Exam 14: Developing and Pricing Goods and Services

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

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

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

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

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

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

When people consider purchasing a good, they:

Derek's company was bidding on the construction of a new penguin display at a world-famous zoo. When putting together his bid, Derek 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 = $6 million, and company profit margin = $2 million, the cost to produce cannot exceed $4 million. [$6 million - $2 million = $4 million.] The demand-based pricing strategy in this example is called ___________.

Community Catering Services, Inc., advertises that they are the "friendliest caterers in town." Their prices are no lower than the rates charged by competing caterers, but they put a lot 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. Community Catering is likely to find that this approach is more effective in achieving its goals than the use of aggressive price cutting.

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.

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.

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

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

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

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

Price leadership is a demand-based pricing strategy.

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. -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: