Chapter 12

Question 1

pricing

Answer 1

process of determining what a company will receive in exchange for its products

Question 2

pricing objectives

Answer 2

the goals that sellers hope to achieve in pricing products

Question 3

market structure

Answer 3

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

Question 4

cost-oriented pricing

Answer 4

pricing that considers the firm’s desire to make a profit and its need to cover production costs

Question 5

markup

Answer 5

amount added to an item’s purchased cost to sell it at a profit

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 product produced and sold

Question 8

breakeven analysis

Answer 8

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

Question 9

breakeven point

Answer 9

sales volume at which the seller’s total revenue from sales equals total costs (variable and fixed) with neither profit not loss

Question 10

price skimming

Answer 10

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

Question 11

penetration pricing

Answer 11

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

Question 12

price lining

Answer 12

setting a limited number of prices for certain categories of products

Question 13

psychological pricing

Answer 13

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

Question 14

odd-even pricing

Answer 14

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

Question 15

discount

Answer 15

price reduction offered as an incentive

Question 16

distribution mix

Answer 16

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

Question 17

intermediary

Answer 17

individual or firm that helps to distribute a product

Question 18

wholesaler

Answer 18

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

Question 19

retailer

Answer 19

intermediary who sells products directly to consumers

Question 20

distribution channel

Answer 20

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

Question 21

direct channel

Answer 21

distribution channel in which a product travels from producer to consumer without intermediaries

Question 22

sales agent

Answer 22

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 23

broker

Answer 23

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

Question 24

department store

Answer 24

large product-line retailer characterized by organization into specialized departments

Question 25

supermarket

Answer 25

large product-line retailer offering a variety of food and food-related items in specialized departments

Question 26

specialty store

Answer 26

retail store carrying one product line or category of related products

Question 27

bargain retailer

Answer 27

retailer carrying a wide range of products at bargain prices

Question 28

discount house

Answer 28

bargain retailer that generates large sales volume by offering goods at substantial price reductions

Question 29

catalog showroom

Answer 29

bargain retailer in which customers place orders for catalog items to be picked up at on-premises warehouse

Question 30

factory outlet

Answer 30

bargain retailer owned by the manufacturer whose products it sells

Question 31

wholesale club

Answer 31

bargain retailer offering large discounts on brand-name merchandise to customers who have paid membership fees

Question 32

convenience store

Answer 32

retail store offering easy accessibility, extended hours, and fast service

Question 33

direct-response retailing

Answer 33

form of nonstore retailing in which firms directly interact with customers to inform them of products and to receive sales orders

Question 34

mail order (catalog marketing)

Answer 34

form of nonstore retailing in which customers place orders for catalo merchandise received through the mail

Question 35

telemarketing

Answer 35

form of nonstore retailing in which the telephone is used to sell directly to consumers

Question 36

direct selling

Answer 36

form of nonstore retailing typified by door-to-door sales

Question 37

shopping agent (e-agent)

Answer 37

e-intermediary (middleman) in the internet distribution channel that assists users in finding products and prices by does not take possession of products

Question 38

electronic retailing

Answer 38

nonstore retailing in which information about the seller's products and services is connected to consumers' computers, allowing consumers to receive the information and purchase the products in the home

Question 39

e-catalog

Answer 39

nonstore retailing in which the internet is used to display products

Question 40

electronic storefront

Answer 40

commercial Web site at which customers gather information about products and buying opportunities, place orders, and pay for purchases

Question 41

cybermall

Answer 41

collection of virtual storefronts (business Web sites) representing a variety of products and product lines on the internet

Question 42

interactive marketing

Answer 42

nonstore retailing that uses a Web site to provide real-time sales and customer service

Question 43

video marketing

Answer 43

nonstore retailing to consumers via home television

Question 44

physical distribution

Answer 44

activities needed to move a product efficiently from manufacture to consumer

Question 45

warehousing

Answer 45

physical distribution operation concerned with the storage of goods

Question 46

private warehouse

Answer 46

warehouse owned by and providing store for a single company

Question 47

public warehouse

Answer 47

independently owned and operated warehouse that stores good for many firms

Question 48

promotion

Answer 48

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

Question 49

positioning

Answer 49

process of establishing an identifiable product image in the minds of consumers

Question 50

promotional mix

Answer 50

combination of tools used to promote a product

Question 51

advertising

Answer 51

promotional tool consisting of paid, nonpersonal communication used by an identified sponsor to inform an audience about a product

Question 52

advertising media

Answer 52

variety of communication devices for carrying a seller's message to potential customers

Question 53

media mix

Answer 53

combination of advertising media chosen to carry a message about a product

Question 54

personal selling

Answer 54

promotional tool in which a salesperson communicates one-on-one with potential customers

Question 55

order processing

Answer 55

personal-selling task in which salespeople receive orders and see to their handling and delivery

Question 56

creative selling

Answer 56

personal-selling task in which salespeople try to persuade buyers to purchase products by providing information about their benefits

Question 57

missionary selling

Answer 57

personal-selling task in which salespeople promote their firms and products rather than try to close sales

Question 58

sales promotion

Answer 58

short-term promotional activity designed to encourage consumer buying, industrial sales, or cooperation from distributors

Question 59

coupon

Answer 59

sales-promotion technique in which a certificate is issued entitling the buyer to a reduced price

Question 60

premium

Answer 60

sales-promotion technique in which offers of free or reduced-priced items are used to stimulate purchases

Question 61

point-of-sale (POS) display

Answer 61

sales-promotion technique in which product displays are located in certain areas to stimulate purchase or to provide information on a product

Question 62

trade show

Answer 62

sales-promotion technique in which various members of an industry gather to display, demonstrate and sell products

Question 63

publicity

Answer 63

promotional tool in which information about a company, a product, or an event is transmitted by the general mass media to attract public attention

Question 64

public relations

Answer 64

company-influenced information directed at building goodwill with the public or dealing with unfavorable events