Chapter 14: Managing Distribution and Pricing

Question 1

Companies partner with________ to help distribute products to the customer

Answer 1

marketing intermediaries like retailers and wholesalers

Question 2

4 common distribution channels

Answer 2

1. Direct channel
2. producer to retailer to customer channel
3. producer to wholesaler to retailer to customer channel
4. producer to agent to wholesaler to retailer to customer channel

Question 3

organization that helps move products from producers to customers

Answer 3

marketing intermediaries

Question 4

businesses that specialize in selling products to the end user

Answer 4

retailers

Question 5

companies that sell products to other businesses, like retail stores instead of selling to customers

Answer 5

wholesalers

Question 6

a distribution channel where the producer sells directly to customers with no marketing intermediaries in between

Answer 6

direct channel

Question 7

a distribution channel where the producer sells to a retail store, which then sells to customers. Is also the largest and most common type of marketing

Answer 7

producer to retailer to customer channel

Question 8

a D.C where goods are first sold to wholesalers and then to retailers

Answer 8

producer to wholesaler to retailer to customer channel

Question 9

a distribution channel similar to the producer to wholesaler to retailer channel but with the addition of sales agents who connect buyers to sellers

Answer 9

producer to agent to wholesaler to retailer to customer channel

Question 10

Benefits of marketing intermediaries

Answer 10

1. they provide efficiency and assortment
2. break bulk for producers
3. provide valuable market information
4. provide an instant sale infrastructure for the producer

Question 11

Most important benefit of marketing intermediary

Answer 11

provides an instant sale infrastructure for the producer

Question 12

____ are the link between producers and customers

Answer 12

retailers

Question 13

4 common features that differentiate various physical retailers

Answer 13

1. number of product categories
2. pricing
3. distribution intensity
4. size and selection

Question 14

the level of market coverage of a product, and is usually measured by the # of outlets where the product is sold

Answer 14

distribution intensity

Question 15

Convenience goods generally would use _____ distribution

Answer 15

intensive

Question 16

shopping goods would use ______ or _______ distribution

Answer 16

intensive or selective

Question 17

specialty and unsought products would use _____ distribution

Answer 17

exclusive

Question 18

retail stores that employ 25 or more staff

Answer 18

Department stores

Question 19

sell products at a lower price

Answer 19

discount stores

Question 20

sell a limited variety of products

Answer 20

convenience stores

Question 21

Large-self service store

Answer 21

supermarkets

Question 22

large retail stores that carry additional product lines

Answer 22

superstore

Question 23

Large-scale members-only establishments

Answer 23

warehouse clubs. ex: Costco

Question 24

Carry a narrow product mix with deep product lines

Answer 24

traditional specialty stores

Question 25

stores that buy manufacturers seconds and off-season merchandise. ex: Winners

Answer 25

Off-price retailer

Question 26

Very large specialty stores that concentrate on a single product line and compete by offering low prices

Answer 26

Category killers

Question 27

selling that does not take place in conventional store

Answer 27

non-store retailing

Question 28

____ use direct selling, direct marketing and vending machines

Answer 28

non-store retailing

Question 29

the marketing of products to customers through face-to -face sales

Answer 29

direct selling

Question 30

the use of the phone, internet to communicate product and organizational info to customers

Answer 30

direct marketing

Question 31

3 primary functions of physical distribution:

Answer 31

inventory management, warehousing and transportation

Question 32

the supply of goods that a company holds for use in production or for sale of customers

Answer 32

inventory

Question 33

deciding how much of each type of inventory to keep on hand

Answer 33

inventory management

Question 34

receiving and storing goods, then preparing them for transportation

Answer 34

warehousing

Question 35

transportation (function of physical distribution)

Answer 35

the shipment of products

Question 36

the mix of marketing intermediaries a producer uses to move products to customers

Answer 36

channel of distribution

Question 37

the actual type of transportation for moving physical goods from one point to another

Answer 37

mode of distribution

Question 38

Factors that affect product price

Answer 38

economic conditions, the industry, and stage of a products life cycle

Question 39

if a customer is in a competitive industry it sets prices

Answer 39

comparable to similar products

Question 40

3 keys to consider when determining pricing

Answer 40

your cost, max price customers are willing to pay, what competitors charge

Question 41

minimum number of units the company must sell to cover costs

Answer 41

break-even-point

Question 42

operating costs of a company

Answer 42

fixed cost

Question 43

cost of producing or purchasing product

Answer 43

variable cost

Question 44

the profit you make per unit of sale because it is the amount of money that each sale contributes to paying fixed costs

Answer 44

contribution margin

Question 45

action designed to achieve pricing objectives

Answer 45

pricing strategy

Question 46

new-product pricing

Answer 46

price skimming and penetration pricing

Question 47

strategy of charging the highest possible price for a product during the introduction stage of life cycle

Answer 47

price skimming

Question 48

strategy of selling new products at low prices

Answer 48

price penetration

Question 49

purchases based on the emotional response rather than economically

Answer 49

psychological pricing

Question 50

strategy of setting prices using odd numbers that are slightly below whole dollar amounts

Answer 50

odd-number pricing

Question 51

setting a single price for 2 or more units. ex: 2 cans for 99c rather than 50c per can

Answer 51

multiple-unit pricing

Question 52

pricing a product at a moderate level and positioning it next to a more expensive model

Answer 52

reference pricing

Question 53

packaging 2 or more products to be sold for single price

Answer 53

bundle pricing

Question 54

marketer sets a low price for its products on a consistent basis

Answer 54

everyday low prices

Question 55

sets the price of certain goods on the basis of tradition. ex: chewing gum and chocolate bars

Answer 55

customary pricing

Question 56

can provide marketers with flexibility in price setting

Answer 56

product-line-pricing

Question 57

when the basic product in a product line is priced low, while the price on the items required to operate it are set at a higher price

Answer 57

captive pricing

Question 58

occurs when the highest-quality product in a product line is given the highest price

Answer 58

premium pricing

Question 59

strategy of selling goods only at certain predetermined prices. ex: lulu sports bras are either 34$ or 54$

Answer 59

price lining

Question 60

_____ includes: price leaders, special event pricing, and comparison discounting

Answer 60

promotional pricing

Question 61

involves advertising sales or price cutting linked to holiday or event

Answer 61

special-event pricing

Question 62

are priced below usual markup or below cost

Answer 62

price leaders

Question 63

sets price of a product at specific level and compares it with a higher price

Answer 63

comparison discounting