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price

money or other consideration (including other goods and services) exchanged for the ownership or use of a good or service

barter

practice of exchanging goods and services for other goods and services rather than for money

value

the ratio of perceived benefits to price

value pricing

the practice of simultaneously increasing product and service benefits while maintaining or decreasing price.

demand factors

Factors that determine consumers' willingness and ability to pay for goods and services

skimming price

A firm sets the highest initial price that customers really desiring the product are willing to pay, and then lowers the price gradually to attract more price-sensitive customer segments

penetration pricing

Setting a low initial price on a new product to appeal immediately to the mass market

prestige pricing

setting a high price so that quality or status conscious consumers will be attracted to the product and buy it

inelastic

demand hardly changes with a small change in price

elastic

If the demand changes considerably with a small change in price

lowering

If the demand for a product is elastic, marketers will consider __the price.

profit

Total Revenue - Total Cost
(unit price X quanity sold) - (fixed cost + variable cost)

break-even analysis

technique that analyzes the relatinship between ttotal revenue and total cost to determine profitability at various levels of output

break-even point

quanity at which total revenue and total cost are equal
fixed cost/(unit price-unit variable cost)

Price lining

firm that is selling a line of products price them at a number of different specific pricing points

One-price policy

(aka fixed pricing) is setting one price for all buyers of a product or service

flexible-price policy

setting different prices for products and services depending on individual buyers and purchase situations

Uniform delivered pricing

the price the seller quotes includes all transportation costs

Unit pricing

products offered for sale include the price per unit such as per ounce, pound, or quart, in addition to the price of the product as packaged

Bundle pricing

the marketing of two or more products in a single package price

Cost-plus pricing

The firm calculates "the total unit cost of providing a good or service and add a specific amount to the cost to arrive at a price."

Target pricing

the producer aims for a particular price at which he/she estimates good demand exists, and then works backward, subtracting typical costs and margins of channel members to arrive at the approximate price he/she can charge and the amount he/she can spend on production and marketing

Odd-even pricing

setting prices a few dollars or cents under an even number

Loss-leader pricing

many retailers deliberately sell products below their customary (or normal) prices to attract attention and induce additional store traffic

Trade discount

a discount from the list price offered to resellers in the marketing channel

Quantity discount

a price reduction offered to buyers buying in multiple units or above a specified dollar amount

Noncumulative quantity discount

used to encourage large orders

Cumulative quantity discount

used to encourage repeat purchases

Timing/seasonal discount

encourage buyers to stock inventory earlier than their normal demand would require.

Cash discount

used to encourage retailers to pay their bills quickly

Transfer pricing

refers to the pricing policy used to set the prices of goods/services that are exchanged between different divisions or subsidiaries of a decentralized organization

Price fixing

conspiracy among firms to set prices for products. It is illegal per se under the Sherman Act

resale price maintenance

requiring retailers to not sell products below a minimum retail price.
declared illegal per se in 1975 under consumer goods pricing act

Predatory pricing

practice of charging a very low price for a product with the intent of driving competitors out of business.

selling price-product cost

markup equation

(selling price-cost)/cost

markup % based on cost

(selling price-cost)/selling price

markup % based on selling price

marketing channel

(or channel of distribution) consists of individuals and firms involved in the process of making a good or service available for use or consumption by consumers or industrial users

Marketing intermediaries

makes the flow of products from producers to ultimate consumers possible by preforming three basic functions:
Transactional functions
Logistical functions
Facilitating functions

Agents and brokers

do not assume ownership of products (role is to bring seller and buyer together)

merchants

(wholesaler and retailers) assume ownership of products

direct channel

producer and ultimate consumer deals directly with each other

indirect channel

intermediaries are inserted between the producer and consumer and preform numerous channel functions

shorter

B2B channel are usually ___ than B2C channels

intensive distribution

firm tries to place its products and services in as many outlets as possible (for convenience goods)

exclusive distribution

extreme opposite of intensive distribution because only one retailer in a specific geographical area carres the firms' products (for specialty goods).

selective distribution

firm selects a few retailers in a specific geographical area to carry its products (for shopping goods)

Forward integration

when it controls distribution centers and retailers where its products are sold
ex)Sherwin- Williams makes paint but also owns and operates 2,000 retail outlets

Backward integration

when it controls subsidiaries that produce some of the inputs used in the production of its products
ex) Ford Motor Company produces its own glass and steel

Horizontal integration

the combining of competing firms into one corporation(acquiring a competitor) ex) Kroger bought Smith's

vertical integration

is typified by one firm engaged in different parts of production (e.g. growing raw materials, manufacturing, transporting, marketing, and/or retailing).

Franchising

is a contractual arrangement between a parent company (a franchisor) and an individual or firm (a franchisee) that allows the franchisee to operate a certain type of business under an established name according to specific rules

Logistics

involves those activities that focus on getting the right amount of the right products to the right place at the right time at the lowest possible cost

Logistics management

the practice of organizing the cost-effective flow of raw materials, in-process inventory, finished goods, and related information from point of origin to point of consumption to satisfy customer requirements

supply chain

a sequence of firms involved in performing the activities required to create and deliver a good or service to consumers or industrial users

Supply chain management

integration and organization of information and logistic activities across firms in a supply chain for the purpose of creating and delivering goods and services that provide value to consumers or industrial users

cross docking

a practice that involves unloading products from suppliers, sorting products for individual stores, and quickly reloading products onto its trucks for a particular store

Vendor-managed inventory

is an inventory management system whereby the supplier determines the product amount and assortment a customer (such as a retailer) needs and automatically delivers the appropriate items

Reverse logistics

is a process of reclaiming recyclable and reusable materials, returns, and reworks from the point of consumption or use for repair, remanufacturing, redistribution, or disposal

Retailing

refers to all the business activities directed at selling and/or renting goods and services to ultimate consumers for personal, family, or household use

retailer

refers to any business enterprise whose sales volume primarily comes from retailing

Walmart

Which company is the world's largest retailer?

give your customers what they want

According to Sam Walton, what is the secret of successful retailing?

supercenter

combines a typical merchandise store with a full-size grocery store

belgium

The ownership of Food Lion is in the hands of a firm based in____

japan

The ownership of 7-Eleven is in the hands of a firm based in___

venezula

How about citgo?

wheel of retailing

describes how new forms of retail outlets enter the market and change gradually in terms of price, margin and status. It divides the pattern in retail evolution into three stages: innovation, trading up, and vulnerability

V-commerce

makes it possible to serve customers when and where stores cannot

direct mail and catalog

called "the store that comes to your door"

television home shopping

is possible when consumers watch a shopping channel on which products are displayed; orders are placed over the phone or internet.

online retailing

allows consumers to search for, evaluate, and order products through the Internet

Telemarketing

involves using the telephone to interact with and sell directly to consumers

direct selling

sometimes called door-to-door retailing, involves direct sales of goods and services to consumers through personal interactions and demonstrations in their home or office

radio frequency identification

What does RFID stand for?

Scrambled merchandising

involves offering several unrelated product lines in a single store

Hypermarkets

large stores (more than 200,000 square feet) based on a simple concept: offer consumers everything under one roof, eliminating the need to stop at more than one location

category killers

Specialty discount outlets focus on one type of product, such as electronics (Best Buy), office supplies (Staples), or books (Barns and Noble) at very competitive prices. They are referred to as __________ because they often dominate the market

central business district

the oldest retail setting, a community's downtown area

Encoding

the process of having the sender transform an idea into a set of symbols

Decoding

process of having the receiver take a set of symbols, the message, and transform them back to an idea.

Attention Interest Desire Action

what are the four-steps of marketing communication process

hierarchy of effects

is the sequence of stages a prospective buyer goes through from initial awareness of a product to eventual action (either trial or adoption of the product). The stages include awareness, interest, evaluation, trial, and adoption.

to inform, to persuade, and to remind

what are the three basic functions of promotion?

promotional elements

refers to advertising, personal selling, sales promotion, public relations, and direct marketing

promotional mix

The combination of one or more of the promotional tools

advertising

any paid form of nonpersonal communication about an organization, good, service, or idea by an identified sponsor

Personal selling

the two-way flow of communication between a buyer and seller, designed to influence a person's or group's purchase decision, usually in face-to-face communication between the information sender and receiver.

Sales promotion

a short-term inducement of value offered to arouse interest in buying a good or service

Public relations

is a form of communication management that seeks to influence the feelings, opinions, or beliefs held by customers, prospective customers, stockholders, suppliers, employees, and other publics about a company and its products or services through the use of nonpaid forms of promotion and information

Publicity

is a nonpersonal, indirectly paid presentation of an organization, good, or service. It can take the form of a news story, editorial, or product announcement

Direct marketing

uses direct communication with consumers to generate a response in the form of an order, a request for further information, or a visit to a retail outlet

Integrated marketing communications

is the concept of designing marketing communications programs that coordinate all promotional activities—advertising, personal selling, sales promotion, public relations, and direct marketing—to provide a consistent message across all audiences

push strategy

consists of directing the promotional mix to channel members to gain their cooperation in ordering and stocking the product

pull strategy

onsists of directing the promotional mix at ultimate consumers to encourage them to ask the retailer for a product.

personal selling

a "push" promotional strategy tends to emphasize____

objective and task budgeting method

the company determines its promotion objectives, outlines the tasks to accomplish those objectives and determines the promotion cost of performing those tasks

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