MKTG 325 Final

Individualized Pricing

(1st Degree of Price Discrimination) - Set unique price for each customer equal to customer's willingness to pay

Self-Selected Pricing

(2nd Degree of Price Discrimination) - Offer the same price schedule to all customers

Pricing by Market Segments

(3rd Degree of Price Discrimination) - Charge different groups different prices; kids menu

Zone Pricing

(3rd Degree of Price Discrimination) - Charge different prices in different stores, markets, regions; cup of joe

the two objectives of institutional advertising are:

- creating a positive store image - public service promotion

co-campaigns (2)

- vertical cooperating advertising - horizontal cooperating advertising

Retailer-Only campaigns (3)

-affordable method - percentage of sales method - task and objective method

Improve short run performance

-attract new customers -increasing patronage of existing customers

Catalina category marketing

-brands distribute individually targeted promo codes -shoppers return to the store and participate in promotion -further rewards redeemable on next shopping trip

issues overlooked by retailers

-clean restrooms -dwell time: amount of time spent waiting to complete transaction

common customer services post transaction

-complaint handling -flexible returns -services and repair -delivery -shipping

Reasons for the difference between initial and maintained markups

-need to balance demand with supply by using markdowns -shrinkage -employee/customer discounts -alterations -cash discounts

Improve long run performance

-store image and positioning -public service

A good job of personal selling will greatly enhance the customer's satisfaction with the retailer. This fact is highlighted by research that found in ________ percent of the cases where the customer had the "best shopping experience ever," there was sales-force involvement and in ________ percent of the time when a customer had the "worst shopping experience ever," there was direct employee involvement."

73; 81

A retailer who doesn't spend any money on promotion will never make any sales. True or False?

False

Despite the short life span of newspaper advertising, retailers love to use newspapers. After all, a local paper's circulation usually is an exact match for the retailer's target market. True or False?

False

For leader pricing to be effective, the item used must be infrequently purchased and have a very high markup. True or False?

False

In today's highly competitive environment, even discounters must offer luxury services because customers expect it. True or False?

False

The average American now considers 25 percent off the original price of an item to be a bargain. Thus a late markdown should be at least this much. True or False?

False

Which of the following statements is false?

For the average retailer, the cost of sales promotions is about half the amount spent on advertising.

High-low pricing

Involves the use of high everyday prices and low leader ''specials'' on items typically featured in weekly ads.

customary pricing

Is a policy in which the retailer sets prices for goods and services and seeks to maintain those prices over an extended period of time.

1-price

Is a policy that establishes that the retailer will charge all customers the same price for an item.

skimming

Is a pricing objective in which price is initially set high on merchandise to skim the cream of demand before selling at more competitive prices.

price lining

Is a pricing policy that is established to help customers make merchandise comparisons and involves establishing a specified number of price points for each merchandise classification.

odd pricing

Is the practice of setting retail prices that end in the digits 5, 8, 9—such as $29.95, $49.98, or $9.99.

leader pricing

Is when a high-demand item is priced low and is heavily advertised in order to attract customers into the store.

everyday pricing

Is when a retailer charges the same low price every day throughout the year and seldom runs the product on sale.

Which of the following statements is false regarding the service level a retailer should offer its customers?

It is relatively easy for retailers to determine the optimal number and level of customer services to offer.

trading up

Occurs when a retailer uses price lining and a salesperson moves a customer from a lower-priced line to a higher one.

trading down

Occurs when a retailer uses price lining, and a customer initially exposed to higher-priced lines expresses the desire to purchase a lower-priced line.

bundled pricing

Occurs when distinct multiple items, generally from different merchandise lines, are offered at a special price.

multi-unit pricing

Occurs when the price of each unit in a multiple-unit package is less than the price of each unit if it were sold individually.

________ retailing includes all the activities designed to attract, retain, and enhance customer relationships.

Relationship

Which of the following is not a good guideline to follow when developing a promotion campaign?

Remember that consumers always love a sweepstakes with a big grand prize. Therefore, never use any price promotions, such as coupons, when a sweepstakes is available

"Filling the basket" is another term for suggestion selling. True or False?

True

A retailer using an EDLP (everyday low prices) policy charges the same low price everyday throughout the year and doesn't engage in "promotional pricing." True or False?

True

Consumer premiums and loyalty programs are both considered to be a form of sole-sponsored sales promotion. True or False?

True

Directing promotional activities at current customers as a means of increasing their number of purchases at a given retailer is a common short-run objective maintained by many retailers. True or False?

True

Retailers seek to have their initial markup be higher than their maintained markup. True or False?

True

The average retailer loses around fifty percent of its customers every five years. true or false?

True

The customer service audit shouldn't use a "mail questionnaire," rather it should intercept customers as they leave the store to ask them about their experience in the store. True or False?

True

When a retail salesperson encounters an "impulsive" customer type, the salesperson should try to "close the sale" as rapidly as possible and avoid any overselling. True or False?

True

horizontal cooperative advertising

Two or more retailers band together to share the cost of advertising usually in the form of a joint promotion of an event or sale that would benefit both parties

maintained markup formula

actual retail - cost/ actual

maintained markup definition

aka gross margin is the key to profitability

Customer Service

all activities performed by retailer that influence: -ease of shopping -ease with transactions/purchases -customer satisfaction

affordable method

all the money a retailer can afford to spend on advertising in a given time period; assumes advertising doesn't stimulate sales or profits but rather supported by sales and profits

which of the following is not an objective of a consumer-service audit?

an attempt to learn what are the most important considerations for customers

A customer service audit:

concentrates on the facts of the customers' shopping experiences

retail price

cost + markup

what is the first step that a salesperson should take during the sales presentation?

determine right price range of products

During what stage of the selling process does the retail employee have the opportunity to "set the mood" for a sale?

during the approach

7-Eleven reverse product placement

example Buzz cola

A drawback to personal shopping services is that they rarely build relationships with customers. True or False?

false

which of the following is not a factor in determining the service level to be offered?

firm's management structure

If a retailer is offering the same products and quantities to different customers at different prices, the retailer ahs what kind of pricing policy?

flexible

In an attempt to build repeat business and increase customer goodwill, a salesperson should help the customer define his/her problems when the customer

has an inadequate or vague choice criteria.

experiential retailing

high level service; ex: Build-a-Bear

7-Eleven Kwik-E-Mart strategy

increase store patronage and improve image

Co-Op Campaigns:

involves manufacturers or other retailers sharing a retailer's advertising expense

When the retailer wants to avoid disrupting the sale of regular merchandise by marking down goods too frequently, the retailer should adopt a(n) ________ markdown policy

late

high quality service

meets or exceeds customer expectations; ex: Nordstrom

which one of the following factors is not one of the elements that need to be considered when designing a sales job?

number of complaints a salesperson should have to handle

Initial Markup formula

original retail - cost/ original

common customer services transaction

personal selling- upscale department and specialty retailer

Whole Foods branding

promotes sustainability with digital displays

pretransaction services

provided before entering the store; ex: convenient hours, parking, information aids

transaction services

provided when the customer is in the store; ex: credit, layaway, gift wrapping, personal shopping personal selling

Your local supermarket recently made a major scholarship donation to the state university. The scholarship was named after the supermarket and was to given to a local student. The supermarket was attempting to achieve what long-term promotion objective?

public service promotion

markup %

retail - cost/retail

reduction percentage formula

retail - md price/md price

vertical cooperative advertising

retailer and other channel members share the advertising budget

task and objective method

retailer establishes advertising objectives then determines advertising tasks that need to be performed to achieve said objectives

percentage of sales method

retailer targets a specific percentage of forecasted sales as the advertising budget; amount of sales becomes the factor that influences the advertising outlay, gives money to departments that are already successful and fails to give money to ones that could benefit from it

which of the following areas should not be taken into consideration by a retailer when formulating a promotional strategy?

retailer's net worth

consumer premiums are a form of:

sole-sponsored promotion

a transient customer is a consumer who visits a retailer:

that doesn't meet his/her customer service needs

A skimming strategy will work best for a retailer when:

the retailer has a temporary monopoly with its product line

merchandise availability is an example of;

transaction service

A landlord charges the same apartment rent as last year, but now adds a fee for parking spaces. This practice is known as:

unbundling