Marketing Exam 2

What is a nondurable good

A good consumed in one or a few uses such as food or toothpaste.

What is a durable good

A good that lasts for an extended period such as an appliance or car.

What is the key marketing difference between nondurable and durable goods

Nondurables rely on mass advertising and wide distribution while durables rely heavily on personal selling.

What are convenience products

Frequently purchased products requiring little effort such as bread or toothpaste.

What are shopping products

Products consumers compare on price and quality across selected retailers such as clothing or TVs.

What are specialty products

Products with high consumer effort, strong brand loyalty, and limited availability such as Rolex.

What are unsought products

Products consumers do not actively think about buying such as burial insurance.

What is continuous innovation

An innovation requiring no new learning such as improved detergent.

What is dynamically continuous innovation

An innovation involving slight disruption and minimal learning such as an electric toothbrush.

What is discontinuous innovation

An innovation requiring entirely new learning and behaviors such as VR or EVs.

What is the marketing strategy for continuous innovation

Build awareness and use wide distribution.

What is the marketing strategy for dynamically continuous innovation

Advertise the product's points of difference.

What is the marketing strategy for discontinuous innovation

Educate consumers through product trial and personal selling.

What are the 7 stages of new product development in order

Strategy Development, Idea Generation, Idea Screening, Business Analysis, Development, Market Testing, Commercialization.

What is strategy development

Creating a new product strategy that fits the company's objectives.

What is idea generation

Developing or gathering potential new product ideas.

What is idea screening

Evaluating ideas and eliminating those that do not fit the company's objectives or resources.

What is business analysis

Evaluating a product's potential sales, costs, profits, and feasibility.

What happens during development

The product concept is turned into an actual product.

What happens during market testing

The product is tested with consumers or in selected markets before launch.

What happens during commercialization

The product is launched into the broader market.

What is product repositioning

Changing consumer perception of a product relative to competitors.

What is the introduction stage of the PLC

Build awareness and stimulate primary demand.

What is the growth stage of the PLC

Differentiate the brand as competitors enter the market.

What is the maturity stage of the PLC

Maintain loyalty as sales plateau and price competition increases.

What is the decline stage of the PLC

Sales fall and the company may harvest or delete the product.

What is harvesting

Cutting costs to maximize remaining profits from a declining product.

What is product deletion

Dropping a product from the company's offerings.

What are market modification strategies

Find new users, increase usage among current users, or create new usage occasions.

What is multiproduct branding

Using one brand name for all products.

What is multibranding

Using different brand names for different product lines.

What is private branding

A manufacturer produces goods sold under a retailer's label.

What is mixed branding

Selling products under both the company's brand and a reseller's brand.

What is brand equity

The value a brand adds through awareness, associations, perceived quality, and loyalty.

What is demand

The quantity of a product consumers are willing and able to purchase at different prices.

What causes movement along a demand curve

A change in the product's own price.

What causes a shift in a demand curve

Changes in external factors such as income, tastes, or substitute prices.

What is elastic demand

Demand where absolute price elasticity is greater than 1 and quantity demanded is highly price-sensitive.

What is inelastic demand

Demand where absolute price elasticity is less than 1 and quantity demanded is relatively price-insensitive.

What is unit margin

Price minus unit variable cost.

What is the formula for unit margin

Unit Margin = Price - UVC.

What is percent margin

Unit margin expressed as a percentage of price.

What is the formula for percent margin

Percent Margin = Unit Margin divided by Price multiplied by 100.

What is break-even quantity

The quantity where total revenue equals total costs.

What is the formula for break-even quantity

Break-Even Quantity = Fixed Cost divided by Price minus UVC.

What is skimming pricing

Setting a high initial price and lowering it over time.

What is penetration pricing

Setting a low initial price to quickly gain market share and deter competitors.

What is prestige pricing

Setting a high price to signal quality, status, or exclusivity.

What is loss-leader pricing

Selling an item at or below cost to attract customers who may buy other profitable products.

What is bundle pricing

Selling two or more products together for one price.

What is one-price pricing

Charging all customers the same price for the same product under the same conditions.

What is flexible pricing

Charging different customers different prices for the same product.

What is a merchant

An intermediary that takes legal ownership of the goods.

What is a broker or agent

An intermediary that does not take legal ownership and facilitates transactions.

What is a direct channel

A channel where the producer sells directly to the consumer.

What is an indirect channel

A channel that uses one or more intermediaries.

What is channel length

The number of levels or intermediaries between the producer and consumer.

What is channel breadth

The number of outlets used at each level of distribution.

What is channel depth

The degree to which a company owns or controls multiple channel levels.

What is intensive distribution

Using as many outlets as possible, typically for convenience goods.

What is selective distribution

Using a limited number of selected retailers, typically for shopping goods.

What is exclusive distribution

Using only one outlet per geographic area, typically for specialty goods.

What is forward integration

A manufacturer moves down the distribution chain toward the consumer.

What is backward integration

A retailer moves up the distribution chain toward production.

What is vertical channel conflict

Conflict between different levels of the same channel such as a manufacturer and retailer.

What is horizontal channel conflict

Conflict between firms at the same channel level.

What is dual distribution

Using two or more channels to distribute the same product.

What are channel functions

Activities such as buying, selling, transporting, storing, financing, and facilitating exchanges.

What are the 3 goals of promotion

Inform, persuade, and remind.

What does inform mean in promotion

Build awareness and provide product information.

What does persuade mean in promotion

Create brand preference or encourage product trials.

What does remind mean in promotion

Keep the brand top-of-mind for consumers.

What is a push strategy

Promoting to channel members so they stock and sell the product.

What is a pull strategy

Promoting directly to consumers so they demand the product from retailers.

What is the difference between push and pull

Push targets channel members while pull targets end-consumers.

What factors influence the promotional mix

The product, target audience, product life cycle stage, buying decision, and push or pull strategy.

What is the formula for break-even quantity

Break-Even Quantity = Fixed Costs divided by Price minus UVC.

What is the break-even price if fixed costs are $50,000, UVC is $50, and quantity is 1,000

$100.

How do you solve the break-even price problem

1,000 = 50,000 divided by Price minus 50, so Price minus 50 = 50 and Price = $100.

What is the difference between movement and shift in demand

Movement is caused by the product's own price while a shift is caused by external factors.

What is the difference between elastic and inelastic demand

Elastic demand has an absolute elasticity above 1 while inelastic demand has an absolute elasticity below 1.

What is the difference between skimming and penetration pricing

Skimming starts high and decreases over time while penetration starts low to gain market share.

What is the difference between merchants and brokers

Merchants take title to goods while brokers do not.

What is the difference between direct and indirect distribution

Direct distribution has no intermediaries while indirect distribution uses intermediaries.

What is the difference between intensive, selective, and exclusive distribution

Intensive uses many outlets, selective uses selected outlets, and exclusive uses one outlet per geographic area.

What is the difference between forward and backward integration

Forward integration moves toward the consumer while backward integration moves toward production.

What is the difference between vertical and horizontal conflict

Vertical conflict occurs between different channel levels while horizontal conflict occurs at the same level.

What is the difference between push and pull promotion

Push targets channel members while pull targets consumers.