Studied by 4 people
Funeral Service Marketing / Pittsburgh Institute of Mortuary Science / Final Date: 12/19/23
Marketing is...
Creating ideas
Product
Pricing, distributing, promoting
Exchanges w/ customers
Relationships w/ shareholders
Four P's
Product
Price
Place
Promotion
Value is...
A byproduct to exchange
Subjective assessment
Benefits relative to price
Four utilities
Form utility, Time utility, Place utility, Possession utility
Form Utility
Value is perceived from the product or service meeting the customer needs
Time utility
Value perceived from the product or service being available at convenient or desirable times
Place utility
Value is perceived from the product or service being physically available
Possession Utility
Value perceived from the usefulness of owning the product or using one's services
Product Management Triangle
Almost all can only can do 2/3
Assets
Property of monetary value owned by a business
Liabilities
Any debts that a business owes
Probable future sacrifices of economic benefits
Owner’s (Stockholders) Equity
The residual claims of the owners (stockholders) on the assets of the company
Revenues (Incomes)
An inflow of cash/net-assets as a result of selling a product or providing a service
Expenses
A decrease in cash/net-assets (others than withdrawals by the owners) as a result of efforts to produce revenues
Spend money to make money
Purchasing power
Have the ability to buy product or service provided
Sole Proprietorship
Unlimited liability
Only one owner, no separation between owner and business
Partnership
Unlimited liability
General partnerships
No limited partners
Limited partnerships
One partner is only a financial contributor, nothing else
Limited liability
Limited Liability
Limits the extent of an economic loss to assests invested in an organization
In other words, investors' and owners' private assets are not at risk if the company fails.
Business gets sued, not owner/employee
Pro & Con of Corporation
Double taxation (Con)
Limited liability (Pro)
C-Corp
Limited liability
Business files taxes (double taxation)
S-Corp
Limited liability
Pass through taxation (single taxation)
Owner files taxes
Double taxation
Business pays taxes, money given (dividend) to owner is taxed again
LLC
Limited liability
Avoids double taxation
A limitation is put on how big company can get
Market
A group of potential customers possessing purchasing power and unsatisfied needs
Target market
Group of people with a common demand that a business can supply.
Those targeted can purchase the product, and are likely customers of the business
Market survey
A study that is used by a business to determine where the potential customers are located
Developing potential target market (three ingredients)
Customers (sustainable)
Purchase power
Unsatisfied needs
4 Levels of strategic planning in funeral service + (example)
1) Mission and Vision statement (Funeral service provider)
2) Corporate Strategy (Management team)
3) Business Unit Strategy (Funeral home A, B, & Crematory)
4) Marketing Strategy (Four P’s)
SWOT
Strengths, Weaknesses, Opportunities, Threats
Porter’s Five Forces
1) Rivalry among competitors
2) Bargaining power of suppliers
3) Threats of entrants barriers to entry
4) Bargaining power of buyers
5) Threat of substitute services/products
PESTLE
Political, Economic, Social, Technological, Legal, Environmental
Market Moving
First Mover (Whole market to yourself, no competition, set pricing)
vs.
Late Mover (Can see first mover’s mistakes, see if consumers want service)
Mission and Vision Statements
Mission: What we are focused on right now
Vision: What are we working towards in the future
Management structure
Centralized organization vs. Decentralized organization
Centralized organization
Top-level managers delegate little authority to lower-levels
(Centralized around top-level)
Decentralized organization
Structure where decision making authority is delegated as far down the chain of command as possible
Evaluating the success of a marketing strategy
Establish performance standards
Market share
Percentage of a market that buys a product or service from an individual company
3 Different natures of business
Manufacturing business
Merchandising business
Service business
Manufacturing business
A business that makes finished goods from raw materials by hand or machinery
Merchandising business
A business that purchases finished goods for resale
Service business
A business that provides a service as opposed to a product
Gauging product satisfaction (Four levels)
1) Core benefit
2) Generic product (The inputs that make the physical final product)
3) Expected product (Symbolic & experiences)
4) Augmented product (Additional services and benefits)
Product width
How wide of an array of things this company provides
Ex: Caskets, cremation, bronze markers
Product depth
How deep is one portion of the product width
Ex: Caskets→ Hardwoods, metals, cloth covered
Product line length
Different versions of product
EX: Colors and interiors
B2C Products (Business to consumer)
Convenience products (Inexpensive, frequent purchases)
Shopping products (Considerable effort in the purchase)
Specialty products (Unique characteristic, high price)
Unsought products (Infrequent purchases usual derived from—Sudden problems, unaware of existence, and/or did not plan to purchase)
B2B Products (Business to business)
Installations
Accessory equipment
Raw materials
Component Parts
Process materials
Business services
Product theory: the product life cycle
(Product theory) Introduction stage
(? in BCG)
Beginning of life cycle
Low market share
Negative cash flow
Growth: Potential
Finances: Debt
(Product theory) Growth stage
(Star in BCG)
High growth potential
Negative cash flow
Trending towards breaking even
Critical stage
Growth: Rapid
Finances: Positive cash flow
(Product theory) Maturity stage
(Cash cow in BCG)
Dominant market share
Low growth potential (Competitors)
Growth: Peaks
Finances: Break-even
(Product theory) Decline
(Old dog in BCG)
Market share decreases significantly
Sales fall rapidly
Low growth potential
Time to sink or swim
Negative cash flow
Growth: Slows
Finances: Profitability
Product theory: the BCG matrix
(BCG) Star
Dominant market share
High growth potential
(BCG) ?
Low market share
High growth potential
(BCG) Cash Cow
Dominant market share
Max growth potential
(BCG) Old Dog
Low market share
Low growth potential
2 Supply and demand variables
Price and Quantity
Inverse relationship
When the price _______, what happens to the quantity demanded and supplied?
Ex: When the price is…
-Low→ high quantity of demand
-High→ low quantity of demand
Equilibrium point
Point when the two intersect (price and quantity)
Elasticity
How much will demand change as price changes?
Small change in price→ large fluctuation demand
Inelasticity
Small changes in demand when are are large change in price
Necessities
FTC funeral rule
Applies to all funeral providers
Funeral home must have GPL (general price list)
FTC funeral rule prohibits
Embalming for a fee without permission
Requiring the purchase of a casket for direct cremation
Require consumers to buy certain funeral goods or services as a condition for furnishing other funeral goods or services
Engaging in other deceptive practices
6 Factors which influence prices
Type of merchandise and service
Target market
Purchasing practice (buying in bulk, payment plan)
Marketing strategy
Market fluctuations
Perceived value
Sales revenue =
Quantity sold*price per unit
Wholesale price
Our cost of goods sold
Markup/markdown
Expresses in percentages or times (2x)
Markup
The difference between merchandising cost and selling price
Markdown
A reduction of selling price below the original selling price
Distribution methods
Shipping and handling costs
Available routes
5 Categories of pricing strategy
New product
Differential/variable
Psychological
Product-line
Promotional
New product (Pricing strategy)
Penetration pricing
Price skimming
Follow-the-leader pricing
Penetration pricing
Pricing lower than normal
Goal: Make them stand out against competition
Price skimming
High pricing for a limited time, then reduced to competitive levels
Goals: Trial and error, makes more people want to buy (higher quality on sale), need to boost revenue
Follow-the-leader pricing
Copy competition
Differential/variable (Pricing strategy)
Negotiated pricing
Secondary market pricing (One price for primary target market; Separate price for secondary target market)
Periodic discounting (Structured, seasonal, planned)
Random discounting
Psychological (Pricing strategy)
Odd-number pricing
Multiple-unit pricing
Referenced pricing
Bundle pricing
Everyday low pricing (EDLP) (Always lowest pricing possible)
Customary pricing (Sales)
Multiple-unit pricing
Single price for two or more units
Multipack of product
Bundle pricing
Packaging two or more products (products are different)
Referenced pricing
Less expensive items being physically positioned next to more expensive items
Generic brand next to higher quality
Product-line (Pricing strategy)
Captive pricing
Premium pricing
Price lining
Captive pricing
Basic product low, accessories high
Once you buy basic product, trapped into buying more accessories
Premium pricing
High quality at a premium
Price lining
Distinct price categories for retail merchandise based upon quality
Promotional (Pricing strategy)
Price leaders
Special event pricing (sale)
Comparison discounting
Price leaders
Products priced below usual markup, near cost, or below cost
Buying behavior
Decision process and actions of buyers and users of products/services
Situational influences
Circumstances, time, and location; convenience
Psychological influences
General behavior
Social influence
Societal force
Consumer buying behavior classified as… (3)
Routine
Limited
Extended
Routine consumer buying behavior
Frequently purchased goods or services
Low cost, familiarity, little research
Brand preferences but elastic
Limited consumer buying behavior
Less frequently purchased goods or services or unfamiliar brands
Unfamiliarity, moderate research
Usually low to medium cost
Several brands may be preferred
Extended consumer buying behavior
Not frequently purchased goods or services
High involvement, unfamiliar, expensive
Many brands or options usually exist
Interest/involvement in a purchase can either be…
Enduring (lasting, long term)
OR
Situational
Impulse buying
Unplanned buying behavior resulting from a powerful urge to buy something immediately
Cognitive dissonance
Buyers doubt shortly after purchase
Buyer’s remorse
Note
Flashcard