MKTG 2400 midterm #2
Which two of the following must be done before an approximate price level can be selected? (2)
(1) Determine cost, volume, and profit relationships (2) Estimate demand and revenue
A shift in the demand curve is the result of
A change in selling direction
When Wilkinson Sword exchanged some of its knives for advertising used to promote its razor blades, it was an example of _______
Barter
Many Japanese car firms are willing to give up immediate profits for long-term penetration of the market. This is a pricing objective known as
Managing for long-run profits
The 3rd step of the market segmentation process is to develop a(n) _______ grid and estimate the size of markets.
Market-product
Which of the following may mean that the amount paid is not the same as the list price?
Rebates, Discounts, Surcharges
Which of the following may mean that the amount paid is not the same as the list price?
Rebates, surcharges, discounts
Using breakfast, lunch, dinner and snacks as categories helps consumers to ________ the products offered by a fast food brand that may have dozens of choices.
Relate to
A restaurant has identified target market of elderly patrons who eat early in the evening, a slower period for the business. The best communication strategy to reach them would be to
Run a print ad w/ coupons in a senior center program schedule
the next step after developing a market-product grid and estimating market sizes in segmentation process is to _______ appropriate target markets
Select
Market size and compatibility with the organizations objectives and resources are two of the criteria used to
Select Target Markets
Strategies that can be used as part of a firm's profit objectives include which two of the following?
Target return, maximizing current profits
Order the steps in Setting prices (first on top) -determine cost, volume, and profit relationships -set list or quoted price -make special adjustments to list or quoted price -identifying price objectives and constraints -estimate demand and revenue -select an approximate price level
(1) Identify pricing objectives and constraints (2) Estimate demand and revenue (3) Determine cost, volume, and profit relationships (4) Select an approximate price level (5) Set list or quoted price (6) Make special adjustments to list or quoted prices
The break-even point is: (how do you get the BEP)
*Fixed cost* divided by *Unit price* minus *Variable cost* = BEP
For a firm, rent, landscaping, and insurance are best examples of:
*Fixed costs*
Executive salaries are a good example of a _____ cost
*Fixed* cost
____ cost is the sum of the expenses of the firm that are stable and do not change with quantity of a product that is produced and sold.
*Fixed* cost
According to the profit equation, profit is
*Total Revenue* ( - ) *Total Cost*
Direct labor and materials are also known as _________
*Variable costs*
The Internet has resulted in which two of the following that affect the competitive environment for pricing?
A: Consumer's access to pricing information from many competitors Companies' ability to change prices frequently
According to the price equation, to find the actual price, you should do which of the following to the list price?
Add extra fees, subtract incentives, and allowances
Demographic, Psychographic, and geographic are...
Bases to segment consumer markets
______- ______ analysis is a technique that analyzes the relationship between total revenue and total cost to determine profitability at various levels of output
Break-even
Legal and regulatory issues and consumer demand are pricing ____ that limit what a company can charge for its products
Constraints
The demand for a product's class, a product, or a brand, or the newness of a product or pricing _______ to limit a firm's options
Constraints
Which of the following are the 3 factors that influence demand?
Consumer Tastes, Price and Availability of similar products, Consumer Income
Q: The relationship between price and quantity sold is called the
Demand curve
The chart that shows how many units of a product or service consumers will demand during a specific period of time at different prices is known as the _________
Demand curve
Xerox segments its organizational market in part using the North American Industry Classification System (NAICS) code for potential customers, which is an example of ________ segmentation`
Demographic
Apple's 1997 product matrix for its computer products provides a segmentation strategy based on which two of the following?
Desktop and portable computers and Consumer and professional sectors
An example of a variable cost is
Direct labor used to manufacture the product
A manufacturer that uses coupons and other small price decreases to create large changes in demands is relying on a(n) ______ demand for the product.
Elastic
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
Which of the following are factors that cause price inelasticity?
Few available substitutes and products are considered necessities
Potential for increased profit and similarity of needs potential buyers within a segment are criteria used to...
Form Market Segments
The 80/20 rule helps marketers recognize the importance of
Heavy users
To increase customer value for a given price, the market must
Increased perceived benefits
Despite the recent increases in gas prices, Americans have barely decreased their consumption, which is an example of
Inelastic demand
Out-of-control _______ compared to foreign car companies resulted in the U.S. government investing billions of dollars in U.S. car companies, trying to restructure them to make them competitive
Manufacturing costs
When Apple focuses its marketing efforts on a single segment to which it promotes all of its relevant products, it uses _____ synergies
Marketing
The purpose of developing a market-product grid is to trigger ______ to increase sales and profits
Marketing-actions
Experian Simmons tracks statistics related to usage rate of fast food profiles as well as age and gender, which means it uses ______ segmentation.
Multiple methods of segmentation
If total cost is greater than total revenue, then profit is
Negative
In addition to moves of traditional competitors McDonald's and Burger King, Wendy's should also pay attention to the strategies used by which two of the following?
New restaurants like five guys burgers and fries and fast casual restaurants like chipotle
A firm may set goals for its business in terms of profit, sales, or unit volume. These are types of pricing _______.
Objectives
Q: A market-product grid shows the relationship of market segments to products offered or to
Potential marketing actions by an organization
The money or other considerations exchanged for the ownership or use of a product or service is its ______
Price
Pricing decisions are difficult because
Price simultaneously affects total revenue and total cost
Both of these types of synergies are available in business, but focusing on one may come at the expense of the other
Product and Marketing
Total revenue less (that is, minus) total cost is known as _______
Profit
To utilize sophisticated ______ segmentation, the marketing must know more than age, race and gender about the target market. Expensive third-party research is often required.
Psychographic
Price elasticity of demand is expressed as percentage change in ____ divided by the percentage change in _______. a. quantity demanded; price b. quantity; price c.
Quantity demanded; price
Profit is _________ (minus) ________
Total revenue - Total cost
______ cost is the sum of the expenses of the firm that vary directly with the quantity of a product that is produced and sold.
Variable
Total cost is equal to Fixed cost plus the _________
Variable cost
At the break-even point, profit is
Zero Break-even point: is the quantity at which total revenue and total cost are equal. Profit then comes from all units sold beyond the BEP
To many consumers, price provides information about the ________ of the product
the *Quality* of the product
The unit variable cost is
the *total variable cost* divided by the *quantity*
Price is defined as __________
the *total* sacrifice by a buyer to get a product and one of the four P's
Fixed cost divided by unit price minus unit variable cost is known as
the Break-even point (BEP)
The ________-_______ point is the quantity at which *total revenue* and *total cost* are *equal*
the Break-even point (BEP)
The intersection of the total revenue curve with the total cost curve on a graph of revenue/costs vs. quantity is called
the Break-even point (BEP)
To determine ____ for a product, you must consider limitations based on customers actual costs, and profits
the Price
Total revenue equals the product quantity sold times
the Unit price