PRODUCT/SERVICE MANAGEMENT

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

D.

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

C.

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

B.

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

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

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

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

When products are graded by nongovernmental agencies, the grading is: A.Voluntary B.Mandatory C.Periodic D.Occasional

A: Voluntary While grading by governmental agencies is mandatory, grading by nongovernmental agencies is voluntary.

Which is an example of an implied warranty? A.A customer buys a toaster and assumes it will toast bread. B.A jacket’s hang tag states that the fabric is pure wool. C.A television’s label promises a full refund if the set doesn’t work. D.A salesperson tells a customer, “This is the best quality you can buy.”

A: A customer buys a toaster and assumes it will toast bread. An implied warranty is an unwritten warranty understood by the consumer and the seller that the product will perform as expected. The television carries a guarantee – a promise made by the seller to refund the consumer’s purchase price if the product does not perform as expected. The other alternatives are examples of express warranties that are either written or expressed verbally.

Teri purchased a new car and expects for the entertainment system to work smoothly. Which warranty is Teri expecting to be fulfilled? A.Express B.Full C.Limited D.Implied

D: Implied State provided

A customer buys a CD player and receives a printed warranty card stating the action the company will take if the CD player does not work properly. This is an example of a(n) _______ warranty. A.Express B.Full C.Limited D.Implied

A: Express An express warranty is a promise expressed in a specific statement concerning the quality of the product. It may be in written or oral form. An implied warranty is an unwritten warranty that is understood by the consumer and the seller that the product will perform as expected. Not enough information is given to determine the extent of the promise; therefore, we do not know whether the promise covered all repairs (full) or only specific (limited).

How does the use of grades and standards affect the buying and selling process? A.It enables customers to buy without having to inspect each product. B.It provides product information on unsafe products. C.It enables businesses to set high prices. D.It enables salespeople to suggest products without having to determine customer needs.

A: It enables customers to buy without having to inspect each product. The use of grades and standards speeds up the buying and selling process because customers don’t have to inspect each product. It also furnishes information that salespeople can use to justify price, to sell benefits, and to meet customer needs. The use of grades and standards enables salespeople to recommend products that best meet customer needs. Although grades and standards provide product information, they do not address unsafe products. Unsafe products should not be offered since they are a business liability. Product prices will vary based on the product’s grade. Therefore, the prices will not necessarily be high.

What is a purpose of warranties and guarantees? A.To increase customer anxiety about purchases B.To decrease feedback from customers C.To protect the producer and the seller D.To avoid a customer-oriented focus for the business

C: To protect the producer and the seller. A purpose of warranties and guarantees is to protect the producer and the seller. Producers and sellers are protected by well-written warranties and guarantees because the responsibilities to the consumer are clearly defined. The customer is informed at the time of the purchase of the way in which any problems will be handled. This helps to prevent purchasers from making unreasonable claims against producers or sellers. Reduced anxiety about purchases is a customer benefit received from warranties and guarantees. Benefits to the business from warranties and guarantees include attaining a customer-oriented focus for the business and obtaining feedback from customers.

A business’s brand promise is what the business intends to _______. A.) Name its product B.) Sell to the target market C.) Provide the customer D.) Use as a trademark

One way a company can reinforce its image is by ____. A.) Developing a financial plan. B.) Training its employees C.) Conducting a competitive analysis D.) Identifying economic resources

One way of reinforcing the company’s image though employee performance is by making sure employees have ______. A.) Thorough knowledge of the products B.) Comfortable work stations C.) Generous pay and benefit plans D.) Full access to customer databases

When a business publicly pledges to provide all of its customers with quick, courteous service, what is it doing? A.) Making a brand promise B.) Developing a campaign platform C.) Stating industry policies D.) Establishing product position

Explanation Making a brand promise. A brand promise is a business’s agreement, spoken or unspoken, with customers that it will consistently meet their expectations and deliver on its brand characteristics and values. In the example, the brand promise is to provide all customers with quick, courteous service. Developing a campaign platform, stating industry policies, and establishing product position are not activities in which a business is making a pledge or promise to customers.

John communicates through all advertisements that his employees go through extensive training. What is John doing? A.) Making a brand promise B.) Developing a campaign platform C.) Stating industry policies D.) Establishing product position

What will probably happen to a business if it continuously fails to deliver on its brand promise? A.) Lose credibility B.) Improve sales volume C.) Increase market share D.) Decrease liability

Explanation Lose credibility. A brand promise is a business’s agreement, spoken or unspoken, with customers that it will consistently meet their expectations and deliver on its brand characteristics and values. An example of a brand company consistently fails to deliver backorders within 24 hours, customers are likely to become upset, which may cause the company to lose credibility. A business that loses credibility with its customers tends to lose sales and market share because its customers will likely find new sources to fulfill their needs. Liability refers to a debt, that the company owes and does not always affect a company’s ability to fulfill its brand promise.

What is an example of an employee reinforcing a firm’s image through his/her job performance? A.) A customer waits on the telephone for several minutes while Matt confirms shipping information B.) Susan advises her customer that the sofa is only available by special order C.) Jack politely asks if his customer would like a beverage while she/he waits for car service D.) Angela, a human resources manager, prepares the firm’s employee newsletter every month.

Explanation Jack politely asks if his customer would like a beverage while she/he waits for car service. The manner in which employees perform their tasks is an important factor that affects how customers view a business. When an employee is polite and asks a customer if she/he would like a beverage while waiting for a service, the employee is reinforcing a positive view or image of the business. On the other hand, placing a customer on hold, especially if it happens often, might anger the customer and reinforce a negative image of the business. There is not enough information to determine if preparing a newsletter or telling a customer that an item is only available by special order is reinforcing or creating a certain image.

Which of the following is a policy that the WNJ Company might implement to reinforce its image as an efficient and responsive business? A.) Requiring employees to respond to customer inquires within 24 hours B.) Requesting that employees sign their timecards at the end of a pay period C.) Ensuring that employees wear clean uniforms during their shifts D.) Allowing employees to establish their own service standards.