{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Marketing Review - Chapter18 1. markups...

Info icon This preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Marketing exam two review Chapter 18 1. Understand how most wholesalers and retailers set their prices by using  markups Markup—a dollar amount added to the cost of products to get the selling price Markup Percent=(selling price-cost)/selling price Standard markup near gross margin0 2 Stockturn Rate low stockturn increases inventory carrying cost and ties up working capital high stockturn rate, low markup 3. Average-cost pricing Adding a reasonable markup to the average cost of a product Disadvantage: Doesn’t consider cost variation at different levels of output. Price set by this method may yield profits but not necessarily maximum profits.  Ignore competitor’s price 4. Break-even points BEP(in unit)=TFC/(SP-VC) Cost-oriented Approach
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Does not consider demand curve 5. Marginal Analysis consider cost and demand getting an estimate of how profit might vary across a range of relavant prices 6. Price sensitivity substitute ways compare price shares the cost  total expenditure significance of the end benefit  switching cost 7. demand estimate price setting  value in use pricing; reference price; leader pricing; bait pricing; psychological  pricing; odd-even pricing; pricing lining; demand-backward pricing; prestige  pricing;  Full lining pricing  Complementary product pricing; bundle pricing Bid pricing, negotiated price 
Image of page 2
Chapter 17 Price is the amount of money that is charged for something of value—exchange  of money  Something value—physical good, service, assurance of quality, repair facilities,  packaging, credit, warranty 1. pricing objectives—pricing decisions Profit oriented Target return objective sets a specific level of profit as an objective. Often it is  stated as percentage of sales or of capital investment. Can be compared Some managers aim for only satisfactory returns. They just want returns that  ensure the firm’s survival and convince stockholders they are doing a good job Many private and public nonprofit organizations—just cover the cost Firms that provide critical public service—pursue satisfactory long-run targets.  Public expercts them to set prices are in the public interest Profit maximization—can be low and high price Sales Oriented—unit sales, dollar sales, share of market—without referring to  profit Problem: firm’s costs are grow faster than sales Market share—better economics scale, easy to determine than whether profits  are maximized, increasing market share may still lose profits Status quo oriented—maintain market share and profit Most common when total market is not growng  May be a part of overall marketing strategy focusing on non-price competition 
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern