Chapter 13

Question 1

Profit-maximizing

Answer 1

Pricing to maximize profit (bottom line) and may sacrifice unit sales to maximize profit

Question 2

Market-share

Answer 2

Pricing to gain the greatest possible market percentage

Question 3

Cost-oriented pricing

Answer 3

Considers the cost of the product and adds a “markup” to arrive at a final cost (retail costs vs. retailer costs - make more money)

Question 4

Mark-up precentage

Answer 4

Markup/Sales Price x 100 = Markup Percentage

Question 5

Break-Even Analysis

Answer 5

Cost–Volume–Profit Relationships (losses –> breakeven point –> turn to profits)

Question 6

Pricing Strategy

Answer 6

The pricing plan is based on the marketing mix; how to price existing products (Above, below, or near market prices, Fixed vs. Dynamic Pricing for Online Business, pricing new products)

Question 7

Price Skimming

Answer 7

Setting an initially high price to cover new product costs and generate a profit

Question 8

Penetration Pricing

Answer 8

Setting an initially low price to establish a new product in the market

Question 9

Price lining

Answer 9

Setting a limited number of prices for certain categories of products

Question 10

Psychological pricing + Odd–even pricing

Answer 10

Consumers do not respond rationally to stated prices. Customers prefer items not stated in even dollar amounts

Question 11

Discounting

Answer 11

Price reduction offered as an incentive to purchase

Question 12

Promotion + key objective

Answer 12

Techniques to communicate information about products. It increases product awareness & knowledge, increases product preference, helps position products and add value, and help control/stabilize sales volume

Question 13

Push strategy

Answer 13

The firm promotes aggressively to intermediaries

Question 14

Pull strategy

Answer 14

The firm promotes directly to consumers, who demand the product from intermediaries

Question 15

The promotional mix strategies

Answer 15

The combination of tools used to promote a product; ex. advertising, personal selling, sales promotions, publicity, and public relations

Question 16

Advertising Promotions

Answer 16

Media mix; The specific communication device - television, radio, online, newspapers, direct mail, magazines, outdoor, mobile - used to carry a firm’s advertising message to potential customers

Question 17

Online consumer engagement

Answer 17

Companies are encouraging consumers to get involved and influence marketing decisions (Lays - new flavour idea, Starbucks - name a flavour, Crayola - new colour ideas)

Question 18

Personal Selling

Answer 18

Personal interaction with the customer. The most expensive form of promotion per contact. Things like real-estate and telemarketing are forms of this

Question 19

Sales Promotions

Answer 19

Short-term promotional activities designed to stimulate buying or cooperation from distributors (ex. coupons, point-of-purchase displays, purchase incentives/premiums, contests and sweepstakes, and trade shows)

Question 20

Publicity

Answer 20

Information made available to consumers via media outlets; Free, but the company has no control over it (Good or bad publicity)

Question 21

Public Relations

Answer 21

Company-influenced information aimed at building goodwill or dealing with an unfavourable event (making amends, public apologies, public service announcements)

Question 22

Intermediary

Answer 22

An entity other than the producer who distributes the product

Question 23

Wholesaler

Answer 23

An intermediary who sells products to other businesses for resale

Question 24

Retailer

Answer 24

An intermediary who sells products directly to consumers

Question 25

Distribution channel

Answer 25

The path a product follows to the end user Channel 1: Direct Distribution Channel 2: Retail Distribution Channel 3: Wholesale Distribution Channel 4: Distribution by Agents or Brokers

Question 26

Sales Agent

Answer 26

Independent intermediary, Deals in related product lines of a few producers, and Forms long-term relationships

Question 27

Broker

Answer 27

Independent intermediary, Matches numerous sellers and buyers as needed, displays many options to their client

Question 28

Intensive Distribution Strategy

Answer 28

Use as many channels and members as possible

Question 29

Selective Distribution Strategy

Answer 29

Use of a limited number of outlets

Question 30

Exclusive Distribution Strategy

Answer 30

Use of only one intermediary in a market area

Question 31

Channel Conflict

Answer 31

When members of a distribution channel disagree over the roles they should play and/or the rewards they should receive

Question 32

Types of Retail Outlets

Answer 32

Product line retailers (department stores, supermarkets, specialty stores, and category killers), Bargain retailers (discount houses, factory outlets, wholesale clubs), and convenience stores

Question 33

Non-store retailing

Answer 33

Direct-Response, Mail-Order, Telemarketing, Direct Selling (Amazon?), and Video/TV

Question 34

E-intermediaries

Answer 34

Internet-based channel members who perform one or both of two functions: 1. Collect information about sellers and present it to consumers 2. Help deliver internet products to buyers

Question 35

Physical Distribution

Answer 35

Activities needed to move a product efficiently from manufacturer to consumer

Question 36

Warehousing Operations

Answer 36

The storing of goods through the distribution process

Question 37

Transportation Modes

Answer 37

Trucks, Planes, Railroads, Water carriers, Pipelines, and Digital