UNLV MKT 456/Nill Flashcards

Terms Definitions
Full Cost Pricing
Price = FC + Profit + VC
Markup Pricing
Pricing as a percentage of sales
Incremental Cost Pricing
Price is set to cover variable cost only
Cost Oriented =
Full cost pricing, Markup Pricing , & Incremental Pricing
Skim Pricing
Strong relative advantage, low elasticity of demand, low competition , differentiated and difficult to copy, small total market
Penetration Pricing
economies of scale in production , high elasticity of demand, strong competition , not differentiadted and easy to copy, large market
Legal Restrictions
Most countries have laws relating to , dumping, price fixing , price discrimination ,price advertising
Cost of exporting
Taxes , tariffs , administrative costs, inflation , exchange rate fluctuations, varying currency values
Lessening Price Escalation
Lower Cost of goods, Lower tarriffs, lower distribution costs, Foreign Trade Zones
Countertrades
exchanging goods or services which are paid for, in whole or part, with other goods or services, rather than with money. A monetary valuation can however be used in counter trade for accounting purposes.
Forms of Counter trade
barter, compensation deals, counterpurchase or offset trade, product buy-back agreement
Benefits of Counter trade
preserve hard currencey, improve balnce of trade, gain access to new markets, upgrade manufacturing capabilities, maintain price of export goods.
Transfer Pricing
the pricing of contributions (assets, tangible and intangible, services, and funds) transferred within an organization.
Grey Trades
trade of a commodity through distribution channels which, while legal, are unofficial, unauthorized, or unintended by the original manufacturer.
characteristic's of import Oriented System
sellers market, one deal mentality, demand exceeds supply
Characteristics of Mass Marketing system
Buyers Market, ongoing business, supply exceeds demands
Push-Pull Strategy
movement of a product or info between two subjects. On markets the consumers usually "pulls" the goods or info they demand for their needs, while offerers or suppliers "pushes" them toward consumers
Decentralized Strategy
An organizational system whereby planning and decision-making responsibility for marketing, advertising, and promotion lies with a product or brand manager rather than a centralized department.
Country of origin affect
Any effect on a person's perception arising from stereotypes of associations with a product's country of origin
Stimuli
Everything that corresponds with our senses, hearing, seeing, feeling, touching , smelling
Perception is affected by
culture, context and individual factors
Buyer Motivation is based on
Physiological , Psychological, Sociological needs
Involvement
perceived importance a purchase is to a customer , involvement increase with perceived risk
positively correlated
Direct association between two variables. As one variable becomes large, the other also becomes large
Extended Problem Solving
High degree if complexity Often occurs with expensive items, All 7 consumer decision making stages are often used (need recognition, search for information, pre-purchase evaluation of alternatives, purchase, consumption, post-consumption evaluation and
Limited Problem Solving
Low degree of complexity, Consumers don't have time, motivation or resources to engage in EPS ,Little search and evaluation before purchase ,Consumers always look for familiarity and low
Leading Markets
3 criteria , highly competitive , demanding customers, no government involvements
cost leadership
compete for lowest price
Breakeven Point
fixed cost / price - variable cost
Economies of Scale
decreased product cost as volume of product per period increases
Economies of Scope
when the same investment can support multiple profitable activities less expensively in combination then separately
Brand Name Leveraging
Broadening a company product range by introducing add'l forms of products under a brand name which is already successful in another category.
cost advantages through differences in laws and regulations
labor , cost to protect environment , taxes
regional trade agreements
economic trade agreement to reduce tariffs and restrictions on trade btwn two or more nations with in a certain region
free market economy
economy for which the allocation for resources is determined only by their supply and demand for them
global marketing
a business treating the entire world, including the home country, as a single market
A leading market typically has
Strong competition, little governmental regulation, and highly demanding consumers
Porters Generic Strategies
low cost leadership, differentiation, and focus
Differentiation Strategy
A differentiation strategy calls for the development of a product or service that offers unique attributes that are valued by customers and that customers perceive to be better than or different from the products of the competition
Focus Strategy
concentrates on a narrow segment and within that segment attempts to achieve either a cost advantage or differentiation
cost leadership
prices to earn a profit higher than that of rivals, or below the average industry prices to gain market share.
Porters Five Forces
Entry Barriers, Buyer Power,Supplier Power,Threat of Substitutes, Rivalry
Produce Diversification
creating a new customer base, which by definition expands the market potential of the original product
Market Segmentation
Market segmentation is a strategy that involves dividing a larger market into subsets of consumers who have common needs and applications for the goods and services offered in the market.
Product Differentiation
A marketing process that showcases the differences between products. Differentiation looks to make a product more attractive.
Global sourcing
selling the same products in many different countries
compare a FDI with licensing
FDI ( foreign direct investment)offers more control and more risk than licensing
Licensing
) a market entry strategy whereby one company permits a foreign company to make use of its patents, know-how, technology, company name, or other intangible assets in return for a royalty payment
Joint Ventures
a legal entity formed between two or more parties to undertake an economic activity together.
objectives of market entry
product selection , country selection, mode of entry , strategy and time of entry
Fragmented
Emergence of new segments (in a previously homogeneous market) which have their own distinct needs, requirements, and preferences
Concentrated Market
Is a market segmentation and market coverage strategy whereby a product is developed and marketed for a very well-defined, specific segment of the consumer population.
Product Positioning
the process by which marketers try to create an image or identity in the minds of their target market for its product, brand, or organization
Economic Clusters
Geographic concentrations of interconnected companies in a particular field
Factors in country selection
strategic, demand, cost, soci-political , and regulatory factors
Country selection Process
region identification, preliminary screening, in depth screening , final selection
analysis of market attractiveness
size, growth, competition , trade barriers, analysis of political risk , currency, infrastructure , capital requirements, production cost, taxes
Strategic thinking
deals with important issues, anticipates the incalculable, contains irrational and subjective elements
operative thinking
deals with pressing issues, contains rational and objective elements, based on incremental thinking , based on the calculable
Basic questions of strategic planning
where are we, where do we want to be, how do we get there
BCG Model
Boston consulting group model , classification of products (and implicitly also company business units) into four categories based on combinations of market growth and market share relative to the largest competitor.
value chain
how we create value for the customer, product design, purchasing, logistics, marketing, distribution, retailing
vision
what you want to achieve in the long run
elements of a successful vision
openness, spontaneity , realism
market segmentation, how do we get there
demographics, psycho graphics, geographic, ethnographic
select target market, how do we get there
volume potential , margin potential , persuasion potential .
Product positioning
how product is perceived relative to competitors, offerings , company and brand image, country of origin affect
What determines the price of currencies
free market (AKA free float), ER are determined by the supply and demand for the currencies
currency exchange risk
cash inflow in one currency is higher or lower then corresponding cash outflow in different country
factors influencing supply and demand of currencies
Trade, Investment
Types of currency exposure
transaction exposure, translation exposure, operating exposure
Transaction Exposure
occurs when contract are denominated in a foreign currency
Translation Exposure
Occurs when financial statements must be consolidated
Operating Exposure
when the value of cash flows depends on exchange
Short term hedging
less then 18 months , locks in E.R. through the use of financial instruments
Long term hedging
close gap of cash flows in different countries , can not eliminate the currency exchange risk for ongoing business
Factors effecting Trade
real price shocks (oil price), Government Policy (tariff/trade)
Absolute purchasing power parity
the purchasing power for the dollar is the same everywhere
Relative Purchasing Power Parity
Exchange rates move to offset differences in rates of inflation.Works well
In the long run
When differences in inflation are dramatic
Works much less well in the short run
brand extension
marketing strategy in which a firm marketing a product with a well-developed image uses the same brand name in a different product category
dumping
the act of a manufacturer in one country exporting a product to another country at a price which is either below the price it charges in its home market or is below its costs of production
global marketing
characterized by the firm treating the entire world, including the home country, as a single market
2) A leading competitor typically has
high market share
the phrase 'the customer is always right"
c) Does not always provide a good guideline for marketing and product managers because customers don’t always know how their needs can be satisfied
expropriation
Compulsory seizure or surrender of private party for the state's purposes, with little or no compensation to the property's owner
criteria for good research
objective, validity,reliability, cost
objective
unbiased
validity
relevance , measures what you want to measure
reliability
consistancey
cost
marginally decreasing benefits for every dollar invested
quantitative research
findings expressed numerically, and are amenable to mathematical (statistical) manipulation enabling the researcher to estimate (forecast) future events or quantitiesdifficult to control for validity but good obj and reliability
qualitative research
Interviews conducted with a small number of consumers, primarily to gather initial consumer needs or early reactions to new product concepts.easy for validity not necesarily objective or reliable.
trend extropolation
Forecasting technique which uses statistical methods (such as exponential smoothing or moving averages) to project the future pattern of a time series data.
regression analysis RA
Statistical approach to forecasting change in a dependent variable (sales revenue, for example) on the basis of change in one or more independent variables (population and income, for example).
3 types of decision making
rational, emotional, behavioral
rational
high invlovment , EPS
emotional
medium to high involovment
behavioral
low invlovment LPS
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