AGB – Flashcard
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Supermarkets are self serve retailers that specialize in food and some non food products
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TRUE
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A merchant wholesaler is an institution that buys goods from manufacturers and resells them to businesses, gov agencies and other wholesalers or retailers
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TRUE
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As products move through the marketing channel, channel members provide specialization and division of labor, overcome discrepancies and provide contact efficiency
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TRUE
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Retailing can be defined as all activities directly related to the sale of goods and services to the ultimate consumer for personal, nonbusiness use
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TRUE
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The six Ps of retailing are product, place, price, promotion, personnel, planning
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FALSE---> PRESENTATION
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A marketer using a profit maximization strategy will charge the highest prices the market will bear
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FALSE (increase customer satisfaction and cut operation costs)
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The direct channel is used more often in consumer markets than in business-to-business markets
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TRUE
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Price should not be used as a promotional tool
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FALSE? CH 15/18
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The logistical functions performed by intermediaries include physically distributing, storing, sorting and financing
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TRUE
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Many businesses find recessions to be an excellent time to build market share through use of price shading
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FALSE pg 327
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Jones soda is positioned as the anti coke. In the earlier years, few mainstream retailers sold Jones soda. Fans had to get Jones in surf shops, tattoo parlors, bookstores, adding to the brands mystique. Jones soda used its ***** to create competitive advantage.
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?????
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_____are large departmentalized self service retailers that specialize in wide assortments of food and non food items
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SUPERMARKETS
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Price is best described as that
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which is given up in exchange to acquire a good or service
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_____is defined as all activities directly related to the sale of goods and services to the ultimate consumer for personal and non business use or consumption.
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RETAILING
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Why are marketing managers finding it more difficult to set prices in today's environment?
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The high rate of new product introductions has led to careful reevaluation by customers?
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An organization is using ______ when it sets prices so that the total revenue is as large as possible relative to total cost.
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PROFIT MAXIMIZATION
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Kraft Foods produces millions of packages of Chips Ahoy cookies each year, but consumers only want to purchase one package at a time. The difference between what Kraft produces and what consumers want to buy is _____
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DISCREPANCY OF QUANTITY
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Two effective pricing tactics that can be used during a recession to build or hold market share are ____
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Value based pricing and bundling or unbundling. (pg 32)
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A 16oz bottle of Prairie Herb vinegar sells for 4.95, and a 16oz bottle of Heinz vinegar sells for 1.05. PH vinegar is new to the market and perceived to be of higher quality and provides a unique flavor to foods used the same way as Heinz. PH vinegar is most likely using a _____
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a price skimming policy
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As a short term pricing objective, ______ can be effectively used on a temporary basis to sell off excessive inventory
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sales maximization
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TOMA
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Top Of Mind Awareness reached by being a well-known brand
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ELP
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Every Day Low Prices on any given/average basket *Prices always change because they want the lowest price *More variety = higher prices *Bulk = cheaper
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VPL
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value price marketing deep cuts on few items overall increase $
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Reach
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Number of target consumers exposed to advertisement
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Frequency
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Number of times an individual is exposed to an advertisement (more important than reach)
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Pull Strategy
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Stimulates consumer demand with promotional efforts on the end of the consumer (communicate directly to consumer & "pull" through channel)
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Push Strategy
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Selling to the wholesaler or retailer to carry the product "push" through the channel
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Facing
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Creates the look of a perfectly stocked store
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Impulse Buy
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Unplanned decision made just before the purchase
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Shelf Talker
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Printed card or sign to call the buyers attention
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Create an outline that compares strengths and weaknesses of radio, TV, Print, and Billboard advertising. Determine the combination of a $100,000 ad budget FL should spend on the product promotion. How could you use PR in this promotion?
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???
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3 examples why food marketers have a method to madness of marketing properly
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???
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Identify 4 stages in product lifecycle, the promotional theme for each stage and 3 distinguishing characteristics
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???
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A mind that is stretched by a new experience can never go back to its old dimensions" Apply to marketing
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???
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Marketing Channel Functions
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Transactional Functions--> contacting and promoting (potential customers), negotiating terms, assuming inventory risk Logistical Functions--> physically distributing (transportation and sorting goods), storing, sorting Facilitating Functions--> researching (gathering information about other channel members and consumers) and financing
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Factors Affecting Channel Choice
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Market Factors--> target consumers (size of market too) Product Factors--> more customized = direct, more standard = intermediaries Producer Factors
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Levels of Distribution Intensity
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Intensive Distribution--> max market coverage Selective Distribution Exclusive Distribution--> specialty goods
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types of supply chain integration
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relationship technology and planning measurement material and service supplier internal operations customer
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modes of transportation
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air rail water pipeline truck
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AIDA (promotional mix)
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a model that outlines the process for achieving promotional goals in terms of stages of consumer involvement with the message attention interest desire action
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consumer sales promotion
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targets the ultimate consumer market
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trade sales promotion
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directed to members of the marketing channel such as retailers and wholesalers
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goal of sales promotion
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immediate purchase--> short term choice
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tools for consumer sales promotion "pull"
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*coupons and rebates *premiums --> extra item offered to the consumer in exchange for purchase proof (happy meal) *loyalty marketing programs--> reward loyal customers for purchases *contests/sweepstakes *sampling *point of purchase display-->promotional display set up by retailer to advertise product and create traffic *online sales promotion
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tools for trade promotion "push"
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trade allowance (price reduction offer) push money training free merchandises store demonstrations conventions
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personal selling
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a purchase situation involving a personal, paid-for communication between two people in attempt to influence each other (good with complex goods with small customer base) ex: jets/ michael kors
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relationship selling
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builds trust loyalty win-win situation multiple time selling (continued relationship) ex: heavy machinery
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value is based upon
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perceived satisfaction price paid is based on the satisfaction consumers expect to receive from a product (not utility they actually receive)
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revenue
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price x quantity sold
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Types of Pricing Objectives
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1. Profit Oriented 2. Sales Oriented 3. Status Quo
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Profit Oriented P.O.
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Profit Maximization Satisfactory Profits Target Returns on Investments
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Profit Maximization
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setting prices so that total revenue is as large as possible relative to costs --> increasing customer satisfaction/ reduce costs
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Satisfactory Profits
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strive for profits that are satisfactory to stockholders (consistent with the level of risk)
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Target Return on Investment (ROI)
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a percentage that puts a firm's profits into perspective by showing profits relative to investment
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Sales Oriented P.O.
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based on market share or on dollar or unit sales Market Share Sales Maximization
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Market Share
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a company's product sales as a percentage of total sales for that industry increasing market share is an indicator of the effectiveness of their marketing mix
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Sales Maximization
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such a firm ignores profits, competition, and the marketing environment as long as sales are rising short on funds or a unforeseen future no profitability in the long run
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Status Quo Pricing
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a pricing policy that maintains existing prices or meets the competition's prices ex: gas stations
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demand
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the quantity of a product that will be sold in the market at various prices for a certain period
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supply
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the quantity of a product that will be offered to the market by a supplier at various prices for a certain time
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Factors that affect elasticity
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availability of substitutes price relative to purchasing power product durability uses rate of inflation
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Markup Pricing
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the cost of buying the product from the producer, plus the amounts for profits and for expenses not otherwise accounted for
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Keystoning
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the practice of marking up prices by 100%
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profit maximization pricing
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a method of setting prices that occurs when marginal revenue equals marginal cost
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Types of Pricing (Cost Determinate)
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Markup Pricing Profit Maximization Pricing Break-Even Pricing
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Break-Even Pricing
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a method of determining what sales volume must be reached before total revenue equals total costs
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Marketing Mix
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Product Price Place Promotion
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How to set a price on a product
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1. Establish pricing goals 2. Estimate demand, cost, and profits 3. Choose a pricing strategy 4. Fine-Tune the base price with pricing tactics
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Establish Pricing Goals
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Profit Oriented Sales Oriented Status Quo
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Pricing Strategies
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Price Skimming Penetration Pricing Status Quo Pricing
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Price Skimming
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used when product is perceived to have unique advantages -a pricing policy whereby a firm charges a high introductory price, often coupled with heavy promotion
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Penetration Pricing
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opposite of price skimming when aiming at increasing market share price-sensitive markets high sales -a pricing policy whereby a firm charges a relatively low price for a product initially as a way to reach the market mass
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Status Quo Pricing
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charging a price identical to or very close to the competition's price
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Price Fixing
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an agreement between two or more firms on the price they will charge for a product ILLEGAL--> high prices to customers
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Predatory Pricing
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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 ILLEGAL
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Base Price
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the general price level at which the company expects to sell the good or service
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Value-Based Pricing
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setting the price at a level that seems to the customer to be a good price compared to the prices of other options
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Pricing Products Too Low
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loose profits because they are met by competitors
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FOB origin pricing
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requires buyer to take freight costs from shipping point
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Single Price Tactic
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a price tactic that offers all goods and services at the same price (itunes)
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Flexible Pricing
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a price tactic in which different prices for essentially the same merchandise bought in equal quantities ex: cars
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Price Lining
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the practice of offering a product line with several items at specific price points
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Leader Pricing
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a price tactic in which a product is sold near or even below cost in the hope that shoppers will buy other items once in the store
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Bait Pricing
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a price tactic that tries to get consumers into a store through false or misleading price advertising and then uses high pressure selling to persuade consumers to buy expensive goods
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Price Bundling
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marketing two or more products in a single package for a special price
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Unbundling
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reducing the bundle of services that comes with the basic product (pay for gift wrapping)
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Two Part Pricing
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a price tactic that charges two separate amounts to consumer a single good or service gym/amusement parks
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Consumer Penalties
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an extra fee paid by the consumer for violating terms of purchase
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Joint Costs
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costs that are shared in the manufacturing and marketing of several products in a product line
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Pricing During Inflation
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Cost-Oriented Tactics Demand-Oriented Tactics
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Cost Oriented Tactics
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Delayed Quotation Pricing --> a firm price is not set until the item is either finished or delivered Escalator Pricing --> final price reflect cost increases between order and delivery
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Demand Oriented Pricing Tactics
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Price Shading--> the use of discounts by salespeople to increase demand for one or more products in a line
