marketing exam 2 (ch.9-15) – Flashcards
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Cost based pricing
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Setting prices based on the cost of producing
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Competition based pricing
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setting prices based on competitors strategies, prices, costs, and market offerings
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Customer value based pricing
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Uses buyers perception of value rather than on the sellers cost.
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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. i.e. Dollar menus, every car company offers a smaller more basic model
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value added pricing
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rather than lowering prices, you offer services or features to get a leg up on competitors. reward clubs free gutter cleaning w/house paint great service- guaranteed free 6 month warranty Free continental breakfeast
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cost plus pricing
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adding a standard markup to the cost of the product (standard profit margin for all products)
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break even pricing
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pricing strategy to simply break even
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target costing
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pricing that starts with an ideal selling price, then works around this set price to make sure it is met.
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market skimming
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Setting a high price then slowly lowering to skim the market and achieve highest revenues
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market penetration pricing
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setting an amazingly low price for your product to attract a large number of buyers
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segmented pricing
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selling a product or service at two or more prices, where the difference in price is based on difference in cost (iphone 6, iphone 6s, iphone 6s+)
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psychological pricing
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pricing that uses the psychology of prices and not simply economics. Want the price to say something about the product.
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By-product pricing
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Setting a price for by-products in order to make the main products price more competitive. ie. using your byproducts to make money (recycling your waste to make plastic bottles, food companies selling waste to farms)
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reference pricing
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Prices that buyers carry in their minds and refer to when they look at a given product. ie. cereal and milk
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captive product pricing
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setting a price for the product that must be used (razor handle) and then having high prices for other necessary accessories (razor blades) ie. Printers and ink
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dynamic pricing
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real time pricing- uses algorithms to compute cost. ie. Traveling industry (fluctuates based on time of day,month,year and how often you've visited site) Retail (if its your first time on site it shows lower prices, if your a loyal customer you may see higher prices)
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pure monopoly
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large # of buyers, one supplier
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monopolistic competition
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large # of buyers AND suppliers
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pure oligarchy
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large # of buyers, few suppliers
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pure competition
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businesses selling the same thing (gas stations). They're competitive advantages rely strictly on technological advances and branding
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price discrimination
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charging different prices to people for the same product or service based on demographics
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predatory pricing
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selling product far below cost with the intention of punishing or smothering an upcoming competitor.
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deceptive pricing
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when a seller states prices that mislead consumers or that are not actually available to consumers.
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price fixing
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sellers set prices WITH competitors so they can all agree to charge a high price
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price maintenance
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when a manufacturer requires sellers to charge a specified retail price. Can suggest but cannot refuse to sell to a dealer based on how they want to price.
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What is the purpose of a marketing intermediary from an economic standpoint? A) Serve as a PR manager for Co. B) Serve as liaison b/w Co. and customer C) Create a marketing strategy for product D) Assist in prod. and distrib. for product E) Transform an assortment of products into a mix desired by customers
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E). To Transform an assortment of products into a mix desired by customers
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Individual Touch is a company that sells trial size products such as soap, lotion, and mouthwash. The company has a distributor responsible for selling its products. how does this affect the number and complexity of contacts required by Individual Touch? A) The co. has one contact-the distributor B) The co. has several complex layers of contacts C) The co. has no contacts at all D) The co. has fewer contacts than if there was no distributor E) The co. has a number of contacts that varies with the number of customers and the number of products they wish to buy
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D) The company has fewer contacts than if there were no distributor
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Multi channel channel levels
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A single firm sets up two or more marketing channels to reach one or more customer segments ie. John Deere sells its familiar products at lowes and on TV, its tractors and planters through a premium (more b2b) network, and they sell their large construction and forestry equipment through selected large, full service John Deere dealers.
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Direct marketing channel levels
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A marketing channel that has no intermediaries ie. door to door sales or a mom and pop store
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Indirect marketing channel levels
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A marketing channel containing one or more intermediary levels ie. Omaha steaks selling in its store and online
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Disintermediation
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The removal or replacement of intermediaries in a marketing channel
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How does a conventional distribution channel differ from a vertical marketing system (VMS) A) A VMS is harder to control than a conventional distribution channel B) Intermediaries in a VMS are unified whereas in a conventional, the members are autonomous C) Conventional dist. Channels have more inherit power than a VMS D) A VMS has no dominating intermediaries whereas a conv. dist. channel has several dominating ones E) Conv. Dist. Channels involve fewer intermediaries than a VMS would.
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B) Intermediaries in a VMS are unified, whereas in a conventional distribution channel the members are autonomous.
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Which of the following is NOT considered when a company sets channel objectives? A) Nature of the company B) Targeted levels of service C) Marketing intermediaries D) Company location E) Company competitors
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D) Company location
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Intensive distribution
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Stocking the product in as many outlets as possible
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Exclusive distribution
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Giving a limited number of dealers the exclusive right to distribute the company's products
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Selective distribution
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the use of more than one, but fewer than all the intermediaries to carry your products
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Ready to Grow is a co. that produces clothing for infants and toddlers. For many years, it was a small company with only a local market, but in recent years, the company has grown and expanded. It is now looking for intermediaries to help with production and distribution of its products. What is the first thing that the co. should do in order to prepare to create new marketing channels. A) Evaluate effective channel alternative B) Develop a marketing plan C) Identify channel alternatives that will help the company D) Analyze the needs of its customers E) Determine whether it will use selective or exclusive distribution.
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D) Analyze the needs of its customers
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Phoenix Corp. is a manufacturer of leather goods. The company is expanding its products into leather shoes for both men and woman. They're marketing managers are finalizing the best distribution strategy for this product category. Which of the following if true, would weaken the argument for intensive distribution? A) The co. follows a penetration pricing policy to increase its market share B) Competitors follow an intensive distribution strategy C) The company plans to market the shoes as high end luxury brand D) Market research indicates that customers prefer convenience and easy access to products while shopping E) The company's attempts at direct channel distribution were not successful in past.
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C). The company plans to market the shoes as a high end luxury brand
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Phoenix Corp. is a manufacturer of leather goods. The company is expanding its products into leather shoes for both men and woman. They're marketing managers are finalizing the best distribution strategy for this product category. Which of the following if true, would strengthen the argument for intensive distribution? A) Consumers treat the kinds of shoes that phoenix will produce as commodities B) Phoenix seeks to enhance the brands image and generate the strongest support from retailers C) Phoenix is concerned about the effects of channel conflicts D) Competitors sell through exclusive outlets E) Phoenix wishes to build positive relationships with its retail partners by encouraging them to charge high mark-ups
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A) Consumers treat the kinds of shoes that phoenix will produce as commodities
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Which of the following is NOT a problem that must be considered when dealing with international distribution channels? A) Product availability B) Complex intermediary relationships C) Local customs D) Inadequate distribution systems E) Variation in distribution systems
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A) Product availability
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Floras Arrangements is a new flower-delivery store that focuses on creating predesigned arrangements using unique flowers from around the globe. Because its new, Flora is having a hard time attracting channel members to help supply and distribute for her business. What must Flora do to attain her goals? A) Send custom arrangements to prospective channel members to show the value of her products B) Create an extensive portfolio of all the flower combinations to illustrate the endless possibilities for profit C) Convince channel members that they can succeed better by creating a cohesive value delivery network D) Attract customers before contracting channel members to prove there is profit to be made E) Omit the intermediaries and run her business as a direct marketing channel
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C) Convince channel members that they can succeed better by creating a cohesive value delivery network
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Which of the following would NOT be a consideration when selecting a channel member? A) A company's sales and profits B) Customer needs C) Company's corporate structure D) Fit with company objectives E) The type of company
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C) The company's corporate structure
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What is the ultimate goal of marketing logistics? A) Provide targeted level of customer service at the least cost B) Maximize customer service and minimize distribution cost C) Provide minimal distribution cost for moderate customer service D) Provide maximum customer service at the least cost
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A) Provide targeted level of customer service at the least cost
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Old Town is a very old fashioned place when it comes to shopping. instead of having spread out stores, all of its stores and service buildings are in one location in the center of town. Along Main St. you can find department stores, supermarkets, clothing stores, banks, movie theaters, and other specialty stores. Which of the following is present in Old Town? A) Lifestyle center B) Regional shopping center C) Strip mall D) Power center E) Central business district
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E) Central business district
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Retail Convergence
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...
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Wheel-of-retailing concept
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new types of retailers often begin as low margin, low price, low status operations BUT later evolve into higher priced, higher service operations, eventually becoming like the conventional retailers they replaced
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Electronics Inc. is a new player in the electronics market and does not have a large market share. It sells cheap electronics to bargain shoppers, and does pretty risky business. As time passes, which of the following is most likely to happen to them? A) It will open up a franchise B) It will remain a bargain store C) It is impossible to tell D) It will go bankrupt E) It will gain prestige and sell higher value products
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E) It will gain prestige and sell higher value products - this is due to Wheel-of-retailing concept
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Eleni has been hired by a retail co. to negotiate sales between the co. and its suppliers and distributors. She works for an independent agency that is not affiliated with either parties. Which of the following describes her job? A) Broker B) She is a franchise C) Retail operator D) Re-seller E) An agent
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A) Broker
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Wendells Window Washers is a business that sells glass cleaner. Instead of working through an independent wholesaler, the co. prefers to handle its purchasing and selling itself. Which of the following best describes what is in place for the co? A) A warehouse operation B) A retail operation C) A manufacturer's sales branch D) A discount operation E) A Franchise
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C) A manufacturer's sales branch
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Discounts, displays, demonstrations, and coupons are used in which of the following methods of promotion? A) person selling B) Direct marketing C) Sales promotion D) Advertising E) PR
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C) Sales promotion
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A company is attempting to develop a better method of informing the public about its products and developing a good image in the eyes of the public. They hire a team to focus on advertising, PR, trains employees to sell products directly, and incorporates discounts and sles into its budget. Which of the following is the company working on? A) its execution style B) its marketing mix C) its advertising strategy D) its promotion mix E) its creative concept
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D) It's promotion mix
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Which of the following is NOT a recent change in marketing communications? A) the use of a promotion mix B) advances in communications in technology C) the marketing strategies being used D) A focus on narrow casting as opposed to broadcasting E) The information consumers are accessing
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A) The use of a promotion mix
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In a pull strategy, marketing activities are directed primarily toward which of the following? A) distributors B) channel members C) consumers D) suppliers E) Competitors
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C) Consumers
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Viva La Video game is a co. that understands that a successful promotion strategy includes a coordination of all marketing strategies. The co. focuses on bledning a mix of eprson selling, advertising, blah blah in order to push products. Which of the following are they engaigng in? A) Integrated marketing communications B) Cohesive advertising focus C) Blended marketing style D) Varied communications E) Holistic communications strategy
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A) Integrated marketing communications
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Which of the following promotion mix elements are used most often in a push strategy? A) Trade promotion and consumer advertising B) Advertising and consumer promotion C) PR and sales promotion D) Consumer advertising and direct selling E) Personal selling and trade promotion
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E) Personal selling and trade promotion
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Which of the following is NOT involved in the selection of advertising media? A) Choosing the vehicle of the advertisement B) Determining which product to advertise C) Choosing who will be targeted by the advertisement D) Determining the scheduling for the advertisement E) Choosing the media used to create the advertisement
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B) Determining which product to advertise
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Which of the following methods involves setting the advertising budget at a portion of projected sales or a portion of the unit sales price A) promotion based B) Affordable C) Percentage of sales D) Objective and task E) Comparative parity
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C) Percentage of sales method
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Holistic Consumables is a grocery store that sells organic food. The company wishes to know how customers view its store and its products so they hire a company to analyze how many times a customer mentions the store online, post videos of its ads, and "likes" a post regarding the store. Which of the following is Holistic Consumables measuring? A) consumer expressions B) Advertising frequency C) Advertising reach D) Consumer impressions E) Media engagement
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A) Consumer expressions
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Sapphire is a specialty jewelry retailer store based in the United States. The company retails gold jewelry, diamonds, and designer watches. The company is in the process of setting its ad budget for each product line.... One manager wants to use objective and task method and the other wants to use competitive-parity method. Which of the following would weaken the argument for the objective-and-task method A) There is no evidence that budgets based on competitive parity prevents promotion wars B) It is difficult to determine which specific tasks will achieve Sapphires objectives C) The competitive-parity method discourages innovative thinking in marketing D) Studies have found a positive correlation between promotional spending and brand strength E) The company has used the competitive-parity method in the past
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B) It is difficult to determine which specific tasks will achieve Sapphires objectives
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Sapphire is a specialty jewelry retailer store based in the United States. The company retails gold jewelry, diamonds, and designer watches. The company is in the process of setting its ad budget for each product line.... One manager wants to use objective and task method and the other wants to use competitive-parity method. Suppose a manager favors the competitive-parity method bc she believes that it represents the collective wisdom of the industry. Which of the following would be the most effective counterargument? A) The competitive-parity method may invite charges of collusion B) Companies differ greatly, and each has its own special promotion needs C) Competitors, as a group, usually have a precise idea about the market D) The competitive-parity method views sales as the result of promotion E) Budgets based on competitive parity usually prevent promotion wars
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B) Companies differ greatly, and each has its own special promotion needs
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Which of the following is true about an advertising appeal? A) must address issues raised by competitors B) Must be product centered C) Must be cost effective D) Must be distinctive from other ads E) It must fit in with all previous ads
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D) Must be distinctive from other ads
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Which of the following is an advantage PR efforts has over advertising? A) PR is easier to accomplish B) PR results in more sales C) PR is easier to adapt to dif. audiences D) PR is more cost effective E) PR is more effective
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D) PR is more cost effective
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Why is PR occasionally referred to as a marketing stepchild? A) its high cost, low return ratio B) it is easily ignored by consumers C) its unreliable nature and unfocused techniques D) it is often overbearing and leads to consumer disinterest and loathing E) its limited and scattered use
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E) Because of its limited and scattered use
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Percentage of sales method
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Setting the promotion budget at a certain percentage of current or expected sales
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Competitive parity method
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Setting the promotion budget to match competitors
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Objective and task method
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Setting a promo budget the basic way 1. Define objectives 2. Determine task necessary to complete objective 3. Estimate cost of these task. Total of sum = budget
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Consumer promotions
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Sales to boost short term customer buying in hopes of gaining long term relationships
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Which of the following best describes the relationship b/w salespersons and marketers? A) Salespersons should garther customer information from marketers B) Salespersons and marketers should cooperate in order to create value for customers C) Marketers should defer to the superior knowledge of salespersons D) Salespersons and marketers represent two distinct branches of a company and should not interact
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B) Salespersons and marketers should cooperate in order to create value for customers
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The salespeople of Multilevel Computing work from a central office. They have a team of telemarketers that find new customers and sell products, as well as a team of technical support that troubleshoot. Which of the following best describes what is in place? A) Territorial sales force B) Product sales force C) Inside sales force D) Customer sales force E) Outside sales force
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C) Inside sales force
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Alice Ledbetter was just offered a job at Crush Cruises with 80,000 yearly salary, insurances, and 5k for moving to florida. Why didnt she accept?
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It didnt offer any incentive pay
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Sales force management depends largely upon which? A) Cooperation with marketing team B) Thorough knowledge of the customer C) Finding, training, and motivating quality salespeople D) Effective and innovative advertising E) First hand knowledge of product
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C) Finding, training, and motivating quality salespeople
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Robinson Inc. is a conglomerate with six distinct businesses, each offering multiple products and services. CFO prefers to continue with territorial sales, CEO wants new options. Which would strengthen the argument for a product sales force structure? A) existing customer base is spread across large geographic area B) They have reported strong revenues in each of the previous 6 quarters C) Most of robinsons products require little to none follow up from sales force D) sales compensation and expenses budget has undergone drastic cuts E) Robinson has a large and diverse portfolio of offerings
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E) Robinson's has a large and diverse portfolio of offerings
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Robinson Inc. is a conglomerate with six distinct businesses, each offering multiple products and services. CFO prefers to continue with territorial sales, CEO wants new options. Which of the following would support a move to team selling? A) Most of robinsons customers use a team based approach to make purchase decisions B) Senior sales exec have built long term relationships with customers C) Robinsons sales calls require each salespersons to be an expert with respect to each product D) Robinsons current reward system favors indiv. performance E) Management seeks to evaluate and reward indiv. contributions
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A) Most of robinsons customers use a team based approach to make purchase decisions
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Focus of value selling? A) spending as little time as possible on sales force B) selling items as profit C) making a sales quota D) Delivering and demonstrating customer value
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D) Delivering and demonstrating customer value
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Teds telemarketers is a company that focuses on making the sale-what is the best method to ensure repeat business? Offer customer incentives lower sales quota Slash product lines promote a better product focus on value selling
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focus on value selling
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person selling differs from reliance on consumer promotion tools in which of the following ways consumer promotion tools work independantly from company advertising personal selling requires less work from sales force consumer promotion tools are financially based rather than relationship based consumer promotion tools are used for long term customer contacts
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consumer promotion tools are financially based rather than relationship based
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Which of the following groups is NOT targeted by sales promotion tools retailers suppliers members of sales force customers wholesalers
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suppliers
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what is push money
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money given in return for promoting
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what is usually associated with trade promotions generating business leads enhancing customer brand involvement getting more shelf space for products
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getting more shelf space for products
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A company gets premium shelf space from a retailer, as a thanks they give the retailer a $50 reduction in each case. what are they offering? push money an allowance a price off
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an allowance
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Jennifer bowles is continually inundated with coupons, sales displays, promotion products, etc. She is overwhelmed and freaking the shit out about it all. What is her problem Advertising clutter Promotion clutter promotion chaos product confusion advertising jumble
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promotion clutter
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Marketers need to evaluate the success of their promotional activities, whats the most common evaluation? compare inventory levels after promo compare number of customers before and after compare sales before, during, and after promo asses product demand before, during, and after asses how many new customers become repeat customers
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compare sales before, during, and after
