Marketing Exam 2

What are the steps in value- based pricing?

1. Assessing customer needs and value perceptions is the first step in the process. 2.Setting a target price to match customer perceived value is the second step. 3. The third step in value-based pricing is determining the costs that can be incurred. 4. Designing products to deliver the desired value at the target price is the fourth step.

What are the steps in cost-based pricing?

1. In cost-based pricing, designing a good product is the first step. 2. In cost-based pricing, determining product costs is the second step. 3. In cost-based pricing, setting the price based on cost is the third step 4. Convincing buyers of a product's value is the fourth step in cost-based pricing.

Style is __________.

A basic and distinctive mode of expression.

FOB (free on board)-origin pricing is _______.

A geographical strategy in which goods are placed free on board a carrier; the customer pays the freight from the factory to the destination

A discount is best defined as _____.

A straight reduction in price on purchases during a stated period of time or in larger

What of the following describes cost-based pricing?

Based on the costs of producing, distributing, and selling the product plus a fair rate of return for effort and risk

________ is setting a price for by-products in order to make the main product's price more compteitive

By-product pricing

Which of the following best defines fixed costs?

Costs that do not vary with production or sales level

__________ is based on a buyer's perceptions of value rather than on the seller's cost.

Customer value-based pricing

__________ is new product development that focuses on finding new ways to solve customer problems and create more customer-satisfying experiences.

Customer-centered new product development

Which term refers to the drop in the average per-unit product cost that comes with accumulated production experience?

Experience curve

Which of the following is a temporary period of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity?

Fad

Which term refers to a currently accepted or popular mode of expression in a given field?

Fashion

In cost-based pricing, designing a good product is the __________ step.

First

Convincing buyers of a product's value is the __________ step in cost-based pricing.

Fourth

In which PLC stage does a product's sales start climbing quickly?

Growth Stage

__________ involves filtering new product ideas to spot good ideas and drop poor ones as soon as possible.

Idea Screening

The __________ is the PLC stage in which a new product is first distributed and made available for purchase.

Introduction Satge

Offering a basic product is a product strategy in the __________ of the PLC.

Introduction Stage

__________ is setting a high price for a new product to skim maximum revenues layer by layer from the segments willing to pay the high price; the company makes fewer but more profitable sales

Market-skimming pricing

__________ involves designing an initial marketing strategy for a new product based on the product concept.

Marketing Strategy and Development

Which of the following defines total cost?

The sum of the fixed and variable costs for any given level of production

Basing-point pricing is ____________

Uniform-delivered pricing

__________ is a geographical pricing strategy in which the company sets up two or more designated areas

Zone pricing

Base-point pricing

a geographical pricing strategy in which the seller designates some city as a basing point and charges all customers the freight cost from that city to the customer

In the maturity stage of the PLC, a __________.

a product's sales growth slows or levels off

A major factor in price increases is _________

cost inflation

Marketing strategy development primarily involves __________.

designing an initial marketing strategy for a new product based on the product concept

What is the second step in cost-based pricing?

determining product costs

Dynamic pricing

is adjusting prices continually to meet the characteristics and needs of individual customers and situations

what is good-value pricing?

offering just the right combination of quality and good service at a fair price

By-product pricing

setting a price for by-products in order to make the main product's price more competitive

What is captive-product pricing?

setting a price for products that must be used along with a main product, such as blades for a razor and games for a video-game console

What does geographical pricing entail?

setting prices for customers located in different parts of the country or world

New product development refers to __________.

the development of original products, product improvements, product modifications, and new brands through the firm's own product development efforts

What is commercialization?

the introduction of a new product into the market

Optional-product pricing

the pricing of optional or accessory products along with a main product

Setting the price based on cost is the __________ step in cost-based pricing

third

Which of the following describes product bundle pricing?

Combining several products and offerings the bundle at a reduced price

The process of testing new product concepts with a group of target consumers to find out if the concepts have strong consumer appeal is __________.

Concept Testing

In which PLC stage does a product's sales fade away?

Decline Stage

Which of the following shows the number of units the market will buy in a given time period, at different prices that might be changed?

Demand Curve

In cost-based pricing, __________ is the first step.

Designing a good product

In value-based pricing, __________ is the third step.

Determining the costs that can be incurred

What is product development?

Developing the product concept into a physical product to ensure that the product idea can be turned into a workable market offering

What term refers to a straight reduction in price on purchases during a stated period of time or in larger quantities?

Discount

Which of the following is a product strategy in the maturity stage of the PLC?

Diversifying the brand and models

Diversifying the brand and models is a product strategy in which stage of the PLC?

Maturity

In the __________ stage of the PLC, a product's sales growth slows or levels off.

Maturity

What is deceptive pricing?

Occurs when a seller states prices or price savings that mislead consumers or are not actually available to consumers

psychological pricing

Pricing that considered the psychology of prices and not simple the economics. the price is used to say something about the product

a detailed version of the new product idea stated in meaningful consumer terms

Product Concept

__________ is setting the price steps between various products in a product line based on cost differences between the products, customer evaluations of different features, and competitor's

Product-line pricing

In value-based pricing, setting a target price to match customer perceived value is the __________ step.

Second

market penetration pricing

Setting a low price for a new product in order to attract a large number of buyers and large market share

What is the second step in value-based pricing?

Setting a target price to match customer perceived value

__________ is new product development in which various company departments work closely together, overlapping the steps in the product development process to save time and increase effectiveness.

Team-based new product and development

Promotional prices is___________?

Temporarily pricing products below the list price, and sometimes even below cost, to increase short-run sales

__________ is the stage of new product development in which the product and its proposed marketing are tested in realistic market settings.

Test Marketing

What is cost-plus pricing?

The addition of a standard markup to the cost of the product

Price is best defined as the __________.

The amount of money charged for a product or service

Idea Generations is __________.

The development of original products, product improvements, product modifications, and new brand through the firm's own product development efforts

What does the experience curve illustrate?

The drop in the average per-unit product cost that comes with accumulated production experience

Test marketing is __________.

The stage of new product development in which the product and its proposed marketing are tested in realistic market settings