Marketing Week 6 notes
Marketing Week 6 notes MKT 3310-003
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This 2 page Class Notes was uploaded by Johanna Glaser on Friday September 30, 2016. The Class Notes belongs to MKT 3310-003 at University of Nebraska at Omaha taught by Amy Rodie in Fall 2016. Since its upload, it has received 2 views.
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Date Created: 09/30/16
Week 6 Highlight- Important Terms Highlighted- Important Concepts Chapter 12: Pricing Concepts Price- the value paid for a product (good, service, or experience) in a marketing exchange Pricing Concept Buyer’s perspective o Gives up resources; o Receives benefits, then o Evaluates satisfaction (whether benefits were worth the costs, from the customer’s point-of-view) Marketer Perspective o Only Marketing Mix variable that can be changed quickly! To respond to change in Demand To respond to competition o Price x Quantity= Revenue o Price can be used symbolically Price Competition Goal: to meet or beat competitor’s price Requires: must ABSOLUTELY be the Low-cost producer Advantage: flexibility to attract price conscious customers Disadvantage: if live by the sword die by the sword (when someone can under sell you, you lose) Ex. K-Mart vs. Walmart, SW Airlines Non-Price Competition Goal: to create demand NOT based on price o Emphasize product benefits o Distinguish Marketing Mix competition o Create Demand for product benefits Requires: o Target Market(TM) recognizes difference in benefits o TM must value difference in benefits Analyzing Demand Via forecasting, research, etc. Demand Curve “Quantity Demanded” typically has an inverse relationship with price o when one goes up the other goes down Note: Quantity Demanded is effected by our Price Change in “Demand” (different from change in “QD”) Results from changes in Non-price variables o Ex. Competition, environmental factors The entire Demand Curve moves back or forward, based on non-price factors Demand Elasticity (is about QD) Means: percent change in QD due to percent change in our firm’s price o Moves up/down the SAME Demand Curve (line) Elastic Demand o TM= price sensitive o Increase in Price leads to Decrease in Revenue Extra $ per unit does NOT make up for the fewer units sold (we lose revenue) o Lots of substitutes available In-elastic Demand o TM= NOT price sensitive o Increase in Price leads to Increase in Revenue Higher price does NOT drive away customers Ex. Specialty products; monopolies Breakeven(BE) Analysis Number of unit sales required to “breakeven” = number sold so that sales= total costs Revenue(R) = Price (P) x Quantity (Q) sold Unit Profit= Unit P – Unit Cost(C) Total Profit= Total R – Total C Calculating Mark-Up Percentages *Hint: Mark-up is ALWAYS the numerator Mark-up: MU; Mark-down: MD o Ex. Cost: $2.50 MU: $1.00 P: $3.50 o MU is what percentage of cost? 1.00/2.50= .4 so MU= 40% of Cost o What is Selling Price Cost + MU= $3.50 Chapter 13: MKT Channels & Supply Chain MGMT Marketing Channel Other names: o Channel of Distribution o Distribution Channel Is the network of firms that buy/sell and move the good from producer to user Functions: (2 are key) o Increase customer satisfaction o Reduce cost/ inefficiencies Accomplished by: Creating utility(value) Time, place, possession utility Streamline efficiency
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