ch 10 book module

What is cost-plus pricing?

A method of setting prices in which the seller totals all the costs for the product and then adds an amount to arrive at the selling price

Which of the following describes surge pricing?

A pricing strategy in which the price of a product is raised as demand for that product goes up and lowered as demand goes down

Which of the following describes uniform-delivered pricing?

A pricing tactic in which a firm adds a standard shipping charge to the price for all customers regardless of location

What is the name for the fixed costs per unit produced?

Average fixed costs

What is the point at which a firm doesn't lose any money but doesn't make any profit?

Break-even point

What is the last step in the price planning process?

Develop pricing tactics

What is the name for a pricing strategy in which the price can easily be adjusted to meet changes in the marketplace?

Dynamic pricing

Which step in the price planning process involves looking at the economy, the competition, government regulation, consumer trends, and the international environment?

Examine the pricing environment

Which of the following is a set price or price range in consumers' minds to which they refer in evaluating a product's price?

Internal reference price

__________ pricing is the pricing policy of setting prices very low or even below cost to attract customers into a store.

Loss-leader

What are average fixed costs?

The fixed costs per unit produced

What happens when a profit objective is used to determine pricing strategy?

The focus is on a target level of profit growth or a desired net profit margin.

What is the break-even point?

The point at which a firm doesn't lose any money but doesn't make any profit

What is penetration pricing?

The pricing strategy in which a firm introduces a new product at a very low price to encourage more customers to purchase.

What is a freemium strategy?

The term used when a company provides a product in its most basic version free of charge but charges money for upgraded versions of the product

Why do marketers want to see and understand demand curves?

They are primarily used to show the number of units the market will buy in a given time period, at different prices that might be charged.

What are the costs of production that are tied to and vary depending on the number of units produced?

Variable costs

The __________ is primarily used to show the quantity of a product that customers will buy in a given time period, at different prices that might be charged.

demand curve

A trade discount is a __________.

discount off the list price of products to members of the channel of distribution who perform various marketing functions

When customers are sensitive to changes in prices, and a change in price results in a substantial change in demand, the product is said to have __________.

elastic demand

Setting pricing objectives is the __________ step in the price planning process.

first

The amount added to the cost of a product to create the price at which a channel member will sell the product is known as __________.

markup

The pricing strategy in which a firm introduces a new product at a very low price to encourage more customers to purchase it is known as __________.

penetration pricing

When pricing strategies are determined by ___________ objectives, the focus is on a target level of profit growth or a desired net profit margin.

profit