Question 1

Customers today want separate prices for each service element and they also want the right to select the elements they want. The customers are said to be pressing for _____ services.

Question options:

a) complementary

b) perishable

c) variable

d) unbundled

Question 2

The zone of __________ is a range where a service dimension is deemed satisfactory, anchored by the minimum level consumers are willing to accept and the level they believe can and should be delivered.

Question options:

a) immunity

b) tolerance

c) reliability

d) assurance

Question 3

Services high in __________ qualities have characteristics that the buyers can evaluate before purchase.

Question options:

a) search

b) experience

c) credence

d) privacy

Question 4

Companies may wish to implement a(n) __________ to achieve more growth, to realize higher margins, or simply to position themselves as full-line manufacturers.

Question options:

a) up-market stretch

b) rebranding plan

c) outsourcing strategy

d) disintermediation policy

Question 5

How a consumer shops for organic foods and how he or she uses and disposes of the product is part of the consumers’ __________ that is important for marketers to consider.

Question options:

a) value proposition

b) consumption system

c) value system

d) quality perception

Question 6

The way the user performs the tasks of getting and using products and related services is the user’s total _____ system.

Question options:

a) consumption

b) consumable

c) consistent use

d) augmented

Question 7

A customer judges a product offering by three basic elements: product features and quality, services mix and quality, and:

Question options:

a) performance.

b) utility.

c) tangibility.

d) price.

Question 8

A consumer products firm manufactures and sells over 200 different sizes and varieties of jams and jellies. We can say that this manufacturer’s product mix has high:

Question options:

a) consistency.

b) depth.

c) intensity.

d) range.

Question 9

Josh gets his bike serviced at Dean’s Garage even though there’s another garage much closer to home. He prefers Dean’s because the work is usually done quickly and the staff tries to solve the issues with the bike as soon as possible. Dean’s Garage excels at which of the following five determinants of service quality?

Question options:

a) Reliability

b) Responsiveness

c) Assurance

d) Empathy

Question 10

Marketers have traditionally classified products on the basis of three characteristics: __________, tangibility, and use.

Question options:

a) availability

b) affordability

c) aesthetics

d) durability

Question 11

Regular maintenance and repair costs are known as _____ costs.

Question options:

a) service contract

b) out-of-pocket

c) fixed

d) facilitating services

Question 12

Cocktail lounges in restaurants are examples of:

Question options:

a) differential pricing.

b) cultivating nonpeak demand.

c) complementary services.

d) reservation systems.

Question 13

Which of the following is an example of a hybrid service?

Question options:

a) Teaching

b) Car

c) Restaurant meal

d) Soap

Question 14

Which of the following is a benefit of product mapping?

Question options:

a) Studying market matrices

b) Integrating target markets

c) Identifying market segments

d) Educating consumers

Question 15

The __________ of the product mix refers to the total number of items in the mix.

Question options:

a) width

b) length

c) depth

d) breadth

Question 16

Capital items are long-lasting goods that facilitate developing or managing the finished product. They include two groups:

Question options:

a) installations and natural products.

b) installations and component materials.

c) installations and operating supplies.

d) installations and equipment.

Question 17

Unlike physical products, services cannot be seen, tasted, felt, heard, or smelled before they are bought. This is known as the __________ aspect of services.

Question options:

a) inseparability

b) intangibility

c) variability

d) perishability

Question 18

Services high in __________ qualities are those services that have characteristics the buyer normally finds hard to evaluate even after consumption.

Question options:

a) trial

b) search

c) experience

d) credence

Question 19

The __________ rates the various elements of the service bundle and identifies required actions.

Question options:

a) company performance analysis

b) voice of customer measurement

c) customer factor measurement

d) importance-performance analysis

Question 20

Industrial goods can be classified as __________, capital items, or suppliers and business services based on their relative cost and how they enter the production process.

Question options:

a) service components

b) sub-assemblies

c) accessories

d) materials and parts

Lesson 7 Exam

Question 21

In __________ pricing, the firm bases its price largely on competitors’ prices.

Question options:

a) going-rate

b) auction-type

c) markup

d) target-return

Question 22

__________ price refers to what the consumers feel the product should cost.

Question options:

a) Fair

b) Typical

c) Usual discounted

d) List

Question 23

While shopping at the mall, Jane is asked by one of the sales representatives at the cosmetics counter to try out a new lipstick that her company is test marketing. The company representative asks her how much she would be willing to pay for the lipstick. After trying it out, Jane is of the opinion that $5 is just the right price for it. What type of a reference price is Jane using?

Question options:

a) Usual discounted price

b) Fair price

c) Maximum retail price

d) Last price paid

Question 24

Which of the following is the first step in setting a pricing policy?

Question options:

a) Selecting a pricing method

b) Selecting the pricing objective

c) Determining demand

d) Estimating cost

Question 25

A firm that is plagued with overcapacity, intense competition, or changing wants would do better if it pursues __________ as its major objective.

Question options:

a) market skimming

b) product-quality leadership

c) survival

d) profit maximization

Question 26

__________ auctions let would-be suppliers submit only one bid; they cannot know the other bids.

Question options:

a) Descending bid

b) Sealed-bid

c) English

d) Dutch

Question 27

When consumers examine products, they often compare an observed price to an internal price they remember. This is known as a(n) __________ price.

Question options:

a) markup

b) reference

c) market-skimming

d) accumulated

Question 28

Deducting the desired profit margin from the price at which a product will sell, given its appeal and competitors’ prices, is known as:

Question options:

a) overhead costing.

b) target costing.

c) activity based costing.

d) benefit analysis.

Question 29

The key to perceived-value pricing is to:

Question options:

a) reengineer the company’s operations.

b) deliver more unique value than competitors.

c) adopt subtle marketing tactics compared to competitors.

d) deliver more value but at a lower cost.

Question 30

Which of the following is TRUE regarding price elasticity?

Question options:

a) The higher the elasticity, the lesser is the volume growth resulting from a 1 percent price reduction.

b) Within the price indifference band, price changes have little or no effect on demand.

c) If demand is elastic, sellers will consider increasing the price.

d) Price elasticity does not depend on magnitude and direction of the contemplated price change.

Question 31

Many consumers are willing to pay $100 for a perfume that contains $10 worth of scent because the perfume is from a well-known brand. What kind of a pricing is the company depending on?

Question options:

a) Going-rate pricing

b) Image pricing

c) Market-skimming pricing

d) Target pricing

Question 32

A manufacturer has invested $750,000 in a new product and wants to set a price to earn a 15 percent ROI. The cost per unit is $18 and the company expects to sell 50,000 units in the first year. Calculate the company’s target-return price for this product.

Question options:

a) $20.25

b) $18.23

c) $18.10

d) $20.70

Question 33

__________ cost is the cost per unit at that level of production.

Question options:

a) Target

b) Average

c) Marginal

d) Opportunity

Question 34

When a company introduces a product at a very high price and then gradually drops the price over time, it is pursuing a __________ strategy.

Question options:

a) market-penetration pricing

b) market-skimming pricing

c) value-pricing

d) switching cost

Question 35

The decline in the average cost of production with accumulated production experience is called the:

Question options:

a) demand curve.

b) supply chain.

c) learning curve.

d) value chain.

Question 36

If demand changes considerably with a small change in price, the demand is said to be:

Question options:

a) unit elastic.

b) elastic.

c) inelastic.

d) marginal.

Question 37

Costs that differ directly with the level of production are known as _____ costs.

Question options:

a) fixed

b) overhead

c) opportunity

d) variable

Question 38

A market-penetration pricing strategy is most suitable when:

Question options:

a) a low price slows down market growth.

b) production and distribution costs fall with accumulated production experience.

c) a high price dissuades potential competitors from entering the market.

d) the market is characterized by inelastic demand.

Question 39

Companies that believe that a higher sales volume leads to lower unit costs and higher long-run profits are attempting to:

Question options:

a) maximize their market share.

b) skim the market.

c) become a product-quality leader.

d) merely survive in the market.

Question 40

A company must make payments each month for rent, heat, interest, and salaries. These are _____ costs.

Question options:

a) total

b) fixed

c) variable

d) opportunity