BUS220 Marketing Practice Test 3: Supply Chain, Pricing, Retail, and Digital Marketing

Comprehensive practice flashcards reviewing supply chain concepts, pricing methods, retail strategy, and digital marketing foundations.

Retail Link

Walmart's system that connects suppliers and manufacturers in real time to inventory levels and sales data.

Push strategy

A supply chain strategy where a company manufactures products first and then attempts to sell them to customers.

Pull strategy

A supply chain approach where goods are only manufactured or purchased when specifically needed or demanded by the customer.

What are some of the major categories of inventory costs

• order costs (including freight inwards: the shipping or transport cost a business pays to bring goods, raw materials, or inventory into its own warehouse, store, or factory from a supplier),

• opportunity (stock out costs: Shortage costs occur when customer demand exceeds the available inventory, leaving the business unable to fulfill an order immediately.),

• carrying costs (financing, staff, storage space including insurance, heating and cooling)

Stockout costs (opportunity costs)

Shortage costs occur when customer demand exceeds the available inventory, leaving the business unable to fulfill an order immediately.

Order costs

Expenses incurred when placing inventory replenishment orders, including freight inwards, ie the shipping or transport cost a business pays to bring goods, raw materials, or inventory into its own warehouse, store, or factory from a supplier

Carrying/Holding Costs

financing, staff, storage space including insurance, heating and cooling.

Warehouse functions

The primary operational tasks of a warehouse: receiving, putting away, picking, and shipping.

5 Modes of transportation

The channels used to move products in a supply chain ARE: water, air, road, rail, cyberspace, and pipeline.

ISO 14001

An international standard requiring products and transportation systems to comply with environmental regulations for recycling, energy efficiency, hazardous waste management, and energy-efficient transit.

What are the objectives of pricing?

The primary goal of pricing, which is to maximize profit through the optimal combination of highest price and sales volume.

Price elasticity

A measure of how demand reacts to price; demand is elastic when it changes significantly with price changes, and inelastic when it does not change much.

SP, VP, FP

A framework used in pricing strategies to evaluate Selling Price (SP), Variable Price (VP), and Fixed Price (FP) to determine profitability and market positioning.

Break-even analysis

A break-even analysis is a math calculation that tells you how many products or services you must sell to cover all of your costs. [1, 2]

At this "break-even point," your business makes zero profit and zero loss—your total income equals your total expenses. Anything you sell past that point is pure profit

• Fixed Costs: Bills you have to pay no matter what, even if you sell zero items (like rent, insurance, or website hosting).

• Variable Costs: Expenses that go up every time you make or sell one more item (like raw materials, packaging, or shipping).

• Selling Price: How much money you charge a customer for a single item

A calculation that determines how many units must be sold before a business begins earning a profit, represented by the relationship $(SP - VC) \times \text{units} - FC = NP$.

Underpricing

Selling a product or service for a lower price than what customers are actually willing to pay.

Unbundling

Separating components of a product and its associated services so that a customer only pays for what he or she specifically wants.

Shrinkflation

Decreasing the physical size or quantity of a product while keeping the price the same or only increasing it nominally.

Markup pricing

A cost-plus pricing strategy where a set margin or percentage is added directly on top of the product's unit cost.

Odd-even pricing

A psychological pricing tactic that prices goods ending in odd numbers (such as $\$1.95$) rather than even numbers (such as $\$2.00$).

Prestige pricing

Pricing a product at an elevated, high level to signal exclusivity and superior quality.

Loss leader

Selling a selected product at a loss to draw in customer foot traffic and generate profitable sales on complementary items. (likely not for long term)

Seasonal discounts

Price reductions applied to seasonal goods, such as winter or summer products, at the end of their peak demand period.

Price bundling

Combining multiple products and/or services into a single package offered at one combined price.

Penetration pricing

Introducing a product with an initially low price to break into a market and capture customer share quickly.

Price skimming

Charging a high initial price when a product is newly released, supply is limited, and early buyers are willing to pay a premium.

Dynamic pricing

Adjusting prices continuously throughout the day based on real-time shifts in consumer demand.

Predatory pricing

Setting very low prices with the intention of driving competitors out of the market, followed by raising prices once competition is eliminated.

Price fixing

An illegal agreement between competing firms to collude and set specific prices within a market or region.

Price discrimination

Charging different prices for the exact same good or service to different consumer segments.

Black market vs Grey Market

An underground economic market where the buying and selling of goods or services is strictly illegal.

VS

A legal distribution channel that sells authentic goods without the authorization of the original manufacturer's designated import agents.

What is the role of WTO and NAFTA and what are the key issues?

WTO regulates trade, preventing excessive tariffs ensuring free trade, prevent dumping as well.

NAFTA north American free trade agreement regulates tariffs between US, Canada and Mexico

Breadth (merchandise breadth)

The variety or number of different product categories carried by a retail store.

Depth (merchandise depth)

The number of different brands and options offered within a specific product category.

Business franchise vs Corporate Chain

A franchising model focused on the method of doing business or distributing a specific brand/product, such as Exxon gasoline stations.

VS

A group of retail stores that are completely owned and operated by a single central company.

Cooperative chain

A business structure where independent retailers pool resources and work cooperatively together, exemplified by NAPA.

Voluntary chain

A network of independent store owners who voluntarily contract to source products from a common supplier, such as IGA.

Retail store locations

Common physical sites for retailers including central business districts (CBD), shopping malls, standalone facilities, airports, and college campuses.

Retail outlet layouts

Floor arrangements used in store design, specifically grid, spine, free flow, and loop configurations.

Store atmosphere

The sensory elements designed to influence retail shoppers, encompassing music, lighting, colors, models, scents, and visual displays.

Geofence

A virtual boundary that detects a consumer's mobile device entering a geographic area, triggering targeted advertisements and special offers.

Omni-channel retailing

An integrated retail model that merges digital/online storefronts seamlessly with physical brick-and-mortar stores.

Augmented reality (retail)

Interactive technology enabling consumers to visualize how physical products, such as paint colors or furniture, look inside their personal homes before buying.

Bulk breaking

A core wholesaling function of purchasing large quantities from manufacturers and dividing them into smaller, manageable batches for retailers.

Paid media

Marketing channels and advertising material directly purchased and funded by a brand.

Owned media

Digital properties entirely controlled by a company, including its official corporate website and brand-operated social media accounts.

Earned media

Organic publicity generated by consumers and the general public, including online discussions, reviews, shares, and customer comments.

First moment of touch

The initial instance an individual encounters or becomes aware of a product or brand concept.

Zero moment of touch

The precise stage when a prospective customer initiates an online search to learn about a product before buying.

Search Engine Optimization (SEO)

The practice of optimizing web content to improve unpaid, organic rankings and visibility in search engine results.

Search Engine Marketing (SEM)

The practice of growing search engine visibility and traffic through paid promotional placements and advertisements.

Social listening

The process of tracking and analyzing public online conversations to hear what consumers are saying about a business on social platforms.

Reach

A social media performance metric denoting the total count of distinct individuals who see a given piece of marketing content.

Sentiment

A digital marketing metric that tracks the emotional orientation, approval, brand loyalty, or favorability exhibited by audience members.

Engagement

A measure of active audience participation with marketing posts, including reading, sharing, reporting, or commenting.

Conversion

The critical step in digital marketing where an audience member moves from merely viewing marketing material to making an actual purchase.

Cambridge Analytica scandal

A major data controversy involving the unauthorized scraping of personal data from 87 million American Facebook users to target political ads for a 2016 campaign.