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Exam 14: Developing and Pricing Goods and Services

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Question 61

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Explanation: Nonprice competition is often used because prices are easy to match. Few competitors can match the image of a friendly, responsive, consumer-oriented company. Difficulty: 2 Medium Topic: Pricing Objectives and Strategies Learning Objective: 14-07 Identify various pricing objectives and strategies. Bloom's: Understand AACSB: Reflective Thinking Accessibility: Keyboard Navigation -Which of the following statements about nonprice competition is most accurate?

A) While still important, nonprice competition is becoming less critical as a result of the Internet.
B) Marketers often rely on nonprice differences in their competitive strategy to enhance a relatively homogeneous product.
C) Nonprice competition is much more important to large firms than it is to small firms.
D) As microeconomic theory suggests, firms have found that nonprice competition plays a secondary role that supplements the more important competition based on price.

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

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Question 62

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Newport Industries is one of the first producers of a unique consumer product. The company has chosen a low-price strategy, hoping this will enable them to quickly attract many customers while discouraging potential competitors from entering the market. Newport's approach to pricing is a classic example of the skimming strategy.

A) True
B) False

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Question 63

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Department stores often use ________ pricing in which they have regular prices which are relatively high, but offer special sales where prices are set lower than competitors.

A brand that has been given exclusive legal protection, such as the McDonald's golden arches, is a

Bennett has entered into a contract with the federal government to design a computer simulation model for training helicopter pilots. The contract calls for the final price to be set at a fixed percentage profit over and above her cost of production. This seems to represent a

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

From a marketing management perspective, what is the meaning of a total product offer? What are the important elements in the total product offer of your college or university?

The apple is Apple Computer's

A long-run pricing objective of almost all firms is to optimize profit.

The job performed by brand managers

The target costing strategy establishes a selling price that consumers are willing to pay for a product, and then subtracts a desired profit margin to determine a target cost of production.

Folgers's ________ allows customers to easily identify this product from other coffee products.

NiceIce Meals designed a new type of packaging that significantly improves taste and texture of food when defrosted. Unfortunately, firms seldom find that improvements in packaging impact market share and profits.

Sears sells batteries under its own Diehard brand name even though another company actually produces these batteries. This is an example of a

One function of effective packaging is to provide information regarding warranties, benefits, and uses of the good inside the package.

Competition-based pricing is a strategy based on what all the other competitors are doing.

Department store owner Brendan McGowan decided to make a gutsy move with his high-end Western Son 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?

Diego's company was bidding on the construction of a new penguin display at a zoo. When putting together his bid, Diego began by determining what the zoo would be willing to pay for the structure, and then subtracting a reasonable profit for the company. The result would be the cost of production. For example: If price to zoo = $8 million, and company profit margin = $3 million, the cost to produce cannot exceed $5 million. [$8 million - $3 million = $5 million.] The demand-based pricing strategy in this example is called

The product life cycle consists of ________ stages.

Which of the following is considered a stage of the new-product development process?