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Exam 13: B: Creating and Pricing Products That Satisfy Customers

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Question 21

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A price of $5.95 for a product would fall into the category of odd-number pricing.

A) True
B) False

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Question 22

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Costs that depend on the number of units produced are called variable costs.

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B) False

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Question 23

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In the decline life-cycle stage of a product, less profitable versions of the product are sold at reduced rates to cut losses.

Entirely new products are innovations.

New products are often immediate successes.

Once it becomes effective, a product mix for a given product remains effective for a long time.

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 company wanting to maximize profits from its new product would use product-line pricing.

Three types of product-line pricing are price leaders, special-event pricing, and comparison discounting.

Screening ideas for feasibility is the first stage of the new product development process.

Fixed costs are costs that depend on the number of units produced.

The strategy of developing a large market share for a new product by setting a very low price is called penetration pricing.

A product cannot perform its function if it is priced incorrectly.

Differential pricing means different buyers pay different prices for the same quality and quantity of a product.

The breakeven quantity is the number of units that must be sold to equal the projected total revenue for the period.

Some pricing objectives include surviving, maximizing profit, obtaining market- share goals, and maintaining status quo.

Manufacturers, wholesalers, and retailers do not use negotiated pricing strategies.

Craftsman and Kenmore are examples of a store brand.

Pricing strategies act as guides for achieving pricing objectives.

Packages have marketing value but no functional value.