New Business Venture - (Quiz4-Final)

What is odd-even pricing?

Setting prices a few dollars or cents under an even number (Setting a price that ends in the number 5, 7, or 9.) ex: $19.99 or $45

What is partitioned pricing?

Setting the price for a base item and then charging extra for each additional component. ex: product is $4 but shipping and handling is and additional $5

Dividing the market can be done several ways...

- Geographically - Demographically - By the benefits sough

Price Lowering Techniques

- Periodic or random pricing - Off-Peak pricing - Bundling - Multiple or bonus pack - Coupons, Rebates, Loyalty and Referral Programs - Referral discount

Trade discounts

Percentage discounts from gross invoice amountsprovided to encourage prompt payment

Direct response advertising

Placing an advertisement in a magazine or newspaper, on television or radio, or in any other media

Segmentation

Process of dividing the market into smaller portions of people who have certain common characteristics

Predetermined market segments

Professionally compiled target audiences basedon shared demographic, financial, shopping, andpsychographic characteristics.

Process of personal selling

Prospect and Evaluate Prepare Present Close Follow-up

What is advertising?

Purchased promotions ex. Billboards, tv ads...

pen-ended question

Question that allows respondents to express themselves as they choose; for example, "What do you like about this book?"

Dichotomous question

Question that has only two possible choices; forexample, "Have you shopped here before?"

Categorical question

Question that is answered by selecting the proper category; for example, "What is your ethnicity?

Noncore projects

Revenue-producing tasks and activities related to, but not part of, the primary strategy of a business

Non-cash incentives

Rewards that do not require payment of cash, such as stock options, compensating time off, or added vacationdays

What is periodic or random discounting?

Sales conducted at either predictable or non-predictable intervals

Prospects

Sales leads who actually make some sort of effort to learn more about the product, service, or business in anticipation of a possible purchase

Scalar question

Scalar question Question that is answered by some sort of scale; for example, "On a scale of 1 to 5, how do you like this book?"

Direct marketing

Selling your goods or services to consumers without intermediaries, typically to select customer groups and typically with tracking of the results

Perishability

Service exhibits perishability in that if it is not used when offered, it cannot be saved for later use

What is prestige or premium pricing?

Setting a price above that of the competition so as to indicate a higher quality or that a product is a status symbol.(higher price=better product?)

What is skimming?

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

What is captive pricing?

Setting the price for an item relatively low and then charging much higher prices for the expendables it uses. ex: razor $2 and replaceable blades $7

Focus group

A form of data gathering from a small group led by a moderator

Concentrated strategy

A marketing strategy in which a marketer selects one specific group of consumers and designs a marketing mix specifically for that group

Differentiated strategy

A marketing strategy in which a marketer selects two or more distinct groups of consumers and designs specific marketing mixes to meet their needs

What is publicity?

Free mention of a company,person, or product/service in the media

Three typical locations

- At the client's location - At a mutually accessible location - At your firm's location

What is optimum price is based on?

- Demand for the product or serviceValue delivered to the customer - Prices set by competing firms - Your business strategy and product placement

What are the stages of new product development?

1. Idea generation 2. Idea screening 3. Idea evaluation (feasibility study) 4. Product development 5. Commercialization

Public Importance

1. Things that are considered important to largenumbers of otherwise unrelated people 2. Things that are of civic importance, as opposedto private or corporate entities.

Things to remember with the total product approach...

1. Your product means more to the consumer than just the core product 2. Don't waste time and money designing features for your product or service that your target market doesn't wan 3. Knowing what your product "means" to consumers will help you set an appropriate price

Products are defined by...

:• Physical attributes • Performance characteristics • Pricing • Branding • Delivery

Issue recognition

A concept in public recognition which alludes to the extent to which the public is familiar with the issue or problem at hand

Mark-up pricing

A price-setting method where an amount is added to the cost of a product to set the retail price and provide a profit

What is elastic product?

A product for which there are any number of substitutes and for which a change in price makes a difference in quantity purchased Ex: Toys, fast-food restaurants...

What is price inelasticity?

A product for which there are few substitutes and for which a change in price makes very little difference in quantity purchased Ex: Gasoline

What is product tangibility?

A products capability to be touched, seen, tasted, or felt

Heterogeneity

A quality of a service in which each time it is provided it will be slightly different from the previous time

Inseparability

A quality of a service in which the service being done cannot be disconnected from the provider of the service

Discounts for prompt payment

A reduction in sales price provided to credit customers for paying outstanding amounts in a timely manner

Cash disbursements budget•

A schedule of the amounts and timings of payments of cash out of a business

Microinventory

A set of goods or service that consists of onlyone or a few items

Viral marketing

Any electronic equivalent of word-of- monthadvertising, in which the advertiser's messagespreads quickly and widely via e-mail, website,blogs, and other online tools.

What is a core product?

Basic description of what a product is

Factoring receivables

Borrowing money secured by a firm's accounts receivable

Cash-to-cash cycle

Cash=> Purchases=> Product=> Sales=> Cash

Just-in-time inventory

Having just enough product on your shelves tomeet the immediate purchases

Hit rate

How many prospects or leads you need to approachin order to make one sale

Succinct Message

The key point in as few and as memorable words as possible

Who is the end user?

The person who eventually makes actual use of a product or service in his or her personal or work life.

What are augmented products?

core product, plus features that tend to differentiate it from the competition

Cash Budget

• A cash budget identifies when, how, and why cash isexpected to come into the business, and when, how, andwhy it is expected to leave

Techniques to increase cash inflow

- Deposits and progress payments - Discounts for prompt payment - Noncore Projects - Factoring Receivables

How do you decide price?

- Examine existing market prices for similar products and services - Consider your business costs

Pricing strategy wrap up...

- Temporary reduction in price won't tarnish your product image - Consumers also feel smart about buying something at a better price - They will feel they got a great deal

Techniques to Decrease Cash Outflows

- Trade discounts - Non-cash incentives - Consignment - Barter - Timing Purchases - Gaming the payment process

What are the four service/product life cycle?

1. Introduction 2. Growth 3. Maturity 4. Decline

Why is price important?

1. Price is a major factor in determining customers'perceptions of quality and desirability 2. Because of this, price is central to competitivestrategy 3. Price is directly related to your company's grossrevenue and sales volume

What are the four P's of marketing? (a.k.a. The marketing mix)

1. Product 2. Price 3. Place 4. Promotion

What are the six pricing strategies?

1. Skimming 2. Prestige or premium pricing 3. Odd-even pricing 4. Partitioned pricing 5. Captive pricing 6. Price Lining

Proximity

A concept in public recognition which alludes to the impact level of the issue being discussed

What is internal reference price?

A customers mental image of what a products price should be.

What is a Customer profile?

A detailed description of an archetypical or hypothetical potential customer for a product or service, also called a customer persona.

What is Referral discount?

A discount given to a customer who refers a friend to the business.

Letter of credit

A document issued by a bank that guarantees abuyer's payment for a specified period of timeupon compliance with specified terms

Documentary draft

A draft which can be exercised only whenpresented with specified shipping documents

Undifferentiated strategy

A marketing strategy that uses no segmentation

Agent

A middleman business which represents a manufacturer's product or service to other business-to-business middleman firms

Mat release

A news release that is typeset and thus may bephotographically reproduced for inclusion in anewspaper

What is a target market?

A particular group of customers at which a product or service is aimed.

Who is the Decision maker?

A person in an organization who is responsible for choosing which product or service will be obtained

Who is the Influencer?

A person or group who can make credible or recognized suggestions or recommendations to others regarding purchase choices

Market penetration

A strategy whose goal is growth, based on sellingmore of the firm's product or service to theexisting customer base.

What is a Budget cycle?

A term applied to the schedule and the process for setting the schedule for making purchases by an individual or an organization

Customer vector

A type of CRM report which segments by customer (or customer group) on purchases or dates of purchase

Media kit

A type of specialized web page or sales-material-based package (hard copy or PDF) sent to mediaoutlets that is focused on telling them aboutyour company and its story

Sales leads

People who receive a promotional impression and who give some thought to buying the product

Public relations

Activities used to establish and promote a favorable opinion by the public.

Press relations

Activities used to establish and promote afavorable opinion by the media

E-tailer

An electronic retailer; a store that exists only on the Internet

What is external reference price?

An estimation of what a products price should be base don advise, advertisements, or comparison shopping.

Who is the purchaser?

An individual or institution that pays for or obtains a product or service.

Retailer

An intermediary business that sells to consumers or end users of a product(typically in single or small quantities)

What are some sale triggers?

Avoiding Pain and Ease of User • Reciprocity • Trust Building - Openness, transparency • Your Story - The brand and liking and identifying with • Scarcity - FOMO; Fear of Mission out • Commitment and Consistent - Get the product in the customershand, constant contact • Social Proof - Testimonials • Authority - Expert in the field

What are some examples of augmented products?

Brand names, quality levels, packaging...

Cash Receipts Budget budgeting begins with what?

Cash Receipts Budget budgeting begins with a forecast of sales

Charging an outrageously high price forsomething

Charging an outrageously high price for something

What is off peak pricing?

Charging lower prices at certain times to encourage customers tocome during slack periods9-30

What is multiple or bonus pack?

Combining more than one unit of the same product and pricing it lower than if each unit were sold separately. ex. 3count pack of Kleenex

What is bundling?

Combining two or more products in one unit and pricing it less than if the units were sold separately. Ex Hulu, Disney+, and ESPN bundle for one price.

Ethnographic Research

Data gathered by simple observation—seeing what consumers do, rather than asking them

Cognitive dissonance

Doubt that occurs after a purchase has beenmade

Freight forwarders

Firms specializing in arranging international shipments— packaging, transportation, and paperwork

What is the key to successful branding?

Focusing on the product's primary benefit and problem you are solving.

Promotional Mix

How much of each message conveyance you will use to sell your product as well as your objective in using each one

Promotion

How will you advertise and publicize your product?

Why don't most businesses provide/extend credit to customers?

If you offer credit, you will always have to wait someperiod of time to collect (sooner or later you will have acustomer that doesn't pay) • Customers' heavy use of credit cards can cause seriouscash drain • Sales are made by cash or credit card • Cash flow problems can still occur when sales areinsufficient to cover required payment

Publicity

Information about your company and its activities that is disseminated to the public in order to gain their good opinion.

Free Ink

Mentions of your company or products in the mediafor which your firm did not pay

Direct sales

Methods of going directly to your customer inorder to sell your product

Channels

People and firms who connect producers of goods and services with customers

Marketing Research

Systematic collection and interpretation of datato support future marketing decisions

Serviceable Obtainable Market (SOM)

Term (also called the target market) that represents the customers that a firm expects to be interested in its particular product or service, and able to be serviced by the firm.

Margin

The amount ofprofit, usually statedas a percentage ofthe total price

Service Available Market (SAM)

The customers within the geographic reach of a firm

What is total product?

The entire bundle of products, services, and meanings of your offering; includes extras like service, warranty, or delivery, as well as what the product means to the customer.

Primary Research

The gathering of new information, using techniques such as interviewing, surveying, and observation

What is optimum price?

The highest price that would produceyour desired level of sales (or revenues) in yourtarget market.

Consignments

The practice of accepting goods for resale, without taking ownership of them and without being responsible to pay prior to their being sold

What is price lining?

The practice of setting (usually) three price points: good quality, better quality, best quality. ex: Hulu w/ads, Hulu w/o ads

Barter

The practice of trading goods and services without the use of money

What is the product developmental process?

The procedure to organize and pursue the creation of new goods or services.

What is the customer development process?

The procedure to organize and pursue thefinding, obtaining and keeping of new customers.

Customer relationship management (CRM)

The process of tracking the customer's differentcontacts with the firm, and using this data tohelp improve sales as well as the customer'sexperience

Marketing funnel

The rule of thumb in marketing that it takes alarge number of people to be made aware ofyour product in order to find a purchaser

Target market

The segment or segments you select on which toconcentrate your marketing effort

What is the Purchasing process?

The sequence of steps an individual or organization goes through in making a decision to buy a product or service

Total Available Market (TAM)

The total possible size of the market

When picking a place consider...

The type of business affects the location thatworks best .• Who are your customers? • Where do they shop? • Goal: Find a location affordable for you, yetalso convenient for customers.

Guerilla marketing

The use of creative and relatively inexpensiveways to reach your customer

Secondary Research

The use of existing information, often from government, commercial, or academic databases and research efforts

Multichannel marketing

The use of several different channels to reachyour customers, for example, a Web site, directmail, and traditional retailing

What is the purpose of the four P's of marketing?

To communicate your marketing vision and competitive advantage?

True or False: It's easier to extend life cycle, and virtually eliminate the decline stage of a service

True

True or False: Services are often much easier to change "on the run"

True

True or False: Services, in effect, begin new life cycles with eachtweaking

True

What is a Pivot?

Typically, a term describing a change of direction in the thinking of an entrepreneur or a firm, often based on new data or other findings.

What are promotions?

Use of advertising and publicityto get your marketing message to your customers

Product

What are you selling?

Price

What does the price say about your product?

Place

What is the best location for your business?

Impression

What it is called when someone notices a promotional effort

What is product inseparability?

When a service can not be disconnected from its provider

Explain the scarcity sales trigger

When marketers introduce something that is scarce or limited, consumers are more motivated to take action

Penetrated Market (PM)

the actual number of customers of an operating firm, divided by the size of the target market, which gives a percentage of the market the firm has attained so far. (product/service)

Timing purchases

• A method of controlling the timing of cash outflows thatis invisible to suppliers and vendors

Cash receipts budget

• A schedule of the amounts and timings of the receipt of cash into a business

What are some promotion methods?

• Advertising specialties• Banner ads• Billboards• Blogs• Broadcast media• Brochures• Business cards.....

Payables

• Amounts owed to vendors for merchandise or services purchased on credit

Receivables

• Amounts that are owed to a business former chandise that was sold on credit

Deposits and progress payments

• Cash payments received before product is completed ordelivered

What are the four points to remember when establishing your brand?

• Choose an easy-to-remember name that describes your business. • Design a logo that symbolizes your business. • Develop a good reputation. • Create a brand "personality" and communicate it to your target market.

Establish your brand take away...

• Name • Brand personality • Logo

What are some social media strategies?

• Outreach can reach largenumber of followers • Develop strategy - Give content followers want - Be consistent - Use CTA's • Content• - Beautiful imagery - Compelling and engaging text - Video • Networks, shout outs, contestsand giveaways • Paid advertising - Target specific users - Email lists

Total approach take away...

• Physical attributes • Performancecharacteristics • Pricing • Branding • Delivery • Problem you are solving

Gaming the payment process

• Using methods to appear to be paying bills on time, when in fact payment is being delayed or avoided.

For distribution consider....

• What channels do you plan to distribute your product on?• What does your supply chain look like?