Chap 9-14

____ 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. (Enter one word in the blank)

Fixed

The three factors influencing the demand curve are consumer tastes, consumer income, and

The price and availability of similar products

Why must a marketing manager consider pricing objectives and constraints?

To narrow the range of choices among the variety of pricing strategies

Unit price times quantity sold equals

Total revenue

Legal and regulatory issues and consumer demand are pricing ____ that limit what a company can charge for its products

constraints

In an industry that has an oligopoly , price wars are likely to benefit only

consumer

When a 1 percent decrease in price produces more than a 1 percent increase in quantity sold, the product or service is ______.

elastic

pure competition

many sellers who follow the market price for identical, commodity products

The ____-_____ point is the quantity at which total revenue and total cost are equal. (one word each blank)

Break Eventually

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

The relationship between price and quantity sold is called the

Demand curve

Generally, a seller can charge a higher price for a product

Demand for the product is high

A unit volume objectives for pricing should be used judiciously because higher volume goals can sometimes result in

Drastic price cutting that drives down profits

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

Which product category is the best example of an oligopoly?

Large jetliners, which consist of just Boeing and Airbus

Many Japanese car firms are willing to give up immediate profits for long-term penetration of the marketThis is a pricing objective known as

Managing for long-run profits

Pricing ____ frequently reflect corporate goals, while pricing ______ relate to conditions existing in the marketplace.

Objectives; constraints

What type of competition exists when only a few firms dominate a market?

Oligopolistic competition

The unit variable cost is usually expressed

On a per unit basis

Order the types of competitive markets from most competitive to least competitive. NOTE: The most competitive market should be the top item in your list.

Pure competition Monopolistic competition Oligopoly Pure monopoly

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

Target return

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

Target return Maximizing current profits

In the profit equation, what is multiplied by quantity sold?

Unit price

the ratio of a product's perceived benefits and its price

Value

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

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

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

at various levels of output

Compared to other company objectives, the sales objective

can be translated more easily into meaningful targets for marketing managers

Small changes in price

can have comparably big effects on company profit

The cost of changing prices is a pricing constraint; as a result, most firms

change the prices of their products more often if they sell online

Variable costs ___ production volume

change with

Factors that limit the range of prices a firm may set are known as pricing

constraints

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

demand curve

Oligopoly

few sellers who are sensitive to each other's prices

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

its marketing plans its strategic plans

If a firm prices its products relatively low compared to the cost to develop, with the prospect of gaining a high market share, it is utilizing which profit-oriented pricing objective?

managing for long-run profits

monopolistic competition

many sellers who compete on nonprice factors

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

maximization; return

American firms are sometimes criticized for using which profit-oriented pricing objective, because it results in a short-term orientation?

maximizing current profit

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

maximizing current profit

On a demand curve, one of the axes represents the price of a product while the other represents the

maximum units sold

Pricing ________ involve specifying the role of price in an organization's marketing and strategic plans.

objectives

pure monopoly

one seller who sets the price for a unique product

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

What two elements are shown on a demand curve?

price quantity sold

The percentage change in quantity demanded relative to a percentage change in price is known as

price elasticity of demand

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

pricing constraints

Price elasticity of demand is expressed as percentage change in ___ divided by the percentage change in ___

quantity demanded; price

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

Total _____ is equal to the unit price for a product times the quantity of it sold.

revenue

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

revenues

Firms that set ___ objectives believe that increased revenues will in turn lead to increases in market share and profit.

sales

A target return objective can be described as ______.

setting a specific profit goal, say 20 percent

fixed costs

that remain constant as output changes

How do a firm's channel members affect the price a firm can charge for its products?

the channel members must earn a profit, which raises the price

Selling via the Internet reduces which pricing constraint?

the cost of changing prices

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

the higher the price that can usually be charged

price

the money or other considerations exchanged for the ownership or use of a product or service

according to the profit equation, profit equals

total revenue minus total cost

The unit variable cost is

total variable cost divided by quantity

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

Total cost is the sum of which of these?

variable cost and fixed cost

Total cost represents

variable costs plus fixed 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

Freeze Ice Cream Shop sells its specialty shakes for $3.50 each. In the summer months, the shop typically sells 200 shakes a dayThe shop's owner thinks if he reduces the price to $3 he will increase sales significantly However, when he reduced the price, he only sold about 15 more shakes per day. This represents demand that is

Inelastic

The three elements influencing the demand curve are consumer ___, consumer ____, and the price and availability of similar products

Tastes; income