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110 Cards in this Set
- Front
- Back
Cost leadership
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a firm utilizes its core cost advantages to gain an advantage due to flexibility in pricing strategies as well as its ability to translate cost savings to the bottom line
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Market Share
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percentage of a market a firm has
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Penetration Pricing
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firms objective is to gain as much market share as possible
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Pricing Objectives 1
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Objective: Market share maximization
Strategy: penetration pricing |
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Pricing Objectives 2
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Objective: Market entry at highest initial price
Strategy: price skimming |
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Pricing Objectives 3
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Objective: Profit Maximization
Strategy: Target ROI |
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Pricing Objectives 4
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Objective: Benchmark the competition
Strategy: Competitor-based pricing |
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Pricing objectives 5
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Objective: Communicate position through pricing
Strategy: value pricing |
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Price Skimming
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enters market at a high price, to create a strong price-quality relationship
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Price elasticity of demand
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measure of customers price sensitivity
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Target return on investment
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bottom line profit is established then pricing is based off getting that
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Competitor based pricing
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average your own price with competitors
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Price war
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when a company purposefully undercuts competitors to gain market share
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Stability Pricing
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basically middle ground pricing - not low enough to piss off others, but not high enough to turn off customers
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Value Pricing
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takes into account price and how it compares with perceived value by customers
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Product line pricing
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a pricing approach across a complete line of related products
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Price Points
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different points designed to showcase the different value/benefits in different product lines
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Complimentary Pricing (captive pricing)
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Getting a customer to buy something that requires continue purchases
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Price Bundling
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offering a package deal at reduced price
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Reference Pricing
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shows and compares other prices of other companies or products
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Prestige Pricing
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higher prices perceived as better product
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Odd Pricing
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$1.99 or $1.98
non whole dollar increments |
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Even Pricing
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$2.00, $3.00
whole dollar increments |
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Psychological Pricing
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creating a perception of the product purely through the price
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One-Price Strategy
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price marked on the good is what it usually sells for
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Variable pricing
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allowed to or encouraged to haggle prices
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High/Low Pricing
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offers frequent discounts and sales
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Auction Pricing
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ebay, people bid on product and it goes to highest bidder
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Reverse Auctions
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when sellers bid prices to buyer and customer takes lowest
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cost-plus pricing
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getting to a price by adding standard mark up to prices associated with the product
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Markup on cost
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the addition to the price of a product after costs have been considered
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Markup on sales price
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using the sales price as a basis for calculating the markup percentage
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Average cost pricing
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identifying all costs associated with product to come up with what the average cost of one unit will be
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Target return Pricing
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start with a goal and make a price you determine will get you there,
5% of investment |
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Discounts
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deductions in price
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Allowances
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a remittance of monies to customer after purchase of product
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cash discounts
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a discount to elicit quicker payment
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trade discounts
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like trading in a used car to take off a new one
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quantity discounts
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buying in bulk
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seasonal discounts
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like snow jackets off at the end of the season
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Promotional allowances
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sales started by manufacturer and carried out by retailers
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FOB pricing
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free on board - determination of title transfer and shipping payment based on shipping location
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Uniform Delivered Pricing
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when the shipping charge is the same no matter where its shipped too
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Zone Pricing
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when shippers set up geographic pricing zones based off distance
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Just noticeable Difference
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the amount of price increase before a customer notices or cares
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Price Fixing
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when companies collude to set prices at a mutually beneficial high level
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Price discrimination
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offering different prices to different customers
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Deceptive Pricing
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knowingly stating prices in a manner that gives a false impression to customers
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Bait and switch
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when a seller advertises a low price but has no intent to actually make the lower priced item available for sale
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Fair Trade Laws
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allows manufactures to set artificially high prices by limiting ability of retailers to sell low.
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minimum markup laws
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forces retailers to add a minimum amount of markup to products
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Loss leader products
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products sold at a loss to attract people into store
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promotion
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various forms of communication to inform, persuade, or remind
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promotion mix: exhibit 17.1 pg 465
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advertising, sales promotion, public relations, personal selling, direct marketing
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promotional campaign
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campaigns aimed at increasing awareness for a particular product or line
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integrated marketing communications
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a strategic approach to targeting customers in ways that clear, concise, and consistent
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push strategy
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stimulating demand within the channel of distribution
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pull strategy
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stimulating demand for an offering directly from the end user
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internal marketing
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treating employees as customers and satisfying thier needs
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sender
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the source of a message
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corporate identity
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customers perception of a corporation that influences their attitudes and responses toward products or services offered by it
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encoding process
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the process in communication in which the sender translates an idea to a understandable message ready to be understoo
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message transmission
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putting message into a "vessel" so that it can make its way to the receiver
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channel or medium
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the conduit by which a encoded message travels - text
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decoding process
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understanding the message
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selective perception
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different meanings assigned to the same message by different receivers
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reciever
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the receiver of a message
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feedback loop
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two way communication in which a receiver can communicate reactions back to the sender
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AIDA model
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hierarchy of effects in marketing,
1. attention 2. interest 3. desire 4. action |
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goals for promotion:
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1. Inform
2. persuade 3. remind |
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promotional appeal
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the connection an offering establishes with customers. includes rational appeals , emotional appeals, and moral appeals
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rational appeal
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centers on the benefits the product can offer
benefits |
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emotional appeal
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plays on human nature to appeal to customers
feelings |
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moral appeal
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strikes a chord with a customers sense of right and wrong
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objective-and-task method
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method of promotional budgeting that..
takes an investment approach in that goals are set and then promotional dollars are set aside to reach them |
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percent-of-sales method
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method of promotional budgeting that..
allocates funding for promotional activities to certain products as a function of their forecasted sales revenues |
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comparative-parity method
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method of promotional budgeting that..
looking at how much competitors are spending on promotion to see how much they should |
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all-you-can-afford method
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method of promotional budgeting that..
using whatever is left over for promotion after everything that needs to get paid has |
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advertising wear out
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when customers become bored with a advertising campaign
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advertising response function
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a point where returns begin to diminish
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institutional marketing
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marketing aspects beyond simply the product, and focusing on aspects of the company too
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product advertising
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designed to increase sales of a specific product
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pioneering advertising
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adveritising typically during a growth or introductory period for a product
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competitive advertising
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attempts to shift emotional appeal, persuasion, and providing information
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comparative advertising
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when two or more brands are directly compared
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reach
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amount of people reached in a certain time period
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frequency
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average number of times a customer is exposed to message
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advertising execution
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the way an advertisement communicates message and information
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clutter
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competing messages
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trade show
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sponsored event designed to showcase information and offerings
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cooperative advertising and promotion
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when a manufacture provides special incentive money to channel members for certain promotional performance
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allowance
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a remittance of monies to the consumer after the purchase of the product
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publicity
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a unpaid form of communication, usually through news outlets
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buzz
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word of mouth communications generated about a brand
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event sponsorships
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having your brand or company associated with events
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crisis management
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a planned, coordinated approach for disseminating information during times of emergency
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pg 508- 514
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read
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outsourcing the sales force
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using independent agents to sell a product
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transaction cost analysis
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a tool used to measure using different sales agents
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workload method
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helps determine the correct size for a companys sales force based on the idea that everybody should have an equal amount of work
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extrinsic reward
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rewards given to others besides the the salesperson, like managers and customers
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intrinsic reward
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rewards given to salesperson
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objective measures
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statistics the sales manager gathers form the firms internal data |
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subjective measures
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personal evaluations by somebody close to the process
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banner ads
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small boxes containing graphics and text have a hyperlink embedded
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search related ads
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greatest growth over last couple years, companies pay
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interstitials
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interesting ads that move across the page
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output measures
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show the results of the efforts expended by the salesperson
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input measures
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focus on the efforts of the salesperson during the sales process
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direct marketing
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interactive marketing system, using one or more advertising media. internet is direct marketing
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