Smartbook Chapter 11 Marketing

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Value is defined as ______.

perceived benefits divided by price

Charging different prices to different buyers for goods of like grade and quality is known as ______.

price discrimination

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

quantity demanded; price

Price is defined as

the money or other considerations exchanged for the ownership or use of a product.

Which of the following is an example of deceptive pricing?

A bait an switch to lure customers into the store to sell them a higher priced product.

Select all of the following that are common approaches to setting an approximate price level for a product.

Cost-oriented Competition-oriented Demand-oriented

-oriented approaches to pricing regard expected customer tastes and preferences as the most important factors in the decision.

Demand

Demand-oriented pricing approaches weigh which factors most heavily?

Expected customer tastes and preferences

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

How does a skimming pricing strategy approach price setting?

Prices are set high initially and then lowered in a series of steps.

Which two are profit-oriented approaches to setting a price?

Target return pricing and Target profit pricing

A one-price policy means there is one price for ______.

all buyers of the product

Demand-oriented, cost-oriented, profit-oriented, and competition-oriented are four approaches used to set ______.

approximate price levels

Four approaches used to set ______ are oriented around demand, cost, profit, and competition.

approximate price levels

Break-even analysis analyzes the relationship between total revenue and total cost to determine profitability ______.

at various levels of output

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

constraints

Pricing approaches that consider the production and marketing costs and then add enough to cover direct expenses, overhead, and profit are known as ______ approaches.

cost-oriented

Organizations choosing competitor-oriented approaches to set prices might use which two pricing strategies?

customary pricing loss-leader pricing

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 demand curve enables a firm to examine prices ______.

in terms of quantity sold

Price fixing, price discrimination, and predatory pricing are ______

legally prohibited

In penetration pricing, the initial price of the product is set ______.

low, to appeal to the mass market

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

maximization; return

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

maximizing current profits target return

A marketing manager considers pricing objectives and constraints to ______.

narrow the range of choices among the variety of pricing strategies

Marketing managers may identify profit, market share, social responsibility, or even survival as pricing ______.

objectives

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

objectives

Setting a price with no variation for product buyers is called a ________ policy.

one price

Cash discounts are offered because they encourage customers to ______.

pay their bills quickly

The money or other considerations exchanged for the ownership or use of a product or service is its

price

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

price

If a firm sells the same product to different buyers at different prices, it may be considered ______.

price discrimination

The practice of colluding with other firms to set prices is called ______.

price fixing

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

prices

Cost-oriented approaches to pricing consider which three things in the setting of a product's price?

profit overhead production costs

By focusing on target profit pricing or target return pricing, a firm is using a ________ pricing approach.

profit oriented

Customers are encouraged to buy a larger number of a single product when a firm offers ______.

quantity discounts

Which of the following are reductions in unit costs for a large order?

quantity discounts

Price fixing is the conspiracy among firms to _____.

set prices for a product

When a new product appeals to those segments of consumers who are willing to pay a high initial price to have an innovation first, marketers should use a ________ pricing strategy.

skimming

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

total cost - total revenue

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 relationship, or ratio, between a product's perceived benefits and the consumer's costs is known as its ______.

value

is equal to the unit price for a product times the quantity of it sold.

Total revenue

discounts are also known as functional discounts.

Trade

A used car dealer advertises a $5,000 SUV for sale in the local paper. When prospective customers arrive at the dealership they are told that the $5,000 SUV is sold and are offered a $15,000 SUV instead. This is an example of ______.

bait and switch

When a buyer arrives at a retail location and is told that the product she saw in a promotion is out of stock and no rainchecks are available, the retailer might be accused of ______.

bait and switch

Small changes in price ______.

can have comparably big effects on company profit

A company can encourage its wholesalers and retailers to pay their bills quickly by offering ________ discounts.

cash

If firms set prices with specific consideration of firms challenging them directly for customers, they have adopted a ________ approach to pricing.

competition-oriented

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

When using predatory pricing, a firm sets a very low price for one or more of its products in order to ______.

drive its competition out of business

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 South Korean HDTV manufacturers 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

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

objectives; constraints

________ pricing is seen as the exact opposite of skimming pricing when introducing a new product.

penetration

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

price elasticity of demand

Fixed costs ______.

remain at the same level despite changes in production

A firm's goal in offering a trade discount is to _____.

reward wholesalers and retailers for marketing functions


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