Chpt 10:Price
pricing objectives |
profit, sales, market share, comparative effect, customer satisfaction, image enhancement |
factors in price setting |
costs, demands, revenue, pricing environment |
steps to estimate demand |
number of buyers x avg amt buyer is likely to spend, est mkt share |
price elasticity formula |
% change in quantity demanded/ % change in price |
cross elasticity |
subs and complements |
variable costs |
per-unit costs of production |
fixed costs |
costs of production that doesn't change |
break-even analysis |
# of units that a firm must produce and sell @ given price to cover costs |
break-even point |
total revenue & total profit are equal (beyond: firm makes profit, below: firm makes loss) |
BEP formula (units) |
total fixed costs/ contribution per unit to fixed costs |
BEP forumla (dollars) |
total fixed costs/ (1-(variable cost per unit/price)) |
gross margin |
markup amt added to cost of product to cover fixed costs and leave amt for profit |
retailer margin |
margin added by retailer |
wholesaler margin |
margin added by wholesaler |
target costing |
firms id qualitity, functionality, cost before production |
yield management |
charging diff prices to diff cust to manage capacity & max revenues (hotels) |
value pricing/EDLP |
setting prices to provided ult value to cust |
high/low pricing (promo) |
setting prices at list price but holdiing promos frequently |
skimming price |
high premium price for new product |
penetration pricing |
new product at low price to encourage more cust |
trial pricing |
pricing new product low for limited period of time |
surge pricing |
price rises as demand rises and vice versa |
bundling |
selling 2/+ products as single pkg |
captive pricing |
one item is priced low and other is priced high (printer & ink) |
odd-even pricing |
1.99 works better than 2.00 to make sales |
price lining |
setting a limited number of diff specific prices (price points) for items in a product line |
prestige/premium pricing |
keeping prices artificially high to maintain image |
Chpt 11: Distribution Strategy
breaking bulk |
dividing larger quantities of goods into smaller lots to meet needs of buyers |
risk-taking functions |
chance retailers take on loss of product when they buy from manuf |
transportation and storage |
occurs when retailers move good from production pt to other locations where they hold them |
facilitating functions |
functions of channel intermediaries that make purchase process for cust & manuf |
create assortments |
to provide a variety of products in 1 loc to meet needs of buyers |
comm and transaction functions |
happens when channel members develop and execute both promo & other types of comm among members of channel |
dual and hybrid distribution sys |
participating in more than 1 distribution sys |
steps in distribution planning |
develop distribution objs, eval int & ext environmental influences, choose distribution strategy, develop distribution tatics |
convention mkting sys |
mult lvl distribution channel where channel members wk independantly |
vertical mkting sys (VMS) |
channel of dist w/ formal coop among members of manuf, wholesale, & retail |
administered VMS |
remain independant but wk together bc of 1 single channel member |
corporate VMS |
single firm owns manuf, wholesale, and retail ops |
contractual VMS |
cooperation is enforced by contracts |
horizontal mkting sys (HMS) |
arrangement w/in channel of distribution in which 2/+ firms at same channel lvl wk together |
intensive distribution |
selling a product thru all suitable wholesalers or retailers |
exclusive distribution |
selling a product only thru a single outlet in a particular region |
selective distribution |
distribution using fewer outlets than intensive distribution but more than exclusive dist |
channel cooperation |
occurs when producers, wholesalers, and retailers depend on another |
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Chpt 12: Cust Experience
characteristics of service |
intangibility, perishablity, variability, inseparability |
servicescape |
actual phys facility where service is perfomed |
SERVQUAL |
mult item scale used to measure service quality across dimension of tangibles, reliability, responsiveness, assurance, & empathy |
diminsions of service quality |
tangibles, reliability, responsiveness, assurance, empathy |
mkting ppl |
pure selling, product improvement, mkt fulfillment |
place mkting |
attract biz, ppl to place |
idea mkting |
seek to gain mkt share for concept/philosophy/issue |
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