week 5 Marketing Mix Flashcards
What is a product?
A product is the item offered for sale. A product can be an item or service there is more to its physical shape or basic service function
What is product for marketers?
goods, services, experience, events, people, place, information ideas…
what’s in the actual product
- brand name
- quality level
- packaging
- features/design
what’s BCG Product Portfolio Matrix
designed to help businesses with long-term strategic planning through consideration of growth opportunities by reviewing its product portfolio
what’s in the associated product
-financing
- product warranty
- product support
describe ansoff product marketing mix
described, correct
what is price
the compensation (money, goods, or serviced) given hy one party to another in exchange for goods or services
price as a signal
- can be too low or too high
- too low may signal low quality
- too high may signal low-value
pricing method
- Quantity demanded = f (Price)
- Profit = Quantity (Price) × [Price – Unit Cost]
- Find price to maximize profit (Find price where Marginal Cost =
Marginal Revenue).
Core Assumptions:
focus on short run profit;
focus on immediate customers;
price is independent of advertising, promotion, etc.;
demand and cost functions are known;
unit cost is constant;
firm has true control over price;
competitors are ignored, etc.
what is a cost-oriented pricing
when a company sets its prices as costs+ markup percentage or fixed amount
what is a competitive-oriented pricing
When a company sets its price based on what its competitors are charging rather than on cost or demand
- oil, water
what is a demand-oriented pricing
When a company sets its prices as a function of demand
- high demand= high price
- low demand = low price
what is Gabor Granger
a technique used to determine the optimal price point for a product or service by gauging consumer willingness to pay at various price levels
Pros of Gabor Granger
- simple design (easy read)
- constant measurement per price level
- Robust, proven method
Cons of Garbor Granger
- assume data accuracy (30% or 50%)
- no margin of error
- risk of price being out of range
describe revenue management
Revenue management is the art and science of selling the right product to the right customer for the
right price at the right time
Explain Temporal Price Discrimination
pricing strategy where prices vary based on timing factors, such as when a service or product is purchased or consumed
which two industries benefit from Temporal Price Discrimination
- high fixed cost industry
- service industry (hotels and airlines)
How Temporal Price Discrimination works in hotels and airlines
- Time-of -day pricing
- Time when purchased
- Days of the week pricing
- Seasonal Pricing
Processes of Revenue managemeny
- estimate demand for each class of service
- demand arrives over time– so update the demand function/remaining supply
- allocate remaining space to maximize expected profitability or meet other criteria subject to situation-specific constrains
what is advertising
advertising is any form of one-way mass communication which paid for by a marketer
examples of traditional advertising media
- television, ratio, newspaper, magazines, billboard, websites, blog, etc.
types of advertising budgeting
- Affordable method
- percentage of sales
- competitive parity method
- objective/task method
- model-based
explain Affordable method
- companies set their advertising budget based on what they believe they can afford
- fluctuating advertising budget
- difficult to plan for long-range market development
Explain percentage of sales
setting advertising expenditures at a specified percentage of sales.
Explain Competitive parity method
Involves setting advertising budgets specifically to match competitors’
outlays
Explain Objective/ task method
- Defining advertising objectives as specifically as possible
- Determine the tasks
- Estimating the costs of those tasks
Explain model-based approach
That is the advertising response model for online banner and keyword advertising offer firms
