Term
| Value Based Pricing Strategy |
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Definition
Uses buyers perception of value, not the sellers cost, as the main key to pricing.
Company assesses customer needs and their value perceptions. Then set target price based on that value, and use that to drive decisions about cost and production. |
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Term
| EDLP VS. High-Low Pricing |
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Definition
| Everyday low pricing: charging a constant, everyday low price, with few or no temporary discounts. Compared to High-low strategy of charging higher prices, and having frequent discounts. |
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Term
| Value Added Pricing and Pricing Power |
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Definition
Attatching value added features and services to differentiate a market offering and to support higher prices, rather than cutting prices to match competitors.
Helps gain pricing power: power to escape pricing competition and justify your higher prices |
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Term
| Cost Based Pricing vs. Cost plus pricing |
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Definition
Setting prices based on the cost for producing, distributing, and selling the product, plus a fair ate of return for effort and risk.
Cost plus is adding a standard markup to products |
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Term
| Break Even Pricing/Target Pricing |
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Definition
| Setting price to break even on the cost of making and marketing the product, or target pricing, setting price to make a target profit |
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Term
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Definition
How responsive demand will be to a change in price
-If demand hardly changed with a change in price it is inelastic
-If Demand changes greatly with a change in price it is elastic |
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Term
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Definition
| setting the price steps between products in a product line based on cost differences and customer perception of value |
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Term
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Definition
| The pricing of optional or accessory products along with the main product |
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Term
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Definition
Setting a price for a product that must be used along with a main product
-Printers/ink, razors/blades |
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Term
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Definition
| Setting a price for by products in order to make the main products price more competitive. |
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Term
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Definition
| Combining several products and offering the bundle at a reduced price. |
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Term
| Price Adjustment Strategies |
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Definition
-Discount/Allowance pricing: Reducing prices to reward customer response such as paying early or promoting the product
-Segmented Pricing: Adjusting prices to allow for differences in customers, products, or locations
-Psychological Pricing: A pricing approach that considers the psychology of prices and not simply the economics; the price is used to say something about the product
-Promotional Pricing: Temporarily pricing items below the list price and sometimes below cost to increase short run sales
Geographic Pricing: Setting Price based on the customers geographic location
Dynamic Pricing: Adjusting prices continually to meet the characteristics and needs of individual customers and situations.
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Term
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Definition
| Network of company suppliers, distributors and ultimately customers who partner with each other to improve the performance of the entire system in delivering customer value. |
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Term
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Definition
| A layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer |
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Term
| Direct V. Indirect marketing channels |
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Definition
Direct: No intermediary levels, company sells directly to consumers (Mary Kay door to door)
Indirect: Channel contains one or more intermediary level (wholesalers, retailers, distributors, sales branch, etc.) |
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Term
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Definition
Disagreement among marketing channel members on goals and roles-who should do what, and for what rewards
Horizontal: Among members of the same level (ford dealers getting in fight)
Vertical: between different levels of same channel (ford dealer and ford manufacturer) |
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Term
| Conventional Distribution channel VS. Vertical Marketing System |
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Definition
Conventional: Channel consisting of one or more independent producers, wholesalers, and retailers, each a separate business seeking to maximize its own profits, even at the expense of profits for the system as a whole
Vertical Marketing System: A distribution channel structure in which producers, wholesalers, and retailers act as a unified system. One channel member owns the others, has contracts with them, or has so much power that they all cooperate. Corporate VMS is achieved by integrating stages of channel under single ownership. Contract would be independent firms, but joined through contracts, and Administered VMS leadership is assumed by size and power of one or few channel members |
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Term
| Multi Channel distribution center |
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Definition
| Different distribution channels for different market segments. |
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Term
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Definition
| The cutting out of marketing channel intermediaries by product or service producers, or the displacement of traditional resellers by radical new types of intermediaries. |
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Term
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Definition
| Designing effective marketing channels by analyzing consumer needs, setting channel objectives, identifying major channel alternatives, and evaluating them |
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Term
| Intensive/Exclusive/Selective Distribution |
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Definition
Intensive: Stocking the products in as many outlets as possible
Exclusive Distribution: Giving limited number of dealers the exlusive right to distribute the companies products in their territories
Selective: The use of more than one, but fewer than all, of the intermediaries who are willing to carry the companies products. |
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Term
| Marketing Logistics AKA Physical Distribution |
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Definition
| Planning, implementing, and controlling the physical flow, of materials, final goods, and related information among suppliers, the company, resellers, and final consumers |
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Term
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Definition
| Warehousing, Inventory Management (amount to keep in stock), transportation (affects pricing, delivery performance, and condition of goods when they arrive), and Logistics Information Management |
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Term
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Definition
| In exchange for real time data on sales and inventory level, suppliers take care of replenishing and maintaining correct distributor inventory |
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Term
| Promotion Mix AKA Marketing Communications mix |
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Definition
| Specific blend of advertising (paid form of nonpersonal presentation and promotion of goods), public relations (Building good relations with companies various publics), personal selling (personal presentation by the firms sales force for the purpose of making sales), sales promotion (Short term incentives to encourage purchases), and direct marketing tools (Direct relations with carefully targeted consumers) that the company uses to persuasively communicate customer value and build customer relationships |
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Term
| Integrated Marketing Communications |
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Definition
| Carefully integrated and coordinating the company's many communication channels to deliver a clear, consistent, and compelling message about the organization and its products |
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Term
| push VS. Pull promotion mix strategies |
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Definition
Push: Calls for using the sales force and trade promotions to push the product through the channels. The producer promotes the product to channel members to induce them to carry the product and to promote it to final consumers
Pull: Calls for spending a lot on advertising and consumer promotion to induce final consumers to buy the product. IF effective, consumers demand it from channel members, who then demand it from suppliers |
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Term
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Definition
| A specific communication task to be accomplished with a specific target audience during a specific period of time. Could inform, persuade/compare, or remind. |
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Term
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Definition
Affordable Method: Setting the promotion budget at the level management thinks the company can afford.
Percentage Of Sales Method: Setting budget at percentage of current or forecasted sales, or of units sale price
Competitive Parity Method: Setting budget to match competitors outlays
Objective-and-Task Method: Setting promo budget by defining objectives, determining tasks needed to reach those objectives, estimating costs of performing those tasks. |
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Term
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Definition
| Strategy by which the company accomplishes its advertising objectives. 2 major elements are creating advertising message, and selecting advertising media. |
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Term
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Definition
| Term that has come to represent the merging of advertisement and entertainment in an effort to break through the clutter and create new avenues for reaching consumers with more engaging messages. |
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Term
| 3 characteristics of an advertising appeal |
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Definition
Meaningful: Pointing out products that make the product beneficial
Beleivable
Distinctive |
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Term
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Definition
The approach/style/tone/words used for executing an advertising message
"Slice of Life" Typical people using the product
"Lifestyle" How product fits with a particular lifestyle
"Fantasy" Creates a fantasy around product or its use
"Mood/Image" Builds a mood or image around the product
"Musical" singing about product
"Personality Symbol" Mr. Clean, tony the Tiger, GEICO Gecko etc.
"Technical Expertise" Shows companies expertise in making the product
"Scientific Evidence" survey or scientific evidence
"Testimonial or endorsement"
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Term
| Selecting Advertising Media |
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Definition
Deciding on Reach (percentage of people within target market that are reached), Frequency (how often they are reached) and impact (the qualitative value of the message they are exposed to)
Choosing media type
Vehicles within that media type (what show, what station, etc)
Timing |
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Term
| Functions Public relations departments can perform |
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Definition
Press Relations or press agency: Creating placeworthy, newsworthy info in the news media
Product Publicity: publicizing specific products
Public Affairs: Building/Maintaining national or local community relations
Lobbying: Building/Maintaining relations with legislators to influence regulation
Investor Relations: Maintaining relationships with shareholders and financial community
Development: PR with donors or memebrs of a non profit Org. to gain financial or volunteer support
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Term
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Definition
Territorial
Product: Salespeople specialize in selling only a certain portion of lines or items
Customer: Salespeople specialize in only selling to certain customers.
Complex: Combining several types of structures
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Term
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Definition
Samples
Coupons
Cash Refunds
Price Packs (Price reduced on item packaging)
Premiums (other goods offered free or low cost as incentive to buy products i.e. cereal toys)
Advertising Specialties (Useful articles with logos and info given to customers)
Point of Purchase Promotions
Contests/Sweepstakes/Games |
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Term
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Definition
| Sales promos used to persuade resellers to carry a brand/give it better shelf space/promote in ads/push to consumers |
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