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Exam 14: Developing and Pricing Goods and Services

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Question 1

Multiple Choice

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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 D)
F) None of the above

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Question 2

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Freddie's Market offers customers tissues, canned goods, napkins, and various detergents in basic packaging with no identified brand. These goods are popular with the more cost-conscious shoppers because they are significantly less expensive than nationally known brand names. These types of goods are examples of generic goods.

A) True
B) False

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Question 3

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Once an organization surveys the consumer's wants and needs, has designed a group of products to meet those needs, and begun to market them in stores, the organization is assured of success.

The trend away from personal salespeople to self-service in many retail outlets has caused firms to

Brand loyalty refers to the degree to which customers are satisfied with a brand and are committed to further purchases.

For small businesses, product differentiation

The formula for break-even analysis includes which of the following components?

A bank's product line may include safety deposit boxes, car loans, and checking accounts.

Which of the following is a characteristic of the decline stage of the product life cycle?

The legal protection offered to an established brand name prevents that name from being used as a generic name for a product.

The rent a firm pays each month for office space is an example of a(n)

The image created by advertising is part of the total product offer of a product.

Kayla wants to know how many units she must sell to cover all of her costs. She indicates to you that her selling price is $25 per unit, her fixed costs are $7,000, and the variable costs per unit are $15. What is her break-even point?

New products often fail because they don't deliver to consumers their promised benefits.

Which of the following refers to how quickly or easily a given brand name comes to mind when a product category is mentioned?

In the long run, the cost of production and the length of the firm's supply chain determine the price of a product.

Price leadership occurs when one or more dominant firms set pricing practices that other firms in the market follow.

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

Cutter's Catering Services advertises that they are the "friendliest caterers in town." Though their prices are no lower than the rates of competitors, they put a great deal of emphasis on getting to know the needs of their customers. They tailor their efforts to meet these needs, providing a unique dining experience that exactly matches the customer's expectations. Cutter's Catering is likely to find that this approach is more effective in achieving its goals than the use of aggressive price cutting.

The Pillsbury Doughboy is an example of a