MAR 3023 Exam 4 Massiah || Questions and 100% Accurate Answers.
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Course
MAR 3023
Institution
MAR 3023
Price correct answers The overall sacrifice a consumer is willing to make (money, time, energy) to acquire a specific product or service. Only part of marketing mix that generates revenue one of most important factors.
The 5 C's of Pricing correct answers Company objectives, customers, costs, co...
MAR 3023 Exam 4 Massiah || Questions and 100% Accurate
Answers.
Price correct answers The overall sacrifice a consumer is willing to make (money, time, energy)
to acquire a specific product or service. Only part of marketing mix that generates revenue one of
most important factors.
The 5 C's of Pricing correct answers Company objectives, customers, costs, competition, channel
members
Profit-oriented correct answers Focusing on target profit pricing, maximizing profits, or target
return pricing.
Ex: institute a companywide policy that all products must provide for at least an 18% profit
margin to reach a particular profit goal for the firm.
Sales-oriented correct answers Set prices believe that increasing sales will help the firm more
than increasing profit. Price low to maximize sales so not left holding any excess inventory.
Ex: set prices very low to generate new sales and take sales away from competitors, even if
profits suffer.
Competitor-oriented correct answers Firm should measure itself primarily against its
competition.
Ex: to discourage more competitors from entering the market, set prices very low.
Customer-oriented correct answers Sets pricing strategy based on how it can add value to its
product or services.
Ex: target a market segment of consumers who highly value a particular product benefit and set
prices relatively high (referred to as premium pricing)
Demand curve correct answers Shows how many units of a product or service consumers will
demand during a specific period of time at different prices. Can be either straight or curved.
Prestigious products or services have upward sloping curves.
Price elasticity of demand correct answers Measures how changes in price affect the quantity of
the product demanded
Formula: % change in quantity demand/ % changes in price
Income effect correct answers The change in the quantity of a product demanded by consumers
due to changes in their incomes
Substitution effect correct answers Ability to substitute other products for the focal brand
Cross-price elasticity correct answers Percentage changes in the quantity of a Product A
demanded compared with the percentage in price in Product B
, Complimentary- Products whose demand are positively related, rise or fall together
Substitute- Changes in demand are negatively related.
Break-even analysis correct answers Used to examine the relationships among cost, price,
revenue, and profit over different levels of production and sales.
Drawbacks- It cannot predict how many units will sell
It represents an average price to account for variance.
Includes- Total costs, fixed costs, total revenue
Break even point (units) correct answers the point in which the number of units sold generates
just enough revenue to equal the total costs
Fixed costs / Contribution per unit
Competition correct answers Impact on pricing strategies; focus on its effects as well as how
competitors react to certain pricing strategies
Channel members correct answers Manufacturers, wholesalers, and retailers
Developing a price that allows all channel members to earn their requisite profits requires careful
planning.
Cost-based methods correct answers Determines the final price to charge by starting with the
cost, without recognizing the role that consumers or competitors' prices play in the marketplace
Requires that all costs be identified and calculated on a per-unit basis
Competitor-based pricing correct answers Reflect how the firm wants the consumers to interpret
the products relative to the competitors' offerings
Price wars = empty victory
Value-based methods correct answers Setting prices that focus on the overall value of the
product offering as perceived by the consumer by comparing the benefits they expect the product
to deliver with the sacrifice they will need to make to acquire the product
Everyday low pricing (Walmart) correct answers Companies stress the continuity of their retail
prices at a level somewhere between the regular, non sale price and the deep-discount sale prices
their competitors may offer
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