chapter 11 exam prep

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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

Select all of the following that are common approaches to setting an approximate price level for a product.

Cost-oriented Competition-oriented Demand-oriented

Organizations choosing competitor-oriented approaches to set prices might use which of the following strategies?

Customary pricing Loss-leader pricing

Demand-oriented pricing approaches weigh which factors most heavily?

Expected customer tastes and preferences

Demand-oriented

Factors underlying customer tastes and preferences are weighed most heavily.

Which two of the following are the options when choosing a price policy?

One-price Flexible-price

Cost-oriented

Price is set by looking at the production and marketing costs, and then adding enough to cover direct expenses, overhead, and profit.

Competition-oriented

Price setter stresses what "the market" is doing is determining a price.

Cost-oriented approaches to pricing considers which of the following in the setting of a product's price?

Profit Manufacturing costs Overhead

Which of the following are profit-oriented approaches to setting a price?

Target return pricing Target profit pricing

Profit-oriented

The price setter balances both revenues and costs to set a price.

Break-even analysis analyzes the relationship between which two at various levels of output?

Total cost Total revenue

Which of the following are essential to consider when setting a price?

What are customers willing to pay? What will provide a profit to the company? What will pay for all associated costs, including marketing?

A demand curve is

a graph relating quantity sold and price

demand oriented

a new energy efficient light bulb was introduced at $3.00 (about 3 times the price of a conventional bulb) and will last 6,000 hours (about four times the conventional bulb)

Demand-oriented, cost-oriented, and profit-oriented approaches can be used to set a(n) ________ price level for a product.

approximate

Break-even analysis analyzes the relationship between total revenue and total cost to determine profitability

at various levels of output.

The ______________ point is the quantity at which total revenue and total cost are equal.

break even

The point at which the number of units sold generates enough revenue to equal total costs is known as

break even point

A company can encourage its wholesalers and retailers to pay their bills quickly by offering ________ discounts

cash

Variable costs _____ production volume.

change with

If firms set prices with specific consideration of firms challenging them directly for customers, they have adopted a ________ approach to pricing.

competition-oriented

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 class, a product, or a brand, or the newness of a product can act as pricing ________ to limit a firm's options

constraints

Pricing approaches that consider the production and marketing costs and then add enough to cover direct expenses, overhead, and profit are known as

cost-oriented.

_______________ -oriented approaches to pricing regard expected customer tastes and preferences as the most important factors in the decision.

demand

Price ____________ of demand is a measure of how sensitive consumer demand and the firm's revenues are to changes in the product's price.

elasticity

competition oriented

intel slashed its prices to be more similar to those of AMD, a rival computer chip maker

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

list

On a demand curve, one of the axes represents the price of a product while the other represents the _____.

maximum units sold

A marketing manager considers pricing objectives and constraints to

narrow the range of choices among the variety of pricing strategies.

Marketing managers may identify profit, market share, social responsibility, or even survival as pricing

objectives

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

objectives and constraints

Cash discounts are offered because they encourage customers to

pay their bills quickly.

One-price and flexible-price are the two options when choosing a price

policy

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

price

Total revenue = unit _____ x quantity ______

price and sold

Pricing decisions are difficult because

price simultaneously affects total revenue and total cost.

__________ ___________ involve specifying the role of price in an organization's marketing and strategic plans

pricing objectives

Total revenue minus total cost is known as

profit

By focusing on target profit pricing or target return pricing, a firm is using a ________ pricing approach.

profit-oriented

Price elasticity of demand is expressed as percentage change in ________ divided by the percentage change in ________.

quantity demanded and price

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

revenue

The three factors influencing the demand curve are consumer tastes, the consumer income, and the price and availability of

similar products.

cost oriented

target priced its new patio furniture sets by adding 15 percent to the invoice price it paid for those products

The three elements influencing the demand curve are consumer ________, consumer ________, and the price and availability of similar product

tastes and income

Fixed cost divided by unit price less unit variable cost is known as

the break-even point.

Price is defined as

the money or other considerations exchanged for the ownership or use of a product.

profit oriented

the owner of a vacuum cleaner store sets a target of 20 percent return on sales

To determine ______ for a product, you must consider limitations based on customers, actual costs, and profits. Multiple choice question.

the price

The unit variable cost is

the total variable cost divided by the quantity.

Total revenue equals the product quantity sold times

the unit price

Pricing decisions are challenging because the price chosen will impact which two of these?

total cost total revenue

According to the profit equation, profit is

total revenue minus total cost.

The _________ variable cost is total variable cost divided by the quantity

unit

The ratio of perceived benefits to price is a product's

value

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

value

At McDonald's, you can get several items together as a meal, for less than purchasing those items separately. This is an example of

value pricing

Creative marketers engage in _________ when they increase product benefits without changing the price. Multiple choice question.

value pricing

____________ 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


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