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102 Cards in this Set
- Front
- Back
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Price
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money or other considerations exchanged for the ownership or use of a good or service
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Value
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the ratio of perceived benefits to price; V = perceived benefits/price
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Standard Markup Pricing
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"X" markup price, sometimes 30-50%, Ex. Kroger
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Cost-Plus Pricing
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Ex. Construction companies charge a price to build a house and then add markup to it
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Experience Curve Pricing
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Over the lifetime of the product, the price goes down; Ex. Sony, overtime the price of the product goes down
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Skimming Pricing
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Charging a higher price than normal; Ex. Hitachi
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Penetration Pricing
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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
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Prestige pricing
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the ability to charge higher prices; Ex. Oscar de Lo
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Price lining
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One price is related to the other products in the product mix
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Odd-even Pricing
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selling a product a few dollars or cents under an even amount
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Target Pricing
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Charge a set price
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Bundle Pricing
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Bundle things together, cars and plane tickets and hotels
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Yield Management Pricing
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Charge different prices at different times Ex. Airline industry
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Transactional Value Function
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-Buying of the product
-Selling -Risk-taking -Ex. Medical supply company |
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Logistical Value Function
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-Assorting: right sets of products
-Sorting: bundling products together to sell -Transproting -Ex. Grogan's |
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Facilitating Value Function
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-Financing
-Grading: evaluate the different product Ex. some distilled spirits companies -Information and research: provide it |
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Direct Channel
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Channel where a producer and ultimate consumers deal directly with each other
Ex. Bose, can buy Bose wave radio right from Bose |
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Indirect Channel
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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 |
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Industrial Distributor
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Intermediary that performs a variety of marketing channel functions, including selling, stocking and delivering a full product assortment, and financing
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Dual Distribution
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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 |
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Strategic Channel Alliances
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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 |
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Forward
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Manufacturer ownd distribution or retail
Ex. Polo is a manufacturer and now they have stores |
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Backward
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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 |
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Franchising
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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
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Intensive Distribution
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A firm tries to place its products and services in as many outlets as possible
Ex. Audiovox sells in Walmart and Best Buy |
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Exclusive Distribution
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Only one retail outlet in a specific geographical area carries the firm's products
Ex. B&O (high end Danish appliance and electronics store) |
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Selective Distribution
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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)
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Channel Conflict
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Channel memeber believes another channel member is engaged in behavior that prevents it from achieving its goals
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Disintermediation
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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 |
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Just-in-time (JIT) Concept
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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 |
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Retailing
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All activities involved in selling, renting, and providing goods and services to ultimate consumers for personal, family or household use
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Utility
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-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 |
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Form of Ownership
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-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 |
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Level of Service
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-Self-service: Ex. Gas stations
-Limited service: Ex. Kroger -Full-service: Ex. Dawahares, can go to get a full suit |
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Merchandise Line
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Describes how many different types of products a store carries and in what assortment
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Breadth of Product Line
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The 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
Ex. Buying a battery for car, you can buy at AutoZone or Walmart. AutoZone would have depth, but Walmart would have breadth |
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Scrambled Merchandising
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Offering several unrelated product lines in a single store
Ex. Walgreens offers greeting cards, drugs, appliances, beer, etc. |
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Hypermarket
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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
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Intertype Competition
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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 |
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Telemarketing
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Using the telephone to interact with and sell directly to consumers
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Retail Positioning Matrix
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Matrix that positions retail outlets on 2 dimensions: breadth of product line and value added
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Retailing Mix
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Activities related to managing the store and the merchandise in the store
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Shrinkage Pricing
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Breakage and theft of merchandise by customers and employees
(big portion of theft = behind the counter) |
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Off-Price Retailing
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Selling brand-name merchandise at lower than regular prices
Ex. TJ Max and Burlington Coat Factory |
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Central Business District
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Oldest retail setting, usually located near community's downtown area
Ex. Downtown Lexington |
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Regional Shopping Centers
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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 |
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Community Shopping Center
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1 primary store with 20 to 40 smaller stores; serves people within 10 to 20 minutes
Ex. Turfland Mall |
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Strip Location
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Strip Mall
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Power Center
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Fayette Mall becoming a power center, Mall of America: 8 anchor stores and can get anything there
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Wheel of Retailing
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Describes how new forms of retail outlets enter the market
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Integrated Marketing Communications (IMC)
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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 |
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Promotional Mix
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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 |
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Advertising
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Paid form of non-personal communication about an organization, good, service, or idea by an identified sponsor
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Advantages and Disadvantages:
Advertising |
Advantages: efficient reach, some targeting
Disadvantages: absolute cost, feedback |
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Advantages and Disadvantages:
Personal Selling |
Advantages: immediate feedback, target marketing, complex information
Disadvantages: cost/exposure, message change per sales rep |
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Personal Selling
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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
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Public Relations
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Communication management that seeks to influence the feelings, opinions, or beliefs
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Advantages and Disadvantages:
Public Relations |
Advantages: credibility
Disadvantages: limited control over media |
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Sales Promotion
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Short-term inducement of value offered to arouse interest in buying a good or service
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Advantages and Disadvantages:
Sales Promotion |
Advantages: Change short-term behavior, flexible
Disadvantages: Abuse, promotion wars, duplication |
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Direct Marketing
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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 |
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Advantages and Disadvantages:
Direct Marketing |
Advantages: Quick preparation, customer relationship
Disadvantages: Customer response, database management |
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Product Life Cycle
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Introduction, Growth, Maturity, Decline
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Growth
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-Promotional objective: persuasion
-Promotion: personal selling -Advertising: differentiation -Sales Promotion: trial |
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Maturity
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-Promotional Objective: persuasion
-Advertising: remind Ex. Coca Cola right now -Sales Promotion: discounts, coupons |
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Decline
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Limited money invested in promotion
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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
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 |
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Pull Strategy
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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 |
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Advertising
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Any paid form of non-personal communication about an organization, good, service, or idea by an identified sponsor
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Institutional Advertisements
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Designed to build goodwill or an image for an organization rather than promote a specific good or service
-Advocacy -Pioneer: providing info about product -Competitive: our organization is better than the others -Reminder: emphasis on the advertising |
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Designing the Ad:
Elements |
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 |
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Designing the Ad:
Form |
-Fear: do this or die
Ex. Pharmaceutical products -Sex Appeal: Calvin Klein Ads -Humorous Appeal: Ex. Odor eaters with shoes and airports |
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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 an advertisement
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Gross Rating Points (GPRs)
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Percentage of the total market
Reach (expressed as a percentage of the total market) times frequency |
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Cost per Thousand (CPM)
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Cost of reaching 1,000 individuals or households with the advertising message in a given medium
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Infomercial
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30 minute ad that takes an educational approach to communication with potential customers
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Television
(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 -DVR -Infomercials |
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Advantages and Disadvantages:
Television |
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 |
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Advantages and Disadvantages:
Radio |
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 |
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Advantages and Disadvantages:
Magazines |
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 |
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Advantages and Disadvantages:
Newspapers |
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 |
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Advantages and Disadvantages:
Internet |
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 |
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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 |
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Advantages and Disadvantages:
Outdoor |
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 |
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Scheduling the Ads
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-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. |
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Value-Pricing
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Practice of simultaneously increasing product and service benefits while maintaining or decreasing the price
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Pricing Objectives
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Sepcifying the role of price in an organization's marketing and strategic plans
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Pricing Objectives
(not definition) |
-Profit: long-run, current, or target return Ex. Jaguar
-Sales -Market Share: Ex. Toyota -Unit Volume -Survival: Ex. Chevrolet -Social Responsibility: Ex. Hybrid |
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Pricing Constraints
(definition) |
involves factors that limit the range of prices a firm may set
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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 |
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Demand Curve
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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 |
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Total Revenue
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Total revenue received from sale of a product
(price x quantity sold) |
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Average Revenue
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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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Price Elasticity of Demand
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The percentage change in quantity demanded relative to a change in price
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Total Cost
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Total expenses incurred by a firm 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 don't 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 a firm that vary directly with the quantity of a product that is produced and sold
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Break-even Point
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Where the total cost = total revenue
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