Business Essentials, 12e (Ebert/Griffin)
Chapter 12 Developing and Pricing Products
1) What happens when companies extend their horizons and identify opportunities outside
existing product lines?
A) Disconnected product lines
B) Multiple product lines
C) Uniform product lines
D) Universal product lines
E) Tailored product lines
2) Which defining word or phrase below BEST captures the meaning of capital items?
A) Bulk loads
B) Directly used in the production process
C) To the consumer within a year
D) Longer lasting
E) Governmental purchase
3) When developing the marketing mix, what is the basis for any successful marketing strategy?
A) Customer needs and wants
B) Value packaging
C) Product mix offerings
D) Features and benefits
E) Offering the best product for the least amount of money
4) What are the benefits and features associated with a product called?
A) Product mix
B) Specialty package
C) Service mix
D) Convenience
E) Value package
5) Which of the following BEST describes product features?
A) All attributes and benefits of the product taken together
B) Tangible and intangible qualities built into the product
C) Intangible benefits that increase customer satisfaction
D) Speed and convenience of a buyer interaction
E) Benefits that are used directly in the conversion of a process
6) What are products that are consumed rapidly and regularly classified as?
A) Industrial goods
B) Shopping goods
C) Specialty goods
D) Convenience goods
E) Production goods
7) What type of consumer good is more expensive and therefore receives more evaluation of
alternatives before the purchase is made?
A) Convenience goods
B) Production items
C) Shopping goods
D) Expense items
E) Capital items
8) In addition to cost, how are industrial products divided into product categories?
A) What area of the organization will use them
B) Competitive nature of acquiring the item
C) Availability
D) How they will be used
E) How easily the item can be turned into a consumable good
9) What is the grouping of products available for sale by a company called?
A) Product line
B) Capital mix
C) Goods and services
D) Specialty goods
E) Product mix
10) Which of the following represents the group of products that are closely related or are sold to
the same customer group?
A) Product line
B) Specialty product
C) Product mix
D) Convenience mix
E) Production mix
11) What can a company do to offset the consequences of slow sales in a product line?
A) Limit the use of capital items.
B) Diversify the product line.
C) Add convenience goods.
D) Increase the use of shopping goods available to consumers.
E) Reclassify specialty products as convenience products.
12) A company that buys products to use in the production or creation of other goods or services
is a(n)
A) convenience buyer.
B) consumer.
C) industrial buyer.
D) capital buyer.
E) rebrander.
13) Which of the following best describes production items?
A) Goods consumed within a year by an organization
B) Goods that are specific in nature and where no substitute will be accepted
C) Goods that are consumed rapidly and regularly
D) Goods used to make other products
E) Goods consumed within a year by the buyer
14) When a consumer knows what they want to buy and is not willing to accept a substitute,
what type of consumer product is being sought?
A) Production goods
B) Shopping goods
C) Convenience goods
D) Expense goods
E) Specialty goods
15) What is the difference between a specialty good and a specialty service?
A) A specialty service is an intangible item and a specialty good is a tangible item.
B) A specialty good costs more than a specialty service.
C) A specialty service is often compared to other services before purchase.
D) A specialty good can be compared to other items using the Internet.
E) A specialty service is purchased regularly.
16) Consumers often spend a great deal of time and money doing research to purchase a specific
service. These consumer services are referred to as
A) production services.
B) specialty services.
C) convenience services.
D) industrial services.
E) shopping services.
17) A product’s features may be intangible.
18) A value package consists of an in-store advertisement that makes the product attractive and
identifies features and benefits.
19) Shopping goods are purchased more often than convenience goods.
20) A doctor’s office buys a multifunction printer. This purchase is an example of a capital item.
21) The marketing process to the consumer is significantly different than the marketing process
for the industrial buyer.
22) Consumers will often spend a great deal of time and money to find a specialty good and will
generally not accept a substitute.
23) How does a product mix differ from a product line?
24) How do expense items differ from capital items?
25) Discuss the difference between production items, expense items, and capital items.
26) Assuming a company has been gathering ideas for new products, what is the next step in the
development process?
A) Test marketing
B) Prototype development
C) Business analysis
D) Concept testing
E) Screening
27) Which of the following activities describes the development stage of commercialization?
A) Building a prototype
B) Testing the product to see if it meets performance requirements
C) Selling the product on a trial basis in limited areas
D) Beginning full-scale production and marketing
E) Testing consumer reaction to the product in limited areas
28) In which of the following ways is product development different for services than for
physical goods?
A) Instead of gathering product ideas, the company goes immediately to the testing phase.
B) Instead of screening ideas, the company tests all of them, since no prototype is needed.
C) Instead of creating a prototype, the company develops a service process design.
D) The business analysis step is not needed, since there are no production costs with services.
E) The commercialization step is gradual for services, but rapid for physical goods.
29) What is frequently the most time-consuming stage of product development?
A) Testing
B) Market analysis
C) Design
D) Speed to market
E) Product idea
30) On average, how many new product ideas are needed to generate one that reaches the
consumer market?
A) 25
B) 50
C) 75
D) 100
E) 500
31) After a new product is developed, about 9 out of 10 fail for what reason?
A) Cost
B) Minimal marketing efforts
C) Lack of significant difference
D) The product is too regional
E) Failure in FDA testing
32) How can a company establish market leadership for a product?
A) Introduce the product with a lower price than competitors.
B) Do not introduce the product until success is certain.
C) Be sure the product supports the overall goals and strategies of the organization.
D) Introduce the product before competitors.
E) Introduce a product that supports the rest of the product line.
33) Why is speed to market critical to market demand?
A) It reduces overall cost of product development.
B) It allows more time for product recalls.
C) It allows the company to conduct more concept testing.
D) It produces stronger outcomes on the business analysis process.
E) It allows the company to become entrenched in the marketplace.
34) During what step of the product development stage does the firm consider how well a
product or idea supports the firm’s objectives?
A) Screening
B) Concept testing
C) Prototype development
D) Benefits analysis
E) Product idea
35) During which step of the product development stage does a company conduct market
research on benefits and prices?
A) Screening
B) Concept testing
C) Prototype development
D) Benefits analysis
E) Product idea
36) Why do firms conduct product testing?
A) To determine potential profitability of the product
B) To allow for gradual commercialization over time
C) To ensure the prototype meets performance requirements
D) To determine how well the product fits in with the goals of the organization
E) To determine the potential mesh with the firm’s objectives
37) What is the next step in the product development process when test marketing is positive for
a product?
A) Prototype development
B) Business analysis
C) Concept testing
D) Commercialization
E) Product diversification
38) Which of the following includes the tangible and intangible features that characterize a
service?
A) Process selection
B) Service process design
C) Product life cycle
D) Benefits
E) Service value package
39) Most ideas for new products eventually reach the market.
40) Speed to market increases the chance that a new product will survive.
41) The process of product development begins with concept testing.
42) For many companies, speed to market with a product is as important as care in developing it.
43) In the screening stage of product development, companies use market research to get
consumers’ input about benefits and prices.
44) Why is new product development expensive?
45) Where do organizations get new product ideas?
46) What is involved in service process design?
47) Why is speed to market so important?
48) What is selling the rights to place a brand name on products such as t-shirts referred to as?
A) International branding
B) National branding
C) Private branding
D) Regional branding
E) Licensed branding
49) When a wholesaler or retailer develops a brand name and has the manufacturer place that
name on the product, what is that product name called?
A) National brand
B) Private brand
C) Luxury brand
D) Licensed brand
E) Manufacturer brand
50) During the product life cycle, when do sales begin to climb and the product begin to show
profit?
A) Ascending
B) Mature
C) Initial
D) Growth
E) Accelerated
51) During the product life cycle, when do sales begin to slow down even though profit levels
are high?
A) Decline
B) Maturity
C) Introduction
D) Growth
E) Promotion
52) Which of the following is least likely to increase the life of a product without involving
product changes?
A) Product extension
B) Product adaption
C) Rebranding
D) New product placement
E) Reintroduction
53) Using symbols and names to communicate the qualities of a product is a function of what?
A) Awareness
B) Reintroduction
C) Product adaptation
D) Product extension
E) Branding
54) What is one of the key benefits to successful branding?
A) Brand extension
B) Brand loyalty
C) Preferred product placement
D) Ease of licensing
E) Ease in adaptation
55) In additional to social networking and viral marketing, how do firms successfully increase
brand awareness?
A) Reintroduction
B) Globalization
C) Rebranding
D) Product placement
E) Product extensions