Shared Flashcard Set

Details

Mktg 301
Concept Check 3 (CH. 10, 11, 14, 15, 16)
115
Marketing
Undergraduate 3
03/07/2012

Additional Marketing Flashcards

 


 

Cards

Term
Price
Definition
  • amount of money charged for a product or service
  • only element in marketing mix that generates revenue; all other's represent cost
Term
customer value-based pricing
Definition
  • Setting price based on buyer's perceptions of value rather than on the seller's costs
  • opposite of cost-based pricing (value-based asseses customer needs, then sets price target and begins designing product
Term
good-value pricing
Definition
  • offering the right combination of quality and good service at a fair price
  • ex: McDonald's offering a value menu
Term
everyday low pricing
Definition
  • no temp. discounts, same price everyday
  • ex: Walmart, Costco
Term
high-low pricing
Definition
  • charging higher prices on an everyday basis, but running frequent promotions
  • ex: Kohl's and Macy's
Term
value-added pricing
Definition
  • rather than cutting prices to match competitors, they attatch value-added features and services to differentitate their offers and support higher prices
  • ex: umbrellas in India coming with features like flashlights, sound system
Term

cost-based pricing

 

Definition
  • setting prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for its effort and risk
Term
experience curve
Definition
  • the drop in average per-unit production cost that comes with accumulated production experience
Term
cost-plus pricing (markup)
Definition
  • adding a standard markup to the cost of the product

 

Term
competition-based pricing
Definition
  • setting prices based on competitor's strategies, costs, prices, and market offerings

 

Term
target costing
Definition
reverses the usual process of first designing a new product, determining its cost, and then asking "can we sell it for that"
Term
pure competition
Definition
  • the market consists of many buyers and sellers trading in uniform commodity (wheat, copper, stocks)
  • no single buyer or seller has much effect on the going market price
Term
monopolistic competition
Definition
  • market consists of many buyers and sellers who trade over a range of prices rather than a single market place
  • range of prices occurs b/c sellers can differentiate their offerings
Term
oligopolistic competition
Definition
  • market consists of a few selles who are highly sensitive of each other's pricing strategies and marketing strategies

 

Term
pure monopoly
Definition
market consists of one seller
Term
demand curve
Definition
the number of units the market will buy in a given time period at different prices that might be charged
Term

Ch. 11

 

price skimming

Definition
setting high initial prices to "skim" revenues layer by layer from the market
Term
market penetration pricing
Definition
setting a low initial price to penetrate the market quickly and deeply--to attract a large number of buyers quickly and win a large market share
Term
product line pricing
Definition
management must determine the price steps to set between the various product lines
Term
optional product pricing
Definition

offering to sell optional or accessory products along witht he main product

 

(ex: warranties)

Term
captive product pricing
Definition

companies that make products that must be used along with a main product

 

ex: printer ink sold with printer, video games developed for PS3/Xbox

Term
by-product pricing
Definition

company seeks a market for these by-products to help offset the costs of disposing of them and help makethe price of the main product more competitive

 

ex: Woodland Park Zoo sells animal poop

Term
product bundle pricing
Definition

combining several products and offer the bundle at a reduced rate

 

ex: Fast-food meals; bundle TV, phone and internet

Term

segmented pricing

 

(includes customer-segment, product-form, location-based, time-based)

Definition
company sells a prodct or service at 2 or more prices, even though the difference in prices is not based on differences in costs
Term
customer-segment pricing
Definition

different customers pay different prices for the same product or service

 

ex: Movie theaters charging matinee prices

Term
product-form pricing
Definition
different versions of the product are priced differently, but not according to differences in costs
Term
location-based pricing
Definition

company charges different prices for different locations even though the cost of offering each location is the same

 

ex: Universities charging out-of-state tuition

Term
time-based pricing
Definition

a firm varies its price by season, month, the day, and even the hour

 

ex: resorts give weekend and seasonal discounts

Term
psychological pricing
Definition

sellers consider the psychology of prices, not simply the economics

 

ex: higher price perceived as higher quality

Term
reference prices
Definition

prices that buyers carry throught their minds and refer to when looking at a given product

 

ex: putting a store brand of cereal next to Kellog's cereal

Term
promotional pricing
Definition

companies will temporarily price their products below list price and sometimes even below cost to create buying excitement and urgency

 

adverse effects like consumers waiting only until promotions are going on (JC Penney)

Term
geographical pricing
Definition
includes: fob-origin, uniformed-delivered, zone pricing, basing-point, and freight absorption pricing
Term
dynamic pricing
Definition

 adjusting prices to continually meet the characteristics and needs of the individual customers and situations

 

ex: online companies can constantly respond to price changes

Term

ch. 14

 

promotion mix

Definition
consists of the specific blend of advertising, public relations, personal selling, sales promotion, and direct-marketing tools that the company uses to persuasively communicate customer value and build customer relationships
Term
advertising
Definition
any paid form of nonpersonal presentation promotion of ideas, goods, or services by an identified sponsor
Term
sales promotion
Definition
short-term incentives to encourage the purchase or sale of a product or service
Term
personal selling
Definition
personal presentation by the firm's sales force for the purpose of making sales and building customer relationships
Term
public relations
Definition
building good relations with the company's various publics by obtaining favorable publicity, building up a good coporate image, and handling or heading off unfavorable rumors, stories, or events
Term
direct marketing
Definition
direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships
Term
The new marketing communications model
Definition
companies are focusing less on broadcasting and more on narrowcasting
Term
integrated marketing communications (IMC)
Definition
the company carefully integrates its many communications channels to deliver a clear, consistentm, and compelling message about the organization and its brands
Term
sender
Definition
the party sending the message to another party
Term
encoding
Definition
process of putting thought into symbolic form

ex: McDonald's using words, sounds, and visuals
Term
message
Definition
set of symbols that the sender transmits

ex: the actual ad by McDonald's
Term
media
Definition
communication channels through which the messages moves from the sender to the receiver

ex: specific tv stations McDonald's chooses
Term
decoding
Definition
process by which the receiver assigns meaning to the symbols encoded by the sender

ex: consumer interprets McDonald's ad and the words/visuals in it
Term
receiver
Definition
party receiving the message sent by another party

ex: the customer who watches the ad
Term
response
Definition
reactions of the receiver after being exposed to the message

ex: customer likes McDonald's more after viewing ad
Term
feedback
Definition
part of the receiver's response communicated back to the sender

ex: McDonald's research shows consumers were struck by the ad and remember it, or they write and complain about it
Term
noise
Definition
unplanned static or distortion during the communication process, which results in the receiver getting a different message than the one the sender sent--the consumer is distracted while watching the commercial and misses the key points
Term
identifying the target audience
Definition
what will be said, how it will be said, when it will be said, whether it will be said, and who will say it
Term
buyer-readiness stages
Definition
the stages the consumers normally pass through on their way to making a purchase (awareness, knowledge, liking, preference, conviction, and purchase)
Term
personal communication channels
Definition
two or more people communicate directly with each other
Term
word-of-mouth influence
Definition
talking to friends, family, neighbors, reading reviews
Term
buzz marketing
Definition
cultivating opinion leaders and getting them to spread information about a product or service to others in their communities
Term
non personal communication channels
Definition
media that carry messages without personal contact or feedback
Term
affordable method
Definition
set the promotion budget at the level they think the company can afford (usually used by small businesses)
Term
percentage-of-sales method
Definition
budget set at a certain percentage of current or forecasted sales

disadv: uses sales as the cause of promotion rather than as the result
Term
competitive-parity method
Definition
setting their promotion budget to match competitor's outlays
Term
objective-and-task method
Definition
budget is set based on what it wants to accomplish with promotion (most logical budget method)

1) defining specific promotion objectives 2) determining the tasks needed to achieve these objectives 3) estimating the costs of performing these tasks
Term
advertising
Definition
-can reach masses of geographically dispersed buyers
-consumers tend to view advertised products as more legit

-impersonal
-one way communication and expensive
Term
personal selling
Definition
-most effective tool in certain stages (buyer's preferences, convictions, and actions)
-buyer feels a need to listen and respond

-costs of sale force
-most expensive promotional tool
Term
sales promotion
Definition
-coupons, contests, cents-off deals, premiums
-attract consumer attention, strong incentives to buy
-quick boost in sales

-not a great long-term strategy for customer value
Term
direct marketing
Definition
-direct mail, catalogs, telemarketing
-immediate and customizable
Term
push strategy
Definition
"pushing" the product through marketing channels to final customers; producer directs its marketing activities (primarily personal selling and trade promotion) toward channel members to induce them to carry the product and promote it to final customers (ex: John Deere letting Lowe's promote products)
Term
pull strategy
Definition
producer directs its marketing activities toward final consumers to induce them to buy the product

ex: Unilever promotes Axe to young males, then consumers demand CVS/Walmart to sell it and then retailers demand it from the producer
Term
CH. 15

4 important decisions when developing an advertising program
Definition
1) setting advertising objectives
2) setting the advertising budget
3) developing advertising strategy (message decisions and media decisions)
4) evaluating advertising campaigns
Term
advertising objective
Definition
a specific communication task to be accomplished with a specific target audience during a specific period of time

classified by primary purpose (inform, persuade, or remind)
Term
informative advertising
Definition
used heavily when introducing a new-product category; objective is to build primary demand

ex: producers of DVDs had to build demand at first
Term
persuasive advertising
Definition
more important as competition increases; company's objective is to build selective demand

ex: Once DVD players became popular, Sony persuaded consumers that their's had the best quality
Term
comparative advertising
Definition
company directly or indirectly compares its brand with one or more other brands
Term
reminder advertising
Definition
important for mature products; it helps to maintain customer relationships and keep consumers thinking about the product

ex: Coke ads build and maintain relationships
Term
advertising strategy
Definition
2 major elements: creating advertising messages and selecting advertising media
Term
madison & vine
Definition
term representing merging of advertising and entertainment in an effort to break through the clutter and create new avenues for reaching consumers with more engaging messages
Term
creative concept
Definition
"big idea"
Term
execution style
Definition
the approach, style, tone, words, and format used for executing an advertising message
Term
slice of life
Definition
this style shows one or more "typical" people using the product in a normal setting

ex: 5 hour energy using business people
Term
lifestyle
Definition
this style shows how a product fits in with a particular lifestyle

ex: Polo living the active lifestyle
Term
fantasy
Definition
this style creates a fantasy around the product or its use

ex: Kia using the Sandman commercial
Term
mood or image
Definition
this style builds a mood or image around the product or service, such as beauty, love, intrigue, or serenity

ex: McDonald's "I'm lovin' it"
Term
musical
Definition
this style shows people or cartoon characters singing about the product

ex: Free credit report.com
Term
personality symbol
Definition
this style creates a character that represents the product

ex: Geico gecko
Term
technical expertise
Definition
this style shows the company's expertise in making the product

ex: Owner of Sam Adams showing how they brew beer
Term
scientific evidence
Definition
this style presents survey or scientific evidence that the brand is better or better liked than one or more other brands

ex: Crest using science to convince buyers
Term
testimonial evidence or endorsement
Definition
this style features a highly believable or likable source endorsing the product

ex: Jared from Subway endorsing healthy eating
Term
advertising media
Definition
1) determining on reach, frequency, and impact 2) choosing among major media types 3) selecting specific media vehicles 4) choosing media timing
Term
reach
Definition
a measure of the percentage of people in the target market who are exposed to the ad campaign during a given period of time (ex: 70 percent reach)
Term
frequency
Definition
the measure of how many times the average person in the target market is exposed to the message
Term
return on advertisement investment
Definition
net return on advertising investment divided by the costs of the advertising investment
Term
public relations
Definition
building good relations with the company's various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events
Term
press relations or press agency
Definition
creating a placing newsworthy information in the news media to attract attention to a person, product, or service
Term
product publicity
Definition
publicizing specific products
Term
public affairs
Definition
building and maintaining national or local community relationships
Term
lobbying
Definition
building and maintaining relationships with legislators and government officials to influence legislation and regulation
Term
CH. 16

sales force management
Definition
analyzing, planning, implementing, and controlling a sales force activities
Term
territorial sales force structure
Definition
each salesperson is assigned to an exclusive geographic area and sells the company's full line or products or service to all customers in that territory
Term
product sales force structure
Definition
the sales force sells along product lines

ex: GE has sales people for turbines, fridges, air conditioners, healthcare equipment
Term
customer sales force structure
Definition
organizing the sales force along customer or industry lines

ex: major accounts vs. regular accounts
Term
complex sales force structure
Definition
sales people can be specialized by customer and territory; product and territory; product and customer; or territory , product, and customer

ex: Microsoft dedicated just to government customers
Term
team selling
Definition
using teams of people from sales, marketing, engineering, finance, technical, support, or even upper management to service large, complex accounts
Term
sales 2.0
Definition
the merging of innovative sales practices with Web 2.0 technologies to improve sales force effectiveness and efficiency
Term
sales quota
Definition
a standard that states the amount a salesperson should sell and how sales should be divided among the company's products
Term
selling process
Definition
the steps sales people follow when selling, which include prospecting and qualifying, pre approach, approach, presentation and demonstration, handling, objections, closing, and follow-up
Term
prospecting
Definition
a salesperson or company identifies qualified potential customers
Term
pre approach
Definition
a salesperson learns as much as possible about a prospective customer before making a sales call
Term
pre approach
Definition
a salesperson learns as much as possible about a prospective customer before making a sales call
Term
pre approach
Definition
a salesperson learns as much as possible about a prospective customer before making a sales call
Term
approach
Definition
a salesperson meets the customer for the first time
Term
presentation
Definition
a salesperson tells the "value story" to the buyer, showing how the company's offer solves the customer's problems
Term
handling objections
Definition
a salesperson seeks out, clarifies, and overcomes any customer objections to buying
Term
closing
Definition
a salesperson asks the customer for an order
Term
follow-up
Definition

a salesperson follows up after the sale to ensure customer satisfaction and repeat business

 

also, goal is to reduce cognitive dissonance

Term
consumer promotions
Definition
sales promotion tools used to boost short-term customer buying and involvement or enhance long-term customer relationships
Term
trade promotions
Definition
sales promotion tools used to persuade resellers to carry a brand, give it shelf space, promote it in advertising, and push it to consumers
Term
business promotions
Definition
used to generate business leads, stimulate purchases, reward customers, and motivate sales people
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