marketing week 6

price elasticity types

elastic: consumers buy more or less of a product when the price changes, Inelastic: an increase or decrease in price will not significantly affect demand

select a pricing strategy

everyday low prices, reference pricing, portfolio pricing, bundle pricing, multiple-unit pricing, odd-even pricing, captive-product pricing, single-price, bait pricing, leader pricing,

Video kiosks and airport retailing are not elements of distribution.

false

Vertical Marketing Systems are channel arrangements that are focused on improving efficiency and integration to achieve better marketing outcomes.

true

target market's evaluation of price

type of product, type of target market, purchase situation

what is price?

what you pay for something or...the value that you exchange for the benefits of having or using the product/service value = benefits - cost

buying requirements

which channel and intermediaries will satisfy the buy needs of the consumer

profit

which channel is the most profitable

stages for establishing prices

1. Development of pricing objectives 2. Assessment of target market's evaluation of price 3. Evaluation of competitors' prices 4. Selection of a basis for pricing 5. Selection of a pricing strategy 6. Determination of a specific price

determine a specific price

1. competition 2. distribution strategy 3. promotion strategy 4. the relationship of price to quality 5. substitutes 6. complements

external factors on pricing decision

1. demand for your product 2. competition 3. economy

internal factors on pricing decisions

1. marketing objectives 2. marketing mix strategy 3. costs

Our company sells flat screen TVs to retailers for $1,000. The total fixed costs for plant operation is $60,000. It costs us $700 to make each TV. How many TVs does MKT300 Industries need to sell to break even?

200

unitary elasticity

an increase in sales exactly offsets a decrease in prices, and revenue is unchanged

Intensive distribution means that a firm tries to place its products and services in:

as many outlets as possible

Which of the following is the best example of a captive pricing strategy:

buying a printer for your computer and needing to buy the print cartridges for that model

exclusive distribution

cartier

select a basis for pricing

cost, demand, competition, new product

If demand for a good is extremely elastic, raising the price of that good typically has what effect on total revenue?

decreases

buyer requirements

information, convenience, variety, surrounding services

break-even pricing

is where a company produces the same amount of revenues as expenses break even quantity = total fixed costs / (selling price - variable cost)

Adjusting your price levels so that your company can maintain or increase sales relative to competitors' sales best describes with pricing objective?

market share

intensive distribution

mcdonalds

selective distribution

nespresso

location choice

population, economic base, competition & saturation

pricing objectives

profit, status quo, market share

advantages of direct to consumer

reduced costs, lower prices, coverage, convince, limitations include: customer complaints,

markup pricing

setting price where price = markup + cost markup on selling price = (selling price-cost)/selling price cost = (1-markup on selling price) (selling price) selling price = cost / (1-markup on selling price)

evaluate competitors prices

sources of competitors pricing info, importance of knowing competitors' prices, customer view of pricing and marketing

price elasticity

tells us how much the demand for a product will change with a change in price e = % of quantity demand / % change in price

The four utility or usability factors are:

time, place, form and possession

what does the customer value?

time, place, form, possession

A marketing channel of distribution, or simply a marketing channel, is made up of people and firms involved in making a product or service available for consumption.

true

Conflict arises when one channel member believes another channel member is doing things that stops it from achieving its goals.

true