Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

The Marketing mix > Marketing Mix - Pricing > Flashcards

Marketing Mix - Pricing Flashcards

1
Q

Factors affecting pricing

A
  1. Product life cycle
  2. Objectives (corporate and marketing) and the product portfolio
  3. Products position in the market
  4. Competitors Strategies and Prices
  5. Potential Competitors
  6. COSTS –own and competitors
  7. Channels of distribution
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Setting the Price

A

A firm must consider many factors in setting its pricing policy.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Setting the Price

  1. Selecting the Pricing Objective
A
  • Survival
  • Maximum Current Profit
  • Maximum Market Share
  • Maximum Market Skimming
  • Product-Quality Leadership

Market Share MS
Market Growth MG

Cash Cows - High MS Low MG

Stars - High MS HIGH MG

Question Marks - Low MS High MG

Dogs - Low MS Low MG

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Setting the Price

  1. Determining Demand
A

Price sensitivity
- Companies prefer customers who are less price-sensitive

Estimating demand curves
- Inelastic demand occurs when demand hardly changes when there is a small change in price

  • Elastic demand occurs when demand changes greatly for a small change in price

Price Elasticity of Demand

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Setting the Price

  1. Estimating Costs
A

Target Costing
The price of the product is determined by market conditions. The company is aprice takerrather than aprice maker.
The minimum required profit margin is already included in the target selling price.
It is part of management’s strategy to focus on cost reduction and effective cost management.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Setting the Price

  1. Analysing competitors
A

Market Price

Production Costs

Competitor Reaction

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Setting the Price

  1. Marginal Cost Pricing
A

Margin - The percentage margin is the percentage of the final selling price that is profit.

Markup - A markup is what percentage of the cost price do you add on to get the selling price.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q
  1. Target-Return Price
A

Break Even Chart, return the target

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q
  1. Perceived Value Pricing
A

Perceived value pricing
Value = Benefits - Costs

Effective customer-oriented pricing involves understanding how much value consumers place on the benefits they receive from the product and setting a price that captures that value

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q
  1. Value Pricing
A

Value pricing is not just setting lower prices; it is a matter of reengineering the company’s operations to become a low-cost producer without sacrificing quality

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q
  1. Discount Pricing
A

Discount pricing, is when companies adjust their list prices, and give discounts and allowance for early payments, volume purchases, and off-season buying.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q
  1. Going-Rate Pricing
A
  • Follow the Leader
  • Occurs where there is no differentiation between products
  • Match going rate to retain market share
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q
  1. Pricing New Products: Skimming pricing strategy
A

Skimming:

  • Demand is likely to be inelastic
  • Different price-market segments, thereby appeals to those buyers first who have a higher range of acceptable prices
  • Little is known about product costs
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q
  1. Pricing New Products: Penetration pricing strategy
A

Penetration:
- Demand is likely to be elastic

  • Competitors are likely to enter the market quickly
  • No distinct and separate price-market segments
  • There is the potential of large savings in production & marketing costs based on volume
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Market Skimming

A
  • High price charged
  • ‘Just’ worthwhile for some segments to adopt new product
  • As competitors enter market, price is lowered
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Market Penetration

A
  • Low initial price charged
  • Attract large volume sales quickly
  • Large market share
  • High volume sales save costs
  • Economies of scale on production and distribution
17
Q

Pricing New products

Step 6: 3 Cs Model

A

Low Price - No possible profit at this price

Costs

Competitors’ prices and prices of substitutes

Customers assessment of unique product features

High price - No possible demand at this price

18
Q

Step 6: The Final Price

A
  • Impact of other marketing activities
  • Company pricing policies
  • Gain-and-risk sharing pricing
  • Impact of price on other parties
19
Q

Place: Distribution

A

All those organisations through which a product must pass between its point of production and consumption

A way in which goods move from the producer to the end user

20
Q

Functions of Channel Intermediaries

A

Reconciling needs of
producers and consumers

Improving efficiency

Improving accessibility

Providing specialist services

21
Q

Distribution channels - Consumer goods

A

Producer - Agent - Wholesaler - Retailer - Consumer

22
Q

Distributional channels for industrial goods

A

Producer - agent - distributor - Industrial consumer

23
Q

Service Channels

A

Service provider to consumer

Service provider to agent to business customer

24
Q

Managing Channel Conflict

A

Sources.

  • Differences in goals.
  • Differences in desired product line.
  • Multiple distribution channels.
  • Inadequacies in performance.
Avoiding and resolving conflict. 
Developing a partnership approach.
Training.
Market positioning.
Improving performance.
Channel ownership.
Coercion

The Marketing mix (9 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions