Marketing Exam 3

Retail

sale of goods or services to final customer

24%

What percentage of 2025 U.S sales was retail?

Product assortment/merchandise mix

range of choice offered to consumer in classification of merch

product line

group of related products marketed and sold by same company/brand

product depth

number of individual products in a line

product width

number of varieties of product lines

product type

the products within a product line

convenience store

small, located in residential areas, limited product line, wide but not deep

specialty store

select goods related to a brand, narrow and deep product lines

discount stores

products at discount from overruns, buyouts etc.

department store

divided into smaller product lines, wide

supermarket

grocery store and basic household items

supercenter

large, part of chain, general merch or specialty

retail atmospherics

differentiated details inside store with physical environment that influence customer behavior

visual merchandising

floor plans and 3 dimensional displays

floor plans

design of floor space to facilitate flow of traffic and shopping

supermarkets and supercenters

grid layout stores

convenience

diagonal layout stores

IKEA

racetrack layout example

department

spine layout stores

boutique

free flow layout stores

online/mobile sales increase, department store sales decrease

changes in retail landscape

online resistance stores

stores that sell items you have to get physically

create an experience, add services, go local, omnichannel

how to make retail thrive

omnichannel

stores that use online and physical options

Price is what you pay, value is what you get

Warren Buffet quote

price

amount of money charged for product or service

value

what product or service is worth to consumer

fixed cost

costs associated with operating/marketing expenses

variable cost

per unit cost associated with a product

breakeven quantity

quantity needed to cover fixed cost

breakeven price

price the quantity needs to be sold at to break even at a given quantity

markup

added percentage or dollar amount to cost to determine selling price

markup equation

(price - cost) / cost

direct markup inputs

variable cost

full markup

variable and fixed cost

profit margin

difference between selling price and cost

profit margin equation

(price - cost) / price

cost based pricing

use cost of good/service as basis for selling price

cover cost, easy

pros of cost-based pricing

may not take advantage of possible selling price

cons of cost-based pricing

value-based pricing

use perceived consumer value for selling price

consumers value the product/service differently

ethical concerns for value based pricing

dynamic pricing

variable rate for each customer depending on demand

market-based pricing

deciding price based on demand in the market and competitor prices

flat-rate pricing

one rate for unlimited use in a specific timeframe

price skimming

introduces a product at a high price then lowers incrementally over time

market penetration

introduces product at a low price to gain market share

a la carte pricing

pricing where customer can add or take off components to determine final price

Odd even pricing

sets price a few cents/dollars under an even number

reference pricing

using another price as a reference point to make product appealing

extremity aversion pricing

tendency to avoid extreme options, choose middle instead

prestige pricing

high price for perception that elite customers will buy them

bundle pricing

packaging 2+ goods/services to sell for single price

multiple-unit pricing

loss leader

sell a popular item at a lower price, covered by additional sales elsewhere

company, customer, competitors

Pricing strategy framework

Company pricing strategy

how much does the good/service COST for company

Customer pricing strategy

how much do customers VALUE good/service

Competitors pricing strategy

what is the MARKET pricing

dumb industry

compete on price

smart industry

complex pricing structures

elasticity

change in demand in response to change in price

inelastic

elasticity is less than 1

elastic

elasticity is greater than 1

Promotion

external persuasive means of communication with customers

goal of promotion

show that product/service and exists and how it provides value

ad campaign

series of ad messages that share common idea and theme and runs for a limited amount of time

Steps to create ad campaign

research customer, clarify purpose, set goals, decide medium, decide content, decide when to run ad, decide length and how often to run ad, check what goals were met

integrated marketing communications

cohesive combination of marketing communication activities, techniques and media designed to deliver a message to target market while achieving common objectives

Attention, Interest, Desire, Action

AIDA meaning

promotional mix

understand where customers are and which parts will blend together best for customer

sales promotion

short term, external promotion designed to influence immediate purchase

public relations

practice of managing the spread of information between an individual and the public

personal selling

frontline interaction between company representative and potential buyer to influence purchase decision

Stages of personal selling

prospecting, pre approach, approach, presentation, close, follow up

direct marketing

promotional efforts using direct mail or telemarketing with goal of receiving a direct response from customer

advertising

external communication that is paid by the seller and promotes product

inform, persuade, remind, reinforce

functions of advertising

advertising media

various means which promotional messages are communicated to the public

advertising media examples

TV, radio, print, billboard, digital

reach

number of people exposed to an ad

impression

possible exposure of an ad

frequency

the average number of times the members of a defined market were exposed to an add

effective frequency

minimum number of times that a person needs to be exposed to an ad

simple, unexpected, concrete, credible, emotional, stories

SUCCES model

Search Engine Optimization

process of getting traffic from search results through organic search engines

crawling

programs that visit every page of each site to determine what content they hold

indexing

search engines create a listing or directory of the content found through the crawling process

paid digital advertising

pay others to be placed high on SERP

Search engine results page

SERP meaning

organic

quality SEO gets higher SERP

natural backlinks

other sites link to you based on value

manufactured backlinks

connecting with another site to benefit each other

self created backlinks

posting your own link on sites/social media

pay per click

advertiser pays each time a customer clicks on a link

online display advertising

an ad on a different website than one you own

pay per click impressions

each time an ad is displayed

clicks

whenever an PPC as is clicked, first desired action

cost per click

amount of money for PPC