BSBA 3 PRICING STRATEGY

An understanding of the many factors that determine the market’s response to a price change. The market’s responsiveness to a price change is often referred to as the ___________ of the market.

This creates a measure that is independent of how sales and price changes are measured and thus can be compared over various situations. This general price-change response measure has been termed the _________________.

A _____________ shows the relationship between various prices a product can have and the sales that would occur at that price. As can be seen from any demand curve that has been developed from real data, the market’s sales response to an item’s price is not a smoothly varying function of that price.

It is also possible to evaluate a prospective price change by converting the breakeven sales level into a ________________ (in the formulas, breakeven price elasticity will be referred to as EBE).

The ____________ (also known as primary demand elasticity) is the percent change in sales for an entire product category divided by the percent change in the average price for an item in that product category.

A ________ is a company’s posture, or set of response tendencies similar to an attitude. It can and does change, but companies are often found to hold the same stance for long periods.

The competitor who holds a _____________ does not want to rock the boat. This competitor is satisfied with the current situation with respect to the price-change initiator and prefers that things remain the same

The competitor who maintains an __________ wants to improve his or her position at the expense of the price-change initiator. This competitor would like to see things change with respect to the initiator, in the direction of the competitor’s benefit.

The competitor who holds a ___________ feels that whatever the initiator does will not substantially affect him or her. This competitor simply ignores the price-change initiator and makes no special response to the initiator’s price-change decisions.

When this publicly available price-related information is intentionally managed to have an effect on competitors, it is known as ___________.