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Exam 14: Developing and Pricing Goods and Services

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Question 171

Multiple Choice

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When consumers calculate the value of a product, they:

A) subtract the cost of production from the market price.
B) eliminate all nontangible elements that might affect their perception of the product.
C) look at the benefits the product provides then subtract the cost.
D) identify the variable and the fixed components of the product's benefits.

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

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Question 172

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Gill's Gadgets establishes the price it charges for its products by determining the cost of production and then adding on a desired profit margin. Gill's strategy is known as target costing.

A) True
B) False

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Question 173

Multiple Choice

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From the buyer's perspective, which of the following is a benefit of a product with a well-known brand name?

__________ involves designing a product so that it satisfies customers and meets the profit margins desired by the firm.

Computers, copiers, and fax machines used by businesses would be classified as:

The key to demand-oriented pricing is the recognition that not all producers face the same costs of production.

Brand names can significantly impact consumer perceptions of a product.

Whether a consumer thinks a product provides the best value depends upon:

The Spotlight on Small Business box showed us through the example of Randy Hetrick's TRX Suspension Trainer that in order to remain successful, sometimes expanding the product mix is essential.

Target costing adds a profit margin to estimated cost of production to determine the optimal price.

In marketing today, packaging carries the added responsibility of:

According to the Adapting to Change box, a social media presence isn't needed for small businesses to connect with customers.

A __________ is a name, symbol, or design (or combination of these) that identifies the goods or services of one seller or group of sellers and distinguishes them from those of competitors.

Soprano Manufacturing acquired several pieces of expensive heavy machinery it intends to use in its operations. As an industrial good, this heavy machinery represents:

A brand that has been given exclusive legal protection, such as the McDonald's golden arches, is a:

Virtual Electronics is considering a strategy to charge a very high introductory price for their automobile video theater. After identifying that their rival firms did not carry this new product, they chose this pricing strategy to achieve maximum profits. Virtual Electronics has chosen a ________ strategy.

One way a small firm can succeed against larger competitors is to:

_________ uses price points to establish prices that help create the impression that the product is less expensive than it is.

Costs incurred regardless of the number of units of a product that are produced or sold are called:

Nonbranded products that sell below the price of national brands, have very basic packaging, and are backed with little or no advertising are called: