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BUS 200 Final > Chapter 13 > Flashcards

Chapter 13 Flashcards

1
Q

Revenue equation

A

revenue = selling price x units sold

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2
Q

how companies maximize profit with selling price

A

set prices to maximize profits want to set the selling price to sell the number of units that will generate the highest possible total profits.

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3
Q

if company makes selling price too low

A

it will probably sell many units, but may miss out on additional profits on each unit (and may even lose money on each exchange)

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4
Q

if company makes selling price too high

A

it will make a large profit on each item, but will sell fewer units. Again, the firm loses money, and it may also be left with excess inventory because of fewer units sold.

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5
Q

choosing pricing

A

weigh sales revenues against costs for materials
and labour, as well as capital resources (plant and equipment) and marketing costs (such as maintaining a large sales staff).

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6
Q

market share

A

A company’s percentage of the total industry sales for a specific product type.

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7
Q

selling price equation

A

Selling price = sellers costs + profit

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8
Q

markup percentage equation

A

markup percentage equation = markup/sales price

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9
Q

variable cost

A

Variable cost Cost that changes with the quantity of a product produced and sold.

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10
Q

Fixed cost

A

Fixed cost
Cost that is incurred regardless of the quantity of a product produced and sold

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11
Q

Breakeven analysis

A

Breakeven analysis For a particular selling price, assessment of the seller’s costs versus revenues at various sales volumes

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12
Q

Breakeven point

A

The sales volume at which the seller’s total revenue from sales equals total costs (variable and fixed) with neither profit nor loss.

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13
Q

profit equation

A

profit= total revenue - total fixed cost +total variable cost

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14
Q

pricing existing products options

A

above market price, below or the same

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15
Q

pricing above

A

Pricing above prevailing market prices for similar products to take advantage of the common assumption that higher price means higher quality

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16
Q

pricing below

A

Pricing below market prices while offering a product of comparable quality to higher-priced competitors

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17
Q

Price skimming

A

Price skimming Setting an initially high price to cover new product costs and generate a profit

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18
Q

Penetration pricing

A

Penetration pricing Setting an initially low price to establish a new product in the market

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19
Q

Price lining

A

pricing different products in a product line at various price points, depending on size and features, to make them affordable to a wider range of customers.

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20
Q

Psychological pricing

A

Psychological pricing A pricing tactic that takes advantage of the fact that consumers do not always respond rationally to stated prices.

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21
Q

push vs pull strategy

A

in a push system, production dictates how much of the product will be “pushed” to the market while in a pull system, current demand “pulls” the goods

22
Q

Personal selling

A

Promotional tool in which a salesperson communicates one to one with potential customers

23
Q

premium

A

A method of sales promotion in which an item is offered free or at a bargain price to customers in return for buying a specified product

24
Q

Point-of-purchase (or sale) display

A

A method of sales promotion in which a product display is located in a retail store to encourage consumers to buy the product.

25
Q

Direct (or interactive) marketing

A

One-on-one nonpersonal selling by nonstore retailers and B2B sellers using direct contact with prospective customers, especially via the internet

26
Q

distribution mix

A

The combination of distribution channels by which a firm gets its products to end users.

27
Q

Intermediary

A

Intermediary An individual or firm that helps to distribute a product.

28
Q

Wholesaler

A

An intermediary that sells products to other businesses for resale to final consumers

29
Q

Retailer

A

An intermediary that sells products directly to consumers

30
Q

Distribution channel

A

The network of interdependent companies through which a product passes from producer to end user.

31
Q

Direct channel

A

A distribution channel in which a product travels from producer to consumer without intermediaries.

32
Q

sales agent

A

An independent intermediary who a person who handles the business affairs of a client. A regular agent typically deals with customers and other businesses to negotiate for their client’s product and services.

33
Q

Broker

A

A broker is a person or firm who arranges transactions between a buyer and a seller for a commission when the deal is executed. A broker who also acts as a seller or as a buyer becomes a principal party to the deal.

34
Q

Intensive distribution

A

A distribution strategy in which a product is distributed in nearly every possible outlet, using many channels and channel members.

35
Q

Exclusive distribution

A

A distribution strategy in which a product’s distribution is limited to only one wholesaler or retailer in a given geographic area.

36
Q

Selective distribution

A

A distribution strategy that falls between intensive and exclusive distribution, calling for the use of a limited number of outlets for a product.

37
Q

Channel conflict

A

Conflict arising when the members of a distribution channel disagree over the roles they should play or the rewards they should receive.

38
Q

Direct-response retailing

A

a form of retailing in which goods and services are sold door-to-door, office-to-office or at home parties rather than from stores in particular locations

A form of nonstore retailing in which firms directly interact with customers to inform them of products and to receive sales orders.

39
Q

E-intermediary

A

An internet distribution channel member that assists in delivering products to customers or that collects information about various sellers to be presented to consumers

40
Q

Online retailing

A

Nonstore retailing in which information about the seller’s products and services is connected to consumers’ computers, allowing consumers to receive the information and purchase the products at home

41
Q

Physical distribution

A

Activities needed to move a product efficiently from manufacturer to consumer

42
Q

Warehousing

A

A physical distribution operation concerned with the storage of good

43
Q

Pricing to maximize profits

A

set the price to sell the number of units that will generate the highest possible total profits;

44
Q

market share objectives

A

pricing is used for establishing market share. The seller is willing to accept minimal profits, even losses, to get buyers to try products.

45
Q

two major pricing objectives

A

pricing to maximize profits and pricing to maximize market share

46
Q

cost-oriented pricing

A

begins by determining total costs for making products available to shoppers, after which a figure for profit is added in to arrive at a selling price;

47
Q

breakeven analysis

A

assesses total costs versus revenues for various sales volumes. It shows, at each possible sales volume, the amount of loss or profit for any chosen sales price. It also shows the breakeven point, the number of sales units for total revenue to equal total costs.

48
Q

Dynamic pricing

A

a strategy where businesses adjust the prices of their offerings to account for changing demand.

49
Q

goals of promotion

A

communicating information, positioning a product, adding value, and controlling sales volume.

50
Q

promotional tools

A

advertising, personal selling, sales promotions, direct [or interactive] marketing, public relations

51
Q

advertising

A

paid, nonpersonal communication by which an identified sponsor informs an audience about a product.

52
Q

advertising media

A

an umbrella term referring to a mixture of all types of media, including the internet, TV, radio, magazines, newspapers, and billboards.

BUS 200 Final (5 decks)

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