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