MRKTNG 3000 1nd EditionExam #3 Study Guide Lectures: 12-15Lecture 12 (April 2)- Pricing strategy- new products:Penetration pricing- set price low, immediate market sharePrice skimming- set price high, quick/large profitsConditions favoring new product pricing strategies:Penetration:Price elasticity- highStandards issue- presentTechnological change- LowEntry barriers- LowSkimming:PE- LowSI- AbsentTC- HighEB- High Pricing strategy- existing products:Perishability/ distinctiveness/ nature of competition based on product characteristics Pricing methods:-Mark-up pricing: unit variable cost+ fixed costs/unit sales= unit cost Markup pricing calculation (based on the selling price): unit cost desired return on sales= markup price -Perceived value pricing-Going rate (competitive) pricing Break even analysis:Break even point- that quantity of output at which total revenue equals total costs, assuming a certain selling price -Equals total fixed costs/price-unit variable costs Promotional pricing:-Loss-leader -Special-event-Cash rebates-Low-interest financing-Longer payment terms-Warranties and service contracts-Psychological discounting) deceptive reference prices)Discriminatory pricing to consumers:-Legal as long as it doesn’t hinder competition-Price discrimination: Texas Pharmaceuticals Top 5 drugs- 131% higher-Synthroid- 1597% higher-Should it be legal?For it to work:-Market must be segmentable-No selling across segments-Servicing segments cannot be greater that profits gained-Must not breed resentment or ill will -Must be legalLecture 13 (April 7)- Integrated marketing communications:-Personal selling-Sales promotions-Public Relations-Advertising-Concept of designing marketing activities- advertising, personal selling, sales promotion, public relations- to provide a consistent message across all audiences is referred to as integrated marketing communications (IMC)Promotion:Advertising- paid form of nonpersonal communicationPersonal selling- two way, personal communication, most expensive Public relations- communications management that seeks to influence stakeholders Sales promotion- short-term inducement of value to arouse interests (e.g. coupons, samples, contests, etc.)Promotional mix: Target audience- stakeholders other than consumers-Channel members-ConsumersProduct life cycle:1. Introa. Publicity, advertising to stimulate, personal selling to channel members2. Growth a. Advertising differentiation, personal selling to channel members3. Maturity a. Reminder advertising, sales promotion4. Declinea. Very little promotion Stages of buying decision:1. Pre-purchase2. Purchase3. Post-purchase Channel strategies: Push strategy (Target channel members)-Personal selling-Sales promotionPull strategy -Target consumers/end usersLecture 14 (April 9)-Advertising:Major advertising decisions:-Objectives setting, budget decisions, message decisions, media decisions, campaign evaluation Task, Target, Time (advertising objectives)Informative advertising- build primary demandPersuasive advertising- build selective demandComparison advertising- compares one brand to anotherReminder advertising- keeps consumer thinking about a product5 Ms:Mission- sales/communication goalsMoney- Factors to consider:-Stage in the PLC-Market share and consumer base-Competition and clutter-Advertising frequency-Product substitutabilityMessage- Message generation, social responsibility, message execution, message evaluation/selectionMedia- Reach, frequency, Impact, major media types, specific media vehicles, media timing, geographical media allocation Measurement- Communication impact, sales impactLecture 15 (April 14)- Branding:-Name/symbol that identifies a distinct productKeys to enduring brand leadership:-Vision of mass market-Managerial persistence-Financial commitment-Relentless innovation-Asset leverageBrand management challenges:-Brand proliferation-Media fragmentation-More knowledgeable consumersBuilding a brand:-Establish brand identity-Design brand meaning-Elicit brand imagery-Create customer relationships-P&G is the king of brandingProduct-line strength:-Line stretching down market, up market, two-wayOther Product characteristics:Warranty- terms of compensation for product failure-Signal of quality-Good packaging (functional value, attention getting, provides