week 6

Question 1

What is the only marketing mix variable that can be changed quickly?

Answer 1

price

Question 2

What is price related to?

Answer 2

total revenue and profit

Question 3

What is price?

Answer 3

the assignment of value, or the amount the consumer must exchange to receive the offering

Question 4

What does price include?

Answer 4

money, effort, time, favors, votes, or anything else that has value to the other party

Question 5

What is inelastic demand?

Answer 5

a change in price results in a little or no change in quantity demanded

Question 6

What is elastic demand?

Answer 6

a change in price causes a great(opposite) change in quantity demanded

Question 7

What are fixed costs?

Answer 7

costs that dont change with the number of units produced (be that 100 or 10,000)

Question 8

What happens as to fixed costs as units produced increases?

Answer 8

the average cost per unit will always decrease

Question 9

What are variable costs?

Answer 9

production costs that are tied to the number of units produced and thus vary depending on volume

Question 10

What goes into variable costs?

Answer 10

cost of raw materials, credit card fees, piece rate labor, sales commissions, delivery expenses

Question 11

What goes into fixed costs?

Answer 11

rent, mortgage payment, insurance, computers, salary of full-time workers, advertising

Question 12

What is Break-Even Point?

Answer 12

the point at which the costs of producing a product is equal to the revenue made from selling the product

Question 13

What is contribution margin?

Answer 13

difference between total revenue and total variable costs

Question 14

What is contribution unit margin?

Answer 14

price - variable costs

Question 15

What does the importance of price depend on?

Answer 15

type of product, type of target market, and purchase situation

Question 16

What is cost based pricing?

Answer 16

calculate price based on company’s costs

Question 17

What is competitive based pricing?

Answer 17

benchmarking on competitor’s prices

Question 18

What is demand based pricing?

Answer 18

setting a price based on what consumers are willing to pay

Question 19

Wha is dynamic pricing?

Answer 19

the practice of varying the price for a product or service to reflect changing market conditions

Question 20

What is captive pricing?

Answer 20

pricing strategy where the price of one product is tied to the price of another product

Question 21

What is price skimming?

Answer 21

a firm charges the highest initial price that customers will pay and then lowers it over time

Question 22

What is penetration pricing?

Answer 22

a marketing strategy implemented to draw customers to a new product or service

Question 23

What is trial pricing?

Answer 23

allows prospective customers to try your product or service for a limited time, usually for free or for a small fee

Question 24

What is anchoring?

Answer 24

influences how buyers perceive advertisements

Question 25

What is buyers' expectations?

Answer 25

The expectations that buyers have concerning the future price of a good, which is assumed constant when a demand curve is constructed

Question 26

What is internal reference prices?

Answer 26

the price point that a customer expects to pay for a product or service, shaped by their past experiences and purchasing history

Question 27

What is odd-even pricing?

Answer 27

a popular psychological marketing technique that involves pricing items with an odd or even ending, such as $0.99 or $1.00

Question 28

What is price lining strategy?

Answer 28

selling different products at different price points to cater to customers who are looking for different levels of quality, convenience, and value

Question 29

What is prestige pricing?

Answer 29

a pricing strategy in which prices are set at a high level, buyers will associate a high price for the product with superior quality

Question 30

What is loss-leader pricing?

Answer 30

prices a product lower than its production cost in order to attract customers or sell other, more expensive products

Question 31

What is predatory pricing?

Answer 31

the illegal business practice of setting prices extremely low in an attempt to eliminate the competition and establish a monopoly

Question 32

What is bait and switch pricing?

Answer 32

advertising an item at an unrealistically low price as 'bait' to lure customers to a store or selling place and then attempting to steer them to a higher-priced item