UNCC Marketing Concepts Exam 3

Utility vs Cost
= Perceived value
final consumer
product and place
business buyers
product, place, price, and promotion
profit-oriented
profit maximization, satisfactory profits and return on investment
sales-oriented
sales maximization
status que
maintaining price, meeting competitors price
profit
TR-TC OR (P*Q)-(FC+VC)
total revenue
P(Q)
total cost
FC+VC
product life cycle
introductory stage
growth stage
maturity stage
decline stage
competitive market
pure competition
monopolistic competition
oligopoly
pure monopoly
demand
consumer taste
price and availability of similar products
consumer income
average revenue
=TR/Q or =P
marginal revenue
change in TR, from one additional U
elasticity of demand
(Q2-Q1)/[(Q2+Q1)/2] divided by
(P2-P1)/[(P2+P1)/2]
inelastic
<1
elastic
>1
unitary
=1
fixed cost
sum of expenses that are stable and do not change
(building/salaries)
variable cost
vary directly with the quantity
(labor and materials)
unit variable cost
VC/Q
marginal cost
change in TC, from having one more U
profit maximization
MC=MR
break-even analysis
FC/(P-UVC)
break-even point
TR=TC
skimming
setting a high introductory P
when demand is satisfied, the firm lower the P (inelastic demand, legal protection, tech. breakthrough, blocked entry to competitors)
penetration pricing
setting a low initial price on new product to immediately attract the mass market (demand is price sensitive, no different price segments)
prestige
setting high price so that quality of conscious consumers will be attracted (if P is lowered beyond some point then demand actually falls)
price lining
a firm sells a line of products may price them at a number of different specific pricing points
odd-even
setting price a few dollars or cents under and even number (11.99)
bundled
marketing two or more products in one package price
yield management
charging of different prices to max revenue for a set amount
markup pricing
adding a fixed % to the cost of all items in a product class (furniture, clothing, or grocery)
price
= markup + cost
markup on selling point
= (selling price – U COGS) / selling price OR markup at cost / (1+markup at cost)
markup at cost
= markup on selling price / (1-mark up on selling price)
selling price
=U COGS / (1-markup on selling price)
cost
= selling price * (1-markup at selling price)
target profit pricing formula
P = (TFC+TVS+$profit) / Q
customary
tradition of price
above-at-or-below market pricing
benchmarking price based on competitors’ price
loss leader pricing
selling a product below its customary price to attract attention to it
dynamic pricing
setting different prices for products in real time in response to supply and demand (Amazon)
clickstream
online marketers monitor an online shoppers “clickstream”
discounts
quantity
seasonal
trade
quantity
non cumulative: applies to individual orders/large orders
cumulative: accumulation of purchases of a product over a given period of time/repeat purchases
seasonal
encourage buyer to stock inventory earlier than their normal demand
trade
manufactures gives a trade to resellers in the marketing channel on the basis of where they are in the channel and market activities
cash
to encourage retailers to pay their bills quickly, offer cash discounts
trade in
price reduction
promotional
undertaking certain advertising or selling activities to promote a product
marketing channels
individuals and firms involved in the process of making a product or service available for use or consumption
midman
between manufacture and end user
agent/broker
legal authority to act on behalf of manufacture
wholesaler
intermediary sells to other intermediary
retailer
intermediary who seek to consumer
distributor
selling, maintaining inventories, extending credit
dealer
more imprecise term than distributor
transactional function
buying
selling
risk taking
logistical function
assorting
storing
sorting
transporting
facilitating function
financing
grading
market information and research
marketing channels for Consumer Offerings
agent
wholesaler
retailer
marketing channel for Business Offerings
agent
industrial distributor
electronic marketing channel
wholesaler or dealer
virtual retailer/broker/agent
general merchandise
full line wholesaler
specialty merchandise
limited one wholesaler
agents and broker
manufacturing agents
selling agents
brokers
manufactures
branch offices
sales offices
corporate systems
forward integration
backward integration
(Polo Ralph Lauren)
contractual systems
(most common)
wholesaler-sponsored voluntary chains
retailer-sponsored cooperatives
franchising
administered system
buyer requirements
information
convenience
variety
pre or post-sale service
sources of channel conflict
vertical conflict
disintermediation
horizontal conflict
clayton act and sherman act
CA: vertical integration
trying arrangements
exclusive dealings
refusal to deal
dual distribution
SA: dual distribution
Resale restriction
4 positional strategies for retailers (values and products)
low value/broad products (Walmart)
low value/narrow products (Payless)
high value/broad products ….(bloomingdales)
high value/ narrow products (Tiffany)
integrated marketing communications
method of carefully coordinating all promotional activities to produce a consistent, unified message that is customer focused
communication process
sales promotion
personal selling
packaging
communication
customer focused
direct marketing
public relations
media advertising
target audience
= informing(sale today) + persuading(shop here) + reminding(buy my brand)
6 elements of communication process
source
encide
message
decode
reciever
response/feedback
personal selling
high value
direct and face-to-face
two-way
reaches audience slow
tailored to prospects, few customers
advertising
low value
indirect and non-personal
one-way
reaches audience fast
same message to all, many customers
–advertisement, outdoor, sponsorship, and movies
sales promotion
usually indirect and non-personal
mostly on-way
reaches audience fast
same message to varied target
types of ales promotions
free samples
contest
premiums
trade shows
sweepstakes
coupons
public relations
usually indirect, non-personal
one-way
reaches audience usually fast
usually no direct control
factors affecting choice of promotion mix
target market
stage in Product Life Cycle
nature of products
types of buying decisions
push/pull strategy
target market
advertising/sales promotion/less personal selling
–for: scattered market
informed buyers
repeat buyers
nature of product
complexity
risk
ancillary service
types of buying decisions
routine
not routine or complex
complex
push strategy
mainly personal selling directed to intermediaries
pull strategy
mainly advertising directed to consumers
promotional decisions includes
planning
implementation
evaluation