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MKTG 336 > MKTG 336 Exam 3 - FLASHCARDS - Chapter 12 > Flashcards

MKTG 336 Exam 3 - FLASHCARDS - Chapter 12

(68 cards)

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1
Q

What principle reflects a clear understanding of how a firm’s products or services create value for customers?

A

Value based

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2
Q

What principle anticipates disruptive events?

A

Proactive

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3
Q

What principle judges success based on bottom-line performance, rather than the level of revenue generated?

A

Profit driven

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4
Q

What help in making pricing decisions?

A

Price objectives

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5
Q

What are principal pricing objectives and collateral pricing goals of the marketer?

A
  1. Achieving target return on investment
  2. Achieving market-share goal
  3. Meeting competition
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6
Q

How do companies focus on long-term relationships built around value and lower total cost?

A
  1. Providing unique add-on benefits by building trust
  2. Demonstrating commitment and flexibility
  3. Initiating joint working relationships that enhance customer value and loyalty
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7
Q

What are the core differentiators of value creation?

A
  1. Service support
  2. Personal interactions
  3. Suppliers know-how
  4. Ability to improve customer’s time to market
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8
Q

What are the moderate differentiators of value creation?

A
  1. Product quality
  2. Delivery
  3. Acquisition and operation costs
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9
Q

What are the determinants of demand?

A
  1. Usage and importance of the product/service by various market segments
  2. Potential demand
  3. Price sensitivity
  4. Potential profitability
  5. Assessing the value placed by a customer on a product
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10
Q

What determines the appropriateness of a pricing strategy?

A

Value

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11
Q

What type of value represents cost saving and/or revenue gains when purchasing a product (instead of the next best alternative) Points of Parity/Differentiation?

A

Economic value

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12
Q

What type of value is value that customers assign to features that resemble competitive offerings?

A

Commodity value

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13
Q

What type of value represents the value of features that are unique and different from that of the competitor’s?

A

Differentiation value

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14
Q

What value driver creates value by providing economic savings?

A

Cost drivers

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15
Q

What value driver adds incremental value by facilitating revenue or margin requirements?

A

Revenue drivers

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16
Q

What measures how sensitive customers are to price changes?

A

Price elasticity

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17
Q

What is the rate of percentage change in quantity demanded to percentage change in price?

A

Price elasticity of demand

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18
Q

If a price change creates a large change in demand, is this elastic or inelastic demand?

A

Elastic

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19
Q

If a price change creates a small change in demand, is this elastic or inelastic demand?

A

Inelastic

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20
Q

True or false: the flexibility of customers in comparing alternatives and switching suppliers affects the price elasticiy of demand?

A

true

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21
Q

True or false: the importance of the product in the cost structure of the customer’s product affects the price elasticiy of demand?

A

true

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22
Q

True or false: the value that a product represents to a customer affects the price elasticiy of demand?

A

true

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23
Q

Does reduced customer price sensitivity affect the price elasticity of demand?

A

Yes

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24
Q

Do switching costs affect the price elasticity of demand?

A

Yes

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25
What is it called when value that customers assign to a firm’s offering might vary based on market segments?
Value based segmentation
26
True or false: some industrial products serve different purposes for different markets?
true
27
What does target pricing and costing begin with?
Begins by examining and segmenting the market
28
What determines what type, quality, and attributes each segment wants at a pre-determined target price and volume level?
Target price and costing
29
What is the goal of the cost-classification system?
Properly classify cost data into their fixed and variable components and link them to the activity causing them
30
What type of costs are fixed or variable costs that are solely incurred for a particular product, territory, or customer?
Direct traceable or attributable costs
31
What type of costs are raw materials?
Direct traceable or attributable costs
32
What type of costs are fixed or variable costs that can be traced to a particular product, customer, or territory?
Indirect traceable costs
33
What type of costs are costs that support a number of activities not directly related to a particular product?
General costs
34
True or false: price is a component of the cost/benefit equation?
true
35
What establishes an upper limit on price?
Competition
36
What are factors that help gain a differential advantage over competitors other than price?
Reputation Technical expertise Delivery reliability
37
What pricing strategy is setting a price at the highest level the market will bear, usually because there is no competition at the time?
Skimming
38
What pricing strategy is setting a price above that of the competition so as to indicate a higher quality or that a product is a status symbol?
Prestige or premium pricing
39
What pricing strategy is setting a price that ends in the number 5, 7, or 9?
Odd-even pricing
40
What pricing strategy is the practice of setting (usually) three price points: good quality, better quality, best quality?
Price lining
41
What are created by successful companies to pursue strategies that provide temporary advantages?
Hyper-competitive rivalries
42
True or false: an estimate of the cost structure is valuable when gauging how well competitors can respond to price reductions?
true
43
True or false: an estimate of the cost structure is valuable when projecting the pattern of prices in the future?
true
44
Is skimming appropriate for old products?
No, only distinctly new products
45
What provides the firm with opportunity to profitably reach market segments that are not sensitive to high initial price?
Skimming
46
Is skimming charging a high initial price?
Yes. Price skimming is a pricing strategy that involves launching at a high price and reducing the price over time
47
True or false: skimming enables marketer to capture early profits?
true
48
What is charging a very low initial price?
Price penetration
49
If there is a high price elasticity of demand, do you use skimming or penetration?
Penetration
50
If there strong threat of imminent competition, do you use skimming or penetration?
Penetration
51
What pricing strategy do you use if there is an opportunity for a substantial production cost reduction as volume expands?
Penetration
52
True or false: a firm with an extended product line faces difficulty in balancing prices in the product mix?
true
53
Why might a firm with an extended product line face difficulty in balancing prices in the product mix?
Because various products may have different costs, varying degrees of competition, and customer perceptions of value that need to be considered
54
If both the demand and the costs of individual product-line items are interrelated, what happens?
Production and marketing decisions about one item become interdependent on one another
55
What holds it unlawful to discriminate in price between different purchasers of commodities of similar grade and quality with the aim of decreasing competition?
Robinson-Patman Act
56
What is developing a price or a bid to meet a customer’s particular product or service requirements?
Competitive bidding
57
What two groups engage in bidding?
Governments and large companies
58
What type of bidding is where suppliers submit a written bid on a specific contract and all bids are opened simultaneously?
Closed bidding
59
Who is the contract awarded to in closed bidding?
To the lowest bidder
60
What type of bid does only one supplier and one buyer have access to the bids?
On-line sealed bids
61
What type of bidding is an informal invitation that allows suppliers to make offers up to a certain date?
Open bidding
62
What type of bidding is undertaken when the specific requirements are hard to define?
Open bidding
63
What is the format of open bidding?
Suppliers are invited to bid simultaneously during a designated time period for the contract
64
What is the goal of open bidding?
To reduce the price
65
True or false: with competitive bidding, firms should choose bid opportunities with care?
true
66
True or false: with competitive bidding, firms should find contracts that offer the most promise?
true
67
True or false: with competitive bidding, firms should remember that the low bidder may be able to secure much more business that is profitable over the longer term?
true
68
True or false: with competitive bidding, firms should assess the chances of the initial contract leading to follow-up business opportunities?
true

MKTG 336 (10 decks)

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