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50 Cards in this Set
- Front
- Back
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Core product |
What people are ultimately getting. For example in a hotel it is a place to stay |
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Facilitating product |
Tasks or requirements you must have for core product to be possible. for example it would be the check in or check out the hotel |
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Supporting product |
Something you don't have to have but it is nice if you do. It adds value. For example breakfast or room service in a hotel |
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Augmented product |
This is going to differentiate your product. For example the physical environment customer interaction or you try to impact people's mood |
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Stages of the product life cycle |
Product development introduction growth maturity decline for example: Vegas trying to keep their brand alive in the mature stage |
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Product development |
You have a new idea the sales are zero and investment costs are high |
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Introduction stage |
Slow sales growth when introduced to the market. Profits don't exist due to the heavy expenses |
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Growth stage |
Rapid market acceptance and increasing profits. The only stage that makes money |
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Maturity stage |
You want it to last as long as possible. Slow down in sales growth, profits level off or start to decline because of competition |
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Decline stage |
People lose interest sales fall off and profits drop |
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Brand equity |
The differential a fact that knowing the brand-name has on customer response to the product or its marketing. But positive equity customers react more favorably to brand then to unbranded product. For example Cubs in Red Sox teams can charge higher ticket prices with high brand equity |
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Three steps in Brand positioning |
Product attributes: these are the least desirable and easy to copy. for example: a healthy product. Product benefits: are harder to copy it has to match the performance. example: the Ritz guest service. Beliefs and values: have a deep emotional level connection. The best and most difficult to develop and most desirable example: life is good |
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Brand sponsorship options |
National brands: Sony Coke. Store brands: Kroger brand. Licensing: Kodak or SpongeBob. Cobranding: two famous brands collaborating together to create a new brand that benefits both. Ex: Apple and Nike |
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Branding development strategies |
Line extension: extending an existing brand name to new forms with an existing product category example Coke and it's different flavors brand extension: having a successful brand but you want to capitalize on it as much as possible. example ESPN (channel on TV clothing, restaurants) multi brands: different features and benefits for customers with different motives example: Marriott and it's different brand hotels new brands: New brand for a new product category. Example Vegas or pure Michigan |
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Price ceiling |
Maximum price a company can charge for a product |
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Price floor |
The lowest price a company can charge for their product |
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Price |
The amount charged for a product or service or the sum of all the values that customers exchange for the benefits of having or using the product or service |
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Value |
Overall value to the consumer |
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Cost |
Cost is what it takes a producer to provide the service |
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Factors to consider when setting prices |
Product costs competition and external factors consumer perceptions of value |
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External factors that can impact a businesses pricing strategy |
Competitive strategies and prices marketing strategy objectives in mixed nature of market and demand |
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Cost based pricing |
Designing a product, determine the cost, set the price based on the cost, convince buyers of the product value |
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Value-based pricing |
Assesses customer needs and value perceptions, set target price to match customer perceived value, determine cross that can be incurred, design product to deliver desired value at target price |
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Competition based pricing |
Setting prices based on a competitor strategies prices cost and Mark offerings |
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Market skimming |
Setting a high price for a new product to skim maximum revenue layer by layer from segments willing to pay the high price. Company makes fewer but more profitable sales |
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Market penetration pricing |
Setting a low price for a new product to attract large number of buyers and a large market share. Ex: gas station prices when there are two facing eachother |
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Segmented pricing |
Adjusting prices to allow for different and customers product or locations. Example student tickets at a movie theater |
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Product bundle pricing |
Combining several products and offering the bundle at a reduced price. Example McDonald's cheeseburger meal |
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Psychological pricing |
Adjusting prices for psychological effect. Example ending everything and 99 |
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Promotional pricing |
Temporarily reducing prices to spur short run sales. Example Black Friday |
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Dynamic pricing |
Adjusting prices continually to meet characteristics and needs of individual customers and situation. Example airlines changing cost depending on season |
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Product line pricing |
Setting the price steps between various products in a product line based on differences between the products customer evaluations and competitive price. Example different option levels at a carwash |
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Optional product pricing |
Pricing of optional or accessory products along with the main product. Example buying a car with a navigation system or fridge with optional icemaker |
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Captive product pricing |
Setting a price for products that must be used along with the main product. Played for razors or cups for coffee maker |
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Geographical pricing |
Adjusting prices to account for geographical location of customers. Wine from California to Indiana has shipping costs |
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Brand-name selection criteria |
Simple and easy to pronounce, suggest product benefits, distinctive, extendable, translate easily, legal protection |
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Good value pricing |
Offering just the right combination of quality and good service at a fair price |
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Value added pricing |
Attaching value added features and services to differentiate a companies offers and charging higher prices |
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Break even pricing |
Send me a price to break even on the cost of making a marketing a product |
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Cost-plus pricing |
Adding a standard markup to the cost of a product |
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Upstream partners |
Help create the product. Example raw materials licensing and technology |
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Downstream partners |
Help get the product to the user. Example distributors or stores |
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Marketing channel |
Also known as distribution channel. Help a company make products available to the consumer |
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Why are marketing channels important? |
Greater efficiency added value by offering more contacts and experience specialization and scale of operation |
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Direct marketing channel versus indirect marketing channel |
Direct: no middle person. Indirect: one or more distributors |
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Conventional distribution channel |
Channel with one or more independent producers wholesalers retailers (traditional) |
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Horizontal marketing system |
Same level of retailer joining forces to provide added value to customers. Example Starbucks inside target |
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Vertical marketing system |
All working together as a unified system. Example franchise such as hotels restaurants or orange theory |
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Multi channel distribution system |
A single firm set up two or more marketing channels to reach one or more customer segments. |
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Disintermediation |
When service cut out marketing channel intermediaries or when new channels replace old ones. Example blockbuster with Netflix |
