marketing chap 14
In many geographic areas, utilities such as water and electricity are available from only one provider. This is an example of a level of competition called a(n) ______.
monopoly
When only a few firms dominate a market, it is known as ______ competition.
oligopolistic
Firms that believe increasing volume of sales will help the firm more than increasing profits use the ______ strategy.
sales-oriented
Compared to other company objectives, a sales-oriented firm ______.
sets prices very low to generate new sales, even if profits suffer
Firms that are less concerned with the level of profits and more interested in the rate at which profits are generated relative to their investments tend to use ______.
target return pricing
Competition, channel members, costs, customers, and company objectives are the five critical components of ______.
pricing
By focusing on target profit pricing, maximizing profits, or target return pricing, a firm is implementing a ______ orientation.
profit
Sometimes firms selling a pioneering product will set a very low price in order to attract many customers before competitors enter the market. This is an example of a ______ orientation.
sales
When a firm is aiming for a particular amount of profit as its overriding concern, it usually implements ______.
target profit pricing
When a firm uses a mathematical model to identify the price at which the firm will make the most money possible, it is implementing ______.
the maximizing profits strategy
Total cost is ______.
variable costs plus fixed costs
Which of the following do you need to know to calculate target return price? (Select all that apply.)
Expected unit sales Fixed costs Variable costs
occurs when a company has a very low price for its product(s) in order to drive its competition out of business.
Blank 1: Predatory Blank 2: pricing
A occurs when oligopolistic companies compete with each other by repeatedly lowering their prices.
Blank 1: price Blank 2: war
The contribution per unit is the minus the variable cost per unit.
Blank 1: price, selling price per unit, selling price, or sales price
Channel members include which of the following?
Manufacturers Wholesalers Retailers
Which of the following is an example of a monetary sacrifice included in the overall price of a product or service?
Shipping
Firms engaged in competitor orientation might use which of the following strategies?
Status quo pricing Competitive parity
Which of the following is an example of an oligopoly?
The oil industry, with a limited number of providers
The five Cs of pricing include ______.
channel members
When there are many firms competing for customers in a given market, but the products are differentiated, it is known as ______.
monopolistic competition
If a firm has been accused of opening stores in new communities with artificially low prices, set for the sole purpose of driving competing stores in the area out of business, this type of behavior is called ______ pricing.
predatory
Firms engage in price wars to ______.
preserve their market share
The types of strategies that could be implemented in a profit orientation strategy include which of the following?
-Maximizing profits strategy -Target return pricing
The customer orientation strategy increases value by doing which of the following?
-Setting prices to match consumer expectations -Focusing on customer satisfaction
A firm may set low prices to:
-encourage current firms to leave the market -discourage firms from entering the market -take market share away from competitors
Which of the following is an example of a monopoly?
A county water board that is the sole provider of water to the county
With pricing, companies change their prices only to meet those of their competitors.
Blank 1: status Blank 2: quo
Which of the following are considered part of the five Cs of pricing?
Competition Customers Company objectives Channel members cost
Which of the following theories is the maximizing profits strategy based on?
Economic
Which of the following is another term for target return percentage?
Markup
The overall sacrifice a consumer makes to acquire a product or service is known as .
Price
Break-even analysis examines the relationships between which of the following?
Price Cost
Target return pricing is an example of what type of orientation?
Profit
Which of the following is an example of monopolistic competition? (Monopolistic competition is NOT a monopoly.)
The apparel industry, with many providers that seek ways to differentiate themselves and claim market share
Why might firms engage in a price war?
To compete by lowering prices
How do managers use break-even analysis?
To find a production quantity where, for a given price, costs are equal to revenues
When firms compete by lowering price at retail, they are engaged in ______.
a price war
A useful technique that enables managers to examine the relationships among cost, price, revenue, and profit over different levels of production and sales is called ______.
break-even analysis
The point at which the number of units sold generates enough revenue to equal total costs is known as ______.
break-even point
Status quo pricing ______.
changes prices only to meet those of competition
The five Cs of pricing include ______.
company objectives
One of the five Cs of pricing is ______.
competition
The five Cs of pricing are company objectives, customers, cost, channel members, and
competition
The five Cs of pricing are company objectives, customers, cost, channel members, and .
competition
Under parity, companies set their prices close to those of their major competitors.
competitive
If a firm sets prices similar to major competitors' prices, this is an example of ______ pricing.
competitive parity
If firms strategize according to the premise that they should measure themselves primarily against firms challenging them directly for customers, they have adopted a ______ orientation.
competitor
The five Cs of pricing are: company objectives, customers, channel partners, competition, and
cost
The five Cs of pricing include ______.
cost considerations
Some specialty retailers attempt to compete not by setting low prices but by justifying higher prices through high levels of personalized service. This is an example of a ______ orientation to pricing.
customer
Profit alone ______ how many units should be sold before a firm breaks even.
does not indicate
True or false: A firm with a primary objective of very high sales growth will have the same pricing strategy as a firm with a primary objective of being a quality leader.
false
To achieve target profit pricing, a company uses to stimulate sales at a specific profit level.
price
Price minus the variable cost per unit equals ______.
the contribution per unit
Price is best defined as ______.
the overall sacrifice a consumer is willing to make to acquire a specific product or service
An example of a nonmonetary sacrifice made in acquiring a product or service is ______.
time
The _____ is fixed costs plus the sum of the variable costs.
total cost
Price times quantity is ______.
total revenue
Variable cost per unit times quantity equals ______.
total variable cost
At the break-even point, profits on the sale of a product are ______.
zero
