CLEP Principles of Marketing Study Notes

Elastic on the other hand if there was a significant

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Elastic - On the other hand, if there was a significant drop in sales, then demand would be elastic. When demand is elastic, a small change in price can mean a noticeable change in sales. Licensed Brand – well established brand name that other sellers pay to use. (giving another firm the right to a trademark/brand name in exchange for a yearly fee (royalty). Trademark - a legal designation, such as a brand name, symbol or other device used to indicate that the owner has exclusive use of a brand or part of a brand. Used to identify products. Registered trademarks are legally protected. 3 benefits of product packaging: 1. Protection – protects the contents 2. Promotion last chance to influence customer’s decision. Packaging seeks to promote the product through convenient packaging or by communicating its features and benefits. 3. Information - involves providing product contents, nutritional information, etc. Some information is required by law; other information allows consumers to compare brands and evaluate a product by its packaging. PART IV Distribution - activities that make products available to customers when and where they want to purchase them. Choosing which channels of distribution to use is a major part of developing a marketing strategy. A Channel of Distribution (aka: Marketing Channel) - group of individuals and organizations that direct the flow of products from producers to customers. Channels of distribution make products available at the right time, in the right place, and in the right quantity by providing functions such as transportation and inventory management. 3 Functions of Distribution: 1. Transportation 2. Inventory management 3. Customer service Industry sales peak during the maturity stage of the product life cycle. During the maturity stage, industry sales peak and begin to decrease . During the growth stage, industry profits peak. In the growth stage, profits peak, but then as more competitors enter the market, prices go down and promotional expenses go up--this means ultimately more sales in the maturity stage, but less profits. Most channels of distribution involve marketing intermediaries , or middlemen, who link producers to other middlemen or to consumers. The middlemen are known as "intermediaries." There are 2 types of Marketing Intermediaries: 1. Merchants - businessperson who trades in commodities that were produced by others to earn a profit 2. Functional middlemen Services Marketing – services are distinct in 4 ways from manufactured goods: 1. Intangible – not experienced by buyers until services are done 2. Inseparability - services cannot be separated from person providing it 3. Perishable – services cannot be inventoried, returned or resold 4. Variable – not performed in same way each & every time. Raises level of perceived risk for buyers.
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