Name:
Class:
Date:
chapter 15
Page 1
Indicate whether the statement is true or false.
1. Trademarks and service marks are legal terms indicating the exclusive right to use a brand.
a. True
b. False
2. It is important that small firms gain a competitive advantage which cannot be quickly imitated.
a. True
b. False
3. F.O.B. origin, freight collect, is a delivery term that shifts all responsibility for freight costs to the buyer.
a. True
b. False
4. If inventory needs grow with higher sales, the increase in accounts receivables will cover this cost.
a. True
b. False
5. A utility patent covers the appearance of a product and everything that is an inseparable part of the product.
a. True
b. False
6. 3PLs are considered more cost effective by many small businesses because it allows the company to focus on the
primary operations and outsource the accounting challenges to another company.
a. True
b. False
7. Strategies for goods marketing and services marketing are essentially identical.
a. True
b. False
8. Product testing is the last step in the product development process.
a. True
b. False
9. The product life cycle and competitive advantage life cycle differ in that the product life cycle reflects trends for a
specific product or service, whereas the competitive advantage life cycle is based on multiple products or services.
a. True
b. False
10. During the competitive advantage life cycle, firms can exploit a competitive advantage during the develop stage.
a. True
b. False
Name:
Class:
Date:
chapter 15
Page 2
11. A bed and breakfast inn that adds a restaurant that is open to the public is an example of unrelated product offerings.
a. True
b. False
12. Celestina Pugliese, creator of Ready Check Glo, felt her product served an overlooked market.
a. True
b. False
13. Because they have limited resources, small business need not formalize the product development process.
a. True
b. False
14. According to the Food and Drug Administration regulations, food products must have a standard nutrition label listing
the amount of calories, fat, salt, and nutrients in the product.
a. True
b. False
15. In the physical development stage of the product development process, new products are analyzed resulting in ideas
failing to show possible profitability being discarded.
a. True
b. False
16. A brand includes the verbal identification of a productas well as symbols or other means of identifying a product.
a. True
b. False
17. The three main considerations in structuring a channel of distribution are cost, coverage, and customer service.
a. True
b. False
18. Small firms develop significantly more innovations than small companies.
a. True
b. False
19. Distribution includes only the physical movement of products.
a. True
b. False
20. Distribution is essential for tangible goods, but not for intangible goods.
a. True
b. False
21. Shippers that own their own means of transport are called private carriers.
a. True
Name:
Class:
Date:
chapter 15
Page 3
b. False
22. Channel management is synonymous with the term logistics.
a. True
b. False
23. Labeling information can be limited to the minimum legal requirements as the warranty will cover the information.
a. True
b. False
24. A growth trap occurs when more cash is needed for a company faster than can be generated in profits.
a. True
b. False
25. Given the complexity of the task, entrepreneurs must use an attorney to conduct a trademark search.
a. True
b. False
26. A direct channel of distribution is one that involves only one intermediary.
a. True
b. False
27. Trade dress describes those elements of a firm’s distinctive operating image that are specifically protected under a
trademark, patent, or copyright.
a. True
b. False
28. If a firm extends a janitorial cleanser from the industrial market to reach the home market, it is following a one
product/multiple markets strategy.
a. True
b. False
29. Because growth in sales is perceived as good for business, no changes will be needed in personnel, operations, or
management style.
a. True
b. False
30. A garden center selling two types of mint has one product item in two product lines.
a. True
b. False
31. A small firm’s “special signature” is called a logo.
a. True
b. False
Name:
Class:
Date:
chapter 15
Page 4
32. Packaging has very little to do with increasing the value of the total product by creating a distinctive impression.
a. True
b. False
33. Delivery terms specify which party pays the freight costs, selects carriers, bears the risk of damage, and selects the
modes of transport.
a. True
b. False
34. Physical distribution of products includes only transportation.
a. True
b. False
35. All small firms want to grow.
a. True
b. False
36. Innovative packaging is frequently a deciding factor for consumers.
a. True
b. False
Indicate the answer choice that best completes the statement or answers the question.
37. The profit curve is the lowest in which stage of the product life cycle?
a. Decline
b. Growth
c. Introduction
d. Maturity
38. A product strategy that includes a new product that is quite different from existing products
a. can be more challenging to manage.
b. is often used by small businesses.
c. will likely determine the future direction of the firm.
d. is encouraged, as long as it represents no more than half of the firm’s product offerings.
39. Pepsico produces and distributes products under the brand names Pepsi, Quaker, Frito-Lay, and many others. This
collection of product lines within Pepsico’s ownership and control is referred to as the:
a. product depth.
b. product accumulation.
c. product line consistency.
d. product mix.
40. Since Love Languages has decided to sell its tutoring service on CDs through an online site as well as the traditional
format of personal tutors, they are relying on
Name:
Class:
Date:
chapter 15
Page 5
a. a direct channel of distribution.
b. an indirect channel of distribution.
c. a dual distribution channel.
d. a multiple-outlet distribution channel.
41. The business analysis stage of new product development is critical since
a. one to three years may pass before profits are realized.
b. it is hard to attract the 10 percent of the total market that is needed for a new product success.
c. products often fail in laboratory and marketing testing.
d. All of the above support the importance of the business analysis stage.
42. Thanks to national press, Wonderful Gifts has had 100% more orders placed than last quarter. The company could be
caught in a ______ if proper planning does not occur.
a. growth net
b. growth trap
c. profit net
d. profit trap
43. A sustainable competitive advantage is
a. rarely appreciated by the firm’s owners.
b. of little consequence to profitability.
c. an idealized position that is unachievable in reality.
d. a value-creating industry position that is likely to endure over time.
44. The distinctive operating image of a product, including features such as size, shape, color or color combinations,
texture, graphics, or even particular sales techniques, can be protected
a. by copyright.
b. by patent.
c. as trade dress.
d. as a registered concept.
45. Which statement is true about company growth?
a. Successful growth occurs on it own.
b. A high-growth firm’s need for additional financing may exceed its available resources, even though the venture is
profitable.
c. Inventory needs will increase while account receivables will decrease with growth.
d. While rapid growth may stress personnel, the increase in pay will be sufficient.
46. Products must be carefully analyzed in terms of financial considerations in the _____ stage of the product
development process.
a. business analysis
b. idea accumulation
c. product testing
d. physical product development
47. Erica has registered protection for 14 years that covers a new process she has designed. Erica owns a:
Name:
Class:
Date:
chapter 15
Page 6
a. design patent.
b. plant patent.
c. utility patent.
d. Two of the above are correct.
48. Both the physical movement of products and the establishment of intermediary relationships to guide and support the
movement of the products are included in
a. channels.
b. distribution.
c. intermediaries.
d. logistics.
49. Buzz-Buzz Express is a small firm that sells honey bees domestically. Once purchased, the bees are flown using
FedEx. Buzz-Buzz Express uses a
a. common carrier.
b. public carrier.
c. private carrier.
d. contract carrier.
50. If a small firm is to maintain its performance over time, it is essential to
a. continue to reinvent themselves.
b. extend the competitive advantage of the firm.
c. replicate the strategies that have led to success in the past.
d. retain the personnel who made the firm successful in the first place.
51. Annabelle’s company makes pottery. She would like to expand her business and is looking for ideas. What advice
would you give her?
a. Think outside the box; go into a completely different line of products.
b. Pursue innovation that customers will perceive as adding excitement to their lives.
c. Base innovative efforts on her experience.
d. Focus on products or services offered by her largest competitors.
52. Love Languages is introducing an improved version of its tutoring targeted to students who want more in-depth
assistance using a CD format. The company has decided to continue to offer their original tutoring package and aim the
new product at the original target market; therefore, they are employing a ____ product strategy.
a. multiple products/one market
b. multiple products/multiple markets
c. modified product/one market
d. modified product/multiple markets
53. Before a company’s competitive advantage moves into the decline stage, it should
a. invest resources to develop a competitive advantage.
b. continue deploying the competitive advantage as long as it can.
c. slow the decline as much as possible.
d. implement previously developed plans for the hidden curves.
Name:
Class:
Date:
chapter 15
Page 7
54. The product life cycle, as opposed to the competitive advantage life cycle,
a. helps an entrepreneur visualize the sales and profits of a product from the time it is introduced until it is no longer
on the market.
b. details when a strength can be used in the market and when not to attack a rival.
c. reflects sales trends for the company’s multiple products or services.
d. is based on the overall sales of the total product or service line.
55. Carrigan has just launched his new business. He has great plans for expansion later but for now, the most appropriate
and effective product strategy to use in this stage of his small business is the _____ product strategy.
a. one product/one market
b. one product/multiple markets
c. multiple products/one market
d. The strategy depends on the product or service.
56. Cooking for Collin, a small manufacturer of holiday cakes, sells its product through independent retailers and mail-
order marketing. Cooking for Collin is relying on
a. a direct channel of distribution.
b. an indirect channel of distribution.
c. a dual distribution channel.
d. a multiple-outlet distribution channel.
57. Arden has designed an artistic design to complement his product’s name to assist customers in identifying his
product. These are commonly as referred to as a:
a. brand.
b. trademark.
c. service mark.
d. trade dress.
58. To maintain performance, a small business must launch a new competitive advantage
a. and keep that competitive advantage alive.
b. and make adjustments to that competitive advantage over time.
c. that causes rival firms to respond.
d. before the current strategy has run its course.
59. Which statement is correct concerning the role of innovation for small businesses?
a. Fortune magazine reports that 93 percent of company founders reported that their business turned out to be
nothing like their original venture concept.
b. Studies have shown that small entrepreneurial firms produce 95 percent as many innovations per employee as
large firms.
c. According to Clayton Christensen, 60 percent of all new products end up failing or performing well below
expectations.
d. Small entrepreneurial firms produce twice as many innovations per employee as large firms.
60. Successful growth
a. happens on its own.
b. occurs only when certain factors are carefully considered and well managed.
c. should be easy if the owner has the correct management style.
Name:
Class:
Date:
chapter 15
Page 8
d. will keep most business functions the same, just larger in scope.
61. The three considerations in building a channel of distribution are
a. cost, coverage, and control.
b. cost, coverage, and compatibility.
c. coverage, control, and compatibility.
d. cost, control, and compatibility.
62. Small businesses should view distribution costs as
a. prohibitive.
b. sunk costs.
c. an investment.
d. Two of the above are true.
63. A copyright provides protection for the duration of the creator’s life, plus
a. 25 years.
b. 70 years.
c. 75 years.
d. 100 years.
64. The activities of physically moving a product is
a. channel management.
b. distribution.
c. logistics.
d. supply chain management.
65. Furniture Shine is introducing an improved version of its existing wax targeted to owners of antiques. The firm has
decided to leave the original wax in the mix aimed toward residential owners. Furniture Shine is employing a _____
product strategy.
a. multiple products/one market
b. multiple products/multiple markets
c. modified product/one market
d. modified product/multiple markets
66. Bagels Bagels Bagels, a small breakfast bagel bakery, has expanded into sandwiches for lunch using bagels. They are
now employing a _____ product strategy.
a. one product/one market
b. one product/multiple markets
c. modified product/one market
d. modified product/multiple markets
67. Beatrice is comtemplating whether to offer a warranty on her product. She should remember that warranties are
important for products:
a. that are relatively inexpensive.
b. that are frequently purchased.
c. that are relatively complex to repair.
Name:
Class:
Date:
chapter 15
Page 9
d. regardless of how they are positioned in the market.
68. Euginie has written a poem that she plans to print inside the greeting cards she will publish. Her work is automatically
protected but Euginie should include on the back of her greeting cards
a. the symbol ©.
b. the date the work was published.
c. the name of the copyright owner’s company.
d. a listing of all other copyrights held by the owner.
69. Intermediaries exist because
a. they provide more efficient means of distrubtion than the product producer.
b. they are able to reach geographic areas with much less expense.
c. they have lower risk levels since they don’t have ownership of the goods.
d. they specialize in products for specific customer needs.
70. The intermediary relationship in which ownership is transferred is
a. agents.
b. brokers.
c. merchant middlemen.
d. supply chain managers.
71. Joe has redesigned an app that helps businesses organize their taxes after a rival gained market share. The IRS and the
Society of Certified Public Accountants have said the app meets tax standards. The app would be considered a(n)
a. sustainable competitive advantage.
b. strategic alliance.
c. competitive adjustment.
d. business process reengineering.
72. A legal term indicating the exclusive right of a firm to use a brand to identify a product is a
a. copy mark.
b. trademark.
c. service mark.
d. trade dress.
73. Amazon.com is a
a. brand.
b. label.
c. logo.
d. trademark.
74. When a product mix has more product lines, it is has greater
a. breadth.
b. consistency.
c. depth.
d. lines.
Name:
Class:
Date:
chapter 15
Page 10
75. Judy is opening a small business producing high-quality paper products and has decided to place a green pine tree on
all product boxes and on the sign outside the facilities to symbolize the business. At this point, the symbol is an example
of a
a. brandmark.
b. brand name.
c. service mark.
d. trademark.
76. High performing companies
a. adjust strategies for changing customer needs before rivals.
b. downgrade capabilities as competitive advantages move into the decline stage.
c. hire people to drive new growth once the growth is identified.
d. All of the above are completed by high performing firms.
77. When Gavin sells his product to a ____, the storage function is transferred to the intermediary.
a. agents
b. brokers
c. common carriers
d. wholesalers
78. Franklin sells his product in a bricks-and-mortar store and online. Franklin is using:
a. channel integration.
b. dual distribution.
c. intermediary replication.
d. multiple distribution.
Match the term with its definition.
a. Agents/brokers
b. Common carriers
c. Contract carriers
d. Distribution
e. Dual distribution
f. Merchant middlemen
g. Patent
h. Physical distribution (logistics)
i. Plant patent
j. Private carriers
k. Supply chain management
l. Third-party logistics firm
79. The activities of distribution involved in the physical relocation of products
80. Transportation intermediaries that contract with individual shippers
81. Lines of transport owned by shippers
Name:
Class:
Date:
chapter 15
Page 11
82. A distribution system that involves more than one channel
83. A company that provides transportation and distribution services to firms that prefer to focus their efforts on their
primary operations
84. Intermediaries that do not take ownership of the goods they distribute
85. A system of management that integrates and coordinates the ways in which a firm finds the raw materials to make a
product, creates the product, delivers it to customers, and receives payment for it
86. The physical movement of products and the establishment of intermediary relationships to support such movement
87. Registered protection for any distinct, new variety of living plant
88. Transportation intermediaries available for hire to the general public
89. Intermediaries that take ownership of the goods they distribute
Match the term with its definition.
a. Channel of distribution
b. Copyright
c. Patent
d. Product
e. Product item
f. Product life cycle
g. Product line
h. Product mix
i. Product mix consistency
j. Product strategy
k. Sustainable competitive advantage
l. Warranty
90. The lowest common denominator in the product mix—the individual item
91. The similarity of product lines in a product mix
92. The system of relationships established to guide the movement of a product
93. A value-creating position that is likely to endure over time
94. The collection of a firm’s total product lines
95. A total bundle of satisfaction offered to consumers in an exchange transaction
96. The sum of related individual product items
97. The way the product component of the marketing mix is used to achieve a firm’s objectives
98. The exclusive right of a creator to reproduce, publish, perform, display, or sell his or her own works
99. A promise that a product will perform at a certain level or meet certain standards