Products Place And Price Flashcards
1
Q
Distinguish between the 5 characteristics of services
A
- Intangible - main distinguish between goods and services. * can not be seen, touch or smell before purchase, * judgmentis based on attitudes, feeling, perception and experience.
- Inseparability - simultaneously deliver and consumption of service, distribution roles are integrated, can not exist without a customer.
- Hetoregeneity- standardization of output is usually difficult. Units differ in price, quality and conformity. People and performance are not consistent.
Ownership - customers only access a service, no ownership transfer fees, payment is for hire or temporary use. - Perishability - services are perishable and cannot be stored, services are time dependant, quality lies within the provider
2
Q
Four objectives of pricing used in order to set the prices of their products
A
- Competive pricing
- Prestigevpricing
- Profitability pricing
- Volume pricing
3
Q
Explain competitive pricing
A
This frequently used pricing objective is to match the price ready set by the industry leader. A company focuses its efforts on other ways to attract new customers.
4
Q
Explain Prestige pricing
A
- the company may promote, maintain or enhance an image of their product through the use of Prestige pricing which involves pricing the product in a higher price range.
- this is done to limit its availability to the higher end consumer
- this limited availability enhances the products image causing it to be viewed as prestigious.
5
Q
Explain Profitibility pricing
A
_ the basic idea is to maximize profit
- the formula for this objective states (Profit = Revenue - Expenses)
- Revenue is determined by a products selling price and the number of units sold.
6
Q
Explain Volume Pricing objevtive
A
- when a company uses this objective, it is attempting to maximize sales within predetermined profit guidelines.
- a company using this objective prices a product lower than normal but expects to make up the difference with a higher sales volume
