Marketing Exam CH 13

compared to other company objectives, a sales oriented firm:

sets prices very low to generate new sales even if profits suffer

equation for elasticity

% changed in Q demanded/ % change in price

firms engaged in competitor orientation might use which strategies?

- competitive parity - status quo pricing

When a few firms dominate the market it is known as?

an oligopoly

When developing a pricing strategy, channel members should:

clearly communicate their pricing goals to one another.

if firms strategize according to the premise that they should measure themselves primarily against firms challenging them directly for customers, they have adopted a:

competitor orientation

the percentage change in the quantity of one product demanded compared with the percent change in price in another product is _____ price elasticity.

cross

the _____ makes up one of the Cs of the five.

customer

When there are many firms competing for customers in a given market, but the products are differentiated, it is known as:

monopolistic competition

monopolistic competition

occurs when there are many firms competing for customers in a given market but their products are different. ex apparel stores

firms engage in price wars to:

preserve their market share

When consumers perceive that different companies sell products that are commodities, it is known as:

pure competition

firms that believe increasing sales will help the firm more than increasing profits use the:

sales orientation strategy

variable cost per unit times quantity equals: a) break even point b) total cost c) total revenue d) total variable cost

d) total variable cost

at the break even point, profits on the sale of a product are:

zero

In the customer orientation strategy, firms might sell their products or services at high prices in order to:

- communicate exclusivity - enhance the company's reputation and image - enhance the value of the products in consumers minds

If McDonalds reduced the price of a Big Mac by 25% and sales increased by more than 50%, the firm could describe demand as:

- elastic - price sensitive

Some limitations to break even analysis are:

- it cannot predict how many units we sell - that firms have to perform several analyses at different quantities - that it represents an average price to account for variances

the types of strategies that could be implemented in a profit orientation strategy include:

- maximizing profits strategy - target return pricing - target profit pricing

break even analysis examines the relationship between which of the following? - profit - value - cost - price

- profit - cost - price

demand curves can be described as:

- showing many units of a product or service consumers will demand during a specific period of time at different prices - relating to demand to prices assumes that everything else remains unchanged

a break even analysis graph contains which of the following: - total revenue - fixed costs - total costs - demand curve

- total revenue - fixed costs - total costs

channel members include which of the following? - consumers - wholesalers - manufacturers - retailers

- wholesalers - manufacturers - retailers

The five C's are:

1. company objectives 2. customers 3. cost 4. channel members 5. competition

total cost is:

VC + FC

Example of pure competition

agricultural products like corn and soybeans, where many sellers provide essentially identical products.

a downward sloping demand curve for a product shows:

as price increases, demand decreases

Price is the ____ of the 4 Ps and therefore proves to be the most challenging to manage. a) easiest b) least understood c) least susceptible to competitive forces d) most understood

b) least understood

A useful technique that enables managers to examine the relationship among cost, price, revenue, and profit over different levels of production and sales is called _____ _____ analysis.

break even

variable costs ____ production volume.

change with

Some stores attempt to compete, not by setting low prices, but by justifying higher prices through high levels of personalized service. this is an example of a _____ orientation to pricing.

customer

Price is the one element in the marketing mix that: a) is the least important b) does not require decision making c) generates costs d) generates revenues

d) generates revenues

by focusing on target profit pricing, maximizing profits, or target return pricing, a firm is implementing a: a) competitor orientation b) customer orientation c) sales orientation d) profit orientation

d) profit orientation

an example of a nonmonetary sacrifice made in acquiring a product or service is: a) shipping and handling b) taxes c) travel costs d) time

d) time

price times quantity is: a) break even point b) total variable cost c) total profit d) total revenue

d) total revenue

For most products, demand increases as the price decreases. Bc of this general rend, demand curves usually have a _____ slope.

downward

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. TRUE or FALSE?

false

The more substitute products there are available, the ____ the price elasticity of demand for a given product will likely be:

higher

Price is best defined as:

the overall sacrifice a consumer is willing to make to acquire a specific product or service

the relationship between a products benefits and the consumers costs is known as its _____.

value