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Introduction - Growth - Maturity - Decline
pg.271 |
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| the desire for the product class rather than for a specific brand |
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| the preference for a specific brand |
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| Product introduced, sales grow slowly, profit is minimal, skimming or penetration, trial(initial purchase by consumer) |
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| rapid increase in sales, advertising shifts to stimulate selective demand, increase repeat purchasers, changes appear in the product |
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| slowing of industry sales, marginal competitors begin to leave market, marketing directed to holding share |
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| deletion or dropping of the product from the line, harvesting or when a company retains the product but reduces marketing costs |
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| refers to the entire product or category or industry |
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| pertains to variations within the product class. ex cd's mp3s cassettes etc |
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| 5 forms of product adapters |
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| innovators, early adopters, early majority, late majority, and laggards |
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| manages the marketing efforts for a close-knit family of products or brands |
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| altering a characteristic to add value to a product |
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| involves adding value to the product or line through additional features or higher quality materials. |
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| reducing features. Such as airlines increasing seats but reducing leg room. |
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| a set of human characteristics associated with a company |
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| the added value a brand name adds to a product |
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| a company uses one brand name for all its product in its product class |
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| giving each product a distint brand name |
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| manufacturing products but selling under a wholesaler or retailer |
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| Markets under different names for itself and the retailer or wholesaler |
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| the money or other considerations exchanged for the ownership or use of a product or service. |
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| practice of exchanging products or services for other products and services |
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| practice of simultaneously increasing product and service benefits while maintaining or decreasing price |
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| Profit = Total Revenue - Total Cost |
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Pricing
Step 1
Identify pricing objectives and constraints |
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Definition
specifying the role of price in an organizations marketing and strategic plans.
Return on Investment
Return on Assets
SALES
MARKET SHARE
UNIT VOLUME |
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Pricing
Step 2
Estimate Demand and Revenue |
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Definition
Use the demand curve
Price Elasticity = % change in quantity / % change in price |
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Pricing
Step 3
Determine Cost, Volume, and Profit Relationships |
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Definition
| Marginal Analysis - continuing concise tradeoff of incremental costs against incremental revenues. |
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Fixed Cost / (Unit Price - Unit Variable Cost)
FC / (P - UVC) |
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Pricing
Step 4
Select an approximate price level |
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Definition
| Demand Oriented, Cost Oriented, Profit Oriented and Competition Oriented approaches |
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Term
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Definition
| Skimming, Penetration, Prestige, Price Lining(based on the rest of the line), Odd-Even($500 or 11.99), target pricing, bundle pricing(two or more products in a single package), yield management (different price levels to maximize profit like airline seats) |
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Definition
| Standard Markup Pricing(adding a fixed percentage to the price of all the items), Cost-Plus pricing(summing the total unit cost of providing a product and adding a specific amount to the cost to arrive at a price), Experience Curving(As they get better at producing they lower the price as experience doubles) |
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| Target Profit (specific volume of profit), Target Return on Sales (Target Profit/Total Rev), Return on Investment Pricing (Set it to increase ROI by ten percent etc) |
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| Competition-Oriented Pricing |
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Definition
| Customary Pricing (traditional price), above, at, or below market price, loss-leader (priced low to attract customers) |
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Definition
| successive price cutting by competitors to increase or maintain their unit sales or market share |
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Term
Step 6
Make Special Adjustments to the list or quoted price |
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Definition
| discounts, allowances, geographical adjustments |
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| Quantity (reduction in price for larger orders), Seasonal Discounts (lower price to buy before season of high demand), Trade Discount, Cash Discounts (2/10, n/30) |
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| Trade-in Allowance (price reduction when a used product is part of the payment for the new product), Promotional (undertaking certain advertising or selling activities to promote a product. |
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| FOB Origin Pricing (buyer pays shipping so further away = higher price), Uniform Deliverd (Sellers pay shipping), |
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| practicing of charging very low for a product with intent of driving competitors out of business |
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| consists of individuals and firms involved in the process of making a prodcut or service available for use or consumption by consumers. |
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| any intermediary between manufacturer and end-user markets |
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| intermediary with legal authority to act on behalf of the manufacturer |
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| Intermediary who sells to other intermediaries, usually to retailers; term usually applies to consumer markets. |
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| Intermediary who sells to customers |
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| distributor, retailer, wholesaler, and so forth |
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| Buying, Selling, Risk Taking |
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| Assorting, Storing, Sorting, Transporting |
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| Financing, Grading, Marketing |
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| an arrangement whereby a firm reaches different buyers by employing two or more different types of channels for the same basic product. |
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| Strategic Channel Alliances |
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| One firms channel is used to sell another firms product |
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| represent a single producer and are responsible for the entire marketing function of that producer. |
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| independent firms used to bring buyers and sellers together. Usually seasonal |
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| Vertical Marketing Systems |
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Definition
| are professionally managed and centrally coordinated marketing channels designed to achieve channel economies and maximum marketing impact |
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| Combination of successive stages of production and distribution under a single ownership |
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| Independent production and distribution firms integrate efforts on a contractual basis |
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| Try to place products in as many places as possible. |
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| When the behavior of one channel conflicts with another channels goals |
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Definition
| When a channel member bypasses another channel |
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Definition
| a channel member that coordinates, directs, and supports other channel members. They become this because they have the ability to influence the behavior of other members. |
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