CLEP Principles of Marketing Study Notes

Calculate the markup as a percentage of the cost when

Info icon This preview shows pages 8–9. Sign up to view the full content.

Calculate the markup as a percentage of the cost when the product cost is $40 and the selling price is $60. The markup would be 50 %. The answer is 50%. Take the markup (60 - 40 = 20) and divide it by the cost (20 / 40). You divide it by the cost because you are calculating markup as a percentage of the cost. If you divide it by the selling price (20 / 60) you get 33.3%, so when the markup based on cost is 50%, the markup based on price is 33.3%. Product Adoption Process - steps buyers go through in accepting a product. Consists of 5 steps: 1. Awareness 2. Interest 3. Evaluation 4. Trial 5. Adoption- When a buyer accepts a product and decides to continue using it regularly. Buyer buys a product and decides to continue buying it; however, they still require reassurance or confirmation on a regular basis to stick with that product. This process is often taken into account in the commercialization phase of new product development, where companies try to promote the product to make people aware of the product, and even offer samples or trials to help them decide to purchase the product for the first time. Diffusion Process - divides into 5 categories the people who decide to adopt a product based on how soon after its initial release they purchase it. Progression through which an innovation travels through the social system . 5 Groups of People: (in order) 1. Innovators - first to buy a new product. Customers who are at the forefront of trends , particularly when it comes to technical products are known as innovators. Likely to have a higher disposable income and are often willing to pay a higher price to be first into the market. They make up about 2.5 percent of the population. 2. Early Adopters - Young, have an above average education and comprise approximately 13.5 percent of the population. 3. Early Majority - speed of adoption increases significantly. Made up of middle class consumers. They are more cautious in making purchases than the early adopters and they make up approximately 34 percent of the population. 4. Late Majority - a group skeptical of new ideas. Tends to be older, more conservative and traditional than the early majority . They also tend to be less educated and more skeptical about new products and ideas. This group makes up about 34 percent of the population. 5. Laggards - price conscious, low-income consumers who are the last to buy a product/services. Make up about 16 percent of the market. They tend to be older and resist change. Often this group will only adopt a new clothing style when other groups have abandoned the style and moved on to something else. Whereas the diffusion process tracks an innovation as it spreads throughout a social system, the adoption process is concerned with the individual 's decision making process. Product Positioning - refers to the decisions and activities intended to create and maintain a certain concept of the firm's product relative to competitive brands in customers' minds. Trying to manipulate the product's position, or image , relative to competing brands and products. The customers' concept of a product's attributes
Image of page 8

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

Image of page 9
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern