Ch13

Question 1

pricing objectives

Answer 1

goals that sellers hope to achieve in pricing products for sale

Question 2

market share (market penetration)

Answer 2

company’s percentage of the total industry sales for a specific product type

Question 3

price-setting tools

Answer 3

cost-oriented pricing and breakeven analysis

Question 4

cost-oriented pricing

Answer 4

pricing that considers the firm’s desire to make profit and its need to cover production costs (selling price = seller’s costs + profit)

Question 5

markup

Answer 5

amount added to an item’s purchase cost to sell it at a profit
markup percentage = markup/sales price

Question 6

variable cost

Answer 6

cost that changes with the quantity of a product produced and sold

Question 7

fixed cost

Answer 7

cost that is incurred regardless of the quantity of a product produced and sold

Question 8

breakeven analysis

Answer 8

for a particular selling price, assessment of a seller’s costs versus revenues at various sales volumes

Question 9

breakeven point

Answer 9

sales volume at which the seller’s total revenue equals total costs
- total fixed cost /(price-variable cost) or profit = total revenue – total fixed cost plus total variable cost

Question 10

price skimming

Answer 10

setting an initially high price to cover new product costs and generate profit

Question 11

penetration pricing

Answer 11

setting an initially low price to establish a new product in the market

Question 12

two types of pricing

Answer 12

fixed and dynamic

Question 13

pricing tactics

Answer 13

price lining, psychological pricing, odd-even pricing, discounts

Question 14

price lining

Answer 14

setting a limited number of prices for certain categories of products

Question 15

psychological pricing

Answer 15

pricing tactic that takes advantage of the fact that consumers do not always respond rationally to stated prices

Question 16

odd-even pricing

Answer 16

psychological pricing tactic based on premise that customers prefer prices not stated in even dollar amounts

Question 17

promotion

Answer 17

aspect of marketing mix concerned with the most effective techniques for communicating info about and selling a product

Question 18

push strategy

Answer 18

promotional strategy where a company aggressively pushes its product thru wholesalers and retailers, which persuade customers to buy it

Question 19

pull strategy

Answer 19

promo strategy where company appeals directly to customers who demand the product from retailers who demand product from wholesalers

Question 20

promotional mix

Answer 20

portion of marketing concerned with choosing the best combination of advertising, personal selling, sales promotions, and publicity to sell a product

Question 21

five stages in buyer decision process

Answer 21

1. consumers first recognize need to buy. marketers make buyers aware of products
2. consumers look for info on product. marketers advertise and use personal selling to educate them
3. sales reps can demonstrate product quality, features, benefits, and performance
4. buyers are ready to purchase. sales promotion gives consumers incentives to buy
5. after buying, advertisers remind customers that they made a wise purchase

Question 22

advertising

Answer 22

paid, non-personal communication by which an identified sponsor informs an audience about a product

Question 23

advertising media

Answer 23

specific communication device – tv, radio, internet, direct mail, etc – used to advertise a firm’s message to potential customers

Question 24

personal selling

Answer 24

promotional tool in which a salesperson communicates one to one with potential customers

Question 25

sales promotions

Answer 25

short-term promotional activities designed to stimulate consumer buying or cooperation from distributors and other members of the trade

Question 26

types of sales promotions

Answer 26

coupon, premium, point-of-purchase display, trade show

Question 27

coupon

Answer 27

type of sales promotion where one is given a certificate that entitles them to savings off regular price

Question 28

premium

Answer 28

method of sales promotion where an item is offered free or at a bargain price to ppl in return for buying a specific product

Question 29

point of purchase display

Answer 29

product display is located in a retail store to encourage consumers to buy product

Question 30

trade show

Answer 30

members of a particular industry gather for displays and product demonstrations designed to sell products to customers

Question 31

publicity

Answer 31

info about a company, product, or event transmitted by general mass media

Question 32

public relations

Answer 32

company-influenced info directed at building goodwill with the public or dealing with unfavourable events

Question 33

distribution mix

Answer 33

combination of distribution channels by which a firm gets its products to consumers

Question 34

intermediaries

Answer 34

person or firm that helps distribute a product

Question 35

wholesaler

Answer 35

intermediary who sells products to other companies for resale to final consumers

Question 36

retailer

Answer 36

intermediary who sells products directly to consumers

Question 37

distribution channel

Answer 37

network of interdependent companies through which a product passes from producer to end user

Question 38

direct channel

Answer 38

distribution channel where a product travels from producer to consumer without intermediaries

Question 39

sales agent

Answer 39

independent intermediary who generally deals in the related product lines of a few producers and forms long-term relationships to represent those producers and meet the needs of many customers

Question 40

broker

Answer 40

independent intermediary who matches numerous sellers and buyers as needed, often without knowing in advance who they will be

Question 41

pros and cons of non-direct distribution

Answer 41

cons -- higher prices | pros -- efficient (saves money, time, and energy for the consumer)

Question 42

distribution strategies

Answer 42

intensive distribution, exclusive distribution, selective distribution

Question 43

intensive distribution

Answer 43

distribution strategy where a product is distributed in nearly every possible outlet, using many channels and channel members

Question 44

exclusive distribution

Answer 44

distribution strategy in which a product's distribution is limited to only one wholesaler or retailer in a given geographic area

Question 45

selective distribution

Answer 45

distribution strategy that falls between intensive and exclusive distribution, calling for the use of a limited number of outlets for a product

Question 46

channel conflict

Answer 46

conflict arising when members of a distribution channel disagree over the roles they should play or the rewards they should receive

Question 47

channel captain

Answer 47

channel member that is the most powerful in determining the roles and rewards of organizations involved in a given channel of distribution

Question 48

vertical marketing system (vms)

Answer 48

system where there is a high degree of coordination among all the units in the distribution channel so that a product moves efficiently from manufacturer to consumer

Question 49

three classifications for retail stores

Answer 49

product-line retailers, bargain retailers, and convenience stores

Question 50

direct-response retail

Answer 50

form of non-store retailing in which firms directly interact with customers to inform them of products and receive sales orders (ex mail order catalogue marketing, telemarketing, direct selling, video/tv, etc)

Question 51

e-intermediary

Answer 51

internet distribution channel member that assists in delivering products to customers or that collects info about various sellers to be presented to consumers

Question 52

shopping agent )e-agent)

Answer 52

e-intermediary in the internet distribution channel that helps ppl find products and prices but doesn't take possession of the products

Question 53

electronic retailing (online retailing)

Answer 53

non-store retailing where info about the seller's products and services is connected to consumers' computers, allowing consumers to receive the info and purchase products at home (ex amazon)

Question 54

interactive retailing

Answer 54

non-store retail that uses a website to provide real-time sales and customer service

Question 55

physical distribution

Answer 55

activities needed to move a product efficiently from manufacturer to consumer

Question 56

warehousing

Answer 56

physical distribution operation concerned with the storage of goods

Question 57

examples of ways to transport goods

Answer 57

trucks, planes, digital transmission