Exam 14: Developing and Pricing Goods and Services

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

A brand includes practically all means of identifying a product.

Business sponsorship of events, such as the Winston-Salem stock car races or NASCAR's Nextel Cup Series, is intended to increase:

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

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

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

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

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

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

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

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

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

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

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

A traditional McDonald's and a McCafe (the outlet that sells premium coffee and pastries similar to a Starbucks) are examples of the McDonald's Corporation product mix.

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 Tbone, 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 is 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. -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 firm's product line refers to all of the different geographic markets in which it sells the same good or service.

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

Successful businesses constantly monitor consumer wants and needs.

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.