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Marketing Ch. 10

Terms in this set (14)

when does elastic demand occur
if relatively small changes in price result in large changes in the quantity demanded
elastic demand
total revenue goes up when prices are decreased and goes down when prices rise
inelastic demand
total revenue goes up when prices are raised and goes down when prices decline
when does inelastic demand occur
when price changes have little impact on the quantity demanded
as prices are lowered, a firm's total revenues increase. this indicates that demand is
elastic
value-based pricing
the buyers perceptions of value rather than the seller's cost
-customer driven
good-value pricing
offering just the right combination of quality and good service at a fair price
high-low pricing
involves charging higher prices on an everyday basis but running frequent promotions to lower prices temporarily on selected items
cost-based pricing
sets prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for effort and risk
-product driven
variable costs
vary with production volume
fixed costs
unaffected by production volume
target costing
starts with an ideal selling price based on consumer value considerations and then targets costs that will ensure that the price is met
the goal of the competition-based pricing is ______
not to match or beat competitors' price
_____ reverses the usual process of first designing a new product, determining its cost, and then asking, "can we sell it for the?"
target costing
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