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Marketing 300 uky > Chapter 19&20 exam review > Flashcards

Chapter 19&20 exam review Flashcards

1
Q

the value paid for a product in a marketing exchange

A

Price

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2
Q

oldest form of trad; money may not be involved

A

Barter

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3
Q

profit=

profit=

A

total revenue - total costs

(price x quantity) - total costs

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4
Q

emphasizing price as an issue and matching or beating competitors’ prices; flexibility is an advantage; to compete effectively, a firm must be the low-cost seller; price war with competitors is a danger

A

Price Competition

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5
Q

emphasizing factors other than price to distinguish a product from competing brands; can help a firm build customer loyalty; a firm must be able to distinguish its brand; even in nonprice competition, marketers must be aware of competitors’ brands

A

nonprice competition

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6
Q

for most products, there is an inverse relationship between price and demand

A

The Demand Curve

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7
Q

Changes in buyer’s needs, variations in effectiveness of marketing, presence of substitutes, dynamic environmental factors, seasonality are all examples of

A

Demand Fluctuations

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8
Q

a measure of the sensitivity of demand to the changes in price

A

Price Elasticity of Demand

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9
Q

a change in price causes an opposite change in total revenue

A

elastic demand

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10
Q

a change in price results in a parallel change in total revenu

A

Inelastic demand

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11
Q

Availability of substitutes, amount of income available to spend on goods, and time are all factors that effect

A

Elasticity of Demand

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12
Q

examines what happens to a firm’s cost and revenues when production or sales change by one unit

A

Marginal Analysis

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13
Q

do not vary with changes in the number of units produced or sold

A

fixed costs

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14
Q

the fixed cost per unit produced

A

average fixed cost

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15
Q

the sum of the average fixed cost and the average variable cost, times the quantity produced

A

total costs

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16
Q

vary with changes in the number of units produced or sold

A

variable costs

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17
Q

the variable cost per unit produced

A

average variable cost

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18
Q

the sum of the average fixed cost and the average variable cost

A

average total cost

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19
Q

the extra cost a firm incurs when it produces one more unit of a product

A

Marginal Cost (MC)

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20
Q

the change in total revenue that occurs when a firm sells an additional unit of a product

A

Marginal Revenue (MR)

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21
Q

the point at which the cost of producing a product equal the revenue made from selling the product.

A

Break-even point

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22
Q

BE=

A

fixed costs/ per unit contribution to fixed costs aka(Price-Variable Costs)

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23
Q

9 categories of factors that affect pricing decisions are

A
  1. organizational and marketing objectives 2. Pricing Objectives 3. Costs 4. Other marketing mix variables 5. channel members expectations 6. Customer’s interpretations and response 7. Reference Prices 8. Competition 9. Legal and regulatory issues
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24
Q

marketers should set prices that are consistent with the organization’s goals and mission; Pricing decisions should be compatible with the firm’s marketing objectives

A

Organizational and Marketing Objectives

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25
Q

costs are a crucial issue when establishing price; ideally, goods are sold above costs, exceptions (in the short-term) are: to match competition, to generate cash, to increase market share; marketers must be certain to include all costs when calculating price; cost reduction has been a major focus for marketers

A

Costs

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26
Q

all marketing mix variables are highly interrelated; price can affect demand; price is linked to how it is distributed; promotions vary by price of goods.

A

other marketing mix variables

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27
Q

channel members often expect to receive discounts for large orders and prompt payments; Resellers expect producers to provide support activities such as sales and service training and cooperative advertising; producers must consider the associated costs of discounts and support activities

A

Channel members expectations

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28
Q

what price means or communicates to customers

A

Customer Interpretation

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29
Q

whether the price moves the customer closer to purchase and the degree to which the price enhances satisfaction with the purchase experience and product

A

Customer Response

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30
Q

a price developing in the buyer’s mind through experience with a product

A

internal reference price

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31
Q

a comparison price provided by others

A

external reference price

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32
Q

concerned about both price and quality of a product

A

Value-Conscious

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33
Q

strive to always pay low prices

A

price-conscious

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34
Q

focus on products that signify prominence and status

A

Prestige-conscious

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35
Q

must know competitors’ prices so it can adjust price accordingly; price adjustments must be assessed in terms of competitor’s response

A

Competition

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36
Q

to control inflation, the U.S. federal government may enact: price controls or price freezes; the U.S. has many laws affecting pricing

A

Legal and Regulatory Issues

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37
Q

to control the rate of price increases

A

Price freezes

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38
Q

a reduction off the list price a producer gives to an intermediary for performing certain functions

A

Trade (functional) discounts

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39
Q

a reduction from the list price for purchasing in large quantities

A

quantity discount

40
Q

are aggregated over a stated time period

A

cumulative

41
Q

are onetime price reductions based on the number of units purchased, the dollar value of the order or the product mix purchased

A

non-cumulative

42
Q

two types of quantity discounts

A

Cumulative, non-cumulative

43
Q

price reductions given to buyers for prompt payment or cash payment

A

Cash discounts

44
Q

price reduction given to buyers for purchasing goods or services out of season

A

seasonal discounts

45
Q

a concession in price to achieve a desired goal

A

Allowance

46
Q

a reduction for transportation costs or other costs associated with the physical distance between the buyer and the seller

A

Geographic Pricing

47
Q

the price of the merchandise at the factory

A

Free on Board (F.O.B.) Factory

48
Q

the producer cost of shipping the merchandise to the customer

A

F.O.B. Destination

49
Q

the same price is charged to customers in all geographic locations

A

uniform geographic (postage-stamp pricing)

50
Q

uniform prices for each major geographic zone

A

Zone pricing

51
Q

includes the price at the factory, plus freight to the nearest buyer

A

Base-point pricing

52
Q

the seller absorbs the freight costs

A

Freight Absorption pricing

53
Q

occurs when one unit in an organization sells a product to another unit

A

Transfer Pricing

54
Q

dividing all fixed and variable expenses by the number of units produced

A

actual full cost

55
Q

what it would cost to produce the goods at full plant capacity

A

standard full cost

56
Q

full cost plus a portion of the selling unit’s assets

A

cost-plus investment

57
Q

the market price less a discount to reflect expenses

A

market-based cost

58
Q

what are the 6 steps of the price-setting process

A

1) development of pricing objectives 2) assessment of the target market’s evaluation of Price 3) Evaluation of Competitors’ prices 4) selection of a basis for pricing 5) selection of a pricing strategy 6) determination of a specific price: pricing strategy

59
Q

goals that describe what a firm wants to achieve through pricing; should be consistent with organizational and marketing objectives; can be short-term or long-term and marketers can employ multiple pricing objectives

A

development of pricing objectives

60
Q 
survival: adjust price levels so the firm can increase sales volume to match organizational expenses 
profit
return on investment
market share
cash flow 
status quo 
product quality
A

Pricing Objectives

61
Q

importance of price depends on type of product, types of target market, and the purchase situation; value combines a product’s price and quality attributes; customers use value to differentiate between competing brands

A

Assessment of the target Market’s evaluation of price

62
Q

What are the 3 dimensions for the selection of basis for pricing

A

Cost, demand, competition-based pricing

63
Q

adding a dollar amount or percentage to the cost of production

A

cost-based pricing

64
Q

determine the sellers’ cost and add a specified dollar to it

A

cost-plus pricing

65
Q

adding a predetermined percentage of the cost to the price of the product

A

markup pricing

66
Q

customers pay a higher price when demand for the product is strong and a lower price when demand is weak
marketers must be able to calculate how much customers will buy at different points

A

Demand

67
Q

Pricing influenced by competitors’ pricing; importance of this method increases when: competing prices are homogeneous, organization is serving markets in which price is a key consideration; may necessitate frequent price adjustments

A

Competition-based pricing

68
Q

an approach of course designed to achieve pricing and marketing objectives

A

Pricing strategy

69
Q

charging different prices to different buyers for the same quality and quantity of product

A

differential pricing

70
Q

final price established through buyer/ seller bargaining

A

negotiated pricing

71
Q

one price for primary target market and a different price for another market

A

secondary-marketing pricing

72
Q

systematic or patterns temporary price reductions

A

periodic discount pricing

73
Q

unsystematic temporary price reductions

A

Random discounting Pricing

74
Q

setting the price for new products is one of the most fundamental decisions in the marketing mix

A

new-product pricing

75
Q

changing the highest possible price that buyers who most desire the product will pay

A

Price skimming

76
Q

setting the price below competing brands to penetrate a market and gain market share quickly

A

penetration pricing

77
Q

establishing and adjusting prices of multiple products within a product line

A

product-line pricing

78
Q

basic product in a product line is priced low while required related items are priced higher

A

Captive pricing

79
Q

giving the highest- quality products a line the highest prices

A

premium pricing

80
Q

low pricing on one item in a line with the intention of selling higher-priced items in the line

A

bait pricing

81
Q

limited the number of prices for selected lines of merchandise

A

Price lining

82
Q

attempts to influence a customer’s perception of price to make the product’s price more attractive

A

psychological pricing techniques

83
Q

positioning a moderately priced item next to a more expensive brand to make it seem lower in price

A

Reference Pricing

84
Q

packaging complementary products to be sold at a single price

A

bundle pricing

85
Q

packaging together two or more identical products to be sold at a single price

A

multiple-unit pricing

86
Q

setting a low price on products on a consistent basis

A

Everyday Low Prices (ELP)

87
Q

ending the price with certain numbers that influence buyers’ perceptions of the price

A

odd-even pricing

88
Q

pricing certain goods on the basis of tradition

A

Customary Pricing

89
Q

setting prices at an artificially high level to prestige or high quality

A

Prestige Pricing

90
Q

used by people with great skill or experience in a field or activity; do not relate to the time or effort expended; a standard fee

A

Professional Pricing

91
Q

price is often coordinated with promotion

A

promotion pricing

92
Q

products priced below the usual markup, near cost, or below cost

A

Price leader

93
Q

advertised sales or price-cutting is used to increase sales volume and is linked to a holiday, a season, or other events

A

special-event pricing

94
Q

the pricing of a product at a specific level and simultaneously comparing it to a higher price

A

comparison discounting

95
Q

the final stage in the price-setting process; yields a certain price, which may need refining; helps in setting final price; in absence of government controls, pricing remains, and a convenient way to adjust the marketing mix

A

determination of a specific price: Pricing Strategy

Marketing 300 uky (11 decks)

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