Deck 9: Small Business Marketing: Product and Pricing Strategies

Question 1

The standard product life cycle has four stages: introduction,growth,development,and decline.

Answer 1

False

Question 2

Most owners of small businesses set prices using some more or less arbitrary heuristic.

Answer 2

True

Question 3

Studies have shown that companies that compete on product innovation and high quality achieve higher growth than those that try to compete on price.

Answer 3

True

Question 4

For small businesses,rebates are not a good idea because it takes away from a margin that is already very low.

Question 5

The first stage of new product development process is idea evaluation/feasibility study.

Question 6

Periodic discounting refers to running a sale without a definite pattern or cycle.

Question 7

Only 15 to 35 percent of consumers decide on a product using price as the number one factor.

Question 8

Only about 30 percent of all new product launches are successful.

Question 9

Cheaper movie tickets for afternoon matinee is an example of off-peak pricing.

Question 10

During the maturity stage,acceptance of the product increases rapidly,and sales and profits grow at higher rates than at any other part of the product life cycle.

Question 11

Internal reference pricing may come from looking at competitive ads,researching on the Internet,visiting several stores,or asking friends.

Question 12

Elastic products have no substitutes and are absolute necessities.

Question 13

These simple basic rules apply for company names: being catchy,easy to spell and pronounce,and being descriptive.

Question 14

The core product has features that differentiate it from the competition but are still closely related to the augmented product.

Question 15

Hybrid products are a balanced combination of goods and services.

Question 16

Numbers that are multiples of ten are psychological hurdles for consumers.

Question 17

Once a product begins its permanent decline,this decline can be slow or fast,steady or unsteady.

Question 18

It is easier to virtually eliminate the decline stage of a service.

Question 19

Most of the times it is a bad idea for a small firm to try to compete on price.

Question 20

Services are tangible,while goods are intangible.

Question 21

A quality of a service in which the service being done cannot be disconnected from the provider of the service is called

A)perishability.
B)tangibility.
C)inseparability.
D)heterogeneity.

Question 22

This is an exhaustive process of specifying the details of each idea's technological feasibility,its cost,how it can be marketed,and its market potential.

A)Idea screening
B)Product development
C)Idea evaluation
D)Commercialization

Question 23

Leasing a car is an example of a

A)service-dominated product.
B)good-dominated product.
C)pure service.
D)hybrid good and service combination.

Question 24

If a service is not used when offered,it cannot be saved for a later use,thereby describing its

A)perishability.
B)tangibility.
C)inseparability.
D)heterogeneity.

Question 25

The very basic description of what a product is refers to

A)the total product.
B)an augmented product.
C)the hybrid product.
D)the core product.

Question 26

Identify the product that has features which differentiate it from the competition but is still closely related to the core product.

A)Total product
B)Core product
C)Augmented product
D)Me-too product

Question 27

The group of people on which a marketer focuses promotion and sales efforts is called a

A)me-too group.
B)target market.
C)maturity group.
D)breakeven market.

Question 28

Idea screening

A)is the process of specifying the details of each idea's technological feasibility,its cost,how it can be marketed,and its market potential.
B)is the process of selecting the most promising ideas to be further evaluated for feasibility.
C)involves the first versions of products called prototypes which are used in further consumer testing.
D)is the process of making the new product available to consumers.

Question 29

Which of the following statements about prototypes is true?

A)If you are not in business,or if you are in a very different business,prototyping is not very difficult.
B)If a rapid prototyping model can be developed,the molds for manufacturing can be made,but expensively,by modern manufacturers.
C)Test marketing involves selling the prototype in a simulated market environment only.
D)The Internet makes it easier to find companies willing to bid on and build prototypes.

Question 30

Which of the following is the first stage of the new product development process?

A)Idea screening
B)Commercialization
C)Idea evaluation
D)Idea generation

Question 31

In the new product development process,what stage comes after idea generation?

A)Idea screening
B)Commercialization
C)Idea evaluation
D)Product development

Question 32

Which of the following is INCORRECT about services?

A)Services are inseparable from consumption
B)Services are tangible
C)Services are heterogeneous
D)Services are perishable

Question 33

An item's capability of being touched,seen,tasted,or felt is called

A)tangibility.
B)inseparability.
C)heterogeneity.
D)perishability.

Question 34

Products essentially similar to something already on the market are called

A)parallel competition products.
B)prototypes.
C)test market products.
D)me-too products.

Question 35

Goods are _____,while services are _____.

A)heterogeneous;homogeneous
B)tangible;intangible
C)inseparable;separable
D)perishable;not perishable

Question 36

A product can include all of the following EXCEPT

A)goods.
B)ideas.
C)people.
D)price.

Question 37

Which of the following is NOT the best option when naming your company?

A)Catchy name
B)Easy to spell and pronounce
C)Same as your product name or your name
D)Descriptive of your business

Question 38

The first versions of products in formal development are called

A)test markets.
B)prototypes.
C)total products.
D)hybrid products.

Question 39

A quality of a service in which each time it is provided it will be slightly different from the previous time refers to

A)perishability.
B)tangibility.
C)inseparability.
D)heterogeneity.

Question 40

Which of the following includes the entire bundle of products and services that you offer?

A)Total product
B)Augmented product
C)Hybrid product
D)Core product

Question 41

During the _____ stage of product life cycle,acceptance of the product increases rapidly and sales and profits grow at higher rates than at any other part of the product life cycle.

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

Question 42

What is the challenge a small business faces in the maturity stage?

A)Keeping sales and profits at a fairly high level.
B)Educating customers about your product.
C)Keeping up with production and ensuring good distribution.
D)Convincing intermediaries about why your product is preferable.

Question 43

_____ is the amount of profit,usually stated as a percentage of the total price.

A)Elasticity
B)Breakeven
C)Margin
D)Markup

Question 44

The optimum price is primarily a function of all of the following EXCEPT

A)demand for the product or service.
B)value delivered by the customer.
C)prices set by competing firms.
D)your business strategy and product placement.

Question 45

_____ products have lots of substitutes or are not necessities.

A)Elastic
B)Hybrid
C)Inelastic
D)Augmented

Question 46

Which of the following is an example of an inelastic product?

A)Luxury goods
B)Hamburgers
C)Gasoline
D)Coffee

Question 47

Which of the following is an example of an elastic product?

A)Candy bar
B)Antibiotics
C)Heating oil
D)Drinking water

Question 48

Of all the marketing variables available,which is the easiest to change?

A)Price
B)Product
C)Promotion
D)Placement

Question 49

Identify the correct statement about the decline phase of the product life cycle.

A)Advertising and promotion expenses are usually nearly ratified at this point.
B)Many products go into decline,only to be resurrected in the future as styles come back to old standards.
C)Companies upgrade their product lines in order to cut costs.
D)Companies market to less profitable segments to squeeze as much profit out of the final stage as possible.

Question 50

Identify the incorrect statement about the growth stage of the product life cycle.

A)Prices tend to drop as production becomes more efficient and competition increases.
B)During this stage,advertising and promotion are much more critical than in the introduction stage.
C)From a marketing standpoint,consumers are aware of your product and know how it will make their lives better.
D)This stage is when you try to get into all the markets you can nationally or internationally.

Question 51

All of the following influence the prices you set for your products EXCEPT

A)costs.
B)customer.
C)competition.
D)employees.

Question 52

A product for which there are few substitutes and for which a change in price makes very little difference in quantity purchased is called a(n)

A)hybrid product.
B)total product.
C)elastic product.
D)inelastic product.

Question 53

Which of the following statements about the maturity phase of the product life cycle is false?

A)Manufacturers find ways to cut costs to keep market share.
B)Since there are few new users for the product,most gains in market share are made by stealing customers from competitors.
C)A product can stay in the maturity stage for only a short period of time.
D)As weaker competitors start to leave the market,you will have opportunities to take their "leftover" customers.

Question 54

_____ is the process of making the new product available to consumers.

A)Commercialization
B)Test marketing
C)Breakeven
D)Pricing psychology

Question 55

Standard product life cycle has four stages:

A)introduction,growth,maturity,and decline.
B)core,growth,total,and decline.
C)introduction,core,merge,and decline.
D)introduction,growth,merge,and decline.

Question 56

At which stage of the product life cycle do promotions such as coupons,rebates,and multipacks become an important marketing tool?

A)Growth
B)Decline
C)Introduction
D)Maturity

Question 57

Which of the following is the final stage of the new product development process?

A)Idea screening
B)Feasibility study
C)Commercialization
D)Product development

Question 58

Which of the following statements about prototypes is false?

A)Once the prototype is developed and tested,the product is ready for test marketing.
B)Small businesses,for financial reasons,primarily choose smaller local markets and conduct fewer tests than their larger counterparts.
C)Standard test marketing introduces the product and the marketing strategy in the simulated environment.
D)If you are not in business or are in a very different business,test marketing services are very difficult.

Question 59

Which of the following statements about the introduction stage of the product life cycle is true?

A)The risks from competition in the introduction stage are generally high.
B)From a marketing standpoint,the more innovative the product,the slower the sales.
C)The best sales method is to focus on the absolute advantage your product has over the competition.
D)All products survive the introduction phase of the product life cycle.

Question 60

A consumer's mental image of what a product price should be refers to

A)breakeven price.
B)internal reference price.
C)fixed cost price.
D)external reference price.

Question 61

At or near industry average price is called

A)captive pricing.
B)bait pricing.
C)the going rate.
D)price signaling.

Question 62

What pricing is used for non-status symbol types of products?

A)Prestige pricing
B)Odd-even pricing
C)Premium pricing
D)Captive pricing

Question 63

Generally,_____ pricing is for an item considered a status symbol,whereas,_____ pricing is used for non-status symbol types of products.

A)skimming;total
B)prestige;premium
C)return;skimming
D)premium;prestige

Question 64

_____ discounting refers to sales that happen on some regular cycle.

A)Off-peak
B)Bundling
C)Random
D)Periodic

Question 65

Increasing market share

A)usually means pricing toward the high end of the competition in order to take market share from the competition.
B)becomes more popular as a product reaches the decline phase of the product life cycle.
C)should not be an objective for a small business.
D)is a much better option for the small firm than maximizing profits.

Question 66

The practice of setting (usually)three price points: good,better and best quality refers to which of the following?

A)Captive pricing
B)Partitioned pricing
C)Price lining
D)Breakeven point pricing

Question 67

Senior citizens' discounts are an example of

A)limit pricing.
B)price discrimination.
C)penetration pricing.
D)price signaling.

Question 68

"Buy one large pizza and get a regular one free," offer to long-time customers is an example of

A)partitioned pricing.
B)loyalty programs.
C)referral discounts.
D)coupons.

Question 69

The term for charging the absolute highest possible price due to inelastic demand is

A)price skimming.
B)premium pricing.
C)professional pricing.
D)penetration pricing.

Question 70

What is an extremely low penetration price that discourages competitors from entering a market called?

A)Everyday low price
B)Going rate
C)Price signaling
D)Limit pricing

Question 71

_____ prices may come from looking at the competitive ads,researching the Internet,visiting several stores,or asking friends.

A)Breakeven
B)Internal reference
C)Fixed cost
D)External reference

Question 72

Consumers' internal reference price may be based on

A)looking at competitive ads.
B)their understanding of how much it would cost to make it.
C)researching on the Internet.
D)visiting several stores.

Question 73

_____ is the end price to your customer that might be four times from what you got.

A)Skimming
B)Price escalation
C)Premium pricing
D)Partitioned pricing

Question 74

_____ pricing refers to setting the price for a base item and then charging extra for each additional component.

A)Captive
B)Prestige
C)Partitioned
D)Premium

Question 75

A back-to-school sale is an example of

A)periodic discounting.
B)random discounting.
C)price skimming.
D)off-peak pricing.

Question 76

Which of the following refers to setting the price for an item relatively low and then charging much higher prices for the expendables it uses?

A)Prestige pricing
B)Captive pricing
C)Partitioned pricing
D)Odd-even pricing

Question 77

_____ is charging the highest price the market will bear.

A)Skimming
B)Psychological price
C)Breakeven
D)Return pricing

Question 78

Identify the term for an attempt to appeal to several different markets.

A)Prestige pricing
B)Captive pricing
C)Price lining
D)Random discounting

Question 79

Selling a name brand at or near cost in order to attract traffic to a retailer is termed

A)bait pricing.
B)loss leaders.
C)price signaling.
D)customary pricing.

Question 80

Advertising an inexpensive product and placing it near better,more expensive models is called

A)reference pricing.
B)captive pricing.
C)bait pricing.
D)limit pricing.