You are the marketing manager for Connie’s Case Creations, a successful business that makes protective cases for smart phones and tablet computers. Classify each of the three case products below as a convenience product, a shopping product, or a specialty product. Limited-edition, museum-quality protective cases, numbered and signed by top artists, for buyers who want a unique, creative case as a status symbol. High-quality, high-fashion protective cases that are more durable and more attractive than competing products while still protecting against breakage and keeping devices charged. Inexpensive, fun protective cases sold at supermarket and convenience store checkout counters, appealing to the buyer’s impulse to set aside an existing case for something new.
To manufacture protective cases and keep its operations running smoothly, Connie’s Case Creations makes purchases from a number of suppliers. Using the drop down menu, match the description of each purchase with the corresponding business-product classification. Purchase of large-scale machinery to mold each case. Purchase of cleaning fluids for maintaining manufacturing equipment. Purchase of accounting services for tax preparation. Purchase of bulk plastics to be molded into cases. Purchase of multifunction laser printers for office use. Purchase of leather straps to be fastened to finished cases. Purchase of plastic glues to attach decorations to finished cases.
You will be making changes to the product mix of Connie’s Creative Cases, based on research showing that accessories for high-tech devices need to be refreshed regularly to retain customer interest and to encourage additional purchases. What effect will each of the following actions have? Add a new line of low-end cases appealing to impulse buyers and a new line of high-end, one-of-a-kind artistic cases for affluent buyers. Reduce the number of protective phone cases in the highest-price product line. Cut the product line of museum-quality protective cases for tablet computers. Responding to customer comments, offer more color choices in the inexpensive line of phone cases. Launch a line of cases that use solar power to recharge the devices.
You are looking at ways to manage the existing products of Connie’s Creative Cases. Indicate whether each of these statements about product modifications and line extensions are true or false. Line extensions are less common than new products because they are a costlier, riskier alternative for increasing sales. Redesigning a product to increase its convenience, effectiveness, or safety is part of a functional modification. Aesthetic modification means altering the sensory appeal of a product by changing its visual appearance or its sound. Making Connie’s Creative Cases more durable and water-resistant would enhance the concept modification. The goal of aesthetic modifications is to differentiate Connie’s Creative Cases from competing brands and increase market share by adding to the product’s appeal.
You’ve developed a list of activities that must be completed when developing a new product for Connie’s Creative Cases. The steps in developing a new product are:
Idea generation
Screening
Concept testing
Business analysis
Product development
Test marketing
Commercialization
Use the drop down menu to match each activity with one of the seven steps in developing a new product.
Determine whether the proposed new product fits with our company’s long-term goals and whether we have the technical expertise to produce it.
Prepare realistic illustrations of the new product and conduct marketing research to find out whether consumers are interested in this product’s features and benefits.
Analyze test-marketing results, adjust the marketing mix, and begin introducing the new product in major U.S. markets, from West to East.
Collect suggestions for new products from employees, marketing agencies, and customers.
Use analytical models to estimate the new product’s first- and second-year sales, manufacturing and marketing costs, and potential profitability.
Prepare a prototype of the new product, noting the costs and technical challenges of ensuring the appropriate level of quality.
Experiment with marketing the new product in two markets, varying the advertising, packaging, and pricing to gauge consumer reaction.
You’re a management trainee with Colgate-Palmolive, which markets personal-care products under such well-known brands as Colgate toothpaste, Palmolive dishwashing liquid, Ajax household cleanser, and Irish Spring soap. Identify each of the following as a brand name, brand mark, or trade name.
Colgate toothpaste Colgate-Palmolive Colgate Total toothpaste Palmolive dishwashing liquid Illustration of a hand holding a glass on Palmolive label Ajax Triple Action dishwashing liquid
Your supervisor at Colgate-Palmolive asks you to report on brand competition among toothpastes. Which of the following statements about types of brands are true and which are false? Manufacturer brands such as Colgate are nationally known and widely available. Store brands such as Trader Joe’s toothpaste are typically produced by the retailers themselves. Generic toothpaste products carry no store or manufacturer brand. Trader Joe and other retailers often rely on store brands, including private-label toothpastes, to build profits and loyalty. Generic products are increasingly popular, particularly among consumers who want good value without sacrificing quality.
As assistant to the brand manager for Colgate Total toothpaste, you’re looking at ways to increase brand loyalty. You and your manager have brainstormed three marketing programs, each aiming to achieve a specific objective in strengthening brand loyalty. Use the drop down menu to label each of these programs as the weakest level of brand loyalty, middle level of brand loyalty, or strongest level of brand loyalty. Run prime-time television commercials to increase recognition of Colgate Total brand. The objective is to make customers aware that the brand exists and encourage them to purchase it. Create a reward program with points for each Colgate Total product purchased. The objective is to have customers go to stores with this brand in mind and accept no substitutes. Use Facebook promotions and mobile coupons to prompt customers to show preference for Colgate Total when buying toothpaste. As long as Colgate Total toothpastes are in stock, the marketing objective is to induce customer to buy one of them.
You’re helping Colgate plan branding for a new children’s toothpaste, which will be marketed on the basis of quality and unique benefits. Use the drop down menu to indicate whether each of these possible branding strategies represents individual branding or family branding. Create “Col-Kids” as a new brand for this new children’s toothpaste. This way, Col-Kids can be directed toward a different market segment, without confusing consumers. Brand the new children’s toothpaste as “Young Colgate Total” to take advantage of the recognition of the Colgate brand name. Test “Toothpaste for Tots” or “Toothpaste for Toddlers” as brand names. If this new product fails, the disappearance of this brand will not affect the company’s other brands. Use “Colgate-Palmolive Toothpaste for Tots” as the brand for this new product, giving it a head-start because of positive perceptions of this company. Plan to brand the new product as “Junior’s First Toothpaste” to highlight the targeted segment and avoid associations with other company brands.
You’ve decided to use family branding and call the new product “Young Colgate Total” to take advantage of the brand equity and the quality reputation already earned by “Colgate Total” in the oral-care category. You’re also going to introduce other products under the brand of “Young Colgate Total,” as shown below. Which of the following statements about these brand or line extensions are true and which are false? If you launch a “Young Colgate Total” antibacterial soap, you’re using a line extension, putting an existing brand on a new product in the same product category. A “Young Colgate Total” mouthwash would be a brand extension because it would put an existing brand on a new product in a different category. Marketing a “Young Colgate Total” lip moisturizer would represent a brand extension because it would put an existing brand on a new product in a different category. If you use the “Young Colgate Total” brand on a baby pacifier, that would represent a line extension because it involves an existing brand applied to a new product line.
Because of your experience at Colgate, you’ve been recruited by Sunny Smiles Toothpaste, the first product marketed by a startup with a small budget but big plans. You and the entrepreneurial founder of Sunny Smiles, Inc. have been discussing product pricing. Use the drop down menu to match each of the following statements with the corresponding pricing objective. “Our product must attract a certain percentage of total industry sales if we’re going to convince top grocery firms to display it with the major brands.” “We can’t price higher or lower than our competitors because of price stability.” “If we can earn 5 percent per year on our financial investment, we will be able to grow.” “The only way to stay in business is to keep revenues rolling in, even if we have to cut price.” “Ultimately, we will pursue the highest profits we can possibly earn. In the short-term, we’ll seek to grow profits by 10 percent every year.”
In preparation for pricing Sunny Smiles Toothpaste, you’ve estimated the company’s projected costs and profits at different production levels. Using the drop down menu, fill in the blanks to complete the following descriptions of different aspects of cost-based pricing.
We can calculate the cost of producing a certain number of toothpaste units by adding together both the costs and the fixed costs.
Our cost depends on how many units of toothpaste we produce.
Our cost is the amount of money we spend for rent and other overhead, which doesn’t change when production increases or decreases.
Once we know the cost of producing one unit, we can add a for additional expenses and for profit to arrive at a basic price.
After we begin to earn a profit on higher production levels beyond the breakeven quantity, costs don’t change.
Because you sell to retailers, you don’t control the final price paid by consumers. You do, however, know the pricing strategies followed by your retail customers. Use the drop down menu to match each description with the corresponding psychological pricing strategy. Convenience store ABC plans to price Sunny Smiles Toothpaste at two for $5. Drug chain Super-Star RX plans to band Sunny Smiles Toothpaste with a toothbrush and price the set at $6. Local supermarket Family Foodbasket will set a price of $2.50 and refrain from putting Sunny Smiles Toothpaste on sale at a lower price followed by restoring the regular, higher price. Supermarket chain XYZ plans to charge $2.95 for Sunny Smiles Toothpaste. Convenience store RoadHost Plus will price Sunny Smiles Toothpaste at the same price as it has traditionally charged for toothpaste products of the same size.
Sunny Smiles sells to retailers, who are its business customers because they resell toothbrushes and toothpastes to consumers. Using the drop down menu, identify the type of discount represented by each of the following descriptions. Sunny Smiles will reduce the price for a carton of 20 dozen toothbrushes by 5 percent below the price for buying a smaller quantity. Sunny Smiles pays large supermarkets a small fee for featuring a standalone display of toothpastes in the oral-care aisle for one week. Sunny Smiles offers retailers a 40 percent discount from the typical retail price for its toothbrushes and toothpastes, as compensation for store functions such as stocking shelves. Sunny Smiles institutes a January promotional price to encourage retailers to stock up during a period that would otherwise see few orders. Sunny Smiles lets retailers deduct 1 percent from their invoice if they pay within 14 days.
For the introduction of “Young Colgate Total” toothpaste for children, your colleagues have submitted a number of suggestions about pricing this product, which has unique features and benefits. Which one of the following ideas should you choose?
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