Marketing Exam 2 Ch7,9,10,12

Consumer Product

A product bought by final consumers for personal consumption

Industrial product

A product bought by individuals and organizations for further processing or for use in conducting a business.

advertising

Any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor.

Product

Anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need.

direct-to-consumer (DTC) brands

Brands that avoid direct competition with established traditional brands by selling and shipping to consumers only through online and mobile channels.

integrated marketing communications (IMC)

Carefully integrating and coordinating the company's many communications channels to deliver a clear, consistent, and compelling message about the organization and its products.

line extension

Extending an existing brand name to new forms, colors, sizes, ingredients, or flavors of an existing product category.

brand extension

Extending an existing brand name to new product categories

exclusive distribution

Giving a limited number of dealers the exclusive right to distribute the company's products in their territories.

market-skimming pricing (price skimming)

Setting a high price for a new product to skim maximum revenues layer by layer from the segments willing to pay the high price; the company makes fewer but more profitable sales.

market-penetration pricing

Setting a low price for a new product in order to attract a large number of buyers and a large market share.

by-product pricing

Setting a price for by-products to help offset the costs of disposing of them and help make the main product's price more competitive.

captive-product pricing

Setting a price for products that must be used along with a main product, such as blades for a razor and games for a video-game console.

customer value-based pricing

Setting price based on buyers' perceptions of value rather than on the seller's cost

break-even pricing (target return pricing)

Setting price to break even on the costs of making and marketing a product or setting price to make a target return.

competition-based pricing

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

cost-based pricing

Setting prices based on the costs of producing, distributing, and selling the product plus a fair rate of return for effort and risk.

geographical pricing

Setting prices for customers located in different parts of the country or world.

product line pricing

Setting the price steps between various products in a product line based on cost differences between the products, customer evaluations of different features, and competitors' prices.

percentage-of-sales method

Setting the promotion budget at a certain percentage of current or forecasted sales or as a percentage of the unit sales price.

affordable method

Setting the promotion budget at the level management thinks the company can afford.

competitive-parity method

Setting the promotion budget to match competitors' outlays.

sales promotion

Short-term incentives to encourage the purchase or sale of a product or a service.

intensive distribution

Stocking the product in as many outlets as possible.

execution style

The approach, style, tone, words, and format used for executing an advertising message.

service profit chain

The chain that links service firm profits with employee and customer satisfaction

Product Quality

The characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs.

creative concept

The compelling "big idea" that will bring an advertising message strategy to life in a distinctive and memorable way.

disintermediation (or channel distribution)

The cutting out of marketing channel intermediaries by product or service producers or the displacement of traditional resellers by radical new types of intermediaries.

brand equity

The differential effect that knowing the brand name has on customer response to the product or its marketing.

advertising budget

The dollars and other resources allocated to a product or a company advertising program.

service perishability

Services cannot be stored for later sale or use.

store brand (private brand)

A brand created and owned by a reseller of a product or service.

horizontal marketing system

A channel arrangement in which two or more companies at one level join together to follow a new marketing opportunity.

conventional distribution channel

A channel consisting of one or more independent producers, wholesalers, and retailers, each a separate business seeking to maximize its own profits, perhaps even at the expense of profits for the system as a whole.

vertical marketing system (VMS)

A channel structure in which producers, wholesalers, and retailers act as a unified system. One channel member owns the others, has contracts with them, or has so much power that they all cooperate. - Corporate - Contractual - Administered

Convenience Product

A consumer product that customers usually buy frequently, immediately, and with minimal comparison and buying effort. Low price, widespread distribution, mass promotion. Ex: toothpaste, magazines, detergent.

Shopping Product

A consumer product that the customer, in the process of selecting and purchasing, usually compares on such attributes as suitability, quality, price, and style. Less frequent buying, higher price, selective distributions. Ex: major appliances, tv, furniture.

Specialty Product

A consumer product with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort. Strong brand preference, highest price, exclusive distribution, targeted promotion. Ex: luxury goods, Rolex, fine crystals.

franchise organization

A contractual vertical marketing system in which a channel member, called a franchisor, links several stages in the production-distribution process.

demand curve

A curve that shows the number of units the market will buy in a given time period, at different prices that might be charged.

multichannel distribution system

A distribution system in which a single firm sets up two or more marketing channels to reach one or more customer segments.

Product Line

A group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges.

channel level

A layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer.

indirect marketing channel

A marketing channel containing one or more intermediary levels.

direct marketing channel

A marketing channel that has no intermediary levels.

advertising agency

A marketing services firm that assists companies in planning, preparing, implementing, and evaluating all or portions of their advertising programs.

price elasticity

A measure of the sensitivity of demand to changes in price.

Brand

A name, term, sign, symbol, or design, or a combination of these, that identifies the products or services of one seller or group of sellers and differentiates them from those of competitors.

value delivery network

A network composed of the company, suppliers, distributors, and, ultimately, customers who partner with each other to improve the performance of the entire system in delivering customer value.

pull strategy

A promotion strategy that calls for spending a lot on consumer advertising, promotion, and other content to induce final consumers to engage with and buy the product, creating a demand vacuum that "pulls" the product through the channel.

Push strategy

A promotion strategy that calls for using the sales force and trade promotion to push the product through channels. The producer promotes the product to channel members who in turn promote it to final consumers.

marketing channel (distribution channel)

A set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user.

advertising objective

A specific communication task to be accomplished with a specific target audience during a specific period of time.

discount

A straight reduction in price on purchases during a stated period of time or of larger quantities.

contractual VMS

A vertical marketing system in which independent firms at different levels of production and distribution join together through contracts.

corporate VMS

A vertical marketing system that combines successive stages of production and distribution under single ownership—channel leadership is established through common ownership.

administered VMS

A vertical marketing system that coordinates successive stages of production and distribution through the size and power of one of the parties.

public relations (PR)

Activities designed to engage the company's various publics and build good relations with them.

cost-plus pricing (markup pricing)

Adding a standard markup to the cost of the product.

dynamic pricing

Adjusting prices continually to meet changing conditions and situations in the marketplace.

personalized pricing

Adjusting prices in real time to fit individual customer situations, locations, and buying behaviors.

native advertising

Advertising or other brand-produced online content that looks in form and function like the other natural content surrounding it on a web or social media platform.

Service

An activity, benefit, or satisfaction offered for sale that is essentially intangible and does not result in the ownership of anything

product bundle pricing

Combining several products and offering the bundle at a reduced price.

Unsought Product

Consumer products that the consumer either does not know about or knows about but does not normally consider buying. Ex: life insurance and red cross blood donations.

fixed costs (overhead)

Costs that do not vary with production or sales level.

variable costs

Costs that vary directly with the level of production.

content marketing

Creating, inspiring, and sharing brand messages and conversations with and among consumers across a fluid mix of paid, owned, earned, and shared channels.

marketing channel design

Designing effective marketing channels by analyzing customer needs, setting channel objectives, identifying major channel alternatives, and evaluating those alternatives.

objective-and-task method

Developing the promotion budget by (1) defining specific promotion objectives, (2) determining the tasks needed to achieve these objectives, and (3) estimating the costs of performing these tasks. The sum of these costs is the proposed promotion budget.

channel conflict

Disagreements among marketing channel members on goals, roles, and rewards—who should do what and for what rewards.

good-value pricing

Offering just the right combination of quality and good service at a fair price

internal marketing

Orienting and motivating customer-contact employees and supporting service employees to work as a team to provide customer satisfaction. Employees <---> Company

personal selling

Personal presentation by the firm's sales force for the purpose of engaging customers, making sales, and building customer relationships.

marketing logistics (physical distribution)

Planning, implementing, and controlling the physical flow of materials, final goods, and related information from points of origin to points of consumption to meet customer requirements at a profit.

reference prices

Prices that buyers carry in their minds and refer to when they look at a given product.

psychological pricing

Pricing that considers the psychology of prices and not simply the economics; the price is used to say something about the product.

target costing

Pricing that starts with an ideal selling price and then targets costs that will ensure that the price is met.

allowance

Promotional money paid by manufacturers to retailers in return for an agreement to feature the manufacturer's products in some way.

marketing channel management

Selecting, managing, and motivating individual channel members and evaluating their performance over time.

segmented pricing

Selling a product or service at two or more prices, where the difference in prices is not based on differences in costs.

Service inseparability

Services are produced and consumed at the same time and cannot be separated from their providers.

Service Intangibility

Services cannot be seen, tasted, felt, heard, or smelled before they are bought.

promotional pricing

Temporarily pricing products below the list price, and sometimes even below cost, to increase short-run sales.

Packaging

The activities of designing and producing the container or wrapper for a product.

price

The amount of money charged for a product or service, or the sum of the values that customers exchange for the benefits of having or using the product or service.

return on advertising investment

The net return on advertising investment divided by the costs of the advertising investment.

co-branding

The practice of using the established brand names of two different companies on the same product.

optional-product pricing

The pricing of optional or accessory products along with a main product.

service variability

The quality of services may vary greatly depending on who provides them and when, where, and how they are provided.

Product Mix (product portfolio)

The set of all product lines and items that a particular seller offers for sale.

promotion mix (marketing communications mix)

The specific blend of promotion tools that the company uses to persuasively communicate customer value and build customer relationships. -Advertising - Sales promotion - Personal selling - Public relations (PR

advertising strategy

The strategy by which the company accomplishes its advertising objectives. It consists of two major elements: creating advertising messages and selecting advertising media.

total costs

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

brand value

The total financial value of a brand.

selective distribution

The use of more than one but fewer than all of the intermediaries that are willing to carry the company's products.

Social Marketing

The use of traditional business marketing concepts and tools to encourage behaviors that will create individual and societal well-being

advertising media

The vehicles through which advertising messages are delivered to their intended audiences.

interactive marketing

Training service employees in the fine art of interacting with customers to satisfy their needs. Employees <---> Customers