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BU121 Lecture Notes - Product Classification, Price Skimming, Planned Obsolescence

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Roopa Reddy

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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
Altering the speed of cycle
Slow down: new users, new uses
Speed up: planned obsolescence (ex. clothes-> buying new clothes
every season)
How markups are determined
Pricing strategies
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
*different markets classify products differently
* important to see your product as customer does
Promotional mix and integrated communications

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Factors affecting the mix- push vs. pull
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
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