Chapter 10

1.Price strategies
Three major pricing strategies: customer value-based pricing, cost-based pricing, and
competition-based pricing.
Customer value-based pricing
Setting price based on buyers’ perceptions of value rather than on the seller’s cost
Good value pricing and value-added pricing
Cost-based pricing
Setting prices based on the costs for producing, distributing, and selling the product plus
a fair rate of return for effort and risk.
Competition-based pricing
It involves setting prices based on competitors’ strategies, costs, prices, and market
offerings. Consumers will base their judgments of a product’s value on the prices that
competitors charge for similar products.

2.Price adjustments
Seven price adjustments
Discount
A straight reduction in price on purchases during a stated period of time or on larger
quantities.
Allowance
Promotional money paid by manufacturers to retailers in return for an agreement to
feature the manufacturer’s products in some way.
Segmented pricing
Selling a product or service at two or more prices, where the difference in prices is not
based on differences in costs.
Psychological pricing
Pricing that considers the psychology of prices and not simply the economics; the price is
used to say something about the product.
Promotional pricing
Temporarily pricing products below the list price and sometimes even below cost to
increase short-run sales.
Geographical pricing
Setting prices for customers located in different parts of the country or the world.
Dynamic pricing
Adjusting prices continually to meet the characteristics and needs of individual customers
and situations.
International Pricing
Companies that market their products internationally must decide what prices to charge
in the different countries in which they operate.

Chapter 12

2. Wholesale functions

Selling and promoting: Wholesalers’ sales forces help manufacturers reach many small
customers at a low cost. The wholesaler has more contacts and is often more trusted by
the buyer than the distant manufacturer.
Buying and assortment building: Wholesalers can select items and build assortments
needed by their customers, thereby saving much work.
Bulk breaking: Wholesalers save their customers money by buying in carload lots and
breaking bulk (breaking large lots into small quantities).
Warehousing: Wholesalers hold inventories, thereby reducing the inventory costs and
risks of suppliers and customers.
Transportation: Wholesalers can provide quicker delivery to buyers because they are
closer to buyers than are producers.
Financing: Wholesalers finance their customers by giving credit, and they finance their
suppliers by ordering early and paying bills on time.
Risk bearing: Wholesalers absorb risk by taking title and bearing the cost of theft,
damage, spoilage, and obsolescence.
Market information: Wholesalers give information to suppliers and customers about
competitors, new products, and price developments.
Management services and advice: Wholesalers often help retailers train their salesclerks,
improve store layouts and displays, and set up accounting and inventory control systems.

1. Trends in retailing
Experimental retail
In store mobile and wearable technology
Shoppable media
Increasing use of gift cards
Shopper marketing
Online retail
Social media
New retail forms
Green retailing
International retailing

3. Type of retailers
a. Amount of Service: Different types of customers and products require different
amounts of service. To meet these varying service needs, retailers may offer one of three
service levels: self-service, limited service, and full service.
b. Product line: Another way to define retailers is by the breadth and depth of their
product lines.
Ex: Specialty stores, Supermarkets, departmental stores
c. Relative Prices Retailers can also be classified according to the prices they charge.
Most retailers charge regular prices and offer normal-quality goods and customer service.
Ex: independents, factory outlets, and warehouse clubs
d. Organizational Approach: Although many retail stores are independently owned,
others band together under some form of corporate or contractual organization. Corporate
chains, voluntary chains, retailer cooperatives, and franchise organizations.

Chapter 13
1. Promotion mix
A company’s total promotion mix—also called its marketing communications
The five major promotion tools are defined as follows
Advertising: Any paid form of nonpersonal presentation and promotion of ideas, goods,
or services by an identified sponsor.
Sales promotion: Short-term incentives to encourage the purchase or sale of a product or
service.
Personal selling: Personal customer interactions by the firm’s sales force for the purpose
of making sales and building customer relationships.
Public relations: Building good relations with the company’s various publics by obtaining
favorable publicity, building up a good corporate image, and handling or heading off
unfavorable rumors, stories, and events.
Direct and digital marketing: Engaging directly with carefully targeted individual
consumers and customer communities to both obtain an immediate response and build
lasting customer relationships.

3. Functions of PR
PR departments may perform any or all of the following functions
Press relations: Creating and placing newsworthy information in the news media to
attract attention to a person, product, or service.
Product publicity: Publicizing specific products.
Public affairs: Building and maintaining national or local community relationships.
Lobbying: Building and maintaining relationships with legislators and government
officials to influence legislation and regulation.
Investor relations: Maintaining relationships with shareholders and others in the financial
community.
Development: Working with donors or members of nonprofit organizations to gain
financial or volunteer support.
Public relations is used to promote products, people, places, ideas, activities,
organizations, and even nations. Companies use PR to build good relations with
consumers, investors, the media, and their communities.

2.Adversting methods

Marketing management must make four important decisions when developing an

advertising program setting advertising objectives, setting the advertising budget,
developing advertising strategy and evaluating advertising campaigns.
Advertising objective
A specific communication task to be accomplished with a specific target audience during
a specific period of time.
Advertising budget
The dollars and other resources allocated to a product or a company advertising program.
Four methods in budget
a. Affordable method
Setting the promotion budget at the level management thinks the company can afford.
b.Percentage-of-sales method
Setting the promotion budget at a certain percentage of current or forecasted sales or as a
percentage of the unit sales price.
c.Competitive-parity method
Setting the promotion budget to match competitors’ outlays.
d.Objective-and-task method
Developing the promotion budget by (1) defining specific objectives, (2)determining the
tasks that must be performed to achieve these objectives, and (3) estimating the costs of
performing these tasks. The sum of these costs is the proposed promotion
budget.
Advertising strategy
The strategy by which the company accomplishes its advertising objectives. It consists of
two major elements: creating advertising messages and selecting advertising media.
Execution style
The approach, style, tone, words, and format used for executing an advertising message.

Chapter 14

Consumer promotion tools

Consumer promotions include a wide range of tools—from samples, coupons, refunds,
premiums, and point-of- purchase displays to contests, sweepstakes, and event
sponsorships.
Samples are offers of a trial amount of a product.
Sampling is the most effective—but most
expensive—way to introduce a new product or create new excitement for an existing one
Coupons are certificates that save buyers money when they purchase specified products.
Marketers are also cultivating new outlets for distributing coupons, such as supermarket
shelf dispensers, electronic point-of-sale coupon printers, and online and mobile coupon
programs.
Rebates (or cash refunds) are like coupons except that the price reduction occurs after the
purchase rather than at the retail outlet. The customer sends proof of purchase to the
manufacturer, which then refunds part of the purchase price by mail.
Price packs (also called cents-off deals) offer consumers savings off the regular price of a
product. The producer marks the reduced prices directly on the label or package
Premiums are goods offered either free or at low cost as an incentive to buy a product,
ranging from toys included with kids’ products to phone cards and DVDs. A premium
may come inside the package (in-pack), outside the package (on-pack), or through the
mail.
Advertising specialties, also called promotional products, are useful articles imprinted
with an advertiser’s name, logo, or message that are given as gifts to consumers. Typical
items include T-shirts and other apparel, pens, coffee mugs, calendars, key rings, mouse
pads, tote bags, coolers, golf balls, and caps
Point-of-purchase (POP) promotions include displays and demonstrations that take place
at the point of sale. Think of your last visit to your local convenience store, grocery store,
liquor store, or drugstore.
Contests, sweepstakes, and games give consumers the chance to win something, such as
cash, trips, or goods, by luck or through extra effort.

Chapter 15

3.Traditional direct marketing

Direct-mail marketing
Marketing that occurs by sending an offer, announcement, reminder, or other item
directly to a person at a particular address.
Pros:
Largest direct marketing medium
Well-suited for one-to-one communication
Cons:
In decline due to newer digital forms
Often perceived as “junk mail”
Catalogue marketing
Direct marketing through print, video, or digital catalogues that are mailed to select
customers, made available in stores, or presented online.
Pros:
Print catalogs drive web traffic and create connections
Easily convertible to online versions
Cons:
High cost of print both
financially and environmentally
Telemarketing
Using the telephone to sell directly to customers.
Pros:
Still widely used due to success rate
Marketers use outbound and inbound calls
Outbound: Sell directly to consumer
Inbound: Toll-free ordering or order faxing
Cons:
Do-not-call legislation
Perception of intrusion
Direct-response television (DRTV)marketing
Direct marketing via television, including direct-response television advertising (or
infomercials) and interactive television (iTV) advertising.
Pros:
Seize advantage of visual medium
Usually broadcast when audience is captive
Cons:
Perception of “cheapening” the brand/product
Often a cluttered promotional space
Kiosk Marketing
As consumers become more and more comfortable with digital and touchscreen
technologies, many companies are placing information and ordering machines—called
kiosks

2.Three forms of direct digital marketing

1.Online marketing
Marketing via the Internet using company websites, online ads and promotions, email,
online video, and blogs.
Marketing website
A site that interacts with consumers to move them closer to a direct purchase or other
marketing outcome.
Online advertising
Advertising that appears while consumers are browsing online, including display ads,
search-related ads, online classifieds, and other forms.
Email marketing
Sending highly targeted, highly personalized, relationship-building marketing messages
via email.
Viral marketing
The digital version of word-of-mouth marketing: videos, ads, and other marketing
content that is so infectious that customers will seek it out or pass it along to friends.
Blogs
Online journals where people and companies post their thoughts and other content,
usually related to narrowly defined topics.
2.Social media
Independent and commercial online communities where people congregate, socialize, and
exchange views and information.
3. Mobile marketing
Marketing messages, promotions, and other content delivered to on-the-go consumers
through mobile phones, smartphones, tablets, and other mobile devices.