Chapter 13

  1. Price
    the money exchanged for the owner ship of a product
  2. Barter
    the practice of exchanging a product or service for another product or service rather than with money
  3. Value
    the perceived benefits for pricing
  4. Value pricing
    The practicing of simentaneously increasing the product benefits while maintaing decreasing prices
  5. Profit equation
    total revenue - total cost
  6. Six steps of process organization
    • 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
  7. Pricing objectives
    specifies the role of price in the marketing plans
  8. Factors affecting price objectives
    • 1. profit
    • 2. sales
    • 3. market share
    • 4. unit volume
    • 5. survival
    • 6. social responsiblity
  9. unit volume
    the quantity produced or sold as a share
  10. Pricing constraints
    factors that limit the range of prices a firm may set
  11. Factors affecting price constraints
    • 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
  12. Demand curve
    a graph relating the quantity sold and price that shows the maximum number of units that will be sold at a certain price
  13. Factors affecting the demand curve
    • 1. consumer taste
    • 2. price and availbility
    • 3. consumer income
  14. Demand factors
    factors that affect consumers willingess and ablility to pay for the product
  15. Revenue concepts
    concepts critical to pricing decisions
  16. Total revenue
    the money recieved from the sale of the product
  17. Average revenue
    the average amount of money recieved for sell one unit of a product or simple price of the unit.

    Total revenue/Quanity sold
  18. Marginal revenue
    the change in total revenue that results from producing and marketing one additional unit of product
  19. Price of elasticity of demand
    the percentage in quantity demanded relative to a percentage change
  20. Elastic demand
    when one percent decrease in price produces more than a one percent increase in quantity demanded
  21. Inelastic demand
    when a one percent decrease in price produces less than a one percent increase in quantity demanded
  22. Unitary demand
    When the percentage change is identical to the percentage change in quantity demanded
  23. Marginal analysis
    a continuing concise trade off of incremental costs agains incremental revenue
  24. Total cost
    the total expense incurred by a firm in producing and marketing a product
  25. Fixed cost
    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
  26. Variable cost
    the sum of expenses of the firm that vary directly with the quantity of the product being produced and sold
  27. Unit variable cost
    variable cost expressed on a per unit basis for a product
  28. Marginal cost
    The change in the total cost that results from producing and marketing one additional product
  29. Break even analysis
    a technique used to analyze the relationship between total revenue and total cost to determine the profitabliity at various levels
  30. Break even point
    the quanity sold when total cost and total revenue are equal
  31. Break even chart
    a graphic presentation of the break even analysis
  32. Profit
    total revenue - total cost
Card Set
Chapter 13
chapter 13