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| 1) ________ is the amount of money charged for a product or service. |
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| 2) Price is the only element in the marketing mix that produces ________. |
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| 3) Consumer perceptions of the product's value set the ________ for prices. |
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| 4) Product costs set a(n) ________ to a product's price. |
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| 5) ________ uses buyers' perceptions of what a product is worth, not the seller's cost, as the key to pricing. |
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| Customer value-based pricing |
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| 6) Value-based pricing is the reverse process of ________ pricing. |
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| 7) Underpriced products sell very well, but they produce less revenue than they would have if the price were raised to the ________ level. |
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| 8) ________ involves charging a constant low price with few or no temporary price discounts. |
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| 9) When there is price competition, many companies adopt ________ rather than cutting prices to match competitors. |
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| value-added pricing strategies |
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| 10) Xbox 360 decides to add a free subscription to XBOX magazine with every game bought in an effort to differentiate its offering from PS3 games. This is an example of ________. |
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| 11) ________ pricing involves setting prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for the company's efforts and risks. |
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| 12) Fixed costs ________ as the number of units produced increases. |
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| 13) Rent, electricity, and executive salaries are examples of ________ costs. |
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| 14) Costs that change directly with the level of production are referred to as ________ costs. |
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| 15) ________ costs are the sum of the fixed and variable costs for any given level of production. |
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| 16) The company designs what it considers to be a good product, totals the expenses of making the product, and sets a price that adds a standard markup to the cost of the product. This approach to pricing is called ________ pricing. |
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| 17) Break-even pricing, or a variation called ________ pricing, is when the firm tries to determine the price at which it will break even or make the profit it is seeking. |
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| ***18) General Motors, in order to achieve a 15 to 20 percent profit on its investment, prices its automobiles accordingly. This approach is called ________. |
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| 19) Which of the following statements about a break-even analysis is true? |
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| E) A break-even analysis does not consider customer value and the relationship between price and demand. |
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| 20) Which of the following is an external factor that affects pricing decisions? |
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| 21) With target costing, marketers will first ________ and then ________. |
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| E) determine a selling price; target costs to ensure that the price is met |
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| 22) Swatch surveyed the market and identified an unserved segment of watch buyers. Using these results, they created a watch at a price consumers were willing to pay. The unorthodox order of this marketing mix decision is an example of ________. |
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| 23) Price setting is usually determined by ________ in small companies. |
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| 24) Under ________, the market consists of many buyers and sellers trading in a uniform commodity such as wheat, copper, or financial securities. |
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| 25) In Sao Paulo, Brazil, there are more than 20 stores specializing in selling the same quality and brand of wheat products located in one street. An individual seller cannot charge more than the going price without the risk of losing business to the other stores. This is an example of what type of market? |
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| 26) Under ________, the market consists of many buyers and sellers who trade over a range of prices rather than a single market price. |
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| 27) Under ________, the market consists of a few large sellers who are highly sensitive to each other's pricing and marketing strategies. |
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| oligopolistic competition |
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| 28) The relationship between the price charged and the resulting demand level can be shown as the ________. |
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| 29) ________ describes how responsive demand will be to a change in price. |
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| 30) If demand hardly changes with a small change in price, we say the demand is ________. |
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| 31) With an understanding of price elasticity, sellers should know that the less elastic the demand for their product is, the more advantageous it is for them to ________. |
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| 32) If demand changes greatly with a small change in price, we say the demand is ________. |
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| 33) A company sets not just a single price, but rather a ________ that covers different items in its line that change over time as products move through their life cycles. |
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| 34) Companies facing the challenge of setting prices for the first time can choose between two broad strategies: ________. |
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| D) market-penetration pricing and market-skimming pricing |
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| 35) A firm is using ________ when it charges a high, premium price for a new product with the intention of reducing the price in the future. |
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| 36) ________ pricing is the approach of setting a low initial price in order to attract a large number of buyers quickly and win a large market share. |
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| 37) Qriosity Inc. comes out with a new antivirus program and prices it at half price to attract buyers. The company is using ________. |
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| market-penetration pricing |
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| 38) When NerdHerd Electronics sets its televisions at three price levels of $699, $899, and $1,099, it is using ________. |
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| 39) Companies pricing nonobligatory or accessory products along with a main product are engaged in ________ pricing. |
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| 40) Setting a price for products that must be used along with a main product is known as ________ pricing. |
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| 41) Producers use captive product pricing to set the price of the main product ________ and set ________ on the supplies necessary to use the product. |
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| 42) Hotline Long Distance Service uses captive product pricing for its phone call charges. Because this is a service, the price is broken into a fixed rate plus a ________. |
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| 43) The fact that a hot dog cost five times more at Disneyland than at Sam's Club is an example of ________. |
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| 44) With product bundle pricing, sellers can combine several products and offer the bundle ________. |
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| 45) Trade or functional discounts are offered by manufacturers to which of the following? |
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| A) channel members who perform tasks that the manufacturer would otherwise have to perform |
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| 46) When Glow Gift Card Shop offers a price reduction to customers who buy Christmas cards the week after Christmas, it is giving a(n) ________ discount. |
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| 47) Vac "N' Sew will give customers $100 for a used vacuum cleaner, regardless of condition, when they purchase a new vacuum or sewing machine. This essentially reduces the price by $100. What is this type of discount called? |
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| 48) When General Motors provides payments or price reductions to its new car dealers as rewards for participating in advertising and sales support programs, it is granting a ________. |
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| 49) ________ involves selling a product or service at two or more prices, where the difference in prices is not based on differences in costs. |
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| 50) The New Age Gallery has different admission prices for students, adults, and seniors. All three groups are entitled to the same services. This form of pricing is called ________. |
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| customer-segmented pricing |
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| 51) Busch Stadium in St. Louis charges different prices for seats in different areas of the ball park, even though their costs are the same. What is this form of pricing called? |
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| 52) When a firm varies its price by the season, month, day, or even hour, it is using ________ pricing. |
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| 53) Consumers usually perceive higher-priced products as ________. |
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| 54) Consumers use price less to judge the quality of a product when they ________. |
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| have experience with the product |
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| 55) ________ prices are the prices that a buyer carries in his/her mind and refers to when looking at a given product. |
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| 56) What type of pricing is being used when a company temporarily prices its product below the list price or even below cost to create buying excitement and urgency? |
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| 57) When a manufacturer offers a ________, customers buy products from manufacturers' dealers within a specified time period and the manufacturer sends the customer a check. |
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| 58) Under which type of geographic pricing strategy does each customer pay the same price for the product from the factory to its destination? |
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| 59) Which of the following is the opposite of FOB-origin pricing? |
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| uniform-delivered pricing |
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| 60) ________ falls between FOB-origin pricing and uniform-delivered pricing. |
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| 61) If Dell charges the same price for delivery of its product to any customer that is located within the Great Lakes states, the company is using ________. |
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| Uniform-delivered pricing |
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| 62) The Internet offers ________, where the price can easily be adjusted to meet changes in demand. |
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| 63) Chef Brown's Health Food Store sells nutritional energy-producing foods. The price of the products sold varies according to individual customer accounts and situations. For example, long-time customers receive discounts. This strategy is an example of ________. |
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| 64) Which of the following is a reason for a company to raise its prices? |
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| to address the issue of overdemand for a product |
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| 65) The Sherman, Clayton, and Robinson-Patman Acts are all federal laws that were initially adopted to curb the formation of ________. |
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