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Exam 12: Creating and Pricing Products That Satisfy Customers

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Question 101

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Price competition occurs when a seller makes its product stand out from the competition by distinctive product quality and customer service.

A) True
B) False

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Question 102

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Three types of product-line pricing are price leaders,special-event pricing,and comparison discounting.

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B) False

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Question 103

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Price serves the function of ____ for goods,services,and financial resources.

____ competition is competition based on factors such as product quality,promotion,customer service,and packaging.

Borden,Inc.wants to develop a new line of great tasting,low-calorie,low-fat,and low-cholesterol processed cheese products.The managers are studying whether demand is strong enough and whether the new line will yield a favorable return on investment.The managers are currently in which phase of new product development?

Multiple-unit pricing is packaging together two or more complementary products and selling them for a single price.

A major reason why retailers use markup pricing is because it is easy to apply.

If Carson purchases a tie from JCPenney for $30,that $30 represents JCPenney's ____ from the sale.

Which of the following is an example of a raw material that would be used in the production of a physical product?

The breakeven quantity is the number of units that must be sold to equal the projected total revenue for the period.

Craftsman and Kenmore are examples of a store brand.

Arm & Hammer launches a campaign to extend the life of its baking soda products through improved packaging and new uses in products such as toothpaste and cat litter.These new uses of products and other modifications are generally created during the ____ phase of the product life-cycle.

Slick It,Inc. ​Render is a salesperson for Slick It,Inc.Slick It does not sell products with its own brand name.Instead,its products are created for different retail stores and carry the store brand.Render thought that several changes needed to be made to a particular product,but Slick It management reminded him that the stores,not Slick It,owned the brand. ​However,because Slick It had been concerned about dropping sales,management listened to Render's concerns about the company's pricing.He suggested using a different pricing strategy.More specifically,he felt that the company should incorporate a multiple-unit pricing strategy because it would then allow Slick It to set a single price for multiple units.This had the potential of increasing sales and therefore profits,so management agreed to consider Render's suggestion. -Refer to Slick It,Inc.When Slick It displays information on a product or its package,this refers to

Candy bars,milk,and newspapers are all examples of convenience products.

The strategy of setting a low price for a new product to gain a large market share for the product quickly is called

Nate buys companies that are small or companies in financial trouble.He helps these companies turn around and develop a competitive advantage.The company that he recently purchased is called Everyone's Way,Inc.The company sells men's clothing and accessories.Everyone's Way keeps the sewing machines for clothes manufacturing at a separate production facility so that the store location space can be reserved for display and selling. After looking over the different products available,Nate realized that the company's previous owner was not aware of the product life-cycle because the company kept items that were obviously too old and out-of-date.Also,because of the high turnover,employees did not have good knowledge of the different product lines and did not know the difference between a product line and a product mix.To move the company forward,Nate thought of the following two measures: first,developing a new product to incorporate into the product mix;and second,eliminating the out-of-date products. -Refer to Everyone's Way,Inc.What type of products is sold at Everyone's Way?

Maria and Kiana are shopping for ball gowns for a charity ball to be held at The Peninsula Hotel in Beverly Hills,California,a five-star,$825 per night hotel.Maria suggests that they look for dresses at Sax Fifth Avenue,Nieman Marcus,or Versace so they will blend with the wealthy people at the hotel.She also asserts that clothing purchased at these stores will be of higher quality and value than clothing purchased at Macy's,J.C.Penney's,or Ross even though they could find dresses by some of the same designers at those stores.Kiana asserts that dresses bought at Macy's,J.C.Penney's,or Ross by the same designers are the same as those from the high-end stores and will cost far less.Kiana tells Maria that paying more for a dress by the same designer does not make it a better dress.When buyers equate the status,quality,and value of a luxury item with its cost,what part of the pricing strategy is involved with setting prices of these luxury items?

The strategy of setting a single price for two or more units is known as

Zach is opening a tire store.He intends to set the price of tires based on determining the total cost of his purchase of one tire and then adding an amount to cover additional costs and profits.Zach is using ___ pricing.

Destiney is opening Destiney's Soul Food Restaurant.She has determined what it costs to produce each dish on the menu,how much overhead she must include in the menu item price,and other costs associated with producing each meal.After doing these computations,she visits several neighboring restaurants and reviews their menus.She returns to her business and prices her menu items similar to the competitors' prices.What type of pricing strategy is she using?