MKTG3501 Lecture Notes - Lecture 6: Experience Curve Effects, Product Differentiation, Marketing Mix
Document Summary
Marketing advantage: varaible costs, marketing expenses, operating expenses, market leader, product line advantage, channel advantage. Cost advantage: attributes to higher profitability, three forms of cost advantage, variable costs. Differentiation advantage: product differentiation, service quality, brand reputation. Organisations with lower unit costs who can achieve better margins than competitors. Variable/unit costs manufacturing costs, distribution costs sales commissions, transport. How variable costs achieved volume economies of scale as volume increases the cost per unit decreases known as experience curve effect. By buying more raw material in bulk they are able to obtain discounts / streamline manufacturing with product-line extensions. Learning effects: each unit produced provides additional learning and the opportunity to build the next unit more efficiently. Forms of cost advantage: forms of cost advantage, marketing expenses costs associated with aspects such as salesforce, advertising spend, operating expenses. Example: ikea, the swedish home furnishings manufacturer, uses a cost advantage as its marketing strategy.
