Test #3

Click the card to flip 👆
1 / 137
Terms in this set (137)
communication gapa type of service gap; refers to the difference between the actual service provided to customers and the service that the firm's promotion program promisesservice qualitycustomers' perceptions of how well a service meets or exceeds their expectationsvoice of customers (VOC) programan ongoing marketing research system that collects customer inputs and integrates them into managerial decisionszone of tolerancethe area between customers' expectations regarding their desired service and the minimum level of acceptable service - that is, the difference between what the customer really wants and what he or she will accept before going elsewhereempowermentin context of service delivery, means allowing employees tomato decisions about how service is provided to customersemotional supportconcern for others' well-being and support of their decisions in a job settinginstrumental supportproviding the equipment or systems needed to perform a task in a job settingdistributive fairnesspertains to a customer's perception of the benefits he or she received compared with the costs (inconvenience or loss) that resulted from a service failureprocedural fairnessrefers to the customer's perception of the fairness of the process used to resolve complaints about servicesatisfies customers' needs and wants; good customer service helps firms add value to their productsWhy is customer service important to customers?a combination of goods and servicesWhat are hybrid products?it is less expensive for firms to manufacture their products in less developed countries; people place a high value on convenience and leisure; people are demanding more specialized services; this is important because the US has become more dependent on servicesHow do service-oriented economies develop? Why is this important in terms of services?intangible: quality evaluation, convey benefits, promotion inseparable: production and consumption simultaneous, employee dependence, guarantees and warranties variable/ heterogeneity: standardization, training, micro marketing, machines perishable: cannot be stored, warehoused, or inventoried, match demand and supplyWhat are the four factors that contribute to making marketing services different than marketing products? What does each of these entail? How do marketers overcome each of these when marketing services?results when a service fails to meet the expectations that customers have about how it should be delivered; types include knowledge gap, standards gap, delivery gap, communication gapWhat is a service gap?use it to systematically examine all aspects of the service delivery process and prescribe the steps needed to develop an optimal service strategy; the gaps are knowledge, standards, delivery, and communication; close the gap by internal or external changeWhy do marketers use the Gaps Model? What are the four gaps and what is entailed in each? How do marketers close each gap?customers' expectations can differ from a firm's perception of customer expectationsWhat is important in understanding customer expectations?customers' perceptions of how well a service meets or exceeds their expectations; reliability, responsiveness, assurance, empathy, tangiblesWhat is service quality and how is it evaluated? What are the definitions of these five factors?an ongoing marketing research system that collects customer inputs and integrates them into managerial decisions; the area between customers' expectations regarding their desired service and the minimum level of acceptance; asks customers questions to determine thisWhat is a voice of customer (VOC) program? What is the zone of tolerance? How is the zone of tolerance determined?when service providers fail to meet customer expectations; listen to the customer, find a fair solution, and resolve problems quicklyWhen should a service recovery be performed? What should a service recovery entail?compensation for your lossWhat is distributive fairness?hoops to jump through to get to reconciliation and compensation to others and how longWhat is procedural fairness?pricethe overall sacrifice a consumer is willing to make - money, time, energy - to acquire a specific product or serviceprofit orientationa company objective that can be implemented by focusing on target profit pricing, maximizing profits, or target return pricingsales orientationa company objective based on the belief that increasing sales will help the firm more than will increasing profitspremium pricinga competitor-based pricing method by which the firm deliberately prices a product above the prices set of competing products to capture those consumers who always shop for the best or for whom price does not mattercompetitor orientationa company objective based on the premise that the firm should measure itself primarily against its competitioncustomer orientationa company objective based on the premise that the firm should measure itself primarily according to whether it meets its customers' needsdemand curveshows how many units of a product or service consumers will demand during a specific period at different pricesprestige products or servicesthose that consumers purchase for status rather than functionalityprice elasticity of demandmeasures how changes in a price affect the quantity of the product demanded; specifically, the ratio of the percentage change in quantity demanded to the percentage change in priceelasticrefers to a market for a product or service that is price sensitive; that is, relatively small changes in price will generate fairly large changes in the quantity demandedinelasticrefers to a market for a product or service that is price insensitive; that is, relatively small changes in price will not generate large changes in the quantity demandedincome effectrefers to the change in the quantity of a product demanded by consumers due to a change in their incomesubstitution effectrefers to consumers' ability to substitute other products for the focal brand, thus increasing the price elasticity of demand for the focal brandcross-price elasticitythe percentage change in demand for product A that occurs in response to a percentage change in prince of product Bcomplementary productsproducts whose demand curves are positively related, such that the rise or fall together; a percentage increase in demand for one results in a percentage increase in demand for the othersubstitute productsproducts for which changes in demand are negatively related; that is, a percentage increase in the quantity demanded for product A results in a percentage decrease in the quantity demanded for product Bvariable coststhose costs, primarily labor and materials, that vary with production volumefixed coststhose costs that remain essentially at the same level, regardless of any changes in the volume of productiontotal costthe sum of the variable and fixed costsbreak-even analysistechnique used to examine the relationships among cost, price, revenue, and profit over different levels of production and sales to determine the break-even pointbreak-even pointthe point at which the number of units sold generates just enough revenue to equal the total costs; at this point, profits are zeromonopolyone firm provides the product or service in a particular industryprice waroccurs when two or more firms compete primarily by lowering their pricespredatory pricinga firm's practice of setting a very low price for one or more of its products with the intent to drive its competition out of business; illegal under both the Sherman Antitrust Act and the Federal Trade Commission Actpure competitionoccurs when different companies sell commodity products that consumers perceive as substitutable; price usually is set according to the laws of supply and demandgray marketemploys irregular but not necessarily illegal methods; generally, it legally circumvents authorized channels of distribution to sell goods at prices lower than those intended by the manufacturereveryday low pricing (EDLP)a strategy companies use to emphasize the continuity of their retail prices at a level somewhere between the regular, nonsale price an the deep-discour sale prices their competitors may offerhigh/ low pricinga pricing strategy that relies on the promotion of sales, during which prices are temporarily reduced to encourage purchasesreference pricethe price against which buyers compare the actual selling price of the product and that facilitates their evaluation processmarket penetration strategya growth strategy that employs the existing marketing mix and focuses the firm's efforts on existing customersexperience curve effectrefers to the drop in unit cost as the accumulated volume sold increases; as sales continue to grow, the costs continue to drop, allowing even further reductions in the priceprice skimminga strategy of selling a new product or service at a high price that innovators and early adopters are willing to pay in order to obtain it; after the high-price market segment becomes saturated and sales begin to slow down, the firm generally lowers the price to capture (or skim) the next most price sensitive agreementloss leader pricingloss leader pricing takes the tactic of leader pricing one step further by lowering the price below the store's costbait-and-switcha deceptive practice of luring customers into the store with a very low advertised price on an item (the bait), only to aggressively pressure them into purchasing a higher-priced model (the switch) by disparaging the low-priced item, comparing it unfavorably with the higher-priced model, or professing an inadequate supply of the lower-priced itemprice discriminationthe practice of selling the same product to different resellers (wholesalers, distributors, or retailers) or to the ultimate consumer at different prices; some, but not all, forms of price discrimination are illegalprice fixingthe practice of colluding with other firms to control priceshorizontal price fixingoccurs when competitors that produce and sell competing products collude, or work together, to control prices, effectively taking price out of the decision process for consumersvertical price fixingoccurs when parties at different levels of the same marketing channel (e.g., manufacturers and retailers) collude to control the prices passed on to consumersmanufacturer's suggest retail price (MSRP)the price that manufacturers suggest retailers use to sell their merchandise$ and anything else you give upWhat is entailed in the price of something?marketing's only way to generate revenue and important to purchasing decisionsWhy is pricing important?match the product or service with the consumer's value perceptionsWhat is the key to a successful pricing strategy?too high: might signal low value too low: might signal poor qualityIn what way is price a signal? What does a price that is too low signal? What does a price that is too high signal?profit orientation (firm sets particular profit goal) sales orientation (focus only on increasing revenues)* competitor orientation (measure yourself with competition) customer orientation (focus on needs and wants of consumers and try to meet them)The firms pricing objectives result in a variety of pricing strategies. What are they and what is entailed with each, including why they are utilized? Which pricing strategy is liked most by marketers?shows how many units of a product or service consumers will demand during a specific period at different prices; most products are downward sloping; with prestige products, the price is so high only a few can afford it sideways u demand curveWhat is the demand curve? Do all products or services follow the downward-sloping demand curve for all levels of price? How does this relate to prestige products?measures how changes in the a price affect the quantity of the product demanded; specifically, the ratio of the percentage change in quantity demanded to the percentage change in price; elastic is price sensitive and inelastic is not; factors that influence: income, substitutes, complementsWhat is price elasticity? What does it mean to be price elastic vs. price inelastic? What factors influence price elasticity and what does each entail?helps assess pricing strategies; the point at which the number of units sold generates just enough revenue to equal the total costs - at this point, profits are zero; total costs = fixed costs + variable costsWhy is it important for a marketer to understand a firm's costs? What is the break-even point? What type of costs make up total cost? What is the profit of a company at the break-even point?firms typically change their prices in reaction to competition to avoid upsetting an otherwise stable competitive environmentWhat is important to understand in terms of competition's impact on price?manufacturers, wholesaler, retailersWho are channel members?increased price sensitivity because of access to more knowledge; new product categoriesHow has the internet influenced pricing?cross shopping, globalization, local economic conditionsWhat economic factors influence pricing?1. everyday low pricing (charging low price everyday) 2. high/low pricing (regular/ high prices then sales to generate "excitement" for the product) 3. price bundling (two or more products bundled for one price) 4. captive pricing (buy two products that go together) 5. dynamic price (price fluctuates based on supply and demand) 6. freemish pricing (initial product is free then pay to upgrade) 7. odd-even pricing (pricing at $1.99 instead of $2.00) 8. rule of 100 (<$100 percentage off, >$100 x dollars off)What are the different types of pricing strategies for products (including new products)?deceptive reference prices (seems like you're getting a great deal but the reference price is made up) loss leader pricing (sell products for below cost; illegal in some states)What are types of deceptive or illegal price advertising? What is entailed one each of these?illegal; intent of driving competition out of businessWhat is predatory pricing?charging different prices to different entities for the same product/ service in a reasonable period of time; illegal in B2B business except for quantity discounts, if the product is perishable/seasonal, or if the market place has changed; legal in B2C businessWhat is price discrimination? Under what circumstances is price discrimination legal and what is entailed in each of these?collusion about pricing horizontal (2 members on same level of supply chain collude on prices which sets market price for consumers) vertical (within the same supply chain you have collusion)What is price fixing and how do the two types of price fixing differ?marketing channel management (supply chain management)refers to a set of approaches and techniques firms employ to efficiently and effectively integrate their supporterswholesalersthose firms engaged in buying, taking title to, often storing, and physically handling goods in large quantities, then reselling the goods (usually in smaller quantities) to retailers or industrial or business userssupply chain managementrefers to a set of approaches and techniques firms employ to efficiently and effectively integrate their suppliers, manufacturers, warehouses, stores, and transportation intermediaries in to a seamless value chain in which merchandise is produced and distributed in the right quantities, to the right locations, and at the right time, as well as to minimize systemwide costs while satisfying the service levels their customers requiredistribution centera facility for the receipt, storage, and redistribution of goods to company stores or customers; may be operated by retailers, manufacturers, or distribution specialistsdirect marketing channelthe manufacturer sells directly to the buyerindirect marketing channelswhen one or more intermediaries work with manufacturers to provide goods and services to customersvertical channel conflicta type of channel conflict in which members of the same marketing channel, for example, manufacturers, wholesales, and retailers, are in disagreement or discordhorizontal channel conflicta type of channel conflict in which members at the same level of a marketing channel, for example, two competing retailers or two competing manufacturers, are in disagreement or discord, such as when they are in a price warindependent (conventional) marketing channela marketing channel in which several independent members- a manufacturer, a wholesaler, and a retailer- each attempt to satisfy its own objectives and maximize its profits, often at the expense of the other membersvertical marketing systema supply chain in which the members act as a unified system; there are three types: administered, contractual, and corporateelectronic data interchange (EDI)the computer-to-computer exchange of business documents from a retailer to a vendor and backvendor managed inventory (VMI)an approach for improving supply chain efficiency in which the manufacturer is responsible for maintaining the retailer's inventory levels in each of its storespush marketing strategydesigned to increase demand by motivating sellers- wholesales, distributors, or salespeople- to highlight the product, rather than the products of competitors, and thereby push the product onto consumerspull marketing strategydesigned to get consumers to pull the product into the supply chain by demanding itplannersin a retailing context, employees who are responsible for the financial planning and analysis of merchandise, and its allocation to storesreceivingthe process of recording the receipt of merchandise as it arrives at a distribution center or storeradio frequency identification (RFID) tagstiny computer chips that automatically transmit to a special scanner all the information about a container's contents or individual productsticketing and markingcreating price and identification labels and placing them on the merchandisejust-in-time (JIT) inventory systems (quick response)inventory management systems designed to deliver less merchandise on a more frequent basis than traditional inventory systems; the firm gets the merchandise "just in time" for it to be used in the manufacture of another product, in the case of parts or components, or for sale when he customer wants it, in the case of consumer goodsquick response (just-in-time (JIT) systems)an inventory management system used in retailing; merchandise is received just in time for sale when the customer wants itall companies involved in the upstream and downstream flows of: products, services, finances, and informationWhat is included in a company's supply chain?fulfilling delivery promises, meeting customer expectations, reliant on an efficient supply chainHow does the supply chain affect marketing and vice versa?integrate supply chain members, produce and distribute merchandise, minimize system costs, satisfy service level requirementsWhat is supply chain management?marketing management (CMO): sales logistics management (COO): costsWhat are some supply chain metrics and who uses them?types: horizontal channel conflict, vertical channel conflict reasons: conflicting goals, unmet expectations, ideological differencesWhat is supply chain conflict? Why does it occur?lower costs, greater flexibility, improved customer service, higher revenuesWhat are the benefits of supply chain management?production scheduling (demand management, manufacturing flow management) sourcing and procurement (B2B buying process, supplier relationship management)What are the components of supply chain, what is entailed in each component, and what benefits are derived from these processes/ components?retailingthe set of business activities that add value to products and services sold to consumers for their personal or family use; includes products bought at stores, through catalogs, an dover the Internet, as well as services like fast-food restaurants, airlines, and hotelsmultichannel strategyselling in more than one channeldistribution intensitythe number of supply chain members to use at each level of the supply chainintensive distributiona strategy designed to get products into as many outlets as possibleexclusive distributionstrategy in which only selected retailers can sell a manufacturer's brandselective distributionlies between the intensive and exclusive distribution strategies; uses a few selected customers in a territoryexclusive co-branddeveloped by national brand vendor and retailer and sold only by that retailermobile commerce (M-commerce)communicating with or selling to consumers through wireless handheld devices such as cellular phonescooperative (co-op) advertisingan agreement between a manufacturer and retailer in which the manufacturer agrees to defray some advertising costsshare of walletthe percentage of the customer's purchases made from a particular retaileradds value to product soldWhy is retailing important?marketing meets the consumerWhat is retailing?at the endWhere does retailing occur in the supply chain?1. choosing retailing partners 2. identifying types of retailers 3. developing a retail strategy 4. managing a multichannel strategyWhat are the four factors involved in establishing a relationship/strategy with retailers?channel structure, customer expectations, channel member characteristics, distribution intensityWhen choosing a retail partner, manufacturers must look at what issues? What is entailed in each of these?distribution intensityHow do retailers create value when providing products?price must be aligned with product, placement, and promotion; the customer must be willing and expect to pay a certain priceWhy is price important for retailers?cannot go below break even point, regional prices; customer expectations and willingnessWhat are the constraints for price?convenienceWhat is the most important aspect of place for retailers?an actual in person storeWhat is meant by the term bricks-and-mortar retailer?traditional media (newspapers, magazines, television) electronic communication apps on mobile devices store credit and gift cards displays and signs in stores making the shopping experience funWhat are types of retail promotions and why are they important?entrance, layout, lighting, color, sound, smell these are important because they help the customer come in the store, stay in the store, spend money while having a good experienceWhat is entailed in creating a store experience and why are these elements important?1. omnichannel retail (consumer demand, blurred lines between physical and digital) 2. mobile communication (apps and in-store reception) 3. big data analytics (the new oil, STP, untrained employee base, share of wallet) 4. vertical integration (differentiated product, exclusive brands owned by retailer) 5. price transparency (social media, consumer empowerment) 6. cyber security (confidence issue, legislation, safer than competition) 7. changing demographics (aging baby boomers, millennials, minorities) 8. cross border commerce (global pricing, tourism and product perception) 9. mobile payments (who owns data, security issue) 10. talent requirements (CEO needs to act differently, new skills, cross functional)What are the 10 disrupters in retail? What does each entail?