Ch 9 – Marketing Mix: Product, Price, Promotion, and Place – Flashcards
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total product offer
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consists of all the benefits associated with a good, service, or idea that affected a consumer's purchasing decision. also called a value pack
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product differentiation
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the creation of a real or perceived difference in a product designed to attract customers
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new product development
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the five steps for developing a new product: idea generation, idea screening, product analysis, product development and concept testing, and commercialization
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product life cycle
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a theoretical model describing a product's sales and profits over the course of its lifetime
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product line
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a group of similar products intended for a similar market
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product mix
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the combination of all product lines offered for sale by a company
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product line length
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the number of items in any given product line. product line length is determined by how the addition or removal of items from a product line affects profit.
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product mix width
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the number of different product lines a company offers
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consumer products
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goods and services purchased by households for personal consumption
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business-to-business products
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goods and services purchased by businesses for further processing or resale or used in facilitating business operations. also called industrial products
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consumer product classification
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four classifications that emerge from strategic marketing mix plans for consumer products: convenience, shopping, specialty, and unsought goods and services
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business-to-business product classification
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five classifications that emerge from strategic marketing mix plans for B2B products: equipment; maintenance, repair, and operating (MRO) products; raw and processed materials; component parts; and specialized professional services. Also called industrial product classifications.
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logos
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representations of brands that help build an image of a company
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brand
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a name, term, symbol, or design that distinguishes a company and its products from all others
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band loyalty
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the degree to which customers consistently prefer one brand over all others
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brand insistence
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the highest degree of brand loyalty. it can turn a product into a specialty good or service that can command a might higher price
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brand equity
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the overall value of a brand's strength in the market
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brand awareness
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the extent to which a particular brand name is familiar within a particular product category
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brand association
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involves connecting a brand with other positive attributes, including image, product features, usage situations, organizational associations, brand personality, and symbols.
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brand manager
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a manager who is responsible for the 4 Ps of marketing a specific product lie. Brand managers attempt to increase the product's perceived value to customers in order to increase brand equity. Also called a product manager.
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price
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the only revenue-generating component of the marketing mix - product, promotion, and place (distribution) strategies are all cost components
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pricing strategies
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strategies sellers use to set prices. the most common include cost-based pricing, demand-based pricing, and competition-based pricing
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cost-based pricing
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charging a price in relation to the costs of providing the good or service. also called cost-plus pricing
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break-even analysis
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determines the production level for which total revenue is just enough to cover total costs
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fixed costs
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any costs that do not vary with the production level. total fixed costs typically include salaries, rent, insurance expenses, and loan repayments. Also called overhead costs.
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variable costs
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costs that vary with the production level. examples include wages, raw materials, and energy costs. average variable costs (or per unit variable costs) equal total variable costs divided by the production level
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demand-based pricing
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pricing a good or service based in the demand for the product or its perceived value. also called value-based pricing
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target costing
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a demand-based pricing strategy that estimates the value customers receive from a product and therefore the price they are willing to pay, and then subtracts an acceptable profit margin to obtain desires cost
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price discrimination
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a demand-based pricing strategy that involves charging different prices to different customers when these price differences are not a reflection of cost differences
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competition-based pricing
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a pricing strategy based on what the competition is charging. revenues and costs are secondary
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price skimming
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a pricing strategy that involves charging a high price for a product initially, then lowering the price over time
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penetration pricing
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a strategy of charging the lowest possible price for a new product
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discounts
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deductions from the regular price charged
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rebates
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partial refunds on what a customer has already paid for a product
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bundling
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when two or more products that usually complement one another are combined and sold at a single price
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dynamic pricing
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a pricing strategy where prices are determined directly between the buyer and seller, unlike the more traditional fixed pricing in which prices are set by the seller
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everyday low pricing
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a strategy of charging low prices with few if any, special promotional sales
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prestige pricing
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the practice of charging a high price to invoke perceptions of high quality and privilege. also called premium pricing
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psychological pricing
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the practice of charging a price just below a whole number to give the appearance of a significantly lower price. also called off or fractional pricing
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loss leader
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a product priced below its cost. stores use loss leaders to attract customers and motivate them to buy items that are more expensive as well
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reference pricing
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refers to listing an inflated price (the regular retail price, or manufactures suggested retail price) that is then discounted to appear as if it is a good value
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promotion
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a part of the marketing mix that consists of all the methods marketers use to inform and persuade targeted customers to buy a product and to build positive customer relationships
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promotional tools
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the tools marketers use to promote a good or service, including advertising, public relation, personal selling, and sales promotions
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promotional mix
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the strategic combination of promotional tools used to reach targeted customers to achieve marketing objectives
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effective promotional campaigns
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include six steps: identify the target market, determine marketing objectives, design the message, determine the budget, implement the promotional mix, and evaluate and adjust as needed
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integrated marketing communication
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a strategy to deliver a clear consistent, and unified message about the company and its products to customers at all contact points
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advertising
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paid, impersonal mass communicate from an identified sponsor to persuade or influence a targeted audience
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product placement
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the placement of products in TV shows, movies, and video games where they will be seen by potential customers
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infomercials
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television commercials that run as long as regular TV programs
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public relations
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the management function that establishes and maintains mutually beneficial relationships between an organization and its stakeholders
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controlled message
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public relations messages that include corporate (or institutional) advertising, advocacy advertising, and public service advertising
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semi-controlled messages
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public relation messages that are placed on websites, in chat rooms, and on blogs and are not strictly regulated. other forms include sporting or special events sponsorships because participation by the press and stakeholders is not under control of the sponsoring company
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uncontrolled messages
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public relations messages that generally take the form of publicity
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publicity
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information about an individual, organization, or product transmitted through mass media at no charge
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damage control
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a company's effort to minimize the harmful effects of a negative effect
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personal selling
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direct communication between a firm's sales force and potential buyers to make a sale and to build good customer relationships
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sales promotions
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short-term activities that target consumers and other business for generating interest in a product
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trade sales promotions
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incentives to push a product through the distribution system to final consumers. also called business-to-business sales promotions
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consumer sales promotions
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incentives designed to increase final consumer demand for a product
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place
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a component of the marketing mix that refers to all methods involved in getting the product into the hands of customers. also called distributions
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marketing intermediary
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a business firm that operates between producers and consumers or business users. also often called a middleman
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distribution channel
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a series of firms or individuals that participate in the flow of a product from manufacturer to consumer
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distributors
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the intermediaries in a distribution channel. also called wholesalers
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wholesalers
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intermediaries that buy and resell products to other wholesalers, retailers, or industrial users
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agents/brokers
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intermediaries that facilitate negotiations between buyers and sellers of goods and services but never take title (ownership) of the products traded
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retailers
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intermediaries that buy products for resale to ultimate consumers
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full-service wholesalers
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provide a full line of services; carrying stock, maintaining a sales force, offering credit, making deliveries, and providing management assistances
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limited-service wholesalers
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offer fewer services than full-service wholesalers. there are four major types: cash-and-carry wholesalers, truck wholesalers, drop shippers, and rack jobbers
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intensive distribution
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emails selling the product through all available retail outlets
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selective distributions
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uses only a portion of the many possible retail outlets for sale of a product
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exclusive distribution
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the use of only one outlet in a geographical area
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warehousing
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storing products at convenient locations ready for customers when they are needed
