Question 1

The dominant choice attribute for a consumer in buying convenience item is:
A) brand name.
B) price.
C) access.
D) situation specific.

Accepted Answer

C

Question 2

Cannibalization refers to a situation when:
A) the market territory of two contiguous markets overlap.
B) the breadth and depth of a product line complicate the marketing of a service line.
C) the sale of one product takes away sales from another of the same company.
D) two competing companies confuse the other's position in the consumers' mind, thus cannibalizing their unique position.

Accepted Answer

Cannibalization occurs when a new product introduced by a company takes sales away from its existing products, affecting the overall sales performance.

Question 3

In the introduction stage of the product life cycle, the major concern for the organization is:
A) to correctly price the product or service.
B) to ensure that the product or service is a quality offering.
C) to ensure a sufficient supply in the channel of distribution.
D) to ensure that there is a value-added difference.

Accepted Answer

In the introduction stage, the focus is on establishing the product's quality to gain consumer trust and acceptance.

Question 4

In a skimming price strategy, the organization tends to:
A) set a high price relative to competing products or substitutable services.
B) skim off the high-end customers.
C) set a high price to allocate as much cost to this service line as possible.
D) All of these are correct.

Accepted Answer

Skimming price strategy involves setting a high price initially to target customers willing to pay more, often before lowering the price over time.

Question 5

One of the key advantages of a skimming strategy for services is that:
A) it gives a service a way to develop a position to negotiate with consumers.
B) it is a useful mechanism for structuring all the costs of the services.
C) it allows for a high price because no one understands the costs.
D) it can be useful to control demand until the organization is sure that processes are in place to handle flow.

Accepted Answer

A skimming strategy involves setting high prices initially to maximize profits from early adopters, and it can help control demand until the organization is ready to handle increased service flow.

Question 6

The major disadvantage of a skimming strategy is that it:
A) encourages competitors to enter.
B) allows for rate-setting commissions to begin an investigation into price-setting practices.
C) ignores where the bulk of the market is.
D) All of these are correct.

Accepted Answer

The answer of The major disadvantage of a skimming strategy...

Question 7

To implement a penetration strategy, an organization must have a good understanding of:
A) the price sensitivity of the market.
B) its cost structure.
C) its ability to deal with a reaction from competitors.
D) its debt-financing capacity.

Accepted Answer

The answer of To implement a penetration strategy, an organization...

Question 8

Generating primary demand is the major objective in which stage of the product life cycle?
A) Introduction
B) Growth
C) Mature
D) Decline

Accepted Answer

In the introduction stage, the primary objective is to generate awareness and primary demand for the new product.

Question 9

A manufacturer of proton beam therapy publishes a magazine showing articles and stories of patients whose diseases have been treated with great results using this technology. This is an example of a strategy to create:
A) differentiation.
B) skimming.
C) secondary demand.
D) primary demand.

Accepted Answer

The answer of A manufacturer of proton beam therapy publishes...

Question 10

When competitors enter the market, the organization should recognize that it has entered which stage of the product life cycle?
A) Introduction
B) Growth
C) Maturity
D) Decline

Accepted Answer

During the growth stage of the product life cycle, competitors typically enter the market as the product gains acceptance and demand increases.

Question 11

Intuitive Surgical has entered the market with a robotics surgical device. Because it is in the growth stage of the life cycle, it has decided to:
A) lower prices.
B) generate primary demand.
C) target different market segments for usage of its device.
D) All of these are correct.

Accepted Answer

In the growth stage, companies often target different market segments to expand their customer base and increase market penetration.

Question 12

The first proton beam therapy center has now closed, and in some markets two competing centers have decided to merge. These trends indicate that the market for such facilities has entered which stage of the product life cycle?
A) Introduction
B) Growth
C) Maturity
D) Decline

Accepted Answer

The merging of competing centers and the closure of the first center suggest market saturation and stabilization, characteristic of the maturity stage in the product life cycle.

Question 13

Generating selective demand is the key promotional objective of which stage of the product life cycle?
A) Introduction
B) Growth
C) Maturity
D) Decline

Accepted Answer

During the growth stage, the focus is on generating selective demand to differentiate the product from competitors and encourage brand preference.

Question 14

In the growth stage of the life cycle, the focus on the middleman becomes one of:
A) negotiating the price.
B) gaining a presence.
C) solidifying loyalty.
D) gaining an image of the service in the channel.

Accepted Answer

The answer of In the growth stage of the life...

Question 15

In the early phase of the mature life cycle, growth in sales/revenues continues to occur due to:
A) marginal competitors exiting the marketplace.
B) the lessening battle for market share.
C) stronger players beginning to solidify their position.
D) customers beginning to recognize their preferences for the brand.

Accepted Answer

The answer of In the early phase of the mature...

Question 16

In the mature stage of the product life cycle, a key objective becomes one of:
A) maintaining price margins.
B) maintaining the existing customer base.
C) recognizing when it is necessary to withdraw from the market first.
D) developing selective demand.

Accepted Answer

In the mature stage of the product life cycle, the market is saturated, and the focus shifts to maintaining the existing customer base to ensure steady sales and fend off competition.

Question 17

Developing new product or service lines to reposition the organization to enjoy future revenue streams should occur during which stage of the product life cycle?
A) Introduction
B) Growth
C) Maturity
D) Decline

Accepted Answer

The answer of Developing new product or service lines to...

Question 18

Aggressive price discounting is most common during which stage of the product life cycle?
A) Introduction
B) Growth
C) Maturity
D) Decline

Accepted Answer

The answer of Aggressive price discounting is most common during...

Question 19

In the decline stage of the product life cycle, many organizations struggle with dropping an unprofitable service or product because:
A) it is often an emotional decision for the organization.
B) there is always revenue that can be obtained.
C) some people always need every service.
D) every product has value.

Accepted Answer

Organizations often struggle with dropping an unprofitable service or product because it can be an emotional decision, as they may have invested significant resources and effort into its development and maintenance.

Question 20

In the life cycle of a high-learning product, the key strategic challenge is to:
A) price it at the appropriate value level.
B) educate the market as to the benefits of the product.
C) get people to learn to adapt to change.
D) get the channel to adopt to new use alternatives.

Accepted Answer

Educating the market about the benefits of the product is the key strategic challenge in the life cycle of a high-learning product.

Quiz 9: Product Strategy

The dominant choice attribute for a consumer in buying convenience item is:

Cannibalization refers to a situation when:

In the introduction stage of the product life cycle, the major concern for the organization is:

In a skimming price strategy, the organization tends to:

One of the key advantages of a skimming strategy for services is that:

The major disadvantage of a skimming strategy is that it:

To implement a penetration strategy, an organization must have a good understanding of:

Generating primary demand is the major objective in which stage of the product life cycle?

A manufacturer of proton beam therapy publishes a magazine showing articles and stories of patients whose diseases have been treated with great results using this technology. This is an example of a strategy to create:

When competitors enter the market, the organization should recognize that it has entered which stage of the product life cycle?

Intuitive Surgical has entered the market with a robotics surgical device. Because it is in the growth stage of the life cycle, it has decided to:

The first proton beam therapy center has now closed, and in some markets two competing centers have decided to merge. These trends indicate that the market for such facilities has entered which stage of the product life cycle?

Generating selective demand is the key promotional objective of which stage of the product life cycle?

In the growth stage of the life cycle, the focus on the middleman becomes one of:

In the early phase of the mature life cycle, growth in sales/revenues continues to occur due to:

In the mature stage of the product life cycle, a key objective becomes one of:

Developing new product or service lines to reposition the organization to enjoy future revenue streams should occur during which stage of the product life cycle?

Aggressive price discounting is most common during which stage of the product life cycle?

In the decline stage of the product life cycle, many organizations struggle with dropping an unprofitable service or product because:

In the life cycle of a high-learning product, the key strategic challenge is to: