MGT: Chapter 11
_______-oriented approaches to pricing regard expected customer tastes and preferences as the most important factors in the decision.
Demand
________-oriented pricing approaches weigh factors underlying expected customer tastes and preferences more heavily than other factors.
Demand
_______ 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.
Fixed
Match the following pricing issues that have legal implications to the correct description.
Price fixing: conspiracy among firms to set prices Price discrimination: charging different prices to different buyers for goods of like grade and quality Deceptive pricing: Choice, price deals that mislead consumers price deals that mislead consumers Predatory pricing: charging a very low price for a product with the intent of driving competitors out of business
How does a skimming pricing strategy approach price setting?
Prices are set high initially and then lowered in a series of steps.
_______ discounts are also known as functional discounts.
Trade
What four factors must be taken into consideration to determine the "right" price for a product?
Will the product provide a profit for the company? Will enough money be made to pay for the development and production of the product? Will it generate enough sales dollars to pay for the marketing of the product? What are customers willing to pay for the product?
Which of the following is an example of deceptive pricing?
a bait an switch to lure customers into the store to sell them a higher priced product
A one-price policy means there is one price for ______.
all buyers of the product
Demand-oriented, cost-oriented, profit-oriented, and competition-oriented are four approaches used to set Blank______.
approximate price levels
Four approaches used to set ______ are oriented around demand, cost, profit, and competition.
approximate price levels
Break-even analysis analyzes the relationship between total revenue and total cost to determine profitability ______.
at various levels of output
A used car dealer advertises a $5,000 SUV for sale in the local paper. When prospective customers arrive at the dealership they are told that the $5,000 SUV is sold and are offered a $15,000 SUV instead. This is an example of ______.
bait and switch
When a buyer arrives at a retail location and is told that the product she saw in a promotion is out of stock and no rainchecks are available, the retailer might be accused of ______.
bait and switch
Common approaches to pricing are oriented around which four elements?
competition cost demand profit
If firms set prices with specific consideration of firms challenging them directly for customers, they have adopted a ________ approach to pricing.
competition-oriented
A pricing constraint firms face is the price that its _________ are currently charging and likely to charge in the future.
competitors
Factors that limit the range of prices a firm may set are known as pricing ______.
constraints
Legal and regulatory issues and consumer demand are pricing ________ that limit what a company can charge for its products.
constraints
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
Select all of the following that are common approaches to setting an approximate price level for a product.
cost-oriented competition-oriented demand-oriented
Organizations choosing competitor-oriented approaches to set prices might use which two pricing strategies?
customary pricing loss-leader pricing
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 Blank______.
demand curve
A demand curve enables a firm to examine prices Blank______.
in terms of quantity sold
Pricing objectives involves specifying the role of price in what two areas of an organization?
its marketing plans its strategic plans
Price fixing, price discrimination, and predatory pricing are ______.
legally prohibited
Price deals that _____ fall into the category of deceptive pricing.
mislead consumers
A marketing manager considers pricing objectives and constraints to ______.
narrow the range of choices among the variety of pricing strategies
Marketing managers may identify profit, market share, social responsibility, or even survival as pricing ______.
objectives
Pricing ________ involve specifying the role of price in an organization's marketing and strategic plans.
objectives
Pricing ________ frequently reflect corporate goals, while pricing ________ often relate to conditions existing in the marketplace.
objectives; constraints
A ________ policy is also known as fixed pricing.
one price
Setting a price with no variation for product buyers is called a ________ policy.
one-price
The money or other considerations exchanged for the ownership or use of a product or service is its _______.
price
What element of the marketing mix has a unique role in that it is the place where all other business decisions come together?
price
Charging different prices to different buyers for goods of like grade and quality is known as ______.
price discrimination
If a firm sells the same product to different buyers at different prices, it may be considered Blank______.
price discrimination
The percentage change in quantity demanded relative to a percentage change in price is known as ______.
price elasticity of demand
The practice of colluding with other firms to set prices is called ______.
price fixing
A firm must know its competitors' ________ in order to best set its own.
prices
Cost-oriented approaches to pricing consider which three things in the setting of a product's price?
profit overhead production costs
By focusing on target profit pricing or target return pricing, a firm is using a ________ pricing approach.
profit-oriented
Reductions in unit costs for a larger order are known as _______ discounts.
quantity
Price elasticity of demand is expressed as percentage change in ________ divided by the percentage change in ________.
quantity demanded; price
Customers are encouraged to buy a larger number of a single product when a firm offers ______.
quantity discounts
Which of the following are reductions in unit costs for a large order?
quantity discounts
Fixed costs ______.
remain at the same level despite changes in production
Total _______ is equal to the unit price for a product times the quantity of it sold.
revenue
A firm's goal in offering a trade discount is to _____.
reward wholesalers and retailers for marketing functions
Price fixing is the conspiracy among firms to _____.
set prices for a product
When a new product appeals to those segments of consumers who are willing to pay a high initial price to have an innovation first, marketers should use a ________ pricing strategy.
skimming
In what pricing strategy are prices lowered in a series of steps with the demand by those who really desire the product being satisfied at the highest prices?
skimming pricing
Which two are profit-oriented approaches to setting a price?
target profit pricing target return pricing
Price is defined as
the money or other considerations exchanged for the ownership or use of a product.
Break-even analysis analyzes the relationship between which two at various levels of output?
total cost total revenue
Unit price times quantity sold is ______.
total revenue
Reductions off the list price offered to resellers in the marketing channel on the basis of where they are in the channel and the marketing activities they are expected to perform in the future are called ______ discounts.
trade
Profit = (____ x quantity sold) - (fixed cost + variable cost)
unit price
The ratio of perceived benefits to price is a product's _______.
value
Price deals that mislead consumers fall into the category of _______ pricing.
deceptive
Small changes in price Blank______.
can have comparably big effects on company profit
Pricing approaches that consider the production and marketing costs and then add enough to cover direct expenses, overhead, and profit are known as ______ approaches.
cost-oriented
A demand curve is derived by measuring how many units of a product are sold at various Blank______.
levels of price
Value is defined as ______.
perceived benefits divided by price
According to the profit equation, profit is ______.
total revenue minus total cost