Pricing Terminology (10) Flashcards Preview

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Flashcards in Pricing Terminology (10) Deck (51)
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1

a _______ is what is being charged or exchanged for a product or service

price

2

What is price?

what is being charged or exchanged for a product or service

3

What is value?

What a product or service is worth to a consumer, or the maximum amount a consumer would pay

4

Value is what a product or service is ______ to a consumer

worth

5

Price is what is being ______ or exchanged for a product or service

charged

6

What are fixed costs?

costs associated with the operating and marketing expenses of a company

7

Fixed costs are costs associated with...

the operating and marketing expenses of a company

8

Fixed costs are the costs associated with the _______ and _______ expenses of a company

operating, marketing

9

Do fixed costs change with the number of products sold?

No

10

an example of this type of cost is the cost of renting a warehouse to store product

fixed costs

11

Fixed costs ____ ____ over the number of units sold 

spread out 

12

What are variable costs? 

the per-unit costs associated with the product.

13

the per-unit costs associated with the product are called...

variable costs 

14

what is an example of variable costs? 

the cost of material to make the product. If it costs $1 in material to make a widget, then it costs the company $1 in variable costs each time it produces a widget.

15

the breakeven point for a product is...

the point at which revenues equal expenses 

16

what is a breakeven quantity? 

A breakeven quantity is the quantity the company needs to sell at a certain price in order to cover fixed costs.

17

A breakeven quantity is the quantity the company needs to ______ at a certain price in order to cover ______ costs.

sell, fixed 

18

Thr breakeven price is the amount...

the amount a marketer needs to price a product in order to cover expenses at a certain quantity sold.

19

The amount a marketer needs to price a product in order to cover expenses at a certain quantitiy sold is called...

breakeven price 

20

21

 the quantity the company needs to sell at a certain price in order to cover fixed costs is called...

breakeven quantity 

22

What is the first step to developing a pricing structure? 

how there particular industry behaves with prices 

23

What are the two general types of industries for pricing? 

dumb industry

price industry 

24

What happens in a dumb industry? 

companies tend to compete for price 

25

In a dumb industry companies...

tend to compete for price 

26

What is a company’s main strategy for winning customers in a dumb industry?  

its main differentiator is to simply have the lowest price. 

27

Competition for the lowest priced product is called...

price wars 

28

what is a "price sensitive" customer greatly influecned by? 

the price of the product 

29

In which price market do you find price senstive buyers? 

dumb 

30

Dumb markets lead to...

price sensitive customers and price wars