Values are enduring beliefs about desirable outcomes

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Values are enduring beliefs about desirable outcomes that transcends specific situations and shape one's behavior Terminal Values – what we want, what we get from who we are and what we do (nice pay check) Instrumental value- what we are or are willing to do (work hard) 11.2.09 There are two parts to value: 1. Instrumental value - refers to a pattern of behavior in how consumers use products which leads to a different demand for products. Serious runners are going to have a different use for the shoes than people that wear them casually to class 1. Terminal value - the end of the means end chain. This is ultimately what the consumer wants to achieve. People felt a need to be fit and that is what led to the running boom When we reach the terminal value, the brand is value expressive - it is a symbol or icon of whatever sub-culture it represents The means end chain is just another way to understand sign value. Reebok Started out as Foster's Grandsons of the original founder wanted to create a trendier shoe Named after an African Gazelle (rhebok) Paul Fireman - US business person that owned one sporting goods store He went to England, saw the shoe, liked them, and bought the entire North American distribution rights (late 1970's) Shoes became successful. 1979 got rights to distribute Reebok In 1981, P. Fireman went back to England and bought the company for $700,000. The Freestyle - the shoe that set them apart…the shoe for aerobic dance exercise ( 1982). What Reebok did to help themselves - 3 major trends that Reebok anticipated: 1. Aerobic dance movement 1. The increasing involvement of women in exercise 1. The extension of athletic footwear into casual wear
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Reebok’s numbers: 1983- 13 million 1985 – 307 million 1986- 919 million 1991- 2.7 billion Know your market – SWOT analysis should be ongoing because the culture is dynamic and is always changing (this is why reebok passed nike in 1987) also realize that what you did today may make you successful today, but it may not make you successful tomorrow so you need to adapt quickly Problems: The Pump - there was a problem with the pricing strategy - $130 for the "pump." (supposed to be a slam dunk) These were the most expensive shoes on the market. They thought they could show their shoe for any price because they had always sold everything they had made Reebok did not consider *Elasticity – how market responds to an increase in price. Changing price - how much more inventory do I need? Determinants of elasticity: Number of substitutes available The more substitutes, the higher the elasticity People could switch to other shoes easily How much time you have to respond The longer the price change holds, the higher the elasticity Had time to look for other shoes Share of budget involved in the purchase decision The higher the percent of income that the product's price is of the consumer's income, the higher the elasticity Necessity or luxury
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