Flashcards in Marketing Ch.13 Deck (25)

Loading flashcards...

1

## Value

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

2

## value pricing

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

3

## profit equation

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

4

## Pricing objectives

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

5

## pricing constraints

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

6

## demand curve

### graph relating the quantity sold and price

7

## demand factors

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

8

## Total Revenue(TR)

###
TR=P*Q

P=unit price

Q=quantity sold

Total money recieved from the sale of a product

9

## Average Revenue

###
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

## Marginal Revenue(MR)

###
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

## Price Elasticity of Demand-

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

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

12

## Elastic Demand

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

13

## Inelastic Demand-

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

14

## Unitary Demand-

###
exists when the % change is identical

15

## more substitues

### more price elastic

16

## product and services considere to be necessities

### price inelastic

17

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

### price elastic

18

## Total Cost TC

###
total expense incurred by a firm in producing/marketing a product

TC=FC+VC

19

## Fixed Costs(FC)

### 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

## Variable Cost (VC

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

21

## Unit Variable Cost (UVC)

###
vairable cost expressed on a per unit basis for a product

UVC=VC/Q

22

## Marginal Cost (MC)

###
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

## Margnal Analysis

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

24

## Break Even analysis

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

25