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Practice Exam. Performance Indicator 4.04.

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practice exam
Practice Exam

Performance Indicator 4.04

slide2

Sandy opened a small business that carries a very wide variety of products of varying qualities at many different prices. Sandy is losing customers who are disappointed with the selection, quality, and quantity of items. What is lacking in Sandy's product mix?

A. Consistency C. Depth

B. Breadth D. Width

slide3

A

Consistency

The items in the product mix are not closely related in end use, target market, or price range. Sandy has purchased too many different items of varying quality and prices to have consistency. Width and breadth both refer to the number of product lines carried by a company. Sandy has a broad product line. Depth refers to the number of products and the assortment offered. Sandy also has a deep product line because she is buying large quantities of the products.

slide4

Which of the following is an example of a company's using brand extension?

A. Coca-Cola adding Caffeine-Free Diet Coke

B. Winn-Dixie installing an ATM machine in its stores

C. Tyson packaging smaller portions of chicken for the elderly

D. Kroger adding Blue Bell ice cream to its frozen foods section

slide5

A

Coca-Cola adding Caffeine-Free Diet Coke

Brand extension involves using successful brands to introduce new products. Coke added another drink under the Coke name, thereby engaging in brand extension. Packaging smaller portions of chicken for the elderly does not involve adding another product. Selling Blue Bell ice cream is an example of Kroger adding to its product mix. Installing an ATM machine involves adding more services.

slide6

Which of the following factors helps a business to determine its product mix?

A. Merchandise breadth and depth C. Staple goods and regular goods

B. Size and target market D. Seasonal goods and convenience goods

slide7

B

Size and target market

The physical size of a business and its target market help to determine the product mix. Merchandise breadth and depth refers to the number of lines of a product and the quantity of each line. Staple goods and regular goods are the core of a store's merchandise offering. Seasonal goods and convenience goods are goods carried by a store during particular seasons or those that are bought frequently.

slide8

To appeal to a target market with slightly different needs, a business decides to add a group of related items to its product mix. This is called a:

A. service expansion. C. line extension.

B. product replacement. D. product enhancement.

slide9

C

Line extension

The product mix is the particular assortment of goods and services that a business offers in order to meet its market's needs and its company's goals. When a business adds additional items to an existing product line, it is known as a product line extension. When a business develops a new product to take the place of an older product, it is a product replacement. Service expansion is adding additional services. A product enhancement is adding a new feature or benefit to an existing product.

slide10

The product mix that a business decides to offer customers helps to project the business's what?

A. display themes. C. service style.

B. sales goals. D. unique image.

slide11

D

Unique image

Image is the way something is viewed. Businesses create a certain image in order to appeal to a specific target market. The business's product mix, the assortment of goods and services that it offers, helps to project that image. For example, a business that sells an assortment of expensive, specialty items projects a different image than a business that sells an assortment of factory-seconds, or distressed goods. The product mix reinforces each business's unique image. Sales goals are sales objectives that businesses want to achieve. Businesses often consider sales goals when deciding on a product mix. The product mix does not help to project a business's service style or display themes.

slide12

One way for a business to expand its product mix is by

A. monitoring its products' life cycles. C. increasing sales quotas.

B. acquiring another company. D. analyzing product width decisions.

slide13

B

Acquiring another company

The product mix is the particular assortment of goods and services that a business offers in order to meet the needs of its market(s) and its company goals. To meet the needs of existing customers or to obtain a new segment of the market, a business might decide to expand its product mix by providing additional goods and services. One way to add items to a product mix is by acquiring or purchasing another company. Monitoring products and analyzing decisions are important business activities; however, they do not expand the business's product mix. Sales quotas are specific selling goals for members of a business's sales force and increasing them is not a way to expand the product mix.

slide14

When a business expands its product mix, its goal is to appeal to

A. fewer market segments with fewer product options.

B. more market segments with a wider variety of options.

C. existing market segments using more promotion.

D. select market segments using less promotion.

slide15

B

More market segments with a wider variety of options

Product mix is the particular assortment of goods and services that a business offers to meet the needs of its market(s) and to achieve its goals. Often, the target market's needs and wants change, so the business must be willing to change its product mix, so it can remain competitive in the marketplace. One change a business might make is to expand its product mix. This strategy involves adding more goods and/or services to its existing product mix in order to appeal to more market segments. When a business reduces the amount of products it offers to its target markets, it is using a contraction strategy. After the business makes decisions about its product mix, it can set its promotional goals.

slide16

Due to lackluster sales, the Elba Corporation has decided to eliminate several of its product lines. Elba's executives hope that by focusing on fewer product lines, they will see more profit. The Elba Corporation is planning to adjust the _________ of its product mix.

A. depth C. width

B. length D. height

slide17

C

Width

Elba is planning to adjust the width of its product mix by reducing the number of product lines that it offers. The length of a product mix is based on the number of different products or brands that the business offers. The depth of a product mix is based on variations in each product that the business offers. The height of a product mix is a fictitious term.