tuesday 12th- part 6

promotional pricing relates to

a company temporarily prices its product below list price, and sometimes even below cost, to create buying excitement and urgency

as part of a company's overall value proposition, price plays

a key role in creating customer value and building customer relationships

all product lines and items offered to customers by

a particular seller make up the product mix- the mix can be described by four dimensions: width, length, depth and consistency- these dimensions are the tools for developing the company's product strategy

high brand equity provides a company with many competitive advantages- including that

a powerful brand enjoys a high level of consumer brand awareness and loyalty - also, because the brand name carries high credibility, the company can more easily launch line and brand extensions- also, a powerful brand offers the company some defence against fierce price competition - also, above all, a powerful brand forms the basis for building strong and profitable customer relationships

price decisions must be coordinated with product design, distribution

and promotion decisions to form a consistent and effective integrated marketing program

during the product development stage of the product life cycle, sales

are zero and the company has high investment costs

marketers need to position their brand clearly in target customers' minds - they can position brands at any of three levels -

at the lowest level, companies can position their brand on product attributes a brand can be better positioned by associating its name with a desirable benefit the strongest brands go beyond attribute or benefit positioning - positioned on strong beliefs and values, engaging customers on a deep, emotional level - customers don't just like these brands, they have strong emotional connections with them and love them unconditionally

services marketing strategy calls for

both internal and external marketing- with internal marketing relating to motivating employees and interactive marketing to create service delivery skills among service providers

4 major brand strategy decisions:

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

good value pricing relates to offering just the right

combination of quality and good service that customers want at a fair price

value added pricing relates to

companies setting a high price and supporting this by attaching value adding features and services to differentiate their offerings

the company needs to train its people to be

customer centred

a powerful brand forms the basis for building strong and profitable

customer relationships - the fundamental asset underlying brand equity is customer equity- the value of the customer relationships that the brand creates- a powerful brand is important, but what it really represents is a profitable set of loyal customers- the proper focus of marketing is building customer equity, with brand management serving as a major marketing tool- companies need to think of themselves not as portfolios of products, but as portfolios of customers

common pricing objectives include

customer retention, building profitable relationships with customers, and preventing competition

3 main pricing strategies

customer value based pricing, cost based pricing, and competition based pricing

good service companies focus attention on both

customers and employees- they understand the service profit chain, which links service firm profits with employee and customer satisfaction

customer centred new product development begins and ends with understanding

customers and involving them in the process

the most successful new products are those that are

differentiated, solve major customer problems, and offer a compelling customer value proposition

to succeed, service marketers must create competitive

differentiation, offer high service quality and find ways to increase service productivity

line stretching involves extending a line

downward, upward or in both directions to occupy a gap that might otherwise be filled by a competitor

high brand equity is a very valuable asset- brand valuation is the process of

estimating the total financial value of a brand

2 types of value based pricing -

good value pricing and value added pricing

good pricing starts with an understanding of

how consumers' perceptions of value affect the prices they are willing to pay

price should be set to

match customers' perceived value

customer centred new product development focuses on finding

new ways to solve customers' problems and create more customer satisfying experiences

in the product introduction stage there are

no profits

product development is a strategy for promoting company growth by

offering modified or new products to current market segments; developing the product concept into a physical product to ensure that the product idea can be turned into a workable product

many companies are now developing crowd-sourcing or

open-innovation new product idea programs, which invite broad communities of people into the new product innovation process

most companies produce a product line rather than a single product- a product line is a group of

products that are related in function, customer purchase needs or distribution channels

the growth stage of the life cycle is a period of

rapid market acceptance and increasing profits

branding decisions include

selecting a brand name and developing a brand strategy

with value based pricing, the company first assesses customer needs and value perceptions - it then

sets its target price based on customer perceptions of value- the targeted value and price drive decisions about what cost can be incurred and the resulting product design - as a result, pricing begins with analysing consumer needs and value perceptions, and price is set to match consumers' perceived value

marketers work to find ways to make the service more tangible,to increase the productivity of providers who are inseparable from their products, to

standardise the quality in the face of variability, and to improve demand movements and supply capacities in the face of service perishability

when modifying the product, the company changes some of the product's characteristics

such as quality, features or style, to attract new users or inspire more usage

brands are not in the long term maintained by advertising but rather by

the customer's brand experiences - customers come to know a brand through a wide range of contacts and interactions

during the brand name selection process, a company should consider

the product and its benefits, the target market and proposed marketing strategies - after selecting the name the company should be looking to protect it through trademarking

maturity is a period of slowdown in sales growth because

the product has achieved acceptance by most potential buyers

business analysis is a review of

the sales, costs and profits projections for a new product to determine whether these factors satisfy the company's objectives

price can be defined as

the sum of all the values that customers give up in order to gain the benefits of having or using a product or service

companies often position their products on price and

then tailor other marketing mix decisions to the prices they want to charge

effective customer orientated pricing involves

understanding how much value consumers place on the benefits they receive from the product and setting a price that captures that value

product concept is a detailed

version of the new product idea, stated in meaningful consumer terms