Business Marketing Homework 3

Business Marketing Homework 3 - Josh Kelly Business...

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Josh Kelly Business Marketing 18 November 2007 Ch. 10, 11, 12, 13 Ch. 10 4. A products life cycle can be divided into several stages characterized by the revenue generated by the product. a) Introduction stage- The need for immediate profit is not a pressure. The product is promoted to create awareness. If the product has no or few competitors, a skimming price strategy is employed. Limited numbers of product are available in few channels of distribution. b) Growth- Competitors are attracted into the market with very similar offerings. Products become more profitable and companies form alliances, joint ventures and take each other over. Advertising spend is high and focuses upon building brand. Market share tends to stabilize. c) Maturity- Those products that survive the earlier stages tend to spend longest in this phase. Sales grow at a decreasing rate and then stabilize. Producers attempt to differentiate products and brands are key to this. Price wars and intense competition occur. At this point the market reaches saturation. Producers begin to leave the market due to poor margins. Promotion becomes more widespread and use a greater variety of media. d) Decline- At this point there is a downturn in the market. For example more innovative products are introduced or consumer tastes have changed. There is intense price-cutting and many more products are withdrawn from the market. Profits can be improved by reducing marketing spend and cost cutting. The length of each stage varies enormously. The decisions of marketers can change the stage, for example from maturity to decline by price cutting. Not all products go through each stage. Some go from introduction to decline. It is not easy to tell which stage the product is in. 9. The Three types of Brands: a) Manufacturer Brands- These are created by producers and bear their chosen name. The producer is responsible for marketing the brand. This brand is owned by its producer. By building their own brands, manufacturers gain widespread distribution because certain retailers might just want to sell this brand they also build large customer loyalty.
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b) Private Distributor- These are products or services are typically those manufactured or provided by one company for offer under another company's brand. Private label goods and services are available in a wide range of industries from food to cosmetics to web hosting. They are often positioned as lower cost alternatives to regional, national or international brands, although recently some private label brands have been positioned as "premium" brands to compete with existing "name" brands. c) Generic Brands-These are consumer products often supermarket goods which are distinguished by the absence of a brand name. They may be manufactured by less prominent companies, or manufactured on the same production line as a more prominant brand. Generics brands are usually priced below those products sold by supermarkets under their own brand. Generally they imitate these more expensive brands, competing
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Business Marketing Homework 3 - Josh Kelly Business...

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