M Marketing 5th Edition By Dhruv Grewal – Test Bank
True / False Questions
1. A product is anything that is of value to a consumer and can be offered through a voluntary exchange.
This is the definition of a product.
2. Effective packaging and labels send consumers the signal “Buy me.”
Good packaging and labeling can grab the consumer’s attention and encourage the consumer to buy.
3. A company’s product line consists of its various product mixes.
This is backward. A company’s product mix consists of its various product lines.
4. Brands enable customers to quickly differentiate one firm or product from another.
As consumers become familiar with brands, they can more quickly differentiate between various offerings.
5. Brand equity is calculated by subtracting sales of generic brands from the sales of branded items in a category.
Brand equity is the set of assets and liabilities linked to a brand that add to or subtract from the value provided by the product or service.
6. The more familiar customers are with a brand, the harder their decision-making process will be.
Familiarity with a brand makes the decision-making process easier, not harder.
7. Harold is a loyal Coca-Cola customer. Loyal customers like Harold require lower marketing expenditures, benefiting businesses like Coca-Cola.
The costs of reaching loyal customers are lower, and their positive word of mouth reaches potential customers and reinforces the perceived value of current customers, all at no cost to the firm.
8. Private-label brands are imitations often sold by street vendors.
A private-label brand is a retailer or store brand, developed by retailers to be sold only within their own stores.
9. For a company like PepsiCo, brand dilution occurs when it sells more product than the competition.
Brand dilution refers to overuse of the brand for brand extensions, such that brand equity becomes weaker.
10. In entertainment licensing, the major risk to licensees is that the brand will become overexposed.
The licensor is the party granting the license, while the licensee is the one using the license to produce products using the licensed characters. For licensors, the major risk is the dilution of the brand.