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Definition
| is the money or other considerations exchanged for the ownership or use of a product or service |
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Term
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-is the ratio of perceived benefits to price,for any given price as the p/b increase the value increases too
-if a M pizza was 9.99 and the larger was the same price that would be the better deal?
-for some products, price influences consumers perception of overall quality and ultimatley its value to consumers
Value=perceived benefits/price |
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| profits = total rev - total cost |
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| 4 Common Approaches used to find this approximate price level used by and effective makting manager |
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Definition
1. demand-oriented-weighs factors underlining expected cust. tastes and pref. more heavily than such factors as cost, profit, and comp. when selecting a price
2. cost-oriented-price setter stresses that cost side of the pricing prob, not the demand side
3. price-oriented- price setter may choose to balance both rev and costs to set price
4. competition-oriented- price setter stresses about what the competitors or "the market" is doing |
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Term
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Definition
1. Skimming Price-setting the highest intial price that customers really desiring the product are willing to pay
2. Penetration-setting a low intial prcie on a new product to appeal immediately to the mass market
3. Prestige- setting a high price so that quality or status conscious consumers will be attracted to the product and buy it
4. Odd-Even- setting prices a few dollars or cents under an even #
5. Target- work backward through markups taken by retailers and wholesalers to determine what price they can change wholesalers for the product
6. Bundle- mrking of 2 or more products in a single pck. price
7. Yeild- Mgt- charging of diff prices to max rev for a set amount of capacity at any given time
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Term
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Definition
-Standard Markup-which entails adding a fixed % to the cost of all items in a specific product class
-Cost-Plus- summing the total unit cost of providing a product or service and adding a specific amount to the cost arrive at a price
-most commonly used method to set prices for buisness products |
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Term
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Definition
-Target Profit- when a firm sets an annual target of a specific dollar volume of profit
-Target-return on sales- supermarkets often use this method to set prices that will give them a profit that is used specified % used b.c of the difficulty a benchmark of sales investment to show how much of a firms effort is needed to schieve the target
-Target-return on investment- ex/ GM and public utilities use this to set prices to achieve a return on investment (ROI) target such as a % that is mandated by its board of directors or reg. |
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Definition
-Customary-Pricing- a standerized channel of distrubution, or other cometitive factors dictate the price
-Above-,At-, or Below-Market Pricing- |
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Term
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Definition
is a graph relating the quanitity sold and the price which shows the max # of units that will be sold at a given price
-three factors- consumer tastes, price and ava. of similar prod., and consumer income |
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| funamentals of estimating demand |
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Definition
1. the demand curve
2. movement along vs. shifts of a demand curve
3. price elasticity of demand- key consideration related to the product's demand curve % change in quantity demanded relative to a % change in price |
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Term
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Definition
| means that slight increases or decreases in price will not significantly affect the demand or units sold for the product |
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Term
| total rev, total cost, breakeven-analysis |
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Definition
-total money received from the sale of a product; the unit price of a product multiplied by the quanitiy sold
-four cost concepts- total cost, fixed cost, variable cost, and unit variable cost
-is a technique that analyzes the relationship between TR and TC to determine profitability at various levels of output BEP-the quantity at which TR and TC are equal |
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