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Marketing Chapter 17
Terms in this set (43)
Some firms, including most retailers and wholesalers, set prices by adding a dollar amount to the cost of products to get the selling price. This pricing approach is called _____.
A retailer pays a wholesaler $24.00 for an item and then sells it with a 25 percent markup. The retailer's selling price is _____.
will lead to losses if actual sales are much lower than expected
A firm that produces only one product has total fixed costs of $15,000 per month. In addition, the only variable costs is the $100 cost of producing each unit. The firm charges its wholesalers $125 per unit. How many units of the product does the firm have to sell each month in order to break even?
difference between total revenue and total cost
In marginal analysis, profit is calculated as the:
when there are very high switching costs.
Consumers tend to be relatively less price sensitive:
Sequential price reduction
_____ refers to the price-setting approach where the seller starts with a relatively high price and sells as much of the product as possible at that price, but plans from the start for a series of step-by-step price reductions until the product is sold out.
Good Health Co. has set a suggested retail price of $40 for a 100-tablet bottle of its new vitamins because research shows that its target market will find the product attractive at this price. From this suggested retail list price, Good Health has subtracted its usual chain of markups for wholesalers and retailers to obtain its own selling price of $17. Production looked for ways to make the product so this price would provide a profit. This price-setting approach is called _____.
An interior design company sets higher prices as compared to other firms that offer similar services. It claims that it offers services that are of a higher quality. This firm is using _____.
The final price set based on bargaining between the buyer and seller is called the _____.
a dollar amount added to the cost of products to get the selling price
the percentage of selling price that is added to the cost to get the selling price
the sequence of markups firms use at different levels in a channel, determining the price structure in the whole channel
the number of times the average inventory is sold during a year
adding a reasonable markup to the average cost of a product
total fixed cost
the sum of those costs that are fixed in total, no matter how much is produced
total variable cost
the sum of those changing expenses that are closely related to output, such as expenses for parts, wages, packagiing materials, outgoing freight, and sales commissions
the sum of total fixed costs and total variable costs
average cost (per unit)
the total cost divided by the related quantity
average fixed cost (per unit)
the total fixed cost divided by the related quantity
average variable cost (per unit)
the total variable cost divided by the related quantity
an approach to determine whether the firm will be able to break even, that is cover all its costs, with a particular price
break-even point (BEP)
the sales quantity where the firm's total cost will just equal its total revenue
fixed-cost (FC) contribution per unit
the selling price per unit minus the variable cost per unit
evaluating the change in total revenue and total cost from selling one more unit to find the most profitable price and quantity
the change in total revenue that results from the sale of one more unit of a product
the change in total cost that results from producing one more unit
rule for maximizing profit
the highest profit is earned at the price where marginal cost is just less than or equal to marginal revenue
profit on the last unit sold
value in use pricing
setting prices that will capture some of what customers will save by substituting the firm's product for the one currently being used
the price a consumer expects to pay
setting some very low prices, real bargains, to get customers into retail stores
setting some very low prices to attract customers but trying to sell more expensive models or brands once the customer is in the store
setting prices that have special appeal to target customers
setting prices that end in certain numbers
setting a few price levels for a product line and then marking all items at these prices
setting an acceptable final consumer price and working backward to what a producer can charge
setting a rather high price to suggest high quality or high status
setting prices for a whole line of products
complimentary product pricing
setting prices on several related products as a group
setting one price for a set of products
offering a specific price for each possible job rather than setting a price that applies for all customers
a price that is set based on bargaining between the buyer and seller
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