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