Deck 12: Creating and Pricing Products That Satisfy Customers

Question 1

Generally, the product life-cycle consists of five stages: development, introduction, growth, maturity, and decline.

Answer 1

False

Question 2

A narrow product mix allows a firm to gain stability by concentrating on just a few markets.

Answer 2

False

Question 3

Some firms set an annual percentage ROI (return on investment) as their pricing goal.

Answer 3

True

Question 4

A store that sells all of its men's gloves for $9.95 and $15.00 is practicing price lining.

Question 5

A consumer product for which buyers will expend effort or planning, that is purchased infre-quently, and that is usually purchased only after being compared with competing products is a __________ product.

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

Question 6

A group of similar products that differ only in relatively minor characteristics is called a

A) product.
B) product line.
C) generic product.
D) product differentiation.
E) product mix.

Question 7

If a company needs to obtain cash quickly to pay its bills, it may opt for a pricing strategy that achieves which goal?

A) Market share increase
B) Status quo
C) ROI target
D) Maximization of profit
E) Survival

Question 8

A manufacturer of cameras and film may price a camera at a low price to attract customers, but price the film at a relatively high price because customers must continue to purchase film in or-der to use their cameras. This type of pricing strategy is known as

A) captive pricing.
B) premium pricing.
C) price lining.
D) special-event pricing.
E) customary pricing.

Question 9

A "2/10, net 30" invoice feature is an example of a __________ discount.

A) trade
B) cash
C) preferential
D) uniform
E) quantity

Question 10

A product's classification largely determines the appropriate marketing strategy.

Question 11

The most important element in the success of a branded product is consumers' confidence in the product.

Question 12

If a firm is using cost-based pricing, it considers costs and revenue secondary to competitors' prices.

Question 13

Competition-based pricing results in a high price when product demand is strong and a low price when demand is weak.

Question 14

All of the following are characteristics of the decline stage of the product life-cycle except

A) a sharp decrease in sales volume.
B) a decline in the number of competing firms.
C) increased consumer awareness of the product.
D) the removal of less profitable versions from the product line.
E) increased importance of production and marketing costs in determining profit.

Question 15

To maintain an effective product mix, a firm often must eliminate some products. This process is called

A) quality modifications.
B) functional modifications.
C) aesthetics.
D) product deletion.
E) product modification.

Question 16

A product with no brand at all is called a

A) discount product.
B) factory second.
C) maverick product.
D) generic product.
E) plain-package product.

Question 17

Non-price competition can be used effectively when a seller does all but which one of the fol-lowing?

A) Makes distinctions in product quality
B) Differs in customer service
C) Uses an attractive promotional strategy
D) Creates an appealing package
E) Lowers prices

Question 18

A Product by Any Name
-In the next five minutes, list as many names as you can think of that fit each criterion.
a. Easy to say, spell, and recall
b. Communicates major product benefits
c. Suggests product uses or special features
d. Distinctive enough to set the product apart from competing brands

Question 19

How Should We Price It?
-In the time allotted to you, identify the pricing strategies used in each of the situations described below.
a. Hyundai prices its newest model lower than the price of competing brands.
b. A high-quality men's shirt has a suggested retail price of $59.95 instead of $60.
c. A restaurant lowers the price of its corned beef and cabbage plate during the week before St. Patrick's Day.
d. For years, the price of a candy bar was 25 cents and rarely did a manufacturer charge more.
e. A supermarket prices its eggs, bread, and milk below cost.