USC BUAD 307 Marketing Final Questions And
Answers All Are Correct Tests
Describe the components of a product. ANS • Product- is anything that is of value to a consumer
and can be offered through a voluntary marketing exchange.
• At the center is core customer value- the basic problem solving benefits that customers are seeking.
• Convert the core value into actual product- features, design, and quality level.
• Associated service (augmented product)- include the nonphysical aspects of the product, such as
product warranties, financing, product support, and after-sale service.
Identify the types of consumer products. ANS • Consumer products- are products and services
used by people for their personal use.
• 1. Specialty products and services- are those for which consumers express such a strong preference
that they expend considerable effort to search for the best suppliers.
• 2. Shopping products and services- are products or services for which consumers will spend a fair
amount of time comparing alternatives, such as furniture, apparel, fragrances, appliances, and travel
alternatives.
• 3. Convenience products and services- are those products or services for which the consumer is not
willing to spend any effort to evaluate prior to purchase.
• 4. Unsought products and services- are products consumers either do normally think of buying or
do not know about at all.
Identify the reasons firms create new products. ANS • Changing customers needs- Firms need to
innovate to respond to changing customer needs.
• Market saturation- Prevent declines in sales from market saturation.
• Managing Risk through diversity- Delete an entire product line in order to address changing market
condition and meet internal strategic priorities.
• Fashion cycles- Diversify their risk, and respond to short product life cycles, especially in industries
like fashion, apparel, arts, books, and software markets, where most sales come from new products.
• Improving business relationships- Innovations can help firms improve their business relationships
with suppliers.
Describe the different groups of adopters articulated by the diffusion of innovation theory. ANS •
Diffusion of innovation theory- the process by which a use of an innovation—whether a product,
,service, or process—spreads throughout a market group, over time and across various categories of
adopters.
• Innovators- are those buyer who want to be the first on the block to have the new product or
service. These buyers enjoy taking risks and are highly knowledgeable.
• Early adopters- they do not like to take as much risk, but they instead wait and purchase the product
after careful review.
• Early majority- which represents approximately 34 percent of the population is crucial because few
new products and services can be profitable until this large group buys them.
• Late majority- is the last group of buyers to enter a new product market. The product has achieved
its full market potential.
• Laggards- make up roughly 16 percent of the market. These customers avoid change and rely on
traditional products until they are no longer available.
Describe the various stages involved in developing a new product or service. ANS • 1. Idea
generation- to generate ideas for new products or service using several alternative techniques, such as
internal research and development, R&D consortia, licensing, tracking competitors.
o Internal research and development- many firms have their own R and D departments, in which
scientists work to solve complex problems and develop new ideas.
o R and D consortia- they explore new ideas or obtain solutions for developing new products.
o Licensing- firms buy the rights to use the technology or ideas from other research-intensive firms
through a licensing R and D.
o Brainstorming- groups work together to generate ideas.
o Outsourcing- people with special skills come together to foster creativity and innovation.
o Competitor's products- reverse engineering- involves taking apart a product, analyzing it, and
creating an improved product that does not infringe on the competitors patents, if they exist.
o Customer input- listening to customers is essential for successful marketing ideas.
• 2. Concept testing- firms test their concepts by either describing the idea of the new product or
service to potential customers or showing them images of what the product would look like.
• 3. Product development- entails a process of balancing various engineering, manufacturing,
marketing, and economic considerations to develop a product's form and features or a service's
features.
• 4. Market testing-
o Premarket tests- before they actually bring a product or service to the market to determine how
many customers will try and then continue to use the product or service according to a small group of
potential consumers.
, o Test marketing- introduces the offering to a limited geographical area prior to a national test.
• 5. Product launch- promotion, place, price, and timing.
• 6. Evaluation of results- firms evaluate t
Explain the product life cycle. ANS • Product life cycle- defines the stages that products move
through as they enter, get established in, and ultimately leave the marketplace.
• 1. Introduction stage- companies attempt to gain a strong foot hold in the market quickly by
appealing to innovators.
• 2. Growth stage- marked by a growing number of product adopters, rapid growth in industry sales,
and increase in both the number of competitors and the number of available products versions.
• 3. Maturity stage- is characterized by the adoption of the product by the late majority and intense
competition for market share among firms.
• 4. Decline stage- they either position themselves for a niche segment of diehard consumers or those
with special needs or they completely exit the market. . Knowing where a product or service is in its
life cycle helps managers determine its specific strategy at any given point in time.
Explain how the marketing of services differs from the marketing of products.Explain the product
life cycle. ANS • Services are intangible, inseparable, variable, and perishable. Cannot be seen or
touched, which makes it difficult to describe their benefits or promote them. Service providers
enhance service delivery with tangible attributes, like a nice atmosphere or price benefits. Services
get produced and consumed at the same time, so marketers must work quickly, and they are more
variable than products, though service providers attempt to reduce this variability as much as
possible. Consumers can't stockpile perishable services, marketers often provide incentives to stagger
demand.
Discuss four gaps in the Service Gap Model. ANS • 1. Knowledge gap- reflects the difference
between customers' expectations and the firm's perception of those customer exceptions. Firms need
to match customer expectations with actual service through research.
• 2. Standards gap- pertains to the difference between the firm's perceptions of customer's
expectations and the service standards it sets. Appropriate service standards and measurements of
service performance help close this gap.
• 3. Delivery gap- is the difference between the firm's service standards and the actual service it
provides to customers. Closing this gap requires adequate training and empowerment of employees.
• 4. Communication gap: refers to the difference between the actual service provided to customers
and the service that the firm's promotion program promises. Firms close the communications gap by
managing customer expectations and promising only what they can deliver.
