Summary of Terms CH 16-20

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7 Apr 2011
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CHAPTER 16
features: The qualities, both tangible and intangible, that a company builds into its products.
value package: Product marketed as a bundle of value-adding attributes, including reasonable cost.
convenience goods/services: Relatively inexpensive consumer goods or services that are bought and used rapidly and
regularly, causing consumers to spend little time looking for them or comparing their prices.
shopping goods/services: Moderately expensive consumer goods or services that are purchased infrequently, causing
consumers to spend some time comparing their prices.
specialty goods/services: Very expensive consumer goods or services that are purchased rarely, causing consumers to
spend a great deal of time locating the exact item desired.
expense items: Relatively inexpensive industrial goods that are consumed rapidly and regularly.
capital items: Expensive, long-lasting industrial goods that are used in producing other goods or services and have a long
life.
product line: A group of similar products intended for a similar group of buyers who will use them in a similar fashion.
product mix: The group of products a company has available for sale.
technology: The application of science that enables people to do entirely new things or to perform established tasks in a
new and better way.
service package: Identification of the tangible and intangible features that define the service.
service process design: Selecting the process, identifying worker requirements, and determining facilities requirements
so that the service can be effectively provided.
speed to market: Strategy of introducing new products to respond quickly to customer and/or market changes.
product life cycle (PLC): The concept that the profit-producing life of any product goes through a cycle of introduction,
growth, maturity (levelling off), and decline.
product extension: Existing, unmodified product that is marketed globally.
product adaptation: Product modified to have greater appeal in foreign markets.
reintroduction: Process of reviving for new markets products that are obsolete in older ones.
brand awareness: Extent to which a brand name comes to mind when the consumer considers a particular product
category.
brand equity: Degree of consumers' loyalty to and awareness of a brand and its resultant market share.
brand loyalty: Customers' recognition of, preference for, and insistence on buying a product with a certain brand name.
branding: Process of using symbols to communicate the qualities of a product made by a particular producer.
licensed brands: Selling the right to use a brand name, a celebrity's name, or some other well-known identification mark
to another company to use on a product.
national brands: Products distributed by and carrying a name associated with the manufacturer.
private brands: Products promoted by and carrying a name associated with the retailer or wholesaler, not the
manufacturer.
trademark: The exclusive legal right to use a brand name.
patent: Protects an invention or idea for a period of 20 years.
copyright: Exclusive ownership rights granted to creators for the tangible expression of an idea.
packaging: The physical container in which a product is sold, including the label.
label: That part of a product's packaging that identifies the product's name and contents and sometimes its benefits.
Consumer Packaging and Labelling Act: A federal law that provides comprehensive rules for packaging and labelling
of consumer products.
CHAPTER 17
pricing: Deciding what the company will receive in exchange for its product.
pricing objectives: Goals that producers hope to attain in pricing products for sale.
market share: A company's percentage of the total market sales for a specific product.
variable costs: Those costs that change with the number of goods or services produced or sold.
fixed costs: Those costs unaffected by the number of goods or services produced or sold.
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break-even analysis: An assessment of how many units must be sold at a given price before the company begins to make
a profit.
break-even point: The number of units that must be sold at a given price before the company covers all of its variable
and fixed costs.
price leadership: The dominant firm in the industry establishes product prices and other companies follow suit.
price-skimming strategy: The decision to price a new product as high as possible to earn the maximum profit on each
unit sold.
penetration-pricing strategy: The decision to price a new product very low to sell the most units possible and to build
customer loyalty.
price lining: The practice of offering all items in certain categories at a limited number of predetermined price points.
psychological pricing: The practice of setting prices to take advantage of the nonlogical reactions of consumers to certain
types of prices.
odd-even psychological pricing: A form of psychological pricing in which prices are not stated in even dollar amounts.
discount: Any price reduction offered by the seller to persuade customers to purchase a product.
cash discount: A form of discount in which customers paying cash, rather than buying on credit, pay lower prices.
seasonal discount: A form of discount in which lower prices are offered to customers making a purchase at a time of year
when sales are traditionally slow.
trade discount: A discount given to firms involved in a product's distribution.
quantity discount: A form of discount in which customers buying large amounts of a product pay lower prices.
distribution mix: The combination of distribution channels a firm selects to get a product to end-users.
intermediary: Any individual or firm other than the producer who participates in a product's distribution.
wholesalers: Intermediaries who sell products to other businesses, which in turn resell them to the end-users.
retailers: Intermediaries who sell products to end-users.
distribution channel: The path a product follows from the producer to the end-user.
direct channel: A distribution channel in which the product travels from the producer to the consumer without passing
through any intermediary.
sales agent (or broker): An independent business person who represents a business and receives a commission in return,
but never takes legal possession of the product.
industrial (business) distribution: The network of channel members involved in the flow of manufactured goods to
industrial customers.
sales offices: Offices maintained by sellers of industrial goods to provide points of contact with their customers.
intensive distribution: A distribution strategy in which a product is distributed in nearly every possible outlet, using
many channels and channel members.
exclusive distribution: A distribution strategy in which a product's distribution is limited to only one wholesaler or
retailer in a given geographic area.
selective distribution: A distribution strategy that falls between intensive and exclusive distribution, calling for the use of
a limited number of outlets for a product.
channel conflict: Conflict arising when the members of a distribution channel disagree over the roles they should play or
the rewards they should receive.
channel captain: The channel member that is the most powerful in determining the roles and rewards of organizations
involved in a given channel of distribution.
vertical marketing system (VMS): A system in which there is a high degree of coordination among all the units in the
distribution channel so that a product moves efficiently from manufacturer to consumer.
merchant wholesaler: An independent wholesaler that buys and takes legal possession of goods before selling them to
customers.
full-service merchant wholesaler: A merchant wholesaler that provides storage and delivery in addition to wholesaling
services.
limited-function merchant wholesaler: An independent wholesaler that provides only wholesaling–not warehousing or
transportation–services.
drop shipper: A type of wholesaler that does not carry inventory or handle the product.
rack jobber: A full-function merchant wholesaler specializing in non-food merchandise that sets up and maintains
display racks of some products in retail stores.
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e-intermediaries: Internet-based distribution-channel members that collect information about sellers and present it in
convenient form to consumers and/or help deliver internet products to consumers.
syndicated selling: Occurs when a website offers other websites a commission for referring customers.
shopping agent (e-agent): A type of intermediary that helps internet consumers by gathering and sorting information
they need to make purchases.
department stores: Large retail stores that offer a wide variety of high-quality items divided into specialized
departments.
supermarkets: Large retail stores that offer a variety of food and food-related items divided into specialized departments.
specialty stores: Small retail stores that carry one line of related products.
category killers: Retailers who carry a deep selection of goods in a narrow product line.
bargain retailers: Retail outlets that emphasize low prices as a means of attracting consumers.
discount houses: Bargain retail stores that offer major items such as televisions and large appliances at discount prices.
catalogue showroom: A bargain retail store in which customers place orders for items described in a catalogue and pick
up those items from an on-premises warehouse.
factory outlets: Bargain retail stores that are owned by the manufacturers whose products they sell.
warehouse club (wholesale club): Huge, membership-only, combined retail-wholesale operations that sell brand-name
merchandise.
convenience stores: Retail stores that offer high accessibility, extended hours, and fast service on selected items.
direct-response retailing: A type of retailing in which firms make direct contact with customers both to inform them
about products and to receive sales orders.
direct selling: Form of non-store retailing typified by door-to-door sales.
mail order (catalogue marketing): A form of non-store retailing in which customers place orders for merchandise
shown in catalogues and receive their orders via mail.
telemarketing: Use of the telephone to sell directly to consumers.
electronic retailing: Non-store retailing in which information about the seller's products and services is connected to
consumers' computers, allowing consumers to receive the information and purchase the products in the home.
ecatalogues: Non-store retailing that uses the internet to display products and services for both retail shoppers and
business customers.
electronic storefront: A seller's website in which consumers collect information about products and buying
opportunities, place sales orders, and pay for their purchases.
cybermalls: Collections of virtual storefronts representing diverse products.
multilevel marketing: A system in which a salesperson earns a commission on their own sales and on the sales of any
other salespeople they recruit.
interactive marketing: Selling products and services by allowing customers to interact with multimedia websites using
voice, graphics, animation, film clips, and access to live human advice.
video marketing: Selling to consumers by showing products on television that consumers can buy by telephone or mail.
physical distribution: Those activities needed to move a product from the manufacturer to the end consumer.
warehousing: That part of the distribution process concerned with storing goods.
private warehouse: A warehouse owned and used by just one company.
public warehouse: An independently owned and operated warehouse that stores the goods of many firms.
storage warehouse: A warehouse used to provide storage of goods for extended periods of time.
distribution centre: A warehouse used to provide storage of goods for only short periods before they are shipped to retail
stores.
inventory control: The part of warehouse operations that keeps track of what is on hand and ensures adequate supplies of
products in stock at all times.
materials handling: The transportation and arrangement of goods within a warehouse and orderly retrieval of goods from
inventory.
intermodal transportation: The combined use of different modes of transportation.
containerization: The use of standardized heavy-duty containers in which many items are sealed at the point of shipment
and opened only at the final destination.
order fulfillment: All activities involved in completing a sales transaction, beginning with making the sale and ending
with on-time delivery to the customer.
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