Unit 4 exam, quiz
q. In order to justify direct-response marketing, a product really needs to be priced above
$20
*selection of a basis for pricing* stages for developing price
*COST BASED:* - Cost-plus Pricing • adding a specified dollar amount to the seller's costs. - Markup (more common) • adding to the cost of the product a predetermined percentage of that cost: • markup / cost • markup / price EX) Product costs $50, retailer prices it at $100 • What is % markup based on cost? o Take product cost ($50) and subtract it from retailer price ($100) = *$50 markup* o Then divide that markup ($50) by the cost ($50) = 100% markup based on *cost* o markup / Cost • What is % markup based on price? o Divide markup ($50) by the retailer price ($100) = 50% markup based on *retailer price* o markup / retailer price cost - price = markup *DEMAND BASED:* - customers pay a higher price when demand is strong and a lower price when demand is weak video summary: UBER: • Surge pricing problems • Customers were surprised & angry by the upcharge/ surge charge during holidays *COMPETITION BASED* - pricing influenced primarily by competitors' prices. - when: • competing products are homogeneous • price is a key consideration to market. *Non-Price Factors Affecting Demand*: - Market • Degree of competition • Competitor action/reaction • General economic conditions - Product • Quality • Range • Nature- essential/luxury • Substitutes - Support • Service at point of sale and after • Advertising/promotion • Distribution Methods *Price and Non-Price Factors* - Conjoint Analysis • Market research technique where consumers make tradeoffs between features and benefits and price • Video EX: o Most often used= Choice-Based conjoint (CBC) *Innovative Pricing: Pay What you Want* - Letting customers pay what they want at Hotels in France - People do care about others more than we think - you'd be surprised at what people pay
*selecting a pricing strategy* stages for developing price
*Differential Pricing Techniques* - Charging different prices to different buyers • Secondary-market o One price for primary target market and different price for another • Negotiated o Final price established through buyer/seller bargaining • Periodic and Random discounting *New Product Pricing* - Price skimming • Charging highest possible price to recover investment - Penetration pricing • Set prices below competition to gain share early *Product Line Pricing* - Captive pricing • Price for the main product is relatively low, but the necessary accessories are prices high. • EX: Ink for printer - Premium pricing • Highest quality product or one with most desirable features is priced high, and models with fewer features are priced lower to appeal to budget buyers. • Even though they may cost the same to manufacture - Price lining • Price choices are grouped into categories and prices are assigned to each category • Used by retailer to simplify user decisions - Bait pricing • Price an item low, hoping customer will buy a higher priced product - Bait and switch is illegal when firm • Does not intend to sell "bait" • Discourages purchase of bait • Employee compensation discourages selling "bait" • Refuses to take orders or deliver in a reasonable time • Fails to specify limited availability or time *Psychological Pricing* - Bundle Pricing • Buying a meal instead of separate items at a fast food joint. • Think they are paying a lower cost even if they aren't - Multiple unit pricing • Buying 4 batteries instead of one. - Prestige Pricing • Rolex watch • Pricing the product at a higher price because a lower one can decrease value - EDLP vs. High/Low Pricing • HEB has an Everyday low-price technique (EDLP) • Kroger has a high/low pricing technique. o They have higher prices but mark them lower on a daily basis. - Odd/Even Pricing • Refers to the ending number of the product • $100 vs. $99.99 - Video Example • WSJ • JCP CEO misused odd/even pricing • He wants to change prices from $9.99 to $10 • He says its bringing dignity to it but he's wrong *Professional and Promotional Pricing* - Promotional Pricing • Price/loss leaders (used by grocery stores and bakers) • Special event pricing • Comparison discounting - Professional pricing (used by doctors and lawyers; set fee)
typical marketing channels for business products
*E* - direct channel for business products - producer -> organizational buyers - expensive/business products EX) Xerox products (business buyers. long term benefits, maintenance, tech support, data analytics) *F* - producer -> industrial distributor -> organizational buyers - *industrial distributor*- an independent business org that takes title to industrial products & carries inventories. - most effective with products w/ a broad market appeal adv: lowers financial burdens, aware of local needs, close with costumers. dis: difficult to manage (independent), NOT likely to handle: bulks, slow-sell, special inventory. *G* - producer -> manufacturers' agent -> organizational buyers - *manufacturer's agent*- an independent businessperson sells complementary products of several producers in assigned territories, paid by commission - does NOT acquire title to the products or possession. adv: have stablished set of costumers, seasonal demand, economic alt dis: difficult to manage, they pref to concentrate on large account, don't follow up with costumers/repair complaints fast, rarely maintain inventories. *H* - producer -> industrial distributor -> manufacturers' agent -> organizational buyers - good for large areas with seasonal demand or economic alt OR - to enter new geo market w/out expanding its sales force
factors that influence the ethical decision making process:
*INDIVIDUAL FACTORS* -what people learn growing up, based on socialization. companies do not change people's ethics, but rather hire people who they agree with their ethic. ex: pride/pressure *situational* factors ex: rush/failing/stress *OPPOURTUNITY* -conditions that limit barriers or provide awards. opportunity to engage in unethical conduct is often a better predictor of unethical activities. codes of conduct influence opportunity by prescribing what behaviors are acceptable. larger reward = milder punishment = greater likelihood unethical behavior occurs. most refrain from taking advantage of opportunity. ex: barriers *ORGANIZATIONAL RELATIONSHIPS* -ethical choices are made jointly, based on what they learned while working with others. *org culture*- set of values, beliefs, goals, norms, and rituals that members of an org share. may be expressed through code of conduct, manuals, dress codes, ceremonies, habits, stories, etc. ex: pressure
wholesaling: kinds
*MERCHANT WHOLESALERS* (aka: wholesaler, jobber, distributor, assembler, exporter, importer) -independently owned businesses that tile to good, assume risks with ownership, and generally buy/resell products to other W, R, business C. 2 categories: FULL SERVICE -perform widest range of wholesaling functions *general merchandise* -wide product mix, limited depth within product lines. ex: drugs, cosmetics, detergents *limited line* -carry only few lines but depth within those lines. ex: groceries, fixtures, equipment *specialty* -narrowest range of product lines, with few items within product line. *jack robber- full service W that own and maintain display racks in markets. LIMITED SERVICE -provide fewer marketing services and specialize in just few functions. take title to merchandise but do not deliver merchandise. lower rates/smaller profit important in distribution of perishable items, construction materials, coal. [pic] *cash and carry* -I who are C, often small business, pay cash and furnish transportation. limited line with high turnover rate. *truck* -transport limited line of products directly to C for on the sport inspection and selection. *drop shippers* -take title products and negotiate sales but never take actual possession of products. they forward orders and assume responsibility. *mail order* -use catalogs to sell products to retail and business buyers. allows for convenience.
key tasks in supply chain management
*OPERATIONS MANAGEMENT* -total set of managerial activities used by an org to transform resource inputs into products/services. *AKA partnerships to meet costumer needs* *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 the costumer's needs/wants. *sourcing of resources/goods from suppliers* *SUPPLY MANAGEMENT* -refers to the processes that enable the progress of vape from raw material to final costumer and back to redesign and final disposition. *moving the product through the mktg channel to the end user* *CHANNEL MANAGEMENT* -*activities related to selling/service/development of long-term costumer relationships*
factors that affect pricing decisions:
*ORG AND MKTG OBJECTIVES* *PRICING OBJ TYPES* *COSTS* *MARKETING MIX VARIABLES* *CHANNEL MEMBER EXPECTATIONS* *COSTUMER INTERPRETATION AND RESPONSE* *internal reference price*- developed in the buyer's mind through experience *external reference price*- a comparison price provided by others *value-concious*- concerned about price and quality of a product *price-conscious*- striving to pay low prices *prestige sensitive*-drawn to products that signify status *COMPETITION* *LEGAL/REGULATORY ISSUES* price fixing deceptive pricing price discrimination predatory pricing
social responsibility issues
*SUSTAINABILITY* -the potential for the long-term well being of the natural environment, including all biological entities, as well as the interaction among nature and individuals, organizations, and business strategies. consumers not only inviting in a good quality of life, but also healthful environment so they can maintain a high standard of living during their lifetimes. *concerns:* conservation/pollution *goals:* eliminate the concept of waste reinvent the concept of a product make prices reflect the cost ----------------------------------------------------- *CONSUMERISM* -activities undertaken by independent individuals, groups, and organizations to protect their rights as consumers. *consumer "bill of rights" by Kennedy:* right to be heard/informed/to choose/safety FTC provides relevant information on this. consumer.ftc.gov -----------------------------------------------------*COMMUNITY RELATIONS* -society eager to have marketers contribute to its well being, wishing to know what marketers do to help solve social problems. avoiding actions that can harm community. concerns: equality/diversity/welfare
multiple marketing channels and alliances
*THE LINE BETWEEN CHANNELS IN BEING BLURRED* manufacturers may use more than one channel simultaneously with each channel involving a different group of intermediates. when? -when the same product is directed to both consumers and businesses. -to reach the same target market. - EX) Heinz marketed for household use through supermarkets/grocery stores VS ketchup being sold to restaurants or institutions *dual distribution* - 2 or more marketing channels to distribute the same product to the same target market. *strategic channel alliance* -the products of one organization are distributed through the marketing channels of another. - the products of the two firms are often similar but are not direct competitors. video summary: farmer's insurance: the acquisition of independent agencies led to a dual distribution system. founded with exclusive agency distribution. (Foremost & Bistel West) company is based on how costumers are approached, different ways = different agencies. *multichannel distribution* - use of variety of marketing channels to ensure maximum distribution - reach same group of target customers via various channels - ** to reach target customers wherever & whenever they may choose - EX) L.L. Bean; markets through its catalog, website, & its own retail stores - EX) Clinique; direct through website or department stores - EX) can purchase Dell computer direct from Dell, or from Best Buy. *digital distribution* -delivering content through technology. (Netflix, Spotify, Office365, Expedia)
4 utilities of marketing channels:
*TIME* UTILITY -having the product available when needed to be (when; Netflix) *PLACE* UTILITY -having the product delivered or just available for pick up (where; Zappos- shop wherever you want w/ internet) *POSSESION* UTILITY -costumer has access to the product to use now or later - access now vs later (how; lease/rental agreement) *FORM* UTILITY -assembling, preparing, refining a product to suit costumer needs. - gives added benefit to consumers - in what combination: what benefits/accessories. (how; changing products to suit individual customer needs)
*channel integration*- strategic issues in marketing channels
*VERTICAL*: - combines 2+ stages of the marketing channel under one management. - find it less costly to sell directly to consumers than through retailers and is efficient in production - more progressive approach to distribution ex: HEB & tomato farms *vertical marketing systems (vms)* - single channel member coordinates or manages channel activities to achieve low-cost distribution aimed at satisfying target market customers. ~ corporate VMS - combines all stages of the mktg channel from producers to consumers under a single owner. - high speed/low price ~ administered VMS - channel members are indep, but informal coordination achieves high level of inter organizational mgmt - one member dominates ~ contractual VMS - members are linked by legal agreements that state rights/obligations. - most common EX) HEB integrates backwards to the Farmer, and it allows HEB to advertise with the local Farmers to show that they have fresh, locally grown produce. video summary: 2 kinds of V: forward: company owns another to get closer to the consumer. backward: manuf owns business that supplies inputs to the business' manuf process. (mc Donald's owns French fry co to make sure they have fries supply) -------------------------------------------------- *HORIZONTAL* - combines organizations at the same level of operation under one management. - creates economies of scale, won't reduce costs or improve competitive position ex: dr pep + snapple OR 1 grocery chain buying out another not the best method for improving distribution
improving ethical conduct in marketing
*codes of conduct* (codes of ethics) -formalized rules and standards that describe the organization's employee expectations Global Supply Code of Conduct. do not have to be way too detailed. [pic] *ethics officers* -are usually responsible for creating and distributing the code of conduct, enforcing the code and meeting with organizational members to discuss or provide advice about ethical issues *implementing ethical/legal compliance programs* - is important that companies enforce standards and impose penalties on those who violate codes of conduct - the company must take steps in response to violations of standards and revise the compliance program to diminish future opportunities for misconduct - codifying ethical standards and implementing compliance programs and codes of conduct that incorporate both legal and ethical concerns is the best approach to preventing violations
price and non price factors
*conjoint analysis* -market research technique where consumers make tradeoffs between features and benefits and price. video summary: JCP has sales but tries even prices. confused consumers = no costumers. CEO was confused about pricing techniques.
social responsibility and ethics improve marketing performance
*ethics* - individual and group decisions on what is right/wrong in a situation (one dimension of social responsibility) *social responsibility* - the total effect of marketing decisions on society both lead to overall strategic marketing planning. (evidence shows there are long-term financial benefits to being ethical and socially responsible) *rule of thumb to resolve issues:* if an issue can withstand open discussion that results in agreement or limited debate, then an acceptable solution may exist. many of society's demands impose costs. balance the costs of providing low-priced products against the costs of manufacturing, packaging, and distributing their products in an environmentally responsible manner. remember: trying to satisfy one group may lead to dissatisfying another.
ethics vs laws
*ethics* -principles and standards that define acceptable conduct in marketing as determined by various stakeholders. *laws* -social norm ethics made into laws so that they are punished if the behavior standard is broken.
intensity of market coverage
*intensive* distribution - high replacement rate, no service, bought on price cues. - uses all available outlets for distribution; minimal search time - want low price & convenient near them - convenience products - EX) gum, bread, sodas, newspapers, laundry detergent available: in *many* outlets *selective* distribution - comparable products, moderate service - will go to a few diff retailers/ websites to compare prices, designs etc. - shopping products (durable goods) - EX) televisions or computers available: in *some* outlets *exclusive* distribution - very low replacement rate, high service, high quality/price - specialty products - EX) Porche, BMW, Tourneau, Rolex available: in *few* outlets - a producer selling this will spend much time on training personnel. - some products are introduced as exclusive, but once competitors jump on board, the product decrease sin value
marketing channel activities performed by intermediaries
*marketing information* -> analyze sales data and other information in databases and information systems. perform or commission marketing research. *marketing management* -> establish strategic & tactical plans for developing customer relationships & organizational productivity. *facilitating exchanges* -> choose product assortments that match the needs of customers. Cooperate with channel members to develop partnerships *promotion* -> Set promotional objectives. Coordinate advertising, personal selling, sales promotion, publicity, and packaging. *Price* -> Establish pricing policies and terms of sales *physical distribution* -> Manage transportation, warehousing, materials handling, inventory control, and communication
realtions to stakeholders
*prioritize stakeholders* broad stakeholder view of the form can help improve marketing practices. encouraging employees to understand their markets leads to helping them understand stakeholder demands. marketers need to analyze stake holder relationships to maximize value for specific target markets.
in an efficient SCM
*upstream* firms -> direct or indirect input to make product *downstream* firms -> delivery of product & after-market services Amazon has set gold standard for supply chain management
Importance of price to marketers
- affects demand - affects profits Profit = Total Revenue - Total Costs Revenue = Price x Quantity Sold - phycological dimension - has important legal implications
ethical issue
- an identifiable problem, situation, or opportunity requiring a choice among several actions that must be evaluated as right or wrong, ethical or unethical. ethical issues can become a problem in all elements of the marketing mix. marketers must be able to recognize problems and solve them.
social responsibility
- an organization's obligation to maximize its positive impact and minimize its negative impact on society. (deals with the TOTAL effect of all Greater consumer trust and loyalty Positive publicity Indirect long-term benefits if company ignores the responsibility demands of costumers, the law will regulate if needed. socially responsible efforts have a positive impact on local communities and indirectly help the sponsoring org by attracting goodwill, publicity, and potential supporters/employees.
*determination of a specific price* stages for developing price
- can use combination of techniques - advantage: flexibility with changing prices
*evaluation of competitors' prices* stages for developing price
- regular function of marketing research - customer's view of pricing and marketing mix variables - pricing above competition creates an exclusive image - pricing below competition gains market share
sales branches
-M owned Is that sell products and provide support services to the M's sales force. offer credit. deliver goods. give promo assistance. costumers are: R, business buyers, W. located away from M location buy where demand is high.
sales office
-M owned operations that provide services normally associated with agents. located away from M but have no inventory. may sell products that enhance M's own product line.
retailing: store image strategies
-a functional and psychological picture int he C's mind used to attract them. environment + quality. *atmospherics* -physical elements in a store's design that appeals to consumer's emotions and encourage being to help create an image and position that retailer. interior: aesthetics, pictures, music, color, lighting, cleanliness, layout exterior: storefront, display windows, entrances, traffic, color *color: red- impulsivness/hunger green- claiming/wellness yellow- good sound and scent content of digital ads
demand curve
-a graph of the quantity of products expected to be sold at various prices if other factors remain constant. if price decrease, demand increases. (demand depends on other factors too) improvements in any of these factors causes a shift in curve. x is quantity (Q) y is price (P) *price elasticity of demand*- provides a measure of the sensitivity of demand changes in price. defined as the % change in quantity demanded relative to a given percentage change in price. much larger for products with elastic demand than inelastic demand. for a product like electricity, demand is relatively *INELASTIC*: as P1 increases to P2, D goes down only a *little* from Q1 to Q2. a change in P causes an *inverse* change in R. for a product like vehicles, demand is relatively *ELASTIC*: as P1 quickly increases to P2, D goes down *sharply* from Q1 to Q2. a change in P causes the *direct* change in R. [pic] equation: price elasticity of demand = % change in Q demand/% change in P. note: marketers cannot base prices solely on elasticity considerations, they must examine profits and the costs associated with diff sales volumes.
retailing:
-all transactions where the buyer is the ultimate consumer and purchases for personal, family, or household purposes. can be international. ex: department stores, convenience stores, supermarkets, etc *multichannel retailing* -employing multiple distribution channels that complement their stores with websites/catalogs/apps where consumers can research their products. *retailer* -an org that purchases products for the purpose of selling them to C. vital to the US economy. are the link between M and C. add value to the costumers' perceptions by enhancing experience. to do so, personnel are trained. key to success: innovation, service, and quality.
franchising:
-an arrangement in which a supplier (franchisor) grants a dealer (franchisee) the right to sell products in exchange for some type of consideration. f-or provides equipment f-ee provides service/labor f-or may receive % of total sales f-ee abides by regulations (can be modified but not made too diff, varies) a: enables f-ee to start a business with limited capital and benefit from business experience of others. lower failure rate. assured of sales because costumers know what to expect. f-or gains fast products distribution without incurring the high cost of constructing/operating their own outlets (more capita for ads) d: f-or can dictate much f-ee pays to the name of the f-or fees and % sales agreements are not uniform
direct marketing:
-communicating via media with end consumers who can then purchase products through that media. 8% of US GDP ex: catalogs, direct response, telemarketing, tv home shopping, online retailing,
inventory management
-developing and maintaining adequate assortment of products. - the Goal is to minimize stockouts, while simultaneously minimizing storage costs. has a major impact on physical distribution costs and the level of costumer services provided. *stockouts*- shortages of products *reorder point*- inventory level *order lead time*- time between placing the order and receiving it *usage rate*- the rate at which inventory is used/sold reorder point = (order lead time X usage rate) *safety stock*- the extra inventory a firm keeps *sku*- stock keeping unit - helps forecast demand - keeps track of inventory; ID code for every item - allows for specific targeting (EX: spec coupons printed @ checkout) *just-in-time* (JIT); lean distribution -an inventory management approach in which supplies arrive when needed for production or resale - high level of coordination from suppliers & producers - Toyota was pioneer of JIT Bluebell ex) use channel power; they don't like SKU due to them changing up flavors often and if they had 1 skew for each they wouldn't be able to choose what to put in the store when. - 2 sku; brown or gold label - truck/ delivery driver decides right then & there what to restock each stores shelves with & if they want to pull things off the shelf that aren't selling well there
non-price competition
-emphasizing factors other than price to distinguish a product from competing brands. involves: service, quality, features, packaging, promotion. competition allows a company to increase its brand unit sales though means other than changing the brand's price. effective only certain conditions.
price competition
-emphasizing price as an issue and matching/beating competitor's prices. gives marketers flexibility by altering prices in response to changes in their cost or demand of the product. (remember: competitors have flexible pricing too which can lead to a price war) *price war*- 2+ companies engaging in intense promise competition, often in a effort to boost market share. *showrooming*- practice where costumers come into the stores, find what they want to purchase, then go home and buy it online at a lower price. *to prevent this, companies do price matching.
marginal analysis
-examines what happens to a firms costs and revenues when production changes by a single unit. to determine the costs of production, its necessary to distinguish the several types of costs: *fixed costs*- do not vary with changes in the number of units produced or sold. *average fixed costs*- is the fixed costs per unit produced and is calculated by: fixed costs/# of units produced *variable costs*-vary directly with changes in the number of units produced or sold *average variable costs*- the variable cost per unit produced, calculated by: variable costs/# of units produced *total cost*- (average fixed costs + average variable costs) x quantity produced. *average total cost*- average fixed costs + average variable costs *marginal cost (MC)*- the extra cost a firm incurs when it produces one more unit of a product. *marginal revenue (MR)*- the change in total revenue that occurs when a firm sells an additional unit of product. profit is the highest: MC = MR *or* MC - MR = 0 if R(demand) and C(supply) remained constant, prices would be set for max profit. [pic]
costumer relationship management (CRM)
-exploit the information in SC partners' information systems to make it easier/available for reference. helps sustain favorable costumer relationships. helps match inventory needs.
supply-chain management (SCM)
-integrating the functions of operations, logistics, supply, and marketing channel management so that products are produced and distributed in the right quantities, at the right locations and right time. management is integrated in SCM(key tasks card) used to achieve optimal levels of efficiency and service & includes all entities that facilitate product distribution and benefit from cooperative efforts. each member needs information from other members. SCM leads to improve costumer satisfaction while increasing coordination, reducing costs, and increasing profits. technology has improved SCM capabilities globally.
retailing: positioning strategies
-involves identifying an unserved or underserved market segment and reaching it though a strategy that distinguishes the retailer from others in the minds of costumers in the market segment.
retailing: category mgmt strategies
-managing groups of similar products produced by different M. first developed in food industry. requires analyzing sales and sharing that data with M and R. supermarkets use this to allocate space for their many product categories.
virtual guest speaker: BRICK IS THE NEW BLACK
-many think digital mktg is taking over but it is not. - actual stores ARE not dead. very much alive - NEW boss is the *consumer* *Jenna EX* - Needs a new sweater in 2 days - Retail store is out of stock - Order off smart phone and uses coupon for free 2-day delivery - Most profitable way to fulfill order is from manufacturer to Jenna o Despite research is done on mobile devices, the store is still the place where most retailers make money today o Successful retailers are the ones that combine their physical operations with e-commerce operations o Issue is retailers keep these two sectors separate *Ikea* = actual stores are doing good- not dead Thriving Expanding to 500 stores *President of Levi's - James Carleigh* - Thinks of Consumers as fans - Types of fans • Fans that love Levi's and have never left • Fan that still loves Levi, but left/ challenge is to bring them back • Fan that doesn't know who Levi's is, but once introduced loves them forever - Focus on the Core AND do more • Denim is core business • More opportunity to fill closet with other Levi's products - Having Icons and continuing to innovate • Patent on 501 jeans was innovative • Icons don't remain icons unless they continue to innovate • New 501 custom tapered jeans (Innovation with Icons) - Must be Accessible and Aspirational • Starbucks is widely accessible and is aspirational about experience • Levi's does collaboration with other partners creating aspiration - Do the expected and unexpected • Quality of jeans is expected • Levi's Stadium in California, Home of 49ers is unexpected • Have retail stores in there *Former CEO of Walmart Bill Simon* - The idea of the catalog has expanded - Customer expectations have changed - Secret of retail is to use technology to send products with great customer services - Take care of customer with merchandise and service * Panel with CEO's led by CNBC Reporter* - James Ray joins, CEO of company that helps retailers, Lippincott • Retailers offers sensory experience you cannot get at home • It's important to think - Levi's guy • Focus on retail seller training to make experience great for customers *Walmart former CEO* - Must figure out different service platforms customers have and how to serve them - See's personalization as a serving a mentality and respecting customer - Does not think Walmart has too many stores - If you have what the customer wants, that's enough to get the customer to come Question from audience - How do you get old school retailers to use technology? *James* o They don't have a choice o If you don't invest in it, then you're in trouble *Walmart former CEO* o Can always do more to incorporate technology *Levi's guy* o They handpicked e-commerce experts to have talented people to keep improving technological use - *Levi jeans/ 501s*, oldest fashion trend still around. red tag. signified youth rebellion, coming together, unity, peace - 3 levi fans; true fan who still wears, fan that left, and the another who hasn't heard of them before/ worn them before - try to get them back - Focus on the core AND do more (apple does this) - expanding business to reach more people (making other than denim jeans) - innovate with time and products matters
marketing intermediaries
-middlemen (channel members) that link producers to other intermediaries or ultimate consumers through contractual arrangement or through the purchase and reselling of products. plays key roles in CRM and information systems. reduce costs of exchanges. (shortens complexity of route but longer channel) examples: *wholesalers* -buy/resell products to other wholesalers, retailers, and industrial costumers. *retailers* -purchase products and resell them to end costumers
brokers and agents
-negotiate purchases and expedite sales but do not take title to products. aka: functional middlemen -perform limited number of services in exchange for commission. long-term relationships with costumers. provide valuable sales expertise. [pic] AGENTS: -represent either buyers or sellers on permanent basis. *manufacturer's agents* (more than half of all agent W) -independent I that represent 2+ sellers and usually offer complete product lines. year-round. handles non-competing and complementary products. little/no control over pricing/policies. (used in apparel, furniture, steel, auto, food) *selling agents* -I that market a whole product line or a M's entire output. perform all W activities expect taking title. (used in small M that have difficulty maintaining a mktg department) no territorial limits. have authority over price/promotion/distribution. key roles in ads, research, policies, packaging. *commission merchants* aka: factor merchants -receive goods on consignment from local sellers and negotiate sales in large central markets. power on prices and term of sales. (used in ag mktg) extend credit but no promo support. BROKERS: -are I that buyers/sellers employ temporarily. bring sellers and buys together. not involved in financing or physical possession. cannot set prices assume no risk offer specialized knowledge. (useful in supermarket goods and real estate)
direct marketing: non-store retailing
-selling of products outside the confines of a retail facility. 5 kinds: *online marketing* -makes products available to buyers through internet connections. rapidly growing. satisfies an increasing expectation among consumers to have multiple channels available to obtain goods and services they desire at their convenience. C can perform a wide variety of shopping-related tasks online. *catalog marketing* -an org provides a catalog from which costumers make selections and place orders through phone, mail, or internet. some sell products over multiple product lines while others are more specialized. a: effeminacy and convenience d: limites and inflexible *direct response marketing* -a retailer advertises a product and makes it available through mail, phone, or online orders. ex: TV shows product and gives # to call when it airs *telemarketing* -performance of marketing-related activities by telephone. some org use a prescreened list of clients and call them to generate sales. FCC rules that companies cannot call costumers using prerecorded marketing calls just because they've done business in the past AND require to have an opt-out option. charities, politics, and surveys are not restricted by the national registry. *TV home shopping* -presents products to TV viewers, encouraging them to order though toll #. demonstration of product is held until calls peak and decline and then they move on to the next product. ex: QVC (popular with older consumers)
retailing: technology strategies
-tech makes the experience more convenient and enhances satisfaction. *beacons* -send real time messages and offers to costumers with BT smartphones. *webrooming* -shoppers research products online and then head to the nearest store to make the purchase
direct marketing: direct selling
-the marketing of products to ultimate consumers through face-face sales presentations. was once associated with door-door selling. identify costumers with mail, phones, internet. may be carried out through parties or one-one. based on comm. moste expensive form of retailing. ex: cutco
materials handling
-the physical handling of tangible goods, supplies and resources. *radio frequency id* (RFID) -radio waves are used to track materials using scanners. improved shipment tracking, inventory management, and reduced cycle times because hundreds of RFIDs can be read at a time. used in manufacturing, retailing, and in between RFID: tags->readers->local software->enterprise integration video summary: IBM: shoplifter is actually being charged for his items because they are picked up and scanned by RFID. packaging: product characteristics determine handling. therefore, internal packaging is important in materials handling. many companies employ *packaging consultants* who are experts in determining care. shipping may be temperature controlled. *unit loading* -one or more boxes are placed in a pallet/skid. *containerization* -consolidation of many items into a single large container that is sealed at its point of origin and opened at its destination.
order processing
-the receipt of transition of sales order information. it facilitates product flow. technology increase productivity. 3 tasks: *order entry* -when costumers/salespeople place orders. *order handing* -order is transmitted to a warehouse to verify availability (if not, costumer is made aware and asked to be given an alt), orders assembled by machines/people. *order delivery* -warehouse schedules a delivery with an appropriate carrier once the order is packaged accordingly. small volume orders: manual processing large volume orders: (or just most use this) *electronic data interchange*- uses tech to integrate order processing with production, inventory, accounting, and transport. links the channel members with outsourcing firms to boost accuracy.
direct marketing: automatic vending
-the use of machines to dispense products very small minority of all retail sales. bough out of convenience placed in heavy foot-traffic areas. high cost in repairs and equipment. can now convey status reports via the internet to see which products are selling and which are not.
price
-the value paid for a product in a marketing exchange. is physiological. (in ch1, price was defined subjective) affects profits and sales. does not always take the form of money. *barter*- the trading of products - oldest form of trade trading among businesses involves trade credit because values are large. many techniques/factors are used together to determine one price. interest in price is based on buyer's expectation, usefulness of product, and satisfaction. ideas, services, rights, and goods are assessed by price. in our society, financial price is the measurement of value commonly used in exchanges. easily manipulated/can change based on demand, competition, and environment later. *sometimes the price variable my be inflexible *equation:* profit = total revenue - total costs profit = (price x quantity sold) - costs
wholesaling:
-transactions where products are purchased for resale, making other products, or general business operations. *wholesaler* -individual/org that sells products that are bought for resale, or making other products, or general business operations. wide range of products. know technology and digital marketing/comm
marketing citizenship
-what socially responsible org strive for by adopting a strategic focus for fulfilling the economic, legal, ethical, and philanthropic social responsibilities that their stakeholders expect from them. 4 LEVELS ON PYRAMID: ----------------------------------------------------- *ECONOMIC* (basic) -to be profitable so that they can provide living wages, employment, and contribute goods. *especially significant for employees who care about equal pay, diversity, safety, and health. *stakeholder orientation* -companies that consider the diverse perspectives of stakeholders in their daily operations and strategic planning ----------------------------------------------------- *LEGAL* (basic) -fair competition and costumer relationships. government regulatory agencies often define the activates that constitute fair competition. may lead to new drafts of legislation. ----------------------------------------------------- *ETHICS* - principles and standards that define acceptable conduct in marketing as determined by various stakeholders. most basic ethics = standard = law ethics foster trust (trust is key to costumer relationships) ----------------------------------------------------- *PHILLANTHROPIC* -not required, promote human welfare or goodwill, as do ecumenic, legal, and ethical dimensions of social responsibility. forms: *cause-related* -the practice of linking products to a particular social cause on an ongoing or short-term basis ex: DAWN soap: short term. $1 of purchasing soap -> help clean animals. video summary: TOMS: long term. went from donating shoes to donating eyeglasses. not about expanding products, but expanding philanthropy. *strategic philanthropy* -the synergistic use of organizational core competencies and resources to address key stakeholders' interests and achieve both organizational and social benefits (giving $ and time) ex: Home Depot + Habitat for Humanity. matches products with philanthropy. involves both financial and non-fincanical contributions to the stakeholders.
retailing: kinds of retail stores
2 general categories: GM and specialty. ------------------------------------------------------- GM: *department store* -large org offering a wide product mix and organized into separate departments ex: Macys *discount store* -self-service, offers brand-name and private-brand products at low prices face most competition ex: target (extreme value stores- offer very low prices due to discount store growing. ex: $ tree) *convenience store* -self-service, small, store offering narrow product assortment in convenient locations. ex: 7-eleven *supermarket* -self-service, offering complete line or food products and some non-food products ex: Kroger *superstore* -giant, offering all food products and non-food products found in supermarkets, as well as routinely purchases products. ex: superTarget *hypermarket* -combination of supermarket and discount store *warehouse Club* -large scale, member-only, combining cash and carry wholesaling with discount retailing. ex: Sam's Club *warehouse showroom* -facility in a large, low-cost building with large on-premises inventories and minimal service ex: IKEA ------------------------------------------------------- specialty: *traditional* (aka: limited-line retailers/single-line retailers if they carry an unusual depth in one product category) -stores that carry a narrow product mix with deep product lines and capitalize off fashion trends, service, location, and atmosphere. ex: sunglasses hut *category killer* -arge specialty store that concentrates on a major product category and compensates on the basis of low prices and broad product availability. ex: PetCo, Best Buy, ToysRUs, B&N they take business way from traditional specialty retailers by competing with price. *off price retailers* -stores that buy M's seconds for resale to C at deep discounts. offer limited national-brand and designer merchandise. changer 20-50% less than department stores (competitors). no refunds/exchanges long-term relationships with suppliers. during M off season, may offer cash for goods to be produced. tension may build with M.
Q In a simple economy of five producers and five consumers, there would be ____ transactions possible without an intermediary and ____ transactions possible with one intermediary.
25; 10
Q. Logistics Plus is an organization that consolidates shipments from several industrial firms into more efficient lot sizes so that they can be more efficiently transported. What type of transportation company is Logistics Plus?
A freight forwarder
Q. What is a primary difference between an industrial distributor and a manufacturers' agent?
A manufacturers' agent does not acquire title nor usually take possession of the products whereas an industrial distributor does.
Mattel Recall
After recalling unsafe products and losing millions in profits in 2007, Mattel rebounded Improved ethics and social responsibility initiatives Has been named to numerous "most ethical" lists Consumer demand and trust returned personally apologized to china manufacturers- wasn't a manufacturer mistake it was a mistake on their end after recalling unsafe products and losing millions in profits in 2007, mattel rebounded. apologized publicly to china for the paint and lead. explained how to fix issue/prevent it. improved ethics and social responsibility initiatives. has been named to numerous "most ethical" lists. consumer demand and trust returned. video summary: APOLOGY : it was Mattel's fault, not Chinese manufacturers. didn't mean to hurt china's image. (keeps good relation with manufacturer) RECENTLY: blue bell isn't on good terms with manufacturer after recall.
Q. If a microchip in a computer at the Pentagon failed, which method of transportation would be most appropriate to use to replace the chip immediately if one could get the new chip only from New York City?
Airway
Q. When Gabriella logs on to Dell's website, she sees a notebook model priced well below $1,000. As she continues through the site to view the other options, she realizes the first one she saw was the cheapest model available, but she of course wants more features. Dell is utilizing
Bait pricing
Q A retail strategy of managing groups of similar, often substitutable products produced by different manufacturers is called
Category management
Q. Chandra has extensive contacts in the real estate business and brings together buyers and sellers. Although she assumes no risks, she can offer specialized knowledge about real estate.
Chandra is a broker
Q. A single leader who controls and organizes a marketing channel is called a
Channel captain
Q Sharese wants to buy a new couch, but there is only one place in her town that sells them, and she lives in an isolated area. Sharese most likely feels her consumer right to ____ has been violated
Choose
Q. ________________ promote ethical behavior by reducing opportunities for unethical behavior; employees know what is expected of them and what kind of punishment follows if rules are violated.
Codes of Conduct
Q. Target's Take Charge of Education program donates 1% of a customer's total purchase to the school of his or her choice. What social responsibility issue does this program address?
Community relations
ethical issue
Definition: An identifiable problem, situation, or opportunity requiring a choice among several actions that must be evaluated as right or wrong, ethical or unethical Ethical issues can become a problem in all elements of the marketing mix Marketers must be able to recognize problems and solve them
Q After selecting a pricing strategy, what is the next step in the establishment of prices?
Determining a specific price
Q Which of the following wholesalers never take actual possession of the goods?
Drop Shippers
Q Suppose that Jackson Distributing has been told that it cannot carry the beers made by Anheuser-Busch because it also carries the products of the competitor, Miller Brewing. Jackson is then told that it must drop the Miller brands in order to carry the Anheuser-Busch products. If this were true, Anheuser-Busch would be engaging in which of the following channel management practices?
Exclusive dealing
Q. Which of the following characteristics is unique to pricing more so than other variables of the marketing mix?
Flexibility
q. One way in which marketers can demonstrate social responsibility is through programs in sustainability. Which of the following is not included as a goal of sustainability?
Focusing primarily on the external environment of the company
Q. Which of the following is not one of the four objectives that environmentalists believe companies should implement in order to sustain the natural environment?
Force consumers to recycle products.
Q. According to the text, which of the following is not one of the factors that influence the ethical decision-making processes in a marketing organization?
Global environment
Q. Which of the following is not a common feature of a warehouse club?
Good customer service
Q. What is the primary distinction between superstores and hypermarkets?
Hypermarkets are larger and have more types of products than superstores.
Q. Aaron attends a seminar on just-in-time inventory management. Excited about the idea, he returns to his office at Atlanta Auto Supply to start designing such an inventory system. Which of the following steps must Aaron take as he institutes this change?
Increase order frequency
THOUGHT QUESTIONS
Individual Factors What are the top personal factors that would cause someone to make a bad decision • Alcohol, peer pressure, stress/personal situation • Mob mentality, pride, greed Situational What are the top situational factors that would cause someone to make a bad decision? • Being rushed, see no other way, stress, didn't know it was bad
Q Redbox, ProActiv, and Clinique all sell their products through automatic vending, which
Is a type of nonstore retailing
*channel leadership, cooperation, and conflict* - strategic issues in marketing channels
LEADERSHIP: *channel captain* (channel leader) -the dominant leader of a marketing channel or a supply chain - decides things; Power - may be a producer, wholesaler, or retailer. Manufacturer: increases sales volume w/ assistance, costumer satisfaction, and training Retailer: control brands and replace products Wholesaler: form voluntary chains with retailer, help with retail layout/acct/inventory, and market their own brands. *channel power* -the ability of one channel member to influence other channel members' goal achievements --------------------------------------------------- COOPERATION: enables retailers, wholesalers, suppliers and logistics providers to: - speed up inventory replenishment. - improve customer service. - cut the costs of bringing products to customers. - beneficial when working together retailer: expect wholesalers to maintain inventory/deliver on time. wholesaler: expect retailers to honor payments/keep them informed ------------------------------------------------------ CONFLICT: arise due to: - self-interest of members. - poor communication. - increased use of *multiple channels.* intermediates overemphasize competing products/diversify into product lines when usually handled by other intermediates.
Q. Architectural design is an important aspect for a
Lifestyle shopping center
Q Alex is preparing the new strategic plan for a large retailer. Several aspects of the retailer are to be evaluated, in order to make plans and set goals. Of all the issues that Alex can select in developing the new strategic plan, which of the following is the least flexible?
Location
non-price factors affecting demand
MARKET degree of competition competitor action/reaction general economic conditions PRODUCT quality range nature- essential/luxury substitutes SUPPORT service at point of sale and after advertising/promotion distribution methods
Equations/math
Markup- a retailer purchases a can of soup for 60 cents and sells it for 99 cents. As the percentage of the cost = 99-60/60 = 65% (Difference/cost of item bought) As the percentage of selling price = 99-60/99 = 39.4% (Difference/cost of item selling) Reorder point= (order lead time X usage rate) + safety stock. Profit = total revenue - total costs. Revenue = price X quantity sold.
Eliminating middle man?
NOT ALWAYS GOOD. doesn't necessarily always cut costs even if eliminated you still need the service they provide
Q. Priya knows that her company has a formal code of conduct, but she does not see this code being equally and consistently applied to all employees. Priya believes that this sporadic enforcement of the formal code only enhances the ____ for committing unethical acts.
Opportunity
ethical issues in marketing
PIC misleading product claims *product recall* -when companies ask costumers to return products found to be defective/harmful. *greenwashing* -when products are promoted as being more environmentally friendly than they really are. (however, there is no formal criteria on what makes it environmentally friendly) *bribery* -when an incentive is offered in exchange for an illicit advantage. (usually in personal selling) *price gouging* -taking advantage of costumes who must purchase the medicine to survive or maintain quality of life. *bait and switch* -pricing schemes attempt to gain costumer interest with low-priced product, but then switch the buyer to a more expensive one or to an add-on service. *channel stuffing* -shipping surplus inventory to W and R at an excessive rate. done to conceal declining demand for a product or inflate financial earnings, which misleads investors. *counterfetting* -imitations of the real thing. may be harmful to the costumers. *Product ex* - failing to disclose risks associated with a product - failing to disclose information about a products function, value, or size - Feeling to disclose information about changes and the nature, quality, or size of product *distribution ex* - Failing to live up to the rights and responsibilities associated with the specific intermediary roles - Manipulating product availability - Using coercion to force other intermediaries to behave in a certain way *promotion ex* - False or misleading advertising - Using manipulative or deceptive sales promotions, tactics, and publicity - Offering or excepting brides and personal selling situations *pricing ex* - Price fixing - predatory pricing - Failing to disclose a full price of purchase
pricing for business markets
PRICE DISCOUNTING: -reductions of price *trade (functional) discounts*- reduction off the list price as a % a producer gives to an I for performing certain functions. *quantity discounts*-deductions from the list price for purchasing in large quantities: *cumulative- discounts aggregated over time period. *non-cumulative-one time price deductions. *cash discounts*-a price deduction given to guyers for prompt payment or cash payment *seasonal discounts*-a price reduction given to buyers for purchasing goods or services out of season. *allowances*-a concession price to achieve a desired goal. --------------------------------------------------- GEOGRAPHIC PRICING: -involves reaction for transport costs or other costs associated with the physical distance between buyer and seller. *FOB (free-on-board) factory price*- indicated the price of the merchandise at the factory before it is loaded onto the carrier, and thus excludes transportation costs. *FOB (free-on-board) destination price*- the producer absorbs the costs of shipping the merchandise to the costumer. *uniform geo pricing*- charging all costumers the same price, regardless of geo location (postage-stamp pricing) (paper products/office equipment) *zone pricing*-sets uniform prices for each several major geo zone. as the transportation costs across zones increase, so do the prices. *base-point pricing*-geo pricing policy that includes the price t the factory, plus freight shares fro the base point nearest to buyer. (not used) *freight absorption pricing*-absorption of all or part of the actual freight costs (used to improve market penetration and retain a position in competitive market) --------------------------------------------------- TRANSFER PRICING -when one unit in an org sells a product ti another unit. methods to determine the price of that unit: *actual full cost*- diving all fixed variable expenses for a period into the # of units produced. *standard full cost*- calculated based on what it would cost to produce the goods at a full plant capacity. *cost plus investment*- calculated as full cost plus, the cost of a portion of the selling unit's assets used for internal needs. *market based cost*-calculated at the market price less a small discount to reflect the lack of sales effort and other expenses.
Q. The Transportation Division of the GE Corporation is located in a small city that has limited economic growth at this time. Due to the condition of the local school system, GE contributed $2 million to repair and revive it, stating that GE believed in education for the community. This action would imply that GE is in which level of the pyramid of social responsibility?
Philanthropic
Which of the following is the most commonly used channel for distributing business products?
Producer, organizational buyers
Q With respect to inventory, wholesalers can help retailers with all of the following except
Production
Q What type of pricing strategy is used in a situation where the seller has an ethical responsibility not to overcharge the client and the fees do not relate directly to the time and/or effort spent in specific cases?
Professional pricing
Q. Greenwashing is what type of marketing ethics issue?
Promotion-related
legal issues in channel management
Public is best served by protecting competition and free trade. Under Sherman Antitrust Act & Federal Trade Commission Act-> courts & regulatory agencies determine under what circumstances channel management practices violate this principle. *restricted sales territories* - manufactures may prohibit I from selling outside of designated areas. provides I with exclusive areas to minimize competition. - Courts rules: this is a restraint of trade among I with same brands. however, can promote competition among dealers with different brands *exclusive dealing* - when a manufactures forbids a I from carrying products of competing manufactures. will cut off Is who violate. protects their market. *tying agreements* - 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. - full line forcing- supplier requires that channel members purchase the entire line to obtain their products. this ensures I accept new products and a range is available to consumer. *refusal to deal* -channel members can choose who to work with and when to get rid of them. however, suppliers cannot refuse to deal with W or dealers just because they resist policies that are anticompetitive or in restraint of trade.
Q. When Amazon.com introduced its Kindle Fire HD, it was available through Amazon.com, Staples office supplies stores, and a few other retailers. The Kindle Fire HD was most likely distributed through the __
Selective level of distribution
Q. Which of the following statements about social responsibility is correct?
Social responsibility refers to a company's obligation to maximize its positive impact and minimize its negative impact on society.
Q. Any constituent who has a claim in some aspect of a company's products, operations, markets, industry, or outcomes is known as a(n)
Stakeholder
Q Which type of retail outlet can have up to 200,000 square feet?
Superstores
q. Which of the following is not a dimension of social responsibility and marketing citizenship?
Technological
Q. _________________ permits products to be easily demonstrated and allows for sufficient time to make viewers well informed about the products.
Television home shopping
Q Which of the following would be an example of an organization fulfilling its ethical responsibilities?
The Container Store values its employees and gives them higher compensation.
Q. Which of the following is true about the target market's evaluation of price?
The importance of price depends on the type of product.
Q The effect that coworkers have on the ethical decision-making process depends on a person's exposure to ethical and unethical behavior. Which of the following statements about ethical decision making is true?
The more a person is exposed to unethical activity in the organization, the more likely he or she will behave unethically.
warehousing
Together with transportation they make up more than 60% of distribution costs. - the design and operation of facilities for moving and storing goods. may be temperature controlled. (amazon doing same day delivery in some areas) provides time utility by enabling firms to compensate for dissimilar production and consumption rates. companies warehouse the surplus until costumers are ready to buy it. helps stabilize prices and availability of seasonal products. 2 categories: *PRIVATE* WAREHOUSING -for shipping/storing their own products. (appropriate for firms that require special handling and want to control design and operation of warehouse) fixed costs *PUBLIC* WAREHOUSING -leasing storage space to companies. may provide services like janitors. (appropriate for firms that have seasonal production or have low storage needs/inventory) variable costs - *field public warehouses*: - established by public warehouses at the owner's inventory location and are issued a receipt. - *bonded storage*: - arrangement where taxable products are not released until the products' owners pay fees. DISTRIBUTION CENTERS -large facilities used for receiving, warehousing, redistributing, products. (for rapid flow of products) usually one story buildings with many transport networks.
transportation
Together with warehousing they make up more than 60% of distribution costs. -the actual movement of product from manufacturer to consumer. product availability and deliveries depend on transport functions. companies may have there own modes of transport or may outsource. ---------------------------------------------------- modes: *RR* -heavy, bulky freight. long distance *trucks* -subject to size and weight restrictions most felt/expensive/most vulnerable criticized for: damage and lost and delays *waterways* -heavy, low-value, nonperishable goods cheapest used for international cargo *air* -high value, low bulk, perishable items fastest/most expensive long distance in short time reduces warehousing/packaging costs and lost/damages *pipelines* -petroleum/chemicals usually belong to the shipper minimize damage connects are subject to 1% shrinkage (from evaporating) = profit loss concern to environmentalists "harms plants/animals" ------------------------------------------------------- coordinating transport: *intermodal transport* -2+ transportation modes used in combination that helps achieve benefits from different methods. piggyback fishyback birdyback *freight forwarders* -orgs that consolidate shipments from several firms into efficient lot sizes. (small loads armor expense to ship than full loads) have insight to determine efficiency of routes/carriers *megacarriers* -freight transport firms that provide several modes of shipment.
Q. ____ adds time and place utility to a product by moving it from where it is made to where it is purchased and used.
Transportation
Q WTA is a manufacturer of very large blades used in energy-reducing wind turbines. What is most likely the most expensive physical distribution function associated with the WTA product?
Transportation of the product
Q. While marketing ethics creates ___________, philanthropic activities create ______________.
Trust; goodwill
Q. A channel that includes both a manufacturers' agent and an industrial distributor is appropriate under which of the following circumstances?
When the marketer wishes to enter a new geographic market but does not wish to expand the existing sales force
social responsibility issues
[pic] video summary: STARBUCKS: make physical difference rather than just a $ donation. better. how many people volunteered = more impact on their peers. - They helped in Houston, but this also encouraged them to go back to their home towns and continue their volunteer work.
selecting marketing channels
[pic] think carefully about the product, the people, the environment, the competitors, and the intermediaries. (will be hard to change later) *costumer characteristics* business: -buy directly from producers in large quantities. costumer: -buy indirectly from producers (by retailers) in limited quantities. if concentrated in small geo= direct channel. if spread in large geo= indirect channel w/ intermediates. *product attributes* expensive or perishable or fragile: -short channels less-expensive and less-perishable or less-fragile: -long channels *type of org* large firms: -deal with vendors or channels small firms: -deal with regional channel members and may NOT have the resources to develop their own sales force. *competition* success or failure encourages the kind of organizational approach. competitive: -low costs for low prices to have an advantage *environmental forces* new environmental conditions: -low cost channel new tech: -modify channel new regulations: -modify channel *characteristics of intermediates* success/failure may add/remove/modify intermediates
Q. When a single channel member manages an integrated marketing channel to achieve low-cost, efficient distribution for satisfying target markets, ____ exists.
a vertical marketing system
Q. According to the text, marketing ethics refers to principles and standards that define
acceptable conduct in marketing
Q. Rob Stevens is the head of a company that produces computer software for production scheduling. The firm is small and presently does not generate enough volume to justify hiring a sales force. The firm is probably using ________ to maintain contact with the firms using its products.
agents
Q If a microchip in a computer at the Pentagon failed, which method of transportation would be most appropriate to use to replace the chip immediately if one could get the new chip only from New York City?
airway
Q Kolder Inc. is using a new just-in-time inventory management system that requires ordering smaller quantities of parts more frequently. The success of its business depends significantly on receiving these parts very quickly, so like many other companies using just-in-time, Kolder Inc. is relying more on the ____ mode of transportation despite its expense
airway
marketing channels
aka: channel of distribution, distribution channel -a group of individuals and organizations that direct the flow of products from producers to customers within the supply chain. manufacturers, wholesalers, retailers, etc. *main role: makes the right products available at the right place at the right time through SCM. * SOME marketing channels are DIRECT MOST are INDIRECT indirect means there are: *marketing intermediaries* customer satisfaction should be driving force behind mktg channel decisions
physical distribution
aka: logistics -activities used to move products from producers to consumers and other end users. activities: order processing inventory mgmt materials handling warehousing transportation *3rdPartyLogistic firms* -have special expertise in core physical distribution activities to perform them more efficiently. can reduce channel cost and boost costumer satisfaction. physical distribution must be sensitive to the issue of *costs trade-offs* -strategic decision to combine resources for the greatest cost effectiveness. *cycle time* -time nemeses to complete a process. ideal combination: low cycle time + reducing costs + increasing costumer service *goals:* right goods right place right price right time right quantity low cycle time right support system Cost of each phys dist fxn as % of total cost: - Customer service/ order entry = 6% - Administration = 3% - Transportation = 45% - Warehousing = 22% - Inventory Carrying = 24%
Corporate Philanthropy
being a good person o Cause-Related Marketing: The practice of linking products to a particular social cause on an ongoing or short-term basis EX: Toms video • Not just giving shoes to people in need but now giving glasses to people in need o Strategic Philanthropy: The synergistic use of organizational core competencies and resources to address key stakeholders' interests and achieve both organizational and social benefits (giving $ and time)
break-even analysis
break even point- where C of producing a product = R made form selling it equation: break-even point = fixed costs/price-variable costs
q. Maintaining or increasing market share
can be achieved even if industry sales are flat or decreasing.
Q. Pricing the basic product in a product line low while pricing related items at a higher level is called
captive pricing.
Q. Michael's, PetSmart, and Staples are all examples of
category killers.
Q Marketing channel members are likely to experience misunderstandings, frustration, and poorly coordinated strategies as a result of
channel conflict caused by inefficient communication between channel members
the significance of marketing channels
channel decisions determine: - a product's market presence - a buyer's accessibility to the product. *least flexible* component of the mktg mix: entail long-term commitments among a variety of firms. most functions are accomplished by independent and joint efforts of channel members. difficult to change/undo marketing channel decisions.
Q The federal government often uses ____ pricing when it grants defense contracts.
cost-plus
Q. All of the following are psychological techniques except
customary pricing
Q. Order handling involves all of the following activities except that the
customer places a purchase order.
Q If General Motors determines that it wants to sell 200,000 Chevrolet Acadias and sets the price at $29,500 because it knows that at that price it will reach that goal, the firm would be using a ____ pricing method
demand-based
Q Nordstrom, Macy's, and JCPenney are all considered
department stores
retailing: *location* strategies
dependent on: position of target market traffic availability of transport products sold location of competitors retailers alone, retailers within retailers/restaurants, pop up retailers 5 kinds of shopping centers: *neighborhood* shopping centers aka: stip malls -consisting of several small convenience/specialty stores. ex: gas stations/little grocery stores/FF *community* shopping centers -1 or 2 department stores, some convenience/specialty stores have coordinated special events to attract shoppers. *regional* shopping centers -the largest department stores, widest product mix, and deepest product lines mainly national chains. *superregional* shopping centers -regional shopping centers that attract people from miles away ex: mall of America *lifestyle* shopping centers -usually open-air and features dining and entertainment. allow causal browsing. *power shopping* shopping centers -combines off price stores with category killers. may be anchored by the popular store.
Q. Netflix sells its movie services using its website while Redbox sells its movie services using vending machines. Each requires the products to be distributed through different channels. Netflix is using ____, while Redbox is using ___ to get the movies to its vending machines.
digital distribution; physical distribution
Q The marketing of products to ultimate consumers through face-to-face sales presentations either at home or the workplace is called
direct selling
Q Sony management decided to use skimming as a pricing strategy for its newest line of high-definition television (HDTV) sets. It should be aware that this strategy does not
discourage competitors from entering the market.
Q The way to deal with ethical issues is proactively
during the strategic planning process.
wholesaling: services
engage in SCM. primary responsibility for physical distribution of products from M to R. may establish info systems to help R manage the SCM from producer to C. provide financial assistance serve as an extension of the producer's sale's force serve as conduits for information within the marketing channel, keeping producers updated and passing M plans to I. help R with layout, inventory, acct, and supply sources. *if removed form SCM, activities are still performed by another member of SC.
Q Dell Computers is a nationally recognized manufacturer of computers for the small business and home markets. If Dell were to order one of its wholesalers not to carry any computer products other than those made by Dell, this arrangement would be called
exclusive dealing
Q. Companies that sell products with high profit margins are more likely to use _______________. Companies selling products whose sales are directly related to product availability will most likely use ______________.
exclusive distribution; intensive distribution
q. Which of the following products will most likely use the shortest distribution channel?
fresh strawberries
q. If a retailer needed help with store design and training sales personnel, it would most likely use the services of a
full-service wholesaler
q. According to the text, which of the following is not one of the factors that influence the ethical decision-making processes in a marketing organization?
global environment
*development of pricing objectives* stages for developing price
goals that describe what a firm wants to achieve through pricing. pricing objectives and actions: - *survival* adjust price levels so the firm can increase sales volume to match organizational expenses - *profit* identify price and cost levels that allow the firm to maximize profit - *return on investment* identify price levels that enable the firm to yield targeted ROI - *market share* adjust price levels so the firm can maintain or increase sales relative to competitors' sales - *cash flow* set prices to increase rapid sales - *status quo* identify price levels that help stabilize demand and sales - *product quality* Set prices to recover research and development expenditures and establish a high-quality image
physiological aspects of price
high price = high in value low price = low in value bargains are emphasized with low budget pricing.
Q. At the annual managers' planning conference, Jackie Conrad asks the other managers to consider her proposal to increase the quantity of inventory to a five-week supply in order to increase the percentage of completely filled customer orders from 85% to 90%. She states that she is willing to trade off the ____ incurred for the positive effect of better customer service.
higher warehousing costs
*assessment of the target market's evaluation of price* stages for developing price
importance of price depends on: - type of product - type of target market - purchase situation value focus - Value is the overall assessment of price and quality together - What you do get for what you pay
Q Three factors that influence the ethical decision-making process in marketing include
individual factors, organizational factors, and opportunity.
Q New store formats and advances in _______________ are making the retail environment highly dynamic and competitive.
information technology
technology
information technology has created almost seamless distribution processes. information sharing has *reduced costs.* increased *speed, flexibility, and cooperation.* technology has *improved service.* - increasing number of innovative goods. - increased involvement of firms in management supply chain. *effective supply-chain management is closely linked to a market orientation.* this allows companies to be responsive to needs
Q A product is a price leader when
it is sold at less than cost in the hope that sales of other products will increase.
Q An open-air shopping center that features upscale specialty, dining, and entertainment stores, usually owned by national chains, is generally called a(n)
lifestyle shopping center
Q Hutton Industries wants to hire an intermediary to help with the distribution of its products. Management needs an intermediary that will represent the company as sellers, but also wants to retain control over pricing and promotion decisions. It should most likely hire a
manufactures' agents
q. Under Armour is establishing a ______ pricing objective to maintain or increase its product's sales in relation to total industry sales.
market share
typical marketing channels for consumer products
marketing channels facilitate exchange efficiencies. exchange = cost one intermediary (retailer, broker, wholesaler, agent) reduces the mess of exchange between producers and buyers. may come with cost for the middle man's work. (still need the role to be filled by someone, so worth the cost) *A* -direct movement of products from producer to costumer. - producer -> consumer EX) haircut @ barber shop *B* - producer -> retailers -> consumer - large retailers EX) Target & Walmart. also *NEW* cars & college textbooks *C* - producer -> wholesalers -> retailers -> consumer - consumer products EX) KitchenAid Mixers *D* - producer -> agents or brokers -> wholesalers -> retailers -> consumer - mass distribution EX) WheatThins - can often be the most efficient distribution channel for some goods - can add value to customers & reduced costs throughout the distribution channel
Q. When considering the best channel to use, all of the following are true with regard to larger firms except they
may be better suited to serve customers in a particular region.
Q Subway sells its food items through company-owned stores and through franchises. Subway uses ____ as a channel strategy.
multichannel distribution
q. Apple makes its computers available through its own stores, its website, and some major retailers. This is an example of
multichannel distribution
Q Marketers at organizations engaged in non-price competition
need competitive price information to make sure that their products are priced at approximately the same level as the prices of competing brands.
Q Marketers at organizations engaged in nonprice competition
need competitive price information to make sure that their products are priced at approximately the same level as the prices of competing brands.
q Maria recently put her house on the market at an asking price of $260,000. She realizes, however, that in order to sell the house, she may have to use
negotiated pricing.
Q. Lucas is planning a distribution strategy for his business. He is considering using direct marketing, direct selling, and automatic vending, which are all examples of ____ retailing.
nonstore
Different terms used to describe price
o Airlines and Taxi Cabs = Fare o Restaurants = Bill o Doctors office and professional office = Fee o Office space or storage space = Rent o Insurance = Premium
Q. Walgreens drug stores prefer to receive refills of prescriptions through a phone-based system where customers can directly key in the information about the drug. By receiving orders in this manner rather than through a paper-based system or by a phone conversation with a pharmacy employee, Walgreens has been able to save time and money on
order entry
q. Peabody Garden Supply is trying to optimize its method of getting products to customers. It has added electronic ordering systems for customers and improved the training process for workers in the warehouse who make the products ready for shipment. The improvements Peabody has made are to its
order processing
Q. A shopping center that contains stores owned by manufacturers who make a special effort not to conflict with traditional retailers is a(n)
outlet shopping center
Q When Zappos, Inc., an online marketer of shoes, accessories, and clothing, contracts out the physical distribution task to third parties such as UPS, this arrangement is called ____. This is due to the fact that UPS does not have managerial authority within the Zappos marketing channel.
outsourcing
q. If a firm decides to contract its physical distribution functions to third parties that have no managerial authority within the marketing channel, it is using
outsourcing
Q If Nabisco wants to quickly gain a large market share with its new line of reduced-fat snack crackers, it should use
penetration pricing
Q. Which of the following would be used in setting the price of a new product if considerable competition is expected?
penetration pricing
q. Actions that promote human health and welfare address the ____ dimension of the pyramid of social responsibility
philanthropic
marketing citizenship affects stakeholders groups
pic
the pyramid of corporate social responsibility
pic
Q. Assuming everything else is equal, the most cost-efficient way for British Petroleum to transport crude oil from remote oil drilling sites in central Alaska to shipping terminals on the Alaskan coast would be
pipelines
Q Reference pricing is
pricing a product at a moderate level and positioning it next to a more expensive model or brand
Q. Steelcase, Inc. markets furniture directly to businesses. This is an example of a(n) ____ channel.
producer-to-business buyer
Q. Which of the following is least likely to be a factor affecting the selection of marketing channels?
product packaging
Q. A marketer is most likely to set prices according to a cash-flow objective when a
quick return on investment is desired
Q _____________ is pricing a product at a moderate level and positioning it next to a more expensive model or brand.
reference pricing
q. After direct marketing, the next slightly longer marketing channel adds a(n)
retailer
Q. Direct selling, direct marketing, and vending machines are all examples of
retailing
-
revenue = price x quantity sold
Q Markup is measured either as a percentage of ____ or a percentage of ____.
selling price; cost
Q. Honeybees are disappearing at an alarming rate, and since they pollinate about a third of all foods we eat, it is an important concern. That's why Haagen-Dazs launched a microsite to increase the awareness of the issue. In addition, it launched a "Twitcause" campaign on Twitter, raising $7,000 in two days. This example illustrates the positive consequences of
social responsibility
Q. If Hefty Bags expresses concern that its products are having too great an impact on the pollution of groundwater under landfills, this concern is directly related to the firm's
social responsibility.
q. All of the following are types of limited-service merchant wholesalers except
specialty-line wholesalers.
q. Home Depot's synergistic use of organizational core competencies and resources to address key stakeholders' interests and achieve both social initiatives and its business goals is an example of
strategic philanthropy
Q Which of the following may include special attractions such as amusement parks or skating rinks?
super-regional shopping centers
Q. Jack gets a shopping list from his wife. On the list are a potted plant, fresh salmon, vitamins, bread, milk, and a birthday cake. To make just one stop to save time, Jack should go to a(n)
supermarket
q. Which of the following may include special attractions such as amusement parks or skating rinks?
superregional shopping centers
*competitive priorities*; strategic issues in marketing channels
supply chains can be a source of completive advantage. countries offer firms the opportunity to create/maintain effective SCM to support the development of national industries. SCM driven by firm-established goals focus on the competitive priorities of speed/quality/cost/flexibly as the performance objective.
Q. StarKist Tuna has frequently extolled its dolphin-safe methods of catching tuna. This is an example of
sustainability marketing.
Q. Which of the following is not a dimension of social responsibility and marketing citizenship?
technological
Q The notion of physical distribution is
the movement of products from producers to end users.
Q Many cities are revitalizing their downtown areas by bringing in new retail establishments. They are building new civic structures, passing ordinances that encourage the restoration of historic buildings, and developing mixed-use structures that include retail, residential, and other uses. These areas are best described as
traditional business districts.
Q. A drug maker got in trouble with the FTC. If patients of the drug maker wanted to purchase its schizophrenia drug, they also had to buy its blood-monitoring services. The FTC found this to be unfair. This is an example of a(n)
tying agreemenT
q. The best way to reduce overall distribution costs is to
use a total-cost approach to analyze and evaluate the entire system.
Q. Competition based pricing is
used when costs and revenues are secondary to competitors' prices
emerging technologies: retail beacons
video summary: retailer beacons: bluetooth devices alert costumers of sales on their phones when in store/of proximity. gets product info. self checkout by phone. placed anywhere around; on walls, tables (can be in decorations) pulls customers into stores get rewards walkout payment by what items you have gives product info 70% of customers use store locator, mobile coupons, & mobile payments Will you have to download an app for this, will it already be in your phone like the normal bluetooth that is already there? 4 Brings up trust-> how do customers feel about this. do they have my info at all times, my location etc. Do you feel targeted or do you like the convenience?
applied ethical dilemma example
video summary: Anna does not report the sale as prompted to do so. she cares more about the ethical thing to do for the company than a boss/coworkers upset. - type of thing that may occur in a business meeting - Anna decides to follow codes of conduct & not jeopardize her career
video summaries
video summary: KELLOGS: miniwheats not accurately compared/promoted. video summary: TARGET: target found out a teen was pregnant before family knew due to keeping records of the shopping purchased. *product issue* -digital privacy, esp. location video summary: FB: scary commercial to scare you so that you don't put personal info on social media. *product issue* -digital privacy, fine print video summary: WINDOWS 10: fine print states that at their discretion they can use your personal info.
video summary: KIVA ROBOTS
video summary: robots keep a system in assisting the kiva workers in distributing products. improve the distribution process for the costumer.
q. All of the following are differences between warehouse clubs and discount stores, *except*
warehouse clubs carry a deeper selection of fewer product categories than discount stores
Q. Sam's and Costco are examples of
warehouse clubs.
