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Exam 14: Developing and Pricing Goods and Services

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Question 41

Multiple Choice

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Products that are used in the production of other goods and services are called ________ goods.

A) specialty
B) shopping
C) industrial
D) sponsored

E) All of the above
F) A) and D)

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Question 42

Multiple Choice

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The number of units of a product that must be sold for total revenue to equal total costs is called the:

A) equilibrium volume.
B) balanced quantity.
C) contribution margin.
D) break-even point.

E) A) and B)
F) A) and C)

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Question 43

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

Although their names are similar,brand loyalty and brand equity are unrelated.

When consumers calculate the value of a product,they:

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 is 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 feels its target market is more concerned with perceived quality than actual product cost.They also feel that the newness of this concept offers an opportunity to make high profits since they are the first firm to enter this market,so they face no direct competition.Their decision to charge a high price is consistent with the ________ strategy.

Variable costs are costs that change with the level of production.

McDonald's prides itself on offering precisely the same menu around the world so that customers know exactly what to expect when they eat at a McDonald's.

__________ goods and services represent those products that consumers are unaware of or haven't thought of buying.

Small firms often rely on non-price competition when competing against larger firms.

Budd's Floral Shoppe is located in a large town that has several other florists.The owner,Rose Budd,is likely to find that the presence of many larger competitors means that the only way she can survive is to charge rock bottom prices.

What does a break-even point of 100 units mean to a firm?

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

When consumers decide to purchase a particular product,they:

Federated Grocery Stores operates a large chain of stores across several mid western states.While Federated doesn't actually produce any canned foods,it markets a line of foods under its own brand name that were actually produced by another company.Federated canned foods represent a:

An advertisement for the Xerox Corporation encourages customers to say,"Copy it" rather than "Xerox it".This indicates that Xerox is fearful that its brand name might become a(n) :

Today,packaging is:

Most consumers view specialty goods as having a variety of acceptable substitutes.

The two types of industrial goods are production goods and unsought goods.

A shopping good for one consumer could be a specialty good for another consumer.