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The Marketing Mix
The Four P's
366
Marketing
Undergraduate 2
04/30/2010

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Term
product
Definition
a set of tangible and intangible attributes, which may include packaging, color, price, quality, and brand, plus the seller's services and reputation. May be a good, service, place, person, or idea. Want-satisfaction in the form of the benefits they expect to receive.
Term
consumer products
Definition
intended for personal consumption by hosueholds
Term
business products
Definition
intended for resale, for use in producing other products, or for providing services in an organization
Term
determining consumer vs business products
Definition
who will use them and how they will be used
Term
convenience good
Definition
a tangible product that the consumer feels comfortable purchasing without gathering additional information and then actually buys with a minimum of effort
Term
shopping good
Definition
a tangible product for which a consumer wants to comparie quality, price, and perhaps stile in several stores before making a purchase is considered a shopping good
Term
speciality goods
Definition
a tangible product for which a consumer has a strong brand preference and is willing to expend substantial time and effort locating the desired brand
Term
unsought good
Definition
a new product that the consumer is not yet aware of or a product that the consumer is aware of but does not want right now
Term
consumer goods
Definition
convenience goods, shopping goods, speciality goods, unsought goods
Term
business goods
Definition
raw materials, fabricating materials and parts, installations, accessory equipment, operating supplies
Term
raw materials
Definition
become part of another tangible product prior to being processed in any way
Term
fabricating materials
Definition
undergo further processing; ex: yarn being woven into cloth
Term
fabricating parts
Definition
assembled with no further change in form; ex: zippers in clothing and semiconductor chips in computers
Term
installations
Definition
manufactored products that are an organization's major, expensive, and long-lived equipment
Term
accessory equipment
Definition
tangible products that have substantial value and are used in an organization's operations (ex: office desk)
Term
operating supplies
Definition
characterized by low dollar value per unit and a short life that contribute to an organizations operations without becoming part of the finished product (ex: lubricating oils, pencils, heating fuel)
Term
"rule of thumb" product failure rate
Definition
80%
Term
new product categories
Definition
really innovative, significantly different, imitative
Term
new product strategy
Definition
a statement identifying the role a new product is expected to play in achieving corporate and marketing goals
Term
new product development process
Definition
1. generating new-product ideas, 2. screening ideas, 3. business analysis, 4. prototype development, 5. market tests, 6. commercilization
Term
business analysis
Definition
management a. identifies product features b. estimates market demand, competition, and the product's profitability, c. establishes a program to develop the product, and d. assigns responsibility for further study of feasibility
Term
market tests
Definition
involve actual consumers
Term
producer's criteria for new products
Definition
adequate market demand, satisfy key financial criteria, compatible with environmental standards, fit into the company's present marketing structure
Term
adoption process
Definition
set of successive decisions and individual person or organization makes before accepting an innovation
Term
diffusion
Definition
the process by which an innovation spreads throughout a social system over time
Term
stages in the adoption process
Definition
1. awareness, 2. interest, 3. evaluation, 4. trial, 5. adoption, 6. confirmation
Term
innovation adopter categories
Definition
1. innovators, 2. early adopters, 3. early majority, 4. late majority, 5. laggards
Term
innovators
Definition
venturesome consumers who are the first to adopt an innovation, 3%
Term
early adopters
Definition
purchase a new product after innovators but sooner than other consumers, 13%
Term
early majority
Definition
representing about 34% of the market, includes more deliberate consumers who accept an innovation just before the average adopter in the social system
Term
late majority
Definition
another 34% in the market, is a skeptical group of consumers who usually adopt an innovation to save money or in response to social pressure from their peers
Term
laggards
Definition
consumers who are bond by tradion and, hence, are last to adopt an innovation
Term
change agent
Definition
a person who seeks to accelerate the speed of a given innovation
Term
adoption rate
Definition
speed or ease with which a new product is adopted. 5 characteristics that affect: relative advantage, compatibility, complexity, trialability, observability
Term
product-planning committee
Definition
memers include executives from major departments - marketing, production, finance, engineering, and research
Term
new-product department or team
Definition
these units are small, consisting of 5 or fewer people. the head of the group typically reports to the company president
Term
brand manager
Definition
this individual is responsible for planning new products as well as managing established products
Term
product mix
Definition
the set of all products offered for sale by a company
Term
breadth
Definition
the number of product lines carried
Term
product mix
Definition
the set of all products offered for sale by a company
Term
depth
Definition
the variety of sizes, colors, and models offered within each product line
Term
product line
Definition
a broad group of products, intended for essentially similar uses and having similar physical characteristics
Term
positioning strategies
Definition
position in relation to a competitor, positioning in relation to a product class or attribute, positioning by price and quality
Term
product mix expansion
Definition
accomplished by increasing the depth within a particular line and/or the number of lines a firm offers to customers.
Term
line extension
Definition
when a company adds a similar item to an existing product line with the same brand name
Term
mix extension
Definition
to add a new product line to the company's present assortment
Term
product alteration
Definition
improving an established product
Term
product-mix contraction
Definition
carried out either by eliminating an entire line or by simplifying the assortment within a line
Term
trading up
Definition
adding a higher-price product to a line in order to attract a broader market
Term
trading down
Definition
adding a lower-price product to a company's product line
Term
product life cycle
Definition
consists of the aggregate demand over an extended period of time for all brands comprising a generic product category
Term
introduction stage
Definition
aka pioneering stage, a product is launched into the market ina full-scale marketing program
Term
growth stage
Definition
aka market acceptance stage, sales and profits rise, frequently at a rapid rate
Term
maturity stage
Definition
sales continue to increase but at a decreasing rate
Term
decline stage
Definition
as gauged by sales volume for the total category, is inevitable for one of the following reasons: a better or less expensive product is developed to fill the same need OR the need for the product disappears, often because of another product development
Term
fad
Definition
a product or style that becomes immensely popular nearly overnight and then falls out of favor with consumers almost as quickly
Term
types of product life-cycles
Definition
extended introduction, fad, indefinite maturity
Term
first-mover advantage
Definition
a benefit to getting a head start in marketing a new type of product
Term
product abandonment
Definition
what must happen when a company can't revive a failing product
Term
planned obsolescence
Definition
to make an existing product out of date and thus increase the market for replacement products
Term
technological obsolescence
Definition
significant technical improvements result in more effective product. generally socially and economically desirable because the replacement product offers more benefits and/or a lower cost
Term
style obsolescence
Definition
superficial characeteristics of a product are latered so that the new model is easily differentiated from the previous model
Term
style
Definition
distinctive manner of construction or presentation in any art, product, or endeavor
Term
fashion
Definition
any style that is popularly accepted or purchased by successive groups of people over a reasonably long period of time
Term
fashion-adoption process
Definition
a series of buying waves that arise as a particular style is popularly accepted in one group, then another group, and another, until it finally falls out of fashion
Term
fashion cycle
Definition
introduction, rise, popular culmination, and decline of the market's acceptance of a style
Term
trickle-down
Definition
a given fashion cycle flows downward through several socioeconomic levels
Term
trickle-across
Definition
the cycle moves horizontally and simultaneously within several socioeconomic levels
Term
trickle-up
Definition
a style first becomes popular at lower socioeconomic levels and then flows upward to become popular among higher levels
Term
brand
Definition
a name and/or mark intended to identify the product of one seller or group of sellers and to differentiate the product from competing products
Term
brand name
Definition
consists of words, letters, and/or numbers that can be vocalized
Term
brand mark
Definition
the part of the brand that appears in the form of a symbol, design, or distinctive color or lettering
Term
trademark
Definition
a brand that has been adopted by a seller and given legal protection
Term
producers' brands vs middlemen's brands
Definition
2nd - wholesalers
Term
two responsibilities come with brand ownership
Definition
1. promoting the brand 2. maintaining a consistent quality of output
Term
5 characteristics of a good brand
Definition
1. suggest something about the product, particularly its benefits and use 2. be easy to pronounce, spell, and remember 3. be distinctive 4. be adaptable to addtions to the product line 5. be capable of registration and legal protection
Term
product counterfeiting
Definition
placing a highly regarded brand on their offering, disregarding the basic fact that they do not own the rights to the brand
Term
multiple-brand strategy
Definition
more than one brand of essentially the same product, aimed either at the same target market or at distinct target markets
Term
cobranding
Definition
two separate companies or two divisions within the same company agree to place both of their respective brands on a particular product or enterprise
Term
brand equity
Definition
the value a brand adds to a product
Term
trademark licensing
Definition
products with considerable brand equity have strong potential for this. under such arrangement, the owner of a trademark grants permission to other firms to use its brand name and brand mark on their products
Term
packaging
Definition
all the activities of designing and producing the container or wrapper for a product
Term
purposes of packaging
Definition
protect the product on its way to the consumer, protect the product after it is purchased, help persuade middlemen to accept the product, help persuade customers to buy the product
Term
family packaging
Definition
either highly similar packages for all products or packages with a common and clearly noticable feature
Term
multiple packaging
Definition
the practice of placing several units of the same product in one container
Term
criticisms of packaging
Definition
depletes natural resources, health hazards, disposal of used packages, deceptive packaging, expensive packaging
Term
label
Definition
the part of a product that carries information about the product and the seller
Term
brand label
Definition
simply the brand alone applied to the product or package
Term
descriptive label
Definition
gives objective information about the product's use, construction, care, performance, and/or other pertinent features
Term
grade label
Definition
identifies the product's judged quality with a letter, number, or word
Term
fair packaging and labeling act of 1966
Definition
1. mandatory labeling requirements, 2. an opportunity for business to voluntarily adopt packaging standards that can limit the proliferation of the same product in different weights and measures, 3. administrative agencies, notably the FDA and the FTC, with the discretionary power to set packaing regulations
Term
nutrition labeling
Definition
standards for processed food
Term
product design
Definition
the arrangement of elements that collectively form a good or service
Term
universal design
Definition
the intent is to desin products so they can be easily used by all consumers, including diabled individuals, the burgeoning number of senior citizens, and others needing special considerations
Term
C2C design
Definition
cradle to cradle; seeks to recycle parts and components as much as possible (vs cradle to grave - lots of waste)
Term
product color
Definition
often the determining factor in a customer's acceptance or rejection; can be registered as part of a trademark under the Lanham Act
Term
product quality
Definition
the set of features and characteristics of a good or service that determine its ability to satisfy needs
Term
total quality management
Definition
a philosophy that commits the organization to continuous quality improvement in all its activities
Term
ISO 9000
Definition
a set of related standards of quality management that has been adopted by more than 150 countries
Term
value chain
Definition
the companies that add value to a product that is eventually bought by an individual or an organization
Term
middleman
Definition
a business firm that renders services related directly to the sale and/or purchase of a product as it flows from producer to consumer
Term
merchant middlemen
Definition
take title to the products they help to market. tow types: wholesalers and retailers
Term
agent middlemen
Definition
never own the products, but they do arrange the transfer of title (real estate brokers, manufacturers' agents, and travel agents)
Term
disintermediation
Definition
eliminating middlemen from channels
Term
middlemen axiom of marketing
Definition
you can eliminate middlemen, but you cannot eliminate the essential distribution activities they perform.
Term
distribution channel
Definition
the set of people and firms involved in the transfer of title to a product as the product moves from producer to ultimate consumer or business user
Term
channel designing
Definition
1. specify the role of distribution, 2. select the type of channel, 3. determine intensity of distribution, 4. choose specific channel members
Term
gray marketing
Definition
export diversion, items sold through distribution channels that are not authorized by the manufacturer
Term
direct distribution
Definition
a channel consisting only of producter and final customer, with no middlemen providing assistance
Term
indirect distribution
Definition
a channel of producer, final customer, and at least one level of middlemen
Term
five channels of consumer goods
Definition
1. producer - consumer 2. producer - retailer - consumer 3. producer - wholesaler - retailer - consumer 4. producer - agent - retailer - consumer 5. producer - agent - wholesaler - retailer - consumer
Term
5 channels for business goods
Definition
1. producer - user 2. producer - industrial distributor - user 3. producer - industrial distributor - reseller - user 4. producer - agent - user 5. producer - agent - industrial distributor - user
Term
multiple distribution channels
Definition
producers utilize more than one distribution channel
Term
vertical marketing system
Definition
has become the dominant form of distribution channel; tightly coordinated distribution channel designed specifically to improve operating efficiency and marketing effectiveness
Term
corporate vertical marketing system
Definition
a firm at one level of a channel owns the firms at the next level or owns the entire channel
Term
contractual vertical marketing system
Definition
independent producers, wholesalers, and retailers operate under contracts specificying how they will try to improve the effectiveness and efficiency of their distribution
Term
administered vertical marketing system
Definition
coordeinates distribution activities through 1. the market and/or economic power of one channel member or 2. the willing cooperation of channel members
Term
market considerations
Definition
1. type of market, 2. number of potential customers, 3. geographic concentration of the market, 4. order size
Term
product considerations
Definition
1. unit value 2. perishability 3. technical nautre
Term
middlemen considerations
Definition
1. services provided by middlemen, 2. availability of desired middlemen, 3. producer's and iddleman's policies
Term
company considerations
Definition
1. desire for channel control, 2. services provided by seller, 3. ability of management, 4. financial resources
Term
intensity of distribution
Definition
how many middlemen will be used at the wholesale and retail levels in a particular territory. intensive, selective, or exclusive
Term
intensive distribution
Definition
sells its product through every available outlet in a market where a consumer night reasonably look for it
Term
selective distribution
Definition
a producer sells its product through multiple, but not all possible, wholesalers and retailers in a market where a consumer might reasonably look for it
Term
exclusive distribution
Definition
the supplier agrees to sell its product only to a single wholesaling middleman and/or retailer in a given parket
Term
channel conflict
Definition
exists when one channel member perceives another channel member to be acting in a way that prevents the first member from achieving its distribution objectives
Term
chargeback
Definition
a penalty that a retailer or wholesaler assesses to a vendor that actually or allededly violates an agreed-upon distribution policy or procedure
Term
horizontal conflict
Definition
occurs among firms on the same level of distribution - ie toys r us vs walmart, a form of business conpetition
Term
scrambled merchandising
Definition
middlemen diversify by adding product lines not traditionally carried by their type of business
Term
vertical conflict
Definition
typically occurs between producer and wholesaler
Term
slotting fee
Definition
to place a manufacturer's product on store shelves
Term
channel control
Definition
a company that is able to regulate the behavior of the other members in its distribution channel
Term
channel power
Definition
the ability to influence or determine the behavior of another channel member
Term
channel power
Definition
the ability to influence or determine the behavior of another channel member (expertise, rewards, sanctions)
Term
exclusive dealing
Definition
a manufacturer that prohibits its dealers from carrying products offered by the producer's competitors
Term
tying contract
Definition
when a supplier sells a product to a middleman only under the condition that the middleman buy another (possibly unwanted) product from the supplier
Term
refusal to deal
Definition
to select and perhaps control its channels, a producer refuses to sell to certain middlemen
Term
exclusive-territory policy
Definition
a producer requires each middleman to sell only to customers located within an assigned territory
Term
retailing
Definition
the sale, and all activities directly related to the sale, of goods and services to ultimate consumers for personal, nonbusiness use
Term
retailer
Definition
a firm engaged primarily in retailing
Term
bricks and mortar retailers
Definition
physical stores
Term
clicks and modem retailers
Definition
online
Term
retail sales in 2004
Definition
totaled over 3.5 trillion
Term
percent of retail firms with fewer than 10 employees
Definition
more than 75%
Term
retailers with 500 or more employees
Definition
.3%, account for 45% of total retail sales
Term
physical facilities
Definition
represent the distribution element of a retailer's marketing mix: location, size, design, layout
Term
shopping center
Definition
consists of a planned grouping of retail stores that lease space in a structure that is typically owned by a single organization: convenience center, neighborhood center, lifestyle center, power center, regional center
Term
corporate chain
Definition
an organization of two or more centrally owned and centrally managed stores that generally handle the same lines of products
Term
independent retailer
Definition
a company with a single store that is not affiliated with a contractual vertical marketing system. most retailers are independents, and most independents are quite small
Term
contractual vertical marketing system
Definition
independentally owned firms join together under a contract specifying how they will operate. three types: 1. retailer cooperatives 2. voluntary chains, 3. franchise systems,
Term
retailer cooperative
Definition
formed by a group of small retailers that agree to establish and operate a wholesalewarehouse
Term
voluntary chain
Definition
sponsored by a wholesaler that enters into a contract with interested retailers
Term
franchising
Definition
a continuing relationship in which a parent company provides management assistance and the right to use its trademark in return for payments from the owner of the individual business unit
Term
product and trade name franchising
Definition
the dominant kind of product and trade name franchising ins prevalent in the automobile and petroleum industries; a distribution agreement under which a supplier authorizes a dealer to sell a product line, using the parent company's name for promotional purposes
Term
business format franchising
Definition
ie taco bell, midals, and h&r block; covers an entire method for operating a business
Term
department store
Definition
seeks a differential advantage through a combination of distinctive, appealing merchandise and numerous customer services, such as alterations, credit plans, and bridal registry
Term
discount retailing
Definition
comparatively low prices as a major selling point combined with reduced costs of doing business
Term
discount store
Definition
a large-scale retail institution that normally carries a broad assortment of soft goods (particularly apparel) and hard goods (including popular brands of appliances and home furnishings)
Term
supercenter
Definition
a much expanded discount store, discount + grocery
Term
limited-line stores
Definition
typically sell products such as clothing, baked goods, and furniture and seek to maintain full, or nondiscounted, prices
Term
speciality store
Definition
concentrates on a particular product line or even part of a product line (ex: Discover Channel Stores, Batteries Plus, Old Navy)
Term
off-price retailers
Definition
position themselves below discount stores with lower prices on selected products
Term
category-killer stores
Definition
aim to capture a large portion of sales in a specific product category and, in so doing, "kill" the competition
Term
supermarket retailing
Definition
features several related product lines, a high degree of self-service, largely centralized checkout, and competitive prices
Term
supermarket
Definition
offers a moderately braod, moderately deep product assortment spanning groceries and some nonfood lines
Term
convenience stores
Definition
to satisfy consumers' increasing desire for convenience, particularly in suburban areas, sell selected groceries and nonfoods, gasoline, fast foods, and selected services
Term
warehouse clubs
Definition
combined retailing and wholesaling operation
Term
retail transactions made in stores
Definition
80%
Term
nonstore retailing
Definition
retailing activities resulting in transactions that occur away from a physical store
Term
direct selling
Definition
personal contact between a sales person an da consumer away from a store that results in sale
Term
telemarketing
Definition
a sales person initiating contact with a prospective customer and closing a sale over the telephone
Term
automatic vending
Definition
sale of products through a machine with no personal contact between buyer and seller
Term
online retailing
Definition
electronic transactions in which the purchaser is an ultimate consumer
Term
"according to a study several years ago" percent of brick-and-mortar stores that also offer online
Definition
45%
Term
direct marketing
Definition
using advertising to contact consumers who, in turn, buy products without visiting a retail store
Term
wholesaling
Definition
the sale, and all activities directly related to the sale, of goods and services to busines and other organizations for 1. resale, 2. use in producing other goods or services, or 3. operating organization
Term
wholesaling middleman
Definition
firms engaged primarily in wholesaling
Term
total annual sales volume of wholesaling middlemen
Definition
4.4 trillion in 2002
Term
merchant wholesaler
Definition
an independently owned firm that engages primarily in wholesaling and takes title to (that is, owns) the products being distributed
Term
agent wholesaling middleman
Definition
independently owned form that engages primarily in wholesaling by actively negotiating the sale or purchase of products on behalf of other firms but that does not take title to the products being distributed
Term
manufacturer's sales facility
Definition
an establishment that engages primarily in wholesaling and is owned and operated by a manufacturer but is physically spearated from manufacturing plants
Term
manufacturer's sales branch
Definition
carries an inventory of the product being sold
Term
manufacturer's sales office
Definition
does not carry an inventory of the product being sold
Term
merchant wholesalers average expenses
Definition
highest at 14% of sales
Term
full-service wholesaler
Definition
an independent merchant middleman that performs a full range of wholesaling functions
Term
truck jobber
Definition
carries a limited line of perishable products and delivers them by truck to stores
Term
drop shipper
Definition
sells merchandise for delivery directly from the producer to the customer but does not physically handle the product
Term
manufacturers' agent
Definition
an independent agent wholesaling middleman that sells part or all of a manufactuer's product mix in an assigned geogrpahic territory
Term
broker
Definition
an independent agent wholesaling middleman that brings buyers and sellers together and provides market information to one party or the other
Term
selling agent
Definition
substitutes for a marketing department by marketing a manufacturer's entire output
Term
auction company
Definition
helps assembled buyers and sellers comlete their transactions
Term
import-export agent
Definition
bring together sellers and buyers from different countries
Term
physical distribution
Definition
logistics; all activities involved in moving the right amount of the right products to the right places at the right time
Term
total annual spending on logistics in the US
Definition
1 trillion
Term
fulfillment
Definition
having the merchandise that is ordered by a customer in stock and then packaging and shipping it in an efficient, timely manner
Term
supply chain management
Definition
a total system perspective of distribution, combining distribution channels and physical distribution
Term
total cost conept
Definition
determine the set of activiies that produces the best relationship between costs and profit for the entire physical distribution system
Term
conract logistics
Definition
third-party logistics, firms are outsourcing various business tasks ranging from payroll to public relations
Term
physical distribution management
Definition
the development and operation of processes resulting in the effective and efficient physical flow of products
Term
electronic data interchange (EDI)
Definition
orders, invoices, and perhaps other business information are transmitted by computer rather than by mail
Term
inventory control
Definition
goal is to satisfy the order-fulfillment expectations of customers while minimizing both the investment and fluctuations in inventories
Term
economic order quantity
Definition
the volume at which the sum of inventory-carrying costs and order-processing costs are at a minimum
Term
just in time (JIT)
Definition
combines inventory control, purchasing, and production scheduling. a firm buys in small quantities that arrive just in time for production and then it produces in quantities just in time for sale
Term
market-response system
Definition
expected or actual purchases by final customers - those who intend to consume the product - should activate a process to produce and deliver replacement items
Term
radio frequency identification (RFID)
Definition
a tag that consists of a tiny memory chip equipped with a miniscule radio antenna, allow constant monitoring of the whereabouts of products in various locations
Term
collaborative planning, forecasting, and replenishment (CPFR)
Definition
a method by which a producer or a wholesaler and a customer, ordinarily a retail chain,jointly develop sales forecasts through a shared website and also design marketing plans
Term
enterprise resource planning systems
Definition
intended to integrate by means of computer programs the various business functions of an organization, including sales, manufacturing, purchasing, distribution, financial management, and human resources
Term
private warehouse
Definition
advantage if 1. a company moves a large volume of products through a warehouse 2. there is very little, if any, seasonal fluction in this flow 3. the goods have special handling or storage requirements
Term
public warehouse
Definition
offers storage and handling facilities to individuals or companies
Term
distribution center
Definition
planned around markets rather than transportation requirements, under one roof, fully integrated system for the flow of products
Term
containerization
Definition
a cargo-handling system that has become standard practice in physical distribution; shipmets of products are enclosed in large metal or wood containers; a container is transported and remains unopened from the shipper's facility to its destination
Term
major modes of transportation
Definition
2. railroads 2. trucks 3. pipelines 4. water vessels 5. airplanes
Term
intermodal transportation
Definition
using two or more modes of transportation to move freight
Term
one-stop shipping
Definition
one transportation firm offering multiple modes of transportation to customers
Term
freight forwarder
Definition
a specialized intermediary serving firms that ship in less-than-full-load quantities
Term
package-delivery firms
Definition
deliver shipments of small packages and high-priority mail
Term
price
Definition
the amount of money and/or other items with utility needed to acquire a product
Term
barter
Definition
exchanging goods and/or services for other products
Term
value
Definition
the ratio of perceived benefits to price and any other incurred costs
Term
pricing objectives
Definition
1. profit oriented, 2. sales oriented, 3. status quo oriented
Term
base price
Definition
aka list price, the price of one unit of the product at its point of production or resale
Term
expected price
Definition
the price at which customers consciously or unconsciously value it -- what they think the product is worth
Term
inverse demand
Definition
the higher the price, the greater the unit sales
Term
competition can come from these sources
Definition
1. directly similar products, 2. available substitutes, 3. unrelated products seeking the same consumer dollar
Term
fixed cost
Definition
remains constant regardless of how many items are produced
Term
variable cost
Definition
directly related to production
Term
marginal cost
Definition
the cost of producing and selling one more unit
Term
cost-plus pricing
Definition
setting the price of one unit of a product to the total cost of the unit plus the desired profit on the unit
Term
break-even point
Definition
that quantity of output at which total revenue equals total costs, assuming a certain selling price
Term
marginal revenue
Definition
the income derived from the sale of the last unit
Term
average revenue
Definition
the unit price at a given level of unit sales; calculated by dividing total revenue by the number of units sold
Term
pricing to meet competition
Definition
simple to carry out; in a situation with multiple suppliers, a firm should ascertain what the prevailing market price is and, after allowing for customary markups for middlemen, should arrive at its own selling price
Term
perfect competition
Definition
product differentiation is absent, buyers and sellers are well informed, and the seller has no discernable control over the selling price. Pricing to meet competition reflects these conditions
Term
kinked demand
Definition
a sharp drop in revenue occurring when the price is raised above the prevailing market level indicates that the seller faces this
Term
dynamic pricing
Definition
prices are adjusted instantly and frequently in line with what the market will bear
Term
oligopoly
Definition
when the market is dominated by a few firms, each marketing similar products
Term
pricing below competition
Definition
done by discount retailers
Term
pricing above competition
Definition
works only when the product is distinctive or when the seller has acquired prestige in its field
Term
strategy
Definition
a broad plan of action by which an organization intends to reach a particular goal
Term
price competition
Definition
regularly offering products priced as low as possible and typically accompanied by few, if any, services
Term
value pricing
Definition
1. offers products with lower prices bu tthe same, or perhaps added, benefits while 2. seeking ways to slash expenses so profits do not suffer
Term
nonprice competition
Definition
sellers maintain stable prices and attempt to improve their market positions by emphasizing other aspects of their marketing programs
Term
market-skimming pricing
Definition
setting a relatively high initial price for a new product
Term
market-skimming pricing
Definition
setting a relatively high initial price for a new product
Term
market-penetration pricing
Definition
a relatively low initial price is established for a new product. The price is low in relation to the target market's range of expected prices
Term
quantity discounts
Definition
deductions from a seller's list price intended to encourage customers to buy in larger amounts or to buy most of what they need from the seller offering the deduction. based on the size of the purchase
Term
noncumulative discount
Definition
based on the size of an individual order of one or more products
Term
cumulative discount
Definition
based on the total volume purchased over a specified period
Term
trade discounts
Definition
aka functional discounts, reductions from the list price offered to buyers in payment for marketing functions the buyers will perform
Term
cash discount
Definition
a deduction granted to buyers for paying their bills within a specified time
Term
rebate
Definition
a discount on a product that a customer obtains by submitting a form or certificate provided by the seller: coupon or mail-in rebate
Term
price customization
Definition
to establish various prices on the basis of how much value is attached to a product by different people
Term
seasonal discount
Definition
given to a customer who places an order during the slack season
Term
promotional allowance
Definition
a price reduction granted by a seller as payment for promotional services performed by buyers
Term
price discrimination
Definition
various prices for different customers
Term
robiinson-patman act
Definition
passed in 1936, intended to curb price discrimination by large retailers. price discrimination i unlawful only when the effect may be to substantially injure competition
Term
FOB factory pricing
Definition
the only geographic pricing strategy in which the seller does not pay any of the freight costs (FOB = free on board)
Term
uniform delivered pricing
Definition
the same delivered price is quoted to all buyers regardless of their locations
Term
zone-delivered pricing
Definition
divides a seller's market into a limited number of braod geographic zones and then sets a uniform delivered price for each zone
Term
freight-absorption pricing
Definition
a manufacturer quotes to the customer a dilivered price equal to its factory price plus the shipping costs that would be charged by a competitive seller located near that customer
Term
one-price strategy
Definition
charges the same price to all similar customers who buy identical quantities of a product
Term
flexible-price strategy
Definition
similar customers may pay different prices when buying identical quantities of a product
Term
flat-rate pricing
Definition
a variation of the one-price strategy, a purchaser pays a stipulated single price and then can consume as little or as much of the product as desired
Term
single-price strategy
Definition
an extreme variation of the one-price strategy, not only are all customers charged the same price, but all items sold by the firm carry a single price
Term
price lining
Definition
selecting a limited number of prices at which a business will sell related products
Term
odd pricing
Definition
sets prices at uneven amounts rather than even amoungs. often avoided in prestige stores or on higher-priced items
Term
leader pricing
Definition
temporarily cut prices on a few items to attract customers
Term
leader
Definition
the items on which prices are cut
Term
loss leader
Definition
if the leader is priced below the store's cost
Term
unfair-practices acts
Definition
to regulate leader pricing. typically prohibit a retailer or wholesaler from selling an item below invoice cost plus some stipulated amount
Term
high-low pricing
Definition
alternating between regular and "sale" prices on the most visible products offered by a retail firm. frequent price reductions are combined with aggressive promotion to convey an image of low prices
Term
everyday low pricing
Definition
consistently low prices and few, if any, temporary price reductions
Term
resale price maintenance
Definition
manufacturers want to control the prices at which middlemen resell their products
Term
suggested list price
Definition
price is set by a manufacturer at a level that provides retailers with their normal markups
Term
price war
Definition
may begin when one firm decreases its price in an effort to increase its sales volume and/or market share. the battle is on if other firms retaliate, reducing prices on their competing products
Term
first task of promotion
Definition
inform
Term
four forms of promotion
Definition
1. personal selling, 2. advertising, 3. sales promotion 4. public relations
Term
personal selling
Definition
the direct presentation of a product to a prospective customer by a representative of the organization selling it. more money is spent on personal selling than on any other form of promotion
Term
advertising
Definition
nonpersonal communication paid for by a clearly identified sponsor promoting ideas, organizations, or products
Term
sales promotion
Definition
sponsor-funded, demand-stimulating activity designed to supplement advertising and facilitate personal selling. many sales promotions are directed at customers. when a sales promotion is directed to the members of the distribution channel, it is called trade promotion
Term
public relations
Definition
encompasses a wide variety of communication efforts to contribute to generally favorable attitudes and opinions toward and organization and its products. does not include specific sales messages.
Term
publicity
Definition
a special form of public relations that involves news stories about an organization or its products
Term
integrated marketing communication
Definition
a strategic business process used to plan, develop, execute, and evaluate coordinated, measurable, persuasive communications with an organization's internal and external audiences. begins with a strategic planning effort to coordinate with other P's
Term
communication
Definition
the verbal or nonverbal transmission of information between someone wanting to express an idea and someone else expected or expecting to get that idea
Term
4 elements of communication
Definition
1. message 2. source 3. channel 4. receiver
Term
communication process
Definition
encode -- decode -- response -- feedback. all affected by noise
Term
promotion mix
Definition
an organization's combination of personal selling, advertising, sales promotion, and public relations
Term
designing an effective promotion mix
Definition
1. target audience 2. objective of the promotion effort 3. nature of the product 4. stage in the PLC 5. amount of money available for promotion
Term
push strategy
Definition
promotion aimed at middlemen
Term
pull strategy
Definition
promotion aimed at end users
Term
hierarchy of effects
Definition
1. awareness 2. knowledge 3. liking 4. preference 5. conviction 6. purchase
Term
awareness
Definition
the seller's task is to let the buyers know that the product/brand exists
Term
knowledge
Definition
goes beyond awareness to learning about the product's features
Term
liking
Definition
how the market feels about the product; can be used to move a knowledgeable audience from being indifferent to liking a brand
Term
preference
Definition
distinguishing among brands so that the market finds your brand more attractive than the alternatives
Term
conviction
Definition
entails the actual decision or commitment to purchase
Term
purchase
Definition
can be delayed or postponed indefinitely, even for customers who are convicted they should buy a product
Term
viral marketing
Definition
creating a situation in which consumers spread information about a company or brand to other people
Term
promotional budgeting methods
Definition
percent of sale, all available funds, following the competition, budgeting by task or objective
Term
percentage-of-sales
Definition
simple to calculate, probably most widely used, important flaw: management is effectively making promotion a result of sales when, in fact, it is a cause of sales
Term
all available funds
Definition
objective is to build sales and market share as rapidly as possible during those early, critical years
Term
following competition
Definition
to match the promotional expenditures of competitors or to spend in proportion to market share
Term
task or objective
Definition
best, aka buildup method
Term
federal trade commission act
Definition
prohibits unfair methods of competition, including false, misleading, or deceptive advertising
Term
wheeler-lea amendment
Definition
strengthened the original FTC act by specifying that an unfair competitive act violates the law if it injures the public, regardless of the effect it may have on competition
Term
lanham trademark act
Definition
making false claims about a company's own products is illegal
Term
trademark law revision act
Definition
encompass comparisons made in promotional activity. regulates claims about where a product is manufactured
Term
printers' ink statutes
Definition
punish untrue, deceptive, or misleading advertising
Term
green river ordinance
Definition
restrict sales people who represent firms located outside the affected city and who sell door-to-door or call on business establishments
Term
personal selling
Definition
the personal communication of information to persuade somebody to buy something; in many companies, it is the largest single operating expense (often 8%-15% of sales)
Term
inside selling
Definition
primarily involves retail sales, the customers come to the sales people
Term
outside selling
Definition
sales people go to the customer
Term
typical sales job includes 3 activities
Definition
1. taking orders, 2. customer support, 3. order getting
Term
selling center
Definition
a group of people representing a sales department as well as other functional areas in a firm, such as finance, production, and research and development, brought together to meet the needs of a particular customer. sometimes called sales team or team selling
Term
systems selling
Definition
selling a total package of related goods and services to solve a customer's problem
Term
global sales teams
Definition
responsible for all of a company's sales to an account anywhere in the world
Term
relationship selling
Definition
developing a mutually beneficial relationship with selected customers over time
Term
telemarketing
Definition
the innovative use of telecommunications equipment and systems as part of the "going to the customer" category of personal selling
Term
internet selling
Definition
b2b auction qualifies as personal selling because of its interactive nature
Term
reverse auction
Definition
the prospective buyer notifies prequalified potential sellers of its willingness to purchase a specified product and an online auction is held to select a seller
Term
sales force automation
Definition
capability of using electronic tools to combine company and client information in real time to enhance the sales function
Term
personal selling process
Definition
a logical sequence of four steps that a sales person takes in dealing with a prospective buyer. 1. prospecting, 2. preapproach to individual prospects, 3. presenting the sales message, 4. postsale services
Term
prospecting
Definition
identifying prospective customers and qualifying prospects
Term
preapproach to individual prospects
Definition
learning all they can about the persons or companies to whom they hope to sell
Term
presenting the sales message (AIDA)
Definition
attention, interest, desire, action
Term
postsale services
Definition
build customer goodwill and lay the groundwork for future business
Term
methods of sales-force compensation
Definition
salary, commission, combination
Term
four features of ads
Definition
1. verbal/visual nonpersonal message, 2. identified sponsor, 3. delivery through one or more media, 4. payment by the sponsor to the medium carrying the message
Term
advertising
Definition
consists of all activities involved in presenting through the media a nonpersonal, sponsor-identified, paid-for message about a product or organization
Term
two types of advertising
Definition
business-to-consumer or business-to-business
Term
primary-demand advertising
Definition
designed to stimulate demand for a generic category of a product
Term
selective-demand advertising
Definition
intended to stimulate demand for individual brands
Term
pioneering advertising
Definition
when the product is in the introductory stage of its lifecycle
Term
demand-sustaining advertising
Definition
primary-demand, done throughout the lifecycle
Term
comparison advertising
Definition
special case of selective-demand, makes reference to one or more competitors
Term
product advertising
Definition
focuses on a particular product or brand. direct-action or indirect-action
Term
direct-action
Definition
seeks a quick response
Term
indirect0action
Definition
designed to stimulate demand over a longer period of time
Term
institutional advertising
Definition
presents info about the advertiser's business or tries to create a favorable attitude toward the organization (ex: McDonald's I'm Lovin It)
Term
advertising campaign
Definition
consists of all the tasks involved in transforming a theme into a coordinated advertising program to accomplish a specific goal for a product or brand
Term
framework for establishing advertising campaign
Definition
1. identify the target audience, 2. establish the overall promotional goals, 3. set the total promotional budget, 4. determine the overall promotional theme
Term
cooperative advertising
Definition
a joint effort by two or more firms intended to benefit each of the participants. vertical (different levels of distribution) and horizontal (2 or more firms on the same level of distribution)
Term
advertising media
Definition
in which to place the ad
Term
cost per thousand (CPM)
Definition
the cost of reaching a thousand people, one time each, with a particular ad
Term
television
Definition
lack permanence, so they must be seen and understood immediately, relatively expensive but can reach a large audience, expensive to produce
Term
direct mail
Definition
has the potential of being the most personal and selective of all media, highly specialized lists can be developed from a firm's own customer database or purchased from list suppliers
Term
newspapers
Definition
flexible and timely, ads can be inserted or canceled on very short notice, can vary in size, relatively low CPM, difficult to design ads that stand outo
Term
radio
Definition
low CPM, makes only an audio impression
Term
yellow pages
Definition
been around since the late 1800s
Term
magazines
Definition
the medium to use when high-wuality printing and color are desired in an ad. can reach a national market at a relatively low cost per reader
Term
out of home advertising
Definition
spending is growing at about 10%/year, includes billboards (now in malls, arenas, airports, and other indoor locations)
Term
interactive media
Definition
a feature that permits the advertising message recipient to respond immediately using the same medium, includes internet
Term
direct tests
Definition
compile the responses to an ad or a campaign, can only be used with a few types of ads
Term
indirect tests
Definition
measures of something other than actual behavior (ex: recall)
Term
advertising agency
Definition
an independent company that provides specialized advertising services
Term
sales promotion
Definition
demand-stimulating devices designed to supplement advertising and facilitate personal selling
Term
reasons for sales promotion
Definition
1. short term results, 2. competitive pressure, 3.buyers' expectations 4. low quality of retail selling
Term
sampling
Definition
the only sure way of getting a product in the hands of potential customers
Term
couponing
Definition
largest category: Free Standing Inserts (FSI) in newspapers. cons: expensive, reduced margins to seller, undermine brand loyalty
Term
sponsorship and event marketing
Definition
viewed as a long-range image-building activity
Term
trade shows
Definition
associations in industries as diverse as computers, sporting goods, food, and broadcasting sponcer these, appeal - efficiency, expensive for exhibitors
Term
product placements
Definition
props in movies and tv shows. most notable: back to the future (large number) et (reeses pieces), cast away (fedex)
Term
public relations
Definition
a management tool designed to favorably influence attitudes toward an organization, its products, and its policies; usually not the responsibility of the marketing dept
Term
publicity
Definition
any communication about an organization, its products, or policies through the media not paid for by the organization
Term
benefits of publicity
Definition
lower costs, increased attention, more information, timeliness
Term
drawbacks of publicity
Definition
loss of control over the message, limited exposure, ot truly free
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