Chapter 13-Pricing Products and Services

Question 1

Price

Answer 1

Money or other considerations exchanged for a good or service

Question 2

Pricing Contraints

Answer 2

Factors that limit the latitude of price a firm may set

Question 3

Pricing Objectives

Answer 3

Expectations that specify the role of price in an organizations marketing and strategic plan

Question 4

Demand Curve

Answer 4

the summation of points representing the maximum number of products consumer will buy at a given price

Question 5

Price Elasticity of Demand

Answer 5

The % change in quantity demanded relative to % change in price

Question 6

Skimming Pricing

Answer 6

The highest initial price that customers really desiring a product are willing to pay

Question 7

Penetration Pricing

Answer 7

Setting a a initial low price on a new product to appeal immediately to a mass market

Question 8

Prestige Pricing

Answer 8

Setting a high price on a product to attract quality or status conscious consumer

Question 9

Price Lining

Answer 9

Pricing a line of products at a number of different specific pricing points

Question 10

Odd-Even Pricing

Answer 10

Setting prices a few dollars of cents under an even number

Question 11

Target Pricing

Answer 11

The practice of deliberately adjusting the composition and features of a product to achieve the target price to consumers

Question 12

Bundle Pricing

Answer 12

The marketing of two or more products in a single “package price”

Question 13

Yield Management Pricing

Answer 13

The charging of different prices to maximize revenue for a set amount of capacity at any given price

Question 14

Standard Markup Pricing

Answer 14

Adding a fixed percentage to the cost of all items in a specific product class

Question 15

Cost-Plus pricing

Answer 15

Summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at a price

Question 16

Experience curve pricing

Answer 16

Pricing method based on production experience, that is, the unit cost of many products and services decline by 10 to 30% each time a firms experience at producing and selling them doubles

Question 17

Target profit pricing

Answer 17

Pricing method based on an annual target of a specific dollar volume of profit

Question 18

Customary pricing

Answer 18

Setting prices dictated by tradition, standardized channels of distribution, or other competitive factors

Question 19

Loss-Leader Pricing

Answer 19

Selling products below their customary pricing to attract attention to them

Question 20

Three demand factors that affect price?

Answer 20

a.) Consumer Tastes b.) Price and availability of other products c.) Consumer income

Question 21

Four General Approaches of finding price level

Answer 21

Demand-orientated
Cost-orientated
Profit-Orientated
Competition-Orientated