Chapter 10
Companies that adopt value added pricing ___.
Attach value added features and services to differentiate their offers and support their higher prices
Target return pricing uses the concept of a(n) _____, which shows the total costs and total revenue expected at different sales volume levels
Break-even chart
With accumulated production experience and higher volume of production, companies not only become more efficient but also____.
Gain economies of scales
When Mc Donald's and other fast food restaurants offer "value menu" items at surprisingly low prices, they are most likely using ____ pricing.
Good value
If demand changes greatly with a small change in price, we say the demand is ________.
elastic
Under ________, the market consists of many buyers and sellers who trade over a range of prices rather than a single market price.
monopolistic competition
Fixed costs ____.
costs that do not vary with production or sales level
________ pricing uses buyers' perceptions of value as the key to pricing.
customer value based
Effective ________ pricing involves understanding how much value consumers place on the benefits they receive from the product and setting a price that captures that value.
customer-oriented
Which of the following is most likely a risk associated with experience-curve pricing?
Aggressive pricing often gives a product a cheap image
Which of the following involves setting prices based on a rival firm's strategies, costs, prices, and market offerings?
Competition based pricing
___ involves setting prices based on the costs for producing, distributing, and selling the products plus a fair rate of return for effort and risk.
Cost-based pricing
Which of the following shows the number of units the market will buy in a given time period, at different prices that might be charged?
Demand curve
What is usually the first step in cost-based pricing?
Designing the product
Developing an effective integrated marketing mix program involves coordinating price decisions with product design, promotion, and ___ decisions.
Distribution
Cost-plus pricing ___.
Involves adding a standard markup for profit
DivetheBlue, a company marketing deep-sea diving equipment, charges very high prices for its products. Despite the availability of many low-priced products in the market, customers seem to prefer DiveTheBlue, which has earned a reputation for selling high quality products. This exemplifies ____.
Nonprice position
The long run average cost (LRAC) curve indicates the ____.
Per unit cost of output in the long run
The Great Recession of 2008 to 2009 triggered a shift in consumer attitudes toward ___.
Perception of value
___refers to a measure of the sensitivity of demand to change prices.
Price elasticity
Departments or managers that have an influence on pricing include sales manager, finance manager, accountants , and
Production managers
As a manufacturer increases price, the ______ drops
break even volume
Retailers such as Costco and Walmart charge a constant, daily low price with few or no temporary price discounts. This is an example of ________ pricing.
everyday low
When companies set prices, the government and social concerns are ____ factors affecting pricing decisions.
external
________ pricing refers to offering just the right combination of quality and gratifying service at a fair price.
good value
Which of the following involves introducing less-expensive versions of established, brand name products?
good-value pricing
________ pricing involves charging higher prices on an everyday basis but running frequent promotions to lower prices temporarily on selected items.
high to low
___ refers to the amount of money charged for a product or service.
price
________ is the only element in the marketing mix that produces revenue.
price
Price setting is usually determined by ________ in large companies.
product managers
In which situation is the market dominated by one seller?
pure monopoly
Overhead costs ___ as the number of units produced increases.
remain the same
Which of the following is a cost-based approach to pricing?
target return pricing
Which of the following is an external factor that affects pricing decisions in a company?
the nature of the market