Marketing and Pricing Strategies Test 3 11-16

These flashcards cover key concepts and terminology related to marketing, pricing strategies, and communication methods as outlined in the lecture notes.

Cost-plus pricing

Calculating the total unit cost of providing a product and adding a specific amount to arrive at a price.

Target return-on-sales pricing

Setting prices to achieve a profit that is a specified percentage of sales revenue.

SKimming pricing

setting a high inital price to help company recover development costs

Customary pricing

Setting a price dictated by tradition or competitive factors.

Loss-leader pricing

Selling a product below its customary price to attract customers' attention.

Demand curve

A graph that shows the maximum number of units sold at a given price.

Price elasticity of demand

The percentage change in quantity demanded relative to a percentage change in price.

Breakeven Point

The quantity at which total revenue and total cost are equal.

Total revenue (TR)

Money received from the sale of a product—the product of price and quantity.

Fixed cost (FC)

The sum of expenses that do not change with the quantity sold.

Variable cost (VC)

The sum of expenses that vary directly with the quantity produced.

Unit variable cost (UVC)

Variable cost expressed on a per unit basis.

Total cost (TC)

The total expense incurred to produce and market a product.

Break-even analysis

Technique that analyzes the relationship between total revenue and total cost to determine profitability.

Price fixing

A conspiracy among firms to set prices for a product.

Price discrimination

Charging different prices to different buyers for goods of like grade and quality.

Deceptive pricing

Price deals that mislead consumers.

Bait and switch

When a firm offers a very low price on a product to attract customers, then tricks them into purchasing a higher-priced item.

Predatory pricing

Charging a very low price for a product to drive competitors out of business.

Everyday low pricing (EDLP)

Replacing promotional allowances with lower manufacturer list prices to decrease average consumer prices.

ROI

Return on Investment; ratio of sales revenues to those of the industry.

Marketing channel

Network of individuals and firms that make a producer's product available to end users.

Density

comprehensive a channel of distribution is for a target

Wholesaler

An intermediary who sells to other intermediaries, usually retailers.

Retailer

An intermediary who sells to consumers.

Agent or broker

An intermediary with the legal authority to act on behalf of the manufacturer.

Direct channel

A marketing channel with no intermediaries between the producer and the end user.

Indirect channel

A marketing channel with at least one intermediary between the producer and the end user.

Dual distribution

Strategy of using two or more channels to reach different buyers of the same product.

Multichannel marketing

Strategy of combining mutually reinforcing communication and delivery channels.

Channel conflict

Conflict arising when one channel member believes another is hindering its goals.

Logistics

Activities required to move product inputs and finished products through the supply chain.

Bullwhip effect

Tendency to exaggerate inventory needs in response to unpredictable demand.

Reverse logistics

Process of reclaiming reusable materials from the point of consumption.

Intensive distribution

Distribution density where a firm tries to place its products in as many outlets as possible.

Selective distribution

Distribution density where a firm selects a few retailers in a specific area to carry its products.

Growth Stage

Stage of the product life cycle is characterized by rapid increases in sales. Competitors begin to emerge and distribution expands. Emphasis on product differentiation.

Forward Integration

A producer owning an intermediary at the next level down in the marketing channel.

Backward Integration

A retailer producing some of its own products.

Channel of communication

Medium used to transmit the message from the sender to the receiver.

Field of experience

Frame of reference that influences how messages are encoded and decoded.

Noise

Extraneous factors that distort communication.

Promotional mix

Combination of communication tools that inform buyers, persuade, and remind later about the benefits of a product.

Integrated marketing communications (IMC)

Designing marketing communications programs that provide consistent messaging.

Advertising

Any paid form of nonpersonal communication by an identified sponsor.

Personal selling

Two-way flow of communication designed to influence a purchase decision.

elements of promotional mix

advertising, personal selling, public relations, and direct marketing are all.

Publicity

Nonpersonal, indirectly paid presentation of an organization or product.

Sales promotion

Short-term inducement of value to encourage product interest.

Direct marketing

Direct communication with consumers to generate a response.

Push strategy

Directing promotional mix to channel members to gain cooperation in product stocking.

Pull strategy

Directing promotional mix at consumers to encourage them to ask retailers for a product.

Target audience

Group of prospective buyers toward which a promotion program is directed.

Hierarchy of effects

Sequence of stages a prospective buyer goes through from awareness to action.

Advocacy (Consumer)

Loyal consumers recommending brands to others.

Percentage of sales budgeting

Spending set as a percentage of past or anticipated sales.

Competitive parity budgeting

Spending set to match competitors' spending or relative market share.

All-you-can-afford budgeting

Spending on promotion occurs only after all other expenses are covered.

Objective and task budgeting

Budget determined by setting promotion objectives and calculating task costs.

Traffic generation

Outcome of a direct marketing offer motivating people to visit a business.

Lead generation

Result of direct marketing offers generating interest in a product.

Direct orders

Results that contain all the information necessary for a purchase decision.

Advertising

Any paid form of nonpersonal communication about an organization or product.

Product advertisement

Advertisement that focuses on selling a specific product.

Institutional advertisement

Advertisement designed to build goodwill or a positive image for an organization.

Pioneering (or informational) advertisement

Advertisement that informs people about a new product category.

Competitive (or persuasive) advertisement

Advertisement promoting a specific brand based on its features.

Comparative advertisement

Form of a competitive advertisement showing a brand's strengths relative to competitors.

Reminder product advertisement

Reinforcement of previous product knowledge during the maturity stage.

Reinforcement advertisement

Assures users of a product they made the right choice.

Advocacy (Institutional) advertisement

States a company's position on an issue.

Pioneering institutional advertisement

Announces what a company is or where it is located.

Competitive institutional advertisement

Promotes advantages of one product class over another.

Reminder institutional advertisement

Reinforces previous knowledge about a company or organization.

Sales Promotion

Short-term inducement of value offered to arouse interest in buying a product or service

Deals

Short-term price reductions used to increase trial among potential customers.

Coupon

Voucher for a discount on a particular product at purchase time.

Rebate

Partial refund on a product purchase after proof of purchase is submitted.

Sample

A product offered for free or at a greatly reduced price.

Loyalty Program

Promotion offering a premium as a customer accumulates purchases.

Contest

Game requiring analytical or creative effort to win a prize.

Sweepstake

Games of chance requiring no effort to win a prize.

Point-of-purchase (POP) display

Signage displaying products where purchase decisions are made.

Product placement

Using a brand-name product in media to promote it.

Fear appeal

Suggests consumers can avoid negative experiences through product purchase.

Sex appeal

Implies a product will increase the user's attractiveness.

Humorous appeal

an Approach to communication that Implies a product is more exciting than competitors' offerings.

Reach

Number of different people or households exposed to an advertisement.

Rating

Percentage of households in a market watching a specific media.

Frequency

Average number of times someone in the target audience sees an ad.

Gross rating points (GRPs)

Reach multiplied by frequency.

Cost per thousand (CPM)

Cost of reaching 1,000 individuals with an advertising message.

Continuous (or steady) schedule

Advertising run on a steady schedule year-round.

Flighting (or intermittent) schedule

Periods of advertising scheduled between no advertising periods.

Pulse (or burst) schedule

Schedule combining flighting with a continuous schedule.

Aided recall

Ad testing showing respondents an ad and asking about their exposure.

Unaided recall

Ad testing determining how well respondents remember an ad without prompts.

Public Service Announcement

Message broadcast on media using space/time donated by the channel.

News conference

Informational meeting with media to announce new products or changes.

News release

Announcement about changes providing media with story ideas.