Services - Answer-the intangible activities or benefits that an organization provides to satisfy consumers' needs in exchange for money or something else of value
4 I's of Services - Answer-Four unique elements to services: intangibility, inconsistency, inseparability, and inventory
7 P's of ...
MGT 103 Exam 2 Questions with
Complete Answers
Services - Answer-the intangible activities or benefits that an organization provides to
satisfy consumers' needs in exchange for money or something else of value
4 I's of Services - Answer-Four unique elements to services: intangibility, inconsistency,
inseparability, and inventory
7 P's of Services Marketing - Answer-Expanded marketing mix concept. Includes
original 4 P's (product, price, promotion, place/distribution) as well as people, physical
environment, and process.
Revenue Equation - Answer-Revenue = Price x Quantity
Profit Equation - Answer-Profit = Total Revenue - Total Cost
Profit = (Unit Price x Quantity Sold) - (Fixed Cost + Variable Cost)
Six steps in setting Price - Answer-Step 1: Identify pricing objectives and constraints
Step 2: Estimate demand and revenue
Step 3: Determine cost, volume, and profit relationships
Step 4: Select an approximate price level
Step 5: Set list or quoted price
Step 6: Make special adjustments to list or quoted price
Step 1 in setting price - Answer-Identify pricing objectives and constraints
- objectives like profit, market share, and survival
- constraints like demand, newness, cost, and competition
Step 2 in setting price - Answer-Estimate demand and revenue
-demand estimation
-sales revenue estimation
-price elasticity estimation
Step 3 in setting price - Answer-Determine cost, volume, and profit relationships
- cost estimation
- marginal analysis, in relation to profit
- Break-even analysis, in relation to profit
Price Elasticity of Demand (E) - Answer-E = Percentage Change in Qd/Percentage
Change in Price
Total Cost - Answer-Total expense incurred by a firm in producing and marketing a
product. Sum of FC and VC
Fixed Cost - Answer-Sum of expenses a firm that is stable and does not change w/
quantity of a product
Variable Cost - Answer-Sum of the expenses that vary directly with the quantity of a
product that is produced
Unit Variable Cost (UVC) - Answer-VC/Q
Demand Curve - Answer-A graph relating quantity sold and price, which shows the
maximum number of units that will be sold at a given price
Price Elasticity of Demand - Answer-The percentage change in quantity demanded
relative to a percentage change in price
Break-even analysis - Answer-a technique that analyzes the relationship b/w total
revenue and total cost to determine profitability at various levels of output
Pricing objectives - Answer-specify the role of price in an organization's marketing and
strategic plans
Pricing constraints - Answer-factors that limit the range of prices a firm may set
Step 5 in setting price - Answer-Set list or quoted price
-Fixed price or dynamic price
-Company, customer, and competitive effects
-Incremental costs and revenue
Step 6 in setting price - Answer-Make special adjustments to list or quoted price
- Discounts
- Allowances
- Geographical adjustments
CH14 Slides have a lot of pricing types - Answer-Skimming, penetration, prestige, price
lining, odd-even, target, bundle, yield management, standard markup, cost-plus,
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