Exam 2 Marketing
A manufacturer has fixed costs of $100,000, a variable cost of $10 per unit of output, and break-even volume of 50,000 units. What should the manufacturer's unit cost be in order to break even?
$12
A product has three distinct layers. The second layer is the ________, which is the physical good or delivered service.
Actual product
Fixed costs ________.
Are costs that do not vary with production or sales level
The concept of ________ encompasses the beliefs and associations that a consumer has about a brand.
Brand meaning
When performing a break-even analysis, the manufacturer should consider all of the following EXCEPT ________.
Competitors' Pricing
A consumer doesn't have to learn anything new to use a(n) ________.
Continuous Innovation
________ involves setting prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for effort and risk.
Cost-based pricing
________ pricing uses buyers' perceptions of value as the key to pricing.
Customer value-based
Consumers must engage in a great amount of learning to use a(n) ________ because no similar product has ever been on the market.
Discontinuous innovation
Which of the following is most likely a fixed cost?
Facility rental payments
As production moves up, the average cost per unit decreases because ________.
Fixed costs are spread over more units
Which of the following is essentially no branding at all?
Generic branding
When McDonald's and other fast food restaurants offer "value menu" items at surprisingly low prices, they are most likely using ________ pricing.
Good-value
________ pricing refers to offering just the right combination of quality and gratifying service at a fair price.
Good-value
Which of the following involves introducing less-expensive versions of established, brand name products?
Good-value pricing
________ pricing involves charging higher prices on an everyday basis but running frequent promotions to lower prices temporarily on selected items.
High-low
Diffusion refers to
How the use of a product spreads throughout a population
________ are the last in the population to adopt a new product.
Laggards
Through ________, one firm sells another firm the right to use a legally protected brand name for a specific purpose for a specific period of time.
Licensing
A product has three distinct layers. The most basic level is the ________, which consists of all the benefits the product will provide for consumers or business customers.
core product
Which of the following processes does value-based pricing reverse?
cost-based pricing
What sets the ceiling for product prices?
customer perceptions of the product's value
The final stage in the product life cycle is ________.
decline
Which of the following price adjustment strategies involves reducing prices to reward customer responses such as volume purchases, paying early, or participating in sales-support programs?
discount and allowance pricing
A(n) ________ is a pronounced modification to an existing product that requires a modest amount of learning or change in behavior to use it.
dynamically continuous innovation
Retailers such as Costco and Walmart charge a constant, daily low price with few or no temporary price discounts. This is an example of ________ pricing.
everyday low
When a company sets a high price for a new product with the intention of reducing the price in the future, it is using the ________ pricing strategy.
market-skimming
The sales peak typically occurs during which stage of the product life cycle?
maturity
Companies that adopt value-added pricing ________.
attach value-added features and services to differentiate their offers and support their higher prices
A quantity discount is a price reduction for buyers who ________.
buy merchandise in bulk
Using ________ pricing, companies are able to turn their trash into cash, allowing them to make the price of their main product more competitive.
by-product
Which of the following involves setting prices based on a rival firm's strategies, costs, prices, and market offerings?
competition-based pricing
A ________ is a modification to an existing product.
continuous innovation
________ involves designing and producing the container or cover for a product.
Packaging
________ is the only element in the marketing mix that produces revenue.
Price
________ refers to the amount of money charged for a product or service.
Price
________ refers to a measure of the sensitivity of demand to changes in price.
Price elasticity
Which of the following product mix pricing strategies involves pricing multiple products to be sold together?
Product bundle pricing
The product life cycle concept can be applied by marketers as a useful framework for describing how ________.
a market responds to a product over time
Which stage in the product life cycle is characterized by rapidly increasing sales and increasing profits?
growth
The first phase of new product development is ________.
idea generation
If demand hardly changes with a small change in price, the demand is ________.
inelastic
Cost Plus pricing
involves adding a standard markup for profit
Companies that set a low price for a new product in order to attract a large number of buyers and a large market share are using the ________ strategy.
market-penetration pricing
What sets the floor for product prices?
product costs
Low-interest financing and longer warranties are both examples of ________ pricing.
promotional
What type of pricing is being used when a company temporarily prices its product below the list price or even below cost to create buying excitement and urgency?
promotional pricing
Which of the following is a cost-based approach to pricing?
target return Pricing
A ________ is the legal term for a brand name, brand mark, or trade character.
trademark
Costs that change with the level of production are referred to as ________.
variable costs
