MKTG Final

Brand name selection...

#Selection and #Protection

social media presents both advantages and challenges

,targeted and personal, interactive, immediate and timely.

Introduction stage:

-In this stage, as compared to other stages, profits are negative or low because of the low sales and high distribution and promotion expenses. -Much money is needed to attract distributors and build their inventories. Promotion spending is relatively high to inform consumers of the new product and get them to try it. -A company, especially the market pioneer, must choose a launch strategy that is consistent with the intended product positioning. It should realize that the initial strategy is just the first step in a grander marketing plan for the product's entire life cycle. If the pioneer chooses its launch strategy to make a "killing," it may be sacrificing long-run revenue for the sake of short-run gain.

Growth stage...

-The early adopters will continue to buy, and later buyers will start following their lead, especially if they hear favorable word of mouth. Attracted by the opportunities for profit, new competitors will enter the market. -Companies keep their promotion spending at the same or a slightly higher level. Educating the market remains a goal, but now the company must also meet the competition. -Profits increase during the growth stage as promotion costs are spread over a large volume and as unit manufacturing costs decrease. -The firm uses several strategies to sustain rapid market growth as long as possible. It improves product quality and adds new product features and models. It enters new market segments and new distribution channels. -the firm faces a trade-off between high market share and high current profit. By spending a lot of money on product improvement, promotion, and distribution, the company can capture a dominant position. In doing so, however, it gives up maximum current profit, which it hopes to make up in the next stage.

Number of Channel Levels.

-The number of intermediary levels indicates the length of a channel. -Companies can design their distribution channels to make products and services available to customers in different ways. -Each layer of marketing intermediaries that performs some work in bringing the product and its ownership closer to the final buyer is a channel level.

Good value pricing types

-everyday low pricing (EDLP). EDLP involves charging a constant, everyday low price with few or no temporary price discounts. For example, Except for a few sale items every month, Walmart promises everyday low prices on everything it sells. -high-low pricing involves charging higher prices on an everyday basis but running frequent promotions to lower prices temporarily on selected items. Department stores such as Kohl's and JCPenney practice high-low pricing by having frequent sale days, early-bird savings, and bonus earnings for store credit-card holders.

value delivery network

-is made up of the company, suppliers, distributors, and, ultimately, customers who "partner" with each other to improve the performance of the entire system.

A firm can obtain new products in two ways...

1) acquisition- by buying a whole company, a patent, or a license to produce someone else's product 2) the firm's own new product development efforts (original products, product. improvements, product. modifications, and new brands.

Desirable qualities for a brand name include...

1) it should suggest something about the product's benefits and qualities 2) it should be easy to pronounce, recognize, and remember 3) the brand names should be distinctive (Panera, Zappos) 4) it should be extendable 5) it should translate easily into other languages 6) it should be capable of registration and legal protection

Planned Obsolescence

1. : Critics also have charged that some companies practice planned obsolescence, causing their products to become obsolete before they actually should need replacement. They accuse some producers of using materials and components that will break, wear, rust, or rot sooner than they should. And if the products themselves don't wear out fast enough, other companies are charged with perceived obsolescence—continually changing consumer concepts of acceptable styles to encourage more and earlier buying. Marketers respond that consumers like style changes; they get tired of the old goods and want a new look in fashion. Or they want the latest high-tech innovations, even if older models still work. No one has to buy a new product, and if too few people like it, it will simply fail. Finally, most companies do not design their products to break down earlier because they do not want to lose customers to other brands.

Shoddy, Harmful Products

1. Another criticism concerns poor product quality or function. § One complaint is that, too often, products and services are not made well or do not perform well. § A second complaint concerns product safety. Product safety has been a problem for several reasons, including company indifference, increased product complexity, and poor quality control. § A third complaint is that many products deliver little benefit or may even be harmful. § For example, for years, industry critics have blamed the plentiful supply of sugar-laden, high-calorie soft drinks for the obesity epidemic and other health issues in the United States. They are quick to fault what they see as greedy beverage marketers for cashing in on vulnerable consumers, turning us into a nation of Big Gulpers. Although U.S. consumption of soft drinks has dropped in recent years, beverage companies are now looking to emerging markets for growth.

Cultural Pollution

1. Critics charge the marketing system with creating cultural pollution. They feel our senses are being constantly assaulted by marketing and advertising. Commercials interrupt serious programs; pages of ads obscure magazines; billboards mar beautiful scenery; spam fills our email inboxes; flashing display ads intrude on our online and mobile screens.

Deceptive Practices

1. Deceptive practices fall into three groups: promotion, packaging, and pricing. Deceptive promotion includes practices such as misrepresenting the product's features or performance or luring customers to the store for a bargain that is out of stock. Deceptive packaging includes exaggerating package contents through subtle design, using misleading labeling, or describing size in misleading terms. § Deceptive pricing includes practices such as falsely advertising "factory" or "wholesale" prices or a large price reduction from a phony high retail "list price." One example is where Overstock.com sold a patio set for $449 while claiming that the list price was $999. When the item was delivered, the customer found that it had a Walmart sticker stating a price of $247. § Deceptive practices have led to legislation and other consumer protection actions. For example, in 1938 Congress enacted the Wheeler-Lea Act, which gave the Federal Trade Commission (FTC) power to regulate "unfair or deceptive acts or practices." The FTC has since published several guidelines listing deceptive practices. Despite regulations, however, some critics argue that deceptive claims are still common, even for well-known brands. § The toughest problem often is defining what is "deceptive." For instance, an advertiser's claim that its chewing gum will "rock your world" isn't intended to be taken literally. Instead, the advertiser might claim, it is "puffery"—innocent exaggeration for effect. However, others claim that puffery and alluring imagery can harm consumers in subtle ways. Think about the popular and long-running MasterCard Priceless commercials that once painted pictures of consumers fulfilling their priceless dreams despite the costs. The ads suggested that your credit card could make it happen. But critics charge that such imagery by credit card companies encouraged a spend-now-pay-later attitude that caused many consumers to overuse their cards.

High Pressure Selling

1. Salespeople are sometimes accused of high-pressure selling that persuades people to buy goods they had no thought of buying. It is often said that insurance, real estate, and used cars are sold, not bought. Salespeople are trained to deliver smooth, canned talks to entice purchases. They sell hard because sales contests promise big prizes to those who sell the most. Similarly, TV infomercial pitchmen use "yell and sell" presentations that create a sense of consumer urgency that only those with strong willpower can resist.

New brand name...

A company might believe that the power of its existing brand name is waning, so a new brand name is needed. Or it may create a new brand name when it enters a new product category for which none of its current brand names is appropriate.

Poor Service to Disadvantaged Customers

1. The presence of large national chain stores in low-income neighborhoods would help to keep prices down. However, the critics accuse major chain retailers of redlining, drawing a red line around disadvantaged neighborhoods and avoiding placing stores there. § For example, the nation's poor areas have 30 percent fewer supermarkets than affluent areas do. As a result, many low-income consumers find themselves in food deserts, which are awash with small markets offering frozen pizzas, Cheetos, Moon Pies, and Cokes but where fruits and vegetables or fresh fish and chicken are out of reach. § In this view, marketing's purpose is to promote consumption, and the inevitable outcome of successful marketing is unsustainable overconsumption. According to the critics, more is not always better. Some groups have taken their concerns straight to the public. § Critics have charged that the marketing system urges too much interest in material possessions, and that America's love affair with worldly possessions is not sustainable. Too often, people are judged by what they own rather than by who they are. The critics do not view this interest in material things as a natural state of mind but rather as a matter of false wants created by marketing. Marketers, they claim, stimulate people's desires for goods and create materialistic models of the good life. Thus, marketers have created an endless cycle of mass consumption based on a distorted interpretation of the "American Dream."

marketing strategy statement consists of three parts...

1. the first part describes the target market; the planned value proposition; and the sales, market-share, and profit goals for the first few years. 2. the second part of the marketing strategy statement outlines the product's planned price, distribution, and marketing budget for the first year 3. the third part of the marketing strategy statement describes the planned long-run sales, profit goals, and marketing mix strategy

Idea generation...

1. the systematic search for new product ideas. A company typically generates hundreds—even thousands—of ideas to find a few good ones.

experience curve (or the learning curve).

After its accumulated production experience doubles again to 400,000, the average cost is $7. This drop in the average cost with accumulated production experience

3rd level product planning: augmented product...

Around the core benefit and actual product by offering additional consumer services and benefits, i.e. when consumers buy an iPad, it gives consumers a complete connectivity solution (also includes delivery and credit, after sale service, warranty and product support)

Costs As A Function of Production Experience

As Lenovo gains experience in producing tablets, it learns how to do it better. § Workers learn shortcuts and become more familiar with their equipment. With practice, the work becomes better organized, and Lenovo finds better equipment and production processes. with higher volume, Lenovo becomes more efficient and gains economies of scale. As a result, the average cost tends to decrease with accumulated production experience. average cost of producing the first 100,000 tablets is $10 per tablet. When the company has produced the first 200,000 tablets, the average cost has fallen to $8.50.

New Product Development

Because all products eventually decline, a firm must be good at developing new products to replace aging ones (the challenge of new product development). Also, a firm must be good at adapting its marketing strategies in the face of changing tastes, technologies, and competition as products pass through stages (the challenge of product life-cycle strategies)

After the decline stage...

Companies must identify products in the decline stage and decide whether to maintain, harvest, or drop them. Management may decide to maintain its brand, repositioning or reinvigorating it in hopes of moving it back into the growth stage of the product life cycle.

market-penetration pricing.

Companies set a low initial price to penetrate the market quickly and deeply—to attract a large number of buyers quickly and win a large market share. high sales volume results in falling costs, allowing companies to cut their prices even further.

Multi-channel or omnichannel marketing:

Creating a seamless, cross-channel buying experience that integrates in-store, online, and mobile shopping. An example would be Macy's that sells brands in-store, on its e-commerce website, as well as on its mobile app

External sources...

Distributors and suppliers, competitors, and customers

Demand Curve

Each price the company might charge will lead to a different level of demand. The relationship between the price charged and the resulting demand level is shown

Brand development...

FOUR FREAKING CHOICES BISH Product category B Existing New r E a. x line ext brand ext n. i d N. n a. e multibrands new brands m w e

Types of Unethical Marketing Practices

High prices, deceptive practices, high pressures selling, shoddy harmful products

, brand community websites

Instead, their primary purpose is to present brand content that engages consumers and creates customer−brand community. Such sites typically offer a rich variety of brand information, videos, blogs, activities, and other features that build closer customer relationships and generate engagement with and between the brand and its customers

market-skimming pricing (or price skimming).

Many companies that invent new products set high initial prices to skim revenues layer by layer from the market -Market skimming makes sense only under certain conditions. First, the product's quality and image must support its higher price, and enough buyers must want the product at that price. -Second, the costs of producing a smaller volume cannot be so high that they cancel the advantage of charging more. Finally, competitors should not be able to enter the market easily and undercut the high price.

Maturity stage...

Most products are in the maturity stage of the life cycle, and therefore most of marketing management deals with the mature product. -The slowdown in sales growth results in many producers with many products to sell. In turn, this overcapacity leads to greater competition. -Competitors begin marking down prices, increasing their advertising and sales promotions, and upping their product development budgets to find better versions of the product. -These steps lead to a drop in profit. Some of the weaker competitors start dropping out, and the industry eventually contains only well-established competitors. -Product managers should do more than simply ride along with or defend their mature products—a good offense is the best defense. They should consider modifying the market product offering, and marketing mix. -In modifying the market, the company tries to increase consumption by finding new users and new market segments for its brands. For example, brands such as Harley-Davidson and Axe fragrances, which have typically targeted male buyers, have created products and marketing programs aimed at women. -The company might also try modifying the product—changing characteristics such as quality, features, style, packaging, or technology platforms to retain current users or attract new ones. -The company can try modifying the marketing mix—improving sales by changing one or more marketing mix elements. The company can offer new or improved services to buyers. It can cut prices to attract new users and competitors' customers. It can launch a better advertising campaign or use aggressive sales promotions—trade deals, cents-off, premiums, and contests.

Sustainable markeitng?

Needs of. business n. n mrkt concept / Strat plan concept e. ow eds of c. fut soc mrkt concept/ sus mkt concept o ure n s users

P's of the market place

Place (distribution)

captive-product pricing

Producers of the main products (razors, video-game consoles, printers, single-cup coffee brewing systems, and tablet computers) often price them low and set high markups on the supplies. Examples of captive products are razor blade cartridges, video games, printer cartridges, and single-serve coffee pods.

Value-added pricing

Rather than cutting prices to match competitors, they add quality, services, and value-added features to differentiate their offers and thus support their higher prices

PLC concept...

The PLC concept can describe a product class (gasoline-powered automobiles), a product form (SUVs), or a brand (the Ford Escape). The PLC concept applies differently in each case. Product classes have the longest life cycles; the sales of many product classes stay in the mature stage for a long time. Product forms, in contrast, tend to have the standard PLC shape. Product forms such as dial telephones, VHS tapes, and film cameras passed through a regular history of introduction, rapid growth, maturity, and decline.

There are three types of franchises

The first type is the manufacturer-sponsored retailer franchise system—for example, Ford and its network of independent franchised dealers. The second type is the manufacturer-sponsored wholesaler franchise system—Coca-Cola licenses bottlers (wholesalers) in various world markets that buy Coca-Cola syrup concentrate and then bottle and sell the finished product to retailers locally. The third type is the service-firm-sponsored retailer franchise system—for example, Burger King and its more than 12,000 franchisee-operated restaurants around the world.

All the institutions in the channel are connected by several types of flows

These include the physical flow of products, the flow of ownership, the payment flow, the information flow, and the promotion flow. These flows can make even channels with only one or a few levels very complex.

2nd level of product planning: actual product...

They need to develop product and service features, a design, a quality level, a brand name, and packaging.

1st level of product planning: core customer value...

What is the buyer really buying? When designing products, marketers must first define the core, problem-solving benefits or services that consumers seek.

Crowdsourcing...

a company invites broad communities of people—customers, employees, independent scientists and researchers, and even the public at large into the innovation process.

A product concept is...

a detailed version of the idea stated in meaningful consumer terms.

A brand is...

a name, term, sign, symbol or design intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.

cost-plus pricing (or markup pricing

adding a standard markup to the cost of the product. -First, sellers are more certain about costs than about demand. By tying the price to cost, sellers simplify pricing; they do not need to make frequent adjustments as demand changes. -Second, when all firms in the industry use this pricing method, prices tend to be similar, so price competition is minimized. § -that cost-plus pricing is fairer to both buyers and sellers. Sellers earn a fair return on their investment but do not take advantage of buyers when buyers' demand becomes great.

A product idea is...

an idea for a possible product that the company can see itself offering to the market

A product is...

anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need.

Services...

are a form of products that consists of activities, benefits, or satisfactions offered for sale that are intangible and do not result in the ownership of anything.

Fads...

are temporary periods of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity. An example can be selfie-sticks.

Product Development...

begins when the company finds and develops a new product idea. During product development, sales are zero, and the company's investment costs mount.

A company's market offering includes...

both tangible goods and services. At one extreme, the market offer may consist of a pure tangible good, (soap, toothpaste, salt, no service attached to product), or pure services, for which the market offer consists only of services (doctor's exam, financial adviser). A combination of goods and services is also a possibility.

Major brand strategy decisions involve...

brand positioning, brand name selection, brand sponsorship, and brand development

Brand positioning...

can position the brand on product attributes (quality, selection, style, and innovative features). For benefits, talk about the good parts of owning the product (take the hassle out of cooking, better energy savings). Additionally, beliefs and values (lovemarks: companies that can do no wrong).

the societal marketing concept

considers the future welfare of consumers and the strategic planning concept considers future company needs, the sustainable marketing concept considers both. Sustainable marketing calls for socially and environmentally responsible actions that meet both the immediate and future needs of customers and the company.

There are three major types of VMSs

corporate, contractual, and administered

Cost-based pricing steps

design a good product -> determine product costs -> self price based on cost -> convince buyers of product's value is often product driven

4th is marketing strategy development...

designing an initial marketing strategy for introducing this car to the market.

Brand extensions...

extends a current brand name to new or modified products in a new category.

Traditional Forms of Marketing

face-to-face or personal selling, direct-mail marketing, catalog marketing, telemarketing, direct-response television (DRTV) marketing, and kiosk marketing

Price is also one of the most

flexible marketing mix elements.

Brand sponsorship...

has 4 possible options. national brand, private branding, licensing, co-branding

direct marketing channel

has no intermediary levels—the company sells directly to consumers. For example, Mary Kay Cosmetics and Amway sell their products through home and office sales parties and online websites and social media; companies ranging from GEICO insurance to Omaha Steaks sell directly to customers via internet, mobile, and telephone channels. The remaining channels are indirect marketing channels, containing one or more intermediaries.

6th is product development...

here, R&D or engineering develops the product concept into a physical product. The product development step, however, now calls for a huge jump in investment. It will show whether the product idea can be turned into a workable product.

Brand Asset Valuator: Relevance

how consumers feel it meets their dimensions

Brand Asset Valuator: Esteem

how highly consumers regard and respect the brand

Brand Asset Valuator: Knowledge

how much consumers know about the brand

Price Elasticity

how responsive demand will be to a change in price. If demand hardly changes with a small change in price, we say demand is inelastic. If demand changes greatly, we say the demand is elastic.

New Product Development Process

idea generation -> idea screening -> concept development and testing -> marketing strategy development -> business analysis -> product development -> test marketing -> commercialization

Setting price

in between price floor (product costs), and price ceiling (consumer perceptions of value), is. competition and other external factor (competitors strategies and prices, Marketing strategy, objectives and mix, Nature of the market and demand)

Commercialization...

introducing the new product into the market—it will face high costs.

Direct and digital marketing

involve engaging directly with carefully targeted individual consumers and customer communities to both obtain an immediate response and build lasting customer relationships. Companies use direct marketing to tailor their offers and content to the needs and interests of narrowly defined segments or individual buyers

5th is Business Analysis...

involves a review of the sales, costs, and profit projections for a new product to find out whether they satisfy the company's objectives. If they do, the product can move to the product development stage.

Competition-based Pricing:

involves setting prices based on competitors' strategies, costs, prices, and market offerings. Consumers will base their judgments of a product's value on the prices that competitors charge for similar products.

Cost-based pricing

involves setting prices based on the costs of producing, distributing, and selling the product plus a fair rate of return for the company's effort and risk

Sustainable Marketing involves

involves socially and environmentally responsible marketing that meets the present needs of consumers and businesses while also preserving or enhancing the ability of future generations to meet their needs. This type of marketing calls for socially and environmentally responsible actions that meet the present needs of consumers and businesses while also preserving or enhancing the ability of future generations to meet their needs.

Style...

is a basic and distinctive mode of expression. For example, styles appear in homes (colonial, ranch, transitional), clothing (formal, casual), and art (realist, surrealist, abstract). Once a style is invented, it may last for generations, passing in and out of vogue. A style has a cycle showing several periods of renewed interest.

marketing concept

is a philosophy of customer value and mutual gain. Its practice leads the economy by an invisible hand to satisfy the many and changing needs of consumers.

retailer

is an intermediary owned and operated by someone other than the manufacturer of the goods it sells

wholesaler

is an intermediary that takes title to the goods it handles and then distributes to retailers, other distributors, or end consumers

an administered VMS,

leadership is assumed not through common ownership or contractual ties but through the size and power of one or a few dominant channel members. Manufacturers of a top brand can obtain strong trade cooperation and support from resellers.

Licensing...

license names or symbols previously created by other manufacturers, names of well-known celebrities, or characters from popular movies and books. For a fee, any of these can provide an instant and proven brand name.

National brand (or manufacturer's brand)...

like Kellogg's Frosted Flakes

Brand Asset Valuator...

measures brand in differentiation, relevance, knowledge, and esteem. The brand must be distinct, or else consumers will have no reason to choose it over other brands.

Social Media Marketing

media refers to independent and commercial online social networks where people congregate to socialize and share messages, opinions, pictures, videos, and other content. Marketers can engage in social media in two ways: They can use existing social media or they can set up their own. Using existing social media seems the easiest.

Products include...

more than just tangible objects, but also services, events, places, organizations, or ideas.

Controlled test markets...

new products and tactics are tested among controlled panels of shoppers and stores.

Decline stage...

o Carrying a weak product can be very costly to a firm. o A weak product may take up too much of management's time. o It often requires frequent price and inventory adjustments. I o t requires advertising and sales-force attention that might be better used to make "healthy" products more profitable. o A product's failing reputation can cause customer concerns about the company and its other products. o Keeping weak products delays the search for replacements, creates a lopsided product mix, hurts current profits, and weakens the company's foothold on the future.

o Two types of conflict may hinder the normal functioning of a marketing channel: horizontal and vertical

o Horizontal conflict results from disagreements among channel members at the same level. o It is often seen in disagreements between differing marketing intermediaries—though they are at the same level—that handle similar products. For instance, some Ford dealers in Chicago might complain that other dealers in the city steal sales from them by pricing too low or advertising outside their assigned territories. o Vertical conflict occurs when channel members at different levels find many reasons for disputes, and can be frequent and severe. It is often seen when retailers irritate producers by selling private brands that compete with producers' brands . It is also seen when producers sometimes set up their own retail store, annoying wholesalers and retailers in bypassing these intermediaries and selling directly to consumers. For example, McDonald's has recently faced growing conflict with its corps of 3,100 independent franchisees.

Online advertising

o Online display ads might appear anywhere on an internet user's screen and are often related to the information being viewed. For example, while perusing your favorite backpacking site, you might see an attention-grabbing video ad from The North Face. Roll over the brand logo and up pops an interactive ad panel, with the video continuing in the upper-right corner alongside information on featured products and real-time links to The North Face website and a store locator. o Using search-related ads (or contextual advertising), text- and image-based ads and links appear atop or alongside search engine results on sites such as Google, Yahoo!, and Bing. For example, search Google for "LED TVs." At the top and side of the resulting search list, you'll see inconspicuous ads for 10 or more advertisers, ranging from Samsung and Panasonic to Best Buy, Amazon.com, Walmart.com, Crutchfield, and CDW.

Two forms of segmented pricing

o Segmented pricing takes several forms. Under customer-segment pricing, different customers pay different prices for the same product or service. For example, Kohl's offers a 15 percent discount every Wednesday to "customers aged 60 or better." o Under product form pricing, different versions of the product are priced differently but not according to differences in their costs. For instance, a round-trip economy seat on a flight from New York to London might cost $1,100, whereas a business-class seat on the same flight might cost $3,400 or more.

marketing channel, also called a distribution channel

o an organized system of marketing institutions and their interrelationships that enhance the physical flow and ownership of goods and services from producer to consumer or business user

contractual VMS

o consists of independent firms at different levels of production and distribution that join together through contracts to obtain more economies or sales impact than each could achieve alone.

A corporate VMS

o integrates successive stages of production and distribution under single ownership. Coordination and conflict management are attained through regular organizational channels. For example, grocery giant Kroger owns and operates 37 manufacturing plants—17 dairies, 6 bakery plants, 5 grocery plants, 1 deli plant, 2 frozen dough plants, 2 beverage plants, 2 cheese plants, and 2 meat plants. That gives it factory-to-store channel control over 40 percent of the 13,000 private-label items found on its shelves.

The franchise organization

o is the most common type of contractual relationship. In this system, a channel member called a franchisor links several stages in the production-distribution process.

Logistics

o refers to the process of coordinating the flow of information, goods, and services among members of the marketing channel

Line extensions...

occur when a company extends existing brand names to new forms, colors, sizes, ingredients, or flavors of an existing product category.

Co-branding...

occurs when two established brand names of different companies are used on.

Good-value pricing

offering the right combination of quality and good service at a fair price. § involves redesigning existing brands to offer more quality for a given price or the same quality for less. Some companies even succeed by offering less value but at very low prices. For example, Spirit Airlines gives customers "Bare Fare" pricing, by which they get less but don't pay for what they don't get

Multibranding

offers a way to establish different features that appeal to different customer segments, lock up more reseller shelf space, and capture a larger market share. A major drawback of multibranding is that each brand might obtain only a small market share, and none may be very profitable. The company may end up spreading its resources over many brands instead of building a few brands to a highly profitable level.

Value-based pricing steps

reverses this process assess customer needs and value perceptions -> set target price to match customer-perceived value-> determine costs that can be incurred -> design product to deliver desired value at target price.

Concept testing is...

part of the stage of developing the product concept, and calls for testing new product concepts with groups of target consumers. The concepts may be presented to consumers symbolically or physically. Many firms routinely test new product concepts with consumers before attempting to turn them into actual new products. After being exposed to the concept, consumers then may be asked to react to it by answering questions.

Growth is a...

period of rapid market acceptance and increasing profits.

Introduction is a...

period of slow sales growth as the product is introduced in the market. Profits are nonexistent in this stage because of the heavy expenses of product introduction.

Maturity is a...

period of slowdown in sales growth because the product has achieved acceptance by most potential buyers.

reference prices

prices that buyers carry in their minds and refer to when looking at a given product.

An attractive idea must then be developed into a...

product concept

Simulated test markets...

researchers measure consumer responses to new products and marketing tactics in laboratory stores or simulated online shopping environments.

Price is the only element in the marketing mix that produce

revenue; all other elements represent costs.

psychological pricing

sellers consider the psychology of prices, not simply the economics. For example, consumers usually perceive higher-priced products as having higher quality. When they can judge the quality of a product by examining it or by calling on past experience with it, they use price less to judge quality. But when they cannot jud

product bundle pricing, sellers

sellers often combine several products and offer the bundle at a reduced price. For example, fast-food restaurants bundle a burger, fries, and a soft drink at a "combo" price. Microsoft Office is sold as a bundle of computer software, including Word, Excel, PowerPoint, and Outlook. And Comcast, AT&T, Verizon, and other telecommunications companies bundle TV service, phone service, and high-speed internet connections at a low combined price. Price bundling can promote the sales of products consumers might not otherwise buy, but the combined price must be low enough to get them to buy the bundle.

Private branding...

store brands

Price is...

the amount of money charged for a product or a service.

Internal sources...

the company can find new ideas through formal R&D.

A typical product life cycle (PLC) refers to...

the course that a product's sales and profits take over its lifetime. 5 stages- product. development, introduction, growth, maturity, and decline

Brand equity is...

the differential effect that knowing the brand name has a customer response to the product and its marketing.

Viral marketing

the digital version of word-of-mouth marketing, involves creating videos, ads, and other marketing content that are so infectious that customers will seek them out or pass them along to their friends. Because customers find and pass along the content, viral marketing can be very inexpensive. And when content comes from a friend, the recipient is much more likely to view or read it.

, Digital and social media marketing

the fastest-growing form of direct marketing. It uses digital marketing tools such as websites, online video, email, blogs, social media, mobile ads and apps, and other digital platforms to directly engage consumers anywhere, anytime via their computers, smartphones, tablets, internet-ready TVs, and other digital devices.

Fashion...

the more formal "business attire" look of corporate dress of the 1980s and 1990s gave way to the "business casual" look of the 2000s and 2010s. Fashions tend to grow slowly, remain popular for a while, and then decline slowly.

Decline is...

the period when sales fall off and profits drop

7) test marketing...

the stage at which the product and its proposed marketing program are tested in realistic market settings. TWO TYPES: controlled and simulated test markets

Brand value is...

the total financial value of a brand

Consumer equity...

the value of customer relationships that the brand creates

A product image is...

the way consumers perceive an actual or potential product.

Traditional direct marketing

tools include face-to-face selling, direct-mail marketing, catalog marketing, telemarketing, direct-response television marketing, and kiosk marketing. In recent years, however, a dazzling new set of digital direct marketing tools has burst onto the marketing scene, including online marketing (websites, online ads and promotions, email, online videos, and blogs), social media marketing, and mobile marketing.

Customer value-based pricing

uses buyers' perceptions of value as the key to pricing. Value-based pricing means that the marketer cannot design a product and marketing program and then set the price. Price is considered along with all other marketing mix variables before the marketing program is set.

Brand Asset Valuator: Differentiation

what makes the brand stand out

2nd is idea generation...

which is to create a large number of ideas. The purpose of the succeeding stages is to reduce that number. R-W-W questions is it real?, can we win?, is it worth doing?

How costs change at different levels of production

§ It shows that the cost per tablet is high if Lenovo's factory produces only a few per day. But as production moves up to 1,000 tablets per day, the average cost per unit decreases. This is because fixed costs are spread over more units, with each one bearing a smaller share of the fixed cost. Lenovo can try to produce more than 1,000 tablets per day, but average costs will increase because the plant becomes inefficient. Workers have to wait for machines, the machines break down more often, and workers get in each other's way. § If Lenovo believed it could sell 2,000 tablets a day, it should consider building a larger plant. The plant would use more efficient machinery and work arrangements. Also, the unit cost of producing 2,000 tablets per day would be lower than the unit cost of producing 1,000 units per day, as shown in the long-run average cost (LRAC) curve § n fact, a 3,000-capacity plant would be even more efficient. But a 4,000-daily production plant would be less efficient because of increasing diseconomies of scale—too many workers to manage, paperwork slowing things down, and so on. The figure shows that a 3,000-daily production plant is the best size to build if demand is strong enough to support this level of production.

Distribution...

§ Moving goods and services from producers to customers—is the second marketing mix variable. A distribution strategy has two critical components: marketing channels and, logistics and supply-chain management

A conventional distribution channel

§ consists of one or more independent producers, wholesalers, and retailers. Each is a separate business seeking to maximize its own profits, perhaps even at the expense of the system as a whole. No channel member has much control over the other members, and no formal means exists for assigning roles and resolving channel conflict.

a vertical marketing system (VMS)

§ consists of producers, wholesalers, and retailers acting as a unified system. One channel member owns the others, has contracts with them, or wields so much power that they must all cooperate. The VMS can be dominated by the producer, the wholesaler, or the retailer.

1. High Prices

§ planned obsolescence, and poor service to disadvantaged consumers. § Many critics charge that the American marketing system causes prices to be higher than they would be under more "sensible" systems. Such high prices are hard to swallow, especially when the economy gets tight. Critics point to three factors—high costs of distribution, high advertising and promotion costs, and excessive markups. § Modern marketing is also accused of pushing up prices to finance unneeded advertising, sales promotion, and packaging. For example, a heavily promoted national brand sells for much more than a virtually identical store-branded product. Critics charge that much of this promotion and packaging adds only psychological, not functional, value. Marketers respond that although advertising adds to product costs, it also adds value by informing potential buyers of the availability and merits of a brand. Brand name products may cost more, but branding assures buyers of consistent quality. Moreover, although consumers can usually buy functional versions of products at lower prices, they want and are willing to pay more for products that also provide psychological benefits—that make them feel wealthy, attractive, or special. § Critics also charge that some companies mark-up goods excessively. They point to the drug industry, where a pill costing five cents to make may cost the consumer $2 to buy, and to the high charges for auto repairs and other services. Marketers respond that most businesses try to price fairly to consumers because they want to build customer relationships and repeat business. Also, they assert, consumers often don't understand the reasons for high mark-ups.

by-product pricing

§ the company seeks a market for these by-products to help offset the costs of disposing of them and help make the price of the main product more competitive. The by-products themselves can even turn out to be profitable—turning trash into cash.

segmented pricing

§ the company sells a product or service at two or more prices, even though the difference in prices is not based on differences in costs.

In making products and services available to consumers, channel members add value by bridging the major time, place, and possession gaps that separate goods and services from those who use them. Members of the marketing channel perform many key functions. Some help to complete transactions:

· Information. Gathering and distributing information about consumers, producers, and other actors and forces in the marketing environment needed for planning and aiding exchange. · Promotion. Developing and spreading persuasive communications about an offer. · Contact. Finding and engaging customers and prospective buyers. · Matching. Shaping offers to meet the buyer's needs, including activities such as manufacturing, grading, assembling, and packaging. · Negotiation. Reaching an agreement on price and other terms so that ownership or possession can be transferred.