BUS 346 – Chapter 11

A product is anything that is of value to a consumer and can be offered through a voluntary exchange.

TRUE This is the definition of a product.

Effective packaging and labels send the signal: "Buy me."

TRUE Good packaging and labeling can grab the consumer’s attention and encourage the consumer to buy.

A company’s product line consists of its various product mixes.

FALSE This is backward. A company’s product mix consists of its various product lines.

Brands enable customers to quickly differentiate one firm or product from another.

TRUE As consumers become familiar with brands, they can more quickly differentiate between various offerings.

Brand equity is calculated by subtracting sales of generic brands from the sales of branded items in a category.

FALSE Brand equity is the set of assets and liabilities linked to a brand that add to or subtract from the value provided by the product or service.

The more familiar customers are with a brand, the harder their decision-making process will be.

FALSE Familiarity with a brand makes the decision-making easier, not harder.

Harold is a loyal Coca-Cola customer. Loyal customers like Harold require lower marketing expenditures, benefiting businesses like Coca-Cola.

TRUE The costs of reaching loyal customers are lower, and their positive word of mouth reaches potential customers and reinforces the perceived value of current customers, all at no cost to the firm.

Private-label brands are imitations often sold by street vendors.

FALSE A private-label brand is a retailer or store brand, developed by retailers to be sold only within their own stores.

For a company like Pepsi-Cola, brand dilution occurs when sells more product than the competition.

FALSE Brand dilution refers to overuse of the brand for brand extensions, such that brand equity becomes weaker.

In entertainment licensing, the major risk to licensees is that the brand will become overexposed.

FALSE The licensor is the party granting the license, whereas the licensee is the one using the license to produce products using the licensed characters. For licensors, the major risk is the dilution of the brand.

A product label is just a required sticker on a package.

FALSE A label is much more than that. It can help to sell the product; it also provides key information, which is sometimes regulated by the government.

When purchasing a mobile phone, the product you are buying is more than just the phone.

TRUE The three components of a product are the core customer value, the actual product, and the associated services. In this case the associated services include the cellular service.

A customized carved cedar wood sign for your house is an example of a convenience product.

FALSE A specialty product is one toward which customers show a strong preference, such that they will spend time and effort searching for the best suppliers. A customized product such as the cedar sign is a specialty product.

For the average college student, a retirement account would be a shopping product.

FALSE Most college students are not thinking of preparing for retirement, so a retirement account would be an unsought product.

Kellogg’s sells many breakfast cereals, including Corn Flakes, Rice Krispies, Frosted Flakes, Raisin Bran, and Special K. This is an example of the breadth of the Kellogg’s product mix.

FALSE Product line depth (not breadth) equals the number of products within a product line, as in this question.

If Microsoft decided to sell mobile phones under the Xbox brand (which it uses for its gaming systems), this would be an example of a line extension.

FALSE This is a brand extension, not a line extension. A brand extension is the use of the same brand name in a different product line. Phones and gaming systems are different product lines.

Sales of private-label brands continue to decline in the U.S., particularly in big-box stores such as Costco.

FALSE Sales of private-label brands continue to rise in the North America, where they account for about 20 percent of retail sales. Costco is a leader in the use of private-label brands.

When Jaclyn selects a case of Sprite at the grocery store for her party, she is attracted by the holiday-themed box featuring green and white bells. What Jaclyn is seeing is referred to as the secondary package.

TRUE The secondary package is the wrapper or exterior carton that contains the primary package and provides the UPC label used by retail scanners. The packaging is used to attract the consumer’s attention.

Jenny traded in her old car for her heart’s desire, a new Lexus sedan. The Lexus is considered a specialty product.

TRUE Luxury cars are specialty products because customers are willing to spend more effort to select just the right one.

Nike sells shoes, clothing, and athletic gear. These represent the breadth of Nike’s products.

TRUE A firm’s product mix breadth represents a count of the number of product lines offered by the firm.

A decrease in a company’s product depth will always hurt its marketing efforts.

FALSE From time to time, it is necessary to delete products within a product line to realign the firm’s resources.

A familiar brand name always helps the sales of a product.

FALSE Even if the overall brand name is familiar, it won’t help sales of individual products unless consumers know what products are available under that name and the brand has a positive image.

Claire always liked Lands’ End raincoats, so when she was shopping for a winter coat, she just ordered one from Lands’ End without thinking too much about it. This demonstrates how brands facilitate purchases.

TRUE Brands are often easily recognized by consumers, and because they signify a certain quality level and contain familiar attributes, brands help consumers make quick decisions, especially about their purchases.

Brands are assets that can be legally protected through trademarks.

TRUE Brands are assets that can be legally protected through trademarks and copyrights and thus constitute a unique form of ownership.

Manufacturers, wholesalers and retailers can all own brands.

TRUE This is correct; any kind of firm in the supply chain can own brands.

A product is __________ that can be offered through a voluntary marketing exchange.

A.
the combination of a firm’s marketing mix

B.
the brand associations

C.
the category depth

D.
a tangible item

E.
anything of value to consumers

E. anything of value to consumers This is the definition of a product. It does not have to be a tangible item; it can also be a service or a combination of a good and associated services.

The complete set of all products offered by a firm’ is called its

A.
product line.

B.
product categories.

C.
product mix.

D.
product breadth.

E.
product line depth.

C. product mix. The product mix is the complete set of all the firm’s offerings.

A __________ is a group of associated items that consumers tend to use together or think of as part of a group of similar products.

A.
product line

B.
product mix

C.
product mix breadth

D.
line extension

E.
brand extension

A. product line A product line is a subset of the product mix, a collection of associated items that consumers either use together or consider to be related to each other.

For a major university, undergraduate studies, graduate studies, and professional programs would be __________ within the university’s product mix.

A.
brand associations

B.
family brands

C.
co-brands

D.
product lines

E.
private label brands

D. product lines For the university, these would be product lines. Within each product line would be specific majors.

It is almost impossible to watch a sporting event on television without seeing Nike’s swoosh check mark, which is Nike’s

A.
name.

B.
symbol.

C.
design.

D.
term.

E.
theme.

B. symbol. The "swoosh" is a brand symbol associated with Nike. The firm has invested a great deal of time and money in making the swoosh one of the most recognizable brand symbols in the world.

__________ is the number of items within a product line.

A.
Brand equity

B.
Product line breadth

C.
Product line depth

D.
Product mix depth

E.
Product mix breadth
Product line depth is the number of items in a product line. Firms make strategic decisions about the appropriate product line depth based on their resources and objectives.

C. Product line depth Product line depth is the number of items in a product line. Firms make strategic decisions about the appropriate product line depth based on their resources and objectives.

Zappos is a successful online shoe company. One of the difficulties in running a shoe company is the need to have significant __________, a large number of items in each product line.

A.
brand equity

B.
product line breadth

C.
product line depth

D.
product mix depth

E.
product mix breadth

C. product line depth Product line depth is the number of items in a product line. Zappos promises its customers a huge selection, and so it must maintain great product line depth.

Marketers with successful brands sometimes hesitate to expand their brands because

A.
Federal Trade Commission regulations limit the number of products that can be marketed under an individual brand name.

B.
it is costly to maintain many product lines, and it might weaken the brand’s meaning.

C.
it is often difficult to get additional marketing communications coverage for the brand.

D.
manufacturing divisions usually control brand expansion and are often in conflict with the marketing division.

E.
the current economy can only support a limited number of product options.

B. it is costly to maintain many product lines, and it might weaken the brand’s meaning. Each product line involves some additional cost, and if too many product lines are associated with the same brand, it can weaken the brand’s meaning and reputation.

Which of the following scenarios is NOT a reason a firm would eliminate an item within a product line?

A.
The firm decided to refocus marketing efforts elsewhere.

B.
The firm must respond to evolving markets.

C.
The product undermined its own brand.

D.
The product being eliminated is unprofitable.

E.
The firm has decided to capture new markets.
All of these are reasons firms might decide to delete a product from a product line, except the desire to capture new markets.

E. The firm has decided to capture new markets. All of these are reasons firms might decide to delete a product from a product line, except the desire to capture new markets.

For many years, General Electric’s corporate strategy was to be among the top three firms in any market in which it operated; if it could not achieve a top-three position, it would exit the market. This strategy often resulted in the company __________ when certain product lines failed to meet this expectation.

A.
increasing product line depth

B.
decreasing product line depth

C.
decreasing product mix breadth

D.
increasing product mix breadth

E.
introducing brand extensions

C. decreasing product mix breadth If GE could not achieve first, second, or third place in a market, it would eliminate a product line, which decreases the product mix breadth.

The decision to delete a product is never taken lightly because, generally, manufacturers have

A.
offered the product line to other firms for purchase.

B.
made substantial investments in product development and manufacturing.

C.
promised consumers they will maintain the product.

D.
used brand repositioning to improve results.

E.
federal standards that must be met when taking products off the market.

B. made substantial investments in product development and manufacturing. Firms invest in developing new products, and they will not walk away from that investment lightly

A university that has separate graduate and undergraduate admission offices recognizes that these are distinct

A.
brand associations.

B.
product lines.

C.
product mixes.

D.
brands.

E.
augmented services.
Graduate and undergraduate programs at most universities are distinct product lines, with each product line including multiple degrees.

B. product lines. Graduate and undergraduate programs at most universities are distinct product lines, with each product line including multiple degrees.

One important purpose of a brand is to

A.
sell advertising space.

B.
minimize product line depth needed to be effective.

C.
increase consumer recognition and awareness of product offerings.

D.
inform product packaging.

E.
meet government regulations.

C. increase consumer recognition and awareness of product offerings. Brands help consumers know what products are available under that name.

Marketers spend billions of dollars annually attempting to build effective brands. One basic benefit of a brand is that it

A.
creates a basis for effective packaging.

B.
provides a way for a firm to differentiate its product offerings from competitors.

C.
offers consumers promotional parity.

D.
allows manufacturers to capitalize on promotional expenditures.

E.
reduces the need for product line depth.

B. provides a way for a firm to differentiate its product offerings from competitors. Brands are intended to differentiate a firm’s offerings from those of its competition.

For a brand name to be effective, it needs to be

A.
easy for consumers to recognize and remember.

B.
a catchy, tongue-twisting phrase.

C.
a visual image containing human characters.

D.
generic, so it can be applied to as many products as possible.

E.
associated with a sports or movie superstar.
A brand name should be memorable and easy to recognize, in general.

A. easy for consumers to recognize and remember. A brand name should be memorable and easy to recognize, in general.

One key feature of the value of a strong brand is that

A.
it can protect the firm from competition.

B.
it no longer needs to be supported by advertising and promotion.

C.
if it becomes a generic name, the brand is worth even more.

D.
it cannot be successfully imitated by a retailer’s own brand.

E.
competitors will typically abandon a sector altogether rather than compete.

A. it can protect the firm from competition. Strong brands protect the firm somewhat from competition because the brand differentiates the firm’s products, making customers more loyal.

When consumers associate a brand with a certain level of quality and familiar attributes, allowing consumers to make quick decisions, the brand

A.
establishes novelty.

B.
is the only one the consumer will consider.

C.
reduces delivery costs.

D.
facilitates purchasing.

E.
creates brand dilution.

D. facilitates purchasing. A brand can facilitate purchasing because the customer can quickly recognize it and decide whether to purchase it based on brand associations.

Parents of young children have been known to drive out of their way so their kids will not see McDonald’s Golden Arches and plead with their parents to stop. For McDonalds, the Golden Arches reduce marketing costs because people (including young children)

A.
have memorized the McDonald’s menu.

B.
prefer yellow to other colors.

C.
know what the Golden Arches brand symbol means.

D.
recognize increases in product line depth.

E.
are sensitive to brand repositioning.

C. know what the Golden Arches brand symbol means. The Golden Arches are a brand symbol for McDonald’s. The company has invested in ensuring that consumers recognize the symbol and associate it with the brand.

Firms that use the same brand name for new products can spend relatively less on marketing costs for the new product because

A.
brands protect corporate copyrights.

B.
consumer loyalty can be bought for less now compared to the past.

C.
brand equity can only be obtained by means of product line depth.

D.
people already know what the brand means.

E.
well-known brands are less likely to introduce brand extensions.

D. people already know what the brand means. Once a brand has established strong associations with its name, the firm may be able to spend less on promoting new products since consumers already recognize the brand and know what it stands for.

Brands are assets that can be legally protected through

A.
copyrights and trademarks.

B.
financial reporting.

C.
brand extensions.

D.
generic branding.

E.
corporate branding strategies.

A. copyrights and trademarks. Brands can be legally protected through copyrights and trademarks.

A __________ brand is one where there is a contractual arrangement between firms allowing one to use its brand name for a fee.

A.
franchise

B.
joint venture

C.
shared

D.
common use

E.
licensed

E. licensed This is the definition of a licensed brand, such as Ralph Lauren, which firms pay a fee to use.

The value of a brand is often calculated by assessing the

A.
difference between brand equity and brand liability.

B.
corporate profitability divided by the monthly brand earnings.

C.
earning potential of the brand over the next 12 months.

D.
effect of brand dilution if it occurred.

E.
average product line depth.

C. earning potential of the brand over the next 12 months. Earnings potential over the next year offers a rough estimate of a brand’s value.

Brand __________ is the set of assets and liabilities linked to a brand that add to or subtract from the value provided by the product or service.

A.
positioning

B.
licensing

C.
association

D.
equity

E.
solvency

D. Equity definition of brand equity

Many former Enron professionals who had nothing to do with the corporate scandal found that listing employment with Enron hurt their chances of being hired elsewhere. For these people, the Enron name has

A.
no brand associations.

B.
unspent brand loyalty.

C.
private label impact.

D.
brand dilution.

E.
negative brand equity.

E. negative brand equity. The Enron name has negative brand equity for some people, such that some former Enron employees were viewed negatively due to their association with the brand.

Firms spend millions of dollars annually to build brand equity, that recognizing brand equity contributes to

A.
product mix breadth.

B.
corporate stakeholder relations.

C.
profitability.

D.
brand liability.

E.
perceived brand personality.

C. profitability. Brands are assets that can produce profits if brand equity is built successfully.

Which of the following is NOT one of the four criteria used for determining how good a brand is or how much equity it has?

A.
brand awareness

B.
brand loyalty

C.
brand associations

D.
brand conceptualization

E.
perceived value

D. brand conceptualization Brand awareness, brand loyalty, brand associations, and perceived value are the four primary criteria used to evaluate brand equity.

If many consumers in the marketplace are familiar with a brand and what it stands for and have an opinion about the brand, the brand has considerable

A.
awareness.

B.
equity.

C.
extension.

D.
integration.

E.
co-branding.

If many consumers in the marketplace are familiar with a brand and what it stands for and have an opinion about the brand, the brand has considerable A. awareness

Whether they like them or not, most U.S. automobile customers are familiar with and have an opinion about American-made cars. This familiarity makes it easier for consumers to

A.
meet their self-actualization needs.

B.
make purchase decisions.

C.
consider repositioning their opinions.

D.
pursue generic alternatives.

E.
negotiate discounts.

B. make purchase decisions. Familiarity with brands helps consumers to make purchase decisions because they are aware of what the brands stand for and can use this information to make an appropriate choice.

Sometimes brand names become synonymous with a product itself. If that happens, the brand

A.
has achieved brand stabilization.

B.
could lose its trademark status.

C.
should try co-branding to avoid brand dilution.

D.
should consider a new packaging strategy.

E.
easily eliminates all competition.

B. could lose its trademark status. Brand names that become synonymous with the product—like Kleenex, Clorox bleach, and Scotch tape—must protect against the use of the brand name in a generic fashion, or they may lose their trademark on the name.

In the case of Band-Aid adhesive bandages, the brand name has

A.
successfully employed private label branding.

B.
distinctive brand substitutability.

C.
grown through private label branding.

D.
become synonymous with the product itself.

E.
avoided brand extensions.

D. become synonymous with the product itself. Brand names that become synonymous with the product must protect against the use of the brand name in a generic fashion, or they may lose their trademark on the name.

Salina is working to create greater brand awareness for her company’s new line of personal digital assistants. To increase brand awareness, the LEAST important information that should be included in promotions is

A.
the brand name.

B.
the logo.

C.
the packaging.

D.
the slogan.

E.
the product history.

E. the product history. The brand name, logo, packaging, and slogan are all important in creating brand awareness.

Why would a firm spend over $2 million for a 30-second ad on television during the Super Bowl?

A.
because of the annual competition for the most creative Super Bowl ad

B.
because the Super Bowl offers an opportunity to create significant brand awareness

C.
because the Super Bowl is a significant opportunity to be associated with global marketing

D.
because Super Bowl ads generate brand loyalty

E.
There is no good reason to spend over $2 million for a Super Bowl ad

B. because the Super Bowl offers an opportunity to create significant brand awareness Some firms might agree that it doesn’t make sense to spend so much money on a Super Bowl ad; however, the Super Bowl offers a huge TV audience and, with it, a major opportunity to build brand awareness.

Relatively few consumers like to go to the dentist. Dental insurance plans that pay for regular checkups increase the __________ of dental care by reducing the cost to the consumer.

A.
perceived value

B.
brand awareness

C.
brand loyalty

D.
generic positioning

E.
brand extension

A. perceived value The perceived value of a good or service is the relationship between its benefits and its costs. By reducing the cost, the value will be seen to be greater.

In a competitive market, perceived value is determined by consumers mostly

A.
by quantitative analysis of brand personalities.

B.
in relationship to the value of competitors’ offerings.

C.
by weighing primary versus secondary benefits.

D.
by trying out different products.

E.
through brand association and brand licensing.

B. in relationship to the value of competitors’ offerings. The perceived value of a good or service is the relationship between its benefits and its costs. In a competitive market, these benefits and costs will be easiest to evaluate in comparison to competitive offerings.

Nora is deciding whether to purchase brand name sneakers or a store brand. She has purchased other shoes with the same brand name in the past but was only marginally satisfied. In this situation, Nora is likely to purchase the store brand sneakers because they offer

A.
more brand awareness.

B.
higher degrees of brand loyalty.

C.
greater perceived value.

D.
a better brand image.

E.
more product line depth.

C. greater perceived value. Since Nora’s past experience with name brands has been marginal, she might prefer to buy the store brand, which is probably less expensive and might therefore provide better value.

Matt was passionate about Abercrombie & Fitch. It was the only place he’d buy his clothes. If anyone asked him about clothes, he would talk for what seemed like hours about why he only shopped there. From a strictly marketing perspective, this word of mouth is an element of

A.
social marketing.

B.
brand loyalty.

C.
self-actualization.

D.
motivation.

E.
brand extension.

B. brand loyalty. Matt’s word of mouth behavior is an outcome of his brand loyalty.

Jenna always buys Stacy’s brand pita chips. She does not even consider alternatives. Jenna is a __________ customer.

A.
price sensitive

B.
brand persuasion oriented

C.
brand association oriented

D.
brand extension oriented

E.
brand loyal

E. brand loyal Since Jenna does not consider other brands, she is brand loyal.

Laura prefers Sony products and will only purchase alternatives when there are no Sony products available. Laura’s brand loyalty means she is most likely

A.
relatively insensitive to price.

B.
uninformed about the product category.

C.
product category committed.

D.
a brand equity investor.

E.
a savvy consumer.

A. relatively insensitive to price. Because Laura is loyal to Sony, she is likely to stay with the brand even if the price rises or if competitors offer cheaper options. This means that she is less price sensitive.

For marketers, one of the benefits of having achieved brand loyalty is

A.
recognition through industry awards.

B.
lower marketing costs associated with reaching loyal customers.

C.
increased price sensitivity among loyal customers.

D.
greater concern about competitors’ actions.

E.
few worries about copyright infringement.

B. lower marketing costs associated with reaching loyal customers. Brand loyal customers are already convinced of the brand’s value. It is not necessary to spend large sums of money to build awareness and preference for the brand among these customers.

Lionel Smith Ltd. is a traditional men’s clothing store. Every fall the owner sends an embossed invitation (much like a wedding invitation) to his regular customers, inviting them to a private reception showing the new fall line of clothes. For Lionel Smith Ltd., one of the benefits of having established a loyal customer base is

A.
recognition through industry awards.

B.
lower marketing costs associated with reaching loyal customers.

C.
that he can be less concerned about competitors’ actions.

D.
increased price sensitivity among loyal customers.

E.
less need for concern about product quality.

C. that he can be less concerned about competitors’ actions. Loyal customers are less likely to switch brands due to competitor actions.

One of the major tools used by marketers to meet the needs of loyal customers is

A.
SKU.

B.
PDQ.

C.
IMF.

D.
CRM.

E.
GATT.

D. CRM. CRM (customer relationship management) programs often include reward programs aimed at loyal customers.

Frequent buyer/user award programs are used to

A.
increase price sensitivity.

B.
decrease co-branding costs.

C.
lower licensing fees.

D.
expand product line depth.

E.
maintain contact with loyal customers.

E. maintain contact with loyal customers. Frequent buyer programs and similar loyalty programs are often part of a CRM (customer relationship management) program.

A personal digital assistant programmed with key customers’ birthdates, wine preferences, and food allergies is a(n) __________ tool.

A.
SKU

B.
PDQ

C.
IMF

D.
CRM

E.
GATT

D. CRM Keeping track of customers’ preference enhances the relationship and increases brand loyalty, all part of customer relationship management (CRM).

Brands can be owned by

A.
manufacturers only.

B.
any firm in the supply chain.

C.
retailers only.

D.
wholesalers and retailers only.

E.
only private label generic retailers.

B. any firm in the supply chain. Any firm in the supply chain—manufacturer, retailer, distributor, and so on—can own a brand.

Another name for a manufacturer’s brand is a(n) __________ brand.

A.
systematic

B.
extended

C.
national

D.
premium

E.
private-label

C. national The terms "manufacturer’s brand" and "national brand" both refer to brands owned and managed by manufacturers.

Which of the following is the best example of a family brand?

A.
Cadillac, GMC, and Chevrolet

B.
Tostitos Multigrain Scoops and Tostitos Chunky Salsa

C.
Kellogg’s Special K and Famous Amos Chocolate Chip Cookies

D.
Lifesavers Soda, Coca Cola, and Diet Coke

E.
KFC/Taco Bell Fast Foods

B. Tostitos Multigrain Scoops and Tostitos Chunky Salsa A firm can use its own corporate name to brand all its product lines and products, referred to as a family brand.

The basic reason manufacturers spend time and money building their own brands is to

A.
create brand awareness.

B.
build brand equity.

C.
offset the power of private label manufacturers.

D.
create positioning possibilities for their generic product lines.

E.
maximize product line depth.

B. build brand equity. Companies invest in brands to build brand equity, which is a corporate asset.

Procter & Gamble is a huge national brand manufacturer. By having leading brands like Tide and Crest, P&G

A.
can monopolize store brands.

B.
has greater opportunity to dictate retail pricing.

C.
has greater control over marketing strategy.

D.
can increase brand dilution.

E.
can eliminate any local competition.

C. has greater control over marketing strategy. Brand ownership gives the owner greater control over marketing strategy—the ability to position the brand and to establish the marketing mix.

Brands that are owned by ___________ are called private-label brands.

A.
manufacturers

B.
wholesalers

C.
supply chain specialists

D.
retailers

E.
manufacturer’s reps

D. retailers Brands owned by retailers are called store brands, house brands, own brands, or private-label brands.

________ is another term for private-label brands.

A.
Store brands

B.
Off brands

C.
Manufacturer brands

D.
National brands

E.
Experiential brands

A. Store brands Private-label brands are also referred to as retailer or store brands.

Private-label brands are developed and managed by

A.
manufacturers.

B.
wholesalers.

C.
supply chain specialists.

D.
manufacturer’s reps.

E.
retailers.

\E. retailers. Private-label brands are brands developed by retailers.

Consumers might not realize that Old Spice health and wellness products and Iams pet nutrition products are made by the same company—Procter & Gamble. Old Spice and Iams are known as

A.
individual brands.

B.
family brands.

C.
corporate brands.

D.
traditional brands.

E.
registered brands.

A. individual brands. Old Spice and Iams are individual brands, separate brand names for different product lines.

When Procter & Gamble added teeth whitening products under the Crest brand, the firm was engaged in

A.
corporate branding.

B.
brand extension.

C.
brand licensing.

D.
brand association.

E.
perceived value branding.

B. brand extension. This was a brand extension, using the Crest brand name for a new product line.

Brand extension is a popular marketing strategy because

A.
it separates out the cost of brand extension from brand intention.

B.
it allows the firm to discontinue complementary products.

C.
the firm can spend less on creating brand awareness and associations.

D.
it avoids the problem of brand dilution.

E.
it guarantees success for a new product.

C. the firm can spend less on creating brand awareness and associations. Since consumers are already familiar with the brand name, existing awareness and associations will transfer to the new product.

The potential benefits of brand extension do NOT include

A.
allowing the perception of a brand with a quality image to be carried over to the new product.

B.
lowering marketing costs.

C.
boosting sales of the core brand.

D.
spending less on creating brand awareness and associations.

E.
eliminating competition.

E. eliminating competition. Since consumers are already familiar with the brand name, existing awareness and associations will transfer to the new product. In addition, benefits may transfer back to the core brand and increase its sales.

One of the categories of products for which brand extension is especially logical is

A.
generic goods.

B.
generic services.

C.
commodities.

D.
complementary goods.

E.
licensed brands.

D. complementary goods. Complementary products are those that are used together—for example, chips and dip, or toothbrushes and toothpaste. It can often make sense to extend a brand to offer a complementary product under the same brand name.

Jake developed a toothpaste using only natural ingredients, and he has been quite successful selling the product in health food stores and some grocery stores. He has recently developed a toothbrush using bamboo and natural components. Jake is considering a __________, giving the toothbrush the same brand name as the toothpaste to have greater brand awareness.

A.
co-brand

B.
brand extension

C.
premium brand

D.
joint brand

E.
natural brand

B. brand extension If Jake gives the toothbrush the same brand name as his existing toothpaste, this is a brand extension, adding a new product line (toothbrushes) to his existing brand.

Brand dilution occurs when

A.
customers see the fit between products sharing the same brand name.

B.
there are too few products and product categories.

C.
new brands compete with existing brands.

D.
brands are overextended and customer perceptions about the core brand are adversely affected.

E.
brand names seem too old-fashioned or familiar.

D. brands are overextended and customer perceptions about the core brand are adversely affected. Brand dilution (the weakening of brand equity) can occur when brands are extended too much or in inappropriate ways.

Marco tried a new fruit-flavored beverage and thought it was awful. He was especially disappointed because he had liked the dried fruit snacks marketed under the same brand name. Now he wasn’t sure he even wanted to buy the snacks he had liked before. This highlights a problem in branding known as

A.
brand dilution.

B.
commingled brands.

C.
undifferentiated brands.

D.
approximated brands.

E.
unlicensed brands.

A. brand dilution. This is an example of brand dilution—the weakening of the core brand due to extensive or inappropriate extensions.

__________ occurs when the brand extension adversely affects consumer perceptions about the attributes of the core brand.

A.
Corporate branding

B.
Brand extraction

C.
Brand collusion

D.
Brand personality destruction

E.
Brand dilution

E. Brand dilution This is the definition of brand dilution.

Toyota, a well-established, reputable brand, recently introduced a new line of vehicles under the Scion brand, targeted at young car buyers. Toyota probably used the new brand to

A.
lower advertising costs.

B.
appeal to a different market segment.

C.
reinforce the Toyota brand image.

D.
exploit brand loyalty to Toyota.

E.
lower product development costs.

B. appeal to a different market segment. Toyota probably chose to use a new brand to target young people.

Marketers with luxury brands use brand extension cautiously to avoid

A.
brand licensing fees.

B.
exclusive co-branding arrangements.

C.
diluting the core brand.

D.
private label branding disputes.

E.
product line extension limitations.

C. diluting the core brand. If brand extensions are not executed carefully, they can dilute the core brand by damaging its associations and equity.

Shell MasterCard, created cooperatively by Shell Oil Company and Master Card, is an example of

A.
co-branding.

B.
brand extraction.

C.
brand collusion.

D.
a generic brand.

E.
brand dilution.

A. co-branding. This is a co-branding arrangement, in which two brands lend their names to a cooperative venture.

Efforts to change a brand’s focus to target new markets or change the image of a brand are called

A.
co-branding.

B.
brand extraction.

C.
brand collusion.

D.
brand repositioning.

E.
brand dilution.

D. brand repositioning. Efforts to change the brand’s focus or image are referred to as brand repositioning or rebranding.

Another name for brand repositioning is

A.
strategic brand alteration.

B.
change management.

C.
rebranding.

D.
perception tracking.

E.
brand scaling.

C. rebranding. Efforts to change the brand’s focus or image are referred to as brand repositioning or rebranding.

lla had been using an imported brand of shampoo for several years, but she could no longer find it anywhere. As she was considering what kind of shampoo to try, she was surprised to see ads for Procter & Gamble’s Head & Shoulders being promoted as a glamorous health-oriented product. She had always thought of Head & Shoulders as an anti-dandruff shampoo. The new ads suggest that Head & Shoulders has been

A.
rebranded.

B.
reformulated.

C.
licensed to a premium shampoo manufacturer.

D.
extended as a brand.

E.
co-branded.

A. rebranded. Head & Shoulders has been rebranded (also referred to as brand repositioning) to give it a health-oriented image. Although that it may have been reformulated, it is equally likely that the rebranding consists strictly of changes in positioning and marketing communications.

Which of the following is NOT true regarding secondary packaging?

A.
It can provide information to consumers not found on the primary packaging.

B.
It is important to the retailer in terms of convenience in handling.

C.
It can be an important positioning tool to convey the brand image.

D.
It can allow for cost efficiencies due to larger order and shipment sizes.

E.
It is of little value to the average consumer.

E. It is of little value to the average consumer. Secondary packaging—the wrapper or exterior carton that contains the primary package—fills many roles, including all of those listed here. It is therefore of value to the consumer.

A __________ package is the one a consumer uses. A __________ package is used by retailers to display and sell the product.

A.
secondary; primary

B.
generic; private label

C.
primary; secondary

D.
corporate; manufacturer’s

E.
co-branded; licensed

C. primary; secondary The primary package is the package the consumer uses (for example, a toothpaste tube), whereas the secondary package is used by retailers to display the product (for example, the box the toothpaste tube comes in).

Which of the following is NOT one of the important functions of labels on products and packages?

A.
protecting against damage to the product

B.
providing consumer information to assist in purchasing

C.
identifying the brand and building brand image

D.
promoting the brand or complementary brands

E.
listing ingredients

A. protecting against damage to the product The package might protect against damage to the product, but that is not a function of the label.

What U.S. government agency has primary responsibility in reviewing food and package labels to ensure claims made by the manufacturer about the product are true?

A.
Federal Trade Commission

B.
Federal Communications Commission

C.
Consumer Product Safety Administration

D.
Food and Drug Administration

E.
Interstate Commerce Commission

D. Food and Drug Administration The U.S. Food and Drug Administration has primary responsibility for reviewing food and package labels.

One of the advantages of selling specialty goods and services is that when consumers want them, they will

A.
question the price.

B.
consider many alternatives.

C.
search for them.

D.
perceive greater performance risk.

E.
expect them to be offered conveniently.

C. search for them. Specialty products are those for which customers show such a preference that they will invest effort in finding them.

Zappos, an online shoe company, knows shoes are typically a(n) __________ good, with consumers often spending time comparing alternatives. They overcome that aspect of consumers’ search process by offering a free, no questions asked return policy.

A.
specialty

B.
shopping

C.
convenience

D.
ritual

E.
impulse

B. shopping Shoes are typically a shopping good, where consumers compare alternatives.

Marketers selling milk, bread, and other consumer staples know most customers do not spend much time searching or comparing alternatives. For most consumers, these are _____________ goods.

A.
specialty

B.
shopping

C.
convenience

D.
ritual

E.
impulse

C. convenience Milk, bread, and other consumer staples are convenience goods for most shoppers. They will not compare many alternatives, but will simply purchase what they need.

Andy likes gourmet popcorn and will spend time trying to find his favorite brand. His girlfriend, Joanne, loves popcorn but doesn’t care about brands. For Andy, popcorn is a __________ good while for Joanne it is a __________ good.

A.
shopping; specialty

B.
convenience; shopping

C.
convenience; specialty

D.
specialty; convenience

E.
unique; universal

D. specialty; convenience For Andy, popcorn is a specialty product—he is willing to spend time finding his favorite brand. For Joanne, it is a convenience good—she doesn’t care about brands and so is unlikely to comparison shop.

Marketers need to think about the product offer on three levels. Which of the following levels includes associated services such as warranties, financing, support, and after-sale service?

A.
augmented product

B.
core customer value

C.
actual product

D.
modified product

E.
core product

A. augmented product The augmented product includes associated services such as a warranty and a customer service line dedicated to product support.

Which of the following is NOT part of the "actual product" level of the product offer?

A.
product warranty

B.
features

C.
design

D.
quality

E.
brand name

A. product warranty The "actual product" is made up of the brand name, quality level, packaging, and features and design. The product warranty is one of the associated services included in the augmented product.

When manufacturers try to understand what customers are looking for, they are thinking about the _______ component of the product offer.

A.
core customer value

B.
associated services

C.
augmented products

D.
product support

E.
quality level

A. core customer value The manufacturer is concerned with understanding the core value that the customer seeks.

Suppose that Walgreens (a major drug store chain) wants to introduce its own brand of cough medicine that is similar in contents and packaging to a national brand, but at a lower cost. What kind of brand would Walgreens be introducing?

A.
private-label brand

B.
counterfeit brand

C.
premium brand

D.
national brand

E.
manufacturer brand

A. private-label brand Private-label brands are products developed by retailers.

When a company launches a new product line with an existing brand name, this is known as

A.
a brand extension.

B.
a line extension.

C.
a multi-brand.

D.
a new brand.

E.
co-branding.

A. a brand extension. A brand extension refers to the use of the same brand name for a new product line.

Which of the following brand strategies is being used when the local ice cream shop decides to add a new flavor to its menu?

A.
a line extension

B.
a brand extension

C.
a copycat brand

D.
a premium brand

E.
a multi-brand

A. a line extension A line extension is the use of the same brand name within the same product line and represents an increase in a product line’s depth.

When a restaurant chain, Big Burgers, launches its own brand of frozen meals, this is an example of a

A.
brand extension.

B.
line extension.

C.
licensed brand.

D.
copycat brand.

E.
premium brand.

A. brand extension. A brand extension refers to the use of the same brand name in a different product line.

Which of the following best describes when Johnson & Johnson introduces a travel-sized package for its existing baby oil product?

A.
line extension

B.
brand extension

C.
brand dilution

D.
rebranding

E.
co-branding

A. line extension A line extension is the use of the same brand name within the same product line and represents an increase in a product line’s depth.

What aspect of the product is being described when a used-car salesperson explains that each car comes with a one-year extended warranty and a two-year maintenance plan?

A.
actual product

B.
associated services

C.
product style

D.
product position

E.
product concept

B. associated services Associated services are the nonphysical aspects of the product such as product warranties.

Some credit cards provide free liability insurance, funded by the bank issuing the card, when a customer pays for a rental car using the card. This extra insurance is an example of

A.
product style.

B.
the actual product.

C.
an associated service.

D.
the product position.

E.
the core value.

C. an associated service. Associated services are related to the nonphysical aspects of the product such as product warranties.

When a salesperson calls you to sell a cemetery plot, this is most likely what type of product?

A.
unsought product

B.
shopping product

C.
convenience product

D.
line extension

E.
secondary product

A. unsought product An unsought product or service is a product consumers either do not normally think of buying or do not know about.

Where on a product’s packaging would one most likely find nutrient content and country of origin?

A.
inside the secondary package

B.
inside the primary package

C.
on the company website

D.
on the label

E.
on the store shelf display

D. on the label Product labels may highlight specific ingredients, vitamin content, nutrient content, and country of origin.

About 30% of packaged goods have lost content recently. How have consumers reacted?

A.
A number of lawsuits are pending.

B.
In a few cases, consumer outrage has caused manufacturers to go back to the original packaging.

C.
As long as the price is also reduced, they don’t seem to mind.

D.
Most of the changes have gone unnoticed by consumers.

E.
Consumers have demanded that companies reduce their prices accordingly.

D. Most of the changes have gone unnoticed by consumers. Most of the reductions in content have gone unnoticed by consumers.

What is wrap rage?

A.
customer anger when the outside wrapping does not accurately portray what is inside the package

B.
the reaction of a salesperson when the secondary packaging does not bear a bar code

C.
frustration of a customer when a package is oddly shaped and cannot be easily gift wrapped

D.
a reaction by environmentalists when nonrecyclable materials are used for the secondary packaging

E.
frustration by a customer when the packaging makes it difficult to get at the product

E. frustration by a customer when the packaging makes it difficult to get at the product Many consumers experience wrap rage—a great frustration with packaging that makes it seemingly impossible to get at the actual products.

Why did PepsiCo reduce the weight of its water bottles by 20 percent?

A.
to save money on shipping

B.
to save money on materials

C.
to satisfy environmental groups

D.
to sell more bottles of water

E.
because PepsiCo was concerned about waste from its bottles

\E. because PepsiCo was concerned about waste from its bottles Some packaging changes are designed to make the product more ecological, such as PepsiCo’s response to concerns about the waste associated with bottled water. To reduce the amount of plastic it uses, PepsiCo has decreased the weight of its water bottles by 20 percent.

A toothpaste tube is an example of a ________ package.

A.
primary

B.
secondary

C.
brand positioning

D.
private-label

E.
convenience

A. primary A primary package is the one the consumer uses, such as a toothpaste tube.

When Meg planned her trip to Australia, she spent months evaluating packages, airfares, and hotel accommodations. Meg’s trip is an example of a(n) ________ product.

A.
specialty

B.
convenience

C.
unsought

D.
shopping

E.
sought

D. shopping Since Meg spent significant time comparing alternatives, this would be considered a shopping product.