121) Manufacturers of systems such as razors and ink jet printers use a system of pricing called
“two-part pricing”: one price for the disposable products and another for the “hardware.”
122) A pricing system in which there is a “fixed” fee and then a variable “usage” fee is called
bundling.
123) Pure bundling occurs when a firm offers goods both individually and in bundles.
124) A buyer of the 2013 Subaru Outback 2.5i could pay extra for four-way passenger seats, an
All-Weather package, and a power moon roof because Subaru was using captive-product pricing.
125) Explain the concepts of product-mix width, length, depth, and consistency.
126) Product-mix pricing can involve a number of pricing strategies for the brand manager. List
each of these strategies and briefly define each.
127) You have been asked to create a product system for your company’s personal digital
assistant. Before starting, you must define the term product system to the engineers to enable
them to start design and production of the aligned items. Define the concept of a product system.
128) You have been asked to prepare a product-line analysis for your company’s stable of
products. Why is it important for product-line mangers to do a product-line analysis?
129) Explain the concept of line stretching and the three uses for it.
130) As the newest member of the marketing department, your immediate boss asks you to
comment on the company’s proposal to add two new shoes to the company’s middle-of-the-road
pricing and product-line strategies. The first pair will retail for $ 40 and has as its target market
the “bargain” shopper. The second pair will retail for $200 and is targeted at the “sophisticated
shopper.” In relation to product-line strategy, what is the company trying to accomplish with
these two new items?
131) During a meeting, you were asked by the VP of Marketing to comment on the company’s
pricing strategy for its products. Recalling your marketing management course in college, your
comments define the six situations involving product-mix pricing. List these six product-mix
pricing strategies.
132) Outline three guidelines for correctly implementing a bundling strategy.
133) McDonald’s restaurants inside Walmart stores and Starbucks inside Super Targets are
examples of ________, whose main advantages are that the products can or may be convincingly
positioned by virtue of the associated brands.
A) cooperative marketing
B) cross-promotion
C) retail co-branding
D) ingredient branding
E) feature promotion
134) Betty Crocker cake mixes using Hershey syrup in its mixes and “Lunchables” lunch
combinations with Taco Bell tacos are examples of what special type of branding?
A) family branding
B) ingredient co-branding
C) co-branding
D) generic branding
E) individual branding
135) The main advantage of co-branding is that a product may be convincingly positioned by
virtue of the ________ involved.
A) branding synergy
B) increased advertising dollars
C) multiple brands
D) bundled package
E) pure bundling
136) The potential disadvantages of ________ are the risks and lack of control from becoming
aligned with another brand in the consumers mind. Consumer expectations about the level of
involvement and commitment are likely to be high, so unsatisfactory performance could be very
negative for the brands involved.
A) co-branding
B) cannibalization
C) vertical integration
D) disintermediation
E) brand stretching
137) ________ branding is a special case of co-branding involving creating brand equity for
materials, components, or parts that are necessarily contained within other branded products.
A) Cross
B) Ingredient
C) Equity
D) Family
E) Generic
138) Co-branding is when two or more well-known existing brands are combined into a joint
product and/or marketed together in some fashion.
139) Ingredient branding can take on a form called “self-branding” in which the company
advertises its own branded ingredients.
140) If the variants within the Tide product under P&G’s detergent line included Tide with Acti-
Lift, Tide Plus Febreze Freshness Sport, Tide Plus Febreze, Tide Free, Tide Plus Downy, Tide
Coldwater, Tide TOTALCARE, and Tide Free for Coldwater, and all were available in Pods,
Liquids, Liquids for HE machines, and Powder formats, the width of the product mix would be
32 because there would be 32 distinct variants.
141) Product line analysis provides information for two key decision areas — product line length
and product mix pricing.
142) As the marketing manager for your firm, you have been approached by your key component
manufacturer suggesting that your two firms “ingredient brand” a new item. What are some of
the requirements for succeeding in ingredient branding?
143) We define packaging as all the activities of designing and producing the container for a
product. This includes up to three levels of material: primary package, secondary package, and
________ package.
A) retailer
B) design
C) shipping
D) consumer
E) supplier
144) Which of the following factors is one of the contributors to the growing use of packaging as
a marketing tool?
A) consumption aid
B) consumer affluence
C) consumer influence
D) conformance qualities
E) brand identification
145) ________ are formal statements of expected product performance by the manufacturer.
A) Insurance
B) Warranties
C) Bonds
D) Invoices
E) Balance sheets
146) Many sellers offer either general or specific guarantees. Guarantees reduce the buyer’s
________ risk.
A) actual
B) perceived
C) real
D) implied
E) stated
147) Guarantees are most effective in two situations. The first is when the company or products
are not well known. The second is when the product’s quality is ________ to competition.
A) not known
B) different
C) inferior
D) equivalent
E) superior
148) Packaging includes the activities of designing and producing a container for a product.
149) Labels can identify the product and must contain legal statements that under various Federal
laws cannot be misleading, false, or deceptive.
150) Warranties are formal statements of expected product performance by the manufacturer.
151) A guarantee’s greatest contribution to a product’s success is that it decreases the buyer’s
perceived risk in the purchase of the product.
152) Guarantees are most effective when the product is well known and/or similar in
performance to other brands in the market.
153) The Robinson-Patman Act, passed by Congress in 1967, set mandatory labeling
requirements, encouraged voluntary industry packaging standards, and allowed federal agencies
to set packaging regulations in specific industries.
154) Various factors have contributed to the increased importance of packaging as a marketing
tool. List and briefly describe these factors.
155) Your research shows that over 53 percent of all purchases are made on impulse. As you sit
down with your packaging design team, you tell them that the package must communicate many
of the sales tasks. List the sales tasks that packaging must now incorporate due to the increase in
self-service sales.
156) In discussions with the packaging design team, you note that they do not have a firm design
objective for the final package. In an internal memo to your boss, outline the objectives (both
company and consumer oriented) that you wish to see implemented by the design team.
157) Sellers must label their products. Labels serve many purposes beyond just “naming” the
product. List the additional services provided by a product’s label.
158) What is the importance of guarantees?
159) What are the situations in which guarantees are most effective?