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Exam 14: Developing and Pricing Goods and Services

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Question 91

True/False

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Webster Industries is one of the first producers of a unique consumer product.The company has chosen a low price strategy,hoping this will enable them to quickly attract many customers while discouraging potential competitors from entering the market.Webster's approach to pricing is a classic example of the skimming strategy.

A) True
B) False

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Question 92

Multiple Choice

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Kathy works as a manager at Fantastic Fabricators.The innovative staff at the company is regularly encouraged to suggest ideas for new products.Since Cathy works in product screening,she:

A) gives the final approval for the commercialization of new products.
B) reduces the number of new products being worked on at any one time.
C) market tests the product ideas that originate with the staff.
D) develops the concept testing to establish the personnel required for each new project.

E) B) and D)
F) None of the above

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Question 93

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A product line is a group of products that are physically similar or are intended for a similar market.

Admiral Motors is the dominant firm in the auto market.When Admiral announces an increase in the prices of its automobiles,Chord and Frysler,the smaller firms in the market,usually quickly announce similar price increases for their own cars.This situation is an example of demand-oriented pricing.

Although their names are similar,brand loyalty and brand equity are unrelated.

Which of the following is a popular pricing objective?

SnackAttack has found that an effective technique to generate ideas for new consumer products is to carefully listen to employees and suppliers.

Which stage of the product life cycle is characterized by rapidly rising sales,very high profit levels,and a growing number of competitors?

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:

Interactive Web sites are useful in the commercialization process for new products.

Price,store surroundings,service,and brand name are all elements that consumers evaluate in a total product offer.

Jian has entered into a contract with the federal government to design a computer simulation model for training helicopter pilots.The contract calls for the final price to be set at a fixed percentage profit over and above her cost of production.This seems to represent a:

A brand includes practically all means of identifying a product.

The best strategy for brand name manufacturers to respond to the challenge of generic goods is to use price discounts and coupons to price their products more aggressively.

Beyonce Financial Services purchased several new personal computers and a sophisticated color laser printer for office use.These items would be correctly classified as accessory equipment.

The strategy of charging prices based on consumer demand rather than cost or a predetermined profit margin represents:

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

__________ goods appeal to consumers who are willing to make an extra shopping effort to acquire them.

The most common classification of consumer goods and services is based on producer or manufacturer behavior in the market.

The cost of raw materials used to produce a good or service represent the firm's ________ costs.