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Marketing Exam 1 > Ch.10 > Flashcards

Ch.10 Flashcards

1
Q

Price is the only part of the marketing mix that actually makes money (T/F)

A

True

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2
Q

basic problem solving benefits consumers are seeking

A

core customer value

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3
Q

the physical good or delivered service that supplies the core benefit

A

actual product

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4
Q

nonphysical aspects and associated services of the product

A

augmented product

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5
Q

(price * quantity) - total cost = ___

A

profit

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6
Q

overall value consumers are willing to exchange or sacrifice to acquire a product

A

price

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7
Q

product price, taxes, shipping costs, travel costs

A

monetary

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8
Q

time, effort, opportunity costs

A

nonmonetary

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9
Q
  • cost (variable or fixed)
  • competition
  • stage in product lifecycle
  • promotion strategy
  • perceived quality
  • distribution strategy
  • target market’s demand
A

determinants of price

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10
Q

shows how much customers will buy at different prices (assuming all else remains that same)

A

demand curve

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11
Q

upward-sloping curves due to perceived quality, status, and exclusivity conveyed by price

A

prestige products

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12
Q

sensitivity of customers to price changes in terms of the quantities they will buy

A

price elasticity

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13
Q

small percent changes in $$ leads to large percent changes in number of units bought

A

elastic (sensitive)

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14
Q

large percent changes in $$ lead to small percent changes in number of units bought

A

inelastic (insensitive)

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15
Q

Consumers are more sensitive to price increases, than decreases (t/f)

A

True

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16
Q

prices will more likely increase quickly as a response to a market shock (ex: war in Ukraine), but then decrease slowly in recovery

A

rocket and feather

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17
Q

charging difference prices based on type of customer, time of day, day of week, season, or demand

A

dynamic pricing

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18
Q

price is decision variable set to maximize firm profitability

A

firm perspective

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19
Q

price is set based on the perceived value of the product/service to the customer

A

customer perspective

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20
Q
  1. Design a good product
  2. Determine product costs
  3. Set price based on costs
  4. Convince buyers of products value
A

cost-based pricing

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21
Q
  1. Assess customer needs and value perceptions
  2. Set target price to match customer perceived value
  3. Determine costs that can be incurred
  4. Design product to deliver desired value at target price
A

value-based pricing

22
Q

setting prices based on competitor’s strategies, costs, prices, and market offerings

A

competitor-driven pricing

23
Q

when product is introduced, set a low initial price with the goal of quickly building sales, market share, and profits

A

market penetration

24
Q

when product is introduced, set a high initial price with goal of “skimming” revenue layers from market

A

price skimming

25
Q

-quickly gain market entry and market share
- discourage competition from entering market
- when implemented successfully, your sales volume can offset the income you lose because of your low prices

A

benefits of market penetration

26
Q
  • firms must have capacity to satisfy rapid increase in demand
  • low price many be interpreted as signal of low quality
  • could be “leaving money on the table”
A

disadvantages of market penetration

27
Q
  • can signal high quality to the market
  • potential to quickly earn back R&D invested into product
  • tests price sensitivity
A

benefits of price skimming

28
Q
  • undermined if it becomes easy for competitors to enter market
  • product quality/image and consumer demand must support the price
  • high costs of producing small volumes
  • consumers who purchased at higher $ may be irritated when $ drops
A

disadvantages of price skimming

29
Q

consumers have a set price or price range in their mind

A

internal reference prices

30
Q

global impression of the overall price level of a store (ex: Walmart compared to Neiman Marcus)

A

retailer price image

31
Q

a psychological pricing tactic in which numeric value is utilized to affect the customer’s perception of product value

A

odd/even pricing

32
Q

most inexperienced consumers use price as an indicator of quality, price becomes crucial when consumers have little knowledge about certain products/brands

A

price-quality relationship

33
Q

stressing continuity of prices (at non-sale to discount prices)

A

everyday low pricing

34
Q

using temporary price reductions to encourage sales

A

high/low pricing

35
Q

group of products or services sold as a single unit

A

bundle

36
Q

no bundling/sold separately

A

PC/pure components

37
Q

can only get the individual items as a bundle

A

PB/pure bundling

38
Q

individual items are also available separately

A

MB/mixed bundling

39
Q

good/services sold below cost to encourage sales elsewhere

A

loss leader pricing

40
Q

reference prices that have been inflated or are fictitious and could harm consumers

A

deceptive reference prices

41
Q

lure customer in with low price (bait) and then pressuring them to a higher-priced option (switch)

A

bait and switch

42
Q

setting very low price for purpose of driving competitors out of business

A

predatory pricing

43
Q

manufacturers/wholesalers cannot charge a different price to different retailers, discounts must be equitable

A

robinson-patman act

44
Q

colluding with other firms to control prices

A

price fixing

45
Q

competitors work together to control prices

A

horizontal price fixing

46
Q

marketing channel members work together to control prices

A

vertical price fixing

47
Q

_____ uses buyers perceptions of value as the key to pricing.

A

customer value-based pricing

48
Q

The goal of the competition-based pricing is not to ______ or _____ competitor’s price

A

match, beat

49
Q

______ reverses the usual process of first designing a new product, determining its cost, and then asking “can we sell it for that?”

A

target costing

50
Q

Under ____, the market consists of many buyers and sellers trading in a uniform commodity

A

pure competition

Marketing Exam 1 (10 decks)

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