mkt 304 CH 11 SmartBook

Which of the following are essential to consider when setting a price?

- What will provide a profit to the company? - What will pay for all associated costs, including marketing? - What are customers willing to pay?

Select all of the following that are common approaches to setting an approximate price level for a product.

Cost-oriented Competition-oriented Demand-oriented

A portion of a ________ curve is shown here. Q1->DOWN TO Q2->

Demand

Price deals that ________ fall into the category of deceptive pricing.

mislead consumers

Total revenue minus total cost is known as

profit

involves setting a high price so that quality- or status-conscious consumers will be attracted to the product and buy it.

Blank 1: Prestige Blank 2: pricing

_______-oriented approaches to pricing regard expected customer tastes and preferences as the most important factors in the decision.

Demand

Demand-oriented pricing approaches weigh which factors most heavily?

Expected customer tastes and preferences

With which profit-oriented pricing objective is a firm likely to price its products relatively low compared to their cost to develop, with the prospect of gaining a high market share?

Managing for long-run profits

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

Pricing objectives

Which of the following are reductions in unit costs for a large order?

Quantity discounts

_______ discounts are also known as functional discounts.

Trade

Which of the following is an example of deceptive pricing?

a bait an switch to lure customers into the store to sell them a higher priced product

A demand curve is _____.

a graph relating quantity sold and price

A one-price policy means there is one price for ______.

all buyers of the product

Demand-oriented, cost-oriented, and profit-oriented approaches can be used to set a(n) ________ price level for a product.

approximate

______________ - ________________analysis is a technique that analyzes the relationship between total revenue and total cost to determine profitability at various levels of output.

break; even

A pricing constraint firms face is the price that its _________ are currently charging and likely to charge in the future.

competitors

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.

constraint

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

constraints

_______ - _______ approaches to pricing start with production and manufacturing costs and then add enough to cover direct expenses, overhead, and profit. (Enter one word in the blank.)

cost oriented

Pricing approaches that consider the production and marketing costs and then add enough to cover direct expenses, overhead, and profit are known as ______ approaches.

cost-oriented

Price deals that mislead consumers fall into the category of ______ pricing.

deceptive

Price __________ of demand is a measure of how sensitive consumers demand and the firm's revenues are to changes in the product's price.

elasticity or elasticity of demand

Prestige pricing means the organization deliberately prices a product ________ so that ________ consumer will be attracted to the product and buy it.

high; quality-conscious

Price fixing, price discrimination, and predatory pricing are ______.

legally prohibited.

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

If total cost is greater than total revenue, then profit is

negative.

Marketing managers may identify profit, market share, social responsibility, or even survival as pricing ______.

objectives

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

A ________ policy is also known as fixed pricing.

one-price

Setting a price with no variation for product buyers is called a ________ policy.

one-price

A firm may introduce a new product with ________pricing by using a low initial price designed to appeal to the many customers that are believed to be price sensitive.

penetration

When using _____ pricing, a firm sets a very low price for one or more of its products with the specific intent to drive its competition out of business. (Enter one word in the blank.)

predatory

Proving the practice of ________ is difficult because it must be shown that there was an explicit attempt to destroy a competitor with the use of a low price.

predatory pricing

The money or other consideration (including other products and services) exchanged for the ownership or use of a product is known as ______.

price

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

price

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

price elasticity of demand

Which of the following are pricing practices that are legally restricted?

price fixing predatory pricing

By focusing on target profit pricing or target return pricing, a firm is using a ________ pricing approach.

profit-oriented

A price reduction offered to channel members for featuring the manufacturer's product in their advertising or selling activities is called a(n) ______ allowance.

promotional

Instead of offering a ________ allowance to retailers, some manufacturing companies like P&G have chosen to use an everyday low pricing (EDLP) strategy. Multiple choice question. cash

promotional

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

quantity demanded; price

Customers are encouraged to buy a larger number of a single product when a firm offers ______.

quantity discounts

Which of the following are important types of discounts for marketing strategy? (Select all that apply)

quantity discounts seasonal discounts cash discounts

Reductions in unit costs for a larger order are known as ______ discounts.

quantity or bulk

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

revenue

A firm's goal in offering a trade discount is to _____.

reward wholesalers and retailers for marketing functions

When a firm introduces an innovative new product, it may choose ________ pricing, setting the highest initial price that customers who really desire the product are willing to pay.

skimming

In ________, prices are lowered in a series of steps with the demand by those who really desire the product being satisfied at the highest prices

skimming pricing

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

the higher the price that can usually be charged

Price is defined as_____________. a) the money or other considerations exchanged for the ownership or use of a product. b) a judgment by a consumer of the worth and desirability of a product or service relative to substitutes. c) any factor that determines consumers' willingness and ability to pay for products and services. d) the practice of exchanging products and services for other products or services.

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

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

total cost total revenue

According to the profit equation, profit is ______.

total revenue minus total cost.

For _______ discounts, reductions off the list price are offered to resellers in the marketing channel on the basis of where they are in the channel and the marketing activities they are expected to perform in the future.

trade

Total revenue equals the product quantity sold times

unit price

Competition-oriented approaches to pricing

what "the market" is doing

When using competition-oriented pricing approaches, price setters stress _____.

what "the market" is doing

________-oriented pricing approaches weigh factors underlying expected customer tastes and preferences more heavily than other factors.

Demand

Cost-oriented approaches to pricing considers which of the following in the setting of a product's price?

Profit Manufacturing costs Overhead

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

constraints

Match the following pricing issues that have legal implications to the correct description. Instructions price fixing.... price discrimination..... deceptive pricing.... predatory pricing....

price fixing.... Conspiracy among firms to set prices Conspiracy among firms to set prices price discrimination..... Charging different prices to different buyers for goods of like grade and quality deceptive pricing.... Price deals that mislead consumers Price deals that mislead consumers predatory pricing.... Charging a very low price for a product with the intent of driving competitors out of business

When a manufacturer offers a grocery retailer an extra amount of free product for including this product in weekly advertising and in-store sales, this is considered a ________ allowance.

promotional

Match each type of discount with the motivation for offering it. quantity discount.... seasonal discount.... trade discount.... cash discount....

quantity discount.... To encourage customers to place larger orders To encourage customers to place larger orders seasonal discount.... To encourage buyers to stock inventory earlier than their demand would require trade discount.... To reward channel members for future marketing efforts cash discount.... To encourage retailers to pay their bill quickly

When a new product appeals to those segments of consumers who are willing to pay a high initial price to have an innovation first, marketers should use a ________ pricing strategy.

skimming

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 ______.

value