Deck 12: Creating and Pricing Products That Satisfy Customers

Question 1

Appliances,stereos,and furniture are all considered specialty products.

Answer 1

False

Question 2

A product mix is a combination of all the information a producer uses to sell its product to the public.

Answer 2

False

Question 3

In the decline life-cycle stage of a product,less profitable versions of the product are sold at reduced rates to cut losses.

Answer 3

False

Question 4

A brand mark is the part of a brand that consists of a symbol or distinctive design.

Question 5

During the decline stage of the product life-cycle,the sales volume decreases sharply because of an increase in the number of competing firms.

Question 6

A trademark is legally protected from use by anyone except its owner.

Question 7

The depth of a product mix is a measure of the average number of individual products within each line.

Question 8

Screening ideas for feasibility is the first stage of the new product development process.

Question 9

BMW's acquisition of the British automaker Rover provides BMW with instant entry into the growing sport-utility vehicle market with the legendary Range Rover line.BMW's purchase is an attempt to widen its product mix.

Question 10

A product may be a good or a service but not an idea.

Question 11

The width of a product mix is a measure of the number of individual products within each line.

Question 12

New products are often immediate successes.

Question 13

Innovations are much less common than imitations and adaptations.

Question 14

A variation of an existing product,such as freeze-dried coffee,is an example of product imitation.

Question 15

Once it becomes effective,a product mix for a given product remains effective for a long time.

Question 16

A company's product mix usually must be changed to stay competitive.

Question 17

There are two dimensions to a firm's product mix: volume and breadth.

Question 18

Candy bars,milk,and newspapers are all examples of convenience products.

Question 19

Entirely new products are innovations.

Question 20

Texaco,Exxon,and Ford are examples of a store brand.

Question 21

The branding strategy in which a firm uses the same brand for all or most of its products is called individual branding.

Question 22

Even if a grocery item is a generic product,a consumer can tell who produced it by examining the package carefully.

Question 23

Price allocates goods and services among those who are willing and able to pay for them.

Question 24

A name,term,symbol,design,or any combination of these that identifies a product and distinguishes it from a competitor's product is called packaging.

Question 25

The price floor is the lowest price at which a producer can sell its product without incurring a loss.

Question 26

The same price will be charged no matter what pricing objective is used.

Question 27

Management must set pricing objectives based on the primary objective of making a profit.

Question 28

Generic brands are becoming more popular with today's price-conscious shoppers.

Question 29

Brands help reduce a consumer's perceived risk of purchase.

Question 30

Price competition occurs when a seller makes its product stand out from the competition by distinctive product quality and customer service.

Question 31

The three levels of brand loyalty are preference,recognition,and insistence.

Question 32

Some pricing objectives include surviving,maximizing profit,obtaining market-share goals,and maintaining status quo.

Question 33

Price is the amount of money a seller is willing to accept in exchange for a product,at a given time and under given circumstances.

Question 34

A product cannot perform its function if it is priced incorrectly.

Question 35

Because markup pricing is difficult to use,few retailers and wholesalers use it.

Question 36

Craftsman and Kenmore are examples of a store brand.

Question 37

Aspirin,yo-yo,and escalator were all brand names at one time.

Question 38

Packages have marketing value but no functional value.

Question 39

A major reason why retailers use markup pricing is because it is easy to apply.

Question 40

Brand equity refers to making all of a company's brands approximately equal with respect to brand loyalty.

Question 41

Odd-number pricing is limited to low-priced items.

Question 42

One of the major dangers of competition-based pricing is that it often results in price wars.

Question 43

Pricing strategies act as guides for achieving pricing objectives.

Question 44

Differential pricing means different buyers pay different prices for the same quality and quantity of a product.

Question 45

The strategy of developing a large market share for a new product by setting a very low price is called penetration pricing.

Question 46

A price of $5.95 for a product would fall into the category of odd-number pricing.

Question 47

The strategy of charging the highest possible price for a product during the introduction stage of its life-cycle is called price skimming.

Question 48

The sum of the fixed costs and the variable costs attributed to the units produced is the selling price.

Question 49

Manufacturers,wholesalers,and retailers do not use negotiated pricing strategies.

Question 50

Competition-based pricing is important if competing products are similar and the organization is serving markets in which price is the crucial variable of the marketing strategy.

Question 51

Costs that depend on the number of units produced are called variable costs.

Question 52

Markup pricing is easy to apply,although it is difficult to determine an effective markup percentage.

Question 53

Psychological pricing strategies encourage purchases to be based on economically rational responses rather than on emotional responses.

Question 54

The breakeven quantity is the number of units that must be sold to equal the projected total revenue for the period.

Question 55

Random discounting is often predictable so consumers wait to make purchases until they can benefit from the price reductions.

Question 56

Multiple-unit pricing is packaging together two or more complementary products and selling them for a single price.

Question 57

Costs incurred regardless of how many units of a product are produced or sold are called fixed costs.

Question 58

In some cases,prices are assigned to goods on the basis of nothing more than customs and traditions.

Question 59

An early-bird special offered by a restaurant during off-peak hours is an example of a secondary-market pricing strategy.

Question 60

Fixed costs are costs that depend on the number of units produced.

Question 61

Slick It,Inc. ​Render is a salesperson for Slick It,Inc.Slick It does not sell products with its own brand name.Instead,its products are created for different retail stores and carry the store brand.Render thought that several changes needed to be made to a particular product,but Slick It management reminded him that the stores,not Slick It,owned the brand. ​However,because Slick It had been concerned about dropping sales,management listened to Render'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 Slick It to set a single price for multiple units.This had the potential of increasing sales and therefore profits,so management agreed to consider Render's suggestion.
Refer to Slick It,Inc.When Render 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 62

Nate 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 Everyone's Way,Inc.The company sells men's clothing and accessories.Everyone's 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,Nate 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,Nate 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 Everyone's Way,Inc.Which of the following descriptions should Nate 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 63

Seasonal discounts provide price incentives to customers during peak selling seasons.

Question 64

Three types of product-line pricing are price leaders,special-event pricing,and comparison discounting.

Question 65

Setting prices for organizational buyers is very similar to setting prices for consumers.

Question 66

Slick It,Inc. ​Render is a salesperson for Slick It,Inc.Slick It does not sell products with its own brand name.Instead,its products are created for different retail stores and carry the store brand.Render thought that several changes needed to be made to a particular product,but Slick It management reminded him that the stores,not Slick It,owned the brand. ​However,because Slick It had been concerned about dropping sales,management listened to Render'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 Slick It to set a single price for multiple units.This had the potential of increasing sales and therefore profits,so management agreed to consider Render's suggestion.
Refer to Slick It,Inc.When Slick It displays information on a product or its package,this refers to

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

Question 67

Slick It,Inc. ​Render is a salesperson for Slick It,Inc.Slick It does not sell products with its own brand name.Instead,its products are created for different retail stores and carry the store brand.Render thought that several changes needed to be made to a particular product,but Slick It management reminded him that the stores,not Slick It,owned the brand. ​However,because Slick It had been concerned about dropping sales,management listened to Render'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 Slick It to set a single price for multiple units.This had the potential of increasing sales and therefore profits,so management agreed to consider Render's suggestion.
Refer to Slick It,Inc.The multiple-unit pricing strategy suggested by Render is a(n)____ strategy.

A) new product
B) psychological
C) equilibrium
D) promotional
E) place

Question 68

Pricing whereby the buyer absorbs all or part of the freight costs is freight absorption pricing.

Question 69

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 70

Slick It,Inc. ​Render is a salesperson for Slick It,Inc.Slick It does not sell products with its own brand name.Instead,its products are created for different retail stores and carry the store brand.Render thought that several changes needed to be made to a particular product,but Slick It management reminded him that the stores,not Slick It,owned the brand. ​However,because Slick It had been concerned about dropping sales,management listened to Render'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 Slick It to set a single price for multiple units.This had the potential of increasing sales and therefore profits,so management agreed to consider Render's suggestion.
Refer to Slick It,Inc.Because Slick 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 71

Nate 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 Everyone's Way,Inc.The company sells men's clothing and accessories.Everyone's 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,Nate 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,Nate 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 Everyone's Way,Inc.If Nate 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 72

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 73

Slick It,Inc. ​Render is a salesperson for Slick It,Inc.Slick It does not sell products with its own brand name.Instead,its products are created for different retail stores and carry the store brand.Render thought that several changes needed to be made to a particular product,but Slick It management reminded him that the stores,not Slick It,owned the brand. ​However,because Slick It had been concerned about dropping sales,management listened to Render'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 Slick It to set a single price for multiple units.This had the potential of increasing sales and therefore profits,so management agreed to consider Render's suggestion.
Refer to Slick It,Inc.As Slick It management 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 74

A men's clothing store sells ties only at $20 and $35.This type of pricing strategy is known as price lining.

Question 75

Nate 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 Everyone's Way,Inc.The company sells men's clothing and accessories.Everyone's 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,Nate 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,Nate 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 Everyone's Way,Inc.What type of products is sold at Everyone's Way?

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

Question 76

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 77

Nate 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 Everyone's Way,Inc.The company sells men's clothing and accessories.Everyone's 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,Nate 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,Nate 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 Everyone's Way,Inc.If Nate 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 78

The legality of uniform geographic pricing has been challenged and so its use has been abandoned.

Question 79

Nate 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 Everyone's Way,Inc.The company sells men's clothing and accessories.Everyone's 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,Nate 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,Nate 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 Everyone's Way,Inc.The sewing machines are considered ____ for Everyone's Way.

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

Question 80

A trade discount is the price producers set to draw the public's attention to new products.