Question 1

What happens when companies extend their horizons and identify opportunities outside existing product lines?

Accepted Answer

A)   Disconnected product lines
B)   Multiple product lines
C)   Uniform product lines
D)   Universal product lines
E)   Tailored product lines

Question 2

Which of the following costs refers specifically to those that are unaffected by the quantity of a product sold or produced?

Accepted Answer

A)   Annual costs
B)   Variable costs
C)   Fixed costs
D)   Marginal costs
E)   Market-adjusted costs

Question 3

Variable costs of a product are those costs that change with the quantity of a product produced and sold.

Accepted Answer

A) True 
 B)False

Question 4

Packaging can serve as an in-store advertisement that makes the product attractive, displays the brand name, and identifies features and benefits.

Accepted Answer

A) True 
 B)False

Question 5

The breakeven point is the price at which a company earns the maximum profits.

Accepted Answer

A) True 
 B)False

Question 6

Sears' Craftsman Tools is an example of a private brand.

Accepted Answer

A) True 
 B)False

Question 7

If a company offers several products that are similar in nature, how could the company increase sales while saving the consumer money?

Accepted Answer

A)   Use a bundling strategy
B)   Incorporate dynamic pricing
C)   Sell at a reverse auction
D)   Use a penetration pricing strategy
E)   Incorporate a price skimming option

Question 8

Which defining word or phrase below BEST captures the meaning of capital items?

Accepted Answer

A)   Bulk loads
B)   Directly used in the production process
C)   To the consumer within a year
D)   Longer lasting
E)   Governmental purchase

Question 9

Which of the following BEST describes product features?

Accepted Answer

A)   All attributes and features of the product taken together
B)   Tangible and intangible quality built into the product
C)   Intangible benefits that increase customer satisfaction
D)   Speed and convenience of a buyer interaction
E)   Benefits that are used directly in the conversion of a process

Question 10

For many companies, speed to market with a product is as important as care in developing it.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following strategies is involved with penetration pricing?

Accepted Answer

A)   Setting an initial low price to establish a new product in the market
B)   Setting an initial low price to cover new product costs and still generate a profit
C)   Setting a limited number of prices for certain categories or products
D)   Setting an initial high price to establish a new product in the market
E)   Setting an initial high price to cover new product costs and still generate a profit

Question 12

A company that buys products to use to produce or create other goods or services is a(n)

Accepted Answer

A)   convenience buyer.
B)   consumer.
C)   industrial buyer.
D)   capital buyer.
E)   rebrander.

Question 13

Shopping goods are purchased more often than convenience goods.

Accepted Answer

A) True 
 B)False

Question 14

What is the amount added by a retailer to an item's purchase cost needed to make a profit?

Accepted Answer

A)   Gross
B)   Variable cost
C)   Breakeven
D)   Mark-up
E)   Fixed cost

Question 15

Which of the following pricing strategies BEST describes price lining?

Accepted Answer

A)   Setting an initial low price to establish a new product in the market
B)   Setting an initial high price to cover new product costs and generate a profit
C)   Setting individually negotiated prices for certain categories of products
D)   Setting a limited number of prices for certain categories of products
E)   Setting individually negotiated prices for all categories of products

Question 16

Differentiate between fixed costs and variable costs.

Accepted Answer

Fixed costs remain constant with varying...

Question 17

Why would a company use a bundling strategy when selling goods or services?

Accepted Answer

A)   To decrease packaging costs
B)   To increase the sale of bundled items
C)   To introduce a new product to the market
D)   To offer all products at a limited range of prices
E)   To take advantage of psychological pricing

Question 18

Which of the following scenarios would allow a firm to price below prevailing market price and still succeed?

Accepted Answer

A)   The public does not learn that the firm's product is indeed inferior.
B)   The firm can offer a product of acceptable quality.
C)   The firm can offer an entirely new product.
D)   The firm can effectively copy competitors' promotional tactics and marketing strategies.
E)   The firm can effectively criticize its competitors' products and quality.

Question 19

In the screening stage of product development, companies use market research to get consumers input about benefits and prices.

Accepted Answer

A) True 
 B)False

Question 20

How can a firm increase the life of a product without involving product changes?

Accepted Answer

A)   Product extension
B)   Product adaption
C)   Rebranding
D)   New product placement
E)   Reintroduction

Exam 12: Developing and Pricing Products

Why would a company use a bundling strategy when selling goods or services?

Correct AnswerverifiedShow Answer

How can a firm increase the life of a product without involving product changes?

Correct AnswerverifiedShow Answer

Which of the following strategies is involved with penetration pricing?

Correct AnswerverifiedShow Answer

What is the amount added by a retailer to an item's purchase cost needed to make a profit?

Correct AnswerverifiedShow Answer

Which of the following costs refers specifically to those that are unaffected by the quantity of a product sold or produced?

Correct AnswerverifiedShow Answer

Shopping goods are purchased more often than convenience goods.

Correct AnswerverifiedShow Answer

Which of the following scenarios would allow a firm to price below prevailing market price and still succeed?

Correct AnswerverifiedShow Answer

Variable costs of a product are those costs that change with the quantity of a product produced and sold.

Correct AnswerverifiedShow Answer

What happens when companies extend their horizons and identify opportunities outside existing product lines?

Correct AnswerverifiedShow Answer

The breakeven point is the price at which a company earns the maximum profits.

Correct AnswerverifiedShow Answer

If a company offers several products that are similar in nature, how could the company increase sales while saving the consumer money?

Correct AnswerverifiedShow Answer

In the screening stage of product development, companies use market research to get consumers input about benefits and prices.

Correct AnswerverifiedShow Answer

Sears' Craftsman Tools is an example of a private brand.

Correct AnswerverifiedShow Answer

Which defining word or phrase below BEST captures the meaning of capital items?

Correct AnswerverifiedShow Answer

Packaging can serve as an in-store advertisement that makes the product attractive, displays the brand name, and identifies features and benefits.

Correct AnswerverifiedShow Answer

Which of the following pricing strategies BEST describes price lining?

Correct AnswerverifiedShow Answer

Which of the following BEST describes product features?

Correct AnswerverifiedShow Answer

A company that buys products to use to produce or create other goods or services is a(n)

Correct AnswerverifiedShow Answer

For many companies, speed to market with a product is as important as care in developing it.

Correct AnswerverifiedShow Answer

Differentiate between fixed costs and variable costs.

Correct AnswerverifiedFixed costs remain constant with varying...View AnswerShow Answer

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Fixed costs remain constant with varying...
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