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Exam 12: Creating and Pricing Products That Satisfy Customers

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Question 41

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A new product should be left in a test market long enough to

A) stimulate normal quarterly sales.
B) sell every prototype produced.
C) give buyers a chance to repurchase the product if they are so inclined.
D) establish brand loyalty.
E) reveal any major design "bugs."

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Question 42

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A manager at JCPenney discovers that Dillard's has reduced the price of its children's Levi's from $31.99 to $24.99, according to an advertisement in the Sunday newspaper.She immediately phones her store and instructs the salesperson on duty to put a sign up next to their children's Levi's that reads, "SALE: $24.99." This is an example of what pricing strategy?

A) secondary-market pricing
B) periodic discounting
C) reference pricing
D) random discounting
E) comparison discounting

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Question 43

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The strategy of setting prices at uneven amounts that are slightly below whole-dollar amount is called _____.

Click It, Inc. Travis is a salesperson for Click It, Inc.Click It does not sell products with its own brand name.Instead, its products are created for different retail stores and carry the store brand.Travis thought that several changes needed to be made to a particular product, but Click It management reminded him that the stores, not Click It, owned the brand. However, because Click It had been concerned about dropping sales, management listened to Travis's concerns about the company's pricing.He suggested using a different pricing strategy.More specifically, he felt that the company should incorporate a multiple-unit pricing strategy because it would then allow Click It to set a single price for multiple units.This had the potential of increasing sales and therefore profits, so management agreed to consider Travis's suggestion. -For a product such as staples, which of the following determines whether it is a consumer product or a business product?

Click It, Inc. Travis is a salesperson for Click It, Inc.Click It does not sell products with its own brand name.Instead, its products are created for different retail stores and carry the store brand.Travis thought that several changes needed to be made to a particular product, but Click It management reminded him that the stores, not Click It, owned the brand. However, because Click It had been concerned about dropping sales, management listened to Travis's concerns about the company's pricing.He suggested using a different pricing strategy.More specifically, he felt that the company should incorporate a multiple-unit pricing strategy because it would then allow Click It to set a single price for multiple units.This had the potential of increasing sales and therefore profits, so management agreed to consider Travis's suggestion. -Consumers would most likely treat candy bars as ____ products.

Which of the following constitutes an ROI?

A brand mark is the part of a brand that consists of a symbol or distinctive design.

Brands help reduce a consumer's perceived risk of purchase.

After several years of success with the product line, Procter & Gamble introduced its popular Sure deodorant in three new scents.This is an example of ____ modification.

A product may be a good or a service but not an idea.

The temporary reduction of prices on a patterned or systemic basis is called _____.

William Clark wants to know his breakeven point.His selling price is $20 per unit, his fixed costs are $6,000, and the variable costs per unit are $6.What is his breakeven quantity?

Random discounting is often predictable so consumers wait to make purchases until they can benefit from the price reductions.

The stage in the evolution of new products in which the product is launched into full-scale manufacturing and marketing is called _____.

New products are often immediate successes.

The redesign of a bicycle to improve its safety is an example of a(n) ____ modification.

When might a firm use a price-skimming strategy? When might it use penetration pricing? Describe each strategy.

TCBY wants to expand its line of food products.The company sent surveys to consumers to determine which food items would appeal to them for dessert or snacks.The company is in which phase of new product development?

If a manager designs the shoe department in a manner that one of its private label pairs of shoes, priced at $39.99, is positioned next to a well-known national brand of shoes priced at $69.99, what strategy is the manager attempting to accomplish?

Price competition occurs when a seller emphasizes the