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Review MKT 102
HAUT Spring 2015
What Is a Product?Levels of Product and Services
Services Marketing
Nature and Characteristics of a Service
New-Product DevelopmentReasons for new product failure
Overestimation of market size
Poor design
Incorrect positioning
Wrong timing
Priced too high
Ineffective promotion
Management influence
High development costs
Competition
Branding Strategy: Building Strong BrandsBrand Development Strategies
Channel Design DecisionsIdentifying Major Alternatives
Factors to Consider When Setting Prices
Everyday low pricing (EDLP) involves charging a constant everyday low price with few or no temporary price discounts
High-low pricing involves charging higher prices on an everyday basis but running frequent promotions to lower prices temporarily on selected items
Customer Perceptions of Value
Online Marketing
Business to consumer
(B2C)
Business to business (B2B)
Consumer to consumer
(C2C)
Consumer to business (C2B)
Online Marketing Domains
The Promotion MixMajor Promotion Tools
Product and Service Decisions
Brand is the name, term, sign, or design—or a combination of these—that identifies the maker or seller of a product or service
Brand equity is the differential effect that the brand name has on customer response to the product and its marketing
Individual Product and Service Decisions
Product and Service Decisions
Product line length is the number of items in the product line
• Line stretching• Line filling
Product Line Decisions
What Is a Product?
• Consumer products are products and services for personal consumption
• Classified by how consumers buy them– Convenience products– Shopping products– Specialty products– Unsought products
Product and Service Classifications
Supply Chains and the Value Delivery Network
Upstream partners include raw material suppliers, components, parts, information, finances, and expertise to create a product or service
Downstream partners include the marketing channels or distribution channels that look toward the customer
Supply Chain Partners
Channel Behavior and Organization
Conventional distribution systems consist of one or more independent producers, wholesalers, and retailers. Each seeks to maximize its own profits, and there is little control over the other members and no formal means for assigning roles and resolving conflict.
Conventional Distributions Systems
Channel Behavior and Organization
Vertical marketing systems (VMSs) provide channel leadership and consist of producers, wholesalers, and retailers acting as a unified system and consist of:
• Corporate marketing systems• Contractual marketing systems• Administered marketing systems
Vertical Marketing Systems
Channel Behavior and Organization
Corporate vertical marketing system integrates successive stages of production and distribution under single ownership
Vertical Marketing Systems
Channel Behavior and Organization
Contractual vertical marketing system consists of independent firms at different levels of production and distribution who join together through contracts to obtain more economies or sales impact than each could achieve alone. The most common form is the franchise organization.
Vertical Marketing Systems
Channel Behavior and Organization
Franchise organization links several stages in the production distribution process
– Manufacturer-sponsored retailer franchise system– Manufacturer-sponsored wholesaler franchise system– Service firm-sponsored retailer franchise system
Vertical Marketing Systems
Channel Behavior and Organization
Administered vertical marketing system has a few dominant channel members without common ownership. Leadership comes from size and power.
Vertical Marketing Systems
Growth and Benefits of Direct Marketing
• Convenience• Ready access to many products• Access to comparative information about
companies, products, and competitors• Interactive and immediate
Benefits to Buyers
Growth and Benefits of Direct Marketing
• Tool to build customer relationships• Low-cost, efficient, fast alternative to reach
markets• Flexible• Access to buyers not reachable through other
channels
Benefits to Sellers
New-Product Pricing Strategies
Market-skimming pricing is a strategy with high initial prices to “skim” revenue layers from the market
• 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
New-Product Pricing Strategies
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
• Price sensitive market• Inverse relationship of production and
distribution cost to sales growth• Low prices must keep competition out of the
market
Pricing Strategies