MARKETING ch. 11,12,13,14

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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


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