Question 1

Shopping goods are purchased more often than convenience goods.

Accepted Answer

Shopping goods, by definition, are more expensive and purchased less often than convenience goods. Examples of shopping goods are mobile devices and appliances. Examples of convenience goods are milk, bread, and newspapers.

Question 2

Variable costs of a product are those costs that change with the quantity of a product produced and sold.

Accepted Answer

Variable costs are key to completing a breakeven analysis and using cost-oriented pricing.

Question 3

A private brand is a brand name developed by a wholesaler or retailer for their product.

Accepted Answer

A private brand is created when a wholesaler or retailer develops a brand name and has a manufacturer put it on a product. An example is Sears, which carries the brand of Kenmore appliances.

Question 4

If prices are set too high,the company will make a large profit on each item,but will sell fewer units.

Accepted Answer

If prices are too high, demand for the item will not be sufficient to sell many units.

Question 5

A product's features may be intangible.

Accepted Answer

Product features are the qualities, tangible and intangible, that a company builds into its products.

Question 6

After a product has been in the maturity stage for a few decades,marketers must accept that the product will begin to decline.

Accepted Answer

Companies try to keep products in the maturity stage as long as they can. They seek to extend product life through creative means such as product extension, product adaptation, and reintroduction.

Question 7

Sears' Craftsman Tools is an example of a private brand.

Accepted Answer

When a wholesaler or retailer develops a brand name and has a manufacturer put it on a product, the resulting name is a private brand.

Question 8

Price skimming occurs when a company sets an initially low price to establish a new product in the market.

Accepted Answer

Price skimming means setting a high price initially to quickly recoup costs.

Question 9

The breakeven point is the price at which a company earns the maximum profits.

Accepted Answer

The breakeven point is the number of units that must be sold at a given price so that total revenues exactly cover the sum of fixed and variable costs. The profit at the breakeven point will therefore equal zero.

Question 10

Most ideas for new products eventually reach the market.

Accepted Answer

According to the chapter, it takes an estimated 50 new product ideas to generate one product that finally reaches the market.

Question 11

Companies using price lining offer all items in certain categories at a limited number of prices.

Accepted Answer

In price lining, certain price points are established in which goods of certain categories are sold.

Question 12

One advantage to marketers of selling online is that it is easier for sellers to hide prices and enjoy a large markup.

Accepted Answer

When pricing for Internet sales, marketers must consider different kinds of costs and different forms of consumer awareness. Many e-businesses reduce prices because of the ease of comparison shopping online.

Question 13

Pet Care Pros has a strong reputation in caring for customers' dogs and cats.The owners want to develop a new service: pet sitting for reptiles.Their product development process should include development of a prototype.

Accepted Answer

Instead of prototype development, services require a three-part service process design that includes process selection, worker requirements, and facility requirements.

Question 14

The product life cycle describes the commercial life of services as well as goods.

Accepted Answer

The product life cycle is a series of stages through which goods and services pass during their commercial life-being born, growing in stature, maturing, and finally declining and dying.

Question 15

While watching your favorite sitcom,you see an actor holding a particular brand of beer.This is an example of product placement.

Accepted Answer

When used in successful films and TV shows, the brand's association with famous performers is an implied celebrity endorsement.

Question 16

Speed to market increases the chance that a new product will survive.

Accepted Answer

The more rapidly a product moves from the laboratory to the marketplace, the more likely it is to survive. Speed to market establishes market leadership before competitors arrive on the scene.

Question 17

A doctor's office buys a multifunction printer.This purchase is an example of a capital item.

Accepted Answer

Capital items, including computer equipment, are expected to last for several years. In contrast, the paper used in the printer would be an expense item.

Question 18

The process of product development begins with concept testing.

Accepted Answer

The seven sequential steps of the development process are product ideas, screening, concept testing, business analysis, prototype development, product testing and test marketing, and commercialization.

Question 19

A value package consists of an in-store advertisement that makes the product attractive and identifies features and benefits.

Accepted Answer

Today's customer regards a product as a value package that includes a bundle of attributes, benefits, and features. A product's packaging makes it attractive and identifies its features and benefits.

Question 20

Packaging can serve as an in-store advertisement that makes the product attractive,displays the brand name,and identifies features and benefits.

Accepted Answer

In addition, advances in materials have created added uses-such as the use of the paper-based material that doubles as a cooking container for Budget Gourmet dinners.

Quiz 12: Developing and Pricing Products