Professional Documents
Culture Documents
Product
The end result of the manufacturing process, to be offered to the marketplace to satisfy a need or want
Product
In marketing, a product is anything that can be offered to a market that might satisfy a want or need In retailing, products are called merchandise. In manufacturing, products are purchased as raw materials and sold as finished goods. Commodities are usually raw materials such as metals and agricultural products, but a commodity can also be anything widely available in the open market. In project management, products are the formal definition of the project deliverables that make up or contribute to delivering the objectives of the project.
Classification of Product
Based on Tangibility
Tangible goods referred to as a products Intangible goods referred to as services
Classification (contd.)
Based on habits
Convenience goods Shopping goods Specialty goods
Classification (contd.)
Classification (contd.)
pricing
Selective distribution in fewer outlets Advertising and personal selling by producer and reseller
High price
Exclusive distribution Carefully targeted promotion by producers and resellers
Product Mix
Key Decisions
Product attributes
Individual Product
Branding
A name ,term, sign, symbol or design, or a combination of these that identifies the products or services of one seller or group of sellers and differentiates them from those of competitors.
Branding Strategy
competitive advantages:
High consumer awareness Strong brand loyalty Helps when introducing new products Less susceptible to price competition
Brand Strategy
Product attributes
Least effective
Brand Strategy
Suggest something about the product or its benefits Are easy to say, recognize and
remember
Are distinctive Are extendable Translate well into other languages Can be registered and legally protected
Brand Strategy
Manufacturer brands
Private (store) brands
Co-Branding
Brand Strategy
Line extensions
Brand extensions
Multibrands
product category
New brands
Packaging
The activities of designing and producing the container or wrapper for a product.
Labeling
Who made it? Where it was made? When it was made? Its contents
Product line
A group of product s that are closely related because they function in a similar manner, are sold to the same customer groups are marketed through the same types of outlets, or fall within given price ranges.
Product Mix
Product portfolio The set of all product lines and items that a particular seller offers for sale.
Product mix length refers to the total number of items the company caries within its product lines.
Product mix depth refers to the number of versions offered of each product in the line.
Consistency of the product mix refers to how closely related the various product lines are in the end use.
Pricing
GLA
What is Price?
Narrowest sense price is the amount of money charged for a product or service. Broader sensePrice is the sum of all values that customer give up in order to gain the benefits of having or using a product or services.
GLA
Pricing Objectives
Profit maximization in the long run Minimum return on sales turnover Deeper penetration of the market Keeping up with the Competition Increasing sales volumes and market share
GLA
Internal Factors
Costs
Organizational considerations
GLA
Marketing objectives
Survival Current profit maximization Market share leadership Product quality leadership
Not-for-profit objectives:
Pricing must be carefully coordinated with the other marketing mix elements
GLA
Costs
Types of costs:
GLA
Organizational Considerations
Small companies: CEO or top management Large companies: Divisional or product line managers
Price negotiation is common in industrial settings Some industries have pricing departments
GLA
Types of markets
Nature of market and demand Competitors costs, prices, and offers Other environmental elements
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External Factors
Nature of market and demand Competitors costs, prices, and offers Other environmental elements
Consider competitors costs, prices, and possible reactions when developing a pricing strategy Pricing strategy influences the nature of competition Low-price low-margin strategies inhibit competition High-price high-margin strategies attract competition Benchmarking costs against the competition is recommended
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External Factors
Economic conditions
Reseller reactions to prices must be considered Government may restrict or limit pricing options
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Adding a standard markup to cost Ignores demand and competition Popular pricing technique because:
It simplifies the pricing process Price competition may be minimized It is perceived as more fair to both buyers and sellers
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Break-even charts show total cost and total revenues at different levels of unit volume. The intersection of the total revenue and total cost curves is the break-even point. Companies wishing to make a profit must exceed the break-even unit volume.
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Value-Based Pricing:
Uses buyers perceptions of value rather than sellers costs to set price.
Measuring perceived value can be difficult. Consumer attitudes toward price and quality have shifted during the last decade.
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Value-Based Pricing:
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Competition-Based Pricing:
Also called going-rate pricing May price at the same level, above, or below the competition Bidding for jobs is another variation of competition-based pricing
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Methods of Pricing
Competition-based pricing Cost-plus pricing Limit pricing Loss leader Penetration pricing Creaming or skimming Economy pricing Premium pricing Psychological pricing
GLA
Pricing Strategy
GLA
Selecting the pricing objective Determining demand Estimating costs Analyzing competitors costs, price and offers Selecting a pricing method Selecting the final price
Markup Price Target return Pricing Perceived value pricing Value pricing Going rate pricing
Geographical pricing