PRODUCT/SERVICE MANAGEMENT

1. PRODUCT/SERVICE MANAGEMENT

2. 3.01 • 1. Which of the following is a way that a buisness can extend the life cycle of an establishes product? A. By promoting the product to current users B. By finding new uses for the product C. By restricting distribution D. By attracting customers who are innovators

3. Answer • B, By finding new uses for the product. Establishes products are in the maturity stage, and one way marketers can extend their life cycles is by finding new ways that the products can be used by current consumers. Continuing to promote the same product to current users will not extend its life cycle. Consumers who are innovators are attracted to products in the introductory stage, not the maturity stage. Restricting distribution would shorten rather than lengthen the products life cycle.

4. 3.01 • 2. When a company uses its product wrapping to promote the preservation of an endangered animal species, its engaging in an ethical practice called.. A. political lobbying B. environmental labeling C.cause packaging D. provocative branding

5. 3.01 • 3. A business is behaving unethically if its product’s label contains.. A. nutritional values B. recyclable material C. mandatory requirements D. misleading information

6. 3.01 • 4. Which of the following technological tools helps a business's employees simultaneously access the same information about the business's products? A. Memory Card B. Micro-Portal C. Intranet D. Generator

7. Answer • C, Intranet. Intranet refers to a business's network of computers that are linked so that the employees can retrieve the same business info. For example, a software program that tracks inventory may be available for the sales department, the shipping department, and the purchasing department to review. A business that uses an Intranet system to manage product maximizes its communications and response time. Generators and memory cards do not allow a business's employees to simultaneously access the product info. Micro-Portal is a fictitious term.

8. 3.01 • 5. Five years aftera new product has been introduced, sales begin to level off because customers are purchasing the competitors brand. What strategy would be most appropiate to use in this situation? A. Take the product off the market B. Do nothing, fluctuations in sales are common C. Modify the product to renew customer intrest D. Triple the advertising budget for the product

9. Answer • C, Modify the product to renew customer interest. Modifying the product allows a company an opportunity to increase sales without the risk of introducing an entirely new product. Also, such modifications could include and technological advances that have been made since the product’s introduction. The product should remain on the market, its sales have leveled off- not stopped. If the company does nothing, sales may continue to decline. Tripling the advertising budget does not guarantee increased sales, especially if there is something unsatisfactory about the existing product.

10. 3.01 • 6. Which of the following is an unethical situation in product/service management? A. Vincent Electronics discontinues production of a slow-moving solar calculator. B. Travis Manufacturing uses recycled materials for its product packaging C. Donna’s dress boutique obtains deep discounts from a new clothing designer D. The Simpson company embellishes the information the it places on its product labels

11. Answer • D, The Simpson Company embellishes the info that it places on its product labels. When a company embellishes info on product labels, it is exaggerating the attributes or performance of the product. This is unethical behavior because the company is misleading customers.

12. 3.01 • 7. What is one way businesses use computer technology to obtain info to improve their product/service mix? A. Mailing questionnaires to customers B. Tracking visitors to their web-sites C. Compiling detailed databases D. Preparing interactive software programs

13. Answer • B, Tracking visitors to their websites. As a result of computer technology, many businesses have developed websites that are accessible to customers. This technology also allows businesses to track their visitors to their website and obtain info such as their name, address, type of purchase etc..

14. 3.01 • 8. Which activity is addressed in the product/service management function? A. Setting discounts to clear products from inventory. B. Determining where products will be offered for sale. C. Focusing promotional activities on a new-product release. D. Eliminating products that are slow sellers.

15. Answer • D. Eliminating Products that are slow sellers. The product/service management function follows a product throughout its life cycle, determining when to eliminate slow-selling items.

16. 3.01 9. What is an example of an ethical issue that a product/service manager might face? A. Use of color on the label. B. Use of environmentally friendly packaging. C. Use of packaging as a means of promotion. D. Use of nutrition information on a food label.

17. Answer B. Use of environmentally friendly packaging. One of the ethical issues that product/service managers face is that of being environmentally friendly. Many businesses changed their packaging due to pressure by customers.

18. 3.01 10. Why should a business continue to monitor an established product? A. To determine the acceptance of a product by a limited market. B. To make sure that a marketing plan is firmly in place. C. to make changes in order to extend a products life cycle. D. To evaluate how a product might fit the firms product mix.

19. 3.01 11. Why is the quality level of a product an important product/service management decision? A. It identifies a products brand. B. It reflects the image of the business. C. It protects consumers. D. It refers to the way the product works.

20. Answer B. It reflects the image of the business. The quality level of a product is an important part of product/service management because it reflects the image of the business. Product managers must choose not only the image they wish to portray but the level of quality that is appropriate to the products themselves.

21. 3.01 12. What is a technologically advanced method that allows a businesses to produce products that are specialized for a very few customers? A. Intermittent conversion B. Automatic production C. Computerized robotics D. Mass customization

22. Answer D. Mass customization. Computerization and the technology of mass production have created the method of mass customization which allows businesses to produce customized products for one customer or only a vary few customers.

23. 3.01 13. Why might profits sometimes decline for the company that first introduced the product during the growth stage of a products life cycle? A. Because sales decline in the growth stage. B. Because marketing strategies are adjusted. C. Because competitors have entered the market. D. Because production is more efficient.

24. Answer C. Because competitors have entered the market. By the time a product reaches the growth stage, there are usually many competitors in the market. This forces producers to lower prices in order to compete for market share.

25. 3.01 14. Why does a company need to know what stage of the product life cycle its products are in? A. To prevent imitators from entering the market. B. To find new uses for the product. C. To predict the length of the life cycle. D. To adapt its marketing strategies.

26. Answer D. To adapt its marketing strategies. Businesses change their marketing strategies as their products go through the stages of the life cycle. This means that companies need to know where products are in their life cycles in order to use marketing strategies appropriate for each stage.

27. 62. Why would a business use a broad product mix? • A- To assure that the product lines are related • B- To promote one-stop shopping • C- To decrease legal liabilities • D- To relate the products to the target market

28. ANSWER B- To promote one-stop shopping • A business with a broad product mix offers many product lines. This provides them many opportunities to make sales, allows them to appeal to consumers with a variety of needs, promotes one-stop shopping, and often reduces the costs of the goods they buy for resale. Assuring that product lines related refers to consistency. The use of a broad product mix does not decrease legal liabilities. In fact, its use may increase legal liabilities since the business is responible for a larger variety of product lines.

29. 63. Which of the following is a reason that a business would make a changes to its product? • A- To keep up with changing consumer preference • B- To spread risk over a wider area • C- To predict the success of the changed product • D- To make room for other products

30. ANSWER A- To keep up with changing consumer preferences • Customers’ attitudes toward products change over time, and their preference for a product may change. Altering the product in some way can renew customers interest. Making room for other products is a reason for using the contraction strategy. By adding products to the product mix, businesses are able to spread risk over a wide area. A limitation to the alteration strategy is that businesses cannot predict the success of altered products.

31. 12. Company XYZ sells condensed soups and promotes them by saying, “Great taste, great price.” Company XYZ is positioning its product according to what strategy? A. Relationship to other products B. Features and benefits C. Unique characteristics D. Price and quality

32. D Price and quality. The promotional slogan is positioning the product as having great taste at a great price. The taste is a quality. The promotion does not address specific features and benefits of the product such as “30% more chicken then the competition” or “Helps lower cholesterol.” The company is not claiming that its soups have a characteristic that is different than that of competitors. The soups are not positioning according to other products because the slogan does not include information about other products that the company produces.

33. 13. A company advertises that its products are durable, lightweight, and come in a variety of colors. What strategy is the company using to position its product? A. Price and quality B. Features and benefits C. Unique characteristics D. Relationship to other products

34. B Features and benefits. The company is positioning its products according to their specific features and benefits. Color is one of a product’s attributes or features. Being durable and lightweight are benefits. The company is not advertising quality or price, or unique characteristics not available from the competition. The company does not mention its other products.

35. 14. A company that makes ink pens claims that no other pen on the market uses on the market uses a type of ink that changes color when exposed to light. The company is positioning its product according to what strategy? A. Price and quality B. Features and benefits C. Unique characteristics D. Relation to other products in a line

36. C Unique charateristics. The company is positioning its product according to unique characteristics because it is claiming that its product does something that no other product can do. The ink changing color in light is a feature, but it is a unique characteristic that is not available on other pens. The company is not positioning according to the quality or the price of the pens or their relationship to other products.

37. 15. Why do companies use brands for their products? A. To differentiate their products B. To charge higher prices C. To encourage materialism D. To demonstrate creativity

38. A To differentiate their products. Companies want their products to be perceived as different from those of other companies. They can do this through the use of brands. Charging higher prices and encouraging materialism are seen by consumers as negative aspects of brands. Creating an appealing brand often requires creativity, but demonstrating creativity is not a purpose of using brands.

39. 16. In what stage of brand loyalty do people become aware of the brand? A. Recognition B. Satisfaction C. Insistence D. Preference

40. A Recognition. Brand recognition is the stage of brand loyalty in which consumers become aware of a brand’s existence. Brand preference is when customers prefer to purchase a brand based on their positive experiences with that brand. Brand insistence occurs when a customer will only purchase that brand because of his/her satisfaction with it.

41. 34. A business that says it tries harder because its product is not number one, is using product positioning to_______. A. Motivate B. Organize C. Upgrade D. Compete

42. D.

43. 35. Brand or trade names are used primarily to identify a _______. A. Market B. Standard C. Product D. Trend

44. C.

45. 36. A drawback of brands as compared to unbranded products is that they usually______. A. Differentiate products. B. Must be sold at higher prices. C. Create brand loyalty. D. Require trademark registration.

46. B.

47. Any business that transports goods across state lines must comply with standards set by: • Individual Businesses • Government Agencies • Trade Associations • Professional Organizations

48. While some businesses may have their own standards, all businesses must follow government standards by law. B: Government Agencies

49. Why do many professional organizations develop standards for their members to follow? • To promote group activities • To create influence • To establish control • To promote product safety

50. D: To promote product safety Many professional organizations develop standards for their members to follow in order to promote safety. These specifications guarantee that the materials used to make goods, or the goods themselves, meet certain standards for safety. The safety standards also benefit customers who are ensured of purchasing safe goods. Professional organizations do not develop standards in order to promote their activities, to create influence, or to establish control.