Marketing ABC

lcarter's version from 2016-05-05 16:37

Section 1

Question Answer
PriceThe amount of something, money or effort or goods, that a buyer exchanges with a seller for a product
Price Setting ProcessDefine the Pricing Objectives; Evaluate Demand; Determine the costs; Analyze the Competitive Price Environment; Choose a Price; Monitor and Evaluate the Effectiveness of the Price
Profit maximization (Price skimming)Setting a higher price at the initial product release
Volume maximizationSetting low prices to encourage higher volumes to be moved
Survival PricingSetting a low price to just get by short time

Section 2

Question Answer
Marginal revenueThe additional revenue from one more unit sold
Marginal costThe change in cost from producing one more unit
Price SensitivityHow much demand changes according to price change
Reference pricesWhat consumers consider a fair price
UnderpricingA mistake - charging less that what they’re willing to pay

Section 3

Question Answer
UnbundlingSeperating components of product and pricing individually
Escalator ClauseClause in contract that allows price increases
Penetration PricingOffering a low price for a new product to attract new customers
Prestige PricingUsing high pricing to make product seem more luxurious
Seasonal DiscountsPrice reductions given during usual firms “downtimes”

Section 4

Question Answer
Dynamic PricingPricing according to constantly changing conditions
Price DiscriminationPractice of charging different prices to different customers
Price FixingWhen multiple companies decide to band together a set a price for higher profits

Section 5

Question Answer
ProductSpecific combination of goods and services that firm offers to the market
Product LineGroup of related products marketed by the same firm
Product line ExtenstionsProducts that extend and supplement a company’s established line
New-To-The-MarketInventions that have never been seen by the market before
New Product Development ProcessNew Product Strategy Development; Idea generation; Idea Screening; Business Analysis; Product Development; Test marketing; Product launch