Pricing Terminology (10) Flashcards
(51 cards)
a _______ is what is being charged or exchanged for a product or service
price
What is price?
what is being charged or exchanged for a product or service
What is value?
What a product or service is worth to a consumer, or the maximum amount a consumer would pay
Value is what a product or service is ______ to a consumer
worth
Price is what is being ______ or exchanged for a product or service
charged
What are fixed costs?
costs associated with the operating and marketing expenses of a company
Fixed costs are costs associated with…
the operating and marketing expenses of a company
Fixed costs are the costs associated with the _______ and _______ expenses of a company
operating, marketing
Do fixed costs change with the number of products sold?
No
an example of this type of cost is the cost of renting a warehouse to store product
fixed costs

Fixed costs ____ ____ over the number of units sold
spread out

What are variable costs?
the per-unit costs associated with the product.
the per-unit costs associated with the product are called…
variable costs
what is an example of variable costs?
the cost of material to make the product. If it costs $1 in material to make a widget, then it costs the company $1 in variable costs each time it produces a widget.

the breakeven point for a product is…
the point at which revenues equal expenses

what is a breakeven quantity?
A breakeven quantity is the quantity the company needs to sell at a certain price in order to cover fixed costs.
A breakeven quantity is the quantity the company needs to ______ at a certain price in order to cover ______ costs.
sell, fixed

Thr breakeven price is the amount…
the amount a marketer needs to price a product in order to cover expenses at a certain quantity sold.
The amount a marketer needs to price a product in order to cover expenses at a certain quantitiy sold is called…
breakeven price
the quantity the company needs to sell at a certain price in order to cover fixed costs is called…
breakeven quantity
What is the first step to developing a pricing structure?
how there particular industry behaves with prices
What are the two general types of industries for pricing?
dumb industry
price industry
What happens in a dumb industry?
companies tend to compete for price



