UNCC Marketing Concepts Exam 3 – Flashcards
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Utility vs Cost
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= Perceived value
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final consumer
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product and place
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business buyers
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product, place, price, and promotion
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profit-oriented
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profit maximization, satisfactory profits and return on investment
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sales-oriented
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sales maximization
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status que
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maintaining price, meeting competitors price
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profit
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TR-TC OR (P*Q)-(FC+VC)
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total revenue
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P(Q)
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total cost
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FC+VC
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product life cycle
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introductory stage growth stage maturity stage decline stage
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competitive market
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pure competition monopolistic competition oligopoly pure monopoly
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demand
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consumer taste price and availability of similar products consumer income
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average revenue
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=TR/Q or =P
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marginal revenue
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change in TR, from one additional U
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elasticity of demand
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(Q2-Q1)/[(Q2+Q1)/2] divided by (P2-P1)/[(P2+P1)/2]
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inelastic
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<1
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elastic
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>1
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unitary
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=1
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fixed cost
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sum of expenses that are stable and do not change (building/salaries)
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variable cost
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vary directly with the quantity (labor and materials)
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unit variable cost
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VC/Q
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marginal cost
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change in TC, from having one more U
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profit maximization
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MC=MR
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break-even analysis
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FC/(P-UVC)
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break-even point
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TR=TC
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skimming
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setting a high introductory P when demand is satisfied, the firm lower the P (inelastic demand, legal protection, tech. breakthrough, blocked entry to competitors)
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penetration pricing
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setting a low initial price on new product to immediately attract the mass market (demand is price sensitive, no different price segments)
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prestige
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setting high price so that quality of conscious consumers will be attracted (if P is lowered beyond some point then demand actually falls)
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price lining
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a firm sells a line of products may price them at a number of different specific pricing points
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odd-even
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setting price a few dollars or cents under and even number (11.99)
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bundled
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marketing two or more products in one package price
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yield management
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charging of different prices to max revenue for a set amount
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markup pricing
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adding a fixed % to the cost of all items in a product class (furniture, clothing, or grocery)
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price
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= markup + cost
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markup on selling point
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= (selling price - U COGS) / selling price OR markup at cost / (1+markup at cost)
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markup at cost
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= markup on selling price / (1-mark up on selling price)
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selling price
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=U COGS / (1-markup on selling price)
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cost
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= selling price * (1-markup at selling price)
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target profit pricing formula
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P = (TFC+TVS+$profit) / Q
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customary
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tradition of price
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above-at-or-below market pricing
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benchmarking price based on competitors' price
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loss leader pricing
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selling a product below its customary price to attract attention to it
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dynamic pricing
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setting different prices for products in real time in response to supply and demand (Amazon)
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clickstream
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online marketers monitor an online shoppers "clickstream"
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discounts
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quantity seasonal trade
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quantity
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non cumulative: applies to individual orders/large orders cumulative: accumulation of purchases of a product over a given period of time/repeat purchases
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seasonal
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encourage buyer to stock inventory earlier than their normal demand
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trade
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manufactures gives a trade to resellers in the marketing channel on the basis of where they are in the channel and market activities
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cash
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to encourage retailers to pay their bills quickly, offer cash discounts
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trade in
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price reduction
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promotional
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undertaking certain advertising or selling activities to promote a product
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marketing channels
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individuals and firms involved in the process of making a product or service available for use or consumption
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midman
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between manufacture and end user
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agent/broker
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legal authority to act on behalf of manufacture
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wholesaler
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intermediary sells to other intermediary
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retailer
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intermediary who seek to consumer
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distributor
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selling, maintaining inventories, extending credit
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dealer
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more imprecise term than distributor
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transactional function
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buying selling risk taking
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logistical function
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assorting storing sorting transporting
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facilitating function
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financing grading market information and research
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marketing channels for Consumer Offerings
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agent wholesaler retailer
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marketing channel for Business Offerings
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agent industrial distributor
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electronic marketing channel
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wholesaler or dealer virtual retailer/broker/agent
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general merchandise
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full line wholesaler
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specialty merchandise
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limited one wholesaler
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agents and broker
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manufacturing agents selling agents brokers
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manufactures
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branch offices sales offices
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corporate systems
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forward integration backward integration (Polo Ralph Lauren)
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contractual systems
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(most common) wholesaler-sponsored voluntary chains retailer-sponsored cooperatives franchising
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administered system
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...
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buyer requirements
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information convenience variety pre or post-sale service
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sources of channel conflict
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vertical conflict disintermediation horizontal conflict
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clayton act and sherman act
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CA: vertical integration trying arrangements exclusive dealings refusal to deal dual distribution SA: dual distribution Resale restriction
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4 positional strategies for retailers (values and products)
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low value/broad products (Walmart) low value/narrow products (Payless) high value/broad products ....(bloomingdales) high value/ narrow products (Tiffany)
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integrated marketing communications
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method of carefully coordinating all promotional activities to produce a consistent, unified message that is customer focused
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communication process
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sales promotion personal selling packaging communication customer focused direct marketing public relations media advertising
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target audience
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= informing(sale today) + persuading(shop here) + reminding(buy my brand)
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6 elements of communication process
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source encide message decode reciever response/feedback
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personal selling
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high value direct and face-to-face two-way reaches audience slow tailored to prospects, few customers
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advertising
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low value indirect and non-personal one-way reaches audience fast same message to all, many customers --advertisement, outdoor, sponsorship, and movies
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sales promotion
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usually indirect and non-personal mostly on-way reaches audience fast same message to varied target
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types of ales promotions
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free samples contest premiums trade shows sweepstakes coupons
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public relations
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usually indirect, non-personal one-way reaches audience usually fast usually no direct control
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factors affecting choice of promotion mix
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target market stage in Product Life Cycle nature of products types of buying decisions push/pull strategy
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target market
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advertising/sales promotion/less personal selling --for: scattered market informed buyers repeat buyers
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nature of product
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complexity risk ancillary service
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types of buying decisions
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routine not routine or complex complex
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push strategy
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mainly personal selling directed to intermediaries
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pull strategy
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mainly advertising directed to consumers
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promotional decisions includes
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planning implementation evaluation
