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MGT 103 Midterm 2 Exam Questions and Answers
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MGT 103 Midterm 2 Exam Questions and Answers
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MGT 103 Midterm 2 Exam Questions andAnswers
Product - Answers -Goods, services, and ideas
Types of Goods - Answers -Durable: long-lasting, do not need to purchased often,
meant to be reused (cars, furniture)
Nondurable: short lifespan, meant to be used and repurchased (shampoo, chewing
gum)
Types of Consumer Products - Answers -Convenience --> shopping --> specialty -->
unsought
- Price increases in this order
- Brand loyalty increases in this order (except for unsought)
- Frequency of purchase decreases in this order
Convenience Product - Answers -Products that are purchased frequently, conveniently,
and with minimum shopping effort
- toothpaste, hand soap, ATM withdrawal
Shopping Product - Answers -Consumer compares several alternatives on criteria such
as price, quality, or style
- camera, TV, airline tickets
Specialty Product - Answers -Products a consumer makes a special effort to seek out
and buy
- Rolls Royce, Rolex watch, heart surgery
Unsought Product - Answers -Products the consumer does not know about or knows
about but does not initially want
- burial insurance, thesaurus, fire extinguishers
Product Taxanomy - Answers -Product class --> product form --> product line -->
product mix
Product Class - Answers -Refers to the entire category or industry that the product falls
in
- running shoes
Product Form - Answers -Variations of a product within the product class
- 5 toed shoes, track spiked, etc.
Product line - Answers -Different versions of a product form
,- differences in color-way and cushioning
SKU - Answers -Stock keeping unit
- used to identify each item within the product line
- the bigger the firm, the more SKUs they have
- includes all the different versions of a product
Product Mix - Answers -All products that a firm sells
- collection of product lines
Legal Definition of a New Product - Answers -A product that is functionally different from
existing products
- companies can use this to their advantage because that functional difference can be
extremely small, but they can still label it as a "new" product
- new products are the lifeblood of a company because customers get excited by the
word "new"
Feature Bloat - Answers -Unnecessary features or functions just for the purpose of
boasting about it
- bigger, wider, bolder, faster, stronger, etc.
- Geek Squad example: capitalized on feature bloat of technology companies by selling
people on how to use those new/complicated items, despite the fact that they used to
be considered intuitive
The Product Concept - Answers -Core: minimum viable product, the simplest your
product can be
Expected: expected set of features that is standard amongst that industry
Augmented: the differentiation from competitors
Potential: all the augmentations and transformations a product might undergo in the
future
Positioning - Answers -The place that a brand occupies in the mind of its consumers
relative to competing brands
Reverse Positioning - Answers -When a firm positions itself in a way that runs counter
to the direction in which the rest of the market is moving
- Withholding many of the attributes its competitors consider necessary
Ikea Example - Answers -There is no direct competitor to Ikea (which is very rare)
- They ignored the product concept by cutting out the core and expected levels (started
with something that was different from their competition)
- Ikea redefined furniture from a lifetime purchase that was incentivized and financed to
a nice, but cheap and replaceable product
- Reverse positioning: no in-store sales assistance, limited variety, no delivery, doesn't
offer installation or assembly, cheaper quality, cafe inside, simple style
, New Products from the Consumer's Perspective - Answers -Continuous innovation: no
need to reeducate consumers (gas vehicle)
Dynamically continuous innovation: minor changes in consumer behavior (diesel
vehicle)
Discontinuous innovation: consumers must learn entirely new consumption patterns
(electric cars)
New Products from the Organization's Perspective - Answers -Product line extension:
incremental improvement of an existing product line the company already sells (simple
change, Cheerios packaging into single servings)
Jump in innovation: easy to adopt for consumers, but takes considerable effort/capital
(analogue phones becoming smart phones)
Brand extension: extending an existing brand into new product categories
Radical innovation: disruptive and totally different from what the business was doing
before (trains that use magnets rather than wheels)
What Makes a Successful New Product Launch? - Answers -1. Significant differentiation
points
2. A well defined target audience with specific needs, wants, and preferences that the
product will satisfy
- Beats headphones example: streetwear and pop culture oriented rather than being
studio quality, used athletes and celebrities to endorse the product
Product Success Matrix - Answers -Differentiation vs. Relevance:
- Ante: high relevance, but low differentiation (can get into the game and get some
sales, but no staying power)
- Fools gold: high differentiation, but low relevance (easy to assume it will be successful
because you are different, but does anyone really care?)
What Makes an Unsuccessful New Product Launch? - Answers -1. Not satisfying a
critical consumer need or expectation (can be generally well designed and well made
but fail to due missing a critical success factor)
2. Bad timing (too soon or too late to the market, consumers tastes change)
3. No access to buyers (40,000 consumers packaged goods are introduced globally
each year)
4. Poor quality (not thought out or thoroughly tested)
5. Poor execution of the marketing mix (brand name, package, price, promotion, or
distribution mistakes
6. Little market attractiveness (too small or too competitive)
Products that Failed - Answers -Crystal Pepsi: high differentiation, but low relevance
(nobody cared about the color of their soda because most of the time they can't even
see it)
Dunk-A-Balls: parents were excited to buy it, but found that it was easy for children to
play with and did not rebuy
Microsoft Zune: bad timing (people already bought iPads)
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