CLEP Principles of Marketing Study Notes

Calculate the markup as a percentage of the selling

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Calculate the markup as a percentage of the selling price when the product costs $50 and its selling price is $100. The markup percentage in this case would be 50 %. The markup as a percentage of the selling price would be 50%. The first step in calculating this is determining the markup . Subtract the cost from the price to see how much more the company is charging than it cost them--the markup. Then you take this value (100 - 50 = 50) and divide it by the selling price (50 / 100 = 0.50). Product Life Cycle - A product goes through a cycle of growth and decline, from the time it is introduced into the marketplace until it is terminated. 4 Stages: 1. Introduction - product makes its first appearance in the marketplace. During this stage, the profits are below zero, because the company must cover the initial costs associated with promotion and distribution. When the product begins to turn a profit, it enters the next stage, the Growth stage. 2. Growth - sales rise rapidly and profits reach a peak and then begin to decline. Very few products make it past the Introduction stage, which is the commercialization of a product. However, once it starts making a profit, it is considered the growth stage. Competition begins to appear during the Growth stage and can determine the product's life expectancy. 3. Maturity - sales peak and begin to decline and profits continue to decline. The Maturity stage is marked by a peaking of sales and then a decline. The difference between maturity and growth stages is that in the growth stage, *profits * peak and begin to decline as more money is spent due to heavier competition, while in the maturity stage, *sales* peak and begin to decline. 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.
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Calculate the markup as a percentage of the selling price...

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