Mktg-300 Chapter 17

Front 1

What is price to the seller?

Back 1

-Revenue
-Profit source

Front 2

Revenue minus expenses:

Back 2

Profit

Front 3

What are some market trends that influence price?

Back 3

-Flood of new products
-Increased availability of bargain private and generic brands
-Price cutting as a strategy to maintain or regain market share
-Internet used for comparison shopping

Front 4

What are the 2 sales-oriented pricing objectives?

Back 4

1) Market share
2) Sales maximization

Front 5

What allocates resources in a free-market economy?

Back 5

Price

Front 6

What are the 3 different types of pricing objectives?

Back 6

1) Profit-Oriented
2) Sales-Oriented
3) Status Quo

Front 7

The price charged to customers multiplied by the number of units sold:

Back 7

Revenue

Front 8

What is price to the consumer?

Back 8

Price is the cost of something

Front 9

A company’s product sales as a percentage of total sales for that industry:

Back 9

Market share

Front 10

What may be used to sell off excess inventory?

Back 10

Sales maximization

Front 11

Setting prices so that total revenue is as large as possible relative to total costs:

Back 11

Profit Maximization

Front 12

What are the 3 profit-oriented pricing objectives?

Back 12

1) Profit maximization
2) Satisfactory profits
3) Target return on investment

Front 13

That which is given up in an exchange to acquire a good or service:

Back 13

Price

Front 14

The quantity of a product that will be sold in the market at various prices for a specified period:

Back 14

Demand

Front 15

A technique for adjusting prices that uses complex mathematical software to profitably fill unused capacity:

Back 15

Yield Management Systems

Front 16

What are the 4 methods used to set prices?

Back 16

1) Markup pricing
2) Keystoning
3) Profit maximization pricing
4) Break-even pricing

Front 17

What is a short-term objective to maximize sales?

Back 17

Sales maximization

Front 18

Consumers’ responsiveness or sensitivity to changes in price:

Back 18

Elasticity of demand

Front 19

What are the 2 status quo pricing objectives?

Back 19

1) Maintain existing prices
2) Meet competition's prices

Front 20

The cost of buying the product from the producer plus amounts for profit and for expenses not otherwise accounted for:

Back 20

Markup pricing

Front 21

Costs that vary with changes in level of output:

Back 21

Variable costs

Front 22

What pricing objective ignores profits, competition, and the marketing environment?

Back 22

Sales maximization

Front 23

The practice of marking up prices by 100%, or doubling the cost:

Back 23

Keystoning

Front 24

The price at which demand and supply are equal:

Back 24

Price equilibrium

Front 25

What 5 factors affect elasticity of demand?

Back 25

1) Availability of substitutes
2) Price relative to purchasing power
3) Product durability
4) Product’s other uses
5) Rate of inflation

Front 26

The quantity of a product that will be offered to the market by a supplier at various prices for a specific period:

Back 26

Supply

Front 27

What impact has the Internet had on price?

Back 27

-Product selection
-Second opinions from expert sites
-Shopping bots
-Internet auctions

Front 28

An increase or decrease in price will not significantly affect demand:

Back 28

Inelastic demand

Front 29

What can lead to price wars?

Back 29

Competition

Front 30

A method of setting prices that occurs when marginal revenue equals marginal cost:

Back 30

Profit maximization

Front 31

Costs that do not change as level of output changes:

Back 31

Fixed costs

Front 32

Occurs when consumers buy more or less of a product when the price changes:

Back 32

Elastic Demand

Front 33

Charging a high price to help promote a high-quality image:

Back 33

Prestige pricing

Front 34

Stocking well-known branded items at high prices in order to sell store brands at discounted prices:

Back 34

Selling against the brand

Front 35

What are 3 common techniques used by yield management systems?

Back 35

1) Discounting early purchases
2) Limiting early sales at discounted prices
3) Overbooking capacity

Front 36

What may induce firms to enter the market?

Back 36

High prices

Front 37

An increase in sales exactly offsets a decrease in prices, and revenue is unchanged:

Back 37

Unitary elasticity

Front 38

The extra revenue associated with selling an extra unit of output, or the change in total revenue with a one-unit change in output:

Back 38

Marginal revenue

Front 39

What may force firms to lower their prices?

Back 39

Global competition

Front 40

When Wal-Mart regional managers conduct store visits, they also shop at nearby Target and Kmart stores. The managers compare prices on a selection of items and make adjustments to Wal-Mart's prices when necessary. This is an example of:

Back 40

Status quo pricing

Front 41

The local utility company has raised rates once again, yet demand doesn't seem to decrease much at all. This is an example of:

Back 41

Inelastic demand

Front 42

Grove City Furniture Company has recently moved to a new, larger location. At this new location, it has been unable to attract sufficient customers. Frankie Alonza, its owner, does not have the cash to pay the current loan installment due on the building and inventory. Alonza has decided to reduce all merchandise prices by at least 50 percent for a weekend sale so he can earn enough to pay his loan payment. His pricing objective can be classified as:

Back 42

Sales maximization

Front 43

To increase lottery sales, the State of Georgia started a game called The Change Game in which participants purchased lottery tickets with the change left over from a store purchase. The Change Game lottery tickets can be purchased for between $.25 and $.99. By lowering prices, the commission that runs Georgia's lottery program hoped to increase lottery ticket sales. The members of the commission undoubtedly believe the demand for lottery tickets is:

Back 43

Elastic

Front 44

A new cell phone service is pricing its full-color, multi-functional cell phone at a very low price with the hope of gaining immediate sales at its introduction. This pricing objective is based on:

Back 44

Increasing market share

Front 45

An antique mall has a pricing policy of setting prices so that the retail price is as high as the market will tolerate. However, the company constantly strives to keep costs at an industry low. The pricing policy is best described as:

Back 45

Status quo pricing

Front 46

Ben's Bagel Company used to price its bagels at 25¢ each. At this price, the company sold an average of 5,000 bagels per day. The company recently decided to double its price to 50¢, and the company watched its demand fall to 1,500 per day. The demand for bagels is most likely:

Back 46

Elastic

Front 47

When Sweet Confections manufactures 1,000 jars of mint jelly the cost of the decorative labels that go on the jars is $14. When output is raised to 2,500 jars, the cost of the labels increases to $35. The cost of the labels is an example of a(n):

Back 47

Variable cost

Front 48

Kroger supermarkets will place well-known brands on the shelves at high prices while offering its own Kroger brand at lower prices. This practice is an example of:

Back 48

Selling against the brand

Front 49

Garrett Select Industries has lowered the price of its all-natural oven mitts from $6 to $5. It previously sold 300 oven mitts per month and now sells 360 per month. It is experiencing:

Back 49

Unitary elasticity

Front 50

What is the most common pricing objective used by firms?

Back 50

Target return on investment (ROI)

Front 51

What is one of the most common pricing methods used by intermediaries?

Back 51

Markup pricing

Front 52

What determines the sales volume that must be reached for a product before a company's total revenue equals total costs?

Back 52

Break-even analysis