Chapter 10
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
__________ is based on the costs of producing, distributing, and selling the product plus a fair rate of return for effort and risk
Cost-based pricing
Which of the following shows the number of units the market will buy in a given time period, at different prices that might be changed?
Demand curve
Which term refers to the drop in the average per-unit product cost that comes with accumulated production experience?
Experience curve
__________ are costs that do not vary with production or sales level.
Fixed costs
__________ are the sum of the fixed and variable costs for any given level of production
Total costs
What is the first step in value-based pricing?
Assessing customer needs and value perceptions
__________ is the fourth step in cost-based pricing.
Convincing buyers of a product's value
Which of the following statements does not apply to the description of prices?
In recent decades price factors have gained increasing importance.
Which term refers to pricing that starts with an ideal selling price, then targets costs that will ensure that the price is met?
Target costing
__________ reverses the usual process of first designing a new product, determining its cost, and then asking, "Can we sell it for that?"
Target costing
__________ is attaching specific features and services to differentiate a company's offers
Value-added pricing
Under __________, the market consists of many buyers and sellers trading in a uniform commodity.
pure competition
In cost-based pricing, determining product costs is the __________ step.
second
Setting the price based on cost is the __________ step in cost-based pricing.
third
What are variable costs?
Costs that vary directly with the level of production
__________ uses buyers' perceptions of value as the key to pricing.
Customer value dash -based pricing
__________ is based on a buyer's perceptions of value rather than on the seller's cost.
Customer value-based pricing
What is good-value pricing?
Offering just the right combination of quality and good service at a fair price
__________ is the amount of money charged for a product or service, or the sum of the values that customers exchange for the benefits of having or using the product or service
Price
Which of the following statements does NOT describe price?
Price is the only element in the marketing mix that represents costs.
What is the second step in value-based pricing?
Setting a target price to match customer perceived value
What does the experience curve illustrate?
The drop in the average per-unit product cost that comes with accumulated production experience
What is cost-plus pricing?
adding a standard markup to the cost of the product
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
What is the second step in cost-based pricing?
determining product costs
In value-based pricing, __________ is the third step.
determining the costs that can be incurred
In cost-based pricing, designing a good product is the __________ step.
first
The goal of the competition-based pricing is __________.
not to match or beat competitors' price
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
The __________ step in value-based pricing is determining the costs that can be incurred.
third
