marketing chap 11

breakeven analysis

"The sales in units or dollars that are necessary for total revenue to equal total costs at a certain price" is known as

1) the product is unique 2) the product is high in quality, prestige, or exclusiveness, and 3) substitute products are hard to find.

According to your textbook, list the 3 determinants of elasticity of demand.

consumer demand

Based on the Kotler text, what determines the "ceiling" price of a good/service?

total cost

Based on the Kotler text, what determines the "floor" price of a good/service?

Market-Penetration Pricing

Companies set a low initial price to penetrate the market quickly and deeply, attracting many buyers and winning a large market share.

fixed

Costs that do not vary with production or sales level are referred to as ________ costs.

variable

Costs that vary directly with the level of production are referred to as ________ costs.

elastic

If demand changes greatly with a small change in price, we say the demand is ________.

Cost-Based Pricing

The simplest pricing method, entails adding a standard markup to the cost of the product.

market skimming

To skim revenues layer by layer from the market by entering the market with high initial prices. The product's quality and image must support its higher price, and enough buyers must want the product at that price.

upselling

Training sales and reservation employees to offer continuously a higher-priced product that will better meet the customers' needs, rather than settling for the lowest price.

1) Marketing Objectives, 2) Marketing Mix Strategy, 3) Costs, and 4) Organizational Considerations

List the four (4) internal factors affecting market pricing.

1) The Nature of the Market and Demand, 2) Competition, and 3) Consumer Perceptions of Price and Value

List the three (3) external factors affecting market pricing.

Product bundle pricing

Pricing a bundle of individual products at a price lower than if purchased separately.

By-product pricing

Pricing by-products to make a main product's price more attractive

Captive-product pricing

Pricing products which must be used with main product.

Discriminatory pricing

Refers to segmentation of the market and pricing differences based on price elasticity characteristics of the segments.

Going-rate pricing

Setting price based largely on following competitors' prices rather than on company costs or demand. Another term for Competition-Based Pricing.

1) Survival, 2) Current profit maximization, 3) Market-share leadership, 4) Product-quality leadership, and 5) Other objectives

What are the five (5) marketing objectives affecting market pricing

Competition-based pricing

Which of the following involves setting prices based on a rival firm's strategies, costs, prices, and market offerings?

price

________ is the only element in the marketing mix that produces revenue

Customer value-based pricing

________ uses buyers' perceptions of what a product is worth as the key to pricing.