Marketing (BA 311) Exam 2 Key Terms

Transportation Forms and Characteristics *

-Railroads -Motor Carriers -Waterways (US) -Airways -Pipelines

Co-Branding

2+ brand names in conjunction working together to brand a product or service

80-20 Principle

80/20 Principle - 80% percent of purchases made by 20% of buyers (within a given segment)

Direct v. Indirect Channels of Distribution

A direct distribution channel is organized and managed by the firm itself. An indirect distribution channel relies on intermediaries to perform most or all distribution functions, otherwise known as wholesale distribution.

Channel Conflict (Vertical v. Horizontal)

A horizontal conflict refers to a disagreement among two or more channel members at the same level. Vertical conflicts involve a disagreement between two channel members on consecutive levels. For example, if the toy manufacturer discovers its products are arriving at retail stores later than scheduled, a conflict might develop between the manufacturer and the wholesaler responsible for shipping to retailers. At the same time, the retail stores might be in conflict with the wholesaler due to its inability to ship products on time.

Branding

A set of distinguishing characteristics that differentiates a company, product or service from another

Scrambled Merchandising

A situation that occurs when a retail business offers a mix of unrelated products that do not reflect the company's original focus. Scrambled merchandising often reflects a scattered product management approach and can make a negative impression on consumers since they might not be sure what sort of products the retailer offers.

Product Item

A specific model

Marketing Audit - Horizontal v. Vertical

Marketing audits: Horizontal (all 4-Ps are analyzed) and Vertical (in-depth 1-P)

Massed vs. Distributed - Promo Expenditures

Massed: most promo $ spent is during certain times of the year Distributed: evenly distributed spending throughout the year

Penetration Pricing (and associated objective)

Penetration pricing is the practice of offering a low price for a new product or service during its initial offering in order to attract customers away from competitors. Associated with the Sales-Based pricing objective: increase volume of sales based on sale/market share

Personal Selling

Personal selling: oral communication with prospective buyers by paid representatives for the purpose of making sales.

Price Floor v. Price Ceiling (defined and as aligned with Cost or Demand-Based Pricing)

Price Floors (COST BASED) are minimum prices set by the government for certain commodities and services that it believes are being sold in an unfair market with too low of a price and thus their producers deserve some assistance. Price floors are only an issue when they are set above the equilibrium price, since they have no effect if they are set below market clearing price. Price Ceilings (DEMAND BASED) are maximum prices set by the government for particular goods and services that they believe are being sold at too high of a price and thus consumers need some help purchasing them. Price ceilings only become a problem when they are set below the market equilibrium price.

Product Differentiation w/ Price or Non price based approach?

Price-based strategy: seller influences demand through price changes. Non price-based strategy: the more unique an item is, the less price matters. Price-Based Approach: Lowering price to increase demand. Non price-Based Approach: firm shifts demand curve (differentiating product from competitors)

Promotional Budgeting Techniques

All-You-Can-Afford Method: Allots funds for other elements of marketing; And rest of marketing funds go to the promotion budget. Incremental Method: A percentage change from this year's budget to determine next year's. Competitive Parity Method: Promotion budget is raised or lowered according to competitors' actions. Percentage-of-Sales Method: Promotion budget is tied to sales revenue. Objective-and-Task Method: Firm sets promotion goals, determines the activities needed to satisfy them, and establishes a budget.

Trade Character

Brand mark, personified

Bundled v. Unbundled Pricing (example)

Bundled Pricing Bookcase --$489 Includes delivery, assembly, staining Unbundled Pricing (Price Partitioning) Bookcase -- $379 Delivery -- $50 Assembly -- $35 Staining -- $65

Agents/Brokers*

Cash flow comes in when the sale is made

Channel Conflict Resolution - three types covered in lecture/video

Corporate system: one member owns all channel parts; same company owns the whole channel Contractual System: members of the channel sign contracts to "franchise"; licensing corporate Administered System: one of the members of the channel is bigger and dictates where the distribution takes place and to and through whom

Hidden Service Sector

Fees that are tacked onto the cost of certain goods or services. Includes such areas as: -delivery -installation -training -maintenance -repair

Freight Forwarders

Firm specializing in arranging storage and shipping of merchandise on behalf of its shippers. It usually provides a full range of services including: tracking inland transportation, preparation of shipping and export documents, warehousing, booking cargo space, negotiating freight charges, freight consolidation, cargo insurance, and filing of insurance claims

Publicity

Form of PR that entails non personal communication (via media) but not paid for by a sponsor.

Guerrilla marketing - defined, I.D. examples

Guerilla Marketing: low cost, very unusual advertising strategies - often implemented locally Example: Coca Cola machine, flash mob, viral video, etc.

Price Fixing - Horizontal v. Vertical (illegal?)

Horizontal: an illegal arrangement among competitors to charge the same price for an item compare vertical price-fixing Vertical Price Fixing (AKA Price Maintenance): an arrangement in which parties at different levels of a system of production and distribution act to fix the market price of goods

Direct Marketing v. Direct Selling

Direct marketing: An ad campaign that seeks to elicit an action (i.e., an order, a visit to a store or Web site, or a request for info) from consumers in response to a communication (i.e., postal mail, telemarketing, direct e-mail marketing, and point-of-sale (POS) interactions.) Customer response should be measurable. (If customer is offered a discount for online shopping ,do they take advantage of the offer?) Direct selling is the marketing and selling of products directly to consumers away from a fixed retail location. Peddling is the oldest form of direct selling. Modern direct selling includes sales made through the party plan, one-on-one demonstrations, and other personal contact arrangements as well as internet sales.

Distribution Intermediaries (DIs)

Distribution of goods takes place by means of channels, and the intermediaries are the independent groups or organizations within the channel that make the product available for consumption. There are four main types of intermediary: agents, wholesalers, distributors, and retailers.

Channel Functions

Distribution, Pricing, Product Planning, Customer Service, Promotion, Buying, and Marketing Research

Durable v. Non-Durable Goods

Durable goods: physical goods used over an extended time. Nondurable goods: consumable products made from materials other than metal, wood, and hard plastics.

Logo Type (example)

Example: IBM!

Combination Mark (example)

Example: NASA Uses the company name and an image in the logo.

Intensity of Channel Coverage (3 approaches) - align w/ Target Market, Pricing Objectives and Strategies): Sync up strategies on grading sheet *

Exclusive Distribution: Limited number of resellers in area. Selective Distribution: A firm employs a moderate number of resellers in an area. Intensive Distribution: A firm uses a large number of resellers in an area.

Attributes of Service (Differentiate Intangibility, Perishability, Inseparability & Variability)

Intangibility: Cannot be displayed, transported, stored, packaged, or inspected before buying. (Repair, advice) Perishability: Cannot be stored for future sale (Food, empty seats) Inseparability: A service provider and his or her services may be inseparable Variability: Differing service performance from one time to another

(Distribution) Channel

Factors to Consider in Selecting a Distribution Channel -The Consumer -The Company -The Product -The Competition -Distribution Channels -Legalities

Jingle vs. Slogan - effectiveness?

Jingle: audio signpost and psychological device Much more effective than a slogan

JIT - Inventory System and AKA

Just in time (JIT) AKA Quick Response - is an inventory strategy companies employ to increase efficiency and decrease waste by receiving goods only as they are needed in the production process, thereby reducing inventory costs.

Wholesalers Categories (3) + Cash Flow with Each

Manufacturer/Service Provider Wholesaling: cash flow delayed until sale is made Merchant Wholesaling: cash flow immediate Agents and Brokers: cash flow when sale is made

Product Positioning

Maps out consumer perceptions of product attributes

Value Added and Subtractors

Value Added: Increasing the value of the product Value Subtractors: Value is diminished at any stage of production or distribution

Media considerations/terms (Reach, Waste, etc.)

Reach: # of viewers, readers, listeners in medium's audience. Waste: medium's audience - not in advertisers target audience. Medium: personal or non-personal channel for a message Message permanence: # of exposures an ad generates

Product Line

Related models/ products offered in the same product category.

Services Marketing - Rented Goods, Owned Goods, Non Goods Examples

Rented Goods Services: vehicle leasing, hotel rooms, office space, wedding items Owned-Goods Services: lawn and home care; auto or computer repair Non-goods Services: personal advice, tutor, legal or accounting

Benchmarking

Set points of comparison for performance,relative to: self, "direct" or "best" competitors, innovative firms from other industries.

Branding: Licensing

co pays fee to use name/logo

Opinion Leaders

those who influence others' decisions.

Wholesaler Functions (Slide) and AKA

AKA Distributors

Reverse Logistics (AKA)

AKA Returns

Brand Line (AKA)

AKA Slogan

Brand Mark (AKA)

AKA logomark - cannot be "read" Example: Apple

Mark-up v. Mark-down - Approaches to Pricing

A Markdown is the difference between the highest current bid price among dealers in the market for a security and the lower price that a dealer charges a customer. A markup is the difference between an investment's lowest current offering price among dealers and the higher price a dealer charges a customer. Markups occur when dealers act as principals (buying and selling securities from their own accounts, at their own risk), as opposed to brokers (receiving a fee for facilitating a transaction).

Trademark or Servicemark

A brand name, brand mark, trade character, combination mark, etc., that is given legal protection.®

Advertising

Advertising is paid, nonpersonal communication.

Atmospherics (Brick and Clicks perspectives)

All the physical attributes a retailer uses to develop an image and draw customers. Four basic physical components: -Exterior -General Interior -Store Layout -Interior (Point-of-Purchase Displays)

Cost-based Pricing

Begin with costs and work towards selling price

Public Relations

Communication to foster a favorable image among publics.

Competition-Based Pricing

Compare prices to those of the competition and adjust accordingly to control sales

Consumer-based Price Discrimination: types & examples

Customer-based: haggling, price varies from person to person Product-based: same product, but some have "better" features for a higher price. Ex: black fridge is more $ than a white fridge Time-based: matinee films are cheaper than evening showtimes Place-based: nose bleed tickets at a sports event are cheaper than courtside

Categorize Retailers by Method of Ownership *

Independent: Chain: Franchising: Leased Department:

Individual Branding (AKA)

Individual (Multiple) branding - differ products/brands.

Network Marketing -AKA - pyramid" scheme or not? *

It is usually a pyramid scheme if the product/service is sold only to friends and family.

Logistics - list functions and examples

Logistics (aka physical distribution) - activities required to efficiently deliver raw material, parts, semi- finished and finished items. Includes: -customer service -shipping -warehousing -inventory control -trucking operations -packaging -receiving -materials handling -plant, warehouse & store location planning

Multiple Branding - AKA and Examples *

Multiple Branding AKA Individual Branding Example:

Product Depth vs. Product Width

Product Width: the total number of product lines offered. Product Depth: the number of different offerings within each product line.

Pricing Objectives (Sales-Based, Profit-Based or Status Quo Based) & associated pricing strategy

Sales based: increase volume based on sales/market share Strategy: Penetration Pricing Profit based: maximize profit, allows for an early ROI Strategy: skimming pricing (those who want the product early or want better quality will pay a higher premium) Status Quo based: price stays relatively constant Strategy: Competitive Pricing Strategy (price maintenance)

Products defined: Generic, Tangible, Augmented

Tangible: Produced via material specs to create Red color Augmented: "Exclusive line", with free first make-over included. Generic: Offers customers hope of beauty and the possibility of a relationship".

Product Mix

The assortment of all the firm's products, comprised of product: -Width -Depth -Consistency

Marketing Mix (4 P's)

The marketing mix consists of four elements: product, distribution (place), promotion, and price.

Paradox of Choice

When there are too many available product or service options, the consumer can become overwhelmed with the excess of options and end up choosing nothing.