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Five Cs of Pricing
Psychological Factors Affecting Pricing.
- 1. Company Objectives. (Profit, Sales or Competitor orientation, Marketing Penetration Pricing)
- 2. Customers. ( Demand Curve, Elasticity etc..., Psychological Factors)
- 3. Costs. (Variable, Fixed etc...)
- 4. Competition. (Oligopolistic, Monopolistic, Pure, Price War, Price Fixing)
- 5. Channel Members. (Manufacturers, Wholesalers, Retailers)
- Psychological Factors
- Reference Price (Price against buyers compare)
- External Reference Price (A higher price to compare)
- Internal Reference Price (Price in consumer's memory)
- Everyday Low Price (Strat to emphasize continuity of discounts)
- High/Low Pricing.(Strat to temporarily discounts)
Differences Between Services and Goods
4 fundamental Differences.
Ways to Improve Services.
- Differences Services / Goods
- Inseparable (produced and consumed at the same time)
- Variable (quality varies becouse its provided by humans)
- Perishable (cannot be stored)
- Ways to improve services.
- 1. Reliability. (Ability to perform services formaly and accurately)
- 2. Responsiviness. (Prompt Service)
- 3. Assurance. (Courtesy)
- 4. Empathy. (individualized attention)
- 5. Tangibles. (Appearence of Physical facilities)
New Product Developing Process.
Types of Buyers.
- 1. Observation
- 2. Brainstorming.
- 3. Prototyping.
- 4. Refining.
- 5. Implementation.
- Types of Buyers.
- Innovators - Early Adopters - Early Majority - Late Majority - Laggards
Value of Branding.
- Value of Branding.
- ● Facilitates Purchasing
- ● Establishes Loyalty
- ● Protects from Competition
- ● Reduces Marketing Costs
- ● Represents an Asset
- ● Impacts Market Value
- Brand Equity.
- 1. Brand Awareness. (How many customers are familiar with thw product)
- 2. Perceived Value (Benefits - Costs)
- 3. Brand Association. (Links with Key product attributes)
- 4. Brand Personality. (Set of Human Charecteristics associated with a brand)
- 5. Brand Loyalty. (Repeated Buying)
Product Line Depth, Breath. Category Depth and SKUs.
- Product Line Breadth - #of product lines (line = associated items)
- Product Line Depth - # of Categories in each line.
- Category Depth - # of SKUs withing a Category.
- SKUs - smalles unit aviable for inventory control.
- Branding Elements.
- Domain URL.
Research Process 5 Steps . Step 3-Data Collection Process.
How Retailers create Value
- Research Process
- Step 1 Defining Objectives.
- Step 2 Design Research Process. (Secondary, Primary, Syndicated Data)
- Step 3 Data Collection Process.
- Exploratory Research. (Observation, In Depth Interviews, Focus Group Interviews)
- Conclusive Research (Survey, Questionaire, Estatistics)
- Step 4. Analyzing Data.
- Step 5 Presenting Results.
- How retailers create Value
- Pulling it together for you.
- Succesfully Competing on a Value driven World
- Using the Four Ps to create Value (Product, Price, Place, Promotion)
STP. Segmentation, Targeting and Positioning.
5 Steps + Positioning steps
- Step1. Establish overall objectives. (Segmentation Types: Undifferentiated, Differentiated, Concentrated, Micromarketing)
- Step 2. Describe Segments.
- Step 3. Evaluate Segment Attractiveness.
- Step 4. Select Target Market.
- Step 5. Develop Positioning Strategy.
- Positioning Steps:
- 1. Determine Consumer perceptions in relatrion to competitors.
- 2. Identify competitors positions.
- 3. Determine consumer preferences.
- 4. Select the position.
- 5. Monitor the positioning strategy.
*Decision Process Steps.
*Types of buying decitions.
- Decision Process Steps.
- Step 1 Need Recognition. ( Functional, Psychological Need)
- Step 2 Search for Information. (Internal Information Search, External Information Search)
- Step 3 Evaluation of Alternatives. (Mental shortcuts: - Price, - Brand, - Product presentation)
- Step 4 Purchase and Consumption (Value based consumption, Ritual consumption)
- Step 5 Post Purchase. (Satisfaction and Loyalty)
- Types of Buying Decisions
- Limited Problem Solving
- Extended Problem Solving
- Habitual Buying.
Marketing Scenario Planning Process
- Step 1 Assess
- current situation by examining the firm’s strengths and weaknesses.
- Step 2 Assess
- what would impact firm by examining the firm’s opportunities and threats
- Step 3 Identify
- the alternative scenarios that might happen in the next three to five years.
- Step 4 Apply
- the marketing mix to the different scenarios
- 5 Assess the profitability of each
*Marketing growth strategies.
*Macro envoromental factors.
- Types of growth strategies:
- 1. Market Penetration Strategy – Use the existing market mix and focus on existing customers.
- 2. Market Development Strategy – Use the existing product to new markets both domestic and international
- 3. Product Development Strategy – Offer a new product to the current market of the company.
- 4. Diversification Strategy – Introducing a new product to a new market.
- Macro Environmental Factors:
- ● Culture
- ● Demographics
- ● Social Trends
- ● Technological Advances
- ● Economic Situation
- ● Political/Regulatory Environment
1. Planning Phase
2. Implementation Phase
3. Control Phase
- Planning Phase
- Step 1 – Define Mission Statement
- Step 2 – Conduct a Situation Analysis (SWOT)
- Step 3 – Identify and Evaluate Opportunities using STP (Segmentation-Targeting-Positioning)
- Step 4 – Implement Market Mix (Product - Price - Place - Promotion), and Allocate Resources
- Step 5 – Evaluate Performance and Make Adjustments
Marketing creation of value - Evolution of Marketing
Why marketing is Important
- Evolution of marketing
- ● Production Era – Before 1930 all focus was on production with the belief that products would sell themselves
- ● Sales oriented Era – From 1920 to 1950 manufacturing capacity exceeded demand so companies had to become much more sales oriented
- ● Market Oriented Era – After world war II consumers had choices so they began making decisions based on quality, convenience and price
- ● Value Based Marketing Era – By 1990 the emphasis moved to building relationships, serving long term needs and creating alternatives that match customer needs.
- Why Marketing is Important
- Expands global presence
- ● Requires understanding customers
- ● Often promotes same product in different countries
- Is pervasive across the organization
- ● Marketing works with all functional areasIs pervasive across the supply chain
- ● Each step in the supply chain involves marketing
- ● All members in supply chain must focus on creating value for end user consumer
- Provides choices and opportunities
- ● Expands product choices to consumers
- ● Creates employment opportunities in diverse fieldsEnriches society
- ● Fosters participating in the community
- Can be Entrepreneurial
What marketing is and its core aspects.
Marketing is an organizational function and a set of processes for creating
, capturing, communicating and delivering value
to customers and for managing customer relationship
in ways that benefit the organization
and its stakeholders.
- 1. Satisfying customer needs and wants.
- 2. Creating an exchange or trade.
- 3. Making Ps decitions. product, price, place and promotion.
- 4. Performing by individuals and organizations.
- 5. Occurring in many settings.
- 6. Helping create value.