Marketing 2 Exam

A product has three distinct layers. The most basic level is the ________, which consists of all the benefits the product will provide for consumers or business customers. actual product innovation core product brand augmented product

core product

The final stage in the product life cycle is ________. brand dilution cannibalization maturity equity decline

decline

The first phase of new product development is ________. problem recognition product concept screening idea generation product concept development business analysis

idea generation

If demand hardly changes with a small change in price, the demand is ________. negative derived inelastic variable highly elastic

inelastic

The sales peak typically occurs during which stage of the product life cycle? leveling introduction development youth maturity

maturity

A manufacturer has fixed costs of $100,000, a variable cost of $10 per unit of output, and break-even volume of 50,000 units. What should the manufacturer's unit cost be in order to break even? $20 $14 $10 $16 $12

$12

A product has three distinct layers. The second layer is the ________, which is the physical good or delivered service. actual product augmented product innovation core product brand

actual product

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. penetration everyday low cost-plus competition-based break-even

everyday low

Which of the following is most likely a fixed cost?: temporary worker salaries sales representative commissions product distribution costs manufacturing input costs facility rental payments

facility rental payments

As production moves up, the average cost per unit decreases because ________. revenue increases overhead costs decrease of increasing diseconomies of scale variable costs decrease fixed costs are spread over more units

fixed costs are spread over more units

Which of the following is essentially no branding at all? generic branding national branding store branding ingredient branding sub-branding

generic branding

When McDonald's and other fast food restaurants offer "value menu" items at surprisingly low prices, they are most likely using ________ pricing. target return target profit good-value break-even cost-plus

good-value

Which of the following involves introducing less-expensive versions of established, brand name products? markup pricing cost-based pricing good-value pricing target profit pricing time-based pricing

good-value pricing

Which stage in the product life cycle is characterized by rapidly increasing sales and increasing profits? growth youth development maturity introduction

growth

Which of the following is a cost-based approach to pricing? EDLP high-low pricing target return pricing good value pricing value-based pricing

target return pricing

A ________ is the legal term for a brand name, brand mark, or trade character. corporate mark patent trademark logo copyright

trademark

Costs that change with the level of production are referred to as ________. total costs fixed costs overhead costs variable costs target costs

variable costs

________ involves setting prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for effort and risk. Break-even pricing Value-based pricing Competition-based pricing Cost-based pricing Penetration pricing

Cost-based pricing

________ pricing uses buyers' perceptions of value as the key to pricing. Target return Cost-based Customer value-based Time-based Markup

Customer value-based

________ pricing refers to offering just the right combination of quality and gratifying service at a fair price. Good-value Cost-plus Break-even Target profit Markup

Good-value

________ are the last in the population to adopt a new product. Innovators Laggards Late majority adopters Beta testers Impulse buyers

Laggards

________ involves designing and producing the container or cover for a product. Labeling Servicing Licensing Retailing Packaging

Packaging

________ is the only element in the marketing mix that produces revenue. Variable costs Place Product Fixed costs Price

Price

________ refers to the amount of money charged for a product or service. Value Wage Cost Price Salary

Price

________ refers to a measure of the sensitivity of demand to changes in price. A demand curve Price-value equation Price elasticity Income elasticity of demand Marginal utility

Price elasticity

________ pricing involves charging higher prices on an everyday basis but running frequent promotions to lower prices temporarily on selected items. Penetration High-low Everyday low Break-even Cost-plus

High-low

The product life cycle concept can be applied by marketers as a useful framework for describing how ________. product ideas are developed to develop marketing strategies a market responds to a product over time a brand gains a dominant position in the market to forecast product performance

a market responds to a product over time

Fixed costs ________. decrease with accumulated production experience vary directly with the level of production are costs that do not vary with production or sales level represent the annual costs of inputs incurred by a company are the sum of the overhead and variable costs for any given level of production

are costs that do not vary with production or sales level

Companies that adopt value-added pricing ________. set incredibly low prices to meet competition attach value-added features and services to differentiate their offers and support their higher prices underprice their products and lower quality to boost demand in the short-run overprice their products without any apparent justification consider value-added features as a fitting substitute for aggressive cost cutting

attach value-added features and services to differentiate their offers and support their higher prices

The concept of ________ encompasses the beliefs and associations that a consumer has about a brand. product quality brand equity brand storytelling brand meaning total quality

brand meaning

A quantity discount is a price reduction for buyers who ________. buy merchandise in bulk buy discontinued products return old items while buying new ones pay their bills on time buy merchandise out of season

buy merchandise in bulk

Using ________ pricing, companies are able to turn their trash into cash, allowing them to make the price of their main product more competitive. optional product by-product product bundle captive product product line

by-product

Which of the following involves setting prices based on a rival firm's strategies, costs, prices, and market offerings? market-based pricing competitor value-added pricing target return pricing good-value pricing competition-based pricing

competition-based pricing

When performing a break-even analysis, the manufacturer should consider all of the following EXCEPT ________. estimated break-even volumes different prices likely profits competitors' pricing probable demand

competitors' pricing

A ________ is a modification to an existing product. continuous innovation technical innovation dynamically discontinuous innovation discontinuous innovation commercial innovation

continuous innovation

A consumer doesn't have to learn anything new to use a(n) ________. dynamically continuous innovation augmented product converged product continuous innovation discontinuous innovation

continuous innovation

Which of the following processes does value-based pricing reverse? high-low pricing value-added pricing good-value pricing cost-based pricing everyday low pricing

cost-based pricing

What sets the ceiling for product prices? break-even volume sellers' perceptions of the product's value customer perceptions of the product's value product manufacturing costs variable costs

customer perceptions of the product's value

Consumers must engage in a great amount of learning to use a(n) ________ because no similar product has ever been on the market. dynamically continuous innovation augmented product competitive innovation continuous innovation discontinuous innovation

discontinuous innovation

Which of the following price adjustment strategies involves reducing prices to reward customer responses such as volume purchases, paying early, or participating in sales-support programs? dynamic pricing product line pricing discount and allowance pricing product bundle pricing captive product pricing

discount and allowance pricing

A(n) ________ is a pronounced modification to an existing product that requires a modest amount of learning or change in behavior to use it. dynamically continuous innovation augmented product competitive innovation continuous innovation discontinuous innovation

dynamically continuous innovation

Diffusion refers to ________. how promotion is used to support products throughout their product life cycle how the use of a product spreads throughout a population the second stage of the market segmentation process the selection of opinion leaders to encourage product acceptance the methodology for evaluating new product ideas

how the use of a product spreads throughout a population

Cost-plus pricing ________. is a value-based pricing method involves adding a standard markup for profit involves pricing that accurately reflects production costs is a complex pricing method aims at breaking even on the costs of making and marketing a product

involves adding a standard markup for profit

Through ________, one firm sells another firm the right to use a legally protected brand name for a specific purpose for a specific period of time. umbrella branding trademarking franchising store branding licensing

licensing

Companies that set a low price for a new product in order to attract a large number of buyers and a large market share are using the ________ strategy. market-skimming pricing inclusive pricing market-penetration pricing exclusive pricing cost-plus pricing

market-penetration pricing

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. cost-plus market-segmentation competitive market-penetration market-skimming

market-skimming

Which of the following product mix pricing strategies involves pricing multiple products to be sold together? optional product pricing captive product pricing product line pricing by-product pricing product bundle pricing

product bundle pricing

What sets the floor for product prices? consumer perceptions of the product's value market competition advertising budgets competitors' strategies product costs

product costs

Low-interest financing and longer warranties are both examples of ________ pricing. captive product segmented promotional product form product bundling

promotional

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

promotional pricing