MARKETING FINAL 7 to 13 which is Lecture 14 until the end of the class and from the middle of Chapter 11 page 242 until the end of Chapter 20 page 543 The marketing mix Promotion Product Place Price Product Line I think there is a world market for maybe five computers Thomas Watson chairman of IBM 1943 A group of closely related products that satisfy 1 A class of needs 2 Are used together 3 Are sold to the same customer group 4 Are distributed through the same type of outlet 5 Fall within a given price Product Life Cycle Introduction refers to a concept that describes the stages of a product goes through in the marketplace See the firm attempting to create market development with its marketing strategy Find a higher cost per unit of production Maturity Growth Focus on our advertising on developing brand loyalty Find costs declining Industry profits reach their peak Focus on market penetration to achieve both brand preference and intensive distribution for our product Find firm focused on an overall strategy of market penetration Decline Find decreasing competition Convenience goods be sure to make the product widely available make sure it is visible in the store and use extensive advertising Slotting fee a payment a manufacturer makes to place a new product of a retailer s shelf New Product process the seven stages an organization goes through to identify business opportunities and convert them into salable products or services Nondurable good an item consumed in one or few uses Durable good products that usually last over many uses such as cars and appliances Goods can be divided into durable goods and nondurable goods Concept test external evaluation with consumers that consist of preliminary testing with consumers of the new product idea rather than an actual product Specialty Product consumer product that is purchased infrequently and takes an extensive amount of time to make the purchase decision 8 Danger of Family Branding if a product has a problem it can affect the image of all the company s brands Experience properties consumers evaluate during the service purchase Free Samples most popular means to gain consumer trial Most consumers consider a sample to be the best way to evaluate a new product Building brand equity 1 developing positive brand awareness 2 establishing a brand s meaning in the minds of consumers 3 eliciting the proper consumer responses to a brand s identity and meaning and 4 creating a consumer brand connection Five basic criteria for selecting a brand name 1 suggest product benefits 2 be memorable distinctive and positive 3 fit the company or product image 4 have no legal or regulatory restrictions and 5 be simple and emotional Search properties property of services that consumers can evaluate before the purchase Limited coverage warranties that specifically state the bounds of coverage and more importantly areas of no coverage Four general branding strategies 1 multiproduct branding 2 multibranding 3 private branding and 4 mixed branding Private branding private labeling or reseller branding Product modification a marketing strategy that alters a products characteristic such as its quality performance or appearance to increase its value and sales to customers Product class the entire product category or industry Gap analysis evaluations put on the bill at restaurants Search properties characteristics of tangible goods such as color size and style Yield management price pricing that assumes that different customers are willing to pay a different price for using the same amount of resources Profit equation profit total revenue total cost 9 Price approaches Price lining consumers may buy up to a higher priced more feature rich model with is also more profitable for the marketer Setting of prices for all items in a product line to cover the total cost and produce a profit for the complete line not necessarily each item Importance of price it is the only thing that produces revenues or profits Price constraints factors that limit the range of prices a firm may set Bundle pricing provides a lower total cost to buyers and lower marketing costs to sellers Mark up on selling price markup dollar amount selling price x 100 Slide down the demand curve pricing starts with a price skimming approach and then reducing price as our costs decline Price per unit represents the vertical axis of a demand Four types of competitive market Pure monopoly monopolistic comp oligopoly and pure comp Experience curve pricing the market leader firms who are the first to get the product to the market 10 Efficient consumer response system refers to an inventory management system that is designed to reduce the retailers lead time for receiving merchandise Forms of influence 1 economic 2 expertise 3 identification with a particular channel member and 4 legitimate right of one channel member to direct the behavior of other members Distributions main role get the product to its intended target market Uniform delivered pricing example cruise lines paying customers air fare to the point of cruise Independent retailers scribbles coffee shop involves a single store that is not affiliated with others Application of information technology required for supply chain management Allows companies to operate their systems effectively
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