Exam 2 review
core layer
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
A product has three distinct layers. The second layer is the ________, which is the physical good or delivered service.
brand meaning
The concept of ________ encompasses the beliefs and associations that a consumer has about a brand
idea generation
The first phase of new product development is ________
product bundle pricing
Which of the following product mix pricing strategies involves pricing multiple products to be sold together
The product life cycle concept can be applied by marketers as a useful framework for describing how
a market responds to a product over time
fixed costs
are costs that do not vary with production or sales level
cost-plus pricing
involves adding a standard markup for profit
price
is the only element in the marketing mix that produces revenue
product modification
A ________ is a modification to an existing product
trade mark
A ________ is the legal term for a brand name, brand mark, or trade character
continuous innovation
A consumer doesn't have to learn anything new to use a(n)
12
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
market-penetration pricing
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
inelastic
If demand hardly changes with a small change in price, the demand is
decline
The final stage in the product life cycle is ________
maturity
The sales peak typically occurs during which stage of the product life cycle
licensing
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
laggards
are the last in the population to adopt a new product
Companies that adopt value-added pricing
attach value-added features and services to differentiate their offers and support their higher prices
A quantity discount is a price reduction for buyers who
buy merchandise in bulk
cost-based pricing
Which of the following processes does value-based pricing reverse
promotional
Low-interest financing and longer warranties are both examples of ________ pricing
everyday low pricing
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
by-product
Using ________ pricing, companies are able to turn their trash into cash, allowing them to make the price of their main product more competitive
customer perception of the product's value
What sets the ceiling for product prices
product costs
What sets the floor for product prices
promotional 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
good-value
When McDonald's and other fast food restaurants offer "value menu" items at surprisingly low prices, they are most likely using ________ pricing
competitors' pricing
When performing a break-even analysis, the manufacturer should consider all of the following EXCEPT
Diffusion refers to ________
how the use of a product spreads throughout a population
good-value
pricing refers to offering just the right combination of quality and gratifying service at a fair price
price elasticity
refers to a measure of the sensitivity of demand to changes in price
dynamically continuous innovation
A(n) ________ is a pronounced modification to an existing product that requires a modest amount of learning or change in behavior to use it
discontinuous innovation
Consumers must engage in a great amount of learning to use a(n) ________ because no similar product has ever been on the market
variable costs
Costs that change with the level of production are referred to as
good-value pricing
Which of the following involves introducing less-expensive versions of established, brand name products
competition based pricing
Which of the following involves setting prices based on a rival firm's strategies, costs, prices, and market offerings
facility rental payments
Which of the following is most likely a fixed cost
discount and allowance pricing
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
growth
Which stage in the product life cycle is characterized by rapidly increasing sales and increasing profits
packaging
________ involves designing and producing the container or cover for a product
cost-based pricing
________ involves setting prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for effort and risk
high low
________ pricing involves charging higher prices on an everyday basis but running frequent promotions to lower prices temporarily on selected items
customer-value based
________ pricing uses buyers' perceptions of value as the key to pricing
price
________ refers to the amount of money charged for a product or service
As production moves up, the average cost per unit decreases because
fixed costs are spread over more units
market skimming
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
target return pricing
which of the following is a cost-based approach to pricing
generic branding
which of the following is essentially no branding at all
