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What is the overall sacrifice a consumer is willing to make to acquire a specific product or service?

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What is the overall sacrifice a consumer is willing to make to acquire a specific product or service?

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Target return pricing a pricing strategy implemented by firms less concerned with the absolute level of profits and more interested in the rate at which their profits are generated relative to their investments; designed to produce a specific ROI, expressed as a % of sales
Price the overall sacrifice a consumer is willing to make—money, time, energy—to acquire a specific product or service.
Profit orientation a company objective that can be implemented by focusing on target profit pricing, maximizing profits, or target return pricing.
Premium pricing a competitor-based pricing method by which the firm deliberately prices a product above the prices set for competing products to capture those consumers who always shop for the best or for whom price does not matter.
Sales orientation a company objective based on the belief that increasing sales will help the firm more than will increasing profits.
Maximizing profits a profit strategy that relies 1st on economic theory. If a firm can accurately specify a mathematical model that captures all the factors required to explain/predict sales&profits, it should identify the price at which its profits are maximized.
Competitive parity a firm’s strategy of setting prices that are similar to those of major competitors
Target profit pricing a pricing strategy implemented by firms when they have a particular profit goal as their overriding concern; uses price to stimulate a certain level of sales at a certain profit per unit.
Competitor orientation a company objective based on the premise that the firm should measure itself primarily against its competition.
Customer orientation a company objective based on the premise that the firm should measure itself primarily according to whether it meets its customers’ needs
Status quo pricing a competitor-oriented strategy in which a firm changes prices only to meet those of competition.
Prestige products or services those that consumers purchase for status rather than functionality.
Demand curve shows how many units of a product or service consumers will demand during a specific period at different prices.
Elastic refers to a market for a product or service that is price sensitive; that is, relatively small changes in price will generate fairly large changes in the quantity demanded.
Inelastic refers to a market for a product or service that is price insensitive; that is, relatively small changes in price will not generate large changes in the quantity demanded.
Income effect refers to the change in the quantity of a product demanded by consumers due to a change in their income.
Substitution effect refers to consumers’ ability to substitute other products for the focal brand, thus increasing the price elasticity of demand for the focal brand.
Price elasticity of demand measures how changes in a price affect the quantity of the product demanded; specifically, the ratio of the percentage change in quantity demanded to the percentage change in price.
Cross-price elasticity the percentage change in demand for product A that occurs in response to a percentage change in price of product B; see complementary products.
Complementary products products whose demand curves are positively related, such that they rise or fall together; a percentage increase in demand for one results in a percentage increase in demand for the other.
Substitute products products for which changes in demand are negatively related; that is, a percentage increase in the quantity demanded for product A results in a percentage decrease in the quantity demanded for product B.
Fixed costs those costs that remain essentially at the same level, regardless of any changes in the volume of production.
Break-even point the point at which the number of units sold generates just enough revenue to equal the total costs; at this point, profits are zero.
Break-even analysis technique used to examine the relationships among cost, price, revenue, and profit over different levels of production and sales to determine the break-even point.
Total cost the sum of the variable and fixed costs.
Variable costs those costs, primarily labor and materials, that vary with production volume.
Contribution per unit equals the price less the variable cost per unit. variable used to determine the break-even poit in units.
Monopoly one firm provides the product or service in a particular industry
Oligopolistic competion occurs when only a few firms dominate a market.
Price wars occurs when two or more firms compete primarily by lowering their prices.
Predatory pricing a firm’s practice of setting a very low price for one or more of its products with the intent to drive its competition out of business; illegal under both the Sherman Act and the Federal Trade Commission Act.
Monopolistic competition occurs when there are many firms that sell closely related but not homogeneous products; these products may be viewed as substitutes but are not perfect substitutes.
Pure competition occurs when different companies sell commodity products that consumers perceive as substitutable; price usually is set according to the laws of supply and demand.
Gray market employs irregular but not necessarily illegal methods; generally, it legally circumvents authorized channels of distribution to sell goods at prices lower than those intended by the manufacturer.
Cross-shopping the pattern of buying both premium and low-priced merchandise or patronizing both expensive status-oriented retailers and price-oriented retailers.
market penetration strategy a growth strategy that employs the existing marketing mix and focuses the firm’s efforts on existing customers.
high/low pricing a pricing strategy that relies on the promotion of sales, during which prices are temporarily reduced to encourage purchases.
Everyday low pricing (EDLP) a strategy companies use to emphasize the continuity of their retail prices at a level somewhere between the regular nonsale price and the deep-discount sale prices their competitors may offer.
Experience curve Effect refers to the drop in unit cost as the accumulated volume sold increases, as sales continue to grow, the costs continue to drop allowing even further reductions in the price.
Price skimming a strategy of selling a new product or service at a high price that innovators and early adopters are willing to pay; after the high-price market segment is saturated, the firm generally lowers the price to capture the next most price sensitive segment.
Reference price the price against which buyers compare the actual selling price of the product and that facilitates their evaluation process.
Price fixing the practice of colluding with other firms to control prices.
Price discrimination the practice of selling the same product to different resellers (wholesalers, distributors, or retailers) or to the ultimate consumer at different prices; some, but not all, forms of price discrimination are illegal.
bait-and-switch a deceptive practice of luring customers into the store with a very lowprice on an item, only to pressure them to purchase a higher-priced model by disparaging it, comparing it unfavorably with the higher-priced model, or professing an inadequate supply.
Loss leader pricing takes the tactic of leader pricing one step further by lowering the price below the store’s cost.
Horizontal price fixing occurs when competitors that produce and sell competing products collude, or work together, to control prices, effectively taking price out of the decision process for consumers.
Vertical price fixing occurs when parties at different levels of the same marketing channel (e.g., manufacturers and retailers) collude to control the prices passed on to consumers.


What is the overall sacrifice?

Overall sacrifice a consumer is willing to make to acquire a specific product or service. This sacrifice includes the money that must be paid to the seller but also other non-monetary sacrifices like value of the time necessary to acquire the product or service and reflects the value.

What is the sacrifice a consumer makes to obtain something else?

Opportunity cost refers to what you have to give up to buy what you want in terms of other goods or services.

Which of the following represents the value of something we give up when gaining something else?

Opportunity costs represent the potential benefits that an individual, investor, or business misses out on when choosing one alternative over another.

Which strategy is used by firms that believe increasing volume of sales will help the firm more than increasing profits?

Sales orientation: to set prices believe that increasing sales will help the firm more than will increasing profits.

sacrifice consumer make acquire specific product service

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