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Intro to Business chapter 12

Everything one receives in an exchange, including all tangible and intangible attributes and expected benefits; it may be a good, is service, or an idea
Consumer product
A product purchased to satisfy personal and family need
Business product
A product bought for resale, for making other products, or for use in a firms operations
Convenience product
A relatively inexpensive, frequently purchased item for which buyers want to exert only minimal effort
Shopping product
A term for which buyers are willing to expend considerable effort and planning and making the purchase
Specialty product
An item that possesses one or more unique characteristic for which a significant group of buyers is willing to expend considerable purchasing effort
Raw material
The basic material that actually becomes part of a physical product; usually comes from mines, Forest, oceans, or recycled soil wastes
Major equipment
Large tools and machines used for production purposes
Accessory equipment
Standardize equipment used in the firms production or office activities
Component part
An item that becomes part of the physical product it is either a finished item ready for assembly or a product that needs little processing before assembly
Process material
A material that is used directly in the production of another product but is not readily identifiable in the finished product
An item that facilitates production and operations but does not become part of a finished product.
Business service
An intangible product that organization uses in its operations.
Product life-cycle
A series of stages in which a product’s sales revenue and profit increase, reached a peak, and then decline.
Introduction stage
Customer awareness and acceptance of the product are low. Sales rise gradually as a result of promotion and distribution activities.
Growth stage
Sales increase rapidly as consumers gain awareness of the product. Other firms have begun to market competing products.
Maturity stage
Sales are still increasing at the beginning, but the rate of increase has slowed.
Decline stage
Sales volume decreases sharply and profits continue to fall. The number of competing firms declines, and the only survivors in the marketplace or the firms that specialize in marketing the product.
Product line
A group of similar products the differ only in relatively minor characteristics.
Product mix
All the products a firm offers for sale.
Width of the mix
The number of product lines it contains.
Depth of the mix
The average number of individual products within each line.a
At least in United States, feminine hygiene products would likely be considered to be in the_________Stage of the product life cycle.
A. Maturity
B. Growth
C. Introduction
D. Decline
Procter & Gamble recently introduced new “odor-lock” technology for both liners and maxi pads in it’s Always product line. This would be classified as what type of change to the product mix?
A. Product modification
B line extension
C. Product deletion
D. Brand extension
Prell, ivory, and head and shoulders form a_______For Proctor and Gamble.
A. Brand name
B. Trademark
C. Product mix
D. Brand
E. Product line
When the Kindle, marketed by Amazon, first hit the market, it really was in a class all of its own. Buyers considered the Kindle to have distinguishable characteristics that made it unique. Due to this, the Kindle was able to use
A. Appropriate labeling
B line extension
C product modification
D price competition
E non-price competition
A set of attributes and benefits that have been carefully designed to satisfy the market while earning a profit for the seller is known as
A. Warranty
B. Product
C. Brand
D. Label
E. Market
Psychological pricing strategies include
A. Negotiated pricing
B. Periodic discounting
C. Price skimming
D. Price lining
E. Multiple-unit pricing
During which stage is the largest number of product ideas rejected?
A. Concept testing
B. Test marketing
C. Business analysis
D. Idea generation
E. Screening
Product modification
The process of changing one or more of a product’s characteristics
Quality modifications
Are changes that relate to a products dependability and durability and are usually achieved by alterations in the materials or production process.
Functional modifications
Affect it products versatility, effectiveness, convenience, or safety. They usually require redesign of the product.
Aesthetic modifications
Change the sensory appeal of a product by altering its taste, texture, sound, smell, or visual characteristics.
Line extension
Development of a new product that is closely related to one or more products in the existing product line but designed specifically to meet somewhat different customer needs.
Product deletion
The elimination of one or more products from a product line.
Are variations of existing products that are intended for an established market.
Are entirely new products.
Idea generation
Involves looking for product ideas that will help a firm to achieve its objectives.
Ideas that do not match organizational resources and objectives are rejected.
Concept testing
Is a phase in which a product idea is presented to a sample of potential buyers through a written or oral description (And perhaps drawings) to determine their attitudes and initial buying intentions.
A name, term, symbol, design, or any combination of these that identifies a seller’s products add distinct from those of other sellers.
Brand name
The part of a brand that can be spoken
Brand Mark
The part of a brand that is a symbol or distinctive design
A brand name or brand mark that is registered with the US patent and trademark office and thus is legally protected from use by anyone except its owner.
Trade name
The complete and legal name of an organization.
Manufacturer (or producer) brand
A brand that is owned by a manufacturer.
Store (or private) brand.
A brand that is owned by an individual wholesaler or retailer.
Generic product (or generic brand).
A product with no brand at all.
Brand loyalty.
Extent to which a customer is favorable toward buying a specific brand.
Brand equity.
Marketing and financial value associated with a brand’s strength in a market.
Individual branding.
This strategy in which a firm uses a different brand for each of its products.
Family branding.
The strategy in which a firm uses the same brand for all or most of its products.
Brand extension.
Using an existing brand to brand a new product in a different product category.
All of the activities involved in developing and providing a container with graphics for a product.
The presentation of information on a product or its package.
Express warranty.
A written explanation of the producers responsibilities in the event that a product is found to be defective or otherwise unsatisfactory.
One product can be classified as only a consumer product or a business product, not both.
A. True
B. False
Accessory items are often more expensive and require more negotiation the major equipment.
A. True
B. False
Product sales are starting to decline in the maturity stage of the product life cycle.
A. True
B. False
Sales volume decreases rapidly in the decline stage of the product life cycle.
A. True
B. False
New products of a company are much more common than line extension due to the lower cost of new products.
A. True
B. False
Packaging for a firms various products do not necessarily have to be related and similar.
A. True
B. False
The price of a product is the amount of money a seller is willing to accept in exchange for the product or service at a specific time.
A. True
B. False
The quantity demanded by consumers increase as the price of a product decreases.
A. True
B. False
Businesses use random discounting to appeal to long-time, loyal customers.
A. True
B. False
Walmart employees EDLP.
A. True
B. False
A good or service purchased to satisfy personal and family needs is a (n)______product.
A. Convenience
B. Shopping
C. Consumer
D. Industrial
E. Specialty
Based on their characteristics in use, business products can be classified into all the following categories except
A. Major equipment
B. Component parts
C. Specialty services
D. Raw materials
E. Process materials
For a computer manufacture why Dell or gateway, CPU chips, bus wires, and motherboards are
A. Process materials
B. Raw materials
C. Accessory equipment
D. Supplies
E. Component parts
Which of the following is not a stage in the product life cycle?
A. Growth
B. Maturity
C. Decline
D. Death
E. Introduction
A____________is a group of similar products that differ in only small ways.
A. Product mix
B. Store brand
C. Product line
D. Consumer product
E. Line extension
Product_________refers to changing one or more of a product characteristics.
A. Branding
B. Modification
C. Screening
D. Commercialization
E. Idea generation
Which of the following products is not included in the top 10 new products of the decade based on advertising age magazine 2009?
A. Activia
B. Mini Cooper
C. iPod
D. Wii
E. BlackBerry
A brandmark is
A. Owned by an individual wholeseller or retailer.
B. The part of a brand that is a symbol or distinctive design.
C. A brand that is owned by manufacturer.
D. The part of a brand that can be spoken.
E. Is always registered with the US patent and trademark office.
A major benefit of branding is brand loyalty.
A. True
B. False
The amount of money the seller is willing to accept in exchange for a product at a given time and under given circumstances.
Price competition
An emphasis on setting a price equal to or lower than a competitors price to gain sales or market share.
Non-price competition
Competition based on factors other than price.
Product differentiation
The process of developing and promoting differences between one’s product and all similar products.
Return on investment (ROI)
The amount earned as a result of financial investment
Market share
Is a proportion of total industry sales
The amount a seller adds to the cost of a product to determine its basic selling price
Breakeven quantity
The number of units that must be sold for the total revenue (from all units sold) to equal the total cost (of all units sold)
Total revenue
The total amount received from the sales of a product
Fixed cost
A cost incurred no matter how many units of product are produced or sold
Variable cost
A cost that depends on the number of units produced
Total cost
The sum of the fixed cost and the variable costs attributed to a product
Demand-based pricing
This method results in a higher price when product Demand is strong and a lower price when demand is weak
Price differentiation
A demand-based pricing method to use more than one price in the marketing of a specific product. Price differentiation can be based on such considerations as time of the purchase, type of the customer, or type of the distribution channel
Competition-based pricing
An organization considers cost and revenue secondary to competitors prices. The importance of this method increases if competing products are similar and the organization is serving markets in which price is the crucial variable of the marketing strategy
In the______stage of the product life cycle, customer awareness and acceptance is low.
A. Decline
B. Introduction
C. Growth
D. Development
E. Maturity
The FTC has established guidelines for price leader strategies that companies must abide by
A. True
B. False
The amount added to a product, above the total cost of the product, is called the markup
A. True
B. False
The business service is a tangible product
A. true
B. False
The product can actually be just an idea
A. True
B. False
A product can include intangible benefits along with the tangible benefits of the physical product
A. True
B. False
For most firms, the failure rate of a new product will be;
A. 10% to 20%
B. More than 50%
C. Between 30% and 40%
D. Less than 10%
E. Approximately 25%
A discount is the difference between the price of an item and the cost to produce the item
A. True
B. False
For many US families, soft drinks, bread, and gasoline are_____products
A. Convenience
B. Business
C. Industrial
D. Shopping
E. Specialty
Which of the following is not a type of discount used for business markets?
A. Allowance
B. Quantity
C. Temporary
D. Seasonal
E. Trade
Which of the following is considered a psychological pricing strategy?
A. Odd-number pricing
B. Random discounting
C. Periodic discounting
D. Negotiated pricing
E. Secondary-market pricing
The______stage of the product lifecycle is when industry profits decline and price competition increases.
A. Growth
B. Decline
C. Maturity
D. Development
B. Introduction
The groupings of consumer product categories is primarily divided based on
A. Characteristics of business’ purchasing behavior
B. Characteristics of buyer’ purchasing behavior
C. The time buyer spend in purchasing the service or product
D. Consumers’ ability to buy
E Buyers’ need for the item or service
In secondary-market pricing the price charged in the secondary market is often higher
A. True
B. False
_________Pricing is a primary type of new product pricing strategy.
A. Penetration
B. Negotiated
C. Secondary-market
D. Differential
E. Periodic discounting
All products progress through the product life cycle at approximately the same rate
A. True
B. False
Which of the following is least likely to be a packaging function?
A. Maintain functional form
B. Discourage shoplifting
C. Lessen the weight of the product
D. Prevent damage
E. Prevent tampering
Demand-based pricing results in a high price for the product when demand is high
A. True
B. False
When one unit in an organization sells a product to another unit, transfer pricing occurs
A. True
B. False
Price skimming
The strategy of charging the highest possible price for a product during the introduction stage of its life-cycle
Penetration pricing
The strategy of setting a low price for a new product
Negotiated pricing
Establishing a final price through bargaining
Secondary-market pricing
Setting one price for the primary target market and a different price for another market
Periodic discounting
Temporary reduction of prices on a patterned or systematic basis
Random discounting
Temporary reduction of prices on and unsystematic basis
Odd-number pricing
The strategy of sitting prices using odd numbers that are slightly below whole-dollar amounts
Multiple-unit pricing
The strategy of setting a single price for two or more units
Reference pricing
Pricing a product on a moderate level and positioning it next to a more expensive model or brand
Bundle pricing
Packaging together two or more complementary products and selling them for a single price
Every day low prices (EDLPS)
Setting a low-price for products on a constant basis
Customary pricing
Pricing on the basis of tradition
Captive pricing
Pricing the basic product in the product line low, but pricing related items at a higher level
Premium pricing
Pricing the highest-quality or most-versatile products higher than other models in the product line
Price lining
The strategy of selling goods only at certain predetermined prices that reflect definite price breaks
Price leaders
product priced below the usual markup, near cost, or below cost
Special-event pricing
Advertised sales or price cutting linked to a holiday, season or event
Comparison discounting
Setting a price at a special level and comparing it with a higher price
Transfer pricing
Prices charged in sales between an organizations units
The deduction from the price of an item
Trade discounts
Discounts taken off the list prices that are offered to marketing intermediaries or middlemen
Quantity discounts
Given to customers who buy in large quantities which makes sellers per-unit selling costs lower for larger purchases
Cash discounts
Offered for prompt payment
Seasonal discount
Price reduction to buyers who purchase out of season this discount encourages off-season sales and ensures steady production throughout the year
Reduction in price to achieve a desired goal. trade-in allowances, for example, are price reductions granted for turning in used equipment when purchasing new equipment

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