Mark231 Test 4
A college bookstore pays about (functional) one-third less for a new textbook than the retail price a student pays is an example of trade
A college bookstore pays about (functional) one-third less for a new textbook than the retail price a student pays is an example of _______
c. customers
A major goal of integrated marketing communications is to send a consistent message to _______. a. shareholders b. employees c. customers d. ad agencies e. managers
A marketer needs to know competitors' prices so it can adjust its own prices accordingly •When adjusting prices, a marketer must assess how competitors will respond
A marketer needs to know competitors' _______ so it can adjust its own _____ accordingly
•A marketer should be careful to analyze all costs so they can be included in the total cost associated with a product
A marketer should be careful to analyze ___ _____so they can be included in the total cost associated with a product
e. A decrease in total revenue
ACME Corp.'s widgets have elastic demand. If ACME raises the price of widgets, what will be the result? a. A decrease in market share b. A decrease in product inventory c. An increase in total revenue d. An increase in market share e. A decrease in total revenue
•Breakeven point - The point at which the costs of producing a product equal the revenue made from selling the product
Breakeven Analysis _______ ______- The point at which the costs of producing a product equal the revenue made from selling the product
•Stabilize supply •Reduce costs •Increase channel member coordination
Channel Integration (horizontally or vertically) may do three things?
Channel captain (channel leader)
Channel ________ is a dominant leader of a marketing channel or a supply channel
Channel management
Directing the flow of products
Form utility
Formed by assembling, preparing, or otherwise refining the product to suit individual customer needs is ____ utility
d. exclusive distribution
In any one large metropolitan area, there is usually just one Ferrari luxury sports car dealer. This best illustrates _______. a. digital distribution b. selective distribution c. intensive distribution d. exclusive distribution e. multichannel distribution
c. receiver
In the communication process, the _______ is the individual, group, or organization that decodes a coded message. a. feedback b. communications channel c. receiver d. noise e. source
•In the context of price, buyers can be characterized according to their degree of: •Value consciousness •Price consciousness •Prestige sensitivity
In the context of price, buyers can be characterized according to their degree of:
Sometimes •Some promotions are deceptive, but not all promotion should be condemned •Laws, government regulation, and industry self-regulation have helped decrease deceptive promotion
Is promotion deceptive?
Place
Making products available in locations where customers wish to purchase them is _____ utility
A farm equipment dealer takes a farmer's used tractor as a trade-in on a new one. Nabisco pays a promotional allowance to a supermarket for setting up and maintaining a large, end-of-aisle display for a 2-week period is an example of allowance
Nabisco pays a promotional allowance to a supermarket for setting up and maintaining a large, end-of-aisle display for a 2-week period is an example of _______
b. word-of-mouth communication
Personal, informal exchanges of communication that customers share with one another about products, brands, and companies are best described as _______. a. personal selling b. word-of-mouth communication c. proxemic communication d. sales promotion e. kinesic communication
c. multichannel distribution
The use of a variety of marketing channels to ensure maximum distribution is best called _______. a. supply chain alliances b. logistics c. multichannel distribution d. digital distribution e. channel integration
c. be the low-cost seller of the product
To compete effectively on a price basis, a firm should _______. a. have the highest quality b. have the highest market share c. be the low-cost seller of the product d. be the high-cost seller of the product e. have the lowest market share
•Various channel stages may be combined, either horizontally or vertically, under the management of a channel captain
Various channel stages may be combined, either horizontally or _________, under the management of a channel _________
•Competitive priorities in marketing channels •Channel integration •Channel leadership, coordination, and conflict
What are 3 strategic issues in marketing?
Size, geographic distribution, and demographic characteristics
What are crucial elements of the target market?
Private and Public
What are the two general categories of warehouses?
e. Producer to consumer
When you buy a new backpack from LLBean.com, which of the following consumer marketing channels are you using? a. Producer to wholesaler to retailer to consumer b. Producer to retailer to consumer c. Producer to agent to wholesaler to retailer to consumer d. Producer to industrial distribution to consumer e. Producer to consumer
c. New introductory promotion
Which of the following is NOT one of the four elements of the promotion mix? a. Public relations b. Sales promotion c. New introductory promotion d. Advertising e. Personal selling
•F.O.B. factory - The price of merchandise at the factory before shipment
_._._. ______ - The price of merchandise at the factory before shipment
Price War
_______ ___ - Involves two or more companies engaging in intense price competition, often in an effort to boost market share
Birdyback
________back (truck and air)
breakeven point = Fixed costs/per-unit contribution to fixed costs
breakeven point = ______ costs/per-unit contribution to _____ costs
Procurement
processes to obtain resources to create value through sourcing, purchasing, and recycling, including materials and information
•Promotion does not create needs, but it does capitalize on them by making consumers aware of needs they already have
•Does promotion create needs?
b. fixed cost
A company's rental of production space is an example of a _______. a. variable cost b. fixed cost c. total cost d. marginal cost e. breakeven point
A global problem affecting business pricing strategies is the growing market for counterfeit goods
A global problem affecting business pricing strategies is the growing market for ______ goods
Chapter 14
Chapter 14
Florida hotels provide companies holding national and regional sales meetings with deeply discounted accommodations during the summer months is an example of seasonal
Florida hotels provide companies holding national and regional sales meetings with deeply discounted accommodations during the summer months is an example of ______
Large department store chains purchase some women's apparel at lower prices than do individually owned specialty stores is an example of quantity
Large department store chains purchase some women's apparel at lower prices than do individually owned specialty stores is an example of _____
b. tactile communication
Leonard is a salesperson for ACME Motors. He always tries to shake hands with potential new customers and to "seal the deal" when they sign a sales contract. In personal selling, handshaking is an example of _______. a. pioneer communication b. tactile communication c. kinesic communication d. sales communication e. proxemic communication
Cash
Numerous companies serving business markets allow a 2 percent discount if an account is paid within 10 days is an example of ____
True Customers are becoming less tolerant of price increases, forcing manufacturers to find new ways to control costs
True or False Customers are becoming less tolerant of price increases
•Intensive •Selective •Exclusive
What are the three levels of market coverage?
1. Creating utility 2. Facilitating exchange efficiencies
What are the two functions of a marketing channel?
Intensive
______ distribution =Advertising, sales promotion
Seasonal discount - A price reduction given to buyers for purchasing goods or services out of season
_______ discount - A price reduction given to buyers for purchasing goods or services out of season (peaches)
Exclusive distribution
_______ distribution Personal selling
Source
_______ is a person, group, or organization with a meaning it tries to share with a receiver or an audience
Intensive
__________ distribution is using all available outlets to distribute a product •Is appropriate for products that: •Have a high replacement rate •Require almost no service •Are bought based on price cues •To satisfy consumers seeking to buy these products, they must be available at a store nearby and be obtained with minimal search time
Logistics
__________ in supply chain management includes •Order processing •Inventory management •Materials handling •Warehousing •Transportation
Logistics
__________ involving physical distribution, relates to planning, implementing, and controlling the efficient flow and storage of products
Selective distribution
_______distribution Promotion mixes vary
Piggyback
______back (truck and rail)
"upstream" and "downstream"
•A distribution system involves firms that are "_______" in the supply chain (e.g., producers and suppliers) and "________" (e.g., wholesalers and retailers) working together to serve customers and generate competitive advantage
Yes Promotion informs customers about product uses, features, advantages, prices, and locations where they can buy the products
•Does promotion help customers without costing too much?
d. internal reference price
A price developed in the buyer's mind through experience with the product is a(n) _______. a. experience price b. trade discount c. breakeven point d. internal reference price e. external reference price
d. a price war
ACME Corp. and Spacely Inc. are engaged in intense price competition in order to boost market share of their widgets. This is best described as _______. a. elasticity of demand b. price discrimination c. bartering d. a price war e. nonprice competition
a. Push policy
ACME Corp. has a promotion strategy that involves promoting its widgets through personal selling and sales promotion to the wholesalers that handle its products. Which channel promotion policy is ACME using? a. Push policy b. Exclusive policy c. Category management d. Tying policy e. Pull policy
a. Cash discount
ACME Corp. offers a price discount to encourage prompt payment. Which of the following is it likely to use? a. Cash discount b. Trade discount c. Allowance d. Quantity discount e. Seasonal discount
a. viral marketing
At ACME Corp., managers are using a strategy of trying to get consumers to share the firm's message via a quirky online YouTube video in a way that spreads dramatically and quickly. This is best described as _______. a. viral marketing b. word-of-mouth communication c. personal selling d. sales promotion e. buzz marketing
Chapter 16
Chapter 16
Chapter 19
Chapter 19
Recycling
Converting waste into reusable material, reprocessing, reclaiming, or reusing supplies and final products
c. Inventory management
Dell Computer and Harley Davidson are well known for their use of the just-in time (JIT) approach. To which of the following physical distribution activities does the JIT approach belong? a. Warehousing b. Order processing c. Inventory management d. Materials handling e. Transportation
No •Marketers assert that values are instilled in the home and that promotion does not change people into materialistic consumers
Does promotion encourage materialism?
Personal Selling
Generally, promotion mixes for business products concentrate on ________ _______, whereas advertising plays a major role in promoting consumer good
Geographic Pricing Prices may be quoted as F.O.B. (free-on-board) factory or dsetination
Geographic Pricing Prices may be quoted as F.O.B. (free-on-board) factory or ________
Time
Having products availible when the consumer wants them is _____ utility
a. time utility
Hulu enables consumers to watch select TV shows whenever they want instead of when they are broadcast. This illustrates _______. a. time utility b. form utility c. place utility d. possession utility e. technological utility
e. horizontal integration ( Petsmart is also successful same level)
If PetSmart began to acquire very successful local pet stores, this would be an example of _______. a. vertical integration b. multichannel integration c. digital integration d. channel power e. horizontal integration
c. personal selling
If a company's promotional budget is extremely limited, the firm is likely to rely on _______. a. kinesic promotion b. public relations c. personal selling d. advertising e. sales promotion
Inelastic
If demand is _______, total revenue changes in the same direction as the change in price
Elastic
If demand is elastic, a change in price causes an opposite change in total revenue
a. lower prices
If promotion is used to successfully stimulate demand, the producer should be able to produce and market products in larger quantities and thus reduce per-unit production research and development, overhead, and marketing costs, which can result in _______. a. lower prices b. materialism c. higher prices d. deceptive advertising e. greater need
Price
In a ________ competition environment, whenever one firm changes its prices, its rivals usually respond quickly and aggressively
Operations Management
Managing activities from production to final delivery through system-wide coordination
Marginal revenue (MR) - The change in total revenue resulting from the sale of an additional unit of a product
Marginal _________ (MR) - The change in total revenue resulting from the sale of an additional unit of a product
c. Value-conscious
Maria is concerned about both price and quality of a product. Marketers would best describe her as which of the following? a. Prestige-sensitive b. Price-obsessed c. Value-conscious d. Utility-sensitive e. Price-conscious
•Marketers should set prices that are consistent with the organization's goals and mission
Marketers should set prices that are consistent with the organization's ______ and _______
Utility
Marketing types create four types of _________
Most firms in the United States face downward-sloping demand curves for their products; in other words, they must lower their prices to sell additional units •This situation means that each additional unit of product sold provides the firm with less revenue than the previous unit sold •MR then becomes less-than-average revenue
Most firms in the United States face _________-sloping demand curves for their products; in other words, they must lower their prices to sell additional units
Logistics management
Planning, implementing, and controlling the efficient and effective flow and storage of products and information from the point of origin to consumption to meet customers' needs and wants
a. revenue
Price is a key element in the marketing mix because it relates directly to the generation of total _______. a. revenue b. price competition c. market share d. profits e. elasticity of demand
Producers commonly provide intermediaries with discounts, or reductions, from list prices •Although many types of discounts exist, they usually fall into one of five categories: •Trade •Quantity •Cash •Seasonal •Allowance
Producers commonly provide intermediaries with _______ , or ________, from list prices
Refusal to deal
Producers having the right to choose or reject the channel members with which they will do business is known as ________ __ ____
e. encourage product trial
Some types of promotion—such as free samples, coupons, test drives, or limited free-use offers, contests, and games—are employed to _______. a. create awareness b. facilitate reseller support c. stimulate demand d. identify prospects e. encourage product trial
b. An increase in total revenue
Spacely Inc.'s sprockets have inelastic demand. If Spacely raises the price of sprockets, what will be the result? a. A decrease in product inventory b. An increase in total revenue c. An increase in market share d. A decrease in market share e. A decrease in total revenue
c. Tying agreements
Suppliers may use _______ to get rid of slow-moving inventory, while a franchiser may use them to maintain quality control and protect the franchiser's reputation a. Restricted sales territories b. Warehousing c. Tying agreements d. Exclusive dealing e. Refusal to deal
e. the customer
Supply chain management should begin with a focus on _______. a. the government regulator b. the marketing channel c. the producer d. the seller e. the customer
d. Deceptive pricing
The Federal Trade Commission (FTC) is investigating ACME Corp. for using misleading price tags at its outlet stores to deceive customers into believing they are getting a bargain on Wile E. branded items. Which of the following does the FTC believe ACME is guilty of? a. Price competition b. Price discrimination c. Nonprice competition d. Deceptive pricing e. Price fixing
Purchasing
The act of negotiating and executing transactions to buy and sell goods, materials
Producer, wholesaler, or retailer
The channel captain may be a ________, ________, or _________
Supply chain management (SCM)
The coordination of all the activities involved with the flow and transformation of supplies, products, and information throughout the supply chain to the ultimate consumer
inelastic
The less elastic the demand, the more beneficial it is for the seller to raise the price Products without readily available substitutes and for which consumers have strong needs usually have _______ demand (Gas)
e. channel capacity
The limit on the volume of information a communications channel can handle effectively is known as _______. a. noise b. receiver c. feedback d. channel logistics e. channel capacity
b. contractual VMS
The most popular type of vertical marketing system is the _______. a. corporate VMS b. contractual VMS c. vertical VMS d. horizontal VMS e. administered VMS
The percentage change in quantity demanded caused by a percentage change in price is much greater for products with elastic demand than for inelastic demand
The percentage change in quantity demanded caused by a percentage change in price is much greater for products with _______ demand than for ________ demand
Sourcing
The process of determining what materials a firm needs, where those materials come from, and how they impact marketing integrity
Restricted Sales Territories
To tighten control over product distribution, a manufacturer may try to prohibit intermediaries from selling outside of designated sales territories is also known as ______ ______ _________
d. retain loyal customers
Toastie's restaurant is developing a frequent-user program that asks customers to input their phone number each time they order and then rewards them with free drinks or chips after they have spent $50 at the restaurant. This best illustrates the promotional objective of _______. a. combat competitive promotional efforts b. identify prospects c. reduce sales fluctuations d. retain loyal customers e. encourage product trial
True
True or False A product's price also influences the composition of the promotion mix
False •Can be verbal and nonverbal •In interpersonal communication, feedback occurs through talking, teaching, smiling, nodding, eye movements, and other body movements and postures
True or False Feedback is only verbal
True
True or False Selecting appropriate marketing channels is important because they are difficult to change once chosen
True
True or False Suppliers may not legally refuse to deal with wholesalers or dealers merely because these wholesalers or dealers resist policies that are anticompetitive or in restraint of trade
False Chronic price wars often benefit consumers in the form of lower prices in the short run, •but the constant price cutting is seldom sustainable, so they can substantially weaken organizations by slashing profit margins for everyone
True or false Chronic price wars often benefit consumers in the form of lower prices in the long run
Types of Pricing objectives should be compatible with the firm's marketing objectives
Types of Pricing objectives should be compatible with the firm's _______ objectives
b. integrated marketing communications
Urban Outfitters is coordinating promotion and other marketing efforts to ensure maximum informational and persuasive impact on customers. This is best described as _______. a. integrated business communications b. integrated marketing communications c. integrated marketing connection d. intelligent promotion communications
•Changes in buyers' needs •Variations in the effectiveness of other marketing-mix variables •The presence of substitutes •Dynamic environment
What are factors that can influence demand?
Advantages: •Is extremely cost-efficient when it reaches a vast number of people at a low cost per person •Lets the source repeat the message several times •Visibility gained from advertising can enhance an organization's image
What are the advantages of advertising?
Advantages: •Involves more specific communication than advertising •Has greater impact on customers •Provides immediate feedback
What are the advantages of personal selling?
•Absolute dollar outlay can be high •Rarely provides rapid feedback •Often difficult to measure its effect on sales •Less persuasive than personal selling •Has a limited time exposure
What are the disadvantage of advertising?
§ Create awareness § Stimulate demand (primary demand, pioneer promotion, selective demand) § Encourage product trial § Identify prospects § Retain loyal customers § Facilitate reseller support § Combat competitive promotional efforts § Reduce sales fluctuations
What are the eight Possible Objectives of Promotion?
o Organizational and Marketing Objectives o Pricing Objectives o Costs o Marketing-Mix Variables o Channel Member Expectations o Customers' Interpretation and Response o Competition o Legal and Regulatory Issues
What are the eight key factors that may influence marketers' pricing decisions?.
•Price fixing •Deceptive pricing •Price discrimination •Predatory pricing
What are the four examples of legal and Regulatory Issues?
•Actual full cost •Standard full cost •Cost plus investment •Market-based cost
What are the four methods to determine price for transfer pricing?
•Advertising •Personal selling •Public relations •Sales promotion
What are the four possible elements of a promotion mix?
Time Utility, Place utility, Possession utility, and form utility
What are the four types of utility?
•Refusal to deal •Restricted sales territories •Tying agreements •Exclusive dealing
What are the legal Issues in Channel Management?
•Two approaches to understanding demand, cost, and profit relationships are: •Marginal analysis •Break-even analysis
What are the two approaches to understanding demand, cost, and profit relationships ?
1. Unit loading- one or more boxes 2. Containerization- consolidation of many items into a single large container that is sealed
What are the two common methods used in materials handling?
•A major advantage of nonprice competition is that a firm can build customer loyalty toward its brand
What is a major advantage of nonprice competition?
Distribution
What is the decisions and activities that make products available to consumers when and where they want to purchase them?
Marketing Channel Once a firm commits to a distribution channel it is difficult to change
What is the least flexible component of the marketing matrix?
Expensive
What is the limitation of personal selling?
Long Channel
What is the most efficient distribution channel for some consumer goods? (Not short)
Supply Chain
What is the term for all the organisations and activities involved with the flow and transformation of products from raw materials through the end consumer?
e. has channel power
When a producer, wholesaler, or retailer has the ability to influence another channel member's goal achievement, it _______. a. is horizontally integrated b. is multichannel distribution c. is a channel captain d. is vertically integrated e. has channel power
a. advertising; sales promotion
When a product's target market consists of millions of customers, organizations tend to rely on _______ and _______. a. advertising; sales promotion b. advertising; public relations c. public relations; sales promotion d. personal selling; public relations e. advertising; personal selling
When making price decisions, a producer must consider what members of the distribution channel expect, such as discounts for large orders, prompt payment, and support activities such as sales training and sales promotion
When making price decisions, a producer must consider what __________ of the distribution channel _________, such as discounts for large orders, prompt payment, and support activities such as sales training and sales promotion
d. Producer to customer
Which of the following business marketing channels is most likely to be used? a. Producer to industrial distributor to customer b. Producer to industrial distributor to retailer to customer c. Producer to agent to industrial distributor to customer d. Producer to customer e. Producer to manufacturer's agent to customer
c. Uniform geographic pricing
Which of the following charges the same price to all customers regardless of geographic location, and the price is based on average shipping costs for all customers? a. Zone pricing b. Base-point pricing c. Uniform geographic pricing d. Freight absorption pricing e. F.O.B. destination pricing
c. Product placement
Which of the following has become important due to the increasing fragmentation of television viewers who have ever-expanding viewing options and technology that can screen advertisements? a. Public relations b. Advertising c. Product placement d. Personal selling e. Sales promotion (Coca cola cups and apple watches)
b. Third-party logistics firms
Which of the following have special expertise in core physical distribution activities such as warehousing, transportation, inventory management, and information technology and can often perform these activities more efficiently? a. Corporate VMS b. Third-party logistics firms c. Freight forwarders d. Channel captains e. Megacarriers
e. Supply chain management
Which of the following integrates the functions of operations management, logistics management, procurement, and marketing channel management so that products are produced and distributed in the right quantities, to the right locations, and at the right times?
a. Procurement
Which of the following involves the processes to obtain resources to create value through sourcing, purchasing, and recycling including materials and information? a. Procurement b. Supply chain management c. Channel management d. Operations management e. Logistics management
b. Promotion lowers prices
Which of the following is NOT one of the criticisms of promotion cited in your text? a. Promotion increases prices b. Promotion lowers prices c. Promotion fosters materialism d. Promotion creates needs e. Promotion is deceptive
e. Elasticity of demand
Which of the following is NOT one of the factors that influence the assessment of value? a. Time constraints b. Price levels c. Perceived quality d. Motivations to use available information about prices e. Elasticity of demand
a. Building customer loyalty toward the brand
Which of the following is a major advantage of nonprice competition? a. Building customer loyalty toward the brand b. Exceeding the breakeven point c. Building market share d. Fostering a value-conscious mindset e. Fostering a price-conscious mindset
e. New introductory promotion
Which of the following is appropriate for stimulating primary demand? a. Viral marketing b. Reinforcement promotion c. Personal selling d. Comparative promotion e. New introductory promotion
e. Average variable cost
Which of the following is calculated by dividing the variable costs by the number of units produced? a. Breakeven point b. Marginal cost c. Average fixed cost d. Average total cost e. Average variable cost
b. Restricted sales territories (Walmart and Lowes)
Which of the following is often favored by intermediaries? a. Full-line forcing b. Restricted sales territories c. Exclusive dealing d. Refusal to deal e. Tying agreements
a. Breakeven point
Which of the following is the point at which the costs of producing a product equals the revenue made from selling the product? a. Breakeven point b. Fixed cost c. Marginal cost d. Demand curve e. Marginal revenue
c. Selective distribution
Which of the following levels of market coverage is desirable when a special effort, such as customer service from a channel member, is important to customers? a. Intensive distribution b. Digital distribution c. Selective distribution d. Exclusive distribution
a. Intensive distribution
Which of the following levels of market coverage is most appropriate for products that have a high replacement rate, require almost no service, and are bought based on price cues? a. Intensive distribution b. Selective distribution c. Exclusive distribution d. Digital distribution e. Physical distribution
e. Quantity discounts
Which of the following pass on to a business customer the cost savings gained through economies of scale? a. Allowances b. Trade discounts c. Cash discounts d. Seasonal discounts e. Quantity discounts
c. Warehousing
Which of the following provides time utility by enabling firms to compensate for dissimilar production and consumption rates? a. Transportation b. Inventory management c. Warehousing d. Order processing e. Materials handling
e. Demand curve
Which of the following shows the quantity of products a firm expects to sell at various prices if other factors remain constant? a. Breakeven point b. Marginal analysis c. Reference price d. Demand line e. Demand curve
a. When a source uses an emoji that are understood by the receive
Which of the following types is NOT an example of noise in the communication channel? a. When a source uses an emoji that are understood by the receiver b. When broadcast television is interrupted due to breaking news c. When the Wi-Fi signal is slow and thus the internet connection is poor d. When the source has laryngitis e. When a source uses words or an emoji that are unfamiliar to the receiver
a. Public relations
Which of the following uses tools such as annual reports, brochures, event sponsorship, and sponsorship of socially responsible programs? a. Public relations b. Advertising c. Personal selling d. Sales promotion e. Proxemic communication
c. new-to-market products; expensive products
Word-of-mouth communication is most effective for _______ and _______. a. new-to-market products; inexpensive products b. new-to-market products; convenience products c. new-to-market products; expensive products d. declining products; expensive products e. long-time products; expensive products
New Introductory Promotion - Promotion that informs consumers about a new product
___ _______ ________ - Promotion that informs consumers about a new product
Pull
___ policy - Promoting a product directly to consumers to develop strong consumer demand that pulls products through the marketing channel
Trade (functional) discount - A reduction off the list price a producer gives to an intermediary for performing certain functions
____ (functional) discount - A reduction off the list price a producer gives to an intermediary for performing certain functions
Cash discount - A price reduction given to buyers for prompt payment or cash payment •Example: "2/10 net 30" means that a 2 percent discount will be allowed if the account is paid within 10 days. If the buyer does not make payment within the 10-day period, the entire balance is due within 30 days without a discount
____ discount - A price reduction given to buyers for prompt payment or cash payment •Example: "2/10 net 30" means that a 2 percent discount will be allowed if the account is paid within 10 days. If the buyer does not make payment within the 10-day period, the entire balance is due within 30 days without a discount
Buzz marketing - An attempt to incite publicity and public excitement surrounding a product through a creative event
____ marketing - An attempt to incite publicity and public excitement surrounding a product through a creative event
Cost plus investment: Calculated as full cost plus the cost of a portion of the selling unit's assets used for internal needs
____ plus __________: Calculated as full cost plus the cost of a portion of the selling unit's assets used for internal needs
Push
____ policy - Promoting a product only to the next institution down the marketing channel
Word-of-mouth communication - Personal informal exchanges of communication that customers share about products, brands, and companies
____-__-_____ communication - Personal informal exchanges of communication that customers share about products, brands, and companies
Price discrimination - Employing price differentials that injure competition by giving one or more buyers a competitive advantage
_____ _________ - Employing price differentials that injure competition by giving one or more buyers a competitive advantage
Fixed costs - Costs that do not vary with changes in the number of units produced or sold
_____ costs - Costs that do not vary with changes in the number of units produced or sold
•Noise - Anything that reduces a communication's clarity and accuracy
_____ is anything that reduces a communication's clarity and accuracy
Price
_____ is the value paid for a product in a marketing exchange •Price does not always take the form of money paid
Just-in-time (JIT) - An inventory-management approach in which supplies arrive just when needed for production or resale •Usually there is no safety stock •Requires a high level of coordination between producers and suppliers •Eliminates waste •Reduces inventory costs
_____-__-____ (JIT) - An inventory-management approach in which supplies arrive just when needed for production or resale •Usually there is no safety stock •Requires a high level of coordination between producers and suppliers •Eliminates waste •Reduces inventory costs
Price competition
______ Competition-Emphasizing price as an issue and matching or beating competitors' prices
Price elasticity of demand
______ _______ __ _______= % change in quantity demanded / % change in price
Personal selling is a paid personal communication that seeks to inform customers and persuade them to purchase products in an exchange situation
______ _______ is a paid personal communication that seeks to inform customers and persuade them to purchase products in an exchange situation
Product Placement
______ _______- The strategic location of products or product promotions within entertainment media content to reach the product's target market
Prestige sensitivity - Drawn to products that signify prominence and status
______ ________ - Drawn to products that signify prominence and status
Radio frequency identification (RFID) - Using radio waves to identify and track materials tagged with special microchips
______ _________ _________ (RFID) - Using radio waves to identify and track materials tagged with special microchips
•Proxemic communication - Communicating by varying the physical distance in face-to-face interactions
______ communication - Communicating by varying the physical distance in face-to-face interactions
Tactile communication - Communication through touching
______ communication - Communication through touching
Price consciousness - Striving to pay low prices
______ consciousness - Striving to pay low prices
•Marginal cost (MC) - The extra cost incurred by producing one more unit of a product
______ cost (MC) - The extra cost incurred by producing one more unit of a product
Primary demand - Demand for a product category
______ demand is the demand for a product category
Selective demand - Demand for a specific brand
______ demand is the demand for a specific brand
Price fixing - An agreement among competing firms to raise, lower, or maintain prices for mutual benefit
______ fixing - An agreement among competing firms to raise, lower, or maintain prices for mutual benefit
Barter
______ is the trading of products ▶Is the oldest form of exchange ▶Is preferred among business, because of the relatively large values of the exchanges, usually involves trade credit
Market-based cost: Calculated at the market price less a small discount to reflect the lack of sales effort and other expenses
______-based cost: Calculated at the market price less a small discount to reflect the lack of sales effort and other expenses
Profit •Almost anything of value—ideas, services, rights, and goods—can be assessed by a price •In our society, financial price is the measurement of value commonly used in exchanges •Price is a key element in the marketing mix because it relates directly to the generation of total revenue
______= (price × quantity sold) - total costs
•Promotion mix - A combination of promotional methods used to promote a specific product
_______ ___ is a combination of promotional methods used to promote a specific product
Average total cost - The sum of the average fixed cost and the average variable cost
_______ ______ cost - The sum of the average fixed cost and the average variable cost
Predatory pricing - Also called undercutting, involves the intent to set a product's price so low that rival firms cannot compete and therefore withdraw from the marketplace
_______ _______ - Also called undercutting, involves the intent to set a product's price so low that rival firms cannot compete and therefore withdraw from the marketplace
Reorder point
_______ _______ = (Order lead time X Usage rate) + Safety stock
Average Variable
_______ _______ cost - The variable cost per unit produced
•External reference price - A comparison price provided by others
_______ _______ price - A comparison price provided by others
Internal reference price - A price developed in the buyer's mind through experience with the product
_______ _______ price - A price developed in the buyer's mind through experience with the product
Channel capacity - The limit on the volume of information a communication channel can handle effectively
_______ ________ - The limit on the volume of information a communication channel can handle effectively
•Critics
_______ accuse wholesalers of being inefficient and adding to costs While eliminating wholesalers may lower prices for customers, it would not eliminate the need for the services the wholesalers provide Other channel members would have to perform those functions, perhaps not as efficiently, and customers still would have to pay for them
Promotional allowance - A price reduction granted to dealers for participating in advertising and sales support programs intended to increase sales of a particular item
_______ allowance - A price reduction granted to dealers for participating in advertising and sales support programs intended to increase sales of a particular item (folgers coffee)
Actual full cost: Calculated by dividing all fixed and variable expenses for a period into the number of units produced
_______ full cost: Calculated by dividing all fixed and variable expenses for a period into the number of units produced
Transfer pricing - Prices charged in sales between an organization's units
_______ pricing - Prices charged in sales between an organization's units
Coding
_______ process (encoding) - Converting meaning into a series of signs or symbols
Decoding
_______ process - Converting signs and symbols into concepts and ideas
Allowance - A concession in price to achieve a desired goal
________ - A concession in price to achieve a desired goal
Strategic channel
________ _______ alliance is an agreement whereby the products of one organization are distributed through the marketing channels of another
o Marketing channel
________ _________ decisions can have a strong influence •on the other elements of the marketing mix.
Communication
________ a sharing of meaning through the transmission of information
Marginal
________ analysis examines what happens to a firm's costs and revenues when production (or sales volume) changes by a single unit
Distribution center is a large, centralized warehouses that focus on moving rather than storing goods
________ center is a large, centralized warehouses that focus on moving rather than storing goods
Communications channel - The medium of transmission that carries coded message from the source to the receiver
________ channel - The medium of transmission that carries coded message from the source to the receiver
Kinesic communication - Communicating through the movement of head, eyes, arms, hands, legs, or torso
________ communication - Communicating through the movement of head, eyes, arms, hands, legs, or torso
Nonprice
________ competition - Emphasizing factors other than price to distinguish a product from competing brands
Value consciousness - Concerned about price and quality of a product
________ consciousness - Concerned about price and quality of a product
Total cost - The sum of average fixed and average variable costs times the quantity produced
________ cost - The sum of average fixed and average variable costs times the quantity produced
Variable costs - Costs that vary directly with changes in the number of units produced or sold
________ costs - Costs that vary directly with changes in the number of units produced or sold
Demand curve (D1) - A graph of the quantity of products expected to be sold at various prices if other factors remain constant
________ curve (D1) - A graph of the quantity of products expected to be sold at various prices if other factors remain constant •DemAs prices fall, quantity demanded usually rises •and depends on other factors in the marketing mix, including product quality, promotion, and distribution •An improvement in any of these factors may cause a shift to demand curve D2 In such a case, an increased quantity (Q2) will be sold at the same price (P)
Quantity discounts - Deductions from the list price for purchasing in large quantities
________ discounts - Deductions from the list price for purchasing in large quantities
Cumulative discounts - Quantity discounts aggregated over a stated time period ▶Example: Purchases totaling $10,000 in a 3-month period might entitle the buyer to a 5 percent rebate
________ discounts - Quantity discounts aggregated over a stated time period ▶Example: Purchases totaling $10,000 in a 3-month period might entitle the buyer to a 5 percent rebate
Digital
________ distribution - Delivering content through the Internet to a computer or other device
Standard full cost: Calculated based on what it would cost to produce the goods at full plant capacity
________ full cost: Calculated based on what it would cost to produce the goods at full plant capacity
Materials
________ handling is the Physical handling of tangible goods, supplies, and resources
•Geographic pricing - Reductions for transportation and other costs related to the physical distance between buyer and seller
________ pricing - Reductions for transportation and other costs related to the physical distance between buyer and seller
Deceptive pricing - The use of false or misleading statements or practices to persuade buyers that a product is a better deal than it really is
________ pricing - The use of false or misleading statements or practices to persuade buyers that a product is a better deal than it really is
Prestige
________ products tend to sell better at higher prices than at lower ones, partly because their expense makes buyers feel elite •For a certain price range—from P1 to P2—the quantity demanded (Q1) goes up to Q2 •After a certain point, however, raising the price from P2 to P3 backfires, and quantity demanded goes back down from Q2 to Q1
Cycle Time
________ time - The time needed to complete a process •Firms should look for ways to reduce cycle time while maintaining or reducing costs and maintaining or improving customer service •
Promotion
________- Communication to build and maintain relationships by informing and persuading one or more audiences
Feedback
_________ - The receiver's response to a decoded message
Tying Agreement
_________ ________ is an agreement in which a supplier furnishes a product to a channel member with the stipulation that the channel member must purchase other products as well
Integrated marketing communications is the Coordination of promotion and other marketing efforts for maximum informational and persuasive impact on customers. •Enable synchronization of promotion elements and can improve the efficiency and effectiveness of promotion budgets
_________ _________ ________ is the Coordination of promotion and other marketing efforts for maximum informational and persuasive impact on customers. •enable synchronization of promotion elements and can improve the efficiency and effectiveness of promotion budgets.
Vertical channel integration - Combining two or more stages of the marketing channel under one management
_________ channel integration Combining two or more stages of the marketing channel under one management
Multichannel distribution
_________ distribution - The use of a variety of marketing channels to ensure maximum distribution
Exclusive distribution
_________ distribution - Using a single outlet in a fairly large geographic area to distribute a product •Is suitable for products: •Purchased infrequently •Consumed over a long period of time •That require a high level of customer service or information •Is used for expensive, high-quality products with high profit margins •Is not appropriate for convenience products and many shopping products •Is often used as an incentive to sellers when only a limited market is available for products
Selective distribution
_________ distribution uses only some available outlets in an area to distribute a product •Is appropriate for shopping products •Is desirable when a special effort, such as customer service from a channel member, is important to customers •Is often used to motivate retailers to provide adequate service
Average fixed cost - The fixed cost per unit produced
_________ fixed cost - The fixed cost per unit produced
Procurement
_________ is sometimes called supply management
Warehousing is the design and operation of facilities for storing and moving goods
_________ is the design and operation of facilities for storing and moving goods
Inventory management - Developing and maintaining adequate assortments of products to meet customers' needs •Stockouts - Shortage of products •Maintaining too many products in inventory increases risks of product obsolescence, pilferage, and damage •Reorder point - The inventory level that signals the need to place a new order •To calculate the reorder point, the marketer must know the following: •Order lead time - The average time lapse between placing the order and receiving it •Usage rate - The rate at which a product's inventory is used or sold during a specific time period •Safety stock - The amount of extra inventory a firm keeps to guard against stockouts resulting from above-average usage rates and/or longer-than-expected lead times
_________ management - Developing and maintaining adequate assortments of products to meet customers' needs •__________- Shortage of products •Maintaining too many products in inventory increases risks of product obsolescence, pilferage, and damage •___________ - The inventory level that signals the need to place a new order •To calculate the reorder point, the marketer must know the following: •______ ______ ______ - The average time lapse between placing the order and receiving it •______ rate - The rate at which a product's inventory is used or sold during a specific time period •_______ stock - The amount of extra inventory a firm keeps to guard against stockouts resulting from above-average usage rates and/or longer-than-expected lead times
Outsourcing
_________ the contracting of physical distribution tasks to third parties
Intermodal transportation
_________ transportation is when two or more transportation modes are used in combination
Audience - Two or more receivers
_________- Two or more receivers
Third-party logistics (3PL) - Firms have special expertise in core physical distribution activities such as warehousing, transportation, inventory management, and information technology and can often perform these activities more efficiently
_________-_________ logistics firms have special expertise in core physical distribution activities such as warehousing, transportation, inventory management, and information technology and can often perform these activities more efficiently •
Manufacturers agent
__________ agent is an independent businessperson who sells complementary products of several producers in assigned territories and is compensated through commissions
Intermediaries
__________ are specialists in facilitating exchanges. They provide valuable assistance because of their access to and control over important resources used in the proper functioning of marketing channels
Exclusive dealing is a situation in which a manufacturer forbids an intermediary from carrying products of competing manufacturers
__________ dealing situation in which a manufacturer forbids an intermediary from carrying products of competing manufacturers
Noncumulative discounts - One-time price reductions based on the number of units purchased, the dollar value of the order, or the product mix purchased
__________ discounts - One-time price reductions based on the number of units purchased, the dollar value of the order, or the product mix purchased
Horizontal channel integration - Combining organisations at the same level of operation under one management
___________ channel integration - Combining organizations at the same level of operation under one management
Industrial
___________ distributor is an independent business organisation that takes title to industrial products and carries inventories Usually sells standardised items at a relatively low cost to manufacturers
Receiver
___________ is a person, group, or organization with a meaning it tries to share with a receiver or an audience
Vertical marketing system (VMS) - A marketing channel managed by a single channel member to achieve efficient, low-cost distribution aimed at satisfying target market customers
_________c marketing system (VMS) - A marketing channel managed by a single channel member to achieve efficient, low-cost distribution aimed at satisfying target market customers
Fishyback
_____back (truck and water)
Viral marketing - A strategy to get consumers to share a marketer's message, often through e-mail or online video, in a way that spreads dramatically and quickly
_____marketing - A strategy to get consumers to share a marketer's message, often through e-mail or online video, in a way that spreads dramatically and quickly
interrelated
•All marketing-mix variables are highly ______ •Pricing decisions can influence evaluations and activities associated with product, distribution, and promotion variables
Psychological, symbolically
•Because price has a ___________ influence on customers, marketers can use it ____________ •By pricing high, they can emphasize the quality of a product and try to increase the prestige associated with its ownership By lowering a price, marketers can emphasize a bargain
No it lowers prices If promotion is working to stimulate demand, producing and marketing products in larger quantities can actually help reduce prices •Promotion also helps keeps prices lower by facilitating price competition
•Does promotion increase prices?
Breakeven point= = 3,000 units
•Example: If a product priced at $100 per unit has an average variable cost of $60 per unit, the contribution to fixed costs is $40. If total fixed costs are $120,000, the breakeven point in units is determined as follows: breakeven point = fixed costs / per-unit contribution to fixed costs = fixed costs/ price-variable costs = $120,000/ $40
F.O.B. destination - A price indicating the producer is absorbing shipping costs
•F.O.B. ________- A price indicating the producer is absorbing shipping costs
SCM (Supply Chain Management)
•Integrates the functions of operations management, logistics management, supply management, and marketing channel management so that products are produced and distributed in the right quantities, to the right locations, and at the right times •Includes activities such as manufacturing, research, sales, advertising, and shipping •Involves all entities that facilitate product distribution and benefit from cooperative efforts
•Knowing the number of units necessary to break even is important in setting the price
•Knowing the number of units necessary to break even is important in setting the ____
Marketing intermediaries
•Marketing _________ can reduce the costs of exchanges by performing certain services or functions efficiently
•Other geographic pricing strategies include: •Uniform geographic pricing •Zone pricing •Base-point pricing •Freight absorption buying -
•Other geographic pricing strategies include:
third party
•Physical distribution activities may be performed by a producer, wholesaler, or retailer, or they may be outsourced to a _________ ________
•Quantity discounts can be either: •Cumulative discounts or noncumulative discounts
•Quantity discounts can be either: •Cumulative discounts or ________ discounts
As long as the product is legal it can be promoted Some critics of promotion, including consumer groups and government officials, suggest that certain products should not be promoted at all •Defenders argue that, as long as it is legal to sell a product, promoting that product should be allowed
•Should potentially harmful products be promoted?
customer
•Supply chain management should begin with a focus on the ________, who is the ultimate consumer and whose satisfaction should be the goal of all the efforts of channel members
•The firm should produce at the point where MR equals MC, because this is the most profitable level of production
•The firm should produce at the point where MR equals __, because this is the most profitable level of production
Understanding the relationship between demand, cost, and profit is imperative
•Understanding the relationship between demand, ____ , and profit is imperative for a business
•When making pricing decisions, marketers should address a vital question: How will our customers interpret our prices and respond to them?
•When making pricing decisions, marketers should address a vital question:
Trade-in allowances - Price reductions granted for turning in a used item when purchasing a new one
•____-__ allowances - Price reductions granted for turning in a used item when purchasing a new one
Price elastcity of demand
•_______ _______ __ ________- A measure of the sensitivity of demand to changes in price •Is formally defined as the percentage change in quantity demanded relative to a given percentage change in price
