Deck 12: Aproduct Development and Pricing Strategies

Question 1

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

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

Answer 1

C

Question 2

Consumers would most likely treat personal computers as ____ products.

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

Answer 2

D

Question 3

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 realised 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previous owner was not aware of the product life-cycle because the company kept items that were obviously too old and out of date.Also, because of the high turnover, employees did not have good knowledge of the different product lines and did not know the difference between a product line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two measures: first, developing a new product to incorporate into the product mix; and second, eliminating the out-of-date products.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.If Eric wanted to teach his employees about the stages of a product's life-cycle, he should talk about all of the following except

A) expansion.
B) decline.
C) introduction.
D) growth.
E) maturity.

Answer 3

A

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

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

Question 5

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.As Click It managers considers the pricing issues, they should know that all of the following are major pricing objectives except

A) status-quo pricing.
B) market-share goals.
C) survival.
D) profit minimisation.
E) target return on investment.

Question 6

A good or service that is intended primarily for personal or household use is called a(n) ____ product.

A) convenience
B) Business
C) Specialty
D) consumer
E) organisational

Question 7

Energiser batteries are sold in multipacks to make it more convenient for the consumer, who usually needs more than one battery at a time.Energiser batteries would be classified as a ____ product.

A) Household
B) Shopping
C) Luxury
D) specialty
E) convenience

Question 8

A good or service intended primarily for use in producing other goods or services is a ____ product.

A) production
B) Business
C) Specialty
D) component
E) Supply

Question 9

If, in the midst of daily operating activities, Jane Smith finds that the office has run out of paper for the copy machine, she quickly purchases more at the local office supply store.In this case, she is a

A) specialty shopper.
B) convenience shopper.
C) business customer.
D) supply purchaser.
E) personal consumer.

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 realised 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.If Eric wanted to develop a new product, he would begin with

A) concept testing.
B) screening.
C) product analysis.
D) idea generation.
E) marketing analysis.

Question 11

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.When Travis thinks of products and brands adding value to the company that sells them, which concept is he referring to?

A) Equilibrium brand
B) Brand extension
C) Generic name
D) Brand demand
E) Brand equity

Question 12

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 realised 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.What types of product are sold at Your Way?

A) Shopping products
B) Business products
C) Specialty products
D) Convenience products
E) Unique products

Question 13

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 realised 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?

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 14

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 realised 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.The sewing machines are considered ____ for Your Way.

A) raw materials
B) accessory equipment
C) component parts
D) process material
E) major equipment

Question 15

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.When Click It displays information on a product or its package, this refers to

A) supply.
B) pricing.
C) labelling.
D) brand equity.
E) demand.

Question 16

Everything that one receives in an exchange, including all tangible and intangible attributes and expected benefits, is called a

A) package.
B) contract.
C) product.
D) trade.
E) warranty.

Question 17

Consumers would most likely treat candy bars as ____ products.

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

Question 18

Consumer products can be divided into the following three categories:

A) convenience, shopping, and business.
B) shopping, convenience, and specialty.
C) convenience, component, and accessory.
D) shopping, component, and specialty.
E) business, specialty, and shopping.

Question 19

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.The multiple-unit pricing strategy suggested by Travis is a ____ strategy.

A) new product
B) Psychological
C) Equilibrium
D) promotional
E) Place

Question 20

For a product such as staples, which of the following determines whether it is a consumer product or a business product?

A) Quantity purchased
B) Use of the product
C) Basic function the product provides
D) Whether it is purchased for cash or credit
E) Need satisfied

Question 21

When a product experiences sales revenue and profit increases, reaches a peak, and then declines, it goes through what is called

A) cyclical phases.
B) roller coaster revenue.
C) product stages.
D) product growth and decline.
E) product life-cycle.

Question 22

In which order do the stages of the product life-cycle occur?

A) Growth, introduction, maturity, decline
B) Introduction, maturity, slowdown, decline
C) Innovation, distribution, maturity, decline
D) Introduction, growth, maturity, decline
E) Introduction, growth, slowdown, decline

Question 23

Appliances, men's suits, and ____ are examples of shopping products.

A) bicycles
B) process materials
C) chewing gum
D) soft drinks
E) cranes

Question 24

Automobile fenders are an example of

A) accessory equipment.
B) raw materials.
C) process materials.
D) component parts.
E) supplies.

Question 25

Carmen Cattucci wanted to buy a new car.She visited several dealers to compare prices, styles, and dealer reputations.Finally, she bought a car from a local dealer.The purchase of a car is an example of a

A) convenience product.
B) specialty product.
C) business product.
D) shopping product.
E) major equipment item.

Question 26

Chris and Kimberly White decided to buy new furniture for their bedroom.They spent considerable time shopping around, comparing prices and styles.Bedroom furniture is best classified as a ____ product.

A) convenience
B) business
C) shopping
D) specialty
E) major equipment

Question 27

All of the following are business products except

A) colour televisions in the electronics department of a large retail store.
B) iron ore in a steel plant.
C) small hand tools in an automobile repair shop.
D) toner cartridges in the supply closet of a word processing centre.
E) a new appliance in someone's home.

Question 28

Which of the following is an example of a raw material that would be used in the production of a physical product?

A) Steel sheets
B) Paper
C) Plastic
D) Timber
E) Gasoline

Question 29

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

Question 30

Iron ore in a steel plant is an example of

A) supplies.
B) component parts.
C) raw materials.
D) process materials.
E) accessory equipment.

Question 31

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) Specialty
B) convenience
C) Business
D) Shopping
E) Luxury

Question 32

A consumer product for which buyers will not accept a substitute, for which purchasers do not compare alternatives, and that is purchased infrequently and with extra effort on the buyer's part is a ____ product.

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

Question 33

An order of calculators with new features just arrived for the finance department of Nike.These calculators represent

A) major equipment.
B) process materials.
C) component parts.
D) accessory equipment.
E) office materials.

Question 34

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

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

Question 35

Which business product classification is most appropriate for the wire used inside a stereo system?

A) Raw material
B) Major equipment
C) Accessory equipment
D) Component part
E) Process material

Question 36

Mama Mia restaurant purchased two large ovens for its kitchen.These ovens are an example of which type of business product?

A) Convenience product
B) Accessory equipment
C) Major equipment
D) Component parts
E) Process material

Question 37

Sheet steel to be used in making automobile fenders is an example of

A) raw materials.
B) supplies.
C) component parts.
D) accessory equipment.
E) process materials.

Question 38

Paper, pencils, oils, and ____ are examples of supplies.

A) stamping machines
B) cleaning agents
C) Cranes
D) Calculators
E) Lathes

Question 39

If Texas Instruments hires an accounting firm to compute the company's taxes, the accounting firm is providing a(n) ____ service.

A) business
B) governmental
C) institutional
D) tangible
E) mandatory

Question 40

Which of the following is not generally considered to be a stage in the product life-cycle?

A) Introduction
B) Growth
C) Maturity
D) Transition
E) Decline

Question 41

The first stage of the product life-cycle is the ____ stage.

A) Inventive
B) Launching
C) Discovery
D) introduction
E) Growth

Question 42

Car Tunes, a national car stereo retailer, markets stereos and speakers.The company will soon sell car alarms and mobile phones to ____ its product mix.

A) Modify
B) Broaden
C) Narrow
D) customise
E) Adapt

Question 43

Koolers Incorporated feels that at its current stage-growth-it needs to meet its competition.It can best do this by all of the following means except

A) initiating product improvements.
B) expanding the product line to appeal to specialised market segments.
C) lowering prices.
D) emphasising customer service and prompt credit for defective products.
E) eliminating less profitable versions of the product.

Question 44

The product life-cycle stage in which there is a rapid sales increase, other firms have begun to market competing products, and lower unit costs and an overall tendency toward increased profit prevail is called

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

Question 45

If Tyson, a poultry producer, decided to start producing veggie burgers, this would be an example of

A) developing an entirely new product line.
B) expanding the depth of the marketing mix.
C) extending an existing product line.
D) an aesthetic product modification.
E) narrowing the marketing mix.

Question 46

The marketing challenge of making potential customers aware of the product's existence and its features, benefits, and uses is prevalent in which of the product life-cycle stages?

A) Introduction
B) Maturity
C) Extension
D) Decline
E) Growth

Question 47

For product modification to be effective, all but which of the following conditions must be met?

A) The modification should make the product more consistent with consumers' desires.
B) The product must be modifiable.
C) Consumers must be able to perceive that a modification has been made.
D) Modification should allow the product to provide greater satisfaction.
E) The product must be an appliance.

Question 48

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.

A) Growth
B) Introduction
C) Maturity
D) Extension
E) Decline

Question 49

Sales of XYZ Corporation's digital video cameras are rising rapidly, profits are peaking, and competitors are entering the market.XYZ is able to maintain its market lead.Judging from this example, the digital video camera is in which stage of the product life-cycle?

A) Introduction
B) Decline
C) Maturity
D) Growth
E) Evaluation

Question 50

When Pepsi introduced Mountain Dew Code Red, it was

A) expanding the width of its marketing mix.
B) increasing the depth of a product line.
C) making minor modifications that did not broaden the marketing mix.
D) narrowing its marketing mix.
E) replacing poorly performing products.

Question 51

The product life-cycle stage in which there is a decrease in the rate of sales growth, the sales curve begins to decline, and dealers simplify their product lines is called

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

Question 52

Borden, Inc.offers pasta, snacks, grocery, and dairy items as well as films, adhesives, and other nonfood products.These products are referred to as Borden's

A) product mix.
B) product line.
C) product differentiation.
D) product life-cycle.
E) inventory mix.

Question 53

The product life-cycle stage in which consumer awareness and acceptance of the product are low, there are few competitors, and there is a gradual rise in sales because of promotion is called

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

Question 54

General Mills has been able to extend the life of Bisquick baking mix by

A) significantly improving the product's formulation.
B) providing good customer service.
C) including recipes in the box.
D) improved advertising.
E) using personal selling.

Question 55

All of the following are characteristics of the introduction stage of the product life-cycle except

A) usually, a low profit or even a loss.
B) the appearance on the market of refinements or extensions of the original product.
C) relatively few competitors.
D) often, high price.
E) low consumer awareness and acceptance of the product.

Question 56

A product usually declines because of technological advances or environmental factors or because

A) the item is very popular.
B) the price is too low.
C) consumers have switched to competing brands.
D) the price is too high.
E) no ads or sales incentives have been used.

Question 57

When a company changes one or more of a product's characteristics to manage its product mix, it is engaging in ____ modification.

A) Quality
B) functional
C) aesthetic
D) product
E) Market

Question 58

Razor Company's blades are in the maturity stage of the product life-cycle.How can the company strengthen its market share?

A) Eliminate less profitable versions of the product
B) Redesign the packaging
C) Make no style changes
D) Emphasise customer service
E) Watch for the early buying patterns

Question 59

All of the following are characteristics of the maturity stage of the product life-cycle except

A) a peak in the sales curve.
B) a decline in the sales curve.
C) simplification of product lines.
D) increased distribution.
E) increased price competition.

Question 60

WD-40, Inc., markets only one product, its namesake chemical lubricant.The company offers the product in several different container sizes: smaller ones for household use and larger ones for industrial use.WD-40 would be considered as having a

A) wide product mix.
B) broad product line.
C) narrow product mix.
D) differentiated product line.
E) brand name.

Question 61

Which of the following is not a phase in the new product development process?

A) Business analysis
B) Test marketing
C) Development
D) Screening
E) Modification

Question 62

The redesign of a bicycle to improve its safety is an example of a(n) ____ modification.

A) Visual
B) functional
C) Quality
D) aesthetic
E) Texture

Question 63

TCBY wants to expand its line of food products.The company sent surveys to consumers to determine which food items would appeal to them for dessert or snacks.The company is in which phase of new product development?

A) Idea generation
B) Product development
C) Test marketing
D) Screening
E) Business analysis

Question 64

Hillary has a new product idea that aligns well with her company's current organisational resources.She puts together a presentation for potential buyers and requests feedback on their reactions and suggestions.Hillary is

A) screening.
B) generating product ideas.
C) test marketing.
D) conducting a business analysis.
E) concept testing.

Question 65

Why should companies develop and introduce new products?

A) To keep their product designers busy
B) Because failing to do so can threaten the future success of the firm
C) Because it is relatively inexpensive and therefore worth the time
D) To replace deleted products so the broadness of the marketing mix remains unchanged
E) Because new products are almost always successful

Question 66

When Duracell came out with a new battery that significantly outlasted the company's earlier product, the battery had undergone a(n) ____ modification.

A) Functional
B) Feature
C) Quality
D) aesthetic
E) Market

Question 67

Lever Brothers is considering an idea for a new liquid laundry detergent that contains a whitening agent.The company presented its proposed new product to a group of potential customers in the form of a short explanation and questionnaire.Lever Brothers is conducting

A) a business analysis.
B) concept testing.
C) screening.
D) pricing.
E) idea generation.

Question 68

In a meeting to generate new products, the advisory committee felt that it had come up with some excellent ideas.Now that there is a list of product ideas, the next step is

A) business analysis.
B) product development.
C) screening.
D) test marketing.
E) commercialisation.

Question 69

The largest number of product ideas are rejected during the ____ stage of new product development.

A) screening
B) test marketing
C) idea generation
D) business analysis
E) Pricing

Question 70

The stage of new product development in which potential customers are presented with a written or oral description of the product to determine their initial attitudes and buying intentions is called

A) concept testing.
B) screening.
C) test marketing.
D) business analysis.
E) commercialisation.

Question 71

What type of product modification is likely to make the greatest impact on a food product?

A) Quantity
B) Aesthetic
C) Functional
D) Versatility
E) Texture

Question 72

The stage in the evolution of a new product in which a pool of ideas is created is called

A) product development.
B) screening.
C) idea generation.
D) test marketing
E) business analysis.

Question 73

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

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

Question 74

The stage in the evolution of new products in which ideas that match company objectives are analysed as to whether the firm has the required expertise for the product's development and marketing is called

A) exploration.
B) test marketing.
C) screening.
D) product development.
E) business analysis.

Question 75

All of the following are stages in the evolution of new products except

A) business analysis.
B) commercialisation.
C) product modification.
D) screening.
E) product development.

Question 76

The Glo-Brite Company is considering development of a new children's toothpaste in fun-shaped dispensers.Before performing any business analysis on the product, Glo-Brite would like an initial response from potential customers to determine interest in a toothpaste of this type.Glo-Brite will begin ____ to gather the information.

A) idea generation
B) screening
C) test marketing
D) product development
E) concept testing

Question 77

Entirely new products are called

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

Question 78

Borden, Inc., wants to develop a new line of great tasting, low-calorie, low-fat, and low-cholesterol processed cheese products.The managers are studying whether demand is strong enough and whether the new line will yield a favourable return on investment.The managers are currently in which phase of new product development?

A) Idea generation
B) Product development
C) Test marketing
D) Screening
E) Business analysis

Question 79

As the product idea committee of Foster Manufacturing Company went through its list of possible new products, it rejected various ideas for one or more reasons.Which of the following is least likely to be a reason for rejection?

A) The company lacked the expertise to develop and market the product.
B) The product did not match organisational resources.
C) The product would allow the company to increase its annual sales by 20 percent.
D) The product was not consistent with the company's objectives.
E) The company lacked the needed human resources.

Question 80

After several years of success with the product line, Procter & Gamble introduced its popular Sure deodorant in three new scents.This is an example of ____ modification.

A) functional
B) Feature
C) Quality
D) aesthetic
E) Market