MKTG 361 Unit 2

Match the description with the method for managing a product through its life cycle Modifying the product

Altering one or more of a product's characteristics to increase its value to customers and increase sales

Match the following types of warranties with the correct definition Implied

Assign responsibility for deficiencies to manufacturer

Which two of the following are disadvantages of multibranding?

Awareness will have to be built from scratch Advertising and promotion are typically more expensive

When wilkinson sword exchanged some of its knives and for advertising used to promote its razor blades, it is an example of

Barter

A new product that is not compatible with existing habits and provides no incentive to change is likely to

Be resisted by consumers

The advantages of _____ are that it can provide a competitive advantage and consumers are often willing to pay a higher price for a product with it

Brand equity

A contractual arrangement between firms, whereby one firm allows another to use its brand name, logo, symbols, and/or characters in exchange for negotiable fee, it is called:

Brand licensing

_____ allows consumers to be more efficient shoppers by streamlining decision making, particularly external search

Branding

The __________ - _________ point is the quantity at which total revenue and total cost are equal

Break-even

Hershey foods teaming with General Mills to offer a breakfast cereal called Reese's Peanut Butter Puffs, where both brand names were used on the packaging is known as

Cobranding

Factors that limit the range of pries a firm may set are known as pricing

Constraints

Multiproduct branding is also called which two of the following:

Corporate branding Family branding

An example of brand extension is

Cosmopolitan magazine and cosmopolitan yogurt

Selling via the Internet reduces which pricing constraint?

Cost of changing prices

In the long run, a firm's ____ and those of its distributors set a floor for its price, allowing the firm to both survive and get its product to consumers

Costs

The social responsibility pricing objective often results in

Decreased profits

This curve represents grouping of customers who adopt new products in a process known as

Diffusion of innovation

An example of a variable cost is

Direct labor used to manufacture the product

Which purchasing group represents about 13.5 percent of all buyers in the market and is crucial for bringing the other buyer categories to the market?

Early Adopters

Along the diffusion of innovation curve, ___________ make up the second group of consumers to adopt an innovation; they tend to be leaders in a social setting

Early adopters

Which group of consumers is crucial to the success of a new product because of its social influence over later categories of adopters

Early adopters

A product with _____________ demand is one in which a slight decrease in price results in the relatively large increase in demand to units sold

Elastic

Price _______________ of demand is a measure of how sensitive consumers demand and the firm's revenues are to changes in the product's price

Elasticity

Which of the following criteria often used in naming successful brands?

Emotional names Names without legal restrictions

Honda's established name for motor vehicles allowed it to employ brand ____, using its brand to sell products in other categories like snow blowers and marine engines

Extension

One advantage of a product line _____________ is that the company can spend less money to develop brand awareness

Extension

_____________ cost is the sum of expenses of the firm that are stable and do not change with the quantity of a product and sold

Fixed

For a firm, rent, landscaping, and insurance are examples of

Fixed costs

You sell picture frames at your business and because they're flying off the shelves you decide to give your salaried managers a 5% raise. What does this do to your break even analysis point

Fixed costs increase so the break even point does as well

Cassette tapes, discs, and digital music are examples of product

Form

Price is the one element in the marketing mix that:

Generates revenues

Match the following types of benefits provided by packing and labeling with the correct example Perceptual

Graphics to convey a brand's positioning

In the ____ stage of the product life cycle, the product gains acceptance, demand and sales increase, and there are more competitors

Growth

Order the following steps in setting prices, with the first step on top

Identify pricing objectives and constrains Estimate demand and revenue Determine cost, volume, and profit relationships Select a approximate price level Set list or quoted price Make special adjustments to list or quoted price

According to price elasticity, when the price of the iPhone drops the demand for iPhones is likely to

Increase

Despite the recent increases in gas prices, Americans have barely decreased their consumption, which is an example of

Inelastic demand

Which of the following might be included on the product label:

Ingredients How the product is to be used

____ are buyers of a product or service who are the very first ones to adopt it

Innovators

Put the stages of the product life cycle in order:

Introduction Growth Maturity Decline

Packaging refers to which two of the followings:

It is any container in which a product is offered for sale. It has a label on which information is conveyed

Which of the following is an advantage of using break even analysis

It is simple

Which two of the following are ways that a product life cycle curve can vary?

Its overall length Its characteristic shape

Match the following market modification methods with correct examples Finding new customers:

LEGO is appealing to consumers outside its traditional market (boys) with a new product line for young girls called LEGO Friends

Which of the following product categories is the best example of an oligopoly

Large jetliners and which consists of just Boeing and Airbus

Besides sometimes developing new products, the product manager also manages an existing product through its

Life cycle

The brand element that cannot be spoken is the

Logo

The product life cycle is

Made up of the stages a product goes through in the marketplace, from introduction to decline

The early ______ represents the earlier half of the two largest categories of consumers on the diffusion of innovation curve

Majority

With which profit-oriented pricing objective is a firm likely to price its products relatively low compared to their cost to develop, with the prospect of gaining a high market share?

Managing for long run profits

If a company wants to legally protect its name from use by others, it needs a

Mark

Current profit ____ and target ____ are two strategies used by firms that are pursuing a profit pricing objective

Maximization Return

American firms are sometimes criticized for using which profit-oriented pricing objective, because it results in a short-term orientation?

Maximizing current profit

During the introduction stage, total industry profit is

Minimal throughout

One of the advantages of building strong brand equity is that often consumers are willing to ____ the product

Pay a higher price for

To increase customer value for a given price, the market must increase

Perceived benefits

The delicate illustrations, warm colors, and quotation about life on Celestial Seasoning packaging shown here are an example of which type of benefit added by packaging and label?

Perceptual

When harley davidson advertises to reinforce the perception that the brand is masculine, rugged, and individualistic, it is building brand

Personality

The money or other consideration exchanged for the ownership or use of a product or service is its

Price

Which element of the marketing mix is part of the profit equation and therefore has a direct effect on a firm's profits

Price

Which of the following does the market set prices?

Pure competition

Order the following types of competitive markets from most competitive to least competitive

Pure competition Monopolistic competition Oligopoly Pure Monopoly

In which of the following does the competitive market not provide a pricing constraint for the marketer

Pure monopoly

A fad product's life cycle curve has a different shape than most products; it typically has which two of the following?

Rapid sales at introduction Rapid decline

If a product line extension is very similar to the original product, it could ......... sales for the core brand

Reduce

A pricing objective of increasing sales can have the disadvantage of leading to price cuts that

Reduce the revenues of other products in the firm's line

When a consumer is comparing the costs and benefits of substitute items, he or she is developing a

Reference value

Match the following types of benefits provided by packing and labeling with the correct example Functional

Refrigerator compatible storage

Product _________ changes the place a product occupies in a consumer's mind relative to competitive products

Repositioning

Which of the following are ways to manage a product through its life cycle

Repositioning the product Modifying the market Modifying the product

Private brand are also known as ____ brands

Reseller

Product packaging offers a variety of benefits to which of the following:

Retailers Manufacturers Consumers

A firm with a sales objective will set prices at at level that generates more

Revenues

A shift in the demand curve is the result of a change in ____ conditions

Selling

Both mass communication and technological change can affect the product life cycle by

Shortening it

The three factors influencing the demand curve are consumer tastes, the consumer income, and the price and availability of

Similar products

As a consumer, being an innovator in a given product category can mean engaging in a number of behaviors. Which behavior would best illustrate an innovator

Sleeping outside best buy for the newest game console

Match the following types of warranties with the correct definition Limited coverage

States the bounds of coverage and noncoverage

Market share can be measured as the ratio of ___ compared to the total industry units sold

The firm's units sold

The newer the product and the earlier in its life cycle

The higher the price that can usually be charged

Price is defined as

The money or other considerations exchanged for the ownership or use of a product

To many consumers, price provides information about

The quality of the product

An international firm that contracts with suppliers overseas would be more likely to do so for which of these reasons

The suppliers might have efficiencies and lower hourly wages, reducing production prizes

Innovators on the diffusion of innovation curve are important to marketers because

They are the first to adopt a new product

Which of the following are reasons that a company may wish to reposition its products

To change the value offered To catch a rising trend To react to a competitor's position

The label is used to do which of the following:

To convey information to the consumer. To satisfy legal requirements

In a pure competition market the primary purpose for advertising is

To inform the buyer that a product is available

A break-even analysis chart shows the intersection of which two curves?

Total costs Total revenue

Profit is

Total revenue minus total costs

The unit variable cost is

Total variable cost divided by the quantity

Brand licensing is most common for

Toys

Brands are assets that can legally protected through

Trademarks

Innovators are the consumers who are the first to have a given product or service once it is released. What are the traits innovators would most likely have?

Trend starters (venturesome) Risk takers Highly knowledgeable (about the product/service) Early adopters are Leaders in social settings

Match the description with the method for managing a product through its life cycle Modifying the market

Trying to find new customers, increase a product's use among existing customers, or create new use situations

The pricing objective known as ____ volume is based on what? The quantity of product sold

Unit

What pricing objective can be counterproductive if it is achieved by drastic price cutting that drives down profit?

Unit volume

Match the following types of warranties with the correct definition Express

Written statement of liability

At the break-even point, profit is

Zero

If you sell picture frames for $120 each, and you have fixed costs of $32,000 and unit variable costs of $40, what is your break even point

400 pictures

Co Branding can benefits firms by allowing

A brand to enter a new product class, capitalizing on an existing well known brand in it

Movement along a demand curve implies no ____ have occurred in any demand factors except price

A change in price

Which of the following does not cause a shift in the demand curve

A change in price

The typical relationship between price and demand is shown as

A downward sloping demand curve

When a successful new product is introduced to the market, the lack of competition (including from your own company) removes

A price constraint

A company will resort to harvesting or deletion when

A product in the decline stage tends to consumer a disproportionate share of resources relative to their future worth

Branding can include which of the following?

A product name Packaging design Unique symbols, like a logo

While innovators are crucial to the success of a new product or service, this category of consumers is actually very small. Approximately what percentage of a total market does this category of consumers represent

About 2.5%

According to the price equation, to find the actual price, you should do which of the following to the list price?

Add extra fees Subtract incentives and allowances

The diffusion of innovation refers to the rate at which consumers _____ a given product or service

Adopt

Developing a positive brand awareness ad an association with a product class or need is the first step in

Building brand equity

Match the description with the method for managing a product through its life cycle Repositioning the product

Changing the place a product occupies in a consumer's mind relative to competitive products, sometimes by changing marketing mix elements to bolster sales

An example of a company connecting with customers in its package redesign strategy is

Creating a resealable package in response to consumer habits

During the _____ stage of the product life cycle, sales for the product drop so a company often minimize promotion

Decline

When a product goes into the ____ stage of the product life-cycle, the company may eventually remove it from the market

Decline

Consumer tastes and income are among the factors that determine their willingness and ability to pay for products and services. They are know as ___________ factors

Demand

Generally, the greater the ______ for a product, the higher the price that can be set

Demand

The chart shows how many units of a product or service consumers will demand during a specific period of time at different prices is known as the

Demand curve

Put the following steps for building brand equity in order, with the first step on top:

Develop positive brand awareness Establish a brand's meaning in consumer's minds. Elicit proper consumer responses. Create a consumer brand-connection

Product _____ pertains to variations within the product class, where each may have its own product life cycle curve

Form

Which two of the following are most effective in stimulating initial trial for new products

Free samples Warranties and guarantees

Storage and protection of the product are considered which kind of benefits added to packaging and labels:

Functional

Marketing attention in the maturity stage is often directed at holding market share through which two of the following?

Further product differentiation Finding new buyers

There are 5 gaps in perception

Gap between the firm and the customer Gap between management perceptions and service quality specifications Gap between service quality specifications and service delivery Gap between service quality specifications and external communications

Rapid increases in sales and the appearance of competitors occurs during the __________ stage of the product life cycle

Growth

A long introduction stage in the product life cycle is characteristic of a ____ learning product

High

When there are many substitute products available, the price elasticity of demand for a given product will likely be

Higher

The key element in the definition of pure competition is that the products offered by the different firms are perceived by the consumer to be

Identical

The diffusion of innovation curve shows the typical distribution of adoption for five different categories of consumers. Rank the order of consumers

Innovators Early adopters Early majority Late majority Laggards

The four I's in service

Intangibility Inconsistency Inseparability Inventory

The _____ stage of the product life cycle is characterized by initial losses to the firm due to its high start-up costs and low levels of sales revenue

Introduction

Out of control _______ compared to foreign car companies resulted in the US government investing billions of dollars in US car companies, trying to restructure them to make them competitive

Manufacturing costs

Select the two key characteristics of the maturity stage:

Marketing costs increase to gain new buyers Intense competition on price occurs

On a demand curve, one of the axes represents the price of a product while the other represents the

Maximum unit sold

In brand equity development, both the functional, performance-related dimension and the abstract, imagery-related dimension are used to help a consumer form a(n) ________________ for the brand in her mind.

Meaning

Product bundling is one approach that mat be used in a product _____ strategy to increase a product's value to customers. (one word)

Modification

The situation in which many firms compete for customers in a given market and the products are differentiated is known as

Monopolistic competition

When a firm uses distinct names for its products, it is called a:

Multi-branding strategy

Movement along a demand curve implies

No changes have occurred in any demand factors except price

Match the following types of warranties with the correct definition Full

No limits of noncoverage

Match the following types of benefits provided by packing and labeling with the correct example Communication

Nutritional and dietary information

Marketing managers may identify profit, market share, social responsibility or even survival as pricing

Objectives

Pricing ______ frequently reflect corporate goals, while pricing _____ often relate to conditions existing in the marketplace

Objectives Constraints

In a pure competition market, advertising

Only serves to inform buyers that the product is available

Match the following market modification methods with correct examples Creating a new use situation:

Originally intended as a single pant for every activity, Dockers now promotes different looks for different occasions: work, weekend, dress, and golf

A demand curve enables a firm to examine prices... In terms of quantity sold Break even analysis can help evaluate the impact in changes in ______ and _____ on _____

Price Cost Profit

Total revenue= unit ____ x quantity ____

Price Sold

If loyalty toward a particular brand makes other brands seem less substitutable , it decreases

Price elasticity of demand

Pricing decisions are difficult because

Price simultaneously affects total revenue and total cost

A firm must know its competitors' _______ in order to best set its own

Prices

Stimulating _____ demand, which is demand for the product class rather than a specific brand, is frequently the objective of promotions at the introductory stage of the product life cycle. (one word)

Primary

7 P's of services Marketing

Product Price Place Promotion People Physical environment Process

Which two of the following are factors that cause price inelasticity?

Products are considered necessities Few available substitutes

Price transparency has encouraged what type of change in the marketplace

Proliferation of low cost providers

During the introduction stage, pricing a product high is known as _____ and pricing it low is known as _____

Skimming Penetration

Some firms use ______ for each of their products, in addition to the family brand, to distinguish different parts of the product lines

Sub-brands

Which of the following may mean that the amount paid is not the same as the list price?

Surcharges Discounts Rebates

When a company sets a profit goal of 20 percent for pretax ROI, it is using which type of pricing objective?

Target return

Match the following market modification methods with correct examples Increasing a product's use:

The Florida Orange Growers Association advocates drinking orange juice throughout the day rather than for breakfast only

A product line extension benefits from

The brand equity of the multiproduct brand

In an industry that has an oligopoly price wars are likely to benefit only only

The consumer

The ratio of perceived benefits to price is a product's _______________

Value

Creating marketers engage in ______________ when they increase product benefits without changing the price

Value-pricing

_________________ cost is the sum of the expenses of the firm that vary directly with the quantity of a product that is produced and sold

Variable

By increasing ____________ and holding all other variables constant, profit will decrease

Variable cost

Total cost is the sum of which of these?

Variable cost Fixed cost

A ___ is a statement indicating the liability of the manufacturer for product deficiencies

Warranty

Which of the following are essential to consider when setting a price?

What will provide a profit to the company? What will pay for all associated costs, including marketing? What are customers willing to pay?