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MKTG 5200
Chapter 6: The Marketing Program
| Term | Definition |
|---|---|
| the 4 P's | - product - price - place - promotion |
| marketing program | the strategic combination of the marketing mix, of which "product" receives the most attention |
| another term for the 4 P's | marketing mix |
| the general categories for products | - consumer products - business products |
| consumer product | a good or service meant for personal enjoyment, with availability and possession utility maximized |
| business product | a good or service purchased for resale, to make other goods or services, or for use in a firm's operations; dependent on derived demand |
| product line | a group of closely related goods and services |
| product mix/portfolio | a total group of goods and services offered by a company |
| variety | number of product lines offered; the "width" of a product mix |
| assortment | the depth of a product line; meant to attract various customers |
| benefits of a large product portfolio | - economies of scale - package uniformity - standardized components - sale variety distribution efficiency/acceptance - belief all products are equally good |
| unique characteristics of services | - intangibility - simultaneous production & consumption - perishability - heterogeneity - client-based relationships |
| strategic options for product newness (ascending order) | - cost reductions - repositioning - improvements/revisions - product line extensions - new product lines - new world products/disruptive innovations |
| stages of product development | - idea - screening & evaluation - development - test marketing - commercialization |
| breakeven pricing | the price point at which the costs of producing a product equal the revenue made from selling it; calculated by total fixed costs÷(unit price - unit variable costs) |
| cost-plus pricing | a strategy in which a firm sets prices based on average unit costs and its planned markup percentage; calculated by dividing average unit cost ÷(1 - markup percent as a decimal) |
| value | a customer's view of how beneficial a product is compared to another firm's products; calculated via dividing customer benefits by customer costs |
| price elasticity | customer's responsiveness or sensitivity to changes in price |
| customer churn | the number or percentage of customers lost by a firm |
| supply chain management | the coordination of activities related to the flow and transformation of supplies, products, and information; integrates operations, logistics, procurement, and marketing channels |
| supply chain | the connection and integration of all members of the marketing channel, increasing inventory turns and getting the right products to the right place at the right time by the right service & quality standards |
| contact efficiency | how well channels reduce the number of contacts necessary to exchange products |
| omnichannel | the integration of communication, products, supply chain management, payments, customer service, and more into a seamless experience for consumers |
| exclusive distribution | giving a single merchant the sole right to sell a product within a defined geographic region |
| selective distribution | giving a few merchants the rights to sell a product within a defined geographic region |
| intensive distribution | making a product available to as many merchants as possible within an area to gain as much exposure and sales as possible |
| slotting allowances | fees paid by manufacturers to get a product placed on store shelves or featured as a "choice" product on e-commerce sites |
| integrated marketing communications | the strategic, coordinated use of promotion to create a consistent message across multiple channels to ensure maximum persuasion on a firm's current and potential customers |
| AIDA model | the model for outlining promotional goals and achieving product purchases by a target market |
| what "AIDA" stands for | - Attention - Interest - Desire - Action |
| pull strategy | a firm's method of focusing their promotion on stimulating demand among final customers, who then pressure the supply chain into carrying that product |
| push strategy | a firm's method of focusing their promotion on supply chain members to motivate them to spend extra time and effort on selling the product |
| public relations | tracking public attitudes, identifying issues of concern, and developing programs to create and maintain positive relationships with stakeholders |
| personal selling | paid personal communication that attempts to inform customers about products and persuade them to purchase those products |
| economies of scale | cost advantages companies gain from increasing their productivity |
| challenges of intangible products (services) | - can't be stored - lack of inventory = trouble balancing capacity and demand - dependent on time & place - hard to evaluate pre-delivery - hard to perfectly standardize - difficult for the customer to articulate type of service |
| differential advantage | a level of differentiation that distinguishes a product from another when a firm is developing new good or services |
| the ways a firm can grow revenue | - increase prices - increase volume of products sold |
| reasons to pay attention to pricing | - revenue - easiest of the marketing mix to change - firms trying hard to discover & anticipate others' pricing strategies & tactics - biggest differentiation of commodities |
| reasons to be careful determining the markup percentages | - different firms having different cost structures - market demand |
| A price cut must be offset by-- | an increase in sales volume in order to maintain the same level of revenue |
| Instead of cutting prices, it's often better for a firm to find-- | ways to build value into the product and justify the current price |
| common pricing objectives | - profit oriented - volume oriented - market demand - market share - cash flow - competitive matching - prestige - status quo |
| situations where price elasticity is higher | - availability of substitutes - higher total expenditures - customer perception - price comparisons |
| situations where price elasticity is lower | - lack of substitutes - real or perceived necessities - complementary products - perceived benefits - situational factors - differentiation |
| When you see this card, read the highlights on page 159. | Quiz yourself on what's highlighted on how service firm's conduct yield management. |
| common base pricing strategies | - price skimming - price penetration - freemium pricing (trial before paying) - prestige pricing - value based pricing/everyday low pricing (EDLP) - competitive matching - non price strategies |
| price skimming | charging a high price to get maximize revenue from willing customers before lowering that price over time |
| common ways of adjusting base prices | - discounts - reference price - price lining - odd pricing - tiered pricing - price bundling |
| pricing techniques unique to business markets | - trade discounts - discounts and allowances - per unit/user - geographic pricing - transfer pricing (cross-unit pricing) - barter and countertrade - price discrimination |
| downsides of personal selling | - time and money costs for preparation - expensive to recruit, select, train, and motivate salespeople |
| One of the keys to using sales technology effectively is to seamlessly integrate it with-- | - customer relationship management systems - competitive intelligence - internal customer databases |
Created by:
Sunny_the_Muse
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