BUS 312 Chapter 10 DSM

What is value-added pricing?

Attaching value-added features and services to differentiate a company's offers and support higher prices

What of the following describes cost-based pricing?

Based on the costs of producing, distributing, and selling the product plus a fair rate of return for effort and risk

What are variable costs?

Costs that vary directly with the level of production

__________ is based on a buyer's perceptions of value rather than on the seller's cost.

Customer value-based pricing

__________ are costs that do not vary with production or sales level.

Fixed costs

What is the second step in value-based pricing?

Setting a target price to match customer perceived value

Price is best defined as the __________.

amount of money charged for a product or service

__________ is the fourth step in cost-based pricing.

convincing buyers of product's value

The addition of a standard markup to the cost of the product is known as __________.

cost-plus pricing

In cost-based pricing, __________ is the first step.

designing a good product

The fourth step in value-based pricing is __________.

designing products to deliver the desired value at the target price

In cost-based pricing, designing a good product is the __________ step.

first

In value-based pricing, assessing customer needs and value perceptions is the __________ step in the process.

first

__________ is offering just the right combination of quality and good service.

good value pricing

In cost-based pricing, determining product costs is the __________ step.

second

A demand curve is a curve that __________.

shows the number of units the market will buy in a given time period, at different prices that might be changed

Pricing that starts with an ideal selling price, then targets costs that will ensure that the price is met is known as __________.

target costing

Setting the price based on cost is the __________ step in cost-based pricing.

third

The __________ step in value-based pricing is determining the costs that can be incurred.

third

What does the experience curve illustrate?

The drop in the average per-unit product cost that comes with accumulated production experience

Which of the following defines total cost?

The sum of the fixed and variable costs for any given level of production

__________ are the sum of the fixed and variable costs for any given level of production.

Total costs