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Questions and Answers
What is the primary purpose of a value delivery network?
What is the primary purpose of a value delivery network?
A marketing chain refers to the stages a product goes through before reaching the retailer.
A marketing chain refers to the stages a product goes through before reaching the retailer.
False
Name a characteristic of multichannel marketing.
Name a characteristic of multichannel marketing.
Reaches customers across multiple platforms and channels.
An example of a direct marketing channel is selling products on a _______.
An example of a direct marketing channel is selling products on a _______.
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Match the following types of intermediaries with their functions:
Match the following types of intermediaries with their functions:
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Which type of intermediary helps in the logistical function of the supply chain?
Which type of intermediary helps in the logistical function of the supply chain?
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Price escalation occurs when the price of a product is lowered at each stage of distribution.
Price escalation occurs when the price of a product is lowered at each stage of distribution.
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What role does facilitating intermediaries play in the supply chain?
What role does facilitating intermediaries play in the supply chain?
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Which of the following is not a type of retailer?
Which of the following is not a type of retailer?
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Dynamic pricing allows prices to remain constant regardless of market demand.
Dynamic pricing allows prices to remain constant regardless of market demand.
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What is the formula for calculating Total Costs?
What is the formula for calculating Total Costs?
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___ pricing is initially offered at a low price to gain customers by undercutting competitors.
___ pricing is initially offered at a low price to gain customers by undercutting competitors.
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Match the following pricing strategies with their descriptions:
Match the following pricing strategies with their descriptions:
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Which of the following best describes omni-channel retailing?
Which of the following best describes omni-channel retailing?
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Full service retailers only offer self-service options to customers.
Full service retailers only offer self-service options to customers.
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What is the Break Even Point (BEP) formula?
What is the Break Even Point (BEP) formula?
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Which pricing method involves adding a specific amount to the total unit cost to set the price?
Which pricing method involves adding a specific amount to the total unit cost to set the price?
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Competition-based pricing relies on the perceived value that customers assign to the product.
Competition-based pricing relies on the perceived value that customers assign to the product.
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What is price elasticity?
What is price elasticity?
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A pricing strategy that sets a high price to reflect high quality or exclusiveness is known as __________ pricing.
A pricing strategy that sets a high price to reflect high quality or exclusiveness is known as __________ pricing.
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What type of pricing would likely be used for essential goods where demand remains constant despite price changes?
What type of pricing would likely be used for essential goods where demand remains constant despite price changes?
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Inventory turnover measures how often inventory is sold and replaced within a time period.
Inventory turnover measures how often inventory is sold and replaced within a time period.
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The formula for calculating Inventory Turnover is __________.
The formula for calculating Inventory Turnover is __________.
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Study Notes
Marketing Channels
- Value Delivery Network encompasses all parties involved in the production, distribution, and service delivery of a product, including all direct participants.
- Supply Chain is a network of companies and individuals involved in creating and delivering a product to the customer.
- Marketing Chain outlines the stages a product goes through from production to consumption (production, wholesale/distribution, retailing, promotion, and consumption)
- Direct marketing involves selling directly to consumers, e.g., Fenty Beauty sells directly on their website.
- Indirect marketing employs intermediaries like wholesalers and retailers.
- Multichannel marketing uses online and offline platforms to reach customers, maintaining a consistent presence.
- Intermediaries in indirect marketing facilitate sales by acting as a third-party link between producers and consumers. For example, Sephora acts as an intermediary for Fenty Beauty and Rare Beauty. Their functions include transactional (buying and selling), logistical (gathering, storing, sorting); and facilitating (financing, grading, marketing information/research)
- Distributors, wholesalers, dealers, and retailers facilitate distribution: Dealers are intermediaries connecting manufacturers, wholesalers, distributors to consumers. Wholesalers/distributors manage bulk distribution to retailers. Retailers sell directly to consumers.
Channel Mark-up & Price Escalation
- Channel Mark-up is the added price at each stage of a product’s distribution chain, covering business-related costs.
Retailing & Wholesaling
- Retailers include department stores, supermarkets, discount stores, convenience stores, specialty stores, and e-commerce websites.
- Retail landscapes are changing because of increased online sales that have led many brick-and-mortar stores to close or adopt multichannel approaches.
- Covid accelerated these changes.
Pricing Concepts & Strategies
- List Price is the base price without discounts.
- Dynamic Pricing adjusts prices based on demand, competition, or factors.
- Penetration Pricing involves initially offering products at a low price to capture significant market share.
- Skimming Pricing sets the highest initial price for a new product before lowering it over time, targeting customers who initially want the product.
- Total Costs are the sum of fixed and variable costs.
- Fixed Costs remain constant regardless of production levels.
- Variable Costs depend on production.
- Unit Contribution is the difference between the price of a product and its variable cost per unit.
- Break-Even Analysis calculates the number of units needed to sell to cover all costs.
- Standard Markup Pricing adds a fixed percentage to the cost of a product to determine the price.
- Cost-plus pricing adds a fixed amount to the cost of a product.
- Cost-plus percentage-of-cost pricing adds a percentage of the cost to the total unit cost.
- Customer value-based pricing determines price based on customers' perceived value of the product.
- Cost-based pricing sets the price based on the cost of production.
- Competition-based pricing determines price based on competitor prices.
Pricing Strategies (Continued)
- Psychological pricing strategies can influence consumers (e.g., odd-even pricing like $9.99).
- Premium pricing sets high prices to suggest high quality.
- Bundle pricing groups multiple products together at a lower price.
Marketing Metrics
- Stock/Inventory turnover measures how efficiently a company uses its inventory.
- Inventory Turnover = Cost of Goods Sold/Average Inventory
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Description
Explore the various marketing channels that facilitate product delivery from production to consumption. This quiz delves into concepts such as the value delivery network, supply chains, direct and indirect marketing, and multichannel strategies. Test your understanding of these essential components of marketing!
