Market Based Management 6th Edition Roger Best Test Bank

Market-Based Management 6th Edition
Roger Best Test Bank

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Market-Based Management, 6e (Best)
Chapter 7 Product Positioning, Branding, and Product Line Strategies
1) Product positioning starts with company engineers or product managers, not target customers.
Answer: FALSE
Page Ref: 231
Difficulty: Easy
2) The extent that a market share grows is directly dependent on the strength of a business's product
positioning and marketing effort.
Answer: TRUE
Page Ref: 233
Difficulty: Easy
3) A weak product position with a strong marketing effort will fail to deliver the desired level of market
share.
Answer: TRUE
Page Ref: 233
Difficulty: Easy
4) In a price-sensitive market, product positioning generally requires a higher price because this is the
only source of differentiation that target customers value.
Answer: FALSE
Page Ref: 235
AACSB: Analytic Skills
Difficulty: Medium
5) Quality aesthetics as a source of differentiation are of value only when all other aspects of quality are
met with respect to customer quality expectations.
Answer: TRUE
Page Ref: 236
Difficulty: Medium
6) If a business fails to deliver acceptable or expected levels of serviceability and appearance, an

advantage in other dimensions of product performance will not matter.
Answer: FALSE
Page Ref: 236
Difficulty: Medium
7) Service can be an important source of differentiation when it comes to positioning strategies.

Answer: TRUE
Page Ref: 239
Difficulty: Easy
1
Copyright © 2013 Pearson Education, Inc.
8) Businesses with a low-cost advantage in markets in which price is an important determinant of
customer value can use low prices as a basis for product positioning.
Answer: TRUE
Page Ref: 241
Difficulty: Medium
9) The total cost of purchase excludes the customer's ownership costs.

Answer: FALSE
Page Ref: 242
Difficulty: Easy
10) A brand-encoding system helps in understanding how to position a product with a brand name for a
specific market and desired image.
Answer: TRUE
Page Ref: 243
Difficulty: Easy
11) Invented names are company or brand names that create a direct connection to something real and
that can be associated with a direct experience.
Answer: FALSE
Page Ref: 249
Difficulty: Easy
12) Companies with high brand awareness can more easily introduce new products and enter new
markets.
Answer: TRUE
Page Ref: 252
Difficulty: Easy
13) An umbrella brand refers to a new product that is a vertical brand extension of the core product.
Answer: FALSE
Page Ref: 257
Difficulty: Easy
14) The intent of umbrella branding is to enhance the effectiveness of marketing programs and to
increase demand for product line extensions by transferring brand awareness and perceptions of quality
from the umbrella brand.
Answer: TRUE
Page Ref: 257
Difficulty: Easy
15) The purpose of line extensions under an umbrella brand is to leverage the awareness and image of
the umbrella brand.
Answer: TRUE
Page Ref: 258
Difficulty: Medium
2
16) Which of the following is a product position factor influencing a business's market share?
A) sales force
B) service quality
C) retailing and merchandising
D) physical distribution
E) media advertising
Answer: B
Page Ref: 233
Difficulty: Easy
17) Which of the following is a marketing effort factor influencing a business's market share?
A) price
B) product differentiation
C) product breadth
D) brand image
E) sales promotions
Answer: E
Page Ref: 233
Difficulty: Easy
18) Which of the following is a differentiation and product positioning strategy?

A) low cost of purchase
B) brand encoding
C) product elimination
D) bundling and unbundling
E) product line extensions
Answer: A
Page Ref: 235
Difficulty: Easy
19) Which of the following is a branding and brand-management strategy?

A) umbrella brand
B) brand differentiation
C) brand encoding
D) bundling and unbundling
E) flanker brand
Answer: C
Page Ref: 235
Difficulty: Easy
20) Which of the following is a brand and product line strategy?

A) product differentiation
B) brand differentiation
C) bundling and unbundling
D) brand identity
E) low cost of purchase
Answer: C
Page Ref: 235
Difficulty: Easy
3
21) Within the dimensions of product performance, a poor performance in which of the following would
be a "quality killer"?
A) serviceability
B) features
C) appearance
D) conformance
E) reputation
Answer: D
Page Ref: 237
Difficulty: Easy
22) Within the dimensions of product performance, which of the following is a "quality driver"?
A) conformance
B) durability
C) serviceability
D) reputation
E) reliability
Answer: B
Page Ref: 237
Difficulty: Easy
23) Within the dimensions of product performance, which of the following is a product performance
enhancement factor?
A) reliability
B) conformance
C) durability
D) serviceability
E) improvements
Answer: D
Page Ref: 238
Difficulty: Easy
24) When automakers include air bags, cruise control, satellite radio, and GPS systems in their consumer
products, these features are considered to be quality ________.
A) killers
B) drivers
C) enhancers
D) aesthetics
E) determinants
Answer: C
Page Ref: 237-238
Difficulty: Medium
4
25) Which of the following service quality dimensions refers to employee competency with respect to
knowledge and courtesy?
A) service reliability
B) service assurance
C) extended services
D) customer empathy
E) appearance
Answer: B
Page Ref: 239
Difficulty: Easy
26) Within the dimensions of service quality, which of the following is a "quality enhancer"?
B) performance
C) customer empathy
D) appearance
E) reputation
Answer: C
Page Ref: 239
Difficulty: Easy
27) Which of the following service quality dimensions refers to a service obsession to get it right when
things go wrong?
C) performance
D) customer empathy
E) responsiveness
Answer: E
Page Ref: 239
Difficulty: Easy
28) Red Hot Mexican Grill, a chain of Mexican-style casual dining restaurants in America, has
traditional Mexican décor throughout the restaurant and the waiters are dressed in Mexican hats. This is
best an example of ________.
C) performance
D) appearance
E) responsiveness
Answer: D
Page Ref: 241
Difficulty: Medium
5
29) Which of the following refers to expenses other than the purchase price that are associated with the
acquisition and use of a product?
A) fixed costs
B) ownership costs
C) variable costs
D) differentiation costs
E) opportunity costs
Answer: B
Page Ref: 242
Difficulty: Easy
30) Which of the following statements is true about branding?

A) The first step in developing a brand identity is to focus on product features rather than customer
benefits.
B) An internally focused business is best prepared to build a brand identity that would be meaningful to
target customers.
C) A brand name provides customers with a way to quickly comprehend the brand's primary benefits.
D) A brand-encoding system refers to the measures taken to protect a brand name.
E) Functional names refer to brand names that are associated with an experience.
Answer: C
Page Ref: 242
Difficulty: Medium
31) Without defining the desired product positioning and value proposition for a specific target market,
the ________ process would quickly deteriorate into an internal process that was built around product
features rather than customer benefits.
A) brand naming
B) brand identification
C) brand encoding
D) brand equity
E) brand extension
Answer: B
Page Ref: 243
Difficulty: Medium
32) Microsoft Office 2010 allows buyers and users to quickly identify the Microsoft product and its
newness to older versions of the same brand. This is an example of using a ________ branding strategy.
A) company name
B) company and brand name
C) brand and subbrand name
D) company, brand, and product name
E) company and brand name, and number
Answer: E
Page Ref: 243
Difficulty: Medium
6
33) Ford sells the Ford Fiesta automobile. This is an example of using a ________ branding strategy.
A) company name
D) company and product name
E) company, brand, and product name
Answer: B
Page Ref: 245
Difficulty: Medium
34) Church & Dwight, Co. is a U.S. manufacturer of household products. The firm owns a line of
toothpastes under the brand name Arm & Hammer Peroxicare. The firm also sells other products under
the brand name Arm & Hammer. Arm & Hammer Peroxicare is an example of which of the following
encoding strategies?
A) company name
D) company and product name
E) brand name only
Answer: C
Page Ref: 246
Difficulty: Medium
35) Dairy Products Inc. is a manufacturing firm that produces and sells a line of butter packs under the
brand name Melt Butter. The firm created Melt Tasty Butter and Melt Low-Fat Butter so that health-
conscious customers can quickly differentiate its benefits. In this example, Dairy Products Inc. is using
which of the following brand encoding strategies?
A) company name only
D) brand and product name
E) brand name only
Answer: D
Page Ref: 247
Difficulty: Medium
7
36) Unilever has over 10 personal care brands, each with a unique focus and product positioning
strategy. Buyers would not know that Unilever is the manufacturer of a specific brand unless they
looked closely at the small print on the package. This is an example of using a ________ branding
strategy.
A) company name only
B) brand name only
C) company and brand name
D) brand and subbrand name
E) company, brand, and product name
Answer: B
Page Ref: 247
Difficulty: Medium
37) In which of the following ways of creating a new company, brand, or subbrand name, the names are
derived from the basic benefit provided by the product?
A) evocative names
B) experiential names
C) functional names
D) invented names
E) realistic names
Answer: C
Page Ref: 248
Difficulty: Easy
38) In the context of brand name development, ________ names are either built from root words and
morphemes or are poetic constructions based on the rhythm or experience of saying them.
A) evocative
B) experiential
C) functional
D) invented
E) realistic
Answer: D
Page Ref: 249
Difficulty: Easy
39) S.K. Group of Manufacturers produces and distributes mattresses and pillows under the brand name
SoftComfort. In this example, S.K. Group of Manufacturers uses which of the following types of brand
names?
A) a founder name
B) an experiential name
C) a functional name
D) an acronym
E) a morpheme
Answer: B
Page Ref: 249
Difficulty: Easy
8
40) Functional names differ from evocative names in that functional names ________.
A) are derived from the basic benefit provided by the product
B) do not have any association with a core customer benefit
C) are built from root words and morphemes
D) are poetic constructions based on the rhythm of saying them
E) are associated with positive attributes or feelings
Answer: A
Page Ref: 249
Difficulty: Easy
41) In the context of brand name development, which of the following is true about an invented name?
A) It is built from root words and morphemes.
B) It aims to evoke a positive attribute or a feeling.
C) It is associated with an experience.
D) It is based on the names of company founders.
E) It strives to build an association between the brand name and the core function of the brand.
Answer: A
Page Ref: 249
Difficulty: Medium
42) Which of the following is true about licensing?

A) It is a bad option for products that are difficult to produce.
B) It refers to the transfer of trademark rights held by one party to another party.
C) It allows owners of intellectual property to obtain payment for their creations in a lump sum.
D) It involves the legal assignment of the rights to a product from one party to another.
E) It is a method of protecting the brand name and logo of a company.
Answer: C
Page Ref: 250
Difficulty: Medium
43) The brand equity of LifeSecure Inc., an American health insurance firm, was diminished when its
top executives were subject to money laundering allegations. Which type of brand liability does this best
represent?
A) customer dissatisfaction
B) poor product conformance
C) product or service failures
D) poor record on social issues
E) questionable practices
Answer: E
Page Ref: 253
Difficulty: Easy
9
44) The brand equity of many oil companies is lower when associated with oil spills or controversial
drilling practices. Which type of brand liability does this best represent?
A) customer dissatisfaction
B) poor record on social issues
C) product or service failures
D) inadequate product line development
E) poor product conformance
Answer: B
Page Ref: 253
Difficulty: Easy
45) Owner's equity is equal to ________.

A) brand assets minus brand liabilities
B) brand assets divided by brand liabilities
C) company assets minus company liabilities
D) company assets divided by company liabilities
E) company liabilities minus brand liabilities
Answer: C
Page Ref: 254
Difficulty: Easy
46) Brand equity is equal to ________.

A) total brand assets minus total brand liabilities
B) total brand assets divided by total brand liabilities
C) total company assets minus total company liabilities
D) total company assets divided by total company liabilities
E) total company liabilities minus total brand liabilities
Answer: A
Page Ref: 254
Difficulty: Easy
47) Which of the following involves the transfer of quality perceptions derived from a core product or
brand to product line extensions that use the same brand name?
A) a pure product bundling strategy
B) a mixed bundling strategy
C) a product unbundling strategy
D) an umbrella branding strategy
E) a vertical integration strategy
Answer: D
Page Ref: 257
Difficulty: Easy
10
48) OrganicMeals Inc. is an American firm that manufactures frozen, vegetarian burgers made from
organic ingredients under the brand name VegDelite. The firm markets a core product, the Chipotle Veg
Burger, under the VegDelite brand. After success of its core product, the firm adds other burgers under
the VegDelite brand, such as the Crunchy Garden burger, the Vegan Special burger, and the Spicy Trip
burger. In this example, OrganicMeals Inc. uses which of the following strategies?
A) a vertical brand-line extension strategy
B) a horizontal brand-line extension strategy
C) a new product-market brand extension strategy
D) a cobranding strategy
E) a product bundling strategy
Answer: A
Page Ref: 258
AACSB: Reflective Thinking
Difficulty: Hard
49) M.L. Manufacturers Inc. is an American clothes manufacturing firm that sells women's fashion
apparel under the brand name DressChic. After extensive market research, the firm introduces a line of
children's clothes under the brand name Mischief and a line of affordable work wear for women under
the brand name DressSmart. In this example, M.L. Manufacturers Inc. uses which of the following
strategies?
D) a cobranding strategy
E) a product bundling strategy
Answer: B
Page Ref: 259
Difficulty: Hard
50) Frosty Inc. is an American firm that manufactures and markets a line of ice creams under the brand
name Frosty Delight. Together with Magic Bakes, a popular brand of baking mixes and canned
frostings, the firm introduces a line of Frosty Magic Bakes, a line of ice cream cake mixes. The new
product line, Frosty Magic Bakes, uses the logos of both Frosty Delight and Magic Bakes. This is an
example of ________.
A) franchising
B) cobranding
C) pure product bundling
D) mixed product bundling
E) licensing
Answer: B
Page Ref: 259
Difficulty: Medium
11
51) Mathis Inc. is a home appliance manufacturing firm based in Vermont that sells its products under
the brand name GoodHome. The firm initially built a reputation in the household appliances market for
its high-quality products. After an extensive market research, the firm used its brand reputation to
expand into the home furnishing industry. In this example, Mathis Inc. uses which of the following
product line extension strategies?
D) a cobranding extension strategy
E) a product bundling extension strategy
Answer: C
Page Ref: 259
Difficulty: Hard
52) George recently purchased a computer from HardDigits Inc., a firm that sells assembled desktop
computers and other electronic products. Included in his purchase were an inkjet printer, a web camera,
and an office software program that included a word processor, a spreadsheet, and a photo editor. The
price he paid for the computer, software, and accessories was lower than the total price that he would
have paid if he had purchased the products separately. In this example, HardDigits Inc. uses which of the
following product line extension strategies?
A) product diversification
B) umbrella branding
C) product cobranding
D) product bundling
E) disintermediation
Answer: D
Page Ref: 260
Difficulty: Medium
53) A(n) ________ strategy involves the sale of two or more products at an overall price that is lower
than the total price that a customer would pay to purchase the products separately.
A) pure product bundling
B) impure product bundling
C) cobranding
D) horizontal brand extension
E) vertical brand extension
Answer: A
Page Ref: 260
Difficulty: Easy
12
54) Which of the following is true about pure product bundling strategy?
A) It is shown to be more profitable than mixed bundling strategies.
B) It takes advantage of the potential synergy of two brands that share a common market space.
C) It involves entering new product-markets.
D) It creates a base from which to introduce line extensions that enhance market penetration at a lower
cost.
E) It involves the sale of two or more products at an overall price that is cheaper than purchasing the
products separately.
Answer: E
Page Ref: 260
Difficulty: Medium
55) A(n) ________ strategy offers the customer the opportunity to purchase each of the items separately
at a sale price or bundled with an additional level of savings.
A) pure product bundling
B) impure product bundling
C) mixed bundling
D) horizontal brand extension
E) vertical brand extension
Answer: C
Page Ref: 261
Difficulty: Easy
56) Name the hierarchical categories of product performance and for each, name and describe two
dimensions of product performance that can serve as bases for product differentiation.
Answer:
The four hierarchical categories of product performance and two dimensions of product differentiation
for each are:
(1) Product Performance Requirements
- Reliability: The length of time before failure or malfunction of the product.
- Conformance: Incidence of defects that should not have occurred.
(2) Product Performance Differentiators
- Performance: Operational characteristics that distinguish product performance.
- Durability: Product life and ability to endure demanding use conditions.
(3) Product Performance Enhancements
- Features: Number and type of options that can be added.
- Serviceability: Ease, speed, and cost of maintenance and repair.
(4) Product Performance Emotional Enhancements
- Appearance: The fit, finish, and overall appearance of a product.
- Reputation: The image created by the brand name or company.
Page Ref: 236-238
Difficulty: Medium
13
57) Compare and contrast the different ways in which new brand names are created and provide an
example of each.
Answer:
(1) Functional names — functional names are purely descriptive of what a product or company is or
does. E-trade, International Business Machines (IBM), and Digital Equipment are examples of
functional or descriptive names.
(2) Invented names — there are two kinds of invented names: those that are built from root words and
morphemes and those that are poetic constructions based on the rhythm or experience of saying them.
Agilent and Alliant are invented company names from roots that mean "agile" and "ally." Poetically
created brand names include Oreo, Kleenex, Snapple, and Google.
(3) Experiential names — company or brand names that create a direct connection to something real and
that can be associated with a direct experience. Examples include Explorer or Navigator for web portals,
and Callaway Big Bertha golf clubs.
(4) Evocative names — brand names that evoke a positive attribute or a feeling. Examples include
Yahoo, Apple computers, and Virgin Airlines.
Page Ref: 248-249
Difficulty: Medium
MINI-CASE
Organic Harvest Inc. is an American manufacturing firm based in California. The firm manufactures and
sells a line of organic fruit juices under the brand name OrganicDrinks. The firm also markets a line of
medicinal health drinks, under the brand name HerbalDrinks.
58) Mini-Case Question. Which of the four types of brand names does OrganicDrinks best represent?
A) a functional name
B) an invented name
C) a morpheme name
D) an evocative name
E) a founder name
Answer: A
Page Ref: 249
Difficulty: Medium
59) Mini-Case Question. Organic Harvest Inc. offers five flavors under the OrganicDrinks brand. Based
on the success of these flavors, the firm introduces three new flavors of OrganicDrinks: Pink
Pomegranate, Cool Coconut Water, and Spicy Apple Cider. In this example, Organic Harvest Inc. uses
which of the following product-line extension strategies?
A) vertical brand-line extension
B) horizontal brand-line extension
C) new product-market brand extension
D) cobranding
E) product bundling
Answer: A
Page Ref: 258
Difficulty: Medium
14
60) Mini-Case Question. Organic Harvest Inc. introduces a new line of personal care products, including
soaps and shampoos that are made from natural ingredients. The firm markets these products under
brand name NaturalCare. In this example, Organic Harvest Inc. uses which of the following product-line
extension strategies?
A) vertical brand-line extension
B) horizontal brand-line extension
C) new product-market brand extension
D) cobranding
E) product bundling
Answer: C
Page Ref: 259
Difficulty: Medium
15

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Roger Best Test Bank

6) If a business fails to deliver acceptable or expected levels of serviceability and appearance, an

7) Service can be an important source of differentiation when it comes to positioning strategies.

9) The total cost of purchase excludes the customer's ownership costs.

18) Which of the following is a differentiation and product positioning strategy?

19) Which of the following is a branding and brand-management strategy?

20) Which of the following is a brand and product line strategy?

30) Which of the following statements is true about branding?

42) Which of the following is true about licensing?

45) Owner's equity is equal to ________.

46) Brand equity is equal to ________.

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