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Exam 12: Creating and Pricing Products That Satisfy Customers

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Question 31

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Ginger bought a new bread machine.Inside the packaging she found a paper stating, "All our products will be replaced within the first year if they fail to operate correctly.However, consumer misuse or abuse will effectively end this policy." This is a(n)

A) label.
B) set of instructions for use.
C) statement of guarantee.
D) implied warranty.
E) express warranty.

F) None of the above
G) A) and D)

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Question 32

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The product life cycle stage in which there is a rapid sales increase, other firms have begun to market competing products, and lower unit costs and an overall tendency toward increased profit prevail, is the _____ stage.

A) growth
B) extension
C) introduction
D) decline
E) maturity

F) B) and C)
G) All of the above

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Question 33

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All of the following except which are stages in the evolution of new products?

A variation of an existing product, such as freeze-dried coffee, is an example of product imitation.

Identify and discuss the three major ways that a product mix can be improved.

A discount from the list, or price offered to intermediaries is a(n) ____ discount.

Iron ore in a steel plant is an example of _____.

An early-bird special offered by a restaurant during off-peak hours is an example of a secondary-market pricing strategy.

The Morton's Salt Girl, the Pillsbury Dough Boy, and Planters' Mr.Peanut are all examples of _____.

Your Way, Inc. Eric buys companies that are small or companies in financial trouble.He helps these companies turn around and develop a competitive advantage.The company that he recently purchased is called Your Way, Inc.The company sells men's clothing and accessories.Your Way keeps the sewing machines for clothes manufacturing at a separate production facility so that the store location space can be reserved for display and selling. After looking over the different products available, Eric realized that the company's previous owner was not aware of the product life cycle because the company kept items that were obviously too old and out of date.Also, because of the high turnover, employees did not have good knowledge of the different product lines and did not know the difference between a product line and a product mix.To move the company forward, Eric thought of the following two measures: first, developing a new product to incorporate into the product mix; and second, eliminating the out-of-date products. -Refer to Your Way, Inc.Which of the following descriptions should Eric use to best explain the difference between the product line and product mix?

Odd-number pricing is limited to low-priced items.

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. -Refer to Click It, Inc.The multiple-unit pricing strategy suggested by Travis is a ____ strategy.

Borden, Inc.wants to develop a new line of great tasting, low-calorie, low-fat, and low-cholesterol processed cheese products.The managers are studying whether demand is strong enough and whether the new line will yield a favorable return on investment.The managers are currently in which phase of new product development?

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. -Refer to Click It, Inc.When Click It displays information on a product or its package, this refers to _____.

Because markup pricing is difficult to use, few retailers and wholesalers use it.

As the product idea committee of Foster Manufacturing Company went through its list of possible new products, it rejected various ideas for one or more reasons.Which of the following is least likely to be a reason for rejection?

One of the major dangers of competition-based pricing is that it often results in price wars.

Would Coca-Cola be a generic brand? Why or why not? How would you expect the package and label of a generic product to look?

The marketing challenge of making potential customers aware of the product's existence and its features, benefits, and uses is prevalent in which of the product life cycle stages?

Multiple packaging does not work well for