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Chapter 13
Definitions
22
Marketing
Undergraduate 3
04/04/2011

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Term
Barter
Definition
exchanging goods and services for other goods and services rather than for money
Term
Price (P)
Definition
money or other considerations exchanged for the ownership or use of a good or service
Term
Value
Definition
the ratio of perceived benefits to price; or value = (perceived benefits)/(price)
Term
Value-pricing
Definition
the practice of simultaneously increasing product and service benefits while maintaining or decreasing price
Term
Profit Equation
Definition
Profit = Total Revenue - Total Cost; or

Profit = (Unit Price x Quantity Sold) - (Fixed Cost + Variable Cost)
Term
Pricing Objectives
Definition
specify the role of price in an organization's marketing and strategic plans
Term
Pricing Constraints
Definition
factors that limit the range of prices a firm may set
Term
Demand Curve
Definition
graph relating the quantity sold and price, which shows the maximum number of units that will be sold at a given price
Term
Demand Factors
Definition
those that determine consumers' willingness and ability to pay for goods and services
Term
Total Revenue (TR)
Definition
the total money received from the sale of a product
Term
Average Revenue (AR)
Definition
the average amount of money received for selling one unit of a product, or simply the price of that unit
Term
Marginal Revenue (MR)
Definition
the change in total revenue (TR) that results from producing and marketing one additional unit of a product
Term
Price Elasticity of Demand
Definition
the percentage change in quantity demanded relative to a percentage change in price
Term
Total Cost (TC)
Definition
the total expense incurred by a firm in producing and marketing a product.

Total Cost = Fixed Cost + Variable Cost
Term
Fixed Cost (FC)
Definition
the sum of the expenses of the firm that are stable and do not change with the quantity of a product that is produced and sold
Term
Variable Cost (VC)
Definition
the sum of the expenses of the firm that vary directly with the quantity of a product that is produced and sold
Term
Unit Variable Cost (UVC)
Definition
variable cost (VC) expressed on a per unit basis for a product
Term
Marginal Cost (MC)
Definition
the change in total cost that results from producing and marketing one additional unit of a product
Term
Marginal Analysis
Definition
a continuing, concise trade-off of incremental costs against incremental revenues
Term
Break-Even Analysis
Definition
a technique that analyzes the relationship between total revenue and total cost to determine profitability at various levels of output
Term
Break-Even Point (BEP)
Definition
the quantity at which total revenue (TR) and total cost (TC) are equal

TR = TC
Term
Break-Even Chart
Definition
a graphic presentation of the break-even analysis that shows when total revenue and total cost intersect to identify profit or loss for a given quantity sold
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