Study Guide - Exam 6

Study Guide - Exam 6 - Marketing Study Guide Exam 5 Chapter...

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Marketing Study Guide Exam 5 Chapter 17 Price – the amount of money that is charged for “something’ of value. Almost every business transaction in our modern economy involves and exchange of money – the price – for something. Target return objective – sets a specific level of profit as an objective. This is usually stated as a percentage of sales or of capital investment. Has advantages in a large company. Profit maximization objective – seeks to get as much profit as possible but doesn’t always lead to high prices Sales-oriented objective – seeks some level of unit sales, dollar sales, or share of market – without referring to profit Status quo objectives – don’t rocking the pricing boat objectives. Common when the total market is not growing Nonprice competition – aggressive action on one or more of the Ps other than Price Administered prices – consciously set prices. Instead of letting daily market forces (or auctions) decide their prices, most firms set their own prices One-price policy – offering the same price to all customers who purchase products under essentially the same conditions and in the same quantities. Makes pricing easier Flexible-price policy – offering the same product and quantities to different customers at different prices Skimming price policy – tries to sell to top (skim the cream) of a market – the top of the demand curve – at a high price before aiming at more price-sensitive customers. May maximize profits in the market introduction stage Penetration pricing policy – tries to sell the whole market at one low price. This is wise when the elite market is small. Introductory price dealing – temporary price cuts – to speed new products into a market and get customers to try them. Plan is to raise prices as soon as the introductory offer is over. Basic list prices – the prices final customers or users are normally asked to pay for products Discounts – reductions from list price given by a seller to buyers who either give up some marketing function or provide the function themselves Quantity discounts – discounts offered to encourage customers to buy in larger amounts. Usually given in discounts, sometimes given as free or bonus products. Cumulative quantity discounts – apply to purchases over a given period – such as a year – and the discount usually increases as the amount purchased increases. Encourages repeat buying and develops loyalty and ongoing relationships. Noncumulative quantity discounts – apply only to individual orders, such discounts encourage larger orders but do not tie a buyer to the seller after that one purchase. Seasonal discounts –
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This note was uploaded on 07/09/2008 for the course BCOR 2400 taught by Professor Rexmoody during the Fall '08 term at Colorado.

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Study Guide - Exam 6 - Marketing Study Guide Exam 5 Chapter...

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