Product and Service Classification Quiz

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Questions and Answers

What defines a product in the context of marketing management?

  • Any offering to a market that satisfies a need or want (correct)
  • Only tangible items that are sold for profit
  • A physical item that can be touched and owned
  • A type of consumer goods sold by retailers

Which of the following is NOT a type of consumer product?

  • Industrial products (correct)
  • Shopping products
  • Specialty products
  • Convenience products

What is the primary purpose of companies creating and managing customer experiences with their brands?

  • To simplify the purchasing process for consumers
  • To improve company sales figures exclusively
  • To differentiate their offers from competitors (correct)
  • To lower costs and increase production efficiency

Which component is included in the three levels of product?

<p>Physical attributes (D)</p> Signup and view all the answers

What distinguishes a service from a physical product?

<p>Services involve intangibility and do not result in ownership (C)</p> Signup and view all the answers

Which of the following is NOT a characteristic of service industries?

<p>Delivery of tangible goods (B)</p> Signup and view all the answers

What is one main goal of managing service quality?

<p>To consistently exceed competitors' service quality (A)</p> Signup and view all the answers

Which of the following best defines brand equity?

<p>The positive differential effect of knowing the brand name (C)</p> Signup and view all the answers

In the context of the service-profit chain, what does greater internal service relate to?

<p>Higher levels of employee satisfaction (C)</p> Signup and view all the answers

What is the purpose of managing service productivity?

<p>To increase the quantity of service potentially at the expense of quality (C)</p> Signup and view all the answers

What is the main reason for a company to stretch its product line upwards?

<p>To add prestige or attract higher growth rates (A)</p> Signup and view all the answers

What does the term 'product mix' refer to?

<p>All product lines and items a seller offers for sale (B)</p> Signup and view all the answers

In terms of product line decisions, what does stretching both ways involve?

<p>Adding new products at both high and low price points (D)</p> Signup and view all the answers

What aspect of the product mix measures how closely related product lines are?

<p>Consistency (B)</p> Signup and view all the answers

What defines product line length?

<p>The number of products within each line (C)</p> Signup and view all the answers

Which of the following companies is a recognized example of stretching a product line upwards?

<p>Toyota – Lexus (A)</p> Signup and view all the answers

Which of the following best describes product line depth?

<p>The number of versions of each product carried (B)</p> Signup and view all the answers

What percentage of Canada's GDP is accounted for by services?

<p>70% (D)</p> Signup and view all the answers

What is a key function of branding for buyers?

<p>Identifying products (A)</p> Signup and view all the answers

Which of the following describes a responsibility of product packaging?

<p>Hold and protect the product (C)</p> Signup and view all the answers

What does product line stretching involve?

<p>Adding products priced lower than existing ones (D)</p> Signup and view all the answers

Which attribute is essential for assessing customer value in a product?

<p>Quality (B)</p> Signup and view all the answers

What is the role of labeling in product management?

<p>Identify and describe the product (B)</p> Signup and view all the answers

What is a core element of total quality management (TQM) related to product decisions?

<p>Ensuring company-wide involvement (A)</p> Signup and view all the answers

Which of the following functions is NOT typically associated with effective product packaging?

<p>Increase product costs (D)</p> Signup and view all the answers

What does line filling refer to in product line decisions?

<p>Adding more items within the present price range (D)</p> Signup and view all the answers

Which customer service method is NOT typically used by companies for product support services?

<p>Facial recognition technology (D)</p> Signup and view all the answers

What can be a consequence of poor labeling?

<p>Customer confusion (A)</p> Signup and view all the answers

What is a key advantage of strong brand equity?

<p>It helps when introducing new products. (A)</p> Signup and view all the answers

Which brand positioning level is considered the least effective?

<p>Product attributes (B)</p> Signup and view all the answers

What is an important characteristic for effective brand names?

<p>They should be easy to recognize and remember. (B)</p> Signup and view all the answers

What advantage do licensed brands offer?

<p>They require less marketing effort. (A)</p> Signup and view all the answers

What defines a multibrand strategy?

<p>Launching multiple product entries within a product category. (B)</p> Signup and view all the answers

What is a disadvantage of using private (store) brands?

<p>They are costly to create and promote. (A)</p> Signup and view all the answers

Which of the following is NOT a component of brand development?

<p>Market dilution (D)</p> Signup and view all the answers

What does effective brand management involve?

<p>Training employees to be customer centered. (D)</p> Signup and view all the answers

What kind of brands tend to have higher profit margins?

<p>Private brands (A)</p> Signup and view all the answers

Which core customer value does Starbucks primarily offer?

<p>A premium coffee experience (C)</p> Signup and view all the answers

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Study Notes

What is Product?

  • A product is anything offered to a market that can be acquired, consumed or used to satisfy a want or need
  • A service is an intangible product that consists of activities, benefits and satisfies offered for a fee, does not result in ownership of anything
  • Companies create and manage customer experiences with their brands and products
  • Companies differentiate their offerings from their competitors

Three Levels of Product

  • Core product: Satisfies the customer's fundamental needs, the core benefit the customer is seeking
  • Actual product: Physical attributes & features, packaging, styling, quality, features, brand name.
  • Augmented product: Additional services, such as delivery, installation, financing, warranties and customer service.

Product and Service Classifications

  • Consumer products are bought by final consumers for personal consumption
  • Industrial products are bought by individuals and organizations for further processing or for use in conducting a business

Consumer Products

  • Convenience products: Products that are purchased frequently, conveniently and with minimal effort
  • Shopping products: Consumers invest significant time and effort in researching and comparing alternatives, such as clothing, furniture and appliances.
  • Specialty products: Products with unique characteristics or brand identification for which buyers are willing to make a special purchasing effort, such as specific cars, designer clothes, or gourmet foods.
  • Unsought products: Products that consumers do not know about or don't normally think of buying, such as life insurance, funeral services, and blood donations.

Individual Product and Service Decisions

  • The product and service attributes are the key elements that determine their appeal to customers.
  • Quality is a measure of how well a product performs its intended function, it's linked to customer value and satisfaction, and requires a whole company involvement (TQM - Total Quality Management)
  • Features are a competitive tool for differentiating a product and should be valued by the customer as determined through market research.
  • Style and Design contribute to the product's usefulness and aesthetics.

Branding

  • A brand is a name, term, sign, symbol, or design that identifies the product
  • Branding can add value to a product
  • Branding helps buyers identify products and determine quality
  • Branding helps sellers convey product quality, provide legal protection and segment markets.

Packaging

  • Packaging frequently includes primary, secondary, and shipping packages
  • Packaging functions include holding, protecting, promoting, and differentiating the product.

Labeling

  • Packaging serves to identify, describe, and promote the product
  • Labeling must be careful not to mislead customers, fail to describe ingredients, and include safety warnings.

Product Support Services

  • Companies should survey customers regularly to assess current customer service
  • Companies use a mix of phone, email, fax, internet, and interactive voice and data technologies to provide customer support.

Product Line Decisions

  • Product line: A group of products that are closely related in function, targeted at the same customer groups, market through the same channels, and fall into similar price ranges.
  • Product Line Length: Number of products in the line
  • Line stretching: Adding higher or lower priced products to the existing line
  • Line filling: Adding more items within the present price range

Product Mix Decisions

  • Product Mix (Product Portfolio): All product lines and items a particular seller offers for sale
  • Width: Number of product lines
  • Length: Number of products in each line
  • Depth: Number of versions of each product carried
  • Consistency: How closely related the product lines are.

Services Marketing

  • Services account for a significant portion of GDP, employment, and job creation
  • Service industries include business organizations, government, and private non-profit organizations

Four Service Characteristics

  • Intangibility: Services cannot be seen, tasted, felt, heard, or smelled before purchase
  • Variability: Quality depends on who provides them, when, where, and how
  • Inseparability: Services are produced and consumed simultaneously
  • Perishability: Services cannot be stored for later sale or use

Service-Profit Chain

  • Satisfied and productive employees lead to greater service quality
  • Greater service quality leads to satisfied and loyal customers
  • Satisfied and loyal customers lead to profits and growth

Marketing Tasks for Service Companies

  • Managing service differentiation: Developing a differentiated offer, delivery, and image
  • Managing service quality: Delivering consistently higher quality than the competitors
  • Managing service productivity: Training current employees or hiring new ones; increasing the quantity of service by giving up some quality; Harnessing the power of technology

Branding Strategy

  • Brand Equity: Positive differential effect that knowing the brand name has on customer response to the product or service
  • Brand Value: The total financial value of a brand
  • Customer Equity: The value of customer relationships that the brand creates
  • Brands with strong equity have competitive advantages including high consumer awareness, strong brand loyalty, helping with the introduction of new products, and less susceptibility to price competition.

Building Strong Brands

  • Three levels of brand positioning:
    • Attributes: Least effective
    • Benefits: Taps into emotions
    • Beliefs and values: Highest level

Good Brand Names

  • Suggest something about the product or its benefits
  • Easy to pronounce, recognize, and remember
  • Distinctive
  • Extendible
  • Translate well into other languages
  • Legally registered and protected

Brand Positioning

  • Manufacturer brands: Costly to establish and promote, Higher profit margins
  • Private (store) brands:
  • Licensed brands: Name and character licensing has grown
  • Co-branding: Advantages and disadvantages

Brand Development

  • Line extensions: Minor changes to existing products or services to reach new customer segments.
  • Brand extensions: Successful brand names help introduce new products in new categories.
  • Multibrands: Multiple product entries in a product category, allows for greater market coverage and segment targeting.
  • New brands: New product category, entering a new market or addressing a new customer need.

Managing Brands

  • Communicate the brand's positioning
  • Manage all brand touch points
  • Train employees to be customer-centered
  • Audit the brand's strengths and weaknesses

Starbucks: Brewing a Worldwide Experience, What is the Core Customer Value?

  • Core customer value: A sense of community, a feeling of comfort and belonging, a "third place" outside of home and work where people can connect and socialize.
  • Actual product: High-quality coffee and other beverages, pastries, snacks, and merchandise.
  • Augmented product: A welcoming and comfortable atmosphere with a unique ambiance, Wi-Fi access, and friendly service.

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