MKTG 448 Exam 2 - FLASHCARDS - Setting Product Policy

Question 1

True or false: a marketer cannot determine a price, design a promotion strategy, or create a distribution channel until the firm has a product to sell?

Answer 1

TRUE

Question 2

True or false: A product may be defined as either favorable or unfavorable?

Answer 2

TRUE

Question 3

True or false: A product may be a tangible good, a service, an idea, or any combination of these three?

Answer 3

TRUE

Question 4

Are services and ideas also products?

Answer 4

Yes

Question 5

What refers to the variety and number of product lines offered?

Answer 5

Product mix breadth

Question 6

What is the number of items in a given product line?

Answer 6

Product line depth

Question 7

What refers to the product’s design specifications?

Answer 7

Product item design

Question 8

True or false: Firms differ greatly in their product mix, or variety, of products offered?

Answer 8

TRUE

Question 9

What decisions are driven by how many different segments within the target market the firm chooses to serve?

Answer 9

Product depth

Question 10

What are the characteristics of a winning product?

Answer 10

• Superior to competitors’ products in terms of meeting users’ needs
• Solve a problem the customer has with a competitive product
• Feature good value for the money and excellent price and performance characteristics
• Provide excellent product quality, according to customers’ way of defining quality
• Offer features easily perceived as useful to the customer
• Offer benefits that are highly visible to the customer

Question 11

What are the three inputs to the new products process?

Answer 11

the right quality product, at the right time, and at the right cost

Question 12

What focuses on increasing sales of existing products into an existing market?

Answer 12

Market penetration

Question 13

What focuses on selling existing products to new markets?

Answer 13

Market development

Question 14

What focuses on introducing new products to an existing market?

Answer 14

Product development

Question 15

What focuses on entering a new market with new products?

Answer 15

Diversification

Question 16

What approach uses a growth-share matrix that evaluates a company’s SBUs in terms of market growth rate and relative market share?

Answer 16

BCG approach

Question 17

Once all the decisions have been made to determine the depth of a company’s product line, what does one need to consider?

Answer 17

They need to consider each product against what is known about the characteristics of winning products

Question 18

What is the Boston Consulting group’s product portfolio matrix (BCG matrix) designed to help with?

Answer 18

help with long-term strategic planning, to help a business consider growth opportunities by reviewing its portfolio of products to decide where to invest, to discontinue, or develop products

Question 19

True or false: the Boston Consulting group’s product portfolio matrix classifies each product by its present or forecast growth and relative market share?

Answer 19

TRUE

Question 20

______ products usually have large profits but need a lot of cash to finance rapid growth?

Answer 20

Star

Question 21

What is the best marketing tactic?

Answer 21

The best marketing tactic is to protect existing market share by investing earnings in product improvement, better distribution, more promotion, and production efficiency

Question 22

What is a product that usually generates more cash than it needs to maintain its market share?

Answer 22

Cash cow

Question 23

What is the basic strategy for a cash cow?

Answer 23

To maintain market dominance by being the price leader and making technological improvements in the product

Question 24

Does a cash cow have a dominant market share?

Answer 24

Yes

Question 25

True or false: Maintaining investments or harvesting strategies are often used with cash cows?

Answer 25

TRUE

Question 26

What shows rapid growth but poor profit margins?

Answer 26

Question mark

Question 27

What has a low market share in a high-growth industry?

Answer 27

Question mark

Question 28

What are the strategy options with a question mark?

Answer 28

The strategy options are to invest heavily to gain better market share, acquire competitors to get the necessary market share, or divest/sell the product

Question 29

A _______ has low growth potential and a small market share?

Answer 29

Dog

Question 30

True or false: most dogs eventually leave the marketplace?

Answer 30

TRUE

Question 31

What is the strategy option for dogs?

Answer 31

To divest

Question 32

Like the Boston Consulting Group matrix, does the GE-McKinsey matrix help you to determine how to allocate resources?

Answer 32

TRUE

Question 33

What is one difference between the Boston Consulting Group matrix and the GE-McKinsey matrix?

Answer 33

The GE-McKinsey matrix allows more flexibility

Question 34

True or false: radical innovations (new-to-the-world products), are generally characterized by a high degree of uncertainty?

Answer 34

TRUE

Question 35

True or false: When considering new products (as well as existing products), it is important for marketers to forecast demand?

Answer 35

TRUE

Question 36

What is a three step process for forecasting demand for new products?

Answer 36

1. Predicting the percentage of customers who will become aware of the product 2. Predicting the percentage of those who are aware of the product and who will try it 3. Predicting the percentage of those who try the product and will become repeat customers

Question 37

What is the formula to use for forecasting demand?

Answer 37

Y1 Sales(S) = MS x AW x PP x AU x P Y = Year S = sales (annual) MS = Market size (customer population) AW = Awareness (fraction) PP = Probability of purchase (surveyed) AU = Average number of units purchased P = Price

Question 38

True or false: products vary greatly in their longevity?

Answer 38

TRUE

Question 39

What are the five stages in the product life cycle?

Answer 39

1. Development 2. Introduction 3. Growth 4. Maturity 5. Decline

Question 40

In the introduction stage, are sales low?

Answer 40

Yes

Question 41

In the introduction stage, are profits negative?

Answer 41

Yes

Question 42

Who are the customers in the introduction stage?

Answer 42

Visionaries

Question 43

How are competitors in the introduction stage?

Answer 43

Few

Question 44

How are sales in the growth stage?

Answer 44

Fast growth

Question 45

Are profits rising in the growth stage?

Answer 45

Yes

Question 46

What are customers in the growth stage?

Answer 46

Early adopters

Question 47

How are competitors in the growth stage?

Answer 47

Growing

Question 48

How are sales in the maturity stage?

Answer 48

Peak sales

Question 49

How are profits in the maturity stage?

Answer 49

Flat

Question 50

What are customers in the maturity stage?

Answer 50

Majority

Question 51

How are competitors in the maturity stage?

Answer 51

Stable

Question 52

How are sales in the decline stage?

Answer 52

Declining

Question 53

How are profits in the decline stage?

Answer 53

Zero

Question 54

What are customers in the decline stage?

Answer 54

People who have not adopted the replacement yet

Question 55

How are competitors in the decline stage?

Answer 55

Competitors exit the market

Question 56

In the development stage, what do R&D expenditures vary based on?

Answer 56

the level of innovativeness, with product modifications being the least costly and radical innovations being the costliest.

Question 57

In the development stage, are product modifications expensive?

Answer 57

No

Question 58

In the development stage, are radical innovations expensive?

Answer 58

Yes

Question 59

True or false: in the introduction stage, marketing expenditures are high as awareness and knowledge of product features must be established in the target market?

Answer 59

TRUE

Question 60

During the introduction stage, is selective distribution generally engaged, with skimming or penetration pricing being used, based upon barriers to entry?

Answer 60

Yes

Question 61

During the growth stage, with awareness and trial achieved, what is the dominant driver of sales?

Answer 61

the product's performance

Question 62

True or false: in the growth stage, pricing is case specific?

Answer 62

TRUE

Question 63

True or false: during the growth stage, price may be increased as the perceived value increases, however, in other cases, price declines are enacted to reach a broader market?

Answer 63

TRUE

Question 64

What happens in the maturity stage?

Answer 64

All feasible market segments have been reached and distribution channels have been established

Question 65

In the maturity stage, are brand loyalty and differentiation central promotional aspects?

Answer 65

Yes

Question 66

How is pricing in the maturity stage?

Answer 66

Pricing becomes very competitive as market growth peaks and begins to decline