Chapter 12 Quiz by HC120704062559


									                                Introduction to Business
                                    Quiz I – Chapter 12
True-False Questions
Select the correct answer.
 1. Generally, the product life cycle consists of five stages: development, introduction, growth,
     maturity, and decline.
     a. True
     b. False
 2. A narrow product mix allows a firm to gain stability by concentrating on just a few markets.
    a. True
    b. False
 3. Innovations are much less common than imitations and adaptations.
    a. True
    b. False
 4. Some firms set an annual percentage ROI (return on investment) as their pricing goal.
    a. True
    b. False
 5. A store that sells all of its men’s gloves for $9.95 and $15.00 is practicing price lining.
    a. True
    b. False

Multiple-Choice Questions
Circle the letter before the most accurate answer.
 6. A consumer product for which buyers will expend effort or planning, that is purchased
    infrequently, and that is usually purchased only after being compared with competing
    products is a __________ product.
    a. luxury
    b. specialty
    c. convenience
    d. shopping
    e. business
 7. A group of similar products that differ only in relatively minor characteristics is called a
    a. product.
    b. product line.
    c. generic product.
    d. product differentiation.
    e. product mix.
 8. If a company needs to obtain cash quickly to pay its bills, it may opt for a pricing strategy
    that achieves which goal?
    a. Market share increase
    b. Status quo
    c. ROI target
    d. Maximization of profit
    e. Survival
 9. A manufacturer of cameras and film may price a camera at a low level to attract customers,
    but price the film at a relatively high price because customers must continue to purchase
    film in order to use their cameras. This type of pricing strategy is known as
    a. captive pricing.
    b. premium pricing.
    c. price lining.
    d. special-event pricing.
    e. customary pricing.
10. A “2/10, net 30” invoice feature is an example of a __________ discount.
    a. trade
    b. cash
    c. preferential
    d. uniform
    e. quantity

                                             Quiz II
True-False Questions
Select the correct answer.
 1. T F A product’s classification largely determines the appropriate marketing strategy.
 2. T F The most important element in the success of a branded product is consumers’
        confidence in the product.
 3. T F Price sensitivity is always considered “very important” to consumers in the target
 4. T F Competition-based pricing results in a high price when product demand is strong
        and a low price when demand is weak.
 5. T F Transfer pricing involves the sale of a product to another unit within the same

Multiple-Choice Questions
Circle the letter before the most accurate answer.
 6. All of the following are characteristics of the decline stage of the product life cycle except
    a. a sharp decrease in sales volume.
    b.   a decline in the number of competing firms.
    c.   increased consumer awareness of the product.
    d.   the removal of less profitable versions from the product line.
    e.   increased importance of production and marketing costs in determining profit.
 7. To maintain an effective product mix, a firm often must eliminate some products. This
    process is called
    a. quality modifications.
    b. functional modifications.
    c. aesthetics.
    d. product deletion.
    e. product modification.
 8. A product with no brand at all is called a
    a. discount product.
    b. factory second.
    c. maverick product.
    d. generic product.
    e. plain-package product.
 9. Nonprice competition can be used effectively when a seller does all but which one of the
    a. Makes distinctions in product quality
    b. Differs in customer service
    c. Uses an attractive promotional strategy
    d. Creates an appealing package
    e. Lowers prices
10. Raw materials are an example of a firm’s __________ costs.
    a. selling
    b. operating
    c. fixed
    d. overhead
    e. variable

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