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MKT 702 (30)
John Peco (22)
Lecture

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Department
Marketing
Course
MKT 702
Professor
John Peco
Semester
Winter

Description
Position the brand not the product. The brand is what is in people’s mind. The bullseye: holistic marketing. We need to have some sort of frame of reference to see where we have placed the brand in the perception of customers. Marketing research not necessarily needs to be done with a lot of money. No such thing as a perpetual sustainable advantage because our competitors move and morph and grow. Value is more than the price paid for a product, and is ultimately decided by the customer themselves. In the long term we influence how the customers understands who and what the brand is. Pricing Strategy So critical to our success as marketers, should not just be passed off to the accountants. I love lucy-double your money back. Can we make outrageous claims? Does this make sense in 2014? The value of eating out is much more than the meal cost itself. Price is more than just dollars, related to overall value and making outrageous claims is very dangerous, because our customers will interpret this in different ways. Part of it is, what’s the reference price offered by our competitors? Sometimes less dollars makes us suspicious (99cent steak). As a company whats our overall product strategy, on some cases we want to have a higher price in terms of penetration or lower price in maturity. What’s the customer willing to pay? There are times when we are willing to pay a premium for convenience. (evian water at airport) Cost is used wrong. How much did that cost? <<< NO! Cost refers to the cost of production, price is the amount the customer pays for the item. Internet affecting prices? Dramatically changed our approach to pricing. In the past, the only time we knew the price was at the store or in print. It was very difficult to do any price comparisons. If someone is a last minute traveller, that person is paying more for the seat than someone who is purchasing in advance. That person is paying a premium for the convenience in choosing within a few days. Shopbot: Best buy brick in mortar stores are In trouble because increasingly there is more electronic sales online. Consumers are going to the B&M stores to look at the features they’re after than shop for the lowest price of that online. Banana Republic: the same product at a lower price got no attention at all, then a product modelled on a person sold at triple the price sold out right away. Wine: we associate quality and price. Power of influence by putting numbers in front of our customers. This idea to persuade our customers. Terry’s dialogue <<< read Priceline: log in and name your own price on a hotel room. Sellers now get all kinds of consumer information and behaviours. Buying habits, that would not have been available previously. Trivago: following the same kind of model. Exactly as with priceline, taking that excess inventory and making it available to your bids. Common Pricing Mistakes: traditional industry margins are constantly under the influence of change. Following the industry norm or competitors pricing may be a mistake for us. Our accountants trying to establish price, would determine price without the holistic perspective. Consumer Psych: Seinfield haggling. There is a tendency as consumers to barter. As consumers we sometimes do want to feel like we can barter and “win” our price. How much did our friend pay for that? Constant relationship between quality and price. (if it came from china, it can’t be as good from india-carpets) The .99 ending plays a role in our minds. Its been a marketing technique for generations. JC Penny tried changing to rounded and it failed miserably. Reference Points: “fair price”-water, typical price- new pair of shoes typical 100$, not so much 300$. Last price paid, usual discounted price- no frills. Tiers in Pricing: Marriott and different tiers in pricing for their hotels. Compete in many categories (discount, elite) these sub-brands have a different role and price strategies. (autos, cellphone providers) Does it make sense for a designer who sells at a premium to also have distribution in Costco. Because they have isolated the brand offering it may work. Also Costco sells the higher end brands of each product (Duracell, tide) Step 1. Select pricing objective -maybe be a survival motive in the pricing decision. You can do this differently, either a higher price to Market skimming- high price strategy and are looking to look max
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