Exam 14: Developing and Pricing Goods and Services

Which of the following represents a pricing strategy that establishes a low price in hopes of attracting a great number of customers and attempts to discourage competitors?

The strategy of charging prices based on consumer demand rather than cost or a predetermined profit margin represents:

Event sponsorship like the FedEx Orange Bowl football game helps improve brand awareness.

A trademark is a brand that has been given exclusive legal protection for both the brand name and the pictorial design.

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

The exclusive goal companies expect of packaging is to protect the product from damage in transit.

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

Target costing adds a profit margin to estimated cost of production to determine the optimal price.

It now takes about seven ideas to generate one commercial new product.

Federal legislation requires that the brand name of a product clearly identify the manufacturer of that product.

The best strategy for brand name manufacturers to respond to the challenge of generic goods is to use price discounts and coupons to price their products more aggressively.

The uniqueness of convenience goods and services stimulate consumers to make an extra effort to purchase them.

Sometimes a firm will lower prices below their costs in order to build a customer base.

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 is 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. -Gourmet Pets hopes to use its special packaging and extensive advertising to create a perception in the minds of consumers that Prime Cuts is a superior product,even though the actual quality of meat used in the product is virtually no different from competing brands.The company is attempting to develop:

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.

Which of the following product attributes is least emphasized on television ads?

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.

The key to success for U.S.firms operating internationally is to increase their efforts to maintain high quality while decreasing expenditures on new-product development.

Green Giant Green Beans,Chevy Corvette,Coca Cola,Dole Pineapple,and Peter Pan Peanut Butter are all examples of:

The critical component of a total product offer is always a low price.