Marketing: An Introduction, 13e (Armstrong) Chapter 7 Products, Services, and Brands: Building Customer Value

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1 Marketing: An Introduction, 13e (Armstrong) Chapter 7 Products, Services, and Brands: Building Customer Value 1) refer to a form of product that consists of activities, benefits, or satisfactions offered for sale that are essentially intangible. A) Co-brands B) Line extensions C) Services D) Pure products E) Horizontal extensions Answer: C 2) Which of the following is a pure tangible good? A) shampoo B) a spa treatment C) financial advice D) a meal at a restaurant E) a medical check-up Answer: A 3) Howard Schultz, the founder of Starbucks, positioned his bistros as "a third place" between work and home where patrons could share and enjoy a cup of coffee with friends. This illustrates. A) an actual product B) a core customer value C) simple bundling D) an augmented product E) complex bundling Answer: B 1

2 4) Silkskin Cosmetics is advertising its newest line of eye makeup. Made from all-natural ingredients, the products are hypoallergenic. Silkskin is selling the products in specially designed tubes that make application easier. Which of the following is a core customer value for Silkskin's line of eye makeup? A) the natural ingredients B) the Silkskin brand C) the products' revolutionary packaging D) the hypoallergenic properties of the products E) the desire for having beautiful eyes Answer: E 5) Susan has been redecorating her new condo for a year. She is carefully selecting every item. Susan finds an oriental rug that matches her color scheme and décor perfectly and purchases it immediately without engaging in comparison shopping. This is an example of a(n). A) shopping product B) convenience product C) specialty product D) industrial product E) capital product Answer: C 6) products are consumer products and services that customers usually buy frequently, immediately, and with minimal comparison and buying effort. A) Shopping B) Specialty C) Capital D) Convenience E) Unsought Answer: D 2

3 7) Laundry detergent, candy, magazines, and fast food are purchased frequently by customers. They are examples of products. A) unsought B) shopping C) convenience D) specialty E) industrial Answer: C 8) Which statement about convenience products is most likely true? A) They are distributed exclusively in only one or a few outlets per market area. B) They are products that consumers rarely consider buying. C) Luxury cars and designer clothes are examples of convenience products. D) Consumers need to make special purchasing efforts to buy such products. E) They are bought by consumers frequently and with minimal comparison. Answer: E 9) Which of the following is an example of a convenience product? A) candy B) furniture C) life insurance D) automobile E) refrigerator Answer: A 10) products are less frequently purchased consumer products and services that customers compare carefully on suitability, quality, price, and style. A) Convenience B) Capital C) Unsought D) Shopping E) Secondary Answer: D 3

4 11) Major appliances, furniture, and clothing are typical examples of products. A) convenience B) shopping C) unsought D) specialty E) capital Answer: B 12) Which of the following is most likely a true statement about shopping products? A) Shopping products tend to be less expensive than convenience products. B) The existence of such products is generally unknown to consumers. C) Shopping products are purchased less frequently than convenience products. D) Consumers typically spend very little time comparing shopping products. E) A life insurance policy is an example of a shopping product. Answer: C 13) Which of the following is an example of a shopping product? A) toothpaste B) fast food C) laundry detergent D) television E) candy Answer: D 14) products are consumer products and services with unique characteristics or brand identifications for which a significant group of buyers is willing to make more effort than usual to purchase. A) Unsought B) Obsolete C) Intangible D) Convenience E) Specialty Answer: E 4

5 15) Specialty products are consumer products and services that customers generally buy. A) to conduct business B) frequently and immediately C) based on ready availability D) without making comparisons E) with minimal effort Answer: D 16) Consumer products that the buyer either does not know about or knows about but does not normally consider buying are referred to as products. A) convenience B) unsought C) specialty D) shopping E) industrial Answer: B 17) Which of the following is an example of an unsought product? A) furniture B) laundry detergent C) refrigerator D) toothpaste E) life insurance Answer: E 18) Which of the following statements is most likely true about unsought products? A) Unsought products are consumer products and services that customers buy frequently. B) Marketers use aggressive advertising to convince consumers to buy unsought products. C) Unsought products are typically purchased for further processing by industrial manufacturers. D) Compared to convenience products, unsought products are purchased more frequently. E) Unsought products offer many unique characteristics to status-conscious consumers. Answer: B 5

6 19) Which of the following is an industrial product categorized under materials and parts? A) factory B) cement C) generator D) drill presses E) coal Answer: B 20) Which of the following is an example of an industrial product grouped under capital items? A) factory B) cement C) crude petroleum D) coal E) paint Answer: A 21) Which of the following is an industrial product categorized under supplies and services? A) coal B) wheat C) lumber D) elevator E) generator Answer: A 22) Cement is an example of an industrial product that is categorized under. A) capital items B) augmented products C) supplies and services D) materials and parts E) shopping products Answer: D 6

7 23) Business advisory services such as legal or advertising are classified under which category of industrial products? A) supplies and services B) capital items C) raw materials D) materials and parts E) specialty products Answer: A 24) A&B's Smarter Planet campaign markets A&B as a company that provides innovative solutions that improve the world's IQ. This activity of A&B is an example of marketing. A) segmented B) vertical C) organization D) horizontal E) diversified Answer: C 25) The use of traditional business marketing concepts and tools to create behaviors that will benefit individual and societal well-being is called marketing. A) person B) green C) non-profit D) social E) traditional Answer: D AACSB: Ethical understanding and reasoning 26) A product is defined as anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need. Answer: TRUE 27) Products include only tangible objects. Answer: FALSE 7

8 28) The augmented product is considered the basic level among the three levels of product. Answer: FALSE 29) An augmented product is a product that is built around the core benefit and actual product by offering additional consumer services and benefits. Answer: TRUE 30) The distinction between a consumer product and an industrial product is based on the purpose for which the product is purchased. Answer: TRUE 31) Shopping products are purchased more frequently than convenience products. Answer: FALSE 32) Life insurance is an example of a convenience product. Answer: FALSE 33) When buying unsought products, consumers spend considerable time and effort in gathering information and making comparisons. Answer: FALSE 34) Consumers rarely compare shopping products before purchasing them. Answer: FALSE 35) Furniture is an example of a shopping product. Answer: TRUE 8

9 36) Consumers are generally willing to make more effort than usual to buy specialty products. Answer: TRUE 37) Unsought products are consumer products that the consumer either does not know about or knows about but does not normally consider buying. Answer: TRUE 38) Most major new innovations are unsought until consumers become aware of them through advertising. Answer: TRUE 39) Specialty products are primarily purchased for use in conducting a business. Answer: FALSE 40) A laptop that is purchased for a graphic design studio is considered an industrial product. Answer: TRUE 41) Corporate image marketing consists of activities undertaken to create, maintain, or change attitudes or behavior toward particular people. Answer: FALSE 9

10 42) What is a product? What are the three levels of a product? Answer: A product is anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need. Products include more than just tangible objects, such as cars, computers, or cell phones. Broadly defined, products also include services, events, persons, places, organizations, and ideas, or a mixture of these. The three product levels are core customer value, actual product, and augmented product. The most basic level is the core customer value, which addresses the question: What is the buyer really buying? When designing products, marketers must first define the core, problem-solving benefits or services that consumers seek. At the second level, product planners must turn the core benefit into an actual product. They need to develop product and service features, a design, a quality level, a brand name, and packaging. Finally, product planners must build an augmented product around the core benefit and actual product by offering additional consumer services and benefits. 43) Describe the various categories of consumer products with examples. Answer: Consumer products are products and services bought by final consumers for personal consumption. The various categories of consumer products are: a) Convenience products: These 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. b) Shopping products: These 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. c) Specialty products: These are consumer products and services with unique characteristics or brand identification 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. d) Unsought products: These are consumer products that the consumer either does not know about or knows about but does not normally consider buying. By their very nature, unsought products require a lot of advertising, personal selling, and other marketing efforts. Classic examples of known but unsought products and services are life insurance, preplanned funeral services, and blood donations to the Red Cross. 10

11 44) Describe the various categories of industrial products with examples. Answer: Industrial products are those products purchased for further processing or for use in conducting a business. The three groups of industrial products and services are materials and parts, capital items, and supplies and services. a) Materials and parts include raw materials as well as manufactured materials and parts. Raw materials consist of farm products (wheat, cotton) and natural products (lumber, crude petroleum, iron ore). Manufactured materials and parts consist of component materials (iron, yarn, cement, wires) and component parts (small motors, tires, castings). Most manufactured materials and parts are sold directly to industrial users. Price and service are the major marketing factors; branding and advertising tend to be less important. b) Capital items are industrial products that aid in the buyer's production or operations, including installations and accessory equipment. Installations consist of major purchases such as buildings (factories, offices) and fixed equipment (generators, drill presses, large computer systems, elevators). Accessory equipment includes portable factory equipment and tools (hand tools, lift trucks) and office equipment (computers, fax machines, desks). These types of equipment have shorter lives than do installations and simply aid in the production process. c) The final group of industrial products is supplies and services. Supplies 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. Business services include maintenance and repair services (window cleaning, computer repair) and business advisory services (legal, management consulting, advertising). Such services are usually supplied under contract. 45) What is organization marketing? Explain with the help of an example. Answer: Organizations often carry out activities to "sell" the organization itself. Organization marketing consists of activities undertaken to create, maintain, or change the attitudes and behavior of target consumers toward an organization. Both profit and not-for-profit organizations practice organization marketing. Business firms sponsor public relations or corporate image marketing campaigns to market themselves and polish their images. For example, GE's longrunning "Imagination at Work" campaign markets the industrial giant as a company whose imaginative products and technologies are making a difference in the world. Consider one recent award-winning TV spot, called "Childlike Imagination." The whimsical ad brings GE's products from jet engines and diesel locomotives to giant wind turbines and hospital diagnostics machines to life through the eyes of an amazed young girl whose mom works at GE. GE is "Building, powering, moving, and curing the world." says the company. "Not just imagining. Doing. GE works." 11

12 46) Many companies are taking a approach today, viewing quality as an investment and holding quality efforts accountable for bottom-line results. A) return-on-quality B) quality level C) performance quality D) conformance quality E) total quality management Answer: A 47) A company adding new features to a product will most likely assess each feature's value to customers relative to its. A) cost to the company B) performance in the market C) benefits to the company D) cost to the customers E) benefits to the supplier Answer: A 48) A is defined as a name, term, sign, symbol, or design, or a combination of these, that identifies the maker or seller of a product or service. A) prototype B) paradigm C) framework D) patent E) brand Answer: E 12

13 49) Which of the following terms best describes the process of designing and producing a container or wrapper for a product? A) labeling B) positioning C) licensing D) packaging E) branding Answer: D 50) In terms of packaging functions, Tiffany & Co.'s robin egg blue boxes. A) are primarily used to hold and protect products B) have created confusion in the marketplace C) create immediate consumer recognition D) deemphasize the importance of labels E) stifle brand awareness and recognition Answer: C 51) A product line is most likely too short if managers can. A) increase profits by dropping items B) decrease costs by adding items C) increase market share by dropping items D) decrease costs by dropping items E) increase profits by adding items Answer: E 52) A product line is most likely too long if managers can. A) decrease costs by adding items B) increase market share by adding items C) increase profits by dropping items D) decrease costs by dropping items E) increase profits by adding items Answer: C 13

14 53) Denta Clean's decision to add a whitening toothpaste to its current line of toothpastes is an example of product line. A) stretching B) widening C) strengthening D) mixing E) filling Answer: E 54) Lengthening a product line beyond its current range is referred to as product line. A) filling B) strengthening C) mixing D) stretching E) widening Answer: D 55) Marque, a high-end maker of designer watches, has started making inexpensive watches to take advantage of enormous growth rates in low-end market segments. Marque is most likely engaging in. A) franchising B) line filling C) two-way stretching D) upward stretching E) downward stretching Answer: E 14

15 56) Clorox sells five major product lines including cleaning, household, lifestyle, professional, and international. Together the product lines make up Clorox's. A) product length B) product mix C) product depth D) product consistency E) product assemblage Answer: B 57) Product mix length refers to the. A) number of versions offered for each product in the line B) ways in which the various product lines are related C) number of different product lines the company carries D) total number of items a company carries within its product lines E) total market share captured by the entire product line Answer: D 58) Product mix width refers to the. A) number of versions offered for each product in the line B) ways in which the various product lines are related C) number of different product lines the company carries D) total number of items a company carries within its product lines E) total market share captured by the entire product line Answer: C 59) Product mix depth refers to the. A) number of versions offered for each product in the line B) ways in which the various product lines are related C) number of different product lines the company carries D) total number of items a company carries within its product lines E) total market share captured by the entire product line Answer: A 15

16 60) Consistency of a product mix refers to the. A) number of versions offered for each product in the line B) ways in which the various product lines are related C) number of different product lines the company carries D) total number of items a company carries within its product lines E) total market share captured by the entire product line Answer: B 61) Total quality management is an approach in which all of the company's people are involved in constantly improving the quality of products, services, and business processes. Answer: TRUE 62) Branding has become so strong today that hardly anything goes unbranded. Answer: TRUE 63) Support services are an important part of a customer's overall brand experience. Answer: TRUE 64) Product line filling occurs when a company lengthens its product line beyond its current range. Answer: FALSE 16

17 65) What are the two dimensions of product quality? Answer: Product quality is one of the marketer's major positioning tools. Quality affects product or service performance; thus, it is closely linked to customer value and satisfaction. Product quality has two dimensions: level and consistency. In developing a product, the marketer must first choose a quality level that will support the product's positioning. Here, product quality means performance quality the product's ability to perform its functions. Beyond quality level, high quality also can mean high levels of quality consistency. Here, product quality means conformance quality freedom from defects and consistency in delivering a targeted level of performance. 66) What is a brand? What are the advantages of branding? Answer: A brand is a name, term, sign, symbol, or design, or a combination of these, that identifies the maker or seller of a product or service. Consumers view a brand as an important part of a product, and branding can add value to a consumer's purchase. Customers attach meanings to brands and develop brand relationships. As a result, brands have meaning well beyond a product's physical attributes. Branding helps buyers in many ways. Brand names help consumers identify products that might benefit them. Brands also say something about product quality and consistency buyers who always buy the same brand know that they will get the same features, benefits, and quality each time they buy. Branding also gives the seller several advantages. The seller's brand name and trademark provide legal protection for unique product features that otherwise might be copied by competitors. Branding helps the seller to segment markets. 17

18 67) What role does packaging play in the marketing of a product? How can packaging lead to an increase or decrease of sales? Provide examples to illustrate your response. Answer: Packaging involves designing and producing the container or wrapper for a product. Traditionally, the primary function of the package was to hold and protect the product. In recent times, however, packaging has become an important marketing tool as well. Increased competition and clutter on retail store shelves means that packages must now perform many sales tasks from attracting buyers, to communicating brand positioning, to closing the sale. Companies are realizing the power of good packaging to create immediate consumer recognition of a brand. For example, Puma replaced the traditional shoebox with a functional and environmentally friendly bag. Poorly designed packages, such as those that involve wire twist ties, can cause headaches for consumers and lost sales for the company. For example, an average supermarket stocks about 44,000 items; the average Walmart supercenter carries 142,000 items. The typical shopper makes three out of four purchase decisions in stores and passes by some 300 items per minute. In this highly competitive environment, the package may be the seller's best and last chance to influence buyers. So the package itself has become an important promotional medium. 68) What are the functions of product labels? What marketing role do labels play? Answer: Labels range from simple tags attached to products to complex graphics that are part of the packaging. They perform several functions. At the very least, the label identifies the product or brand. 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, support its positioning, and connect with customers. For many companies, labels have become an important element in broader marketing campaigns. Labels and brand logos can support the brand's positioning and add personality to the brand. 18

19 69) What are the two ways in which a company can extend its product line? Answer: A product line is 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. A company can expand its product line in two ways: by line filling or line stretching. Product line filling involves adding more items within the present range of the line. There are several reasons for product line filling: reaching for extra profits, satisfying dealers, using excess capacity, being the leading full-line company, and plugging holes to keep out competitors. However, line filling is overdone if it results in cannibalization and customer confusion. The company should ensure that new items are noticeably different from existing ones. Product line stretching occurs when a company lengthens its product line beyond its current range. The company can stretch its line downward, upward, or both ways. Companies located at the upper end of the market can stretch their lines downward. Companies can also stretch their product lines upward. Sometimes, companies stretch upward to add prestige to their current products. 70) What is a product mix? What are the four dimensions of a product mix? Answer: A product mix (or product portfolio) consists of all the product lines and items that a particular seller offers for sale. A company's product mix has four important dimensions: width, length, depth, and consistency. Product mix width refers to the number of different product lines the company carries. Product mix length refers to the total number of items a company carries within its product lines. Product mix depth refers to the number of versions offered for each product in the line. The consistency of the product mix refers to how closely related the various product lines are in end use, production requirements, distribution channels, or some other aspect. 71) Which of the following is most likely a true statement about services? A) Services can be stored for later sale or use. B) Service quality is not dependent on the provider. C) Services can be easily separated from their providers. D) Service industries vary greatly. E) Demand fluctuation has little to no impact on service providers. Answer: D LO: 7-3: Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require. 19

20 72) A doctor performing hip surgery on a patient illustrates how a service can be produced and consumed simultaneously. This is an example of which service characteristic? A) tangibility B) intangibility C) perishability D) variability E) inseparability Answer: E LO: 7-3: Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require. 73) Service variability means that. A) the evaluation of services is subjective and changes from customer to customer B) service quality depends on when, where, and how they are provided C) services cannot be stored for later sale or use D) services cannot be seen, tasted, felt, heard, or smelled before they are bought E) services can be separated from their providers Answer: B LO: 7-3: Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require. 74) World Skies' Flight 167 takes off at 50 percent capacity. The unoccupied seats cannot be stored for later sale or use. This is an example of which service characteristic? A) tangibility B) intangibility C) perishability D) variability E) inseparability Answer: C LO: 7-3: Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require. 75) Which link in the service profit chain emphasizes superior employee selection and training? A) healthy service profits and growth B) satisfied and loyal customers C) greater service value D) satisfied and productive service employees E) internal service quality Answer: E LO: 7-3: Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require. 20

21 76) Orienting and motivating customer-contact employees and supporting service people to work as a team to provide customer satisfaction is known as marketing. A) social B) organizational C) differentiated D) internal E) interactive Answer: D LO: 7-3: Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require. 77) Zappos recognizes the importance of the buyer-seller interaction. They only hire people with an innate "passion to serve" and they go through four weeks of customer loyalty training. This is referred to as marketing. A) horizontal B) interactive C) advocacy D) social E) internal Answer: B LO: 7-3: Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require. 78) Service variability means that the quality of services does not depend on who provides them. Answer: FALSE LO: 7-3: Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require. 79) Orienting and motivating customer-contact employees to work as a team to provide customer satisfaction is known as social marketing. Answer: FALSE LO: 7-3: Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require. AACSB: Interpersonal relations and teamwork 21

22 80) Explain, with examples, the four characteristics of services that a company must consider when designing marketing programs. Answer: A company must consider four special service characteristics when designing marketing programs: intangibility, inseparability, variability, and perishability. Service intangibility 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. To reduce uncertainty, buyers look for signals of service quality. They draw conclusions about quality from the place, people, price, equipment, and communications that they can see. Service inseparability means that services cannot be separated from their providers, whether the providers are people or machines. If a service employee provides the service, then the employee becomes a part of the service. And customers don't just buy and use a service; they play an active role in its delivery. Customer coproduction makes provider-customer interaction a special feature of services marketing. Both the provider and the customer affect the service outcome. Service variability means that the quality of services depends on who provides them as well as when, where, and how they are provided. For example, some hotels say, Marriott have reputations for providing better service than others. Still, within a given Marriott hotel, one registration-counter employee may be cheerful and efficient, whereas another standing just a few feet away may be unpleasant and slow. Service perishability 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. The perishability of services is not a problem when demand is steady. However, when demand fluctuates, service firms often have difficult problems. LO: 7-3: Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require. 81) Brands vary in the amount of power and value they hold in the marketplace. Iconic brands like Apple, Google, and Harley-Davidson have achieved substantial brand. A) capital B) personality C) perception D) esteem E) equity Answer: E 22

23 82) Flores Fashions promotes its clothing by emphasizing the durability and quality of the fabrics it uses. The company has positioned its brand based on. A) product benefits B) product attributes C) beliefs and values D) market share E) brand loyalty Answer: B 83) Which of the following is a desirable quality for a brand name? A) The name should be unique and difficult to pronounce to ensure legal protection. B) The name should be a common word rather than a distinctive one. C) The name should not suggest anything about the product quality. D) The name should translate easily into foreign languages. E) The name should not be extendable. Answer: D 84) Xenon, a leading consumer-electronics manufacturing company, markets its products under the company's own brand name. In this case, Xenon has sponsored its products by promoting them as brands. A) licensed B) private C) store D) national E) distributor Answer: D 23

24 85) Fred's, a national supermarket chain, sells its own brand of items across all categories. Such items are considered brands. A) national B) manufacturer's C) private D) extended E) licensed Answer: C 86) Which of the following is an example of licensing? A) DMX, an electronics manufacturer, acquires Z-Elex, a start-up firm, and sells all Z-Elex's products under the DMX brand name. B) Berry, a fruit juice company, uses a well-known cartoon character to promote the company's line of children's products and pays the creator of the cartoon character a fee. C) XLC, a sporting goods firm, sponsors a number of top athletes in various sports and also hosts the XLC Sporting Achievement Awards. D) ZetaBike, a bicycle manufacturer, teams up with VitaWater, a sports drink producer, to introduce ZetaVita, an energy drink. E) Mason's, a retail chain, sells a number of different products from different manufacturers under the brand name Mason's. Answer: B 87) occurs when two established brand names of different companies are used on the same product. A) Licensing B) Co-branding C) Private branding D) Franchising E) Brand positioning Answer: B 24

25 88) BerryBerry is a fruit juice company that has traditionally sold three varieties of mixed-fruit juices: DazzleBerry, AquaBerry, and GloBerry. The company wants to add more products to its product line. In this case, which of the following is an example of co-branding by BerryBerry? A) The company introduces BerryBliss, a dried berry snack mix for kids. B) BerryBerry adds a new fruit juice flavor, TangyBerry. C) The company introduces a line of flavored milk and yogurt under a new brand name. D) The company creates a new brand, NatureFresh, for a line of cosmetics based on fruit flavors and colors. E) BerryBerry teams up with SFX, a sporting goods company, to introduce a line of energy bars called BerryBerry SFX. Answer: E 89) occurs when a company uses its existing brand name for new forms, colors, sizes, ingredients, or flavors of an existing product category. A) Line extension B) Co-branding C) Private labeling D) Brand extension E) Clustered branding Answer: A 90) Non-Dairy Delight, a manufacturer of soy milk, attracts new customers by adding cinnamon, pumpkin, and vanilla flavors to its traditional product. In this case, the company has developed its brand with. A) brand extensions B) line extensions C) multibranding D) new product lines E) co-branding Answer: B 25

26 91) BerryBerry is a fruit juice company that has traditionally sold three varieties of mixed-fruit juices: DazzleBerry, AquaBerry, and GloBerry. The company wants to add more products to its product line. Which of the following is an example of brand extension for BerryBerry? A) The company introduces BerryBliss, a dried berry snack mix for kids. B) BerryBerry adds a new fruit juice flavor, TangyBerry. C) The company introduces a line of flavored milk and yogurt under a new brand name. D) The company creates a new brand, NatureFresh, for a line of cosmetics based on fruit flavors and colors. E) BerryBerry teams up with SFX, a sporting goods company, to introduce a line of energy bars called BerryBerry SFX. Answer: A 92) involves using an existing brand name for a new product category. A) Line extension B) Co-branding C) New branding D) Brand extension E) Multibranding Answer: D 93) Sportware, a leading shoe manufacturer, markets sneakers under the brand name "Athletix" and dress shoes under the brand name "Cameo" in order to target the two different market segments. What branding strategy is most likely being used by Sportware? A) brand extensions B) line extensions C) multibrands D) new brands E) co-brands Answer: C 94) When consumers react more favorably to a brand than to a generic or unbranded version of the same product, the brand is said to have positive brand equity. Answer: TRUE 26

27 95) Line extensions occur when a company extends existing brand names to new or modified products in a new category. Answer: FALSE 96) A brand extension gives a new product instant recognition and faster acceptance. Answer: TRUE 97) What is brand equity? Answer: Brand equity is the differential effect that knowing the brand name has on customer response to the product and its marketing. It's a measure of the brand's ability to capture consumer preference and loyalty. A brand has positive brand equity when consumers react more favorably to it than to a generic or unbranded version of the same product. It has negative brand equity if consumers react less favorably than to an unbranded version. 98) Discuss the concept of brand positioning. Answer: Marketers need to position their brands clearly in target customers' minds. At the lowest level, they can position the brand on product attributes. A brand can be better positioned by associating its name with a desirable benefit. The strongest brands go beyond attribute or benefit positioning. They are positioned on strong beliefs and values, engaging customers on a deep, emotional level. Successful brands engage customers on a deep, emotional level. When positioning a brand, the marketer should establish a mission for the brand and a vision of what the brand must be and do. A brand is the company's promise to deliver a specific set of features, benefits, services, and experiences consistently to buyers. The brand promise must be simple and honest. 27

28 99) What is co-branding? What are the advantages of co-branding? Provide an example to illustrate your answer. Answer: (Answers will vary.) Co-branding occurs when two established brand names of different companies are used on the same product. Co-branding offers many advantages. Because each brand dominates in a different category, the combined brands create broader consumer appeal and greater brand equity. Cobranding can take advantage of the complementary strengths of two brands. For example, Benjamin Moore and Pottery Barn joined forces to create a special collection of Benjamin Moore paint colors designed to perfectly coordinate with Pottery Barn's unique furnishings and accents. Taco Bell and Doritos teamed up to create the Doritos Locos Taco. Taco Bell sold more than 100 million of the tacos in just the first 10 weeks and quickly added Cool Ranch and Fiery versions and has since sold over a billion. Co-branding also allows a company to expand its existing brand into a category it might otherwise have difficulty entering alone. For example, Nike and Apple co-branded the Nike+iPod Sport Kit, which lets runners link their Nike shoes with their ipods to track and enhance running performance in real time. 100) Differentiate between line extensions and brand extensions. Provide an example of each. Answer: Line extensions occur when a company extends existing brand names to new forms, colors, sizes, ingredients, or flavors of an existing product category. For example, over the years, KFC has extended its "finger lickin' good" chicken lineup well beyond original recipe, bone-in Kentucky fried chicken. It now offers grilled chicken, boneless fried chicken, chicken tenders, hot wings, chicken bites, and, most recently, KFC Go Cups chicken and potato wedges in a handy car-cup holder that lets customers snack on the go. A brand extension extends a current brand name to new or modified products in a new category. For example, Nest the maker of stylish, connected, learning thermostats that can be controlled remotely from a phone extended its line with an equally smart and stylish Nest Protect home smoke and carbon monoxide alarm. It's now extending the Nest line to include "Works with Nest," applications developed with a variety of partners that let its smart devices interact with and control everything from video monitoring devices, smart door locks, and home lighting systems to home appliances and fitness tracking bands. 28