BA3305 Entre - Chp 9

Which of the following will be an example of odd-even pricing? A. Buy a T-shirt for $19.89. B. Buy four sandwiches and take the fifth one for free. C. For purchases above $20 get a gift worth $5. D. Market price is $25 and our price is $22.

A. Buy a T-shirt for $19.89.

Which of the following terms refers to the amount of profit an entrepreneur incurs, usually stated as a percentage of the total price? A. Capital B. Margin C. Debt D. Harvest

B. Margin

Which of the following stages of new product development typically involves specifying the details of each idea's technological feasibility, its cost, how it can be marketed, and its market potential? A. Idea generation B. Market introduction C. Idea evaluation D. Test marketing

C. Idea evaluation

_____ refers to the highest price of a product that will produce the desired level of sales in the intended market. A. Marginal price B. External reference price C. Optimum price D. Reserve price

C. Optimum price

Given the fact that there are several substitutes available for Tinkle Toys' products, these Tinkle Toys' products are most likely to fall under the category of _____. A. inelastic products B. pure services C. hybrid goods D. elastic products

D. elastic products

_____ is best described as the process of making a new product available to consumers. A. Commercialization B. Factoring C. Pilot testing D. Liquidation

A. Commercialization

Ivory Isles Resort sets a low base price of $250 for its rooms. This appears to be a great bargain for vacationers looking for resorts in the 5-star segment. However, the customers have to pay additional charges for using services such as the casino, spa, hot pool, gym, and the lounge. According to this information, which of the following pricing strategies is used by Ivory Isles? A. Captive pricing B. Odd-even pricing C. Going-rate pricing D. Multipack pricing

A. Captive pricing

_____ is a price-setting method where an amount is added to the cost of a product to set the retail price and provide a profit. A. Markup pricing B. Marginal pricing C. Internal reference pricing D. Differential pricing

A. Markup pricing

Which of the following pricing practices is the most inappropriate? A. Pricing a product, advertised for high quality and prestige, lower than the competition B. Lowering prices during happy hour, hence discriminating against those who work during that time period C. Lowering prices to capture maximum market share as the patent for a product approaches its termination D. Pricing a product low when a business is operating below capacity

A. Pricing a product, advertised for high quality and prestige, lower than the competition

Purchasing a car with a warranty is most likely to be an example of a _____. A. pure good B. good-dominated product C. pure service D. hybrid good

B. good-dominated product

Which of the following is most likely to be an example for an elastic product? A. Staple foods B. Gasoline C. T-shirts D. Basic utilities

C. T-shirts

Which of the following statements is true about elastic products? A. An elastic product does not have many substitutes or alternatives. B. A change in price of elastic products makes very little difference in quantity purchased. C. During economic bad times businesses that sell inelastic products close down more often than those that sell elastic products. D. Customers will respond to price increases for elastic products much more negatively than for inelastic products.

D. Customers will respond to price increases for elastic products much more negatively than for inelastic products.

The primary goal of penetration pricing is to: A. steal competitors' market share. B. imply that a product is a status symbol. C. reward repeat and loyal customers. D. attract the low-, mid-, and high-end customers.

A. steal competitors' market share.

An item's capability of being touched, seen, tasted, or felt is called _____. A. tangibility B. legitimacy C. mutuality D. perishability

A. tangibility

_____ is the strategy of combining two or more products in one unit and pricing it less than if the units were sold separately. A. Skimming B. Bundling C. Premium pricing D. Price signaling

B. Bundling

_____ refers to setting a price above that of the competition so as to indicate a higher quality or that a product is a status symbol. A. Penetration pricing B. Premium pricing C. Limit pricing D. Bait pricing

B. Premium pricing

Which of the following statements is true of price skimming? A. It should be followed when there are many substitutes for a product. B. It should be typically applied at the decline stage of the product life cycle. C. It is not a long-term strategy for businesses to follow. D. It helps establish a barrier to the entry of competitors.

C. It is not a long-term strategy for businesses to follow.

Which of the following statements is true about pure services? A. They are separable from consumption. B. They are tangible. C. They are heterogeneous. D. They are nonperishable.

C. They are heterogeneous

Pure goods are more _____ than pure services. A. perishable B. inconsistent C. inseparable D. homogenous

D. homogenous

Penetration pricing refers to: A. charging the absolute highest possible price due to inelastic demand. B. charging different prices to different groups to attract a different demographic. C. setting a low price in order to get market share. D. setting a high price to imply that a product is a status symbol.

C. setting a low price in order to get market share.

Flying Ross Inc., a maker of world-renowned wristwatches, makes watches for three different customer segments. Timepieces under the Gold series are priced extremely high to cater to the high-end market, watches under the Pioneer series cater to the mid-end market, and those under the Marvella series are priced low in order to capture the low-end market. This strategy of setting three price points is typically referred to as _____. A. partitioned pricing B. captive pricing C. price gouging D. price lining

D. price lining

Turquoise Innovations Inc. has introduced a unique software that has no competition in the market. The company has incurred huge research and development costs in order to commercialize this software. Several business firms have been waiting for the release of this product as it saves their cost of outsourcing finance functions. Hence, the best pricing strategy this product will be _____. A. penetration pricing B. going rate pricing C. limit pricing D. price skimming

D. price skimming

Raven created the sample versions of her toy products and tested them in kindergartens and play parks. These sample versions of the toys are referred to as _____. A. hybrids B. pure goods C. me-too products D. prototypes

D. prototypes

Which of the following statements best describes the process of idea screening in new product development? A. It involves specifying the details of each idea's technological feasibility, its cost, how it can be marketed, and its market potential. B. It is the process of selecting the most promising ideas to be further evaluated for feasibility. C. It involves creating the first versions of products called prototypes which are used in further consumer testing. D. It is the process of mass producing a new product so that consumers can avail it.

B. It is the process of selecting the most promising ideas to be further evaluated for feasibility.

Which of the following statements is true about products? A. People such as political candidates and celebrities cannot be considered as products. B. Most of the products sold today are combinations of both goods and services. C. Products in terms of goods are generally less homogeneous than services. D. Products in terms of goods are more inseparable from their providers than services.

B. Most of the products sold today are combinations of both goods and services.

The prices of chewing gums, candy bars are traditionally fixed at 50 cents; this limits the industry from raising its prices beyond a certain level. This pricing is an example of _____. A. odd-even pricing B. customary pricing C. premium pricing D. reference pricing

B. customary pricing

The strategy of pricing toward the low end of the competition in order to take market share from the competition becomes most popular as a product reaches the _____ phase of the product life cycle. A. growth B. maturity C. decline D. introduction

B. maturity

In bonus pack pricing strategy: A. lower prices are charged at certain times to encourage customers to come during slack periods. B. more than one unit of the same product are combined and sold at a low price. C. products are sold at different price points to attract the low-, mid-, and high-end customers. D. the base item is sold at a low price and the necessary supplies are sold for a high price.

B. more than one unit of the same product are combined and sold at a low price.

Happy hours in amusement parks, movies, and restaurants are examples of _____. A. prestige pricing B. off-peak pricing C. loyalty programs D. random discounting

B. off-peak pricing

While developing a new product, in the product development stage, the first versions of products are used in further consumer testing. These first versions of products are called _____. A. pure goods B. prototypes C. me-too products D. hybrids

B. prototypes

Shop Sure Inc. sells five bars of bathing soap for the price of four and three bottles of room freshener for the price of two. This is an example of _____. A. price skimming B. premium pricing C. bonus-pack pricing D. price signaling

C. bonus-pack pricing

The group of people on which a marketer focuses promotion and sales efforts is called a _____. A. focus group B. target market C. strategic group D. sales pitch

B. target market

The entire bundle of products, services, and meanings of one's offering; including extras like service, warranty, or delivery, as well as what the product means to the customer refers to _____. A. augmented product B. total product C. hybrid product D. pure good

B. total product

_____ is described as setting the price for an item relatively low and then charging much higher prices for the expendables it uses. A. Bait pricing B. External reference pricing C. Captive pricing D. Odd-even pricing

C. Captive pricing

Which of the following statements is true about coupons? A. Coupons are delivered more through the Internet than in newspapers. B. Coupons fail to serve an advertising purpose. C. Coupons help customers remember the promoted product favorably. D. Coupons are ineffective in attracting people to try new products.

C. Coupons help customers remember the promoted product favorably.

Raven has been researching for product ideas by interacting with children, young mothers, and by carefully studying the competitors' toys. This has helped her generate several ideas. Which of the following is most likely to be the next step for Raven? A. Test marketing B. Product development C. Idea screening D. Commercialization

C. Idea screening

Which of the following pricing strategies is considered the most aggressive from the competition point of view? A. Offering a sale on merchandise B. Offering a rebate or a discount coupon to promote a product C. Indulging in a price war D. Pricing a product higher than the industry average

C. Indulging in a price war

Blue Moss Inc. ensures that its detergent brand "Pure Plus" is always placed next to competitors' detergents in supermarkets. This is a strategy the company uses to imply that the same quality product is available at a better bargain. Which of the following pricing strategies is being used by Blue Moss Inc.? A. Price signaling B. Price skimming C. Reference pricing D. Customary pricing

C. Reference pricing

The research and development team of Leonide Inc. has generated five different product ideas. All five ideas are being rated against each other on their characteristics such as product uniqueness, idea profitability, protectable intellectual property, and product team quality. Based on their ranking in this stage, only three ideas will make it to the immediate next step which will be the stage of _____. A. idea generation B. commercialization C. feasibility study D. market introduction

C. feasibility study

The first time Jena visited Blue Corals Inn, a restaurant in her neighborhood, she was delighted with the food and service quality. However, the next time she dined at the same place, the restaurant's food and service seemed to have lost its quality. This scenario best illustrates the _____ characteristic of services. A. perishability B. tangibility C. heterogeneity D. absorptivity

C. heterogeneity

In new product development process, the product development stage typically involves: A. testing the feasibility of product ideas. B. creating a marketing plan for the final product. C. introducing product prototypes to test markets. D. commercializing the new product.

C. introducing product prototypes to test markets.

Harry ordered a television online for $800, he was asked to pay $100 toward shipping charges, $50 as installation charges, and another $100 for extended warranty. This example best illustrates _____. A. bait pricing B. internal reference pricing C. partitioned pricing D. multipack pricing

C. partitioned pricing

_____ is typically a source for consumers' internal reference price. A. Researching on the Internet B. Taking advice from friends and family C. Looking at competitive ads D. Recollecting previous shopping experiences

D. Recollecting previous shopping experiences

Which of the following is the best example for random discounting? A. Christmas sale B. Back-to-school sale C. Happy hours in movies D. Sale on select merchandise

D. Sale on select merchandise

Shoe Pica Inc., a retailer of shoes, advertises that it is selling a particular type of jogging shoes at a very low price of $50. These shoes are kept at the end of the store and before reaching those shoes, customers have to walk by all the other shoes that have many more features and better quality. Several times, this causes the consumers to buy other better brands even though they are costlier that the one advertised. This is a typical example for _____. A. captive pricing B. partitioned pricing C. price lining D. bait pricing

D. bait pricing

At Sea Shell Diner, a burger costs $4, and a pack of two cookies costs $2. The diner also offers a combo meal consisting of the burger and cookies at $5. This pricing strategy is an example of _____. A. prestige pricing B. price lining C. off-peak pricing D. bundling

D. bundling

A(n) _____ is best defined as a product for which there are few substitutes and for which a change in price makes very little difference in quantity purchased. A. pure good B. augmented product C. prototype D. inelastic product

D. inelastic product

Which of the following is most likely to be an example of a good-dominated product? A. Purchasing a sewing machine with a warranty B. Leasing a sewing machine C. Hiring the services of a tailor D. Renting a sewing machine

A. Purchasing a sewing machine with a warranty

_____ is best described as the process of selling prototype of a product in either a real or simulated market environment. A. Test marketing B. Moonlighting C. Bootstrapping D. Commercialization

A. Test marketing

Soul pine café issues a card to each new customer on which every purchase is stamped, and when a customer completes nine purchases, he or she gets the tenth service for free. This is a typical example of _____. A. a loyalty program B. price lining C. price bundling D. going rate pricing

A. a loyalty program

By adopting the pricing technique of loss leaders, a firm most likely aims to: A. attract traffic toward its products. B. imply superior quality to a competitor. C. signal that its products are a status symbol. D. reward repeat customers.

A. attract traffic toward its products.

ZestOne Technologies has launched a series of tablet computers that are similar to a competitor's product that already exists in the market. Such products are typically termed as _____. A. me-too products B. prototypes C. augmented products D. complementary goods

A. me-too products

Charging lower prices at certain times to encourage customers to come during slack periods is known as _____. A. off-peak pricing B. price gouging C. price lining D. odd-even pricing

A. off-peak pricing

If the toy products are initially sold at an extremely low price that just covers the costs in order to get competitors' market share, then this pricing strategy would be known as _____. A. penetration pricing B. price signaling C. price skimming D. partitioned pricing

A. penetration pricing

A service typically exhibits the characteristic of _____ because if it is not used when offered, it cannot be saved for later use. A. perishability B. tangibility C. absorptivity D. homogeneity

A. perishability

The core product typically includes: A. the basic description of what a company or a product does. B. features of a product that differentiates it from competition. C. what a product means to the customers. D. value and cost benefits customers incur from a product.

A. the basic description of what a company or a product does.

Which of the following is the biggest problem with simulated test markets? A. They cannot be computer-generated. B. They make it easy for competitors to "steal" one's ideas. C. They do not always reflect actual buying behavior. D. They can be used only in the commercialization stage and not in the product development stage.

C. They do not always reflect actual buying behavior

A(n) _____ typically means the core product plus features that tend to differentiate the product from competition. A. pure good B. hybrid product C. augmented product D. me-too product

C. augmented product

Which of the following terms refers to an estimation of what a price should be based on information gathered by a customer from sources such as advice, advertisements, or comparison shopping? A. Mark-up price B. Budget-based price C. Augmented price D. External reference price

D. External reference price

Which of the following is the first stage of the new product development process? A. Test marketing B. Commercialization C. Feasibility study D. Idea generation

D. Idea generation