question
. Marketing Objectives
answer
•to maximize profit
•to gain market share
•to infer a level of quality
•to survive
•to gain market share
•to infer a level of quality
•to survive
question
Marketing Mix Strategy
answer
price needs to be consistent with other 3P's (needs to reflect advertising, etc.
question
factors that affect pricing decisions: internal
answer
.Marketing Objectives
Marketing Mix Strategy
Costs
Marketing Mix Strategy
Costs
question
factors that affect pricing decisions: external
answer
Demand
Competition_
Economy
Competition_
Economy
question
price elasticity
answer
% CHANGE IN QUANTITY DEMANDED OF GOOD "A/% CHANGE IN PRICE OF GOOD "A"
question
price elasticity: elastic demand
answer
•If demand greatly changes with a price change, demand is elastic
Products that are price-sensitive and have many substitutes
Products that are price-sensitive and have many substitutes
question
price elasticity: inelastic demand
answer
•If demand hardly changes with a price change, demand is inelastic
•Products that are less price-sensitive and have few substitutes
•Products that are less price-sensitive and have few substitutes
question
Unitary
Elasticity
Elasticity
answer
Price goes...Up or down
Revenue goes...Stays the same
Revenue goes...Stays the same
question
develop pricing objectives
answer
-profit
-status quo
-market share
-status quo
-market share
question
Cost-plus pricing
answer
adding a specified dollar amount to the seller's costs
question
Markup on selling price
answer
= (selling price - cost)
selling price
selling price
question
Cost =
answer
(1-markup on selling price) (selling price)
question
Selling price =
answer
cost (1-markup on selling price)
question
Break-Even
Quantity
Quantity
answer
Total Fixed Costs/
Selling Price - Variable Cost
Selling Price - Variable Cost
question
Demand-Based Pricing
answer
Customers pay a higher price when demand for the product is strong and a lower price when demand is weak
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Competition-Based Pricing
answer
Pricing influenced primarily by competitors' prices
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