Marketing - Pricing Concepts

These flashcards summarize key concepts of pricing strategies in marketing from the provided lecture notes.

What is the definition of Price in marketing?

The money or other considerations, including other goods and services, exchanged for the ownership or use of a product.

What does price imply about a product?

Price implies product quality, which isn't always reality.

What are the two types of costs involved in calculating Break-Even Point?

Fixed costs (remain constant regardless of quantity) and variable costs (vary directly with quantity).

What is the Break-Even Point (BEP)?

The quantity at which total revenue equals total costs, resulting in a profit of $0.

Name one prohibited pricing practice.

Price Fixing, Price Discrimination, Deceptive Pricing, Predatory Pricing.

What is Value Pricing?

Increasing product or service benefits while maintaining or decreasing price.

What is the purpose of evaluating demand in pricing strategy?

To understand how sensitive consumer demand and the firm’s revenues are to changes in the product’s price.

What are some factors that limit pricing decisions?

Demand for the product, newness of the product, production and marketing costs, competitors' prices.

What is the formula for Total Revenue?

Total Revenue (TR) equals Unit Price (P) multiplied by Quantity Sold (Q).

What is a One-price Policy?

A single price for all buyers of a good or service.

What is a flexible-price policy?

Different prices depending on individual buyers and purchase situations to suit variations in demand, cost, and competitive factors.

What is 'Perceived Value'?

The value consumers assign to a product based on their perceptions of its quality and benefits.

How do pricing decisions affect total revenue?

Pricing decisions influence both total revenue (sales) and total costs, making them critical for marketing executives.

What is the importance of monitoring competitor pricing?

To continually adjust prices in response to competitor activity, legislative changes, and consumer demand.

What must be considered in setting a product price?

Pricing objectives, constraints, market demand, and the product's costs.

What does the term 'Barter' refer to in pricing?

Exchanging goods and services for other goods and services without using money.

What are 'Incentives and Allowances' in terms of pricing?

Reductions applied to the list price that can include rebates or discounts.