Marketing Test Three

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  1. Customer Value- Based Pricing
    • setting the price based on buyer’s perceptions of value rather than on
    • the seller’s cost
  2. Good value pricing
    offering the right combination of quality and good service at a fair price
  3. Value-added pricing
    attaching value-added features and services to differentiate a company’s offers while charging higher prices
  4. Cost based pricing
    setting prices based on the costs for producing, distributing and selling the product plus a fair rate of return for effort and risk
  5. Fixed costs
    costs that do not vary with production or sales level
  6. Variable costs
    costs that vary directly with the level of production
  7. Total costs
    the sum of the fixed and variable costs for any given level of production
  8. Cost-plus pricing(markup)
    adding a standard markup to the cost of the product
  9. break even pricing (target return)
    setting price to break even on the cost of making and marketing a product or setting price to make a target return
  10. competition based pricing
    involves setting prices based on competitors strategies costs prices and market offerings
  11. Internal
    company’s overall marketing strategy, objectives, and marketing mix
  12. External
    nature of the market, and demand and environmental factors
  13. Target costing
    pricing that starts with an ideal selling price and then target costs that will ensure that the price is met
  14. Pure competition
    the market consists of many buyers and seller trading in a uniform commodity such as wheat, copper or financial securities. No single buyer has much effect on the going market price these markets do not spend time on marketing strategy
  15. Monopolistic competition
    the market consists of many buyers and sellers who trade over a range of prices rather than a single market price. A range of prices occur bc sellers can differentiate their offers to buyers
  16. Oligopolistic markets
    the market consists of only a few large seller- Verizon, AT&T, Sprint and T-mobile control 80% of U.S. wireless service
  17. Pure monopoly
    • the market is dominated by one seller
    • Gov – U.S postal service
    • Private regulated –a power company
    • Private unregulated – De Beers Diamonds
  18. inverse relationship
    the higher the price the lower the demand
  19. price elasticity of demand
    a measure of the sensitivity of demand to change in prices
  20. inelastic
    if demand hardly changes with a small change in price
  21. elastic
    demand changes greatly with a small change in price
  22. Pricing structure
    covers different items in a line changes over time as products move through their life cycles
  23. Market skimming pricing
    setting a high price for a new product to maximum revenues layer by layer  from segments willing to pay the high price; the company makes fewer but more profitable sales
  24. Market penetration pricing
    setting a low price for a new product to attract a large number of buyers and a large market share
  25. Product line pricing
    setting price steps between various products in a product line based on cost differences between products customer evaluations of different features and competitors pricing
  26. Optional product pricing
    pricing of optional or accessory products along with a main product
  27. Captive product pricing
    setting a price product that must be used along with a  main product, such as blades for a razor or games for a videogame
  28. by-product pricing
    the company seeks a market for their by-products to help offset the costs of disposing of them
  29. product bundle pricing
    combining several product and offering the bundle at a reduced rate
  30. Discount
    a straight reduction in price purchasing made during a state period of time or in larger quantities
  31. Allowances
    a reduction from list price for buyer actions such as trade-ins or promotional as sales support
  32. Segmented pricing
    selling a product or service at 2 or more prices where the difference in price is not based on the difference in costs
  33. Psychological pricing
    pricing that considers the psychology of prices not simply the economics the price says something about the product
  34. reference pricing
    prices that buyers carry in their mind and refer to when they look at a given product
  35. promotional pricing
    temporarily pricing products below the list price and below the cost to increase short run sales
  36. Supply chain
    consists of upstream and downstream partners
  37. Upstream
    set of firms that supply the raw material components, parts,information, finances, and expertise needed to create a product or service
  38. Downstream
    the marketing channels or distribution channels that look toward a customer such as wholesalers and retailers.
  39. Value delivery network
    • a network composed of the company, suppliers, distributors,and ultimately, customer who partner to help the entire system deliver better
    • customer value
  40. information
    gathering and distributing information about consumers, producers and other actors and forces in the marketing environment needed for planning and aiding exchange
  41. contact
    finding and communicating with prospective buyers
  42. matching
    shaping offers to meet buyers needs, including activities such as manufacturing, grading, assembling, and packaging
  43. negotiation
    reaching an agreement on price and other terms so that ownership or possession can be transferred
  44. financing
    acquiring and using funds to cover the costs of the channel work
  45. risk taking
    assuming the risks of carrying out the channel work
  46. channel level
    a layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer
  47. direct marketing channel
    a marketing channel that has no intermediary levels
  48. indirect marketing channel
    a marketing channel containing one or more intermediary levels
  49. vertical conflict
    occurs between different levels of the same channel and is more common franchise holder vs. franchise dealer
  50. conventional distribution channel
    consists of one ore more independent producer, wholesaler, and retailers each a separate business seeking to maximize its own profits perhaps even at the expense of the system as a whole
  51. vertical marketing system
    structure in which producers, wholesalers, and retailers act as a unified system, One channel member owns the other has contract with them or has so much power that they all cooperate
  52. Corporate VMS
    combines successive stages of production and distribution under single ownership- channel leadership established through common ownership
  53. Contractual VMS
    independent firms at different levels of production and distribution join together through contracts to obtain more economies or sales impact than each other could achieve alone
  54. The franchise relationship
    • the most common type of contractual relationship a franchisor links several stages in the production-distribution process 
    • manufacturer-sponsored retailer franchise system ford and its network of independent franchise dealers
    • manufacturer sponsored wholesaler system- coca-cola licensed bottlers who buy syrup and then bottle and sell the finished product to retailers locally
    • service firm sponsored retailer franchise system apparel retailers fast food chains hotels and motels, great clips
  55. horizontal marketing system
    two or more companies at one level join together to follow a new marketing opportunity
  56. disintermediation
    the cutting of marketing channel intermediaries by product or service producers going directly to the final buyer or the displacement of traditional resellers by radical new types of intermediaries
  57. marketing channel design
    designing effective marketing channel by analyzing customer needs, setting channel objectives identifying major channel alternatives and evaluating those alternatives
  58. intensive distribution
    stocking the product in as many outlets as possible
  59. exclusive distribution
    giving a limited number of dealers theexclusive right to distribute the company’s products in their territories STHILand luxury brands
  60. selective distribution
    the use of more than one but fewer that all of the intermediaries who are willing to carry the company’s products
  61. marketing channel management
    selecting, managing, and motivating individual channel members and evaluating their performance over time
  62. exclusive dealing
    when the seller requires that these dealers not handle competitor’s products
  63. Outbound distribution
    moving product from factory to resellers to customer
  64. Inbound distribution
    moving product and materials from suppliers to factory
  65. Reverse distribution
    reusing, recycling, refurbishing, or disposing of broken unwanted or excess products returned by consumers or resellers
  66. Supply chain management
    managing upstream and downstream value added flows of materials, final good related information among suppliers, the company, resellers and final customers
  67. Storage warehouses
    store goods for moderate or long periods of time
  68. Distribution centers
    a large highly automated warehouse designed to receive goods from various plants and suppliers take orders fill them efficiently and deliver goods to customers as quickly as possible
  69. just-in-time inventory
    only stock a few items and new stock arrives when needed
  70. intermodal transportation
    combining 2 or more modes of transportation
  71. integrated logistics management
    concept that emphasizes teamwork – both inside the company and among all the marketing channel organizations to maximize the performance of the entire distribution system
  72. Retailing
    all the activities involved in selling goods or services directly to final consumers for their personal non business use
  73. Shopper marketing
    using point-of-sale promotions and advertising to extend brand equity to the last mile and encourage favorable in0store purchase decisions
  74. self service
    serve customers who are willing to perform their own locate compare select process to save time and money
  75. limited service
    • ex. sear’s or JCpenny offer more goods and
    • provide more sales assistance. Increased operation costs results in higher
    • prices
  76. full service
    • high end specialty stores and first class
    • department stores Nordstrom/Neiman Marcus assist customers in every phase of shopping process. Carry more services in which customer need and want more info about
  77. Specialty stores
    carry narrow product lines with deep assortments within those lines
  78. Department stores
    carry a wide variety of product lines use of store brands and single-brand designer shops to compete with specialty stores
  79. Superstore
    a store much larger than a regular supermarket that offers a large assortment of routinely purchased food products, nonfood items and services ex walmart, target
  80. Category killer
    a giant specialty store that carries a very deep assortment of a particular products ex. Best buy home depot and Pets mart
  81. Service retailer
    a retailer whose product line is actually a service ex. Hotels banks airlines colleges
  82. Discount stores
    a retail operation that sell standard merchandise at lower prices by accepting lower margins and selling higher volume ex. walmart, Kmart,target ,Costco
  83. off-price retailers
    • a retailer that buys at less than regular wholesale prices and sells at less than retail prices
    • independent of-price retailers 
    • factory outlets 
    • wharehouse clubs - SAMS costco
  84. Corporate chains
    2 or more outlets that are commonly owned and controlled
  85. Franchise
    • a contractual association between a manufacturer, wholesaler, or service organization and independent business people who buy the right to own and
    • operate one or more units in the franchise system
  86. product assortment
    should differentiate the retailer while matching the target shoppers expectation
  87. service mix
    how the store offers to help the customer
  88. store atmosphere
    the experience the customer gets when in the store
  89. Wheel of Retailing Concept
    • retailing forms begin as low-margin, low price, and low status operations. They challenge established retailers that have become fat by letting their costs and margins increase.  The new retailers’ success leads them to upgrade their facilities and offer more services. In turn, their costs increase, forcing them to increase their prices. Eventually, the new retailers
    • become like the conventional retailers they replaced.
  90. Retail Convergence
    • merging of consumers, products, prices, and
    • retailers. Means greater competition for retailers and greater difficulty in differentiating the product assortments of different types of retailers.
  91. Promotion mix
    • marketing communication mix – consists of specific blend of advertising, public relations, personal selling, sale promotion and direct
    • marketing tools that the company uses to persuasively communicate customer value and build customer relationships 5 major tools
  92. advertising
    any paid form of non personal presentation and promotion of ideas, goods, or services by an indentified sponsor
  93. sales promotion
    short-term incentive to encourage the purchase or sale of a product or service
  94. personal selling
    personal presentation by the firm’s sales force for the purpose of making sales and building customer relationships
  95. public relation
    building good relations with the company’s various publics by obtaining favorable publicity, building up a good corporate image and handling or heading of unfavorable rumors, stories and events
  96. direct marketing
    direct connections with carefully targeted individual consumers to both obtain and immediate response and cultivate lasting customer relationships
  97. integrated marketing communications
    carefully integrated and coordinated companies many communications channels to deliver a clear consistent and compelling message about the organization and its products
  98. Reminder Advertising
    important for mature products helps maintain customer relationships and keep customers thinking about the product
  99. Persuasive
    • More important as competition arises objective to build selective demand
    • - Some has become comparative advertising – where a company directly or indirectly compares its brand with competitors
  100. Affordable method
    setting the promotion budget as the level management thinks the company can afford
  101. Percentage of sale method
    setting the promotion budget at certain percentage of current or forecasted sales or as a percentage of unit sales price
  102. Objective task method
    developing the promotion budget by 1) defining specific objectives 2) determining the tasks that must be performed to achieve these objectives and 3) estimating the costs of performing these tasks. The sum of these costs is the proposed promotion budget
  103. Execution style
    the approach, style, tone, words and format used for properly conveying an advertising message
  104. Press relations or press agency
    creating and placing newsworthy information in the new media to attract attention to a person, product or service.
  105. Product publicity
    publicizing specific products
  106. Public affairs
    building and maintaining national or local community relationships
  107. Lobbying
    building or maintaining relationships with legislators and gov officials to influence legislation and regulation
  108. Investor relations
    maintaining relationships with shareholders and others in the financial community
  109. Development
    working with donors or members of nonprofit organizations to gain financial or volunteer support
Card Set:
Marketing Test Three
2014-03-26 16:36:13
marketing test three
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