Marketing Final Review

Jacob rents rooms in his hotel for an average of $100 per night. The variable cost per rented room is $20, to cover maid service and utilities. His fixed costs are $100,000 and his profit last year was $20,000. For Jacob, the contribution per unit is

$1,250

A company manufactures and sells outdoor games. The games are sold for $250 per unit. The company estimates that its average variable cost is $150. It figures its fixed costs to be $85,000 per year. Sales for the previous year were $125,000. How many games does the company need to sell to break-even?

850 games

Sally wants to start a lemonade stand. She has calculated at what point her revenue will cover her stand's costs. Based on this calculation, she has decided she needs to sell 75 glasses of lemonade at $6 per glass. Which important element is sally not accounting for in her analysis?

Consumer demand

Julia's is an upscale women's clothing store. Prices are based on customers' beliefs about the value of the clothing. The store focuses on a limited target market and provides excellent customer service. Julia's is using a ________________ pricing strategy.

Customer-oriented

If the price for a product increases, the demand for the complementary product will

Decrease

________________ is the process by which the adoption of an innovation spreads.

Diffusion

When the Williams=Sonoma lowered the price of its bread maker from $479 to $267, their total revenue increased. This is an example of __________________.

Elastic demand

T/F A skimming price strategy tends to be effective in a price-sensitive market because it discourages competitors from entering the market.

False

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

False

T/F Late Majority are a critical group of new product adopters because they help gain market acceptance.

False

T/F Old Spice repositioned its products from a Baby Boomer generation to a much younger target market. Since the brand was already introduced in the market, Old Spice deodorant would not be an example of a new product.

False

T/F Test marketing refers to customers who modify existing products according to their own ideas to suit their specific needs.

False

T/F The demand curve for prestige products generally slopes downward due to higher prices.

False

T/F The maturity phase of the product life cycle is characterized by reduced competition

False

Dan is especially price sensitive. He has been known to line up on "Black Friday" (the day after Thanksgiving) at 4 a.m. to be among the first to buy sale items. Dan would likely respond to a _______ pricing strategy.

High/Low

in the ___________- stage of the product life cycle, the primary promotion objective is to generate consumer awareness and motivate consumers to try the product.

Introductory

Which of the following is not a characteristic of products in the maturity state of the product life cycle?

Laggards are a major focus of marketing efforts

Marginal competitors will start dropping out of the marketing during the __________ stage of the product life cycle.

Maturity

If a firm in a purely competitive market can differentiate its product or service, it becomes part of a(n) _______ market.

Monopolistic competition

name the most common reason why new products fail

No discernible benefits

If a telecommunications company drastically cuts the price for cellular phone service in order to eliminate local competitors, the company could be charged with

Predatory pricing

For which of the following is demand likely to be least sensitive to price increases?

Prescription drugs

Health clubs often use a low, introductory offer price to get people to join their club. These low prices represent a ______________ pricing strategy.

Sales orientation

Many restaurants offer daily specials, appetizers, entrees, and desserts not listed on their standard menu. These daily specials primarily provide the new product benefit of

Satisfying the changing needs of current and new customers

Which of the following markets is most likely to be characterized by oligopolistic competition in the United States?

Smartphone service providers

There are many options available to consumers when it comes to breakfast cereals. So if Kellogg's significantly increases the price of Rice Krispies, consumers are more apt to buy alternate cereals instead. This illustrates which concept?

The substitution effect

T/F Cross-Price elasticity is the percentage change in quantity demanded of product A compared to the percentage change in price of product B.

True

T/F If demand for a product is inelastic, consumers will not change their purchasing habits greatly when the price of that product changes.

True

T/F When price decreases and total revenue fails, demand is inelastic.

True

T/F in many cases, pioneers lose their market lead and initial market share to imitators who capitalize on the pioneers' weaknesses.

True

T/F: If a firm is engaged in monopolistic competition, it should seek a way to differentiate itself.

True

New-to-the-world products, where the product category itself is new, are also called

discontinuous innovations

If Pillsbury developed a new chive-flavored crescent roll, it would not be considered a new product since it is an extension of their current product line. True or False

false

Kyle, who is an expert in electronic products, purchased a 3D television right after they were available in the marketplace. He paid over $7,000 for it. Kyle would be considered which category of prodct adopters?

innovator

Nancy only breaks down and buys a new product after most of her friends and family have adopted it. She deliberates on the decision and is often skeptical of marketing. Her reference group heavily influences her buying decisions. Nancy is best described as an:

late majority

Ryan is a sales rep for an established paper supply company. Business is good, but he is concerned that the company has spent a little on new product development and has not created a new product in over five years. Without new products, Ryan can market his current products to his current customers or

market the same products to similar customers

Doritos is most likely in which stage of its product life cycle?

maturity

The ____________ stage if the product life cycle normally has the longest stage.

maturity

Brian is trying to sell a new line of ultrasound imaging equipment. Unlike existing technology, these machines are compact, creating the potential for general practice physicians to have and use them in their offices. These new products diffused rapidly because of their

relative advantage

Zappos.com an online shoe store, offers an easy, no-hassle return procedure. This related to the _________ of its products.

trialability