MKT 111- Chapter 8-14

introduction stage

Low sales, selective distribution and promotion expenses, Negative or low profits, Marketing objective is to create product awareness and trial, low prices

Supply Chain Management

Managing upstream and downstream value-added flows of materials, final goods, and related information among suppliers, the company, resellers, and final consumers

MVP

Minimum Viable Product

Forecasting Sales

Q= M x A x P x F

Idea Screening

Systematic evaluation of new product ideas

price

The amount of money exchanged for a good or service or the sum of the values that customers exchange for the benefits of having a product

decline stage

declining sales, competitors exit market, negligible profits, goal is to phase out unprofitable outlets

early majority

deliberate, many informal social contacts

forecast

demand, pricing

marketing strategy development

designing an initial marketing strategy for a new product based on the product concept

design thinking-prototype

develop a model to show to others

Channel conflict

disagreements among marketing channel members on goals, roles, and rewards - who should do what and for what rewards

External idea sources for idea generation

distributors and suppliers, competitors, customers

customer value delivery network

each channel member and level adds value for the customer

payoff

expected profits after costs of marketing, R and D, operations, etc/

growth stage

fast growth of sales, rising profits, growing competitors, high distribution and building awareness and interest

Laggards

fear of debt, neighbors and friends are information sources

total cost

fixed costs plus variable costs

Conventional Channel

independent producers, wholesalers, and retailers, each function within its own role and seek to maximize own profits

cost-based pricing

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

value-based pricing

setting the price at a level that seems to the customer to be a good price compared to the prices of other options

product line pricing

setting the price steps between various products in a product line based on cost differences between the products, customer evaluations of different features, and competitors' prices

vertical marketing system

several players act as a unified system because one player has power to drive cooperation

design thinking-test

share prototypes with users for feedback

late majority

skeptics who adopt new products when they feel it is necessary

convenience store

small store open long hours with few products

Steps in the new product development process

1. Idea Generation 2. Screening 3.Concept Development and Testing 4. Business Analysis 5. Product Development 6 Test Marketing 7 Commercialization

distribution channel

A set of interdependent organizations involved in the process of making a product or service available for use or consumption by the consumer or business user

inelastic demand

A situation in which an increase or a decrease in price will not significantly affect demand for the product

elastic demand

A situation in which consumer demand is sensitive to changes in price

administered vertical marketing system

A supply chain system in which there is no common ownership and no contractual relationships, but the dominant channel member controls the channel relationship.

contractual vertical marketing system

A system in which independent firms at different levels of the supply chain join together through contracts to obtain economies of scale and coordination and to reduce conflict. (franchising)

corporate vertical marketing system

A system in which the parent company has complete control and can dictate the priorities and objectives of the supply chain; it may own facilities such as manufacturing plants, warehouse facilities, retail outlets, and design studios.

Intermediaries

Businesses involved in selling the goods and services of producers to consumers and other businesses.

horizontal conflict

a channel conflict that occurs among channel members on the same level

market modification

a company tries to find new customers, increase a product's use among existing customers, or create new use situations

fixed cost

a cost that does not change, no matter how much of a good is produced

variable cost

a cost that rises or falls depending on how much is produced

Product Concept

a detailed version of the new product idea stated in meaningful consumer terms

price ceiling

a maximum price that can be legally charged for a good or service

Elasticity of demand

a measure of how consumers react to a change in price

price floor

a minimum price for a good or service

multichannel distribution system

a single firm sets up two or more marketing channels to reach its customer segments

superstore

a very large store that meets consumers' total needs for routinely purchased food and nonfood items

dynamic pricing

adjusting prices continually to meet the characteristics and needs of individual customers and situations

psychological pricing

adjusting prices for psychological effect

segmented pricing

adjusting prices to allow for differences in customers, products, or locations where price is not based on the cost

retailing

all the activities directly related to the sale of goods and services to the ultimate consumer for personal, nonbusiness use

merchant wholesaler

an independently owned wholesale business that takes title to the merchandise it handles

value-added pricing

attaching value-added features and services to differentiate a company's offers and charging higher prices

customer value-based pricing

setting price based on buyers' perceptions of value rather than on the seller's cost

design thinking-ideate

brainstorm and come up with creative solutions

Broker

brings buyers and sellers together and assists in negotiation

competition-based pricing

setting prices based on competitors' strategies, prices, costs, and market offerings

discount store

carries standard merchandise sold at lower prices with lower margins and higher volumes

product bundle pricing

combining several products and offering the bundle at a reduced price

vertical conflict

conflict between different levels of the same channel

Omni-channel retailing

creating a seamless cross-channel buying experience that integrates in-store, online, and mobile shopping

IMC

integrated marketing communications

Internal idea sources for idea generation

internal social networks and intraprenurial programs

Crowdsourcing

inviting broad communities of people - customers, employees, independent scientists and researchers, and even the public at large - into the new product innovation process

shift to the left of the demand curve

item is less desirable and less will be sold at a given price

A shift to the right in the demand curve

item is more desirable and more will be sold at a given price

warehouse club

large store, bulk sales to consumers and small businesses

early adopters

leaders in social setting, slightly above average education

Design thinking-empathize

learn about the audience for whom you are designing and their concerns

higher price equals

lower demand

risk

minimum and maximum sales estimates

specialty store

narrow product line with deep assortment

product modification

new characteristics (features, packaging, style) and product bundling

market mix modification

new services, low prices, aggressive sales promotions, new distribution channels

good-value pricing

offering just the right combination of quality and good service at a fair price

maturity stage

peak sales, flat profits, promoting brand loyalty

optional product pricing

pricing optional or accessory products sold with the main product

captive product pricing

pricing products that must be used with the main product

R-W-W

real, win, worth doing

payment discount pricing

reducing prices to reward customer responses (paying early or volume purchases)

agent

represents buyers and sellers on an ongoing basis

supermarket

self-service store offering complete line of food products and some nonfood products

off-price retailer

sells items bought at low wholesale prices for below retail

Market-skimming pricing

setting a high price for a new product to skim maximum revenues layer by layer from the segments willing to pay the high price; the company makes fewer but more profitable sales

market penetration pricing

setting a low price for a new product in order to attract a large number of buyers and a large market share

target costing

setting costs that will ensure that the ideal selling price is met

design thinking-define

state the user's need to address

promotional pricing

temporarily pricing products below the list price, and sometimes even below cost, to increase short-run sales

Disintermediation

the cutting out of marketing channel intermediaries by product or service producers or the displacement of traditional resellers by radical new types of intermediaries

product mix pricing

the firm searches for a set of prices that maximizes profits on the total mix

demand curve

the number of units of the product that the consumers will buy at a range of prices

logistics

the planning, movement, and flow of goods and related information throughout the supply chain

break-even point

the quantity at which total costs are equal to total revenue and there is no profit

Idea Generation

the systematic search for new product ideas

Logistics Functions

transportation, warehousing, inventory management, information management

horizontal marketing system

two or more companies at one level join together to follow a new marketing opportunity

department store

varied product lines within separate departments

innovators

venturesome, higher educated, use multiple information sources

price adjustments

when you change the basic price to account for customer and situational differences

marketing strategy development- stage 3

•Long-run goals for sales, profits • Marketing mix strategy

marketing strategy development- stage 2

•Price • Distribution • Yr 1 marketing plan/budget

marketing strategy development- stage 1

•Target market •Value proposition •Yr 1-2 goals for sales, market share, and profit