LSUS Chen MBA 706 Chapter 9 Exam
Graded A+
- use of new tech to provide better services at lower costs: self checkout, info kiosks etc.
Adaptive Criteria: - ANSWER-Degree of flexibility in responding to the changing
environment
An effective supply chain should meet the following criteria - ANSWER-- availability
- speed of delivery
-reliability
- lot size
- convenience
AKA deliver the right product in the right quantity to the right place at the right time for
the right customer at the right price
Calculating Elasticity - ANSWER-If E > 1, as in the left plot, demand is said to be elastic.
Price and revenue go in opposite directions: With a price drop, revenues shoot up; with
a price increase, revenues fall off.
If 0 ≤ E < 1, as in the right plot, demand is inelastic. Revenue follows price in the same
direction: If price goes up, revenue goes up; if price goes down, so do revenues.
If 𝐸 = 1, demand is said to be unitary. Prices goes up or down, but revenues remain
about the same. ****Elasticity is always computed to be negative, so the negative signs
are just ignored.
Channel Management Design Channel structure (3 strategies) - ANSWER-- Intensive
distribution
- Selective distribution
- Exclusive distribution
Control Criteria: - ANSWER-Degree of influence, motivation, and conflict among
channel members
Customer Segments - ANSWER-Brand-loyal customers are inelastic, less price
sensitive; they'll buy our brand no matter what the price.
Price-sensitive segment is quite elastic and deal prone; customers will run to a
competitor (or even drop out of the category) when we raise prices.
Delivery gap - ANSWER-What is set in the standards vs. what is delivered
Demand Curve - ANSWER-Demand tends to decrease as price increases.
Design Channel Structure: 3 channel options - ANSWER-- Direct marketing
, - sales force
- intermediary marketing channel
Discouraging others from entering the market: - ANSWER-Prices are set low as a
barrier to entry which also signals the possibility of price war
Early cash recovery - ANSWER-Prices are set to generate a high cash flow to solve
problems of liquidity
Economic criteria: - ANSWER-Cost, Revenue, Profit
Elastic vs. Inelastic Demand - ANSWER-Inelastic demand implies that the customer will
purchase even if price increases.
End-user considerations: - ANSWER-Where consumers would shop and buy
Exclusive distribution - ANSWER-Used when companies limit intermediaries to one per
geographical area
ex: exclusively at nordstrom, exclusively at Neiman Marcus
Factors That Drive Demand - ANSWER-Demand increases if
•Customers' desire for the brand increases.
•Perceptions of product's benefits and brand images increase.
•Competitive products are poor or priced higher.
•There are few good substitutes.
Formulate channel strategy - ANSWER-- objectives: how, when, and where the
company offering should be made available to the target markets
- importance of a channel strategy depends on whether:
::distribution is important to target market
::distribution can provide a differential advantage over competitors
;; Distribution may become a competitive vulnerability
;; Channel coordination may become a competitive advantage
Importance of Pricing - ANSWER-Price obtains value back from customers.
•Visible monetary cost, invisible costs (transportation, time, physical, psychological, etc.)
•Marketers set optimal pricing.
Pricing
•Matches brand positioning.
•Affects demand.
•Can be used as a segmentation tool.
Integrating all elements of the marketing mix - ANSWER-- all elements are consistent in
representing the brand
- should create a competitive advantage
- should match the resources available to the organization
Graded A+
- use of new tech to provide better services at lower costs: self checkout, info kiosks etc.
Adaptive Criteria: - ANSWER-Degree of flexibility in responding to the changing
environment
An effective supply chain should meet the following criteria - ANSWER-- availability
- speed of delivery
-reliability
- lot size
- convenience
AKA deliver the right product in the right quantity to the right place at the right time for
the right customer at the right price
Calculating Elasticity - ANSWER-If E > 1, as in the left plot, demand is said to be elastic.
Price and revenue go in opposite directions: With a price drop, revenues shoot up; with
a price increase, revenues fall off.
If 0 ≤ E < 1, as in the right plot, demand is inelastic. Revenue follows price in the same
direction: If price goes up, revenue goes up; if price goes down, so do revenues.
If 𝐸 = 1, demand is said to be unitary. Prices goes up or down, but revenues remain
about the same. ****Elasticity is always computed to be negative, so the negative signs
are just ignored.
Channel Management Design Channel structure (3 strategies) - ANSWER-- Intensive
distribution
- Selective distribution
- Exclusive distribution
Control Criteria: - ANSWER-Degree of influence, motivation, and conflict among
channel members
Customer Segments - ANSWER-Brand-loyal customers are inelastic, less price
sensitive; they'll buy our brand no matter what the price.
Price-sensitive segment is quite elastic and deal prone; customers will run to a
competitor (or even drop out of the category) when we raise prices.
Delivery gap - ANSWER-What is set in the standards vs. what is delivered
Demand Curve - ANSWER-Demand tends to decrease as price increases.
Design Channel Structure: 3 channel options - ANSWER-- Direct marketing
, - sales force
- intermediary marketing channel
Discouraging others from entering the market: - ANSWER-Prices are set low as a
barrier to entry which also signals the possibility of price war
Early cash recovery - ANSWER-Prices are set to generate a high cash flow to solve
problems of liquidity
Economic criteria: - ANSWER-Cost, Revenue, Profit
Elastic vs. Inelastic Demand - ANSWER-Inelastic demand implies that the customer will
purchase even if price increases.
End-user considerations: - ANSWER-Where consumers would shop and buy
Exclusive distribution - ANSWER-Used when companies limit intermediaries to one per
geographical area
ex: exclusively at nordstrom, exclusively at Neiman Marcus
Factors That Drive Demand - ANSWER-Demand increases if
•Customers' desire for the brand increases.
•Perceptions of product's benefits and brand images increase.
•Competitive products are poor or priced higher.
•There are few good substitutes.
Formulate channel strategy - ANSWER-- objectives: how, when, and where the
company offering should be made available to the target markets
- importance of a channel strategy depends on whether:
::distribution is important to target market
::distribution can provide a differential advantage over competitors
;; Distribution may become a competitive vulnerability
;; Channel coordination may become a competitive advantage
Importance of Pricing - ANSWER-Price obtains value back from customers.
•Visible monetary cost, invisible costs (transportation, time, physical, psychological, etc.)
•Marketers set optimal pricing.
Pricing
•Matches brand positioning.
•Affects demand.
•Can be used as a segmentation tool.
Integrating all elements of the marketing mix - ANSWER-- all elements are consistent in
representing the brand
- should create a competitive advantage
- should match the resources available to the organization
