chap010.docx

Chapter 10

Product, Branding, and Packaging Decisions

True / False Questions

1. A product is anything that is of value to a consumer and can be offered through a voluntary exchange. True False

2. Effective packaging and labels send the signal: "Buy me." True False

3. A company's product line consists of its various product mixes. True False

4. Brands enable customers to quickly differentiate one firm or product from another. True False

5. Brand equity is calculated by subtracting sales of generic brands from the sales of branded items in a category. True False

6. The more familiar customers are with a brand, the harder their decision-making process will be. True False

7. Harold is a loyal Coca-Cola drinker. Loyal customers like Harold are typically less price sensitive than other consumers, benefiting businesses like Coca-Cola. True False

8. Copycat brands are imitations often sold by street vendors. True False

9. For a company like Pepsi-Cola, brand dilution occurs when they dilute their product. True False

10. In entertainment licensing, both licensors and licensees run the risk that characters based on books and movies will be just a fad. True False

11. A product label is just a required sticker on a package. True False

12. When purchasing a mobile phone, the product you are buying is more than just the phone. True False

13. A customized carved cedar wood sign for your house is an example of a convenience product. True False

14. For the average college student, a retirement account would be a shopping product. True False

15. Kellogg's sells many different breakfast cereals, including Corn Flakes, Rice Krispies, Frosted Flakes, Raisin Bran, and Special K. This is an indication of the breadth of the Kellogg's product mix. True False

16. If Microsoft decided to sell mobile phones under the Xbox brand (which it uses for its gaming systems), this would be an example of a line extension. True False

Multiple Choice Questions

17. A product is __________ that can be offered through a voluntary marketing exchange.

A. the combination of a firm's marketing mix

B. the brand associations

C. the category depth

D. a tangible item

E. anything of value to consumers

18. In retailing, effective packaging sends the message:

A. More packaging, means more product.

B. Buy me!

C. I have more features than the competition.

D. I am cheaper than the competition.

E. There is nothing toxic inside.

19. The complete set of all products offered by a firm is called its:

A. product line.

B. product categories.

C. product mix.

D. product breadth.

E. product line depth.

20. A __________ is a group of associated items that consumers tend to use together or think of as part of a group of similar products.

A. product line

B. product mix

C. product breadth

D. line extension

E. brand extension

21. For a major university, undergraduate studies, graduate studies, and professional programs would be __________ within the university's product mix.

A. brand associations

B. family brands

C. co-brands

D. product lines

E. private label brands

22. A(n) __________ is a name, symbol, design, or term that identifies a seller's good or service as distinct from those of other sellers.

A. SKUB. product

lineC. supply

chainD. commodi

tyE. bran

d

23. It is almost impossible to watch a sporting event on television without seeing Nike's "swoosh" check mark, which is Nike's:

A. name.

B. symbol.

C. design.

D. term.

E. all of these.

24. A firm's product mix breadth is its:

A. number of items per product line.

B. depth divided by profitability.

C. number of categories that are mutually exclusive.

D. number of product lines.

E. brand equity multiplied by its capacity utilization.

25. __________ is the number of items within a product line.

A. Brand equity

B. Product line breadth

C. Product line depth

D. Product mix depth

E. Product mix breadth

26. Zappos is a successful online shoe company. One of the difficulties in running a shoe company is the need to have significant __________, a large number of items in each product line.

A. brand equity

B. product line breadth

C. product line depth

D. product mix depth

E. product mix breadth

27. Marketers with successful brands sometimes hesitate to expand the use of their brands because:

A. the Federal Trade Commission regulations limit the number of products that can be marketed under an individual brand name.

B. it is costly to maintain many product lines, and might weaken the firm's brand reputation.

C. it is often difficult to get additional marketing communications coverage for the brand.

D. manufacturing divisions usually control brand expansion and are often in conflict with the marketing division.

E. all of these.

28. Firms often add new product lines to:

A. capture new markets.

B. respond to evolving markets.

C. increase sales.

D. compete in new venues.

E. all of these.

29. For many years, General Electric had a corporate strategy of being among the top three firms in any market in which it operated; if it could not achieve a top-three position, it would exit the market. This strategy often resulted in the company __________ when certain product lines failed to meet this expectation.

A. increasing product line depth

B. decreasing product line depth

C. decreasing product mix breadth

D. increasing product mix breadth

E. introducing brand extensions

30. The decision to delete a product is never taken lightly because, generally, manufacturers have:

A. offered the product line to other firms for purchase.

B. made substantial investments in brand development and manufacturing.

C. promised consumers they will maintain the product.

D. used brand repositioning to improve results.

E. all of these.

31. A university that has separate graduate and undergraduate admission offices recognizes that these are distinct:

A. brand associations.

B. product/service lines.

C. product mixes.

D. brands.

E. co-brands.

32. The primary purpose of a brand is to:

A. sell advertising space.

B. minimize product line depth needed to be effective.

C. distinctly identify one seller's goods or services from competitors' offerings.

D. protect product packaging.

E. meet government regulations.

33. Marketers spend billions of dollars annually attempting to build effective brands. The basic benefit of a brand is that it:

A. creates a basis for effective packaging.

B. provides a way for a firm to differentiate its product offerings from those of its competitors.

C. offers consumers promotional parity.

D. allows manufacturers to ignore promotional expenditures.

E. reduces the need for product line depth.

34. For a brand to be effective, it needs to be:

A. easy for consumers to recognize and remember.

B. a catchy, tongue-twisting phrase.

C. a visual image containing human characters.

D. generic, so it can be applied to as many products as possible.

E. associated with a sports or movie superstar.

35. One key feature of the value of a brand is that:

A. it often protects the firm from competition and price competition.

B. it no longer needs to be supported by advertising and promotion.

C. if it becomes a generic name, the brand is worth even more.

D. it cannot be successfully imitated by a retailer's own brand.

E. competitors will frequently abandon a sector altogether rather than compete.

36. When consumers associate a brand with a certain level of quality and familiar attributes allowing consumers to make quick decisions, the brand:

A. establishes novelty.

B. is the only one the consumer will consider.

C. reduces delivery costs.

D. facilitates purchasing.

E. creates brand dilution.

37. Parents of young children have been known to drive out of their way so their kids will not see McDonald's Golden Arches and plead with their parents to stop. For McDonalds, the Golden Arches reduce marketing costs because people (including young children):

A. have memorized the McDonald's menu.

B. prefer yellow to other colors.

C. know what the Golden Arches brand symbol means.

D. recognize increases in product line depth.

E. are sensitive to brand repositioning.

38. Firms with well-known brands can spend relatively less on marketing costs than firms with little-known brands because:

A. brands protect corporate copyrights.

B. consumer loyalty can be bought for less now compared to the past.

C. brand equity can only be obtained by means of product line depth.

D. people already know what the brand means.

E. well-known brands are less likely to introduce brand extensions.

39. Brands are assets that can be legally protected through:

A. copyrights and trademarks.

B. financial reporting.

C. brand extensions.

D. generic branding.

E. corporate branding strategies.

40. Firms with upscale brands like Rolex and Gucci often have to protect their brand assets from:

A. product line depth.

B. counterfeits.

C. generic competition.

D. brand associations.

E. brand extensions.

41. A __________ is one where there is a contractual arrangement between firms allowing one to use its brand name for a fee.

A. franchise brand

B. joint venture brand

C. shared brand

D. common use brand

E. licensed brand

42. The value of a brand is often calculated by assessing the:

A. difference between brand equity and brand liability.

B. corporate profitability divided by the monthly brand earnings.

C. earning potential of the brand over the next 12 months.

D. effect of brand dilution if it occurred.

E. average product line depth.

43. __________ is the set of assets and liabilities linked to a brand that add to or subtract from the value provided by the product or service.

A. Brand positioning

B. Brand licensing

C. Brand association

D. Brand equity

E. Brand solvency

44. Many former Enron employees who had nothing to do with the corporation's financial scandal have found that listing employment with Enron hurt their chances of being hired elsewhere. For these people, the Enron name has:

A. no brand associations.

B. unspent brand loyalty.

C. private label impact.

D. brand dilution.

E. negative brand equity.

45. Firms spend millions of dollars annually to build brand equity, recognizing brand equity contributes to:

A. product mix breadth.

B. corporate stakeholder relations.

C. profitability.

D. brand liability.

E. perceived brand personality.

46. Which of the following is NOT one of the four criteria used for evaluating a brand's equity?

A. Brand awareness.

B. Brand loyalty.

C. Brand associations.

D. Brand conceptualization.

E. Brand perceived value.

47. If many consumers in the marketplace are familiar with a brand and what it stands for and have an opinion about the brand, the brand has considerable:

A. awareness.

B. equity.

C. extension.

D. integration.

E. co-branding.

48. Whether they like them or not, most U.S. automobile customers are familiar with and have an opinion about American-made cars. This familiarity makes it easier for consumers to:

A. meet their self-actualization needs.

B. make purchase decisions.

C. consider repositioning their opinions.

D. pursue generic alternatives.

E. negotiate discounts.

49. Sometimes brand names become synonymous with a product itself. If that happens, the firm:

A. has achieved brand nirvana.

B. could lose its trademark.

C. should try co-branding in order to avoid brand dilution.

D. should consider a new packaging strategy.

E. all of these.

50. Kleenex tissues, Clorox bleach and Scotch tape brands have:

A. successfully employed private label branding.

B. distinctive brand substitutability.

C. grown through private label branding.

D. become synonymous with the product itself.

E. avoided brand extensions.

51. Salina is working to create greater brand awareness for her company's new line of personal digital assistants. To create greater brand awareness Salina will make sure that promotion features the brand:

A. name.

B. logo.

C. packaging.

D. slogan.

E. any or all of these.

52. Why would a firm spend over $2 million for a 30-second ad on television during the Super Bowl?

A. Because of the annual competition for the most creative Super Bowl ad.

B. Because the Super Bowl offers an opportunity to create significant brand awareness.

C. Because the Super Bowl is a significant opportunity to be associated with global marketing.

D. Because Super Bowl ads generate brand loyalty.

E. There is no good reason to spend over $2 million for a Super Bowl ad.

53. Relatively few consumers like to go to the dentist. Dental insurance plans that pay for regular checkups increase the __________ of dental care by reducing the cost to the consumer.

A. perceived value

B. brand awareness

C. brand loyalty

D. generic positioning

E. brand extension

54. In a competitive market, perceived value is determined by consumers mostly:

A. by quantitative analysis of brand personalities.

B. in relationship to the value of competitors' offerings.

C. by weighing primary versus secondary benefits.

D. through investment in product tracking systems.

E. through brand association and brand licensing.

55. Nora is deciding whether to purchase Sport-Ease sneakers or a store brand. She has purchased other Sport-Ease shoes in the past but was only marginally satisfied. In this situation, Nora is likely to purchase the store brand sneakers because they offer:

A. more brand awareness.

B. higher degrees of brand loyalty.

C. greater perceived value.

D. a better brand image.

E. more product line depth.

56. A series of Apple Computer Company ads aired between 2006 and 2010 featured a young, casually-dressed, friendly person as an Apple computer type, while the Microsoft computer person was portrayed as stiff, geeky, and awkward. Apple was trying to create comparative:


B. brand persuasion orientation.

C. brand association orientation.

D. brand extension orientation.

E. brand personalities.

57. Matt was passionate about Abercrombie & Fitch. It was the only place he'd buy his clothes. If anyone asked him about clothes, he would talk for what seemed like hours about why he only shopped there. From a strictly marketing perspective, this word of mouth is part of:

A. social insistence.

B. brand loyalty.

C. self-actualization.

D. motivation.

E. brand extension.

58. Jenna always buys Stacy's brand pita bread chips. She does not even consider alternatives. Jenna is a __________ customer.

A. price sensitive

B. brand persuasion oriented

C. brand association oriented

D. brand extension oriented

E. brand loyal

59. Laura prefers Sony products and will only purchase alternatives when there are no Sony products available. Laura's brand loyalty means she is:

A. relatively insensitive to price.

B. uninformed about the product category.

C. product category committed.

D. a brand equity investor.

E. all of these.

60. For marketers, one of the benefits of having achieved brand loyalty is:

A. recognition through industry awards.

B. lower marketing costs associated with reaching loyal customers.

C. increased price sensitivity among loyal customers.

D. greater concern about competitors' actions.

E. all of these.

61. Lionel Smith Ltd. is a traditional men's clothing store. Every fall the owner sends an embossed invitation (much like a wedding invitation) to his regular customers, inviting them to a private reception showing the new fall line of clothes. For Lionel Smith Ltd., one of the benefits of having established a loyal customer base is:


B. higher marketing costs associated with reaching loyal customers.

C. that he can be less concerned about competitors' actions.

D. increased price sensitivity among loyal customers.

E. all of these.

62. One of the major tools used by marketers to meet the needs of loyal customers is:

A. SKUB. PDQC. IM

FD. CRME. GAT

T

63. Frequent buyer/user award programs are used to:

A. increase price sensitivity.

B. decrease co-branding costs.

C. lower licensing fees.

D. expand product line depth.

E. maintain contact with loyal customers.

64. A personal digital assistant programmed with key customers' birthdates, wine preferences, and food allergies is a __________ tool.

A. SKUB. PDQC. IM

FD. CRME. GAT

T

65. Brands can be owned by:

A. manufacturers only.

B. any firm in the supply chain.

C. retailers only.

D. wholesalers and retailers only.

E. only private label generic retailers.

66. Another name for a manufacturer's brand is a __________ brand.

A. systematic

B. extended

C. national

D. premium

E. private label

67. The basic reason manufacturers spend time and money building their own brands is to:

A. create brand awareness.

B. build brand equity.

C. offset the power of private label manufacturers.

D. create positioning possibilities for their generic product lines.

E. to maximize product line depth.

68. Procter & Gamble (P&G) is a huge national brand manufacturer. By having leading brands like Tide and Crest, P&G:

A. can monopolize store brands.

B. has greater opportunity to dictate retail pricing.

C. has greater control over marketing strategy.

D. can increase brand dilution.

E. all of these.

69. Brands that are owned by __________ are called private-label brands.

A. manufacturers

B. wholesalers

C. supply chain specialists

D. retailers

E. manufacturer's reps

70. Which of the following is NOT one of the types of private label brands?

A. Premium brands

B. Generic brands

C. Copycat brands

D. Exclusive co-brands

E. Experiential brands

71. Becky was very particular. She always chose designer labels and nationally known brands, even if they were more expensive, with one exception. She always bought the store brand chocolate chip cookies from her grocery store. They were high-end cookies, made with real butter and other fresh ingredients. This type of store brand is known as a:

A. manufacturer's brand.

B. distinctive brand.

C. premium brand.

D. value brand.

E. quality brand.

72. Private-label brands are owned and managed by:

A. manufacturers.

B. wholesalers.

C. supply chain specialists.

D. manufacturer's reps.

E. retailers.

73. Private-label brands like Gap and Victoria's Secret have increased in importance along with the increased power of __________ in the supply chain.

A. manufacturers

B. wholesalers


D. retailers


74. Which of the following types of products and services is most likely to be sold as a generic brand?

A. Soda

B. Real estate

C. Automobiles

D. Jeans

E. Onions

75. Brian was working on the floor of a chain electronics store trying to help a confused customer. The customer said, "The television sets look the same, but the model numbers are different and this one is more expensive." Brian explained it was made specifically for his store. This is an example of a specific type of private-label brand, called a(n):

A. store brand.

B. national brand.

C. copycat brand.

D. exclusive co-brand.

E. premium store brand.

76. Consumers might not realize that Old Spice health and wellness products and Iams pet nutrition products are manufactured by the same company--Procter & Gamble. Old Spice and Iams are known as:

A. individual brands

B. family brands

C. corporate brands

D. traditional brands

E. registered brands

77. When Procter & Gamble added tooth whitening products under the Crest brand, the firm was engaged in:

A. corporate branding.

B. brand extension.

C. brand licensing.

D. brand association.

E. perceived value branding.

78. Brand extension is a popular marketing strategy because:

A. it separates out the cost of brand extension from brand intention.

B. it allows the firm to discontinue complementary products.

C. the firm can spend less on creating brand awareness and associations.

D. it avoids the problem of brand dilution.

E. all of these.

79. The potential benefits of brand extension include:

A. It allows the perception of a brand with a quality image to be carried over to the new product.

B. It lowers marketing costs.

C. It can boost sales of the core brand.

D. the firm can spend less on creating brand awareness and associations.

E. all of these.

80. One of the categories of products for which brand extension is logical is:

A. generic goods.

B. generic services.

C. commodities.

D. complementary goods.

E. licensed brands.

81. Jake developed a toothpaste using only natural ingredients, and he has been quite successful selling the product in health food stores and some grocery stores. He has recently developed a toothbrush using bamboo and natural components. Jake is considering a __________, giving the toothbrush the same brand name as the toothpaste in order to have greater brand awareness.

A. co-brand

B. brand extension

C. premium brand

D. joint brand

E. natural brand

82. Brand dilution occurs when:

A. customers don't see the "fit" between products sharing the same brand name.

B. there are too many products and product categories.

C. new brands cannibalize existing brands.

D. customer perceptions about the core brand are adversely affected.

E. All of these.

83. Marco tried a new fruit-flavored beverage and thought it was awful. He was especially disappointed because he had liked the dried fruit snacks marketed under the same brand name. Now he wasn't sure he even wanted to buy the snacks he had liked before. This highlights a problem in branding known as:

A. brand dilution.

B. co-mingled brands.

C. undifferentiated brands.

D. approximated brands.

E. unlicensed brands.

84. __________ occurs when the brand extension adversely affects consumer perceptions about the attributes of the core brand.

A. Corporate branding

B. Brand extraction

C. Brand collusion

D. Brand personality destruction

E. Brand dilution

85. Toyota, a well-established, reputable brand, recently introduced a new line of vehicles under the Scion brand, targeted at young car buyers. Toyota probably used the new brand to:

A. lower advertising costs.

B. appeal to a different market segment.

C. reinforce the Toyota brand image.

D. exploit brand loyalty to Toyota.

E. lower product development costs.

86. Marketers with luxury brands use brand extension cautiously in order to avoid:

A. brand licensing fees.

B. exclusive co-branding arrangements.

C. diluting the core brand.

D. private label branding disputes.

E. product line extension limitations.

87. Shell MasterCard, created cooperatively by Shell Oil Company and Master Card, is an example of:

A. co-branding.

B. brand extraction.

C. brand collusion.

D. a generic brand.

E. brand dilution.

88. Brand licensing is:

A. common for toys.

B. a way to build brand equity.

C. a means of generating additional revenue.

D. widely used by sports teams.

E. all of these.

89. Efforts to change a brand's focus to target new markets or change the image of a brand are called:

A. co-branding.


C. brand collusion.

D. brand repositioning.

E. brand dilution.

90. Brand repositioning refers to a strategy in which marketing changes a brand's focus to target new customers or realign the brand with changing perceptions. Another name for brand repositioning is:

A. strategic brand alteration.

B. change management.

C. rebranding.

D. perception tracking.

E. brand scaling.

91. Ella had been using an imported brand of shampoo for several years, but she could no longer find it anywhere. As she was considering what kind of shampoo to try, she was surprised to see ads for Procter & Gamble's Head and Shoulders, which was being promoted as a glamorous health-oriented product. She had always thought of Head and Shoulders as an anti-dandruff shampoo. The new ads suggest that Head & Shoulders has been:

A. rebranded.

B. reformulated.

C. licensed to a premium shampoo manufacturer.

D. extended as a brand.

E. co-branded.

92. Secondary packaging:

A. can provide information to consumers not found on the primary packaging.

B. is important to the retailer in terms of convenience in handling.

C. can be an important positioning tool by helping to convey the brand image.

D. can allow for cost efficiencies due to larger order and shipment sizes.

E. All of these.

93. A __________ package is the one a consumer uses. A __________ package is used by retailers to display and sell the product.

A. secondary; primary

B. generic; private label

C. primary; secondary

D. corporate; manufacturer's

E. co-branded; licensed

94. Which of the following is NOT one of the important functions of labels on products and packages?

A. Protecting against damage to the product.

B. Providing consumer information to assist in purchasing.

C. Identifying the brand and building brand image.

D. Promoting the brand or complementary brands.

E. Listing ingredients.

95. What U.S., government agency reviews food and package labels to ensure claims made by the manufacturer about the product are true?

A. Federal Trade Commission

B. Federal Communications Commission

C. Consumer Product Safety Administration

D. Food and Drug Administration

E. Interstate Commerce Commission

96. One of the advantages of selling specialty goods and services is that when consumers want them, they will:

A. question the price.

B. consider many alternatives.

C. search for them.

D. perceive greater performance risk.

E. expect them to be offered conveniently.

97. Zappos, an online shoe company, knows shoes are typically a __________ good, with consumers often spending time comparing alternatives. They overcome that aspect of consumers' search process by offering a free, no questions asked return policy.

A. specialty

B. shopping

C. convenience

D. ritual

E. impulse

98. Marketers selling milk, bread, and other consumer staples, know most customers do not spend much time searching or comparing alternatives. For most consumers, these are __________ goods.

A. specialty

B. shopping

C. convenience

D. ritual

E. impulse

99. Andy likes gourmet popcorn, and will spend time trying to find his favorite brand. His girlfriend, Joanne, loves popcorn but doesn't care about brands. For Andy popcorn is a __________ good while for Joanne it is a __________ good.

A. shopping; specialty

B. convenience; shopping

C. convenience; specialty

D. specialty; convenience

E. unique; universal

100.

Marketers need to think about the product offer on three levels. Which of the following levels includes associated services such as warranties, financing, support and after-sale service?

A. Augmented product

B. Core customer value

C. Actual product

D. Modified product

E. Core product

101.

Which of the following is NOT part of the "actual product" level of the product offer?

A. Product warranty

B. Features

C. Design

D. Quality

E. Brand name

102.

When manufacturers try to understand what customers are looking for, they are thinking about the __________ component of the product offer.

A. core customer value

B. associated services

C. augmented products

D. product support

E. quality level

103.

Why would a company choose to use an established brand name when introducing a new product?

A. Since the brand name is already well established, the firm can spend less in developing consumer brand awareness and brand associations for the new product.

B. Since the original brand or the brand extension has strong consumer acceptance, the positive perception will carry over to the other product.

C. An established brand name can be useful when introducing a complementary product.

D. The new product introduction can often be accomplished more quickly when using an established brand name.

E. All of these.

104.

Suppose that Walgreens (a major drug store chain) wants to introduce its own brand of cough medicine that is similar in contents and packaging to a national brand, but at a lower cost. What kind of private-label brand would Walgreens be introducing?

A. Copycat brand

B. Counterfeit brand

C. Premium brand

D. Generic brand

E. Exclusive co-brand

105.

When a company launches a new product line with an existing brand name this is known as:

A. a brand extension.

B. a line extension.

C. a multi-brand.

D. a new brand.

E. co-branding.

106.

Which of the following brand strategies is being used when the local ice cream shop decides to add a new flavor to its menu?

A. A line extension

B. A brand extension

C. A copycat brand

D. A premium brand

E. A multi-brand

107.

When a restaurant chain, Big Burgers, launches its own brand of frozen meals, this is an example of a:

A. brand extension.

B. line extension.

C. licensed brand.

D. copycat brand.

E. premium brand.

108.

Which of the following best describes when Johnson & Johnson introduces a travel sized package for its existing baby oil product?

A. Line extension

B. Brand extension

C. Brand dilution

D. Rebranding

E. Co-branding

109.

What aspect of the product is being described when a used car sales person explains that each car comes with a one-year extended warranty and a two-year maintenance plan?

A. Associated services

B. Actual product

C. Product style

D. Product position

E. Product concept

110.

Some credit cards provide free liability insurance, funded by the bank issuing the card, when a customer pays for a rental car using the card. This extra insurance is an example of:

A. an associated service.

B. the actual product.

C. product style.

D. the product position.

E. the core value.

111.

When a salesperson approaches you to sell a cemetery plot, this is considered what type of product?

A. Unsought product

B. Shopping product

C. Convenience product

D. Line extension

E. Secondary product

Essay Questions

112.

Though most universities are non-profit organizations, they are engaged in marketing strategy choices, just like businesses. For example, universities must decide if they should increase or decrease product mix breadth, or increase or decrease product line depth. Using your university, describe a real or plausible example of each of these four potential changes.

113.

What are the brand components used by your university?

114.

How do brands add value?

115.

Believe it or not, Walmart's first designer label clothing brand was called George. Few Americans know the George brand but in Britain it is well regarded and sold in stand-alone George stores. What would be the benefits to Walmart if the George brand of clothing became recognized and desired in the United States?

116.

How do marketers measure brand value?

117.

Creating brand awareness is the first step in creating brand equity. Political candidates know name recognition is critical to success, but at the Congressional level over 90 percent of incumbents get re-elected. If you were marketing advisor to a challenger for the Congressional seat in your district, what would you recommend the candidate do to create brand/name awareness?

118.

Almost every business wants brand loyal customers. Why?

119.

Helena was surprised to learn that the car and home insurance agency she was just hired by does not have a CRM program. Why should the agency have a CRM program, and what CRM efforts should Helena recommend?

120.

Why would a huge retailer like Walmart carry national brand products?

121.

The company Jorge works for has just acquired a regional grocery store chain. The chain has a very strong reputation among consumers in the states in which it operates. The acquired company had been considering launching private label brands. Jorge has been asked to prepare a brief about the options for retaining the private label brands that the chain had been selling. What are the key points Jorge should include?

122.

Why do manufacturers like Procter & Gamble spend millions of dollars annually creating and maintaining their brands? Why don't they just manufacture their products and sell them under store brand labels?

123.

A currently popular trend in the wine industry is house-labeled wine. Restaurants, hotel chains, and even universities now sell wine under their brand name. Is this type of brand extension a good marketing strategy? Defend your answer.

124.

Walt Disney Company recently announced it would no longer allow its characters to be used in promoting unhealthy foods. In branding strategy, what does this change? From both ethical and marketing perspectives, does this change make sense?

125.

Why would a company like Walmart have a difficult time repositioning itself as a retailer of quality, stylish clothing?

126.

Distinguish between primary and secondary packaging.

127.

Effective marketers recognize a label is much more than just a sticker on a package. What can a label do for a marketer?

128.

Colgate, like any major consumer products company, is always looking for opportunities to expand its product lines. What two industry factors often influence product line expansion decisions?

129.

Strong brands can reduce marketing costs. How do they accomplish that?

130.

In 2005, Sears and K-Mart companies merged, yet today you still can find both Sears and K-Mart stores. Using brand equity, explain why both brands still exist.

131.

What do the following brands have in common: Scotch tape, Kleenex tissues, and Xerox copiers?

132.

What are consumers likely to do if they perceive an inexpensive brand to have about the same quality as a premium brand?

133.

Provide a real-world example of each of these: (1) a national brand, and (2) a private-label brand.

134.

What is the advantage of a corporate or family brand? Provide an example of one.

135.

What is brand extension? Provide an example of brand extension you have encountered.

136.

What is co-branding? Provide an example of co-branding.

137.

Burger King and Häagen-Dazs ice cream once attempted to use co-branding. What is a likely explanation for its failure?

138.

If Eddie Bauer stores allowed a travel company to market adventure travel using the Eddie Bauer brand name, what would Eddie Bauer be doing?

139.

Natalie is designing a primary package for her new peanut butter popcorn. From a consumer's perspective, what should the packaging provide?

140.

When personal computers were new, people spent considerable time and energy learning about and investigating choices and options. Now, many consumers replace old computers with little research or investigation. In terms of types of products (specialty, shopping, convenience goods), how have personal computers changed?

141.

When looking to purchase a mobile phone, describe the components that make up the total product.

142.

Define convenience, shopping and unsought products and give an example of each.

143.

What are some of the benefits provided by product labels?

Chapter 10 Product, Branding, and Packaging Decisions Answer Key

True / False Questions

1.(p. 204)

A product is anything that is of value to a consumer and can be offered through a voluntary exchange. TRUE

This is the definition of a product.

AACSB: Analytic

Blooms: RememberDifficulty: 1 Easy

Learning Objective: 10-01 Describe the components of a product.Topic: Product, Branding, and Packaging Decisions

2.(p. 204)

Effective packaging and labels send the signal: "Buy me." TRUE

Good packaging and labeling can grab the consumer's attention and encourage the consumer to buy.

AACSB: Analytic



3.(p. 207)

A company's product line consists of its various product mixes. FALSE

This is backwards. A company's product mix consists of its various product lines.

AACSB: Analytic

Blooms: RememberDifficulty: 2 Medium

Learning Objective: 10-03 Explain the difference between a product mix's breadth and a product line's depth.Topic: Product Mix and Product Line Decisions

4.(p. 210)

Brands enable customers to quickly differentiate one firm or product from another. TRUE

As consumers become familiar with brands, they can more quickly differentiate between various offerings.

AACSB: Analytic


Learning Objective: 10-04 Identify the advantages that brands provide firms and consumers.Topic: Branding

5.(p. 213)

Brand equity is calculated by subtracting sales of generic brands from the sales of branded items in a category. FALSE

Brand equity is the set of assets and liabilities linked to a brand that add to or subtract from the value provided by the product or service.

AACSB: Analytic

Blooms: UnderstandDifficulty: 2 Medium

Learning Objective: 10-05 Explain the various components of brand equity.Topic: Branding

6.(p. 211)

The more familiar customers are with a brand, the harder their decision-making process will be. FALSE

Familiarity with a brand makes decision making easier, not harder.

AACSB: Analytic



7.(p. 211)

Harold is a loyal Coca-Cola drinker. Loyal customers like Harold are typically less price sensitive than other consumers, benefiting businesses like Coca-Cola. TRUE

One of the benefits of having loyal customers is that they are more likely than the average consumer to stay with the brand through changes such as price increases.

AACSB: Analytic



8.(p. 217)

Copycat brands are imitations often sold by street vendors. FALSE

A copycat brand is a type of private-label brand. It imitates a manufacturer's brand in appearance and packaging, and is usually offered at a lower price.

AACSB: Analytic


Learning Objective: 10-06 Determine the various types of branding strategies used by firms.Topic: Branding Strategies

9.(p. 220)

For a company like Pepsi-Cola, brand dilution occurs when they dilute their product. FALSE

Brand dilution refers to overuse of the brand for brand extensions, such that brand equity becomes weaker.

AACSB: Analytic


Learning Objective: 10-07 Distinguish between brand extension and line extension.Topic: Branding Strategies

10.(p. 222)

In entertainment licensing, both licensors and licensees run the risk that characters based on books and movies will be just a fad. TRUE

The licensor is the party granting the license, while the licensee is the one using the license to produce products using the licensed characters. In case of a fad, the licensee may end up with a warehouse full of products that do not sell.

AACSB: Analytic



11.(p. 224)

A product label is just a required sticker on a package. FALSE

A label is much more than that. It can help to sell the product; it also provides key information, which is sometimes regulated by the government.

AACSB: Analytic


Learning Objective: 10-08 Indicate the advantages of a product's packaging and labeling strategy.Topic: Packaging

12.(p. 205)

When purchasing a mobile phone, the product you are buying is more than just the phone. TRUE

The three components of a product are the core customer value, the actual product, and the associated services. In this case the associated services include the cellular signal.

AACSB: Analytic

Blooms: UnderstandDifficulty: 1 Easy

Learning Objective: 10-01 Describe the components of a product.Topic: Complexity of Products and Types of Products

13.(p. 206)

A customized carved cedar wood sign for your house is an example of a convenience product. FALSE

A specialty product is one toward which customers show a strong preference, such that they will spend time and effort searching for the best suppliers. A customized product such as the cedar sign is a specialty product.

AACSB: Analytic


Learning Objective: 10-02 Identify the types of consumer products.Topic: Complexity of Products and Types of Products

14.(p. 206-207)

For the average college student, a retirement account would be a shopping product. FALSE

Most college students are not thinking of preparing for retirement, so a retirement account would be an unsought product.

AACSB: Analytic



15.(p. 207)

Kellogg's sells many different breakfast cereals, including Corn Flakes, Rice Krispies, Frosted Flakes, Raisin Bran, and Special K. This is an indication of the breadth of the Kellogg's product mix. FALSE

Product line depth (not breadth) equals the number of products within a product line, as in this question.

AACSB: Analytic



16.(p. 219)

If Microsoft decided to sell mobile phones under the Xbox brand (which it uses for its gaming systems), this would be an example of a line extension. FALSE

This is a brand extension, not a line extension. A brand extension is the use of the same brand name in a different product line. Phones and gaming systems are different product lines.

AACSB: Analytic



Multiple Choice Questions

17.(p. 204)

A product is __________ that can be offered through a voluntary marketing exchange.

A. the combination of a firm's marketing mix

B. the brand associations

C. the category depth

D. a tangible item

E. anything of value to consumers

This is the definition of a product. It does not have to be a tangible item; it can also be a service, or a collection of a good and associated services.

AACSB: Analytic



18.(p. 204)

In retailing, effective packaging sends the message:

A. More packaging, means more product.

B.Buy me!

C. I have more features than the competition.

D. I am cheaper than the competition.

E. There is nothing toxic inside.

Packaging can be a valuable promotional tool encouraging the consumer to buy.

AACSB: Analytic



19.(p. 207)

The complete set of all products offered by a firm is called its:

A. product line.

B. product categories.

C. product mix.

D. product breadth.

E. product line depth.

The product mix is the complete set of all the firms' offerings.

AACSB: Analytic



20.(p. 207)

A __________ is a group of associated items that consumers tend to use together or think of as part of a group of similar products.

A.product line

B. product mix

C. product breadth

D. line extension

E. brand extension

A product line is a subset of the product mix, a collection of associated items that consumers either use together or consider to be related to each other.

AACSB: Analytic



21.(p. 207)

For a major university, undergraduate studies, graduate studies, and professional programs would be __________ within the university's product mix.

A. brand associations

B. family brands

C. co-brands

D.product lines

E. private label brands

For the university, these would be product lines. Within each product line would be specific majors.

AACSB: Analytic

Blooms: UnderstandDifficulty: 3 Hard


22.(p. 210)

A(n) __________ is a name, symbol, design, or term that identifies a seller's good or service as distinct from those of other sellers.

A. SKUB. product

lineC. supply

chainD. commodi

tyE. bran

d

This is the definition of a brand. Brands consist of several elements that take on meaning because of the associations created by the firm.

AACSB: Analytic



23.(p. 210)

It is almost impossible to watch a sporting event on television without seeing Nike's "swoosh" check mark, which is Nike's:

A. name.

B.symbol.

C. design.

D. term.

E. all of these.

The "swoosh" is a brand symbol associated with Nike. The firm has invested a great deal of time and money in making the swoosh one of the most recognizable brand symbols in the world.

AACSB: Analytic



24.(p. 208)

A firm's product mix breadth is its:

A. number of items per product line.

B. depth divided by profitability.

C. number of categories that are mutually exclusive.

D.number of product lines.

E. brand equity multiplied by its capacity utilization.

The firm's product mix breadth is the number of product lines. Firms make strategic decisions about the appropriate product mix breadth based on their resources and objectives.

AACSB: Analytic

Blooms: Understand

Difficulty: 2 MediumLearning Objective: 10-03 Explain the difference between a product mix's breadth and a product line's depth.

Topic: Product Mix and Product Line Decisions

25.(p. 209)

__________ is the number of items within a product line.

A. Brand equity

B. Product line breadth

C. Product line depth

D. Product mix depth

E. Product mix breadth

Product line depth is the number of items in a product line. Firms make strategic decisions about the appropriate product line depth based on their resources and objectives.

AACSB: Analytic



26.(p. 209)

Zappos is a successful online shoe company. One of the difficulties in running a shoe company is the need to have significant __________, a large number of items in each product line.

A. brand equity

B. product line breadth

C. product line depth

D. product mix depth

E. product mix breadth

Product line depth is the number of items in a product line. Zappos promises its customers a huge selection, and so must maintain great product line depth.

AACSB: Analytic



27.(p. 208)

Marketers with successful brands sometimes hesitate to expand the use of their brands because:

A. the Federal Trade Commission regulations limit the number of products that can be marketed under an individual brand name.

B. it is costly to maintain many product lines, and might weaken the firm's brand reputation.

C. it is often difficult to get additional marketing communications coverage for the brand.

D. manufacturing divisions usually control brand expansion and are often in conflict with the marketing division.

E. all of these.

Each product line involves some additional cost, and if too many product lines are associated with the same brand it can weaken the brand's meaning and reputation.

AACSB: Analytic

Blooms: ApplyDifficulty: 3 Hard


28.(p. 209)

Firms often add new product lines to:

A. capture new markets.

B. respond to evolving markets.

C. increase sales.

D. compete in new venues.

E. all of these.

All of these are reasons why firms might decide to add a product line.

AACSB: Analytic



29.(p. 209)

For many years, General Electric had a corporate strategy of being among the top three firms in any market in which it operated; if it could not achieve a top-three position, it would exit the market. This strategy often resulted in the company __________ when certain product lines failed to meet this expectation.

A. increasing product line depth

B. decreasing product line depth

C. decreasing product mix breadth

D. increasing product mix breadth

E. introducing brand extensions

If GE could not achieve first, second, or third place in a market, it would eliminate a product line, which decreases the product mix breadth.

AACSB: Analytic



30.(p. 210)

The decision to delete a product is never taken lightly because, generally, manufacturers have:

A. offered the product line to other firms for purchase.

B.made substantial investments in brand development and manufacturing.

C. promised consumers they will maintain the product.

D. used brand repositioning to improve results.

E. all of these.

Firms invest in developing new products, and they will not walk away from that investment lightly.

AACSB: Analytic



31.(p. 207)

A university that has separate graduate and undergraduate admission offices recognizes that these are distinct:

A. brand associations.

B.product/service lines.

C. product mixes.

D. brands.

E. co-brands.

Graduate and undergraduate programs at most universities are distinct product lines, with each product line including multiple degrees.

AACSB: Analytic



32.(p. 210)

The primary purpose of a brand is to:

A. sell advertising space.

B. minimize product line depth needed to be effective.

C. distinctly identify one seller's goods or services from competitors' offerings.

D. protect product packaging.

E. meet government regulations.

Brands are intended to differentiate a firm's offerings from those of its competition.

AACSB: Analytic



33.(p. 210)

Marketers spend billions of dollars annually attempting to build effective brands. The basic benefit of a brand is that it:

A. creates a basis for effective packaging.

B.provides a way for a firm to differentiate its product offerings from those of its competitors.

C. offers consumers promotional parity.

D. allows manufacturers to ignore promotional expenditures.

E. reduces the need for product line depth.

Brands are intended to differentiate a firm's offerings from those of its competition.

AACSB: Analytic



34.(p. 210)

For a brand to be effective, it needs to be:

A.easy for consumers to recognize and remember.

B. a catchy, tongue-twisting phrase.

C. a visual image containing human characters.

D. generic, so it can be applied to as many products as possible.

E. associated with a sports or movie superstar.

A brand name should be memorable and easy to recognize.

AACSB: Analytic



35.(p. 211)

One key feature of the value of a brand is that:

A. it often protects the firm from competition and price competition.

B. it no longer needs to be supported by advertising and promotion.

C. if it becomes a generic name, the brand is worth even more.

D. it cannot be successfully imitated by a retailer's own brand.

E. competitors will frequently abandon a sector altogether rather than compete.

Strong brands protect the firm somewhat from competition because the brand differentiates the firm's products, making customers more loyal.

AACSB: Analytic

Blooms: Understand

Difficulty: 2 MediumLearning Objective: 10-04 Identify the advantages that brands provide firms and consumers.

Topic: Branding

36.(p. 211)

When consumers associate a brand with a certain level of quality and familiar attributes allowing consumers to make quick decisions, the brand:

A. establishes novelty.

B. is the only one the consumer will consider.

C. reduces delivery costs.

D.facilitates purchasing.

E. creates brand dilution.

A brand can facilitate purchasing because the customer can quickly recognize it and decide whether or not to purchase it based on brand associations.

AACSB: Analytic

Blooms: ApplyDifficulty: 2 Medium


37.(p. 210)

Parents of young children have been known to drive out of their way so their kids will not see McDonald's Golden Arches and plead with their parents to stop. For McDonalds, the Golden Arches reduce marketing costs because people (including young children):

A. have memorized the McDonald's menu.

B. prefer yellow to other colors.

C. know what the Golden Arches brand symbol means.

D. recognize increases in product line depth.

E. are sensitive to brand repositioning.

The Golden Arches are a brand symbol for McDonald's. The company has invested in ensuring that consumers recognize the symbol and associate it with the brand.

AACSB: Analytic



38.(p. 212)

Firms with well-known brands can spend relatively less on marketing costs than firms with little-known brands because:

A. brands protect corporate copyrights.

B. consumer loyalty can be bought for less now compared to the past.

C. brand equity can only be obtained by means of product line depth.

D.people already know what the brand means.

E. well-known brands are less likely to introduce brand extensions.

Once a brand has established strong associations with its name, the firm may be able to spend less on promotion since consumers already recognize the brand and know what it stands for.

AACSB: Analytic



39.(p. 212)

Brands are assets that can be legally protected through:

A.copyrights and trademarks.

B. financial reporting.

C. brand extensions.

D. generic branding.

E. corporate branding strategies.

Brands can be legally protected through copyrights and trademarks.

AACSB: Analytic



40.(p. 213)

Firms with upscale brands like Rolex and Gucci often have to protect their brand assets from:


B.counterfeits.

C. generic competition.

D. brand associations.

E. brand extensions.

Upscale brands are frequently copied by counterfeiters.

AACSB: Analytic



41.(p. 221)

A __________ is one where there is a contractual arrangement between firms allowing one to use its brand name for a fee.

A. franchise brand

B. joint venture brand

C. shared brand

D. common use brand

E. licensed brand

This is the definition of a licensed brand, such as Ralph Lauren, which firms pay a fee to use.

AACSB: Analytic



42.(p. 213)

The value of a brand is often calculated by assessing the:

A. difference between brand equity and brand liability.

B. corporate profitability divided by the monthly brand earnings.

C. earning potential of the brand over the next 12 months.

D. effect of brand dilution if it occurred.

E. average product line depth.

Earnings potential over the next year offers a rough estimate of a brand's value.

AACSB: Analytic



43.(p. 213)

__________ is the set of assets and liabilities linked to a brand that add to or subtract from the value provided by the product or service.

A. Brand positioning

B. Brand licensing

C. Brand association

D.Brand equity

E. Brand solvency

This is the definition of brand equity.

AACSB: Analytic


Learning Objective: 10-05 Explain the various components of brand equity.

Topic: Branding

44.(p. 213)

Many former Enron employees who had nothing to do with the corporation's financial scandal have found that listing employment with Enron hurt their chances of being hired elsewhere. For these people, the Enron name has:

A. no brand associations.

B. unspent brand loyalty.

C. private label impact.

D. brand dilution.

E. negative brand equity.

The Enron name has negative brand equity for some people, such that some former Enron employees were viewed negatively due to their association with the brand.

AACSB: Analytic



45.(p. 213)

Firms spend millions of dollars annually to build brand equity, recognizing brand equity contributes to:

A. product mix breadth.

B. corporate stakeholder relations.

C. profitability.

D. brand liability.

E. perceived brand personality.

Brands are assets which can product profits if brand equity is built successfully.

AACSB: Analytic



46.(p. 213-215)

Which of the following is NOT one of the four criteria used for evaluating a brand's equity?

A. Brand awareness.

B. Brand loyalty.

C. Brand associations.

D.Brand conceptualization.

E. Brand perceived value.

Brand awareness, brand loyalty, brand associations, and perceived value are the four primary criteria used to evaluate brand equity.

AACSB: Analytic



47.(p. 213)

If many consumers in the marketplace are familiar with a brand and what it stands for and have an opinion about the brand, the brand has considerable:

A.awareness.

B. equity.

C. extension.

D. integration.

E. co-branding.

Brand awareness is familiarity with the brand and what it stands for.

AACSB: Analytic



48.(p. 213)

Whether they like them or not, most U.S. automobile customers are familiar with and have an opinion about American-made cars. This familiarity makes it easier for consumers to:

A. meet their self-actualization needs.

B.make purchase decisions.

C. consider repositioning their opinions.

D. pursue generic alternatives.

E. negotiate discounts.

Familiarity with brands helps consumers to make purchase decisions because they are aware of what the brands stand for, and can use this information to make an appropriate choice.

AACSB: Analytic



49.(p. 213)

Sometimes brand names become synonymous with a product itself. If that happens, the firm:

A. has achieved brand nirvana.

B.could lose its trademark.

C. should try co-branding in order to avoid brand dilution.

D. should consider a new packaging strategy.

E. all of these.

Brand names that become synonymous with the product--like Kleenex, Clorox bleach, and Scotch tape--must protect against the use of the brand name in a generic fashion, or they may lose their trademark on the name.

AACSB: Analytic



50.(p. 213)

Kleenex tissues, Clorox bleach and Scotch tape brands have:

A. successfully employed private label branding.

B. distinctive brand substitutability.

C. grown through private label branding.

D.become synonymous with the product itself.

E. avoided brand extensions.

Brand names that become synonymous with the product--like Kleenex, Clorox bleach, and Scotch tape--must protect against the use of the brand name in a generic fashion, or they may lose their trademark on the name.

AACSB: Analytic

Blooms: Remember

Difficulty: 2 MediumLearning Objective: 10-05 Explain the various components of brand equity.

Topic: Branding

51.(p. 213)

Salina is working to create greater brand awareness for her company's new line of personal digital assistants. To create greater brand awareness Salina will make sure that promotion features the brand:

A. name.

B. logo.

C. packaging.

D. slogan.

E. any or all of these.

Any of these can be used to create brand awareness.

AACSB: Analytic



52.(p. 213)

Why would a firm spend over $2 million for a 30-second ad on television during the Super Bowl?

A. Because of the annual competition for the most creative Super Bowl ad.

B.Because the Super Bowl offers an opportunity to create significant brand awareness.

C. Because the Super Bowl is a significant opportunity to be associated with global marketing.

D. Because Super Bowl ads generate brand loyalty.

E. There is no good reason to spend over $2 million for a Super Bowl ad.

Some firms might agree that it doesn't make sense to spend so much money on a Super Bowl ad; however, the Super Bowl offers a huge TV audience and, with it, a major opportunity to build brand awareness.

AACSB: Analytic



53.(p. 214)

Relatively few consumers like to go to the dentist. Dental insurance plans that pay for regular checkups increase the __________ of dental care by reducing the cost to the consumer.

A.perceived value

B. brand awareness

C. brand loyalty

D. generic positioning

E. brand extension

The perceived value of a good or service is the relationship between its benefits and its costs. By reducing the cost, the value will be seen to be greater.

AACSB: Analytic



54.(p. 214)

In a competitive market, perceived value is determined by consumers mostly:

A. by quantitative analysis of brand personalities.

B. in relationship to the value of competitors' offerings.

C. by weighing primary versus secondary benefits.

D. through investment in product tracking systems.

E. through brand association and brand licensing.

The perceived value of a good or service is the relationship between its benefits and its costs. In a competitive market, these benefits and costs will be easiest to evaluate in comparison to competitive offerings.

AACSB: Analytic

Blooms: Understand

Difficulty: 2 MediumLearning Objective: 10-05 Explain the various components of brand equity.

Topic: Branding

55.(p. 214)

Nora is deciding whether to purchase Sport-Ease sneakers or a store brand. She has purchased other Sport-Ease shoes in the past but was only marginally satisfied. In this situation, Nora is likely to purchase the store brand sneakers because they offer:

A. more brand awareness.

B. higher degrees of brand loyalty.

C. greater perceived value.

D. a better brand image.

E. more product line depth.

Since Nora's past experience with name brands has been marginal, she might prefer to buy the store brand, which is probably less expensive and might therefore provide better value.

AACSB: Analytic



56.(p. 215)

A series of Apple Computer Company ads aired between 2006 and 2010 featured a young, casually-dressed, friendly person as an Apple computer type, while the Microsoft computer person was portrayed as stiff, geeky, and awkward. Apple was trying to create comparative:


B. brand persuasion orientation.

C. brand association orientation.

D. brand extension orientation.

E. brand personalities.

Apple was trying to establish brand personalities for each, by associating human characteristics with the brands.

AACSB: Analytic



57.(p. 215)

Matt was passionate about Abercrombie & Fitch. It was the only place he'd buy his clothes. If anyone asked him about clothes, he would talk for what seemed like hours about why he only shopped there. From a strictly marketing perspective, this word of mouth is part of:

A. social insistence.

B.brand loyalty.

C. self-actualization.

D. motivation.

E. brand extension.

Matt's word of mouth behavior is an outcome of his brand loyalty.

AACSB: Analytic



58.(p. 215)

Jenna always buys Stacy's brand pita bread chips. She does not even consider alternatives. Jenna is a __________ customer.

A. price sensitive

B. brand persuasion oriented

C. brand association oriented

D. brand extension oriented

E. brand loyal

Since Jenna does not consider other brands, she is brand loyal.

AACSB: Analytic



59.(p. 215)

Laura prefers Sony products and will only purchase alternatives when there are no Sony products available. Laura's brand loyalty means she is:

A. relatively insensitive to price.

B. uninformed about the product category.

C. product category committed.

D. a brand equity investor.

E. all of these.

Because Laura is loyal to Sony, she is likely to stay with the brand even if the price rises or if competitors offer cheaper options. This means that she is less price sensitive.

AACSB: Analytic



60.(p. 215)

For marketers, one of the benefits of having achieved brand loyalty is:


B. lower marketing costs associated with reaching loyal customers.

C. increased price sensitivity among loyal customers.

D. greater concern about competitors' actions.

E. all of these.

Brand loyal customers are already convinced of the brand's value. It is not necessary to spend large sums of money to build awareness and preference for the brand among these customers.

AACSB: Analytic



61.(p. 215)

Lionel Smith Ltd. is a traditional men's clothing store. Every fall the owner sends an embossed invitation (much like a wedding invitation) to his regular customers, inviting them to a private reception showing the new fall line of clothes. For Lionel Smith Ltd., one of the benefits of having established a loyal customer base is:


B. higher marketing costs associated with reaching loyal customers.

C. that he can be less concerned about competitors' actions.

D. increased price sensitivity among loyal customers.

E. all of these.

Loyal customers are less likely to switch brands due to competitor actions.

AACSB: Analytic

Blooms: Apply

Difficulty: 3 HardLearning Objective: 10-05 Explain the various components of brand equity.

Topic: Branding

62.(p. 215)

One of the major tools used by marketers to meet the needs of loyal customers is:

A. SKUB. PDQC. IM

FD.CRME. GAT

T

CRM (customer relationship management) programs often include reward programs aimed at loyal customers.

AACSB: Analytic



63.(p. 215)

Frequent buyer/user award programs are used to:

A. increase price sensitivity.

B. decrease co-branding costs.

C. lower licensing fees.

D. expand product line depth.

E. maintain contact with loyal customers.

Frequent buyer programs and similar loyalty programs are often part of a CRM (customer relationship management) program.

AACSB: Analytic



64.(p. 215)

A personal digital assistant programmed with key customers' birthdates, wine preferences, and food allergies is a __________ tool.

A. SKUB. PDQC. IM

FD.CRME. GAT

T

CRM (customer relationship management) programs typically include tracking of customer information to allow the firm to customize the relationship.

AACSB: Analytic



65.(p. 216)

Brands can be owned by:

A. manufacturers only.

B.any firm in the supply chain.

C. retailers only.

D. wholesalers and retailers only.

E. only private label generic retailers.

Any firm in the supply chain--manufacturer, retailer, distributor, and so on--can own a brand.

AACSB: Analytic



66.(p. 216)

Another name for a manufacturer's brand is a __________ brand.

A. systematic

B. extended

C. national

D. premium

E. private label

The terms "manufacturer's brand" and "national brand" both refer to brands owned and managed by manufacturers.

AACSB: Analytic



67.(p. 216)

The basic reason manufacturers spend time and money building their own brands is to:

A. create brand awareness.

B.build brand equity.

C. offset the power of private label manufacturers.

D. create positioning possibilities for their generic product lines.

E. to maximize product line depth.

Companies invest in brands to build brand equity, which is a corporate asset.

AACSB: Analytic



68.(p. 216)

Procter & Gamble (P&G) is a huge national brand manufacturer. By having leading brands like Tide and Crest, P&G:

A. can monopolize store brands.

B. has greater opportunity to dictate retail pricing.

C. has greater control over marketing strategy.

D. can increase brand dilution.

E. all of these.

Brand ownership gives the owner greater control over marketing strategy--the ability to position the brand and to establish the marketing mix.

AACSB: Analytic



69.(p. 216)

Brands that are owned by __________ are called private-label brands.

A. manufacturers

B. wholesalers


D.retailers


Brands owned by retailers are called store brands, house brands, own brands, or private-label brands.

AACSB: Analytic



70.(p. 217-218)

Which of the following is NOT one of the types of private label brands?

A. Premium brands

B. Generic brands

C. Copycat brands

D. Exclusive co-brands

E. Experiential brands

There are four types of private-label brands: premium, generic, copycat, and exclusive co-brands.

AACSB: Analytic



71.(p. 217)

Becky was very particular. She always chose designer labels and nationally known brands, even if they were more expensive, with one exception. She always bought the store brand chocolate chip cookies from her grocery store. They were high-end cookies, made with real butter and other fresh ingredients. This type of store brand is known as a:

A. manufacturer's brand.

B. distinctive brand.

C. premium brand.

D. value brand.

E. quality brand.

The cookies are a premium brand, a type of private-label brand that competes primarily on quality, not price.

AACSB: Analytic



72.(p. 216-217)

Private-label brands are owned and managed by:

A. manufacturers.

B. wholesalers.

C. supply chain specialists.

D. manufacturer's reps.

E. retailers.

Private-label brands are brands managed by retailers.

AACSB: Analytic

Blooms: Remember

Difficulty: 1 EasyLearning Objective: 10-06 Determine the various types of branding strategies used by firms.

Topic: Branding Strategies

73.(p. 217)

Private-label brands like Gap and Victoria's Secret have increased in importance along with the increased power of __________ in the supply chain.

A. manufacturers

B. wholesalers


D.retailers


Retailers have gained power in the supply chain, in part because of the growing popularity of their private label brands.

AACSB: Analytic



74.(p. 217)

Which of the following types of products and services is most likely to be sold as a generic brand?

A. Soda

B. Real estate

C. Automobiles

D. Jeans

E. Onions

Generic brands are most appropriate for commodities, including some produce (though branded produce--Dole bananas, for example--also exists).

AACSB: Analytic



75.(p. 218)

Brian was working on the floor of a chain electronics store trying to help a confused customer. The customer said, "The television sets look the same, but the model numbers are different and this one is more expensive." Brian explained it was made specifically for his store. This is an example of a specific type of private-label brand, called a(n):

A. store brand.

B. national brand.

C. copycat brand.

D.exclusive co-brand.

E. premium store brand.

This is an exclusive co-brand, where a manufacturer builds a product for exclusive sale by a particular retailer under a private-label brand name.

AACSB: Analytic



76.(p. 219)

Consumers might not realize that Old Spice health and wellness products and Iams pet nutrition products are manufactured by the same company--Procter & Gamble. Old Spice and Iams are known as:

A. individual brands

B. family brands

C. corporate brands

D. traditional brands

E. registered brands

Old Spice and Iams are individual brands, separate brand names for different product lines.

AACSB: Analytic



77.(p. 219)

When Procter & Gamble added tooth whitening products under the Crest brand, the firm was engaged in:

A. corporate branding.

B.brand extension.

C. brand licensing.

D. brand association.

E. perceived value branding.

This was a brand extension, using the Crest brand name for a new product line.

AACSB: Analytic



78.(p. 220)

Brand extension is a popular marketing strategy because:

A. it separates out the cost of brand extension from brand intention.

B. it allows the firm to discontinue complementary products.

C. the firm can spend less on creating brand awareness and associations.

D. it avoids the problem of brand dilution.

E. all of these.

Since consumers are already familiar with the brand name, existing awareness and associations will transfer to the new product.

AACSB: Analytic



79.(p. 220)

The potential benefits of brand extension include:

A. It allows the perception of a brand with a quality image to be carried over to the new product.

B. It lowers marketing costs.

C. It can boost sales of the core brand.

D. the firm can spend less on creating brand awareness and associations.

E. all of these.

Since consumers are already familiar with the brand name, existing awareness and associations will transfer to the new product. In addition, benefits may transfer back to the core brand and increase its sales.

AACSB: Analytic



80.(p. 220)

One of the categories of products for which brand extension is logical is:

A. generic goods.

B. generic services.

C. commodities.

D.complementary goods.

E. licensed brands.

Complementary products are those which are used together--for example, chips and dip, or toothbrushes and toothpaste. It can often make sense to extend a brand to offer a complementary product under the same brand name.

AACSB: Analytic



81.(p. 219)

Jake developed a toothpaste using only natural ingredients, and he has been quite successful selling the product in health food stores and some grocery stores. He has recently developed a toothbrush using bamboo and natural components. Jake is considering a __________, giving the toothbrush the same brand name as the toothpaste in order to have greater brand awareness.

A. co-brand

B.brand extension

C. premium brand

D. joint brand

E. natural brand

If Jake gives the toothbrush the same brand name as his existing toothpaste, this is a brand extension, adding a new product line (toothbrushes) to his existing brand.

AACSB: Analytic



82.(p. 220)

Brand dilution occurs when:

A. customers don't see the "fit" between products sharing the same brand name.

B. there are too many products and product categories.

C. new brands cannibalize existing brands.

D. customer perceptions about the core brand are adversely affected.

E. All of these.

These are all reasons why brand dilution (the weakening of brand equity) can occur when brands are extended too much or in inappropriate ways.

AACSB: Analytic



83.(p. 220)

Marco tried a new fruit-flavored beverage and thought it was awful. He was especially disappointed because he had liked the dried fruit snacks marketed under the same brand name. Now he wasn't sure he even wanted to buy the snacks he had liked before. This highlights a problem in branding known as:

A.brand dilution.

B. co-mingled brands.

C. undifferentiated brands.

D. approximated brands.

E. unlicensed brands.

This is an example of brand dilution--the weakening of the core brand due to extensive or inappropriate extensions.

AACSB: Analytic

Blooms: Apply

Difficulty: 3 HardLearning Objective: 10-07 Distinguish between brand extension and line extension.


84.(p. 220)

__________ occurs when the brand extension adversely affects consumer perceptions about the attributes of the core brand.

A. Corporate branding

B. Brand extraction

C. Brand collusion

D. Brand personality destruction

E. Brand dilution

This is the definition of brand dilution.

AACSB: Analytic



85.(p. 220)

Toyota, a well-established, reputable brand, recently introduced a new line of vehicles under the Scion brand, targeted at young car buyers. Toyota probably used the new brand to:

A. lower advertising costs.

B.appeal to a different market segment.

C. reinforce the Toyota brand image.

D. exploit brand loyalty to Toyota.

E. lower product development costs.

Toyota probably chose to use a new brand in order to target young people.

AACSB: Analytic



86.(p. 220)

Marketers with luxury brands use brand extension cautiously in order to avoid:

A. brand licensing fees.

B. exclusive co-branding arrangements.

C. diluting the core brand.

D. private label branding disputes.

E. product line extension limitations.

If brand extensions are not executed carefully, they can dilute the core brand by damaging its associations and equity.

AACSB: Analytic



87.(p. 220)

Shell MasterCard, created cooperatively by Shell Oil Company and Master Card, is an example of:

A.co-branding.


C. brand collusion.

D. a generic brand.

E. brand dilution.

This is a co-branding arrangement, in which two brands lend their names to a cooperative venture.

AACSB: Analytic



88.(p. 221)

Brand licensing is:

A. common for toys.

B. a way to build brand equity.

C. a means of generating additional revenue.

D. widely used by sports teams.

E. all of these.

All of these are true about brand licensing, an arrangement in which a company pays for permission to attach another firm's brand to its products.

AACSB: Analytic



89.(p. 222)

Efforts to change a brand's focus to target new markets or change the image of a brand are called:

A. co-branding.


C. brand collusion.

D.brand repositioning.

E. brand dilution.

Efforts to change the brand's focus or image are referred to as brand repositioning or rebranding.

AACSB: Analytic



90.(p. 222)

Brand repositioning refers to a strategy in which marketing changes a brand's focus to target new customers or realign the brand with changing perceptions. Another name for brand repositioning is:

A. strategic brand alteration.

B. change management.

C. rebranding.

D. perception tracking.

E. brand scaling.

Efforts to change the brand's focus or image are referred to as brand repositioning or rebranding.

AACSB: Analytic



91.(p. 222)

Ella had been using an imported brand of shampoo for several years, but she could no longer find it anywhere. As she was considering what kind of shampoo to try, she was surprised to see ads for Procter & Gamble's Head and Shoulders, which was being promoted as a glamorous health-oriented product. She had always thought of Head and Shoulders as an anti-dandruff shampoo. The new ads suggest that Head & Shoulders has been:

A. rebranded.

B. reformulated.

C. licensed to a premium shampoo manufacturer.

D. extended as a brand.

E. co-branded.

Head and Shoulders has been rebranded (also referred to as brand repositioning) to give it a health-oriented image. While it is possible that it may have been reformulated, it is equally likely that the rebranding consists strictly of changes in positioning and marketing communications.

AACSB: Analytic



92.(p. 223)

Secondary packaging:

A. can provide information to consumers not found on the primary packaging.

B. is important to the retailer in terms of convenience in handling.

C. can be an important positioning tool by helping to convey the brand image.

D. can allow for cost efficiencies due to larger order and shipment sizes.

E. All of these.

Secondary packaging--the wrapper or exterior carton that contains the primary package--fills many roles, including all of those listed here.

AACSB: Analytic



93.(p. 223)

A __________ package is the one a consumer uses. A __________ package is used by retailers to display and sell the product.

A. secondary; primary

B. generic; private label

C. primary; secondary

D. corporate; manufacturer's

E. co-branded; licensed

The primary package is the package the consumer uses (for example, a toothpaste tube), while the secondary package is used by retailers to display the product (for example, the box the toothpaste tube comes in).

AACSB: Analytic



94.(p. 224-225)

Which of the following is NOT one of the important functions of labels on products and packages?

A.Protecting against damage to the product.

B. Providing consumer information to assist in purchasing.

C. Identifying the brand and building brand image.

D. Promoting the brand or complementary brands.

E. Listing ingredients.

The package might protect against damage to the product, but that is not a function of the label.

AACSB: Analytic



95.(p. 225)

What U.S., government agency reviews food and package labels to ensure claims made by the manufacturer about the product are true?

A. Federal Trade Commission

B. Federal Communications Commission

C. Consumer Product Safety Administration

D.Food and Drug Administration

E. Interstate Commerce Commission

The U.S. Food and Drug Administration reviews food and package labels.

AACSB: Analytic



96.(p. 206)

One of the advantages of selling specialty goods and services is that when consumers want them, they will:

A. question the price.

B. consider many alternatives.

C. search for them.

D. perceive greater performance risk.

E. expect them to be offered conveniently.

Specialty products are those for which customers show such a preference that they will invest effort in finding them.

AACSB: Analytic



97.(p. 206)

Zappos, an online shoe company, knows shoes are typically a __________ good, with consumers often spending time comparing alternatives. They overcome that aspect of consumers' search process by offering a free, no questions asked return policy.

A. specialty

B.shopping

C. convenience

D. ritual

E. impulse

Shoes are typically a shopping good, where consumers compare alternatives.

AACSB: Analytic



98.(p. 206)

Marketers selling milk, bread, and other consumer staples, know most customers do not spend much time searching or comparing alternatives. For most consumers, these are __________ goods.

A. specialty

B. shopping

C. convenience

D. ritual

E. impulse

Milk, bread, and other consumer staples are convenience goods for most shoppers. They will not compare many alternatives, but will simply purchase what they need.

AACSB: Analytic



99.(p. 206)

Andy likes gourmet popcorn, and will spend time trying to find his favorite brand. His girlfriend, Joanne, loves popcorn but doesn't care about brands. For Andy popcorn is a __________ good while for Joanne it is a __________ good.

A. shopping; specialty

B. convenience; shopping

C. convenience; specialty

D.specialty; convenience

E. unique; universal

For Andy, popcorn is a specialty product--he is willing to spend time finding his favorite brand. For Joanne, it is a convenience good--she doesn't care about brands and so is unlikely to comparison shop.

AACSB: Analytic



100.(p. 205)

Marketers need to think about the product offer on three levels. Which of the following levels includes associated services such as warranties, financing, support and after-sale service?

A.Augmented product

B. Core customer value

C. Actual product

D. Modified product

E. Core product

The augmented product includes associated services such as a warranty and a customer service line dedicated to product support.

AACSB: Analytic



101.(p. 205)

Which of the following is NOT part of the "actual product" level of the product offer?

A.Product warranty

B. Features

C. Design

D. Quality

E. Brand name

The "actual product" is made up of the Brand Name, Quality Level, Packaging and Features and Design. The product warranty is one of the associated services included in the augmented product.

AACSB: Analytic



102.(p. 205)

When manufacturers try to understand what customers are looking for, they are thinking about the __________ component of the product offer.

A.core customer value

B. associated services

C. augmented products

D. product support

E. quality level

The manufacturer is concerned with understanding the core value that the customer seeks.

AACSB: Analytic

Blooms: Remember

Difficulty: 2 MediumLearning Objective: 10-01 Describe the components of a product.

Topic: Complexity of Products and Types of Products

103.(p. 220)

Why would a company choose to use an established brand name when introducing a new product?

A. Since the brand name is already well established, the firm can spend less in developing consumer brand awareness and brand associations for the new product.

B. Since the original brand or the brand extension has strong consumer acceptance, the positive perception will carry over to the other product.

C. An established brand name can be useful when introducing a complementary product.

D. The new product introduction can often be accomplished more quickly when using an established brand name.

E. All of these.

There are several advantages to using the same brand name for new products, as shown above.

AACSB: Analytic



104.(p. 217)

Suppose that Walgreens (a major drug store chain) wants to introduce its own brand of cough medicine that is similar in contents and packaging to a national brand, but at a lower cost. What kind of private-label brand would Walgreens be introducing?

A.Copycat brand

B. Counterfeit brand

C. Premium brand

D. Generic brand

E. Exclusive co-brand

Copycat brands imitate the manufacturer's brand in appearance and packaging, generally perceived as lower quality, and are offered at lower prices.

AACSB: Analytic



105.(p. 219)

When a company launches a new product line with an existing brand name this is known as:

A.a brand extension.

B. a line extension.

C. a multi-brand.

D. a new brand.

E. co-branding.

A brand extension refers to the use of the same brand name for a new product line.

AACSB: Analytic



106.(p. 220)

Which of the following brand strategies is being used when the local ice cream shop decides to add a new flavor to its menu?

A.A line extension

B. A brand extension

C. A copycat brand

D. A premium brand

E. A multi-brand

A line extension is the use of the same brand name within the same product line, and represents an increase in a product line's depth.

AACSB: Analytic



107.(p. 219)

When a restaurant chain, Big Burgers, launches its own brand of frozen meals, this is an example of a:

A.brand extension.

B. line extension.

C. licensed brand.

D. copycat brand.

E. premium brand.

A brand extension refers to the use of the same brand name in different product line.

AACSB: Analytic



108.(p. 220)

Which of the following best describes when Johnson & Johnson introduces a travel sized package for its existing baby oil product?

A.Line extension

B. Brand extension

C. Brand dilution

D. Rebranding

E. Co-branding

A line extension is the use of the same brand name within the same product line, and represents an increase in a product line's depth.

AACSB: Analytic



109.(p. 205)

What aspect of the product is being described when a used car sales person explains that each car comes with a one-year extended warranty and a two-year maintenance plan?

A.Associated services

B. Actual product

C. Product style

D. Product position

E. Product concept

Associated services are the nonphysical aspects of the product such as product warranties.

AACSB: Analytic

Blooms: Understand

Difficulty: 2 MediumLearning Objective: 10-01 Describe the components of a product.

Topic: Complexity of Products and Types of Products

110.(p. 205)

Some credit cards provide free liability insurance, funded by the bank issuing the card, when a customer pays for a rental car using the card. This extra insurance is an example of:

A.an associated service.

B. the actual product.

C. product style.

D. the product position.

E. the core value.

Associated services are related to the nonphysical aspects of the product such as product warranties.

AACSB: Analytic



111.(p. 207)

When a salesperson approaches you to sell a cemetery plot, this is considered what type of product?

A.Unsought product

B. Shopping product

C. Convenience product

D. Line extension

E. Secondary product

An unsought product or service is a product consumers either do not normally think of buying or do not know about.

AACSB: Analytic


Learning Objective: 10-02 Identify the types of consumer products.Topic: Branding

Essay Questions

112.(p. 207-210)

Though most universities are non-profit organizations, they are engaged in marketing strategy choices, just like businesses. For example, universities must decide if they should increase or decrease product mix breadth, or increase or decrease product line depth. Using your university, describe a real or plausible example of each of these four potential changes.

Answers will vary, but an increase in product mix breadth involves adding a new product line. Depending on the size of the university and the number of degrees, this might involve adding a new department or a new school. An increase in product line depth might be to add a new major in a department or school, or a new program within a department (such as a degree that can be earned online).

AACSB: Analytic

Blooms: Apply

Difficulty: 3 HardLearning Objective: 10-03 Explain the difference between a product mix's breadth and a product line's depth.

Topic: Product Mix and Product Line Decisions

113.(p. 210)

What are the brand components used by your university?

Answers will vary but, for the University of South Carolina they include:The name and abbreviation: which is a problem given the USC in Southern California. South Carolina now uses the abbreviation SC. Also, SC grads refer to themselves as "Carolina" but UNC also uses that name. The URL: sc.edu Unfortunately, Southern Cal registered usc.edu first!The Logo and symbol: the 1802 insignia

Characters: A "Gamecock"Slogan: "Go Cocks".......yes that is the slogan!

Jingle: For many years South Carolina used the music from Star Wars I as its jingle. There is also "Hail to thee, Carolina" but no one knows the words.

AACSB: Analytic



114.(p. 211-213)

How do brands add value?

Brands facilitate purchasing, establish loyalty, protect from competition and price competition, and reduce costs.

AACSB: Analytic



115.(p. 211-213)

Believe it or not, Walmart's first designer label clothing brand was called George. Few Americans know the George brand but in Britain it is well regarded and sold in stand-alone George stores. What would be the benefits to Walmart if the George brand of clothing became recognized and desired in the United States?

The benefits to Walmart would likely include:

- Facilitating purchasing if consumers recognized and perceived it as a quality brand.- Increased consumer loyalty if consumers trust the brand.- Some protection from competition if consumers seek out the brand.- Reduced marketing costs if consumers become familiar with the brand.- Asset value and profit if George became a valued brand, creating the possibility of brand extension too.

AACSB: Analytic



116.(p. 213)

How do marketers measure brand value?

Brand value is calculated by assessing the earning potential of a brand over the next 12 months.

AACSB: Analytic



117.(p. 213)

Creating brand awareness is the first step in creating brand equity. Political candidates know name recognition is critical to success, but at the Congressional level over 90 percent of incumbents get re-elected. If you were marketing advisor to a challenger for the Congressional seat in your district, what would you recommend the candidate do to create brand/name awareness?

Answers will vary but, as the text states, "Marketers create brand awareness through repeated exposures of the various brand elements in the firm's communications to consumers. Such communication media include advertising and promotions, personal selling, sponsorship and event marketing, publicity, and public relations." Students' responses should include some of these.

AACSB: Analytic



118.(p. 215)

Almost every business wants brand loyal customers. Why?

Brand loyalty provides a wealth of benefits to marketers including: reduced consumer sensitivity to price, lower marketing costs to reach loyal customers, a degree of insulation from the actions of competitors, and loyal customers are more profitable.

AACSB: Analytic



119.(p. 215)

Helena was surprised to learn that the car and home insurance agency she was just hired by does not have a CRM program. Why should the agency have a CRM program, and what CRM efforts should Helena recommend?

CRM is customer relationship management. CRM can be used to reward loyal customers and maintain contact with current customers. For a car and home insurance company, reminder advertising like calendars, hats, or other specialty items could be appropriate. An Internet alert system to inform customers about changing insurance laws or a thank you system for customer referrals could all be part of a CRM program.

AACSB: Analytic



120.(p. 216)

Why would a huge retailer like Walmart carry national brand products?

National brands are manufacturer brands. Walmart carries national brands because their customers want them. The branding efforts by manufacturers create perceived value leading consumers to choose national brands over private-label choices.

AACSB: Analytic



121.(p. 217)

The company Jorge works for has just acquired a regional grocery store chain. The chain has a very strong reputation among consumers in the states in which it operates. The acquired company had been considering launching private label brands. Jorge has been asked to prepare a brief about the options for retaining the private label brands that the chain had been selling. What are the key points Jorge should include?

In addition to all the considerations about brands, he should examine whether one of the four types of private brands would provide increased profit margins and loyalty. He will also want to consider whether the chain is going to retain its own name and identity or be merged into the parent company.

AACSB: Analytic



122.(p. 216)

Why do manufacturers like Procter & Gamble spend millions of dollars annually creating and maintaining their brands? Why don't they just manufacture their products and sell them under store brand labels?

Creating and maintaining national brands allows manufacturers like P&G to retain greater control of their marketing strategy; segmentation, positioning, and building brand equity. Some manufacturers do not have their own brands, reducing marketing costs, but P&G has established brand equity which would be lost if they did not maintain their efforts.

AACSB: Analytic



123.(p. 219-220)

A currently popular trend in the wine industry is house-labeled wine. Restaurants, hotel chains, and even universities now sell wine under their brand name. Is this type of brand extension a good marketing strategy? Defend your answer.

Answers will vary but should include discussion of the advantages and caveats associated with brand extension. For restaurants and hotel chains with quality images, the brand extension may be logical. For a university, it may result in novelty sales but does not seem logical.

AACSB: Analytic



124.(p. 220-221)

Walt Disney Company recently announced it would no longer allow its characters to be used in promoting unhealthy foods. In branding strategy, what does this change? From both ethical and marketing perspectives, does this change make sense?

This change means Disney is restricting co-branding with food companies. From an ethical perspective the company was quoted as saying "A company such as ours, with the reach we have, has a responsibility because of how much we can influence people's opinions and behavior." From a marketing perspective, the company will lose some brand licensing fees but benefit from supporting their brand image as a wholesome entertainment company.

AACSB: EthicsBlooms: Apply

Difficulty: 3 HardLearning Objective: 10-06 Determine the various types of branding strategies used by firms.


125.(p. 222)

Why would a company like Walmart have a difficult time repositioning itself as a retailer of quality, stylish clothing?

Repositioning involves changing a brand's focus to target new markets, adjust to changing market conditions, or to change the quality image of a brand. Walmart is known for its "Everyday low prices," which indicates good value, but it is not necessarily known for quality or style.

AACSB: Analytic



126.(p. 223)

Distinguish between primary and secondary packaging.

The primary package is the one the consumer uses. The secondary package is the outer wrapper or carton. Secondary packaging has uses for the consumer as well as the retailer.

AACSB: Analytic



127.(p. 224-225)

Effective marketers recognize a label is much more than just a sticker on a package. What can a label do for a marketer?

Product labels provide information to consumers. While many labeling requirements stem from laws, a label is communication tool that can focus on benefits or emphasize what is or is not in the product.

AACSB: Analytic



128.(p. 208)

Colgate, like any major consumer products company, is always looking for opportunities to expand its product lines. What two industry factors often influence product line expansion decisions?

Firms expand product lines when it is relatively easy to enter a specific market, and/or when there is substantial market opportunity.

AACSB: Analytic



129.(p. 212)

Strong brands can reduce marketing costs. How do they accomplish that?

The brand sells the products and, as people become more comfortable and knowledgeable; the marketer does not need to explain who the company is or what it does.

AACSB: Analytic



130.(p. 212-213)

In 2005, Sears and K-Mart companies merged, yet today you still can find both Sears and K-Mart stores. Using brand equity, explain why both brands still exist.

Brand equity is the set of assets and liabilities linked to a brand. Obviously, the management of the new Sears and K-Mart company thinks each brand has positive net worth.

AACSB: Analytic



131.(p. 213)

What do the following brands have in common: Scotch tape, Kleenex tissues, and Xerox copiers?

They are all examples of brands that have become synonymous with a product category. If the terms become generic, the companies could lose their trademark status.

AACSB: Analytic



132.(p. 214)

What are consumers likely to do if they perceive an inexpensive brand to have about the same quality as a premium brand?

The perceived value, which is consumer's relationship between price and quality, will be greater for the inexpensive brand leading to increased demand for the less expensive brand.

AACSB: Analytic



133.(p. 216-217)

Provide a real-world example of each of these: (1) a national brand, and (2) a private-label brand.

Answers will vary, but the national brand should be a manufacturer's brand like Levi-Straus or Porsche, and the private-label brand should be a retailer's brand like President's Choice, I.N.C, or Kenmore.

AACSB: Analytic



134.(p. 219)

What is the advantage of a corporate or family brand? Provide an example of one.

All products sold under the corporate or family brand benefit from the overall brand awareness associated with the family name. GE and Gap are listed in the text.

AACSB: Analytic



135.(p. 219)

What is brand extension? Provide an example of brand extension you have encountered.

A brand extension is use of the same brand name in a different product line. Examples will vary. The text mentions Dell monitors and printers, Frito-Lay and Doritos dips to go with the chips, and Disney home fashions.

AACSB: Analytic



136.(p. 220)

What is co-branding? Provide an example of co-branding.

Co-branding is marketing two or more brands together. Citibank MasterCard and Dell with Intel Pentium chip inside are examples of co-branding.

AACSB: Analytic



137.(p. 220-221)

Burger King and Häagen-Dazs ice cream once attempted to use co-branding. What is a likely explanation for its failure?

The customer profiles for each brand were too different.

AACSB: Analytic



138.(p. 221)

If Eddie Bauer stores allowed a travel company to market adventure travel using the Eddie Bauer brand name, what would Eddie Bauer be doing?

Eddie Bauer would be involved in brand licensing.

AACSB: Analytic



139.(p. 223)

Natalie is designing a primary package for her new peanut butter popcorn. From a consumer's perspective, what should the packaging provide?

From a consumer's perspective packaging should facilitate consumption, storage, and use.

AACSB: Analytic



140.(p. 206)

When personal computers were new, people spent considerable time and energy learning about and investigating choices and options. Now, many consumers replace old computers with little research or investigation. In terms of types of products (specialty, shopping, convenience goods), how have personal computers changed?

Students could argue that personal computers were initially either specialty or shopping goods, depending on the level of expertise of the buyers. Now, the purchase of computers could be considered either shopping or even a convenience good.

AACSB: Analytic



141.(p. 205)

When looking to purchase a mobile phone, describe the components that make up the total product.

A product is made up of the core customer value, actual product and associated services/augmented product. The core customer value is that the phone provides on the go communication either via telephone, email or Internet. The actual product is the phone, and the augmented product is the customer service along with any warranties that are offered by the company.

AACSB: Analytic



142.(p. 206-207)

Define convenience, shopping and unsought products and give an example of each.

Convenience products/services are those products or services for which the consumer is not willing to spend any effort to evaluate prior to purchase. They are frequently purchased commodity items, usually purchased with very little thought, such as common beverages, bread, or soap.Shopping products/services are products or services for which consumers will spend a fair amount of time comparing alternatives, such as furniture, apparel, fragrances, and appliances, travel alternatives. When people need new sneakers, for instance, they will go from store to store shopping— trying shoes on, comparing alternatives, and chatting with salespeople.Unsought products/services are products consumers either do not normally think of buying or do not know about, example would be a gravestone.

AACSB: Analytic



143.(p. 224-225)

What are some of the benefits provided by product labels?

Labels on products and packages provide information the consumer needs for purchase decisions and for consumption of the product. Since they identify the product and brand, labels are also an important element of branding and can be used for promotion. The information required on them must comply with general and industry-specific laws and regulations, including the components or ingredients contained in the product, where the product was made, directions for use, and/or safety precautions.

AACSB: Analytic



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