New User Special Price Expires in

Let's log you in.

Sign in with Facebook


Don't have a StudySoup account? Create one here!


Create a StudySoup account

Be part of our community, it's free to join!

Sign up with Facebook


Create your account
By creating an account you agree to StudySoup's terms and conditions and privacy policy

Already have a StudySoup account? Login here

Chapter 11 - 15

by: Pass

Chapter 11 - 15 MARK 3336

Introduction to Marketing
Michael Ahearne

Almost Ready


These notes were just uploaded, and will be ready to view shortly.

Purchase these notes here, or revisit this page.

Either way, we'll remind you when they're ready :)

Preview These Notes for FREE

Get a free preview of these Notes, just enter your email below.

Unlock Preview
Unlock Preview

Preview these materials now for free

Why put in your email? Get access to more of this material and other relevant free materials for your school

View Preview

About this Document

Exam 3 Review Chapter 11-15
Introduction to Marketing
Michael Ahearne
Study Guide
50 ?




Popular in Introduction to Marketing

Popular in Marketing

This 11 page Study Guide was uploaded by Pass on Thursday October 29, 2015. The Study Guide belongs to MARK 3336 at University of Houston taught by Michael Ahearne in Fall 2015. Since its upload, it has received 31 views. For similar materials see Introduction to Marketing in Marketing at University of Houston.

Similar to MARK 3336 at UH

Popular in Marketing


Reviews for Chapter 11 - 15


Report this Material


What is Karma?


Karma is the currency of StudySoup.

You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!

Date Created: 10/29/15
MARK Exam 3 Chapter 11 Pricing Strategies Additional Considerations New Product Pricing Strategies 0 Marketskimming pricing strategy sets high initial prices to skim revenue layers from the market I Product quality and image must support the price I Buyers must want the product at the price Marketpenetration pricing involves setting a low price for a new product in order to attract a large number of buyers and a large market share Product Mix Pricing Strategies Product line pricing Optional product pricing Captive product pricing Byproduct pricing Product bundle pricing 0 0 Product line pricing takes into account the cost differences between products in the line customer evaluations of their features and competitors prices Optional product pricing takes into account optional or accessory products along with the main product Captive product pricing sets prices of products that must be used along with the main product Byproduct pricing sets a price for byproducts in order to make the main product s price more competitive Product bundle pricing combines several products at a reduced price Price Adiustment Strategies Discount and allowance Segmented Psychological Promotional Geographic Dynamic International pricing 0 Discount and allowance pricing reduces prices to reward customer responses such as making volume purchases paying early or promoting the product Psychological pricing considers the psychology of prices and not simply the economics the price is used to say something about the product Reference prices are prices that buyers carry in their minds and refer to when they look at a given product Promotional pricing is temporarily pricing products below the list price and sometimes even below cost to increase shortrun sales Dynamic pricing involves adjusting prices continually to meet the characteristics and needs of individual customers and situations International pricing sets prices in a specific country based on many factors I Economic conditions Competitive situations Laws and regulations Wholesaling and retail system 0 Price Changes 0 Initiating Pricing Changes I Price cuts occur due to Excess capacity and Increased market share I Price increases occur due to Cost in ation Increased demand amp Lack of supply 0 Buyer Reactions to Pricing Changes I Price cuts New models will be available Models are not selling well Quality Issues I Price increases Product is hot Company greed 0 Competitor Reactions to Pricing Changes I Why did the competitor change the price I Is the price cut permanent or temporary I Is the company trying to grab market share I Is the company doing poorly and trying to increase sales I Is it a signal to decrease industry prices to stimulate demand 0 Responding to Price Changes continue to momitor FILM LELJIIEIJ39I39IL HUIQt competitan price Price as our I d pmfift Reduce prune fies Flame percewed value teetwe t a HENquot Imprsou tinderMattir arid i 39IEFEEEE price 0 Public Policy and Pricing 0 Pricing Within Channel Levels I Price xing legislation requires sellers to set prices without talking to competitors I Predatory pricing legislation prohibits selling below cost with the intention of punishing a competitor or gaining higher longterm profits by putting competitors out of business 0 Pricing Across Channel Levels I RobinsonPatman Act prevents unfair price discrimination by ensuring that the seller offer the same price terms to customers at a given level of trade 0 Price discrimination is allowed if the seller 0 can prove that costs differ when selling to different retailers O manufactures different qualities of the same product for different retailers I Retail or resale price maintenance is when a manufacturer requires a dealer to charge a specific retail price for its product which is prohibited by law I Deceptive pricing occurs when a seller states prices or price savings that mislead consumers or are not actually available to consumers 0 Bogus reference or comparison prices I Scanner fraud and price confusion Chapter 12 Marketing Channels Delivering Customer Value 0 Supply Chains and the Value Delivery Network 0 Upstream partners are firms that supply raw materials components parts information finances and expertise needed to create a product or service Downstream partners include the marketing channels or distribution channels that look toward the customer including retailers and wholesalers Supply chain make and sell view includes the firm s raw materials productive inputs and factory capacity Demand chain sense and respond view suggests that planning starts with the needs of the target customer Value delivery network is composed of the company suppliers distributors and customers who partner with each other to improve the performance of the entire system I The Nature and Importance of Marketing Channels 0 Marketing channel distribution channel is a set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user How Channel Members Add Value I Transform the assortment of products into assortments wanted by consumers l mEI quotitjutor a Number oi tnizaaotiona t al inta nrnartiiariaa t aaaiar tar it think about in aiaiiara Haw iut blurring that ar anr at the r tiara that ran in iittu irriur I Bridge the major time place and possession gaps that separate goods and services from users Manufacturer Guatomar Cuan mar Manufaatu rar Manufaotu rar 5 Quart rrrar Maniutaoturar iiotrihurtoir Custarnar B A Q Manufacturar Cuata rnar Manufacturer Cuatarnar I Information Promotion Contact Matching Negotiation Physical distribution Financing Risk taking Number of Channel Levels at 39 V Using dirtat rhannala a Uaing inrliract channels ti39ia anrnrianfp39 uaaa one or EMEii BES rampant aalla rtiraztly to innra Iarala at intarniadiariaa tn help bring ita nr auuata 3395 annaumara ijna aurpriaa ihara i to ti nal huiiara Erarnp taa must at the trainria you Eramniaa EEItZiEI and rainnay lJIJ g39 E 139El 5f1hifl frlftf inntnnaata to aarneraa In tans 1 er Producer Producer Proo uoar Prod uoor Prooiuoar l g A g Wh ie i r Manufaot uror a 39 39 quot quot reproaantatiuea or aaloa branoi i Euairi ESE Euaiiriooa Helatiar Hotarlor a oinatrtioutor distributor E r c nsumer C msume r Euainoaa ualrioaa BuaInoaa customer ou atomer ouatoinrior 39il hannell 2 Ghairmeil Erratum2i 39il Ehannei E Ehannel 3 39 Connected by several types of ows 0 Physical ow of products Flow of ownership Payment ow Information ow Promotion ow 0 Channel Behavior and Organization 0 Channel Behavior I Marketing channels consist of firms that have partnered for their common good with each member playing a specialized role 39 Channel con ict refers to disagreement among channel members over goals roles and rewards 0 Horizontal and vertical con ict 0 Vertical Marketing Systems 39 Conventional distribution systems consist of one or more independent producers wholesalers and retailers each separate business seeking to maximize its own profits perhaps even at the expense of profits for the system as a whole 39 Vertical marketing systems VMSS provide channel leadership and consist of 77 ledueerr n of Cxenvre ntienei Producer I Ghannel with Vertieal System Retailer Whales ler r V g 7 iferiieel merkeling system here39s HEEH39II39E39P Y K enelner reney lerm fer a Simple eeneeei Itie eimniy a channel in which members ei different ieeele hence eerlieali were ingelher in unified were hence eyeiemi in eeenmnlieh the week If lhe ehannel E Dl iSUlmEl39 Consumeyr canuentiumal vertical marketinu marketinn producers wholesalers and retailers acting as a unified system 0 Corporate vertical marketing systems combine successive stages of production and distribution under single ownership 0 Contractual vertical marketing systems consist of independent firms at different levels of production amp distribution who join together through contracts 0 Franchise organization is a contractual vertical marketing system in which a channel member called a franchisor links several stages in the production distribution process 0 Administered vertical marketing system is a VMS that coordinates successive stages of production amp distribution through the size amp power of one of the parties 0 Horizontal marketing system is a channel arrangement in which two or more companies at one level join together to follow a new marketing opportunity 0 Multichannel distribution systems are systems in which a single firm sets up two or more marketing channels to reach one or more customer segments 0 Changing Channel Organization u V I i Dietiriburtiera Byeiem Piedmer a i large ea meariiee dieiril iuie Dietiriibutgrg ngi m uiiiiple ei39iarrneie Fer example earriri are a iamiliar gr eeaana eeilee w i Deere Iaerri iraei er Tram a neiehiearheee F a i Deere eealer er iram leeee a large Caquot g51 er iereelrgg bueineee weulri heir larger Fah na 5333 i Deere eeiuieimenl irern a are miairri mme Retailerg Dealer MICE eere Iee Jehn Deere dealer and lie m hil E 39 a iaree Emir1 siu mar Gunsumer I Eusraeee H Eusiiness II arnHIHnn i i m i II im ni 539 I Disintermediation is the cutting out of marketing channel intermediaries by producers or the displacement of traditional resellers by new intermediaries I Channel Design Decisions 0 1 Analyzing Consumer Needs I Find out what target consumers want from the channel I Identify market segments I Determine the best channels to use I Minimize the cost of meeting customer service requirements 0 2 Setting Channel Objectives I Determine targeted levels of customer service I Balance consumer needs against costs and customer price preferences 0 3 Identifying Major Alternatives I Types of intermediaries refers to channel members available to carry out channel work Most companies face many channel member choices I Number of Marketing Intermediaries Intensive distribution Exclusive distribution Selective distribution I Responsibilities of Channel Members 0 A producer and the intermediaries need to agree on Price policies Conditions of sale Territory rights Specific services 0 4 Evaluating the Major Alternatives Economic criteria Control issues Adaptability criteria 0 Designing International Distribution Channels I Channel systems can vary from country to country I Marketers must be able to adapt channel strategies to structures Within each country 0 Channel Management Decisions Ghanmem Mamba 0 Public Policy and Distribution Decisions 0 Exclusive distribution is When the producer gives only a limited number of dealers the exclusive right to distribute its products in their territories 0 Exclusive dealing is When the seller requires that the exclusive distribution sellers not handle competitor s products 0 Exclusive territorial agreements are Where producer or seller limit territory 0 Tying agreements are agreements Where the dealer must take most or all of the line 0 Marketing Logistics and Supply Chain Management 0 Nature and Importance of Marketing Logistics I Marketing logistics physical distribution involves planning implementing and controlling the physical ow of goods services and related information from points of origin to points of consumption to meet consumer requirements at a profit Innuunw Hul ul l lsgistiss lsgisties Dempsey Resellers ere Custsmers 39 Supply chain management involves managing upstream and downstream value added ows of materials final goods and related information among suppliers the company resellers and final consumers 39 Goal of marketing logistics should be to provide a targeted level of customer service at the least cost 0 Major Logistics Functions Warehousing Inventory management Transportation Logistics information management 0 Integrated logistics management is the recognition that providing customer service and trimming distribution costs requires teamwork internally and externally Chapter 13 Retailing and Wholesaling 0 Retailing O Retailing includes all the activities in selling goods or services directly to final consumers for their personal nonbusiness use 0 First Moment of Truth the critical three to seven seconds that a shopper considers a product on a store shelf 0 Types of Retailers I Classification Characteristics Amount of service Product lines Relative prices Organization I Amount of Service Classifications Selfservice Limited service Full service 39 Organization Approach Corporate chains Voluntary chains Retailer cooperatives Franchise organizations 0 Corporate chains are 2 or more outlets that are commonly owned and controlled 0 Size allows them to buy in large quantities at lower prices and gain promotional economies ex Macy s CVS I Voluntary chains are wholesalesponsored groups of independent retailers that engage in group buying and common merchandising ex Independent Grocers Alliance Western Auto 0 Retailer cooperatives are a group of independent retailers that band together to set up a jointowned central wholesale operation and conduct joint merchandising and promotion efforts ex Ace Hardware Associated Grocers 0 Franchises are contractual associations between a manufacturer wholesaler or service organization a franchisor and independent business people franchisees who buy the right to own and operate one or more units in the franchise system 0 Retailer Marketing Decisions 0 Segmentation targeting differentiation and positioning involve the definition and profile of the market so the other retail Retail trategy marketing mix market1ng dec1s1ons can be made Hemati n pr dum and Service 0 Major product variable dec1s10ns gating asearrmem include quotentiatiion Retail prices t39iCmirig I Product assortment Serv1ces m1x pmmmmn Store atmosphere Dvistribuiri n 0 Price policy must fit the target market Ma atmm and positioning product and service assortment competition and economic factors Value fer targeted retail eustemers I High markup on lower volume Low markup on higher volume 0 Price Decision I Everyday low pricing EDLP involves charging constant everyday low prices and offering few sales or discounts I Highlow pricing involves charging higher prices on an everyday basis coupled with frequent sales and other price promotions 0 Promotion Decision Advertising Personal selling Sales promotion Public relations Direct marketing 0 Retailing Trends and Developments 0 Tighter Consumer Spending I Changed consumer spending patterns Some retailers benefit Other retailers have tough times 0 New Retail Forms Shortening Retail Life Cycles and Retail Convergence I Retail convergence involves the merging of consumers producers prices and retailers creating greater competition for retailers and greater difficulty differentiating offerings O The rise of megaretailers involves the rise of mass merchandisers and specialty superstores the formation of vertical marketing systems and a rash of retail mergers and acquisitions I Superior information systems Buying power Large selection 0 Growth of Nonstore Retailing Direct Online Mobile Social Media 0 The growing importance of retail technology provides better forecasts inventory control electronic ordering transfer of information scanning online transaction processing improved merchandise handling systems and the ability to connect with customers I Wholesaling O Wholesaling includes all activities involved in selling goods and serVices to those buying for resale or business use I Selling and promoting involves the wholesaler s sales force helping the manufacturer reach many small customers at a low cost I Buying and assortment building involves the selection of items and building of assortments needed by customers saVing the customers work I Bulk breaking involves the Wholesaler buying in large quantities and breaking into smaller lots for customers I Warehousing involves the Wholesaler holding inventory reducing its customers inventory cost and risk I Transportation involves the Wholesaler providing quick delivery due to its proximity to the buyer I Financing involves the Wholesaler providing credit and financing suppliers by ordering early and paying on time I Risk bearing involves the Wholesaler absorbing risk by taking title and bearing the cost of theft damage spoilage and obsolescence I Market information involves the Wholesaler providing information to suppliers and customers about competitors new products and price developments I Management services and advice involves Wholesalers helping retailers train their sales clerks improve store layouts amp set up accounting amp inventory control systems I Types of Wholesalers Merchant Wholesalers Brokers and agents Manufacturers and retailers branches and offices Trends in Wholesaling 0 Need for greater efficiency Valueadding customer relationships 0 Increase in customer demand for services 0 Increase in use of technology to boost productivity Chapter 14


Buy Material

Are you sure you want to buy this material for

50 Karma

Buy Material

BOOM! Enjoy Your Free Notes!

We've added these Notes to your profile, click here to view them now.


You're already Subscribed!

Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'

Why people love StudySoup

Steve Martinelli UC Los Angeles

"There's no way I would have passed my Organic Chemistry class this semester without the notes and study guides I got from StudySoup."

Janice Dongeun University of Washington

"I used the money I made selling my notes & study guides to pay for spring break in Olympia, Washington...which was Sweet!"

Bentley McCaw University of Florida

"I was shooting for a perfect 4.0 GPA this semester. Having StudySoup as a study aid was critical to helping me achieve my goal...and I nailed it!"


"Their 'Elite Notetakers' are making over $1,200/month in sales by creating high quality content that helps their classmates in a time of need."

Become an Elite Notetaker and start selling your notes online!

Refund Policy


All subscriptions to StudySoup are paid in full at the time of subscribing. To change your credit card information or to cancel your subscription, go to "Edit Settings". All credit card information will be available there. If you should decide to cancel your subscription, it will continue to be valid until the next payment period, as all payments for the current period were made in advance. For special circumstances, please email


StudySoup has more than 1 million course-specific study resources to help students study smarter. If you’re having trouble finding what you’re looking for, our customer support team can help you find what you need! Feel free to contact them here:

Recurring Subscriptions: If you have canceled your recurring subscription on the day of renewal and have not downloaded any documents, you may request a refund by submitting an email to

Satisfaction Guarantee: If you’re not satisfied with your subscription, you can contact us for further help. Contact must be made within 3 business days of your subscription purchase and your refund request will be subject for review.

Please Note: Refunds can never be provided more than 30 days after the initial purchase date regardless of your activity on the site.