END OF CHAPTER MATERIAL
Discussion and Critical Thinking
Discussion Questions
7.1. What is a product? Name, describe, and give an example of each type of consumer
product. (AACSB: Communication; Reflective Thinking)
Answer:
A product is anything that can be offered to a market for attention, acquisition, use, or
consumption that might satisfy a want or need. Consumer products are products and services
bought by final consumers for personal consumption and there are four different types.
Convenience products are consumer products and services that customers usually buy
frequently, immediately, and with minimal comparison and buying effort. Examples include
laundry detergent, candy, magazines, and fast food. Convenience products are usually low
priced, and marketers place them in many locations to make them readily available when
7.2. Compare and contrast the two dimensions of product quality. (AACSB:
Communication)
Answer:
Product quality has two dimensions: level and consistency. In developing a product, the
marketer must first choose a quality level that will support the product’s positioning. Here,
product quality means performance quality—the product’s ability to perform its functions.
7.3. What is a product line? Discuss the various product line decisions marketers make and
how a company can expand its product line. (AACSB: Communication)
Answer:
A product line is a group of products that are closely related because they function in a
similar manner, are sold to the same customer groups, are marketed through the same types
of outlets, or fall within given price ranges. For example, Nike produces several lines of
athletic shoes and apparel, and Marriott offers several lines of hotels.
A company can expand its product line in two ways: by line filling or line stretching. Product
line filling involves adding more items within the present range of the line. There are several
reasons for product line filling: reaching for extra profits, satisfying dealers, using excess
capacity, being the leading full-line company, and plugging holes to keep out competitors.
However, line filling is overdone if it results in cannibalization and customer confusion. The
7.4. What is a product mix? Name and describe the four important dimensions of a product
mix. (AACSB: Communication)
Answer:
An organization with several product lines has a product mix. A product mix (or product
portfolio) consists of all the product lines and items that a particular seller offers for sale. A
Product mix length refers to the total number of items a company carries within its product
7.5. Discuss the four special characteristics of services. In terms of these characteristics, how
do the services offered by a doctor’s office differ from those offered by a bank? (AACSB:
Communication, Reflective Thinking)
Answer:
The four special characteristics of services are: intangibility, inseparability,
variability, and perishability. Service intangibility means that services cannot be seen,
tasted, felt, heard, or smelled before they are bought. Service inseparability means that
services cannot be separated from their providers, whether the providers are people or
machines. Service variability means that the quality of services depends on who provides
Critical Thinking Exercises
7.6. The Food and Drug Administration recently announced a proposal to change the standard
nutrition label on food items. In a small group, research the proposed changes and create
a report explaining them. Include history on nutrition labels in your presentation.
(AACSB: Communication; Use of IT; Reflective Thinking)
Answer:
The recent FDA proposal released in February 2014 is to require calorie counts to appear
larger, grams of added sugars to be labeled, and serving sizes to better reflect portions people
typically eat. “Calories from fat” will be eliminated under this proposal. This is the first
7.7. A product’s package must satisfy many criteria, such as sustainability, convenience,
safety, efficiency, functionality, and marketing. Research “packaging awards” and
develop a presentation analyzing an award-winning product packaging effort. Describe
the organization hosting the award competition, the criteria for selecting winners, and one
of the award-winning packages. (AACSB: Communication; Use of IT)
Answer:
Students’ responses will vary but they find several packaging award programs. Several of
them are listed below, and instructors may want to assign specific organizations to students to
get a variety of examples. Some organizations focus more on functional aspects (for
7.8. What is “genericide”? Discuss a recent case and make recommendations regarding how
marketers can avoid it. (AACSB: Communication; Reflective Thinking)
Answer:
“Genericide” is a term used to describe loss of trademark rights when a brand name enters
A recent case is Google (see
www.forbes.com/sites/ericgoldman/2014/09/15/google-successfully-defends-its-most-valuabl
e-asset-in-court/). A lawsuit was brought against Google in May 2012 in which the plaintiff
registered domain names that included the Google trademark (e.g., googlezodiac.com),
claiming Google has become a verb that means searching on the Internet and is therefore a
generic term. The court ruled that even though people often use the term “google” as a verb
Another recent case is Costco alleging that “Tiffany setting,” which refers to the iconic
Tiffany diamond ring is a generic term for that type of ring setting after Tiffany sued Costco
Minicases and Applications
Online, Mobile, and Social Media Marketing: Keeping Tabs on Fido’s Health
Want to monitor your dog’s health and fitness? Now you can with devices like Whistle and
Voyce, wearable bands placed around a dog’s neck like a regular collar. Only this is no regular
collar. It monitors your pooch’s vital signs, such as heart and respiratory rates and calories
burned. You can also learn if your dog is active or sleeps most of the day. Unlike humans, dogs
do not exhibit symptoms and it is often too late when you notice something is wrong. Voyce
gives dogs a “voice” by letting owners “connect the dots” to reveal anything that’s amiss.
Although the monitoring will not set off alarm bells, owners can track vital stats through a
monthly subscription service synced with a computer, tablet, or smartphone and share those data
with a veterinarian. Over time, the device gets to know a dog and sends owners customized
articles, tips, and advice. Using a mobile device, owners can remotely access their pet’s data
anytime through www.MyDogsVoyce.com. Voyce also makes it easy to share your pup’s
milestones with friends and family through social media. Such devices are not cheap, however,
ranging from $129.95 for similar product Whistle to $299 for Voyce in addition to a monthly
service fee. The makers of Voyce also hope to introduce a device to fit even the smallest dogs,
cats, and horses.
7.9. Describe the core, actual, and augmented levels of product associated with this product.
What level does the monitoring service represent? Explain. (AACSB: Communication;
Reflective Thinking)
Answer:
A product is anything that can be offered to a market for attention, acquisition, use, or
consumption that might satisfy a want or need. Products include more than just tangible
objects. Broadly defined, “products” also include services, events, persons, places,
7.10. Discuss two examples of similar types of wearable technology for humans. (AACSB:
Communication; Reflective Thinking)
Answer:
Some examples of health monitoring wearable technology are: Nike+ FuelBand – measures
whole-body movement (https://secure-nikeplus.nike.com/plus/what_is_fuel/); Fitbit –
Marketing Ethics: Geographical Indication (GI)
Scotch Whiskey, Champagne Sparkling Wine, Parmesan Cheese, Dijon Mustard—what do all of
these have in common? They are not brand names but rather geographical indicators (GIs) of the
origins of these foodstuffs. Europe has a long history of gastronomical delicacies that the
European Union has been eager to protect for economic reasons. For example, not just any
sparkling wine can be labeled champagne because only sparkling wine produced in the
Champagne region of France can put that on the label. The British government is launching a
registry of Scottish whiskey makers to protect its $4 billion industry from imitators who label
their whiskey as Scotch. True Scotch must be aged in oak casks in Scotland for at least three
years. Dijon mustard must be produced in Dijon, France, with chardonnay wine from the
Burgundy wine region. Parmesan cheese was developed more than 2,000 years ago in Parma,
Italy, which also boasts Parma ham (Prosciutto di Parma). True Swiss cheeses, such as
Emmental, Gruyere, and other varieties, are produced in Switzerland following strict rules to
guarantee purity, and the authorities there identify counterfeits with DNA fingerprinting based on
the 10,000 strains of milk bacteria that are used for authentic Swiss cheeses. All of these come
with a higher price tag for consumers. For example, Portugal Algarve Salt and French Fleur De
Sel sea salt cost about $80 per pound compared with 30¢ per pound for regular table salt.
7.11. Do you think products with geographical indications are actually superior to other similar
ones not originating from that geographical region? Is it ethical for makers of these
products to command higher prices when others can make or grow them just as well?
(AACSB: Communication; Reflective Thinking; Ethical Reasoning)
Answer:
Students’ answers will vary. Some will argue that geographical indications (GIs) are similar
to brand names, which offer consumers several benefits, such as guarantees of quality.
7.12. Do geographical indications (GIs) offer benefits to consumers? Are there disadvantages
for sellers? Explain. (AACSB: Communication; Reflective Thinking)
Answer:
GIs may offer the same benefits to buyers as do brands. Like brand names, GIs may help
consumers identify products that might benefit them and also say something about product
Marketing by the Numbers: Pop-Tarts Gone Nutty!
Kellogg’s, maker of Pop-Tarts, recently introduced Pop-Tarts Gone Nutty! The new product
includes flavors such as peanut butter and chocolate peanut butter. Although the new Gone
Nutty! product will reap a higher wholesale price for the company ($1.20 per eight-count
package of the new product versus $1.00 per package for the original product), it also comes
with higher variable costs ($0.55 per eight-count package for the new product versus $0.30 per
eight-count package for the original product).
7.13. What brand development strategy is Kellogg’s undertaking? (AACSB: Communication;
Reflective Thinking)
Answer:
7.14. Assume the company expects to sell 5 million packages of Pop-Tarts Gone Nutty! in the
first year after introduction but expects that 80 percent of those sales will come from
buyers who would normally purchase existing Pop-Tart flavors (that is, cannibalized
sales). Assuming the sales of regular Pop-Tarts are normally 300 million packages per
year and that the company will incur an increase in fixed costs of $500,000 during the
first year to launch Gone Nutty!, will the new product be profitable for the company?
Refer to the discussion of cannibalization in Appendix 3: Marketing by the Numbers for
an explanation regarding how to conduct this analysis. (AACSB: Communication;
Analytical Reasoning)
Answer:
This is a cannibalization problem. To analyze this problem, we need to determine unit
contributions (contribution per box):
Unit contribution = price unit variable costs
Kellogg’s will lose $0.05 for every box cannibalized from the original product.
One way to analyze this is to assess the incremental contribution gained (or lost) by adding
the new product. The company estimates that the first year’s sales of the new product would
Therefore, Kellogg’s will lose $200,000 in contribution due to cannibalization. However, it
The net effect is that the company will gain $450,000 in contribution by introducing the new
However, this increase in total contribution is less than the $500,000 increase in fixed costs
to introduce this product, so the new product will not enhance the company’s profitability
Another way to see this is to compare total contribution with and without the introduction of
the new product:
Old products only Old products and Gone Nutty!
contribution
Notice that the difference in the total contribution is a net gain of $450,000 ($210,450,000