Marketing Essentials
Chapters 8, 9, 11, 12 in Kotler and Armstrong's Marketing an Introduction
Terms
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- Commercialization
- Introducing a new product into the market
- Category Killer
- giant specialty store that carries a very deep assortment of a particular line and is staffed by knowledgable employees
- Modifying the product
- changing certain characteristics such as quality, or style to attract new users and inspire more usage
- Concept Testing
- testing new concepts with a group of target consumers to find out if the conceptshave strong consumer appeal
- Value-Added Pricing
- Attaching value added features and services to differntiate a marketing offer and support higher prices rather than cutting prices to match competitors
- Total Costs
- the sum of the fixed and variable costs for ay given level of production
- Break Even Pricing (Target Profit Pricing)
- Setting price to break even on the costs of making and marketing a productor setting price to make a target profit
- Specialty Store
- a retail store that carries a narrow product line with a deep assortment within that line
- Supermarket
- large low cost, low margin, high volume, self service, store that carries a wide variety of food, laundry, and household products
- Cost Based Pricing
- product driven
- Promotional Pricing
- Temporarily pricing products below the list price, and sometimes even below cost, to increase short-run sales
- Convenience Store
- a small store located near a residential area that is open long hours seven days a week and carries a limited line of high-turnover items
- Test Marketing
- the stage in new product development in which the product and marketing program are tested in more realistic marketing settings
- Wheel of Reatiling Concept
- a concept of retailing stating that new types of retailers usually begin as low margin, low price, low status operations but later evolve into higherpriced, higher service operations, eventually becoming like the conventional retailers they replaced
- New Product Development
- development of new products, product improvements, modifications, and new brands through the firm's own R&D efforts.
- Decline Stage
- the PLC stage in which a products sales decline
- Superstore
- a store much larger than a regular supermarket that carries a large assortment of routinely purchased food products, non-food items, and service
- Chain Stores
- two ar more outlets that are owned and controlled in common, have central buying and merchandising, and sell similar lines of merchandise
- Cost-Plus Pricing
- (simplest pricing method) adding a standard markup to the cost of the product
- External Idea sources
- finding ideas outside the company ex) customer ideas
- Retailing
- all activities involved in selling goods or services directly to final consumers for personal use
- Style
- a basic and distinctive mode of expression
- Internal Idea Sources
- Finding ideas within ones own company
- Maturity Stage
- the PLC stage when sales growth slows or levels off
- Fads
- a fashion that enters quickly, is adopted with great zeal, peaks early, and declines very quickly
- Department Store
- a retail organization that carries a wide variety of product lines ; each department has seperate buyers and merchandisers
- Optional-Product Pricing
- offering to sell optional or accessory products along with their main product
- Value Based Pricing
- Setting price based on buyers perceptions of value, not the sellers cost
- Segmented Pricing
- Seling a product or service at two or more prices where the difference in prices is not based in differences in cost
- Discount
- a staright reduction in price on purchases during a stated period of time
- Modifying the Marketing Mix
- improving sales by changing one or more marketing mix elements (prices, better advertising, aggressive sales promos)
- Introduction Stage
- the PLC stage in which the new product is first distributed and made available for purchase
- Fixed Costs
- costs that do not vary with production or sales level (overhead)
- Idea Screening
- screening of new product ideas in order to get rid of bad ideas quickly
- Retailer
- businesses whose sales come primarily from retailing
- Captive Product Pricing
- Setting a price for products that must be used along with a main product such as razor blades or film
- Geographical Pricing
- Seting price based on the buyers location
- Product Bundle Pricing
- combining several products and offering the bundle at a reduced price
- Product Concept
- a detailed version of the product idea stated in meaningful consumer terms
- Typical Product Life Cycle
- 1. Product Development, 2. Introduction, 3. Growth, 4. Maturity, and 5. Decline
- Target Costing
- Pricing that starts with an ideal selling price, then targets costs that will ensure that the price is met
- Variable Costs
- costs that vary directly with the level of production
- Idea generation
- systematic search for new products
- Off-Price Retailer
- a retailer that buys at less than regular wholesale prices and sells at less than retail. (factory outlets, independents, and warehouse clubs)
- By-Product Pricing
- setting a price for by-products in order to make the main product's price more competitive
- Allowance
- promotional money paid by manufacturersto retailers in return for an agreement to feature the manufacturers products
- Reference Prices
- Prices tha buyers carry in their minds and refer to when they look at a given product
- Modifying the market
- when a company tries to increase the consumption of the current product
- Marketing Strategy Development
- designing an initial marketing strategy for a new product based on the product concept
- Discount Store
- store selling standard merchandise at lower prices by accepting lower margins and selling at higher volume
- Product Line Pricing
- setting the price steps between various products in a product line based on cost differences between the products, customer evaluations, and competitor prices
- Good Value Pricing
- Offerring just the right combination of quality and good service at a fair price (EDLP or everyday low pricing)
- Market skimming pricing
- 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
- Fashion
- A currently accepted or popular style in a given field
- Psychological Pricing
- a pricing approach that considersthe psychology of prices and not simply the economics
- Factory Outlet
- off price retailing oeration that is owned and operated byb a manufaturer and that normally carries the manufacturers surplus, discontinued, or irregular goods
- Business Analysis
- a review of the sales, costs and profit projections for a new product to find out whether these factors satisfy the company's objectives
- Price
- the amount of money charged for a product or service, or the sum of all the values that customers give up in order to gain the benefits of having or using a product service
- Growth Stage
- the PLC stage in which a products sales start climbing quickly
- Market Penetration Pricing
- Setting a low price for a new product in order to attract a large number of buyers and a large market share
- Dynamic Pricing
- Adjusting prices continually to meet the chaacteristics and needs of individual customers nd situations
- Demand Curve
- A curve that shows the number of units the market will buy in a given time period, at different prices that might be charged.
- Price Elasticity
- A measure of the sensitivity of demand to changes in price
- PLC
- Product Life Cycle