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Marketing 310
Test 3
95
Marketing
11/12/2009

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Term
Marketing Research
Definition
The process of defining a marketing problem and opportunity, systematically collecting and analyzing information, and recommending actions.
Term
Marketing research helps marketer's how? (5 ways)
Definition
(C) Complete effectively
(U) Understand the customer
(R) Reduce risk and uncertainty and save money
(R) Remain focused and organized
(D) Develop new products
Term
Five-Step marketing Research Approach to Making Better Decisions
Definition
1. Defining the problem
2. Develop the research plan
3. Collect relevant information
4. Develop Findings
5. Take marketing actions
Term
Research Objectives
Definition
Specific, measurable goals the decision maker seeks to achieve in conducting the marketing research
Term
3 main types of research objectives
Definition
1. Exploratory Research
2. Descriptive Research
3. Casual Research
Term
Exploratory research
Definition
provides ideas about a relatively vague problem.
Term
Descriptive research
Definition
involves trying to find the frequency that something occurs or the extent of a relationship between two factors.
Term
Casual research
Definition
the most sophisticated, tries to determine the extent of a relationship between 2 factors
Term
Measures of success
Definition
criteria or standards used in evaluating proposed solutions to the problem
Term
Constraints
Definition
the restrictions placed on potential solutions to a problem
Term
Common Constraints = ?
Definition
limitations on the time and money available to solve the problem
Term
Concepts
Definition
ideas about products or services
Term
new-product concept
Definition
a picture or verbal description of a product or service that firm might offer for sale.
Term
Methods
Definition
the approaches that can be used to collect data to solve all or part of the problem
Term
Sampling
Definition
Selecting representative elements from population
Term
Probability Sampling
Definition
involves using precise rules to select the sample such that each element of the population has a specific known chance of being selected
Term
Non-probability sampling
Definition
used when time and budget are limited; uses arbitrary judgments to select the sample so that the chance of selecting a particular element may be unknown or 0; Can be bias
Term
Statistical Inference
Definition
drawing conclusions about a population from a sample taken from that population.
Term
population
Definition
the 'universe' of all people, stores, or salespeople about which researchers with to generalize
Term
data
Definition
the facts and figures related to the problem, divided into two parts: secondary data and primary data
Term
Secondary Data
Definition
facts and figures that have already been recorded before the project at hand (reused)
Term
Internal
Definition
From inside the firm
Term
External
Definition
Outside the firm
Term
Primary data
Definition
facts and figures that are newly collected for your project
Term
Two principal ways to collect primary data
Definition
Observing people and asking them questions
Term
Observation
Definition
collecting data as it happens
Term
Observational Data
Definition
facts and figures obtained by watching, either mechanically or in person, how people actually behave.
Term
Questionnaire Data
Definition
facts and figures obtained by asking people about their attitudes, awareness, intentions, and behaviors.
Term
Panels
Definition
a sample of consumers or stores from which researchers take a series of measurements
Term
Experiments
Definition
obtaining data by manipulating factors under tightly controlled conditions to test cause and effect
Term
Information Technology
Definition
operating computer networks that collect, store, and process data
Term
Data Warehouse
Definition
where the ocean of data is collect and stored
Term
Sensitivity Analysis
Definition
"What if" questions
Term
Data Mining
Definition
The extraction of hidden predictive information from large databases; focus is on finding statistical links about consumer purchasing patterns that suggest marketing actions
Term
National Guard Objectives
Definition
1. Implement time line planning
2. Construct a problem definition
3. Learn the relationship between the decision maker and marketing researcher team
4. Develop research questions and hypothesis
5. Design survey questions and a survey
6. Consider different research methods/designs
7. Make a list of survey lessons learned
Term
US Household Penetration = ?
Definition
(Total HH in Market / HHs that bought prouduct) times 100
Term
Buying Rate (Average) = ?
Definition
Total products bought / HHs that bought product
Term
Price
Definition
The money or other considerations (including other goods and services) exchanged for the ownership or use of a good or service
Term
Barter
Definition
Exchanging goods and services for other goods and services rather than for money
Term
Final Price = ?
Definition
List price - (incentives + allowances) + extra fees
Term
Value
Definition
the ratio of perceived benefits to price or perceived benefits/price
Term
Value Pricing
Definition
the practice of simultaneously increasing product and service benefits while maintaining or decreasing price.
Term
Proft = ?
Definition
total revenue - total cost
(unit price x Quantity sold) - (fixed cost + variable cost)
Term
6 steps in setting price
Definition
1. Identify pricing objectives and contstraints
2. Estimate demand and revenue
3. Determine cost, volume, and profit relatioships
4. Select an approximate price level
5. Set list or quoted price
6. Make special adjustments to list or quoted price
Term
Pricing objectives
Definition
specifying the role of price in an organization's marketing and strategic plans.
Term
Target return
Definition
occurs when a firm sets a profit goal , usually determined by its board of directors.
Term
Pricing constraints
Definition
factors that limit the range of prices a firm may set.
Term
Pure competition
Definition
All the same product
Term
Monopolistic Competition
Definition
Many sellers who compete in price and non-price competitions.
Term
Oligopoly
Definition
few sellers who are sensitive to each other's prices
Term
Pure Monopoly
Definition
One seller who sets the price for a unique product.
Term
Demand Curve
Definition
a graph relating the quantity sold and price, which shows maximum number of units that will be sold at a given price. As price falls, more people decide to buy and unit sales increase.
Term
Besides Price what three other factors estimate demand
Definition
1. Consumer tastes
2. Price and availability of similar products
3. Consumer income
Term
Demand Factors
Definition
factors that determine consumes' willingness and ability to pay for goods and services
Term
Demand Curves lead directly to 3 related revenue concepts critical to pricing deciions
Definition
Total Revenue, Average Revenue, Marginal Revenue
Term
Total Revenue
Definition
total money received from the sale of a product.
TR = unit price of product X quantity of the product sold
Term
Average Revenue
Definition
the average amount of money received for selling one unit of a product, or simply the price of that unit
AR = TR/Q = P
Term
Marginal Revenue
Definition
the change in total revenue that results from producing and marketing one additional unit.
MR = change in TR / 1 unit increase in Q
Term
Price elasticity of demand
Definition
the % change in quantity demanded relative to a % change in price
Term
Price elasticity = E = ?
Definition
% change in quantity demanded / % change in price
Term
Elastic Demand exists when
Definition
1 % decrease in price produces more than 1% increase in quantity demanded, thereby actually increasing sales revenue/
Term
Inelastic Demand exists when
Definition
1 % decrease in price produces less than 1% increase in quantity demanded, thereby actually decreasing sales revenue.
Term
Unitary Demand exists when
Definition
the % change in price is identical to the % change in quantity demanded so that sales revenue remains the same.
Term
3 factors of price elasticity
Definition
1. the more substitutes a product or service has, the more like it is to be price elastic.
2. Products and services considered to be necessities are price inelastic
3. Items that require a large cash outlay compared with a person's disposable income are price elastic.
Term
Total Cost
Definition
the total expense incurred by a firm in producing and marketing a product
TC = fixed cost + variable cost
Term
Fixed Cost
Definition
the sum of expenses of the firm that are stable and do not change with the quantity of a product that is produced and sold.
Term
Variable Cost
Definition
the sum of the expense of the firm that vary directly with the quantity of a product that is produced and sold;
Term
Unit Variable Cost
Definition
variable cost expressed on a per unit basis
UVC = VC / Q
Term
Marginal Cost
Definition
The change in total cost that results from producing and marketing one additional unit of a product
MC = change in TC / 1 unit increase in Q
Term
Marginal Analysis
Definition
a continuing, concise trade-off of incremental costs against incremental revenues
Term
Break-even analysis
Definition
a technique that analyzes the relationship between total revenue and total cost to determine profitability at various levels of output
Term
Break even point
Definition
the quantity at which total revenue and total cost are equal.
Term
Break even Point (BEP) = ?
Definition
fixed cost/(unit price - unit variable cost)
Term
Skimming pricing
Definition
setting the highest initial price that customers really desiring the product are willing to pay
Term
Penetration pricing
Definition
setting a low initial price on a new product to appeal immediately to the mass market.
Term
Prestige pricing
Definition
setting a high price so that quality or status conscious consumers will be attracted to it and buy it.
Term
Price lining
Definition
involves setting the price of a line of products at a number of different specific pricing points
Term
Odd-even pricing
Definition
setting prices a few dollars or cents under and even number
Term
target pricing consists of three things:
Definition
1. Estimating the price that ultimate consumers would be willing to pay for a product.
2. Working backward through markups take by retailers and wholesalers to determine what price to charge wholesalers.
3. Deliberately adjusting the composition and features of the product to acheive the target price to consumers.
Term
Bundle Pricing
Definition
the marketing of 2 or more products in a single package price.
Term
Yeild management pricing
Definition
the charging of different prices to maximize revenue for a set amount of capacity at any given time.
Term
Standard markup pricing
Definition
adding a fixed % to the cost of all items in a specific product class.
Term
Cost-plus pricing
Definition
summing the total unit cost to arrive at a price
Term
Cost-plus percentage-of-cost-pricing
Definition
a fixed % is added to the total unit cost.
Term
Cost plus fixed fee pricing
Definition
a supplier is reimbursed for all costs, regardless of what they turn out to be, but is allowed only a fixed fee as profit that is independent of the final cost of the project.
Term
Target profit pricing
Definition
a firm may set an annual target of a specific dollar volume of profit.
Term
shortcoming
Definition
no benchmark of sales or investment used to show how much of the firm's effort is needed to achieve the target.
Term
Target return on sale pricing
Definition
set typical prices that will give them a r profit that is a specified % of the sales volume
Term
Customary pricing
Definition
for products where tradition, a standardized channel of distribution, or other competitive factors dictate the price
Term
Above, at, or below market pricing
Definition
setting a market price for a product or product class based on a subjective feel for the competitors' price or market price as the benchmark
Term
Loss-leader pricing
Definition
for a special promotion retail stores deliberately sell a product below its customary price to attract attention to it.
Term
One-price policy
Definition
setting one price for all buyers of a product or service.
Term
flexible-price policy
Definition
setting different prices for products or serivces depending on the individual buyers.
Term
clickstream
Definition
the way that a person navigates through a website. Depending on their behavior prices can be set at different levels.
Term
Discounts
Definition
reductions from the list price that a seller gives a buyer as a reward for some activity of the buy that is favorable to the seller.