AAA FINAL Flashcards
What was the recomendation for Nike
diversification: new products, new markets
nike wrist, promotion strategy
mostly social media
Nike wrist thing pricing strategy
prestige
Nike product modifications
Heart rate chest strap, upgraded actimetry sensor(track sleep and REM)
Threats to gopro
smartphones
gopro promotion
social media, celebrity endorsements
Gopros recommended strategy
Market Development
Gopros new strategy plan
professional medical use,
energizer product recomendations
offer customization, engraving, partner with cell phone brands
energizer distribution recomendations
Expand to cell phone carrier stores
energizer promotion strategy
advertise on public trans, on smarphone apps
Four I’s of service
intangibility, inconsistency, inseparability, inventory
Idle Production Capacity
when the service provider is available but there is no demand for the service
gap analysis
analyzing the difference between consumers’ expectations and experience
off peak pricing
charging different prices during diff times of day to match variations in demand
internal marketing
based on the notion that a service org. must focus on its employees or internal market before successful programs can be directed at customers.
Customer experience managment
the process of managing the entire customer experience with the company.
Value
the ratio of precieved benefits to price or value
Value-Pricing
the practice of simultaneously increasing product and service benefits while maintaining or decreasing price
Profit Equation
profit=total revenue-total cost= (unit price*quantity sold)+(Fixed cost + variable cost)
pricing objectives
specifying the role of price in an organizations marketing and strategic plans
Pricing constraints
factors that limit the range of prices a firm may set
pure competition
set by marketplace
monopolistic competition
price competition exists
oligopoly
avoids competition
pure monopoly
no price competition at all
Total revenue
total money recieved from the sale of a product. The unit price *quantity
Average revenue
is the average amount of money received for selling one unit of a product, or simply the price of that unit. Average revenue is the total revenue divided by the quantity sold:
AR=(TR)/Q = P
Marginal Revenue(MR)
is the change in total revenue that results from producing and marketing one additional unit of a product
Price Elasticity of Demand
percent change in quantity demand relative to a percent change in price
Elastic Demand
when a 1 percent decrease in price produces more than a 1% increase in quantity demanded (increasing sales revenue)
Inelastic Demand
exists when a 1 percent decrease in price produces less than a 1% increase in quantity demanded (decreasing sales revenue)
Unitary Demand
exists when the % change is identical
Total cost
total expense incurred by a firm in producing/marketing a product
fixed cost
sum of the expenses of the firm that are stable and do not change with quantity
variable cost
sum of expenses of the firm that vary with quantity
marginal analysis
people will continue to do something as long as the incramental return exceeds the incremental cost
break even analysis
analyzes the relationship between total revenue and total cost to determine profitability at various levels of output
break even point
quantity at which total revenue = total cost
skimming pricing
setting the highest initial price that customers really wanting the product are willing to pay. As the demand for the customers who really want decrease, firm decreases the price to satisfy other customers
when is skimming pricing effective
- customer willing to buy immediately
- the high initial price wont attract competitors
- lowering price only has a minor effect on increasing sales volume
- customers interpret high price as high quality
Penetration Pricing
setting low initial price to appeal immpediately to mass market
When is penetration pricing effective
- market is price sensitive
- low initial price discourages competitors
- unit production and marketing costs fall dramatically as production volumes increase
Prestige pricing
setting high price so quality concious consumers attracted to it
price lining
firm that offer a line of product may price them at a number of diff pricing points
target pricing
deliberately adjusting the consumption and features of a product to achieve the target price
standard markup pricing
adding fixed percentage to the cost of all items in a specific product class. Used when lots of products.
Cost Plus Pricing
summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at a price
Target profit pricing
set an annual target of a specific dollar volume of profit
target return on sales pricing
set typical prices that will give them a profit that is a specified precentage
customary pricing
for products where tradition/standardized channel of distribution/competitive factors dictate the price
loss-leader pricing
not to increase sales but to attract customers in hopes they will buy other products as well
one-price policy
fixed pricing- setting one price for all buyers of a product or service
Flexible price policy
dynamic pricing- involves setting different prices for products/services depending on individual buyers and purchase situations
product line pricing
the setting of prices for all items in a product line. Make product on line as a whole not neccisarily each item
Quantity discounts
reductions in unit costs for a larger order
Trade discounts
to reward wholesalers/retailers for marketing functions they will preform in future
cash discounts
to encourage retailers to pay bills quickly
trade in allowances
price reductions given when a used product is part of payment
promotional allowances
money off for undertaking certain advertising or selling activities to promote a product
Everyday low pricing
practice of replacing promotional allowances with lower manufactures list prices
price fixing
illegal. Conspiracy among firms to set prices for a prdocut
price discrimination
illegal in most cases- practice of charging different prices to different buyers.
marketing channel
individuals and firms involved in the process of making a product or service available for use or consumption
transactional function of intermediaries
intermediaries buy and sell products and services. Shares risk with the producer.
direct channel
producer and ultimate consumer deal with eachother directly
Indirect channel
intermediaries are inserted between producer/consumer. Preform numerous channel functions
dual distribution
an arrangement where a firm reaches different segments of buyers by employing 2+ different types of channels for the same basic product.
strategic channel alliance
where one firms marketing channel is used to sell another firms products
vertical marketing systems
professional managed and centrally coordinated marketing channels designed to achieve channel economies and maximum marketing impact
corporate vertical marketing system
combination of successive stages of production and distribution under a single ownership.
forward integration
firms owning intermediary at next level down
backward integration
when a retailer owns a manufacturing facilities
contractual vertical marketing system
independent product and distribution firms integrate their efforts on a contract to obtain greater marketing impact
wholesaler sponsored voluntary chains
wholesaler develops a contractual relationships with small independent retailers to standardize and coordinate buying practices
retail sponsored cooperatives
when small independent retailers form an organization that operates a wholesale facility cooperatively.
Manufacturer Sponsored- retail franchise systems
prominent in automobile. Manufacturer licenses dealers to sell item subject to various sales and service conditions.
Manufacturer Sponsored Wholesale Franchise Systems
- in soft drink industry. Where pepsi licenses wholesalers(bottlers) that purchase concentrate from pepsie and then carbonate, bottle, promote and distribute its products.
intensive distribution
firm tries to pace its products in as many outlets as possible. Usually chosed for convenience products
exclusive distribution
opposite of intensive distribution b/c the firm selects only one retailers in a specific geographical area
selective distribution
lies between intensive and exclusive. Firm selects a few retailers
channel conflict
when one channel member believes anither channel is engaged in behavior that prevents it from achieving its goals
vertical conflict
occurs between different levels in a marketing channel
disintermediation
when a channel member bypasses another
horizonal conflict
occurs between intermediaries at the same level
dual distribution
when a manufacturer distributes through its own vertically integrated channel in competition with independent wholesalers are retailers that also sell its products
retailing
all activities involved in selling renting and providing products and services to ultimate consumers
form of ownership
distinguishes outlets based on independent/corporate or contractual
level of service
describes the degree of service provided to the customer
independent retailer
owned just by an individual
corporate chain
multiple outlets under common ownership
contractual systems
involve indecently owned stores banded together like a chain
business-format franchises
like McDonalds, subway… Franchisor gives the whole layout and step by step procedures
product distribution franchises
ford dealerships, coca cola
self service
customers preform many functions during the purchase process
limited service
provide some services like credit/merchandise return
full service
provide everything to their customers
depth of product line
store carries large assortment of each item such as shoe store that offers running shoes, dress shoess…
breadth of product line
variety of different items a store carries
general merchandise stores
broad product line, limited depth
scrambled merchandising
offering several unrelated product lines in a single sotre
central business district
oldest retail setting, the communities downtown area
regional shopping centers
50-150 stores in an area
community shopping centers
20-50 smaller outlets
strip mall
composition less planned then malls
power center
huge shoopping strip with many anchor stores
shopper marketing
the use of displays coupons product samples and other brand communications to influence shopping enviroment
advertising
any paid forms of nonpersonal communication about an organization, product, servicce or idea by an identified sponsor.
personal selling
the two way flow of communications between a buyer and seller designed to influence a person’s or group’s purchase decision. Ususally face to face. No wasted coverage. Less consistent
push strategy
directing the promotional mix to channel members to gain their cooperation in ordering/storcking the product. Pushing product through channel, push to customers
pull strategy
consumers encourage retailers
precentage of sales promotion budget
funds are allocated to promotion as percentage of past or anticipated sales in terms of either dollars or units sold. Downside: lower sales shouldn’t always mean lower promotion
competitive parity
is matching the competitors absolute level of spending or the proportion per point of market share.
allyou can afford promotion budget
money allocated to promtion only after all other budget items are covered,
objective and task promition budget
Best approach. Company determines its promotion objectives, outlines the tasks it will undertake to accomplish those objective and determines the promotion cost of preforming those tasks.
lead generation
the result of an offer designed to generate interest
traffic generation
the outcome of an offer designed to motivate people to visit a business
pioneering advertisments
used in introductory stage. Tells what it is, what it can do, where to find it
Competitive advertisimnets
advertising that promotes a specific brands features and benefits. Persuade target market to buy this brand rather than other
Comparative advertising
shows one brands strength relative to those of competitors
reminder
used to reinforce previous knowledge of a product
reinforcement
assure current users they aredoing the right thing
advocacy ad
state the position of the company on an issue
Reach
number of people exposed to an ad
rating
% of households tuned in
frequency
when you reach a household
gross rating points
reach*frequency
cost per thousand
cost of reaching 1,000
wasted coverage
reach of people outside the market
buyer turnover
how often buyers enter the market
continuous advertising schedule
when seasonal factors are unimportant, advertising is run at a continuous or stead schedule thought the year
Flighting(intermittent) schedule
periods of advertising are scheduled between periods of no advertising to reflect seasonal demand
Pules (burst) schedule
a flighting schedule is combined with continuous because of increases in demand. Heavy period of promotion, or introduction of a new product.
portfolio tests
to test copy alternatives. The test ad is placed in a portfolio with several other ads and stories and consumers are asked to read through. After the subjects asked for impressions of the ads.
Jury Test
show the ad copy to a panel of consumers and having them rate how they liked it how much it drew their attention and how attractive they though it was.
Theater tests
most sophisticated. Consumers are invited to view new TV shows or movies in which test commercials are also shown viewers register their feelings about the ads either on handheld electronic recording devices used during the viewing or on questionnaires after.
coupons
sales promotions that usually offer a discounted price to a consumer
deals
short term price reductions commonly used to increase trial among potential customers
sweepstakes
sales promotion pure chance
contest
apply skills/abilities to try to win
Media richness
the degree of acoustic, visual and personal contact between two communication partners. The higher degree the greater social influence
self-disclosure
degree of self-disclosure about a person’s thoughts, feelings, likes and dislikes. Where greater self-disclosure is likely to increase ones influence on those reached.
relationship selling
the practice of building ties to customers based on a salespersons attention and commitment to customer needs
partnership selling
Buyers and sellers combine their expertise and resources to create customized solutions; commit to joint planning; and share customer, completive and company info for their mutual benefits.
lead
a person who may be a possible customer
prospect
customer who wants or needs the products
qualified prospects
if individual wants and can afford
cold canvassing
opennening directory and picking a name and contacting them
marketplace
buyers engage in face to face exchange
marketspace
internet enabled digital enviroment
do all customers swithch to generic
no 15-20% brand loyal
pharmacy impact on sale of generic drugs
pharmacy makes more off generic. disperse as written calls
what do wine brokers do
they represent vinyards in an area, liason from winery to distributor.
comodity mentality- goodyear
thought tire is just a tire. brands arent different from eachother
goodyear push strategy
limited trade ads, showcased at functions, tradeshows
Visa-Mastercard trap
thought they had either a visa or master card. Didnt look at issuer as capital one
Mcfarlane toys distrubtion channels
video stores, retail outlets, walmart, toy stores
