1. 3 Steps of Product Management 
    • 1.Develop Product Objectives
    • 2.Design Product Strategies
    • 3.Make Tactical Product Deisions 
  2. What is the differance between tacitcs and strategies?
    • Tactic = short term 
    • Strategy = Long term (5 year outline)
  3. Objectives for Individual Products
    • 1. Introduce New Product
    • 2. Regional Product: Introduce Nationally
    • 3. Mature Product: Increase consumer enthusiasm for the    product
  4. Product Line Strategy
    A firm's total product offering designed to satisfy a single need or desire of target customers

    Lenth(Depth) of a product line 
  5. Product Mix Strategy
    The total set of all products a firm offers for sale, the entire range of products

    Width of Product Mix
  6. 3 Product Line Strategies 
    • Upward Line Stretch - Adding a higher end product
    • Downward Line Stretch - Adding a lower end product
    • Two-Way Line Stretch - Both products
  7. Contracting a Product Line
    The product is no long in use, there for I drop it from the line

    ie. walkman
  8. Full Line vs. Limited Line Strategies
    • Full Line - Ipod nano in every color every storage size
    • Limited Line - Google Nexus - one color one storage size
  9. Product Filling Out
    Increase the depth of product lines to attract buyers with different preferances, and increase slaes and profits by further segmenting the market. 

    Ipod nano 
  10. Product Objectives
    Quality: ability satisfies consumer's expecations. ie. durable, reliable, verstile, product safety

    Consistency: the confidence that they product will be made that way every time every where else 
  11. ISO 9000
    Voluntary standards for quality management set by International Organization for Standardization 
  12. ISO 14000
    Meeting standards on environmental impact management
  13. Six Sigma Methodology
    No more than 3.4 defects per million (getting it right 99.9997% of the time) 
  14. 4 Stage of Product Lifestyle
    • Introduction - no profits
    • Growth - profits increase and peak
    • Maturity - sales peak
    • Decline - market shrinks/ sales fall
  15. Introduction Stage
    • Product - single company produces
    • Sales - Increas steady and slow
    • Profits - Negative
    • Pricing - high to recover from production and marketing
    • Marketing - Informatin customers
  16. Growth Stage
    • Sales - Rapid Increase
    • Profits - Increase and Peak
    • Price - Competition may appear
    • Marketing - Introduce product variations
    • Advertising - Heavy against competitors
  17. Maturity Stage
    • Sales - Peak, level off
    • Profits - Margin Narrows
    • Competition - Intense
    • Product - Mostley replacement products
    • Distribution - Sell through all suitable retailers
    • Markting - Attract new users 
  18. Decline Stage
    • Sales - Decline
    • Profit - Decline
    • Comepetors - Large Number
    • Product - Should it be kept?
    • Marketing - Keep product, phase out gradually, or drop product immediently 
  19. 3 Tactics of Product Decision
    • Branding
    • Packaging
    • Labeling
  20. Brand 
    A name, term, symbol, or any other unique element of a product that identifies one firm's product(s) and sets it apart from the competition
  21. Trademark
    The legal term for brand name, brand market, or trade character; legally registered by a government and obtain protection of exclusive use in that country 
  22. Brand Equity
    a brand's value to its organization over and above the value of the generic version of the product 
  23. Brand Licencing
    one firm sells the right to use a legally protected brand name for a specific purpose and for a specific period of time 
  24. Co- branding vs. Ingredient 
    when to brands comet together to make a product

    when two brands come together and one of two is apart of the product 
  25. Basic Functions of Product Packaging (3)
    The covering or container for a product that provides 1) product protection, 2) facilitates product use and storage and 3) supplies important marketing communication 
  26. FDA's requirment on food labeling
    Food and Drug Administration requires food labels to tell how much fat, saturated fat, cholestrol, calories, carbs. protein, trans fat, and vitamins are in each product serving.
  27. Price
    is a value that customers give up/exchange to obtain a desired product 

    payment may be in the form of anything that has value to the other party

    consumers rank "reasonable price" as most important consideration in purchase 
  28. Steps in Price Planning
    • 1. Develop Pricing Objective
    • 2. Esitimate Demand
    • 3. Determine Costs
    • 4. Evaluate the Pricing Environment
    • 5. Choose a Pricing Strategy
    • 6. Develop Pricing Tactics 
  29. Estimate Demand
    Want to figure customers desire for product. 

    • a) Total (market) demand = esitmated potential buyers X average amount of each buyer's purchase
    • b) what is the company's share of the total market? 
  30. Demand Curve
    Law of Demand: as price goes up, quantity demanded goes down. 
  31. Normal Products vs. Prestige Products
    Normal: Demand increases as price decrease

    Prestige: Demand decreases as price decreases 
  32. Breakeven Analysis
    Determining the number of units a firm must produce and sell at a given price to cover all its costs (How many units of this product must I sell as this price to break even) 
  33. Evaluating the Pricing Environment
    • The economy
    • -broad economic trends
    • -recessions/inflation
    • The competition
    • Consumer trends
    • Other determinants 
    • -stages in product life cycle 
    • -distrubution
    • -promotion strategies
    • -impact of internet shoppin
  34. Price Stratefy based on COST
    • Cost - Plus  pricing
    • selling price = cost + markup
  35. Pricing Strategies based on DEMAND
    • Target costing pricing
    • Selling price = cost + markup
  36. Pricing Strategy based on COMPETITION
    • Price at or near, below or above competition
    • Price leadership
    • -industry giant announces price, and competitors get in line or drop out 
  37. Pricing Strategy based on CUSTOMERS' NEED
    • Value pricing or EveryDay Low Price (EDLP)
    • pricing strategy in which a firm sets prices that provides ultimate value to customers 
  38. New Product Pricing
    • Skimming Pricing - effective when demand is inelastic
    • Penetration - consumers are price - sensitive, low prices also discourage competators
    • Trial Pricing - Offers a low price for a limited period of time
  39. Individual Product Pricing
    Two part pricing: offering two seperate types of payments to purchase product

    Payment Pricing: breaking total price into smaller amounts payable over time. 
  40. Multiple Product Pricing
    Price Bundling: selling two or more goods or services as a single package for one price

    Captive Pricing: pricing two products that work only when used together
  41. Distribution Based Pricing
    FOB Pricing - FOB Origin: Customer pays, FOB Delivered: Seller pays

    Freight Absorption Pricing: Seller takes on all of cost of shipping

    Uniform Delivered Pricing: Average shipping cost is added to price for all customers 
  42. List Price (suggested retail price) 
    Price that manufactures sets as approproate for end consumer to pay
  43. Trade or Functional Discounts
    set percentage discounts off list price for each channel level
  44. Quantity Discounts
    reduced prices for purchases of larger quanitities
  45. Cash Discounts
    enticements to customers to pay bills quickly (e.g 2% 10 days, net 30 days)
  46. Seasonal Discounts
    price reductions offered during certain times of years 
  47. Buyers pricing Expectation
    Price/Quality Inferences: consumers assume high-priced product has higher quality 

    • Internal reference price: consumers use a price/price range to evaluate product's cost 
    • -assimiliation effect
    • -contrast effect 
  48. Psychological Pricing Strategies
    • Odd-even pricing: prices ending in 99 rather than 00 lead to increase sales. 
    • -prestige products usually don't use odd pricing. 
  49. Price Lining
    items in a product line sell at different price points e.g. $25, $50, $75 and no prices in between

    groups of prices within a firm's products to lessen consumer choices, consumers likely pick the middle price. 
  50. Breaking Bulk
    Channel members purchase large quantities from manufacturers and sell smaller quantities to many different customers 
  51. Creating Assortments
    channel members provide a variety pf products on one location 
  52. Types of Distribution Channels
    • Consumer Market Channels
    • - manufacturers - consumer (DIRECT) 
    • -manufacturers - retailer - consumer
    • - manufacturers - wholesaler - retailer - consumer

    • Business - to Business channels
    • -manufacturer - business customer
    • -manufacturer - industrial distributer - business customer
  53. Wholesaling consists of...
    all firms that handle the flow of products from the manufactureers to retailers or business customers 
  54. Retailing is....
    • the final stop on the distribution path
    • the process by which products are sold to consumers for personal use 
  55. Channel Strategies - Lenth 
    • Short Channels essential 
    • - highely technical items
    • -perishable items
    • - bulky items

    • Long Channenls permissible
    • -smalll, non perishable, everyday purchases 
  56. Channel Strategies - Width
    • Exlusive - only one retailer in trading area sells product
    • Selective - moderate number of retailers in each trading area sell the product
    • Intensive - all possible pretailers in the trading area sell the products 
  57. Chanel Strategies - System Control
    Conventional - multi level distribution channel in which members work independently of one another

    Horizontal - two or more firms at the same channel level agree to work together to move their products to the consumer

    Vertical - channel in which there is cooperation among channel member at two or more different levels of the channel 
  58. Promotion and Its Goals
    Informs --> Reminds --> Persuades --> Builds Relationships
  59. Elements of Promotion Mix
    • Direct Marketin - interaction between company & customer
    • Personal Selling - same 
    • Advertising- nonpersonal comm. from sposor using mass media
    • Sales Promotion- short term incentives to encourage sales during specific time
    • PR and Publicity - portrays and create/maintain a positive image of firm and its products 
Card Set
Marketing 101