MRKT 300 Exam 2

For the average college student, a retirement account would be a shopping product. a. True b. False

b. False

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. a. competitor-oriented b. target return c. target profit d. maximizing profits

a. Competitor-oriented

Because services are ____________, it is often difficult for marketers to convey the benefits to consumers. a. intangible b. substantial c. heterogeneous d. perishable e. inseparable

a. Intangible (intangible: can't be touched, tasted, seen, or possessed)

All of the following are characteristics of products in the maturity stage of the product life cycle EXCEPT a. laggards are a major focus of marketing efforts. b. marketing costs increase as firms defend their market share. c. price competition is intense. d. the market may become saturated because nearly all potential customers have adopted the product. e. to increase the customer base, firms consider entry into new markets and new market segments.

a. Laggards are a major focus of marketing efforts.

If a firm in a purely competitive market can differentiate its product or service, it becomes part of a(n) _______ market. a. oligopolistic competition b. monopoly c. monopolistic competition d. pure competition e. duopoly

a. Monopolistic competition (when there are many firms competing for customers in a given market but their products are differentiated)

Health clubs often use a low, introductory offer price to get people to join their club. These low prices represent a ______________ pricing strategy. a. sales orientation b. target profit c. target return d. maximizing profits e. status quo

a. Sales orientation (sales orientation strategy sets prices with the goal of increasing sales levels)

New-to-the-world products that create new markets can add tremendous value to firms. a. True b. False

a. True

Pricing strategies should be aligned with a firm's overall goals and objectives. a. true b. false

a. True

When manufacturers such as Avon sell directly to consumers, they perform both production and retailing activities. a. True b. False

a. True

American Airlines just reduced its fares for summer flights by $100. Delta Airlines changes its pricing structure and reduces its flights by $100 as well. Delta is employing status quo pricing. a. true b. false

a. True (changes prices only to meet those of the competition)

The communications gap can be reduced by managing customer expectations. a. True b. False

a. True (difference between the actual service provided to customers and the service that the firm's promotion program promises)

The key to successful pricing is to match the product with the consumer's perception of value. a. true b. false

a. True (ignoring consumers' perceived value might result in a price that is too high or too low)

Even if products succeed, not all consumers adopt new-to-the-world products at the same time. a. True b. False

a. True (number of users of an innovative product or service spreads through the population over a period of time; bell-shaped curve)

When the price of milk goes up, demand does not fall significantly, because people still need to buy milk. However, if the price of T-bone steaks rises beyond a certain point, people will buy fewer of them because they can turn to the many substitutes for this cut of meat. This refers to price elasticity of demand. a. true b. false

a. True (price elasticity of demand measures how changes in a price affect the quantity of the product demanded)

To develop psychographic segments, the marketer must understand consumers' a. self-values, self-concept, and lifestyles b. age, income, and education c. disposable personal income, benefit perceptions, and alternative egos d. buying patterns and behaviors e. gender, race, and religion

a. self-values, self-concept, and lifestyles

The more familiar customers are with a brand, the harder their decision-making process will be. a. True b. False

b. False

When a marketer adjusts the marketing mix to give customers a clear, distinctive understanding of what the product does, the marketer is engaging in psychographic segmentation. a. True b. False

b. False

When Glenn asked a few of his regular customers to test his prototype surfboard, he was engaging in alpha testing. a. True b. False

b. False (alpha testing determines whether the product will perform according to its design and whether it satisfies the need for which it was intended)

A company that sells only multigrain, low-calorie bread should use an undifferentiated targeting strategy. a. True b. False

b. False (concentrated targeting strategy)

As personal computers became popular, the sale of typewriters decreased significantly and now typewriters are only used by a very small segment of consumers. Typewriters are in the maturity stage of the product life cycle. a. True b. False

b. False (decline stage)

Latosha was employee of the month at Jersey Mike's Subs, primarily because she provided excellent customer service by serving food quickly. This relates to the reliability service dimension. a. True b. False

b. False (relates to responsiveness)

Many service marketers use training and standardization to reduce service perishability. a. True b. False

b. False (services aren't perishable)

A demand curve shows the relationship between income and demand. a. true b. false

b. False (shows how many units of a product or service consumers will demand during a specific period of time at different prices)

Which of the following refers to variability in a service's quality? a. delivery gap b. heterogeneity c. communication gap d. perishability e. service gap

b. Heterogeneity

All of the following groups are included in the diffusion of innovation curve except a. early adopters b. nonadopters c. early majority d. innovators e. late majority

b. Nonadopters

The commercial airline industry is considered what type of market? a. duopoly b. oligopolistic competition c. monopolistic competition d. monopoly e. pure competition

b. Oligopolistic competition

The marketing of services differs from product marketing because services are all of these EXCEPT a. inseparable b. renewable c. intangible d. perishable e. heterogeneous

b. Renewable

Marketers with successful brands sometimes hesitate to expand their brands because a. manufacturing divisions usually control brand expansion and are often in conflict with the marketing division. b. it is costly to maintain many product lines, and it might weaken the brand's meaning. c. FTC regulations limit the number of products that can be marketed under an individual brand. d. the current economy can support only a limited number of product options.

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

Sophie made pies and sold them from her food truck to local businesses. This is an example of a(n) a. indirect marketing channel b. wholesale operation c. direct marketing channel d. distribution center e. simplified transaction

c. Direct marketing channel (no intermediates between the buyer and seller)

One important purpose of a brand is to a. reduce product packaging. b. sell advertising space. c. increase consumer recognition and awareness of product offerings. d. minimize product line depth needed to be effective. e. meet government regulations.

c. Increase consumer recognition and awareness of product offerings.

Sean relocated to take a new job, and when he got sick he needed to find a doctor. He discovered during the visit that he didn't like the one he had chosen, and he knew he'd never go back to that doctor. From a marketing perspective, his situation highlights one of the key differences between products and services, known as a. heterogeneity b. professional competence c. inseparability d. intangibility e. perishability

c. Inseparability (medical services are inseparable, doctor's service was "produced" at the time of the visit)

Hollywood studios typically release movies targeted toward general audiences (G- or PG-rated movies) during the summer when children are out of school. The timing of the release pertains to the product's a. research and development. b. test marketing. c. launch. d. evaluation. e. premarket test.

c. Launch

Which element of the marketing mix specifically deals with supply chain management? a. price b. production c. place d. promotion e. product

c. Place (consists of activities related to the distribution of products)

Consumers generally believe that ______________ is one of the most important factors in their purchase decisions. a. perception b. product c. price d. place e. promotion

c. Price

Stores like Home Depot and Costco act as wholesalers when they a. take delivery in whole-lot quantities b. compete with each other c. sell to contractors or restaurant owners d. sell products for distributors e. sell directly to consumers

c. Sell to contractors or restaurant owners

When the price for Blu-ray players dropped, the demand for DVD players went down, so DVD players and Blu-ray players are a. superior products. b. interchangeable products. c. substitute products. d. complementary products. e. outsourced products.

c. Substitute products (changes in demand are negatively related)

All of the following are included in the full price of a product or service except a. taxes. b. travel costs. c. the price of alternative products and services. d. value of the consumer's time. e. shipping.

c. The price of alternative products and services.

In countries like the United States, services a. have almost been replaced by technology. b. are a small portion of GDP relative to manufacturing. c. account for an increasing share of jobs. d. will decrease in demand as the population ages. e. are replacing property taxes as a source of government revenue.

c. account for an increasing share of jobs. (developed countries are increasingly dependent on services)

Food preparation, lawn maintenance, and house cleaning services are all examples of a. services an aging population will decrease the demand for. b. services shifted abroad because costs are lower in developing countries. c. household maintenance activities that people increasingly pay others to perform. d. the ability of empowerment to create tangible service products. e. the price elasticity effect on services demand.

c. household maintenance activities that people increasingly pay others to perform (people pay a high value for convenience and leisure)

All of the following are benefits of new product development to a firm EXCEPT a. creating diversification and reducing risk. b. satisfying the changing needs of current and new customers. c. reducing the costs of production. d. avoiding market saturation from products that have been on the market for a long time. e. keeping up in a market with short product life cycles where sales come mostly from new products.

c. reducing costs of production.

In general, prices should not be based on costs because a. producers need to avoid creating cost competitive parity debate. b. producers rarely know what their costs are. c. customers are always right. d. consumers make their purchase decisions based on perceived value. e. consumers are cost-conscious

d. Consumers make their purchase decisions based on perceived value.

What situation is occurring if a 1 percent decrease in price results in more than a 1 percent increase in quantity demand? a. Demand maintains the status quo. b. Demand is cross-price elastic. c. Demand results in the income effect. d. Demand is price elastic. e. Demand is price inelastic.

d. Demand is price elastic. (price elasticity of less than -1.0 reflects elastic demand)

A demand curve is built on the assumption that a. income is derived from demand. b. price remains the same, and fixed costs change. c. the firm does not advertise. d. everything but price and demand remains the same.

d. Everything but price and demand remains the same.

Adidas Group owns Reebok and Rockport—both of which offer different types of shoes. Having a variety of brands allows adidas to use a differentiated targeting strategy to a. utilize geographic segmentation. b. engage in micromarketing for hard-to-fit shoe customers. c. generate economies of scale in advertising expenditures. d. obtain a bigger share of the shoe market. e. use mass marketing techniques.

d. Obtain a bigger share of the shoe market.

Firms that use the same brand name for new products can spend relatively less on marketing costs for the new product because a. consumer loyalty can be bought for less now compared to the past. b. brand equity can be obtained only by means of product line depth. c. well-known brands are less likely to introduce brand extensions. d. people already know what the brand means.

d. People already know what the brand means.

The complete set of all products offered by a firm is called its a. product breadth. b. product line. c. product categories. d. product mix. e. product line depth.

d. Product mix.

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 a. observability b. compatibility c. associated services d. relative advantage e. trialability

d. Relative advantage

Gary is the marketing manager for an automobile dealership. His boss tells him the firm's primary goal is to increase its local market share from 15 to 30 percent. His firm is using a ________ orientation. a. profit b. competitive c. product development d. sales e. customer satisfaction

d. Sales (sets prices with the goal of increasing sales levels)

The owners of hotels whose services are produced and consumed at the same time know that consumers do not have the opportunity to try out their service before purchasing. Many hotels use ____________ to overcome the problem of inseparability of services. a. perishability gap analysis b. promotional discounts c. point-of-purchase displays d. zone of tolerance allowances e. satisfaction guarantees

e. Satisfaction guarantees

By adding new product lines beyond its core business of computer software, like the Zune MP3 player and Xbox 360 game system, Microsoft primarily benefits by a. satisfying the changing needs of the technological research staff. b. keeping up in a market where sales come mostly from new products. c. spreading out production costs. d. avoiding market saturation from products that have just been introduced to the market. e. creating diversification and reducing risk.

e. creating diversification and reducing risk.

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.

target return