Term
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Definition
| Amount of money charged for a product/service, or the sum of all the values that customers give up in order to gain benefits of having a product/service. |
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Term
| How is price related to the marketing mix? |
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Definition
-Only element that produces revenue
-Most flexible |
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Term
| Factors to consider when setting prices? |
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Definition
1) Customer perceptions of value: set the price ceiling.
2) Product costs set the price floor.
-Set price between these two extremes as well as consider other internal/external factors such as overall marketing strategy,mix, demand, and competitor's prices. |
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Term
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Definition
Setting prices based on buyer's perceptions of value rather than on the seller's cost.
*Price is considered BEFORE the marketing program is set. |
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Term
| What are 2 types of value-based pricing? |
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Definition
1) Good-value pricing: offering just the right combination of quality and good service at a fair price.
ex: McDonald's value menu
2) Value-adding pricing: Attaching value-added features and services to differentiate a market offering and support higher prices, rather than cutting prices to match competitors.
Ex: Stag umbrellas |
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Term
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Definition
Everyday low pricing...charging a constant, everyday low price with few or no temporary price discounts.
Ex: WALMART |
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Term
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Definition
| Setting prices based on the cost for producing,distributing, and selling the product plus a fair rate of retun for its effort and risk. |
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Term
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Definition
| costs that do not vary with production or sales level. Ex: Rent, heat, salaries... |
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Term
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Definition
| costs that vary directly with the level of production |
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Term
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Definition
| Adding a standard markup to the cost of the product |
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Term
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Definition
| setting price to break even on the costs of making and marketing a product. (AKA..target profit pricing) |
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Term
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Definition
pricing that starts with an ideal selling price, then targets costs that will ensure that the price is met.
"car you can afford to drive......a car you actually want to drvie" |
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Term
Pricing in different types of markets:
1)Pure competition
2)Monopolistic competition
3)Oligopolistic competition
4)Pure monopoly |
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Definition
1) Pure competition- market consists of many buyers and sellers trading in a uniform commodity. (do not spend much time in marketing strategy since market research, pricing,advertising play little role.
2)Monopolistic competition- market consits of many buyers/sellers who trade over a range of prices rather than a single market price. (sellers try to differentiate)
3)oligopolistic competiton- market consists of few sellers who are highly sensitive to each others pricing and marketing strategies.
4)Pure monopoly- market consists of one seller ex: U.S. Postal Service |
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Term
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Definition
| a curve that shows the number of units the market will buy in a given time period, at different prices that might be charged. Usually downward but can also slop upwards. |
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Term
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Definition
| a measure of the sensitivity of demand to changes in price. |
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Term
| When bringing out a new product, companies can chooose between waht two strategies? |
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Definition
| Market-skimming pricing and market-penetration pricing. |
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Term
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Definition
setting a high price for a new product to skim maximum revenues layer by layer from the segmetns willing to pay the high price, company makes fewer but more profitable sales.
Ex:HDTV from 6,000 to 500. |
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Term
| Market-penetration pricing |
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Definition
| setting a low price for a new product in order to attract a large # of buyers and a large market share. |
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Term
| What are 5 strategies in product mix pricing? |
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Definition
1)Product line pricing
2)optional-product pricing
3)captive-product pricing
4)by-product pricing
5)product bundle pricing |
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Term
| Product Mix Pricing Strategy: Product line pricing |
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Definition
| Setting prices across an entire product line ex: Quicken offers Basic, Deluxe, Premier, etc. for different prices |
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Term
| Product Mix Pricing Strategy: Optional-Product Pricing |
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Definition
Offering to sell optional or accessory products along with the main product
ex: Refrigerators come with optional ice makers |
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Term
| Product Mix Pricing Strategy: Captive-product pricing |
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Definition
Setting a price for products that must be used along with a main product
ex: printer cartridges |
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Term
| Product Mix Pricing Strategy: By-product pricing |
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Definition
| Pricing low-value by-products to get rid of them so the price of the main product can be more competitive. |
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Term
| Product Mix Pricing Strategy: Product bundle pricing |
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Definition
combining several products and offering the bundle at a reduced price.
EX: Burger King "meal"price with burger,fries, and drink |
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Term
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Definition
| a straight reduction in price on purchases under stated conditions or during a stated period of time. ex: cash discount: 2/10, net 30 |
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Term
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Definition
| promotional money paid by manufacturers to retailers in return for an agreement to feature the manufacturer's product in some way. |
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Term
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Definition
| adjusting prices to allow for differences in customers, products, or locations |
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Term
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Definition
consider the psychology of prices and not just the economics
ex:"consumers usually percieve higher priced products as having higher quality |
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Term
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Definition
Prices that buyers carry in their minds and refer to when they look at a given product.
EX: 299.99 compared to 300 |
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Term
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Definition
| temporarily pricing products below the list price, and sometime even below cost, to increase short-run sales. |
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Term
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Definition
| setting pricebased on buyer's geographic location |
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Term
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Definition
Adjusting prices continually to meet the characteristics and needs of individual customers and situations
EX: yahoo! and amazon.com |
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Term
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Definition
1) price-fixing: sellers must set prices without talking to compeitors
2) Predatory pricing: selling below cost with the intention of punishing a competitor or gaining higher long run profits by putting competitor out of business. |
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Term
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Definition
| Prvent unfair PRICE DISCRIMINATION by ensuring sellers offere the same price terms to customers at a given level of trade. |
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Term
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Definition
when firms employ pricing methods that make it difficult for consuemrs to understand just what price they are actually paying
ex: prices buried under "fine print"
*The Automobile Info Disclosure Act deals with this |
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Term
| IN CLASS PRICING LECTURE: Ipad, House, Milk, Digital Watch, Dress, DUI, Towel |
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Definition
1) Ipad = price skimming
setting a high price for a new product to skim maximu revenues layer by layer..
2) House = Odd-Even Pricing
Psychological pricing method based on the belief that certain prices or price ranges are more appealing to buyers. This method involves setting a price in odd numbers (just under round even numbers) such as $49.95 instead of $50.00.
3) Milk = Price leaders
Popular item or an item of daily consumption whose price is set lower than normal to attract customers into the store.
4) Digital watch- everyday low price
charing a constant, everday low price with few or no temporary price discounts....WALMART
5) Dress = Prestige
Setting a high price for a product to help attract status-conscious consumers.
6) DUI= professional
ex: lawyers, doctors
7)Towel= special-event pricing
Pricing in certain seasons to draw more customers. |
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Term
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Definition
| Network made up of the company, suppliers, distributors, and customers who "partner" with each to improve the performance of the entire system. |
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Term
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Definition
| a set of interdependent orgs. that help make a product or service avaliable for use. |
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Term
| Channels add value by bridging the major time, place, and gaps..... |
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Definition
1)information
2)promotion
3)contact
4)matching
5)negotiation |
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Term
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Definition
| A layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer. |
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Term
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Definition
| M.C. that has no intermdiary levels...company sells straight to consumers. |
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Term
| inderect marketing channel |
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Definition
| channel containing on or more intermediary levels. |
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Term
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Definition
| disagreement among marketing channel members on goals and roles..who should do what and for wat rewards |
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Term
| Conventional distribution channel |
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Definition
| Consists of one or more independent producers, wholsalers, and retailers wh try to maximize profits even at the expense of the system as a whole....no control over other members |
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Term
| Vertical marketing system (VMS) |
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Definition
| a distribution channel that consists of producers, wholesalers, and ratailers acting as a unified system....contracts! |
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Term
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Definition
| A VMS that combines succesive stages of production and distribution under single ownership. |
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Term
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Definition
| A VMS in which independent firms at different levels of production and distribution join together through contracts to obtain more sales impact than they would achieve alone. |
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Term
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Definition
| A contractual VMS in which a channel member, called a franchiser links serveral stages in the prod.-distr. process |
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Term
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Definition
coordinates successive stages of production and distribution, not through common ownership or contractual ties, but through the size and power of one of the parties
ex: Proctor and GAmble |
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Term
| Horizontal marketing system |
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Definition
| channel arrangement in which two or more companies at one level join together to follow a new marketing opportunity. |
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Term
| Multichannel distribution systems |
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Definition
| a single firm sets up two or more markeing channels to reach one or more customer segments |
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Term
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Definition
cutting out intermediaries and going directly to final buyers
ex: Southwest airlines sell directly to final buyers cutting out retailers and sales agent. |
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Term
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Definition
| Designing effective marketing channels by analyzing consumer needs, setting channel objectives, identifying major alternatives and evaluting them |
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Term
| Marketing channel managment |
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Definition
| selecting, managing, and motivating individual channel memebers and evaluating their performance over time |
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Term
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Definition
| planning,implementing, and controlling the physical flow of materials, final goods from origin to points of consumption |
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Term
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Definition
| managing upstream and downstream value-added flows of materials, final goods among suppliers, company, resellers and final consumers. |
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Term
| Intermodal transportation |
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Definition
| combining two or more modes of transportation ex: piggyback, fishyback, trainship, airtruck |
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Term
| Integrated logistics management |
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Definition
| teamwork to maximize performance |
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Term
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Definition
independent logistics provider that performs any or all functions rquired to get clients product to market.
ex: UPS, Fedex, 3PLS |
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Term
| Promotion mix (what are the 5 tools used to communicate with consumers?) |
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Definition
or..marketing communications mix
1)Advertising
2)Sales promotion
3)Personal selling
4)PR
5)Direct Marketing |
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Term
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Definition
| one way communication, time specific, greatest amount of $ outlayed. (co's still spend the most advertising)...presentation of ideas, goods, or services by an identified sponsor |
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Term
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Definition
-two way communication
-mostly used business to business marketing
-most expensive in terms of per person reached
-about 72 thousand dollars
-immediate feedback |
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Term
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Definition
-short-term incentives to encourage the purchase sale of a product/service
-sampling can be expensive but creates good revenue and increases impulse buying
-contests, sweepstakes
-coupons
-rebates
-bonuses |
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Term
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Definition
building good relations by obtaining favorable publicity
-articles, news releases
-publicity=free
1. obtain favorable publicity
2. build and project favorable image
3. be able to respond to rumors and events |
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Term
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Definition
direct connections with individual cosnumers to obtain immediate response and cultivate lasting customer relationships.
-online marketing
-blogs/social media
-Homeshopping networks
-door to door |
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Term
| Integrated marketing communications |
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Definition
| integrating and coordinating the company's many communication channels to deliver a clear, consistent, and compelling message about company and its products. |
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Term
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Definition
| using sale force and trade promotion to push the product through channels. Promote product->members to induce them to carry the product and promote it to final consumers. |
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Term
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Definition
spend lots of money on advertising and consumer promotion to induce final cosnuemrs to buy product.
Consumers will then demand product from channel who will in turn demand it from producers. |
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Term
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Definition
| merging of advertising and entertainment |
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Term
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Definition
| compelling the "big idea" that will bring advertisng message to life in a distinctive/memorable way |
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Term
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Definition
| the approach, style, tone, words, and format used for executing advertising message |
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Term
| Designing a sales force strategy (4 major structures) |
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Definition
1) Territory Structure- geographic selling area..sells companys full line to customers in that territory.
2)Product structure- sales person specialize in selling only a portion of company's products or lines.
3) Customer structure- saleperson specilize in selling only to certain customers with unique needs
4) Complex structure- When co. sells a wide variety of products to many types of customers over broad geographic area, combines several types of sales force structures. |
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Term
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Definition
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Term
| What is the communication process? |
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Definition
1)Sender
2)Encoding
3)Message/MEdia
4)Decoding
5)Receiver
6)Response
*Noise caused by rumors, phsyical noise, lawsuits, language barriers |
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Term
Product Attribute Decisions (promotional tools)
DAPPS |
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Definition
1)Direct Marketing
2)Advertising
3)Personal Selling
4)Public Relations
5)Sales Promotion |
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Term
| 2 major factors affecting change toward segmented marketing |
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Definition
1) shift away from mass marketing
2) Improvement in information technology |
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Term
| 6 steps in developing effective communication program |
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Definition
1) Identify target audience - analyzing consumer needs
2) Determine the communication objectives - inform, persuade, or remind buyers? helps build customer relationships
3) Design the message- planning a message strategy and executing it effectively.
USE AIDA MODEL
-Get ATTENTION
-Hold INTEREST
-Arouse DESIRE
-Obtain ACTION
* Rational appeals?
* Emotional appeals?
* Moral appeals?
4) Choose the media- Personal Media: Word of mouth, opinion leaders
Non personal media: events, atmospheres, and major media (print, broadcasting)
5) Select the message source- choose the best media vehicles
6) collect feedback |
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Term
| Advertising based on females and males |
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Definition
females - like text and verbal skills
males - like pictures, not words, like colors |
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Term
| Major decisions in Advertising? |
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Definition
1) Objective settings
2) Budget Decisions
3) Message Decision
4) Media Descisions
5) Campaign evaluation |
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Term
| 3 objectives of demand are classified by primary purpose: I P R |
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Definition
1) Inform - primary demand (product class/category)
2) Persuade - selective demand (build brand loyalty
3) Remind - demand loyalty |
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Term
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Definition
1) Institutional - talk about company and services (describes the company or cause) ex: Allstate, dove
2) Product
*Pioneer: used when introducing a new product, informing prospects of the product
* Comparitive: directly or indirectly compares the brand with one or more other brands (competitors)
-less market share
-drawback: exposer to competitor
* Reminder: used for mature products to help maintain customer relationships and keept customers thinking about the product. |
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Term
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Definition
-testimonial evidence: infomercials
-humor
-slice of life: ppl in everday setting (benefits)
-lifestyle
-mood or image
-fantasy
-musical
-personality symbol
-technical expertise
-scientific evidence |
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Term
| 2 types of campaign evaluation |
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Definition
1) communication effects
2) sales & profit effects |
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Term
| What are the steps in sales force management? |
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Definition
-Designing saleforce strategy and structure
-recruiting and selecting
-compensation
-training |
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Term
| What is an insider order taker? |
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Definition
| somebody who sits online or telephone who doesn't have to face contact with consumers. |
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Term
| What is an outside order getter? |
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Definition
| getting new sales and contacting face to face with consumers |
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Term
| Recruiting and selecting sales person: |
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Definition
-Importance
-Quality
-Procedures-may have to take tests
-Selection |
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Term
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Definition
-good listening skills/assertive
-depends on companies
-important to get right ppl
-sell 1-1.5 more than regular sales ppl. |
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Term
| Training sales people? (what they need to know) |
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Definition
1) need to know product
2) need to know about company
3) need to know about customers
4) competitors
5) presentation skills
6) procedures |
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Term
| What is the biggest motivator for sales people? |
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Definition
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Term
| What is the 7 step selling process? |
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Definition
1. Prospecting - IDENTIFY QUALIFIED POTENTIAL CUSTOMERS... referrals, getting your information by buying lists (sweepstakes)
2. Preapproach - Salesperson learns as much as possible about prospective customer before making a sales call.
3. Approach- salesperson meets with customer for first time
4. Presentation: Making a sales pitch
-Canned approach= reading off script
-Formula based= asking 2/3 questions and then canned approach
-need satisfaction= find out what their needs are and how to satisfy
F-features
A-advantage
B-benefits
5. Handling objectives- trial close; salesperson seeks out, clarifies, and overcomes customer objections to buying.
6. Closing - ask for sale or order
7. Follow-up - sale person follows up after sale to ensure customer satisfaction and repeat business |
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