Chap009 Marketing

Chapter 09
Developing New Products and Services
Multiple Choice Questions
1. Advertising Age named its CEO Marketer of the Decade, Fortune rated it as the
world's most admired company and Bloomberg Businessweek perennially identifies it
as the most innovative company in the world. This firm is
A.
B.
C.
D.
E.
IBM
Microsoft
3M
Kodak
Apple
2. The Apple II, Macintosh, iPod, iPhone, iPad, and CarPlay are all examples of Apple's
commitment to __________.
A.
B.
C.
D.
E.
sustainable procurement
social responsibility
new product development
using renewable resources
respecting its workforce
3. The late Steve Jobs oversaw or invented innovations that revolutionized six
industries. Which industry below is NOT one of them?
A.
B.
C.
D.
E.
music
smartphones
personal computers
cable television
tablet devices
9-1
Copyright 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
4. The Apple innovation that leading car manufacturers are incorporating into their
offering that allows users a "smarter, safer, and more fun way to use iPhone in the
car" is referred to as
A.
B.
C.
D.
E.
iPod
iCloud
iCar
iPad
CarPlay
5. A product refers to
A. a tangible good received in exchange for a person's time and effort.

B. intangible activities or benefits that an organization provides to satisfy consumers'
needs in exchange for money or something else of value.
C. a good that has in some way been altered, combined, or improved and sold to
organizational buyers.
D. is a thought that leads to an action such as a concept for a new invention.
E. a good, service, or idea consisting of a bundle of tangible and intangible attributes
that satisfies consumers' needs and is received in exchange for money or
something else of value.
6. A good, service, or idea consisting of a bundle of tangible and intangible attributes
that satisfies consumers' needs and is received in exchange for money or something
else of value is referred to as __________.
A.
B.
C.
D.
E.
a utility bundle
a product
a service
an idea
merchandise
7. A product is a good, service, or idea consisting of a bundle of tangible and intangible

attributes that satisfy consumers' needs and is received in exchange
A.
B.
C.
D.
E.
only for legal tender (money).

for providing value.
only for barter.
for a person's time and effort.
for money or something else of value.
9-2
8. A product is a good, service, or idea consisting of a(n) __________ that satisfy

consumers' needs and is received in exchange for money or something else of value.
A. promise or commitment exchanged between a seller and a buyer

B.
bundle of tangible and intangible attributes
C.
assortment of value-possessing activities
D.
array of physical attributes
E.
collection of tangible qualities
9. As a marketing term, __________ generally includes not only physical goods, but also
services and ideas as well.
A.
B.
C.
D.
E.
marketing
invention
merchandise
product
concept
10. A good has tangible attributes that a consumer's __________ can perceive.
A.
B.
C.
D.
E.
cognitive intelligence
vision
knowledge of past experiences
five senses
emotional intelligence
11. A product that has tangible attributes that a consumer's five senses can perceive is
referred to as a(n)
A.
B.
C.
D.
E.
good.
service.
product concept.
new idea.
artifact.
12. Goods can be divided into __________ goods and __________ goods.
A.
B.
C.
D.
E.
functional; aesthetic
required; desired
tactile; conceptual
durable; nondurable
product; service
9-3
13. Which of the following statements regarding goods is most accurate?
A. In order to be classified as a good, an item must appeal to all five senses.

B. Music is not considered a good because it only involves a single sense - hearing.
C.
Some goods also have intangible attributes.
D. To market a good that contains visual attributes, you cannot use an auditory
medium.
E. The aroma of chocolate chip cookies is considered an idea because it affects one's
senses.
14. The division of products into durable and nondurable goods helps to __________.
A.
B.
C.
D.
E.
comply with NAICS guidelines

address environmental concerns
comply with ISO 9000 requirements
classify products for tax purposes
provide direction for marketing actions
15. Which of the following statements regarding goods is most accurate?
A. Nondurable goods would rely more on advertising than durable goods.

B. Durable goods would benefit more on advertising than nondurable goods.
C. There is little if any difference between marketing actions between durable and
nondurable goods.
D. Nondurable goods would rely more on personal selling than durable goods.
E. The durable and nondurable classification applies to services as well as to
products.
16. A __________ is defined as an item consumed in one or a few uses.
A.
B.
C.
D.
E.
durable good
convenience good
specialty good
shopping good
nondurable good
17. A nondurable good is defined as a(n)
A.
item consumed in one or a few uses.
B. item that usually lasts over an extended number of uses.
C. item that lasts at least one year without becoming obsolete.
D. product purchased only for the use of ultimate consumers.
E. product used in the production of other products.
9-4
18. Items consumed in one or a few uses, such as food and fuel, are referred to as
__________.
A.
B.
C.
D.
E.
services
perishable goods
durable goods
nondurable goods
disposable goods
19. Among consumer products, advertising and wide distribution are especially important
for
A.
B.
C.
D.
E.
durable goods.
specialty products.
nondurable goods.
production goods.
semidurable goods.
20. Which of the following is the best example of a nondurable good?
A.
B.
C.
D.
E.
laundry detergent
shoes
insurance
iPod
laser surgery
21. Which of the following is the best example of a nondurable good?
A.
B.
C.
D.
E.
automobile
e-reader
baseball
gasoline
shoes
22. Advertising is most important for which of the following products?
A.
B.
C.
D.
E.
bicycle
toaster
orange juice
deck furniture
watch
9-5
23. A durable good is defined as a(n)
A.
B. item that usually lasts over an extended number of uses.
C. item that lasts at least one year without becoming obsolete.
D. product purchased only for the use of ultimate consumers.
E. product used in the production of other products.
24. Products that usually last over many uses, such as cars and appliances, are referred
to as
A.
B.
C.
D.
E.
endurable goods.
nondisposable goods.
imperishable goods.
reliable products.
durable goods.
25. Cars and appliances are classified as
A.
B.
C.
D.
E.
reusable goods.
imperishable goods.
reliable products.
durable goods.
26. Durable goods emphasize which of the following elements of the promotional mix?
A.
B.
C.
D.
E.
sales promotion
personal selling
advertising
public relations
direct marketing
27. Which of the following is considered a durable good?
A.
B.
C.
D.
E.
silverware
caviar
marketing research
chewing gum
voting
9-6
28. Intangible activities or benefits that an organization provides to satisfy consumers'

needs in exchange for money or something else of value are referred to as
__________.
A.
B.
C.
D.
E.
services
goods
products
marketing mix
ideas
29. Services refer to
A. ideas that consist of a bundle of tangible and intangible attributes that satisfies
consumers' needs and is received in exchange for money or something else of
value.
B. intangible activities or benefits that an organization provides to satisfy consumers'
needs in exchange for money or something else of value.
C. philanthropic activities performed in without expectations of monetary
remuneration.
D. any intangible activity that provides a benefit to a consumer that he or she could
not have obtained or performed on his or her own.
E. any tangible activity that provides a benefit to a consumer that he or she could not
have obtained or performed on his or her own.
30. Services are
A. the tangible activities or benefits that an organization provides to satisfy

consumers' needs in exchange for money or something else of value.
B. the activities provided to complement a tangible good, such as technical support
for a computer.
C. the intangible activities or benefits that an organization provides to satisfy
D. any activity required for the production of a good that cannot be completed "inhouse" and must be outsourced to another firm.
E. the human (nonmechanical) component that is part of the manufacturing process.
31. Services contribute how much to the U.S. gross domestic product as compared with
goods?
A.
B.
C.
D.
E.
services contribute about the same

services contribute about half as much
services contribute about twice as much
services contribute about one quarter as much
services are not a component of GDP
9-7
Figure 9-1
32. As shown in Figure 9-1 above, which of the following statements is most accurate?
A. Services are a smaller part of the gross domestic product than are goods.
B. In 2012, goods represent a larger part of the gross domestic product than services.
C.
In 1995, services were worth almost $1 billion.
D. Until 1980, goods and services contributed almost equally to the gross domestic
product (GDP).
E.
In 2012, goods were 50 percent of the GDP.
33. Intangible items such as airline trips, financial advice, or telephone service that an
organization provides to consumers are referred to as
A.
B.
C.
D.
E.
production goods.
support products.
services.
goods.
benefits.
34. Which of the following is considered a service?
A.
B.
C.
D.
E.
lamp
motorcycle
potato chips
a marketing class
environmentalism
9-8
35. Which of the following is considered a service?
A.
B.
C.
D.
E.
online banking
bathing suit
silverware
washing machine
freedom
36. Which of the following statements about services is most accurate?
A. Although a major contributor to the GDP nationally, services play only a minor role
in GDP on a global scale.
B. The marketing of services is, in a practical sense, identical to the marketing of
products or ideas since they both satisfy customer needs.
C. Only 10% of all jobs created in the United States are in the services sector.
D. In the U.S., services contribute about twice the value of goods to the GDP.
E. There is much more in common with the marketing of services and business
products than there is between the marketing of services and consumer products.
37. In marketing, an idea is
A.
a thought that leads to a product or action.
B. an inspiration that evolved from market research.
C.
an observation about a series of events.
D. a concept explaining the behavior of an individual or group.
E. an observation about an individual or group and how they use a service or
product.
38. In marketing, a(n) __________ is a thought that leads to a product or action.
A.
B.
C.
D.
E.
observation
inspiration
innovation
idea
perception
39. Which of the following is considered an idea?
A.
B.
C.
D.
E.
haircut
birdfeeder
theater production
marketing class
security
9-9
40. Consumer products refer to
A. products used in the production of other items.

B. products purchased by the ultimate consumer.
C. products an industrial buyer will make an effort to seek out and buy.
D. items purchased frequently and with a minimum of shopping effort.
E. products that assist directly or indirectly in providing products for resale.
41. Products that are purchased by the ultimate consumer are referred to as __________.
A.
B.
C.
D.
E.
generic products
end user goods
personal items
merchandise
consumer products
42. Which of the following would most likely be considered a consumer product?
A.
B.
C.
D.
E.
bricks
cotton fiber
printing press
suitcases
mainframe computer
43. Products organizations buy that assist in providing other products for resale are
referred to as __________.
A.
B.
C.
D.
E.
reseller goods
wholesale goods
business products
ancillary products
retail products
44. Business products refer to
A.
B.
C.
D.
E.
products organizations buy that assist in providing other products for resale.
supplies necessary for the day-to-day operations of a business.
ancillary services necessary for the operation of a business.
products that are sold exclusively to for-profit businesses.
products purchased by the ultimate consumer.
9-10
45. Business products are also referred to as __________.
A.
B.
C.
D.
E.
B2B products
B2C products
B4B products
BOB products
B4C products
46. Business products are also referred to as __________.
A.
B.
C.
D.
E.
commodities
industrial products
wares
resale products
merchandise
47. Industrial products are also referred to as __________ products.
A.
B.
C.
D.
E.
consumer
merchandise
organizational
resale
business
48. An iMac personal computer from Apple can be classified according to all of the
following categories EXCEPT:
A.
B.
C.
D.
E.
a business product.
a nondurable good.
a B2B product.
a durable good.
a consumer product.
49. Consumer product classifications differ in terms of the: (1) effort the consumer
spends on the decision; (2) frequency of purchase; and (3) the
A. amount of money the customer is willing and able to spend.

B.
number of competing or substitute products.
C.
demographics of the consumer.
D. attributes used in making the purchase decision.
E.
consumer segmentation characteristics.
9-11
50. Convenience products refer to
A. items that consumers will make special efforts to seek out and buy.
B. items for which consumers compare several alternatives on criteria such as price,
quality, or style.
C. products consumers purchase frequently and with a minimum of shopping effort.
D. ancillary products used to make other products work more efficiently.
E. low-cost items for which there are numerous substitutes and generic equivalents.
51. In terms of price, which of the following types of consumer product would be
relatively inexpensive?
A.
B.
C.
D.
E.
shopping product
convenience product
specialty product
unsought product
supplies
52. With respect to distribution, convenience products are available
A.
B.
C.
D.
E.
at relatively few outlets.

at a large number of specialty outlets.
only online from the manufacturer.
only at convenience stores.
on a widespread basis at many outlets.
53. In terms of promotion, which of the following type of product would stress price,
availability, and awareness?
A.
B.
C.
D.
E.
shopping
convenience
specialty
unsought
supply
54. In terms of brand loyalty, consumers are aware of a brand but will readily accept
substitutes for which type of product?
A.
B.
C.
D.
E.
convenience products
specialty products
unsought products
shopping products
supplies
9-12
55. Which of the following is the best example of a convenience product?
A.
B.
C.
D.
E.
Kindle Fire
Lexus LS 460 luxury automobile
flight on United Airlines
Roget's Thesaurus
Hidden Valley Ranch salad dressing
56. Items for which the consumer compares several alternatives on several criteria such
as price, quality, or style are referred to as __________.
A.
B.
C.
D.
E.
specialty products
selective products
shopping products
prestige products
57. Shopping products refer to items that the consumer
A.
B.
C.
D.
E.
purchases frequently, conveniently, and with a minimum of effort.

compares several alternatives on criteria such as price, quality, or style.
makes a special effort to search out and buy.
does not know about or knows about but does not initially buy.
buys as a result of buying others' consumer products, such as impulse purchases.
58. The type of good for which the consumer compares several alternatives on such
criteria as price, quality, and style is a(n)
A.
B.
C.
D.
E.
shopping product.
convenience product.
specialty product.
unsought product.
B2B product.
59. Which type of consumer product is purchased relatively infrequently and the
purchase decision takes some time because the consumer compares offerings during
the shopping experience?
A.
B.
C.
D.
E.
convenience product
shopping product
specialty product
unsought product
discretionary product
9-13
60. With respect to distribution, shopping products are available
A.
B.
C.
D.
E.
by special order from the manufacturer.

at an extremely small number of outlets.
at a large number of selective outlets.
61. With respect to price and availability, shopping products are likely to be
A.
relatively inexpensive and widely available.
B. relatively inexpensive but very limited availability.
C. very expensive and available at a large number of selective outlets.
D.
very expensive with very limited availability.
E. fairly expensive and available at a large number of selective outlets.
62. In terms of promotion, which of the following type of consumer product stresses
product differentiation from competitors?
A.
B.
C.
D.
E.
shopping product
convenience product
specialty product
unsought product
63. In terms of brand loyalty, consumers prefer specific brands but will accept substitutes
for which type of consumer product?
A.
B.
C.
D.
E.
shopping product
convenience product
specialty product
unsought product
9-14
64. You decide to buy a new car. You talk to friends about it, research mechanical
specifications in Consumer Reports, test drive different makes and models, and
compare prices at several dealerships. Into which classification of consumer products
would your new car purchase fall?
A.
B.
C.
D.
E.
specialty product
unsought product
shopping product
convenience product
65. Specialty products refer to
A. products for which there are no close substitutes.

B. products purchased for their prestige or high perceived value.
C. products a consumer will make a specific effort to search out and buy.
D. items for which the consumer compares several alternatives on several criteria
such as price, quality, or style.
E. items that the consumer does not know about or knows about but does not initially
buy.
66. Which type of consumer product is purchased infrequently and takes an extensive
amount of time to make the purchase decision?
A.
B.
C.
D.
E.
convenience product
shopping product
specialty product
unsought product
67. With respect to price, which of the following type of consumer product would usually
be very expensive?
A.
B.
C.
D.
E.
convenience product
shopping product
specialty product
unsought product
9-15
68. Distribution is very limited with which of the following type of consumer product?
A.
B.
C.
D.
E.
shopping product
convenience product
prepurchase product
specialty product
69. In terms of promotion, which of the following type of consumer product stresses
status and brand uniqueness?
A.
B.
C.
D.
E.
specialty product
convenience product
shopping product
unsought product
70. In terms of brand loyalty, consumers are very brand loyal and will not accept
substitutes for which type of consumer product?
A.
B.
C.
D.
E.
shopping product
convenience product
specialty product
unsought product
71. You greatly admire a set of Waterford crystal serving bowls you see at a dinner party
and decide to buy two despite their cost of $250 each. They are only available in your
area in a Waterford shop 40 miles from campus. Into which classification of consumer
products would the Waterford crystal serving bowls fall?
A.
B.
C.
D.
E.
shopping products
unsought products
specialty products
discretionary products
9-16
72. Burberry makes fine raincoats, clothing, and other items, many that feature the
company's distinctive plaid. Originally found only in Great Britain, Burberry has
opened a limited number of exclusive shops in leading cities around the world to
reach customers who value its name and quality. Burberry is selling which
classification of consumer product?
A.
B.
C.
D.
E.
convenience product
shopping product
unsought product
specialty product
73. Unsought products are
A. any products associated with impulse buys at the supermarket checkout counter.
B. products that were once very popular but that have become obsolete because they
are in the decline stage of their product life cycle.
C. items within a company's product line that do not perform as well as others in the
line.
D. products that the consumer does not know about or knows about but does not
initially want.
E. products that people choose to ignore because they find them offensive from a
moral or ethical perspective.
74. Which of the following is most likely to be an example of an unsought product?
A.
B.
C.
D.
E.
snow shovel
smartphone
gym membership
calculator
burial insurance
75. Very infrequent purchases with some comparison shopping are characteristic of the
purchasing behavior for a type of consumer product (such as a thesaurus) that a
prospective buyer may not initially want. This type of consumer service is referred to
as a(n)
A.
B.
C.
D.
E.
unsought product.
shopping product.
specialty product.
support product.
9-17
76. With respect to promotion, which of the following strategies would most likely be
used for unsought products?
A.
B.
C.
D.
E.
offering consumer and trade sales promotions

establishing the uniqueness and status of the brand
generating awareness
differentiating the brand from competitive brands
stressing price and availability in advertising
77. Which of the following is most likely to be an example of an unsought product?
A.
B.
C.
D.
E.
iPod MP3 player

flight on American Airlines to Phoenix
Roget's Thesaurus
Ivory soap
78. A newly-invented apple peeling and coring machine for the consumer market would
be considered a(n)
A.
B.
C.
D.
E.
shopping product.
specialty product.
unsought product.
discretionary product.
79. Fifty percent or more of American adults have not had their teeth checked by a
dentist within the last five years. For these people, dental services would most likey
be classified as a(n)
A.
B.
C.
D.
E.
shopping product.
specialty product.
unsought product.
business product.
9-18
Figure 9-2
80. According to Figure 9-2 above, column A would represent which type of product?
A.
B.
C.
D.
E.
shopping
convenience
specialty
prestige
unsought
81. According to Figure 9-2 above, column B would represent which type of product?
A.
B.
C.
D.
E.
shopping
convenience
specialty
prestige
unsought
82. According to Figure 9-2 above, column C would represent which type of product?
A.
B.
C.
D.
E.
shopping
convenience
specialty
prestige
unsought
9-19
83. According to Figure 9-2 above, column D would represent which type of product?
A.
B.
C.
D.
E.
shopping
convenience
specialty
prestige
unsought
84. Considering the classification of consumer products, which of the following products
will have the most limited distribution?
A.
B.
C.
D.
E.
Secret antiperspirant
Fuji disposable camera
BP gasoline
Marchesa wedding gown
Sony HDTV
85. Vivienne, a college student with limited financial resources, was considering the
purchase of a new automobile. She went from car dealer to car dealer in several
different cities searching for the lowest price on a new economy car. She devoted a
great deal of time and energy to getting the best value for her money. For Vivienne,
an automobile was a(n) __________.
A.
B.
C.
D.
E.
specialty product
unsought product
shopping product
convenience product
86. The demand for a business product that results from the demand for a consumer
product is referred to as
A.
B.
C.
D.
E.
sequential demand.
selective demand.
primary demand.
secondary demand.
derived demand.
9-20
87. Which of the following best illustrates the concept of derived demand?
A. The number of retail stores in a downtown area decreases even though demand for
retail goods increases.
B. An increase in the number of new, single-family homes results from a spike in the
gross national product.
C. A Chinese plastics company increases its output because of its customers' higher
toy exports to the United States.
D. A heat wave results in an increased demand for air conditioners.
E. Honda reducing its car prices causes GM to do the same.
88. Heavy-duty Rayovac flashlights are sold to consumers throughout the United States.
However, Philips manufactures the bulbs used in Rayovac flashlights. The quantity of
bulbs Philips makes is related to how many flashlights Rayovac sells. This is an
example of
A.
B.
C.
D.
E.
a tying arrangement.
reciprocity.
strategic alliance demand.
relationship marketing.
derived demand.
89. The two main classifications of business products are
A.
B.
C.
D.
E.
durable and nondurable products.

components and support products.
tangible and intangible products.
consumer and industrial products.
derived and maintenance products.
90. __________ are items that become part of the final business product.
A.
B.
C.
D.
E.
Components
Accessories
Support products
Production goods
Raw assemblies
9-21
91. Raw materials, such as grain or lumber as well as assemblies or parts, are referred to
as
A.
B.
C.
D.
E.
production goods.
components.
accessories.
support products.
raw assemblies.
92. Installations, accessory equipment, supplies, and industrial services used to assist in
producing other products and services are referred to as __________.
A.
B.
C.
D.
E.
components
parts
production goods
raw materials
support products
93. Products such as tools and repair services that are used to assist in producing other
products and services are referred to as __________.
A.
B.
C.
D.
E.
components
complementary products
support products
derived products
materials
94. The type of business products known as support products includes installations,
accessory equipment, supplies, and __________.
A.
B.
C.
D.
E.
industrial services
components
materials
derived products
9-22
industrial services, supplies, and __________.
A.
B.
C.
D.
E.
accessory equipment
components
derived products
materials
industrial services, accessory equipment, and __________.
A.
B.
C.
D.
E.
components
supplies
materials
derived products
supplies, accessory equipment, and __________.
A.
B.
C.
D.
E.
materials
industrial services
derived products
components
98. Among business products, support products include installations such as
A.
B.
C.
D.
E.
convenience products.
buildings and fixed equipment.
tools and office equipment.
raw materials and component parts.
maintenance, repair, and legal services.
99. Installations are support products that include items such as
A.
B.
C.
D.
E.
copy paper, mechanical pencils, and light bulbs.

welding masks and computers.
warehouses and automated assembly lines.
lumber and engine parts.
janitorial and legal services.
9-23
100 Among business products, which of the following would most likely be considered an
.
installation?
A.
B.
C.
D.
E.
a factory
roof tiles
a cleaning service
a photocopier
a drill press
101 An extremely large machine for producing sheet metal from steel ingots would be
.
classified as which kind of business products?
A.
B.
C.
D.
E.
installations
finished goods
supplies
industrial services
raw materials
102 Accessory equipment are support products that include items such as
.
A.
B.
C.
D.
E.
stationery, paper clips, and brooms.

103 Among business products, support products that include tools and office equipment
.
are referred to as
A.
B.
C.
D.
E.
installations.
supplies.
raw materials.
accessory equipment.
components.
104 Among business products, which of the following would most likely be considered
.
accessory equipment?
A.
B.
C.
D.
E.
copper wiring
a factory
a cleaning service
pneumatic nail gun
ink-jet printer cartridges
9-24
105 Among business products, drafting tables would be best considered which type of
.
support products?
A.
B.
C.
D.
E.
installations
accessory equipment
supplies
industrial services
raw materials
106 Supplies are support products that include items such as

.
A.
B.
C.
D.
E.

107 Among business products, supplies usually consist of

.
A.
B. items used in the manufacturing process and become part of the final product.
C.
D. items such as pens, batteries, and light bulbs.
E.
108 Among business products, printer paper would be classified as which type of support
.
product?
A.
B.
C.
D.
E.
installations
accessory equipment
supplies
industrial services
raw materials
.
supplies?
A.
B.
C.
D.
E.
photocopier
sheet rock
cleaning service
concert hall chairs
9-25
.
supplies?
A.
B.
C.
D.
E.
laser printer
phosphoric acid
cleaning service
magnetic resonance imaging (MRI) scanner
trash bags
111 Industrial services are support products that include items such as
.
A.
B.
C.
D.
E.

112 Among business products, which of the following would most likely be considered an
.
industrial service?
A.
B.
C.
D.
E.
tractor
phosphoric acid
photocopier maintenance
athletic training facility
syringes
113 When a small retail chain hires an accountant to do its income taxes, the retail chain
.
would have purchased a(n) __________.
A.
B.
C.
D.
E.
ancillary service
industrial service
specialty service
accessory service
contractual service
114 Among business products, legal counsel for patent information for a firm's R&D
.
department would most likely be classified as which type of support product?
A.
B.
C.
D.
E.
ancillary services
contractual services
specialty services
accessory services
industrial services
9-26
115 A retail chain hires a company to design and install a computer network that would
.
allow each store in the chain to check the inventory of others in the chain for
customer-requested items. The retail chain purchased which kind of business
products?
A.
B.
C.
D.
E.
accessory equipment
industrial services
supply materials
component parts
installations
116 Services can be classified by

.
A.
B.
C.
D.
E.
their method of delivery.

their use of idle capacity time.
the nature of their ownership.
their location on perceptual maps.
organizational reach.
117 Services can be classified according to whether they are __________, for-profit or
.
nonprofit organizations, or government agencies.
A.
B.
C.
D.
E.
national or global
use independent contractors
privately owned or publicly owned
delivered by people or equipment
owned by individuals or corporations
118 Services can be classified according to whether they are delivered by people or
.
equipment, __________, or government agencies.
A.
B.
C.
D.
E.
national or global
for profit or nonprofit organizations
9-27
119 Services can be classified according to whether they are delivered by people or
.
equipment, whether they are for profit or nonprofit organizations, and whether they
are __________.
A.
B.
C.
D.
E.
government agencies
a national organization or a global organization
performed by independent contractors
Figure 9-3
120 Consider Figure 9-3 above. Services can be classified by their method of delivery. Box
.
A represents
A.
B.
C.
D.
E.
government-delivered services.
people-delivered services.
fee-delivered services.
equipment-delivered services.
nonprofit-delivered services.
121 Consider Figure 9-3 above. Services can be classified by their method of delivery. Box
.
B represents
A.
B.
C.
D.
E.
equipment-based services.
technology-based services.
fee-based services.
people-based services.
nonprofit services.
9-28
122 The categories for people-based services include __________.

.
A.
B.
C.
D.
E.
volunteers, skilled operators, and professionals

unskilled labor, skilled labor, and professionals
unskilled operators, unskilled labor, and skilled labor
automated, skilled operators, and unskilled labor
automated, skilled operators, and professionals
123 Which of the following is the best example of a people-based service?

.
A.
B.
C.
D.
E.
movie theaters
airlines
accounting
vending machines
taxis
124 What do a security guard, a plumber, and a management consultant have in

.
common?
A.
They are all tangible services.
B. They do not have problems with idle production capacity.
C.
They are all equipment-based services.
D.
They are all people-based services.
E.
They never use off-peak pricing.
125 The categories for equipment-based services include __________.
.
A. hand tools, simple machines, complex machines
B. unskilled operators, skilled operators, and professional operators
C. simple machines, technical equipment, and safety equipment
D. those powered by unskilled labor, those operated by skilled operators, and those
operated by professionals
E. automated, those operated by unskilled operators, and those operated by skilled
operators
126 Compared with people-based services, equipment-based services do not have the
.
marketing concern of
A.
B.
C.
D.
E.
intangibility.
insensitivity.
inventory.
inconsistency.
immeasurability.
9-29
127 Equipment-based services do not have the marketing concern of inconsistency

.
because __________ have been removed from the delivery of the service.
A.
B.
C.
D.
E.
risk and product liability

people
learning requirements
automations
accessories
128 Equipment-based services like ATMs, online brokerage firms, and automated car
.
washes, do not have the marketing concern of
A.
B.
C.
D.
E.
inconsistency.
intangibility.
inseparability.
inventory.
independence.
129 Which of the following is the best example of an equipment-based service?

.
A.
B.
C.
D.
E.
lawn care
doctors
taxis
lawyers
janitorial services
130 What do a dry cleaning service, an automated carwash, and a taxi service have in
.
common?
A.
B.
C. None of them has problems with idle production capacity.
D.
E.
131 What do an online travel agency, a limousine service, and a railroad have in
.
common?
A.
They are all strictly tangible services.
B.
C. None of them has a problem with idle production capacity.
D.
E.
They all require skilled operators.
9-30
132 Recently, many nonprofit organizations such as The American Red Cross
.
A. were eager to use marketing practices but were not permitted to do so since they
were 501C3 organizations as classified by the IRS.
B. worried that marketing would limit their profitability as nonprofit organizations.
C.
could not afford marketing activities.
D. have increased their use of marketing practices to improve communication with
constituents.
E. thought that marketing activities would harm demand.
133 The American Red Cross uses marketing to help achieve its goals. As a service, it can
.
be classified as
A.
B.
C.
D.
E.
a nonprofit organization.
equipment-based.
a for-profit organization.
a business firm.
a governmental agency.
134 Sterile Feral, Inc. is a nonprofit organization that catches wild or stray cats. It then
.
neuters, vaccinates, and releases them back into the wild. In recent years, nonprofit
organizations such as Sterile Feral have turned to marketing to help it
A.
receive additional government funding.
B.
expand its business to stray dogs.
C.
maintain its nonprofit status.
D. to achieve its goals of better serving the communities in which it operates.
E.
compete with other similar organizations.
135 What type of organization is the U.S. Forest Service, which manages our national
.
park system?
A.
It is a privately owned firm.
B.
It is a government agency service provider.
C. It is a good-dominate organization on the service continuum.
D.
It is manufacturer's agency.
E.
It is a regional non-profit.
9-31
136 What do the United States Post Service, the Connecticut Department of Social
.
Services, and the Phoenix Fire Department have in common?
A.
They are all privately owned companies.
B.
None fit on the service continuum.
C. They never experience idle production capacity.
D. Capacity management is not an issue for these organizations.
E. They are all government agency service providers.
137 There are four unique elements to services - intangibility, inconsistency,
.
inseparability, and inventory - which are referred to as the __________.
A.
B.
C.
D.
E.
service mix
four I's of services
service matrix
4Ps of services
service continuum
138 The four I's of services consist of

.
A. intangibility, inconsistency, inseparability, and innovation.
B. intangibility, inventory, inflexibility, and impression.
C. intangibility, inconsistency, inseparability, and inventory.
D. intangibility, inventory, innovation, and impression.
E. intangibility, inconsistency, innovation, and impression.
139 The intangibility element of a service refers to the fact that it
.
A. has value that can only be determined by using subjective criteria.
B. can't be held, seen, or touched before the purchase decision.
C. requires the ability to provide the service even in times of no demand.
D. can maintain or accumulate good will with customers.
E.
can be objectively evaluated.
140 Because services tend to be a(n) __________ rather than an object, they are much
.
more difficult for consumers to evaluate.
A.
B.
C.
D.
E.
opportunity
good
risk
decision
performance
9-32
141 Consumers have more difficulty evaluating services than they do products; the
.
difficulty results from the
A.
B.
C.
D.
E.
intangibility of services.
incongruity of services.
inseparability of services.
inflexibility of services.
interdependence of services.
142 To help consumers assess and compare services, marketers try to make them
.
__________ or show the benefits of using the service.
A.
B.
C.
D.
E.
intangible
consistent
tangible
timely
measurable
143 To help consumers assess and compare services, marketers try to make them
.
tangible or __________.
A.
B.
C.
D.
E.
temporal
consistent
adaptable
measurable
show the benefits of using the service
144 Singapore Airlines has advertising that shows a traveler in the airline's new seats and
.
emphasizes food and other amenities to overcome the __________ of its service.
A.
B.
C.
D.
E.
incongruity
inconsistency
inventory costs
inseparability
intangibility
9-33
145 Sarah has a backache due to overexertion. She believes a massage would loosen her
.
back muscles and help her feel better. She is concerned because a massage, unlike a
pair of shoes, cannot be experienced or seen before she buys it. Which characteristic
of services is she concerned about?
A.
B.
C.
D.
E.
incongruity
inconsistency
intangibility
inventory costs
inseparability
146 Before moving out of their apartment, Kelly and Doug decided to have their carpets
.
cleaned by Stanley Steemer, a company specializing in professional carpet cleaning.
The carpet cleaners arrived on time, cleaned the carpets, and drove away in their
bright yellow van; only then did the couple see that they did a good job. Kelly and
Doug were unable to judge the service before they bought it, which illustrates the
__________ of services.
A.
B.
C.
D.
E.
inconsistency
inseparability
inventory costs
intangibility
interdependence
147 To help consumers assess and compare its airline service, Frontier Airlines uses
.
personable animal characters in its advertising to announce and describe benefits,
such as leather seats and stretch seating, to help deal with the
A.
B.
C.
D.
E.
incongruity of the service.

inseparability of the service.
intangibility of the service.
inflexibility of the service.
interdependence of the service.
148 The brochure for Spa Sydell has photographs of people enjoying the various spa
.
amenities. By seeing the pictures of available treatments at the spa, a customer has
a better idea of what she is buying. Spa Sydell uses a brochure to help customers
deal with the __________ that is associated with using the service.
A.
B.
C.
D.
E.
incongruity
inconsistency
inventory costs
inseparability
intangibility
9-34
149 Because services depend on the people who provide them, the quality of a service is
.
often
A.
B.
C.
D.
E.
independent of managerial policies.

inconsistent.
inventoried.
tied to a product.
independent of the quality delivered.
150 Services depend on the people who provide them. As a result, their quality varies
.
with each person's capabilities and day-to-day job performance. This element of
services is referred to as __________.
A.
B.
C.
D.
E.
incongruity
differentiation
variation
inconsistency
intangibility
151 Inconsistency of services refers to the fact that

.
A. there is no regulation of service industries in terms of basic standards of quality.
B. the quality of service provided by a firm is often inconsistent with its image.
C. the performance of one employee may vary from the performance of another
employee even though the same firm employs both.
D. training and standardization of service delivery procedures cannot be
accomplished.
E.
services have a varying degree of durability.
152 Developing, pricing, promoting, and delivering services are challenging because the
.
quality of the service is often inconsistent. Organizations attempt to reduce this
inconsistency by
A. paying higher incentives to employees to encourage satisfactory performance.

B. reducing incentives available to employees because of poor performance.
C. reducing the customer contact points in the service delivery process.
D.
providing standardization and training.
E.
exercising better hiring practices.
9-35
153 The Philadelphia Phillies baseball team may have great hitting and pitching one day,
.
and lose by 10 runs on the next. This is an example of a service being
A.
B.
C.
D.
E.
inseparable.
inconsistent.
inventoried.
tied to a product.
154 A local band performed on campus during a pre-graduation party. The students
.
enjoyed the performance, and some of them were interested enough to buy tickets
to see another show at a club downtown. But when they went to that concert, the
quality of the performance was much poorer than they had heard and seen on
campus. The students' disappointment was the direct result of which characteristic of
services?
A.
B.
C.
D.
E.
inconsistency
impressionability
intangibility
invisibility
uniqueness of the service
155 Andrea Arenas is the owner of 2 Places at 1 Time, a concierge company. She and her
.
staff of 60 perform everyday services, such as walking the dog, picking up cleaning,
waiting for the repairman, and going to the post office, for people who are too busy
to perform these simple acts. One way she tries to avoid ___________ of services for
her regular customers is to make sure that the same well-trained person is always
assigned to work for her clients.
A.
B.
C.
D.
E.
inseparability
inconsistency
incongruity
inflexibility
intangibility
9-36
156 Alana operates a wedding preparation service that aids brides-to-be in the planning
.
of their weddings. To maintain a quality image and a standardized offering, Alana
provides extensive training for each of her employees. What unique aspect of
services is Alana trying to address?
A.
B.
C.
D.
E.
impressionability
intangibility
inconsistency
inseparability
157 Jason graduated from law school and took his mom to dinner after the ceremony. At
.
the restaurant, the server filled their water glasses, checked on their table, and took
care of their requests. Jason noted that the last time he was at this same restaurant,
the experience was much worse. This scenario illustrates the ___________ of services.
A.
B.
C.
D.
E.
impressionability
intangibility
inseparability
inconsistency
158 Inseparability in services means consumers

.
A.
B.
C.
D.
E.
see little variation from one service provider in an industry to another.

cannot separate the service itself from the deliverer of the service.
are unable to differentiate price from quality.
cannot evaluate a service until it is being or has been used.
cannot separate themselves from the deliverer of the service.
159 If you find that the staff who work in your college's career center give you poor
.
advise or otherwise did not provide sufficient help in finding you employment after
graduation, you may be dissatisfied with your entire college experience. This is an
example of which issue associated with services?
A.
B.
C.
D.
E.
inseparability
intangibility
impressionability
incongruity
inflexibility
9-37
160 When Mandy last got her drive-thru order at the fast-food restaurant, she thought the
.
employee who helped her was cold and unfriendly. The food tasted good but was
overshadowed by the employee's demeanor. Since then, Mandy often says
something derogatory to her friends about the restaurant based on this single
experience. This is an example of which issue associated with services?
A.
B.
C.
D.
E.
inseparability
intangibility
impressionability
incongruity
inflexibility
161 Inventory of services differs from that of products in what way?

.
A. Time is less important to customers of services than customers of products.
B. Only service inventory can be reduced through more efficient movement of
products.
C. There are larger costs associated with the handling of service inventory.
D. Unlike goods providers, the service provider is often unavailable when there is a
demand for the service.
E. Service inventory costs are related to idle production capacity rather than storage
or handling.
162 A situation that occurs when a service provider is available but there is no demand is
.
referred to as
A.
B.
C.
D.
E.
off-peak pricing.
idle production capacity.
static demand.
capacity management.
excess inventory.
163 Idle production capacity refers to

.
A. the minimum number of customers that a service provider can serve and still
remain profitable.
B. the maximum number of customers that a service provider must serve in order to
remain profitable.
C. the ability of a service provider to redirect its efforts so even when there is no
primary demand, employees are still able to meet selective demand.
D. a situation that occurs when a service provider is available but there is no demand
for the service.
E. a situation that occurs when the primary demand for a service exceeds that
number of service deliverers available to meet that demand.
9-38
164 What does idle production capacity refer to?

.
A. a situation where the demand for exceeds the availability of service providers and
as a result, no services can be offered
B. when the supply of service providers exceeds the primary demand for the service
C. a situation where a service provider is available but there is no demand for the
service
D. integrating the service component of the marketing mix with efforts to influence
consumer demand
E. the potential profits of one service provider serving multiple clients at the same
time
165 The emergency room staff in Houston's largest hospital is pleasantly surprised when
.
a four-day Fourth of July weekend brings in few accident victims for treatment. They
know from experience that such public holidays usually have high rates of accidents.
For the hospital's business office, the lower demand for the emergency room services
means
A.
B.
C.
D.
E.
a break in the service continuum.

its services are no longer tangible.
its services can be separated from the staff.
the hospital has idle production capacity.
an opportunity for gap analysis.
166 Andrea Arenas is the owner of 2 Places at 1 Time, a concierge company. She and her
.
staff of 60 perform everyday services such as walking the dog, picking up cleaning,
waiting for the repairman, and going to the post office for people who are too busy to
perform these simple acts. She has often been hired by major corporations to
perform services for their harried executives, and even other employees. Her staff is
overworked and she will soon hire more employees to fill demand. Arenas is not
currently experiencing __________; in fact, all of her employees and equipment are
fully being used.
A.
B.
C.
D.
E.
off-peak pricing
idle production capacity
static demand
capacity marketing
capacity inventory
9-39
167 Southwest Airlines operates five flights daily between Chicago and Phoenix during
.
the winter. One flight leaves Phoenix at 12:10 p.m. The plane, a Boeing 737, has a
capacity of 120 passengers. During the past month, the flight has averaged 24
passengers, a load factor of only 20 percent. Once the plane takes off, the empty
seats generate no revenue for the airline for that flight. What unique aspect of
services does this situation describe?
A.
B.
C.
D.
E.
incongruity
intangibility
inconsistency
inseparability
168 The type of analysis that compares the differences between consumers' expectations
.
about a service and their experience with it based on dimensions of service quality is
referred to as
A.
B.
C.
D.
E.
customer relationship management.

service encounter differential.
gap analysis.
a customer contact audit.
a service audit.
169 In using a gap analysis, the two basic components of a customer's evaluation of a
.
service are
A.
B.
C.
D.
E.
expectations and customer contact.

expectations and experience.
intangibility and inconsistency.
experience and credence.
inconsistency and inseparability.
170 How a person establishes expectations for a service not yet experienced is
.
influenced by __________, personal needs, past experiences, and promotional
activities.
A.
B.
C.
D.
E.
the economy
consumer income
word-of-mouth communications
competitive trends
how the organization delivers its service
9-40
.
influenced by word-of-mouth communications, __________, past experiences, and
promotional activities.
A.
B.
C.
D.
E.
personal needs
the economy
consumer income
competitive trends
.
influenced by word-of-mouth communications, personal needs, __________, and
A.
B.
C.
D.
E.

past experiences
competitive trends
the economy
consumer income
.
influenced by word-of-mouth communications, personal needs, past experiences, and
__________.
A.
B.
C.
D.
E.
the economy
consumer income
competitive trends
promotional activities
174 In a gap analysis, a person can establish expectations for a service he or she has not
.
yet experienced through word-of-mouth communications, personal needs, past
experiences, and promotional activities. However, the actual experiences are
determined by
A.
the way the organization delivers its service.
B. the positive reinforcement from friends, family, and peers, after the service was
provided.
C. repeat encounters with the same service provider.
D.
psychological feelings of well-being.
E. a formal post-purchase evaluation or questionnaire.
9-41
175 Many restaurants now ask consumers to evaluate their experience on a short
.
questionnaire when they pay their bill. This assessment of consumer expectations
compared to the actual experience they had is a form of __________.
A.
B.
C.
D.
E.
service encounter survey

customer profile analysis
gap analysis
customer contact audit
service audit
176 Which of the following are key dimensions of service quality that might be used to
.
perform a gap analysis for airline travel?
A.
B.
C.
D.
E.
gap analysis, intangibility, and reliability

respect, diligence, and honesty
honesty, intangibility, and diligence
alacrity, fairness, and product knowledge
reliability, tangibility, and responsiveness
177 The term product class refers to

.
A. the NAICS designation of an individual product or brand.
B. the designation of an individual product based upon its form.
C.
a variation of a product within a product mix.
D. the designation of a product based on whether it is a consumer product or
business product.
E. the entire product category or industry a set of offerings belong to.
178 Variations of a product (shape, configuration) within a product class are referred to as
.
the
A.
B.
C.
D.
E.
product form.
product item.
product line.
product class.
product mix.
9-42
179 A product item refers to

.
A.
B.
C.
D.
E.
the variations within a product class.

the entire product category or industry.
a group of SKUs that are closely related.
a specific product that has a unique brand, size, or price.
the services offered by an organization.
180 The Vermont Teddy Bear Company sells handmade Teddy bears designed to be given
.
as gifts for almost every occasion imaginable. The Love Bandit Bear is one bear it
designed for people to give to each other on Valentine's Day. The Love Bandit Bear is
an example of a
A.
B.
C.
D.
E.
product item.
product mix.
product class.
product form.
product line.
181 A __________ is the unique identification number that defines an item for ordering or
.
inventory purposes.
A.
B.
C.
D.
E.
unique stock mark

QR code
stock keeping unit
order quantity code
NAICS stock code
.
as gifts for almost every occasion imaginable. The Love Bandit Bear is designed for
people to give to each other on Valentine's Day. The unique identification number
that the Vermont Teddy Bear Company uses to distinguish this Teddy bear from the
others in order to track it in the warehouse is called a(n)
A.
B.
C.
D.
E.
stock ID code.
QR code.
NAICS stock code.
order quantity code.
stock keeping unit.
9-43
183 A group of product or service items that are closely related because they satisfy a
.
class of needs, are used together, are sold to the same customer group, are
distributed through the same types of outlets, or fall within a given price range is
referred to as a __________.
A.
B.
C.
D.
E.
product class
product mix
product category
marketing category
product line
184 A __________ is a group of product or service items that are closely related because
.
they satisfy a class of needs, are used together, are sold to the same customer
group, are distributed through the same type of outlets, or fall within a given price
range.
A.
B.
C.
D.
E.
product item
product line
product mix
product class
product form
185 A product line refers to

.
A. a product and all its ancillary services (warranties, financing, etc.).
B.
C. a specific product SKU that has a unique brand, size, or price.
D. a group of product or service items that are closely related because they satisfy a
distributed through the same types of outlets, or fall within a given price range.
E.
186 A product line is a group of product or service items that are closely related because
.
they satisfy a class of needs, __________, are sold to the same customer group, are
distributed through the same type of outlets, or fall within a given price range.
A.
B.
C.
D.
E.
are made of similar components

are used together
have one SKU number
require high levels of R&D
made from the same formulations
9-44
.
they satisfy a class of needs, are used together, __________, are distributed through
the same type of outlets, or fall within a given price range.
A.
B.
C.
D.
E.

are sold to the same customer group
have one SKU number
.
group, __________, or fall within a given price range.
A.
B.
C.
D.
E.

have one SKU number
are distributed through the same type of outlets
.
group, and are distributed through the same type of outlets, or __________.
A.
B.
C.
D.
E.

fall within a given price range
are identical except for price
190 Which of the following statements about product lines is most accurate?
.
A. An advantage of a narrow product line is the ability to have a greater gap between
price points.
B. Product lines refer to consumer products; product mixes refer to industrial
products.
C. An advantage of broad product lines is increased likelihood of access to large retail
chain distribution.
D. A benefit of having a narrow product line is that it enables both consumers and
retailers to simplify their buying decisions.
E.
A broad product line reduces R&D costs.
9-45
191 Which of the following is an example of a product line?

.
A.
Scope mouthwash
B. Zephyrhills natural spring water in 8 oz. bottles
C.
The Yellow Pages for Gainesville, Florida
D. Hallmark Mother's, Father's Day, and Grandparent's Day cards
E.
Apple iPad
Crapola Granola Products Photo

192 The Crapola Granola products photo shown above best describes which of the
.
following?
A.
B.
C.
D.
E.
a product item
a product line
a product mix
a product category
a brand line
9-46
.
as gifts for almost every occasion imaginable. For the Vermont Teddy Bear Company,
Teddy bears are an example of a
A.
B.
C.
D.
E.
product class.
product mix.
SKU.
marketing category.
product line.
194 During a recent shopping trip to Target, Carlie noticed that the store offered many
.
Glad products, including many different types of trash bags and a large variety of
food storage containers. For Glad, each of these two product groupings is an example
of a __________.
A.
B.
C.
D.
E.
product line
product item
product mix
product industry
product class
195 All of the different product lines offered by an organization are collectively referred to
.
as a
A.
B.
C.
D.
E.
product class.
product mix.
product SKUs.
marketing mix.
target mix.
196 A product mix refers to

.
A. all of the different product lines offered by an organization.
B.
D. a group of products that are closely related because they satisfy a class of needs,
are used together, are sold to the same customer group, are distributed through
the same types of outlets, or fall within a given price range.
E.
9-47
197 Procter & Gamble, however, has a large __________ that includes product groupings
.
such as beauty and grooming (Crest toothpaste and Gillette razors) and household
care (Downy fabric softener, Tide detergent), and Pampers diapers.
A.
B.
C.
D.
E.
marketing mix.
product class.
product items.
product lines.
product mix.
198 A company's product mix is equal to the sum of its

.
A.
B.
C.
D.
E.
marketing mix.
product class.
product items.
product lines.
SKUs.
199 Newman's Own is a company that gives all of its profits to charities. The company
.
produces popcorn, salsa, pasta sauces, and salad dressings under the Newman's
Own brand name. These product lines comprise the company's
A.
B.
C.
D.
E.
product mix.
stock keeping units.
product category.
product class.
marketing category.
200 The relationship between a product line and product mix is

.
A.
product mixes include product lines.
B.
product lines include product mixes.
C. product lines refer to consumer products; product mixes refer to business
products.
D. product mixes refer to consumer products; product lines refer to industrial
products.
E. there is no significant difference other than minor product variations of color, size,
or form.
9-48
201 Feature bloat is

.
A. an exaggeration of a product's performance capabilities.
B. the overcharging in price for a minor product enhancement.
C. the requirement of having consumers learn new behaviors with a continuous
innovation.
D. an excessive number of product attributes that overwhelms consumers with
unnecessary complexity.
E. the increase in package size when adding more content or making it larger (the
mega phenomenon).
202 The proliferation of extra characteristics in a product that overwhelms many
.
consumers with mind-boggling complexity is referred to as
A.
B.
C.
D.
E.
feature overkill.
product line extension.
feature bloat.
sensory overload.
product differentiation.
203 According to Robert Stephens of the Geek Squad, the biggest complaint about
.
technical support people is
A.
B.
C.
D.
E.
their inability to communicate in laymen's terms.

that they are difficult to understand.
that they take too long to answer the telephone.
that they lack product knowledge.
that they are rude and egotistical.
204 A product can be classified as new from all of the following perspectives EXCEPT:
.
A.
B.
C.
D.
E.
the organization's.
existing offerings.
legal.
the firm's competitors.
the consumer's.
9-49
205 A product can be classified as new if it __________ from existing products.

.
A.
B.
C.
D.
E.
is functionally different
is different in color
is different in its packaging
is different in price
requires a different distribution channel
206 An important way of viewing new products is in terms of their effects on

.
consumption, which from the perspective of consumers is by
A.
B.
C.
D.
E.
the price.
the extent of media promotion.
the degree of potential product cannibalization.
the presence of feature bloat.
the degree of learning involved.
207 A product that is new in some way but requires no new behaviors to be learned by
.
consumers is a
A.
B.
C.
D.
E.
continuous innovation.
discontinuous innovation.
dynamically continuous innovation.
product transformation.
concurrent innovation.
208 The emphasis of a marketing strategy for a continuous innovation concentrates on

.
A.
B.
C.
D.
E.
obtaining narrow distribution.

setting a low price.
generating awareness.
using reminder advertising to reeducate consumers.
using personal selling.
209 At the time of its introduction, which of the following products was the best example
.
of a continuous innovation?
A.
B.
C.
D.
E.
home security system

disposable lighter
microwave oven
electric toothbrush
video camera
9-50
210 Wrigley's new Alert Energy Caffeine Gum "offers a portable solution that lets adults
.
control their caffeine intake." This new gum is most likely which type of innovation?
A.
B.
C.
D.
E.
continuous innovation
dynamically continuous innovation
discontinuous innovation
insignificant innovation
disruptive innovation
211 At the time of its introduction, which of the following products was the best example
.
of a continuous innovation?
A.
the first Apple iPhone
B.
Atari, the first video game system
C. Sunsilk Silky Straight shampoo and conditioner with tip-targeting technology
D. Dragon Naturally Speaking voice-recognition software
E. Naturalpoint Trakir, which replaces the computer mouse by tracking head
movements and then translating those head movements into cursor commands
212 The addition of Clorox II bleach to Tide laundry detergents is an example of a
.
A.
B.
C.
D.
E.
bundled innovation.
disruptive innovation.
213 The first LCD (liquid crystal display) flat-panel HD (high definition) TV is an example
.
of which type of innovation?
A.
B.
C.
D.
E.
9-51
214 A product that disrupts consumers' normal routines but does not require totally new
.
learning is a
A.
B.
C.
D.
E.
progressive innovation.
215 The emphasis of a marketing strategy for a dynamically continuous innovation would
.
include
A.
B.
C.
D.
E.
advertising to generate awareness.

obtaining widespread distribution.
advertising to explain points of difference and benefits.
216 LG Electronics Inc. has entered into an agreement with Google to offer selected
.
smartphone models that use a multitouch interface rather than buttons to make calls
with Google's Android operating system. When the multitouch interface was first
introduced, it was an example of which type of innovation?
A.
B.
C.
D.
E.
evolutionary innovation.
217 There have been pasta sauces on the market for years. These sauces have always
.
required the pasta to be precooked before it is mixed with the sauces and other
ingredients. The development of Prego Pasta Bake Sauce that does not require the
use of pre-cooked pasta would be an example of a(n)
A.
B.
C.
D.
E.
9-52
218 Philips Sonicare recently introduced the DiamondClean rechargeable toothbrush. A

.
key innovation is its Quadpacer interval timer that goes off after 30-seconds to
prompt the user to move on to the next quadrant of the mouth that results in better
cleaning and improved gum health. This is an example of which type of innovation?
A.
B.
C.
D.
E.
evolutionary innovation
219 LG Electronics recently introduced the Fridge-TV with a 15" television screen
.
mounted in the right side refrigerator door. This is an example of which type of
innovation?
A.
B.
C.
D.
E.
inventive innovation
continuous invention
Heinz EZ Squirt Photo
9-53
220 When Heinz introduced its new EZ Squirt Ketchup bottle (see the photo above), the
.
degree of newness for the consumer would make this a
A.
B.
C.
D.
E.
spontaneous innovation.
continuous invention.
221 A product that requires the learning of entirely new consumption patterns among
.
consumers is referred to as a(n)
A.
B.
C.
D.
E.
222 A discontinuous innovation is a product that

.
A. disrupts consumers' normal routine but does not require totally new learning.
B.
requires no new learning by consumers.
C. is not purchased by innovators and early adopters.
D.
initiates obsolescence of a product class.
E. requires consumers to learn entirely new patterns of behavior and product usage.
223 The emphasis of a marketing strategy for a discontinuous innovation would most
.
likely be to
A.
generate awareness among consumers.
B. advertise benefits to consumers that stress points of differentiation.
C. educate consumers about new consumption patterns through personal selling.
D. obtain widespread distribution in multiple channels.
E. stress price differentials from competitors' products.
224 Which of the following products at the time of its introduction was the best example
.
of a discontinuous innovation?
A.
B.
C.
D.
E.
DVD player
disposable lighters
instant light charcoal
liquid laundry detergent
automatic dishwashers
9-54
225 In the early 1900s, your great-great-grandfather probably purchased his first
.
automobile. After years of driving a horse and buggy, he got into his new car and
drove it into his new garage. The new automobile was an example of a
A.
B.
C.
D.
E.
disruptive improvement.
226 Napster was the first software that allowed an individual to easily search for and
.
exchange MP3 music files with other individuals (in some cases illegally). When it
was introduced, Napster would have been an example of a
A.
B.
C.
D.
E.
regulatory innovation.
227 Dragon Naturally Speaking, a speech recognition software program that allows you to
.
use your voice instead of a keyboard to input text into a word processing program, is
an example of a(n)
A.
B.
C.
D.
E.
Figure 9-4
9-55
228 According to Figure 9-4 above, column A represents a(n)

.
A.
B.
C.
D.
E.
229 According to Figure 9-4 above, column B represents a(n)

.
A.
B.
C.
D.
E.
230 According to Figure 9-4 above, column C represents a

.
A.
B.
C.
D.
E.
simultaneous innovation.
231 The Federal Trade Commission (FTC) considers a product new only
.
A. for a period of one year after it enters widespread distribution.
B. if it is functionally different from a competitor's product.
C. until a new and improved version of the same product is produced.
D. for a period of six months after it enters regular distribution.
E. for a period of seventeen years at which time patent rights are returned to the
public domain.
9-56
232 Prego recently introduced a Pasta Bake Sauce, which was made so that it was not
.
necessary to precook the pasta before blending pasta, sauce, meat, and cheese in a
casserole. Legally, this product would only be considered new
A. for the first six months that it was regularly available at a variety of grocery
stores.
B. until a competitor like Ragu had issued a similar product targeted to the same
market.
C. as long it retained these exact product characteristics.
D. if it was functionally the same as its salsa sauce.
E. until its advertising had been seen by every member of its target audience.
233 From an organization's perspective regarding its new products and innovations,
.
which of the following new-product strategies has the LOWEST level of risk?
A.
B.
C.
D.
E.
a radical invention
a brand extension
a product line extension
a jump in innovation
a product refinancing
234 From an organization's perspective regarding its new products and innovations,
.
which of the following new-product strategies has the HIGHEST level of risk?
A.
B.
C.
D.
E.
a radical invention
a brand extension
a product deletion
235 Mr. Clean is an antibacterial cleaning liquid for home use. If Proctor and Gamble
.
(P&G), the manufacturer of Mr. Clean, added Mr. Clean Magic Eraser Bath Scrubber to
the Mr. Clean product line, it would be seen by P&G as
A.
a discontinuous innovation.
B. a new product from the company's perspective because it is a product line
extension.
C. a high-risk product mix extension because it is new to the market.
D. new by the Federal Trade Commission for the usual one-year period.
E. not a new-product because it does not represent a different SKU.
9-57
236 Which of the following new products is the best example of the LOWEST level of risk
.
from the company's point of view?
A. adding Ball Park Beef Franks with Cheese to the Ball Park Franks line
B. moving from production of land-line telephones to smartphones
C.
marketing the first Apple computer
D. changing the formula from Coca-Cola to New Coke and then back to Coca Cola
Classic
E. offering online marketing classes rebranded under a new college name
237 Using an existing brand name to introduce a product that is new to the company into
.
a totally new, unfamiliar product category seems like a good idea. This is what
Cosmopolitan, purveyor of fashion magazines, did when it introduced its own
__________, which failed quickly.
A.
B.
C.
D.
E.
aspirin
yogurt
disposable underwear
soda (soft drink)
perfume
.
a totally new, unfamiliar market seems like a good idea. Several years ago,
Cosmopolitan magazine introduced Cosmopolitan-branded yogurt, and it failed
quickly. This innovation strategy is known as a
A.
B.
C.
D.
E.
radical invention
product line extension
brand extension
product deletion
239 A few years ago, Frito-Lay developed Frito-Lay Lemonade as a thirst-quencher for
.
those consumers who also like Frito-Lay's salty snacks such as Fritos corn chips. But
when people think of the brand name Frito-Lay, thirst-quenching is not a benefit that
comes to mind and Frito-Lay Lemonade failed. This innovation strategy is known as
a
A.
B.
C.
D.
E.
brand extension.
radical invention.
product deletion.
9-58
.
a totally new, unfamiliar market seems like a good idea. Several years ago, HarleyDavidson introduced perfume under the Harley-Davidson brand name - and it failed
A.
B.
C.
D.
E.
radical invention.
product deletion.
brand extension.
241 A new product or service protocol refers to

.
A. the standardized procedures a firm follows for the inception, design,
manufacturing, promotion, and distribution of a new product.
B. a formalized statement of intent regarding what will be sold, to whom it will be
sold, and by whom it will be sold.
C. maintaining compliance with all licensing, manufacturing, and distribution
standards established by the U.S. Federal Trade Commission (FTC).
D. a statement that identifies a well-defined target market, specific customers'
needs, wants, and preferences, and what the product or service will be and do to
satisfy consumers.
E. the raw unwritten ideas to produce a single commercially successful new product.
242 A statement that identifies: a well-defined target market; specific customers' needs,
.
wants, and preferences; and what the product will be and do to satisfy consumers is
referred to as a new product's or service's
A.
B.
C.
D.
E.
protocol.
proposition.
modus operandi.
formula.
methodology.
243 Ideally, before a new product or service is developed, a firm should have a precise
.
__________, which is a statement defining the target market, specifying customers'
needs, and defining what the product or service will be and do to satisfy consumers.
A.
B.
C.
D.
E.
formula
contract
modus operandi
protocol
methodology
9-59
244 New product or service failures may be reduced or avoided if the company
.
developing them has
A. support from marketer-dominated sources of information.

B. a clear patent approved by the governments within the countries it wants to
market.
C.
a statement of competitive intent.
D. stakeholder approval in the development process.
E.
a precise protocol.
.
protocol, which is a statement that identifies: (1) __________; (2) specific customers'
needs, wants, and preferences; and (3) what the product or service will be and do to
satisfy consumers.
A.
a clear plan for product distribution
B. an analysis of potential competitors' products
C. a precise budget of how much can be spent for the marketing program
D.
a well-defined target market
E.
clear financial goals and expectations
.
protocol, which is a statement that identifies: (1) a well-defined target market; (2)
__________; and (3) what the product or service will be and do to satisfy consumers.
A.
a clear plan for distribution
B. specific customers' needs, wants, and preferences
C. an analysis of potential competitors' products or services
D. a precise budget of how much can be spent for the marketing program
E.
.
specific customers' needs, wants, and preferences; and (3) __________.
A. what the product or service will be and do to satisfy consumers

B.
C.
D. an analysis of potential competitors' products or services
E. a precise budget of how much can be spent for the marketing program
9-60
248 Most American families buy the same __________ items over and over again - making
.
it difficult to gain buyers for new products.
A.
B.
C.
D.
E.
25
50
100
125
150
249 Less than __________ of new consumer packaged goods (CPG) exceed first-year sales
.
of $50 million - the benchmark of a successful CPG launch.
A.
B.
C.
D.
E.
3 percent
10 percent
17 percent
28 percent
35 percent
250 When General Mills introduced Fingos, a corn chip-sized sweetened cereal flake, it
.
assumed that its customers would normally snack on them dry like a potato chip.
Unfortunately, consumers did not switch from munching on popcorn and potato
chips. The primary reason for the failure of Fingos was __________.
A. an insignificant point of difference relative to competing snacks - consumers

wouldn't switch from eating snacks from Frito-Lay and others
B. too little market attractiveness - the growth in the snacks market is declining
C. poor execution of the marketing mix - General Mills did not offer free samples at
grocery stores
D. poor product quality - the chips were not the same size
E. incomplete market and product protocol - the brand name "Fingos" did not get
consumers excited
251 One of the eight primary marketing-related reasons for new-product failure is
.
__________.
A.
B.
C.
D.
E.
not listening to the voice of the engineer

incomplete market and product protocol
too much advertising or too aggressive a tone for it
failure to anticipate competitors actions
insufficient funding for roll-out
9-61
252 Kimberly-Clark developed its Avert Virucidal tissues that contained vitamin C
.
derivatives, which were scientifically designed to kill cold and flu germs when users
sneezed, coughed, or blew their noses into them. Unfortunately, people didn't
believe the claim and were frightened by the "cidal" in the brand name. The reason
for this product failure was
A.
B.
C.
D.
E.
an insignificant point of difference.

too little market attractiveness.
poor execution of the marketing mix.
poor product quality.
incomplete market and product protocol.
253 Until 1996, U.S. carmakers sent very few right-hand-drive cars to Japan while German
.
car makers exported several models with the steering wheel on the right to
accommodate the way the Japanese drive their cars on the left side of the road.
American car manufacturers could blame their failure to a great degree on
A.
B.
C.
D.
E.

not satisfying customer needs on critical factors.
254 Microsoft introduced its Zune player a few years after Apple launched its iPod and
.
other competitors had offered their new MP3 players. Zune sales were very
disappointing and Microsoft eventually killed the product. According to the textbook,
the primary reason for the Zune's failure was due in large part to
A.
B.
C.
D.
E.
bad timing.
.
__________.
A.
B.
C.
D.
E.

no economical access to buyers
9-62
256 Thirsty Dog! is a zesty beef-flavored, vitamin-enriched, mineral-loaded, lightly

.
carbonated bottled water for your dog. It might have been a great product, but
competition over shelf space was fierce and the product could not generate enough
sales per square foot for retailers. The makers of this product had
A.
B.
C.
D.
E.

no economical access to buyers.
.
__________.
A.
the product is too innovative
B. a competitor with a similar product withdrew from the market
C.
too socially controversial
D.
poor product quality
E. product was marketed as a new product but it did not meet the legal definition of
new
258 After Microsoft launched its Xbox 360 video-game console, millions began to
.
experience the "red ring of death." The problem: The consoles' microprocessors ran
too hot, causing them to pop off their motherboards. This cost the company not only
money to extend its product warranty, but a huge portion of future sales and market
share to competitors Sony and Nintendo. This failure was due to
A.
B.
C.
D.
E.

259 Garlic Cake was supposed to be served as an hors d'oeuvre with sweet breads,
.
spreads, and meats, but at its introduction the company forgot to explain this to
potential consumers. This product failure demonstrates
A.
B.
C.
D.
E.

bad timing.
9-63
260 OUT! International's Hey! There's A Monster In My Room spray with a bubble-gum
.
fragrance was designed to rid scary creatures from a kid's bedroom. Although a
clever idea, it failed because it
A.
B.
C.
D.
E.
did not satisfy customer needs on critical factors.

had poor product quality.
had bad timing.
had an incomplete market and product protocol.
had too little market attractiveness.
261 Groupthink occurs in a meeting when

.
A. everyone has an opinion but no one is willing to take charge.
B. everyone has the same idea after using the brainstorming idea-generation
technique.
C. there is too much competition among marketing managers, so no one is willing to
share his/her ideas.
D. someone suspects that there is a problem with the new product concept but is
afraid to speak up because everyone else is so enthusiastic about it.
E. top management wants the new product to go forward regardless of what anyone
else thinks.
262 One of the two ORGANIZATION-related problems of inertia that can cause new.
product failures is __________.
A.
B. encountering groupthink in task force and committee meetings
C.
poor execution of the marketing mix
D.
bad timing
E.
263 If you are using a marketing dashboard to discover which cities in Florida are not
.
meeting their sales growth goal for your sunscreen products, what marketing metric
should be used to measure sales performance?
A.
B.
C.
D.
E.
every metric possible

shelf space for this year and last year by city
production costs
customer psychographics
annual percent sales change by city
9-64
264 Marketing dashboards are useful in measuring actual market performance versus the
.
goals set in new-product planning, such as sales. Once shortfalls are identified, the
first step would be to conduct market research to determine __________.
A.
how to change the promotional strategy
B. whether the problem is internal or external to the organization
C. whether to drop or keep the failing product or market
D. whether to change the goal, and therefore, the marketing metric used to measure
it
E. if the numbers used for evaluation in the marketing dashboard are accurate
UMD9: Marketing Dashboard Map

265 In the UMD9: Marketing Dashboard Map above, the annual growth rate in each state
.
is shown, with green (which looks gray on printed paper) meaning good and red
(which looks black on printed paper) meaning very bad. If an organization's 2013
sales for the entire U.S. were $50 million and its 2012 U.S. sales were $30 million,
what is the annual % sales change?
A.
B.
C.
D.
E.
40%
67%
100%
125%
133%
9-65
266 In the UMD9: Marketing Dashboard Map above, the annual growth rate in each state
.
is shown, with green (which looks gray on printed paper) meaning good and red
(which looks black on printed paper) meaning very poor. If you were a marketing
manager faced with this dashboard, which of the following would be the best action?
A.
B.
C.
D.
E.
Focus on the shortfalls in Idaho (ID) and Utah (UT).

Revise the relevant goals for both east and west coast.
Conduct additional market research in the southern United States.
Examine your distribution system in the northeastern United States.
Change the marketing metric being used to evaluate the states individually.
267 The seven stages an organization goes through to identify business opportunities and
.
convert them into salable products or services is referred to as the __________.
A.
B.
C.
D.
E.
commercialization process
SWOT process
business prospect development cycle
opportunity stage gate sequence
new-product process
268 The new-product process refers to

.
A. the informal process of brain storming to generate new-product concepts at a
marketing staff meeting.
B. the process of presenting cross-functional teams with a written new-product
concept statement and asking them to respond to it in writing.
C. the seven stages an organization goes through to identify business opportunities
and convert them into salable products or services.
D. the two stages an organization goes through from idea generation to
commercialization.
E. a formalized protocol for new-product development that begins at the corporate
level and ends at the functional level.
269 The new-product process an organization goes through to identify business
.
opportunities and convert them into salable products or services contains
A.
B.
C.
D.
E.
three main steps: research, production, and distribution.

four distinct steps: research, evaluation, production, and distribution.
five key phases ranging from idea generation to creating the first prototype.
seven stages from new product strategy development to commercialization.
three phases: planning, implementation, and evaluation.
9-66
Figure 9-5
270 Figure 9-5 above represents the seven stages of the new-product development
.
process. Stage 1 is the __________ stage.
A.
B.
C.
D.
E.
idea generation
screening and evaluation
screening and analysis
new-product strategy development
product assessment
.
A.
B.
C.
D.
E.
idea generation
product assessment
9-67
.
A.
B.
C.
D.
E.
idea generation
product assessment
.
A.
B.
C.
D.
E.
idea generation
business analysis
market testing
.
A.
B.
C.
D.
E.
business analysis
market testing
commercialization
development
.
A.
B.
C.
D.
E.
business analysis
market testing
commercialization
development
9-68
.
A.
B.
C.
D.
E.
business analysis
market testing
commercialization
development
277 One reason new products fail is that although most major corporations use a formal
.
decision making process, sometimes they fail to critically evaluate the progress along
the way. This is why many firms have a __________ to ensure that problems are
corrected before proceeding to the next stage.
A.
B.
C.
D.
E.
written protocol
Stage-Gate process
cross-functional team
prototype test
test market
278 The stage of the new-product process that defines the role for a new product in terms
.
of the firm's overall objectives is referred to as __________.
A.
B.
C.
D.
E.
distinctive competency determination

strategic marketing process
strategic invention process
product protocol definition
279 New-product strategy development refers to

.
A. the stage of the new-product process where specific product features and benefits
are selected prior creating a new-product prototype.
B. a formalized protocol for new product development determined by director of
marketing.
C. the stage of the new-product process that defines the role for a new product in
terms of the firm's overall objectives.
D. the process of presenting cross-functional teams with a written new-product
E. the stage of the new-product process that turns the idea on paper into a
prototype, which results in a demonstrable, producible product corresponding to
its protocol.
9-69
280 The first stage of the new-product process is

.
A.
B.
C.
D.
E.
idea generation.
screening and evaluation.
business analysis.
new-product strategy development.
concept testing.
281 Which stage in the new-product process is a SWOT analysis used to identify the
.
strategic role the new product might serve in the firm's business portfolio?
A.
B.
C.
D.
E.
idea generation
business analysis
development
282 During the first stage of the new-product process, two important activities take place.
.
They are
A.
B.
C.
D.
E.
SWOT analysis and environmental scanning.

open innovation and business analysis.
concept testing and product forecasting.
R&D and operations set-up.
environmental scanning and open innovation.
283 In which stage in the new-product process would a firm use both a SWOT analysis
.
and environmental scanning to assess its strengths and weaknesses relative to the
trends it identifies as opportunities or threats?
A.
B.
C.
D.
E.
idea generation
business analysis
development
9-70
284 Occasionally, a firm's Stage 1 product development activities can be blind-sided by a

.
revolutionary new product or technology that completely disrupts its business, which
is sometimes called a __________.
A.
B.
C.
D.
E.
marketing opportunity
business threat
crowdsourcing
concept test
285 The stage of the new-product process that develops a pool of concepts to serve as
.
candidates for new products is referred to as __________.
A.
B.
C.
D.
E.
idea generation
product development
open innovation assessment
286 Developing a pool of concepts to serve as candidates for new products is the
.
__________ stage of the new-product process.
A.
B.
C.
D.
E.
open innovation
product development
idea generation
287 Idea generation is the stage in the new-product process that

.
A. develops a pool of concepts to serve as candidates for new products.
B. selects a single concept and scrutinizes it for all potential benefits and flaws.
C. separates ideas into two categories: consumer-oriented and organization-oriented.
D. requires the organization to perform a SWOT analysis and an environmental scan.
E. consists of the techniques used to screen and reject those ideas that have no
merit.
9-71
288 Idea generation refers to

.
A. the stage of the new-product process when concepts are converted to prototypes.
B. the stage of the new-product process that develops a pool of concepts to serve as
candidates for new-products.
C. the stage of the new-product process where possible promotional campaigns and
advertising themes are created.
D. the techniques used to screen and reject those ideas that have no merit.
E. the discussion and decision of which as target market segments will be selected.
289 Many forward-looking companies have discovered that their own organization does
.
not generate enough useful new-product ideas. This has caused them to find new
product ideas by developing strategic relationships with outside individuals and
organizations, a practice known as __________.
A.
B.
C.
D.
E.
innovation alliances
open innovation
open collaboration
piggy-back thinking
stakeholder cooperation
290 Open innovation may enhance the __________ stage of the new-product process.
.
A.
B.
C.
D.
E.
open innovation
product development
idea generation
291 Open innovation helps organization overcome __________, one of the organizational
.
inertias common in new-product failures.
A.
B.
C.
D.
E.
groupthink
intelligent failures
incomplete protocols
NIH barriers
bad timing
9-72
292 All of the following are sources for new product ideas EXCEPT:
.
A.
B.
C.
D.
E.
competitors.
universities.
regulators.
suppliers.
employees.
293 Business researchers emphasize that firms must actively involve customers and
.
suppliers in the new-product development process. This means that the focus should
be on what the new product will __________ rather than simply what they want.
A.
B.
C.
D.
E.
look like
cost them
do for them
feel like
consist of in terms of new features
294 Generating insights leading to marketing actions based on massive numbers of

.
peoples' ideas is called __________.
A.
B.
C.
D.
E.
brainstorming
groupthink
outsourcing
crowdsourcing
NIH method
295 Dell used __________ to develop an online site to generate 13,464 ideas for new
.
products and website and marketing improvements.
A.
B.
C.
D.
E.
brainstorming
crowdsourcing
group think
outsourcing
data mining
9-73
296 IDEO is a company that

.
A. creates innovative promotional programs for its clients' new products.
B. is a firm that developed the formal Stage-Gate process to commercialize new
products for its clients.
C. uses design thinking to develop new products for other organizations.
D.
rates new products like Consumer Reports.
E. runs patent searches for companies that don't have and internal legal department.
297 Brainstorming sessions at IDEO can generate as many as __________ ideas for
.
products in an hour.
A.
B.
C.
D.
E.
10
25
50
100
200
298 In addition to seeking ideas from more well-known sources, organizations also get
.
ideas from universities, inventors, and smaller nontraditional firms. For example,
General Mills partnered with Brigham Young University to license its patent for
__________.
A.
scones with coffee-flavored cream frosting
B. an Omega-3 enriched SKU for the Philadelphia cream cheese line
C.
a carbonated yogurt called Go-Gurt Fizzix
D. deep fried chicken skins for people who cannot eat pork
E. a crispy baked macaroni and cheese snack that can be eaten out of a bag like
Cheetos
299 Imagine you work for a TV production company that has been approached by one of
.
the broadcast TV networks to develop a concept for a new reality show. Where are
you most likely to look first for ideas?
A. conducting a survey among the 2 million people belonging to the NPD Consumer
Panel
B. observing similar reality programs that are on competing television networks like
CBS or MTV
C. contacting contestants from other reality shows like Survivor or The Amazing Race
D. brainstorming ideas from the TV production company's employees
E. reading about the stars of reality TV programs in gossip magazines like Us Weekly
and TV programs like TMZ
9-74
300 The Marriott Corporation sent a six-person intelligence team to travel and stay at
.
economy hotels around the country for a six-month period. The purpose of these
visits was to
A. allow the team to reap the benefits of the new product, Fairfield Inns.
B. assess the strengths and weaknesses of economy hotels that could be used in the
new-product development process for the launch of a new economy hotel chain.
C. complete customer satisfaction surveys to purposefully create inaccuracies in the
marketing research for competing economy hotels.
D. obtain the demographics and media behavior of consumers who stay at these
facilities in order to develop a target market profile.
E. refute the assumption that open innovation can benefit the Marriott Corporation.
301 Because early-stage financing is almost always a problem for those starting a new
.
business, __________ is a way to gather an online community of supporters to
financially rally around a specific project that is unlikely to get resources from
traditional sources.
A.
B.
C.
D.
E.
crowdfunding
open sourcing
venture capital
online banking
crowdsourcing
302 Which of the following firms uses crowdfunding to raise capital for products that are
.
unlikely to get resources from traditional sources?
A.
B.
C.
D.
E.
IDEO
Kickstarter.com
Warren Buffet's Berkshire Hathaway
the Industrial Design Group
Unfundale.com
303 The stage of the new-product process that internally and externally evaluates new.
product ideas to eliminate those that warrant no further effort is referred to as
__________.
A.
B.
C.
D.
E.
development
stage-gate
idea generation
business analysis
9-75
304 Screening and evaluation refers to the stage of the new-product process
.
A. at which prospective customers are exposed to new product prototypes for the
first time.
B. at which new product concepts that have been found viable are converted into
actual prototypes.
C. that internally and externally evaluates new-product ideas to eliminate those that
warrant no further effort.
D. that specifies the features of the product and the marketing strategy needed to
bring it to market and make financial projections.
E. where consumers evaluate a new product's performance in an actual-use
situation.
305 The screening and evaluation stage of the new-product process involves
.
A. internal and external evaluations of new-product ideas.
B.
product selection and budgeting projections.
C.
business and cost analyses.
D. patent searches and environmental scanning.
E.
idea selection and prototype development.
306 The __________ stage of the new-product process includes an examination of the
.
technical feasibility for the product, such as 3M determining that the firm's microreplication technology (the 3,000 tiny gripping fingers) could be used to improve the
gripping power of batting or work gloves.
A.
B.
C.
D.
E.
development
Stage-Gate
idea generation
business analysis
307 An important aspect of the screening and evaluation stage of the new-product
.
process is an examination of the technical feasibility for the product. For example,
3M was able to use the firm's micro-replication technology (the 3,000 tiny fingers) to
A. improve the gripping power of batting or work gloves.

B. keep baseball caps from sliding off the heads of bald men.
C. make Formula One race cars more aerodynamic.
D. as a replacement for Velcro's hook-and-loop fasteners.
E. hold pictures in a photo album without damaging them.
9-76
308 A 3M researcher worked with university students to develop the Post-it Flag
.
Highlighter. His team evaluated the technical feasibility of the proposed design and
determined whether the idea met the firm's new-product objectives. At which stage
of the new-product process was this product?
A.
B.
C.
D.
E.
idea generation
business analysis
concept testing
309 Customer experience management (CEM) is

.
A. the integration of the service component of the marketing mix with efforts to
influence consumer demand.
B. the unique combination of benefits received by targeted buyers that include
quality, convenience, on-time delivery, and both before-sale and after-sale service
at a specific price.
C. the process of managing the entire customer experience within the company.
D. a cluster of benefits that an organization promises customers to satisfy their
needs.
E. the ability of logistics management to satisfy users in terms of time, dependability,
communication, and convenience.
310 __________ includes considering employee interactions with customers to ensure they
.
are consistently delivered and experienced, clearly differentiated from other
offerings, and relevant and valuable to the target market.
A.
B.
C.
D.
E.
Capacity management
Customer experience management
Derived demand
Internal marketing
The key service factor
311 An external evaluation with consumers that consists of preliminary testing of a new.
product idea rather than the actual product is referred to as
A.
B.
C.
D.
E.

idea generation.
crowdsourcing.
market testing.
a concept test.
9-77
312 A concept test is an

.
A. internal evaluation among members of the entire cross-functional new-product
development team that consists of preliminary testing of a new-product idea
rather than the actual product.
B. external evaluation with consumers that consists of preliminary testing of a newproduct idea rather than the actual product.
C. internal evaluation that consists of preliminary testing of a new-product idea using
a mock-up or prototype of the new item.
D. in-house computer simulation of the new product that closely resembles the actual
product to forecast sales.
E. in-depth questionnaire filled out both by internal marketing personnel and external
customers to ensure that the final product meets all the needs expressed in the
original product plan.
313 Concept tests are part of which stage in the new-product process?
.
A.
B.
C.
D.
E.
development
idea generation
business analysis
314 The stage of the new product process that specifies the features of the product and
.
the marketing strategy needed to bring it to market and make financial projections is
referred to as
A.
B.
C.
D.
E.
idea generation.
business analysis.
marketing analysis.
product development.
commercialization.
315 Business analysis refers to the stage of the new product process
.
A. where the target markets are selected and resources are allocated to reach them.
B. where the target market segments that show potential are selected and those that
do not are eliminated.
C. that specifies the features of the product and the marketing strategy needed to
D. where there is a formal accounting of all monies spent on R&D to determine the
return on investment (ROI) that the new product will give back to the firm.
E. that internally and externally evaluates new-product ideas to eliminate those
warranting no further effort.
9-78
316 An assessment of the fit of the proposed new products, from whether it can be
.
economically developed and manufactured to the marketing strategy needed, take
place during which stage of the new-product process?
A.
business analysis
B.
C.
D.
development
E. These activities are addressed at every stage with the exception of new-product
strategy development.
317 A general review of possible marketing and product synergies, economic analysis,
.
and cannibalization potential would all take place during which stage of the newproduct process?
A.
business analysis
B.
C.
D.
development
E. These activities are addressed at every stage except new-product strategy
development.
318 Detailed financial projections and assessments of marketing and product synergies
.
are a part of which stage of the new-product process?
A.
B.
C.
D.
E.
idea generation
market testing
business analysis
development
commercialization
319 Factors such as specifying product features, marketing strategy, and financial
.
projections are a part of which stage of the new-product process?
A.
B.
C.
D.
E.
idea generation
market testing
development
commercialization
business analysis
9-79
320 All of the following actions occur during the business analysis stage of the new.
product process EXCEPT:
A. using capacity management to find ways to match the availability of the service
offering to when it is needed.
B. assessing the marketing and product synergies related to the company's existing
operations.
C.
turning the idea on paper into a prototype.
D. determining whether the new product can be protected with a patent or copyright.
E. assessing whether the proposed new product fits with the company's mission and
objectives.
321 A full-scale operating model of the product under development is referred to as a
.
A.
B.
C.
D.
E.
sample.
framework.
template.
prototype.
blueprint.
322 A prototype is a
.
A. miniature version of an actual new product used in concept testing to identify any
changes that need to be made prior to its commercialization.
B. full-scale operating model of the product under development.
C. sample of a new product given to prospective customers and opinion leaders used
to generate awareness prior to the product's commercial release.
D. simulated operating model of the product given to consumers to use in full-scale
field testing.
E. digital version of a product produced in multiple shapes, colors, and sizes to
determine which version of the product customers like best.
323 For services, business analysis must consider __________, which finds ways to match
.
the availability of the service to when it is needed.
A.
B.
C.
D.
E.
capacity management
customer experience management
derived demand
internal marketing
the seven I's of services GDP
9-80
324 In implementing capacity management, service providers use __________ to charge

.
different prices for different times of the day or week to help match the supply and
demand for their services.
A.
B.
C.
D.
E.
off-peak pricing
dynamic pricing
capacity pricing
down-time pricing
yield management pricing
325 One tool available for services when dealing with capacity management is to use
.
__________ to charge different prices during different times of the day or the week to
help match the supply and demand for their services.
A. variable hours of operation - opening or closing a store at different times

B.
sales promotion incentives such as coupons
C.
off-peak pricing
D.
build-to-order service delivery systems
E.
rationing
326 The stage of the new-product process that turns an idea on paper into a prototype is
.
A.
B.
C.
D.
E.
idea generation
business analysis
commercialization
development
327 Development refers to the stage of the new-product process

.
A. where initial ideas are generated and discussed.
B.
that turns an idea on paper into a prototype.
C. where product characteristics and product benefits are selected.
D. where cross-functional team members and leaders are selected and initial tasks
are assigned.
E. where the first version of a product enters the marketplace.
9-81
328 In the new-product process, product ideas that survive the business analysis stage
.
proceed to the __________ stage.
A.
B.
C.
D.
E.
market testing
business analysis
development
commercialization
329 At Mattel, Barbie is child-tested to be sure the doll cannot be broken apart and
.
accidentally choke a child. This type of consumer or safety test occurs during the
A.
B.
C.
D.
E.

development
business analysis
market testing
330 After the new owner purchased a fully equipped yogurt factory, it took a yogurt
.
master a year and a half to come up with the perfect formulation for Chobani Greek
Yogurt. The most likely stage of the new-product process during which this time was
spent is __________.
A.
B.
C.
D.
E.
development
market testing
idea generation
business analysis
331 New-product strategy development calls for INGenius Co. to develop a battery
.
recycler for the business market. Which is the most likely stage of the new-product
process in which manufacturing issues regarding the new product become an
especially important element?
A.
B.
C.
D.
E.
market testing
idea generation
development
business analysis
9-82
332 If you watch much television, you have seen the ads that show a controlled crash of
.
a car containing crash test dummies and the resultant vehicular damage. In the newproduct process, this safety test would occur during the __________ stage.
A.
B.
C.
D.
E.
development
market testing
idea generation
business analysis
333 According to the textbook, which of the following firms is in the development stage of
.
the new-product process for a driverless car?
A.
B.
C.
D.
E.
Honda
Apple
Google
Ford
General Motors
334 Another name for the steps in the service delivery process is __________.
.
A.
B.
C.
D.
E.
service interactions
access points
path-analysis
service encounters
wheel of services
335 Which of the following activities are accomplished during the development stage for
.
services?
A.
developing off-peak pricing strategies
B. using fast prototyping to improve the initial service design
C. ensuring that employees have the commitment and skills to meet customers'
expectations and sustain their loyalty
D. using capacity management models to match service availability with consumers'
needs
E. analyzing the sequence of service encounters
9-83
336 Since its launch, Netflix has changed its business model in order to
.
A. compete with Blockbuster's retail store expansion.
B. respond to changing customer service needs.
C. expand its focus from entertainment to movie collectibles and memorabilia.
D. avoid head-to-head competition with satellite television providers, which recently
announced a strategic partnership with Blockbuster that offers a similar service as
Netflix.
E. begin preparations to withdraw from its traditional method of mail delivery, which
takes 2-3 business days, and introduce next-day delivery through FedEx.
337 The stage of the new-product process that exposes actual products to prospective
.
consumers under realistic purchase conditions to see if they will buy is referred to as
A.
B.
C.
D.
E.
development.
market testing.
business analysis.
commercialization.
338 Market testing refers to

.
A. exposing actual products to prospective consumers under realistic purchase
conditions to see if they will buy.
B. making sales and profit projections on prototype products to make go-no-go
decisions.
C. conducting marketing research among a sample of consumers in the target market
to determine which version of a new-product concept is deemed the best.
D. independently run comparison tests with similar products currently in the
marketplace to determine which one performs best.
E. conducting safety tests to determine whether the new product meets the
established requirements when it isn't used as planned.
339 All of the following are examples of test markets EXCEPT:
.
A.
B.
C.
D.
E.
controlled test market

concept test market
simulated test market
laboratory test market
standard test market
9-84
340 Nicole owns a small organic spice company called RaisaSpice and was looking for a
.
new product to add to her company's line. A friend suggested combining spices from
India with tea. In the __________ stage of the new-product process, the spice and tea
mixtures were distributed to grocery stores in Portland and Seattle to see if they sold
well.
A.
B.
C.
D.
E.
idea generation
business analysis
market testing
commercialization
341 Audiences are allowed to preview actual movies (a sneak preview) such as The
.
Hunger Games and Star Trek so that changes might be made before they are
released to the general public during which stage of the new-product process?
A.
B.
C.
D.
E.
market testing
business analysis
commercialization
concept testing
342 Breyer's introduced a new line of ice cream flavors for sale in elegant black
.
containers. This was done on a limited scale to determine consumer reactions before
national distribution of the product. Breyer's new product was in the __________ stage
of the new-product process.
A.
B.
C.
D.
E.
commercialization
business analysis
development
market testing
343 Which of the products listed below would be the best candidate for full-scale market
.
testing?
A.
B.
C.
D.
E.
totally free checking account from Bank One

household frequent flyer program from Delta Airlines
mid-priced luxury sedan made in America by Mazda
new iced coffee beverage from Starbucks
slimmer iMac computer
9-85
344 Test marketing involves offering a product for sale

.
A. to random sample of people in the top ten major cities of the U.S.
B.
in as broad a geographic region as possible.
C. to consumers that are representative of the target market.
D.
on a limited basis in a defined area.
E. only on certain days of the week and hours of the day.
345 Which of the following statements about test marketing is most accurate?
.
A. Test marketing is especially important for new services.
B. Expensive consumer products must be test marketed in extremely upscale
shopping malls to guarantee accurate results.
C. Test marketing is better suited to relatively inexpensive new consumer goods than
for new services.
D. Test marketing is especially important for new, expensive industrial products.
E. Standard test markets are the least expensive and fastest type.
346 If a firm used IRI's BehaviorScan service to track sales of a new product made to a
.
panel of consumers and assess the effectiveness of advertising and other promotion
tactics, what type of test market is this?
A.
B.
C.
D.
E.

concept test market
347 Because of the time, cost, and confidentiality problems of test markets, consumer
.
packaged goods firms often turn to __________, a technique that replicates a full-scale
test market to a limited degree, often in a mall setting.
A.
B.
C.
D.
E.
partial rollouts
virtual reality testing
time-to-market measures
simulated test markets
9-86
348 Simulated test markets (STMs) are often run in shopping malls where consumers are
.
A. asked how much a person is willing to pay for an unfamiliar item.
B. asked whether they saw the firm's advertising campaign.
C. questioned about how often they are likely to shop in that particular location.
D. asked to identify differences between the consumer's behavioral intention and
actual behavior regarding a firm's new product.
E. questioned to identify product users and their likely consumption and media
patterns.
349 The stage of the new-product process that positions and launches a new product in
.
full-scale production and sales is referred to as __________.
A.
B.
C.
D.
E.
marketing program execution

disbursement
launch
commercialization
final distribution
350 Commercialization refers to

.
A. the point at which a new product has diffused throughout the marketplace.
B. the introduction of an offering to sequential geographic areas of the U.S.
C. exposing actual products to prospective consumers under realistic purchase
conditions.
D. the stage of the new-product process that positions and launches a new product in
full-scale production and sales.
E. the point where new-product concepts are transformed into prototypes.
351 Commercialization is the stage in the new-product process
.
A. at which the product is positioned and launched in full-scale production and sales.
B. during which the firm performs its final evaluations of the new-product.
C. when second-year sales forecasts are compared to actual first-year sales figures
using a marketing dashboard.
D. when advertising campaigns are evaluated using Starch scores to identify brand
awareness.
E. at which the product generates the greatest sales and profits.
9-87
352 The most expensive stage in the new-product process for most products and services
.
is
A.
B.
C.
D.
E.
commercialization.
business analysis.
development.
market testing.
353 A slotting fee is a payment that a

.
A. wholesaler makes to place a new product on a retailer's shelf.
B. manufacturer makes to have a wholesaler distribute a new product to retailers.
C. manufacturer makes to place a new product on a retailer's shelf.
D. manufacturer makes to a wholesaler as compensation for warehousing inventory.
E. manufacturer makes to a retailer as compensation for sales not made while the
product was on the shelf.
354 Marketers pay slotting fees to grocers in payment for space - or slots - on their retail
.
shelves. Such slotting fees significantly increase the cost of which stage of the newproduct process?
A.
B.
C.
D.
E.
business analysis
market testing
commercialization
idea generation
355 Kroger required that Birds Eye pay $15,000 per month to get its new Vegetable
.
Quinoa Pilaf placed in the middle shelves in the frozen vegetable freezer section of
all its supermarkets around the country. This payment is an example of a
A.
B.
C.
D.
E.
product placement fee.

bribe.
slotting fee.
product support fee.
shelf space allowance.
9-88
356 A failure fee is a penalty payment

.
A. a retailer assesses a manufacturer to handle defective new products that
customers returned.
B. a wholesaler makes to a retailer as compensation for sales not made while the
C. a retailer makes to a manufacturer for stockouts - not keeping point-of-purchase
displays continuously stocked with the new product.
D. a manufacturer makes to a wholesaler as compensation for case-lot sales not
made to retailers.
E. a manufacturer makes to compensate a retailer for devoting valuable shelf space
to a product that fails to sell.
357 If a new grocery product does not achieve a predetermined sales target, some
.
retailers require a penalty payment by the manufacturer to compensate them for
sales that its valuable shelf space was unable to generate. What is this type of
payment called?
A.
B.
C.
D.
E.
an opportunity cost charge

lost sales fee
shelf space allowance
product displacement fee
a failure fee
358 Introducing new-products sequentially into geographic areas of the U.S. to allow
.
production levels and marketing activities to build up gradually to minimize the risk
of new-product failure is referred to as
A.
B.
C.
D.
E.
limited rollouts.
phased rollouts.
market-product expansion.
regional rollouts.
phased commercialization.
359 A new beverage by Snapple is currently being sold only in the western United States.
.
Over the next year, Snapple plans to introduce the beverage into areas in the
Midwest, and then the eastern U.S. This distribution strategy during
commercialization is referred to as a
A.
B.
C.
D.
E.
limited rollout.
phased rollout.
regional rollout.
9-89
360 Speed or __________ is often vital in introducing a new product.

.
A.
B.
C.
D.
E.
perpendicular development
time to market
red tape cutting
fast concepting
delivery expediting
361 Parallel development is the simultaneous development of both

.
A.
B.
C.
D.
E.
the product and promotion strategies.

production and financing tactics.
the product and the production process.
production and selling methodologies.
R&D and financial analysis.
362 Parallel development, involving the simultaneous development of both the product
.
and the production process, is the responsibility of __________.
A.
B.
C.
D.
E.
cross-functional teams
the marketing department
research and development engineers
product managers
top management
363 __________ often speeds up software development by using a "do it, try it, fix it"
.
approach that encourages continuous improvement even after the initial design.
A.
B.
C.
D.
E.
Time to market
Parallel development
Test marketing
Groupthink
Fast prototyping
364 Which of the following methods is commonly used in software development to speed
.
up the development process?
A.
B.
C.
D.
E.
expedited time to market

fast prototyping
parallel development
controlled test marketing
concept testing
9-90
365 The initial target market for X-1 products consisted of __________.
.
A. seniors who want easy-to-use TV remotes with large buttons
B. athletes who want waterproof, sweatproof, and weatherproof audio equipment
C. audiophiles who want HD Sirius/XM Satellite radio receivers in their homes
D. consumers who want an inexpensive MP3 player like the old Sony Walkman
E. smartphone users who want a "plug-in" device that lets them listen to AM radio on
their smartphone
366 X-1 uses all of the following sources to generate new-product ideas EXCEPT:
.
A.
B.
C.
D.
E.
co-workers
Team X-1
employees
retail buyers
R&D lab IDEO
367 X-1 performs all of the following activities during the development stage of its new.
product process EXCEPT:
A.
B.
C.
D.
E.
conduct safety tests

conduct market tests
use 3D drawings
conduct functionality tests
develop prototypes
Short Answer Questions
368 Briefly define what is meant by a product. Explain the characteristics that would
.
define a product, good, service, and an idea. Give an example of each.
9-91
369 Explain the difference between consumer products and business products. Why are
.
some products difficult to categorize as one or the other? Give an example of a
business product, a consumer product, and a product that is difficult to categorize.
370 What are the four types of consumer products? How do they differ?
.
371 Explain the differences in promotion between convenience, shopping, specialty, and
.
unsought products.
9-92
372 Explain what an unsought product is and give some examples.

.
373 The movie The Hunger Games opened originally in a select number of theaters
.
before opening nationwide. After its theater run, it was shown on pay-per-view
channels and then on premium movie channels. The movie also was made widely
available in video stores, via Netflix, and on DVD/Blue-ray. What type(s) of consumer
product is this movie? Explain your answer.
374 Define derived demand and provide an example NOT included in the text.
.
9-93
375 What categories of products are classified as business support products? Give an
.
example of each category.
376 Describe the three ways services can be classified.

.
377 Services incorporate the four I's of product marketing. How would each of these four
.
elements apply to a stock brokerage service?
9-94
378 What does it mean when we say services are intangible. How do marketers of
.
services overcome the problems associated with intangibility?
379 What is the difference between intangibility and inseparability of services?

.
380 Characterize the difference between a product line and a product mix. Give an
.
example of each.
9-95
381 Describe the different ways to define a product as new.

.
382 Compare continuous, dynamically continuous, and discontinuous innovations.

.
Provide the marketing strategy and an example of each.
383 What are the eight marketing reasons for new-product failures?
.
9-96
Thirsty Dog! Thirsty Cat! Ad

384 The Thirsty Dog! & Thirsty Cat! ad above shows an example of a product that failed
.
in the marketplace. Identify and describe the reason(s) for this unique item's
marketing-related product failure.
385 Identify and describe each stage in the new-product process in the correct order.
.
9-97
386 What is idea generation in the new-product process? From where do forward thinking
.
marketers get their ideas?
387 How could a firm use a test market in its new-product process?
.
388 Explain why NOT all products can use test markets.
.
9-98
Chapter 09 Developing New Products and Services Answer Key
Multiple Choice Questions
1.
(p. 212
)
Advertising Age named its CEO Marketer of the Decade, Fortune rated it as the
world's most admired company and Bloomberg Businessweek perennially identifies
it as the most innovative company in the world. This firm is
A.
B.
C.
D.
E.
IBM
Microsoft
3M
Kodak
Apple
Steve Jobs was named Marketer of the Decade, Fortune rated Apple Inc. as the
world's most admired company and Bloomberg Businessweek perennially rates
Apple as the most innovative company in the world.
AACSB: Analytical Thinking

Accessibility: Keyboard Navigation
Blooms: Remember
Learning Objective: 09-05 Describe the factors contributing to the success or failure of a new product or
service.
Level of Difficulty: 1 Easy
Topic: Chapter Opener: Apple
2.
(p. 212
)
The Apple II, Macintosh, iPod, iPhone, iPad, and CarPlay are all examples of Apple's
commitment to __________.
A.
B.
C.
D.
E.
sustainable procurement
social responsibility
new product development
using renewable resources
respecting its workforce
The life of an organization depends on how it conceives, produces, and markets

new products (goods, services, and ideas). The late Steve Jobs's innovations
revolutionized six industries: personal computers, animated movies, music,
phones, tablet computing, and digital publishing.

9-99

Blooms: Understand
service.
Level of Difficulty: 2 Medium
3.
(p. 212
)
The late Steve Jobs oversaw or invented innovations that revolutionized six
industries. Which industry below is NOT one of them?
A.
B.
C.
D.
E.
music
smartphones
personal computers
cable television
tablet devices
The late Steve Jobs oversaw or invented innovations that revolutionized six
industries: personal computers, animated movies, music, phones, tablet
computing, and digital publishing. As of mid-2013, Apple had not yet
revolutionized the cable television industry.

Blooms: Understand
Learning Objective: 09-04 Explain the significance of "newness" in new products and services as it relates to
the degree of consumer learning involved.
4.
(p. 213
)
The Apple innovation that leading car manufacturers are incorporating into their
offering that allows users a "smarter, safer, and more fun way to use iPhone in the
car" is referred to as
A.
B.
C.
D.
E.
iPod
iCloud
iCar
iPad
CarPlay
This is a description of CarPlay, which allows users a "smarter, safer, and more fun
way to use iPhone in the car" by facilitating making phone calls, listening to music,
and receiving messages.

Blooms: Understand
service.
9-100
5.
A product refers to
(p. 213
)
A. a tangible good received in exchange for a person's time and effort.

B. intangible activities or benefits that an organization provides to satisfy
C. a good that has in some way been altered, combined, or improved and sold to
organizational buyers.
D. is a thought that leads to an action such as a concept for a new invention.
E. a good, service, or idea consisting of a bundle of tangible and intangible
attributes that satisfies consumers' needs and is received in exchange for
money or something else of value.
Key term definition - product.

Blooms: Remember
Learning Objective: 09-01 Recognize the various terms that pertain to products and services.
Topic: Product
6.
(p. 213
)
A good, service, or idea consisting of a bundle of tangible and intangible attributes

that satisfies consumers' needs and is received in exchange for money or
something else of value is referred to as __________.
A.
B.
C.
D.
E.
a utility bundle
a product
a service
an idea
merchandise

Blooms: Remember
Topic: Product
9-101
7.
(p. 213
)
A product is a good, service, or idea consisting of a bundle of tangible and

intangible attributes that satisfy consumers' needs and is received in exchange
A.
B.
C.
D.
E.
only for legal tender (money).

for providing value.
only for barter.
for a person's time and effort.
for money or something else of value.

Blooms: Remember
Topic: Product
8.
(p. 213
)
A product is a good, service, or idea consisting of a(n) __________ that satisfy

value.
A. promise or commitment exchanged between a seller and a buyer

B.
bundle of tangible and intangible attributes
C.
assortment of value-possessing activities
D.
array of physical attributes
E.
collection of tangible qualities

Blooms: Remember
Topic: Product
9-102
9.
(p. 214
)
As a marketing term, __________ generally includes not only physical goods, but
also services and ideas as well.
A.
B.
C.
D.
E.
marketing
invention
merchandise
product
concept
Throughout the textbook, the term product generally includes not only physical
goods but services and ideas as well.

Blooms: Remember
Topic: Product
10.
A good has tangible attributes that a consumer's __________ can perceive.
(p. 214
)
A.
B.
C.
D.
E.
cognitive intelligence
vision
knowledge of past experiences
five senses
emotional intelligence
Text term definition - good.

Blooms: Remember
Topic: Goods
9-103
11.
(p. 214
)
A product that has tangible attributes that a consumer's five senses can perceive
is referred to as a(n)
A.
B.
C.
D.
E.
good.
service.
product concept.
new idea.
artifact.
Text term definition - good.

Blooms: Remember
Topic: Goods
12.
Goods can be divided into __________ goods and __________ goods.
(p. 214
)
A.
B.
C.
D.
E.
functional; aesthetic
required; desired
tactile; conceptual
durable; nondurable
product; service
Goods can be divided into nondurable goods and durable goods. A nondurable
good is an item consumed in one or a few uses, such as food products and fuel. A
durable good is one that usually lasts over many uses, such as appliances, cars,
and mobile phones.

Blooms: Remember
Topic: Goods
9-104
13.
Which of the following statements regarding goods is most accurate?
(p. 214
)
A. In order to be classified as a good, an item must appeal to all five senses.

B. Music is not considered a good because it only involves a single sense hearing.
C.
Some goods also have intangible attributes.
D. To market a good that contains visual attributes, you cannot use an auditory
medium.
E. The aroma of chocolate chip cookies is considered an idea because it affects
one's senses.
A good also may have intangible attributes consisting of its delivery or warranties
and embody more abstract concepts, such as becoming healthier or wealthier.

Blooms: Understand
Topic: Goods
14.
The division of products into durable and nondurable goods helps to __________.
(p. 214
)
A.
B.
C.
D.
E.
comply with NAICS guidelines

address environmental concerns
comply with ISO 9000 requirements
classify products for tax purposes
provide direction for marketing actions
This classification method of dividing products into durable and nondurable goods
also provides direction for marketing actions. For example, nondurable goods, such
as Wrigley's gum, rely heavily on consumer advertising. In contrast, costly durable
goods, such as cars, generally emphasize personal selling.

Blooms: Understand
Topic: Goods
9-105
15.
Which of the following statements regarding goods is most accurate?
(p. 214
)
A. Nondurable goods would rely more on advertising than durable goods.

B. Durable goods would benefit more on advertising than nondurable goods.
C. There is little if any difference between marketing actions between durable and
nondurable goods.
D. Nondurable goods would rely more on personal selling than durable goods.
E. The durable and nondurable classification applies to services as well as to
products.
A nondurable good is an item consumed in one or a few uses whereas a durable
good is one that usually lasts over many uses. This classification method also
provides direction for marketing actions. For example, nondurable goods rely
heavily on consumer advertising. In contrast, durable goods generally emphasize
personal selling.

Blooms: Understand
Topic: Goods
16.
A __________ is defined as an item consumed in one or a few uses.
(p. 214
)
A.
B.
C.
D.
E.
durable good
convenience good
specialty good
shopping good
nondurable good
Text term definition - nondurable good.

Blooms: Remember
Topic: Nondurable goods
9-106
17.
A nondurable good is defined as a(n)
(p. 214
)
A.
B.
C.
D.
E.

item that usually lasts over an extended number of uses.
item that lasts at least one year without becoming obsolete.
product purchased only for the use of ultimate consumers.
product used in the production of other products.

Blooms: Remember
18.
(p. 214
)
Items consumed in one or a few uses, such as food and fuel, are referred to as
__________.
A.
B.
C.
D.
E.
services
perishable goods
durable goods
nondurable goods
disposable goods

Blooms: Remember
9-107
19.
(p. 214
)
Among consumer products, advertising and wide distribution are especially

important for
A.
B.
C.
D.
E.
durable goods.
specialty products.
nondurable goods.
production goods.
semidurable goods.
Because nondurable goods are purchased frequently and at relatively low cost,
consumer advertising and wide distribution in retail outlets are essential.

Blooms: Understand
20.
Which of the following is the best example of a nondurable good?
(p. 214
)
A.
B.
C.
D.
E.
laundry detergent
shoes
insurance
iPod
laser surgery
A nondurable good is an item consumed in one or a few uses, such as food or fuel.
Laundry detergent also has this characteristic and is classified as a nondurable
good.

Blooms: Apply
Level of Difficulty: 3 Hard
9-108
21.
Which of the following is the best example of a nondurable good?
(p. 214
)
A.
B.
C.
D.
E.
automobile
e-reader
baseball
gasoline
shoes
A nondurable good is an item consumed in one or a few uses, such as food or fuel.

Blooms: Understand
22.
Advertising is most important for which of the following products?
(p. 214
)
A.
B.
C.
D.
E.
bicycle
toaster
orange juice
deck furniture
watch
The classification of durable versus nondurable provides direction for marketing

actions. For example, nondurable goods, such as orange juice, rely heavily on
consumer advertising.

Blooms: Apply
9-109
23.
A durable good is defined as a(n)
(p. 214
)
A.
B.
C.
D.
E.

item that usually lasts over an extended number of uses.
item that lasts at least one year without becoming obsolete.
product purchased only for the use of ultimate consumers.
product used in the production of other products.
Text term definition - durable goods.

Blooms: Remember
Topic: Durable goods
24.
(p. 214
)
Products that usually last over many uses, such as cars and appliances, are
referred to as
A.
B.
C.
D.
E.
endurable goods.
imperishable goods.
reliable products.
durable goods.
Text term definition - durable goods.

Blooms: Remember
9-110
25.
Cars and appliances are classified as
(p. 214
)
A.
B.
C.
D.
E.
reusable goods.
imperishable goods.
reliable products.
durable goods.
A durable good is one that usually lasts over an extended number of uses, such as
appliances, cars, and smartphones.

Blooms: Understand
26.
Durable goods emphasize which of the following elements of the promotional mix?
(p. 214
)
A.
B.
C.
D.
E.
sales promotion
personal selling
advertising
public relations
direct marketing
Durable goods emphasize the personal selling element of the promotional mix as
compared to nondurable goods where advertising is more important.

Blooms: Understand
9-111
27.
Which of the following is considered a durable good?
(p. 214
)
A.
B.
C.
D.
E.
silverware
caviar
marketing research
chewing gum
voting
A durable good is one that usually lasts over an extended number of uses, such as
silverware.

Blooms: Apply
28.
(p. 214
)
Intangible activities or benefits that an organization provides to satisfy consumers'

needs in exchange for money or something else of value are referred to as
__________.
A.
B.
C.
D.
E.
services
goods
products
marketing mix
ideas
Key term definition - services.

Blooms: Remember
Topic: Services
9-112
29.
Services refer to
(p. 214
)
A. ideas that consist of a bundle of tangible and intangible attributes that satisfies
value.
B. intangible activities or benefits that an organization provides to satisfy
C. philanthropic activities performed in without expectations of monetary
remuneration.
D. any intangible activity that provides a benefit to a consumer that he or she
could not have obtained or performed on his or her own.
E. any tangible activity that provides a benefit to a consumer that he or she could
not have obtained or performed on his or her own.

Blooms: Remember
Topic: Services
30.
Services are
(p. 214
)
A. the tangible activities or benefits that an organization provides to satisfy

B. the activities provided to complement a tangible good, such as technical
support for a computer.
C. the intangible activities or benefits that an organization provides to satisfy
D. any activity required for the production of a good that cannot be completed "inhouse" and must be outsourced to another firm.
E. the human (nonmechanical) component that is part of the manufacturing
process.

Blooms: Remember
Topic: Services
9-113
31.
(p. 214
)
Services contribute how much to the U.S. gross domestic product as compared
with goods?
A.
B.
C.
D.
E.
services contribute about the same

services contribute about half as much
services contribute about twice as much
services contribute about one quarter as much
services are not a component of GDP
Services have become a significant part of the U.S. economy, more important now
that goods. Figure 9-1 shows that services now contribute about $7.6 trillion to the
U.S. GDP, while goods provide only half that. See Figure 9-1.

Blooms: Remember
Topic: Services
Figure 9-1
9-114
32.
As shown in Figure 9-1 above, which of the following statements is most accurate?
(p. 214
)
A. Services are a smaller part of the gross domestic product than are goods.
B. In 2012, goods represent a larger part of the gross domestic product than
services.
C.
In 1995, services were worth almost $1 billion.
D. Until 1980, goods and services contributed almost equally to the gross
domestic product (GDP).
E.
In 2012, goods were 50 percent of the GDP.
Until 1980, goods and services contributed almost equally to the gross domestic
product (GDP). Since then, services have been a larger component of the economy.
See Figure 9-1.

Blooms: Understand
Topic: Services
33.
(p. 214
)
Intangible items such as airline trips, financial advice, or telephone service that an
organization provides to consumers are referred to as
A.
B.
C.
D.
E.
production goods.
support products.
services.
goods.
benefits.
Services are intangible activities or benefits that an organization provides to

satisfy consumers' needs in exchange for money or something else of value.

Blooms: Apply
Topic: Services
9-115
34.
Which of the following is considered a service?
(p. 214
)
A.
B.
C.
D.
E.
lamp
motorcycle
potato chips
a marketing class
environmentalism

satisfy consumers' needs in exchange for money or something else of value, such
as the marketing class students are taking.

Blooms: Apply
Topic: Services
35.
Which of the following is considered a service?
(p. 214
)
A.
B.
C.
D.
E.
online banking
bathing suit
silverware
washing machine
freedom

satisfy consumers' needs in exchange for money or something else of value, such
as online banking.

Blooms: Apply
Topic: Services
9-116
36.
Which of the following statements about services is most accurate?
(p. 214
)
A. Although a major contributor to the GDP nationally, services play only a minor
role in GDP on a global scale.
B. The marketing of services is, in a practical sense, identical to the marketing of
products or ideas since they both satisfy customer needs.
C. Only 10% of all jobs created in the United States are in the services sector.
D. In the U.S., services contribute about twice the value of goods to the GDP.
E. There is much more in common with the marketing of services and business
products than there is between the marketing of services and consumer
products.
Services have become a significant part of the U.S. economy, more important now
that goods. Figure 9-1 shows that services now contribute about $7.6 trillion to the
U.S. GDP, while goods provide only half that. See Figure 9-1.

Blooms: Understand
Topic: Services
37.
In marketing, an idea is
(p. 214
)
A.
a thought that leads to a product or action.
B.
an inspiration that evolved from market research.
C.
an observation about a series of events.
D. a concept explaining the behavior of an individual or group.
E. an observation about an individual or group and how they use a service or
product.
Text term definition - idea.

Blooms: Remember
Topic: Idea
9-117
38.
In marketing, a(n) __________ is a thought that leads to a product or action.
(p. 214
)
A.
B.
C.
D.
E.
observation
inspiration
innovation
idea
perception
Text term definition - idea.

Blooms: Remember
Topic: Idea
39.
Which of the following is considered an idea?
(p. 214
)
A.
B.
C.
D.
E.
haircut
birdfeeder
theater production
marketing class
security
An idea is a thought that leads to a product or action, such as the notion of

security.

Blooms: Apply
Topic: Idea
40.
Consumer products refer to
(p. 215
)
A.
products used in the production of other items.
B.
C. products an industrial buyer will make an effort to seek out and buy.
D. items purchased frequently and with a minimum of shopping effort.
E. products that assist directly or indirectly in providing products for resale.
Key term definition - consumer products.

9-118

Blooms: Remember
Learning Objective: 09-02 Identify the ways in which consumer and business products and services can be
classified.
Topic: Consumer products
41.
(p. 215
)
Products that are purchased by the ultimate consumer are referred to as

__________.
A.
B.
C.
D.
E.
generic products
end user goods
personal items
merchandise
consumer products
Key term definition - consumer products.

Blooms: Remember
classified.
42.
Which of the following would most likely be considered a consumer product?
(p. 215
)
A.
B.
C.
D.
E.
bricks
cotton fiber
printing press
suitcases
mainframe computer
Consumer products like suitcases are products purchased by the ultimate

consumer. The other products listed are business products.

Blooms: Apply
classified.
9-119
43.
(p. 215
)
Products organizations buy that assist in providing other products for resale are
A.
B.
C.
D.
E.
reseller goods
wholesale goods
business products
ancillary products
retail products
Key term definition - business products.

Blooms: Remember
classified.
Topic: Business products
44.
Business products refer to
(p. 215
)
A. products organizations buy that assist in providing other products for resale.
B. supplies necessary for the day-to-day operations of a business.
C. ancillary services necessary for the operation of a business.
D. products that are sold exclusively to for-profit businesses.
E.
Key term definition - business products.

Blooms: Remember
classified.
9-120
45.
Business products are also referred to as __________.
(p. 215
)
A.
B.
C.
D.
E.
B2B products
B2C products
B4B products
BOB products
B4C products
Business products, also called B2B (business-to-business) products or industrial

products, are ones that assist directly or indirectly in providing products for resale.

Blooms: Remember
classified.
46.
Business products are also referred to as __________.
(p. 215
)
A.
B.
C.
D.
E.
commodities
industrial products
wares
resale products
merchandise


Blooms: Remember
classified.
9-121
47.
Industrial products are also referred to as __________ products.
(p. 215
)
A.
B.
C.
D.
E.
consumer
merchandise
organizational
resale
business


Blooms: Remember
classified.
48.
(p. 215
)
An iMac personal computer from Apple can be classified according to all of the
following categories EXCEPT:
A.
B.
C.
D.
E.
a business product.
a nondurable good.
a B2B product.
a durable good.
a consumer product.
Some products can be considered both consumer and business items. For
example, an Apple iMac computer can be sold to consumers for personal use or to
business firms for office use. Each classification results in different marketing
actions. An iMac is not a nondurable good because it is not consumed in one or a
few uses.

Blooms: Understand
classified.
Topic: Classifying products
9-122
49.
(p. 215
)
Consumer product classifications differ in terms of the: (1) effort the consumer
spends on the decision; (2) frequency of purchase; and (3) the
A.
B.
C.
D.
E.
amount of money the customer is willing and able to spend.

number of competing or substitute products.
demographics of the consumer.
attributes used in making the purchase decision.
consumer segmentation characteristics.
The four types of consumer products differ in terms of the: (1) effort the consumer
spends on the decision; (2) attributes used in making the purchase decision; and
(3) frequency of purchase. See Figure 9-2.

Blooms: Understand
classified.
Topic: Classifying consumer products
50.
Convenience products refer to
(p. 215
)
A. items that consumers will make special efforts to seek out and buy.
B. items for which consumers compare several alternatives on criteria such as
price, quality, or style.
C. products consumers purchase frequently and with a minimum of shopping
effort.
D. ancillary products used to make other products work more efficiently.
E. low-cost items for which there are numerous substitutes and generic
equivalents.
Key term definition - convenience products.

Blooms: Remember
classified.
Topic: Convenience products
9-123
51.
(p. 215
)
In terms of price, which of the following types of consumer product would be

relatively inexpensive?
A.
B.
C.
D.
E.
shopping product
convenience product
specialty product
unsought product
supplies
Convenience products are a consumer product that is a relatively low-priced

consumer product. See Figure 9-2.

Blooms: Understand
classified.
52.
With respect to distribution, convenience products are available
(p. 215
)
A.
B.
C.
D.
E.

at a large number of specialty outlets.
only online from the manufacturer.
only at convenience stores.
Because consumers are unwilling to exert much search effort, convenience

products must be widely available at a widespread variety of retail outlets. See
Figure 9-2.

Blooms: Understand
classified.
9-124
53.
(p. 215
)
In terms of promotion, which of the following type of product would stress price,
availability, and awareness?
A.
B.
C.
D.
E.
shopping
convenience
specialty
unsought
supply
Promotion for convenience products stresses price, availability, and awareness.

See Figure 9-2.

Blooms: Understand
classified.
54.
(p. 215
)
In terms of brand loyalty, consumers are aware of a brand but will readily accept
substitutes for which type of product?
A.
B.
C.
D.
E.
specialty products
unsought products
shopping products
supplies
For convenience products, consumers are aware of the brand but will accept
substitutes. See Figure 9-2.

Blooms: Understand
classified.
9-125
55.
Which of the following is the best example of a convenience product?
(p. 215
)
A.
B.
C.
D.
E.
Kindle Fire
flight on United Airlines
Roget's Thesaurus
Hidden Valley Ranch salad dressing
Salad dressing is relatively inexpensive, widely available, advertised and promoted

heavily, and is purchased frequently with little time and effort.

Blooms: Apply
classified.
56.
(p. 215
)
Items for which the consumer compares several alternatives on several criteria
such as price, quality, or style are referred to as __________.
A.
B.
C.
D.
E.
specialty products
selective products
shopping products
prestige products
Key term definition - shopping products.

Blooms: Remember
classified.
Topic: Shopping products
9-126
57.
Shopping products refer to items that the consumer
(p. 215
)
A. purchases frequently, conveniently, and with a minimum of effort.

B. compares several alternatives on criteria such as price, quality, or style.
C.
makes a special effort to search out and buy.
D. does not know about or knows about but does not initially buy.
E. buys as a result of buying others' consumer products, such as impulse
purchases.

Blooms: Remember
classified.
58.
(p. 215
)
The type of good for which the consumer compares several alternatives on such
criteria as price, quality, and style is a(n)
A.
B.
C.
D.
E.
shopping product.
specialty product.
unsought product.
B2B product.

Blooms: Remember
classified.
9-127
59.
(p. 215
)
Which type of consumer product is purchased relatively infrequently and the

purchase decision takes some time because the consumer compares offerings
during the shopping experience?
A.
B.
C.
D.
E.
convenience product
shopping product
specialty product
unsought product
Figure 9-2 shows that for shopping products, consumers make these purchases
infrequently and require extended shopping time to compare offerings.

Blooms: Understand
classified.
60.
With respect to distribution, shopping products are available
(p. 215
)
A.
B.
C.
D.
E.
by special order from the manufacturer.

at an extremely small number of outlets.
at a large number of selective outlets.
Figure 9-2 shows that shopping products are available at a large number of
selective outlets.

Blooms: Understand
classified.
9-128
61.
With respect to price and availability, shopping products are likely to be
(p. 215
)
A.
relatively inexpensive and widely available.
B.
relatively inexpensive but very limited availability.
C. very expensive and available at a large number of selective outlets.
D.
very expensive with very limited availability.
E. fairly expensive and available at a large number of selective outlets.
Figure 9-2 indicates that shopping products are fairly expensive and are distributed
through a large number of selective outlets.

Blooms: Understand
classified.
62.
(p. 215
)
In terms of promotion, which of the following type of consumer product stresses

product differentiation from competitors?
A.
B.
C.
D.
E.
shopping product
convenience product
specialty product
unsought product
Figure 9-2 shows that the promotion goal for a shopping product is to differentiate
it from competitors.

Blooms: Understand
classified.
9-129
63.
(p. 215
)
In terms of brand loyalty, consumers prefer specific brands but will accept
A.
B.
C.
D.
E.
shopping product
convenience product
specialty product
unsought product
Figure 9-2 shows that consumers will prefer specific brands of shopping products
but will accept substitutes.

Blooms: Understand
classified.
64.
(p. 215
)
You decide to buy a new car. You talk to friends about it, research mechanical
specifications in Consumer Reports, test drive different makes and models, and
compare prices at several dealerships. Into which classification of consumer
products would your new car purchase fall?
A.
B.
C.
D.
E.
specialty product
unsought product
shopping product
convenience product
Shopping products are items for which the consumer compares several
alternatives on criteria such as price, quality, or style - the situation described for
your new car purchase.

Blooms: Apply
classified.
9-130
65.
Specialty products refer to
(p. 215
)
A.
products for which there are no close substitutes.
B. products purchased for their prestige or high perceived value.
C. products a consumer will make a specific effort to search out and buy.
D. items for which the consumer compares several alternatives on several criteria
such as price, quality, or style.
E. items that the consumer does not know about or knows about but does not
initially buy.
Key term definition - specialty products.

Blooms: Remember
classified.
Topic: Specialty products
66.
(p. 215
)
Which type of consumer product is purchased infrequently and takes an extensive

amount of time to make the purchase decision?
A.
B.
C.
D.
E.
convenience product
shopping product
specialty product
unsought product
Figure 9-2 shows that the consumer makes infrequent purchases of specialty
products and needs extensive search and decision time for their purchase.

Blooms: Understand
classified.
9-131
67.
(p. 215
)
With respect to price, which of the following type of consumer product would
usually be very expensive?
A.
B.
C.
D.
E.
convenience product
shopping product
specialty product
unsought product
Figure 9-2 shows that specialty consumer products are usually very expensive.

Blooms: Understand
classified.
68.
Distribution is very limited with which of the following type of consumer product?
(p. 215
)
A.
B.
C.
D.
E.
shopping product
convenience product
prepurchase product
specialty product
Figure 9-2 shows very limited distribution takes place for specialty products.

Blooms: Understand
classified.
9-132
69.
(p. 215
)
In terms of promotion, which of the following type of consumer product stresses

status and brand uniqueness?
A.
B.
C.
D.
E.
specialty product
convenience product
shopping product
unsought product
Figure 9-2 indicates that promotion of specialty products stresses the uniqueness
of the brand and status of the product.

Blooms: Understand
classified.
70.
(p. 215
)
In terms of brand loyalty, consumers are very brand loyal and will not accept
A.
B.
C.
D.
E.
shopping product
convenience product
specialty product
unsought product
Figure 9-2 shows that consumers are very brand loyal and will not accept
substitutes for specialty products.

Blooms: Understand
classified.
9-133
71.
(p. 215
)
You greatly admire a set of Waterford crystal serving bowls you see at a dinner
party and decide to buy two despite their cost of $250 each. They are only
available in your area in a Waterford shop 40 miles from campus. Into which
classification of consumer products would the Waterford crystal serving bowls fall?
A.
B.
C.
D.
E.
shopping products
unsought products
specialty products
discretionary products
Specialty products are items that a consumer makes a special effort to search out
and buy, such as the Waterford crystal serving bowls.

Blooms: Apply
classified.
72.
(p. 215
)
Burberry makes fine raincoats, clothing, and other items, many that feature the
company's distinctive plaid. Originally found only in Great Britain, Burberry has
opened a limited number of exclusive shops in leading cities around the world to
reach customers who value its name and quality. Burberry is selling which
classification of consumer product?
A.
B.
C.
D.
E.
convenience product
shopping product
unsought product
specialty product
Burberry sells specialty products that a consumer makes a special effort to search
out and buy. Items are usually expensive and are found in a very limited number of
high-end stores.

Blooms: Apply
classified.
9-134
73.
Unsought products are
(p. 215
)
A. any products associated with impulse buys at the supermarket checkout

counter.
B. products that were once very popular but that have become obsolete because
they are in the decline stage of their product life cycle.
C. items within a company's product line that do not perform as well as others in
the line.
D. products that the consumer does not know about or knows about but does not
initially want.
E. products that people choose to ignore because they find them offensive from a
moral or ethical perspective.
Key term definition - unsought products.

Blooms: Remember
classified.
Topic: Unsought products
74.
Which of the following is most likely to be an example of an unsought product?
(p. 215
)
A.
B.
C.
D.
E.
snow shovel
smartphone
gym membership
calculator
burial insurance
Unsought products are items that the consumer either does not know about or
knows about but does not initially want, like burial insurance. See Figure 9-2.

Blooms: Understand
classified.
9-135
75.
(p. 215
)
Very infrequent purchases with some comparison shopping are characteristic of

the purchasing behavior for a type of consumer product (such as a thesaurus) that
a prospective buyer may not initially want. This type of consumer service is
referred to as a(n)
A.
B.
C.
D.
E.
unsought product.
shopping product.
specialty product.
support product.
Figure 9-2 shows that very infrequent purchases and some comparison shopping
characterize the purchase behavior of consumers for unsought products like a
thesaurus.

Blooms: Understand
classified.
76.
(p. 215
)
With respect to promotion, which of the following strategies would most likely be
used for unsought products?
A.
B.
C.
D.
E.
offering consumer and trade sales promotions

establishing the uniqueness and status of the brand
generating awareness
differentiating the brand from competitive brands
stressing price and availability in advertising
Figure 9-2 shows that awareness is an essential goal of promotion for unsought
products.

Blooms: Understand
classified.
9-136
77.
Which of the following is most likely to be an example of an unsought product?
(p. 215
)
A.
B.
C.
D.
E.
iPod MP3 player

flight on American Airlines to Phoenix
Roget's Thesaurus
Ivory soap
knows about but does not initially want, like Roget's Thesaurus.

Blooms: Understand
classified.
78.
(p. 215
)
A newly-invented apple peeling and coring machine for the consumer market
would be considered a(n)
A.
B.
C.
D.
E.
shopping product.
specialty product.
unsought product.
discretionary product.
knows about but does not initially want, like this kitchen product that would
initially lack awareness.

Blooms: Apply
classified.
9-137
79.
(p. 215
)
Fifty percent or more of American adults have not had their teeth checked by a
dentist within the last five years. For these people, dental services would most
likey be classified as a(n)
A.
B.
C.
D.
E.
shopping product.
specialty product.
unsought product.
business product.
knows about but does not initially want. While most consumers know about dental
checkups, they also know the service can be very expensive and perhaps
uncomfortable, especially if the consumer hasn't seen the dentist for the past five
years. He or she may not initially want this service, perhaps being afraid of what
the check-up might reveal.

Blooms: Apply
classified.
Figure 9-2
9-138
80.
According to Figure 9-2 above, column A would represent which type of product?
(p. 215
)
A.
B.
C.
D.
E.
shopping
convenience
specialty
prestige
unsought
Figure 9-2 shows that specialty products (A) are items that a consumer makes a
special effort to search out and buy.

Blooms: Understand
classified.
Topic: Classification of consumer products
81.
According to Figure 9-2 above, column B would represent which type of product?
(p. 215
)
A.
B.
C.
D.
E.
shopping
convenience
specialty
prestige
unsought
Figure 9-2 shows that unsought products (B) are items that the consumer does not
know about or knows about but does not initially want.

Blooms: Understand
classified.
9-139
82.
According to Figure 9-2 above, column C would represent which type of product?
(p. 215
)
A.
B.
C.
D.
E.
shopping
convenience
specialty
prestige
unsought
Figure 9-2 shows that convenience products (C) are items that the consumer
purchases frequently, conveniently, and with a minimum of shopping effort.

Blooms: Understand
classified.
83.
According to Figure 9-2 above, column D would represent which type of product?
(p. 215
)
A.
B.
C.
D.
E.
shopping
convenience
specialty
prestige
unsought
Figure 9-2 that shopping products (D) are items for which the consumer compares
several alternatives on criteria, such as price, quality, or style.

Blooms: Understand
classified.
9-140
84.
(p. 215
)
Considering the classification of consumer products, which of the following

products will have the most limited distribution?
A.
B.
C.
D.
E.
Secret antiperspirant
Fuji disposable camera
BP gasoline
Marchesa wedding gown
Sony HDTV
Marchesa wedding gowns will have the most limited distribution since they are a
specialty product.

Blooms: Apply
classified.
85.
(p. 215
)
Vivienne, a college student with limited financial resources, was considering the
purchase of a new automobile. She went from car dealer to car dealer in several
different cities searching for the lowest price on a new economy car. She devoted a
great deal of time and energy to getting the best value for her money. For
Vivienne, an automobile was a(n) __________.
A.
B.
C.
D.
E.
specialty product
unsought product
shopping product
convenience product
Because Marissa searched a variety of car dealers and was looking for the lowest
price on her new car, a shopping product for her.

Blooms: Apply
classified.
9-141
86.
(p. 216
)
The demand for a business product that results from the demand for a consumer
product is referred to as
A.
B.
C.
D.
E.
sequential demand.
selective demand.
primary demand.
secondary demand.
derived demand.
Text term definition - derived demand.

Blooms: Remember
classified.
Topic: Derived demand
87.
Which of the following best illustrates the concept of derived demand?
(p. 216
)
A. The number of retail stores in a downtown area decreases even though demand
for retail goods increases.
B. An increase in the number of new, single-family homes results from a spike in
the gross national product.
C. A Chinese plastics company increases its output because of its customers'
higher toy exports to the United States.
D. A heat wave results in an increased demand for air conditioners.
E. Honda reducing its car prices causes GM to do the same.
Sales of industrial products (plastics) frequently result from the sale of consumer
products (Chinese toy exports sold in the U.S.).

Blooms: Apply
classified.
9-142
88.
(p. 216
)
Heavy-duty Rayovac flashlights are sold to consumers throughout the United

States. However, Philips manufactures the bulbs used in Rayovac flashlights. The
quantity of bulbs Philips makes is related to how many flashlights Rayovac sells.
This is an example of
A.
B.
C.
D.
E.
a tying arrangement.
reciprocity.
strategic alliance demand.
relationship marketing.
derived demand.
Derived demand refers to sales of business and industrial products (flashlight light
bulbs) frequently resulting from the sale of consumer products (flashlights). In this
case, Rayovac buys large quantities of bulbs from Philips, but only enough to
match the number of flashlights they sell to U.S. consumers.

Blooms: Apply
classified.
89.
The two main classifications of business products are
(p. 216
)
A.
B.
C.
D.
E.
durable and nondurable products.

components and support products.
tangible and intangible products.
consumer and industrial products.
derived and maintenance products.
Business products may be classified as components or support products.

Components are items that become part of the final product whereas support
products are items used to assist in producing other products and services.

Blooms: Understand
classified.
9-143
90.
__________ are items that become part of the final business product.
(p. 216
)
A.
B.
C.
D.
E.
Components
Accessories
Support products
Production goods
Raw assemblies
Text term definition - components.

Blooms: Remember
classified.
Topic: Components products
91.
(p. 216
)
Raw materials, such as grain or lumber as well as assemblies or parts, are referred
to as
A.
B.
C.
D.
E.
production goods.
components.
accessories.
support products.
raw assemblies.
Components are items that become part of the final product. These include raw
materials such as lumber, as well as assemblies such as a Ford car engine.

Blooms: Understand
classified.
Topic: Components products
9-144
92.
(p. 216
)
Installations, accessory equipment, supplies, and industrial services used to assist

in producing other products and services are referred to as __________.
A.
B.
C.
D.
E.
components
parts
production goods
raw materials
support products
Text term definition - support products.

Blooms: Remember
classified.
Topic: Support products
93.
(p. 216
)
Products such as tools and repair services that are used to assist in producing
other products and services are referred to as __________.
A.
B.
C.
D.
E.
components
support products
derived products
materials
Text term definition - support products.

Blooms: Remember
classified.
9-145
94.
(p. 216
)
The type of business products known as support products includes installations,

accessory equipment, supplies, and __________.
A.
B.
C.
D.
E.
industrial services
components
materials
derived products
Business products used to assist in producing other products and services are
support products. These include: (1) installations, such as buildings and fixed
equipment; (2) accessory equipment, such as tools and office equipment; (3)
supplies, such as stationery, paper clips, and brooms; and (4) industrial services,
such as maintenance, repair, and legal services.

Blooms: Understand
classified.
95.
(p. 216
)

industrial services, supplies, and __________.
A.
B.
C.
D.
E.
accessory equipment
components
derived products
materials

Blooms: Understand
classified.
9-146
96.
(p. 216
)

industrial services, accessory equipment, and __________.
A.
B.
C.
D.
E.
components
supplies
materials
derived products

Blooms: Understand
classified.
97.
(p. 216
)

supplies, accessory equipment, and __________.
A.
B.
C.
D.
E.
materials
industrial services
derived products
components

Blooms: Understand
classified.
9-147
98.
Among business products, support products include installations such as
(p. 216
)
A.
B.
C.
D.
E.
convenience products.
Text term definition - installations.

Blooms: Remember
classified.
99.
Installations are support products that include items such as
(p. 216
)
A.
B.
C.
D.
E.
copy paper, mechanical pencils, and light bulbs.

welding masks and computers.
warehouses and automated assembly lines.
lumber and engine parts.
janitorial and legal services.
Support products are items used to assist in producing other products and
services. These include installations, such as buildings, like warehouses and fixed
equipment, such as automated assembly lines.

Blooms: Apply
classified.
9-148
100. Among business products, which of the following would most likely be considered
(p. 216 an installation?
)
A.
B.
C.
D.
E.
a factory
roof tiles
a cleaning service
a photocopier
a drill press
Items used to assist in producing other products and services are support
products. These include installations, such as buildings like a factory.

Blooms: Apply
classified.
101. An extremely large machine for producing sheet metal from steel ingots would be
(p. 216 classified as which kind of business products?
)
A.
B.
C.
D.
E.
installations
finished goods
supplies
industrial services
raw materials
Installations are expensive items such as buildings and fixed equipment, such as
the large sheet metal-making machine.

Blooms: Apply
classified.
9-149
102. Accessory equipment are support products that include items such as
(p. 216
)
A.
B.
C.
D.
E.

Text term definition - accessory equipment.

Blooms: Remember
classified.
103. Among business products, support products that include tools and office
(p. 216 equipment are referred to as
)
A.
B.
C.
D.
E.
installations.
supplies.
raw materials.
accessory equipment.
components.
Text term definition - accessory equipment.

Blooms: Remember
classified.
9-150
(p. 216 accessory equipment?
)
A.
B.
C.
D.
E.
copper wiring
a factory
a cleaning service
pneumatic nail gun
support products. These include accessory equipment, such as tools like a
pneumatic nail gun.

Blooms: Apply
classified.
105. Among business products, drafting tables would be best considered which type of
(p. 216 support products?
)
A.
B.
C.
D.
E.
installations
accessory equipment
supplies
industrial services
raw materials
Accessory equipment includes tools and office equipment like drafting tables.

Blooms: Apply
classified.
9-151
106. Supplies are support products that include items such as

(p. 216
)
A.
B.
C.
D.
E.

Text term definition - supplies.

Blooms: Remember
classified.
107. Among business products, supplies usually consist of

(p. 216
)
A.
B. items used in the manufacturing process and become part of the final product.
C.
D.
items such as pens, batteries, and light bulbs.
E.
Supplies are similar to convenience products and consist of products like

Blooms: Apply
classified.
9-152
108. Among business products, printer paper would be classified as which type of
(p. 216 support product?
)
A.
B.
C.
D.
E.
installations
accessory equipment
supplies
industrial services
raw materials
Supplies are similar to convenience products and consist of products like


Blooms: Apply
classified.
(p. 216 supplies?
)
A.
B.
C.
D.
E.
photocopier
sheet rock
cleaning service
concert hall chairs
support products. These include supplies, such as ink-jet printer cartridges.

Blooms: Apply
classified.
9-153
(p. 216 supplies?
)
A.
B.
C.
D.
E.
laser printer
phosphoric acid
cleaning service
magnetic resonance imaging (MRI) scanner
trash bags
support products. These include supplies, such as trash bags.

Blooms: Apply
classified.
111. Industrial services are support products that include items such as
(p. 216
)
A.
B.
C.
D.
E.

Text term definition - industrial services.

Blooms: Remember
classified.
9-154
(p. 216 an industrial service?
)
A.
B.
C.
D.
E.
tractor
phosphoric acid
photocopier maintenance
athletic training facility
syringes
support products. These include industrial services, such as those offered as part
of a photocopier maintenance contract.

Blooms: Understand
classified.
113. When a small retail chain hires an accountant to do its income taxes, the retail
(p. 216 chain would have purchased a(n) __________.
)
A.
B.
C.
D.
E.
ancillary service
industrial service
specialty service
accessory service
contractual service
support products. These include industrial services, such as accounting services.

Blooms: Apply
classified.
9-155
114. Among business products, legal counsel for patent information for a firm's R&D
(p. 216 department would most likely be classified as which type of support product?
)
A.
B.
C.
D.
E.
ancillary services
contractual services
specialty services
accessory services
industrial services
Items used to assist in producing other goods and services are support products.
These include industrial services, such as legal services.

Blooms: Apply
classified.
115. A retail chain hires a company to design and install a computer network that would
(p. 216 allow each store in the chain to check the inventory of others in the chain for
)
customer-requested items. The retail chain purchased which kind of business
products?
A.
B.
C.
D.
E.
accessory equipment
industrial services
supply materials
component parts
installations
Industrial services are intangible activities to assist the industrial buyer such as
designing and installing a computer network.

Blooms: Apply
classified.
9-156
116. Services can be classified by

(p. 216
)
A.
B.
C.
D.
E.
their method of delivery.

their use of idle capacity time.
the nature of their ownership.
their location on perceptual maps.
organizational reach.
Services can be classified according to whether (1) they are delivered by people or
equipment, (2) they are profit or nonprofit, or (3) they are government sponsored.

Blooms: Understand
classified.
Topic: Classifying services
117. Services can be classified according to whether they are __________, for-profit or
(p. 216 nonprofit organizations, or government agencies.
)
A.
B.
C.
D.
E.
national or global
delivered by people or equipment
Services can be classified according to whether they are (1) delivered by people or
equipment, (2) profit or nonprofit, or (3) government agencies.

Blooms: Understand
classified.
9-157
118. Services can be classified according to whether they are delivered by people or
(p. 216 equipment, __________, or government agencies.
)
A.
B.
C.
D.
E.
national or global
for profit or nonprofit organizations

Blooms: Understand
classified.
119. Services can be classified according to whether they are delivered by people or
(p. 216 equipment, whether they are for profit or nonprofit organizations, and whether
)
they are __________.
A.
B.
C.
D.
E.
government agencies
a national organization or a global organization
performed by independent contractors

Blooms: Understand
classified.
9-158
Figure 9-3
120. Consider Figure 9-3 above. Services can be classified by their method of delivery.
(p. 216 Box A represents
)
A.
B.
C.
D.
E.
government-delivered services.
people-delivered services.
fee-delivered services.
equipment-delivered services.
nonprofit-delivered services.
Services can be classified according to whether they are delivered by: (1) people
or equipment; (2) for-profit or nonprofit organizations; or (3) government agencies.
Figure 9-3 shows one classification: whether services are delivered by people (B) or
equipment (A).

Blooms: Understand
classified.
9-159
121. Consider Figure 9-3 above. Services can be classified by their method of delivery.
(p. 216 Box B represents
)
A.
B.
C.
D.
E.
equipment-based services.
technology-based services.
fee-based services.
people-based services.
nonprofit services.
Services can be classified according to whether they are delivered by: (1) people
or equipment; (2) for-profit or nonprofit organizations; or (3) government agencies.
Figure 9-3 shows one classification: whether services are delivered by people (B) or
equipment (A).

Blooms: Understand
classified.
122. The categories for people-based services include __________.

(p. 216
)
A.
B.
C.
D.
E.
volunteers, skilled operators, and professionals

unskilled labor, skilled labor, and professionals
unskilled operators, unskilled labor, and skilled labor
automated, skilled operators, and unskilled labor
automated, skilled operators, and professionals
Figure 9-3 shows that the three categories for people-based services include
unskilled labor, skilled labor, and professionals.

Blooms: Understand
classified.
9-160
123. Which of the following is the best example of a people-based service?

(p. 216
)
A.
B.
C.
D.
E.
movie theaters
airlines
accounting
vending machines
taxis
Figure 9-3 shows that of those services listed, only accountants are a people-based
service.

Blooms: Understand
classified.
124. What do a security guard, a plumber, and a management consultant have in

(p. 216 common?
)
A.
B.
C.
D.
E.

They do not have problems with idle production capacity.
The security guard is unskilled labor, the plumber is skilled labor, and the
management consultant is professional labor; all are people-based services. See
Figure 9-3.

Blooms: Apply
classified.
9-161
125. The categories for equipment-based services include __________.

(p. 216
)
A.
hand tools, simple machines, complex machines
B. unskilled operators, skilled operators, and professional operators
C. simple machines, technical equipment, and safety equipment
D. those powered by unskilled labor, those operated by skilled operators, and
those operated by professionals
E. automated, those operated by unskilled operators, and those operated by
skilled operators
Figure 9-3 shows that the three categories for equipment-based services include
automated (self-service), those operated by relatively unskilled operators, and
those operated by skilled operators.

Blooms: Understand
classified.
126. Compared with people-based services, equipment-based services do not have the
(p. 216 marketing concern of
)
A.
B.
C.
D.
E.
intangibility.
insensitivity.
inventory.
inconsistency.
immeasurability.
Equipment-based services do not have the marketing concern of inconsistency

because people are removed from the provision of the service.

Blooms: Understand
classified.
9-162
127. Equipment-based services do not have the marketing concern of inconsistency

(p. 216 because __________ have been removed from the delivery of the service.
)
A.
B.
C.
D.
E.
risk and product liability

people
learning requirements
automations
accessories


Blooms: Understand
classified.
128. Equipment-based services like ATMs, online brokerage firms, and automated car
(p. 216 washes, do not have the marketing concern of
)
A.
B.
C.
D.
E.
inconsistency.
intangibility.
inseparability.
inventory.
independence.


Blooms: Understand
classified.
9-163
129. Which of the following is the best example of an equipment-based service?

(p. 216
)
A.
B.
C.
D.
E.
lawn care
doctors
taxis
lawyers
janitorial services
Figure 9-3 shows that of those services listed here, only taxis are equipment-based
services. All of the other alternatives are people-based services.

Blooms: Apply
classified.
130. What do a dry cleaning service, an automated carwash, and a taxi service have in
(p. 216 common?
)
A.
B.
C.
D.
E.

None of them has problems with idle production capacity.
Of these equipment-based services, the dry cleaning service requires a dry

cleaning store and cleaning equipment, the carwash requires automated
equipment, and the taxi service needs vehicles, garages, and maintenance
equipment. See Figure 9-3.

Blooms: Apply
classified.
9-164
131. What do an online travel agency, a limousine service, and a railroad have in
(p. 216 common?
)
A.
B.
C.
D.
E.
They are all strictly tangible services.

None of them has a problem with idle production capacity.
They all require skilled operators.
The online travel agency, limousine service, and railroad all require a significant
amount of equipment to deliver the service. See Figure 9-3.

Blooms: Apply
classified.
132. Recently, many nonprofit organizations such as The American Red Cross
(p. 217
)
A. were eager to use marketing practices but were not permitted to do so since
they were 501C3 organizations as classified by the IRS.
B. worried that marketing would limit their profitability as nonprofit organizations.
C.
could not afford marketing activities.
D. have increased their use of marketing practices to improve communication with
constituents.
E.
thought that marketing activities would harm demand.
In recent years, nonprofit organizations such as the American Red Cross have
begun to use marketing practices to help achieve their goals.

Blooms: Understand
classified.
9-165
133. The American Red Cross uses marketing to help achieve its goals. As a service, it
(p. 217 can be classified as
)
A.
B.
C.
D.
E.
a nonprofit organization.
equipment-based.
a for-profit organization.
a business firm.
a governmental agency.

Blooms: Understand
classified.
134. Sterile Feral, Inc. is a nonprofit organization that catches wild or stray cats. It then
(p. 217 neuters, vaccinates, and releases them back into the wild. In recent years,
)
nonprofit organizations such as Sterile Feral have turned to marketing to help it
A.
receive additional government funding.
B.
expand its business to stray dogs.
C.
maintain its nonprofit status.
D. to achieve its goals of better serving the communities in which it operates.
E.
compete with other similar organizations.

Blooms: Apply
classified.
9-166
135. What type of organization is the U.S. Forest Service, which manages our national
(p. 217 park system?
)
A.
B.
C.
D.
E.
It is a privately owned firm.

It is a government agency service provider.
It is a good-dominate organization on the service continuum.
It is manufacturer's agency.
It is a regional non-profit.
The U.S. Forest Service is a government agency service provider.

Blooms: Apply
classified.
136. What do the United States Post Service, the Connecticut Department of Social
(p. 217 Services, and the Phoenix Fire Department have in common?
)
A.
B.
C.
D.
E.
They are all privately owned companies.

None fit on the service continuum.
They never experience idle production capacity.
Capacity management is not an issue for these organizations.
They are all government agency service providers.
All are government agency service providers.

Blooms: Apply
classified.
9-167
137. There are four unique elements to services - intangibility, inconsistency,

(p. 217 inseparability, and inventory - which are referred to as the __________.
)
A.
B.
C.
D.
E.
service mix
four I's of services
service matrix
4Ps of services
service continuum
Key term definition - four I's of services.

Blooms: Remember
Learning Objective: 09-03 Describe four unique elements of service.
Topic: Four is of services
138. The four I's of services consist of

(p. 217
)
A.
B.
C.
D.
E.
intangibility, inconsistency, inseparability, and innovation.

intangibility, inventory, inflexibility, and impression.
intangibility, inconsistency, inseparability, and inventory.
intangibility, inventory, innovation, and impression.
intangibility, inconsistency, innovation, and impression.
Key term definition - four I's of services.

Blooms: Remember
9-168
139. The intangibility element of a service refers to the fact that it

(p. 217
)
A. has value that can only be determined by using subjective criteria.

B. can't be held, seen, or touched before the purchase decision.
C. requires the ability to provide the service even in times of no demand.
D. can maintain or accumulate good will with customers.
E.
can be objectively evaluated.
Services are intangible; that is, they can't be held, touched, or seen before the
purchase decision.

Blooms: Understand
140. Because services tend to be a(n) __________ rather than an object, they are much
(p. 217 more difficult for consumers to evaluate.
)
A.
B.
C.
D.
E.
opportunity
good
risk
decision
performance
Services are intangible; that is, they can't be held, touched, or seen before their
purchase. Because services tend to be a performance rather than an object, they
are much more difficult for consumers to evaluate.

Blooms: Understand
9-169
141. Consumers have more difficulty evaluating services than they do products; the
(p. 217 difficulty results from the
)
A.
B.
C.
D.
E.
intangibility of services.
incongruity of services.
inseparability of services.
inflexibility of services.
interdependence of services.
purchase. Because services tend to be a performance rather than an object, they
are much more difficult for consumers to evaluate.

Blooms: Understand
142. To help consumers assess and compare services, marketers try to make them
(p. 217 __________ or show the benefits of using the service.
)
A.
B.
C.
D.
E.
intangible
consistent
tangible
timely
measurable
purchase. To help consumers assess and compare services, marketers try to make
them tangible or show the benefits of using the service.

Blooms: Understand
9-170
143. To help consumers assess and compare services, marketers try to make them
(p. 217 tangible or __________.
)
A.
B.
C.
D.
E.
temporal
consistent
adaptable
measurable
show the benefits of using the service
them tangible or show the benefits of using the service.

Blooms: Understand
144. Singapore Airlines has advertising that shows a traveler in the airline's new seats
(p. 217 and emphasizes food and other amenities to overcome the __________ of its
)
service.
A.
B.
C.
D.
E.
incongruity
inconsistency
inventory costs
inseparability
intangibility
purchase. To help consumers assess and compare services, marketers like
Singapore Airlines try to make them tangible or show the benefits of using the
service.

Blooms: Apply
9-171
145. Sarah has a backache due to overexertion. She believes a massage would loosen
(p. 217 her back muscles and help her feel better. She is concerned because a massage,
)
unlike a pair of shoes, cannot be experienced or seen before she buys it. Which
characteristic of services is she concerned about?
A.
B.
C.
D.
E.
incongruity
inconsistency
intangibility
inventory costs
inseparability
Services are intangible; that is, they cannot be held, touched, or seen before their
purchase. Sarah cannot judge a massage before purchase because of the service's
intangibility.

Blooms: Apply
146. Before moving out of their apartment, Kelly and Doug decided to have their
(p. 217 carpets cleaned by Stanley Steemer, a company specializing in professional carpet
)
cleaning. The carpet cleaners arrived on time, cleaned the carpets, and drove
away in their bright yellow van; only then did the couple see that they did a good
job. Kelly and Doug were unable to judge the service before they bought it, which
illustrates the __________ of services.
A.
B.
C.
D.
E.
inconsistency
inseparability
inventory costs
intangibility
interdependence
purchase. A carpet cleaning service must be purchased before consumers can
evaluate it.

Blooms: Apply
9-172
147. To help consumers assess and compare its airline service, Frontier Airlines uses
(p. 217 personable animal characters in its advertising to announce and describe benefits,
)
such as leather seats and stretch seating, to help deal with the
A.
B.
C.
D.
E.
incongruity of the service.

inseparability of the service.
intangibility of the service.
inflexibility of the service.
interdependence of the service.
them tangible or show the benefits of using the service. Frontier Airlines sells
perishable and intangible transportation from one point to another and tries to
make the service more tangible by describing tangible benefits with the
personable animals shown in their advertising campaigns.

Blooms: Apply
148. The brochure for Spa Sydell has photographs of people enjoying the various spa
(p. 217 amenities. By seeing the pictures of available treatments at the spa, a customer
)
has a better idea of what she is buying. Spa Sydell uses a brochure to help
customers deal with the __________ that is associated with using the service.
A.
B.
C.
D.
E.
incongruity
inconsistency
inventory costs
inseparability
intangibility
purchase. The pictures allow customers to feel less uncertain about their service
purchase.

Blooms: Apply
9-173
149. Because services depend on the people who provide them, the quality of a service
(p. 217 is often
)
A.
B.
C.
D.
E.
independent of managerial policies.

inconsistent.
inventoried.
tied to a product.
Developing, pricing, promoting, and delivering services is challenging because the

quality of a service is often inconsistent. Because services depend on the people
who provide them, their quality varies with each person's capabilities and day-today job performance.

Blooms: Understand
150. Services depend on the people who provide them. As a result, their quality varies
(p. 217 with each person's capabilities and day-to-day job performance. This element of
)
services is referred to as __________.
A.
B.
C.
D.
E.
incongruity
differentiation
variation
inconsistency
intangibility
Developing, pricing, promoting, and delivering services is challenging because the

quality of a service is often inconsistent. Because services depend on the people
who provide them, their quality varies with each person's capabilities and day-today job performance.

Blooms: Understand
9-174
151. Inconsistency of services refers to the fact that

(p. 217
)
A. there is no regulation of service industries in terms of basic standards of

quality.
B. the quality of service provided by a firm is often inconsistent with its image.
C. the performance of one employee may vary from the performance of another
employee even though the same firm employs both.
D. training and standardization of service delivery procedures cannot be
accomplished.
E.
services have a varying degree of durability.
Because services depend on the people who provide them, their quality varies with
each person's capabilities and day-to-day job performance.

Blooms: Understand
152. Developing, pricing, promoting, and delivering services are challenging because
(p. 217 the quality of the service is often inconsistent. Organizations attempt to reduce
)
this inconsistency by
A. paying higher incentives to employees to encourage satisfactory performance.

B. reducing incentives available to employees because of poor performance.
C. reducing the customer contact points in the service delivery process.
D.
providing standardization and training.
E.
exercising better hiring practices.
Organizations attempt to reduce inconsistency through standardization and
training.

Blooms: Understand
9-175
153. The Philadelphia Phillies baseball team may have great hitting and pitching one
(p. 217 day, and lose by 10 runs on the next. This is an example of a service being
)
A.
B.
C.
D.
E.
inseparable.
inconsistent.
inventoried.
tied to a product.
Services depend on the people who provide them. As a result, their quality varies
with each person's capabilities and day-to-day job performance. Inconsistency is
more of a problem in services than it is with tangible goods. For example, the
Philadelphia Phillies baseball team may have great hitting and pitching one day
and the next day lose by 10 runs.

Blooms: Understand
154. A local band performed on campus during a pre-graduation party. The students
(p. 217 enjoyed the performance, and some of them were interested enough to buy tickets
)
to see another show at a club downtown. But when they went to that concert, the
quality of the performance was much poorer than they had heard and seen on
campus. The students' disappointment was the direct result of which characteristic
of services?
A.
B.
C.
D.
E.
inconsistency
impressionability
intangibility
invisibility
each person's capabilities and day-to-day job performance. The band for whatever
reason did not perform as well at the downtown venue as it had on campus.

Blooms: Apply
9-176
155. Andrea Arenas is the owner of 2 Places at 1 Time, a concierge company. She and
(p. 217 her staff of 60 perform everyday services, such as walking the dog, picking up
)
cleaning, waiting for the repairman, and going to the post office, for people who
are too busy to perform these simple acts. One way she tries to avoid ___________
of services for her regular customers is to make sure that the same well-trained
person is always assigned to work for her clients.
A.
B.
C.
D.
E.
inseparability
inconsistency
incongruity
inflexibility
intangibility
each person's capabilities and day-to-day job performance. Organizations like
Andrea's attempt to reduce inconsistency through standardization and training.

Blooms: Apply
156. Alana operates a wedding preparation service that aids brides-to-be in the
(p. 217 planning of their weddings. To maintain a quality image and a standardized
)
offering, Alana provides extensive training for each of her employees. What unique
aspect of services is Alana trying to address?
A.
B.
C.
D.
E.
impressionability
intangibility
inconsistency
inseparability
each person's capabilities and day-to-day job performance. Organizations like
Alana's attempt to reduce inconsistency through standardization and training.

Blooms: Apply
9-177
157. Jason graduated from law school and took his mom to dinner after the ceremony.
(p. 217 At the restaurant, the server filled their water glasses, checked on their table, and
)
took care of their requests. Jason noted that the last time he was at this same
restaurant, the experience was much worse. This scenario illustrates the
___________ of services.
A.
B.
C.
D.
E.
impressionability
intangibility
inseparability
inconsistency
each person's capabilities and day-to-day job performance. This often results in
inconsistency like the varied service Jason experienced.

Blooms: Apply
158. Inseparability in services means consumers

(p. 217
)
A. see little variation from one service provider in an industry to another.

B. cannot separate the service itself from the deliverer of the service.
C.
are unable to differentiate price from quality.
D. cannot evaluate a service until it is being or has been used.
E. cannot separate themselves from the deliverer of the service.
A difference between services and products related to problems of consistency is
inseparability. In most cases, the consumer cannot and does not separate the
service from the deliverer of the service or the setting within which the service
occurs.

Blooms: Understand
9-178
159. If you find that the staff who work in your college's career center give you poor
(p. 217 advise or otherwise did not provide sufficient help in finding you employment after
)
graduation, you may be dissatisfied with your entire college experience. This is an
example of which issue associated with services?
A.
B.
C.
D.
E.
inseparability
intangibility
impressionability
incongruity
inflexibility
The inseparability of services means consumers cannot separate the service from
the deliverer of the service, so poor staff in one area can taint your impression of
the whole college.

Blooms: Apply
160. When Mandy last got her drive-thru order at the fast-food restaurant, she thought
(p. 217 the employee who helped her was cold and unfriendly. The food tasted good but
)
was overshadowed by the employee's demeanor. Since then, Mandy often says
something derogatory to her friends about the restaurant based on this single
experience. This is an example of which issue associated with services?
A.
B.
C.
D.
E.
inseparability
intangibility
impressionability
incongruity
inflexibility
The inseparability of services means consumers cannot separate the service from
the deliverer of the service, and so the rude service has soured Mandy on this
restaurant.

Blooms: Apply
9-179
161. Inventory of services differs from that of products in what way?

(p. 217
)
A. Time is less important to customers of services than customers of products.

B. Only service inventory can be reduced through more efficient movement of
products.
C. There are larger costs associated with the handling of service inventory.
D. Unlike goods providers, the service provider is often unavailable when there is a
E. Service inventory costs are related to idle production capacity rather than
storage or handling.
Inventory problems exist with goods because many items are perishable and
because there are costs associated with handling inventory. With services,
inventory carrying costs are more subjective and are related to idle production
capacity, which is when the service provider is available but there is no demand
for the service. The inventory cost of a service is the cost of paying the person
used to provide the service along with any needed equipment.

Blooms: Understand
162. A situation that occurs when a service provider is available but there is no demand
(p. 217 is referred to as
)
A.
B.
C.
D.
E.
off-peak pricing.
idle production capacity.
static demand.
capacity management.
excess inventory.
Key term definition - idle production capacity.

Blooms: Remember
Topic: Idle production capacity
9-180
163. Idle production capacity refers to

(p. 217
)
A. the minimum number of customers that a service provider can serve and still
remain profitable.
B. the maximum number of customers that a service provider must serve in order
to remain profitable.
C. the ability of a service provider to redirect its efforts so even when there is no
primary demand, employees are still able to meet selective demand.
D. a situation that occurs when a service provider is available but there is no
E. a situation that occurs when the primary demand for a service exceeds that
number of service deliverers available to meet that demand.

Blooms: Remember
164. What does idle production capacity refer to?

(p. 217
)
A. a situation where the demand for exceeds the availability of service providers
and as a result, no services can be offered
B. when the supply of service providers exceeds the primary demand for the
service
C. a situation where a service provider is available but there is no demand for the
service
D. integrating the service component of the marketing mix with efforts to
influence consumer demand
E. the potential profits of one service provider serving multiple clients at the same
time

Blooms: Remember
9-181
165. The emergency room staff in Houston's largest hospital is pleasantly surprised
(p. 217 when a four-day Fourth of July weekend brings in few accident victims for
)
treatment. They know from experience that such public holidays usually have high
rates of accidents. For the hospital's business office, the lower demand for the
emergency room services means
A.
B.
C.
D.
E.
a break in the service continuum.

its services are no longer tangible.
its services can be separated from the staff.
the hospital has idle production capacity.
an opportunity for gap analysis.
The inventory cost of service is the cost of paying the people used to provide the
service along with any needed equipment. With services, inventory-carrying costs
are related to idle production capacity, which is when the service provider is
available but there is no demand for the service.

Blooms: Apply
166. Andrea Arenas is the owner of 2 Places at 1 Time, a concierge company. She and
(p. 217 her staff of 60 perform everyday services such as walking the dog, picking up
)
cleaning, waiting for the repairman, and going to the post office for people who are
too busy to perform these simple acts. She has often been hired by major
corporations to perform services for their harried executives, and even other
employees. Her staff is overworked and she will soon hire more employees to fill
demand. Arenas is not currently experiencing __________; in fact, all of her
employees and equipment are fully being used.
A.
B.
C.
D.
E.
off-peak pricing
static demand
capacity marketing
capacity inventory
With services, idle production capacity is when the service provider is available but
there is no demand for the service.

Blooms: Apply
9-182
167. Southwest Airlines operates five flights daily between Chicago and Phoenix during
(p. 217 the winter. One flight leaves Phoenix at 12:10 p.m. The plane, a Boeing 737, has a
)
capacity of 120 passengers. During the past month, the flight has averaged 24
passengers, a load factor of only 20 percent. Once the plane takes off, the empty
seats generate no revenue for the airline for that flight. What unique aspect of
services does this situation describe?
A.
B.
C.
D.
E.
incongruity
intangibility
inconsistency
inseparability
With services, inventory carrying costs are related to idle production capacity,
which is when the service is available but there is no demand (the empty seats in
this example).

Blooms: Apply
168. The type of analysis that compares the differences between consumers'
(p. 218 expectations about a service and their experience with it based on dimensions of
)
service quality is referred to as
A.
B.
C.
D.
E.
customer relationship management.

service encounter differential.
gap analysis.
a customer contact audit.
a service audit.
Key term definition - gap analysis.

Blooms: Remember
Topic: Gap analysis
9-183
169. In using a gap analysis, the two basic components of a customer's evaluation of a
(p. 218 service are
)
A.
B.
C.
D.
E.
expectations and customer contact.

expectations and experience.
intangibility and inconsistency.
experience and credence.
inconsistency and inseparability.
Consumers evaluate a service by comparing their expectations to the actual

experience through gap analysis.

Blooms: Remember
Topic: Gap analysis
170. How a person establishes expectations for a service not yet experienced is
(p. 218 influenced by __________, personal needs, past experiences, and promotional
)
activities.
A.
B.
C.
D.
E.
the economy
consumer income
word-of-mouth communications
competitive trends
Expectations are influenced by word-of-mouth communications, personal needs,

past experiences, and promotional activities, while actual experiences are
determined by the way an organization actually delivers its service.

Blooms: Understand
Topic: Gap analysis
9-184
(p. 218 influenced by word-of-mouth communications, __________, past experiences, and
)
A.
B.
C.
D.
E.
personal needs
the economy
consumer income
competitive trends


Blooms: Understand
Topic: Gap analysis
(p. 218 influenced by word-of-mouth communications, personal needs, __________, and
)
A.
B.
C.
D.
E.

past experiences
competitive trends
the economy
consumer income


Blooms: Understand
Topic: Gap analysis
9-185
(p. 218 influenced by word-of-mouth communications, personal needs, past experiences,
)
and __________.
A.
B.
C.
D.
E.
the economy
consumer income
competitive trends
promotional activities


Blooms: Understand
Topic: Gap analysis
174. In a gap analysis, a person can establish expectations for a service he or she has
(p. 218 not yet experienced through word-of-mouth communications, personal needs, past
)
experiences, and promotional activities. However, the actual experiences are
determined by
A.
the way the organization delivers its service.
B. the positive reinforcement from friends, family, and peers, after the service was
provided.
C.
repeat encounters with the same service provider.
D.
psychological feelings of well-being.
E.
a formal post-purchase evaluation or questionnaire.

Blooms: Understand
Topic: Gap analysis
9-186
175. Many restaurants now ask consumers to evaluate their experience on a short
(p. 218 questionnaire when they pay their bill. This assessment of consumer expectations
)
compared to the actual experience they had is a form of __________.
A.
B.
C.
D.
E.
service encounter survey

customer profile analysis
gap analysis
customer contact audit
service audit
One of the primary methods used to evaluate the quality of a service is gap
analysis, when customers are asked to compare the delivered quality of the
service to their expectations for service quality. Differences, or gaps, between
expectations and actual experience are identified, and corrective actions can be
taken.

Blooms: Apply
Topic: Gap analysis
176. Which of the following are key dimensions of service quality that might be used to
(p. 218 perform a gap analysis for airline travel?
)
A.
B.
C.
D.
E.
gap analysis, intangibility, and reliability

respect, diligence, and honesty
honesty, intangibility, and diligence
alacrity, fairness, and product knowledge
reliability, tangibility, and responsiveness
For airline customers, here are three dimensions of service quality and the kinds of
questions airline customers might ask to evaluate them: Reliability - Is my flight on
time? Tangibility - Are the gate, the plane, and the baggage area clean?
Responsiveness - Are the flight attendants willing to answer my questions?

Blooms: Understand
Topic: Gap analysis
9-187
177. The term product class refers to

(p. 219
)
A. the NAICS designation of an individual product or brand.

B. the designation of an individual product based upon its form.
C.
a variation of a product within a product mix.
D. the designation of a product based on whether it is a consumer product or
business product.
E. the entire product category or industry a set of offerings belong to.
Text term definition - product class.

Blooms: Remember
Topic: Product class
178. Variations of a product (shape, configuration) within a product class are referred to
(p. 219 as the
)
A.
B.
C.
D.
E.
product form.
product item.
product line.
product class.
product mix.
Text term definition - product form.

Blooms: Remember
Topic: Product form
9-188
179. A product item refers to

(p. 219
)
A.
B.
C.
D.
E.

a group of SKUs that are closely related.
a specific product that has a unique brand, size, or price.
the services offered by an organization.
Key term definition - product item.

Blooms: Remember
Topic: Product item
180. The Vermont Teddy Bear Company sells handmade Teddy bears designed to be
(p. 219 given as gifts for almost every occasion imaginable. The Love Bandit Bear is one
)
bear it designed for people to give to each other on Valentine's Day. The Love
Bandit Bear is an example of a
A.
B.
C.
D.
E.
product item.
product mix.
product class.
product form.
product line.
A product item is a specific product as noted by a unique brand, size, or price - the
Love Bandit Bear is a unique brand within the Vermont Teddy Bear Company's
product line.

Blooms: Apply
Topic: Product item
9-189
181. A __________ is the unique identification number that defines an item for ordering
(p. 219 or inventory purposes.
)
A.
B.
C.
D.
E.
unique stock mark

QR code
stock keeping unit
order quantity code
NAICS stock code
Text term definition - stock keeping unit.

Blooms: Remember
Topic: Stock keeping unit
(p. 219 given as gifts for almost every occasion imaginable. The Love Bandit Bear is
)
designed for people to give to each other on Valentine's Day. The unique
identification number that the Vermont Teddy Bear Company uses to distinguish
this Teddy bear from the others in order to track it in the warehouse is called a(n)
A.
B.
C.
D.
E.
stock ID code.
QR code.
NAICS stock code.
order quantity code.
stock keeping unit.
The stock keeping unit is unique identification number that defines an item for
ordering or inventory purposes.

Blooms: Apply
Topic: Stock keeping unit
9-190
183. A group of product or service items that are closely related because they satisfy a
(p. 219 class of needs, are used together, are sold to the same customer group, are
)
distributed through the same types of outlets, or fall within a given price range is
referred to as a __________.
A.
B.
C.
D.
E.
product class
product mix
product category
marketing category
product line
Key term definition - product line.

Blooms: Remember
Topic: Product line
184. A __________ is a group of product or service items that are closely related because
(p. 219 they satisfy a class of needs, are used together, are sold to the same customer
)
range.
A.
B.
C.
D.
E.
product item
product line
product mix
product class
product form

Blooms: Remember
Topic: Product line
9-191
185. A product line refers to

(p. 219
)
A. a product and all its ancillary services (warranties, financing, etc.).

B.
D. a group of product or service items that are closely related because they satisfy
a class of needs, are used together, are sold to the same customer group, are
distributed through the same types of outlets, or fall within a given price range.
E.

Blooms: Remember
Topic: Product line
186. A product line is a group of product or service items that are closely related
(p. 219 because they satisfy a class of needs, __________, are sold to the same customer
)
range.
A.
B.
C.
D.
E.

are used together
have one SKU number
A product line is a group of product or service items that are closely related
because they satisfy a class of needs, are used together, are sold to the same
customer group, are distributed through the same type of outlets, or fall within a
given price range.

Blooms: Understand
Topic: Product line
9-192
(p. 219 because they satisfy a class of needs, are used together, __________, are
)
distributed through the same type of outlets, or fall within a given price range.
A.
B.
C.
D.
E.

are sold to the same customer group
have one SKU number
given price range.

Blooms: Understand
Topic: Product line
(p. 219 because they satisfy a class of needs, are used together, are sold to the same
)
customer group, __________, or fall within a given price range.
A.
B.
C.
D.
E.

have one SKU number
are distributed through the same type of outlets
given price range.

Blooms: Understand
Topic: Product line
9-193
(p. 219 because they satisfy a class of needs, are used together, are sold to the same
)
customer group, and are distributed through the same type of outlets, or
__________.
A.
B.
C.
D.
E.

fall within a given price range
are identical except for price
given price range.

Blooms: Understand
Topic: Product line
190. Which of the following statements about product lines is most accurate?
(p. 219
)
A. An advantage of a narrow product line is the ability to have a greater gap

between price points.
B. Product lines refer to consumer products; product mixes refer to industrial
products.
C. An advantage of broad product lines is increased likelihood of access to large
retail chain distribution.
D. A benefit of having a narrow product line is that it enables both consumers and
retailers to simplify their buying decisions.
E.
A broad product line reduces R&D costs.
With a broader product line, firms are more likely to obtain distribution in
supermarket chains, which strive to increase efficiencies by dealing with fewer
suppliers.

Blooms: Understand
Topic: Product line
9-194
191. Which of the following is an example of a product line?

(p. 219
)
A.
Scope mouthwash
B.
Zephyrhills natural spring water in 8 oz. bottles
C.
The Yellow Pages for Gainesville, Florida
D. Hallmark Mother's, Father's Day, and Grandparent's Day cards
E.
Apple iPad
given price range, such as the Hallmark cards. The other alternatives are product
items.

Blooms: Apply
Topic: Product line
Crapola Granola Products Photo
9-195
192. The Crapola Granola products photo shown above best describes which of the
(p. 219 following?
)
A.
B.
C.
D.
E.
a product item
a product line
a product mix
a product category
a brand line
given price range. The Crapola Granola products fit this definition.

Blooms: Understand
Topic: Product line
(p. 219 given as gifts for almost every occasion imaginable. For the Vermont Teddy Bear
)
Company, Teddy bears are an example of a
A.
B.
C.
D.
E.
product class.
product mix.
SKU.
marketing category.
product line.
A product line is a group of products (Teddy bears) that are closely related because
they satisfy a class of needs - in this case, gift-giving for special occasions.

Blooms: Apply
Topic: Product line
9-196
194. During a recent shopping trip to Target, Carlie noticed that the store offered many
(p. 219 Glad products, including many different types of trash bags and a large variety of
)
food storage containers. For Glad, each of these two product groupings is an
example of a __________.
A.
B.
C.
D.
E.
product line
product item
product mix
product industry
product class
A product line is a group of product or service items that are closely related, that
satisfy a class of needs, are used together, are distributed through similar outlets,
or are purchased by the same customer group, like the Glad products. A product
mix is the number of product lines offered by a company. A product class refers to

Blooms: Apply
Topic: Product line
195. All of the different product lines offered by an organization are collectively referred
(p. 219 to as a
)
A.
B.
C.
D.
E.
product class.
product mix.
product SKUs.
marketing mix.
target mix.
Key term definition - product mix.

Blooms: Remember
Topic: Product mix
9-197
196. A product mix refers to

(p. 219
)
A. all of the different product lines offered by an organization.

B.
D. a group of products that are closely related because they satisfy a class of
needs, are used together, are sold to the same customer group, are distributed
through the same types of outlets, or fall within a given price range.
E.
Key term definition - product mix.

Blooms: Remember
Topic: Product mix
197. Procter & Gamble, however, has a large __________ that includes product groupings
(p. 219 such as beauty and grooming (Crest toothpaste and Gillette razors) and household
)
care (Downy fabric softener, Tide detergent), and Pampers diapers.
A.
B.
C.
D.
E.
marketing mix.
product class.
product items.
product lines.
product mix.
All of the different product lines offered by an organization are referred to

collectively as the product mix.

Blooms: Understand
Topic: Product mix
9-198
198. A company's product mix is equal to the sum of its

(p. 219
)
A.
B.
C.
D.
E.
marketing mix.
product class.
product items.
product lines.
SKUs.
All of the different product lines offered by an organization are referred to

collectively as the product mix.

Blooms: Understand
Topic: Product mix
199. Newman's Own is a company that gives all of its profits to charities. The company
(p. 219 produces popcorn, salsa, pasta sauces, and salad dressings under the Newman's
)
Own brand name. These product lines comprise the company's
A.
B.
C.
D.
E.
product mix.
stock keeping units.
product category.
product class.
marketing category.
A product mix is the number of product lines offered by an organization, in this

case all of the product groupings produced by Newman's Own.

Blooms: Apply
Topic: Product mix
9-199
200. The relationship between a product line and product mix is

(p. 219
)
A.
product mixes include product lines.
B.
product lines include product mixes.
C. product lines refer to consumer products; product mixes refer to business
products.
D. product mixes refer to consumer products; product lines refer to industrial
products.
E. there is no significant difference other than minor product variations of color,
size, or form.
customer group, are distributed through the same types of outlets, or fall within a
given price range. A product mix consists of all the product lines offered by the
organization.

Blooms: Understand
Topic: Product mix and product line
201. Feature bloat is

(p. 220
)
A. an exaggeration of a product's performance capabilities.

B. the overcharging in price for a minor product enhancement.
C. the requirement of having consumers learn new behaviors with a continuous
innovation.
D. an excessive number of product attributes that overwhelms consumers with
unnecessary complexity.
E. the increase in package size when adding more content or making it larger (the
mega phenomenon).
Feature bloat is the proliferation of extra features that overwhelms many
consumers with mind-boggling complexity.

Blooms: Remember
Topic: Marketing matters: Feature bloat
9-200
202. The proliferation of extra characteristics in a product that overwhelms many

(p. 220 consumers with mind-boggling complexity is referred to as
)
A.
B.
C.
D.
E.
feature overkill.
feature bloat.
sensory overload.
product differentiation.
Feature bloat is the proliferation of extra features that overwhelms many

consumers with mind-boggling complexity.

Blooms: Remember
203. According to Robert Stephens of the Geek Squad, the biggest complaint about
(p. 220 technical support people is
)
A.
B.
C.
D.
E.
their inability to communicate in laymen's terms.

that they are difficult to understand.
that they take too long to answer the telephone.
that they lack product knowledge.
that they are rude and egotistical.
The biggest complaint about tech support people is their rude, egotistical behavior.

Blooms: Understand
9-201
204. A product can be classified as new from all of the following perspectives EXCEPT:
(p. 220
)
A.
B.
C.
D.
E.
the organization's.
existing offerings.
legal.
the firm's competitors.
the consumer's.
A product can be classified as new from the perspectives of existing products, the
consumers, in legal terms, and the organization. Newness from an organization's
competitors' perspective is not a criterion for classifying an offering as new.

Blooms: Understand
Topic: Newness
205. A product can be classified as new if it __________ from existing products.

(p. 220
)
A.
B.
C.
D.
E.
is functionally different
is different in color
is different in its packaging
is different in price
requires a different distribution channel
If a product is functionally different from existing products, it can be classified as

new.

Blooms: Understand
Topic: Newness
9-202
206. An important way of viewing new products is in terms of their effects on

(p. 220 consumption, which from the perspective of consumers is by
)
A.
B.
C.
D.
E.
the price.
the extent of media promotion.
the degree of potential product cannibalization.
the presence of feature bloat.
the degree of learning involved.
A key way to define new products is in terms of their effects on consumption,

which from the consumer's perspective is by the degree of learning required. See
Figure 9-2.

Blooms: Understand
Topic: Newness
207. A product that is new in some way but requires no new behaviors to be learned by
(p. 221 consumers is a
)
A.
B.
C.
D.
E.
product transformation.
concurrent innovation.
Text term definition - continuous innovation.

Blooms: Remember
Topic: Continuous innovation
9-203
208. The emphasis of a marketing strategy for a continuous innovation concentrates on

(p. 221
)
A.
B.
C.
D.
E.
obtaining narrow distribution.

generating awareness.
using reminder advertising to reeducate consumers.
The emphasis of a marketing strategy for a continuous innovation would include

generating awareness of the product among consumers. See Figure 9-2.

Blooms: Understand
209. At the time of its introduction, which of the following products was the best
(p. 221 example of a continuous innovation?
)
A.
B.
C.
D.
E.
home security system

disposable lighter
microwave oven
electric toothbrush
video camera
Continuous innovations require no new learning by consumers, the situation with

disposable lighters which were used just like other lighters but could be thrown
away.

Blooms: Apply
9-204
210. Wrigley's new Alert Energy Caffeine Gum "offers a portable solution that lets adults
(p. 221 control their caffeine intake." This new gum is most likely which type of
)
innovation?
A.
B.
C.
D.
E.
A continuous innovation requires no new learning by consumers such as this new

caffeinated chewing gum.

Blooms: Apply
211. At the time of its introduction, which of the following products was the best
(p. 221 example of a continuous innovation?
)
A.
the first Apple iPhone
B.
Atari, the first video game system
C. Sunsilk Silky Straight shampoo and conditioner with tip-targeting technology
D. Dragon Naturally Speaking voice-recognition software
E. Naturalpoint Trakir, which replaces the computer mouse by tracking head
movements and then translating those head movements into cursor commands
Continuous innovations require no new learning by consumers. Only the shampoo
meets this criterion (no need to shampoo or condition one's hair differently).

Blooms: Apply
9-205
212. The addition of Clorox II bleach to Tide laundry detergents is an example of a

(p. 221
)
A.
B.
C.
D.
E.
bundled innovation.
Continuous innovations require no new learning by consumers, as is the case with

adding bleach to a laundry detergent.

Blooms: Apply
213. The first LCD (liquid crystal display) flat-panel HD (high definition) TV is an
(p. 221 example of which type of innovation?
)
A.
B.
C.
D.
E.
With continuous innovation, no new behaviors must be learned. Consumers require

no education about how to turn on and watch TV. Though new technology makes a
LCD flat-panel HDTV possible, from the consumer point of view the product is
improved but they don't need to learn new behaviors to use the product.

Blooms: Apply
9-206
214. A product that disrupts consumers' normal routines but does not require totally
(p. 221 new learning is a
)
A.
B.
C.
D.
E.
Text term definition - dynamically continuous innovation.

Blooms: Remember
Topic: Dynamically continuous innovation
215. The emphasis of a marketing strategy for a dynamically continuous innovation

(p. 221 would include
)
A.
B.
C.
D.
E.
advertising to generate awareness.

obtaining widespread distribution.
advertising to explain points of difference and benefits.
The emphasis of a marketing strategy for a dynamically continuous innovation

would include advertising that stresses points of difference, benefits, and proper
use of the product to consumers. See Figure 9-4.

Blooms: Understand
9-207
216. LG Electronics Inc. has entered into an agreement with Google to offer selected
(p. 221 smartphone models that use a multitouch interface rather than buttons to make
)
calls with Google's Android operating system. When the multitouch interface was
first introduced, it was an example of which type of innovation?
A.
B.
C.
D.
E.
Dynamically continuous innovations require only minor changes in behavior. For

LG's smartphones with Google's Android operating system, users use a multitouch
interface instead of buttons to make calls, surf the Internet, etc. - a minor change
in learned behavior.

Blooms: Apply
217. There have been pasta sauces on the market for years. These sauces have always
(p. 221 required the pasta to be precooked before it is mixed with the sauces and other
)
ingredients. The development of Prego Pasta Bake Sauce that does not require the
use of pre-cooked pasta would be an example of a(n)
A.
B.
C.
D.
E.
A dynamically continuous innovation requires only minor changes in consumer

behavior to use the product, the situation with the new pasta.

Blooms: Apply
9-208
218. Philips Sonicare recently introduced the DiamondClean rechargeable toothbrush. A

(p. 221 key innovation is its Quadpacer interval timer that goes off after 30-seconds to
)
prompt the user to move on to the next quadrant of the mouth that results in
better cleaning and improved gum health. This is an example of which type of
innovation?
A.
B.
C.
D.
E.
evolutionary innovation
Dynamically continuous innovations disrupt the consumer's normal routine

(brushing teeth and gums with an electric toothbrush with a timer) but do not
require totally new learning.

Blooms: Apply
219. LG Electronics recently introduced the Fridge-TV with a 15" television screen
(p. 221 mounted in the right side refrigerator door. This is an example of which type of
)
innovation?
A.
B.
C.
D.
E.
inventive innovation
continuous invention
Dynamically continuous innovations disrupt the consumer's normal routine

(watching TV on the fridge is a new routine) but does not require totally new
learning.

Blooms: Apply
9-209
Heinz EZ Squirt Photo

220. When Heinz introduced its new EZ Squirt Ketchup bottle (see the photo above), the
(p. 221 degree of newness for the consumer would make this a
)
A.
B.
C.
D.
E.
continuous invention.
A dynamically continuous innovation disrupts consumer's normal routine but does

not require totally new learning by consumers, which this would apply to the Heinz
ketchup bottle, in storing and squeezing an upside-down bottle.

Blooms: Apply
9-210
221. A product that requires the learning of entirely new consumption patterns among
(p. 221 consumers is referred to as a(n)
)
A.
B.
C.
D.
E.
Text term definition - discontinuous innovation.

Blooms: Remember
Topic: Discontinuous innovation
222. A discontinuous innovation is a product that

(p. 221
)
A. disrupts consumers' normal routine but does not require totally new learning.
B.
requires no new learning by consumers.
C.
is not purchased by innovators and early adopters.
D.
initiates obsolescence of a product class.
E. requires consumers to learn entirely new patterns of behavior and product
usage.
Text term definition - discontinuous innovation.

Blooms: Remember
9-211
223. The emphasis of a marketing strategy for a discontinuous innovation would most
(p. 221 likely be to
)
A.
generate awareness among consumers.
B. advertise benefits to consumers that stress points of differentiation.
C. educate consumers about new consumption patterns through personal selling.
D.
obtain widespread distribution in multiple channels.
E.
stress price differentials from competitors' products.
Figure 9-4 shows that the emphasis of a marketing strategy for a discontinuous
innovation would most likely be to educate consumers through product trial and
personal selling.

Blooms: Understand
224. Which of the following products at the time of its introduction was the best
(p. 221 example of a discontinuous innovation?
)
A.
B.
C.
D.
E.
DVD player
disposable lighters
instant light charcoal
liquid laundry detergent
automatic dishwashers
Automatic dishwashers required consumers to learn a whole new consumption

pattern compared with washing dishes by hand.

Blooms: Apply
9-212
225. In the early 1900s, your great-great-grandfather probably purchased his first
(p. 221 automobile. After years of driving a horse and buggy, he got into his new car and
)
drove it into his new garage. The new automobile was an example of a
A.
B.
C.
D.
E.
Discontinuous innovations such as the first automobile require consumers to learn

entirely new patterns of behavior and product usage.

Blooms: Apply
226. Napster was the first software that allowed an individual to easily search for and
(p. 221 exchange MP3 music files with other individuals (in some cases illegally). When it
)
was introduced, Napster would have been an example of a
A.
B.
C.
D.
E.
regulatory innovation.
Discontinuous innovations such as Napster required consumers to learn entirely

new patterns of behavior, some of which were illegal.

Blooms: Apply
9-213
227. Dragon Naturally Speaking, a speech recognition software program that allows you
(p. 221 to use your voice instead of a keyboard to input text into a word processing
)
program, is an example of a(n)
A.
B.
C.
D.
E.
Discontinuous innovations, such as the Dragon Naturally Speaking speech

recognition software program, require consumers to learn entirely new patterns of
behavior and product usage.

Blooms: Apply
Figure 9-4
9-214
228. According to Figure 9-4 above, column A represents a(n)

(p. 221
)
A.
B.
C.
D.
E.
Figure 9-4 shows that with a discontinuous innovation, the consumer must learn
entirely new consumption patterns to use the product. The marketing strategy is to
educate consumers through product trial and personal selling.

Blooms: Understand
229. According to Figure 9-4 above, column B represents a(n)

(p. 221
)
A.
B.
C.
D.
E.
Figure 9-4 shows that with a dynamically continuous innovation, only minor
changes in behavior are required. The marketing strategy is to educate
prospective buyers on the product's benefits, advantages, and proper use.

Blooms: Understand
9-215
230. According to Figure 9-4 above, column C represents a

(p. 221
)
A.
B.
C.
D.
E.
simultaneous innovation.
Figure 9-4 shows that with a continuous innovation, consumers don't need to learn
new behaviors. The marketing strategy is to gain consumer awareness and wide
distribution.

Blooms: Understand
231. The Federal Trade Commission (FTC) considers a product new only
(p. 221
)
A. for a period of one year after it enters widespread distribution.

B.
if it is functionally different from a competitor's product.
C. until a new and improved version of the same product is produced.
D. for a period of six months after it enters regular distribution.
E. for a period of seventeen years at which time patent rights are returned to the
public domain.
The U.S. Federal Trade Commission (FTC) advises that the term new be limited to
use with a product up to six months after it enters regular distribution. The
difficulty with this suggestion is in the interpretation of the term regular.

Blooms: Understand
Topic: Newness
9-216
232. Prego recently introduced a Pasta Bake Sauce, which was made so that it was not
(p. 221 necessary to precook the pasta before blending pasta, sauce, meat, and cheese in
)
a casserole. Legally, this product would only be considered new
A. for the first six months that it was regularly available at a variety of grocery
stores.
B. until a competitor like Ragu had issued a similar product targeted to the same
market.
C.
as long it retained these exact product characteristics.
D.
if it was functionally the same as its salsa sauce.
E. until its advertising had been seen by every member of its target audience.
The U.S. Federal Trade Commission (FTC) advises that the term new be limited to
use with a product up to six months after it enters regular distribution. In this case,
national distribution could be understood to mean regular distribution.

Blooms: Apply
Topic: Newness
233. From an organization's perspective regarding its new products and innovations,
(p. 221 which of the following new-product strategies has the LOWEST level of risk?
-222)
A.
B.
C.
D.
E.
a radical invention
a brand extension
a product refinancing
Successful organizations view newness and innovation in their products at three

levels. The lowest level, which usually involves the least risk, is a product line
extension. This is an incremental improvement of an existing product line the
company already sells. At the next level is (1) a significant jump in innovation or
technology or (2) a brand extension involving putting an established brand name
on a new product in an unfamiliar market. The third and highest level of innovation
involves a radical invention, a truly revolutionary new product.

Blooms: Understand
Topic: Newness
9-217
234. From an organization's perspective regarding its new products and innovations,
(p. 221 which of the following new-product strategies has the HIGHEST level of risk?
-222)
A.
B.
C.
D.
E.
a radical invention
a brand extension
a product deletion
Successful organizations view newness and innovation in their products at three

levels. The lowest level, which usually involves the least risk, is a product line
extension. This is an incremental improvement of an existing product line the
company already sells. At the next level is (1) a significant jump in innovation or
technology or (2) a brand extension involving putting an established brand name
on a new product in an unfamiliar market. The third and highest level of innovation
involves a radical invention, a truly revolutionary new product.

Blooms: Understand
Topic: Newness
235. Mr. Clean is an antibacterial cleaning liquid for home use. If Proctor and Gamble
(p. 221 (P&G), the manufacturer of Mr. Clean, added Mr. Clean Magic Eraser Bath Scrubber
-222)
to the Mr. Clean product line, it would be seen by P&G as
A.
a discontinuous innovation.
B. a new product from the company's perspective because it is a product line
extension.
C. a high-risk product mix extension because it is new to the market.
D. new by the Federal Trade Commission for the usual one-year period.
E. not a new-product because it does not represent a different SKU.
The Mr. Clean Magic Eraser Bath Scrubber is a new product from P&G's perspective
since it extends - or adds a product item to - the Mr. Clean product line.

Blooms: Apply
Topic: Product line extension
9-218
236. Which of the following new products is the best example of the LOWEST level of
(p. 221 risk from the company's point of view?
-222)
A. adding Ball Park Beef Franks with Cheese to the Ball Park Franks line
B. moving from production of land-line telephones to smartphones
C.
marketing the first Apple computer
D. changing the formula from Coca-Cola to New Coke and then back to Coca Cola
Classic
E. offering online marketing classes rebranded under a new college name
Successful organizations are starting to view newness and innovation in their
products at three levels. At the lowest level, which usually involves the least risk, is
a product line extension. This is an incremental improvement of an existing
product for the company, such as adding Beef Franks with Cheese to the Ball Park
product line.

Blooms: Apply
Topic: Product line extension
237. Using an existing brand name to introduce a product that is new to the company
(p. 222 into a totally new, unfamiliar product category seems like a good idea. This is what
)
Cosmopolitan, purveyor of fashion magazines, did when it introduced its own
__________, which failed quickly.
A.
B.
C.
D.
E.
aspirin
yogurt
disposable underwear
soda (soft drink)
perfume
Using an existing brand name to introduce a new product into an unfamiliar

market - looks deceptively easy for companies with a powerful, national brand
name. Cosmopolitan thought so. It puts its brand name on a line of yogurts that
were not successful and disappeared within 18 months.

Blooms: Understand
Topic: Brand extension
9-219
(p. 222 into a totally new, unfamiliar market seems like a good idea. Several years ago,
)
Cosmopolitan magazine introduced Cosmopolitan-branded yogurt, and it failed
A.
B.
C.
D.
E.
radical invention
product line extension
brand extension
product deletion
Cosmopolitan magazine discovered its readers couldn't see themselves buying its
branded yogurt, a brand extension strategy that failed.

Blooms: Understand
239. A few years ago, Frito-Lay developed Frito-Lay Lemonade as a thirst-quencher for
(p. 222 those consumers who also like Frito-Lay's salty snacks such as Fritos corn chips.
)
But when people think of the brand name Frito-Lay, thirst-quenching is not a
benefit that comes to mind and Frito-Lay Lemonade failed. This innovation
strategy is known as a
A.
B.
C.
D.
E.
brand extension.
radical invention.
product deletion.
Frito-Lay's loyal customers couldn't see themselves buying its Frito-Lay Lemonade,
a brand extension strategy that failed.

Blooms: Apply
9-220
(p. 222 into a totally new, unfamiliar market seems like a good idea. Several years ago,
)
Harley-Davidson introduced perfume under the Harley-Davidson brand name - and
it failed quickly. This innovation strategy is known as a
A.
B.
C.
D.
E.
radical invention.
product deletion.
brand extension.
Harley-Davidson's loyal customers couldn't see themselves buying its perfume, a

brand extension strategy that failed.

Blooms: Apply
241. A new product or service protocol refers to

(p. 222
)
A. the standardized procedures a firm follows for the inception, design,

manufacturing, promotion, and distribution of a new product.
B. a formalized statement of intent regarding what will be sold, to whom it will be
sold, and by whom it will be sold.
C. maintaining compliance with all licensing, manufacturing, and distribution
standards established by the U.S. Federal Trade Commission (FTC).
D. a statement that identifies a well-defined target market, specific customers'
needs, wants, and preferences, and what the product or service will be and do
to satisfy consumers.
E. the raw unwritten ideas to produce a single commercially successful new
product.
Text term definition - protocol.

Blooms: Remember
service.
Topic: Protocol
9-221
242. A statement that identifies: a well-defined target market; specific customers'

(p. 222 needs, wants, and preferences; and what the product will be and do to satisfy
)
consumers is referred to as a new product's or service's
A.
B.
C.
D.
E.
protocol.
proposition.
modus operandi.
formula.
methodology.
Text term definition - protocol.

Blooms: Remember
service.
Topic: Protocol
243. Ideally, before a new product or service is developed, a firm should have a precise
(p. 222 __________, which is a statement defining the target market, specifying customers'
)
needs, and defining what the product or service will be and do to satisfy
consumers.
A.
B.
C.
D.
E.
formula
contract
modus operandi
protocol
methodology
Ideally, before a new product or service is developed, a firm should have a precise
specific customers' needs, wants, and preferences; and (3) what the product or
service will be and do to satisfy consumers.

Blooms: Understand
service.
Topic: Protocol
9-222
244. New product or service failures may be reduced or avoided if the company
(p. 222 developing them has
)
A. support from marketer-dominated sources of information.

B. a clear patent approved by the governments within the countries it wants to
market.
C.
a statement of competitive intent.
D.
stakeholder approval in the development process.
E.
a precise protocol.

Blooms: Understand
service.
Topic: Protocol
(p. 222 protocol, which is a statement that identifies: (1) __________; (2) specific customers'
)
needs, wants, and preferences; and (3) what the product or service will be and do
to satisfy consumers.
A.
a clear plan for product distribution
B.
an analysis of potential competitors' products
C. a precise budget of how much can be spent for the marketing program
D.
a well-defined target market
E.

Blooms: Understand
service.
Topic: Protocol
9-223
(p. 222 protocol, which is a statement that identifies: (1) a well-defined target market; (2)
)
__________; and (3) what the product or service will be and do to satisfy
consumers.
A.
B.
specific customers' needs, wants, and preferences
C. an analysis of potential competitors' products or services
D. a precise budget of how much can be spent for the marketing program
E.

Blooms: Understand
service.
Topic: Protocol
(p. 222 protocol, which is a statement that identifies: (1) a well-defined target market; (2)
)
specific customers' needs, wants, and preferences; and (3) __________.
A. what the product or service will be and do to satisfy consumers

B.
C.
D. an analysis of potential competitors' products or services
E. a precise budget of how much can be spent for the marketing program

Blooms: Understand
service.
Topic: Protocol
9-224
248. Most American families buy the same __________ items over and over again (p. 222 making it difficult to gain buyers for new products.
)
A.
B.
C.
D.
E.
25
50
100
125
150
Most American families buy the same 150 items over and over again - making it
difficult to gain buyers for new products.

Blooms: Understand
service.
Topic: New products
249. Less than __________ of new consumer packaged goods (CPG) exceed first-year
(p. 222 sales of $50 million - the benchmark of a successful CPG launch.
)
A.
B.
C.
D.
E.
3 percent
10 percent
17 percent
28 percent
35 percent
Less than 3 percent of new consumer packaged goods (CPG) exceed first-year
sales of $50 million - the benchmark of a successful CPG launch.

Blooms: Understand
service.
Topic: New products
9-225
250. When General Mills introduced Fingos, a corn chip-sized sweetened cereal flake, it
(p. 222 assumed that its customers would normally snack on them dry like a potato chip.
)
Unfortunately, consumers did not switch from munching on popcorn and potato
chips. The primary reason for the failure of Fingos was __________.
A. an insignificant point of difference relative to competing snacks - consumers

wouldn't switch from eating snacks from Frito-Lay and others
B. too little market attractiveness - the growth in the snacks market is declining
C. poor execution of the marketing mix - General Mills did not offer free samples at
grocery stores
D. poor product quality - the chips were not the same size
E. incomplete market and product protocol - the brand name "Fingos" did not get
consumers excited
According to the textbook, the point of difference of Fingos was not important
enough to get consumers to stop eating competing snacks such as popcorn and
potato chips.

Blooms: Understand
service.
Topic: Marketing reasons for new-product failures
251. One of the eight primary marketing-related reasons for new-product failure is
(p. 222 __________.
)
A.
B.
C.
D.
E.

There are eight main marketing reasons a new product can fail: (1) insignificant
point of difference; (2) incomplete market and product protocol before product
development starts; (3) not satisfying customers on critical factors; (4) bad timing;
(5) no economical access to buyers; (6) poor product quality; (7) poor execution of
the marketing mix; and (8) too little market attractiveness.

Blooms: Understand
service.
9-226
252. Kimberly-Clark developed its Avert Virucidal tissues that contained vitamin C
(p. 222 derivatives, which were scientifically designed to kill cold and flu germs when
-223)
users sneezed, coughed, or blew their noses into them. Unfortunately, people
didn't believe the claim and were frightened by the "cidal" in the brand name. The
reason for this product failure was
A.
B.
C.
D.
E.

A big part of the failure of Kimberly-Clark's Avert Virucidal tissues was its lack of a
product protocol that clearly defined how it would satisfy consumer wants and
needs.

Blooms: Understand
service.
253. Until 1996, U.S. carmakers sent very few right-hand-drive cars to Japan while
(p. 223 German car makers exported several models with the steering wheel on the right
)
to accommodate the way the Japanese drive their cars on the left side of the road.
American car manufacturers could blame their failure to a great degree on
A.
B.
C.
D.
E.

Even though the quality of the U.S. made cars was good, the failure to export
sufficient quantities of cars to Japan proved that American car makers missed the
mark on a critical product factor - sending a sufficient number of right-hand-drive
cars to meet the needs of Japanese drivers.

Blooms: Understand
service.
9-227
254. Microsoft introduced its Zune player a few years after Apple launched its iPod and
(p. 223 other competitors had offered their new MP3 players. Zune sales were very
)
disappointing and Microsoft eventually killed the product. According to the
textbook, the primary reason for the Zune's failure was due in large part to
A.
B.
C.
D.
E.
bad timing.
Bad timing occurs when a product is introduced too soon, too late, or when
consumer tastes are shifting dramatically. Microsoft introduced its Zune player way
too late - well after Apple and other competitors had marketed their new MP3
players. Microsoft was unable to crack the market dominated by Apple and its iPod
line of MP3 players. Microsoft eventually killed the product.

Blooms: Understand
service.
(p. 223 __________.
)
A.
B.
C.
D.
E.

no economical access to buyers

Blooms: Understand
service.
9-228
256. Thirsty Dog! is a zesty beef-flavored, vitamin-enriched, mineral-loaded, lightly

(p. 223 carbonated bottled water for your dog. It might have been a great product, but
)
competition over shelf space was fierce and the product could not generate
enough sales per square foot for retailers. The makers of this product had
A.
B.
C.
D.
E.

no economical access to buyers.
With thousands of new consumer packaged goods introduced each year, the cost
to gain access to retailer shelf space is huge. Because shelf space is judged in
terms of sales per square foot, a new product must displace an existing product on
the supermarket shelves. Thirsty Dog! failed to generate enough sales to meet its
sales per square foot requirements.

Blooms: Understand
service.
(p. 223 __________.
)
A.
the product is too innovative
B. a competitor with a similar product withdrew from the market
C.
too socially controversial
D.
E. product was marketed as a new product but it did not meet the legal definition
of new

Blooms: Understand
service.
9-229
258. After Microsoft launched its Xbox 360 video-game console, millions began to
(p. 223 experience the "red ring of death." The problem: The consoles' microprocessors
)
ran too hot, causing them to pop off their motherboards. This cost the company
not only money to extend its product warranty, but a huge portion of future sales
and market share to competitors Sony and Nintendo. This failure was due to
A.
B.
C.
D.
E.

The costs to an organization for poor quality can be staggering and include the
labor, materials, and other expenses to fix the problem - not to mention the lost
sales, profits, and market share that usually results. Microsoft had to set aside $1.1
billion to extend its warranty and fix the affected poor quality consoles for free,
costing it future sales and reducing its market share lead of the multibillion videogame console market over rivals Sony and Nintendo.

Blooms: Apply
service.
259. Garlic Cake was supposed to be served as an hors d'oeuvre with sweet breads,
(p. 223 spreads, and meats, but at its introduction the company forgot to explain this to
)
potential consumers. This product failure demonstrates
A.
B.
C.
D.
E.

bad timing.
Garlic Cake died because consumers were left wondering just what a Garlic Cake
was. This information should have been a key promotional (advertising) element of
the marketing mix.

Blooms: Understand
service.
9-230

260. OUT! International's Hey! There's A Monster In My Room spray with a bubble-gum
(p. 223 fragrance was designed to rid scary creatures from a kid's bedroom. Although a
)
clever idea, it failed because it
A.
B.
C.
D.
E.
did not satisfy customer needs on critical factors.

had poor product quality.
had bad timing.
had an incomplete market and product protocol.
had too little market attractiveness.
There was not an attractive market for the product because of its questionable
market (a real need?) and its brand name may have scared kids, suggesting that
there may in fact be monsters hiding in their rooms.

Blooms: Understand
service.
261. Groupthink occurs in a meeting when

(p. 224
)
A. everyone has an opinion but no one is willing to take charge.

B. everyone has the same idea after using the brainstorming idea-generation
technique.
C. there is too much competition among marketing managers, so no one is willing
to share his/her ideas.
D. someone suspects that there is a problem with the new product concept but is
afraid to speak up because everyone else is so enthusiastic about it.
E. top management wants the new product to go forward regardless of what
anyone else thinks.
Encountering groupthink in a meeting occurs when someone knows or suspects
the new-product concept is a dumb idea. But that person is afraid to speak up for
fear of being cast as a negative thinker and not a team player, and then being
ostracized from real participation in the group.

Blooms: Understand
service.
9-231
Topic: Organizational inertia in new-product failure
262. One of the two ORGANIZATION-related problems of inertia that can cause new(p. 224 product failures is __________.
)
A.
B.
C.
D.
E.

encountering groupthink in task force and committee meetings
poor execution of the marketing mix
bad timing
The two organization-related problems of inertia that can cause new-product

disasters include (1) encountering groupthink in task force and committee
meetings and (2) avoiding the NIH problem. Other alternatives are some of the
eight marketing-related reasons a new product can fail.

Blooms: Understand
service.
Topic: Organizational inertia in new-product failure
263. If you are using a marketing dashboard to discover which cities in Florida are not
(p. 224 meeting their sales growth goal for your sunscreen products, what marketing
)
metric should be used to measure sales performance?
A.
B.
C.
D.
E.
every metric possible

shelf space for this year and last year by city
production costs
customer psychographics
annual percent sales change by city
One of the advantages of a marketing dashboard is the ability to select the metrics
based on the firm's objectives. The correct choice (annual percentage change by
city) allows you to compare actual numbers versus forecasts or company
expectations.

Blooms: Apply
service.
Topic: Using marketing dashboards
9-232
264. Marketing dashboards are useful in measuring actual market performance versus
(p. 224 the goals set in new-product planning, such as sales. Once shortfalls are identified,
)
the first step would be to conduct market research to determine __________.
A.
how to change the promotional strategy
B. whether the problem is internal or external to the organization
C.
whether to drop or keep the failing product or market
D. whether to change the goal, and therefore, the marketing metric used to
measure it
E. if the numbers used for evaluation in the marketing dashboard are accurate
Marketing is often about grappling with sales shortfalls. You'll need to start by
trying to identify the problem. You'll want to conduct marketing research to see if
the problem starts with an external factor such as changing consumer tastes or an
internal factor such as a breakdown in your distribution system.

Blooms: Understand
service.
UMD9: Marketing Dashboard Map
9-233
265. In the UMD9: Marketing Dashboard Map above, the annual growth rate in each
(p. 224 state is shown, with green (which looks gray on printed paper) meaning good and
)
red (which looks black on printed paper) meaning very bad. If an organization's
2013 sales for the entire U.S. were $50 million and its 2012 U.S. sales were $30
million, what is the annual % sales change?
A.
B.
C.
D.
E.
40%
67%
100%
125%
133%
The annual % of sales change = [($50 - $30) $30] 100 = 67%.

Blooms: Apply
service.
266. In the UMD9: Marketing Dashboard Map above, the annual growth rate in each
(p. 224 state is shown, with green (which looks gray on printed paper) meaning good and
)
red (which looks black on printed paper) meaning very poor. If you were a
marketing manager faced with this dashboard, which of the following would be the
best action?
A.
Focus on the shortfalls in Idaho (ID) and Utah (UT).
B. Revise the relevant goals for both east and west coast.
C. Conduct additional market research in the southern United States.
D. Examine your distribution system in the northeastern United States.
E. Change the marketing metric being used to evaluate the states individually.
You'll need to start by trying to identify and correct the problems in the largest
volume states that are underperforming - in this case in the northeastern United
States. You'll want to do marketing research to see if the problem starts with (1) an
external factor involving consumer tastes or (2) an internal factor such as a
breakdown in your distribution system.

Blooms: Apply
service.
9-234
267. The seven stages an organization goes through to identify business opportunities
(p. 225 and convert them into salable products or services is referred to as the __________.
)
A.
B.
C.
D.
E.
commercialization process
SWOT process
business prospect development cycle
opportunity stage gate sequence
new-product process
Key term definition - new-product process.

Blooms: Remember
Learning Objective: 09-06 Explain the purpose of each step of the new-product process.
Topic: New-product process
268. The new-product process refers to

(p. 225
)
A. the informal process of brain storming to generate new-product concepts at a

marketing staff meeting.
B. the process of presenting cross-functional teams with a written new-product
C. the seven stages an organization goes through to identify business
opportunities and convert them into salable products or services.
D. the two stages an organization goes through from idea generation to
commercialization.
E. a formalized protocol for new-product development that begins at the corporate
level and ends at the functional level.
Key term definition - new-product process.

Blooms: Remember
9-235
269. The new-product process an organization goes through to identify business

(p. 225 opportunities and convert them into salable products or services contains
)
A. three main steps: research, production, and distribution.

B. four distinct steps: research, evaluation, production, and distribution.
C. five key phases ranging from idea generation to creating the first prototype.
D. seven stages from new product strategy development to commercialization.
E. three phases: planning, implementation, and evaluation.
The seven key steps of the new-product process are: new-product strategy
development, idea generation, screening and evaluation, business analysis,
development, market testing, and commercialization.

Blooms: Understand
Figure 9-5
9-236
270. Figure 9-5 above represents the seven stages of the new-product development
(p. 225 process. Stage 1 is the __________ stage.
)
A.
B.
C.
D.
E.
idea generation
product assessment
Stage 1 - the new-product strategy development stage in the new-product process

defines the role for a new product in terms of the firm's overall objectives. See
Figure 9-5.

Blooms: Understand
)
A.
B.
C.
D.
E.
idea generation
product assessment
Stage 2 - the idea generation stage in the new-product process develops a pool of
concepts as candidates for new products, building upon the previous stage's
results. See Figure 9-5.

Blooms: Understand
9-237
)
A.
B.
C.
D.
E.
idea generation
product assessment
Stage 3 - the screening and evaluation stage in the new-product process internally
and externally evaluates new-product ideas to eliminate those that warrant no
further effort. See Figure 9-5.

Blooms: Understand
)
A.
B.
C.
D.
E.
idea generation
business analysis
market testing
Stage 4 - the business analysis stage in the new-product process specifies the
features of the product and the marketing strategy needed to bring it to market
and make financial projections. See Figure 9-5.

Blooms: Understand
9-238
)
A.
B.
C.
D.
E.
business analysis
market testing
commercialization
development
Stage 5 - the development stage in the new-product process turns the idea on
paper into manufacturing the product but also performing laboratory and
consumer tests to ensure it meets the standards established for it. See Figure 9-5.

Blooms: Understand
)
A.
B.
C.
D.
E.
business analysis
market testing
commercialization
development
Stage 6 - the market testing stage in the new-product process involves exposing
actual products to prospective consumers under realistic purchase conditions to
see if they will buy. See Figure 9-5.

Blooms: Understand
9-239
)
A.
B.
C.
D.
E.
business analysis
market testing
commercialization
development
Stage 7 - the commercialization stage in the new-product process launches a new

product in full-scale production and sales. See Figure 9-5.

Blooms: Understand
277. One reason new products fail is that although most major corporations use a
(p. 225 formal decision making process, sometimes they fail to critically evaluate the
)
progress along the way. This is why many firms have a __________ to ensure that
problems are corrected before proceeding to the next stage.
A.
B.
C.
D.
E.
written protocol
Stage-Gate process
cross-functional team
prototype test
test market
Today many firms use a formal Stage-Gate process to evaluate whether the results
at each stage of the new-product development process are successful enough to
warrant proceeding to the next stage. If problems in a stage can't be corrected,
the project doesn't proceed to the next stage and product development is killed.

Blooms: Understand
9-240
278. The stage of the new-product process that defines the role for a new product in
(p. 225 terms of the firm's overall objectives is referred to as __________.
)
A.
B.
C.
D.
E.
distinctive competency determination

strategic marketing process
strategic invention process
product protocol definition
Key term definition - new-product strategy development.

Blooms: Remember
279. New-product strategy development refers to

(p. 225
)
A. the stage of the new-product process where specific product features and
benefits are selected prior creating a new-product prototype.
B. a formalized protocol for new product development determined by director of
marketing.
C. the stage of the new-product process that defines the role for a new product in
terms of the firm's overall objectives.
D. the process of presenting cross-functional teams with a written new-product
E. the stage of the new-product process that turns the idea on paper into a
prototype, which results in a demonstrable, producible product corresponding
to its protocol.
Key term definition - new-product strategy development.

Blooms: Remember
9-241
280. The first stage of the new-product process is

(p. 225
)
A.
B.
C.
D.
E.
idea generation.
business analysis.
concept testing.
Key term definition - new-product strategy development. See Figure 9-5.

Blooms: Remember
281. Which stage in the new-product process is a SWOT analysis used to identify the
(p. 226 strategic role the new product might serve in the firm's business portfolio?
)
A.
B.
C.
D.
E.
idea generation
business analysis
development
At the new-product strategy development stage, a SWOT analysis is performed.

The outcome not only defines the vital protocol for each new-product idea but also
identifies the strategic role it might serve in the firm's business portfolio.

Blooms: Understand
9-242
282. During the first stage of the new-product process, two important activities take
(p. 226 place. They are
)
A.
B.
C.
D.
E.
SWOT analysis and environmental scanning.

open innovation and business analysis.
concept testing and product forecasting.
R&D and operations set-up.
environmental scanning and open innovation.
For companies, new-product strategy development is the stage of the new-product

process that defines the role for a new product in terms of the firm's overall
objectives. During this stage, firms use both a SWOT analysis and environmental
scanning to assess their strengths and weaknesses relative to the trends they
identify as opportunities or threats.

Blooms: Understand
283. In which stage in the new-product process would a firm use both a SWOT analysis
(p. 226 and environmental scanning to assess its strengths and weaknesses relative to the
)
trends it identifies as opportunities or threats?
A.
B.
C.
D.
E.
idea generation
business analysis
development
The purpose of the new-product strategy development stage is to define the role
for a new product in terms of the firm's overall objectives, so it uses SWOT analysis
and environmental scanning in its assessment.

Blooms: Understand
9-243
284. Occasionally, a firm's Stage 1 product development activities can be blind-sided by

(p. 226 a revolutionary new product or technology that completely disrupts its business,
)
which is sometimes called a __________.
A.
B.
C.
D.
E.
marketing opportunity
business threat
crowdsourcing
concept test
Disruptive innovations examples in the text include Wikipedia, digital photography,

and personal computers.

Blooms: Understand
285. The stage of the new-product process that develops a pool of concepts to serve as
(p. 226 candidates for new products is referred to as __________.
)
A.
B.
C.
D.
E.
idea generation
product development
open innovation assessment
Key term definition - idea generation.

Blooms: Remember
9-244
286. Developing a pool of concepts to serve as candidates for new products is the
(p. 226 __________ stage of the new-product process.
)
A.
B.
C.
D.
E.
open innovation
product development
idea generation

Blooms: Remember
287. Idea generation is the stage in the new-product process that

(p. 226
)
A. develops a pool of concepts to serve as candidates for new products.

B. selects a single concept and scrutinizes it for all potential benefits and flaws.
C. separates ideas into two categories: consumer-oriented and organizationoriented.
D. requires the organization to perform a SWOT analysis and an environmental
scan.
E. consists of the techniques used to screen and reject those ideas that have no
merit.

Blooms: Remember
9-245
288. Idea generation refers to

(p. 226
)
A. the stage of the new-product process when concepts are converted to

prototypes.
B. the stage of the new-product process that develops a pool of concepts to serve
as candidates for new-products.
C. the stage of the new-product process where possible promotional campaigns
and advertising themes are created.
D. the techniques used to screen and reject those ideas that have no merit.
E. the discussion and decision of which as target market segments will be
selected.

Blooms: Remember
289. Many forward-looking companies have discovered that their own organization does
(p. 226 not generate enough useful new-product ideas. This has caused them to find new
)
product ideas by developing strategic relationships with outside individuals and
organizations, a practice known as __________.
A.
B.
C.
D.
E.
innovation alliances
open innovation
open collaboration
piggy-back thinking
stakeholder cooperation
Text term definition - open innovation.

Blooms: Remember
Topic: Open innovation
9-246
290. Open innovation may enhance the __________ stage of the new-product process.
(p. 226
)
A.
B.
C.
D.
E.
open innovation
product development
idea generation
Idea generation, the second stage of the new-product process, involves developing
a pool of concepts to serve as candidates for new products, building upon the
previous stage's results. Many forward-looking companies use open innovation, in
which an organization finds and executes creative new-product ideas by
developing strategic relationships with outside individuals and organizations.

Blooms: Understand
291. Open innovation helps organization overcome __________, one of the organizational
(p. 226 inertias common in new-product failures.
)
A.
B.
C.
D.
E.
groupthink
intelligent failures
incomplete protocols
NIH barriers
bad timing
Many forward-looking companies use open innovation, in which an organization

finds and executes creative new-product ideas by developing strategic
relationships with outside individuals and organizations. It helps organizations
overcome not-invented-here (NIH) barriers.

Blooms: Understand
9-247
292. All of the following are sources for new product ideas EXCEPT:
(p. 226
)
A.
B.
C.
D.
E.
competitors.
universities.
regulators.
suppliers.
employees.
Sources of new product ideas include employees, co-workers, customers,

suppliers, "crowdsources," R&D labs (the firm's and professional R&D labs outside
the firm), competitors, smaller, nontraditional firms, universities, and inventors.

Blooms: Understand
293. Business researchers emphasize that firms must actively involve customers and
(p. 227 suppliers in the new-product development process. This means that the focus
)
should be on what the new product will __________ rather than simply what they
want.
A.
B.
C.
D.
E.
look like
cost them
do for them
feel like
consist of in terms of new features
Business researchers emphasize that firms must actively involve customers and
suppliers in the new-product development process. This means the focus should
be on what the new product will do for them rather than simply what they want.

Blooms: Understand
9-248
294. Generating insights leading to marketing actions based on massive numbers of

(p. 227 peoples' ideas is called __________.
)
A.
B.
C.
D.
E.
brainstorming
groupthink
outsourcing
crowdsourcing
NIH method
Text term definition - crowdsourcing.

Blooms: Remember
Topic: Crowdsourcing
295. Dell used __________ to develop an online site to generate 13,464 ideas for new
(p. 227 products and website and marketing improvements.
)
A.
B.
C.
D.
E.
brainstorming
crowdsourcing
group think
outsourcing
data mining
Dell used crowdsourcing to develop an online site to generate 13,464 ideas for
new products and website and marketing improvements, of which 402 were
implemented.

Blooms: Understand
Topic: Crowdsourcing
9-249
296. IDEO is a company that

(p. 227
)
A. creates innovative promotional programs for its clients' new products.

B. is a firm that developed the formal Stage-Gate process to commercialize new
products for its clients.
C. uses design thinking to develop new products for other organizations.
D.
rates new products like Consumer Reports.
E. runs patent searches for companies that don't have and internal legal
department.
IDEO is a world-class new-product development firm that uses design thinking,
which involves incorporating human behavior as well as building upon the ideas of
others into the innovation-design process. As the most prolific and influential
design firm in the world, IDEO has created thousands of products for its clients.

Blooms: Understand
297. Brainstorming sessions at IDEO can generate as many as __________ ideas for
(p. 227 products in an hour.
)
A.
B.
C.
D.
E.
10
25
50
100
200
IDEO is a world-class new-product development firm that uses design thinking,

which involves incorporating human behavior as well as building upon the ideas of
others into the innovation-design process. As the most prolific and influential
design firm in the world, IDEO has created thousands of products for its clients.
Brainstorming sessions conducted at IDEO can generate 100 new ideas in an hour.

Blooms: Understand
9-250
298. In addition to seeking ideas from more well-known sources, organizations also get
(p. 228 ideas from universities, inventors, and smaller nontraditional firms. For example,
)
General Mills partnered with Brigham Young University to license its patent for
__________.
A.
scones with coffee-flavored cream frosting
B. an Omega-3 enriched SKU for the Philadelphia cream cheese line
C.
a carbonated yogurt called Go-Gurt Fizzix
D. deep fried chicken skins for people who cannot eat pork
E. a crispy baked macaroni and cheese snack that can be eaten out of a bag like
Cheetos
The first-of-its-kind carbonated yogurt Go-Gurt Fizzix was launched by General
Mills partnering with Brigham Young University to license the university's patent to
put some fizz into the yogurt.

Blooms: Understand
299. Imagine you work for a TV production company that has been approached by one
(p. 228 of the broadcast TV networks to develop a concept for a new reality show. Where
)
are you most likely to look first for ideas?
A. conducting a survey among the 2 million people belonging to the NPD

Consumer Panel
B. observing similar reality programs that are on competing television networks
like CBS or MTV
C. contacting contestants from other reality shows like Survivor or The Amazing
Race
D. brainstorming ideas from the TV production company's employees
E. reading about the stars of reality TV programs in gossip magazines like Us
Weekly and TV programs like TMZ
Marketers would first look at the set of competitive reality shows that are currently
being broadcast on other TV networks like CBS, NBC, ABC, FOX, MTV, etc. to
analyze these competitors to discover their shows' strengths and weaknesses.

Blooms: Apply
9-251
300. The Marriott Corporation sent a six-person intelligence team to travel and stay at
(p. 228 economy hotels around the country for a six-month period. The purpose of these
)
visits was to
A. allow the team to reap the benefits of the new product, Fairfield Inns.
B. assess the strengths and weaknesses of economy hotels that could be used in
the new-product development process for the launch of a new economy hotel
chain.
C. complete customer satisfaction surveys to purposefully create inaccuracies in
the marketing research for competing economy hotels.
D. obtain the demographics and media behavior of consumers who stay at these
facilities in order to develop a target market profile.
E. refute the assumption that open innovation can benefit the Marriott
Corporation.
Marketers can analyze the competition to discover strengths and weaknesses in
competing products. The Marriott Corporation used the intelligence team to assess
the competitions' strengths and weaknesses on everything from the soundproof
qualities of the rooms to the softness of the towels. Marriott then budgeted $500
million for a new economy hotel chain - Fairfield Inns.

Blooms: Understand
301. Because early-stage financing is almost always a problem for those starting a new
(p. 228 business, __________ is a way to gather an online community of supporters to
)
financially rally around a specific project that is unlikely to get resources from
traditional sources.
A.
B.
C.
D.
E.
crowdfunding
open sourcing
venture capital
online banking
crowdsourcing
Text term definition - crowdfunding.

Blooms: Remember
Topic: Crowdfunding
9-252
302. Which of the following firms uses crowdfunding to raise capital for products that
(p. 228 are unlikely to get resources from traditional sources?
)
A.
B.
C.
D.
E.
IDEO
Kickstarter.com
Warren Buffet's Berkshire Hathaway
the Industrial Design Group
Unfundale.com
Crowdfunding is a way to gather an online community of supporters to financially

rally around a specific project that is unlikely to get resources from traditional
sources, such as banks or venture capital firms. For example, Kickstarter.com
raised $1.2 million for startup SmartThings to introduce a product that allows users
to monitor their homes by remote control.

Blooms: Understand
Topic: Crowdfunding
303. The stage of the new-product process that internally and externally evaluates new(p. 229 product ideas to eliminate those that warrant no further effort is referred to as
)
__________.
A.
B.
C.
D.
E.
development
stage-gate
idea generation
business analysis
Text term definition - screening and evaluation.

Blooms: Remember
9-253
304. Screening and evaluation refers to the stage of the new-product process
(p. 229
)
A. at which prospective customers are exposed to new product prototypes for the
first time.
B. at which new product concepts that have been found viable are converted into
actual prototypes.
C. that internally and externally evaluates new-product ideas to eliminate those
that warrant no further effort.
D. that specifies the features of the product and the marketing strategy needed to
E. where consumers evaluate a new product's performance in an actual-use
situation.

Blooms: Remember
305. The screening and evaluation stage of the new-product process involves
(p. 229
)
A.
B.
C.
D.
E.
internal and external evaluations of new-product ideas.

product selection and budgeting projections.
business and cost analyses.
patent searches and environmental scanning.
idea selection and prototype development.

Blooms: Remember
9-254
306. The __________ stage of the new-product process includes an examination of the
(p. 229 technical feasibility for the product, such as 3M determining that the firm's micro)
replication technology (the 3,000 tiny gripping fingers) could be used to improve
the gripping power of batting or work gloves.
A.
B.
C.
D.
E.
development
Stage-Gate
idea generation
business analysis
The third stage of the new product process is screening and evaluation, which
involves internal and external evaluations of the new product ideas to eliminate
those that warrant no further effort. 3M was able to use the firm's micro-replication
technology to improve the gripping power of batting or work gloves.

Blooms: Understand
307. An important aspect of the screening and evaluation stage of the new-product
(p. 229 process is an examination of the technical feasibility for the product. For example,
)
3M was able to use the firm's micro-replication technology (the 3,000 tiny fingers)
to
A.
B.
C.
D.
E.
improve the gripping power of batting or work gloves.

keep baseball caps from sliding off the heads of bald men.
make Formula One race cars more aerodynamic.
as a replacement for Velcro's hook-and-loop fasteners.
hold pictures in a photo album without damaging them.
The third stage of the new product process is screening and evaluation, which
involves internal and external evaluations of the new product ideas to eliminate
those that warrant no further effort. 3M was able to use the firm's micro-replication
technology to improve the gripping power of batting or work gloves.

Blooms: Understand
9-255
308. A 3M researcher worked with university students to develop the Post-it Flag
(p. 229 Highlighter. His team evaluated the technical feasibility of the proposed design and
)
determined whether the idea met the firm's new-product objectives. At which
stage of the new-product process was this product?
A.
B.
C.
D.
E.
idea generation
business analysis
concept testing
In the screening and evaluation stage of the new-product process, a firm internally
evaluates the technical feasibility of the new product concept and whether it
meets the objectives established for it during the new-product strategy
development stage. This is the stage where the 3M researcher was.

Blooms: Apply
309. Customer experience management (CEM) is

(p. 229
)
A. the integration of the service component of the marketing mix with efforts to
influence consumer demand.
B. the unique combination of benefits received by targeted buyers that include
quality, convenience, on-time delivery, and both before-sale and after-sale
service at a specific price.
C. the process of managing the entire customer experience within the company.
D. a cluster of benefits that an organization promises customers to satisfy their
needs.
E. the ability of logistics management to satisfy users in terms of time,
dependability, communication, and convenience.
Key term definition - customer experience management (CEM).

Blooms: Remember
Topic: Customer experience management
9-256
310. __________ includes considering employee interactions with customers to ensure

(p. 229 they are consistently delivered and experienced, clearly differentiated from other
)
offerings, and relevant and valuable to the target market.
A.
B.
C.
D.
E.
Capacity management
Customer experience management
Derived demand
Internal marketing
The key service factor
Customer experience management (CEM) is the process of managing the entire

customer experience within the company. Marketers must consider employees'
interactions with customers so that the new services are consistently delivered
and experienced, clearly differentiated from other service offerings, and relevant
and valuable to the target market.

Blooms: Understand
Topic: Customer experience management
311. An external evaluation with consumers that consists of preliminary testing of a

(p. 229 new-product idea rather than the actual product is referred to as
)
A.
B.
C.
D.
E.

idea generation.
crowdsourcing.
market testing.
a concept test.
Text term definition - concept tests.

Blooms: Remember
Topic: Concepts tests
9-257
312. A concept test is an

(p. 229
)
A. internal evaluation among members of the entire cross-functional new-product

development team that consists of preliminary testing of a new-product idea
rather than the actual product.
B. external evaluation with consumers that consists of preliminary testing of a
new-product idea rather than the actual product.
C. internal evaluation that consists of preliminary testing of a new-product idea
using a mock-up or prototype of the new item.
D. in-house computer simulation of the new product that closely resembles the
actual product to forecast sales.
E. in-depth questionnaire filled out both by internal marketing personnel and
external customers to ensure that the final product meets all the needs
expressed in the original product plan.
Text term definition - concept tests.

Blooms: Remember
313. Concept tests are part of which stage in the new-product process?
(p. 229
)
A.
B.
C.
D.
E.
development
idea generation
business analysis
Concept tests are external evaluations with consumers that consist of preliminary
testing of a new-product idea rather than an actual product. Concept tests are
used in the external approach to Stage 3 of the new-product process - screening
and evaluation.

Blooms: Understand
9-258
314. The stage of the new product process that specifies the features of the product
(p. 229 and the marketing strategy needed to bring it to market and make financial
)
projections is referred to as
A.
B.
C.
D.
E.
idea generation.
business analysis.
marketing analysis.
product development.
commercialization.
Text term definition - business analysis.

Blooms: Remember
Topic: Business analysis
315. Business analysis refers to the stage of the new product process
(p. 229
)
A. where the target markets are selected and resources are allocated to reach
them.
B. where the target market segments that show potential are selected and those
that do not are eliminated.
C. that specifies the features of the product and the marketing strategy needed to
D. where there is a formal accounting of all monies spent on R&D to determine the
return on investment (ROI) that the new product will give back to the firm.
E. that internally and externally evaluates new-product ideas to eliminate those
warranting no further effort.
Text term definition - business analysis.

Blooms: Remember
9-259
316. An assessment of the fit of the proposed new products, from whether it can be
(p. 229 economically developed and manufactured to the marketing strategy needed, take
)
place during which stage of the new-product process?
A.
business analysis
B.
C.
D.
development
E. These activities are addressed at every stage with the exception of new-product
strategy development.
The business analysis stage assesses the total business fit of the proposed new
product with the company's mission and objectives - from whether the product can
be economically developed and manufactured to the marketing strategy needed to
have it succeed in the marketplace.

Blooms: Understand
317. A general review of possible marketing and product synergies, economic analysis,
(p. 229 and cannibalization potential would all take place during which stage of the new)
product process?
A.
business analysis
B.
C.
D.
development
E. These activities are addressed at every stage except new-product strategy
development.
The business analysis stage requires not only detailed financial projections but also
assessments of the marketing and product synergies related to the company's
existing operations. Will the new product require a lot of new machinery to
produce? Will it cannibalize sales of existing products or will it increase revenues
by reaching new market segments? Can it be patented?

Blooms: Understand
9-260
318. Detailed financial projections and assessments of marketing and product synergies
(p. 229 are a part of which stage of the new-product process?
)
A.
B.
C.
D.
E.
idea generation
market testing
business analysis
development
commercialization
Business analysis requires not only detailed financial projections but also
assessments of the marketing and product synergies related to the company's
existing operations.

Blooms: Understand
319. Factors such as specifying product features, marketing strategy, and financial
(p. 229 projections are a part of which stage of the new-product process?
)
A.
B.
C.
D.
E.
idea generation
market testing
development
commercialization
business analysis
Business analysis involves specifying the product features and marketing strategy
as well as making the necessary financial projections needed to commercialize a
product.

Blooms: Understand
9-261
320. All of the following actions occur during the business analysis stage of the new(p. 229 product process EXCEPT:
)
A. using capacity management to find ways to match the availability of the service
offering to when it is needed.
B. assessing the marketing and product synergies related to the company's
existing operations.
C.
turning the idea on paper into a prototype.
D. determining whether the new product can be protected with a patent or
copyright.
E. assessing whether the proposed new product fits with the company's mission
and objectives.
Turning the idea on paper into a prototype occurs during the development stage
rather than the business analysis stage of the new-product process.

Blooms: Understand
321. A full-scale operating model of the product under development is referred to as a

(p. 229
)
A.
B.
C.
D.
E.
sample.
framework.
template.
prototype.
blueprint.
Text term definition - prototype.

Blooms: Remember
Topic: Prototype
9-262
322. A prototype is a
(p. 229
)
A. miniature version of an actual new product used in concept testing to identify

any changes that need to be made prior to its commercialization.
B. full-scale operating model of the product under development.
C. sample of a new product given to prospective customers and opinion leaders
used to generate awareness prior to the product's commercial release.
D. simulated operating model of the product given to consumers to use in fullscale field testing.
E. digital version of a product produced in multiple shapes, colors, and sizes to
determine which version of the product customers like best.
Text term definition - prototype.

Blooms: Remember
Topic: Prototype
323. For services, business analysis must consider __________, which finds ways to
(p. 230 match the availability of the service to when it is needed.
)
A.
B.
C.
D.
E.
capacity management
customer experience management
derived demand
internal marketing
the seven I's of services GDP
For services, business analysis involves using capacity management to find ways
to match the availability of the service offering to when it is needed. For example,
airlines and mobile phone service providers use off-peak pricing to charge different
prices during different times of the day or during different days of the week to help
match the supply and demand for their services.

Blooms: Understand
Topic: Capacity management
9-263
324. In implementing capacity management, service providers use __________ to charge

(p. 230 different prices for different times of the day or week to help match the supply and
)
demand for their services.
A.
B.
C.
D.
E.
off-peak pricing
dynamic pricing
capacity pricing
down-time pricing
yield management pricing
Service providers perform capacity management by using off-peak pricing to vary

prices by time of day or day of week to help match the supply and demand for
their services.

Blooms: Remember
Topic: Off-peak pricing
325. One tool available for services when dealing with capacity management is to use
(p. 230 __________ to charge different prices during different times of the day or the week
)
to help match the supply and demand for their services.
A. variable hours of operation - opening or closing a store at different times

B.
sales promotion incentives such as coupons
C.
off-peak pricing
D.
build-to-order service delivery systems
E.
rationing
Services such as airlines and mobile phone service providers use off-peak pricing
to charge different prices for different times of the day or week to help match the
supply and demand for their services.

Blooms: Remember
Topic: Off-peak pricing
9-264
326. The stage of the new-product process that turns an idea on paper into a prototype
(p. 230 is referred to as __________.
)
A.
B.
C.
D.
E.
idea generation
business analysis
commercialization
development
Text term definition - development.

Blooms: Remember
Topic: Development
327. Development refers to the stage of the new-product process

(p. 230
)
A.
where initial ideas are generated and discussed.
B.
that turns an idea on paper into a prototype.
C. where product characteristics and product benefits are selected.
D. where cross-functional team members and leaders are selected and initial tasks
are assigned.
E. where the first version of a product enters the marketplace.
Text term definition - development.

Blooms: Remember
Topic: Development
9-265
328. In the new-product process, product ideas that survive the business analysis stage
(p. 230 proceed to the __________ stage.
)
A.
B.
C.
D.
E.
market testing
business analysis
development
commercialization
In the new-product process, Stage 3 - business analysis is followed by Stage 4 development.

Blooms: Understand
Topic: Development
329. At Mattel, Barbie is child-tested to be sure the doll cannot be broken apart and
(p. 230 accidentally choke a child. This type of consumer or safety test occurs during the
)
A.
B.
C.
D.
E.

development
business analysis
market testing
At the development stage, the idea on paper is turned into an actual prototype.
The firm not only manufactures a prototype, it also performs laboratory and
consumer safety tests to ensure the product meets the standards set. Note that
this is not the market testing stage because the products are not offered for sale.

Blooms: Apply
Topic: Development
9-266
330. After the new owner purchased a fully equipped yogurt factory, it took a yogurt
(p. 230 master a year and a half to come up with the perfect formulation for Chobani
)
Greek Yogurt. The most likely stage of the new-product process during which this
time was spent is __________.
A.
B.
C.
D.
E.
development
market testing
idea generation
business analysis
Development is the stage of the new-product process that involves turning the
idea on paper into a prototype. This results in a demonstrable, producible product
that involves manufacturing the new product, the situation at Chobani.

Blooms: Apply
Topic: Development
331. New-product strategy development calls for INGenius Co. to develop a battery
(p. 230 recycler for the business market. Which is the most likely stage of the new-product
)
process in which manufacturing issues regarding the new product become an
especially important element?
A.
B.
C.
D.
E.
market testing
idea generation
development
business analysis
Development is the stage of the new-product process that involves turning the
idea on paper into a prototype. This results in a demonstrable, producible product
that involves manufacturing the new product.

Blooms: Apply
Topic: Development
9-267
332. If you watch much television, you have seen the ads that show a controlled crash
(p. 230 of a car containing crash test dummies and the resultant vehicular damage. In the
)
new-product process, this safety test would occur during the __________ stage.
A.
B.
C.
D.
E.
development
market testing
idea generation
business analysis
Product ideas that survive the business analysis proceed to actual development,
turning the idea on paper into a prototype. Performing laboratory and safety tests
to ensure that it meets standards is also important. Car manufacturers have done
extensive safety tests by crashing their cars into concrete walls.

Blooms: Apply
Topic: Development
333. According to the textbook, which of the following firms is in the development stage
(p. 230 of the new-product process for a driverless car?
)
A.
B.
C.
D.
E.
Honda
Apple
Google
Ford
General Motors
By August 2012, Google's driverless car had logged 300,000 miles without an
accident.

Blooms: Remember
Topic: Development
9-268
334. Another name for the steps in the service delivery process is __________.
(p. 230
)
A.
B.
C.
D.
E.
service interactions
access points
path-analysis
service encounters
wheel of services
Improving the delivery of customer service is critical, which involves analyzing the
entire sequence of steps, or service encounters, to improve the interactions
between consumers and the service provider.

Blooms: Understand
Topic: Development
335. Which of the following activities are accomplished during the development stage
(p. 230 for services?
)
A.
developing off-peak pricing strategies
B. using fast prototyping to improve the initial service design
C. ensuring that employees have the commitment and skills to meet customers'
expectations and sustain their loyalty
D. using capacity management models to match service availability with
consumers' needs
E.
analyzing the sequence of service encounters
For services, organizations analyze the sequence of service encounters during the
development stage of the new-product process.

Blooms: Understand
Topic: Development
9-269
336. Since its launch, Netflix has changed its business model in order to
(p. 230
)
A.
compete with Blockbuster's retail store expansion.
B.
respond to changing customer service needs.
C. expand its focus from entertainment to movie collectibles and memorabilia.
D. avoid head-to-head competition with satellite television providers, which
recently announced a strategic partnership with Blockbuster that offers a
similar service as Netflix.
E. begin preparations to withdraw from its traditional method of mail delivery,
which takes 2-3 business days, and introduce next-day delivery through FedEx.
Netflix founder and chief executive Reed Hastings's business model is changing
continuously to respond to changing customer needs and new technology in order
to maximize customer service.

Blooms: Understand
Topic: Development
337. The stage of the new-product process that exposes actual products to prospective
(p. 230 consumers under realistic purchase conditions to see if they will buy is referred to
)
as
A.
B.
C.
D.
E.
development.
market testing.
business analysis.
commercialization.
Key term definition - market testing.

Blooms: Remember
Topic: Market testing
9-270
338. Market testing refers to

(p. 230
)
A. exposing actual products to prospective consumers under realistic purchase

conditions to see if they will buy.
B. making sales and profit projections on prototype products to make go-no-go
decisions.
C. conducting marketing research among a sample of consumers in the target
market to determine which version of a new-product concept is deemed the
best.
D. independently run comparison tests with similar products currently in the
marketplace to determine which one performs best.
E. conducting safety tests to determine whether the new product meets the
established requirements when it isn't used as planned.
Key term definition - market testing.

Blooms: Remember
339. All of the following are examples of test markets EXCEPT:

(p. 230
)
A.
B.
C.
D.
E.

concept test market
The three main kinds of test markets are (1) standard, (2) controlled, and (3)
simulated, or laboratory. A concept test is an external evaluation with consumers
that consists of preliminary testing of a new-product idea rather than the actual
product and occurs during the screening and evaluation stage of the new-product
process.

Blooms: Understand
9-271
340. Nicole owns a small organic spice company called RaisaSpice and was looking for a
(p. 230 new product to add to her company's line. A friend suggested combining spices
)
from India with tea. In the __________ stage of the new-product process, the spice
and tea mixtures were distributed to grocery stores in Portland and Seattle to see
if they sold well.
A.
B.
C.
D.
E.
idea generation
business analysis
market testing
commercialization
Market testing is the stage of the new-product process that involves exposing
actual products to prospective consumers under realistic purchase conditions to
see if they will buy, which reflects RaisaSpice's current stage.

Blooms: Apply
341. Audiences are allowed to preview actual movies (a sneak preview) such as The
(p. 230 Hunger Games and Star Trek so that changes might be made before they are
)
released to the general public during which stage of the new-product process?
A.
B.
C.
D.
E.
market testing
business analysis
commercialization
concept testing
Market testing that involves exposing actual products (the movie) to prospective
customers under realistic purchase conditions (in the theater as a sneak preview)
to see if they will buy (attend the movie).

Blooms: Apply
9-272
342. Breyer's introduced a new line of ice cream flavors for sale in elegant black
(p. 230 containers. This was done on a limited scale to determine consumer reactions
)
before national distribution of the product. Breyer's new product was in the
A.
B.
C.
D.
E.
commercialization
business analysis
development
market testing
The market testing stage of the new-product process involves exposing actual
products to prospective consumers under realistic purchase conditions to see if
they will buy, the situation with Breyer's. Based on results, the product may
subsequently be offered for sale on a widespread basis.

Blooms: Apply
343. Which of the products listed below would be the best candidate for full-scale
(p. 231 market testing?
)
A.
B.
C.
D.
E.
totally free checking account from Bank One

household frequent flyer program from Delta Airlines
mid-priced luxury sedan made in America by Mazda
new iced coffee beverage from Starbucks
slimmer iMac computer
Testing a service beyond the concept level is very difficult because the service is
intangible and consumers can't see what they are buying. Similarly, test markets
for expensive consumer products such as cars and computers are impractical.
Thus, the new iced coffee product would lend itself best to full-scale market
testing.

Blooms: Apply
9-273
344. Test marketing involves offering a product for sale

(p. 230
)
A. to random sample of people in the top ten major cities of the U.S.
B.
in as broad a geographic region as possible.
C. to consumers that are representative of the target market.
D.
on a limited basis in a defined area.
E.
only on certain days of the week and hours of the day.
Text term definition - test marketing.

Blooms: Remember
Topic: Test marketing
345. Which of the following statements about test marketing is most accurate?
(p. 231
)
A. Test marketing is especially important for new services.

B. Expensive consumer products must be test marketed in extremely upscale
shopping malls to guarantee accurate results.
C. Test marketing is better suited to relatively inexpensive new consumer goods
than for new services.
D. Test marketing is especially important for new, expensive industrial products.
E. Standard test markets are the least expensive and fastest type.
Testing a service beyond the concept level is very difficult because the service is
intangible and consumers can't see what they are buying. Similarly, test markets
for expensive consumer products and industrial products are impractical.

Blooms: Understand
9-274
346. If a firm used IRI's BehaviorScan service to track sales of a new product made to a
(p. 231 panel of consumers and assess the effectiveness of advertising and other
)
promotion tactics, what type of test market is this?
A.
B.
C.
D.
E.

concept test market
A controlled test market involves contracting the entire test program to an outside
service, such as IRI. IRI pays retailers for shelf space, and therefore, can guarantee
a specified percentage of the test product's potential distribution volume. Its
BehaviorScan service uses five demographically representative cities to track sales
made to a panel of households. In some cases the effectiveness of different TV
commercials and other direct-to-consumer promotions can be measured.

Blooms: Understand
Topic: Controlled test market
347. Because of the time, cost, and confidentiality problems of test markets, consumer
(p. 231 packaged goods firms often turn to __________, a technique that replicates a full)
scale test market to a limited degree, often in a mall setting.
A.
B.
C.
D.
E.
partial rollouts
virtual reality testing
time-to-market measures
simulated test markets
Text term definition - simulated test markets.

Blooms: Remember
Topic: Simulated test market
9-275
348. Simulated test markets (STMs) are often run in shopping malls where consumers
(p. 231 are
)
A. asked how much a person is willing to pay for an unfamiliar item.

B. asked whether they saw the firm's advertising campaign.
C. questioned about how often they are likely to shop in that particular location.
D. asked to identify differences between the consumer's behavioral intention and
actual behavior regarding a firm's new product.
E. questioned to identify product users and their likely consumption and media
patterns.
Simulated test markets (STM) is a technique that replicates a full-scale test market
but in a limited fashion. STMs are often run in shopping malls, where consumers
are questioned to identify who uses the product class being tested. Next
participants are exposed to product concepts and advertising.

Blooms: Understand
Topic: Simulated test market
349. The stage of the new-product process that positions and launches a new product in
(p. 231 full-scale production and sales is referred to as __________.
)
A.
B.
C.
D.
E.
marketing program execution

disbursement
launch
commercialization
final distribution
Key term definition - commercialization.

Blooms: Remember
Topic: Commercialization
9-276
350. Commercialization refers to

(p. 231
)
A. the point at which a new product has diffused throughout the marketplace.
B. the introduction of an offering to sequential geographic areas of the U.S.
C. exposing actual products to prospective consumers under realistic purchase
conditions.
D. the stage of the new-product process that positions and launches a new
product in full-scale production and sales.
E. the point where new-product concepts are transformed into prototypes.

Blooms: Remember
351. Commercialization is the stage in the new-product process

(p. 231
)
A. at which the product is positioned and launched in full-scale production and

sales.
B. during which the firm performs its final evaluations of the new-product.
C. when second-year sales forecasts are compared to actual first-year sales
figures using a marketing dashboard.
D. when advertising campaigns are evaluated using Starch scores to identify
brand awareness.
E. at which the product generates the greatest sales and profits.

Blooms: Remember
9-277
352. The most expensive stage in the new-product process for most products and
(p. 231 services is
)
A.
B.
C.
D.
E.
commercialization.
business analysis.
development.
market testing.
Commercialization, or launching full-scale production and sales, is the most

expensive stage for most new products.

Blooms: Understand
353. A slotting fee is a payment that a

(p. 232
)
A. wholesaler makes to place a new product on a retailer's shelf.

B. manufacturer makes to have a wholesaler distribute a new product to retailers.
C. manufacturer makes to place a new product on a retailer's shelf.
D. manufacturer makes to a wholesaler as compensation for warehousing
inventory.
E. manufacturer makes to a retailer as compensation for sales not made while the
Text term definition - slotting fee.

Blooms: Remember
Topic: Slotting fee
9-278
354. Marketers pay slotting fees to grocers in payment for space - or slots - on their
(p. 232 retail shelves. Such slotting fees significantly increase the cost of which stage of
)
the new-product process?
A.
B.
C.
D.
E.
business analysis
market testing
commercialization
idea generation
Because shelf space is so limited, many grocers require a slotting fee for new
products, which is a payment a manufacturer makes to place a new item on a
retailer's shelf. This can run to several million dollars for a single product. This cost
is incurred during the commercialization stage of the new-product process.

Blooms: Understand
Topic: Slotting fee
355. Kroger required that Birds Eye pay $15,000 per month to get its new Vegetable
(p. 232 Quinoa Pilaf placed in the middle shelves in the frozen vegetable freezer section of
)
all its supermarkets around the country. This payment is an example of a
A.
B.
C.
D.
E.
product placement fee.

bribe.
slotting fee.
product support fee.
shelf space allowance.
Marketers pay slotting fees to grocers in payment for space - or slots - on their
retail shelves, the situation Birds Eye encountered.

Blooms: Apply
Topic: Slotting fee
9-279
356. A failure fee is a penalty payment

(p. 232
)
A. a retailer assesses a manufacturer to handle defective new products that

customers returned.
B. a wholesaler makes to a retailer as compensation for sales not made while the
C. a retailer makes to a manufacturer for stockouts - not keeping point-of-purchase
displays continuously stocked with the new product.
D. a manufacturer makes to a wholesaler as compensation for case-lot sales not
made to retailers.
E. a manufacturer makes to compensate a retailer for devoting valuable shelf
space to a product that fails to sell.
Text term definition - failure fee.

Blooms: Remember
Topic: Failure fee
357. If a new grocery product does not achieve a predetermined sales target, some
(p. 232 retailers require a penalty payment by the manufacturer to compensate them for
)
sales that its valuable shelf space was unable to generate. What is this type of
payment called?
A.
B.
C.
D.
E.
an opportunity cost charge

lost sales fee
shelf space allowance
product displacement fee
a failure fee
Text term definition - failure fee.

Blooms: Remember
Topic: Failure fee
9-280
358. Introducing new-products sequentially into geographic areas of the U.S. to allow
(p. 232 production levels and marketing activities to build up gradually to minimize the
)
risk of new-product failure is referred to as
A.
B.
C.
D.
E.
limited rollouts.
phased rollouts.
regional rollouts.
Text term definition - regional rollouts.

Blooms: Remember
Topic: Regional rollouts
359. A new beverage by Snapple is currently being sold only in the western United
(p. 232 States. Over the next year, Snapple plans to introduce the beverage into areas in
)
the Midwest, and then the eastern U.S. This distribution strategy during
commercialization is referred to as a
A.
B.
C.
D.
E.
limited rollout.
phased rollout.
regional rollout.
Text term definition - regional rollouts.

Blooms: Apply
Topic: Regional rollouts
9-281
360. Speed or __________ is often vital in introducing a new product.

(p. 232
)
A.
B.
C.
D.
E.
perpendicular development
time to market
red tape cutting
fast concepting
delivery expediting
Text term definition - time to market.

Blooms: Remember
Topic: Time to market
361. Parallel development is the simultaneous development of both

(p. 232
)
A.
B.
C.
D.
E.
the product and promotion strategies.

production and financing tactics.
the product and the production process.
production and selling methodologies.
R&D and financial analysis.
Text term definition - parallel development.

Blooms: Remember
Topic: Parallel development
362. Parallel development, involving the simultaneous development of both the product
(p. 232 and the production process, is the responsibility of __________.
)
A.
B.
C.
D.
E.
cross-functional teams
the marketing department
research and development engineers
product managers
top management
Text term definition - parallel development.

9-282

Blooms: Remember
Topic: Parallel development
363. __________ often speeds up software development by using a "do it, try it, fix it"
(p. 233 approach that encourages continuous improvement even after the initial design.
)
A.
B.
C.
D.
E.
Time to market
Parallel development
Test marketing
Groupthink
Fast prototyping
Text term definition - fast prototyping.

Blooms: Remember
Topic: Fast prototyping
364. Which of the following methods is commonly used in software development to

(p. 233 speed up the development process?
)
A.
B.
C.
D.
E.
expedited time to market

fast prototyping
parallel development
controlled test marketing
concept testing
Text term definition - fast prototyping.

Blooms: Understand
Topic: Fast prototyping
9-283
365. The initial target market for X-1 products consisted of __________.
(p. 236
)
A.
B.
C.
D.
E.
seniors who want easy-to-use TV remotes with large buttons

athletes who want waterproof, sweatproof, and weatherproof audio equipment
audiophiles who want HD Sirius/XM Satellite radio receivers in their homes
consumers who want an inexpensive MP3 player like the old Sony Walkman
smartphone users who want a "plug-in" device that lets them listen to AM radio
on their smartphone
The initial target market for X-1 products consisted of athletes who wanted
waterproof, sweatproof, and weatherproof audio equipment.

Blooms: Understand
service.
Topic: Video Case 10: X-1
366. X-1 uses all of the following sources to generate new-product ideas EXCEPT:
(p. 236
)
A.
B.
C.
D.
E.
co-workers
Team X-1
employees
retail buyers
R&D lab IDEO
X-1 uses many sources to help generate new ideas. Employees and coworkers, for
example, can make suggestions at a "blue sky" meeting where, according to
Dirksing, "No idea is a bad idea." The company also uses open innovation to
generate new ideas by engaging retail buyers and soliciting ideas from a group of
volunteer athletes called Team X-1.

Blooms: Understand
service.
9-284
367. X-1 performs all of the following activities during the development stage of its
(p. 236 new-product process EXCEPT:
)
A.
B.
C.
D.
E.
conduct safety tests

conduct market tests
use 3D drawings
conduct functionality tests
develop prototypes
In the development stage of the process, X-1 actually turns the idea into a
prototype. The firm uses a 3D printer to check the aesthetics and the dimensions
and to see how the product will actually fit on a person. Once the dimensions are
determined, a functional prototype is needed. X-1 checks the outside dimensions
on a 3D printed prototype and sends the final 3D drawings to a factory to get a
functional prototype made. The initial prototypes are used to conduct safety tests
and the first functionality tests in a real world environment. Market tests are
conducted during the market testing stage of the new-product process, which
follows the development stage.

Blooms: Understand
service.
Short Answer Questions
9-285
368. Briefly define what is meant by a product. Explain the characteristics that would
(p. 213 define a product, good, service, and an idea. Give an example of each.
-214)
A product is a good, service, or idea consisting of a bundle of tangible and

intangible attributes that satisfies consumers and is received in exchange for
money or something else of value. A good has tangible attributes that a
consumer's five senses can perceive and intangible ones that embody more
abstract concepts, such as a warranty. Goods can also be divided into nondurable
goods, which are consumed in one or a few uses (a bottle of juice), and durable
goods, which usually last over many years (a mattress). Services are intangible
activities, such as a cruise, or benefits, such as convenience, that an organization
provides to satisfy consumer needs in exchange for money or something else of
value. An idea is a thought that leads to a product or action, such as getting
people to eat organically grown vegetables.

Blooms: Understand
Topic: Product terminology
369. Explain the difference between consumer products and business products. Why
(p. 215 are some products difficult to categorize as one or the other? Give an example of a
)
business product, a consumer product, and a product that is difficult to categorize.
Consumer products are products purchased by the ultimate consumer, whereas

business products are products that assist directly or indirectly in providing
products for resale. However, some products can be considered both consumer
and industrial products. Oil of Olay face moisturizer and Bass shoes are clearly
consumer products, whereas Cray computers and high-tension steel springs are
business products used in producing other products or services. Products like
tablet devices and office supplies can be classified as either, depending on their
use.

Blooms: Understand
classified.
Topic: Consumer versus business products
9-286
370. What are the four types of consumer products? How do they differ?
(p. 215
)
Convenience products, shopping products, specialty products, and unsought

products are the four types of consumer products. Convenience products are items
that the consumer purchases frequently, conveniently, and with a minimum of
shopping effort. Shopping products are the type in which the consumer compares
several alternatives on criteria such as price, quality, or style. Specialty products
are those items that a consumer makes a special effort to search out and buy.
Unsought products are those products that the consumer either does not know
about or knows about but does not initially want. Thus, these types of consumer
products differ in terms of the: (1) effort the consumer spends on the decision; (2)
attributes used in making the purchase decision; and (3) frequency of purchase.
Products generally fall into one or another of these categories; however, each
individual may classify a particular product in a different way from other
consumers. See Figure 9-2.

Blooms: Understand
classified.
Topic: Types of consumer products
371. Explain the differences in promotion between convenience, shopping, specialty,

(p. 215 and unsought products.
)
Promotion for convenience products would emphasize price, availability, and

awareness. Promotion for shopping products would emphasize differentiation from
competitors. Promotion for specialty products would emphasize brand and status.
Promotion for unsought products would strongly emphasize awareness of the
product itself. See Figure 9-2.

Blooms: Understand
classified.
9-287
372. Explain what an unsought product is and give some examples.

(p. 215
)
An unsought product is an item that the consumer either does not know about or
knows about but does not initially want. It does not necessary mean that the item
is rare or hard to come by. It could be something as simple as a thesaurus or as
complex as a burial insurance. In both cases, the need many not have been
anticipated, but both products satisfy a customer's need at the time it arises. See
Figure 9-2.

Blooms: Understand
classified.
373. The movie The Hunger Games opened originally in a select number of theaters
(p. 215 before opening nationwide. After its theater run, it was shown on pay-per-view
)
channels and then on premium movie channels. The movie also was made widely
available in video stores, via Netflix, and on DVD/Blue-ray. What type(s) of
consumer product is this movie? Explain your answer.
Student answers may vary, but all should realize that it does not stay in the same
category. Initially, it was a specialty product in that people who wanted to see it
had to search for it and seeing it first gave the viewer status. It remained a
specialty product when it was made available on pay-per-view television. People
had to look for it and request it by name. No substitutions were acceptable. By the
time it reached the video stores and Netflix, it was more of a convenience product
because it had wide availability, there were substitutes, and DVD/Blue-ray rentals
or purchases were relatively inexpensive. See Figure 9-2.

Blooms: Apply
classified.
9-288
374. Define derived demand and provide an example NOT included in the text.
(p. 216
)
A major characteristic of business products is that sales of items are often the
result of derived demand; that is, sales of industrial products frequently result (or
are derived) from the sale of consumer products. For example, if consumer
demand for Ford automobiles increases, this will increase the demand for
maintaining and servicing Fords.

Blooms: Apply
classified.
375. What categories of products are classified as business support products? Give an
(p. 216 example of each category.
)
Business support products include installations (buildings and fixed equipment),

accessory equipment (tools and office equipment), supplies (similar to consumer
convenience products, consisting of products like paper clips and brooms), and
industrial services (maintenance and repairs, and accounting or legal services),
which are purchased to assist in the production of other products and services.

Blooms: Understand
classified.
Topic: Business support products
376. Describe the three ways services can be classified.

(p. 216
)
Services can be classified three ways based on whether they are: (1) delivered by
people such as accountants and lawyers or by equipment such as vending
machines; (2) a profit or nonprofit organization; and (3) government agencies.

Blooms: Understand
classified.
9-289
377. Services incorporate the four I's of product marketing. How would each of these
(p. 217 four elements apply to a stock brokerage service?
)
The four unique elements of services are: (1) Intangibility - a brokerage service is
intangible because it cannot be seen, held, or touched before the purchase
decision. (2) Inconsistency - the quality of a brokerage service will vary because
different people, who vary in their job performance, provide this service. (3)
Inseparability - consumers cannot separate the service (stock purchase) from the
deliverer of the service (stockbroker) or the setting in which the service occurs. (4)
Inventory - brokerage services have little inventory carrying costs because the
brokers work on commission. If a broker does not make any sales, commission
costs will be lower.

Blooms: Apply
378. What does it mean when we say services are intangible. How do marketers of
(p. 217 services overcome the problems associated with intangibility?
)
The intangibility of services means that they cannot be held, touched, or seen
before the purchase decision. In contrast, before purchasing a traditional product,
a consumer can touch a box of laundry detergent, kick a tire of an automobile, or
sample a new breakfast cereal. A major marketing need for services is to make
them tangible or show the benefits of using the service. For example, Singapore
Airlines advertisements show a traveler enjoying comfortable seating, broadband
Internet connections, and other tangible benefits of a business class fare.

Blooms: Understand
9-290
379. What is the difference between intangibility and inseparability of services?

(p. 217
)
Intangibility refers to the fact that services cannot be held, touched, or seen before
the purchase decision. Services need to help consumers understand benefits of
use - such as attentive care in a nursing home or security from life insurance which cannot be easily displayed because they are intangible. Inseparability
means consumers cannot (and do not) separate the service from the deliverer of
the service or the setting in which the service occurs. So, a haircut is difficult to
separate from a barber and education is difficult to separate from a teacher,
college, or university.

Blooms: Understand
380. Characterize the difference between a product line and a product mix. Give an
(p. 219 example of each.
)
A product line is a group of products that are closely related because they satisfy a
distributed through the same type of outlets, or fall within a given price range. The
example given in the textbook is Crapola Granola, a line of granola containing
nuts, grains, fruit, maple syrup, and honey. Three items are currently in the line:
the original Crapola Granola, Number Two, and Red, White, and Blueberry. A
product mix is the number of product lines offered by an organization. Procter &
Gamble, for example, has a large product mix that includes product lines such as
beauty and grooming (Crest toothpaste and Gillette razors) and household care
(Downy fabric softener, Tide detergent), and Pampers diapers. Students may have
a number of other different examples.

Blooms: Understand
Topic: Product line versus product mix
9-291
381. Describe the different ways to define a product as new.

(p. 220
-221)
The term "new" in relation to a new product is difficult to define. There are several
ways to view the newness of a product. These include: (1) newness compared with
existing products (functionally different from existing offerings); (2) newness from
the consumer's perspective (the effects of a new product on consumption patterns
based on the degree of learning consumers require); (3) newness in legal terms
(the FTC defines new during the first six months after a product enters regular
distribution); and (4) newness from the company's perspective (a product line
extension, a significant jump in innovation, a brand extension, or a radical
invention).

Blooms: Understand
Topic: New product definitions
382. Compare continuous, dynamically continuous, and discontinuous innovations.

(p. 221 Provide the marketing strategy and an example of each.
)
With a continuous innovation, no new learning by consumers is required. The

marketing emphasis, therefore, is on generating awareness and obtaining
distribution, such as with a new Sony PlayStation game. Dynamically continuous
innovations disrupt consumers' normal routines but do not require totally new
learning. Marketing activities focus on stressing benefits and product differences to
the consumer, as with the Reebok Pump athletic shoe. A discontinuous innovation
requires consumers to establish entirely new consumption patterns. Marketing
these new products often requires a significant amount of time educating
consumers on how to use the product, such as cooking with a microwave oven or
operating a personal computer. See Figure 9-4.

Blooms: Understand
Topic: Types of innovations
9-292
383. What are the eight marketing reasons for new-product failures?
(p. 222
-223)

Blooms: Understand
service.
Thirsty Dog! Thirsty Cat! Ad
9-293
384. The Thirsty Dog! & Thirsty Cat! ad above shows an example of a product that
(p. 223 failed in the marketplace. Identify and describe the reason(s) for this unique item's
)
marketing-related product failure.
Thirsty Dog! & Thirsty Cat! failed because it had no economical assess to its
customers. The bottled water had to displace existing or similar products (if there
were any) on retailers' shelves at pet stores, grocery stores, etc. Moreover, it has
to pay both slotting and failure fees to gain and retain access to these shelves.
Unfortunately, Thirsty Dog! & Thirsty Cat! failed to generate enough sales to meet
retailers' requirements.

Blooms: Understand
service.
385. Identify and describe each stage in the new-product process in the correct order.
(p. 225
)
There are seven stages in the new-product process: (1) new-product strategy
development, which defines the role for a new-product in terms of the
organization's overall objectives; (2) idea generation, develops a pool of concepts
as candidates for new products generated by customer suggestions, supplier
suggestions, employee suggestions, basic R&D activity, competitive offerings, and
outside visionaries; (3) screening and evaluation, which involves conducting
internal and external evaluations of the new-product concepts (not actual
products) to eliminate those that do not warrant further effort and resources; (4)
business analysis, which specifies the features of the product and the marketing
strategy needed to commercialize it and making necessary financial projections
(sales, profit, market share, etc.); (5) development, which turns the concept into a
demonstrable prototype capable of being produced; (6) market testing, which
exposes actual products to prospective consumers under realistic purchase
conditions to see if they will buy; and (7) commercialization, which positions and
launches the new-product in full-scale production and sales. See Figure 9-5.

Blooms: Understand
9-294
386. What is idea generation in the new-product process? From where do forward
(p. 226 thinking marketers get their ideas?
)
Idea generation is the second stage of the new-product process that develops a
pool of concepts as candidates for new products, building upon the previous
stage's results. Many forward-looking companies have discovered their own
organization is not generating enough useful new-products ideas. This has led to
open innovation, in which an organization finds and executes creative new-product
ideas by developing strategic relationships with outside individuals and
organizations. New-product ideas are generated from employees, co-workers,
customers, suppliers, "crowdsourcing," basic R&D and professional R&D labs,
competitors' products, smaller, nontraditional firms, universities, and inventors.

Blooms: Understand
Topic: Idea generation
9-295
387. How could a firm use a test market in its new-product process?
(p. 230
-231)
Test marketing involves offering actual products for sale under realistic purchase
conditions on a limited basis to see if consumers will actually buy the product and
to try different ways of marketing it. A firm has three test marketing options: (1) In
a standard test market, a company develops a product and then attempts to sell it
through normal distribution channels in a number of test-market cities. To select a
test market, a firm must choose one or several cities (usually small and
demographically representative of the target market) for the test. (2) A controlled
test market involves contracting the entire test program to an outside service. The
service pays retailers for shelf space and can therefore guarantee a specified
percentage of the test product's potential distribution volume. Firms like IRI's
BehaviorScan assist marketers in selecting test market cities that must include
cable systems to deliver different ads to different homes and tracking systems like
those of to measure sales resulting from different advertising campaigns, grocery
scanners to measure sales based on other manipulations of selected marketing
mix variables such as price, and distribution. (3) To save time and money,
companies often turn to simulated (or laboratory) test markets (STM), a technique
that replicates a full-scale test market to a limited degree. STMs are often run in
shopping malls, where consumers are questioned to identify who uses the product
class being tested. Next, qualified participants are shown the product or the
product concept and are asked about usage, reasons for purchase, and important
product attributes. Then they see the company's ads for the test product along
with those of competitors. Finally, participants are given money to decide to buy or
not buy the firm's or the competitors' product from a real or simulated store
environment.

Blooms: Apply
388. Explain why NOT all products can use test markets.
(p. 231
)
Not all products can use test markets. Test marketing a service is very difficult
because it is intangible and consumers can't see what they are buying. For
example, how do you test market a new building for an art museum? Similarly, test
markets for expensive consumer products such as cars or costly industrial
products such as jet engines are impractical. For these products, reactions of
potential buyers to mockups or one-of-a-kind prototypes are all that is feasible.

Blooms: Understand
9-296
9-297

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What are some examples of Apple's commitment to new product development?

What are some examples of Apple's commitment to new product development?

What are the three test marketing options available to firms?

What are the three test marketing options available to firms?

Chapter 09

Developing New Products and Services

Multiple Choice Questions

A. a tangible good received in exchange for a person's time and effort.

7. A product is a good, service, or idea consisting of a bundle of tangible and intangible

only for legal tender (money).

8. A product is a good, service, or idea consisting of a(n) __________ that satisfy

A. promise or commitment exchanged between a seller and a buyer

13. Which of the following statements regarding goods is most accurate?

A. In order to be classified as a good, an item must appeal to all five senses.

comply with NAICS guidelines

15. Which of the following statements regarding goods is most accurate?

A. Nondurable goods would rely more on advertising than durable goods.

17. A nondurable good is defined as a(n)

20. Which of the following is the best example of a nondurable good?

21. Which of the following is the best example of a nondurable good?

22. Advertising is most important for which of the following products?

23. A durable good is defined as a(n)

25. Cars and appliances are classified as

27. Which of the following is considered a durable good?

28. Intangible activities or benefits that an organization provides to satisfy consumers'

29. Services refer to

A. the tangible activities or benefits that an organization provides to satisfy

services contribute about the same

34. Which of the following is considered a service?

35. Which of the following is considered a service?

36. Which of the following statements about services is most accurate?

39. Which of the following is considered an idea?

40. Consumer products refer to

A. products used in the production of other items.

44. Business products refer to

45. Business products are also referred to as __________.

46. Business products are also referred to as __________.

47. Industrial products are also referred to as __________ products.

A. amount of money the customer is willing and able to spend.

50. Convenience products refer to

52. With respect to distribution, convenience products are available

at relatively few outlets.

55. Which of the following is the best example of a convenience product?

57. Shopping products refer to items that the consumer

purchases frequently, conveniently, and with a minimum of effort.

60. With respect to distribution, shopping products are available

by special order from the manufacturer.

65. Specialty products refer to

A. products for which there are no close substitutes.

73. Unsought products are

offering consumer and trade sales promotions

77. Which of the following is most likely to be an example of an unsought product?

iPod MP3 player

89. The two main classifications of business products are

durable and nondurable products.

98. Among business products, support products include installations such as

99. Installations are support products that include items such as

copy paper, mechanical pencils, and light bulbs.

stationery, paper clips, and brooms.

106 Supplies are support products that include items such as