Marketing Chap. 10

Card Set Information

Marketing Chap. 10
2013-12-17 13:38:37
Marketing Final

Prep for final
Show Answers:

  1. Value
    • Benefit of something to us
    • tangible, intangible
    • All about PERCEPTION
  2. Price
    exchange value of a good or service in the mkt place
  3. Influences on Price
    • Supply and demand
    • Consumers
    • Nature of Mkt
    • Channel
  4. Supply and Demand
    • quantity of a product within a mkt and demand for a particular product will effect the price.
    • high supply + low demand = low $
    • low suppl + high demand = high $
  5. Price Elasticity of Demand
    • measures effect of a price change on quantity purchased
    • Elastic (fast food)
    • Inelastic (Medicine)
  6. Elastic
    • Change in price a disproportionate change in volume 
    • Eg fast food
  7. Inelastic
    • Change in price does not have a significant impact on volume purchased 
    • Eg. Hockey tickets
  8. Monopoly
    • Single seller of a unique product
    • competition act prevents monopolies
  9. Oligopolistic Mkt
    • only a few dominant sellers of a particular product
    • no differentiation b/w products
    • competition is intense, carefully watch competitors
    • EG. ROBELUS, gas stations
  10. Monopolistic Competition
    • many competitors selling different products
    • differentiation b/c prime focus
    • usually a dominant seller 
    • application of mkt mix b/c big focus
    • eg. Nike, Sony
  11. Pure Competition
    • commodities
    • many competitors, >1000
    • Not perceived as different by consumers
    • mkt sets price, not seller
  12. Pricing Objectives
    • Maximize profits (increase investment returns)
    • Maximize sales volume
    • Establish a competitive position
  13. MSLP
    • Manufacterers Suggested List Price
    • retailer must have one in order to reference a price reduction
    • price claims can mislead if they don't refer to MSLP
  14. Bait and Switch
    advertising a product which is not readily available or not available in reasonable quantity
  15. Predatory Pricing
    • large firm intentionally lowers price to undercut all other competitors and place them in a difficult financial position and even drive them out of business
    • Suffer loses to make competitors suffer
  16. Price Fixing
    • competitors conspire to raise, lower or stabilize prices 
    • this creates a monopoly
  17. Double Ticketing
    when >1 price is on a product, company must sell product for the lowest price
  18. Channel Members
    • any org that contributes in flow of product from creation to consumer
    • mkting, sales efforts, manufacturers, suppliers, retail
    • suppliers - manufacturer - distributor - consumer
  19. Mkting Channel
    refers to all orgs channel members
  20. Total Product Costs
    raw materials, manufacturing, transportation + profit margin = total cost price
  21. How to increase profit?
    • Decrease expenses
    • improve efficiency
    • use less expensive raw materials
    • shrink the size of the product
    • relocate manufacturing facilities
  22. Psychological Pricing (odd even, prestige pricing)
    • wants consumer to purchase on emotional level, not rational thought
    • eg. 9.99 vs 10, apple = prestige
  23. Product Line
    • develop a product line rather than a single product and offer many products w/i line
    • Eg. Sony offers many TVs
  24. Optional Feature Pricing
    • Companies increase interest and spending once consumer buys
    • optional extras increase overall price
    • eg. cell phone plans, cars
  25. Captive Product Pricing
    • use a captive product which captures consumer attention
    • eg. Telus gives away TV w/ contract sign
  26. Product Bundle Packaging, Value Pricing
    • seller combines several products at same time at same price 
    • also serves to move old stock and recession
    • eg. Cell phone companies to sell phone package. McDonalds
  27. Promotional Pricing
    • temporarily lower price to get attention
    • multiple pricing used to stimulate multiple purchases
    • eg. bogo, 25% off. 2 for $10 vs single price points
  28. Geographical Pricing
    • used when variations in price affect different parts of the world
    • eg. high shipping costs, high price to absorb the cost