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Exam 14: Developing and Pricing Goods and Services

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Question 101

Multiple Choice

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A skimming pricing strategy

A) allows low-income households the ability to purchase a particular good or service.
B) drives competitors out of business in order to achieve a monopoly position in the market.
C) creates a "common man" image to reach a larger market.
D) establishes a high price in order to earn the highest possible profit while there is little competition.

E) B) and D)
F) A) and B)

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Question 102

Multiple Choice

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________ involves designing a product so that it satisfies customers and meets the profit margins desired by the firm.

A) Price discrimination
B) Price leadership
C) Target costing
D) Cost-based pricing

E) B) and D)
F) B) and C)

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Question 103

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New-product commercialization includes promoting the product to distributors and retailers as well as developing strong advertising and sales campaigns.

In evaluating colleges, students and parents are likely to judge a school

Which of the following is a benefit of a brand name for a seller?

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

When consumers decide to purchase a particular product, they

The trend toward self-service retailers has increased the importance of packaging.

Successful product differentiation

According to the Reaching Beyond Our Borders box, brand names must hold great meaning or customers will not acknowledge them.

A single product line may contain several competing brands.

Specialty goods are often marketed through specialty magazines.

Some goods have a product life cycle that is completed in a shorter amount of time than other goods.

Isla is a marketing manager for Marshall Manufacturing. Her boss has asked her to evaluate a new-product idea. One of the things Isla wants to determine is how much of this product her firm would have to sell in order to break even. In order to compute this break-even level of sales, she will need to know the price of the good, the total fixed costs, and variable cost of producing each unit.

A competition-based pricing strategy called ________ involves one or more dominant firms establishing the pricing practices that all competitors in an industry follow.

The marketing efforts for convenience and specialty goods are essentially the same.

Sales levels of Spokes mountain bikes are rising rapidly, profits are very high, and a growing number of competitors are taking aim at Spokes' market lead. Based on this information, Spokes mountain bikes are in which stage of the product life cycle?

Psychological pricing utilizes high prices to create the image of a high-quality product.

Sandy works for Epic Electronics and oversees the marketing mix for the firm's line of HDTVs. Sandy serves as a brand manager for Epic Electronics.

Microchippers Computer Company thinks it will make a splash with galaxy-themed laptop cover designs scheduled for release next year. The computers do not reveal any other feature differences from what Microchippers currently offers. This effort is an example of using ________ to differentiate a product as new.