MKT 337 Lecture Notes - Lecture 11: Umbrella Brand, Product Bundling, Product Differentiation
Document Summary
Product life cycle: stages a new product goes through in the marketplace: introduction, growth, maturity and decline. Introduction: when a product is introduced to its intended target market. Trial- the initial purchase of a product by a consumer. Primary demand: desire for the product class rather than for a specific brand. Selective demand: preference for a selected brand. Skimming price strategy: initial price is high to help the company recover the costs of development as well as capitalize on the price insensitivity. Penetration price strategy: discourages competitive entry and helps to build unit volume. The result of more competitors and more aggressive pricing is that profit usually peaks during the growth stage. Repeat purchasers: people, who tried the product, were satisfied and bought it again. Changes appear in the product in the growth stage. To help differentiate a company"s brand from competitors, an improved version or new features are added to the original design and product proliferation occurs.
