MKTG 3213- EXAM #2- CH. 9

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A grocer has purchased a truckload of frozen dinners for $3 each. The grover operates on a margin of 30% for frozen food items. What is the retail price to the consumer?

$4.29

What is the main difference between the equations for margin and mark-up?

Margin is price-cost and price and mark-up Price-cost cost

Mark-up can be greater than 100%`

True

which of these does not happen in a smart industry?

companies fight with price only

The 'value' created of a product or service is determined from the perspective of the :

customer

Small changes in price do not have a very large impact on bottom line profits

false

You do not need to understand margin and markup of you are using value-based pricing

false

a change in price in elastic market is likely to show--- change in demand when compared to a similar change in an inelastic market

greater

what is the first step in strategic pricing

knowing how your industry behaves

What is defined as responsiveness of demand to changes in price?

price elasticity

What is price skimming?

setting a high price for a new product to skim maximum revenues

What is flat-rate pricing?

single rate per time period

Value -based pricing will always be more profitable than cost-based pricing.

true

--- is not about what we put into our product, it's what our customers get out of it.

value

Which of the following describes peak load or congestion pricing?

variable rate depending on time of day or week

What us dynamic pricing?

variable rate for each customer

What is the definition of price?

what is exchanges for the product, service or idea

What is the breakeven point?

where profits just cover costs

what is the key difference between cost-based pricing and value-based pricing?

where you start the process


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