MKT 300 Exam 4 Eaton

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percentage of sales method

set percentage of sales or amount per unit

Message Recall and Presentation Order

primacy effect: more remember the earlier info recency effect: more remember the most recent (last) info

stages for establishing prices

1. Development of pricing objectives 2. Assessment of target market's evaluation of price 3. Evaluation of competitors' prices 4. Selection of a basis for pricing 5. Selection of a pricing strategy 6. Determination of a specific price

event creation

designing an event that features sponsorship -redbull

unique selling proposition

desirable, exclusive, and believable advertising appeal selected as the theme for a campaign -wendy's twitter acc

portfolio pricing

different levels of price points across a product category where consumers are willing to pay more for extras

Beyond a certain level of spending,

diminishing returns set in

Products that are price sensitive, have many substitutes, and relatively small decreases in price result in large increases in quantity demanded are price: a. elastic b. inelastic

elastic (E is greater than 1.0)

Persuasivw promotion

encourage brand switching, change customers' perception of product attributes, influence immediate buying decisions, persuade customers to call

odd-even pricing

ending the price with certain numbers to influence buyers' perceptions of the price or product - 0.99 cents

institutional advertising

enhance a company's image rather than promote a particular product

Customer relationship management

establish, develop, and maintain customer sales customizing product and service offerings based on data generated through interactions between the customer and the company

Lifestyle

exclusive, only the coolest people can wear this brand, drive this car, and be part of this in-group

Qualifying leads

find people that are far more likely to purchase your product -LinkedIn

Direct marketing

form of advertising where the firm contacts the customer personally to provide marketing info strengths: messages can be tailored to match the consumer weaknesses: customers can feel as if their privacy has been invaded

marketing channel

group of individuals and organizations directing the flow of products from producers to consumers

The marketing mix

group of marketing variables that a business controls with the intent of implementing a marketing strategy directed at a specific target market -promotion, place, price, product

Products that are less price-sensitive, have few substitutes, and large increases in price result in only a small decrease in quantity demanded are: a. elastic b. inelastic

inelastic (E is less than 1.0)

Goals and Tasks of Promotion

informing: PLC stages intro & early growth persuading: PLC stages growth & maturity reminding: PLC stage maturity

brand entertainment/product placement

integration of brands or brand messages into entertainment media

Levels of Distribution intensity:

intensive distribution, selective distribution, exclusive distribution

lifetime value of a customer

q x p

Program rating

rating = ( HH tuned to show ) / ( total US HH )

Consumer sales promotions

rebates, coupons, "buy one get one free" mentality, loyalty programs, premiums, contests, sweepstakes

Power of We

receive, reciprocate social norms

Reminder promotion

remind customers that product may b need, remind customers where to buy product, maintain customer awareness

Personal Selling

representatives of a company interacts directly with a consumer to provide information to help the consumer make. a buying decision about a product or service - one to one interaction: address specific customer needs, alter message, provide additional info

cost based pricing: profit =

revenue - costs -rev: price x units sold -cost: fixed costs + variable costs

Hold spending if

the increased cost is equal to the incremental (marginal) return

Increase spending if

the increased cost is less than the incremental (marginal) returrn

Decrease spending if

the increased cost is more than the incremental (marginal) return

Select a basis for pricing: new product

price skimming and penetration pricing

referencing pricing

pricing a product at a moderate level and positioning it next to a more expensive model or brand -retailers sometimes add higher priced items to extend the range of product price alternatives -also known as selling against the brand

Select a basis for pricing: competition competition-based pricing:

pricing influenced primarily by competitors' prices -method importance increased when: competing products are homogenous resulting in elastic demand; organization is serving markets in which price is a key consideration

Retailing Mix

pricing, merchandise, location (place or online), promotion, customer service, atmosphere (physical evidence) -missing notion of process

Relationship selling

win win approach -sell advice, assistance, counsel

Evaluating impact: source control vs. credibility

word of mouth: low source control, high credibility personal selling: average source control, average credibility advertising: high source control, low credibility

audience selectivity

ability of an advertising medium to reach a precisely defined market -cooking network, home garden network

Producer factors

ability to affect resources to generate revenue

distribution

activities involved in making products available to customers when and where they want to purchase them

Select a basis for pricing: cost cost-plus pricing

adding a specified dollar amount to the seller's cost

margin

adding to the price of the product a predetermined percentage of the total price

markup

adding to the price of the product a predetermined percentage of the variable cost

market share

adjust price levels so that the firm can maintain or increase sales relative to competitors' sales

cost =

(1 - markup on selling price)(selling price)

flighted media schedule

advertising is run heavily very other month or every two weeks 30-0-30-0

seasonal media schedule

advertising is run only when the product is likely to be used -sunscreen, cold medications

continuous media schedule

advertising is run steadily throughout the period 20-20-20

Promotional Mix

advertising, personal selling, sales promotion, public relations, direct marketing, events/experiences

Bait and switch advertising

advertising a price for a product that isn't available to consumers -draw in under false pretenses

Pull strategy

advertising and promotional strategies geared toward consumers to increase desire for the product -B2C -websites, tv, billboards

Push strategy

advertising and promotional strategies geared toward your distribution partners to encourage them to promote your product -B2B

pulsing media schedule

advertising combines continuous scheduling with flighting; never zero but fluctuates 20-10-20-10-20-10

Retailing

all activities involved in selling goods directly to the final consumer for their use -can be via mail, internet

single-price

all customers are charged the same price for all the goods and services offered for sale within that product category - $1 menu

leader pricing

also known as loss leader pricing; products priced below the usual markup, near cost, or below cost -black friday pricing

Sales Promotion

an activity or material that acts as a direct inducement, offering added value or incentive for the product -contests, games, sweepstakes strengths: can be implemented quickly, help to move seasonal items, enhance effectiveness of other promotional mix elements weaknesses: not good for luxury products

Unitary elasticity

an increase in sales exactly offsets a decrease in prices, and revenue is unchanged

Inelastic

an increase or decrease in price will not significantly affect demand

Direct retailing

bringing any opportunity directly to you (face to face) -girl scouts

Public relations

broad set of communications efforts used to create and maintain favorable relationships between an organization and its stakeholders strengths: publicity can help build brand image, support other promotional efforts weaknesses: firm cannot control what news agencies and other outlets say

which of the following is the best example of a captive pricing strategy?

buying a printer for your computer and needing to buy the print cartridges for that model

captive-product pricing

captive products are items designed specifically for use with another product; many captive products are necessary to the function of the core product -razor and blades mentality -consoles and videogames

Integrated marketing communications

carefully coordinating all promotional messages to assure the consistency at every touchpoint between a company and the consumer -southwest has consistent message -snickers "satisfies hunger"

price skimming

charging the highest possible price that buyers who desire the product will pay

product advertising: comparative

compares two or more competing brands' product attributes; used if growth is sluggish, or if competition is strong

puffery

concept of lying so much where no one possibly could believe this -redbull gives you wings

Omni-channel retailing

connected customers can shop for.purchase the same items across different channeels

Elastic

consumers buy more or less of a product when the price changes

Direct marketing

contacting consumers and users, not face to face -direct mail, catalogs, telemarketing

Product factors

controllable -product price, product life cycle

intensive distribution

convenience goods; found everywhere

selling price =

cost / (1 - markup on selling price)

Cost per contract

cost of reaching one member of the target market

select a basis for pricing: demand demand-based pricing:

customers pay a higher price when demand for the product is strong and a lower price when demand is weak -ex: uber fares, happy hour, student discount also knowns as flexible or variable pricing (different segments pay different rates)

If demand for a good is extremely elastic, raising the price of that good typically has what effect on total revenue?

decreases

New brands with a small market share spend proportional _____ for advertising and sales promotion than those with a large market share

more

Personal selling process

practice used by salespeople to identify, research, and approach potential customers to sell products and services

misleading demonstrations

presenting something in a way that is deceptive or misleading

advertising campaign

series of related advertisements focusing on a common theme, slogan, and set of advertising appeals

Acquisition rate

% of purchases by non-regular buyers

Displacement rate

% of those who would buy anyways

Redemption rate

% responding to incentive -primarily for coupons, rebates

E (elasticity) =

(% change in quantity demanded for good A) / (% change in price of good A)

The Six Most Important Things to Remember from MKT 300

(6) when someone asks how to better reach customers, you automatically think "Segment, Target and Position" (5) When someone discusses customer demographics, you suggest investigating their psychographics (individual level) (4) marketing is knowing and connecting with your core customer and cultivating relationships (3) marketing is developing your brand with 55 minutes of strategy and 5 minutes of tactics (2) marketing is solving customer problems by creating, communicating and delivering value (1)You stay classy, sun devils

markup on selling price =

(selling price - cost) / selling price

Value =

Benefits - Costs

exclusive distribution

specialty goods, one option

assess target market's evaluation of price: importance of price

type of product, type of target market, purchase situation

guerilla marketing

unconventional promotions on a low budget; thought of for small businesses

stealth marketing

undercover marketing -didn't realize you were in a marketing situation

Market factors

understanding factors in the environment; they are outside of our control; uncontrollable -consumer, size of market, competition

When demand is unitary elasticity, price goes _______ and revenue goes _______.

up or down, stays the same

When demand is elastic, price goes _______ and revenue goes _______.

up, down and down, up

When demand is inelastic, price goes _______ and revenue goes _______.

up, up and down, down

designing a marketing channel system

-Analyze customer needs -Establish channel objectives -Identify major channel alternatives -Evaluate major channel alternatives

80% of profits comes from ___% of customers

20

no profits (loss) come from ___% of customers

20

20% of profits comes from ___% of customers

60

Cost per thousand (CPM) -M roman numeral for 1000

CPM = [ (cost of ad space) / (reach) ] x 1000

External factors that affect pricing decisions

Demand for your product Competition: competitor's price & strength of competition Economy: cost of components (natural resources) and economic conditions

Internal Factors that affect pricing decisions

Marketing Objectives: maximize profit or gain market share Marketing Mix Strategy: price needs to be consistent with other 3P's Costs: set optimal price

7P's 4C's

Product, price, place, promotion, people, physical, process Customer value, cost, convenience, communication

Excellent marketing: 4P's for Uber

Uber is a type of referral marketing Product: service; relevant and efficient Place: geographical segment is identified as friends refer to their friends and family (within the USA) Price: demand based pricing; pricing fluctuates depending on demand at certain times Promotion: word of mouth

objective and task method

here's my goal and figure out how to reach specific percentage

Generating leads

high traditional selling, low relationship selling

New brands require ______ spending to reach a minimum level of exposure needed to affect purchase habits

higher

highly effective service recovery can result in

higher levels of customer satisfaction than in cases where service failure didn't exist

Premium strategy: _______ quality & ______ price

higher, higher

Good-value strategy: _______ quality & ______ price

higher, lower

experiential marketing

how can we make something an experience? connect with customer provide the consumer with a total product experience that considers all the elements in an offering that encourage or inhibit consumers' interaction with the product

Impact

how credible is the medium? how credible is the source? how well does the product fit with the users of the medium?

Clutter

how many other ads will our customers see at the same time? will ours get lost in the mix?

Engagement

how much do customers pay attention to that form of media? do our product characteristics necessitate visuals? sound? story?

Efficiency

how much does each impression cost? -$5 mil super bowl ad

Price elasticity

how much the demand for a product will change with a change in price

CRM (customer relationship management) recency frequency monetary analysis

identifies customers most likely to purchase again, identify and rank best customers, identifies most profitable customers

Profit

identify price and cost levels that allow the firm to maximize profit per product

status quo

identify price levels similar to competitor average price

bait pricing (illegal)

illegal practice of advertising unrealistically low prices to bring customers into the store

Product line effects

impact the promotions have on related products

Informative promotion

increase awareness, explain how product works, suggests new uses, build company image

Atmosphere

layout, design, texture, senses

Factors influxing complaint behavior

level of dissatisfaction, attitude/personality of consumer toward complaining, amount of benefit to be gained, attribution theory

Overcharging strategy: _______ quality & ______ price (skimming)

lower, higher

Economic strategy: _______ quality & ______ price (penetration)

lower, lower

adjusting your price levels so that your company can maintain or increase sales relative to competitors' sales best described with pricing objective?

market share

Factors affecting channel choice:

market, product, and producer factors

Sales promotion

marketer-controlled communication to stimulate immediate audience response by enhancing the value of an offering for a limited tim -impact behavior, not attitudes

setting price =

markup + cost

competitive parity method

match competitor or industry average spending

Slice-of-life

meant for everyone, inclusive, appeal to everyone with basic product

customer satisfaction

negative, neutral, positive

arbitrary allocation method

non system; seemed like a good idea at the time

Television households

number of HH that own a TV

Market sales potention

number of buyers (b) x the quantity purchased in a given time period (q) x the price/unit (p)

Conversion rate

number of future purchases by new customers

reach

number of target consumers exposed to a commercial at least once during a time period

frequency

number of times an individual is exposed to a message during a time period

Events/experiences

organizing activities and events where customers can meet each other and get to know the brand/firm -entertainment strengths: help build brand community and buzz around the brand weaknesses: more skeptical consumers might see efforts as inauthentic

AIDA concept (attention, interest, desire, action)

outlines process for achieving promotional goals in terms of stages of consumer involvement with the message -advertising, public relations, personal selling, sales promos -promos create awareness attention -time delay after seeing an ad

bundle pricing

packaging together two or more complementary products and selling them for a single price -shampoo and conditioner

multiple-unit pricing

packaging together two or more identical products and selling them for a single price -costco or sams club

Advertising

paid, non-personal communication about an organization and its products transmitted to a target audience through mass media (mass delivery) -inserts, billboards, print and broadcast ads strengths: cost-efficient per person, can enhance brand image, repeatable weaknesses: total cost can be high, slow feedback, one-way message, not flexible

Advertising

paid, non-personal communication of a marketing message by an identified sponsor through mass media

Personal selling

paid, personal communication that seeks to inform customers and persuade them to purchase products in exchange situation -sales presentations, samples strengths: more influential, immediate feedback, flexible weaknesses: high cost per person, time intensive

share of audience

percentage of HUT tuned to a show

program rating

percentage of TV HH tuned to a show -rating point = 1% off TV HH

households using TV (HUT)

percentage of homes in an area watching TV at a given time

Trends in retailing

personal in-store experience, convenience/speed, privacy concerns, mobil wallet usage, omni-channel retailing

Emotional response

pleasure, displeasure, heightened senses

Traditional selling

selling whether consumer needs it or not

Marketing communication process

sender encodes a marketing idea and conveys it through message and medium so receivers can decode and understand it, and then respond with feedback

everyday low pricing

setting a low price for products on a consistent basis -retailers winning on volume of sales not how much per sale

penetration pricing

setting prices below those of competing brands to penetrate a market and gain a significant market share quickly

Share of audience

share = ( HH tuned to show ) / (US HH using TV ) share number always higher than rating number

selective distribution

shopping goods, several options but not everywhere

False testimonials

someone making claims that aren't accurat

evaluate competitors' price

sources of competitors' pricing info: comparative shoppers importance of knowing competitors' prices: helps to know how important price is to customers and helps marketers in setting competitive prices for their products customer view of pricing and marketing: pricing above/below competition

return on investment method

spending is treated as a capital investment

attribution theory

stability focus controllability

product advertising: pioneering

stimulates primary demand for new product or category -intro stage

Behavior

time spent in store, affiliation with people, buying actions

Marketing at corporate level

to promote a culture of customer orientation and to be an advocate for the customer to assess market attractiveness to develop the firm's overall value proposition, the vision, and articulation of how it proposes to deliver superior value to customers

break even quantity =

total fixed costs / (selling price - variable cost)

product advertising

touts the benefits of a specific good or service

Trade sales promotions

trade allowances, trade shows, co-op advertising, sales contests, training -examples of push strategies

attribution

translates attributes to show how you solve problems

Scientific

use third party data

product advertising: competitive

vast majority of product advertising are competitive; influences demand for brand in growth phase of PLC; often uses emotional appeal

affordable method

what we have to spare; what's left to spend

service recovery

what you do if something goes wrong? what do you want as a customer?

Price

what you pay for something; value you exchange for the benefits of having or using the product/service

break even point

where a company produces the same amount of revenues as expenses


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