principles of marketing

1. Identify and describe the four branding strategies that product and brand managers use.

1. Identify and describe the four branding strategies that product and brand managers use. • Multiproduct branding strategy (family branding or corporate branding): uses one name for all products • Multibranding strategy: giving each brand is intended form different market segment • Private branding strategy (private labeling or reseller branding): manufactures products but sells them under the brand name wholesaler or retailer • Mixed branding strategy: a firm markets product under its own name and that of a reseller b/c the segment attracted to the reseller is different from its own.

Explain why odd-even pricing may be successful.

1. In theory demand increase if the price drops from 500 to 499.99 but overuse mutes the effect on demand.

Describe the decline stage of the product life cycle. Explain the two strategies a company might employ if its product were in the decline stage of its product life cycle.

A company might employ harvest or deletion strategy in the decline stage.

Briefly define what is meant by a product. Explain the characteristics that would define a good and a service. Give an example of each.

A product is a good, service or idea consisting of a bundle of tangible and intangible attributes that satisfies consumer's needs and is received in exchange for money or something else of value. A good has tangible attributes that a consumer's five senses can perceive. Ex. An IPad A service is an intangible activity or benefit that an org. provides to satisfy a consumer's needs in exchange for money or something else of value. Ex. Dental exam

Characterize the difference between a product line and a product mix. Give an example of each.

A product line is a group of products that are closely related because they are similar in terms of consumer needs and uses, market segments, sales outlets or prices. Ex. Nikes new line of clothing A product mix consists of all the product lines offered by the company. Ex. Pepsi has a large product mix with different lines of beverages.

Explain the differences in promotion between convenience, shopping, specialty, and unsought products.

All of these are types of consumer products. Convenience stresses price availability and awareness. Shopping stresses differentiation from competitors, specialty stresses uniqueness of brand and status. Unsought products awareness is essential.

What is deceptive pricing?

Deceptive pricing is the method by which retailers use deceptive means to trick the customers into thinking that they are paying a lower price for the product, than what they are actually supposed to.

What is market segmentation and why is it important

It involves aggregating prospective buyers into groups that have common needs and will respond similarly to a marketing action. It is important because it stresses the grouping people or org. into a market according to similar needs and benefits they are looking for. Also, those needs, and benefits must be related to a specific marketing actions that the org. can take.

What is product differentiation? How does it relate to market segmentation? How does it potentially improve a firm's revenues?

It is the strategy of using different marketing mix actions to help consumers perceive a product as being different and better than competing products. It relates to market segment because you can make a product different to reach a different market segment. It leads to tangible marketing actions that increase sales and profitability.

1. List four of the demand-oriented approaches to selecting an approximate price level and define what they are

Prestige: setting a price high so quality or status conscious consumers will be attracted to the product Odd even: setting the price a few dollars or cents under an even number ($4.99) Target: setting the price to the intermediary will sell the product to the ultimate consumer at the right price Bundle: marketing two or more products in a single package price (McDonald's burger +drinks +fries) Yield: charging of different prices to maximize revenue on the basis of demand (airplane tickets)

1. What is the difference between pricing objectives and pricing constraints?

Pricing obj. specify the role of price in a orgs. Marketing and strategic plan. Pricing constraints are factors that limit the range of prices a firm may set.

Explain the difference between primary demand and selective demand.

Primary demand is the desire for the product class rather than a specific brand. Selective demand is the preference for a specific brand.

What are the conditions favoring the use of penetration pricing?

Setting a low initial price on a new product to appeal immediately to the mass market. It's the reversed of skimming so it favoring conditions is when many segments are price sensitive, a low initial price discourages competitors from entering market, unit production and marketing cost falls dramatically as production volume increases.

When is skimming pricing an effective strategy?

Setting the highest initial price that customers really desiring the product are willing to pay. It is effective when enough prospective customers are willing to buy the product immediately at the high initial price to make sale profitable, the high initial price will not attract competitors, lowering the price has only a minor effect on the increasing sales volume and reducing unit cost, customers interpret the high price as a signal of high quality.

Explain the 80/20 rule.

The idea that 80% of a firm's Sales are obtained from 20% of its customers.

Define product positioning. What are two approaches to product positioning? Give an example of each approach.

The place a product occupies in consumers' minds based on important attributes relative to competitive products. There is head to head positioning which involves competing directly with competitors on similar product attributes in the same target market Ex. Enterprise competing directly with Dollar rent a car. And Differentiation positioning which involves seeking a less-competitive smaller market niche in which to locate a brand. Tesla creating parts for aerospace to not directly compete with other car dealerships.

How long is a product life cycle? What determines its length?

There is no set time that it takes a product to move through the life cycle. Consumer products have shorter life cycles than business products.

Describe the role of packaging and labeling in the marketing of a product.

They both provide important benefits for the manufacturer, retailer, and ultimate consumer. Also, can provide a competitive advantage. Packaging and labeling tells a consumer how, where, and when to use it and the source and composition of the product. It also provides storage, convenience, protection, or ensuring product quality. A package and label shape, color and graphics distinguish one brand from another conveys a brand's positioning, and build brand equity

What is loss-leader pricing and why do retailers use it?

To get people to come into the store to buy more of the expensive items as well

Describe the different ways to classify a "new" product.

You can classify a product with continuous innovation, dynamically continuous innovation and discontinuous innovation. CI: consumers don't need to learn new behaviors. DCI: only minor changes in behavior required. DI: involves making the consumer learn entirely new consumption patterns to use the product. In legal terms- a product is considered new for the first 6 months

What is predatory pricing?

it is illegal, when they set the price lower than their costs to force out the competition

1. What are the criteria used to select target markets?

• Expected growth • Competitive Position • Cost of reaching • Compatibility with the organization's objectives and resources

Describe the four general bases that are used to segment consumer markets.

• Geographic Segmentation • Demographic Segmentation • Psychographic Segmentation • Behavioral Segmentation

1. What are the four shapes that a product life cycle can take? For each type, describe (and as an option, draw) its characteristics.

• High learning: significant customer education is required and there is an extended introductory period. • Low learning: Begin immediately because little learning is required by the consumer and the benefits of the purchase is readily understood • Fashion product: a style of the time. Fashion products are introduced, decline and return Fad product: experiences rapid sales on intro and then equally rapid decline.

Describe the market segmentation process.

• Identify market needs: benefits in terms of product features, expense, quality, and savings in time and convenience • Link needs to actions: take steps to segment and target markets • Execute marketing program actions: a marketing mix of product, price, place, promotion

What are the marketing reasons for new-product failures?

• Insignificant point of difference: distinctivve point of difference is the most important factor when competing with other product • Incomplete market and product protocol before product development starts: firms try to design a vague product with a phantom market without this • Not satisfying consumer needs on critical factors. • Bad timing • No economical access to buyers • Poor product quality • Poor execution of the marketing mix • Too little market attractiveness

1. What categories of products are classified as business support products? Give an example of each category. Installations (

• Installations (buildings and fixed equipment) • Accessory equipment (tools and office equipment) • Supplies (stationery, paper clips, brooms) • Industrial services (maintenance, repair, and legal services)

Describe four unique elements of services.

• Intangibility: services can't be touched or seen before purchase decision. More of a performance than an object. • Inseparability: cannot distinguish the service provider from the service itself • Inconsistency: services depend on the people who provide them • Inventory: many goods have inventory handling costs that relate to their storage, perishability and movement.

Identify and describe the stages of the generalized product life cycle. For each stage, specify the marketing objective a firm should attempt to achieve.

• Introduction: occurs when a product is introduced to its intended market. During this period sales grow slow and profit is minimal. Pricing can be either high or low. High price is used to help with all the money but in to the product. • Growth: characterized by rapid increases in sales. Stage that competitors appear. Important to broaden distribution for the product. • Maturity: characterized by slowing of total industry sales or product class revenue. Marginal competitors leave the market. Sales increase and profit declines. Marketing attention is usually held towards holding market share. • Decline: occurs when sales drop. Caused by environmental changes. Companies either harvest or deletion during this period.

1. Compare the three ways to manage a product through its product life cycle (modifying the product, modifying the market, repositioning the product).

• Modifying the product involves altering one or more of a product's characteristics such as quality performance or appearance to increase the product's value to customers and increase sales. Common approach is product bundling. • Modifying the market is when a company tries to find new customers, increase a product's use among existing customers or create new use situations. • Repositioning the product changes the place a product occupies in a consumer's mind relative to competitive products. Usually you reposition to reach a competitor's position, to reach a new market, to catch a rising trend or changing up the value offered.

A marketing manager should develop segments for a market that meet five principal criteria. List these important factors in forming market segments.

• Simplicity and cost-effectiveness of assigning potential buyers to segments • Potential for increased profit • Similarity of needs of potential buyers within a segment • Difference of needs of buyers among segments

Identify and describe each stage in the new-product process in the correct order.

• Stage 1: New product strategy Development (defines the role for a new product in terms of the firm's overall objectives • Stage 2: Idea Generation (involves developing a pool of concepts to serve as candidates for new products building upon the previous stage's results) • Stage 3: Screening and evaluation (internally and externally evaluates new product ideas to eliminate those that warrant no further effort) • Stage 4: Business Analysis (specifies the feature of the product and the marketing strategy needed to bring it to market and make financial projections) • Stage 5: Development (turns the idea on paper into a prototype) • Stage 6: Market Testing (involves exposing actual products to prospective consumers under realistic purchase conditions to see if they will buy) • Stage 7: Commercialization (positions and launches a new product in full-scale production sales)

There are five key steps in segmenting and targeting markets, which link market needs of customers to the organization's marketing program. List these five key steps.

• Step 1: Group Potential Buyers into Segments • Step 2: Group Products to be Sold into Categories • Step 3: Develop a Market-Product Grid and Estimate the Size of Markets • Step 4: Select Target Markets • Step 5: Take Marketing Actions to Reach Target Market

1. Describe the steps taken in the setting a final price.

• Step 1: select an approximate price level • Step 2: set the list or quoted price (one-price policy or fixed price is setting one price for all buyers of a product or service. Flexible price policy involves involves setting different prices for products and services depending on individual buyers and purchase situations in light of demand, cost and competitive factors. • Step 3: make special adjustments to the list or quoted price (discounts: reductions from the list price that a seller gives a buyer as a reward for some activity of the buyer that is favorable to the seller. There are four kinds; quantity, seasonal, trade, cash. Allowances are reductions for list or quoted prices to buyers for performing some activity. There are trade-in allowances and promotional allowances)

What are the four steps to positioning a product with a perceptual map?

• dentify the important attributes for a product or brand class • Discover how target consumers rate competing products or brands with respect to these attributes • Discover where the company's product or brand is on these attributes in the minds of potential customers. • Reposition the company's product or brands in the mind of potential costumers