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1. According to marketing decision makers, why do people buy products?
a. to acquire items that are distinctively different than the competitive offerings
b. to satisfy their wants and needs
c. to save time by selecting items that are easy to find on the shelves
d. to satisfy price and value requirements
ANSWER: b

2. Using the broad application of the word product, how can a television set best be described?
a. as an obsolete technology in comparison with the Internet
b. as a means of providing entertainment
c. as a lucrative item for appliance stores
d. as a machine used to receive broadcast signals
ANSWER: b

3. Which of the following best describes a product?

a. the physical characteristics of an item that one can buy for personal, professional, or organizational use
b. the costs and benefits that the seller promotes in various marketing messages
c. assurances, reliability, and tangibles all at once
d. a bundle of physical, service, and symbolic attributes designed to satisfy a customer’s wants and needs
ANSWER: d

4. Which term refers to a bundle of physical, service, and symbolic attributes designed to satisfy a customer’s wants and
needs?
a. byproduct
b. construct
c. product
d. Cluster
ANSWER: c

5. Which of the following comes closest to providing a pure good?

a. a company that manufactures and installs elevators
b. a cleaning service
c. a data storage company
d. an advertising agency
ANSWER: a

6. Which of the following comes closest to providing pure service?

a. a retail store
b. an automobile dealership
c. a coffee shop
d. a fitness gym
ANSWER: d

7. What distinguishes a service from a good?

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a. Services are tangible.
b. Services are inseparable from service providers.
c. Services are easy to standardize.
d. Services can be inventoried.
ANSWER: b

8. The moderately priced Days Inn and the upscale Four Seasons Hotel both provide sleeping accommodations, but their
respective guests have considerably different expectations of service. Why do their expectations differ?
a. Companies cannot standardize services.
b. Service quality shows wide variations.
c. Services are inseparable from their providers.
d. Services have a high perishable rate.
ANSWER: b

9. Gourmet restaurants and fast food chains cater to the same want satisfaction—a place to eat. However, at the gourmet
restaurants you experience finely prepared cuisine served by a highly trained wait staff while at the fast food chains you
may have to serve yourself. Which statement best represents this difference?
a. Services are intangible.
b. Companies cannot easily standardize services.
c. Services are perishable.
d. Service standards show wide variations.
ANSWER: d

10. Christopher owns the best hair salon in the city. The clients swear by Christopher, and brides and bridesmaids flock
for him for weddings. Which statement best explains this situation?
a. Companies cannot easily standardize services.
b. Service standards show wide variations.
c. Services are inseparable from the service providers.
d. Services are perishable and intangible.
ANSWER: c

11. Richard generally frequented Brewz, a coffeehouse chain, when he was in Florida. However, when his company
shifted him to China, he found that the Brewz in Shanghai does not offer the same quality service. Which of the following
best explains this differential perception in service quality?
a. Companies cannot easily standardize services.
b. Buyers often play important roles in the creation and distribution of services.
c. Services are perishable and intangible.
d. Providers cannot make inventories of their services.
ANSWER: a

12. Approximately what percentage of the Canadian economy is made up of the service sector?
a. 25
b. 50
c. 75

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d. 90
ANSWER: c

13. Which company is a pure service firm?

a. Walmart
b. Microsoft
c. Starbucks
d. Royal Bank of Canada
ANSWER: d

14. Which of the following industries does NOT belong to the service sector?
a. investment banking
b. Agriculture
c. Retailing
d. health care
ANSWER: b

15. Which of the following is most likely to be categorized as a consumer product as well as a business product?
a. natural gas
b. iron ore
c. concrete mixers
d. agriculture produce
ANSWER: d

16. How would you generally classify consumer goods such as milk, bread, and soft drinks?
a. convenience products
b. utilitarian products
c. shopping products
d. specialty products
ANSWER: a

17. What type of product is marketed to consumers who may NOT yet recognize a need for them?
a. Specialty
b. Consumer
c. Convenience
d. Unsought
ANSWER: d

18. Which product is, for most consumers, unsought?

a. designer clothes
b. Magazines
c. long-term insurance
d. Furniture
ANSWER: c
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19. How might you categorize convenience products that customers constantly replenish in order to maintain a ready
inventory?
a. Staples
b. impulse items
c. emergency items
d. specialty items
ANSWER: A

20. Which product would generally be classified as a staple?

a. plumbing repair kit
b. personal computer
c. gasoline
d. magazine
ANSWER: C

21. Which statement best describes convenience products?

a. Consumers generally don’t have prior need recognition of convenience products before purchasing them.
b. Consumers generally tend to purchase convenience products immediately and with minimal effort.
c. Consumers tend to buy convenience products after a long-term evaluation of competing products in the
market.
d. Consumers tend to buy convenience products because of the prestige associated with their ownership.
ANSWER: b

22. How are consumer goods such as soap, milk, and deodorants generally classified?
a. convenience
b. utilitarian
c. shopping
d. specialty
ANSWER: a

23. Why do grocery stores usually display items such as candy, gum, and magazines near the checkout counter?
a. They are purchased on impulse.
b. They are easier to replenish.
c. They are subject to shoplifting.
d. They are purchased infrequently.
ANSWER: a

24. What does a consumer expect when purchasing convenience products?

a. that they can purchase them without having full knowledge about what is sought
b. that they can purchase them immediately and with minimal effort
c. that they should purchase them after visiting numerous stores and comparing prices
d. that they may have to travel any distance to get what is wanted
ANSWER: b
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25. Which product typically has the longest distribution channel?

a. convenience
b. Staples
c. specialty
d. shopping
ANSWER: a

26. Which product relies least on personal selling?

a. specialty
b. shopping
c. unsought
d. convenience
ANSWER: d

27. What type of convenience product do customers constantly replenish to maintain a ready inventory?
a. Staples
b. impulse goods
c. emergency goods
d. shopping products
ANSWER: a

28. Which product would generally be considered as a staple?

a. lawn mower
b. Laptop
c. dishwashing liquid
d. luxury perfume
ANSWER: c

29. When Sara developed a headache due to stress just before an important sales presentation, she quickly bought an
aspirin from a nearby pharmacy. What type of product did Sara buy?
a. shopping
b. emergency
c. staple
d. impulse
ANSWER: b

30. Which of the following are consumer shopping products?

a. Coca-Cola and Gatorade
b. bread, milk, and gasoline
c. clothing, furniture, and appliances
d. Rolex watches and BMW automobiles
ANSWER: c

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31. What would most likely have the greatest influence on a decision to buy a heterogeneous shopping product?
a. product’s style
b. store’s name and reputation
c. store’s location
d. price and perceived value of the product
ANSWER: a

32. Which statement best describes a shopping product?

a. It is a product that consumers purchase after comparing competing offers.
b. It is a product with unique characteristics that cause buyers to prize those brands.
c. It is a product bought in response to unexpected and urgent needs.
d. It is a product purchased on the spur of the moment.
ANSWER: a

33. While in Best Buy, a customer takes a great deal of time comparing the quality, features, and prices of a number of
refrigerators. What is this customer examining?
a. heterogeneous shopping products
b. homogeneous shopping products
c. homogeneous convenience products
d. heterogeneous specialty products
ANSWER: b

34. What type of product are consumers primarily interested in when they are well aware of the brands they prefer and are
willing to make a special effort to obtain them?
a. impulse
b. convenience
c. shopping
d. specialty
ANSWER: d

35. Which statement best describes a specialty product?

a. It is a product marketed to consumers who may not yet recognize a need for them.
b. It is a product with unique characteristics that cause buyers to prize those brands.
c. It is a product bought in response to unexpected and urgent needs.
d. It is a product purchased on the spur of the moment.
ANSWER: b

36. After researching and comparing several types of alarm clocks, Trisha decided on one that gives a choice of being
wakened to music, bird calls, or ocean waves. In this case, what type of product would the alarm clock be classified as?
a. shopping
b. impulse
c. convenience
d. specialty
ANSWER: a
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37. Ryan is looking for a professional watch that he buys, at most, once every few years. Since he doesn’t favour a
particular brand, he spends a great deal of time comparing price and quality, as well as visiting the few retail outlets that
sell high-end watches. What type of product is Ryan about to purchase?
a. unsought
b. specialty
c. convenience
d. shopping
ANSWER: d

38. Which product relies least on location of purchasing opportunity?

a. specialty
b. shopping
c. unsought
d. convenience
ANSWER: A

39. What type of products are financial, legal, and medical services?
a. convenience services
b. shopping goods
c. customized services
d. specialty services
ANSWER: D

40. Beaux, a clothing boutique store, specializes in high-end evening wear for women. Most of their dresses are custom-
made for their elite customers. What type of products is Beaux offering?
a. impulse
b. convenience
c. shopping
d. specialty
ANSWER: D

41. Using the consumer products classification system, which statement best describes the marketing mix factors for a
specialty product?
a. It generally has low price.
b. The seller’s image is unimportant.
c. Its number of sales outlets tends to be very high.
d. It relies on personal selling by producers.
ANSWER: D

42. Using the consumer products classification system, which statement best describes the consumer factors for specialty
products?
a. Consumers tend to purchase specialty products frequently.
b. Consumers always compare price and quality between competing products.
c. Consumers tend to regard convenience of location as very important.
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d. Consumers tend to plan extensively before buying them.
ANSWER: D

43. Which of the following correctly matches consumer factors and marketing mix factors in the consumer products
classification system?
a. specialty products—personal selling is not important
b. convenience products—a consumer makes infrequent purchases of these products
c. emergency products—these are unsought products
d. shopping products—a relatively short channel of distribution is typical
ANSWER: D

44. Which of the following would NOT ordinarily be included as a business product?
a. installations
b. accessory equipment
c. specialty products
d. component parts
ANSWER: C

45. Which business product would be classified as an installation?

a. jet engine
b. office furniture
c. copy paper
d. regional shopping centre
ANSWER: d

46. Which business product is most similar to consumer specialty products?

a. installations
b. accessory equipment parts
c. raw materials
d. component parts and materials
ANSWER: a

47. What are products that are considered capital investments but whose useful lives are generally much shorter than those
of installations known as?
a. accessory equipment
b. operating supplies
c. component parts
d. business services
ANSWER: a

48. Ryan, a successful entrepreneur, is planning to get into the petroleum business. He has bought two jack-up rigs
running into millions of dollars to start the business. What type of product are these rigs examples of?
a. Installations
b. accessory equipment

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c. Supplies
d. component parts
ANSWER: a

49. What is the basic characteristic of accessory equipment in the business market?
a. It is purchased by groups involving a large number of decision makers.
b. It is not considered a capital item.
c. It is a capital item with a shorter useful life than an installation.
d. It is a convenience product of the industrial market.
ANSWER: c

50. In the business market, what is an important factor for a purchasing firm who is buying installations?
a. the lowest price
b. general usefulness instead of having a specific purpose
c. speed of installation without extensive negotiations
d. efficiency and performance over their useful life
ANSWER: d

51. Which business product would be classified as an installation?

a. paper clips
b. office filing cabinets
c. liquid inkjet printers
d. underground mining loaders
ANSWER: d

52. Sandra is working on a purchase decision for her company. The product under consideration is expensive, has a short
distribution channel, and isn’t purchased frequently. In addition, Sandra is working closely with a seller’s marketing
representative. Which type of product is Sandra’s company considering purchasing?
a. accessory equipment
b. an installation
c. component parts and materials
d. Supplies
ANSWER: b

53. In the context of the business products, what are capital items that typically cost less and last for shorter periods than
installations are called?
a. shopping products
b. accessory equipment
c. supplies
d. impulse products
ANSWER: b

54. What are industrial distributors most often found selling?

a. accessory equipment

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b. business services
c. raw materials
d. installations
ANSWER: a

55. Some wholesalers are called “industrial distributors.” What are these wholesalers a major vendor of?
a. standardized products of uniform quality that are made on a contractual basis
b. MRO items
c. installations for the industrial market
d. accessory equipment for the business market
ANSWER: d

56. Which of the following can be classified as accessory equipment?

a. natural gas pipelines
b. bottling units
c. desktop computers
d. printer cartridges
ANSWER: a

57. What are purchases included with a car, such as spark plugs, batteries, and tires, examples of?
a. installations
b. accessory equipment
c. component parts and materials
d. supplies
ANSWER: c

58. Why do raw materials resemble component parts and materials?

a. They are considered capital investments to be held for several years.
b. They are part of the buyers’ final products.
c. They are finished products before they enter into the production of other products.
d. They are expended without finding their way into finished goods.
ANSWER: b

59. Which of the following is NOT a raw material?

a. coal
b. copper
c. iron ore
d. steel
ANSWER: d

60. In the business market, what are sound systems, batteries, and tires that are included in the manufacturing of a car are
examples of?
a. installations
b. accessory equipment
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c. component parts and materials
d. supplies
ANSWER: c

61. In the business market, what are computer paper, pencils, and office stationery examples of?
a. maintenance items
b. repair items
c. operating supplies
d. accessory equipment
ANSWER: c

62. What are finished business products of one producer that become part of the final products of another producer are
called?
a. installations
b. accessory equipment
c. supplies
d. component parts and materials
ANSWER: d

63. Which of the following consists of intangible products that firms buy to facilitate their production and operating
processes?
a. installations
b. accessories
c. business services
d. operating supplies
ANSWER: c

64. Which product is most likely to be promoted through advertisements rather than through personal selling?
a. oil rigs
b. laptops
c. raw cotton
d. mineral ores
ANSWER: b

65. What is a company practising when it institutes a continuous effort to improve products and work processes?
a. total quality management
b. benchmarking
c. ISO 9002 certification
d. process improvement
ANSWER: a

66. Which of the following has a mandate of advancing the quality movement in Canada by providing advice on change
management, organizing events to promote quality, and offering educational certification programs?
a. ISO 9002

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b. Total Quality Management
c. Excellence Canada
d. Six Sigma
ANSWER: c

67. What is the first main activity involved in benchmarking?

a. identifying the world’s leading performers
b. identifying internal processes to be improved
c. identifying how the best goods are produced
d. identifying critical market segments
ANSWER: b

68. Which of the following involves measuring quality by comparing the company’s performance against the industry
leaders?
a. benchmarking
b. social referencing
c. satisficing
d. social loafing
ANSWER: a

69. Which of the following is NOT an activity for benchmarking?

a. continuously repeating the process to search for and identify areas that need improvement
b. comparing internal processes with similar processes of industry leaders
c. identifying processes that need improvement
d. producing more product output at a lower cost-per-unit
ANSWER: d

70. Russell works for a cell phone provider. When dealing with customers he always conveys confidence that he can
provide the exact assistance they need. Which service quality variable is Russell exhibiting?
a. assurance
b. responsiveness
c. empathy
d. reliability
ANSWER: a

71. What does external analysis, conducted during the process of benchmarking, involve?
a. establishing a baseline for comparison with industry leaders
b. identifying business processes that need improvement
c. identifying the strengths and weaknesses of the firm’s internal processes
d. gathering information about competing firms perceived as leading performers
ANSWER: d

72. Which term refers to the point at which the customer and service provider interact?
a. encounter
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b. locus
c. platform
d. zone
ANSWER: a

73. Which variable of service quality best represents the readiness to serve one’s customers?
a. tangibles
b. assurances
c. responsiveness
d. empathy
ANSWER: c

74. Which variable of service quality best represents the service provider’s understanding of the customer’s needs?
a. tangibles
b. assurances
c. empathy
d. reliability
ANSWER: c

75. What is a series of related products offered by one company called?

a. product assortment
b. product mix
c. product formula
d. product line
ANSWER: d

76. Which of the following is a single product line?

a. four-door sedans offered by various automakers
b. 125-passenger jets manufactured by Airbus and Boeing
c. Hershey Kisses in a variety of flavours
d. different brands of toothpaste
ANSWER: c

77. What does the combination of product lines represent?

a. product mix
b. product cluster
c. product lifecycle
d. product concept
ANSWER: a

78. If Honda were to acquire a bicycle manufacturer, what would it add to Honda’s product mix?
a. depth
b. width
c. length
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d. Cluster
ANSWER: b

79. What is the number of product lines a firm offers referred to as?
a. Depth
b. Width
c. Clusters
d. Length
ANSWER: b

80. What is adding individual offerings that appeal to different market segments known as?
a. product mix
b. product line
c. product line extension
d. product line depth
ANSWER: c

81. Johnson & Johnson manufactures more than 90 brands in nearly 50 product categories. What is the total number of
products the company manufactures called?
a. product line extension
b. product cluster map
c. product mix length
d. product life cycle expectancy
ANSWER: c

82. Which term refers to the development of individual offerings that appeal to different market segments while remaining
closely related to the existing product line?
a. line penetration
b. line innovation
c. line extension
d. line cannibalization
ANSWER: c

83. In what process do products pass through a series of stages from their initial appearance to their decline?
a. product life potential
b. promotional cycle
c. pricing cycle
d. product life cycle
ANSWER: d

84. Potential customers are unaware of a product during its introductory stage; therefore, what does promotion in this
stage concentrate on?
a. explaining the product features, uses, and benefits
b. reducing the size of the available market through selective advertising

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c. test-marketing
d. communicating new uses for the product
ANSWER: a

85. What type of problem is common for companies during the introductory stages of a product life cycle?
a. Competitors rush into the market with offerings similar to those of the innovator.
b. Technical problems are common as companies fine-tune product design.
c. Heavy promotional outlays emphasize differences that exist between products.
d. Profits for the product category decline, sometimes actually becoming negative.
ANSWER: b

86. In what stage of the product life cycle should a firm’s marketing strategy emphasize stimulating initial demand?
a. introduction
b. stabilization
c. growth
d. Maturity
ANSWER: a

87. In which stage in a product lifecycle does the public become acquainted with the item’s merits and begins to accept it?
a. Introductory
b. Growth
c. Maturity
d. Decline
ANSWER: a

88. In which stage of the product life cycle does a firm start to realize substantial profits from its investments?
a. decline
b. introductory
c. growth
d. maturity
ANSWER: c

89. What is a characteristic of the growth stage of the product life cycle?
a. Low prices are established.
b. Effective competitors improve and modify their products.
c. Early buyers of the product make their initial purchases.
d. Buyers are hesitant to make repurchases.
ANSWER: b

90. Widgets were introduced a few years ago. The number of companies making widgets has increased recently, drawn by
high profits. At the same time, differentiated products for different market segments have begun to emerge. What stage of
the product life cycle do widgets appear to be in?
a. growth
b. introductory
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c. maturity
d. decline
ANSWER: a

91. In which stage of the product life cycle does competition between brands intensify?
a. diminishing demand
b. introductory
c. growth
d. maturity
ANSWER: d

92. In which stage of the product life cycle does product differentiation and heavy advertising most often occur?
a. maturity
b. introductory
c. growth
d. decline
ANSWER: a

93. Some firms try to differentiate their products during the maturity stage of the product life cycle. What do these firms
use as a basis for differentiation?
a. rapid market share growth
b. quality, reliability, and service
c. lower promotion costs
d. maintenance of strategy that has worked well until now
ANSWER: b

94. Greta has been analyzing the competitive standing of one of her products. Since the item was introduced, 20 similar
products have appeared, forcing her to change distribution and pricing strategies in order to remain competitive. Sales
volume has dipped and she suspects sales of her product have reached a saturation level. At what stage of the product life
cycle is the item?
a. introductory
b. growth
c. maturity
d. decline
ANSWER: c

95. At what stage of the product life cycle should a viable marketing strategy promote the differences that separate
competing merchandise?
a. introduction
b. stabilization
c. growth
d. maturity
ANSWER: d

96. What is a characteristic of the decline stage of the product life cycle?
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a. Profits can become negative.
b. Distribution is increased.
c. Available products exceed demand for the first time.
d. Selective demand is cultivated.
ANSWER: a

97. Genuine Products has been involved in intensive price competition with another company. Profits are low and market
researchers are concerned that losses will soon occur due to a reduced market for the item. What stage of the product life
cycle does this product appear to have reached?
a. introductory
b. maturity
c. decline
d. growth
ANSWER: c

98. What are fashions with abbreviated life cycles called?

a. trends
b. perishables
c. fads
d. staples
ANSWER: c

99. Which statement best describes the maturity stage of the product lifecycle?
a. It is the second stage of the product lifecycle.
b. Since the product is unknown to the public during this stage, the promotional campaigns stress information
about its features.
c. During this stage differences between competing products diminish.
d. It is characterized by rapid growth in the volume of sales.
ANSWER: c

100. Doug is a business analyst for a leading manufacturer of sports shoes. A careful analysis of market conditions reveals
that there is actually an excess supply in the market for sprinting shoes. At what stage of the product life cycle are
sprinting shoes in?
a. introductory
b. growth
c. maturity
d. disseminative
ANSWER: c

101. In which stage of the product lifecycle do market supplies exceed the demand, as a result of which a firm can
increase its sales only at the expense of its competitors?
a. introductory
b. growth
c. maturity

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d. decline
ANSWER: c

102. What is advertising that warns consumers about the dangers of overexposure to the sun, even during winter months,
an attempt by marketers of sunscreen to do?
a. raise awareness of skin cancer
b. find new uses for the product
c. change product quality
d. increase the frequency of product use
ANSWER: d

103. Zara Inc., a well-known cosmetics manufacturer, introduced its anti-wrinkle cream in the Asian market after its sales
in the European market levelled out due to stiff competition from rival products. How is Zara Inc. attempting to extend
product lifecycle?
a. increasing the frequency of use
b. increasing the number of users
c. finding new uses
d. changing product quality
ANSWER: b

104. When companies promote the use of oatmeal as a cholesterol reducer and antacids as a calcium supplement, what
strategy are they are most likely using to extend the lifecycle of the product?
a. improving product quality
b. changing package sizes
c. increasing the frequency of use
d. finding new uses
ANSWER: d

105. In the late 1990s, Las Vegas witnessed a growth in the number of newly built casinos targeting the family vacation
market. What was advertising their facilities to families an attempt to do?
a. fill a high vacancy rate
b. increase the number of users
c. sell tickets to family shows
d. enhance the city’s image
ANSWER: b

106. The marketing mix is the blend of product, price, distribution, and promotion that a firm develops as its marketing
strategy to satisfy a chosen target market.
a. True
b. False
ANSWER: True

107. A product is simply a physical item designed to satisfy a customer’s wants and needs.
a. True
b. False
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ANSWER: False

108. While a consumer views a product as a want satisfier, a marketer sees the product as a combination of elements that
give value to a consumer.
a. True
b. False
ANSWER: True

109. A university education is a product.

a. True
b. False
ANSWER: True

110. The broad view of product recognizes that consumers buy satisfaction, not just a thing they can hold in their hands.
a. True
b. False
ANSWER: True

111. Because they do not have physical features that buyers can see, hear, smell, taste, or touch prior to purchase, services
are said to be intangible.
a. True
b. False
ANSWER: True

112. Tangible goods and intangible services both intend to satisfy consumer wants and needs, but the marketing efforts
supporting them may be vastly different.
a. True
b. False
ANSWER: True

113. A dinner at an exclusive restaurant is a pure good.

a. True
b. False
ANSWER: False

114. The goods-services continuum is defined as a product that requires continued interaction with the
manufacturer for services that might include maintenance, upgrades, servicing, and repair. Examples of this
type of relationship include cars and auto dealerships, or software and technical support.
a. True
b. False
ANSWER: False

115. One way to distinguish a good from a service is that a service is inseparable from the service provider.
a. True
b. False
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ANSWER: True

116. A local gas station has installed a new food and beverage mart. Since this represents a service outside the gas
station’s primary business, it falls outside the broad view of product.
a. True
b. False
ANSWER: False

117. Services are perishable and cannot be stockpiled or inventoried.

a. True
b. False
ANSWER: True

118. On the goods-services continuum, a meal at a fine restaurant is considered a pure good, even when one considers that
excellent service is part of what one values in the experience.
a. True
b. False
ANSWER: False

119. A goods-services continuum is a method for visualizing the differences and similarities between goods and services.
a. True
b. False
ANSWER: True

120. Hair styling is a pure service.

a. True
b. False
ANSWER: True

121. Internet security software that requires periodic updates and annual product upgrades is considered a pure service on
the goods-services continuum.
a. True
b. False
ANSWER: False

122. Hotels often use the same room decor and dining menu at all their locations in an attempt to standardize the services
they offer.
a. True
b. False
ANSWER: True

123. Service transactions seldom require interaction between buyer and seller at the production and distribution stages.
a. True
b. False
ANSWER: False
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124. The service sector of the Canadian economy is one-third as large as the manufacturing sector.
a. True
b. False
ANSWER: False

125. Increased competition has forced traditional service industries to de-emphasize the marketing mix and focus on
superior customer service in order to compete effectively in the marketplace.
a. True
b. False
ANSWER: False

126. Services are growing in importance because of increased consumer demands for speed and convenience and
technological advances that allow firms to fulfill this demand.
a. True
b. False
ANSWER: True

127. Competitive advantages are not possible in the service sector, so service providers must find other ways to
differentiate themselves.
a. True
b. False
ANSWER: False

128. Homeshoring is the practice of hiring workers to do jobs from home.

a. True
b. False
ANSWER: True

129. Firms that practice homeshoring experience the benefit of reduction in the use of energy and other natural resources
thereby decreasing their impact on the environment.
a. True
b. False
ANSWER: True

130. Product strategies are essentially the same for consumer and business markets.
a. True
b. False
ANSWER: False

131. The majority of consumer products can be classified as unsought products.

a. True
b. False
ANSWER: False

132. An Automated Teller Machine (ATM) is an example of a convenience service.

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a. True
b. False
ANSWER: False

133. Impulse purchase items are marketed to consumers who may not yet recognize a need for them.
a. True
b. False
ANSWER: False

134. Examples of impulse goods and services include stopping at a car wash on the way home or buying a pack of gum
while standing in the checkout line.
a. True
b. False
ANSWER: True

135. A product a customer keeps on hand and replenishes when the product runs out is called a staple.
a. True
b. False
ANSWER: True

136. Emergency goods are purchased after careful reflection on whether they are really needed.
a. True
b. False
ANSWER: False

137. As consumers devote little effort to convenience product purchase decisions, marketers must strive to make these
exchanges as simple as possible.
a. True
b. False
ANSWER: True

138. Two of the most important variables in the purchase of a convenience product are the location of the store and the
location of the product within the store.
a. True
b. False
ANSWER: True

139. Shopping products can be goods or services. In either case, the purchaser of a shopping product lacks complete
information prior to the buying trip and gathers information during the buying process.
a. True
b. False
ANSWER: True

140. Homogeneous products can be easily differentiated, often using obvious characteristics such as style, colour, and fit.
a. True
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b. False
ANSWER: False

141. Thomasville Furniture Company aggressively markets its bedroom and kitchen furniture. Since these products are
well known, price is likely to be the only factor on which consumers will base their decisions.
a. True
b. False
ANSWER: False

142. Some specialty product companies intentionally limit the range of retailers that carry their products in order to add to
the prestige.
a. True
b. False
ANSWER: True

143. A slotting allowance is money paid by a producer to a retailer to guarantee display of its merchandise.
a. True
b. False
ANSWER: True

144. In terms of planning time involved in a purchase, convenience and specialty products take very little time, while
shopping products take an extensive amount of time.
a. True
b. False
ANSWER: False

145. Shopping products typically cost less than convenience purchases.

a. True
b. False
ANSWER: False

146. Service firms may serve consumer markets or business markets, but not both.
a. True
b. False
ANSWER: False

147. One of the major problems with the classification system for consumer products is that not all goods and services fit
into just one category.
a. True
b. False
ANSWER: True

148. Consumer products are classified as convenience, shopping, and specialty.

a. True
b. False
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ANSWER: True

149. In the case of shopping products, a store’s name and reputation have considerable influence on people’s buying
behaviour.
a. True
b. False
ANSWER: True

150. Representatives that sell installations to the business market often provide technical expertise along with tangible
goods.
a. True
b. False
ANSWER: True

151. Price typically does not dominate purchase decisions for installations in the business market. The purchasing firm
buys such products on the basis of efficiency and performance.
a. True
b. False
ANSWER: True

152. The classification system for business products emphasizes customer buying behaviour rather than product uses.
a. True
b. False
ANSWER: False

153. If a company that is marketing installations to the business market uses advertising at all, it emphasizes the
company’s reputation and directs potential buyers to contact local sales representatives.
a. True
b. False
ANSWER: True

154. Accessory equipment for the business market includes products such as hand tools, portable drills, and laptop
computers.
a. True
b. False
ANSWER: True

155. Advertising is seldom an important component in the marketing mix for accessory equipment products.
a. True
b. False
ANSWER: False

156. Installations are major capital investments in the B2B markets and they are often designed specifically for the
purchasers.
a. True

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b. False
ANSWER: True

157. Component parts and materials are unfinished industrial products from one producer that eventually become part of
the finished product of another producer.
a. True
b. False
ANSWER: False

158. Purchasers of component parts and materials need regular, continuous supplies of uniform-quality products.
a. True
b. False
ANSWER: True

159. When Big Bottle Brewing Company purchases barley, malt, and hops, it is assured of standardized raw materials of
uniform quality due to the fact that most raw materials are graded prior to sale.
a. True
b. False
ANSWER: True

160. MRO items, although relatively standardized, are rarely subject to heavy price competition.
a. True
b. False
ANSWER: False

161. Supplies are also called MRO items.

a. True
b. False
ANSWER: True

162. Business buyers do not expect a firm that manufactures one product to make related products as well.
a. True
b. False
ANSWER: False

163. Extensive planning time is required for the purchase of supplies.

a. True
b. False
ANSWER: False

164. Total Quality Management (TQM) improves quality primarily by using end-of-the-line inspections to identify
products that don’t meet specifications.
a. True
b. False
ANSWER: False
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165. Managers are responsible for communicating the goals of total quality management to all staff members.
a. True
b. False
ANSWER: True

166. Excellence Canada defines international criteria for quality management and quality assurance.
a. True
b. False
ANSWER: False

167. The ISO 9001:2008 standards were developed in Asia to assist businesses in selecting suppliers that have met certain
specifications for quality.
a. True
b. False
ANSWER: False

168. Benchmarking seeks to identify how business leaders recognize superior marketing performance in their industries
and develop a system for continuously comparing and measuring performance against outstanding performers.
a. True
b. False
ANSWER: True

169. The purpose of benchmarking is to achieve the minimum acceptable performance for releasing a product into the
marketplace.
a. True
b. False
ANSWER: False

170. Benchmarking is the method of measuring quality by comparing performance against industry leaders.
a. True
b. False
ANSWER: True

171. The three main activities in benchmarking are identifying processes that need improvement, comparing internal
processes against similar activities of industry leaders, and implementing changes to improve quality.
a. True
b. False
ANSWER: True

172. The first step in the benchmarking process is to identify the world’s best performers.
a. True
b. False
ANSWER: False

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173. Benchmarking requires two types of analyses: strategic and tactical.
a. True
b. False
ANSWER: False

174. The service encounter is the point at which the consumer interacts with the service provider.
a. True
b. False
ANSWER: True

175. The expected and perceived quality of a service offering has little effect on the competitiveness of a company.
a. True
b. False
ANSWER: False

176. The majority of firms today market only one product.

a. True
b. False
ANSWER: False

177. A company that decides to offer several complete product lines is most likely interested in growth and enhancing the
company’s position in the market.
a. True
b. False
ANSWER: True

178. Companies with one product line have unlimited growth potential.
a. True
b. False
ANSWER: False

179. Extending a product line allows a firm to maximize sales opportunities without being limited by its resources.
a. True
b. False
ANSWER: False

180. A company limits its growth potential when it concentrates on a single product, even though the company may have
started that way.
a. True
b. False
ANSWER: True

181. SUVs produced by different automobile companies constitute a single product line.
a. True
b. False
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ANSWER: False

182. The product mix is the assortment of product lines and individual product offerings that a company sells.
a. True
b. False
ANSWER: True

183. Marketers typically define product mixes using concepts of size, number, and price.
a. True
b. False
ANSWER: False

184. The length of a product mix refers to the number of different products a firm sells.
a. True
b. False
ANSWER: True

185. Depth of product mix refers to the variations of each product that a firm includes in its mix.
a. True
b. False
ANSWER: True

186. Proctor & Gamble manufactures laundry detergents under the brand names of Tide, Cheer, and Gain. These brands
represent the depth of the product line.
a. True
b. False
ANSWER: False

187. The assortment of product lines and individual product offerings that a company sells is known as its product cluster.
a. True
b. False
ANSWER: False

188. Product line extension refers to the development of items to be included in a product line that are similar to existing
items and are intended as substitutes for them.
a. True
b. False
ANSWER: False

189. Hershey’s introduction of a sugar-free version of its candy bar is an example of line extension.
a. True
b. False
ANSWER: True

190. The product lifecycle concept applies to individual brands of a product.

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a. True
b. False
ANSWER: False

191. Technical problems are common during the introductory stage of the product life cycle as companies fine-tune
product design.
a. True
b. False
ANSWER: True

192. During the initial stage of the product life cycle, firms work to stimulate demand for the new market entry.
a. True
b. False
ANSWER: True

193. Word-of-mouth reports and mass advertising have very little effect on hesitant buyers making an initial product
purchase during the growth stage of the product life cycle.
a. True
b. False
ANSWER: False

194. To compete effectively during the growth stage of a product’s life cycle, firms should not make changes or
improvements to the product.
a. True
b. False
ANSWER: False

195. During the maturity stage of the product life cycle, firms can increase their sales and market shares only at the
expense of their competitors.
a. True
b. False
ANSWER: True

196. During the maturity stage of the product life cycle, the industry sales curve for a product reaches a minimum point as
the competitors exhaust the supply of potential customers.
a. True
b. False
ANSWER: False

197. In the maturity stage of a product lifecycle, differences between competing products diminish as competitors
discover the product and promotional characteristics most desired by customers.
a. True
b. False
ANSWER: True

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198. During the decline stage of the product life cycle, the preferred marketing strategy is to increase prices to ensure
profitability.
a. True
b. False
ANSWER: False

199. Actions taken by marketers early in the introductory stage of the product life cycle can extend the product life cycle
indefinitely.
a. True
b. False
ANSWER: False

200. When a manufacturer of the food condiment vinegar promotes its use as a metal cleaner, the manufacturer is
attempting to extend the product’s life by increasing its frequency of use.
a. True
b. False
ANSWER: False

201. A food company has introduced single-serving cans of soup for one-person households. By offering the traditional
product in a smaller package to reach a new target market, the company hopes to extend the life cycle of its product
offering.
a. True
b. False
ANSWER: True

202. A firm may decide to carry an unprofitable item in its product mix in order to provide a complete line for its
customers.
a. True
b. False
ANSWER: True

203. The decision about whether to delete products from the product line is usually faced during the late growth and early
maturity phases of the product life cycle.
a. True
b. False
ANSWER: False

204. The products whose lifecycles can be extended or stretched indefinitely are referred to as orphan brands.
a. True
b. False
ANSWER: False

205. Occasionally, shortages of raw materials prompt firms to discontinue production and marketing of formerly
profitable products.
a. True
b. False
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ANSWER: True

206. Marketers never drop profitable items from their product lines, even when those items really don’t fit into the
existing product line.
a. True
b. False
ANSWER: False

207. Define product. How do marketers perceive products?

ANSWER: A product is a bundle of physical, service, and symbolic attributes designed to satisfy a customer’s wants and
needs.

Marketers perceive a broader conception of product; they realize that people buy want satisfaction rather than
objects. Marketers think in terms of a product as a compilation of package design and labeling, brand name,
price, availability, warranty, reputation, image, and customer service activities that add value for the customer.

208. List the six factors that distinguish services from goods.
ANSWER: a. Services are intangible.
b. Services are inseparable from providers.
c. Services are perishable.
d. It is difficult for firms to standardize services.
e. Buyers often play important roles in the creation and distribution of services.
f. Service quality shows wide variations.

209. Why is marketing perceived as a significant activity by most service firms?

ANSWER: Most service firms emphasize marketing as a significant activity for two reasons. First, the growth potential of
service transactions represents a vast marketing opportunity. Services involving wireless communications,
data backup and storage, and even meal preparation for busy families are on the rise. Consumer desire for
speed and convenience and technological advances has increased over the years, allowing firms to fulfill this
demand. Second, the environment for services is changing. For instance, increased competition is forcing
traditional service industries to differentiate themselves from their competitors.

210. List and describe the categories of consumer products. How does this grouping influence the method in which the
products are marketed?
ANSWER: The most commonly used classification of consumer products divides products into three groups. Products
consumers wish to purchase frequently, immediately, and with minimal effort are called convenience
products. Products that are purchased after comparisons of product alternatives are made based on factors such
as price, style, and colour are called shopping products. Finally, products possessing some unique
characteristics that cause consumers to prize a particular brand and to exert considerable effort to obtain that
brand are called specialty products.

Knowing the group in which a product belongs helps to describe the behaviour of consumers in regard to
purchase planning time, frequency, willingness to shop, and whether or not there is a connection between the
product price and perceived quality. Further, marketing mix decisions concerning price, promotion, and
distribution are made easier. For example, the prices of convenience products are generally low, while prices
for shopping and specialty goods are relatively higher. Also, the distribution channel length for convenience
products is usually long, while the channel for shopping and specialty goods is shorter.

211. What are the three categories of convenience products? Give examples of each type.
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ANSWER: The three categories of convenience products are impulse goods and services (magazines and candy at the
checkout aisle), staples (toiletries, detergents, milk, bread, and gasoline), and emergency goods and services
(first-aid kits, snow blowers, and bottled water).

212. Discuss the characteristics of shopping products. What are homogeneous and heterogeneous products?
ANSWER: Shopping products are products that the consumer lacks complete information about prior to the purchase, but
gathers needed information about during the buying process. The competitive offerings of shopping products
are compared. Products that consumers consider to be very similar are considered homogeneous, and price and
value are usually the prime consideration in the purchase. Heterogeneous products have perceived differences,
and a purchase may be based on any number of variables, including quality, appeal, uniqueness, colour, and
style.

213. List five questions that classify consumer services.

ANSWER: a. What is the nature of the service?
b. What type of relationship does the service organization have with its customers?
c. How much flexibility is there for customization and judgment on the part of the service provider?
d. Do demand and supply for the service fluctuate?
e. How is the service delivered?

214. Discuss two challenges presented by the consumer product classification system.
ANSWER: First, the consumer product classification system assumes that all products fit neatly into one category. Many
products share characteristics of more than one category. The purchase of an automobile, for example, has
characteristics of both a shopping and specialty product. For some consumers, it may be more of a shopping
product, while for others it may be more of a specialty product. Second, consumers differ in their buying
patterns. For instance, one person may make an emergency visit to a dentist because of a toothache, while
another may extensively compare prices, office hours, and other factors before selecting a dentist.

215. Describe the six categories of business products.

ANSWER: a. Installations are the specialty products of the business market: they include new factories, heavy equipment,
and telecommunications systems.
b. Accessory equipment is capital items that are typically less expensive and shorter lived than installations,
such as hand tools, portable drills, and laptop computers.
c. Component parts and materials are finished business products that actually become part of the final product.
d. Raw materials are similar to component parts and materials in that they are used in producing the final
product. They are farm and natural products, such as eggs, coal, lumber, and meat.
e. Supplies are regular expense items that are necessary in the firm’s daily operation but are not part of the
final product.
f. Business services include intangible products that firms buy to assist with production and operating
expenses.

216. Describe the three categories of supplies.

ANSWER: The three categories of supplies are:

1. Maintenance items, such as brooms and filters

2. Repair items, such as nuts and bolts used in repairing equipment
3. Operating supplies, such as printer paper and cartridges

217. What is Total Quality Management (TQM)?

ANSWER: Total Quality Management (TQM) is a firm’s expectation that employees continually improve products and
work processes with the goal of achieving customer satisfaction and world-class performance.
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218. Define benchmarking and discuss how it helps to improve a marketing strategy.
ANSWER: Benchmarking is a process in which an organization can continuously compare and measure itself against
industry leaders to learn how the best become the best. Its purpose is to achieve superior performance that
results in a competitive advantage in the marketplace.

Benchmarking involves:

a. Identifying processes that need improvement.

b. Comparing internal processes against similar processes of industry leaders in order to determine a firm’s
strengths and weaknesses. This establishes a baseline for comparison. An external analysis does the same for
the firm’s competition. A comparison of both sets of analysis can provide an objective basis for comparison of
one’s firm with all others.
c. Implementing improvements and measuring the effect of new work practices on a continuing basis.

219. What are the five variables of service quality? Define service gap.
ANSWER: The five variables are tangibles, reliability, responsiveness, assurances, and empathy. A service gap is the
difference between the level of service customers expect and the level they think they’ve received. The service
gap can be either favourable (better than expected) or unfavourable (worse than expected).

220. Define product line. Discuss some of the reasons why firms develop product lines.
ANSWER: A product line is a series of related products offered by one company. The text discusses three reasons why
firms develop product line:

1. Desire to grow: a company limits its growth potential when it concentrates on a single product.
2. Enhancing the company’s market position: a company with a line of products often makes itself more
important to both consumers and marketing intermediaries than a firm with only one product.
3. Optimal use of company’s resources: by spreading the costs of its operations over a series of products, an
organization may reduce the average production and marketing costs of each product.

221. What is product mix? How do marketers typically measure product mix?
ANSWER: Product mix refers to an assortment of product lines and individual product offerings a company sells.
Marketers typically measure product mixes according to width, length, and depth. The width of a product mix
refers to the number of product lines the firm offers. The length of a product mix refers to the number of
different products a firm sells. Depth refers to variations in each product the firm markets in its mix.

222. Identify and describe the stages of the product life cycle.
ANSWER: a. Introductory stage: Demand is stimulated for a new market entry. New technical features are often
introduced to a new product category. Promotion campaigns directed toward consumers and channel members
stress information about the new item. Financial losses are common due to high costs associated with
promotion and research and development.
b. Growth stage: This stage begins as demand reaches a level so that the firm begins to realize substantial
profits from its earlier investment. Similar products begin to appear on the market.
c. Maturity stage: Industry sales reach a plateau as the backlog of potential customers dwindles. Competition
intensifies and individual firms’ profits decline. Promotional campaigns emphasize differences between
competing brands. Some firms differentiate their offerings by emphasizing product attributes such as quality,
reliability, and service. Available products exceed industry demand for the first time. Companies can increase
market share only at the expense of competitors’ sales. Prices begin to fall, which usually leads to decreased
revenues for all firms.
d. Decline stage: Innovations and/or shifting consumer preferences lead to an absolute decline in industry
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sales. Industry profits decline or become negative, and firms drop these items from their product lines and seek
to replace them with alternative items.

223. How do elements of the marketing mix change during the product life cycle?
ANSWER: Marketing mix goals in the introductory stage include development of distribution channels and introductory
promotion to stimulate primary demand. Sometimes new product features may also be presented. During the
growth period, with the entrance of competitors, it is important to stimulate trial through promotional
inducements and word-of-mouth in an effort to develop selective demand. Price decreases are a major
marketing mix change in the maturity period as firms seek to gain and maintain market share. Firms may
move into international markets to offset mature domestic markets. Price decreases often continue into the
decline stage. This further decreases profits for many firms and leads to a product deletion decision.

224. Explain the concept of extending the product life cycle, and list actions that can be taken.
ANSWER: Product life-cycle extension is a frequently used strategy taken to add to the time period in which a product
can continue to be profitably sold. Marketing managers can accomplish this and extend product life cycles
indefinitely through actions they can take. Efforts to extend product life cycles can be especially successful if
action is taken in the maturity stage. These actions are:

a. Increasing the frequency of product usage by consumers.

b. Increasing the number of users of the product.
c. Finding new uses for the product.
d. Changing the package size, product labels, or product quality.

Match each item to the statement or sentence listed below.

a. marketing mix
b. benchmarking
c. product
d. convenience product
e. shopping product
f. specialty product
g. product line
h. product mix
i. unsought product
j. maturity stage
k. raw materials
l. total quality management
m. product life cycle
n. installations
o. services
p. impulse goods
q. wholesaler
r. business-to-business (B2B)
s. supplies
t. emergency goods
u. component parts

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v. staples
w. line extension

225. is a continuous effort to improve products and work processes.

ANSWER: l

226. Products bought in response to unexpected and urgent needs are called _____.
ANSWER: t

227. The _____ is the blending of the four strategy elements to fit the needs and preferences of a target market.
ANSWER: a

228. Intangible tasks that satisfy the needs of consumer and business users are called _____.
ANSWER: o

229. Farm products and mineral products are examples of _____.

ANSWER: k

230. Firms often rely on _____ to set performance standards and achieve superior performance, resulting in a competitive
advantage in the marketplace.
ANSWER: c

231. Development of individual offerings that appeal to different market segments while remaining closely related to the
existing product line is referred to as _____.
ANSWER: w

232. Sales of a product category continue to grow during the early part of the _____, but eventually reach a plateau as the
backlog of potential customers dwindles.
ANSWER: j

233. A bundle of physical, service, and symbolic attributes is a(n) _____.

ANSWER: c

234. A product that contributes directly or indirectly to the output of other products for resale is also known as a(n) _____
product.
ANSWER: r

235. A product that is purchased frequently, immediately, and with minimal effort is classified as a(n) _____.
ANSWER: d

236. Channel intermediaries that take title to goods they handle and then distribute these goods to retailers, or business or
B2B customers are known as _____.
ANSWER: q

237. A(n) _____ is marketed to consumers who may not yet recognize the need for it.
ANSWER: i

238. The convenience goods and services that consumers constantly replenish to maintain a ready inventory are called
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_____.
ANSWER: v

239. A product that a consumer purchases after comparing competing offerings is called a(n) _____.
ANSWER: e

240. Products purchased on the spur of the moment are called _____.
ANSWER: p

241. An assortment of product offerings sold by a firm is called the _____.

ANSWER: h

242. A(n) _____ offers unique characteristics that cause buyers to prize those particular brands.
ANSWER: f

243. constitute the regular expenses a firm incurs in its daily operations.
ANSWER: s

244. A series of related products offered by one company is a(n) _____.

ANSWER: g

245. Finished business products of one producer that become part of the final products of another producer are called
_____.
ANSWER: u

246. The specialty products of the business market are called _____.
ANSWER: n

247. A product will progress through four stages, called the _____.
ANSWER: m

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