chapter 6

Question 1

define the term product

Answer 1

The product is what the customer receives in the marketing exchange process.

Question 2

Most products fit into one of 2 basic categories: goods and services. Define Goods

Answer 2

something with physical features that a person can se, touch, and sometimes smell, hear or taste.

Question 3

Most products fit into one of 2 basic categories: goods and services. Define Services

Answer 3

An activity that a person can experience only as the activity is performed, used, or consumes. These have few, if any physical characteristics.

Question 4

What are 3 characteristics that distinguish services from goods?:

Answer 4

1. intangibility
2. heterogeneity
3. perishability

Question 5

Define the intangibility of an insurance product

Answer 5

this refers to its lack of physical attributes that can be detected by the senses, makes it difficult for purchasers to judge the quality of the product and for marketers to differentiate their products from competitors.

Question 6

How do insurers overcome the challenge of intagibility?

Answer 6

through advertisements designed to promote a sense of tangible, physical presence.

• ads aim to create feelin of trust, protgection, and reliability.
• may use testimonials as a tool.

Question 7

Define the term Heterogenity

Answer 7

refers to the variability or lack of consistency in the performance of a service.

Question 8

T or F.

Customers frequently base their attitudes towards a service on the performance of the person providing the service.

Answer 8

True.

Question 9

How do companies improve service quality and reduce inconsistency?

Answer 9

1. adopt consistent, job-related employee selection criteria
2. standardize operating procedures whenever feasible
3. provide the best education, training, an d motivation possible for their personnel

• Also ensure company is capitalizing on technology resources to boost efficiency and consistency.

Question 10

Define perishability

Answer 10

the inability to stockpile services for use in the future.

Question 11

How do insurers manage the perishability of financial services
“?

Answer 11

taking advantage of online capabilities, which increase customer access to services without significantly increasing personal requirement or extending office hours.

Question 12

Consumer products fall into which four primary classes

Answer 12

1. convenience products
2. shopping products
3. specialty products
4. unsought products.

Question 13

Define a convenience product

Answer 13

a relatively inexpensive product that requires a minimum of time, information gathering, and shopping effort on the part of most customers.

Question 14

What kind of insurance product is considered a concenience product?

Answer 14

Airline flight insurance

Question 15

Define a shopping product

Answer 15

a product for which consumers are willing to exert the time and effort needed to gather information and compare products before purchase.

Question 16

Shopping products can be further divided into homogenous shopping products and heterogenous shopping products. Define homogenous

Answer 16

products that customers view as similar in quality or features to other products but different enough in price to warrant comparison shopping.
Ie: household appliances, bank loans, life/auto/home insurance.

Question 17

Shopping products can be further divided into homogenous shopping products and heterogenous shopping products. Define heterogenous

Answer 17

products that customers view as different enough from other prodcuts to compare quality, style or features as well as price.
ie: furniture, clothing, dishes. most lines of insurance.

Question 18

what do you call the process by which a product reaches a point in its development where it has no features that differentiates it from competitive products other than price? And what do you call this product?

Answer 18

Commoditization.

Commodity.

Question 19

How do insurers avoid commoditization?

Answer 19

use marketing messages that emphasize specific options or guarantees available on a particular product and give those features distinctive names.

• they also differentiate their products by providing superior customer experience, good ratings, online support and financial planning tools

Question 20

what is a specialty product?

Answer 20

a product that customers make a special effort to obtain.

Question 21

Define an unsought product

Answer 21

a product that most customers are not actively seeking.

* unaware that the product exists, they need it or can use it, or dont want to think about the product.

Question 22

What is product mix?

Answer 22

The total assortment of products available from a company.

Question 23

When a company compares its product mix to others in the same industry, it measures the mix according to Width, depth, and consistency….
Define Width

Answer 23

The more product categories or product classes a company offers the wider the company’s product mix.

Question 24

Define product category

Answer 24

the entire group of products designed to address a particular customer need.

Question 25

Define product calss

Answer 25

the entire group of products produced by a particular industry or industry sector

Question 26

Define a product line

Answer 26

A set of different products that are closely related because they 1) function similarly 2) are marketed to the same target markets 3) are prices about the same or 4) are distributed through similar distribution systems.

Question 27

Define a product form

Answer 27

a group of products within a product line that share certain basic characteristics. .

Question 28

Define a product item.

Answer 28

A specific version of a specific product form within a product line.

Question 29

When a company compares its product mix to others in the same industry, it measures the mix according to Width, depth, and consistency….
Define Depth

Answer 29

The greater the number of product forms and iteams in a prodcut line, the deeper the product mix. This allows companies to pursue different market segments with the same lines of products; and allows for a range of prices, features and benefits.

Question 30

When a company compares its product mix to others in the same industry, it measures the mix according to Width, depth, and consistency….
define consistency

Answer 30

the more closely related a company’s products classes and product lines are to each other the more consistent its product mix.
* The more consistent the mix the easier it is to establish an expertise.