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79 Cards in this Set
- Front
- Back
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Ad Response function
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-a phenomenon in which spending for advertising and sales promotion increases sales or market share up to a certain level but then produces diminishing returns
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Institutional Advertising
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-A form of advertising designed to enhance a company's image rather than promote a particular product
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Product Advertising
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-A form of advertising that touts the benefits of a specific good or service
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Advocacy Advertising
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-A form of advertising in which an organization expresses its views on controversial issues or responds to media attacks
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Pioneering Advertising
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-A form of advertising designed to stimulate primary demand for a new product or product category
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Competitive Advertising
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-A form of advertising designed to influence demand for a specific brand
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Comparative Advertising
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-A form of advertising that compares two or more specifically named or shown competing brands on one or more specific attributes
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Ad Campaign
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-A series of related advertisements focusing on a common theme, slogan, and set of advertising appeals
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Advertising Objective
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-A specific communication task that a campaign should accomplish for a specified target audience during a specified period
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Advertising Appeal
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-a reason for a person to buy a product
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Unique Selling Proposition
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-a desirable, exclusive, and believable advertising appeal selected as the theme for a campaign
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Media Planning
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-the series of decisions advertisers make regarding the selection and use of media, allowing the marketer to optimally and cost-effectively communicate the message to the target audience
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Media Mix
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-the combination of media to be used for a promotional campaign
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Cost per contact
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-the cost of reaching one member of the target market
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Reach
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-the number of target consumers exposed to a commercial at least once during a specific period, usually four weeks
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Frequency
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-the number of times an individual is exposed to a given message during a specific period
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Audience Selectivity
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-the ability of an advertising medium to reach a precisely defined market
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Media Schedule
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-designation of the media, the specific publications or programs, and the insertion dates of advertising
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Continuous media schedule
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-a media scheduling strategy in which advertising is run steadily throughout the advertising period; used for products in the later stages of the product life cycle
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Flighted media schedule
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-a media scheduling strategy in which ads are run heavily every other month or every two weeks, to achieve a greater impact with an increased frequency reach at those times
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Pulsing media schedule
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-a media scheduling strategy that uses continuous scheduling throughout the year coupled with a flighted schedule during the best sales periods
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Seasonal media schedule
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-a media scheduling strategy that runs advertising only during times of the year when the product is most likely to be used
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Sales Promotion
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-Marketing communication activities that typically apply short-term incentives to motivate customers or channel members to purchase (consumer & trade promotion)
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Consumer Sales Promotion
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-sales promotion activities targeting the ultimate consumer
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Trade Sales Promotion
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-sales promotion activities targeting a marketing channel member, such as a wholesaler or retailer
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Sales Promotion tools
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-Coupons
-Rebates -Premiums -Loyalty Marketing programs -Contests/Sweepstakes -Sampling -Point of Purchase Display -Online sales promotion |
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Loyalty Marketing Programs (sales promotion tool)
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-A promotional program designed to build long-term, mutually beneficial relationships between a company and its key consumers
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Point-of-Purchase (P-o-P) display
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-A promotional display set up at the retailer's location to build traffic, advertise the product, or induce impulse buying
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Trade Sales promotional tools
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-Trade Allowance
-Push Money -Training -Free Merchandise -Store Demonstrations -Business Meetings, Conventions, Trade shows |
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Trade Allowance
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-A price reduction offered by manufacturers to intermediaries, such as wholesalers and retailers
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Push Money
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-Money offered to channel intermediaries to encourage them to "push" products - that is, to encourage other members of the channel to sell the products
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Personal Selling
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-Direct communication between sales rep and customer(s) in an attempt to influence each other
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Advantages of Personal Selling
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-Provides a detailed explanation or demonstration of the product
-The sales message can be varied according to the motivations and interests of each prospective customer -Can only be directed to qualified prospects -Personal Selling costs can be controlled by adjusting the size of the sales force in 1 person increments -Considerably more effective than other forms of promotion in obtaining a sale and gaining a satisfied customer |
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-Product has high value
-its a custom-made product -the product is technically complex -Customers are concentrated (Ex: insurance policies, custom windows, airplane engines) |
Personal Selling is more important IF:
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-Product has low value
-its a standardized product -the product is easy to understand -customers are geographically dispersed (Ex: soap, magazine, subscriptions, cotton T-shirts) |
Advertising and Sales Promotion are more important IF:
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Relationship Selling (Consultative Selling)
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-A sales practice that involves building, maintaining, and enhancing interactions with customers in order to develop long-term satisfaction through mutually beneficial partnerships
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1) Generating leads
2) Qualifying leads 3) Approaching the customer and probing needs 4) Developing and proposing solutions 5) Handling objections 6) Closing the sale 7) Following up |
7 steps in the Personal Selling Process
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Price
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-that which is given up in an exchange to acquire a good or service, typically money but also could be related to sacrifice (time and hassle); high prices symbolize quality
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Value
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-Is based upon Perceived Satisfaction and can change when price or benefits change
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Revenue
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(Price X Units) - Expenses = Revenue
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-Profit maximization
-Satisfactory profits -Target return on Investment |
Profit-Oriented pricing objectives
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-Market share (a company's product sales as a % of total sales for that industry)
-Sales maximization |
Sales-Oriented pricing objectives
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-maintains existing prices or meets the competition's prices
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Status Quo pricing objectives
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-Demand
-Supply -Equilibrium -Elasticity of demand |
Determinants of Price
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Elasticity of Demand
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-a situation in which consumer demand is sensitive to changes in price
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Yield Management Systems
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-A technique for adjusting prices that uses complex mathematical software to profitably fill unused capacity by discounting early purchases, limiting early sales at these discounted prices, and overbooking capacity
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Markup Pricing
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-the cost of buying the product from the producer, plus amounts for profit and for expenses not otherwise accounted for
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Profit maximization
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-a method of setting prices that occurs when marginal revenue equals marginal cost
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Break-Even analysis
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-a method of determining what sales volume must be reached before total revenue equals total costs
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1) Introductory
2) Growth 3) Maturity 4) Decline |
Product life cycle stages
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1) Establish pricing goals
2) Estimate demand, costs, and profits 3) Choose a pricing strategy to help determine a base price 4) Fine-tune the base price with pricing tactics |
Steps in Setting a Price
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Price Skimming
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-charging a high introductory price, often coupled with heavy promotion
(above the market) |
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Penetration Pricing
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-charging a relatively low price for a product initially as a way to reach the mass market
(below the market) |
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Status Quo Pricing
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-charging a price identical to or very close to the competition's price
(at the market) |
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Unfair trade practice acts
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-laws that prohibit wholesalers and retailers from selling below cost
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Price Fixing
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-an agreement between 2 or more firms on the price they will charge for a product
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Predatory Pricing
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-the practice of charging a very low price for a product with the intent of driving competitors out of business or out of a market
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1) Quantity discounts
2) Cash discounts 3) Functional discounts 4) Seasonal discounts 5) Promotional allowances |
5 Types of Discounts/Allowances
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Value-based pricing
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-setting the price at a level that seems to the customer to be a good price compared to the prices of other options
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1) FOB Origin pricing
2) Uniform delivered pricing 3) Zone pricing 4) Freight absorption pricing 5) Basing-point pricing |
5 types of Geographic pricing
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Single-price tactic
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-offers all goods and services at the same price (or perhaps 2 or 3 prices
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Flexible pricing (variable pricing)
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-different customers pay different prices for essentially the same merchandise bought in equal quantities
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Price lining
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-the practice of offering a product line with several items at specific price points
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Leader Pricing
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-a price tactic in which a product is sold near or even below cost in the hope that shoppers will buy other items once they are in the store
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Bait pricing
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-tries to get consumers into a store through false or misleading price advertising and then uses high-pressure selling to persuade consumers to buy more expensive merchandise
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Odd-Even pricing
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-uses odd-numbered prices to connote bargains and even-numbered prices to imply quality
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Price bundling
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-marketing 2 or more products in a single package for a special price
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Two-part pricing
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-a price tactic that charges 2 separate amounts to consume a single good or service
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Consumer Penalty
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-an extra fee paid by the consumer for violating the terms of the purchase agreement
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Product line pricing
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-setting prices for an entire line of products
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If products are Complimentary:
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-an increase in the sale of one good causes an increase in demand for the complementary product, and vice versa
(Ex: the sale of ski poles depends on the demand for skis, making these 2 items complimentary) |
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Substitutes
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-2 products in a line can also be substitutes for each other. If buyers buy one item in the line, they are less likely to buy a second item in the line
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Neutral relationship
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-can exist between 2 products. In other words, demand for one of the products is unrelated to demand for the other
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Joint costs
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-costs that are shared in the manufacturing and marketing of several products in a product line
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FOB Origin pricing
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-requires the buyer to pay the freight costs from the shipping point (free-on-board)
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Uniform delivered pricing
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-the seller pays the freight charges and bills every purchaser an identical, flat freight charge
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Zone pricing
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-divides the US (or the total market) into segments or zones and charges a flat freight rate to all customers in a given zone
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Freight absorption pricing
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-the seller pays all or part of the actual freight charges and does not pass them on to the buyer
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Basing-point pricing
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-charges freight from a given (basing) point, regardless of the city from which the goods are shipped
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