Question 1

When consumers calculate the value of a product, they

Accepted Answer

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. 
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.

Question 2

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

Accepted Answer

A brand is a name, symbol, or design (or

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

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.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A)  tariffs 
B)  costs 
C)  market share 
D)  quotas 
A)  tariffs 
B)  costs 
C)  market share 
D)  quotas

Question 7

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.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

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. 
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.

Question 10

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

Accepted Answer

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. 
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.

Question 11

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

Accepted Answer

A)  market fixing. 
B)  price penetration. 
C)  price leadership. 
D)  primary pricing. 
A)  market fixing. 
B)  price penetration. 
C)  price leadership. 
D)  primary pricing.

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

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.

Accepted Answer

A)  licensing agreement 
B)  brand name 
C)  copyright 
D)  trademark 
A)  licensing agreement 
B)  brand name 
C)  copyright 
D)  trademark

Question 14

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

Accepted Answer

A)  singular source product development. 
B)  distributed product development. 
C)  multiple source product development. 
D)  multitasking product development. 
A)  singular source product development. 
B)  distributed product development. 
C)  multiple source product development. 
D)  multitasking product development.

Question 15

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

Accepted Answer

A)  cost-based pricing strategy. 
B)  supply and demand formula. 
C)  demand-based pricing strategy. 
D)  price leadership pricing strategy. 
A)  cost-based pricing strategy. 
B)  supply and demand formula. 
C)  demand-based pricing strategy. 
D)  price leadership pricing strategy.

Question 16

________ 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.

Accepted Answer

A)  Commercialization 
B)  Brand identification 
C)  Product differentiation 
D)  Merchandising 
A)  Commercialization 
B)  Brand identification 
C)  Product differentiation 
D)  Merchandising

Question 17

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.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

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. 
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.

Question 19

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

Accepted Answer

A)  introduction 
B)  maturity 
C)  growth 
D)  commercialization 
A)  introduction 
B)  maturity 
C)  growth 
D)  commercialization

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 14: Developing and Pricing Goods and Services

When consumers calculate the value of a product, they

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

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

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

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.

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

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.

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

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

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

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

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

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.

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

________ 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.

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.

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

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

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

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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