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MKTG 250
Exam 3
| Question | Answer |
|---|---|
| product life cycle | describes the stages a new product goes through in the marketplace; introduction, growth, maturity, and decline |
| introduction phase | sales grow slowly, minimal profit – create consumer awareness and stimulate trial, few competition, limited place; skimming, penetration |
| growth phase | rapid increases in sales, profit usually peaks during this stage, shift to selective demand advertising, more competitors – product differentiation |
| maturity phase | slowing of total industry sales/revenue, lots of competition, full product line, brand loyalty marketing - gatorade |
| decline phase | product sales drop, reduced competition, fewer availability, minimal promotion; deletion, harvesting |
| deletion | dropping the product from the companies product line, most drastic approach |
| harvesting | company retains product but reduces marketing costs |
| skimming | pricing high for prestige and making initial money |
| penetration | initially pricing low to get people to try |
| fashion product | introduced, decline and return, varying length of cycles – “sign of the times” |
| fad product | rapid sales on introductions and equally rapid decline - fidget spinner |
| product class | refers to the entire product category or industry |
| product form | pertains to variations of a product within the class |
| diffusion of innovation | a product diffuses or spreads through the population, most sales occur after the product has been on the market for some time |
| product/brand manager | manages the marketing efforts for a close-knit family of products or brands; modify product, modify market, reposition product |
| product modification | involves altering one or more of a products characteristic, such as its quality, performance or appearance, to increase the products value to customers and increase sales |
| product bundling | the sale of two or more separate products in one package |
| market modification | strategies by which a company tries to find new customers, increase product use, create new use situations |
| trading up | add value to product or line through additional features |
| trading down | reduce value through features, quality and price |
| branding | an organization uses a name, phrase, design, symbols or combination of these to identify its products and distinguish them from competitors |
| trademark | identifies that a firm has legally registered its brand name or trade name so the firm has its exclusive use, preventing others from using it |
| brand personality | a set of human characteristics associated with a brand name |
| brand equity | the added value a brand name gives to a product beyond the functional benefits provided; provides competitive advantage and higher price |
| brand licensing | a contractual agreement whereby one company allows its brand name to be used with products or services offered by another company |
| brand name criteria | memorable, distinctive, simple, fit company image, suggest product benefits, etc |
| packaging | component of a product refer to any containers in which it is offered for sales on which label information is conveyed – PEZ candy |
| label | an integral part of the package and typically identifies the product or brand, who made it, where and when it was made, how to use it and package contents |
| 4 I's | intangibility, inconsistency, inseparability, inventory |
| intangibility | services are intangible, harder for consumers to evaluate, marketers try to make them tangible |
| inconsistency | quality of service is often inconsistent, reduce through standardization and training |
| inseparability | consumers cant separate deliverer of the service from service itself; blanket statements |
| inventory | cost of paying the person even if no customers |
| idle production capacity | when the service provider is available but there is no demand for the service |
| inventory carrying cost | :low cost = insurance, real estate agency, hair salon (commission) – high cost = airline, hospital, amusement park - restaurant = balanced |
| service continuum | the range of offerings companies bring to the market, product dominant to service dominant offerings |
| search properties | are easy to evaluate; clothing, furniture, houses, jewelry |
| experience properties | restaurant meals, haircuts, vacation |
| credence properties | are hard to evaluate; auto repair, legal services, medical diagnosis |
| gap analysis | differences between the consumers’ expectation and experience are identified |
| customer contact audit | a flowchart of the points of interaction between consumers and the service provider |
| 7 P's | product, price, place, promotion, people, physical environment, and process |
| people | depend on people for creation and delivery of service |
| internal marketing | based on the notion that a service organization must focus on its employees before successful programs can be directed at customers – have the attitude and skills needed to meet customer expectations |
| customer experience management (CEM) | process of managing the entire customer experience with the company |
| physical environment | physical environment can affect the customers perception of the service; tangibles surrounding the service |
| process | actual procedures, mechanisms and flow of activities by which the service is delivered |
| capacity management | the service component of marketing mix must be integrate with efforts to influence consumer demand |
| off-peak pricing | consists of charging different prices during different times of the day or day of week to reflect variations in demand for service |
| barter | exchanging product/services for other products/services instead of money |
| final price | = list price – (incentives + allowances) + extra fees |
| profit | = (unit price x quantity sold) - (fixed + variable cost) |
| value | ratio of perceived benefits to price |
| value pricing | the practice of simultaneously increasing product and service benefits while maintaining or decreasing price |
| price setting process | identify pricing objectives and constraints, estimate demand and revenue, determine cost, volume and profit relationships |
| pricing objectives | specifying the role of price in an organization’s marketing and strategic plans |
| profit objectives | managing for long run profits, maximizing current profit, target return; revenue, market share, unit volume, survival, social responsibility |
| pricing constraints | factors that limit the range of prices a firm may set, profit for channel members, cost of changing prices and the time period they apply; production/marketing cost, type of market, legal and ethical |
| demand curve | a graph that relates quantity sold and price, show maximum # of units that will be sold at a given price |
| demand factors | factors that determine consumers’ willingness and ability to pay for products and services; consumer tastes, price and availability of similar products, consumer income |
| elastic demand | 1% decrease in price produces more than a 1% increase in quantity demand (more substitutes, cereal) |
| inelastic demand | when a 1% decrease in price produces less than a 1% increase in quantity demand (gas, baby products) |
| total revenue | = price x quantity |
| fixed cost | the sum of the expenses of the firm that are stable and do not change with the quantity of a product that is produced (rent, salary, insurance) |
| variable cost | the sum of the expenses of the firm that vary directly with the quantity of a product that is produced and sold (direct labor costs, sales commission, materials) |
| break even point | = fixed cost/ price - unit variable cost |
| demand oriented pricing approach | skimming, penetration, prestige, price lining, odd-even pricing, target, bundle, yield management |
| skimming | setting the highest initial price that customers who really desire the product are willing to pay |
| penetration | opposite of skimming, low initial price on a new product to appeal immediately to mass market |
| prestige pricing | setting a high price so that the equality consumers will be attracted to the product and buy it |
| price lining | pricing products within product line at different pricing points |
| odd-even pricing | setting prices a few dollars or cents under an even number |
| target pricing | estimate the price that consumers would pay and work backwards through markups taken by retailers, deliberately adjust product to achieve target prcing |
| bundle pricing | the marketing of two or more products in a single package price |
| yield management | charging different prices to maximize revenue for a set amount of capacity at any given time |
| cost oriented pricing | standard markup, cost-plus |
| standard markup pricing | adding a fixed percentage to the cost of all items in a specific product class |
| cost-plus pricing | summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at a price |
| profit oriented pricing | target profit, target return on sales, target return on investment |
| target profit | set an annual target of a specific dollar volume of profit |
| target return on sales | set typical prices that will give them a profit that is a specified percentage of the sales volume |
| target return on investment | setting prices to achieve target return on investment |
| competition oriented pricing | customary pricing, above-at-below market pricing, loss leader |
| customary pricing | a standardized channel of distribution or other competitive factors dictate the price |
| loss leader pricing | attract customers in hopes they will buy other products |
| fixed price policy | setting one price for all buyers of a product/service |
| dynamic price policy | setting different prices for products and service in real time in response to supply and demand conditions |
| product line pricing | setting prices for all items in a product line |
| price war | involves successive price cutting by competitors to increase or maintain their unit sales or market share |
| quantity discount | reductions in unit costs for a larger order |
| promotional allowance | undertaking certain advertising or selling activities to promote a product |
| everyday low pricing | practice of replacing promotional allowances with lower manufacturer list prices |
| price fixing | conspiracy among firms to set prices for a product, illegal |
| price discrimination | the practice of charging different prices to different buyers for good of like grade and quality |
| predatory pricing | the practice of charging a very low price for a product with the intent of driving competitors out of business |
| marketing channel | consists of individuals and firms involved in the process of making a product or service available for use or consumption by consumers or industrial users |
| transactional function | buying, selling, risk taking |
| logistical function | assorting, storing, sorting, transporting (wholesalers) |
| facilitating function | financing, grading, marketing info/research |
| direct channel | no intermediary |
| indirect channel | one or more intermediaries |
| multichannel marketing | blending of different communication and delivery channels that are mutually reinforcing in attracting, retaining and building relationships with consumers (omnichannel) |
| dual distribution | firm reaches different buyers by different types of channels for same product (buying a dishwasher) |
| vertical marketing systems | professionally managed and centrally coordinated marketing channels designed to achieve channel economies and max marketing impact; contractual |
| contractual vertical marketing system | independent production and distribution firms integrate their efforts on a contractual basis to obtain greater functional economies and marketing impact - franchising |
| intensive distribution | firm tries to place its products and services in as many outlets as possible (convenience products) |
| exclusive distribution | the extreme opposite of intensive distribution because only one retailer in a specific geographical area carries the firms’ products (specialty products – roll royce) |
| selective distribution | firm selects retailers in a specific geographical area to carry out its products (shopping products - nike) |
| buyer requirements | information, convenience, variety, pre/post sale services |
| channel conflict | when one channel member believes another channel member is engaged in behavior that prevents it from achieving its goals – vertical (between levels) and horizontal (same level) |
| disintermediation | a channel member bypasses another member and sells/buys products directly |
| logistics | activities that focus on getting the right amount of the right products to the rights place at the right time at lowest cost |
| supply chain | the various firm involved in performing the activities required to create and deliver a product to consumers/users |
| washburn guitar success | different product line at different prices for different segments |
| step 1 of price setting process | identify pricing objectives and constraints |
| step 2 of price setting process | estimate demand and revenue: demand factors and price elasticity |
| step 3 of price setting process | determine cost, volume and profit relationships |
| innovators | earliest adopters of products |
Created by:
kayleejh0829