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Marketing (reaching the customer).doc

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Wilfrid Laurier University
Roopa Reddy

Marketing (Reaching the Customer) Monday, February 04, 2013 1:38 PM Classifying consumer products vs classifying business products Stages of life cycle: • Indicators of stage • Industry/product • Altering the speed of cycle • Slow down: new users, new uses • Speed up: planned obsolescence (ex. clothes-> buying new clothes every season) Pricing • Objectives • How markups are determined • Pricing strategies Distribution/place Channels and marketing intermediaries Alternative channel arrangements and strategic channel alliances Functions of distribution channels Intensity of distribution - related to product classification Product Classification (table) Used up vs. lasts a long time Very Little/ Min. effort No effort Max. Effort Considerable Effort *different markets classify products differently * important to see your product as customer does Promotion • Objectives • Promotional mix and integrated communications • Factors affecting the mix- push vs. pull Trends Keys to Success 1. Provide a unique benefit 2. Convince customer that product provides unique benefit (through product, pricing, promotion, distribution/place decisions) • Integrated consistent systems of activities • All parts of organization must have clear idea of unique benefit Core Benefit Proposition (CBP) •  Clear, concise, statement of product's unique benefit or value proposition Four P's • Product (includes both tangible and intangible), place, price, promotion Total Product Concept • Physical features necessary to support CBP • Total package of benefits/value package as seen from eyes of customer • Brand, package, service, warranty, delivery, credit, atmosphere, image/reputation, accessibility Branding: what is a brand? • "a collection of perceptions in mind of consumer" • Built not only through effective communications or appealing logos- built through total experience that product offers • Brand name • Communicate CBP (core benefit proposition) • Move customer through stages of recognition  Non-recognition, brand recognition, brand recall/awareness, bran preference, brand loyalty • Do loyalty programs create loyalty? • Gives incentives to be a repeat customer, but real loyalty is insisting on a particular brand and influencing people around them • Net promoter score: measures how effective their loyalty programs are Brand Insistence Price • Objectives • Price is important in determining how much firm earns, revenue pays for every activity of company, what's left over is profit • Chosen price must neither be too high nor too low • Price must equal perceived value to target consumers • Maximize profits, achieve target return on investment, offer good value at fair price • Approaches: • Cost-based: mark-up (text calculation) • Competitive-based: market share • Consumer-based: value • Most important: support CBP (core benefit proposition), test pricing • Specific Strategies/Tactics • Price skimming  Introducing new product on market with high price then lowering price over time  Four advantages: • High initial price can find out what buyers willing to pay • If consumer find introductory price too high, it can be lowered • High introductory price can create image of quality and prestige • When price lowered later, consumers might think they're getting bargain  Disadvantage: • high prices attract competition • Penetration pricing  New products at low prices in hope of achieving large sales volume  Advantages: • Low initial price might induce consumers to
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