MKT 3501 EXAM 2 QUESTIONS

Which of the following is true with regard to price?

Price is the sum of all the values that customers give up to gain the benefits of having the product.

Which of the following is a conventional consumer marketing channel?

Producer to wholesaler to retailer to end consumer.

A _________ is a group of products that are closely related because they function in a simialr manner, are sold to the same customer groups, are marketed through the same type of outlets, or fall within given price ranges.

Product line

Proton Corp. is an automobile manufacturer known for producing efficient, durable, and low-priced cars. Recently, the company launched a new range of luxury cars to broaden its market appeal and to add prestige to its existing line of cars. This is an example of ________.

Product line stretching

Manufacturers must comply with specific laws regarding _____________.

Product quality and safety

What type of pricing is being used when a company temporarily prices its products below the list price to create buying excitement and urgency?

Promotional pricing

Which of the following is true of price changes?

A drop in price can adversely affect how consumers view the brand.

Which of the following refers to the course that a product's sales and profits take over it's lifetime?

A product life cycle

Which of the following companies uses a direct marketing channel?

Holly Wreaths, a store that sells Christmas ornaments to customers via its online click-to-order catalogs.

Which term refers to prices that buyers carry in their minds and check with when they look at a given product?

Reference prices

Tristan and Juliet, a newly married couple who intend to go to Egypt for their honeymoon, bought a Europe travel package on Jizo Inc., an online travel site. As they have never seen Europe or used the services of Jizo before, they were largely dependent on other customers' feedback and signals for service quality. Which of the following characteristics of service is highlighted in this instance?

Service intangibility

________ are less frequently purchased consumer products and services that customers compare carefully on suitability, quality, price, and style.

Shopping products

The first step in designing support services is to __________.

Survey customers to assess the value of current services and obtain ideas for new services.

As a manufacturer increases the price, _______________.

The break-even volume drops

Why are customers often considered the most important sources of new product ideas?

The company can analyze customer questions and complaints to find new products that better solve consumer problems.

Why is cost-plus pricing most likely impractical?

The method ignores demand and competitor prices.

Which of the following is true of value-based pricing?

The targeted value and price drive decisions about what costs can be incurred and the resulting product design

Which of the following is true of channel members?

They play specialized roles in the channel

Herbie Inc., a firm manufacturing sandwich makers, has fixed costs of $250,000, variable costs of $20 per unit of output, and expected unit sales of 50,000 units. What is the unit cost of a sandwich maker manufactured by Herbie?

$25

A company faces fixed costs of $100,000, and variable costs of $8 per unit. It plans to directly sell its product in the market for $12. How many units must it produce and sell to break even?

25,000

Symmonds Inc., a company maufacturing breakfast cereals, has extended its special Crispo cereal brand into a full line of breakfast cereals plus protein shakes, fruit and sandwich spreads, butter, and doughnuts. This is an example of _____________.

Brand extension

Companies with lower costs ___________.

Can set lower prices that result in smaller margins but greater sales and profits.

Which of the following is an advantage of co-branding?

Co-branding allows a company to expand its existing brand into a category it might otherwise have difficulty entering alone.

Which of the following is a disadvantage of adding new channels in a multichannel distribution system?

Decreasing control over the system

As production moves up, the average cost per unit decreases because ___________.

Fixed costs are spread over more units

The greater the number of channel levels in the marketing channel, the ____________.

Greater channel complexity

Which of the following stages of the PLC is characterized with the same level or slightly higher level of promotional expenditures in an attempt to respond to increasing competition?

Growth

If demand increases from 1000 units to 1200 units when price is decreased from $10 to $9, the demand is ___________.

Inelastic

Which of the following stages of PLC is characterized with high promotional expenditures that result from an effort to create consumer awareness?

Introduction

Which of the following is true of price skimming?

It can be profitably used when the product's quality and image support its price.

Which of the following is true of the exclusive distrubution strategy?

It helps promote a brand's luxury image

Which of the following is true of FOB-origin pricing?

It is an expensive alternative for customers in distant locations

Which of the following statements about break-even analysis is true?

It is calculated by using variable costs, the unit price, and fixed costs.

Which of the following is true of market-penetration pricing?

It results in drawing in large numbers of buyers quickly, winning a large market share.

Which of the following statements best explains why idea screening may be the most important step of the new product development?

It saves the company money in product development costs by going ahead with only the product ideas that are likely to be profitable.

A product's ________ identifies the product or brand, describes several things about the product, and promotes the brand.

Label

Which stage in the PLC normally lasts longest and poses strong challenges to marketing managers?

Maturity

Which of the following companies uses product line pricing?

Mobile Point, which launched a range of cell phone models, each priced according to its features.

According to the service profit chain, superior internal service quality results in ___________.

More satisfied, loyal, and hardworking employees

Atlas Imports and Exports sells products directly to consumers via the Atlas Web site, and through local retailers as well. Which of the following is evident here?

Multichannel distribution system

Service _________ means that services cannot be stored for later use or sale.

Perishability

Product planners need to consider products and services on three levels. At the second level, product planners must ____________.

Turn the core benefit into an actual product

Which of the following is true with regard to pure competition?

Under pure competition, no single buyer or seller has much effect on the going market price.

In which of the following geographic pricing strategies would customers located close to the company pay the same amount as customers in distant locations?

Uniform-delivered pricing

Stylize, Inc. opened an online store that triggered disagreements between headquarters and the firm's exclusive dealers. This type of a disagreement is known as a(n) ________ conflict.

Vertical

Marketing mix planning begins with __________.

building an offering that brings value to target customers

What sets the ceiling for product prices?

customer perceptions of the product's value

Underpriced products ___________.

produce less revenue than they would if they were priced at the level of perceived value

Which of the following would be considered predatory pricing?

A company that prices below cost to drive out competitors

Which of the following is true of the demand curve?

A demand curve shows the number of units the market will buy in a given time period at different prices that might be changed.