Kotler | Armstrong Marketing Chapter 10

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Price
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The amount of money charged for a product or service, or the sum of the values that consumers exchange for the benefits of having or using the product or service
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Dynamic pricing
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Charging different prices depending on individual customers and situations
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Target costing
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Pricing that starts with an ideal selling price, then targets costs that will ensure that the price is met
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Fixed costs
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Costs that do not vary with production or sales level
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Variable costs
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Costs that vary directly with the level of production
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Total costs
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The sum of the fixed and variable costs for any given level of production
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Experience curve (learning curve)
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The drop in the average per-unit cost that comes with accumulated production experience
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Demand curve
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A curve that shows the number of units the market will buy in a given time period, at different prices that might be charged
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Price elasticity
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A measure of the sensitivity of demand to changes in price
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Cost-plus pricing
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Adding a standard markup to the cost of production
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Break-even pricing (target profit pricing)
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Setting price to break even on the costs of making and marketing a product, or setting price to make a target profit
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Value-based pricing
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Setting price based on buyers’ perceptions of value rather than on the seller’s cost
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Value pricing
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Offering just the right combination of quality and good service at a fair price
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Competition-based pricing
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Setting prices based on the prices that competitors charge for similar products

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