Marketing Chapter 7

The process a co uses to determine the amount to charge a customer for a product.

A goal that a co. wants to achieve when pricing a product.

A pricing objective that focuses on the absolute or relative return that a co. wants a product to generate.

A profit-oriented pricing objective that typically sets a specific level of profit as an objective.

A pricing objective that focuses on a specific level of unit sales or dollar sales that a co. wants a product to generate.

A pricing obj. related to maintaining or increasing a particular level of market share.

The ratio of a co's sales of a product w/in a specified market at a given point in time to the total industry sales for that type of product in that same market.

A behavior a co exhibits when it sets its prices for products at the general level its competitors establish. AKA meeting the competition.

A type of competition that exists when co's attempt to gain customers by using marketing mix factors other than price.

A cost that is specifically traceable to or caused by a particular product.

A cost that is not directly traceable to any single product.

A cost that remains constant regardless of the amount or volume of a product sold over some determined time period.

A cost that varies directly with changes in the amount or volume of a product sold.

A measure of the importance a specific customer attaches to price and the customer's overall awareness of price.

A measure of a customers ability to buy. AKA buying power.

The number of units of a product that a co. can sell under given conditions.

In economic theory, a principle that states that all other factors remaining the same, as the price for a product increases, demand decreases and as the price for a product decreases, deman increases.

A microeconomic concept that measures the % change in the quantity demanded of a product relative to a % change in the products price.

A state that exists when a change in a products price results in a greater than proportional change in quantity demanded for that product.

A state that exists when a change in a products price results in a less than proportional change in quantity demanded for that product.

The amount of assets that a co has over and above its policy reserves and other obligations.

Liability accounts that identify the amounts of $ that an insurer estimates it needs to pay policy benefits as they come due.

A strategy that helps define the way a co establishes prices for its products.

A pricing strategy where co. sets its prices to cover the co's costs incurred in creating, selling, and servicing a product and to allow for a predetermined level of profit. AKA cost-plus strategy.

A pricing strategy where a co. sets prices according to what customers are willing to pay for the value they receive. AKA value-based pricing strategy.

The practice of offering price reductions to customers who purchase multiple products from a co's product mix.

A customer-driven pricing strategy based on the belief that customers find certain types of prices or price ranges more appealing than others.

A form of psychological pricing that involves setting intentionally high prices for a product to convey an image of high quality.

A customer driven pricing strategy where a co sets lower-than-normal prices on certain products in an attempt to stimulate sales of all of the co's products.

Product with price set intentionally low to attract customers who will buy more products at regular prices.

A price leader that is priced below cost.

A pricing strategy where co sets prices relative to those charged by its competitors.

A competition driven pricing strategy where co charges a comparatively low price designed to build market share and to produce a large sales volume quickly.

A competition driven pricing strategy where the price a co charges varies according to specific sales condtions. AKA variable pricing.

A process where buyers ask potential suppliers to offer price quotes on a proposed contract.

Contract with terms and prices of contract established thru talks b/t buyer & seller.

A rate structure with reduced premium rates offered to PIs whose health/lifestyles indicate mortality rate lower than avg.

A rate structure, rates graded by the size of the policy.

A method of providing quantity discounts in which a co creates a number of contiguous bands based on the face amount and charges different rates for each band.

Quantity discount method, co charges flat amount per policy to cover admin expenses plus a specific rate per thousand dollars of coverage.

A rate structure that has different rates for males & females.

A rate structure a co uses when it charges different rates depending on the jurisdiction, geographical area, or target market in which a product is sold. AKA market-specific-pricing or channel-specific pricing.

The difference b/t the investment rate the insurer assumes when pricing a product, and the the one the insurer actually earns.

The difference b/t the benefit costs assumed in pricing, and the products actual benefit costs.

The difference b/t operating expenses assumed when a product was priced, and expenses actually experienced.