Question 1

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

Accepted Answer

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. 
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. C

Question 2

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

Accepted Answer

A) True 
 B)False  False

Question 3

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?

Accepted Answer

A)  400 units 
B)  500 units 
C)  700 units 
D)  1,150 units 
A)  400 units 
B)  500 units 
C)  700 units 
D)  1,150 units C

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A)  depreciation 
B)  forecasted sales 
C)  forecasted cash requirements 
D)  variable cost per unit of output 
A)  depreciation 
B)  forecasted sales 
C)  forecasted cash requirements 
D)  variable cost per unit of output

Question 6

The Pillsbury Doughboy is an example of a

Accepted Answer

A)  patent. 
B)  trademark. 
C)  private brand. 
D)  generic label. 
A)  patent. 
B)  trademark. 
C)  private brand. 
D)  generic label.

Question 7

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.

Accepted Answer

A) True 
 B)False

Question 8

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.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A)  penetration 
B)  bundling 
C)  skimming 
D)  cost-based 
A)  penetration 
B)  bundling 
C)  skimming 
D)  cost-based

Question 10

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

Accepted Answer

A)  fixed cost. 
B)  variable cost. 
C)  mixed cost. 
D)  uncontrollable cost. 
A)  fixed cost. 
B)  variable cost. 
C)  mixed cost. 
D)  uncontrollable cost.

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

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.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A)  brand equity 
B)  brand loyalty 
C)  brand awareness 
D)  brand insistence 
A)  brand equity 
B)  brand loyalty 
C)  brand awareness 
D)  brand insistence

Question 18

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

Accepted Answer

A)  falling sales 
B)  price reductions 
C)  many new firms entering the market 
D)  increasing profits 
A)  falling sales 
B)  price reductions 
C)  many new firms entering the market 
D)  increasing profits

Question 19

For small businesses, product differentiation

Accepted Answer

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. 
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.

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 14: Developing and Pricing Goods and Services

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

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

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

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

The Pillsbury Doughboy is an example of a

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

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

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

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

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

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

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

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.

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

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

For small businesses, product differentiation

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

Taking Risks and Making Profits Within the Dynamic Business Environment

Understanding Economics and How It Affects Business

Doing Business in Global Markets

Demanding Ethical and Socially Responsible Behavior

How to Form a Business

Entrepreneurship and Starting a Small Business

Management and Leadership

Structuring Organizations for Todays Challenges

Production and Operations Management

Motivating Employees

Human Resource Management: Finding and Keeping the Best Employees

Dealing With Employeemanagement Issues

Marketing: Helping Buyers Buy

Distributing Products

Using Effective Promotions

Understanding Accounting and Financial Information

Financial Management

Using Securities Markets for Financing and Investing Opportunities

Money, Financial Institutions, and the Federal Reserve

Appendix: Working Within the Legal Environment

Appendix: Using Technology to Manage Information

Appendix: Managing Risk

Appendix: Managing Personal Finances

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