Exam 14: Developing and Pricing Goods and Services

Jian 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:

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

One reason many large consumer-product companies make use of __________ is to have greater control over new-product development and product promotion.

Shopping goods and services are purchased only after consumers compare value, quality, style, and price of competing goods and services.

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

The ____________ is a theoretical model that describes the sales and profit performance of a product class over time.

Kathy works as a manager at Fantastic Fabricators. The innovative staff at the company is regularly encouraged to suggest ideas for new products. Since Kathy works in product screening, she:

Which of the following statements about packaging is the most accurate?

Successful product differentiation:

In the fall semester, Alex noticed that the plastic cola bottles in the vending machines at his university had changed shape. Upon further investigation, he realized that each bottle contained 2 ounces less beverage than previous bottles, even though he paid the same price as last semester. The pricing objective of the beverage company is to:

Which of the following statements about nonprice competition is most accurate?

Nailerman's Hardware is a large chain of hardware stores that sells a line of tools under the Nailerman brand even though they were actually produced by another firm. Since the products are actually produced by another firm, the Nailerman brand is an example of a knockoff brand.

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

Papa's Market offers customers tissues, canned vegetables, napkins, and dishwashing detergent in basic packaging with no identified brand. These goods are popular with Papa's cost-conscious shoppers because they are significantly less expensive than nationally known brand names. These types of goods are examples of generic goods.

A skimming price strategy involves a low pricing policy intended to attract price-sensitive customers from competitors.

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

One function of effective packaging is to provide information regarding warranties, benefits, and uses of the good inside the package.

When consumers calculate the value of a product, they look at the benefits and then subtract the cost.

_________ is an important part of the total product offer for a product.

The cost of raw materials used to produce a good or service represent the firm's ________ costs.