MARKETING ch. 11,12,13,14
brand licensing
- is a great way to generate additional revenue - can be an effective way to attract visibility for a brand
all of the following are included in the main criteria used for determining how "good" a brand is, or how much equity it has except
brand conceptualization
the basic reason manufacturers spend time and money building their own brands is to
build brand equity
which of the following would most likely be a loss-leader pricing tactic?
buy one box of cereal at the regular price, get one free
if firms strategize according to the premise that they should measure themselves primarily against firms challenging them directly for customers, they have adopted a (BLANK) orientation
competitor
competitive parity and status quo pricing are examples of which type of pricing orientation?
competitor orientation
products whose demands are positively related to one another are known as (BLANK) products
complementary
typically, who determines the product's or service's value in relationship to that of its close competitors?
customers
service quality is defined as
customers' perceptions of how well a service meets or exceeds their expectations
marketers can take advantage of the variable nature of services by
customizing services to meet customers' needs exactly
in the United States, it is considered unethical and illegal for advertisements to (BLANK) the consumer so much that the person is harmed
deceive
price advertisements should never
deceive customers to the point of doing harm
firms with products in the (BLANK) stage either position themselves for a niche segment of diehard consumers or those with special needs, or they completely exit the market
decline
once a product stops generating sales or profits, or sales and profits are very low, the product is in the (BLANK) stage of the product life cycle and eventually exits the market
decline
Colgate has a line of oral care products including toothpaste, toothbrushes and teeth whitening products. these products represent the (BLANK) of the line
depth
which of the five Cs of pricing is the first step?
determining company objectives
how can a company find its way out of a market characterized by pure competition?
differentiate the product in some way, even by packaging, so customers will see it as distinct
the process by which the use of a new product or service spreads throughout a market group is referred to as
diffusion of innovation
the process by which the use of an innovation, whether it be a product or service, is spread throughout a market group over time and over various categories or adopters, is known as
diffusion of innovation
the process by which the use of an innovation—whether a product, a service, or a process—spreads throughout a market group, over time and across various categories of adopters, is referred to as
diffusion of innovation
marketers with luxury brands use brand extension cautiously in order to avoid
diluting the core brand
(BLANK) fairness refers to customers' desire to be compensated a fair amount to correct a perceived loss that resulted from a service failure
distributive
(BLANK) pertains to a customer's perception of the benefits he or she received compared with the costs (inconvenience or loss)
distributive fairness
through innovation, firms often create a broader portfolio of products, which help them (BLANK) and enhance firm value better than a single product
diversify their risk
the (BLANK) stage of the product life cycle is marked by a growing number of product adopters, and increases in both the number of competitors and the number of available product versions
growth
usually, during the (BLANK) stage of the product life cycle, the typical consumers are early adopters, and there are increases in the number of competitors
growth
Coca-Cola is a huge national brand manufacturer. by owning its own brands, Coca-Cola
has greater control over its marketing strategy
identify one of the disadvantages from being a first mover
having to establish the market all alone
innovators are a critical group of new product adopters because they
help the product gain market acceptance
a hair stylist who gives a bad haircut in the morning because he or she stayed out late the night before is an example of which core difference when marketing services?
heterogeneity
(BLANK) can create excitement and attract customers through the "get them while they last" atmosphere that occurs during a sale
high/low pricing
the early (BLANK) represents the earlier half of the two largest categories of consumer on the diffusion of innovation curve
majority
in the delivery of good service, employees usually take their cue from the attitude and actions of (BLANK), which sets policy and have the ability to influence the entire corporate posture on quality service performance
management
a product in the (BLANK) stage of the product life cycle has a high number of competitors and competitive products
maturity
from the customer's perspective, the relationship between a product's or service's benefits and costs is called
perceived value
place each of the following categories of consumers in the order in which they adopt a product, beginning with the innovators at the top
- innovators - early adopters - early majority - late majority - laggards
which of the following are reasons for the increased dependence of developed countries on service-oriented economies?
- it is less expensive for firms to manufacture products in less developed countries - people increasing hire people for maintenance-type work that they used to do themselves - people place a high value on leisure
risks associated with repositioning a product include which of the following?
- losing many of the loyal customers the brand has - high costs to change the packaging
product development or product design entails a process of balancing which types of considerations?
- manufacturing - engineering - marketing
which of the following are major reasons for product failures in the market?
- poor positioning of the product - neglecting to do appropriate product testing - targeting the wrong market segment
which of the following are components of the augmented product?
- product warranties - product support
key characteristics of the introduction stage are that
- profits are low - start up costs are high
channel members include which of the following?
- retailers - manufacturers - wholesalers
when firms measure the success of a new product, their assessment includes three factors
- satisfaction of financial requirements - the extent of acceptance by consumers - satisfaction of technical requirements
the customer orientation strategy increases value by doing which of the following?
- setting prices to match customer expectations - focusing on customer satisfaction
which of the following are examples of monetary sacrifices included in the overall price?
- shipping - travel costs
competitive brands add value for the consumer by
- signifying a distinct level of quality - identifying unique features and attributes that are easy to distinguish
when products reach the growth stage of the product life cycle, the market manager must study the customers and know their preferences in factors such as
- styles - features
without innovation, what options would be available to the firm?
- take current products to new markets - continue to market current products to current customers
a firm may set low prices to which of the following?
- take market share away from competitors - discourage new firms from entering the market - encourage current firms to leave the market
which of the following are disadvantages of test marketing in comparison to premarket tests?
- test marketing takes longer to carry out - test marketing costs more
which of the following are potential sources of heterogeneity of service quality at a hair salon?
- the same hair stylist working at different times of the day, week, or month - two different hair stylists working at the same location
after Jennifer booked a hotel room she had seen advertised, she discovered that the price advertised was not available during the weekend, and a three-day minimum stay was required. this is an example of a (BLANK) gap
communication
physicians regularly overstate the expected recovery time from surgery, knowing that managing patients' expectations will reduce the (BLANK) gap associated with their service
communication
when Dr. Putt invented his Eye-Over-the-Ball (EOB) golf putting device, he knew during the introductory stage
sales would be low and profits nonexistent, but he would attract golf equipment innovators
t or f : since test marketing costs are high, a company may choose to launch a new product without extensive test marketing and instead rely on instinct
true
true or false: customers are one of the five Cs of pricing?
true
Marisol bought a particular washing machine because of its warranty and the product support the store provided in terms of delivery and installation. Marisol's decision was based on (BLANK)
associated services
the knowledge of and courtesy by employees and their ability to convey trust and confidence describes which service quality dimension?
assurance
the service dimension called (BLANK) refers to the ability of the firm's employees to convey trust and confidence
assurance
brand name, features, design, quality level, and packaging are all considered (BLANK) of actual products
attributes
if a brand has a high degree of brand (BLANK), it means that most consumers are familiar with the brand and what it stands for even if they do not use the brand
awareness
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 (BLANK) tactic is a deceptive practice because the store lures customers in with a very low price on an item, only to aggressively pressure these customers into purchasing a higher-priced model by disparaging the low-priced item, comparing it unfavorably with the higher-priced model, or professing an inadequate supply of the lower-priced item
bait-and-switch
what is the break-even point for selling a new video game if fixed costs are $50,000, the variable costs are $20 per unit, and the contribution per unit is $40?
$1,250
which of the following is NOT a dimension of service quality measured by the zone of tolerance?
accuracy
by providing good customer service, firms (BLANK) their products
add value to
the Apple iPod was really accepted by consumers in part because it was an easy way to listen to music anywhere, with substantial improvements over portable CD players. this is an example of a relative (BLANK) within the diffusion process
advantage
(BLANK) refers to a group session in which participants work together to generate new ideas
brainstorming
suppose that you work for an advertising agency and are brought into a meeting where everyone is asked to generate ideas for names for a new beach resort. you are engaged in (BLANK), a form of new idea generation
brainstorming
the set of assets and liabilities linked to a brand that add to or subtract from the value provided by a product or service is (BLANK) equity
brand
one consumer research exercise asks consumers to say the first things that occur to them when they hear a brand name. for example, for the brand "Coca-Cola," someone might respond, "Red and white cans, sweet, carbonated." these are examples of
brand associations
the personal connections that consumers make with a brand and its key attributes is referred to as
brand associations
(BLANK) measures how many consumers in a market are familiar with a brand and what it stands for
brand awareness
Raymond 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. for Raymond, the total cost of opening the new branch and remaining open for one year will be
$550,000
calculate the break-even point for Don's Drone Company: the company has $3 million in fixed costs, its average drone sells for $100, and variable costs are $60 per unit, how many units does the company need to sell to break even?
$75,000
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
$80
during test marketing, the potential elements of the marketing mix that may be used include which of the following?
- advertising - coupons
some brands become so predominant in a particular product market that they become synonymous with the product itself over time. which of the following brands is an example of this situation?
Kleenex
Mary went to the local supermarket, where she shopped regularly, to purchase her groceries for the week. which of the following was a delivery gap that resulted in a service failure by the grocery store?
Mary had to wait a long time in the checkout line because the clerk kept making errors using the cash register
which of the following would NOT be a product?
all of these are products
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
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 is an example of
an R&D consortia
when a firm chooses to have a brand legally protected through trademarks and copyrights, the brand becomes
an asset to the firm
some credit cards provide free liability insurance, funded by the bank issuing the card, when a customer pays for a rental car using the card. this extra insurance is an example of
an associated service
in many cases, pioneers lose their market lead and initial market share to imitators who
capitalize on pioneers' weaknesses
variable costs (BLANK) production volume
change with
which of the following is NOT an objective of a market penetration pricing strategy?
charge the highest price possible
depending on the product category, the time element of the diffusion curve varies. for some product categories, the time it takes to get from innovators to laggards to purchase a product is shorter. which of the following would be expected to have the shortest time frame for full diffusion
children's toys
when developing a pricing strategy, channel members should
clearly communicate their pricing goals to one another
Yum Brands owns a number of well-known fast food franchises. often, consumers will see a KFC with a Taco Bell or a Pizza Hut with a Taco Bell sharing the same building or location. in doing this Yum Brands is using a (BLANK) strategy
co-branding
one of Taco Bell's most successful new products has been its "Doritos Locos Tacos," tacos with shells in the flavors of Doritos taco chip varieties. this is an example of
co-branding
one way for a firm to reduce the (BLANK) gap is to ensure that the sales force does not make promises the firm cannot keep
communications
(BLANK) means allowing employees to make decisions about how service is provided to customers
empowerment
when a firm such as Ruth's Christ Steak House tells servers to "use your best judgement" in serving a customer who is not satisfied with his $40 steak, it is allowing the server to make decisions at the point of delivery. this is called
empowerment
when Dr. Horton checked in at the Ritz-Carlton, it was 3 a.m. he had been traveling for over 12 hours and was exhausted. his suit, which he needed for a speech that morning, looked like he had slept in it. Karen, the night clerk, offered to find a 24-hour dry cleaner and have the suit cleaned while Dr. Horton got a few hours of sleep. Karen's actions are an example of
empowerment of employees to meet customers' needs
marketing expenditures allocated carefully can result in greater brand recognition, awareness, perceived value, and consumer loyalty for the brand, which all enhance the brand's
equity
successful first movers create a market or a product category. they often benefit from being readily recognizable to consumers and
establishing an early market share lead
effective service recovery entails all of the following except
estimating the damage
by reducing consumers' search costs, (BLANK) adds value; consumers can spend less of their valuable time comparing prices, including sale prices, at different stores
everyday low pricing
with a (BLANK) strategy, companies stress the continuity of their retail prices at a level somewhere between the regular, nonsale price and the deep-discount sale prices their competitors may offer
everyday low pricing
a continuing dilemmas for marketers of services is to understand buyers' (BLANK), which means to understand in advance what they will be delivered based on their previous experiences and knowledge
expectations
with the (BLANK) effect, as sales continue to grow, the costs continue to drop, allowing even further reductions in the price
experience curve
a restaurant is facing a problem in service delivery on a night when there are twice as many customers dining as usual. an integral part of recovery of the service dilemma is to provide both distributive and procedural (BLANK) in resolving the delays in getting all customers served
fairness
a firm with a primary objective of very high sales growth will have the same pricing strategy as a firm with a primary objective of being a quality leader
false
if Martha decides to use a (BLANK) branding strategy to grow the Coffee Collective, she would distribute a series of Coffee Collective branded teas and coffees through the local supermarket
family
if all three grocery stores in town decide to charge the same price for a gallon of milk, what type of pricing tactic is being used?
horizontal price fixing
which of the following is the most logical example of complementary products?
hot dogs and hot dog buns
(BLANK) generation refers to the first stage in the process by which firms develop a new product
idea
the first step in the product development process is
idea generation
although there are numerous stages in the product development process, every firm starts to develop new products through (BLANK) and then finishes with an evaluation of (BLANK)
idea generation ; results
in addition to providing service employees with emotional and instrumental support, management should offer the staff (BLANK) that reward them for providing customers with good service
incentives
buying a service, such as a haircut, a medical treatment, or a lawyer's advice, is perceived as more risky to the consumer, because the service cannot really be sampled in advance nor experienced without the provider. this service characteristic is called
inseparability
when a dentist fills a cavity in a patient's tooth, there is the element of (BLANK) that indicates the dentist should try to make the interaction as pleasant as possible since she must be present for the service
inseparability
one of the basic ways in which services differ from products is that production and consumption are (BLANK) from each other. consequently, service providers often include options for the customer to become more involved in the production of the service, which usually results in greater customer satisfaction
inseparable
when getting a haircut, the customer not only is present, but also may participate in the service process. this is an example that the production and consumption of this service is
inseparable
when marketers state that services are (BLANK), they are referring to the fact that services are produced and consumed at the same time
inseparable
because of the (BLANK) of services, the images that marketers use must reinforce the benefit or value that a service provides
intangibility
Bill's father is going to have major heart surgery. the uncertainty the family is feeling is in part due to health care services being (BLANK). in other words, health care is a service that cannot be touched, tasted, or seen like merchandise can
intangible
the most fundamental difference between a product and a service is that services are (BLANK), which means they cannot be touched, tasted, or seen like a pure product can
intangible
during the (BLANK) stage of the product life cycle, there are few but an increasing number of competitors
introduction
the (BLANK) stage of the product life cycle is characterized by initial losses to the firm due to high start-up costs and low levels of sales revenue as the product begins to take off
introduction
stages in the product life cycle
introduction, growth, maturity, decline stage
a strategy of setting prices based on how customers develop their perceptions of value can often be the most effective pricing strategy, especially if the strategy
is supported by consistent advertising and distribution strategies
firms can measure the success of a new product, by asking three questions. which of the following is NOT one of these questions?
is the product already offered by competing firms?
what makes a high/low pricing strategy appealing to sellers?
it attracts two distinct market segments
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
all of the following statements regarding secondary packaging are true except
it is of little value to the average consumer
which of the following is correct with respect to predatory pricing?
it is outlawed by the Sherman Act and Federal Trade Commission Act
one of the best ways for managers to reduce the (BLANK) gap is to conduct ongoing research and regularly talk with customers to determine what they expect to get from the brand and the firm
knowledge
the marketing manager needs to communicate with customers and employees on an ongoing basis in order to understand buyers' expectations and to reduce the (BLANK) gap
knowledge
an important element of a product is its (BLANK), which is a communication tool that can convey key product benefits to consumers
label
(BLANK) tend to avoid change, rarely vary from traditional goods and services, and in some cases never attempt to adopt new types of products
laggards
during the decline stage of the product life cycle, (BLANK) who have not yet tried the product or service will be entering the market for the first time
laggards
when the sequel to Star Wars: The Force Awakens eventually shows up on their regular television networks, this group might watch it
laggards
in the United States, most consumer packaged goods found in grocery and discount stores are already in the (BLANK) stage, which is characterized by the adoption of the product by the late majority and intense competition for market share among firms
maturity
not every product follows the same life cycle curve; many products stay in the (BLANK) stage for a very long time, often for years, due to strategies like adding new features to established products
maturity
not every product makes it through the life cycle to the last two stages of the PLC to reach stage three (BLANK) or stage four
maturity
the (BLANK) stage of the product life cycle is characterized by the adoption of the product by the late majority and good profitability
maturity
by changing a standard from "be nice to customers" to "greet every customer, and if possible by name," a services marketing manager has created a (BLANK) goal
measurable
the complete set of all products and product lines offered by a firm is called its product assortment, or product
mix
because service providers cannot inventory or stockpile services, such as haircuts, a difficult issue for serve providers is that of
perishability
services are (BLANK) in that they cannot be stored for use in the future
perishable
customers tend to believe they have been treated fairly if the service providers follow specific company guidelines. this is an example of
procedural fairness
with regard to complaints, (BLANK) refers to the perceived fairness of the process used to resolve customer complaints
procedural fairness
if a firm has a positive result from the market testing the next step is known as (BLANK) launch
product
if a new product concept gets positive evaluations from potential customers during concept testing, the next step for a firm is
product development
a good or service may pass through many stages as it establishes itself in the marketplace. marketing managers refer to this as the (BLANK) cycle
product life
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
introduced in 1920, Band-Aid now has more than 40 products to help heal cuts and scrapes. Band-Aid has, over the years, increased their
product line depth
a product mix typically consists of (BLANK), or groups of associated items
product lines
by focusing on target profit pricing, maximizing profits, or target return pricing, a firm is implementing a (BLANK) orientation
profit
instituting a company-wide policy that all products must provide for at least an 11 percent profit margin to reach a particular profit goal for the firm is an example of which pricing orientation?
profit oriented
managers of fast-food restaurants struggle with a rapid turnover of personnel. employee turnover rates of 100 to 200 percent annually are common. the work environment is difficult and customers can often be demanding. one of the first steps managers can take to help workers deliver quality service is to
provide emotional support and concern for their employees
with (BLANK), there are a large number of sellers of standardized products or commodities that consumers perceive as substitutable, such as grains, gold, meat, spices, or minerals
pure competition
brand equity is determined by four aspects of a brand. which of the following is NOT one of the four aspects?
quality level
Brad always buys and uses Nike brand golf balls. if he finds a Titleist or Callaway ball in the rough, he gives it away. brand-loyal golfers like Brad allow Nike to charge a higher price and not lose many sales. by building a strong brand, Nike has effectively
reduced the price elasticity of demand for its products
in an advertisement, Sears provides a price, in smaller print and labeled "Reg.," to indicate that $35 is the regular price of Levi jeans. in addition, the advertisement highlights the current "sale" price of $31. the "Reg." price appears as an example of
reference pricing
Cheryl will let only Martiné cut her hair. she has tried other stylists, but she knows from experience that Martiné cuts her hair well every time. for Cheryl, (BLANK) is the most important of the five service quality dimensions
reliability
a university that focuses its advertising on offering a sound curriculum with consistent course offerings, extensive placement services and internships is focused on which service quality dimension?
reliability
the new hotel manager asked the chef, "are you sure you know how to cook Beef Wellington?" which of the service dimensions was the hotel manager expressing concern about?
reliability
five dimensions of service quality
reliability - ability to perform the service dependably and accurately responsiveness - willingness to help customers and provide prompt service assurance - knowledge and courtesy by employees and their ability to convey trust and confidence empathy - caring, individualized attention provided to customers tangibles - appearance of physical facilities, equipment, personnel, and communication materials
fixed costs
remain at the same level despite changes in production
Abercrombie and Fitch (A&F) was founded in 1892 as a sporting goods, camping and hunting gear store. A&F is now known as a casual luxury lifestyle brand of clothing for college students. to make this change, A&F had to (BLANK) its brand
reposition
(BLANK) is the willingness to help customers and provide prompt service
responsiveness
(BLANK) involves taking apart a product, analyzing it, and creating an improved product that does not infringe on the competitor's patents, if any exist
reverse engineering
Joanna learned from customer satisfaction surveys that diners in her restaurant wanted to be able to make substitutions. she has decided to allow substitutions, but has not told all of the servers of this. Joanna is demonstrating a (BLANK) gap, causing her restaurant to provide a lower degree of service than she intends
standards
McDonald's has a policy that drive-through customers will receive orders within 1 minute of paying for the order. this establishes a (BLANK) gap for the service quality that doesn't meet this expectation
standards
the (BLANK) gap pertains to the difference between the firm's perceptions of customers' expectations and the service standards the firm sets
standards
the (BLANK) gap reflects the difference between customers' expectations and the firm's perception of those customer expectations
standards
when Sarah went to the hotel lobby for the free hot breakfast provided by the hotel, she found a poor selection of food that was not only stale, but also tasteless. this is an example of a (BLANK) gap
standards
firms tend to spend (BLANK) to market to loyal customers compared to marketing to new customers
substantially less
a percentage increase in the quantity demanded for Product A results in a percentage decrease in quantity demanded for Product B. products for which demand is negatively related are known as (BLANK) products
substitute
when the price of portable MP3 players dropped, the demand for CD players declined. portable MP3 players and CD players are
substitute products
when a consumer buys another brand of the same type of product due to an increase in price or a decrease in value, this is referred to as the (BLANK) effect
substitution
a university that promotes itself as a very traditional campus with an old-world look and feel, where the facilities are manicured and the dorm rooms are large is focusing on which service quality dimension?
tangible
Gerald's Tire Service provides each employee with a clean, sharp-looking uniform. it also instructs employees to put all tools back where they belong and keep the work area clean and uncluttered. Gerald's Tire Service emphasizes (BLANK) in the five service quality dimensions
tangibles
firms usually implement a (BLANK) strategy when they have a particular profit goal as their overriding concern
target profit pricing
firms that want to achieve a standard markup would likely focus on (BLANK) pricing
target return
firms that are less concerned with the level of profits and more interested in the rate at which profits are generated, relative to their investments, tend to use
target return pricing
when incomes drop, the demand for more expensive products
tends to decrease
if Subway introduced a new Southwestern Club sandwich in South Florida before launching it nationwide, it was engaging in
test marketing
in order to examine the potential success of its 1/3 pound Angus hamburger, McDonald's started offering and promoting the product in three southern cities. this move is an example of
test marketing
when Burger King introduced the new Whopper Bar to a limited geographical area prior to a national launch, it was engaging in
test marketing
unlike product, promotion, or place, price is the only part of the marketing mix
that generates revenue
a customer with a complain about the way in which a washing machine repair was made will become increasingly more annoyed with the service provider
the longer it takes to get an answer from the firm
all of the following statements regarding brand loyalty are true except
the marketing costs of reaching loyal customers are typically very high
loyalty toward a particular brand makes other brands seem less substitutable, which decreases
the price elasticity of demand
a reference price might be considered deceptive if
the reference price has been inflated or is fictitious
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
price times quantity is
total revenue
Kristina created a virtual prototype of her new line of swimwear on a website to show to consumers. Kristina will ask consumers what they think of the clothing. which is the most important question that Kristina should ask?
will retailers purchase the swimwear if it becomes available?
firms find that loyal customers help market their product or service though
word of mouth
at the break-even point, profits on the sale of a product are
zero
an important marketing metric used to evaluate how well firms perform on the five service quality dimensions is the (BLANK, which refers to the area between customers' expectations regarding their desired service and the minimum level of acceptable service
zone of tolerance
one of the best methods to ensure that guests at Hilton Hotels receive quality service is to solicit suggestions and feedback from
- guests - employees
which of the following traits are associated with the innovators consumer group?
- highly knowledgeable - risk takers
labels must comply with laws and regulations and must include which of the following?
- ingredients contained in the product - safety precautions
what are some advantages experienced by pioneer firms over later entrants?
- establish an early market share lead - more readily recognizable to consumers - more likely to develop brand loyalties
which of the following are essential to proving a complain of predatory pricing?
- evidence that the prices charged were below the firm's average cost - evidence that the firm meant to eliminate its competition
what is the contribution per unit for selling a new style of tennis shoes if fixed costs are $100,000, the variable costs are $10 per unit, the target return is 20 percent, and the price is $35 per unit?
$25
what is the break-even point for selling a new style of tennis shoes if fixed costs are $100,000, the variable costs are $10 per unit, the target return is 20 percent, and the contribution per unit is $25?
$4,000
which of the following are components of the actual product?
- features / design - brand name
examples of communication media that firms use to create brand awareness include which of the following?
- advertising - publicity
assuming the economy and other factors stay the same, a downward-sloping demand curve for a product shows which of the following?
- as price increases, demand decreases - as price decreases, demand increases
which of the following occur under horizontal price fixing?
- business rivals that produce and sell the same type of merchandise scheme together - price is eliminated as an influence on the consumer's decision-making process
in the customer orientation strategy, firms might sell their products or services at high prices in order to accomplish which of the following?
- communicate exclusivity - enhance the value of the products in consumers' minds - enhance the company's reputation and image
a customer who is dissatisfied with a restaurant's service delivery and finds it to be quite different from what was promised in the advertising is very likely to do which of the following?
- communicate the negative experience via the internet - communicate the negative experience via word of mouth - not return to the restaurant
identify potential impacts to the company when a new product launch is a failure
- company may fail - negative financial impacts - product may not recover from failure
firms engaged in competitor orientation might use which of the following strategies?
- competitive parity - status quo pricing
identify the steps taken by firms that have products in the decline stage of the product life cycle
- completely exit market - target a niche segment
break-even analysis examines the relationship between which of the following?
- cost - price
concept testing can be as simple as a brief written description of the product that might also include
- customer needs it satisfies - visual images
which of the following are risks presented by co-branding?
- customers for the two brands might be too different - co-branding may fail if there are conflicts of interest between the co-brands
the risks associated with brand licensing include which of the following?
- diluting brand equity through overexposure - undervaluing the brand in a licensing agreement
firms decrease depth to do which of the following?
- eliminate unprofitable items - refocus marketing efforts on profitable items
early adopters, although not as fast an innovators, are quick to purchase a new product or service. identify all of the following characteristics that are typically associated with early adopters
- they are less risk seeking than innovators - they tend to be opinion leaders of particular product categories
which of the following are reasons that firms implement a market penetration pricing strategy?
- to establish market share - to discourage competitors - to build sales - to earn profits
the goal behind spending millions on promotion, advertising, and other marketing efforts is
- to maintain profitability - to build consumer loyalty
what does a post launch review help determine?
- whether the launch was a success or failure - whether additional resources are needed - whether changes to the marketing mix are needed
the primary federal agency that oversees food and packaged good labels is the
Food and Drug Administration
which piece of legislation governs price fixing in the United States?
Sherman Antitrust Act
co-branding can enhance consumer perceptions of product quality by linking
a brand to an existing well-known quality brand
when CarMax promises a "no-haggle" pricing structure, it exhibits (BLANK) because it provides additional value to potential used car buyers by making the process simple and easy
a customer orientation
(BLANK) shows how many units of a product or service consumers will demand during a specific period of time at different prices
a demand curve
sales outside of normal channels that employ irregular, though not necessarily illegal, methods of pricing are known as
a gray market
many consumers pay a higher price for green products. this is because, for them, green products have (BLANK) than competitor's non-green offerings
a greater perceived value
heterogeneity in service delivery at a restaurant can result from all of the following EXCEPT
a manager who designs a specific way for all hostesses to accept reservations over the phone
what takes place when two or more firms compete primarily by lowering their prices?
a price war
for which of the following is demand likely to be least sensitive to price increases?
a specific brand of cereal
a product is (BLANK) that can be offered through a voluntary marketing exchange
anything of value to consumers
a tire store finds that its business is heavily skewed to the weekend, and few customers arrive on Monday through Wednesday. since rotating, balancing, and replacing tires is a service that cannot be stockpiled, one o the dilemmas facing the firm is
balancing supply and demand
in addition to empowering and rewarding service providers, as well as offering instrumental support, service managers are advised to
be consistent and predictable in their support
in the case of Band-Aid adhesive bandages, the brand name has
become synonymous with the product itself
in theory, the contour of the product life cycle is (BLANK) with regard to sales and profits
bell-shaped
during (BLANK) potential consumers examine a product prototype in a real-use setting to determine its functionality, potential problems, and other issues specific to its use
beta testing
if a few of Nintendo's customers are asked to try out a new video game that has not yet been released on the market, this is an example of
beta testing
if you are a customer of a company and are asked to use a product prototype, you would be engaging in what type of testing
beta testing
in the 1980s the Coca-Cola Company introduced New Coke. the product was a total failure and in the short term greatly hurt the reputation of Coca-Cola. this is an example of
brand dilution
a (BLANK) refers to the use of the same brand in a different product line
brand extension
the Victorinox Swiss Army Company is well known for their Swiss Army Knives. the company also makes and markets watches, travel gear, cutlery and even fragrances. this represents a (BLANK) strategy
brand extension
a contractual arrangement between firms, whereby one firm allows another to use its brand name, logo, symbols, and/or characters in exchange for a negotiated fee, is called
brand licensing
when Disney flooded retail stores with products based on its movie Frozen, this illustrated
brand licensing
when Disney launches a popular new movie, the aisles of your local toy store are soon flooded with toys featuring characters from that movie. this is an example of
brand licensing
which k-mart paid Martha Stewart (famous for her business related to lifestyle and the home) a fee in return for permission to introduce a line of towels and other housewares bearing Stewart's name, it was an example of
brand licensing
the strategy in which marketers change a brand's focus to target new markets, or realign the brand with changing market preferences, is known as
brand repositioning
consumer packaged goods companies sell products across many different product lines. these companies have significant (BLANK) in their product mixes
breadth
to capture new or evolving markets, a firm may increase (BLANK) to compete in new product areas
breadth
a useful technique that enables managers to examine the relationships among cost, price, revenue, and profit over different levels of production and sales is called
break-even analysis
the point at which the number of units sold generates just enough revenue to equal the total costs is the
break-even point
firms are willing to spend lots of money, such as on very expensive Super Bowl ads, to market a brand in order to
build brand awareness
Dopson's Hardware was in bad financial shape. it owed so much money that vendors put the store on a cash-only delivery basis. as a result, the store had a dwindling inventory of goods to sell. whenever a customer asked about an unavailable item, the owner directed the sales staff to say that it was on backorder and would be in stock next week. when the customer returned, the item was still unavailable. The owner's policy created a (BLANK) gap
communication
if the American Hotel has successfully closed the standards, knowledge, and delivery gaps in providing outstanding service, it is still necessary to close the fourth service gap, the
communications
since service delivery is not always uniform, it is important for the provider to be sure to close the (BLANK) gap and not promise more in their messages to buyers than they can deliver on a regular basis
communications
for many Americans, the daily ritual of having a coffee is almost automatic and assumed. the same can be said for the Chinese but with tea. for a firm that is marketing a product, this example serves as a reminder to consider the (BLANK) of your product and its intended target market
compatibility
firms must continually introduce new products with improved features and find new users for existing products in order to defend its current market share and intense
competition
if a firm sets prices similar to major competitors' prices, this is an example of (BLANK) pricing
competitor parity
horizontal price fixing occurs when
competitors that produce and sell competing products work together to control prices
an effective method to assess customer service expectations is to analyze customer (BLANK) behavior in which management is told by buyers what dissatisfies them
complaint
if a firm produces a visual image of an imagined or projected product to bring an idea to life, this is an example of (BLANK) testing
concept
through the effective use of (BLANK) testing, firms may be able to avoid the high costs of product development for product ideas that do not meet customer's expectations
concept
Marlene has just downloaded a book from Amazon that she will take on her two-week vacation. the book Marlene has downloaded is considered a
consumer product
brand awareness facilitates decision-making and is especially important for which type of consumer goods?
convenience
consumers invest the least amount of effort when considering the purchase of (BLANK) products
convenience
for most buyers, bread, soap, milk, and soda pop are (BLANK) goods
convenience
what is a product or service for which consumers usually expend no effort toward decision making?
convenience product / service
a candy bar might be a great tasting snack for some people or an energy boost for others. in either case, this describes the
core customer value
the percentage change in the quantity of one product demanded compared with the percentage change in price in another product is called (BLANK) - price elasticity
cross
(BLANK) is the percentage change in the quantity of Product A demanded compared with the percentage change in price in Product B
cross-price elasticity
a (BLANK) orientation explicitly invokes the concept of value such as when a firm uses a "no-haggle" price structure to make the purchase process simpler and easier
customer
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
firms reward loyal customers through (BLANK) programs
customer relationship management
which of the following is NOT an advantage of brand loyalty?
customer switches brands often
without new products or services, the values of the firm will ultimately
decline
if a firm deletes an entire product line, it has
decreased its breadth
in the classic downward-sloping demand curve, as price increases, demand for the product or service
decreases
a firm can delete entire product lines to address changing market conditions; this is also known as
decreasing breadth
for many years, General Electric had a corporate strategy of being among the top three firms in any market in which it operated; if it could not achieve a top-three position, it would exit the market. this strategy often resulted in the company (BLANK) when certain product lines failed to meet this expectation
decreasing product mix breadth
Saltdust Grill is known as the premier restaurant in town. with its elegant dining area, extensive wine list, and gourmet chef, residents and tourists flock to the restaurant. recently, Trey took a large group to the Saltdust Grill and almost every diner sent their entrée back to the kitchen. the Saltdust Grill was experiencing a (BLANK) gap in service quality
delivery
the graph that shows how many units of a product or service consumers will want during a specific period at different prices is known as the (BLANK) curve
demand
Robin recently bought Voice over Internet Protocol (VoIP) phone service. a few of Robin's friends bought VoIP before she did, but many other friends were interested in Robin's opinions of the new phone service. Robin is a (BLANK) in this product category
early adopter
which purchasing group represents about 13.5 percent of all buyers in the market and is crucial for bringing the other buyer categories to the market?
early adopters
few new products and services can be profitable until which large group of adopters buys them?
early majority
which diffusion of innovation adopter group waits until the "bugs" are worked out of a particular product, in order to avoid risk, but still purchases within the first half of all adopters
early majority
Sufi needs to buy some hand lotion. the hand lotion she usually buys increased slightly in price, so she decides to purchase a cheaper alternative. in this scenario, the market for hand lotions is
elastic
the price elasticity of demand for a teeth-whitening kit is −1. the market for this product is considered
elastic
if the same selection of books were always for sale, with no new titles, there would be no reason to buy more. this is an example of which reason firms must innovate?
fashion cycles
steps to a new product launch
firm confirms its target market - first step firm decides how the product will be positioned - second step firm finalizes the remaining marketing mix variables for the new product - third step
in the provision of a service, there are several possibilities to mismatch the service and customer needs resulting in one of several types of service (BLANK), such as in communications
gaps
during the (BLANK) stage of the product life cycle, firms attempt to reach new consumers by studying their preferences and producing many competing and different product variations
growth
during which stage of the product life cycle does the product gain acceptance, experience increased demand and sales, and encounter increasing competition in the product category
growth
a (BLANK) strategy relies on limited-time offers and other promotions to encourage a temporary boost in sales
high/low pricing
when there are many substitute products available, the price elasticity of demand for a given product will likely be
higher
the (BLANK) effect refers to the change in the quantity of a product demanded by consumers due to a change in their income
income
if a company wants its customers to buy its products regardless of fluctuations in price, it should
increase its brand loyalty
firms add items to their product lines to address changing consumer preferences. for example, an ice cream company might add low-fat offerings to its existing ice cream flavors. this is an example of
increasing depth
in which type of market would demand remain unchanged despite lower prices?
inelastic
when relatively small changes in the price of a product do not generate large changes in the quantity demanded, it can be said that the market for the product is
inelastic
(BLANK) refers to the process by which ideas get transformed into new offerings, including products, services, processes, and branding concepts that will help firms grow
innovation
if a company invests all its time and effort into a new product and the product fails
it will be extremely difficult for the firm to recover
a firm's product line depth is the number of (BLANK) within a product line, as opposed to the number of product lines a firm has
items
consumers are generally (BLANK) sensitive to price increases for necessities like milk than for items such as restaurant dining
less
(BLANK) is an agreement through which one firm buys the rights to use the technology or ideas of another research-intensive firm
licensing
Kellogg's has a long list of ready-to-eat cereals which consumers think of as a similar group of products. Kellogg's ready-to-eat cereals are a product
line
when confronted with an angry and emotional customer, the best first step toward service recovery is to
listen carefully and with sympathy until the customer feels he or she has been heard
often an otherwise horrible service delivery failure can be turned and used to build customer loyalty. to do so, customers must be able to air their grievances and the firm must do what?
listen to them
effective service recovery for an airline when facing a problem, such as a huge snowstorm that shuts down all flights for three days, includes resolving the dilemmas quickly, responding fairly, and (BLANK) customers and their complaints
listening to
(BLANK) lowers the price of an item below the store's cost
loss leader pricing
some states require some minimum markup and prohibit (BLANK) pricing, where items are sold at a price below the store's cost
loss-leader
which pricing tactic lowers the price below store cost?
loss-leader pricing
relative level of sales with the stage of the product life cycle at which this level of sales is typically observed
low - introduction rising - growth peak - maturity dropping - decline
whenever a product has a (BLANK) level of complexity, it will consequently be (BLANK) to try
low ; easy
bait and switch is a deceptive practice because the store lures customers in with a very (BLANK) price only to pressure these customers into purchasing a (BLANK) - priced model
low; higher
the delivery of quality service is the task of everyone in the firm, but the commitment to quality service is established and illustrated best by (BLANK), which establishes policy and sets examples for the entire company
management
Coca-Cola and Nike would be considered (BLANK) brands, while Market Pantry or Archer Farms products (sold at Target stores) would be considered (BLANK) brands
manufacturer ; store
which pricing strategy is characterized by the setting of a low introductory price to help drive consumer awareness and create an incentive for the consumer to buy now?
market penetration strategy
during the (BLANK) stage of the product life cycle, industry sales reach the peak, so firms try to rejuvenate their products by adding new features or repositioning them
maturity
the complete set of all products offered by a firm is its product
mix
(BLANK) occurs when there are many firms competing for customers in a given market but their products are differentiated
monopolistic competition
if a firm in a purely competitive market can differentiate its product or service, it becomes part of a (BLANK) market
monopolistic competition
in many geographic areas, utilities such as water and electricity are available from only one provider. this is an example of a level of competition called a
monopoly
in the utilities industry, there is generally only one provider of power in each region of the country. this is an example of which level of price competition?
monopoly
manufacturer brands are also known as
national brands
one of the key characteristics of brainstorming sessions is
no idea is immediately accepted or rejected
some analysts have attributed the success and quick diffusion of the Apple iPod in part to the white earbuds. at the time, earbuds were not seen as often, and most headphones were blank, not white. as knowledge of the iPod spread, the white earbuds could be seen even if the iPod itself was out of sight. this is an example of which of the factors that affect speed of diffusion?
observability
in terms of marketing, a "product" is something that is
of value to a customer
to reduce the uncertainty of the intangible nature of services, a medical provider will often
offer cues to customers, such as comfortable waiting rooms and sparkling examination rooms with their diplomas on the wall
when only a few firms dominate a market, it is known as (BLANK) competition
oligopolistic
commercial airline travel in the United States is an example of which level of price competition?
oligopolistic competition
the commercial airline industry is considered what type of market?
oligopolistic competition
for new product marketers, early adopters are important because they tend to be
opinion leaders
firms that use the same brand name for new products can spend relatively less on marketing costs for the new product because
people already know what the brand means
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
(BLANK) or breakthrough products are brand new products that establish a completely new market or radically change both the rules of competition and consumer preferences in a market
pioneer
buyers who love to try out new goods and services before the general public accepts them are referred to as
pioneers
effective service recovery entails all of the following EXCEPT
placing blame with the customer to reduce costs
Geico Insurance uses characters like the gecko and humorous associations with (BLANK) emotions to reinforce the brand
positive
(BLANK) is/are illegal under both the Sherman Act and the Federal Trade Commission Act because it constrains free trade and represents a form of unfair competition
predatory pricing
a (BLANK) test is when a company shows potential customers the marketing mix variables and then are surveyed if they would buy or use the product again
premarket
when a firm deliberately prices a product above the prices set for competition products is to entice those customers for whom pricing does not matter, the firm is engaging in (BLANK) pricing
premium
for which of the following is demand likely to be most sensitive to price increases?
prescription drugs
most goods for sale follow the traditional downward sloping demand curve with the exception of (BLANK) products
prestige
with (BLANK) products a higher price might lead to a greater quantity sold, but only up to a certain point
prestige
each point on the demand curve represents the quantity demanded at a specific
price
the equation for price elasticity of demand is the percentage change in quantity demanded divided by percentage change in
price
the overall sacrifice a consumer makes to acquire a product or service is known as
price
the growth phase of the product life cycle is always dynamic. all of the following occur during this phase except
price competition with protracted price wars erodes profits
when firms sell the same product to different resellers (wholesalers, distributors, or retailers) at different prices, it can be considered
price discrimination
the (BLANK) measures how changes in a price affect the quantity of the product demanded
price elasticity of demand
because there are many firms with similar products in purely competitive markets,
price is determined by the laws of supply and demand
(BLANK) appeals to segments of consumers who are willing to pay the premium price to have the innovation first
price skimming
a company that introduces a new, innovative product, such as a television that uses new technology, prices that product at a premium price. this is because the company knows that early adopters and innovators are willing to pay the higher prices. this strategy is known as
price skimming
for (BLANK) to work, the product or service must be perceived as breaking new ground in some way, offering consumers new benefits currently unavailable in alternative products
price skimming
a toothpaste tube is an example of a (BLANK) package
primary
a tube of toothpaste is an example of a (BLANK) package
primary
consumers typically seek convenience in terms of storage, use and consumption from the (BLANK) package
primary
if Martha leveraged a (BLANK) branding strategy to grow her overall business, she might develop a line of imported flavored teas and sell them at the local College Town Food Cooperative using the College Town name for the new product line
private label
Sears sells appliances using its own Kenmore brand name and it sells tools using its own Craftsman brand name. these (BLANK) brands can only be bought at Sears
private-label
after sitting on the tarmac in a delayed flight for three hours, passengers are finally removed from the plane. in dealing with their complaints in the terminal, the airline needs to pay attention to (BLANK) fairness and follow the airline's guidelines concerning delays
procedural
firms are able to gain a better understanding of customers' service expectations by using quantitative and qualitative market (BLANK), which can be extensive and expensive
research
in order for a firm to successfully make a new product out of a competitor's product, that firm must engage in (BLANK) to figure out how to bring an improved version to the market
reverse engineering
firms that use a (BLANK) orientation to set prices believe that increasing sales will help the firm more than increasing profits
sales
sometimes firms selling a pioneering product will set a very low price in order to attract many customers before competitors enter the market. this is an example of a (BLANK) orientation
sales
Bernard's firm has set corporate direction to become one of the leaders in each of its significant market segments. it was Bernard'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 Bernard's effort?
sales-oriented
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
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 (BLANK) to overcome the problem of inseparability of services
satisfaction guarantees
for most products, the UPC code would be located on the (BLANK) package.
secondary
customer (BLANK) refers to human or mechanical activities undertaken by firms to help satisfy their customer's needs and wants
service
customers have certain expectations about how a service should be delivered. when the delivery of that service fails to meet those expectations, a (BLANK) results
service gap
because services are intangible, it is often difficult for customers to determine how a service meets their expectations, which marketers call
service quality
customers' perceptions of how well a service meets or exceeds their expectations is referred to as
service quality
medical services and assisted living care are examples of
services an aging population will increase the demand for
Jack and his wife were in need of a new mattress. they compared mattresses at a few local stores, learning about different brands, before making a purchase. in Jack's case a mattress is most likely a (BLANK) good
shopping
Kendra 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 Kendra, this backpack represents what type of product?
shopping
Rachel has visited several stores comparing sneakers. for Rachel, sneakers would be a (BLANK) product
shopping
a customer's expectations might vary substantially for the same service provider based on the
situation
as a consumer, being an innovator in a given product category can mean engaging in a number of behaviors. which behavior would best illustrate an innovator
sleeping outside Best Buy for the latest game console
Debbie is considering having Botox treatments. she knows she should be careful in getting the treatments and decides to see a doctor who has been highly recommended by her friends even though he lives in another state. she will make the extra effort to see the doctor because she considers this a (BLANK) good or service
specialty
Miguel wants to buy a Jaguar automobile, but the closest dealer is 250 miles from his home. nevertheless, Miguel is going to go to that dealer to buy his car. for Miguel, the Jaguar is a (BLANK) product
specialty
the marketing metric used to evaluate if a firm is performing on the five service quality dimensions by finding the minimum level of acceptable service is
the Zone of Tolerance
as a brand becomes more recognizable,
the company doesn't have to spend as much on marketing the brand
(BLANK) is defined in marketing terms as the basic problem-solving benefits consumers are seeking.
the core customer value
communication gap
the difference between actual service provided to customers and the service that the firm's promotion program promises
knowledge gap
the difference between customer expectations and what the firm perceives the customer to expect
standards gap
the difference between the firm's perceptions of customers expectations and the service standards it sets
delivery gap
the difference between the firm's service standards and the actual service it provides to customers
if an authorized retailer sells products to an unauthorized retailer who then sells to consumers at prices far below what authorized dealers can charge
the discount retailer might fail to provide sufficient service
most customers want to achieve a fair solution following a service failure. all of the following factors affect a person's perceptions of "fairness" in these kinds of situations except
the firms policy on service recovery
prestige products or services follow the premise that (BLANK) associated with the product
the higher the price, the greater the status
brands facilitate purchase in all of the following ways EXCEPT
they are always appealing to the customer
which of the following factors would play an important role when launching a G-rated movie during the summer months?
time
how do managers use break-even analysis?
to find a production quantity where, for a given price, costs are equal to revenues
e-book readers existed for many years before Amazon introduced the Kindle, but few consumers were aware of the devices, and sales stayed at very low levels. in the days before the Kindle, e-book reading devices were (BLANK) products for most consumers
unsought
many people who take cruises are not aware that their normal health insurance policy will not cover emergencies in a foreign country. for this coverage, they need special trip insurance. for these people, trip insurance is a (BLANK) good
unsought
brand-loyal consumers provide an important source of (BLANK) for firms
value
good marketing increases perceived (BLANK) by raising customers' quality expectations relative to price
value
primary labor and materials are also known as (BLANK) because they change with production volume
variable costs
total cost is
variable costs plus fixed costs
a systematic program that collects customer inputs and integrates them into managerial decisions is a (BLANK) of customer program
voice
if the process of recovering from poor service delivery in a salon, the providers are advised to apply all of the following tactics EXCEPT
wait a while to resolve the issue since customers are often very emotional and need to cool down first
