UCF MAR 3023 Exam 4 Review (Ch. 14-17) |77 Q’s and A’s
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-What is the definition of *price*? - -The overall sacrifice a consumer is willing to make—
money, time, energy—to acquire a specific product or service.
-What are the 5 C's of Pricing? - -Competition, Costs, Company Objectives, Customers,
Channel Members
-What is *Profit-Orientation*? - -A company objective that can be implemented by
focusing on target profit pricing, maximizing profits, or target return pricing.
-What is *Target Profit Pricing*? - -A pricing strategy implemented by firms when they
have a particular profit goal as their overriding concern; uses price to stimulate a certain
level of sales at a certain profit per unit.
-What is *Maximizing Profits*? - -A profit strategy that relies primarily on economic
theory. If a firm can accurately specify a mathematical model that captures all the factors
required to explain and predict sales and profits, it should be able to identify the price at
which its profits are maximized.
-What is *Target Return Pricing*? - -A pricing strategy implemented by firms less
concerned with the absolute level of profits and more interested in the rate at which their
profits are generated relative to their investments; designed to produce a specific return on
investment, usually expressed as a percentage of sales.
-What is *Sales Orientation*? - -A company objective based on the belief that increasing
sales will help the firm more than will increasing profits.
-What is *Premium Pricing*? - -A competitor-based pricing method by which the firm
deliberately prices a product above the prices set for competing products to capture those
consumers who always shop for the best or for whom price does not matter.
-What is *Competitor Orientation*? - -A company objective based on the premise that the
firm should measure itself primarily against its competition.
-What is *Competitive Parity*? - -A firm's strategy of setting prices that are similar to
those of major competitors.
-What is *Status Quo Pricing*? - -A competitor-oriented strategy in which a firm changes
prices only to meet those of competition.
, -What is *Customer Orientation*? - -A company objective based on the premise that the
firm should measure itself primarily according to whether it meets its customers' needs.
-What is the *Demand Curve*? - -Shows how many units of a product or service
consumers will demand during a specific period at different prices.
-What is the *Price Elasticity of Demand*? - -Measures how changes in a price affect the
quantity of the product demanded; specifically, the ratio of the percentage change in
quantity demanded to the percentage change in price.
-What is Price *Elastic*? - -Refers to a market for a product or service that is price
sensitive; that is, relatively small changes in price will generate fairly large changes in the
quantity demanded.
-What is Price *Inelastic*? - -Refers to a market for a product or service that is price
insensitive; that is, relatively small changes in price will not generate large changes in the
quantity demanded.
-What is *Dynamic Pricing*? - -Refers to the process of charging different prices for goods
or services based on the type of customer, time of the day, week, or even season, and level
of demand.
-What is *Income Effect*? - -Refers to the change in the quantity of a product demanded by
consumers due to a change in their income.
-What is the *Substitution Effect*? - -Refers to consumers' ability to substitute other
products for the focal brand, thus increasing the price elasticity of demand for the focal
brand.
-What is *Cross-Price Elasticity*? - -The percentage change in demand for product A that
occurs in response to a percentage change in price of product B; see also
-What are *Complementary Products*? - -Products whose demand curves are positively
related, such that they rise or fall together; a percentage increase in demand for one results
in a percentage increase in demand for the other.
-What are *Substitute Products*? - -Products for which changes in demand are negatively
related; that is, a percentage increase in the quantity demanded for product A results in a
percentage decrease in the quantity demanded for product B.
-How do you calculate *Break Even Point*? - -FC / CM per unit
-What is *Oligopolistic Competition*? - -Occurs when only a few firms dominate a market.
If you found this helpful, *Venmo* me @*ASerros* to show your appreciation! Good luck! -
-
-What is the definition of *price*? - -The overall sacrifice a consumer is willing to make—
money, time, energy—to acquire a specific product or service.
-What are the 5 C's of Pricing? - -Competition, Costs, Company Objectives, Customers,
Channel Members
-What is *Profit-Orientation*? - -A company objective that can be implemented by
focusing on target profit pricing, maximizing profits, or target return pricing.
-What is *Target Profit Pricing*? - -A pricing strategy implemented by firms when they
have a particular profit goal as their overriding concern; uses price to stimulate a certain
level of sales at a certain profit per unit.
-What is *Maximizing Profits*? - -A profit strategy that relies primarily on economic
theory. If a firm can accurately specify a mathematical model that captures all the factors
required to explain and predict sales and profits, it should be able to identify the price at
which its profits are maximized.
-What is *Target Return Pricing*? - -A pricing strategy implemented by firms less
concerned with the absolute level of profits and more interested in the rate at which their
profits are generated relative to their investments; designed to produce a specific return on
investment, usually expressed as a percentage of sales.
-What is *Sales Orientation*? - -A company objective based on the belief that increasing
sales will help the firm more than will increasing profits.
-What is *Premium Pricing*? - -A competitor-based pricing method by which the firm
deliberately prices a product above the prices set for competing products to capture those
consumers who always shop for the best or for whom price does not matter.
-What is *Competitor Orientation*? - -A company objective based on the premise that the
firm should measure itself primarily against its competition.
-What is *Competitive Parity*? - -A firm's strategy of setting prices that are similar to
those of major competitors.
-What is *Status Quo Pricing*? - -A competitor-oriented strategy in which a firm changes
prices only to meet those of competition.
, -What is *Customer Orientation*? - -A company objective based on the premise that the
firm should measure itself primarily according to whether it meets its customers' needs.
-What is the *Demand Curve*? - -Shows how many units of a product or service
consumers will demand during a specific period at different prices.
-What is the *Price Elasticity of Demand*? - -Measures how changes in a price affect the
quantity of the product demanded; specifically, the ratio of the percentage change in
quantity demanded to the percentage change in price.
-What is Price *Elastic*? - -Refers to a market for a product or service that is price
sensitive; that is, relatively small changes in price will generate fairly large changes in the
quantity demanded.
-What is Price *Inelastic*? - -Refers to a market for a product or service that is price
insensitive; that is, relatively small changes in price will not generate large changes in the
quantity demanded.
-What is *Dynamic Pricing*? - -Refers to the process of charging different prices for goods
or services based on the type of customer, time of the day, week, or even season, and level
of demand.
-What is *Income Effect*? - -Refers to the change in the quantity of a product demanded by
consumers due to a change in their income.
-What is the *Substitution Effect*? - -Refers to consumers' ability to substitute other
products for the focal brand, thus increasing the price elasticity of demand for the focal
brand.
-What is *Cross-Price Elasticity*? - -The percentage change in demand for product A that
occurs in response to a percentage change in price of product B; see also
-What are *Complementary Products*? - -Products whose demand curves are positively
related, such that they rise or fall together; a percentage increase in demand for one results
in a percentage increase in demand for the other.
-What are *Substitute Products*? - -Products for which changes in demand are negatively
related; that is, a percentage increase in the quantity demanded for product A results in a
percentage decrease in the quantity demanded for product B.
-How do you calculate *Break Even Point*? - -FC / CM per unit
-What is *Oligopolistic Competition*? - -Occurs when only a few firms dominate a market.
