Michaelmas and Lent terms Flashcards
(182 cards)
What are the three stages to all service firms?
Service operations, service delivery, service marketing
What aspects make up the total product?
Substance,service, symbol, price
What are the 5 myths about markets?
- They are stabile
- Companies are detached from markets
- Markets are a place/ exchange
- only corporate actors define markets
- Companies must identify a need and cater to it
What are the 2 approaches to new market creation?
- Fulfil an unmet need with a great new product
- Create a need
What are the 4 guiding factors to market creation?
- Eliminate factors that are taken for granted within the market
- Reduce certain factors below industry standard, eg price
- Increase certain factors above industry standard, eg assortment
- Which factors should be created that the industry has never seen before?
What is the difference between the economic and marketing perspectives of markets?
- Economic - perfect competition
- Marketing - Fluid and changing, about relational interactions with consumers
Identify some elements of ‘perfect competition’
- No barriers to market entry
- No government intervention
- Consumers have perfect knowledge
- All firms and consumers are price takers
- Products are homogenous
What is an industry association?
A group of firms that do a similar thing who form an association for their collective best interests.
Discuss need creation as key before selling the solution
- If consumers don’t feel they have a need for a product they will not buy it. For example, If Steve Jobs had not confined consumers that they needed a touch screen phone, most consumers would most likely have not reacted well to this completely new and never before seen product
Name the 3 types of legitimacy named in ‘Megamarketing’
Regulatory, cultural-cognitive, normative
What actions can managers take to aid the process of legitimation and diffusion?
1) Use materials available, eg. social networks to convince, finances to advertise
2) Wording eg. Amplifying one frame over another to emphasise positives over negatives. For example the gambling industry - business benefits over crime effects
What generally happens with regards to different frames throughout the process of legitimation?
Negative frames become less emphasised and positive ones become the main focus.
What are the 4 potential approaches to setting price?
Cost based, competition based, demand based, value based
What are key considerations in cost based pricing?
- Covering costs to ensure no loss is made in the first place
- Breakeven analysis
- Perhaps more the case for start ups just trying to stay in business.
Key considerations in demand based pricing?
- Amount of competition
- external factors such as economic and political situation
- brand strength and consumer loyalty
Key considerations in value-based pricing?
- Who gets the value within a given price (ie sell at a price that gives as much benefit to firm as possible or reduce price to give benefit to consumer) VALUE ALLOCATION
- Perceived benefits of both ‘economic’ and ‘marketing man’ (rational and emotional)
- Penetration pricing - consumer based
- Price skimming - company based
Name some external influences on price
- Competition
- Laws
- Economic situ.
- Price and demand elasticity
- Market and consumers
How do you calculate price elasticity of demand?
Change in % demanded / % Change in price
What is unitary demand?
% change in price leads to identical change in demand
What is parallel trading?
Creating and selling a product under certain rules, such as a trademark, and then selling it in another country without such rules. Generally creates higher profits.
Name some key considerations in price
- Return on investment
- Elasticity of demand
- Price wars
- Market conditions
- Cash flow (short term, survival)
How do you calculate breakeven?
Fixed costs / cont. per unit (Selling price - variable cost per unit)
What is cost - plus pricing?
Adding a fixed % to production costs - ensures enough revenue/profit is made
What is prestige pricing?
High price to give image of high quality - can backfire if consumer does not perceive equally high quality