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Chapter 14 - Developing and Pricing Goods and Services
1. When consumers calculate the value of a product, they look at the benefits and then
subtract the cost.
2. Successful businesses constantly monitor consumer wants and needs.
3. To satisfy consumers managers must learn to listen better than they do now and to adapt
constantly to changing market demands.
4. Once an organization surveys the consumer's wants and needs, has designed a group of
products to meet those needs, and begun to market them in stores, the organization is
assured of success.
5. Fast-food organizations must constantly monitor all sources of information for new
product ideas.
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6. McDonald's prides itself on offering precisely the same menu around the world so that
customers know exactly what to expect when they eat at a McDonald's.
7. Product development is a key activity in any modern business, anywhere in the world.
8. From a strategic marketing viewpoint, a total product offer includes all of the tangible
attributes of a good or service, and excludes any intangible attributes.
9. The image created by advertising is part of the total product offer of a product.
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15. In evaluating a total product offer, value enhancers such as service, guarantees,
reputation of the seller, etc. are as important to customers as the basic product.
16. A firm's product line refers to all of the different geographic markets in which it sells the
same good or service.
17. A single product line may contain several competing brands.
18. The term product line describes the combination of product mixes offered by a
manufacturer.
19.
Chapter 14 - Developing and Pricing Goods and Services
A product line is a group of products that are physically similar or are intended for a
similar market.
20. The several product lines that a company offers for sale make up that organization's
product mix.
21. While service providers offer product lines, they are unable to offer product mixes.
22. Whole grain breads, bagels, bread sticks, sandwiches, soup, and pastries are products that
would be included in the product mix of El Trovodor's Bread Company.
Feedback: Different products offered by El Trovodor's make up the company's product mix
that it offers to its customers.
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26. Miller Light Beer, Maxwell House Coffee, Jell-O brand gelatin, Kraft Mayonnaise, and
Marlboro Cigarettes, were all at one time products of the Philip Morris Company. These
products represented a part of the product line Philip Morris offered.
Feedback: A product line is a group of products that are physically similar or are intended for
a similar market. These brands were part of the Philip Morris product mix.
27. A bank's product line may include safety deposit boxes, car loans, and traveler's checks.
Feedback: These various services would comprise the bank's product mix, not its product
line. A product line is a group of products that are physically similar.
28. The concepts of product lines and product mixes apply to marketers of products and
services.
Feedback: Service providers have product lines and product mixes as well. For example, a
bank may offer a variety of services from savings accounts, automatic teller machines, and
computer banking.
29.
Chapter 14 - Developing and Pricing Goods and Services
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In order for product differentiation to be effective, real product differences must be
identified so that one product is clearly better than others.
30. Marketers use pricing, advertising, and packaging to differentiate their products from
competitors' products even when actual differences are quite small.
31. Creative product differentiation can enable a small business to increase market share.
32. The most common classification of consumer goods and services is based on producer or
manufacturer behavior in the market.
33.
Chapter 14 - Developing and Pricing Goods and Services
One common way of classifying consumer goods is based on consumer purchasing
behavior.
34. The uniqueness of convenience goods and services stimulate consumers to make an extra
effort to purchase them.
35. Convenience goods are products that the consumer wants to purchase frequently and with
a minimum of effort.
36. The characteristics of specialty goods restrict their effective sale over the Internet.
37. Unsought goods and services fail to provide the benefits consumers expect.
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53. Equipment maintenance and repair of equipment used by businesses is an industrial
support good.
54. Paper clips, stationery, and other office supplies used by businesses are types of industrial
support goods.
55. Mystic Beverages, a producer of soft drinks, wants to differentiate its products from those
of other soft drink providers. To implement this strategy successfully will require Mystic
to create tangible differences in the physical product it offers.
Feedback: Product differentiation can be based on either real or perceived differences in
products. Thus, even if Mystic soft drinks look and taste much like competing soft drinks,
Mystic could use clever advertising and distinctive packaging to create an image that stands
out.
56.
Chapter 14 - Developing and Pricing Goods and Services
A pickup truck can be classified as either a consumer good or an industrial good.
Feedback: Some goods can be either a consumer good or an industrial good, depending on
who buys them and how they are used. For example, if a construction company buys a pickup
truck, it would be an industrial good, but if a household buys the same type of truck for
personal use, it would be a consumer good.
57. Newspapers are sold daily in a wide variety of locations. This widespread distribution
suggests that newspapers are classified as convenience goods.
Feedback: Convenience goods are goods that consumers want to purchase frequently and
with little effort. Thus, convenience goods typically are offered in a wide variety of locations.
58. Unsought goods and services are purchased on impulse and provide no added value to
consumers.
Feedback: Unsought goods and services are goods that consumers are unaware of, or haven't
necessarily thought of buying, but they do provide benefits to the consumer and hence do
have value. Examples of unsought goods are car towing and emergency plumbing services.
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65. Beyonce Financial Services purchased several new personal computers and a
sophisticated color laser printer for office use. These items would be correctly classified
as accessory equipment.
Feedback: Accessory equipment refers to capital items that are not quite as expensive and do
not last quite as long as installations. Personal computers, printers, and copy machines are
common examples of accessory equipment.
66. Packaging is an important part of the total product offer.
67. One function of effective packaging is to attract the attention of consumers.
68. One function of effective packaging is to protect the goods inside during handling and
storage, as well as deter product tampering and theft.
69.
Chapter 14 - Developing and Pricing Goods and Services
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One function of effective packaging is to provide information regarding warranties,
benefits, and uses of the good inside the package.
70. More than any other component of a total product offer, technology has reduced the
importance of packaging.
71. Changes in packaging can transform the product in the minds of consumers and open
larger market opportunities.
72. While packaging innovations benefit the consumer, they have vastly increased the
workload of retailers.
73.
Chapter 14 - Developing and Pricing Goods and Services
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While the packaging of services has not yet captured the attention of businesses,
technological improvements will likely create new opportunities.
74. The exclusive goal companies expect of packaging is to protect the product from damage
in transit.
75. In recent years, the packaging of products has been given a greater role in product
promotion.
76. The trend towards self-service retailers has increased the importance of packaging.
77.
Chapter 14 - Developing and Pricing Goods and Services
As a result of increased advertising and well-trained salespeople, packaging is less
important than in the past.
Feedback: Many goods that were once sold by salespersons are now being sold in self-service
outlets, and the package has therefore been given a greater role in the promotional message.
78. Regardless of changes in packaging, the total product offer remains unchanged.
Feedback: Packaging can change a product by changing its visibility, usefulness, and/or
attractiveness.
79. While the Universal Product Code (UPC) improves efficiency at the retail check-out
counter, it has increased problems in controlling inventory.
Feedback: One purpose of packaging is to help make the product more attractive to retailers.
The Universal Product Code can help a firm trace the flow of goods from the warehouse to
the cash register.
