Exam #3 BA370 Marketing SDSU Gaffen
What does a cash discount of "3/10, n/30" translate to?
"3% if paid in 10 days prior to end of period or net payment in 30 days"
Desire (AIDA)
"I like it" to "I want it."
P-O-P
"Point-of-Purchase" a display that acts as a silent salesperson for a specific product - By the counter (exit) to increase viability and encourage buyer
Quantity Discounts (for customers)
- Buy larger size --> less likely to switch brands Ex. Toilet paper or cereal brand
Drawbacks of Penetration Pricing: - Must have the ___________ to support a rapid rise in demand - Low price does not always communicate __________. - Should be avoided if segments of the market are willing to pay ______ for products.
- Capacity - High quality - More
What are factors that influence price?
- Consumer - Markets - Government Regulations - Economics - Competitors ETC . . .
What are some advantages of internet retailing?
- Deeper/broader selection - More personalized information (offerings and customer service) - New seller can enter market economically
What are Coupons? Why are they used?
- Discount when item is purchased at PoP - Used to: stimulate sales, encourage first time buying, protect from the competition, etc..
Why would a firm want to set low prices?
- Discourage competition from entering the market - Encourage competitors to leave INCREASE their overall market share
When is persuasive advertising used?
- During growth/maturity stages of product life cycle - When competition is intense (to accelerate acceptance in the market) - Reposition a brand (later in life cycle)
managing an omnichannel strategy
- Examine the circumstances of selling to multiple retailers
When is reminder advertising used?
- For products that have gained market acceptance and are in the MATURITY stage of their life cycle
Why are markdowns used?
- Get rid of slow moving products - Sell seasonal items after the season - Match competitors prices
Why might some firms that have a Sales-Oriented strategy choose PREMIUM pricing over low-pricing?
- Higher price generates higher perception value while still being able to control the market share (e. Heinz, Crest Toothpaste, Nike, etc..)
Choosing Retail Partners
- How likely it is for certain retailers to carry products - Determine WHERE target customers expect to get it (where these stores are/how many) - Image of retailer - Type/availability of product
Main Purposes of Advertisements
- Identify the subject - Show product in use + unique features - Create a favorable impression - Arouse the audience interest
What activities do Distribution Centers perform?
- Inbound transportation - Receiving/checking incoming orders - Storing / Cross-docking - Getting merchandise ready for floor - Ticketing + Marking - Preparing to and actually shipping merchandise
Pricing Tactics Aimed at Consumers
- Mark downs - Quantity discounts - Seasonal discounts - Coupons - Rebates - Leasing - Price bundling - Leader pricing
How can brands achieve Top-of-Mind awareness?
- Memorable names - Repeated exposure - Memorable Symbols
Distribution Centers Advantages (vs. Direct Store)
- More accurate sales forecasts (instead of a bunch of individual ones for different stores) - Less merchandise has to be carried in store (lower investment costs) - Less Stock outs - Costs LESS to hold items (retail rent can be expensive)
What is required in order for Price Skimming strategy to be effective?
- Must be seen as groundbreaking - Must make it difficult for competitors to enter
What are the new product pricing strategies?
- Penetration Pricing - Price Skimming
High/Low pricing appeals to ___________________ as well as those who are ____________________.
- Price sensitive buyer (those who will wait for the price to drop) - Not price sensitive and want it now (don't wait for the discount) APPEALS TO BOTH SECTIONS OF THE MARKET
Once firms have developed their company objectives, they turn to understanding consumers'....
- Reactions to different prices
POS Terminal
- Records the purchase information and electronically sends it to the corporate office.
When determining the Advertising Budget, firms should consider:
- Role that advertising plays in their attempt to meet their overall promotional objectives - Expenditures that vary over the course of the Product Life Cycle - Nature of the market and the product influence the size of the budget (+ how much should be spent on ads)
Pricing penetration helps to build _________, _____________, and ___________ quickly.
- Sales - Marketshare - Profits
Business Pricing Tactics and Discounts
- Seasonal discounts - Cash discounts - Vendor allowances - Quantity discounts (Cumulative vs. Non) - Uniform delivered vs zone pricing
Who is involved in communicating with consumers?
- Sender: where the message originates from (adjust medium to allow for max impact) - Transmitter: creative department; works with the sender to ENCODE - Communication channel (media): carries the message - Receiver: the person who hears, reads, or sees and processes the information contained
Predatory Pricing is illegal under which acts?
- Sherman Antitrust Act - Federal Trade Commission Act
What should be considered when creating the advertisement?
- The audience and objectives - Special proposition about the product/service - How ad will be coordinated with other IMC
What will the MESSAGE convey in an advertisement?
- The key benefits of a product or service - Problem solving ability of the P/S
How can advertisers asses the impact of a campaign?
- Using Marketing Metrics: 1. Pretesting 2. Tracking 3. Post-testing
What are some characteristics of atmospherics?
- Visual -- light, color - Auditory -- music - Olfactory -- smell - Tactile -- touch - Taste -- (food smells attract customers; e. champagne or edible samples)
What communication disciplines encompass IMC?
- general advertising - personal selling - sales promotion - public relations - direct marketing - electronic media
What are forms of Mass Media channels?
- newspapers - books - magazines - radio - movies - television -Internet
What are the 3 types of Vertical Marketing Channels?
1. Administered 2. Contractual 3. Cooperate
What are two types of allowances?
1. Advertising allowance 2. Slotting allowance
Two types of Quantity Discounts for Businesses
1. CUMULATIVE - Amount purchased over a specific time period; involves a series of transactions - Encourages resellers to maintain current supplier 2. NONCUMULATIVE - Only amount purchased in a single order
Factors for Establishing a Relationship with Retailers
1. Choosing retailing partners 2. Identifying types of retailers 3. Developing a retail strategy 4. Managing an omnichannel strategy Can be done consecutively or simultaneously
What are the 5 C's of pricing?
1. Company objectives 2. Customers 3. Costs 4. Competition 5. Channel members - Within the 5 C's is VALUE
What are the 3 types of advertising schedules?
1. Continuous 2. Flighting 3. Pulsing
What are the 3 methods to develop pricing strategy?
1. Cost-Based 2. Competition-Based 3. Value-Based
Steps for determining WHAT wants to be conveyed in the message:
1. Determine the key message it wants to communicate 2. Determining what appeal would convey the message most effectively
How are food retailers competing to be successful?
1. Emphasizing fresh perishables 2. Targeting green, ethnic, and Millennial consumers 3. Providing better value with private-label merchandise 4. Adding new value-added services such as online ordering and delivery options 5. Providing a better shopping experience through restaurant options and hosting social events
What are the type of retailers?
1. Food 2. General 3. Service
Steps for developing an effective advertising campaign:
1. Identify the target audience 2. Set an advertising objective 3. Determine the budget 4. Convey the message 5. Evaluate and select media 6. Create ads 7. Assess impact
What are 2 Value-based methods of pricing?
1. Improvement value method 2. Cost-of-Ownership method
What are 3 factors influencing price elasticity of demand?
1. Income Effect 2. Substitution Effect 3. Cross-Pricing Elasticity
3 Objectives of Advertising
1. Inform 2. Persuade 3. Remind
What is required when expanding marketing presence?
1. Integrated CRM 2. Brand Image consistent across all channels 3. Pricing across channels remains similar 4. Supply Chain require unique skills and resources to manage it
What are the 3 levels of distribution intensity?
1. Intensive 2. Selective 3. Exclusive
Distinction between ADS and other forms of promotion
1. NOT free - Paid for by money OR some other exchange 2. Carried by a MEDIUM - TV, Radio, T-Shirt, etc... 3. KNOWN SOURCE of message - Must legally identify who the message is from 4. PERSUASIVE form to get people to take ACTION
Setting and Allocating the IMC Budget
1. Objective and task method 2. Rule of thumb methods
The 6 Ps use the 4 Ps plus an additional 2 Ps which are:
1. Personelle 2. Presentation
4 Common Company Objectives and Pricing Strategy Implications
1. Profit-Oriented 2. Sales-Oriented 3. Competitor-Oriented 4. Customer-Oriented
What are the bases of power?
1. Reward 2. Coercive 3. Referent 4. Expertise 5. Information 6. Legitimate (ALL apart of Administered Vertical marketing systems)
What are 3 pricing strategies for Profit Oriented firms?
1. Target Profit 2. Maximizing Profits 3. Target Return
What are the 3 elements of IMC?
1. The Consumer 2. The Commercial Channels 3. Evaluation
Online Grocery retailers are growing by _______% annually
25% - Expanding market - Low profit margins - More accessible in larger cities
In a typical grocery store there between ________-_________ items in stock.
30,000 - 40,000
Developing a retail strategy consists of implementing the:
6 p's
Conventional supermarkets only sell _______% of food sales now
60
(-5) Elasticity means:
A 1% decrease in price will produce a 5% increase in demand
Assume the demand for electricity, a necessity with few substitutes, is −0.2. If the electric company raised its rates by 10 percent, we would expect
A 2% decrease in quantity demanded
A coupon for free milk on a box of Cheerios is a __________ offer.
A Premium
AIDA Model
A common model of the series of mental stages through which consumers move as a result of marketing communications: Stages: 1. Awareness 2. Interests 3. Desire 4. Action
Sales Orientation
A company objective based on the belief that increasing sales will help the firm more than will increasing profits (e. Tide or health club -- more members, more market share) - Some believe it better reflects their success in the market - OVERALL Market share
Customer Orientation
A company objective based on the premise that the firm should measure itself primarily according to whether it meets its customers' needs - How it can ADD VALUE to its products or services (e. CarMax -- no haggle car buying)
Competitor Orientation
A company objective based on the premise that the firm should measure itself primarily against its competition
Profit Orientation
A company objective that can be implemented by focusing on target profit pricing, maximizing profits, or target return pricing
Premium Pricing
A competitor-based pricing method by which the firm deliberately prices a product above the prices set for competing products to capture those consumers who always shop for the best or for whom price does not matter
Franchising
A contractual agreement between a franchisor and a franchisee that allows the franchisee to operate a business using a name and format developed and supported by the franchisor - Most COMMON vertical contractual system
Lagged Effect
A delayed response to a marketing communication campaign - generally takes several exposures and makes it more difficult to measure
Coupons
A discount on the price of specific items when they're purchased (at P-o-P) - CVS coupons -- use data to generate useful coupons for customers
Pick ticket
A document or display on a screen in a forklift truck indicating how much of each item to get from specific storage areas
Distribution Center
A facility for the receipt, storage, and redistribution of goods to company stores or customers - may be operated by retailers, manufacturers, or distribution specialists
Competitive Parity
A firm's strategy of setting prices that are similar to those of major competitors
Exclusive Distribution Intensity
A form of distribution achieved by screening dealers to eliminate all but a few in any single area - Geographically limited or limited to few retailers - Firms starting up grant exclusivity to incentivize markets to them and sell where there is less competition
Sweepstakes
A form of sales promotion that offers prizes based on a chance drawing of entrants' names - Buy/fill out form -- no other effort required (luck/chance)
Pricing Strategy
A long-term approach to setting prices for the firms' products
Pure Competition
A market structure characterized by an extremely large number of sellers, none strong enough to significantly influence price or supply
Indirect Marketing Channel
A marketing channel containing one or more intermediary levels; When company does not buy in big enough quantities to make it cost effective - More prevalent in less developed economies
Independent (conventional) Marketing Channel
A marketing channel in which several independent member — a manufacturer, a wholesaler, and a retailer — each attempts to satisfy its own objectives and maximize its profits, often at the expense of the other members.
Retailers' Cooperative
A marketing channel intermediary that buys collectively for a group of retailers to achieve price and promotion economies of scale. - It is similar to a wholesaler, except that the retailer members have some control over, and sometimes ownership of, the cooperative's operations. - Manage price THROUGH the channel
Direct Marketing Channel
A marketing channel that has no intermediary levels - Goes directly to the buyer, no middle man (e. Boeing selling planes to jet blue) which helps to increase its own margins - Seller (typically) = manufacturer - High tech + advancements necessary for the workplace
Price Elasticity of Demand
A measure of how changes in prices will affect demand (% change in QUANTITY / % change in PRICE) (New-old/old)
Advertising
A paid form of communication delivered through media from an identifiable source about an organization, product, service, or idea, designed to persuade the audience in action - Now or Later
Status Quo Pricing
A pricing objective that maintains existing prices or meets the competition's prices
Maximizing Profits
A profit strategy that relies primarily on economic theory term-245 - Mathematical model that captures all the factors required to explain and predict sales, profits, and price at which its profits are maximized.
Viral Marketing Program
A promotional strategy that encourages people to pass along a marketing message to other potential consumers
Quantity Discount
A reduced price based on the amount that is purchased (Higher quantity = higher discount)
Co-op Advertising
A sales promotion in which a manufacturer will defray some costs in exchange for promotion
RFID Tag
A small computer chips on merchandise that can be read by a scanner, automatically identifying the contents of a carton. - Checkers no longer have to manually check the items to ensure that what was ordered was actually received.
Convenience Store
A small store, located near a residential area, that is open long hours seven days a week and carries a limited line of high-turnover convenience goods - Charge more for fresh foods
Drugstores
A specialty store that concentrates on health and personal grooming merchandise, though pharmaceuticals may represent more than 60 percent of its sales - Drive through options or curbside
Intensive Distribution Intensity
A strategy designed to get products into as many outlets as possible
Push Strategy
A strategy designed to increase demand by motivating sellers to highlight the product, rather than the products of competitors, and thereby push the product onto consumers. Sellers = wholesalers, distributors, or salespeople
Target Return Pricing
A strategy to produce a specific return rate on their investments (rate at which profit is generated relative to investments) - Usually as a percentage of sales - LESS concern with absolute level of profit
High/Low Pricing Strategy
A strategy which relies on the promotion of sales - Reduce prices to encourage purchases
Advertising Plan
A subsection of the firm's overall marketing plan that: - Explicitly analyzes the marketing + advertising situation - Identifies the OBJECTIVES (part of step 2) - Clarifies a specific strategy - indicates how the firm can determine success of campaign (plan used as a measure of success)
Vertical Marketing Channel
A supply chain in which the members act as a unified system in getting the product to consumers
Administered Vertical Marketing Channels
A supply chain system in which there is no common ownership and no contractual relationships - the DOMINANT channel member controls the channel relationship
Corporate Vertical Marketing System
A system in which the parent company has complete control and can dictate the priorities and objectives of the supply chain - It may own facilities such as manufacturing plants, warehouse facilities, retail outlets, and design studios.
Cross-docking
A technique whereby goods arriving at a warehouse from a supplier are unloaded from the supplier's truck and loaded onto outbound trucks, thereby avoiding warehouse storage. - Prepackaged merchandise going into staging area rather than storage
Horizontal Channel Conflict
A type of channel conflict in which members at the same level of a marketing channel, for example, two competing retailers or two competing manufacturers, are in disagreement or discord, such as when they are in a price war.
Vertical Channel Conflict
A type of channel conflict in which members of the SAME marketing channel, for example, manufacturers, wholesalers, and retailers, are in disagreement or discord.
Reference Power
A type of marketing channel power that occurs if one channel member want to be ASSOCIATED with another channel member - The member whom the others wish to be associated with have the power and can get them to do what they want
Legitimate Power
A type of marketing channel power that occurs if the channel member exerting the power has a CONTRACTUAL AGREEMENT with the other channel member that requires the other channel member to behave in a certain way.
Information Power
A type of marketing channel power that occurs if the channel member exerting the power to provide or withhold information from other channel member and use this to influence the other channel members' actions
Expertise Power
A type of marketing channel power that occurs when a channel member uses expertise as LEVERAGE to influence the actions of another channel member
Coercive Power
A type of marketing channel power that occurs when the channel member exerting the power THREATENS to punish or PUNISHES another channel member for not undertaking certain tasks (e. delaying payment for late delivery)
Reward Power
A type of marketing channel power that occurs when the channel member exerting the power offers rewards to gain power, often a monetary INCENTIVE, for getting another channel member to do what it wants it to do
Specialty Stores
A type of retailer that concentrates on a limited number of complementary merchandise categories in a relatively small store - Expanding online
Mobile Task Management
A wireless network and a mobile device that receives demand notification and enables a speedy response.
Marketing Channels ________ value
ADD - ALL members add value for the customer as well the others within the supply chain (e. STOVE --> materials - builder - seller - transport - *CONSUMER*) - Each member provides a specialized role
ADVANTAGES vs. DISADVANTAGES of Internet/mobile as a medium:
ADVANTAGES: - Can be linked to detailed content - Highly flexible and interactive - Allows for specific targeting DISADVANTAGES: - Becoming cluttered - Ad may be blocked by software on computer
ADVANTAGES vs. DISADVANTAGES of Newspapers as a medium:
ADVANTAGES: - Flexible - Timely - Able to localize DISADVANTAGES: - Expensive in some markets - Ads have very short lifespan
ADVANTAGES vs. DISADVANTAGES of Direct Marketing as a medium:
ADVANTAGES: - Highly Targeted - Allows for personalization DISADVANTAGES: - Cost can vary depending on type of direct marketing used - Will be more expensive if form of media is newer
ADVANTAGES vs. DISADVANTAGES of Outdoor/billboard as a medium:
ADVANTAGES: - Relatively inexpensive - Offers opportunities for repeat exposure DISADVANTAGES: - Not easily targeted - Placement problems in some markets - Exposure time is very short
ADVANTAGES vs. DISADVANTAGES of Magazines as a medium:
ADVANTAGES: - Very targeted - Subscribers pass along to others DISADVANTAGES: - Relatively inflexible - Takes time for a magazine to be available
ADVANTAGES vs. DISADVANTAGES of Television as a medium:
ADVANTAGES: - Wide Reach - Incorporates both sound and video DISADVANTAGES: - High Cost - Several channels and many programs - May increase awareness of competitors products
ADVANTAGES vs. DISADVANTAGES of Radio as a medium:
ADVANTAGES: - Wide Reach - Relatively inexpensive - Can be selectively targeted DISADVANTAGES: - No video (limited presentation) - Less focused attention (than TV) - Exposure periods are shorter
Power (in supply chain)
Ability to dictate members at different levels of distribution
What is Advertising's objective in simple terms?
About getting consumer's attention
What does reference pricing help do?
Add value for the customer - Makes the customer feel that they are receiving a bargain
Cost-plus (markup) pricing
Adding a standard markup to the cost of the product (Ex. $10 Cost-price times 20% mark-up --> $12 Cost-plus)
Lift
Additional sales caused by advertising
ASN
Advanced Shipping Notice - electronic document that the supplier sends the retailer in advance of a shipment to tell the retailer exactly what to expect in the shipment
Today, when a customer orders merchandise from an online vendor, the vendor usually sends an immediate order confirmation message by e-mail. Usually within a day or two, a second message arrives stating that the order is in the mail. This second message is a type of
Advanced Shipping Notice (ASN)
_____________ is commonly mistaken for marketing, because it is the most viable form of marketing. However, the terms are NOT synonymous
Advertising
Flighting Advertising Schedule
Advertising schedule implemented in spurts, with periods of heavy advertising followed by periods of no advertising - Products with a fluctuating demand
Institutional-Focused Advertising
Advertising that promotes a company, corporation, business, institution, or organization - NOT intended to sell prod./services
Emotional Appeals
Aims to satisfy consumers' emotional desires rather than their utilitarian needs - Bond creation between the brand and the customer
Feedback Loop
Allows the receiver to COMMUNICATE with the sender and thereby informs the sender whether the message was received and decoded properly
Which company is known for being particularly strong in competitive-based pricing?
Amazon Ex. Buying Wholefoods --> bringing in more customers and profit by lowering prices
Objective-and-Task method
An IMC budgeting method that determines the cost required to undertake specific tasks to accomplish communication objectives - process entails setting objectives, choosing media, and determining costs
Improvement Value-Method
An estimate of how much more (or less) consumers are willing to pay for a product relative to other comparable products - Conduct research and surveys with customers to help calculate - Attributes (weighted) to find overall improvement
Quick Response (QR)
An inventory management system used in retailing; merchandise is received just in time (JIT) for sale when the customer wants it - Pulls items and verified availability - MAXIMIZE inventory holdings (deliver less merchandise on a more frequent basis than in traditional inventory systems.) A.K.A JIT
Noise
Anything that interferes with, distorts, or slows down the transmission of information - Noise can be competing messages, lack of clarity, or a flaw in the medium
Price Skimming
Appeals to these segments of consumers who are willing to pay the premium price to have the innovation first
Pretesting of Ads
Assessments preformed on an ad PRIOR TO its release - Ensure that the elements are working in an integrated fashion + doing what they need to do
An everyday low pricing strategy stresses the continuity of retail prices....
At a level between the regular price and the deep-discount sales price of competitors
Why can measuring the sales impact be challenging?
Because there are MANY influencers other than advertising that affect consumer behaviors: - Competitors offerings - Economic conditions of the target market - Availability in stores - Weather ETC
Interest (AIDA)
Begin developing a positive association - Pay more attention, especially if it's relevant to you Interest through awareness
Category Specialist
Big box retailers that offer a narrow but deep assortment of merchandise - Most = self-service Category dominance (e. Ikea, Staples, etc.)
Sophia could not afford expensive furnishings, but wanted a stylish home. After researching many options, she went to a local Target to purchase the trendy lamps, pillows, and art featured on its ads and website. As a consumer, which retailing challenge was Sophia likely responding to?
Brand image consistency
Private-label brands
Brands developed and marketed by a retailer and available only from that retailer - Also called store brands (e. Wild Fable --> only sold at target)
Department Retailers
Broad variety + assortment, customer services, and organize the store into DEPARTMENTS (e. Nordstroms, Macy's, etc) - About 100,000 items carried - Said to be the end of department stores
Rule-of-Thumb method
Budgeting methods that base the IMC budget on either: - the firm's share of the market in relation to competition - a fixed percentage of forecasted sales or - what is left after other operating costs and forecasted sales have been budgeted - Determined PRIOR to communication activities
Lead Pricing
Build store traffic by aggressively pricing + advertising regularly priced items at or just about the store's cost (Ex. Happy Hour)
ATF
Bureau of Alcohol, Tobacco, Firearms, and Explosives Jurisdictions: - regulation of alcohol advertising - False/misleading information
Personal selling is an especially important part of IMC in
Business-to-Business setting
Profits must also consider __________, not just price
COSTS
Strategic (Partnering) Relationships (in Marketing Channels)
Channel members are committed to maintaining relationships and investing in opportunities that benefit both parties
The proliferation of media has caused increasing complexity and types of _______________.
Channels - Promotion requires creative ideas
Niche Media
Channels that are focused and generally used to reach NARROW segments - Often with unique demographic characteristics or interests
Pulsing
Combines the continuous and flighting schedules by maintaining a base level of advertising but increasing advertising intensity during certain periods
Cause-Related Marketing
Commercial activity in which businesses and charities form a partnership to market an image, a product, or a service for their mutual benefit (e. Sunblock partners with American cancer society)
Direct Marketing
Communicating directly with target customers to generate a response and/or a transaction
Informative Advertising
Communication used to create and build brand awareness Ultimate goal: moving the consumer through the buying cycle to a purchase
Persuasive Advertising
Communication used to motivate consumers to take action
Reminder Advertising
Communication used to remind consumers of a product or to prompt repurchases
Monopolistic Competition
Competition that occurs when there are many firms that sell closely related but not homogeneous products - Substitutes but not perfect substitutes (e. Rayban, Oakley -- same but different) - May be competing for different segments of the market
When Greenbelt Construction Company began building houses in a large subdivision with many other builders, the company priced its homes slightly higher than its competitors and promoted the added quality features found in Greenbelt's homes. Greenbelt was using a(n) ________ pricing strategy.
Competition-based (higher prices BASED ON what the competitors offer)
Substitution Effect
Consumers ability to substitute other products for the focal brand and increase price elasticity of demand for the focal brand - More substitutions = GREATER elasticity
Target Audience
Consumers designated by research as its focal market
TRUE or FALSE It is easier to lose current customers with a price increase than it is to gain new customers with a price decrease.
Consumers show more sensitivity to price increases than to price decreases. - REMEMBER: it is always difficult and expensive to gain customers
In ______________ or ______________ marketing channels, there are significant incentives to establish a strategic relationship, even without contracts or ownership relationship (corporate).
Conventional ; Administered (vertical)
If the marketing channel plans to run smoothly, it should:
Coordinate all its efforts - Conflicting goals can result in channel conflict
Dispatcher
Coordinates deliveries to the distribution center
Event Sponsorship
Corporations support various activities usually in the cultural or sports and entertainment sectors (e. Farmer's Open)
Retailers use ________ because they believe their use will induce customers to try new products, convert first-time users to regular users, increase purchases, and protect market share.
Coupons
Objectives of Sales Promotion
Create VALUE for both the customer and the firm
J. Crew teaming up with several famous brands, including LaCoste and Timex, to offer exclusive products in the J. Crew stores and on its website is an example of ________
Cross-Promoting
________ is when vendors ship merchandise prepackaged in the quantity required for each store to the distribution center.
Cross-docking
Julia's is an upscale women's clothing store. Prices are based on customers' beliefs about the value of the clothing. The store focuses on a limited target market and provides excellent customer service. Julia's is using a _______ pricing strategy.
Customer-oriented
If the demand curve has a downward slope, then demand will _________ when price increases.
Decrease
General Merchandise Retailers
Department Stores Specialty Stores Discount Stores Category Specialists Off-Price Retailers Warehouse Clubs Value Retailers
Penetration pricing helps to __________ competition from entering the market.
Deter
Cost-Based Pricing Method
Determine the final price to charge by starting with the cost - All costs must be identified - Based on AVERAGE of costs
Channel Members (5 C's)
Different price perspectives depending on the type of channel member (Manufacturer, wholesaler, retailer)
Sophie made pies and sold them from her food truck to local businesses. This is an example of a(n)
Direct Marketing Channel
For Price Skimming, after the high paying market has been saturated, ______________ the price to capture more people.
Discount
When is informative advertising used?
EARLY stages of a products life cycle - When there is little known about a product Retail --> upcoming sales or new merchandise
In terms of a pricing strategy, _____ adds value by reducing consumers' search costs; consumers can spend less of their valuable time comparing prices, including sale prices, at different stores.
EDLP Everyday Low Prices
Walmart uses an ____________ (pricing) strategy.
EDLP - Everyday Low Price
Elastic vs. Inelastic Demand
ELASTIC = Price SENSITIVE - Small changes will affect demand - Less than -1 INELASTIC = NOT sensitive - No effects from a small change in price
EDI
Electronic data interchange - The COMPUTER-to-COMPUTER exchange of business documents from a retailer to a vendor and back - Quick communication, reduce lead, immediate information updates, and less errors
Contribution per unit
Equals the price minus the variable cost per unit. - Variable used to determine the break-even point IN UNITS.
Price Lining
Establishing a price floor and price ceiling for entire line then setting price points in between - To represent distinct difference in quality (E. Basic/Economy/First Class)
Posttesting of Ads
Evaluate a campaign's effectiveness AFTER it has run - Sales - Communication impact
________ are likely to target low-income consumers who demand national brands, but cannot afford to buy large-sized packages.
Extreme-value retailers
TRUE or FALSE: In supply chain, customers will send and receive information from stores and manufacturers.
FALSE - The information flows in the supply chain do not include customer participation.
Public relations is the component of IMC that has received the greatest increase in aggregate spending.
FALSE Direct marketing has received the greatest increase in aggregate spending recently.
TRUE or FALSE: Retailers who advertise that they sell at wholesale prices are wholesalers.
FALSE Wholesalers buy products from manufacturers and resell them to retailers or industrial or business users. Even retailers who claim that they sell at wholesale prices are still considered to be retailers if they sell to the final customer.
TRUE or FALSE: Smaller firms typically perform channel functions by themselves
FALSE BIGGER firms tend to perform channel functions by themselves
True or False: Puffery is always illegal
FALSE; A certain amount of puffery is acceptable
Total Costs (TC)
FC + VC - Fixed plus variable
FCC
Federal Communications Commission; regulates interstate and international communications by radio, television, wire, satellite and cable Jurisdictions: - Enforces restrictions on broadcasting (lotteries/gambling, cigarettes, cigars, e-cigs) or that might perpetuate fraud - Prohibits obscene, indecent, or profane language etc.
FTC
Federal Trade Commission; enforces consumer protection laws Jurisdictions: - Enforces truth in advertising laws - Defines deceptive and unfair advertising practices etc. - For mass media advertising enforcement
Slotting Allowance
Fees paid to retailers simply to get new products into stores or to gain more or better shelf space for their products - Argued to be unethical because it is a disadvantage to small brands
Deceptive Reference Prices
Fictitious higher "regular" prices make sale prices seem better
Costs (5 C's)
Firms must understand cost structure to determine the degree of profitability at different prices - Generally should NOT be based on cost -- consumers determine perceived value
Service Retailers
Firms that primarily sell services rather than merchandise (coffee, banks, fastfood, hotels, airlines, nightclubs, gardering/pool maintenance etc..)
What are the 7 types of Information flows through marketing channels?
Flow 1: Customer --> store - UPC used 13 digit code - RFID tags (to replace UPC in future) Flow 2: Store --> buyer - Way merchandise is displayed - Upcoming promotions Flow 3: Buyer --> Manufacturer - Type of stuff bought tells them what to produce Flow 4: Store --> Manufacturer - Purchasing info sent to manuf. (from store) for new orders to be placed Flow 5: Store --> Distribution Center - Coordinate deliveries and check inventory Flow 6: Manufacturing --> Distribution Center --> Buyer - ASN -- Advanced Shipping Notice
Customers (5 C's)
Focus on customers reactions to different prices - Want VALUE -- price is only half of the equation
FDA
Food and Drug Administration; The agency that is responsible for regulation of Food, supplements, drugs, cosmetics, medical devices, biologics, and blood products Jurisdiction: - Fair/truthful labeling - Safe packaging - Disclosure statements etc
Mass Media
Form of communication that reaches a large number of anonymous audience members
What is the most common example of a contractual vertical system?
Franchising
How is traditional media measured?
GRP
What value do personnel add to retailers?
Good sales people help influence buyer (especially with expensive or complicated items - e. Apple)
How is success measured when determining a target audience?
HOW WELL a target audience can be identified
Elements of Advertisements + their purposes
Headline - Identifier; large text designed to draw attention (Subhead: provides information) Body copy - Main portion of text for the ad Brand Elements - Characteristics that identify the sponsor for the ad
If a firm places their prices much higher than the competitors, they want to signal that they offer _________ products.
Higher/better quality products or some other valued benefit
Brand Awareness (AIDA)
How quickly or easily a given brand name comes to mind when a product category is mentioned - Aided recall - Top-of-Mind
Relevance
How useful an ad message is to the consumer doing the search
Competition (5 C's) What are the four levels on competition?
I. Monopoly II. Oligopoly III. Monopolistic Competition IV. Pure Competition - Each had its own challenges and opportunities for setting pricing
How can Price Discrimination be LEGAL?
If it is accessible to all customers Ex. Senior/Child discounts
Conflict will be more pronounced if the channel members are ______________ entities.
Independent
Contractual Vertical System
Independent production and distribution firms integrate their efforts on a contractual basis to obtain economies of scale and coordination to reduces conflict
The price elasticity of demand for a specific brand of deodorant is −.9. The market for this product is considered:
Inelastic
Appeals in advertising
Informational or emotional
Pricing strategy is an _________ effort and based on the _____________.
Integrated ; 5 C's
Ch. 18 Flash
Integrated Marketing Communications
IMC
Integrated Marketing Communications - Represents the promotion dimension of the four P's - encompasses a variety of communication disciplines - To provide CLARITY, CONSISTENCY, and MAX. COMMUNICATION IMPACT
Wholesalers
Intermediaries who help to move goods from manufacturers and resell them to retailers -Buy, take title to, often store, and physically handle goods
___________ has made finding coupons easier.
Internet
Gray Market Pricing
Irregular but not necessarily illegal pricing methods
A strategy of setting prices based on how customers develop their perceptions of value can often be the most effective pricing strategy, especially if the strategy:
Is supported by consistent advertising and distribution strategies
Data Warehouse
Keep track of how the firm is doing
A Corporate Vertical Marketing System has the _______ potential chance of conflict
LEAST - All under the same operation name; same goals, same company
The more sophisticated a channel structure is, the _______ likely to have intermediaries.
LESS
With vertical marketing channels, there is increased formalization which means ________ conflict.
LESS
The sender (a lot/little) of control in how the receiver will perceive the message
LITTLE control
Retailers have realized that convenience is a key ingredient to success, and an important aspect of this success is __________
LOCATION (e. Starbucks -- everywhere)
Contests and Sweepstakes
LONG term CRM + loyalty
Warehouse Club
Large retailers with an irregular/limited assortment, low service levels, and low prices that often require membership for shoppers. - Stock-up - Warehouse sales increasing with e-commerce sales (especially in heavily populated areas) (e. Costco)
Supercenters
Large stores combining full-line discount stores with supermarkets in one place (185,000 ft) - One stop shopping experience (e. supertarget)
To determine how firms account for consumers' preferences when they develop pricing strategies, we must first . . .
Lay the foundation of traditional economic theory to help explain: - how prices are related to demand (consumers' desire for products) - how managers can incorporate this into their pricing strategies
Supermarket chains often implement _____, a pricing tactic of selling leading brands of products below their own cost to build store traffic.
Leader Pricing - Same items at lower (store) cost
Selective Distribution Intensity
Lies between others; middle way - Few retailers to help maintain image
Children's Television Act of 1990
Limits the number of commercials aired during children's viewing hours
The difference between Pricing STRATEGIES vs. TACTICS are:
Long-term vs. Short-term
Allowances
Lowers the final cost in return for specific behavior - Lower final cost to channel members
bait and switch
Lure customers to store with low priced item but then switch and bargain them to buy the higher priced one - Might disparage and unfavorably compare the lower model
Distribution Centers are good if retailers have _________ outlets
MANY
____________ ads are pushing out traditional ads.
MOBILE
MSRP
Manufacturer's Suggested Retail Price
Firms influence consumers actions through ______________ ____________
Marketing Communication
Price Bundling
Marketing two or more products in a single package for a special price - Buy less desirable prod at the same time as a more desirable one - Encourage to buy new product
What is the KEY to successful pricing?
Match the product (price) with the consumer's perception of value. - Marketers should view pricing decisions as a strategic opportunity to create value rather than as an afterthought to the rest of the marketing mix.
Frequency
Measure of how often the audience is exposed to a communication within a specified period of time
Creating advertisements is the process of transforming....
Message/words onto some form of a medium
What is an industry that is going vertical in the US?
Milk - More people growing concerned with where milk comes from - Downward price trend of milk --> bring back profit margin to farms
Tracking of Ads
Monitoring key indicators while the ad is running to shed light on any problems with the message or medium
What do strategic/partnering relationships require?
Mutual Trust - won't take advantage - honesty, reliability Open communication - Share info, develop forecasts, and coordinate deliveries COMMON GOAL (!) - Increase commonality Interdependence - intricately linked, long-term relationships developed Credible Commitments - Fulfill promises
Innovation is used as a key determinant of price strategy when it involves _______ products
NEW
Horizontal Price Fixing
Occurs when competitors that produce and sell competing products collude, or work together, to control prices, effectively taking price out of the decision process for consumers.
Aided Recall
Occurs when consumers recognize a name that has been presented to them; after its been presented
Oligopolistic Competition
Occurs when only a few firms dominate a market
Vertical Price Fixing
Occurs when parties at different levels of the same marketing channel (e.g., manufacturers and retailers) collude to control the prices passed on to consumers.
Because of the way ________ buy merchandise, customers can never be confident that the same merchandise will be in stock each time they visit the store or website.
Off-Price Retailers
Seasonal Discounts (for businesses)
Offered BEFORE the normal buying season - Helps businesses plan production schedules for the busy months
Advertising Allowance
Offers a price reduction to channel members if they agree to feature the manufacturer's product in their advertising and promotional efforts - Legal if advertising is equal for all customers; cannot favor buyers
Premium
Offers an item for free or at a bargain price to reward some type of behavior, such as buying, sampling, or testing (e. toys inside of the cereal box)
Channels of IMC Strategy
Offline/Interactive: - Personal selling - Sales Promotion (e. Contest) - Direct Marketing (e. telemarketing) Offline/Passive: - Advertising - Sales Promotion (e. coupons) - Public Relations - Direct Marketing (e. catalogs) Online/Interactive: - Direct Marketing (e. mobile) - Online Marketing (e. blogs, social media) Online/Passive - Direct marketing (e. Email marketing)
Monopoly
One firm provides the product or service in a particular industry -- less price competition - Are regulated and can be dismantled by antitrust laws to protect customers from paying overly high prices for goods and services
In a retail supply chain, the ________ records the purchase information and electronically sends it to the corporate office.
POS terminal
________ is the ONLY element of the marketing mix that does not generate cost. It is also the hardest/easiest of the 4 P's to manage.
PRICE ; Hardest
PR Tools
PUBLICATIONS - Inform about activities and highlight expertise VIDEO and AUDIO - Highlight org. or support marketing efforts ANNUAL REPORTS - Financial data for investors + others to know about the activities of the firm MEDIA RELATIONS - Generate news coverage of the organization's activities or P/S ELECTRONIC MEDIA - Can contain all previous tools mentioned
P&G is __________ with Walmart, which makes it challenging to convince Walmart to choose other suppliers.
Partnered
Manufacturers will make __________ with retailers to help meet __________________. And Retailers need to know customer _______________ in order to make correct decisions about which manufacturer to use.
Partnerships ; customers needs Preferences
Mario is the first retailer in town to sell games for Sony's latest version of its PlayStation gaming console. Mario wants to quickly capture as much of the market for the new games as possible. Mario will likely use a ________ pricing strategy.
Penetration
"Buy now, Pay later" ads would be classified as having a _____________ objective
Persuasive
What kind of products or services do not follow a downward sloping demand curve?
Prestige Products/Services (e. Gucci T-shirt -- associated with exclusivity) - Higher prices lead to higher quantities sold (up to a certain point)
Robinson-Patman Act
Prevents unfair price discrimination by ensuring that the seller offer the same price terms to customers at a given level of trade
What can oligopolies result in?
Price Wars - Two or more firms competing by lowing prices; back and fourth Predatory Pricing - Firm sets very low prices with the intent of driving out business/competition (is illegal in the United States under both the Sherman Antitrust Act and the Federal Trade Commission Act)
Competition-Based Pricing Method
Pricing influenced primarily by competitors' prices ("attempts to reflect the way the firm wants consumers to interpret their prices compared to consumer prices")
Integrated marketing communications (IMC) represents the ________ element in the six Ps of a firm's marketing mix.
Promotion
Sami was asked to work on a project identifying important events where celebrities might wear the fashions. She soon realized that this activity was part of ________, directly related to marketing.
Public Relations
PSA
Public Service Announcement - Nonprofit, civic group, religious organization, trade association, or political group - For the BETTERMENT of society (not sale of P/S)
Standardized products such as grains and mineral products, where consumers perceive them as substitutable, are characteristic of
Pure Competition
Anne's Pita Bread Chips offers free POP (point-of-purchase) displays to retailers ordering its product. Anne's is using a ________ strategy.
Push
Product Placement
Putting products into TV shows and movies where they will be seen - Has become something natural for Apple -- don't even have to ask
Strong brand loyalty _________ price elasticity of demand
REDUCES - Consumers will likely stay with the brand, even if there are price changes
Cash Discount
Reduces the invoice cost if the buyer pays the invoice prior to the end of the discount period
Markdowns
Reductions retailers take on the initial selling price of the product or service
Experience Curve Effect
Refers to the drop in unit cost as the accumulated volume sold increases (Sales grow, cost drops) - Allow further price reductions
Dynamic/Individualized Pricing
Refers to the process of charging different prices for goods or services based on the type of customer, time of the day, week, or even season, and level of demand (e. Baseball tickets sold on StubHub -- teams can rationalize and increase their revenues)
Rebates
Refunds paid to consumers after a purchase Hassle factor: 90% of customers never claim their rebates - Rolled out or shut off quickly
For marketers to advertise a price as their ________ price, the Better Business Bureau recommends that at least 50 percent of the sales of a product occur at that price.
Regular (for reference pricing)
How is cost-based pricing determined?
Relevant costs and profit are added then divided by total demand
Leasing
Renting a product while ownership title remains with the lease grantor - Right to use a product for a specified amount of time
Value-Based Pricing requires lots of __________ to help understand how customers will react across segments. It should also monitor __________ in consumer attitudes.
Research Changes
Planners (for Managing Inbound Transportation)
Responsible for the allocation of goods in stores; financial planning + analysis of merchandise
Full-line Discount Stores
Retailers that offer low prices, limited service, and a broad variety of merchandise (about VALUE) - Fashionable - Low-Price - Pleasant environment
Limited-Assortment Supermarkets
Retailers that offer only one or two brands or sizes of most products (usually including a store brand) and attempt to achieve great efficiency to lower costs and prices. - 1,500 SKU's
Ch. 17
Retailing and Omnichannel Marketing
ROMI
Return on Marketing Investment - The profitability returned to the business based on funds spent on marketing [Gross Margin - Expenditure]/Expenditure x 100%
Goal of IMC
Right message, to the right audience, through the right communication channel, to get long-term customers/transactions (rather than short/one time)
Continuous Advertising Schedule
Runs steadily throughout the year and therefore is suited to products and services that are consumed continually at relatively steady rates and that require a steady level of persuasive or reminder advertising - STEADY DEMAND products
Free samples and Point-of-Purchase displays
SHORT term sales building
Sales Promotions vs. Advertising
Sales Promotions = SHORT TERM Advertising = LONG TERM (both can generate the opposite effect, however)
Contests
Sales promotions in which consumers compete against one another and must demonstrate skill or effort to win.
Loyalty Programs
Sales promotions that allow consumers to accumulate points or other benefits for doing business with the same company - Incentivize multiple purchases
SEM
Search Engine Marketing (e. Sponsored links on Google)
Predatory Pricing
Selling a product below cost to drive competitors out of the market - Constraints free trade - Unfair competition - May create an oligopoly (E. Uber in SF)
Omnichannel Strategy
Selling in more than one channel (e. stores, internet, catalogs)
Carol's Studio, located in a shopping mall, offers Zumba dance classes for all ages. Carol's Studio is known as a(n)
Service Retailer
Penetration Pricing
Setting a low initial price on a new product to appeal immediately to the mass market
Value-Based Pricing
Setting the price at a level that seems to the customer to be a good price compared to the prices of other options - Overall value perceived by the customer
Marley designs and manufactures specialty furniture. She has a number of unique products but can only produce in limited quantities. Marley will probably not use a penetration pricing strategy because
She could not meet rapid rise in demand
Pricing Tactics
Short term response to competitive threat - Broadly accepted method of calculating a final price for a customer that is short-term in nature
Deals
Short-term price reductions that can take place in several forms: - Featured price - Buy-one-get-one - Alter perception of value (lower risk to try P/S)
Deceptive or Illegal Price Advertising
Should never deceive customers to the point of harm 1. Deceptive Reference Prices 2. Loss-Leader pricing 3. Bait-and-Switch
Company Objectives
Show how the firm intends to grow - Goals should spill down pricing strategy - Prod/Services should show how the firm intends to grow
Demand Curve and Pricing
Shows how many units of a product or service consumers will demand during a specific period of time at different prices - Assumes all else is unchanged - Enables examination of prices in terms of demand and the firm's objectives (relationship between price and demand)
If a firm places their prices close to a competitors, they want to signal that they offer _________ products.
Similar
Sales Promotion
Special incentives or excitement-building programs that encourage consumers to purchase
Each objective of advertising must be _________ and __________
Specific ; measurable
Ch. 14 Terms
Start of ch 14 terms Pricing Concepts for Capturing
Seasonal Discounts
Stimulate sale during the off-peak season (Ex. ski lifts, bathing suits)
Ch. 15 Flash
Strategic Pricing Methods + Tactics
EDLP (everyday low pricing)
Strategy companies use to emphasize the continuity of their retail prices at a level somewhere between regular, nonsale price and the deep-discount sales prices competitors may offer
When the price for Blu-ray players dropped (aka Blu-ray demand increases), the demand for DVD players went down, so DVD players and Blu-ray players are:
Substitute products
Ch. 16 Start
Supply Chain and Channel Management chapter --- flashcards on
TRUE or FALSE: Social shopping can include e-mailing customer to inform them of a new product.
TRUE
TRUE or FALSE: Wholesalers can also be retail distribution centers
TRUE - Can be BOTH a retailer and a wholesaler
TRUE or FALSE: American Airlines just reduced its fares for summer flights by $100. Delta Airlines changes its pricing structure and reduces its flights by $100 as well. Delta is employing status quo pricing.
TRUE - If a firm uses status quo pricing, it changes prices only to meet those of the competition
TRUE or FALSE: For frequently purchased goods in the maturity stage (e. soda), sales volume offers a good indicator of advertising effectiveness
TRUE - If their sales (and other environmental factors) are relatively stable, we can attribute these changes in the marketing mix to advertising (:LIFT)
TRUE or FALSE: Marketing channel management and supply chain management are virtually the same.
TRUE - Marketing Channel Management IS Supply Chain Management
TRUE or FALSE It is primarily the retailer's responsibility to make sure customers' expectations are fulfilled.
TRUE Since it is generally the retailer who interacts directly with the customer, the retailer is the one who must fulfill customer expectations.
TRUE or FALSE: Marketing channel management adds value because it gets products to customers efficiently, quickly, and at low cost.
TRUE each member adds value
Loss Leader Pricing Strategy
Taking prices below (or just above) the store cost
A _______ strategy involves accurately measuring all the factors needed to predict sales and profits at various price levels, so that the price level that produces the highest return can be chosen.
Target Return (key word: return)
Common sector that uses Price Skimming?
Technology (Ex. Apple --> new iPhone comes out, old model lessens)
Puffery
The LEGAL exaggeration of praise, stopping just short of deception, lavished on a product
M-commerce
The ability to conduct commerce using a mobile device for the purpose of buying or selling goods or services - Requires cohesive coordination
Media Buy
The actual purchase of airtime or print pages - Tends to be the largest expense
Social Marketing
The application of marketing principles to a social issue to bring about attitudinal and behavioral change among the general public or a specific population segment - Broadcasters may give free airtime due to the nature of this
Extreme brand loyalty customers are willing to pay higher prices because:
The brand still offers supreme value over the others
Price Discrimination
The business practice of selling the same good at different prices to different customers
Income Effect
The change in consumption resulting from a change in real income ; shifts of demand from low to high priced products or vise versa Increase = Higher priced alternatives Decrease = low priced products
Puffery is acceptable when:
The consumer can tell that the truth is being stretched
Atmospherics
The controllable characteristic within the store that are intended to influence customers' propensity to purchase
Top-of-Mind Awareness
The highest level of awareness, occurs when consumers mention a specific brand name first when they are asked about a product or service - EVOKED set of brands
Distribution Intensity
The number of supply chain members to use at each level of the supply chain
Reach
The number of target consumers exposed to a commercial at least once during a specific period (usually four weeks)
Click-through-rate (CTR)
The number of times a user clicks on an online ad divided by the number of impressions
Impressions
The number of times an advertisement appears in front of the user
Presentation (6 Ps)
The option to develop a unique image (e. Apple)
Price
The overall sacrifice a consumer is willing to make - money, time, energy - to acquire a specific product or service
Cross-Price Elasticity
The percentage change in demand for product A that occurs in response to a percentage change in price of product B - Compliment = demands positively related - Substitute = demands negatively related
Share of Wallet
The percentage of the customer's purchases made from a particular retailer
Break-Even Point
The point at which the costs of producing a product equal the revenue made from selling the product - Revenues = costs
Price Fixing
The practice of colluding with other firms to control prices - Illegal under Sherman Antitrust act
Decoding
The process by which the receiver interprets the sender's message - What is RECEIVED
Encoding
The process of converting the sender's ideas into a message, which could be verbal, visual, or both. - What is SAID; conversion
Media Planning
The process of evaluating and selecting the media mix that will deliver a clear, consistent, and compelling message to the intended audience
Marketing Channel (Supply Chain) Management
The set of approaches and techniques firms employ to effectively integrate their: - suppliers - manufacturers - warehouses - stores - transportation Integrate their operations into a seamless operation - Right quantities, locations, times -- meet customers need efficiently
Retailing
The set of business activities that add value to products and services sold to consumers for their PERSONAL or FAMILY use - Includes products bought at stores, through catalogs, and over the Internet, as well as services like fast-food restaurants, airlines, and hotels.
There are many options available to consumers when it comes to breakfast cereals. So, if Kellogg's significantly increases the price of Rice Krispies, consumers are more apt to buy alternate cereals instead. This illustrates which concept?
The substitution effect
Personal Selling
The two-way flow of communication between a buyer and a seller that is designed to influence the buyer's purchase decision. - Can be B2B (especially important) or B2C
What is one problem in relying on price elasticity and demand curves when setting prices?
The way a product or service is marketed can have a profound impact on price elasticity
Reference Pricing
To compare actual selling price with savings (Ex. "regular"/"original" price displayed together with the discount price)
Disney is a brand that has ______________ brand awareness
Top-of-Mind awareness - Use power to promote product selling
Firms should analyze and manage __________ _____________ to achieve objectives/mission
Total Costs
Cost-of-Ownership Value-Method
Total cost of owning a product during its useful life Ex. A lightbulb - $1 for 1500 hours OR - $3 for 160,000 hours
Conventional Supermarket
Type of retailer that offers groceries, meat, and produce with limited sales of nonfood items, such as health and beauty aids and general merchandise, in a self-service format. - 30-40,000 SKU's
Action (AIDA)
Ultimate Goal of all marketing communications; get receiver to take action
Communicating with Consumers
Understand how to BEST target consumers; has become more complex
Uniform Delivery vs. Zone Pricing
Uniform: ONE rate charged Zone: Geographic division of delivery area
USP
Unique Selling Proposition - Differentiating a product by communicating its unique attributes - Often becomes "theme"/"slogan" Ex. Red Bull --> "gives you wings" or Oreo --> "milk's favorite cookie
USPS
United States Postal Service
Informational Appeals
Used in a promotion to help consumers make purchase decisions by offering FACTUAL information and strong arguments built around relevant issues - Encourage them to EVALUATE THE BRAND FAVORABILITY on the basis of the KEY BENEFITS it provides
Web-tracking software
Used to assess how much time viewers spend on particular web pages and the number of pages they view - Also may track which site they came from
Product-Focused Advertising
Used to inform, persuade, or remind consumers about a specific product or service
Target Profit Pricing
Uses price to stimulate a certain level of sales at a certain profit per unit - Profit = overriding concern
Social Shopping
Using the internet to communicate about product preferences with other shoppers
Firms must generate _________ for the customer in order to increase market share
VALUE
Passive and Interactive; Offline and Online
Various ways to market to consumers - P/I = what consumers have to do to receive the message (nothing/something)
VMI
Vendor Managed Inventory - An approach for improving supply chain efficiency in which the MANUFACTURER is responsible for maintaining the retailer's inventory levels in each of its stores. - Automatically notifies vendor when inventory reaches a pre-specified level - Reduce stock outs and both parties costs
In the beginning stages, firms might have ___________ marketing channels, since smaller brands have not proved themselves to be in big retail stores yet.
WEAK
What is the largest food retailer?
Walmart ($247 bil.)
Fulfillment Center
Warehouse facilities used to ship merchandise directly to customers (similar to distribution center)
Cross-Promotion
When two or more firms join to reach a specific target market - BEST when the firms identify with the same product market
IMC treats each part as the _________
Whole
Cost-based pricing assumes that costs....
Will not vary much for different levels of production.
National manufacturers and retailers often pay a service provider to monitor television ads around the country, to ensure that their ads are shown in their entirety during the time frames that were purchased. This service provider is monitoring for IMC noise problems associated with
a flaw in the medium
Compared to conventional supermarkets, warehouse clubs have
a lower service level
If you're a manufacturer, and you want to showcase your product in a store that has a narrow but deep selection of merchandise and where expert sales associates can assist customers with their selections, you'd most likely choose
a specialty store
Pull Strategy
a strategy in which the goal is to get consumers to PULL the product through the marketing channel by demanding it
Eddie was known for driving 30 miles just to save a dollar on the price of his favorite beverage. Eddie perceived price as _______ for a good or service, while most consumers recognize price as the _______ made to acquire a good or service. a. the money paid; overall sacrifice b. a variable cost; fixed cost c. the overall sacrifice; monetary payment d. a fixed cost; variable payment
a. The money paid; overall sacrifice
High price, state-of-the-art products will...
anticipate low sales but heighten the reputation/image therefore increasing the value in customers minds (Increase brand image, increase receptiveness of products)
Independent Marketing Channel member will try to extract ______ from a one-time deal and assume _____ responsibility afterwards
as much as possible ; NO
Unusual and exciting displays like Bass Pro Shops' climbing wall and stocked aquarium are examples of
atmospherics
At the break-even point: a. Costs are zero b. Price is maximized c. Profits are zero d. Fixed costs are zero e. Contribution per unit is zero
c. Profits are zero
Ned is glad his company finally converted to an RFID system. Now, he no longer needs to go through all the new goods to make sure what they ordered was what they received. Ned is responsible for ________ in his company.
checking (part of distribution center responsibilities)
A _____________ goal is incentive for both firms to cooperate together, boost sales, and help sustain a relationship.
common
Price helps to ________ value and image it wants to present. It sound also be ________ with expectations
define ; aligned
For simple economies, it is O.K. to have a __________ supply chain.
direct
The sender _________ the message and the receiver ____________ the message.
encodes ; decodes
Retailing is at the ______ of the supply chain
end
Higher-income consumers visiting ________ feel like they are on a treasure hunt, searching for a bargain.
extreme-value retailers
Firms can maximize profits by
figuring out the MAX amount each customer is willing to pay
Lead pricing can be _________ in some circumstances.
illegal
How does a retail distribution center supporting a store channel most obviously differ from one supporting an Internet channel?
in quantity of items shipped
Off-Price Retailers
inconsistent assortment of brand-name merchandise a a discount off the manufacturers suggested retail price (MSRP) (e. TjMaxx, Marshalls)
Internet buyers are sometimes surprised to see online retailers using information about their past purchases to customize promotions targeted to them the next time they visit the retailer's website. The retailer is using the information to
increase the share of wallet from their best customers.
A major factor contributing to the growth in the use of direct marketing IMC efforts is
increased use of credit and debit cards, and online shopping by consumers.
A study found that, among addicted smokers, a 10 percent increase in the price of cigarettes resulted in a 2 percent decrease in quantity demanded. For these consumers, cigarettes have a(n) _______ price elasticity demand.
inelastic - Price change much higher than demand change
Marketing communication should be ___________ enough to talk about, even if it's said to be controversial
interesting
Students of marketing often overlook or underestimate the importance of place in the marketing mix simply because
it happens behind the scenes (Not as visible as the other p's)
Televised ads are becoming ________ effective as increased media coverage makes advertising _________ challenging
less ; more - People checking their phones while they watch shows during the commercials
If channel members are _________ closely aligned, ________ prone to conflict
more ; less
Though a picture can be worth a thousand words, the most important facet of encoding is
not what is sent, but rather what is received.
In _______ competition, many firms provide similar products that are considered substitutes for each other.
pure
GRP
reach x frequency
The Message (of ads) give audience a __________ to respond in a __________ way.
reason ; desired
Manufacturers no longer own the supply chain like they once did, now big name ____________ are leading.
retailers
Extreme-Value Store
small, full-line, low priced basic goods (e. Family Dollar)
CH 19
start of ch 19 terms
Food Retailers
supermarket supercenter convenience warehouse club
Public relations is the component of IMC that
supports other promotional efforts by generating free- media attention.
Break-Even Analysis
technique used to examine the relationships among cost, price, revenue, and profit over different levels of production and sales to determine the break-even point
One of the greatest constraints faced by store-based retailers—and one that the Internet channel can address—is
the amount of merchandise that can be carried in a physical store.
Although creativity plays a major role in the execution stage, Advertisers must be careful that:
the creativity does not overshadow the message
Pure competition usually follows ________ ______ ______________.
the laws of supply
Public Relations (PR)
the organizational function that manages the firm's communications to achieve a variety of objectives, including building and maintaining a positive image, handling or heading off unfavorable stories or events, and maintaining positive relationships with the media - Good PR = important success factor in recent years
Traditionally, retailers treated all their customers ________, but today, successful retailers provide more value to _________
the same; to their best customers.
One of the benefits of EDI is that it can reduce lead time, which is
the time between the decision to place an order and the receipt of the merchandise.
In the IMC communication process, the ________ encodes the marketing communication message.
transmitter