question
price
answer
is the amount of money charged for a product or service. It is the sum of all the values that consumers give up in order to gain the benefits of having or using a product or service
question
the only element in the marketing mix that produces revenue; all other elements represent costs
answer
price
question
the right strategy
answer
delivers both value to customers and profits to company
question
Value-based pricing strategy
answer
uses the buyers' perceptions of value, not the sellers cost, as the key to pricing
Value-based pricing is customer driven
Cost-based pricing is product driven
Price is considered before the marketing program is set
Value-based pricing is customer driven
Cost-based pricing is product driven
Price is considered before the marketing program is set
question
everyday low pricing (EDLP)
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
attaches value-added features and services to differentiate offers, support higher prices, and build pricing power
question
cost-based pricing
answer
setting prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for effort and risk
Cost-based pricing adds a standard markup to the cost of the product
Cost-based pricing adds a standard markup to the cost of the product
question
fixed costs
answer
are the costs that do not vary with production or sales level
-Rent
-Heat
-Interest
Executive salaries
-Rent
-Heat
-Interest
Executive salaries
question
variable costs
answer
are the costs that vary with the level of production
-Packaging
-Raw materials
-Packaging
-Raw materials
question
total cost
answer
the sum of fixed and variable costs for given level of production
question
Experience or learning curve
answer
is when average cost falls as production increases because fixed costs are spread over more units
question
cost-plus pricing
answer
adding a standard markup to the cost of the product
question
Benefits of cost-plus pricing
answer
-Sellers are certain about costs
-Prices are similar in industry and price competition is minimized
-Buyers feel it is fair
-Prices are similar in industry and price competition is minimized
-Buyers feel it is fair
question
cons of cost-plus pricing
answer
-Ignores demand and competitor prices
question
Break-even pricing
answer
is the price at which total costs are equal to total revenue and there is no profit
question
target return pricing
answer
is the price at which the firm will break even or make the profit it's seeking
question
competition-based pricing
answer
setting prices based on competitors' strategies, prices, costs, and market offerings
Consumers will base their judgments of a product's value on the prices that competitors charge for similar products.
Consumers will base their judgments of a product's value on the prices that competitors charge for similar products.
question
targeting costing
answer
starts with an ideal selling price based on consumer value considerations and then targets costs that will ensure that the price is met
question
Before setting prices, the marketer must
answer
understand the relationship between price and demand for its products
question
price elasticity of demand
answer
demand illustrates the response of demand to a change in price
question
elastic demand
answer
occurs when demand changes greatly for a small change in price
question
inelastic demand
answer
occurs when demand hardly changes when there is a small change in price
question
price elasticity of demand=
answer
% change in quantity demanded / % change in price
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
