Product Definitions and Types Quiz

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Questions and Answers

What distinguishes a service from a good?

Services are intangible. (correct)

Services can be owned.

Goods cannot be traded.

Services preserve physical attributes.

Which of the following is an example of MRO products?

Computer hardware

Production machinery

Office furniture

Repair tools (correct)

Which attribute of goods indicates that they can change ownership?

Independence from owner

Market value

Exchangeability (correct)

Physical existence

What is a characteristic of services that makes them unique compared to goods?

Services are inseparable from the consumer. Signup and view all the answers

Advanced components are best defined as:

Products that assist in producing larger products. Signup and view all the answers

How do experiences differ from goods and services?

Experiences can create value beyond physical products. Signup and view all the answers

Which statement about goods is FALSE?

Goods are inherently intangible. Signup and view all the answers

What does perishable mean in the context of services?

Services cannot be inventoried or stored. Signup and view all the answers

What is the core product in the context of marketing?

The end benefit that the buyer receives. Signup and view all the answers

Which of the following is NOT a category of consumer products?

Processed Materials Signup and view all the answers

What type of product is specifically characterized by its high price relative to others?

Specialty Product Signup and view all the answers

What defines augmented products in the marketing mix?

Support items that enhance the total product offering. Signup and view all the answers

Which product type is specifically sold to businesses for production purposes?

Industrial Products Signup and view all the answers

What are convenience products known for?

Appealing to a large market segment and frequent purchase. Signup and view all the answers

Which of the following describes processed materials?

Products created from processing raw materials. Signup and view all the answers

What type of product would be classified as unsought?

Purchase occurs unplanned, often due to marketer’s actions. Signup and view all the answers

What is the primary function of the agent/broker in the distribution channel?

To act as an intermediary in the distribution process Signup and view all the answers

Which type of distribution involves the producer selling directly to the consumer?

B2C distribution Signup and view all the answers

What is a characteristic of intensive distribution?

Products are available at many outlets Signup and view all the answers

Which of the following is NOT a function of distribution channels?

Market research Signup and view all the answers

Which distribution strategy selects only a few retail outlets to sell products?

Selective distribution Signup and view all the answers

How does exclusive distribution differ from intensive distribution?

It limits sales to only one outlet in a particular area Signup and view all the answers

What is a key consideration when choosing distribution channels?

The interests and buying requirements of the target market Signup and view all the answers

In a B2B distribution channel, who are typically the industrial users?

Manufacturers using raw materials for production Signup and view all the answers

What is a key reason buyers are less price conscious when purchasing certain products?

The product is inimitable or high in quality. Signup and view all the answers

How do economic conditions influence a firm's pricing strategy?

They affect consumer spending and perceptions of value. Signup and view all the answers

What should companies consider when setting product prices in their environment?

The impact on resellers' profits. Signup and view all the answers

Which pricing strategy involves setting high initial prices to capture maximum revenue?

Market-skimming pricing. Signup and view all the answers

What is a necessary condition for successfully implementing market-skimming pricing?

The quality and image must support a higher price. Signup and view all the answers

What impact does government regulation have on pricing decisions?

It can impose restrictions and influence pricing strategies. Signup and view all the answers

Which factor is NOT specifically mentioned as influencing pricing strategies?

Product aesthetics. Signup and view all the answers

What is a potential downside of market-skimming pricing?

It may alienate price-sensitive customers. Signup and view all the answers

What is the primary goal of sourcing and procurement?

To lower costs and increase profits Signup and view all the answers

What aspect of production scheduling is emphasized?

Goods are scheduled according to past sales and demand Signup and view all the answers

What does order processing involve?

Processing customer requirements and transmitting information Signup and view all the answers

What is the main purpose of inventory control?

To maintain a variety of materials or products to meet demand Signup and view all the answers

Which factor is NOT a concern of transportation?

Customer satisfaction Signup and view all the answers

Which of the following is an essential characteristic of reliability in transportation?

Consistency in on-time delivery Signup and view all the answers

What does the term 'capability' refer to in the context of transportation?

The ability to provide necessary equipment and conditions for moving goods Signup and view all the answers

What is promotion primarily concerned with?

Communicating product, brand, or service to consumers Signup and view all the answers

What is primarily being sold by companies focusing on customer experiences?

The connection and value added by customers Signup and view all the answers

Which stage of the product life cycle is usually the most expensive for a company?

Introduction Stage Signup and view all the answers

During which product life cycle stage is the focus primarily on maintaining market share?

Maturity Stage Signup and view all the answers

What is a potential strategy for extending a product's life cycle?

Diversify the product features Signup and view all the answers

What happens during the Decline Stage of the product life cycle?

The market for the product begins to shrink Signup and view all the answers

How do companies view customer experiences in relation to their products?

As the main attraction for consumers Signup and view all the answers

What primarily drives the demand for newer products in the product life cycle?

Technological advancements Signup and view all the answers

Which of the following correctly identifies a product life cycle stage where companies typically experience strong sales growth?

Growth Stage Signup and view all the answers

Study Notes

Product Defined

A product is anything—a good, service, or idea—that offers value to target customers.
It comprises a bundle of tangible and intangible attributes, satisfying needs and wants in exchange for something of value.

Components of a Product

Core Product: The fundamental benefit the buyer receives.
Formal Product: The actual physical or perceived characteristics (quality, features, styling, branding, packaging).
Augmented Product: Supporting items like after-sales service, warranty, delivery, or installation.

Types of Products

Consumer Products: Goods purchased for personal, family, or household use.
- Convenience Products: Products purchased frequently and easily.
- Shopping Products: Products bought less frequently and compared based on features and price.
- Specialty Products: Products with unique characteristics and high price-point, requiring special effort from buyers.
- Unsought Products: Products buyers do not initially seek, but may become necessary or desirable (e.g., insurance).
Industrial Products: Goods purchased by businesses for use in producing other goods or services.
- Raw Materials: Unprocessed materials (mining, fishing, agriculture).
- Processed Materials: Processed/manufactured materials for industry.
- Equipment: Products to aid in production.
- Basic Components: Components used in assembly.
- Advanced Components: Components with substantial functions within larger products.
- Product Components: Used as part of final product, but can be stand-alone products.
- Maintenance, Repair & Operating (MRO) Products: Used to support production but not directly in making output.

Goods, Services, and Experiences

Goods: Tangible items with enduring attributes (e.g., physical objects, exchangeable, tradable in markets).
Services: Intangible items, heterogeneous experiences (e.g., inseparable from consumer, perishable).
Experiences: Combination of goods and services, actively engaging customers.

Product Mix

Product Mix Width: The number of product lines a company carries.
Product Line Length: The number of products within a specific product line.
Product Line Depth: The number of subgroups of products offered in each product line.
Product Consistency: The degree of relationship among product lines.

Product Strategies

Product Positioning: Establishing product in marketplace relative to competitors' offerings.
Product Elimination: Reducing products to improve profitability.
Product Re-Positioning: Changing existing product's market position.
New Product Development: Including product improvement, imitation, or innovation.
Product Overlap: Competing with own brand via new products or private labels.
Diversification: Developing unfamiliar products and markets through various approaches (e.g., concentric, horizontal, conglomerate).
Product Scope: Considering business unit's overall mission in determining product scope.
Value Marketing: Delivering on product/service promises.
Product Design: Degree of standardization in product offerings.

New-Product Pricing

Market-Skimming Pricing: Setting a high initial price to capitalize on early adoption or higher demand of new product.
Market-Penetration Pricing: Setting a low initial price to achieve rapid market adoption among a large range of consumers.

General Pricing Approaches

Demand-Oriented: Approach focusing on customer preferences and market conditions.
Cost-Oriented: Approach prioritizing production costs and profit margins.
Competition-Oriented: Approach considering competitors' strategies and market prices.

Distribution Channels

Paths taken by goods/services to reach end-users.
Structures vary from producer to consumer, often via intermediaries (retailers, wholesalers, distributors, agents).
Crucial for product accessibility.

Channels Choice Considerations

Target Market Coverage (Intensive, Exclusive, Selective).
Buyer Requirements (Information, Convenience, Variety, Attendant Services).
Profitability (Most Lucrative Channel).

Distribution Functions

Information: Providing details about product/service to target market.
Price Stability: Maintains pricing structure among channels.
Promotion: Encouraging sales and awareness.
Financing: Facilitating transactions within the channel.
Title: Ownership transfer of goods within the channel.
Matching Demand and Supply: Aligning production with consumer needs.
Standardizing Transactions: Ensuring smooth, consistent transactions across the channel.

Supply Chain Management (SCM)

Management of interconnected processes across firms in a supply chain (producer-manufacturer-retailer-consumer).
Aimed at optimized processes, efficient costs, and sustainable profitability across the supply system.
Key Processes: Customer Relationships, Demand Management, Order Fulfillment, Manufacturing, Supplier Relations, Product Development, and Returns.
Components of Logistics: Sourcing, Production Scheduling, Order Processing, Inventory Control, Warehousing, Transportation.

Promotion

Communication to inform and persuade target consumers about products/services.
Promotional Mix Tools: Including Advertising, Guerrilla Advertising, Broadcast Advertising, Outdoor Advertising, Public Service Advertising, Product Placement, Cellphone/Mobile Advertising, and Online Advertising.
Sales Promotion: Incentivizing purchases (e.g., Coupons, Contests, Discounts, Special Events, Loyalty Programs).
Personal Selling: Direct interaction between sales representatives and customers (e.g., presentations, building relationships, address customer concerns).

Public Relations (PR)

Cultivating a positive company image and relationships with stakeholders.
PR Tools: Media relations, press kits, audio/video news releases, press conferences, website press rooms, media tours, newsletters, special events, sponsorships, employee communications, and community relations/philanthropy.
Direct Marketing: Directly targeting customers using various channels (mail, email, phone, in-person).

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Description

Test your knowledge on the definitions and classifications of products in marketing. This quiz covers the core, formal, and augmented aspects of products, alongside various types such as consumer, convenience, shopping, specialty, and unsought products. Get ready to enhance your understanding of value offerings!