MARKETING FINAL!!

volume oriented pricing objective

focuses on revenue and unit sales

profit oriented pricing objectives

focuses on investment returns and profit margins

demand schedule

chart for what price = a certain demand (quantity down=price up)

demand curve

graph of demand schedule chart in visual format

what determines if demand is elastic or not?

a product is inelastic if it doesn’t have any close substitutes and people find it necessary so it’s not price sensitive

elastic

price sensitive (movie tickets), sales go down with higher price

inelastic

not price sensitive (gas) people pay regardless of price

how does inelastic demand affect revenue

revenue decrease = price increase

how does elastic demand affect revenue

price decrease and quantity decrease = revenue decrease

Fixed cost

does not change as output increases or decreases

Variable cost

changes with the level of output

Total cost

sum of fixed cost and variable costs

Break even point

number of units or quantity of product that must be sold at given price in order for cost to = revenue

Quantity Discounts

offered to encourage buyers to buy in larger quantities or remain loyal buyers

Cash Discounts

reward customers for paying off invoices (discount applied if paid within certain date)

Seasonal discounts

Discounts offered for buying merchandise out of season

FOB origin pricing

A price tactic that requires the buyer to absorb the freight costs from the shipping point (transfer of ownerships happens at the origin, when it’s loaded the title is transferred)

Uniform delivered pricing

A price tactic in which the seller pays the actual freight charges and bills every purchaser an identical, flat freight charge (title transferred when in warehouses, seller’s insurance covers walmart for damages)

Loss leader pricing

price tactic product is sold near or below cost in hope shoppers will buy other items once they are in the store

Bait and switch pricing

price tactic tries to get consumers in a store through false price advertising, uses high pressure selling to persuade consumers to buy more expensive merchandise

Odd even pricing

price tactic uses odd numbers prices to connote bargains and even numbered price to imply quality

Price bundling

marketing two or more products in a single package for a special price (cheaper then bought separately)

price fixing

collusion between businesses to charge highest price

price discrimination

give one retailer better deal than offered to other retailers

predatory pricing

offering lower prices to drive out other competitors

integrated marketing communications

strategy for coordination of promotion mix to keep same message with all communication tools

promotion mix

advertising, sales promotion, personal selling, social media and public relations

Advertising

impersonal one way mass communication about product or organization that is paid for by marketer

Sales promotion

 short term incentives used to arouse interest in buying a good or service (coupons, premiums, free samples)

Public relations

communication activities that seek to create and maintain positive image of organization and it’s products amongst various publics including customers government officials and shareholders

Social media

content marketing through social media platforms with promotional tools to create engagement

Personal selling

direct interaction between a company representative and customer that can occur in person, by phone, online chat

Communication process model

Sender, Encoding message, Message channel, Decoding message, Receiver, Feedback channel, Noise

Sender

1st part of Communication process model (marketing manager, advertising agency)

Encoding message

2nd part of Communication process model (sales presentation, store display, coupon, press release, social media)

Message channel

3rd part of communication process model (media, sales person, retail store, local news show)

Decoding message

4th part of communication process model (receiver, interpretation of message)

Receiver

5th part of communication process model (customers, clients, news media)

Feedback channel

6th part of communication process model (market research, sales results, change in market share, social media)

primary goals of promotion

inform (introduction stage), persuade (growth stage), remind (mature/decline stage)

Advertising campaign

series of related advertisements focusing on a common theme, slogan and set appeals that promote a particular product or company in a defined period of time

advertising campaign development process

Review marketing plan, Specify advertising objectives, Develop the creative plan, develop media plan

advertising objectives

Awareness of new product, Correct misconception about brand, Announce special reason for buying

creative plan development

key product benefits vs features, execution style (ex: slice of life storyboard and script)

Executional styles for advertising

slice of life, imagery, testimonial, demonstration, fear, humor

factors to consider when selecting media class

geographic selectivity, demographic selectivity, target market media usage, cost, life, nature of message, lead time

paid search advertising

paying for top results from search engine not ads on websites

Trade sales promotion

promotion activities directed to members of the marketing channel such as the wholesalers and retailers (push sales promotion)

Consumer sales promotion

promotion activities targets to the ultimate consumer market (pull sales promotion)

coupon

certificate that entitles customers to an immediate price reduction when they buy the product

rebate

cash refund given for the purchase of a product during a specific period

premium

extra item offered to consumer when the consumer purchases a product

loyalty program

promotional program that rewards consumers for making multiple purchases of a particular good or service

sweepstakes

promotions that depend on chance with free participation

sampling

promotional program that allows customers the opportunity to try a product or service for free

slotting allowance

free that retainers of charge manufacturers for privilege of shelf space for a new product

cooperative advertising

agreement between manufacturers and retailers (pays certain amount of other costs)

push money

special gifts and prizes offered by manufacturers to encourage retailer salespeople to reach specific sales goals of products

point of purchase materials

end of aisle displays, posters, banners, shelf cards and other materials used to market the manufacturer’s product in store

public relations

describes a variety of communication activities that seek to create and maintain a positive image of an organization and its products among various publics

publicity

effort to capture media attention often initiated through press releases that further a corporation’s public relation plans

product placement

public relations strategy that involved getting a product service or company name to appear in a movie or show

sponsorship

public relations strategy where company spends money to support an issue cause or even that is consistent with corporate objectives (brand awareness or image)

Crisis management

coordinated effort to handle all the effects of unfavorable publicity or another unexpected unfavorable event