MARKETING Final Review

Phillip is on his way to work when he realizes he has a flat tire. He swings into Discount Tires and has a new tire installed. Phillip's purchase of a new tire in this situation is considered to be

An unsought good

A firm that competes on a price basis is unable to change prices frequently.

False

A run-out approach to product deletion lets the product decline without changing the marketing strategy.

False

The point at which marginal revenue equals marginal cost is the breakeven point.

False

Trial is the first stage of the product adoption process.

False

As Richard works on the prototype of a new action-oriented computer game, he is engaging in which phase of the new-product development process?

Product development

Which of the following is the best example of disruptive innovation?

Razor blade

What step in developing new products involves determining whether the product idea is compatible with company objectives, needs, and resources on a general level?

Screening

Which factor is least likely to affect pricing decisions?

Shifting stock values

Of the following choices, which would be the easiest brand name to legally protect?

Tarzink Yogurt

Communicating product benefits to consumers is very important in the introduction stage.

True

Delivery, installation, financing, repair, warranties, and guarantees are all examples of product features.

True

Designing a product that customers perceive as different from competing products is an example of product differentiation.

True

Factors affecting pricing decisions can include demand, distribution, and the way in which the product is promoted.

True

For most products, the quantity demanded goes up as the price goes down.

True

Laggards are the last to adopt a new product and usually distrust new products.

True

Nonprice competition allows a company to increase its brand's unit sales through means other than changing the brand's price.

True

Price cuts are typical in a product's growth stage.

True

The three major ways to modify a product include

aesthetic, quality, and functional changes.

A product mix is best described as

all products offered by a firm

Products are classified as being business or consumer products according to the

buyer's intended use of the product.

One disadvantage of test marketing a new product is that

competitors may copy the product.

If Norwegian Cruise Lines increased the price of its seven-day cruise package by 10% and, as a result, experienced a 20% decline in customer bookings, Norwegian's demand would be

elastic.

Early in the commercialization phase, marketers must make decisions about

warranties, repairs, and replacement parts.

______________ refers to how a product is conceived, planned, and produced.​

​Product design

The owner of Big Jim's Motorcycles is opening a new retail location. Which of the following is most likely to be a fixed cost for Big Jim's Motorcycles?

Building rent

Marianna tells Rajesh that she likes his team's idea about a new three-lace running shoe but wants him to put together some figures regarding anticipated sales, costs, and resulting profits. She is asking Rajesh to proceed to which stage of the new-product development process?

Business analysis

Which of the following is NOT a business product?

Calculators bought to help individuals complete their personal federal income tax forms

Which of the following products is most likely to have an inverted C-shaped demand curve?

Eternity perfume

Buyers want to exert only minimal effort to obtain shopping products.

False

Concept testing presents a small sample of potential buyers with a trial version of the new product to determine their initial reactions.

False

Consumers are reluctant to purchase substitute brands if a desired brand of a convenience product is unattainable.

False

Customers always interpret a higher price to mean higher quality.

False

Electricity is an example of a product that is price elastic.

False

Fixed costs vary with the number of units produced or sold.

False

Line extensions are less common than other new products because line extensions are more expensive and more risky.

False

Product design is the process of creating and designing products so that consumers perceive them as different from competing products.

False

Profits for a firm are computed as follows: Profits = Total Revenue - Fixed Costs.

False

Test marketing should be conducted when a product has been given a low probability of success.

False

The concept of product quality is the same from consumer to consumer and from consumer markets to organizational markets.

False

Venture team members usually come from the same functional areas within the firm.

False

In which stage of the product life cycle do profits begin to decrease?

Growth

When Cameron was visiting family in Missouri, he ate a flavor of Boulder Canyon Kettle Chips that he had never seen before. When he returned home to Virginia, he could not find the flavor in any store. Which of the following reasons most likely explains why he could not find the flavor at home?

He was visiting a city being used as a Boulder Canyon's test market.

At what point does a firm maximize profit?

The point at which marginal cost equals marginal revenue

A brand name is the part of the brand that is spoken.

True

A customer looking for the lowest price on a mattress without concern for the quality of the mattress or the status gained by buying and using a certain brand is a price-conscious customer.

True

A product need not be a physical product.

True

A product's classification can influence its price, distribution, and promotion.

True

Barter is the oldest form of exchange.

True

Brand and product managers operate cross-functionally.

True

Business analysis provides a tentative sketch of a product's profitability.

True

Price is the most easily adjusted ingredient in the marketing mix.

True

Price is the value that is exchanged for products in a marketing transaction.

True

Profits decline in the maturity stage, largely because of increased competition.

True

The buyer's intent can determine whether an item is classified as a consumer or a business product.

True

The first adopters of a product are the innovators.

True

The major drawback in using aesthetic modifications is that their value is determined subjectively.

True

Use of the product is the most important means of distinguishing consumer products from business products.

True

One advantage of nonprice competition is that

a firm can build customer loyalty.

A product line is defined as

a group of closely related products that are considered a unit because of marketing, technical, or end-use considerations.

A(n) ____ is a concept, philosophy, or image.

idea

The three levels of brand loyalty from strongest to weakest are

insistence, preference, recognition.

The test marketing stage

is a sample launching of the entire marketing mix.

The width of a product mix is measured by the number of product

lines a company offers.

The major characteristic of a private brand is that

manufacturers are not identified on the product.

The General Auto Insurance advertises its automobile insurance as "For a great low rate you can get online, go to The General and save some time!" General is engaging in

price competition.

After building a prototype of his new device, Barry is asked to conduct rigorous functional testing to see if the device meets performance and safety qualifications. This is part of the ____ phase of the new-product development process.

product development

Marketers begin to make decisions about labeling, packaging, branding, pricing, and promotion during

product development.

If Umbro faces a standard demand curve that exists for most products, as it raises the price of its soccer balls, the

quantity demanded goes down.

Convenience products are

relatively inexpensive, frequently purchased items for which buyers exert only minimal purchasing effort.

A product item is best described as a

specific version of a product.

The major drawback to using aesthetic modifications is

that the value of the modification is determined subjectively.

Price is a key element in the marketing mix because it relates most directly to

the generation of total revenue.

At the breakeven point,

the money a company brings in from selling products equals the amount spent producing the products.

Louis is reading the online report of the tuition and fees he owes for this semester of college. Since he has signed up for online banking, he pays the amount immediately. The amount Louis just paid is considered to be

the price.

If a product has an inelastic demand and the manufacturer raises its price,

total revenue will increase.