Marketing 19

  1. Price
    that which is given up in an exchange to acquire a good or service
  2. Importance of Price
    • 1) to seller, price is revenue
    • 2) to consumer, price is cost of something
    • 3) price allocates resources in a free market economy
  3. Profit Oriented:
    • -objectives include profit maximization, satisfactory profits, and target ROI
    • Profit Maximization- setting prices so that total revenue is as large as possible relative to total costs
    • Satisfactory Profits-reasonable profit levels
    • ROI- most common profit objective. sometimes called firms return on total assets
  4. Sales-Oriented
    • based on Market share or Sales maximization
    • Market Share- company's product sales as a % of total sales for that industry
  5. Status Quo Pricing
    pricing objective that maintains existing prices or meets the competition's prices
  6. Demand Determinant of Price: Demand
    the quantity of a product that will be sold in the market at various prices for a specified period
  7. Demand Determinant of Price: Supply
    the quantity of a product that will be offered to the market by a supplier at various prices for a specific period.
  8. Price Equilibrium
    price at which demand and supply are equal
  9. Elasticity of Demand
    Consumers' responsiveness or sensitivity to changes in price
  10. Cost Determinant of Price: Markup Pricing
    the cost of buying the product from the producer, plus amounts for profit and for expenses not otherwise accounted for
  11. Cost Determinant of Price: Keystoning
    the practice of marking up prices by 100%, or doubling the cost
Card Set
Marketing 19
Marketing 19