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MKT 301 - Ch. 19 - University of Louisville

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Section 1

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Two Approaches for Understanding Demand

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4 years ago

Date created

Mar 14, 2020

Cards (33)

Section 1

(33 cards)

Two Approaches for Understanding Demand

Front

1. Marginal Analysis 2. Break-even Analysis

Back

Pricing High

Front

Emphasizes quality

Back

Price

Front

value paid for a product in a marketing exchange

Back

Seasonal discount

Front

price reduction given to buyers purchasing out of season

Back

Cash discounts

Front

price reduction for prompt or cash payment

Back

Noncumulative discounts

Front

one-time price reductions based on number of units purchased, dollar value, or product mix

Back

Pricing Low

Front

emphasizes a bargain

Back

Cumulative discounts

Front

quantity discounts aggregated over a stated time period

Back

Types of Price Discounting

Front

1. Trade (functional) discounts 2. Quantity discounts

Back

Price Competition

Front

emphasizing price as an issue and matching or beating competitor's prices

Back

Causes of Demand Fluctuations

Front

1. Changes in buyers' needs 2. Variations in marketing effectiveness 3. Presence of substitutes 4. Dynamic environment

Back

Purpose of Marketing

Front

facilitating a satisfying exchange relationship between buyer and seller.

Back

Price Increases

Front

Something customers are becoming less tolerant of

Back

Demand

Front

quantity expected to be sold, ceteris parabis

Back

External Reference Price

Front

When advertisements provide price information to customers in order to establish reference price.

Back

Allowances

Front

concession in price given to achieve a desired goal

Back

Assessing Elasticity

Front

Delta in Q / Delta in Price

Back

Prestige Products

Front

sell better at higher prices, elitism, e.g. beauty products

Back

Breakeven Formula

Front

TFC / P - VC

Back

Profit

Front

(Price * Quantity Sold) - Total Cost

Back

Geographic pricing

Front

reductions for transportaio

Back

Price discounting

Front

1. Cash discounts 2. Seasonal discounts 3. Allowances

Back

Requirements of Price Competition

Front

1. A firm must be low-cost 2. A firm must be willing to change prices frequently 3. A firm must accept possibility of price wars

Back

Factors Affecting Pricing Decisions

Front

1. Organizational and Marketing Objectives 2. Pricing Objectives 3. Costs 4. Other marketing mix variables 5. Channel member expectations 6. Customer interpretation and response 7. Competition 8. Legal and regulatory issues

Back

Business Markets

Front

Unique pricing situation involving discounts, geographic pricing, and transfer pricing

Back

Price elasticity of demand

Front

A measure of sensitivity of demand to changes in price

Back

Breakeven Point

Front

Beyond this point, a firm is making profit. At this point, TR = TC

Back

Reference Price

Front

what consumers "expect" to pay for a product

Back

Trade discounts

Front

reduction off the list price a producer gives to an intermediary

Back

Elastic Demand

Front

Recreational vehicles, video games

Back

Shift Factors for Demand

Front

Marketing Mix, Quality, Promotion, or Distribution

Back

Quantity discounts

Front

1. Cumulative discounts 2. Noncumulative

Back

Inelastic demand

Front

Gasoline, water, etc.

Back