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.

Indicates the money or other considerations exchanged for the ownership or use of a product or service.

Price

The practice of simultaneously increasing product benefits while maintaining or decreasing price.

Value pricing

Setting the highest initial price that customers willing to pay for a new or innovative product.

Skimming pricing

Setting a low initial price on a new product to appeal immediately to the mass market.

Penetration pricing

Setting a high price to attract quality or status-conscious consumers.

Prestige pricing

Setting prices a few dollars or cents under an even number.

Odd-even pricing

Marketing two or more products for a single package price.

Bundle pricing

Adding a fixed percentage to the cost of all items in a specific product class.

Standard markup pricing

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

Cost-plus pricing

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

Target return-on-sales pricing

Methods for setting price that focus on competition.

Competition-oriented pricing approaches

Setting a price dictated by tradition or competitive factors.

Customary pricing

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

Loss-leader pricing

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

Demand curve

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

Price elasticity of demand

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

Breakeven Point

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

Total revenue (TR)

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

Fixed cost (FC)

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

Variable cost (VC)

Variable cost expressed on a per unit basis.

Unit variable cost (UVC)

The total expense incurred to produce and market a product.

Total cost (TC)

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

Break-even analysis

A conspiracy among firms to set prices for a product.

Price fixing

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

Price discrimination

Price deals that mislead consumers.

Deceptive pricing

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

Bait and switch

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

Predatory pricing

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

Everyday low pricing (EDLP)

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

ROI

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

Marketing channel

An individual or firm that assists manufacturers in distributing products to end users.

Intermediary

An intermediary who sells to other intermediaries, usually retailers.

Wholesaler

An intermediary who sells to consumers.

Retailer

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

Agent or broker

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

Direct channel

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

Indirect channel

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

Dual distribution

Strategy of combining mutually reinforcing communication and delivery channels.

Multichannel marketing

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

Channel conflict

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

Logistics

Tendency to exaggerate inventory needs in response to unpredictable demand.

Bullwhip effect

Process of reclaiming reusable materials from the point of consumption.

Reverse logistics

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

Intensive distribution

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

Selective distribution

Distribution density where only one retailer in a specific area carries the firm's products.

Exclusive distribution

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

Forward Integration

A retailer producing some of its own products.

Backward Integration

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

Channel of communication

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

Field of experience

Extraneous factors that distort communication.

Noise

Combination of communication tools to inform and persuade prospective buyers.

Promotional mix

Designing marketing communications programs that provide consistent messaging.

Integrated marketing communications (IMC)

Any paid form of nonpersonal communication by an identified sponsor.

Advertising

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

Personal selling

Communication management aiming to influence public perception.

Public relations

Nonpersonal, indirectly paid presentation of an organization or product.

Publicity

Short-term inducement of value to encourage product interest.

Sales promotion

Direct communication with consumers to generate a response.

Direct marketing

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

Push strategy

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

Pull strategy

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

Target audience

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

Hierarchy of effects

Loyal consumers recommending brands to others.

Advocacy (Consumer)

Spending set as a percentage of past or anticipated sales.

Percentage of sales budgeting

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

Competitive parity budgeting

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

All-you-can-afford budgeting

Budget determined by setting promotion objectives and calculating task costs.

Objective and task budgeting

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

Traffic generation

Result of direct marketing offers generating interest in a product.

Lead generation

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

Direct orders

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

Advertising

Advertisement that focuses on selling a specific product.

Product advertisement

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

Institutional advertisement

Advertisement that informs people about a new product category.

Pioneering (or informational) advertisement

Advertisement promoting a specific brand based on its features.

Competitive (or persuasive) advertisement

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

Comparative advertisement

Reinforcement of previous product knowledge during the maturity stage.

Reminder product advertisement

Assures users of a product they made the right choice.

Reinforcement advertisement

States a company's position on an issue.

Advocacy (Institutional) advertisement

Announces what a company is or where it is located.

Pioneering institutional advertisement

Promotes advantages of one product class over another.

Competitive institutional advertisement

Reinforces previous knowledge about a company or organization.

Reminder institutional advertisement

Sales tools supporting advertising directed to ultimate consumers.

Consumer-oriented sales promotions

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

Deals

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

Coupon

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

Rebate

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

Sample

Promotion offering a premium as a customer accumulates purchases.

Loyalty Program

Game requiring analytical or creative effort to win a prize.

Contest

Games of chance requiring no effort to win a prize.

Sweepstake

Signage displaying products where purchase decisions are made.

Point-of-purchase (POP) display

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

Product placement

Suggests consumers can avoid negative experiences through product purchase.

Fear appeal

Implies a product will increase the user's attractiveness.

Sex appeal

Implies a product is more exciting than competitors' offerings.

Humorous appeal

Number of different people or households exposed to an advertisement.

Reach

Percentage of households in a market watching a specific media.

Rating

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

Frequency

Reach multiplied by frequency.

Gross rating points (GRPs)

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

Cost per thousand (CPM)