Exam Prep Ch.14 Developing And Pricing Goods And Services

Understanding Business, 12e (Nickels)

Chapter 14 Developing and Pricing Goods and Services

1) When consumers calculate the value of a product, they look at the benefits and then subtract the cost.

2) Successful businesses constantly monitor consumer wants and needs.

3) To satisfy consumers managers must learn to listen better than they do now and to adapt constantly to changing market demands.

4) Once an organization surveys the consumer's wants and needs, has designed a group of products to meet those needs, and begun to market them in stores, the organization is assured of success.

5) Fast food restaurants must constantly monitor all sources of information for new-product ideas.

6) Fast food restaurants, like Carl's Jr., pride themselves on offering precisely the same menu around the world so that customers know exactly what to expect when they eat at one of those restaurants.

7) Product development is a key activity in any modern business, anywhere in the world.

8) From a strategic marketing viewpoint, a total product offer includes all of the tangible attributes of a good or service, and excludes any intangible attributes.

9) The image created by advertising is part of the total product offer of a product.

10) The reputation of the manufacturer and the retail store surroundings are considered part of the value enhancers of a total product offer.

11) Price, store surroundings, service, and brand name are all elements that consumers evaluate in a total product offer.

12) Successful marketers attempt to think like consumers and evaluate the total product offer as a collection of impressions created by all parts of the value package.

13) The critical component of a total product offer is always a low price.

14) Low prices can often help retailers create an attractive total product offer.

15) In evaluating a total product offer, value enhancers such as service, guarantees, reputation of the seller, etc. are as important to customers as the basic product.

16) A firm's product line refers to all of the different geographic markets in which it sells the same good or service.

17) A single product line may contain several competing brands.

18) The term product line describes the combination of product mixes offered by a manufacturer.

19) A product line is a group of products that are physically similar or are intended for a similar market.

20) The several product lines that a company offers for sale make up that organization's product mix.

21) While service providers offer product lines, they are unable to offer product mixes.

22) Artisan breads, bagels, sandwiches, soups, and pastries are products that would be included in the product mix of a cafe.

23) Car dealers realize that consumers focus exclusively on price and warranty.

24) A bank's product line may include safety deposit boxes, car loans, and checking accounts.

25) The concepts of product lines and product mixes apply to marketers of both products and services.

26) According to the Adapting to Change box, social celebrity-driven mobile games are not making as much money as app developers expected.

27) A traditional McDonald's and a McCafe are examples of the McDonald's Corporation product mix.

28) At Affordable Appliances stores, all new products are offered with an extended service contract, as well as free delivery and installation. By offering these value enhancers, Isuzu's has added to their total product offer.

29) Miller Light Beer, Maxwell House Coffee, Jell-O brand gelatin, Kraft mayonnaise, and Marlboro Cigarettes were all at one time products of the Philip Morris Company. These products represented a part of the product line Philip Morris offered.

30) In order for product differentiation to be effective, real product differences must be identified so that one product is clearly better than others.

31) Marketers use pricing, advertising, and packaging to differentiate their products from competitors' products even when actual differences are quite small.

32) Creative product differentiation can enable a small business to increase market share.

33) The most common classification of consumer goods and services is based on producer or manufacturer behavior in the market.

34) One common way of classifying consumer goods is based on consumer purchasing behavior.

35) The uniqueness of convenience goods and services stimulates consumers to make an extra effort to purchase them.

36) Convenience goods are products that the consumer wants to purchase frequently and with minimal effort.

37) The characteristics of specialty goods restrict their effective sale online.

38) Unsought goods and services fail to provide the benefits consumers expect.

39) Unsought goods and services are products consumers do not actively seek out for purchase on a regular basis.

40) The marketing efforts for convenience and specialty goods are essentially the same.

41) Shopping goods and services are purchased only after consumers compare value, quality, style, and price of competing goods and services.

42) Successful marketing of convenience and specialty goods require different marketing mixes.

43) Most consumers view specialty goods as having a variety of acceptable substitutes.

44) The classification of goods or services into a particular class depends on the individual consumer.

45) A shopping good for one consumer could be a specialty good for another consumer.

46) Specialty goods are often marketed through specialty magazines.

47) Some goods can be classified as either consumer goods or as industrial goods.

48) Industrial goods are sold in the B2B market.

49) As a promotional strategy, advertising is more important in the marketing of industrial goods than it is in the marketing of consumer goods.

50) Capital items are industrial goods that are expensive and last a long time.

51) Industrial goods and services are used to produce other products.

52) Accessory equipment consists of capital items that cost less and are shorter lived than installation items.

53) The two types of industrial goods are production goods and unsought goods.

54) Equipment maintenance and repair of equipment used by businesses is an industrial support good.

55) Paper clips, stationery, and other office supplies used by businesses are types of industrial support goods.

56) A pickup truck can be classified as either a consumer good or an industrial good.

57) Newspapers are sold daily in a wide variety of locations. This widespread distribution suggests that newspapers are classified as convenience goods.

58) Unsought goods and services are purchased on impulse and provide no added value to consumers.

59) Consumers are best served by providing specialty goods in convenient locations.

60) Jackson is the owner of a small pizzeria and draws a variety of competition—from other local restaurants offering pizza to the large national chains. The small size of Jackson's business prevents him from successfully utilizing a product differentiation strategy.

61) While White Glove Cleaners offers home and commercial cleaning services no different from competitors, the company is unable to utilize a product differentiation strategy.

62) Cool Down Drinks, a national producer of soft drinks, wants to differentiate its products from those of other providers. To implement this strategy successfully will require Cool Down to create tangible differences in the physical product it offers.

63) Louis expects to visit a variety of retailers and websites to compare features, quality, and prices of different speaker equipment brands. This behavior indicates that for Louis a speaker system is a shopping good.

64) Gabriella strongly prefers a specific brand of gourmet coffee. Since there is only one store in her area that sells her brand, she makes an extra effort to purchase this item. Gabriella's purchasing behavior indicates for her this product is a specialty good.

65) Land Movers Equipment Company sells used heavy construction equipment such as bulldozers and cranes. Land Movers products represent examples of an accessory equipment industrial good.

66) Securitas Financial Services purchased several new computers and laser printers for office use. These items would be correctly classified as accessory equipment.

67) Packaging is an important part of the total product offer.

68) One function of effective packaging is to attract the attention of consumers.

69) One function of effective packaging is to protect the goods inside during handling and storage, as well as deter product tampering and theft.

70) One function of effective packaging is to provide information regarding warranties, benefits, and uses of the good inside the package.

71) More than any other component of a total product offer, technology has reduced the importance of packaging.

72) Changes in packaging can transform the product in the minds of consumers and open larger market opportunities.

73) While packaging innovations benefit the consumer, they have vastly increased the workload of retailers.

74) While the packaging of services has not yet captured the attention of businesses, technological improvements will likely create new opportunities.

75) The exclusive goal companies expect of packaging is to protect the product from damage in transit.

76) Today, the packaging of products has been given a greater role in product promotion.

77) The trend toward self-service retailers has increased the importance of packaging.

78) As a result of increased advertising and well-trained salespeople, packaging is less important than in the past.

79) Regardless of changes in packaging, the total product offer remains unchanged.

80) While the UPC improves efficiency at the retail checkout counter, it has increased problems in controlling inventory.

81) NiceIce Meals designed a new type of packaging that significantly improves taste and texture of food when defrosted. Unfortunately, firms seldom find that improvements in packaging impact market share and profits.

82) A brand includes practically all means of identifying a product.

83) The purpose of a brand name is to establish an image of generic goods or services.

84) Brand names can significantly impact consumer perceptions of a product.

85) A trademark is a brand that has been given exclusive legal protection for both the brand name and the pictorial design.

86) The benefits provided by a brand name for a buyer include reduced search time, prestige, and quality assurance.

87) The U.S. legal system does not offer trademark protection.

88) Brand names help sellers with new-product introductions and create an opportunity for higher prices.

89) Dealer (private) brands are products that do not carry the manufacturer's name, but rather carry the name of a distributor or retailer.

90) Chevrolet is an example of a generic name in the automobile market.

91) Manufacturers' brands carry the brand name of the producers that distribute the products nationally.

92) Most manufacturers hope that their brand names will become a generic name.

93) Sales of generic products are decreasing because consumers prefer the higher quality of the nationally known brands.

94) The legal protection offered to an established brand name prevents that name from being used as a generic name for a product.

95) The use of price discounts and coupons may erode the commitment of consumers to brand names.

96) The best strategy for brand name manufacturers to respond to the challenge of generic goods is to use price discounts and coupons to price their products more aggressively.

97) A knockoff brand is a brand name that has lost its exclusive legal protection.

98) Brand equity refers to those factors that people associate with a specific brand name, such as awareness, perceived quality, and loyalty.

99) Brand loyalty refers to the degree to which customers are satisfied with a brand and are committed to further purchases.

100) Although their names are similar, brand loyalty and brand equity are unrelated.

101) When consumer loyalty reaches the point of brand insistence, the product becomes a specialty good.

102) Event sponsorship like the Tostito's Fiesta Bowl football game helps improve brand awareness.

103) Price, appearance, and reputation can influence a consumer's perceptions of quality.

104) Endorsements by sports or movie celebrities can help create a favorable brand association.

105) Brand association is the linking of a brand to other favorable images such as a celebrity or geographic location.

106) Brand managers have direct responsibility for all the elements of the marketing mix for a particular brand or product line.

107) Firms use brand managers or brand teams to give them greater control over both new-product development and product promotion.

108) Federal legislation requires that the brand name of a product clearly identify the manufacturer of that product.

109) Brand managers are responsible for the marketing of a product after it has been developed and a clear promotional message has been identified.

110) According to the Reaching Beyond Our Borders box, brand names must hold great meaning or customers will not acknowledge them.

111) Freddie's Market offers customers tissues, canned goods, napkins, and various detergents in basic packaging with no identified brand. These goods are popular with the more cost-conscious shoppers because they are significantly less expensive than nationally known brand names. These types of goods are examples of generic goods.

112) Hammer's Hardware, a nationwide chain of hardware stores, sells a line of tools under the Hammer's brand even though they were actually produced by another firm. Since the products are actually produced by another firm, the Hammer's Hardware brand is an example of a knockoff brand.

113) CarryOn, a manufacturer and seller of luggage and briefcases, has found marketing research indicates durability is the attribute that consumers most desire in their products. CarryOn now emphasizes durability in all of their promotional efforts. This strategy is intended to build brand equity.

114) Sandy works for Epic Electronics and oversees the marketing mix for the firm's line of HDTVs. Sandy serves as a brand manager for Epic Electronics.

115) New-product failures are most often caused by excessively high prices.

116) New products often fail because they don't deliver to consumers their promised benefits.

117) Firms should listen to their suppliers for new-product ideas.

118) Employees, not the firm's research and development department, are the number one source of ideas for new industrial products.

119) Product testing is designed to reduce the number of new-product ideas that a firm works on at any one time.

120) In the new-product development process, product analysis is completed prior to the product screening stage.

121) The product analysis stage of the new-product development process considers the sales forecasts and cost estimates of a new-product idea.

122) Concept testing involves taking a product idea to consumers to test their reactions.

123) Social media and company websites are useful in the commercialization process for new products.

124) New-product commercialization includes promoting the product to distributors and retailers as well as developing strong advertising and sales campaigns.

125) "Create a better mousetrap and the world will beat a path to your door." This statement is consistent with the idea behind the commercialization of products.

126) At the concept testing stage, factors such as packaging, branding, and ingredients should be tested to ensure that a product is acceptable to potential consumers.

127) Sherrie's Snacks has found that an effective technique to generate ideas for new consumer products is to carefully listen to employees and suppliers.

128) The product life cycle presents a theoretical model describing what happens to sales and profits for a class of products over time.

129) While the time in each stage may vary, all products progress through each stage of the product life cycle.

130) The four stages in the product life cycle are introduction, market, exchange, and disposal.

131) While some products remain in the introductory stage of the product life cycle for years, other products may go through the entire cycle in a few months.

132) Knowledge of the product life cycle model can help firms develop marketing strategies and anticipate market changes.

133) Successful firms maintain consistency in their marketing mix strategies throughout the product life cycle.

134) Profits peak during the maturity stage of the product life cycle.

135) While the product life cycle is a good theory, it's not important for marketers to recognize what life cycle stage a product is in.

136) Successful businesses develop a mix of price, product, place, and promotion that is consistently applied throughout a product's life cycle.

137) Some goods have a product life cycle that is completed in a shorter amount of time than other goods.

138) Eddie has just taken a job with a local microbrewery after several years working as a brand manager for an established product. Now, he is responsible for managing the marketing mix for a new product introduction. In his new job, Eddie will find that while the products may be at different stages of the product life cycle, the marketing strategies will be essentially the same.

139) As consumers evaluate a product, price plays a small role.

140) A long-run pricing objective of almost all firms is to optimize profit.

141) Sometimes a firm will lower prices below their costs in order to build a customer base.

142) In order to achieve a social objective, firms use low prices to enable people with low incomes to buy their product.

143) Consumer perceptions of product quality are affected by promotions and packaging, but not by the price of the product.

144) Successful firms coordinate pricing objective strategies with decisions regarding product design, packaging, branding, distribution, and promotion.

145) Successful firms always try to maintain consistency in their short-run and long-run pricing objectives.

146) Cost-based pricing adds a desired profit margin to the cost of producing a product.

147) In the long run the market determines what the price will be.

148) Target costing adds a profit margin to estimated cost of production to determine the optimal price.

149) Demand-based pricing is another name for cost-based pricing.

150) Target costing is a cost-based pricing strategy.

151) The target costing strategy establishes a selling price that consumers are willing to pay for a product, and then subtracts a desired profit margin to determine a target cost of production.

152) In the long run, the cost of production and the length of the firm's supply chain determine the price of a product.

153) Competition-based pricing is a strategy based on what all the other competitors are doing.

154) Price leadership is a demand-based pricing strategy.

155) Price leadership occurs when one or more dominant firms set pricing practices that other firms in the market follow.

156) The purpose of break-even analysis is to determine the lowest price a firm can charge and still be able to cover its costs of production.

157) Break-even analysis determines profitability of a firm at various levels of sales.

158) The break-even point is that level of sales where total revenues equals total costs.

159) Total fixed costs are those costs that change when the volume of production changes.

160) Variable costs are costs that change with the level of production.

161) A skimming price strategy involves a low pricing policy intended to attract price-sensitive customers from competitors.

162) A penetration strategy calls for a firm to charge low prices with the intent of attracting a large number of customers and discouraging competition.

163) Firms utilizing an everyday low pricing (EDLP) strategy establish a policy of special sales on a regular basis.

164) A high-low pricing strategy may condition consumers to avoid paying the regular prices by waiting for sale prices.

165) As more sales move to online retailers, it is likely that firms will adopt a high-low pricing strategy.

166) Psychological pricing utilizes high prices to create the image of a high-quality product.

167) Ultimately, the price of a good is determined by the interaction of supply and demand in the marketplace.

168) The key to demand-oriented pricing is the recognition that not all producers face the same costs of production.

169) Despite the fact that microeconomic theory places a great deal of emphasis on price, marketers often try to find ways to compete on product attributes other than price.

170) For most firms, price competition is the most important way to gain a competitive advantage over rivals.

171) Small firms often rely on nonprice competition when competing against larger firms.

172) One way firms can gain a competitive advantage without relying on low prices is by developing close, friendly relationships with their customers.

173) The pricing objectives of a firm should be set independently of the other elements of their marketing mix.

174) When a company establishes the price it charges for its products by determining the cost of production and then adding on a desired profit margin, it is known as target costing.

175) Rather than having frequent special sales, a company maintains lower prices than competitors all the time. This pricing strategy is known as everyday low prices (EDLP).

176) Regina owns and operates the Regal Car Wash. She charges $12 per car wash. Her fixed costs are $850 per month, while her variable costs per car wash amount to $2. Regal Car Wash must service 60 cars to break even.

177) Haruto, owner and operator of a sushi bar, is working on a break-even analysis. His fixed costs would include rent, insurance, and property taxes.

178) Lauren, owner and operator of Tastee Burgers, is working on a break-even analysis. The cost of pickles, onions, buns, ketchup, and meat would all be considered variable costs for her type of business.

179) Isla is a marketing manager for Marshall Manufacturing. Her boss has asked her to evaluate a new-product idea. One of the things Isla wants to determine is how much of this product her firm would have to sell in order to break even. In order to compute this break-even level of sales, she will need to know the price of the good, the total fixed costs, and variable cost of producing each unit.

180) Newport Industries is one of the first producers of a unique consumer product. The company has chosen a low-price strategy, hoping this will enable them to quickly attract many customers while discouraging potential competitors from entering the market. Newport's approach to pricing is a classic example of the skimming strategy.

181) Admiral Motors is the dominant firm in the auto market. When Admiral announces an increase in the prices of its automobiles, Chord and Frysler, the smaller firms in the market usually quickly announce similar price increases for their own cars. This situation is an example of demand-oriented pricing.

182) Lily's Floral Creations is located in a large town that has several other florists. Lily is likely to find that the presence of many larger competitors means that the only way she can survive is to charge rock-bottom prices.

183) Cutter's Catering Services advertises that they are the "friendliest caterers in town." Though their prices are no lower than the rates of competitors, they put a great deal of emphasis on getting to know the needs of their customers. They tailor their efforts to meet these needs, providing a unique dining experience that exactly matches the customer's expectations. Cutter's Catering is likely to find that this approach is more effective in achieving its goals than the use of aggressive price cutting.

184) When consumers calculate the value of a product, they

A) subtract the cost of production from the market price.

B) eliminate all nontangible elements that might affect their perception of the product.

C) look at the benefits the product provides then subtract the cost.

D) identify the variable and the fixed components of the product's benefits.

185) Whether a consumer thinks a product provides the best value depends upon

A) the actual product benefits.

B) the consumer's perceptions.

C) the global situation.

D) the laws covering the product's manufacture.

186) Restaurants, like other businesses, often find that the best way to succeed in the market is to

A) listen to customers and adapt products to their needs.

B) create a product for which they could charge an exceptionally high price.

C) create a winning combination of advertising and personal selling for all of the stores in the chain.

D) open more stores in a single year than other food-service operators.

187) The combination of all the factors that consumers evaluate when deciding whether or not to buy a good or service is called a

A) total product offer.

B) product mix.

C) product differentiation.

D) product package.

188) When people consider purchasing a good, they

A) are responding to the market forces of supply and demand.

B) are most influenced by the price of the product or service.

C) will not consider goods that require them to make a special effort to purchase.

D) may evaluate and compare a variety of factors.

189) Which of the following refers to a group of products offered by a firm that are physically similar or are intended for a similar market?

A) product matrix

B) product line

C) product mix

D) total product offer

190) The combination of product lines offered by a manufacturer is called the firm's

A) product matrix.

B) product mix.

C) total product offer.

D) product portfolio.

191) The best product development strategy for most firms is to

A) develop a small number of products that achieve market success and stick with them, because constantly changing old products (or introducing new ones) can confuse and frustrate customers.

B) maintain one product line while adding regularly to that product line over time to sustain customer interest.

C) constantly monitor consumer wants and needs and be willing to develop new products and adapt policies and services as those consumer needs begin to change.

D) focus on the actual product or service and don't worry too much about factors such as image, price, and service.

192) When consumers decide to purchase a particular product, they

A) will search for the retailer that offers the lowest price.

B) consider the total collection of benefits that the product offers.

C) base their decision on a brand name nearly all of the time.

D) initially evaluate the product's package.

193) In evaluating colleges, students and parents are likely to judge a school

A) strictly on the basis of major curriculums offered.

B) based on the tuition.

C) by the collection of benefits offered by the school.

D) on the anticipated rate of return on their tuition investment.

194) The Coca-Cola Company produces Diet Coke, Diet Coke with Splenda, and Coke Zero along with a number of other flavors. These products are part of Coca-Cola's

A) product line.

B) product mix.

C) product position.

D) product collection.

195) The Connecting Through Social Media box showed us that while watching the online gaming market, some previously popular games were faltering. This led programmers to

A) focus all marketing efforts on social media.

B) watch comments on social media that led to termination of the games that were no longer popular.

C) partner with other companies with a large social following to co-market.

D) turbocharge the games by inserting a celebrity with a massive social following.

196) Spokes sells high-quality bicycles and accessories. The store is known for a pleasant environment, friendly salespeople, and an excellent service department. All of these elements are part of the ________ offered by Spokes.

A) total product offer

B) product line

C) competitive environment

D) marginal utility package

197) Sweet Tooth Confectioners may use the same ingredients as most other producers of chocolate candies and may not even be much better than other well-known brands of chocolate. However, the company wraps its candies in expensive-looking foil and places them in very attractive boxes. It promotes its products in advertisements as "the ultimate in chocolate experience." Sweet Tooth charges a much higher price than most competitors, but sales continue to grow. This success indicates that

A) consumers always behave in an irrational manner.

B) there is more to the total product offer than the physical product.

C) consumers seldom consider price when making a buying decision for goods such as chocolate.

D) chocolate is best classified as a convenience good.

198) Having just graduated college and about to start a new marketing job, Terry needed transportation. He listed the kinds of things he wanted in a car: the ability to carry some large things; a comfortable back seat for his two dogs; 4-wheel drive for snow and ice; and economical on gas. Marketers know that today's consumers

A) are educated and very savvy and are looking for features and not benefits.

B) are willing to pay just about any price if they find the features they want.

C) look for the best value (benefits outweigh the cost).

D) are always economically sensitive, first.

199) Borden, Inc. makes pasta, dairy items, and adhesives. These different types of products are referred to as Borden's

A) product line.

B) product mix.

C) product differentiation.

D) product life cycle.

200) The Procter & Gamble Company is a major producer of bar soaps. In fact, Procter & Gamble produces Ivory, Camay, Lava, Safeguard, Zest, and Coast bar soaps that all claim a variety of benefits. These products are part of Procter & Gamble's ________ in bar soaps.

A) product mix

B) product concentration

C) product store

D) product line

201) Donavan spent the day talking with a packaging company in Guam, a lighting specialist in Japan, a touchpad expert in the U.S., a prototype design firm in Malaysia, as well as a shipping firm in China. Each of these firms provided expertise in the development of his company's latest product, a back-lighted eReader. The strategy that Donavan's firm used to develop its latest product is

A) singular source product development.

B) distributed product development.

C) multiple source product development.

D) multitasking product development.

202) The purpose of ________ is to create real or perceived product differences.

A) niche marketing

B) product differentiation

C) product mixing

D) target marketing

203) For small businesses, product differentiation

A) is more difficult than it is for larger firms because of the high cost of product research and development.

B) usually concentrates on the pricing component of the total product offer.

C) can be an important strategy to gain market share.

D) is less important than it is for big firms with multiple product lines.

204) Location is very important in the marketing of ________ because consumers desire to purchase these goods with a minimum of shopping effort.

A) unsought goods

B) shopping goods

C) specialty goods

D) convenience goods

205) Which of the following are products consumers buy after comparing quality, price, and style from a variety of sellers?

A) shopping goods

B) specialty goods

C) convenience goods

D) unsought goods

206) ________ goods appeal to consumers who are willing to make an extra shopping effort to acquire them.

A) Specialty

B) Shopping

C) Convenience

D) Consumer

207) ________ goods and services represent those products that consumers are unaware of or haven't thought of buying.

A) Inferior

B) Convenience

C) Shopping

D) Unsought

208) Products that are used in the production of other goods and services are called ________ goods.

A) specialty

B) shopping

C) industrial

D) sponsored

209) ________ consist of major capital equipment such as new factories and heavy machinery.

A) Accessory goods

B) Specialty goods

C) Installations

D) Shopping goods

210) Computers, copiers, and fax machines used by businesses would be classified as

A) installations.

B) shopping goods.

C) specialty goods.

D) accessory equipment.

211) Successful product differentiation

A) of consumer goods is determined exclusively by price.

B) can be based on either real or perceived differences in products.

C) is prohibited if it restricts price competition and market access.

D) is less important due to the growth of the Internet.

212) Which of the following would a firm most likely use to differentiate its product?

A) financial differences

B) increased production

C) elaborate packaging

D) manual warehousing

213) Which of the following products would normally be classified as a shopping good or service?

A) a tablet

B) newspapers

C) fur coats

D) chewing gum

214) Which of the following statements regarding convenience goods and services is accurate?

A) Shoppers will exert lots of effort to obtain the product.

B) Consumers purchase the product on an infrequent basis.

C) Consumers buy only after carefully comparing quality and value.

D) Brand awareness and image are important in marketing these products.

215) Which of the following products would be considered an unsought good or service by a typical college student?

A) college textbook

B) pizza

C) car towing

D) cable television

216) Which of the following products would most likely be classified as a specialty good or service?

A) a microwave oven

B) a limited-edition print signed by the artist

C) a sports coat, slacks, and tie

D) a car insurance policy

217) "It tastes better than candy!" is an advertising slogan for a new probiotic gummy. The manufacturer claims that their probiotics is of a higher quality and tastes better than any competing brand. These claims are part of the firm's strategy to achieve

A) deceptive marketing recognition.

B) the creation of knockoff products.

C) new-product development.

D) product differentiation.

218) Rosalita's and Antonio's are Mexican restaurant chains. Each restaurant offers similar items on their menus. However, Antonio's restaurants are positioned in the market as elegant establishments with high prices. Rosalita's, on the other hand, are located in middle-class neighborhoods, with a casual atmosphere that welcomes families with young children. The prices at Rosalita's are in the moderate range. When evaluating the marketing strategies used by these restaurants, we can conclude that

A) both practice product mix effectiveness.

B) they utilize product differentiation.

C) Fernando's has chosen a shopping good strategy.

D) their target markets differ, with one intended to appeal to the industrial market, and the other designed to attract the consumer market.

219) Winter Cool Mints is a new brand of breath fresheners. The company knows product location is very important since consumers desire to buy this type product with a minimum of effort. Winter Cool Mints represent a

A) shopping good.

B) specialty good.

C) convenience good.

D) industrial good.

220) Suitorium is a men's clothing store in a large suburban shopping mall. The managers of the store know that their customers usually comparison shop, looking carefully at quality and price before deciding to buy. With this information, Suitorium carries quality clothing, offers competitive pricing, and friendly, helpful service. The target customers apparently view men's suits as a

A) specialty good.

B) convenience good.

C) shopping good.

D) unsought good.

221) Eliza, a collector of fine art, particularly loves paintings. She has been looking for an original Jackson Pollack painting for months and has said that she is willing to go to extraordinary efforts to acquire this painting for her collection. Clearly this painting represents a ________ good for Eliza.

A) shopping

B) specialty

C) unsought

D) luxury

222) A self-portrait of a celebrated photographer sold at a Christie's auction for about $4 million dollars. According to Christie's, this was the highest price ever received for a photograph in the history of the auction business. As a student of marketing, you would classify this photo and other rare items sold through Christie's as

A) unsought for goods.

B) specialty goods.

C) intangible goods.

D) shopping goods.

223) Andrea lives in southern Mississippi where winters are normally fairly mild. Last January, during an unusually cold spell, the water pipes in her house froze and burst. She looked online to find a plumber who was able to come out and repair the pipes the same day. Prior to the frozen pipes, the plumber's services represented a(n)

A) unsought service.

B) industrial service.

C) specialty service.

D) convenience service.

224) Marshall Manufacturing acquired several pieces of expensive heavy machinery it intends to use in its operations. As an industrial good, this heavy machinery represents

A) an installation.

B) accessory equipment.

C) an intermediate good.

D) a shopping good.

225) ________ is an important part of the total product offer for a product.

A) Consumer income

B) Management style

C) Employee personality

D) Packaging

226) Today, packaging is:

A) the least important component of the marketing mix.

B) assuming an increasingly important role in the promotion of products.

C) exclusively intended to protect the product from damage.

D) the most expensive component of the production process.

227) In marketing today, packaging carries the added responsibility of:

A) promotion and sales.

B) minimizing product liability.

C) gaining access to international markets.

D) keeping product costs down.

228) The ________ on packages were intended to improve inventory control for businesses.

A) stars and stripes

B) UPCs

C) lightweight adhesives

D) Unit Standard Inventory bars

229) The trend away from personal salespeople to self-service in many retail outlets has caused firms to

A) reduce their advertising promotional budgets.

B) rely more on personal sales efforts.

C) place a greater promotional importance on packaging.

D) decrease expenditures on social media and websites.

230) The evaluation of packaging as a marketing function indicates that

A) the package is less important as the Internet provides consumers with easily obtained information.

B) packaging carries more of the promotional burden of the product.

C) consumers are influenced less by packaging.

D) the primary purpose of packaging is to limit the product liability of businesses.

231) Which of the following statements about packaging is the most accurate?

A) Changes in packaging can improve the product itself and open up large new markets.

B) Packaging is the least critical element of a firm's promotional strategy.

C) Technology has had a very limited role in improving packaging.

D) Packaging has avoided federal regulations.

232) Which of the following statements is the most accurate assessment of the role packaging plays in product offerings?

A) The importance of packaging has diminished as the online retailing has grown.

B) While packaging plays an important role in marketing goods, it is not relevant to the marketing of services.

C) Effective packaging eliminates the potential of product liability suits.

D) The importance of packaging is greater now than ever.

233) Attracting attention, describing contents, explaining benefits, and identifying the uses of a product are all functions of

A) target marketing.

B) UPCs.

C) packaging.

D) market segmentation.

234) According to the Making Ethical Decisions box, there is more and more confusion growing around what makes a product "natural." What is the Food and Drug Administration (FDA) considering doing to alleviate the confusion?

A) banning companies from using "natural"

B) allowing all companies to claim products are "natural"

C) creating a definition for "natural"

D) limiting the use of "natural" to only cleaning products

235) Microchippers Computer Company thinks it will make a splash with galaxy-themed laptop cover designs scheduled for release next year. The computers do not reveal any other feature differences from what Microchippers currently offers. This effort is an example of using ________ to differentiate a product as new.

A) packaging

B) incremental coloring

C) incremental channeling

D) brand extension

236) Textbook publishers use a packaging strategy known as ________. Often the publisher will combine highly complementary products such as a new textbook and access code for online software that students can use to test themselves on new concepts and principles.

A) proformatting

B) bartering

C) bundling

D) trademarketing

237) A ________ is a name, symbol, or design (or combination of these) that identifies the goods or services of one seller or group of sellers and distinguishes them from those of competitors.

A) trademark

B) brand

C) logo

D) copyright

238) A brand that has been given exclusive legal protection, such as the McDonald's golden arches, is a

A) private brand.

B) promotional mark.

C) dealer brand.

D) trademark.

239) From the buyer's perspective, which of the following is a benefit of a product with a well-known brand name?

A) quality assurance

B) helps in promotional efforts

C) adds to repeat purchases

D) differentiates products so that prices can be set higher

240) Which of the following is a benefit of a brand name for a seller?

A) quality assurance

B) reduction in search time

C) increased repeat purchases

D) additional prestige

241) When a brand becomes commonplace and identified with a category of goods rather than the unique product of a specific manufacturer, the brand may become a

A) generic name.

B) trademark.

C) universal product code.

D) product liability issue.

242) Nonbranded products that sell below the price of national brands, have very basic packaging, and are backed with little or no advertising are called

A) universal goods.

B) distributor brands.

C) house brands.

D) generic goods.

243) Knockoff brands are ________ copies of national brand-name goods.

A) exact

B) online

C) illegal

D) licensed

244) Brand ________ refers to the loyalty, perceived quality, and emotions people associate with a given brand name.

A) equity

B) identification

C) positioning

D) ownership

245) The degree to which customers are satisfied and are committed to future purchases of a desired brand is called

A) brand awareness.

B) brand relations.

C) brand loyalty.

D) brand intensity.

246) The apple is Apple Computer's

A) generic name.

B) label.

C) trademark.

D) brand.

247) The brand names that are used by producers that distribute products nationally are called

A) manufacturers' brands.

B) product category brands.

C) generic brand names.

D) universal brand names.

248) Which of the following refers to how quickly or easily a given brand name comes to mind when a product category is mentioned?

A) brand equity

B) brand loyalty

C) brand awareness

D) brand insistence

249) When consumers reach the point of brand ________, the product becomes a specialty good.

A) association

B) desire

C) awareness

D) insistence

250) Products that carry the name of a distributor or a retailer instead of the manufacturer's name are called

A) dealer (private) brands.

B) knockoff brands.

C) generic brands.

D) equity brands.

251) Brand ________ refers to the linking of a brand to other favorable images, such as a celebrity.

A) association

B) loyalty

C) awareness

D) insistence

252) A ________ has direct responsibility for all the elements of the marketing mix for one brand or product line.

A) channel specialist

B) brand manager

C) product engineer

D) brand specialist

253) One reason many large consumer-product companies make use of ________ is to have greater control over new-product development and product promotion.

A) brand equity teams

B) equity specialists

C) product consultants

D) brand management teams

254) Many supermarkets carry plain packages that only identify the name of the product that is inside. For example, a label may read simply "peaches" or "green beans." These goods represent

A) private labels.

B) manufacturers' brands.

C) generic goods.

D) universal code branding.

255) Certain brand names, such as Kleenex and Rollerblade, fear they could become ________, because they are so commonly identified with a specific product category that consumers use these names to refer to any product in that category regardless of the manufacturer.

A) family brands

B) generic names

C) universal products

D) knockoff names

256) Some businesses use nostalgic ads to rekindle the memories and emotions of consumers to an earlier time and place. This technique of linking a brand name to a pleasant memory or favorable image is the goal of brand

A) association.

B) tie-ins.

C) insistence.

D) preference.

257) One of the reasons why companies create the position of brand manager is to

A) have greater control over new-product development and promotion.

B) cut expenses associated with the marketing of products.

C) limit the amount of market research expenses products require.

D) identify and prosecute firms that violate trademark protection.

258) Fashion experts readily understand the power of ________. Shortly after Kate Middleton married Prince William, throngs of soon-to-be-brides scrambled to find copies of her bridal gown, and also that of her sister Pippa's bridesmaid gown.

A) brand equity

B) brand association

C) brand awareness

D) marketing parity

259) The job performed by brand managers

A) is mainly concerned with the promotion of the entire product mix of their firm.

B) involves broad responsibilities for the marketing of a specific brand or product line.

C) is likely to become less important in firms that utilize the Internet.

D) focuses more on the pricing and promotion of established goods than on the development of new products.

260) The New Era Cap Company understands the importance of ________. In the mid-1990s, the company's products became very popular when film director Spike Lee requested a red Yankees cap, instead of the traditional blue cap. It did not take long for Yankees' fans who were also fans of Spike Lee to want to wear a similar cap.

A) brand equity

B) viral marketing

C) brand association

D) marketing parity

261) The box, Playing the Name Game explains

A) the importance of reality TV, and the various TV programs that have become international phenomena.

B) the procedure a business goes through to register its domain name.

C) how the positive appeal of a name can go a long way.

D) how it is important for businesses to play a name game with their customers. A company should produce a product and give it a different name in each country where it is sold.

262) Folgers's ________ allows customers to easily identify this product from other coffee products.

A) patent

B) trade symbol

C) brand name

D) brand equity

263) The Pillsbury Doughboy is an example of a

A) patent.

B) trademark.

C) private brand.

D) generic label.

264) Eric is approached by a street vendor selling Rolex watches at ridiculously low prices. Eric, however, was suspicious that the watches were illegal ________ brands.

A) knockoff

B) private

C) generic

D) look alike

265) Sears sells batteries under its own Diehard brand name even though another company actually produces these batteries. This is an example of a

A) knockoff brand.

B) generic brand.

C) dealer (private) brand.

D) brand association.

266) Anheuser-Busch/InBev Company, Inc., has been given the exclusive right to the name Budweiser and is legally protected from others using this name by the ________ they hold.

A) licensing agreement

B) brand name

C) copyright

D) trademark

267) Green Giant Green Beans, Chevrolet Corvette, Coca-Cola, Dole Pineapple, and Peter Pan Peanut Butter are all examples of

A) private brands.

B) wholesaler brands.

C) manufacturers' brands.

D) registered generic brands.

268) Associated Supermarkets operates a large chain of stores across several midwestern states. While Associated doesn't actually produce any canned foods, it markets a line of foods under its own brand name that were actually produced by another company. Associated canned foods represent a

A) manufacturers' brand.

B) generic brand.

C) knockoff brand.

D) dealer (private) brand.

269) An advertisement for the Xerox Corporation encourages customers to say, "Copy it" rather than "Xerox it." This indicates that Xerox is fearful that its brand name might become a(n)

A) equity name.

B) generic name.

C) private brand.

D) public domain good.

270) NoSneeze markets a group of similar products for people suffering from the common cold. The products differ mainly in the strength of the dosage and in whether they also contain additional medications to help the consumer sleep while sick. Sarah, a marketing manager at NoSneeze, is responsible for marketing the company's products and is involved in major decisions concerning the development of new products that will be included in this product line. Sarah serves as a

A) brand manager.

B) market mix specialist.

C) target market manager.

D) product line specialist.

271) As a manager at IceCold Foods, Oscar is responsible for the firm's S'Cream brand of ice cream. He recently approved a proposal to test market new ice cream flavors. He is also considering the possibility of lowering the price of the ice cream and initiating a new advertising campaign. Oscar serves as a

A) product development manager.

B) target market manager.

C) brand manager.

D) commercialization manager.

272) A leading cause of new-product failure is

A) insufficient competition.

B) product promises that are not delivered.

C) the automation of the product development process.

D) excessive product differentiation.

273) Which of the following is considered a stage of the new-product development process?

A) automation

B) media screening

C) commercialization

D) selective perception

274) ________ presents an idea for a new product to potential customers to test their reactions.

A) Idea generation

B) Concept testing

C) Screening

D) Prototype development

275) ________ is the stage of new-product development that involves promoting a product to distributors, and developing advertising and sales campaigns in order to generate and maintain consumer interest.

A) Commercialization

B) Brand identification

C) Product differentiation

D) Merchandising

276) The greatest source of ideas for new products is

A) consumer suggestions.

B) suggestions from competitors.

C) employee ideas.

D) research and development.

277) Product screening is designed to

A) shorten the product life cycle.

B) reduce the number of new-product ideas being worked on at any one time.

C) reduce the time involved in new-product development.

D) move production to low-wage countries.

278) Which of the following is a relevant criterion for the product screening process?

A) sales forecasts for the product

B) production capacity of competitors

C) profit potential

D) the stage of the product life cycle

279) The Sweet Temptations Yogurt Company just completed the first stages of product development of its new low-calorie frozen yogurt breakfast bars and immediately took its product directly to consumers. Marketers partnered with a large theme park in Orlando, FL, to perform ________. The Sweet Temptations marketing department wanted to know if consumers found this product to be a quick way to eat breakfast on the road. Subsequently, they also wanted to determine what customers would be willing to pay for the breakfast bar.

A) commercialization

B) concept testing

C) prototyping

D) product screening

280) Kimberly, a brand manager, has proposed an aggressive advertising campaign that exaggerates the benefits of her company's newest product. While she is convinced that this strategy will encourage consumers to try the product, her assistant strongly opposes the idea. Which of the following presents the best explanation for the assistant's opposition to Kimberly's proposal?

A) If a firm produces a quality product, the best advertising is word-of-mouth to generate excitement for a new product.

B) The best way to promote new consumer products is with personal selling.

C) Exaggerating the benefits of a product may backfire and injure the product's potential for success.

D) Effective advertising for new consumer products should be subtle and low key. Ellen's proposal is more appropriate for the B2B market.

281) Nicola works as a manager at Marshall Manufacturing. The innovative staff at the company is regularly encouraged to suggest ideas for new products. Since Nicola works in product screening, she

A) gives the final approval for the commercialization of new products.

B) reduces the number of new products being worked on at any one time.

C) market tests the product ideas that originate with the staff.

D) develops the concept testing to establish the personnel required for each new project.

282) The ________ is a theoretical model that describes the sales and profit performance of a product class over time.

A) product life cycle

B) marketing template

C) market stages model

D) commercialization time line

283) The product life cycle consists of ________ stages.

A) 3

B) 4

C) 5

D) 6

284) The stages of the product life cycle are

A) production, inventory, exchange, usage, and disposal.

B) conception, testing, production, commercialization, and obsolescence.

C) introduction, growth, maturity, and decline.

D) opportunity recognition, concept testing, production, market acceptance, brand insistence, and obsolescence.

285) The four-stage theoretical model that describes the evolution of a product from birth to death is referred to as the

A) growth-share matrix.

B) developmental life span analysis.

C) product life cycle.

D) product market progression index.

286) According to the product life cycle model, sales are expected to peak in the ________ stage.

A) introduction

B) maturity

C) growth

D) commercialization

287) According to the product life cycle model, profits tend to

A) remain relatively constant until the decline stage, when they begin to drop.

B) reach a peak near the end of the maturity stage.

C) rise rapidly during the market preference stage.

D) peak before sales reach their highest level.

288) The product life cycle model helps marketers realize that

A) consumers are always ready to try a new product if it is priced correctly.

B) different stages in the life cycle call for different marketing strategies.

C) sales and profit levels can be forecasted accurately.

D) careful product screening will increase profits over the life of a product.

289) Which of the following is a stage in the product life cycle?

A) commercialization

B) decline

C) peak

D) acceptance

290) As a product progresses through each stage of the product life cycle, successful marketers recognize that each stage requires

A) a different marketing strategy.

B) a consistent application of fundamental marketing practices.

C) an increase in the amount spent on advertising.

D) more emphasis on personal selling.

291) When reviewing the product life cycle model, it is important to remember that

A) although all products go through each stage of the life cycle, the time frame can vary considerably from one product to another.

B) it is a theoretical model that may not be followed by all products.

C) the maturity stage accounts for the fastest growth in sales.

D) companies earn their largest profits in the introduction stage.

292) Once a good or service nears the end of its product life cycle, the firm recognizes that

A) it is impossible to revert to an earlier stage of the model.

B) it can return to an earlier stage through creative marketing.

C) it will enjoy relatively high profits.

D) marketing dollars spent now will provide little benefit.

293) Which stage of the product life cycle does rapidly rising sales, very high profit levels, and a growing number of competitors characterize?

A) growth

B) maturity

C) saturation

D) decline

294) Which of the following is expected during the maturity stage of a product life cycle?

A) a rapid increase in profits

B) a rapid increase in the number of competitors

C) peak sales

D) reduced emphasis on promoting the product's brand name

295) Which of the following is consistent with the introduction stage of the product life cycle?

A) decreasing sales volume

B) large number of competitors

C) low profit levels or a potential loss

D) minimum use of advertising

296) During the ________ stage of the product life cycle sales reach a peak, profits are declining, and the number of competitors starts to decrease.

A) growth

B) maturity

C) saturation

D) decline

297) Which of the following is consistent with the growth stage of the product life cycle?

A) a peak in the sales curve

B) high profit levels

C) a stable number of competitors

D) declining profits

298) Which of the following is a characteristic of the decline stage of the product life cycle?

A) falling sales

B) price reductions

C) many new firms entering the market

D) increasing profits

299) Department store owner Brendan McGowan decided to make a gutsy move with his high-end Western Son stores. Rather than focus on the upscale, luxury market that the store attracted earlier in the decade, he focused on bringing in clothing with more mass appeal. The stores succeeded in turning around downward trending sales. In conjunction with your understanding of the product life cycle, which of the following statements summarizes the marketing strategy?

A) Western Son recognized that it was not competing well with its traditional higher income market. It decided to change its product offering and price to appeal to a broader market and increase sales and profits.

B) Western Son stores recognized several markets that it could reach with its upscale clothing lines.

C) Western Son positioned itself against, rather than with, the competition. It decided to adhere to its price leadership position.

D) Western Son knew that in order to re-invent itself, it was going to have to practice the same marketing strategy followed by Walmart and other discount stores. It would make all marketing decisions based on cost. The price on an item need only exceed what it cost to make and ship it. Falling prices became the norm.

300) Currently, which of the following products would most likely be considered in the growth stage of the product life cycle?

A) DVD players

B) Welch's grape jelly

C) VR games

D) Camel cigarettes

301) Sales levels of Spokes mountain bikes are rising rapidly, profits are very high, and a growing number of competitors are taking aim at Spokes' market lead. Based on this information, Spokes mountain bikes are in which stage of the product life cycle?

A) introduction

B) growth

C) maturity

D) decline

302) Epic Electronics' promotional efforts are intended to increase the public's awareness of its new product's benefits and uses. This effort is consistent with the ________ stage of the product life cycle model.

A) introduction

B) growth

C) maturity

D) decline

303) Which of the following is a popular pricing objective?

A) increasing sales

B) increasing brand awareness

C) fixing prices among competitors

D) achieving less market share

304) Pricing is

A) one of the 4 Ps of the marketing mix.

B) considered to be a part of promotion.

C) normally a government-regulated variable.

D) totally based on the cost of products.

305) Producers often use ________ as a primary basis for setting prices on the goods and services they offer the public.

A) tariffs

B) costs

C) market share

D) quotas

306) ________ involves designing a product so that it satisfies customers and meets the profit margins desired by the firm.

A) Price discrimination

B) Price leadership

C) Target costing

D) Cost-based pricing

307) A competition-based pricing strategy called ________ involves one or more dominant firms establishing the pricing practices that all competitors in an industry follow.

A) skimming

B) penetration

C) target costing

D) price leadership

308) ________ is the process used to determine the profitability of a product at various levels of sales.

A) Cost-based pricing

B) Break-even analysis

C) Demand-based pricing

D) Competition-based pricing

309) Costs incurred regardless of the number of units of a product that are produced or sold are called

A) mixed costs.

B) controllable costs.

C) fixed costs.

D) variable costs.

310) _______ costs are those costs that increase as the level of production increases.

A) Fixed

B) Mixed

C) Variable

D) Uncontrollable

311) The number of units of a product that must be sold for total revenue to equal total costs is called the

A) equilibrium volume.

B) balanced quantity.

C) contribution margin.

D) break-even point.

312) At the break-even point

A) profits are maximized.

B) variable costs are equal to total fixed costs.

C) target profit is achieved.

D) total revenue is equal to total cost.

313) Which of the following represents a pricing strategy that establishes a low price in hopes of attracting a great number of customers and discouraging competitors?

A) penetration strategy

B) odd-even pricing strategy

C) skimming strategy

D) price lining strategy

314) ________ uses price points to establish prices that help create the impression that the product is less expensive than it is.

A) High-low pricing

B) Everyday low pricing (EDLP)

C) Bundling

D) Psychological pricing

315) A skimming pricing strategy

A) allows low-income households the ability to purchase a particular good or service.

B) drives competitors out of business in order to achieve a monopoly position in the market.

C) creates a "common man" image to reach a larger market.

D) establishes a high price in order to earn the highest possible profit while there is little competition.

316) The ________ pricing strategy maintains low prices and avoids the use of special sales.

A) everyday low pricing (EDLP)

B) cost-based

C) target-based

D) skimming

317) Department stores often use ________ pricing in which they have regular prices which are relatively high, but offer special sales where prices are set lower than competitors.

A) penetration

B) bundling

C) strategic

D) high-low

318) Charging high prices to earn large profits during a time when there is little competition represents a ________ strategy.

A) penetration

B) bundling

C) skimming

D) cost-based

319) A competition-based pricing strategy in which all the competitors in an industry follow the pricing practices of one or more dominant firms is known as

A) market fixing.

B) price penetration.

C) price leadership.

D) primary pricing.

320) Which of the following strategies establishes a price based on the actions of rival firms?

A) competition-based pricing

B) cost-based pricing

C) demand collection system

D) bundling

321) The strategy of charging prices based on consumer demand rather than cost or a predetermined profit margin represents

A) competition-based pricing.

B) cost-based pricing.

C) target orientation.

D) demand-oriented pricing.

322) Firms utilize ________ when they attempt to add value to their product by offering service after the sale, product demonstrations, or interactive customer websites.

A) nonprice competition

B) relationship branding

C) niche marketing

D) break-even segmentation

323) One way a small firm can succeed against larger competitors is to

A) determine their break-even point price.

B) add value to their product offering.

C) eliminate the fringe benefits offered to frequent customers.

D) use break-even segmentation.

324) One of the reasons marketers emphasize nonprice differences in their competitive strategies is because

A) consumers aren't concerned about prices.

B) these methods have no impact on the cost of production.

C) nonprice differences are tax deductible.

D) relatively similar products can be enhanced.

325) As firms develop their marketing mix, it is important to remember that

A) prices must be linked directly to the cost of production.

B) instincts and past history are the best guides in determining price.

C) regardless of the strategy used, prices ultimately reflect the forces of supply and demand.

D) firms are often restricted in creating pricing strategies by relevant government rules and guidelines.

326) The cost of raw materials used to produce a good or service represent the firm's ________ costs.

A) fixed

B) variable

C) mixed

D) uncontrollable

327) The strategy of first determining what the market is willing to pay, then subtracting a desired profit margin to determine a desired cost of production is called

A) cost-based pricing.

B) target costing.

C) penetration pricing.

D) skimming pricing.

328) The formula for break-even analysis includes which of the following components?

A) depreciation

B) forecasted sales

C) forecasted cash requirements

D) variable cost per unit of output

329) The rent a firm pays each month for office space is an example of a(n)

A) fixed cost.

B) variable cost.

C) mixed cost.

D) uncontrollable cost.

330) Which of the following is a potential problem with a high-low pricing strategy?

A) It confuses and frustrates customers.

B) It places too much emphasis on nonprice competition.

C) It teaches customers to wait for sales, and therefore reduces profits.

D) It is difficult to implement.

331) Shopping online allows customers to compare prices of many goods and services. This technology will likely

A) cause businesses to increase their focus on nonprice aspects of their promotional message.

B) bring about more emphasis on demand-oriented pricing.

C) diminish in importance as quickly as other fads.

D) focus government attention on the collusive pricing practices of firms in specific industries.

332) Many products are promoted by emphasizing their key benefits, rather than setting the price lower than that of competitive goods. This emphasis on the product's benefits illustrates a(n) ________ strategy.

A) penetration

B) nonprice competition

C) industry leader

D) bundled package

333) Which of the following statements about nonprice competition is most accurate?

A) While still important, nonprice competition is becoming less critical as a result of the Internet.

B) Marketers often rely on nonprice differences in their competitive strategy to enhance a relatively homogeneous product.

C) Nonprice competition is much more important to large firms than it is to small firms.

D) As microeconomic theory suggests, firms have found that nonprice competition plays a secondary role that supplements the more important competition based on price.

334) Big Dog Building is the one of the largest cement companies in the Midwest. When the firm raised its prices by 11 percent, all of its competitors soon announced they too were raising their prices by 11 percent. It appears this industry is influenced by a ________ strategy.

A) price skimming

B) price leadership

C) market pricing

D) price discrimination

335) PharmaSave Pharmacy will advertise a price of an over-the-counter drug at or below their cost. The intended goal of this loss leader strategy is to

A) achieve a target profit.

B) reduce the break-even quantity.

C) build traffic and increase the customer base.

D) create an upscale image.

336) Brody asks you to calculate the break-even point for his firm. You respond that you will need the following information

A) the values for all assets and liabilities.

B) total fixed costs, selling price per unit, and variable costs per unit.

C) forecasted sales volume, operating expenses, and asset values.

D) sales revenue and total liabilities.

337) Epic Electronics is considering a strategy to charge a very high introductory price for their automobile video theater. After identifying that their rival firms did not carry this new product, they chose this pricing strategy to achieve maximum profits. Epic Electronics has chosen a ________ strategy.

A) high-low pricing

B) penetration

C) bundling

D) skimming

338) Barker Brothers Pens utilizes a strategy of low-priced pens to attract customers and discourage competition. This represents a ________ strategy.

A) high-low

B) bundling

C) skimming

D) penetration

339) Diego's company was bidding on the construction of a new penguin display at a zoo. When putting together his bid, Diego began by determining what the zoo would be willing to pay for the structure, and then subtracting a reasonable profit for the company. The result would be the cost of production. For example: If price to zoo = $8 million, and company profit margin = $3 million, the cost to produce cannot exceed $5 million. [$8 million – $3 million = $5 million.] The demand-based pricing strategy in this example is called

A) target costing.

B) penetration pricing.

C) cost-based pricing.

D) volume pricing.

340) Jameson noticed that the vending machine soda bottles had changed shape. Upon further investigation, he saw that each bottle contained 2 ounces less than the previous bottles. But the price remained the same! The pricing objective of the beverage company is to

A) increase profits by reducing the amount provided in each bottle.

B) build traffic at the vending machines by changing the shape of the bottle.

C) undercut the competition by changing the shape of the bottle.

D) increase market share by reducing the amount provided in each bottle.

341) What does a break-even point of 100 units mean to a firm?

A) The firm must sell 100 units to maximize its profits.

B) Fixed costs plus variable costs equals 100 units.

C) By producing 100 units, the firm can ensure that variable costs completely cancel its fixed costs.

D) If the firm sells 100 units, its total revenues will equal its total costs.

342) Bennett has entered into a contract with the federal government to design a computer simulation model for training helicopter pilots. The contract calls for the final price to be set at a fixed percentage profit over and above her cost of production. This seems to represent a

A) cost-based pricing strategy.

B) supply and demand formula.

C) demand-based pricing strategy.

D) price leadership pricing strategy.

343) Cheryl is considering adding a rack of greeting cards to her product offerings at The Bitty Bookstore. Her fixed costs associated with adding the greeting cards would be $400. Variable costs per card are $1 each. The greeting cards will sell for $3 each. Helen's break-even point would occur at ________ cards sold.

A) 150

B) 200

C) 300

D) 450

344) Kayla wants to know how many units she must sell to cover all of her costs. She indicates to you that her selling price is $25 per unit, her fixed costs are $7,000, and the variable costs per unit are $15. What is her break-even point?

A) 400 units

B) 500 units

C) 700 units

D) 1,150 units

345) Ariel owns a company that markets high-quality office supplies to businesses. She faces stiff competition from larger firms like Staples. Which of the following competitive strategies would probably work best for Ariel?

A) Keep costs as low as possible by offering a no-frills approach with little or no extra services.

B) Develop a skimming pricing strategy.

C) Utilize a high-low approach to pricing with a higher break-even point.

D) Focus on nonprice competition by offering better service with customers and work on building good customer relationships.

346) As a graphic artist, Randy has just finished a new calendar. The calendar cost him $1.00 for the glossy paper, $3.00 for the six color production, and $.50 for the plastic wire that holds it together at the top. The labor in developing the design was 4 hours of work at $50/hour, and labor is being added to the rest of the fixed costs of $500.00. At a price of $15.00 per calendar, how many calendars will Nate need to produce and sell in order to break even (cover all his costs, but not make a profit)?

A) 670 calendars

B) 34 calendars

C) 46 calendars

D) 67 calendars

347) Operating in the southwestern states, PuddleJumper Airlines hopes to avoid entering the price war that currently is taking place between several airlines on the east coast. The best strategy to avoid severe price competition is to

A) provide frequent travelers the added value of special fringe benefits.

B) cut costs and services in order to maintain profit margins.

C) reduce flights and in-flight services, and lay off employees.

D) determine the break-even price and charge slightly more than that.

348) From a marketing management perspective, what is the meaning of a total product offer? What are the important elements in the total product offer of your college or university?

349) Consumer goods and services are generally classified into four specific categories. What are the four categories, and how do they differ? Illustrate by giving examples of products that are often included in each category.

350) Discuss the role of packaging in a firm's total product offer.

351) What is a brand? What is a brand name? What is meant by brand equity?

Mini-Case

Gourmet Pets is an innovative competitor in the billion-dollar pet food industry. In fact, two of its products, Kitty Sirloin and McDog T-bone, each claim over a 30% share in their market segments. The company has done detailed research and discovered that, for a growing number of pet owners, the family pet serves as a baby substitute. These owners tend to pamper their pets, and are very discriminating in what they purchase. With this in mind, the company has put a great deal of effort into developing a new dog food: Prime Cuts. The new product is packaged in a resealable, microwaveable container and can be purchased in a variety of flavors (including Western BBQ, Teriyaki, Australian Outback, and Hickory Smoked). Gourmet Pets promotes the product as far superior to "average" dog foods, even though the quality of meat and nutrient content of the food are virtually identical to many other brands. The company faces no competition in this market segment so it plans to charge a high price for the product.

352) The company currently markets McDog T-bone, Lapdog Lunchtreats, Rover's Potroast, and Puppy Porterhouse in the dog food market. Prime Cuts will be an addition to the company's ________ in the dog food market.

A) product mix

B) product line

C) product time

D) product screen

353) Gourmet Pets hopes to use its special packaging and extensive advertising to create a perception in the minds of consumers that Prime Cuts is a superior product, even though the actual quality of meat used in the product is virtually no different from competing brands. The company is attempting to develop

A) differential segmentation.

B) cognitive dissonance.

C) product differentiation.

D) pioneer marketing.

354) Prime Cuts was the brainchild of Karen Terrier who guided all the marketing efforts of the product. She selected each element of the marketing mix such as the package, brand name, pricing, promotion, and placement decisions. Karen obviously serves in the job of

A) marketing consultant.

B) brand manager.

C) operations analyst.

D) marketing intermediary.

355) Gourmet Pets is interested in computing the break-even point for its new product Prime Cuts. The fixed costs of adding this product to the product line amounts to $20,000. Variable costs to produce one package of Prime Cuts are $2. Prime Cuts will sell for $6 per package. The break-even point would be

A) 900 units.

B) 2,800 units.

C) 5,000 units.

D) There is not enough information to find the correct answer.

356) Gourmet Pets feels its target market is more concerned with perceived quality than actual product cost. They also feel that the newness of this concept offers an opportunity to make high profits since they are the first firm to enter this market, so they face no direct competition. Their decision to charge a high price is consistent with the ________ strategy.

A) market pricing

B) price leadership

C) skimming price

D) penetration price