MKT 340 Exam 3
In a ________ pricing tactic, sellers advertise very low prices and then aggressively pressure customers to purchase higher-priced versions of the product advertised with the low price.
Bait and Switch
What situation is occurring if a 1 percent decrease in price results in more than a 1 percent increase in quantity demand?
Demand is price elastic.
Which of the following is the most logical example of complementary products?
Hot dogs and hot dog rolls
Sam was called in to meet with his boss, Tricia. He was afraid he was going to be fired for the mistake he had made dealing with an important customer of the store. Instead, Tricia explained that he had handled the situation well, listening to the customer and finding a fair solution. Tricia told him that, even more importantly, working the way you did to correct the error could result in
Increased customer purchases and positive word of mouth
What makes a high/low pricing strategy appealing to sellers?
It attracts two distinct market segments.
Most customers want to achieve a fair solution following a service failure. All of the following factors affect a person's perceptions of "fairness" in these kinds of situations except
The firm's policy on service recovery
Cross-price elasticity is the
The percentage change in demand for product A that occurs in response to a percentage change in price of product B
Kristina created a virtual prototype of her new line of swimwear on a website to show to consumers. Kristina will ask consumers what they think of the clothing. Which is the most important question that Kristina should ask?
Will retailers purchase the swimwear if it becomes available?
Assume the demand for electricity, a necessity with few substitutes, is -0.2. If the electric company raised its rates by 10 percent, we would expect
a 2 percent decrease in quantity demanded.
Yurgen is opening a financial consulting service for high-income retirees in his area. This target market is used to paying for quality and associates high quality with high prices. In this instance, Yurgen should probably not use a market penetration pricing strategy because
a low price might signal low quality.
By providing good customer service, firms __________ their products.
add value to
Golf ball manufacturers use "Iron Mike," a machine that swings a golf club at a constant velocity, to test the distance for new golf ball designs. When using Iron Mike, the manufacturers are engaged in
alpha testing
Some credit cards provide free liability insurance, funded by the bank issuing the card, when a customer pays for a rental car using the card. This extra insurance is an example of
an associated service.
In developing marketing strategies, why is price often the most challenging of the four Ps to manage?
because it is the least understood element of the marketing mix
In many cases, pioneers lose their market lead and initial market share to imitators who
capitalize on the pioneers' weaknesses
In determining the price for his company's new photo printer, Raymond is assessing the total cost of owning his printer as compared to alternative products available in the market. Raymond is using __________ pricing.
cost of ownership
The Service Gaps Model is designed to highlight those areas where
customers believe they are getting less or poorer service than they should
Price advertisements should never
deceive customers to the point of doing harm
Marketing expenditures allocated carefully can result in greater brand recognition, awareness, perceived value, and consumer loyalty for the brand, which all enhance the brand's
equity
The __________ occurs when unit cost drops as the quantity sold increases.
experience curve effect
Nora is deciding whether to purchase brand name sneakers or a store brand. She has purchased other shoes with the same brand name in the past but was only marginally satisfied. In this situation, Nora is likely to purchase the store brand sneakers because they offer
greater perceived value
In a competitive market, perceived value is determined by consumers mostly
in relation to the value of its close competitors
The observation that consumers are generally more sensitive to price increases than to price decreases suggests that
it is easier to lose customers with a price increase than to gain customers with a price decrease.
One reason marketers of new, innovative products often start out with a price skimming strategy rather than a market penetration strategy is that
it is easier to lower prices than to raise them
Value-based pricing can be difficult to implement because
it necessitates a great deal of consumer research to be implemented successfully.
Computer game companies constantly monitor computer game-related blogs keeping track of the latest hot products, because they know that their customers crave the "latest and greatest" games. They use this information to create new products that primarily provide the benefit of
keeping up in a market where sales come mostly from new products
David's marketing research returned the finding that customers were staying away from his bookstore because of a lack of services like gift cards, return policies, and special orders. David was shocked. "Nobody ever asks about that stuff! If it were that important, people would ask about it." David is likely suffering from a(n) ________ gap.
knowledge
By changing a standard from "be nice to customers" to "greet every customer, and if possible by name," a services marketing manager has created a(n) __________ goal.
measurable
The Apple iPod changed the way people listen to music but it also created an entirely new industry devoted to accessories such as cases, ear buds, docking stations, and speakers. The Apple iPod is considered a
pioneer product
Sharon knew that her established customers liked her product much better than her competitor's. She was planning to expand into new markets, and she was considering pricing. She was leaning toward charging a higher price than competitors to help demonstrate that hers was a high-quality product. Sharon was considering
premium pricing.
There is an old saying, "If you have to ask the price of a yacht, you cannot afford it." Products like yachts are most likely to be associated with
prestige pricing.
When Dr. Putt invented his Eye-Over-the-Ball (EOB) golf putting device, he knew during the introductory stage
sales would be low and profits nonexistent, but he would attract golf equipment innovators
Medical services and assisted living care are examples of
services an aging population will increase their demand for
When Burroughs Wellcome introduced the first anti-AIDS drugs, it initially set the price at $10,000 for a year's supply. Burroughs Wellcome was probably pursuing a(n) __________ pricing strategy.
skimming
By setting appropriate service standards and measuring service performance, firms can attempt to close a __________ gap.
standards
It is almost impossible to watch a sporting event on television without seeing Nike's "swoosh" check mark, which is Nike's
symbol
Some consumers make it a point to go shopping the day after Christmas to stock up on discounted wrapping paper and bows for the following year. These consumers are
take advantage of seasonal discounts
Because market and operating conditions are different in each target market
the choice of a pricing strategy should be specific to the target market
All of the following scenarios illustrate a reason why a firm would eliminate an item within a product line except
the firm has decided to capture new markets
Sales of national brands of orange juice tend to increase when the economy is doing well, while sales of generic orange juice increase when the economy is not doing well. This is an example of how _______ impacts demand for products.
the income effect
There are many options available to consumers when it comes to breakfast cereals. So, if Kellogg's significantly increases the price of Rice Krispies, consumers are more apt to buy alternate cereals instead. This illustrates which concept?
the substitution effect
Zappos.com, an online shoe store, offers an easy, no-hassle return procedure. This relates to the _______ of its products.
trialability
The XYZ car manufacturing company is advertising its new hybrid vehicle. It understands that its competition, Toyota's hybrid car, the Prius, is known for being economical, a good value, stylish, and good for environment. Toyota has the advantage of
brand associations
Ferrari is well known as a brand of luxury sports cars; accordingly, it has leveraged its brand name to introduce clothing offerings emblazoned with its horse logo. It has also licensed its logo to 68 different products, from sunglasses to guitars. Ferrari might be at risk of which of the following?
brand dilution
Many stores now e-mail codes to their customers that can be used on their websites or printed and brought into the store to receive discounts for products purchased. In this instance, the customer is using a __________ to receive the discount.
coupon
An excellent, inexpensive, and readily accessible method for assessing customers' service expectations is
customer complaints
Imagine that you are the marketing manager of a hotel chain that wants to implement a customer reward and loyalty program. You research the firm Sabre Hospitality Solutions, which offers its services to global and boutique hotel chains to develop and execute these types of programs. Sabre Hospitality Solutions is a company that focuses on
customer relationship management.
Julia's is an upscale women's clothing store. Prices are based on customers' beliefs about the value of the clothing. The store focuses on a limited target market and provides excellent customer service. Julia's is using a ________________ pricing strategy.
customer-oriented
As soon as she saw one, Hillary wanted a flat-screen television, but she was worried about making the wrong choice. She waited until there were alternatives in the market with lower prices and improved quality. Hillary is part of the __________ diffusion of innovation group.
early majority
Using technology and _______ are two ways a delivery gap can be reduced in size.
empowering employees
General Mills offers three sizes of its popular cereal Cheerios: 10-, 14-, and 18-ounce boxes, and they are priced at approximately $2.99, $3.99, and $4.49, respectively. The company employs this tactic to
encourage consumers to purchase larger quantities each time they buy
Each generation of cell phones has provided greater clarity, range, security, and multifunctionality. If marketers of cell phones use these features as a basis for pricing, they would be using ______ pricing.
improvement value
Tess is the marketing manager for a fast-food restaurant chain. She uses a target return pricing strategy because her firm's primary objective is to
increase profits.
A study found that, among addicted smokers, a 10 percent increase in the price of cigarettes resulted in a 2 percent decrease in quantity demanded. For these consumers, cigarettes have a(n) __________ price elasticity demand.
inelastic
Whenever Andrew considers upgrading his personal computer system, he consults with Jeremy, a knowledgeable friend who always has the newest technology. For Andrew, Jeremy is a(n) __________ in the diffusion of innovation curve.
innovator
Sean relocated to take a new job, and when he got sick he needed to find a doctor. He discovered during the visit that he didn't like the one he had chosen, and he knew he'd never go back to that doctor. From a marketing perspective, his situation highlights one of the key differences between products and services, known as
inseparability
Colin has been directed by his boss to determine whether their company is meeting customers' service quality expectations. One of Colin's problems is that services are __________, making evaluation of service quality difficult.
intangible
If a firm promises more than it can deliver,
it creates a communication gap
Bob and George live in the United States. Bob recently asked for George's cell phone number, but George said he didn't own a cell phone. George would probably be considered a(n) __________ in the diffusion of innovation process.
laggard
All of the following are characteristics of products in the maturity stage of the product life cycle except
laggards are a major focus of marketing efforts
Ron sells commercial-grade tools to building contractors. Whenever he visits his customers, he looks to see if they are using his tools for other tasks or have modified the tools for some other purpose. These customers are __________, who can provide ideas for new and improved products.
lead users
In 2015, Nike signed an 8-year, $1 billion apparel deal with the NBA. This is an example of a deal for _________ rights.
licensing
Eric is a sales rep for an established building materials manufacturer. Business is good, but he is concerned that the company has spent little on new product development and has not created a new product in over five years. Without new products, Eric can only market to his current customers or
market the same products to similar customers.
A _______ strategy involves accurately measuring all the factors needed to predict sales and profits at various price levels, so that the price level that produces the highest return can be chosen.
maximizing profits
When Toyota introduced its Scion line of cars, the lowest priced model was listed for $15,000 while the highest priced model was listed for $21,000, with two other list prices in between. Each price point represented distinct differences in the features and quality of the cars. Toyota used a ______ pricing approach.
price lining
The _______ step in the product development process is critical, requiring tremendous resources and extensive coordination of all aspects of the marketing mix.
product launch
Zappos is a successful online shoe company. One of the difficulties in running a shoe company is the need to have significant __________, a large number of items in each product line.
product line depth
For a major university, undergraduate studies, graduate studies, and professional programs would be __________ within the university's product mix.
product lines
All of the following are considered an important function of labels on products and packages except
protecting against damage to the product.
After observing a customer verbally abuse a server, the first thing a manager can do to ensure quality service is to
provide emotional support to the waiter
Brad always buys and uses Nike brand golf balls. If he finds a Titleist or Callaway ball in the rough, he gives it away. Brand-loyal golfers like Brad allow Nike to charge a higher price and not lose many sales. By building a strong brand, Nike has effectively
reduced the price elasticity of demand for its products.
Kendra is taking a backpacking trip across Europe. She wants to make sure that the backpack she chooses is the best one for her adventure, so she is spending a considerable amount of time comparing alternatives to make sure she selects the best one. For Kendra, this backpack represents what type of product?
shopping
All of the following statements regarding brand loyalty are true except
the marketing costs of reaching loyal customers are typically very high
Bank of America uses a complex polling system coupled with a customer response measurement system to assess consumers' responses to new products and services. Bank of America is using a(n) __________ program to improve service quality and service offerings.
voice-of-customer
When automobile manufacturers introduced SUVs, they distributed and promoted them in the United States, but not in Europe where gasoline is heavily taxed and roads are much smaller. Car manufacturers recognized that this new line of cars
were not compatible with European market conditions.
