chapter 11 exam prep
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
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 of the following strategies?
Customary pricing Loss-leader pricing
Demand-oriented pricing approaches weigh which factors most heavily?
Expected customer tastes and preferences
Demand-oriented
Factors underlying customer tastes and preferences are weighed most heavily.
Which two of the following are the options when choosing a price policy?
One-price Flexible-price
Cost-oriented
Price is set by looking at the production and marketing costs, and then adding enough to cover direct expenses, overhead, and profit.
Competition-oriented
Price setter stresses what "the market" is doing is determining a price.
Cost-oriented approaches to pricing considers which of the following in the setting of a product's price?
Profit Manufacturing costs Overhead
Which of the following are profit-oriented approaches to setting a price?
Target return pricing Target profit pricing
Profit-oriented
The price setter balances both revenues and costs to set a price.
Break-even analysis analyzes the relationship between which two at various levels of output?
Total cost Total revenue
Which of the following are essential to consider when setting a price?
What are customers willing to pay? What will provide a profit to the company? What will pay for all associated costs, including marketing?
A demand curve is
a graph relating quantity sold and price
demand oriented
a new energy efficient light bulb was introduced at $3.00 (about 3 times the price of a conventional bulb) and will last 6,000 hours (about four times the conventional bulb)
Demand-oriented, cost-oriented, and profit-oriented approaches can be used to set a(n) ________ price level for a product.
approximate
Break-even analysis analyzes the relationship between total revenue and total cost to determine profitability
at various levels of output.
The ______________ point is the quantity at which total revenue and total cost are equal.
break even
The point at which the number of units sold generates enough revenue to equal total costs is known as
break even point
A company can encourage its wholesalers and retailers to pay their bills quickly by offering ________ discounts
cash
Variable costs _____ production volume.
change with
If firms set prices with specific consideration of firms challenging them directly for customers, they have adopted a ________ approach to pricing.
competition-oriented
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
Pricing approaches that consider the production and marketing costs and then add enough to cover direct expenses, overhead, and profit are known as
cost-oriented.
_______________ -oriented approaches to pricing regard expected customer tastes and preferences as the most important factors in the decision.
demand
Price ____________ of demand is a measure of how sensitive consumer demand and the firm's revenues are to changes in the product's price.
elasticity
competition oriented
intel slashed its prices to be more similar to those of AMD, a rival computer chip maker
According to the price equation, the actual price is the ________ price less incentives and allowances, plus extra fees.
list
On a demand curve, one of the axes represents the price of a product while the other represents the _____.
maximum units sold
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 ________ frequently reflect corporate goals, while pricing ________ often relate to conditions existing in the marketplace.
objectives and constraints
Cash discounts are offered because they encourage customers to
pay their bills quickly.
One-price and flexible-price are the two options when choosing a price
policy
The money or other considerations exchanged for the ownership or use of a product or service is its
price
Total revenue = unit _____ x quantity ______
price and sold
Pricing decisions are difficult because
price simultaneously affects total revenue and total cost.
__________ ___________ involve specifying the role of price in an organization's marketing and strategic plans
pricing objectives
Total revenue minus total cost is known as
profit
By focusing on target profit pricing or target return pricing, a firm is using a ________ pricing approach.
profit-oriented
Price elasticity of demand is expressed as percentage change in ________ divided by the percentage change in ________.
quantity demanded and price
Total ___________ is equal to the unit price for a product times the quantity of it sold.
revenue
The three factors influencing the demand curve are consumer tastes, the consumer income, and the price and availability of
similar products.
cost oriented
target priced its new patio furniture sets by adding 15 percent to the invoice price it paid for those products
The three elements influencing the demand curve are consumer ________, consumer ________, and the price and availability of similar product
tastes and income
Fixed cost divided by unit price less unit variable cost is known as
the break-even point.
Price is defined as
the money or other considerations exchanged for the ownership or use of a product.
profit oriented
the owner of a vacuum cleaner store sets a target of 20 percent return on sales
To determine ______ for a product, you must consider limitations based on customers, actual costs, and profits. Multiple choice question.
the price
The unit variable cost is
the total variable cost divided by the quantity.
Total revenue equals the product quantity sold times
the unit price
Pricing decisions are challenging because the price chosen will impact which two of these?
total cost total revenue
According to the profit equation, profit is
total revenue minus total cost.
The _________ variable cost is total variable cost divided by the quantity
unit
The ratio of perceived benefits to price is a product's
value
The relationship, or ratio, between a product's perceived benefits and the consumer's costs is known as its Multiple choice question.
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
Creative marketers engage in _________ when they increase product benefits without changing the price. Multiple choice question.
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
variable
