Business Ch 15
Terms in this set (61)
channel of distribution
A(n) ____________ consists of the marketing intermediaries that transport and store goods as they move through their path from producer to final user.
A _________ is a marketing intermediary that sells products to other organizations.
retailers sell to final consumers, while wholesalers sell to other organizations, such as retailers or manufacturers
The primary difference between retailers and wholesalers is that:
it will be unable to perform the functions as efficiently as they were performed by the marketing intermediaries
Sharp Focus Cameras is facing intense competitive pressure. Top marketing managers are looking for ways to cut costs. They are considering a plan to cut distribution costs by eliminating marketing intermediaries from the channel of distribution. If Sharp Focus carries out this plan, it is likely to find that:
Placing ads in newspapers and having knowledgeable salespeople to answer customers' questions are ways marketing intermediaries can provide:
When marketing intermediaries perform the steps necessary to transfer ownership from one party to another, they are providing _________ utility.
At Stockman's Butcher Shop the butchers will hand cut steaks to the thickness their customers specify and trim off the excess fat. This extra service provides ________ utility.
providing place utility
Retailers who have stores at convenient locations are trying to add value by:
merchant wholesalers who perform all of the distribution functions.
Marketing intermediaries that solicit orders from retailers or other wholesalers and have the products delivered directly from the producer to the buyer are known as:
Rita Sauer stocks several local supermarkets and discount stores with Luminaire Cosmetics. She sets up displays of various cosmetic products carrying the Luminaire brand name, and sells the goods on consignment, sharing any profits on the sales with the retailer. Rita is a:
Discount stores owe much of their success to a competitive strategy based on:
A(n) ___________ distribution strategy distributes a product through only a preferred group of retailers in a given area.
Carry a large inventory of their products
Producers who use an exclusive distribution strategy for their products can expect retailers who carry the products to do which of the following?
Direct mail, telemarketing, and catalog sales are all common examples of:
Vending machines are most often used to sell:
Purchasing a book on the history of the United States by sending in an order form attached to a pamphlet sent to the customer by the publisher
Which of the following is an example of a consumer making a purchase through a direct marketing arrangement?
Taken together, all of the organizations that move goods from the sources of raw materials to ultimate consumers is known as a(n):
McDonald's, KFC, Baskin-Robbins, and AAMCO all make use of the __________ form of contractual distribution system.
supply chain management.
rodney Halpern works in the marketing department of a major manufacturing firm. Much of his job involves managing the movement of materials, parts, and information from suppliers to his firm. He tries to coordinate these flows with his firm's factory processes and assists with the efficient movement of finished goods to final consumers. These activities suggest that Rodney's job responsibilities focus on:
Good quality at a fair price. When consumers calculate the value of a product, they look at the benefits and then subtract the cost to see if the benefits exceed the costs.
Distributed Product Development
Handing off various parts of your innovation process usually to companies in other countries.
Total product development
Everything that consumers evaluate when deciding whether to buy something; including price, brand name, satisfaction in use. (AKA value package)
group of products that look similar or are intended for a similar market
ie: Firm offers bubble gum and sugarless gum
Combo of product lines offered by manufacturer
ie: Manufacturer can offer gum, candy bars, breath mints
creation of real or perceived product differences because actual differences are sometimes quite small, so marketers use a creative mix of branding, pricing, advertising, packaging to make a unique image of the product
Convenience goods and services:
products the consumer wants to purchase frequently with minimum effort (ie: candy, gum, milk, snacks, gas, banking services)
Location, brand awareness, convenience, and image are important for marketers of convenience goods/services
Shopping Goods and Services
Products the consumer buys only after comparing value, quality, price, style from a variety of sellers (ie: Target)
Marketers emphasize prices differences & quality differences
Specialty Goods & Services
Consumer products with unique characteristics and brand identity with no reasonable substitute, thus consumers put more effort to buy them
Fine watches, expensive wine, fur coats, jewelry, imported chocolate, services provided by medical specialists & business consultants
Relies on reaching special market segments through advertising
Products consumers are unaware of, haven't thought of buying, or suddenly find they need to solve an unexpected problem. (ie: emergency car-towing services, burial services, insurance)
Relies mostly on online directories (Yelp)
Products used in the production of other products. AKA B2B goods
As an industrial good, personal computers are more likely to be sold through salespeople or the Internet
Advertising is not necessary for industrial goods
Grouping 2 or more products together and prices them as a unit
ie: Airlines with limousine services and massages
Packages must perform the following:
Attract the buyer's & retailer's attention
Protect the goods inside, stand up under handling and storage, be tamperproof, and deter theft
Easy to open/use
Give info about the contents
Explain the benefits of the good inside
Product info on warranties, warnings, other consumer matters
Provide the price, value, uses
brand that has exclusive legal protection for both its brand name and its design (McDonald's)
brand name of manufacturers that distribute products nationally
Dealer (private-label) brands
Product that don't carry the manufacturer's name but carry a distributor or retailer's name instead.
Non branded products that usually sell at a sizable discount compared to national or private-label brands
Illegal copies of national brand name goods
value of the brand name and associated symbols
Degree to which customers are satisfied, like the brand, and are committed to further purchases
how quickly or easily a given brand name comes to mind when someone mentions a product category
linking of a brand to other favorable images, like celebrities, or a geographical area
or product manager) has direct responsibility for one brand or product line, and manages all the elements of its marketing mix: product, price, place, promotion
Reduces the number of new-product ideas a firm is working on at any one time so it can focus on the most promising.
is a major source of new products & employees are a major source for new consumer-goods ideas
Making cost estimates and sales forecasts to get a feeling of profitability of new-product ideas
Taking a product idea to consumers to test their reactions
Using different packaging, branding, ingredients until a product emerges that is desirable from both production and marketing views
Promoting a product to distributors and retailers to get wide distribution, and developing strong advertising and sales campaigns to generate and maintain interest in the product among distributors and consumers
Product Life Cycle
Theoretical of what happens to sales and profits for a product class over time; the 4 stages of the cycle are introduction, growth, maturity, decline, but not all products follow the cycle
Designing a product so that it satisfies customers and meets the profit margins wanted. It makes the final price an input to the product development process, not an outcome of it.
Competition Based Pricing
Pricing strategy based on what all the other competitors are doing. Can be priced at, above, or below, competitor's prices
Strategy by which one or more dominant firms set the pricing practices that all competitors follow.
Process used to determine profitability at various levels of sales. It's the point where revenues from sales equal all costs.
Total Fixed Costs
All expenses that remain the same no matter how many products are made and sold.
Costs that change according to the level of production
Skimming price strategy
A new product is priced high to make optimum profit with little competition
Product is priced low to attract many customers and discourage competition
Everyday low pricing (EDLP)
Setting prices lower than competitors and then not having any special sales
High-low Pricing Strategy
Setting prices that are higher than EDLP stores by having many special sales where the prices are lower than competitors' prices
Pricing goods/services at price points that make the product appear less expensive than it is. (ie: $2.99 instead of $3)
Marketers sometimes price on the basis of consumer demand than costs and calculation.
ie: Discounts for children and old people at theaters