Chapter 6 Market strategy: segmentation (dividing market into smaller segments with distinct needs, characteristics, behaviors), geographic

(nation, region, state, etc), demographic (age, gender, family size, MOST POPULAR, easy to measure), psychographic (groups based on lifestyle, social class, or personality characteristics), behavioral (divided based on consumer knowledge, attitudes, uses, or responses to a product; different people want different things from product, like toothpaste) - user status, usage rate, loyalty status (brands) -multi segmentation bases used in order to identify smaller, better defined groups segmentation is useful when its measurable, accessable, substantial, differentiable, actionable targeting: evaluate segment size, structural attractiveness, and company objectives/resources might be considered differentiation is making it different so it has competitive advantages (product, service, channel, people, image) positioning is the way a product is defined by the consumer; its image positioning and differentiation can be promoted through the product s: importance, distinctiveness, superiority, communicable, preemptive (first to market?), affordable, profitable

Chapter 7 PRODUCUTS BRAND SERVICE Products are anything you buy Service is a service (activity or benefit or satisfaction offered for sale that s intangible; like banking and hotels, and airlines) Consumer products final goods bought Convenience goods: bought frequently, a lot everywhere, low priced shopping products: higher price, selective distribution, more planning, less frequent specialty products: very high price, branding important, exclusive distribution, careful promotion unsought products: little product awareness, aggressive advertising (medication, life insurance) Industrial products: purchased for further processing or for use in conducting business materials and parts capital items (aids in product production) accessories (buy a lot, little time spent on decision, price matters) supplies and services (day to day operation)

Product decisions branding:building and managing brands (image sign slogan that s an identifier ) helps identify, quality control brand equity how much willing to pay for certain product; builds strong customer relations brands are distinguishable, key part of it national brand (manufacturer brands, like sony), store brands (private, like equate clothing), licensed (name or character, like Disney), co-branding (two companies, broader appeal line extension: brand name to new forms, clolrs, sizes, ingredients (rice krispies, frosted flakes, all for kellogs) brand extension: existing brand name to new products and categories (gap, baby gap, gap kids, macy furniture, macy clothes) multibranding- diff names, csame category (detergent) new brands new brand needed, existing dying (old navy, gap, banana republic) brand names simple, easy, suggest benefits, extendable, translatable, legal protection Packaging: desiging and producing container or wrapper helps market brand, protect contents, convenience, environmental concerns Labeling: printed info appearing on or with the package, including product name identifier, describer, promoter, regulated by GOV Product Line: products closely related filling (adding more) like dorito flavors stretching (downward = more basic. Upward=more advanced, both ways=down and upward extension) Product Mix- set that all of product lines and items a particular seller offers width (# of different product lines length (items in a line) depth (# of version) consistency (how closely related) Intangibility (service cant be seen tasted, etc) inseparability (services cant be separated from their providers) variability (quality of services depends on who provides them and when, where , how delievered) perishability (services cant be stored for later use

Chapter 8

New Product Development development of original products, improvements, modifications, and new brands New product innovation is very expensive/risky Products fail- overestimation of market size, design problems, incorrect advertising, pushed despite poor reaction, too $$$ to make, competitive reaction NEW PRODUCT DEVELOPMENT PROCESS Idea Generation: internal sources (company employees at all levels) external sources (customers, competitors, distributors, suppliers, outsourcing) Idea Screening: process used to spot good ideas executives provide a description of the product with estimates evaluated against set of company criteria for new products Concept development and testing: sketches and drawings PRODUCT IDEA: idea for possible product PRODUCT CONCEPT: detailed version of new product idea stated in meaningful consumer terms CONCEPT TESTING: test concept to see if there is appeal Marketing Strategy development: PART 1: describes target market, planned value, proposition, goals PART TWO: Outlines products planned marketing mix PART THREE: planned long-run sales (ex. Breakeven in 5 years) Business analysis: review of sales, costs, profit projections to assess fit with company objectives if positive results, moves to development stage Collect primary data Product Development: developts into physical product; large investment; prototype made; if too expensive, everything is done online on computers Test Marketing: product and marketing program are introduced into a more realistic market setting (test markets) Commercialization: must decide on timing, where to introduce it, market rollout plan

Product life cycle: course of products sales and profits in lifetime (intro, growth, maturity, decline) Intro stage: create product awareness (low sales, high costs, no real profits, few competitiors)

Growth Stage (maximize market share, products well received) sales rise, lower costs of production, rising profits, growing # of competitors Maturity stage: maximize profits (peak sales, low cost, high profits, competotirs stable but declining) at this point look for new people to get to buy or modify product (new flavors like sprite remix) or revamp it (new reliability speed, sttractiveness; console relaunch like ds 2 dslite) Decline stage: reduce expenditures. Milk the brand (declining sales, low cost per customer, declining profits, declining # of competition)

The PLC may help develop good marketing strategies, but its difficult to forecast sales levels/length of each stage. Its also hard to develop a strategy because its both a cause and result of the PLC

Chapter 9 Understanding and Capturing Customer Value Price: the amount of money charged for a product/service (sum of all values that consumers give up in order to gain the benefits of having or using the product or service) -when setting price, consider how the customer perceives the value; the market at the time; how competitors are stacked up

External Factors affecting pricing: *market and demand: firms flexibility in setting price varies depending on market nature 4 market types: pure competition, monopolistic competition, oligopolistic competition, pure monopoly Price-demand relationship: different prices result in different levels of demand small demand change = inelastic demand large demand change = elastic demand *economy Pricing Strategies Customer value-based pricing: prices based on buyers perceptions of value rather than seller cost Cost-based pricing: based on cost of producing and selling @ fair rate costs set floor for price that company can change

product driven, not value-driven fixed costs (do not vary) and variable (vary in relation to level of production) Types: cost-plus (markup); break-even pricing; target return pricing Competition-based pricing: setting prices based on competitor strategy, cost, prices, market offerings Assumes customers base judgements of products value on prices charged by competitors for other products New Product Pricing Strategies: - Market skimming (high price for new product to skim revenues layer-by-layer of those willing to pay high price (fewer but more profitable sales) use when competitors shouldn t easily be able to enter market - Market Penetration (low initial price in order to penetrate the market quickly and deeply; large number of buyers initially to win market share) use to keep out competition Product Mix Pricing Strategies -product-line pricing (setting price steps between various products) -optional product pricing (pricing optional or accessory products sold with the main product) -captive product pricing (pricing products that must be used with the main product) -by-product pricing (pricing by-products in order to make the main products price more competitive;gizzard pricing -Product bundle pricing (combining several precuts and offering bundle at reduced price (tele and internet to get cheaper) Price Adjustment Strategies -Discounts (cash, quantity, functional, seasonal) and allowance (trade-in, promotional) pricing -Segmented (selling product or service at 2 or more prices, where difference in prices is not based on difference in costs) student discounts, seasonal discounts, locational discounts, early bird special) -Promotional pricing (discounts, loss leaders, special event, -Geographical pricing Public Policy Pricing within channel levels price fixing (maintaining prices thanks to agreement between sellers) predatory pricing (set price low to drive out competiton) Pricing across channel levels price discrimination(different prices per buyer); retail price maintenance (car sales people)between manufacturer and seller; deceptive pricing (MSRP price)

Chapter 10 Marketing Channel: independent organizations that help make a product or service available for use/consumption by the consumer/business user; # users indicate length Conventional Distribution Channel: one or more independent producers/wholesalers/retailers; each a separate business seeking to max. its profits for system as a whole Vertical Marketing System (VMS): in which they act as one, as a system; obtain more economies of scale than they could alone Corporate VMA: compines successful stages of production and distribution under single ownership. Common kind (Coke owning CCS) Contractual VMS: vertical marketing system independent firms at diff levels of production/distribution join together through contracts to obtain more economies of scale than they could alone Administered VMS: leadership assumed through size and power of one or few dominant players Channel Behavior and Organization: franchise organizations are common form of contractual vertical marketing franchise organizations: manufacture-sponsored retailer franchise, manufacture-sponsored wholesaler, service firm sponsored (MCDONALDNZ_) Marketing Channel Design: design effective channels by analyzing consumer needs, setting channel objectives, identifying major alts, evaluating them

*Channel is where you get it started* Design: where do they want to buy; how (in person, online); do they value breadth of assortment; do consumers want many add-on services? Needs vs costs

Channel design decisions types of intermediaries: wholesalers, retailers, distributors, agents Markets: intensive (as many outlets as possible, convenience goods), selective (widely distributed (shopping goods; more than one, not all places), exclusive (maybe just one store (Specialty goods) Logistic system: outbound (supplier>manufacturer>customer); inbound (manufacturer>storage, production); reverse (recall, defective) customer service at less $$ Logistic functions: warehousing (where you store it); inventory management (what to store and how much); Transportation (truck, rail, etc)