Ba-370 Sdsu Gaffen Exam #3

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Cost-Based Pricing Method

Back 1

Determines the final price to charge by starting with the cost

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Competition-Based Pricing Method

Back 2

Prices may be set to reflect the way they want consumers to interpret their own prices, relative to competitors' offerings

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Value-Based Pricing Method

Back 3

Sets prices that focus on the overall value of the product offering as perceived by the consumer

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Improvement Value

Back 4

Represents an estimate of how much more (or less) consumers are willing to pay for a product relative to other comparable products

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Cost of Ownership Method

Back 5

Consumers may be willing to pay more for a particular product, because over its entire lifetime, it will eventually cost less to own than a cheaper alternative

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Everyday Low Pricing (EDLP) Strategy

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Stresses continuity of retail prices at a level somewhere between the regular, nonsale price and the deep-discount sale prices their competitors may offer

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High/Low Pricing Strategy

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Relies on promotion of sales, during which prices are temporarily reduced to encourage purchases

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Reference Price

Back 8

The price against which buyers compare the actual selling price of the product and that facilitates their evaluation process

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Market Penetration Strategy

Back 9

Set the initial price low for the introduction of the new product or service.

Objective is to build sales, market share, and profits quickly.

Low market penetration price is an incentive to purchase the product immediately

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Experience Curve Effect

Back 10

As sales continue to grow, the costs continue to drop

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Price Skimming

Back 11

For consumers who are willing to pay the premium price to have the innovation first

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Pricing Strategy

Back 12

Long-term approach to setting prices broadly in an integrative effort

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Pricing Tactics

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Short-term method to focus on select components of the five C's (company, competitors, consumers, collaborators, climate)

-either a short-term response to a competitive threat or a broadly accepted method of calculating a final price for the customer that is short term in nature

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Markdowns

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Reductions retailers take on the initial selling price of the product or service

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Size Discount

Back 15

When larger quantities or packages offered to consumers are only marginally more expensive than smaller ones

Goal is to encourage consumers to purchase larger quantities each time they buy

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Seasonal Discounts

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Price reductions offered on products and services to stimulate demand during off-peak seasons

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Coupons

Back 17

Offer discount on price of specific items when they're purchased

-issued by manufacturers and retailers in newspapers, on products, on shelf, at cash register, over the Internet, and through the mail

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Rebates

Back 18

A form of discounts for consumers, the MANUFACTURER, not retailer, issues the refund as a portion of the purchase price returned to the buyer in the form of cash

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Lease

Back 19

Consumers pay a fee to purchase the right to use a product for a specific amount of time (never owning, just renting)

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Price Bundling

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Firms bundle products or services together to encourage customers to stock up so they won't purchase competing brands, to encourage trial of a new product, or to provide an incentive to purchase less desirable products or services while getting the more desirable product in the same bundle.

Cheaper to buy together than separately

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Leader Pricing

Back 21

Tactic that attempts to build store traffic by aggressively pricing and advertising a regularly purchased item, often priced at or just above the store's cost

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Price Lining

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When price floor (lowest price) and price ceiling (highest price) is set with added price points in the middle

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Cash Discount

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Reduces invoice cost if buyer pays the invoice prior to the end of the discount period

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Advertising Allowance

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Offers price reduction to channel members if they agree to feature manufacturer's product in their advertising and promotional efforts

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Slotting Allowance

Back 25

Fees paid to retailers simply to get new products into stores or to gain more or better shelf space for their products

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Quantity Discount

Back 26

Provides a reduced price according to the amount purchased. The more the buyer purchases, the higher the discount and the greater the value

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Cumulative Quantity Discount

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Uses the amount purchased over a specified time period and usually involves several transactions

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Noncumulative Quantity Discount

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Based only on the amount purchased in a single order; provides buyer with an incentive to purchase more merchandise immediately. The more you buy in one transaction, the more of a discount you receive

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Uniform Delivered Pricing Tactic

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Shipper charges one rate, no matter where the buyer is located

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Zone Pricing

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Setting different prices depending on a geographical division of the delivery areas

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Loss Leader Pricing

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Aggressively prices products and advertises by lowering price below the store's cost

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Bait-and-Switch

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Deceptive; store lures customers in with a very low price on an item (the bait), only to aggressively pressure these customers into purchasing a higher-priced model (the switch) by disparaging the low-priced item, comparing it unfavorably with higher-priced model, or professing an inadequate supply of lower-priced item

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Predatory Pricing

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Setting a very low price for product(s) with the intent to drive its competition out of business

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Price Discrimination

Back 34

Selling same product to different resellers at different prices

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Price Fixing

Back 35

Colluding with other firms to control prices

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Horizontal Price Fixing

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Competitors producing and selling competing products or services collude to control prices; eliminates competition and illegal

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Vertical Price Fixing

Back 37

Parties are different levels of same marketing channel agree to control prices passed on to consumers

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Manufacturer's Suggested Retail Price (MSRP)

Back 38

Reduce retail price competition among manufacturer's merchandise

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What are the two laws that regulate Price Discrimination?

Back 39

1. Clayton Act

2. Robinson-Patman Act

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Which law bans Price Fixing?

Back 40

Sherman-Antitrust Law

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Retailing

Back 41

Set of business activities that add value to products and services sold to consumers for their personal or family use

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Omnichannel

Back 42

A.K.A. Multichannel Strategy

Selling in more than one channel

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What do manufacturers, like Coach, use retailers for?

Back 43

Partnerships that create value by:

1. Offering broad selection of products buyers carefully chose

2. Allowing customers to see, touch, feel, and try on any item while in the store

3. Providing salesperson to help customers coordinate their outfits and a tailor to make the whole thing fit perfectly

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Distribution Intensity

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The number of channel members to use at each level of the marketing channel

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Intensive Distribution

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Placing products in as many outlets as possible

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Exclusive Distribution

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Granting exclusive geographic territories to one or very few retail customers so no other retailers in the territory can sell a particular brand

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Selective Distribution

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Relies on a few selected retail customers in a territory to sell products

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Conventional Supermarket

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Large, self-service retail food store offering groceries, meat, and produce, as well as some nonfood items such as health and beauty aids and general merchandise

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Limited-Assortment Supermarkets

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A.K.A. Extreme-Value Food Retailers

Offer one or two brands and sizes, one of which is a store brand.

Trims costs and can offer merchandise at prices 40% lower than those at conventional supermarkets

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Supercenters

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Large stores that combine a supermarket with a full-line discount store

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Warehouse Clubs

Back 51

Large retailers that offer a limited and irregular assortment of food and general merchandise, little service, and low prices to the general public and small businesses

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Convenience Stores

Back 52

Provide a limited variety of assortment of merchandise at a convenient location in 3000-5000 sq ft stores with speedy checkout

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Department Stores

Back 53

Retailers that carry a broad variety and deep assortment, offer customer services, and organize their stores into distinct departments for displaying merchandise

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Full-Line Discount Stores

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Retailers that offer a broad variety of merchandise, limited service, and low prices

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Specialty Stores

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Concentrate on a limited number of complementary merchandise categories targeted toward very specific market segments by offering deep but narrow assortments and sales associate expertise

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Drugstores

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Specialty stores that concentrate on pharmaceuticals and health and personal grooming merchandise

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Category Specialists

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A.K.A. Big-Box Retailers or Category Killers

Offer narrow but deep assortment of merchandise

Most use a predominantly self-service approach, but offer assistance to customers in some areas of the stores

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Extreme-Value Retailers

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Small, full-line discount stores that offer a limited merchandise assortment at very low prices

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Off-Price Retailers

Back 59

Offer an inconsistent assortment of brand name merchandise at a significant discount from the manufacturer's suggested retail price (MSRP)

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Service Retailers

Back 60

Firms that primarily sell services rather than merchandise

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Private-Label Brands

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A.K.A. Store Brands

Products developed and marketed by a retailer and available only from that retailer

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Exclusive Brand

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Brand that is developed by a national brand vendor, often in conjunction with a retailer, and is sold exclusively by the retailer

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Mobile Commerce (M-Commerce)

Back 63

Product and service purchases through mobile devices

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Cooperative (Co-op) Advertising

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An agreement in paying all or a portion of the advertising's production and media costs

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Share of Wallet

Back 65

Percentage of the customer's purchases made from that particular retailer

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What are the benefits of adding an Internet Channel?

Back 66

1. Deeper and broader selection made available without overcrowding in stores

2. Personalize promotions and services economically

3. Personalized customer service

4. Personalized offering for each of their customers

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Online Chats

Back 67

Improves customer service from an electronic channel so that customers can click a button at any time and participate in an instant messaging conversation with a customer service representative

Front 68

To determine how much integration is best, each retailer must address the issues such as...

Back 68

1. Integrated CRM

2. Pricing

3. Supply Chain

4. Brand Image

Front 69

One of the retailers' most fundamental activities in fulfilling the needs of the target market is to provide the ideal blend of ____ and ____.

Back 69

Merchandise; Service

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The (larger/smaller) and the (more/less) sophisticated the channel member is, the less likely it will use supply chain intermediaries.

Back 70

Larger; More

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Risk Reduction

Back 71

When customers purchase merchandise in stores, the physical presence of the stores reduces their perceived risk of buying and increases their confidence that any problems with the merchandise will be corrected

Front 72

While consumers could do most of their shopping using the Internet or catalogs, part of the allure of using the store channel to shop is that it allows consumers to talk to others. This is a function of what type of experience?

Back 72

Social Experience and Entertainment Experience

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Advertising

Back 73

Paid communication through media by a source to persuade the receiver to take action now or later on a product, service, idea, organization, etc.

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Informative Advertising

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Communication use to create and build brand awareness

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Persuasive Advertising

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Motivate consumers to take action

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Reminder Advertising

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Communication used to remind or prompt repurchases, especially for products that have gained market acceptance are in the maturity stage

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Product-Focused Advertisements

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Inform, persuade, or remind consumers about product or service

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Institutional Advertisements

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Inform, persuade, or remind consumers about issues related to places, politics, or industry

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Public Service Advertising (PSA)

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Inform, persuade, and remind consumers for the betterment of society

Generally sponsored by nonprofit institutions, civic groups, religious organizations, trade associations, or politcal groups

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Social Marketing

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Application of marketing principles to a social issue to bring about attitudinal and behavioral change among the general public or a specific population segment

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Unique Selling Proposition (USP)

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A.K.A. Value Proposition

Common theme or slogan in advertising campaign

Front 82

Informational Appeals

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Help consumers make purchase decisions by offering factual information that encourages consumers to evaluate the brand favorably on the basis of the key benefits it provides.

Front 83

Emotional Appeal

Back 83

Aims to satisfy consumers' emotional desires rather than their utilitarian needs

Front 84

Media Planning

Back 84

Process of evaluating and selecting the media mix that will deliver a clear, consistent, compelling message the intended audience

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Media Mix

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The combination of the media used and the frequency of advertising in each medium

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Media Buy

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Actual purchase of airtime or print pages

Generally the largest expense in the advertising budget

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Mass Media Channels

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Ideal for reaching large numbers of anonymous audience members

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Niche Media Channels

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Focused and generally used to reach narrower segments

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Advertising Schedule

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Specifies timing and duration of advertising

Front 90

Continuous Schedule

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Runs steadily throughout the year and therefore is suited to products and services that are consumed continually at relatively steady rates

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Flighting

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Advertising schedule implemented in spurts, with periods of heavy advertising followed by periods of no advertising

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Pulsing

Back 92

Combines continuous and flighting by mainting base level of advertising by increasing advertising intensity during certain periods

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Headline

Back 93

Large type in an ad designed to draw attention

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Subhead

Back 94

Smaller headline; provides more info about what's being advertised

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Body Copy

Back 95

Represents main text portion of ad

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Brand Elements

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Identify sponsor of ad

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Pretesting

Back 97

Assessments performed before ad campaign is implemented to ensure various elements are working in an integrated fashion and doing what they are intended to do

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Tracking

Back 98

Includes monitoring key indicators, such as daily or weekly sales volume, while the advertisement is running to shed light on any problems with the message or medium

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Posttesting

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Evaluation of the campaign's impact after it has been implemented

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Puffery

Back 100

Legal exaggeration of praise, stopping just short of deception, lavished on a product

Front 101

Public Relations (PR)

Back 101

Involves managing communications and relationships to achieve various objectives, such as building and maintaining positive relationships with the media

Front 102

Cause-Related Marketing

Back 102

Commercial activity in which businesses and charities form a partnership to market an image, product, or service for their mutual benefit

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Event Sponsorship

Back 103

Occurs when corporations support various activities, usually in cultural or sports and entertainment sectors

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Sales Promotions

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Special incentives or excitement-building programs that encourage consumers to purchase a particular product or service, typically used in conjunction with other advertising or personal selling programs

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Coupons

Back 105

Offer a discount on the price of specific items when they're purchased

Front 106

Deal

Back 106

Refers to a type of short-term price reduction

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Premium

Back 107

Offers an item for free or at bargain price to reward some type of behavior (buying, sampling, testing)

Front 108

Contest

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Brand-sponsored competition that requires some form of skill or effort

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Sweepstakes

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Offers prizes based on a chance drawing of entrants' names

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Sampling

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Offers potential customers the opportunity to try a product or service before they make a buying decision

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Loyalty Programs

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Specifically designed to retain customers by offering premiums or other incentives to customers who make multiple purchases over time

Front 112

Point-of-Purchase (POP) Displays

Back 112

Merchandise displays located at the point of purchase

Front 113

Rebates

Back 113

A type of price reduction in which a portion of purchase price is returned by the seller to the buyer in form of cash

Front 114

Product Placement

Back 114

Marketers pay to have their product included in nontraditional situations, such as in a scene in a movie or television program

Front 115

Cross-Promoting

Back 115

When 2+ firms join to reach a specific target market