Question 1

Which of the following gives the correct formula for calculating markup percentage?
A) Sales price/markup
B) Sales price/fixed costs
C) Fixed costs/variable costs
D) Markup/sales price
E) Sales price/variable costs

Accepted Answer

Markup percentage is calculated by dividing the markup amount by the sales price. Therefore, the correct formula for calculating markup percentage is Markup/Sales price. None of the other options provide this formula.

Question 2

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

Accepted Answer

Private brands are brands that are owned by a retailer or a wholesaler and are sold exclusively in their stores. Sears' Craftsman Tools are owned by Sears and are sold exclusively in their stores, making them an example of a private brand.

Question 3

Product X is just beginning to generate a profit for the first time as the manufacturer lowers prices slightly and sees a significant increase in sales.At what stage in the product life cycle is Product X,and how is this stage identified?

Accepted Answer

The answer of Product X is just beginning to generate...

Question 4

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

Accepted Answer

Packaging is an important tool to promote a product and can effectively convey information about its brand, features, and benefits to customers. Well-designed packaging can catch the attention of the customers and encourage them to choose the product over others on display. Therefore, packaging can be considered as an in-store advertisement that helps to enhance the product's visibility and marketability.

Question 5

Which of the following terms refers to the monetary amount added to a product's cost to the seller in order to sell it at a target profit?
A) Profit margin
B) Breakeven cost
C) Revenue
D) Revenue margin
E) Markup

Accepted Answer

Markup refers to the monetary amount added to a product's cost to the seller in order to sell it at a target profit. Profit margin refers to the percentage of revenue that is profit, breakeven cost refers to the cost at which the seller neither makes a profit nor incurs a loss, revenue refers to the total income generated from sales, and revenue margin refers to the percentage of revenue that is profit.

Question 6

Companies who price their product low enough to attract a large number of buyers are most likely pursuing which of the following objectives?
A) Stable market pricing
B) High profits
C) Stable market activity
D) Low market volatility
E) Market share

Accepted Answer

Companies who price their product low enough to attract a large number of buyers are most likely pursuing the objective of gaining market share. This strategy is effective in increasing the company's customer base and establishing a strong presence in the market. However, it may result in lower profits in the short term, as the prices are set lower than the competitors.

Question 7

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

Accepted Answer

The product life cycle refers to the stages that a product or service goes through from introduction to eventual decline, regardless of whether it is a physical good or a service. Therefore, the statement is true.

Question 8

Which of the following costs refers specifically to those that change with the quantity of a product sold or produced?
A) Annual costs
B) Variable costs
C) Fixed costs
D) Marginal costs
E) Market-adjusted costs

Accepted Answer

Variable costs are costs that vary directly with the quantity of a product produced or sold. These costs include direct materials and labor costs, as well as any other costs that may vary with production levels, such as packaging materials or shipping costs. Annual costs are simply the total costs incurred in a year, regardless of production levels, while fixed costs are costs that do not vary with the quantity produced or sold. Marginal costs refer specifically to the additional cost of producing or selling one more unit of a product, and market-adjusted costs are costs that are adjusted to reflect changes in market conditions, such as changes in demand or pricing.

Question 9

Which of the following best describes pricing objectives?
A) The need for the company to compete
B) An indication of the company's social and ethical concerns
C) A reflection of the company's image
D) The ability of a firm to generate revenue
E) The goals of the seller achieved by pricing products

Accepted Answer

Pricing objectives refer to the goals that a seller aims to achieve through its pricing strategy. These objectives can be related to increasing revenue, gaining market share, maximizing profit, or even setting prices based on social or ethical concerns. Therefore, Choice E is the best description of pricing objectives.

Question 10

Product placement includes showing actors on television shows using a name-brand product.

Accepted Answer

This is a common strategy used by advertisers to subtly promote their products by having them appear in TV shows, movies, or other forms of media.

Question 11

Describe three ways to extend a product's life as it nears the end of the maturity stage.

Accepted Answer

The answer of Describe three ways to extend a product's...

Question 12

What is branding? Explain what branding is and give an example of branding.

Accepted Answer

The answer of What is branding? Explain what branding is...

Question 13

Which pricing objective has the goal of establishing market share?
A) Market penetration
B) E-business
C) Brand recognition
D) Brand licensing
E) Profit-maximizing

Accepted Answer

Market penetration pricing objective aims to establish market share by setting lower prices than competitors to attract more customers and gain a larger share of the market. This strategy can be effective in increasing brand awareness and customer loyalty, which can lead to long-term profitability.

Question 14

Which of the following best defines fixed costs?
A) Costs that are needed to acquire a fixed market share
B) Costs that are needed to acquire fixed profits
C) Costs that are unaffected by the number of goods sold by the firm
D) Costs that remain the same from year to year
E) Costs that remain the same across all products

Accepted Answer

Fixed costs are costs that remain the same regardless of the level of production or sales. They are not affected by the number of goods sold by the firm. Examples of fixed costs include rent, salaries, insurance premiums, and property taxes. Fixed costs are important for businesses to consider when setting prices and determining profitability.

Question 15

With product adaptation,the product is modified for greater appeal in different countries.

Accepted Answer

Product adaptation involves modifying a product in order to increase its appeal and relevance to specific target markets, such as different countries or regions. This may involve changes to the product's design, features, packaging, branding, or other elements, in order to better align with the cultural, regulatory, and consumer preferences of these markets. Therefore, the statement is true.

Question 16

How do companies achieve continuous sales of more units and higher profits,even with lower unit prices?
A) Market penetration
B) E-business
C) Profit-maximization strategies
D) Market domination
E) Market share

Accepted Answer

The answer of How do companies achieve continuous sales of...

Question 17

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

Accepted Answer

Products can be revitalized or repositioned through marketing strategies, innovation, or adapting to new market trends, potentially extending the maturity stage or even returning to growth.

Question 18

Describe the three types of brand names and give an example of each.

Accepted Answer

The answer of Describe the three types of brand names...

Question 19

The sales price of a product is given as the product's cost to the seller plus which of the following quantities?
A) Breakeven price
B) Revenues
C) Variable price
D) Fixed point
E) Markup

Accepted Answer

The markup is the additional amount added by the seller on the cost of the product to determine the final sales price. Option A (Breakeven price) is the price at which the seller neither makes a profit nor incurs a loss. Option B (Revenues) refers to the total income generated from the sales of the product. Option C (Variable price) could refer to a pricing strategy where the price of the product varies based on different factors. Option D (Fixed point) is not applicable in determining the sales price of a product.

Question 20

Which of the following costs refers specifically to those that are unaffected by the quantity of a product sold or produced?
A) Annual costs
B) Variable costs
C) Fixed costs
D) Marginal costs
E) Market-adjusted costs

Accepted Answer

Fixed costs are costs that do not vary with changes in the quantity of a product sold or produced. Examples of fixed costs include rent, salaries, and insurance premiums.

Quiz 12: Developing and Pricing Products

Which of the following gives the correct formula for calculating markup percentage?

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

Product X is just beginning to generate a profit for the first time as the manufacturer lowers prices slightly and sees a significant increase in sales.At what stage in the product life cycle is Product X,and how is this stage identified?

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

Which of the following terms refers to the monetary amount added to a product's cost to the seller in order to sell it at a target profit?

Companies who price their product low enough to attract a large number of buyers are most likely pursuing which of the following objectives?

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

Which of the following costs refers specifically to those that change with the quantity of a product sold or produced?

Which of the following best describes pricing objectives?

Product placement includes showing actors on television shows using a name-brand product.

Describe three ways to extend a product's life as it nears the end of the maturity stage.

What is branding? Explain what branding is and give an example of branding.

Which pricing objective has the goal of establishing market share?

Which of the following best defines fixed costs?

With product adaptation,the product is modified for greater appeal in different countries.

How do companies achieve continuous sales of more units and higher profits,even with lower unit prices?

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

Describe the three types of brand names and give an example of each.

The sales price of a product is given as the product's cost to the seller plus which of the following quantities?

Which of the following costs refers specifically to those that are unaffected by the quantity of a product sold or produced?