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Chap011.RTF - Cal State LA

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					                                      CHAPTER 11
                     MANAGING PRODUCTS AND BRANDS

                           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. Gatorade is the official sports drink of Major League Baseball.
    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: 293-294
    Rationale: The chapter opening example provides a description of Gatorade’s success.

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: 293-294
    Rationale: The University of Florida concocted the beverage in 1965 as a rehydration
    beverage for the school’s football team. Chewing gum as a brand extension was introduced
    much later. Gatorade is sold in 47 countries including Latin America. Gatorade was first
    distributed through convenience stores and supermarkets. Companies 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 marketplace—
    introduction, 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: 294 Other Locations: SG
    Rationale: Key term definition—product life cycle




                                            622
11-4 INTRODUCTION STAGE                                                                 DEFINITION

    The stage of the product life cycle when a product is first commercialized to its intended target
    market is called the _____ stage.
    a. growth
    b. commercialization
    c. launch
    d. introduction
    e. awareness-trial

    Answer: d Page: 294
    Rationale: Commercialization is not a stage in the PLC.

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: 294-295 Other Locations: W
    Rationale: The lack of profit is often a result of the large costs of product development.

11-6 INTRODUCTION STAGE                                                              CONCEPTUAL

    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: 294-295 Other Locations: W
    Rationale: The marketing objective for a company at the introduction stage is to promote
    consumer awareness and gain trial--the initial purchase of a product by a consumer.




                                               623
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: 294-295
    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.

11-8 INTRODUCTION STAGE                                                           CONCEPTUAL

    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: 294-295
    Rationale: The marketing objective for a product at the introduction stage is to promote
    consumer awareness and gain trial--the initial purchase of a product by consumer.




                                             624
11-9 INTRODUCTION STAGE                                                            APPLICATION

    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: 294-295
    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: 294-295
    Rationale: Primary demand is the demand or desire for a product class rather than for a
    specific brand.

11-11 PRIMARY DEMAND                                                               APPLICATION

    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: 294-295 Other Locations: SG
    Rationale: Promotion needs to create awareness and desire for the product category first.




                                              625
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: 294-295
    Rationale: Text term definition—primary demand

11-13 PRIMARY DEMAND                                                              APPLICATION

    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: 294-295
    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: 294-295
    Rationale: In the introduction stage there are no competitors with the same product, and
    heavy promotional expenditures are often made to build primary demand, or a desire for the
    product class (such as food processors or potatoes) rather than for a specific brand. This is
    done through informational or educational promotions.




                                              626
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: 295
     Rationale: Text term definition—selective 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: 295
     Rationale: Text term definition—selective 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: 295
     Rationale: Northland was interested in creating awareness for its brand--not its product
     category.




                                              627
11-18 INTRODUCTION STAGE                                                             CONCEPTUAL

     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.

     Answer: b Page: 295
     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: 294; 298 Other Locations: SG
     Rationale: The decline stage of the product life cycle is characterized by a decrease in sales
     and profits. 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. These are the
     characteristics of a product in the growth stage of the product life cycle.

11-20 SKIMMING PRICING                                                                 DEFINITION

     During the introduction stage of the product life cycle, _____ is 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: 295
     Rationale: Text term definition—skimming


                                               628
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 a pair of alkaline
     batteries can be purchased for $2, you should suspect that INGenius ATG was using a _____
     strategy.
     a. penetration pricing
     b. cost-plus pricing
     c. ROI pricing.
     d. market-oriented pricing
     e. skimming pricing

     Answer: e Page: 295 Other Locations: W
     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: 295
     Rationale: Alternative C refers to penetration pricing, in which a company prices low to
     discourage competitive entry and build unit volume--the risk being that prices may be too low
     to recover development costs if optimum volume is not achieved.

11-23 SKIMMING PRICING                                                              APPLICATION

     When Texas Instruments (TI) introduced its pocket calculator it was a tremendous product
     innovation, and IT 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: 295 Other Locations: W
     Rationale: 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 capitalize on the price insensitivity of
     early buyers.


                                               629
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: 296
     Rationale: Text term definition—penetration pricing

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 send 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 includes tech support. It
     was hoped that this low price would build the volume of Opera users quickly. Opera used a
     _____ strategy.
     a. penetration pricing
     b. cost-plus pricing
     c. ROI pricing
     d. market-oriented pricing
     e. skimming pricing

     Answer: a Page: 296
     Rationale: 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: 296
     Rationale: Penetration pricing helps build unit volume, but a company must closely monitor
     costs.




                                               630
11-27 INTRODUCTION STAGE                                                             CONCEPTUAL

     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. Because of large initial investment costs, industry profits often must go from negative to
         positive.
     e. All of the above statements about the introduction stage of the product life cycle are true.

     Answer: e Page: 295-296 Other Locations: SG
     Rationale: All of the statements about the introduction stage of the product life cycle are true
     and are discussed in the section, “Introduction Stage.”

11-28 INTRODUCTION STAGE                                                             APPLICATION

     Opera.com introduced a new Web browser that can be easily customized to do what you want
     it to do—such 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

     Answer: e Page: 294-296
     Rationale: At the introduction stage there is very slow sales growth, little or no profitability,
     and the key promotional objective is to try to inform consumers of the product's existence.

11-29 INTRODUCTION STAGE                                                             APPLICATION

     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 would welcome 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 could set standards and generate primary demand.
     d. Nokia could solve the remaining technological problems.
     e. Nokia could acquire the small, struggling firms.

     Answer: c Page: 294-296
     Rationale: Nokia has the marketing power to carry the industry through the introductory stage
     by establishing industry-wide standards and stimulating primary demand.


                                                631
11-30 INTRODUCTION STAGE                                                            APPLICATION

     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 promotion to encourage trial.

     Answer: a Page: 294-296
     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 customers

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
     e. introduction stage

     Answer: a Page: 296
     Rationale: The growth stage is characterized by the appearance of competitors.

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

     Answer: b Page: 296
     Rationale: The second stage of the product life cycle, growth, is characterized by rapid
     increases in sales, and it is in this stage that competitors appear.



                                               632
11-33 GROWTH STAGE                                                                 CONCEPTUAL

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

    Answer: b Page: 296
    Rationale: Industry profits usually peak during the growth stage, somewhat before sales peak.

11-34 GROWTH STAGE                                                                 CONCEPTUAL

    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. product features remain unchanged
    d. profit margins increase as sales increase
    e. none of the above

    Answer: e Page: 296-297
    Rationale: The growth stage of the product life cycle is characterized by (a) a switch to
    selective demand; (b) a growing proportion of repeat purchases to initial purchasers; (c) the
    addition of new or modified product features; and (d) stabilizing or declining profit margins
    from increased sales due to increased price competition from more competitors that have
    entered the market.

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, a few 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
    e. introduction stage

    Answer: c Page: 296-297 Other Locations: SG
    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.




                                              633
11-36 MATURITY STAGE                                                                   DEFINITION

     Which stage in the product life cycle is characterized by a leveling off of industry sales?
     a. introduction
     b. growth
     c. maturity
     d. decline
     e. comparability

     Answer: c Page: 298
     Rationale: The third stage, maturity, is characterized by a leveling off of total industry sales
     revenue. Most consumers who would buy the product are either repeat purchasers of the
     product or have tried and abandoned it.

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.

     Answer: d Page: 298
     Rationale: Profit declines because there is fierce price competition among many sellers and
     the cost of gaining each new buyer at this stage is greater.

11-38 MATURITY STAGE                                                                 CONCEPTUAL

     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.

     Answer: b Page: 298
     Rationale: The marketing objective for a company is to maintain its existing buyers because
     few new customers are available to replace any who are lost.




                                                634
11-39 MATURITY STAGE                                                                CONCEPTUAL

     Promotional expenses at the maturity stage of the product life cycle are often directed towards:
     a. creating demand for the product class.
     b. contests and games.
     c. creating primary demand.
     d. gaining new distributors.
     e. eliminating distribution channels.

     Answer: b Page: 298 Other Locations: W
     Rationale: Promotional expenses in the maturity stage often are directed towards contests or
     games to keep people using the product and price competition continues through cents-off
     coupons.

11-40 MATURITY STAGE                                                                CONCEPTUAL

     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.

     Answer: c Page: 298
     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: 298 Other Locations: W
     Rationale: Product differentiation is a commonly used strategy for products in the maturity
     stage to maintain market share and brand loyalty.




                                               635
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

     Answer: d Page: 298 Other Locations: SG
     Rationale: Marketing expenses in the maturity stage often are directed toward holding market
     share through further product differentiation, price competition continues, and companies
     focus on retaining distribution outlets.

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: 298
     Rationale: In the decline stage, both sales and profits are steadily dropping.

11-44 DECLINE STAGE                                                                   CONCEPTUAL

     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: 298
     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.




                                               636
11-45 DECLINE STAGE                                                                CONCEPTUAL

     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.

     Answer: b Page: 298
     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 was insufficient to stimulate or maintain selective
     demand because environmental factors (changes in consumer preferences, new technologies,
     or other uncontrollable factor) 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. uncommercialization
     c. decline
     d. maturity
     e. harvested

     Answer: c Page: 298
     Rationale: The programs entered the decline stage with declining viewership.

11-47 DECLINE STAGE                                                                CONCEPTUAL

     To handle products in the decline stage of the product life cycle, companies often use either:
     a. diversification, harvesting, or building.
     b. diversification, harvesting, or contracting.
     c. deletion, harvesting, or contracting.
     d. deletion, diversification, or harvesting.
     e. building, contracting, or harvesting.

     Answer: c Page: 298
     Rationale: To handle a declining product, a company often follows one of three strategies.
     Deletion is dropping the product from the line; harvesting is retaining the product but reducing
     support costs; and contracting is arranging for another firm to either manufacture or market
     the product for you.




                                               637
11-48 DECLINE STAGE                                                                 APPLICATION

     Three years ago Pokémon was the hottest name in toys, but as other more high-tech toys
     appeared on the market, the popularity of Pokémon waned as did its sales. Some toy experts
     predict Pokémon will soon be only a memory for toy retailers. Pokémon is in the _____ stage
     of its product life cycle.
     a. decay
     b. uncommercialization
     c. decline
     d. maturity
     e. harvested

     Answer: c Page: 298
     Rationale: The market has abandoned Pokémon.

11-49 DECLINE STAGE                                                                 APPLICATION

     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.

     Answer: c Page: 298
     Rationale: When its product reaches the decline stage company, it can follow one of three
     main options—deletion, harvesting, and contracting. These are described in Alternatives a, b,
     d, and e. 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.

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: 298 Other Locations: SG
     Rationale: Dropping a product from a company’s product line is called product deletion.




                                               638
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: 298
     Rationale: Dropping a product from a company’s 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.

     Answer: d Page: 298
     Rationale: Text term definition—deletion

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: 298
     Rationale: Text term definition—harvesting




                                               639
11-54 HARVESTING                                                                    CONCEPTUAL

     When a product reaches the decline stage of the product life cycle, a firm has three 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: 298
     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 product 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: 298
     Rationale: Text term definition—harvesting

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: 299
     Rationale: The growth of E-mail has not affected faxing because the two technologies do not
     directly compete for the same messaging applications.




                                               640
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: 299
     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: 299 Other Locations: W
     Rationale: Consumer products have shorter life cycles than business products because the
     availability of mass communication vehicles informs consumers faster.

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: 299-300 Other Locations: SG
     Rationale: The fifth type of product life cycle is the generalized life cycle depicted in Figure
     11-3.




                                               641
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. abnormal

     Answer: a Page: 299 Other Locations: W
     Rationale: A high learning product is one for which significant education of the customer is
     required, which results in an extended introduction stage of the product life cycle.

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. exceptional
     b. high learning
     c. low learning
     d. fashion
     e. fad

     Answer: b Page: 299
     Rationale: A high learning product is one for which significant education of the consumer is
     required, and there is an extended introduction stage of the product life cycle.

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: 299
     Rationale: Low learning products, for which consumers understand their benefits, try to gain
     strong distributor outlets at the beginning so as competitors enter the market, the best outlets
     already have the innovator's product.




                                               642
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: 299-300
     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 these are incorrect. Alternatives D and E don't reflect reasonable
     product life cycles.

11-64 FASHION PRODUCT                                                                 DEFINITION

     Products that are introduced, decline, and reintroduced are characteristic of the _____ type of
     product life cycle.
     a. high learning
     b. low learning
     c. fashion
     d. fad
     e. abnormal

     Answer: c Page: 300
     Rationale: A fashion product, such as hemline lengths on skirts, or lapel widths on sport
     jackets, is introduced, declines, and then seems to return.

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: 300
     Rationale: Women's and men's clothing are most likely to be fashion products. Fashion
     products are most likely to experience the product life cycle described in the question.



                                               643
11-66 FAD PRODUCT                                                                   CONCEPTUAL

     Which type of product has equally rapid introduction and decline stages 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: 300 Other Locations: SG
     Rationale: A fad, such as wall walkers or toe socks, experiences rapid sales on introduction
     and then an equally rapid decline.

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. abnormal

     Answer: d Page: 300
     Rationale: A fad experiences rapid sales on introduction and then an equally rapid decline.

11-68 PRODUCT CLASS/PRODUCT FORM                                                    APPLICATION

     When consumers consider all types of household cleaners, they are considering the _____ of
     household cleaners. When consumers limit their choice of household cleaners to only those
     that come in spray bottles, they are considering a _____ of household cleaners.
     a. product class; product brand
     b. product group; product brand
     c. product line; product mix
     d. product mix; product line
     e. product class; product form

     Answer: e Page: 300
     Rationale: A product class is represented by all products in a related category or industry (i.e.,
     all household cleaners; all automobiles; all types of footwear). A product form refers to
     specific variations within a product class (i.e., spray household cleaners; domestic
     automobiles; cowboy boots).




                                               644
11-69 PRODUCT CLASS                                                                    DEFINITION

     _____ refers to the entire product category or industry, such as video games.
     a. Product form
     b. Product class
     c. Product line
     d. Product family
     e. Product brand

     Answer: b Page: 300
     Rationale: Key term definition—product class

11-70 PRODUCT FORM                                                                     DEFINITION

     Variations of a product within a product class are called:
     a. product form.
     b. product design.
     c. product line.
     d. product family.
     e. product brand.

     Answer: a Page: 300
     Rationale: Key term definition—product class

11-71 PRODUCT FORM                                                                     DEFINITION

     Product class refers to the entire product category or industry, while product form refers to:
     a. a distinctive shape.
     b. variations within the class.
     c. similarities within the category.
     d. variations from socioeconomic norms.
     e. exactly the same thing.

     Answer: b Page: 300
     Rationale: Key term definition—product form

11-72 PRODUCT CLASS/PRODUCT FORM                                                     APPLICATION

     Automobiles are an example of a _____, and SUVs are an example of a _____.
     a. product line; product class
     b. product family; product line
     c. product brand; product line
     d. product form; product class
     e. product class; product form

     Answer: e Page: 300 Other Locations: SG
     Rationale: Product class refers to the entire product category or industry; product form
     pertains to variations within the class.



                                               645
11-73 PRODUCT CLASS/PRODUCT FORM                                                    APPLICATION

     Greeting cards are an example of a _____, and Valentine cards are an example of a _____.
     a. product line; product class
     b. product family; product line
     c. product brand; product line
     d. product form; product class
     e. product class; product form

     Answer: e Page: 300
     Rationale: Product class refers to the entire product category or industry; product form
     pertains to variations within the class.

11-74 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: 300
     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.

11-75 DIFFUSION OF INNOVATION                                                       CONCEPTUAL

     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: 300
     Rationale: The concept of the diffusion of innovation refers to the acceptance of a new
     product by a population of consumers.




                                               646
11-76 DIFFUSION OF INNOVATION                                                       CONCEPTUAL

     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: 300 Other Locations: W
     Rationale: The first category of product adopters relative to the diffusion of innovation is
     innovators.

11-77 DIFFUSION OF INNOVATION                                                       CONCEPTUAL

     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.

     Answer: b Page: 301
     Rationale: Early majority adopters and late majority adopters each consist of about a third of
     the total population that will adopt a new product at some point during a product life cycle.

11-78 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: 301 Other Locations: W
     Rationale: Figure 11-5 provides profiles of five categories of product adopters.




                                               647
11-79 EARLY ADOPTERS                                                                    DEFINITION

     As product adopters, early adopters 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.

     Answer: d Page: 301
     Rationale: Figure 11-5 provides profiles of five categories of product adopters.

11-80 EARLY MAJORITY                                                                    DEFINITION

     As product adopters, members of the early majority 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.

     Answer: c Page: 301 Other Locations: SG
     Rationale: Figure 11-5 provides profiles of five categories of product adopters.

11-81 LATE MAJORITY                                                                     DEFINITION

     As product adopters, members of the late majority 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.

     Answer: b Page: 301
     Rationale: Figure 11-5 provides profiles of five categories of product adopters.




                                              648
11-82 LAGGARDS                                                                          DEFINITION

     As product adopters, laggards 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.

     Answer: a Page: 301
     Rationale: Figure 11-5 provides profiles of five categories of product adopters.

11-83 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.

     Answer: c Page: 301
     Rationale: Innovators are characterized as being adventuresome, having a high level of
     education, and having access to multiple sources of information.

11-84 PRODUCT ADOPTION                                                            APPLICATION

     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: 301
     Rationale: Value barriers mean the product (the Post Cereal bars) provides no incentive to
     change. Its marketing strategy is the same as all the similar products.


                                              649
11-85 PRODUCT ADOPTION                                                             APPLICATION

     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. Social
     c. Physical
     d. Value
     e. Usage

     Answer: e Page: 301
     Rationale: Usage barriers occur because the product is not compatible with existing habits.
     Value barriers occur because the product provides no incentive to change. Psychological
     barriers result from cultural differences. Risk barriers include physical, economic or social
     barriers to product acceptance.

11-86 PRODUCT ADOPTION                                                             APPLICATION

     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: 301-302
     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.

11-87 PRODUCT MANAGER                                                                 DEFINITION

     Introduced by Procter & Gamble in 1928, and used by such consumer goods firms as General
     Foods and Frito-Lay and by industrial firms such as Intel and Hewlett-Packard, the product
     manager manages the marketing efforts for:
     a. all of the corporation's products or brands.
     b. diverse assortment of varied products or brands.
     c. a close-knit family of products or brands.
     d. those aspects of products or brands that require close fiscal scrutiny.
     e. the creative aspects of advertising and promotion for a select group of products or brands.

     Answer: c Page: 302
     Rationale: Text term definition—product manager




                                               650
11-88 PRODUCT MANAGER                                                                    DEFINITION

     Another name for product manager is:
     a. product supervisor.
     b. brand manager.
     c. marketing manager.
     d. advertising and promotion manager.
     e. sales manager.

     Answer: b Page: 302 Other Locations: SG
     Rationale: Text term definition—product manager

11-89 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 its sales.
     a. Market modification
     b. Product modification
     c. Product repositioning
     d. Market-product strategy
     e. Diversification

     Answer: b Page: 303
     Rationale: Key term definition—product modification

11-90 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: 303
     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 a product's sales.




                                                651
11-91 PRODUCT MODIFICATION                                                          APPLICATION

     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:
     a. a market-product strategy.
     b. diversification.
     c. market modification.
     d. product modification.
     e. harvesting.

     Answer: d Page: 303
     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 a product's sales.
     Market modification does not involve changing the product.

11-92 PRODUCT MODIFICATION                                                          APPLICATION

     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.
     a. a market-product strategy.
     b. diversification.
     c. market modification.
     d. product modification.
     e. harvesting.

     Answer: d Page: 303
     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 a product's sales.
     Market modification does not involve changing the product.

11-93 MARKET MODIFICATION                                                              DEFINITION

     ______ is a strategy for managing a product's life cycle that attempts to increase a product's
     use among existing customers, create new use situations, or find new customers.
     a. Market modification
     b. Product modification
     c. Product repositioning
     d. Market-product strategy
     e. Diversification

     Answer: a Page: 303 Other Locations: W
     Rationale: Key term definition—market modification




                                               652
11-94 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.
    c. market modification.
    d. market-product extension.
    e. diversification.

    Answer: c Page: 303
    Rationale: Coca-Cola was using market modification strategy because it was trying to
    increase product usage.

11-95 MARKET MODIFICATION                                                            APPLICATION

    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: 303
    Rationale: Finding new uses for a more mature product helps extend the product's life cycle,
    as in the case of Tums.

11-96 MARKET MODIFICATION                                                            APPLICATION

    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: 303 Other Locations: SG
    Rationale: It's changing the market for the product; the product itself has remained
    unchanged.




                                               653
11-97 MARKET MODIFICATION                                                        APPLICATION

    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?
    a. finding new users
    b. creating new use situations
    c. increasing use by existing customers
    d. modifying the product
    e. reacting to competitors' position

    Answer: a Page: 303 Other Locations: W
    Rationale: By offering buying incentives to college students, automobile manufacturers can
    tap a sizable market of new customers who might otherwise not buy a new car.

11-98 MARKET MODIFICATION                                                        APPLICATION

    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?
    a. finding new users
    b. creating new use situations
    c. increasing use by existing customers
    d. modifying the product
    e. reacting to competitors' position

    Answer: a Page: 303
    Rationale: By including women in their marketing efforts, Upjohn increased the number of
    potential customers.




                                             654
11-99 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: 304
     Rationale: Alternative d is the position of consumer product marketers, not consumer
     advocates.

11-100 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: 304
     Rationale: Text term definition—product repositioning




                                              655
11-101 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: 304
     Rationale: Text term definition—product repositioning

11-102 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: 304
     Rationale: Sealy is changing the place a product occupies in a consumer's mind relative to
     competitive products.

11-103 PRODUCT REPOSITIONING                                                         APPLICATION

     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: 304
     Rationale: One reason to reposition a product is because a competitor's entrenched position is
     adversely affecting sales and market share.




                                                656
11-104 PRODUCT REPOSITIONING                                                         APPLICATION

     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: 304 Other Locations: SG
     Rationale: Harry & David changed the place a product occupies in a consumer's mind relative
     to competitive products.

11-105 PRODUCT REPOSITIONING                                                         APPLICATION

     Snickers candy bar was repositioned from a candy bar to a snack food through commercials
     that showed the 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: 304
     Rationale: 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.




                                                657
11-106 PRODUCT REPOSITIONING                                                       APPLICATION

     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: 304
     Rationale: Product repositioning means that a firm attempts to change the way in which
     consumers perceive its product. Kellogg's is attempting to change the place Frosted Flakes
     occupies in the minds of consumers in relation to alternative, competing breakfast food
     products.

11-107 PRODUCT REPOSITIONING                                                       APPLICATION

     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: 304
     Rationale: Pretzels capitalized on the "better-for-you” trend in the food industry.

11-108 PRODUCT REPOSITIONING                                                       APPLICATION

     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: 304
     Rationale: 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.



                                               658
11-109 CHANGING THE VALUE OFFERED                                                CONCEPTUAL

     Which of the following product life cycle management strategies requires a change in the
     physical product?
     a. increasing use
     b. creating new use situations
     c. finding new users
     d. repositioning the product
     e. changing the value offered

     Answer: e Page: 304
     Rationale: 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.

11-110 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: 304
     Rationale: Key term definition—trading up

11-111 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.

     Answer: b Page: 304 Other Locations: W
     Rationale: Trading up involves adding value to a product (or line) through adding product
     features and using higher quality product materials.




                                             659
11-112 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: 305 Other Locations: SG
     Rationale: Key term definition—trading down

11-113 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: 305
     Rationale: Key term definition—downsizing

11-114 DOWNSIZING                                                                  DEFINITION

     Downsizing is reducing the:
     a. quality of materials.
     b. product's price.
     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: 305
     Rationale: Key term definition—downsizing




                                             660
11-115 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: 305 Other Locations: W
     Rationale: Downsizing is reducing the content of packages without changing its size while
     maintaining or increasing the package price.

11-116 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: 305
     Rationale: Key term definition—branding

11-117 BRAND NAME                                                                     DEFINITION

     According to the text, 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: 305
     Rationale: Key term definition—brand name




                                               661
11-118 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: 305
     Rationale: Key term definition—brand name

11-119 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: 305
     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.

11-120 TRADE NAME                                                                    DEFINITION

     A trade 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 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. the identification that a firm has legally registered its brand name so the firm has
         exclusive use of it.

     Answer: d Page: 305 Other Locations: SG
     Rationale: Key term definition—trade name




                                               662
11-121 TRADEMARK                                                                      DEFINITION

     A trademark 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 that can be spoken.
     c. the part of a brand that is a symbol or design and cannot be vocalized.
     d. the commercial, legal name under which a company does business.
     e. the identification that a firm has legally registered its brand name or trade name so the
         firm has its exclusive use.

     Answer: e Page: 305
     Rationale: Key term definition—trade name

11-122 TRADEMARK                                                                      DEFINITION

     A _____ identifies that a firm has legally registered its brand name or trade name so the firm
     has its exclusive use, thereby preventing others from using it.
     a. copyright
     b. selling mark
     c. trademark
     d. trade dress
     e. benchmark

     Answer: c Page: 305
     Rationale: Key term definition—trademark

11-123 PRODUCT COUNTERFEITING                                                         DEFINITION

     The marketing of low-cost copies of popular brands not manufactured by the original producer
     is called:
     a. licensing.
     b. "me-too" marketing.
     c. brand imitation.
     d. product counterfeiting.
     e. re-manufacturing.

     Answer: d Page: 305
     Rationale: Text term definition—product counterfeiting




                                               663
11-124 PRODUCT COUNTERFEITING                                                     APPLICATION

     When Rose went shopping for a new purse, she thought she had found a real value—a Gucci
     purse for about 50% of what she was planning to pay. When she looked more closely, she
     noticed that although the purse was identical to a Gucci it was not manufactured by Gucci.
     This was probably an example of:
     a. licensing.
     b. "me-too" marketing.
     c. brand imitation.
     d. product counterfeiting.
     e. re-manufacturing.

     Answer: d Page: 305
     Rationale: Product counterfeiting is the marketing of low-cost copies of popular brands not
     manufactured by the original producer.

11-125 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: 306
     Rationale: Key term definition—brand personality

11-126 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: 306
     Rationale: Brand personality is a set of human characteristics associated with a brand name.




                                              664
11-127 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 customer value a given brand name gives to a product beyond the functional
         benefits provided.

     Answer: e Page: 306
     Rationale: Key term definition—brand equity

11-128 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: 305 Other Locations: SG
     Rationale: Branding allows an organization to use a name, phrase, design, symbols, or
     combination to identify its products and distinguish them from those of competitors. This
     makes buying decisions easier for consumers, who come to rely on the brand name as proxy
     for quality, value, price, etc.

11-129 LICENSING                                                                        DEFINITION

     Licensing is:
     a. the registration fee paid by a manufacturer to states, provinces, or countries in order to sell
         its products there.
     b. a branding strategy in which the producer dictates the brand name to retailers for the
         products sold to their respective markets.
     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 but sell them under the
         brand name of a wholesaler or retailer.
     e. a contractual agreement whereby a company allows another firm to use its brand name,
         patent, trade secret, or other product for a royalty or fee.

     Answer: e Page: 308 Other Locations: W
     Rationale: Key term definition—licensing




                                                665
11-130 LICENSING                                                                     DEFINITION

     _____ refers to a contractual agreement whereby a company allows another firm to use its
     brand name, patent, trade secret, or other product for a royalty or fee.
     a. Manufacturer branding
     b. Generic branding
     c. Reseller branding
     d. Mixed branding
     e. Licensing

     Answer: e Page: 308
     Rationale: Key term definition—licensing

11-131 LICENSING                                                                  APPLICATION

     Mattel has contractually agreed to let Colgate use the Barbie name and image on kids'
     toothpaste and toothbrushes. Colgate pays Mattel a fee for the use of the Barbie name and
     image. This is an example of:
     a. manufacturer branding.
     b. generic branding.
     c. reseller branding.
     d. mixed branding.
     e. licensing.

     Answer: e Page: 308
     Rationale: Licensing is a contractual agreement whereby a company allows another firm to
     use its brand name, patent, trade secret, or other product for a royalty or fee.

11-132 CRITERIA FOR SELECTING GOOD BRAND NAMES                                    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: 308
     Rationale: Additional criteria for selecting a good brand name are: (a) there should be no
     legal or regulatory conditions; and (b) the name should not have any prior impressions or
     undesirable images among a diverse world population of different languages and cultures
     when employing a global marketing strategy.




                                              666
11-133 BRAND NAME                                                                  APPLICATION

     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.

     Answer: e Page: 308 Other Locations: W
     Rationale: This brand name does not suggest the product's benefits. It meets the other criteria
     and guidelines reasonably well.

11-134 BRAND NAMES                                                                 APPLICATION

     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: 308
     Rationale: Only Match Light is simple and distinctive. The name suggests the product
     benefit, and it has no legal restrictions.

11-135 WEBLINK                                                                     CONCEPTUAL

     Going to the U.S. Patent and Trademark Office website allows you to:
     a. see if a brand or trade name has been registered.
     b. win prizes for suggesting brand names for various products.
     c. view the status of trademark infringement lawsuits.
     d. copyright a book without having to use a lawyer.
     e. buy unused trademarks

     Answer: a Page: 309
     Rationale: The U.S. Patent and Trademark Office offers a valuable service by allowing
     individuals and companies to quickly check to see if a name has been registered.




                                              667
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: 309 Other Locations: SG
     Rationale: Key term definition—manufacturer branding

11-137 MANUFACTURER BRANDING                                                         DEFINITION

     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: 309
     Rationale: Key term definition—manufacturer branding

11-138 MANUFACTURER BRANDING                                                         DEFINITION

     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: 309
     Rationale: Key term definition—manufacturer branding




                                              668
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.
     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 that the product be made to its specifications.

     Answer: c Page: 309
     Rationale: Key term definition—multiproduct branding

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: 309
     Rationale: Key term definition—multiproduct 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.
     e. multiproduct branding.

     Answer: e Page: 309
     Rationale: With multiproduct branding, a company uses one name for all of its products.




                                              669
11-142 FAMILY BRANDING                                                            APPLICATION

     Christopher Brosius, the maker of Demeter fragrances, knew that fragrance manufacturers
     combined several scents to create a perfume. He realized these fragrances smell wonderful on
     their own. He has bottled more than 150 different individual scents such as Woodsmoke,
     Lobster, and Chocolate. Each fragrance is sold using the Demeter brand name. Brosius uses
     _____ to market Demeter fragrances.
     a. multibranding
     b. family branding
     c. co-branding
     d. dual branding
     e. agent licensing

     Answer: b Page: 309 Other Locations: SG
     Rationale: With multiproduct branding (also known as family branding), a company uses one
     name for all of its products.

11-143 FAMILY 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: 309
     Rationale: With multiproduct branding (also known as blanket branding), a company uses
     one name for all of its products.

11-144 LINE EXTENSION                                                                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. manufacturing a new product with the same brand name that consumers will view as a
        logical addition to the original product line for a new market segment in the same 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: 309
     Rationale: The new product is seen as extending an existing line rather than starting a
     completely new line.




                                              670
11-145 LINE EXTENSION                                                               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: 309
     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.

11-146 LINE EXTENSION                                                               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: e Page: 309
     Rationale: This strategy 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.

11-147 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.

     Answer: a Page: 310 Other Locations: W
     Rationale: Text term definition—subbranding




                                               671
11-148 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: 310
     Rationale: Text term definition—brand extension

11-149 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: 310 Other Locations: SG
     Rationale: A brand extension strategy applies the current brand name to enter a completely
     different product class.

11-150 CO-BRANDING                                                                   DEFINITION

     The pairing of two brand names of two manufacturers on a single product is called:
     a. multibrand producing.
     b. generic branding.
     c. co-branding.
     d. mixed branding.
     e. multiproduct branding.

     Answer: c Page: 310
     Rationale: Key term definition—co-branding




                                              672
11-151 CO-BRANDING                                                                  APPLICATION

     Post Oreo cereal consists of chocolate cereal pieces that taste a lot like Nabisco's Oreo
     cookies. This cereal is an example of:
     a. manufacturer branding.
     b. generic branding.
     c. co-branding.
     d. mixed branding.
     e. multiproduct branding.

     Answer: c Page: 310 Other Locations: W
     Rationale: Co-branding is the pairing of two brand names of two manufacturers on a single
     product.

11-152 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.
     d. a branding strategy in which manufacturers produce products but sell them under the
        brand name of a wholesaler or retailer.
     e. a contractual agreement whereby a company allows someone else to use its brand name
        and usually requires that the product be made to its specifications.

     Answer: a Page: 310
     Rationale: Key term definition—multibranding

11-153 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: 310-311
     Rationale: Mars uses a branding strategy that gives each of its products a distinct name.




                                               673
11-154 MULTIBRANDING                                                                 DEFINITION

     A manufacturer's branding strategy in which a distinct name is given to each of its products is
     called:
     a. multibranding.
     b. generic branding.
     c. cobranding.
     d. mixed branding.
     e. multiproduct branding.

     Answer: a Page: 310-311
     Rationale: Key term definition—multibranding

11-155 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: 310-311
     Rationale: Since Siko is making a new line of goods with a different set of product
     characteristics, to use the same brand name for a different line of products might confuse the
     image developed for the high quality line of products.

11-156 EURO-BRANDING                                                                 DEFINITION

     A branding strategy of using the same brand name for the same product across all countries in
     the European Union is called:
     a. multicountry branding.
     b. uniform branding.
     c. continental branding.
     d. euro-branding.
     e. global branding.

     Answer: d Page: 311 Other Locations: SG
     Rationale: Key term definition—euro-branding




                                               674
11-157 EURO-BRANDING                                                            CONCEPTUAL

     The _____ approach in Europe is slowly being replaced by _____, the strategy of using the
     same brand name for the same product across all countries in the European Union.
     a. uniform branding; multi-country branding
     b. EC-branding, EU-branding
     c. multibranding; euro-branding
     d. euro-branding; global branding
     e. global branding; multibranding

     Answer: c Page: 311
     Rationale: Euro-branding has many of the benefits linked with multiproduct branding in
     addition to making pan-European advertising and promotion programs possible.

11-158 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: 311
     Rationale: Key term definition—private branding

11-159 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
         name of a wholesaler or retailer.
     e. a contractual agreement whereby a company allows someone else to use its brand name
         and usually requires that the product be made to its specifications.

     Answer: d Page: 311
     Rationale: Key term definition—private branding




                                             675
11-160 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 stores 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: 311
     Rationale: Manufacturers produce foods that are sold under the various store labels.

11-161 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: 312
     Rationale: The Marketing NewsNet describes how Pez creates customer value.

11-162 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 the company may market some products under their own name and others under
        that of a reseller.
     e. in which a company follows both manufacturer and generic branding approaches for
        products in its mix.

     Answer: d Page: 312
     Rationale: Key term definition—mixed branding




                                              676
11-163 MIXED BRANDING                                                                DEFINITION

     A branding strategy in which the company may market some products under its own name and
     other under that of a reseller is called:
     a. multibranding.
     b. generic branding.
     c. private branding.
     d. mixed branding.
     e. multiproduct branding.

     Answer: d Page: 312 Other Locations: SG
     Rationale: Key term definition—mixed branding

11-164 GENERIC BRANDING                                                              DEFINITION

     Generic branding is a branding strategy:
     a. that involves giving each product a distinct brand name.
     b. in which a product is given no identifying brand name, only a description of contents.
     c. in which a company uses one name for all of its products.
     d. in which manufacturers produce products but sell them under the brand name of a
        wholesaler or retailer.
     e. in which a company follows both manufacturer and private branding approaches for
        products in its mix.

     Answer: b Page: 312
     Rationale: Key term definition—generic branding

11-165 GENERIC BRANDING                                                              DEFINITION

     A strategy where a product is given no identifying name, only a description of contents is
     called:
     a. multibranding.
     b. generic branding.
     c. private branding.
     d. mixed branding.
     e. multiproduct branding.

     Answer: b Page: 312 Other Locations: W
     Rationale: Key term definition—generic branding




                                              677
11-166 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: 312
     Rationale: Key term definition—packaging

11-167 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: 312-313
     Rationale: Key term definition—label

11-168 PACKAGING                                                                      DEFINITION

     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: 313
     Rationale: Key term definition—label




                                               678
11-169 PACKAGING                                                                   CONCEPTUAL

     Which of the following statements about packaging is true?
     a. A recent trend is to emphasize the health and safety concerns of packaging.
     b. A recent trend is to search for environmentally-friendly packaging.
     c. Packaging can be used to attract customers to new brands.
     d. Packaging can be used to extend shelf life.
     e. All of the above statements about packaging are true.

     Answer: e Page: 313-315 Other Locations: W
     Rationale: All of the statements about packaging are true and discussed in the sections,
     “Creating Customer Value through Packaging and Labeling” and “Global Trends in
     Packaging.”

11-170 PACKAGING                                                                   CONCEPTUAL

     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: 313-315 Other Locations: SG
     Rationale: Packaging is usually an expensive product strategy to implement due to the
     promotional, legal, safety, and functional design issues that must be considered.

11-171 PACKAGING                                                                   CONCEPTUAL

     Packages create customer value by providing:
     a. legal disclaimers.
     b. instructions for use.
     c. communication, functional, and perceptual benefits.
     d. environmental impact statements.
     e. all of the above.

     Answer: c Page: 313
     Rationale: Major benefits of packaging are the information conveyed to consumers, its
     functional benefits such as protection or storage, and the perception created in the consumers'
     minds.




                                               679
11-172 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?
     a. communication benefits
     b. storage benefits
     c. perceptual benefits
     d. protection benefits
     e. all of the above

     Answer: a Page: 313
     Rationale: A major benefit of packaging is the label information on it conveyed to consumers.

11-173 FUNCTIONAL BENEFITS OF PACKAGING                                             DEFINITION

     Packaging that provides convenience, protection, or storage offers what kind of benefits?
     a. communication benefits
     b. functional benefits
     c. perceptual benefits
     d. physiological benefits
     e. all of the above types of benefits

     Answer: b Page: 313-314
     Rationale: Packaging often plays an important functional role such as convenience,
     protection, or storage.

11-174 PERCEPTUAL BENEFITS OF PACKAGING                                             DEFINITION

     The perception packaging creates in the consumer's mind relates to what kind of benefits?
     a. communication benefits
     b. functional benefits
     c. perceptual benefits
     d. physical benefits
     e. all of the above types of benefit

     Answer: c Page: 314-315
     Rationale: Packaging and labeling provide communication benefits, functional benefits, and
     perceptual benefits.




                                              680
11-175 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: 314 Other Locations: SG
     Rationale: A component of packaging and labeling is the perception created in the
     consumer’s mind. Characteristics such as shape and color can connote status, economy, and
     product quality.

11-176 GLOBAL TRENDS IN PACKAGING                                                CONCEPTUAL

     Two global trends are directly related to packaging. One trend involves the environmental
     effects of packaging. The other trend focuses on:
     a. creating larger size packages to be sold at warehouse stores.
     b. cultural diversity.
     c. making packaging a less expensive part of the marketing strategy.
     d. health and safety concerns.
     e. total quality management.

     Answer: d Page: 315
     Rationale: Today, a majority of U.S. and European consumers believe companies should
     make sure products and their packages are safe, regardless of the cost.

11-177 GLOBAL TRENDS IN PACKAGING                                                CONCEPTUAL

     Two global trends are directly related to packaging. One trend focuses on health and safety
     concerns. The other trend is involved with:
     a. relating packaging to the needs of an aging population.
     b. cultural diversity.
     c. making packaging a less expensive part of the marketing strategy.
     d. total quality management.
     e. the environmental effects of packaging.

     Answer: e Page: 315
     Rationale: Because of the widespread worldwide concern about the growth of solid waste and
     the shortage of viable landfill sites, the amount, composition, and disposal of packaging
     material continues to receive much attention.




                                              681
11-178 LIFE-CYCLE ANALYSIS (LCA)                                                      CONCEPTUAL

      Firms today are examining the environmental effect of their packaging at every stage from
      raw material sources and production through distribution and disposal. This examination
      process is called:
      a. status reporting.
      b. economy assurance.
      c. product quality enhancement.
      d. a life-cycle analysis.
      e. a situation analysis.

      Answer: d Page: 315
      Rationale: Life-cycle analysis (LCA) is used to examine the environmental effect of
      packaging at every stage of a product’s life cycle.

11-179 SHELF LIFE                                                                       DEFINITION

      The time a product can be stored before it spoils is called:
      a. staying power.
      b. storage benefit.
      c. protection potential.
      d. shelf life.
      e. none of the above.

      Answer: d Page: 315
      Rationale: Text term definition—shelf life

11-180 WARRANTY                                                                         DEFINITION

      A statement indicating the liability of the manufacturer for product deficiencies is a:
      a. proof of purchase.
      b. warranty.
      c. seal of approval.
      d. disclaimer.
      e. constraint.

      Answer: b Page: 316
      Rationale: Key term definition—warranty

11-181 EXPRESS WARRANTY                                                                 DEFINITION

      A written statement of manufacturer liability for product quality is called a(n) _____ warranty.
      a. insurance
      b. functional
      c. implied
      d. strict-liability
      e. express

      Answer: e Page: 316
      Rationale: Text term definition—express warranties


                                                 682
11-182 LIMITED-COVERAGE WARRANTY                                                    DEFINITION

     Warranties which specifically state the bounds of coverage, and more important, areas of
     noncoverage are called _____ warranties.
     a. limited-coverage
     b. functional
     c. implied
     d. strict-liability
     e. inferred

     Answer: a Page: 316 Other Locations: SG
     Rationale: Text term definition—limited-coverage warranty

11-183 FULL WARRANTY                                                                DEFINITION

     Warranties that have no limits of noncoverage are called _____ warranties.
     a. limited-coverage
     b. full
     c. implied
     d. strict-liability
     e. express

     Answer: b Page: 316
     Rationale: Text term definition—full warranty

11-184 IMPLIED WARRANTY                                                             DEFINITION

     Warranties which assign responsibility for product deficiencies to the manufacturer are most
     correctly called _____ warranties.
     a. limited-coverage
     b. technical
     c. implied
     d. strict-liability
     e. express

     Answer: c Page: 316
     Rationale: Text term definition—implied warranty




                                              683
11-185 IMPLIED WARRANTY                                                            APPLICATION

     Merle purchased a blender and the blade came off the first time he tried to use it to blend a
     milkshake. Since he has no written guarantee, he must rely on a(n) _____ warranty to see that
     he at least gets a free replacement blender.
     a. implied
     b. express
     c. limited-coverage
     d. full-coverage
     e. functional

     Answer: a Page: 316 Other Locations: SG
     Rationale: Implied warranties assign responsibility for product deficiencies to the
     manufacturer.

11-186 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: 318
     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.

11-187 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: 318-319
     Rationale: Each of the statements in a, b, c, and d are included in Video Case 11-1.




                                              684
                                         CHAPTER 11
                       MANAGING PRODUCTS AND BRANDS

                                SHORT ESSAY QUESTIONS

11-188 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: 294-298

11-189 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: 294-295

11-190 DECLINE STAGE                                                                CONCEPTUAL

     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 is the beginning of the end and occurs when sales and profits are steadily
     dropping. To handle a declining product, a company follows one of two strategies. Deletion
     is dropping the product from the line and is the most drastic action. Harvesting is when a
     company retains the product but reduces support costs.

     Page: 298-299


                                               685
11-191 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. If a company
     introduces products that are similar to others in its line, rough estimates can be made, but
     several factors can affect the length of a product's life. Factors such as improved substitutes
     and technological advances can alter a product's life cycle.

     Page: 299

11-192 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 text—it 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 the life cycle can repeat as consumer preferences change and then revert
           back, thus creating several life cycles over many years. Occurs with some 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: 299-300




                                               686
11-193 DIFFUSION OF INNOVATION                                                      CONCEPTUAL

     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: 300-301

11-194 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: 302-305




                                               687
11-195 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: 304-305

11-196 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: 304-305

11-197 BRAND NAME AND TRADE NAME                                                   CONCEPTUAL

     What is the difference between a brand name and a trade name? 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 that Apple Computer
     puts on its machines and in its ads. A trade name is a commercial, legal name under which a
     company does business (e.g. Campbell Soup Company).

     Page: 305




                                              688
11-198 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 elicit the proper consumer responses to a brand's identify and
         meaning. (4) The final and most difficult step is to create a consumer-brand resonance
         evident in an intense, active loyalty relationship between consumer and the brand.

     Page: 307

11-199 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).
     (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: 308-309




                                               689
11-200 BRANDING STRATEGIES                                                           CONCEPTUAL

     Identify and describe the four 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) multi-product 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
          name of a wholesaler or retailer.
     (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.
     (4) Generic branding: the producer gives its product no brand name other than its
          identification and description of its contents.

     Page: 309-312

11-201 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: 309-310




                                                690
11-202 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: 309-310

11-203 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 the
          composition of the product, 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: 313-315




                                              691
11-204 WARRANTY                                                                    CONCEPTUAL

     Why are warranties important?

     Answer:
     Warranties are important in light of increasing product liability claims. Warranties represent
     much more to the buyer than just protection from negative consequences. They hold a
     significant marketing advantage for the producer. For example, Sears has built a strong
     reputation for its Craftsman hand tools line with a simple warranty: if you break a tool, it's
     replaced with no questions asked.

     Page: 316




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CHAPTER 12 GOES HERE




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