Question 1

Paper clips, stationery, and other office supplies used by businesses are types of industrial support goods.

Accepted Answer

A) True 
 B)False

Question 2

The trend away from personal salespeople to self-service in many retail outlets has caused firms to:

Accepted Answer

A)  reduce their advertising promotional budgets. 
B)  rely more on personal sales efforts. 
C)  place a greater promotional importance on packaging. 
D)  decrease expenditures on interactive Web pages.

Question 3

Regardless of changes in packaging, the total product offer remains unchanged.

Accepted Answer

A) True 
 B)False

Question 4

What does a break-even point of 100 units mean to a firm?

Accepted Answer

A)  The firm must sell 100 units to maximize its profits. 
B)  Fixed costs plus variable costs equals 100 units. 
C)  By producing 100 units, the firm can ensure that variable costs completely cancel its fixed costs. 
D)  If the firm sells 100 units, its total revenues will equal its total costs.

Question 5

The pricing objectives of a firm should be set independently of the other elements of their marketing mix.

Accepted Answer

A) True 
 B)False

Question 6

Producers often use ________ as a primary basis for setting prices on the goods and services they offer the public.

Accepted Answer

A)  tariffs 
B)  costs 
C)  market share 
D)  quotas

Question 7

When people consider purchasing a good, they:

Accepted Answer

A)  are responding to the market forces of supply and demand. 
B)  are most influenced by the price of the product or service. 
C)  will not consider goods that require them to make a special effort to purchase. 
D)  may evaluate and compare a variety of factors.

Question 8

Derek's company was bidding on the construction of a new penguin display at a world-famous zoo. When putting together his bid, Derek began by determining what the zoo would be willing to pay for the structure, and then subtracting a reasonable profit for the company. The result would be the cost of production. For example: If price to zoo = $6 million, and company profit margin = $2 million, the cost to produce cannot exceed $4 million. [$6 million - $2 million = $4 million.] The demand-based pricing strategy in this example is called ___________.

Accepted Answer

A)  target costing 
B)  penetration pricing 
C)  cost-based pricing 
D)  volume pricing

Question 9

Community Catering Services, Inc., advertises that they are the "friendliest caterers in town." Their prices are no lower than the rates charged by competing caterers, but they put a lot of emphasis on getting to know the needs of their customers. They tailor their efforts to meet these needs, providing a unique dining experience that exactly matches the customer's expectations. Community Catering is likely to find that this approach is more effective in achieving its goals than the use of aggressive price cutting.

Accepted Answer

A) True 
 B)False

Question 10

Many products are promoted by emphasizing their key benefits, rather than setting the price lower than that of competitive goods. This emphasis on the product's benefits illustrates a(n) _______ strategy.

Accepted Answer

A)  penetration 
B)  nonprice competition 
C)  industry leader 
D)  bundled package

Question 11

Department stores often use _________ pricing in which they have regular prices which are relatively high, but offer special sales where prices are set lower than competitors.

Accepted Answer

A)  penetration 
B)  bundling 
C)  strategic 
D)  high-low

Question 12

More than any other component of a total product offer, technology has reduced the importance of packaging.

Accepted Answer

A) True 
 B)False

Question 13

Products that carry the name of a distributor or a retailer instead of the manufacturer's name are called:

Accepted Answer

A)  dealer (private) brands. 
B)  knockoff brands. 
C)  generic brands. 
D)  equity brands.

Question 14

Brand names help sellers with new-product introductions and create an opportunity for higher prices.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is a characteristic of the decline stage of the product life cycle?

Accepted Answer

A)  falling sales 
B)  price reductions 
C)  many new firms entering the market 
D)  increasing profits

Question 16

Price leadership is a demand-based pricing strategy.

Accepted Answer

A) True 
 B)False

Question 17

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 T-bone, 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 are 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.
-Prime Cuts was the brainchild of Karen Terrier who guided all the marketing efforts of the product. She selected each element of the marketing mix such as the package, brand name, pricing, promotion, and placement decisions. Karen obviously serves in the job of:

Accepted Answer

A)  marketing consultant. 
B)  brand manager. 
C)  operations analyst. 
D)  marketing intermediary.

Exam 14: Developing and Pricing Goods and Services

Paper clips, stationery, and other office supplies used by businesses are types of industrial support goods.

The trend away from personal salespeople to self-service in many retail outlets has caused firms to:

Regardless of changes in packaging, the total product offer remains unchanged.

What does a break-even point of 100 units mean to a firm?

The pricing objectives of a firm should be set independently of the other elements of their marketing mix.

Producers often use ________ as a primary basis for setting prices on the goods and services they offer the public.

When people consider purchasing a good, they:

Many products are promoted by emphasizing their key benefits, rather than setting the price lower than that of competitive goods. This emphasis on the product's benefits illustrates a(n) _______ strategy.

Department stores often use _________ pricing in which they have regular prices which are relatively high, but offer special sales where prices are set lower than competitors.

More than any other component of a total product offer, technology has reduced the importance of packaging.

Products that carry the name of a distributor or a retailer instead of the manufacturer's name are called:

Brand names help sellers with new-product introductions and create an opportunity for higher prices.

Which of the following is a characteristic of the decline stage of the product life cycle?

Price leadership is a demand-based pricing strategy.