buad 332 exam 3 Q&A 2023

what is a narrow definition for price? - Answer- price is the *amount of money* charged for a product or service what is a more broad definition for price? aka price = ________. - Answer- price is the *sum* of all the *values that consumers exchange* for the *benefits of having or using the product* price = SACRIFICE there is a pair of boots sold on Amazon and at Dillard's for $88 with the same tax and no shipping. are they the same price? -- what question are we really asking here? - Answer- are they the same *sacrifice*? - amazon's pair is cheaper because you dont have to go get them - dillard's pair is cheaper because you dont hace to wait for them to be delivered, and you can try them on before you buy them *marketeres have to consider that customers will pick they product they get for less sacrifice not always a cheaper price* what 2 types of factors affect price decisions? what makes up each type? - Answer- 1. internal factors = marketing objectives, marketing mix strategies, costs, organizational considerations 2. external factors = nature of market and demand, competition, other environmental factors (economy, government, resellers, social concerns) what are 4 strategies marketers could use to respond to internal factors when choosing the price for a product? what characterizes each? what's an example of each? - Answer- 1. *survival* strategy: low prices with hope it'll increase demand; Amazon 2. *current profit maximization* strategy: choose the price that produces the maximum current profit 3. *market share leadership* strategy: low as possible prices to become the market share leader; Walmart 4. *product quality leadership* strategy: high prices to cover higher performance quality and R&D; Marriot what internal factors affect our price? - Answer- TOTAL COSTS = 1. fixed costs + 2. variable costs ______ determines the floor of our price, but _________ determine the ceiling. - Answer- cost -- floor c