question

place

answer

making goods and services available in the right quantities and locations, when customers want them

question

channel of distribution

answer

any series of firms or individuals who participate in the flow of products from producer to final user or consumer

question

direct marketing

answer

direct communications between a seller and an individual customer using a promotion method other than face-to-face personal selling

question

discrepancy of quantity

answer

the difference between the quantity of products it is economical for a producer to make and the quantity final users or consumers normally want

question

discrepancy of assortment

answer

the difference between the lines a typical producer makes and the assortment final consumers or users want

question

accumulating

answer

collecting products from many small producers

question

bulk-breaking

answer

dividing larger quantities into smaller quantities as products get closer to the final market

question

sorting

answer

separating products into grades and quantities desired by different target markets

question

assorting

answer

putting together a variety of products to give a target market what it wants

question

channel captain

answer

a manager who helps direct the activities of a whole channel and tries to avoid or solve conflicts

question

vertical marketing systems

answer

channel systems in which the whole channel focuses on the same target market at the end of the channel

question

corporate channel systems

answer

corporate ownership all along the channel

question

vertical integration

answer

acquiring firms at different levels of channel activity

question

contractual channel systems

answer

the channel members agree by contract to cooperate with each other

question

ideal market exposure

answer

makes a product available widely enough to satisfy target customers' needs but not exceed them

question

intensive distribution

answer

selling a product through all responsible and suitable wholesalers or retailers who will stock or sell the product

question

selective distribution

answer

selling through only those intermediaries who will give the product special attention

question

exclusive distribution

answer

selling through only one intermediary in a particular geographic area

question

multichannel distribution

answer

occurs when a producer uses several competing channels to reach the same target market — perhaps using several intermediaries in addition to selling directly

question

reverse channels

answer

channels used to retrieve products that customers no longer want

question

licensing

answer

selling the right to use some process, trademark, patent, or other right for a fee or royalty

question

logistics

answer

transporting, storing, and handling of goods in ways that match target

question

physical distribution

answer

another common name for logistics

question

customer service level

answer

how rapidly and dependably a firm can deliver what they, the customers, want

question

physical distribution concept

answer

says that all transporting, storing, and product-handling activities of a business and a whole channel system should be coordinated as one system that seeks to minimize the cost of distribution for a given customer level

question

total cost approach

answer

involves evaluating each possible PD system and identifying all of the costs of each alternative

question

supply chain

answer

the complete set of firms and facilities and logistics activities that are involved in procuring materials, transforming them into intermediate or finished products, and distributing them to customers.

question

electronic data interchange (EDI)

answer

an approach that puts information in a standardized format easily shared between different computer systems

question

transporting

answer

the marketing function of moving goods

question

containerization

answer

grouping individual items into an economical shipping quantity and sealing them in protective containers for transit to the final destination

question

piggyback service

answer

loading truck trailers — or flatbed trailers carrying containers — on railcars to provide both speed and flexibility

question

storing

answer

the marketing function of holding goods so they're available when they're needed

question

inventory

answer

the amount of goods being stored

question

private warehouses

answer

storing facilities owned or leased by companies for their own use

question

public warehouses

answer

independent storing facilities

question

distribution center

answer

a special kind of warehouse designed to speed the flow of goods and avoid unnecessary storing costs

question

retailing

answer

covers all of the activities involved in the sale of products to final consumers

question

specialty shop

answer

a type of conventional limited-line store — is usually small and has a distinct "personality"

question

department stores

answer

larger stores that are organized into many separate departments and offer many product lines

question

mass-merchandising concept

answer

says that retailers should offer low prices to get faster turnover and greater sales volumes by appealing to larger markets

question

supermarkets

answer

large stores specializing in groceries with self-service and wide assortments, developed in the United States during the 1930s Depression

question

discount houses

answer

offer "hard goods" (cameras, TVs, and appliances) at substantial price cuts to customers who would go to the discounter's low-rent store, pay cash, and take care of any service or repair problems themselves

question

mass-merchandisers

answer

large self-service stores with many departments that emphasize "soft goods" (housewares, clothing, and fabrics) and staples (like health and beauty aids) but still follow the discount house's emphasis on lower margins to get fast turnover

question

supercenters

answer

very large stores that try to carry not only food and drug items but all goods and services that the consumer purchases routinely

question

convenience (food) stores

answer

convenience-oriented variation of the conventional limited-line food stores

question

automatic vending

answer

selling and delivering products through vending machines

question

wheel of retailing theory

answer

says that new types of retailers enter the market as low-status, low-margin, low-price operators and then, if successful, evolve into more conventional retailers offering more services with higher operating costs and higher prices

question

scrambled merchandising

answer

carrying any product lines they think they can sell profitably

question

corporate chain

answer

a firm that owns and manages more than one store — and often it's many

question

franchise operation

answer

the franchisor develops a good marketing strategy, and the retail franchise holders carry out the strategy in their own units

question

wholesalers

answer

firms whose main function is providing wholesaling activities

question

merchant wholesalers

answer

own (take title to) the products they sell

question

agent wholesalers

answer

wholesalers who do not own the products they sell

question

Product advertising

answer

tries to sell a product

question

Institutional advertising

answer

promotes an organization's image, reputation, or ideas rather than a specific product

question

Pioneering advertising

answer

tries to develop primary demand for a product category rather than demand for a specific brand

question

Competitive advertising

answer

tries to develop selective demand for a specific brand

question

Direct type advertising

answer

aims for immediate buying action

question

Puffery

answer

making a vague claim that cannot be proved or disproved — is acceptable by the FTC

question

Indirect type advertising

answer

points out product advantages to affect future buying decisions

question

Comparative advertising

answer

means making specific brand comparisons — using actual product names

question

Reminder advertising

answer

tries to keep the product's name before the public

question

Corrective advertising

answer

ads to correct deceptive advertising

question

Innovators

answer

first to adopt

question

Early adopters

answer

well respected by their peers and often are opinion leaders

question

Early majority

answer

avoids risk and waits to consider a new idea after many early adopters have tried it — and liked it

question

Late majority

answer

cautious about new ideas

question

Laggards/non-adopters

answer

prefer to do things the way they've been done in the past and are very suspicious of new ideas

question

Primary demand

answer

demand for the general product idea — not just for the company's own brand

question

Selective demand

answer

demand for a company's own brand

question

Price

answer

the amount of money that is charged for "something of value"

question

Target return objective

answer

sets a specific level of profit as an objective

question

Profit maximization objective

answer

seeks to get as much profit as possible

question

Sales-oriented objective

answer

seeks some level of unit sales, dollar sales, or share of market — without referring to profit

question

Status quo objectives

answer

don't rock the pricing boat objectives

question

Non-price competition

answer

aggressive action on one or more of the Ps other than price

question

Skimming

answer

tries to sell the top (skim the cream) of a market — the top of the demand curve — at a high price before aiming at more price-sensitive customers

question

Penetration policy

answer

tries to sell the whole market at one low price

question

Basic list prices

answer

the prices final consumers or users are normally asked to pay for products

question

Discounts

answer

reductions from list price given by a seller to buyers who either give up some marketing function or provide the function themselves

question

Quantity discounts

answer

discounts offered to encourage customers to buy in larger amounts

question

Cumulative quantity discounts

answer

apply to purchases over a given period — such as a year — and the discount usually increases as the amount purchased increases

question

Noncumulative quantity discounts

answer

apply only to individual orders

question

Seasonal discounts

answer

discounts offered to encourage buyers to buy earlier than present demand requires

question

Cash discounts

answer

reductions in price to encourage buyers to pay their bills quickly

question

2/10, net 30

answer

means the buyer can take a 2 percent discount off the face value of the invoice if the invoice is paid within 10 days

question

Sale price

answer

a temporary discount from the list price

question

Everyday low pricing

answer

setting a low list price rather than relying on frequent sales, discounts, or allowances

question

Allowances

answer

are given to final consumers, business customers, or channel members for doing something or accepting less of something

question

Advertising allowances

answer

price reductions given to firms in the channel to encourage them to advertise or otherwise promote the suppliers products locally

question

Stocking allowances

answer

are given to an intermediary to get shelf space for a product

question

Push money (prize money) allowances

answer

are given to retailers by manufacturers or wholesalers to pass on to the retailers' salesclerks for aggressively selling certain items

question

Trade-in allowance

answer

a price reduction given for used products when similar new products are bought

question

Rebates

answer

refunds paid to consumers after a purchase

question

FOB

answer

"free on board" some vehicle at some place

question

Freight absorption pricing

answer

absorbing freight cost so that a firm's delivered price meets that of the nearest competitor

question

Value pricing

answer

setting a fair price level for a marketing mix that really gives the target market superior customer value

question

Unfair trade practice acts

answer

put a lower limit on prices, especially at the wholesale and retail levels

question

Dumping

answer

pricing a product sold in a foreign market below the price of producing it or at a price lower than in its domestic market

question

Phony list prices

answer

prices customers are shown to suggest that the price has been discounted from list

question

Wheeler-Lea Amendment

answer

bans "unfair or deceptive acts in commerce"

question

Price fixing

answer

competitors getting together to raise, lower, or stabilize prices — is common and relatively easy

question

Robinson-Patman Act

answer

makes illegal any price discrimination

question

Price discrimination

answer

selling the same products to different buyers at different prices — if it injures competition

question

markup

answer

a dollar amount added to the cost of products to get the selling price

question

markup (percent)

answer

means the percentage of selling price that is added to the cost to get the selling price

question

markup chain

answer

the sequence of markups firms use at different levels in a channel — determines the price structure in the whole channel

question

stockturn rate

answer

the number of times the average inventory is sold in a year

question

average-cost pricing

answer

adding a reasonable markup to the average cost of a product

question

total fixed cost

answer

the sum of those costs that are fixed in total — no matter how much is produced

question

total variable cost

answer

the sum of those changing expenses that are closely related to output

question

total cost

answer

the sum of total fixed and total variable costs

question

average cost (per unit)

answer

total cost divided by quantity

question

average fixed cost (per unit)

answer

total fixed cost divided by quantity

question

average variable cost (per unit)

answer

total variable cost divided by quantity

question

breakeven analysis

answer

evaluates whether the firm will be able to break even — that is, cover all its costs — with a particular price

question

breakeven point (BEP)

answer

the quantity where the firm's total cost will just equal its total revenue (total fixed cost divided by fixed cost contribution per unit)

question

fixed-cost contribution per unit

answer

the assumed selling price per unit minus the variable cost per unit

question

value-in-use pricing

answer

setting prices that will capture some of what customers will save by substituting the firm's product for the one currently being used

question

reference price

answer

the price they expect to pay for many of the products they purchase

question

leader pricing

answer

setting some very low prices — real bargains — to get customers into retail stores

question

bait pricing

answer

setting some very low prices to attract customers but trying to sell more expensive models or brands once the customer is in the store

question

psychological pricing

answer

setting prices that have special appeal to target customers

question

dynamic pricing

answer

a pricing strategy in which businesses set highly flexible prices for products or services based on current market demands

question

surge pricing

answer

occurs when a company raises the price of its offering if there is an increase in demand

question

odd-even pricing

answer

setting prices that end in certain numbers

question

price lining

answer

setting a few price levels for a product line and then marking all items at these prices

question

demand-backward pricing

answer

setting an acceptable final consumer price and working backward to what a producer can charge

question

prestige pricing

answer

setting a rather high price to suggest high quality or high status

question

product-bundle pricing

answer

setting one price for a set of products

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