MKT Exam 2 (class 10)

What is value-based pricing?

uses the buyers perceptions of value, not the sellers cost, as the key to pricing

What are the value-based pricing strategies?

good-value pricing, everyday low pricing, value-added pricing, high-low pricing

What is good-value pricing?

offers the right combination of quality and good service to fair price

What is everyday low pricing?

involves charging a constant everyday low price with a few or no temporary

What is value-added pricing?

attaches value-added features and services to differentiate offers, support higher prices, and build brand power

What is high-low pricing?

involves charging higher prices on an everyday basis but running frequent promotions to lower prices temporarily on selected items

What is cost-based pricing?

involved setting the price based on the costs of producing, distributing, and selling the product plus fair rate of return for effort and risk

What are the cost-based pricing strategies?

cost-plus pricing, break-even pricing, target pricing

What is cost-plus pricing?

adds a standard markup to the cost of the product

What is break-even pricing?

sets the price to break even on the costs of making and marketing a product

What is target pricing?

sets the price to make a specific target return

What is break-even price?

the price at which total costs are equal to total revenue and there is no profit

What are fixed costs?

the costs that do not vary with production or sales level

What are variable costs?

the costs that vary with the level of production

What is the total cost per unit formula?

unit cost= variable costs + (fixed costs/expected unit sales)

What is the margin formula?

margin % = (selling price- cost) / selling price

What is the markup formula?

Markup % = (selling price- cost) / cost