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MK 201 > Test 3 > Flashcards

Test 3 Flashcards

1
Q

Price

A

the money or other considerations (including other products or services) exchanged for the ownership or use of a product or service

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2
Q

Barter

A

the practice of exchanging products and services for other products and services rather than for money

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3
Q

Value

A

ratio of perceived benefits to price

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4
Q

Value pricing

A

the practice of simultaneously increasing product benefits while maintaining or decreasing price

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5
Q

downsizing

A

decreasing contents but still remains at the same; price conscious

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6
Q

profit equation

A

profit = total revenue - total cost

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7
Q

profit equation

A

(price x quantity sold) - (fixed cost+ variable cost)

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8
Q

demand-oriented pricing approaches

A

methods to setting price that focus on demand

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9
Q

Five types of demand oriented pricing approaches

A

Skimming: high initial price
Penetration: low initial price
Prestige: high price quality or status-conscious consumers will be attracted to the product and buy it
Odd-even: setting prices a few dollars or cents under an even number
Bundle: marketing two or more products for a single package price

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10
Q

Cost-oriented pricing approaches

A

methods for setting price that stresses cost

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11
Q

Two types of cost-oriented

A

standard markup: adding a fixed percentage to the cost of all items in a specific product class
cost-plus: calculating the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at a price

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12
Q

Profit-oriented pricing approaches

A

methods for setting price that balance revenue and cost

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13
Q

three types of profit-oriented

A

target profit: setting prices to achieve a specified annual dollar amount of profit
target return-on-sales: setting prices to achieve a profit that is a specified
target return-on-investment: setting prices to achieve an annual target return on investment (ROI)

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14
Q

competition oriented pricing approaches

A

methods for setting price that focus on competition

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15
Q

three types of competition oriented pricing approaches

A

customary: setting a price that is dictated by tradition, a standardized channel of distribution, or other competitive factors

above, at ,or below-market: setting a market price for a product or product class using the average market price as the benchmark

loss-leader: selling a product below its customary price, not to increase sales, but to attract customers’ attention to it in hopes that they will buy other products with large markups as well

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16
Q

demand curve

A

a graph that relates the quantity sold and price, showing the maximum number of units that will be sold at a given price

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17
Q

price elasticity of demand

A

the percentage change in quantity demanded relative to a percentage change in price

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18
Q

elastic demand

A

a 1% price decrease generates more than 1% increase in quantity sold - increasing total revenue

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19
Q

inelastic demand

A

a 1% price decrease generates less than 1% increase in quantity sold - decreasing total revenue

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20
Q

freebie

A

:)

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21
Q

total revenue

A

the total money received from the sale of a product - the product of price and quantity

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22
Q

fixed cost

A

the sum expenses that do not change with the quantity sold

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23
Q

variable cost

A

the sum of the expenses that vary directly with the quality of a product that is produced and sold

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24
Q

unit variable cost

A

variable cost expressed on a per unit basis UVC = VC/Q

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25
Q

total cost

A

total expense incurred to produce and market a product

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26
Q

break-even analysis

A

a technique that analyzes the relationship between total revenue and total cost to determine profitability at various levels of output

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27
Q

break-even point

A

the quantity at which total revenue equals total cost - profit is zero

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28
Q

pricing objective

A

the role of price in an organization’s marketing and strategic plans

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29
Q

pricing constraint

A

a factor that limits the range of prices a firm may set

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30
Q

the five legal and ethical constraints

A

price fixing: a conspiracy among firms to set prices for a product

price discrimination: the practice of charging different prices to different. buyers for goods of like grade and quality

deceptive pricing: price deals that mislead consumers

bait and switch: when a firm offers a very low price on a product (the bait) to attract customers to a store and then tricks the customer into purchasing a higher-priced (the switch)

predatory pricing: charging a very low price for a product with the intent of driving competitors out of business

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31
Q

fixed price policy

A

one price for all buyers

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32
Q

dynamic pricing policy

A

different prices depending on buyers and situations

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33
Q

quantity discounts

A

reduction in unit price to encourage customers to buy larger quantities of a product

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34
Q

seasonal discounts

A

price reduction to encourage buyers to stock inventory earlier than their normal demand would require

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35
Q

trade(functional) discounts

A

reduction off list price offered to resellers based on their level in the channel and the marketing activities they are expected to perform

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36
Q

cash discounts

A

reduction for paying cash - typically a percentage off the list price to encourage buyers to pay their bills

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37
Q

trade-in allowances

A

price reduction given when a used product is part of the payment on a new product

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38
Q

promotional allowances

A

reductions from list price for buyers in return for undertaking specific advertising or selling actives to promote a product

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39
Q

marketing channel

A

network of individuals and firms that make a producer’s product available to end users

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40
Q

intermediary

A

an individual or firm that assist manufactures in distributing products to end users by helping promote, sell, and distribute its products

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41
Q

wholesaler

A

an intermediary who sells to other intermediaries, usually retailers

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42
Q

retailer

A

an intermediary who sells to consumers

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43
Q

agent or broker

A

an intermediary with the legal authority to act on behalf of the manufacturer - their role is to bring buyers and sellers together

44
Q

transactional functions

A

buying: purchasing products for resale or as an agent for supply of a product

selling: contacting potential customers, promoting products, and seeking orders

risk taking: assuming business risks in the ownership of inventory that can become obsolete or deteriorate

45
Q

four logistical functions

A

assorting: creating product assortments from multiple sources to serve customers

storing: assembling and protecting products at a convenient location to offer better customer service

sorting: purchasing in large quantities and breaking into smaller amounts desired by customers

transporting: moving product to customers

46
Q

three facilitating functions

A

financing: extending credit to customers

grading: inspect or testing products and assigning them quality grades

marketing, information, and research: providing information to customers and suppliers, including competitive conditions and trends

47
Q

direct channel

A

producer to consumer

48
Q

indirect channel

A

include intermediaries between the producer and consumer

49
Q

dual distribution

A

strategy of using two or more channels to reach different buyers of the same product

50
Q

strategic channel alliance

A

partnership between two firms where one sells its products through the other firm’s marketing channel

51
Q

Direct-to-consumer marketing channel

A

marketing channel that allows consumers to buy products through print or electronic media without a face-to-face meeting with a salesperson

52
Q

Multichannel marketing

A

strategy of combining mutually reinforcing communication and delivery channels to attract, retain, and build relationships, with consumers who shop traditional and online channels

53
Q

vertical marketing system

A

professionally managed, centrally coordinated marketing channel designed to achieve channel economics and maximize marketing impact

54
Q

corporate vertical marketing system

A

marketing channel formed by combining successive stages of production and distribution under a single ownership

55
Q

forward integration

A

companies looking to gain greater control over the resale of their products

56
Q

backward integration

A

companies trying to gain greater control over supply sources pursue backward integration

57
Q

administered vertical marketing system

A

marketing channel where coordination is achieved at successive stages of production and distribution by the size and influence of one channel member rather than through ownership or a contractual relationship

58
Q

profitability

A

(revenue minus cost) driven by the margins earned for each channel members

59
Q

channel conflict

A

conflict that arises when one channel member believes another channel member is engaged in behavior that prevents it from achieve its goals

60
Q

vertical conflict

A

conflict between different levels in a channel

61
Q

sources of vertical conflict

A

disintermediation: strategy of bypassing another member of a distribution channel to sell products directly to a downstream channel member

Disagreements over distribution of profit margins among channel members

Inadequate attention paid to products

62
Q

horizontal conflict

A

conflict between intermediaries at the same level in a marketing channel

63
Q

sources of horizontal conflict

A

dual distribution: strategy of using two or more channels to reach different buyers of the same product

Increased distribution intensity can result in increased competition for existing intermediaries

64
Q

Forms of influence

A

Economic: ability a firm to reward other members given its strong financial position or customer franchise

Expertise: a channel member’s skill or knowledge that benefits other channel members

Identification: value of association with a strong brand or exclusive retailer

Legitimate: contractual right of one channel member to direct the behavior of other members

65
Q

logistics

A

the activities required to move product inputs and finished products through the supply chain

66
Q

logistics management

A

the practice of organizing the cost-effect flow of raw materials, in-process, inventory, finished goods, and related information from point of origin to point of consumption to meet customer requirements

67
Q

supply chain

A

network of individuals and firms that create and deliver a product to end users includes the suppler network and marketing channel

68
Q

supplier network

A

network of individuals and firms that make raw materials, parts, and components from suppliers available to a manufacturer

69
Q

marketing channel

A

network of individuals and firms that make a producer’s product available to end users.

70
Q

supply chain management

A

the integration and organization of information and logistics activities across firms in a supply chain for the purpose of creating and delivering products that provide value to consumers

71
Q

bullwhip effect

A

the tendency for buyers at different levels of the supply chain to exaggerate the need to increase or decrease inventory in response to variation or lack of predictability in customer demand

71
Q

vendor-manage inventory (VMI)

A

an inventory management system whereby the suppliers determines the product amount and assortment a customer (such as a retailer) needs and automatically delivers the appropriate items

72
Q

reverse logistics

A

the process of reclaiming recyclable and reusable materials, returns, and reworks from the point of consumption for repair, manufacturing, redistribution, or disposal

73
Q

response supply chain

A

designed to provide the ability to quickly adapt to shifts in the market
- ship products faster
- network of decentralized warehouse reducing order cycle time
- increase inventory to reduce stock outs

74
Q

efficient supply chain

A

designed to deliver products at the lowest possible cost
- ship products inexpensive, slower
- limits its warehouse to a single warehouse increasing orders cycle time
- low levels of inventory even if stock outs occur

75
Q

channel of communication

A

medium used to transmit the message from the sender to the receiver - professional selling, advertising, public relations, sales promotions, or direct marketing

76
Q

field of experience

A

frame of reference including attitudes, values, and beliefs, that influence the way a source encodes a message or the way a receiver decodes a message

77
Q

noise

A

extraneous factors that can work against effective communication by distorting a message or the feedback received during the communication process

78
Q

promotional mix

A

the combination of communication tools to (1) inform prospective buyers about the benefits of the product, (2) persuade them to try it, and (3) remind them later about the benefits they enjoyed by using the product

79
Q

integrated marketing communications (IMC)

A

the concept of designing marketing communications programs that coordinate all promotional activities to provide a consistent message across all audiences

80
Q

advertising

A

any paid form of nonpersonal communication by an identified sponsor about an organization or product

81
Q

personal selling

A

the two-way flow of communication between a buyer and seller, often in a face-to-face encounter, designed to influence the purchase decision of a person or group

82
Q

public relations

A

a form of communication management that seeks to influence the feelings, opinion, or beliefs held by customers, prospective customers, stockholders, suppliers, employees, and other publics about a company and its products or services

83
Q

sales promotion

A

a short-term inducement of value offered to arouse interest in buying a product or service

84
Q

publicity

A

a non personal, indirectly paid presentation of an organization, product, or service

85
Q

direct marketing

A

a promotional alternative that uses direct communication with consumers to generate a response in the form of an order, a request for further information, or a visit to a retail outlet

86
Q

push strategy

A

directing the promotional mix to channel members to gain their cooperation in ordering and stocking the product

87
Q

pull strategy

A

directing the promotional mix at ultimate consumers to encourage them to ask the retailer for a product

88
Q

combination strategy

A

directing the promotional mix to channel members and consumers to create upstream and downstream demand simulation

89
Q

target audience

A

the group of prospective buyers toward which a promotion program will be directed

90
Q

hierarchy of effects

A

the sequence of states a prospective buyer goes through from initial awareness of a product to eventual action including awareness, interset, evaluation, trail and adoption of the product

91
Q

name the hierarchy of effects

A

Awareness: ability to recognize and remember a product or brand name
Interest: desire to learn about a product or brand
Evaluation: appraisal of a product or brand on important attributes
Trail: the first use of a product or brand
Adoption: repeated purchase and use of a product or brand

92
Q

percentage of sales budgeting

A

Spending is set as a percentage of past or anticipated sales.

93
Q

competitive parity budgeting

A

Spending is set to match competitors absolute spending or spending relative to market share.

94
Q

all-you-can-afford budgeting

A

Spending on promotion occurs only after all other expenses are covered.

95
Q

objective and task budgeting

A

Budget is determined by setting promotion objectives, outlining the tasks needed to accomplish those objectives, and then determining the cost of performing those tasks.

96
Q

copy

A

written or verbal message

97
Q

lead generation

A

the result of a direct marketing offer designed to generate interest in a product and request additional information

98
Q

freebie #2

A

:))

99
Q

product advertisement

A

advertisement that focuses on selling a product

100
Q

institutional advertisement

A

advertisement designed to build goodwill or a positive image for an organization rather than to promote a specific product

101
Q

Consumer-oriented sales promotions (or consumer promotions)

A

sales tools used to support a company’s advertising and personal selling directed to ultimate consumers

102
Q

premium

A

item – other than the product being marketed – offered for free or at significant savings with the purchase of the product being marketed
Encourage return purchases and increased product use

103
Q

trade-oriented sales promotions

A

sales tools used to support a company’s advertising and personal selling directed to wholesalers, retailers, or distributors

104
Q

cooperative advertising

A

advertising program where a manufacturer pays a percentage of a retailer’s local media expense for advertising a manufacturer’s products

105
Q

Advocacy

A

loyal consumers recommending brands to others

MK 201 (4 decks)

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