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Terms for marketing
Terms for Exam # 4
33
Marketing
Not Applicable
11/13/2012

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Term
average fixed cost
Definition
fixed cost / unit produced. Fixed costs of production are spread over the total # of units produced.
Term
Bait n switch
Definition
illegal. special advertising price baits customers into store with intention of switching them to a higher priced product. illegal to not have the advertised product
Term
basing-point pricing
Definition
pricing tactic. customers pay shipping charges. set geographic location. FOB.
Term
Break-even analysis
Definition
determines the # of units a firm must produce and sell to cover firm's total expenses. Formula=Total fixed costs/fixed cost contribution=break-even
Term
Demand-based pricing
Definition
price-setting method based on estimates of demand at different prices
Term
Elastic Demand
Definition
changes in price have effects on amount demand
Term
FOB location pricing
Definition
B2B. Pricing tactic. selling price includes the cost of loading and transporting product to said place. Customer picks up products from location.
Term
Freight absorption pricing
Definition
tactic where the price of product is calculated to include shipping
Term
Inelastic Demand
Definition
changes in price=no effect on amount demanded. oil, cofee beans for a coffee chop. consumer takes that cost on.
Term
Fixed cost
Definition
costs of production that dont change w/ # of units produced
Term
List price
Definition
suggested retail.
Term
loss leader pricing
Definition
retail or manufactorer pricing policy. sets prices low or below cost on product or product line to attract consumers to store. Hope to make up lost products on other products
Term
marginal cost
Definition
increase in total cost resulting from the producing 1 additional unit of a product
Term
penetration pricing
Definition
pricing strategy. firm introduces a new product at low price to encourage more consumers to purchase it
Term
predatory pricing
Definition
illegal. company sets a low price for purpose of driving competitors out of biz.
Term
price
Definition
that which is given up in exchange to aquire a good or service
Term
trends influencing price
Definition
-flood of new products
-increased avail. of bargain-priced private and generic brands
-price cutting strategies
-Internet
-recession
Term
price elasticity of demand
Definition
% change in unit sales resulting from % change in price.
(>1.0) = more price inelastic demand
Term
price bundling
Definition
selling two or more goods as a single pckg for 1 price
Term
price fixing
Definition
collaboration of 2 plus firms in setting prices, usually to keep prices high. i.e. airlines
Term
price leadership
Definition
pricing strategy. one firm first sets its price and other firms in industry follow w/ same price or very familiar. status quo.
Term
quantity discounts
Definition
discount of charging reduced prices for purchases of larger quantities of product
Term
price lining
Definition
practice of setting limited # of diff. specific prices, price points, for items placed on product line
Term
skimming prices
Definition
premium price that firm charges for new highly desirable product. goal=gain sales from the top of the market or consumers who dont mind paying the extra amount to get the perceived brand. i.e. iphone
Term
situations when price skimming is successful
Definition
-inelastic demand
-unique advantages/superior
-legal protection of product
-tech. breakthru
-blocked entry to competitors
Term
total costs
Definition
total of the fixed costs and thvariable sots for a set # of units produced
Term
trade or functional discounts
Definition
discount off listed POP to memebers of the channel intermediaries who perform various marketing functions
Term
unfair sales act
Definition
state laws that prohibit suppliers from selling products below cost to protect small bizs
Term
Value pricing
Definition
a firm sets prices that provide ultimate value to customer
Term
trial pricing
Definition
pricing product low for limited time. lower risk to consumer
Term
uniform delieverd pricing
Definition
tactic. firm adds a shipping price to price for all customers. disregards location.
Term
varaible costs
Definition
cost of producton. that are tied to and vary depending on the # of units produced
Term
yield mngment pricing
Definition
charging diff. prices to diff. consumers in order to mng capacity while max. rev.
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