question
what is price?
answer
the amount of money charges for a product/service OR the sum of all the values that customers give up in order to gain the benefits of having or using a product/service
(only element in marketing mix that produces revenue, most flexible)
(only element in marketing mix that produces revenue, most flexible)
question
customer value based pricing
answer
uses buyers' perceptions of value as a key to pricing
question
good value pricing
answer
involves offering just the right combination of quality and good service at a fair price
question
everyday low pricing
answer
charging a constant, everyday low price with few or no temporary price discounts
question
high-low pricing
answer
charging higher prices on an everyday basis but running frequent promotions to lower prices temporarily on selected items
question
value-added pricing
answer
the strategy of attaching value-added features and services to differentiate their offers and thus support higher prices
question
impact of lower cost on pricing?
answer
low cost suppliers offer lower prices with lower margins but higher sales and profits
question
types of cost
answer
fixed costs
variable costs
total costs
variable costs
total costs
question
learning/experimental curve
answer
a drop in average cost with accumulated production experience
question
target costing
answer
starts with an ideal selling price based on customer-value considerations, then targets costs that ensures the price is met
question
break-even analysis
answer
fixed cost divided by contribution (price - variable cost)
question
demand curve
answer
shows number of units the market will buy at a different prices
- higher price = lower demand (inverse relationship)
- higher price = lower demand (inverse relationship)
question
price elasticity
answer
sensitivity of demand with price changes
question
different types of markets
answer
pure competition - trading in uniform commodity
monopolistic - trade over a range of prices instead of one
oligopolistic - few who are highly sensitive to pricing market strategies
pure monopoly
monopolistic - trade over a range of prices instead of one
oligopolistic - few who are highly sensitive to pricing market strategies
pure monopoly
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