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Marketing Exam 3
| Question | Answer |
|---|---|
| Product Life Cycle Steps | 1. Introduction 2.Growth 3. Maturity 4. Decline |
| In which product life cycle step do sales grow and profits peak? | Growth Stage |
| In which product life cycle step do sales peak and there is a full product line? | Maturity Stage |
| Gatorade is in which product life cycle stage? | Maturity |
| Skimming | A high initial price to try and get money back for what we've spent. |
| Penetration | Starting pricing low so people will try it out. |
| Harvesting | A company retains the product, but cuts marketing costs. |
| Deletion | Drop the product/ stop making it. |
| Marketing Objective for Introduction | Gain Awareness |
| Marketing Objective for Growth | Stress Differentiation |
| Marketing Objective for Maturity | Maintain Brand Loyalty |
| Marketing Objective for Decline | Harvesting & Deletion |
| Fashion | A sign of the time. Popular then dies, then comes back, and dies again. Like a cycle. |
| Fad | Products are crazy popular for a while, then they die and don't come back. (FIDGET SPINNER) |
| Product Class | Refers to the entire product category or industry. |
| Product Form | Variations of a product within the product class. |
| Innovators | People excited about the product- buy early |
| Early Adopters | People who buy the product quickly after it comes out. |
| Early Majority | People who know they will buy the product, just not right away. |
| Late Majority | People who wait till the product is free/cheap to buy. |
| Laggards | People who do not know much/ or don't care about the product at all. |
| Product/Brand Managers | Manage product lifestyle stages, new product development, and marketing program implementation. |
| Product Modification | Involves altering one or more of a product’s characteristics, such as its quality, performance, or appearance, to increase the product’s value to customers and increase sales. |
| Market Modification | Strategies by which a company tries to find new customers, increase a product’s use among existing customers, or create new use situations. |
| Product Bundling | The sale of two or more separate products in one package. |
| Trading Up | Adding value to the product (or line) through additional features or higher-quality materials. |
| Trading Down | Reducing a product’s number of features, quality, or price. |
| Branding | A marketing decision in which an organization uses a name, phrase, design, symbols, or combination of these to identify its products and distinguish them from those of competitors. |
| Brand Name | Any word, device (design, sound, shape, or color), or combination of these used to distinguish a seller’s products or services. |
| 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. |
| Brand Licensing | A contractual agreement whereby one company (licensor) allows its brand name(s) or trademark(s) to be used with products or services offered by another company (licensee) for a royalty or fee. |
| Packaging | A component of a product that refers to any container in which it is offered for sale and on which label information is conveyed. |
| Label | An integral part of the package that typically identifies the product or brand, who made it, where and when it was made, how it is to be used, and package contents and ingredients. |
| Services | Intangible activities or benefits that an organization provides to satisfy consumers’ needs in exchange for money or something else of value. |
| 4 I's | Intangibility: can’t hold a service before purchase. Inconsistency: quality varies by provider. Inseparability: service and provider are linked. Inventory: costs exist even without customers. |
| Idle Production Capacity | Occurs when the service provider is available, but there is no demand for the service. (Has to do with inventory) |
| Inventory Carrying Cost | Low Costs: Real Estate Company, Hairdresser, Insurance Company High Costs: Airline, Hospital & Amusement Park |
| Service Continuum | The range of offerings companies bring to the market, from the tangible to the intangible or the product-dominant to the service-dominant. |
| Search, Experience, and Credence Properties | Customers use these to evaluate services. |
| Customer Contact Audit | A flowchart of the points of interaction or “service encounters” between consumers and a service provider. |
| Gap Analysis | A type of analysis that compares the differences between the consumer’s expectations about and experiences with a service based on dimensions of service quality. |
| 7 Ps of Service Marketing | 1. Product (Service) 2. Price 3. Place (Distribution) 4.Promotion 5.People 6.Physical Environment 7. Process |
| Off-Peak Pricing | Charging different prices during different times of the day or during different days of the week to reflect variations in demand for the service. |
| Internal Marketing | The notion that a service organization must focus on its employees, or internal market, before successful programs can be directed at customers. |
| Capacity Management | Integrating the service component of the marketing mix with efforts to influence consumer demand. |
| Price | The money or other considerations (including other products and services) exchanged for the ownership or use of a product or service. |
| Barter | The practice of exchanging products and services for other products and services rather than for money. |
| Price Equation | List Price - (Incentives + Allowances) + Extra Fees |
| Value | The ratio of perceived benefits to price, or Value = (Perceived benefits ÷ Price). |
| Value Pricing | The practice of simultaneously increasing product and service benefits while maintaining or decreasing price. (WALMART) |
| Profit Equation | (Unit Price x Quantity Sold) - (Fixed Costs + Variable Costs) |
| Steps in the Price-Setting Process | 1. Identifying pricing objectives and constraints 2. Estimate demand and revenue 3. Determine cost, volume, and profit relationships |
| Pricing Objectives | Specifying the role of price in an organization’s marketing and strategic plans. (In step 1) |
| Pricing Constraints | Factors that limit the range of prices a firm may set. (In step 1) |
| Demand Curve | A graph that relates the quantity sold and price, showing the maximum number of units that will be sold at a given price. (In step 2) |
| Demand Factors | Factors that determine consumers’ willingness and ability to pay for products and services. Ex. Consumer Tastes, Price and availability of similar products, Consumer income |
| Elastic Demand | When we decrease price, most people are going to buy more. Ex. Cereal & Chips |
| Inelastic Demand | People buy this stuff regardless of the price. Ex. Gasoline & Baby Stuff |
| Total Revenue | The total money received from the sale of a product. |
| 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 and sold. |
| Variable Cost | The sum of the expenses of the firm that vary directly with the quantity of a product that is produced and sold. |
| Break Even Point | How many products we need to sell to make our money back. |
| Skimming Pricing | Setting the highest initial price that customers really desiring the product are willing to pay when introducing a new or innovative product. |
| Penetration Pricing | Setting a low initial price on a new product to appeal immediately to the mass market. |
| Prestige Pricing | Setting a high price so that quality- or status-conscious consumers will be attracted to the product and buy it. |
| Price Lining | Setting the price of a line of products at a number of different specific pricing points. |
| Odd-Even Pricing | Setting prices a few dollars or cents under an even number. $19.99 instead of $20 |
| Target Pricing | Estimates the price consumers will pay, works backward through retailer and wholesaler markups to set a wholesale price, then adjusts the product’s features and design to meet that target price. |
| Bundle Pricing | Marketing two or more products in a single package price. |
| Yield Management Pricing | Charging different prices to maximize revenue for a set amount of capacity at any given time. |
| 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. |
| Target Profit Pricing | Setting an annual target of a specific dollar volume of profit. |
| Target Return-On-Sales Pricing | Setting a price to achieve a profit that is a specified percentage of the sales volume. |
| Target Return-On-Investment Pricing | Setting a price to achieve an annual target return on investment (ROI). |
| Customary Pricing | Setting a price that is dictated by tradition, a standardized channel of distribution, or other competitive factors. |
| Above-, At-, or Below-Market Pricing | Setting a market price for a product or product class based on a subjective feel for the competitors’ price or market price as the benchmark. |
| Loss-Leader Pricing | Deliberately selling a product below its customary price, not to increase sales, but to attract customers’ attention to it in hopes that they will buy other products with large markups as well. |
| Fixed-Price Policy | Setting one price for all buyers of a product or service. Also called a one-price policy. |
| Dynamic Pricing Policy | Setting different prices for products and services in real time in response to supply and demand conditions. Also called a flexible-price policy. |
| Product Line Pricing | Setting prices for all items in a product line to cover the total cost and produce a profit for the complete line, not necessarily for each item. |
| Price War | Successive price cutting by competitors to increase or maintain their unit sales or market share. |
| Quantity Discounts | Reductions in unit costs for a larger order. |
| Promotional Allowances | Cash payments or an extra amount of “free goods” awarded sellers in the marketing channel for undertaking certain advertising or selling activities to promote a product. |
| Everyday Low Pricing | The practice of replacing promotional allowances with lower manufacturer list prices. |
| Price Fixing | A conspiracy among firms to set prices for a product. |
| Price Discrimination | Charging different prices to different buyers for products of like grade and quality. |
| Predatory Pricing | Charging a very low price for a product with the intent of driving competitors out of business. |
| Direct Marketing Channel | Straight from the producer to the consumer. (Schwan's, IBM, DELL) |
| Indirect Marketing Channel | Intermediates come into play before the product goes from the producer to the consumer. (Toyota, Maars, Mansar Products) |
| Multichannel Marketing | The blending of different communication and delivery channels that are mutually reinforcing in attracting, retaining, and building relationships with consumers who shop and buy in traditional intermediaries and online. |
| Dual Distribution | Reach different buyers by different channels. |
| Vertical Marketing Systems | Professionally managed and centrally coordinated marketing channels designed to achieve channel economies and maximum marketing impact |
| 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 the firm’s products. |
| Selective Distribution | A level of distribution density whereby a firm selects a few retailers in a specific geographical area to carry its products |
| Buyer Requirements | Information Convenience Variety Pre- or post-sale service Profitability |
| Channel Conflicts | Arises when one channel member believes another channel member is engaged in behavior that prevents it from achieving its goals |
| Vertical Conflicts | Between levels of one channel. |
| Horizontal Conflicts | Between same level intermediaries. |
| Disintermediation | A source of channel conflict that occurs when a channel member bypasses another member and sells or buys products direct |
| Logistics | Those activities that focus on getting the right amount of the right products to the right place at the right time at the lowest possible cost. |
| Supply Chain | The various firms involved in performing the activities required to create and deliver a product or service to consumers or industrial users. |
| Functions of Marketing Channels | Transactional Logistical Facilitating |
| Transactional Function | Buying, Selling, and Risk Taking. |
| Logistical Function | Assorting, Storing, Sorting, Transporting. |
| Facilitating Function | Financing, Grading, Marketing Information & Research. |
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