Term
| Price Floor and price ceiling |
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Definition
• A measure of sensitivity of demand to changes in price.
• Often measured with a demand curve
• The higher the price, the lower the demand.
• But what’s an exception to that?
o Louis Vuitton. If you decrease the price of the clothing line, you decrease the desire and luxury of the brand. |
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Term
| value based pricing vs cost based pricing |
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Definition
-cost based pricing is the cost of production, deliver and a little extra for risk and effort.
-value based pricing is that plus a little extra because of the value customers put on the product. EX Starbucks homie feel. |
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Term
|
Definition
|
|
Term
|
Definition
• A measure of sensitivity of demand to changes in price.
• Often measured with a demand curve
• The higher the price, the lower the demand.
• But what’s an exception to that?
o Louis Vuitton. If you decrease the price of the clothing line, you decrease the desire and luxury of the brand. |
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Term
|
Definition
| Setting a price for products that must be used along with with a main product, such as a blades for a razor and games for video game console. |
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Term
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Definition
| --Temporarily pricing products below the list price, and sometimes even below costs |
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Term
|
Definition
| --In some cases, the company may find it desirable to initiate either a price cut or a price increase. In both cases, it must anticipate possible buyers and competitors reactions. |
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Term
| What is the Price? How is that important? |
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Definition
• Sum of values that consumers exchange for the benefits of having or using the product or service.
o Coca cola.
• What is the price of coke? Depends on the size and who is selling it. Theme parks.
Airlines and Coke cola?
Jet blue value proposition jet blue watching television |
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Term
|
Definition
• Competitors
o Influence your pricing. Might have a serious impact or might not.
• Ceiling and floor
o Fixed: Stay same regardless or volume – overhead – office bills.
o Variable: change with volume – material and labor for shirt mfg – diff if 50 or 5,000
o Total; the sum of fixed and variable costs |
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Term
| Why would Walmart sell a spider man dvd for 2.99 during the holiday season? |
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Definition
| • Because they know it will bring customers in and they will buy more things |
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Term
|
Definition
• Survival
o How the company will survive among competitors.
• Profit maximization
• Market Share
• Leadership
• Customer retention
o American Express.
• Market production |
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Term
|
Definition
• Based on buyers perceptions of value, not sellers cost.
o Examples
• Dunkin Donuts.
• Two types:
Good Value: Quality and service at a good price (think good enough.)
Value added Pricing: Attaching value-added features and services to differentiate and charge higher prices.
• Panera looks for the way to add more value.
o Panera you might be paying a little more but paying for the experience. |
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Term
|
Definition
| • Cost-based pricing is the opposite: Costs of producing, selling distributing product plus a little bit for effort and risk. |
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Term
| New Product Pricing Strategies |
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Definition
• Market-Skimming
o High initial prices, skim off the top.
o Super high-end technology.
o Hdtv
• Market-penetration
o Low price gets you in quickly with many customers.
o The price floor. |
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Term
| Products Mix Pricing Strategies. |
|
Definition
Products Line Pricing.
• Established steps between products in a lone when appropriate (e.g. men’s suits.)
• Optional product pricing.
o Selling accessories along with the core- think cars and the add on you can get AC leather seats.
• Captive-Product Pricing
o For products that must be used along with something else (e.g. printer cartridges, replacements razor cartridges.)
o Gillette on your 18th birthday, getting a razor. |
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Term
| Product Mix Pricing Strategies 2. |
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Definition
• By-Product Pricing.
o Getting rid of what you don’t need profitability to bring down cost of core products. (e.g. Crasins)
o Product Bundle Pricing
• Sell several products together. |
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Term
| What retailers do create and deliver Value? |
|
Definition
Pricing
Selection
Product Knowledge
Experience/ environment
Need anticipation. |
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Term
| What are the Types of retailors. |
|
Definition
• Specialty
• Department store
• Discount stores
• Off-price retailors
• Superstores (hybrid and category killers)
o Costco (whole sale and retail)
o BestBuy is category killer. Only going to focus on technology.
• Grocery stores.
• Convince stores.
Best buy is not considered a specialty store because it is too big. |
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Term
|
Definition
adjusting pricing continually to meet the characteristics and needs of individual customers and situations.
Ex. internet companies, hotel, airline can adjust their prices to fit customers needs.
Dynamic pricing is legal along as they do not decimate against age, sex, location or other similar characteristics. |
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Term
|
Definition
|
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Term
|
Definition
|
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Term
|
Definition
| --the amount of money charged for a product or a service, or sum of the values that customers exchange for the benefits of having a using a product or service. |
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|
Term
| Price Floor and price ceiling |
|
Definition
• A measure of sensitivity of demand to changes in price.
• Often measured with a demand curve
• The higher the price, the lower the demand.
• But what’s an exception to that?
o Louis Vuitton. If you decrease the price of the clothing line, you decrease the desire and luxury of the brand. |
|
|
Term
| value based pricing vs cost based pricing |
|
Definition
-cost based pricing is the cost of production, deliver and a little extra for risk and effort.
-value based pricing is that plus a little extra because of the value customers put on the product. EX Starbucks homie feel. |
|
|
Term
|
Definition
|
|
Term
|
Definition
• A measure of sensitivity of demand to changes in price.
• Often measured with a demand curve
• The higher the price, the lower the demand.
• But what’s an exception to that?
o Louis Vuitton. If you decrease the price of the clothing line, you decrease the desire and luxury of the brand. |
|
|
Term
|
Definition
|
|
Term
|
Definition
Setting a high price for a new product to skim maximum revenues layer by layer from the segments willing to pay the high price; the company makes fewer but more profitable sales.
--Apple releasing the first iPhone.
--it only makes sense to do this under certain conditions: the products quality and image must be supported by its high price.
--Second the costs of producing a small volume cannot be so high that they cancel the advantage of charging more.
--Competitors should not be able to enter the market easily and undercut the high price. |
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Term
|
Definition
--Setting a low price for a new product in oder to attract a large number of buyers and a large market share.
--When IKEA opened its doors in 2002 in China, they let the customers lounge around and slashed prices up to 70 percent. IKEA now captures 43% of the market share. |
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Term
|
Definition
| is what is made after producing the product. a company will try and sell the by product. |
|
|
Term
|
Definition
| --Temporarily pricing products below the list price, and sometimes even below costs |
|
|
Term
|
Definition
| --In some cases, the company may find it desirable to initiate either a price cut or a price increase. In both cases, it must anticipate possible buyers and competitors reactions. |
|
|
Term
| What is the Price? How is that important? |
|
Definition
• Sum of values that consumers exchange for the benefits of having or using the product or service.
o Coca cola.
• What is the price of coke? Depends on the size and who is selling it. Theme parks.
Airlines and Coke cola?
Jet blue value proposition jet blue watching television |
|
|
Term
|
Definition
• Competitors
o Influence your pricing. Might have a serious impact or might not.
• Ceiling and floor
o Fixed: Stay same regardless or volume – overhead – office bills.
o Variable: change with volume – material and labor for shirt mfg – diff if 50 or 5,000
o Total; the sum of fixed and variable costs |
|
|
Term
| Why would Walmart sell a spider man dvd for 2.99 during the holiday season? |
|
Definition
| • Because they know it will bring customers in and they will buy more things |
|
|
Term
|
Definition
• Survival
o How the company will survive among competitors.
• Profit maximization
• Market Share
• Leadership
• Customer retention
o American Express.
• Market production |
|
|
Term
|
Definition
• Based on buyers perceptions of value, not sellers cost.
o Examples
• Dunkin Donuts.
• Two types:
Good Value: Quality and service at a good price (think good enough.)
Value added Pricing: Attaching value-added features and services to differentiate and charge higher prices.
• Panera looks for the way to add more value.
o Panera you might be paying a little more but paying for the experience. |
|
|
Term
|
Definition
| • Cost-based pricing is the opposite: Costs of producing, selling distributing product plus a little bit for effort and risk. |
|
|
Term
| New Product Pricing Strategies |
|
Definition
• Market-Skimming
o High initial prices, skim off the top.
o Super high-end technology.
o Hdtv
• Market-penetration
o Low price gets you in quickly with many customers.
o The price floor. |
|
|
Term
| Products Mix Pricing Strategies. |
|
Definition
Products Line Pricing.
• Established steps between products in a lone when appropriate (e.g. men’s suits.)
• Optional product pricing.
o Selling accessories along with the core- think cars and the add on you can get AC leather seats.
• Captive-Product Pricing
o For products that must be used along with something else (e.g. printer cartridges, replacements razor cartridges.)
o Gillette on your 18th birthday, getting a razor. |
|
|
Term
| Product Mix Pricing Strategies 2. |
|
Definition
• By-Product Pricing.
o Getting rid of what you don’t need profitability to bring down cost of core products. (e.g. Crasins)
o Product Bundle Pricing
• Sell several products together. |
|
|
Term
| What retailers do create and deliver Value? |
|
Definition
Pricing
Selection
Product Knowledge
Experience/ environment
Need anticipation. |
|
|
Term
| What are the Types of retailors. |
|
Definition
• Specialty
• Department store
• Discount stores
• Off-price retailors
• Superstores (hybrid and category killers)
o Costco (whole sale and retail)
o BestBuy is category killer. Only going to focus on technology.
• Grocery stores.
• Convince stores.
Best buy is not considered a specialty store because it is too big. |
|
|
Term
|
Definition
adjusting pricing continually to meet the characteristics and needs of individual customers and situations.
Ex. internet companies, hotel, airline can adjust their prices to fit customers needs.
Dynamic pricing is legal along as they do not decimate against age, sex, location or other similar characteristics. |
|
|
Term
| What retailers do create and deliver Value? |
|
Definition
Pricing
Selection
Product Knowledge
Experience/ environment
Need anticipation. |
|
|
Term
|
Definition
--inviting broad communities of people--customers, employees, independent scientists and researchers, and even the public at large--into the new product innovation process.
--EX: Dunkin Donuts asking people on Facebook whether or not they should make a turkey flavored donut. |
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Term
|
Definition
| A detailed version of the new product idea stated in meaningful consumer terms. |
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Term
|
Definition
| testing new-products with a group of target consumers to find out if the concepts have strong consumer appeal. |
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Term
|
Definition
The Stage of a new-product development in which the product and its proposed marketing program are tested in realistic market settings.
--this stage the product is offered to realistic market settings without great expense of a full introduction. |
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Term
|
Definition
| the course of a product’s ales and profits over its lifetime. |
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Term
| Product lifecycle (Stages) |
|
Definition
1. Product development--begins when the company finds and develops a new product. During product development, sales are zero, and the company’s investment costs mount.
2. Introduction-- is a period of slow sales growth as the product is introduced in the market. Profits are nonexistent in this stage because of the heavy expenses of the product introduction.
3. Growth--is a period of rapid market acceptance and increasing profits.
4. Maturity--is a period of slowdown in sales growth because the product has achieved acceptance by most potential buyers. Profits levels off or decline because of increased marketing outlays to defend the product against competition.
5. Decline--is the period when sales fall off and profits drop. |
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Term
| Stages of New Product Development |
|
Definition
• Marketing strategy development
o Take what you learn; build plan describing target market, value prop, sales, share, and profit goals.
• Business analysis (financial plan.)
o Review of sales, cost, and profit projections for a new product to find out whether these factors satisfy that company’s objectives.
• Product development (of feasible)
o Development the product concept
• New balance shoes, giving the customer new shoes and hearing their complaints.
• Testing Market (not with a select group, but to the general market)
o Stages in which the product and the proposed marketing program are tested in realistic settings.
• Commercialization
o Introducing a new product into the marketplace
o Then raise awareness and popularize
o Timing, cost management, and location important |
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Term
| Stages of Product development (Simplified) |
|
Definition
--idea generation
--idea screening
--Concepts development and testing
--Marketing Strategy Development
--Business Analysis
--Product Development
--Test market
--Commercialization |
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|
Term
|
Definition
• Specialty
• Department store
• Discount stores
• Off-price retailors
• Superstores (hybrid and category killers)
o Costco (whole sale and retail)
o BestBuy is category killer. Only going to focus on technology.
• Grocery stores.
• Convince stores.
--best buy is not considered a speciality store because its too big. |
|
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Term
|
Definition
• Franchiser (business owner) gives franchise (store owner) the rights to run (own and operated) one or more stores in a retail chain.
o Popular with fast foo chains restaurants and health clubs
o Franchise must adhere to strict norms or can lose their business. |
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Term
| Why are barcodes so important? |
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Definition
| it is an encyclopedia of the products. |
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Term
| What is the difference between push and pull retailer? |
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Definition
| The primary difference between push and pull lies in how consumers are approached |
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Term
|
Definition
| In push marketing, the idea is to promote products by pushing them onto people. For push marketing, consider sales displays at your grocery store. |
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Term
|
Definition
| On the other hand, in pull marketing, the idea is to establish a loyal following and draw consumers to the products. Examples are Porsche and Lamborghini, which no longer need to advertise, as consumers come to them. |
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Term
|
Definition
| A measure of the sensitivity of demand to changes in price. |
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Term
| What are the pros of Out sourcing? |
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Definition
• Reduced operations costs
• Time zone factors and holidays.
• Distance relationship—easier to find and replace
• Cheaper costs of goods.
• Focus on other things in the company. |
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Term
| What are the cons of out sourcing? |
|
Definition
• Having to move some people to other countries.
• Language and cultural barriers.
• Consistently looking for a cheaper price.
• Customer bias.
• It is a lot harder to manage.
Other counties do not have the same safety regulations. |
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Term
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Definition
Managing upstream and downstream value-added flow of materials, final goods, and related information among suppliers, the company, resellers, and final consumers.
--maximizing profits
--Minimizing costs |
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Term
|
Definition
Disagreements among marketing channel members on goals, roles, and rewards--who should do what and for what rewards.
--Horizontal conflict--occurs at the firm at the same level of the channel. Ex. Ford dealers in Chicago might complain that other ford deals are stealing their business because other retailers are selling too low or advertising outside of their area.
Vertical Conflicts--between different levels of the same channel is even more common. KFC and its franchises came into conflict on emphasizing grilled chicken and sandwiches over the traditional fried chicken. |
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Term
|
Definition
--The cutting out of marketing channel intermediaries by producing or service producers the displacement of traditional resellers by radical new types of intermediaries.
--Ex. Jet Blue and SouthWest sell directly to the final buyer, cutting travel agents from their marketing channels all together. iTunes and Amazon selling directly to the buyer. |
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Term
| third-party logistics (3PL) |
|
Definition
An independent logistics provider that performs any or all of the functions required to get a client’s product to market.
--EX UPS Business.
--outsourcing logistics providers can help maintain |
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Term
|
Definition
A network composed of the company, suppliers, distributers, and, ultimately, customers who partner with each other to improve the performance of the entire system in delivering customer value.
--Ex honda manages a huge network of people within Honda plus thousands of suppliers and dealers outside the company who work together effectively to give final customers an innovative car “from Honda. For Everyone." |
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Term
| The Supply chain consists of... |
|
Definition
upstream and downstream partners.
--• Basically made up of the value-delivery network.
o Company, suppliers, distributors, and costumers who partner to better the system.
• Nike ID, you customers are collaborating with you on the supply chain |
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Term
| What is the Upstream in the supply chain? |
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Definition
| is the set of firms that supply of raw materials, components parts, information, finances, and expertise needed to create a product or a service. |
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Term
| What is the Downstream in the supply chain? |
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Definition
--the marketing channels (or distribution channels0 that look toward the customer.
--Downstream marketing channels partners, such as wholesalers and retailers, from vital link between the firm and customers. |
|
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Term
|
Definition
| is financial capital provided to early-stage, high-potential, growth startup companies. |
|
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Term
|
Definition
--is the process of moving goods from their typical final destination for the purpose of capturing value, or proper disposal.
--Remanufacturing and refurbishing activities also may be included in the definition of reverse logistics. If a customers is unhappy with a product, the company will send the product back through the supply chain in reverse to find out what the issue is. Reverse logistics is important because it helps a company find which part of the supply chain is weak.
EX: HP Ink Cartridges. |
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Term
| The process behind new product development. |
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Definition
1. Idea generation (brainstorm)
--internal and external crowd sourcing.
2. Idea screening (select and refine)
--keep the good and drop the bad.
3. Concept development and testing.
--put the idea into consumer terms and see how it appeals.
4. Concept Testing.
--test with customers
Example: Starbucks asking employees and customers. |
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Term
| What is supply chain management? If it all goes well, what does an effective supply chain do or accomplish? |
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Definition
| Supply chain management is managing the upstream and downstream value-added flow of materials, final goods, and related info among suppliers, the company, resellers, and final consumers. If all goes well, the goal of maximizing profits and minimizing costs is reached. Managers want to make sure all the departments of the company are working together and in a timely order. |
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Term
| What is the supply chain? |
|
Definition
| The supply chain encompasses all of the activities associated with moving goods from raw materials to the final product, and back if needed. |
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Term
| What are the functions of the supply chain? |
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Definition
| Transportation, warehousing, inventory management, purchasing, order processing, and order fulfillment. |
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Term
| What is the marketing channel? |
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Definition
| The marketing channel is how you make your product or service available for use or consumption by the consumer. |
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Term
|
Definition
Fixed: Stays the same regardless of volume (light example, turning on the lights for a smaller class)
Variable: Changes with volume (example, material and labor cost to make shirt)
Total: The sum of fixed and variable costs |
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Term
| Two types of value based pricing |
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Definition
1. Good value: Quality and service at a good price (example, Dunkin Donuts is good enough)
2. Value added pricing: Attaching value-added features and services to differentiate and charge higher prices (example, airlines with more features or Panera you pick 2) |
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