EXAM 3 - MARKETING
Which of the following is most appropriate to use when the levels of product complexity and risk are extremely high? A.) pull strategy B.) public relations C.) advertising D.) personal selling E.) sales promotion
D.) personal selling
In a __________ ___________, the consumers can get almost all the products they aspire to shop at one place only. They provide a wide range of options to the consumers and thus fulfill all their shopping needs.
Department store
A set-up which offers wide range of products to the end-users under one roof
Department store ex: Nordstrom, Macy's, Bloomingdales
What's an example of a reference price?
Department store retailers often markup prices (or use an inflated Manufacturer's Suggested Retail price) and then offer discounted sale prices (e.g. 50% off). This practice of using a high reference price takes advantage of the anchor-and adjustment bias to make it seem like there is especially attractive value.
The buyer can sometimes be _____________ when the unbundled components' individual prices are not so attractive.
Dissuaded
The US has many stores and many employees in retail, wile ___________ has fewer stores and fewer employees per store. _____________ has many stores but fewer ppl employed in each store.
Europe; Japan - These variations are due to different lifestyles in the countries being served.
what type of pricing is a practice that means the goods are placed free on boards (hence, FOB) a carrier. At the point the title and responsibility pass to the customer, who pays the freight from the factory to the destination.
FOB-origin pricing
What part of the system is often priced low bc it is bundled w the purchase of high-margin "software" part?
Hardware
What is a example of distribution costs going up as a firm widens the products coverage?
If a small firm distributes its products to a few local outlets, it may be able to do this itself. However, if it decides to sell at every location in town, it might have to hire a distributor or wholesaler, adding additional depth and costs to the channel.
What is most concerning about the result of the university of bologna study?
It is concerning that the algorithms leave no trace of concerted action, they learn to collude purely by trial and error, w no prior knowledge of the environment in which they operate, without communicating w one another, and without being specially designed or instructed to collide. This risks driving up the price of goods and ultimately harming consumers.
Promotional pricing takes several forms. What are they?
LOSS LEADERS - supermarkets and dep. stores will price a few products as loss leaders (products priced below cost) to attract customers to the store in the hope that they will buy other items at normal markups. SPECIAL EVENT PRICING - used in certain seasons to draw more customers (ex: "Back-to-school Days sale"). CASH REBATES - manufacturers sometimes offer this to consumers who buy the product from dealers w/n a specified time, the manufacturer sends the rebate directly to the customer LOW-INTEREST FINANCING - some manufacturers offer low-interest financing, longer warranties, or free maintenance to reduce the consumer's "price". The seller may simply offer discounts from normal prices to increase sales and reduce inventories.
In the______________ learning process, the algorithm required little or no external guidance.
Learning - Once the learning is completed, the algorithm is put to work
____________ cost is often preferred when penetrating new markets or reducing excess inventory. When those products are treated as stand-alone profit centers, full cost accountability is usually allocated.
Marginal
Why is an exclusive distribution agreement especially rewarding for a retailer?
Not only does the exclusive distributor get all the sales for the product, the retailer may sell other products to customers who come to the store for the exclusive product.
What type of pricing is the practice of choosing such prices as $19.95, $.99, $99.99 to emphasize low prices by putting an emphasis on the first digit? The implication is that this retailer is trying to save the consumer money.
Odd pricing - Nordstrom and other high-end retailers prices in even numbers, which lends an aura of quality to the product
What has emerged as one solution to instant gratification?
Omnichannel - stores ability to serve as fulfillment centers has even led to the reversal of the belief that stores are dying
what varies not only among segments but also across diff products (ex: necessary products vs. luxury)
Price sensitivity
From the antitrust standpoint, the concern is that these autonomous pricing algorithms may independent discover that if they are to make the highest possible profit, they should avoid
Price wars (That is, they may learn to collude even if they have not been specifically instructed to do so, and even if they do not communicate w one another)
these have become ubiquitous in online retail as automated systems have grown increasingly affordable and easy to implement.
Pricing algorithms
what type of objective includes satisfactory profit levels that are specified (ex: a target return) or profit maximization objectives? They are expressed in the $ amount or % change from the previous period.
Profit objectives
What type of learning is a subset of machine learning that uses penalties and reward to incentivize an AI agent toward a specific goal?
Reinforcement learning
While companies like airlines and hotels have long used machines to set their prices, pricing systems have evolved. They have moved from rule-based programs to
Reinforcement-learning ones, where the logic of deciding a products price is no longer w/n a humans control.
distributing a product in selected outlets within a geographic area. (provides for some coverage with some expectation of sales effort) THIS IS KNOWN AS
Selective distribution
What kind of prices are those set on the sale of turnkey operations or a total systems package that includes some assortment of bundled products and services?
System prices
Within a pricing context, these systems are given a goal such as to maximize overall profit, then they experiment w diff strategies in a simulated environment to find what?
The optimal one A new paper now suggest that these dudes could pose as a huge problem: they quickly learn to collude
Researchers at the university of Bologna in Italy created two simple reinforcement-learning-based pricing algorithms and set them loose in a controlled environment. What did they discover?
They discovered that the two completely autonomous algorithms learned to respond to one's another's behavior and quickly pulled the price of goods above where it would have been had either operated alone.
What is the deepest a channel can get unless international distribution is involved?
This Producer -------> Wholesaler ---------> Retailer ---------> Consumer
Why do firms use an intensive distribution strategy?
This strategy is typically used for items involving a routine buying decision where PROXIMITY TO THE CUSTOMER IS PARAMOUNT.
What does TSP stand for?
Trade sales promotion
In an ________ phase, the algorithm actively experiments w the alternative strategies by playing against clone in simulated environment, more frequently adopting the strategies that person best
Training
What kind of prices may actually encourage subsidiaries to buy from other lower-cost sources in the open market? They also may be sued to influence subsidiaries pricing actions in foreign marketplace, or like "subsidies", to support the subsidiaries competitive position in the market place. In these cases, however, care must be taken to avoid accusations of dumping.
Transfer prices
what type of prices are prices set determining the cost of products shipped btwn headquarters and foreign subsidiaries, they also are important in the determination of correct duties and related fees and can have a significant impact on the financial performance of the subsidiary.
Transfer prices
What type of prices have been purposely set low in the past to avoid taxation of profits in the home country, and they have been set high to avoid the problem of repatriating profits from countries w inconvertible or low-value currencies
Transfer prices (Govs have caught on to these practices and have put measures in place to prohibit or discourage this activity)
Customers may want to do what to a package or system and pay for components separately?
Unbundle - this is less advantageous to the seller
When using bundling, the producer may be able to negotiate special discounts w supplier that they are not able to obtain when components are sold in an ____________ fashion
Unbundled
What type of pricing is the opposite of FOB pricing and the company charges the same price plus freight to all customers, regardless of their locations? (the freight cost is set at the average freight cost)
Uniform-delivered pricing
This type of pricing falls between FOB-origin pricing and uniform-delivered pricing. The company sets up 2 or more zones. All customers w/n a given zone pay a single total price, the more distance the zone, the higher the price.
Zone pricing
______________ are another type of reduction from list price.
allowances
On the purchasing side, what formats have become increasingly necessary for brands?
alternative formats
In many contexts, firms are limited in what price they can set bc of the
availability of similar competitive offerings. (few ppl will pay 10 cents more in gas at one station if there is a cheaper alternative across the street)
This type of pricing allows the seller to select a given city as a "basing point" and charge all customers the freight cost from that city to the customer location, regardless of the city from which the goods are actually shipped.
basing-point pricing - some companies set up multiple base points to create more flexibility; they quote freight charges from the basing-point city nearest to the customer.
At the high-end, value continues to come from non-tangible forms, like the services provided
before during and after the purchase
Govs also have diff approaches to regulating price discrimination - in some countries regulation is strict, some lax, and some it is nonexistent. However, most (if not all) govs take a stand against
bribery (at least in principle)
The result of these factors has been a greater division between
buying (which is convenience-oriented and often tech-enabled) and shopping (which is more social and experiential)
a price reduction to buyers who pay their bills promptly
cash discount ex: "2/10, net 30", which means that although payment is due within 30 days, the buyer can deduct 2% if the bill is paid within 20 days
An example of a diff type of financial objective is a ______ ________ objective - to recover cash as fast as possible
cash flow
Forms of retailing that penetrate foreign markets include
catalogs, convenience and/or self-serve stores, discount stores, and franchises
These are "big box" chains that deal w one category of related merch and they all offer a wide selection of merch in these categories at relatively low prices.
category killer
Airlines and personal computer industries have been particularly hurt by "_____________________", or the perception of little distinct differences between alternatives. In these contexts, when a competitor cuts their price, others are forced to follow.
commoditization
____________ may take the form of foreign vs domestic markets, not only terms of nationalistic perceptions but also in terms of the ability of foreign imports to compete on the same cost/price basis as domestic offerings.
competition
________________ parity is an approach used when comparing prices of other foreign product alternatives in the marketplace
competitive
A ___________ price basis may be determined by assessing a product's unique or competitive features or benefits package and adjusting price w a premium price differential
competitive (demand is also considered when determining what the market will bear)
Consumers still expect the _________ _______________ of retail shopping but in different and frequently sophisticated ways.
core components
When a discount is given over a number of purchases/over time. For instance, a customer is given a free haircut after the 10th haircut (marked off on a card)
cumulative quantity discount
Under what type of pricing do different customers pay different prices for the same product or service?
customer-segment pricing
It is also difficult to globalize successfully because distribution and logistics activities are those which are closet to the individual ______________.
customers
what type of distribution is often believed to optimize customer satisfaction?
decentralized distribution - However, tech, competition, economic development, and converging lifestyles are combining to make globalized distribution not only more feasible and beneficial, but also more necessary.
There must be sufficient __________ to support a price decision.
demand.
Having helpful, well-trained sales ppl is a key to success for what type of stores?
department stores
The line between online and offline is blurring, with stores increasingly equipped with
devices for online ordering - offline touch points also increasingly exist for online brands, and new channels are constantly emerging.
However, some of the most connected consumers are looking to limit their use of tech. This is called a "____________ __________" and is in some ways a reaction to "always on" cultures, and has consumers rethinking the amount of time they spend using their devices.
digital detox
Across countries, the # of ppl employed in wholesaling organizations varies, as does the # of
distribution levels
Most companies adjust their basic price to reward customers for certain responses, such as
early payment of bills, volume purchases, and off-season buying
For exporters, there is also the problem of
exchange rate fluctuations
Waterworks is a Connecticut firm that makes specialized products for a bath. They offer their products in only one outlet in Denver, so that outlet is the only distributor in Denver. THIS IS AN EXAMPLE OF
exclusive distribution
what type of objective involves profit or some other desirable financial target?
financial
Pricing objectives can be broadly categorized as being
financial or competitive
If a product is perishable, this may require a _____________ pricing strategy.
flexible - Products may be perishable due to seasonal fluctuations (ex: wrapping paper after the holiday, swimsuits in September, and candy corn in November) - services are perishable as well (ex: unoccupied hotel room, unsold airline seat, unsold concert/sports tix)
prices in __________ markets are generally higher than those at home bc of the increased costs arising from tariffs, duties, exchange rate fluctuations, transportation and customs costs, etc.
foreign (these costs can, as mentioned, be hard to estimate in advance and therefore make advance price quotations difficult to determine.)
A higher level of involvement outside home country may involve what type of investment? This can take many forms
foreign direct investment
The seller who is anxious to do business w a certain customer or geographical area might use ______________ pricing. Using this strategy, the seller absorbs all or part of the actual freight charges in order to get the desired business.
freight-absorbing pricing
is offered by the seller to trade-channel members who perform certain functions, such as selling, storing, and record keeping.
functional discount (also called a trade discount)
At its core, the ___________ of ____________ is about the evolving notion of consumer engagement, in parallel with developments in tech and shifting economic realities. This analysis reflect how economic and tech shifts have rewritten the shopping journey holistically.
future of retailing
firms try to determine the price elasticity (responsiveness of quantity demanded to price changes) for their ___________. This is a difficult task given the dynamic complexities in most competitive environments. However, in certain environments, firms practice pricing strategies based on price elasticity of demand.
goods
Overall, as economic development progresses, some aspects of lifestyle become more convergent, and the potential for retailing to become more globalized is
greater
The search for what continues to be a relevant concern for a large number of consumers
greater value
_______________ is a method of protecting one or more of the parties against these uncontrollable changes. It may involve forward purchasing of currencies, exchange of currencies, or other methods to insure the same "value" of exchange when the transaction is complete.
hedging
Countertrade is more popular in these markets, or countries, for a variety of reasons. What are these reasons?
inconvertibility of their home currency. such was often the case in the Soviet Union, when their currency was the inconvertible ruble. In order to be fully compensated in a way to take monies back to the home market, companies often had to accept goods that they could sell in domestic market or other foreign markets. In other cases, buying companies may not have enough $ to pay the full price of the purchase and therefore need to be able to exchange other services or goods to complete the transaction. Many companies do not like to participate in countertrade deals, but multinational corps such as Coco-Cola, McDonald's, and Ford have gained footholds in markets w great future potential in this way. However, foregoing foreign sales may be better than agreeing to a poor or difficult countertrade arrangement.
expanding into other markets increases output and therefore
increases scale and scope economies (however, per-unit cost reductions in unknown markets can be difficult to forecast accurately)
continues to gain relevance, particularly for shoppers replenishing an item they have previously purchased
instant gratification
What kind of distribution provides for the widest coverage?
intensive distribution (ex: all the places you can buy gum/soda - supermarkets, convenience stores, gift shops, and vending machines)
The area of what services is where a good deal of intra-country variation may be found.
intermediary services
A company can use _______ __________ experience to learn ab a new market environment
joint venture
a company can limit it financial risk as well as its exposure to political uncertainty by pursuing a
joint venture
allow partners to achieve synergy by combing different value chain strengths
joint venture
partners (parents) share equity investment in an independent entity (child). This is known as a
joint venture
this offers 2 or more companies the opportunity to share risk and combine complementary strengths. Companies considering this must plan carefully, communicate w partners and develop trust in order to avoid a "divorce"
joint venture
price escalation may be thwarted somewhat through
knockdown assembly shipping, a change in the location of origin of the product, or foreign direct investment
are granted considerable autonomy and are free to adapt the licensed goods to local tastes
licenses
Under what type of pricing does a company charge different prices under diff locations, even though the cost of offering each location is the same?
location pricing
what may also be used in anticipation of experience-curve effects w increased production and sales volume.
low introductory prices
licensing agreements offer limited
market control
When demand is elastic and there is a high degree of price sensitivity, a penetration pricing strategy (pricing lower than competition) may be used, particularly when there is what type of objective?
market share objective - we see this most often when there are competing tech standards involved. Here a firm may introduce a new product using a penetration strategy to initially gain market share and weaken competition. The lower price also helps set up a barrier to entry for potential competitors. Microsoft's Internet explorer was literally given away to take market share away from Netscape and to dominate the market.
These objectives are used to increase or maintain market share. They are typically used in a strategic response to specific industry conditions. Survival might supersede profits in the short term given deteriorating economic or industry conditions
market share objectives
a commodity-type product in a soft demand market reduces
markups significantly
Taking title does not always mean the manufacturer can wash its hands of the product and bear
no risk of return
Given for a single purchase. (ex: buy 3 get 1 free)
noncumulative quantity discount
Producers who can ________, offer, or ____________ favorable payments and terms for buyers are able to charge a total price that is higher than competitors who are unable to offer these services.
obtain, offer, or arrange
In a macroeconomic sense, price reps the value of a good or service to potential purchasers, and it ensures competition among sellers in what type of economy?
open market economy
As the activities of buying (acquiring products the consumer is already familiar w) and shopping (a more experiential and often social process) diverge, consumers expect merchants to be equipped to handle both activities, often at the same
outlet As a result of this, some elements are becoming essential for merchants in some markets, creating a new urgency for companies to address this megatrend.
Sometimes channel systems that have been replaced domestically are resurrected in foreign markets due to their
particular effectiveness in those areas ex: door-to-door selling, which has largely been retired in the US (bc of trends like increased crime and dual-career families) but has great success in Japan and other countries.
Unless a store delivers exceptional convenience or value, consumers now lack ___________ with stores with a lacklustre design - and expectations for the experience are rising for convenience and price players.
patience
Logistical functions are provided through the
physical distribution, storing, and sorting of goods
is a problem that primarily plagues the export marketer.
price escalation
a firm charges the highest price possible that buyers who most desire the product will pay. This is consistent w financial pricing objectives such as profit and it requires a degree of price insensitivity on the part of the target market.
price skimming - we see this situation often w new products that rep significant improvements and when competition is minimized by tech or patent barriers. (ex: new patented pharmaceuticals often are priced very high according to the skimming strategy. Intel practices this as well w their new microprocessors)
When demand is inelastic (price changes don't significantly affect quantity demanded), what type of strategy may be used?
price skimming strategy
___________ perceptions are linked to __________ perceptions. if a firm wishes to position its product at the highest quality position, the price should be relatively higher than that of the competition.
price; positioning
The value placed on what is exchanged; basically, something of value is exchanged for satisfaction and utility. the exchange includes tangible (functional) and intangible (prestige) factors
pricing
If a firm can come out with a new, distinct product that has no direct competition, they have more
pricing power
The depth of a distribution channel refers to the number of intermediaries between the
producer of a good and the consumer
Under what type of pricing do different versions of the product priced differently but not according to differences in their costs?
product from pricing
Distribution decisions involve managing the marketing channel, which is the pipeline of organizations through which a product passes from __________ to ___________.
product to consumer
A unique product in a strong demand market has the ability to carry a high
profit margin
Companies using _____________ pricing will temporarily price their products below list price and sometimes even below cost to create buying excitement and urgency.
promotional
are payments or price reductions to reward dealers for participating in advertising and sales support programs
promotional allowances
In using ____________ pricing, sellers must consider the psychology of prices and not simply the economics. Another aspect to this is reference prices - prices that buyers carry in their minds and refer to when looking at a given product.
psychological
Many consumers use price to judge what?
quality
is a price reduction to buyers who buy large volumes. Such discounts provide an incentive to the customer to buy more from one given seller, rather than from many different sources.
quantity discount
The ___________ price might be formed by noting current prices, remembering past prices, or assessing the buying situation.
reference - sellers can influence or use these customers' reference prices when setting prices. For most purchases, consumers don't have all the skill or info they need to figure out whether they are paying a good price.
the collection and dissemination of of info to and from the producer and the customer
research
facilitation functions include both _________ and ___________
research and financing
a price reduction to buyers who buy merch or services out of season
seasonal discount
In _____________ pricing, the company sells a product or service at two or more prices, even though the difference in prices is not based on differences in costs
segmented
what kind of distributed products include items like electronics, appliances, watches, and other "moderately" priced goods.
selectively distributed products
Changing values have also remained an important factor in the evolution of ____________. ___________ remains a priority for most, and consumers are increasingly wiling to buy a wide range of categories online
shopping; time
The licensing agreement may have a WHAT if the license develops its own know-how and begins to innovate in the licensed product or technology area.
short life
While long-term profit may always be a goal of businesses, what objectives may center on the competition?
short-term pricing objectives
What factors are deliberately vague that make it somewhat difficult to categorize what may be selectively distributed?
some coverage and moderately priced TIP: it is more useful to think ab these coverage strategies relative to competition or how they change over time. (ex - Godiva is more selective than Hershey's)
Pricing is usually not the priority when consumers are deciding upon this type of store, factors such as branding image, selection choice, and purchasing assistance are seen as important.
speciality; boutique store
A ____________ or _________ __________ has a narrow focus, but is smaller than category killers apart from the specific range. They tend to have a greater depth of specialist stock than general stores, and generally offer specialist product knowledge valued by the consumer.
speciality; boutique store ex: Chloe (Paris), Build-a-Bear Workshop, Alcala's Western Wear (Chicago)
What is an example of firms lowering their prices in response to competition in order to maintain a market share base from which they can survive?
the US airline industry
What has allowed many entrepreneurs to sell the goods they make directly?
the internet ex: original art and jewelry are sold on eBay
the network of business entities that support or perform marketing channel functions
the supply chain
Retailers should carefully develop experiences that are enduring and will draw repeat traffic, and avoid
those that can be largely recreated online
For instant gratification, what two factors must be minimized
time and friction
Under what type of pricing does a firm vary its prices by the season, the month, the day, and even the hour?
time pricing
Retailers must create experiences tailored to their brands to avoid being
too similar to another player
the total price quote may not be as important on very expensive purchases as the favorability of
trade credit arrangements
are price reductions given for turning an old items when buying to a new one
trade-in allowances
Best Buy runs an advertising supplement in the Sunday newspaper, which makes customers aware of the availability of certain electronic products as well as pricing. THIS IS AN EXAMPLE OF
transactional function
includes contracting and promoting products to potential customers.
transactional functions
going forward, improvement in technology and shopper's changing values are likely to drive retailing's
transformation
______________ prices across markets w different competition and demand structures are not very realistic
uniform
The expansion of many discounters into e-commerce (such as Aldi's partnership in the US w Insta cart and Dia's click and collect in Spain) is an example of
value in the form of convenience and experience
a retail format which sells limited stock in bulk at a discounted rate is called a ________ _________. They do not bother much ab the interiors of the store and the products are not properly displayed.
warehouse store ex: Costco, Sam's club
The variety w/n retailing across countries is greater, in general, than that in ________________. What are notable variables to this?
wholesaling 1.) types of retailing outlets 2.) number of retailers
The _________ of a channel is the number of outlets offering a product in a particular geographic area.
width
Prices quoted well in advance based on exchange rate at the time may result in a
windfall profit or a large loss if exchange rates btwn the relevant currencies are significantly diff. at the time payment become due.
Transfer prices should ideally be set at what
"Arm's length" - that is, commensurate w open market prices, so they buyer obtains the accurate feedback needed to make the most efficient resource allocations and purchase selections.
GSPs are particularly well suited to emerging markets in
- Central and Eastern Europe - Asia - Latin America
what are some examples of these new channels that are constantly emerging?
- Instagrams new feature for consumers to complete purchases directly through the app - growing options for consumers to rent items, rather than own them (rent the runway's movement into renting home good items and apparel items
For segmented pricing to be an effective strategy, certain conditions must exist:
- The market must be segmentable - the segments must show different degrees of demand - the costs of segmenting and watching the market cannot exceed the extra revenue obtained from the price difference - the segmented pricing must be legal (not to be intended to destroy/limit competition)
Foreign govs may affect price setting by
- artificially inflating or deflating the values of their home currencies - set price controls, which usually prohibit setting prices above a predetermined level w/o approval by the gov
Along w the standard set of parameters and considerations that must be addressed in domestic price setting, numerous factors unique to marketing abroad make pricing strategy and implementation an uncertain science. What are they?
- cost estimation - competitive and demand analysis - price escalation - countertrade - transfer - systems pricing
Companies will often adjust their base prices to allow for differences in what 3 things?
- customers - products - locations
alternatives can be ranked on a continuum representing increasing levels of
- investment - commitment - risk
Promotional pricing can have adverse effects, what are they
- when used too frequently and copied by competitors, price promotions can create "deal-prone" customers who wait until brands go on sale before buying them. - constantly reduced prices can erode a brand's value in the eyes of consumers - can lead to industry price wars. Such price wars usually play into the hands of only one or few competitors- those w the most efficient operations
The cost-plus formulas may be hard to use, especially in exporting, since all the relevant costs may be hard to determine in advance. In addition, the company headquarters usually has to make decisions ab several factors:
- whether only the direct costs will be charged against products in foreign markets - whether to leave domestic prices to cover fixed overhead and administrative costs - what % of overhead and administrative costs those products should carry
What are the several implications to this?
1.) A strong shopping experience has become essential in most markets 2.) as consumers have more direct access to manufacturers and more info ab pricing, value for money continues to be very relevant 3.) personalization is a third component of retailing's future that customers increasingly expect wherever they go
Companies usually adjust their basic prices to account for various customer differences and changing situations. There are 6 price adjustment strategies, what are they?
1.) Discount pricing 2.) allowance pricing 3.) segmented or discriminatory pricing 4.) psychological pricing 5.) Promotional pricing 6.) geographical pricing
What are two disadvantages to direct investment, acquisition, or ownership?
1.) requires most commitment in terms of managerial effort and investment 2.) foreign investment may breed resentment in target market. (negative country of ownership effect) ex: Inbev's acquisition of Anheuser Busch and other iconic beer companies has been met with some negative feedback on social media so they've hired Melbourne IT company to "manage" their online reputation.
membership includes _____________ as well as ____________
1.) wholesalers (who sell to other intermediaries) 2.) retailers (who sell to customers)
About ______ or ________ of the market is covered by smaller independent wholesalers, which are generally more local or regional than global. This is mostly due to tech innovations and the drive for efficiency.
1/5, 1/4
The % of households possessing a smartphone globally is expected to increase by about _______ annually. Merchants also have greater access to tech than just ______ years ago
10%; 2
Since _________, access to tech has continued to grow significantly across all markets
2017
The Japanese have at least (how many) levels of wholesalers, which makes the Japanese distribution system costly, time consuming, and complex
3
What percentage of online respondents globally in a recent lifestyle survey indicated that they disagreed with the statement "I freely share personal info online"
49% - This is ironic bc at the same time consumers are also expecting the offers they see, delivery options, and even the products themselves to be tailored to their needs.
*100% GOING TO BE ON TEST* Suppose you created a new innovation, a lip balm that kept lips moist and protected far longer than anything on the market today. Relative to the competition, which of the marketing mix combinations would you choose to position your product as the best lip balm? A.) more selective distribution, less advertising, higher price B.) more intensive distribution, higher price, more advertising C.) lower price, less advertising, more selective distribution D.) more advertising, higher price, more selective distribution E.) less advertising, more intensive distribution, higher price
A.) more selective distribution, less advertising, higher price
If you shop on Amazon, an ___________ rather than a human prob set the price of the service or item u bought.
Algorithm
Who is an example a company that has used reinforced learning?
AlphaGo famously used it to beat the best human players at the ancient board game Go.
There may be other situations in which attaining a dominating position in an industry might also be an objective requiring a lower price in order to gain market share. What is an example of this?
Apple gives away its iTunes software for free. By securing a dominant mp3 software position, they hope to sell more iPods and music downloads.
What is an example of selectively distributed vs exclusively distributed in the state of Missouri?
Aston Martins are exclusively distributed in MO, the only Aston Martin dealership in the entire state is in STL, however, Chevy trucks are selectively distributed at dealerships throughout MO.
Unlike the traditional revenue management systems long in sued by such businesses as airlines and hotel, u which the programmer remains effectively in charge of the strategic choices, the pricing program that are know emerging are much more
Autonomous
These new algorithms adopt the same logic as the artificial intelligence (AI) programs that have recently attained superhuman performances in complex strategic environment such as the game of Go or chess.
Autonomous (That is, the algorithm is instructed by the programmer only ab the aim of the exercise- winning the game, say, or generating the highest possible profit) - it is not specifically how to play the game but j stead learn from experience.
Which of the following is associated with intensive distribution? A.) many electronic products found at BestBuy B.) Routine decision making C.) balanced promotion (equal use of advertising, sales promotion and personal selling) D.) limited decision making E.) expensive products
B.) Routine decision making
Who must determine if the utility gained from the exchange is worth the buying power that must be sacrificed?
Buyers
What two strategies may be among the most challenging and difficult to globalize successfully due to infrastructures, distribution networks, and responsibilities often differing significantly from country to country?
Channel and distribution systems
Are small stores run by individuals in the nearby locality to cater to daily needs of the consumers staying in the vicinity. In cities, these are often independently owned and operated. They offer only selected items, not high-end products and are not at all organized. The size of the store would not be very big and depends on the land available to the owner.
Convenience (mom and pop) stores - Large convenience chain stores also combine gas operations often particularly in suburban and highway locations. Ex: 7-11, Circle K, Quick trip
is a more common method of exchange in emerging markets than in growth or mature markets, it refers to receiving a payment for goods sold in some form other than cash. This may range from simple barter, where an amount of one good is traded directly for an amount of another good, to other methods including compensation deals, counterpurchases, product buy-backs, of offset deals.
Countertrade
What are 2 disadvantages of Joint ventures?
1.) Joint venture partners must share rewards as well as risks 2.) There is the potential for conflict btwn partners
Western businesspeople should be aware of two special forms of cooperation found in Asia, namely
1.) Japan's keiretsu 2.) South Korea's chaebol
What service is provided with a exclusively distributed product?
"after-the-sale" service
While the US and Japan have ab the same # of ppl employed in wholesaling - relative to the population - Japan has a much higher
% of persons employed in that area
Foreign direct investment can also be used to establish company operations outside the home country through what 3 strategies?
1.) GREENFIELD INVESTMENT (constructing new operational facilities in a foreign country) 2.) ACQUISITION of an minority or majority equity stake in a foreign business 3.) taking OWNERSHIP of an existing business entity through merger or outright acquisition
two specialized forms of licensing that are widely used in global marketing
- contract manufactoring - franchising
In order for consumers to minimize effort involved in purchasing low-priced items that are also purchased frequently (such as gum), what two factors are MOST IMPORTANT?
1.) Availability 2.) Intensive distribution (often times we will pay a little extra for a soft drink in a vending machine because we do not want to go through the hassle of driving to the store)
Strategic alliances exhibit what 3 characterisitics?
1.) The participants remain independent subsequent to the formation of the alliance. 2.) The participants share the benefits of the alliance as well as control over the performance of assigned tasks. 3.) The participants make ongoing contributions in tech, products, and other key strategic area.
Selecting the channel width or coverage is an important strategic decision that is based on factors such as the
1.) consumer's buying process 2.) brand's desired competitive position
What are two reasons why a product shouldn't be intensively distributed?
1.) distribution costs go up as a firm widens the product's coverage. (more expensive) 2.) there is a tradeoff between coverage and sales effort on the part of channel members. (the greater the # of outlets carrying a product, the lower the % of sales made by any one outlet. Lower sales means less profits and lower sales attention given to one product.)
Channel members are also called
1.) distributors 2.) intermediaries 3.) resellers 4.) middlemen
the 3 general types of channel coverage strategies available are
1.) intensive 2.) selective 3.) exclusive (we refer to these strategies relative to a particular area, though generally, firms use similar coverage strategies in all markets)
What are two advantages to direct investment, acquisition, or ownership?
1.) may provide instant market access 2.) offers greater control than other market entry methods
The Japanese also have many more levels of distribution relative to what two markets?
US and most European markets
Wholesalers who have been reluctant to adapt have often been usurped by
aggressive retailers
Companies that wish to move beyond exporting can use a range of
alternative market entry strategies
A firm selling items overseas may have to add what in the non-domestic market?
another intermediary (such as an import wholesaler)
Consumers increasingly expect to extract value from a brand not only in the transaction, but before and after their purchase. Shoppers also increasingly make purchases across many different platforms, and merchants must be prepared to engage
anytime and anywhere (Companies that provide shoppers w this value are changing expectations and creating new norms)
A _______________ ___________ is marketing industry jargon for a retailer that discount. Specialty and department stores find it almost impossible to compete w because of their narrow focus
category killer ex: Home Depot, Best Buy
large wholesalers w sizable financial resources and connections are becoming more common, and therefore exert a lot of power in the _________ ___________. Many of these wholesalers are part of an increasing vertical integration of the value chain.
channel structure
Because the licensee is typically a local business that will provide and market the goods on a local or regional basis, licensing enables companies to
circumvent tariffs, quotas, or similar export barriers
Many smaller manufacturers often use what to distribute their goods?
deep channels (particularly when they want to distribute via small, independent retailers) ex: many items sold through the university bookstores are made by small firms that use wholesalers.
There is no ________ in the direct marketing situations where the producer sells directly to the customer.
depth ex: Dell sells the computers and other equipment they make directly to consumers over the Internet.
What type of stores generally offer a limited range and the quality in certain cases might be a little inferior as compared to department stores.
discount stores
What type of stores also offer a huge range of products to the end-users but at a discounted rate. It is the lower price rather than sales help that is the most important factor here.
discount stores ex: Walmart, Kmart, Target
Example of an intensively distributed product vs. a selectively distributed product
disposable camera - intensively distributed digital camera - selectively distributed It is unlikely that the consumer will get much help in selecting a disposable camera, whereas digital cameras are sometimes sold to Best Buy and not Target, and need sales ppl to provide info and help sell cameras.
used by firms offering luxury goods or speciality products
exclusive distribution
what type of distribution maximizes sales effort while minimizes coverage?
exclusive distribution
an offering is ___________ distributed if it is offered in only one outlet within a particular geographic area.
exclusively
Automobiles are ____________ decisions for us
extensive
Because of the profit and traffic delivered by an exclusive distributorship, retailers must expend ___________________ _____________ in selling the exclusive products.
extraordinary efforts (This involves more than just "pushing" a product, the salespeople must be trained to details about the product and must spend time and effort providing this info to customers.)
Cooperative alliances known as ____________ _______________ ________________ represent an important market entry strategy in the 21st century. They are ambitious, reciprocal, cross-border alliances that may involve business partners in a number of different country markets.
global strategic partnerships (GSPs or strategic alliances)
a __________ __________ may be the only way to enter a country or region if gov bid award practices routinely favor local companies, if import tariffs are high, or if laws prohibit foreign control.
joint venture (ex: In china, the only market entry method allowed to foreign auto makers is to partner w a Chinese automobile co)
- can generate revenue flow with little investment - good choice for a company that possesses advanced technology, a strong band image, or valuable intellectual property
licensing
Since retailers deal w ultimate consumers and different infrastructures, their services and structure have traditionally been more
localized
Eggs need to be transported from various farms and sorted into different sizes and grades of quality before being transported to supermarkets. THIS IS AN EXAMPLE OF
logistical function
With differing infrastructures and channel alternatives, some frequently used methods of retailing for a given product may
not exist or be available to the marketer for competitive reasons. THIS WILL USUALLY REQUIRE NEW CHANNEL CREATION
what is the most extreme example of intensive distribution?
offering a product via vending machines
A retail store which generally sells food products an household items, properly placed and arranged in specific departments is called a _____________. This store is an advanced form of the small grocery stores and caters to the household needs of the consumer. The various food products are properly displayed at their respective departments to catch the attention of the customers and for them to pick any merch depending on their choice an need.
supermarket ex: HyVee, Albertson's, Piggly Wiggly
Licenses - especially those working w the process technologies - can develop into strong competitors in the local market and, eventually, into industry leaders (ex: Xerox licensed copying technology to Canon). THIS IS AN EXAMPLE OF
worst case scenario