drop in unit cost as accumulated vol sold increases as sales grow costs drop

Drop in unit cost as accumulated vol sold increases

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drop in unit cost as accumulated vol sold increases; as sales grow, costs drop allowing further price reduction o Penetration pricing: low initial price to lure away from competitors, discourages competitors bc low profit margin Price skimming: sell new prod/svc @ high price that innovators/early adopters willing to pay Loss leader pricing: lower price below store’s cost (BOGO) Bait & switch: lure in w/ low price ad prod then aggressively pressure to purchase higher priced model Price discrimination: sell same prod to diff re-sellers or ultimate consumer at diff prices; not all forms illegal (Clayton & Robinson-Patman Acts) Price fixing: collude w/ other firms to control prices (Sherman Antitrust Act) o Horizontal: competitors take price out of consumer decision process o Vertical: parties at diff levels of same marketing channel collude MSRP: price manufacturers suggest retailers use to sell their merchandise Contribution per unit: price – var cost per unit Chapter 15: Supply Chain & Channel Mgmt. Marketing channel/supply chain mgmt.: set of approaches/techniques firms employ to efficiently/effectively integrate suppliers/manufacturers/warehouses/transporters/stores Wholesalers: buy prods from manufacturers & sell to retailers Distribution center: facility for receipt/storage/distribution of goods to comp stores/customers Direct channel: manufacturer customer Indirect channel: 1+ intermediaries Vertical channel conflict: members of same channel disagree Horizontal channel conflict: disagreement among 2 @ same level (competitors)
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Independent/conventional channel: indep members try to satisfy own objectives & max profits, @ expense of other members Vertical marketing sys: members act as unified sys o Administered: dominant member controls channel relationship Power: 1 firm can control actions of another member @ diff level Reward power: offer rewards to gain power Coercive power: threatening/punishing Referent power: 1 wants to be associated w/ another, mkt share % Expertise power: has expertise another needs/wants Info power: 1 provides/withholds info from another Legit power: get another to behave in certain way o Contractual: indep firms @ diff levels join together by contracts to obtain econs of scale & reduce conflict Franchising: franchisor allows franchisee to operate bus using name/format developed/supported by franchisor o Corporate: parent comp has total control & dictates channel priorities/objectives Strategic/partnering relationship: members maintain long term, invest in mutually beneficial opportunities; requires mutual trust/open comm/common goals/credible commitments UPC: black & white bar code (manufacturer, description, special packaging info, & special promos) ASN: e-doc supplier sends retailer in advance of shipment to tell retailer what to expect in shipment EDI: electronic data interchange; computer to computer exchange of bus docs from retailer to vendor & back o Cycle time:
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