208. A variation of an existing product, such as freeze-dried coffee, is an example of product imitation.
a. True
b. False
209. Entirely new products are innovations.
a. True
b. False
210. Innovations are much less common than imitations and adaptations.
a. True
b. False
211. Screening ideas for feasibility is the first stage of the new product development process.
a. True
b. False
212. A brand mark is the part of a brand that consists of a symbol or distinctive design.
a. True
b. False
213. A trademark is legally protected from use by anyone except its owner.
a. True
b. False
214. Texaco, Exxon, and Ford are examples of a store brand.
a. True
b. False
215. Craftsman and Kenmore are examples of a store brand.
a. True
b. False
216. Even if a grocery item is a generic product, a consumer can tell who produced it by examining the package
carefully.
a. True
b. False
217. Generic brands are becoming more popular with today’s price-conscious shoppers.
a. True
b. False
218. Brands help reduce a consumer’s perceived risk of purchase.
a. True
b. False
219. The three levels of brand loyalty are preference, recognition, and insistence.
a. True
b. False
220. Brand equity refers to making all of a company’s brands approximately equal with respect to brand loyalty.
a. True
b. False
221. Aspirin, yo–yo, and escalator were all brand names at one time.
a. True
b. False
222. The branding strategy in which a firm uses the same brand for all or most of its products is called individual
branding.
a. True
b. False
223. A name, term, symbol, design, or any combination of these that identifies a product and distinguishes it from a
competitor’s product is called packaging.
a. True
b. False
224. Packages have marketing value but no functional value.
a. True
b. False
225. A product cannot perform its function if it is priced incorrectly.
a. True
b. False
226. Price is the amount of money a seller is willing to accept in exchange for a product, at a given time and under given
circumstances.
a. True
b. False
227. Price allocates goods and services among those who are willing and able to pay for them.
a. True
b. False
228. Price competition occurs when a seller makes its product stand out from the competition by distinctive product
quality and customer service.
a. True
b. False
229. The same price will be charged no matter what pricing objective is used.
a. True
b. False
230. Management must set pricing objectives based on the primary objective of making a profit.
a. True
b. False
231. Some pricing objectives include surviving, maximizing profit, obtaining market-share goals, and maintaining status
quo.
a. True
b. False
232. The price floor is the lowest price at which a producer can sell its product without incurring a loss.
a. True
b. False
233. Because markup pricing is difficult to use, few retailers and wholesalers use it.
a. True
b. False
234. A major reason why retailers use markup pricing is because it is easy to apply.
a. True
b. False
235. Markup pricing is easy to apply, although it is difficult to determine an effective markup percentage.
a. True
b. False
236. The breakeven quantity is the number of units that must be sold to equal the projected total revenue for the period.
a. True
b. False
237. Costs incurred regardless of how many units of a product are produced or sold are called fixed costs.
a. True
b. False
238. Fixed costs are costs that depend on the number of units produced.
a. True
b. False
239. Costs that depend on the number of units produced are called variable costs.
a. True
b. False
240. The sum of the fixed costs and the variable costs attributed to the units produced is the selling price.
a. True
b. False
241. Competition-based pricing is important if competing products are similar and the organization is serving markets in
which price is the crucial variable of the marketing strategy.
a. True
b. False
242. One of the major dangers of competition-based pricing is that it often results in price wars.
a. True
b. False
243. Pricing strategies act as guides for achieving pricing objectives.
a. True
b. False
244. The strategy of charging the highest possible price for a product during the introduction stage of its life-cycle is
called price skimming.
a. True
b. False
245. The strategy of developing a large market share for a new product by setting a very low price is called penetration
pricing.
a. True
b. False
246. Differential pricing means different buyers pay different prices for the same quality and quantity of a product.
a. True
b. False
247. Manufacturers, wholesalers, and retailers do not use negotiated pricing strategies.
a. True
b. False
248. An early-bird special offered by a restaurant during off-peak hours is an example of a secondary-market pricing
strategy.
a. True
b. False
249. Random discounting is often predictable so consumers wait to make purchases until they can benefit from the price
reductions.
a. True
b. False
250. Psychological pricing strategies encourage purchases to be based on economically rational responses rather than on
emotional responses.
a. True
b. False
251. Odd-number pricing is limited to low–priced items.
a. True
b. False
252. A price of $5.95 for a product would fall into the category of odd-number pricing.
a. True
b. False
253. Multiple-unit pricing is packaging together two or more complementary products and selling them for a single price.
a. True
b. False
254. In some cases, prices are assigned to goods on the basis of nothing more than customs and traditions.
a. True
b. False
255. Three types of product-line pricing are price leaders, special-event pricing, and comparison discounting.
a. True
b. False
256. A men’s clothing store sells ties only at $20 and $35. This type of pricing strategy is known as price lining.
a. True
b. False
257. Setting prices for organizational buyers is very similar to setting prices for consumers.
a. True
b. False
258. The legality of uniform geographic pricing has been challenged and so its use has been abandoned.
a. True
b. False
259. Pricing whereby the buyer absorbs all or part of the freight costs is freight absorption pricing.
a. True
b. False
260. A trade discount is the price producers set to draw the public’s attention to new products.
a. True
b. False
261. Seasonal discounts provide price incentives to customers during peak selling seasons.
a. True
b. False