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Indicate whether the statement is true or false.
1. Services are highly perishable and cannot be inventoried for future use.
a. True
b. False
2. The concept of product quality is the same from consumer to consumer and from consumer markets to organizational
markets.
a. True
b. False
3. Relatively few product ideas are put into the product development stage.
a. True
b. False
4. Because services are intangible by nature, marketers should downplay the tangibles associated with a particular service
(such as facilities or employees).
a. True
b. False
5.
Goods can be defined in terms of their physical attributes, but services cannot because they are intangible.
a. True
b. False
6. Consistency of product quality means giving consumers the quality they expect every time they purchase a product.
a. True
b. False
7. Inseparability also means that customers expect a service to be provided in a certain way by a specific person.
a. True
b. False
8. The phase-out approach to product deletion exploits any strengths left in the product.
a. True
b. False
9. A brand manager is a type of product manager.
a. True
b. False
10. To manage products effectively, the product manager must be independent of other departments.
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a. True
b. False
11. The intangible nature of services often leads customers to use prices as a measuring tool for quality.
a. True
b. False
12. The phase-out approach to product deletion involves a process of continuous price increases to make as much profit as
possible before the product is finally priced out of existence.
a. True
b. False
13. There is no way to combat the supply-demand problem associated with the perishability of services.
a. True
b. False
14. A run-out approach to product deletion lets the product decline without changing the marketing strategy.
a. True
b. False
15. Functional modifications usually require that the product be redesigned.
a. True
b. False
16. State and local government regulations do not affect the pricing of services.
a. True
b. False
17. Product managers can be responsible for a single product, a product line, or several products.
a. True
b. False
18. Most products possess a certain degree of intangibility.
a. True
b. False
19. How a pair of jeans looks, regardless of the price, is an example of styling.
a. True
b. False
20. The dropping approach to product deletion generates a sales spurt just before removing the product from the market.
a. True
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b. False
21. Venture teams work outside of established organization divisions.
a. True
b. False
22. Brand and product managers operate cross-functionally.
a. True
b. False
23. Delivery, installation, financing, repair, warranties, and guarantees are all examples of product features.
a. True
b. False
24. Designing a product that customers perceive as different from competing products is an example of product
differentiation.
a. True
b. False
25. Because most services are people-based, they are susceptible to heterogeneity, or variation in demand over time.
a. True
b. False
26. Using promotional efforts that encourage the trial use of some services can be an effective way for customers to assess
the quality of the offered service.
a. True
b. False
27. Product support services are important mainly for products that are mechanical in nature.
a. True
b. False
28. Test marketing is an extension of the product screening process.
a. True
b. False
29. Quality modification of an existing product aims at changing the product’s safety, convenience, or versatility.
a. True
b. False
30. Intangible cues are used to provide customers with some assurance of service quality.
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a. True
b. False
31. Intangibility of services creates promotional challenges because it is difficult to display a service in a store and to
demonstrate the quality of a service.
a. True
b. False
32. New products are classified solely as innovations that have never been sold by any organization.
a. True
b. False
33. Line extensions are less common than other new products because line extensions are more expensive and more risky.
a. True
b. False
34. Systematic reviews of a company’s product mix aid in determining when product deletion is necessary.
a. True
b. False
35. Customers seldom rely on the price-quality associations.
a. True
b. False
36. Balancing the supply and demand of services can be done by keeping service prices the same regardless of the time of
day, week, or year.
a. True
b. False
37. There is no best approach to managing products.
a. True
b. False
38. Concept testing gives reliable feedback, but at a relatively high cost.
a. True
b. False
39. Functional modifications make an existing product more durable.
a. True
b. False
40. The major drawback in using aesthetic modifications is that their value is determined subjectively.
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a. True
b. False
41. Business analysis provides a tentative sketch of a product’s profitability.
a. True
b. False
42. Firms marketing a quality product that generates strong sales can afford to keep expenses down by eliminating new-
product development.
a. True
b. False
43. Sales personnel are an external source for new product ideas.
a. True
b. False
44. The majority of new-product projects initiated by major companies reach the commercialization stage.
a. True
b. False
45. A venture team has the authority to execute plans for the development of products.
a. True
b. False
46. The product development stage determines the technical feasibility of producing the new product.
a. True
b. False
47. Warranties and customer training are examples of customer services.
a. True
b. False
48. If you buy McDonald’s French fries in Fort Collins, Colorado, and later buy McDonald’s French fries in College
Station, Texas, you expect them to be of the same quality. This is referred to consistency of quality.
a. True
b. False
49. Product managers are most useful in the development of new products.
a. True
b. False
50. The education a student gets is an example of the intangibility of services.
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a. True
b. False
51. An important question in the business analysis stage of new-product development is, “Is demand strong enough to
justify entering the market and will this demand endure?”
a. True
b. False
52. A hairstylist that gives good haircuts in the morning but tends to give haircuts of lesser quality in the afternoon is
suffering from the challenges associated with intangibility.
a. True
b. False
53. Automobile makers rely heavily on aesthetic modifications.
a. True
b. False
54. Demand-based pricing means lower prices during times of lower demand and higher prices during times of higher
demand.
a. True
b. False
55. When a customer takes part in the production of a service, other customers can affect the outcome of the service.
a. True
b. False
56. Concept testing presents a small sample of potential buyers with a trial version of the new product to determine their
initial reactions.
a. True
b. False
57. Functional modifications help an organization achieve and maintain a progressive image.
a. True
b. False
58. During the commercialization phase of new-product development, plans for full-scale manufacturing and marketing
are refined and settled.
a. True
b. False
59. The decision to drop a product should always be a unanimous decision of the management team.
a. True
b. False
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60. Product design is the process of creating and designing products so that consumers perceive them as different from
competing products.
a. True
b. False
61. Supplementary services are the basic services that a customer expects to receive.
a. True
b. False
62.
Client-based relationships are interactions that result in satisfied customers who repeatedly use a service over time.
a. True
b. False
63. Venture team members usually come from the same functional areas within the firm.
a. True
b. False
64. Time spent in test marketing can benefit a firm’s competitors.
a. True
b. False
65. New-product development does not include planning for advertising.
a. True
b. False
66. The business analysis stage of new-product development explores how well the new product fits in with the firm’s
existing product mix.
a. True
b. False
67. An advantage of heterogeneity is that services can be customized.
a. True
b. False
68. The run-out approach to product deletion is used for technologically obsolete products.
a. True
b. False
69. Service providers offering discounts to current customers who refer new customers to them are using existing
customers as a part of their service promotion strategies.
a. True
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b. False
70. Quality modifications never seek to reduce product quality.
a. True
b. False
71. Training of employees is less important for high-contact services than it is for low-contact services.
a. True
b. False
72. Demand-based pricing relies on information concerning peak demand times and off-peak demand times.
a. True
b. False
73. Both production and consumption of services occur at the same time.
a. True
b. False
74. The overall characteristics of a product that allow it to perform as expected in satisfying customer needs is called
product quality.
a. True
b. False
75. Test marketing is a sample launching of the entire marketing mix.
a. True
b. False
76. Test marketing should be conducted when a product has been given a low probability of success.
a. True
b. False
77. The goal of building client-based relationships is to satisfy customers so well that they become very loyal and would
be unlikely to switch to competitors.
a. True
b. False
78. Many of the so-called new products that are launched each year are in fact line extensions.
a. True
b. False
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79. Advertisements for services use tangible cues to help customers understand the intangible attributes associated with a
particular service.
a. True
b. False
80. High-contact services are very expensive to deliver because they are equipment-intensive.
a. True
b. False
81. Because of service perishability, it is difficult to price services in a manner that smooths fluctuations in demand.
a. True
b. False
82. Distribution of services is often more direct, even if the customer must go to the service provider’s facilities.
a. True
b. False
83. The ability to customize services to match the specific needs of individual customers is an advantage to service
marketers and may lead to standardized packages.
a. True
b. False
84. Test marketing is used by companies of all sizes, primarily because of the perceived risk of product failure on the open
market and the associated consequences.
a. True
b. False
85. Because of inseparability of the consumption and production of services, customers are often present when a service is
produced.
a. True
b. False
86. Government has no control over service prices charged.
a. True
b. False
87. Estimates of sales are an important component of business analysis.
a. True
b. False
Indicate the answer choice that best completes the statement or answers the question.
88. Which of the following is the stage of the new-product development process where customers are first exposed to the
new product idea?
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a. Screening
b. Concept testing
c. Business analysis
d. Product development
e. Test marketing
89. If Jason Carter, product manager at SeaRay Boats, became aware that Bass Boats, Inc., was in the process of test
marketing a new line of shallow-water fishing boats in the southeast region, he might want to engage in ____ to reduce
the validity of the other firm’s results.
a. testing interference
b. leadership pricing
c. jamming
d. test marketing
e. stress marketing
90. A group of managers has been assigned the task of developing a new product. They are now in the process of
assessing several ideas to determine whether they are consistent with the firm’s overall objectives and resources. The
managers are at what stage of the new-product development process?
a. Business analysis
b. Product testing
c. Idea generation
d. Commercialization
e. Screening
91. Demand-based pricing most closely relates to the ____ of services
a. perishability
b. intangibility
c. heterogeneity
d. customer contact aspect
e. inseparability
92. As head of sales and marketing for your company, one of your key responsibilities is to regularly review the
company’s product mix to determine if any products should be deleted. You are meeting with your marketing team to
decide the fate of Product A. The following comments about Product A are made by different members of the team:
• “There are no strengths left in the product.”
• “The losses on the product are huge and they keep growing.”
Which of the following actions should you take with Product A?
a. It should be immediately dropped from the product mix.
b. It should be phased-out from the product mix.
c. It should be run-out from the product mix.
d. Aesthetic modifications to the product should be considered.
e. Functional modifications to the product should be considered.
93. Just Relax Massage Therapists have a large customer base although they do very little advertising. Their promotion
strategy relies mostly on
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a. news stories.
b. a webpage.
c. word of mouth.
d. newspaper ads.
e. television ads.
94. Marcellis is a product manager for a major electronics company. His current project is the development and
introduction of a new smartphone. Since there are a number of smartphones currently out on the market, Marcellis is
concerned about product failure. Currently, Marcellis and his team are in the screening phase of the new product
development process. Has his team already passed the phase which is best able to measure the product failure concern?
a. Yes, the best phase is the idea screening phase.
b. Yes, the best phase is the concept testing phase.
c. No, the best phase is the business analysis phase.
d. Yes, the best phase is the test marketing phase.
e. No, the best phase is the test marketing phase
95. Troy is a service provider for a low-contact type of service. Which of the services below is Troy most likely to
provide?
a. Childcare
b. Website design
c. Health care
d. Auto detailing
e. Personal trainer
96. One way service businesses communicate a higher level of service quality to their customers is by having their
employees be clean, sharp looking, and dressed in appropriate uniforms. This is a way to address the ____ characteristic
of services.
a. intangibility
b. perishability
c. tangibility
d. inseparability
e. heterogeneity
97. When determining how a product is conceived, planned, produced, and even its physical appearance and its specific
characteristics, one is really talking about the product’s
a. positioning.
b. level and consistency of quality.
c. ability to meet customer service needs.
d. design, styling, and level of quality.
e. design, styling, and features.
98. If the manufacturer of Cool Whip were to introduce a chocolate-flavored Cool Whip and still continue to produce all
of its other Cool Whip products, this would be an example of
a. a brand extension.
b. line extension.
c. functional modification.
d. quality modification.
e. a new-to-the-world product.
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99. Marketers at Starbucks have generated several ideas for new food products. Management has assessed whether these
ideas are consistent with Starbucks’ objectives and resources. Several product ideas were dropped after this analysis. The
next stage of development for the remaining product ideas is
a. product development.
b. idea screening.
c. concept testing.
d. business analysis.
e. test marketing.
100. Which of the following is the best definition of product features?
a. The things a product does that provide benefits to the customer
b. Mechanical efforts or activities a company provides that add value to a product
c. Specific design characteristics that allow a product to perform certain tasks
d. How a product is conceived, planned, and produced with the necessary functions
e. The physical appearance of a product
101. ______________ refers to how a product is conceived, planned and produced.
a. Product differentiation
b. Level of quality
c. Product positioning
d. Product features
e. Product design
102. Service marketers make promises to customers, suggesting that the customer place some degree of trust in the service
provider. In this way, service marketers are trying to address the challenge of the service characteristic of
a. perishability.
b. heterogeneity.
c. inseparability.
d. intangibility.
e. customer contact.
103. The test-marketing stage
a. is an extension of the screening stage.
b. should come immediately after business analysis.
c. ensures that the product will not fail.
d. is a sample launching of the entire marketing mix.
e. prevents competitors from copying the product.
104. Marketers of a particular brand of ice cream have decided to delete their line of ice cream bars. They will do so by
letting the product decline and not change the current marketing strategy. This method of deletion is called
a. business analysis.
b. immediate drop.
c. screening.
d. phase-out.
e. run-out.
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105. Victor thinks that a Lexus coupe is a quality vehicle, yet compared to a Mercedes Benz, he feels the quality of a
Lexus is not as high. This demonstrates that the dimension of ____ is relative or difficult to describe without a basis of
comparison.
a. consistency of quality
b. level of quality
c. differentiation
d. product features
e. product positioning
106. What are the three primary ways that marketers deliver services?
a. Over the phone, online, or in-person
b. Continuously, periodically, or on demand
c. At the customer’s home, in-person, or by telecommunications
d. Through service centers, delivery vehicles, or the mail
e. Service facilities, customer’s home, or from a distance
107. To differentiate their products, companies sometimes emphasize the product support services that they offer. This is
especially true when
a. the company’s prices are higher than the competition’s.
b. the company introduces a new product.
c. consumers are willing to pay for product support services.
d. consumers perceive all products in a market to have essentially the same quality, design, and features.
e. the quality of the company’s products is inferior to the quality of competing products.
108. If Best Western bundles its rooms with services such as free local phone calls, cable television, wireless Internet
access, and complimentary breakfast, these services are known as ____ services.
a. core
b. supplementary
c. bundled
d. business
e. complimentary
109. A ____ is responsible for a product, product line, or several distinct products in an interrelated group within an
organization.
a. product marketer
b. brand manager
c. market manager
d. product manager
e. line manager
110. Prudential Insurance uses “the rock” symbol to communicate stability and security to customers. This is Prudential’s
attempt to help customers better understand its services by
a. emphasizing tangible cues in promoting the service.
b. using word association.
c. personalizing the selling of the service.
d. utilizing publicity techniques to enhance the service.
e. distributing the service directly through television.
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111. Changes that affect a product’s versatility, effectiveness, convenience, or safety are called ____ modifications.
a. functional
b. formal
c. aesthetic
d. quality
e. package
112. If Splenda decides its “Splenda with Vitamins” is not reaching profit expectations and simply allows the product to
decline without any change in marketing strategy, it is using a(n) ____ deletion strategy.
a. run-out
b. immediate drop
c. slow-down
d. phase-out
e. drop-down
113. An US Airways flight from Dallas to Houston was full, and the tickets were more expensive than the almost-empty
US Airways flight from Chicago to Phoenix. This is an example of what kind of service pricing?
a. Bundled
b. Demand-based
c. Supply-based
d. Upfront
e. Customer-based
114. Which of the following service characteristics results in variability of service quality yet provides the opportunity for
customizing services to match the specific needs of individual customers?
a. Homogeneity
b. Perishability
c. Heterogeneity
d. Intangibility
e. Inseparability
115. Many services base their success on building a group of satisfied customers who use their services on a regular basis
over long periods of time. This critical component of success is referred to as
a. partnerships.
b. repeated customer contact.
c. inseparable clientele.
d. long-term customers.
e. client-based relationships.
116. The fact the services cannot be inventoried and then sold at a later date is called
a. intangibility.
b. heterogeneity.
c. inseparability.
d. perishability.
e. nonstorability.
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117. Many cellular phone plans contain a certain number of anytime minutes and then either significantly more or even
unlimited night and weekend minutes. This is an example of
a. time-based pricing.
b. off-peak demand.
c. demand-based pricing.
d. time dependence pricing.
e. bundled costing.
118. Personal trainers cannot complete their work without their clients present because of the ____ feature of services.
a. perishability
b. intangibility
c. inseparability
d. heterogeneity
e. tangibility
119. Lowry Lawn Supplies manufactures lawn mowers and other lawn care products. Their latest lawn mower
comes with blades that incorporate new technology that allows them to last five times longer than typical
blades. The lawn mower also includes a comfort grip that is easier to hold and an updated style available in a
variety of colors. Lowry Lawn Supplies is most likely differentiating itself through _____ with its blades and
through _____ with its handle and styling.
a. durability; style
b. quality; design
c. design; attractiveness
d. customer focus; design
e. quality; comfort
120. A complex product development process, including an extensive business analysis to determine the possibility of
success, are hallmarks of a
a. genuinely new product.
b. radically new product.
c. new product failure.
d. controlled new product.
e. market share advance.
Scenario 11.3
Use the following to answer the questions.
The YMCA in mid-town Atlanta has recently upgraded its facilities, including building a new Olympic-sized swimming
pool and children’s playground. All locations of the Atlanta “Y” are open from 6:00 am until 11:00 pm, 360 days a year.
The children’s playground is accessible for members only, and is a fenced and secured area. During the weekdays,
children under the age of 12 can engage in supervised activities at the playground, for no extra fee. Additionally, there are
swimming classes for children of all ages, which is also covered by the monthly membership fee. The swimming pool has
been very popular with the professionals who stop by for a swimming workout before or after work.
Many of the YMCA locations are very busy all day, however, the midtown “Y” is busier during the early morning and
early evenings. At a recent meeting, Maya Sinclair, its manager, shared her concerns about getting more people into the
“Y” at other times of the day. She asked for ideas from her staff about how to do this. She also said that the city of Atlanta
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had reduced the “Y”‘s funding for the next year by 20%. This would cause a need for the “Y” to either gain additional
members or charge more per member for the annual fee.
121. Refer to Scenario 11.3. The fact that the “Y” is open from 6:00 am until 11:00 pm refers to the ____ element of its
marketing mix.
a. promotional
b. product
c. price
d. distribution
e. service
122. ____ and ____ are important characteristics of quality for consumer markets, and ____ and ____ are important
characteristics of quality for business markets.
a. Reliability/ease of use; technical suitability/ease of repair
b. Technical suitability/reasonable price; trusted brand name/ease of repair
c. Durability/technical suitability; company reputation/ease of repair
d. Ease of maintenance/durability; company reputation/technical suitability
e. Trusted brand name/ease of repair; reliability/company reputation
123. Compared to goods marketers, services providers are more likely to promote performance documentation,
availability, guarantees, and
a. distribution.
b. tangible elements.
c. management expectations.
d. price.
e. customer expectations.
124. A sign in a doctor’s office waiting room says “Please be courteous of the others waiting with you.” The doctor’s
office is trying to positively influence the ____ aspect of services.
a. tangibility
b. perishability
c. inseparability
d. customer contact
e. heterogeneity
125. In product modification, three conditions must be met to improve a firm’s product mix: the product must be
modifiable, customers must be able to perceive that a modification has been made, and
a. modification should make the product more consistent with customers’ desires.
b. competing companies should not be aware of planned product modifications.
c. modification should change customers’ desires to provide greater satisfaction.
d. management must perceive the modification as a reasonable and necessary action.
e. production costs and materials needed should be limited.
126. When service companies change high-contact services into low-contact services, the
a. service becomes more expensive to deliver.
b. quality of the service declines.
c. service becomes less personalized.
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d. time required to deliver the service increases.
e. service becomes less standardized.
127. The overall characteristics of a product that allow it to perform as expected in satisfying customer needs is
a. quality.
b. consistency.
c. durability.
d. functionality.
e. design.
Scenario 11.4
Use the following to answer the questions.
Kaycee Petit needed to find a new company to prepare her tax return this year. Kaycee looked in the yellow pages of the
phone book, and went on the Internet to find information about any tax preparers in the area. She found the names and
numbers of several accountants, as well as the popular HR Block and Jackson Hewitt. Since Kaycee had a somewhat
complicated financial situation, she decided on using an accountant rather than the two popular companies. Kaycee found
the websites of three of the accountants, but the other two were not on the Internet. She visited the offices of the three
accounts who had websites. The first office was in a somewhat “seedy” part of town, but had a nice interior and a
receptionist. The second office was in a nicer part of town, but did not have any employees other than the accountant, and
had old furniture and old carpet. The third office was all around in better condition and Kaycee felt better about its
accountant, so she decided on him.
128. Refer to Scenario 11.4. The accountant who Kaycee chose to prepare her taxes will most likely require her to
schedule an appointment due to the ____ characteristic of the service. If Kaycee schedules an appointment during the
month of February, the accountant will most likely use ____ when charging for the service.
a. inseparability; time-based pricing
b. inseparability; off-peak demand pricing
c. perishability; bundled pricing
d. perishability; demand-based pricing
e. intangibility; demand-based pricing
129. What should marketers do to promote the consistency and reliability of their services most effectively?
a. Limit the number of employees in their organization
b. Train employees and develop standard procedures for dealing with customers
c. Encourage employees to be creative in solving customer issues and complaints
d. Perform as much of the service as possible before the customer arrives
e. Require employees to be shining, happy people all day long
130. Stacey and Evan are preparing budgets for a new product as well as finalizing plans for the full-scale marketing and
manufacturing of the new Genie-Vac. They are in the ____ phase of the new-product development process.
a. test marketing
b. business analysis
c. concept testing
d. product development
e. commercialization
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131. A suggested approach to deleting products, in which each product is evaluated periodically to determine its impact
on the overall effectiveness of the firm’s product mix, is called a(n)
a. evaluation study.
b. formal evaluation.
c. product inspection.
d. systematic review.
e. reassessment examination.
132. Why are line extensions more common than new products?
a. They are higher risk and more expensive.
b. They are guaranteed to succeed in the marketplace.
c. They are less expensive and lower-risk.
d. They require no market research.
e. Modifications to existing products are very easy.
133. Which of the following statements about customer contact in services marketing is false?
a. Service employees are important in creating satisfied customers.
b. High-contact services are less expensive to deliver because they are typically equipment-based.
c. The main principle of customer contact is that satisfied employees lead to satisfied customers.
d. Service companies can minimize customer dissatisfaction by changing high-contact services into low-contact
services.
e. Employee training programs are an effective way to ensure good customer contact and reduce problems.
134. Compared with other phases of the new-product development process, the largest number of new-product ideas is
rejected during the ____ phase.
a. idea generation
b. concept testing
c. business analysis
d. screening
e. test marketing
135. By installing automated check-in kiosks in some airports, airlines have increased production capacity and reduced
the number of personnel. This results in a decrease in
a. perishability.
b. intangibility.
c. customer contact.
d. inseparability.
e. customer service.
136. The phase of the new-product development process when the organization determines the technological feasibility of
producing the product at a cost that results in a reasonable selling price is
a. test marketing.
b. commercialization.
c. concept testing.
d. product development.
e. business analysis.
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137. PepsiCo has a new flavor of soft drink that it wants to test to determine reactions of probable buyers. Which of the
following test-market characteristics would be least useful to PepsiCo when testing the new soft drink?
a. There are research and audit services available.
b. Retailers would be cooperative.
c. Testing efforts would not be easily jammed by competitors.
d. Tourism is a major industry in the area.
e. The city has stable year-round sales of soft drinks.
138. If Pedigree offered you a position in which you would have total marketing responsibility for all of its canned dog
food, this position would probably hold the title of ____ manager.
a. brand
b. area
c. product
d. sales
e. marketing
139. When a theater entices customers to see movies during the daytime by offering tickets at a reduced price, it is trying
to solve the services marketing problem of
a. inseparability.
b. intangibility.
c. customer contact.
d. off-peak demand.
e. heterogeneity.
140. In an attempt to attract customers, service marketers often promise great results and satisfaction to customers, but
marketers should be careful not to
a. deliver on these promises and risk financial losses and the success of the company.
b. promise less than they can actually deliver and keep customers away.
c. make the appearance of their facilities consistent with their promises to customers.
d. promise too much and cause customer expectations beyond what they can deliver.
e. make the quality of their services too tangible in the eyes of the customer.
141. Select the true statement concerning test marketing.
a. Test marketing is simply an extension of the screening and developing stages.
b. Test marketing should be conducted after all the marketing mix variables have been finalized.
c. Test marketing is a limited introduction of the product in areas chosen to represent the intended market.
d. If the product is successful in the test market, then it is ensured of success upon total introduction.
e. Large corporations usually launch test-marketing efforts in one small area at a time.
142. The Home Depot differentiates its product offerings from its competition with stores like Sam’s, by offering delivery
and installation, financing arrangements, and repairs. The Home Depot is differentiating through
a. product ancillaries.
b. company quality.
c. customer services.
d. company features.
e. product features.
Name:
Class:
Date:
chapter 11
Page 20
143. A genuinely new product–like the iPhone once was–offers
a. lower prices than existing products.
b. at least two new product features.
c. innovative benefits to consumers.
d. better value than existing products.
e. at least two new product features at a lower price.
Scenario 11.2
Use the following to answer the questions.
Jonathan Moore, president of Polar Manufacturing Company, has just reviewed the performance reports for the previous
year and sees that there are some areas in which the company needs to improve. He specifically feels they could do a
better job in managing Polar’s product mix. Jonathan calls a meeting of all the managers responsible for each of the
product lines that Polar currently manufactures. The group decides that they need to eliminate the complete industrial
product line of ice chests, and plan to do so by letting the product decline without any changes in the marketing strategy or
product. The group also decides to delete Polar’s line of personal thermal underwear, however this product is to be
discontinued within the week due to its unprofitability. While discussing these strategies, the group has also uncovered
several customer groups for which new products could be developed. The managers decide to assemble a group of people
from all functional areas of the company and give them the responsibility for all aspects of the new-product development.
144. Refer to Scenario 11.2. Because some products are not doing well, Jonathan Moore thinks that the company should
set up a procedure to evaluate each product so that management will know when and how a product should be
discontinued. He is suggesting a
a. product-drop decision.
b. discontinuance procedure.
c. performance review.
d. closing system.
e. systematic review.
145. Christine and Donna work for a manufacturer of frozen pastries and are deciding how to delete a line of
frozen waffles. Christine favors focusing on a core market and intensifying advertising directed at that market to
try to have a temporary jump in profits. Donna, however, believes the marketing strategy should be unchanged
and the product should decline without attempting to give the line new life. Christine favors a(n) ____, while
Donna favors a(n) _____.
a. rollout; immediate drop
b. phase-out; immediate drop
c. rollout; phase-out
d. immediate drop; phase-out
e. phase-out; rollout
146. Which of the following statements is true about product support services?
a. They only include human efforts.
b. They do not impact customer satisfaction.
c. They include delivery, installation, financing and customer training.
d. They do not add product value.
e. Some marketers do not provide these to any degree.