MKT 300 Exam 4 With complete verified
solutions (Guaranteed Pass)
Module 6 - answer 💰 Pricing
💰 Marketing Channels
💰 Retailing
Pricing - answer 💰 $ - what you pay for something or...
💰The value that you exchange for benefits of having or using the
product/service (i.e. time, psychological costs, other resources)
Internal Factors of Price - answer 1. Marketing Objectives
💰 to maximize profit
💰 to gain market share
💰 to infer a level of quality
💰 to survive
2. Marketing Mix Strategy
💰 price needs to be consistent with other 3P's (needs to reflect
advertising, etc)
,3. Costs
💰 your costs affect your profit, so set the optimal price
External Factors of Price - answer 1. Demand for your product
2. Competition
💰 Competitors prices
💰 Strength of competition
3. Economy
💰 Cost of components (natural resources)
💰 Economic conditions
Price Elasticity - answer Tell us how much the demand for a product will
change with a change in price
Elastic - answer Consumers buy more or less of a product when the
price changes
Inelastic - answer An increase or decrease in price will not significantly
affect demand
,Unitary elasticity - never the right answer on my exam - answer An
increase in sales exactly offsets a decrease in prices, and revenue is
unchanged
Know what happens to price/revenue when the demand is elastic -
answer 💰 If demand greatly changes with a price change, demand is
elastic
💰 Products that are price-sensitive and have many substitutes
💰 A relatively small decrease in price results in a substantial increase
in quantity demanded
Know what happens to price/revenue when the demand is inelastic -
answer 💰 If demand hardly changes with price change, demand is
inelastic
💰 Products that are less price-sensitive and have few substitutes
💰 A relatively large increase in price results in only a small decrease in
quantity demanded
Stages for Establishing Prices - answer 1. Develop pricing objectives
2. Assess target market's evaluation of price
3. Evaluate competitors' prices
4. Select a basis for pricing
5. Select a pricing strategy
, 6. Determine a specific price
Develop pricing objectives - answer
Profit - answer Identify price and cost levels that allow the firm to
maximize profit per product
Status Quo - answer Identify price levels similar to competitor average
price
Market Share - answer adjust price levels so the firm can maintain or
increase sales relative to competitors' sales
Selecting a Basis for Pricing - answer 💰 Cost-plus pricing: adding a
specified dollar amount to the seller's costs
💰 Markup: Adding to the price of the product a predetermined
percentage of the variable cost
💰 Margin: Adding to the price of product a predetermined percentage
of the total price
Cost (markup and break-even) - answer 💰 Cost-plus pricing: adding a
specified dollar amount to the seller's costs
solutions (Guaranteed Pass)
Module 6 - answer 💰 Pricing
💰 Marketing Channels
💰 Retailing
Pricing - answer 💰 $ - what you pay for something or...
💰The value that you exchange for benefits of having or using the
product/service (i.e. time, psychological costs, other resources)
Internal Factors of Price - answer 1. Marketing Objectives
💰 to maximize profit
💰 to gain market share
💰 to infer a level of quality
💰 to survive
2. Marketing Mix Strategy
💰 price needs to be consistent with other 3P's (needs to reflect
advertising, etc)
,3. Costs
💰 your costs affect your profit, so set the optimal price
External Factors of Price - answer 1. Demand for your product
2. Competition
💰 Competitors prices
💰 Strength of competition
3. Economy
💰 Cost of components (natural resources)
💰 Economic conditions
Price Elasticity - answer Tell us how much the demand for a product will
change with a change in price
Elastic - answer Consumers buy more or less of a product when the
price changes
Inelastic - answer An increase or decrease in price will not significantly
affect demand
,Unitary elasticity - never the right answer on my exam - answer An
increase in sales exactly offsets a decrease in prices, and revenue is
unchanged
Know what happens to price/revenue when the demand is elastic -
answer 💰 If demand greatly changes with a price change, demand is
elastic
💰 Products that are price-sensitive and have many substitutes
💰 A relatively small decrease in price results in a substantial increase
in quantity demanded
Know what happens to price/revenue when the demand is inelastic -
answer 💰 If demand hardly changes with price change, demand is
inelastic
💰 Products that are less price-sensitive and have few substitutes
💰 A relatively large increase in price results in only a small decrease in
quantity demanded
Stages for Establishing Prices - answer 1. Develop pricing objectives
2. Assess target market's evaluation of price
3. Evaluate competitors' prices
4. Select a basis for pricing
5. Select a pricing strategy
, 6. Determine a specific price
Develop pricing objectives - answer
Profit - answer Identify price and cost levels that allow the firm to
maximize profit per product
Status Quo - answer Identify price levels similar to competitor average
price
Market Share - answer adjust price levels so the firm can maintain or
increase sales relative to competitors' sales
Selecting a Basis for Pricing - answer 💰 Cost-plus pricing: adding a
specified dollar amount to the seller's costs
💰 Markup: Adding to the price of the product a predetermined
percentage of the variable cost
💰 Margin: Adding to the price of product a predetermined percentage
of the total price
Cost (markup and break-even) - answer 💰 Cost-plus pricing: adding a
specified dollar amount to the seller's costs
