MK 301ZA

Place the steps of the price setting process in order.

1 Identify pricing objectives and constraints 2 Estimate demand and revenue 3 Determine cost, volume, and profit relationships 4 Select an appropriate price level 5 Set list or quoted price 6 Make special adjustments to list or quoted price

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

Maximization, return

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

Maximizing Current Profit

What factors must be taken into consideration to determine the "right" price for a product?

Will it generate enough sales dollars to pay for the marketing of 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? What are customers willing to pay for the product?

Variable costs are

costs that change in direct relation with quantity produced and sold.

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

maximizing current profits target return

The practice of exchanging products and services for other products and services rather than for money is called ______.

Barter

Fixed cost divided by unit price less unit variable cost is known as ______.

Break Even Point

In the long run, a firm's ______ and those of its distributors set a baseline for a product's price, allowing the firm to both survive and get its product to consumers.

Costs

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

A manufacturer that uses coupons and other small price decreases to create large changes in demand is relying on a(n) ______ demand for the product

Elastic

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

What is an Oligopoly?

Only a few sellers sell similar products

According to the value equation, for a given price, as the ________ increase, the value increases.

Perceived Benefits

Total cost is equal to fixed cost ______.

Plus Variable cost

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

Price

Which element of the marketing mix is part of the profit equation and therefore, has a direct effect on a firm's profits?

Price

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

Pricing Constraints

A pricing objective of increasing sales can have the disadvantage of leading to price cuts that may ______.

Reduce the revenues of related products in the firm's line

A firm with a sales objective will set prices at a level that generates more ______.

Revenue

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

Target return

If a firm prices a product low, it may signal to a customer that ______.

The product is of questionable quality

The demand curve is ___

a graph relating quantity sold and price

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

the higher the price that can usually be charged

Total revenue equals the product quantity sold times ______.

The unit price

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

its marketing plans its strategic plans

Order the types of competitive markets from most competitive to least competitive.

1 Pure Competition 2 Monopolistic Competition 3 Oligopoly 4 Pure Monopoly

If you sell televisions for $250 each, and you have fixed costs of $60,000 and unit variable costs of $50, what is your break-even point?

300 Units FC/ Price - UVC

According to the price equation, to find the actual price, you should do which of the following to the list price?

Add extra fees Subtract incentives and allowances

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

At various levels of output

Blake recently started a security system company. Blake gives Joe, a digital media consultant, a security system for his home if Joe will produce Facebook advertising for Blake's company. This is an example of ______.

Barter

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

Price is the one element in the marketing mix that ______.

Has direct effect on profits

Which three of the following must be done before an approximate price level can be selected?

Identify pricing objectives and constraints Estimate demand and revenue Determine cost, volume, and profit relationships

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

A marketing manager considers pricing objectives and constraints to ______.

Narrow the range of choices among the variety of pricing strategies

To many consumers, price provides information about ______.

The quality of the product

The pricing objective known as unit volume is based on what?

The quantity of product sold

A product is more likely to be price inelastic under which two circumstances?

There are a few substitutes The product is a necessity

Break-even analysis analyzes the relationship between which two at various levels of output?

Total Revenue Total Cost

According to the profit equation, profit is ______.

Total Revenue - Total cost

Which three items would be subtracted from the list price in order to arrive at the final price of a product?

Trade Ins Rebates Discounts

Compared to other company objectives, the sales objective ______.

can be translated more easily into meaningful targets for marketing managers

A target return objective can be described as ______.

setting a specific profit goal, say 20 percent

Market share can be measured as the ratio of ________ compared to the total industry units sold.

the firm's units sold

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

Unit Price

The pricing objective based on the quantity of product sold by a firm is called ______.

Unit Volume

The pricing objective known as ________ can be counterproductive if it is achieved by drastic price cutting that drives down profit.

Unit Volume

The ratio of perceived benefits to price is a product's

Value

At McDonald's, you can get several items together as a meal, for less than purchasing those items separately. This is an example of ______.

Value pricing

cost is the sum of the expenses of the firm that vary directly with the quantity of a product that is produced and sold. (one word)

Variable

Creative marketers engage in _________ when they increase product and service benefits while maintaining or decreasing price.

Value pricing