MARKETING 321 FINAL: ALREADY
PASSED
PRICE - =the measurement of value commonly used in exchanges
- relates directly to the generation of total revenue
process used by marketers to set prices - =- develop a price objective that is compatible with the
org overall marketing objective
- assess the target market's evaluation of price
- identify a product's demand and the price elasticity of demand
- analyze demand, cost, and other profit relationships
- evaluate competitors price
- select a pricing strategy/determine the role of price in the marketing mix
- determine the final price
price competition - =occurs when a seller emphasizes a products low price and set a price that
equals or beats that of competitors
- want to be the low-cost seller of product
- need to have flexibility to change prices rapidly and aggresively in response to others
,nonprice competition - =competition based on factors other than price, product quality, excellent
customer service, effective promotion, packaging, etc.
pricing objectives - =goals that describe what a firm wants to achieve through pricing
development of pricing objective - =- survival: ok to set temporary low prices in order to attract
more sales, used to keep company afloat by increasing sales volume
- profit: needs to be attainable
- ROI
- market share: want to maintain or increase market share, increase in market share is not
dependent on growth in the industry
- cash flow: setting price so one can recover cash app
- status quo: want to achieve stability & maintain success
- product quality: high prices signal high quality
demand curve - =a graphic representation of the quantity of products a firm expects to sell at
different prices holding other factors constant
- demand and price are inversely related
price elasticity of deman - =provides a measure of the sensitivity of consumer demand for a
product or product category to changes in price
,elasticity - =the percentage change in quantity demanded relative to a given percentage change in
price
inelastic demand - =increase in price does not affect quantity demanded very much
ex: gas
total revenue = price x quantity - =
if demand is elastic -> a shift a price causes an opposite change in total revenue - =- an increase
in price will decrease total revenue
- decrease in price will increase total revenue
if demand is inelastic -> results in a change in the same direction as total revenue - =- and
increase in price will increase total revenue
- decrease in price will decrease total revenue
price elasticity of demand = % change in quantity demanded / % change in price - =the less
elastic the demand, the more beneficial it is for the seller to raise the price
marginal analysis - =examines what happens to a firm's cost and revenues when product (or sales
volume) changes by a single unit
fixed costs - =do no vary with changes in the number of units produced or self
ex: rent
, average fixed cost - =fixed cost per unit produced and is calculated by dividing fixed costs by the
number of units produced
- decline are output increases: manufacturers gain cost and production savings from larger
outputs as the fixed costs become smaller proportion of the avg. total cost and the producer can
take full advantage of efficiencies
variable costs - =directly related to changes in the number of units produced or sold
- held constant per unit
total costs - =the sum of the average fixed costs and the average variable costs multiplied by the
quantity produced
marginal cost - =the extra costs a firm incurs when it produced one additional unit of a product
- MC curve crosses the ang. total cost curve at its lowest point
-point where production is the most efficient in terms of cost
- point when manufacturers should maintain their production
- avg. total cost decreases as MC is less than avg. total cost
- avg. total cost increases when MC rises above average total cost
marginal revenue - =change in total revenue that arises from the sale of an additional unit of a
product
- each additional unit of product sold provides the firm with less revenue than the previous unit
sold
- decreases as price decreases and quantity sold increases
PASSED
PRICE - =the measurement of value commonly used in exchanges
- relates directly to the generation of total revenue
process used by marketers to set prices - =- develop a price objective that is compatible with the
org overall marketing objective
- assess the target market's evaluation of price
- identify a product's demand and the price elasticity of demand
- analyze demand, cost, and other profit relationships
- evaluate competitors price
- select a pricing strategy/determine the role of price in the marketing mix
- determine the final price
price competition - =occurs when a seller emphasizes a products low price and set a price that
equals or beats that of competitors
- want to be the low-cost seller of product
- need to have flexibility to change prices rapidly and aggresively in response to others
,nonprice competition - =competition based on factors other than price, product quality, excellent
customer service, effective promotion, packaging, etc.
pricing objectives - =goals that describe what a firm wants to achieve through pricing
development of pricing objective - =- survival: ok to set temporary low prices in order to attract
more sales, used to keep company afloat by increasing sales volume
- profit: needs to be attainable
- ROI
- market share: want to maintain or increase market share, increase in market share is not
dependent on growth in the industry
- cash flow: setting price so one can recover cash app
- status quo: want to achieve stability & maintain success
- product quality: high prices signal high quality
demand curve - =a graphic representation of the quantity of products a firm expects to sell at
different prices holding other factors constant
- demand and price are inversely related
price elasticity of deman - =provides a measure of the sensitivity of consumer demand for a
product or product category to changes in price
,elasticity - =the percentage change in quantity demanded relative to a given percentage change in
price
inelastic demand - =increase in price does not affect quantity demanded very much
ex: gas
total revenue = price x quantity - =
if demand is elastic -> a shift a price causes an opposite change in total revenue - =- an increase
in price will decrease total revenue
- decrease in price will increase total revenue
if demand is inelastic -> results in a change in the same direction as total revenue - =- and
increase in price will increase total revenue
- decrease in price will decrease total revenue
price elasticity of demand = % change in quantity demanded / % change in price - =the less
elastic the demand, the more beneficial it is for the seller to raise the price
marginal analysis - =examines what happens to a firm's cost and revenues when product (or sales
volume) changes by a single unit
fixed costs - =do no vary with changes in the number of units produced or self
ex: rent
, average fixed cost - =fixed cost per unit produced and is calculated by dividing fixed costs by the
number of units produced
- decline are output increases: manufacturers gain cost and production savings from larger
outputs as the fixed costs become smaller proportion of the avg. total cost and the producer can
take full advantage of efficiencies
variable costs - =directly related to changes in the number of units produced or sold
- held constant per unit
total costs - =the sum of the average fixed costs and the average variable costs multiplied by the
quantity produced
marginal cost - =the extra costs a firm incurs when it produced one additional unit of a product
- MC curve crosses the ang. total cost curve at its lowest point
-point where production is the most efficient in terms of cost
- point when manufacturers should maintain their production
- avg. total cost decreases as MC is less than avg. total cost
- avg. total cost increases when MC rises above average total cost
marginal revenue - =change in total revenue that arises from the sale of an additional unit of a
product
- each additional unit of product sold provides the firm with less revenue than the previous unit
sold
- decreases as price decreases and quantity sold increases
