Marketing Review - Chapter18 1. markups MarkupPercent=(sellingpricecost/sellingprice 2.Stocktu

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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
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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 
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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 
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This note was uploaded on 05/09/2011 for the course BUSI 406 taught by Professor Williamperreault during the Spring '11 term at University of North Carolina School of the Arts.

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Marketing Review - Chapter18 1. markups MarkupPercent=(sellingpricecost/sellingprice 2.Stocktu

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