Question

FlashX company sells hi-end video games to consumers via the internet, each at a price of $75. It buys each game at a cost of $40, and it incurs another $5 per unit in distribution expenses. If FlashX incurs fixed overhead expenses per year of $2.1 million how many units does it need to sell in order to break even?

70,000

65,000

52,500

28,000

QUESTION 6

Why do retailers use the “markup on price” method of pricing, rather than the “markup on cost” method?

		Because it costs less to use the “markup on price” method.
		So that the “markup” and “markdown” percentages can easily be compared.
		Because it is more profitable to use the “markup on price” method.
		All of the above.

2 points

QUESTION 7

What can a service marketer do to manage the issue of “perishability?”

Charge higher prices during periods of peak demand, and reduce prices during periods of low demand.

Make sure that ambient conditions (physical surroundings) are pleasant.

Use better packaging to make sure the product does not spoil.

All of the above.

To say that service offerings are “inseparable” means that:

		A service offering cannot be seen or touched.
		A service offering is “produced” or “delivered” in the presence of the customer.
		The quality of a service offering can vary from customer to customer.
		All of the above are true.

2 points

QUESTION 10

Which of the following factors should be considered when setting the price of a new product?

		The price of substitute products.
		The anticipated length of the product life cycle.
		The degree of differentiation between the new product and existing products on the market.
		All of the above.

2 points

QUESTION 11

Which of the following statements regarding packaging is true?

		A package should provide protection to the consumer and to the product.
		A package should attract consumers' attention
		A good package should explain the features of the product, and how to use it.
		All of the above are true.

2 points

QUESTION 12

The "demand based" method for determining the selling price takes into consideration the fact that:

		Lower prices lead to higher sales volumes.
		Higher sales volumes lead to lower unit costs of production.
		Different levels of price (and cost) lead to different levels of profit.
		All of the above.

2 points

QUESTION 13

The concept of the “experience curve” is a recognition that:

		For new innovations, production costs typically increase as more and more units are produced.
		For innovations, production costs typically are not affected by production volume.
		For new innovations, production costs typically decline as more and more units are produced.
		Marketing managers who have more experience are typically more effective at their jobs.

2 points

QUESTION 14

Factors that affect the rate of adoption of new, innovative products include:

		The level of compatibility with existing technology.
		The extent to which people can observe others using the product.
		The level of functional, social, and/or monetary risk associated with the product.
		All of the above.

2 points

QUESTION 15

Which of the following statements regarding "convenience products" is true?

		Consumers typically will not accept substitute brands.
		Consumers typically are willing to put forth a high level of shopping effort.
		These products should be distributed through a wide variety of retail stores.
		All of the above are true.

2 points

QUESTION 16

Which of the following statements regarding a “family branding” strategy is true?

		A family branding strategy allows a firm to capitalize on its previous successes.
		A failure of one product within the family brand can harm sales of the other brands in the family.
		Family branding is advantageous in that it allows consumers to identify the manufacturer much easier, thus helping consumer to better judge the quality of the product.
		All of the above are true.

2 points

QUESTION 17

Which of the following factors argue for a penetration pricing strategy?

		The market potential is large, and is expected to increase over the years.
		It is highly likely that competitors will soon enter the market.
		Higher levels of sales volume are likely to bring lower production costs per unit.
		All of the above.

2 points

QUESTION 18

Which of the following statements regarding packaging is true?

		The quantity of product offered in a package can affect whether some consumers try the product.
		Different markets segments oftentimes desire different size/quantity packages.
		Different types of retail stores oftentimes prefer to carry different size/quantity packages.
		All of the above are true.

2 points

QUESTION 19

To say that a service offering is “intangible” means that:

		The service offering is “produced” or “delivered” in the presence of the customer.
		The quality of the service offering can vary from customer to customer..
		The service offering cannot be seen or touched.
		All of the above are true