BUAD 332 Exam 3 Questions with Complete

BUAD 332 Exam 3 Questions with Complete Solutions price (narrow definition) - Correct Answers amount of money charged for a product or service price (broad definition) - Correct Answers sum of all values that customers exchange for the benefits of having or using the product or service internal factors affecting price decisions - Correct Answers - marketing objectives

• marketing mix strategies
• costs
• organizational considerations

external factors affecting price decisions - Correct Answers - nature of the market and demand

• competition
• other environmental factors (economy, government, resellers, social concerns)

marketing objectives - Correct Answers - survival

• current profit maximization
• market share leadership
• product quality leadership

survival - Correct Answers low prices hoping to increase demand current profit maximization - Correct Answers choose the price that produces the maximum current profit market share leadership - Correct Answers low as possible prices to become the market share leader product quality leadership - Correct Answers high prices to cover higher performance, quality, and R&D costs - Correct Answers fixed costs + variable costs = total costs 1 / 2

pure competition - Correct Answers many buyers and sellers who have little effect on price monopolistic competition - Correct Answers many buyers and sellers who trade over a range of prices pure monopoly - Correct Answers single seller oligopolistic competition - Correct Answers few sellers who are sensitive to each other's pricing/marketing strategies inelastic demand - Correct Answers demand hardly changes with a small change in price elastic demand - Correct Answers demand changes greatly with a small change in price what marketers want to do - Correct Answers reduce price elasticity market-skimming - Correct Answers setting a high price for a new product to "skim" maximum revenues from target market market penetration - Correct Answers setting a low price for a new product in order to "penetrate" the market quickly and deeply optional-product - Correct Answers pricing optional or accessory products sold with the main product captive-product - Correct Answers pricing products that must be used with the main product psychological pricing - Correct Answers price becomes an important quality signal when customers can't judge the quality; price is used to say something about a product price cuts - Correct Answers - excess capacity

• falling market share
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