978-0077861049 Chapter 8 Solution Manual Part 1

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Chapter–by–chapter aids: Chapter 8

Instructor’s Manual to Accompany Essentials of Marketing IV-8-1

CHAPTER 8: ELEMENTS OF PRODUCT PLANNING FOR GOODS

AND SERVICES

CHAPTER 8 – COMMENTS ON QUESTIONS AND PROBLEMS

8- 1. See section “What Is a Product?” The main emphasis here should be on the student taking a

broad view of the product concept – looking at it as the need satisfying offering of the firm and

not just as a physical good.

Services.” The major differences stressed in the text are highlighted below:

Tangibility of the product: Goods are tangible, services are not. For example, a sweater is a

tangible product, but the dry cleaning service for the sweater is not.

Timing of production and consumption: Goods are usually produced and then sold (e.g.,

toothpaste). Services are usually sold before they are produced – and they are consumed as

they are produced (e.g., having your teeth cleaned at a dentist’s office). Because of this

difference, the consumer can usually inspect (“see”) a physical good before it is purchased –

but the quality of the service cannot be evaluated until after the work is performed – which is

often after the purchase.

Relation of production and marketing: With services, the person producing the product is often

directly in contact with the customer and thus is involved in the marketing process. With

physical goods, that is often not the case. For example, a bank teller produces the banking

service while interacting with the customer. A worker in a print shop that prints checks, by

contrast, is unlikely to come in direct contact with the customer. The difference between the

teller and the check printer demonstrates how there is often a closer link between operations

best meets the customer’s needs. The shop may also assemble the bike (often not the case for

bikes purchased at department stores, sporting goods stores, and mass–merchandisers) and

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adjust it properly for the customer. The shop may also be selling repair services and/or “after

the sale” warranty service if it is required.

A travel agent is selling convenience, information, and expertise! A travel agent is usually paid

a commission by the travel service whose services are booked. The customer could handle the

transaction without an agent, but the agent has detailed information that may be hard for the

consumer to obtain. The travel agent maintains up–to–date records about changes that may

affect a given customer’s travel plans. While the equipment available to the travel agent (for

example, computer links with an airline’s ticket reservation system) may make some difference

pleasantly. Some travel agents even provide transportation to the airport or arrange pet–sitting

and plant–watering services while customers are away. These “special touches” contribute

greatly to the customer having a better trip—and to the likelihood of the travel agent making a

sale.

A supermarket is selling not only a collection of food and related items – perhaps at low prices

– but also the convenience of a wide selection, wide aisles, and other conveniences without

services with regard to promotion. The lack of a physical object may make it more difficult to

promote a service. It is harder to show the product in advertising. The customer cannot see it

quality differences. Some service firms try to make it easier to remember a service by using

tangible symbols in their promotion. For example, Merrill Lynch uses a bull in many of its TV

8- 5. The purpose of this question is to remind students that product means the “need–satisfying

offering of a firm.” Marketing managers should understand the many factors related to a

purchase – and try to differentiate their brand as meeting the specific needs of some

customers. The following are examples that students might identify:

• Airport branch of a rental car agency – Typically, customers renting cars are looking for

speed, and may be under considerable stress and anxiety. Understanding this, the car

• Fast–food restaurant – Factors to consider include: the friendliness and helpfulness of the

staff, the speed of in–store service, the comfort of the seating, the tastiness and freshness

of the food, the ease of parking, the cleanliness of the restrooms, the cleanliness of the

parking lot, the speed of the drive–through line, and other elements of the service

experience.

• Online firm selling software – Customer satisfaction could be increased by making sure

the website is easy to use and that customers can quickly find the item they seek, that

Chapter–by–chapter aids: Chapter 8

Instructor’s Manual to Accompany Essentials of Marketing IV-8-3

• Hardware store selling lawnmowers – The customer experience could be improved by

making it easy to compare alternatives (salespeople and/or brochures in the store), by

giving customers the option of gathering information online before they visit the store, by

providing a quick demonstration in–store of basic operating procedures, by allowing

customers to test the mower to see how easy it is to start or how well it cuts (perhaps in

an adjacent lot), by providing home delivery of the purchased mower, and by providing

Brand Names and Trademarks.” A trademark can obtain the protection of the Lanham Act.

satisfaction from using such a brand. Also, the wholesalers and retailers who handle the

product may find it more profitable because of the demand for it.

8- 8. There are many products that are seen as homogeneous substitutes (at least by most

customers) where it might not make sense to spend money to establish a brand. For example,

most consumers would have trouble naming a particular brand of paper clips, string, carrots,

cake pans, electric fuses, and plastic drinking cups. If there are many competitors offering

Crayola is a well–known brand of crayons. Ask your students if they know any other brand

names in this product category. Similarly, United fruit has been able to develop the Chiquita

brand name for bananas, and it and other firms are now trying to establish brand recognition

8- 9. Students will think of a wide variety of brand names. It can be useful to write the brands they

list on the board. Invariably, some of the most frequently mentioned brands will be very popular

consumer products with high brand awareness (for example, Coke, Campbell’s Soup, and Nike

involved that their brands are ones that quickly come to mind. This kind of exercise can really

bring home the importance of having a well–known brand name – and also why it is hard for a

8-10. A family brand is a brand name that is used on two or more different products. A firm might use

the same brand name for many products if all the products are similar in type and quality. The

main benefit is that the goodwill attached to one or two products may help the others – and

money spent to promote the brand name benefits more than one product. A retailing chain –

profits. However, there are potential problems with the dealer brand in the Best Buy situation.

In particular, much of the demand for manufacturer brand products is stimulated by the

manufacturer’s marketing mix – especially promotion. If Best Buy were to be too aggressive

manufacturers felt that the retailer was competing directly, they might emphasize other

channels – perhaps smaller retailers or alternatively discount stores such as Walmart.

that some consumers see them as specialty brands. For products that might be viewed as

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IV-8-4 Perreault, Cannon, & McCarthy

heterogeneous shopping products (e.g., fashions and consumer electronics), it may be

particularly important to offer consumers a choice. Otherwise, if the preferred style or brand is

not available they will go somewhere else to buy it. Of course, Sears is more likely to stick with

its own brand on products that are viewed as homogeneous shopping products, or

8-12. The degree of brand familiarity achieved indicates the success of past promotion (or more

generally, the success of the whole marketing mix). The future promotion task depends upon

the degree of familiarity desired. In a market with many weak brands, merely brand recognition

more inelastic the demand is likely to be – and perhaps the further to the right the demand

curve is likely to shift.. Thus, the company might be able to expand its sales volume and/or

8-13. The attitudes and preferences of current and potential customers must be considered.

Switching to dealer brands at lower prices might make this hardware store profitable; however,

it must be realized that using dealer brands at lower prices only considers two of the four Ps.

The hardware store itself may be in a poor location and/or unattractive to potential consumers.

overlook the liabilities of this particular store because they were able to obtain manufacturers’

brands relatively conveniently. When dealer brands are added, this may be the last straw.

(e.g., crackers). These packages tend to reduce handling costs, deterioration, and

obsolescence – and may increase the size of the unit sale.

b. Cosmetics or any product for which an attractive package is an important part of the

product; however, it should be noted that consumers might willingly pay for these extra

costs because luxury items sell better in aesthetically pleasing packaging.

8-15. See Exhibit 8-6 and section “Consumer Product Classes.” Place convenience and perhaps

some promotion might be important with the staple convenience product, while with a

homogeneous shopping product, price will reign and to a lesser degree, the consumer will be

concerned with place convenience. Place convenience might not be too important for a

shopping and may need help. This question asks students to use examples to make their

answers more concrete – and to provide a point of reference for their discussion.

people neglect to get annual check–ups. More generally, one of the problems of marketing

health care is to get people more interested in preventive medicine (blood pressure checks,

not worth the possible benefit. The broader point here is that the consumer product classes

apply to both goods and services. This is emphasized with the examples given in the text – but

8-17. Here the instructor might attempt to draw out the functions or services that would be provided

by various kinds of stores, rather than trying to get the students to use the conventional names

that are presented in the Place chapters. It is intended here that the students use logic and

Chapter–by–chapter aids: Chapter 8

common sense, describing what the stores should do – disregarding conventional labeling. By

describing the kinds of stores that ought to be carrying these various kinds of products, they

will obtain a better appreciation for what some actual retail stores do. They will also see that

some stores carry several different kinds of products and that some particular stores do

relatively little besides stocking the products.

A typical student answer follows:

STORE TYPES

a) Convenience Products

c) Specialty Products

1) Neighborhood grocery stores

1) Supermarkets

2) Vending machines

2) Department stores

3) Supermarkets

3) Clothing stores

4) Department stores

4) Drugstores

5) Hardware stores

5) Appliance stores

6) Drugstores

6) Jewelers

b) Shopping Products

d) Unsought Products

1) Supermarkets

2) Department stores

3) Furniture stores

3) Appliance stores

4) Clothing stores

4) Drugstores

5) Appliance stores

5) Discount stores

6) Discount stores

8-18. Student answers may vary for these products. That is to be expected. The same product will

likely be viewed differently by different customers. In fact, that point should be amplified by

asking students to explain their choices. The differences in their recommendations will highlight

the importance of thinking about how different customer segments might view the product

when developing marketing mixes.

a. For many consumers, a watch is a heterogeneous shopping product. Differences in

style, features, warranty, and price mean that some comparison is usually required.

that case, the watch might be a specialty product. Finally, some consumers don’t want a

watch at all – so it would be an unsought product (unless someone convinced them that

a watch would really meet their needs).

b. An automobile is an important purchase for most people, and usually purchased as a

heterogeneous shopping product. On the other hand, once the search narrows down to

perhaps on an impulse after riding in a car they really like or seeing one in an ad. Some

students will find it hard to believe that expensive cars are often sold as “impulse”

purchases – but car dealers assure us that it happens quite regularly.

c. Toothpaste is usually purchased as a staple convenience product. On the other hand,

some people prefer a specific brand and taste and insist on that particular product (i.e.,

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some cases, so much service is required that customers develop their own skilled

maintenance or service departments, e.g., airlines, bus and taxi companies, etc.

8-20. A new law office may need to use its money (capital) for a variety of purposes other than

buying furniture. Thus, leasing furniture could help ease cash flow problems. In addition, from a

tax standpoint, it would allow the company to “write off” an expense as it is incurred, rather

recover the value of the furniture by trying to sell it.

the functions that might be performed by wholesalers should be stressed rather than their

names. These are best discussed later during coverage of the Place chapters. Mill supply

8-22. We are concerned only with business products here, but it should be mentioned that lubricating

oil, electric motors, and landscaping services might also be consumer products. The following

comments refer to business products only:

a. Maintenance or repair items, or component materials if used on the assembly line.

b. If an especially large, complicated system (i.e., an electric motor for a steel mill), it would

be considered an installation; if it were a small motor for a sprayer in the maintenance

department, it would probably be considered accessory equipment. If it were

incorporated in the company’s product (i.e, a motor in a washing machine), it would be a

c. A professional service – the firm could perhaps purchase its own lawn care equipment

and hire its own crew, but often it makes sense to leave this work to experts – especially

if there is not enough landscaping work to keep a person occupied full–time.

The important point to recognize is that similar products can be treated differently, depending

upon the relative importance in the buyer’s plans and how they are to be used. In other words,

the firm may be catering to several target markets at the same time.

accumulating and sorting – as will be explained in Chapters 10 and 12. This has led to the

development of many specialized wholesalers. Inability to control output quantities in farm

price usually recedes in importance and promotion, product research, quality control, and

convenient availability become more important.

question tries to anticipate material that is discussed in greater detail in subsequent chapters.

The instructor should not expect the students to use the conventional terms and probably

distribution facilities needed, some students rather mechanically list some. But “why” questions