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MKT 305 Final- CSU
Terms in this set (56)
Services- Generic Approach
DO NOT BELIEVE- the ideas that goods and services should not be distinguished between- selling the same thing-> benefits and satisfaction
Services- Business Definition
An act or performance which is intangible and has no lasting result- what marketers use
Services- Continuum Approach
A service can be a combination of both goods and services. On a scale from pure service to pure good.
treating employees as customers and developing systems and benefits that satisfy their needs. Managers are motivators and good employees produce good services.
Service Characteristics: Intangibility
Can't touch, see, taste- the main reason services are different than goods. Try to make the intangible tangible-> create physical evidence of a job well done.
Service Characteristics: Inseparability
A person must deliver the service -> can't separate the two
Attitude on the person delivering the service
Service Characteristics: Perishability
There is a set time that they can sell; if you don't sell service now you will loose the money. Need to understand peak and lull times.
Service Characteristics: Variability
Physical products are homogeneous: services are heterogeneous. People can vary and this varies service. Combat with Internal Marketing.
The degree in which you feel you need to have the service.
The ability for you to chose your service provider.
New Product Development Process
1) Generate Ideas- don't get rid of anyone's ideas-> brainstorming/ new ideas can come from employees
2)Screen Ideas- first product reduction stage -> getting rid of the 'dog' ideas and spot the good ones
3)Business Analysis- break even analysis; sales forecasting, cannibalization assessment, concept test.
4)Product Development- where you really start to loose money, actually making the product (money is dependent on what you are making) -> choose the 4 P's and target marketing and positioning
5)Test Marketing (OPTIONAL)- most products fail in the test market
6)Commercialization- too late to get rid of product, most money involved, blitz of advertising & promotion, full scale production
testing new product concepts with a group of target consumers to find out if the concepts have strong consumer appeal
Product Life Cycle: Introduction
A product that changes the way you live, new to the world. Stimulate primary demand with primary demand advertising. Make no money, usually loose. Prices are high as companies offset research and development costs. Little to no competition.
Product Life Cycle: Growth
Sales are increasing at an increasing rate. Most profitable, less manufacturing costs. Limited competitors, they try to move-in. Simulated selective demand with selective advertising. Demand exceeds supply.
Product Life Cycle: Maturity
Sales are increasing at a decreasing rate -> hit peak and starts to decline. Product is now a no-growth market. Supply exceeds demand. Most saturated with competitors. Most expensive (money on marketing) & is longest stage.
Product Life Cycle: Decline
Industry is dying, sales are declining. You can recover, except for obsolete technology. You can still make a profit;
harvesting- inform loyal customers that product is being discontinued so they have to stock pile
Selling your brand to someone else.
Product Life Cycle
introduction, growth, maturity, decline. Not every product goes through all 4 stages, most skip to the 3rd. Individual product life cycle is not brand life cycle.
Extending Product Life Cycle
1) Never let your product decline
2) Reverse back into market maturity.
Every product that they make has the same name on it. Ex. Levi's
Private Label Brands
-Own, control, & exclusively sell store brands.
-Not advertised, sold at a specific store.
National (Manufacturer) Brands
Designed, produced, and marketed by a vendor and sold by many retailers
Using different brand names for different products. Use when they are diverse, different price points, different qualities.
'Gamble' presentation, competing to win the business, as as if you got the account. What would you do for the company?
The old way to obtain accounts, present the best work you have done.
"Putting up our account for review"
The company is looking for a new agency
Also known as 'publicity', anything the company does to improve the image its image with stakeholders. When a company tries to manage the publicity (news) coverage it gets. Publicity= free, unlike advertising.
The agency decides where the 'ad' should be placed- what is the best medium.
-Non-personal form of communication
-Ads run for profit & nonprofit companies
-"Television ads are cheap if you can afford them"-> high person reached per dollar spent ratio
Integrated Marketing Communications (IMC)
Using the appropriate promotional mix elements to create a consistent, unified, & memorable promotional campaign.
Face-to-face interaction, immediate feedback, most flexible form of promotion.
Most money per person reached, average of $300 per person reached.
NOT ADVERTISING, anytime a marketer gives you a 'great deal' ex. bogo, gift with purchase, etc.
Causes an immediate change in purchasing behavior -> increases sales quickly
More expensive than advertising
Sales Promotion Trap
Customers may be more likely to expect or anticipate future promotions. If you are deal prone, your customers will be less loyal.
The price is set hight to reflect the exclusiveness of the product. ex. Starbucks, Diamonds
Trade Vs. Consumer Sales Pricing
Trade= deals with distributors, wholesales, retailers
Consumer= deals with customers.
Pushing Vs. Pulling
Pushing-> promote to the wholesalers/ retailers with your money ex. Auto parts
Pulling-> promote to the final customer- use money on that. ex. candy bars.
One Price Vs. Variable Pricing
One Price-you get what you see, price is fixed
Variable Price- you negotiate a price-> the price can vary
Second Market Discounting
When you have several target markets and one is more price sensitive -> the more price sensitive market gets a discount
Only use when you have excess production capacity -> better to make less money than no money
Setting a high price for a new product in order to skim maximum revenues.
Best when you have: inelastic demand (insensitivity), when production capacity is limited, when demand is greater than supply, when there is little to no competition.
'stay out' price. Exact opposite of skimming. Setting a low price for a product in order to accumulate the highest number of new customers and largest market share.
Best when you have: elastic demand, when supply is greater than demand, when you want to slow competitors from entering the market.
All merchandise in one category is priced the same. Big in fashion industry and department stores
Perceived Bargain- the idea that a customer is more likely to purchase something that is $2.99 than something that is $3.00
Multiple Unit Pricing
Same as bulk purchasing; multiple units of the SAME item are less expensive than buying the same amount individually.
A group of DIFFERENT items is less expensive than purchasing the items separately. Ex. Fast Food
Product Line Pricing Premise
The marketer is more concerned with maximizing the average profitability over a group of products rather than maximizing profitability over one product
Bait & Switch
leader item= bait -> then the sales person gets you to buy something that is more expensive.
Illegal when: store refuses to sell 'bait' product, seller knows there is not enough inventory to meet demand, when a seller advertises that it is in stock and isn't
Start as a retailer and later become a manufacturer
Start as a manufacturer and move into becoming a retailer.
Direct Vs. Indirect Distribution Channels
Direct= producer -> consumer, no middle man, common with perishable items
Indirect= producer -> intermediary -> customer, relies on other companies to distribute.
When a company uses different distribution channels to target different markets.
Distribution Coverage: Intensive
If their brand can be sold there -> it is there, total market coverage
Distribution Coverage: Selective
A limited number of outlets are allowed to sell the product. Maintains the 'image' of the product
Distribution Coverage: Exclusive
Most expensive products -> customers accept no substitutes; only in specialty stores
Defenses Against Illegal Price Discrimination: Cost Justification Defense
Use when it costs more money to deal with one buyer over another -> you must prove it in numbers
Defenses Against Illegal Price Discrimination: Meeting the Competition in Good Faith
(Borden's Case) If competitors enter a specific market & threatens to run you out of business with a lower price; you too are allowed to lower the price in that market.
when the company with the power decides to cut out the intermediaries (Ex. Amazon cutting out partners & going straight to the distributors). Happens when you don't have control of your distribution channel.
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