Marketing ALL

What happens when you DON'T understand cultural differences?

Scandinavian vacuum manufacturer Electrolux used the following in an American campaign: "Nothing Sucks like an Electrolux." Clairol introduced the "Mist Stick," a curling iron, into Germany only to find out that "mist" is slang for manure. Not too many people had use for the "Manure Stick." Pepsi's "Come Alive With the Pepsi Generation" translated into "Pepsi Brings Your Ancestors Back From the Grave" in Chinese. When Gerber started selling baby food in Africa, they used the same packaging as in the US, with the smiling baby on the label. Later they learned that in Africa, companies routinely put pictures on the labels of what's inside, since many people can't read. Colgate introduced a toothpaste in France called Cue, the name of a notorious porno magazine. The Coca-Cola name in China was first read as "Kekoukela", meaning "Bite the Wax Tadpole" or "Female Horse Stuffed with Wax", depending on the dialect. Coke then researched 40,000 characters to find a phonetic equivalent "kokoukole", translating into "Happiness in the Mouth."

Sherman Antitrust Act

1890, the first Federal law outlawing practices considered harmful to consumers (monopolies, cartels, and trusts).

What is the difference between primary and secondary research?

Secondary data are pieces of information that have been collected from other sources. Primary data are data collected to address specific research needs, usually through observation, focus groups, interviews, surveys, or experiments.

Perspective

Self-Referencing Ethnocentrism Cultural Imperialism Biggest issues!

What are the three global product strategies?

Sell the same product or service in both the home country market and the host country. Sell a product or service similar to that sold in home country but include minor adaptations. Sell totally new products or services.

11. If moms stop buying clothes for themselves because of the economy and higher prices, we can say that demand for women's clothing is a. elastic b. inelastic c. either elastic or inelastic d. neither elastic or inelastic e. none of the above

A

12. Because conclusive research is often quantitative in nature, it offers a means to confirm ideas through: A. surveys or experiments. B. in-depth interviews. C. qualitative measuring. D. exploratory research. E. informal analysis.

A

23. "Made in the USA" is an example of American a. ethnocentrism b. altruism c. charity d. cultural sensitivity e. none of the above

A

3. Chris Anderson, the editor of Wired interviewed in the video, talked about a. The Wall Street Journal giving away its most popular content and its exclusives b. The New York Times being financially healthy c. Time magazine ending its printed version d. Business Week going entirely mobile e. None of the above

A

34. Because there are many firms with similar products in purely competitive markets: A. price is determined by the laws of supply and demand. B. consumers develop personal preferences. C. government often encourages diversification to reduce the number of consumers. D. advertising is heavily used. E. the many competitors will focus on variable cost pricing.

A

36. When companies wish to form a type of partnership where they form a third legal entity, they do so by a. forming a joint venture b. forming a strategic alliance c. franchising in a foreign market d. direct investment e. exporting

A

38. The most important and difficult step in a research project and the step you should devote the most time to is a. defining business objectives b. designing the research c. collecting the data d. analyzing the data e. writing and presenting the results of the project

A

4. Free is truly free a. rarely b. often c. if you are offered a free toaster for opening a new checking account d. if you are offered a "buy 2, get one free" deal e. if you are offered a "buy one, get one free" deal

A

55. Although services are intangible, and consumers can't touch or feel them at all, some service providers have done well on-line by using the Internet to: A. provide consumers with access to a great deal of information to encourage purchases and reduce post-purchase regrets. B. find creative ways to encourage refunds if customers are not satisfied with the service. C. combat the problems of perishability. D. make purchases more tangible. E. increase variability within the context of customization.

A

6. If a company's objectives focus on a pricing strategy to generate the greatest return, it is said to use a _____ strategy. a. profit-oriented b. sales-oriented c. competitor-oriented d. customer-oriented e. distributor-oriented

A

9. If families cancel family vacations because of high gas prices, we can say that demand for family vacations is a. elastic b. inelastic c. either elastic or inelastic d. neither elastic or inelastic e. none of the above

A

Data collection begins: A. only after completing the research design process. B. after determining whether there are any objections. C. whenever the researcher wants to. D. after creating the presentation format. E. after analyzing the data.

A

In ________________ competition, there are many firms providing differentiated products. A. pure B. oligopolistic C. monopolistic D. monopoly E. duopoly

A

Analyzing Infrastructure and Technological Capabilities

A firm's ability to conduct business in a particular country is in large measure determined by that country's infrastructure. Transportation Communication Distribution Channel Commerce

Step 5: Presenting Results

A typical marketing research report would start with a two page executive summary. This would highlight the objectives of the study, methodology and key insights. The body of the report would go through the objectives of the study, issues examined, methodology, analysis and results, insights and managerial implications. We would end with conclusions and any limitations or caveats. Many consultants today, provide an executive summary, power point presentation of the report, questionnaire and tabulated study results

Logistics

Activities among and within institution

What are the different types of vertical marketing systems?

Administered, contractual, corporate

Electronic Data Interchange

Advanced shipping notice Vendor-Managed inventory Collaborative Planning, Forecasting, Replenishment EDI facilitates information, it makes it easier for retailers to plan their deliveries (advance shipping notice) and plan their inventories (CPFR). Other information is handled through EDI as well. The bottom line is the retailer has the merchandise the customer wants when he/she wants it, and in the quantities that are demanded.

Step 2: Designing the Research Project

After answering why and how, researchers must determine where they can find the data. Discuss how the types of data required determine the methods used to collect them. If you can connect to your college library - look at some of the data sources at your own school. Databases like mintel, tablebase, ABI inform and Business Source Premier are excellent sources of data. Secondary data are plentiful and free, whereas syndicated data generally are more detailed but can be very costly.

Receiving and Checking

After goods arrive at their destination, the recipient must account for them. RFID has the potential of tracking merchandise throughout the supply chain. Items wouldn't have to be physically checked. A distribution center or a store could know exactly where and how many of an item it has because each item has an RFID tag. Some are concerned, however, about consumer privacy—being able to track a consumer that is wearing apparel with and RFID tag.

What is the difference between intensive, exclusive, and selective levels of distribution intensity?

An intensive distribution strategy is designed to get products into as many outlets as possible. Exclusive distribution policy grants exclusive geographic territories to one or very few retail customers so no other customers in the territory can sell a particular brand. Selective distribution uses a few selected customers in a territory.

World Trade Organization

An international agency which encourages trade between member nations, administers global trade agreements and resolves disputes when they arise.

Direct investment: requires the highest level of investment and exposes the firm to significant risks. offers a low-risk alternative to exporting. allows global marketers to minimize advertising expenditures. requires strategic alliances among businesses, governments, and trading associations. all of the above.

Ans. A Explanation: When a firm uses direct investment as a globalization strategy, they are making a commitment by purchasing or building assets in the host country. This creates greater risk and involves greater amounts of capital than the other alternatives.

While most consumers rank low price as an important factor, they would rather purchase a product or service of: high value. status quo variation. profit orientation. inelastic income demand. gray market efficiency.

Ans. A Explanation: Price is only half of the value equation. In determining value, consumers weigh the price versus the benefits they expect to receive.

Price elasticity of demand measures consumers': cross-price elasticity responsiveness. sensitivity to price changes. response to a change in income. break-even satisfaction point. demand price parity.

Ans. B Explanation: Individual consumers react differently to price changes. Price elasticity measures consumers sensitivity or responsiveness to price changes.

Red Bull is sold at convenience stores, supermarkets and warehouse clubs. Red Bull has _________ distribution. selective exclusive intermediate intensive limited

Ans. D Red Bull is intensive distribution

A _________ is a tax levied on a good imported into a country. quota boycott controlled exchange tariff float

Ans. D Explanation: Tariffs are usually levied as a percentage of the value of an imported product. They are often used by countries to increase the cost of imported products, and in the process, making domestic products more competitive. Tariffs are used by some developing countries to raise revenue for the government, and are sometimes used as a retaliation against other countries perceived of engaging in unfair trade practices.

Which of the following is NOT one of the Five C's of Pricing? Customers. Channel members. Cost. Customization. Company objectives.

Ans. D Explanation: The five C's of Pricing include customers, costs, competition, channel members, and company objectives.

A ________ is a retailer with such an extensive assortment in a particular category that would-be competitors do not bother carrying that category of products and instead, simply refer customers to the other firm. specialty retailer house breaker market mammoth revolutionary category killer

Ans. E Explanation: Category specialists offer an extensive assortment of a particular category of products, often overwhelming that category, making it difficult for other retailers to compete in that category.

Jerry is designing an online survey questionnaire. When designing the questionnaire, Jerry should consider which of the following? be careful not to create misleading questions. use language respondents are familiar with. sequence the questions appropriately. create a clear and easy to follow layout. all of the above.

Ans. E Explanation: For any type of survey instrument, each of these guidelines is an important consideration.

Globalization refers to the process by which _____________ flow across national borders. goods and services capital people ideas all of the above.

Ans. E Explanation: Initially, globalization of business focused on finding less expensive places for manufacturers to produce. Today, globalization involves the flow of all business factors across borders.

Market research includes: collecting data. analyzing data. recording data. interpreting data. all of the above.

Ans. E Explanation: Market research is a systematic design, collection, analysis, and interpretation of data to assist with marketing management decision making. Market research begins with defining the objectives and research needs.

Price is the ________ a consumer is willing to make to acquire a specific product or service. financial expenditure total cost durable fixed cost target return overall sacrifice

Ans. E Explanation: Price is more than just the money consumers pay for a product. It also includes the time, travel, and search costs associated with purchase decisions.

Which of the following is NOT a factor to consider when establishing a relationship with retailers? Choosing retail partners Facilitating retail strategy Managing a multichannel strategy Identifying types of retailers All of the above

Ans. E Explanation: Retailers need to address all of the marketing mix strategy questions.

The WTO: assists developing countries with trade policy issues. acts as a forum for trade negotiations. settles trade disputes. reviews national trade policies. all of the above.

Ans. E Explanation: The WTO superseded and administers the GATT providing a variety of trade support functions.

Assessing Global Markets

Any entry into a new market, especially into a new country, requires careful planning. A formal market assessment prevents firms from making costly mistakes. Economic analysis using metrics Infrastructure and technology Sociocultural analysis Government Actions

10. If families buy toys for their kids regardless of economic conditions and resulting price hikes, we can say that demand for toys is a. elastic b. inelastic c. either elastic or inelastic d. neither elastic or inelastic e. none of the above

B

15. Fixed costs a. vary with production volume b. are unaffected by production volume c. are not really costs d. are not important to calculating total cost e. don't need to be tracked carefully

B

17. An oligopoly a. includes many firms b. includes a few powerful firms c. includes only one very powerful firm d. involves the maximum amount of competition of the types we discussed e. b and d

B

31. Chris is gathering information about the general economic environment in Nepal. He will look for information about the general economic environment, population size and growth rate, and: A. culture. B. real income. C. airport capabilities. D. political situation. E. religious institutions.

B

5. If a company's objectives focus on a pricing strategy to generate the greatest topline revenue, it is said to use a _____ strategy. a. profit-oriented b. sales-oriented c. competitor-oriented d. customer-oriented e. distributor-oriented

B

50. As the end model year approaches, automobile manufacturers are likely to use their electronic data interchange to provide information to dealerships about: A. off-hand inventories. B. manufacturer promotions. C. cost surcharges to the retailer. D. purchase order changes. E. transportation routings.

B

51. Typically, manufacturers and retailers exchange business documents through a(n) _______________________ system. A. cross-docking Internet B. electronic data interchange C. floor-ready intranet D. vertical conflict reduction E. radio frequency identification

B

57. Marilyn has a high-powered job that requires more than ten-hours a day, and when she gets home she has two small children who want her complete attention. She has set rules about her time, which includes no email or electronic communications in the evenings. She has a fair amount of disposable income and other characteristics that make her attractive to marketers. What is the best channel to attract Marilyn? A. Store channel B. Catalogs C. Internet D. Work-based E. Convenience

B

Developed countries are experiencing _______________ population growth. A. positive B. zero or negative C. infinite D. emotional E. significant

B

Supply chain management takes a ________________________ approach to coordinating the flow of merchandise. A. quick response B. system-wide C. vertically decentralized D. cross-docking E. exclusive geographic territory

B

How have the Internet and economic factors affected the way people react to prices?

Because it is so easy to get information on the Internet, people generally have become more aware of and sensitive to price. This trend has forced both manufacturers and retailers to become more price competitive. Some consumers even know more about the relative value of different products than the firms from which they are buying. Online auctions like eBay not only provide consumers with the relative value of millions of products but also enhance their value by establishing a global market for products that would have been geographically limited in the past.

Boycott

Both governments and independent groups call boycotts.

Internet Channel

Broader Selection,Global More Information, Virtual communities Personalzation, Customer service Personalized offerings Touch and feel attributes Brands Technology Gifts Services

Stores Channel

Browsing, touch and feel, personal service, cash and credit, entertainment and social interaction, instant gratification, risk reduction

18. GDP (Gross Domestic Product) differs from GNI (Gross National Income) a. because GNI includes the economic impact of firms in that market that earn income from their global operations and GDP does not b. GNI is gaining more attention because of so many global firms c. both a and b d. because GDP includes the economic impact of firms in that market that earn income from their global operations and GNI does not e. GDP is gaining more attention because of so many global firms

C

21. Which of the following are used to restrict trade? a. quotas b. tariffs c. a and b d. prices e. profits

C

29. The _________, agreed upon in 1948, was designed to lower trade barriers. A. World Bank B. European Union C. GATT D. WTO E. IMF

C

40. Conclusive research _____ (all BUT which of the following) a. examples are experiments and structured/quantitative surveys b. does not involve open-ended questions c. examples are focus groups and in-depth interviews d. is used to draw conclusions e. is used to decide upon a final course of action

C

46. A static demand curve assumes: A. income is derived from demand. B. price is constant and fixed costs change. C. everything except price remains constant. D. a change in quantity demanded causes a change in price. E. prestige products result in greater demand than gray market products.

C

49. CPFR refers to __________________________ inventory management systems. A. collective, preferential, forecasting, and returns B. collection, partnering, franchising, and receiving C. collaborative, planning, forecasting, and replenishment D. corporate, partnering, facilitation, and replenishment E. centralized, planning, factoring, and receiving

C

7. If a company's objectives focus on a pricing strategy to discourage other companies from entering its market, it is said to use a _____ strategy. a. profit-oriented b. sales-oriented c. competitor-oriented d. customer-oriented e. distributor-oriented

C

Changes in _________________ have been the driving force for growth in global markets for decades. A. taxation B. human development C. technology D. trading blocs E. global labor unions

C

Jared has a background in IT, but he minored in business in college. He has been working on EDI systems since then, and he has had more and more responsible positions in the field. One of his former classmates from college has called him. As a very small specialty supplier to a large retail firm, he has been asked to build an EDI interface for his small firm. Jared has some reservations and explained to his friend: A. you have to have your own intranet before you can comply. B. you have to be a part of a special extranet before you can consider this. C. this is a major investment in time, expertise and money, and it may not be worth it for a very small firm. D. he would rather be friends than a business partner or supplier on such a risky venture. E. the EDI would be an invasion of the firm's privacy and confidential information would be lost.

C

The primary criticism of the World Bank is that it is a puppet of Western industrialized countries that: A. use the World Bank to settle trade disputes. B. do not allow the World Bank to objectively review trade policies. C. use World Bank loans to promote their globalization efforts. D. subsidize the World Bank in order to maintain a stable monetary policy. E. duplicates efforts of the WTO and United Nations agencies.

C

When consumers are __________________, observation becomes particularly useful in understanding consumers' preferences. A. naked B. confused by questionnaires C. unable to articulate their experiences D. interviewed too frequently E. part of an MkIS

C

The Long Tail

Chris Anderson. Talks about niche-driven industries such as Netflix and Amazon. "Selling 5 long-tail songs at 1/3 the price of a hit makes more money than three hits"

Growth of Global Market

Companies looking to less developed markets Reduce costs New opportunities v. home country (slow growth) countries such as India have benefited extensively from the globalization of production. With a large, educated workforce India has been able to attract firms from across the world to locate operations there. These operations represent a wide variety of industries from banking to medicine and include insurance, accounting, radiography, etc. Globalization of production refers to the manufacturer's procurement of goods and services from around the globe.

What are the five Cs of pricing?

Company Objectives, customers, costs, competition, channel members

Competitor Orientation

Competitive parity Status quo pricing Value is not part of this pricing strategy To discourage competitors from entering the market set prices low. This strategy is particularly common among smaller firms that lack knowledge or experience in setting prices. Non-market leader firms also use it to signal they are similar to the market leader. Ask students: What are the benefits of a competitor strategy? For example, can a new hotel chain indicate its level of service through price? The answer is yes. In many instances new brands will set price equal to the competitors they wish to be compared with knowing that consumers use reference prices to indicate quality

Avon-Mattel Alliance

Complimentary alliance/piggybacking Sold two Barbies in 1996 Biggest sales of gift to date 1997 - alliance - est. at $100MM globally Include Barbie cosmetic, fragrance, etc. Devote cover and first 10 pgs to Mattel product Barbie, HW, CPK, Disney, other Retail price - double wholesale; no/plain pkg., retail 1998 - Avon stopped direct selling in China Govt. reg. - other scams, fear of secret societies Started wholesaling to retailers 2006 - resumed direct selling; must get local approval Huge market - 400MM consumers live in coastal cities (2000) of 1B

Marketing Research

Consists of a set of techniques and principles for systematically collecting, recoding, analyzing and interpreting data that can aid decision makers involved in marketing goods, services or ideas

Catalogs Channel

Conveniece, Information, Safety

Step 4: Analyzing Data

Converting data into information to explain, predict and/or evaluate a particular situation. The problem today is not too little data but, in many instances, too much. Firms are drowning in data, and their challenge is to convert that data into information. For the cookie taste test example discussed earlier, suppose the average mean for the group who saw the national brand cookie was 5.4 (1=poor taste and 7=great taste) and the store brand cookie was (2.3. These two means are significantly different. It would be important for the students to realize that the data helps marketing managers make decisions - in this case - creating and cultivating that the brand is important.

Factors Influencing Price Elasticity of Demand

Cross-price elasticity Income effect Substitution effect

What are five important cultural dimensions?

Cultural Dimensions include power distance, uncertainty avoidance, individualism, masculinity and time orientation

Choosing a Global Marketing Strategy: Target Market (STP)

Cultural nuances Subcultures View of product and consumer role Different positioning Adaptation Single positioning strategy

The 5 C's of Pricing

Customers Costs Competition Channel Members Company Objectives

1. Cross docking a. minimizes inventory in the supply chain b. refers to unloading merchandise from suppliers and sending it out very quickly to customers/retailers, resulting in very short holding times c. is often used for inventory of a perishable or fashion-oriented nature d. All of the above e. None of the above

D

19. For an indication of quality of life in a country, you would look at which of the following a. gross domestic product b. gross national income c. purchasing power parity d. human development index e. the current price of gold

D

2. An example(s)of an off-price retailer as discussed in class would be a. Walmart b. Target c. 7-Eleven d. TJ Maxx e. Home Depot

D

20. Infrastructure capability(ies) that are of concern to a business entering a new country are all BUT a. transportation b. distribution channel c. communications d. factory e. technology

D

41. As discussed in class, the price of the Wet N Dry leaf rake was ____ (all BUT...) a. a point of disagreement with sales b. raised above the suggested retail by the retailer c. higher than other leaf rakes on the market d. lower than other leaf rakes on the market e. not a deterrant to sales to the consumer

D

43. The break-even point is estimated by: A. multiplying revenue per unit times the quantity sold. B. dividing fixed contribution per unit by variable costs. C. multiplying fixed costs by contribution per unit. D. dividing fixed costs by contribution per unit. E. dividing variable costs by fixed costs.

D

54. Stores like Home Depot and Costco act as wholesalers when they: A. take delivery in whole-lot quantities. B. select limited product lines and only market them to consumers who purchase the whole line. C. sell products for distributors. D. sell to contractors or restaurant owners. E. compete with each other.

D

58. Retailers can gain valuable knowledge about their customers from the CRM databases and from: A. trade industry profiles. B. store brand/private label brand ratios. C. multi-channel flow process. D. the insights of store personnel. E. end-of-aisle positioning studies.

D

As the logistics manager, Priscilla focuses on the movement and control of the company's physical products while her boss, the supply chain manager, focuses on: A. maximizing production efficiency. B. oversight and coordination of supply chain promotional considerations. C. the interplay between pricing and product allocation decisions. D. awareness of and coordination of the relationships among supply chain members. E. customer awareness and retention.

D

_____________ provide a consistent experience for on-line customers who cannot touch and feel merchandise prior to purchasing it. A. Shopping bots B. Price guarantees C. Reduced shipping costs D. Brands E. Well-designed web pages

D

Legal and Ethical Aspects of Pricing

Deceptive or Illegal Price Advertising Deceptive reference prices Loss leader pricing Bait and switch

What are the steps in the marketing research process?

Define objectives and research needs, designing the research project, deciding on the data collection process and collecting the data. analyze and interpret the data, prepare the findings for presentation.

General Merchandise Retailers

Department Stores: Broad variety and deep assortment Full-Line Discount: Broad variety at low price Specialty: Limited merch with service in small store Drugstores: Specialty pharmacy and health Category Specialist: Discount with narrow but deep assortment Extreme Value: Full line, very low prices Off-Price: Inconsistent assortment of brand name at low prices

Conclusive Research Methods

Descriptive Experimental Research can describe a phenomenon or determine a causal relationship. To help the students understand, give examples of two research questions. The first might be finding out how consumers feel about the Audi S4? The other would be finding out how likely the consumer would buy at different price points. The explain how the first is descriptive and the second is experimental.

What are the components of a global marketing strategy?

Determining the target markets to pursue and developing a marketing mix that will sustain a competitive advantage over time.

Kmart

Discounter from long ago Bought by financier (along with Sears) Had some partnerships - prev. Martha Stewart Very inefficient distribution - couldn't find inventory Locations - valuable, stores - old, dirty

Inbound Transportation

Dispatcher coordinates deliveries Manufacturer may pay transportation expenses or retailers may negotiate directly with trucking companies and pay expenses Buyers and planners are much more involved in coordinating the physical flow of merchandise to the stores.

How does one calculate the break-even point in units?

Divide the fixed costs by the contribution per unit (price per unit minus variable cost per unit)

14. Marketers often race into research studies to collect __________________ data because it is designed to address their specific questions, while _____________ data may exist, be cheaper to access, and sufficiently address the marketer's questions. A. secondary; primary B. syndicated; primary C. structured; unstructured D. ratings; unstructured E. primary; secondary

E

16. An example of fixed costs would be a. Factory expense b. CEO salary c. The cost of a copier for the office d. CEO health insurance e. all of the above

E

22. Trading blocs such as the EU a. encourage trade among members nations b. encourage other nations to form or join a trading bloc c. usually result in trade agreements among member nations d. none of the above e. all of the above

E

24. ______________ are often used to gather qualitative data about products and offerings, and reactions to advertising messages and point-of-purchase displays. A. Syndicated data sources B. Observation methodologies C. Promotional reaction surveys D. Secondary research surveys E. Focus groups

E

37. When developing communications for a foreign market (other than the firm's home market), you must consider a. literacy levels b. language differences c. cultural differences d. religious differences e. all of the above

E

39. If you wish to gather open-ended information with no pre-conceived notions, you would choose a. in-depth interviews b. focus groups c. exploratory research d. observation e. any of the above may well be appropriate

E

42. As discussed in class, the UnionTools TrailBlazer snow tool innovation a. was hated by male consumers b. was hated by female consumers c. was faster at removing snow than traditional snow shovels d. was priced higher than most other snow tools e. c and d

E

59. Retailers use ____________________ to get customers to come to their stores. A. in-store promotions B. specialty product displays C. supply chain relationships D. off-price wholesaling E. mass media advertising

E

8. Using a traditional, standard demand curve, ____. a. demand increases as price decreases b. demand decreases as price increases c. demand remains stable as price increases d. demand is highly unpredictable as price decreases e. a and b

E

A "no haggle" pricing policy is a type of _______________ orientation pricing strategy. A. maximizing profits B. target profit C. target return D. status quo E. customer

E

Caroline needs to find information about income and age distribution in Orange County, California. The best source of secondary research of use to Caroline is likely to be: A. door-to-door surveys. B. focus group interviews. C. syndicated data. D. Sales invoices at public libraries. E. Census data.

E

Exchange controls refer to the regulation of a country's: A. comparative inflation rate. B. countertrade exchange facilities. C. tariff-quota rate of exchange. D. exchange rate boycotts. E. currency exchange rate.

E

Labor, materials, and energy are typically __________ costs. A. fixed B. incidental C. prestige D. inelastic E. variable

E

Marketers of products and services associated with the wedding industry know customers often do not care what the price is. They just want it and want it to be perfect. For these customers demand is likely to be: A. cross-price elastic. B. derived demand elastic. C. price elastic. D. status quo elastic. E. price inelastic.

E

Paul's family has owned and operated a small chain of conventional supermarkets. Competition from a variety of other kinds of retailers has adversely affected the business. To address the new competitive reality, Paul wants to apply what he recently learned as a marketing major and he has recommended his family should consider all of the following marketing options EXCEPT: A. emphasize products with a high gross margin. B. target health-conscious and ethnic consumers with the products that would appeal to them. C. provide a better shopping environment within the store to make it more appealing to customers. D. offer more private label brands. E. merge with another small chain to create more leverage in dealing with food producers.

E

Today's huge growth in global markets is the result of many factors including all of the following EXCEPT: A. reduced barriers to trade. B. easier transport of goods and services. C. standardization of laws across borders. D. globally integrated production. E. None - these are all factors

E

Trade Agreements

EU (27 Europe) NAFTA (USA, Canada, Mexico) CAFTA ( US, Costa Rica, Eominican Reupblic, El Salvador, Guatemala, Hondura, Nicaragua) Mercosur ( Argentina, Brazil, Paraguat, Uruguay, Venezuiela) ASEAN (The Association for the Southeast AsianBrunei, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam )

Profit Orientation

Each firm has a specific orientation in the marketplace that dominates its pricing strategy. Profit-oriented firms do not use value as a consideration but rather focus on generating a set level of profit from each sale. Target return pricing Target profit pricing Maximizing profits What are the issues with a profit orientation? Answer: The key issue is that it does not take into consideration the value customers have for the product. This may lead to prices being set below and optimal level.

Price Elasticity of Demand

Elastic (price sensitive) Inelastic (price insensitive) Consumers are less sensitive to price increases for necessities Ex. iPhone, gas, textbooks, toys, women's clothing, eggs Price elastic of demands = %change in quantity demand/% change in price In elastic markets, depending on the level of elasticity, a price increase can increase revenues, but if the increase drives consumers out of the market, demand falls, and a loss of revenue may result. In contrast, in inelastic markets, a price increase almost always increases revenues, because the relationship between price and demand is weak. Pharmaceuticals provide a good example; even if the price of a cancer drug increases, consumers still demand it, so the firm generates more revenue.

Exploratory Data Methods

Example of observation: When a museum wanted to know which exhibits people visited most often, it conducted a unique study to determine the wear patterns in the floor. This "human trace" evidence allowed the museum to study flow patterns. Interviews provide extremely valuable information, because researchers can probe respondents to elicit more information about interesting topics. Focus groups similarly provide a snapshot of customers' opinions and allow some follow-up but also are relatively fast and inexpensive to conduct.

Target

Excellent merchandising Will not accept any in-aisle displays Stores must be clean, neat Good value with style Tried to lower prices to compete w/ WM Designers - "cheap chic" Starting temporary boutiques

Exchange Control

Exchange rate Imports v. exports! Countertrade (barter for goods v. currency) , refers to the regulation of a country's currency exchange rate The Central Bank of a country generally regulates its currency. Many countries try to keep their markets attractive to foreign investors while simultaneously making their goods attractive to foreign buyers through exchange control.

Using Exploratory Research

Exploratory research offers firms the opportunity to narrow their questions and thus arrive at a better research strategy

General Agreement on Tariffs and Trade (GATT)

Facilitating trade across borders is not easy, especially when countries have conflicting regulations that impede trade. This link is to the WTO page "What is the WTO" which would be interesting to view with the students.

Walmart

Fines for missing delivery window Fines for empty shelves Great logistics - take toys later than anyone else Great technology Close relationship w/ P&G, manufacturers - share info. Known for low price; tried some design/style Want product ready to display - pallets action alley, trays Supercenters - newer, brighter; more store formats

Evaluating Real Income

Firms make adjustments to an existing product to meet the unique needs of a particular country market

What are the various supply chain links associated with each information flow step?

Flow 1 (Customer to Store) , Flow 2 (Store to Buyer), Flow 3 (Buyer to Manufacturer), Flow 4 (Store to Manufacturer) , Flow 5 (Store to Distribution Center), Flow 6 (Manufacturer to Distribution Center and Buyer )

Bath & Body Works Repositioning

Focus Groups in 4 cities New York Los Angeles Chicago Columbus Loyal customers, lapsed customers, low-use/no-use women Stimulus Current Product Samples Branding boards with New architectures, products, packaging, branding Store shelf configurations

Customer Orientation

Focus on customer expectations by matching prices to customer expectations Focus on customer expectations by matching prices to customer expectations Premium Pricing Set prices high target a segment of consumers that highly value the particular product

Sales Orientation

Focus on increasing sales Does not always imply low setting low prices More concerned with overall market share Firms that want to attain market leadership set prices at less profitable levels to gain market share.

Supply Chain Management Affects Marketing

Fulfilling delivery promises Meeting customer expectations Reliant on an efficient supply chain

Retailing Metrics

GMROI gross margin dollars divided by average cost of inventory ADS - Average Daily Sales Transaction Drivers Inventory Turns $/SF Same store sales, comps, likes GM/GMROI POS Sell through Lifetime value of customer

GNC Private Brands

GNC sells many brands including its own products - private brands.

Economic analysis using metrics

General economic environment Market size and population growth Real Income

Economic Analysis General Economic Environment

Gross domestic product Gross national income Purchasing power parity Human development index * life expectancy at birth, educational attainment and whether average incomes are sufficient to meet the basic needs of life in that country Each of these standardized measures allow for comparisons across countries. The use of each depends on specific circumstances. Many reports now feature GNI rather than GDP, because it includes the economic impact of firms that earn income from their global operations, unlike GDP, which dramatically undercounts the impact of those activities on the economy of the firms' home markets.

Global Marketing Mix: Global Distribution Strategies

Some global channels are very long and complex. Consumers shop local, small local stores. Suppliers must be creative in delivering to these outlets. Ex. Avon Delivering products to local retailers can be incredibly difficult and frustrating. Infrastructure issues often prevent traditional distribution methods and require creative adjustments. Global firms must find distribution strategies that enable them to reach even really remote markets. For instance, Avon sells and delivers cosmetics to customers using canoes. This example could also prompt an ethical discussion on whether or not firms should be marketing hedonic products or services to consumers with very little disposable income. This YouTube ad (always check before class) is for FedEx and shows how it international distribution can be difficult for many companies.

Country Clusters

High Power distance/ Low Individualism: South America Middle: Poland, Czech Republic, Hungary Mid High Individualism/ Low Power Distance: Germany, Norway, Switzerland, Denmark High Individualism/ Mid Low Power Distance: US, UK, Canada, Austrailia

What is the difference between push and pull supply chains?

In a pull supply chain —orders for merchandise are generated at the store level on the basis of sales data captured by POS terminals. In a push supply chain , the merchandise is allocated to stores on the basis of forecasted demand.

What is the difference between elastic versus inelastic demand?

In general, the market for a product or service is price sensitive (or elastic ) when the price elasticity is less than -1, that is, when a 1 percent decrease in price produces more than a 1 percent increase in the quantity sold. In an elastic scenario, relatively small changes in price will generate fairly large changes in the quantity demanded. The market for a product is generally viewed as price insensitive (or inelastic ) when its price elasticity is greater than -1, that is, when a 1 percent decrease in price results in less than a 1 percent increase in quantity sold. Generally, if a firm must raise prices, it is helpful to do so with inelastic products or services because in such a market, fewer customers will stop buying or reduce their purchases.

Panel Research

In recent years, response rates to marketing research surveys have declined, which has increased usage of research panels. Group of consumers Survey or sales receipts

Marketing Channel

Individuals and firms involved in the process of making a product or service available for use or consumption by consumers or industrial users.

Marketing channel

Institutions

The Marketing Research Process

Step 1: Defining the Objectives and Research Needs Step 2: Designing the Research Project Step 3: Data Collection Process Step 4: Analyzing Data Step 5: Presenting Results

Why are just-in-time supply chain systems becoming so popular?

JIT leads to reduced lead time, increased product availability, and lower inventory investment.

Bath & Body Works

Limited Brands Started within Express stores Focused on bath and body care products Promotion and merchandising - critical Price pressure from mass and class - more later

Global Marketing Mix: Global Communication Strategies

Literacy levels vary by country Firms choose whether to adapt to language differences Cultural and religious differences also matter

Economic Factors

Local economic conditions Increasing disposable income Cross- shopping Increasing status consciousness Increasing globalization

The Distribution Center

Management of inbound transportation Receiving and checking using UPC and RFID Storing and Cross-Docking Getting Merchandise Floor Ready Preparing to ship Shipping to store

Step 3: Data Collection Process

Managers commonly use several exploratory research methods: observation, in-depth interviewing, focus group interviews, and projective techniques. If the firm is ready to move beyond preliminary insights, it likely is ready to engage in conclusive research, which provides the information needed to confirm those insights and which managers can use to pursue appropriate courses of action.

distribution center

Manufacturers can ship merchandise either directly to a store or to a distribution center, where it is then shipped to the store.

Channel Members

Manufacturers, wholesalers and retailers can have different perspectives on pricing strategies Manufactures must protect against gray market transactions Ex. Instructors' textbooks

Using Marketing Information Systems to Create Better Value

Marketing Information System (MkIS) Data Warehouse Data Mining

Code of Ethics

Marketing Researcher He has just finished giving a successful presentation to a major client. The client has asked for a list of companies that participated in the study and copies of all the completed surveys. Confidentiality is one of the first rules under the Code of Ethics. Aaron should not give information to the client unless the research respondents have consented to his doing so. Bottom Line: Marketing research should be used only to produce unbiased, factual information. This web link brings you to the Council of American Survey Research Organizations code of ethics

Survey Research

Marketing research relies heavily on questionnaires, and questionnaire design is virtually an art form. Unstructured: Open Ended Structured: Very Important/Unimportant/etc.

How does supply chain management add value?

Streamlines distribution and affects marketing.

How do firms develop strong strategic partnerships with their supply chain partners?

Successful strategic relationships require mutual trust, open communication, common goals, and credible commitments.

Government Actions

Tariff Wuota Boycott Exchange control Trade Agreement

Tariff and Quotas

Tariff: Tax, Artificially raises prices, Lowers Demand Quotas: Maximum limit, Reduces availabilty of imported goods both benefit domestically made products because they reduce foreign competition Trade negotiations often revolve around reducing or eliminating tariffs, quotas, or similar impediments to trade. Discuss the recent trade battles between the United States and foreign agriculture producers (e.g., sugar, corn). Many foreign producers accuse the United States of limiting market access through unfair tariffs and quotas, whereas the United States insists that it must protect United States agriculture.

Global Marketing Mix: Pricing Strategies

Tariffs Quotas Anti-dumping Policies Economic Conditions Competitive factors

What types of government actions should we be concerned about as we evaluate a country?

Tariffs, quotas, boycotts, exchange controls, and trade agreements

Cross-Price Elasticity

Meet Kendra, self-supporting college student: Buys a new printer on sale for a great price Learns it requires special ink cartridges that cost more than the printer Ex. iPhone and phone plans peripherals. Kendra is caught in a cross-elasticity trap, because her demand for one product generated demand for the other.

Push

Merchandise allocated based on forecast Does not need sophisticated IS system Good for steady demand items - ex. milk, eggs

cross-docked

Merchandise cartons that are cross-docked are prepackaged by the vendor for a specific store.

The European Union (EU)

Monetary and Trade Union Euro Membership does not consist of Croatia, Macedonia, Turkey and several others

Break Even Analysis Formula

Monopoly: Microsoft software products. Oligopolistic: Cable TV firms. Pure: Most frequently purchased consumer goods such as soft drinks.

Competition

Monopoly: Microsoft software products. Oligopolistic: Cable TV firms. Pure: Most frequently purchased consumer goods such as soft drinks.

Demand Curves

Not all are downward sloping - intuitive Prestigious products or services have upward sloping curves Demand increases as prices decrease or Demand decreases as prices descrease

Ethnocentrism

Notion that people in one's own company, culture, or country know best how to do things. Ex. an American point of view; superior to others Esp. managers of affluent countries vs. those of less-affluent countries Primary obstacle to success internationally Be aware, sensitive, and adjust!

Pull

Orders based on sales data More accurate inventory Better when demand is uncertain Often new products

Evolution toward Multichannel Marketing

Overcome the limitations of an existing format Expanding market presence Increasing share of wallet Insights into customer's shopping behaviors

Sociocultural analysis

Power distance Uncertainty avoidance Individualism Masculinity Time orientation

Vertical Integration

Practice where a single entity controls the entire process of a product, from the raw materials to distribution

Toys R Us

Previously, very successful category killer Struggled recently (Walmart is now #1 toy retailer) Highly specialized Issues with exclusives Bought eToys Also has Babies R Us

The Role of Price in the Marketing Mix

Price is usually ranked as one of the most important factors in purchase decisions Price is the only marketing mix element that generates revenue directly

Price is a Signal

Prices can be both too high and too low Price set too low may signal poor quality Price set too high might signal low value Trained the consumer to buy on deal Encouraged pantry loading Finally, across-the-board pricing strategies have also cemented Limited Brands' goods in the minds of its devotees. At Victoria's Secret panties are priced in groups. They've had their "get 5 pairs for $xx" for decades, and this cost has risen only incrementally in the last ten years. Ditto at BBW where smaller sizes of shower gel and lotion are popularly group-priced. The tactic allows consumers to buy more than they might have intended (buy 3 get two free!). But it also feeds them the benefits of trying new products, which in turn creates more reason to shop when they decide they can't live without those new items.

Advantages and Disadvantages of Secondary and Primary Data

Primary: Surveys, Focus Groups, Observed customer behavior Adv: Specific, Behavioral Insights Dis: Costly, Longer, Sophisticated training Secondary: Census, Sales invoices, Internet information, Books, Journal articles, Syndicated Data Adv: Saves Time, Reduces Costs Dis: May not be relevant, timely, not useful, bias

Distribution Intensity

Product characteristics drive supply chain structures, in that mass merchandise products use intensive distribution, whereas luxury goods employ exclusive distribution. Selective, Exclusive, Intensive Pharmaceuticals (selective) Clothing (depends on the product type) Soft drinks (Intensive)

Marketing Mix

Product, Price, Place, Promotion

Four P's

Product: Providing the right mix of merchandise and services Price: Price defines the value of both the merchandise and the service provided Promotion: Retailers use a wide variety of promotions, both within their retail environment and through mass media Place: In retailing there are two aspects to "place." The first is location, and the second is supply chain management. Both are important. Location is important because it is one of consumers' most important criteria in choosing a retailer and it is a very long-term investment.

Company Objectives

Profit orientation, sales oriented, customer oriented, competitor oriented

Identify the four types of company objectives.

Profit orientation, sales oriented, customer oriented, competitor oriented

Supply Chain

Raw Materials, Supplier, Manufacturer, Distribution, Customer, Consumer

Supply Chains Streamline Distribution

Reduce number of transactions Increase value for consumers More efficient and effective An efficient supply chain can lower overall inventory in the system because merchandise is delivered when it is needed (just-in-time). By having an efficient supply chain, the retailers stay in stock, and sales increase. This is a classic FedEx ad with John Moscitta, the fast talking guy, which reinforces the importance of distribution.

Benefits of JIT Systems

Reduced lead time Increased product availability and lower inventory investment

Web Surveying

Response rates are relatively high Respondents may lie less It is inexpensive Results are processed and received quickly The Internet offers researchers a new way to reach customers, but its use requires adaptations and new research methods.

Macro Influences on Pricing

The Internet, smartphones Increased price sensitivity Growth of online auctions

What happens at each step of the merchandise flow in a typical supply chain?

The distribution center is responsible for coordinating inbound transportation; receiving, checking, storing, and cross-docking; getting merchandise "floor ready"; and coordinating outbound transportation.

What are key metrics that can help analyze the economic environment of a country?

The general economic environment, the market size and population growth rate, and real income.

Cross- shopping

The pattern of buying both premium and low-priced merchandise or patronizing both expensive, status-oriented retailers and price-oriented retailers.

Which entry strategy has the least risk and why? Which entry strategy has the most risk and why?

This entry strategy requires the least financial risk but also allows for only a limited return to the exporting firm. Global expansion often begins when a firm receives an order for its product or service from another country, in which case it faces little risk because it has no investment in people, capital equipment, buildings, on infrastructure. Direct investment requires a firm to maintain 100 percent ownership of its plants, operation facilities, and offices in a foreign country, often through the formation of wholly owned subsidiaries. This entry strategy requires the highest level of investment and exposes the firm to significant risks, including the loss of its operating and/or initial investments

Step 1: Defining the Objectives and Research Needs

To determine whether to conduct research, two questions must be addressed: What? How? What information is needed to answer specific research questions? How should that information be obtained?

Storing and Cross-Docking

Traditional- Merchandise is unloaded and placed on racks or shelves for storage Cross-docking- Vendors ship merchandise already prepackaged in quantity required for each store Combination- Merchandise is kept both ways depending on items

Infrastructure and technology

Transportation Channels Communication Commerce

Self-Reference Criterion (SRC)

Unconscious reference to one's own cultural values, experiences, and knowledge as a basis for decisions. Our backgrounds, experiences shape our attitudes Ex. lining up in Italy vs. UK; polite refusal of food or drink; wedding traditions; "gold" color Ex. Disney and Euro Disney Primary obstacle to success internationally

Retailers

Upscale: Barneys New York,[22] Bergdorf Goodman, Bloomingdale's,[22] Saks Fifth Avenue, Neiman Marcus,[22] Nordstrom, [22] Lord & Taylor, Von Maur Middle-market: Macy's,[22] Carson Pirie Scott, Regional: Belk, Boscov's, Dillard's, The Bon-Ton Down-market: JC Penney,[22] Kohl's,[22] Sears Discount department stores: Target, Kmart, Wal-Mart T.J. Maxx, Marshalls, and Burlington Coat Factory are stores that sell designer goods at lower prices, often on a surplus basis.

Experimental Research

Using an experiment, McDonald's would "test" the price of a new menu item to determine which is the most profitable

Costs

Variable Costs Vary with production volume Fixed Costs Unaffected by production volume Total Cost Sum of variable and fixed costs

What issues should manufacturers consider when choosing retail partners?

When choosing retail partners, manufacturers must look at the basic channel structure, where their target customers expect to find the products, channel member characteristics, and distribution intensity.

Choosing a Global Entry Strategy

Why do you think most firms try exporting first? In each strategy, the risks and rewards change. As risk increases, so do the potential rewards. Exporting represents the lowest risk level for the firm. Export Franchising Strategic Alliance Joint Venture Direct Investment

Income effect

a change in the quantity demanded of a product that results from the change in real income (purchasing power) caused by a change in the product's price.

Strategic Alliance

a cooperative agreement between business firms to use the other's already established distribution channel

Data Warehouse

a logical collection of information - gathered from many different operational databases - that supports business analysis activities and decision-making tasks

conventional supermarket

a self-service food store offering groceries, meat, and produce with limited sales of nonfood items, such as health and beauty aids and general merchandise.

Supply chain management

a set of approaches and techniques firms employ to integrate their suppliers, manufacturers, warehouses, stores, and transportation intermediaries into a seamless operation in which merchandise is produced and distributed in the right quantities, to the right locations, and at the right time, as well as to minimize system wide costs while satisfying the service levels that their customers require.

marketing information system (MkIS)

a set of procedures and methods that apply to the regular, planned collection, analysis, and presentation of information that then may be used in marketing decisions.

tariff

a tax levied on a good imported into a country.

Experimental research

a type of quantitative research that systematically manipulates one or more variables to determine which variables have a causal effect on another variable.

Clayton Antitrust Act

add further substance to the U.S. antitrust law regime by seeking to prevent anticompetitive practices in their incipiency.

Price Fixing

an agreement among firms to charge one price for the same good

Vendor-managed inventory

an approach for improving supply chain efficiency in which the manufacturer is responsible for maintaining the retailer's inventory levels in each of its stores.

trade agreement

an intergovernmental agreement designed to manage and promote trade activities for a specific region.

Middleman

any intermediary Betw. manufacturer and end user

Just-in-time inventory systems

are inventory management systems designed to deliver less merchandise on a more frequent basis than traditional inventory systems.

Extreme value retailers

are small, full-line discount stores that offer a limited merchandise assortment at very low prices.

Drugstores

are specialty stores that concentrate on pharmaceuticals and health and personal grooming merchandise.

Fixed costs

are those costs that remain essentially at the same level, regardless of any changes in the volume of production.

Logistical (Intermediaries' Functions)

assorting, storing, sorting, transporting

Exploratory research

attempts to begin to understand the phenomenon of interest and provides initial information when the problem lacks any clear definition.

What are some commonly used survey based metrics?

attitudes, perceived quality, value, and willingness to buy, perceptions (e.g., quality, value), and loyalty (e.g., purchase intentions).

Wholesaler

betw. manu. and retailer/consumer

Transactional (Intermediaries' Functions)

buying, selling, inventory risk taking

Full-line forcing

channel member must carry full line

RFID tags have dramatically reduced the time and labor associated with: the Four Ps. promotion and advertising. checking and receiving merchandise. franchising. demand forecasting.

checking and receiving merchandise.

For a JIT system to be successful, the firm and its vendors need to do all of the following EXCEPT cooperate. compete. develop EDI systems. develop CPFR systems. share data.

compete

Specialty stores

concentrate on a limited number of complementary merchandise categories and provide a high level of service in relatively small stores.

Marketing research

consists of a set of techniques and principles for systematically collecting, recording, analyzing, and interpreting data that can aid decision makers involved in marketing goods, services, or ideas.

Marketing Information System

consists of people and procedures for assessing information needs, developing the needed information, and helping decision makers to use the information to generate and validate actionable customer and market insights

Syndicated data

data available for a fee from commercial research firms such as Information Resources Inc. (IRI), National Purchase Diary Panel, and ACNielsen.

Loss leader pricing

deliberately selling a product below its customary price not to increase sales but to attract customers attention in hopes that they will buy other products as well

quota

designates the maximum quantity of a product that may be brought into a country during a specified time period.

Category specialists

discount stores that offer a narrow but deep assortment of merchandise.

JCP - 3-tier strategy - not working

discounting all merchandise by at least 40%. special monthly deals clearance offerings the first and third Friday of each month

Which of the following is a common activity associated with logistics management? demand forecasting. inventory control. return goods handling. order processing. all of the above.

e

Break-even analysis

enables managers to examine the relationships among cost, price, revenue, and profit over different levels of production and sales.

What is the difference between exploratory and conclusive research?

exploratory research attempts to begin to understand the phenomenon of interest; it also provides initial information when the problem lacks any clear definition. Conclusive research provides the information needed to confirm exploratory research insights and which managers can use to pursue appropriate courses of action.

Facilitating (Intermediaries' Functions)

financing, grading, marketing info/research

Distributor

imprecise term

strategic relationship or partnering relationship

involves the supply chain members being committed to maintaining the relationship over the long term and investing in opportunities that are mutually beneficial.

survey

is a systematic means of collecting information from people that generally uses a questionnaire.

Panel research

is a type of quantitative research that involves collecting information from a group of consumers (the panel) over time.

Scanner research

is a type of quantitative research that uses data obtained from scanner readings of UPC codes at check-out counters.

Evaluating Market Size and Population Growth Rate

is it in the best interest of a rapidly developing country to encourage foreign retailers to stimulate the economy even though they might harm small family owned businesses? Students are likely to reflect on the landscape of the U.S. retail industry and notice the harm of some large retailers.

Infrastructure

is the basic facilities, services, and installations needed for a community or society to function.

Income effect

is the change in the quantity of a product demanded by consumers due to a change in their income.

Electronic data interchange (EDI)

is the computer-to-computer exchange of business documents from a retailer to a vendor and back.

Warehouse clubs

large retailers that offer a limited and irregular assortment of food and general merchandise with little service at low prices for ultimate consumers and small businesses.

Supercenters

large stores that combine a supermarket with a full-line discount store.

Agent or Broker

legal authority

Marketing managers often focus on ____________, while logistics managers focus on _____________, causing conflict when trying to provide value to customers. maximizing sales; minimizing costs presentation; packaging cross-tracking; double accounting minimizing costs; maximizing sales decentralization; centralization

maximizing sales; minimizing costs Explanation: Because of their roles within an organization, marketing managers often focus on maximizing sales, while logistics managers focus on minimizing, causing conflict when trying to provide value to customers.

Refusal to deal

may be illegal - choose partners

What are the advantages of a distribution center?

more accurate sales forecasts due to many stores lower inventory in each story therefore lower overall inventory costs overstock and under-stock is less of a problem it is less expensive to store in a remote warehouse then expensive retail location.

Dealer

more imprecise

Tying arrangements

must buy whole grp. of products

Dual distribution/vertical integration

not always illegal, maybe anticompetitive if manu. distributes its own products against wholesalers and retailers

Disadvantage of distribution center

not best if the retailer has few outlets and/or the stores are consolidated

Disintermediation

occurs when a manufacturer sells directly to consumers, bypassing retailers.

boycott

pertains to a group's refusal to deal commercially with some organization to protest against its policies.

exclusive distribution

policy is when manufacturers grant exclusive geographic territories to one or very few retail customers so no other customers in the territory can sell a particular brand.

Convenience stores

provide a limited variety and assortment of merchandise at a convenient location in 2,000-3,000 square foot stores with speedy checkout.

Conclusive research

provides the information needed to confirm preliminary insights and which managers can use to pursue appropriate courses of action.

Multichannel Retailing

providing multiple distribution channels for consumers to buy a product

Data

raw numbers or other factual information that, on their own, have limited value to marketers.

substitution effect

refers to consumers' ability to substitute other products for the focal brand.

Exchange control

refers to the regulation of a country's currency exchange rate, the measure of how much one currency is worth in relation to another.

Scanner Research

researchers can discover which consumers purchase what products together and how often. They also can immediately track the impact of any price or promotional adjustments. This web link brings you to IRI homepage - explore their many products with the students.

Department stores

retailers that carry a broad variety and deep assortment, offer customer services, and organize their stores into distinct departments for displaying merchandise.

Full-line discount stores

retailers that offer a broad variety of merchandise, limited service, and low prices.

Retailer

sells to consumers

Skimming

setting a price at the highest level the market will bear, usually because there is no competition at the time

Demand Curves and Pricing

show the relationship between the quantity demanded of a good and its price; more demanded, higher the price. Knowing demand curve enables us to see relationship between price and demand

maximizing profits

strategy assumes that if a firm can accurately specify a mathematical model that captures all the factors required to explain and predict sales and profits, it should be able to identify the price at which its profits are maximized.

intensive distribution

strategy is designed to get products into as many outlets as possible.

Exclusive dealing

supplier limits what other products can be sold by channel member

Resale restrictions

supplier's attempt to control distribution and reselling

Power distance

the acceptability of status differentials between members of a society

Price Discrimination

the business practice of selling the same good at different prices to different customers

Variable costs

the costs that vary with production value.

Price

the overall sacrifice a consumer is willing to make to acquire a specific product or service.

Cross-price elasticity

the percentage change in the quantity of Product A demanded compared with the percentage change in price in Product B.

Predatory Pricing

the practice of charging a very low price for a product with the intent of driving competitors out of business or out of a market

Data Mining

the process of analyzing data to extract information not offered by the raw data alone

total cost

the sum of the variable and fixed costs.

Radio frequency identification (RFID) tags

tiny computer chips that automatically transmit to a special scanner all the information about a container's contents or individual products.

Selective distribution

uses a few selected customers in a territory.

General Agreement on Tariffs and Trade (GATT)

was to lower trade barriers such as high tariffs on imported goods and restrictions on the number and types of imported products that inhibited the free flow of goods across borders.

Joint Venture

when a domestic firm buys part of a foreign company or joins with a foreign company to create a new entity

Substitution effect

when consumers react to an increase in a good's price by consuming less of that good and more of a substitute good Meet Pete, college student on a budget: Old Spice Sport Deodorant user At the store he notices that Old Spice is more expensive Pete decides to give another brand a try and save money