MKT 340 Review Questions 11,12,14

Timor rents rooms in his hotel for an average of $100 per night. The variable cost per rented room is $20. His fixed costs are $100,000 and his target profit is $20,000. For Timor, to earn his target profit, he will need to rent out ________ rooms.

1500

________ is the process by which ideas are transformed into new products and services that will help firms grow.

Innovation

Which of the following reflects the maturity stage of the product life cycle?

Sales: peak; Profits: peak to declining; Typical Consumers: late majority; Competitors: high number of competitors and competitive products

Assume the demand for electricity, a necessity with few substitutes, is −0.2. If the electric company raised its rates by 10 percent, we would expect

a 2 percent decrease in the quantity demanded

Which of the following is a potential benefit of brand extension?

allowing the perception of a brand with quality image to be carried over to the new product

Brands can be owned by

any firm in the supply chain

Marketers need to think about the product offer on three levels. Which of the following levels includes associated services such as warranties, financing, support, and after-sale service?

augmented product

If many consumers in the marketplace are familiar with a brand and what it stands for and have an opinion about the brand, the brand has considerable

awareness

The product life cycle is theoretically ________ with regard to sales and profits.

bell shaped

One of the key characteristics of ________ sessions is that no idea should be immediately accepted or rejected.

brainstorming

A ________ refers to the use of the same brand in a different product line.

brand extension

When Disney flooded retail stores with products based on its movie Frozen, this illustrated

brand licensing

When Paulette shops for lipstick, she always buys Cotton Candy by Revlon. This is an example of

brand loyalty

Denny always liked REI outerwear, so when he was shopping for a winter coat, he ordered one from REI without thinking too much about it. This demonstrates how ______ facilitate purchases.

brands

In many cases, pioneers lose their market lead and initial market share to imitators who

capitalize on pioneers weakness

Variable costs change with

changes in the quantity being produced

Dana owns a bakery where she sells cupcakes. Two blocks down there is another bakery, Sweet's Bakery, that sells cupcakes for $1 less than Dana. Dana decides to lower her price and match Sweet's Bakery prices. What type of pricing strategy is Dana implementing?

competitor orientated pricing

When Ursula decides how to price new products in her gift store, she measures the value of her product offerings against those of the other stores in her area. Ursula uses a ________ pricing strategy.

competitor-orientated

In general, prices should not be based on costs because

consumers make their purchases based on perceived value

Imelda'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. Imelda's is using a ________ pricing strategy.

customer orientated

Which of the following is included in the four product life cycle stage?

decline

The break-even point is estimated by

dividing fixed costs by contribution per unit.

As it pertains to the diffusion of innovation, if the ________ group is relatively small, the number of people who ultimately adopt the innovation likely will also be small.

early adopter

As soon as he saw one, Jose wanted a flat-screen television, but he was worried about making the wrong choice. He waited until there were alternatives in the market with lower prices and improved quality. Jose is part of the ________ diffusion of innovation group.

early majority

The price elasticity of demand for a teeth-whitening kit is −1.5. The market for this product is considered

elastic

A demand curve is built on the assumption that

everything but price and demand remains the same.

When consumers associate a brand with a certain level of quality and familiar attributes, allowing consumers to make quick decisions, the brand

facilities purchasing

During the ________ stage of the product life cycle, there are few but an increasing number of competitors.

growth

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

Dynamic pricing is also referred to as ________ pricing.

individualized

When Kraft's Philadelphia cream cheese changed its packaging from round to oval to ensure front-facing displays that can't spin and to fit more into the same shelf space, this was a subtle way in which the firm ________ its product.

individualized

Whenever Conrado considers upgrading his personal computer system, he consults with Navin, a knowledgeable friend who always has the newest technology. For Conrado, Navin is a(n) ________ in the diffusion of innovation curve.

innovator

Which of the following is the correct sequence of new product adopters in the diffusion of innovation curve?

innovators, early adopters, early majority, late majority, laggards

Why is brand extension a popular marketing strategy?

it allows the firm to spend less on creating brand awareness and associations

Marketers with successful brands sometimes hesitate to expand their brands because

it is costly to maintain many product lines, and it might weaken the brands meaning

Computer game companies constantly monitor computer game-related blogs keeping track of the latest hot products, because they know that their customers crave the "latest and greatest" games. They use this information to create new products that primarily provide the benefit of

keeping up in a market where sales come mostly from new products

Which of the following groups are included in the diffusion of innovation curve?

late majority

Frequent buyer/user award programs are used to

maintain contact with loyal customers

Whether they like them or not, most U.S. automobile customers are familiar with and have an opinion about American-made cars. This familiarity makes it easier for consumers to

make purchase decisions

In the United States, most consumer packaged goods found in grocery and discount stores are already in the ________ stage of the product life cycle.

maturity

The commercial airline industry is considered what type of market?

oligopolistic competition

Where on a product's packaging would one most likely find nutrient content and country of origin?

on the label

In one test before product launch, customers try a sample product and are then surveyed to understand whether or not they would buy/use the product again. This is known as

premarket testing

A demand curve shows the relationship between ________ during a specific period of time.

price and demand

Samar customizes Harley-Davidson motorcycles. No two cycles are alike. He notices that very few customers even ask the price of his motorcycles before they decide to purchase them. Demand for his motorcycles is probably

price inelastic

The contribution per unit is

price minus variable cost per unit

Because there are only a few firms in markets with oligopolistic competition,

price wars may occur

A ________ package is the one a consumer uses. A ________ package is used by retailers to display and sell the product.

primary; secondary

The ________ step in the product development process is critical, requiring tremendous resources and extensive coordination of all aspects of the marketing mix.

product launch

A ________ is a group of associated items that consumers tend to use together or think of as part of a group of similar products.

product line

For a major university, undergraduate studies, graduate studies, and professional programs would be ________ within the university's product mix.

product lines

Which of the following is considered part of the augmented product?

product warranty

Firms spend millions of dollars annually to build brand equity, recognizing that brand equity contributes to

profitability

In ________ many firms provide similar products that are considered substitutes for each other.

pure competition

Early personal computer users remember the cumbersome, user-unfriendly DOS system. When Apple introduced System 1 and Microsoft introduced Windows, both of which were much easier to use, these new products diffused rapidly because of their

relative advantage

Inkjet printers were a big improvement over the dot-matrix printers they replaced. Inkjet printers gained rapid acceptance in the marketplace primarily because of their

relative advantage

Private-label brands are developed and marketed by a(n)

retailer

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.

sales orientation

Abdul's firm has set corporate direction to become one of the leaders in each of its significant market segments. It was Abdul's job to examine the firm's pricing strategy to determine how to maximize market share, even at the expense of profits in the short run. What kind of company objective would guide Abdul's effort?

sales-orientated

Which of the following are benefits of new product development to a firm?

satisfying the changing needs of current and new customers

Viola is taking a backpacking trip across Europe. She wants to make sure that the backpack she chooses is the best one for her adventure, so she is spending a considerable amount of time comparing alternatives to make sure she selects the best one. For Viola, this backpack represents what type of product?

shopping

When Winifred planned her trip to Cambodia, she spent months evaluating packages, airfares, and hotel accommodations. Winifred's trip is an example of a(n) ________ product.

shopping

When Delta increases its average fares, American Airlines and United often follow with similar increases. This is an example of

status quo pricing

________ is another term for private-label brands.

store brands

Which of the following would be considered a logo without words?

symbol

A marketing professor in Boston, Massachusetts, maintains a museum of failed consumer products. Most new products in this museum failed during the ________ stage of new product development, when they are introduced to a limited geographic area.

test marketing

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

test marketing

Unlike product, promotion, or place, price is the only part of the marketing mix

that generates revenue

Wilhelm owns Do-It-Right Auto Repair Service. He has observed over the years that customers keep their high-mileage cars longer when the economy is doing poorly, creating demand for his maintenance and repair service. Wilhelm has observed the impact of ________ on demand for his service.

the income effect

Because there are many firms in monopolistic competition markets,

the many competitors will focus on product differentiation

On the basis of the research it has gathered on consumer perceptions, the tests it has conducted, and competitive considerations, the XYZ firm confirms its target market (or markets) and decides how its product will be positioned. Then the firm finalizes the remaining marketing mix variables for the new product, including the marketing budget for the first year. This process illustrates

the product launch

A company has a new concept for a lightweight bicycle that can be easily folded and taken with you inside a building or on public transportation. The company 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

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

Consider a bakery like Entenmann's: The majority of the ________ costs are the cost of the ingredients, primarily flour.

variable

When automobile manufacturers introduced SUVs, they distributed and promoted them in the United States, but not in Europe where gasoline is heavily taxed, and roads are much smaller. Car manufacturers recognized that this new line of cars

was not compatible with European market conditions