17 Marketing Product&Price

17 Marketing Product&Price - ~ BCOR 1010 ~ BCOR...

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Unformatted text preview: ~ BCOR 1010 ~ BCOR Introduction to Business Section 100 Instructor: Beth Cross Office: Room 345E – CESR Suite, Koelbel Email: [email protected] Email: [email protected] Cell #: 303 956-6010 Office # 303 492-4463 Office Hours, Spring, 2009: Office Mon. 11:30a-1:00p, Wed. 10:30a-12:00n Wed. and by appointment and The Marketing Function The A. Introduction B. Product C. Price D. Place E. Promotion Marketing: The Four P’s Marketing: The Product The Product – What is a Product? – Product Lines and Mixes – Product Types – Branding – Product Development & The Product Life Product Cycle Cycle The Product The The Product- iPod The The Product- iPod The The Product- iPod The The Product- iPod The Marketing- Product MarketingWhat is a product? What – The Total Product Offer includes: Product/Service Itself Value Enhancers: – Packaging – Branding – Services – Warranties – Location Product - Packaging Product Consumer Focused: – Motor oil bottles – Shampoo / lotion / ketchup bottles – Wine bottles – Perfume bottles – Powdered drink containers – Beer bottles/cans… Product - Packaging Distribution- focused: Distribution– RFID Tags – UPC Codes – Shelf Compatibility – Transport Design Product - Services Product Bicycle tune-ups – University Bikes – Bicycle Village/Vail Resorts Auto repair loaners Free shipping Product Mix, Product Lines Product Product Mix- All Products Product Lines- Related Group – CU Accounting, Engineering . . . – Harley-Davidson Bikes, Clothes . . . – Apple Software, iPods, Macs . . . The iPod Product Line The Product Types Product Convenience Goods – Purchased frequently with minimal effort Shopping Goods – Purchased less frequently with more Purchased effort/research effort/research Specialty Goods – Products with unique characteristics Branding Branding A brand is a name, term, design, symbol brand or other feature that identifies a distinct set of products set Name the Brand Word association? Word Name the Brand Word association? Top 10 Brands - 2008 Top Source: Millward Brown Optimor 2008 Top 100 Brandz Branding Branding Why invest in a brand? What value do Why brands have? brands – $250B/yr invested in brand building [WSJ- ‘late 1990’s’] The actions firms take to protect their The brands provide real value to consumers brands Brand Equity Brand Brand awareness Brand loyalty Brand quality perceptions Brand associations Branding Branding Consumer Value – Convenience – Status – Quality – Safety Branding Branding Seller Value – Purchase convenience – Efficiency New products Promotion budget – Consumer loyalty – Translates to market value Marketing – Product Lifecycle Marketing Product Lifecycle – Introduction – Growth – Maturity – Decline The Product Life Cycle The Marketing – Product Lifecycle Introduction Introduction – Brand identity and image established – High initial investment – Penetration pricing or skim pricing – Target market - early adopters – Promotion strategy- awareness Marketing – Product Lifecycle Growth Growth – Brand identity and image reinforced – Ongoing investment – Pricing maintained- low competition – Target market widens – Place/Distribution widens – Promotion strategy- trial/repeat Marketing – Product Lifecycle Maturity Maturity – Competition increases – Product Differentiation – Price to maximize long-term profit – Defend market share – Defend distribution channels Marketing – Product Lifecycle Decline Decline – Reduce investment – Defend distribution – Pricing to harvest or liquidate • Remaining demand may be inelastic The Marketing Function The A. Introduction B. Product C. Price D. Place E. Promotion Marketing: Price – Easiest of the four Ps to change – Most difficult of the four Ps to control Costs and Market – What are your objectives? Image, profit, volume, traffic, market share…… Marketing- PlayStation Pricing MarketingSony has carefully managed prices to maximize profit 700 600 500 400 300 200 100 0 Se $599 $499 $299 $199 $149 $129 $299 $199 $99 $179 $149 $129 p9 M5 ar -9 Se 6 p9 M6 ar -9 Se 7 p9 M7 ar -9 Se 8 p9 M8 ar -9 Se 9 p9 M9 ar -0 Se 0 p0 M0 ar -0 Se 1 p0 M1 ar -0 Se 2 p0 M2 ar -0 Se 3 p0 M3 ar -0 Se 4 p0 M4 ar -0 Se 5 p0 M5 ar -0 Se 6 p0 M6 ar -0 Se 7 p07 Source: SCEA, Inc. Marketing: Price Marketing: Marketing Mix: Price – Objectives – Pricing Considerations price) price) (approaches to setting Cost-Based Demand-Based Competition-based Break-Even Analysis Marketing: Price Fixed Costs - costs/expenses that remain the same regardless of number of product/units made (i.e. rent) Variable Costs - costs that change depending on the number of units produced (i.e. materials) Break-even Pricing Break-even Total Fixed Costs Q (Qty) = _________________________ Price - Variable Costs Tells the business how many units they Tells have to sell to cover their costs have Break-Even Pricing – Bike Store Total Fixed Costs $100,000 Qty (units) = -------------------------------------333 Bikes Price - Variable Costs $1,300 - $1,000 Marketing: Price Marketing: Pricing Strategies – Skimming, or Skim Pricing – Penetration Pricing Pros/Cons ...
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