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| Marketing | |
| Chapter 13 | |
| Cost-plus pricing | A method of setting prices in which the seller totals all the costs for the product and then adds the desired profit per unit |
| Price-floor pricing | A method for calculating price in which, to maintain full plant operating capacity, a portion of a firm's output may be sold at a price that covers only marginal costs of production |
| Demand-based pricing | A price-setting method based on estimates of demand at different prices |
| Demand-backward pricing | Starts with a customer-pleasing price followed up with cost-management strategies to hold costs to a satisfactory level |
| Chain-markup pricing | A pricing strategy that extends demand-backward pricing from the ultimate consumer all the way back through the channel of distribution to the manufacturer |
| Price leader | The firm that sets price first in an industry; other major firms in the industry follow the leader by staying in line |
| Value pricing, or every day low pricing (EDLP) | A pricing strategy in which a firm sets prices that provide ultimate value to customers |
| Skimming price | A very high, premium price that a firm charges for its new, highly desirable product |
| Penetration pricing | A pricing strategy in which a firm introduces a new product at a very low price to encourage more customers to purchase it |
| Trial pricing | Pricing a new product low for a limited period of time in order to lower the risk for a customer |
| Price Bundling | Selling two or more goods or services as a single package for one price |
| Captive pricing | A pricing tactic for two items that must be used together; one item is priced very low and the firm makes its profit on another, high-margin item essential to the operation of the first item |
| FOB origin pricing | A pricing tactic in which the cost of transporting the product from the factory to the customer's location is the responsibility of the customer |
| FOB Delivered pricing | A pricing tactic in which the cost of leading and transporting the product to the customer is included in the selling price, paid by the manufacturer |
| Zone pricing | A pricing tactic in which customers in different geographic zones pay different transportation rates |
| Uniform delivered pricing | A pricing tactic in which a firm adds a standard shipping charge to the price for all customers regardless of location |
| Freight absorption pricing | A pricing tactic in which the seller absorbs the total cost of transportation |
| List price | The price the end customer is expected to pay as determined by the manufacturer |
| Trade or functional discounts | Discounts off list price of products to members of the channel of distribution that perform various marketing functions |
| Quantity discounts | A pricing tactic of charging reduced prices for larger quantities of a product |
| Cumulative quantity discounts | Discounts based on the total quantity bought within a specified time period |
| Non-cumulative quantity discounts | Discounts based on the quantity purchased with individual orders |
| Internal reference price | A set price or a price range in consumers minds that they refer to in evaluating a product's price |
| Price lining | The practice of setting a limited number of different specific prices, called price points, for items in a product line |
| Bait-and-switch | An illegal marketing practice in which an advertised price special is used as bait to get customers into the store with the intention of switching them to a higher-priced item |
| Loss leader pricing | The pricing policy of setting prices below cost in order to attract customers into a store |
| Unfair sales acts | State laws that prohibit suppliers from selling products below cost to protect small businesses from larger competitors |
| Price discrimination | The illegal practice of offering the same product to different business customers at different prices and thus lessening competition |
| Price fixing | The collaboration of two or more firms in setting prices, usually to keep prices high |
| Chapter 14 | |
| Channel of distribution | The series of firms or individuals that facilitates the movement of a product from the producer to the final customer |
| Channel intermediaries | Firms or individuals such as wholesalers, agents, brokers, or retailers who help move a product from the producer to the consumer or business user |
| Breaking bulk | Dividing larger quantities of goods into smaller lots in order to meet the needs of the buyers |
| Creating assortments | Providing a variety of products in one location to meet the needs of buyers |
| Facilitating functions | Functions of channel intermediaries that make the purchase process easier for customers and manufacturers |
| Wholesaling intermediaries | Firms that handle the flow of products from the manufacturer to the retailer or business user |
| Independent intermediaries | Channel intermediaries that are not controlled by any manufacturer but instead do business with many different manufacturers and many different customers |
| Merchant wholesalers | Intermediaries that buy goods from manufacturers (take title to them) and sell to retailers and other business-to-business customers |
| Take title | To accept legal ownership of a product and the accompanying rights and responsibilities of ownership |
| Merchandise agents or brokers | Channel intermediaries that provide services in exchange for commissions but never take title to the product |
| Channel levels | The number of distinct categories of intermediaries that populate a channel of distribution |
| Conventional marketing system | A multiple-level distribution channel in which channel members work independently of one another |
| Vertical marketing system (VMS) | A channel of distribution in which there is cooperation among members at the manufacturing, wholesaling, and retaining levels |
| Horizontal marketing system | An arrangement within a channel of distribution I in which two or more firms at the same channel level work together for a common purpose |
| Intensive distribution | Selling a product through all suitable wholesalers or retailers that are willing to stock and sell the product |
| Exclusive distribution | Selling a product only through a single outlet in a particular region |
| Selective distribution | Distribution using fewer outlets than in intensive distribution but more than in exclusive distribution |
| Channel leader | A firm at one level of distribution that takes a leadership role, establishing operating norms and processes that reduce channel conflicts, reduce costs, and enhance delivered customer value |
| Physical distribution | The activities used to move finished good from manufacturers to final customers including order processing, warehousing, materials handling, transportation, and inventory control |
| Warehousing | Storing goods in anticipation of sale or transfer to another member of the channel of distribution |
| Materials handling | The moving of products into, within, and out of warehouses |
| Inventory control | Activities to ensure that goods are always available to meet customers' demands |