Chapter 15 PDF

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Arbus 101 Chapter 15 Test Bank...

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Chapter 15 Student: ___________________________________________________________________________

1. When consumers calculate the value of a product, they look at the benefits and then subtract the cost. ฀ True False 2. Successful businesses constantly monitor consumer wants and needs. ฀ True False

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3. From a strategic marketing viewpoint, a total product offer includes all of the tangible attributes of a good or service and excludes any intangible attributes. ฀ ฀ True False 4. The image created by advertising is part of the total product offer of a product. ฀ True False

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5. The reputation of the manufacturer and the retail store surroundings are considered part of the value enhancers of a total product offer. ฀ ฀ True False 6. Successful marketers attempt to think like a consumer and evaluate the value package offered by a good or service. ฀ ฀ True False 7. Marketing managers are aware that products can take on the characteristics of the store in which they are sold. ฀ ฀ True False 8. The critical component of a total product offer is always a low price. ฀ True False

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9. Low prices can help retailers create an attractive total product offer. ฀ True False

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10. A firm's product line refers to all of the different markets in which it sells the same good or service. ฀ True False 11. A single product line may contain several competing brands. ฀ True False

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12. The term product line describes the combination of product mixes offered by a manufacturer. ฀ True False

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13. A product line is a group of products that are physically similar or are intended for a similar market. ฀ True False 14. The several product lines that a company offers for sale make up that organization's product mix. ฀ True False 15. While service providers offer product lines, they are unable to offer product mixes. ฀ True False

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16. In order for product differentiation to be effective, real product differences must be identified so that one product is clearly better than others. ฀ ฀ True False

17. Marketers utilize pricing, advertising, and packaging to successfully differentiate their products from competitors' products even when actual differences are quite small. ฀ ฀ True False 18. Creative product differentiation can enable a small business to increase market share. ฀ True False

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19. Price, store surroundings, service, and brand name are all elements that consumers evaluate in a total product offer. ฀ ฀ True False 20. A bank's product line may include safety deposit boxes, car loans, and traveler's checks. ฀ True False

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21. The concepts of product lines and product mixes apply to marketers of products and services. ฀ True False

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22. Mystic Beverages, a producer of soft drinks, wants to differentiate its products from those of other soft drink providers. To implement this strategy successfully will require Mystic to create recognizable differences in the physical product it offers. ฀ ฀ True False 23. One function of effective packaging is to attract the attention of consumers. ฀ True False

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24. More than any other component of a total product offer, technology has reduced the importance of packaging. ฀ ฀ True False 25. Codes on packaging can help stores control inventory. ฀ True False

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26. Changes in packaging can transform the product in the minds of consumers and open larger market opportunities. ฀ ฀ True False 27. While packaging innovations benefit the consumer, they have increased the workload of retailers. ฀ True False 28. While the packaging of services has not yet captured the attention of businesses, technological improvements will likely create new opportunities. ฀ ฀ True False 29. In recent years, the packaging of products has been given a greater role in product promotion. ฀ True False 30. The trend towards large, self-service retailers has increased the importance of packaging. ฀ True False 31. A brand includes practically all means of identifying a product. ฀ True False

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32. The purpose of a brand name is to establish an image of generic goods or services. ฀ True False 33. Brand names can significantly impact consumer perceptions of a product. ฀ True False

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34. A trademark is a brand that provides exclusive legal protection for a brand name and a pictorial design. ฀ ฀ True False

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35. The benefits provided by a brand name for a buyer include reduced search time, prestige, and quality assurance. ฀ ฀ True False 36. The Canadian legal system does not offer trademark protection. ฀ True False

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37. Brand names help sellers with new-product introductions and create an opportunity for higher prices. ฀ True False

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38. Brand equity refers to those factors that people associate with a specific brand name, such as awareness, perceived quality, and loyalty. ฀ ฀ True False 39. Brand loyalty refers to the degree to which customers are satisfied with a brand and are committed to further purchases. ฀ ฀ True False 40. Although their names are similar, brand loyalty and brand equity are unrelated. ฀ True False

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41. The intended goal of brand equity is to establish the firm's brand name as the generic name for the product. ฀ ฀ True False 42. Travelwell manufactures and sells luggage and briefcases. Their marketing research indicates that durability is the attribute that consumers most desire in their luggage and briefcases. Travelwell now emphasizes durability in all of their promotional efforts. This strategy is intended to build brand equity. ฀ ฀ True False 43. Brand value is based on the costs of developing and maintaining a brand in the marketplace. ฀ True False

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44. Brand managers have direct responsibility for all the elements of the marketing mix for a particular brand or product line. ฀ ฀ True False 45. Firms use brand managers or brand teams to give them greater control over both new-product development and product promotion. ฀ ฀ True False 46. Beth works for Champion Industries overseeing the marketing mix for the firm's line of calculators. Beth serves as a brand manager for Champion Industries. ฀ ฀ True False 47. Brand managers are responsible for the marketing of a product after it has been developed and a clear promotional message identified. ฀ ฀ True False 48. The product life cycle has five stages. ฀ True False

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49. All products follow the product life cycle. ฀ True False

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50. Different stages in the product life cycle call for different marketing strategies. ฀ True False 51. As consumers evaluate the benefits of a product, price plays a small role. ฀ True False

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52. A long-run pricing objective of almost all firms is to optimize profit. ฀ True False

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53. Sometimes a firm will lower prices below their costs in order to build a customer base. ฀ True False

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54. In order to achieve a social objective, firms use low prices to enable people with low incomes to buy their product. ฀ ฀ True False 55. Rebates and zero-percent financing are pricing strategies to create an image of status and exclusivity. ฀ True False 56. Consumer perceptions of product quality are affected by promotions and packaging, but not by the price of the product. ฀ ฀ True False 57. Successful firms coordinate pricing objectives and strategies with decisions regarding product design, packaging, branding, distribution, and promotion. ฀ ฀ True False 58. Successful firms maintain consistency in the short-run and long-run pricing objectives. ฀ True False 59. Cost-based pricing adds a desired profit margin to the cost of producing a product. ฀ True False

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60. Target costing adds a profit margin to estimated cost of production to determine the optimal price. ฀ True False 61. Demand-based pricing is another name for cost-based pricing. ฀ True False 62. Target costing is a cost-based pricing strategy. ฀ True False

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63. The target costing strategy establishes a selling price that consumers are willing to pay for a product, and then subtracts a desired profit margin to determine a target cost of production. ฀ ฀ True False 64. In the long run, the price of a product is determined by the producer. ฀ True False

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65. Competition-based pricing is a strategy based on what all the other competitors are doing. ฀ True False 66. Price leadership is a demand-based pricing strategy. ฀ True False

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67. Gill's Gadgets establishes the price it charges for its products by determining the cost of production and then adding on a desired profit margin. Gill's strategy is known as target costing. ฀ ฀ True False 68. Admiral Motors is the dominant firm in the auto market. When Admiral announces an increase in the prices of its automobiles, 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. ฀ ฀ True False 69. The purpose of break-even analysis is to determine the lowest price a firm can charge and still be able to cover its costs of production. ฀ ฀ True False

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70. Break-even analysis determines profitability of a firm at various levels of sales. ฀ True False

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71. The break-even point is that level of sales where total revenues equals total costs. ฀ True False

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72. Total fixed costs are those costs that change when the volume of production changes. ฀ True False 73. Variable costs are costs that change with the level of production. ฀ True False

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74. Carlotta owns and manages the Carlite Car Wash. She charges $8 per car wash. Her fixed costs are $600 per month, while her variable costs per car wash amount to $2. Carlotta must wash 60 cars to break even. ฀ ฀ True False 75. Shuichi owns and operates his own sushi bar. His fixed costs would include rent, insurance, and property taxes. ฀ ฀ True False 76. Pattie operates the Zestee Burgers restaurant. The cost of pickles, onions, buns, ketchup, and meat patties would all be considered variable costs for her type of business. ฀ ฀ True False 77. Miranda is a marketing manager for a large manufacturer. Her boss has asked her to evaluate a new product idea. One of the things Miranda wants to determine is how much of this product her firm would have to sell in order to break even. In order to compute this break-even level of sales, she will need to know the price of the good, the total fixed costs, and the variable cost of producing each unit. ฀ ฀ True False 78. Either reducing fixed or variable costs will reduce the break-even point. ฀ True False

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79. The only way to increase the break-even point is to increase the selling price. ฀ True False

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80. A skimming price strategy involves a low pricing policy intended to attract price-sensitive customers from competitors. ฀ ฀ True False 81. A penetration strategy calls for a firm to charge low prices with the intent of attracting a large number of customers and discouraging competition. ฀ ฀ True False 82. 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. ฀ ฀ True False 83. Firms utilizing an everyday low pricing (EDLP) strategy establish a policy of special sales on a regular basis. ฀ ฀ True False 84. A high-low pricing strategy may condition consumers to avoid paying the regular prices by waiting for sale prices. ฀ ฀ True False 85. Psychological pricing utilizes high prices to create the image of a high quality product. ฀ True False

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86. Rather than having frequent special sales, Walt's Warehouse has a pricing strategy that maintains lower prices than competitors all the time. Walt's pricing strategy is known as everyday low prices (EDLP). ฀ ฀ True False 87. Ultimately, the price of a good will be determined by the interaction of supply and demand in the marketplace. ฀ ฀ True False 88. The key to demand-oriented pricing is the recognition that not all producers face the same costs of production. ฀ ฀ True False 89. Despite the fact that microeconomic theory places a great deal of emphasis on price, marketers often try to find ways to compete on product attributes other than price. ฀ ฀ True False 90. Small firms often rely on non-price competition when competing against larger firms. ฀ True False

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91. One way firms can gain a competitive advantage without relying on low prices is by developing close, friendly relationships with their customers. ฀ ฀ True False 92. Budd's Floral Shoppe is located in a large town that has several other florists. The owner, Rose Budd, is likely to find that the presence of many larger competitors means that the only way she can survive is to charge rock bottom prices. ฀ ฀ True False 93. Community Catering Services, Inc. advertises that they are the "friendliest caterers in town." Their prices are no lower than the rates charged by competing caterers, but they put a lot 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. Community Catering is likely to find that this approach is more effective in achieving its goals than the use of aggressive price cutting. ฀ ฀ True False 94. Organizations that assist in moving goods and services from producers to business and consumer users are called financial intermediaries. ฀ ฀ True False 95. Retailers and wholesalers are two major types of marketing intermediaries. ฀ True False

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96. Wholesalers are marketing intermediaries who sell goods or services to ultimate consumers. ฀ True False

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97. A channel of distribution consists of the marketing intermediaries who join together to transport and store goods in their path from producers to consumers. ฀ ฀ True False 98. Brokers are marketing intermediaries that do not take title to the goods they help distribute. ฀ True False 99. Retailers are marketing intermediaries who sell to ultimate consumers. ฀ True False

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100.Agents are marketing intermediaries who take title to the goods they distribute and provide credit to customers who need it. ฀ ฀ True False

101.Manufacturers are usually able to perform marketing functions such as transporting, advertising, and storing, faster and more cheaply than marketing intermediaries. ฀ ฀ True False 102.One way marketing intermediaries improve marketing efficiency is by reducing the number of exchange relationships necessary to move goods through the channel of distribution. ฀ ฀ True False 103.The activities performed by most marketing intermediaries are not essential to the marketing process. ฀ True False 104.The best way to reduce the cost of goods is to eliminate marketing intermediaries from the distribution channel. ฀ ฀ True False 105.Marketing intermediaries have survived because they have been able to perform marketing functions more efficiently and effectively than a manufacturer or consumer could perform these functions. ฀ ฀ True False 106.The costs added by marketing intermediaries usually outweigh the values they create. ฀ True False

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107.Jessica is a real estate agent who brings together the buyers and sellers of houses and commercial property. Jessica helps the parties negotiate the terms and conditions of real estate sales, but she does not take title to the property, provide credit, or assume any risks associated with the exchanges she helps negotiate. Because Jessica provides only limited services, she is not a true marketing intermediary. ฀ ฀ True False 108.Sav-U-More Grocery Store sells a wide range of foods and household supplies to households in Miller's Creek, a suburb of a large city. The store advertises that its prices are much lower than the prices charged by larger supermarket chains in the area. This low price approach means that Sav-U-More is a classic example of a merchant wholesaler. ฀ ฀ True False 109.Although Helpusell brings together buyers and sellers and helps negotiate exchanges, it does not actually take title to any of the goods being traded. Helpusell would be classified as an agent or broker. ฀ ฀ True False 110.Most marketing intermediaries have survived in the past because consumers were unaware of how much these companies add to the cost of distributing goods. ฀ ฀ True False 111.An effective channel of distribution does more than simply ensure that goods are transported efficiently from producer to buyer. ฀ ฀ True False 112.Marketing intermediaries charge a price for the functions they perform. Thus, a sure-fire way to reduce distribution costs is to eliminate marketing intermediaries from the channel of distribution. ฀ ฀ True False 113.Currently, Halperin Electrical sells directly to thousands of industrial customers. Halperin could reduce the number of exchange relationships by including wholesalers in its channel of distribution. ฀ ฀ True False 114.Hartselle Home Products, Inc. manufacturers a variety of inexpensive household gadgets. The company has decided to cut costs by eliminating all of the marketing intermediaries who help distribute its products. Hartselle will be able to reduce its total marketing costs by eliminating the marketing functions these intermediaries perform. ฀ ฀ True False

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115.Economists say that intermediaries add value and that value greatly exceeds the cost of a product. ฀ True False

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116.Discount stores, department stores, supermarkets, and specialty stores are all among the major types of retail stores. ฀ ฀ True False 117.Discount stores compete mainly on the basis of price. ฀ True False

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118.Category killer stores tend to compete mainly on the basis of superior service. ฀ True False

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119.Candy, gum, cigarettes, and popular magazines are usually distributed using a selective distribution strategy. ฀ ฀ True False 120.Words 4 Hire is a nationwide chain of stores that offers such a huge selection of paperback and hardcover books at such competitive prices that small local bookstores have a hard time competing with them. Words 4 Hire is best classified as a discount store. ฀ ฀ True False 121.Saul-Mart is the name of a new chain of discount stores. A major part of Saul-Mart's competitive strategy is likely to be based on keeping its prices lower than those of other types of retailers. ฀ ฀ True False 122.A distribution strategy that puts the product into as many retail outlets as possible is known as an intensive distribution strategy. ฀ ฀ True False 123.Producers of shopping goods such as furniture, appliances, and clothing usually rely on an exclusive distribution strategy. ฀ ฀ True False 124.An advantage of a selective distribution strategy is that consumers are able to find the product at a wide variety of retailers. ฀ ฀ True False 125.Soundworthy Stereo is a producer of high quality speakers and stereo components. The company sells its products through a few preferred retailers in any geographic area. Soundworthy uses a selective distribution strategy. ฀ ฀ True False 126.The main difference between selective distribution and exclusive distribution is the number and type of market segments the firm chooses. In a selective strategy, a variety of pro...