agec 3010 quiz 2

Which of the following companies uses product line pricing?

Go Zone, which launched a range of tablet models, each priced according to its features with price steps

________ pricing involves charging higher prices on an everyday basis but running frequent promotions to lower prices temporarily on selected items.

High-low

Which of the following companies uses captive product pricing?

Photo Genie, which sells inexpensive cameras that run only on their own expensive batteries

________ refers to a measure of the sensitivity of demand to changes in price.

Price elasticity

________ are consumer products that the consumer either does not know about or knows about but does not normally think about buying.

Unsought products

________ involves the use of a successful brand name for new or modified products in a new category.

a brand extension

internal

a. Firm's objectives and goals - market share, profit max, quality leader, etc.\ b. marketing mix strategy c. costs - SRAC/LRAC D. organizational considerations - top management; salesforce; pricing dept - one price; differential pricing; negotiated pricing

Which of the following stages of the product life cycle is characterized with high promotional expenditures that result from an effort to create consumer awareness?

introduction

Two factors are associated with the attribute of "quality" in a product. The first is consistency. The other is:

level of quality

Some companies obtain the rights to use the names or symbols previously created by other manufacturers for a fee. This process is known as ________.

licensing

Which new product pricing strategy would you use if your market is price-sensitive and your production costs fall dramatically with increased output?

market penetration pricing

Which new product pricing strategy would you use if your competitors will be slow to enter and/or you have great image and quality product?

market skimming pricing

In a(n) ________, consumers interact with new products and marketing tactics in laboratory stores or virtual online shopping environments

simulated test market

Yummy Peanut Butter created a new coconut-flavored peanut butter that it tested in a small number of representative cities. The company plans to use the results to forecast national sales and profits. Which of the following did the firm use?

standard test markets

Test marketing

the stage of new product development in which the product and its proposed marketing program are tested in realistic market settings

When amusement parks charge customers for admission and later for food and beverages, they are following a ________ pricing strategy.

two-part

A good brand name should most likely be ________.

distinctive

If an international court can establish that the defendant country sold its products in the plaintiff's country at prices lower than the defendant's cost of production, this is usually ruled as evidence of:

dumping

major pricing strategies

- Customer Value-based pricing: uses buyers' perceptions of value, rather than seller's costs, as key to pricing 1) Good-value pricing:Everyday low pricing (EDLP),High-low pricing 2) Value-added pricing - Cost-based pricing 1) cost-plus pricing 2) breakeven pricing and target return pricing - Competition-based pricing

Which is one of the conditions required for price discrimination?

- market power - extra revenue from segmentation - different demand elasticity - no resale

Product Life-Cycle: characteristics and strategies

- product development: zero sales and increasing investment costs - introduction: slow sakes and nonexistent profits; high distribution and promotion expenses - growth: rapid market acceptance and increasing profits; consumer education; lowering prices to attract more buyers - maturity: slow sales growth and profits level off or decline; increased promotion and R&D to support sales and profits - decline: sales fall off and profits drop

Product-Mix Situations and Pricing Strategies

- product line pricing - optional product pricing - captive product pricing - by product pricing - product bundle pricing

product decisions:

1) Attributes: quality, features, style, design 2) Branding: Brand Name Selection, Brand Development Strategies 3) Packaging 4) Labeling and logos 5) Product support services

New-ProductPricing Strategies

1) Market-Skimming pricing- sets high initial prices to skim revenue layers from the market - image and quality supports its high price - ac not much higher for small Q - competitors slow to enter 2) Market-Penetration pricing- setting a low price for a new product in order to attract a large number of buyers and a large market share - elastic demand (price sensitive) - AC falls a lot with rise in Q - low price deters entry

3 levels of product

1) augmented product- "complete solution", installation, delivery and credit, warranty, after-sale service 2) actual product- brand name, quality level, packaging, features, design 3) core benefit or problem solving service

Which of the following is not true of price changes?

Customer reaction to price changes is not as important as competitor reaction.

Under oligopolistic competition ________.

he market consists of only a few large sellers

external

a. pricing in different types of markets b. consumer perceptions of price and value c. the price/quantity relationship and the price elasticity of demand d. competitors cost, prices, and offers e. other external factors - economic conditionas - resellers reactions - government restrictions - social concerns

What did I suggest could generate this shape for a product's life cycle?

adding new features

A restaurant wants to use value-based pricing. It knows the costs of the ingredients in the food. It must also factor in ________ in determining customer satisfaction and value.

atmosphere and décor of the restaurant

Coors has several assets going for it that should prepare it in the high-stakes, highly competitive beer industry of the future. It has strong customer loyalty, high awareness, high perceived quality, and credibility. All these factors are combined in the last phrase of veteran industry analyst Robert S. Weinberg's comment: "The brand is strong, the beer is good and they have their own traditions. They have phenomenal ________."

brand equity

Symmonds Inc., a company manufacturing breakfast cereals, has extended its special Crispo cereal brand into a full line of breakfast cereals plus protein shakes, fruit and sandwich spreads, butter, and doughnuts. This is an example of ________.

brand extension

Which of the following product mix pricing strategies did Polaroid use when it set the general price range of its cameras low and the markup on its film high?

captive product pricing

A cooperative oligopoly (such as OPEC) is sometimes called a:

cartel

P&G introduced its Duncan Hines ready-to-spread frosting in a small geographic area. When General Mills became aware of the product, it rushed to market its own Betty Crocker ready-to-spread frosting, which eclipsed the Duncan Hines product introduction. General Foods was able to enter the ________ stage of the new product development process before P&G could.

commercialization

Two factors are associated with the attribute "quality" in a product. The first is level of quality (or costliness). The other is:

consistency

The advertising slogan, "We bring good things to life," used by General Electric to market itself, is an example of ________ marketing.

corporate image

As a general pricing approach, value-based pricing uses buyers' perceptions of value rather than sellers' ___________ as the key to pricing.

cost

Marketing Strategy Development

designing an initial marketing strategy for a new product based on the product concept

Retailers such as Costco and Walmart charge a constant, daily low price with few or no temporary price discounts. This is an example of ________ pricing.

everyday low

Kellogg's begins to sell its cereals in new markets after conducting extensive marketing research. After the cereal begins to appear in these new markets, the company increases its promotion expenditure to counteract competitive responses. Kellogg's is in the ________ stage of the product life cycle.

growth

Which stage in the product life cycle is characterized by rapid market acceptance and increasing profits?

growth

Consumers are less likely to use price to judge the quality of a product when they ________.

have experience with the product

Department stores such as Kohl's and JCPenney's practice high-low pricing by _____

having frequent sale days for store credit-card holders

When a company sets a high price for a new product with the intention of reducing the price in the future, it is using the ________ pricing strategy.

market-skimming

Midnight Magic, a perfume manufacturing company, plans to release a new fragrance during the holiday season at $99 per bottle. The company intends to bring the price down to $49 within six months of its release to attract buyers who couldn't afford the initial price. Which of the following pricing strategies is Midnight Magic using?

market-skimming pricing

Because of ________, a company cannot make its product illegally similar to a competitor's already established product.

patent laws

Product attributes include all of the following EXCEPT ________.

price

Noticing that themed envelopes aren't selling well, Charles Payton decides to offer customers a special "letter writing" kit. He prices the kit—which comprises letter paper, matching envelopes, and pens—at $5, even though the combined prices of the individual items is $8. Which of the following pricing strategies is he using?

product bundle pricing

Which of the following product mix pricing strategies involves setting prices across an entire product range based on cost differences between the products, customer evaluations of different features, and competitors' prices?

product line pricing

What type of pricing is being used when a company temporarily prices its product below the list price or even below cost to create buying excitement and urgency?

promotional pricing

Wal-Mart seems to have discovered that big, heavy apples bring in more revenue when they are sold for prices that look reasonable by the pound. This psychological pricing factor is defined as: "Prices that buyers carry in their minds and refer to when they look at a given product." What is this factor called?

reference prices