Chapter 12, 13, 14 verhage

Question 1

profit equation

Answer 1

the role of price in a firm’s profitability is demonstrated by the so called profit equation

profit = total revenue - total costs
= (unit price x quantity sold) - total costs

Question 2

price setting

Answer 2

the customer is the ideal place to start in price setting
the key question is how much money is the product or service worth to the buyer.
the art of the products value in the eye of the consumer into the amount of money he is willing to pay.

Question 3

pricing strategy

Answer 3

in addition to demand and cost consideration you should also take into account the corporate and marketing strategy, competition, other components of the product mix, the resellers interest, and any legal and ethical constraints.

Question 4

price

Answer 4

is the exchange value of the product expressed in terms of amount of money the buyer is willing to pay in return for the desired product or service.
for this you have to understand the consumers value perception

Question 5

price discrimination

Answer 5

refers to charging different buyers, different prices for the same quantity of products or services.

Question 6

loss leader

Answer 6

products that are sold at a lower than usual markup for the purpose of increasing store traffic

Question 7

cost

Answer 7

pricing at less than cost is not a common strategy

Question 8

variable cost

Answer 8

cost of raw materials, is a cost that varies directly with the number of units produced and marketed

Question 9

fixed costs

Answer 9

often called overhead costs, tend to remain stable at any production level, this includes rent, lease payment and insurance premiums.

Question 10

price leader

Answer 10

most companies will follow a price reduction by the price leader, but not a price increase.

Question 11

complementary products

Answer 11

products sold or used jointly with other products, such as printers and ink cartridges.

Question 12

middlemen

Answer 12

by setting price you must take conflicting interest of the middle man in account

Question 13

margin

Answer 13

price negotiations begin with normal trade margins for the product.
the high gross margin for electronics retailers includes a supplier contribution to their promotion and service costs

Question 14

cartel

Answer 14

many countries have laws designed to protect the general interest by prohibiting price fixing, cartels or other contracts of conspiracies that restrain trade

Question 15

predatory pricing

Answer 15

a practice where one company tries to drive out competitors by temporarily pricing at such a low level that rivals cannot match their cuts and still profit.

Question 16

revenue

Answer 16

is the per unit price multiplied by the number of units sold

Question 17

price mechanism

Answer 17

has three vital functions

1. comparison
2. stimulation and reduction
3. rationing

Question 18

demand curve

Answer 18

shows the maximum number of products that customers will buy in a market during a period of time at various prices if all other factors remain the same

Question 19

introductory price

Answer 19

once the initial price has been announced it may be difficult to change.

Question 20

prestige products

Answer 20

or status products, because these appeal to status-conscious consumers, their price, should be relatively high.

Question 21

price skimming

Answer 21

is a strategy of introducing a new product at an artificially high price.

works best for new types of durable consumer goods, such as high tech cellular phones, from which prestige buyers derive status.

Question 22

penetration price strategy

Answer 22

opposite of price skimming a company using this strategy introduces a new product at a very low price to speed up ots market acceptance and drive sales upward.

Question 23

pricing strategy

Answer 23

provides the framework through which we translate our pricing objectives into actual market pricing tactics.

Question 24

pricing objectives

Answer 24

are formulated in various ways, some managers derive their pricing objectives straight from corporate goals.

Question 25

price perception

Answer 25

reflects how consumers view or experience a price

Question 26

price awareness

Answer 26

refers to the degree of consumer knowledge about the prices of alternative products and services that they are interested in buying.

Question 27

price acceptance

Answer 27

by measuring the price acceptance, the marketing researcher can also discover if consumers think the prices charged are reasonable.

Question 28

price treshold

Answer 28

the highest and lowest prices that buyers are willing to pay for a particular product or service.

Question 29

price sensitivity

Answer 29

indicates the extent to which consumers will reach to small price changes.

Question 30

market share objectives

Answer 30

the goal to maintain or increase their share of a particular market.

Question 31

price wars

Answer 31

the primary advantage of meeting price cuts is that it will eliminate competitive advantage. it may also prevent price war with prices spiralling downward in successive rounds of price cuts actuated by competitors to maintain their unit sales or market shares.

Question 32

value pricing

Answer 32

compete on the basis of a superior price/quality relationship.

Question 33

non-price competition

Answer 33

instead of emphasizing low prices, they could focus on creative use of other marketing instruments.

Question 34

distribution

Answer 34

a company has to decide which distribution channels are most suitable or delivering its products and which retailers are best to engage for that purpose.

Question 35

distribution channel

Answer 35

the distribution channel is a network of independent organisations that, combined, perform all of the activities necessary to link producers and end customers.

Question 36

distribution strategy

Answer 36

involves the analysis, planning, implementation and control of the activities that make the right products available to the target market at the right time, at the right place and at the lowest possible cost.

Question 37

intermediary

Answer 37

functioning as exporters, brokerage firms, importers, agents, wholesalers and retailers, are organisations or individuals that operate between the producer and consumer in a channel of distribution

Question 38

channel structure

Answer 38

the shape or form that a distribution channel takes

Question 39

channel length

Answer 39

the channels vary in number

Question 40

direct channel

Answer 40

the movement of products and services from producers to consumers without the use of independent intermediaries

Question 41

indirect channel

Answer 41

if it is not a producer -> consumer channel but entails more than one like producter -> retailers -> consumer producer -> wholesalers ->retailers -> consumer producer -> agents -> wholesalers -> retailers -> consumer

Question 42

single channel strategy

Answer 42

reach several segments with a single product

Question 43

dual distribution

Answer 43

also called a multichannel distribution system by using this firms can expand their market coverage, lower marketing costs and offer greater opportunities for customisation, which all help increase sales

Question 44

hybrid system

Answer 44

in which the channel members perform complementary tasks for the same consumer instead of for different segments

Question 45

distribution functions

Answer 45

``` as a producer moves down the distribution channel from producer to consumer it changes hands more than once as independent channel members perform various tasks or distribution functions many of these require special skills. six of the most important functions are 1. relationship building 2. promotion 3. sorting 4. inventory control 5. financing 6. reasearch and marketing information ```

Question 46

upstream management

Answer 46

fouses on managing raw materials, inbound logistics and warehouse and storage facilities

Question 47

downstream management

Answer 47

focuses on managing finishes product storage, outbound logistics, marketing and sales, and customer service

Question 48

supply chain

Answer 48

the complete sequence of suppliers and activities that contribute to the creation and delivery of products and services

Question 49

value delivery network

Answer 49

the cooporation between the company and its suppliers, distributors and ultimately costumers who partner with each other to enhance the performance of the entire system and provide buyers with the highest possible value results

Question 50

supply chain management

Answer 50

through supply chain management the channel members form long term partnerships in an effort to minimise transportation, inventory, administrative and handling costs by eliminating inefficiencies

Question 51

distribution intensity

Answer 51

the number of outlets used to distribute a product or service in a particular market

Question 52

intensive distribution

Answer 52

the product or service is made available to buyers through as many outlets as possible, in effect all suitable wholesalers and retail stores willing to stock and sell the product

Question 53

selective distribution

Answer 53

is the level of distribution at which a product is sold by a number of retailers but not by all potential retailers in a market area

Question 54

exclusive distribution

Answer 54

is the extreme opposite of intensive distribution because a single retail outlet in a particular market is allowed to sell the company's products

Question 55

retailing

Answer 55

includes all activities involved in selling products and services directly to ultimate consumers for their personal, family or household use

Question 56

sorting

Answer 56

assembling assortments od products and services from various suppliers to sell

Question 57

wheel of retailing

Answer 57

according to this theory, new types of retailers that try to fill niches in the retailing environment enter the market as low margin, low status discounters.

Question 58

merchandise mix

Answer 58

the total set of all product lines and products offered for sale by a retailer

Question 59

specialty store

Answer 59

relatively small stores offering a great deal of product depth within a narrow range of product lines.

Question 60

specialisation

Answer 60

may take the form of offering consumption related items or may be based on appealing to a specific consumer segment

Question 61

convenience store

Answer 61

a small shop located near a residential area that carries a limited assortment of food products and high turnover convenience goods.

Question 62

supermarket

Answer 62

large department food stores that carry a limited range of non-food products

Question 63

scrambled merchandising

Answer 63

the practice of s single retailer selling unrelated lines of merchandise

Question 64

hypermarket

Answer 64

or superstores are huge establishments, originally introduced in europe are at least twice the size of supermarkets and sell everything

Question 65

supercentre

Answer 65

a combination of supermarkets and discount departments store that is not as mommoth as a hypermarket

Question 66

department store

Answer 66

a large service-oriented retail institution that carries a wide product mix of shopping and specialty goods, and offers a deep selection in product categories such as apparel, cosmetics, jewellery and household products.

Question 67

shop in the shop

Answer 67

when in department store you pay within each department rather than at a center check out point. department stores are strategically located in attractive urban areas or occupy anchor positions in shopping malls.

Question 68

discount stores

Answer 68

offshoots of department stores they carry the same but at lower prices

Question 69

variety store

Answer 69

targets the mass market with an extensive range of low-priced products (in europe and latin america)

Question 70

warehouse club

Answer 70

the merchandise is usually displayed, in barebones building , in boxes or in pallets, reinforces the retailer bargain image among price conscious customers.

Question 71

factory outlet store

Answer 71

are operated by manufacturers of a national brand and typically dispose of surplus stocks or clearance merchandise.

Question 72

limited-line store

Answer 72

offers an extensive assortment of models within one product line or a few related lines.

Question 73

category killer

Answer 73

are special type of limited line store, by offering at low prices a huge selection of products in a single product line, these store dominate their narrow merchandise segments

Question 74

non store retaillers

Answer 74

online stores or phone stores

Question 75

direct selling

Answer 75

the marketing of products and services to ultimate consumers through personal interactions and sales presentations at home or at the work place door - to - door selling

Question 76

party plan

Answer 76

a direct seller attend a get together at a host customers home to demonstrate products and take orders.

Question 77

networkd marketing

Answer 77

direct selling companies in which a so-called master distributor persuades other individuals to join the organisation as independent agents and then resells the company's merchandise to these distributors who eventually sell it to consumers.

Question 78

pyramid scheme

Answer 78

an illegal network in which the initial distributors profit by selling merchandise to other distributors, with most of the products never reaching the ultimate consumer

Question 79

street peddling

Answer 79

for example people selling snacks and food items from pushcars on the street

Question 80

destination store

Answer 80

is a store with an established image and an attractive product assortment that consumers deliberately visit.

Question 81

planned shopping center

Answer 81

a group of retail stores, designed, coordinated, and market to shoppers in a geographic trade area in order to satisfy specific customer needs.

Question 82

balanced tenancy

Answer 82

so that the stores complement each other in variety and quality of their merchandise

Question 83

neighbourhood shopping centre

Answer 83

consists of ten or fifteen stores, provides sale of convenience products and personal services that meet the daily needs of an immediate neighbourhood area.

Question 84

community shopping centre

Answer 84

designed to serve approximately five times the number of people that a neighbourhood centre serves. draw consumers looking for specialty goods.

Question 85

regional shopping centre

Answer 85

or malls attract large number of shoppers willing to drive significant distances to find products and services not available in their home towns.

Question 86

factory outlet mall

Answer 86

these malls feature discount and manufactury owned outlet stores selling excess merchandise although some also offer upscale merchandise

Question 87

power center

Answer 87

shopping centre that does not include a traditional anchor department store

Question 88

off price retailer

Answer 88

stores that purchase manufacturers overruns returns seconds and off season products for resale to consumers at steep discounts

Question 89

lifestyle centre

Answer 89

open air retailing format appeals to upper income consumers who dislike malls

Question 90

e-commerce

Answer 90

refers to a company efforts to facilitate its online merchandise sales by using marketing principles to guide prospective buyers to a website

Question 91

e-marketing

Answer 91

is the means by which e-commerce is achieved

Question 92

e-retailing

Answer 92

is an integral compoonent of e-marketing: | the e-marketing efforts directed towards ultimate consumers

Question 93

online-marketing

Answer 93

also called internet marketing aways involves an interactive computer system to connect sellers and buyers electronically

Question 94

brick and mortar

Answer 94

bring and click firms operate as traditional stores but, as multichannel retailers, also have a significant web presence

Question 95

pure-click

Answer 95

internet only retailers limit themselves to conducting business online, making the internet the core of their marketing strategied

Question 96

interactive marketing

Answer 96

as soon as a consumer clicks on an area of the website to learn more about a products features and price the company can provide him with details he needs to make an informed purchased decision