CLEP Principles of Marketing Study Notes

4 decline final stage where sales fall rapidly and

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4. Decline - final stage where sales fall rapidly, and the firm may plan to phase out the product. Where sales and profits are rapidly declining. Many firms will leave the market during this stage. Brand - a name, term, design, or symbol that identifies one seller's goods or services as distinct from those of other sellers. Can identify one specific product or all the products belonging to a certain organization. A brand name is the part of a brand which can be spoken, and allows expression of an identity and a "personality" for the product. Branding - helps buyers identify specific products that they do and do not like, and usually provides a certainty in customers' minds that they are getting a certain level of quality. Brand names - help buyers and sellers, but most importantly, brand names give products an identity, and serve to differentiate competitors. Customers tend to feel more confident when buying a familiar brand, so often marketers work to develop brand loyalty. There are different types of brands based on who is doing the branding. 1. Manufacturer brands (aka National Brands) - initiated by producers, and allow customers to associate the producer with its product at the point of purchase. Created by the product manufacturers. 2. Dealer Brands (aka Private brands) - initiated and owned by resellers. Created by resellers--wholesalers or retailers. Allow retailers or wholesalers to purchase products at a low price and sell them without disclosing the identity of the manufacturer. 3. Family Brand Strategy - same brand is used for several of the firm's products which are of comparable type and quality. 4. Individual Brand strategy - significant differences in product types and quality, so each product gets its own brand. There are two major types of branding strategies an organization can use: Family Brand and Individual Brand. Brand Familiarity - describes how consumers react to a brand name, and includes 5 Levels: 1. Brand Insistence - strongest positive reaction. Consumer will accept no substitutes for that brand 2. Brand Preference – target customers will usually choose 1 specific brand over others.
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3. Brand Recognition – customers remember brand name. 4. Brand Non-Recognition – consumers do not recall brand name. 5. Brand Rejection - Consumer recognizes the brand name and refuses to buy it. Brand equity refers to the value of a well known brand. Company or product's reputation in the marketplace. It is based on customer perceptions of quality based on experience and it translates into brand loyalty and repeat sales. Inelastic - If a company doubles the price of its product, and it barely affects its number of sales, then demand for its product is said to be inelastic. When demand curve is inelastic – both changes in price and revenues move in the same direction.
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