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52 Cards in this Set

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marginal analysis
focuses on the changes in total revenue and total cost from selling one more unit to find the most profitable price and quantity
marginal revenue
change in total revenue that results from the sale of one more unit of a product
marginal cost
change in total cost taht restuls from procuding one more unit
rule for maximizing profit
the highest profit is earned at the price where marginal cost is just less than or equal to marginal revenu
price leader
usually sets a price for all to follow, perhaps to mzximize profits or tto get a certain target return on investment
reference price
the rpcie they expect ot pay-for many of the products they purhcase, if firm's price is lower than a customer's refernce price, customers may view the product as a better value and demand may increase
leader pricing
meas setting some very low prices-real bargains to get customers into retail stores, sell large quantities of the ldeeader titem, but to get customers into store to buy other products
bait pricing
setting some very low prices to attract customers but trying to sell more expensive models or brands once the customer is in the store
psychological pricing
setting prices that hae speical appeal to ttarget customers (so price cuts in these ranges dotn incrase the quantity sold)
odd-even pricing
setting prices that end in certain numbers. ($24.95)
price lining
setting a few price leevels for a product line and than marking all items at these prices (20,30 , 40)
-main advantage: simplicity
-for retailers: can offer a bigger variety in each price class
-easier to get customers to make decisionwithin one price cclass
demand-backward pricing
setting an aceptable final consumer price and workgin backward to what a producer can chan ge(candy companies do this) (alter size of candy bar)
prestige pricing
setting a rather high price to suggest high quality or high status
viral marketing
current buzzword used by advertisers to describe the way a meassage can spread among Internet users
cost-based decision
relative costs should influence how to allocate the distribution activities (selling directly vs. relying on channel intermediaries)
control based decision
how mch control does manufacturer need over its channel partners
product selection-retaier benefit offerings
width and depth of assortment, quality
special services-retaier benefit offerings
home delivery, after-sales service, credit
fairness in dealings-retaier benefit offerings
return policy, honesty, correcting problems
helpful information-retaier benefit offerings
PRODUCT INFO, DEMONSTARTION, COUREOUS SALES HELP
PRICES-retaier benefit offerings
value, discount
social image -retaier benefit offerings
status, prestige
shopping atmosphere-retaier benefit offerings
comfort, safety, excitement
high-low strategy
regular price, some weeks have price cuts
everyday low price
everyday prices are low like wal-mart
width of product assortment
lots of idfferent product lines, cookie, juice, milk
depth of product assortment
ltos of products within one line, Barnes and Nobles-->lots of books
specialty stores focus on
service and depth assortment
category killers focus on
low price and deep assortment as well
deptarmetn stores focus on
wide asssortment, have beeter service than supermarkets
super markets (and drug stores) focus on
broad assortment
mass-merchansdiser focus on
similar to walmart, focus on price and brand
convenience stores
dont have width or depth , mostly only gas stations b/c they're niches were over taken by other stores
discount
buy products, buy @wholesale price, low pricing, sell alot
off price
get lower than wholesale price, some of them are defective goods
factory outlets
not selling well, will sell at outlet
warehouse clubs
lower than discount b/c act like wholesalers, sell in bulk, not piece by piece
steps of effective advertising decisions
-setting objectives
-determining advertising types
-selecting advertising media
-creacting advertsing message
-testing advertising effects
selecting advertising media steps
media has to match target market
-decide on exposure (reach, frequency) and impact
-choosing among major media types
-selecting specific media vehicles
-deciding on media timing
reach
number of peopel in the target market who are exposed to the ad campaign during a period of time
-example: 80% of the target market
frequency
how many time the average person in the target market is exposed to the message
exposure
reach x frequency
-common measure is GRP (Gross Rating Points)
-higher the GRP, higher the exposure
-% of peopele reached in target market x frequency x 100
impact
qualitative value of a message exposure through a given meidum
television advantages
good mass-market coverage; low cost per exposure; combines sight, sound, and motion
disadvantage: high absolute costs; high clutter; less audiecne selectivity
newspapers advantages
advantages: flexibble; good local coverage; timely
disadvantages: short life; poor reproduction quality; pretty local
direct mail advantages
adv: high audience selectivity; flexible; allows personalization; no ad competition within the same medium
disadvantage: relatievely hig cost per exposure; "junk mail" image
radio advanatages
advantages: good local acceptance; high geographic and demographic seleictivity; low dcost
disadvantage: audio only, low attention
magazine advnatage
high geographic and demographic selectiivey; allows details; high -quality reproduction long life; easy to reach target market
diadvantageslong ad-purchase lead time; high cost
yellopages advanatge
advanage: reach local customers seeking purchase info
disadv: many competitiors listed in the same place; hard to differentiate
outdoor (billboards) advnatnges
advanagaes: flexible; low cost; low message competitoin
diadv: littell audience selectivity; creative limitations; very short exposure
internet advantages
advantages: high audience selecitivty; interactive capabilities; immediate
disadvantages: small , demographically skwewed audience; audience controls exposure
continuity vs. pulsing timing of advertising
pulsin-advertise heavily, than stop