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Chapter 06 - Product and Brand Strategy
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Chapter 06
Product and Brand Strategy
Multiple Choice Questions
1. Which of the following observations about a product is correct?

a. The essential benefits that the buyer expects to receive from a product constitute the
tangible product.
b. A particular product can be viewed as a tangible, extended, or generic product.
c. The generic product is defined as the tangible product along with all the services that
accompany it.
d. The extended product is defined as the physical entity or service that is sold by the firm.
Answer: b
Topic: Basic Issues in Product Management
Blooms: Remember
AACSB: Analytic
Level of Difficulty: Easy
Explanation: The way in which the product variable is defined can have important
implications for the survival, profitability, and long-run growth of the firm. A particular
product can be viewed as a tangible, extended, or generic product.
2. The physical entity that is offered to the buyer is defined as a(n) _____.
a. extended product
b. value-added product
c. tangible product
d. generic product
Answer: c
Blooms: Remember
AACSB: Analytic
6-1
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implications for the survival, profitability, and long-run growth of the firm. The physical
entity or service that is offered to the buyer is known as a tangible product.
3. The tangible product along with the whole cluster of services that accompany it is called
a(n) _____.
a. extended product
b. improvised product
c. new product
d. physical product
Answer: a
Blooms: Remember
AACSB: Analytic
6-2

implications for the survival, profitability, and long-run growth of the firm. The tangible
product along with the whole cluster of services that accompany it is called an extended
product.
4. A product that is viewed in terms of providing the essential benefits that the buyer expects
to receive from it is referred to as a(n) _____.
a. tangible product
b. generic product
c. intangible product
d. physical product
Answer: b
Blooms: Remember
AACSB: Analytic
Explanation: The essential benefit the buyer expects to receive from the product is called a
generic product.
5. Many personal care products bring to the purchaser feelings of self-enhancement and
security in addition to the essential benefits they offer. This is an illustration of a(n) _____.
a. physical product
b. generic product
c. tangible product
d. conventional product
Answer: b
Blooms: Remember
AACSB: Analytic
Explanation: A generic product constitutes the essential benefits the buyer expects to receive
from the product. For example, many personal care products bring to the purchaser feelings of
self-enhancement and security in addition to the tangible benefits they offer.
6-3
6. Which of the following observations is true?

a. Generic products are known as commodities or unbranded goods.
b. A generic product is defined as the tangible product along with the whole cluster of
services that accompany it.
c. An extended product is only the physical entity or service that is offered to the buyer.
d. Executives who are guilty of “marketing myopia” define their company’s product too
narrowly.
Answer: d
Blooms: Remember
AACSB: Analytic
Level of Difficulty: Medium
Explanation: From the standpoint of the marketing manager, to define the product solely in
terms of the tangible product is to fall into the error of "marketing myopia."
7. What is marketing myopia?

a. Defining a product solely in terms of the tangible product and its features
b. Defining a product in terms of the essential benefits the buyer expects to receive from it
c. Defining a product in terms of the integrated marketing systems approach
d. Defining a product in terms of its expected success in the market
Answer: a
Blooms: Remember
AACSB: Analytic
Explanation: From the standpoint of the marketing manager, to define the product solely in
terms of the tangible product is to fall into the error of “marketing myopia.” Executives who
are guilty of committing this error define their company’s product too narrowly, since they
overemphasize the physical object itself.
8. Which of the following is a basic assumption underlying product classification schemes?

a. Each product is unique and should be marketed differently.
b. The same marketing strategy can be used for all product types.
c. Products with common attributes can be marketed in a similar fashion.
d. Products should be differentiated on the basis of profit margins rather than product features.
Answer: c
Blooms: Understand
AACSB: Analytic
Explanation: A basic assumption underlying product classification schemes is that products
with common attributes can be marketed in a similar fashion. In general, products are classed
according to two basic criteria: (1) end use or market, and (2) degree of processing or physical
transformation.
6-4
9. Goods grown or extracted from the land or sea, such as iron ore, wheat, and sand are better
known as _____.
a. agricultural products and raw materials
b. consumer goods
c. convenience goods
d. specialty goods and intermediate products
Answer: a
Blooms: Remember
AACSB: Analytic
Explanation: In general, products are classed according to two basic criteria: (1) end use or
market, and (2) degree of processing or physical transformation. Agricultural products and
raw materials are goods grown or extracted from the land or sea, such as iron ore, wheat and
sand.
10. Lumber, coal, and iron ore are examples of _____.

a. consumer goods
b. convenience goods
c. raw materials
d. specialty goods
Answer: c
Blooms: Remember
AACSB: Analytic
Explanation: Agricultural products and raw materials are goods grown or extracted from the
land or sea, such as iron ore, wheat and sand. In general, these products are fairly
homogeneous, sold in large volume, and have low value per unit or in bulk weight.
11. Which of the following statements about agricultural goods is true?

a. They have high value per unit.
b. They are fairly homogeneous.
c. They are sold in single units.
d. They include basic machinery.
Answer: b
Blooms: Remember
AACSB: Analytic
Explanation: Agricultural products are goods grown or extracted from the land or sea, such as
iron ore, wheat, and sand. They are fairly homogeneous, sold in large volume and have low
value per unit or in bulk weight.
6-5
12. Products that are purchased by business firms for the purpose of producing other goods or
services for running a business are called _____.
a. convenience goods
b. organizational goods
c. specialty goods
d. shopping goods
Answer: b
Blooms: Remember
AACSB: Analytic
Explanation: Organizational goods are products purchased by business firms for the purpose
of producing other goods or for running the business.
13. Major and minor equipment such as basic machinery, tools, and other processing facilities
are classified as _____.
a. specialty goods
b. organizational goods
c. semifinished goods
d. agricultural goods
Answer: b
Blooms: Remember
AACSB: Analytic
of producing other goods or for running the business. Major and minor equipment, such as
basic machinery, tools and other processing facilities are included in this category.
14. Which of the following products would be classified as an organizational good?

a. An electric generator purchased to use in the event of a power outage at home
b. Large amounts of fabric purchased by homeowner to have curtains and upholstery made
c. Equipment brought by a man to remove a tree lying across his driveway
d. Timber purchased by the owner of a furniture store to make chairs
Answer: d
Blooms: Apply
AACSB: Reflective Thinking
of producing other goods or for running the business. This category includes raw materials
and semifinished goods.
6-6
15. Which of the following statements regarding organizational goods is true?

a. Organizational goods are usually purchased as an end in themselves.
b. The channels of distribution for these goods are longer than those for consumer goods.
c. Organizational goods include anything that businesses need for their day-to-day operation.
d. The primary purchasing motive for organizational goods is convenience even if the prices
being paid are steep.
Answer: c
Blooms: Understand
AACSB: Analytic
of producing other goods or for running the business.
16. Convenience goods, shopping goods, and specialty goods are the three classes of _____.
a. agricultural goods
b. raw materials
c. organizational goods
d. consumer goods
Answer: d
Blooms: Remember
AACSB: Analytic
Explanation: Convenience goods, shopping goods, and specialty goods are the three classes of
consumer goods.
17. Which of the following is the best example of a specialty good?

a. A pair of school shoes
b. A fax machine
c. A diamond necklace
d. A pack of peanut butter crackers
Answer: c
Blooms: Apply
Explanation: Specialty goods are classified under consumer goods. They are goods which are
unique in some way so the consumer will make a special purchase effort to obtain them.
6-7
18. Pritchard's fine rum is the only rum that is actually distilled in the southeastern part of the
United States. Cruzan and Myers, both made in the Caribbean, are its main competitors.
Pritchard's fine rum has a more bourbon-like flavor than other brands of rum, which tend to
taste more like cognac. In terms of the classification of consumer goods, the distiller of
Pritchard's fine rum would want its rum to be categorized as a(n) _____.
a. specialty good
b. organizational good
c. shopping good
d. convenience good
Answer: a
Blooms: Apply
Explanation: Specialty goods are classified under consumer goods. They are goods which are
unique in some way so the consumer will make a special purchase effort to obtain them.
19. Which of the following is the best example of a shopping good?

a. A home security system
b. A bottle of Snapple pink lemonade
c. A pair of fingernail clippers
d. A truckload of bricks
Answer: a
Blooms: Apply
Explanation: Shopping goods, such as appliances, are products that are purchased after some
time and energy are spent comparing the various offerings.
20. Shannon Cruz is very particular about the kind of blue jeans she wears. She refuses to buy
anything other than Levi 505’s and goes to great lengths to find that particular fit if her local
store does not have it. This scenario is an example of Levi 505s being a(n) _____.
a. convenience good
b. intermediate good
c. intangible good
d. specialty good
Answer: d
Blooms: Apply
Explanation: Specialty goods are goods which are unique in some way so the consumer will
make a special purchase effort to obtain them.
6-8
21. _____ goods are purchased frequently with minimum effort.

a. Specialty
b. Convenience
c. Shopping
d. Organizational
Answer: b
Blooms: Remember
AACSB: Analytic
Explanation: Convenience goods, such as food, which are purchased frequently with
minimum effort. Impulse goods would also fall into this category.
22. _____ goods fall under the category of convenience goods.

a. Impulse
b. Agricultural
c. Organizational
d. Specialty
Answer: a
Blooms: Remember
AACSB: Analytic
Explanation: Convenience goods, such as food, which are purchased frequently with
minimum effort. Impulse goods would also fall into this category.
23. The demand for organizational goods is a(n) _____.

a. end-user demand
b. direct demand
c. derived demand
d. low-value demand
Answer: c
Blooms: Remember
AACSB: Analytic
Explanation: Organizational goods are usually purchased as means to an end and not as an
end in themselves. This is another way of saying that the demand for organizational goods is a
derived demand.
6-9
24. _____ refers to a market for organizational products that have a limited number of buyers.
a. Horizontal market
b. Consumer market
c. Vertical market
d. Convenience goods market
Answer: c
Blooms: Remember
AACSB: Analytic
Explanation: Certain products have a limited number of buyers; this is known as a vertical
market, which means that (1) it is narrow, because customers are restricted to a few industries;
and (2) it is deep, in that a large percentage of the producers in the market use the product.
25. The vertical market for a product is deep. Which of the following best explains the
previous statement?
a. Customers who buy the product are highly likely to switch to substitutes.
b. A large percentage of the producers in the market use the product.
c. The product is purchased by all types of firms in many different industries.
d. The product appeals to different social classes of consumers.
Answer: b
Blooms: Remember
AACSB: Analytic
26. Which of the following statements about a vertical market is true?

a. It is a market that consists solely of buyers of agricultural goods.
b. It is a type of consumer goods market.
c. It consists of products that are purchased by many different industries.
d. It is narrow because customers are restricted to a few industries.
Answer: d
Blooms: Remember
AACSB: Analytic
6-10
27. Which of the following best describes a horizontal market?

a. These markets offer only specialty goods so that consumers will make a special effort to
buy them.
b. These markets offer certain products that have a limited number of buyers.
c. These markets offer goods that are purchased by all types of firms in many different
industries.
d. These markets include only those convenience goods that are purchased frequently and
with minimum effort.
Answer: c
Blooms: Remember
AACSB: Analytic
Explanation: Some products, such as desktop computers, have a horizontal market, which
means that the goods are purchased by all types of firms in many different industries.
28. Compact, a leading manufacturer of measurement devices, makes handheld devices for
continuous monitoring of the atmosphere in manufacturing plants where hazardous materials
are routinely used as component materials. Since the number of industries that require such
protective devices is limited, it can be said that Compact operates in a _____.
a. consumer goods market
b. vertical market
c. specialty goods market
d. high-demand market
Answer: b
Blooms: Apply
Level of Difficulty: Hard
29. Many organizational goods are subject to _____ and a long period of negotiation is often
required to finalize the purchase decision.
a. single-purchase influence
b. multiple-purchase influence
c. reference-group influence
d. straight rebuy system
Answer: b
Blooms: Remember
AACSB: Analytic
6-11
Explanation: Many organizational goods are subject to multiple-purchase influence and a long
period of negotiation is often required.
30. Which of the following is defined as the degree of excellence or superiority that an
organization's product possesses?
a. Quality
b. Width
c. Depth
d. Reach
Answer: a
Blooms: Remember
AACSB: Analytic
Explanation: Quality can be defined as the degree of excellence or superiority that an
organization's product possesses. Quality can encompass both the tangible and intangible
aspects of a firm’s products or services.
31. Firearms Training Systems (FATS) is the leading producer of interactive simulation
systems designed to provide training in the handling and use of small and supporting arms for
law enforcement, military, and commercial applications. FATS is also ISO 9000-certified.
The ISO 9000-certification means FATS:
a. provides low-cost products in a relatively horizontal market.
b. meets standardized levels of product quality.
c. follows a traditional marketing approach focused primarily on product features.
d. competes in a purely vertical market.
Answer: b
Blooms: Apply
Explanation: The ISO 9000 quality system is a standardized approach for evaluating a
supplier's quality system, which can be applied to virtually any business. The emphasis on
quality has risen to such a level that over 70 countries have adopted the ISO 9000 quality
system of standards.
32. Value refers to the:

a. tangible aspects of a firm’s products or services.
b. physical traits such as serviceability and reliability of a product.
c. full set of physical products offered for sale by the organization.
d. returns the customer gets in exchange for what the customer pays.
Answer: d
Blooms: Remember
AACSB: Analytic
6-12

Explanation: Value can be defined as what the customer gets in exchange for what the
customer gives. In other words, a customer, in most cases, receives a product in exchange for
having paid the supplier for the product.
33. Which of the following statements is true?

a. The terms quality and value are synonymous in the context of product management.
b. The term quality applies to external aspects of product management, while value relates to
the internal factors
c. The level of quality and value a firm’s products have cannot be measured against external
standards.
d. The concept of value combines the quality and the price elements of the product mix.
Answer: d
Blooms: Remember
AACSB: Analytic
Explanation: Value encompasses not only quality but also price. Value can be defined as what
the customer gets in exchange for what the customer gives.
34. The full set of products offered for sale by an organization is defined as a firm’s ____.
a. product features
b. product mix
c. product equity
d. product line
Answer: b
Blooms: Remember
AACSB: Analytic
Explanation: A firm's product mix is the full set of products offered for sale by the
organization. A product mix may consist of several product lines, or groups of products that
share common characteristics, distribution channels, customers, or uses.
35. A _____ consists of several product lines, or groups of products that share common
characteristics, distribution channels, customers, or uses?
a. product variant
b. product anchor
c. product mix
d. product feature
Answer: c
Blooms: Remember
AACSB: Analytic
6-13
Explanation: A product mix may consist of several product lines, or groups of products that
share common characteristics, distribution channels, customers, or uses. A firm’s product mix
is described by its width and depth.
36. The width of a product mix refers to the:

a. number of product lines handled by the organization.
b. maximum number of products in each line.
c. total number of products in each line marketed through personal selling.
d. market share of the organization in the industry.
Answer: a
Blooms: Remember
AACSB: Analytic
Explanation: A firm’s product mix is described by its width and depth. Width of the product
mix refers to the number of product lines handled by the organization.
37. What does the depth of a product mix refer to?

a. The number of product lines handled by the organization
b. The length of time a product has been in the market
c. The average number of products in each product line
d. The total market share of the company from all its products
Answer: c
Blooms: Remember
AACSB: Analytic
Explanation: A firm’s product mix is described by its width and depth. Depth refers to the
average number of products in each line.
38. As Alan strolled through a shopping center, he tried to relate his lessons in a marketing
class to his observations at the mall. Which of Alan’s interpretations do you believe to be
most accurate?
a. The Tie Shop, which only sells ties, would have a wide product mix.
b. The Dollar Tree, which sells everything from baby rattles and potting soil to contact lens
cleaning solution, would have a narrow product mix and a deep assortment.
c. The Christian Superstore, which sells hundreds of self-help books, novels, and music with a
religious theme, has a narrow and deep product mix.
d. Louie's Bakery, which sells thirty-six different kinds of muffins, would have a deep product
mix.
Answer: d
Blooms: Apply
6-14
Explanation: A product mix may consist of several product lines or groups of products that
share common characteristics, distribution channels, customers or uses. Width of the product
mix refers to the number of product lines handled by the organization. Depth refers to the
average number of products in each line.
39. What is the legal term for a brand?

a. Generic mark
b. Emblem
c. Trademark
d. Watermark
Answer: c
Blooms: Remember
AACSB: Analytic
Explanation: A brand is a name, term, design, symbol, or any other feature that identifies one
seller’s good or service as distinct from those of other sellers. The legal term for brand is
trademark.
40. Which of the following observations about branding is true?

a. The legal term for brands is logos.
b. The nutritional label is the single most important element on the package, serving as a
unique identifier.
c. Brand building activities are limited and ineffective by nature.
d. A good brand name can evoke feelings of trust, confidence, security, and strength.
Answer: d
Blooms: Remember
AACSB: Analytic
Explanation: The brand name is perhaps the single most important element on the package,
serving as a unique identifier. A good brand name can evoke feelings of trust, confidence,
security, strength, and many other desirable characteristics.
41. The use of a brand name to facilitate entry into a new market segment without entering a
new product class is called _____.
a. brand extension
b. line extension
c. myopic marketing
d. multibranding
Answer: b
Blooms: Remember
AACSB: Analytic
6-15
Explanation: Many companies make use of manufacturer branding strategies in carrying out
market and product development strategies. The line extension approach uses a brand name to
facilitate entry into a new market segment.
42. In _____, a current brand name is used to enter a completely different product class.
a. line extension
b. brand extension
c. brand dilution
d. generic branding
Answer: b
Blooms: Remember
AACSB: Analytic
Explanation: An alternative to line extension is brand extension. In brand extension, a current
brand name is used to enter a completely different product class.
43. The McGregor Corporation makes four different varieties of their brand of Maxim cereal.
These varieties are Maxim corn flakes, Maxim raisin bran, Maxim honey clusters, and Maxim
brown sugar and oats cereal. McGregor Corp. has used a _____ with its Maxim cereal brand.
a. line extension approach
b. multibranding approach
c. brand extension approach
d. franchise extension approach
Answer: a
Blooms: Apply
market and product development strategies. The line extension approach uses a brand name to
facilitate entry into a new market segment.
44. Arm & Hammer first introduced a line of toothpastes under the Arm & Hammer brand
name. The introduction of a mouthwash and a chewing gum using the Arm & Hammer brand
name is an example of _____.
a. line extensions
b. multibranding
c. brand extensions
d. mass marketing
Answer: c
Blooms: Apply
6-16
market and product development strategies. In brand extension, a current brand name is used
to enter a completely different product class.
45. When a corporate name is attached to a product to enter into an entirely new market
segment, it would be an example of _____.
a. multibranding
b. franchise extensions
c. generic branding
d. line extensions
Answer: b
Blooms: Remember
AACSB: Analytic
Explanation: Franchise extension or family branding is a strategy whereby a company
attaches the corporate name to a product to enter either a new market segment or a different
product class.
46. Products ranging from cranberries to grapefruits marketed by Ocean Spray are sold under
the Ocean Spray corporate name. From the information provided in the scenario, Ocean Spray
uses a _____ strategy.
a. dual branding
b. singular branding
c. family branding
d. cobranding
Answer: c
Blooms: Apply
Explanation: Franchise extension or family branding is a strategy whereby a company
attaches the corporate name to a product to enter either a new market segment or a different
product class.
47. What does the multibranding strategy involve?

a. Companies marketing their brand jointly with that of their competitors
b. Companies assigning different brand names to each of their products
c. Companies attaching their corporate name to a product to enter a different product class
d. Companies assigning different brand names to the same products in different outlets
Answer: b
Blooms: Remember
AACSB: Analytic
6-17
Explanation: Multibranding strategy is one in which companies assign different brand names
to each product. By doing so, the firm makes a conscious decision to allow the product to
succeed or fail on its own merits.
48. Pearson & Toffer, Inc. makes SilkySoft soap for people who are concerned about soft
skin. They also make SafeChoice soap for those consumers who want deodorant protection.
What is the branding strategy used by Pearson & Toffer in this scenario?
a. Multibranding
b. Dual branding
c. Cobranding
d. Family branding
Answer: a
Blooms: Apply
Explanation: Multibranding strategy is one in which companies assign different brand names
to each product.
49. A beer manufacturer produces four different brands of beer, namely, RedStar, RedStar
Light, Grande, and Hollis. RedStar is a standard brew, while StarLight has a low alcoholic
content. Grande is a low calorie beer, while Hollis is non-alcoholic. Why does the
manufacturer use different brand names for each of their products?
a. To minimize the importance of brand equity
b. To enjoy the benefits associated with mass marketing
c. To inform consumers that all the offerings are homogeneous
d. To target specific market segments more efficiently
Answer: d
Blooms: Apply
Explanation: Companies may also choose to assign different brand names to each product in a
strategy that is known as multibranding. One of the major advantages of using multiple brand
names is that the product(s) can be targeted at a specific market segment.
6-18
50. Spending significant amounts of money to familiarize customers with new brands is a
disadvantage primarily associated with _____.
a. family branding
b. multibranding
c. dual branding
d. product line extensions
Answer: b
Blooms: Remember
AACSB: Analytic
Explanation: In a multibranding strategy, a company decides to assign a different brand name
to each of their products. The major disadvantage of multibranding is that because new names
are assigned, there is no consumer brand awareness and significant amounts of money must
be spent familiarizing customers with new brands.
51. One of the advantages of using _____ is that the firm can distance products from other
offerings it markets.
a. dual branding
b. multibranding
c. family branding
d. cobranding
Answer: b
Blooms: Remember
AACSB: Analytic
Explanation: In a multibranding strategy, a company decides to assign a different brand name
to each of their products. One of the major advantages of using multiple brand names is that
the firm can distance products from other offerings it markets.
52. Brand equity is:

a. the set of assets or liabilities linked to the brand that adds or subtracts value.
b. independent of the consumer's assessment of the product.
c. the extension of an existing brand that has a generic and popular name.
d. independent of the results of the marketplace perception and assessment of a brand.
Answer: a
Blooms: Remember
AACSB: Analytic
Explanation: Brand equity can be viewed as the set of assets (or liabilities) linked to the brand
that add (or subtract) value. The value of these assets is dependent upon the consequences or
results of the marketplace’s relationship with a brand.
6-19
53. Which of the following statements about brand equity is true?

a. Brand equity is what the customer gets in exchange for what the customer gives.
b. Organizational products cannot have brand equity.
c. Brand equity is not impacted by advertising and promotional efforts.
d. Brand equity may add or subtract value.
Answer: d
Blooms: Remember
AACSB: Analytic
that add (or subtract) value. Brand equity is determined by the consumer and is the
culmination of the consumer’s assessment of the product, the company that manufactures and
markets the product, and all other variables that impact on the product between manufacture
and consumer consumption.
54. _____ is defined as the culmination of the consumer's assessment of the product, the
company that manufactures and markets the product and all other variables that impact on the
product between manufacture and consumer consumption.
a. Product feature
b. Brand equity
c. Brand dilution
d. Product extension
Answer: b
Blooms: Remember
AACSB: Analytic
Explanation: Brand equity is the culmination of the consumer's assessment of the product, the
company that manufactures and markets the product and all other variables that impact on the
product between manufacture and consumer consumption.
55. Which of the following statements is true with regard to brand equity for organizational
products?
a. Unlike consumer products, organizational products do not possess brand equity.
b. The success or failure of brand names for organizational products is local in nature and
does not affect its global reputation.
c. Successful extension of an existing brand is a highly successful strategy for organizational
goods as firm loyalty does not differ from brand loyalty.
d. Attempts to establish or change brand image must take into account distributor channel
members employed to distribute the product.
Answer: d
Blooms: Understand
AACSB: Analytic
6-20

that add (or subtract) value. Loyalty to organizational products encompasses not only the firm
and its products but also the distribution channel members employed to distribute the product.
Therefore, attempts to establish or change brand image must also take into account distributor
image.
56. Products that are equivalent to national brands but are priced much lower are called
_____.
a. prestige brands
b. private-label brands
c. generic product brands
d. dual brands
Answer: b
Blooms: Remember
AACSB: Analytic
Explanation: Private label brands are being marketed as value brands, products that are
equivalent to national brands but are priced much lower. Private brands are rapidly growing in
popularity.
57. Identify a method of differentiating a relatively homogeneous product.

a. Market penetration
b. Mass marketing
c. Distinctive packaging
d. Family branding
Answer: c
Blooms: Remember
AACSB: Analytic
Explanation: Distinctive or unique packaging is one method of differentiating a relatively
homogeneous product.
58. Fresh-Cola, Inc. is a manufacturer of carbonated drinks that package their products in
bottles, cans, and 12-pack cartons. A standard 12-pack carton of soft drinks neither fits
conveniently in the standard-size refrigerator shelf, nor can the drinks be easily dispensed
from the carton. Fresh-Cola introduced a new design it calls the refrigerator pack. The
refrigerator pack is designed to fit easily on a standard refrigerator shelf and dispenses one
can at a time. With its new refrigerator pack, Fresh-Cola is:
a. implementing a private branding strategy.
b. using packaging as a part of its product differentiation strategy.
c. using a brand extension strategy for market development.
d. implementing a cost leadership strategy in the market for carbonated drinks.
6-21
Answer: b
Blooms: Apply
Explanation: Distinctive or unique packaging is one method of differentiating a relatively
homogeneous product. Consumer-friendly products are attempts to differentiate a product
through packaging changes and to satisfy consumer needs at the same time.
59. Which of the following is true of the different stages in the product life cycle?
a. Market sales are highest in the maturation stage.
b. Market sales begin to increase in the continued expansion stage.
c. The growth stage is the first stage of the product life cycle.
d. Profits are nonexistent in the decline stage.
Answer: a
Topic: Product Life Cycle
Blooms: Understand
AACSB: Analytic
Explanation: A firm’s product strategy must take into account the fact that products have a
life cycle. As the product matures, profits for the initiating firm do not keep pace with sales
because of competition.
60. Which of the following observations concerning the product life cycle is true?
a. The length of time a product will remain in each stage can be predicted with accuracy.
b. Marketers can forecast when one stage will end and another will begin.
c. Product life cycle should be taken as the greatest determinant of the firm’s sales and
marketing strategy.
d. Different products go through the product life cycle in varying pace and differing patterns.
Answer: d
Blooms: Understand
AACSB: Analytic
Explanation: A limitation of the product life cycle is that not all products go through the
product life cycle in the same way. The marketing manager must also recognize that the life
cycle is purely a tool for assisting in strategy development and not let the life cycle dictate
strategy development.
61. _____ are accepted and popular products that go through a repetitive cycle of popularity.
a. Fashions
b. Impulse goods
c. Specialty products
d. Fads
Answer: a
6-22

Blooms: Remember
AACSB: Analytic
Explanation: Fashions are accepted and popular product styles. Their life cycle involves a
distinctiveness stage in which trendsetters adopt the style, followed by an emulation stage in
which more customers purchase the style to be the trendsetters.
62. What are fads?

a. Accepted and popular products that go through a repetitive cycle of popularity
b. An organizational product that can be sold cheaply in bulk quantities
c. A product that experiences an intense but often very brief period of popularity
d. A specialty product that has retained its popularity for a long time
Answer: c
Blooms: Remember
AACSB: Analytic
Explanation: Fads are products that experience an intense but brief period of popularity. Their
life cycle resembles the basic product life cycle but in a very compressed form.
63. The diffusion of innovation is:

a. used to describe an audit task.
b. described using five adopter categories.
c. applied to products at the introductory stage of the product life-cycle.
d. used to describe the ability of an organization to create entirely new products.
Answer: b
Blooms: Remember
AACSB: Analytic
Explanation: The spread of a product through the population is known as the diffusion of
innovation. Five adopter categories, which include innovators, early adopters, early majority,
late majority and laggards, describe the spread of the product through its life.
64. What is diffusion of innovation?

a. It is the creation of an entirely new product for an unexplored market.
b. It refers to the number of similar products that are in the market.
c. It is the spread of a product through the population.
d. It is the degree of innovation that an organization possesses.
Answer: c
Blooms: Remember
AACSB: Analytic
6-23
innovation. Five adopter categories, which include innovators, early adopters, early majority,
late majority and laggards, describe the spread of the product through its life.
65. According to the adopter categories of diffusion of innovation, consumers who are first to
purchase a product are known as _____.
a. innovators
b. early adopters
c. laggards
d. early majority
Answer: a
Blooms: Remember
AACSB: Analytic
innovation. Innovators are those who are the first to buy a new product.
66. According to the process of product adoption and diffusion, which of the following
adoptive categories first begins to buy a product if the experience of innovators has been
favorable?
a. Laggards
b. Early majority
c. Late majority
d. Early adopters
Answer: d
Blooms: Remember
AACSB: Analytic
Explanation: If the experience of innovators is favorable, early adopters begin to buy.
Influenced by what early adopters have, the rest of the market begins to get interested in the
product.
67. According to the adopter categories of product diffusion, the biggest category of buyers is
divided into the two groups called the _____.
a. innovators and laggards
b. laggards and late majority
c. early majority and late majority
d. early majority and innovators
Answer: c
Blooms: Remember
AACSB: Analytic
6-24
innovation. According to the adopter categories of product diffusion, the biggest category of
buyers is divided into groups called the early majority and late majority.
68. Which of the following adoptive categories involved in diffusion of innovation are most
reluctant to make changes and are comfortable with traditional products?
a. Early majority
b. Laggards
c. Early adopters
d. Innovators
Answer: b
Blooms: Remember
AACSB: Analytic
Explanation: Laggards are reluctant to make changes and are comfortable with traditional
products. They also have a fear of debt, but may eventually purchase a well-established brand.
69. According to the adopter categories of diffusion of innovation, laggards:

a. are fearful of debt, but may eventually purchase a well-established brand.
b. are the first to purchase a product through early-bird promotional offers.
c. are the first to buy a new product as a result of their own interest in the latest goods.
d. are most likely to begin buying new goods if the experience of innovators is favorable.
Answer: a
Blooms: Understand
AACSB: Analytic
Explanation: Laggards are reluctant to make changes and are comfortable with traditional
products. They also have a fear of debt, but may eventually purchase a well-established brand.
70. A marketing management technique whereby the company's current product offerings are
reviewed to ascertain whether each product should be continued as is, improved, modified or
deleted is known as _____.
a. product generation
b. product audit
c. product definition
d. product creation
Answer: b
Topic: The Product Audit
Blooms: Remember
AACSB: Analytic
6-25
Explanation: The product audit is a marketing management technique whereby the company's
current product offerings are reviewed to ascertain whether each product should be continued
as is, improved, modified or deleted. The audit is a task that should be carried out at regular
intervals as a matter of policy.
71. Why are a growing number of products being introduced each year and competing for
limited shelf space?
a. New knowledge is being applied faster in the area of product development.
b. There is an increase in time between product introductions.
c. Companies are consistently removing old products from the market.
d. The time-to-market has substantially increased in recent years.
Answer: a
Blooms: Understand
AACSB: Analytic
Explanation: A growing number of products are being introduced each year that are
competing for limited shelf space. This growth of new products is due to new knowledge
being applied faster, and the decrease in time between product introductions.
72. Identify the primary reason for conducting a product audit.

a. To develop a marketing plan for new products
b. To detect sick products and delete them
c. To earn the estimated profits without introducing new products
d. To implement cost cutting strategies without altering the product mix
Answer: b
Blooms: Remember
AACSB: Analytic
Explanation: One of the main purposes of the product audit is to detect sick products and then
bury them. Rather than let the retailer or distributor decide which products should remain,
organizations themselves should take the lead in developing criteria for deciding which
products should stay and which should be deleted.
73. When contemplating a product deletion, why should a firm study customer migration
patterns?
a. To determine the profit contribution of the product to the firm
b. To determine whether the goods can be produced within the reduced time-to-market
estimates to ensure that there is some competitive offering in the market at all times
c. To determine whether products have reached a level of maturity and saturation in the
market
d. To determine whether customers of the product would switch to other substitute products
marketed by the same firm
Answer: d
6-26

Blooms: Understand
AACSB: Analytic
Explanation: Organizations should take the lead in developing criteria for deciding which
products should stay and which should be deleted. Customer migration patterns should be
studied to determine whether customers of the product would switch to other substitute
products marketed by the same firm.
74. Which of the following statements about product deletion is true?

a. Product deletions are necessary because a decreasing number of new products are being
introduced each year.
b. A deletion plan involves keeping consumers supplied with replacement parts and repair
service.
c. The deletion plan is not required to provide for clearing out of stock in question.
d. The deletion plan should let the retailer or distributor delete a product.
Answer: b
Blooms: Understand
AACSB: Analytic
Explanation: One of the main purposes of the product audit is to detect sick products and then
bury them. A deletion plan involves keeping consumers supplied with replacement parts and
repair service. The deletion plan should provide for clearing out of stock in question.
75. In relation to product improvement, _____ refer mainly to product features, design,
package, and so forth.
a. deletions
b. attributes
c. extensions
d. audits
Answer: b
Blooms: Remember
AACSB: Analytic
Explanation: Altering the product means changing one or more of its attributes or marketing
dimensions. Attributes refer mainly to product features, design, package and so forth.
76. Which of the following is an attribute that may be changed to improve a product?
a. Product price
b. Promotion strategy
c. Distribution channels
d. Product features
Answer: d
6-27

Blooms: Remember
AACSB: Analytic
77. Which of the following shows how a product was improved by modifying a product
attribute?
a. A soft drinks manufacturer deleted one of its drinks due to low sales.
b. The large casino in Reno began advertising on the Internet.
c. A dairy products manufacturer introduced mega-packs of sliced cheese which are sold at
lower prices.
d. A company that sells packaged seafood and meat added a pamphlet of recipes to each
package of its seafood.
Answer: d
Blooms: Apply
dimensions. Attributes refer mainly to product features, design, package, and so forth.
78. A company changes the packaging of one of its existing products to make it more
attractive to consumers. The company has undertaken product improvement by changing the
_____.
a. marketing dimensions
b. product attributes
c. channels of distribution
d. target markets
Answer: b
Blooms: Apply
6-28
79. Price, promotion strategy and channels of distribution are examples of _____.
a. marketing dimensions
b. marketing trends
c. product features
d. product attributes
Answer: a
Blooms: Remember
AACSB: Analytic
dimensions. Marketing dimensions refer to such things as price, promotion strategy and
channels of distribution.
80. Which of the following shows how a product was improved by modifying the marketing
dimension of channels of distribution?
a. The Caribbean cruise was improved by the addition of two more stops in Mexico.
b. The 800-page history of chiropody was improved by the development of an extensive
index.
c. Liz Claiborne expanded the number of retail outlets that carries its sportswear.
d. The Dillard House restaurant added three new vegetarian dishes to its menu.
Answer: c
Blooms: Apply
channels of distribution.
81. Which of the following pertains to the marketing dimension of a product?

a. Product features
b. Promotion strategy
c. Product design
d. Product packaging
Answer: b
Blooms: Understand
AACSB: Analytic
channels of distribution. Attributes refer mainly to product features, design, package and so
forth.
6-29
82. The Bedford Hotel is an industry leader. After Templeton Hotels measured its services
against the Bedford, it instituted a customer service campaign called “proactive hospitality.”
Templeton managers examine monthly reports for problem areas and the Bedford model is
used to determine ways to remove the problems. Which of the following methods is used by
Templeton to identify improvement areas?
a. Test marketing
b. Benchmarking
c. Niche marketing
d. Market segmenting
Answer: b
Blooms: Apply
Explanation: Benchmarking is the continuous process of measuring products, services and
practices against those of the toughest competitors or companies renowned as leaders. It is an
effective tool organizations use to improve on existing products, activities, functions, or
processes.
83. Which of the following statements about benchmarking is true?

a. It represents a strategy used to enter a new market.
b. It involves the creation of innovative products.
c. It increases delivery lead times.
d. It improves customer order-processing activities.
Answer: d
Topic: Product Improvement
Blooms: Remember
AACSB: Analytic
Explanation: Benchmarking can assist companies in many product improvement efforts,
including (1) boosting product quality, (2) developing more user-friendly products, (3)
improving customer order-processing activities and (4) shortening delivery lead times.
84. Which of the following observations is true of the brand-manager system?

a. Brand managers have difficulties in their line of work because they do not have authority
commensurate with their responsibilities.
b. A brand-manager system is clearly superior to a market-manager system.
c. A brand manager is responsible for overseeing an entire product line with all the functional
areas of marketing.
d. A brand-manager system is popular in organizations with a line or lines of similar products
or one dominant product line.
Answer: a
Topic: Organizing for Product Management
Blooms: Understand
AACSB: Analytic
6-30

Explanation: Under a brand-manager system, a manager focuses on a single product or a very
small group of new and existing products. Brand managers often have difficulty because they
do not have authority commensurate with their responsibilities.
85. In a _____, one person is responsible for overseeing an entire product line with all of the
functional areas of marketing such as research, advertising, sales promotion, sales, and
product planning.
a. brand-manager system
b. marketing-manager system
c. functional departments system
d. product-management system
Answer: b
Blooms: Remember
AACSB: Analytic
Explanation: Under a marketing-manager system, one person is responsible for overseeing an
entire product line with all of the functional areas of marketing such as research, advertising,
sales promotion, sales, and product planning. This type of system is popular in organizations
with a line or lines of similar products or one dominant product line.
86. In a _____, a manager is responsible for everything from marketing research and package
design to advertising for a single product or a very small group of new and existing products.
a. marketing-manager system
b. category management system
c. traditional marketing system
d. brand-manager system
Answer: d
Blooms: Remember
AACSB: Analytic
Explanation: Under a brand-manager system, a manager focuses on a single product or a very
small group of new and existing products. Typically, this person is responsible for everything
from marketing research and package design to advertising.
6-31
87. Which of the following statements is the true of a venture team?

a. It is a cross-functional team responsible for all the tasks involved in the development of a
new product.
b. It is a team that is responsible for everything from marketing research and package design
to advertising for the complete product mix of a firm.
c. It is a cross-functional team that manages and monitors the existing products of the firm
exclusively.
d. It is a team that conducts product audits to identify sick products and delete them as its
primary duty.
Answer: a
Blooms: Remember
AACSB: Analytic
Explanation: A venture team is a cross-functional team responsible for all of the tasks
involved in the development of a new product. When the new product is launched, the team
usually turns over responsibility for managing the product to a brand manager or product
manager or it may manage the new product as a separate business.
88. Lauren is a brand manager at a company that manufactures toothpaste. She wants to
increase the sales of an existing brand of toothpaste. She calls in a member from her
management staff, a product designer, personnel from human resource, and a member from
the finance team. All these people work together as a team in order to come up with ways to
improve the company’s toothpaste brand. Which of the following has Lauren created?
a. A departmental team
b. A marketing-management system
c. A cross-functional team
d. A category management system
Answer: c
Blooms: Apply
Explanation: Organizations need the contributions of all functions and therefore require their
cooperation. Cross-functional teams operate independently of the organization’s functional
departments but include members from each function. A team might include a member from
engineering, marketing, finance, service, and designers. Some organizations even include
important outsiders.
6-32

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Chapter 06 - Product and Brand Strategy

Marketing Management 11th Edition Peter Test Bank

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Multiple Choice Questions

1. Which of the following observations about a product is correct?

Level of Difficulty: Easy

Level of Difficulty: Easy

6. Which of the following observations is true?

7. What is marketing myopia?

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

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

11. Which of the following statements about agricultural goods is true?

14. Which of the following products would be classified as an organizational good?

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

17. Which of the following is the best example of a specialty good?

19. Which of the following is the best example of a shopping good?

21. _____ goods are purchased frequently with minimum effort.

22. _____ goods fall under the category of convenience goods.

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

26. Which of the following statements about a vertical market is true?

27. Which of the following best describes a horizontal market?

32. Value refers to the:

Level of Difficulty: Easy

33. Which of the following statements is true?

36. The width of a product mix refers to the:

37. What does the depth of a product mix refer to?

39. What is the legal term for a brand?

40. Which of the following observations about branding is true?

47. What does the multibranding strategy involve?

52. Brand equity is:

53. Which of the following statements about brand equity is true?

Level of Difficulty: Medium

57. Identify a method of differentiating a relatively homogeneous product.

Topic: Product Life Cycle

62. What are fads?

63. The diffusion of innovation is:

64. What is diffusion of innovation?

69. According to the adopter categories of diffusion of innovation, laggards:

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

Topic: The Product Audit

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

Topic: The Product Audit

81. Which of the following pertains to the marketing dimension of a product?

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

84. Which of the following observations is true of the brand-manager system?

Level of Difficulty: Medium

87. Which of the following statements is the true of a venture team?

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