mrkt

customer oriented pricing

-match price to customer expectations -prices set based on perception of value

Product Life Cycle

0: Product Development Stage New products ideas are generated and tested, investment is made Sales have not begun Market Introduction Stage Costs are very high w/ slow sales volumes to start Little or no competition Growth Stage Costs reduced due to economies of scale as sales volume increases 2 profitability begins to rise Public awareness increases Competition begins to increase w/ a fewer new players in establishing market, increased competition leads to price decreases Maturity stage Costs are lowered as a result of increasing production volumes and experience curve effects Sales volume peaks and market saturation is reached New competition enters the market, prices tend to drop Brand and features diversification needed to maintain market share Profits decline Decline stage Costs increases due to loss of economies of scale as sales volume declines, prices and profitability diminish Profit becomes more a challenge of reduction/distribution efficiency than increased sales

psychology of price

Customers are more likely to buy a product whose price end in the number 9 Anchoring can change customer perceptions of price

price skimming

A firm changes the highest initial price that customers will pay As the demand of the first customers is satisfied, the firm lowers the price to attract another, more price-sensitive segment

4 levels of product

1. core product 2. actual product 3. augmented product 4. desired product

Product

A product is a bundle of attributes (features, functions, benefits, and user) that a person receives in an exchange A product can be: An idea (recycling) A physical good ( a pair of jeans) A service (banking) Any combination of the three Products are divided into consumer and business or B2B products

brand equity

Brand equity refers to the value of a well-known brand that conjures positive (or negative) mental and emotional associations How to measure brand equity Price premium Customer satisfaction/loyalty Perceived quality Leadership/popularity Value Brand personality Organizational associations Brand awareness Market share Market price and distribution coverage

brand loyalty

Brand loyalty is a consumer's commitment to repurchase or otherwise continue using a particular brand by repeatedly buying a product or service. Perceived value, satisfaction, and brand trust are also elements of brand loyalty.

marketing campaign

A specific, defined series of activities used in marketing a new or changed product or service, or in using new marketing channels and methods

push-pull strategy

A supply chain strategy in which the initial stages of the supply chain operate on a push system, but completion of the product is based on a pull system.

brand personality

A useful template for defining brand voice and personality is the "is/is never" template Together, the brand voice and personality set the linguistic and visual tone for all branded-related communications

Advertising

A written or spoken media message designed to interest consumers in purchasing a product or service

Brands create value

Brands help simplify consumer choices Brands help create trust, so that a person knows what to expect from a branded company, product, or service This builds customer loyalty, which is valuable to businesses

Brand

An identifier A promise An asset A set of perceptions A :mind share" A name, term, sign, symbol, or design or combination of these that identifies and differentiates from the competition.

AIDA Model

Attention, Interest, Desire, Action

Brands covey meaning

Attributes specific product features Benefits: attributes translate into functional emotional benefits Values: Company values and operational principles Culture: Cultural elements of the company and brand Personality: Strong brands often project a distinctive personality User: Brands may suggest the types of consumers who buy and use the product

3 IMC goals

Communicate, Convince, Compete

Promotion

Communication by marketers that informs, persuades, and reminds potential buyers of a product in order to influence an opinion or elicit a response

4 types of consumer products

Convenience - bread, pain reliever, power cords Shopping - shoes, microwaves Specialty - highly differentiated, customer goods Unsought products - funeral plots, pest-control

Intangible Elements

Customer's experience w/ a product or company - reputation, customer experience

Profit oriented pricing

Focus on finances of business and product Profit = revenue - price Price per product is set higher than the total cost of producing and selling cost Ensure company makes a profit on each sale

4 types of customers

Hard-core Split Loyals Shifting loyals Switchers

markup

When middlemen use the term markup, they are referring to the difference between the avg cost and price of all merchandise in stock, for a particular department, or for an individual item

types of brands

Individual products Product ranges Services Organizations Individual persons Groups Events Geographic places Private label brands Media E-brands

Integrated Marketing Communications (IMC)

carefully integrating and coordinating the company's many communications channels to deliver a clear, consistent, and compelling message about the organization and its products

competitor oriented pricing

Matching competitor price requires competing on the other parts of the marketing mix Pricing above competition requires a clear advantage on some nonprice element of the marketing mix Pricing below the competition to increase sales volume w/ lower profit margins is effective if a significant segment of the market is price sensitive and/or the org's cost structure is lower than competitor's The risk of competition on price is a price war

brand platform

Mission statement Value propositions Brand promise: the singular experience your brand promises to provide to your customers Core values: guiding principles for how an organization does business Brand voice or personality Brand-positioning statement

cost plus pricing

Most widely used pricing method The manager selects a goal a particular gross margin that will produce a desirable profit level Gross margin is the difference between how much the goods cost and the actual price for which it sells This gross margin is designated by a percent of net sales The percent chosen varies among types of merchandise

3 pricing strategies

Profit-oriented pricing Competitor-oriented pricing Customer-oriented pricing

discounting strategies

Quantity discounts Seasonal discounts Cash discounts Trade discounts (given to middlemen) Personal allowances (rewards to salespeople) Trade-in allowance (cars) Price bundling (cable package)

Sales Promotion

Short-term incentives to encourage the purchase or sale of a product or service

break even price

The break-even price is the price that will produce enough revenue to cover all costa at a given level of production

Promotion Mix

The combination of promotional tools an organization uses.

penetration pricing

The price of a product is initially set low to rapidly reach a wide fraction of the market and initiate word of mouth to enlarge market share and exploit economies of scale

Digital marketing

Uses all digital media, including the Internet and mobile and interactive channels, to develop communication and exchanges with customers

Price equation

Value = Perceived benefits - perceived costs

Tangible Elements

Visual design elements - logo, color, images, tagline, packaging, etc... Distinctive product features - quality, design sensibility, personality

value based pricing

What is the highest price I can charge and still make the sale? Am I willing to sell at that price?

Product line

a group of closely related product items

KPI (Key Performance Indicator)

a measure of achievement that can be attributed to an individual, team, or department

Personal selling

a purchase situation involving a personal, paid-for communication between two people in an attempt to influence each other

Brand Positioning Statement

a sentence or brief paragraph that situates a brand in the marketplace by identifying the target audience, the product category for the brand, the unique value being offered, and some evidence supporting the value claim

Strategic Business Unit (SBU)

a subgroup of a single business or collection of related businesses within the larger organization

Public Relations (PR)

building good relations with the company's various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events

Customer realtionship management (CRM)

organized methods that a firm uses to build better information connections with clients, so that stronger company-client relationships are developed

Brand Asset Valuator

differentiation, relevance, esteem, knowledge

product portfolio management

helps the firm assess which new products would be the best additions to the existing product line, given both financial and strategic objectives

Growth Matrix

market penetration, product development, market development, diversification

Guerilla Marketing

marketing of a product using unconventional means

test marketing

the limited introduction of a product and a marketing program to determine the reactions of potential customers in a market situation

direct marketing

sales and promotional techniques that deliver promotional materials individually

diffusion of innovation

the process by which the use of an innovation, whether a product or a service, spreads throughout a market group over time and over various categories of adopters

Marketing communication (MarCom)

the element in the marketing mix that communicates the key marketing messages to target audiences

Social Media Marketing

utilization of social media or social networks to market a product, company, or brand