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Product Planning
decision making related to new and existing products
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Convenience Good
purchased frequently, minimum shopping effort (low involvement)
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Shopping goods
goods where: price comparison and visit of several stores before purchase
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specialty goods
goods that have strong buyer loyalty. and buyer accepts no substitute
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unsought goods
- have no demand
- no one wants it
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Industrial goods
basic materials the become part of teh end product.
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operating supplies
low cost items that aid in production
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Tangible products
can be described by color size or weight
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imatative products
me too products not new to market
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Idea generation
search for new product opportunities
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products screening
analyze based on product stregnth and weaknesses
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concept testing
- new ideas
- subject to public scrutiny
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business analysis
evaluation of comercial feasibility
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product development stage
ideas produced and limited marketing strategy created
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product adoption
process of customer learning about new products
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Innovators
first to buy - younger more affluent
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early adopters
second to buy.
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early majority
usually above average socio economics- usually influenced by ads and sales people
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late majority
- 4th level to purchase
- resistant to change (middle aged or older)
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laggards
last to buy, price conscious
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product positioning
product perception
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mix expansion
new groth opportunities
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wide product mix
diverse products
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deep product mix
smaller product lines
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Product Life Cycle - PLC
Growth
profits become positive
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Product Life Cycle
Maturity
slowing sales, market saturation, consumer demand peaks, more price competition
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Product Life Cycle
Decline
sales decline
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Manufacturer Brands
Created by manufacturers ie. Sears Die hard, Sears craftsman
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Dealer brands
created by middlemen or retailers (Walmart brand)
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Good Brand name
state benefits, short, spellabe, pronouncable, pleasant sounding, distinct and memorable
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Brand Familarity types
- Brand Insistance
- Brand Preference
- Brand recognition
- Brand non-recognition
- Brand rejection
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Family brand
same brand applied to multiple products
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generics
have no brand name
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licensed brand
an established brand others pay to use (the name)
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trademarks
brand names, marks or characters to identify a product
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packaging charactaristics
protect, promote, inform
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what are charactaristics of services?
intangible, insepable from the provider, perishable (cannot be returned), variable (cannot be performed same every time)
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Distribution Channels are:
designed on teh needs of seller
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Distribution includes?
transport, inventory, customer service, research, promotion, product panning, sorting
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accumulation?
Pooling small amount of items together to transport as a group
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direct channel
move goods from producer to consumer (barnes and noble online)
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indirect channel
move goods using intermediary (seller using Amazon)
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Channel width
all of the members of the channel
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Intensive Distribution
use all channels who will sell to the end consumer
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selective distribution
selles through select wholesalers and retailers
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Exclusive Distribution
uses only 1 or 2 intermediaries in a market
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Corporate Distribution
one firm owns all channels
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contractural distribution arrangements
contract the specifies performance terms for members of a distribution channel
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administered distribution arrangements
coordinate channel operations through dominant channel member (Market power of the other members is enough to secure voluntary cooperationi of other channel members)
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vertical integration
acquire firms that operate different distribution channel levels
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horizontal integration
acquiring firms that operate at the same distribution channel level.
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channel control
influence of other members
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channel conflict
disagreements over distribution channel practices
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horizontal channel conflict
firms having conflict at same distribution level
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vertical channel conflict
firms having conflict at different distribution level
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Pushing Distribution strategy
uses promotion to insure intermediary cooperation
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pulling distribution strategy
generates consumer demand to pull product through distribution channels. (Radio airplay to get distribution)
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total cost concept
minimizing costs and satisfying customer demands are conflicting objectives. (How to provide good cust service at lowest cost?)
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Distribution center concept
warehousing in relation to a market (Walmart)
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Sub optimization
reducing cost in one function that increase costs of other functions
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customer service standard
different customes require different levels of customer service
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stock out
shortage; carrying too little product
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usage rate
rate inventory sold
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safety stock
inventory on hand to avoid stock out
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Eonomic order quantity
order size that minimizes the total cost of carrying inventory and ordering
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intermodal
two or more couriers for transport
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wholesaling
resale of products to buyers or other wholesalers
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merchant wholesalers
take title of and posessionof the product they are wholesaling
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rack jobbers
full service merchant wholesalers (provide display racks in stores for their product)
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drop shippers
buy product from manufacturer and arrange for delivery to retailers
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agents
do not take title of product they sell
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broker
brings buyers and sellers together (Amazon.com)
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retailing
all of the activities related to the sale of products to the "Final" Consumer.
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Verticle marketing system
groups retail units into a group to enhance market power, advantage of being viewed as a chain
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franchise
verticle marketing; provides use of name, trademarks, assistance, personnell, inventory to support they retailing efforts
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scrambled merchandising
adding products not a part of typical product line
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direct marketing
internet marketing, tv, catalog, direct mail, infomercials,
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promotion mix
ads, selling, publicity, pub relations, sales promotions
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communication channels
the medium where promotions is sent\delivered (Internet, radio etc)
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Reach
percentage of target market exposed to an ad
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Selling process
- prospecting -identify leads
- pre approach - analyize buyer behavior
- approach - meet buyer
- presentation - canned presentation (meet objections raised by prospect, give any requested clarification)
- close - gain purchase commitment
- follow up - salesperson to assure customer satisfaction
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elasticity of demand
the percent change in the units demanded divided by the percentage chane in the price of the product
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elastic demand
increase in price produces decreas in demand
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inelastic demand
increase in price product decrease in demand and increase in revenue
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unitary elasticity
change in demand is propertional to change in price and revenue is unchanged.
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Sherman Act 1890
Monopoly illegal
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Robinson Patman Act 1936
wholesaler cannot discriminate against a buyer and charge higher price unless justified via cost savings or competition
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Psychological pricing
- prestige pricing
- odd even pricing (pricing just below the dollar)
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Leader pricing
price to lead customer into building
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production era
second half of 19th century
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Sherman Act
1890 prevent business from practicing predatory pricing: monopolization and conspiracies
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Robinson Patman (1936)
prevent wholesaler price descriminiation
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Price skimming
introduce new products at high prices
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Penetration pricing
introduce new products at low prices
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cost based pricing
proice as product of cost. Cost + ROI = price
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Demand pricing
price based on customer response to price. 1. prestige pricing 2. odd even pricing 3. price lining 4. leader pricing
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one price
same price to all buyers
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flexible pricing
different prices to different buyers (car dealer)
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Geographic pricing
price reflecting differnt levels of transportation costs related to distance between buyers and seller (zone pricing - price set by zones or distance of shipping and snipping costs)
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unit pricing
price per unit
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alternative pricing
when price reflects things other than profit maximization
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prestige price
high price to denote high value
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odd even price
prcin just below the dollar value -makes user feel like he has received a discount
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leader pricing
selling below usual price to gain attention or get someone in store
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price lining
setting price for different lines of a product via price levels.
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trade discount
reduction in price given as trade to perform a certain task
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quantity discount
price reduction based on size of order
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cash discount
discount if paid in certain time. 2/10 Net 30 = 2% discount of paid in 10 days.
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Break even analysis
estimates impace of pricing policy based on levels of profit.
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compensatory ethics
morals and ethics determined by consequences
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non copensatory
morals and ethics are without exception
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reverse logistics
recycling
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green marketing
marketing products that do not harm the environment.
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product positioning
shaping of a product in the consumers mind
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Marketing Plan
marketing strategy and steps to carry out the strategy
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situation analysis
identifies threats, stregnths and weakness of marketing environment
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marketing objectives
specifies goals of firm that the marketing should acheive
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Marketing strategy
how marketing mix is used to achieve organization goals
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Swot matrix
assess value of new opportunities. stregnths, weaknesses, opportunities and threats
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Star
high profits - High cost
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cash cow
high profits - low cost
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probem child
low profits - high cost
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dog
low profits - no growth
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marketing myopia
narrow minded management loosing sight of the customer being first
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Behavior dimensions
purchase occasion, user status, user rate, brand loyalty
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psychographics
influence consumers pattern of living or lifestyle. (Activities, intrests, Opinions) AIO
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High involvement stages
- P - problem
- S - search for info
- E - evaluate alternatives
- P - purchase decision
- P - post purchase behavior
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cognitive dissonance
consumer evaluates purchase desicion after the sale has been made
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consumer goods
purchased frequently
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shopping goods
consumer usually make price and quality comparisons at several stores before purchase
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specialty goods
buyers have strong buying loyalty. will accept no substitutes
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product screening
analyze based on stregnths and weaknesses
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concept testing
subjecting new ideas to public scrutiny
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business analysis
evaluate commercial feasability
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Product adoption
process of learning about a product
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diffusion process
rate of adoption
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diffusion adoptors (adoption process)
- I - Innovators
- E - Early adoptoer
- E - Early majority
- L - late majority
- L - laggards
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Product life cycle
- I - ntroduction
- G - rowth
- M - aturity
- D - ecline
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G - rowth
point at which profitability becomes positive
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M - aturity
slowing sales, market saturation, price competition increase
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D - ecline
Industry wide sales decline
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Vertical Integration (distribution)
acquire firms that operate at different channel levels
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Horizontal integration
acquiring firms that operate at the same level
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Total cost concept
minimizing cost and satisfying customer demands are conflicting objectives
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sub optimiztion
cost reduction that increases cost of other functions
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customer service standard
customers require different levels of customer service
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vehicle marketing system
grouping retail units into a collective to allow for more competitive power
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wheel of retailing
new retailers enter market as low status low price competitors
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scrambled merchandising
offering products outsisde typical product lines
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Promotion objectives
address 3 goals of marketing mix
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unitary elasticity
demand and price are proportional without changeing revenue
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elastic
increase in price product decrease in demand
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inelastic
increase in price product decrease in demand but increase in revenue
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markup
(newprice - cost) /new price + %
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markdown
(old price - new price)/oldprice = %
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