Term
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Definition
Intangible customer benefits produced by people or machines that cannot be separated from the producer. Service cannot be returned, nor tryed before bought. |
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Term
What is customer service? |
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Definition
Human or mechanical activities firms undertake to help satisfy customer's needs and wants. |
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Term
Why have economies of developed countries become increasingly dependant on services? |
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Definition
1.) it is less expensive for firms to manufacture their products in less developed countries. 2.) household maintenance acivities. which many people performed by themselves in the past, have become quite specialized. 3.) people place a high value on convenience and leisure. |
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Term
What are the four core differences between services and goods? |
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Definition
Inseparable, Variable, Perishable, Intangible. |
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Term
What is meant by the term intangible? |
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Definition
Characteristic of a service that cannot be touched, tasted, or seen like a pure product.can be very difficult for marketers to determine what went wrong.A service cant be shown directly to potential customers, which also make it difficult to promote. |
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Term
service providers rely heavily on what? |
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Definition
on consumer perceptions of their integrity and trustworthiness. |
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Term
What is meant by inseparable? |
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Definition
Characteristic of a service produced and consumed at the same time. service and consumption are inseparable. |
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Term
What have healthcare providers found? |
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Definition
the more control they allow their patients to have in determining the course of treatment, the more satisfied those patients were. |
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Term
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Definition
Characteristic of a service whose quality may vary because it is provided by humans. |
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Term
Why is inferior service a big problem? |
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Definition
it cant be recalled, by the time the firm recognizes a problem, the damage has been done. |
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Term
How can marketers use the variable nature of services to their advantage? |
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Definition
By using a micromarketing strategy, ie: the geek squad. it is expensive to deliver though. Some service providers replace people with machines, which are good for simple transactions like getting cash. |
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Term
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Definition
characteristic of a service that cannot be stored for future use. |
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Term
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Definition
When service fails to meet the expectations that customers have about how it should be delivered. |
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Term
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Definition
Type of service gap; reflects the difference between customers' expectations and firm's perception of those expectations. |
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Term
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Definition
type of service gap; difference between firm's service standards and actual service it provides to the customers. |
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Term
What is a communication gap? |
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Definition
The difference between service provided and service promised by the firm's promotion program. |
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Term
How can a firm reduce the knowledge gap? |
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Definition
They must understand customers expectations, by undertaking customer research and increase the interaction and communication between managers and employees. |
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Term
What are customer expectations based on? |
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Definition
their knowledge and experiences. |
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Term
What are some ways in which expectations might vary? |
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Definition
According to the type of service, or situation. |
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Term
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Definition
customers perceptions of how well a service meets or exceeds their expectations. |
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Term
What are the 5 building blocks of service quality? |
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Definition
1.) reliability- the ability to perform the service dependably and accurately 2.) responsiveness- the willingness to help customers and provide prompt service. 3.) assurance- the knowledge of and courtesy by employees and their ability to convey trust and confidence. Empathy- the caring, individualized attention provided to customers. Tangibles- the appearance of physical facilities, equipment, personnel, and communication materials |
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Term
What is the voice of customer program? |
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Definition
ongoing marketing research system that collects customer inputs and integrates them into managerial decisions. |
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Term
What is the zone of tolerance? |
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Definition
Are between customers expectations of desired service and minimum level of acceptable service; difference between what customers really want and what they will accept before going elsewhere. |
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Term
To define the zone of tolerance, firms ask a serious of questions about each service quality dimensions that relate to: |
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Definition
1.) the desired and expected level of service for each dimension, from low to high. 2.) customers perceptions of how well the focal service performs and how well a competetive service performs, from low to high. 3.) the importance of each service quality dimension. |
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Term
Even if complaints are handled effectively to solve customer's problems... |
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Definition
the essence of the complaint is too often lost on managers. managers who make service quality decisions need to be on the front line and understand the service provided. |
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Term
What does the manager need to do when it comes to setting the service standard? |
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Definition
he needs to set an example of high service standards, which will permeate throughout the organization, and the employees must be thoroughly trained not only to complete their specific tasks but also in how to treat guests. |
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Term
to deliver consistently high quality service, what must firms do? |
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Definition
set specific, measurable goals based on customers expectations. to help ensure that quality, the employees should be involved in the goal setting. |
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Term
service providers take their cues from who? |
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Definition
from management. If managers strive for excellent service, treat their customers well, and demand the same attitudes from everyone in the organization, it is likely employees will do the same. |
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Term
the delivery gap is where ... |
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Definition
the rubber meets the road, where the customer directly interacts with the service provider. |
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Term
How can delivery gaps be reduced? |
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Definition
when employees are empowered to act in the customers' and the firms best interests and supported in their efforts so they can do their jobs effectively. technology can also be employed to reduce delivery gaps. |
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Term
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Definition
in service delivery context, allowing employees to make decisions about service provision to customers. |
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Term
Why is empowerment important and why is it difficult? |
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Definition
empowerment becomes more important when the service is individualized. it is costly. |
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Term
What are the ways in which management needs to support the service provider. |
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Definition
1.) managers and coworkers should provide emotional support to service providers by demonstrating a concern for their well being and standing behind their decisions. 2.) service providers require instrumental support - the systems and equipment- to deliver the service properly. 3.) the support that managers provide must be consitent and coherent throughout the organization. 4.) providing rewards to employees for excellent service. |
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Term
why is technology important in service providing and what are some benefits? |
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Definition
it has become important for facilitating the delivery of services. it enables customers to buy more quickly, more easily and with more information. it gives access to a wider variety of services, a greater degree of control by the customer over the services, and the ability to obtain info. management benefits through the increased efficiency and the competitor advantage over other firms. it changes customer's perceptions. |
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Term
why do firms have difficulty controlling service quality? |
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Definition
it can vary from day to day. but they do have control over how the communicate their service package to their customers. |
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Term
how can the service gap be reduced? |
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Definition
by managing customer expectations. and promising only what you can deliver, or possibly even a little less. customers dont like surprises. |
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Term
what are three ways in which a firm can increase service recovery? |
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Definition
1.) listening the the customers. 2.) resolving problems quickly 3.) providing a fair solution. |
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Term
when it comes to listening to a customer, what should s service provider do? |
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Definition
welcome the opportunity to be that sympathetic ear, listen carefully, and appear anxious to rectify the situation to ensure it doesnt happen again. |
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Term
what is distributive fairness? |
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Definition
customer's perceptions of the benefits received compared with the costs ( inconvenience or loss) resulting from a service failure. |
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Term
what is procedural fairness? |
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Definition
customer's perception of the fairness of the process used to resolve complaints about a service. |
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Term
the longer it takes to resolve a service failure.... |
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Definition
the more irritated the customer will become and the more people he or she is likely to tell about the problem. |
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Term
what do firms need to do to resolve a problem quickly? |
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Definition
firms need clear policies, adequate training for their employees, and empowered employees. |
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Term
what is the crest method, and what does it do? |
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Definition
crest method refers to an acronym that when carefully implemented can help resolve service failures. c: calm the customer by listening and empathizing. r: repeat the problem heard e: use empathy statements ie: i would feel s: solve the problem t: make a timely response. |
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Term
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Definition
Overall sacrifice a consumer is willing to make, money, time, energy to acquire a specific product or service. |
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Term
A great but overpriced product can be judged as low in what? |
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Definition
value, and may not sell as well as an inferior but well priced item. |
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Term
A price set too low may signal what? |
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Definition
low quality, poor performance, or other negative attributes about the product or service. |
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Term
Every other element in the marketing mix might be perfect, but... |
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Definition
if the price isnt right, sales wont occur. |
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Term
Consumers use price to do what? |
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Definition
to judge the quality of a product or service. |
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Term
How should marketers view price? |
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Definition
a strategic opportunity to create value rather than as an afterthought to the rest of the marketing mix. |
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Term
What are the five c's of pricing? |
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Definition
1.) company objectives 2.) customers 3.) costs 4.) competition 5.) channel members |
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Term
What is profit orientation? |
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Definition
Company objective implemented by focusing on target profit pricing, maximizing profits, or target return pricing. Ex comapany wide policy that all products must provide at least an 18 percent profit margin to reach a particular profit goal for the firm. |
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Term
What is target profit pricing? |
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Definition
Strategy implemented by firms with a particular profit goal; uses price to stimulate sales at a certain profit per unit. |
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Term
What is meant by maximizing profits? |
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Definition
An economically based pricing strategy that attempts to identify the price at which a product or service's profits are maximized. |
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Term
What is target return pricing? |
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Definition
strategy implemented by firms interested in the rate of profits relative to investments. designed to produce specific return on investment, usually expressed as percentage of sales. |
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Term
What is sales orientation? |
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Definition
Company objective based on the belief that increasing sales help the firm more than increasing profits. Ex: setting prices very low to generate new sales and take sales away from competitors, even if profits suffer. |
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Term
What is competitor orientation? |
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Definition
Company objective based on the premise that the firm should measure itself primarily against it's competition. ex: to discourage more competitors from entering the market, set prices very low. |
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Term
What is customer oriented? |
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Definition
Orientation that explicilty invoks the concept of customer value and sets prices to match consumer expectations. ex: target a market segment of consumers who highly value a particular product benefit and set prices relatively high ( reffered to as premium pricing) |
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Term
What is competitive parity? |
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Definition
strategy of setting prices similiar to those major competitors. |
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Term
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Definition
competitor based pricing method; firm deliberately prices products above competitors to capture consumers who always shop for the best or for whom price does not matter. |
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Term
What is status quo pricing? |
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Definition
competitor-oriented strategy, firm changes prices only to meet those of competition. |
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Term
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Definition
strategy of selling innovation at a high price that innovators and early adapters will pay to obtain it, then lowering the price to capture or skim the next most price sensitive segment. |
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Term
For price skimming to work... |
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Definition
the product or service must be percieved as breaking new ground in some way, offering consumers new benefits currently unavailable in alternative products. also competitors cannot be able to enter the market easily. a firm must consider the trade off between earning a higher price and suffering higher production costs. |
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Term
What is a market penetration pricing strategy? |
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Definition
pricing strategy that sets low initial price of new product or service to build sales, market share, and profits quickly. |
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Term
what is the experience curve effect? |
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Definition
drop in unit cost as accumulated volume sold increases. |
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Term
What is the most important of the 5 c's of price? |
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Definition
consumers; consumers want value, and price is half of the value of the equation. |
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Term
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Definition
How many units of a product or service consumers demand during a specific period at different prices. |
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Term
What does knowing the demand curve help the firm do? |
|
Definition
enables a firm to examine different prices in terms of the resulting demand and relative to its overall objective. |
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|
Term
What are prestige products or services? |
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Definition
Consumers purchase for status rather than functionality. |
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|
Term
What is the price elasticity of demand? |
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Definition
measures how changes in price affect quantity of product demanded; specifically, ratio of the percentage change in quantity demanded to the percentage change in price. |
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Term
what is the formula for price elasticity of demand. |
|
Definition
% change in quantity demanded / % change in price. |
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Term
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Definition
Market for a product or service that is price sensitive; relatively small change in price generate large changes in quantity demanded. or when the price when price elasticity of demand is less than -1, or a 1 percent decrease in price produces more than a 1 percent increase is sales. |
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Term
What is meant by inelastic? |
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Definition
Market for a product or service that is price insensitive; relatively small changes in price do not generate large changes in the quantity demanded. |
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|
Term
What is the income effect? |
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Definition
change in the quantity of a product demanded by consumers due to a change in their income. |
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|
Term
What is the substitution effect? |
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Definition
consumer's ability to substitute other products for the focal brand and increase price elasticity of demand for the focal brand. |
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|
Term
What is cross price elasticity? |
|
Definition
Percentage change in demand for product A in response to percentage change in product B. |
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Term
What are complimentary products? |
|
Definition
products whose demand curves relate positively, such that they rise or fall together in exact proportion. |
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Term
What are substitute products? |
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Definition
products for which changes in demand relate negatively; a percentage increase in quantity demanded for one means a percentage decrease in quantity demanded for the other. |
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Term
What is a reference price? |
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Definition
price against which buyers compare actual selling price of a product: facilitates evaluation processes. |
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Term
What is an external reference price? |
|
Definition
higher price to which consumers can compare the selling price to evaluate a purchase. |
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Term
What is the internal reference price? |
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Definition
price information stored in the consumer's memory, used to assess a current price offering. |
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Term
What is everyday low pricing? |
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Definition
strategy to emphasize the continuity of retail prices somewhere between the regular, nonsale price and deep discount sales prices. |
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Term
What is cost based pricing? |
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Definition
pricing strategy that involves determining the costs of producing a product and adding a fixed amount to arrive at the selling price. |
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Term
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Definition
costs, primarily labor and materials, that vary with production volume. |
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Term
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Definition
costs that remain essentially at the same level, regardless of changes in the volume production. |
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Term
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Definition
sum of variable and fixed costs. |
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|
Term
What is the break even analysis? |
|
Definition
technique to examine relationships among cost, price, revenue, and profit over different production and sales to determine the break even point. |
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Term
What is the breakeven point? |
|
Definition
the point at which the number of units sold generates enough revenue to equal total costs; at this point, profits are zero. |
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Term
What are the formulas for total variable cost, total cost, and total revenue |
|
Definition
tvc= variable cost x quantity tc= fixed cost + tvc tr= price x q |
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|
Term
what is the formula for the break even point? |
|
Definition
fixed costs/ contribution per unit |
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Term
how would you determine how many units you need to sell to generate a certain level of profit? |
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Definition
( fixed costs + target profit)/ contribution per unit. |
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Term
What is the contribution per unit? |
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Definition
price less variable cost per unit. used to determine the break even point in units. |
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|
Term
What is oligopolistic competition? |
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Definition
when a few firms dominate a market. |
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Term
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Definition
when two or more firms compete primarily by lowering prices. |
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Term
What are some limits to the break even analysis? |
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Definition
1.) it is unlikely that the price is specific for every product. 2.) prices often get reduced as quanitity increases. 3.) break even cant determine how many prodcts will be sold at a given price. |
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Term
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Definition
practice of colluding with other firms to control prices. |
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Term
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Definition
many firms sell closely related but not homogenous products; products may be viewed as but are not perfect substitutes. |
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Term
What are the three types of competition? |
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Definition
monopoly, pure, or oligopoly. |
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Term
What is pure competition? |
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Definition
When different companies sell commodity products that consumers perceive as substitutable; price usually set according to the laws of supply and demand. |
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Term
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Definition
employs irregular but not neccesarily illegal methods; legally circumvents authorized distribution channels to sell goods at prices lower than those inteded by the manufacturer. |
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Term
|
Definition
pattern of buying both premium and low-priced merchandise or patronizing both status- and price oriented retailers. |
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Term
What are two interrelated trends that have merged to impact pricing decisions. |
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Definition
increase in consumer's disposable inome and status consciousness. |
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|
Term
true or false, the economic enviroment at local, regional, national and global levels influence pricing. |
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Definition
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Term
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Definition
consumer pricing tactic to build store traffic by aggressively pricing and advertising regularly purchased items at or just above the store's cost. |
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Term
whats loss leader pricing? |
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Definition
extends leader pricing by lowering the price below the store's cost. |
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Term
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Definition
deceptive practice of attracting customers with a low advertised price ( the bait ) then pressuring them to purchase a higher priced model ( the switch ) |
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Term
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Definition
practice of setting very low prices with the intent to drive competitors out of business; illegal under both the sherman act and the FTC act. |
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Term
what is price discrimination? |
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Definition
practice of selling the same product to different resellers or ultimate consumers at different prices; some forms are illegal. |
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Term
What is a quantity discount? |
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Definition
pricing tactic offering a reduced price based on amount purchased; the more purchased, the higher the discount and the greater the value. |
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Term
What is supply chain management? |
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Definition
Set of approaches and techniques to integrate supply chain members into a seamless value chain to distribute merchandise appropriately and minimize system costs with necessary service levels. |
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Term
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Definition
Firms engaged in buying, taking, storing, and physically handling goods in large quantities, the reselling ( in smaller quantities) to retailers or users. |
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Term
What is the marketing channel? |
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Definition
Institutions that transfer ownership of ad move goods from the point of production to the point of consumption; all institutions and marketing activities in the marketing process. |
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|
Term
What is logistics management? |
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Definition
integration of actvities for planning, implementing, and controlling efficient flow of raw materials, in process inventory, and finished goods from the point of origin to consumption. |
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Term
Are marketing channel management, supply chain management, and logistics management the same or different? |
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Definition
Marketing channel management traditionally has been the responsibility of marketing departments, under the direction of a marketing vice president. Logistics was traditionally the responsibility of operations, under a vice president of operations. Although their goals were similiar, they often saw solutions differently. Supply chain management takes a systemwide approach so it includes both channel management and logistics. |
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|
Term
Why dont people buy directly from the wholesaler? |
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Definition
It would be inconvenient, each member of the supply chain adds values. |
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|
Term
true or false, supply chain management doesnt streamline distribution. |
|
Definition
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|
Term
What is a distribution center? |
|
Definition
facility for the receipt, storage, and redistribution of goods to stores or customers, operated by retailers, manufacturers or distribution specialists. |
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|
Term
What is the universal product code ( UPC )? |
|
Definition
black and white bar code found on most merchandise. |
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|
Term
What are the five interrelated activities that emerge in supply chain management? |
|
Definition
1.) making info flow 2.) making merchandise flow 3.) managing inventory 4.) designing the supply chain 5.) managing the relationships among supply chain partners. |
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|
Term
How does a supply chain work in terms of making information flow? |
|
Definition
Flow 1 ( customer to store ): the sales associate at best buy scans the UPC tag, the customer gets a receipt. Flow 2 ( store to buyer): the point of sale terminal records the purchase information and electronically sends it to the buyer at best buys corporate office. the sales info is incorporated into an inventory management system to aid in planning future purchases and promotions. flow 3 ( store to manufacturer): the purchase information from each best buy store is typically aggregated by the retailer as a whole, which creates an order for new merchandise and sends it to sony. the buyer at best buy may also communicate directly with sony to get info and negative prices, shipping dates, promotional events, or other merchandise related issues. flow 4 ( store to manufacturer) : if the merchandise is recorded frequently, the order process can become automatic and virtually bypass the buyer. flow 5 ( store to distribution center): stores also communicates with the best buy distribution center to coordinate deliveries and check inventory status. |
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|
Term
What is electronic data interchange? |
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Definition
computer to computer exchange of business documents from a retailer to a vendor and back. |
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Term
what is an advanced shipping notice? |
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Definition
electronic document suppliers send to retailers before shipment, detailing what to expect in the shipment. |
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Term
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Definition
secure communication system contained within one company, such as between the firms buyers and distribution centers. |
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|
Term
|
Definition
collaborative network that uses internet technology to link businesses with suppliers, customers, or other businesses. |
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|
Term
what is collaboration, planning, forecasting, and replenishment? |
|
Definition
inventory management system that uses electronic data interchange through which a retailer sends sales info to a manufacturer. |
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|
Term
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Definition
person who coordinates deliveries to distribution centers. |
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Term
What is meant by recieving? |
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Definition
process of recording the receipt of merchandise as it arrives at a distribution center or store. |
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|
Term
|
Definition
process of verifying goods upon receipt to ensure they arrived undamaged and match the merchandise ordered. |
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|
Term
what are the different kinds of merchandise flow in terms of best buy? |
|
Definition
1.) from sony to best buy's distribution centers 2.) from sony directly to stores. 3.) If the merchandise goes through distribution centers, it is then shipped to stores. 4.) and then to the customer. |
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|
Term
What is radio frequency identification? |
|
Definition
tiny computer chips that automatically transmit all the information about a container's contents or induvidual products. |
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|
Term
What is a traditional distribution center? |
|
Definition
warehouse in which merchandise unloaded from trucks is placed on racks or shelves for storage. |
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Term
What is a cross docking distribution center? |
|
Definition
center to which vendors ship merchandise prepackaged and ready for sale; merchandise moves from receiving dock to the shipping dock. |
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Term
What is floor-ready merchandise? |
|
Definition
merchandise ready to be placed on the selling floor immediately. |
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|
Term
what is ticketing and marking? |
|
Definition
creating a price and identification labels and placing them on the merchandise. |
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|
Term
Most modern distribution centers are neither... |
|
Definition
pure warehouse nor pure cross-docking systems but instead combine the two. |
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|
Term
no matter how good a sales forecasting system may be... |
|
Definition
sometimes the merchandise arrives before it is needed in the stores. In these cases, the retailer must have a system to store the merchandise temporarily. |
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|
Term
shipping merchandise to stores is quite complex when... |
|
Definition
it is a multistore chain. |
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|
Term
What is the just in time inventory system? |
|
Definition
Inventory management systems that deliver less merchandise more frequently; the firm gets merchandise just in time to use in manufacture or sale; also known as quick response systems in retailing. |
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|
Term
what is meant by quick response |
|
Definition
retailing inventory management system; merchandise received just in time for sale when the customer wants it. |
|
|
Term
|
Definition
having enough inventory to satisfy customer demands with not having more than they need. |
|
|
Term
|
Definition
amount of time between the recognition that an order needs to be placed and the arrival of the needed merchandise at the seller's store, ready for sale. |
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|
Term
what are two benefits of a JIT system? |
|
Definition
reduced lead time, and increased product availability and lower inventory investment. |
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|
Term
What are some costs of a JIT system? |
|
Definition
the logistics function becomes much more complicated with more frequent deliveries. Require a strong commitment by the firm and its vendors to cooperate, share data, and develop systems like EDI and CPFR. require financial and psychological support. |
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|
Term
what are supply chains composed of? |
|
Definition
various entities that are buying, such as retailers or wholesalers; selling, such as manufacturers or wholesalers; or helping facilitate the exchange, such as transportation companies. |
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|
Term
Each member of the supply chain... |
|
Definition
performs a special role. if one member believes that another isnt doing its job correctly or efficiently, it usually can replace that member. |
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|
Term
when choosing retailers to whom to sell, the manufacturer should consider what? |
|
Definition
where the end customer expects to find the product, as well as some important retailer characeristics. |
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|
Term
a key part of any strategy is to |
|
Definition
determine customer expectations. from a retailers perspective, it is important to know from which manufacturers want to buy. manufacturers in contrast need to know where their target market customers expect to find their products and those of their competitors. |
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|
Term
the larger and more sophisticated the channel member... |
|
Definition
the less likely that it will use supply chain intermediaries. |
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|
Term
What is distribution intensity? |
|
Definition
number of supply chain members used at each level of the supply chain |
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|
Term
what is intensive distribution |
|
Definition
strategy designed to get products into as many outlets as possible. |
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|
Term
what is exclusive geographic territories |
|
Definition
territories granted to select retail customers by a manufacturer in an exclusive distribution strategy; no other customers can sell the brand in these areas. |
|
|
Term
What is selective distribution? |
|
Definition
between intensive and exclusive distribution strategies; uses a few selected customers in a territory. |
|
|
Term
supply chain conflict, what is it? |
|
Definition
when supply chain members are not in agreement about goals, roles, or rewards. |
|
|
Term
what are two outcomes of supply chain conflict? |
|
Definition
either a stronger partnership, or the two firms no longer do business. |
|
|
Term
what are the two non mutually exclusive ways to manage a supply chain? |
|
Definition
coordinate the channel using vertical marketing system or develop strong relationships with supply chain partners. |
|
|
Term
when is supply chain conflict more pronounced? |
|
Definition
when supply chain members are indepedant entities. |
|
|
Term
What is a independant ( conventional) supply chain? |
|
Definition
Loose coalition of independantly owned and operated supply chain members that attempt to satisfy their own objectives and maximize their own profits often at the expense of other members. |
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|
Term
What is vertical marketing system? |
|
Definition
supply chain in which members act as a unified system; three types; administrated, contractual, and corporate. |
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What is administered vertical marketing system? |
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Definition
supply chain without common ownership or contractual relationships; dominant channel member controls the channel relationship. |
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what is contractual vertical marketing system? |
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Definition
independant firms at different levels of the supply chain joined through contracts to obtain economies of scale and coordination and reduce conflict. |
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Definition
Contractual agreement between franchisor and franchisee; franchisee operates a business using a name and format developed and supported by frachisor |
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What is corporate vertical marketing system? |
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Definition
system in which parent company has complete control and dictates supply chain priorities and objectives; parent may own manufacturing and/or retail facilities |
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what does a person do if they want to be a franchisee and what are some benefits? |
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Definition
the franchisee pays a lump sum plus a royalty on all sales in return for the right to operate a business in a specific location. it is a mutual benefit. franchisee wants to work hard and avoids a lot of start up costs, franchisor get royalties. |
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Term
What is a strategic relationship? |
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Definition
committed, long term supply chain relationship; requires mutual trust, open communication, common goals, and credible commitments. |
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Term
What do successful strategic relationships require? |
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Definition
mutual trust, credible commitment, common goals, and open communication. |
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