Ch. 18 and 10

Transaction based marketing
buyer and seller exchanges characterized byu limited communications and little or no ongoing relationship between the parties
Relationship Marketing
development, growth, and maintenance of long term, cost effective relationships with individual customers, suppliers, employees and other partners for mutual benefits
External Customers
people or organizations that buy or use a firm’s goods or services
Internal customers
employees or departments within the organization whose success depends on the work of other employees or departments
What is the first level of the relationship marketing continuum?
focus on price
What is the second level of the relationship marketing continuum?
social interactions
What is the third level of the relationship marketing continuum?
interdependent partnership
What are the three levels for measuring customer satisfaction?
understanding customer needs, customer feedback, and ongoing measurement
Is customer churn (turnover) expensive or cheap?
Frequency Marketing
frequent buyer or user marketing programs that reward customers with cash, rebates, merchandise or other premiums
Affinity Marketing
marketing effort sponsored by an organization that solicits responses from individuals who share common interests and activities
Database Marketing
use of software to analyze marketing information, identifying and targeting messages toward specific groups of potential customers
Grassroots Marketing
involves connecting directly with existing and potential customers through nonmainstream channels
Viral Marketing
firms let satisfied customers get the word out about products to other consumers
Buzz Marketing
gathers volunteers to try products and then relies on them to talk about their experiences with friends and colleagues
Customer Relationship (CRM)
combination of strategies and tools that drives relationship programs, reorienting the entire organization to a concentrated focus on satisfying customers
Buyer Partnership
a firm purchases goods and services from one or more providers
Seller Partnerships
set up long term exchanges of goods and services in return for cash or other consideration
Lateral Partnerships
strategic alliances with other companies or with not for profit organizations and research alliances between for profit firms and colleges and universities
cooperative arrangement in which two or more businesses team up to closely link their names on a single product
two organizations join to sell their products in an allied marketing campaign
Electronic Data Interchange (EDI)
computer to computer exchanges of invoices, orders, and other business documents
Vendor Managed Inventory (VMI)
inventory management system in which the seller based on an existing agreement with a buyer determines how much a of a product is needed
Robinson Patman Act
Federal legislation prohibiting price discrimination not based on a cost differential; also prohibits selling at an unreasonably low price to eliminate competition
Unfair Trade Laws
state laws requiring sellers to maintain minimum prices for comparable merchandise
Fair Trade Laws
statutes enacted in most states that once permitted manufacturers to stipulate a minimum retail price for their product
Profit Maximization
point at which the additional revenue gained by increasing the price of a product equals the increase in total costs
Target return Objective
short run or long run pricing objectives of achieving a specified return on either sales or investment
Profit Impact of Market Strategies (PIMS) Project
research that discovered a strong positive relationship between a firm’s market share and product quality and its ROI
Does matching price always make you beat the competition?
no, service is important too
Value Pricing
pricing strategy emphasizing benefits derived from a product in comparison to the price and quality levels of competing offerings
Prestige Objectives
sets a relatively high price to develop and maintain an image of quality and exclusiveness that appeals to status conscious consumers
What is cost recovery in terms of not for profit organizations?
organizations only recover the actual cost of operating the unit
Customary Prices
traditional prices that customers expect to pay for certain goods and services
measure of responsiveness of purchasers and suppliers to a change in price
Cost plus pricing
uses a base price figure per unit and adds a markup to cover unassigned costs and to provide a profit
Full cost pricing uses all relevant VC in setting a product’s price
Incremental cost pricing
attempts to use only costs directly attributable to a specific output in setting prices to overcome the arbitrary allocation of fixed expenses
Breakeven Analysis
pricing technique used to determine the number of products that must be sold at a specified price to generate enough revenue to cover total costs
Modified Breakeven analysis
pricing technique used to evaluate consumer demand by comparing the number of products that must be sold at a variety of prices to cover total cost with estimates of expected sales at the various prices
Yield Management
pricing strategy that allows marketers to vary prices based on such factors as demand, even though the cost providing those goods or services remains the same