Lecture 13 and 14 – Flashcards
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Price elasticity is the slope of the demand curve. When price elasticity is LOW?
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a. A small change in price will lead to a small change in quantity demanded
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Which of the following is a form of price?
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d. These are all forms of price
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Even if you have never seen a product before, you may have a sense of what it should sell for based on similar products that you have experienced in the past. Marketers need to be aware of this ___________ when they set prices for new products?
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e. Expected price
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BruceCo is planning on selling coffee cups for $14 each. The company can buy the cups for $2.00 and have them printed for $1.50. The package costs fifty cents. There is a one-time set up charge from the printer of $1,000. How many coffee cups will BruceCo have to sell in order to break even?
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a. 100
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Which of the following is an example of a question that can be answered using breakeven analysis?
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e. All of these are questions that can be answered using break even analysis.
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For prestige products - products that are consumed socially and confer status on their owners?
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c. Unit sales of the product can decrease if prices are lowered.
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The biggest drawback to every day low pricing is?
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b. It is easy for competitors to offer their products at a price slightly lower than yours.
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Colgate Palmolive created a special package that included a free regular-sized tube of toothpaste when you purchase a family-sized tube of toothpaste at the regular price. This is an example of?
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d. Price bundling
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Colgate Palmolive developed a new line of Colgate brand mouthwash. As part of the introduction, they included a free sample of Colgate mouthwash with every tube of Colgate toothpaste. This is an example of?
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a. Price bundling
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The Broyhill furniture company designed a sofa that retailers could sell for $699 and still make a profit. This was because retailers had told the company they needed a promotional sofa that would cost less than the $1000 or more for a typical sofa. They would feature the promotional sofa in their advertisements to bring customers into the store. This is an example of?
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e. Target profit pricing
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When goods and services are exchanged for other goods and services, rather than for money, it is referred to as __________?
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b. Barter
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Price elasticity is the slope of the demand curve. When price elasticity is LOW?
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c. A small change in price will lead to a small change in quantity demanded
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____________ are the costs of production that do not change with the number of units produced?
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e. Fixed costs
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Which of the following is NOT a factor that will affect the price elasticity of demand for a particular product?
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e. An increase in price for the product
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When marginal revenue is POSITIVE and prices decrease?
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b. All of these things happen when marginal revenue is positive and prices decrease.
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For prestige products - products that are consumed socially and confer status on their owners?
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c. Unit sales of the product can decrease if prices are lowered.
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Bruce went into an appliance store to purchase a 32" LCD tv for $249 as advertised in the local paper. When he got to the store, he was told that all of the $249tv's had been sold, but there was a 32" LCD tv available for $299 that he could purchase today. Bruce may have been a victim of?
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a. Bait and switch pricing
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According to the information in class, the fundamental issue in geographic pricing tactics is?
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c. Whether the buyer or the seller pays for the cost of transporting the product to the customer.
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For many products such as candy bars, there is a price consumers expect to pay for the product. Companies using the _____________ to setting prices will use this price for their products?
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c. Status quo pricing approach
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For many products such as candy bars, there is a price consumers expect to pay for the product. Retailers using the _____________ to setting prices will offer the product at a very low price in order to attract customers into their store?
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a. loss-leader approach
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In automating a manufacturing plant, which of these would definitely increase in the short run?
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b. Fixed cost
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Bruce is planning on selling sandwiches in class for $5 each. Food costs are $4. He will also need to buy an insulated cooler to store the sandwiches. This cooler costs $10. Bruce needs to make a profit of $25 to make it worth his while. How many sandwiches does Bruce need to sell to make the project worthwhile?
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a. 35
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Which of the following is a form of price?
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b. These are all forms of price
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Which of the following is NOT part of the price of a credit card for college students?
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c. All of these are part of the price of a credit card for college students
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Last year, BruceCo sold 1000 coffee cups for $10 each. This year, the company is planning on selling 1500 coffee cups. In order to cover the additional investment they will charge $10.50 for the first 500 cups, $10.25 for the second 500 cups and $10 for the last 500. Each cup costs $4.70 to produce. What is the average profit if they sell all 1500 cups?
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d. $5.55
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According to the information in class, the fundamental issue in geographic pricing tactics is?
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d. Whether the buyer or the seller pays for the cost of transporting the product to the customer.
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The San Francisco Municipal Railway (MUNI) Charges $2.00 for an adult passenger. Once you have purchased a fare (and taken a transfer as proof of payment) you can ride anywhere on the system for the next 90 minutes. This is an example of __________ geographic pricing.
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a. Uniform delivered price
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Which of the following is tactics is most likely to encourage customers to pay your asking price for a product.
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e. A price tag that looks like it was professionally printed.
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The __________ to setting prices weighs consumer tastes and preferences more heavily than costs and profits.
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a. Demand-based approach
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_______________ is used in situations where the final cost of a good or service may not be available at the time the agreement is reached?
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d. Cost plus pricing
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The market structure in which companies have the MOST flexibility in setting prices is?
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c. Pure monopoly
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What do we mean when we speak of the price/value heuristic?
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c. That in general, people perceive a product with a higher price to be a better product
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Which of the following is a form of price?
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d. These are all forms of price
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In addition to determining the amount of money you will receive for your product, price serves as a __________ tool, signaling to customers where your product stands in relation to similar product offerings?
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b. Positioning
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Last year, BruceCo sold 1000 coffee cups for $10 each. This year, the company is planning on selling 1500 coffee cups. In order to cover the additional investment they will charge $10.50 for the first 500 cups, $10.25 for the second 500 cups and $10 for the last 500. Each cup costs $4.70 to produce. What is the marginal profit for the 700th cup?
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a. $5.55
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The Senseo coffee maker is a machine that makes one cup of coffee at a time from specially prepared 'pods' of coffee. You can get the coffee maker at a very reasonable price. However, you can only get refill pods from the manufacturer and they tend to be expensive. This is an example of?
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e. Captive pricing
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Many large retail stores use ____________ because it would be impractical to calculate the correct price for thousands of items individually?
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a. Standard markup pricing
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According to the information in class, the fundamental issue in geographic pricing tactics is?
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e. Whether the buyer or the seller pays for the cost of transporting the product to the customer.
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Sometimes companies will sell a product below their cost of production for a short period in order to gain market share or to reduce excess inventory. This ____________ can be risky, especially if competitors match the reduced price making it difficult to raise prices back to long-term profitable levels.
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b. Price floor pricing
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Eseffisue Company has developed a portable solar-powered global positioning (GPS) device. There is a high demand for the product and until now, there wasn't anything like it on the market at any price. The company has a patent and the most important attribute for a GPS device is quality. Eseffisue Company should use a ____________ approach to pricing this product?
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d. Skimming
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Which of the following is an example of a direct channel of distribution?
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c. These are all direct channels of distribution.
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According to your instructor the balance of power in channels of distribution has shifted and continues to shift. In the past, manufacturers had the most power in a channel of distribution. In the future it is likely that the balance of power will continue to shift toward _________?
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d. Consumers
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Which of the following is NOT something you would like an intermediary to provide for your customers?
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a. Alternate products
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Kendra runs a wholesale distribution center for candy. Each week she receives candy from all of the major manufacturers. She stamps a date sticker on each package so the retailers will know how fresh the candy is. She also provides information on how much cocoa is in the chocolate from the various manufacturers. Kendra is adding value by ___________?
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d. Grading.
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A channel of distribution helps to create form, place, time and possession _________?
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d. Utility
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Which of the following is NOT a cost typically associated with logistics?
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e. Product development
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Carlina operates an oil refinery in Houston Texas. She gets her crude oil from the largest oilfield in Texas. Because the product is more or less fluid and because she knows exactly where the raw material is coming from and where it has to go, Carlina uses _________ transportation for this part of her business?
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Pipeline
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The decision to hold inventory is critical to providing customer service through the supply chain. There are both costs and benefits. Which of these is NOT a benefit of holding inventory?
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c. To create possession utility for producers
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When I order a book from Amazon.com, an online bookseller, I receive an order confirmation that tells me when my package will leave the Amazon warehouse, the name of the shipper, and a link to the shipper's website that allows me to track the progress of my package from the warehouse to my home. This way I know exactly when to expect my package. This is an example of the use of ____________ to smooth the flow of goods and services through the channel of distribution?
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e. Information
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The supply chain centers on the producer. Downstream activities consist of?
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d. The flow of finished product from the producer to the end user
