Marketing Exam 2 (cap 5-9)

An abstract presentation of a product concept is likely to increase the reliability of the concept test.

false

As part of formulating a customer-driven marketing strategy, marketers are most likely to combine smaller segments in to one big market.

false

Concept testing typically follows the marketing strategy development phase of the new product development process.

false

Consumers rarely compare shopping products before purchasing them.

false

Dynamic prices are carried in buyers' minds and used when looking at a given product.

false

Pricing strategies typically remain the same as a product passes through its life cycle.

false

Product development is usually followed by a business analysis of the product.

false

Products comprise only tangible objects.

false

Clean Teeth Inc. adds a strawberry flavored toothpaste to its current line of toothpaste products. What is this an example of in a product line?

filling

Which of the below describes the type of demand that hardly varies when a slight adjustment in the price of a product/service is made?

inelastic

If a manufacturer tailors its products and marketing campaigns to the needs and wants of specific cities, neighborhoods, and even stores, what targeting strategy is this firm practicing?

local

Which of the following is most likely the final stage of the business buying decision process?

supplier performance review

A firm can attack the more-for-more strategy of another firm by offering a brand of comparable quality at a lower price using a more-for-the-same strategy.

true

A more-for-more market offering not only offers higher quality but also provides a consumer with prestige and status.

true

A small increase in consumer demand can cause a large increase in business demand.

true

Business analysis involves a review of the sales, costs, and profit projections for a new product to determine whether they satisfy a company's objectives.

true

Business and consumer marketers use many of the same variables to segment their markets.

true

Competition-based pricing involves setting prices based on competitors' strategies, costs, prices, and market offerings.

true

Federal legislation on price-fixing states that sellers must set prices without talking to competitors.

true

If the market is dominated by larger, lower-price competitors, the company may decide to target unserved market niches with value-added products and services at higher prices.

true

In reverse auctions, companies put their purchasing requests online and invite suppliers to bid for their business.

true

In vendor-managed inventory, buyers share sales information directly with key suppliers.

true

Lagging adopters are tradition-bound, suspicious of changes, and adopt an innovation only when it has become something of a tradition itself.

true

Most major new innovations are unsought until consumers become aware of them through advertising.

true

Multi-variable segmentation approach merges and analyzes geographic, demographic, lifestyle, and behavioral data to help firms segment their markets.

true

Perceptual positioning maps are used to analyze consumer perceptions of a brand relative to competing products.

true

Price discrimination is allowed if a seller can prove that its costs are different when selling to different retailers.

true

Product line stretching occurs when a company lengthens its product line beyond its current range.

true

Target return pricing is a variation of break-even pricing.

true

Which of the below is a pure tangible good?

air purifier

Why is using demographic variables for segmentation purposes is the most popular method?

are easier to measure than other variables

Which statement is correct about idea generation during the new product development process?

Idea generation is usually followed by procedures that reduce the total number of ideas.

Which statement that describes price elasticity is correct?

If demand hardly changes with a small change in price, the demand is inelastic. If demand is elastic rather than inelastic, sellers will consider lowering their prices. Price elasticity refers to how responsive demand will be to a change in price.

Which of the below is a disadvantage of a team-based approach to new product development?

Organizational confusion and tension are likely to affect the process.

When people select, organize, and interpret information to form a meaningful picture of their world and surroundings, what process do they go through?

Perception

Which segmentation variable divides buyers into separate groups based on lifestyle, social class, and/or personality characteristics.

Psychographic

Which of the below is correct about the introduction stage of a new product?

Sales growth tends to be slow.

Which of the below is correct about the growth stage of the product life cycle?

Sales start climbing quickly.

Which of the below is correct statement about services?

Service industries vary greatly.

A restaurant manager wants to target patrons who are trying to lose weight but still like to dine out. The manager decides to offer low-calorie and low-fat meals that appeal to this segment. Which segmentation variable is the manager typically using?

benefit

Tiffany is planning to release a new line of bracelet jewelry. It is currently evaluating the sales history of identical products and conducting a survey to estimate pessimistic and optimistic levels of expected sales for the new bracelet jewelry line. What stage of new product development process is Tiffany currently going through?

business analysis

Hewlett Packard sets its prices for its printer cartridges that must be used with its printers. What is this pricing strategy called?

captive-product

What does a manufacturer offer when a customer buys a product from a manufacturer's dealer within a specified time period, and then the manufacturer sends the customer a check.

cash rebate

Which of the below is an industrial product categorized under materials and parts?

cement

A detergent product is currently in its maturity stage of the product life cycle. The company decides to modify the product to improve its sales. Which strategy would the firm most likely to take?

change the packaging of the product

Michelle usually buys new devices such as iPhones, iPads and Alexa only after her friends and family start buying and experiencing these devices. In this case, Michelle is an innovator.

false

Perceptual positioning maps are used by marketers to identify supplier and retailer perceptions of a product.

false

Product development usually costs the least among all the steps of the new product development process.

false

Relative advantage is the degree to which the results of using an innovation can be observed or described to others.

false

Suave is test marketing a new smoothing shampoo by assessing consumer satisfaction in laboratory stores where hair is washed and blown dry. In this case, Suave is using controlled test marketing.

false

Subliminal perception means that consumers are likely to remember good points made about a brand they favor and forget the good points made about competing brands.

false

The business analysis stage is the final step in the new product development process.

false

The business buying process tends to be shorter and less formal than the consumer buying process.

false

When buying unsought products, consumers spend considerable time and effort in gathering information and making comparisons.

false

When compared to an undifferentiated targeting strategy, differentiated targeting strategy usually leads to weaker product position in each market segment.

false

When developing a new product, concept testing should ideally be followed by the business analysis stage.

false

Proctor and Gamble was the first company to introduce a deodorant for women formulated specifically for women's skin chemistry. Which variable has the company used for market segmentation?

gender

Mary wants to purchase an iron. She asks her mom to suggest a brand, looks at the newspaper ads for irons on sale, and goes to a nearby store to see if she can find an iron within her budget. In this scenario, in what stage of consumer decision process is Mary is mostly likely be?

information search

Orienting and motivating customer-contact employees and supporting service people to work as a team to provide customer satisfaction is known as ________ marketing.

internal

Gigi purchased two bottles of wine. After she tasted them, she liked the Pinot Noir better than Merlot due to less bitter taste of it. What stage is Gigi currently in her buyer decision process?

post-purchase behavior

Which of the needs in Maslow's hierarchy is generally satisfied last?

self-actualization

What does service variability mean?

service quality depends on when, where, and how they are provided

Products like home appliances, furniture, even clothing sold in department stores are classified as _________ products.

shopping

What is the type of marketing practice and concept called that focuses on creating behaviors that will benefit individuals and society's well-being?

social marketing

Dr. Girard is in the process of redecorating her apartment. She has purchased unique looking oriental silk rugs for her living and dining rooms without going through any comparison shopping for rugs in department stores. What type of product did Dr. Girard purchase?

specialty product

Increasing the number of products in a product line is called product line_______.

stretching

When a market segment is large or profitable enough to serve, it is termed ________.

substantial

A startup clothing store sets its prices in a way that revenues will equal manufacturing and marketing costs while bringing the return it expects from a particular quantity of the product it sells.

target return

When compared to an undifferentiated targeting strategy, differentiated targeting strategy usually leads to higher costs of doing business.

true

When consumers react more favorably to a brand than to a generic or unbranded version of the same product, the brand is said to have positive brand equity.

true

Even though not suggested, some of the marketers decide to not focus on market segmentation and target the entire market with only one offer. What is this practice known as?

undifferentiated

A credit card company is segmenting its markets as regular users, first-time users, potential users, ex-users, and nonusers. Which segmentation variable is the company typically using?

user status segmentation

Which of the below conditions is the key for implementing an effective market-penetration pricing strategy for a product?

The market for the product is highly price sensitive.

Which of the below conditions is the key for implementing an effective market-skimming pricing strategy for a product?

The product's quality and image must support its high price.

A brand is defined as a name, term, sign, symbol, or design, or a combination of these, that identifies the maker or seller of a product or service.

True

Which of the below describes crowdsourcing used for developing new products?

A firm creates a forum where anyone can contribute new product ideas.

If a firm uses its existing brand name for a new product category, what is this branding strategy called?

Brand extension

Which of the below uses consumers' perceptions of what a product/service is worth as the key to pricing.

Customer value-based pricing

If two established brand names of different firms are used on the same product, what is this branding strategy called?

Co-branding

Which of the below is a pricing strategy that involves setting prices based on the expenses involved in producing, distributing, and selling a product plus a fair rate of return for a company's effort and risk?

Cost-based

Which of the below describes product line pricing?

In product line pricing, management must decide on the price steps to set between the various products in a line. The price steps should consider cost differences between products in a line. The price steps should account for differences in customer perceptions of the value of different features.

Which of the below is correct about local marketing?

It increases manufacturing costs.

Which of the below is correct about the product life cycle?

It is generally difficult to forecast the sales level at each PLC stage.

Even though electric vehicles are not too difficult to drive compared to fuel-powered vehicles, consumers may still have conceptual concerns about the new technology. Due to which reason the adoption rate may slow down for electric vehicles?

complexity

In which stage a product idea description is presented to sets of target consumers physically or symbolically?

concept testing

A firm adding new features to a product will most likely evaluate each feature's value to customers relative to its ________.

cost to the firm

Cetaphyl is a Canadian moisturizer and cleansing lotion manufacturer and it is trying to price its products. The total cost to produce each lotion is $4. The company has decided to add a $2 markup. So, the unit price charged to distributors will be $6. What type of pricing strategy is Cetaphyl using?

cost-plus

Which of the team-based new product development approach saves times and increases effectiveness because different departments work closely together?

cross-functional teams

The Dominos Pizza brand name and its logo can be used as ________ that may potentially stimulate an individual's attention and decision to purchase pizzas at its locations.

cues

Swigart Car Museum charges different admission fees for seniors, adults, and students for the same tour of the museum. What is this form of pricing called?

customer-segment

Light users are often a small percentage of a company's market but account for a high percentage of total consumption.

false

If Tiffany, an upscale jewelry retailer, starts selling inexpensive watches to take advantage of huge growth in low-end customer segments, what is Tiffany most likely engaging in?

downward stretching

Dr. Girard is in the market for a new vehicle. She is currently considering either a Ford Explorer or Jeep Grand Cherokee SUV due to their high quality, excellent safety ratings, and similar prices. What stage is Dr. Girard currently in her buyer decision process?

evaluation of alternatives

Consumers use the same products/services as they progress through their life-cycle stages.

false

Early mainstream adopters are venturesome and typically try new ideas at some risk.

false

In a straight rebuy, a buyer considers a product or service for the first time.

false

In the new product development process, the purpose of idea generation is to create a small number of ideas and the purpose of the next set of stages in the process is to increase that number.

false

In value-based pricing, consumer perceptions of value is a secondary consideration. Value-based pricing is primarily product-driven.

false

Kmart and Walmart sell less expensive varieties of well-known branded products or new product lines with lower prices. Which pricing strategy have they been adopted.

good-value

Which of the below uses R-W-W framework in the new product development process?

idea screening

Which market segmentation variable is typically used by firms that offer luxury watches targeted to the affluent individuals?

income

A manager at a soft drink manufacturer follows a differentiated targeting strategy. Before selecting this strategy, what does this manager needs to weigh the company's increased sales against?

increased costs

Which of the below includes a firm's external source for new product ideas?

its suppliers

Which of the below is a personal factor that influences a consumer's purchasing behavior?

life-cycle stage

When setting prices, it is crucial for the management to recognize that good value is not equivalent to ________.

low price

Which of the below is the proper sequence of the steps that firms generally follow in formulating a customer-oriented marketing strategy?

market segmentation, market targeting, differentiation, and positioning

Even if a manufacturer of luxury watches charges a higher price than its competitors, the brand is very popular among customers due to its quality and service in comparison to cheaper alternatives available in the market. In this case, what value proposition is this luxury watch manufacturer is offering?

more-for-more

When Apple introduced the iPod for the first time, the price was set to $499. Next year, a slightly smaller size iPod was brought to the market for $249. What pricing strategy Apple initially used to price its first iPod?

market-skimming

A dog food manufacturer has just concept tested a new product idea, which is a chewable toy-food that not only entertains dogs but also cleans their teeth and provides the nutrition they need. The dog owners so far loved the idea. What is the next step in the new product development process?

marketing strategy development

When firms interact one-on-one with large numbers of customers to create customer-unique value by designing products and services tailor-made to individual needs, what targeting strategy is it practicing?

mass customization

If a firm markets the same product to its large customer population with no customization, what is this firm practicing?

mass marketing

If a firm tailors its products and marketing campaigns to cater to the specific preferences of individuals, what targeting strategy is this firm practicing?

micromarketing

Under which market condition, a market includes numerous sellers and buyers that trade across various price levels rather than the same market price?

monopolistic competition

What are the people in a reference group called that exert social influence through their special knowledge, skills, and personality?

opinion leaders

Best Buy offers laptop computers separately from other supplementary products such as anti-virus software programs and external hard drives. What is this pricing strategy called?

optional-product

Finelli's Italian restaurant in Altoona always hires the best employees and train them well. Based on what differentiation strategy Finelli's is focusing on gaining competitive advantage?

people

An airplane flight completed by a traveler from point A to point B that cannot be stored for later use illustrates what characteristics of a service?

perishability

A fashion company emphasizes the durability and quality of the fabrics it uses in its advertising. What is this fashion company's positioning based on?

product attributes

Cut Above, a local hair styling salon charges $20 for a haircut and $15 for a conditioning treatment. If the customer wants both, then it charges the combo price of $30. What is this pricing strategy called?

product bundle

In what stage in the new product development process, the products undergo rigorous alpha tests to make sure that they perform safely and effectively, and beta tests so that consumers will find value in them and rate them.

product development

If a firm experienced significant decline in its sales of a product during the last two years; therefore, the firm reduced its advertising to improve short-run profits, which of the below best describes the firm's strategy?

product harvesting

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

promotional pricing

Harley Davidson company is seeking a new supplier of motorcycle brake lights. After searching business directories, Harley invites four suppliers to make formal presentations about how their solutions can create greater value for Harley's customers than competing solutions. What stage of the business buying decision process is Harley currently going through?

proposal solicitation

If a firm sets its prices for its products based on customers' reference prices, what pricing strategy is this firm using?

psychological

Which of the below could initiate a price increase?

reduced demand

After a makeup retailer advertises its products using a celebrity, the sales go up for its makeup products. From the customers perspective, the celebrity is a ____________.

reference group

Aglucator is a medical food product for which a marketing strategy has already been developed and reviewed by the top management, prototypes of the product have been formulated and developed, and final clinical trials are being conducted on patients to ensure that it passes FDA standards. What will the next step most likely be in the new product development process?

test marketing

What is the strategy called when marketers incorporate cross-cultural and ethnic aspects of their target markets into their conventional marketing strategies?

total market

A brand difference is said to be preemptive if competitors cannot easily copy the difference.

true

A brand extension gives a new product instant recognition and faster acceptance.

true

A business marketer normally deals with far fewer buyers than a consumer marketer.

true

A company or its brand's image should express a product's unique benefits and positioning.

true

A company's product mix has four important dimensions: width, length, depth, and consistency.

true

A status of a person reflects the esteem attributed to different roles the person plays by a society.

true

Amazon uses dynamic pricing because it aims to be responsive to online buyers' wants and changes in the marketplace.

true

Augmented product decisions are built around the core benefits and actual product decisions and offer additional consumer service and other product related benefits.

true

Branding is so important today that hardly anything goes unbranded.

true

Crowdsourcing refers to throwing the innovation doors wide open and inviting broad communities of people — customers, employees, independent scientists and researchers, and even the public at large — into the new product innovation process.

true

Firms that use a customer-centered approach with team-based new product development can gain a big competitive edge by getting the right new products to market faster.

true

If a firm overly uses promotional pricing, it can erode its brand's value in the eyes of customers.

true

Market skimming pricing strategy works well when a product's quality and image live up to its high price, and sufficient number of consumers like to buy the product at that price level.

true

Relative advantage is the degree to which an innovation appears superior to existing products.

true

Subcultures are groups of people with shared value systems based on common life experiences and situations.

true

The installation of an innovation management system allows a company to collect, review, evaluate, and manage new product ideas.

true

The relatively lower costs involved with setting up an online store makes it more profitable to serve small niches.

true

The same for less positioning strategy offers value for consumers by providing the same brands as competitors at a lower price.

true

Total quality management (TQM) is an approach in which all of the employees are involved in constantly improving the quality of products, services, and business processes of a firm.

true

Under a team-based new product development approach, company departments work closely together in cross-functional teams. Overlapping the steps in the product development process saves time and increases effectiveness.

true

Wal-Mart and KMart have opened small neighborhood stores designed to fit the needs of densely packed urban neighborhoods. This is an example of geographic segmentation.

true

When a manufacturer seeks a market for by-products and accepts a price that covers more than the cost of storing and delivering those by-products, the manufacturer is able to reduce the main product's price to make it more competitive.

true

When buying specialty products, consumers make more effort than usual.

true

In which of the scenarios below, little or no test marketing is likely recommended for a new product?

when the costs of developing and introducing the product are low