STUDY QUESTIONS

Professor Patrick Yanez

Chapter 12: Products and Services for Consumers

True/False Questions 1. Quality can be defined on two dimensions: market-perceived quality and performance quality. Answer: True 2. Though quality is always important in the consumer's mind, they, in general, do not expect it to be a given. Answer: False 3. Quality is measured in many industries by objective third parties. Answer: True 4. Even though most companies claim high performance quality when a product leaves the factory, the factory is still the place where most products are damaged in global marketing. Answer: False 5. In many countries the term product homologation is used to describe the changes mandated by local product and service standards. Answer: True 6. Green marketing is the term frequently used to identify a marketer's efforts to reduce its dependency on U.S. dollars as the standard for international exchange. Answer: False 7. The European Commission (EC) mandate requires a product to be evaluated from manufacturing to disposal. Answer: True 8. Strictly speaking from a marketing point of view as well as from a definitional view, a product is a physical item. Answer: False 9. An important first step in adapting a product to a foreign market is to determine the degree of newness as perceived by the intended market. Answer: True 10. From a sociological point of viewpoint, any idea perceived as new by a group of people is an innovation. Answer: True 11. The process by which a new product spreads throughout a society is called the product life cycle. Answer: False 12. The element of time is what differentiates diffusion (i.e., diffusion of innovations) from other types of communication research. Answer: True 13. One of the three variables, which affect the rate of diffusion of a product, is the product's degree of perceived newness. Answer: True 14. If a new product has the trait of relative advantage, it is guaranteed success in the marketplace. Answer: False 15. Most of the new ideas associated with the Internet are being produced in Europe because of the number of Internet users on the continent. Answer: False 16. One of the core components in the product component model is the product platform. Answer: True 17. If you were looking for information and strategies on a product's brand name, you would find it under the packaging component of the product component model. Answer: True 18. The packaging component of the product component model contains the physical product and all its design and functional features. Answer: False 19. A well-known baby-food producer that introduced small jars of baby food in Africa complete with labels featuring a picture of a baby experienced the classic example of misinterpreted symbols--consumers thought it was ground-up babies in a jar. This would be an example of a problem with the packaging component in the product component model. Answer: True

20. One of the consistencies that marketers can look forward to when marketing products abroad is that (in general) almost all labeling laws worldwide are essentially the same. Answer: False 21. The support services component of the product component model contains such items as repair and maintenance and warranties. Answer: True 22. Literacy rates and educational levels in our increasingly technological world have reached a point where manufacturers of international products can generally put out standardized product instructions. Answer: False 23. Consumer services are distinguished by four unique characteristics--intangibility, inseparability, homogeneity, and longevity. Answer: False 24. The vast majority of services enter foreign markets by licensing, franchising, or direct investment. Answer: True 25. Brand image is at the very core of business identity and strategy. Answer: True

performance quality the products are often received by a consumer in a less-than-perfect condition. This situation is usually attributable to which of the following? A) damage during distribution processing ** B) damage by irate workers C) damage because of environmental factors D) damage because the product was not really made that well after all E) none of the above is correct 29. In many countries the term product __________ is used to describe the changes mandated by local product and service standards. A) homophily B) homologation ** C) homogenization D) clustering E) adaptation 30. A product may have to change in a number of ways to meet the physical or mandatory requirements of a new market (i.e., the new market's local product and service standards). Which of the following terms is used globally to describe this change process? A) homophily B) homologation ** C) homogenization D) clustering E) co-adaptation 31. ___________ marketing is a term used to identify concern with the environmental consequences of a variety of marketing activities. A) Green ** B) Envo C) Naderism D) Socialist E) Planet 32.McDonald's has just required that all of its paper packages that are used to contain its food products be biodegradable, contain no harmful inks, and be recyclable whenever possible. This would be an example of which of the following marketing strategies? A) envo-marketing B) planet marketing

Multiple Choice Questions 26. Quality can be defined on two dimensions, _____________ and _______________ quality. A) cost and promotional B) implied and competitive C) service and strategic D) market perceived and performance ** E) factor and resource 27. Market-perceived quality and performance quality are both dimensions of the definition of: A) a product. B) a service. C) quality. ** D) cost control. E) ISO standards. 28. Though most products leave the factory at

C) D) E)

socialist marketing green marketing ** political marketing

33. Which of the following countries or organizations requires that packaging material through all levels of distribution, from manufacturer to consumer, be recycled or reused? A) the United States B) the European Commission (EC) ** C) NAFTA D) Australia/New Zealand E) all of the above have such requirements 34. A product is more than a physical item. It is also characterized as being: A) an essential on which all life depends. B) the beginning of the refuse cycle. C) a bundle of satisfactions that the buyer receives. ** D) service-related. E) a source of global harmony. 35. The primary function of an automobile is to move passengers from point A to point B. Which of the following are generally required to create the primary function of an automobile? A) consumer spending power--in dollars B) physical attributes--such as an engine and tires ** C) a consumer--a human being D) a dealer--a place to purchase the automobile E) a place to go--a destination 36. All of the following are illustrations of how products (product concepts) have been rejected by cultures because the products (product concepts) did not conform to norms, values, or behavior patterns of the culture EXCEPT: A) many financial services in Muslim countries. B) body jewelry in Japan. C) pork and pork products in Scotland. D) filter cigarettes in Asia. E) all of the above are examples of failed products (product concepts). **

37. An important first step in adapting a product to a foreign market is to determine: A) the degree of newness as perceived by the intended market. ** B) the cost of the adapted product in the foreign market. C) the advertising parallels with the domestic market. D) the ability of a sales force to sell the product. E) the match to religious doctrine(s) in the foreign country. 38. From a sociological viewpoint, any idea perceived as new by a group of people is: A) a product with great potential. B) an innovation. ** C) automatically up against resistance. D) a taboo in most countries. E) none of the above matches with the question. 39. The process by which an innovation spreads is called: A) the innovation cycle. B) the product life cycle. C) the diffusion process. ** D) the fashion curve. E) the product curve. 40. According to Everett Rogers, the crucial elements in the diffusion of new ideas include all of the following EXCEPT: A) an innovation. B) communication through certain channels. C) new ideas are communicated over time. D) new ideas are sent to members of a social system. E) all of the above are part of Everett Rogers system. ** 41. According to Everett Rogers, the goal of the diffusion researcher and the marketer are to shorten the time lag between: A) the time that a product is made and the time that retailers place the product in inventory. B) the time that a budget is constructed and the time needed funds reach

communication channels. C) the time that an investment is made and the time that a profit is turned. D) introduction of an idea or product and its widespread adoption. ** E) introduction of an idea or product and when revisions can be made. 42. Innovative product ideas reach markets with varying rates of diffusion based on the time variable. All of the following are actual examples of this phenomenon EXCEPT: A) microwave ovens took 20 years to catch on in the United States. B) the contraceptive pill took only a few years to be accepted in the United States. C) modern math took only about five years to be diffused through the U.S. school systems. D) the idea of kindergartens took nearly 50 years to gain total acceptance in the United States. E) Color televisions were available in 1949 but not widely accepted in the market until 1985. ** 43. Which of the following variables is known to affect the rate of diffusion for a product or an idea? A) the method used to communicate the idea ** B) the manufacturer's price of the innovation or product C) the use of the Internet in the diffusion process D) the physical packaging of the innovation or product. E) all of the above are among the three variables cited in the text as affecting the rate of diffusion 44. All of the following are considered to be extraneous variables that affect the rate of diffusion of an object EXCEPT: A) the degree of perceived newness. B) the perceived attributes of the innovation. C) the method used to communicate the idea. D) the use of the Internet in the diffusion process. **

E) all of the above are among the extraneous variables cited in the text as affecting the rate of diffusion. 45. Veronica's research indicates consumers in the targeted country perceive little marginal value from new product relative to the old product. Her company's product has a small _________________. A) relative advantage. ** B) compatibility. C) complexity. D) trialability. E) observability. 46. Carolyn is interested in marketing her company's diet products in Asia. She is studying what acceptable behavior, norms, and values in Asian markets. Carolyn is studying ___________________. A) relative advantage. B) compatibility. ** C) complexity. D) trialability. E) observability. 47. Ingrid is developing promotional materials and product demonstrations to easily communicate the benefits of her cleaning products. Ingrid is trying to enhance the ______________ of her products. A) relative advantage. B) compatibility. C) complexity. D) trialability. E) observability. ** 48. Fiona asked her product manager for samples to give to potential consumers in Madrid, her new European market. Fiona is trying to reduce the degree of economic and/or social risk, or ________________ associated with product use. A) relative advantage. B) compatibility. C) complexity. D) trialability. ** E) observability. 49. Mark Harmon has found that using his new digital camera is a snap. He did not even have to read the instruction manual to determine how to

turn the camera on, snap a digital picture, and export the picture to his computer. The signs (symbols) on the camera body made it very clear what he was to do to achieve digital photography success. Which of the following characteristics of Mark's new product made it easy for him to begin his digital experience? A) relative advantage B) compatibility C) complexity ** D) trialability E) observability 50. Installation, repair and maintenance, deliveries, and warranties are all found in which of the following components of the product component model used in the text? A) core component B) support services component ** C) packaging component D) functional component E) global component 51. The product platform, design features, and functional features are all found in which of the following components of the product component model used in the text? A) core component ** B) support services component C) packaging component D) functional component E) global component 52. Simone Francis is a specialist in product design. She is responsible for a product's aesthetic as well as functional appearance. With respect to the product component model shown in the text, in which of the following component categories would Simone's talents most likely be used? A) core component ** B) support services component C) packaging component D) functional component E) global component 53. If a company wished to alter a product's platform so that the product could be manufactured in a variety of forms to meet local differences in five different foreign markets, the __________ of the product component model would be component that would be in consideration.

A) B) C) D) E)

core component ** support services component packaging component functional component global component

54. Apple Computer had difficulties when it first entered the Japanese market with its Macintosh computers. Some of the computers were returned unused after customers found the wrapping on the instruction manual damaged. Though this would probably be no big deal in the U.S., it was certainly a cause for concern in quality-conscious Japan. To fix the problem, Apple needed to concentrate on which of the following components of the product component model? A) core component B) support services component C) packaging component ** D) functional component E) global component 55. Frankenfoods (genetically modified foods) are among the most controversial global marketing problems with respect to _____________issues. A) truth in lending B) political corruption C) labeling and product content ** D) international pricing E) corporate social responsibility 56. One of the early problems faced by BMW when it attempted to market its line of automobiles in the United States was a severe shortage of spare parts. If BMW's management makes the decision to correct this problem, in which of the following components of the product component model would management need to make improvement? A) core component B) support services component ** C) packaging component D) functional component E) global component 57. In some countries maintenance of automobiles is not the norm. Cars are not repaired until they break down. Since the consumer is automatically angry with the manufacturer when something goes wrong with the car, repair and maintenance has become a concern of the various

automobile manufacturers in this market. In which of the following components of the product component model would management need to make improvement if problems such as the one above are going to be solved? A) core component B) support services component ** C) packaging component D) functional component E) global component 58. Services, whether directed toward the domestic or foreign market, have four distinct characteristics. Which of the following is not one of those distinct characteristics? A) intangibility B) inseparability C) profitability ** D) heterogeneity E) perishability 59. Insurance, dry cleaning, and hotel accommodations have intrinsic value resulting from a process, a performance, or an occurrence that only exists while it is being created. Which of the following characteristics of services best matches to the above? A) intangibility ** B) inseparability C) profitability D) heterogeneity E) perishability 60. Because a service's creation cannot be separated from its consumption, the service is said to have: A) intangibility B) inseparability ** C) profitability D) heterogeneity E) perishability 61. Because a service is individually produced and is virtually unique, the service is said to have: A) intangibility B) inseparability C) profitability D) heterogeneity ** E) perishability 62. Mark Townes is a dentist in Denver.

During a four-day stretch in March, the snows in Denver were so bad that not one single patient was able to come for appointments with Dr. Townes. Since all of the appointments were missed, he made absolutely no money for the four days even though all of his normal expenses were still there. This difficulty illustrates one of a service's four distinct characteristics. Which area listed below is the best match? A) intangibility B) inseparability C) profitability D) heterogeneity E) perishability ** 63. How do the vast majority of services enter a foreign market? A) exporting B) importing C) licensing, franchising, or direct investment ** D) through brokers E) through agent intermediaries

64. Four kinds of barriers face consumer services marketers in the global marketplace. Which of the following of these barriers is in force when a foreign market requires that services (such as banking or insurance) originate within the foreign market itself and not from outside sources? A) protectionism ** B) controls on transborder data flows C) protection of intellectual property D) cultural requirements for adaptation E) none of the above 65. Red Lobster seafood restaurant is considering opening branch operations in China. However, the restaurant chain's labor union has already pointed out a potential problem with this expansion. In China, service providers would find it to be in bad taste to allow employees to collect tips for service. Since a great portion of a typical wait-staff person's compensation comes in the form of tips, the union would like to know how employees would be compensated for this loss. The above example illustrates which of the following barriers a consumer services marketer faces in a foreign market? A) protectionism

B) C) D) ** E)

controls on transborder data flows protection of intellectual property cultural requirements for adaptation none of the above

events like the Olympics C) protection against domestic competition D) uniform worldwide image ** E) all of the above 71. Britain is the largest candy market in Europe. American made Snickers candy bars are sold in Britain under the name Marathon to avoid confusion with the word knickers--a name for women's underpants. This is an example of the brand strategy of: A) When in Rome do as the Romans do. B) Expect the unexpected. C) Use global brands where possible and national where necessary. ** D) Never use a big word when a small one will do. E) Run to a round house, no one can corner you there! 72. Any influence that the company of manufacture, assembly, or design has on a consumer's positive or negative perception of a product is called the: A) plus or minus effect. B) polar effect. C) transfer effect. D) alteration effect. E) country-of-origin effect. ** 73. Consumers have broad but somewhat vague stereotypes about specific countries and specific product categories that they judge best. Which of the following would not fit in the best stereotype scheme? A) English tea B) American chocolate ** C) French perfume D) Chinese silk E) Jamaican rum 74. In Russia products are placed into two categories--ours and imported. This is an example of: A) cultural revisionism B) ethnocentrism ** C) conversion to capitalism D) communist mentality E) structural marketing orientation

66. The worldwide use of a name, term, sign, symbol, design, or combination thereof intended to identify goods or services of one seller and to differentiate them from those of competitors is called a: A) trademark. B) copymark. C) global brand. ** D) product's equity position. E) none of the above. 67. A successful ___________ is the most valuable resource a company has. A) ad campaign B) product C) service D) brand ** E) CEO 68. Microsoft, IBM, and Nokia know that brand image is: A) fleeting and must be discounted in corporate accounting. B) essential to short-term protection of international global trade agreements. C) subject to legal interpretation in the various courts of international law. D) never what they think it will be. E) at the very core of business identity and strategy. ** 69. The ___________ is accelerating the pace of globalization of brands. A) European Union B) tsunami relief effort C) Internet ** D) WTO E) GATT agreement 70. Ideally, a global brand gives a company a ______________________ that enhances efficiency and cost savings when introducing other products associated with the brand name. A) strategic local monopolies B) international acceptance at global

Answer: newness 75. All of the following can be considered to be advantages of private brands that appear in foreign markets EXCEPT: A) they receive greater manufacturer advertising budgets. ** B) they provide the retailer with high margins. C) they receive preferential shelfspace. D) they have strong in-store promotion. E) they are quality products at low prices. Answer: A Page: 366 Difficulty: Moderate Type: Comprehension 81. An _____________ is any idea perceived as new by a group of people. Answer: innovation 82. The process by which innovation spreads is called product __________. Answer: diffusion 83. _____________ research is research on the process by which innovations spread to the members of a social system. Answer: Diffusion 84. A product's ____________ advantage is the perceived marginal value of the new product compared to the old. Answer: relative 85. The ___________of the product component model consists of the product platform, design features, functional features, and legal. Answer: core component 86. The ________ component of the product component model consists of trademarks, brand names, legal, price, quality, package, and styling. Answer: packaging 87. Reginald is concerned with maintenance, repair and spare parts for his company's computers. He is concerned with the __________ component of its product component model. Answer: support services 88. Services are ___________ because they (the services) cannot be touched. Answer: intangible 80. Often, a first step in adapting a product to a foreign market is to determine the degree of ___________ as perceived by the intended market. 89. Services are classified as being ____________ because they are individually produced and are virtually unique.

Fill in the Blank Questions 76. Quality can be defined on two dimensions: ____________ and ______________. Answer: market-perceived quality and performance quality 77. Product ___________ is used to describe the changes mandated by local product and service standards. Answer: homologation 78. ___________ is a term used to identify concern with the environmental consequences of a variety of marketing activities. Answer: Green marketing 79. The European Commission (EC guidelines for eco-labeling require evaluation of a product's significant environmental effects _______________________. Answer: throughout its lifecycle or from manufacturing to disposal

Answer: heterogeneous 90. Protectionism, controls on transborder data flows, protection of intellectual property , and cultural requirements for adaptation are examples of ___________ faced by consumer services marketers. Answer: barriers 91. Coca-Cola is classified as a ___________ brand; in fact, it is number one in the world. Answer: global 92. The ____________ and other technologies are accelerating the pace of the globalization of brands. Answer: Internet 93. If a consumer does choose to buy products from the United States solely for the reason that the products were produced in the United States, then the consumer would be encountering the ______________ effect when making purchase decisions. Answer: country-of-origin

standards. A product may have to change in a number of ways to meet the physical or mandatory requirements of a new market. 96. Everett Rogers notes that four crucial elements impact the diffusion of new ideas. What are those elements? Answer: The elements are (a) an innovation, (b) which is communicated through certain channels, (c) over time, and (d) among the members of a social system. 97. Draw and correctly label the product component model shown in the text. Answer: The model is shown on page 350 (see Exhibit 12.1). Students should include the core, packaging, and support services components and the sub-parts of each for full credit. 98. Consumer services are distinguished by four unique characteristics. List and characterize each of these four unique characteristics. Answer: The characteristics are (a) intangibility--services cannot be touched, (b) inseparability--the service cannot be separated from its consumption, (c) heterogeneous--it is individually produced and is thus virtually unique, and (d) perishability--once created it cannot be stored but must be consumed simultaneously with its creation. 99. Consumer services face four kinds of barriers as these services are presented to the global market. What are these barriers? Answer: The barriers are (a) protectionism, (b) controls on transborder data flows, (c) protection of intellectual property, and (d) cultural requirements for adaptation. 100. A successful brand is the most valuable resource a company has. Comment on why this is true and create an example to illustrate. Answer:

Essay Questions 94. Discuss the two dimensions of quality. Answer: The two dimensions of quality are market-perceived quality and performance quality. Simply, one dimension deals with how consumers believe the company, product, or service matches to expectations of quality. The other dimension, which can be measured, deals with how the product, company, or service actually performs. 95. Describe the process called product homologation. Answer: Product homologation is used to describe the changes mandated by local product and service

Using the material on pages 360-361 and including Exhibit 12.2, students should be able to make a case for the value of a brand. To summarize, the brand name encompasses the years of advertising, good will, quality evaluation, product experience, and other beneficial attributes the market associates with the product. Students may use whatever example they wish, however, it still needs to be appropriate to the material above. 101. Assuming that you were a new marketing manager for Nike and that your first task was to launch a renewed effort to gain market share in Europe, an Adidas stronghold. Describe the impact that the country-of-origin effect might have on your chances of success. Answer: The country-of-origin effect can be defined as any influence that the country of manufacture, assembly, or design has on a consumer's positive or negative perception of a product. Students could discuss stereotypes in the example, mention the difficulties that the U.S. has had with France, the general opinion of American-made products, Nike's publicity as a sweatshop broker, or how a homebased rival such as Adidas might react to Nike. If you, as an instructor, would like to set additional parameters for this question, please do so before

the exam.