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Mkt > Session 17 > Flashcards

Session 17 Flashcards

1
Q

Characteristics of price (6)

A
  1. Only element of marketing mix directly producing revenue
  2. Most flexible marketing mix element
  3. Top factor in consumer choice
  4. Money/value exchanged for ownership or use of a product
  5. Could include non-monetary payments
  6. Value is subjective
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2
Q

What factors does good pricing include? (6)

A
  1. Economics
  2. Psychology
  3. Statistics
  4. Operations Research
  5. Computer science
  6. Courage
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3
Q

What is price floor equal to?

A

Cost to the firm

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3
Q

What is price ceiling equal to?

A

Value to the consumer (willingness to pay)

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3
Q

4 factors that affect price

A
  1. Price sensitivity
  2. Competition and competitors’ prices
  3. Stage in the PLC
  4. Industry practices & law/regulations
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4
Q

What are aspects related to price sensitivity (4)

A
  1. Availability and awareness of substitutes
  2. Ease of comparison
  3. Expense (relative to value bundle)
  4. Shelf-life/ability to stockpile
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5
Q

Competition and competitors’ prices: 4 types of markets

A
  1. Pure monopoly
  2. Oligopoly
  3. Monopolistic competition
  4. Pure competition
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6
Q

What is measure of price sensitivity?

A

Price elasticity

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7
Q

How to guess price sensitivity without data? (4)

A
  1. Availability and awareness of substitutes
  2. Ease of comparison
  3. Expense (relative to value bundle)
  4. Shelf life (ability to stockpile)
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8
Q

How does total expenditure affect price sensitivity?

A
  • If you spend more on a product, you tend to be more price sensitive
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9
Q

How does fraction of total cost affect price sensitivity?

A

If item larger % of total cost, you are more price sensitive

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10
Q

see slide 25-26

A
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11
Q

Pricing objectives (5)

A
  1. Profit
  2. Sales
  3. Brand image
  4. Survive competition
  5. Social responsibility (public goods)
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12
Q

What is ROI formula?

A

ROI = additional profit/investment

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13
Q

What is mkt share formula?

A

MS (mkt sh) = own sales/category or industry sales

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14
Q

On what factors to base price (4)?

A
  1. Cost
  2. Competitors
  3. Value to customers
  4. Desired profit
15
Q

What are cost-oriented (1) and competitor-oriented (2) approaches (with description)?

A
  1. Standard markup (typical markup % for particular category)
  2. Above, at, or below competition (prices dictated by competitors)
  3. Loss-leader pricing (pricing far below competition or even variable costs)
16
Q

What are value-oriented approaches (with description)? (6)

A
  1. Skimming (high price in begining and lowering prices as time passes)
  2. Penetration (price low at the launch of the product)
  3. Prestige (Price high to signal quality/reinforce brand positioning)
  4. Price lining (create different products at various price levels)
  5. Dynamic pricing (continuous matching between demand and supply)
  6. Pay what you want (consumer chooses price)
17
Q

What are profit-oriented approaches (with description)? (3)

A
  1. Target profit pricing (aim for a particular total profit)
  2. Target return-on-sale pricing (aim for particular % return)
  3. Target return-on-investment pricing (aim for particular ROI)
18
Q

What are psychological-oriented approaches (with description)? (5)

A
  1. Price-ending effects/odd-even pricing
  2. Reference prices
  3. Price quantity effects
  4. Price quality inferences (e.g., wines, perfumes)
  5. Endowment effect (sense of ownership increases willingness to pay
    e.g. test drives)
19
Q

Types list prices (2…)

A
  1. One price or flexible pricing
  2. Dynamic pricing
20
Q

Two types of price adjustments

A

Discounts and Allowances

21
Q

Types of discounts (3)

A
  1. Seasonal
  2. Quantity
  3. Cash
22
Q

1 type/example of allowance?

A

Trade-in (B2C)

Mkt (14 decks)

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