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MKTG Mine - 3010 > Exam 3 - Chp 16 > Flashcards

Exam 3 - Chp 16 Flashcards

1
Q

Price

A

That which is given up in an exchange to acquire a good or service

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2
Q

Revenue

A

The price charged to customers multiplied by the number of units sold

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3
Q

Profit

A

Revenue minus expenses

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4
Q

Return on Investment (ROI)

A

Net Profit after taxes divided by total assets

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5
Q

Market Share

A

A companies product sales as a percentage of total sales for that industry

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6
Q

Status Quo Pricing

A

A pricing objective that maintains existing prices or meets the competitions prices

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7
Q

Demand

A

The quantity of a product that will be sold in the market at various prices for a specified period

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8
Q

Supply

A

The quantity of a product that will be offered to the market by a supplier at various prices for a specified period

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9
Q

Price Equilibrium

A

The price at which demand and supply are equal

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10
Q

Elasticity of Demand

A

Refers to consumers responsiveness or sensitivity to changes in price

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11
Q

Elastic Demand

A

Occurs when consumers buy more or less of a product when the price changes

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12
Q

Inelastic Demand

A

Means that an increase or a decrease in price will not significantly affect demand for the product

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13
Q

Elasticity Formula

A

Percentage change in quantity demand of a good / Percentage change in price of a good

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14
Q

Elastic Demand

A

E is greater than 1

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15
Q

Inelastic Demand

A

E is less than 1

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16
Q

Unitary Demand

A

E is equal to 1

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17
Q

Unitary Elasticity

A

Means that an increase in sales exactly offsets a decrease in prices so total revenue remains the same

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18
Q

Elastic Price

A

Price goes down, revenue goes up or price goes up and revenue goes down

19
Q

Inelastic Price

A

Price goes down, revenue goes down or price goes up and revenue goes up

20
Q

Unitary Price

A

Price goes either up or down and revenue stays the same

21
Q

Elasticity Price Formula

A

(Change in quantity/(Sum of Quantities/2))/((Change in price)/(Sum of prices/2))

22
Q

Yield Management Systems (YMS)

A

A technique for adjusting prices that uses complex mathematical software to profitably fill unused capacity by discontinuing early purchases, limiting early sales at these discounted prices, and overbooking capacity

23
Q

Variable Cost

A

A cost that varies with changes in the level of output

24
Q

Fixed Cost

A

A cost that does not change as output is increased or decreased

25
Q

Average Variable Cost (AVC)

A

Total costs divided by quantity of output

26
Q

Average Total Cost (ATC)

A

Total costs divided by quantity or output

27
Q

Marginal Cost (MC)

A

The change in total costs associated with a one-unit change in output

28
Q

Mark Up Pricing Formula

A

Retail Price= Cost/ 1-Desired return on sales

29
Q

Mark Up Pricing

A

The cost of buying the product from the producer plus amounts for profit and for expenses not otherwise accounted for

30
Q

Keystoning

A

The practice of marking up prices by 100 percent or doubling the cost

31
Q

Profit Maximization

A

A method of setting prices that occurs when marginal revenue equals marginal cost

32
Q

Marginal Revenue

A

The extra revenue associated with selling an extra unit of output or the change in total revenue with a one unit change in output

33
Q

Breakeven Analysis

A

A method of determining what sales volume must be reached before total revenue equals total costs

34
Q

Breakeven Formula

A

=Total Fixed Costs/ Fixed Cost Contribution

35
Q

Selling against the brand

A

Stocking well known branded items at high prices in order to sell store brands at discounted prices

36
Q

Prestige Pricing

A

Charging a high price to help promote a high quality image

37
Q

Price Strategy

A

A basic long term pricing framework which establishes the initial price for a product and the intended direction for movements over the product life cycle

38
Q

Price Skimming

A

A price policy where by a firm charges a high introductory price often coupled with heavy promotion

39
Q

Penetrating Pricing

A

A pricing policy whereby a firm charges a relatively low price for a product initially as a way to reach the mass market

40
Q

Unfair Trade Practice Acts

A

Laws that prohibit wholesalers and retailers from selling below costs

41
Q

Price Fixing

A

An agreement between two or more firms on the price they will charge for a product

42
Q

Resale price Maintenance

A

Retailers must sell a manufacturers product at or above a specific Price

43
Q

Predatory Pricing

A

the practice of charging a very low price for a product with the intent of driving competitors out of business or out of a market

MKTG Mine - 3010 (6 decks)

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