Flashcards on Marketing 301

What is a product?

Which of the following explains the layers of product concept, using air travel as an example?

You rushed to the convenience store to get Pepto-Bismol because you have an upset stomach. What type of product is it?

Bread and gasoline are examples of which of the following?

Which consumer products are the most expensive?

Electronics such as washing machines are which of the following?

Aircrafts and manufacturing plants are examples of which of the following?

Photocopiers are examples of which of the following?

Which of the following depicts two examples of raw materials?

Marketing research is an example of which of the following?

What is product mix?

Honda offers sedan, van, SUV, lawn mower, and snow blower. What is product width?

Honda has Acura, Accord, and Civic in its sedan line up. What is the product length?

Civic has hybrid, LX and EX variants. What is the product depth?

Introducing new fragrances for Febreze odor eliminator is which of the following?

Samsung is both upward and downward stretching in extending its product lines. What does it mean?

What are some dimensions of product quality?

What is a brand?

What is the first stage of brand loyalty?

You ask for Samuel Adams in a bar but it doesn't have it on tap. You order Budweiser instead. You are exhibiting which of the following?

If you go out of the way (driving 10 miles) just to get Samuel Adams, it is which of the following?

Compared to manufacturer's brand, which of the following contain the same ingredients but they are a lot cheaper?

What is brand equity?

What is the brand image of PC vs. Apple?

Coca-Cola allows a t-shirt company to print its logo on its hoodies and t-shirts. It is called which of the following?

Which of the following defines co-marketing?

Which of the following is an example of people-based service?

When an actor's agent presents a client's qualifications to potential movie production companies until one company response positively to the actors. It is called which of the following?

The food quality of ABC restaurant was very good last week, but when you took your friends to it today, it was awful. This is quality differences are due to which characteristic of service?

After plastic surgery, the patients can determine the qualities of the services they receive. What type of qualities is this called?

Even after the radiologist took an ultra-sound image of your stomach, but you do not know if the radiologist was doing the job well. This is because of the ______ qualities of the service.

What is marketing places?

What is the marketing of Catholic Church and other religious organizations?

Which of the following is an example of market penetration strategy?

General Mills introduced a new rice-crisp snack to encourage snackers in established markets to view it as a healthy alternative. This is which of the following?

Wii appeals to many new groups of consumers beyond hardcore gamers, such as women, elderly, and family. This is which of the following?

New product development starts with which of the following?

What is the advantage of conducting test marketing?

Which stage of product life cycle will the level of advertising be very high to create awareness?

Sales volumes rise rapidly as new customers (such as early majority) make initial purchases and early buyers (such as innovators and early adopters) repurchase the product during the product life cycle stage called what?

Coca-Cola and Pepsi Cola compete head-on in what stage of the product life cycle?

What is fashion?

Which of the following explains how chocolate marketers extend product life cycle?

What is price?

Which of the following explains this formula: P=R-C ?

Which of the following explains at what condition the firm will maximize its profits?

Which of the following explains at what condition the firm will maximize its volume?

How many P's are left if the firm's pricing objective is to meet competition?

The pricing strategy used by Tiffany jewelry is which of the following?

When Boy Scouts charges $20 for a can of popcorn to raise funds for the local troops, their pricing objective is which of the following?

What is the reason for imposing high taxes on tobacco and alcohol?

Offering public transportation free of charge in Portland, OR is to ___.

What is demand?

Why does the demand curve usually slope downwards?

What is supply?

Why does the supply curve usually slope upwards?

Which of the following describes what happens when supply meets demand?

Which industry sectors exemplify pure competition?

Which industry sectors exemplify oligopoly?

Which of the following is an example of monopoly?

Consumers are willing to pay more for Pantene even Pantene is a commodity (shampoo) as it participates in which of the following?

Total cost = _______ + _______?

Revenue = _______ X _______?

Which of the following explains why the MC curve slopes downwards and then goes up again?

Which of the following explains why the MR curve slopes downwards?

Which of the following explains in words why profic maximizes when MR = MC ?

What is the formula for elasticity of demand?

What is the price elasticity of demand for eggs, if 20% increase in price result in 5% decrease in quantity of eggs demanded?

If gasoline demand is inelastic, what is its elasticity of demand?

When the product occupies a very small portion of the consumer budget, its demand is likely to be which of the following?

In the long run, all demands are:

What is cost-plus pricing?

What is the break-even pricing of the following: fixed cost $200,000, variable cost $40, and price is $90?

How many units does the firm need to sell if it wants to have a profit of $100,000 based upon the following information: fixed cost $200,000, variable cost $40, and price is $90.

What is the revenue level based upon the following information: fixed cost $200,000, variable cost $40, price $90, and profit level is $100,000.

How yield management helps hotel maximize its revenues?

The price of high-end electronic products in the beginning is often very high to recover fixed cost rapidly and earn initial high profits. It is called:

If a company introduces a new product at a low price so as to capture a large market share, it is called:

Trying to match your competitors' prices is called:

What is a rebate?

The cash discount from a $1000 invoice when the terms are 5/10 net 30 if the bill is paid within the first week after receipt is:

Selling toilet tissue paper at a stated amount per sheet is an example of which of the following?

When product is priced $999.99 instead of $1000, it is an example of which of the following?

When Honda cars are sold at price levels, $15,000, $25,000, and $35,000, its pricing policy is:

Buy one and get the second half off is:

Which of the following is auction site that you can negotiate on prices?

Government agencies need to use taxpayer dollars efficiently, therefore, many projects have to undergo:

Price stability is difficult to achieve for international marketers due to which of the following?

What is market-differentiated pricing?

What is transfer pricing?

A Chinese computer company transfers laptops costing $100 to make to its U.S. subsidiary for a transfer price of $200. The U.S. subsidiary sells the laptops to retailers for $250 each and spends about $50 per laptop on promotion and distribution expense. The Chinese manufacturer _________.

If the internet division of Schwab charges on $30 per trade, compared to the parent company charging $65 per trade using brokers, it is which of the following?

Which of the following describes how bots help consumers in shopping?

Washburn Guitars: Using Break-Even Points to Make Pricing Decisions "We offer a guitar at every price point for every skill level." explains Kevin Lello, vice president of marketing at Washburn Guitars. Washburn is one of the most prestigious guitar manufacturers in the world, offering instruments that range from one-of-a-kind, custom-made acoustic and electric guitars and basses to less-expensive, mass-produced guitars. Lello has responsibility for marketing Washburn's products and ensuring that the price of each product matches the company's objectives related to sales, profit, and market share. "We do pay attention to break-even points; adds Lello. ''We need to know exactly how much a guitar costs us, and how much the overhead is for each guitar." THE COMPANY The modem Washburn Guitars company started in 1977 when a small Chicago firm bought the century-old Washburn brand name and a small inventory of guitars, parts, and promotional supplies. At that time, annual company sales of about 2,500 guitars generated revenues of $300,000. Washburn's first catalog, appearing in 1978, told a frightening truth: Our designs are translated by Japan's most experienced craftsmen, assuring the consistent quality and craftsmanship for which they are known. At that time, the American guitar-making craft was at an all-time low. Guitars made by Japanese firms, such as lbane and Yamaha, were in use by an increasing number of professionals. Times have changed for Washburn. Today, the company sells about 50,000 guitars each year and annual revenues exceed $40 million. All this resulted from Washburn's aggressive marketing strategies to develop product lines with different price points targeted at musicians in distinctly different market segments. THE PRODUCTS AND MARKET SEGMENTS One of Washburn's early successes was the trendsetting Festival Series of cutaway, thin-bodied flattops, with built-in bridge pickups and controls. This guitar became the standard for live performances as its popularity with rock and country stars increased. Over the years several generations of musicians have used Washburn guitars. Early artists included Bob Dylan, Dolly Parton, Greg Allman, and the late George Harrison of the Beatles. In recent years, Mike Kennerty of the All American Rejects, Rick Savage of Def Leppard, and Hugh McDonald of Bon Jovi have been among the many musicians who use Washburn products. Until 1991, all Washburn guitars were manufactured in Asia. That year Washburn started building its high-end guitars in the United States. Today. Washburn marketing executives divide its product line into four categories to appeal to different market segments. From high end to low end these are: • One-of-a-kind, custom instruments. • Batch-custom instruments. • Mass-customized instruments. • Mass-produced instruments. The one-of-a-kind custom products appeal to the many stars who use Washburn instruments as well as collectors. The batch-custom products appeal to professional musicians. The customized products appeal to musicians with intermediate skill levels who may not yet be professionals. Finally, the mass-produced units are targeted at first-time buyers and are still manufactured in Asian factories. PRICING ISSUES Setting prices for its various lines presents a continuing challenge for Washburn. Not only do the prices have to reflect the changing tastes of its various segments of musicians, but the prices must also be competitive with the prices of other guitars manufactured and marketed globally. The price elasticity of demand, or price sensitivity, for Washburn's products varies between its segments. To reduce the price sensitivity for some of its products, Washburn uses endorsements by internationally known musicians who play its instruments and lend their names to lines of Washburn signature guitars. Stars playing Washburn guitars such as Nuno Bettencourt of Extreme, Paul Stanley of KISS, Scott Ian of Anthrax, and Dan Donegan of Disturbed have their own lines of signature guitars--the "batch-custom" units mentioned earlier. These guitars receive excellent reviews. Total Guitar magazine, for example, recently said, "If you want a truly original axe that has been built with great attention to detail ... then the Washburn Maya Pro DD75 could be the one." Bill Abel, Washburn's vice president of sales, is responsible for reviewing and approving prices for the company's lines of guitars. Setting a sales target of 2,000 units for a new line of guitars, he is considering a suggested retail price of $349 per unit for customers at one of the hundreds of retail outlets carrying the Washburn line. For planning purposes, Abel estimates half of the final retail price will be the price Washburn nets when it sells its guitar to the wholesalers and dealers in its channel of distribution. Looking at Washburn's financial data for its present plant, Abel estimates that this line of guitars must bear these fixed costs: Rent and taxes = $14,000 Depreciation of equipment = $ 4,000 Management and quality control program = $20,000 In addition, he estimates the variable costs for each unit to be: Direct materials = $25/unit Direct labor = 15 hours/unit @$8/hour Carefully kept production records at Washburn's plant make Abel believe that these are reasonable estimates. He explains, "Before we begin a production run, we have a good feel for what our costs will be. The U.S.-built N-4, for example, simply costs more than one of our foreign-produced electrics." Caught in the global competition for guitar sales, Washburn continually searches for ways to reduce and control costs. For example, Washburn recently purchased Parker Guitar, another guitar manufacturer that designed products for professionals and collectors, and will combine the two production facilities in a new location. Washburn expects the requisition to lower its fixed and variable costs. Specifically, Washburn projects that its new factory location will reduce its rent and taxes expense by 40 percent, and the new skilled employees will reduce the hours of work needed for each unit by 15 percent. By managing the prices of its products, Washburn also helps its dealers and retailers. In fact, Abel believes it is another reason for Washburn's success: "We have excellent relationships with the independent retailers. They're our lifeblood, and our outlet to sell our product. We sell through chains and online dealers, but it's the independent dealer that sells the guitars. So we take a smaller margin from them because they have to do more work. They appreciate it, and they go the extra mile for us.''

Some of the high-end "Signature Series" guitars are made in the U.S. are prized at$9,999.90. Other series such as "X Series" guitars are priced at $1,279.90, "ClassicalSeries" are priced at $639.90, and "Travel Series" are priced at $265.90. What type ofpricing policy does Washburn use?

For a new line of guitars with retail price at $349, what is the price Washburn nets (assuming half of the final retail price will be the price Washburn nets when it sells its guitars to the dealers)? (Note: use the answer to this question as "price" for all subsequent calculations)

What is the fixed cost (adding rent and taxes, depreciation of equipment, management and quality control program)?

What is the variable cost per unit (adding direct materials and direct labor)?

What is the breakeven quantity for the new line of guitars?

If Washburn is able to sell 2,000 units of the new line of guitars, what will its profits be?

Assume that the merger with Parker leads to cost reductions projected in the case (i.e.rent and taxes expenses will be reduced by 40% and new skilled employees will reduce the hours of work needed for each unit by 15%). What is the revised fixed cost?

What is the revised variable cost per unit?

What is the revised breakeven quantity?

What is the revised level of profits?

If, for competitive reasons, Washburn eventually has to move all its production back to China, what specific fixed and variable costs might be lowered?