Exam 14: Developing and Pricing Goods and Services

The box, Playing the Name Game explains

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

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

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.

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

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

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

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

For small businesses, product differentiation

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

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

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

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

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

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

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.

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

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

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