Question 1

For small businesses, product differentiation:

Accepted Answer

A) is more difficult than it is for larger firms because of the high cost of product research and development. 
B)  usually concentrates on the pricing component of the total product offer. 
C) can be an important strategy to gain market share. 
D) is less important than it is for big firms with multiple product lines.

Question 2

Gabe intends to visit a variety of retailers of sound equipment comparing features, quality, and prices of different brands at each store. This behavior indicates that for Gabe a sound system is a shopping good.

Accepted Answer

A) True 
 B)False

Question 3

Fast-food organizations must constantly monitor all sources of information for new product ideas.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is a relevant criterion for the product screening process?

Accepted Answer

A) sales forecasts for the product 
B)  production capacity of competitors 
C) profit potential 
D) the stage of the product life cycle

Question 5

According to the "Spotlight on Small Business" box in Chapter 14, Let's Dish and Dream Diners knew that even though its target market valued home-cooked meals and family time spent enjoying them they lacked the time to adequately prepare such meals.

Accepted Answer

A) True 
 B)False

Question 6

The is a theoretical model that describes the sales and profit performance of a product class over time.

Accepted Answer

A) product life cycle 
B) marketing template 
C) market stages model 
D) commercialization time line

Question 7

Product screening is designed to:

Accepted Answer

A) shorten the product life cycle. 
B) reduce the number of new-product ideas being worked on at any one time. 
C)  reduce the time involved in new-product development. 
D) move production to low wage countries.

Question 8

Although their names are similar, brand loyalty and brand equity are unrelated.

Accepted Answer

A) True 
 B)False

Question 9

Cost-based pricing adds a desired profit margin to the cost of producing a product.

Accepted Answer

A) True 
 B)False

Question 10

Shopping goods and services are purchased only after consumers compare value, quality, style, and price of competing goods and services.

Accepted Answer

A) True 
 B)False

Question 11

Unsought goods and services are purchased on impulse and provide no added value to consumers.

Accepted Answer

A) True 
 B)False

Question 12

Pattie Bunz operates the Zestee Burgers restaurant. The cost of pickles, onions, buns, catsup, and meat patties would all be considered variable costs for her type of business.

Accepted Answer

A) True 
 B)False

Question 13

Once an organization surveys the consumer's wants and needs, has designed a group of products to meet those needs, and begun to market them in stores, the organization is assured of success.

Accepted Answer

A) True 
 B)False

Question 14

Sales of cell phones in the United States are still increasing, but the rate of growth has slowed. Sales are expected to peak somewhat soon in the U.S. Based on this information, cellular phones are in what stage of the product life cycle in the U.S.?

Accepted Answer

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

Question 15

Entice-mint Breath Mints is a new brand of breath fresheners. The company realizes that product location is very important since consumers desire to buy this type product with a minimum of effort. Entice-mint mints represent a:

Accepted Answer

A) shopping good. 
B)  specialty good. 
C) convenience good. 
D) industrial good.

Question 16

June lives in the southern part of Alabama where winters are normally fairly mild. Last January, during an unusually cold spell, the water pipes in her house froze and burst. She had to look in the Yellow Pages to find a plumber who was able to come out and repair the pipes the same day. Prior to the frozen pipes, the plumber's services represented a(n):

Accepted Answer

A) unsought service. 
B)  industrial service. 
C)  specialty service. 
D) convenience service.

Question 17

When a brand becomes commonplace and identified with a category of goods rather than the unique product of a specific manufacturer, the brand may become a:

Accepted Answer

A) generic name. 
B)  trademark. 
C)  universal product code. 
D) product liability issue.

Question 18

Brand managers are responsible for the marketing of a product after it has been developed and a clear promotional message has been identified.

Accepted Answer

A) True 
 B)False

Question 19

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 Tbone, 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.
-The company currently markets McDog T-bone, Lapdog Lunchtreats, Rover's Potroast, and Puppy Porterhouse in the dog food market. Prime Cuts will be an addition to the company's in the dog food market.

Accepted Answer

A) product mix 
B) product line 
C)  product time 
D) product screen

Question 20

The formula for break-even analysis includes which of the following components?

Accepted Answer

A) depreciation 
B)  forecasted sales 
C)  forecasted cash requirements 
D) variable cost per unit of output

Exam 14: Developing and Pricing Goods and Services

For small businesses, product differentiation:

Gabe intends to visit a variety of retailers of sound equipment comparing features, quality, and prices of different brands at each store. This behavior indicates that for Gabe a sound system is a shopping good.

Fast-food organizations must constantly monitor all sources of information for new product ideas.

Which of the following is a relevant criterion for the product screening process?

According to the "Spotlight on Small Business" box in Chapter 14, Let's Dish and Dream Diners knew that even though its target market valued home-cooked meals and family time spent enjoying them they lacked the time to adequately prepare such meals.

The is a theoretical model that describes the sales and profit performance of a product class over time.

Product screening is designed to:

Although their names are similar, brand loyalty and brand equity are unrelated.

Cost-based pricing adds a desired profit margin to the cost of producing a product.

Shopping goods and services are purchased only after consumers compare value, quality, style, and price of competing goods and services.

Unsought goods and services are purchased on impulse and provide no added value to consumers.

Pattie Bunz operates the Zestee Burgers restaurant. The cost of pickles, onions, buns, catsup, and meat patties would all be considered variable costs for her type of business.

Once an organization surveys the consumer's wants and needs, has designed a group of products to meet those needs, and begun to market them in stores, the organization is assured of success.

Sales of cell phones in the United States are still increasing, but the rate of growth has slowed. Sales are expected to peak somewhat soon in the U.S. Based on this information, cellular phones are in what stage of the product life cycle in the U.S.?

Entice-mint Breath Mints is a new brand of breath fresheners. The company realizes that product location is very important since consumers desire to buy this type product with a minimum of effort. Entice-mint mints represent a:

When a brand becomes commonplace and identified with a category of goods rather than the unique product of a specific manufacturer, the brand may become a:

Brand managers are responsible for the marketing of a product after it has been developed and a clear promotional message has been identified.

The formula for break-even analysis includes which of the following components?