Key factors-Fail products 1-not sig different-2 no economical access to buyers(cant get in stores)-3 Incomplete mrkt & product

definition b4 product development Need to have (a) well defined target mrkt, (b) specific customers needs & wants (c) what the product will be & do in terms of satisfying target consumers needs/wants 4- bad timing(Zune) 5- poor quality. 6- Poor execution of the marketing mix(name, $$, package, promote & distribution. 7- too little mrkt attractiveness ( ideal is large trgt mrkt w/ high growth & real buyer need, often trgt mrkt is too small or competitive to warrant the huge necessary to reach it) Product Lines- a group of products that are closely related because they are similar in terms of customers needs+wants, mrkt segment, sales, outlets or prices. Such as nike product lines of shoes+clothes. Product Mix- all the product lines offered by a company ex. Fortune brand has product mix of sports eqipt and plumbing sply. Classification of good- Convenience prdct: toothpast-inexpensive-widespread-aware of brand-substitues accepted- frequent purchase(little time/effort spent shop). Shopping Pdct: cameras,TVs,briefcase,plane ticket- fairly expensive-large # of selective outlets-differentiation from competitors stressed-prefer specific brands but will allow subs-infequent purchase; needs lot of comparison shopping time. Specialty P: rolls-royce,rolex,heart surgery- very expensive-very limited-uniqueness of brand & status stressed-prefer specific brand will not accept subs-infrequent purchase; need extensive search and decision time. Unsought P: burial insurance, thesaurus- price vary-often limited-awarness is essential-will substitute- very infrequent; some comparison shop. Buisness Goods (B2B): prdct organizations buy that assist directly or indirectly in providing other products for resale.ex imac sold for personal + business firms- sold through salesperson contacting firm & offer discount for multi purchase. Product Life Cycle-Intro stage- gain awarness-1 prdct-skimming or penetration-inform educate-limited disturbs few compete. Growth stage-stress differentiation-more competer-more versions of prdct-price=gain mrkt share-more outlets. Maturity stagemany competer-full prct line-price=defend mrkt share, profit.-maintanin brand loyalty-reminder orient-max outlets. Decline stagecompter decline-product=best sellers- price=stay profitable-minimal promo-fewer outlets Branding- Identify + differentiate-It is something that resides in the minds of consumers perceptual entity rooted in reality. To build a brand need to give the consumers label for the product & provide meaning for the brand to consumers. Branding involves creating mental structures & helping consumers organize their knowledge about products & services in a way that clarifies their decision making and, in the process, provides value to the firm. Good Brand Name- It should suggest something about the products benefitsIt should suggest the product or service categoryIt should be easy to spell, pronounce, recognize, and remember It should be memorable, distinctive, and positiveIt should not carry poor meanings in other countries and languages Packaging+Labels-Communication benefits-Perceptual benefits-Functional benefits-Connecting with consumers-Environmental concerns-Health, safety, and security issues-Cost Reduction (warm delights) MultiProduct Branding Strat- uses one name for all products (nike). +(A): subbranding (Gatorade- G2), Brand equity; if one product is liked, easy transfer to other products, Product Line Ext.; uses existing brand name to enter new mrkt segment in its product class (campells soup; orig, chuck, home cook ect.) leads to less cost of ads+promo which = raise of brand awareness. Brand Ext. use of current B name to enter diff. product classes Ex. Huggies extend to baby toiletries, Honda extend to snowblower, lawn mower ect. (N) Too many uses of one brand name could dilute meaning of brand to customers Ex. Arm&hammer- toothpaste-deodorant-gumcat liter. Negative Spillover- if u dont like 1 product you wont like others. Line extension create risk for one product to cannibalize other. MultiBranding Strat- (P&G) each product get a distinct name. +(A) useful when product is intended for diff mrkt segment, Price Quality Seg ex. Marriott offer 15 hotels+resort, each suited for particular traveler experience& budget. Fighting Brands: confronts competitors brands Ex. Ford launched fusion brand to halt defection of ford customers who were buying competitor midsize cars. Reduce risk of negative spillover. No risk of one product failing to effect another. (N) ads + promo is more expensive. Must create awareness among customers+ retailers(to get into stores) for every new brand w/out the benefit of previous impression. Can become complex + expensive which can outweigh benefits. Private Branding- company manufactures products but sells then under brand name of wholesaler or retailer Ex. CVS, Walgreens, Radioshack, wally world. Popular due to typically produces high profits for manufactures and resellers.

Chp 10+11 (New Product &Product Management)

Chp 12 Pricing

profit equation: Profit= Total Revenue Total Cost = (Unit Price x Quantity Sold) (Unit Cost x Quantity Sold) 1 Demand-oriented: approaches weigh factors underlying expected customer tastes & preferences more heavily than such factors as cost, profit,& competition when selecting a price level. -skimming pricing, setting the highest initial price that customers really desiring the product are willing to pay. As the demand of these customers is satisfied, the firm lowers the price to attract another, more price-sensitive segment. Ex flat screen tvs, iPod, iPhone. -Penetration pricing Setting a low initial price on a new product to appeal immediately to the mass mrkt. May follow skimming. Ex H&M-Prestige pricing involves setting a high price so that quality- or status-conscious consumers will be attracted to the prdct & buy it. Low price=low quality=not attractive. Ex Tiffany Odd-even pricing involves setting prices a few dollars or cents under an even # ($599.99 vs. $600.00). Bundle-pricing is the mrkting of 2 or more products in a single package price & is based on the idea that consumers value package more than individual items. It often provides a lower total cost to buyers & lower mrkting costs to sellers.. ex vacation pckge. 2 Cost-Oriented Approaches w/ cost-oriented approaches, a price setter stresses the supply or cost side of the pricing problem, not the demand side. Price is set by looking at the production & mrkeing costs & then adding enough to cover direct expenses, overhead, and profit. -Standard markup pricing entails adding a fixed % to the cost of all items in a specific product class Toaster: Variable cost per unit (UVC): $10 Fixed cost (FC):$300,000. Expected unit sales: 50,000. Desired markup on sales: 20% Target Profit: 100,000 Step 1: Calculate the Manufacturers unit cost: Unit cost=UVC + UFC= UVC + (fixed cost/unit sales) = $10 + $300,000/50,000= $16. Step 2: Calculate the markup price: Final price unit sale price. (using markup pricing method) = unit cost/(1-markup) = $16/(1-.20)= $20 -Cost-plus pricing involves summing the total unit cost of providing a product or service and adding a specific amount to arrive at a price.

3 Profit-oriented: approaches attempt to balance both revenues and costs to set price. These might either involve setting a target of a specific dollar volume of profit or expressing this target profit as a percentage of sales or investmenttarget profit pricing-a firm sets an annual target of a specific dollar volume of profit. Step 1(refer up) Step 2: Calculate the target price: final price (using target profit pricing method) = (target profit/unit sales) + unit cost = $100,000/50,000+$16 = $2+$16 = $18. Target return-on-investment pricing is a method of setting prices to achieve an annual return-on-investment (ROI) target mandated by the board of directors regulator. 4 Competition-Oriented Approaches-Rather than emphasize demand, cost, or profit factors, a price setter can stress what competitors or the mrkt is doing. Customary Pricing.For some products where tradition, standardized channel of distribution, or other competitive factors dictate the price. Ex candy bars, offered through standard vending machines for greater than the customary price of $1. Above-, At-, or Below-Market Pricing.it is difficult to identify a specific price. Still mrkting managers often have a subjective feel for the competitors price or mrkt price. Using this benchmark, they may deliberately choose this strategy. LossLeader Pricing-deliberately sell a product below its customary price to attract attention to it.Break-even Analysis to investigate the relationship between total revenue and total cost to determine profitability at various levels of output. Break-even Point (BEP) is the quantity at which total revenue and total cost are equal. Toaster: Variable cost per Unit (UVC): $10 Fixed cost: $300,000 Expected unit sales: 50,000 Unit Price: $18 BEPUnits = fixed cost/(unit price-UVC)= $300,000/($18-$10) = $300,000/$8 = 37,500 units must be sold to breakeven. To get the Break-even Revenue (BEP in revenue) multiply the break-even units times the unit price: BEPrevenue= BE units x Unit Price= 37,500 x $18= $675,000. Unit cost= UVC (unit variable cost)+ UFC (unit fixed cost= fixed cost/sales) unit variable cost- cost per unit fixed cost- ex rent, managers salarysales revenue- all the money made profit- total revenue total cost Chp 13&14 (Distribution Stragetgy) Marketing channel: Individuals &firms involved in process of making a product or service available for use or consumption by consumers or industrial usersWholesaler, distributorRetailer, dealer-Agent, broker . Direct Channel-where a producer & ultimate consumers deal directly w/ each other ex Schwan food truck. Indirect Channel-where intermediaries are inserted between the producer and consumers Manufacture-customer, manufacture-retail-customer, manufacture- wholesale-retailer-custome. Vertical Mrkting Systems (VMS): professionally managed & centrally coordinated mrkting channels designed to achieve channel economies & max mrkting impact Administrative (VMS)-E.g., P&G and Walmart wield market place clout. P&G make many prdcts= cooperation from supermarkets w/ display,promo & price. Less control-focus on one channel rather then direct ownership Contractual (VMS)- independent production + distribution firms ingergrate = franchising. Ex. Starbucks, subway. More control. Corporate (VMS)- Combo of successive stages of production & distribution under single ownership. Forward Integration: owns the intermediary at the next level down in the channel. Ex Ralph- manufactures clothes & owns stores. Backwards Integration: a retailer owns a manufacturing operation Ex Kroger operates manufacturing facilities produce everything (food,meds, ect) under Kroger label. Most Control. Intensive Distribution- place product & services in as many outlets as possible. Convenience prdcts Ex.soft drinks. Exclusive Distribution- extreme opposite of intensive. Only one retailer in a specified geographic area carry firms products. Ex specialty goods. BMW dealership in one region Selective Distribution- lies between intensive & exclusive. Firms select a few retailers /locations. Mainly for shopping goods. Ex. Gap, northface. Satisfying consumer needs-Spatial and time convenience E.g., malls, or one-stop shop retailers (Sephora, Ulta) information needs-Use of salesperson at the store (e.g., Apple store)Self-service (e.g., costco) Pre- or post-sale services E.g., automobile dealers. Independent Retailer (Retail ownership form) Corporate Chain (ownership Form)- multiple outlets under one common ownership ex. Contractual System (ownership form)- independent owned stores brand together to act like chain- Franchise. Ex. Subway. Level of Service ( retailer class) Full- specialty stores, limited-merch returns at walmart. self-service- gas or bus ticket, grocery checkout. Type of merchandise line- General merchandise stores (Breadth): department stores, general merchandise discount stores, membership warehouse stores Limited line, or single-line stores(depth): specialty stores, boutiques, category- dominant limited-line stores. Non-Store Retailing- Automatic vending, Direct mail and
Catalogs, TV home shopping, Online retailing Telemarketing, Direct Selling.

Chp 15&16 Integrated Marketing Communications (IMC): Concept of designing marketing communications programs that
coordinate all promotional activities to provide a consistent message across all audience. Communication Process. Sender-encode-message/media-decode-receiver-respondse-feedback-noise in middle.
Encoding-sender transform an idea into set of symbols. Decoding- Receiver takes symbols, message, transforms back into the idea. Response-impact of the message on receiver knowledge, tude & behavior. Feedback- readers interpretation of the response + indicates if decoded as intended. Noiseextraneous factors that can work against effective comm.. Ex print mistake. Advertising-(promo element)- Any paid form of non-personal comm about an organization, good, service, or idea by an identified sponsor. A 30second superbowl ad costed $3million.A full page color ad in Time mag costs $255K. Able to reach a large crowd, high absolute costs, difficult to get feedbackPersonal Selling- involves the two-way flow of comm between a buyer and seller, often in a face-to-face encounter, designed to influence a persons/ groups purchase decision. Customized, immediate feedback, can give complex info. Messages may differ between salespeople = disadvantage. On a cost-per-contact basis, it is the most expensive of the five promotional elements. Public Relations: a form of comm MGMT that seeks to influence the feelings, opinions of company. Publicity is indirectly paid, nonpersonal presentation of an organization, good, or service. Tools include special events, press conferences, press release, event sponsorship, community out reach. No direct payment to media,, most credible source in consumers mind Difficult to get media cooperation. Sales Promo-: a short-term inducement of value offered to arouse interest in buying a good or service. Often used in conjunction with advertising or personal selling. Tools include coupons, rebates, samples, contest. Effective at stimulate sales in short run, Easily abused, easily duplicated, can lead to promotion wars. Wide range of fees. Flexable. Direct Mrkting- direct comm w/ consumers to generate a response in the form of an order, request for further information, or visit to a retail outlet. Tools include direct mail, catalogs, telephone solicitations. Customization; messages can be prepared quickly, facilitate relationships with customers.Database management is expensive, concern about privacy. Factors to Consider in Developing the Promotional Mix - lProduct life cycle & Channel strategy ;Push directing promotional mix to intermediaries. Pull directing promotional mix to ultimate consumers Different types of Sale Promo- coupons, deal (2for1), Premiums,(mcdonalds happy meal toy partner w/dreamworks, encourages customers to return) Contest (video,photo, ect), Sweepstakes, Samples, Loyalty Program (credit card, shaws card) Point-of-Purchase Display- Nabisco back to school bus. Rebates, Product Placement.