How Firms Sell

How is a product defined in the context of selling?

The solution provided to meet a customer’s need or reduce their pain

What are the 2 types of product solutions?

Vitamin (meets a customer’s needs) and painkiller (reduces a customer’s pain)

What is the role of perception in selling a product?

How the customer views the product that matters most

What are the 4 stages of the product life cycle?

Introduction, growth, maturity, decline

Introduction stage of a product

Launching the product

Growth stage of a product

Sales and demand increases

Maturity stage of a product

Market saturation; sales plateau

Decline stage of a product

Demand decreases

What is the goal of promotion in selling?

Communicate value and encourage customers to buy

What are the key elements of promotion?

Advertising, sales promotion, personal selling, direct marketing, public relations

What is a pull promotional strategies?

Targets customers directly to create demand

What is the push promotional strategy?

Encourages intermediaries (wholesalers, retailers) to promote the product

What is the “place” in the selling process?

Refers to where and how the customer gets the product

What are the key elements of the supply chain?

Supplier, manufacturer, wholesaler, retailer, customer

What are the key elements of the distribution channel?

Manufacturer, wholesaler, retailer, customer

What is “price” in selling?

Based on the perceived value of the product and a customer’s willingness to pay

What are the 4 bases for setting prices

Cost, demand, competition, price leadership

Setting prices: cost

Covering production expenses

Setting prices: demand

Responding to market needs

Setting prices: competition

Matching or undercutting rivals

Setting prices: price leadership

A leading firm sets the benchmarks price

What is break-even pricing?

Setting a price where revenue covers costs, but no profit is made

What is the overall goal of marketing?

To create customer satisfaction while ensuring the firm operates profitability