Review Questions
In developing a new shoe, Reebok target the youth market. It used ____________ segmentation to define its target market.
Demographic
Jimmy Dean works for a consumer goods company that producers breakfast sandwiches. He know that the bread costs .50, eggs cost .25, cheese costs .05 and bacon costs . 20. He wants to add a standard markup of 50% to the cost for the price of the product which would be $2. What type of pricing is this?
Cost-plus
Facebook uses data to notify you of local events. Therefore, your news feed is different than your cousin that lives in Ohio. Facebook is using ____________ segmentation variables.
Geographic
Tina Temperpedic is VP of marketing for Orange ( an innovative tech company that makes computers, mp3 players and cell phones), they launched a cell phone that has a 3-d keyboard about 6 months ago. As of 2 weeks ago, sales have grown very fast and profits are increasing, but they have not reached peak sales performance. What stage in the product life cycle is the product in?
Growth
During the Growth stage of the Product Life Cycle when sales and profits are rising, markets looking to maximize market share should adopt a _______________ pricing strategy.
Market Penetration
Doors, Inc. is a technology company that focuses on creating operating system software -- the software that runs everything on a computer. The company is releasing the newest version of its operating system and is deciding on the appropriate pricing strategy. The CEO favors an aggressive, market penetration strategy in order to gain market share, even if it means pricing the software at a level at which the company would make almost no profit on every sale. Several senior managers of Doors, Inc., are strongly in favor of a market-penetration pricing strategy. Which of the following, if true, would MOST STRENGTHEN their argument.
Market research reveals that the market is not price sensitive. So, the demand for operating systems is inelastic.
Pepsi wants to create a new campaign to appeal to a different audience but can't decide exactly who their target audience will be. They begin by dividing the market into smaller groups of buyers with distinct needs, characteristics and behaviors. This is an example of...
Market segmentation
Vespa is coming out with a new scooter that can last 800 miles on 1 gallon of gas, but which is priced 40% higher than any other scooter on the market. What type of pricing is this?
Market-skimming
GEICO uses driver information such as age, gender, location and driving record before pricing and issuing auto insurance. By extracting this information GEICO determines patterns and predicts which drivers are most dependable. GEICO is using:
Marketing Metrics
GE is the world's leading manufacturer of diesel-electric locomotives with more than 15,000 locomotives currently operating around the globe. Given what you know about the macroenvironment and product life cycles, at what stage of the PLC (product life cycle) is this GE product?
Maturity
When Glow Gift Card Shop offers a price reduction to customers who buy Christmas cards the week after Christmas, it is giving a(n) ______________ discount.
Seasonal
What is an example of a shopping product?
Television
XYZ Company has decided to ignore market segment differences and target the entire market with one offering that will appeal to the largest number of buyers. XYZ Company has chosen a ______________ marketing strategy.
Undifferentiated and Mass-Marketing
Loyalty programs such as Saxbys Rewards and TJ Maxx Rewards are examples of segmentation by ______________.
Usage rate
Starbucks wants to segment the market by ____________. After research they found that 10% of consumers buy coffee from Starbucks everyday, making them heavy product users. After segmentation, loyal customers will receive a better discount than the consumers that come in once every three months.
Usage rate
Evelyn decides to price her product above average so she can recover much of her development costs and some of her other costs. Evelyn is using a _______________ new-product pricing strategy.
skimming price
Cheryl is going on a date tonight. She realized she was out of toothpaste so she runs out to CVS. She grabs a tube of Crest off the shelf without any thought. For Cheryl, Crest toothpaste is a _______.
convenience product
George Hopkins has compiled a list of questions to ask about what makes a target market segment attractive to his company. Which of the following questions does NOT belong on George's list?
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Which of the following is true of the pricing component in the marketing mix?
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What is a strong example of a convenience product?
A gallon of milk
Doors, Inc. is a technology company that focuses on creating operating system software -- the software that runs everything on a computer. The company is releasing the newest version of its operating system and is deciding on the appropriate pricing strategy. The CEO favors an aggressive, market penetration strategy in order to gain market share, even if it means pricing the software at a level at which the company would make almost no profit on every sale. Which of the following MOST SUPPORTS his position?
Potential customers consider the technology behind the new operating system to be far ahead of existing products
Evelyn's ____________ is the practical use of solar power in a vacuum cleaner that is designed to effortlessly sweep the floors of on-the-go and elderly consumers.
Product concept
When the brand Ralph Lauren, known for their clothing, began making lines of towels, sheets, and other home accessories, that was ________.
brand extension
Gillette sells their initial razors very inexpensively, but the replacement blades for that razor are extremely expensive. The price for this unit is ______.
captive-product pricing
Given that her product is new and has a specific target market, Evelyn is MOST likely to use a ______________ market targeting strategy for her vacuum cleaner.
concentrated (niche)
Oshkosh Trucks, Inc., specializes in building heavy-duty fire, airport-rescue, cement, and garbage trucks. Instead of pursuing a small share of a large market, the firm goes after a large share of a few, relatively small segments. Oshkosh uses a __________ market-coverage strategy
concentrated (or niche)
Port Orleans Shipping markets different services to the tourism, defense, and trade segments. The firm designs separate offers for each segment based on their needs. This approach is called ________ marketing.
differentiated
Among the potential problems with cost-plus pricing is that it ______?
disregards the buyers' perceptions of value AND ignores competitors' prices
Evelyn's vacuum is in which phase of New Product Development?
product concept development and screening
Bob and Phyllis Cords own two retail stores, one in Pottstown and one in Norristown. Though the towns are only 40 miles apart, the consumers at both stores are very different demographically. Bob and Phyllis alter the product offerings between both locations in an effort to cater to both demographic groups. This is an example of ________.
psychographic segmentation
Evelyn set up a multiple-city test market, with a demonstration booth in a Chicago mall and in an appliance store in New Jersey. "It's such a novel idea," Evelyn added. "People will notice it, even if they don't buy it right away." Evelyn was doing which of the following?
test marketing
Due to little product awareness or knowledge, _____________ products require aggressive advertising and personal selling by producers and resellers.
unsought
The major purpose of test marketing is to provide management with the information needed to make a final decision about ________.
whether to launch the new product
