# Shared Flashcard Set

## Details

MKT 300- FINAL EXAM Flashcards
Final exam flashcards
42
Marketing
05/05/2013

Term
 What are the Four Internal Factors of Price
Definition
 1. To maximize profit 2. To gain market share3. To infer the level of quality 4. To Survive
Term
 What are the three External Factors of Price
Definition
 1. Demand for your product2. Competition- competitor's prices, strength of competition3. Economy- cost of components, economic conditions
Term
 Define Price Elasticity AND 1. Elastic 2. Inelastic
Definition
 -tells us how much the demand for a product will change with a change in price -(% change in quantity demanded of a good/% change in price of a good) 1. larger change in quantity demanded, very price sensitive-> consumer buy more or less of a product when the price changes-> have many substitutes-Example- bottled water-E is greater than 1.02. an increase or decrease in price will not significantly affect demand -Example- cigarettes, medicine, and textbooks-E is less than 1.0
Term
 Elasticity of demand-1.Price goes down, revenue goes up= 2.Price goes down, revenue goes down= 3.Price goes up, revenue goes up=4.Price goes up, revenue goes down=
Definition
 1. ELASTIC2. INELASTIC3. INELASTIC4. ELASTIC
Term
 What is Unitary elasticity?
Definition
 an increase in sales exactly offsets a decrease in prices, and revenue is unchanged
Term
 Markup Pricing FORMULAS:1.Mark up on selling price= 2.Cost3.Price
Definition
 1.(selling price- cost)/(selling price)2. (1-markup on selling price)(selling price)3. cost/(1-markup on selling price)
Term
 MARK UP PRICING -Selling Price
Definition
 Markup in dollars + Cost; for determining markup percentage, simply calculate what percentage of the selling price is markup. If cost is \$50 and selling price is \$200, then markup percentage must be 75% (\$150/200 is markup) – here are sample problems that will be similar to those on the exam
Term
 MARK UP PRICING EXAMPLES:1.What would the retailer’s selling price be, given the retailer’s cost is \$200, and the retailer’s markup on selling price is 50%?
Definition
 1.The answer must be \$400. 50% of the selling price is markup, therefore 50% of the selling price must be cost.
Term
 MARK UP PRICING EXAMPLES:Given the manufacturer’s selling price is \$100 and the manufacturer’s cost is \$35, what would the manufacturer’s markup on selling price be?
Definition
 65%
Term
 Give the formula for Break-even Pricing
Definition
 FC/(SP-VC) -> IN UNITS -IN dollars= BEP units x SPFC= fixed cost SP= selling priceVC= variable cost
Term
 BREAK EVEN EXAMPLE:Company X sells products to retailers for \$30. It costs the company \$20 to make each video game. The total fixed costs for plant operation is \$20,000. How many products does Company X need to sell to break even?
Definition
 2,000
Term
 What is Profit Maximization?
Definition
 -where marginal cost=marginal revenue
Term
 What are other Determinants of Price?
Definition
 Competition- high prices may induce firms to enter the market-Can lead to price wars-Global competition may force firms to lower prices
Term
 what are the Distribution strategies?
Definition
 Selling against the brand (slide 17, 6.3)- stocking well know branded items at high prices in order to sell store brands at discounted prices-How to set a price--Establish pricing goals-Estimate demand, costs, and profits-Choose a price strategy-Fine tune with pricing tactics
Term
 -How to set a price-
Definition
 -Establish pricing goals-Estimate demand, costs, and profits-Choose a price strategy-Fine tune with pricing tactics
Term
 IN New Product Pricing Strategies, (1 of 3)What is Market or Price Skimming?
Definition
 innovators and early adopters, high intial price-product outperforms others-Early adopters value product-Demand is inelastic-Expected demand can’t be met-High quality is desired position-EX- When the Iphone came out, it was priced at \$600 Premium- high price, high quality Overcharging- low quality, high price
Term
 IN New product pricing strategies, (2 of 3)What is Market Penetration?
Definition
 set a relative low price compared to competition-Higher volume reduces cost -Low price deters competitors -Demand is elastic-Buyers are price sensitive -Competitor imitation possible Good-value- high quality, low price Economic- low quality, low price
Term
 IN New product pricing strategies,What is the third element (3 of 3)?
Definition
 3. Status Quo
Term
 What are the three things in Product Mix Pricing Strategies? AND Define each.
Definition
 o Portfolio Pricing- company creates several different versions of product at differentprice points-Example- Hotels have different prices for different roomso Captive- you buy the primary unit then you pay for the different parts that come withthat unit-Example- you buy an XBOX then you buy the games that go with that systemo Price bundling- package deal, combine related goods, sell for one priceExample- Microsoft office or value meal at McDonalds
Term
 What are the 7 things In Price Adjustment Strategies? Define each.
Definition
 o Discounts/Allowances- pay cash upfront, buy in bulk, buy during non-peak timeso Flexible/variable- different segments pay different rates Ex.- Student discount, seniordiscounto Psychological--99 principle- an item that is 399.99 seems cheaper than \$400 dollars -Reference pricing- what would you expect to pay for a product category? -Unit pricing- states price in a recognized unit of measureo Single price- everything is \$1o Bait- illegal, we are promoting a product at a certain price point but we aren’t sellingthat product at that priceo Two-part-you pay a fixed cost and variable-Ex- Country club- you pay a yearly fee and you pay for food at the country clubo Loss leader- imply that we are taking loss relative to the amount of product that wewould normally expect to sell this product for-Ex.- Best Buy used this strategy, they sold CDs for cheap relative to Sam Goodie and other companies, this brought customers in and the customers would buy other products as well
Term
 What are Substitutes?
Definition
 - price sensitive, we don’t see a the difference between brands-When a decrease in price on one product results in a decrease in sales of a second product, the products are SUBSTITUTES
Term
 What are Complements?
Definition
 - products that go together, Ex.- Peanut butter and jelly
Term
 What is a Marketing Channels?
Definition
 - a set of interdependent organizations that ease the transfer of ownershipas products move from producer to business user or consumer
Term
 What is Contact Efficiency?
Definition
 - you get to compare and contrast different brands at one location
Term
 Name the four Designing a Marketing Channel
Definition
 1. Analyze consumer needs2. Establish channel objectives3. Identify major channel alternatives4. Evaluate major channel alternatives
Term
 Name the four Benefits to Consumers
Definition
 -Intermediaries provide variety in terms of: 1. Product sizes (what)2. Assortment of goods (what)3. Location (where)4. Hours of operation (where)
Term
 What are the two Logistics and trends?
Definition
 o Physical Distribution- process of carrying goods to customers which includestransportation and warehousingo Warehousing- technology is becoming important-RFID
Term
 What are the three Channel Functions?
Definition
 1. Transactional functions- contracting, promotion, negotiating, risk taking 2. Logistical functions- physically distributing, storing, sorting3. Facilitating functions- researching, financing
Term
 Levels of Intermediaries-1. Conventional channel
Definition
 linear relationship between producer, wholesaler, retailer,consumer
Term
 Levels of Intermediaries-2. Vertical marketing system
Definition
 all three entities work together to establish the best route distribution to the consumer
Term
 Channel StrategiesWhat is Multiple Channels?
Definition
 -producer can chose who to sell to, some sell directly to the consumer, some sell directly to retailer, and some sell to the wholesaler
Term
 Intensity of Distribution1. Intensive- 2. Selective-3. Exclusive-
Definition
 1. achieve mass market selling, convenience goods, many intermediaries2. work with selected intermediaries, shopping and some specialty goods, severalintermediaries3. work with single intermediary, specialty goods and industrial equipment, oneintermediary
Term
 What are the five Modes of Transportation?
Definition
 1. Air- highest cost, shortest lead time, best traceability2. Water- cheapest, longest lead time3. Rail- cheap4. Pipeline- reliable5. Truck- best available
Term
 what is Push strategies?
Definition
 the advertising and promotional strategy are geared towards distribution partners to encourage them to promote your product
Term
 What Pull Strategies?
Definition
Term
 Retailing?
Definition
 all activities involved in selling goods directly to the final customer for their use
Term
 What are the 8 Types of Retailers?
Definition
 1. Specialty store- Sports Authority2. Department store- Macys3. Supermarket- Jewel4. Convenience store- 7115. Discount store- Wal-mart6. Off-price retailer- TJ Max, Marshalls7. Superstore- Best buy, Home Depot8. Online retailer- Amazon
Term
 What is Automated Vending?
Definition
 the vending machine brings the store to you
Term
 What is Direct Retailing?
Definition
 when the salesperson comes right you or your door- Ex.- Girl scout cookies
Term
 what is Direct Marketing?
Definition
 - marketers contact you through the mail or telephone
Term
 What are the Retailing Strategy questions?
Definition
 where should we locate the store, how do we promote the store, what type of merchandise should we sell, what level of customer service, what is the pricing in our store?
Term
 WHat is Atmospherics?
Definition
 image, safety, temperature, senses, parking, spacing, crowding (can be positive or negative)
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