business final
Hallmark cards develops a new line of cards that have a total cost of $200,000 and a price of $3 each. If it sells 20,000 cards the first month, what is its total revenue?
$60,000
William Clark wants to know his breakeven point. His selling price is $20 per unit, his fixed costs are $6,000, and the variable costs per unit are $6. What is his breakeven quantity?
428.6 units
What type of product modification is likely to make the greatest impact on a food product?
Aesthetic
Why should companies develop and introduce new products?
Because failing to do so can threaten the future success of the firm
Borden, Inc. wants to develop a new line of great tasting, low-calorie, low-fat, and low-cholesterol processed cheese products. The managers are studying whether demand is strong enough and whether the new line will yield a favorable return on investment. The managers are currently in which phase of new product development?
Business analysis
If the manager at Best Buy puts a sign up next to a Pioneer stereo that reads, "Only $199.99! $58.01 less than Circuit City," this is an example of what type of pricing strategy?
Comparison discounting
If Macy's department store managers looked at Dillard's department store prices for identical national brands and, based on that information, decided to advertise a sale on those products, they would be exercising which pricing method?
Competition-based
Which business product classification is most appropriate for the wire used inside a stereo system?
Component part
___________ become(s) a part of the physical product and consist(s) of either finished items ready for assembly or products that need little processing before assembly.
Component parts
A pricing strategy in which a manufacturer pays for the shipping cost of its merchandise to the wholesaler is called
FOB destination
Regulations associated with the national do-not-call registry are enforced by the
Federal Trade Commission
Sales of XYZ Corporation's digital video cameras are rising rapidly, profits are peaking, and competitors are entering the market. XYZ is able to maintain its market lead. Judging from this example, the digital video camera is in which stage of the product life-cycle?
Growth
TCBY wants to expand its line of food products. The company sent surveys to consumers to determine which food items would appeal to them for dessert or snacks. The company is in which phase of new product development?
Idea generation
The marketing challenge of making potential customers aware of the product's existence and its features, benefits, and uses is prevalent in which of the product life-cycle stages?
Introduction
In which order do the stages of the product life-cycle occur?
Introduction, growth, maturity, decline
Mama Mia restaurant purchased two large ovens for its kitchen. These ovens are an example of which type of business product?
Major equipment
__________ competition is competition based on factors such as product quality, promotion, customer service, and packaging.
Non-price
A trademark is registered with the
Patent and Trademark Office.
The maker of Oral-B toothbrushes is introducing a new electric plaque remover and expects considerable competition. What pricing strategy would be appropriate for this maker to choose?
Penetration pricing
he maker of Oral-B toothbrushes is introducing a new electric plaque remover and expects considerable competition. What pricing strategy would be appropriate for this maker to choose?
Penetration pricing
Martin always chooses Colgate toothpaste at his local drug store. However, when the store occasionally runs out of Colgate, he will purchase Crest or Mentadent. What level of brand loyalty does Martin have to Colgate?
Preference
Polaroid considers its packs of blank DVDs superior to other brands. To communicate the product's superior quality, which price may be appropriate for their DVDs?
Premium
Ties 'R' Us sells a variety of ties at many different prices. Often customers are confused about the pricing and have a hard time making a buying decision. Ties 'R' Us should use what type of pricing strategy?
Price lining
When Polaroid comes out with a new model in a series, it sets an initial price and then gradually lowers the price. Polaroid is initially using which pricing strategy?
Price skimming
Rose is starting to notice some wrinkles around her eyes and mouth. She has decided to purchase some age- defying wrinkle cream but is unfamiliar with available brands. At the store, she picks out a brand because she remembers a clever advertisement about it on television. What level of brand loyalty does this describe?
Recognition
Razor Company's blades are in the maturity stage of the product life-cycle. How can the company strengthen its market share?
Redesign the packaging
If a manager designs the shoe department in a manner that one of its private-label pairs of shoes, priced at $39.99, is positioned next to a well-known national brand of shoes priced at $69.99, what strategy is the manager attempting to accomplish?
Reference pricing
If company A references company B in determining what price to sell its own product at, it exercises which pricing objective?
Status quo
During which phase of the product development process can marketers experiment with advertising, pricing, and packaging in different geographic areas?
Test marketing
For product modification to be effective, all but which of the following conditions must be met?
The product must be an appliance.
What do yo-yo, aspirin, and thermos all have in common in a marketing sense?
They were all once brand names that have since been declared generic terms
Philip James asks you to calculate the breakeven point for him. You need which information from him to do so?
Variable costs per unit, fixed costs, and unit selling price
If Tiger Mart advertises a 2-liter bottle of Pepsi for 89 cents to generate store traffic that will increase the purchasing of other items at regular prices, the grocer is using
a price leader.
Which of the following best describes a typical scenario companies use in the commercialization phase? a. The product is first introduced in selected geographical areas and then expanded in phases. b. The product generally becomes available at all intended locations simultaneously throughout the United States. c. Companies implement their initial plan and very infrequently make any adjustments to this plan. d. Companies prepare the budget for commercialization after the product has been fully introduced. e. The product is very slowly introduced across the nation throughout a time frame spanning approximately five years
a. The product is first introduced in selected geographical areas and then expanded in phases.
A transportation firm whose services are available to all shippers is a common carrier. a. True b. False
a. True
Direct-response marketing occurs when a retailer advertises a product and makes it available through mail or telephone orders. a. True b. False
a. True
Public warehouses will hold and issue receipts for goods used as collateral for borrowed funds. a. True b. False
a. True
Vending machines are classified as retail outlets. a. True b. False
a. True
Multiple-unit packaging does not work well for a. infrequently used products. b. products that are easy to store. c. aiding consumer acceptance. d. two-for-one price offers. e. shelf-space maximization.
a. infrequently used products.
All of the activities involved in developing and providing a container with graphics for a product are called a. packaging. b. advertising. c. labeling. d. containerization. e. parceling.
a. packaging
Competition-based pricing is a. used when costs and revenues are considered secondary to competitors' prices. b. not useful as a method of increasing or maintaining market share. c. of little use if the competing products are homogeneous. d. not able to increase sales. e. most often used when competing products are homogeneous.
a. used when costs and revenues are considered secondary to competitors' prices.
A wrench used to make adjustments to machinery that produces copper wire is classified as
accessory equipment
An order of calculators with new features just arrived for the finance department of Nike. These calculators represent
accessory equipment.
After several years of success with the product line, Procter & Gamble introduced its popular Sure deodorant in three new scents. This is an example of _____________ modification.
aesthetic
When price helps Josh decide to purchase a Chevrolet Cavalier instead of a Mercedes because he also wants a Harley-Davidson motorcycle, price serves the function of
allocator.
A new product should be left in a test market long enough to
allow buyers a chance to repurchase the item.
Brand names such as Tide, Surf, Biz, and Wisk are effective names because they
are easy for customers to say, spell, and recall.
Demand-based pricing, unlike cost-based pricing, places firms in a better position to
attain higher profit levels.
A neighborhood shopping center usually has at least one large department store to attract customers to the center. a. True b. False
b. False
Neighborhood shopping centers often promote the center and the tenants as a group. a. True b. False
b. False
Price differentiation attempts to sell a. different products with different features at the same price. b. identical products at different times at different prices. c. products at lower prices, due to economies of scale unintentionally resulting in lower net income for the company. d. products to customers based on their ability to pay. e. all products at different prices.
b. identical products at different times at different prices.
All of the following are characteristics of the introduction stage of the product life-cycle except a. usually, a low profit or even a loss. b. the appearance on the market of refinements or extensions of the original product. c. relatively few competitors. d. often, high price. e. low consumer awareness and acceptance of the product.
b. the appearance on the market of refinements or extensions of the original product.
Appliances, men's suits, and ___________ are examples of shopping products.
bicycles
Toyota was recently able to endure challenging times that required massive recalls affecting several million of its vehicles. Toyota has relied on its ____________ to survive and continue to prosper.
brand loyalty
The Morton's Salt Girl, the Pillsbury Dough Boy, and Planters' Mr. Peanut are all examples of
brand marks.
The part of a brand that can be spoken letters, words, numbers, and/or pronounceable symbols is called a
brand name.
GE, Kellogg's, Mercedes, and Dell are all examples of
brands.
The number of units that must be sold for the total revenue to equal the total cost is called the __________ quantity.
breakeven
Car Tunes, a national car stereo retailer, markets stereos and speakers. The company will soon sell car alarms and cellular phones to ______________ its product mix.
broaden
A good or service intended primarily for use in producing other goods or services is a ____________ product.
business
If Texas Instruments hires an accounting firm to compute the company's taxes, the accounting firm is providing a(n) _________ service.
business
Which of the following constitutes an ROI? a. Amount earned from sales before taxes b. Amount realized from cutting production costs c. Amount earned as a result of a financial investment d. Amount, or ratio, that represents rate of investment e. Amount earned as gross income
c. Amount earned as a result of a financial investment
Which of the following is considered a trade name? a. Tide laundry detergent b. GE c. General Motors Corp. d. Coke e. Adidas' three stripes
c. General Motors Corp
Which of the following types of brands are the least commonly purchased at grocery stores? a. Producer b. Store c. Generic d. Manufacturer e. Private
c. Generic
Which type of store has high sales volume, little service, and prices 20-40 percent lower than supermarkets? a. Specialty store b. Superstore c. Warehouse club d. Off-price retailer e. Convenience store
c. Warehouse club
Price differentiation is a. a form of competition-based pricing. b. a form of cost-based pricing. c. a form of demand-based pricing. d. focused on achieving fewer sales but at higher prices. e. focused on selling different goods for different prices.
c. a form of demand-based pricing
All of the following are functions of packaging except a. consumer convenience. b. product protection. c. entertainment. d. promotion. e. added benefits.
c. entertainment.
All of the following are characteristics of warehouse showroom retailers except a. large, low-cost buildings. b. vertical merchandise displays. c. members-only stores. d. large on-premise inventories. e. minimum service.
c. members-only stores.
A hotel room in New Orleans during Mardi Gras costs considerably more than it would during the following week. This is an example of a. status-quo pricing. b. cost-based pricing. c. price differentiation. d. variable pricing. e. price adjustment.
c. price differentiation
All of the following are stages in the evolution of new products except a. business analysis. b. commercialization. c. product modification. d. screening. e. product development.
c. product modification.
Discounts offered to encourage early payment of outstanding accounts are called ___________ discounts.
cash
Staples, Babies 'R' Us, and Petsmart are examples of
category killers
Paper, pencils, oils, and _________ are examples of supplies
cleaning agents
The stage in the evolution of new products in which the product is launched into full-scale manufacturing and marketing is called
commercialization.
A major drawback of price competition is that
competitors can also lower their prices.
Automobile fenders are an example of
component parts.
The Glo-Brite Company is considering development of a new children's toothpaste in fun-shaped dispensers. Before performing any business analysis on the product, Glo-Brite would like an initial response from potential customers to determine interest in a toothpaste of this type. Glo-Brite will begin ________________ to gather the information.
concept testing
The stage of new product development in which potential customers are presented with a written or oral description of the product to determine their initial attitudes and buying intentions is called
concept testing
Hillary has a new product idea that aligns well with her company's current organizational resources. She puts together a presentation for potential buyers and requests feedback on their reactions and suggestions. Hillary is
concept testing.
Lever Brothers is considering an idea for a new liquid laundry detergent that contains a whitening agent. The company presented its proposed new product to a group of potential customers in the form of a short explanation and questionnaire. Lever Brothers is conducting
concept testing.
A good or service that is intended primarily for personal or household use is called a(n) ____________ product.
consumer
A product usually declines because of technological advances or environmental factors or because
consumers have switched to competing brands
Consumers would most likely treat candy bars as ____________ products.
convenience
Energizer batteries are sold in multipacks to make it more convenient for the consumer, who usually needs more than one battery at a time. Energizer batteries would be classified as a ______________ product.
convenience
Which of the following is not a major factor contributing to brand equity? a. Brand loyalty b. Perceived brand quality c. Brand awareness d. Brand relationship e. Brand associations
d. Brand relationship
A number of federal regulations specify the information that must be included in labeling. Which of the following is not specified? a. Fabric content b. Safety precautions c. Ingredient content d. Packaging content to indicate whether the package is recyclable e. Fabric cleaning instructions
d. Packaging content to indicate whether the package is recyclable
Product ideas are transformed into prototypes during which stage of the product development process? a. Business analysis b. Test marketing c. Commercialization d. Product development e. Concept testing
d. Product development
Which of the following is considered a generic term? a. Kleenex b. Q-tips c. Saran Wrap d. Thermos e. Jello
d. Thermos
Which of the following is an example of a raw material that would be used in the production of a physical product? a. Steel sheets b. Paper c. Plastic d. Timber e. Gasoline
d. Timber
Which of the following is not generally considered to be a stage in the product life-cycle? a. Introduction b. Growth c. Maturity d. Transition e. Decline
d. Transition
Price leaders a. are sold at the highest possible price. b. maximize profits. c. lead to increased revenue or lower costs when prices are increased or decreased. d. are sometimes sold at less than cost in hopes that sales of other products will increase. e. lead the industry in sales.
d. are sometimes sold at less than cost in hopes that sales of other products will increase.
All of the following are characteristics of the maturity stage of the product life-cycle except a. a peak in the sales curve. b. a decline in the sales curve. c. simplification of product lines. d. increased distribution. e. increased price competition.
d. increased distribution.
A brand is all of the following except a(n) a. name. b. term. c. symbol. d. item usually owned by the producer or manufacturer. e. design.
d. item usually owned by the producer or manufacturer.
AT&T charges different rates for long-distance service depending on time of day and distance of the call. This pricing method is called _____________ pricing.
demand-based
Delta Airlines prices its tickets so that it is less expensive to travel between midnight and 5:00 a.m. than during the day, when there is heavy business travel. This illustrates __________ pricing.
demand-based
If Tyson, a poultry producer, decided to start producing veggie burgers, this would be an example of
developing an entirely new product line.
The fact that senior citizens are charged a lower price at movie theaters than are younger adults is an example of _______ pricing.
differential
L'eggs Pantyhose often sends potential customers free trails of its pantyhose in the mail. This is an example of
direct-response marketing
Target and Walmart are considered
discount stores.
A deduction from the price of an item is called a
discount.
Which of the following is a manufacturer brand? a. Sam's Choice soft drinks b. Kenmore appliances c. Diehard batteries d. Gap clothing e. Doritos chips
e. Doritos chips
Which of the following is not a phase in the new product development process? a. Business analysis b. Test marketing c. Development d. Screening e. Modification
e. Modification
All of the following are business products except a. color televisions in the electronics department of a large retail store. b. iron ore in a steel plant. c. small hand tools in an automobile repair shop. d. toner cartridges in the supply closet of a word processing center. e. a new appliance in someone's home.
e. a new appliance in someone's home.
Koolers Incorporated feels that at its current stage-growth-it needs to meet its competition. It can best do this by all of the following means except a. initiating product improvements. b. expanding the product line to appeal to specialized market segments. c. lowering prices. d. emphasizing customer service and prompt credit for defective products. e. eliminating less profitable versions of the product.
e. eliminating less profitable versions of the product.
In spite of the rigorous process for developing product ideas, the majority of new products
end up as failures.
A written explanation of the responsibilities of the producer in the event the product is found to be defective or otherwise unsatisfactory is called a(n)
express warranty
Inside the packaging of a new bread machine she purchases, Ginger finds a paper stating, "All our products will be replaced within the first year if they fail to operate correctly. However, consumer misuse or abuse will effectively end this policy." This is a(n)
express warranty.
A branding strategy in which a firm uses the same brand for all or most of its products is called ___________ branding.
family
To promote an overall company image, Borden dairy products are packaged in similar designs and colors. This approach is known as
family packaging
Costs that are incurred no matter how many units of a product are produced or sold are called
fixed costs.
The redesign of a bicycle to improve its safety is an example of a(n) _____________ modification.
functional
When Duracell came out with a new battery that significantly outlasted the company's earlier product, the battery had undergone a(n) ________________ modification.
functional
In her local supermarket Susan purchases green beans in a white can simply labeled as green beans. This represents a(n) __________ brand.
generic
The product life-cycle stage in which there is a rapid sales increase, other firms have begun to market competing products, and lower unit costs and an overall tendency toward increased profit prevail is called
growth.
Buyers may relate price to quality. To such a buyer, a higher price for a product is an indicator of
higher quality.
The stage in the evolution of a new product in which a pool of ideas is created is called
idea generation
Products that are designed to be similar to and compete with existing products of other firms are called
imitations.
hen Pepsi introduced Mountain Dew Code Red, it was
increasing the depth of a product mix
A branding strategy in which a firm uses a different brand for each of its products is called ___________ branding.
individual
Entirely new products are called
innovations
The first stage of the product life-cycle is the __________ stage.
introduction
The product life-cycle stage in which consumer awareness and acceptance of the product are low, there are few competitors, and there is a gradual rise in sales because of promotion is called
introduction
The part of the package that contains the presentation of information on a product is called a
label.
The presentation of information on a product or its package is known as
labeling.
Price competition occurs when a seller emphasizes the
low price of a product.
A brand that is owned by a producer is called a
manufacturer brand
If Nabisco had established a pricing objective of selling one out of every three crackers consumed in the world, it would have established an objective based on
market share.
In cost-based pricing, a producer adds an amount to the total production cost to provide a profit. The amount added to the production cost is called a
markup.
Arm & Hammer launches a campaign to extend the life of its baking soda products through improved packaging and new uses in products such as toothpaste and cat litter. These new uses of products and other modifications are generally created during the phase of the product life-cycle.
maturity
The product life-cycle stage in which there is a decrease in the rate of sales growth, the sales curve begins to decline, and dealers simplify their product lines is called
maturity.
The strategy of setting a single price for two or more units is known as
multiple-unit pricing.
WD-40, Inc. markets only one product, its namesake chemical lubricant. The company offers the product in several different container sizes: smaller ones for household use, and larger ones for industrial use. WD-40 would be considered as having a
narrow product mix.
Lisa goes to a car dealership to purchase a new Honda Accord. She is not willing to pay the listed sticker price for the car, and she instead works with the salesperson and manager until a mutually satisfactory price is agreed upon. This is an example of _______ pricing.
negotiated
Bread, gasoline, and __________ are examples of convenience products.
newspapers
For any product, the breakeven quantity is the
number sold such that costs equal revenues.
The strategy of setting prices at uneven amounts that are slightly below an even or whole number of dollars is called
odd-number pricing
T J Maxx, Burlington Coat Factory, and Marshalls are examples of
off-prices stores.
Discount stores are self-service merchandise outlets that sell goods at lower prices than usual and a. locate their showrooms in high-rent districts.
operate on lower markups.
The strategy of setting a low price for a new product to gain a large market share for the product quickly is called
penetration
The temporary reduction of prices on a patterned or systematic basis is called
periodic discounting.
The strategy of charging the highest possible price for a product during the introduction stage of its life-cycle is known as
price skimming.
The amount of money that a seller is willing to accept in exchange for a product, at a given time and under given circumstances, is called the
price.
Walgreens advertises the fact that Bayer aspirin may cost more but works no better than Walgreens' own brand of aspirin. In this example, Walgreens is competing on the basis of
price.
Equate, a brand of health and beauty care products, is available only at Walmart stores. Equate is a __________ brand
private
The Arizona Jean Co. brand of jeans, owned by JCPenney, is a(n) ___________ brand.
private
Sheet steel to be used in making automobile fenders is an example of
process materials.
When a company changes one or more of a product's characteristics to manage its product mix, it is engaging in
product
There are seven stages in the evolution of a new product. The stage in which an idea is determined to be technically feasible is
product development.
When a product experiences sales revenue and profit increases, reaches a peak, and then declines, it goes through what is called
product life-cycle.
Borden, Inc. offers pasta, snacks, grocery, and dairy items as well as films, adhesives, and other nonfood products. These products are referred to as Borden's
product mix.
If a customer has moderate loyalty toward Heinz ketchup, she likely will
purchase other products that carry the Heinz name.
Discounts given to customers who buy in large amounts are called ___________ discounts.
quantity
Iron ore in a steel plant is an example of
raw materials.
If a company invests $1,000,000 to develop and market a new product with a goal of earning $1,200,000 on the product by the end of the year, it will price the product based on
return on investment goals
If John purchases a tie from JCPenney for $30, that $30 represents JCPenney's ___________ from the sale
revenue
The label on a bag of Fritos is not required to describe the
safety precautions.
The largest number of product ideas are rejected during the __________ stage of new product development.
screening
The stage in the evolution of new products in which ideas that match company objectives are analyzed as to whether the firm has the required expertise for the product's development and marketing is called
screening.
One of the most significant issues of online retailing is
security
If Nordstrom sales associates are there to greet you as soon as you walk through the door, to assist you personally in finding the merchandise you are looking for, and to inform you about the store's events and services, the company is striving to compete on
service.
Chris and Kimberly White decided to buy new furniture for their bedroom. They spent considerable time shopping around, comparing prices and styles. Bedroom furniture is best classified as a ______________ product.
shopping
Consumers would most likely treat personal computers as ____________ products.
shopping
Carmen Cattucci wanted to buy a new car. She visited several dealers to compare prices, styles, and dealer reputations. Finally, she bought a car from a local dealer. The purchase of a car is an example of a
shopping product.
Consumer products can be divided into the following three categories:
shopping, convenience, and specialty
General Mills has been able to extend the life of Bisquick baking mix by
significantly improving the product's formulation.
A consumer product for which buyers will not accept a substitute, for which purchasers do not compare alternatives, and that is purchased infrequently and with extra effort on the buyer's part is a _________________ product.
specialty
Renee collects antique Fabergé eggs. For most of these eggs, only one or a few were created of each design. These eggs would best be classified as ___________ products.
specialty
At a busy intersection in Atlanta, there are four competing gas stations. Each of the stations charges about the same for each gallon of gasoline. The pricing objectives of these firms is
status-quo pricing.
A large, self-service store that sells primarily food and household products is called a
supermarket
Rouse's is an example of a
supermarket
Meijer, a retail chain, carries a full line of food and nonfood items as well as product lines such as small appliances, some furniture, automotive items, clothing, and lawn and garden equipment. Maijer is a(n)
superstore
The stage in the evolution of new products in which the product is introduced in a limited way to determine buyers' reactions is called
test marketing.
The sum of the fixed costs and the variable costs of producing a certain number of units is called the
total cost.
The total amount received from the sales of a product is referred to as
total revenue.
A discount from the list, or retail, price offered to intermediaries is a(n) ___________ discount.
trade
Discounts from the list price offered to intermediaries are called __________ discounts.
trade
The complete and legal name of an organization, such as Walmart Stores, Incorporated, is called a
trade name.
A symbol or word that is registered with the U.S. Patent and Trademark Office and is thus legally protected from use by anyone but its owner is a
trademark.
Sherilyn operates a store called The Gift Garden. Her store sells pottery, candles, crafts, and other knickknacks that make good gifts for family and friends. The Gift Garden is a
traditional specialty store
Gap, Radio Shack, Bath and Body Works, and Foot Locker are examples of
traditional specialty stores
For a product such as staples, which of the following determines whether it is a consumer product or a business product?
use of the product
Raw materials are an example of a firm's _________ costs.
variable
Costs that depend on the number of units produced are called
variable costs