Managing the Marketing Mix - Chapter 15 Flashcards
Value
Good quality at a fair price
Total product offer (value package):
Everything that customers evaluate when deciding whether to buy something
Product line
Group of products that are physically similar or intended for similar market. They usually face similar competition.
Product mix
The combination of product lines offered by an organized
Product differentiation
Creation of real or perceived product differences. Actual product differences are something quite small, so marketers must use a creative mix of branding, pricing, advertising, and packaging (value enhancers) to create a unique, attractive image.
What functions must packaging perform?
- Attract the buyers’ attention
- Protect the goods inside, stand up under handling & storage, be tamperproof & deter theft.
- Be easy to open & use
- Describe & give info abt the contents
- Explain the benefits of the good inside.
- Provide info on warranties, warnings, & other customer matters.
- Give some indication of price, value and uses
What is UPC short for?
Universal product codes
Universal product codes (UPCs)
They combine bar code & a preset # that gives the retailer info abt the producer’s price, size, colour & other attributes
Brand
name, or design, or combo that identifies the product of one seller or group of sellers & distinguishes them from the products of competitors
Brand equity
The value of the brand name, and associated symbols
Brand loyalty
The degree to which customers are satisfied, enjoy the brand and are committed to further purchases
Brand manager / product manager
The person in the company who has direct responsibility for one brand or one product line
Product life cycle
Theoretical model of what happens to sales & profits for a product pass over time
What are the popular objectives before developing an overall pricing strategy?
- Achieving a target return on investment or profit.
- Building traffic
- Achieving greater market share
- Creating an image
- Furthering, social objectives
What are the 3 major approaches to pricing strategy?
- Cost based
- Demand based (target costing)
- Competition based
Target costing
Designing a product so that it satisfies customers & meets the profit margins desired by the firm.
Competition-based pricing:
Pricing strategy based on what all the other competitors are doing. The price can be set at, above, or below competitors prices.
Price leadership
Strategy by which 1 or more dominant firms set pricing practices that all competitors in an industry then follow.
Break even analysis
The process used to determine profitability at various levels of sales
Break-even point formula
Total fixed cost (TFC)/ Price of 1 unit (P)-Variable Cost (VC) of 1 unit
Total Fixed Cost
All expenses that remain the same no matter how many products are made/sold
Variable costs
Change according to the level of production.
Skimming price strategy
A new product is priced high to make optimum profit while there’s little competition
Penetration price strategy
Product is priced low to attract many customers & discourage competitors
What is ELP short for?
Everyday low pricing
Everyday low pricing
Sets prices lower than competitors & doesn’t usually have special sales. Idea is to bring customers to the store whenever they want a bargain rather than waiting until there is a sale
High-low pricing strategy
Set prices that are higher then edlp stores but offer many special sales where the prices are lower than competitors
Psychological pricing
Pricing products at price points that make the product appear less expensive than it is
Demand-oriented pricing
Since diff customers are willing to pay diff prices, marketers sometimes price on the basis of customer rather demand than cost or some other calculation
Marketing intermediaries
Organizations that assist in moving products from B2B and from B2C
Called intermediaries bc they are in the middle of a series of org that join together to distribute goods from producers to consumers through the channel of distribution
Channel of distribution
A whole set of marketing intermediaries such as agents, brokers, wholesalers and retailers, that join together to transport and store goods in their path from producers to consumers
Agents and Brokers
Marketing intermediaries who bring buyers and sellers together and assist in negotiating an exchange, but don’t take title to the goods
Wholesaler
Marketing intermediary that sells to other organizations such as retailers, manufacturers, and institutions
Retailer
Organization that sells to ultimate consumers who buy for their own use
Direct channel
Some manufacturers sell directly to customers
Intensive distribution
Puts products into as many retail outlets as possible, including vending machines
Selective distribution
Distribution that sends products to only a preferred group of retailers in an area
Exclusive distribution
Distribution that sends products to only retail outlet in a given geographic area
Online retailing
Selling products to ultimate consumers online
Social commerce
Form of electronic commerce that uses social media and user contributions to assist in the online buying and selling of products
Telemarking
Sale of products by telephone
Direct selling
Selling to customers in their homes or where they work
Promotion mix
Combination of promotional tools an organization uses
What is IMC short for?
Integrated Marketing Communication
IMC
All of the promotional tools into 1 comprehensive and unified promotional strategy
Digital marketing
Promotion of products/brands via 1 or more forms of electronic media
Advertising
Paid, non-personal communication through various media by organizations and individuals who are in some way identified in the message
Personal selling
Face-to-face presentation and promotion of products, including the salesperson’s search for new prospects and follow-up service after the sale
Public Relations (PR) :
The function that evaluates public attitudes, changes policies and procedures in response to the public’s requests, and executes a program of action and info to earn public understanding and acceptance.
Publicity
Any info abt an individual, product, or organization that is distributed to the public through the media and isn’t paid for or controlled by the seller
What are the disadvantages of publicity?
- Marketers have no control over whether, how and when the media will use the story. Media isn’t obligated to use a publicity release
- Media may alter the story so its not positive
3.
Sales promotion
Promotional tool that stimulates consumer purchasing and dealer interest by means of short term activities
Direct marketing
Any activity that directly links manufacturers or intermediaries w the ultimate consumer
Word of mouth promotion
Ppl tell other ppl abt products they have purchased or services they have used
Viral marketing
Strategy that encourages ppl to pass on marketing message to others, creating exponential growth in the message’s influence
Blog
Online diary that looks like a web page but is easier to create and update
Podcasting
Distributing multimedia digital files online for downloading/streaming
Push strategy
Producer uses advertising, personalizing feelings, and all other promotional tools to convince channel members (wholesalers, retailers, etc) to stock and sell merchandise, pushing products.
Pull strategy
Heavy advertising and sales promotion efforts are direction toward consumers so that they will request the products from retailers
