COB 300D MARKETING FINAL EXAM
REVIEW QUESTIONS AND ANSWERS
Demand Curves and Pricing - Answer how many units of a product or service
consumers will demand during a specific period of time at different PRICES
price elasticity of demand - Answer-a measure of how much the quantity demanded of a
good respond to a change in the price of that good, computed as the percentage
change in quantity demanded divided by the percentage change in price
Price Elastic - Answer-
Factors Influencing Price Elasticity of Demand - Answer-(1) Substitution Effect
(2) Cross-Price Elasticity
(3) Income Effect
Substitution Effect - Answer-- Consumers' ability to substitute other products for the
focal brand.
- The greater the availability of substitute products, the higher the price elasticity of
demand
Cross-Price Elasticity - Answer-the percentage change in the quantity of Product A
demanded compared with the percentage change in price in Product B
Income Effect - Answer-the change in the quantity of a product demanded by
consumers due to changes in their incomes
Break-Even Analysis and Decision Making - Answer-useful technique that enables
managers to examine the relationships among cost, price, revenue, and profit over
different levels of production and sales
Break-Even Point - Answer-Fixed costs / contribution per unit
Monopoly Competition - Answer-One producer dominating the industry, leaving no room
for competitors
Oligopoly Competition - Answer-Handful of competitors selling products that can be
similar or different
monopolistic competition - Answer-A market structure in which barriers to entry are low
and many firms compete by selling differentiated products
Pure Competition - Answer-A market structure with many competitors selling virtually
identical products. Barriers to entry are quite low.
, Channel Members - Answer-Businesses or individuals who assist in moving goods and
services from the producer to the consumer
What is Value-Based Pricing Methods - Answer-approaches to setting prices that focus
on the overall value of the product offering as perceived by the consumer
What are Value-Based Methods - Answer-Improvement Value Method
Cost of Ownership Method
Improvement Value Method - Answer-represents an estimate of how much more (or
less) consumers are willing to pay for a product relative to other comparable products
Cost of Ownership Method - Answer-consumers may be willing to pay more for a
particular product because, over its entire lifetime, it will eventually cost less to own than
a cheaper alternative
Pricing Strategies - Answer-a long-term approach to setting prices broadly in an
integrative effort (across all the firm's products) based on the five Cs of pricing
Everyday Low Pricing (EDLP) - Answer-A strategy companies use to emphasize the
continuity of their retail prices at a level somewhere between the regular, nonsale price
and the deep-discount sale prices their competitors may offer.
High/ Low Pricing - Answer-a pricing strategy that relies on the promotion of sales,
during which prices are temporarily reduced to encourage purchases
New Product Pricing Strategies - Answer-penetration pricing
price skimming
Penetration Pricing - Answer-setting a low initial price on a new product to appeal
immediately to the mass market
Price Skimming - Answer-Charging the highest possible price that buyers who most
desire the product will pay
Pricing Tactics - Answer-Short-term pricing responses to opportunities or threats.
Pricing Tactics Aimed at Consumers - Answer-1. Markdowns
2. Quantity Discounts for Consumers
3. Seasonal Discounts
4. Coupons
5. Rebates
6. Leasing/Rentals
7. Price Bundling
8. Leader Pricing
REVIEW QUESTIONS AND ANSWERS
Demand Curves and Pricing - Answer how many units of a product or service
consumers will demand during a specific period of time at different PRICES
price elasticity of demand - Answer-a measure of how much the quantity demanded of a
good respond to a change in the price of that good, computed as the percentage
change in quantity demanded divided by the percentage change in price
Price Elastic - Answer-
Factors Influencing Price Elasticity of Demand - Answer-(1) Substitution Effect
(2) Cross-Price Elasticity
(3) Income Effect
Substitution Effect - Answer-- Consumers' ability to substitute other products for the
focal brand.
- The greater the availability of substitute products, the higher the price elasticity of
demand
Cross-Price Elasticity - Answer-the percentage change in the quantity of Product A
demanded compared with the percentage change in price in Product B
Income Effect - Answer-the change in the quantity of a product demanded by
consumers due to changes in their incomes
Break-Even Analysis and Decision Making - Answer-useful technique that enables
managers to examine the relationships among cost, price, revenue, and profit over
different levels of production and sales
Break-Even Point - Answer-Fixed costs / contribution per unit
Monopoly Competition - Answer-One producer dominating the industry, leaving no room
for competitors
Oligopoly Competition - Answer-Handful of competitors selling products that can be
similar or different
monopolistic competition - Answer-A market structure in which barriers to entry are low
and many firms compete by selling differentiated products
Pure Competition - Answer-A market structure with many competitors selling virtually
identical products. Barriers to entry are quite low.
, Channel Members - Answer-Businesses or individuals who assist in moving goods and
services from the producer to the consumer
What is Value-Based Pricing Methods - Answer-approaches to setting prices that focus
on the overall value of the product offering as perceived by the consumer
What are Value-Based Methods - Answer-Improvement Value Method
Cost of Ownership Method
Improvement Value Method - Answer-represents an estimate of how much more (or
less) consumers are willing to pay for a product relative to other comparable products
Cost of Ownership Method - Answer-consumers may be willing to pay more for a
particular product because, over its entire lifetime, it will eventually cost less to own than
a cheaper alternative
Pricing Strategies - Answer-a long-term approach to setting prices broadly in an
integrative effort (across all the firm's products) based on the five Cs of pricing
Everyday Low Pricing (EDLP) - Answer-A strategy companies use to emphasize the
continuity of their retail prices at a level somewhere between the regular, nonsale price
and the deep-discount sale prices their competitors may offer.
High/ Low Pricing - Answer-a pricing strategy that relies on the promotion of sales,
during which prices are temporarily reduced to encourage purchases
New Product Pricing Strategies - Answer-penetration pricing
price skimming
Penetration Pricing - Answer-setting a low initial price on a new product to appeal
immediately to the mass market
Price Skimming - Answer-Charging the highest possible price that buyers who most
desire the product will pay
Pricing Tactics - Answer-Short-term pricing responses to opportunities or threats.
Pricing Tactics Aimed at Consumers - Answer-1. Markdowns
2. Quantity Discounts for Consumers
3. Seasonal Discounts
4. Coupons
5. Rebates
6. Leasing/Rentals
7. Price Bundling
8. Leader Pricing
