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102 Cards in this Set

  • Front
  • Back
money or other considerations exchanged for the ownership or use of a good or service
the ratio of perceived benefits to price; V = perceived benefits/price
Standard Markup Pricing
"X" markup price, sometimes 30-50%, Ex. Kroger
Cost-Plus Pricing
Ex. Construction companies charge a price to build a house and then add markup to it
Experience Curve Pricing
Over the lifetime of the product, the price goes down; Ex. Sony, overtime the price of the product goes down
Skimming Pricing
Charging a higher price than normal; Ex. Hitachi
Penetration Pricing
charge a low price to gain market share and plan on selling more products in the market; Ex. Samsung, trying to sell a lot, so price per unit is lower
Prestige pricing
the ability to charge higher prices; Ex. Oscar de Lo
Price lining
One price is related to the other products in the product mix
Odd-even Pricing
selling a product a few dollars or cents under an even amount
Target Pricing
Charge a set price
Bundle Pricing
Bundle things together, cars and plane tickets and hotels
Yield Management Pricing
Charge different prices at different times Ex. Airline industry
Transactional Value Function
-Buying of the product
-Ex. Medical supply company
Logistical Value Function
-Assorting: right sets of products
-Sorting: bundling products together to sell
-Ex. Grogan's
Facilitating Value Function
-Grading: evaluate the different product Ex. some distilled spirits companies
-Information and research: provide it
Direct Channel
Channel where a producer and ultimate consumers deal directly with each other

Ex. Bose, can buy Bose wave radio right from Bose
Indirect Channel
Channels where intermediaries are inserted between the producer and consumers and perform numerous channel functions

Ex. Sony: can buy it from Best Buy, not directly from Sony
Industrial Distributor
Intermediary that performs a variety of marketing channel functions, including selling, stocking and delivering a full product assortment, and financing
Dual Distribution
A firm reaches different buyers by employing two or more different types of channels for the same basic product

-Increases liklihood of firm to sell the product, generates conflict and confuses buyer
Strategic Channel Alliances
A practice wehreby one firm's marketing channel is used to sell another firm's products

Ex. Starbucks and Kraft: If go into a grocery store and buy Starbuck's, are getting that through Kraft; and General Mills products in Europe through Nestle
Manufacturer ownd distribution or retail

Ex. Polo is a manufacturer and now they have stores
Backwardly integrate into manufacturing

Ex. Kroger is primarily a retailer, but now they produce their own dairy products. They own the facility that makes the dairy product
Contractual arrangement between a parent company and an individual or firm that allows the franchisee to operate a certain type of business under an established name and according to specific rules
Intensive Distribution
A firm tries to place its products and services in as many outlets as possible

Ex. Audiovox sells in Walmart and Best Buy
Exclusive Distribution
Only one retail outlet in a specific geographical area carries the firm's products

Ex. B&O (high end Danish appliance and electronics store)
Selective Distribution
A firm selects a few retail outlets in a specific geographical area to carry its products (Ex. Can buy some type of Chicago speakers in some parts of Kentucky)
Channel Conflict
Channel memeber believes another channel member is engaged in behavior that prevents it from achieving its goals
Channel conflict that arises when a channel member bypasses another member and sells or buys products direct

Ex. Motion picture industry, go right to consumers and bypass the theater
Just-in-time (JIT) Concept
Inventory supply system that operates with very low inventories and requires fast, on-time delivery

Ex. Georgetown Toyota plant: tries to have no or very low inventories; can have a million dollars of inventory sitting in the plant or in the bank generating interest, simple
All activities involved in selling, renting, and providing goods and services to ultimate consumers for personal, family or household use
-Time: get product when I want it
Ex. The Sports Authority
-Place: get product where I want it
Ex. Wells Fargo
-Form: I get product in whatever form I want it
Ex. Polo Ralph Lauren
-Possession: Ex. Saturn
Form of Ownership
-Independent retailer: owns it's outlet
Ex. Phillip Taylor
-Corporate chain: Ex. Starbucks
-Contractual systems: Ex. Pizza Hut: most aren't owned by Pizza Hut, but by franchisees
Level of Service
-Self-service: Ex. Gas stations
-Limited service: Ex. Kroger
-Full-service: Ex. Dawahares, can go to get a full suit
Merchandise Line
Describes how many different types of products a store carries and in what assortment
Breadth of Product Line
The store carries a large assortment of each item
Breadth of Product Line
The variety of different items a store carries

Ex. Buying a battery for car, you can buy at AutoZone or Walmart. AutoZone would have depth, but Walmart would have breadth
Scrambled Merchandising
Offering several unrelated product lines in a single store

Ex. Walgreens offers greeting cards, drugs, appliances, beer, etc.
Large store(more than 200,000 square feet) that tries to sell everything, can virtually buy anything you want to buy; about twice the size of Walmart
Intertype Competition
Competition between very dissimilar gypes of retail outlets, see b/c of scrambled merchandising

Ex. Can buy an MP3 player at Best Buy and Walgreens
Using the telephone to interact with and sell directly to consumers
Retail Positioning Matrix
Matrix that positions retail outlets on 2 dimensions: breadth of product line and value added
Retailing Mix
Activities related to managing the store and the merchandise in the store
Shrinkage Pricing
Breakage and theft of merchandise by customers and employees

(big portion of theft = behind the counter)
Off-Price Retailing
Selling brand-name merchandise at lower than regular prices

Ex. TJ Max and Burlington Coat Factory
Central Business District
Oldest retail setting, usually located near community's downtown area

Ex. Downtown Lexington
Regional Shopping Centers
50 to 100 stores that typically attract customers who live or work within a 5 to 10 mile range, often containing two or three anchor stores

Ex. Fayette Mall
Community Shopping Center
1 primary store with 20 to 40 smaller stores; serves people within 10 to 20 minutes

Ex. Turfland Mall
Strip Location
Strip Mall
Power Center
Fayette Mall becoming a power center, Mall of America: 8 anchor stores and can get anything there
Wheel of Retailing
Describes how new forms of retail outlets enter the market
Integrated Marketing Communications (IMC)
Designing marketing communications programs that coordinate all promotional activities to provide a consistent message across all audiences

Ex. Web and print and TV are all consistent in how the product is marketed; Philadelphia Cream Cheese;

Ex. Target and how every season they change the colors that are important, so all colors in the store are displayed in their ads
Promotional Mix
Combination of one or more of the communication tools used to:
-Inform prospective buyers about the benefits of the product
-Persuade them to buy it
-Remind them later about the benefits they enjoyed by using the product
Paid form of non-personal communication about an organization, good, service, or idea by an identified sponsor
Advantages and Disadvantages:
Advantages: efficient reach, some targeting
Disadvantages: absolute cost, feedback
Advantages and Disadvantages:
Personal Selling
Advantages: immediate feedback, target marketing, complex information
Disadvantages: cost/exposure, message change per sales rep
Personal Selling
Two-way flow of communication between a buyer and seller, designed to influence a person's or group's purchase decision, usually in face-to-face communication between the sender and receiver
Public Relations
Communication management that seeks to influence the feelings, opinions, or beliefs
Advantages and Disadvantages:
Public Relations
Advantages: credibility
Disadvantages: limited control over media
Sales Promotion
Short-term inducement of value offered to arouse interest in buying a good or service
Advantages and Disadvantages:
Sales Promotion
Advantages: Change short-term behavior, flexible
Disadvantages: Abuse, promotion wars, duplication
Direct Marketing
Direct communication with consumers to:
-Direct Orders: generate a response in the form of an order
-Lead Generation: request for further information
-Traffic Generation: a visit to a retail outlet
Advantages and Disadvantages:
Direct Marketing
Advantages: Quick preparation, customer relationship
Disadvantages: Customer response, database management
Product Life Cycle
Introduction, Growth, Maturity, Decline
-Promotional objective: persuasion
-Promotion: personal selling
-Advertising: differentiation
-Sales Promotion: trial
-Promotional Objective: persuasion
-Advertising: remind Ex. Coca Cola right now
-Sales Promotion: discounts, coupons
Limited money invested in promotion
Push Strategy
Directing the promotional mix to channel members to gain their cooperation in ordering and stocking the product

Ex. Suave products, don't see a whole lot of Suave advertising, they are directing it at Kroger's trying to get them to buy it b/c it's a better buy for Kroger
Pull Strategy
Directing the promotional mix at ultimate consumers to encourage them to ask the retailer for a product

Ex. Head and Shoulders, P&G go into Kroger and say going to have a promotion of Head and Shoulders, so you should have it in stock, b/c going to be demanded
Any paid form of non-personal communication about an organization, good, service, or idea by an identified sponsor
Institutional Advertisements
Designed to build goodwill or an image for an organization rather than promote a specific good or service

-Pioneer: providing info about product
-Competitive: our organization is better than the others
-Reminder: emphasis on the advertising
Designing the Ad:
Information (lot of copy or text): provides a lot of information and data about product
-Persuasion: why you should buy the product
Ex. U.S. Army ads
Designing the Ad:
-Fear: do this or die
Ex. Pharmaceutical products
-Sex Appeal: Calvin Klein Ads
-Humorous Appeal: Ex. Odor eaters with shoes and airports
The number of different people or households exposed to an advertisement
The percentage of households in a market that are tuned to a particular TV show or radio station
The average number of times a person in the target audience is exposed to a message or an advertisement
Gross Rating Points (GPRs)
Percentage of the total market

Reach (expressed as a percentage of the total market) times frequency
Cost per Thousand (CPM)
Cost of reaching 1,000 individuals or households with the advertising message in a given medium
30 minute ad that takes an educational approach to communication with potential customers
(not definition)
-Out of home: consumption
-Spot: how effective is the spot advertising, ins and outs
-Wasted coverage: Ex. Dahlstrom watching Gilmore Girls, the ads aren't directed to him
Advantages and Disadvantages:
Advantages: reaches extrememly large audience; uses picture, print, sound and motion for effect; target specific audiences

Disadvantages: high cost to prepare and run ads; short exposure time and perishable message; difficult to convey complex information
Advantages and Disadvantages:
Advantages: low cost, can target specific local audiences; ads can be placed quickly; use sound, humor, and intimacy effectively

Disadvantages: no visual element; short exposure time and perishable message; difficult to convey complex information
Advantages and Disadvantages:
Advantages: can target specific audiences; high-quality color, long life of ad; ads can be clipped and saved; convey complex information

Disadvantages: long time needed to place ad; relatively high cost; competes for attention with other magazine features
Advantages and Disadvantages:
Advantages: excellent coverage of local markets; ads can be placed and changed quickly; ads can be saved; quick consumer response

Disadvantages: Ads compete for attention with other newspaper features; short life span; poor color
Advantages and Disadvantages:
Advantages: video and audio capabilities; animation can capture attention; ads can be interactive and link to advertiser

Disadvantages: animation and interactivity require large files and more time to load; effectiveness is still uncertain
Advantages and Disadvantages:
Yellow Pages
Advantages: excellent coverage of geographic segments; long use period; available 24/7

Disadvantages: proliferation of competitive directories in many markets; difficult to keep up-to-date
Advantages and Disadvantages:
Advantages: low cost; local market focus; high visibility; opportunity for repeat exposures

Disadvantages: message must be short and simple (most of the time less than 5 words, are reminding consumers to buy); low selectivity of audience; criticized as a traffic hazard
Scheduling the Ads
-Continuous: advertises all the time
Ex. Coca Cola
-Flighting: come from time to time
Ex. Ski rental place
-Pulse: certain times of the year when products are heavily advertised
Ex. Payday: October with Halloween, etc.
Practice of simultaneously increasing product and service benefits while maintaining or decreasing the price
Pricing Objectives
Sepcifying the role of price in an organization's marketing and strategic plans
Pricing Objectives
(not definition)
-Profit: long-run, current, or target return Ex. Jaguar
-Market Share: Ex. Toyota
-Unit Volume
-Survival: Ex. Chevrolet
-Social Responsibility: Ex. Hybrid
Pricing Constraints
involves factors that limit the range of prices a firm may set
Pricing Constraings
(not definition)
-Demand for the product class, product and brand
Ex. Harley charging higher price b/c demand is high
-Newness of the product: stagein the Product Life Cycle
Ex. iPod
-Single Product vs. a Product Line
Ex. New business
-Cost of Producing and Marketing the Product
Ex. Pricing of movies and where does that go (most is cost of production)
-Cost of Changing Prices and Time Period they Apply
Ex. Large appliance business
-Competitors' Prices
Ex. Linex
-Type of Competitive Markets
Ex. Coca Cola
Demand Curve
A graph relating the quantity sold and price, which shows the max. number of units that will be sold at a given price

-goes up as price goes down

-Consumer tastes
-Price availability
Total Revenue
Total revenue received from sale of a product

(price x quantity sold)
Average Revenue
Average amount of money received for selling one unit of a product or simply the price of that unit
Marginal Revenue
The change in total revenue that results from producing and marketing one additional unit
Price Elasticity of Demand
The percentage change in quantity demanded relative to a change in price
Total Cost
Total expenses incurred by a firm producing and marketing a product
Fixed Cost
the sum of the expenses of the firm that are stable and don't change with the quantity of a product that is produced and sold
Variable Cost
The sum of the expenses of a firm that vary directly with the quantity of a product that is produced and sold
Break-even Point
Where the total cost = total revenue