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Exam 19 September 2017, questions and answers Chapter 11-20

Exam 19 September 2017, questions and answers Marketing Management (Alliance University) Chapter 11 to Chapter 20 Chapter 11: Dealing with Competition GENERAL CONCEPT QUESTIONS Multiple Choice 415. Michael Porter has identified five forces that determine the intrinsic long-run attractiveness of a market or market segment. Which of the following would NOT be among Porter’s five forces? a. Industry competitors b. Technological partners c. Substitutes d. Buyers e. Potential entrants Page: 342 416. Which of the following would be the most likely threat that is associated with potential new entrants in Porter’s segment structural attractiveness model? a. Threat of positioning b. Threat of response c. Threat of delayed action d. Threat of role reversal e. Threat of mobility Page: 342 417. A segment is unattractive when there are actual or potential for the product. a. contenders b. competitors c. substitutes 342 Chapter 1: Marketing: Managing Profitable Customer Relationships d. unclear demand e. profit fluctuation Page: 343 418. Wal-Mart is perhaps one of the best illustrations of the threat of found in Porter’s model. a. intense segment rivalry b. new entrants c. substitute products d. buyers’ growing bargaining power e. suppliers’ growing bargaining power Page: 343 419. A segment is unattractive if the company’s suppliers are able to raise prices or reduce quantity supplied. Which of the following is the best illustration of the threat of suppliers’ growing bargaining power? a. Wal-Mart has almost no competitors in its market space. b. Oil companies must purchase a significant amount of their product from OPEC. c. McDonald’s is the largest fast food franchise and is still growing. d. The U.S. Post Office has merged package operations with FedEx. e. Sears unsuccessfully attempted to compete with Wal-Mart and Kmart. Page: 343 420. A(n) is a group of firms that offer a product or class of products that are close substitutes for one another. a. industry b. cartel c. cooperative d. monopoly e. demand field Page: 344 421. When only one firm provides a certain product or service in a certain country or area a exists. a. duopoly b. monopoly c. oligopoly d. monopolistic competition e. pure competition Page: 344 422. Which of the following would be the best illustration of a pure oligopoly? a. Autos b. Cameras c. Steel d. Pharmaceuticals e. High fashion clothing Page: 344 343 Part 1: Defining Marketing and the Marketing Process 423. Which of the following is often considered to be a good illustration an industry structure type known as pure competition? a. Oil b. Plastics c. Pharmaceuticals d. High fashion clothing e. Stock market Page: 344 424. All of the following are considered to be major entry barriers in markets EXCEPT . a. high capital requirements b. economies of scale c. patents and licensing requirements d. product or service line e. reputation requirements Page: 345 425. If a marketer is facing government restrictions, high vertical integration, emotional barriers, low asset-salvage value due to obsolescence, and legal obligations to creditors, the marketer is most likely facing what are called barriers in a marketplace. a. exit b. entrance c. competitive d. virtual e. contrived Page: 345 426. Major oil producers carry on oil exploration, oil drilling, oil refining, chemical manufacture, and service-station operation. When an organization does all of these separate tasks within a distribution channel they can be said to have achieved what is called . a. vertical integration b. horizontal integration c. concentric integration d. parallel marketing e. conglomerate marketing Page: 346 427. Using the market approach, are companies that satisfy the same customer need. a. partners b. competitors c. entrepreneurs d. innovators e. followers Page: 346 344 Chapter 1: Marketing: Managing Profitable Customer Relationships 428. A group of firms following the same strategy in a given target market is called . a. cartel b. cabal c. cooperative d. informal alliance e. strategic group Page: 347 429. An example of a strategic group in the appliance industry would be one where . a. there was a large franchised dealer system b. a common promotional theme used c. competitors had broad lines, medium manufacturing costs, low service responsibility, and low prices d. multinational operations are mandated e. a value orientation rather than a cost orientation Page: 347 430. Once a company has identified its main competitors and their strategies, it must next ask: ? a. What are the competitors’ objectives b. What are the competitive brand attributes c. What are the competitive promotion schemes d. What is the attrition rate in the market e. What are the subtle market entrance requirements Page: 347 431. In general, a company should monitor the following variables when analyzing competitors: , share of mind, and share of market. a. share of demand b. share of profits c. share of promotion d. share of universe e. share of heart Page: 348 432. is the percentage of customers who named the competitor in responding to the statement, “Name the company from which you would prefer to buy the product.” a. Share of market b. Share of mind c. Share of heart d. Share of competitive space e. Share of psychological field Page: 348 433. Most companies aim their competitive shots at competitors, because this requires fewer resources per share point gained. a. strong 345 Part 1: Defining Marketing and the Marketing Process b. weak c. distant d. “good” e. unacknowledged Page: 348 434. competitors try to buy market share rather than earn it; take large risks; invest in overcapacity; and upset industrial equilibrium. a. “Bad” b. “Good” c. Distant d. Close e. Strong Page: 349 435. In general, a market leader will have about of the total market in relation to other competitors. a. 60 percent b. 50 percent c. 40 percent d. 30 percent e. 75 percent Page: 349 436. The market nicher serves small market segments not being served by larger firms. Nichers account for about of the market in relation to other competitors. a. 30 percent b. 25 percent c. 20 percent d. 15 percent e. 10 percent Page: 349 437. The aim of benchmarking is to copy or improve on , either within an industry or across industries. a. profitability b. manufacturing c. ideation d. aggressiveness e. “best practices” Page: 349 438. Being a market leader is often a difficult position to maintain and defend. The market leader must protect its current market share through good defensive and offensive actions. Second, the firm can try to increase its market share, even if the market size remains constant. What is the third course of action recommended for market leaders? a. The firm must find be a cost leader. b. The firm must find new, innovative technologies on a monthly basis. 346 Chapter 1: Marketing: Managing Profitable Customer Relationships c. The firm must strive to win promotional awards. d. The firm must find ways to expand total market demand. e. The firm must pursue markets others do not want. Page: 350 439. As a marketing manager, you have decided to pursue new customers with your established products. Specifically, the new customers that you want are those who might use the product but do not at present. Which of the following strategies is recommended to pursue such a customer market? a. Market-penetration strategy b. New-market segment strategy c. Geographical-expansion strategy d. Needs-assessment strategy e. Consolidation strategy Page: 350 440. One of the market leader strategies for expanding the total market is to focus on more usage. Two avenues are open for doing this: increasing the frequency of consumption or . a. increasing adherence to everyday low pricing b. decreasing the number of product returns c. increasing the level or quantity of consumption d. increasing the level of promotional expenditures relative to market share percentage e. decreasing sales-related expenses Page: 350 441. To counter value-based players, it will be necessary to focus on areas where their business models give other companies room to maneuver. For example, instead of directly competing with Wal-Mart and other retailers, Walgreen’s emphasizes convenience across all elements of its business. Which of the following general strategies is Walgreen’s using as its main competitive focus? a. Execution b. Implementation c. Vertical integration d. Differentiation e. Cost leadership Page: 351 442. Market leaders are constantly under attack from large and small competitors alike. What is the most constructive response a market leader can make when defending its terrain? a. Basic cost control. b. Expanding expected benefits. c. Expanding desired benefits. d. Meet all challengers with a swift response. e. Continuous innovation. Page: 352 347 Part 1: Defining Marketing and the Marketing Process 443. Caterpillar has become dominant in the construction-equipment industry despite charging a premium price and being challenged by a number of able competitors. All of the following have been cited as policies used by Caterpillar to meet its competitors EXCEPT . a. limited-line strategy b. premium performance c. superior service d. extensive and efficient dealership system e. good financing Page: 352 444. Sony is an unusual market leader. It gives its customers new products that they have never even asked for (e.g., Walkmans, VCRs, video cameras, CDs). This makes Sony a(n) firm. a. market-driven b. market-driving c. operations-driven d. vision-driven e. virtually-driven Page: 353 445. defense involves occupying the most desirable market space in the minds of the consumers, making the brand almost impregnable. a. Position b. Flank c. Preemptive d. Mobile e. Contraction Page: 353 348 Chapter 1: Marketing: Managing Profitable Customer Relationships 446. A marketing manager has planned a strategy that will require that the organization erect outposts to protect its weak front-running brands. Because these outposts will be central to the organization’s new competitive strategy, we can say that a defense is being used. a. position b. flank c. preemptive d. counteroffensive e. mobile Page: 354 447. The “best defense is a good offense” would be a policy under which of the following market leader defensive strategies? a. Position defense b. Flank defense c. Contraction defense d. Preemptive defense e. Lateral defense Page: 354 448. Market broadening and market diversification are likely tactics employed in which of the following market leader defensive strategies? a. Position defense b. Flank defense c. Preemptive defense d. Counteroffensive defense e. Mobile defense Page: 354 449. Because the cost of buying higher market share may far exceed its revenue value, a company should consider four factors before pursuing increased market share. All of the following would be among those four factors EXCEPT . a. the possibility of provoking antitrust action b. economic cost c. pursuing the wrong marketing-mix strategy d. the likelihood that an award-winning promotional campaign can be generated e. the effect of increased market share on actual and perceived quality Page: 355 349 Part 1: Defining Marketing and the Marketing Process 450. Some market leaders have increased profitability by selectively market share in weaker areas. a. decreasing b. increasing c. protecting d. sharing e. trading Page: 355 451. All of the following companies have been characterized as being market challengers in their respective fields EXCEPT . a. Toyota b. British Airways c. Boeing d. Honda e. Proctor & Gamble Page: 355 452. A market challenger must decide who to attack. All of the following are considered as likely possible targets (as per information found in the text) EXCEPT . a. it can attack the market leader b. it can attack firms its own size that are not doing the job c. it can attack firms its own size that are underfinanced d. it can attack a global conglomerate that is market hungry e. it can attack small local firms Page: 356 453. All of the following are considered to be viable attack strategies that can be employed by a market challenger EXCEPT . a. counteroffensive attack b. frontal attack c. flank attack d. bypass attack e. guerilla warfare Pages: 356–358 454. According to attack strategies available to the market challenger, the can be used when the challenger spots areas where the opponent is underperforming. a. encirclement attack b. frontal attack c. flank-geographic-attack d. backwards-flank-attack e. guerilla warfare Page: 356 455. Sally Seabrook is an up-and-coming marketing manager for a large department store chain. Ms. Seabrook has distinguished herself with bold strategies such as launching attacks on her primary competitor from several fronts 350 Chapter 1: Marketing: Managing Profitable Customer Relationships (including advertising, new store openings, price cuts, new distributor alliances, and creative merchandising). Her “blitz” is comparable to any done by the military in time of war. Which of the following market challenger attack strategies is Ms. Seabrook using to attack her competition? a. Frontal attack b. Bypass attack c. Guerrilla warfare d. Flank attack e. Encirclement attack Page: 357 456. A marketing manager of a market challenger-type organization has decided to “leapfrog” competition by moving into cutting-edge technologies. This indirect approach to attacking competition can be characterized as being what is called the . a. flank attack b. encirclement attack c. bypass attack d. guerrilla warfare e. frontal attack Page: 357 457. A market challenger strategist must carefully consider all attack options before moving forwards. If the strategist chooses the approach, selective price cuts, intense promotional blitzes, and occasional legal action will probably be commonplace in the strategic design. a. frontal attack b. flank attack c. bypass attack d. encirclement attack e. guerilla warfare Page: 358 458. All of the following are considered to be valid market challenger attack strategies EXCEPT . a. price discounts b. lower price goods c. prestige goods d. partnerships with rival market leaders e. product proliferation Pages: 358–359 459. Avon became a major cosmetics company by perfecting door-to-door selling instead of battling other cosmetic firms in conventional stores. This is an example of which of the following specific market challenger attack strategies? a. Manufacturing-cost reduction b. Intensive advertising promotion c. Distribution innovation d. Product innovation e. Product proliferation 351 Part 1: Defining Marketing and the Marketing Process Page: 359 460. Which of the following best describes the premise of Theodore Levitt’s “Innovative Imitation” article? a. Imitation is wrong and should be punished. b. Product imitation might be as profitable as a strategy of product innovation. c. Innovation is not possible without substantial imitation. d. Innovation cannot begin unless dissatisfaction with imitation occurs. e. Imitation should be against the law because of the intellectual property decision involved. Page: 359 461. Many companies prefer to follow rather than challenge the market leader. Patterns of are common in capital-intensive, homogeneous-product industries, such as steel, fertilizers, and chemicals. Competitors present similar offers to buyers, usually by copying the leader. Market shares show high stability. a. “conscious parallelism” b. “feature fashion” c. “covert security analysis” d. “supply delay” e. “predatory pricing” Page: 360 462. All of the following are considered to be viable market follower strategies EXCEPT . a. counterfeiter b. cloner c. imitator d. innovator e. adapter Pages: 360–361 352 Chapter 1: Marketing: Managing Profitable Customer Relationships 463. As a market follower strategy, the emulates the leader’s products, name, and packaging, with slight variations. a. counterfeiter b. cloner c. imitator d. adapter e. innovator Page: 361 464. As a market follower strategy, the copies some things from the leader but maintains differentiation in terms of packaging, advertising, pricing, or location. This strategy is tolerated by the market leader as long as the follower’s aggressiveness does not mount. a. counterfeiter b. cloner c. imitator d. adapter e. innovator Page: 361 465. An alternative to being a market follower in a large market is to be a leader in a small market. This type of competitor is called a(n) . a. marketing knave b. market nicher c. segment king d. guerilla marketer e. strategic clone Page: 362 466. Which of the following tennis shoe companies is considered to be a market nicher? a. New Balance b. Adidas c. Reebok d. Wal-Mart brand tennis shoes e. Nike Page: 362 467. In terms of comparisons with a market leader, whereas the market leader achieves high volume, the market nicher achieves . a. high margin b. low margin c. high promotability d. medium pricing e. lower demand Page: 362 468. The key idea in successful nichemanship is specialization. Which of the following specialists would most closely be identified with the characterization of being an organization that limits its selling to one customer? 353 Part 1: Defining Marketing and the Marketing Process a. End-user specialist b. Vertical-level specialist c. Customer-size specialist d. Specific-customer specialist e. Quality-price specialist Page: 364 469. A market nicher is considered to be a specialist if the firm specializes in producing a certain type of product or product feature such as Rent- a-Wreck that rents only “beat-up” cars. a. end-user b. vertical-level c. customer-size d. channel e. product-feature Page: 364 470. Which of the following strategies for entering a market held by incumbent firms would be best if the desire was to position away from the dominant brand with a comparable or premium price and heavy advertising spending to establish the new brand as a credible alternative? a. Differentiation b. Challenger c. Niche d. Premium e. Standard Page: 364 471. Which of the following types of companies is characterized as having a “fighter orientation”? a. Customer-centered b. Competitor-centered c. Distribution-centered d. Promotion-centered e. Niche-centered Page: 365 354 Chapter 1: Marketing: Managing Profitable Customer Relationships 472. Which of the following types of companies is characterized as being “too reactive”? a. Competitor-centered b. Customer-centered c. Service-centered d. Distribution-centered e. Niche-centered Page: 365 473. Which of the following types of companies is felt to be in a better position to identify new opportunities? a. Competitor-centered b. Consumer-centered c. Nicher-centered d. Distribution-centered e. Organization-centered Page: 365 474. In a company, the obsession of the company is with the customer, not the competition. a. niche-centered b. price-centered c. cost-centered d. customer-centered e. promotion-centered Page: 365 True/False 475. Markets have become too competitive to just focus on the consumer alone. Answer: True Page: 342 476. A market is unattractive if it already contains numerous, strong, or aggressive competitors. Answer: True Page: 342 477. The most attractive segment is one in which the entry barriers are low and exit barriers are high. Answer: False Page: 342 478. Many businesses have failed to look to the Internet for their most formidable competitors. Answer: True Page: 343 355 Part 1: Defining Marketing and the Marketing Process 479. An industry is a group of firms that offer a product or class of products that are close substitutes for one another. Answer: True Page: 344 480. In a pure monopoly, a small number of large firms produce products that range from highly differentiated to standardized. Answer: False Page: 344 481. In monopolistic competition, competitor’s focus on market segments where they can meet customers’ needs in a superior way and command a price premium. Answer: True Page: 344 482. Good illustrations of entry barriers into a market might be legal or moral obligations to customers, creditors, and employees, high vertical integration, and emotional barriers. Answer: False Page: 345 483. Vertical integration means that a product manufacturer enters into an alliance with another similar manufacturer to achieve volume discounts in storage or shipping from a third party. Answer: False Page: 346 70. Using a market approach, competitors are companies that satisfy the same customer need. Answer: True Page: 346 Level of difficulty: Easy 71. A competitor map shows the sales volume of various competitors in a market space. Answer: False Page: 346 72. A group of firms following the same strategy in a given target market is called a strategic alliance. Answer: False Page: 347 Level of difficulty: Medium 73. The competitor’s share of a target market is called the share of market. Answer: True Page: 348 356 Chapter 1: Marketing: Managing Profitable Customer Relationships 74. Share of heart is the percentage of customers who named the competitor in responding to the statement, “Name the first company that comes to mind in this industry.” Answer: False Page: 348 75. As a strategy for expanding the total market, a market-penetration strategy is aimed at consumers who might use the product but do not at present. Answer: True Page: 350 76. The most constructive strategy that a market leader can use to defend its terrain is to follow the path of “attack before they do.” Answer: False Page: 352 Level of difficulty: Medium 77. If a market leader follows a strategy of continuous innovation, it keeps increasing its competitive strength and value to its customers. Answer: True Page: 352 78. Position defense involves occupying the most desirable market space in the minds of consumers, making the brand almost impregnable. Answer: True Page: 353 Level of difficulty: Medium 79. A preemptive defense is basically a strategic retreat until resources can be assembled for a more advantageous attack. Answer: False Page: 354 Level of difficulty: Medium 80. A good way of describing a contraction defense would be to label it a strategic withdrawal. 357 Part 1: Defining Marketing and the Marketing Process Answer: True Page: 354 Level of difficulty: Easy 81. The market leader should consider several factors before pursuing increased market share. One of the chief factors for consideration is the effect of increased market share on actual and perceived quality. Answer: True Page: 355 Level of difficulty: Medium 82. After the market leader position, firms that occupy second, third, and lower ranks in an industry are often called fledgling leaders. Answer: False Page: 355 Level of difficulty: Medium 83. The first step that a market challenger must take in establishing its stance against competitors is to define its strategic objective. Answer: True Page: 356 Level of difficulty: Medium 84. The frontal attack by a market challenger looks for weak spots on the fringe of the opponent’s defenses because these are natural targets. Answer: False Page: 356 85. The most indirect assault strategy that can be used by a market challenger is the bypass attack where the challenger bypasses the enemy and attacks easier markets to broaden one’s resource base. Answer: True Page: 357 358 Chapter 1: Marketing: Managing Profitable Customer Relationships 86. The encirclement attack by a market challenger consists of waging small, intermittent attacks to harass and demoralize the opponent and eventually secure permanent footholds. Answer: False Pages: 357–358 87. Prestige goods is a specific attack strategy that a market challenger can launch for a higher-quality product and charge a higher price than the market leader. Answer: True Page: 359 88. According to an article by Theodore Levitt (“Innovative Imitation”), product innovation is always a more profitable strategy than product imitation. Answer: False Page: 359 89. As one of the market follower strategies, counterfeiting duplicates the leader’s product and package and sells it on the black market or through disreputable dealers. Answer: True Page: 360 90. As a market follower strategy, the adapter emulates the leader’s products, name, and packaging with slight variations. Answer: False Page: 361 91. A typical market challenger strategy is that of being an imitator (e.g., copies some things from the leader but maintains differentiation in terms of packaging, advertising, pricing, or location). Answer: False Page: 361 92. In a study of hundreds of business units, the Strategic Planning Institute found that the return on investment (ROI) averaged 27 percent in smaller markets, but only 11 percent in larger markets. Answer: True Page: 362 Level of difficulty: Medium 359 Part 1: Defining Marketing and the Marketing Process 111. One of the chief advantages held by a market nicher is the fact that once a niche is established it tends to be rather stable and can be “milked for profit” for several years (i.e., single niching is a preferred strategy). Answer: False Page: 363 112. As a niche specialist role, a channel specialist specializes in serving only one channel of distribution. Answer: True Page: 364 Level of difficulty: Easy 95. Hewlett-Packard specializes in the high-quality, high-price end of the hand- calculator market qualifying the company to be called a quality-price specialist. Answer: True Page: 364 96. If you were a marketing manager of a rival brand of Jell-O, one of the strategies that could be used to overcome your competitor would be called premium. Answer: True Page: 364 Level of difficulty: Medium 360 Chapter 1: Marketing: Managing Profitable Customer Relationships 97. When Pepsi positions close to the dominant brand (Coke) with heavy advertising spending and comparable or premium price to challenge Coke’s dominant brand in the soft drink category, it is following a strategy called differentiation. Answer: False Page: 364 98. As a proven strategy for meeting competitors, almost all companies spend the majority of their time focusing on competitors exclusively. Answer: False Page: 365 99. As a result of a competitor-centered company orientation, the company develops a fighter orientation. Answer: True Page: 365 100. A customer-centered company focuses on competitors’ efforts to win customers and devises strategies to thwart these efforts. Answer: False Page: 365 Essay 101. Michael Porter has identified five forces that determine the intrinsic long-run attractiveness of a market or market segment. Briefly, list and characterize those forces. 102. There are four industry structure types associated with an industry concept of competition. List and briefly characterize those four (4) types. 361 Part 1: Defining Marketing and the Marketing Process 103. Industries differ greatly in ease of entry. List four typical entry barriers into a market? Page: 345 104. Discuss the concept of vertical integration by examining the term and the advantages and disadvantages of integration. Illustrate your thoughts with an example of how the process works. 105 In general, a company should monitor three variables when analyzing competitors. List and briefly characterize those three variables? 106. The market leader must work hard to stay on top of its market. Three strategies can be crafted to achieve this objective. Describe these three strategies and any relevant sub-strategies that are necessary for accomplishing the primary objective. 362 Chapter 1: Marketing: Managing Profitable Customer Relationships 107. Assume that your organization has chosen to pursue a market leader strategy of the flank defense. Describe what such a strategy might be. 108. Assume that you are the marketing manager for a market challenger that is seeking to attack the market leader with an encirclement attack. Describe the encirclement attack and evaluate probable success using this strategy. 109. Characterize the four broad strategies often employed by market followers to meet their competitors. 110. The market nicher is a specialist. Characterize five niche specialist roles that can be assumed by the market nicher. Part 1: Defining Marketing and the Marketing Process services not available from other firms; and, (11) channel specialist—firm specializes in serving only one channel of distribution. For additional information, see chapter section. Page: 364 APPLICATION QUESTIONS Multiple Choice 111. Which of the following companies saw sales plummet from a peak of $7.1 billion in 1996 to about $4 billion in 2003 in part because of fierce competition in the fashion jeans business? a. Wrangler’s b. Arizona Jeans c. Levi Strauss d. Canyon River Blues e. Lee Jeans Page: 341 112. A market segment’s attractiveness varies with the height of its entry and exit barriers. Which of the following forces as described by Michael Porter would most likely be the force being examined if the above situation were to be considered by a marketing manager? f. Threat of intense segment rivalry. g. Threat of new entrants. h. Threat of substitute products. i. Threat of buyers’ growing bargaining power. j. Threat of suppliers’ growing bargaining power. Pages: 342–343 364 Chapter 1: Marketing: Managing Profitable Customer Relationships 113. During the 2004 holiday season from discounters Wal-Mart, Target, and even electronics vendors such as Best Buy and Circuit City has pummeled the toy chains and sent some of them into bankruptcy. a. creative advertising b. global alliances c. pricing pressure d. regulation pressure e. superior management knowledge Page: 343 114. Marketing managers must be keenly aware of —a focus on current competitors rather than latent ones—or risk becoming extinct. a. marketing myopia b. channel myopia c. promotion myopia d. competitor myopia e. consumer myopia Page: 344 115. Each marketing manager needs to be aware of the industry in which they compete. Industries can be classified according to all of the following EXCEPT . a. degree of usage of promotion b. number of sellers c. degree of product differentiation d. degree of vertical integration e. degree of globalization Pages: 344–346 116. The oil and steel industries have unique industrial structure. Which of the following industry structural types is usually associated with the oil and steel industries? a. Pure monopoly b. Monopolistic competition c. Pure competition d. Pure oligopoly e. Differentiated oligopoly Page: 344 365 Part 1: Defining Marketing and the Marketing Process 117. All of the following are considered to be exit barriers in a marketplace that must be considered by the marketing manager EXCEPT . a. emotional barriers b. high vertical integration c. government restrictions d. lack of alternative opportunities e. economies of scale Page: 345 118. According to concepts associated with the idea of a strategic group, which of the following appliance industry competitors would most aptly be described as being a member of a strategic group that has a narrow line, lower manufacturing costs, very high service, and a high relative price of its products? a. Maytag b. General Electric c. Whirlpool d. Sears e. Wal-Mart Page: 347 119. When a buyer thinks of performance running shoes, the first name that comes to mind is Nike. Which of the following variables for analyzing competition would most aptly apply given the statement above? a. Share of market b. Share of mind c. Share of heart d. Share of pocketbook e. Share of innovation Page: 348 120. Chevrolet competes with Ford, not with Ferrari. Which of the following statements (characterizations) of competitors most aptly fits with the competitive situation faced by Chevrolet when it seeks optimum selection of competitors? a. Compete with strong competitors. b. Compete with distant competitors. c. Compete with parallel competitors. d. Compete with bad competitors. e. Compete with close competitors. Pages: 348–349 366 Chapter 1: Marketing: Managing Profitable Customer Relationships 121. Apex Corporation is considered to be a market follower in its industry. About what percentage of a hypothetical market structure would be controlled by market followers such as Apex? a. 40 percent b. 30 percent c. 25 percent d. 20 percent e. 10 percent Page: 349 122. When a regional computer-manufacturing firm began to seek out customers who lived outside of its traditional market boundaries, the firm was employing which of the following new customer expansion strategies to expand its total market? a. Market-penetration strategy b. New-market segment strategy c. Geographic-expansion strategy d. Product differentiation strategy e. Latent demand strategy Page: 350 123. When your competitor delivers more for less, two strategies can be employed to meet this threat. Such a situation was recently faced by Kmart. Which of the following combinations would be most appropriate to meet the challenge thrown-down by the competitor? a. Market penetration or product innovation b. Expansion or standardization c. Adaptation or innovation d. Differentiation or execution e. Computerization or implementation Page: 351 124. Which of the following methods for defending market share should be employed by Caterpillar to hold off competitors when Caterpillar learned that many competitors were lacking in delivering on parts commitments to customers? a. Full-line strategy b. Good financing c. Zero tolerance for production errors d. Product innovation e. Superior service Page: 352 367 Part 1: Defining Marketing and the Marketing Process 125. In satisfying customer needs, a marketer discovers and produces solutions customers did not ask for but to which they enthusiastically respond. Sony is a good illustration of such a marketer. a. responsive b. anticipative c. combative d. manipulative e. creative Page: 353 126. Firms that occupy second, third, and lower ranks in an industry can adopt two postures in responding to competition. First, they can attack the leader and other competitors in an aggressive bid for further market share. Second, they can . a. play ball and not “rock the boat” (market followers) b. relinquish their own share to industry leaders (market capitulators) c. not worry about the immediate future and focus on long-term results (market maturation) d. form alliances with enemies (market organizational constriction) e. give up and quit (market abandonment) Page: 355 127. To industry leader Boeing, European Airbus is a serious market challenger that has made rapid gains in the commercial aircraft market in the last few years. Which of the following has been cited as the chief strategy being employed by Airbus in its battle with Boeing? a. Styling. b. Price discounting. c. Bribery of purchasing agents. d. An innovative new product line equipped with modern features. e. Partnerships with Boeing rivals. Page: 356 128. When Avis used the campaign theme, “We’re only second. We try harder.” to battle rival Hertz, Avis was using a market challenger strategy called . a. lower priced goods b. price discount c. product innovation d. intensive advertising promotion e. improved services Page: 359 368 Chapter 1: Marketing: Managing Profitable Customer Relationships 129. Tasteeos, Fruit Rings, and Corn Flakes sell for nearly $1 a box less than leading cereal brands. Which of the following market follower strategies is being employed by the cereal manufacturer responsive for the above market entries? a. Counterfeiter b. Cloner c. Imitator d. Adapter e. Reverse-innovator Page: 361 130. All of the following suggestions have been provided by Adam Morgan for improving small brands success in competing with larger rivals EXCEPT . a. break with your immediate past b. build a “lighthouse identity” c. assume thought leadership of the category d. create symbols of reevaluation e. deeply discount products and services Page: 360 Short Answer 131. According to information provided in Michael Porter’s model that describes segment structural attractiveness, the threat of mobility can be encountered. In which of the five forces described by Porter would such a threat occur? 132. According to information provided in Michael Porter’s model that describes segment structural attractiveness, the suppliers’ growing bargaining power is a real threat. What is considered to the best defense for such a threat? 133. According to information presented in the text, what form of pressure supplied by Wal-Mart and others forced many toy retailers into bankruptcy in the 2004 holiday season? 134. Restaurants and beauty parlors are examples of a form of competition known as monopolistic competition. Characterize monopolistic competition. 369 Part 1: Defining Marketing and the Marketing Process 135. Competitors often face entry, exit, and mobility barriers in a market space. If you were a organization facing an exit barrier in a market, what type of barrier would you be facing? 136. Assume that you are required by your manager to construct a competitor map that has three concentric rings. What would be the names (subjects) of the three concentric rings in your map? Page: 346 137. You have been asked to form a strategic group in your industry. What is a strategic group? What two important insights should emerge from your formulation process? 370 Chapter 1: Marketing: Managing Profitable Customer Relationships 138. If your company monitors competitive “share of mind,” what is your company monitoring? 139. Your marketing manager has asked you to develop a new customer strategy for your company. Additionally, you have been asked to develop, specifically, a market-penetration strategy to assist in gaining new customers. Describe a market-penetration strategy in this context. 140. Considering how Caterpillar has become dominant in the construction- equipment industry despite charging a premium price and being challenged by a number of able competitors, several policies combine to explain Caterpillar’s success. What are those policies? Pages: 352–353 141. As a brand manager, you have decided to implement a preemptive defense to meet an anticipated competitive challenge. Describe the preemptive defense. Page: 354 142. If you were asked to develop a mobile defense for your products that are likely to come under attack from a market challenger, what would you suggest? 371 Part 1: Defining Marketing and the Marketing Process broadening and market diversification. For additional information on these two strategies, see the chapter section. Page: 354 143. Consider that you have been placed in the role of being a market challenger. Where (toward which opponents) can you attack? 144. When a market challenger uses a frontal attack, what is the principle of force? 145. Your marketing manager has chosen the bypass attack as means of responding to an industry leader. Describe the ideas contained in the bypass attack. 146. There are several specialized market challenger attack strategies. One of these has been used successfully by Baskin-Robbins to establish its position in the ice- cream industry. List and briefly characterize this attack strategy. Page: 359 147. If your company was labeled as an imitator (market follower), what would your primary strategies for meeting competition be? long as the imitator does not attack the leader aggressively. Page: 361 148. As a market follower, you have been labeled as a counterfeiter. Characterize your label. 372 Chapter 1: Marketing: Managing Profitable Customer Relationships Page: 360 149. A marketing manager declares that an end-user specialist is needed by his firm. What is an end-user specialist? 150. You are about to change the emphasis of your organization from a competitor- centered company to a customer-centered one. What are the advantages to making such a switch? Chapter 12: Setting Product Strategy GENERAL CONCEPT QUESTIONS Multiple Choice 1. Marketing planning begins with the formulation of an offering to target customers’ needs or wants. a. exceed b. meet c. capture d. compete with e. comprehend Page: 372 2. The customer will judge the offering by three basis elements: , services mix and quality, and price. a. performance b. salespeople c. price d. product features and quality e. none of the above Page: 372 373 Part 1: Defining Marketing and the Marketing Process 3. The components of the market offering include all of the following EXCEPT . a. product feature b. product quality c. reputation of firm d. services mix and quality e. value-based pricing Page: 372 4. In planning its market offering, the marketer needs to address five product levels. These levels include all of the following EXCEPT . a. potential product b. augmented product c. core benefit d. basic product e. product usage/purpose Page: 372 5. The five product levels constitute a . At each level more customer value is added. a. customer augmented product b. customer consumption system c. customer value hierarchy d. customer perceived value e. customer hierarchy Page: 372 : 6. The way the user performs the tasks of getting and using products and related services is the user’s total . a. consumption system b. consumable system c. consistent use system d. augmented system e. none of the above Page 372 7. Marketers have traditionally classified products on the basis of characteristics: , tangibility, and use. a. customer value hierarchy b. expected c. augmented d. durability e. none of the above Page: 373 8. When companies search for new ways to satisfy customers and distinguish their offering from others, they look at the product, which encompasses all the possible augmentations and transformations of the product. a. consumption system 374 Chapter 1: Marketing: Managing Profitable Customer Relationships b. expected c. potential d. augmented e. basic Page: 373 9. The vast array of goods consumers buy can be classified on the basis of shopping habits. We can distinguish among convenience, , specialty, and unsought goods. a. “must haves” b. impulse c. shopping d. business e. functional Page: 374 10. The consumer usually purchases frequently, immediately, and with a minimum of effort. a. specialty goods b. shopping goods c. “must haves” goods d. personal goods e. convenience goods Page: 374 11. are similar in quality but different enough in price to justify shopping comparisons. a. Emergency goods b. Homogeneous shopping goods c. Heterogeneous shopping goods d. Specialty goods e. None of the above Page: 374 12. Examples of products such as insurance, cemetery plots, and smoke detectors, are examples of that are products that the consumer does not know about or does not normally think of buying. a. specialty goods b. unsought goods c. heterogeneous shopping goods d. homogeneous shopping goods e. none of the above Page: 374 13. Industrial-goods can be classified in terms of how they enter the production process and their relative costliness. We can distinguish three groups of industrial goods: , capital items, and suppliers and business services. a. service components b. sub-assemblies c. pieces and parts d. specialty goods 375 Part 1: Defining Marketing and the Marketing Process d. materials and parts Pages: 374-–375 14. Materials and parts are goods that enter the manufacturer’s product completely. They fall into two classes: , and natural products. a. component parts b. raw materials c. farm products d. component materials e. none of the above Page: 374 15. Capital items are long-lasting goods that facilitate developing or managing the finished product. They include two groups: installations and . a. natural products b. component materials c. operating supplies d. equipment e. none of the above Page: 375 16. Supplies and business services are short-term goods and services that facilitate or managing the finished product. a. inspecting b. developing c. building d. creating e. none of the above Page: 375 17. Many products can be differentiated in terms of its ,—size, shape, or physical structure. a. form b. performance quality c. conformance quality d. reliability e. design Page: 376 18. Most products can be offered with varying that supplement its basic function. a. reliability b. conformance qualities c. features d. forms e. none of the above Page: 376 19. is the level at which the product’s primary characteristics operate. a. Design b. Conformance quality 376 Chapter 1: Marketing: Managing Profitable Customer Relationships b. Reparability c. Performance quality d. None of the above Page: 376 20. describes the product’s look and feel to the buyer; it has an advantage of creating distinctiveness that is/might be difficult to copy. a. Design b. Style c. Durability d. Conformance e. none of the above Page: 377 21. In increasingly fast-paced markets, prices, and technology are not enough. is the factor that will often give a company its competitive edge and is defined as the totality of features that affect how a product looks and functions in terms of customer requirements. a. Services b. Performance c. Reliability d. Style e. Design Page: 377 22. When the physical product cannot be easily differentiated, the key to competitive success may lie in adding valued services and improving their quality. The main service differentiators are ordering ease, delivery, installation, , customer consulting, maintenance, and repair. a. customer limiting b. customer orders c. niche marketing d. customer training e. customer marketing Page: 378 23. Manufacturers, service providers, and retailers seek new designs to create differentiation and establish a more complete connection with consumers. recognize the emotional power of design and the importance to consumers of how things look and feel. a. Holistic marketers b. Savvy marketers c. Key marketers d. Integrated marketers e. None of the above Page: 379 377 Part 1: Defining Marketing and the Marketing Process 24. Delivery refers to how well the product or service is delivered to the customer. It includes, speed, , and care attending the delivery process. a. length of time for delivery b. type of delivery services c. attributes d. completeness e. accuracy Page: 378 25. refers to the training the customer’s employees to use the vendor’s equipment properly and efficiently. a. Customer training b. Internal marketing c. Client marketing d. Customer relationships e. Technical training Page: 379 26. refers to data, information systems, and advice services that the seller offers to their buyers. a. Sales force relationships b. Customer relationships c. Internal marketing d. Customer training e. Customer consulting Page: 380 27. A product hierarchy stretches from basic needs to particular items that satisfy those needs. We can identify six levels of a product’s hierarchy to include all of the following EXCEPT . a. need family b. product family c. product class d. product line e. extended family Pages: 380–381 28. A is defined as a distinct unit within a brand or product line distinguishable by size, price, appearance, or some other attribute. a. stock keeping unit (SKU) b. UPC (uniform product code) c. stock unit (SU) d. product type e. none of the above Page: 381 29. A is the set of all products and items a particular seller offers for sale. a. product line 378 Chapter 1: Marketing: Managing Profitable Customer Relationships b. product mix c. family of products d. product system e. product class Page: 381 30. The of the product mix refers to how closely related the various product lines are in end use, production requirements, distribution channels, or some other way. a. consistency b. depth c. width d. length e. composition Page: 381 31. In offering a product line, companies normally develop a and modules that can be added to meet different customer requirements. a. convenience item b. “best selling” item c. staple item d. product e. basic platform Page: 382 32. A company can classify its products into four types that yield different gross margins, depending upon sales volume and promotional costs. In the case of personal computers, the four classifications include all EXCEPT . a. core product b. shopping goods c. staples d. specialties e. convenience items Page: 382 33. The main point in segmenting products into different classes is that companies should recognize that these items in the potential for being priced higher or advertised more as ways to increase sales, margins, or both. a. differ b. are more elastic c. are less elastic d. respond to advertising differently e. none of the above Page: 383 34. A benefit of product mapping is that it identifies . a. market matrixes b. target markets c. market segments d. consumers e. none of the above 379 Part 1: Defining Marketing and the Marketing Process Page: 383 35. Product-line analysis provides information for two key decision areas—product- line length and . a. product-length new items b. product-mix pricing c. product pricing d. popular pricing e. none of the above Page: 384 36. occurs when a company lengthens its product line beyond its current range. a. Market reach b. Product reach c. Product adaptations d. Line shrinking e. Line stretching Page: 384 37. When a company positioned in the “middle” market may want to introduce a lower-priced product line this is an example of . a. product-line length b. up-market stretch c. down-market stretch d. maintenance e. none of the above Page: 384 38. Companies that wish to enter the high end of the market can introduce products that cater to that market. This is an example of . a. down-market stretch b. up-market stretch c. maintenance d. product-line length e. none of the above Page: 385 39. A product line can also be lengthened by adding more items within the present range. There are several motives for line filling: , trying to satisfy dealers who complain about lost sales because of missing items in the line, trying to utilize excess capacity, and others. a. responding to senior management wishes b. responding to consumer wishes c. reaching for incremental profits d. reaching for incremental capacity e. responding to sales force demands Page: 386 380 Chapter 1: Marketing: Managing Profitable Customer Relationships 40. If line filling is overdone it could result in a. sales paralysis b. manufacturing inefficiencies c. self-cannibalization d. self-sacrifice e. none of the above and customer confusion. Page: 386 41. Price-setting logic must be modified when the product is part of a product mix. In that case, the firm searches for a set of prices that mix. a. is ineffective on total b. has no effect on total c. maximizes d. minimizes e. capitalizes upon profits on the total Page: 387 42. A company with many products must ensure that each of its products possess a with the consumer. a. status b. niche c. noticeable difference d. just-noticeable difference e. none of the above Page: 386 43. With regards to product-line pricing, companies normally develop product lines rather than single products and introduce price steps. The seller’s task is to establish quality differences between these price steps. a. imaginary b. actual c. perceived d. monetary e. none of the above Pages: 387-388 44. Some service firms often engage in , consisting of a fixed fee plus a variable usage fee. a. pure bundling b. pure pricing c. mixed pricing d. captive pricing e. two-part pricing Page: 389 45. In the seller offers goods both individually and in bundles and often charges less for the “bundle” than for the individual products. a. pirating pricing b. captive pricing 381 Part 1: Defining Marketing and the Marketing Process c. two-part pricing d. pure bundling e. mixed bundling Page: 389 46. Products are often combined with other products (from other companies or from other divisions) and this is called . a. “in-house” branding b. two-part branding c. co-branding d. co-marketing e. cooperative advertising Page: 390 47. The main advantage of co-branding is that a product may be convincingly positioned by virtue of the involved. Co-branding can generate greater sales from the existing target market as well as open additional opportunities with new consumers and channels. a. branding synergy b. increased advertising dollars c. multiple brands d. bundled package e. none of the above Page: 390 382 Chapter 1: Marketing: Managing Profitable Customer Relationships 48. The potential disadvantages of co-branding are the risks and lack of control from becoming aligned with another brand in the consumers mind. Consumer about the level of involvement and commitment with co-brands are likely to be high, so unsatisfactory performance could have negative repercussions for the brands involved. a. expectations b. primary service features c. values d. perceptions e. pricing Page: 390 49. is a special case of co-branding involving creating brand equity for materials, components, or parts that are necessarily contained within other branded products. a. Component branding b. Ingredient branding c. Advertising branding d. Sales branding e. None of the above Page: 391 50. We define packaging as all the activities of designing and producing the container for a product. This includes up to three levels of material: primary package, secondary package, and . a. retailer package b. design package c. shipping package d. consumer package e. none of the above Page: 393 51. Various factors have contributed to the growing use of packaging as a marketing tool and include all of the following EXCEPT . a. self-service b. consumer affluence c. consumer influence d. company and brand images e. innovational opportunities Page: 393 383 Part 1: Defining Marketing and the Marketing Process 52. To achieve the marketing objectives for the brand and satisfy the desires of consumers, the and functional components of packaging must be chosen correctly. a. characters b. logo c. aesthetics d. brand name e. colors Page: 394 53. After packaging is designed, it must be tested. These tests include all of the following EXCEPT . a. stress testing b. consumer testing c. engineering tests d. dealers testing e. visual testing Page: 394 54. A label performs several functions for a product. These include all of the following EXCEPT . a. grades b. promotes c. describes d. classifies e. identifies Page: 394 55. The passed by Congress in 1967, sets mandatory labeling requirements on packaging. a. Federal Trade Commission Act b. Fair Trade Act c. Fair Packaging and Labeling Act d. Food and Drug Administration Act e. none of the above Page: 395 56. are formal statements of expected product performance by the manufacturer. a. Insurance b. Warranties c. Guarantees d. Reputation e. Marketing statements Page: 395 57. Many sellers offer either general or specific guarantees. Guarantees reduce the buyer’s risk. a. actual b. perceived 384 Chapter 1: Marketing: Managing Profitable Customer Relationships c. real d. implied e. stated Page: 396 58. Guarantees are most effective in two situations. The first is when the company or products are not well known and the second is when the product’s quality is to competition. a. not known b. different c. inferior d. equivalent e. superior Page: 396 59. In today’s rapidly changing product markets, modernization of the product line is continuous. Companies plan improvements to encourage customer migration to . a. higher markup products b. higher margin items c. lower-price, lower-value d. high-priced, high-valued e. none of the above Page: 386 60. Buyers expect products to have a high , which is the degree to which all the produced units are identical and meet the promised specifications. a. durability b. reliability c. conformance quality d. form e. performance quality Page: 377 385 Part 1: Defining Marketing and the Marketing Process True/False 61. Product is the key element in the market offering. Answer: True Page: 371 62. Marketing planning ends with the formulation of an offering to meet the target customers’ needs and wants. Answer: False Page: 372 63. A product is anything that can be offered to a market to satisfy a want or need. Answer: True Page: 372 64. In planning its market offering, the marketer needs to address five product levels each of which reduces customer value. Answer: False Page: 372 65. The customer value hierarchy consists of the basic product, core benefit, expected product, augmented product, and the consumption system. Answer: False Page: 372 66. Marketers have traditionally classified products on the basis of characteristics such as durability, tangibility, and use. Answer: True Page: 373 67. The vast array of goods consumers buy can be classified on the basis of needs. Answer: False Page: 374 68. Industrial goods can be classified in terms of how they leave the production system. Answer: False Page: 374 69. Capital items are long-lasting goods that facilitate developing or managing the finished products. Answer: True Page: 375 70. Supplies can be classified as two kinds: maintenance and repair items and operating supplies. Answer: True Page: 375 71. To be branded, physical products must be differentiated. Answer: True Page: 376 72. Many products can be differentiated in form, features, performance quality, conformance quality, durability, reliability, reparability, and style. Answer: True Pages: 376–377 73. If the physical product cannot be easily differentiated, the key to competitive advantage lies in the pricing of the related “services” provided by the manufacturer. Answer: False Page: 378 386 Chapter 1: Marketing: Managing Profitable Customer Relationships 74. Design is now more fully integrated into the marketing management process. Answer: True Page: 379 75. Customer training and customer consulting are two areas for service differentiation that manufacturers can use with their products. Answer: True Pages: 379–380 76. The product hierarchy stretches from basic needs to particular items that satisfy those needs. Answer: True Page: 380 77. A product system is a group of diverse but related items that function in a compatible manner and includes the product mix and product assortment. Answer: False Page: 381 78. The four product-mix dimensions (length, width, depth, consistency) permit the company to expand its business. Answer: True Page: 381 79. Product-line managers need to know the sales and profits of each item in their line in order to estimate growth, sales, and profits in the future. Answer: False Page: 382 80. The product-line manager must review how the line is positioned against competitors’ lines. Answer: True Page: 383 81. Factors that influence product-line length do not include company objectives or management aspirations. Answer: False Page: 384 82. Every company’s product line covers a certain part of the total possible range of products and consumer levels. Answer: True Page: 384 83. Companies in the “middle market” should not attempt to stretch their line in both directions. Answer: False Page: 385 84. Line filling if overdone may result in self-cannibalization and increased customer loyalty. Answer: False Page: 386 85. In the rapidly changing market of today’s world, product lines must be continuously updated or modernized. Answer: True Page: 386 86. Price-setting logic must be modified when the product is part of a product mix. Answer: True Page: 387 387 Part 1: Defining Marketing and the Marketing Process 87. Companies normally develop product lines rather than a single product and introduce price steps such as a “low-,” “average-,” and “high-” priced computer system. Answer: True Pages: 387–388 88. Manufacturers of systems such as razors and ink jet printers use a system of pricing called “two-part pricing”—one price for the disposable products and another for the “hardware.” Answer: False Pages: 388–389 89. A pricing system in which there is a “fixed” fee and then a variable “usage” fee is called bundling. Answer: False Page: 389 90. Pure bundling occurs when a firm offers goods both individually and in bundles. Answer: False Page: 389 91. Co-branding is when two or more well-known existing brands are combined into a joint product and/or marketed together in some fashion. Answer: True Page: 390 92. Ingredient branding can take on a form called “self-branding” in which the company advertises its own branded ingredients. Answer: True Page: 391 93. Packaging is all the activities of designing and producing the container for a product. Answer: True Page: 393 94. Packaging has been called the fifth “P” by marketers because it can be an element of product strategy. Answer: True Page: 392 95. Various factors have contributed to the growth of packaging as a “fifth P” and include self-service, consumer affluence, consumer independence, company and brand image, and innovation opportunities. Answer: False Pages: 392–393 96. Labels can identify the product and must contain legal statements that under various Federal laws cannot be misleading, false, or deceptive. Answer: True Pages: 394–395 97. Warranties must be written to be legally enforceable. Answer: True Page: 395 98. Warranties are formal statements of expected product performance by the manufacturer. Answer: True Page: 395 388 Chapter 1: Marketing: Managing Profitable Customer Relationships 99. Guarantee’s greatest contribution to a product’s success is that they decrease the buyer’s perceived risk in the purchase of the product. Answer: True Page: 396 100. Guarantees are most effective when the product is well known and/or similar in performance to other brands in the market. Answer: False Page: 396 Essay 101. In planning its market offering, the marketer must address the five product levels of the customer value hierarchy. Describe the “customer value hierarchy” and identify the five levels of product contained within. 102. The vast array of products that consumers buy can be classified on the basis of shopping habits and are broken down into four main areas. List these four main areas of consumer shopping habits and explain what elements are included within. Page: 374 103. Industrial-goods can be classified in terms of how they enter the production process and their relative costliness. Explain the three groups of industrial goods. 389 Part 1: Defining Marketing and the Marketing Process 104. When differentiated, products can then be branded. List the possible ways that physical products can be differentiated. Pages: 376–377 105. Explain the concepts of product line width, length, depth, and consistency. 106. A company’s product mix, the set of all products and items a particular seller offer for sale, is important to the company because it will allows the company product flexibility. Explain how product-mix dimensions aid company profits. 107. Product-line length is important for a company in its pursuit of profit opportunities and is composed of line stretching. Explain the concept of line stretching and the three uses for it. 108. Product-mix pricing includes a number of pricing strategies for the brand manager. List each of these strategies and briefly define each. 390 Chapter 1: Marketing: Managing Profitable Customer Relationships 109. Various factors have contributed to the increased importance of packaging as a marketing tool. List and briefly describe these events. 110. Sellers must label their products. Labels service many purposes beyond just “naming” the product. List the additional services provided by a product’s label. APPLICATION QUESTIONS Multiple Choice 111. Marketers must see themselves as benefit providers. For example, when a shopper purchases new shoes, he/she expects the shoes to cover his/her feet and allow them to walk unobstructed. This is an example of what level in the consumer value hierarchy? a. Pure tangible good b. Basic product c. Augmented product d. Potential product 391 Part 1: Defining Marketing and the Marketing Process e. Consumption system

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