Chapter 12 Product and Service Strategies 345
g. A firm may even drop a profitable item that no longer fits the
7. Strategic Implications of Marketing in the 21st Century
a. Successful marketers develop new products to attract customers,
retain them by engaging them, focus on quality, customer service,
and continually evaluate their product mix
Assessment check questions
10.1. Describe the four strategies for extending a product’s lifecycle. The four
10.2. Under what circumstances do firms decide to delete a product from their
line? Firms may decide to delete a product if none of their strategies work, if raw
materials become unavailable, or if the product no longer fits the existing or future
product line.
ANSWERS AND TEACHING NOTES TO CHAPTER EXERCISES
Chapter 12 Assurance of Learning Review
1. Choose one of the following products and explain how it blurs the distinction between goods and
services.
a. knee replacement surgery
b. dinner at a popular restaurant
c. purchase and installation of a new roof
d. a live concert
e. a custom-made suit
Answer: Goods are tangible products or items that customers can see, hear, smell, taste, or touch.
Services are intangible tasks—actually intangible products—that satisfy the needs of customers and
346 Part 4 Product Decisions
2. What are the differences between consumer products and B2B products? Describe a product that
could be used as both.
Answer: Consumer products (or B2C products) are those destined for use by ultimate consumers.
Business products (or B2B products), also called industrial or organizational products, are those that are
3. What are unsought products? Give an example of an unsought product, and explain how it might be
marketed.
Answer: Unsought products are marketed to consumers who may not yet recognize any need for them.
Few products fall into this category because most consumers recognize their needs for consumer
4. What important features distinguish shopping products from one another?
5. How does marketing for installations and accessory equipment differ?
6. How do firms use benchmarking?
Answer: Benchmarking sets standards to achieve superior performance that results in a competitive
advantage. It’s a recognized way to learn how the world’s best goods and services are designed,
7. Describe briefly how L.L.Bean has achieved each of the objectives for developing a product line. Why
do you think the firm has been successful?
Answer: The company has achieved each of the four objectives in developing its product line, as follows:
to demonstrate the desire to grow (has shown innovation and new product ideas continually), to enhance
8. What is a line extension? Describe how one of the following might create a line extension.
a. Angel Soft toilet tissue
b. Kellogg’s Frosted Flakes
c. Dunkin’ Donuts ground coffee
d. Gain laundry detergent
Answer: A line extension adds individual offerings that appeal to different market segments while
remaining closely related to the existing product line. A firm may assess its current product mix in order to
9. What steps do marketers take to make the introductory stage of the product lifecycle successful
enough to reach the growth stage? What are some of the challenges they face?
Answer: A product is launched during the introductory stage, and barriers present themselves almost
immediately. Because the item is unknown to the public, promotions need to stress information about
10. Arm & Hammer extended the lifecycle of its baking soda by coming up with new uses for the product.
Think of a product whose lifecycle you believe could be extended by finding new uses. Describe the
product and your ideas for new uses.
Chapter 12 Product and Service Strategies 349
Projects and Teamwork Exercises
1. On your own or with a classmate, choose one of the following goods (or choose one of your own). Visit
the company’s website to learn as much as you can about your product and the way it is marketed. Then
create a marketing strategy for developing the services to support your product and make it stand out
from others.
2. On your own or with a classmate, create an advertisement for an unsought product such as a remedial
reading or math course, cremation services, a first-aid kit, or the like. How can your ad turn an unsought
product into one actually desired by consumers?
3. Consider a customer service experience you have had in the last month or so. Was it positive or
negative? Describe your experience to the class and then discuss how the firm might improve the quality
12.3, identifying the company’s major product lines, along with a few specific examples.
a. Under Armour athletic clothing
b. Condé Nast magazines
c. Wyndham Hotels
5. With the same classmate, create a plan for further extending one of the firm’s product lines. Describe
the strategy you would recommend for extending the line as well as new products that might be included.
Point Value: 1
Critical-Thinking Exercises
1. Draw a line representing the goods–services continuum. Then place each of the following along the
continuum. Briefly explain your decision.
a. Skype
b. Teleflora.com
c. Pottery Barn
d. Hyundai dealership
e. Redbox
2. Make a list of all the convenience products you buy in a week. Does the list change from week to week
based on need or your budget? What would it take to make you switch from one product to another?
Chapter 12 Product and Service Strategies 351
Answer: Ask students to list a range of convenience products that they purchase on regular basis.
Analyze whether the purchases vary. To switch from one product to another, customers might consider
3. Imagine your favorite restaurant. List as many installations, raw materials, and supplies as you can
that you think the restaurant owner or manager must be responsible for purchasing.
Answer: Student answers will vary. Installations are the specialty products of the business market; they
include major capital investments, and are dominated by efficiency and performance over the product’s
4. Why is it important for even a small firm to develop a line of products?
5. Choose one of the following goods and services, and describe your strategy for taking it to the next
stage in its product lifecycle. For products in the maturity or decline stage, describe a strategy for
extending their lifecycle.
a. iPad (growth)
b. MP3 players (maturity)
c. Text messaging (growth)
352 Part 4 Product Decisions
d. Landline phone (decline)
e. Duct tape (maturity)
6. Describe a fad that has come and gone during your lifetime, such as Beanie Babies or Pokemon. Did
you take part in the fad? Why or why not? How long did it last? Why do you think it faded?
Answer: You should get lots of interesting responses here. (Don’t forget to think of one yourself.)
Point Value: 1
Ethics Exercises
The airline industry has suffered recent setbacks, such as the high cost of fuel, that have forced the
major carriers to cut back on many of their services. Many airlines, like Delta and United, charge
passengers a fee for checked baggage. Spirit Air announced it would also charge for carry-on bags. Most
1. Using the five variables of service quality as your guideline, what steps would you take—within your
realm of control—to close the gap between the level of service passengers expect and the level they
have been receiving?
2. How might you attract business customers? Would you give them a level of service that is different
from families and other consumers who are flying for pleasure?
Chapter 12 Product and Service Strategies 353
Internet Exercises
1. Product classification. Visit the website of a company such as Reckitt Benckiser, Colgate, or
Unilever. Choose at least five different products and classify each as a convenience or shopping product
Explain your reasoning.
http://www.rb.com
http://www.colgate.com
http://www.unilever.com
2. ISO certification. The International Organization for Standardization is responsible for the
development and implementation of product standards. Go to the ISO’s website (http://www.iso.org) and
answer the following questions:
a. Who belongs to ISO and how is it administered?
b. How are ISO standards developed?
c. What are some of the advantages of ISO certification?
3. Product lifecycle. Arm & Hammer baking soda was first sold more than 100 years ago. Visit the Arm
& Hammer website (http://www.armhammer.com). Review the history of the product and then prepare a
brief report outlining how the makers of Arm and Hammer baking soda have been able to extend the
product’s lifecycle.
354 Part 4 Product Decisions
Case 12.1 Nike Back in the Limelight—Questions for Critical Thinking
1. In your opinion, does a spirit of innovation create a competitive advantage for a company? How can
Nike use its innovative spirit to its advantage in the marketplace?
2. What other product extensions might Nike consider for its Flyknit technology?
Answer: Students’ answers will vary. Other product extensions could be athletic wear, sports gloves, and
Video Case 12.2 BoltBus Gives Bus Travel a Jump Start—Questions for Critical Thinking
1. Where does BoltBus fall on the goods–services continuum? With this in mind, what strategies might
BoltBus use to gain a competitive advantage over rival bus companies?
2. What steps might BoltBus marketers take to extend its product lifecycle?
Answer: The bus travel industry has undergone a revival, but the stages of the product lifecycle still
apply. BoltBus could extend its product life cycle by increasing frequency of use (offering prices and
COLLABORATIVE LEARNING EXERCISES
Goods-Services Continuum
Purpose:
To help students better understand the Goods–Services Continuum
Background:
The distinction between a good and a service can be somewhat confusing, since most products
include some combination of the two. This exercise is designed to encourage students to engage
in critical thinking regarding how products fit the goods–services continuum.
Relationship to Text:
What Are Goods and Services? Goods–Services Continuum
Estimated Class Time:
About 15 minutes
Preparation/Materials:
Exercise:
Divide your class into small groups. For the sake of esprit de corps, give them a moment to
choose names, and write them on the board. Then, direct the groups to decide where to place the
following companies on the continuum (whole numbers only—no fractions allowed), along with a
strong rationale.
• Yahoo.com
• Dinner at an upscale restaurant
• eBay
• Starbucks coffee
• Neutrogena shampoo
• Chiropractor office
• Ski resort
• Shoes from Nordstrom
356 Part 4 Product Decisions
• H&R Block tax preparation
• Caribbean luxury cruise
Then the fun begins. Announce that each group starts with ten points (which you should track on
the board). A volunteer from each team will choose a company at random (from your folded
papers), write it on the continuum, and explain why the group assigned that placement. Then, any
other group can challenge the placement (one challenge per group). The challengers must
Features of Services
Purpose:
To highlight the concrete meaning of each feature of services
Background:
Since few services are completely “pure,” students are often quite puzzled about what the
features of services actually mean, and how to apply them to real-world cases. This quick,
discussion-based exercise is designed to clarify each of the features through concrete examples.
Relationship to Text:
What are Goods and Services? Features of Services
Estimated Class Time:
Less than five minutes
Preparation/Materials:
None needed
Exercise:
Choose an example of a complex service—Disneyland and Disney World work especially well—
and ask your class to determine whether it embodies each feature of a service. Be sure that they
can justify their responses. The discussion quickly surfaces areas of confusion, which often leads
to students explaining the features to each other (a nice dynamic). Many classes also “agree to
disagree” on some features, which highlights the inherent blurriness of the product-service
distinctions.
Questions for Reflection:
• Why does it matter whether your product is a good or a service? How (if at all) would the
distinction affect marketing strategy?
• What is the biggest challenge in marketing services? Why?
Chapter 12 Product and Service Strategies 357
The Full Range of Products
Purpose:
To reinforce student understanding of different types of products
Background:
This exercise is designed to focus student attention on product classification and the product life
cycle in a way that they won’t easily forget.
Relationship to Text:
Classifying Goods and Services and the Product Life Cycle
Estimated Class Time:
About 20 minutes
Preparation/Materials:
You may want to make each student a copy of the list for the scavenger hunt (if not, you can
simply write the list on the board, and ask them to copy it). Also, consider preparing some small
prizes (e.g., candy).
Exercise:
Announce to your class that they are about to embark on a product scavenger hunt, and they
need to begin by dividing themselves into teams of 5 to 7 people. The first team to return with a
complete set of products wins. Encourage them to be creative. The only rules are: 1) all products
must be legal, 2) no product can meet more than one requirement, and 3) no team can spend any
money. Here is the list:
Questions for Reflection:
• What strategies did the teams use to collect the products? Which seemed to be most
effective, and why?
• Do you believe that marketing works best in teams? Why or why not?
Quality as a Product Strategy
Purpose:
To explore the meaning of quality across a range of goods and services
358 Part 4 Product Decisions
Background:
Quality plays a critical role in the long-term success of any product; however, the meaning of
quality varies significantly across product categories. This exercise is designed to help students
understand the different dimensions of quality products.
Relationship to Text:
Quality as a Product Strategy
Estimated Class Time:
About 10 minutes
Preparation/Materials:
None needed
Exercise:
Ask your class what product quality means. After they have shared some thoughts, ask them if
the definition of quality changes depending on the type of business. You may want to illustrate
Questions for Reflection:
• What is the marketing impact of poor quality?
• Should you promote high quality, or should you let your high quality products speak for
themselves? Why or why not?
The Product Lifecycle
Purpose:
To highlight the transformations in product and promotion strategies over the product lifecycle
Background:
Few products see stable demand throughout their lives. Most products follow a definite lifecycle—
from introduction to decline, though marketers can sometimes revive flagging brands with new
strategies.
Chapter 12 Product and Service Strategies 359
The Product Lifecycle
Estimated Class Time:
About 15 minutes
Preparation/Materials:
None needed
Exercise:
As a class, pick a few products in different product categories (automobiles, fast food, toys,
Extending the Product Life Cycle
Purpose:
To encourage your students to see old products in new ways
Background:
As product life cycles in many categories condense into shorter timeframes, extending the
product life cycle has become a critical issue. This exercise is designed to help your students
explore the possibilities of new uses for familiar, established products (and it’s also a lot of fun).
Relationship to Text:
Extending the Product Life Cycle
Estimated Class Time:
About 20 minutes
Preparation/Materials:
You’ll need to gather a set of ordinary household items, enough for each group of 3–5 to have
something different. Possibilities include a fork, a clothespin, a coffee cup, a cloth napkin, a
pencil, a manila folder, etc. (Having multiple groups with the same item will work, too, if you can
only gather a few things.)
Exercise:
Divide your class into small groups and give each group one of the household items that you
collected. Direct them to spend five minutes brainstorming as many alternative uses as possible
