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55 Cards in this Set
- Front
- Back
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What is the importance of price to the seller?
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Price is revenue, profit, perceived value to target consumers
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What is the importance of price to the consumer?
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The cost of something, its value
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What are the steps in setting price?
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1. Identify pricing constraints: demand for product class & brand, newness, costs & competition, determine objectives like profit, market share & survival
2. Estimate demand & revenue: demand estimation, price elasticity estimation, revenue estimation 3. Estimate cost, volume & profit relationships: break even analysis 4. Select an approximate price level: demand-oriented approaches, cost-oriented approaches, profit-oriented, competition-oriented 5. Set list or quoted price: one price or flexible prices, company, customer & competitive effects 6. Make special adjustments to list/quoted price: discounts, allowances, geographical adjustments |
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What are the pricing objectives?
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- Profit maximization
- Sales maximization - Market share - Unit volume - Survival - Social responsibility |
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What is price skimming & what is the best time to use it?
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- Charge the highest initial price that customers really desiring a product are willing to pay
- Best time: 1. Inelastic niche 2. Unique advantages 3. Legal protection 4. Technological breakthrough 5. Blocked entry to competitors |
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What is price penetration & what is the best time to use it?
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- Charge a relatively low price for a product initially as a way to reach the mass market
- Best time: 1. Known product category 2. Lots of competition or substitute 3. Intro/maturity stage of PLC 4. Multi-segment strategy 5. Unknown brand convenience good |
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What is bundle pricing?
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The marketing of 2 or more products in a single package price
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What is a marketing channel?
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Consists of individuals & firms involved in the process of making a product/service available for use/consumption by consumers of industrial users
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What is the supply chain?
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The connected chain of all the business entities that perform or support the logistics function
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What is the manufacturer/producer's functions?
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- Make the product in large quantity
- Mostly from secondary sector= outsourced or moving back home |
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What is crowdsourcing?
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The use of the creativity & skills of Internet users & consumers at a very low cost e.g. Apple apps
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What are the wholesaler & distributor?
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The buying or handling of merchandise & subsequently reselling it to organizational users, other wholesalers & retailers:
- market coverage - holding inventory - sales support - assortment, complementary goods - breaking bulk |
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What is the retailer's function?
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The business activities involved in selling goods & services to end consumers for their personal, family or household use.
- Sorting - Complementary goods - Inventory turnover - Merchandise line - Credit & services - Personal selling |
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What are the marketing intermediaries?
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Intermediary
Wholesaler Agent/broker Retailer Distributor Dealer |
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What is a direct channel?
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Producer --> consumers
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What is a retailer channel?
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Producer --> retailers --> consumers
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What is a wholesaler channel?
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Producer --> wholesalers --> retailers --> consumers
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What is an agent/broker channel?
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Producer --> agents/brokers --> distributor --> retailers --> consumers
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What are vertical marketing systems?
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Professionally managed & centrally coordinated marketing channels designed to achieve channel function economies & maximum marketing impact
1. Corporate systems 2. Contractual systems 3. Administered systems |
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What is a corporate system?
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Combining successive stages of production & under a single ownership
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What is intensive distribution intensity?
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- Many intermediaries
- Achieve mass market selling - Convenience goods |
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What is selective distribution intensity?
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- Fewer intermediaries
- Work with selected intermediaries - Shopping & some specialty goods |
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What is exclusive distribution intensity?
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- One intermediary
- Work with single intermediary - Specialty goods & industrial equipment |
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What are the channel conflict?
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- Dumping
- Gray marketing/ diverting - Incompatible goals - Perceptual incongruity |
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What is perceptual incongruity?
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Occurs when members of the supply chain have different perceptions of reality
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What is incompatible goals?
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Occurs when achieving the goals of the supplier/retailer would hamper the performance of the other
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What is gray marketing?
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An unauthorized member of a channel who buys & sells excess merchandise to & from authorized channel members
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What is dumping?
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When a firm sells a product in a foreign country below its domestic price below its actual cost
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What is reverse logistics?
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The process of reclaiming recyclable & reusable materials, returns & reworks from the point of consumption or use for repair, remanufacturing, redistribution or disposal
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What are the main goals of retailing?
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- Attract shoppers
- Convert shoppers into consumers - Provide the best consumer service at the lowest operating costs |
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What are the forms of non-traditional retailing?
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- Direct mail & catalogue
- Television & shopping network - Online retailing - Telemarketing |
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What are the elements of retail planning?
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- Location
- Atmosphere & store layout - Brand management - Merchandise assortment & control - Marketing communication |
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What is REI?
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The longer the customer stays, the more likely he will spend money
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What is inventory turnover?
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Sales/Average inventory
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What is breadth?
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Number of different product line
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What is depth?
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Number of items within each product line
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What is intgrated marketing communication?
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The specific blend of advertising, public relations, personal selling, sales promotion, & direct-marketing tools that the company uses to persuasively communicate a consistent & unified message that is customer focused to build customer relationships
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WHat does IMC include?
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1. Target market identification
2. Communication objective(s) 3. Consistent & clear message 4. Direct and/or indirect communication channel 5. Budget 6. Evaluation & implementation plan 7. Promotional mix - Advertising - Direct marketing - Personal selling - Sales promotion - Public relations & publicity |
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What is advertising?
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Any paid form of non-personal presentation & promotion of ideas, goods, or services by an identified sponsor
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What is the criteria for efficient advertising?
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Answer the following questions:
- What is the product - What are the benefits of the product - What is the pricing and or sale promotion - Where is the product available - Who is it for |
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What is direct marketing?
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- Sending a message directly using a mass media tool
- Making direct connections with carefully targeted individual consumers to obtain an immediate response & cultivate lasting customer relationships |
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What is personal selling?
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The personal presentation by the firm's sales force for the purpose of making sales & building customer relationships
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When is personal selling important?
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- Product has a high value
- Product is custom made - Product is technically complex - There are few customers - Customers are concentrated |
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When is advertising & sales promotion more important?
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- Product has a low value
- Product is standardized - Product is simple to understand - There are many customers - Customers are geographically dispersed |
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What is sales promotion?
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Short-term incentives to encourage the customer to purchase a product or service:
- coupons - samples - contests - cash redunds - delayed payments |
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What is public relations & its importance?
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To build good relations with the company's various publics by obtaining favourable publicity, building up a good corporate image & handling or heading off unfavourable rumors, stories & events
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What are the types & benefits of sponsorship?
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- Sports
- Entertainment - Culture/Arts Benefits: - Awareness/association with event - Perceive image with target - New business - Media coverage - Sales increase in post-event period |
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What is guerilla marketing?
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- Low cost unconventional advertising strategy in a localised area or large network of individuals
- Graffiti, stickers, flash mobs - Timing, imagination & energy are important - Very good tool to promote WOM |
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What are the pros & cons of IMC?
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Pros:- Best way to guarantee success with marketing campaign
- More exposure than a traditional marketing campaign - Great for startups Cons: - Expensive - Can overkill for some marketing objectives - More planning needed to launch |
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What is exporting?
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Producing goods in one country & selling it in another
Advantages: - Least risky strategy to enter a market - Does not require multiple contacts - Great way to test a market inexpensively - Can easily withdraw from market if necessary Disadvantages: - Limited control on how the product is promoted - Only limited services can be exported |
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What are joint ventures?
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When a foreign company & a local firm invest to create a loca business
- Great for emerging markets Advantages: - Intimate access to local knowledge (labour, distribution, legal & political etc.) - Able to gain credibility in the eye of the consumer Disadvantages: - Complex contract agreement - Partner may become competitor - Confidential information is shared |
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What is licensing?
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Renting or leasing of an intangible asset
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WHat are advantages & disadvantages of licensing?
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Advantages:
- Less risky than joint venture - Rapid way to grow - Can focus on developing the brand Disadvantages: - Riskier than exporting - Complex contract negotiations - May negatively impact the brand if the licensing is done by unfavourable parties |
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What is an FDI?
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A domestic firm invests in & owns a foreign subsidiary or division, assembly facilities, manufacturing facilities etc.
Advantages: - Available on the same field as the competitors - Intimate contact with consumers, suppliers, labour & suppliers - Great strategies for complex service & products Disadvantages: - Riskiest strategy - Long term commitment necessary - Largest capital investment required - Strong knowledge of the external environments |
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What are the global options for branding & packaging?
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- One brand name everywhere
- Different brand names for different markets - Labelling - Climate considerations |
