BMGT 350 chapter 9, 11,12,13,& 14

Digital, mobile, and social media

Advantages: -High selectivity -Low cost -Immediacy -Engagement capabilities Limitations: -Potentially low impact -High audience control of content and exposure.

Television

Advantages: Good mass-marketing coverage; low cost per exposure; combines sight, sound, and motion; appealing to the senses Limitations: High absolute costs; high clutter; fleeting exposure; less audience selectivity

advertising agency

Advertising agencies originated in the mid- to late 1800s from salespeople and brokers who worked for the media and received a commission for selling advertising space to companies. As time passed, the salespeople began to help customers prepare their ads. Eventually, they formed agencies and grew closer to the advertisers than to the media.

consumer promotions

Sales promotion objectives vary widely. Sellers may use consumer promotions to urge short-term customer buying or boost customer-brand engagement.

closing

Salespeople should know how to recognize closing signals from the buyer, including physical actions, comments, and questions. For example, the customer might sit forward and nod approvingly or ask about prices and credit terms.

Wholesale merchants

Sell primarily to retailers and provide a full range of services. General merchandise wholesalers carry several merchandise lines, whereas general line wholesalers carry one or two lines in great depth. Specialty wholesalers specialize in carrying only part of a line.

Industrial distributors

Sell to manufacturers rather than to retailers. Provide several services, such as carrying stock, offering credit, and providing delivery. May carry a broad range of merchandise, a general line, or a specialty line.

Mail-order or web wholesalers

Send catalogs to or maintain websites for retail, industrial, and institutional customers featuring jewelry, cosmetics, specialty foods, and other small items. Its primary customers are businesses in small outlying areas.

Rack jobbers

Serve grocery and drug retailers, mostly in nonfood items. Rack jobbers send delivery trucks to stores, where the delivery people set up toys, paperbacks, hardware items, health and beauty aids, or other items. Rack jobbers price the goods, keep them fresh, set up point-of-purchase displays, and keep inventory records.

Sales branches and offices

Set up by manufacturers to improve inventory control, selling, and promotion. Sales branches carry inventory and are found in industries such as lumber and automotive equipment and parts. Sales offices do not carry inventory and are most prominent in the dry goods and notions industries.

Product line pricing

Setting prices across an entire product line

Sales promotion

Short-term incentives to encourage the purchase or sale of a product or service. includes discounts, coupons, displays, demonstrations, and events.

price-fixing

Federal legislation on price-fixing states that sellers must set prices without talking to competitors. Otherwise, price collusion is suspected. illegal per se—that is, the government does not accept any excuses for price-fixing

Advertising appeals

First, they should be meaningful, pointing out benefits that make the product more desirable or interesting to consumers. Second, appeals must be believable. Consumers must believe that the product or service will deliver the promised benefits. Appeals should also be distinctive. They should tell how the product is better than competing brands.

phishing

a type of identity theft that uses deceptive emails and fraudulent web and online mobile sites to fool users into divulging their personal data. For example, consumers may receive an email, supposedly from their bank or credit card company, saying that their account's security has been compromised.

voluntary chain

a wholesaler-sponsored group of independent retailers that engages in group buying and common merchandising. Examples include the Independent Grocers Alliance (IGA), Western Auto, and True Value hardware stores.

price escalation

may result from differences in selling strategies or market conditions. In most instances, however, it is simply a result of the higher costs of selling in another country—

Online display ads

might appear anywhere on an internet user's screen and are often related to the information being viewed. For example, while browsing espn.com on a warm summer day, users might see the web content wrapped at the top and both sides by a large banner ad for RTIC Coolers, touting the product's durability and ice-keeping prowess.

Deceptive pricing

occurs when a seller states prices or price savings that mislead consumers or are not actually available to consumers.

Price packs (also called cents-off deals)

offer consumers savings off the regular price of a product.

good-value pricing

offering the right combination of quality and good service at a fair price.

creative concept

or big idea—that will bring the message strategy to life in a distinctive and memorable way. At this stage, simple message ideas become great ad campaigns.

regional shopping center

or regional shopping mall, the largest and most dramatic shopping center, has from 50 to more than 100 stores, including two or more full-line department stores.

free on board

origin pricing, this practice means that the goods are placed free on board (hence, FOB) a carrier. At that point, the title and responsibility pass to the customer, who pays the freight from the factory to the destination.

media multitaskers,

people who absorb more than one medium at a time. For example, it's not uncommon to find someone watching TV with a smartphone in hand, tweeting, Snapchatting with friends, and chasing down product information on Google.

reference prices

prices that buyers carry in their minds and refer to when looking at a given product.

Sales assistants

provide research and administrative backup for outside salespeople. They track down sales leads, call ahead and confirm appointments, follow up on deliveries, and answer customers' questions when outside salespeople cannot be reached.

Sales meetings

provide social occasions, breaks from the routine, chances to meet and talk with "company brass," and opportunities to air feelings and identify with a larger group. Companies also sponsor sales contests to spur the sales force to make a selling effort above and beyond what is normally expected.

technical sales-support people

provide technical information and answers to customers' questions.

Online marketing

refers to marketing via the internet using company websites, online advertising and promotions, email marketing, online video, and blogs.

PR

responsible for creating relevant marketing content that draws consumers to a brand rather than pushing messages out.work hand in hand with advertising within an integrated marketing communications program to help build customer engagement and relationships.

target costing

reverses the usual process of first designing a new product, determining its cost, and then asking, "Can we sell it for that?" Instead, it starts with an ideal selling price based on customer value considerations and then targets costs that will ensure that the price is met. ex: honda fit

predatory pricing

selling below cost with the intention of punishing a competitor or gaining higher long-run profits by putting competitors out of business.

ermission-based email marketing

sending email pitches only to customers who "opt in."

Self-service retailers

serve customers who are willing to perform their own locate-compare-select process to save time or money.

salespeople

serve two masters—the seller and the buyer. First, they represent the company to customers. They find and develop new customers and communicate information about the company's products and services. They sell products by engaging customers and learning about their needs, presenting solutions, answering objections, negotiating prices and terms, closing sales, servicing accounts, and maintaining account relationships.represent customers to the company

fixed-price policy

setting one price for all buyers—is a relatively modern idea that arose with the development of large-scale retailing at the end of the nineteenth century.

Competition-based pricing

setting prices based on competitors' strategies, costs, prices, and market offerings.

percentage-of-sales method

setting their promotion budget at a certain percentage of current or forecasted sales. Or they budget a percentage of the unit sales price. simple to use and helps management think about the relationships between promotion spending, selling price, and profit per unit.

competitive-parity method

setting their promotion budgets to match competitors' outlays. They monitor competitors' advertising or get industry promotion spending estimates from publications or trade associations and then set their budgets based on the industry average.

product sales force structure

should adopt this structure If a company has numerous and complex products, in which the sales force specializes along product lines. For example, GE employs different sales forces for and within different product and service divisions of its major businesses.

execution styles

slice of life, lifestyle, fantasy, mood or image, musical, personality symbol, technical expertise, scientific evidence, testimonial evidence or endorsement

lifestyle centers

smaller, open-air malls with upscale stores, convenient locations, and nonretail activities, such as a playground, skating rink, hotel, dining establishments, and a movie theater complex.

sales quotas

standards stating the amount they should sell and how sales should be divided among the company's products.

Limited-service retailers

such as Sears or JCPenney, provide more sales assistance because they carry more shopping goods about which customers need information.

Full-service retailers,

such as high-end specialty stores (for example, Tiffany or Williams-Sonoma) and first-class department stores (such as Nordstrom or Neiman Marcus), assist customers in every phase of the shopping process

Audiovisual materials

such as videos, are being used increasingly as communication tools.

mass marketing

targeting broad markets with standardized messages and offers distributed through intermediaries.

search-related ads (or contextual advertising)

text- and image-based ads and links appear atop or alongside search engine results on sites such as Google, Yahoo!, and Bing. For example, search Google for "LED TVs." At the top and side of the resulting search list, you'll see inconspicuous ads for 10 or more advertisers, ranging from Samsung and Panasonic to Best Buy, Amazon.com, Walmart.com, Crutchfield, and CDW

Salespeople also need to know how to qualify leads

that is, how to identify the good ones and screen out the poor ones. Prospects can be qualified by looking at their financial ability, volume of business, special needs, location, and possibilities for growth.

Price

the amount of money charged for a product or a service. More broadly, price is the sum of all the values that customers give up to gain the benefits of having or using a product or service.

Viral marketing

the digital version of word-of-mouth marketing, involves creating videos, ads, and other marketing content that are so infectious that customers will seek them out or pass them along to their friends.

digital and social media marketing

the fastest-growing form of direct marketing. It uses digital marketing tools such as websites, online video, email, blogs, social media, mobile ads and apps, and other digital platforms to directly engage consumers anywhere, anytime via their computers, smartphones, tablets, internet-ready TVs, and other digital devices.

pure competition

the market consists of many buyers and sellers trading in a uniform commodity, such as wheat, copper, or financial securities.

monopolistic competition,

the market consists of many buyers and sellers trading over a range of prices rather than a single market price.

oligopolistic competition,

the market consists of only a few large sellers. For example, only a handful of providers—Comcast, Spectrum, AT&T, and Dish Network—control a lion's share of the cable/satellite television market.

pure monopoly

the market is dominated by one seller. The seller may be a government monopoly (the U.S. Postal Service), a private regulated monopoly (a power company), or a private unregulated monopoly (De Beers and diamonds).

Supermarkets

the most frequently visited type of retail store. Today, however, they are facing slow sales growth because of slower population growth and an increase in competition

Uniform-delivered pricing

the opposite of FOB pricing. Here, the company charges the same price plus freight to all customers, regardless of their location. The freight charge is set at the average freight cost.

pull strategy

the producer directs its marketing activities (primarily advertising, consumer promotion, and direct and digital media) toward final consumers to induce them to buy the product. For example, P&G promotes its Tide laundry products directly to consumers using TV and print ads, web and social media brand sites, and other channels.

media impact

the qualitative value of message exposure through a given medium. For example, the same message in one magazine (say, Leisure+Travel) may be more believable than in another (say, the National Enquirer).

approach

the salesperson should know how to meet and greet the buyer and get the relationship off to a good start.

handling objections

the salesperson should use a positive approach, seek out hidden objections, ask the buyer to clarify any objections, take objections as opportunities to provide more information, and turn the objections into reasons for buying.

presentation

the salesperson tells the "value story" to the buyer, showing how the company's offer solves the customer's problems.

freight-absorption pricing

the seller absorbs all or part of the actual freight charges to get the desired business.used for market penetration and to hold on to increasingly competitive markets.

basing-point pricing

the seller selects a given city as a "basing point" and charges all customers the freight cost from that city to the customer location, regardless of the city from which the goods are actually shipped

Total costs

the sum of the fixed and variable costs for any given level of production

social selling

the use of online, mobile, and social media to engage customers, build stronger customer relationships, and augment sales performance.

social media are targeted and personal

they allow marketers to create and share tailored brand content with individual consumers and customer communities.

online advertising

to build brand sales or attract visitors to their internet, mobile, and social media sites. Online advertising has become a major promotional medium. ex;display ads and search-related ads

goal of supervision

to help salespeople "work smart" by doing the right things in the right ways

team selling

to service large, complex accounts. Sales teams can unearth problems, solutions, and sales opportunities that no individual salesperson could

Persuasive advertising

becomes more important as competition increases. Here, the company's objective is to build selective demand. For example, as EVs catch on, GM is now trying to persuade consumers that its Chevy Bolt offers more value for the price than the Tesla Model 3, Toyota Prius Prime, or Nissan Leaf. Such advertising wants to engage customers and create brand preference.

sales force automation systems

computerized, digitized sales force operations that let salespeople work more effectively anytime, anywhere.

Personal selling

consists of interpersonal interactions with customers and prospects to make sales and maintain customer relationships.one of the oldest professions in the world. The people who do the selling go by many names, including salespeople, sales representatives, agents, district managers, account executives, sales consultants, and sales engineers.

selling process

consists of seven steps: prospecting and qualifying, preapproach, approach, presentation and demonstration, handling objections, closing, and follow-up.These steps focus on the goal of getting new customers and obtaining orders from them.

Sales promotion

consists of short-term incentives to encourage the purchase or sales of a product or service.

Advertising strategy

consists of two major elements: creating advertising messages and selecting advertising media.

community shopping center

contains between 15 and 50 retail stores. It normally contains a branch of a department store or variety store, a supermarket, specialty stores, professional offices, and sometimes a bank.

value selling

demonstrating and delivering superior customer value and capturing a return on that value that is fair for both the customer and the company

Organizational climate

describes the feeling that salespeople have about their opportunities, value, and rewards for a good performance.

cost-based pricing

design a good product, determine product cost, set price based on cost, convince buyers of products value

marketing websites

designed to engage customers and move them closer to a direct purchase or other marketing outcome.

Customer-segment pricing

different customers pay different prices for the same product or service. For example, museums, movie theaters, and retail stores may charge lower prices for students, people in the military, and senior citizens.

product form pricing

different versions of the product are priced differently but not according to differences in their costs. For instance, a round-trip economy seat on a flight from New York to London might cost $1,100, whereas a business-class seat on the same flight might cost $6,500 or more.

direct-response television (DRTV) marketing

direct marketers air television spots, often 60 or 120 seconds in length, which persuasively describe a product and give customers a toll-free number or an online site for ordering.

brand community websites

do much more than just sell products. Instead, their primary purpose is to present brand content that engages consumers and creates customer-brand community.For example, ESPN.com.

customer-solution approach

fits better with today's relationship marketing focus than does a hard sell or glad-handing approach.

shopper marketing

focusing the entire marketing process—from product and brand development to logistics, promotion, and merchandising—toward turning shoppers into buyers as they move along toward the point of sale.

inside sales force

inside salespeople conduct business from their offices via phone, online and social media interactions, or visits from buyers.

Direct and digital marketing

involve engaging directly with carefully targeted individual consumers and customer communities to both obtain an immediate response and build lasting customer relationships.

push strategy

involves "pushing" the product through marketing channels to final consumers.The producer directs its marketing activities (primarily personal selling and trade promotion) toward channel members to induce them to carry the product and promote it to final consumers. For example, John Deere does very little promoting of its lawn mowers, garden tractors, and other residential consumer products to final consumers.

high-low pricing

involves charging higher prices on an everyday basis but running frequent promotions to lower prices temporarily on selected items. Department stores such as Kohl's and JCPenney practice high-low pricing by having frequent sale days, early-bird savings, and bonus earnings for store credit-card holders.

Direct-mail marketing

involves sending an offer, announcement, reminder, or other item to a person at a particular address.

Cost-based pricing

involves setting prices based on the costs of producing, distributing, and selling the product plus a fair rate of return for the company's effort and risk

Sales promotion

involves using short-term incentives to encourage customer purchasing, reseller support, and sales force efforts.

Telemarketing

involves using the telephone to sell directly to consumers and business customers.Marketers use outbound telephone marketing to sell directly to consumers and businesses. They also use inbound toll-free numbers to receive orders referred from television and print ads, direct mail, catalogs, websites, and phone apps.

sales contest

is a contest for salespeople or dealers to motivate them to increase their sales performance over a given period. Sales contests motivate and recognize good company performers, who may receive trips, cash prizes, or other gifts.

Frequency

is a measure of how many times the average person in the target market is exposed to a message. For example, the advertiser might want an average exposure frequency of three.

Reach

is a measure of the percentage of people in the target market who are exposed to an ad campaign during a given period of time. For example, the advertiser might try to reach 70 percent of the target market during the first three months of a campaign.

advertising objective

is a specific communication task to be accomplished with a specific target audience during a specific period of time.Advertising objectives can be classified by their primary purpose—to inform, persuade, or remind

Reminder advertising

is important for mature products; it helps to maintain customer relationships and keep consumers thinking about the product. For example, a recent ad campaign for Silk soymilk tells consumers to "Fall back in love with Soymilk," reminding them of the many reasons that "Silk helps you bloom."

follow-up

is necessary if the salesperson wants to ensure customer satisfaction and repeat business. Right after closing, the salesperson should complete any details on delivery time, purchase terms, and other matters.

goal of motivation

is to encourage salespeople to "work hard" and energetically toward sales force goals.

Informative advertising

is used heavily when introducing a new product category. In this case, the objective is to build primary demand

Social media are interactive

making them ideal for starting and participating in customer conversations and listening to customer feedback.

Factory outlets

manufacturer-owned and operated stores by firms such as J.Crew, Gap, Levi Strauss, and others—sometimes group together in factory outlet malls and value-retail centers.

advertising media selection

(1) determining reach, frequency, impact, and engagement; (2) choosing among major media types; (3) selecting specific media vehicles; and (4) choosing media timing.

native advertising

(also called sponsored content), advertising or other brand-produced online content that appears to be "native to" the web or social media site in which it is placed.

Fixed costs

(also known as overhead) are costs that do not vary with production or sales level. For example, a company must pay each month's bills for rent, heat, interest, and executive salaries regardless of the company's level of output.

Warehouse clubs

(also known as wholesale clubs or membership warehouses), such as Costco, Sam's Club, and BJ's, operate in huge, warehouse-like facilities and offer few frills.

Brand integrations

(or branded entertainment) involve making the brand an inseparable part of some other form of entertainment or content.

Direct mail

Advantages- high audience selectivity; flexibility; no ad competition within the same medium; allows personalization Limitations- relatively high cost per exposure; "junk mail" image

shopping center

a group of retail businesses built on a site that is planned, developed, owned, and managed as a unit.

Discount store

A store that carries standard merchandise sold at lower prices with lower margins and higher volumes.for example, Target, Kohl's, or Walmart)

Off-price retailer

A store that sells merchandise bought at less-than-regular wholesale prices and sold at less than retail. These include factory outlets owned and operated by manufacturers; independent off-price retailers owned and run by entrepreneurs or by divisions of larger retail corporations; and warehouse (or wholesale) clubs selling a limited selection of goods at deep discounts to consumers who pay membership fees.

Dynamic pricing

Adjusting prices continually to meet the characteristics and needs of individual customers and situations

International pricing

Adjusting prices for international markets

Psychological pricing

Adjusting prices for psychological effect.For example, consumers usually perceive higher-priced products as having higher quality.

Geographical pricing

Adjusting prices to account for the geographic location of customers

Segmented pricing

Adjusting prices to allow for differences in customers, products, or locations.

advertising option icon

a little "i" inside a triangle—that it adds to behaviorally targeted online ads to tell consumers why they are seeing a particular ad and allowing them to opt out.

retail (or resale) price maintenance

a manufacturer cannot require dealers to charge a specified retail price for its product.

Cash-and-carry wholesalers

Carry a limited line of fast-moving goods and sell to small retailers for cash. Normally do not deliver.

market-penetration pricing

Companies set a low initial price to penetrate the market quickly and deeply—to attract a large number of buyers quickly and win a large market share.

Advertising

Any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor.includes broadcast, print, online, mobile, outdoor, and other forms

content marketing

As such, they create, inspire, and share brand messages and conversations with and among customers across a fluid mix of paid, owned, earned, and shared communication channels.

preapproach

Before calling on a prospect, the salesperson should learn as much as possible about the organization (what it needs, who is involved in the buying) and its buyers (their characteristics and buying styles).

Brokers

Bring buyers and sellers together and assist in negotiation. Brokers are paid by the party who hired the broker and do not carry inventory, get involved in financing, or assume risk. Examples include food brokers, real estate brokers, insurance brokers, and security brokers.

Public relations (PR)

Building good relations with the company's various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events.includes press releases, sponsorships, events, and webpages

Producers' cooperatives

Farmer-owned members that assemble farm produce for sale in local markets. Producers' cooperatives often attempt to improve product quality and promote a co-op brand name, such as Sun-Maid raisins, Sunkist oranges, or Diamond nuts.

Franchise organization

Contractual association between a franchisor (a manufacturer, wholesaler, or service organization) and franchisees (independent businesspeople who buy the right to own and operate one or more units in the franchise system).

media engagement

Current media measures are things such as ratings, readership, listenership, and click-through rates. However, engagement happens inside the head of the consumer. Engaged consumers are more likely to act upon brand messages and even share them with others.

Drop shippers

Do not carry inventory or handle the product. On receiving an order, drop shippers select a manufacturer, who then ships the merchandise directly to the customer. Drop shippers operate in bulk industries, such as coal, lumber, and heavy equipment.

Brokers and agents

Do not take title to goods. The main function is to facilitate buying and selling, for which they earn a commission on the selling price. Generally specialize by product line or customer type.

everyday low pricing (EDLP)

EDLP involves charging a constant, everyday low price with few or no temporary price discounts. Perhaps the king of EDLP is Walmart, which practically defined the concept. Except for a few sale items every month, Walmart promises everyday low prices on everything it sells.

Direct and digital marketing

Engaging directly with carefully targeted individual consumers and customer communities to both obtain an immediate response and build lasting customer relationships.includes direct mail, email, catalogs, online and social media, mobile marketing, and more

Purchasing agents

Generally have a long-term relationship with buyers and make purchases for them, often receiving, inspecting, warehousing, and shipping the merchandise to buyers. Purchasing agents help clients obtain the best goods and prices available.

Retailer cooperative

Group of independent retailers who jointly establish a central buying organization and conduct joint promotion efforts.

Selling agents

Have contractual authority to sell a manufacturer's entire output. The selling agent serves as a sales department and has significant influence over prices, terms, and conditions of sale. Found in product areas such as textiles, industrial machinery and equipment, coal and coke, chemicals, and metals.

Merchant wholesalers

Independently owned businesses that take title to all merchandise handled. There are full-service wholesalers and limited-service wholesalers.

market-skimming pricing (or price skimming)

Many companies that invent new products set high initial prices to skim revenues layer by layer from the market. ex; Apple

retailers

Many institutions—manufacturers, wholesalers, and retailers—do retailing. But most retailing is done by retailers, businesses whose sales come primarily from retailing. Retailing plays a very important role in most marketing channels

Limited-service wholesalers

Offer fewer services than full-service wholesalers. Limited-service wholesalers are of several types:

outside sales force (or field sales force

Outside salespeople travel to call on customers in the field

Purchasing offices

Perform a role similar to that of brokers or agents but are part of the buyer's organization. Many retailers set up purchasing offices in major market centers, such as New York and Chicago.

Truck wholesalers (or truck jobbers)

Perform primarily a selling and delivery function. Carry a limited line of semiperishable merchandise (such as milk, bread, snack foods), which is sold for cash as deliveries are made to supermarkets, small groceries, hospitals, restaurants, factory cafeterias, and hotels.

Personal selling

Personal customer interactions by the firm's sales force to engage customers, make sales, and build customer relationships.includes sales presentations, trade shows, and incentive programs.

Product bundle pricing

Pricing bundles of products sold together.For example, fast-food restaurants bundle a burger, fries, and a soft drink at a "combo" price.

By-product pricing

Pricing low-value by-products to get rid of or make money on them

Optional-product pricing

Pricing optional or accessory products sold with the main product.For example, a car buyer may choose to order a navigation system and premium entertainment system.

Captive-product pricing

Pricing products that must be used with the main product.Examples of captive products are razor blade cartridges, video games, printer cartridges, single-serve coffee pods, and e-books.

Full-service wholesalers

Provide a full line of services: carrying stock, maintaining a sales force, offering credit, making deliveries, and providing management assistance. Full-service wholesalers include wholesale merchants and industrial distributors.

value-added pricing

Rather than cutting prices to match competitors, they add quality, services, and value-added features to differentiate their offers and thus support their higher prices. Ex:Bose

Discount and allowance pricing

Reducing prices to reward customer responses such as volume purchases, paying early, or promoting the product

Agents

Represent either buyers or sellers on a more permanent basis than brokers do. There are four types:

Manufacturers' agents

Represent two or more manufacturers of complementary lines. Often used in such lines as apparel, furniture, and electrical goods. A manufacturer's agent is hired by small manufacturers who cannot afford their own field sales forces and by large manufacturers who use agents to open new territories or cover territories that cannot support full-time salespeople.

retail convergence

Such convergence means greater competition for retailers and greater difficulty in differentiating the product assortments of various types of retailers.

Commission merchants

Take physical possession of products and negotiate sales. Used most often in agricultural marketing by farmers who do not want to sell their own output. Take a truckload of commodities to a central market, sell it for the best price, deduct a commission and expenses, and remit the balance to the producers.

Promotional pricing

Temporarily reducing prices to spur short-run sales. Ex:offer discounts,special-event pricing in certain seasons , Limited-time offers, such as online flash sales, cash rebates,offer low-interest financing, longer warranties, or free maintenance

advertainment

The aim of advertainment is to make ads and brand content themselves so entertaining or so useful that people want to watch them.

Bulk breaking

Wholesalers save their customers money by buying in carload lots and breaking bulk (breaking large lots into small quantities).

Other External Factors when setting price

The government is another important external influence on pricing decisions. Finally, social concerns may need to be taken into account.

demand curve

The relationship between the price charged and the resulting demand level

Selling and promoting.

Wholesalers' sales forces help manufacturers reach many small customers at a low cost. The wholesaler has more contacts and is often more trusted by the buyer than the distant manufacturer.

Manufacturers' and retailers' branches and offices

Wholesaling operations conducted by sellers or buyers themselves rather than operating through independent wholesalers. Separate branches and offices can be dedicated to either sales or purchasing.

Social media are also immediate and timely

They can be used to reach customers anytime, anywhere with timely and relevant marketing content regarding brand happenings and activities.

event marketing (or event sponsorships)

They can create their own brand-marketing events or serve as sole or participating sponsors of events created by others. The events might include anything from mobile brand tours to festivals, reunions, marathons, concerts, or other sponsored gatherings.

affordable method

They set the promotion budget at the level they think the company can afford. They start with total revenues, deduct operating expenses and capital outlays, and then devote some portion of the remaining funds to advertising. Unfortunately, this method of setting budgets completely ignores the effects of promotion on sales.

Corporate chain

Two or more outlets that are commonly owned and controlled. Corporate chains appear in all types of retailing but they are strongest in department stores, discount stores, food stores, drugstores, and restaurants

integrated marketing communications (IMC)

Under this concept, the company carefully integrates its many communication channels to deliver a clear, consistent, and compelling message about the organization and its brands.

price gouger

When raising prices, the company must avoid being perceived as a price gouger. For example, when gasoline prices rise rapidly, angry customers often accuse the major oil companies of enriching themselves at the expense of consumers.

Voluntary chain

Wholesaler-sponsored group of independent retailers engaged in group buying and merchandising.

Risk bearing

Wholesalers absorb risk by taking title and bearing the cost of theft, damage, spoilage, and obsolescence

Transportation.

Wholesalers can provide quicker delivery to buyers because they are closer to buyers than are producers.

Buying and assortment building.

Wholesalers can select items and build assortments needed by their customers, thereby saving much work.

Financing

Wholesalers finance their customers by giving credit, and they finance their suppliers by ordering early and paying bills on time.

Market information

Wholesalers give information to suppliers and customers about competitors, new products, and price developments.

Warehousing

Wholesalers hold inventories, thereby reducing the inventory costs and risks of suppliers and customers.

Management services and advice

Wholesalers often help retailers train their salesclerks, improve store layouts and displays, and set up accounting and inventory control systems.

location-based pricing

a company charges different prices for different locations, even though the cost of offering each location is the same. For instance, state universities charge higher tuition for out-of-state students, and theaters vary their seat prices because of audience preferences for certain locations.

customer (or market) sales force structure

a company organizes its sales force along customer or industry lines. Separate sales forces may be set up for different industries, serving current customers versus finding new ones, and serving major accounts versus regular accounts.

Price competition

a core element of our free-market economy. In setting prices, companies usually are not free to charge whatever prices they wish.

time-based pricing

a firm varies its price by the season, the month, the day, and even the hour. For example, movie theaters charge matinee pricing during the daytime, and resorts give weekend and seasonal discounts.

retailer cooperative

a group of independent retailers that bands together to set up a jointly owned, central wholesale operation and conduct joint merchandising and promotion efforts.Examples are Associated Grocers and Ace Hardware.

low-price "fighter brand"

adding a lower-price item to the line or creating a separate lower-price brand.

cost-plus pricing (or markup pricing)

adding a standard markup to the cost of the product. For example, an electronics retailer might pay a manufacturer $20 for a gaming controller and mark it up to sell at $30, a 50 percent markup on cost.

Outdoor

advantages: - flexibility - high repeat exposure - low cost - low message competition - good positional selectivity limitations: - little audience selectivity - creative limitations

Newspapers

advantages: - flexibility - timeliness - good local market coverage - broad acceptability and high believability limitations: - short life - poor reproduction quality - small pass-along audience

Magazines

advantages: - high geographic and demographic selectivity - credibility and prestige - high-quality reproduction - long life and good pass-along readership limitations: - long ad purchase lead time - high cost - no guarantee of position

Radio

advantages:Good local acceptance; high geographic and demographic selectivity; low cost Limitations:Audio only; fleeting exposure; low attention ("the half-heard" medium); fragmented audiences

real-time marketing

allowing marketers to create and join consumer conversations around situations and events as they occur. Consider JetBlue

promotion mix

also called its marketing communications mix—consists of the specific blend of advertising, public relations, personal selling, sales promotion, and direct and digital marketing tools that the company uses to engage consumers, persuasively communicate customer value, and build customer relationships.

break-even pricing

also called target return pricing. The firm tries to determine the price at which it will break even or make the target return it is seeking. Target return pricing uses the concept of a break-even chart, which shows the total cost and total revenue expected at different sales volume levels.

Measuring the communication effects

an ad or ad campaign tells whether the ads and media are communicating the ad message well. Individual ads can be tested before or after they are run.

sales force management

analyzing, planning, implementing, and controlling sales force activities. It includes designing sales force strategy and structure as well as recruiting, selecting, training, compensating, supervising, and evaluating the firm's salespeople.

Superstores

are much larger than regular supermarkets and offer a large assortment of routinely purchased food products, nonfood items, and services.This includes supercenters, combined supermarket and discount stores, and category killers, which carry a deep assortment in a particular category.

Blogs

are online forums where people and companies post their thoughts and other content, usually related to narrowly defined topics.

Convenience stores

are small stores that carry a limited line of high-turnover convenience goods. open 24/7, and carrying a limited line of high-turnover convenience products at slightly higher prices.

Business promotions

are used to generate business leads, stimulate purchases, reward customers, and motivate salespeople. Business promotions include many of the same tools used for consumer or trade promotions.

Advertising specialties, also called promotional products

are useful articles imprinted with an advertiser's name, logo, or message that are given as gifts to consumers.

value-based pricing

assess customer needs and value perception -> set target price to match customer perceived value -> determine costs that can be incurred -> design product to deliver desired value at target price

Coupons

are certificates that save buyers money when they purchase specified products.

Premiums

are goods offered either free or at low cost as an incentive to buy a product, ranging from toys included with kids' products to phone cards and DVDs.

Rebates (or cash refunds)

are like coupons except that the price reduction occurs after the purchase rather than at the retail outlet.

Corporate identity materials

can also help create a corporate identity that the public immediately recognizes. Logos, stationery, brochures, signs, business forms, business cards, buildings, uniforms, and company cars and trucks all become marketing tools when they are attractive, distinctive, and memorable.

Trade promotions

can persuade resellers to carry a brand, give it shelf space, promote it in advertising, and push it to consumers.

department stores

carry a wide variety of product lines.—typically clothing, home furnishings, and household goods—with each line operated as a separate department managed by specialist buyers or merchandisers.

specialty stores

carry narrow product lines with deep assortments within those lines. such as apparel stores, sporting-goods stores, furniture stores, florists, and bookstores.

everyday low pricing (EDLP)

charging constant, everyday low prices with few sales or discounts.

high-low pricing

charging higher prices on an everyday basis coupled with frequent sales and other price promotions to increase store traffic, create a low-price image, or attract customers who will buy other goods at full prices (Macy's, Kohl's, JCPenney, for example).

omni-channel retailing

companies are having as much online success as their online-only competitors. For example, home-improvement retailer Home Depot has nearly 2,000 U.S. stores.

Manufacturers use several trade promotion tools

contests, premiums, displays, -straight discount off the list price on each case purchased during a stated period of time -may offer an allowance (usually so much off per case) in return for the retailer's agreement to feature the manufacturer's products in some way. -may offer free goods, which are extra cases of merchandise, to resellers who buy a certain quantity or who feature a certain flavor or size. -offer push money—cash or gifts to dealers or their sales forces to "push" the manufacturer's goods. -- -may give retailers free specialty advertising items that carry the company's name, such as pens, calendars, memo pads, flashlights, and tote bags.

territorial sales force structure

each salesperson is assigned to an exclusive geographic area and sells the company's full line of products or services to all customers in that territory

Independent off-price retailers

either are independently owned and run or are divisions of larger retail corporations

direct marketing

either as a primary marketing approach or as a supplement to other approaches

Zone pricing

falls between FOB-origin pricing and uniform-delivered pricing. The company sets up two or more zones. All customers within a given zone pay a single total price; the more distant the zone, the higher the price.

Mobile marketing

features marketing messages, promotions, and other marketing content delivered to on-the-go consumers through their mobile devices.

category killers

giant specialty stores, `(for example, Best Buy, Home Depot, Petco, and Bed Bath & Beyond).

Contests, sweepstakes, and games

give consumers the chance to win something, such as cash, trips, or goods, by luck or through extra effort.

price elasticity

how responsive demand will be to a change in price. If demand hardly changes with a small change in price, we say demand is inelastic. If demand changes greatly, we say the demand is elastic.

Power centers

huge unenclosed shopping centers consisting of a long strip of retail stores, including large, freestanding anchors such as Walmart, Home Depot, Costco, Best Buy, Michaels, PetSmart, and Office Depot.

prospecting

identifying qualified potential customers. Approaching the right customers is crucial to selling success.

comparative advertising (or attack advertising

in which a company directly or indirectly compares its brand with one or more other brands. You see examples of comparative advertising in almost every product category, ranging from soft drinks and fast food to car rentals, credit cards, and wireless phone services. For example, Pepsi has long fielded comparative ads that take direct aim at rival Coca-Cola

Consumer promotions

include a wide range of tools—from samples, coupons, refunds, premiums, and point-of-purchase displays to contests, sweepstakes, and event sponsorships.

Point-of-purchase (POP) promotions

include displays and demonstrations that take place at the point of sale.

trade promotions

include getting retailers to carry new items and more inventory, buy ahead, or promote the company's products and give them more shelf space.

Service retailers

include hotels and motels, banks, airlines, restaurants, colleges, hospitals, movie theaters, tennis clubs, bowling alleys, repair services, hair salons, and dry cleaners.

Wholesaling

includes all the activities involved in selling goods and services to those buying them for resale or business use. Firms engaged primarily in wholesaling activities are called wholesalers

Retailing

includes all the activities involved in selling products or services directly to final consumers for their personal, nonbusiness use

spam

unsolicited, unwanted commercial email messages that clog up our email boxes—has produced consumer irritation and frustration.

Catalog Age magazine

used to define a catalog as "a printed, bound piece of at least eight pages, selling multiple products, and offering a direct ordering mechanism.

Business promotions

used to generate business leads, stimulate purchases, reward customers, and motivate salespeople.

Customer value-based pricing

uses buyers' perceptions of value as the key to pricing. Value-based pricing means that the marketer cannot design a product and marketing program and then set the price.

Variable costs

vary directly with the level of production. Each smartphone or tablet produced by Samsung involves a cost of computer chips, wires, plastic, packaging, and other inputs. Although these costs tend to be the same for each unit produced, they are called variable costs because the total varies with the number of units produced.

objective-and-task method

whereby the company sets its promotion budget based on what it wants to accomplish with promotion. This budgeting method entails (1) defining specific promotion objectives, (2) determining the tasks needed to achieve these objectives, and (3) estimating the costs of performing these tasks. The sum of these costs is the proposed promotion budget.

omni-channel buyers

who make little distinction between in-store and online shopping, and for whom the path to a retail purchase runs across multiple channels. creating a seamless cross-channel buying experience that integrates in-store, online, and mobile shopping.