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Market Share

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Company sales divided by Market sales

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Value-Based Pricing

answer

Setting the price of a product based on buyer's perceptions of value rather than on the seller's cost. The marketer CANNOT design a product and marketing program and then set the price.

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Good-Value Pricing

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Offering just the right combination of quality and good service at a fair price Ex - Dollar General

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Value-Added Pricing

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Attaching value-added features and services to differentiate a company's offers and charging higher prices Ex - AMC Theaters improving their theaters by adding new luxury seats and dine / wine services so they can charge higher prices

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Cost-Based Pricing

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Setting prices based on the costs of producing, distributing, and selling the product plus a fair rate of return for effort and risk.

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Fixed Costs (Overhead)

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Costs that do not change with production or sales level

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Variable Costs

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Costs that vary directly with the level of production

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Total Costs

answer

The sum of fixed and variable costs for any given level of production

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Cost-Plus Pricing

answer

Adding a standard markup to the cost of a product Aka - Markup Pricing

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Break-Even Pricing

answer

Setting price to break even on the costs of making and marketing a product or setting price to make a target return

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Competition-Based Pricing

answer

Setting prices based on competitors strategies, prices, costs, and market offerings

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Price Elasticity

answer

A measure of the sensitivity of demand to changes in price

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Target Costing

answer

Pricing that starts with an ideal selling price, then targets costs that will ensure that the price is met Reverses usual process of designing first and then setting a price last

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Captive-Product Pricing

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Type of product mix pricing strategy that requires setting a price for products that must be used along with a main product, such as blades for a razor and games for a video-game console Pricing products that must be used with the main product.

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Optional-Product Pricing

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Type of product mix pricing strategy that requires the pricing of optional or accessory products along with the main product

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Product Line Pricing

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Type of product mix pricing strategy that requires setting the price steps between various products in a product line based on cost differences between the products, customer evaluations of different features, and competitors' prices. Setting prices across an entire product line Ex - Toyota, Lexus

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By-Product Pricing

answer

Type of product mix pricing strategy that requires setting a price for by-products in order to make the main product's price more competitive

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Bundle Pricing

answer

Type of product mix pricing strategy that requires combining several products and offering the bundle at a reduced price

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Market-Skimming Pricing

answer

Type of new product pricing strategy that requires setting a high price for a new product to skim maximum revenues layer by layer from the segments willing to pay the high price The company makes fewer but more profitable sales

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Market-Penetration Pricing

answer

Type of new product pricing strategy that requires setting a low price for a new product in order to attract a large number of buyers and a large market share

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Discount and Allowance Pricing

answer

Type of price adjustment strategy that involves reducing prices to reward customer responses such as volume purchases, paying early, or promoting the product.

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Seasonal Discount

answer

A straight reduction in price on purchases during a stated period of time or of larger quantities.

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Allowance

answer

Promotional money paid by manufacturers to retailers in return for an agreement to feature their products in some way

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Segmented Pricing

answer

Type of price adjustment strategy that involves adjusting prices to allow for differences in customers, products, or locations Selling a product or service at two or more prices, where the difference in prices is not based on differences in costs.

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Promotional Pricing

answer

Type of price adjustment strategy that involves temporarily pricing products below the list price, and sometimes even below cost, to increase short-run sales

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Dynamic Pricing

answer

Type of price adjustment strategy that involves adjusting prices continually to meet the characteristics and needs of individual customers and situations Ex - Supply and Demand

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Net Marketing Contribution

answer

Net Sales - Cost of Goods Sold - Marketing Expense

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Marketing Return on Sales (ROS)

answer

Net Marketing Contribution / Net Revenue

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Marketing Return On Investment (ROI)

answer

Net Marketing Contribution / Marketing Expenses

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Gross Margin

answer

Revenue - Cost of Goods Sold

question

Gross Margin Percentage Calculation

answer

Gross Margin / Revenue

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Marketing Channel

answer

A set of interdependent organizations (intermediaries) that help make a product or service available for use or consumption by the consumer or business user. Ex - Apple selling their music via the Internet on iTunes Rental Car services like Enterprise having offices by the airport

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Channel Level

answer

A layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer.

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Direct Marketing Channel

answer

A marketing channel that has no intermediary levels Ex - Producer --> Consumer

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Indirect Marketing Channel

answer

A marketing channel containing one or more intermediary levels Ex - Producer --> Wholesaler --> Retailer --> Consumer

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Vertical Marketing System (VMS)

answer

A channel structure in which producers, wholesalers, and retailers act as a unified system. One channel member owns the others, has contracts with them, or has so much power that they all cooperate. Ex - Producer, wholesaler, retailer --> Consumer

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Horizontal Marketing System (HMS)

answer

A channel arrangement in which two or more companies at one level join together to follow a new marketing opportunity Ex- Fox and Disney ABC joining together to own and market Hulu

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Value Delivery Network

answer

The network made up of the company, suppliers, distributors, and ultimately consumers who "partner" with each other to improve the performance of the entire system in delivery customer value

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Marketing Logistics (Physical Distribution)

answer

Planning, implementing, and controlling the physical flow of goods, services, and related information from points of origin to points of consumption to meet consumer requirements at a profit

question

Supply Chain Management

answer

Managing upstream and downstream value-added flows of materials, final goods, and related information among suppliers, the company, resellers, and final consumers.

question

Upstream Supply Chain Partners

answer

Firms that supply the raw materials, components, parts, and other elements required to create a good

question

Downstream Supply Chain Partners

answer

Marketing channel partners that link the firm to the customers

question

Promotion Mix (Marketing Communication Mix)

answer

The specific blend of promotion tools that the company uses to engage customers, persuasively communicate customer value, and build customer relationships

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Advertising

answer

Any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor.

question

Personal Selling

answer

Personal customer interactions by the firm's sales force for the purpose of engaging customers, making sales, and building customer relationships.

question

Public Relations (PR)

answer

Building good relationships with the company's various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, or events

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Direct Marketing

answer

Engaging directly with carefully targeted individual consumers and customer communities to both obtain an immediate response and build long lasting customer relationships

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Content Marketing

answer

Creating, inspiring, and sharing brand messages and conversations with and among consumers across a fluid mix of paid, owned, earned, and shared channels (advertising) Engages customers, builds relationships with them, and moves them to action.

question

Integrated Marketing Communications

answer

Carefully integrating and coordinating the company's many communications channels to deliver a clear, consistent, and compelling message about the organization and its brands.

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Push Strategy

answer

A promotion strategy that calls for using the sales force and trade promotion to push the product through channels. The producer promotes the product to channel members who in turn promote it to final customers.

question

Pull Strategy

answer

A promotion strategy that calls for spending a lot on consumer advertising and promotion to induce final consumers to buy the product, creating a demand vacuum that "pulls" the product through the channel

question

Reach

answer

A measure of the percentage of people in the target market who are exposed to an ad campaign during a given period of time.

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Frequency

answer

A measure of how many times the average person in the target market is exposed to a message.

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Gross Rating Points

answer

Reach x Frequency

question

Steps to Creating an Advertising Program

answer

1. Setting your advertising objectives 2. Setting your advertising budget 3. Developing your advertising strategy 4. Evaluating advertising effectiveness

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Advertising Objective

answer

A specific communication task to be accomplished with a specific target audience during a specific period of time. To help engage customers and build customer relationships by communicating customer value. To inform, persuade, and remind.

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Percentage-of-Sales Method

answer

Setting the promotion budget at a certain percentage of current or forecasted sales or as a percentage of the unit sales price

question

Advertising Strategy

answer

The strategy by which the company accomplishes its advertising objectives. It consists of two major elements: creating advertising messages and selecting advertising media

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Creative Concept

answer

The compelling "big idea" that will bring an advertising message strategy to life in a distinctive and memorable way.

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Advertising Media

answer

The ways through which advertising messages are delivered to their intended audience.

question

TV - Pro and Con

answer

Pro - good mass-marketing coverage; low cost per exposure; combines sight, sound, and motion; appealing to the senses Con - High absolute costs; high clutter; fleeting exposure; less audience selectivity

question

Magazine - Pro and Con

answer

Pro - high geographic and demographic selectivity; credibility and prestige; high-quality reproduction; long life and good pass-along readership Con - Long ad purchase lead time; high cost; no guarantee of promotion

question

Radio - Pro and Con

answer

Pro - good local acceptance; high geographic and demographic selectivity; low cost Con - Audio only; fleeting exposure; low attention (the half heard medium); fragmented audiences

question

Outdoor - Pro and Con

answer

Pro - Flexibility; high repeat exposure; low cost; low message competition; good positional selectivity Con - Little audience selectivity; creative limitations

question

Sales Force Compensation

answer

Needed to attract good salespeople; Motivates salespeople and directs their activities

question

What are the 4 elements that make up Compensation?

answer

1. A fixed amount - salary, gives stable income 2. A variable amount - commissions or bonuses based on sales performance 3. Expenses - repays for job-related expenditures 4. Fringe Benefits - vacations, sick leave, pensions

question

Sales Person

answer

An individual who represents a company to customers by performing one or more of the following activities: prospecting, communicating, selling, servicing, information gathering, and relationship building Can either be an ORDER TAKER (store or department clerk) or an ORDER GETTER (demands creative selling and relationship building)

question

Sales Force Management

answer

Analyzing, planning, implementing , and controlling sales force activities

question

Territorial Sales Force Structure

answer

A sales force organization that assigns each salesperson to an exclusive geographic territory in which that salesperson sells the company's full line

question

Product Sales Force Structure

answer

A sales force organization in which salespeople specialize in selling only a portion of the company's products or lines

question

Customer Sales Force Structure

answer

A sales force organization in which salespeople specialize in selling only to certain customers or industries

question

Team Selling

answer

Using teams of people from sales, marketing, engineering, finance, technical support, and even upper management to service large, complex accounts

question

Sales Quota

answer

A standard that states the amount a salesperson should sell and how sales should be divided among the company's product

question

Social Selling

answer

Using online, mobile, and social media to engage customers, build stronger relationships, and improve sales performance

question

Salespeople Process

answer

Designing sales force strategy and structure --> Recruiting and selecting salespeople --> training salespeople --> compensating salespeople --> supervising salespeople --> evaluating salespeople

question

Selling Process

answer

The steps that salespeople follow when selling, which includes prospecting and qualifying, preapproach, approach, presentation and demonstration, heading objectives, closing, and follow-up

question

Prospecting

answer

The sales step in which a salesperson or company identifies qualified potential customers

question

Preapproach

answer

The sales step in which a salesperson learns as much possible about a prospective customer before making a sales call

question

Approach

answer

The sales step in which a salesperson meets the customer for the first time

question

Presentation

answer

The sales step in which a salesperson tells the "value story" to the buyer, showing how the company's offer solves the customer's problems

question

Heading Objectives

answer

The sales step in which a salesperson seeks out, clarifies, and overcomes any customer objections to buying

question

Closing

answer

The sales step in which a salesperson asks the customer for an order

question

Follow-Up

answer

The sales step in which a salesperson follows up after the sale to ensure customer satisfaction and repeat business

question

Sales Promotions

answer

Short-term incentives to encourage the purchase or sale of a product or a service

question

Business Promotions

answer

Sales promotion tools used to generate business leads, stimulate purchases, reward customers, and motivate salespeople

question

Trade Promotions

answer

Sales promotion tools used to persuade resellers to carry a brand, give it shelf space, promote it in advertising, and PUSH it to customers.

question

Consumer Promotions

answer

Sales promotion tools used to boost short-term customer buying and engagement or enhance long-term customer relationships. PULL the customers

question

Good Salesperson Qualities

answer

Well-educated and well-trained professionals who add value for customers and maintain long-term customer relationships. Listen to their customers, assess customer needs, and organize the company's efforts to solve customer problems

question

Mass Marketing

answer

Targeting broad markets with standardized messages and offers and distributing them through intermediaries

question

Digital and Social Media Marketing

answer

Using digital marketing tools such as Web sites, social media, mobile apps and ads, online video, email, and blogs to engage consumers everywhere, anytime via their digital devices

question

Online Marketing

answer

Marketing via the Internet using company web sites, online advertisements and promotions, email, online video, and blogs

question

Social Media

answer

Independent and commercial online social networks where people congregate to socialize and share messages, opinions, pictures, videos, and other content

question

Mobile Marketing

answer

Marketing messages, promotions, and other marketing content delivered to on-the-go consumers, through mobile phones, smartphones, tablets, and other mobile devices

question

Direct-Mail Marketing

answer

Marketing that occurs by sending an offer, announcement, reminder, or other item directly to a person at particular address

question

Catalog Marketing

answer

Direct marketing through print, video, or digital catalogs that are mailed to select customers, made available in stores, or presented online

question

Telemarketing

answer

Using the telephone to sell directly to customers

question

Direct-Response Television (DRTV) Marketing

answer

Direct marketing via television, including direct-response television advertising (or informercials) and interactive television (iTV) advertising

question

Viral Marketing

answer

The digital version of word-to-mouth marketing: videos, ads, and other marketing content that is so infectious that customers will seek it out or pass it along to friends

question

Online Advertising

answer

Advertising that appears while consumers are browsing online, including display ads and search related ads

question

Loss Leader

answer

A pricing strategy where a product is sold at a price below it's market cost to stimulate other sales of more profitable goods or services.

question

Wholesaling

answer

All the activities involved in selling goods and services to those buying for resale or business use

question

Broker

answer

A wholesaler who does not take title to goods and whose function is to bring buyers and sellers together and assist in negotiation

question

Agent

answer

A wholesaler who represents buyers or sellers on a relatively permanent basis, performs only a few functions, and does not take title to the goods

question

Standardized Global Marketing

answer

A global marketing strategy that basically uses the same marketing strategy and mix in all of the company's international markets

question

Adapted Global Marketing

answer

A global marketing approach that adjusts to the marketing strategy and mix elements to each international target market, which creates more costs but hopefully produces a larger market share and return

question

Global Firms

answer

A firm that, by operating in more than one country, gains R&D, production, marketing, and financial advantages in its costs and reputation that are not available to purely domestic competitors

question

What are the 3 ways to enter a foreign market?

answer

1. Exporting 2. Joint Venturing 3. Direct Investment

question

Exporting

answer

Entering foreign markets by selling goods produced in the company's home country and sending them to the foreign country, often with little modification

question

Joint Venturing

answer

Entering foreign markets by joining with foreign companies to produce or market products or services

question

Licensing

answer

Type of joint venturing that involves entering foreign markets through developing an agreement with a licensee in that foreign market

question

Contract Manufacturing

answer

A joint venture in which a company contracts with manufacturers in a foreign market to produce its product or provide its service

question

Management Contracting

answer

A joint venture in which the domestic firm supplies the management know-how to a foreign company that supplies the capital; the domestic firm exports management services rather than products

question

Joint Ownership

answer

A joint (cooperative) venture in which a company creates a local business with investors in a foreign market who share ownership and control

question

Direct Investment

answer

Entering a foreign market by developing foreign-based assembly or manufacturing facilities

question

What is the biggest grocery store in the US?

answer

The Kroger Co

question

What is the biggest industry in the US?

answer

1. Insurance and finance 2. Health Care 3. Manufacturers

Marketing 310 – Exam 3 – Flashcards

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