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Federal legislation requires that the brand name of a product clearly identify the manufacturer of that product.

A) True
B) False

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Unsought goods and services are purchased on impulse and provide no added value to consumers.

A) True
B) False

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Price, store surroundings, service, and brand name are all elements that consumers evaluate in a total product offer.

A) True
B) False

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Target costing adds a profit margin to estimated cost of production to determine the optimal price.

A) True
B) False

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As firms develop their marketing mix, it is important to remember that


A) prices must be linked directly to the cost of production.
B) instincts and past history are the best guides in determining price.
C) regardless of the strategy used, prices ultimately reflect the forces of supply and demand.
D) firms are often restricted in creating pricing strategies by relevant government rules and guidelines.

E) None of the above
F) All of the above

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Charging high prices to earn large profits during a time when there is little competition represents a ________ strategy.


A) penetration
B) bundling
C) skimming
D) cost-based

E) A) and B)
F) None of the above

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The box, Playing the Name Game explains


A) the importance of reality TV, and the various TV programs that have become international phenomena.
B) the procedure a business goes through to register its domain name.
C) how the positive appeal of a name can go a long way.
D) how it is important for businesses to play a name game with their customers. A company should produce a product and give it a different name in each country where it is sold.

E) C) and D)
F) All of the above

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________ uses price points to establish prices that help create the impression that the product is less expensive than it is.


A) High-low pricing
B) Everyday low pricing (EDLP)
C) Bundling
D) Psychological pricing

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

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For small businesses, product differentiation


A) is more difficult than it is for larger firms because of the high cost of product research and development.
B) usually concentrates on the pricing component of the total product offer.
C) can be an important strategy to gain market share.
D) is less important than it is for big firms with multiple product lines.

E) All of the above
F) B) and C)

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

A) True
B) False

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Creative product differentiation can enable a small business to increase market share.

A) True
B) False

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As a graphic artist, Randy has just finished a new calendar. The calendar cost him $1.00 for the glossy paper, $3.00 for the six color production, and $.50 for the plastic wire that holds it together at the top. The labor in developing the design was 4 hours of work at $50/hour, and labor is being added to the rest of the fixed costs of $500.00. At a price of $15.00 per calendar, how many calendars will Nate need to produce and sell in order to break even (cover all his costs, but not make a profit) ?


A) 670 calendars
B) 34 calendars
C) 46 calendars
D) 67 calendars

E) B) and C)
F) All of the above

Correct Answer

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Epic Electronics is considering a strategy to charge a very high introductory price for their automobile video theater. After identifying that their rival firms did not carry this new product, they chose this pricing strategy to achieve maximum profits. Epic Electronics has chosen a ________ strategy.


A) high-low pricing
B) penetration
C) bundling
D) skimming

E) None of the above
F) A) and B)

Correct Answer

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While the product life cycle is a good theory, it's not important for marketers to recognize what life cycle stage a product is in.

A) True
B) False

Correct Answer

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The strategy of charging prices based on consumer demand rather than cost or a predetermined profit margin represents


A) competition-based pricing.
B) cost-based pricing.
C) target orientation.
D) demand-oriented pricing.

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

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Eric is approached by a street vendor selling Rolex watches at ridiculously low prices. Eric, however, was suspicious that the watches were illegal ________ brands.


A) knockoff
B) private
C) generic
D) look alike

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

Correct Answer

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A knockoff brand is a brand name that has lost its exclusive legal protection.

A) True
B) False

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Break-even analysis determines profitability of a firm at various levels of sales.

A) True
B) False

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

A) True
B) False

Correct Answer

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Whether a consumer thinks a product provides the best value depends upon


A) the actual product benefits.
B) the consumer's perceptions.
C) the global situation.
D) the laws covering the product's manufacture.

E) C) and D)
F) None of the above

Correct Answer

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