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This 0 page Study Guide was uploaded by Sonia Brosnan on Saturday December 5, 2015. The Study Guide belongs to MKTG 311 at University of Oregon taught by Roger Rutan in Fall 2015. Since its upload, it has received 62 views. For similar materials see Marketing Management in Business at University of Oregon.
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Date Created: 12/05/15
MKTG 311 VOCABULARY CHAP 1118 Logistics the transporting storing warehousing and handling of goods Customer service level how rapidly and dependany a rm can deliver what the customers want Physical distribution concept all logistics activities should be coordinated as one system that seeks to minimize the cost of distribution for a given customer service level Total cost approach involves evaluating each possible physical distribution system and identifying all of the costs of each alternative Electronic data interchange EDI an approach that puts info in a standardized format easily shared between different computer systems helps in restocking orders 0 Ex measures when a tube of toothpaste is bought from Target can immediately restock Railroads large loads moved at low costs Trucks more expensive exible speedy better at moving small quantities for shorter distances Ship slow usually the lowest cost Pipelines move oil and gas Air freight expensive fast high value low weight goods 0 Ex fashion clothing electronics Containerization grouping individual items and shipping them in protective containers for transit protects products and simpli es handling during shipping Piggyback service loading truck trailers on railcars to provide both speed and exibility Private warehouses storing facilities ownedleased by companies for their own use Public warehouses independent storing facilities ll special needs a company that doesn39t have a regular need for space 0 Ex perfect for a seasonal business Distribution center designed to speed the ow of goods and avoid unnecessary storing costs Single linelimited line stores stores that specialize in certain lines of related products rather than a wide assortment 0 Ex clothing retailer might offer only shoes formal wear or neckties but offer depth Category killer dominate the category quotwe39re going to be really good at just thisquot competitors don39t want to go up against the category killer 0 Ex REI Showrooming go to the physical store to try things on physically see the product then go online and buy it showbrooming collect all the info on the Internet rst gt then go to the physical store and buy it specialty shop a type of conventional limited line store usually small has a distinct quotpersonalityquot discount houses stores that sell quothard goodsquot cameras TVs appliances at substantial price cuts to customers who would go to the discounter39s low rent store pay cash and take care of any servicerepair problems themselves mass merchandisers large self service stores with many departments of quotsoft goodsquot houseware clothing fabrics and staples health and beauty aids focus on lower margins to get faster turnover ex Target WalMart supercenters hypermarkets very large stores that try to carry not only food and drug items but all goods and services that the consumer purchases routinely tries to meet all the customer39s routine needs at a low price wheel of retailing theory new retailers enter the market as low status low margin and then if successful evolve into more conventional retailers offering more services with higher prices then they39re threatened by the new low status low price retailers and the wheel turns again scrambled merchandising mixing product lines for higher pro ts ex Manard39s offers wood and groceries quotfeel like we39re always coming to Manard39s would be really convenient if you sold gas tooquot one stop cooperative chains formed by independent retailers that run their own buying organizations and conduct joint promotion efforts voluntary chains wholesaler sponsored groups that work with independent retailers franchise operation the franchise develops a good marketing strategy and the retail franchise holders carry out the strategy in their own stores manufacturers39 sales brances warehouse that producers set up at seperate locations away from their factories merchant wholesalers most numerous own the products they sell service wholesalers merchant wholesalers that provide all the wholesaling functions 3 types general merchandise single line specialty general merchandise wholesalers carry a broad line of convenience and shopping products ex hardware electrical supplies furniture drugs cosmetics auto equipment single line wholesalers carry a narrower line of merchandise than general merchandise wholesalers ex might carry only food apparel or tools specialty wholesalers carry a very narrow range of products and offer more info and service than any other service wholesaler ex carry only health foods instead of a full line of groveries limited fuction wholesaler provide only some wholesaler functions cash and carry wholesaler want cash drop snippers own the products they sell but to not handle stock or deliver them truck wholesaler deliver products at a cost rack jobbers sell hard to handle assortments that a retailer doesn39t want to manage ex grocery store might rely on one to decide which booksmagazines to sell catalog wholesaler sell through catalogs that reach outlying areas agent wholesaler strong on selling don39t own the product they sell important in international trade manufacturers39 agent sells similar products for several noncompeting producers for a commission exportimport agent manufacturers39 agent who specialize in international trade brokers provide info bring buyers and sellers together exportimport buyers specialize in bringing together buyers and sellers from different countries selling agent take over the whole marketing job of producers almost marketing managers auction company speed up the sale combination export manager blend of manufacturers39 agent and selling agent handle the entire export function for several producers of similar but noncompeting rms mass selling advertising paid publicity unpaid sales managers manage salespeople ad managers work with ads and agencies marketing managers talks to all blends all AIDA model attention interest desire action noise any distraction that can get in the way of the receiver receiving the message encoding what to say how to say it decoding receiver translates the message push push out message to intermediaries talk to the channel ex rolling out new Cadillac to dealers we39ll offer 500 extra to each dealership if they sell them pull talking directly to the customers ex sending coupons directly to customers adoption curve shows when different groups accept ideas innovators rst to adopt don39t mind taking risks got to have the latest and greatest ex the people who get the new iPhone right way early adopters often opinion leaders younger mobile can help the promotion effect by word of mouth info and advice early majority avoids risk is deliberate waits to consider a new idea after many early adopters have tried and liked it late majority cautious older laggardsnon adopters hang onto tradition prefer to do things the way they39ve always been done ex prove to me the new iPhone is better than the 4 l have now main source for laggards is other laggards bad news for marketers primary demand demand for the general product idea ex quotsmartquot appliances selective demand demand for the company39s own brand task method basing the budget on the job to be done nd the task budget for it market intro stage quotthis new idea is goodquot market growth stage quotout brand is bestquot market maturity stage quotour brand is better reallyquot sales decline stage quotlet39s tell those who still want our productquot order getters establish relationships with new customers and develop new business order takers sell to the regularestablished customers supporting salespeople help the salespeople but they don39t try to get orders themselves missionary salespeople supporting salespeople who work for producers calling on intermediaries and their customers don39t have account responsibilities supporting role technical specialists tech support experts who know product appHca ons ex you need a saw blade customer service reps solve problems after a purchase major accounts sales force sells directly to large accounts big accounts get special treatment ex Home Depot Lowe39s prospecting narrowing down to the right target prepared sales presentation uses a memorized presentation that is not adapted to each individual customer consultative selling approach developing a good understanding of the individual customer39s needs before trying to close the sale sales rep makes general bene t statements to get the customer39s attention and interest then the sales rep asks questions and listens carefully to understand the customer39s needs selling formula approach starts with a prepared presentation and leads the customer through some logical steps to a close assuming we know something bout the customer39s needs and attitudes pioneer advertising builds primary demand for a product category rather than demand for a speci c brand ex quotsmartquot watches institutional advertising around image values ideals attempts to builddevelop goodwill competitive advertising emphasizes selective demand talking about products and features how it is superior to competition direct competitive advertising aims for immediate buying action ex Target ad encourages customers to come to Target for 20 off huge sale indirect competitive advertising points out product advantages to affect future buying decisions comparative advertising making speci c brand comparisons using actual product names ex Verizon vs ATampT maps reminder advertising tries to keep the products name before the public reinforces a favorable relationship copy thrust what the words and illustrations should communicate ex quotWake the family without saying a wordquot big muf n pic advertising agencies have specialists in every department experts in lmvideo print ads digital guys web design corrective advertising ads to correct deceptive advertising pass along occurs when one person suggests that others watch or read something comes from trusted sources target return objective sets a speci c level of pro t as an objective pro t maximization objective seeks to get as much pro t as possible ex Tall Poppy raising prices from 70120 sales oriented objective seeks some level of unit sales dollar sales or share of market without referencing pro t status quo objective don39t rock pricing boat ex soda price rarely changes commodity goods of ce supplies non price competition aggressive action on one or more Ps other than Price administered prices consciously set prices help achieve objectives one price policy same price for everyone frequently purchased items low cost convenient maintains goodwill exible price policy different prices for different customers skimming price policy tries to sell the top of a market at a high price before aiming at more price sensitive customers penetration pricing policy tries to sell the whole market at one low price introductory price dealing temporary price cuts list prices the prices customers are normally asked to pay for products quantity discount encourages customers to buy in large amounts ex Costco WalMart cumulative quantity discount apply to purchases over a given period ex a year the discounted amount usually increases as the more items are purchased encourages repeat buying by reducing the customer39s cost for additional purchases noncumulative quantity discount apply only to individual orders seasonal discounts buy sooner net payment for the face value of the invoice is due immediately cash discounts reductions in price to encourage buyers to pay their bills quickly 210 net 30 2 discount if paid in 10 days otherwise the full face value is due within 30 days trade functional discount a list price reduction given to channel members for the job they are going to do selling to people in the trade ex wine business rather than buying for personal use sales price temporary discount from the list price everyday low pricing setting a low list price rather than relying on frequent sales discounts or allowances advertising allowance price reductions given to rms to advertise the suppliers39 products ex Sony gives an allowance 3 of sales to retailers who are then expected to spend the allowance on advertising stockingslotting allowance get attention and shelf space pushprize money push for cash trade in allowance price reduction given for used products when similar new products are bought bring in the old ring up the new rebates refunds paid to consumers after a purchase cash back FOB free on board pricing is easy zone pricing making an average freight charge to all buyers one price to all simplest pricing policy freight absorption pricing absorbing freight cost so that a rm39s delivered price meets that of the nearest competitor value pricing setting a fair price level for a marketing mix leads to superior customer value unfair trade practices acts puts a lower limit on prices especially at the wholesaler and retail levels dumping pricing a product sold in a foreign market below the cost of producing it or at a price lower than its domestic market phony list prices prices customers are shown to suggest that the price has been discounted from list price xing competitors getting together to raise lower or stabilize pdces illegal price discrimintation selling the same products to different buyers at different prices if it injures competition banned by US antimonopoly laws markup calculated on basis of cost a dollar amount added to the cost of products to get the selling price ex CVS buys shampoo for 240 to pro t must sell for over 240 adds 120 to cover operating expenses store is marking up the item 120 markup percent calculated on selling price stockturn rate the number of times the average inventory is sold in a year average cost pricing adding a reasonable markup to the average cost of a product total xed cost sum of the costs that are xed in total ex rent depreciation salaries taxes insurance total variable cost sum of the changing expenses ex expenses for parts wages packaging materials total cost sum of total xed and total variable costs average cost TCquantity average cost of a group of products ex ties some are 10 116 ties sell for 25 average xed cost TFCquantity average variable cost TVCquantity break even point sales cover all costs pro t 0 xed cost contribution per unit selling price VC marginal analysis the changes in total revenue and total cost from selling ONE MORE unit to ne the most pro table price and quantity value in use pricing how much will the customer save reference price the price they expect to pay leader pricing make it low to attract customers bait pricing offer a steal but sell under protest ex advertise a TV for 199 but once bargain customers come to the store salespeople point out the TV39s disadvantages and try to convince them to trade up to a better more expensive TV psychological pricing some prices just seem right oddeven pricing setting prices that end in certain numbers price lining a few prices cover the eld price the product line quotGoodquot basics quotBetterquot more settings quotBestquot all the bells and whistles demandbackward pricing setting an acceptable nal consumer price and working backward to what a producer can charge prestige pricing setting a rather high price to suggest high quality or high status ex Rolex Cadillac fullline pricing setting prices for a whole line of products complementary product pricing setting prices on several products as a group productbundle pricing one price for several products negotiated price what will a speci c customer pay bid pricing a new price for every job
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