Food and Fiber Test 2

if the calculated price elasticity of ice cream is -2, then:

For each 1% increase in price, sales decrease 2%; The demand for the product is elastic; the product is a normal good because of the inverse relation between price and quantity

Cover Girl Makes Tiny Trys, miniature lip-sticks in 3 packs of different colors. CG has used ______to create product differentiation

Form

The role of prices in the competitive market includes ALL BUT

Guide and influence nutrition policy

Price reductions, promotion cutbacks, and competitor dropout characterize what stage of the product life cycle?

Maturity stage of life cycle

A shift in demand CANNOT be caused by a change in:

Own Price

The same formula is used to make all brands of vodka, so costs are quite similar. A company that sells vodka at a premium price is using a ______ pricing strategy

Perceived-value

In preparing an industry analysis, a business 1st determines the attractiveness of the competitive environment. The industry forces that shape the attractiveness of a competitive environment exclude:

Portfolio analysis

___________ is the act of designing the company's offerings and image so they occupy meaningful and distinct competitive position in the target customers' minds

Positioning

If the demand for a food commodity decreases while supply of the commodity increases,

Price decreases

The relationship between price and goal revenue when the elasticity of demand is inelastic is:

Price decreases, total revenue decreases

What is the effect on consumer price when a cost-reducing technology is adopted?

Price rations supply (price decreases); Supply shifts to right, so price decreases with inelastic demand

The elasticity effect on total revenue when the elasticity of demand is elastic is:

Price rises, total revenue declines; price declines, total revenue increases

If the calculated price elasticity is determined to be inelastic, the correct pricing strategy to increase total revenue is to:

Raise price

Competition may emerge between strategic groups as a result of

an appeal to overlapping customer groups

Once a company has identified its competitors and their strategies, the next stop in analyzing the competition is to:

analyze competitors' strengths and weaknesses

There are many different kinds of bicycle seats. Trico Sports claims superiority on the basis of 37 different patents it has on the technology that went into making the Trico brand seat. It has created a product differentiation based on:

features

A brand extension strategy has the benefit of:

the ability of the new brand to benefit from the strength of the established brands

The demand elasticity when price increases from $10 to $11 per unit (10% increase), and a 25% decrease in quantity demanded results is:

-2.5

Why is a demand curve not drawn as a perfectly vertical line or as upward sloping to the right?

Because it is Perfectly vertical suggests consumers have a fixed desire for food; ...perfectly vertical suggests price doesn't matter for determining demand; ...Upward sloping indicates quantity consumed eventually overtakes quantity produced

______ is the art of finding out how and why some companies can perform tasks better than other companies

Benchmarking

In a buyers market, price elasticities can be high, but if the market shifts to a sellers' market, price elasticity could drop; consequently ________ and _______ can affect price elasticity

Customers' switching capacity; supply-demand conditions

Of the 5 kinds of value pricing, which of the following is not one of them? Performance-based pricing; customization value pricing; value in use pricing; life-cycle value pricing; perceived value pricing.

Customization value pricing

Consumers consume a variety of goods because of the economic principle of:

Diminishing marginal utility

Supply is NOT:

Drawn as a perfectly horizontal line

The elasticity of a specific food in a specific form at a specific location at a specific time is ______, while the raw or unprocessed commodity at the farm level is ________.

Elastic; inelastic

The way the public perceives a company and its products is the company's:

Image

Competitive strategies based on knowledge advantage include:

Inside the box strategy; competitor reactive strategy; oblique strategy

Assume an industry is in the growth stage of market evolution, and the first firm in the market is large and positioned in the middle of the market. If the second entrant into the industry were a small firm, which of the following strategies should it use?

It should use a strategy that focuses on one small niche in the market not currently being served

A market segment has a large number of buyers. High initial price does not attract competitors to the market, but it communicates superior product image. In this segment, a ______ is the best strategy.

Skimming price

If the calculated cross-price elasticity of chips and salsa is -.2, then:

The cross price elasticity is inelastic; salsa is a complement; for each 1% increase in P of chips, sales of salsa decrease 2%

When choosing a pricing strategy, a company needs to consider:

The customer's purchase behavior

Product line extensions result in:

a higher chance of survival for the new product

The final step in the development of a positioning strategy is to:

communicate the position effectively to consumers

Of the following choices, which one is inappropriate for selecting a pricing strategy? Customer buying behavior; product life-cycle; price-margin management; costs of acquisition, marketing, and operations; competitors prices

competitors prices

Sources of competitive advantage include:

cost advantage; differentiation advantage; marketing advantage

Product positioning strategies include:

differentiation and product positioning; branding and brand management strategies; brand and produt line strategies.

Brand equity:

is tied closely to specific product lines

Many companies try to set a price that will maximize current profits. What is inherently wrong with this pricing goal?

it assumes the companies have knowledge of demand and cost functions

Brand valuation:

results in customers showing a preference for one product over another when they are basically identical.

Hallmark Cards is continually coming out with new cards for new occasions. It recently added flower arrangements, why do they keep expanding their product line?

to keep its market-leader position