Principles of Marketing final exam review chapters 17-20

personal selling
direct communication between a sales representative and one or more prospective buyers in an attempt to influence each other in a purchase situation
relationship selling
the practice of building, maintaining, and enhancing interactions with customers to develop long-term satisfaction through mutually beneficial partnerships.
traditional selling
transaction focused–the salesperson is most concerned with making a one-time sale and moving on to the next prospect.
steps in the selling process
1. generating leads
2. qualifying leads
3. approaching the customer and probing needs
4. developing and proposing solutions
5. handling objections
6. closing the sale
7. following up
cold calling
a form of lead generation in which the salesperson approaches potential buyers without any prior knowledge of the prospects needs or financial status
5 functions of sales management
1. defining sales goals and the sales process
2. determining the sales force structure
3. recruiting and training the sales force
4. compensating and motivating the sales force
5. evaluating the sales force
social media
any tool or service that uses the internet to facilitate conversations
social commerce
a subset of e-commerce that involves the interaction and user contribution aspects of social online media to assist online buying and selling of products and sevices
social media monitering
the process of identifying and assessing what is being said about a company, individual, product, or brand
price
that which is given up in an exchange to acquire a good or service
revenue
the price charged to customers multiplied by the number of units sold
profit
revenue minus expenses
market share
a company’s product sales as a percentage of total sales for that industry
demand
the quantity of a product that will be sold in the market at various prices for a specified period
supply
the quantity of a product that will be offered to the market by a supplier at various prices for a specified period
elasticity of demand
consumers responsiveness or sensitivity to changes in price
elastic demand
a situation in which consumer demand is sensitive to changes in price
inelastic demand
a situation in which an increase or decrease in price will not significantly affect demand for the product
unitary elasticity
a situation in which total revenue remains the same when prices change
dynamic pricing
a strategy whereby prices are adjusted over time to maximize a company’s revenues
variable cost
a cost that varies with changes in the level of output
fixed cost
a cost that does not change as output is increased or decreased
yield management systems (YMS)
a technique for adjusting prices that uses complex mathematical software to profitably fill unused capacity by discounting early purchases, limiting early sales at these discounted prices, and overlooking capacity
marginal cost (MC)
the change in total costs associated with a one-unit change in output
markup pricing
the cost of buying the product from the producer, plus amounts for profit and for expenses not otherwise accounted for
keystoning
the practice of marking up prices by 100 percent, or doubling the cost
profit maximization
a method of setting prices that occurs when marginal revenue equals marginal cost
marginal revenue (MR)
the extra revenue associated with selling an extra unit of output or the change in total revenue wit a one-unit change in output
prestige pricing
charging a high price to help promote a high-quality image
price strategy
a basic, long-term pricing framework that establishes the initial price for a product and the intended direction for price movements over the product life cycle
price skimming
a pricing policy whereby a firm charges a high introductary price, often couples with heavy promotion
penetration pricing
a pricing policy whereby a firm charges a relatively low price for a product initially as a way to reach the mass market
status quo pricing
charging a price identical to or very close to the competition’s price
unfair trade practices act
laws that prohibit wholesalers and retailers from selling below cost
price fixing
an agreement between two or more firms on the price they will charge for a product
predatory pricing
the practice of charging a very low price for a product with the intent of driving competitors out of business or out of a market
base price
the general price level at which the company expects to sell the good or service
quantity discount
a price reduction offered to buyers buying in multiple units or above specified dollar amount
rebate
a cash refund given for the purchase of a product during a specific period
product line pricing
maximizes profits for an entire product line