MGMT 321-Chapter 9

Question 1

Tangibility

Answer 1

Item’s capability of being touched, seen, tasted, or felt.

Question 2

Inseperability

Answer 2

Quality of a service in which the service being done cannot be disconnected from the provider of the service

Question 3

Herterogeneity

Answer 3

Quality of a service in which each time it is provided it will be slightly different from the previous time

Question 4

Total product

Answer 4

Entire bundle of products, services, and meanings of your offering; includes extras like service, warranty, or delivery, as well as what the product means to the customer

Question 5

Augmented Product

Answer 5

Core Product plus features that tend to differentiate it from the competition

Question 6

Core Product

Answer 6

the very basic description of what a product is

Question 7

Target Market

Answer 7

The group of people on which a marketer focuses promotion and sales efforts

Question 8

Me-too products

Answer 8

Products essentially similar to something already on the market

Question 9

Optimum Price

Answer 9

Highest price that will produce your desired level of sales in your intended market

Question 10

Markup Pricing

Answer 10

Price-setting method where an amount is added to the cost of a product to set the retail price and provide a profit

Question 11

Margin

Answer 11

Amount of profit, usually stated as a percentage of the total price

Question 12

Markup

Answer 12

the amount an entrepreneur adds to costs to provide a profit

Question 13

Elasticity

Answer 13

From economics, the idea that the market’s demand for a product or service is sensitive to changes in its price

Question 14

Inelastic Product

Answer 14

Product for which there are a few substitutes and for which a change in price

Question 15

Elastic Product

Answer 15

Product for which there are any number of substitutes and for which a change in price makes a difference in quantity purchased

Question 16

Law of supply and demand

Answer 16

Economic theory that describes how the demand for products (or services) and the supply of them affect each other

Question 17

Price Gouging

Answer 17

charging an unnecessary high price for something

Question 18

Internal reference price

Answer 18

consumer’s mental image of what a products price should be

Question 19

External reference price

Answer 19

An estimation of what a price should be based on information external to a consumer, such as advice, advertisements, or comparison shopping

Question 20

Skimming

Answer 20

Setting a price at the highest level the market will bear, usually because there is no competition at the time

Question 21

Prestige/Premium pricing

Answer 21

Setting a price above all that of the competition so as to indicate a higher quality or that a product is a status symbol

Question 22

Odd-even pricing

Answer 22

setting a price that ends in the number 5/7/9

Question 23

Partitioned Pricing

Answer 23

Setting the price for a base item and then charging extra for each additional component

Question 24

captive Pricing

Answer 24

setting the price for an item relatively low and then charging much higher prices for the expendables it uses

Question 25

Price Lining

Answer 25

Practice of setting three price points: good/better/best quality

Question 26

Periodic/Random Discounting

Answer 26

Sales conducted at either predictable or non predictable intervals

Question 27

Off-Peak Pricing

Answer 27

Charging lower prices at certain times to encourage customers to come during slack periods

Question 28

Bundling

Answer 28

Combining two or more products in one unit and pricing it less than if the units were sold separately

Question 29

multiple/bonus pack

Answer 29

combining more than one unit of the same product and pricing it lower than if each unit were sold separately

Question 30

referral discount

Answer 30

discount given to a customer who refers a friend to the business

Question 31

Characteristics of goods & services

Answer 31

- Goods differ from services in tangibility, inseparability, perishability, & heterogeneity - Few true goods & services exist; most products fall somewhere along a goods/services continuum and have components of each

Question 32

Define Total Product

Answer 32

- Product is a bundle of services & goods - -3 basic levels: Core, Augumented, & Total Product - Understanding total product allows you to concentrate on the features and aspects important to the customer and to coordinate your other mktg activities

Question 33

Stages of New Product Development

Answer 33

-Stages: Idea generation, idea screening, idea evaluation, product development (prototypes can be developed in order to do additional screening, and test markets or test market simulations can be run), commercialization (involves developing final mktg plan, getting the product into production, and the start of sales)

Question 34

Why is pricing an important but difficult task for small businesses?

Answer 34

- Owners of small businesses give a great deal of attention to issues of pricing - Price of product: function of the value placed on the product by the customer - Price: Directly related to revenue, indirectly related to volume; easiest mktg variable to change; essential part of competitive strategy

Question 35

What is price influenced by?

Answer 35

Effects of the law of supply and demand, margins set, and value you can show to your customers

Question 36

What is price setting influenced by?

Answer 36

``` Costs Customers Company Objectives Mktg strategy Channels of distribution competition legal & regulatory restrictions ```

Question 37

Pricing Strategies

Answer 37

- Consumer psychology has impact on pricing as well. Consumers get ideas about what is an acceptable price & what isn't. - Skimming, Prestige/Premium Pricing, Odd-Even Pricing, Partitioned pricing, captive pricing, & price lining