Last marketing exam
source
A person, group, or organization with a meaning it tries to share with a receiver or an audience
Communication
A sharing of meaning through the transmission of information
viral marketing
A strategy to get consumers to share a marketer's message, often through e-mail or online videos, in a way that spreads dramatically and quickly
The supply chain imcludes
All entities that facilitate product distribution
noise
Anything that reduces a communication's clarity and accuracy
Fairmont Austin drops the price of a suite from $264 to $234 per night and experiences a reduction in quantity of rooms demanded of an average of five per night. This is an indication that suites at this hotel are apparently an example of a(n)_______ product
Prestige
Feedback
The receiver's response to a message
supply chain
all organizations, processes, and activities involved in the flow of goods from the raw materials to the final consumer
Price fixing
an agreement among firms to charge one price for the same good
Place utility
making products available where customers want them
noncumulative discounts
one-time price reductions based on the number of units purchased, the dollar value of the order, or the product mix purchased
freight forwarders
organizations that consolidate shipments from several firms into efficient lot sizes
advertising
paid non personal communication about an organization and its products transmitted to a target audience through mass media
word-of-mouth communication
personal informal exchanges of communication that customers share with one another about products, brands, and companies
average total cost
the sum of the average fixed cost and the average variable cost
What equation shows organizations the relationship between price and profit?
(Price × Quantity Sold) − Total Costs = Profits
Selective distribution
- is appropriate for shopping products - is desirable when a special effort, such as customer service from a channel member, is important to customers - is often used to motivate retailers to provide adequate service
intensive distribution is appropriate for products that
-Have a high replacement rate -Require almost no service -Are bought based on price cues
If a company increased its price from $100 to $120 and the percentage change in quantity demanded was 40 percent, the price elasticity of demand for this product is
????
Electronic Data Interchange (EDI)
A computerized means of integrating order processing with production, inventory, accounting, and transportation
Vertical management system
A marketing channel managed by a single channel member to achieve efficient, low-cost distribution aimed at satisfying target market customers
predatory pricing
Also called undercutting, involves the intent to set a product's price so low that rival firms cannot compete and therefore withdraw from the marketplace
strategic channel alliance
An agreement whereby the products of one organization are distributed through the marketing channels of another
manufacturers agent
An independent businessperson who sells complementary products and is compensated by commissions
Just-in-time (JIT)
An inventory-management approach in which supplies arrive just when needed for production or resale
Under armor maintains a good deal of control over how it's products are promoted, displayed, and sold. Because of this control, under armor would be appropriately described as the channel
Captain
Contractual VMS
Channel members are linked by legal agreements spelling out each member's rights and obligations
tactile communication
Communicating through touching
Recycling
Concerting waste into reusable material, reprocessing, reclaiming, or reusing supplies and final products
Firestone allows companies like Sears and Discount Tire to distribute and discount its tires. This action significantly increases the possibility of channel ____ with independent Firestone dealers.
Conflict
Quantity discounts
Deductions from the list price for purchasing in large quantities
Digital Distribution
Delivering content through the Internet to a computer or other device
Inventory Management
Developing and maintaining adequate assortments of products to meet customers' needs
channel cooperation
Enables retailers, wholesalers, suppliers and logistics providers to: Speed up inventory replenishment Improve customer service Cut the costs of bringing products to customers
Third-party logistics (3PL)
Firms that have special expertise in core physical distribution activities such as warehousing, transportation, inventory management, and information technology and can often perform these activities more efficiently
Time Utility
Having products available when the consumer wants them
procurement
Involves the processes to obtain resources to create value through sourcing, purchasing, and recycling, including materials and information
price war
Involves two or more companies engaging in intense price competition, often in an effort to boost market share
Operations Management
Managing activities from production to final delivery through system-wide coordination
marketing intermediaries
Middlemen that link producers to other intermediaries or ultimate consumers through contractual arrangements or through the purchase and resale of products
Huy Fong foods markets a sriracha sauce for household use to supermarkets through grocery wholesalers. It markets sriracha for institutional use through industrial distributors and food brokers. Huy fong is using
Multichannel distribution
personal selling
Paid personal communication that attempts to inform customers and persuade them to buy products in an exchange situation
materials handling
Physical handling of tangible goods, supplies, and resources
Logistics management
Planning, implementing, and controlling the efficient and effective flow and storage of products and information from the point of origin to consumption to meet customers' needs and wants
Sonya is a product manager for the container store, a retailer of storage containers, closet systems, and more. Sales have been declining in the past nine months and her management team is pressuring her to compete based on price discounts. However, Sonya is aware of the dangers associated with engaging in price competition. She knows that competitors can also change prices quickly and aggressively, which can result in a(n)________ that will be harmful to both companies
Price war
Large retailers such as Macy's and Walmart are most likely to participate in which of the following channels?
Producers, retailers, consumers
pull policy
Promoting a product directly to consumers to develop strong consumer demand that pulls products through the marketing channel
push policy
Promoting a product only to the next institution down the marketing channel
The supply chain begins with ___________ and ends with _____________
Raw materials; customers
Channel power
The ability of one channel member to influence another member's goal achievement
marginal revenue
The change in total revenue resulting from the sale of an additional unit of a product
Promotion Mix
The combination of promotional tools an organization uses.
channel captain
The dominant leader of a marketing channel or a supply channel
Receiver
The individual, group, or organization that decodes a coded message
Reorder point
The inventory level that signals the need to place a new order
At the breakeven point,
The money a company brings in from selling products equals the amount spent producing the products
Sourcing
The process of determining what materials a firm needs, where those materials come from, and how they impact marketing integrity
Product placement
The strategic location of products or product promotions within entertainment media content to reach the product's target market
Total cost
The sum of average fixed and average variable costs times the quantity produced
multichannel distribution
The use of a variety of marketing channels to ensure maximum distribution
Deceptive pricing
The use of false or misleading statements or practices to persuade buyers that a product is a better deal than it really is
Price
The value paid for a product in a marketing exchange
Extensive Distribution
Using a dingle outlet in a fairly large geographic area to distribute a product
Radio Frequency Identification (RFID)
Using radio waves to identify and track materials tagged with special microchips
Public Relations
a broad set of communication efforts used to create and maintain favorable relationships between an organization and its stakeholders
If demand is elastic
a change in price causes an opposite change in total revenue
External reference price
a comparison price provided by others
Allowance
a concession in price to achieve a desired goal
One advantage of nonprice competition is that
a firm can build customer loyalty
Demand curve
a graph of the quantity of products expected to be sold at various prices if other factors remain constant
marketing channel
a group of individuals and organizations that direct the flow of products from producers to customers within the supply chain
Price elasticity of demand
a measure of the sensitivity of demand to changes in price
internal reference price
a price developed in the buyer's mind through experience with the product
FOB destination
a price indicating the producer is absorbing shipping costs
Cash discount
a price reduction given to buyers for prompt payment or cash payment
Seasonal discount
a price reduction given to buyers for purchasing goods or services out of season
trade discount
a reduction off the list price a producer gives to an intermediary for performing certain functions
exclusive dealing
a situation in which a manufacturer forbids an intermediary from carrying products of competing manufacturers
freight absorption pricing
absorption of all or part of actual freight costs by the seller
Promotion Mix Elements
advertising, sales promotion, personal selling, public relations
tying agreement
an agreement in which a supplier furnishes a product to a channel member with the stipulation that the channel member must purchase other products as well
buzz marketing
an attempt to incite publicity and public excitement surrounding a product through a creative event
industrial distributor
an independent business organization that takes title to industrial products and carries inventories
Cost plus investment
calculated as full cost plus, the cost of a portion of the selling unit's assets used for internal needs
market-based cost
calculated at the market price less a small discount to reflect the lack of sales effort and other expenses
standard full cost
calculated based on what it would cost to produce the goods at full plant capacity
Actual full cost
calculated by dividing all fixed and variable expenses for a period into the number of units produced
Administered VMS
channel members are independent, but informal coordination achieves a high level of inter-organizational management
Uniform geographic pricing
charging all customers the same price, regardless of geographic location
Corporate VMS
combines all stages of the marketing channel, from producers to consumers, under a single owner
horizontal channel integration
combining organizations at the same level of operation under one management
vertical channel integration
combining two or more stages of the marketing channel under one management
proxemic communication
communicating by varying the physical distance in face-to-face interactions
kinetic communication
communicating through the movement of head, eyes, arms, hands, legs, or torso
promotion
communication to build and maintain relationships by informing and persuading one or more audiences
Value consciousness
concerned about price and quality of a product
Coding process
converting meaning into a series of signs or symbols
decoding process
converting signs or symbols into concepts and ideas
Integrated Marketing Communications
coordination of promotion and other marketing efforts for maximum informational and persuasive impact
Fixed costs
costs that do not vary with changes in the number of units produced or sold
Variable costs
costs that vary directly with changes in the number of units produced or sold
Possession Utility
customer has access to the product to use or to store for future use
primary demand
demand for a product category rather than for a specific brand
Selective demand
demand for a specific brand
For most firms in the United States, demand curves are
downward sloping
Prestige consciousness
drawn to products that signify prominence and status
nonprice competition
emphasizing factors other than price to distinguish a product from competing brands
price competition
emphasizing price as an issue and matching or beating competitors' prices
price discrimination
employing price differentials that injure competition by giving one or more buyers a competitive advantage
In the _______, concepts and ideas are converted into signs or symbols by the source
encoding process
If children and teenagers are insisting on wearing expensive name-brand apparel, a criticism of promotion can be made that promotion
encourages materialism
Form Utility
formed by assembling, preparing, or otherwise refining the product to suit customer needs
Megacarriers
freight transportation firms that provide several modes of shipment
base-point pricing
geographic pricing that combines factory price and freight charges from the base point nearest the buyer
Bowflex uses infommercials to demonstrate its fitness products and encourage customers to call and receive a free video with more information about its products. This promotional effort is directed at
identifying prospects
Aaron Whitley's company buys machine tools from large producers and sells them to several Midwestern manufacturing companies. The company Aaron works for carries inventories of the tools, which reduces capital requirements for the producers. Aaron's company is an example of a(n) ____ in a distribution channel.
industrial distributor
Convenience products typically use
intensive distribution
levels of market coverage
intensive, selective, exclusive
Distribution centers
large, centralized warehouses that focus on moving rather than storing goods
Michael is planning a promotional program for AirFam. AirFam is a supplier of new energy-saving engines used to produce air conditioners. His company needs to promote these engines to manufacturers of air conditioners, so he is most likely to use ___, because it provides immediate feedback. The disadvantage is that it is _____ than advertising to reach one customer.
personal selling; more costly
Louis is reading the online report of the tuition and fees he owes for this semester of college. Since he has signed up for online banking, he pays the amount immediately. The amount Louis just paid is considered to be
price
a measure of the sensitivity of demand to changes in price
price elasticity of demand
zone pricing
pricing based on transportation costs within major geographic zones
In episodes of American Idol, the judges drink out of cups featuring the Coca Cola logo. The promotion strategy being used by Coca Cola
product placement
In many television shows and movies, you will see characters using Apple computers and laptops during the show. This promotion strategy is called _________.
product placement
new introductory promotion
promotion that informs consumers about a new product
cumulative discounts
quantity discounts aggregated over a stated time period
Promotional efforts designed to allow a manufacturer of a seasonal product to operate at peak efficiency year round seek to
reduce sales fluctuations
geographic pricing
reductions for transportation and other costs related to the physical distance between buyer and seller
When a soft drink manufacturer offers digital coupons that customers can use in retail stores, it is using
sales promotion
When Lean Cuisine promotes the quality, taste, and calorie contents of its line of frozen meals, it is attempting to develop
selective demand
Stockouts
shortages of products
Starbucks has an agreement with Pepsi Co. through which Pepsi distributes Starbucks' coffee drink, Frappucino, to grocery stores and other retail outlets. This is an example of
strategic channel alliance
Price consciousness
striving to pay low prices
Purchasing
the act of negotiating and executing transactions to buy and sell goods, materials, and services
order lead time
the average time lapse between placing the order and receiving it
Mary is currently working on updating her company's website, incorporating signs and symbols that will help represent the ideas that the company is trying to express. Mary is most likely working on the _____ for the website.
the coding process
Outsourcing
the contracting of physical distribution tasks to third parties
Supply Chain Management (SCM)
the coordination of all the activities involved with the flow and transformation of supplies, products, and information throughout the supply chain to the ultimate consumer
Warehousing
the design and operation of facilities for storing and moving goods
marginal cost
the extra cost incurred when a business produces one additional unit of a product
Average fixed costs
the fixed cost per unit produced
channel capacity
the limit on the volume of information a communication channel can handle effectively
Communications channel
the medium of transmission that carries the coded message from the source to the receiver
Intensity of Market Coverage
the number and kinds of outlets in which a product will be sold
breakeven point
the point at which the costs of producing a product equal the revenue made from selling the product
FOB factory
the price of merchandise at the factory before shipment
Usage rate
the rate at which a product's inventory is used or sold during a specific time period
order processing
the receipt and transmission of sales order information
Cycle time
the time needed to complete a process
Barter
the trading of products
average variable cost
the variable cost per unit of output
Channel decisions are important to marketers mostly because
they involve long-term commitments and affect customer accessibility.
If demand is inelastic
total revenue changes in the same direction as the change in price
intermodal transportation
two or more transportation modes used in combination
intensive distribution
using all available outlets to distribute a product
selective distribution
using only some available outlets in an area to distribute a product
Marginal analysis involves examining
what happens to a firm's costs and revenues when production is changed by one unit.
Advertising Disadvantages
•Absolute dollar outlay can be high •Rarely provides rapid feedback •Often difficult to measure its effect on sales •Less persuasive than personal selling •Has a limited time exposure
Advantages of using industrial distributors
•Can perform the needed selling activities in local markets at a relatively low cost to a manufacturer •Can reduce a producer's financial burden by providing customers with credit services •Are aware of local needs and can pass on market information to producers due to their close relationships with their customers •Reduce producers' capital requirements by holding adequate inventories in local markets
Advertising Advantages
•Is extremely cost-efficient when it reaches a vast number of people at a low cost per person •Lets the source repeat the message several times •Visibility gained from advertising can enhance an organization's image
disadvantages of using industrial distributors
•May be difficult to manage because they are independent firms •Often stock competing brands, so a producer cannot depend on them to sell its brand aggressively •Incur expenses from maintaining inventories •Are less likely to handle bulky or slow-selling items, or items that need specialized facilities or extraordinary selling efforts •May lack the specialized knowledge necessary to sell and service technical products
Variables that affect the intensity of market coverage
•Replacement rate •Product adjustment (services) •Duration of consumption •Time required to find the product
Disadvantages of using manufacturers agents
•The seller has little control over the actions of manufacturers' agents •Prefer to concentrate on larger accounts due to the fact they work on commission •Are often reluctant to spend time following up with customers after the sale, putting forth special selling efforts, or providing sellers with market information because they are not compensated for these activities and they reduce the amount of productive selling time •Have a limited ability to provide customers with parts or repair services quickly because they rarely maintain inventories
Advantages of using manufacturers agents
•Usually possess considerable technical and market information and have an established set of customers •Can be an asset to an organizational seller with highly seasonal demand because the seller does not have to support a year-round sales force •Are typically paid on a commission basis, which can be an economical alternative for a firm that has highly limited resources and cannot afford a full-time sales force