategy as part of introducing a new product to:
a. help recover costs of development and to capitalize on the price insensitivity of early buyers.
b. capitalize on the price sensitivity of early buyers and to postpone breakeven.
c. discourage competitors and build unit volume.
d. move the product into the maturity stage once primary demand has been created.
e. do all of the above.
Answer: a Page: 235

Rationale: During introduction, a high initial price may be used as part of a skimming strategy
to help the company recover the costs of development as well as take advantage of the price
insensitivity of early buyers. However, high prices tend to attract competitors eager to enter the
market because they see the opportunity for profit.
11-23 SKIMMING PRICING APPLICATION
When Texas Instruments (TI) introduced its pocket calculator in the early 1970s, it was a
tremendous product innovation, and TI set the mail order price at $495. What is the name of the
pricing strategy Texas Instruments used?
a. rip off
b. chiseling
c. opportunistic
d. skimming
e. caveat emptor
Answer: d Page: 235 Other Location: web

Rationale: During introduction, a high initial price may be used as part of a skimming strategy
to help the company recover the costs of development as well as take advantage of the price
insensitivity of early buyers. However, high prices tend to attract competitors eager to enter the
market because they see the opportunity for profit.
11-24 PENETRATION PRICING DEFINITION
During the introduction stage of the product life cycle, the strategy that discourages competitive
entry by charging a low price is referred to as:
a. penetration pricing.
b. cost-plus pricing.
c. ROI pricing.
d. market-oriented pricing.
e. skimming pricing.
Answer: a Page: 236

Rationale: Text term definitionpenetration pricing
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11-25 PENETRATION PRICING APPLICATION
Consumers who are frequently on the Internet more than likely use either Netscape Explorer or
Netscape as their Web browser. There is another option called Opera, which is faster and highly
customizable, a feature that neither Internet Explorer nor Netscape have. For example, it can be
set to suppress all pop-up ads and there are several mouse-controlled shortcuts available. Opera
was initially offered on the market for $29 and this included tech support. It was hoped that this
low price would build the volume of Opera users quickly. Opera used a __________ strategy.
c. ROI pricing
e. skimming pricing
Answer: a Page: 236

Rationale: Penetration pricing is pricing low to discourage competitive entry and help build unit
volume, though the company must closely monitor costs. Opera charged a low price to build
market share quickly for its new product.
11-26 PENETRATION PRICING CONCEPTUAL
To discourage competitive entry, a company can price its new product low, using penetration
pricing. This pricing strategy also helps to:
a. reduce costs.
b. increase profits.
c. build customer loyalty.
d. improve product quality.
e. build unit volume.
Answer: e Page: 236

Rationale: Penetration pricing is pricing low to discourage competitive entry and help build unit
volume, though the company must closely monitor costs.
Which of the following statements about the introduction stage of the product life cycle is true?
a. During the introduction stage, efforts are made to increase primary demand.
b. During the introduction stage, firms may choose a skimming pricing strategy.
c. During the introduction stage, firms may choose a penetration pricing strategy.
d. Generally the promotional message is to inform and educate the consumer.
e. All of the above statements about the introduction stage of the product life cycle are true.

Rationale: As shown in Figure 11-1, during the introduction stage, the marketing objective is to
gain awareness, to use either a skimming or penetration pricing strategy, to educate and inform
with promotion and to increase primary demand for the product class.
Opera.com introduced a new Web browser that can be easily customized to do what you want it
to dosuch as suppress all pop-up ads and retrieve previously visited websites quickly. Opera is
spending a lot of money to make potential consumers aware of the existence of a Web browser
that can be customized. Sales have been slow to rise over the past year, and profit has yet to be
achieved. In what stage of the product life cycle is this product category?
a. growth stage
b. decline stage
c. commercialization stage
d. maturity stage
e. introduction stage

Rationale: As shown in Figure 11-1, during the introduction stage, the marketing objective is to
gain awareness, to use either a skimming or penetration pricing strategy, to educate and inform
with promotion and to increase primary demand for the product class. In the case of web
browsers, primary demand has been stimulated; Opera.com is trying to stimulate selective
demand.
Technology that allows consumers to access information on the Internet from a cell phone is in
the introductory stage of its product life cycle. The industry is composed of several small firms
with state-of-the-art products that are neither standardized nor compatible with one another.
Moreover, these small firms have limited marketing expertise and little money to spend on
marketing; their common strength is engineering. This industry has welcomed the entry of a
giant in the mobile phone industry like Nokia because:
a. the small companies could leapfrog beyond Nokia's products.

b. Nokia's entry would help segment the market, establishing targets for the smaller firms.
c. Nokia set standards and is generating primary demand.
d. Nokia could solve the remaining technological problems.
e. Nokia could acquire the small, struggling firms.
Answer: c Page: 235

Rationale: Nokia has the marketing power to carry the industry through the introductory stage
by establishing industry-wide standards and stimulating primary demand.
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Imagine that Eveready has developed solar rechargeable batteries that cost only slightly more to
produce than regular batteries (less than the rechargeable batteries currently available) and can be
recharged by sunlight up to 5 times, after which they are meant to be discarded. Unfortunately,
the production process cannot be patented, and competitors could arrive within a few months.
Eveready's marketing efforts should include all the following EXCEPT:
a. skimming pricing.
b. widespread distribution.
c. high production capacity.
d. advertising aimed at brand name awareness.
e. introductory promotions to encourage trial.
Answer: a Page: 235; Figure 11-1

Rationale: Competition would be deterred if Eveready could create trial and brand loyalty for its
product. The skimming price strategy would work against this, and its high per unit profits would
likely attract competitors more quickly to the industry. Instead, Eveready would use penetration
pricing along with widespread distribution, advertising aimed at brand name awareness, and
introductory promotions to encourage trial and establish brand loyalty.
11-31 GROWTH STAGE APPLICATION
A few years ago Who Wants to Be a Millionaire premiered as the first nighttime game show in a
couple of decades. Once the show became a hit and televised several nights a week, other
networks quickly created their own version of what they hoped to be a successful game show
format. Greed and Twenty-One are the names of but two of the new shows that were created to
compete with Who Wants to Be a Millionaire. At this point in time the nighttime televised game
show entered which stage of its product life cycle?
a. growth stage
b. decline stage
c. commercialization stage
d. maturity stage

Rationale: The growth stage of the product life cycle is characterized by rapid increases in sales
as well as the appearance of competitors. As a result of more competitors and more aggressive
pricing, profit usually peaks during the growth stage.
11-32 GROWTH STAGE CONCEPTUAL
Which stage in the product life cycle is characterized by a rapid increase in sales and the
appearance of competitors?
a. introduction
b. growth
c. maturity
d. decline
e. profit

At which stage in the product life cycle do industry profits usually peak?
a. introduction
b. growth
c. maturity
d. decline
e. commercialization

Which of the following is a characteristic of the growth stage of the product life cycle?
a. advertising emphasis switches to primary demand

b. growing proportion of initial purchasers to repeat purchasers
c. slow, steady sales
d. competitors appear
e. pricing is more aggressive
Answer: d Page: 236; Figure 11-1

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11-35 GROWTH STAGE APPLICATION
A technology company has just begun to make a profit on its DVD-R discs (DVD discs in a
recordable format). Its promotional expenditures are aimed at trying to persuade potential
customers of the merits of its DVD-R discs. Even more money is being spent to develop the
firm's distribution system for its DVD-R discs. Since Apple's iMac now comes with a DVD
recorder as a standard part, several other companies have started producing DVD-R discs for the
market. What stage of the product life cycle is the DVD-R in?
a. commercialization stage
b. maturity stage
c. growth stage
d. decline stage
Answer: c Page: 236; Figure 11-1

Rationale: In this stage the competitors first appear, profitability becomes a reality, promotion
tries to create selective demand, and expanding distribution outlets for the growth in product sales
becomes important.
11-36 MATURITY STAGE DEFINITION
Which stage in the product life cycle is characterized by a slowing of industry sales?
a. introduction
b. growth
c. maturity
d. decline
e. comparability

Rationale: The third stage, maturity, is characterized by a slowing of total industry sales
revenue. Sales increase at a decreasing rate as fewer new buyers enter the market. Most
consumers who would buy the product are either repeat purchasers of the product or have tried
and abandoned it. Weaker competitors begin to leave the market. Profit declines because there is
fierce price competition among many sellers.
11-37 MATURITY STAGE CONCEPTUAL
During the maturity stage of the product life cycle, profit declines because:
a. there are fewer and fewer competitors in the market.

b. better products are only in the growth stage.
c. production costs increase the more a firm has to manufacture the same product.
d. there is fierce price competition among sellers.
e. all of the above.

consumers who would buy the product are either repeat purchasers of the product or have tried
and abandoned it. Weaker competitors begin to leave the market. Profit declines because there is
fierce price competition among many sellers.
The marketing objective of a firm whose product is in the maturity stage of the product life cycle
is to:
a. actively search out new first time users.

b. maintain existing buyers since new ones are hard to find.
c. actively reinforce competitors' marketing efforts.
d. maintain existing distributors and actively seek out new ones.
e. shift to a skimming price strategy.

Rationale: Marketing attention in the maturity stage is often directed toward holding market
share through further product differentiation and finding new buyers.
Promotional expenses at the maturity stage of the product life cycle are often directed towards:
a. creating demand for the product class.

b. reminding the consumer to use the product.
c. creating primary demand.
d. gaining new distributors.
e. eliminating distribution channels.
Answer: b Page: 238; Figure 11-1 Other Location: web

Rationale: As shown in Figure 11-1, promotion is usually reminder oriented.
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Which of the following statements is a characteristic of the maturity stage of the product life
cycle?
a. Often this stage is entered because of environmental or technological factors.

b. During this stage companies attempt to eliminate distribution channels.
c. Industry sales revenue peaks, which is one stage after industry profit peaks.
d. Industry profits peak because production and distribution costs are declining.
e. Industry profit peaks, which is one stage after industry sales revenue peaks.

Rationale: At the maturity stage industry sales revenue peaks while industry profit (which
peaked in the growth stage) is declining because of more competitors and more price competition.
11-41 MATURITY STAGE APPLICATION
The videocassette recorder (VCR) was introduced to the market in the late 1970s. Ninety-one
percent of American homes own at least one VCR. To maintain market share in the VCR market
and to get customers to purchase additional VCRs, its manufacturers have continually provided
for higher-quality recording capabilities and made the machines easier to watch and with different
features that allowed for quicker location of recorded programs. Because the goal of VCR
manufacturers is to maintain brand loyalty and market share, the product category is in the
__________ stage of its product life cycle.
a. introduction
b. growth
c. maturity
d. decline
e. harvesting
Answer: c Page: 238 Other Location: web

Rationale: Product differentiation is a commonly used strategy for products in the maturity stage
to maintain market share and brand loyalty.
11-42 MATURITY STAGE APPLICATION
Hershey's chocolate bars have been marketed in the United States for more than 100 years, and
are still a tremendous success, with a loyal following of consumers. The company began
advertising several years ago to hold its market share, and it has introduced several distinctive
new products. What stage of the product life cycle are Hershey's chocolate bars competing in?
a. development
b. introduction
c. growth
d. maturity
e. decline

consumers who would buy the product are either repeat purchasers of the product ( in this case)
or have tried and abandoned it. Weaker competitors begin to leave the market. Profit declines
because there is fierce price competition among many sellers. There is a full product line, shown
by the addition of several distinctive new products.
11-43 DECLINE STAGE CONCEPTUAL
Sales and profits both exhibit a steady downward trend throughout which stage of the product life
cycle?
a. introduction
b. growth
c. maturity
d. decay
e. decline
Answer: e Page: 238

Rationale: In the decline stage, both sales and profits are steadily dropping.
All products are assumed to have a complete product life cycle. Which of the following is NOT a
reason why products ultimately decline?
a. poor marketing
b. emergence of superior competitive products
c. all consumers' wants and needs inevitably change
d. non-marketing failures of firms
e. all the above are reasons for decline
Answer: c Page: 238

Rationale: There is no evidence that all consumer wants and needs inevitably change; instead
many tastes, especially those motivated by basic drives, appear unchanged throughout history.
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All of the following occur during the decline stage of the product life cycle EXCEPT:
a. sales decrease substantially.

b. the firm chooses the wrong marketing strategy, which results in an inappropriate marketing
program for the target market.
c. the uncontrollable environment changes.
d. promotional support for the product becomes minimal.
e. the number of competitors is reduced.

Rationale: Alternative b is the correct response because a firm may have had the appropriate
marketing strategy that led to the development and execution of the appropriate marketing
program for its product. However, this may have been insufficient to stimulate or maintain
selective demand because environmental factors (changes in consumer preferences, new
technologies, or other uncontrollable factor) may have caused a fundamental decline in sales for
the product class.
11-46 DECLINE STAGE APPLICATION
In the 1960s, television westerns were extremely popular. The shows were adventure shows with
settings and costumes that were very unlike what really existed. There was Bonanza, Wagon
Train, The Virginian, Laramie, etc. When viewers gradually stopped watching this category of
programs, production companies found the networks no longer wanted to televise such shows.
The television western as a product category entered the __________ stage.
a. decay
b. decommercialization
c. decline
d. maturity
e. harvested
Answer: c Page: 238

Rationale: The programs entered the decline stage with declining viewership (or sales).
To handle products in the decline stage of the product life cycle, companies often use either:
a. diversification or harvesting.
b. harvesting or contracting.
c. deletion or harvesting.
d. diversification or harvesting.
e. building or contracting.
Answer: c Page: 238

Rationale: To handle a declining product, a company often follows one of two strategies.
Deletion is dropping the product from the line; harvesting is retaining the product but reducing
support costs.
Three years ago Pokmon was the hottest name in toys, but as other more high-tech toys appeared
on the market, the popularity of Pokmon waned as did its sales. Some toy experts predict
Pokmon will soon be only a memory for toy retailers. Pokmon is in the __________ stage of
its product life cycle.
a. decay
b. decommercialization
c. decline
d. maturity
e. harvested
Answer: c Page: 238

Rationale: The decline stage occurs when sales begin to drop. The market has abandoned
Pokmon.
Your product has been suffering from steadily eroding sales and profits. You have tried a number
of options to revitalize the product's sales and profits, but after seven changes in your strategy,
you have yet to find success. Which of the following actions would be the LEAST appropriate
next step?
a. Delete the product from the line.

b. Retain the product, but reduce its support costs.
c. Stimulate primary demand.
d. Contract the production of the product.
e. Contract the marketing of the product.

Rationale: When its product reaches the decline stage company, it can follow one of two main
optionsdeletion or harvesting. These are described in Alternatives a and b. It's much too late
to try to stimulate primary demand for the product class, which normally occurs during the
introduction stage of the product life cycle, so alternative c is the least appropriate next step.
673
11-50 DELETION APPLICATION
During the 1990s, there was a backlash against artificial colors in food and other consumer
products. As a result, a lot of companies issued products that were clear. One example was
Crystal Pepsi. The product never really found a market and was __________, or dropped from
the Pepsi product line soon after its introduction.
a. diversified
b. aggregated
c. segmented
d. deleted
e. harvested
Answer: d Page: 238

Rationale: Dropping a product from a companys product line is called product deletion.
11-51 DELETION APPLICATION
In the 1960s, television westerns were extremely popular. The shows were adventure shows with
settings and costumes that were very unlike what really existed. There was Bonanza, Wagon
Train, The Virginian, Laramie, etc. When viewers gradually stopped watching this category of
programs, production companies found the networks no longer wanted to televise such shows.
The production companies used a __________ strategy and stopped production on all television
westerns when the networks stopped showing them.
a. diversifying
b. aggregation
c. segmentation
d. deletion
e. harvesting
Answer: d Page: 238

Rationale: Dropping a product from a companys product line is called product deletion.
11-52 DELETION DEFINITION
A strategy of dropping a product from the product line, usually in the decline stage of the product
life cycle, is called:
a. diversifying.
b. aggregation.
c. segmentation.
d. deletion.
e. harvesting.

Rationale: Text term definitiondeletion
11-53 HARVESTING DEFINITION
__________ occurs when a company retains a product but reduces marketing support costs.
a. Skimming
b. Harvesting
c. Profiting
d. Deletion
e. Divesting
Answer: b Page: 238

Rationale: Text term definitionharvesting
11-54 HARVESTING CONCEPTUAL
When a product reaches the decline stage of the product life cycle, a firm has two choices. One
choice involves product deletion, where a product is dropped from a firm's product line. Another
less drastic choice is to retain the product in the product line, but to reduce marketing costs.
When this option called __________ is selected, advertising expenditures for the product are
reduced and salespeople do not devote their efforts to selling the product.
a. decline maintenance
b. customer need maintenance
c. divestment
d. maturity re-development
e. harvesting
Answer: e Page: 238

Rationale: In essence, when a harvesting strategy is employed with products in the decline
stage, the marketing firm reduces marketing efforts for the product and simply collects the
revenues realized from ongoing customer needs and requests. The future of such products is
limited to existing customer demand.
11-55 HARVESTING DEFINITION
A strategy of harvesting may be employed in the decline stage of a products life to:
a. maintain primary demand for a product category.
b. get as many new customers as possible.
c. maintain the ability to meet customers' requests.
d. eliminate production and distribution costs.
e. reposition the product.
Answer: c Page: 238

Rationale: Text term definitionharvesting
675
11-56 MARKETING NEWSNET CONCEPTUAL
The growth of e-mail has:
a. led to a significant increase in the amount of faxing because communication is easier.

b. led to a significant decrease in the amount of faxing.
c. not affected faxing.
d. led to a significant increase in the amount of faxing because people don't trust just e-mail and
want a hard copy fax.
e. discouraged all forms of written communication.
Answer: c Page: 238

Rationale: The growth of e-mail has not affected faxing because the two technologies do not
directly compete for the same messaging applications. E-mail is used for text messages, while
faxing is used for formatted business documents.
11-57 LENGTH OF PRODUCT LIFE CYCLE CONCEPTUAL
Generally, the average length of time it takes for a product category to move from the
introduction stage of its product life cycle to the decline stage is:
a. 18 months.
b. 5-10 years.
c. 20 years.
d. 30 years.
e. unpredictable.
Answer: e Page: 238

Rationale: There is no exact time that a product takes to move through its life cycle.
11-58 LENGTH OF PRODUCT LIFE CYCLE CONCEPTUAL
There is no exact time that a product takes to move through its life cycle. As a rule:
a. fad products have the longest lifecycle.

b. consumer products have shorter life cycles than business products.
c. packaged goods have a shorter life cycle than fads.
d. installations have a shorter life cycle than consumer products.
e. intangibility shortens the product life cycle.
Answer: b Page: 239 Other Location: web

Rationale: As a rule, consumer products have shorter life cycles than business products. The
availability of mass communication vehiclessuch as television and the Internetinforms
consumers faster and shortens life cycles. Also, technological change tends to shorten product
life cycles as new product innovation replaces existing products.
11-59 TYPES OF PRODUCT LIFE CYCLES DEFINITION
Which of the following is a NOT a type of product life cycle?
a. revolutionary
b. low learning
c. fashion
d. high learning
e. fad
Answer: a Page: 239

Rationale: The product life cycle curve shown in Figure 11-1 is the generalized life cycle, but
not all products have the same shape to their curve. There are several different life-cycle curves,
each type suggesting different marketing strategies: high-learning, low-learning, fashion, and
fad.
11-60 HIGH LEARNING PRODUCT CONCEPTUAL
An extended introduction stage of the product life cycle occurs for which type of product?
a. high learning
b. low learning
c. fashion
d. fad
e. revolutionary

Rationale: A high learning product is one for which significant education of the customer is
required, and there is an extended introductory period. An example is a convection oven, which
requires learning a new way of cooking and altering familiar recipes.
11-61 HIGH LEARNING PRODUCT CONCEPTUAL
Interactive television with video on-demand capabilities will change how people watch television
and how consumers access the Internet. What type of a product life cycle would be associated
with this product?
a. revolutionary
b. high learning
c. low learning
d. fashion
e. fad
Answer: b Page: 239

Rationale: A high learning product is one for which significant education of the customer is
required, and there is an extended introductory period. Interactive television will require
significant education of the consumer and therefore there will be an extended introductory period.
677
11-62 LOW LEARNING PRODUCT CONCEPTUAL
An alternative product life cycle that results from products that are easily imitated by competitors,
consumers who readily understand their benefits, and for which the appropriate marketing
strategy is to gain strong distributor outlets is characteristic of __________ products.
a. high learning
b. low learning
c. fashion
d. fad
e. substitute
Answer: b Page: 239

Rationale: Low-learning product sales begin immediately because little learning is required by
the consumer, and the benefits of purchase are readily understood. This product often can be
easily imitated by competitors, so the marketing strategy is to broaden distribution quickly. In
this way, as competitors rapidly enter, most retail outlets already have the first product. It is also
important to have the manufacturing capacity to meet this demand.
11-63 DIMENSIONS OF PRODUCT LIFE CYCLE APPLICATION
Imagine Eveready has developed solar rechargeable batteries that cost only slightly more to
produce than regular batteries (less than the rechargeable batteries currently available) and can be
recharged by sunlight up to 5 times, after which they are meant to be discarded. Unfortunately,
the production process cannot be patented, and competitors could arrive within a few months.
Which of the following is the best description of the product life cycle of this product?
a. rapid growth followed by rapid decline

b. long, level beginning, and rapid ascent
c. moderately slow introduction, followed by modest growth, gradually leveling off
d. high introductory sales, with rapid decline
e. high initial sales followed by slow decline
Answer: c Page: 238-239

Rationale: Consumers will need to be educated about the availability and benefits of the new
type of battery. Therefore, a slow introductory period is likely. Growth will slow as competitors
enter the market. Alternative a is a fad product. Alternative b shows no growth in the
introduction stage so this is incorrect. Alternatives d and e don't reflect reasonable product life
cycles ad both begin with high initial sales.
11-64 FASHION PRODUCT DEFINITION
Products that are introduced, decline, and then seem to return are characteristic of the
__________ type of product life cycle.
a. high learning
b. low learning
c. fashion
d. fad
e. revolutionary
Answer: c Page: 239

Rationale: Text term definitionfashion product
11-65 FASHION PRODUCT APPLICATION
Which of the following products is the best example of a product that might experience an
introduction, a decline, and a reintroduction as part of its normal product life cycle?
a. cat food
b. veterinarian services
c. cake mixes
d. fishnet hose
e. paperclips
Answer: d Page: 239

Rationale: A fashion product, such as hemline lengths on skirts, or lapel widths on sport jackets,
is introduced, declines, and then seems to return. Life cycles for fashion products most often
appear in womens and mens clothing styles. The length of the cycles may be years or decades.
11-66 FAD PRODUCT DEFINITION
Which type of product has experiences rapid sales on introduction and then an equally rapid
decline of the product life cycle?
a. high learning products

b. low learning products
c. fashion products
d. fad products
e. abnormal products
Answer: d Page: 240

Rationale: A fad, such as wall walkers or toe socks, experiences rapid sales on introduction and
then an equally rapid decline. These products are novelties and have a short life cycle.
679
11-67 FAD PRODUCT APPLICATION
Some singers sing a great song that shoots to the top of the chart. The singers go on tour and
have sold-out concerts everywhere they appear. Just as quickly (particularly if they are unable to
follow their first hit song with a second one), they are singing to half-filled concerts and then to
smaller clubs, and eventually no one wants to hear them perform. Such one-hit singers are most
likely categorized as __________ products.
a. high learning
b. low learning
c. fashion
d. fad
e. revolutionary
Answer: d Page: 240

Rationale: A fad, such as the singer mentioned, experiences rapid sales on introduction and then
an equally rapid decline. This singer is a novelty and has a short life cycle because only one song
was popular.
11-68 DIFFUSION OF INNOVATION CONCEPTUAL
With diffusion of innovation,
a. once a product enters the market, very similar products will enter within a very short period
of time.
b. one new product will produce ancillary product invention (e.g., video cassettes created a
market for cassette holders).
c. not all consumers accept a new product at the same time because adoption of a product
spreads slowly throughout the population.
d. product changes by one competitor lead to similar product changes by another competitor.
e. unique efforts are made to create primary demand.
Answer: c Page: 240

Rationale: Not all consumers rush to buy a product in the introductory stage, and the shapes of
the life cycle curves indicate that most sales occur after the product has been on the market for
some time. In essence, a product diffuses, or spreads, through the population, a concept called
the diffusion of innovation.
11-69 DIFFUSION OF INNOVATION DEFINITION
The life cycle of a product depends on sales to customers. The shapes of life-cycle curves
indicate that most sales occur after the product has been on the market for some time. The
concept that some people are attracted to a product early while others buy it only after they see
their friends with the product is called the:
a. dissociation of sensibility.
b. timed profiling.
c. categories of adopters.
d. diffusion of innovation.
e. derivation of markets.
Answer: d Page: 240

Rationale: Text term definitiondiffusion of innovation
All of the following are categories of consumers based on when they purchase a new product, the
information sources they use, and their risk-taking orientation EXCEPT:
a. initiators.
b. early adopters.
c. early majority.
d. late majority.
e. laggards.
Answer: a Page: 240; Figure 11-4 Other Location: web

Rationale: The first category of product adopters relative to the diffusion of innovation is
innovators, not initiators.
The largest numbers of product adopters with respect to the diffusion of innovation are found
among:
a. early adopters and laggards.

b. early majority and late majority.
c. late majority laggards.
d. innovators and early majority.
e. innovators and early adopters.

Rationale: Early majority adopters and late majority adopters make up about 68% of the total
population that will adopt a new product at some point during a product life cycle.
681
11-72 INNOVATORS DEFINITION
As product adopters, innovators typically:
a. fear debt and use neighbors and friends as information sources.

b. are skeptical and have below average social status.
c. act with deliberation and use many informal social contacts.
d. are leaders in social standing and have slightly above average education when compared to
the other adopter classes.
e. are venturesome, better educated than other product adopters, and use multiple information
sources.
Answer: e Page: 241; Figure 11-4 Other Location: web

Rationale: There are five categories of product adopters based on when they adopt, or choose to
buy a new product. For any product to be successful it must be purchased by innovators and
early adopters. The five categories are: (1)innovators are venturesome, better educated than
other product adopters, and use multiple information sources; (2)early adopters are leaders in
social settings, slightly above average education; (3) early majority are deliberate and have many
informal social contacts; (4) late majority is skeptical and has below average social status; (5)
laggards fear debt, neighbors and friends are information sources.
11-73 EARLY ADOPTERS DEFINITION
As product adopters, early adopters typically:

e. are venturesome, better educated than other product adopters, and use multiple information.

11-74 EARLY MAJORITY DEFINITION
As product adopters, members of the early majority typically:


11-75 LATE MAJORITY DEFINITION
As product adopters, members of the late majority typically:


683
11-76 LAGGARDS DEFINITION
As product adopters, laggards typically:


11-77 PRODUCT ADOPTION APPLICATION
When the personal computer was first introduced, industry analysts predicted that very few would
be sold. However, a short time after the product was made available, consumers who were
young, highly educated, adventuresome, and who were well informed began buying personal
computers. While those buyers were relatively few in number, the marketers of computers were
encouraged because other, less adventuresome consumers would likely adopt personal computers
later. According to the product adoption classification, those first buyers of personal computers
were:
a. early adopters.
b. early majority.
c. innovators.
d. product leaders.
e. diffusion leaders.

Rationale: Innovators are characterized as being adventuresome, having a high level of
education, and having access to multiple sources of information.
Imagine Post Cereal introduces a cereal bar just like the ones Kellogg's and Quaker already have
on the market. Post has decided to promote the bars using ads without coupons and to price the
bars at about the same price as the other brands. Post Cereal bars will also be distributed to the
same stores as the Kellogg's and Quaker products. Which of the following barriers to new
product adoption will most likely prevent the Post Cereal bars from being a successful product?
a. value barrier
b. psychological barrier
c. economic barrier
d. usage barrier
e. social barrier
Answer: a Page: 240

Rationale: Several factors affect whether a consumer will adopt a new product or not. Common
reasons for resisting a product in the introduction stage are usage barriers (the product is not
compatible with existing habits), value barriers (the product provides no incentive to change), risk
barriers (physical, economic, or social), and psychological barriers (cultural differences or
image).
A new exercise video contends that with one day of fasting and one one-hour period of intense
cardiovascular exercise, the average individual can lose five pounds a week and be in peak health
within six months of starting the program. __________ barriers will doom the new product to
failure because the product's claims are not consistent with what consumers do and how they
think.
a. Psychological
b. Physical
c. Risk
d. Value
e. Usage
Answer: e Page: 240

image).
685
When McDonalds began doing business in India, it had to change the meat in some of its meals
from beef, considered sacred by many in India, to lamb and other meats. __________ barriers
would have doomed McDonalds in India had they not changed their recipes because many
Indian consumers would have refused to eat sandwiches made from an animal they consider to be
sacred.
a. Psychological
b. Physical
c. Risk
d. Value
e. Usage
Answer: a Page: 240

image).
Even an experienced and well trained hiker would not think of crossing Death Valley, where
temperatures easily top 120 degrees, without plenty of water as part of their supplies.
__________ barriers would doom any hiking trip across that area without the assurance that
plenty of water would be available for the hiker.
a. Psychological
b. Physical
c. Risk
d. Value
e. Usage
Answer: c Page: 240

image).
Why would the manufacturer of a new all-natural-ingredient shampoo and conditioner put free
samples of the product in Sunday newspapers?
a. to simulate laggard usage of the product

b. to encourage product adoption
c. to control innovation diffusion
d. to avoid any possibility of litigation
e. to circumvent the typical adoption cycle
Answer: b Page: 240

Rationale: Free samples are one of the most popular means to gain consumer trial, and it is
logical that increased consumer trial will lead to increased adoption.
11-83 PRODUCT MODIFICATION DEFINITION
__________ is a strategy that involves altering a product's characteristic such as its quality,
performance, or appearance to try to increase and extend the products sales.
a. Market modification
b. Product modification
c. Product repositioning
d. Market-product strategy
e. Diversification
Answer: b Page: 241

Rationale: Text term definitionproduct modification
11-84 PRODUCT MODIFICATION APPLICATION
Twenty years ago, the Mississippi Gulf Coast was a nice place to vacation with a white sandy
beach, golfing opportunities, resort hotels, and good seafood restaurants. With the addition of
casinos, the Gulf Coast improved its odds of being a tourist destination for more travelers. This is
an example of:
a. a market-product strategy.
b. diversification.
c. market modification.
d. product modification.
e. harvesting.
Answer: d Page: 241

Rationale: Product modification is a strategy that involves altering a product's characteristic
such as its quality, performance, or appearance, to try to increase and extend the product's sales.
687
Alka-Seltzer was made originally as a hangover remedy that cured the headache and settled the
stomach. Today, you can purchase Original Alka-Seltzer, Extra Strength Alka-Seltzer, Alka-
Seltzer Morning Relief (for morning headaches and fatigue), and Alka-Seltzer Heartburn Relief.
To extend the product's sales to new markets, the makers of Alka-Seltzer have used:
b. diversification.
e. harvesting.
Answer: d Page: 241

such as its quality, performance, or appearance to try to increase and extend a product's sales. In
this case Alka-Seltzer manufactured additional types of the product to address different consumer
needs or required product performance.
DiGiorno rising crust pizza has been available in the freezer sections of supermarkets for quite
awhile. The product's recent introduction of a DiGiorno cheese stuffed crust is an example of
__________ and should attract new buyers.
b. diversification.
e. harvesting.
Answer: d Page: 241

such as its quality, performance, or appearance to try to increase and extend a product's sales. In
this case, DiGiorno added a cheese stuffed crust to try to increase and extend their sales of pizza.
11-87 MARKET MODIFICATION DEFINITION
___________ is a strategy used when a company tries to find new customers, increase a products
use among existing customers, or create new use situations.
a. Market modification
b. Product modification
c. Product repositioning
d. Market-product strategy
e. Diversification

Rationale: Text term definitionmarket modification
11-88 MARKET MODIFICATION APPLICATION
When Coca-Cola promoted Coke as a morning beverage when you didn't want coffee, it was
using:
a. product modification.
b. repositioning the product.
d. market-product extension.
e. diversification.
Answer: c Page: 241

Rationale: Market modification is a strategy used when a company tries to find new customers,
increase a products use among existing customers, or create new use situations. Coca-Cola was
using market modification strategy because it was trying to increase product usage.
Tums, which has long been used for reducing heartburn, is now being promoted as a source of
calcium for the prevention of osteoporosis. Its manufacturer is using which of the following
market modification strategies?
a. finding new users

b. creating new use situations
c. increasing use by existing customers
d. modifying the product characteristics
e. doing none of the above
Answer: b Page: 241

increase a products use among existing customers, or create new use situations. In the case of
Tums the manufacturer is trying to create a new use situation by suggesting it be used to prevent
osteoporosis.
689
Finding new uses for an existing product has been a major strategy in extending the life of Arm &
Hammer Baking Soda. The product (unchanged from its original formula) is now being
promoted as a dentifrice; a deodorizer for cat litter, carpeting, and refrigerators; and a fire
extinguisher. Arm & Hammer is:
a. finding new users through a product modification strategy.

b. creating new use situations through a market modification strategy.
c. increasing use by existing customers through a product modification strategy.
d. modifying the product characteristics.
e. demarketing the product.
Answer: b Page: 241

increase a products use among existing customers, or create new use situations. Arm &
Hammers original formula is being used in additional situations.
Major American car manufacturers are offering buying incentives to newly graduated college
students who traditionally have little or no credit. Car manufacturers are using which of the
following market modification strategies?

d. modifying the product
e. reacting to competitors' position

increase a products use among existing customers, or create new use situations. By offering
buying incentives to college students (new customers), automobile manufacturers can tap a
sizable market of new customers who might otherwise not buy a new car.
The Upjohn Company first targeted men for its Rogaine topical solution, a drug to restore hair
growth, but later marketed this product to women. The Upjohn Company is using which of the
following market modification strategies?

d. modifying the product
e. reacting to competitors' position
Answer: a Page: 241

increase a products use among existing customers, or create new use situations. By including
women in their marketing efforts, Upjohn increased the number of potential customers.
11-93 ETHICS AND SOCIAL RESPONSIBILITY ALERT CONCEPTUAL
Consumer advocates believe the practice of downsizing by consumer products firms has resulted
in:
a. lower product prices for consumers because of lower labor, raw material and packaging costs
due to the recession and lower inflation in the United States.
b. a greener environment due to the reduction in the amount of packaging used for promotional
purposes (e.g. eliminating of the glossy cardboard that promoted the musical artist and
contained the CD and its plastic protective box), thereby reducing the amount of waste
disposed in landfills.
c. fewer products and less product variability offered due to the corporate restructuring taking
place worldwide.
d. keeping prices from rising beyond the psychological barriers consumers have developed for
products.
e. a subtle, yet deceptive practice of taking advantage of consumers' buying habits by offering
less product content in the same or larger package while maintaining or increasing the price.
Answer: e Page: 243

Rationale: Consumer advocates charge that downsizing the content of packages while
maintaining prices is a subtle and unannounced way of taking advantage of consumer buying
habits. They also say downsizing is a price increase in disguise and deceptive, but legal.
Manufacturers argue that this practice is a way of keeping prices from rising beyond
psychological barriers for their products.
691
11-94 PRODUCT REPOSITIONING DEFINITION
Changing the place a product occupies in a consumer's mind relative to competitive products is
called:
a. market modification.
b. product modification.
c. product repositioning.
d. product development.
e. differentiation.
Answer: c Page: 242

Rationale: Text term definitionproduct repositioning
11-95 PRODUCT REPOSITIONING CONCEPTUAL
All of the following are factors that trigger product repositioning as a marketing action EXCEPT:
a. changing the value offered to consumers relative to competitive products by adding or

deleting features.
b. catching a rising trend due to changes in consumer preferences relative to competitive
products.
c. reaching a new market due to sluggish sales in the currently targeted market.
d. reacting to a competitor's entrenched product position that is adversely affecting the firm's
sales and market share.
e. copying competitors' sales promotion strategies to increase the trial and repeat purchase
behavior of consumers relative to the firm's product.
Answer: e Page: 242

Rationale: Often a company decides to reposition its product or product line in an attempt to
increase sales. A firm can reposition a product by changing one or more of the four marketing
mix elements. Four factors that trigger a repositioning action are: (1) reacting to a competitors
position; (2) reaching a new market; (3) catching a rising consumer trend; and (4) changing the
value offered by trading up or down.
11-96 PRODUCT REPOSITIONING APPLICATION
Sealy, the largest manufacturer of mattresses in the U.S., recently set out to redefine its place in
the bedrooms of America. No longer was it going to be associated as a mattress company.
Henceforth, the name Sealy was going to be known as the world's leading "sleep wellness
provider." This is an example of:
a. reverse marketing.
b. demarketing.
c. repositioning.
d. resegmenting.
e. reverse targeting.
Answer: c Page: 242

value offered by trading up or down. Sealy is changing the place a product occupies in a
consumer's mind relative to competitive products.
New Coke was repositioned as a slightly sweeter, less filling soft drink because the Coca-Cola
Company discovered that its 1984 market share in supermarkets was 2 percent behind Pepsi.
This product repositioning strategy was:
a. a reaction to a competitor's position.

b. to reach a new market.
c. to catch a rising trend.
d. to change the value offered.
e. to change its target audience.
Answer: a Page: 242

value offered by trading up or down.
693
Harry & David is a catalog retailer. At its inception, the company sold fruit baskets and
popularized the Fruit of the Month concept. Since then the company has abandoned this
restrictive definition of itself, expanded its product mix, and used its promotion to explain that it
is the source of the perfect gift for every occasion. Harry & David used a __________ strategy.
a. reinvention
b. restoration
c. reconfiguration
d. realignment
e. repositioning
Answer: e Page: 242

value offered by trading up or down. Harry & David changed the place a product occupies in a
consumer's mind relative to competitive products by expanding its product mix and using
promotion to explain that it is the source of the perfect gift for every occasion.
Snickers candy bar was repositioned from a candy bar to a snack food through commercials that
showed busy people satisfying their hunger with a Snickers bar. Mars, Inc. used this strategy
with its Snickers bar to:
a. react to a competitor's position.

b. reach a new market.
c. catch a rising trend.
d. change the value offered.
e. do none of the above.
Answer: b Page: 242

value offered by trading up or down. Mars, Inc., makers of Snickers, saw that time pressures
meant more consumers were looking for a quick snack. By positioning the peanut filled candy
bar as an energy-filled snack, it was able to reach a much larger market.
For many years, Kellogg's Frosted Flakes, a ready-to-eat breakfast cereal, was perceived as a
cereal for children. Tony the Tiger, a cartoon character, extolled Frosted Flakes, and
advertisements depicted children enjoying the product in competitive situations. Recently, in
response to declining sales of the Frosted Flakes, the cereal-maker has adopted a new series of
advertisements that show adults admitting they enjoy Frosted Flakes, too. Kellogg's is attempting
to:
a. develop alternative product selection factors.

b. reposition its product.
c. complete the product life cycle of Frosted Flakes.
d. introduce new uncontrollable elements into the marketing mix.
e. introduce a new product.
Answer: b Page: 242

value offered by trading up or down. Kellogg's is attempting to change the place Frosted Flakes
occupies in the minds of consumers in relation to alternative, competing breakfast food products
by appealing to a new marketadults.
Pretzels were first introduced as a salty snack. Later the product was repositioned as a low-fat
snack to:
a. respond to a competitor's head-on positioning strategy.

b. reach a new market.
c. catch a rising trend.
d. change the value offered.
e. change its target audience.
Answer: c Page: 243

value offered by trading up or down. Pretzels capitalized on the "better-for-you trend in the food
industry.
695
An aging baby boomer population has led to increased interest in developing and marketing
products to satisfy the need of this potentially large market. As a result, moisturizing creams like
Oil of Olay are now positioned as age-defying creams. This is an example of which of the four
factors that may trigger a repositioning action?
a. reacting to a competitor's position

b. reaching a new market
c. catching a rising trend
d. changing the value offered
e. product modification
Answer: c Page: 243

value offered by trading up or down. The aging baby boomers are waging a valiant fight against
aging, and marketers are helping them by creating products that will appeal to this market.
11-103 PRODUCT REPOSITIONING CONCEPTUAL
Which of the following product repositioning strategies requires a change in the physical
product?
a. increasing use
c. finding new users
d. reacting to a competitors position
e. changing the value offered
Answer: e Page: 243

value offered by trading up or down. Value is increased by adding features or higher quality
materials. This is known as trading up. Value can also be decreased by reducing the number of
features, quality, or content of the product, known as trading down.
11-104 TRADING UP DEFINITION
Trading up involves adding value to a product (or line) through:
a. adding product features but reducing the price.

b. adding product features and using higher quality product materials.
c. reducing product features and using lower quality product materials.
d. decreasing the number of features and quality and lowering the price of a product.
e. downsizing.
Answer: b Page: 243

Rationale: Text term definitiontrading up
11-105 TRADING UP APPLICATION
Kmart stores hoped to add perceived value to the store's merchandise by adding the Martha
Stewart product line, which is perceived as being of a higher quality. This product line addition
was an example of:
a. top-down marketing.
b. trading up.
c. bottom-up marketing.
d. trading down.
e. game-playing.

value offered by trading up or down. Trading up involves adding value to a product (or line)
through adding product features and using higher quality product materials. The Martha Stewart
product line is perceived as using higher quality product materials.
11-106 TRADING DOWN DEFINITION
The strategy of trading down involves:
a. adding product features and using lower quality product materials.

b. adding product features and using higher quality product materials.
c. reducing product features and using lower quality product materials.
d. reducing the number of features, quality, or price of a product.
e. seeking a less price sensitive target market.
Answer: d Page: 243

Rationale: Text term definitiontrading down
697
11-107 DOWNSIZING DEFINITION
__________ refers to reducing the content of packages without changing package size and
maintaining or increasing the package price.
a. Top-down marketing
b. Trading up
c. Bottom-up marketing
d. Game-playing
e. Downsizing
Answer: e Page: 243

Rationale: Text term definitiondownsizing
11-108 DOWNSIZING DEFINITION
Downsizing is reducing the:
a. quality of materials used in a product line.

b. product's price for a smaller package.
c. content of a package without changing its size while maintaining or increasing the package
price.
d. number of product features offered to consumers.
e. number of brands offered and the total number of products manufactured.
Answer: c Page: 243

Rationale: Text term definitiondownsizing
11-109 DOWNSIZING APPLICATION
Since the creation of the Hershey candy bar over 100 years ago, the price of chocolate has
fluctuated, but the price of the candy bar has slowly risen. In fact, when the price of chocolate
had dramatic price fluctuations over a three-year period, the price of a Hershey's candy bar
remained the same. When the price of chocolate was very high, Hershey's was able to maintain
its profits by making the bars smaller. Hershey's engaged in:
a. top-down marketing.
b. trading up.
c. bottom-up marketing.
d. game-playing.
e. downsizing.
Answer: e Page: 243 Other Location: web

Rationale: Downsizing is reducing the content of packages without changing package size while
maintaining or increasing the package price.
11-110 BRANDING DEFINITION
The decision an organization makes to use a name, phrase, design, symbol, or combination of
these to identify its products and distinguish them from those of competitors is called:
a. product identification.
b. branding.
c. trademarking.
d. copyrighting.
e. licensing.
Answer: b Page: 244

Rationale: Key term definitionbranding
11-111 BRAND NAME DEFINITION
A ___________ is any word, device (design, sound, shape, or color), or combination of these
used to distinguish a seller's goods or services.
a. copyright
b. trade name
c. brand mark
d. brand name
e. generic brand
Answer: d Page: 244

Rationale: Key term definitionbrand name
11-112 BRAND NAME DEFINITION
A brand name is:
a. any word, device (design, sound, shape or color), or combination of these used to distinguish
a seller's goods or services.
b. the part of a brand name that can be spoken.
c. the part of a brand that is a symbol or design and cannot be spoken.
d. the commercial, legal name under which a company does business.
e. legal identification of a company's exclusive rights to use a brand name, brand mark, or trade
name.
Answer: a Page: 244

Rationale: Key term definitionbrand name
699
11-113 BRAND NAME APPLICATION
The stylized blue and white waves in an oval shape that appear on every package of Ocean Spray
brand products is an example of a:
a. copyright.
b. trade name.
c. service market.
d. brand name.
e. generic brand.
Answer: d Page: 244

Rationale: A brand name is any word, device (design, sound, shape or color), or combination of
these used to distinguish a seller's goods or services.
11-114 BRAND PERSONALITY DEFINITION
__________ is a set of human characteristics associated with a brand name.
a. Brand personality
b. A brand mannerism
c. A symbolic brand
d. Brand personification
e. Product personification
Answer: a Page: 244

Rationale: Key term definitionbrand personality
11-115 BRAND PERSONALITY APPLICATION
When consumers think of Harley-Davidson, the image of a masculine, non-conformist is the

likely associated with that brand name. With the Vespa motorscooters, the image is more likely
to be a brainy environmentalist that wears polyester and socks that don't match. Both Vespa and
Harley-Davidson:
a. have brand personalities.

b. have created brand mannerisms.
c. are symbolic brands.
d. use brand personification.
e. use product personification.
Answer: a Page: 244

Rationale: Brand personality is a set of human characteristics (masculine, non-conformist)
associated with a brand name (Harley-Davidson).
11-116 VALUE OF BRANDING CONCEPTUAL
The primary benefit of branding for consumers is branding makes:
a. products higher in quality.

b. products lower in price.
c. consumers more efficient shoppers.
d. products higher in value.
e. advertising unnecessary.
Answer: c Page: 244

Rationale: Consumers may benefit most from branding. Recognizing competing products by
brand names allows them to be more efficient shoppers. Consumers can recognize and avoid
products with which they are dissatisfied, while becoming loyal to other, more satisfying brands.
Brand loyalty often eases consumers decision making by eliminating the need for an external
search.
11-117 BRAND EQUITY DEFINITION
Brand equity is:
a. the resources invested to create a name, phrase, design, symbol, or combination of these to
identify a firm's products and distinguish them from those of its competitors.
b. adding customer value to the product brand through additional features or higher-quality
materials, or reducing its price.
c. increasing the content contained within the brand's package without changing its size or
increasing its price.
d. the net present value of the royalties the firm receives as a result of licensing its brand to
other firms to manufacture and/or market.
e. the added value a given brand name gives to a product beyond the functional benefits
provided.
Answer: e Page: 245

Rationale: Key term definitionbrand equity
701
11-118 CREATING BRAND EQUITY CONCEPTUAL
Which of the following is true about the process of creating brand equity?
a. Marketers have to develop positive brand awareness and an association of the brand in
consumers minds with a product class or need to give the brand an identity.
b. A marketer must establish a brands meaning in the minds of consumers.
c. A marketer must get consumers to develop proper responses to a brands identity and
meaning.
d. A deep psychological bond characterizes consumerbrand connection and the personal
identification consumers have with the brand.
e. All of the above are true about the process of creating brand equity.
Answer: e Page: 245-246; Figure 11-5

Rationale: Brand equity arises from a sequential building process consisting of four steps: (1)
develop positive brand awareness and an association of the brand in consumers minds with a
product class or need to give the brand an identity; (2) establish a brands meaning in the minds
of consumers which arises from what a brand stands for; (3) get consumers to develop proper
responses to a brands identity and meaning; and (4) developing a deep psychological bond that
characterizes consumerbrand connection and the personal identification consumers have with
the brand.
consumers minds with a product class or need to give the brand an identity.
b. A marketer must establish a brands colors in the minds of consumers.
c. A marketer must get consumers to develop proper responses to a brands distribution
strategy.
d. A deep physical bond characterizes consumerbrand connection.
Answer: a Page: 245-246; Figure 11-5

the brand.
consumers minds with a product color.
b. A marketer must establish a brands meaning in the minds of consumers.
strategy.
d. A deep physical bond characterizes consumerbrand.
Answer: b Page: 245-246; Figure 11-5

the brand.
b. A marketer must establish a brands meaning in the minds of competitors.
c. A marketer must get consumers to develop proper responses to a brands identity and
meaning.
d. A deep physical bond characterizes consumerbrand connection.
Answer: c Page: 245-246; Figure 11-5

the brand.
703
b. A marketer must establish a brands meaning in the minds of competitors.
strategy.
d. A deep psychological bond characterizes consumerbrand connection and the personal
identification consumers have with the brand.
Answer: d Page: 245-246; Figure 11-5

the brand.
11-123 VALUING BRAND EQUITY CONCEPTUAL
Which of the following is true about the value of brand equity?
a. Brand equity is an intangible asset.

b. Brand equity has an economic value to the manufacturer.
c. Brand equity can increase in value when effectively managed.
d. Brand equity can lose value when ineffectively managed.
e. All of the above are true about the value of brand equity.
Answer: e Page: 245-246; Figure 11-5

Rationale: Brand equity also provides a financial advantage for the brand owner. Successful,
established brand names have an economic value. They are intangible assets. The recognition
that brands are assets is apparent in the decision to buy and sell brands such as Hawaiian Punch.
Brands can increase in value when effectively managed. They can lose value when they are not
managed properly.
a. Brand equity is an intangible asset.

b. Brand equity does not have an economic value to the manufacturer.
c. Brand equity will not increase in value when effectively managed.
d. Brand equity will not decrease in value when ineffectively managed.
Answer: a Page: 245-246; Figure 11-5

managed properly.
a. Brand equity is a tangible asset.

b. Brand equity has an economic value to the manufacturer.
c. Brand equity will not increase in value when effectively managed.
d. Brand equity will not lose value when ineffectively managed.
Answer: b Page: 245-246; Figure 11-5

managed properly.

b. Brand equity has no economic value to the manufacturer.
c. Brand equity can increase in value when effectively managed.
d. Brand equity cannot lose value when ineffectively managed.
Answer: c Page: 245-246; Figure 11-5

managed properly.
705

b. Brand equity has no economic value to the manufacturer.
c. Brand equity cannot increase in value when effectively managed.
d. Brand equity can lose value when ineffectively managed.
Answer: d Page: 245-246; Figure 11-5

managed properly.
11-128 PICKING A GOOD BRAND NAME CONCEPTUAL
All of the following are criteria for selecting a good brand name EXCEPT:
a. suggests product features.

b. suggests product benefits.
c. fits the company or product image.
d. is memorable, distinctive, and positive.
e. is simple.
Answer: a Page: 246

Rationale: It is often a difficult and expensive process to pick a good brand name. The five
criteria mentioned most often when selecting a good brand name are: (1) the name should
suggest the product benefits; (2) the name should be memorable, distinctive, and positive; (3) the
name should fit the company or product image; (4) the name should have no legal or regulatory
restrictions; and (5) the name should be simple and emotional. In the international arena, having
a non-meaningful brand name has been considered a benefit.
Which of the following are criteria for selecting a good brand name?
a. should have no legal or regulatory restrictions

b. suggests product benefits
c. fits the company or product image
d. is memorable, distinctive, and positive
e. All of the above are criteria for selecting a good brand name.
Answer: e Page: 246

a. should have no legal or regulatory restrictions

b. suggests product features
c. fits the consumers image
d. blends with the culture
Answer: a Page: 246

707
a. should be complex so it stands out

b. suggests product benefits
Answer: b Page: 246


c. fits the company or product image
Answer: c Page: 246


d. is memorable, distinctive, and positive
Answer: d Page: 246

Imagine the President of Black Stoves, Inc. is thinking about developing a new brand name for
the company's line of wood stoves with catalytic converters. The stove because of its design also
conserves wood because it burns slowly. The brand name he is considering is The Fast One.
Why is this brand name choice NOT the best one?
a. The name should be distinctive and memorable.

b. The name should fit the company image.
c. The name should have no legal restrictions.
d. The name should be simple.
e. The name should suggest the product benefits.

a non-meaningful brand name has been considered a benefit. This brand name does not suggest
the product's benefits. It meets the other criteria and guidelines reasonably well.
709
Use the five criteria for selecting a good brand name to determine which of the following is the
best choice.
a. Spam canned meat

b. Ken's salad dressing
c. Formula 409 cleaner
d. Match Light charcoal
e. Bayer aspirin
Answer: d Page: 246

a non-meaningful brand name has been considered a benefit. Only Match Light is simple and
distinctive. The name suggests the product benefit, and it has no legal restrictions. The name is
memorable and positive.
11-136 MANUFACTURER BRANDING DEFINITION
With __________, the producer dictates the brand name using either a multiproduct or
multibrand approach.
a. retailer branding
b. intermediary
c. licensing
d. manufacturer branding
e. co-branding
Answer: d Page: 247

Rationale: Text term definitionmanufacturer branding
Manufacturer branding is:
a. a statement indicating the liability of the manufacturer for product deficiencies.

b. a branding strategy in which the producer dictates the brand name, using either a
multiproduct or multibrand approach.
c. a branding strategy in which a company uses one name for all of its products. It is often
referred to as a blanket or family branding strategy.
d. a branding strategy in which manufacturers produce products but sell them under the brand
name of a wholesaler or retailer, also called private labeling or reseller branding.
e. a contractual agreement whereby a company allows someone else to use its brand name and
usually requires the product be made to its specifications.
Answer: b Page: 247

With manufacturer branding the producer dictates the brand name using either a:
a. regional or national approach.

b. domestic or international strategy.
c. multiproduct or multibrand approach.
d. competitor-focused or consumer-oriented approach.
e. tactical or strategic objective.
Answer: c Page: 247

11-139 MULTIPRODUCT BRANDING DEFINITION
Multiproduct branding is:
a. a statement indicating the liability of the manufacturer for product deficiencies.

b. a strategy where products are given no identifying names other than a description of their
contents.
c. a branding strategy in which a company uses one name for all of its products.
name of a wholesaler or retailer, also called private labeling or reseller branding.
usually requires that the product be made to its specifications.
Answer: c Page: 247

Rationale: Key term definitionmultiproduct branding
711
11-140 MULTIPRODUCT BRANDING DEFINITION
A branding strategy in which a company uses one name for all of its products (often referred to as
a blanket or family branding strategy) is called:
a. co-branding.
b. generic branding.
c. reseller branding.
d. mixed branding.
e. multiproduct branding.
Answer: e Page: 247

Rationale: Key term definitionmultiproduct branding
11-141 MULTIPRODUCT BRANDING APPLICATION
All products sold by the Tabasco Company are sold using the Tabasco brand. This is an example
of:
a. multiproduct licensing.
b. multibranding.
c. co-branding.
d. generic branding.
Answer: e Page: 247

Rationale: With multiproduct branding, a company uses one name for all of its products, as
Tabasco does.
11-142 BLANKET BRANDING APPLICATION
Every product manufactured by the SlimFast Company carries the Slim-Fast brand name. The
SlimFast Company uses:
a. multibranding.
b. single branding.
c. co-branding.
d. blanket branding.
e. agent licensing.
Answer: d Page: 247

Rationale: With multiproduct branding (also known as blanket branding), a company uses one
name for all of its products.
11-143 BLANKET BRANDING APPLICATION
Every product manufactured by the Gap carries the Gap brand name. The Gap uses:
a. multibranding.
b. single branding.
c. co-branding.
d. blanket branding.
e. agent licensing.
Answer: d Page: 247

Rationale: With multiproduct branding (also known as blanket branding), a company uses one
11-144 FAMILY BRANDING APPLICATION
Every product manufactured by Ben & Jerrys carries the Ben & Jerrys brand name. Ben &
Jerrys uses:
a. multibranding.
b. single branding.
c. co-branding.
d. family branding.
e. agent licensing.
Answer: d Page: 247

Rationale: With multiproduct branding (also known as family branding), a company uses one
11-145 LINE EXTENSIONS DEFINITION
When a company uses line extension it is:
a. manufacturing a product under a new brand name that consumers will view as an entirely
new product line.
b. using a current brand name to enter a new market segment in its product class.
c. speeding up the movement of a product category through its PLC.
d. contracting with another firm to manufacture modified versions of the original products.
e. applying the current brand name to enter a completely different product class.
Answer: b Page: 247

Rationale: Text term definitionline extensions
713
11-146 LINE EXTENSIONS APPLICATION
Bayer aspirin is sold in the original strength, in a safety-coated version, in an extra-strength

version, and in a version designed especially for women. The manufacturer of Bayer aspirin is
using:
a. channel extension
b. subbranding
c. line extension
d. co-branding
e. multibranding
Answer: c Page: 247

Rationale: Bayer aspirin is using line extensions, the practice of using a current brand name to
enter a new market segment in its product class.
11-147 LINE EXTENSIONS CONCEPTUAL
Which of the following statements about line extensions is true?
a. A line extension strategy typically leads to increased advertising costs.

b. There are no risks associated with a line extension strategy.
c. When the Clorox Company joins with Kroger supermarkets to advertise Clorox products, it is
an example of a line extension.
d. A line extension is used with multiproduct branding.
e. A line extension is used with multibranding.
Answer: d Page: 247

Rationale: Line extensions, the practice of using a current brand name to enter a new market
segment in its product class, is a multiproduct branding strategy that can reduce advertising costs
because the same name is used on all products, thus raising the level of brand awareness. A risk
with line extensions is that sales of an extension may come at the expense of other items in the
company's product line. Alternative c describes cooperative advertising. Alternative e is the
strategy of giving each product its own brand name.
a. A line extension strategy typically leads to decreased advertising costs.

b. There are no risks associated with a line extension strategy.
d. A line extension is used with reseller branding.
Answer: a Page: 247

company's product line. Alternative c describes cooperative advertising. Alternative d is the
strategy manufacturing products but selling them under the retailer or wholesaler brand name.
Alternative e is the strategy of giving each product its own brand name.
a. A line extension strategy typically leads to increased advertising costs.

b. There are risks associated with a line extension strategy.
d. A line extension is used with reseller branding.
Answer: b Page: 247

company's product line. Alternative c describes cooperative advertising. Alternative d is the
strategy manufacturing products but selling them under the retailer or wholesaler brand name.
Alternative e is the strategy of giving each product its own brand name.
715
11-150 SUBBRANDING DEFINITION
Combining a family brand with a new brand is called:
a. subbranding.
b. multiproduct branding.
c. mixed branding.
d. generic branding.
e. family branding.

Rationale: Text term definitionsubbranding
11-151 BRAND EXTENSION DEFINITION
Brand extensions require:
a. manufacturing a product under a new name that consumers will view as an entirely new
product line.
b. manufacturing a new product with the same brand name for a new market segment in the
same product class so consumers will view it as a logical addition to the original product line.
c. manufacturing accessory products such as Barbie clothes for Barbie Dolls.
d. licensing another firm to manufacture modified versions of the original products.
e. applying the current brand name to enter a completely different product class.
Answer: e Page: 247

Rationale: Text term definitionbrand extension
11-152 BRAND EXTENSION APPLICATION
Gerber had tremendous brand equity with its baby food. The use of a __________ strategy to use
the Gerber name on a bibs, plastic baby bottles, and pacifiers seemed logical.
a. brand extension
b. family branding
c. co-branding
d. blanket branding
e. mixed branding
Answer: a Page: 247

Rationale: A brand extension strategy applies the current brand name to enter a completely
different product class. Gerber applied the brand name that had been used successfully for food
to baby accessories.
11-153 MULTIBRANDING DEFINITION
Multibranding is:
a. a branding strategy that involves giving each product a distinct name.

b. a branding strategy that uses different brand names for the same product across multiple
countries.
c. a branding strategy in which a company uses one name for multiple products.
name of a wholesaler or retailer.
Answer: a Page: 248

Rationale: Key term definitionmultibranding
11-154 MULTIBRANDING APPLICATION
Mars, Inc. sells Snickers, Milky Way, Twix, Skittles, Dove, Starburst, M&Ms, and Three
Musketeer candy. This variety of names is typical of a __________ strategy
a. co-branding
b. multibranding
c. multiproduct
d. mixed brand
e. private branding
Answer: b Page: 248

Rationale: A multibranding strategy involves giving each product a distinct name. Mars uses a
branding strategy that gives each of its products a distinct name.
11-155 MULTIBRANDING DEFINITION
A manufacturer's branding strategy in which a distinct name is given to each of its products is
called:
a. multibranding.
c. cobranding.
d. mixed branding.
Answer: a Page: 248

Rationale: Key term definitionmultibranding
717
11-156 MULTIBRANDING APPLICATION
Seiko makes watches. It markets its higher quality watches under the Sieko or Lasalle name, and
its lower-priced watches are sold under the Pulsar brand. Seiko uses a __________ strategy.
a. multibranding
b. generic branding
c. multiproduct branding
d. trademarked branding
e. private branding
Answer: a Page: 248

Rationale: A multibranding strategy involves giving each product a distinct name. Sieko is
making a new line of goods with a different set of product characteristics, and targeted to
different markets so they are using the multibranding strategy avoid confusion between the image
developed for the high quality line of products and that developed for the lower quality lines.
11-157 PRIVATE BRANDING DEFINITION
A company uses __________ when it manufactures products but sells them under the brand name
of a wholesaler or retailer.
a. manufacturer branding
b. private branding
c. generic branding
d. proprietary rights
e. riparian rights
Answer: b Page: 248

Rationale: Text term definitionprivate branding
11-158 PRIVATE BRANDING DEFINITION
Private branding is:
a. a branding strategy that involves giving each product a distinct name.

b. a strategy where products are given no identifying names other than a description of its
contents.
c. a branding strategy in which a company uses one name for all of its products.
d. a branding strategy in which manufacturers produce products that are sold under the brand
Answer: d Page: 248

Rationale: Text term definitionprivate branding
11-159 PRIVATE BRANDING APPLICATION
Thirty-six percent of sales at supermarkets in the United Kingdom carry the stores' own brand
names. Eighteen percent of all supermarket sales in France and Germany carry the stores' own
brand names; and in the US, 14 percent do. These supermarkets are using a __________ strategy
to sell consumer food.
a. private branding
b. generic branding
c. multibranding
d. co-branding
e. multiproduct branding
Answer: a Page: 248

Rationale: Private branding involbes manufacturing a product but selling them under the brand
name of a wholesaler or retailer. In this case each grocery chain is selling products manufactured
by others under their own brand name.
11-160 MARKETING NEWSNET CONCEPTUAL
Which of the following statements about Pez is true?
a. Pez comes from the German word for peppermint, pfefferminz.

b. Pez was successfully sold in Europe as an adult breath mint.
c. Pez was originally packaged in a headless dispenser.
d. Pez first appeared in the United States in 1953.
e. All of the above statements about Pez are true.
Answer: e Page: 249

Rationale: The Marketing NewsNet describes how Pez creates customer value through
packaging. The package was changed from a hygienic headless container to one with a licensed
character head on it to increase sales to the preteen and teenage target markets.
11-161 MIXED BRANDING DEFINITION
Mixed branding is a branding strategy:
a. that involves giving each product a distinct name.

b. that uses different brand names for the same product across multiple countries.
c. in which a company uses one name for all of its products.
d. in which a company markets products under their own name and that of a reseller.
e. in which a company follows both manufacturer and generic branding approaches for products
in its mix.
Answer: d Page: 249

Rationale: Text term definitionmixed branding
719
11-162 MIXED BRANDING DEFINITION
A branding strategy in which a company markets products under its own name and that of a
reseller is called:
a. multibranding.
c. private branding.
d. mixed branding.
Answer: d Page: 249

Rationale: Text term definitionmixed branding
11-163 PACKAGING DEFINITION
Packaging is:
a. any box, bottle, jar, can, carton or bag that can be used for transporting durable or nondurable
goods.
b. any container in which a product is offered for sale and on which information is
communicated.
c. that part of a product that is not consumed.
d. any container used for storage of consumer or industrial goods.
e. accurately described by none of the above.
Answer: b Page: 249

Rationale: Key term definitionpackaging
11-164 LABEL DEFINITION
A label:
a. is an integral part of the package.

b. typically identifies the product or brand.
c. is typically an expensive part of the marketing strategy for a product.
d. provides important benefits for manufacturers, retailers, and consumers.
e. is accurately described by all of the above.
Answer: e Page: 249

Rationale: Text term definitionlabel
11-165 PACKAGING CONCEPTUAL
Which of the following can be conveyed through packaging?
a. communication benefits
b. storage benefits
c. perceptual benefits
d. protection benefits
e. all of the above
Answer: e Page: 250

Rationale: Packaging and labeling cost companies about $100 billion annually and account for
about 15 cents of every dollar spent by consumers for products. Despite the cost, packaging and
labeling are essential because both provide important benefits for the manufacturer, retailer, and
ultimate consumer. They include: (1) communication benefits, (2) functional benefits
including storage, and (3) perceptual benefits.
Which of the following statements about packaging is true?
a. Packaging can have brand equity benefits for the company.

b. Consumer protection is an important function of packaging.
c. Packaging can give the idea of status, economy, and product quality.
d. Packaging can be used to extend shelf life.
e. All of the above statements about packaging are true.

including storage, and (3) perceptual benefits. Specific benefits include brand equity benefits for
the company, consumer protection, image benefits for the company and customer, and extending
the shelf life of the product.
721
Which of the following statements does NOT describe a benefit associated with packaging?
a. Packaging provides consumers with valuable and necessary information about directions
regarding product usage and its composition.
b. Packaging extends a product's shelf life.
c. Packaging is an inexpensive product strategy to implement.
d. Packaging potentially increases product sales.
e. Packaging connotes product benefits or enhances psychographic attributes of the product.
Answer: c Page: 250

including storage, and (3) perceptual benefits.
Packages create customer value by providing:
a. legal disclaimers.
b. psychographic attributes about the product.
c. communication, functional, and perceptual benefits.
d. environmental impact statements.
e. all of the above.
Answer: c Page: 250

Rationale: Major benefits of packaging are the information communicated to consumers, its
functional benefits such as protection or storage, and the perception created in the consumers'
minds.
11-169 COMMUNICATION BENEFITS OF PACKAGING DEFINITION
Directions on how to use a product and the composition of a product that appear on packaging are
what kind of benefits?
b. storage benefits
d. protection benefits
e. all of the above
Answer: a Page: 250

Rationale: A major benefit of packaging is the label information on it that is communicated to
consumers.
11-170 FUNCTIONAL BENEFITS OF PACKAGING DEFINITION
Packaging that provides convenience, protection, or storage offers what kind of benefits?
b. functional benefits
d. physiological benefits
e. all of the above types of benefits

Rationale: Packaging often plays an important functional role such as convenience, protection,
or storage.
11-171 PERCEPTUAL BENEFITS OF PACKAGING DEFINITION
The ideas of status, economy, and product quality that packaging creates in the consumer's mind
relates to what kind of benefits?
b. functional benefits
d. physical benefits
e. all of the above types of benefit
Answer: c Page: 250

Rationale: Packaging plays an important perceptual role in helping to position the product in the
consumers mind in terms of status, economy, and product quality.
11-172 PERCEPTUAL BENEFITS OF PACKAGING CONCEPTUAL
A package can connote:
a. status, economy, and product quality.

b. economy, barter price, and distribution strategy.
c. all of the elements of the marketing mix.
d. product quality, company size, and industry growth rate.
e. consumerism, environmentalism, and industry ethical standards.
Answer: a Page: 250

Rationale: A component of packaging and labeling is the perception created in the consumers
mind. Characteristics such as shape and color can connote status, economy, and product quality.
723
11-173 PACKAGING APPLICATION
How does General Mills Gold Medal flour brand provide functional benefits through its
packaging?
a. By including company contact information on the bag

b. By including the Betty Crocker seal of approval on the bag
c. By using a fancier, gold-embellished label than the one currently used
d. By using a resealable plastic bag instead of a paper bag
e. All of the above would provide functional benefits through packaging.
Answer: d Page: 250

Rationale: Alternative a provides a communication benefit. Alternative b provides a perceptual
benefit as the Betty Crocker seal connotes quality to many consumers. Alternative c might be
a perceptual benefit, however the price for the additional seal would be unacceptable for this
type of product and would not be seen by most consumers as a benefit. Alternative d is a
functional benefit, as it allows storage of the flour in the original packaging, whereas the
paper bag package does not.
How does General Mills Gold Medal flour brand provide perceptual benefits through its
packaging?

Answer: b Page: 250

How does General Mills Gold Medal flour brand provide communication benefits through its
packaging?

Answer: a Page: 250

11-176 MANAGING THE MARKETING OF SERVICES CONCEPTUAL
The concepts of the product part of the marketing mix usually apply well to service with three
exceptions. They are:
a. exclusivity, branding, and capacity management

b. exclusivity, pricing, and branding
c. branding, capacity management, and promotion
d. capacity management, pricing, and promotion
e. pricing, promotion, and place
Answer: a Page: 251

Rationale: Only alternative a lists product elements of the marketing mix. Alternative b
includes pricing, not a product element. Alternative c includes promotion, not a product
element. Alternative d includes both pricing and promotion. Alternative c includes all the
other elements of the marketing mix except product elements.
725
11-177 MARKETING MIX FOR SERVICES CONCEPTUAL
When designing the product element of the marketing mix for services marketing managers
should give special attention to:
a. exclusivity, advertising, and capacity management.

b. exclusivity, branding, and capacity management.
c. advertising, packaging, and exclusivity.
d. capacity management, packaging and advertising.
e. brand name, packaging, and exclusivity.
Answer: b Page: 251

Rationale: There are three aspects of the product/service element of the mix that warrant special
attention; exclusivity, branding, and capacity management.
11-178 PATENTS CONCEPTUAL
A patent gives a manufacturer of goods exclusive rights for 17 years. A major difference
between goods and services is that:
a. services can be patented for the life of the creator.

b. services can be patented for 21 years.
c. services can be patented only for 10 years.
d. services cannot be patented.
e. there is no need to patent services.
Answer: d Page: 251

Rationale: Because services are intangibles, and normally based on an idea rather than a
process, they cannot be patented under current law. Such aspects of a service business as its
name, corporate colors, and slogans, however, can be copyrighted.
11-179 BRANDING SERVICES CONCEPTUAL
The use of brand names is especially important for services because of which unique
characteristic of services?
a. inventory costs
b. inseparability
c. inconsistency
d. invisibility
e. intangibility
Answer: e Page: 251

Rationale: Because services are intangible and, therefore, more difficult to describe, the brand
name or identifying logo of the service organization is particularly important in consumer
decisions.
11-180 BRANDING APPLICATION
Cracker Barrel is a leader in the market of family restaurants located alongside major highways.
Its marketing mix includes a down-home atmosphere, a shop through which customers pass on
the way to and from the restaurant, a menu of American home cooking, and a friendly staff.
Which aspect of the product component of the marketing mix will be particularly helpful to
travelers looking for a place to eat lunch?
a. capacity management
b. pricing strategy
c. brand name and identifying logo
d. exclusivity
e. all of the above
Answer: c Page: 251 Other Location: web

Rationale: Because services are intangible, and there are many competing places to eat at major
stops along the highway, brand name or identifying logo of the service organization is
particularly important in consumer decisions.
11-181 BRANDING APPLICATION
Andrea Arena is the owner of 2 Places at 1 Time, a concierge company. She and her staff of 60
perform everyday services such as walking the dog, picking up cleaning, waiting for the
repairman, and going to the post office for people who are too busy to perform these simple acts
themselves. This is a strong service brand name because it suggests:
a. the company has international experience.

b. the benefits provided by the service.
c. the company is employee-owned.
d. the company is a nonprofit organization.
e. the service concept is patented.
Answer: b Page: 251

Rationale: Because services are intangible, and therefore, more difficult to
describe, the brand name is particularly important. A strong brand name will
suggest or describe the benefit of the service.
11-182 CAPACITY MANAGEMENT DEFINITION
Integrating the service component of the marketing mix with efforts to influence consumer
demand is called:
a. off-peak pricing.
b. idle production capacity.
c. gap analysis.
d. capacity management.
e. inventory management.
Answer: d Page: 251

Rationale: Key term definitioncapacity management
727
11-183 CAPACITY MANAGEMENT APPLICATION
An airport limousine service will meet people at their homes and deliver them to or bring them
home from their local airport. Because demand is much higher before 9 a.m. and after 5 p.m.
during weekdays, it must be concerned with:
a. exclusivity.
b. image management.
c. branding.
d. inconsistency.
e. capacity management.
Answer: e Page: 251

Rationale: Most services have a limited capacity due to the inseparability of the service from the
service provider and the perishable nature of the service. So the service component of the mix
must be integrated with efforts to influence consumer demand. Service organizations must
manage the availability of the offer to smooth demand over time so that the demand matches
capacity and ensures a maximum ROI.
11-184 CAPACITY MANAGEMENT CONCEPTUAL
A patient must be in a hospital to "buy" an appendectomy, and a guest must be in a hotel to "buy"
an accommodation. To make the product/service component of the marketing mix available to
the consumer, the service component of the mix must be integrated with efforts to influence
consumer demand. What is this called?
a. allocation of resources
b. timing
c. capacity management
d. customized service
e. facilities analysis
Answer: c Page: 251

Rationale: The service component of the marketing mix must be integrated with efforts to
influence consumer demand. This is referred to as capacity management.
Pricing plays two essential roles in the managing of services. They are:
a. profit and capacity management.

b. profit and indicator of customer value.
c. influencing consumer perceptions and profit management.
d. influencing consumer perceptions and capacity management.
e. capacity management and cost recovery.
Answer: d Page: 251

Rationale: Price can (1) affect consumer perceptions of services (such as eye
surgery), and (2) be used in capacity management at services with variations
in demand (such as airlines and hotels).
Which unique characteristic of service has the most influence on pricing?
a. inventory costs
b. inseparability
c. inconsistency
d. invisibility
e. intangibility
Answer: e Page: 251

Rationale: The intangible nature of services makes price an important cue to indicate service
quality to the consumer.
11-187 OFF-PEAK PRICING DEFINITION
Many service businesses use off-peak pricing, which consists of charging different prices during
different times of the day or days of the week to reflect:
a. variations in costs of delivering service.

b. variations in demand for the service.
c. deviations from standard profit policies.
d. holidays and other special promotional events.
e. government regulations that may apply.
Answer: b Page: 251

Rationale: Key term definitionoff-peak pricing
11-188 OFF-PEAK PRICING DEFINITION
Setting prices during different times of the day or days of the week to reflect variations in demand
for the service is called:
a. off-peak pricing.
b. idle production capacity pricing.
c. customer contact audit pricing.
d. differential value pricing.
e. capacity inventory pricing.

Rationale: Key term definitionoff-peak pricing
729
11-189 OFF-PEAK PRICING APPLICATION
The headline in a newspaper advertisement for American Airlines proclaimed, "Florida: $199
Round Trip!" A closer examination of the advertisement revealed the special low price airfare
applied only to specific travel dates. That is, the $199 price applied to tickets to Florida during
the months of July and August. If a consumer wished to travel to Florida during the peak travel
times of October through May, the price of the ticket was $499. The airline was engaging in
__________ by offering lower prices for tickets during less desirable travel times.
a. price gouging
b. price differentiation
c. off-peak pricing
d. bait-and-switch pricing
e. package pricing
Answer: c Page: 251

Rationale: The capacity management role of price for services is illustrated by off-peak pricing.
Off-peak pricing means service providers charge different prices during different times of the
day, on weekends, or at different times of the year. The differences in price reflect differences in
demand for the service.
11-190 OFF-PEAK PRICING APPLICATION
Commuters in New York often have often installed devices on their cars that can be read
automatically as they approach a tollbooth. This saves time, improves traffic flow, and means
drivers don't need to keep suitable change in the car. It also offers New York authorities the
opportunity to manage traffic flow by charging different toll amounts for different times of day.
Commuters in New York are experiencing:
a. price gouging.
b. competitive pricing.
c. off-peak pricing.
d. internal marketing.
e. external marketing.
Answer: c Page: 251

Rationale: Off-peak pricing consists of charging different prices during different times of day or
days of the week to reflect variations in demand and for service. New York wants to try to reduce
traffic during the rush hour.
Place or distribution is extremely important to the managing services because of which unique
characteristic of services?
a. inventory costs
b. inconsistency
c. inseparability
d. intangibility
e. invisibility
Answer: c Page: 252

Rationale: Place or distribution is a major factor in developing service marketing strategy
because of the inseparability of services from the producer.
Historically in services marketing, little attention has been paid to:
a. product.
b. price.
c. place (distribution).
d. positioning.
e. promotion.
Answer: c Page: 252

Rationale: Historically, in services marketing, little attention has been paid to distribution. But
as competition grows, the value of convenient distribution is being recognized.
11-193 MARKETING MIX FOR SERVICES APPLICATION
Which of the 4 P's is a variable that health care providers could employ to reach their market
segments?
a. promotion
b. distribution
c. pricing
d. product
e. all of the above
Answer: e Page: 251-252

Rationale: Image advertising (promotion), mobile units (distribution), toll-free information
lines, specialized treatment centers (product), luxury packages (pricing), and no-frills services are
all examples of marketing mix changes for a health care provider.
731
Which of the following should be communicated to consumers when promoting services?
a. courteous service
b. availability
c. location
d. quality
e. all of the above
Answer: e Page: 252

Rationale: The value of promotion, specifically advertising, for many services
is to show the benefits of purchasing the service. Availability, location, quality
and courteous service are benefits to consumers.
Which component of the promotional mix is particularly important for nonprofit services?
a. advertising
b. sales promotion
c. personal selling
d. publicity
e. packaging
Answer: d Page: 252

Rationale: Nonprofit organizations often rely on publicity and public service announcements as
the foundation of their media plans because publicity and public service announcements are free.
11-196 PUBLIC SERVICE ANNOUNCEMENT DEFINITION
A publicity tool frequently used by nonprofit services, which uses free space or time donated by
the media is called a(n):
a. promotion.
b. advertisement.
c. public service announcement.
d. free standing insert.
e. publicity stunt.
Answer: c Page: 252

Rationale: Because public service announcements are free, nonprofit groups have tended to rely
on them as the foundation for their media plans.
11-197 PUBLIC SERVICE ANNOUNCEMENT DEFINITION
Many nonprofit organizations have used what are called PSAs in their media planning. What
does the abbreviation PSA stand for?
a. public service announcement

b. publicity savings allocation
c. publicly served audience
d. pluralistic society allotment
e. promotional service allocation
Answer: a Page: 252

Rationale: Many services use public service announcements (PSAs), and
because PSAs are free, nonprofit organizations have tended to rely on them
as a foundation of their media plan.
11-198 PUBLIC SERVICE ANNOUNCEMENT CONCEPTUAL
Nonprofit services cannot control who sees a public service announcement or when the message
is given because:
a. PSAs tie up too large a percentage of the service's advertising budget.

b. PSAs are traditionally boring and not well designed.
c. timing and location of the PSA are under the control of the medium, not the organization.
d. PSAs have a very limited reach or scope.
e. PSAs are a form of two-way communication.
Answer: c Page: 252

Rationale: The timing and location of a PSA are under the control of the medium, not the
organization.
11-199 VIDEO CASE: BMW CONCEPTUAL
BMW's strategy is to keep its products in the:
a. introduction and growth stages.

b. growth and maturity stages.
c. introduction stage.
d. growth stage.
e. growth and maturity stages.
Answer: a Page: 254

Rationale: BMW's strategy is to keep its products in the introduction and growth stages by
periodically introducing new models in each of its product lines.
733
11-200 VIDEO CASE: BMW CONCEPTUAL
Which of the following statements about BMW is true?
a. BMW cars typically have a product life cycle of seven years.

b. BMW has a trademark naming system for its cars.
c. Pierce Bronson drove a BMW in the James Bond film, Goldeneye.
d. BMW's website is an integrated part of the overall marketing strategy for BMW.
e. All of the above statements about BMW are true.
Answer: e Page: 255

Rationale: In the BMW video case the following are discussed: BMW cars typically have a
product life cycle of seven years. BMW names its cars with the series number and size of engine,
a trademark naming system for its cars. Pierce Bronson drove a BMW in the James Bond film,
Goldeneye, thus giving the brand high-visibility promotion. BMWs website is an integrated part
of the overall marketing strategy for BMW. On the website you can design your own car,
transfer that information to your local dealership and even negotiate prices via the web.
CHAPTER 11
SHORT ESSAY QUESTIONS
11-201 PRODUCT LIFE CYCLE CONCEPTUAL
Identify and describe the stages of the generalized product life cycle. For each stage, specify the
marketing objective a firm should attempt to achieve.
Answer:
1) Introduction Stage: occurs when new products are first commercialized to their intended
target markets. The marketing objective at this stage is to create consumer awareness and
stimulate trial (primary demand).
2) Growth Stage: is characterized by rapid increases in product sales as both trials and repeat
purchases increase. Because the number of competitors increases, the marketing objective
is to differentiate the firm's brand from its competitors through the addition of features or
improved product quality (selective demand).
3) Maturity Stage: is characterized by the leveling off of product sales within the total
industry or product class. The marketing objective is to maintain brand loyalty and hold
market share through further product differentiation, increased promotion and distribution
efficiency, and price reductions though rebates and discounts.
4) Decline Stage: occurs when both sales and profits decline due to environmental changes
(new technologies appear, consumer preferences change, etc.). The marketing objective is
to reduce product support.
Page: 234-238;Figure 11-1
11-202 PRIMARY AND SELECTIVE DEMAND DEFINITION
Explain the difference between primary demand and selective demand.
Answer:
Primary demand is a desire for the product class (such as food processors or potatoes) rather than
for a specific brand. Demand for a specific brand is referred to as selective demand.
Page: 234-235
735
Describe the decline stage of the product life cycle. Explain the two strategies a company might
employ if its product were in the decline stage of the product life cycle.
Answer:
The decline stage occurs when sales and profits are steadily dropping. Frequently, a product
enters this stage not because of any wrong strategy on the part of the company but because of
environmental changes. To handle a declining product, a company follows one of two strategies.
Deletion is dropping the product from the companys product line and is the most drastic action.
Harvesting is when a company keeps the product but reduces marketing costs.
Page: 238
11-204 LENGTH OF THE PRODUCT LIFE CYCLE CONCEPTUAL
How long is a product life cycle? What determines its length?
Answer:
There is no exact time that a product takes to move through its life cycle. As a rule, consumer
products have shorter life cycles than business products. The availability of mass communication
devices such as television and the Internet, informs consumers faster and shortens life cycles.
Also, technological change tends to shorten product life cycles as new product innovation
replaces existing products.
Page: 238-239
11-205 FIVE PRODUCT LIFE CYCLE TYPES CONCEPTUAL
What are the five product life cycle types described in the text? For each type, describe (and as an
option, draw) its characteristics.
Answer:
The five product life cycles are:
1) Generalized is the type that is generally discussed in the textit starts at introduction,
climbs through growth, plateaus during maturity, and starts to decline during the decline
stage.
2) With High-learning PLC significant product education is required by consumers, resulting
in an extended introduction stage.
3) With Low-learning PLC significant sales occur during the introduction stage because
consumers require little information regarding the product's use or benefits.
4) The Fashion life cycle can repeat as consumer preferences change and then revert back,
thus creating several life cycles over many years. Occurs with mens and womens fashion
clothing.
5) The Fad life cycle experiences a rapid increase followed by a rapid decrease in sales during
a relatively short period of time. Thus, the life cycle primarily consists of an introduction
and a decline stage, with highly compressed growth and maturity stages.
Page: 239-240
Define diffusion of innovation. Identify and describe the categories and profiles of each product
adopter.
Answer:
The diffusion of innovation is the extent to which a new product or technology spreads or
"diffuses" through a population in terms of initial purchases. The five categories of product
adopters are:
1) Innovators: These adopters tend to be venturesome, possess higher education, and use
multiple information sources before making product purchases.
2) Early Adopters: These adopters are leaders in social settings, and have above average
education.
3) Early Majority: These consumers are deliberate when making product purchases and use
many informal social contracts as information sources.
4) Late Majority: These consumers are skeptical about new products and possess a lower than
average social status.
5) Laggards: These consumers have a fear of debt and rely on neighbors and friends for
information regarding new products.
Page: 241; Figure 11-4
11-207 MANAGING THE PRODUCT LIFE CYCLE CONCEPTUAL
Compare the three ways to manage a product through its product life cycle.
Answer:
The three ways to manage a product through its life cycle include modifying the product,
modifying the market, and repositioning the product. Product modification strategies involve
altering a product characteristic, such as quality, performance, or appearance to try to increase
and extend its sales and life cycle. With market modification strategies, a company tries to
increase a product's use among existing customers, to create new use situations, or to find new
customers. Product repositioning is changing the place a product occupies in a consumer's mind
relative to competitive products. A firm can reposition a product by changing one or more of the
four marketing mix elements.
Page: 241-242
737
11-208 ETHICS AND SOCIAL RESPONSIBILITY ALERT APPLICATION
For more than 30 years, Starkist put 6.5 ounces of tuna into its regular-sized can. Today, Starkist
puts 6.1255 ounces of tuna into its can but charges the same price. Colgate-Palmolive's Ajax
king-size laundry detergent package has remained the same size, but the contents have been cut
from 61 ounces to 55 ounces and the package price increased from $2.59 to $2.79. There are two
sides to the ethical argument about this practice: that of consumer advocates, and that of
manufacturers. What is the practice called, and what are the basic positions of the two sides?
Answer:
The practice is called "downsizing." Consumer advocates charge that downsizing packages while
maintaining or increasing prices is a subtle and unannounced way of taking advantage of
consumers' buying habits. Manufacturers argue that this practice is a way of keeping prices from
rising beyond psychological barriers for their products. Students may or may not believe it is
ethical for manufacturers to reduce the contents of their packages without informing consumers.
Page: 243
11-209 TRADING UP/TRADING DOWN CONCEPTUAL
Explain the difference between trading up and trading down in repositioning a product.
Answer:
Trading up involves adding value to the product (or line) through additional features or high
quality materials. For example, BMW traded up with a new model, 750 sci, which costs $67,000.
Trading down involves reducing the number of features, quality, or price. For example,
Mercedes traded down its line with the introduction of the Mercedes 190 Sedan.
Page: 243
11-210 BRAND NAME AND BRAND PERSONALITY CONCEPTUAL
What is the difference between a brand name and a brand personality? Give an example of each.
Answer:
A brand name is any word, device (design, sound, shape, or color), or combination of these,
used to distinguish a seller's goods or services. Some brand names can be spoken, such as Big
Mac hamburger. Other brand names cannot be spoken, such as the logo (the rainbow-colored
apple) that Apple Computer puts on its machines and in its ads. A brand personality is a set of
human characteristics associated with a brand name. Research shows that consumers often assign
personality traits to productstraditional, romantic, rugged, sophisticated, rebelliousand
choose brands that are consistent with their own or desired self-image. Marketers provide a
brand with a personality through advertising that depicts a certain user or usage situation and
conveys certain emotions or feelings to be associated with the brand. Coca-Cola personality traits
are American, real, and cool. Dr. Peppers are nonconforming, unique, and fun.
Page: 244-245
11-211 BRAND EQUITY DEFINITION
List the four sequential steps used to develop brand equity. Which step is the most difficult?
Answer:
1) The first is to develop a positive brand awareness and an association of the brand in
consumers' minds with a product class or need to give the brand an identity.
2) Next, a marketer must establish a brand's meaning in the minds of consumers.
3) The third step is to get consumers to develop proper responses to a brand's identify and
meaning.
4) The final and most difficult step results in an intense, active loyalty relationship between
consumer and the brand.
Page: 245-246
11-212 CRITERIA FOR GOOD BRAND NAME CONCEPTUAL
What five criteria are mentioned most often in selecting a good brand name? Give an example of
a brand name that illustrates each of the criteria.
Answer:
Five criteria are mentioned most often in selecting a good brand name:
1) The name should suggest the product benefits (e.g. Accutron, Easy-Off).
2) The name should be memorable, distinctive, and positive (e.g., Mustang).
3) The name should fit the company or product image (e.g. Sharp, Snackwell).
4) The name should have no legal restrictions (e.g. Heartwise-using heart is discouraged by
FDA).
5) The name should be simple (e.g., Bold, Sure). Internationally, the name should not have
any prior impressions or undesirable images among a diverse world population of different
languages and cultures.
Page: 246-247
739
11-213 BRANDING STRATEGIES CONCEPTUAL
Identify and describe the three branding strategies used by product marketers.
Answer:
Product managers use the following branding strategies:
1) Manufacturer branding: the producer dictates the brand name used. This strategy may use
one of two approaches:
a) multibranding: occurs when a firm gives each product a distinct name
b) multiproduct (family or blanket) branding: occurs when a firm uses one brand name
for all of its products.
2) Private branding: the producer manufactures the product but sells them under the brand
3) Mixed branding: the producer markets products under its own name and also under that of
a reseller because the target segment which is attracted to the reseller is different than the
target segment of the producer.
Page: 247-249
11-214 MANUFACTURER BRANDING CONCEPTUAL
What is manufacturer branding strategy? What are the two approaches associated with
manufacturer branding strategy. What advantages are offered by each of these two approaches?
Answer:
Manufacturer branding is a naming strategy in which the producer dictates the brand name. The
manufacturer may use either a multiproduct or multibrand approach. Multiproduct branding is
when a company uses one name for all its products. This approach is often referred to as a
"blanket" or "family" branding strategy. Consumers who have a good experience with one
product will transfer this favorable attitude to other products in the product class with the same
name. This strategy can also result in lower advertising and promotion costs because the same
name is used on all products, thus raising the level of brand awareness. The multibrand approach,
or multibranding, involves giving each product a distinct name. Sometimes the same product is
sold under different names, especially internationally. Advertising and promotion costs for
multibranded products tend to be higher, because the manufacturer must generate awareness
among consumers and retailers for each new brand name without the benefit of any previous
impressions. However, each brand is unique to each market segment and there is no risk that a
product failure will affect other products in the line.
Page: 247-248
11-215 MULTIPRODUCT BRANDING CONCEPTUAL
What is multiproduct branding? What are its advantages? Disadvantages?
Answer:
Multiproduct branding is when a company uses one brand name for all its products. This
approach is often referred to as a blanket or family branding strategy. There are several
advantages. Consumers who have had a good experience with one product in the line may also
carry a favorable attitude toward other products in the line. This approach can result in lower
advertising and promotion costs because the same brand name is used on all products within the
line, raising the level of brand awareness. A new product is viewed as an extension of an existing
line rather than a totally new item. A blanket branding approach can also facilitate getting the
product accepted by retail stores. The disadvantages of multiproduct branding are that:
a) poor performance of one item may have a negative impact on similarly named items in the
line
b) too many uses for one brand name can dilute the image of a product line.
Page: 248
11-216 BENEFITS OF PACKAGING CONCEPTUAL
Explain the following statement: Packaging provides communication, functional and perceptual
benefits for manufacturers, retailers, and consumers.
Answer:
Packages provide important benefits for the manufacturer, retailer, and ultimate consumer. These
benefits include:
1) Communication benefits. A major benefit of packaging is the information on it is
conveyed to the consumer, such as directions on how to use the product and what the
product is made of, which is needed to satisfy legal requirements of product disclosure.
2) Functional benefits. Packaging often plays an important functional role, such as
convenience, protection, or storage. Another functional value of packaging is in extending
storage and shelf life (the time a product can be stored before it spoils).
3) Perceptual benefits. Packaging can create a perception in the consumer's mind. For
example, in the past the color of packages was selected subjectively. Today, there is
greater recognition that color affects a consumer's perceptions. A package can also connote
status, economy, or product quality.
Page: 250
741
11-217 MANAGING THE MARKETING OF SERVICES CONCEPTUAL
What are the three aspects of the product/service element of the marketing mix that warrant
special attention by service marketers?
Answer:
1) Exclusivity: services are not patentable like goods, which gives manufacturers of goods a
17-year exclusive right to a product's production and marketing.
2) Branding: since services are intangible, the brand name or identifying logo is extremely
important in helping potential customers decide to purchase the service because of the
difficulty in differentiating a service from its competitors.
3) Capacity management: services possess the attribute of inseparability, which means that the
customer must be present to simultaneously buy and use the service at the service delivery
site. So the service component of the mix must be integrated with efforts to influence
consumer demand.
Page: 251
11-218 PRICING SERVICES CONCEPTUAL
What role does pricing play in the managing of services?
Answer:
There are two roles pricing plays in managing services:
Consumer perception: Because of the intangible nature of services, consumers have few clues by
which to judge their quality. In such cases, consumers use price as an indicator of quality.
Therefore, the price of a service can change the perceptions of the value of what is offered.
Capacity management: Since it can affect the level of demand for a service, organizations use
price to help keep demand within capacity. For example, a movie theater might offer matinee
prices or a restaurant might offer luncheon specials to increase demand for the service at that time
of day. Prices often are changed as a function of demand according to the time of day or the day
of the week.
Page: 251

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Chapter 11

MANAGING PRODUCTS, SERVICES, AND BRANDS

Major Section of the

Video Case: BMW: 199, 200

Note: Bold numbers indicate short essay questions.

MULTIPLE CHOICE QUESTIONS

11-1 CHAPTER OPENING EXAMPLE: GATORADE CONCEPTUAL

Which of the following statements about Gatorade is true?

a. Michael Jordan has been a Gatorade spokesperson.

Answer: e Page: 233

11-2 CHAPTER OPENING EXAMPLE: GATORADE CONCEPTUAL

Which of the following statements about Gatorade is true?

a. Gatorade began as a rehydration beverage for a football team.

Answer: a Page: 233

11-3 PRODUCT LIFE CYCLE DEFINITION

a. the retail life cycle.

Answer: b Page: 234; Figure 11-1

Answer: d Page: 234

11-5 INTRODUCTION STAGE CONCEPTUAL

a. insufficient allocation of resources to the marketing mix.

Answer: d Page: 234 Other Location: web

11-6 INTRODUCTION STAGE CONCEPTUAL

Answer: a Page: 234 Other Location: web

Answer: a Page: 234

11-8 INTRODUCTION STAGE CONCEPTUAL

a. to gain awareness and stimulate trial

Answer: a Page: 234

a. to gain awareness and stimulate trial

Answer: a Page: 234

11-10 PRIMARY DEMAND APPLICATION

a. additional marketing research

Answer: c Page: 234

11-11 PRIMARY DEMAND APPLICATION

Answer: b Page: 234

Answer: b Page: 234

11-13 PRIMARY DEMAND APPLICATION

Answer: b Page: 234

11-14 PRIMARY DEMAND CONCEPTUAL

a. contests and sweepstakes.

Answer: c Page: 234

Answer: a Page: 235

11-16 SELECTIVE DEMAND DEFINITION

Answer: a Page: 235

11-17 SELECTIVE DEMAND APPLICATION

Answer: a Page: 235

a. reducing inventory costs.

Answer: b Page: 235; Figure 11-1

11-19 PRODUCT LIFE CYCLE APPLICATION

Answer: a Page: 235

Answer: e Page: 235; Figure 11-1

11-21 SKIMMING PRICING APPLICATION

Answer: e Page: 235; Figure 11-1 Other Location: web

11-22 SKIMMING PRICING CONCEPTUAL

A company follows a skimming strategy as part of introducing a new product to:

Answer: a Page: 235

Answer: d Page: 235 Other Location: web

11-24 PENETRATION PRICING DEFINITION

Answer: a Page: 236

Answer: a Page: 236

11-26 PENETRATION PRICING CONCEPTUAL

Answer: e Page: 236

11-27 INTRODUCTION STAGE CONCEPTUAL

Answer: e Page: 235; Figure 11-1

Answer: e Page: 235; Figure 11-1