Exam 14: Developing and Pricing Goods and Services

While the time in each stage may vary, all products progress through each stage of the product life cycle.

The most common classification of consumer goods and services is based on producer or manufacturer behavior in the market.

Firms utilizing an everyday low pricing (EDLP) strategy establish a policy of special sales on a regular basis.

Helen is considering adding a rack of greeting cards to her product offerings at Litton Books Unlimited. Her fixed costs associated with adding the greeting cards would be $300. Variable costs per card are $1 each. The greeting cards will sell for $2 each. Helen's break-even point would occur at ________ cards sold.

As consumers evaluate a product, price plays a small role.

SnackAttack has found that an effective technique to generate ideas for new consumer products is to carefully listen to employees and suppliers.

Concept testing involves taking a product idea to consumers to test their reactions.

Sweet Dream Confectioners uses the same ingredients as most other producers of chocolate candies. In fact, taste tests suggest that the candy itself, while quite good, isn't much better than other well-known brands of chocolate. However, the company wraps its candies in expensive-looking foil and places them in very attractive boxes. It promotes its products in advertisements as "the ultimate in chocolate experience." Sweet Dream charges a much higher price than most competitors, but sales continue to grow. This success indicates that:

Which of the following products would most likely be classified as a specialty good or service?

Firms use brand managers or brand teams to give them greater control over both new-product development and product promotion.

__________ consist of major capital equipment such as new factories and heavy machinery.

New-product failures are most often caused by excessively high prices.

Fashion experts readily understand the power of ________________. Shortly after Kate Middleton married Prince William, throngs of soon-to-be-brides scrambled to find copies of her bridal gown, and also that of her sister Pippa's bridesmaid gown.

Cost-based pricing adds a desired profit margin to the cost of producing a product.

Healthy Pick designed a new type of packaging that significantly improves taste and texture of food when defrosted. Unfortunately, firms seldom find that improvements in packaging impact market share and profits.

When consumer loyalty reaches the point of brand insistence, the product becomes a specialty good.

The Reaching Beyond Our Borders box titled "Playing the Name Game" explains:

The classification of goods or services into a particular class depends on the individual consumer.

Which of the following is expected during the maturity stage of a product life cycle?

Sales levels of Armstrong mountain bikes are rising rapidly, profits are very high, and a growing number of competitors are taking aim at Armstrong's market lead. Based on this information, Armstrong mountain bikes are in which stage of the product life cycle?