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148 Cards in this Set
- Front
- Back
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The main advantage that marginal analysis has over most other popular pricing methods is that it:
A. Considers both fixed and variable costs. B. Takes into account the break-even point. C. Allows managers to evaluate pricing alternatives. D. Takes into account both costs and demand. E. Incorporates the markup chain. |
D. Takes into account both costs and demand.
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A seller's invoice reads: "Seller pays the cost of loading said merchandise onto a common carrier. At the point of loading, title to such products passes to the buyer, who assumes responsibility for damage in transit, except as covered by the transportation agency." This shipment has been shipped:
A. F.O.B. delivered. B. F.O.B. shipping point. C. F.O.B. mill, freight absorbed. D. F.O.B. buyer's factory. E. F.O.B. seller's factory—freight prepaid. |
B. F.O.B. shipping point.
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a transportation term meaning free on board some vehicle at some point
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F.O.B.
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According to the text, the two basic approaches to price setting are:
A. supply-oriented and demand-oriented price setting. B. cost-oriented and demand-oriented price setting. C. sales-oriented and profit-oriented price setting. D. cost-oriented and profit-oriented price setting. E. Average-cost pricing and break-even analysis. |
B. cost-oriented and demand-oriented price setting.
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Retailers of expensive heterogeneous shopping products usually have a strong need for:
A. order takers. B. technical specialists. C. merchandisers. D. order getters. E. supporting salespeople. |
D. order getters
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salespeople concerned with establishing relationships with new customers and developing new business
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order getters
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salespeople who sell to regular or established customers, complete most sales transactions, and maintain relationships with their customers
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order takers
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salespeople who help the order-oriented salespeople but don't try to get orders themselves
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supporting salespeople
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supporting salespeople who work for producers by calling on intermediaries and their customers
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missionary salespeople
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supporting salespeople who provide technical assistance to order-oriented salespeople
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technical specialists
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supporting salespeople who work with customers to resolve problems that arise with a purchase, usually after the purchase has been made
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customer service reps
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A type of sales presentation in which the salesperson develops a good understanding of the individual customer's needs before trying to close the sale
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consultative selling approach
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a personal communication between a seller and a customer who wants the seller to resolve a problem with a purchase - is often the key to building repeat business
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customer service
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direct spoken communication between sellers and potential customers, usually in person but sometimes over the telephone or even via a video conference over the Internet
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personal selling
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Any paid form of non-personal presentation of ideas, goods, or services by an identified sponsor
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advertising
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communicating with large numbers of potential customers at the same time
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mass selling
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Any unpaid form of non-personal presentation of ideas, goods, or services
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publicity
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Those promotion activities - other than advertising, publicity, and personal selling - that stimulate interest, trial, or purchase by final customers or others in the channel
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sales promotion
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Communicating information between seller and potential buyer or others in the channel to influence attitudes and behaviors
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promotion
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the intentional coordination of every communication from a firm to a target customer to convey a consistent and complete message
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integrated marketing communications
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managers concerned with managing personal selling
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sales managers
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managers of their company's mass-selling effort in television, newspapers, magazines, and other media
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advertising managers
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managers of their company's sales promotion effort
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sales promotion managers
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must weigh the pros and cons of the various promotion methods and then devise an effective promotion blend - fitting in the various departments and personalities and coordinating their efforts
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marketing managers
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3 Promotion Objectives?
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Inform, Persuade, and Remind
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This objective can show that it meets consumer needs better than other products
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informing
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This objective means the firm will try to develop a favorable set of attitudes so customers will buy, and keep buying, its product
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persuading
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This objective may be used if target customers already have positive attitudes about a firm's marketing mix - or a good relationship with a firm
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reminding
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a source trying to reach a receiver with a message
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communication process
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the source in the communication process deciding what it wants to say and translating it into words or symbols that will have the same meaning to the receiver
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encoding
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the receiver in the communication process translating the message
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decoding
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any distraction that reduces the effectiveness of the communication process
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noise
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the target of a message in the communication process, usually a potential customer
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receiver
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the sender of a message
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source
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1. Get Attention
2. Hold Interest 3. Arouse Desire 4. Obtain Action |
AIDA model
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the steps individuals go through on the way to accepting or rejecting a new idea
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adoption process
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Using normal promotion effort - personal selling, advertising, and sales promotion - to help sell the whole marketing mix to possible channel members
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pushing
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using promotion to get consumers to ask intermediaries for the product
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pulling
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the stages a new product idea goes through from beginning to end
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product life cycle
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advertising that tries to sell a specific product
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product advertising
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advertising that tries to promote an organization's image, reputation, or ideas rather than a specific product
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institutional advertising
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advertising that tries to develop primary demand for a product category rather than demand for a specific brand
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pioneering advertising
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advertising that tries to develop selective demand for a specific brand rather than a product category
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competitive advertising
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competitive advertising that aims for immediate buying action
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direct type advertising
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competitive advertising that points out product advantages - to affect future buying decisions
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indirect type advertising
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advertising that makes specific brand comparisons using actual product names
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comparative advertising
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advertising to keep the product's name before the public
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reminder advertising
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price reductions to firms in the channel to encourage them to advertise or otherwise promote the firm's products locally
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advertising allowances
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producers sharing in the cost of ads with wholesalers or retailers
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cooperative advertising
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what the words and illustrations of an ad should communicate
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copy thrust
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ads to correct deceptive advertising
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corrective advertising
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7 Advertising Objectives?
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1. Help position the firm's brand or marketing mix by informing and persuading target customers about its benefits
2. Help introduce new products to specific target markets 3. Help obtain desirable outlets and inform customers where they can buy 4. Provide ongoing contact with target customers 5. Prepare the way for salespeople by presenting the company's name and merits of its products 6. Get immediate buying action 7. Help to maintain relationships with satisfied customers and encourage purchases |
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5 Steps of Adoption Process?
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1. Awareness
2. Interest 3. Evaluation and trial 4. Decision 5. Confirmation |
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Ex: Teaser campaigns, pioneering ads, jingles/slogans, viral advertising, and announcements
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Awareness
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Ex: Informative or descriptive ads, image/celebrity ads, search ads, e-mail ads, and demonstration of benefits
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Interest
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Ex: Competitive ads, persuasive copy, comparative ads, and testimonials
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Evaluation and trial
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Ex: Direct-action retail ads, point-of-purchase ads, and price deal offers
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Decision
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Ex: Reminder ads and informative "why" ads
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Confirmation
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Advantages: Demonstrations, good attention, wide reach, can be selective
Disadvantages: Expensive in total, "clutter" |
Television and cable
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Advantages: Selected audience, flexible, can personalize
Disadvantages: Relatively expensive per contact, "junk mail," hard to retain attention |
Direct mail
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Advantages: Flexible, timely, local market
Disadvantages: May be expensive, short life, no "pass along" |
Newspaper
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Advantages: Wide reach, segmented audience, inexpensive
Disadvantages: Weak attention, many different rates, short exposure |
Radio
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Advantages: Reaches local customers seeking purchase information
Disadvantages: Many other competitors listed in same place, hard to differentiate |
Yellow Pages
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Advantages: Very targeted, good detail, good "pass along"
Disadvantages: Inflexible, long lead times |
Magazine
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Advantages: Ads link to more detailed website, some "pay for results," easier to track results
Disadvantages: Hard to compare costs with other media |
Internet
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Advantages: Flexible, repeat exposure, inexpensive
Disadvantages: "Mass market," very short exposure |
Outdoor
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4 Factors for choosing an advertising medium?
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1. Promotion objectives
2. Target markets 3. Funds 4. Nature of the media |
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small rectangular boxes that usually include text, graphics, and sometimes video to create interest
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banner ads
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Advantages of Personal Selling?
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Flexible and better feedback
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Advantages of Mass Selling?
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When target market is large and scattered, can be less expensive
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Advantages of Sales Promotion?
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Can be implemented quickly and get results sooner
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What is the overall objective of promotion?
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To reinforce present attitudes or change attitudes and behavior
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direct communication between a seller and an individual customer using a promotion method other than face-to-face personal selling
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direct-response promotion
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An approach to developing a budget - basing the budget on the job to be done
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task method
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Two Methods of Setting the Promotional Budget?
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1. Percent of sales
2. Objective task method |
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What is the first job of an advertisement?
A. Getting action B. Holding interest C. Getting attention D. Arousing desire E. Creating awareness |
C. Getting attention
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A firm that is very concerned about increases in market share should adopt a ______________ pricing objective.
A. profit-oriented B. sales-oriented C. nonprice competition D. status quo E. target return |
B. sales-oriented
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CeCe Springer works for a large cosmetics company. She calls on retailers to tell them about her firm's new products, to train the retailers' salespeople, and to set up promotion displays. Her boss actually handles the order-related activities. CeCe is:
A. an order getter. B. a manufacturers' agent. C. a technical specialist. D. an order taker. E. a missionary sales rep. |
E. a missionary sales rep.
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The sales manager of the Retro Butterfly Chair Corp. wishes to compensate his sales force in a way which will provide some security, incentive, flexibility, and control. The company should offer its sales force:
A. straight salaries. B. straight commissions. C. a combination plan. D. a value plan. E. a bonus plan. |
C. a combination plan.
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_________ are the two basic approaches to handling marketing cost allocation problems.
A. The average-cost approach and the break-even approach B. The performance-analysis approach and the sales-analysis approach C. The revenues approach and the expenses approach D. The gross margin approach and the net margin approach E. The full-cost approach and the contribution-margin approach |
E. The full-cost approach and the contribution-margin approach
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A cash discount of 3/15, net 30 means that:
A. The buyer gets a 15 percent discount off the face value of the invoice if the invoice is paid within 3 days. B. The buyer gets a 3 percent discount off the face value of the invoice if the invoice is paid within 15 days. C. The buyer makes a 3 percent down payment on the face value of the invoice within 15 days; the remainder is due in 30 days. D. The buyer gets a 3/15 (20 percent) discount if the invoice is paid within 30 days. E. None of the above. |
B. The buyer gets a 3 percent discount off the face value of the invoice if the invoice is paid within 15 days
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Merchandising aids and promotional allowances are sales promotion activities aimed at:
A. final consumers. B. company's own sales force. C. intermediaries. D. final users. E. buyers. |
C. intermediaries
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Cady ClayWorks offers its customers a 10 percent discount if they buy at least $200,000 worth of products during a year. The products may be bought in one order—or spread out over several orders. Cady ClayWorks is offering a:
A. cumulative quantity discount. B. brokerage allowance. C. seasonal discount. D. noncumulative quantity discount. E. cash discount. |
A. cumulative quantity discount
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"Cooperative" advertising refers to the practice of:
A. producers and intermediaries sharing in the cost of advertising that is done by the producer. B. producers doing some advertising and expecting their intermediaries to cooperate by providing the rest of the promotion blend. C. the producer paying for all of the advertising which is done by its intermediaries. D. wholesalers and retailers doing advertising which is partially paid for by the producer. E. wholesalers and retailers picking up the promotion theme of the producer and carrying it through. |
D. wholesalers and retailers doing advertising which is partially paid for by the producer
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A firm needs _____ to pay for short-term expenses such as employee salaries, advertising, marketing research, inventory storing costs, and what the firm owes suppliers.
A. debt financing B. current asset C. prepaid expense D. working capital E. overhead |
D. working capital
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Clearwater Office Supply sells frequently purchased office supplies to businesses in a metropolitan area. It is a well established company with a large share of the market. Its promotion should probably focus on
A. reminding. B. stimulating primary demand. C. informing. D. innovators. E. making the demand curve less elastic. |
A. reminding
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A national restaurant chain encourages its customers to use its website as a means of providing comments about their experiences at the chain's locations. This website is one way of measuring:
A. Macro-marketing effectiveness. B. The effectiveness of competition. C. Employee empowerment. D. Micro-marketing effectiveness. E. None of the above. |
D. Micro-marketing effectiveness
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Which of the following statements is FALSE?
A. Team selling involves different specialists—to handle different parts of the selling job. B. A major accounts sales force is used to sell to small retailers who are not covered by wholesalers in the channel. C. Carefully selected sales territories can reduce the cost of sales calls. D. The first step in deciding how many salespeople are needed is to estimate how much work can be done by one person in some time period. E. Telemarketing provides salespeople with many of the benefits of a personal visit—including the ability to modify the message as feedback is received. |
B. A major accounts sales force is used to sell to small retailers who are not covered by wholesalers in the channel.
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Sales promotion activities:
A. Usually have long-term effects. B. Are aimed at final consumers, but not business customers. C. Focus more on getting attention than on stimulating action by consumers. D. May be aimed at a firm's own employees. E. Usually take longer to achieve sales results than does advertising |
D. May be aimed at a firm's own employees
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Total fixed cost:
A. is the sum of all expenses which are closely related to output. B. is the sum of those costs which do not change in total no matter how much is produced. C. may vary in the short run—but is more or less fixed in the long run. D. is the sum of all costs of manufacturing and distributing a product. E. would be zero if the quantity produced were zero. |
B. is the sum of those costs which do not change in total no matter how much is produced
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A producer is likely to focus its promotion effort on stimulating primary demand at what stage in the product life cycle?
A. Market introduction B. Market growth C. Market maturity D. Sales decline E. When selective demand is over |
A. Market introduction
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Compared with sales analysis, PERFORMANCE ANALYSIS:
A. shows which customers should be dropped. B. looks for exceptions or variations from planned performance. C. does not do as much comparing against standards. D. shows how to improve performance. E. All of the above. |
B. looks for exceptions or variations from planned performance
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Leader pricing:
A. seeks a big profit on the leader items. B. is usually used for a retailer's major product line—to give it a competitive advantage. C. is different from bait pricing in that the marketing manager really expects to sell leader priced items. D. assumes that some part of the demand curve is upward sloping to the right. E. is banned in interstate commerce. |
C. is different from bait pricing in that the marketing manager really expects to sell leader priced items
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The stockturn rate is
A. the firm's ability to meet its short-term financial obligations. B. the number of days that credit sales remains in receivables. C. the number of times the average inventory is sold in a year. D. the difference between net sales and cost of goods sold. E. the ratio of sales to inventory |
C. the number of times the average inventory is sold in a year
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Order taking involves:
A. establishing relationships with new customers and developing new business. B. selling to new customers. C. seeking possible buyers with a well-organized sales presentation designed to sell a good, service, or idea. D. enhancing the relationship with the customer and getting sales in the long run. E. routinely completing sales made regularly to target customers |
E. routinely completing sales made regularly to target customers
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Decoding
A. is the process of the receiver translating the message. B. is the process of the source deciding what it wants to say. C. is the process of the source translating the message into words. D. is any distraction that reduces the effectiveness of the communication process. E. is the process of transferring information from the subordinate to the superior |
A. is the process of the receiver translating the message
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The MOST COMMON method of setting the marketing budget is to
A. let internal politics decide. B. estimate what competitors are spending. C. determine the cost of the tasks to be accomplished. D. use all uncommitted revenue. E. use some predetermined percentage of past or forecast sales |
E. use some predetermined percentage of past or forecast sales
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Which of the following is a NOT a key trend affecting marketing strategy planning?
A. Aging of the baby boomer population. B. More selling via the Internet. C. Less use of integrated marketing communications. D. More electronic bid pricing and auctions. E. More attention to quality |
C. Less use of integrated marketing communications
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When Nintendo sets a relatively low price on its game units to stimulate more demand for its game cartridges, it is using
A. complementary product pricing. B. product-bundle pricing. C. price lining. D. bait pricing. E. cost plus pricing |
A. complementary product pricing
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A reduction from list price given to retailers to get shelf space for a product is a:
A. shelf allocation. B. brokerage allowance. C. trade allowance. D. slotting allowance. E. push money allowance |
D. slotting allowance
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4 Areas of Sales Training Program?
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1. Company policies and practices
2. Product information 3. Building relationships 4. Professional selling skills |
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offers the most security for the salesperson
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straight salary
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offers the most incentive and is tied to results actually achieved
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straight commission
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Offers some security and most companies want salespeople to have some incentive to do better work
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combination plan
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an objective to get as much profit as possible
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profit maximization objective
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an objective to get some level of unit sales, dollar sales, or share of market - without referring to profit
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sales-oriented objective
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"Don't-rock-the-pricing-boat" objectives
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status quo objectives
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offering the same price to all customers who purchase products under essentially the same conditions and in the same quantities
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one-price policy
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offering the same product and quantities to different customers at different prices
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flexible-price policy
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trying to sell the whole market at one low price
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penetration pricing policy
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a list price reduction given to channel members for the job they are going to do
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trade (functional) discount
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discounts offered to encourage buyers to buy earlier than present demand requires
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seasonal discount
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reductions in price when a customer purchases a larger quantity on an individual order
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noncumulative quantity discounts
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reductions in price for larger purchases over a given period, such as a year
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cumulative quantity discounts
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Allowances given to retailers by manufacturers or wholesalers to pass on to the retailers' salesclerks for aggressively selling certain items
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push money allowances
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Allowances given to wholesalers or retailers to get shelf space for a product
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stocking allowances
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price reductions to firms in the channel to encourage them to advertise or otherwise promote the firm's products locally
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advertising allowances
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making an average freight charge to all buyers within specific geographic areas
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zone pricing
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making an average freight charge to all buyers
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uniform delivered pricing
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absorbing freight cost so that a firm's delivered price meets the nearest competitor's
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freight-absorption pricing
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a 1936 law that makes illegal any price discrimination if it injures competition
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Robinson-Patman Act
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Law that bans unfair or deceptive acts in commerce
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Wheeler Lea Amendment
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a dollar amount added to the cost of products to get the selling price
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markup
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the sequence of markups firms use at different levels in a channel - determining the price structure in the whole channel
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markup chain
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the selling price per unit minus the variable cost per unit
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fixed-cost contribution per unit
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the total cost divided by the related quantity
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average cost
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the sales quantity where the firm's total cost will just equal its total revenue
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break-even point
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What is the danger of average cost pricing?
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Doesn't consider cost variations at different levels of output
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evaluating the change in total revenue and total cost from selling one more unit to find the most profitable price and quantity
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marginal analysis
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setting prices that will capture some of what customers will save by substituting the firm's product for the one currently being used
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value in use pricing
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the price a consumer expects to pay
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reference price
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setting a few price levels for a product line and then marking all items at these prices
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price lining
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setting prices for a whole line of products
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full-line pricing
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putting marketing plans into operation
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implementation
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a detailed breakdown of a company's sales records
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sales analysis
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analysis that looks for exceptions or variations from planned performance
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performance analysis
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a number that shows the relation of one value to another
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performance index
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all costs are allocated to products, customers, or other categories
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full-cost approach
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a cost analysis approach in which all costs are not allocated in all situations
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contribution-margin approach
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money to pay for short-term expenses and what the firm owes suppliers
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working capital
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actually making goods or performing services
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production
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tailoring the principles of mass production to meet the unique needs of individual customers
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mass customization
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the categories to which various costs are charged in the normal financial accounting cycle
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natural accounts
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the categories to which various costs are charged to show the purpose for which expenditures are made
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functional accounts
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important because people outside the marketing department are affected by marketing decisions and changes
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human resources
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Steps of Marketing Cost Analysis?
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1. Reclassify all the dollar cost entries in the natural accounts into functional cost accounts
2. Reallocate to evaluate profitability of profit centers |
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What is the objective of a market directed economic system?
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Satisfy customer needs as they see them
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depends on and is relative to your level of aspiration or expectation
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satisfaction index
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