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

Question 1

Describe the three major pricing methods that firms employ.

Answer 1

Answer not provided.

Question 2

What are the major phases involved in the new product development process?

Answer 2

Answer not provided.

Question 3

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?

Answer 3

Answer not provided.

Question 4

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previous owner was not aware of the product life-cycle because the company kept items that were obviously too old and out of date.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two measures: first, developing a new product to incorporate into the product mix; and second, eliminating the out-of-date products.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. 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 5

Identify three different types of discounts that a business may offer. Include a brief reason for the use of the discount and a specific example.

Question 6

Identify and discuss three types of pricing associated with business products.

Question 7

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

Question 8

Developing new products is risky, time consuming, and expensive with a high rate of failure. Nevertheless, "failing to introduce new products can be just as hazardous." What is meant by this quote?

Question 9

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

Question 10

Are a product mix and a product line the same thing? Why or why not?

Question 11

At what stage in the product life-cycle would sales volume tend to decrease sharply? Why?

Question 12

When might a firm use a price-skimming strategy? When might it use penetration pricing? Describe each strategy.

Question 13

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.

Question 14

Describe nonprice competition. When might it be used?

Question 15

Under what circumstances might a firm use survival pricing objectives? How would a firm implement such a strategy?

Question 16

What is a status-quo pricing objective?

Question 17

Is McDonald's "golden arches" symbol a brand name or a brand mark? Define each term, and state how they differ.

Question 18

What is brand equity? Describe the major factors that make up brand equity.

Question 19

Give the characteristics of shopping products, specialty products, and convenience products. Illustrate those characteristics with examples of products that fit the categories.

Question 20

Identify and describe the major stages of the product life-cycle.

Question 21

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

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

Question 22

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 23

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 24

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 25

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 26

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 minimization.
E) target return on investment.

Question 27

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 28

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 29

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

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

Question 30

Consumers would most likely treat personal computers as ____ products.

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

Question 31

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. 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.

Question 32

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) labeling.
D) brand equity.
E) demand.

Question 33

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. The sewing machines are considered ____ for Your Way.

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

Question 34

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?

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 35

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) organizational

Question 36

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 37

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. 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 38

Consumers would most likely treat candy bars as ____ products.

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

Question 39

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 40

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 41

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 42

Automobile fenders are an example of

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

Question 43

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 44

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

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

Question 45

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 46

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 47

All of the following are business products except

A) color 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 center.
E) a new appliance in someone's home.

Question 48

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 49

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 50

____ 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 51

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 52

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

A) stamping machines
B) cleaning agents
C) cranes
D) calculators
E) lathes

Question 53

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

A) inventive
B) launching
C) discovery
D) introduction
E) growth

Question 54

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 55

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 56

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 57

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 58

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 59

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 60

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 61

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 62

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 63

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 64

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

A) modify
B) broaden
C) narrow
D) customize
E) adapt

Question 65

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 66

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 67

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 68

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 69

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 70

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 71

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 72

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 73

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 74

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 75

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) Emphasize customer service
E) Watch for the early buying patterns

Question 76

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 77

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 specialized market segments.
C) lowering prices.
D) emphasizing customer service and prompt credit for defective products.
E) eliminating less profitable versions of the product.

Question 78

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 79

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 80

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