Marketing and Supply Chain Notes Unit 3

Marketing mix

The combination of product, price, place, and promotion strategies that a company uses to market its products.

Defining Price

The overall sacrifice a consumer will be willing to make to acquire a specific product or service.

Five Cs of Pricing

Factors that influence pricing: Competition, Costs, Company objectives, Customers, Channel members.

Profit oriented

A pricing strategy where a company aims for a specified profit margin to achieve profit goals.

Sales oriented

A pricing strategy where prices are set low to increase sales and take market share from competitors.

Competitor oriented

A pricing strategy that discourages competition by setting prices low.

Customer oriented

A pricing strategy focused on customer expectations and perceived value of a product.

Target profit pricing

When firms implement pricing based on a specific profit goal.

Maximizing profits

A pricing objective that aims to achieve the highest profit margins possible.

Market leadership

Setting lower prices to gain market share, often at the expense of short-term profits.

Prestige products

Products purchased for status rather than functionality, often with unique demand curves.

Price elasticity of demand

A measure of how much the quantity demanded of a product changes in response to price changes.

Elastic demand

Demand that is sensitive to price changes.

Inelastic demand

Demand that is not sensitive to price changes.

Income effect

Changes in consumer demand due to changes in income.

Substitution effect

The change in quantity demanded of one product due to a change in the price of another product.

Cross-price elasticity

The percentage change in the quantity demanded of one product in response to a price change in another product.

Variable costs

Costs that vary directly with the production volume.

Fixed costs

Costs that do not change regardless of production volume.

Total cost

The sum of variable and fixed costs.

Break even point

The number of units sold where total revenue equals total costs, resulting in zero profit.

Forms of competition

Types of market structures including monopoly, oligopoly, monopolistic competition, and pure competition.

Everyday low pricing (EDLP)

A pricing strategy that offers consistently low prices rather than discounts.

High/low pricing

A strategy that involves occasionally discounting prices to entice consumers.

Market penetration pricing

Setting an initially low price to enter a competitive market.

Price skimming

Setting a high price initially for a new product that decreases over time.

Deceptive pricing

Illegal pricing practices that mislead consumers, such as bait-and-switch.

Predatory pricing

Setting prices low with the intention of driving competitors out of business.

Price fixing

An illegal agreement between competitors to set prices at a certain level.

Retailing

The activities involved in selling products directly to consumers.

Omnichannel marketing

A multichannel approach to sales that seeks to provide customers with a seamless shopping experience.

Supply chain management

The management of the flow of goods and services from manufacturers to consumers.

Distribution intensity

Levels of distribution including intensive, selective, and exclusive.

Category specialist

Retailers that focus on a specific category of products with a deep assortment.

Service retailers

Firms that primarily sell services instead of physical goods.

Retail strategy

Plans that guide retailers in terms of store format, pricing, and customer service.

Online retailing

Selling products and services exclusively over the internet.

Consumer expectations

What buyers anticipate regarding product availability and pricing.

Sales forecasting

The process of estimating future sales based on past data and market analysis.

Qualitative forecasting methods

Forecasting based on subjective judgment and expert opinions rather than statistical data.

Quantitative forecasting methods

Forecasting based on statistical analysis of historical sales data.

Mean Absolute Deviation (MAD)

A measure of the average error between predicted and actual sales.

Mean Absolute Percent Error (MAPE)

A percentage measure to assess forecast accuracy across multiple products.

Mean Square Error (MSE)

A measure that gives more weight to larger errors in forecasting.

Big Data

Extensive datasets that can be analyzed for patterns and insights in marketing.

Data mining

The process of analyzing data to discover patterns and relationships.

Ethics in marketing research

Principles that guide the responsible use of customer data and information.

Consumer behavior analysis

The study of how individual consumers make decisions to spend their resources.