MKTG 3310 EXAM 3 REVIEW

In one year, the Hidden Gorge Resort incurred $100,000 in fixed costs. Because the resort booked 10,000 room nights, its total variable cost is $100,000 (10,000 room nights × $10 per room). Thus, its total cost is

$200,000

Roger estimates that the fixed costs associated with opening a new bank branch are $500,000. He expects the branch to attract 1,000 new customer accounts in the first year, each of which will cost $50 per year to service. He also expects to generate $100,000 per year in revenue. The total cost of opening the new branch and remaining open for one year will be

$550,000

The Ideal Hotel rents rooms for an average of $100 per night. The variable cost per rented room is $20, to cover housekeeping service and utilities. The fixed costs are $100,000 and the hotel's profit last year was $20,000. Ideal's contribution per unit is

$80

Superior Hotel rents rooms for an average of $100 per night. The variable cost per rented room is $20. Fixed costs are $100,000 and the hotel's target profit is $20,000. To earn this target profit, Superior will need to rent out

1500 rooms

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

2 percent decrease in quantity demanded

When Warby Parker promotes its slogan, "Buy a pair, give a pair," it is meant to suggest a lifestyle aspiration. If consumers make a connection between the Warby Parker brand and this promotional effort, then the online eyeglass company has created

A brand association

By providing good customer service, firms ________Blank their products.

Add value to

The service dimension called ________Blank refers to the ability of the firm's employees to convey trust and confidence.

Assurance

In addition to extensive online and outdoor advertising, Under Armour has intensified its ________Blank efforts by signing such noted athletes as Zhu Ting (volleyball) and Kelley O'Hara (soccer).

Branding

A restaurant could use a tablet programmed with key customers' birthdates, wine preferences, and food allergies as a ________ tool

CRM

Trevor knows that most customers do not spend much time searching for or comparing alternatives when they purchase milk, bread, and other consumer staples at his convenience store. For most consumers, these are ________Blank goods.

Convenience

What situation is occurring if a 1 percent decrease in price results in more than a 1 percent increase in quantity demand?

Demand is price elastic.

What U.S. government agency has the primary responsibility in reviewing food and package labels to ensure claims made by the manufacturer about the product are true?

Food and Drug Administration

The policy at Big City Walking Tours is "You are only as good as the last satisfied client you served." Which aspect of service does this reflect?

Heterogeneous

No Sweat, a successful sweatshirt maker, responded to new customer preferences by starting to sell its best-selling hoodie with cords and zippers in contrasting colors, adding 10 different sweatshirts to its line. In this example, the company is

Increasing depth

Consumers might not realize that Old Spice health and wellness products and Iams pet nutrition products are made by the same company—Procter & Gamble. Old Spice and Iams are examples of

Individual brands

_____ provides the equipment or systems needed to perform a task in a job setting.

Instrumental support

Sandy is not sure how to market her estate planning services because they aren't something a customer can touch, taste, or see. Which aspect of services is Sandy concerned with?

Intangibility

Why is brand extension a popular marketing strategy?

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

What is an accurate description of predatory pricing?

It is illegal in the United States under both the Sherman Antitrust Act and the Federal Trade Commission Act.

In developing marketing strategies, why is price often the most challenging of the four Ps to manage?

It is the least understood element of the marketing mix

Firms can close the ________Blank gap by matching customer expectations with actual service through use of marketing metrics.

Knowledge

What is the best example of products in a family brand?

Kraft Macaroni & Cheese and Kraft Mayo

By changing a standard from "be nice to customers" to "greet every customer with a smile," a services marketing manager has created a(n) ________Blank goal.

Measurable

Happy Bus Tours has decided to generate new sales by being the lowest-price competitor in the market so as to attract customers away from higher-priced tour operators. What kind of company objective does this reflect?

NOT (competitor-oriented)

Dorea wants to measure consumers' price sensitivity to her line of low-sodium canned vegetables. The answer will tell her whether her products are viewed as either

NOT (necessary or optional)

When a local used-car lot promises no price haggling, it exhibits ________Blank because it provides additional value to potential used-car buyers by making the process simple and easy.

NOT competitive parity

Professor Chin never turns students away who seek her advice because she believes that with all her many years of experience, she can help them. The students, in turn, are confident in her and trust her advice. For these students, ________Blank is the most important of the five service quality dimensions.

NOT reliability

Jasper owns an appliance repair service. He has observed over the years that customers keep their older-model appliances longer when the economy is doing poorly, creating demand for his service. Jasper has observed the impact of ________Blank on demand for his business.

NOT the target return effect

______ fairness is the perceived fairness of the process with which a firm handles customer complaints.

Procedural

The National Institutes of Health (NIH) sponsors medical foundations to conduct research to treat rare diseases. The research is then disseminated to the medical community, thus encouraging the development of drugs and therapies more quickly and at a lower cost than would be possible if the research were privately funded. This relationship is an example of

R&D consortia

Jeanine knows from experience that only Gavin makes her hair coloring look perfect every time, so she doesn't make appointments with any other stylist. For Jeanine, ________Blank is the most important of the five service quality dimensions.

Reliability

Brands that are owned by ________Blank are called private-label brands.

Retailers

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 ________Blank pricing strategy.

Sales orientation

By setting appropriate service standards and measuring service performance, firms can attempt to close a ________Blank gap.

Standards

Which service gap is the Hotel Arista trying to address when it takes a week and $1,700 to train a new employee?

Standards gap

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

As Paloma and her family drove from Chicago to Orlando, they played a game of counting the number of McDonald's golden arches they saw along the way. The arches are McDonald's

Symbol

Becky tells her sales representatives their goal is to generate at least a 15 percent return on investment for all the computer desks they sell. Becky is using a ________Blank pricing strategy.

Target return

Kyle has been assigned the task of determining the zone of tolerance for the restaurant's reservation policy. What does Kyle need to find out?

The difference between customers' expectations of the reservation policy and what they will accept before leaving

What is the problem associated with service quality standards such as "be nice" or "do what the customers want"?

They are not specific

Consider a bakery in your community. Ingredients such as sugar and butter are examples of _______Blank costs.

Variable

You've just attended your first brainstorming session. What will you and the other participants do next?

Vote on the best ideas

When Ellen is conducting exploratory concept testing for her firm's new antipiracy software, what is the most important question she should ask?

Will respondents purchase the software if it becomes available?

Dora created a virtual prototype of her new line of handmade jewelry on a website to show to consumers. She realizes there are multiple lines of jewelry on the market and hers will need to be unique. What important question should she be asking at this point?

Will this jewelry line satisfy an unmet need?

When a company launches a new product line with an existing brand name, it is creating

a brand extension

Customers must see value in a product or service before they are willing to exchange time or money to obtain it, but not all customers see the same value in a product. To analyze how many units will be sold at any given price point, marketers rely on

a demand curve

What brand strategy is TCBY, the frozen yogurt chain, using when it decides to add a new flavor to its menu?

a line extension

When a baby-products company introduces a travel-sized package for its existing baby oil product, this is known as

a line extension.

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

a specific brand of soft drink

Before Segway manufactured its two-wheeled people movers, it built a prototype and had staff engineers test it for performance and stability. At this stage, Segway was engaged in

alpha testing

Golf ball manufacturers use "Iron Mike," a machine that swings a golf club at a constant velocity, to test the distance for new golf ball designs. When using Iron Mike, the manufacturers are engaged in

alpha testing

Brands can be owned by

any firm in the supply chain

A product is ________ that can be offered through a voluntary marketing exchange

anything of value to consumers

Julie works in an appliance store. What aspect of the product is she describing when she explains that each refrigerator comes with a five-year extended warranty and a seven-year maintenance plan?

associated services

Marketers need to think about the product offer as more than just its physical characteristics or its basic service function. Which component 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

Atticus went to the menswear store because he had seen an ad for 50% off down vests. When he got to the store, however, he was told no down vests were in stock and none would be ordered, but he could buy a higher-priced down jacket that the salesperson said would be better anyway. This appears to be a case of

bait-and-switch

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

bell-shaped

The shape of the diffusion of innovation curve is described as

bell-shaped

A few of Crystal Clear Water Systems Inc. customers are asked to try out a new water filter that has not yet been released on the market. This is an example of

beta testing

YourEye is developing eye tracking technology that works with an individual's webcam. Instead of spending thousands of dollars on eye-tracking equipment and having customers come into labs, firms will be able to utilize webcams to track not only what a person attends to on a computer screen but also his or her emotional reactions to these products. Firms such as YourEye are automating the

beta testing process

Suppose you work for an advertising agency and attend a meeting at which everyone is asked to generate ideas for naming a new beach resort. You are engaged in ________, a form of new-idea generation.

brainstorming

An appliance company is advertising its new eco-friendly washer. Its marketing team understands that its competition is known for being economical, a good value, aesthetically pleasing, and good for the environment. The competitor has the advantage of

brand associations

Ferrari is well known as a brand of luxury sports cars that has leveraged its brand name to introduce clothing emblazoned with its horse logo. It has also licensed its logo to 68 different other products, from sunglasses to guitars. If consumers begin to doubt the luxury status of the cars because anyone can afford a pair of sunglasses, Ferrari might be at risk of

brand dilution

Harley-Davidson's cake decorating kit tried to appeal to the brand's unparalleled consumer loyalty, but it was considered too tame by the company's consumer base. This is an example of

brand dilution

When the restaurant chain Pancake Heaven launches its own brand of homemade ice cream, it is using a

brand extension

When Marvel Studios flooded retail stores with products based on its Avenger movies, this illustrated

brand licensing

Henri is passionate about Bomba socks. He hasn't bought any other brand in the last few years and will often write positive reviews on his blog about Bomba merchandise. From a strictly marketing perspective, Henri's positive reviews reflect

brand loyalty

When Jia shops for nail polish, she always buys Burnt Cinnamon by Maybelline. This is an example of

brand loyalty

Rena always buys Lay's brand potato chips. She does not even consider alternatives. Rena is a ________Blank customer.

brand-loyal

The point at which the number of units sold generates enough revenue to equal the total costs of running an operation is known as the

break-even point

Ricardo envisions an unclouded future for his new venture. He might be overlooking the fact that pioneers sometimes lose market share to imitators who

capitalize on the pioneers' weaknesses.

Variable costs change with

changes in the quantity being produced.

During his recent business trip, Jackson stayed in a hotel across the street from a restaurant that had a Dunkin Donuts and Baskin Robbins ice cream store in the same building. These two restaurant chains being located together represents the idea of

co-branding

Physicians regularly overstate the expected recovery time from surgery, knowing that managing patients' expectations will reduce the ________ gap associated with their service

communication

Which of the five Cs of pricing demonstrates the different goals each company embraces?

company objectives

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 than in many other areas in the world. These products offered ________ with consumers' needs and priorities.

compatability

Adele sets prices for her translation service to be similar to those of her major competitors. Adele is following a strategy of

competitive parity

Otis owns a kids' shoe store that sells plastic beach sandals. Two blocks down there is another shoe store that sells sandals for $1 less than Otis does. Otis decides to lower his price and match that of the other store. What type of pricing orientation is he implementing?

competitor oriented

Lightning Bolt is an upscale running gear store. Prices are based on customers' beliefs about the value of the gear. The store focuses on a limited target market and provides excellent customer service. Lightning Bolt's manager is using a ________Blank pricing strategy.

consumer-oriented

Marketers use traditional demand curve theory to understand ________Blank in the five Cs of pricing.

consumers

Trevor knows that most customers do not spend much time searching for or comparing alternatives when they purchase milk, bread, and other consumer staples at his convenience store. For most consumers, these are ________ goods

convenience

When Lyft tries to understand what customers are looking for in booking a ride, it is thinking about the ________Blank component of the product offer.

core customer value

By adding new product lines beyond their core business of computer software, like tablet computers and game systems, tech companies benefit primarily by

creating diversification and reducing risk

Companies that develop customized business software often work closely with their users when installing their products. This close contact often creates new product ideas through

customer input

A "no haggle" pricing policy that makes a transaction easier for the buyer is a type of ________Blank pricing strategy.

customer-oriented

The Service Gaps Model is designed to highlight those areas where

customers believe they are getting lower quality service than they should.

Marketers can take advantage of the variable nature of services by

customizing services to meet customers' needs exactly

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

decrease

A(n) ________Blank gap exists when a firm knows what it needs to do to meet customers' service expectations, but sometimes fails to do it.

delivery

Because they are intangible, heterogenous, and perishable, services are more challenging to ________Blank than products are.

develop

Jackie has been asked to report on how well the company's high-rise jeans collection had spread through the marketplace. The management team wants to know which categories of adopters bought the jeans first and which ones are buying them today six months later. What process does Jackie need to review?

diffusion of innovation

The process by which the use of a new product or service spreads throughout a market group is referred to as

diffusion of innovation

Marketers with luxury brands like Louis Vuitton use brand extension cautiously in order to avoid

diluting the core brand

Some products may stay comfortably in the maturity phase of the product life cycle until a new product emerges to replace them. An example of such a mature product is

dishwashers

Sal was told there was no hotel room available for him although he had a guaranteed reservation. The hotel then made him a reservation at a more expensive hotel and expected him to pay the difference in room rates. Sal was upset because, in his opinion, the hotel's solution did not incorporate

distributive fairness.

Your accountant advises you to find the break-even point of the day care center you operate. You can do this by

dividing fixed costs by contribution per unit.

Jiyang's vegan restaurant is located in a business district that has few customers on the weekend. To attract diners on Saturday and Sundays, it reduces its prices on these two days. This is an example of

dynamic pricing

Which group is essential for bringing the other buying groups into the market?

early adopters

As soon as she saw one, Candice wanted a curved-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. Candice is part of the ________Blank diffusion of innovation group.

early majority

The ________Blank diffusion of innovation group is crucial because few new products can be profitable until this large group buys them.

early majority

The value of a brand can be defined as the

earning potential of the brand over the next 12 months

Janno is brainstorming a brand name for the tutoring service he plans to set up. To be effective, a brand name needs to be

easy for consumers to recognize and remember.

Leyla works at a car repair center. On Tuesday she received a call from Steven, a distraught long-time customer, who needed his car repaired quickly so he could take his son to college. After carefully listening to Steven, Leyla made sure to address him by name as they worked out a plan. Which aspect of service quality is Leyla using in her response?

empathy

Each week, Vista Bus Company posts on its internal employee website a photo and short article about its Driver of the Week. This recognition is an example of

employee incentives

Empowerment of employees helps address the delivery gap because

employees directly involved with the customer can respond effectively at the moment the problem occurs.

When Martina checked in at her hotel, it was 3 AM and she was exhausted. Her dress, which she needed for a presentation in a few hours, looked like she had slept in it. Dominic, the night clerk, offered to find a 24-hour dry cleaner and have the dress pressed while Martina got a few hours of sleep. Dominic's actions are an example of

empowerment of employees to meet customers' needs.

One of the potential benefits to a firm of introducing new-to-the-world products or services is

establishment of a completely new market

You are building a demand curve for your exercise-bike company. You have necessarily made the assumption that

everything but price and demand remains the same

Lainie took her partner to Chez Henri for their anniversary because on its website the restaurant advertises "free champagne for anniversary couples'' and shows a picture of a bottle of expensive champagne in an ice bucket beside an elegant dining table. During their meal, however, Lainie and her partner were given only a glass each of an inferior sparkling wine as their "free champagne." Chez Henri is experiencing a ________Blank gap.

expectations

When consumers associate a brand with a certain level of quality and familiar attributes, which lets them make quick buying decisions, the brand is

facilitating purchasing.

Marco decided that the ________ in his company should be empowered to make their own decisions about how to help customers should a problem arise.

frontline employees

Sayid is deciding whether to purchase brand-name dress shirts or a less expensive store brand. He has purchased other shirts with the same brand name in the past but was only marginally satisfied—despite the cost. In this situation, Sam is likely to purchase the store-brand shirts because at lower cost they offer

greater perceived value.

Along the service-product continuum, which one of these is the most product dominant?

grocery store

At which stage of the product life cycle will you find a growing number of product adopters, rapid growth in industry sales, and increases in the number of competitors and the number of available product versions?

growth

Harley's line of ready-to-eat vegan meals is attracting an increasing number of competitors. In what stage of the product life cycle is it?

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 ________Blank stage of the product life cycle.

growth

The decision to delete a product is never taken lightly because manufacturers generally

have made substantial investments in product development and manufacturing

Innovators are a critical group of new product adopters because they

help the product gain market acceptance

One approach marketers are using to reduce service ________Blank is to replace people with machines whenever appropriate.

heterogeneity

Reba had several unpleasant experiences trying to find the merchandise she needed at a large home improvement store. The employees—when she could find them—rarely seemed to know where anything was outside their own departments. But on her most recent visit, she was pleasantly surprised to find that the store had installed kiosks where she could get information quickly and accurately. The store had found a technological solution to the services marketing issue of

heterogeneity

When marketers state that services are ________Blank, they are referring to the fact that services are not always of the same quality from one time period to another or from one service provider to another

heterogeneous

Food preparation, lawn maintenance, and house cleaning services are all examples of

household maintenance activities that people increasingly pay others to perform

To meet or exceed customers' expectations, marketers must

identify what those expectations are

In a competitive market, consumers assess perceived value mostly

in relation to the value of a brand's close competitors.

Belinda is the marketing manager for a chain of pet supply stores. She uses a target return pricing strategy because her firm's primary objective is to

increase profits

A study found that, among addicted smokers, a 10 percent increase in the price of cigarettes resulted in a 2 percent decrease in quantity demanded. For these consumers, cigarettes have a(n) ________Blank price elasticity demand.

inelastic

The price elasticity of demand for a specific brand of deodorant is 1. The market for this product is considered

inelastic

The Amazon Echo is an example of ________Blank because when it was introduced, nothing like it existed on the market.

innovation

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

innovation

By taking the morning off work, Ilaria made sure she was one of the first people in the virtual waiting room for tickets to see the Broadway production of Hamilton. Ilaria is an example of a(n)

innovator

Billy relocated to take a new job. When he was ill, he found a doctor close to his new home. During his exam, the doctor was impatient and demonstrated a poor bedside manner. Billy wished he could have requested a different doctor in that moment, but it was too late. Billy's experience exemplifies which key difference in services?

inseparability

Learn 'n' Play Day Care Center says its services are ________, meaning they are produced and consumed at the same time

inseparable

Tom's boss has asked him to find out whether the company is meeting customers' service quality expectations. One of Tom's challenges is that services are ________Blank, making evaluation of service quality difficult.

intangible

During the product launch stage, a company is

introducing the product to the entire market.

Damian's new line of electric bicycles is experiencing low sales and small, almost non-existent profits. In which product life cycle stage is it?

introduction

One key feature of the value of a strong brand is that

it can protect the firm from competition

If a firm promises more than it can deliver,

it has created a communication gap.

Marketers with successful brands sometimes hesitate to expand their brands because

it is costly to maintain many product lines, and it might weaken the brand's meaning.

When a product is successful in the introductory stage of the product life cycle,

it may start to see profits toward the end of this stage.

Computer game companies constantly monitor game-related blogs that track the latest products, because they know their customers crave the newest and most exciting 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

Firms can close the ________ gap by matching customer expectations with actual service through use of marketing metrics

knowledge

Leo manages an upscale Italian restaurant in New York City that offers a few specials each evening in addition to its regular menu. Leo has trained his servers to report customer comments and requests for items that have previously been offered as specials. He can use this information to reduce the ________ gap in services marketing

knowledge

Mark and Cameron live in the United States. Mark recently asked Cameron to text him a picture of his new putter, but Cameron said he doesn't own a smartphone—he still uses his original flip phone. Cameron would probably be considered a(n) ________ in the diffusion of innovation process.

laggard

Nancy has used a VCR machine to watch movies since they first came out, so she sees no need to upgrade to a streaming service. To which group of consumers does Nancy belong?

laggards

When single-cup coffeemakers were new, they were expensive and took up a lot of counter space. Eileen and Jack waited until more choices were available, sales had leveled off, and prices had dropped. They were part of the ________Blank diffusion of innovation group.

late majority

Which adopter category refers to the last large group of buyers to enter a new product market?

late majority

Lisa sells commercial-grade kitchen equipment to major hotel chains and restaurants. Whenever she visits her customers, she looks to see whether they are using the equipment for other tasks or have modified the equipment for some other purpose. These customers are examples of ________Blank, who can provide ideas for new and improved products.

lead users

Maclaren, which makes baby strollers, recently agreed to market a BMW-branded baby stroller to appeal to new dads. This is an example of a deal for ________ rights

licensing

Parklane Golf Equipment Corp. has been trying to develop a lightweight putter for years but does not have the best technology. After learning that Jeong Group had what it needed, Parklane bought the right to use Jeong's technology in its putters. What process is helping Parklane develop its new putters?

licensing

To generate ideas for new products, some firms will purchase the rights to use another firm's technology. This is known as

licensing

When a customer becomes angry and emotional, the best first step toward service recovery is to

listen carefully and with empathy until the customer feels they have been heard

Julianna believes that the best way to drive traffic to her convenience store is to offer a "buy one, get one free" deal for bread and orange juice. Almost every customer will want these items, and once they are in the store, they will purchase additional products. What type of pricing strategy does Julianna want to use?

loss-leader

For marketers, one of the benefits of achieving brand loyalty is

lower marketing costs associated with reaching loyal customers.

Squeaky Clean Car Wash uses punch cards to reward customers who make $60 in purchases with 20% off their next purchase. This punch card is one way Squeaky Clean is building

loyalty to the brand.

Most U.S. automobile customers are familiar with and have an opinion, positive or negative, about American-made cars. This familiarity makes it easier for consumers to

make purchase decisions

Private-label brands are developed and managed by

manufacturer's representatives

In an effort to build sales quickly for its new home alarm system, Ever Alert Inc. sets the initial price of the system very low. What type of pricing does this reflect?

market penetration

During the ________ stage of the product life cycle, sales peak and profits begin to decline as competition becomes intense

maturity

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

maturity

Mairead tells you she accurately measures all the factors needed to predict sales and profits at various price levels so her firm can choose the price level that produces the highest return. Which strategy is Mairead pursuing?

maximizing profits

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

monopolistic competition

Manuel has created a housecleaning robot that generates all the power it needs to operate. Even if it succeeds, a new-to-the-world product is

not adopted by everyone at the same time

Many interior design businesses volunteer to provide their services for house-walk fundraisers because they know their design efforts will benefit from

observability

Relatively few consumers like to go to the dentist. Dental insurance plans that pay for regular checkups increase the ________Blank of dental care by reducing the cost to the consumer.

perceived value

Cross-price elasticity is the

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

Cruise ship operators understand that their services are ________Blank, meaning they cannot be stored for use in the future

perishable

The customers at Michaela's bagel shop want to grab a quick breakfast before boarding an airplane. However, they are becoming frustrated because the staff behind the counter often shows more interest in gossiping about their social lives than in waiting on customers. Michaela needs to reexamine the ________ part of her services strategy

personnel

At its peak of popularity in the early 2000s, the Apple iPod changed the way people listen to music but also created an entirely new industry devoted to accessories such as cases, ear buds, docking stations, and speakers. The Apple iPod was a

pioneer product

The diffusion of innovation theory is useful to marketers in helping them

predict which types of customers will buy their product immediately and later

Mary belongs to a national consumer panel created by a market research company. She regularly receives samples of unreleased new products from a variety of firms and fills out questionnaires about them. The national consumer panel Mary is part of is engaged in

premarket testing

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

prescription drugs

Pete has decided he was being too demanding of the servers in his coffee shop, so he no longer insists they clear tables as soon as customers leave, return menus to the rack at the front of the store, or refill the sugar and salt receptacles every day. Pete has likely forgotten the importance of ______Blank in a service business.

presentation

Addison would love to own a Steinway piano, but he knows if he has to ask how much they cost, he probably can't afford it today. Products like Steinway pianos are most likely to be associated with

prestige pricing

Consumers generally believe that ________Blank is one of the most important factors in their purchase decisions.

price

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

price and demand

If a 1 percent decrease in price results in less than a 1 percent increase in the quantity demanded, demand is

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

Because services like cruises and car rentals are perishable, many marketers use

pricing strategies to match supply with demand

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

primary; secondary

Suppose Walgreens wants to introduce its own brand of hand sanitizer, similar in composition and packaging to that of a national brand but at a lower cost. What kind of brand would Walgreens be introducing?

private-label brand

One afternoon, the clerk at the customer service desk of a large retail store got bored and started citing different return policies to each customer. Customers waiting in line and overhearing the different policies probably felt the store's handling of returns lacked

procedural fairness.

Enterprising Concepts has completed concept testing of its industrial vacuum cleaner. Before it begins market testing, in what stage should it engage?

product design

A ________Blank 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

A university that has separate graduate and undergraduate admission offices recognizes that these are distinct

product lines

Yusuf has been asked to prepare a report detailing all the attributes of the "actual product." Which of these features can he leave out of his report?

product warranty

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

profitability

At the break-even point,

profits are zero

Managers of fast-food restaurants struggle with employee turnover rates that can range as high as 200% a year. The work environment is difficult, and customers can often be demanding. One of the first steps managers can take to help workers deliver high-quality service is to

provide emotional support and concern for their employees.

After observing a customer verbally abuse a server, a manager can ensure quality service by first

providing emotional support to the server

Uptown Bank uses a complex polling system coupled with a customer response measurement system to assess consumers' responses to new products and services. Uptown Bank is using a(n) ________ program to improve service quality and service offerings

quality gap analysis

Leda wants her firm's gourmet coffees to be the leading brand in the U.S. market. When adopting a pricing strategy designed to gain market share, she should remember that

rarely is the lowest-price offering the dominant brand in a market.

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

reducing the price elasticity of demand.

Early users of personal computers struggled with their cumbersome, user-unfriendly operating 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

When a dairy company changed the shape of its packaging to fit more packages of butter into the same shelf space, this was a subtle way in which the firm ________ its product

repositioned

Your boss has just brought a competitor's office workstation made of recycled materials to your new-product development team. She asks the team to analyze the desk and create an improved product that does not infringe on the competitor's patents. What task has your boss assigned to you?

reverse engineering

When a global firm turns to its subsidiaries in less-developed markets for new product ideas, the firm is engaged in

reverse innovation

When Chloe, an athletic trainer, invented a new heart monitor for runners, she could expect during the introductory stage that

sales would be low and profits nonexistent, but she would attract running equipment innovators.

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

sales-oriented

Because guests do not have the opportunity to try out its service before purchasing, Seaside Hotel offers ________ to overcome the problem of inseparability of services.

satisfaction guarantees

What is one of the three interrelated factors that firms use to measure the success of a new product?

satisfaction of the firm's financial requirements

When the delivery of a service fails to meet customers' expectations, a ________Blank gap exists.

service

Because services are intangible, it is often difficult for customers to evaluate how well a service meets their expectations, which marketers call

service quality

Bethany is a customer service representative for an online clothing store. When she got a phone call yesterday from a customer who received a pink shirt instead of the blue one she ordered, Bethany told the customer she would mail the blue shirt out immediately and the customer would not have to pay for either shirt. What process is Bethany using?

service recovery

Mairead is planning to hike across Canada. She wants to make sure the hiking boots she chooses are the best ones for her adventure, so she is spending a considerable amount of time comparing alternatives. Mairead is purchasing what type of product?

shopping

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

shopping

Owen likes artisan bread and will drive to multiple stores to find his favorite brand. His twin sister Tasha loves bread but doesn't care about brands. For Owen, bread is a ________Blankgood, while for Tasha it is a ________Blank good.

specialty; convenience

If there is a difference between the firm's perceptions of customers' expectations and the service standards the firm has set, a ________Blank gap exists.

standards

Training service providers to know exactly what a "good job" entails is a means of setting service

standards

is another term for private-label brands.

store brands

When the price of Blu-ray players dropped, the demand for DVD players went down. This tells us that DVD players and Blu-ray players are

substitute products.

When Gloria rents a book from an online retailer for her college class, she keeps the box it came in so she can return it in that same box at the end of the semester. This box is an example of

sustainable packaging

Amanda was looking for a venue for her parents' surprise anniversary party. When she visited one potential location, she noticed that the landscaping was not complete, and there was stained carpet in the lobby. Which of the service quality factors caused Amanda to select an alternative venue?

tangibles

The Broadmoor Hotel in Colorado Springs, Colorado, maintains its five-star rating by focusing on five service characteristics: reliability, responsiveness, assurance, empathy, and tangibles. The hotel has been updating rooms built in the early part of the 20th century to meet the needs of 21st-century visitors. To accomplish this, it spent millions in improvements, renovating rooms and adding a new outdoor pool complex. These renovations focus on the ________ service characteristic.

tangibles

Because there are many firms in monopolistic competition markets,

the competitors will focus on product differentiation

What is an example of primary packaging?

the dental floss dispenser

Sales of more expensive organic produce tend to increase when the economy is doing well, while sales of lower-priced store brand produce increase when the economy is not doing well. This is an example of how ________Blank influences demand for products.

the income effect

Thanks to a substantial pay raise, Maxine has altered her shopping patterns and regularly buys more expensive, name-brand goods she couldn't afford before. This is an example of

the income effect

A typical demand curve will tell Peter that the higher the price of the down comforters his company makes,

the lower the quantity consumers will buy.

Lydia will drive 10 miles out of her way to save a dollar on her preferred brand of laundry detergent. Lydia perceives price as ________Blank for a good or service, while most consumers recognize price as the ________Blank made to acquire a good or service.

the money paid; overall sacrifice

The more substitutes that exist in a market,

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

On the basis of the research it has gathered on consumer perceptions, the tests it has conducted, and competitive considerations, the ABC 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 reference price might be considered deceptive if

the reference price has been inflated or is fictitious.

Good-to-Go Corp. has a new concept for a lightweight electric scooter 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.

Services marketing managers have learned that more employees will support a quality-oriented process if

they are involved in setting the goals

As a promotion technique, samples are often used for new products when ________Blank will influence the diffusion of the product.

trialability

Warby Parker, an online retailer for prescription eyewear, offers a free, try on at home program that lets customers select five pairs of frames from the website that they would like to try on. Customers then purchase or return the frames. Warby Parker handles all the shipping costs and provides all the return packaging. This practice reflects the ________ of its products.

trialability

While Madeline was shopping at the kitchen and bath store she noticed a product she had never heard of called an apple corer. She bought one because she thought it would make it easy to prepare apples for her son's lunchbox. This apple corer is an example of a(n) ________ product for Madeline.

unsought

sales person who cold calls you to sell a cemetery plot is most likely offering what type of product?

unsought product

Microsoft's Windows operating system continues to dominate the market, even though it has been around for over 20 years. Windows will likely remain in the maturity stage of the product life cycle

until a superior product comes along to replace it.

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 narrower. Car manufacturers recognized that this new line of cars

were not compatible with European market conditions

Alix knows her restaurant is understaffed today. She is hoping to get through the day without falling below her customers' ________Blank, the difference between what her customers want and what they will accept before going elsewhere.

zone of tolerance

Customers have a defined ________ when it comes to waiting in line at a retail checkout counter. The amount of time consumers are willing to wait varies with the type of store

zone of tolerance