Marketing 300 exam 2 uw madison

marketing 300

marketing research

procedures that develop and analyze the new information about a market

scientific method

a decision making approach that focuses on being objective and orderly in testing ideas before accepting them

experimental method

researchers compare the respinses of two (or more) groups that are similar except on the characteristic being tested

population

total group the researcher is interested in

sample

a part of the relevant population

validity

concerns the extent to which data measure what they are intended to measure

data analysis

process of inspecting, cleansing, transforming, and modeling data with the goal of discovering useful information, suggesting conclusions, and supporting decision-making

big data

data sets too large and complex to work with typical data-base management tools

confidence interval

the range on either side of an estimate that is likely to contain the true value for the whole population

margin of error

an amount (usually small) that is allowed for in case of miscalculation or change of circumstances

hypotheses

educated guesses about the relationship between things or about what will happen in the future

marketing research process

a five step application of the scientific method that includes:
1) defining the problem
2) analyzing the situation
3) getting problem-specific data
4) Interpreting the data
5) solving the problem

Situation analysis

an informal study of what information is already available in the problem area

secondary data

information that has been collected of published already

ex: books, the internet, magazines

primary data

information specifically collected to solve a current problem

ex: surveys, intranet, focus groups

research proposal

a plan that specifies what information will be obtained and how \-- to be sure no misunderstandings occur later

qualitative research

seeks in-depth, open ended responses, not yes or no answers

focus group

one widely used form of qualitative questioning in marketing research, which involves simultaneously interviewing 6 to 10 people in an informal group setting

quantitative research

seeks structured responses that can be summarized in numbers, such as percentages, averages, or statistics

price

the amount of money that is charged for "something" of value

the only P of the 4 P's that directly correlates to profit

target return objective

sets a specific level of profit as an objective

profit maximization objective

seeks to get as much profit as possible

sales oriented objective

seeks some level of unit sales, dollar sales, or share of market\-- without referring to profit

status quo objectives

don't rock the pricing boat objective
stabilize prices, or meet competition, or avoid competition

nonprice competition

aggressive action on one or more of the P's other than price

skimming price policy

tries to sell the top (skim the cream) of the market
(tries to sell high first before dropping the price to more price-sensitive consumers)

penetration pricing policy

tries to sell to the whole market at one low price

discounts

reductions from list price given by a seller to buyers who either give up some marketing function or provide the functions themselves

quantity discounts

discounts offered to encourage customers to buy in larger amounts

cumulative quantity discounts

apply to purchases over a given period \-- such as a year \-- and the discount usually increases as the amount increases

encourage repeat buying

noncumulative quantity discounts

apply only to individual orders, such discounts encourage larger orders but do not tie a buyer to the seller after that one purchase

seasonal discounts

discounts offered to encourage buyers to buy earlier than present demand requires

cash discounts

reductions in price to encourage buyers to pay their bills quickly

2/10, net 30

2% discount off face value of the invoice if the invoice is paid within 10 days

everyday low pricing

setting a low price rather than relying on frequent sales, discounts, or allowances

allowances

like discounts, are given to the final consumers, business customers, or channel members for doing something or accepting less of something

stocking allowances

give to an intermediary to get shelf space for a product

push money allowances

given to retailers by manufacturers or wholesalers to pass on to the retailers' sales clerks for aggressively selling certain items

trade-in allowances

is a price reduction given for used products when similar new products are bought

rebates

refunds paid to customers after a purchase

FOB

free on board some vehicle at some place

shipping point: buyer has responsibility as soon as the product is loaded onto a vehicle at the seller's point of shipment

destination: title does not pass until the product is delivered

Freight Absorption pricing

absorbing freight cost so that a firm's delivered price meets that of the nearest competitor

value pricing

setting a fair price level for a marketing mix that really gives the target market superior customer value

unfair trade practice act

put a lower limit on prices, especially at the wholesale and retail levels

dumping

pricing a product sold in a foreign market below the cost of producing it or at a price lower than its domestic market

price fixing

competitors getting together to raise, lower, or stabilize prices--is common and relatively easy

Robinson-Patman Act

makes illegal any price discrimination\-- selling the same products to different buyers at different prices

price discrimination

selling the same products to different buyers\-- if it injures competition. the law does permit some price differences \-- but they are based on (1) cost differences or (2) the need to meet competition

markup

a dollar amount added to the cost of products to get the selling price

markup (percent)

the percentage of selling price that is added to the cost to get the selling price

markup chain

the sequence of markups firms use at different levels in a channel \-- determines the price structure in the whole channel

stockturn rate

the number of times the average inventory is sold in a year

average cost pricing

adding a reasonable markup to the average cost of a product

total fixed cost

the sum of those costs that fixed in total\-- no matter how much is produced

total variable cost

the sum of those changing expenses that are closely related to output\-- expenses for wages, packaging materials, outgoing freight, and sale commission

total cost

the sum of total fixed and variable costs

average cost (per unit)

obtained by dividing total cost by the related quantity (that is, the total quantity that causes the total cost)

Average fixed cost (per unit)

obtained by dividing total fixed cost by the related quantity

average variable cost (per unit)

obtained by dividing total variable cost by the related quantity

break-even analysis

evaluates whether the firm will be able to break even\-- that is cover all costs with a particular price

break-even point

the quantity where the firm's total cost will just equal its total revenue

total fixed cost/fixed cost contribution

fixed cost contribution per unit

the assumed selling price per unit minus the variable cost per unit

value in-use pricing

setting prices that will capture some of what customers will save by substituting the firm's product for the one currently being used

reference pricing

the price they expect to pay \-- for many of the products they purchase

leader pricing

setting some very low prices \-- real bargains \-- to get customers into retail stores

bait pricing

setting very low prices to attract customers but trying to sell more expensive models or brands once the customer is in the store

psychological pricing

setting prices that have special appeal to target customers

dynamic pricing

the practice of pricing items at a level determined by a particular customer's perceived ability to pay

surge pricing

a pricing strategy in which businesses set flexible prices for products or service based on current market demands

odd-even pricing

setting prices that end in certain numbers

price lining

setting a few price levels for a product line and then marking all items at these prices

demand-backward pricing

setting an acceptable final consumer price and working backward to what a producer can change

prestige pricing

setting a rather high price to suggest high quality or high status

product bundle pricing

setting one price for a set of products

product

need-satisfying offering of the firm

quality

a product's ability to satisfy a customer's needs or requirements

product assortment

the set of all product lines and individual products that a firm sells

product line

a set of individual products that are closely related

individual product

a particular product within a product line

branding

the use of a name, term, symbol, or design \-- or a combination of these \-- to identify a product

brand name

is a word, letter, or a group of words and letters

trademark

includes only those words, symbols, or marks that are legally registered for use by a single company

service mark

the same as trademark except that it refers to a service offering

brand familiarity

how well customers recognize and accept a company's brand

brand rejection

potential customers won't buy a brand unless its image is changed\-- or if the customers have no choice

brand nonrecognition

final customers don't recognize brand at all \-- even though intermediaries may use the brand name for identification and inventory control

brand recognition

customers recognize the brand

brand awareness

the public can recall information, emotions or general impressions about your brand

brand preference

the target customers usually choose the brand over other brands

ex: prefer coke over pepsi but will buy pepsi if coke is unavailable or its cheaper

brand insistence

customer's insist on a firm's branded product and are willing to search for it

ex: harley davidson tattoo

brand equity

the value of a brand's overall strength in the market

Lanham act

what kinds of marks (including brand names) can be protected and all exact method of protecting them

family brand

the same brand name for several products \-- or individual brands for each product

licensed brand

a well-known brand that sellers pay a fee to use

individual brands

separate brand names for each product \-- when it's important for the products to each have a separate identity, as when products vary in quality or type

generic brands

products that have no brand at all other than identification of their manufacturer or intermediary and contents

manufacturer brands

brand created by producers

ex: McDonald's, MasterCard, Colgate

dealer brands

also called private brands, are brands created by intermediaries

ex: Craftsman and Kenmore (Sears), Equate and Sam's Choice (Walmart)

private brands

same as dealer brands

battle of the brands

the competition between dealer brand and manufacturer brands, is just a question in which brands will be more popular and who will be in control