marketing pt2

marketing mix

key decisions needed to effectively market a product

price / place / promotion / product / process / phys evi / ppl

PLC Production Life Cycle

time + revenue

development —> intro —> growth —> maturity (saturation) —> decline

to show the course a product takes from its development to decline AND a way to determine what to do with products

research + development

intro

growth

maturity

saturation

decline

design/test prod ; prod fail = not full launch

not profitable + set price high to lower R&D costs

sales inc bc early adapters + econ scale

sales rise but slower rate ; sales rev inc

sales = peak + extension strategies

final stage bef withdrawal

BCG boston consulting growth matrix

helps decide investing + decisions

analyze current performance ; existing prod ; intro of new prod

DOESNT predict future success or failures

only a PLANNING tool

market share and market growth

star (bcg)

most income

need inc investments to sustain growth

can mature into cash cows

cash cows (bcg)

sales high + profitable

well-established

high cash flow + strong loyalty

FUNDS star + ?

Q-Mark (bcg)

large investments needed

uncertain

star or dog

dog (bcg)

bad

dec markets

little $ → replaced / elim

branding

the identity

name/symbol/sign that differentiates firm prod from competitors

create imgs in consumers mind

val / loyalty / development / awareness

brand awareness (branding)

how recog a business good/services is in perception

brand development (branding)

extent to which a brand inc sales/market share

ex. postits kleenex

brand loyalty (branding)

extent to which a consumer will buy the good/service OVT

brand equity (branding)

extra amt consumers pay above avg market price for a prod bc of brand

Pricing methods

cost based pricing - markup

penetration pricing

loss leader pricing

predatory pricing

premium pricing

cost based pricing - markup ($ing)

determine selling $ing: add percentage/predetermined amt of profit to cost

easy to calcu + ensure covers costs

BUT

doesnt take into account the needs

cost = pay

price = sell for

markup = price - cost

‘ % = markup/cost

market based pricing = adapting to prices to conditions in the market

penetration pricing ($ing)

gain larger market share through mass marking + helps prod get established in industry

dec $ing + high sales vol + econ scale

BUT

inc sales doesnt mean inc prodits // poor quality perception

loss leader pricing ($ing)

selling prod @/below cost

ST strategy

predatory pricing ($ing)

temporarily reduc price to force rivals out of the industry who cannot compete

premium pricing ($ing)

set high price for prod that is much higher than competitors to give impression of quality + prestige

promotion

methods of communication to market w prod/service w intention of inc sales

inform , persuade , remind

above the line ads = paid ads for mass media

below the line ads = non-mass direct cont

above the line (promotion)

tv

radio

newspaper

cinemas

billboards

endorsements

below the line (promotion)

branding

slogans

logo

packaging

word of mouth

direct marketing (emails / telemarketing)

sales promotions

point of sales (at store)

sponsorship

publicity

promotion ad + disad

ad

targeted / trackable / flexible

disad

limited reach / time+$ / data dependency / branding risk

place

the DISTRIBUTION of prod or how prod GETS TO CONSUMERS

NOT where its made

distribution channel (place)

steps prod takes while moving from producer to customer

intermediary (place)

person/business within distribution channel that handles prod/service

wholesaler (place)

large quantities → sels to retailers

retailers (place)

receive med/small quant → sells to customers

agents (place)

negotiate sales on behalf of sellers + commission

distributor (place)

independent businesses that carry prod of only new manufacturers (cars)

levels of distribution (place)

producer —————————-→ consumer

producer ——————>retailer—>consumer

producer→wholesaler→retailer→consumer

zero-level channel (place)

manufacturer sells prod direct to consumers

no intermediaries

dec cost + fast + perishable goods

BUT

promotion dome by producer (time $)

producer incurs all storage + delivery fees

one lvl channel

single intermediary channel

(place)

one intermediary

usually when retailers sell prod to consumers

promotion + service + storage = retailer

retailer assist by selling prod @ convenient locations

BUT

retailers take a mark-up

LESS CONTROL

two lvl channel

two intermediaries channel

(place)

two intermediaries

wholesalers + retailers

wholesalers incurs storage costs

good when selling internationally

BUT

two markups

manu = less control over distribution + promotional strategies used