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Exam 14: Developing and Pricing Goods and Services

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Question 1

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A firm's product line refers to all of the different geographic markets in which it sells the same good or service.

A) True
B) False

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Question 2

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While some products remain in the introductory stage of the product life cycle for years, other products may go through the entire cycle in a few months.

A) True
B) False

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Question 3

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Successful firms maintain consistency in their marketing mix strategies throughout the product life cycle.

Unsought goods and services fail to provide the benefits consumers expect.

Borden, Inc., makes pasta, dairy items, and adhesives. These different types of products are referred to as Borden's:

Consumers are best served by providing specialty goods in convenient locations.

Which of the following refers to how quickly or easily a given brand name comes to mind when a product category is mentioned?

Mini-Case Gourmet Pets is an innovative competitor in the billion-dollar pet food industry. In fact, two of its products, Kitty Sirloin and McDog T-bone, each claim over a 30% share in their market segments. The company has done detailed research and discovered that, for a growing number of pet owners, the family pet serves as a baby substitute. These owners tend to pamper their pets, and are very discriminating in what they purchase. With this in mind, the company has put a great deal of effort into developing a new dog food: Prime Cuts. The new product is packaged in a resealable, microwaveable container and can be purchased in a variety of flavors (including Western BBQ, Teriyaki, Australian Outback, and Hickory Smoked) . Gourmet Pets promotes the product as far superior to "average" dog foods, even though the quality of meat and nutrient content of the food are virtually identical to many other brands. The company faces no competition in this market segment so it plans to charge a high price for the product. -Gourmet Pets feels its target market is more concerned with perceived quality than actual product cost. They also feel that the newness of this concept offers an opportunity to make high profits since they are the first firm to enter this market, so they face no direct competition. Their decision to charge a high price is consistent with the ________ strategy.

Most consumers view specialty goods as having a variety of acceptable substitutes.

Price, appearance, and reputation can influence a consumer's perceptions of quality.

Changes in packaging can transform the product in the minds of consumers and open larger market opportunities.

A single product line may contain several competing brands.

Sometimes a firm will lower prices below their costs in order to build a customer base.

As a brand manager at a firm, Ellen has proposed an aggressive advertising campaign that exaggerates the benefits of their newest product. While Ellen is convinced that this strategy will encourage consumers to try the product, her assistant strongly opposes the idea. Which of the following presents the best explanation for the assistant's opposition to Ellen's proposal?

The product analysis stage of the new-product development process considers the sales forecasts and cost estimates of a new-product idea.

Equipment maintenance and repair of equipment used by businesses is an industrial support good.

Carlotta owns and manages the Carlite Car Wash. She charges $8 per car wash. Her fixed costs are $600 per month, while her variable costs per car wash amount to $2. Carlotta must wash 60 cars to break even.

Phil asks you to calculate the break-even point for his firm. You respond that you will need the following information:

With a looming recession in front of him, department store owner Cooper Collins decided to make a gutsy move with his high-end Eastpointe stores. Rather than focus on the upscale, luxury market that the store attracted earlier in the decade, he focused on bringing in clothing with more mass appeal. The stores succeeded in turning around downward trending sales. In conjunction with your understanding of the product life cycle, which of the following statements summarizes the marketing strategy?

The product life cycle model helps marketers realize that: