MARKETING MANAGEMENT 12th edition Chapter 14
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- 1. MARKETING MANAGEMENT 12 th edition C hapter 14 D eveloping P
ricing S trategies and P rograms by Dr. Paitoon Chetthamrongchai .
[email_address] 081-989-0098
- 2. Common Pricing Mistakes
- Determine costs and take traditional industry margins
- Failure to revise price to capitalize on market changes
- Setting price independently of the rest of the marketing
mix
- Failure to vary price by product item, market segment,
distribution channels, and purchase occasion
- 3. Setting Pricing Policy 1. Selecting the pricing objective 2.
Determining demand 3. Estimating costs 4. Analyzing competitors
costs, prices, and offers 5. Selecting a pricing method 6.
Selecting final price
- 4. Step 1: Selecting the Pricing Objective
- Product-quality leadership
- 5. Step 2: Determining Demand
- Price elasticity of demand
Step 3: Estimating Costs
- Activity-Based Cost Accounting
- 6. Types of Costs Total Costs Sum of the Fixed and Variable
Costs for a Given Level of Production Fixed Costs (Overhead) Costs
that dont vary with sales or production levels. Executive Salaries
Rent Variable Costs Costs that do vary directly with the level of
production. Raw materials
- 7. Step 5: Selecting a Pricing Method
Step 4: Analyzing competitor
- 8. Step 6: Selecting the Final Price
- Impact of other marketing activities
- Gain-and-risk sharing pricing
- Impact of price on other parties
- 9. Consumer Psychology and Pricing
- We often actively process price information, interpreting
prices in terms of their knowledge from past purchasing experience,
formal communications, informal communication etc.
- 10. Price-Adaptation Strategies
- 11. Price-Adaptation Strategies
- 12. Promotional Pricing Tactics
- Warranties and service contracts
- Psychological discounting
- 13. Discriminatory Pricing Time Product-form Customer Segment
Location
- 14. Increasing Prices
- Delayed quotation pricing
- 15. Brand Leader Responses to Competitive Price Cuts
- Maintain price and add value
- Increase price and improve quality
- Launch a low-price fighter line
- 16. MARKETING MANAGEMENT 12 th edition Chapter Designing and
Managing Value Networks and Marketing Channels by Dr. Paitoon
Chetthamrongchai . [email_address] 081-989-0098
- 17. What is a Value Network and Marketing-Channel System?
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- Value Network : system of partnerships and alliances that a
firm creates to source, augment, and deliver its offerings.
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- Marketing channel : sets of interdependent organizations
involved in the process of making a product or service available
for use or consumption.
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- Hybrid channel : multiplying the number of channels.
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- Ex. enables its customers to do transactions in branch offices,
over the phone, or via the Internet
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- IBMs sales force sells to large accounts, outbound
telemarketing sells to medium-sized accounts, direct mail sells to
small accounts, retailers sell to still smaller accounts, and the
Internet to sell specialty items
- 18. What is a Value Network and Marketing-Channel System?
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- Channel integration characteristics:
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- Ability to order a product online, and pick it up at a
convenient retail location: 7-11 in Japan
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- Ability to return an online-ordered product to a nearby
store
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- Right to receive discounts based on total of online and
off-line purchases
- 19. How a Distributor Effects an Economy of Effort
- 20. What Work is Performed by Marketing Channels?
- Channel Functions and Flows
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- Gather information about potential and current customers,
competitors, and others
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- Develop and disseminate persuasive communications to stimulate
purchasing
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- Reach agreements on price and other terms so that transfer of
ownership or possession can be effected
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- Place orders with manufacturers
- 21. Five Marketing Flows in the Marketing Channel
- 22. What Work is Performed by Marketing Channels?
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- Zero-level channel (a.k.a. direct-marketing channel)
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- Reverse-flow channel: reusing
- Information Highway Channels
- 23. Consumer and Industrial Marketing Channels
- 24. Channel-Design Decisions
- Major Channel Alternatives
- 25. Channel Dynamics
- Distribution channels do not stand still.
- New wholesaling and retailing institutions emerge
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- Vertical Marketing Systems
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- Conventional marketing channel
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- Vertical marketing systems (VMS)
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- Corporate and Administered VMS: combines successive stages of
production and distribution under single ownership.
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- Wholesaler-sponsored voluntary chains/ Retailer cooperatives/
Franchise organizations
- 26. Channel Dynamics
- The New Competition in Retailing
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- Horizontal Marketing Systems: two or more unrelated companies
put together resources or programs to exploit an emerging marketing
opportunities.
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- Multichannel Marketing Systems: occurs when a single firm use
two or more marketing channels to reach one or more customer
segment. Ex. CP, True, UBC
- 27. MARKETING MANAGEMENT 12 th edition Chapter Managing
Retailing, Wholesaling, and Market Logistics by Dr. Paitoon
Chetthamrongchai . [email_address] 01-989-0098
- 28. Major Retailer Types Retailing Specialty Store : Narrow
product line with a deep assortment. A clothing store would be a
single-line store; a mens clothing store would be a limited-line
store; and a mens custom-shirt store would be a superspecialty
store. Examples: Athletes Foot, Tall Men, The Limited, The Body
Shop. Department Store : Several product linestypically clothing,
home furnishings, and household goodswith each line operated as a
separate department managed by specialist buyers or merchandisers.
Examples : Sears, JCPenney, Nordstrom, Bloomingdales. Supermarket :
Relatively large, low-cost, low-margin, high volume, self-service
operation designed to serve total needs for food, laundry, and
household products. Examples : Kroger, Food Emporium, Jewel.
Convenience Store : Relatively small store located near residential
area, open long hours, seven days a week, and carrying a limited
line of high-turnover convenience products at slightly higher
prices, plus takeout sandwiches, coffee, soft drinks. Examples :
7-Eleven, Circle K.
- 29. Retailing
- Categories of nonstore retailing
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- Television direct-response marketing
- 30. Major Types of Retail Organizations Corporate Retailing
Corporate Chain Store : Two or more outlets commonly owned and
controlled, employing central buying and merchandising, and selling
similar lines of merchandise. Their size allows them to buy in
large quantities at lower prices, and they can afford to hire
corporate specialists to deal with pricing, promotion,
merchandising, inventory control, and sales forecasting. Examples :
Tower Records, GAP, Pottery Barn. Voluntary Chain : A
wholesaler-sponsored group of independent retailers engaged in bulk
buying and common merchandising. Examples : Independent Grovers
Alliance (IGA), True Value Hardware, Retailer Cooperative :
Independent retailers who set up a central buying organization and
conduct joint promotion efforts. Examples : Associated Grocers, ACE
Hardware. Consumer Cooperative : A retail firm owned by its
customers. In consumer coops residents contribute money to open
their own store, vote on its policies, elect a group to manage it,
and receive patronage dividends.
- 31. Retailing
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- New retail forms and combinations
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- Growth of intertype competition
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- Growth of giant retailers
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- Growing investment in technology
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- Global presence of major retailers
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- Selling an experience, not just goods
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- Competition between store-based and non-store-based
retailing
- 32. Wholesaling
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- Buying and assortment building
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- Management services and counseling
- The Growth and Types of Wholesaling
- 33. Market Logistics
- Supply chain management (SCM):
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- involving procuring the right inputs, converting them
effectively into finished products.
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- Helping the company identify superior supplier and distributors
and help them improve productivity, which brings down the companys
costs.
- 34. Market Logistics
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- involving planning the infrastructure to meet demand, then
implementing and controlling the physical flows of materials and
final goods from points of origin to point of use.
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- Market logistic planning has four steps.
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- Deciding on the companys value proposition to its
customers
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- Deciding on the best channel design and network strategy for
reaching the customers
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- Developing operational excellence in sales forecasting,
warehouse management, transportation management, and materials
management
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- Implementing the solution with the best information systems,
equipment, policies, and procedures
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- Integrated logistics systems (ILS)
- 35. Market Logistics
- Market-logistics Decisions
- 36. Major Logistics Functions Inventory When to order How much
to order Just-in-time Costs Minimize Costs of Attaining Logistics
Objectives Warehousing Storage Distribution Order Processing
Received Processed Shipped Logistics Functions Transportation Rail,
Truck, Water, Pipeline, Air
- 37. Goals of the Logistics System
- Provide a Targeted Level of Customer Service at the Least
Cost.
- Maximize Profits , Not Sales.
Higher Distribution Costs/ Higher Customer Service Levels Lower
Distribution Costs/ Lower Customer Service Levels