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Chapter 19
Marketing
| Term | Definition |
|---|---|
| revenue | the price charged to customers multiplied by the number of units sold |
| profit | revenue minus expenses |
| ROI | net profit after taxes divided by total assets |
| market share | a company's product sales as a percentage of total sales for that industry |
| status quo pricing | a pricing objective that maintains existing prices or meets the competition's prices |
| demand | the quantity of a product that will be sold in the market at various prices for a specified period |
| supply | the quantity of product that will be offered to the market by a supplier at various prices for a specified period |
| price equilibrium | the price at which demand and supply are equal |
| elasticity of demand | consumers' responsiveness and sensitivity to changes in price |
| elastic demand | a situation in which consumer demand is sensitive to changes in demand |
| inelastic demand | a situation in which an increase of decrease in price will not significantly affect demand for the product |
| unitary elasticity | a situation in which total revenue remains the same when price changes |
| yield management systems (YMS) | a technique for adjusting prices that uses complex mathematical software to profitably fill unused capacity by discounting early purchases, limiting early sales at these discounted prices, and overbooking capacity |
| variable cost | a cost that varies with changes in level of output |
| fixed cost | a cost that doesn't change as output changes |
| average variable cost (AVC) | total variable costs divided by quantity of output |
| average total cost (ATC) | total costs divided by quantity of output |
| marginal cost (MC) | the change in total cost associated with one-unit change in output |
| markup pricing | the cost of buying the product from a producer, plus for amounts for profit and for expenses not otherwise accounted for |
| keystoning | the practice of marking up prices by 100% or doubling the cost |
| profit maximization | a method of setting prices that occurs when marginal revenue equals marginal cost |
| marginal revenue (MR) | the extra revenue associated with selling an extra unit of output or the change in total revenue with a one-unit change in output |
| break-even analysis | a method of determining what sales volume must be reached before total revenue equals total costs |
| selling against the brand | stocking well-known branded items at high prices in order to sell store brands at discounted prices |
| extranet | a private electronic network that links a company with its suppliers and customers |
| prestige pricing | charging a high price to help promote a high quality image |
Created by:
bdavid16
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