Question 1

UPEK Provides Biometric Fingerprint Security for Personal Computers to various PC manufacturers.UPEK is experiencing slow growth and it is just recovering its research and development costs from some PC manufacturers that are selling to consumers.The biometric fingerprint industry would be in the _______________ stage of the product life cycle.

Accepted Answer

The biometric fingerprint industry is in the introduction stage as UPEK is just recovering its R&D costs, indicating that the technology is new and not yet widely adopted.

Question 2

The music industry has changed dramatically over the years.In the 1970s,consumers purchased 8-track tapes.In the 1980s,cassette tape players caused the decline of 8-track tape players.In fact,today consumers would experience difficulty in purchasing a new artist on 8-track tape.Now in the 2000s,MP3 players have become very popular and are being purchased by music lovers of every age and background.As sales of MP3 players continue to grow at an increasing rate,sales of CD players are weakening,the profits are declining,and the product may face a fate similar to that of 8-track tape players.Based upon this information,you can correctly conclude that CD players are in the ____ stage,and MP3 players are in the _____ stage of the product life cycle.

Accepted Answer

CD players are in the decline stage because sales are decreasing and profits are declining. MP3 players are in the growth stage because sales are increasing at an increasing rate.

Question 3

Figure: 11-1 
-The marketing strategy in the stage in the product life cycle labelled "B" in Figure 11-1 would involve:

Accepted Answer

The stage labelled "B" in Figure 11-1 represents the growth stage of the product life cycle where competition starts to increase. Therefore, stressing points of difference would be the most effective marketing strategy to distinguish the product from its competitors and attract new customers. Informing and educating would be more appropriate in the introduction stage (represented by "A" in the figure) while reminding users would be more suitable in the maturity and decline stages (represented by "C" and "D" in the figure). Minimal promotion would not be ideal in the growth stage as it may lead to a decrease in market share.

Question 4

Which of the following is a characteristic of the growth stage of the product life cycle?

Accepted Answer

During the growth stage, advertising focuses on differentiating the product from competitors by emphasizing its unique features and benefits.

Question 5

Consumers who are frequently on the Internet more than likely use either Internet Explorer or Firefox as their web browser.There is another option called Opera,which is faster and highly customizable.Opera was initially offered on the market for $29 and this includes tech support.It was hoped that this low price would build the volume of Opera users quickly.Opera used a(n)_____ strategy.

Accepted Answer

The strategy used by Opera of offering a low price upfront in order to quickly build a volume of users is called penetration pricing.

Question 6

Figure: 11-1 
-The stage in the product life cycle labelled "D" in Figure 11-1 is called

Accepted Answer

The stage labelled "D" in Figure 11-1 is the decline stage, which occurs when sales begin to decrease and the product becomes less profitable. This stage is usually characterized by a decrease in demand, increased competition, and a decline in overall revenue.

Question 7

Imagine that Eveready has developed solar rechargeable batteries that cost only slightly more to produce than regular batteries (less than the rechargeable batteries currently available)and can be recharged by sunlight up to 5 times,after which they are meant to be discarded.Unfortunately,the production process cannot be patented,and competitors could arrive within a few months.Eveready's marketing efforts should include all the following EXCEPT:

Accepted Answer

Skimming is a pricing strategy where a company charges a high price for its product initially to generate high revenue. However, in this scenario, the product is not unique, and competitors can enter the market soon. Therefore, it would not be appropriate to adopt a skimming pricing strategy. Instead, Eveready should focus on widespread distribution, high production capacity, and advertising aimed at brand name awareness to reach the maximum number of customers before competitors enter the market.

Question 8

To discourage competitive entry,a company can price its new product low,using penetration pricing.This pricing strategy also helps to:

Accepted Answer

Penetration pricing involves setting a low price to attract a large number of customers and build unit volume quickly.

Question 9

A recent study of Canadian small businesses found that almost ________ percent believe that branding is critical to business success.

Accepted Answer

According to the question, the study of Canadian small businesses found that almost what percent believe that branding is critical to business success. The correct answer is D (85) as it is the highest option mentioned and implies that the majority of Canadian small businesses recognize the importance of branding.

Question 10

Which of the following statements about the introduction stage of the product life cycle is NOT true?

Accepted Answer

During the introduction stage, the focus is on creating awareness and primary demand for the product category, rather than stressing competitive differences.

Question 11

A new cellphone service provider enters the Canadian market place with "Unlimited Everything" (text,data,voice,long distance)at $10 a month plans.This pricing strategy is referred to as:

Accepted Answer

Penetration pricing is a pricing strategy where a company enters a new market with a low price to attract customers and gain market share. In this case, the new cellphone service provider is using the strategy by offering "Unlimited Everything" at a low price of $10 a month. The company hopes to attract a large customer base and establish its position in the competitive Canadian market.

Question 12

When Apple launches a new iPhone version,the non-subsidized price (as in the price if you buy direct,without a three-year contract),is often $799 or $899,while older versions decrease in price.This initial high price is referred to as:

Accepted Answer

Skimming pricing is a strategy where a company sets a high price for a new product in the market. This strategy is commonly used for innovative products with unique features, like new iPhone versions. The high price allows the company to recover its investment quickly and maximize profits before competitors enter the market with similar products. As the market saturates and competitors offer similar products, the company may reduce the price, which is what happens with older iPhone versions. Cost-plus pricing, ROI pricing, and market-oriented pricing are other pricing strategies that do not apply to this scenario as they are based on different factors.

Question 13

Technology that allows consumers to access information on the Internet from a cell phone is in the introductory stage of its product life cycle.The industry is composed of several small firms with state-of-the-art products that are neither standardized nor compatible with one another.Moreover,these small firms have limited marketing expertise and little money to spend on marketing; their common strength is engineering.This industry would welcome the entry of a giant in the mobile phone industry like Nokia because:

Accepted Answer

Nokia, being a giant in the mobile phone industry, could set standards and generate primary demand, which would benefit the smaller firms that lack marketing expertise and funds. Nokia could also potentially establish compatibility between products and solve any remaining technological problems. Therefore, Nokia's entry would be welcomed by the industry.

Question 14

A company follows a skimming strategy as part of introducing a new product to:

Accepted Answer

Skimming strategy involves setting a high price for a new product initially to recover the costs of development and to capitalize on the price insensitivity of early buyers. As time passes and more competitors enter the market, the company can gradually lower the price to appeal to price-sensitive customers and increase sales volume.

Question 15

A few years ago Who Wants to Be a Millionaire premiered as the first nighttime game show in a couple of decades.Once the show became a hit and televised several nights a week,other networks quickly created their own version of what they hoped to be a successful game show format.Greed and Twenty-One are the names of but two of the new shows that were created to compete with Who Wants to Be a Millionaire.At this point in time the nighttime televised game show entered which stage of its product life cycle?

Accepted Answer

The growth stage is characterized by a rapid increase in sales and popularity, as well as the entry of competitors trying to capitalize on the success of the original product.

Question 16

One aspect of a new company's goodwill strategy is for every shoe purchased in North America,one free shoe is donated to a child in Africa.This aspect plays a major role in product branding that is referred to as a:

Accepted Answer

The strategy of donating one free shoe to a child in Africa for every shoe purchased in North America is a form of social benefit or social responsibility. Therefore, the best choice is A) social benefit brand.

Question 17

When Texas Instruments (TI)introduced its pocket calculator it was a tremendous product innovation,and TI set the mail order price at $495.What is the name of the pricing strategy Texas Instruments used?

Accepted Answer

Texas Instruments used a skimming pricing strategy by setting a high price for its pocket calculator when it was first introduced. Skimming involves setting a high price initially for a new and innovative product to maximize profits before competitors enter the market and drive prices down.

Question 18

INGenius ATG introduced the microware oven-sized battery recycler in 1999.It was intended for the business market.Companies could buy the recycler and use it to restore alkaline batteries that are not normally recharged.The recycling does not let a battery live forever; but it does give it a charge of about 80 percent of the energy it originally had.Depending on the size of the battery,the recycler can hold up to 96 batteries.It takes 13 hours to recharge any battery.The recycler was introduced at $3,000.When you consider that a pair of alkaline batteries can be purchased for $2,you should suspect that INGenius ATG was using a(n)_____ strategy.

Accepted Answer

Skimming pricing is a strategy where a high price is set for a new and innovative product to take advantage of the early adopters who are willing to pay a premium price for the product. In this case, INGenius ATG introduced a new and innovative product (battery recycler) in 1999, which had a high price tag of $3,000. This suggests that they were using a skimming pricing strategy.

Question 19

Figure: 11-1 
-The stage in the product life cycle labelled "A" in Figure 11-1 is referred to as

Accepted Answer

This stage is referred to as the introduction stage, where the product is first introduced in the market and sales are low due to lack of awareness and brand recognition.

Question 20

Figure: 11-1 
-The stage in the product life cycle labelled "C" in Figure 11-1 is called

Accepted Answer

The maturity stage is characterized by slow growth in sales and profits, as the product reaches its peak in the market.

Quiz 11: Managing Products and Brands

Figure: 11-1 -The marketing strategy in the stage in the product life cycle labelled "B" in Figure 11-1 would involve:

Which of the following is a characteristic of the growth stage of the product life cycle?

Figure: 11-1 -The stage in the product life cycle labelled "D" in Figure 11-1 is called

To discourage competitive entry,a company can price its new product low,using penetration pricing.This pricing strategy also helps to:

A recent study of Canadian small businesses found that almost ________ percent believe that branding is critical to business success.

Which of the following statements about the introduction stage of the product life cycle is NOT true?

A new cellphone service provider enters the Canadian market place with "Unlimited Everything" (text,data,voice,long distance) at $10 a month plans.This pricing strategy is referred to as:

When Apple launches a new iPhone version,the non-subsidized price (as in the price if you buy direct,without a three-year contract) ,is often $799 or $899,while older versions decrease in price.This initial high price is referred to as:

A company follows a skimming strategy as part of introducing a new product to:

One aspect of a new company's goodwill strategy is for every shoe purchased in North America,one free shoe is donated to a child in Africa.This aspect plays a major role in product branding that is referred to as a:

When Texas Instruments (TI) introduced its pocket calculator it was a tremendous product innovation,and TI set the mail order price at $495.What is the name of the pricing strategy Texas Instruments used?

Figure: 11-1 -The stage in the product life cycle labelled "A" in Figure 11-1 is referred to as

Figure: 11-1 -The stage in the product life cycle labelled "C" in Figure 11-1 is called