MKTG 2400 midterm #2

Which two of the following must be done before an approximate price level can be selected? (2)

(1) Determine cost, volume, and profit relationships (2) Estimate demand and revenue

A shift in the demand curve is the result of

A change in selling direction

When Wilkinson Sword exchanged some of its knives for advertising used to promote its razor blades, it was an example of _______

Barter

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

The 3rd step of the market segmentation process is to develop a(n) _______ grid and estimate the size of markets.

Market-product

Which of the following may mean that the amount paid is not the same as the list price?

Rebates, Discounts, Surcharges

Which of the following may mean that the amount paid is not the same as the list price?

Rebates, surcharges, discounts

Using breakfast, lunch, dinner and snacks as categories helps consumers to ________ the products offered by a fast food brand that may have dozens of choices.

Relate to

A restaurant has identified target market of elderly patrons who eat early in the evening, a slower period for the business. The best communication strategy to reach them would be to

Run a print ad w/ coupons in a senior center program schedule

the next step after developing a market-product grid and estimating market sizes in segmentation process is to _______ appropriate target markets

Select

Market size and compatibility with the organizations objectives and resources are two of the criteria used to

Select Target Markets

Strategies that can be used as part of a firm's profit objectives include which two of the following?

Target return, maximizing current profits

Order the steps in Setting prices (first on top) -determine cost, volume, and profit relationships -set list or quoted price -make special adjustments to list or quoted price -identifying price objectives and constraints -estimate demand and revenue -select an approximate price level

(1) Identify pricing objectives and constraints (2) Estimate demand and revenue (3) Determine cost, volume, and profit relationships (4) Select an approximate price level (5) Set list or quoted price (6) Make special adjustments to list or quoted prices

The break-even point is: (how do you get the BEP)

*Fixed cost* divided by *Unit price* minus *Variable cost* = BEP

For a firm, rent, landscaping, and insurance are best examples of:

*Fixed costs*

Executive salaries are a good example of a _____ cost

*Fixed* cost

____ cost is the sum of the expenses of the firm that are stable and do not change with quantity of a product that is produced and sold.

*Fixed* cost

According to the profit equation, profit is

*Total Revenue* ( - ) *Total Cost*

Direct labor and materials are also known as _________

*Variable costs*

The Internet has resulted in which two of the following that affect the competitive environment for pricing?

A: Consumer's access to pricing information from many competitors Companies' ability to change prices frequently

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

Demographic, Psychographic, and geographic are...

Bases to segment consumer markets

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

Break-even

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's class, a product, or a brand, or the newness of a product or pricing _______ to limit a firm's options

Constraints

Which of the following are the 3 factors that influence demand?

Consumer Tastes, Price and Availability of similar products, Consumer Income

Q: The relationship between price and quantity sold is called the

Demand curve

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

Xerox segments its organizational market in part using the North American Industry Classification System (NAICS) code for potential customers, which is an example of ________ segmentation`

Demographic

Apple's 1997 product matrix for its computer products provides a segmentation strategy based on which two of the following?

Desktop and portable computers and Consumer and professional sectors

An example of a variable cost is

Direct labor used to manufacture the product

A manufacturer that uses coupons and other small price decreases to create large changes in demands is relying on a(n) ______ demand for the product.

Elastic

A product with _______ demand is one in which a slight decrease in price results in a relatively large increase in demand or units sold.

Elastic

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

Elastic

Which of the following are factors that cause price inelasticity?

Few available substitutes and products are considered necessities

Potential for increased profit and similarity of needs potential buyers within a segment are criteria used to...

Form Market Segments

The 80/20 rule helps marketers recognize the importance of

Heavy users

To increase customer value for a given price, the market must

Increased perceived benefits

Despite the recent increases in gas prices, Americans have barely decreased their consumption, which is an example of

Inelastic demand

Out-of-control _______ compared to foreign car companies resulted in the U.S. government investing billions of dollars in U.S. car companies, trying to restructure them to make them competitive

Manufacturing costs

When Apple focuses its marketing efforts on a single segment to which it promotes all of its relevant products, it uses _____ synergies

Marketing

The purpose of developing a market-product grid is to trigger ______ to increase sales and profits

Marketing-actions

Experian Simmons tracks statistics related to usage rate of fast food profiles as well as age and gender, which means it uses ______ segmentation.

Multiple methods of segmentation

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

Negative

In addition to moves of traditional competitors McDonald's and Burger King, Wendy's should also pay attention to the strategies used by which two of the following?

New restaurants like five guys burgers and fries and fast casual restaurants like chipotle

A firm may set goals for its business in terms of profit, sales, or unit volume. These are types of pricing _______.

Objectives

Q: A market-product grid shows the relationship of market segments to products offered or to

Potential marketing actions by an organization

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

Price

Pricing decisions are difficult because

Price simultaneously affects total revenue and total cost

Both of these types of synergies are available in business, but focusing on one may come at the expense of the other

Product and Marketing

Total revenue less (that is, minus) total cost is known as _______

Profit

To utilize sophisticated ______ segmentation, the marketing must know more than age, race and gender about the target market. Expensive third-party research is often required.

Psychographic

Price elasticity of demand is expressed as percentage change in ____ divided by the percentage change in _______. a. quantity demanded; price b. quantity; price c.

Quantity demanded; price

Profit is _________ (minus) ________

Total revenue - Total cost

______ 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

Total cost is equal to Fixed cost plus the _________

Variable cost

At the break-even point, profit is

Zero Break-even point: is the quantity at which total revenue and total cost are equal. Profit then comes from all units sold beyond the BEP

To many consumers, price provides information about the ________ of the product

the *Quality* of the product

The unit variable cost is

the *total variable cost* divided by the *quantity*

Price is defined as __________

the *total* sacrifice by a buyer to get a product and one of the four P's

Fixed cost divided by unit price minus unit variable cost is known as

the Break-even point (BEP)

The ________-_______ point is the quantity at which *total revenue* and *total cost* are *equal*

the Break-even point (BEP)

The intersection of the total revenue curve with the total cost curve on a graph of revenue/costs vs. quantity is called

the Break-even point (BEP)

To determine ____ for a product, you must consider limitations based on customers actual costs, and profits

the Price

Total revenue equals the product quantity sold times

the Unit price