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Marketing Chap 10
| Question | Answer |
|---|---|
| price | the amount of something-money, time, or effort-that a buyer exchanges with a seller to obtain a product. |
| revenue | the result of the price charged to customers multiplied by the number of units sold. |
| profits | revenue minus total costs. |
| profit maximization | a pricing strategy that involves setting a relatively high price for a period of time after the product launches. |
| volume maximization | a pricing strategy that involves setting prices low to encourage a greater volume of purchases. |
| survival pricing | a pricing strategy that involves lowering prices to the point at which revenue just covers costs, allowing the firm to endure during a difficult time. |
| marginal revenue | the change in total revenue that results from selling one additional unit of product. |
| marginal cost | the change in total cost that results form producing one additional unit of product. |
| price sensitivity | the degree to which the price of a product affects cosumers' purchasing behavior. |
| price elasticity of demand | a measure of price sensitivity that gives the percentage change in quatity demanded in response to a percentage change in price (holding constant all the other determinants of demand, such as income) |
| inelastic demand | a situation in which a specific change in price causes only a small change in the amount purchased. |
| fixed costs | costs that remain constant and do not vary based on the number of units produced or sold. |
| variable costs | costs that vary depending on the number of units produced or sold. |
| break-even analysis | the process of calculating the break-even point, which equals the sales volume needed to achieve a profit of zero. |
| break-even point | the point at which the costs of producing a product equal the revenue made from selling the product. |
| reference prices | the prices that consumers consider reasonable and fair for a product. |
| underpricing | charging someone less than they are willing to pay |
| unbundling | separating out the individual goods, services, or ideas that make up a product and pricing each one individually. |
| escalator clause | a section in a contract that ensures that providers of goods and services do not encounter unreasonable financial hardship as a result of uncontrollable increases in the costs of or decreases in required to deliver products to customers. |
| markup pricing | a pricing method in which a certain maount ofis added to the cost of the product to set the final price. |
| profit margin | the amount a product sells for above the total cost of the product itself. |
| odd pricing | a pricing tactic in which a firm prices products a few cents below the next dollar amount |
| prestige pricing | a pricing strategy that involves pricing a product higher than competitors to signal that it is of higher quality.. |
| seasonal discounts | price reductions given to customers purchasing goods or services out of season |
| price bundling | a strategy in which two or more products are packaged together and sold at a single price. |
| dynamic pricing | a pricing strategy that involves constantly updating prices to reflect changes in supply, demand, or market conditions. |
| yield management | a strategy for maximizing revenue even when a firm has a fixed amount of something |
| gray market | the sale of branded products through legal but unauthorized distribution channels. |
| tariffs | taxes on imports and exports between countries |
| dumping | a protectionist strategy in which a company sells its exports to another country at a lower price than it sells the same product in its domestic market. |
| price discrimination | the practice of charging different customers different prices for the same product. |
| price fixing | when two or more companies collude to set a product's price. |
| predatory pricing | the practice of first setting prices low with the intention of pushing competitors out of the market or keeping new competitors from entering the market, and then raising prices to normal levels. |
| deceptive pricing | an illegal practice that involves intentionally misleading customers with price promotions. |
| robinson-patman Act | a law passed that required sellers to charge everyone the same price for a product. |
| Federal Trade Commission Act | established the Federal Trade Comission and sought to prevent pratices that may cause injury to customers, that coan't be resonably avoided by customers, and that can't be justified by other outcomes that may benefit the cusumer or the idea or free compet |
| Wheeler-Lea Act | an amendment to the Federal Trade Commission Act passed that removed the burden of proving that unfair and deceptive practices had to injure competition. |
Created by:
audmid