Chapter 14 Flashcards
product
in marketing, any goof or service, along with its perceived attributes and benefits, that creates value for the customer
brand
a name, design, symbol, specific colour, slogan, or any other feature that identifies a product, distinguishes it from other products, and creates a perception in the minds of consumers
trademark
a legally exclusive design, name, or other identifying mark associated with a company’s brand
brand loyalty
a customer’s preference for a particular brand that results in advocacy for that brand
master brand
a brand that is so dominant that customers think of it immediately when a product category is mentioned
manufacturer brand
a brand that is owned by a national or regional manufacturer; the products are widely distributed
dealer brand
a brand that is owned by the wholesaler or retailer rather than the manufacturer
generic brand
a brand that carries no specific name associated with a manufacturer, wholesaler, or retailer and usually comes in plain containers and sells for less than brand name products
unsought products
products that are either unknown to the potential buyer or are known but not actively sought by the buyer
convenience products
relatively inexpensive items that require little shopping effort and are purchased routinely without planning
shopping products
items that are bought after considerable planning, including brand-to-brand and store-to-store comparisons of price, suitability, and style
specialty products
items for which consumers search long and hard, and for which they refuse to accept substitutes
capital products
large, expensive items with a long lifespan that are purchased by businesses for use in making other products or providing a service
expense items
items, purchased by businesses, that are smaller and less expensive than capital products and usually have a lifespan of less than one year
product life cycle
the pattern of sales and profits over time for a product or product category; consists of an introductory stage, growth stage, maturity stage, and decline stage (that ultimately results in death of the product or product category)
profit maximization
a pricing objective that entails getting the largest possible profit from a product by producing it for as long as the revenue from selling the product exceeds the cost of producing it
target return of investment
a pricing objective where the price of a product is set so as to give the company the desired profitability in terms of return on its money
value pricing
a pricing strategy in which the target market is offered a high-quality product at a fair price and with good service
price skimming
the strategy of introducing a product with a high initial price and lowering the price over time as the product moves through its life cycle
penetration pricing
the strategy of selling new products at low prices in the hope of achieving a large sales volume
leader pricing
the strategy of pricing products below the normal markup or even below cost to attract customers to a store where they would not otherwise shop
loss leader
a product priced below cost as part of a leader pricing strategy
bundling
the strategy of grouping two or more related products together and pricing them as a single product
odd-even (psychological) pricing
the strategy of setting a price at an odd number to connote a bargain and at an even number to suggest quality
prestige pricing
the strategy of increasing the price of a product so that consumers will perceive it as being of higher quality, status, or value
break-even point (or break-even quantity)
the price at which a product’s costs are covered, so additional sales result in profit
fixed costs
costs that do not vary with different levels of output; for example, rent
variable costs
costs that change with different levels of output; for example; wages and cost of raw materials
fixed-cost contribution
the selling price per unit (revenue) minus the variable costs per unit
total revenue
the selling price per unit times the number of units sold
total cost
the sum of the fixed costs and the variable costs
total profit
total revenue minus total cost
markup pricing
a method of pricing in which a certain percentage (the markup) is added to the product’s cost to arrive at the price
activity-based costing (ABC)
ABC assigns resource costs through all the activities to either produce the product or acquire it for resale
distribution (logistics)
efficiently managing the acquisition of raw materials to the factory and the movement of products from the producer to industrial users and consumers
manufacturer
a producer; an organization that converts raw materials to finished products
distribution channel
the series of marketing entities through which goods and services pass on their way from producers to consumers
marketing intermediaries
organizations that assist in moving goods and service from producers to end users
agents
sales representatives of manufacturers and wholesalers
brokers
go-betweens that bring buyers and sellers together
industrial distributors
independent wholesalers that buy related product lines from many manufacturers and sell them to industrial users
wholesalers
companies that sell finished goods to retailers, manufacturers, and institutions
retailers
companies that sell goods to consumers and to industrial users for their own consumption
dual distribution (or multiple distribution)
two or more channels that distribute the same product to target markets
strategic channel alliances
one manufacturer using another manufacturer’s previously established channel to distribute its goods
breaking bulk
the process of breaking large shipments of similar products into smaller, more usable lots
exclusive distribution
a distribution system in which a manufacturer selects only one or two dealers in an area to market its products
selective distribution
a distribution system in which a manufacturer selects a limited number of dealers in an area (but more than one or two) to market its products
intensive distribution
a distribution system in which a manufacturer tries to sell its products wherever there are potential customers
promotion
the attempt by marketers to inform, persuade, or remind consumers and industrial users to engage in the exchange process
promotional mix
the combination of advertising, personal selling, sales promotion, and public relations used to promote a product
advertising
and paid form of non-personal presentation by an identified sponsor
personal selling
a face-to-face sales presentation to a prospective customer
sales promotions
marketing events or sales efforts - not including advertising, personal selling, and public relations - that stimulate buying
public relations
any communication or activity designed to win goodwill or prestige for a company or person
integrated marketing communications (IMC)
the careful coordination of all promotional activities - media advertising, sales promotion, personal selling, and public relations, as well as direct marketing, packaging, and other forms of promotion - to produce a consistent, unified message that is consumer focused
detailing
the physical stocking of merchandise at a retailer by the salesperson who delivers the merchandise
push strategy
a promotional strategy in which a manufacturer uses aggressive personal selling and trade advertising to convince a wholesaler or retailer to carry and sell its merchandise
pull strategy
a promotional strategy in which a manufacturer focuses on stimulating consumer demand for its product, rather than on trying to persuade wholesalers or retailers to carry the product
distribution centres
warehouses that specialize in rapid movement of goods to retail stores by making and breaking bulk
inventory control system
a system that maintains an adequate assortment of items to meet users’ or customers’ needs
