MKTG 409 Chp 19 & 20
Assume a retailer purchases a can of premium dog food at $2.25 and adds 75 cents to the cost, making the price $3. What is the markup as a percentage of selling price?
25%
the FTC is investigating the ACME Corp. for using misleading price tags at its outlet stores to decieve customers into believeing they are getting a bargain pn Wile E. branded items. Which of the following does the FTC believe ACME is guilty of?
Deceptive pricing
external reference price
a comparison prive provided by others
allowance
a concession in price to achieve a desired goal
ACME Corp's widgets have elastic demand. If ACME raises the price of widgets, what will be the result?
a decrease in total revenue
demand curve (d1)
a graph of the quanitity of products expected to be sold at various prices if other factores remain constant
price elasticity of demand
a measure of the sensitivity of demand to changes in price
internal reference price
a price developed in the buyer's mind through the experience with the product
cash discount
a price reduction given to buyers for prompt payment or cash payment
seasonal discount
a price reduction given to buyers for purchasing goods or servies out of season
ACME corp. and spacely inc. are engaged in intense price competition in order to boost market share or thier widgets. this is best described as __________________
a price way
Trade (funtional) discount
a reduction off the list price a producer gives an intemediary for preforming certain functions
freight absorption buying
absorpotion of all or part of actual freight costs by the seller
cost-based pricing
adding a dollar amount or percentage to the cost of the product
cost-plus pricing
adding a specified dollar amount or percentage to the seller's cost
markup pricing
adding to the cost of the prodcut a predetermind percentage of that cost
which of the following should be accomplished after developing pricing objectives
assessing the target market's evaluation of price
which of the follwing is calculated by dividing the varibale costs by the number of units produced?
average variable cost
to compete effectively on a price basis, a firm should __________
be the low-cost seller of the product
which of the following is the point at which the costs of producing equals the revenue made from selling the product
break-even point
which of the following is a major advantage of nonprice competition?
building customer loyalty toward the brand
cost plus investment
calculated as full costs plus the ost of a portion of the selling unit's assets used for internal needs
market-based cost
calculated at the market price less a small discount to reflect the lack of sales effort and other expenses
standard full cost
calculated based on what it would cpst to produce the goods at full plant capacity
actual full cost
calculated by dividing all fixed and variable expenses for a period into the number of units produces
The Federal Trade Commission has established guidelines for _______: If the higher price against which the comparison is made is the price formerly charged for the product, the seller must have made the previous price available to customers for a reasonable time period.
comparison discounting
Which of the following is often used by producers of relatively homogeneous products, especially when the target market considers price to be an important purchase consideration?
competition-based pricing
value consciousness
concerned about price and quality of a product
Which of the following price bases is mostly likely to be used for commercial construction projects or custom made equipment?
cost-plus pricing
fixed costs
costs that do no vary with changes in the number of units produced or sold
variable costs
costs that vary directly with changes in the number of unites produced or sold
quality discounts
deductions from the list price for purchasing large quanities two types- cumulative discounts: quantity discounts aggregated over a stated period of time noncumlative discounts: one-time price reductions based on the number of units purchased, the dollar value of the order, or the prodcut mix purchased
which of the following shows the quantity of prodcuts a firm expects to sell at various prices if other factors remain constant?
demand curve
prestige sensitivity
drawn to products that signify prominence and status
which of the following is NOT one of the factors that influence the assessment of value?
elasticity of demand
price competition
emphasizing price as an issue and matching or beating competitors' prices
nonprice competition
emphaszing factors other than price to distinguish a product fro competing brands
price dicrimination
employing price differentials that injure competition by giving one or more buyers a competitie advantage
odd-even pricing
ending the price with certain numbers to influence buyer's perceptions of the price or product
negotiated pricing
establishing a final price through bargining between the seller and the customer
prodcut-line pricing
establishing and adjusting prices of multiple prodcuts within a product line
Kara Thrace operates a service business that engages in systematically collecting data on brands and prices at competitors' stores. For which stage of the price establishment process would this service be most appropriate?
evaluating competitor's prices
professional pricing
fees set by people with great skill or experience in a particular field
a business's rental off production space is an example of a _______.
fixed cost
break even equation
fixed costs/ per-unti contribution to fixed cost = fixed costs/ price-variable costs
In the absence of government controls, pricing is a(n) ____ and ____ way to adjust the marketing mix.
flexible; convenient
base-point pricing
geographic pricing that combines factory price and freight charges from the base point nearest the buyer
pricing objectives
goals that describe what a firm wants to achieve through pricing
a price is developed in the buyer's mind through experience with the product is a _______
internal reference price
price war
involves two or more companies engaging in intense price competition, often in an effort to boost market share
ACME has a pricing objective to increase its primary product's sales relative to total indutry sales. this best describes a
market share objective
bundle pricing
packaging together two or more complementary products and selling them at a single price
multiple-unit pricing
packaging together two or more identical products and selling them at a single price
sleep train's presidents day sales are an example of
periodic discounting
which pricing strategy rpovides the most flexible introductory base price?
price skimming
transfer pricing
prices charges in sales between an organization's units
refrence pricing
pricing a priduct at al moderate level and displaying it next to a more expensive model or brand
bait pricing
pricing an item in a product line low with the intention of selling a higher-priced item in the line
which of the fllowing pass on to a business customer the cost saving gained through economies of scale
quantity discounts
geographic pricing
reducations for transportation and other costs related to the physical distance between buyers and seller prices may be quotes as free-on-board (FOB) factory or destination FOB factory: the price of the merchandise at the factory before shipment FOB destination: a price indicating the producer is absorbing shipping costs
periodic discounting
temporary reduction of prices on a patterend on systematic basis
random discounting
temporary reduction or prices on an unsystematic basis
marginal revenue
the change in totaly revenue resulting from the sale of an additional until of product
marginal cost (MC)
the extra cost incurred by producing one more unit of a product
average fixed cost
the fixed cost per unit produced
barter
the trading of products
Firefly Space Shuttles is using a strategy of maximizing revenues by making numerous price changes in response to demand, competitors' prices, or environmental conditions. This is best described as _____.
yield management
special-event pricing
advertised sales or price cutting linked to a holiday, a season, or other event
predatory pricing
also called undercutting, involves that intent to set a product's price so low that rival firms cannot compete and therefore withdraw from the maket place
price fixing
an agreement among competing firms to raise, lowers, or maintain price for mutual benfit
Spacely inc.'s sprockets have inelatcis demand. if spacely raises the price of spockerts, what will be the result?
an increase in total revenue
which of the following pricing strategies sets the basic prodcut in a prodcut line low, but the prices on the items required to operate or enhance it are high?
captive pricing
ACME Corp. offers a price discount to encourage prompt payment. Which of the following is it likely to use?
cash discount
uniform geographic pricing
charging all customers the same price regardless of geographic zones
differential pricing
charging different prices to different buyers for the same quality and quantity of product
price skimming
charging the highest possible price that buyers who most desire the product will pay
demand-based pricing
pricing based on the level of demand for the product
zone pricing
pricing based on transportation costs within major geographic zones
competition based pricing
pricing influenced primarily by competitors's prices
customary pricing
pricing on the asis of tradition
everyday low rpices (EDLP)
pricing products low on a consistent basis
psychological pricing
pricing that attempts to influence a customer's perception of price to make a product's price more attractive
captive pricing
pricing the basic product in a product line low, while pricing related items higher
premium pricing
pricing the highest-quality or most versatile products higher than other modles
price leaders
prodcuts priced near or even below cost
which of the following objectives is likely to be more expensive for a firm as the cost of materials and research and development may be greater?
product quality
price lining
setting a limited number of prices fo selected groups or lines of merchandise
comparison discounting
setting a price at a specific level and comparing it with a higher price
Secondary-market pricing
setting one price for the primary target market and a different price for another market
prestige pricing
setting prices at an artificially high level to convey prestige or a quality image
penetration pricing
setting prices below those of competing brands to penetrate a market and gain a significant market share
which of the following pricing objectives can reduce a firm's risks by helping stablizie demand for its products
status quo
price consciousness
striving to pay low prices
Break-even point
the point at which the costs of producing a product equal the revenue made from selling the product
total cost
the sum of average fixed and average variable costs times the quantity produced )average fixed costs + average variable costs) quanitity produced =
average total cost
the sum of the average fixed cost and the average variable cost average fixed cost + average variable cost
deceptive pricing
the use of false or misleading statements or practices to persuade buyers that a product is a better deal than it really is
price
the value paid for a prodcut in a marketing exchange
average variable cost
the variable cost per unit produced
which of the following charges the same price to all customers regardless of geographic location and the price is based on average shipping costs for all customers?
unform geographic pricing
maria is concerned about both price and quality of a product. marketers would bed describe her as which of the following?
value-conscious
price equation
proft = total revenue - total cost profit = (price x quantity sold) - total costs
which of the following product-line pricing strategies is NOT generally used for business products?
psychological pricing
price is a key element in the marketing mix because it directly relates to the generation of total __________
revenue