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Exam 3 from Pride & Ferrel
Chs. 14, 15, 19 & 20
158
Marketing
Undergraduate 3
11/10/2010

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Cards

Term
Price
Definition
the value paid for a product in a marketing exchange
Term
barter
Definition
the trading of products
Term
price competition
Definition
emphasizing price as an issue and matching or beating competitors' prices
Term
nonprice competition
Definition
emphasizing factors other than price to distinguish a product from competing brands
Term
demand curve
Definition
a graph of the quantity of products expected to be sold at various prices if other factors remain constant
Term
price elasticity of demand
Definition
a measure of the sensitivity of demand to changes in price
Term
fixed costs
Definition
costs that do not vary with changes in the number of units produced or sold
Term
average fixed cost
Definition
the fixed cost per unit produced
Term
variable costs
Definition
costs that vary directly with changes in the number of units produced or sold
Term
average variable cost
Definition
the variable cost per unit produced
Term
total cost
Definition
the sum of average fixed and average variable costs times the quantity produced
(AFC + AVC)QTY
Term
average total cost
Definition
the sum of the average fixed cost and the average variable cost
AFC + AVC
Term
marginal cost (MC)
Definition
the extra cost incurred by producing one more unit of a product
Term
marginal revenue (MR)
Definition
the change in total revenue resulting from the sale of an additional unit of a product
Term
break-even point
Definition
the point at which the costs of producing a product equal the revenue made from selling the product
Break-Even Pt = (Fixed Costs)/(Per-Unit Contribution to Fixed Costs)
= (Fixed Costs)/(Price-Variable Costs)
Term
internal reference price
Definition
a price developed in the buyer's mind through experience with the product
Term
external reference price
Definition
a comparison price provided by others
Term
value conscious
Definition
concerned about price and quality of a product
Term
price conscious
Definition
striving to pay low prices
Term
prestige sensitive
Definition
drawn to products that signify prominence and status
Term
price discrimination
Definition
employing price differentials that injure competition by giving one or more buyers a competitive advantage
Term
trade, or functional, discount
Definition
a reduction off the list price a producer gives to an intermediary for performing certain functions
Term
quantity discounts
Definition
deductions from the list price for purchasing in large quantities
Term
cumulative discounts
Definition
quantity discounts aggregated over a stated time period
Term
noncumulative discounts
Definition
onetime price reductions based on the number of units purchased, the dollar value of the order, or the product mix purchased
Term
cash discounts
Definition
price reductions given to buyers for prompt payment or cash payment
Term
seasonal discount
Definition
a price reduction given to buyers for purchasing goods or services out of season
Term
allowance
Definition
a concession in price to achieve a desired goal
Term
geographic pricing
Definition
reductions for transportation and other costs related to the physical distance between buyer and seller
Term
F.O.B. factory
Definition
the price of merchandise at the factory before shipment
Term
F.O.B. destination
Definition
a price indicating the producer is absorbing shipping costs
Term
uniform geographic pricing
Definition
charging all customers the same price, regardless of geographic location
Term
zone pricing
Definition
pricing based on transportation costs within major geographic zones
Term
base-point pricing
Definition
geographic pricing that combines factory price and freight charges from the base point nearest the buyer
Term
freight absorption pricing
Definition
absorption of all or part of actual freight costs by the seller
Term
transfer pricing
Definition
prices charged in sales between an organization's units
Term
pricing objectives
Definition
goals that describe what a firm wants to achieve through pricing
Term
cost-based pricing
Definition
adding a dollar amount or percentage to the cost of the product
Term
cost-plus pricing
Definition
adding a specified dollar amount or percentage to the seller's cost
Term
markup pricing
Definition
adding to the cost of the product a predetermined percentage of that cost
Markup as Percentage of Cost = (Markup)/(Cost)
Markup as Percentage of Selling Price = (Markup)/(Selling Price)
Term
demand-based pricing
Definition
pricing based on the level of demand for the product
Term
competition-based pricing
Definition
pricing influenced primarily by competitors' prices
Term
differential pricing
Definition
charging different prices to different buyers for the same quality and quantity of product
Term
negotiated pricing
Definition
establishing a final price through bargaining between seller and customer
Term
secondary-market pricing
Definition
setting one price for the primary target market and a different price for another market
Term
periodic discounting
Definition
temporary reduction of prices on a patterned or systematic basis
Term
random discounting
Definition
temporary reduction of prices on an unsystematic basis
Term
price skimming
Definition
charging the highest possible price that buyers who most desire the product will pay
Term
penetration pricing
Definition
setting prices below those of competing brands to penetrate a market and gain a significant market share quickly
Term
product-line pricing
Definition
establishing and adjusting prices of multiple products within a product line
Term
captive pricing
Definition
pricing the basic product line low, while pricing related items higher
Term
premium pricing
Definition
pricing the highest-quality or most versatile products higher than other models in the product line
Term
bait pricing
Definition
pricing an item in a product line low with the intention of selling a higher-priced item in the line
Term
price lining
Definition
setting a limited number of prices for selected groups or lines of merchandise
Term
psychological pricing
Definition
pricing that attempts to influence a customer's perception of price to make a product's price more attractive
Term
reference pricing
Definition
pricing a product at a moderate level and displaying it next to a more expensive model or brand
Term
bundle pricing
Definition
packaging together two or more complementary products and selling them at a single price
Term
multiple-unit pricing
Definition
packaging together two or more identical products and selling them at a single price
Term
everyday low prices (EDLP)
Definition
pricing products low on a consistent basis
Term
odd-even pricing
Definition
ending the price with certain numbers to influence buyers' perceptions of the price or product
Term
customary pricing
Definition
pricing on the basis of tradition
Term
prestige pricing
Definition
setting prices at an artificially high level to convey prestige or a quality image
Term
professional pricing
Definition
fees set by people with great skill or experience in a particular field
Term
price leaders
Definition
a product priced below the usual markup, near cost, or below cost
Term
special-event pricing
Definition
advertised sales or price cutting linked to a holiday, a season, or an event
Term
comparison discounting
Definition
setting a price at a specific level and comparing it with a higher price
Term
distribution
Definition
the decisions and activities that make products available to customers when and where they want to purchase them
Term
supply chain
Definition
all the activities associated with the flow and transformation of products from raw materials through to the end customer
Term
operations management
Definition
the total set of managerial activities used by an organization to transform resource inputs into products
Term
logistics management
Definition
planning, implementing, and controlling the efficient and effective flow and storage of products and information from the point of origin to consumption to meet customers' needs and wants
Term
supply management
Definition
in its broadest form, refers to the processes that enable the progress of value from raw material to final customer and back to redesign and final disposition
Term
supply-chain management
Definition
a set of approaches used to integrate the functions of operations management, logistics management, supply management, and marketing channel management so products are produced and distributed in the right quantities, to the right locations, and a the right time
Term
marketing channel
Definition
a group of individuals and organizations that direct the flow of products from producers to customers within the supply chain
Term
marketing intermediaries
Definition
middlemen that link producers to other intermediaries or ultimate consumers through contractual arrangements or through the purchase and resale of products
Term
industrial distributor
Definition
an independent business organization that takes title to industrial products and carries inventories
Term
dual distribution
Definition
the use of two or more marketing channels to distribute the same products to the same target market
Term
strategic channel alliance
Definition
an agreement whereby the products of one organization are distributed through the marketing channels of another
Term
intensive distribution
Definition
using all available outlets to distribute a product
Term
selective distribution
Definition
using only some available outlets in an area to distribute a product
Term
exclusive distribution
Definition
using a single outlet in a fairly large geographic area to distribute a product
Term
channel captain
Definition
the dominant leader of a marketing channel or a supply channel
Term
channel power
Definition
the ability of one channel member to influence another member's goal achievement
Term
vertical channel integration
Definition
combining two or more stages of the marketing channel under one management
Term
vertical marketing systems (VMSs)
Definition
a marketing channel managed by a single channel member to achieve efficient, low-cost distribution aimed at satisfying target market customers
Term
horizontal channel integration
Definition
combining organizations at the same level of operation under one management
Term
physical distribution
Definition
activities used to move products from producers to consumers and other end users
Term
outsourcing
Definition
the contracting of physical distribution tasks to third parties who do not have managerial authority within the marketing channel
Term
cycle time
Definition
the time needed to complete a process
Term
order processing
Definition
the receipt and transmission of sales order information
Term
electronic data interchange (EDI)
Definition
a computerized means of integrating order processing with production, inventory, accounting, and transportation
Term
inventory management
Definition
developing and maintaining adequate assortments of products to meet customers' needs
Term
just-in-time (JIT)
Definition
an inventory-management approach in which supplies arrive just when needed for production or resale
Term
materials handling
Definition
physical handling of tangible goods, supplies, and resources
Term
warehousing
Definition
the design and operation of facilities for storing and moving goods
Term
private warehouses
Definition
company-operated facilities for storing and shipping products
Term
public warehouses
Definition
storage space and related physical distribution facilities that can be leased by companies
Term
distribution centers
Definition
large, centralized warehouses that focus on moving rather than storing goods
Term
transportation
Definition
the movement of products from where they are made to intermediaries and end users
Term
intermodal transportation
Definition
two or more transportation modes used in combination
Term
freight forwarders
Definition
organizations that consolidate shipments from several firms into efficient lot sizes
Term
megacarriers
Definition
freight transportation firms that provide several modes of shipment
Term
tying agreement
Definition
an agreement in which a supplier furnishes a product to a channel member with the stipulation that the channel member must purchase other products as well
Term
exclusive dealing
Definition
a situation in which a manufacturer forbids an intermediary to carry products of competing manufacturers
Term
retailing
Definition
all transaction sin which the buyer intends to consume the product through personal, family, or household use
Term
retailer
Definition
an organization that purchases products for the purpose of reselling them to ultimate consumers
Term
general-merchandise retailer
Definition
a retail establishment that offers a variety of product lines that are stocked in considerable depth
Term
department stores
Definition
large retail organizations characterized by a wide product mix and organized into separate departments to facilitate marketing efforts and internal management
Term
discount stores
Definition
self-service, general-merchandise stores that offer brand name and private brand products at low prices
Term
convenience store
Definition
a small self-service store that is open long hours and carries a narrow assortment of products, usually convenience items
Term
supermarkets
Definition
large, self-service stores that carry a complete line of food products, along with some non-food products
Term
superstores
Definition
giant retail outlets that carry food and non-food products found in supermarkets, as well as most routinely purchased consumer products
Term
hypermarkets
Definition
stores that combine supermarket and discount store shopping in one location
Term
warehouse clubs
Definition
larger scale, members-only establishments that combine features of cash-and-carry wholesaling with discount retailing
Term
warehouse showrooms
Definition
retail facilities in large, low-cost buildings with large on-premises inventories and minimal services
Term
traditional specialty retailers
Definition
stores that carry a narrow product mix with deep product lines
Term
category killer
Definition
a very large specialty store that concentrates on a major product category and competes on the basis of low prices and product availability
Term
off-price retailers
Definition
stores that buy manufacturers' seconds, overruns, returns, and off-season merchandise for resale to consumers at deep discounts
Term
neighborhood shopping centers
Definition
shopping centers usually consisting of several small convenience and specialty stores
Term
community shopping centers
Definition
shopping centers with one or two department stores, some specialty stores, and convenience stores
Term
regional shopping center
Definition
a type of shopping center with the largest department stores, widest product mixes, and deepest product lines of all shopping centers
Term
superregional shopping center
Definition
a type of shopping center with the widest and deepest product mixes that attracts customers from many miles away
Term
lifestyle shopping center
Definition
a type of shopping center that is typically open air and features upscale specialty, dining, and entertainment stores
Term
power shopping center
Definition
a type of shopping center that combines off-price stores with category killers
Term
retail positioning
Definition
identifying an unserved or underserved market segment and serving it through a strategy that distinguishes the retailer from others in the minds of consumers in that segment
Term
atmospherics
Definition
the physical elements in a store's design that appeal to consumers' emotions and encourage buying
Term
category management
Definition
a retail strategy of managing groups of similar, often substitutable products produced by different manufacturerers
Term
scrambled merchandising
Definition
the addition of unrelated product lines to an existing product mix, particularly fast-moving items that can be sold in volume
Term
wheel of retailing
Definition
a hypothesis holding that new retailers usually enter the market as low-status, low-margin, low-price operators but eventually evolve into high-cost, high-price merchants
Term
direct marketing
Definition
the use of the telephone, internet, and nonpersonal media to introduce products to customers, who can then purchase them via mail, telephone, or the internet
Term
nonstore retailing
Definition
the selling of products outside the confines of a retail facility
Term
catalog marketing
Definition
a type of marketing in which an organization provides a catalog from which customers make selections and place orders by mail, telephone, or the internet
Term
direct-response marketing
Definition
a type of marketing in which a retailer advises a product and makes it available through mail or telephone orders
Term
telemarketing
Definition
the performance of marketing-related activities by telephone
Term
television home shopping
Definition
a form of selling in which products are presented to television viewers, who can but them by calling a toll-free number and paying with a credit card
Term
online retailing
Definition
retailing that makes products available to buyers through computer connections
Term
direct selling
Definition
marketing products to ultimate consumers through face-to-face sales presentations at home or in the workplace
Term
automatic vending
Definition
the use of machines to dispense products
Term
franchising
Definition
an arrangement in which a supplier (franchiser) grants a dealer (franchisee) the right to sell products in exchange for some type of consideration
Term
wholesaling
Definition
transactions in which products are bought for resale, for making other products, or for general business operations
Term
wholesaler
Definition
an individual or organization that sells products that are bought for resale, for making other products, or for general business operations
Term
merchant wholesalers
Definition
independently owned businesses that take title to goods, assume ownership risks, and buy and resell products to other wholesalers, business customers, or retailers
Term
full-service wholesalers
Definition
merchant wholesalers that perform the widest range of wholesaling functions
Term
general-merchandise wholesalers
Definition
full-service wholesalers with a wide product mix but limited depth within product lines
Term
general-line wholesalers
Definition
full-service wholesalers that carry only a few product lines but many products within those lines
Term
specialty-line wholesalers
Definition
full-service wholesalers that carry only a single product line or a few items within a product line
Term
rack jobbers
Definition
full-service, specialty-line wholesalers that own and maintain display racks in stores
Term
limited-service wholesalers
Definition
merchant wholesalers that provide some services and specialize in a few functions
Term
cash-and-carry wholesalers
Definition
limited-service wholesalers whose customers pay cash and furnish transportation
Term
truck wholesalers
Definition
limited-service wholesalers that transport products directly to customers for inspection and selection
Term
drop shippers
Definition
limited-service wholesalers that take title to goods and negotiate sales but never actually take possession of products
Term
mail-order wholesalers
Definition
limited-service wholesalers that sell products through catalogs
Term
agents
Definition
intermediaries that represent either buyers or sellers on a permanent basis
Term
brokers
Definition
intermediaries that bring buyers and sellers together temporarily
Term
manufacturers' agents
Definition
independent intermediaries that represent two or more sellers and usually offers customers complete product lines
Term
selling agents
Definition
intermediaries that market a whole product line or a manufacturer's entire output
Term
commission merchants
Definition
agents that receive goods on consignment from local sellers and negotiate sales in large, central markets
Term
sales branches
Definition
manufacturer-owned intermediaries that sell products and provide support services to the manufacturer's sales force
Term
sales offices
Definition
manufacturer-owned operations that provide services normally associated with agents
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