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MKT 300 final exam definitions
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78
Marketing
Undergraduate 3
12/05/2011

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Term
brand association
Definition
reflects the mental links that consumers make between a brand and its key product attributes, such as a logo, slogan, or famous personality
Term
brand dilution
Definition
occurs when the brand extension adversely affects consumer perceptions about the attributes the core brand is believed to hold
Term
brand equity
Definition
the set of assets and liabilities linked to a brand that add to or subtract from the value provided by the product or service
Term
brand extension
Definition
the use of the same brand name for new products being introduced to the same or new markets
Term
brand licensing
Definition
a contractual agreement between firms, whereby one firm allows another to use its brand name, logo, symbols, and/or characters in exchange for a negotiated fee
Term
brand loyalty
Definition
occurs when a consumer buys the same brand’s product or service repeatedly over time rather than buy from multiple suppliers within the same category
Term
brand repositioning
Definition
a strategy in which marketers change a brand’s focus to target new markets or realign the brand’s core emphasis with changing market preferences
Term
co-branding
Definition
the practice of marketing two or more brands together, on the same package or promotion
Term
perceived value
Definition
the relationship between a product or service’s benefits and its cost
Term
product assortment/mix
Definition
the complete set of all products offered by a firm
Term
product lines
Definition
groups of associated items, such as items that consumers use together or think of as part of a group of similar products
Term
introduction stage
Definition
Sales: Low
Profits: negative or low
Typical consumers: innovators
Competitors: one or few
Term
growth stage
Definition
Sales: rising
profits: rapidly rising
typical consumers: early adopters
competitors: few but increasing
Term
maturity stage
Definition
sales: peak
profits: peak to declining
typical consumers: late majority
competitors: high number of competitors and products
Term
decline stage
Definition
sales: declining
profits: declining
typical consumers: laggards
competitors: low number of competitors and products
Term
price
Definition
the overall sacrifice a consumer is willing to make to acquire a specific product or service
Term
price
Definition
the easiest element in the marketing mix to manipulate
Term
poor quality
Definition
prices set too low may signal...
Term
low value
Definition
prices set too high might signal...
Term
generates revenue
Definition
price is the only marketing mix element that...
Term
company objectives
Definition
profit-oriented, sales-oriented, competitor-oriented, and customer-oriented are all examples of...
Term
target profit pricing
Definition
firms implement this when they have a particular profit goal as their overriding concern; they use price to stimulate a certain level of sales at a certain profit per unit
Term
maximizing profits
Definition
this strategy relies mainly on economic theory; uses a mathematical model to capture all the factors required to explain and predict sales and profits
Term
target return pricing
Definition
used by firms less concerned about the absolute level or profits and more interested in the rate at which profits are generated relative to their investments; employ pricing strategies to produce a specific return on their investments, expressed as a % of sales
Term
profit orientation
Definition
specifically focuses on target profit pricing, maximizing profits, and target return pricing
Term
sales orientation
Definition
this method/objective: may focus on increasing sales, does not always imply setting low prices, and may be more concerned with overall market share
Term
competitor orientation
Definition
under this method, firms strategize according to the premise that they should measure themselves primarily according to their competition
Term
competitive parity
Definition
firms set prices that are similar to those of their competitors
Term
status quo pricing
Definition
firms change prices only to meet those of the competition
Term
customer orientation
Definition
this approach focuses on customer expectations by matching prices to customer expectations
Term
elastic
Definition
small changes in price will generate a large change in the quantity demanded
Term
inelastic
Definition
customers are less sensitive to price changes, and therefore quantity demanded in not greatly influenced by price
Term
elasticity of demand
Definition
the % change in unit sales that results from a % change in price
Term
price elasticity of demand
Definition
% change in quantity demanded/ % change in price
Term
income effect
Definition
factor influencing price elasticity of demand that refers to the change in the quantity of a product demanded by consumers due to a change in their income
Term
substitute effect
Definition
factor influencing price elasticity of demand which refers to the consumers' ability to substitute other products for the focal brand
Term
variable costs
Definition
primarily labor and material costs that vary with production volume
Term
fixed costs
Definition
costs that remain essentially at the same level, regardless of changes in the volume of production
Term
break-even analysis
Definition
technique enabling managers to examine the relationships among cost, price, revenue, and profit over different levels of production and sales
Term
break-even point
Definition
the point at which the number of units sold generates just enough revenue to equal total costs
Term
monopoly
Definition
one firm provides the product/service in a particular industry, and results in less price competition
Term
oligopolistic competition
Definition
only a few firms dominate
Term
monopolistic competition
Definition
many firms competing for customers in a given market but their products are differentiated resulting in less price competition
Term
pure competition
Definition
large number of sellers of standardized products/commodities that consumers perceive as substitutable, resulting in more price competition
Term
channel members
Definition
manufacturers, wholesalers, retailers are all...
Term
gray market
Definition
employs irregular distribution methods; legally circumvents authorized channels of distribution to sell goods at prices lower than those intended by the manufacturer
Term
cross-pricing
Definition
an economic factor influencing price; the pattern of buying both premium and low-priced merchandise or patronizing both expensive, status-oriented retailers and price-oriented retailers
Term
economic factors that influence price
Definition
local economic conditions, increase in disposable income, increasing status consciousness, and increasing globalization are all...
Term
break-even point
Definition
the point at which the fixed cost, total cost and total revenue curves intersect
Term
cross-price elasticity
Definition
the percentage change in the quantity of Product A demanded compared with the percentage change in price in Product B.
Term
cost-based pricing method
Definition
determines the final price to charge by starting with the cost; all costs calculated on a per unit basis and costs don't vary for different levels of production
Term
competitor-based pricing method
Definition
set prices to reflect the way they want consumers to interpret their own prices relative to the competitors' offerings
Term
value-based pricing methods
Definition
method where setting prices that focus on the overall value of the product offering as perceived by the consumer
Term
cost of ownership method
Definition
a value-based method where consumers may be willing to pay more for a particular product because, over its lifetime, it will eventually cost less to own than a cheaper alternative
Term
everyday low pricing
Definition
strategy where companies stress the continuity of their retail prices at a level somewhere between the regular, nonsale price and the deep-discount sales price their competitors may offer
Term
odd prices
Definition
strategy utilized by everyday low pricing where consumers mentally truncate the actual price, making the perceived price appear lower than it really is
Term
high/low pricing
Definition
pricing strategy which relies on the promotion of sales, during which prices are temporarily reduced to encourage purchases
Term
reference price
Definition
the price against which buyers compare the actual selling price of the product and that facilitates their evaluation process; used by sellers who use a high/low pricing strategy
Term
price lining
Definition
establishing a price floor and a price ceiling for an entire line of similar products and then setting a few other price points in between to represent distinct differences in quality; allows for easy comparison
Term
market penetration pricing
Definition
setting the initial price low for the introduction of the new product; meant to build sales, market share, and profits fast
Term
price skimming
Definition
strategy used by innovators and early adopters who are willing to pay the premium price to have the new innovation first
Term
pricing strategy
Definition
a long term approach to setting prices broadly across all the firm's products
Term
pricing tactics
Definition
offers short term methods to focus on select components of the five C's
Term
markdowns
Definition
a pricing tactic; the reductions retailers take on the initial selling price of the product or service; gets rid of slow moving or obsolete merchandise
Term
quantity discount
Definition
a pricing tactic which encourages the consumer to buy larger quantities each time; the larger the quantity, the less the cost per ounce
Term
seasonal discounts
Definition
a pricing tactic; price deductions offered on products to stimulate demand during off-peak seasons
Term
coupons
Definition
a pricing tactic; offer a discount on the price of specific items when they're purchased
Term
rebates
Definition
a pricing tactic; provides a discount for consumers off the final selling price; the refund in issued by the manufacturer not the retailer
Term
price bundling
Definition
a pricing tactic; selling more than one product for a single, lower price than if you bought the products separately
Term
leader pricing
Definition
a pricing tactic that attempts to build store traffic by aggressively pricing and advertising a regularly purchased item, often priced at or just above the store's cost
Term
cash discount
Definition
reduces the invoice cost if the buyer pays the invoice prior to the end of the discount period; expressed 3/10,n/30
Term
advertising allowance
Definition
form of vendor allowance; offers a price reduction to channel members if they agree to feature the manufacturer's product in their advertising and promotional efforts
Term
slotting allowance
Definition
form of vendor allowance; fees paid to retailers simply to get new products into stores or to gain more or better shelf space for their products
Term
quantity discount
Definition
provides a reduced price according to the amount purchased
Term
cumulative quantity discount
Definition
uses the amount purchased over a specified time period and usually involves several transactions; encourages resellers to maintain their current supplier b/c the cost to switch must include the loss of the discount
Term
noncumulative quantity discount
Definition
a quantity discount based only on the amount purchased in a single order; provides the buyer with an incentive to purchase more merchandise immediately
Term
uniform delivered pricing
Definition
pricing tactic specific to shipping where the shipper charges one rate, no matter where the buyer is located, making things simple for both the buyer and seller
Term
zone pricing
Definition
pricing tactic specific to shipping where the shipper sets different prices depending on a geographical division of the delivery areas
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