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39) A company may choose a skimming strategy during the introduction stage of its product to
help recover costs of development and to
A) capitalize on the price insensitivity of early buyers.
B) discourage competition from other manufacturers.
C) ease the product into its maturity stage.
D) gain the largest unit sales possible.
E) gain more distribution outlets.
40) 3M is a master of the ________ pricing strategy, which uses a high initial price for a new
product.
A) penetration
B) cost-plus
C) ROI
D) market-oriented
E) skimming
41) All of the following are true about a skimming pricing strategy when used during the
introduction stage of the product life cycle except which?
A) It capitalizes on the price insensitivity of early buyers.
B) It typically results in high profit margins.
C) It encourages competitive entrants into the market.
D) It recovers the R&D costs of the new offering.
E) It helps build unit volume.
42) Xerox pioneered the first portable fax machine. In 1980, the price was $12,700. Xerox used
a(n) ________ pricing strategy to help recover its research and development costs.
A) penetration
B) cost-plus
C) skimming
D) target ROI
E) above-market
43) During the introduction stage of the product life cycle, the strategy that discourages
competitive entry by charging a low price for a new product is referred to as ________ pricing.
A) penetration
B) cost-plus
C) target ROI
D) below-market
E) skimming
44) Xunrui Communications is an upstart maker of inexpensive smartphones for the Chinese
market. Xunrui purchases the components, and assembles the phones in Shenzhen, located in
southern China. These smartphones retail for about $65, significantly less than the $250 to $800
for smartphones marketed by Apple or Samsung, the top providers. Xunrui Communications
most likely is using which pricing strategy in this example?
A) penetration pricing
B) cost-plus pricing
C) target ROI pricing
D) above-market pricing
E) skimming pricing
45) Which of the following statements about the introduction stage of the product life cycle is
most accurate?
A) If a firm's product is especially good, efforts should be made to create selective demand rather
than primary demand to allow the firm to distinguish itself from competitors.
B) During the introduction stage, it is best to avoid a skimming pricing strategy.
C) During the introduction stage, it is best to avoid a penetration pricing strategy.
D) A firm should introduce the identical product at several different price points in order to
gauge customer price sensitivity.
E) Because of large initial investment costs, overall industry profits often are initially negative.
46) The Tesla Motors Model S, an all-electric-powered automobile, is in which stage of its
product life cycle?
A) growth
B) maturity
C) introduction
D) decline
E) accelerated development
47) Sony sells a 75" XBR-X940D television with 4K resolution, HDR support, Android TV
interface with a multitude of apps, and a premium direct LED lighting system. This Sony TV is
in which stage of its product life cycle?
A) introduction
B) growth
C) maturity
D) decline
E) harvest
48) LED (light-emitting diode) lightbulbs, such as the Cree LED bulb, have been available for
only a few years in low lighting levels (lumens). They are designed to replace incandescent and
compact fluorescent lightbulbs, in part because of a federal law that phases out incandescent
lightbulbs in favor of more energy-efficient ones. LED bulbs are more expensive but will last up
to 20 years. In what stage of the product life cycle is this product?
A) growth stage
B) decline stage
C) accelerated development stage
D) introduction stage
E) maturity stage
49) Imagine that Eveready has developed solar rechargeable batteries that cost only slightly more
to produce than the rechargeable batteries currently available. These solar batteries can be
recharged by sunlight up to five times, after which they must be discarded. Unfortunately, the
production process cannot be patented, so competitors could enter the market within a year.
Which of the following would be the least sound marketing program decision?
A) Select a skimming pricing strategy to position the product as "premium."
B) Seek widespread distribution to gain a foothold in what might be a potentially huge market.
C) Limit production capacity until you are certain consumers will actually want the product.
D) Avoid a connection to the Eveready brand until the product has proven itself.
E) Use multiple brand names to discourage other competitors from entering the market.
50) The ________ stage of the product life cycle is characterized by rapid increases in sales.
A) introduction
B) growth
C) maturity
D) decline
E) harvest
51) The appearance of competitors often signals the beginning of the ________ stage of the
product life cycle.
A) decline
B) maturity
C) introduction
D) growth
E) harvest
52) At which stage in the product life cycle do industry profits usually peak?
A) introduction
B) growth
C) maturity
D) decline
E) accelerated development
53) Which of the following is a characteristic of the growth stage of the product life cycle?
A) Advertising emphasis switches to selective demand.
B) A growing proportion of trial purchases come from brand loyal users.
C) Product features remain unchanged.
D) Profit margins increase as sales increase.
E) The product is sold in a narrowly selected number of retail outlets.
54) People who tried a product, were satisfied, and bought it again are called ________
purchasers.
A) frequent
B) recurring
C) customary
D) habitual
E) repeat
55) Men who tried the Gillette Fusion razor were so satisfied with it that 60 percent of them
adopted the product permanently. Men who bought again are known as ________ purchasers.
A) repeat
B) routine
C) cyclical
D) established
E) habitual
56) During the ________ stage of the product life cycle, product proliferation occurs as
competitors attempt to differentiate their company's brand from others.
A) introduction
B) growth
C) maturity
D) stability
E) development
57) In which stage of the product life cycle is it important to broaden distribution of the product?
A) introduction
B) growth
C) maturity
D) decline
E) harvest
58) Which of the following is a characteristic of the growth stage of the product life cycle?
A) Advertising emphasis switches to primary demand.
B) The proportion of repeat purchasers to initial purchasers grows.
C) The number of distribution outlets shrinks due to growing inefficiencies.
D) Profit margins increase as sales increase.
E) No new product features are added to maximize profits.
59) Which of the following is a characteristic of the growth stage of the product life cycle?
A) Advertising emphasis switches to primary demand.
B) The proportion of initial purchasers to repeat purchasers grows.
C) New or modified product features are added.
D) Profit margins increase as sales increase.
E) There are a limited number of retail outlets for greater quality control.
60) Apple launched its iPad in 2010 and it, along with its companion iPad mini, have become the
world's best-selling tablet devices with their multitouch user interfaces and the availability of
hundreds of thousands of apps. The product class has experienced tremendous growth in terms of
sales and the addition of formidable competitors such as Samsung Galaxy, Dell Venue, and
Lenovo Tab, all vying for market share. In which stage of the product life cycle are the iPad and
other tablets?
A) maturity stage
B) commercialization stage
C) accelerated development stage
D) growth stage
E) introduction stage
61) Electric automobiles like the Chevrolet Spark made by General Motors are in the
introductory stage of the product life cycle. By comparison, 3D printers such as the LulzBot
Mini are in the ________ of the product life cycle.
A) decline stage
B) commercialization stage
C) accelerated development stage
D) growth stage
E) introduction stage
62) The ________ stage of the product life cycle is characterized by the slowing of total industry
sales or product class revenue, causing marginal competitors to begin leaving the market.
A) decline
B) maturity
C) introduction
D) growth
E) deceleration
63) In which stage of the product life cycle do marginal competitors begin to leave the market?
A) introduction
B) growth
C) decline
D) maturity
E) harvest
64) At what stage of the product life cycle does it first become true that most consumers who
would buy a product are either repeat purchasers of the item or have tried and abandoned it?
A) introduction
B) growth
C) maturity
D) decline
E) harvest
65) During the maturity stage of the product life cycle, profit declines primarily because
A) there are fewer and fewer competitors in the market.
B) promotional expenditures increase.
C) production costs increase the more a firm has to manufacture the same product.
D) there is fierce price competition among sellers.
E) more consumers enter the market seeking bargains.
66) Promotional expenses at the maturity stage of the product life cycle are often designed to
A) convince those who have abandoned the brand to try it again.
B) maintain market share.
C) create a sense of nostalgia.
D) attract more price-conscious consumers.
E) thwart the growing number of competitors that have entered the market.
67) Which of the following statements regarding the maturity stage of the product life cycle is
most accurate?
A) Technological forces often push a product from the introduction stage to the maturity stage.
B) During the maturity stage, companies add more distribution outlets to maximize target market
coverage.
C) Sales increase at a slower rate as fewer new buyers enter the market.
D) Industry profits peak because production and distribution costs are declining.
E) Total industry profits exceed total industry sales.
68) At the maturity stage of the product life cycle, marketing emphasis
A) is directed toward generating more consumer awareness.
B) switches to finding more channel intermediaries to carry the product.
C) focuses on stimulating primary demand for the product.
D) aims to hold market share through further product differentiation and finding new buyers and
uses.
E) is redirected, with salespeople allocating less time to selling the product.
69) At which stage of the product life cycle is a company likely to have its most complete
product line?
A) introduction
B) growth
C) maturity
D) decline
E) accelerated development
70) Which of the following is an example of a product in the maturity stage of the product life
cycle?
A) pocket video cameras
B) driverless vehicles
C) 3D HDTVs
D) carbonated soft drinks
E) tablet devices
71) At which stage of the product life cycle are microwave ovens?
A) introduction
B) growth
C) maturity
D) decline
E) redevelopment
72) Sales exhibit a downward trend throughout which stage of the product life cycle?
A) introduction
B) growth
C) maturity
D) decay
E) decline
73) Which of the following occurs during the decline stage of the product life cycle?
A) Sales drop.
B) Flanking product lines are added.
C) The product becomes less vulnerable to changes in the marketing environment.
D) Promotional support is increased.
E) Competition becomes intense as more competitors enter the market.
74) Which of the following statements about the decline stage of the product life cycle is most
accurate?
A) Somewhat paradoxically, in the decline stage, sales decline even though profits increase.
B) A product always enters the decline stage as the result of a major product flaw or marketing
misstep.
C) A major reason that a firm's product enters the decline stage is as a result of changes in the
environment.
D) The only real step that can be taken to avoid the decline stage and ultimately extinction is to
increase marketing expenditures as soon as the product enters its maturity stage.
E) Service industries are exempt from the decline stage because of their intangible nature.
75) In terms of its effect on faxing, e-mail has
A) led to a significant number of improvements in fax machine technology to keep the product
class competitive.
B) led to a significant decrease in fax machine sales because e-mail better suits the needs of the
business community.
C) led to a significant increase in fax machine purchases due to distrust of e-mail spam.
D) only a modest impact since the two technologies do not directly compete with each other.
E) caused most fax machine manufacturers to incorporate new Internet technology to send,
receive, and print e-mails through a wireless connection to a personal computer.
76) Products tend to consume a disproportionate share of management and financial resources
relative to their future worth throughout which stage of the product life cycle?
A) innovation
B) growth
C) maturity
D) decline
E) harvest
77) Which of the following is an example of a product in the decline stage of the product life
cycle?
A) analog TVs
B) smartphones
C) 3D printers
D) health insurance
E) tablet devices
78) Desktop PCs are in which stage of their product life cycle according to the text?
A) accelerated downturn
B) cancellation
C) decline
D) maturity
E) devaluation
