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Exam 14: Developing and Pricing Goods and Services

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Question 81

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In the long run the market determines what the price will be.

A) True
B) False

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Question 82

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Sweet Dream Confectioners uses the same ingredients as most other producers of chocolate candies.In fact,taste tests suggest that the candy itself,while quite good,isn't much better than other well-known brands of chocolate.However,the company wraps its candies in expensive looking foil and places them in very attractive boxes.It promotes its products in advertisements as "the ultimate in chocolate experience." Sweet Dream charges a much higher price than most competitors,but sales continue to grow.This success indicates that:

A) consumers always behave in an irrational manner.
B) there is more to the total product offer than the physical product.
C) consumers seldom consider price when making a buying decision for goods such as chocolate.
D) chocolate is best classified as a convenience gooD.When making purchasing decisions,consumers look at a variety of factors,collectively known as a total product offer.The package,price,and the image created by the firm's advertising are all part of this package.

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

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Question 83

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

According to the product life cycle model,sales are expected to peak in the _________ stage.

The classification of goods or services into a particular class depends on the individual consumer.

In marketing today,packaging carries the added responsibility of:

Interactive Web sites are useful in the commercialization process for new products.

__________ goods and services represent those products that consumers are unaware of or haven't thought of buying.

A single product line may contain several competing brands.

Today,packaging is:

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

Miller Light Beer,Maxwell House Coffee,Jell-O brand gelatin,Kraft Mayonnaise,and Marlboro Cigarettes,were all at one time products of the Philip Morris Company.These products represented a part of the product line Philip Morris offered.

The reputation of the manufacturer and the retail store surroundings are considered part of the value enhancers of a total product offer.

Product testing is designed to reduce the number of new product ideas that a firm works on at any one time.

As the Internet grows in popularity,it is likely that more firms will adopt a high-low pricing strategy.

As a product progresses through each stage of the product life cycle,successful marketers recognize that each stage requires:

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 is 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.

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

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.

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