Marketing Chapter 10

33 terms by shaun_sweeney

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A company building its pricing strategy around the experience curve would be likely to _____

price its products low

Price competition is minimized when all firms use this pricing method

markup pricing

Many people feel that _____ pricing is fairer to both buyers and sellers. Sellers earn a fiar return on their investment but do not take advantage of buyers when buyers' demand becomes great

markup

Which of the following is an external factor that affects pricing decisions?
A) the salaries of production management
B) competition
C) the salaries of finance management
D) funds expensed to clean production equipment
E) A, B, and C

B

_____ is the amount of money charged for a product or service

Price

The break-even volume is the point at which _____.
A) demand equals supply
B) a firm's profit goal is reached
C) total revenue and total cost lines intersect
D) the company can pay all of its l-t debt
E) the production of one more unit will not increase profit

C

Which of the following statements about break-even analysis is true?
A) it is a technique used to calc fixed costs
B) it is used to determine how much production experience a company must have to achieve its desired efficiencies
C) it is calculated using variable costs, the unit price, and fixed cost

C

_____ that influence pricing decisions include the nature of the market and demand and competitors' prices

External factors

Which of the following is a reason why markup pricing is NOT practical?
A) with a standard markup, consumers know when they are being overcharged
B) by tying the price to cost, sellers simplify pricing
C) sellers earn a fair return on their investment
D) this method ignores demand

D

In _____, price is considered along with the other marketing mix variables before the marketing program is set.

value-based pricing

Wal-Mart is famous for using what important type of value pricing?

everyday low pricing

Rent, electricity, and executive salaries are examples of _____

fixed costs

Fixed costs _____ as the number of units produced increases.

stay the same

When there is price competition, many compamies adopt _____ rather than cutting prices to match competitors

value-added strategies

Underpriced products sell very well, but they produce less revenue than they would have if price were raised to the _____ level.

perceived

With _____, price is set to match consumers' perceptions of product value

value-based pricing

_____ pricing involves setting prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for the company's efforts and risks.

Cost-based

_____ uses buyers' perceptions of what a product is worth, not the seller's cost, as the key to pricing

value-based pricing

If a seller charges _____ than the buyer's perceived value, the company's sales will suffer

More

_____ involves charging a constant, everyday low price with few or no temporary price discounts

EDLP

Consumer perceptions of the product's value set the _____ for prices.

ceiling

value-based pricing is the reverse process of _____

cost-based pricing

price is the only element in the marketing mix that produces _____

revenue

_____ is a company's power to excape price competition and to justify higher prices and margins.

pricing power

some companies have adopted a _____ strategy, offering just the right combination of quality and good service at a fair price

good-value pricing

To maintain and increase a company's _____, a firm must retain or build the value of its marketing offer.

pricing power

_____ is an important element in the marketing mix. It is the only element that does not represent cost

Price

Product costs set a(n) _____ to a product's price.

floor

Which of the following is a customer-oriented approach to pricing?
A) value-based pricing
B) sealed bid pricing
C) break-even pricing
D) target profit pricing
E) C and D

A

Costs that do not vary with production or sales level are referred to as _____

fixed costs

Ryanair offers free flights to a quarter of its customers and rock-bottom prices to many of its other customers. Ryanair then charges for all the extra services, such as baggage handling and in-flight refreshments. Which pricing method best describes Ryanair's pricing method?

low-cost pricing

Measuring _____ can be difficult. A company might conduct surveys or experiments to test this in the different products they offer

perceived value

_____ involves attaching features and services to differentiate a company's offer.

Value-added pricing

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