promotion
All the activities that communicate the value of a product and persuade customers to buy it.
promotion mix
A subset of the marketing mix that includes four main elements of marketing communication: advertising, sales promotion, personal selling, and public relations.
integrated marketing communications (IMC)
A promotional strategy that involves coordinating the various promotion mix elements to provide consumers with a clear and consistent message about a firm's products.
advertising
Nonpersonal promotional communication about goods, services, or ideas that is paid for by the firm identified in the communication.
advertising campaign
A collection of coordinated advertisements that share a single theme.
informative advertising
A type of advertising that attempts to develop initial demand for a product.
persuasive advertising
A type of advertising that attempts to increase demand for an existing product.
reminder advertising
A type of advertising that seeks to keep the product before the public in an effort to reinforce previous promotional activity.
direct marketing
Advertising that communicates directly with consumers and organizations in an effort to provoke a response.
cost-per-thousand impressions (CPM)
What the firm pays for a thousand views of its ad.
cost per click (CPC)
The amount the firm pays each time a customer clicks on an ad.
click-through rate (CTR)
A ratio showing how often people who see an ad end up clicking on it.
narrowcasting
The dissemination of information to a fairly small, select audience that is defined by its shared values, preferences, or demographic attributes.
product placement
An advertising technique in which a company promotes its products through appearances on television shows, movies, or other media.
mobile advertising
A form of advertising that is communicated to the consumer via a handheld device.
sales promotion
A set of nonpersonal communication tools designed to stimulate quicker and more frequent purchases of a product.
coupons
Documents that entitle the customers who carry them to a discount on a product.
rebates
Sales promotions that allow consumers to recoup a specified amount of money after making a single purchase.
contests
Sales promotions in which consumers compete against one another and must demonstrate skill to win.
sweepstakes
Sales promotions based on chance such that entry is the only requirement to win.
loyalty programs
Sales promotions that allow consumers to accumulate points or other benefits for doing business with the same company.
trade sales promotion
Sales promotions directed to B2B firms, including wholesalers, retailers, and distributors, rather than individual consumers.
allowances
Trade promotions that typically involve paying retailers for financial losses associated with consumer sales promotions or reimbursing a retailer for an in-store or local expense to promote a specific product.
personal selling
The two-way flow of communication between a salesperson and a customer that is paid for by the firm and seeks to influence the customer's purchase decision.
relationship selling
Building a trusting relationship with a customer over a long period of time.
prospecting
The search for potential customers-those who need or want a product and fit into a firm's target market.
qualifying
A part of the personal-selling process that involves identifying which potential customers within the firm's target market have not only a desire for the product but also the authority to purchase it and the resources to pay for it.
preapproach
A part of the personal-selling process that involves identifying key decision makers, reviewing account histories, identifying product needs, and preparing sales presentations.
cold selling
The process of approaching unknown prospective customers or clients.
approach
A part of the personal-selling process that involves meeting the prospect and learning more about his or her needs and wants.
sales presentation
A forum to convey the organization's marketing message to the prospect.
objections
The concerns or reasons customers offer for not buying a product.
closing
The point at which the salesperson asks the prospect for the sale.
public relations
Nonpersonal communication focused on promoting positive relations between a firm and its stakeholders.
publicity
Disseminating unpaid news items through some form of media (e.g., television story, newspaper article, etc.) to gain attention or support.
affordable method
A promotion mix budgeting strategy in which firms set their promotion budget based on what they believe they can afford.
percentage-of-sales method
A promotion mix budgeting strategy in which firms allocate a specific percentage of a period's total sales to the promotional budget for that period.
objective-and-task method
A promotion mix budgeting strategy in which a firm defines specific objectives, determines the tasks required to achieve those objectives, and then estimates how much each task will cost.
supply chain
A set of three or more companies directly linked by one or more of the uptream and downstream flows of products, services, finances, and information from a source to a customer.
distribution channels (marketing channels)
Intermediaries-wholesalers, distributors, and retailers-through which the flow of products travels.
supply chain orientation
A management philosophy that guides the actions of company members toward the goal of actively managing the upstream and downstream flows of goods, services, finances, and information across the supply chain.
supply chain management
The actions the firm takes to coordinate the various flows within a supply chain.
inventory carrying costs
The cost required to make or buy a product, including the risk of obsolescence, taxes, insurance, and warehousing space used to store the goods.
push strategy
A supply chain strategy in which a company builds goods based on a sales forecast, puts those goods into storage, and waits for a customer to order the product.
pull strategy
A supply chain strategy in which customer orders drive manufacturing and distribution operations.
push-pull strategy
A supply chain strategy in which the initial stages of the supply chain operate on a push system, but completion of the product is based on a pull system.
logistics
The part of supply chain management that plans, implements, and controls the flow of goods, services, and information between the point of origin and the final customer.
enterprise resource planning (ERP) systems
Data management systems that integrate information across all the departments of an organization.
just-in-time (JIT)
A manufacturing process that seeks to make products based on customer orders rather than in anticipation of orders and to receive components from suppliers only when they are needed for production.
cyclical inventory
Inventory a firm needs to meet average demand.
pipeline inventory
Inventory that is in transit between suppliers and customers.
anticipative stock
Inventory that is produced or purchased when a company expects something to occur in the future that will negatively affect stock availability.
seasonal stock
The goods a firm sells only at certain times of the year.
obsolete inventory
Inventory that can no longer be sold because the product has expired, been redesigned, was over-ordered, or is at the end of its product life.
stockout
A situation in which a company does not have enough inventory available to fill an order.
inventory turns
The number of times a firm's entire inventory is sold and replaced; calculated by dividing the cost of goods sold by the company's average inventory.
days of supply
An estimate of how many days the firm's current inventory will last; calculated by dividing the inventory on hand by the average daily usage or sales.
purchase order
A legal obligation to buy a certain amount of a product at a certain price from a supplier to be delivered at a specified date.
reciprocity
Purchasing goods and services from suppliers only if they buy from the purchasing manager's company.
personal buying
When a purchasing manager buys items for the personal use of employees rather than for business use.
materials management
The inbound movement and storage of materials in preparation for those materials to enter and flow through the manufacturing process.
put-away
Moving goods to their temporary or semipermanent storage location and updating inventory records.
picking
Retrieving materials from storage and bringing them to manufacturing to fulfill a production order, or retrieving finished goods from storage and preparing them for shipment to fulfill a customer order.
distribution center (DC)
A type of warehouse used specifically to store and ship finished goods to customers.
production accumulation
Receiving goods from various suppliers, storing the goods until they're ordered by a customer or other company-owned facility, and consolidating orders to achieve transportation economics of scale.
product sortation
Gathering goods with similar characteristis in one area of the distribution center to facilitate proper inventory controls and effectively provide customer service.
product allocation
Picking available goods to fill customer orders.
product assortment
Mixing goods coming from multiple suppliers into outgoing orders so that each order includes a variety of goods rather than just one type of good.
common carriers
For-hire truck companies that sell their services to any business.
contract carriers
For-hire truck companies that move goods exclusively for certain customers.
intermodal transportation
Using several type of transportation for the same shipment.
container
Steel boxes used to transport goods, usually internationally.
core carrier
A strategy in which a firm selects a small number of carriers as opposed to using a large number of different carriers.
price
The amount of something-money, time, or effort-that a buyer exchanges with a seller to obtain a product.
revenue
The result of the price charged to customers multiplied by the number of units sold.
profits
Revenue minus total costs.
profit maximization (price skimming)
A pricing strategy that involves setting a relatively high price for a period of time after the product launches.
volume maximization (penetration pricing)
A pricing strategy that involves setting prices low to encourage a greater volume of purchases.
survival pricing
A pricing strategy that involves lowering prices to the point at which revenue just covers costs, allowing the firm to endure during a difficult time.
marginal revenue
The change in total revenue that results from selling one additional unit of a product.
marginal cost
The change in total cost that results from a producing one addition unit of product.
price sensitivity
The degree to which the price of a product affects consumers' purchasing behavior.
price elasticity of demand
A measure of price sensitivity that gives the percentage change in quantity demanded in response to a percentage change in price (holding constant all the other determinants of demand, such as income).
inelastic demand
A situation in which a specific change in price causes only a small change in the amount purchased.
elastic demand
A scenario in which demand changes significantly due to a small change in price.
fixed costs
Costs that remain constant and do not vary based on the number of units produced or sold.
variable costs
Costs that vary depending on the number of units produced or sold.
break-even analysis
The process of calculating the break-even point, which equals the sales volume needed to achieve a profit of zero.
break-even point
The point at which the costs of producing a product equal the revenue made from selling the product.
reference prices
The prices that consumers consider reasonable and fair for a product.
underpricing
Charging someone less than they are willing to pay.
unbundling
Separating out the individual goods, services, or ideas that make up a product and pricing each one individually.
escalator clause
A section in a contract that ensures that providers of goods and services do not encounter unreasonable financial hardship as a result of uncontrollable increases in the costs of or decreases in the availability of something required to deliver products t
markup pricing
A pricing method in which a certain amount is added to the cost of the product to set the final price.
profit margin
The amount a product sells for above the total cost of the product itself.
odd pricing
A pricing tactic in which a firm prices products a few cents below the next dollar amount.
prestige pricing
A pricing strategy that involves pricing a product higher than competitors to signal that it is of a higher quality.
seasonal discounts
Price reduction given to customers purchasing goods or services out of season.
price bundling
A strategy in which two or more products are packaged together and sold at a single price.
dynamic pricing
A pricing strategy that involves constantly updating prices to reflect changes in supply, demand, or market conditions.
yield management
A strategy for maximizing revenue even when a firm has a fixed amount of something (goods, services, or capacity)
gray market
The sale of branded products through legal but unauthorized distribution channels.
tariffs
Taxes on imports and exports between countries.
dumping
A protectionist strategy in which a company sells its exports to another country at a lower price than it sells the same product in its domestic market.
price discrimination
The practice of charging different customers different prices for the same product.
price fixing
When two or more companies collude to set a product's price.
predatory pricing
The practice of first setting prices low with the intention of pushing competitors out of the market or keeping new competitors from entering the market and then raising prices to normal levels.
deceptive pricing
An illegal practice that involves intentionally misleading customers with price promotions.
Robinson-Patman Act
A law passed in 1936 that required sellers to charge everyone the same price for a product.
Federal Trade Commission Act (FTCA)
A law passed in 1914 that established the Federal Trade Commission and sought to prevent practices that may cause injury to customers, that cannot be reasonably avoided by customers, and that cannot be justified by other outcomes that may benefit the cons
Wheeler-Lea Act
An amendment to the Federal Trade Commission Act passed in 1938 that removed the burden of providing that unfair and deceptive practices had to injure competition.
brand
The name, term, symbol, design, or any combination of these that identifies and differentiates a firm's products.
brand loyalty
When a consumer displays a steadfast allegiance to a brand by repeatedly purchasing it.
brand recognition
The degree to which customers can identify the brand under a variety of circumstances.
brand marks
The elements of a brand not expressed in words that a consumer instantly recognizes, such as a symbol, color, or design.
brand image
The unique set of associations target customers or stakeholders make with a brand.
brand equity
The value the firm derives from consumers' positive perception of its products.
brand extension
The process of broadening the use of an organization's current brand to include new products.
cannibalization
When new products take sales away from the firm's existing products rather than generating additional revenues or profits through new sales.
brand revitalization (rebranding)
A strategy to recapture lost sources of brand equity and identify and establish new sources of brand equity.
co-branding
A strategy in which two or more companies issue a single product in an effort to capitalize on the equity of each company's brand.
private label brands
Products developed by a retailer and sold only by that specific retailer.
manufacturer brands
Brands that are managed and owned by the manufacturer rather than a reseller.
packaging
All of the activities of designing and producing the container for a product.
Klout score
A measure, on a scale of 1 to 100, of a user's influence based on his or her ability to drive other people to act on social media sites.
global brand
A brand that is marketed under the same name in multiple countries.