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Chapter 14 - Developing and Pricing Goods and Services
261. The job performed by brand managers:
A. is mainly concerned with the promotion of the entire product mix of their firm.
B. involves broad responsibilities for the marketing of a specific brand or product line.
C. is likely to become less important in firms that utilize the Internet.
D. focuses more on the pricing and promotion of established goods than on the
development of new products.
Feedback: Brand managers have responsibility for the entire marketing mix for a given brand
or product line. This responsibility includes overseeing the development of products as well
as decisions about placement, pricing, and promotion.
262. The New Era Cap Company of Buffalo, New York, understands the importance of
_______________. In the mid-1990s, the company’s products became very popular when
film director Spike Lee requested a red Yankees cap, instead of the traditional blue cap. It
did not take long for Yankees’ fans who were also fans of Spike Lee to want to wear a
similar cap.
A. brand equity
B. viral marketing
C. brand association
D. marketing parity
Feedback: Brand association means utilizing a celebrity to endorse your product or service.
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274. ___________ is the stage of new product development that involves promoting a
product to distributors, and developing advertising and sales campaigns in order to
generate and maintain consumer interest.
A. Commercialization
B. Brand identification
C. Product differentiation
D. Merchandising
275. The greatest source of ideas for new products is:
A. consumer suggestions.
B. suggestions from competitors.
C. employee ideas.
D. research and development.
Feedback: The number one source of ideas for new industrial products has been company
sources (e.g., employees) other than research and development. Employees are also a major
source for new consumer goods ideas. Firms also receive new product ideas from their
suppliers.
276.
Chapter 14 - Developing and Pricing Goods and Services
Product screening is designed to:
A. shorten the product life cycle.
B. reduce the number of new-product ideas being worked on at any one time.
C. reduce the time involved in new-product development.
D. move production to low wage countries.
Feedback: Product screening is designed to reduce the number of new-product ideas being
worked on at any one time.
277. Which of the following is a relevant criterion for the product screening process?
A. sales forecasts for the product
B. production capacity of competitors
C. profit potential
D. the stage of the product life cycle
Feedback: Criteria needed for product screening include whether the product fits in well with
present products, profit potential, marketability, and personnel requirements.
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288. According to the product life cycle model, profits tend to:
A. remain relatively constant until the decline stage, when they begin to drop.
B. reach a peak near the end of the maturity stage.
C. rise rapidly during the market preference stage.
D. peak before sales reach their highest level.
289. The product life cycle model helps marketers realize that:
A. consumers are always ready to try a new product if it is priced correctly.
B. different stages in the life cycle call for different marketing strategies.
C. sales and profit levels can be forecasted accurately.
D. careful product screening will increase profits over the life of a product.
290. Which of the following is a stage in the product life cycle?
A. commercialization
B. decline
C. peak
D. acceptance
291.
Chapter 14 - Developing and Pricing Goods and Services
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As a product progresses through each stage of the product life cycle, successful marketers
recognize that each stage requires:
A. a different marketing strategy.
B. a consistent application of fundamental marketing practices.
C. an increase in the amount spent on advertising.
D. more emphasis on personal selling.
292. When reviewing the product life cycle model, it is important to remember that:
A. although all products go through each stage of the life cycle, the time frame can vary
considerably from one product to another.
B. it is a theoretical model that may not be followed by all products.
C. the maturity stage accounts for the fastest growth in sales.
D. companies earn their largest profits in the introduction stage.
Feedback: Not all products follow the life cycle, and particular brands may act differently.
For example, while frozen foods as a generic class may go through the entire cycle, one brand
may never get beyond the introduction stage.
293.
Chapter 14 - Developing and Pricing Goods and Services
14-95
Once a good or service nears the end of its product life cycle, the firm recognizes that:
A. it is impossible to revert to an earlier stage of the model.
B. it can return to an earlier stage through creative marketing.
C. it will enjoy relatively high profits.
D. marketing dollars spent now will provide little benefit.
Feedback: Through creative marketing, a product can revert to a previous stage of the product
life cycle. A good example of this is Arm & Hammer Baking Soda.
294. Which stage of the product life cycle is characterized by rapidly rising sales, very high
profit levels, and a growing number of competitors?
A. growth
B. maturity
C. saturation
D. decline
Feedback: Figure 14.6 shows that all of these factors tend to characterize a product in the
growth stage of its product life cycle.
295.
Chapter 14 - Developing and Pricing Goods and Services
14-96
Which of the following is expected during the maturity stage of a product life cycle?
A. a rapid increase in profits
B. a rapid increase in the number of competitors
C. peak sales
D. reduced emphasis on promoting the product's brand name
Feedback: As shown in Figure 14.6, during the maturity stage of the product life cycle sales
reach their peak.
296. Which of the following is consistent with the introduction stage of the product life
cycle?
A. decreasing sales volume
B. large number of competitors
C. low profit levels or a potential loss
D. minimum use of advertising
Feedback: Profits are likely to be low in the introduction stage, and the company may actually
experience a loss in the early part of this stage. However, assuming the product becomes
successful and promotional efforts inform potential consumers of the benefits of the product,
sales volume and profits should grow.
297.
Chapter 14 - Developing and Pricing Goods and Services
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During the ________ stage of the product life cycle sales reach a peak, profits are
declining, and the number of competitors starts to decrease.
A. growth
B. maturity
C. saturation
D. decline
Feedback: Figure 14.6 suggests all of these are characteristics of the maturity stage of the
product life cycle.
298. Which of the following is consistent with the growth stage of the product life cycle?
A. a peak in the sales curve
B. high profit levels
C. a stable number of competitors
D. declining profits
Feedback: During the growth stage of the product life cycle sales are rapidly rising; there are
very high profits and a growing number of competitors.
299.
Chapter 14 - Developing and Pricing Goods and Services
Which of the following is a characteristic of the decline stage of the product life cycle?
A. falling sales
B. price reductions
C. many new firms entering the market
D. increasing profits
Feedback: During the decline stage of the product life cycle falling sales and profits cause
competitors to look for "greener grass." Prices may actually increase.
300. With a looming recession in 2008, department store owner Richard A. Baker decided
to make a gutsy move with his high-end, Lord & Taylor Stores™. Rather than focus on
the upscale, luxury market that the store attracted earlier in the decade, he focused on
bringing in clothing with more mass appeal. The stores succeeded in turning around
downward trending sales, ending 2010 up by 10%. In conjunction with your
understanding of the product life cycle, which of the following statements summarizes the
marketing strategy?
A. Lord & Taylor recognized that it was not competing well with its traditional higher
income market. It decided to change its product offering and price to appeal to a broader
market and increase sales and profits.
B. Lord & Taylor stores recognized several markets that it could reach with its upscale
clothing lines.
C. Lord & Taylor positioned itself against, rather than with, the competition. It decided to
adhere to its price leadership position.
D. Lord & Taylor knew that in order to re-invent itself, it was going to have to practice the
same marketing strategy followed by Walmart and other discount stores. It would make
all marketing decisions based on cost. The price on an item need only exceed what it cost
to make and ship it. Falling prices became the norm.
Feedback: When sales and profits begin to peak and drop off, products and services may have
reached maturity, and it is time to reevaluate the 4 Ps and consider what differentiates the
product to attract different market segments.
