Marketing 300 Exam 2 (UTK) – Questions and Answers
Price - --amount of money charged for a product or service
-determine's a firm's market share & profitability
-produces revenue
-Customer Value-Based Pricing - --based on a buyer's perceptions of value rather than on
the seller's cost.
(price is considered before the marketing program is set)
-Types of Values-Based Pricing - -Good-Value Pricing
Value-Added Pricing
-Good-Value Pricing - -offering just the right combination of quality and good service at a
fair price
-Value-Added Pricing - -charge higher prices than competitors because marketers can add
value.
-1st step in Cost-Based Pricing - -design a good product
-2nd step in Cost-Based Pricing - -determine product costs
-3rd step in Cost-Based Pricing - -set price based on cost
-4th step in Cost-Based Pricing - -convince buyers of product's value
-All steps in Cost-Based Pricing - -1. design a good product
2. determine product costs
3. set price based on cost
4. convince buyers of product's value
-1st step in Value-Based Pricing - -assess customer needs and value perceptions
-2nd step in Value-Based Pricing - -set target price to maintain customer perceived value
-3rd step in Value-Based Pricing - -determine costs that can be incurred
-4th step in Value-Based Pricing - -design products to deliver desired value at target price
-All steps in Value-Based Pricing - -1. assess customer needs and value perceptions
2. set target price to maintain customer perceived value
3. determine costs that can be incurred
4. design products to deliver desired value at target price
, -Cost-Plus Pricing - -(Markup Pricing)
adding a standard mark up to the cost of a product.
-Break-Even Pricing - -(Target Return Pricing)
setting price to break even on costs of making and marketing a product, or setting a price to
make a target return
-Competition-Based Pricing - -Setting prices based on competitors' strategies, costs,
prices, and market offerings
-INTERNAL Factors Affecting Pricing Decisions - --overall marketing strategy, objectives,
and mix
-organizational considerations
-EXTERNAL Factors Affecting Pricing Decisions - --market and demand
-economy
-impact on other parties in its environment
-Price Elasticity of Demand - -the measure of the sensitivity of demand to changes in price
-Inelastic Demand - -demand hardly changes with a small change in price
-Elastic Demand - -demand changes greatly with a small change in price
-Target Costing - -pricing that starts with an ideal selling price then targets costs that will
ensure that the price is met
-Demand Curve - -shows the number of units the market will buy in a given time period, at
different prices that might be changed
-Fixed Costs (Overhead) - -costs that do not vary with production or sales level
-Variable Costs - -costs that vary directly with the level of production
-Total Costs - -the sum of the fixed and variable costs for any given level of production.
-Market-Penetration Pricing - -setting a low price for a new product in order to attract a
large number of buyers and a large market share
-Market-Skimming Pricing - --setting a high price for a new product to skim maximum
revenues layer by layer from the segments willing to pay the high price
-the company makes fewer, but more profitable sales
-Psychological Pricing - -the price is used to say something about the product
Price - --amount of money charged for a product or service
-determine's a firm's market share & profitability
-produces revenue
-Customer Value-Based Pricing - --based on a buyer's perceptions of value rather than on
the seller's cost.
(price is considered before the marketing program is set)
-Types of Values-Based Pricing - -Good-Value Pricing
Value-Added Pricing
-Good-Value Pricing - -offering just the right combination of quality and good service at a
fair price
-Value-Added Pricing - -charge higher prices than competitors because marketers can add
value.
-1st step in Cost-Based Pricing - -design a good product
-2nd step in Cost-Based Pricing - -determine product costs
-3rd step in Cost-Based Pricing - -set price based on cost
-4th step in Cost-Based Pricing - -convince buyers of product's value
-All steps in Cost-Based Pricing - -1. design a good product
2. determine product costs
3. set price based on cost
4. convince buyers of product's value
-1st step in Value-Based Pricing - -assess customer needs and value perceptions
-2nd step in Value-Based Pricing - -set target price to maintain customer perceived value
-3rd step in Value-Based Pricing - -determine costs that can be incurred
-4th step in Value-Based Pricing - -design products to deliver desired value at target price
-All steps in Value-Based Pricing - -1. assess customer needs and value perceptions
2. set target price to maintain customer perceived value
3. determine costs that can be incurred
4. design products to deliver desired value at target price
, -Cost-Plus Pricing - -(Markup Pricing)
adding a standard mark up to the cost of a product.
-Break-Even Pricing - -(Target Return Pricing)
setting price to break even on costs of making and marketing a product, or setting a price to
make a target return
-Competition-Based Pricing - -Setting prices based on competitors' strategies, costs,
prices, and market offerings
-INTERNAL Factors Affecting Pricing Decisions - --overall marketing strategy, objectives,
and mix
-organizational considerations
-EXTERNAL Factors Affecting Pricing Decisions - --market and demand
-economy
-impact on other parties in its environment
-Price Elasticity of Demand - -the measure of the sensitivity of demand to changes in price
-Inelastic Demand - -demand hardly changes with a small change in price
-Elastic Demand - -demand changes greatly with a small change in price
-Target Costing - -pricing that starts with an ideal selling price then targets costs that will
ensure that the price is met
-Demand Curve - -shows the number of units the market will buy in a given time period, at
different prices that might be changed
-Fixed Costs (Overhead) - -costs that do not vary with production or sales level
-Variable Costs - -costs that vary directly with the level of production
-Total Costs - -the sum of the fixed and variable costs for any given level of production.
-Market-Penetration Pricing - -setting a low price for a new product in order to attract a
large number of buyers and a large market share
-Market-Skimming Pricing - --setting a high price for a new product to skim maximum
revenues layer by layer from the segments willing to pay the high price
-the company makes fewer, but more profitable sales
-Psychological Pricing - -the price is used to say something about the product
