Chapter 14

Question 1

product

Answer 1

in marketing, any goof or service, along with its perceived attributes and benefits, that creates value for the customer

Question 2

brand

Answer 2

a name, design, symbol, specific colour, slogan, or any other feature that identifies a product, distinguishes it from other products, and creates a perception in the minds of consumers

Question 3

trademark

Answer 3

a legally exclusive design, name, or other identifying mark associated with a company’s brand

Question 4

brand loyalty

Answer 4

a customer’s preference for a particular brand that results in advocacy for that brand

Question 5

master brand

Answer 5

a brand that is so dominant that customers think of it immediately when a product category is mentioned

Question 6

manufacturer brand

Answer 6

a brand that is owned by a national or regional manufacturer; the products are widely distributed

Question 7

dealer brand

Answer 7

a brand that is owned by the wholesaler or retailer rather than the manufacturer

Question 8

generic brand

Answer 8

a brand that carries no specific name associated with a manufacturer, wholesaler, or retailer and usually comes in plain containers and sells for less than brand name products

Question 9

unsought products

Answer 9

products that are either unknown to the potential buyer or are known but not actively sought by the buyer

Question 10

convenience products

Answer 10

relatively inexpensive items that require little shopping effort and are purchased routinely without planning

Question 11

shopping products

Answer 11

items that are bought after considerable planning, including brand-to-brand and store-to-store comparisons of price, suitability, and style

Question 12

specialty products

Answer 12

items for which consumers search long and hard, and for which they refuse to accept substitutes

Question 13

capital products

Answer 13

large, expensive items with a long lifespan that are purchased by businesses for use in making other products or providing a service

Question 14

expense items

Answer 14

items, purchased by businesses, that are smaller and less expensive than capital products and usually have a lifespan of less than one year

Question 15

product life cycle

Answer 15

the pattern of sales and profits over time for a product or product category; consists of an introductory stage, growth stage, maturity stage, and decline stage (that ultimately results in death of the product or product category)

Question 16

profit maximization

Answer 16

a pricing objective that entails getting the largest possible profit from a product by producing it for as long as the revenue from selling the product exceeds the cost of producing it

Question 17

target return of investment

Answer 17

a pricing objective where the price of a product is set so as to give the company the desired profitability in terms of return on its money

Question 18

value pricing

Answer 18

a pricing strategy in which the target market is offered a high-quality product at a fair price and with good service

Question 19

price skimming

Answer 19

the strategy of introducing a product with a high initial price and lowering the price over time as the product moves through its life cycle

Question 20

penetration pricing

Answer 20

the strategy of selling new products at low prices in the hope of achieving a large sales volume

Question 21

leader pricing

Answer 21

the strategy of pricing products below the normal markup or even below cost to attract customers to a store where they would not otherwise shop

Question 22

loss leader

Answer 22

a product priced below cost as part of a leader pricing strategy

Question 23

bundling

Answer 23

the strategy of grouping two or more related products together and pricing them as a single product

Question 24

odd-even (psychological) pricing

Answer 24

the strategy of setting a price at an odd number to connote a bargain and at an even number to suggest quality

Question 25

prestige pricing

Answer 25

the strategy of increasing the price of a product so that consumers will perceive it as being of higher quality, status, or value

Question 26

break-even point (or break-even quantity)

Answer 26

the price at which a product's costs are covered, so additional sales result in profit

Question 27

fixed costs

Answer 27

costs that do not vary with different levels of output; for example, rent

Question 28

variable costs

Answer 28

costs that change with different levels of output; for example; wages and cost of raw materials

Question 29

fixed-cost contribution

Answer 29

the selling price per unit (revenue) minus the variable costs per unit

Question 30

total revenue

Answer 30

the selling price per unit times the number of units sold

Question 31

total cost

Answer 31

the sum of the fixed costs and the variable costs

Question 32

total profit

Answer 32

total revenue minus total cost

Question 33

markup pricing

Answer 33

a method of pricing in which a certain percentage (the markup) is added to the product's cost to arrive at the price

Question 34

activity-based costing (ABC)

Answer 34

ABC assigns resource costs through all the activities to either produce the product or acquire it for resale

Question 35

distribution (logistics)

Answer 35

efficiently managing the acquisition of raw materials to the factory and the movement of products from the producer to industrial users and consumers

Question 36

manufacturer

Answer 36

a producer; an organization that converts raw materials to finished products

Question 37

distribution channel

Answer 37

the series of marketing entities through which goods and services pass on their way from producers to consumers

Question 38

marketing intermediaries

Answer 38

organizations that assist in moving goods and service from producers to end users

Question 39

agents

Answer 39

sales representatives of manufacturers and wholesalers

Question 40

brokers

Answer 40

go-betweens that bring buyers and sellers together

Question 41

industrial distributors

Answer 41

independent wholesalers that buy related product lines from many manufacturers and sell them to industrial users

Question 42

wholesalers

Answer 42

companies that sell finished goods to retailers, manufacturers, and institutions

Question 43

retailers

Answer 43

companies that sell goods to consumers and to industrial users for their own consumption

Question 44

dual distribution (or multiple distribution)

Answer 44

two or more channels that distribute the same product to target markets

Question 45

strategic channel alliances

Answer 45

one manufacturer using another manufacturer's previously established channel to distribute its goods

Question 46

breaking bulk

Answer 46

the process of breaking large shipments of similar products into smaller, more usable lots

Question 47

exclusive distribution

Answer 47

a distribution system in which a manufacturer selects only one or two dealers in an area to market its products

Question 48

selective distribution

Answer 48

a distribution system in which a manufacturer selects a limited number of dealers in an area (but more than one or two) to market its products

Question 49

intensive distribution

Answer 49

a distribution system in which a manufacturer tries to sell its products wherever there are potential customers

Question 50

promotion

Answer 50

the attempt by marketers to inform, persuade, or remind consumers and industrial users to engage in the exchange process

Question 51

promotional mix

Answer 51

the combination of advertising, personal selling, sales promotion, and public relations used to promote a product

Question 52

advertising

Answer 52

and paid form of non-personal presentation by an identified sponsor

Question 53

personal selling

Answer 53

a face-to-face sales presentation to a prospective customer

Question 54

sales promotions

Answer 54

marketing events or sales efforts - not including advertising, personal selling, and public relations - that stimulate buying

Question 55

public relations

Answer 55

any communication or activity designed to win goodwill or prestige for a company or person

Question 56

integrated marketing communications (IMC)

Answer 56

the careful coordination of all promotional activities - media advertising, sales promotion, personal selling, and public relations, as well as direct marketing, packaging, and other forms of promotion - to produce a consistent, unified message that is consumer focused

Question 57

detailing

Answer 57

the physical stocking of merchandise at a retailer by the salesperson who delivers the merchandise

Question 58

push strategy

Answer 58

a promotional strategy in which a manufacturer uses aggressive personal selling and trade advertising to convince a wholesaler or retailer to carry and sell its merchandise

Question 59

pull strategy

Answer 59

a promotional strategy in which a manufacturer focuses on stimulating consumer demand for its product, rather than on trying to persuade wholesalers or retailers to carry the product

Question 60

distribution centres

Answer 60

warehouses that specialize in rapid movement of goods to retail stores by making and breaking bulk

Question 61

inventory control system

Answer 61

a system that maintains an adequate assortment of items to meet users' or customers' needs