Marketing Ch.13 Flashcards Preview

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Flashcards in Marketing Ch.13 Deck (25)
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1
Q

Value

A

the ration of precieved benifits to price or value=benifits/price

2
Q

value pricing

A

the practice of simultaneously increasing product and service benefits while maintaining or decreasing price

3
Q

profit equation

A

profit=total revenue-total cost = (unit price*quantity sold)+(fixed cost + variable cost)

4
Q

Pricing objectives

A

specifying the role of price in an organizations marketing and strategic plans

5
Q

pricing constraints

A

the factors that limit the range of prices a firm may set

6
Q

demand curve

A

graph relating the quantity sold and price

7
Q

demand factors

A

factors that determine consumer’s willingness and ability to pay for products and services

8
Q

Total Revenue(TR)

A

TR=P*Q
P=unit price
Q=quantity sold
Total money recieved from the sale of a product

9
Q

Average Revenue

A

is the average amount of money received for selling one unit of a product, or simply the price of that unit. Average revenue is the total revenue divided by the quantity sold:
AR=(TR)/Q = P

10
Q

Marginal Revenue(MR)

A

is the change in total revenue that results from producing and marketing one additional unit of a product

MR=(change in TR)/(1 unit increase in Q)=(deltaTR/deltaQ)= slope of TR curve

11
Q

Price Elasticity of Demand-

A

percent change in quantity demand relative to a percent change in price

(% change in quantity demanded)/(% change in price)

12
Q

Elastic Demand

A

when a 1 percent decrease in price produces more than a 1% increase in quantity demanded (increasing sales revenue)

13
Q

Inelastic Demand-

A

exists when a 1 percent decrease in price produces less than a 1% increase in quantity demanded (decreasing sales revenue)

14
Q

Unitary Demand-

A

exists when the % change is identical

15
Q

more substitues

A

more price elastic

16
Q

product and services considere to be necessities

A

price inelastic

17
Q

items that require a large cash outlay compared with a person’s disposable income

A

price elastic

18
Q

Total Cost TC

A

total expense incurred by a firm in producing/marketing a product
TC=FC+VC

19
Q

Fixed Costs(FC)

A

sum of expenses of the firm that are stable and do not hcange with the quantity of a product that is produced and sold. (ie rent)

20
Q

Variable Cost (VC

A

the sume of the expenses of the firm that vary directly with the quantity of a product that is produced and sold.

21
Q

Unit Variable Cost (UVC)

A

vairable cost expressed on a per unit basis for a product

UVC=VC/Q

22
Q

Marginal Cost (MC)

A

change in total cost that resuluts form producting ad marketing one additional unit of a product

MC=(change in TC/1 unit increase in Q)=(deltaTC/deltaQ)= slope of TC curve

23
Q

Margnal Analysis

A

people will continue to do something as long as the incremental return exceeds the incremental cost

24
Q

Break Even analysis

A

analyzes the relationship between total revenue and total cost to determine profitability at various levels of output

25
Q

Break even point

A

quantity at which total revenue=total cost

BEP=(fixed cost/(unit price-unit vairable cost))= FC/P-UVC