Marketing Exam 4

T/F A firm that competes on a price basis is unable to change prices fequently

False

T/F A run-out approach to product deletion let's the product decline without changing the marketing strategy

False

T/F Concept testing gives reliable feedback, but at a relatively high cost

False

T/F New products are classified solely as innovations that have never been sold by any organization

False

T/F Profits for a firm are computed as follows: Profits= Total Revenue - Fixed Costs

False

T/F Test marketing should be conducted when a product has been given a low probability of success

False

T/F The core product element of the total product can include installation, delivery, training, and financing

False

T/F The marketing mix should be left alone during the maturity stage of the product life cycle; tampering with it may bring an early death to the product

False

T/F Profits decline in the maturity stage, largely because of increased competition

True

T/F The first adopters of a product are the innovators

True

T/F The major drawback in using aesthetic modifications is that their value is determined subjectively

True

T/F The product development stage determines the technical feasibility of producing the new product

True

T/F The point at which marginal revenue equals marginal cost is the breakeven point

False

T/F A brand name is the part of the brand that is spoken

True

T/F The purpose of the pricing concept is to quantify and express the value of items in a market exchange

True

T/F Costs are a major issue when establishing price

True

T/F The concept of product quality is the same from consumer to consumer and from consumer markets to organizational markets

False

T/F Customers always interpret a higher price to mean higher quality

False

T/F Delivery, installation, financing, repair, warranties, and guarantees are all examples of product features

False

T/F Disruptive innovations involve completely new technologies

False

The three major ways to modify a product include a. aesthetic, quality, and functional changes b. extensions, generations, and upgrades c. color, size, and quality modifications d. styling, product features, and product design e. quality, quantity, and design

a. aesthetic, quality, and functional changes

A product mix is best described as a. all products offered by a firm b. product, distribution, promotion, and price c. many products sold by one firms d. all products of a particular type e. a group of closely related products that are considered a unit because of market, technical, or end-use considerations

a. all products offered by a firm

Marianna tells Rajesh that she likes his team's idea about a new three-lace running shoe but wants him to put together some figures regarding anticipated sales, costs, and resulting profits. She is asking Rajesh to proceed to which stage of the new-product development process? a. idea generation b. business analysis c. commercialization d. test marketing e. screening

b. business analysis

Which of the following products is most likely to have an inverted C-shaped demand curve? a. visit to the dentist b. eternity perfume c. starbucks coffee d. pillsbury cake mix e. ford escape

b. eternity perfume

One advantage of nonprice competition is that a. a firm can react quickly to competitive efforts b. market share becomes less important c. a firm can build customer loyalty d. marketing efforts are completely eliminated e. pricing is no longer a factor

c. a firm can build customer loyalty

A product line is defined as a. products that can be designated as a unique offering among the organization's products b. products that an organization makes available to consumers c. a group of closely related products that are considered a unit because of marketing, technical, or end-use considerations d. a specific group of products that are offered to the market e. products that are sold by the same firm or a division of a firm

c. a group of closely related products that are considered a unit because of marketing, technical, or end-use considerations

Louis is reading the online report of the tuition and fees he owes for this semester of college. Since he has signed up for online banking, he pays the amount immediately. The amount Louis just paid is considered to be a. his expenses b. his charges c. his bill d. the price e. the exchange valuations

d. the price

_____ refers to how a product is conceived, planned, and produced a. product differentiation b. level of quality c. product positioning d. product features e. product design

e. product design

The major drawback to using aesthetic modification is......

that the value of the modification is determined subjectively

At what point does a firm maximize profit?

the point at which marginal cost equals marginal revenue

T/F A service is intangible and is the result of the application of human or mechanical efforts to people or objects

True

T/F Advertising used in the decline stage may prolong the life of the product

True

T/F Barter is the oldest form of exchange

True

T/F Brand and product managers operate cross-functionally

True

Of the following choices, which would be the easiest brand name to legally protect? a. Tarzink Yogurt b. Learn and Grow Daycare c. Scout Camping Supplies d. Sullivan Water Filtering Systems e. Western County Distributors

a. Tarzink Yogurt

In which stage of the product life cycle do profits begin to decrease? a. introduction b. growth c. maturity d. decline e. recovery

b. growth

All of the following are major steps in developing new products except.....

evaluation of competitors efforts

When Cameron was visiting family in Missouri, he ate a flavor at Boulder Canyon Kettle Chips that he had never seen before. When he returned home to Virginia, he could not find the flavor in any store. Which of the following reasons most likely explains why he could not find the flavor at home?

he was visiting a city being used as a Boulder Canyon's test market

The test marketing stage......

is a sample launching of the entire marketing mix

T/F Marketers have little influence over shaping consumers' concepts or perceptions

False

T/F Concept testing presents a small sample of potential buyers with a trial version of the new product to determine their initial reactions

False

T/F During the growth stage, promotion costs rise as a percentage of total sales

False

T/F Fixed costs vary with the number of units produced or sold

False

T/F The phase-out approach to product deletion involves a process of continuous price increases to make as much profit as possible before the product is finally priced out of existence

False

T/F The two major product categories are business and institutional

False

T/F Trial is the first stage of the product adoption process

False

T/F Venture team members usually come from the same functional areas within the firm

False

T/F A customer looking for the lowest price on a mattress without concern for the quality of the mattress or the status gained by buying and using a certain brand is a price-conscious customer

True

T/F A product need not be a physical product

True

T/F Business analysis provides a tentative sketch of a product's profitability

True

T/F Change is buyer's attitudes, other components of the marketing mix, and uncontrollable environmental factors can influence demand

True

T/F Changes in buyers' attitudes, other components of the marketing mix, and uncontrollable environmental factors can influence demand

True

T/F Communicating product benefits to consumers is very important in the introduction stage

True

T/F Designing a product that customers perceive as different from competing products is an example of product differentiation

True

T/F During the commercialization phase of a new-product development, plans for a full-scale manufacturing and marketing are refined and settled

True

T/F Factors affecting pricing decisions can include demand, distribution, and the way in which the product is promoted

True

T/F For most products, the quantity demanded goes up as the price goes down

True

T/F Functional modifications usually require that the product be redesigned

True

T/F Nonprice competition allows a company to increase its brands unit sales through means other than changing the brands price

True

T/F Price cuts are typical in a product's growth stage

True

T/F Price is the most easily adjusted ingredient in the marketing mix

True

T/F Process materials are used directly in the production of products

True

The jolly green giant used by the Green Giant Company facilitates the development of a. brand associations b. brand quality c. product preference d. brand loyalty e. product equity

a. brand associations

Although they become part of a larger product, _____ can often be easily identified and distinguished on the larger product a. component parts b. accessory parts c. raw materials d. process materials e. MRO supplies

a. component parts

Three major ways in which marketers engage in product differentiation are a. product quality, product design and features, and product support services b. product quality, product support services, and packaging c. product support services, product design and features, and product positioning d. product positioning, product quality, and product management e. product positioning, product design and features, and product promotion

a. product quality, product design and features, and product support services

If Umbro faces a standard demand curve that exists for most products, as it raises the price of its soccer balls, the a. quantity demanded goes down b. demand remains constant c. quantity demanded increases d. demand increases initially, and then drops e. breakeven increases

a. quantity demanded goes down

If Norwegian Cruise Lines increased the price of its seven-day cruise package by 10% and, as a result, experienced a 20% decline in customer bookings, Norwegian's demand would be a. steady b. inelastic c. elastic d. prestige e. marginal

c. elastic

Convenience products are a. relatively inexpensive, frequently purchased items for which buyers exert only minimal purchasing effort b. frequently purchased items for which buyers are willing to exert considerable effort c. frequently purchased items that are found in certain retail outlets d. items that are expensive but are easy to purchase e. items that require some purchase planning and for which the buyer often will not accept substitutes

a. relatively inexpensive, frequently purchased items for which buyers exert only minimal purchasing effort

At the breakeven point, a. the money a company brings in from selling products equals the amount spent producing the products b. the total fixed costs are exactly equal to the total variable costs c. profits are exactly equal to the difference between revenue and total variable costs d. the marginal revenue of a product is exactly equal to the marginal cost of producing one more unit e. the marginal cost curve and the average cost will be identical for a particular product

a. the money a company brings in from selling products equals the amount spent producing the products

If a product has an inelastic demand and the manufacturer raises its price, a. total revenue will increase b. quantity demanded will decrease c. the demand schedule will shift d. the demand will become more inelastic e. total revenue will decrease

a. total revenue will increase

Early in the commercialization phase, marketers must make decisions about a. warranties, repairs, and replacement parts b. product features and break-even parts c. functionality, safety, and convenience d. the proposed marketing mix variables e. which ideas to further pursue

a. warranties, repairs, and replacement parts

The three levels of brand loyalty from strongest to weakest are a. preference, insistence, recognition b. insistence, recognition, preference c. insistence, preference, recognition d. recognition, preference, insistence e. insistence, preference, indifference

c. insistence, preference, recognition

Products are classified as being business or consumer products according to the a. number of buyers involved in the decision b. buyer's intended use of the product c. seller's intended use of the product d. location of use e. types of outlets form which they are purchased

b. buyer's intended use of the product

Product deletion a. tends to be an easy task for most organizations b. may opposed by management c. usually involves immediate termination d. is a matter of indifference to customers e. usually occurs only with convenience items

b. may opposed by management

The owner of Big Jim's Motorcycles is opening a new retail location. Which of the following is most likely to be a fixed cost for Big Jim's Motorcycles?

building rent

Break-even analysis is a tool that marketers are likely to employ during the ______ stage of the new-product development process

business analysis

Phillip is on his way to work when he realizes he has a flat tire. He swings into Discount Tires and has a new tire installed. Phillip's purchase of a new tire in this situation is considered to be a. a shopping good b. a convenience good c. an unsought good d. a specialty good e. an industrial good

c. an unsought good

After building a prototype of his new device, Barry is asked to conduct rigorous functional testing to see if the device meets performance and safety qualifications. This is part of the _____ phase of the new-product development process a. product design b. screening c. product development d. concept testing e. test marketing

c. product development

What step in developing new products involves determining whether the product idea is compatible with company objectives, needs, and resources on a general level? a. product development b. evaluation of competitor's efforts c. screening d. idea generation e. business analysis

c. screening

One disadvantage of test marketing a new product is that......

competitors may copy the product

What degree of brand loyalty is the strongest and most desired by marketers a. preference b. requirement c. awareness d. insistence e. recognition

d. insistence

The four major stages of a product life cycle include a. prosperity, recession, depression, and recovery b. specialty, convenience, shopping, and unsought goods c. decline, stabilization, exposure, and growth d. introduction, growth, maturity, and decline e. awareness, interest, trial, and adoption

d. introduction, growth, maturity, and decline

Marketers begin to make decisions about labeling, packaging, branding, pricing, and promotion during a. commercialization b. screening c. concept testing d. product development e. test marketing

d. product development

Compared with other phases of the new-product development process, the largest number of new-product ideas is rejected during the ______ phase a. idea generation b. concept testing c. business analysis d. screening e. test marketing

d. screening

During the maturity stage a. product modifications are unnecessary b. there is less emphasis on changing a product's price c. marketing strategies are rarely altered d. some competitors are forced out e. limited advertising expenditures are required to maintain market share

d. some competitors are forced out

A product item is best described as a a. component of a marketing mix b. particular brand c. specific characteristic of a product d. specific version of a product e. unit of measure for the product

d. specific version of a product

Price is a key element in the marketing mix because it relates most directly to a. the size of the sales forces b. the speed of an exchange c. quality controls d. the generation of total revenue e. brand image

d. the generation of total revenue

Which of the following is NOT a business product? a. oil to be refined into fuel b. chips to be integrated into components for personal computers c. paper, pens, and tape to be used in an office d. marketing consulting services to aid a company in marketing a new product e. calculators bought to help individuals complete their personal federal income tax forms

e. calculators bought to help individuals complete their personal federal income tax forms

Increasing the quality of a product may a. allow the firm to lower the price of the product b. allow the firm to use less expensive ingredients c. allow the firm to use less expensive processes d. put the firm at a disadvantage relative to competing brands e. give a firm an advantage over competing brands

e. give a firm an advantage over competing brands

The General Auto Insurance advertises its automobile insurance as "For a great low rate you can get online, go to The General and save some time!" General is engaging in a. nonprice competition b. demand-based pricing c. cost-based pricing d. price differentiation e. price competition

e. price competition

As Richard works on the prototype of a new action-oriented computer game, he is engaging in which phase of the new-product development process? a. idea generation b. commercialization c. test marketing d. screening e. product development

e. product development

Which factor is least likely to affect pricing decisions? a. competitive prices b. legal and regulatory issues c. organizational and marketing objectives d. customers' interpretation and response e. shifting stock values

e. shifting stock values

Price is a. money paid in a transaction b. not important to buyers c. of limited interest to sellers d. the most inflexible marketing mix decision variable e. the value that is exchanged for products in a marketing transaction

e. the value that is exchanged for products in a marketing transaction

Which of the following is the best example of disruptive innovation?

razor blade