Business THEME 1

Question 1

Cost plus pricing

Answer 1

Adding on a percentage of unit costs onto the price

Question 2

Price skimming

Answer 2

Setting a high initial price then lowering it over time

Question 3

Price penetration

Answer 3

Setting a low initial price

Question 4

Predatory pricing

Answer 4

Setting a low initial price to eliminate competitors

Question 5

Competitive pricing

Answer 5

Setting a price based on your competitors

Question 6

Psychological pricing

Answer 6

Setting a price where customers believe they’re paying a price lower than it really is

Question 7

DESIGN MIX

Answer 7

Various design elements that are used to create a product or service.
Aesthetics, Cost, Functionality

Question 8

Factors affecting supply

Answer 8

Production cost changes, new technology

Question 9

Added value

Answer 9

The process of increasing the worth of a product by modifying it.

Question 10

Extension strategies

Answer 10

More advertising, price reduction, new packaging

Question 11

Induction training

Answer 11

Training the employee gets when they first join

Question 12

Financial incentives

Answer 12

Monetary rewards given to employees: Piece-rate-pay, commission, bonuses

Question 13

Non-financial incentives

Answer 13

Intangible rewards from managers to employees: Recognition, job enlargement, job rotation

Question 14

Piece-rate-pay

Answer 14

Payment is given per unit of work they complete

Question 15

Commission

Answer 15

Rewarded based on hitting a certain target in sales

Question 16

2 benefits of design mix

Answer 16

Creates a targeted product and makes the product stand out

Question 17

2 drawbacks of design mix

Answer 17

Improper mix can create unpopular product, improper mix can target wrong audience

Question 18

When finding out the break even point in output, do you round the decimals up or down.

Answer 18

UP - because you need a full number and a bit to break even. No decimals in a break even question.