Principles of Marketing Exam 3 Practice

________ means allowing employees to make decisions about how service is provided to customers.

Empowerment

________ provides the equipment or systems needed to perform a task in a job setting.

Instrumental support

Why is brand extension a popular marketing strategy?

It allows the firm to spend less on creating brand awareness and associations.

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

Brands can be owned by

any firm in the supply chain.

A product is ________ that can be offered through a voluntary marketing exchange.

anything of value to consumers

The product life cycle is theoretically ________ with regard to sales and profits.

bell shaped

The shape of the diffusion of innovation curve is described as

bell-shaped.

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

A ________ refers to the use of the same brand in a different product line.

brand extension

Pioneer or breakthrough products are those that

can change consumer preferences.

Sierra Hats Inc. previously sold just ten types of hats and cornered the market in hat sales for years. Eight months ago the company decided to add 20 new hats and since many of the hats are similar to the original ten hats, sales have been lost on the existing brands. In other words, sales of the new hats have ________ the existing brands.

cannibalized

Variable costs change with

changes in the quantity being produced.

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

consumers

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.

A "no haggle" pricing policy that makes a transaction easier for the buyer is a type of ________ pricing strategy.

customer-oriented

The ________ gap can be closed by getting employees to meet or exceed service standards when the service is being delivered by empowering service providers, providing support and incentives, and using technology where appropriate.

delivery

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 break-even point is estimated by

dividing fixed costs by contribution per unit.

When it comes to measuring consumers' price sensitivity, products are viewed as either

elastic or inelastic.

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

establishment of a completely new market.

During the ________ stage of the product life cycle, there are few but an increasing number of competitors.

growth

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

Which adopter category refers to the last large group of buyers to enter a new product market?

late majority

A product in the ________ stage faces intense competition on price.

maturity

During the ________ stage of the product life cycle, sales peak and profits begin to decline as competition becomes intense.

maturity

One of the key characteristics of brainstorming sessions is

no idea is immediately accepted or rejected.

For new product marketers, early adopters are important because they tend to be

opinion leaders.

When marketers state that services are ________, they are referring to the fact that services cannot be stored for use in the future.

perishable

The diffusion of innovation theory is useful to marketers in helping them

predict which types of customers will buy their product immediately and later.

In one test before product launch, customers try a sample product and are then surveyed to understand whether or not they would buy/use the product again. This is known as

premarket testing.

A demand curve shows the relationship between ________ during a specific period of time.

price and demand

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.

If a new product concept gets positive evaluations from potential customers during concept testing, the next step for a firm is

product design.

A ________ 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

At the break-even point,

profits are zero.

In ________ many firms provide similar products that are considered substitutes for each other.

pure competition

Brands that are owned by ________ are called private-label brands.

retailers

Private-label brands are developed and managed by

retailers.

The old cliché "Service with a smile" recognizes the fact that

service providers need to be pleasant even if the customer is not.

All of the following are recommended strategies for service recovery except

silencing an irate customer.

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

stagnation.

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

standards.

Unlike product, promotion, or place, price is the only part of the marketing mix

that generates revenue.

On the basis of the research it has gathered on consumer perceptions, the tests it has conducted, and competitive considerations, the ABC firm confirms its target market (or markets) and decides how its product will be positioned. Then the firm finalizes the remaining marketing mix variables for the new product, including the marketing budget for the first year. This process illustrates

the product launch.

The diffusion of innovation theory focuses on

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

When members of the marketing channel collude to control the prices passed on to consumers, they are engaging in

vertical price fixing.