Chapter 12: Concept Reviews
Products the consumer buys only after comparing value, quality, price, and style from a variety of sellers are goods or services called:
shopping products
The _______ of the product mix is the number of product lines it contains; while, the _______ of the mix is the average number of individual products with each line.
width; depth
Products created for household or family use and intended for daily living are called:
consumer products.
Which of the following statements is true with regards to buyer's sensitivity to price? a. A premium price may be necessary if buyers have even a slightly negative product perception. b. If buyers equate price and quality, then lower prices may improve a product's image. c. All buyers are influenced by price in the same way. d. Consumer price sensitivity can vary between products. e. A lower price may be appropriate if a product is considered superior to others in its category.
d. Consumer price sensitivity can vary between products.
The largest number of product ideas are rejected during which stage of new-product development?
Screening
Which of the following is not a major factor that contributes to brand equity?
Brand extension
What are the three levels of brand loyalty (listed from the weakest to strongest form of brand loyalty)?
Brand recognition, brand preference, and brand insistence
Which pricing method should a firm use if management's pricing objective is to increase sales or market share?
Competition-based pricing
What are three kinds of pricing methods?
Competition-based pricing, cost-based pricing, and demand-based pricing
What are three types of pricing associated with business products?
Geographic pricing, transfer pricing, and discounting
What are the seven stages of new-product development in order from start to finish?
Idea generation, screening, concept testing, business analysis, product development, test marketing, and commercialization
Pricing strategies are flexible and may include markdowns and price incentives during which stage of a product life-cycle?
Maturity stage
What pricing strategy has a low initial entry price (often lower than the eventual market price) to attract many customers, discourage competition, and build market share quickly?
Penetration pricing
_____ is the amount of money a seller is willing to accept in exchange for the product at a given time and under given circumstances.
Price
_______ refers to changing one or more of a product's characteristics; while, a _______ is the development of a product closely related to one or more products in the existing product line but designed specifically to meet somewhat different customer needs.
Product modification; line extension
What are the five categories of pricing strategies?
Product-line pricing, promotional pricing, differential pricing, new-product pricing, and psychological pricing
This is a type of psychological pricing in which a lower-priced item is compared to a more expensive brand in hopes that the consumer will use the higher price as a comparison price.
Reference pricing
What is the aim of test marketing?
To determine buyers' probable reactions
What are the five types of discounts for business products?
Trade discounts, quantity discounts, cash discounts, seasonal discounts, and allowance
Which of the following is not a way in which price functions as an allocator? a. Price allocates product quality equally among consumers. b. Price helps customers to allocate their own financial resources among various want-satisfying products. c. Price allocates financial resources (sales revenue) among producers according to how well they satisfy customers' needs. d. Price allocates goods and services among those who are willing and able to buy them.
a. Price allocates product quality equally among consumers.
Setting prices for business products is different from setting prices for consumer products due to all of the following factors, except: a. transportation considerations. b. the credit worthiness of businesses. c. geographic issues. d. the size of purchases.
b. the credit worthiness of businesses.
Which item below best represents a product line? a. Procter & Gamble offering laundry detergent and "Swiffer" brooms b. AT&T offering phone service and phones c. Coca Cola offering Cherry Coke and Diet Coke d. Chase Bank offering ATMs and auto loans e. DirecTV offering internet service and cable service
c. Coca Cola offering Cherry Coke and Diet Coke
Which of the following is NOT classified as a category of business products? a. Business service b. Supply c. Line extension d. Raw material e. Component part
c. Line extension
Which of the following pricing objective goals is impossible to define and thus impossible to achieve? a. Target return on investment b. Status-quo pricing c. Profit maximization d. Market-share goals e. Survival
c. Profit maximization
Which pricing objective cannot be pursued on a long-term basis? a. Target return on investment b. Status-quo pricing c. Survival d. Market-share goals e. Profit maximization
c. Survival
Which of the following is a major function of packaging? a. To increase costs b. To not be easily disposable or reusable c. To blend in with other packaging d. To be more aesthetically pleasing than it is functional e. To promote a product by communicating its features
e. To promote a product by communicating its features
The stages of the product life-cycle (in order) are:
introduction, growth, maturity, and decline.
Brands that are initiated and owned by the producer, such as Xerox or SONY, are called:
manufacturer brands.
Recognizing what stage of its life cycle a product is in has a direct impact on marketers' decisions about:
marketing strategy.
To use _______ most effectively, a seller must have the flexibility to change prices often, rapidly, and aggressively in response to competitors' price changes. _______ is most effectively used when the seller can make its product stand out through distinctive product quality, customer service, promotion, packaging or other features.
price competition; Non-price competition
