MKTG 409 Chp 19 & 20

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Assume a retailer purchases a can of premium dog food at $2.25 and adds 75 cents to the cost, making the price $3. What is the markup as a percentage of selling price?

25%

the FTC is investigating the ACME Corp. for using misleading price tags at its outlet stores to decieve customers into believeing they are getting a bargain pn Wile E. branded items. Which of the following does the FTC believe ACME is guilty of?

Deceptive pricing

external reference price

a comparison prive provided by others

allowance

a concession in price to achieve a desired goal

ACME Corp's widgets have elastic demand. If ACME raises the price of widgets, what will be the result?

a decrease in total revenue

demand curve (d1)

a graph of the quanitity of products expected to be sold at various prices if other factores remain constant

price elasticity of demand

a measure of the sensitivity of demand to changes in price

internal reference price

a price developed in the buyer's mind through the experience with the product

cash discount

a price reduction given to buyers for prompt payment or cash payment

seasonal discount

a price reduction given to buyers for purchasing goods or servies out of season

ACME corp. and spacely inc. are engaged in intense price competition in order to boost market share or thier widgets. this is best described as __________________

a price way

Trade (funtional) discount

a reduction off the list price a producer gives an intemediary for preforming certain functions

freight absorption buying

absorpotion of all or part of actual freight costs by the seller

cost-based pricing

adding a dollar amount or percentage to the cost of the product

cost-plus pricing

adding a specified dollar amount or percentage to the seller's cost

markup pricing

adding to the cost of the prodcut a predetermind percentage of that cost

which of the following should be accomplished after developing pricing objectives

assessing the target market's evaluation of price

which of the follwing is calculated by dividing the varibale costs by the number of units produced?

average variable cost

to compete effectively on a price basis, a firm should __________

be the low-cost seller of the product

which of the following is the point at which the costs of producing equals the revenue made from selling the product

break-even point

which of the following is a major advantage of nonprice competition?

building customer loyalty toward the brand

cost plus investment

calculated as full costs plus the ost of a portion of the selling unit's assets used for internal needs

market-based cost

calculated at the market price less a small discount to reflect the lack of sales effort and other expenses

standard full cost

calculated based on what it would cpst to produce the goods at full plant capacity

actual full cost

calculated by dividing all fixed and variable expenses for a period into the number of units produces

The Federal Trade Commission has established guidelines for _______: If the higher price against which the comparison is made is the price formerly charged for the product, the seller must have made the previous price available to customers for a reasonable time period.

comparison discounting

Which of the following is often used by producers of relatively homogeneous products, especially when the target market considers price to be an important purchase consideration?

competition-based pricing

value consciousness

concerned about price and quality of a product

Which of the following price bases is mostly likely to be used for commercial construction projects or custom made equipment?

cost-plus pricing

fixed costs

costs that do no vary with changes in the number of units produced or sold

variable costs

costs that vary directly with changes in the number of unites produced or sold

quality discounts

deductions from the list price for purchasing large quanities two types- cumulative discounts: quantity discounts aggregated over a stated period of time noncumlative discounts: one-time price reductions based on the number of units purchased, the dollar value of the order, or the prodcut mix purchased

which of the following shows the quantity of prodcuts a firm expects to sell at various prices if other factors remain constant?

demand curve

prestige sensitivity

drawn to products that signify prominence and status

which of the following is NOT one of the factors that influence the assessment of value?

elasticity of demand

price competition

emphasizing price as an issue and matching or beating competitors' prices

nonprice competition

emphaszing factors other than price to distinguish a product fro competing brands

price dicrimination

employing price differentials that injure competition by giving one or more buyers a competitie advantage

odd-even pricing

ending the price with certain numbers to influence buyer's perceptions of the price or product

negotiated pricing

establishing a final price through bargining between the seller and the customer

prodcut-line pricing

establishing and adjusting prices of multiple prodcuts within a product line

Kara Thrace operates a service business that engages in systematically collecting data on brands and prices at competitors' stores. For which stage of the price establishment process would this service be most appropriate?

evaluating competitor's prices

professional pricing

fees set by people with great skill or experience in a particular field

a business's rental off production space is an example of a _______.

fixed cost

break even equation

fixed costs/ per-unti contribution to fixed cost = fixed costs/ price-variable costs

In the absence of government controls, pricing is a(n) ____ and ____ way to adjust the marketing mix.

flexible; convenient

base-point pricing

geographic pricing that combines factory price and freight charges from the base point nearest the buyer

pricing objectives

goals that describe what a firm wants to achieve through pricing

a price is developed in the buyer's mind through experience with the product is a _______

internal reference price

price war

involves two or more companies engaging in intense price competition, often in an effort to boost market share

ACME has a pricing objective to increase its primary product's sales relative to total indutry sales. this best describes a

market share objective

bundle pricing

packaging together two or more complementary products and selling them at a single price

multiple-unit pricing

packaging together two or more identical products and selling them at a single price

sleep train's presidents day sales are an example of

periodic discounting

which pricing strategy rpovides the most flexible introductory base price?

price skimming

transfer pricing

prices charges in sales between an organization's units

refrence pricing

pricing a priduct at al moderate level and displaying it next to a more expensive model or brand

bait pricing

pricing an item in a product line low with the intention of selling a higher-priced item in the line

which of the fllowing pass on to a business customer the cost saving gained through economies of scale

quantity discounts

geographic pricing

reducations for transportation and other costs related to the physical distance between buyers and seller prices may be quotes as free-on-board (FOB) factory or destination FOB factory: the price of the merchandise at the factory before shipment FOB destination: a price indicating the producer is absorbing shipping costs

periodic discounting

temporary reduction of prices on a patterend on systematic basis

random discounting

temporary reduction or prices on an unsystematic basis

marginal revenue

the change in totaly revenue resulting from the sale of an additional until of product

marginal cost (MC)

the extra cost incurred by producing one more unit of a product

average fixed cost

the fixed cost per unit produced

barter

the trading of products

Firefly Space Shuttles is using a strategy of maximizing revenues by making numerous price changes in response to demand, competitors' prices, or environmental conditions. This is best described as _____.

yield management

special-event pricing

advertised sales or price cutting linked to a holiday, a season, or other event

predatory pricing

also called undercutting, involves that intent to set a product's price so low that rival firms cannot compete and therefore withdraw from the maket place

price fixing

an agreement among competing firms to raise, lowers, or maintain price for mutual benfit

Spacely inc.'s sprockets have inelatcis demand. if spacely raises the price of spockerts, what will be the result?

an increase in total revenue

which of the following pricing strategies sets the basic prodcut in a prodcut line low, but the prices on the items required to operate or enhance it are high?

captive pricing

ACME Corp. offers a price discount to encourage prompt payment. Which of the following is it likely to use?

cash discount

uniform geographic pricing

charging all customers the same price regardless of geographic zones

differential pricing

charging different prices to different buyers for the same quality and quantity of product

price skimming

charging the highest possible price that buyers who most desire the product will pay

demand-based pricing

pricing based on the level of demand for the product

zone pricing

pricing based on transportation costs within major geographic zones

competition based pricing

pricing influenced primarily by competitors's prices

customary pricing

pricing on the asis of tradition

everyday low rpices (EDLP)

pricing products low on a consistent basis

psychological pricing

pricing that attempts to influence a customer's perception of price to make a product's price more attractive

captive pricing

pricing the basic product in a product line low, while pricing related items higher

premium pricing

pricing the highest-quality or most versatile products higher than other modles

price leaders

prodcuts priced near or even below cost

which of the following objectives is likely to be more expensive for a firm as the cost of materials and research and development may be greater?

product quality

price lining

setting a limited number of prices fo selected groups or lines of merchandise

comparison discounting

setting a price at a specific level and comparing it with a higher price

Secondary-market pricing

setting one price for the primary target market and a different price for another market

prestige pricing

setting prices at an artificially high level to convey prestige or a quality image

penetration pricing

setting prices below those of competing brands to penetrate a market and gain a significant market share

which of the following pricing objectives can reduce a firm's risks by helping stablizie demand for its products

status quo

price consciousness

striving to pay low prices

Break-even point

the point at which the costs of producing a product equal the revenue made from selling the product

total cost

the sum of average fixed and average variable costs times the quantity produced )average fixed costs + average variable costs) quanitity produced =

average total cost

the sum of the average fixed cost and the average variable cost average fixed cost + average variable cost

deceptive pricing

the use of false or misleading statements or practices to persuade buyers that a product is a better deal than it really is

price

the value paid for a prodcut in a marketing exchange

average variable cost

the variable cost per unit produced

which of the following charges the same price to all customers regardless of geographic location and the price is based on average shipping costs for all customers?

unform geographic pricing

maria is concerned about both price and quality of a product. marketers would bed describe her as which of the following?

value-conscious

price equation

proft = total revenue - total cost profit = (price x quantity sold) - total costs

which of the following product-line pricing strategies is NOT generally used for business products?

psychological pricing

price is a key element in the marketing mix because it directly relates to the generation of total __________

revenue


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