BUAD 332 EXAM 3 QUESTIONS WITH 100 % CORRECT ANSWERS | VERIFIED

price definition: narrowly - the amount of money charged for a product or service price definition: broadly - the sum of all the values that consumers exchange for the benefits of having or using the product or service internal factors affecting price decisions - marketing objectives marketing mix strategies costs organizational considerations external factors affecting price decisions - nature of the market and demand competition other environmental factors (economy, gov, resellers, social concerns) internal factors affecting pricing decisions: marketing objectives - survival, current profit maximization, market share leadership, product quality leadership marketing objectives: survival - low prices hoping to increase demand marketing objectives: current profit maximization - choose the price that produces the maximum current profit marketing objectives: market share leadership - low as possible prices to become the market share leader marketing objectives: product quality leadership - high prices to cover higher performance quality and R+DInternal factor that affects price: costs - fixed costs, variable costs, total costs fixed costs (overhead) - costs that don't vary with sales or production levels ex. executive salaries, rent variable costs - costs that do vary directly with the level of production ex: raw materials total costs - sum of the fixed and variable costs for any given level of production external factors affecting pricing decisions - - markets and demand - competitors' costs, prices, and offers - other external factors- economic conditions, reseller reactions, government actions, social concerns market and demand factors affecting pricing decisions: pure competition - many buyers and sellers who have little effect on the price market and demand factors affecting pricing decisions: pure monopoly - single seller ex: Knoxville KUB market and demand factors affecting pricing decisions: monopolistic competition - many buyers and sellers who trade over a range of prices market and demand factors affecting pricing decisions: oligopolistic competition - few sellers who are sensitive to each other's pricing/marketing strategies the shape of the demand curve affects.... - the price elasticity of demand inelastic demand - demand hardly charges with a small change in priceelastic demand - demand changes greatly with a small change in price what marketers want to do - create inelastic demand creating inelastic demand - - brands will not be perceived as easily substitutable - customers won't always seek the lowest price - price cuts won't be the accepted way to increase demand - brands will be perceived as unique and will create a "monopoly" in the customers' minds - enhanced brand equity will allow a premium price to be charged