MAR 3023- Chapter 13

The typical relationship between price and demand is shown as ______.

a downward-sloping demand curve

When the New York Mets set higher ticket prices for games versus the popular New York Yankees than for those versus the less popular Pittsburgh Pirates, its pricing is based on ______.

demand

A demand curve enables a firm to examine prices ______.

in terms of quantity sold

The pricing objective known as ________ can be counterproductive if it is achieved by drastic price cutting that drives down profit.

unit volume

Which situation represents a consumer-driven pricing action?

A consumer goes to a store to examine a product then goes home an orders it online for a lower price

You sell picture frames at your business, and because they're flying off the shelves you decide to give your salaried managers a 5% raise. What does this do to your break-even point?

Fixed costs increase, so the break-even point does as well.

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

The quantity of product sold

Compared to other company objectives, the sales objective ______.

can be translated more easily into meaningful targets for marketing managers

The relationship between price and quantity sold is called the ______.

demand curve

When only a few firms dominate a market, it is known as ______.

oligopoly competition

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

sales

Movement along a demand curve implies a change in ______.

the price charged

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

Identify pricing objectives and constraints Determine cost, volume, and profit relationships Estimate demand and revenue

What factors must be taken into consideration to determine the "right" price for a product? (Select all that apply)

Will enough money be made to pay for the development and production of the product? Will it generate enough sales dollars to pay for the marketing of the product? What are customers willing to pay for the product?

The slope of a typical demand curve shows that ______.

as price increases, demand decreases

Small changes in price ______.

can have comparably big effects on company profit

The cost of changing prices is a pricing constraint; as a result, most firms ______.

change the prices of their products more often if they sell online

A pricing constraint firms face is the price that its _________ are currently charging and likely to charge in the future.

competitors

Factors that limit the range of prices a firm may set are known as pricing ______.

constraints

Legal and regulatory issues and consumer demand are pricing ________ that limit what a company can charge for its products.

constraints

In the long run, a firm's ______ and those of its distributors set a baseline for a product's price, allowing the firm to both survive and get its product to consumers.

costs

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

Generally, a seller can charge a higher price for a product when ______.

demand for the product is high

Which three items would be subtracted from the list price in order to arrive at the final price of a product?

discounts trade-ins rebates

Price is the one element in the marketing mix that ______.

has a direct effect on profits

Pricing objectives involves specifying the role of price in what two areas of an organization?

its marketing plans its strategic plans

Which of the following product categories is the best example of an oligopoly?

large jetliners, which consists of just Boeing and Airbus

If a firm prices its products relatively low compared to the cost to develop, with the prospect of gaining a high market share, it is utilizing which profit-oriented pricing objective?

managing for long-run profits

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

Firms often pursue ________ as a pricing objective when industry sales are relatively flat or declining.

market share

Current profit ________ and target ________ are two strategies used by firms that are pursuing a profit pricing objective.

maximization; return

American firms are sometimes criticized for using which profit-oriented pricing objective, because it results in a short-term orientation?

maximizing current profit

Which profit-oriented pricing objective is common in many firms because the targets can be set and performance measured quickly?

maximizing current profit

On a demand curve, one of the axes represents the price of a product while the other represents the ______.

maximum units sold

A marketing manager considers pricing objectives and constraints to ______.

narrow the range of choices among the variety of pricing strategies

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

objectives

Pricing ________ frequently reflect corporate goals, while pricing ________ often relate to conditions existing in the marketplace.

objectives; constraints

According the the value equation, an increase or a decrease in ______ will affect value.

perceived benefits

Total cost is equal to fixed cost ______.

plus the variable cost

What element of the marketing mix has a unique role in that it is the place where all other business decisions come together?

price

Which element of the marketing mix is part of the profit equation and therefore, has a direct effect on a firm's profits?

price

A firm must know its competitors' ________ in order to best set its own.

prices

Patents and limited competition reduce ________, making high prices possible for technology products early in their life cycles.

pricing constraints

Price elasticity of demand is expressed as percentage change in ________ divided by the percentage change in ________.

quantity demanded; price

What two elements are shown on a demand curve?

quantity sold price

A pricing objective of increasing sales can have the disadvantage of leading to price cuts that may ______.

reduce the revenues of related products in the firm's line

A firm with a sales objective will set prices at a level that generates more ______.

revenues

A target return objective can be described as ______.

setting a specific profit goal, say 20 percent

When a board of directors determines a specific profit goal, marketing managers usually implement a(n) ______ objective.

target return

Which two strategies can be used as part of a firm's profit objectives?

target return maximizing current profits

Market share can be measured as the ratio of ________ compared to the total industry units sold.

the firm's units sold

The newer a product and the earlier it is in its life cycle, ______.

the higher the price that can usually be charged

The three factors influencing the demand curve are consumer tastes, consumer income, and ______.

the price and availability of similar products

If a firm prices a product low, it may signal to a customer that ______.

the product is of questionable quality

To many consumers, price provides information about ______.

the quality of the product

Total revenue equals the product quantity sold times ______.

the unit price

A product is more likely to be price inelastic under which two circumstances?

there are few substitutes the product is a necessity

Unit price times quantity sold is ______.

total revenue

According to the profit equation, profit is ______.

total revenue minus total cost

Profit = (____ x quantity sold) - (fixed cost + variable cost)

unit price

The pricing objective based on the quantity of product sold by a firm is called ______.

unit volume

At McDonald's, you can get several items together as a meal, for less than purchasing those items separately. This is an example of ______.

value pricing

According to the price equation, to find the actual price, you should do which of the following to the list price? (Select all that apply)

Subtract incentives and allowances Add extra fees

How do a firm's channel members affect the price a firm can charge for its products?

the channel members must earn a profit, which raises the price

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

elastic

Creative marketers engage in _________ when they increase product and service benefits while maintaining or decreasing price.

value pricing

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

increase perceived benefits.

The percentage change in quantity demanded relative to a percentage change in price is known as ______.

price elasticity of demand

Value is defined as ______.

perceived benefits divided by price.

The practice of exchanging products and services for other products and services rather than for money is called ______.

barter

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

Selling via the Internet reduces which pricing constraint?

cost of changing prices

According to the price equation, the actual price is the list price less _____, plus extra fees.

incentives and allowances

A consumer's near-instantaneous access to competitors' prices for the same offering through the use of websites, apps, and smartphones is known as ______.

price transparency

The three elements influencing the demand curve are consumer ________, consumer ________, and the price and availability of similar products.

tastes; income

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

the break-even point