MRKT 239 Test 4 Study Guide

Product design is the process of creating and designing products so that consumers perceive them as different from competing products. T/F

False

Profits for a firm are computed as follows: Profits = Total Revenue - Fixed Costs. T/F

False

Changes in buyers' attitudes, other components of the marketing mix, and uncontrollable environmental factors can influence demand. T/F

True

Communicating product benefits to consumers is very important in the introduction stage. T/F

True

The major drawback in using aesthetic modifications is that their value is determined subjectively. T/F

True

Use of the product is the most important means of distinguishing consumer products from business products. T/F

True

The owner of Big Jim's Motorcycles is opening a new retail location. Which of the following is most likely to be a fixed cost for Big Jim's Motorcycles? - Retail personnel salaries - Advertising on Facebook - Building rent - Electricity - Transportation of sold bikes

Building rent

Which of the following is NOT a business product? - Oil to be refined into fuel - Chips to be integrated into components for personal computers - Paper, pens, and tape to be used in an office - Marketing consulting services to aid a company in marketing a new product - Calculators bought to help individuals complete their personal federal income tax forms

Calculators bought to help individuals complete their personal federal income tax forms

Which of the following products is most likely to have an inverted C-shaped demand curve? - Visit to the dentist - Eternity perfume - Starbucks coffee - Pillsbury cake mix - Ford Escape

Eternity perfume

Which of the following products is most likely to have an inverted C-shaped demand curve? - Visit to the dentist - Eternity perfume - Starbucks coffee - Pillsbury cake mix - Ford Escape

Eternity perfume

A run-out approach to product deletion lets the product decline without changing the marketing strategy. T/F

False

Brand preference is the strongest form or degree of brand loyalty. T/F

False

In which stage of the product life cycle do profits begin to decrease? - Introduction - Growth - Maturity - Decline - Recovery

Growth

What degree of brand loyalty is the strongest and most desired by marketers? - Preference - Requirement - Awareness - Insistence - Recognition

Insistence

Which of the following is an example of a functional modification? - Planters Nuts redesigns the packaging of its nut products so they are easier for those with arthritis to open. ​- Nissan installed a new battery for its Nissan Leaf that will allow it to travel much longer before needing to be recharged. ​- A smartphone manufacturer uses a more durable metal for its phones that is less likely to break if dropped. - PepsiCo begins using a new sweetener in its Pepsi product that changes the taste slightly. ​- Prada releases a handbag with a different design and color.

Planters Nuts redesigns the packaging of its nut products so they are easier for those with arthritis to open.

______________ refers to how a product is conceived, planned, and produced.​ - Product differentiation ​- Level of quality ​- Product positioning ​- Product features - ​Product design

Product design

As Richard works on the prototype of a new action-oriented computer game, he is engaging in which phase of the new-product development process? - Idea generation - Commercialization - Test marketing - Screening - Product development

Product development

Which of the following is the best example of disruptive innovation? - Razor blade - Can opener - Snickers candy bar - iPhone - Chevy Corvette

Razor blade

What step in developing new products involves determining whether the product idea is compatible with company objectives, needs, and resources on a general level? - Product development - Evaluation of competitor's efforts - Screening - Idea generation - Business analysis

Screening

Which factor is least likely to affect pricing decisions? - Competitive prices - Legal and regulatory issues - Organizational and marketing objectives - Customer's interpretation and response - Shifting stock values

Shifting stock values

Of the following choices, which would be the easiest brand name to legally protect? - Tarzink Yogurt - Learn and Grow Daycare - Scout Camping Supplies - Sullivan Water Filtering Systems - Western County Distributors

Tarzink Yogurt

At what point does a firm maximize profit? - The point at which marginal cost equals marginal revenue - The point at which the firm sells its product at the highest price - The breakeven point plus the adjusted marginal cost - The point at which marginal profits equal marginal revenue - The point at which marginal cost equals marginal profits

The point at which marginal cost equals marginal revenue

A brand name is the part of the brand that is spoken. T/F

True

A customer looking for the lowest price on a mattress without concern for the quality of the mattress or the status gained by buying and using a certain brand is a price-conscious customer. T/F

True

A service is intangible and is the result of the application of human or mechanical efforts to people or objects. T/F

True

Advertising used in the decline stage may prolong the life of the product. T/F

True

For most products, the quantity demanded goes up as the price goes down. T/F

True

One advantage of nonprice competition is that - a firm can react quickly to competitive efforts. - market share becomes less important. - a firm can build customer loyalty. - marketing efforts are completely eliminated. - pricing is no longer a factor.

a firm can build customer loyalty

Convenience products are - relatively inexpensive, frequently purchased items for which buyers exert only minimal purchasing effort. - frequently purchased items for which buyers are willing to exert considerable effort. - frequently purchased items that are found in certain retail outlets. - items that are expensive but are easy to purchase. - items that require some purchase planning and for which the buyer often will not accept substitutes.

relatively inexpensive, frequently purchased items for which buyers exert only minimal purchasing effort.

Compared with other phases of the new-product development process, the largest number of new-product ideas is rejected during the ____ phase. - idea generation - concept testing - business analysis - screening - test marketing

screening

During the maturity stage - product modifications are unnecessary. - there is less emphasis on changing a product's price. - marketing strategies are rarely altered. - some competitors are forced out. - limited advertising expenditures are required to maintain market share.

some competitors are forced out.

Price is a key element in the marketing mix because it relates most directly to - the size of the sales force. - the speed of an exchange. - quality controls. - the generation of total revenue. - brand image.

the generation of total revenue

At the breakeven point, - the money a company brings in from selling products equals the amount spent producing the products. - the total fixed costs are exactly equal to the total variable costs. - profits are exactly equal to the difference between revenue and total variable costs. - the marginal revenue of a product is exactly equal to the marginal cost of producing one more unit. - the marginal cost curve and the average cost curve will be identical for a particular product.

the money a company brings in from selling products equals the amount spent producing the products.

Louis is reading the online report of the tuition and fees he owes for this semester of college. Since he has signed up for online banking, he pays the amount immediately. The amount Louis just paid is considered to be - his expenses. - his charges. - his bill. - the price. - the exchange valuations.

the price

Louis is reading the online report of the tuition and fees he owes for this semester of college. Since he has signed up for online banking, he pays the amount immediately. The amount Louis just paid is considered to be - his expenses. - his charges. - his bill. - the price. - the exchange valuations

the price

Price is - money paid in a transaction. - not important to buyers. - of limited interest to sellers. - the most inflexible marketing mix decision variable. - the value that is exchanged for products in a marketing transaction.

the value that is exchanged for products in a marketing transaction.

The concept of product quality is the same from consumer to consumer and from consumer markets to organizational markets. T/F

False

Buyers want to exert only minimal effort to obtain shopping products. T/F

False

Customers always interpret a higher price to mean higher quality. T/F

False

Disruptive innovations involve completely new technologies.​ T/F

False

During the growth stage, promotion costs rise as a percentage of total sales. T/F

False

Electricity is an example of a product that is price elastic. T/F

False

Line extensions are less common than other new products because line extensions are more expensive and more risky. T/F

False

Marketers have little influence over shaping consumers' concepts or perceptions.​ T/F

False

New products are classified solely as innovations that have never been sold by any organization. T/F

False

During the commercialization phase of new-product development, plans for full-scale manufacturing and marketing are refined and settled. T/F

True

Functional modifications usually require that the product be redesigned. T/F

True

Laggards are the last to adopt a new product and usually distrust new products. T/F

True

Nonprice competition allows a company to increase its brand's unit sales through means other than changing the brand's price. T/F

True

Price cuts are typical in a product's growth stage. T/F

True

Price is the value that is exchanged for products in a marketing transaction. T/F

True

Process materials are used directly in the production of products. T/F

True

The General Auto Insurance advertises its automobile insurance as "For a great low rate you can get online, go to The General and save some time!" General is engaging in - nonprice competition. - demand-based pricing. - cost-based pricing. - price differentiation. - price competition.

price competition

Test marketing should be conducted when a product has been given a low probability of success. T/F

False

The marketing mix should be left alone during the maturity stage of the product life cycle; tampering with it may bring an early death to the product. T/F

False

The phase-out approach to product deletion involves a process of continuous price increases to make as much profit as possible before the product is finally priced out of existence. T/F

False

The point at which marginal revenue equals marginal cost is the breakeven point. T/F

False

Trial is the first stage of the product adoption process. T/F

False

Venture team members usually come from the same functional areas within the firm. T/F

False

The purpose of the pricing concept is to quantify and express the value of items in a market exchange. T/F

True

The three major ways to modify a product include - aesthetic, quality, and functional changes. - extensions, generations, and upgrades. - color, size, and quality modifications. - styling, product features, and product design. - quality, quantity, and design.

aesthetic, quality, and functional changes.

A product mix is best described as - all products offered by a firm. - product, distribution, promotion, and price. - many products sold by one firm. - all products of a particular type. - a group of closely related products that are considered a unit because of market, technical, or end-use considerations.

all products offered by a firm.

Break-even analysis is a tool that marketers are likely to employ during the ____ stage of the new-product development process. - screening - concept testing - business analysis - product development - test marketing

business analysis

Products are classified as being business or consumer products according to the - number of buyers involved in the decision. - buyer's intended use of the product. - seller's intended use of the product. - location of use. - types of outlets from which they are purchased.

buyer's intended use of the product.

One disadvantage of test marketing a new product is that - the product is distributed on a regional basis. - competitors may copy the product. - the results give little indication of the product's future success. - price, advertising, and packaging cannot be varied from market to market. - it might fail before it can be commercialized.

competitors may copy the product.

Although they become part of a larger product, ____ can often be easily identified and distinguished on the larger product. - component parts - accessory parts - raw materials - process materials - MRO supplies

component parts

If Norwegian Cruise Lines increased the price of its seven-day cruise package by 10% and, as a result, experienced a 20% decline in customer bookings, Norwegian's demand would be - steady. - inelastic. - elastic. - prestige. - marginal.

elastic

The four major stages of a product life cycle include - prosperity, recession, depression, and recovery. - specialty, convenience, shopping, and unsought goods. - decline, stabilization, exposure, and growth. - introduction, growth, maturity, and decline. - awareness, interest, trial, and adoption.

introduction, growth, maturity, and decline.

The test marketing stage - is an extension of the screening stage. - should come immediately after business analysis. - ensures that the product will not fail. - is a sample launching of the entire marketing mix. - prevents competitors from copying the product

is a sample launching of the entire marketing mix.

The test marketing stage - is an extension of the screening stage. - should come immediately after business analysis. - ensures that the product will not fail. - is a sample launching of the entire marketing mix. - prevents competitors from copying the product.

is a sample launching of the entire marketing mix.

The width of a product mix is measured by the number of product - dimensions in the product line. - features in each brand. - items in the product line. - lines a company offers. - specialties a company offers.

lines a company offers.

The major characteristic of a private brand is that - only retailers initiate and own the brand. - manufacturers are not identified on the product. - producers become involved with the marketing mix. - producers price the product. - wholesalers encourage producers to make the product available.

manufacturers are not identified on the product.

Marketers begin to make decisions about labeling, packaging, branding, pricing, and promotion during - commercialization - screening - concept testing - product development - test marketing

product development

Three major ways in which marketers engage in product differentiation are - product quality, product design and features, and product support services. - product quality, product support services, and packaging. - product support services, product design and features, and product positioning. - product positioning, product quality, and product management. - product positioning, product design and features, and product promotion.

product quality, product design and features, and product support services.

If Umbro faces a standard demand curve that exists for most products, as it raises the price of its soccer balls, the - quantity demanded goes down. - demand remains constant. - quantity demanded increases. - demand increases initially, and then drops. - breakeven increases.

quantity demanded goes down.