Marketing Review 2
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This 8 page Study Guide was uploaded by Hadiya Iqbal on Monday February 9, 2015. The Study Guide belongs to 3336 at University of Houston taught by Koch in Fall. Since its upload, it has received 105 views. For similar materials see Marketing in Marketing at University of Houston.
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Date Created: 02/09/15
MARK Midterm 2 Review In marketing a product is anything that can be offered to a market that might satisfy a want or need 0 0000000 000 000000000 0 New Product original products product improvements product modifications and new brands that the firm develops through its RampD research and development efforts No competitive point of difference Poor positioning Product was of poor quality Product didn t deliver on promised benefits Too little marketing support Poor perceived pricequality relationship Faulty estimates of market potential and other marketing research mistakes Faulty estimates of production and marketing costs Improper channels of distribution selected Rapid change in the market after the product was introduced Product superiorityquality Economic advantage to user Overall companyproj ect fit Technological compatibility Familiarity to the company Market need growth and size Competitive situation Defined opportunity Market driven process Customer service I Internal Sources RampD picking the brains of own people to come up with an idea I External Sources ideas from distributors and suppliers and customers 9 seeps my generation screemng andtesting development Business 9 Plodum Test 6 mm r r I t n analysis development marketng of e ma Iza Io I Major stages in new product development I Know what are considered more important sources than others and why I Test Marketing the stage of a new product development in which the product and its proposed marketing program are tested in realistic market settings I Strengths o Gives the marketer experience with marketing a product before going to the great expense of full intro 0 Lets the company test the product and its entire marketing program targeting positioning strategy advertising distribution pricing branding and packaging and budget levels I Weaknesses o Costly o Takes time which allows competitors to gain advantage 0 Little or no test marketing is done 0 You use them when introducing a new product when risks are high or when management is not sure of product then you test market 0 Product lifecycle PLC Course of a product s sales and profits over its lifetime Includes 5 distinct stages 0 Product development begins when the company finds and develops a new product idea During product development sales are zero and the company s investment costs mount Introduction is a period of slow sales growth as the product is introduced in the market Profits are noneXistent in this stage because of the heavy eXpenses of product introduction Growth is a period of rapid market acceptance and increasing profits Maturity is a period of slowdown in sales growth because the product has achieved acceptance by most potential buyers Profits level off or decline because of increased marketing outlays to defend the products against competition Decline is the period when sales fall off and profits drop I Not all products follow all 5 stages of the product life cycle Some products are introduced and die quickly others stay in the mature stage for a long long time Some enter the decline stage and are then cycled back into the growth stage through strong promotion or repositioning Sales and pro ts Pro ts 0 4 i44 Tune Product development Introduction Growth Maturity Decline Losses investment Pricing Strategies and Approach 0 Market Skimming Pricing high initial prices to skim revenue layers from the market 0 O 0 Product quality and image must support the price Buyers must want the product at the price Costs of producing the product in small volume should not cancel the advantage of higher prices Competitors should not be able to enter the market easily 0 Market Penetration Pricing sets a low initial price in order to penetrate the market quickly and deeply to attract a large number of buyers quickly to gain market share 0 Price sensitive market 0 Inverse relationship of production and distribution cost to sales growth 0 Low prices must keep competition out of the market Product Mix Pricing Strategies 0 Product Line Pricing takes into account the cost differences between products in the line customer evaluation of their features and competitors prices I OptionalProduct Pricing takes into account optional or accessory products along with the main product I Captiveproduct pricing involves products that must be used along with the main product I Product bundle pricing combines several products at a reduced price Price Adiustment Strategies I Discount and allowance pricing reduces prices to reward customer responses such as paying early or promoting the product I Segmented pricing is used when a company sells a product at two or more prices even though the difference is not based on cost 0 Customer segment pricing I Denny s Senior Citizen Menu 0 Product form pricing I Round Trip Air to China Econ vs Bus First 0 Time based pricing I Matinees Happy Hour etc I Psychological pricing occurs when sellers consider the psychology of prices and not simply the economics 0 Promotional pricing is when prices are temporarily priced below list price or cost to increase demand 0 Dynamic pricing is when prices are adjusted continually to meet the characteristics and needs of the individual customer and situations Value in pricing is to attach value to features and services to differentiate their offers and thus support their higher prices High Low Pricing involves charging higher prices on an everyday basis but running frequent promotions to lower prices temporarily on selected items Contrast to everyday low prices Price elasticity of demand illustrates the response of demand to a change in price Inelastic demand occurs when demand hardly changes when there is a small change in price Elastic demand occurs when demand changes greatly for a small change in price Price elasticity of demand change in quantity demand change in price Marketing channel consists of firms that have partnered for their common good with each member playing a specialized role Intermediaries offer producers greater efficiency in making goods available to target markets Through their contacts experience specialization and scale of operations intermediaries usually offer the firm more than it can achieve on its 0W1 Producer Producer Producer Producer Producer Producer Wholiesaler Manufacturer s 39 39 39 representatives or sales branch Business Business Hemmer I Ratalle r I distributor I distributor Consumer Consumer Consumer BUSMQSS BUSimeSS Bus iness customer customer customer Channel 1 Channel 2 Channel 3 Channel 1 Channel 2 Channel 3 A Customer marketing channels B Business marketing channels Disintermediation occurs when product or service producers cut out intermediaries and go directly to final buyers or when radically new types of channel intermediaries displace traditional ones Intense Distribution stocking the product in as many outlets as possible Exclusive Distribution giving limited numbers of dealers the exclusive right to distribute the company s product in their territories Selective Distribution the use of more than one but fewer than all of the intermediaries who are willing to carry the company s product l Intensive distribution i Ca nudv and tooth paste Exclusive distribution is Luxurveutomobiles and prestige olotning Selective distribution is Television and borne epplienoe Showrooming is when you see a product at a retail store like Best Buy and go buy it online The promotion mix is a blend 0 advertising public relations personal selling and direct marketing tools that the company uses to persuasively communicate customer value and build customer relationships 0 Direct marketing involves making direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships through the use of direct mail telephone direct response television e mail and the Internet to communicate directly with specific consumers 0 Catalog 0 Telemarketing o Kiosks Integrated marketing communications is the integration by the company of its communication channels to deliver a clear consistent and compelling message about the organization and its brands Careflulliy blended mix of promotion tools Personal Advertlsmg selming 3 Consistent clear 1 and compelling company Sales and brand Public promotion messages relations 395 1239 Direct marketing AIDA Model used to design a message to deliver to audience 0 Get Attention 0 Hold Interest 0 Arouse Desire 0 Obtain Action Reach and Frequency Reach is the number of different people who are exposed an advertising message at least once Frequency is the number of times that are exposed to the message A related term is coverage which is the potential number of people exposed to a message 0 Know why you might do advertising informative persuasive reminder know how to identify the type of objective 0 4 or 5 questions about objectives of advertising 0 Know what a content site is content in general KNOW IT 0 Opt in and opt out and permission based emails 0 Core basic strategies of Michael porter study all 4 be able to identify them 0 Know difference between SEO and pay per click 0 Know appropriateness of different media types 0 Look at power point on different type of media forms print outdoor etc
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