MKTG 3310-21 Test 3 (Nov 13th)

In one year, the Hotel by the Shore incurred $100,000 in fixed costs. Because the hotel booked 10,000 room nights, its total variable cost is $100,000 (10,000 room nights × $10 per room). Thus, its total cost is

$200,000.

If the fixed costs of manufacturing a new cell phone are $10,000, the sales price is $60, and variable cost per unit is $20, the break-even point is

250 units. (10,000/[60-20])

How is consumer panel data collected during the test marketing phase of a new product introduction?

Panelists scan their receipts on a home scanning device.

__________ fairness refers to the perceived fairness of the process with which a firm handles customer complaints.

Procedural

Which of the following is true of profits in the maturity stage of the product life cycle?

They peak or are declining.

How did consumers respond when Chobani reduced the size of its Greek yogurt containers by 12 percent?

They used social media to complain about the change.

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?

In countries like the United States, services: -have almost all been replaced by technology.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

account for an increasing share of jobs.

By providing good customer service, firms _______ their products.

add value to

Barbara is using a test model of her firm's new inline skates to see if they work according to the design specifications. Barbara is involved in

alpha testing.

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

alpha testing.

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.

Frank's Heating and Air Conditioning Company specializes in electric heat pumps. Frank keeps track of the price of natural gas, knowing that

an increase in the price of natural gas will increase demand for his electrical heating systems.

Brands can be owned by

any firm in the supply chain.

Marketers need to think about the product offer on three levels. Which of the following levels includes associated services such as warranties, financing, support, and after-sale service?

augmented product

If many consumers in the marketplace are familiar with a brand and what it stands for and have an opinion about the brand, the brand has considerable

awareness.

One reason auto companies spend millions on racing cars is that they offer the opportunity to test new designs and technology under extreme conditions. Using the cars in a real-use setting provides an opportunity for ________ the product.

beta testing

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

beta testing process.

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.

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 __________, a form of new idea generation.

brainstorming

When a restaurant chain, Big Burgers, launches its own brand of frozen meals, this is an example of a

brand extension.

When Amanda shops for lipstick, she always buys Really Red by Cover Girl. This is an example of

brand loyalty.

In addition to extensive online and outdoor advertising, Under Armour has intensified its ______ efforts by signing Washington Nationals baseball star Bryce Harper to the biggest endorsement deal for an MLB player.

branding

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

communication

Bill is a yacht broker in the southeastern United States. For years he has had difficulty selling large yachts locally because there were few places to dock these boats. Yachts and spaces to dock them are an example of

complementary products.

Traditional demand curve economic theory is used by marketers to understand _______ in the five Cs of pricing.

consumers

Marketers selling milk, bread, and other consumer staples know that most customers do not spend much time searching or comparing alternatives. For most consumers, these are _____________ goods.

convenience

An excellent, inexpensive, and readily accessible method for assessing customers' service expectations is

customer complaints.

The Service Gaps Model is designed to highlight those areas where

customers believe they are getting less or poorer service than they should.

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

delivery

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

Randall arrived at the hotel to find that, although he had a guaranteed reservation, the hotel had no rooms available. He became angry when the hotel made him a reservation at a more expensive hotel but refused to pay the difference in room rates. Randall was upset because, in his opinion, the hotel's solution did not incorporate

distributive fairness.

As soon as she saw one, Hillary wanted a flat-screen television, but she was worried about making the wrong choice. She waited until there were alternatives in the market with lower prices and improved quality. Hillary is part of the __________ diffusion of innovation group.

early majority

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

early majority

The value of a brand is often calculated by assessing the

earning potential of the brand over the next 12 months.

The Broadmoor Hotel in Colorado Springs, Colorado, maintains its five-star rating by focusing on five service characteristics: reliability, responsiveness, assurance, empathy, and tangibles. Employees are instructed to always address a guest by name, if possible. To accomplish this, employees are trained to listen and observe carefully to determine a guest's name. Which service characteristic is this an example of?

empathy

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

establishment of a completely new market.

Effective service recovery entails all of the following except listening to the customer. estimating the damage. providing a fair solution. resolving the problem quickly. involving customers in the service recovery where possible.

estimating the damage.

All of the following are stages in the product life cycle except

evaluation.

Production of the DeLorean car, made famous in the film Back to the Future, never got above 25,000 units during its lifetime. Automobile industry analysts estimate that production of this car needed to reach around 300,000 units to achieve the __________, which refers to a decrease in unit cost as product volume increases.

experience curve effect

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

have made substantial investments in product development and manufacturing.

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

heterogeneous

In a competitive market, perceived value is determined by consumers mostly

in relation to the value of its close competitors.

Which of the following is the correct sequence of new product adopters in the diffusion of innovation curve?

innovators, early adopters, early majority, late majority, laggards

Predatory pricing

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

The CEO of David's firm just came back from a business seminar. He called David into his office and stated, "I just found out about the product life cycle curve in a strategy seminar. This is a great tool. I want you to drop whatever you're doing and inventory all of our products to determine exactly where they are in the product life cycle." David needs to think fast for a good answer because he knows that

it is often impossible to identify with precision where a product is in the product life cycle.

Hollywood studios typically release movies targeted toward general audiences (G- or PG-rated movies) during the summer when children are out of school. The timing of the release pertains to the product's

launch.

Whether they like them or not, most U.S. automobile customers are familiar with and have an opinion about American-made cars. This familiarity makes it easier for consumers to

make purchase decisions.

With a __________ pricing strategy, marketers set a low initial price for the introduction of a new product or service.

market penetration

A product in the __________ stage of the product life cycle has a high number of competitors and competitive products.

maturity

Where on a product's packaging would one most likely find nutrient content and country of origin?

on the label

Cross-price elasticity is the

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

Because services like airline flights and hotel beds are _________, many marketers attempt to match demand with supply using pricing strategies.

perishable

Yolanda manages a Best Sleep Inn along an interstate highway. She knows from experience that 5 to 10 last-minute customers will call after 8 p.m. each evening looking for a room and asking the price. Yolanda has empowered her staff to offer discounts when the motel is largely vacant, and to quote the standard price when the motel is close to full. She knows her service is __________, meaning that if no one stays in the room, it generates no revenue that evening.

perishable

The Apple iPod changed the way people listen to music but it also created an entirely new industry devoted to accessories such as cases, ear buds, docking stations, and speakers. The Apple iPod is considered a

pioneer product.

There is an old saying "If you have to ask the price of a yacht, you cannot afford it." Products like yachts are most likely to be associated with

prestige pricing.

When a firm colludes with other firms to control prices, it is engaging in

price fixing.

The contribution per unit is

price minus variable cost per unit.

All of the following are considered an important function of labels on products and packages except

protecting against damage to the product.

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.

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

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

For marketers, one of the benefits of having achieved brand loyalty is

recognition through industry awards.

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, __________ is the most important of the five service quality dimensions.

reliability

When Kraft's Philadelphia cream cheese changed its packaging from round to oval to ensure front-facing displays that can't spin and to fit more into the same shelf space, this was a subtle way in which the firm _________ its product.

repositioned

When choosing where to eat lunch, Veronica's major service criterion is speed: being seated promptly and served her meal quickly. For Veronica, __________ is the most important of the five service quality dimensions.

responsiveness

Many years ago, Honda's Accord and Ford's Taurus were the two top-selling cars in the United States. As the year was coming to an end, Ford cut the price of the Taurus, hoping to outsell the Accord and allow Ford to claim that "Taurus is the best-selling car in America." Ford was using a _______ pricing strategy.

sales orientation

Zappos, an online shoe company, knows shoes are typically a(n) ______ good, with consumers often spending time comparing alternatives. It overcomes that aspect of consumers' search process by offering a free, no-questions-asked return policy.

shopping

All of the following are recommended strategies for service recovery except

silencing an irate customer before the individual makes any angry outbursts.

Andy likes gourmet popcorn, and will spend time trying to find his favorite brand. His girlfriend, Joanne, loves popcorn but doesn't care about brands. For Andy, popcorn is a __________ good while for Joanne it is a __________ good.

specialty; convenience

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

standards.

Returnable packaging, use of 3D printing, and flexible packaging are examples of

sustainable packaging.

A marketing professor in Ithaca, New York, maintains a museum of failed consumer products. Most new products in this museum failed during the __________ stage of new product development, when they are introduced to a limited geographic area.

test marketing

Rodi owns Hallman's auto repair service. He has observed over the years that customers keep their high-mileage cars longer when the economy is doing poorly, creating demand for his maintenance and repair service. Rodi has observed the impact of _______ on demand for his service.

the income effect

Because there are many firms in monopolistic competition markets,

the many competitors will focus on product differentiation.

A reference price is

the price against which buyers compare the actual selling price.

The diffusion of innovation theory focuses on

the rate at which consumers are likely to adopt a new product or service.

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

One problem in relying on price elasticity and demand curves when setting prices is

the way a product or service is marketed can have a profound impact on price elasticity.

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

they are involved in setting the goals.

When corporate headquarters announced new service quality standards for pizza franchise owners, Roland knew he would have trouble gaining employees' support because

they were not involved in setting the goals.