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147. Your company has a product that is struggling in its market. However, the product appears to have some strength left
that can be exploited. Which of the following product deletion actions would be most appropriate for the product?
a. Increase the price and implement a run–out strategy.
b. Immediately drop the product.
c. Increase the marketing for the product and gradually phase it out.
d. Reduce the price and implement a run-out strategy.
e. Increase the marketing expenditures on the product and implement a run-out strategy
148. Quality modifications are changes that relate to a product’s
a. dependability and durability.
b. effectiveness and versatility.
c. price and availability.
d. reliability and value.
e. value and durability.
149. Symbols such as the Travelers’ Financial Services umbrella are designed to help customers overcome the ____ of
services.
a. heterogeneity
b. unpredictability
c. inseparability
d. intangibility
e. perishability
150. When Jeep Wrangler produces the new year’s model vehicle, they discontinue production of last year’s. However,
when Apple brings out a new iPhone, they continue to produce the previous version for at least some period of time. Jeep
Wrangler’s new-product strategy is an example of a(an) _____ while Apple’s is an example of a(an)______.
a. product modification; quality modification
b. product modification; line extension
c. quality modification; product modification
d. functional modification; product modification
e. line extension; product modification
151. Tutors, attorneys, and consultants are most likely to price their services based on ____, while auto repair, hair stylists,
and house painters are likely to price their services based on ___.
a. functions performed; time
b. time; functions performed
c. objectives accomplished; time
d. demand; objectives accomplished
e. time; demand-based pricing.
152. Often, a new product is launched in stages during commercialization. This gradual introduction of the product is
known as
a. market development.
b. regional commercialization.
c. roll-out.
d. market extension.
e. competitive jamming.
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153. Which of the following types of product modifications inevitably tend to cause firms to reduce costs in some of the
organization?
a. Aesthetic
b. Operational
c. Benefit
d. Functional
e. Quality
154. The annual Consumer Reports magazine rating of your company’s flagship product was just released. Generally
speaking the rating was good but not great. Based on the consumer comments that were referenced in the rating, it appears
that many consumers have a negative view of the product’s convenience and safety attributes.
In order to address these consumer concerns your company should consider doing which of the following?
a. Make aesthetic modifications to the product.
b. Make line extensions to the product.
c. Make functional modifications to the product.
d. Lower the price of the product.
e. Make quality modifications to the product.
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.
155. Refer to Scenario 11.2. The decision to delete the industrial product line of ice chests is an example of deleting a
product through a(n) ____, while the decision to drop the thermal underwear line is an example of a(n) ____.
a. run-out; phase out
b. phase-out; immediate drop
c. immediate drop; run-out
d. immediate drop; phase-out
e. phase-out; run-out
156. Some services are time sensitive, meaning that a significant number of customers desire the service around the same
time. This point in time is called
a. peak demand.
b. preferred demand.
c. off-peak demand.
d. high-contact time
e. high intensity time.
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157. Which of the following is a way that a restaurant can address the issues of perishability of services?
a. Offer happy hour specials to attract customers before dinner.
b. Update the uniforms worn by employees to signal higher quality.
c. Provide training to the restaurant’s staff to better standardize service.
d. Discard excess and unused food daily.
e. Develop an updated menu featuring a wider variety of items.
158. Dropping an unprofitable product immediately is the best strategy when
a. all advertising and promotional efforts have been exhausted.
b. customers have a negative outlook on other products
c. losses are too great to prolong the product’s life.
d. the product’s performance cannot be improved.
e. there is low compatibility with the firm’s business strategies.
159. Services delivered through machinery such as computer kiosks, ATMs, and vending machines can reduce the ____
that comes from increased contact with human employees.
a. intangibility
b. perishability
c. inseparability
d. heterogeneity
e. tangibility
160. Functional modifications usually require that the product be
a. less specific.
b. limited to its functions.
c. more appealing.
d. more technical.
e. redesigned.
161. When Conair adds an electrical component that automatically shuts off its curling irons when they have been left on
for more than one hour. This improvement would best be classified as a(n)
a. product line extension.
b. quality modification.
c. aesthetic modification.
d. market extension.
e. functional modification.
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.
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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
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.
162. Refer to Scenario 11.3. The children who take swimming lessons must be in attendance at the pool during the time of
their appointment. The need for the child to be in attendance in order to receive the lesson is an example of the ____
feature of a service, while the need for them to be there at the time of their appointment, represents the ____ feature.
a. inseparability; heterogeneity
b. heterogeneity; perishability
c. inseparability; perishability
d. intangibility; perishability
e. intangibility; inseparability
163. You were just hired to manage the new product development process at a consumer products company. In your first
meeting with the CEO since being hired, she recounted to you the numerous times in the past when the company launched
products it thought would be successful. However, it later came to realize the products had a detrimental impact on the
company’s overall costs and profits mix. She wants you to revamp the company’s new product development process to
prevent this from happening in the future.
Which of the following steps in the new product development process should you overhaul in order to address the CEO’s
concerns?
a. Concept testing
b. Product development
c. Idea generation
d. Test marketing
e. Business analysis
164. Your company makes personal hygiene products for young men. Your product line includes deodorants and shaving
products. You are responsible for managing the company’s relationships with the major retailers in the western U.S.
region. In a recent meeting with a store manager you noticed young men selecting the company’s deodorant product then
moving down the aisle to select a competitor’s body wash product. As you think about it more, it makes perfect sense that
a young man buying deodorant would also be interested in a body wash product. Your company currently does not make a
body wash product.
Based on your in-store observations, which of the following product management actions would you recommend to take
advantage of this deodorant and body wash linkage?
a. a line extension
b. a quality modification
c. a functional modification
d. an aesthetic modification
e. New packaging
165. Coca-Cola has expanded to Diet Coke, Cherry Coke, and Caffeine-free Coke, to name a few. These are examples of
a. product modifications.
b. functional modifications.
c. aesthetic modifications.
d. line extensions.
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e. product lining.
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
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.
166. Refer to Scenario 11.3. Martin, one of the staff members at the YMCA, suggested that the “Y” offer discounted
memberships to senior citizens over the age of 65; however, they could only use the facility between the hours of 9:00 am
and 4:00 pm. Martin’s plan is most likely addressing the issue with ____, and relates to the ____ characteristic of services.
a. peak demand; intangibility
b. off-peak demand; perishability
c. off-peak demand; heterogeneity
d. demand-based pricing; heterogeneity
e. preferred demand; perishability
167. Any service provider that offers time-sensitive services receives most of its revenue during
a. peak demand.
b. heavy use time.
c. the off-season.
d. preferred demand.
e. customer contact time.
Scenario 11.1
Use the following to answer the questions.
Cheetos Fat-free Crunchies is a product developed through advanced technology. Cheetos engineered a technique for
making reduced-fat snacks that taste cheesier and stay fresh longer. Cheetos introduced Fat-free Crunchies in limited
markets in 2012 and began national distribution in 2013.
About 18 months later, a series of competitors’ ads was run to counter claims that Cheetos Crunchies actually contained
1.5 grams of fat, and that they contained preservatives and additives. Research showed that the taste of Cheetos Crunchies
was also perceived negatively by some people. To save the product, Cheetos reduced the remaining fat to 0 grams, took
out the preservatives, and improved the taste.
168. Refer to Scenario 11.1. In 2012, Cheetos was in which phase of new-product development?
a. Idea screening
b. Product development
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c. Test marketing
d. Business analysis
e. Idea generation
169. The following organizational approaches accomplish tasks necessary to develop and manage products: market
manager approach, product manager approach, and the ____ approach.
a. brand manager
b. functional team
c. multiproduct manager
d. special projects
e. venture team
170. As the owner of a services business, you are constantly challenged to maintain consistent quality in your services.
This heterogeneity is both a challenge and an opportunity. The opportunity arises because __________________.
a. it allows you to standardize your services
b. it allows you to customize your services to match the specific needs of individual customers
c. it allows you to be more selective in choosing your customers
d. it allows you to deliver your services for less cost
e. it leads to more satisfied customers
171. Product deletion can best be described as the process of deleting a product from the product mix when it
a. is perceived as a failure by top management.
b. is reviewed negatively by a systematic review board.
c. increases production costs and decreases profits.
d. no longer responds to promotional efforts.
e. no longer satisfies a sufficient number of customers.
172. A run-out policy of product deletion
a. lets the product decline without changing the product strategy.
b. is an immediate-drop decision.
c. exploits any strengths left in the product.
d. raises the price of the product continually to secure as much profit as possible before the product is priced out of
the market.
e. occurs when production cannot keep pace with demand because of material shortages.
173. TerraCycle is a company that takes waste and “upcycles” it into new products. Currently, TerraCycle markets a
bicycle rack to schools, parks, and cities, that is made of recycled plastic. This rack does not scratch or damage the bikes
as concrete and steel racks can, and is eco-friendly since it is made of waste material. Terracycle is differentiating its
product based on
a. intended use.
b. support services.
c. durability.
d. product features.
e. product quality.
174. The product deletion process is similar to the ____ step of the new-product development process because both
involve deciding whether the product should be in the product mix based on an assessment of sales, costs, and profits.
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a. idea generation
b. screening
c. product development
d. test marketing
e. business analysis
175. Jim is a marketing manager for Tylenol Cold and wanted to know how Tylenol Cold and other competing
products were perceived by consumers. To do this, he surveyed a sample of customers about all of the different
competitors on two dimensions and created a
a. brand grid
b. product identification chart
c. perceptual map
d. customer perception graph
e. product map
176. Donald saw an advertisement for a local gym on the television. During the ad, there were images of the
gym, its equipment, and its staff. This ad was most likely designed with the goal of
a. making the intangible aspects of the gym more tangible
b. showing that the gym’s staff was highly trained
c. depicting the gym as being a good value for its customers
d. showing how happy Donald would be as a member of the gym
e. appealing to the gym’s general publics
177. Jeff was interested in taking classes to become a certified yoga instructor. In order to earn the certification,
he found out he would need to take 200 hours of training. He would have to be present in the training classes
with a trainer for all 200 hours. The fact that he would have to attend the classes with a trainer reflects the
_____ quality of services.
a. customer contact
b. inseparability
c. intangibility
d. heterogeneity
e. perishability
178. The more ____ involved with delivering a service, the greater the degree of heterogeneity.
a. mechanical efforts
b. phone contact
c. perishability
d. tangibility
e. human labor
179. Client-based relationships are least likely to be developed by
a. appliance repairmen.
b. accountants.
c. beauticians.
d. orthodontists.
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180. Top managers at Cincinnati Microwave believe that they have a successful working prototype of their new radar
detector and plan to go directly to regional commercialization of the new product. In this instance, they are contemplating
skipping the ____ phase of the new-product development process.
a. screening
b. test marketing
c. product development
d. business analysis
e. idea generation
181. Saresh owns the Change-ezz, a salon specializing in the unique hair needs of minority populations. Recently, Saresh
has been trying to improve the quality of service received by his customers. However, he has experienced difficulty in
finding ways to standardize and control the salon’s quality of service. Saresh’s problem illustrates which of the following
unique features of service?
a. Intangibility
b. Inseparability
c. Perishability
d. Heterogeneity
e. Marketability
182. If Megan Roberts were given total marketing responsibility over Diet Cherry 7Up, she would hold the position of
____ manager.
a. product
b. sales
c. marketing
d. advertising
e. brand
183. Ideally, test marketing should follow which stage in the new-product development process?
a. Commercialization
b. Business analysis
c. Screening
d. Limited production
e. Product development
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.
184. Refer to Scenario 11.3. One of Maya’s staff suggested that they offer senior citizens a free month of membership for
every person they recommended to the “Y.” This particular form of promotion would be designed to
a. increase perceptions of quality.
b. increase positive word-of-mouth communication.
c. increase negative word-of-mouth communication.
d. increase advertising effectiveness.
e. increase the customer contact associated with the “Y.”
185. The decisions and activities intended to create and maintain a certain concept of the firm’s product, relative
to competitive brands, in customers’ minds is
a. perceptual mapping
b. repositioning
c. product deletion
d. product development
e. product positioning
186. The main characteristic of a ____ is that customers are satisfied to the point that they use a service repeatedly over a
period of time.
a. service relationship
b. professional marketer
c. high-contact service
d. heterogeneous service
e. client-based relationship
187. One disadvantage of test marketing a new product is that
a. the product is distributed on a regional basis.
b. competitors may copy the product.
c. the results give little indication of the product’s future success.
d. price, advertising, and packaging cannot be varied from market to market.
e. it might fail before it can be commercialized.
188. A service is usually offered as part of a bundled package of services with a core service and one or more ____
services.
a. basic
b. tangible
c. supplementary
d. auxiliary
e. other core
189. The major drawback to using aesthetic modifications is
a. the cost of the modifications.
b. that the value of the modification is determined subjectively.
c. the need for redesign of the product.
d. a possible decrease in market share.
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e. that there is no differentiation for the product in the market.
190. Your company is preparing to launch a new product next month. Since you are leading the launch effort, you called a
meeting of all stakeholders to discuss how the product should be positioned in the market. You acknowledge that the
product will carry a higher price than competing products, but all the independent rating agencies have concluded that the
product has superior performance characteristics relative to its competing brands.
Which of the following bases for positioning should you use for this product?
a. Avoiding competition should be the basis for positioning the product.
b. The style of the product should be the basis for positioning the product.
c. The target market for the product should be the basis for positioning the product.
d. Head–to-head competition should the basis for positioning the product.
e. The price of the product should be the basis for positioning the product.
191. Product deletion
a. tends to be an easy task for most organizations.
b. may be opposed by management.
c. involves immediate termination.
d. is a matter of indifference to customers
e. usually occurs only with convenience items.
192. Maria asks Glenda what housecleaning service she would recommend in Oakview. Glenda responds that Pristine
Cleaning is great if you can be assured that Janice will be the person assigned to your house. Glenda’s recommendation
addresses which of the following service features?
a. Heterogeneity
b. Intangibility
c. Perishability
d. Inseparability
e. Homogeneity
193. Luis Mayo is an accountant at Ralston Purina. However, he is currently working with a group to determine the
feasibility of a new brand of hot breakfast cereal. After the product is launched, Luis will return to the accounting
department. His present position can be described as a
a. product manager.
b. brand manager.
c. consulting team member.
d. member of a venture team.
e. market account manager.
194. The marketing channels for services are usually
a. complex and multifaceted.
b. characterized by two to three intermediaries.
c. dependent on the geographical location of the consumer.
d. determined by the customer.
e. direct from provider to customer.
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195. Josh Bowman, of U.S. Hospital Supply Corporation, has responsibility for managing the marketing activities for
products aimed at nursing homes and extended care facilities. Josh’s job is that of a(n)
a. product manager.
b. area manager.
c. director of operations.
d. market manager.
e. sales coordinator.
196. “Is the demand strong enough?” is a question that marketers ask during the ____ phase of new-product development.
a. screening
b. concept testing
c. business analysis
d. product development
e. test marketing
197. Carlos is speaking to his brother about the interaction he had today with one of his clients. Since he is referring to
his customer as a client, Carlos is most likely a(n)___.
a. Funeral director
b. House painter
c. Masseur
d. Dry cleaner
e. Auto repairman
198. Breakeven analysis is a tool that marketers are likely to employ during the ____ stage of the new-product
development process.
a. screening
b. concept testing
c. business analysis
d. product development
e. test marketing
Scenario 11.1
Use the following to answer the questions.
Cheetos Fat-free Crunchies is a product developed through advanced technology. Cheetos engineered a technique for
making reduced-fat snacks that taste cheesier and stay fresh longer. Cheetos introduced Fat-free Crunchies in limited
markets in 2012 and began national distribution in 2013.
About 18 months later, a series of competitors’ ads was run to counter claims that Cheetos Crunchies actually contained
1.5 grams of fat, and that they contained preservatives and additives. Research showed that the taste of Cheetos Crunchies
was also perceived negatively by some people. To save the product, Cheetos reduced the remaining fat to 0 grams, took
out the preservatives, and improved the taste.
199. Refer to Scenario 11.1. Cheetos produces several cheese snack products and is considering a new Cheetos brand of
crackers. This new Cheetos brand of crackers would most likely be an example of
a. a product modification.
b. a line extension.
c. a quality modification.
d. a functional extension.
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e. an aesthetic modification.
200. When marketers at Nabisco met with groups of young adults to identify the types of snacks that young people want,
they were engaging in which phase of new-product development?
a. Idea generation
b. Business analysis
c. Test marketing
d. Commercialization
e. Product development
201. Production and consumption of services must simultaneously occur due to the ____ characteristic of services.
a. intangibility
b. heterogeneity
c. customer contact
d. perishability
e. inseparability
202. In product modification, the first issue to consider is whether
a. existing customers can perceive that a product modification has been made.
b. the product is modifiable.
c. quality is modified.
d. modification will make the product more consistent with customers’ desires.
e. modification will provide greater satisfaction to the consumer.
203. The continuum of tangibility goes from ____ on one end to ____ on the other end.
a. service-dominant products; good-dominant products
b. pure products; pure services
c. rational products; irrational products
d. mostly service goods; mostly product goods
e. easy to see; not easy to see
204. H&R Block, a major tax preparation firm, reported having a problem with its employees being inconsistent in the
filing of returns. The firm is experiencing a problem with which of the following characteristics of the service offering?
a. Tangibility
b. Intangibility
c. Perishability
d. Inseparability
e. Heterogeneity
205. Which of the following is the best example of a high-contact service?
a. Appliance repair
b. Newspaper delivery
c. Dog training
d. Interior decorating
e. Plastic surgery
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206. Marketers begin to make decisions about labeling, packaging, branding, pricing, and promotion during
a. commercialization.
b. screening.
c. concept testing.
d. product development.
e. test marketing.
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.
207. Refer to Scenario 11.2. Polar management is currently in which stage of new product development?
a. idea generation
b. screening
c. concept testing
d. product development
e. test marketing
208. Services ____________ factors for the customer to evaluate as compared to goods.
a. have the same number of
b. have more
c. have fewer
d. more physical
e. fewer intangible
209. Client-based relationships are most likely to be developed by
a. funeral directors.
b. electricians.
c. installers.
d. doctors.
e. brick layers
210. If a company is introducing a brand into a market where it already has one or more brands, it would likely choose
which of the following basis for positioning the new product?
a. Avoiding competition positioning
b. Head–to-head competition positioning
c. Positioning based on price
d. Target market positioning
e. Positioning based on style
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211. Karla tells Jeff that she likes his team’s idea about a new three-lace running shoe but wants him to put together some
figures regarding anticipated sales, costs, and resulting profits. She is asking Jeff to proceed to which stage of the new-
product development process?
a. Idea generation
b. Business analysis
c. Commercialization
d. Test marketing
e. Screening
212. When Tyler was visiting family in Ohio, he ate a flavor of Lay’s Potato Chips that he had never seen
before. When he returned home to Virginia, he could not find the flavor in any store. Which of the following
reasons most likely explains why he could not find the flavor at home?
a. The flavor was being deleted through an immediate drop.
b. The flavor was in the screening phase of the new-product development process.
c. The chips were undergoing a repositioning.
d. He was visiting a Lay’s test market.
e. The new flavor was going through product differentiation.
213. Kate, owner of K’s Tanning Salon, looks at the day‘s appointment schedule and notices that it is completely full. She
wishes some of the empty tanning beds from earlier in the week were available on this Saturday afternoon. Kate’s
problem deals with the ____ characteristic of services.
a. credence
b. heterogeneity
c. perishability
d. search
e. inseparability
214. Hair stylists find it challenging to standardize their service because the customer must be involved in production (i.e.,
the haircut). This illustrates which of the following unique features of services?
a. Intangibility
b. Inseparability
c. Perishability
d. Heterogeneity
e. Homogeneity
215. Which of the following is the best example of a functional modification?
a. Campbell’s puts more of a higher-grade chicken in its classic chicken noodle soup.
b. A smoke alarm is modified to be more sensitive to smoke at farther distances.
c. Motorola uses a battery that allows its cell phones to charge back up more quickly.
d. The manufacturer of the primer and sealer, Kilz, introduces an odorless variety.
e. Friskies changes the ingredients in its cat food to a taste that is preferred by most cats.
216. What is the primary distinction between a line extension and a product modification?
a. A product modification results in a completely new product while a line extension is simply changing an old
product.
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b. In both cases an existing product is altered, but the alteration is more dramatic with a product modification than it
is with a line extension.
c. Line extensions are designed to better meet the needs of the existing market segment while product modifications
target entirely new segments of the market.
d. With product modifications, the original product is replaced in the product line while both the old and the new
products remain in the case of line extension.
e. Line extensions are strictly aesthetic changes to an existing product whereas product modifications consist of
changes in quality and functionality.
217. Alexandria has gone to the store to shop for a new backpack. She looks for the same brand she has always
bought in the past but notices that the backpack is now available in a variety of new colors. The backpack has
undergone a(n) _____ modification.
a. subjective
b. quality
c. aesthetic
d. functional
e. sensory
218. The members of a venture team come from
a. the marketing department.
b. a consulting firm.
c. the research and development department.
d. the production and finance departments.
e. different functional areas of an organization.
219. All of the following are major steps in developing new products except
a. test marketing.
b. evaluation of competitors’ efforts.
c. screening.
d. business analysis.
e. idea generation.
220. Kaitlynn is the owner of a local fast-food hamburger chain. She recently saw a magazine article featuring a
new machine that could cook and assemble burgers without needing employees to handle the burgers. She is
thinking of purchasing the new machine since it would help address problems associated with
a. perishability
b. intangibility
c. inseparability
d. customer contact
e. heterogeneity
221. Elena recently purchased a pair of sunglasses because she liked their quality, styling, and price. Her friend Katie
purchased an almost identical pair, except that Katie’s sunglasses had the name “Armani” imprinted on the side. Elena
probably based her purchase decision on ____, whereas Katie apparently based her decision on ____.
a. price; product quality
b. real product differences; perceived product image
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c. perceived product image; product quality
d. product value; perceived product image
e. product design; product quality
222. Schwinn has developed a new bicycle that has the strongest and lightest-weight frame of any bicycle outside of those
made for racing. In addition, Schwinn has added several new features to its bike that are attractive to individuals who
work as “bike messengers” in large, urban cities. Since no other company makes a bike that has these specific attributes,
Schwinn is creating
a. a commercialization.
b. consistency of quality.
c. level of quality.
d. product positioning.
e. product differentiation.
223. You are considering hiring an outside consultant to help you improve your services business. You believe your most
pressing issue is how to maintain consistent quality in the delivery of your services. Your customer surveys suggest you
need to work on this very important issue. Based on this, you should be looking for a consultant who has experience in
dealing with the _______________ issue related to services.
a. inseparability
b. perishability
c. heterogeneity
d. intangibility
e. customer relationship
224. Because of a service’s ____, standardization and quality are difficult to control.
a. intangibility
b. inseparability
c. homogeneity
d. heterogeneity
e. perishability
225. The ability of a product to provide the same level of quality over time is called
a. consistency.
b. longevity.
c. variability.
d. status.
e. image.
226. During the new-product development process, two of the stages designed to reject possible product ideas
that are likely to fail are _____, which analyzes a product idea to see if it matches an organization’s objectives
and resources, and _____, which involves asking potential buyers about their attitudes and initial buying
intentions regarding the product.
a. business analysis; test marketing
b. screening; concept testing
c. product development; test marketing
d. screening; test marketing
e. business analysis; concept testing
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227. The heterogeneity characteristic of services provides marketers with tremendous opportunity to
a. customize their services to meet unique individual needs.
b. hold down the cost of providing services to customers.
c. create standardized packages that will appeal to many customers.
d. offer the same service as all of their competitors.
e. develop relationship marketing with their customers.
228. Which of the following services falls closest to the middle of the tangibility continuum?
a. College education
b. Dinner at the Olive Garden
c. A new Ford Escape
d. A custom built yacht
e. A trip to Brazil
229. The necessary interaction between service provider and customer that allows a service to be delivered is called
a. customer contact.
b. service exchange.
c. marketing.
d. relationship marketing.
e. service contact.
230. Three major ways in which marketers engage in product differentiation are
a. product quality, product design and features, and product support services.
b. product quality, product support services, and packaging.
c. product support services, product design and features, and product positioning.
d. product positioning, product quality, and product management.
e. product positioning, product design and features, and product promotion.
231. Seth recently purchased a new Brunswick Billiards table for his recreation room. The next day after delivery, Seth
noticed a problem with the way one of the pockets was strung. Since it was a weekend, he didn’t expect to have it
repaired. However, when he called the store to leave a message, someone answered the phone. She gave Seth a number
where he could call a repair representative who would come straight to Seth’s house within an hour. Brunswick Billards is
most likely differentiating itself through
a. support of its level of quality.
b. product support services.
c. a help line feature.
d. product features.
e. customer requests.
232. Rick is a new product manager for a large bio-chemical firm. He is currently working on a proposal for a new
chemical solvent and knows that introducing the new product can be risky because it might fail. He also knows that ___ is
risky as well.
a. performing marketing research.
b. keeping tabs on the actions of competitors.
c. not introducing new products.
d. generating new product ideas.
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e. addressing customers’ concerns about products.
233. Jonas is in charge of designing a promotion campaign for NetJets, a private jet service company that has a
high level of service quality. In an effort to make the service more tangible to potential consumers, the ad Jonas
is creating will feature
a. pictures of the exterior and interior of the planes
b. the price of leasing one of their jets for a week
c. its brand name prominently
d. images of destinations that can be reached via NetJets
e. comments from satisfied customers
234. Safe Auto Insurance advertises “minimum coverage for minimum budgets” for its automobile insurance. Which of
the following best describes Safe Auto’s approach?
a. Customers often use price as an indicator of quality, and Safe wants to be seen as a low-quality provider.
b. This type of advertising makes insurance more tangible to the customer.
c. Safe wants to reassure customers that they provide the highest level of service quality available.
d. Because market conditions limit prices on auto insurance, Safe uses this approach to gain customers.
e. For some services, customers look for the low-cost provider, which is what Safe claims to be.
235. Brittany recently moved to a new city and is trying to find a new mechanic to do maintenance and repair on her car.
She visits several places to judge their overall appearance, cleanliness, and organization and finally chooses a mechanic.
Brittany was trying to overcome the ____ aspect of services.
a. heterogeneity
b. perishability
c. customer contact
d. intangibility
e. inseparability
236. Andrea has just opened a new service business called Paws n’ Claws, which provides dog grooming and doggie day
care. Andrea has done research about the role dogs play in today’s culture, particularly for those people who do not have
children. She knows that some of these people represent a target that is urban, professional, and who travel frequently.
Andrea’s business is likely to have a _____ and she will probably refer to the dog owners as ___.
a. high level of tangibility; customers
b. high level of inseparability; customers
c. high level of customer contact; clients
d. low level of perishability; customers
e. low level of intangibility; clients
237. Which of the following phases of new-product development is likely the least costly for the firm?
a. Commercialization
b. Concept testing
c. Business analysis
d. Product development
e. Test marketing
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238. As Justin works on the prototype of a new action-oriented computer game, he is engaging in which phase of the new-
product development process?
a. Idea generation
b. Commercialization
c. Test marketing
d. Screening
e. Product development
239. The three major ways to modify a product include
a. aesthetic, quality, and functional changes.
b. extensions, generations, and upgrades.
c. color, size, and quantity modifications.
d. styling, product features, and product design.
e. quality, quantity, and design.
240. Which of the following is a disadvantage of gradually introducing a product to market?
a. It reduces the risk of introducing a new product.
b. It is easier logistically to introduce it all at once.
c. It is difficult to slow down production enough for a gradual introduction.
d. It allows competitors to monitor the results of the new product.
e. It prevents product differentiation based on geographical differences.
241. Kara is a member of the product development team at a company that manufactures sports equipment. During a
recent meeting, one of the team members asked “What level of quality are we building into the camping gear?” Based on
this question, Kara and her team are most likely in the ____ phase of new-product development.
a. commercialization
b. concept testing
c. business analysis
d. product development
e. test marketing
Scenario 11.1
Use the following to answer the questions.
Cheetos Fat-free Crunchies is a product developed through advanced technology. Cheetos engineered a technique for
making reduced-fat snacks that taste cheesier and stay fresh longer. Cheetos introduced Fat-free Crunchies in limited
markets in 2012 and began national distribution in 2013.
About 18 months later, a series of competitors’ ads was run to counter claims that Cheetos Crunchies actually contained
1.5 grams of fat, and that they contained preservatives and additives. Research showed that the taste of Cheetos Crunchies
was also perceived negatively by some people. To save the product, Cheetos reduced the remaining fat to 0 grams, took
out the preservatives, and improved the taste.
242. Refer to Scenario 11.1. Suppose that Cheetos stops production of Cheetos Fat-free Crunchies and sells all of its
remaining inventory to a warehouse club. This would be an example of a(n)
a. strategy for the maturity phase.
b. phase out product deletion strategy.
c. immediate-drop decision.
d. pullout product deletion policy.
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e. return to test marketing.
243. Sony’s design of its new large-screen television sets with smoked-glass control panel covers and other visual changes
would be classified as a(n) ____ modification; changes to make the TV’s remote easier to use would be classified as a(an)
___.
a. functional; aesthetic modification
b. aesthetic; functional modification
c. aesthetic; quality modification
d. aesthetic; line extension
e. quality modification; functional modification
244. Which of the following statements is true about organizational structures for managing products?
a. A product manager is responsible for several distinct products which make up a group.
b. Brand managers do not operate cross-functionally in an organization.
c. Market managers are responsible for managing multiple brands
d. Product managers do not operate cross-functionally in an organization.
e. A brand manager is responsible for a product line.
245. Which of the following service providers are most likely to use demand-based pricing?
a. Dentists
b. Lawyers
c. Doctors
d. Hair stylists
e. Cruise ships
246. Madeline runs a local ice cream stand and is developing a new type of ice cream sundae. She just sent a
press release to the local newspaper and updated her website with information about the new sundae. Based on
this information, Madeline is most likely in the _____ stage of the new-product development cycle.
a. screening
b. commercialization
c. business analysis
d. concept testing
e. product development
247. The phase of new-product development in which a small sample of potential buyers are presented with a product idea
through a written or oral description in order to determine their attitudes and initial buying intentions regarding the
product is called
a. concept testing.
b. customer response testing.
c. idea analysis.
d. test marketing.
e. screening.
248. Outback Steakhouse wants to expand its line of food products. The managers sent surveys to customers to determine
which food items would appeal to them. Outback is currently in the ____ phase of new-product development.
a. business analysis