Week 9 Questions Flashcards
Price is defined as?
The money or other considerations exchanged for the ownership or use of a product
Value is defined as
Perceived benefits divided by price
Pricing has ____ effect on a firms profits
A direct
The four common approaches to pricing include?
Price oriented
Distribution oriented
Profit oriented
Competition oriented
Demand oriented
Cost oriented
Profit
Competition
Demand
Cost
Which of the following are examples of price?
School tuition
Insurance premiums
Cash savings
Union dues
School tuition
Insurance premiums
Union dues
The money or other consideration (including other products and services) exchanged for the ownership or use of a product is known as?
Price
Demand oriented pricing approaches weigh which factors most heavily?
Costs to product the product
Expected supply if the product at its time of release
Expected customer tastes and preferences
Number of competitive products on the market
Expected customer tastes and preferences
True or false?
Price is often used as an indicator of quality and value
True
Pricing approaches that consider the production and marketing costs and then add enough to cover direct expenses, overhead, and profit are known as?
Cost oriented
Total revenue less total cost is known as?
Profit
Which of the following is NOT a common approach to pricing?
Distribution oriented
Which of the following are profit oriented approaches to setting a price?
Target profit pricing
Customary pricing
Skimming pricing
Target return pricing
Target profit pricing
Target return pricing
Insurance premiums, credit card interest and doctors fees are all examples of?
Price
_______ oriented pricing approaches weigh factors underlying expected customer tastes and preferences more heavily than other factors
Demand
Cost oriented approaches to pricing considers which of the following in the setting of a products price?
Overhead
Consumer preferences
Manufacturing costs
Profit
Overhead
Manufacture and
Profit
Pricing has ____ effect in a firms profits
A direct
_____ oriented approaches to pricing set the price to reflect the way the marketer wants consumers to interpret prices relative to competitors offerings
Competition
By focusing on target profit pricing or target return pricing, a firm is using a ______ pricing approach
Profit oriented
Marketers consider their pricing strategy for a new product as well as the competitive products available in order to
Estimate demand
ROI analysis provides
A summary of sales and expenditures for the period
Strategies to improve financial performance
Demand estimates required to earn profit
Evaluation of the dollars invested in an initiative
Evaluation of the dollars invested in an initiative
Pricing approaches that consider the production and marketing costs and then add enough to cover direct expenses, overhead, and profit are known as
Cost- oriented
When using competition oriented pricing approaches, price setters stress
What the market is doing
The demand curve is?
A graph showing the number of products that will be sold at a given price
Once marketers have decided on a products price the next step is to
Determine demand
Total revenue= unit ____ x quantity______
Price
Sold
The profit earned from an initiative in comparison to what was invested is called
Return on investment
Cost oriented approaches to pricing considers which of the following in the setting of a products price?
Consumer preferences
Manufacturing costs
Profit
Overhead
Manufacturing costs (production costs)
Profit
Overhead
On a demand curve one of the axes represents the price of a product while the other represents the
Quantity demanded
Marketers consider their pricing strategy for a new product as well as the competitive products available in order to
Estimate demand
Marketers commonly use ____ to relate revenues and costs
Break even analysis
Price times quantity sold is
Total revenue
Break even analysis examines the relationship between which two at various levels of outputs
Maximum value
Total cost
Minimum cost
Total revenue
Total revenue and total cost
Return on investment analysis provides
Evaluation if the dollars invested in an initiative
Pricing approaches that consider the production and marketing costs and then add enough to cover direct expenses overhead and profit are known as
Cost oriented
The demand curve is
A graph showing the number of products that will be sold at a given price
While _____ refer to money received by a business, _____ refer to the money paid out to employees and suppliers
Revenue
Cost
Break even analysis examines the relationship between total revenue and total cost to determine profitability
For a variety of sales prices
At various levels of output
When costs are absolutely minimized
When demand is maximized
At various levels of output
The profit earned from an initiative in comparison to what was invested is called
ROI
Break even analysis can help evaluate the impact of changes in _____ and ______ on _____
Price
Costs
Profit
A marketing manager considers pricing objectives and constraints to
Reduce dependence on product revenues
Determine what kinds of special adjustments to the list price will work best
Narrow the range of choices among the variety of pricing strategies
Estimate the changes to demand that will occur with a price increase
Narrow the range of choices among the variety of pricing strategies
Pricing ____ involve specifying the role of price in an organization’s marketing and strategic plans
Objectives
Marketers commonly use ____ to relate revenues and costs
Break even analysis
Factors that limit the range of prices a firm may set are known as pricing
Constraints
Which of the following is an advantage of using break even analysis?
It calculates the ideal price point
It considers only variable cost and not fixed cost
It is very predictive of changes in consumer demand
It is simple
It is simple
Pricing ______ frequently reflect corporate goals, while pricing ______ often relate to conditions existing in the marketplace.
Objectives
Constraints
Marketing managers may identify profit, market share, social responsibility, or even survival as pricing
Objectives
Price fixing, price discrimination and predatory pricing are
Seen as unethical by some but are currently legal
Legally prohibited
Legal when used as discounts but illegal if used as allowances
Legal but not recommended because they result in the loss of sales
Legally prohibited
Legal and regulatory issues and consumer demand are pricing ____ that limit what a company can charge for its products
Constraints
Global companies often facing pricing strategy challenges due to
Accounting procedures
Individual country differences
Competitor price fixing
Global pricing courts
Individual country differences
Moving from an approximate price level to a final one involves which two of the following?
Estimate demand and revenue
Determine cost, volume, and profit relationships
Make special adjustments to list or quoted price
Set list or quoted price
Make special adjustments to list or quoted price
Set list or quoted price
Demand oriented, cost oriented, and profit oriented approaches can be used to a(n)______ price level for a product
Approximate
Which of the following are pricing strategies that are legally restricted?
Predatory pricing
Price fixing
Loss-leader pricing
FOB origin pricing
Predatory pricing
Price fixing
Setting a price with no variation for product buyers is called a _____ policy
One price
Which of the following are special adjustments to the list or quoted price?
Allowances
Price fixing
Geographical adjustments
Discounts
Allowances
Geographical adjustments
Discounts
In particular,______ strategic approaches may face legal difficulties when applied globally
Low price
The final step is setting product price is
Monitoring and adjusting prices
What is the order of setting a final price?
1 select an approximate price level
2 set the list or quoted price
3 make special adjustments to the list or quoted price
Select all of the following that are common approaches to setting an approximate price level for a product
Demand oriented
Competition oriented
Cost oriented
Service oriented
Demand oriented
Competition oriented
Cost oriented
A ______ policy is also known as fixed pricing
One price
Match each type of special adjustment to a list or quoted price with an example of it
Discounts
Allowances
Geographical adjustments
Promotional
Quantity
FOB origin pricing
Discounts - quantity
Allowance - promotional
Geographical adjustment- FOB origin pricing
In the final step, forms must monitor and adjust prices. To be effective, firms must monitor changes in both the _____ and _____
External environment
Within the firm
