MKT 3100 Exam 3

The demand curve for prestige products generally slopes downward due to higher prices

False

The knowledge gap is where "the rubber meets the road," where the customer directly interacts with the service provider.

False

The marketing of services differs from the marketing of products because services are tangible and separable from the service provider

False

When Sony released its PlayStation 4 game console, it charged a high price, attracting the most avid game players. This was a market penetration pricing strategy.

False

Distributive fairness pertains to a customers perception of the benefits received compared to the cost of the inconvenience or loss

True

Dynamic pricing is also to as individualized pricing

True

Effective packaging and labels send consumers the signal "buy me"

True

New product development add value to the firms products and services through innovation

True

a company's product line consists of its various product mixes

false

Private label brands are imitations often sold by street vendors

FALSE, A private-label brand is a retailer or store brand, developed by retailers to be sold only within their own stores.

A demand curve shows the relationship between income and demand

False

A pricing strategy and a pricing tactic are essentially the same thing

False

All products and services are intangible

False

Costs related to supple and costs related to demand are the two primary cost categories

False

Diana owns a boutique specializing in ball gowns. Sales are stable and Diana feels it is time she had a 20 percent increase in her salary. If Diana takes this increase in compensation, it will decrease the break-even quantity of gowns she needs to sell on a monthly basis.

False

One of the key characteristics of brainstorming sessions is that bad ideas should be immediately rejected so the group can focus it's attention on good ideas

False

Price is the cash expenditure plus taxes that consumers have to pay for a good or service.

False

When a firm has a particular profit goal as its overriding concern, it will use target return pricing to meet the profit objective.

False

Hilton Hotels trains it's front desk employees to dress neatly and conservatively to project a professional image. This relates to the service dimension of tangibles

True

In the service context, empowerment means allowing employees to make decisions about how service is provided to customers

True

In us markets, there are many substitute products for Fruit Loops cereal, suggesting the price elasticity of demand for Fruit Loops is high.

True

Jen traded in her old car for her hearts desire, a new Lexus sedan. The Lexus is considered a specialty product

True

New-to-the-world products that create new markets can add tremendous value to firms

True

Nike sells shoes, clothing, and athletic gear. These products represent the breadth of Nikes products

True

Pricing strategies should be aligned with a firms overall goals and objectives.

True

The communication gap can be reduced by managing customer expectations

True

The key to successful pricing is to match the product with the consumer's perception of value.

True

To determine if a new product is commercially viable, a firm can conduct pre-market testing

True

When purchasing a mobile phone, the product you were buying is more than just the phone

True

Brands that have developed loyal customers have a higher price elasticity of demand.

false

For the average college student, a retirement account would be a shopping product.

false

If Microsoft decided to sell mobile phones under the Xbox brand (which it uses for its gaming systems), this would be an example of a line extension.

false

In training service providers, service quality goals should be general to allow for the various needs of consumers.

false

It is best if firms choose one pricing strategy to use for all its products rather than use different methods for pricing

false

Many services marketers use training and standardization to reduce service perishability.

false

Sellers using an EDLP pricing strategy often communicate their strategy through the creative use of a reference price.

false

The expression "3/10, n/30" means that a business must pay 3 percent of the total invoice amount in 10 days, with the remainder due in 30 days.

false

The improvement value method and the cost of ownership method are both cost based pricing methods

false

The service gaps model encourages the systematic examination of all aspects of the product creation process.

false

The three different methods that can help develop pricing strategies are cost based competitor based and profit based

false

a customized carved cedar wood sign for your house is an example of a convenience product

false

at the break-even point, profits are maximized

false

in entertainment licensing, the major risk to licenses is that the brand will become overexposed.

false

on the diffusion of innovation curve, the first group of buyers who want to be the first on the block to have the new product are known as early adopters

false

on the diffusion of innovation curve, the late majority is the final group os buyers who like to avoid change and rely on traditional products until they are no longer available

false

procedural fairness pertains to a customers perception of the benefits he or she received compared with the costs (inconvenience or loss)

false

slotting allowances are used to get retailers to feature a manufacturers product in their advertising and promotional efforts

false

test marketing refers to customers who modify existing products according to their own ideas to suit their specific needs

false

the diffusion of innovation curve follows the following sequence: innovators, early majority, early adapters, late majority, and laggards.

false

the maturity phase of the product life cycle is characterized by greatly reduced competition.

false

when ben asked a few of his regular customers to test his prototype surfboard, he was engaging in alpha testing

false, beta?

For a company like Pepsi-Cola, brand dilution occurs when it sells more product than the competition

false, when they dilute their product

A delivery gap is the difference between the firms service standards and the actual service it provides to customers

true

American Airlines just reduced its fares for summer flights by $100. delta airlines changes its pricing structure and reduces its flights by $100 as well. delta is employing status quo pricing.

true

Because consumers are generally more sensitive to price increases than to price decreases, it is easier to lose current customers with a price increase than it is to gain new customers with a price decrease.

true

Brands enable customers to quickly differentiate one firm or product from another.

true

Cost-based methods do not recognize the role that consumers' or competitors' prices play in the marketplace.

true

Coupons may annoy, alienate, and confuse consumers and therefore do little to increase store loyalty.

true

Cristina sells sports equipment and wants to get customers into her store. She knows from past experience that sales generate customer traffic, particularly when she puts childrens baseball equipment on sale. Cristina may consider a leader pricing strategy

true

Even if products succeed, not all consumers adopt new-to-the-world products at the same time.

true

Firms that primarily sell products view service as a method to maintain a sustainable competitive advantage.

true

Listening to the customer is the first step in service recovery.

true

Price is the only part of the marketing mix that does not generate costs.

true

The most challenging part of applying the product life cycle concept is that managers do not know exactly what shape each products life cycle will take

true

The zone of tolerance refers to the area between customers' expectations regarding their desired service and the minimum level of acceptable service.

true

When Buffalo Bank required all customers to use its online banking services, over 20 percent of their customers closed their accounts. In this scenario, Buffalo Bank's service fell outside customers' zone of tolerance.

true

When a retail store rarely sells deeply discounted or sale products, it is known as "everyday low pricing."

true

When the price of milk goes up, demand does not fall significantly, because people still need to buy milk. However, if the price of T-bone steaks rises beyond a certain point, people will buy fewer of them because they can turn to the many substitutes for this cut of meat. This refers to price elasticity of demand.

true

a high/ low pricing strategy relies on the promotion of sales, which prices are temporarily reduced to encourage purchases.

true

a product is anything that is of value to a consumer and can be offered through a voluntary marketing exchange

true

harry is a loyal coca cola customer. loyal customers like harry require lower marketing expenditures, benefitting businesses like coca cola

true

pricing lining is setting a price floor and a price ceiling for a line of products and then setting price points in between to represent differences in quality

true

the building blocks of service quality are reliability, assurance, tangibles, empathy, and responsiveness.

true

the fact that the apple iPad is easy to try-demo units are available at apple stores as well as other retail stores-is helping it diffuse more quickly.

true

when consumers see their friends using an innovation, it often persuades them to try it too

true

when jacky selects a case of sprite at the grocery store for her party, she is attracted by the holiday themed box featuring green and white bells. What jacky is seeing is referred tp as the secondary package.

true