Chapter 12 Flashcards
pricing
process of determining what a company will receive in exchange for its products
pricing objectives
the goals that sellers hope to achieve in pricing products
market structure
company’s percentage of the total industry sales for a specific product type
cost-oriented pricing
pricing that considers the firm’s desire to make a profit and its need to cover production costs
markup
amount added to an item’s purchased cost to sell it at a profit
variable cost
cost that changes with the quantity of a product produced and sold
fixed cost
cost that is incurred regardless of the quantity of product produced and sold
breakeven analysis
for a particular selling price, assessment of the seller’s cost versus revenues at various sales volumes
breakeven point
sales volume at which the seller’s total revenue from sales equals total costs (variable and fixed) with neither profit not loss
price skimming
setting an initially high price to cover new product costs and generate a profit
penetration pricing
setting an initially low price to establish a new product in the market
price lining
setting a limited number of prices for certain categories of products
psychological pricing
pricing tactic that takes advantage of the fact that consumers do not always respond rationally to stated prices
odd-even pricing
psychological pricing tactic based on the premise that customers prefer prices not stated in even dollar amounts
discount
price reduction offered as an incentive
distribution mix
combination of distribution channels by which a firm gets its products to end users
intermediary
individual or firm that helps to distribute a product
wholesaler
intermediary who sells products to other businesses for resale to final consumers
retailer
intermediary who sells products directly to consumers
distribution channel
network of intermediary companies through which a product passes from producer to end user
direct channel
distribution channel in which a product travels from producer to consumer without intermediaries
sales agent
independent intermediary who generally deals in the related product lines of a few producers and forms long-term relationships to represent those producers and meet the needs of many customers
broker
independent intermediary who matches numerous sellers and buyers as needed, often without knowing in advance who they will be
department store
large product-line retailer characterized by organization into specialized departments
supermarket
large product-line retailer offering a variety of food and food-related items in specialized departments
specialty store
retail store carrying one product line or category of related products
bargain retailer
retailer carrying a wide range of products at bargain prices
discount house
bargain retailer that generates large sales volume by offering goods at substantial price reductions
catalog showroom
bargain retailer in which customers place orders for catalog items to be picked up at on-premises warehouse
factory outlet
bargain retailer owned by the manufacturer whose products it sells
wholesale club
bargain retailer offering large discounts on brand-name merchandise to customers who have paid membership fees
convenience store
retail store offering easy accessibility, extended hours, and fast service
direct-response retailing
form of nonstore retailing in which firms directly interact with customers to inform them of products and to receive sales orders
mail order (catalog marketing)
form of nonstore retailing in which customers place orders for catalo merchandise received through the mail
telemarketing
form of nonstore retailing in which the telephone is used to sell directly to consumers
direct selling
form of nonstore retailing typified by door-to-door sales
shopping agent (e-agent)
e-intermediary (middleman) in the internet distribution channel that assists users in finding products and prices by does not take possession of products
electronic retailing
nonstore retailing in which information about the seller’s products and services is connected to consumers’ computers, allowing consumers to receive the information and purchase the products in the home
e-catalog
nonstore retailing in which the internet is used to display products
electronic storefront
commercial Web site at which customers gather information about products and buying opportunities, place orders, and pay for purchases
cybermall
collection of virtual storefronts (business Web sites) representing a variety of products and product lines on the internet
interactive marketing
nonstore retailing that uses a Web site to provide real-time sales and customer service
video marketing
nonstore retailing to consumers via home television
physical distribution
activities needed to move a product efficiently from manufacture to consumer
warehousing
physical distribution operation concerned with the storage of goods
private warehouse
warehouse owned by and providing store for a single company
public warehouse
independently owned and operated warehouse that stores good for many firms
promotion
aspect of the marketing mix concerned with the most effective techniques for communicating information about and selling a product
positioning
process of establishing an identifiable product image in the minds of consumers
promotional mix
combination of tools used to promote a product
advertising
promotional tool consisting of paid, nonpersonal communication used by an identified sponsor to inform an audience about a product
advertising media
variety of communication devices for carrying a seller’s message to potential customers
media mix
combination of advertising media chosen to carry a message about a product
personal selling
promotional tool in which a salesperson communicates one-on-one with potential customers
order processing
personal-selling task in which salespeople receive orders and see to their handling and delivery
creative selling
personal-selling task in which salespeople try to persuade buyers to purchase products by providing information about their benefits
missionary selling
personal-selling task in which salespeople promote their firms and products rather than try to close sales
sales promotion
short-term promotional activity designed to encourage consumer buying, industrial sales, or cooperation from distributors
coupon
sales-promotion technique in which a certificate is issued entitling the buyer to a reduced price
premium
sales-promotion technique in which offers of free or reduced-priced items are used to stimulate purchases
point-of-sale (POS) display
sales-promotion technique in which product displays are located in certain areas to stimulate purchase or to provide information on a product
trade show
sales-promotion technique in which various members of an industry gather to display, demonstrate and sell products
publicity
promotional tool in which information about a company, a product, or an event is transmitted by the general mass media to attract public attention
public relations
company-influenced information directed at building goodwill with the public or dealing with unfavorable events
