Sports Marketing, Chapter 9 – The Economics of Supply & Demand – Flashcards
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Finding a balance between what producers are willing to produce and what customers are willing to buy
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What is a major challenge for marketers?
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When the price goes up less people will buy it, vice verse
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Explain law of demand.
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When the price goes up the more products will be made, to even them out
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Explain law of supply.
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When the price rises the quantity will get higher.
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Explain the equilibrium price diagram; be able to draw.
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When the supply and demand level out
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What is the equilibrium.
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The higher the price, the less people will buy it so the demand is low
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How does price affect demand?
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Has an influence on the price for products through antitrust laws & taxation
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What is the governments involvement in free enterprise?
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They can get more ideas & encourages them to make new products
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List ways competition can be beneficial to businesses.
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The get more options & better quality products
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How is competition beneficial to consumers?
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True
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Tax reductions encourage production and sales. True or False:
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Price fixing, Bait & Switch, & price discrimination
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Name the 3 illegal pricing strategies.
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If has stations in Fayetteville came together and decided they were going to raise the gas prices
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Give an example of price fixing.
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If Sketchers advertises a sale and when you go to buy it, it is out of stock; but then they direct you to the more expensive Foot Locker
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Give an example of Bait & switch.
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If someone was to charge someone that looked poor a higher price than someone that looked wealthy.
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Give an example of price discrimination.
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Antitrust laws, taxation, & various consumer protection laws
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List 3 ways the government influences pricing.
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Cost of merchandise, operating expenses, & how much profit you want
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What do you have to consider when pricing goods?
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Utilities, salaries, & feeder all income taxes
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Give examples of operating expenses.
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Foot Locker is the high end price line and champs would be the alternative
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Give an example of price lines.
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Odd-even pricing; putting .99 instead of a full dollar amount
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Give an example of psychological pricing.
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Nike socks sold in Dicks will be more expensive than in Walmart because the have "better" quality
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Give an example of prestige pricing.
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Saying a deal like 3 for $3; if the predicts is only $1 and some, getting cheated
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Give an example of promotional pricing.
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Dicks putting college t-shirts on sale during March Madness
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Give an example of loss-leader pricing.
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Determine cost of product or service, Estimate customer demand, study the competition, & decide on pricing strategy
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Name the 5 steps to determining the price to charge for a good or service.
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Peak (top), contraction (down), trough (bottom), expansion (up)
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Be able to label and explain the business (economic) cycle.
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If people don't have jobs or money then they will not be buying as many products
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How does inflation contribute to a recession.
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So they do not lose profit
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Why must sports and entertainment marketers pay careful attention to cubs under trends?
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Divide the markup by the original price.
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How do you determine the markup percentage?
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Gross domestic product.
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What does GDP stand for?
