Product Differentiation: Study Guide

Topics: Product differentiation, Porter generic strategies, Strategic management Pages: 44 (6359 words) Published: April 22, 2014
CHAPTER 5: PRODUCT DIFFERENTIATION

TRUE/FALSE QUESTIONS

1.
Wal-Mart exemplifies a firm pursuing a product differentiation strategy while Victoria's Secret exemplifies a firm pursuing a cost leadership strategy.

True

False
Answer: False
Page: 146
Difficulty: Easy
Chapter Objective: 1

2.
Product differentiation is a business strategy whereby firms attempt to gain a competitive advantage by increasing the perceived value of their products and services relative to the perceived value of other firms' products or services.

True

False
Answer: True
Page: 146
Difficulty: Easy
Chapter Objective: 1

3.
Attempts to create differences in the relative perceived value of a firm's products or services are rarely made by altering the objective properties of those products or services.

True

False
Answer: False
Page: 146
Difficulty: Moderate
Chapter Objective: 1

4.
While firms often alter the objective properties of their products or services in order to implement a product differentiation strategy, the existence of product differentiation is always a matter of customer perception.

True

False
Answer: True
Page: 146
Difficulty: Moderate
Chapter Objective: 1

5.
If products or services are perceived as being different in a way that is valued by customers, even if there is no physical differentiation, then product differentiation exists.

True

False
Answer: True
Page: 146
Difficulty: Moderate
Chapter Objective: 1

6.
A hedonic price is that part of a products' or services' actual price that is not attributable to a particular attribute of that product or service.

True

False
Answer: False
Page: 148
Difficulty: Hard
Chapter Objective: 2

7.
Chryslers' introduction of the "cab forward" design was an attempt at differentiation through product features.

True

False
Answer: True
Page: 148
Difficulty: Hard
Chapter Objective: 2

8.
To the extent that differences in product complexity lead customers to conclude that the products of some firms are more valuable than the product of other firms, then product complexity can be a basis of product differentiation.

True

False
Answer: True
Page: 149
Difficulty: Moderate
Chapter Objective: 2

9.
Timing-based product differentiation relies solely on being a first mover.

True

False
Answer: False
Page: 149
Difficulty: Moderate
Chapter Objective: 2

10.
The physical location of a firm cannot be a source of product differentiation.

True

False
Answer: False
Page: 149
Difficulty: Easy
Chapter Objective: 2

11.
Products can be differentiated by the extent to which they are customized for particular customer applications.

True

False
Answer: True
Page: 150
Difficulty: Easy
Chapter Objective: 2

12.
Through advertising and other consumer marketing efforts, firms attempt to alter the perceptions of current and potential customers, but only when specific attributes of a firm's products or services are altered.

True

False
Answer: False
Page: 150
Difficulty: Moderate
Chapter Objective: 2

13.
Once developed, a firm's reputation can last a long time, even if the basis for that reputation no longer exists.

True

False
Answer: True
Page: 150
Difficulty: Moderate
Chapter Objective: 2

14.
The ability to use organization structure to facilitate coordination among scientific disciplines to conduct research is known as architectural competence.

True

False
Answer: True
Page: 151
Difficulty: Moderate
Chapter Objective: 2

15.
When firms place their products in movies, this is known as co-branding.

True

False
Answer: False
Page: 152
Difficulty: Hard
Chapter Objective: 2

16.
In the information technology business, inter-connectivity is a relatively unimportant basis of potential product differentiation.

True

False
Answer: False
Page: 152
Difficulty: Moderate
Chapter Objective: 2

17.
Product differentiation is...
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