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Exam 14: Developing and Pricing Goods and Services

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Question 91

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Mini-Case Gourmet Pets is an innovative competitor in the billion-dollar pet food industry. In fact, two of its products, Kitty Sirloin and McDog T-bone, each claim over a 30% share in their market segments. The company has done detailed research and discovered that, for a growing number of pet owners, the family pet serves as a baby substitute. These owners tend to pamper their pets, and are very discriminating in what they purchase. With this in mind, the company has put a great deal of effort into developing a new dog food: Prime Cuts. The new product is packaged in a resealable, microwaveable container and can be purchased in a variety of flavors (including Western BBQ, Teriyaki, Australian Outback, and Hickory Smoked) . Gourmet Pets promotes the product as far superior to "average" dog foods, even though the quality of meat and nutrient content of the food are virtually identical to many other brands. The company faces no competition in this market segment so it plans to charge a high price for the product. -Gourmet Pets hopes to use its special packaging and extensive advertising to create a perception in the minds of consumers that Prime Cuts is a superior product, even though the actual quality of meat used in the product is virtually no different from competing brands. The company is attempting to develop:

A) differential segmentation.
B) cognitive dissonance.
C) product differentiation.
D) pioneer marketing.

E) None of the above
F) A) and D)

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Question 92

Multiple Choice

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Attracting attention, describing contents, explaining benefits and identifying the uses of a product are all functions of:

A) target marketing.
B) UPCs.
C) packaging.
D) market segmentation.

E) B) and C)
F) C) and D)

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Question 93

Multiple Choice

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As a product progresses through each stage of the product life cycle, successful marketers recognize that each stage requires:

Successful marketing of convenience and specialty goods require different marketing mixes.

The purpose of a brand name is to establish an image of generic goods or services.

While the packaging of services has not yet captured the attention of businesses, technological improvements will likely create new opportunities.

Since Kazam Cleaners offers home and office cleaning services no different from competitors, the company cannot utilize a product differentiation strategy.

A traditional McDonald's and a McCafe are examples of the McDonald's Corporation product mix.

Barker Brothers Pens utilizes a strategy of low-priced pens to attract customers and discourage competition. This represents a _______ strategy.

Green Giant Green Beans, Chevrolet Corvette, Coca-Cola, Dole Pineapple, and Peter Pan Peanut Butter are all examples of:

The critical component of a total product offer is always a low price.

__________ is the process used to determine the profitability of a product at various levels of sales.

Ultimately, the price of a good is determined by the interaction of supply and demand in the marketplace.

Which of the following products would normally be classified as a shopping good or service?

While the product life cycle is a good theory, it's not important for marketers to recognize what life cycle stage a product is in.

Which of the following products would be considered an unsought good or service by a typical college student?

The term product line describes the combination of product mixes offered by a manufacturer.

Profits peak during the maturity stage of the product life cycle.

The formula for break-even analysis includes which of the following components?

The strategy of first determining what the market is willing to pay, then subtracting a desired profit margin to determine a desired cost of production is called: