chapter 13 Flashcards
deployment strategies
can influence the receptivity of customers and can reduce uncertainty about the product.
launch timing
can be a significant part of the deployment strategy. a firm can strategically use launch timing to take advantage of business cycle or seasonal effects, to position its product with respect to previous generations of related technologies, and to ensure that production capacity and complementary goods or services are in place.
cannibalisation
occurs when a firm’s sales of one product diminish its sales of another of its products.
backward compatible
occurs when products of a technological generation can work with products of a previous generation. eg., if a computer can run on the same software as a previous generation of the computer.
pricing
simultaneously influences the product’s positioning in the marketplace, its rate of adoption, and the firm’s cash flow.
survival
a pricing model that sets the price to cover all variable costs and some of the fixed costs.
maximise current profits
a pricing model that sets the price to maximise cash flow or rate of return on investment.
maximum market skimming objective
the price is set high to signal the new product is a significant innovation. this also helps to cover the R&D costs. however, high initial prices may attract competitors to the market and can slow adoption of the product.
maximum market share
the price is set low to rapidly attract customers, driving the volume up and production costs down.
penetration pricing
occurs when the price of a good is set very low (or free) to maximise the good’s market.
freemium
the base of a product or service is free, but additional features are charging a premium.
manufacturers’ representatives
independent agents that promote and sell the product lines of one or a few manufacturers. they are often used when direct selling is appropriate, but the manufacturer does not have a sufficiently large direct sales force to reach all appropriate market segments.
wholesalers
companies that buy manufacturer’s products in bulk, and then resell them (often in smaller or more diverse bundles) to other supply channel members such as retailers.
retailers
companies that sell goods to the public. together with wholesalers, they break bulk.
intermediaries
eg. manufactuers’ representatives, wholesalers, and retailers. they also provide services such as transporting, inventory, selling service, and handling transactions with customers.
original equipment manufacturer/value-added seller
a company that buys products (or components of products) from other manufactuers and assembles them or customises them into a product that is then sold under the OEM’s name.
disintermediation
occurs when the number of intermediaries in a supply chain channel is reduced. eg. when manufacturers bypass wholesalers and/or retailers and sell directly to end users. advances in information technology have enabled disintermediation or reconfiguration in the types of intermediaries used.
alliances with distributors
strategic alliances or exclusivity contracts can encourage distributors to carry and promote a firm’s goods. by providing a srake in the success of the new technology, a distributor may be persuaded.
bundling
enables the new technology to piggyback on the success of another product that already has a large installed base. switching costs may prevent customers from changing to a different product, even it is initially preferred.
contracts and sponsorship
contractual arrangements with distributors, complementary goods providers, and large end users can ensure that the technology is used in exchange for price discounts, special service contracts, advertising assistance, or other inducements.
guarantees and consignment
when there is market uncertainty, offering guarantees or agreeing to sell the product consignment, can encourage distributors to carry the product.
marketing strategy
considers both the nature of the target market and the nature of the innovation.
advertising
used to build public awareness of a technological innovation. in crafting a message, firms often attempt to strike a balance between achieving an entertaining and memorable message versus providing a significant quantity of informative content.
promotion
temporary selling techniques such as offering samples for free trial or offering incentives for repeat purchase.
publicity and public relations
many firms use publicity to effectively generate word of mouth.
viral marketing
sending information directly to targeted individuals in an effort to stimulate word-of-mouth advertising. individuals are typically chosen on the basis of their position or role in particular social networks.
