Marketing 302 Exam 3

Chapter 11
this kind of discount is used to encourage prompt payment
cash
the marketing approach to price suggests there is a _____ of discretion bounded by customer value and costs
gap
a car dealer’s “tent sale” is a form of what kind of pricing?
event
setting a high price on a new product is called
skimming
a computer manufacturer who offers to add a hard drive backup for an additional fee is using what kind of pricing?
option
if a theater offers students a discount on tickets, this is what kind of pricing?
segment
probably the most powerful 4 letter word in marketing is?
FREE
extra value meals are of a form of what kind of pricing?
bundle
demand that is not very sensitive to price changes is said to be
inelastic (ratio is < 1)
one way to respond to a computer’s price cut is to use a ____ price “fighting brand”
low
manufacturers offer what kind of discount to encourage middlemen to buy more?
quantity
this discount is given to middlemen as payment for carrying the product
trade
What kind of pricing is illegal?
Bait & Switch
setting a low initial price on a new product may discourage ________ from entering the market- at least temporarily
competitors
the fabulous new gizmo advertised on TV will come with the fantastic whatisit- a $50 value for only $19.95. Here the marketer is trying to influence you _______ price?
reference
if a bar offers Happy Hour prices, this is a form of what kind of pricing?
time
what kind of pricing would tickets for seats behind home plate cost more than tickets for seats high in the bleachers?
location
giving inflated price comparisons, scanner fraud and price confusion are all forms of what kind of pricing?
deceptive
offering zero percent financing is a form of what kind of pricing?
promotional
what kind of pricing suggests that the demand curve may actually bend backwards at some price point?
prestige
Chapters 12, 13, and 18
in recent years, _____ has/have been growing fast. This includes selling to final consumers through direct mail, catalogs, television, and the internet
non-store retailing
retailers that carry narrow product lines with deep assortments within those lines are known as
specialty stores
these stores, much larger than supermarkets, are a combination of food and discount store, and offer a large assortment of routinely purchased food and nonfood items
superstores
these stores are actually superstores that are giant specialty stores (Best Buy is an example)
category killer stores
types of low-price retailers
-discounters/discount stores
-factory outlets
-warehouse clubs
-off-price retailers
____ sell standard merchandise at lower prices by accepting lower margins and selling higher volume
discount stores
____ are two or more outlets that are commonly owned and controlled
chain stores
today you can by books at outlets ranging from independent local bookstores to warehouse clubs to superstores or Web sites. This merging of consumers, products, prices, and retailers is called
retail convergences
the____ is used/depicted when new types of retailing forms begin as low-margin, low-price, low-status operations. These new retailers challenge established retailers and eventually take their place
wheel-of-retailing concept
as market share and profits achieve their greatest growth rates, more outlets are established, competitors enter the market and competitors battle for market share, the retail life cycle is in what stage?
accelerated development
-single-price stores
-factory outlet clubs
-warehouse clubs
reasons why consumers buy online
-customization
-communication
-choice
-convenience
-control
-cost
consumers, by answering a few questions and choosing options from a menu can design their own product/service by using
choiceboards
in _______, the buyer controls the kind and amount of information received from the seller while engaged in electronic communications
interactive marketing
text, picture, sound and video that a web-sire may contain is this one of the “7 C’s”.
content
which of the following products is least likely to be bought through a website?
automobile
wholesaler channel functions
-financing
-providing marketing information
-risk bearing
-bulk-breaking
the largest group of wholesalers is classified as
merchant wholesalers
classifications of wholesalers
-merchant wholesalers
-agents and brokers
-manufacturers’ sales branches and offices
which of the following takes title to goods
wholesale merchants
Lou Costanza owns a small corner grocery store. He still likes to offer fine filet mignon in his meat display case. Before buying, he like to inspect the merchandise and buy it fresh. Which type of wholesaler might best serve Lou?
case-and-carry wholesaler
when Subway’s offers its products inside of a Wal-Mart store, it is following a
horizontal marketing system
_____________ differ from merchant wholesalers in two ways: they do not take title to goods and they perform only a few functions
brokers and agents
reverse logistics is just another name for
recycling
customer service delivery reflects what?
-time
-dependability
-convenience
-communication
through this channel function, wholesalers hold inventories, thereby reducing the inventory costs and risk of suppliers and customers
warehousing
_____ from the manufacturer or service provider is the set of firms that supply the raw materials, components, parts, information, finances, and expertise needed to create a product or service
upstream
the major reason that producers benefit from using intermediaries is because they
offer greater efficiency in making goods available to target markets
channel members add value by bridging the major gaps of _______ that separate goods and services from those who would use them
-time
-place
-possession
distribution channel decisions almost always involve ______ with other firms
long-term committments
indirect marketing channels differ from direct channels in that they
utilize one or more levels of intermediaries
all of the following are key functions that intermediaries play in helping to fulfill a completed transaction
-physical distribution
-promotion
-financing
-risk taking
and advantage of a channel of distribution over selling direct to consumers is that each channel member plays a ______ in the channel
specialized role
the benefits of a multi-channel distribution system, such as that used by Sears, include all of the following
-expanded sales
-expanded market coverage
-gaining opportunities to tailor products and services to needs of diverse segments
a paper towel maker may wish to target its towers to ultimate consumers and to restaurants. To make its product more readily available to these target markets it would use
dual distributioin
when tradition intermediaries are cut out of channels or re-sellers are displaced with radical new types of intermediaries, this is known as
disintermediation
by definition, a conventional distribution channel consists of one or more independent producers, wholesalers, and
retailers
a corporate VMS has the advantage of controlling the entire distribution chain under
single ownership
contractual VMS coordinate independent members of the channel through
contractual agreements
the most common type of contractual agreement in the business is the
franchise organization
you and your partner are exploring the possibility if buying into a franchise but are not sure what type to go into. What are some common types of franchises?
-manufacturer-sponsored retailer franchise system
-manufacturer-sponsored wholesaler franchise system
-service-firm-sponsored retailer franchise system
companies should state their channel objectives in terms of targeted levels of
customer service
the difference between distribution centers and storage warehouses is that the former are designed to
move goods quickly through rather than just store them
name some logistics functions
-warehousing
-information management
-transportation
-inventory management
exhaustive of their logistics has show Nessa Production, Inc. that the success of each channel member depends on the performance of
the entire supply chain
inter-model transportation always includes
two or more modes of transportation
______ websites focus on converting an online browser into a buyer via the website
transactional
the process where consumers evaluate merchandise online but go to the brink and mortar store to buy is called
cross-channel shopping (Sales arising from cross-channel shoppers dwarf exclusive online retail sales).
when two Taco Bells have a disagreement over who should be able to sell in quantity at a discount to the local high school band, they are in a
horizontal conflict
sometimes a seller requires its dealers to abstain from handling competitors’ products in an arrangement called
exclusive dealing
_____websites focus on educating and persuading an online browser but do not sell merchandise from the site
promotional
The 7 C’s
-customization
-connection
-content
-context
-communication
-commerce
-community
rack jobber
a full-function merchant wholesaler that markets specialized lines of merchandise to retail stores
cash-and-carry wholesaler
performs most wholesaling functions except financing and delivery
truck wholesaler/truck jobber
markets perishable food items
drop shipper
accepts orders from customers and forwards them to producers, which ship directly to the customers who place orders
mail-order wholesaler
distributes catalogs instead of sales representatives to contact customers
functions performed by intermediaries
-transactional: buying, selling, risk taking
-logistical: assorting, storing, sorting, transporting
-facilitating: financing, grading, marketing information and research
demand-oriented pricing approaches
-skimming: high initial price
-penetration: low initial price
-prestige: setting high price so that quality/status customers will be attracted (Rolex)
-odd-even: setting prices a few dollars or cents under an even number
-target: manufacturer adjusting the composition and features of a product to achieve the target price to consumers
-bundle: marketing of two or more products in a single package price
-yield-management pricing: the charging of different prices to maximize revenue for a set amount of capacity at any given time (airplane example)
cost-oriented pricing approaches
-standard markup pricing: adding a fixed percentage to the cost of all items in a specific product class (supermarkets do this)
-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 (Ex: set prices for business products, like setting the prices for the $92 million Rock and Roll Hall of Fame and Museum)
profit-oriented pricing approaches
-target profit pricing: when a firm sets an annual target of a specific dollar volume of profit
-target return-on-sales pricing: set prices that will give a firm a profit that is a specified percentage (supermarkets do this)
-target-return-on-investment pricing: set prices to achieve a ROI target such as a percentage that is mandated by the firms board of directors or regulators
competition-oriented pricing approaches
-customary pricing: tradition, a standardized channel of distribution, or other competitive factors dictate the prices (vending machines)
-above, at, or below-market pricing: managers have a subjective feel for the competitors’ price or the market price
-loss-leader pricing: special promotion retail stores deliberately sell a product below its customary price to attract attention to it (Best Buy, Target, and Walmart cell CDs at 1/2 price)
pricing objectives
-profit
-sales
-market share
-unit volume
-survival
-social responsibility
pricing constraints
-demand for the product class, product, and brand
-newness of the product
-cost of producing and marketing the product
-competitors’ prices
-legal and ethical considerations (pricing fixing, price discrimination, deceptive pricing, predatory pricing)
one-price policy/fixed pricing
setting one price for all buyers of a product or service
flexible-price policy
setting different prices for products and services depending on individual buyers and purchase situations in light of demand, cost, and competitive factors
discounts
-quantity: encourages buying in bulk
-seasonal: encourages stocking inventory earlier
-trade/functional: to reward wholesalers and retailers
-cash: encourage retailers to pay bills quickly
allowances
-trade-in: used product is part of the payment for new product
-promotional: Ex: free case of pizzas to a retailer for every dozen cases purchased
factors when estimating consumer demand
-consumer tastes
-price and availability of similar products
-consumer income
steps to setting a final price
1. select an appropriate price level
2. set the list or quoted price
3. make special adjustments to the list or quoted price
upstream
firms that supply the raw materials, components, parts, and other elements necessary to create a good
downstream
market channel partners that link the firm to the customer
market channel
individuals and firms involved in the process of making a good or service available for use or consumption by consumers or industrial users
multi-channel distribution system
when a firm blends communication and delivery channels to mutually reinforce each other in reaching one market (catalog + retail stores)
dual distribution system
when a firm sets up two or more marketing channels to reach two or more customer segments for the same basic product (distributing washing machines to home builders but also to consumers for their homes)
conventional distribution channel
consists of one or more independent producers, wholesalers, and retailers, each a separate business seeking to maximize its own profits even at the expense of profits for the system as a whole
vertical marketing systems
-corporate: combo of successive stages of production and distribution under single ownership
-contractual: independent production and distribution firms integrate their efforts on a contractual basis to obtain greater functional economies and marketing impact than they could achieve alone (most popular)
-administered: achieve coordination at successive stages of production and distribution by the size and influence of one channel rather than through ownership
intensive distribution
when a firms tries to place its products or services in as many outlets as possible
exclusive distribution
when only one retail outlet in a specific geographical area carries the firm’s products
selective distribution
when a firm selects a few retail outlets in a specific geographical area to carry its products
choice of supply chain steps
1. understand the customer
2. understand the supply chain
3. harmonize the supply chain with the marketing strategy
logistic cost factors
-transportation costs
-materials handling and warehousing costs
-inventory costs
-stock-out costs
-order processing costs
-return products handling costs
line depth
stores that carry a considerable assortment of related line of items are limited line stores.
line breadth
stores that carry a broad product line, with limited depth, are referred to as general merchandise stores (department stores, scrambled merchandising)
consumer utilities offered by retailing
-time
-place
-form
-possession
bots
electronic shopping agents or service features
8 second rule
customers will abandon their efforts to enter and navigate a website if download time exceeds 8 seconds
cookies
computer files that a marketer can download onto the computer and mobile phone of an online shopper who visits the marketer’s website. They make behavioral targeting possible
showrooming
when a shopper visits a retail store to inspect merchandise but then purchases the merchandise online (may obtain a lower price from this) Ex: electronics, apparel, books, and home appliances
collaborative filtering
process that automatically groups people with similar buying intentions, preferences, and behaviors and predicts future purchases (under choice-boards). Gives marketers the ability to make a strong sales recommendation to a buyer in real time.
permission marketing
the solicitation of a consumer’s consent to receive e-mail and advertising based on personal data supplied by the consumer (under personalization)
transactional websites
electronic storefronts, want customers to buy through the website
promotional websites
advertise how products and services can be used and where they can be purchased but customer does not make the purchase through the website
skimming pricing is appropriate when
1. there are enough prospective customers who are willing to buy the product immediately at the high price
2. the high initial price will not attract competitors
3. lowering the price has only a minor effect on increasing the sales volume and reducing the unit costs
4.customers interpret the high price as signifying high quality.
use penetration pricing when
volume increases reduce production costs greatly
profit objectives
Profit objectives are measured in terms of return on investment or return on assets. Firms that use a maximizing current profit objective are taking a short-term view.
Adding a wholesaler to the marketing channel for consumer products is most common for
low-cost, low-unit value items (candy, confectionery items, and magazines).
strategic channel alliance
popular in international marketing because developing marketing channel relationships are expensive and time consuming.
backward integration
retailers owning a manufacturing operation.
choosing a marketing channel and intermediaries
1. which channel and intermediaries will provide the best coverage of the target market
2. which channel and intermediaries will best satisfy the buying requirements of the target market
3. which channel and intermediaries will be the most profitable
a firm can become a channel captain by using these influencers
-economic influence
-expertise
-identification with a particular channel member
-the legitimate right of one channel member to direct the behavior of other members
A firm must drive down logistics costs
as long as it can still satisfy customer requirements
The driving force behind an efficient supply chain is
reducing costs
types of franchises
product distribution and business format
One of the biggest problems an online retailer faces is
customers’ tendencies to get to the checkout and leave the website without concluding the purchase.
Direct selling is likely to grow in markets
outside the United States
retailing mix
-retail communication
-merchandise
-store location
-retail pricing
benchmark or signpost items
consumers use to form an overall impression of a store’s prices
off-price retailing
involves offering name-brand merchandise at lower than regular retail prices
category management
assigns a manager the responsibility for selecting all products that consumers in a market segment might view as substitutes for each other, with the objective of maximizing sales and profits in the category.
Which type of outlet is most likely in the maturity stage of the retail life cycle
supermarkets
A company monitors the amount of time per month, in minutes, visitors spend on a company’s website to gauge
stickiness
The subsegment of all Internet users who employ this technology to research products and services and make purchases is referred to as
online consumers
To which element of the marketing mix is viral marketing most closely related
promotion
dynamic pricing
the practice of changing prices for products in real time in response to supply and demand conditions