Lecture 6 Flashcards
Tactical launch decisions - distribution and price
why is distribution important
create brand growth
building up market potential
what are 2 strategies to move products to consumers
push and pull
to whom do producers market in push strategy
producer -> retailer -> consumer
what are 2 components of push strategy
trade promotion and in-store promotion
what are examples of trade promotion
discounts for large numbers
fee to put product on the shelf
take back guarantee
what are examples of in store promotion
special attention
trialability
what is pull strategy
consumer gets curious and goes to retailer to ask for the product
what are components of consumer marketing support
advertising targeted at end consumer
sales promotions
why make a trade story
to convince retailer to put your product on the shelf
what does a trade story consist of
introduce big idea
provide evidence that consumer will adopt the product
whats in it for the retailer
consumer marketing support
shelf space
points of purchase materials
advantages for retailers to adopt new products
additional profit opportunities
more attractive product categories
disadvantages for retailers to adopt new products
costly:
human capital costs
inventory control and handling
production of shelf signs and price tags
what is an easy way to access shelf space
exclusivity
what are advantages of exclusivity for the retailer
unique assortment
no price competition
higher markups
attracts new consumers
increased consumer traffic
what are disadvantages of exclusivity for the retailer
dependence on supplier
manufacturers may not invest much due to limited availability
what are advantages of exclusivity for the supplier
guaranteed shelf space
improved relation with retailer
higher wholesale price
retailers will launch product with a lot of attention
what are disadvantages of exclusivity for the supplier
limited availability
limited budget to support product
dependence on one retailer
may damage relation with other retailers
what determines the price of a new product
price floor and ceiling
what are 2 pricing tactics
price skimming and price penetration
what is price skimming
high introduction price
skim surplus
covers cost of innovation
create high-end brand image
max profits
for which products would you use price skimming
differentiated products, and companies with some source of competitive protection
what is price penetration
low intro price
rapidly reaching wide fraction of market
enlarge market share
exploit economies of scale
for which products would you use price penetration
price sensitive markets
new products facing strong competition
