Chapter 5 Flashcards
Which of the following is true of product differentiation?
a) It is independent of intangible features such as brand image and value.
b) It is a matter of customer thought and perception.
c) It does not typically require higher costs.
d) It cannot occur when two companies use similar technologies.
b) It is a matter of customer thought and perception.
Juan, the manager of Pvari, a chain of jewelry stores, claims that mass customization is the best way to create value for their products. Nate, the senior designer, believes that every product must be customized from the pre-production stage. Which of the following statements will strengthen Juan’s claim?
a) Customers love the idea of designing their own jewelry from scratch.
b) Designers feel their creative skills will be underutilized in mass production.
c) The production costs will reduce to half if products are made in large scale.
d) Their clientele includes a niche group that prefers highly customized products.
c) The production costs will reduce to half if products are made in large scale.
In terms of product differentiation, convenience refers to ________.
a) how efficient a product is in meeting consumers’ primary needs
b) how easy it is for customers to purchase a product
c) how unique a product is when compared to others
d) how long a product will function
b) how easy it is for customers to purchase a product
Tangerine Inc. differentiates its products by building a brand image, whereas Cloud Inc. does not rely on brand image to differentiate its products. Which of the following statements is likely to be true in this case?
a) Tangerine is likely to use advertisements to differentiate its products.
b) Cloud is unlikely to rely on reliability to boost sales.
c) Cloud is likely to use promotional tools to increase market share.
d) Tangerine is likely to rely on product features to attract customers.
a) Tangerine is likely to use advertisements to differentiate its products.
The research and development department of Chi Inc. studies the buying patterns of its customers. If it starts with the customers in the first step of the consumption chain, which of the following does it most likely study?
a) How do its customers order its products?
b) How do its customers become aware of their needs?
c) How do its customers find its products?
d) How do its customers pay for the products?
b) How do its customers become aware of their needs?
Peter always buys shoes from Brown Boot’s Inc., although other brands offering shoes of same quality are available closer to home and at lower prices. Brown Boots differentiates itself through a strong brand image. Their advertisements associate the brand with class, style, and elegance. Which of the following is a likely reason for Peter’s preference toward Brown Boot’s?
a) Prestige
b) Convenience
c) Quality
d) Reliability
a) Prestige
Kim, a consumer, is in the final stage of selecting a product. Which of the following is true if her actions follow the typical consumption chain?
a) Kim is likely to be persuaded by the product attributes at this stage.
b) Service providers are likely to assist Kim in helping her use the product.
c) Kim is unlikely to have become aware of her need for a product yet.
d) Service providers are likely to detect faults with the performance of the product.
a) Kim is likely to be persuaded by the product attributes at this stage.
Which of the following questions denotes the last step in a consumption chain?
a) How is your product/service delivered?
b) How is your product repaired, serviced, or disposed of?
c) How do consumers find your offering?
d) How is your product stored/moved around?
b) How is your product repaired, serviced, or disposed of?
Floyd Inc., a manufacturer of washing machines, encourages customers to choose their brand through extensive marketing. Features of Floyd’s products are compared with those of other brands, and customers are made to see the benefits they get from purchasing Floyd’s products. Which step of the consumption chain does this scenario depict?
a) The third step: how do consumers make their final selections?
b) The fourth step: how do customers order and purchase your product?
c) The ninth step: what if customers are not satisfied and need a return or exchange?
d) The eighth step: what do customers need help with when they use your product?
a) The third step: how do consumers make their final selections?
Identify a way in which companies can differentiate their products based on features.
a) By offering customers a feeling of prestige upon using their products
b) By designing products of superior quality compared to others in the market
c) By making their products easily available to customers
d) By designing products to be customizable by customers
d) By designing products to be customizable by customers
When do companies often turn to brand image as a source of differentiation advantage?
a) When their products or services have the largest network of loyal customers in the industry
b) When they produce services that are more reliable than the services of their competitors
c) When their products have achieved top-of-mind awareness in their customers
d) When there is difficulty differentiating products based upon features, reliability, or convenience
d) When there is difficulty differentiating products based upon features, reliability, or convenience
What is meant by mapping the consumption chain?
a) Differentiating products through marketing via advertisements, promotions, and other marketing activities
b) Identifying all the steps through which customers pass, from the time they first become aware of a product to the time they have to dispose it
c) Differentiating products by associating them with positive qualities in the minds of customers
d) Grouping customers based on similar needs
b) Identifying all the steps through which customers pass, from the time they first become aware of a product to the time they have to dispose it
________ requires acquiring and allocating resources.
a) Mapping the consumption chain
b) Analyzing a company’s differentiation strategy
c) Segmentation of the market
d) Building the capacity to deliver unique value
d) Building the capacity to deliver unique value
Network effect occurs when some products or services are more convenient to use because there is a _______ of other users.
large network
