Question 1

Products that are designed to be similar to and compete with existing products of other firms are called

Accepted Answer

A)  innovations. 
B)  generics. 
C)  imitations. 
D)  house brands. 
E)  adaptations. 
A)  innovations. 
B)  generics. 
C)  imitations. 
D)  house brands. 
E)  adaptations.

Question 2

How does product differentiation allow a firm to exert some control over a product's price?

Accepted Answer

Product differentiation is a strategy th

Question 3

____ competition is competition based on factors such as product quality, promotion, customer service, and packaging.

Accepted Answer

A)  Product or brand 
B)  Price 
C)  Image 
D)  Nonprice 
E)  Strategic 
A)  Product or brand 
B)  Price 
C)  Image 
D)  Nonprice 
E)  Strategic

Question 4

Click It, Inc.
Travis is a salesperson for Click It, Inc. Click It does not sell products with its own brand name. Instead, its products are created for different retail stores and carry the store brand. Travis thought that several changes needed to be made to a particular product, but Click It management reminded him that the stores, not Click It, owned the brand.
However, because Click It had been concerned about dropping sales, management listened to Travis's concerns about the company's pricing. He suggested using a different pricing strategy. More specifically, he felt that the company should incorporate a multiple-unit pricing strategy because it would then allow Click It to set a single price for multiple units. This had the potential of increasing sales and therefore profits, so management agreed to consider Travis's suggestion.
-Refer to Click It, Inc. Because Click It sells its products under different brand names, each product is a

Accepted Answer

A)  manufacturer brand. 
B)  private brand. 
C)  producer brand. 
D)  generic brand. 
E)  no name brand. 
A)  manufacturer brand. 
B)  private brand. 
C)  producer brand. 
D)  generic brand. 
E)  no name brand.

Question 5

Would a new car equipped with a bumper jack, jack handle, spare tire, and warranty be the same product as the same car without these features? Explain.

Accepted Answer

No, a new car equipped with a bumper jac

Question 6

Renee collects antique Fabergé eggs. For most of these eggs, only one or a few were created of each design. These eggs would best be classified as ____ products.

Accepted Answer

A)  specialty 
B)  convenience 
C)  business 
D)  shopping 
E)  luxury 
A)  specialty 
B)  convenience 
C)  business 
D)  shopping 
E)  luxury

Question 7

A major drawback of price competition is that

Accepted Answer

A)  it lowers prices. 
B)  it gains customers. 
C)  customers equate lower prices with lower quality. 
D)  competitors can also lower their prices. 
E)  it generates brand loyalty. 
A)  it lowers prices. 
B)  it gains customers. 
C)  customers equate lower prices with lower quality. 
D)  competitors can also lower their prices. 
E)  it generates brand loyalty.

Question 8

The strategy of charging the highest possible price for a product during the introduction stage of its life-cycle is known as

Accepted Answer

A)  penetration pricing. 
B)  price skimming. 
C)  prestige pricing. 
D)  sample pricing. 
E)  odd pricing. 
A)  penetration pricing. 
B)  price skimming. 
C)  prestige pricing. 
D)  sample pricing. 
E)  odd pricing.

Question 9

Arm & Hammer launches a campaign to extend the life of its baking soda products through improved packaging and new uses in products such as toothpaste and cat litter. These new uses of products and other modifications are generally created during the ____ phase of the product life-cycle.

Accepted Answer

A)  growth 
B)  introduction 
C)  maturity 
D)  extension 
E)  decline 
A)  growth 
B)  introduction 
C)  maturity 
D)  extension 
E)  decline

Question 10

Your Way, Inc.
Eric buys companies that are small or companies in financial trouble. He helps these companies turn around and develop a competitive advantage. The company that he recently purchased is called Your Way, Inc. The company sells men's clothing and accessories. Your Way keeps the sewing machines for clothes manufacturing at a separate production facility so that the store location space can be reserved for display and selling.
After looking over the different products available, Eric realized that the company's previous owner was not aware of the product life-cycle because the company kept items that were obviously too old and out of date. Also, because of the high turnover, employees did not have good knowledge of the different product lines and did not know the difference between a product line and a product mix. To move the company forward, Eric thought of the following two measures: first, developing a new product to incorporate into the product mix; and second, eliminating the out-of-date products.
-Refer to Your Way, Inc. Which of the following descriptions should Eric use to best explain the difference between the product line and product mix?

Accepted Answer

A)  The product line is a group of similar products that differ only in relatively minor characteristics, whereas product mix is all the products a firm offers for sale. 
B)  The product mix is a group of similar products that differ only in relatively minor characteristics, whereas product line is all the products a firm offers for sale. 
C)  The product line is a group of unrelated products, whereas product mix is all the products a firm offers for sale. 
D)  The product line is a group of similar products, whereas product mix is all products that are different. 
E)  There is no difference between a product line and product mix. 
A)  The product line is a group of similar products that differ only in relatively minor characteristics, whereas product mix is all the products a firm offers for sale. 
B)  The product mix is a group of similar products that differ only in relatively minor characteristics, whereas product line is all the products a firm offers for sale. 
C)  The product line is a group of unrelated products, whereas product mix is all the products a firm offers for sale. 
D)  The product line is a group of similar products, whereas product mix is all products that are different. 
E)  There is no difference between a product line and product mix.

Question 11

When price helps Josh decide to purchase a Mini Cooper Coupe instead of a Mercedes CLS-Class Coupe because he also wants a Harley-Davidson motorcycle, price serves the function of

Accepted Answer

A)  demander. 
B)  decision maker. 
C)  facilitator. 
D)  intermediation. 
E)  allocator. 
A)  demander. 
B)  decision maker. 
C)  facilitator. 
D)  intermediation. 
E)  allocator.

Question 12

The number of units that must be sold for the total revenue to equal the total cost is called the ____ quantity.

Accepted Answer

A)  breakeven 
B)  stabilization 
C)  intersect 
D)  parity 
E)  equalization 
A)  breakeven 
B)  stabilization 
C)  intersect 
D)  parity 
E)  equalization

Question 13

Would Coca-Cola be a generic brand? Why or why not? How would you expect the package and label of a generic product to look?

Accepted Answer

No, Coca-Cola would not be considered a

Question 14

Brand names such as Tide, Surf, Biz, and Wisk are effective names because they

Accepted Answer

A)  suggest special characteristics and benefits of the product. 
B)  are easy for customers to say, spell, and recall. 
C)  are generic terms for detergent. 
D)  indicate the products' uses. 
E)  blend with competing brand names. 
A)  suggest special characteristics and benefits of the product. 
B)  are easy for customers to say, spell, and recall. 
C)  are generic terms for detergent. 
D)  indicate the products' uses. 
E)  blend with competing brand names.

Question 15

The sum of the fixed costs and the variable costs of producing a certain number of units is called the

Accepted Answer

A)  cost of goods sold. 
B)  equilibrium cost. 
C)  total cost. 
D)  breakeven cost. 
E)  total operating expense. 
A)  cost of goods sold. 
B)  equilibrium cost. 
C)  total cost. 
D)  breakeven cost. 
E)  total operating expense.

Question 16

____ become(s) a part of the physical product and consist(s) of either finished items ready for assembly or products that need little processing before assembly.

Accepted Answer

A)  Process materials 
B)  Supplies 
C)  Accessory equipment 
D)  Component parts 
E)  Major equipment 
A)  Process materials 
B)  Supplies 
C)  Accessory equipment 
D)  Component parts 
E)  Major equipment

Question 17

A wrench used to make adjustments to machinery that produces copper wire is classified as

Accepted Answer

A)  raw material. 
B)  component part. 
C)  process material. 
D)  major equipment. 
E)  accessory equipment. 
A)  raw material. 
B)  component part. 
C)  process material. 
D)  major equipment. 
E)  accessory equipment.

Question 18

Identify and discuss the three major ways that a product mix can be improved.

Accepted Answer

1. Adding new products: One major way to

Question 19

Hallmark cards develops a new line of cards that have a total cost of $200,000 and a price of $3 each. If it sells 20,000 cards the first month, what is its total revenue?

Accepted Answer

A)  $60,000 
B)  $600,000, 
C)  $400,000. 
D)  $140,000,. 
E)  $140,000 
A)  $60,000 
B)  $600,000, 
C)  $400,000. 
D)  $140,000,. 
E)  $140,000

Question 20

Bread, gasoline, and ____ are examples of convenience products.

Accepted Answer

A)  cars 
B)  furniture 
C)  newspapers 
D)  large appliances 
E)  a cruise 
A)  cars 
B)  furniture 
C)  newspapers 
D)  large appliances 
E)  a cruise

Exam 13: A: Creating and Pricing Products That Satisfy Customers

Products that are designed to be similar to and compete with existing products of other firms are called

How does product differentiation allow a firm to exert some control over a product's price?

____ competition is competition based on factors such as product quality, promotion, customer service, and packaging.

Would a new car equipped with a bumper jack, jack handle, spare tire, and warranty be the same product as the same car without these features? Explain.

Renee collects antique Fabergé eggs. For most of these eggs, only one or a few were created of each design. These eggs would best be classified as ____ products.

A major drawback of price competition is that

The strategy of charging the highest possible price for a product during the introduction stage of its life-cycle is known as

Arm & Hammer launches a campaign to extend the life of its baking soda products through improved packaging and new uses in products such as toothpaste and cat litter. These new uses of products and other modifications are generally created during the ____ phase of the product life-cycle.

When price helps Josh decide to purchase a Mini Cooper Coupe instead of a Mercedes CLS-Class Coupe because he also wants a Harley-Davidson motorcycle, price serves the function of

The number of units that must be sold for the total revenue to equal the total cost is called the ____ quantity.

Would Coca-Cola be a generic brand? Why or why not? How would you expect the package and label of a generic product to look?

Brand names such as Tide, Surf, Biz, and Wisk are effective names because they

The sum of the fixed costs and the variable costs of producing a certain number of units is called the

____ become(s) a part of the physical product and consist(s) of either finished items ready for assembly or products that need little processing before assembly.

A wrench used to make adjustments to machinery that produces copper wire is classified as

Identify and discuss the three major ways that a product mix can be improved.

Hallmark cards develops a new line of cards that have a total cost of $200,000 and a price of $3 each. If it sells 20,000 cards the first month, what is its total revenue?

Bread, gasoline, and ____ are examples of convenience products.

Exploring the World of Business and Economics

A: Being Ethical and Socially Responsible

B: Being Ethical and Socially Responsible

A: Exploring Global Business

B: Exploring Global Business

Choosing a Form of Business Ownership

Small Business, Entrepreneurship, and Franchises

Understanding the Management Process

Creating a Flexible Organization

Producing Quality Goods and Services

Attracting and Retaining the Best Employees

Motivating and Satisfying Employees and Teams

Enhancing Union-Management Relations

Building Customer Relationships Through Effective Marketing

B: Creating and Pricing Products That Satisfy Customers

Wholesaling, Retailing, and Physical Distribution

Developing Integrated Marketing Communications

Social Media, E-Business, and Accounting

Using Management and Accounting Information

Understanding Money, Banking, and Credit

Mastering Financial Management

A: Understanding Personal Finances and Investments

B: Understanding Personal Finances and Investments

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