MARKETING CH 14 + 15

The percentage change in the quantity of one product demanded compared with the percentage change in price in another product is called ________-price elasticity.

cross

Which of the following is one of the Cs of the five Cs of pricing?

customers

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

demand

A _________ center is a facility where goods are received, stored, and shipped to company stores.

distribution

In a marketing channel, the sales department must coordinate delivery with ______.

distribution centers

For most products, demand increases as the price decreases. Because of this general trend, demand curves usually have a(n) ______ slope.

downward

Prestige products or services do not follow the ______ curve.

downward-sloping demand

Which of the following types of theories is the maximizing profits strategy based on?

economic

When a 10% decrease in price produces more than a 10% increase in quantity sold, the product or service is responsive to price changes and is considered to be ______.

elastic

Which strategy is used by firms that believe increasing volume of sales will help the firm more than increasing profits?

Sales-oriented strategy

If a restaurant reduces the price of a hamburger by 25% and sales increase by more than 50%, which of the following describe the demand for the hamburger?

price sensitive elastic

In preparation for introducing a new doll to the market, a toy company advertises and creates so much demand that little girls are lined up at the stores, determined to be the first to own one. The toy company sells these first dolls at twice their actual retail value. This is an example of ______.

price skimming

Competition, channel members, costs, customers, and company objectives are the five critical components of ______.

pricing

By focusing on target profit pricing, maximizing profits, or target return pricing, a firm is implementing a _____ orientation.

profit

What type of orientation is exemplified by target return pricing?

profit

Firms usually implement target ________ _________ to stimulate a certain level of sales at a certain profit per unit.

profit pricing

Sometimes firms selling a pioneering product will set a very low price in order to attract many customers before competitors enter the market. Which type of orientation does this demonstrate?

sales

The five Cs of pricing are examples of pricing ______.

strategies

Another term for marketing channel management is ______ management.

supply chain

When a firm is aiming for a particular amount of profit as its overriding concern, it usually implements ______.

target profit pricing

Firms that are less concerned with the level of profits and more interested in the rate at which profits are generated relative to their investments tend to use ______.

target return pricing

Manufacturers make products and sell them to ______, who resell the merchandise to retailers.

wholesalers

Assuming the economy and other factors stay the same, a downward-sloping demand curve for a product shows which of the following?

As price decreases, demand increases. As price increases, demand decreases.

Which of the following activities take place at distribution centers?

Receipt of goods Storage of goods Shipment of goods

What term describes a facility that receives, stores, and redistributes merchandise?

Distribution center

Channel members include which of the following?

Retailers Manufacturers Wholesalers

Which pricing strategy is involved when a company adopts retail prices that are typically somewhere between the product's regular price and the sharply discounted sale prices that competitors occasionally offer?

Everyday low pricing

Which of the following do you need to know to calculate target return price?

Expected unit sales Fixed costs Variable costs

What is a wholesaler?

A company that buys merchandise from manufacturers and resells it to retailers

A demand curve shows that a company will sell 10,000 units if it prices its new product at $200 per unit, but it will sell 20,000 units if it reduces the price to $75. Where should the company set the price of the new product in order to maximize profits?

$200

What is a useful technique that enables managers to examine the relationships among cost, price, revenue, and profit over different levels of production and sales?

Break-even analysis

Which of the following are considered part of the five Cs of pricing?

Channel members Competition Company objectives Customers

Which pricing strategy should retailers use to tap into consumer excitement about buying something at a special low price for a limited time?

High/low pricing

What is the most direct supply chain in a simple economy?

Manufacturer to consumer

Which of the following is a firm implementing when it uses a mathematical model to identify the price at which the firm will make the most money possible?

Maximizing profits strategy

Which of the following are types of strategies that could be implemented in a profit orientation strategy?

Maximizing profits strategy Target return pricing

Break-even analysis examines the relationships between which of the following?

Price Cost

What term describes the ratio of change in a price and its effect on the quantity of the product demanded?

Price elasticity of demand

When Apple first introduced the iPhone, some consumers were willing to pay the premium $599 price tag. What pricing strategy was Apple using?

Price skimming

Marketing channels include which of the following?

Stores Warehouses

Which is the best definition of price?

The overall sacrifice a consumer is willing to make to buy a product or service

How does penetration pricing discourage rival companies from entering the market?

The profit potential in the market is relatively low. Competitors who enter the market will temporarily face higher unit costs.

Which of the following accurately characterize demand curves?

They show how much consumers will demand during a specific period at different prices. They relate demand to prices while assuming everything else remains unchanged.

Which of the following are reasons that firms implement a market penetration pricing strategy?

To build sales To earn profits To establish market share To discourage competitors

When firms compete by lowering prices, they are engaged in ______.

a price war

Which of the following is one of the five Cs of pricing?

channel members

Which is one of the five Cs of pricing?

company objectives

The five Cs of pricing are company objectives, customers, cost, channel members, and _______

competition

Which of the following is one of the five Cs of pricing?

competition

Which pricing strategy appeals to consumers because it reduces their need to spend time comparing prices at various stores?

everyday low pricing

True or false: A firm with a primary objective of very high sales growth will have the same pricing strategy as a firm with a primary objective of being a quality leader.

false

true or false: A direct, manufacturer-to-consumer supply chain is a poor choice in a simple economy.

false

true or false: The sales department of a company rarely coordinates with the manufacturing department.

false

How is total cost calculated?

fixed costs + variable costs

Which pricing strategy features frequent sales, during which prices are lowered for a short time?

high/low pricing

A demand curve enables a firm to examine prices ______.

in terms of demand and the firm's objectives

According to the cross-price elasticity of demand, when the price of DVD players drops, the demand for DVDs is likely to ______.

increase

When a 10% decrease in price results in a less than 10% increase in quantity sold, the demand for the product or service is described as ______.

inelastic

The goal of a(n) ___ strategy is to generate profit and establish a new product or service in the market as quickly as possible.

market penetration

Which of the following is another term for target return percentage?

markup

When a new product or service is launched, what type of pricing strategy attempts to attract customers quickly by offering a very low price at first?

penetration pricing

Products that cost a lot of money but that people buy anyway because of the status and exclusivity that they project are called ________ products

prestige

The equation for price elasticity of demand is the percentage change in quantity demanded divided by percentage change in ______.

price

The overall sacrifice a consumer makes to acquire a product or service is known as

price

A distribution center primarily coordinates ______.

the transportation and storage of merchandise

What information is gained by adding variable and fixed costs together?

total cost

True or false: Customers are one of the five Cs of pricing.

true