Marketing 340 - Quiz 6

Oscar Rodriguez recently tried the new vegan products from Meatless Farms. Only a few of Oscar's friends tried the meat-alternative products before he did. Most of his friend wanted to hear about Oscar's experience before trying for themselves. According to the Diffusion of Innovation. Oscar is a(n) __________ in this product category. Early adopter Innovator Early majority Late majority Laggard

Early adopter

A demand curve shows the relationship between income and demand. True False

False

At the break-even point, profits are maximized. True False

False

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

False

When Toyota introduced hybrid cars, there were waiting lists to buy them. Then Honda and a few other manufacturers entered the market, shifting the product life cycle for hybrid cars into the __________ stage of the product life cycle. Growth Introduction Leveling Decline Maturity

Growth

Personal trainer and ShapeUp! gym owner Veronica Jackson searches the internet for any information she can get on her competitors. Veronica noticed that several fitness clubs have lowered the prices for the holiday season and she decided to do the same. Veronica is using a _______ pricing strategy. Status quo Maximizing profits Target profit Premium Skimming

Status quo

When Crest Toothpaste comes up with a new toothpaste flavor, it often introduces the product in select regional markets before rolling out the product worldwide. When the company does this, it is engaged in Test marketing Pretesting Product launch Concept testing Alpha testing

Test marketing

Which of the following would be least sensitive to price increases? The prescription lenses for eyeglasses Foster Grant designer sunglasses frames Nike Air athletic shoes ShapeUp! fitness gym membership Tickets to ISU football games

The prescription lenses for eyeglasses

Cristina created a virtual prototype of her new line of swimwear on a website to show to consumers. Cristina will ask consumers what they think of the clothing. Which is the most important question that Cristina should ask? What retailers should be used to sell the swimwear? Will consumers purchase the swimwear if it becomes available? What wholesale price should be charged? What promotional plan will work best? In which season should we introduce the product?

Will consumers purchase the swimwear if it becomes available?

When CarMax promises a "no-haggle" pricing structure, it exhibits __________________ because it provides additional value to potential used car buyers by making the process simple and easy. a customer orientation a status-quo pricing structure competitive parity a competitor orientation consumer parity

a customer orientation

In many cases, pioneers lose their market lead and initial market share to imitators who capitalize on the pioneers' weaknesses. create similar products with reduced value to consumers. utilize alpha-beta testing. ignore patents and copyrights. target late maturity consumers.

capitalize on the pioneers' weaknesses.

Laptop computers, personal digital assistants, and cellular phones were all readily accepted and diffused in U.S. markets where business and personal lifestyles tend to be faster-paced, compared to many other areas in the world. These products offered ________ with consumers' needs and priorities. relative positioning compatibility observability complexity trialability

compatibility

Marketers spend millions of dollars annually trying to create or reinforce brand loyalty. Brand loyalty changes the demand curve for the firm's products by decreasing the price elasticity of demand. making demand more oligopolistic and less monopolistic. increasing the income effect. reducing fixed costs and increasing the gray marketing effect. shifting the market from a monopoly to pure competition.

decreasing the price elasticity of demand.

What type of pricing will Kroger be employing with its new pricing system? competitive parity prestiege pricing premium pricing status quo pricing dynamic pricing all of the above

dynamic pricing

All of the following are reasons for the high failure rate of new products except failing to introduce lower-priced alternatives. overextending a firm's abilities. targeting the wrong segment. neglecting to do appropriate product testing. failing to assess the market properly.

failing to introduce lower-priced alternatives.

Which of the following is least likely to be a source of ideas for new products? R&D efforts licensing agreements consumer research geodemographic segmentation brainstorming

geodemographic segmentation

Personal trainer and ShapeUp! gym owner Veronica Jackson is expanding services to attract more customers. Veronica is leaning toward charging a higher prices than her competitors to help demonstrate that ShapeUp! programs are a high-quality product. Veronica is considering premium pricing status quo pricing competitive parity pricing differential pricing market leader pricing

premium pricing

Zappos.com, an online shoe store, offers an easy, no-hassle return procedure. This relates to the ________ of its products. relative advantage compatibility observability complexity trialability

trialability

_________ is the process by which ideas are transformed into new products and services that will help firms grow. Beta testing Concept testing Innovation Reverse engineering Competition

Innovation

Katie Murphy is obsessed with Apple products. She is constantly searching the internet for information about new product releases. Katie has been known to spend the night waiting in line so she could purchase a new Apple product before any of her friends. According to the Diffusion of Innovation, Katie is a(n) Innovator Early Majority Early adopter Late majority Laggard

Innovator

Crest toothpaste, along with most consumer packaged goods at your local grocery store, are in the maturity stage of the product life cycle. All of the following are characteristics of the maturity stage EXCEPT Laggards are a major focus of marketing efforts Price competition is intense Marketing costs increase as firms defend their market share The market may become saturated because nearly all potential customers have adopted the product To increase the customer base, firms consider entry into new markets and new market segments.

Laggards are a major focus of marketing efforts

Personal trainer and ShapeUp! gym owner Veronica Jackson rarely worries about the actual costs of providing her programs. In her Principles of Marketing class at Iowa State University, Veronica learned that, in general, prices should not be based on costs because consumers make their purchase decisions based on perceived value. consumers are cost-conscious. producers rarely know what their costs are. producers need to avoid creating a cost competitive parity debate. customers are always right.

consumers make their purchase decisions based on perceived value.

If the demand for a product increases, the demand for the complementary product will decrease. increase. stay the same. become more elastic. become more inelastic.

increase.

Many years ago Honda's Accord and Ford's Taurus were the two top-selling cars in the United States. As the year was coming to an end, Ford cut the price of the Taurus, hoping to outsell the Accord and allow Ford to claim that "Taurus is the best-selling car in America." Ford was using a ________ pricing strategy. maximizing profits competitor orientation sales orientation status quo customer orientation

sales orientation

Cross-price elasticity is the percentage change in quantity of a product demanded divided by the percentage change in its price. percentage change in quantity demanded of Product A compared to the percentage change in price of Product B. change in price of Product A divided by change in quantity demanded for Product B. change in quantity of a product demanded divided by the change in its price. change in quantity of a product demanded divided by the change in its elasticity.

percentage change in quantity demanded of Product A compared to the percentage change in price of Product B.

If a 1 percent decrease in price results in less than a 1 percent increase in the quantity demanded, demand is cross-price elastic. price inelastic. price elastic. status quo elastic. derived demand inelastic.

price inelastic.

In the United States, most consumer packaged goods found in grocery and discount stores are already in the __________ stage of the product life cycle. growth pioneer introduction decline maturity

maturity

When Veronica Jackson set up her ShapeUp! business, she used penetration pricing in order to gain customers quickly in the very competitive market of personal fitness training. Now that Veronica is established, she is reluctant to raise her prices because she knows that when more choices exist in the market, the more sensitive consumers will be to changes in the price of a particular product. the more likely the market will be characterized as an oligopoly. the easier it will be to utilize a target profit pricing strategy. the greater the income elasticity for each product. the lower the price elasticity for each product.

the more sensitive consumers will be to changes in the price of a particular product.

The diffusion of innovation theory focuses on the geographic boundaries of innovation. the relationship between pioneer brands and imitators. the psychological traits of innovators. the rate at which consumers are likely to adopt a new product or service. the way a product moves through the product life cycle.

the rate at which consumers are likely to adopt a new product or service.

Traditional demand curve economic theory is used by marketers to understand ______________ in the five Cs of pricing. competitors channel members cost customers company objectives

customers

Tess is the marketing manager for a fast-food restaurant chain. She uses a target return pricing strategy because her firm's primary objective is to increase profits. increase sales. decrease competition. build customer satisfaction. broaden the product line.

increase profits.

A ________ strategy involves accurately measuring all the factors needed to predict sales and profits at various price levels, so that the price level that produces the highest return can be chosen. sales orientation target profit target return status quo maximizing profits

maximizing profits

What type of competition occurs when there are many firms competing for customers in a given market but their products are differentiated? monopolistic competition monopoly competition pure competition predatory competition oligopolistic competition

monopolistic competition

All of the following groups are included in the diffusion of innovation curve except innovators. nonadopters. late majority. early majority. early adopters.

nonadopters.

If a new product concept gets positive evaluations from potential customers during concept testing, the next step for a firm is market testing. product development. brainstorming. reverse engineering. launching of the product.

product development.

What price competitive level would be indicated when the price is usually set according to the laws of supply and demand? oligopolistic competition monopolistic competition pure competition channel competition monopoly competition

pure competition

Toyota was the first automobile company to mass produce a hybrid car. When the Prius was in the introductory stage, Toyota knew that sales would be low and profits nonexistent, but the Prius would attract innovators. sales would rise quickly, profits would jump, and even laggards would buy the Prius. sales would level off, profits would decline, and late majority consumers would be attracted to his product. sales would level off, profits would decline, and innovators would be attracted to the product. sales would be low, profits would be high, and all potential would jump at the opportunity to buy the Puris.

sales would be low and profits nonexistent, but the Prius would attract innovators.

All of the following are included in the four product life cycle stages except introduction. stagnation. maturity. growth. decline.

stagnation.

All of the following would be part of the launch of a new product except determining the marketing budget for the first year of the product. finalizing the marketing mix variables. determining the price for the product. making decisions regarding positioning the product. starting to make preliminary decisions about the target market.

starting to make preliminary decisions about the target market.

Sales of national brands of orange juice tend to increase when the economy is doing well, while sales of generic orange juice increase when the economy is not doing well. This is an example of how ________ impacts demand for products. dynamic pricing the price inelasticity coefficient the income effect the target return effect cross-price elasticity

the income effect

Eddie was known for driving 30 miles just to save a dollar on the price of his favorite beverage. Eddie perceived price as ________ for a good or service, while most consumers recognize price as the ________ made to acquire a good or service. the money paid; overall sacrifice a variable cost; fixed cost a fixed cost; variable payment the overall sacrifice; monetary payment the break-even amount; total cost

the money paid; overall sacrifice

The observation that consumers are generally more sensitive to price increases than to price decreases suggests that most consumers cannot remember what price they paid the last time they bought a particular product. it is easier to lose customers with a price increase than to gain customers with a price decrease. most consumers would rather skip buying a product than pay a higher price. most consumers are emotionally attached to their favorite products and are unlikely to change, even if the price changes. firms gain more customers with price decreases than they lose with price increases.

it is easier to lose customers with a price increase than to gain customers with a price decrease.

Many restaurants roll out new ideas first in Orlando, Florida, a location that attracts a vast range of diverse tourists and thus might offer insights into what various consumer groups will like. This is an example of target marketing. test marketing. product marketing. product launching. premarket testing.

test marketing.

Unlike product, promotion, or place, price is the only part of the marketing mix that offers the opportunity for an oligopoly. that is subject to gray market manipulation. that leads to competition. that generates revenue. that is determined by the consumer.

that generates revenue.

When firms set prices similar to those of competitors, they are following a strategy of me-too pricing. copycat pricing. competitive parity. market-broadening pricing. industry-standard pricing.

competitive parity.

The Coffee Express company is located in a business district with few customers on the weekend. To attract customers on Saturday and Sundays, it reduces its prices on these two days. This is an example of dynamic pricing. the substitution effect. the income effect. the target return effect. cross-price elasticity.

dynamic pricing.

The CEO of David's firm just came back from a business seminar. He called David into his office and stated, "I just found out about the product life cycle curve in a strategy seminar. This is a great tool. I want you to drop whatever you're doing and inventory all of our products to determine exactly where they are in the product life cycle." David needs to think fast for a good answer because he knows that the product life cycle is not a useful concept. it is often impossible to identify with precision where a product is in the product life cycle. the product life cycle is not helpful in companies like his that pay attention to diffusion of innovation. the idea has been discredited by recent research. the product life cycle works only for certain types of firms.

it is often impossible to identify with precision where a product is in the product life cycle.

Toyota's VP of Marketing, Adam Nguyen, has been working closely with the company's research and development team on a new concept for a lightweight electric scooter that can be easily folded and carried inside a building or on public transportation. Toyota is currently engaged in concept testing. The most important question during this phase of product development pertains to the respondent's purchase intentions if the product were made available. marketing and advertising costs. the cost to manufacture the product. the price of the final product. the cost of research and development.

the respondent's purchase intentions if the product were made available.

As soon as she saw one, Veronica Jackson wanted a flat-screen television, but she was worried about making the wrong choice. She waited until there were alternatives in the market with lower prices and improved quality. According to the Diffusion of Innovation, Veronica is part of the __________ . Early majority Innovator Laggard Late majority Early adopter

Early majority

Pioneer or breakthrough products will likely result in late maturity buying. can change consumer preferences. incorporate reverse engineering outputs. require the use of concept testing services. must be geographically centered.

can change consumer preferences.