Question 1

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

Accepted Answer

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

Question 2

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

Accepted Answer

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

Question 3

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

Accepted Answer

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

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

In cost-based pricing, a producer adds an amount to the total production cost to provide a profit.The amount added to the production cost is called a

Accepted Answer

A)  discount. 
B)  markup. 
C)  variable cost. 
D)  differentiation. 
E)  price line.

Question 6

During which phase of the product development process can marketers experiment with advertising, pricing, and packaging in different geographic areas?

Accepted Answer

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

Question 7

If Nabisco had established a pricing objective of selling one out of every three crackers consumed in the world, it would have established an objective based on

Accepted Answer

A)  cash flow. 
B)  market share. 
C)  survival. 
D)  return on investment. 
E)  euro sales volume.

Question 8

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

Accepted Answer

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 9

Ties 'R' Us sells a variety of ties at many different prices.Often customers are confused about the pricing and have a hard time making a buying decision.Ties 'R' Us should use what type of pricing strategy?

Accepted Answer

A)  Odd pricing 
B)  Price lining 
C)  Captive pricing 
D)  Multiple-unit pricing 
E)  Geographic pricing

Question 10

All of the following are business products except

Accepted Answer

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 11

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?

Accepted Answer

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 12

For any product, the breakeven quantity is the

Accepted Answer

A)  number sold over fifty units. 
B)  number sold such that costs equal revenues. 
C)  total number produced to equal the total resources available to the producer. 
D)  number of products needed to be sold in order to make a reasonable profit. 
E)  euro volume of total sales.

Question 13

A company wanting to maximise profits from its new product would use product-line pricing.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

Buyers may relate price to quality.To such a buyer, a higher price for a product is an indicator of

Accepted Answer

A)  suspicious pricing. 
B)  higher quality. 
C)  product availability. 
D)  poor image. 
E)  greater quantity.

Question 16

To promote an overall company image, Borden dairy products are packaged in similar designs and colors.This approach is known as

Accepted Answer

A)  product grouping. 
B)  family packaging. 
C)  brand managing. 
D)  line consistency. 
E)  family branding.

Question 17

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

Accepted Answer

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 18

If a customer has moderate loyalty toward Heinz ketchup, she likely will

Accepted Answer

A)  buy the product in greater quantities. 
B)  shop around for the best price for that good. 
C)  perceive the product as having the same quality level as competitive brands. 
D)  never buy another brand of ketchup. 
E)  purchase other products that carry the Heinz name.

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 12: Aproduct Development and Pricing Strategies

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

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

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

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

In cost-based pricing, a producer adds an amount to the total production cost to provide a profit.The amount added to the production cost is called a

During which phase of the product development process can marketers experiment with advertising, pricing, and packaging in different geographic areas?

If Nabisco had established a pricing objective of selling one out of every three crackers consumed in the world, it would have established an objective based on

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

Ties 'R' Us sells a variety of ties at many different prices.Often customers are confused about the pricing and have a hard time making a buying decision.Ties 'R' Us should use what type of pricing strategy?

All of the following are business products except

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?

For any product, the breakeven quantity is the

A company wanting to maximise profits from its new product would use product-line pricing.

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

Buyers may relate price to quality.To such a buyer, a higher price for a product is an indicator of

To promote an overall company image, Borden dairy products are packaged in similar designs and colors.This approach is known as

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

If a customer has moderate loyalty toward Heinz ketchup, she likely will

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

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