TEST BANK For Marketing: Real People, Real Choices
11th Edition by Solomon; Marshall; Stuart
Answer the terms below?
Bitcoin - ANSWER: The most popular and fastest-growing digital currency.
Price - ANSWER: The assignment of value, or the amount the consumer must
exchange to receive the offering.
Elements of Price Planning - ANSWER: The elements of planning include six steps- 1.
Developing Pricing Objectiveas. 2. Estimating Demand. 3. Determining Costs. 4.
Evaluating the pricing environment. 5. Choosing a Pricing Strategy. 6. Developing
Pricing Tactics.
Market Share - ANSWER: The percentage of a market (defined in terms of either
sales units or revenue) accounted for by a specific firm, product lines, or brands.
Prestige Products - ANSWER: Products that have a high price and that appeal to
status-conscious consumers.
Price Elasticity of Demand - ANSWER: The percentage change in unit sales that
results from a percentage change in price.
Elastic Demand - ANSWER: Demand in which changes in price have large effects on
the amount demanded.
Inelastic Demand - ANSWER: Demand in which changes in price have little or no
effect on the amount demanded.
Cross-Elasticity of Demand - ANSWER: When changes in the price of one product
affect the demand for another item.
Variable Costs - ANSWER: The costs of production (raw and processed materials,
parts, and labor) that are tied to and vary, depending on the number of units
produced.
Fixed Costs - ANSWER: Costs of production that do not change with the number of
units produced.
Average Fixed Cost - ANSWER: The fixed cost per unit produced.
Total Costs - ANSWER: The total of the fixed costs and the variable costs for a set
number of units produced.
, Break-Even Analysis - ANSWER: A method for determining the number of units that a
firm must produce and sell at a given price to cover all its costs.
Break-Even Point - ANSWER: The point at which the total revenue and total costs are
equal and beyond which the company makes a profit; below that point, the firm will
suffer a loss.
Contribution per Unit - ANSWER: The difference between the price the firm charges
for a product and the variable costs.
Markup - ANSWER: An amount added to the cost of a product to create the price at
which a channel member will sell the product.
Gross Margin - ANSWER: The markup amount added to the cost of a product to
cover the fixed costs of the retailer or wholesaler and leave an amount for a profit.
Retailer Margin - ANSWER: The margin added to the cost of a product by a retailer.
Wholesaler Margin - ANSWER: The amount added to the cost of a product by a
wholesaler.
List Price or Manufacturer's Suggested Retail Price (MSRP) - ANSWER: The price that
the manufacturer sets as the appropriate price for the end consumer to pay.
Cost-Plus Pricing - ANSWER: A method of setting prices in which the seller totals all
the costs for the product and then adds an amount to arrive at the selling price.
Demand-Based Pricing - ANSWER: A price-setting method based on estimates of
demand at different prices.
Target Costing - ANSWER: A process in which firms identify all the quality and
functionality needed to satisfy customers and what price they are willing to pay
before the product is designed; the product is manufactured only if the firm can
control costs to meet the required price.
Yield Management Pricing - ANSWER: A practice of charging different prices to
different customers in order to manage capacity while maximizing revenues.
Price Leadership - ANSWER: A pricing strategy in which one firm first sets its price,
and other firms in the industry follow with the same or very similar prices.
Value Pricing/ Everyday Low Pricing (EDLP) - ANSWER: A pricing Strategy in which a
firm sets prices that provide ultimate value tp customers.
Skimming Price - ANSWER: A very high, premium price that a firm charges for its
new, highly desirable product.
11th Edition by Solomon; Marshall; Stuart
Answer the terms below?
Bitcoin - ANSWER: The most popular and fastest-growing digital currency.
Price - ANSWER: The assignment of value, or the amount the consumer must
exchange to receive the offering.
Elements of Price Planning - ANSWER: The elements of planning include six steps- 1.
Developing Pricing Objectiveas. 2. Estimating Demand. 3. Determining Costs. 4.
Evaluating the pricing environment. 5. Choosing a Pricing Strategy. 6. Developing
Pricing Tactics.
Market Share - ANSWER: The percentage of a market (defined in terms of either
sales units or revenue) accounted for by a specific firm, product lines, or brands.
Prestige Products - ANSWER: Products that have a high price and that appeal to
status-conscious consumers.
Price Elasticity of Demand - ANSWER: The percentage change in unit sales that
results from a percentage change in price.
Elastic Demand - ANSWER: Demand in which changes in price have large effects on
the amount demanded.
Inelastic Demand - ANSWER: Demand in which changes in price have little or no
effect on the amount demanded.
Cross-Elasticity of Demand - ANSWER: When changes in the price of one product
affect the demand for another item.
Variable Costs - ANSWER: The costs of production (raw and processed materials,
parts, and labor) that are tied to and vary, depending on the number of units
produced.
Fixed Costs - ANSWER: Costs of production that do not change with the number of
units produced.
Average Fixed Cost - ANSWER: The fixed cost per unit produced.
Total Costs - ANSWER: The total of the fixed costs and the variable costs for a set
number of units produced.
, Break-Even Analysis - ANSWER: A method for determining the number of units that a
firm must produce and sell at a given price to cover all its costs.
Break-Even Point - ANSWER: The point at which the total revenue and total costs are
equal and beyond which the company makes a profit; below that point, the firm will
suffer a loss.
Contribution per Unit - ANSWER: The difference between the price the firm charges
for a product and the variable costs.
Markup - ANSWER: An amount added to the cost of a product to create the price at
which a channel member will sell the product.
Gross Margin - ANSWER: The markup amount added to the cost of a product to
cover the fixed costs of the retailer or wholesaler and leave an amount for a profit.
Retailer Margin - ANSWER: The margin added to the cost of a product by a retailer.
Wholesaler Margin - ANSWER: The amount added to the cost of a product by a
wholesaler.
List Price or Manufacturer's Suggested Retail Price (MSRP) - ANSWER: The price that
the manufacturer sets as the appropriate price for the end consumer to pay.
Cost-Plus Pricing - ANSWER: A method of setting prices in which the seller totals all
the costs for the product and then adds an amount to arrive at the selling price.
Demand-Based Pricing - ANSWER: A price-setting method based on estimates of
demand at different prices.
Target Costing - ANSWER: A process in which firms identify all the quality and
functionality needed to satisfy customers and what price they are willing to pay
before the product is designed; the product is manufactured only if the firm can
control costs to meet the required price.
Yield Management Pricing - ANSWER: A practice of charging different prices to
different customers in order to manage capacity while maximizing revenues.
Price Leadership - ANSWER: A pricing strategy in which one firm first sets its price,
and other firms in the industry follow with the same or very similar prices.
Value Pricing/ Everyday Low Pricing (EDLP) - ANSWER: A pricing Strategy in which a
firm sets prices that provide ultimate value tp customers.
Skimming Price - ANSWER: A very high, premium price that a firm charges for its
new, highly desirable product.
