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221 Cards in this Set
- Front
- Back
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profit
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the reward to a business firm for the risk it undertakes in offering a product for sale; the money left over after a firm's total expenses are subtracted from its total revenues
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corporate level
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top management directs overall strategy for the entire organization
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business unit
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refers to an organization that markets a set of related products to a clearly defined group of customers
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business unit level
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the level at which business unit managers set the direction for their products and markets to exploit value-creating opportunities
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functional level
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where groups of specialists actually create value for the organization
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cross-functional teams
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a small number of people from different departments in an organization who are mutually accountable to a common set of performance goals
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mission
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a statement of the organization's scope, often identifying its customers, markets, products, technology, and values
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stakeholders
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the people who are affected by what the company does and how well it performs
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organizational culture
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a set of values, ideas, and attitudes that is learned and shared among the members of an organization
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goals or objectives
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convert the mission into targeted levels of performance to be achieved, often by a specific time
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market share
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the ratio of sales revenue of the firm to the total sales revenue of all firms in the industry, including the firm itself
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competencies
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an organization's special capabilities, including skills, technologies, and resources that distinguish it from other organizations
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competetive advantage
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a unique strength relative to competitors, often based on quality, time, cost, or innovation
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quality (TQM)
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those features and characteristics of a product that influence its product cycles through benchmarking
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benchmarking
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discovering how others do something better than your own firm so you can imitate or leapfrog comptetition
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strategic marketing process
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approach whereby an organization allocates its marketing mix resources to reach its target markets
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marketing plan
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a roadmap for the marketing activities of an organization for a specified future period of time, such as one year or five years
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situation analysis
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taking stock of where the firm or product has been recently, where it is now, and where it is headed in terms of the organization's plans and the external factors adn trends affecting it
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SWOT analysis
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an acronym describing an organization's appraisal of its internal Strangths and Weaknesses and its external Opportunities and Threats
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market segmentation
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involves aggregating prospective buyers into groups, or segments, taht have common needs adn will respond similarly to a marketing action
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points of difference
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those characteristics of a product that make it superior to competetive substitutes
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marketing strategy
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the means by which a marketing goal is to be achieved, usually characterized by a specified target market and a marketing program to reach it
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marketing tactics
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detailed day-to-day operational decisions essential to the overall success of marketing strategies
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business firm
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privately owned organization that serves its customers in order to earn a profit
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nonprofit organization
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a nongovernmental organization that serves its customers but does not have profit as an organizational goal
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business portfolio analysis
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uses quantified performance measures and growth targets to analyze a firm's business units as though they were a collection of seperate investments
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SBU
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strategic business units
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SBU matrix
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vertical axis is market growth, horizontal market share
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cash cows
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sbus that typically generate large amounts of cash
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stars
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sbus with a high share of high-growth markets that may need extra cash to finance their own rapid future growth
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question marks or problem children
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SBUs with a low share of high-growth markets
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dogs
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SBUs with a low share of low-growth markets
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diversification
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a marketing strategy of developing new products and selling them in new markets
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strategic marketing process
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process of allocating marketing mix resources to reach target markets is divided 3 phases: planning, implementation, and control
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planning phase
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situation analysis, market-product focus and goal setting, adn marketing program
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planning gap
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the difference between the projection of the path to reach a new goal and the projection of the path of the results of a plan already in place
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price
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the money or other considerations exchanged for the ownership or use of a good or service
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barter
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the practice of exchangeing goods and sercvices for other goods and services rather than money
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price equation
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price = list price - (incentives + allowances) + extra fees
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value
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ratio of percieved benefits to price: perceived benefits/price
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value-pricing
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the practice of simultaneously increasing product and service benefits while maintaining or decreasing price
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profit equation
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profit = total revenue - total cost
profit = (unit price x quantity sold) |
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pricing objectives
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involve specifying the role of price ina n organization's marketing and strategic plans
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market share
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ratio of the firm's sales revenues or unit sales to those of the industry
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pricing constraints
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factors that limit the range of prices a firm may set (consumer demand)
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demand curve
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a graph relating the quantity sold and price, which shows the maximum number of units that will be sold at a given price
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demand factors
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factors that determine consumers willingness and ability to pay for goods and services
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total revenue
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TR = P x Q
total revenue = price x quantity |
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average revenue
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ar = tr/q = p
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total revenue
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the total money received from the sale of product
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average revenue
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the average amount of money received for selling one unit of a product or simply the price of that unit
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marginal revenue
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the change in total revenue that results from producing and marketing one additional unit
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marginal revenue
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MR = change in TR / 1 unit increase in Q = change in TR / change in Q
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marginal revenue
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slope of the total revenue curve
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price elasticity of demand
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measures sensitivity of consumer demand and the firm's revenues to changes in price
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price elasticity of demand
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E = percentage change in quantity demanded / percentage change in price
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elastic demand
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1% decrease in price produces more than a 1% increase in quantity
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inelastic demand
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1% decrease in price produces less than a 1% increase in quantity
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unitary demand
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% change in price is identical to % cahnge in quantity
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total cost
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TC = FC + VC
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total cost
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the total expense incurred by a firm in producing and marketing a product
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fixed cost
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the sum of the expenses of the firm that are stable and do not change with the quantity of a product that is produced and sold
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variable cost
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the sum of the expenses of the firm that vary directly with teh quantity of a product that is produced and sold
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unit variable cost
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UVC = VC / Q
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marginal analysis
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a continuing, concise trade-off of incremental costs against incremental revenues
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break-even analysis
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a technique that analyzes the relationship between total revenue and total cost to determine profitability at various levels of output
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break even point
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the quantity at which total revenue and total cost are equal
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break even point
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BEP = fixed cost / unit price - unit variable cost
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services
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intangible activities or benefits that an organization provides to consumers in exchange for money or something else of value
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four I's of services
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intangibility, inconsistency, inseperability, inventory
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idle production capacity
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when the service provider is available but there is no demand
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service continuum
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a range of what companies bring to the market from the tangible to the intangible or good-dominant to service dominant offerings
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classifications of services
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delivery, profit or nonprofit, government sponsored
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gap analysis
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asks consumers to asses their expectations and experiences on dimensions of service quality such as reliability, responsiveness, assurance, empathy
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customer contact audit
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a flowchart of the points of interaction between consumer and service provider
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internal marketing
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based on the notion that a service organization must focus on its employees, or internal market, before successful programs can be directed at customers
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capacity management
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the service component of the marketing mix must be integrated with efforts to influence customer demand. must manage availability of the offering so that demand matches capacity over the duration of the demand cycle and the organization's assets are used in ways that will maximize the ROI
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off-peak pricing
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consists of charging different prices during different times of the day or days of the week to reflect variations in demand for the service
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four common approaches to finding a price level
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demand-oriented, cost-oriented, profit-oriented, competition-oriented
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skimming pricing
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setting the highest initial price that customers really desiring the product are willing to pay. then they are lowered to hit a more price-sensitive level
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penetration pricing
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setting a low initial price on a new product to appeal immediately to the mass market
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prestige pricing
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involves setting a high price so that quality or status conscious consumer will be attracted to the product and buy it. (if price is lowered, it may lose its prestige)
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price lining
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a firm that is selling not just a single product but a line of products may price them at a number of different specific pricing points
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odd-even pricing
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setting prices a few dollars or cents below an even number
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target pricing
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estimating the price that the ultimate consumer would be willing to pay for a product, working backward through markups taken by retailers and wholesalers to determine what price is charged to wholesalers, and then deliberately adjusting the composition and features of a product to achieve the target price to consumers
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bundle pricing
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the marketing of two or more products in a single package price
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yield management pricing
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the charging of different prices to maximize revenue for a set amount of capacity at a given time
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standard markup pricing
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entails adding a fixed percentage to the cost of all items in a specific product class
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cost-plus pricing
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involves summing 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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experience curve pricing
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based on the learning effect -- as the company gains more experience creating the product, costs go down and so do prices
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target profit pricing
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a firm sets an annual target of a specific dollar volume of profit
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target return-on-sales pricing
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firms such as supermarkets us to set typical prices that will give them a profit that is a specified percentage, say, 1 percent, of the sales volume
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target return-on-sales
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= target profit / total revenue
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target return-on-investment pricing
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a method of setting prices to achieve this target
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customary pricing
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for products where tradition, a standardized channel of distribution, or other competitive factors dictate the price
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above-at-or below-market pricing
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setting a market price for a product or product class based on a subjective feel for the competitors' price or market price as the benchmark
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loss-leader pricing
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for a special promotion retail store deliberately sell a product below its customary price to attract attention
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one-price policy (fixed price)
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setting one price for all buyers
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flexible-price policy (dynamic pricing)
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involves setting different prices for products and services depending on individual buyers and purchase situations
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product-line pricing
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the setting of prices for all items in a product line (if one is underpriced, another is overpriced)
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price war
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involves successive price cutting by competitors to increase or maintain their unit sales or market share
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quantity discounts
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used to encourage customer to buy larger quantities of products, firms offer reductions in unit cost for a larger order
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trade (functional discounts)
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30/10/5 $100 -- 30% to retailers ($30) 10% to wholesalers closest to the resaler ($7), and 5% to wholesaler nearest the manufacturer
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allowaces
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trade-in and promotional
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promotional allowances
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cash payments or extra amount of free goods awarded sellers in the channel of distribution for undertaking certain advertising or selling activities to promote a product
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everyday low pricing
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the practice of replacing promotional allowances with lower manufacturer list prices
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FOB origin pricing
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seller puts the product on board, transportation costs go to buyer
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uniform delivered pricing
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price the seller quotes includes all transportation costs
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basing-point pricing
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involves selecting one or more geographical locations from which the list price for products plus freight expenses are charged to the buyer
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price fixing
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a conspiracy among firms to set prices for a product
horizontal -- two manufacturers vertical -- manufacturer and retailer |
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price dicrimination
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the practice of charging different prices to different buyers for goods of like grade and quality
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predatory pricing
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the practice of charging a very low price for a product with the intent of driving competitors out of business
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retailing
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includes all activities involved in selling, renting, and providing goods and services to ultimate customers for personal, family, or household use
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four basic consumer utilities
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time, place, form, and possession
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form of ownership
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distinguishes retail outlets based on whether individuals, corporate chains, or contractual systems own the outlet
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level of service
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the degree of service provided to the customer (self- limited and full)
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merchandise line
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how many different types of products a store carries and in what assortment
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depth of product line
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store carries a large assortment of each item
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breadth of product line
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the variety of different items a store carries
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scrambled merchandising
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offering several unrelated product lines in a single store
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hypermarket
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offer consumers everything in a single outlet, eliminating the need to stop at more than one location
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intertype competition
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competition between very dissimilar types of retail outlets, caused by hypermarkets
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telemarketing
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nonstore retailing that involves using the telephone to interact with and sell directly to consumers
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direct selling
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door-to-door retailing (mary kay and what mrs. floridia used to do
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retail positioning matrix
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a matrix developed by the MAC Group that positions retail outlets on two dimensions: breadth of product line and value added
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retailing mix
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includes activities related to managing the store and the merchandise in the store. retail pricing, store location, retail communication, and merchandise
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off-price retailing
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involves selling brand-name merchandise at lower than regular prices. excess merchandise bought by retailers at low prices
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shrinkage
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breakage and theft of merchandise by customers and employees
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central business district
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the oldest retail setting, the community's downtown area
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regional shopping centers
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large shopping areas that often contain two or three anchor stores
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community shopping center
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one primary store and about 20 to 40 smaller outlets (mall)
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strip location
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clusters of stores
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power center
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a huge shopping strip with multiple anchor stores
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retail communication
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ambiance, image, etc.
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category management
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an approach to managing the assortment of merchandise, assigns a manager with the responsibility for selecting all products that consumers in a market segment might view as substitutes for each other
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wheel of retailing
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describes how new forms of retail outlets enter the market. begin with low prices, margins, status, go higher, still higher, back to characteristics of beginning
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retail life cycle
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early growth, accelerated development, maturity, decline
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multichannel retailers
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combine many formats to offer a broader spectrum of benefits and experiences, utilized and integrate a combination of traditional store formats and nonstore formats (websites)
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promotional mix
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the combination of one or more communication tools used to inform prospective buyers, persuade them, and remind them about the benefits
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integrated marketing communications
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the concept of designing marketing communications programs that coordinate all promotional activities to provide a consistent message across all audiences
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communication
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the process of conveying a message to others and requires six elements: source, message, channel, receiver, and process off encoding and decoding
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source
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a company or person who has information to convey
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message
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the information sent by the source
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channel of communication
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means by which message is conveyed (salesperson, advertising, PR)
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receivers
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consumers who get the message
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encoding
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the process of having the sender transform an idea into a set of symbols
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decoding
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the reverse of encoding, or the process of having the receiver take a set of symbols, the message, and transform them back to an idea
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field of experience
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a mutually shared understanding and knowledge that a sender and receiver apply to a message so that it can be communicated effectively
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response
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the impact the message had on the receiver's knowledge, attitudes, or behaviors
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feedback
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the sender's interpretation of the response and indicates whether the message was decoded and understood as intended
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noise
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extraneous factors that can work against effective communication by distorting message or the feedback received
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advertising
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any paid form of nonpersonal communication about an organization, good, service, or idea by an identified sponsor
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personal selling
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the two-way flow of communication between a buyer and a seller, designed to influence a person's or group's purchase decision
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public relations
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a form of communication management that seeks to influence the feelings, opinions, or beliefs held by customers, prospective customers, stockholders, suppliers, employees, and other publics about a company and its products or services
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publicity
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a nonpersonal, indirectly paid presentation of an organization, good, or service
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sales promotion
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a short-term inducement of value offered to arouse interest in buying a good or service (coupons, etc.)
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direct marketing
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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 (catalogs, etc)
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product characteristics complexity, risk, ancillary services
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complexity: how complicated product is (technical sophistication)
Risk: financial, social, and physical ancillary services: the degree of service or support required after sale |
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push strategy
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directing the promotional mix to channel members to gain their cooperation in ordering and stocking the product
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pull strategy
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directing its promotional mix at ultimate consumers, retailers order the product from wholesalers, and thus the item is pulled through the intermediaries
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hierarchy of effects
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the sequence of stages a prospective buyer goes through from initial awareness of a product to eventual action: awareness, interest, evaluation, trial, adoption
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percentage of sales budgeting
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funds are allocated to promotion as a percentage of past or anticipated sales, in terms of either dollars or units sold
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competitive parity budgeting
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matching the competitor's absolute level of spending or the proportion per point of market share
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all-you-can-afford budgeting
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money is allocated to promotion only after all other budget items are covered
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objective and task budgeting
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the best approach to promotion, whereby the company determines its promotion objectives, outlines the tasks to accomplish these objectives, and determines the promotion cost of performing these tasks
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direct orders
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the result of offers that contain all the information necessary for a prospective buyer to make a decision to purchase and complete the transaction
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lead generation
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the result of an offer designed to generate interest in a product or service and a request for additional information
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traffic generation
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the outcome of an offer designed to motivate people to visit a business
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advertising
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any paid form of nonpersonal communication about an organization, a good, a service, or an idea by an identified sponsor
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product advertisements
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focused on selling a good or service, takes on three forms: pioneering (informational), competitive (persuasive), reminder
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institutional advertisements
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builds goodwill or an image for an organization rather than promote a specific good or service. advocacy, pioneering, competitive, reminder
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appeals in advertising
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fear: suggests that he or she can avoid some negative experience through the purchase and use of a product or service
sex:suggest to the audience that the product will increase the attractiveness of the user humorous: imply either directly or subtly that the product is more fun or exciting than competitor's offerings |
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reach
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the number of different people or households exposed to an advertisement
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rating
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the percentage of households in a market that are tuned to a particular TV show or radio station
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frequency
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the average number of times a person in the target audience is exposed to a message or advertisement
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gross rating points (GRPs)
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reach x frequency. to obtain the appropriate number of GRPs to achieve an advertising campaign's objectives, the media planner must balance reach and frequency
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cost per thousand (CPM)
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refers to the cost of reaching 1,000 individuals or households with the advertising message in a given medium
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infomercials
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program-length (30-minute) advertisements that take an educational approach to communication with potential customers
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scheduling advertising factors
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buyer turnover, purchase frequency, forgetting rate
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three basic approaches to advertising scheduling
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continuous, flighting, pulse
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pretests
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conducted before the advertisements are placed in any medium to determine whether the ad communicates the intended message or to select among alternative versions of the ad
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three forms of pretesting
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portfolio, jury (panel), theater (most sophisticated)
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full-service agency
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provides the most complete range of services for carrying out the advertising program, including market research, media selection, copy development, artwork, and production
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limited-service agencies
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specialize in one aspect of the advertising process such as providing creative services to develop the advertising copy or buying previously unpurchased media space
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in-house agencies
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made up of the company's own advertising staff may provide full services or a limited range of services
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posttests
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advertisement may go through one after it has been shown to the audience to determine whether it accomplished its intended purpose. aided recall, unaided recall, attitude tests, inquiry tests, sales tests
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consumer-oriented sales promotions
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sales tools used to support a company's advertising and personal selling (coupons, etc)
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product placement
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involves the use of a brand-name product in a movie, television show, video, or commercial for another product
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trade-oriented sales promotions
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sales tools used to support a company's advertising and personal selling directed to wholesalers, retailers, or distributors (allowances and discounts, cooperative advertising, and training of distributors' salesforces
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cooperative advertising
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encourage both better quality and greater quantity in the local advertising efforts of resellers. programs by which a manufacturer pays a percentage of the retailer's local advertising expense for advertising the manufacturer's product
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sales management
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involves planning the selling program and implementing and controlling the personal selling effort of the firm
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relationship selling
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the practice of building ties to customers based on a salesperson's attention and commitment to customer needs over time
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partnership selling
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buyers and sellers combine their expertise and resources to create customized solutions; commit to joint planning; and share customer, competitive and company information for their mutual benefit and ultimately the customer
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order taker
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processes routine orders or reorders for products that were already sold by the company. preserve an ongoing relationship with existing customers and maintain sales
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order getter
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sells in a conventional sense and identifies prospective customers, provides customers with information, persuades customers to buy, closes sales, and follows up on customers' use of a product or service
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missionary salespeople
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do not directly solicit orders but rather concentrate on performing promotional activities and introducing new products
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major account management
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the practice of using team selling to focus on important customers so as to build mutually beneficial, long-term, cooperative relationships
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workload method
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formula-based method of organizing sales force integrates the number of customers served, call frequency, call length, and available selling time to arrive at a figure for the salesforce size
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workload method
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Number of sales people = (#customers x call frequency x length of avg call) / avg amount of selling time available per year
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account management policies
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specifies who salespeople should contact, what kinds of selling and customer service activities should be engaged in, and how these activities should be carried out
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emotional intelligence
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the ability to understand one's own emotions and the emotions of people with whom one interacts with on a daily basis
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sales quota
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contains specific goals assigned to a salesperson, sales team, branch sales office, or sales district for a stated time period
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salesforce automation
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the use of these technologies to make the sales function more effective and efficient
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sales plan
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a statement describing what is to be achieved and where and how the selling effort of salespeople is the be deployed
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consultive selling
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focuses on problem identification, where the salesperson serves as an expert on problem recognition and resolution
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adaptive selling
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involves adjusting the presentation to fit the selling situation, such as knowing when to offer solutions and when to ask for more information
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need-satisfaction presentation
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selling format that emphasizes probing and listening by the salesperson to identify needs and interests of prospective buyers
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formula-selling presentation
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selling format based on the view that a presentation consists of information that must be provided in an accurate, thorough, and step-by-step manner to inform the prospect
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stimulus-response presentation
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selling format that assumes that given the appropriate stimulus by a salesperson, the prospect will buy
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personal selling process
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consists of six stages: prospecting, preapproach, approach, presentation, close, and follow-up
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team selling
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the practice of using an entire team of professionals in selling to and servicing major customers
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sales engineer
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a salesperson who specializes in identifying, analyzing, and solving customer problems and brings know-how and technical expertise to the selling situation but often does not actually sell products and services
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missionary salespeople
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do not directly solicit orders but rather concentrate on performing promotional activities and introducing new products
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order taker
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processes routine orders or reorders for products that wer already sold by the company
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order getter
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sells in a conventional sense and identifies prospective customers, provides customers with information, persuades customers to buy, closes sales, and follows up on customers' use of a product or service
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partnership selling
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buyers and sellers combine their expertise and resources to create customized solutions; commit to joint planning; and share customer, competitive, and company information for their mutual benefit, and ultimately the customer
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relationship selling
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the practice of building ties to customers based on a salesperson's attention and commitment to customer needs over time
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sales management
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involves planning the selling program and implementing and controlling the personal selling effort of the firm
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cooperative advertising
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programs by which a manufacturer pays a percentage of the retailer's local advertising expense for advertising the manufacturer's products
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product placement
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involves the use of a brand-name product in a movie, television show, video, or commercial for another product
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trade-oriented sales promtions
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sales tools used to support a company's advertising and personal selling directed to wholesalers, retailers, or distributors
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