Marketing Principles: Chapter 11

Cost-plus pricing refers to:

Summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at the price

Setting a price to achieve an annual target return-on-investment (ROI) is referred to as:

Target return-on-investment pricing

A firms profit equation demonstrates that profit equals _______

Total Revenue- total cost

Price refers to:

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

Barter refers to

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

Adding a fixed percentage to the cost of all items in a specific product class is referred to as:

Standard markup pricing

Setting a market price for a product or product class based on a subjective feel for the competitor's price or market price as the benchmark is referred to as:

Above-,at-, or below-market pricing

Yield management pricing refers to:

Charging different prices to maximize revenue for a set amount of capacity at any given time

Demand refers to:

Consumers willingness and ability to pay for products and services

Deliberately selling a product below its customary price, not to increase sales, but to attract customers attention in hopes that they will buy other products as well, is referred to as:

Loss-leader pricing

The ratio of______ to price is referred to as value

Perceived Benefits

The horizontal axis of a demand curve graph represents:

Quantity Demanded

Prestige pricing refers to:

Setting a high price so that quality or status conscious consumers will be attracted to the product and buy it.

Odd-even pricing refers to:

Setting prices a few dollars or cents under an even number

Target return-on-sales pricing refers to:

Setting prices to achieve a profit that is a specified percentage of the sales volume.

Skimming pricing refers to:

setting the highest initial price that customers really desiring the product are willing to pay when introducing a new or innovative product