Chapter 13

the money exchanged for the owner ship of a product

the practice of exchanging a product or service for another product or service rather than with money

the perceived benefits for pricing

The practicing of simentaneously increasing the product benefits while maintaing decreasing prices

total revenue - total cost

• 1. identifying price objectives
• 2. estimate demand revenue
• 3. determine cost volume and profit relationship
• 4. select price level
• 5. set quoted price
• 6. make adjustments to quoted price

specifies the role of price in the marketing plans

• 1. profit
• 2. sales
• 3. market share
• 4. unit volume
• 5. survival
• 6. social responsiblity

the quantity produced or sold as a share

factors that limit the range of prices a firm may set

• 1. demand for product class, product line and brand
• 2. newness of the product
• 3. single product vs. product line
• 4. cost of producing and marketing
• 5. cost of changing prices and the time period they apply
• 6. type of competitive market
• 7. competitors prices

a graph relating the quantity sold and price that shows the maximum number of units that will be sold at a certain price

• 1. consumer taste
• 2. price and availbility
• 3. consumer income

factors that affect consumers willingess and ablility to pay for the product

concepts critical to pricing decisions

the money recieved from the sale of the product

the average amount of money recieved for sell one unit of a product or simple price of the unit.

Total revenue/Quanity sold

the change in total revenue that results from producing and marketing one additional unit of product

the percentage in quantity demanded relative to a percentage change

when one percent decrease in price produces more than a one percent increase in quantity demanded

when a one percent decrease in price produces less than a one percent increase in quantity demanded

When the percentage change is identical to the percentage change in quantity demanded

a continuing concise trade off of incremental costs agains incremental revenue

the total expense incurred by a firm in producing and marketing a product

the sumer of the expenses of the firm that are stable and do not change with the quantity of a product that is produced and sold

the sum of expenses of the firm that vary directly with the quantity of the product being produced and sold

variable cost expressed on a per unit basis for a product

The change in the total cost that results from producing and marketing one additional product

a technique used to analyze the relationship between total revenue and total cost to determine the profitabliity at various levels

the quanity sold when total cost and total revenue are equal

a graphic presentation of the break even analysis

total revenue - total cost