Chapter 7: Products, Services, and Brands: Building Customer Value

Question 1

Marketing mix:

Answer 1

the tactical tools that marketers use to implement their strategies, engage customers, and deliver superior customer value.

Question 2

Product

Answer 2

anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need.

include more than just tangible objects, such as cars, clothing, or mobile phones. Broadly defined, products also include services, events, persons, places, organizations, and ideas or a mixture of these.

Question 3

Services

Answer 3

are a form of product that consists of activities, benefits, or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything

Examples: banking, hotel, airline travel, retail, wireless communication, and home-repair services.

Question 4

pure tangible good

Answer 4

such as soap, toothpaste, or salt; no services accompany the product

Question 5

pure services

Answer 5

the market offer consists primarily of a service. Examples include a doctor’s exam and financial services.

Question 6

Product planners need to think about products and services on three levels

Answer 6

The most basic level is the core customer value
Second is the actual product
Third is the augmented product

Question 7

core customer value

Answer 7

Which addresses the question: What is the buyer really buying?

When designing products, marketers must first define the core, problem-solving benefits, services, or experiences that consumers seek

Question 8

actual product

Answer 8

They need to develop product and service features, a design, a quality level, a brand name, and packaging

Question 9

augmented product

Answer 9

product planners must build an augmented product around the core benefit and actual product by offering additional consumer services and benefits

Question 10

Products and services fall into two broad classes based on the types of consumers who use them:

Answer 10

consumer products and industrial products

Broadly defined, products also include other marketable entities such as experiences, organizations, persons, places, and ideas.

Question 11

Consumer products

Answer 11

Are products and services bought by final consumers for personal consumption

Question 12

Consumer products include

Answer 12

convenience products, shopping products, specialty products, and unsought products.

Question 13

Convenience products

Answer 13

are consumer products and services that customers usually buy frequently, immediately, and with minimal comparison and buying effort

Examples include laundry detergent, candy, magazines, and fast food

Question 14

Shopping products

Answer 14

are less frequently purchased consumer products and services that customers compare carefully on suitability, quality, price, and style.

Examples include furniture, clothing, major appliances, and hotel services.

Question 15

Specialty products

Answer 15

are consumer products and services with unique characteristics or brand identifications for which a significant group of buyers is willing to make a special purchase effort

Examples include specific brands of cars, high-priced photography equipment, designer clothes, gourmet foods, and the services of medical or legal specialists

Question 16

Unsought products

Answer 16

are consumer products that a consumer either does not know about or knows about but does not normally consider buying.

Most major new innovations are unsought until consumers become aware of them through marketing

Question 17

Industrial products

Answer 17

are those products purchased for further processing or for use in conducting a business

Question 18

the distinction between a consumer product and an industrial product

Answer 18

is based on the purpose for which the product is purchased.

If a consumer buys a lawn mower for use around home, the lawn mower is a consumer product. If the same consumer buys the same lawn mower for use in a landscaping business, the lawn mower is an industrial product.

Question 19

The three groups of industrial products and services are

Answer 19

1) materials and parts
2) Capital items
3) Supplies and services

Question 20

Materials and parts

Answer 20

include raw materials as well as manufactured materials and parts.

Question 21

Raw materials

Answer 21

consist of farm products (wheat, cotton, livestock, fruits, vegetables)

Question 22

natural products

Answer 22

(fish, lumber, crude petroleum, iron ore)

Question 23

Manufactured materials and parts

Answer 23

consist of component materials (iron, yarn, cement, wires)

Question 24

component parts

Answer 24

(small motors, tires, castings)

Question 25

Capital items

Answer 25

are industrial products that aid in the buyer’s production or operations, including installations and accessory equipment

Question 26

Installations

Answer 26

consist of major purchases such as buildings (factories, offices) and fixed equipment (generators, drill presses, large computer systems, elevators).

Question 27

Accessory equipment

Answer 27

includes portable factory equipment and tools (hand tools, lift trucks) and office equipment (computers, fax machines, desks). Have shorter lives

Question 28

supplies

Answer 28

include operating supplies (lubricants, coal, paper, pencils) and repair and maintenance items (paint, nails, brooms). Supplies are the convenience products of the industrial field because they are usually purchased with a minimum of effort or comparison.

Question 29

In addition to tangible products and services, marketers have broadened the concept of a product to include other market offerings:

Answer 29

organizations, persons, places, and ideas.

Question 30

Organizations

Answer 30

often carry out activities to “sell” the organization itself.

Question 31

Organization marketing

Answer 31

consists of activities undertaken to create, maintain, or change the attitudes and behaviour of target consumers toward an organization. Both profit and not-for-profit organizations practise organization marketing.

Question 32

Person marketing

Answer 32

consists of activities undertaken to create, maintain, or change attitudes or behaviour toward particular people

Question 33

Place marketing

Answer 33

involves activities undertaken to create, maintain, or change attitudes or behaviour toward particular places

Question 34

Social marketing

Answer 34

using traditional business marketing concepts and tools to encourage behaviours that will create individual and societal well-being.

Question 35

Marketers make product and service decisions at three levels:

Answer 35

individual product decisions, product line decisions, and product mix decisions

Question 36

Individual Product and Service Decisions | Product decisions

Answer 36

product and service attributes, branding, packaging, labelling and logos, and product support services.

Question 37

Product and Service Attributes

Answer 37

benefits are communicated and delivered by product attributes such as quality, features, and style and design.

Question 38

Product Quality

Answer 38

Quality affects product or service performance; thus, it is closely linked to customer value and satisfaction.

Question 39

define quality

Answer 39

in terms of creating customer value and satisfaction

Question 40

Total quality management (TQM)

Answer 40

is an approach in which all the company’s people are involved in constantly improving the quality of products, services, and business processes

Question 41

Product quality has two dimensions:

Answer 41

level and consistency

Question 42

Style

Answer 42

simply describes the appearance of a product

Question 43

design

Answer 43

it goes to the very heart of a product. Good design contributes to a product’s usefulness as well as to its looks.

Question 44

A brand

Answer 44

is a name, term, sign, symbol, or design or a combination of these that identifies the maker or seller of a product or service.

Question 45

Packaging

Answer 45

involves designing and producing the container or wrapper for a product

Question 46

Labelling and Logos

Answer 46

range from simple tags attached to products to complex graphics that are part of the packaging. At the very least, the label identifies the product or brand, such as the name Sunkist stamped on oranges. The label might also describe several things about the product—who made it, where it was made, when it was made, its contents, how it is to be used, and how to use it safely. Finally, the label might help to promote the brand and engage customers.

Question 47

A product line

Answer 47

a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges.

Question 48

product line length

Answer 48

the number of items in the product line. The line is too short if the manager can increase profits by adding items; the line is too long if the manager can increase profits by dropping items

Question 49

A company can expand its product line in two ways:

Answer 49

by line filling or line stretching.

Question 50

Product line filling

Answer 50

involves adding more items within the present range of the line

Question 51

There are several reasons for product line filling:

Answer 51

reaching for extra profits, satisfying dealers, using excess capacity, being the leading full-line company, and plugging holes to keep out competitors.

Question 52

Product line stretching

Answer 52

occurs when a company lengthens its product line beyond its current range. The company can stretch its line downward, upward, or both ways.

Question 53

product mix (or product portfolio)

Answer 53

consists of all the product lines and items that a particular seller offers for sale

Question 54

A company’s product mix has four important dimensions:

Answer 54

width, length, depth, and consistency

Question 55

Product mix width

Answer 55

refers to the number of different product lines the company carries

Question 56

Product mix length

Answer 56

refers to the total number of items a company carries within its product lines.

Question 57

Product line depth

Answer 57

refers to the number of versions offered of each product in the line.

Question 58

the consistency of the product mix

Answer 58

refers to how closely related the various product lines are in end use, production requirements, distribution channels, or some other way

Question 59

Governments

Answer 59

offer services through courts, employment services, hospitals, military services, police and fire departments, the postal service, and schools

Question 60

Private not-for-profit organizations

Answer 60

offer services through museums, charities, churches, colleges, foundations, and hospitals

Question 61

A company must consider four special service characteristics when designing marketing programs:

Answer 61

intangibility, inseparability, variability, and perishability

Question 62

Service intangibility

Answer 62

means that services cannot be seen, tasted, felt, heard, or smelled before they are bought For example, people undergoing cosmetic surgery cannot see the result before the purchase

Question 63

Service inseparability

Answer 63

means that services cannot be separated from their providers, whether the providers are people or machines

Question 64

Service variability

Answer 64

means that the quality of services depends on who provides them as well as when, where, and how they are provided.

Question 65

Service perishability

Answer 65

means that services cannot be stored for later sale or use. Some doctors charge patients for missed appointments because the service value existed only at that point and disappeared when the patient did not show up.

Question 66

The Service Profit Chain

Answer 66

which links service firm profits with employee and customer satisfaction

Question 67

The Service Profit Chain consists of five links:

Answer 67

1) INTERNAL SERVICE QUALITY 2) SATISFIED AND PRODUCTIVE SERVICE EMPLOYEES 3) GREATER SERVICE VALUE 4) SATISFIED AND LOYAL CUSTOMERS 5) HEALTHY SERVICE PROFITS AND GROWTH

Question 68

1) INTERNAL SERVICE QUALITY

Answer 68

Superior employee selection and training, a quality work environment, and strong support for those dealing with customers, which results in...

Question 69

2) SATISFIED AND PRODUCTIVE SERVICE EMPLOYEES

Answer 69

More satisfied, loyal, and hardworking employees, which results in...

Question 70

3) GREATER SERVICE VALUE

Answer 70

More effective and efficient customer value creation, engagement, and service delivery, which results in . . .

Question 71

4) SATISFIED AND LOYAL CUSTOMERS

Answer 71

Satisfied customers who remain loyal, make repeat purchases, and refer other customers, which results in . . .

Question 72

5) HEALTHY SERVICE PROFITS AND GROWTH

Answer 72

Superior service firm performance.

Question 73

Internal marketing

Answer 73

means that the service firm must orient and motivate its customer-contact employees and supporting service people to work as a team to provide customer satisfaction.

Question 74

Interactive marketing

Answer 74

means that service quality depends heavily on the quality of the buyer–seller interaction during the service encounter.

Question 75

Customer retention is perhaps the best measure of quality

Answer 75

a service firm’s ability to hang onto its customers depends on how consistently it delivers value to them.

Question 76

Brand equity

Answer 76

is the differential effect that knowing the brand name has on customer response to the product and its marketing.

Question 77

Brand value

Answer 77

is the total financial value of a brand.

Question 78

customer equity

Answer 78

the value of customer relationships that the brand creates

Question 79

major brand strategy decisions involve

Answer 79

brand positioning, brand name selection, brand sponsorship, and brand development.

Question 80

Brand Positioning

Answer 80

Marketers need to position their brands clearly in target customers’ minds.

Question 81

They can position brands at any of three levels

Answer 81

1) At the lowest level, they can position the brand on product attributes 2) A brand can be better positioned by associating its name with a desirable benefit 3) They are positioned on strong beliefs and values, engaging customers on a deep, emotional level.

Question 82

Desirable qualities for a brand name include the following:

Answer 82

(1) It should suggest something about the product’s benefits and qualities: Beautyrest, Slimfast, Facebook, Airbnb. (2) It should be easy to pronounce, recognize, and remember: iPad, Tide, Jelly Belly, Twitter, JetBlue. (3) The brand name should be distinctive: Panera, Swiffer, Zappos, Nest. (4) It should be extendable—Amazon.com began as an online bookseller but chose a name that would allow expansion into other categories. (5) The name should translate easily into foreign languages: Coca-Cola translates in Chinese to “Ke Kou Ke Le,” which means “tasty fun.” (6) It should be capable of registration and legal protection.

Question 83

A manufacturer has four sponsorship options.

Answer 83

1) national brand (or manufacturer’s brand), 2) private brand (also called a store brand). 3) licensed brands 4) two companies can join forces and co-brand a product

Question 84

store brands (or private brands

Answer 84

Brand created and owned by a reseller of a product / service

Question 85

Co-branding

Answer 85

occurs when two established brand names of different companies are used on the same product

Question 86

A company has four choices when it comes to developing brands

Answer 86

It can introduce line extensions, brand extensions, multibrands, or new brands.

Question 87

Line extensions

Answer 87

occur when a company extends existing brand names to new forms, colours, sizes, ingredients, or flavours of an existing product category.

Question 88

A brand extension

Answer 88

extends a current brand name to new or modified products in a new category