APPLE QUIZ 2 Flashcards
how often do companies enter a price war on purpose
rarely
this highlights the potential for an opportunistic pricing action to lead to an all out price war that leaves all competitors within an industry worse off
Prisoner’s dilemma
competitive advantages can come from the following except
economies of price
economies of scale refer to
cost reductions that are derived from specialization or spreading the costs of fixed assets over more units as thwe volume of production increases
economies of scope refer to
cost reductions derived from the breadth of a firms activities, perhaps deriving from spreading the costs of fixed assets over a wider variety of units
It refers to the impact that changes in price or income have on consumer spending behavior such that when prices rise, consumers may reduce their quantity demanded for certain goods (known as the substitution effect) or switch to cheaper alternatives.
expenditure effect
The pricing strategy where a company offers multiple products or services together as a single package, often at a discounted rate compared to purchasing each item separately:
strategic bundling
It refers to the process of creating a bundle of products or services that will appeal to consumers:
bundle design
The additional costs incurred to produce one more unit of a good or service:
marginal cost
A marketing strategy where products or services are offered together at a reduced price for a limited time to encourage purchases:
promotional bundling
It is often better to be a small competitor in a/an ___________ industry than a large competitor in a/an ____________ industry.
profitable; unprofitable
When a competitor has a cost advantage, its ability to reduce prices and remain profitable is ______________ the original firm’s ability to follow suit.
C) greater than
It states that the need for maturity extends beyond the executives and into the issue of the industry growth rate.
B) Industry Maturity and Economic Savings
It states that industries with fewer competitors tend to be able to monitor one another’s pricing practices and respond appropriately.
Number of Competitors
It is a marketing strategy whereby businesses set prices based on their competitors’ prices.
Competition and Pricing
It enables businesses to offer a flexible pricing model that allows for customization while enhancing revenue opportunities through additional features and services:
add on price structures
It refers to a phenomenon in pricing where certain prices or price changes serve as indicators or “signposts” for consumers, influencing their perceptions of value and quality:
signpost effect
The total costs associated with a decision, including both explicit costs (out-of-pocket expenses) and implicit costs (opportunity costs):
true economic costd
It refers to the phenomenon where costs are distributed among multiple users or beneficiaries, reducing the individual financial burden on each party:
shared cost effect
The costs that a consumer incurs when changing from one product or service provider to another, can be monetary (such as cancellation fees or new equipment purchases) or non-monetary (such as time, effort, or learning new systems):
switching costs
It states that when considering a response to a competitor’s price reduction, executives should evaluate the costs and benefits of their response.
direct costs and benefits
- ____________ is an extreme form of price followership in which a firm matches its competitor’s price actions at every stage of the game.
Tit-for-tat pricing
states that understanding the implications of using price to grab market share requires some level of maturity among the executives.
competitors managerial maturity
- In calculating the response to a competitor’s price reduction, executives must calibrate their actions.
reacting to price reductions
. It is a competitive exchange among rival companies that lowers the price points of their products.
price war
It refers to the act of consumers changing their preferences from one brand to another.
brand switching
- It refers to the revenue generated by a customer during a specific time frame, such as a month or a year:
customer period value
A key metric that estimates the total revenue a business can expect from a customer over the entire duration of their relationship:
customer lifetime value
It refers to the changes in consumer behavior that arise from adopting a subscription model.
behavioral effect with subscriptions
It refers to a business model where customers pay a recurring fee—typically on a monthly or annual basis—to gain access to a product or service:
