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MKTG 448 > MKTG 448 Exam 2 - FLASHCARDS - Setting Product Policy > Flashcards

MKTG 448 Exam 2 - FLASHCARDS - Setting Product Policy

1
Q

True or false: a marketer cannot determine a price, design a promotion strategy, or create a distribution channel until the firm has a product to sell?

A

TRUE

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2
Q

True or false: A product may be defined as either favorable or unfavorable?

A

TRUE

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3
Q

True or false: A product may be a tangible good, a service, an idea, or any combination of these three?

A

TRUE

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4
Q

Are services and ideas also products?

A

Yes

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5
Q

What refers to the variety and number of product lines offered?

A

Product mix breadth

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6
Q

What is the number of items in a given product line?

A

Product line depth

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7
Q

What refers to the product’s design specifications?

A

Product item design

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8
Q

True or false: Firms differ greatly in their product mix, or variety, of products offered?

A

TRUE

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9
Q

What decisions are driven by how many different segments within the target market the firm chooses to serve?

A

Product depth

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10
Q

What are the characteristics of a winning product?

A

• Superior to competitors’ products in terms of meeting users’ needs
• Solve a problem the customer has with a competitive product
• Feature good value for the money and excellent price and performance characteristics
• Provide excellent product quality, according to customers’ way of defining quality
• Offer features easily perceived as useful to the customer
• Offer benefits that are highly visible to the customer

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11
Q

What are the three inputs to the new products process?

A

the right quality product, at the right time, and at the right cost

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12
Q

What focuses on increasing sales of existing products into an existing market?

A

Market penetration

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13
Q

What focuses on selling existing products to new markets?

A

Market development

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14
Q

What focuses on introducing new products to an existing market?

A

Product development

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15
Q

What focuses on entering a new market with new products?

A

Diversification

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16
Q

What approach uses a growth-share matrix that evaluates a company’s SBUs in terms of market growth rate and relative market share?

A

BCG approach

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17
Q

Once all the decisions have been made to determine the depth of a company’s product line, what does one need to consider?

A

They need to consider each product against what is known about the characteristics of winning products

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18
Q

What is the Boston Consulting group’s product portfolio matrix (BCG matrix) designed to help with?

A

help with long-term strategic planning, to help a business consider growth opportunities by reviewing its portfolio of products to decide where to invest, to discontinue, or develop products

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19
Q

True or false: the Boston Consulting group’s product portfolio matrix classifies each product by its present or forecast growth and relative market share?

A

TRUE

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20
Q

______ products usually have large profits but need a lot of cash to finance rapid growth?

A

Star

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21
Q

What is the best marketing tactic?

A

The best marketing tactic is to protect existing market share by investing earnings in product improvement, better distribution, more promotion, and production efficiency

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22
Q

What is a product that usually generates more cash than it needs to maintain its market share?

A

Cash cow

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23
Q

What is the basic strategy for a cash cow?

A

To maintain market dominance by being the price leader and making technological improvements in the product

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24
Q

Does a cash cow have a dominant market share?

A

Yes

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25
Q

True or false: Maintaining investments or harvesting strategies are often used with cash cows?

A

TRUE

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26
Q

What shows rapid growth but poor profit margins?

A

Question mark

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27
Q

What has a low market share in a high-growth industry?

A

Question mark

28
Q

What are the strategy options with a question mark?

A

The strategy options are to invest heavily to gain better market share, acquire competitors to get the necessary market share, or divest/sell the product

29
Q

A _______ has low growth potential and a small market share?

30
Q

True or false: most dogs eventually leave the marketplace?

31
Q

What is the strategy option for dogs?

32
Q

Like the Boston Consulting Group matrix, does the GE-McKinsey matrix help you to determine how to allocate resources?

33
Q

What is one difference between the Boston Consulting Group matrix and the GE-McKinsey matrix?

A

The GE-McKinsey matrix allows more flexibility

34
Q

True or false: radical innovations (new-to-the-world products), are generally characterized by a high degree of uncertainty?

35
Q

True or false: When considering new products (as well as existing products), it is important for marketers to forecast demand?

36
Q

What is a three step process for forecasting demand for new products?

A
  1. Predicting the percentage of customers who will become aware of the product
  2. Predicting the percentage of those who are aware of the product and who will try it
  3. Predicting the percentage of those who try the product and will become repeat customers
37
Q

What is the formula to use for forecasting demand?

A

Y1 Sales(S) = MS x AW x PP x AU x P

Y = Year
S = sales (annual)
MS = Market size (customer population)
AW = Awareness (fraction)
PP = Probability of purchase (surveyed)
AU = Average number of units purchased
P = Price

38
Q

True or false: products vary greatly in their longevity?

39
Q

What are the five stages in the product life cycle?

A
  1. Development
  2. Introduction
  3. Growth
  4. Maturity
  5. Decline
40
Q

In the introduction stage, are sales low?

41
Q

In the introduction stage, are profits negative?

42
Q

Who are the customers in the introduction stage?

A

Visionaries

43
Q

How are competitors in the introduction stage?

44
Q

How are sales in the growth stage?

A

Fast growth

45
Q

Are profits rising in the growth stage?

46
Q

What are customers in the growth stage?

A

Early adopters

47
Q

How are competitors in the growth stage?

48
Q

How are sales in the maturity stage?

A

Peak sales

49
Q

How are profits in the maturity stage?

50
Q

What are customers in the maturity stage?

51
Q

How are competitors in the maturity stage?

52
Q

How are sales in the decline stage?

53
Q

How are profits in the decline stage?

54
Q

What are customers in the decline stage?

A

People who have not adopted the replacement yet

55
Q

How are competitors in the decline stage?

A

Competitors exit the market

56
Q

In the development stage, what do R&D expenditures vary based on?

A

the level of innovativeness, with product modifications being the least costly and radical innovations being the costliest.

57
Q

In the development stage, are product modifications expensive?

58
Q

In the development stage, are radical innovations expensive?

59
Q

True or false: in the introduction stage, marketing expenditures are high as awareness and knowledge of product features must be established in the target market?

60
Q

During the introduction stage, is selective distribution generally engaged, with skimming or penetration pricing being used, based upon barriers to entry?

61
Q

During the growth stage, with awareness and trial achieved, what is the dominant driver of sales?

A

the product’s performance

62
Q

True or false: in the growth stage, pricing is case specific?

63
Q

True or false: during the growth stage, price may be increased as the perceived value increases, however, in other cases, price declines are enacted to reach a broader market?

64
Q

What happens in the maturity stage?

A

All feasible market segments have been reached and distribution channels have been established

65
Q

In the maturity stage, are brand loyalty and differentiation central promotional aspects?

66
Q

How is pricing in the maturity stage?

A

Pricing becomes very competitive as market growth peaks and begins to decline

MKTG 448 (10 decks)

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