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Marketing 3
3
| Question | Answer |
|---|---|
| Barter | exchanging products and services for other products and services, rather than for money |
| Price | the money or other considerations exchanged for thr ownership or use of a product or service. |
| Final price = | list price - (Incentives + allowances) + extra fees |
| Value | the ratio of percieved benifits to price; or value = (perceived benifits divided by price) |
| Value Pricing | the practice of simultaniously increasing product and service benifits while maintaining or decreasing price. (walmart everyday low pricing) |
| The profit equation: Profit= | (Unit price x quanitity sold) - (fixed cost + variable cost) |
| Steps in setting price (figure 13-2) | 1. Identifying pricing objectives and constraints 2. Estimate demand and revenue 3. Determine cost, volume, and profit relationships |
| Pricing objectives | the role of price in an orgs marketing and strategic plans |
| Pricing Objectives may be: | Profit, Sales Revenue, Market Share (%), Unit volume(#), survival, social responsibility |
| Market share | will be a percentage |
| Unit volume | a. number |
| Pricing Constraints | factors that limit the range of prices a firm may set (Cost of producing and markering the product Profit for channel members Cost of changing prices and the time period they apply Single product versus a product line Competitors prices and consumers |
| Demand Curve | a graph relating the quantity sold and price at which shows the maximum naumber of units |
| Demand Factors and Examples | determine consumers willingness and ability to pay for peoducts and services Examples: Consumer tastes, Price and Availability of similar products, Consumer income. |
| price elasticitty of demand | the percentage change in quantity demand relative to a percentage change in price |
| Elastic | if you put them on sale ppl buy more. Change in price=change in amount of ppl who buy. *Gas and baby items* will be bought no matter the cost. Has many substitutes. When 1% price decrease generates more than a 1% quantity increase |
| Inelastic | When 1% price decrease produces less than 1 % quantity increase |
| Inelastic examples | gasoline and baby products (gonna buy regardless of what happens to cost). Neccessities are price inelastic |
| Total Revenue | total money recieved from sale of product. TR= Price x Quantity |
| Total Cost | total expense spent by a firm for peroducing a product. sum of fixed cost and variable cost. |
| Fixed cost | stuff that stays the same for the most part. (rent, salary, insurance) |
| variable cost | things that vary or change. (hourly labor wages) |
| Break even analysis | technique that analyzes the relationship btwn total revenue and total cost to determine profitability at various levels of outupt. |
| Marketing Channel: | consists of individual and firms involved in the process of making a product or service available for use or sonsumption by consumers or industrial users. (Mvmnt of product from where it’s made to where it’s sold) |
| Intermediaries | The in between stages of place. |
| Transactional Function | : Buy, Sell, take on Risk. (You’ve made your product, somebody buys it for you and then they sell it. Once they buy it you have no control over what they do with it.) |
| Logistical Function: | Assort, Store, Sorting, Transporting. (Buy assortment of food from food manufacturers, bring it to their facility, break it down into smaller packages and transport it to stores) |
| Facilitating Function: | Financing, Grading, Marketing info and research. (Extend credit to customers, assigning products quality grades, providing info to customers and suppliers including competitive conditions and trends. |
| Indirect Channel: | something inbetween where you make the product and where its sold. (Toyota, Mars Candy Bars, Mansar Products) |
| Direct Channel Examples: | Shwans, IBM, Dell |
| Introduction (product life cycle) | Gain Awareness, profit starts below 0 or at deficit |
| Growth (product life cycle) | Sales grow, profits reach peak. Characteriszed by appearence of competitors. Stress differentiation. |
| Maturity (product life cycle) | Sales reach peak/level off. Matinence and maintain brand loyalty. Most full product line. *slow industry sales or the revenue of the product class* Gatorade is in maturity. |
| Decline (product life cycle) | Harvesting and deletion |
| Penetration | inittially pricing low to get ppl to try it out, then pricing higer. |
| Skimming | initially pricing higher for prestige and to make money back from deficit |
| *The Hallmark of the growth phase is | more competitors |
| Deletion | taking product off market |
| Harvesting | keep making product for as long as ppl will buy it |
| Product Lifestyle | describes the stages a new product goes thru |
| Fashion Product | Something that returns (goes in and out of being popular) “A Sign of the Times” |
| Fad Product | Wildy popular and then they fall off (Fidget Spinners) |
| Product Class | The entire product category or industry. Example: Prerecorded music. |
| Product Form | pertains to variations of a product within product class. Example: Cassettes, CD’s, music streaming. |
| Innovators | earliest ones to adopt a product |
| Product/Brand manager | In the marketing section, not setting strategies for the whole org |
| Product/brand manager responsibilities: | Manage product life cycle stages, New-product development, Marketing program implementation. |
| product Modification | changing one or more of a products characteristics to increase the products value to customers and increase sales. (Product bundling, New characteristics) |
| Market Modification | strategies where a company tries to find new customers, increase use among existing customers, or create new use situations. |
| Trading Up | adding value to the product or line through additional features or higher quality materials. |
| Trading Down | reducing a products number of features, quality, or price |
| Downsizing | reducing content in package (shrinkflation) |
| Branding | organization uses name, phrase, design, or symbols to identify and distinguish products from others. |
| Brand Name | any word, device, or combo used to distinguish a sellers productgs or services. |
| Brand Personality | set of human characteristics associated w a brand name. |
| Brand Equity | added value a brand name gives to a product beyond the functional benefits provided. |
| Brand Licensing | contractual agreement where one company allows its brand name or trademark to be used w products or services offered by another company for a royalty or fee. |
| Packaging | component of a product that refers to any container in which it is offered for sale on which label info is conveyed. |
| Label | Identifies who made it, where and when, how long its good, ect. |
| Packaging/Label Communication Benifits | information for consumers |
| Packaging/Label Functional Benifits | storage, convienience, or protection |
| 4 I's | Intangability, Inconsistency, Inseparability, Inventory |
| Intangibility | cannot hold a service before purchase |
| Inconsistency | services depend on people and quality varies (service is never exactly the same) |
| Inseparability | cannot separate the deliverer of the service from the service itself (Texas Roadhouse example. Inability to separate one poor server you had apart from the restuaaunt as a whole) (separate the person from the service itself) |
| Inventory | cost is paying the person even if no customers *Idle Production Capacity: occurs when the service provider is available but there is no demand for the service* |
| Idle Production Capacity | occurs when the service provider is available but there is no demand for the service* |
| Low Inventory Carrying Cost | Real estate agency, hair salon, insurance company |
| High Inventory Carrying Cost | Airline, Hospital, Amusement park |
| Service Continuum | consists of the range of offerings companies bring to market, from the tangible to the intangible or product-dominant to service-dominant. |
| Search Properties | Buying things without having to see them in person, can see info online (clothing, jewlery, furniture, houses, cars) |
| Experience Properties | things we want reccommendations for (reastuaunt, vacay, haircut, child care) |
| Credence Properties | Every experience with provider is individualized with a different result. (Television repair, legal services, root canal, auto repair, medical diagnosis) |
| Gap Analysis | a type of analysis that compares the differences btwn the consumers expectations about and experiences w a service based on dimensions of service quality. |
| Customer Conatct Audit | a flowchart of the points of interaction or service encounters between consumers and a service provider. (Midigating potential places services could fail) |
| 7 P's (3 new ones) | Product, Price, Place, Promotion, PEOPLE, PHYSICAL ENIRONMENT, PROCESS. |
| Internal Marketing | the notion that a service org must focus on its employees, or internal market, before successful programs can be directed at customers. |
| Capacity Management | integrates the service component of the marketing mix w efforts to influence consumer demand. |
| *(Consumers have more difficulty evaluating | services than products bc the intangibility of services.)* |
| Everyday Low Pricing | practuce of replacing promotional allowances w lower list prices. |
| Odd-Even Pricing | setting a price a few dollars or cents under and even number. $10.99 |
| Target Profit Pricing | setting an annual target of a specific dollar volume of profit |
| Quanitity Discounts | reductions in unit costs based on amount bought |
| Marketing Channel | consists of individual and firms involved in the process of making a product or service available for use or sonsumption by consumers or industrial users. (Mvmnt of product from where it’s made to where it’s sold) |
| Intermediaries | The in between stages of place. |
| Transactional Function | Buy, Sell, take on Risk. (You’ve made your product, somebody buys it for you and then they sell it. Once they buy it you have no control over what they do with it.) |
| Logistical Function | Assort, Store, Sorting, Transporting. (Buy assortment of food from food manufacturers, bring it to their facility, break it down into smaller packages and transport it to stores) |
| Facilitating Function | Financing, Grading, Marketing info and research. (Extend credit to customers, assigning products quality grades, providing info to customers and suppliers including competitive conditions and trends. |
| Indirect Channel | something inbetween where you make the product and where its sold. (Toyota, Mars Candy Bars, Mansar Products) |
| Direct Channel Examples: | Shwans, IBM, Dell |
| Multichannel Marketing | blending of diff communication and delivery channels that are mutaully reinforcing in attracting, retainingn, and buildign relationships w consumers who shop and buy in traditional intermediaries and online. AKA Omnichannel |
| Dual Distribution | reach different buyers by different channels |
| Verticle Marketing System | professionally managed and centerally coordinated marketing channels designed to achieve channel economies and maximum marketing impact. leads to franchise. |
| Intensive Distribution | a level of distribution density whereby a firm tries to place its products and services in as many outlets as possible |
| Exclusive Distribution | a level of distribution density whereby only one retailer in a specific geographical area carries that product. |
| Selective Distribution | level of distribution where a firm selects a few retailers in an area to carry its products. |
| Buyer Requirements | Information Convenience Variety Pre or postale service |
| Channel Conflict | problems or disagreements between businesses in the same distribution channel |
| Disintermediation | involves channel conflict that arises when a channel member bypasses abother channel member. |
| Logistics | consists of activities that focus on getting the right amount of the right products to the right place at the right time at the lowest cost. |
| Supply Chain | various firms involved in performing rhe activities required ro create and deliver a product or service to ultimate customers or buisness ones. Washburn guitars (Diff product lines, at diff price points, for diff segments) |
| Prestige pricing | Setting a high price to create an image of quality or exclusivity. |
| Price lining | Setting a limited number of prices for certain categories of products within a product line. |
| Target pricing | Setting a price based on a target cost that allows for a desired profit margin. |
| Bundle pricing | Selling several products together at a single combined price, usually lower than if purchased separately. |
| Yield management pricing | Adjusting prices based on demand to maximize revenue, commonly used in travel and hospitality industries. |
| Standard markup pricing | Adding a fixed percentage to the cost of all items in a product class. |
| Cost-plus pricing | Adding a specific dollar amount or percentage to the cost of a product to set the price. |
| Target return-on-sales pricing | Setting a price to achieve a desired percentage return on total sales. |
| Target return-on-investment pricing | Setting prices to achieve a specific return on the money invested in the business. |
| Customary pricing | Setting a price based on tradition or established norms in the industry. |
| Above-, at-, or below-market pricing | Pricing a product higher than, equal to, or lower than competitors’ prices depending on strategy |
| Loss-leader pricing | Setting a very low price on one product to attract customers who will then buy other, more profitable items. |
| Dynamic pricing policy | Prices change based on factors like demand, time, or customer segment. |
| Price war | A competitive situation where companies repeatedly lower prices to undercut each other. |
| Promotional allowances | Payments or price reductions given to retailers to promote a product |
| Price fixing | Competitors agreeing on prices instead of letting competition set them. |
| Price discrimination | Charging different customers different prices for the same product when not based on cost differences. |
| Predatory pricing | Setting very low prices to drive competitors out of the market, then raising prices later. |
Created by:
carlyconnard