Exam 14: Developing and Pricing Goods and Services

For most firms, price competition is the most important way to gain a competitive advantage over rivals.

A penetration strategy calls for a firm to charge low prices with the intent of attracting a large number of customers and discouraging competition.

Accessory equipment consists of capital items that cost less and are shorter lived than installation items.

The Connecting Through Social Media box showed us that while watching the online gaming market, some previously popular games were faltering. This led programmers to

Target costing adds a profit margin to estimated cost of production to determine the optimal price.

Big Dog Building is the one of the largest cement companies in the Midwest. When the firm raised its prices by 11 percent, all of its competitors soon announced they too were raising their prices by 11 percent. It appears this industry is influenced by a ________ strategy.

The best strategy for brand name manufacturers to respond to the challenge of generic goods is to use price discounts and coupons to price their products more aggressively.

"Create a better mousetrap and the world will beat a path to your door." This statement is consistent with the idea behind the commercialization of products.

Lauren, owner and operator of Tastee Burgers, is working on a break-even analysis. The cost of pickles, onions, buns, ketchup, and meat would all be considered variable costs for her type of business.

One way firms can gain a competitive advantage without relying on low prices is by developing close, friendly relationships with their customers.

Nonbranded products that sell below the price of national brands, have very basic packaging, and are backed with little or no advertising are called

A ________ has direct responsibility for all the elements of the marketing mix for one brand or product line.

Brand ________ refers to the linking of a brand to other favorable images, such as a celebrity.

One reason many large consumer-product companies make use of ________ is to have greater control over new-product development and product promotion.

As a result of increased advertising and well-trained salespeople, packaging is less important than in the past.

Endorsements by sports or movie celebrities can help create a favorable brand association.