Chapter 14 Quiz

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Question #1

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

A introduction

B growth

C maturity

D commercialization

Question #2

Which of the following is a popular pricing objective?

A fixing prices among competitors

B increasing brand awareness

C increasing sales

D achieving less market share

Question #3

Rosalita’s and Antonio’s are Mexican restaurant chains. Each restaurant offers similar items on their menus. However, Antonio’s restaurants are positioned in the market as elegant establishments with high prices. Rosalita’s, on the other hand, are located in middle-class neighborhoods, with a casual atmosphere that welcomes families with young children. The prices at Rosalita’s are in the moderate range. When evaluating the marketing strategies used by these restaurants, we can conclude that

A both practice product mix effectiveness.

B Fernando’s has chosen a shopping good strategy.

C they utilize product differentiation.

D their target markets differ, with one intended to appeal to the industrial market, and the other designed to attract the consumer market.

Question #4

Brody asks you to calculate the break-even point for his firm. You respond that you will need the following information

A forecasted sales volume, operating expenses, and asset values.

B the values for all assets and liabilities.

C total fixed costs, selling price per unit, and variable costs per unit.

D sales revenue and total liabilities.

Question #5

At the break-even point

A total revenue is equal to total cost.

B variable costs are equal to total fixed costs.

C target profit is achieved.

D profits are maximized.

Question #6

Producers often use ________ as a primary basis for setting prices on the goods and services they offer the public.

A quotas

B tariffs

C costs

D market share

Question #7

________ involves designing a product so that it satisfies customers and meets the profit margins desired by the firm.

A Price discrimination

B Cost-based pricing

C Price leadership

D Target costing

Question #8

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 are 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 is interested in computing the break-even point for its new product Prime Cuts. The fixed costs of adding this product to the product line amounts to $20,000. Variable costs to produce one package of Prime Cuts are $2. Prime Cuts will sell for $6 per package. The break-even point would be

A 2,800 units.

B 900 units.

C There is not enough information to find the correct answer.

D 5,000 units.

Question #9

Marshall Manufacturing acquired several pieces of expensive heavy machinery it intends to use in its operations. As an industrial good, this heavy machinery represents

A an intermediate good.

B a shopping good.

C an installation.

D accessory equipment.

Question #10

The degree to which customers are satisfied and are committed to future purchases of a desired brand is called

A brand intensity.

B brand awareness.

C brand loyalty.

D brand relations.

Question #11

The box, Playing the Name Game explains

A the procedure a business goes through to register its domain name.

B how the positive appeal of a name can go a long way.

C the importance of reality TV, and the various TV programs that have become international phenomena.

D how it is important for businesses to play a name game with their customers. A company should produce a product and give it a different name in each country where it is sold.

Question #12

Which of the following is a relevant criterion for the product screening process?

A production capacity of competitors

B sales forecasts for the product

C profit potential

D the stage of the product life cycle

Question #13

An advertisement for the Xerox Corporation encourages customers to say, “Copy it” rather than “Xerox it.” This indicates that Xerox is fearful that its brand name might become a(n)

A generic name.

B public domain good.

C private brand.

D equity name.