Marketing

• What are the four P's of the marketing mix?

  Product, price, place, promotion
• What two factors influence pricing?

  Supply and demand
• What is the market price?


  The price at which goods are sold
• What is equilibrium price?

  Price where quantity supplied equals quantity demanded
• How is demand defined?

  Desire and ability to acquire a good
• What does supply refer to?

  The amount offered for sale by producers
• How is demand expressed in simpler terms?

  Amount a customer is willing and able to buy
• What happens when supply exceeds demand?

  Price tends to decrease
• What is a surplus in the market?

  When supply exceeds demand
• What occurs during a shortage in the market?

  Price tends to increase
• How does technology affect supply?

  It can increase production efficiency
• What can lower input prices do to supply?

  Increase the supply of products
• What happens when supply increases?

  Equilibrium price tends to fall
• How does an increase in consumer income affect demand?

  It generally increases demand for goods
• What happens to demand when a product becomes fashionable?

  Demand for that product increases
• What is the effect of a price increase in substitutes on demand?

  Demand for the cheaper substitute increases
• What happens when demand increases?

  Equilibrium prices rise
• What is the main aim of a supplier when demand increases?

  To maximize profits by raising prices
• What are the key concepts of pricing strategies?

  • Cost-plus pricing
  • Price skimming
  • Promotional pricing
  • Penetration pricing
• What happens to the price when demand increases?

  The price rises
• How is equilibrium price determined?

  It is where supply and demand meet
• What is cost plus pricing?

  Cost of production plus desired profit
• If a product costs $10 to produce and a company wants to make $5 profit, what is the selling price?

  $15
• What is price skimming?

  Charging a high price for new products
• Who are early adopters?

  People who want the latest products first
• What is promotional pricing?

  Low initial price to attract customers
• What is the purpose of predatory pricing?

  To drive competitors out of the market
• What is differential pricing?

  Charging different prices for market segments
• What is an example of branding affecting pricing?

  Apple products priced higher due to brand
• What is dumping in pricing strategy?

  Pricing below cost in export markets
• What is psychological pricing?

  Pricing just below a round number
• Why do companies use psychological pricing?

  To make prices seem lower than they are
• What are the main pricing strategies discussed?

  • Cost plus pricing
  • Price skimming
  • Promotional pricing
  • Predatory pricing
  • Differential pricing
  • Branding
  • Dumping
  • Psychological pricing
• How does price skimming benefit companies?

  It maximizes profits from early adopters
• How does predatory pricing affect small businesses?

  It can drive them out of the market
• If a movie theater charges $10 for adults and $5 for children, what pricing strategy is this?

  Differential pricing
• What is the impact of branding on pricing?

  It allows higher prices for premium brands
• What is the goal of promotional pricing?

  To attract customers with low initial prices
• How does psychological pricing influence consumer behavior?

  It makes consumers perceive prices as lower
• What is the relationship between supply and demand in determining prices?

  Prices are set where supply meets demand