Smartbook Chapter 11 Marketing
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
