MARK 3336 FINAL VERIFIED STUDY GUIDE
Market-skimming pricing (price skimming) - Answers - 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
market penetration pricing - Answers - setting a low initial price on a new product to
appeal immediately to the mass market
product line pricing - Answers - setting the price steps between various products in a
product line based on cost differences between the products, customer evaluations of
different features, and competitors' prices
captive product pricing - Answers - setting a price for products that must be used along
with a main product, such as blades for a razor and games for a video-game console
product bundle pricing - Answers - combining several products and offering the bundle
at a reduced price
optional product pricing - Answers - the pricing of optional or accessory products along
with a main product
customer-segment pricing - Answers - different customers pay different prices for the
same product or service
product form pricing - Answers - different versions of the product are priced differently
but not according to differences in their costs
By-product pricing - Answers - setting a price for by-products in order to make the main
product's price more competitive
price fixing - Answers - an agreement among firms to charge one price for the same
good
price discrimination - Answers - the business practice of selling the same good at
different prices to different customers
Major Pricing Strategies (value based, cost based, EDLP, high low, value added, fixed
costs, variable costs, total costs) - Answers - If customers perceive that a products price
is greater than its value then they wont but it, if its not as valuable to them as the price
you are offering then you wont sell product
If the company prices the product below its costs, then profits will suffer
,Between the two extremes, the 'right' pricing strategy is one that delivers both value to
the customer and profit to the company
Product costs are the floor of pricing, no profits will be made below that price point
Price ceiling - no demand above that price
multichannel distribution system - Answers - a distribution system in which a single firm
sets up two or more marketing channels to reach one or more customer segments
selective distribution - Answers - a form of distribution achieved by screening dealers to
eliminate all but a few in any single area
intensive distribution - Answers - stocking the product in as many outlets as possible
exclusive distribution - Answers - giving a limited number of dealers the exclusive right
to distribute the company's products in their territories
price elasticity of demand - Answers - a measure of how much the quantity demanded
of a good responds to a change in the price of that good, computed as the percentage
change in quantity demanded divided by the percentage change in price
A measure of the sensitivity of demand to changes in price.
price inelasticity of demand - Answers - the slower and harder it is for businesses to
expand production, the more inelastic the producer's supply will be
Product Life Cycle (PLC) - Answers - describes the stages a new product goes through
in the marketplace: introduction, growth, maturity, and decline
the course of a product's sales and profits over its lifetime
Retail Price Maintenance - Answers - Involves producers pressuring retailers to sell
goods at the suggested retail price
manufacturer's agents - Answers - Independent intermediaries that represent two or
more sellers and usually offer customers complete product lines
Intermediation - Answers - The process whereby financial middlemen consolidate many
small savings accounts belonging to individual depositors and invest those funds in
large, diversified projects.
Disintermediation - Answers - the cutting out of marketing channel intermediaries by
product or service producers or the displacement of traditional resellers by radical new
types of intermediaries
,Break-even pricing - Answers - setting price to break even on the costs of making and
marketing a product, or setting price to make a target return
Search Engine Results Page (SERP) - Answers - The actual results returned to the user
based on the search query.
- refer to online universal Powerpoint
online social networks - Answers - Online social communities - blogs, social networking
Web sites, and other online communities - where people socialize or exchange
information and opinions
P(romotion) - Answers - Communication by marketers that informs, persuades, and
reminds potential buyers of a product in order to influence an opinion or elicit a
response
reach - Answers - a measure of the percentage of people in the target market who are
exposed to the ad campaign during a given period of time
-EX) What percent of adults 18-35 will see this television ad in the month of march,
percent of target group
Frequency - Answers - a measure of how many times the average person in the target
market is exposed to the message
-Number of times your target group will see it during that same time period
-EX) 2.5 times on average people will see this ad in 4 week period we are talking about
Impact - Answers - is the qualitative value of a message exposure through a given
medium
Assessment of interaction of very specific media and how you selected it, qualitative
impact
selecting advertising media - Answers - Major steps include:
lDeciding on reach-frequency-impact
lSelecting media vehicles
lDeciding on media timing
Selecting Advertising Media steps
-Decide who you want to reach and how broadly you want to reach them, how often you
want people to see these ads, how impactful you want them to be
-The environment you want to show your ads, types of ads or websites you want ads to
show up on, types of influencers you want your ad seen with
, -Build schedule and good media strategy that includes flow chart of when the ads are
going to run and how that relates to the other parts of the promotion mix from a calendar
stand point
new products - Answers - 2 ways to obtain new products: acquisition and new product
development
Can do both acquisitions and new product development, acquisitions are second
Companies sometimes must continuously generate new product ideas
Not all new products planned
New Product Development Process - Answers - A seven-phase process for introducing
products: idea generation, screening, concept testing, business analysis, product
development, test-marketing, and commercialization
Doing this Internally
-Idea generation = brainstorming using many methods and lots of people
-Screening ideas for whether or not you want to move them forward in the process, can't
afford all of them
-Develop new product concept, value proposition, its positioning OR new service
concept plus its positioning
-Then test product/service with customers and get some feedback
-Then marketing strategy development
-Business analysis
-Product development
-Test marketing
commercialization
idea generation - Answers - the systematic search for new product ideas
Sources of new-product ideas
- Internal
- External
Crowdsourcing - Answers - Inviting broad communities of people—
customers, employees, independent
scientists and researchers, and even the
public at large—into the new-product
innovation process.
Very contemporary, marketers use this quite a bit, super bowl commercials are
crowdsourced a lot (offering creators a chance to market their products)
Market-skimming pricing (price skimming) - Answers - 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
market penetration pricing - Answers - setting a low initial price on a new product to
appeal immediately to the mass market
product line pricing - Answers - setting the price steps between various products in a
product line based on cost differences between the products, customer evaluations of
different features, and competitors' prices
captive product pricing - Answers - setting a price for products that must be used along
with a main product, such as blades for a razor and games for a video-game console
product bundle pricing - Answers - combining several products and offering the bundle
at a reduced price
optional product pricing - Answers - the pricing of optional or accessory products along
with a main product
customer-segment pricing - Answers - different customers pay different prices for the
same product or service
product form pricing - Answers - different versions of the product are priced differently
but not according to differences in their costs
By-product pricing - Answers - setting a price for by-products in order to make the main
product's price more competitive
price fixing - Answers - an agreement among firms to charge one price for the same
good
price discrimination - Answers - the business practice of selling the same good at
different prices to different customers
Major Pricing Strategies (value based, cost based, EDLP, high low, value added, fixed
costs, variable costs, total costs) - Answers - If customers perceive that a products price
is greater than its value then they wont but it, if its not as valuable to them as the price
you are offering then you wont sell product
If the company prices the product below its costs, then profits will suffer
,Between the two extremes, the 'right' pricing strategy is one that delivers both value to
the customer and profit to the company
Product costs are the floor of pricing, no profits will be made below that price point
Price ceiling - no demand above that price
multichannel distribution system - Answers - a distribution system in which a single firm
sets up two or more marketing channels to reach one or more customer segments
selective distribution - Answers - a form of distribution achieved by screening dealers to
eliminate all but a few in any single area
intensive distribution - Answers - stocking the product in as many outlets as possible
exclusive distribution - Answers - giving a limited number of dealers the exclusive right
to distribute the company's products in their territories
price elasticity of demand - Answers - a measure of how much the quantity demanded
of a good responds to a change in the price of that good, computed as the percentage
change in quantity demanded divided by the percentage change in price
A measure of the sensitivity of demand to changes in price.
price inelasticity of demand - Answers - the slower and harder it is for businesses to
expand production, the more inelastic the producer's supply will be
Product Life Cycle (PLC) - Answers - describes the stages a new product goes through
in the marketplace: introduction, growth, maturity, and decline
the course of a product's sales and profits over its lifetime
Retail Price Maintenance - Answers - Involves producers pressuring retailers to sell
goods at the suggested retail price
manufacturer's agents - Answers - Independent intermediaries that represent two or
more sellers and usually offer customers complete product lines
Intermediation - Answers - The process whereby financial middlemen consolidate many
small savings accounts belonging to individual depositors and invest those funds in
large, diversified projects.
Disintermediation - Answers - the cutting out of marketing channel intermediaries by
product or service producers or the displacement of traditional resellers by radical new
types of intermediaries
,Break-even pricing - Answers - setting price to break even on the costs of making and
marketing a product, or setting price to make a target return
Search Engine Results Page (SERP) - Answers - The actual results returned to the user
based on the search query.
- refer to online universal Powerpoint
online social networks - Answers - Online social communities - blogs, social networking
Web sites, and other online communities - where people socialize or exchange
information and opinions
P(romotion) - Answers - Communication by marketers that informs, persuades, and
reminds potential buyers of a product in order to influence an opinion or elicit a
response
reach - Answers - a measure of the percentage of people in the target market who are
exposed to the ad campaign during a given period of time
-EX) What percent of adults 18-35 will see this television ad in the month of march,
percent of target group
Frequency - Answers - a measure of how many times the average person in the target
market is exposed to the message
-Number of times your target group will see it during that same time period
-EX) 2.5 times on average people will see this ad in 4 week period we are talking about
Impact - Answers - is the qualitative value of a message exposure through a given
medium
Assessment of interaction of very specific media and how you selected it, qualitative
impact
selecting advertising media - Answers - Major steps include:
lDeciding on reach-frequency-impact
lSelecting media vehicles
lDeciding on media timing
Selecting Advertising Media steps
-Decide who you want to reach and how broadly you want to reach them, how often you
want people to see these ads, how impactful you want them to be
-The environment you want to show your ads, types of ads or websites you want ads to
show up on, types of influencers you want your ad seen with
, -Build schedule and good media strategy that includes flow chart of when the ads are
going to run and how that relates to the other parts of the promotion mix from a calendar
stand point
new products - Answers - 2 ways to obtain new products: acquisition and new product
development
Can do both acquisitions and new product development, acquisitions are second
Companies sometimes must continuously generate new product ideas
Not all new products planned
New Product Development Process - Answers - A seven-phase process for introducing
products: idea generation, screening, concept testing, business analysis, product
development, test-marketing, and commercialization
Doing this Internally
-Idea generation = brainstorming using many methods and lots of people
-Screening ideas for whether or not you want to move them forward in the process, can't
afford all of them
-Develop new product concept, value proposition, its positioning OR new service
concept plus its positioning
-Then test product/service with customers and get some feedback
-Then marketing strategy development
-Business analysis
-Product development
-Test marketing
commercialization
idea generation - Answers - the systematic search for new product ideas
Sources of new-product ideas
- Internal
- External
Crowdsourcing - Answers - Inviting broad communities of people—
customers, employees, independent
scientists and researchers, and even the
public at large—into the new-product
innovation process.
Very contemporary, marketers use this quite a bit, super bowl commercials are
crowdsourced a lot (offering creators a chance to market their products)
