Marketing Chapter 11-15

profit objectives
profit hoped to realize
marketing share objectives
gaining competitive advantage through pricing
competitive effect objectives
predatory pricing
customer satisfaction objectives
look to long term sales and value of the customer
image enhancing objectives
price to infer quality, prestige and luxury
variable cost
based on costs of production
fixed cost
cost of production that doesn’t change based on number of units
total cost
fixed + variable cost for number of units sold
break even analysis
determines number of units firm must produce/sell at a given price to cover all costs
marginal analysis
uses cost and demand to identify the price that maximizes profit
gross margin
markup + cost or product to make profit
retailer/wholesaler margin
margin added to cost by retailer/wholesaler
cost plus pricing
seller totals all costs and adds profit to amount to create selling price
demand based pricing
estimating demand at different prices in the market
target costing pricing
identify the quality and functionality needed to satisfy consumer needs and the price they are willing to pay before creating the product so that the firm can control prices
yield management pricing
setting different prices to different consumers to manage capacity and maximize profit
price leadership
setting the price that everyone else bases off of
value pricing
everyday low pricing, ultimate value going to the consumer
trial pricing
low price for a limited time for entry level products
dynamic pricing
easily adjusted to meet market changes
freenomics
encourages giving out free products to increase profits by getting people to participate in the market
price lining
setting price points for each product to appeal to all different consumer bases
prestige pricing
price going up means more buyers because it has an image enhancing quality
loss leader
setting low prices to attract customers hoping they will also buy other items
price fixing
collaboration of 2+ firms in setting prices to keep prices high in the market
predatory pricing
low pricing to skim out competition
promotion
coordination of marketer’s communication efforts to influence attitudes and behaviors
roles of marketing communication
inform, remind, persuade, and build relationships
integrated marketing communications
used to plan, develop, execute and evaluate coordinated measurable persuasive brand communications to audience
multichannel promotional strategy
combining traditional ads sales promotions and PR with online buzz building activities
encoding
translating idea into communication that will create meaning among consumers
decoding
assigning meaning to message
promotional mix
advertising, sales promotions, PR, direct marketing and personal selling
groundswell
people using technology to get things they need from each other
viral marketing
aim to increase brand awareness in consumers by them passing messages to others
top down budget
allocating promotional budget to devote it to marketing communications
% of sales budgeting
based on percentage of last year’s sales or estimation of this year’s sales
comparative parity
match what competitors spend
bottom up budget
identify promotional goals allocating enough to accomplish goals
objective task budgeting
define goals then calculate what efforts it will take
push strategy
convince channel members to offer product and push consumers
pull strategy
make product so appealing to consumers that they ask the retailers for the product to be in their stores
AIDA model
attention, interest, desire and action
product advertising
focus on specific good or service
institutional advertising
promotes activities, personality and POV of the company
crowdsourcing
asking consumers what they want in a product
PR campaign steps
develop, execute, evaluate
press release
giving out information with full control to express a new product or event
internal PR
keeping the company members in the know like through a newsletter
corporate identification
logos/brochures/designs to promote image
guerrilla marketing
ambushing consumers for a limited time with promo materials to get brand name out
trade promotions
focus on members of distribution channel
push money
paid to salesperson/retailer for selling product
direct marketing
direct communication with consumer designed to get order/info requests/visit for purchase
direct mail
for a specific time, can mail order, done by gov agencies
telemarketing most profitable where
B2B
direct response marketing
meant for consumer to respond right away, DRTV, QVC, contact provider and ask questions and order
personal selling
company representative going right to the consumer, intimate and personal, seller gets real understanding of the product, demographically separated, long term relationships
sales management
planning, implementing and controlling personal selling function of organization
supply chain
all activities to turn raw materials into good or service in the hands of the consumer
supply chain management
managing flows along firms in the supply chain to maximize total profitability
supply chain steps
raw materials, part suppliers, manufacturer, resellers, consumers
direct channel
producer right to consumer, most control
channel intermediaries
anything that helps a product move along distribution chain
facilitating functions
make purchase process easier for all entities in chain
disintermediation
ridding of some layers of chain to save money and create better efficiency
2 types of intermediaries
manufacturer-owned and independent
hybrid marketing system
uses # of different channels to communicate method to serve a target market
economic power
control resources
legitimate power
call the shots
coercive power
control over products available
logistics
designing, managing and improving movement of products through a supply chain, delivering exactly what the consumer wants at the right time, place and condition
conventional distribution strategy
independent of one another, multi-level
vertical distribution strategy
formal cooperation between channel members
horizontal distribution strategy
2+ firms in same channel working together for a common cause
intensive distribution
selling through all channels that are willing to
selective distribution
not all that are willing but not just one
exclusive distribution
only one specific selling point