Question $31$

Which of the following is a possible trap of a price$-$cutting strategy?

o Low prices usually achieve increases in both market share and market loyalty when customers switch.

o The company might need additional business because it has excess plant capacity.

o The company can initiate price cuts to dominate the market through lower costs.

o Consumers might not demand price concessions in the future.

o Competitors that match low prices might have longer staying power because of deep cash reserves.

Question $32$

Many consumers are willing to pay $$100$ for a perfume that contains $$10$ worth of scent because the perfume is from a well$-$known brand. What does this image pricing suggest about these consumers?

o They process prices from left to right.

o They use the price as an indicator of quality.

o They are rounding up the price.

o They are remembering an external frame of reference.

o They are breaking the price into smaller units.

Question $33$

Even if sales of a brand extension are high and meet targets, the revenue may be coming from consumers switching to the extension from existing parent$-$brand offerings$-$in effect brand.

the parent

o diluting

o cannibalizing

o reinforcing

o eroding

o revamping

Question $34$

Guarantees are most effective in two situations. The first is when the company or products are not well known. The second is when the product's quality is

o not known

o different

o inferior

o equivalent

o superior

Question $35$

Pacific Products produces detergents, toothpaste, bar soap, disposable diapers, and paper products. This company has a product

o type

o length

o class

o diversity

o width

Question $36$

$-$ brands are positioned with respect to competitors' brands so that more important $($and more profitable$)$ flagship brands can retain their desired positioning.

o Flanker

o Attacker

o Defender

o Cash cow

o Simulation

Question $37$

Which of the following is an example of a pure service?

$$ air travel

$$ psychotherapy

$$ baby oil

$$ a laptop

$$ a restaurant meal

Question $38$

Gianna was asked to examine the pricing and sales data from $2015$ and $2016$ for a charter bus company in Texas and to make recommendations for pricing for $2017.$ Gianna dutifully applied the elasticity formula to the data to arrive at an elasticity quotient. Although prices went down from $2015$ to $2016,$ total sales revenue and demand in $2016$ also declined, particularly in the last four months of the year.

Based on many years experience in the industry, Gianna would have expected demand and total revenues to increase as a result of a lower price. Of the following alternatives, which would be the most likely explanation of the unexpected findings regarding elasticity, particularly during the last four months of the year?

o The charter bus company had an effective loyalty program in place.

o The calculation of the elasticity quotient requires longitudinal data from a minimum of three years: Gianna only had two years of data to work with.

o The charter bus company was perceived by customers as unique and differentiated based on its on$-$time service, friendly personnel and riding comfort.

o A charter bus run by a competitor that crashed north of Houston in August of $2016$ was an external event that is therefore not accounted for in the calculation of the elasticity quotient.

o None of the other responses would likely be correct. The finding of a demand decrease in response to a price decrease is common.

Question $39$

Birth control pills didn't diffuse as quickly in predominately Roman Catholic countries as they did in the United States. This is an example of problems with the new product's

o divisibility

o relative advantage

o failure to meet legal requirements

o complexity

o compatibility

Question $40$

When Apple introduced its iPhone, it was priced at $$599.$ This allowed Apple to earn the maximum amount of revenue from the various segments of the market. Two months after the introduction, the price had come down to $$499.$ What kind of a pricing did Apple adopt?

o loss$-$leader pricing

o market$-$penetration pricing

o market$-$skimming pricing

o target$-$return pricing

o value pricing

Question $41$

In the absence of noticeable and rapid healing, Riley is not sure whether she received good service from her physician. Medical services are a good example of this type of difficulty $-$ consumer finds hard to evaluate even after consumption.

$-$ where the

o search qualities

o experience qualities

o credence qualities

o differentiation qualities

o productive qualities

Question $42$

Kai had an appointment at the dentist's office, but couldn't make it on time due to traffic. By the time he arrived, the dentist had already begun with the next patient and he was asked to reschedule. This illustrates the $-$ of services.

o variability

o heterogeneity

o perishability

o intangibility

o homogeneity

Question $43$