Principles of marketing chapter 13

They 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.

Break-even analysis can help evaluate the impact of changes in ___ and ___ on ____.

price; cost; profit.

Total revenue = unit ___x quantity ___.

price; sold.

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

profit.

Total _____ is equal to the unity price for a product times the quantity of it sold.

revenue

Firms that set ___ objectives believe that increased revenues will in turn lead to increases in market share and profit.

sales

Pricing objectives

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

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

the break-even point

Price (P)

the money or other considerations (including other products and services) exchanged for the ownership or use of a product or service.

Price elasticity of demand

the percentage change in quantity demanded relative to a percentage change in price.

Barter

the practice of exchanging products and services for other products and services rather than for money.

Value pricing

the practice of simultaneously increasing product and service benefits while maintaining or decreasing price

break-even point (BEP)

the quantity at which total revenue and total cost are equal.

Value

the ratio of perceived benefits to price; or Value= (Perceived benefits ÷ price).

Fixed Cost (FC)

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

Variable Cost (VC)

the sum of the expenses of the firm that vary directly with the quantity of a product that is produced and sold.

Total revenue (TR)

the total money received from the sale of a product.

According to the profit equation, profit is

total revenue minus total cost

Profit is

total revenue minus total cost.

The ratio of perceived benefits to price is a product's ___.

value

By increasing ____ and holding all other variables constant, profit will decrease.

variable cost

At break-even point, profit is _____.

zero

Which of the following does NOT cause a shift in the demand curve?

A change in price. This causes a movement along the demand curve but not a shift of the curve itself.

The internet as resulted in which two of the following that affect the competitive environment for pricing?

Companies' ability to change prices frequently. Consumers' access to pricing information from many competitors.

Order the following steps in setting prices, with the first step on top. (Order the second page, not when indicating if you know the question.) Third step.

Determine cost, volume, and profit relationships.

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

Determine cost, volume, and profit relationships. Estimate demand and revenue.

Order the following steps in setting prices, with the first step on top. (Order the second page, not when indicating if you know the question.) Second step.

Estimate demand and revenue.

Pricing constraints

Factors that limit the range of prices a firm May set.

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

Fixed

Order the following steps in setting prices, with the first step on top. (Order the second page, not when indicating if you know the question.) First step.

Identify pricing objectives and constraints.

Which of the following is an advantage of using break-even analysis?

It is simple.

Order the following steps in setting prices, with the first step on top. (Order the second page, not when indicating if you know the question.) Sixth step.

Make special adjustments.

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

Maximizing current profits. Target return.

Which of the following are types of competitive markets?

Monopolistic competition Oligopoly

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

Price and availability of similar products Consumer income Consumer tastes.

Product equation

Product = total revenue - total cost; or profit = (unit price x quantity sold) - (fixed cost + variable cost).

Which of the two of the following are factors that cause price inelasticity?

Products are considered necessities. Few available substitutes.

In which of the following does the market set prices?

Pure competition.

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

Rebates Discounts Surcharges.

Order the following steps in setting prices, with the first step on top. (Order the second page, not when indicating if you know the question.) Fourth step.

Select an approximate price level.

Order the following steps in setting prices, with the first step on top. (Order the second page, not when indicating if you know the question.) Fifth step.

Set list or quoted price

Demand curve

The graphic that relates the quantity sold and price, shiny maximum number of units that will be sold at a given price.

The pricing objective known as unit volume is based on what?

The quantity of product sold.

Total Cost (TC)

The total expense incurred by a firm in producing and marketing a product. Total cost is the sum of fixed cost and variable cost.

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

Total cost Total revenue

____ 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 the sum of with of these

Variable cost Fixed cost.

Unit Variable Cost (UVC)

Variable costs expressed on a per-unit basis for a product.

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

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

Break-even chart

a graphic representation of the break-even analysis that shows total revenue and total costs intersect to identify profit or loss for a given quantity sold.

break-even analysis

a technique that 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 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

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.

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

elastic

Demand factors

factors that determine customers' willingness and ability to pay for products and services

The key element in the definition of pure competition is that the products offered by the different firms are perceived by the consumer to be ____.

identical .

Current profit ____ and target ___ are two strategies used by firms that are pursing a profit pricing objectives.

maximization; return

One a demand curve, one of the axes represents the price of a product while the other represents the ____.

maximum unit sold.

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

objectives.