ch 13

Pure monopoly

One seller who sets the price for a unique product

A marketing manager considers pricing objectives and constraints to ______.

narrow the range of choices among the variety of pricing strategies

Oligopoly

Few sellers who are sensitive to each other's prices

Monopolistic competition

Many sellers who compete on nonprice factors

Pure competition

Many sellers who follow the market price for identical, commodity products

total revenue

is equal to the unit price for a product times the quantity of it sold. (one word)

Pricing objectives involves specifying the role of price in what two areas of an organization?

its strategic plans its marketing plans

A demand curve is derived by measuring how many units of a product are sold at various ______.

levels of price

What two elements are shown on a demand curve?

price quantity sold

Price elasticity of demand is expressed as percentage change in ________ divided by the percentage change in ________.

quantity demanded; price

A target return objective can be described as ______.

setting a specific profit goal, say 20 percent

When a board of directors determines a specific profit goal, marketing managers usually implement a(n) ______ objective.

target return

Which two strategies can be used as part of a firm's profit objectives?

target return maximizing current profits

The newer a product and the earlier it is in its life cycle, ______.

the higher the price that can usually be charged

The sum of fixed and variable costs is known as ______.

total cost

Profit = (____ x quantity sold) - (fixed cost + variable cost)

unit price

Total cost is the sum of which of these?

Fixed cost Variable cost

What factors must be taken into consideration to determine the "right" price for a product? (Select all that apply)

What are customers willing to pay for the product? Will enough money be made to pay for the development and production of the product? Will the product provide a profit for the company? Will it generate enough sales dollars to pay for the marketing of the product?

On a demand curve, one of the axes represents the price of a product while the other represents the ______.

maximum units sold

Fixed costs ______.

remain at the same level despite changes in production

The demand curve is ______.

a graph relating quantity sold and price

Break-even analysis analyzes the relationship between total revenue and total cost to determine profitability ______.

at various levels of output

Unit price times quantity sold is ______.

total revenue

According to the profit equation, profit is ______.

total revenue minus total cost

______ is the ratio of a product's perceived benefits and its price.

value

Pricing ________ involve specifying the role of price in an organization's marketing and strategic plans.

objectives

Value is defined as ______.

perceived benefits divided by price.

Order the types of competitive markets from most competitive to least competitive. NOTE: The most competitive market should be the top item in your list. Instructions

1. pure competition 2. monopolistic competition 3. oligopoly 4. pure monopoly

Small changes in price ______.

can have comparably big effects on company profit

The demand for a product class, a product, or a brand, or the newness of a product can act as pricing ________ to limit a firm's options.

constraints

The Internet has resulted in which two of the following that affect the competitive environment for pricing?

consumers' access to pricing information from many competitors companies' ability to change prices frequently

According to the price equation, the actual price is the list price less _____, plus extra fees.

incentives and allowances

Total cost represents ______.

variable costs plus fixed costs

Legal and regulatory issues and consumer demand are pricing ________ that limit what a company can charge for its products.

constraints

When the New York Mets set higher ticket prices for games versus the popular New York Yankees than for those versus the less popular Pittsburgh Pirates, its pricing is based on ______.

demand

The chart that shows how many units of a product or service consumers will demand during a specific period of time at different prices is known as the ______.

demand curve

Generally, a seller can charge a higher price for a product when ______.

demand for the product is high

If a firm prices its products relatively low compared to the cost to develop, with the prospect of gaining a high market share, it is utilizing which profit-oriented pricing objective?

managing for long-run profits

Many Japanese car firms are willing to give up immediate profits for long-term penetration of the market. This is a pricing objective known as ______.

managing for long-run profits

American firms are sometimes criticized for using which profit-oriented pricing objective, because it results in a short-term orientation?

maximizing current profit

Which profit-oriented pricing objective is common in many firms because the targets can be set and performance measured quickly?

maximizing current profit

Pricing ________ frequently reflect corporate goals, while pricing ________ often relate to conditions existing in the marketplace.

objectives; constraints

What element of the marketing mix has a unique role in that it is the place where all other business decisions come together?

price

Break-even analysis can help evaluate the impact of changes in _______ and _______ on ________.

price; costs; profit

A firm must know its competitors' ________ in order to best set its own.

prices

Patents and limited competition reduce ________, making high prices possible for technology products early in their life cycles.

pricing constraints

fixed

cost is the sum of the expenses of the firm that are stable and do not change with the quantity of a product that is produced and sold. (one word)

According to the price equation, to find the actual price, you should do which of the following to the list price? (Select all that apply)

Add extra fees Subtract incentives and allowances

Current profit ________ and target ________ are two strategies used by firms that are pursuing a profit pricing objective.

maximization; return

The percentage change in quantity demanded relative to a percentage change in price is known as ______.

price elasticity of demand