Details Title: Chapter 11 Description: Marketing Final Total Flash Cards: 66 Created: 06/08/2009 08:23:05		New Users: To study from this flashcard set, or to create your own your own study flash cards, REGISTER HERE. Existing Users: CLICK HERE. Additional Marketing Flashcards
Cards in this set: Term Price Definition the value the customer give up or exchange to obtain a product -the only p that represents revenue -effects all other areas of the marketing mix Term Forms of payment Definition cash and credit-most common, goods and services, a favor, anything the other party values Term Opportunity Costs Definition the value of something that is given up to obtain something else Term Steps in Price Planning Definition Develop Pricing Objectives, Estimate Demand, Determine Costs, Evaluate the Pricing Environment,choose a pricing strategy, Develop Pricing tactics Term Types of Pricing Objectives Definition Sales or market share objectives, Profit objectives, Competitive effect objectives, Customer satisfaction objectives, image enhancement objectives Term Sales or marketing share objectives Definition maximize sales or increase market share Term Profit Objectives Definition set desire profit margin Term Competitive effect objectives Definition reduce the effectiveness of our competition markets Term Customer Satisfactions Definition building long term customer relationships Term Image enhancement objectives Definition focused on promoting product quality and image Term Ways to change price Definition increase/decrease sticker price increase/decrease quality increase/decrease quantity change the terms of the sale Term Value Definition People may be willing to pay a premium because they believe it makes a statement about their own worth. Term Estimating Demand Identify demand for an entire product category Predicts the company market share Definition -refers to customers desire for products, -How big is the pie, -How much of the product do consumer want, -How big of a slice can we get, -How will this change as the price goes up or down Term The Price Elasticity of Demand Definition A measure of the sensitivity of customers to changes in price %change of quality demanded/%change of price Term Types of Costs Definition Variable costs,Fixed costs, Average fixed costs, Total costs Term Variable Costs Definition varies as production varies with unit produce Term Fixed Costs Definition remains constants don't change with unit produced. Term Average fixed costs Definition fixed costs/#of units Term Total costs Definition Variable Costs + Fixed Costs Term Break-even analysis Definition Examines the relationship between cost and price and determines what sales volume must be reached Term Marginal Analyisis Definition -Provides a way for marketers to look at cost and demand at the same time -Examines the relationship of marginal cost to marginal revenue Profit is maximized when marginal revnue =marginal costs Term Marginal Costs Definition cost associated with producing one additional unit Term Marginal Revenue Definition Change in revenue from selling one additional unit Term Evaluating the Pricing Environment Definition The economy, the competition, Consumer trends, and international environmental influences. Term The economy Definition trimming the fat-during the recession when companies lower prices Increasing Prices- during inflation the price increase Term The competition Definition stay away from price wars Term Consumer trends Definition demographics and cultural shifts Term Cost plus-pricing Definition cost in adding a particular markup -marketers figures all costs for the product and then adds desired profit per unit. -Straight markup pricing-price is calculated by adding a predetermined % to the costs. Term Pricing Strategies Based on Costs:Advantages Definition -Simple to calculate -relatively risk free Term Pricing Strategies Based on Cost:Disadvantages Definition Fails to consider: target market, demand, competition, product life cycle, products image Difficult to accurately estimate. Term Steps in Costs-Plus Pricing Definition Estimate unit costs Calculate mark-up -markup on cost -markup on selling price gross margin Term Pricing Strategies based on Demand Definition selling price is based on an estimate of volume or quantity that a firm can sell in different marketers at different prices -Target costing -Yield management pricing Term Target Costing Definition identifying the quality that our customers needs the price their willing to pay and then creating the product Term Yield Management Pricing Definition A company charges different prices to different customers in order to manage capacity. Term Pricing Strategies Definition -Value Pricing (EDLP)-offers a fair value to consumers -Everyday lower pricing strategy- Ex. Walmart Term New Product Pricing Definition Skimming Price,Penetration Pricing,Trial Pricing, Term Skimming Price Definition when a company set a high intentional prices with plans to lower them in the future *fewer but more profitable sales Term Penetration Pricing Definition Sets a low price at the beginning penetrate the market quickly and deeply, a lot of customers, large market share *more sales but less profitable Term Trail Pricing Definition Offering a low price for a limited time period. Reduces consumer perceived risks Term Pricing tactics Definition Pricing for Individual Products Pricing for Multiple Products Term Pricing for individual Products Definition Two part pricing Payment Pricing Term Two part Pricing Definition two separate payments for a product Term Payment Pricing Definition breaking price into smaller amounts Term Pricing for multiple Products Definition Price bundling Term Pricing for multiple Products Definition Price bundling Captive Pricing Term Price Bundling Definition two or more goods sold as a single package for one price Term Captive Pricing Definition Strategically price two products that only work when used together Term Promotional Pricing Definition financing (low interest), warranties, maintenance, rebates, special events, loss leader-selling products low to bring people in Term Other Pricing tactics Definition distribution-based pricing, F.O.B. pricing, International distribution pricing terms of sale, basing-point pricing, uniform delivered pricing,freight absorption pricing. Term Discounting for Channel members Definition Trade or functional discounts, Quantity discounts, Cash discounts, Seasonal discounts. Term Trade of functional discounts Definition *% discount of the list price for member of the channel. Term Quantity discounts Definition Pricing tactic of charging reduced prices of purchases of larger quantities of a product Term Cash Discounts Definition encourages quick payments of bills Term Seasonal discounts Definition offering certain price at varies times of the year Term Trade Discounts Definition Pricing structure built around list price Term List Price Definition the price that the manufacturer sets as appropriate price for the end consumer Term Pricing with electronic commerce Definition Dynamic pricing strategies -price can be adjusted to meet changes in the marketplace. Auctions Term Psychological Issues in Pricing Definition Internal Reference Prices-consumers have a set price or price range in their mind -if actual price is higher that will not purchase -if it is to low below the internal reference price they will not purchase either. Competition as reference Price Term Price Quality Inferences Definition Occurs when consumers are unable to judge the quality of a product through examination of prior exchange. Term Price Lining Definition The practice of setting a limited number of different specific prices called price points, for items in a product line. Term Psychological Pricing Strategies Definition Price Lining Odd-even Term Odd- even Definition marketers assume that there is a psychological response to odd prices that differs from even prices. Which why they set prices at 1.99, 23.67 and etc. Term Price Fixing Definition Occurs when two or more companies conspire to keep prices at a certain level -Horizontal price fixing -Vertical price fixing Term Horizontal Price-fixing Definition occurs when competitors make the same product jointly determine wheat price they each will charge. Term Vertical Price-Fixing Definition occurs when manufactures tries to force retailer to sell at a certain price (suggested retail price) Term Predatory Pricing Definition A company sets a very low price for the purpose of driving competitors out of business.