Chapter 09 – Additional Quiz PDF

Chapter: Chapter 09 – Additional Quiz 1.​The dominant choice attribute for a consumer in buying convenience item is: A)​brand name. B)​price. C)​access. D)​situation specific. Answer: C 2.​Cannibalization refers to a situation when: A)​the market territory of two contiguous markets overlap. B)​the...

Chapter: Chapter 09 – Additional Quiz 1.​The dominant choice attribute for a consumer in buying convenience item is: A)​brand name. B)​price. C)​access. D)​situation specific. Answer: C 2.​Cannibalization refers to a situation when: A)​the market territory of two contiguous markets overlap. B)​the breadth and depth of a product line complicate the marketing of a service line. C)​the sale of one product takes away sales from another of the same company. D)​two competing companies confuse the other’s position in the consumers’ mind, thus cannibalizing their unique position. Ans: C 3.​In the introduction stage of the product life cycle, the major concern for the organization is: A)​to correctly price the product or service. B)​to ensure that the product or service is a quality offering. C)​to ensure a sufficient supply in the channel of distribution. D)​to ensure that there is a value-added difference. Ans: B 4.​In a skimming price strategy, the organization tends to: A)​set a high price relative to competing products or substitutable services. B)​skim off the high-end customers. C)​set a high price to allocate as much cost to this service line as possible. D)​All of these are correct. Ans: A 5.​One of the key advantages of a skimming strategy for services is that: A)​it gives a service a way to develop a position to negotiate with consumers. B)​it is a useful mechanism for structuring all the costs of the services. C)​it allows for a high price because no one understands the costs. D)​it can be useful to control demand until the organization is sure that processes are in place to handle flow. Ans: D 6.​The major disadvantage of a skimming strategy is that it: A)​encourages competitors to enter. B)​allows for rate-setting commissions to begin an investigation into price-setting practices. C)​ignores where the bulk of the market is. D)​All of these are correct. Ans: A 7.​To implement a penetration strategy, an organization must have a good understanding of: A)​the price sensitivity of the market. B)​its cost structure. C)​its ability to deal with a reaction from competitors. D)​its debt-financing capacity. Ans: B 8.​Generating primary demand is the major objective in which stage of the product life cycle? A)​Introduction B)​Growth C)​Mature D)​Decline Ans: A 9.​A manufacturer of proton beam therapy publishes a magazine showing articles and stories of patients whose diseases have been treated with great results using this technology. This is an example of a strategy to create: A)​differentiation. B)​skimming. C)​secondary demand. D)​primary demand. Ans: D 10.​ When competitors enter the market, the organization should recognize that it has entered which stage of the product life cycle? A)​Introduction B)​Growth C)​Maturity D)​Decline Ans: B 11.​ Intuitive Surgical has entered the market with a robotics surgical device. Because it is in the growth stage of the life cycle, it has decided to: A)​lower prices. B)​generate primary demand. C)​target different market segments for usage of its device. D)​All of these are correct. Ans: C 12.​ The first proton beam therapy center has now closed, and in some markets two competing centers have decided to merge. These trends indicate that the market for such facilities has entered which stage of the product life cycle? A)​Introduction B)​Growth C)​Maturity D)​Decline Ans: C 13.​ Generating selective demand is the key promotional objective of which stage of the product life cycle? A)​Introduction B)​Growth C)​Maturity D)​Decline Ans: B 14.​ In the growth stage of the life cycle, the focus on the middleman becomes one of: A)​negotiating the price. B)​gaining a presence. C)​solidifying loyalty. D)​gaining an image of the service in the channel. Ans: C 15.​ In the early phase of the mature life cycle, growth in sales/revenues continues to occur due to: A)​marginal competitors exiting the marketplace. B)​the lessening battle for market share. C)​stronger players beginning to solidify their position. D)​customers beginning to recognize their preferences for the brand. Ans: A 16.​ In the mature stage of the product life cycle, a key objective becomes one of: A)​maintaining price margins. B)​maintaining the existing customer base. C)​recognizing when it is necessary to withdraw from the market first. D)​developing selective demand. Ans: B 17.​ Developing new product or service lines to reposition the organization to enjoy future revenue streams should occur during which stage of the product life cycle? A)​Introduction B)​Growth C)​Maturity D)​Decline Ans: C 18.​ Aggressive price discounting is most common during which stage of the product life cycle? A)​Introduction B)​Growth C)​Maturity D)​Decline Ans: D 19.​ In the decline stage of the product life cycle, many organizations struggle with dropping an unprofitable service or product because: A)​it is often an emotional decision for the organization. B)​there is always revenue that can be obtained. C)​some people always need every service. D)​every product has value. Ans: A 20.​ In the life cycle of a high-learning product, the key strategic challenge is to: A)​price it at the appropriate value level. B)​educate the market as to the benefits of the product. C)​get people to learn to adapt to change. D)​get the channel to adopt to new use alternatives. Ans: B 21.​ Competition enters rapidly in a______​product life cycle. A)​high-learning B)​fashion C)​fad D)​low-learning Ans: D 22.​ Which product life cycle has only two stages: introduction and decline? A)​High learning B)​Low learning C)​Fad D)​Fashion Ans: C 23.​ In health care, a major factor that affects life cycles is: A)​demographics. B)​technology. C)​reimbursement. D)​All of these are correct. Ans: D 24.​ Hospital-based sleep centers and many outpatient sleep centers were dramatically affected by externalities in the environment. The result was that many outpatient centers closed. What two factors affected the changes in these institutions’ life cycles? A)​Reimbursement and demographics B)​Technology and physician resistance C)​Technology and reimbursement D)​Physician resistance and demographics Ans: C 25.​ A major criticism of the product life cycle concept has been that: A)​it is difficult to determine when to change strategy over the life cycle. B)​it is difficult to determine when one enters each stage. C)​the industry curve and product curve often intersect at different points. D)​there is no standard product life cycle curve. Ans: D 26.​ In recent years, the greatest change in hospital revenues has been the increase occurring in revenue from: A)​outpatient services. B)​ancillary services. C)​inpatient services. D)​emergency services. Ans: A 27.​ Which of the following is not a way to stretch the product life cycle? A)​Market modification B)​Product modification C)​Market repositioning D)​Product repositioning Ans: C 28.​ When it is touted to “brush after every meal,” this is an example of: A)​creating new users. B)​market modification. C)​product modification. D)​market enhancement. Ans: B 29.​ Off-label use of a pharmaceutical product is an example of: A)​a high-learning product. B)​a shopping product. C)​a repositioning strategy. D)​market stretching. Ans: D 30.​ In terms of off-label use, Food and Drug Administration regulations: A)​allow for promotion of the off-label benefits. B)​prohibit promotion of the off-label benefits. C)​have not addressed the issue of off-label benefits. D)​allow companies to promote off-label benefits if they specifically state in the advertisements the drug was not tested for that specific condition. Ans: B 31.​ The Louisiana Heart Hospital focuses only on the care of heart-related diseases. This is an example of a: A)​niche strategy. B)​product-focused strategy. C)​selective-demand strategy. D)​key market strategy. Ans: A 32.​ Focusing on a very narrow segment of the market is a definition of a: A)​selective strategy. B)​single-segment strategy. C)​niche strategy. D)​targeted strategy. Ans: C 33.​ In order for a brand or service mark to have legal protection, it must have which of the following? A)​A clear registered trade or service mark that cannot be confused with those of others brands or services B)​At least three letters or symbols in its name C)​A visible logo that is used in signage and letterhead D)​A certificate showing that is registered in a state registry Ans: A 34.​ Brand equity is the: A)​worth of the brand in actual dollars in the marketplace. B)​total dollars a company spends in promoting its brand name. C)​equity a company has in its stock price. D)​association a consumer places with the organization’s brand. Ans: D 35.​ Which of the following is not one of the many advantages that have been cited of having a strong brand? A)​It aids in establishing a competitive advantage. B)​It allows an organization to establish a successful digital presence. C)​It can create a barrier to entry. D)​All of these are correct. Ans: B 36.​ In following a house of brands strategy, it is of paramount importance to ensure that: A)​each brand has a distinct name. B)​the co-brands are of similar value. C)​there is consistency across the organization with regards to service and clinical quality. D)​the multibrand approach is understood throughout the organization. Ans: C 37.​ The principal/agent notion is a central concept in health care because: A)​consumers pay physicians as agents to buy medical services for them, such as laboratory and radiology  tests. B)​principals such as companies hire agents to help them contract with health systems. C)​a patient trusts a doctor to make the decisions for them. D)​a doctor trusts that the patient will follow their advice. Ans: C 38.​ A multispecialty clinic has established a surgical center, a rehab group, and a durable medical equipment company. All of these entities are under the name of the multispecialty practice. This branding strategy would be considered: A)​co-branding. B)​a multibrand. C)​a multiproduct. D)​a reseller. Ans: C 39.​ A hospital has decided to acquire practices throughout its primary and secondary service area. As it acquires each practice, it allows each group to retain the name of the group. However, under the practice’s name, it places the name of the health system. This is an example of: A)​multiproduct branding. B)​co-branding. C)​multibranding. D)​mixed branding. Ans: B 40.​ Using the same brand name across all the products or services in the organization’s line is an example of which type of branding strategy? A)​Multibranding B)​Co-branding C)​Reseller D)​Multiproduct Ans: A 41.​ A major tertiary center has decided to generate significant revenue by staffing the laboratories of smaller hospitals in the region on a contractual basis. The tertiary center has hired a large number of pathologists. However, as they place the pathologists in these local hospitals, there will be no identification with the major tertiary center. The pathologists and their support staff will wear the lab coats of the local facility. This approach is an example of which branding strategy? A)​Multibrand B)​Multiproduct C)​Mixed D)​Reseller Ans: C 42.​ The diffusion of innovation refers to: A)​who adopts new products or services. B)​the time when a new innovation is adopted in the population. C)​how new diseases or epidemics spread. D)​how individuals are profiled. Ans: B 43.​ The major difference between innovators, early adopters, early majority, late majority, and laggards is: A)​their use of media. B)​their income distribution. C)​the time when they adopt a new product or service. D)​their price consciousness. Ans: C 44.​ Which of the following is not a factor affecting adoption? A)​Relative advantage B)​Consistency C)​Compatibility D)​Communicability Ans: B 45.​ Giving free samples to physicians as part of the diffusion of innovation is trying to affect which factor of adoption? A)​Divisibility B)​Complexity C)​Compatibility D)​Homophility Ans: A 46.​ Adoption increases when the group of people considering the new technology is more similar. This is referred to as the dimension of: A)​commonality. B)​congruency. C)​homophilous. D)​homogeneity. Ans: C 47.​ A surgeon hesitates to use Google glasses in the operating room. What criterion does this demonstrate with regard to the adoption of new products? A)​Complexity B)​Divisibility C)​Financial risk D)​None of these is correct. Ans: A 48.​ In the adoption of digital technology, two key barriers are: A)​privacy and cost. B)​cost and difficulty of understanding the product’s benefit. C)​difficulty of understanding of the product’s benefit and safety. D)​safety and privacy. Ans: D  True/False 1.​True or False? The entire range of products or services offered by an organization is referred to as its product mix. Ans: True 2.​True or False? A hospital has a comprehensive cancer center that has surgery, interventional radiology, counseling, gynecological surgery, breast reconstructive surgery, and many other related aspects pertaining to the treatment of adult cancer. This would be referred to as its product line. Ans: True​ 3.​True or False? Product lines tend to be less standardized. Ans: False 4.​True or False? Specialty heart hospitals represent depth rather than breadth in terms of a product line perspective. Ans: True 5.​True or False? Cross-subsidization of the business unit is when a company steals sales from itself. Ans: False 6.​True or False? When a multispecialty group that has primary care satellites establishes a telemedicine division that provides primary care access, there is a risk of cannibalization. Ans: True 7.​True or False? The stage a product goes through from introduction to its final withdrawal is referred to as the product life cycle. Ans: True 8.​True or False? In the introduction stage, setting a high initial price is possible because buyers always want a new product and it encourages people to buy the item. Ans: False 9.​True or False? A skimming strategy tends to encourage competitors to enter the market. Ans: True 10.​ True or False? The less sure an organization is of demand relative to capacity, the more likely it is to use a penetration pricing approach in the introduction stage of the product life cycle. Ans: False 11.​ True or False? Over the course of the product life cycle, prices for a product or service tend to stabilize as competition enters. Ans: False 12.​ True or False? The focus of primary demand is to generate demand for an entire product class. Ans: True 13.​ True or False? A key goal in the introduction stage of the life cycle is to generate selective demand for the new product. Ans: False 14.​ True or False? The key sign that a product has entered the growth stage of the life cycle is that a competitor has entered the market. Ans: True 15.​ True or False? Loyalty of the middleman in the channel of distribution must be obtained in the introduction stage of the life cycle before competitors enter the market. Ans: False 16.​ True or False? When no new competitors enter the market, this is a key sign that the product life cycle is now in the mature phase. Ans: False 17.​ True or False? The goal in the mature stage of the product life cycle is to retain customers through promotion. Ans: True 18.​ True or False? Many hospitals have begun to drop inpatient pediatric beds as a harvesting strategy, which indicates the decline stage of the life cycle of this service. Ans: True 19.​ True or False? Products that have a very protracted introductory period before reaching the growth phase are referred to as extended learning products. Ans: False 20.​ True or False? Google glasses for surgical use are most likely a case of a fad product. Ans: False 21.​ True or False? Fads have three stages: introduction, quick acceptance, and demise. Ans: False 22.​ True or False? When a new product enters the market and consumers immediately see the benefit, such as with walk-in urgent care centers, and competitors then quickly enter, it is an considered a low- learning product or service. Ans: True 23.​ True or False? The Duncan Yo-Yo Company has periodic times when sales are quite high; then it goes out of favor, only to return again among younger consumers as a product of interest. This product exhibits a fad product life cycle. Ans: False 24.​ True or False? A major externality that can affect the life cycle of any service in health care is reimbursement changes. Ans: True 25.​ True or False? Services can move to the decline stage as a function of technological changes. Ans: True 26.​ True or False? Rural hospital decline is most affected by changes in reimbursements. Ans: False 27.​ True or False? The major advantage of the product life cycle concept is that there is a standard life cycle by which all strategies can be formulated and developed. Ans: False 28.​ True or False? A hospital has decided to add more services to its health and wellness program. In this case it has undertaken a market modification program. Ans: False 29.​ True or False? When a company tries to create new uses for its product, it is undertaking a market modification program. Ans: True 30.​ True or False? Off-label uses of pharmacological products are an example of market modification programs. Ans: True 31.​ True or False? Off-label use of a pharmaceutical by a physician is illegal. Ans: False 32.​ True or False? In an undifferentiated positioning approach, a service is positioned to appeal to the  broadest possible market. Ans: True 33.​ True or False? Shouldice Hospital in Canada did hernia repairs at its hospital and attracted patients from all of North America. This was an example of a mass market strategy. Ans: False 34.​ True or False? MedCath Hospitals develops and establishes heart hospitals across the country. This approach is an example of a niche strategy. Ans: True 35.​ True or False? Multidimensional scaling provides a perceptual map of the actual competitive position of brands relative to each other in terms of consumer ratings that are stable over time. Ans: False 36.​ True or False? Brand architecture refers to the strategy a company uses in developing its brand equity. Ans: False 37.​ True or False? The name under which a company does business is referred to as its trademark. Ans: False 38.​ True or False? The value a brand gives a company through associations made by a consumer is referred to as its brand equity. Ans: True 39.​ True or False? A strong brand has been found to create a barrier to entry, but it has no relationship to customer satisfaction. Ans: False 40.​ True or False? The principal/agent relationship suggests that the patient trusts the doctor to do “right” for them. Ans: True 41.​ True or False? A hospital owns clinics, a freestanding laboratory, a surgical center, and an ambulance company. All of these are under one name of the health system. This hospital follows a  multiproduct branding strategy. Ans: True 42.​ True or False? A health system buys physician practices in many different regions and several smaller hospitals. It lets each entity retain its own name. This organization is following a reseller strategy. Ans: False 43.​ True or False? A large health system decides to provide pathology services for some small rural hospitals. Some of these hospitals have actually wanted it known that there is a relationship. The larger institution has their physicians wear lab coats that identify both organizations’ names. This approach is an example of a reseller branding strategy. Ans: False 44.​ True or False? A medical group and a hospital have decided to partner in a health promotion program in the community. They market this program with both organizations’ names prominently mentioned in all materials. This is an example of co-branding. Ans: True 45.​ True or False? The time when a person adopts a new product or technology is the concept behind the diffusion of innovation. Ans: True 46.​ True or False? Early adopters are those who are willing to endure technical difficulties in order to gain a competitive advantage in terms of the diffusion of innovation curve. Ans: True 47.​ True or False? The adoption of robotic surgery has been slow because it is not compatible with healthcare values. Ans: False 48.​ True or False? Two components of risk affect adoption: financial risk and organizational risk. Ans: False 49.​ True or False? Innovation spreads more quickly as a function the homophilous nature of groups. Ans: True 50.​ True or False? Individuals who are more socially connected are more likely to adopt innovations. Ans: True