marketing principles week 6-11 Flashcards
Why pricing is important (3)
Price in the only element in the marketing mix that produces revenue
three main approaches to pricing
customer-value based pricing
cost based pricing
competition based [ricing
customer value based pricing
Setting the price based on buyers’ perceptions of value, not the seller’s cost
customer value based pricing - good-value pricing
Offering just the right combination of quality and good service at a fair price
customer value based pricing - value-added pricing
attach value-added features and services to differentiate their offerings, and this supports higher prices
market skimming pricing
Setting a high initial price for a new product to skim maximum revenue from the segments willing to pay the high price
- only works if the products quality and image supports the higher price, enough buyer want the product
market penetration pricing
Setting a low price for a new product in order to attract a large number of buyers and a large market share.
- market must be highly price sensitive, production and distribution costs must fall as sales volume increases
product-mix pricing strategies (5)
- product-line pricing (across entire product line)
- captive product pricing (must be used with main product)
- optional-product pricing (optional accessory product)
- by-product pricing (low-value bi products to get rid o them)
- product bundle pricing (pricing bundles)
the market and demand (4 types of competition)
- pure competition
- monopolistic competition
- oligopolistic competition
- pure monopoly
Pure competition
highly price sentitives and competitive prices
monopolistic competition
A range of prices occurs because sellers can differentiate their offers.
oligopolistic competition
Sellers are highly sensitive to each other’s pricing and marketing strategies.
pure monopoly
One supplier can determine price without regard for competition
value delivery
is the network made up of the marketing organisation, suppliers, and distributors who partner with each other to improve the performance of the entire system
supply chain process
- suppliers (inbound logistics)
- marketing organisation (outbound logistics)
- resellers
- customers
marketing logistics
planning, implementing and controlling the physical flow of the product from the start to the end in order to meet the needs of customers
right product, right customer, right time
supply chain decision trade offs (8)
- cycle-time reductions
- conversion operations location
- purchasing decision
- manufacturing operations
- warehouse numbers & costs
- inventory levels & costs
- transport types & costs
- restructuring marketing channels
what are channel levels (what do they do)
- ## intermediaries who performs some work in bringing the product closer to the final buyer
channel conflict types
Disagreement among marketing channel member
- horizontal (same level firms)
- vertical (different level firms)
vertical marketing network (2)
A vertical marketing network (VMN)
consists of producers, wholesalers and
retailers acting as a unified system. One channel member owns the others, has contracts with them that all channel members cooperate.
channel organisation (2)
• In a conventional marketing channel, each
channel member is a separate
• No channel member has much control over the
other member
the promotional mix (5)
- advertising
- public relations
- sales promotion
- personal selling
- direct and digital marketing
media types and vehicles (4)
- television (large audience yet very expensive)
- internet (immediate response yet high costs)
- newspapers (large audience yet not selective for socio economic groups)
- direct mail (little wasted circulation yet very expensive)
- radio (reaches 95% of consumers yet lacks visual imagers)
sales promotion advantages and disadvantages (4)
Advantages • provide incentives to purchase • Invites quick sales Disadvantages • Sales promotion effects are often short lived • Not as effective as advertising or selling
