Chapter 13

When a successful new product is introduced to the market, the lack of competition (including from your own company) removes

a price constraint

Which of the following products are likely to be price inelastic? A sweater, An open heart surgery, an airline ticket, a yacht?

an open heart surgery

The practice of exchanging products and services for other products and services rather than for money is called

barter

Movement along a demand curve implies no ____ have occurred in any demand factors except price.

changes

Factors that limit the range of pries a firm may set are known as pricing

constraints

Selling via the Internet reduces which pricing constraint?

cost of changing prices

In the long run, a firm's ____ and those of its distributors set a floor for its price, allowing the firm to both survive and get its product to consumers.

costs

The percentage change in quantity demanded relative to a percentage change in price is known as price ____ of demand.

elasticity

Total cost is the sum of ___ cost and variable cost.

fixed

Price is the one element in the marketing mix that

generates revenue.

Despite the recent increases in gas prices, Americans have barely decreased their consumption, which is an example of

inelastic demand

According to the price equation, the actual price is the ____ price less incentives and allowances, plus extra fees.

list

If a firm prices a product low, to the customer this may signal

low quality

With which profit-oriented pricing objective is a firm likely to price its products relatively low compared to their cost to develop, with the prospect of gaining a high market share?

managing for long run profits

Firms often pursue ___ as a pricing objective when industry sales are relatively flat or declining.

market share

American firms are sometimes criticized for using which profit-oriented pricing objective, because it results in a short-term orientation?

maximizing current profit

Which of the following are types of competitive markets? Monopolistic competition, Elastic demand, Barter System, Oligopoly?

monopolistic competition and oligopoly

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

objectives, constraints

Price is defined as _____.

one of the four Ps

To increase customer value for a given price, the market must increase _____ ____.

perceived benefits

A demand curve is derived by measuring how many units of a product are sold at various levels of______.

price

Profit = (unit ____ x quantity sold) - (fixed cost + variable cost)

price

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

price

To determine the ____ for a product, you must consider limitations based on customers, actual costs, and profits.

price

The internet creates ____ which leads to efficient buying decisions on the part of consumers and aggressive prices changes by sellers.

price transparency

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

prices

Patents and limited competition reduce ____, making high prices possible for technology products earyl in their life cycles.

pricing constraints

In which situation does the market set prices?

pure competition

When a consumer is comparing the costs and benefits of substitute items, he or she is developing a

reference value

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

revenue

Compared to other company objectives, the ____ objective can be translated more easily into meaningful targets for marketing managers.

sales

Firms that set ___ objectives believe that increased revenues will in turn lead to increases in market share and profit.

sales

According to the price equation, to find the actual price, you should do what to the list price? Add extra fees and ___ incentives and allowances.

subtract

Consumers' zeal for low prices combined with the ease of making price comparisons on the internet has results in many companies adding ___ to their list prices.

surcharges

When a company sets a profit goal of 20 percent for pretax ROI, it is using which type of pricing objective?

target return

Market share can be measured as the ratio of ___ compared to the total industry units sold.

the firm's units sold

According to the profit equation, profit is

total revenue minus total cost

The pricing objective known as ____ volume is based on what? The quantity of product sold.

unit

Total revenue equals the product quantity sold times the ___ price.

unit

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

value

Creative marketers engage in ____ when they increase product benefits without changing the price.

value pricing

Total cost is equal to fixed cost plus the ___ cost.

variable

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

maximization, return

A firm may set goals for its business in terms of profit, sales, or unit volume. These are type of pricing _____.

objectives

A shift in the demand curve is the result of a change in ____ conditions.

selling

The social responsibility pricing objective often results in

decreased profits

A manufacturer that uses coupons and other small price decreases to create large changes in demand is relying on a(n) ____ demand for the product.

elastic

Consumer tastes and income are among the factors that determine their willingness and ability to pay for products and services. They are known as ____ factors.

demand

A product with ____ demand is one in which a slight decrease in price results in a relatively large increase in demand or units sold.

elastic

When a 1 percent decrease in price produces more than a 1 percent increase in quantity sold, the product or service is

elastic